II 

112TH CONGRESS 

1ST SESSION S. 143 

To amend the Internal Revenue Code of 1986 to clarify the treatment of 

church pension plans, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

JANUARY 25 (legislative day, JANUARY 5), 2011 

Mrs. HUTCHISON (for herself and Mr. CARDIN) introduced the following bill; 

which was read twice and referred to the Committee on Finance 

A BILL 

To amend the Internal Revenue Code of 1986 to clarify 

the treatment of church pension plans, and for other 

purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Church Plan Clarifica5 tion Act of 2011’’. 

6 SEC. 2. APPLICATION OF CONTROLLED GROUP RULES TO 

7 CHURCH PLANS. 

8 (a) IN GENERAL.—Section 414(c) of the Internal 

9 Revenue Code of 1986 is amended— 


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1 (1) by striking ‘‘For purposes’’ and inserting 

2 the following: 

3 ‘‘(1) IN GENERAL.—For purposes’’, and 

4 (2) by adding at the end the following new 

5 paragraph: 

6 ‘‘(2) CHURCH PLANS.—For purposes of this 

7 subsection, in determining whether an employer who 

8 is otherwise eligible to participate in a church plan 

9 is treated as a member of a group of entities under 

10 common control, such employer (including an orga11 nization described in subsection (e)(3)(A)) shall not 

12 be treated as under common control with another 

13 entity if, based on all of the facts and circumstances, 

14 the day-to-day financial and operational activities 

15 are not under common control. In determining if 

16 such activities are under common control, the Sec17 retary shall consider whether the entities have been 

18 historically viewed as distinct entities within the 

19 church or convention or association of churches.’’. 

20 (b) EFFECTIVE DATE.—The amendments made by 

21 this section shall apply to taxable years beginning before, 

22 on, or after the date of the enactment of this Act. 


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1 SEC. 3. APPLICATION OF CONTRIBUTION AND FUNDING 

2 LIMITATIONS TO 403(b) GRANDFATHERED DE3 FINED BENEFIT PLANS. 

4 (a) IN GENERAL.—Section 251(e)(5) of the Tax Eq5 uity and Fiscal Responsibility Act of 1982 (Public Law 

6 97–248), is amended— 

7 (1) by striking ‘‘403(b)(2)’’ and inserting 

8 ‘‘403(b)’’, and 

9 (2) by inserting before the period at the end the 

10 following: ‘‘, and shall be subject to the applicable 

11 limitations of section 415(b) of such Code as if it 

12 were a defined benefit plan under section 401(a) of 

13 such Code and not the limitations of section 415(c) 

14 of such Code (relating to limitation for defined con15 tribution plans).’’. 

16 (b) EFFECTIVE DATE.—The amendments made by 

17 this section shall apply as if included in the enactment 

18 of the Tax Equity and Fiscal Responsibility Act of 1982. 

19 SEC. 4. AUTOMATIC ENROLLMENT BY CHURCH PLANS. 

20 (a) IN GENERAL.—For purposes of section 514(e) of 

21 the Employee Retirement Income Security Act of 1974 

22 (29 U.S.C. 1114(e)), the term ‘‘plan’’ shall include an em23 ployee benefit plan which is a church plan (as defined in 

24 section 3(33) of such Act or section 414(e) of the Internal 

25 Revenue Code of 1986). 


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1 (b) EFFECTIVE DATE.—This section shall take effect 

2 on the date of the enactment of this Act. 

3 SEC. 5. ALLOW CERTAIN PLAN TRANSFERS AND MERGERS. 

4 (a) IN GENERAL.—Section 414 of the Internal Rev5 enue Code of 1986 is amended by adding at the end the 

6 following new subsection: 

7 ‘‘(y) CERTAIN PLAN TRANSFERS AND MERGERS.— 

8 ‘‘(1) IN GENERAL.—Under rules prescribed by 

9 the Secretary, except as provided in paragraph (2), 

10 no amount shall be includible in gross income by 

11 reason of— 

12 ‘‘(A) a transfer of all or a portion of the 

13 account balance of a participant or beneficiary, 

14 whether or not vested, from a plan described in 

15 section 401(a), or a retirement income account 

16 described in section 403(b)(9), which is a 

17 church plan described in section 414(e) to a re18 tirement income account described in section 

19 403(b)(9), if such plan and account are both 

20 maintained by the same church or convention or 

21 association of churches; 

22 ‘‘(B) a transfer of all or a portion of the 

23 account balance of a participant or beneficiary, 

24 whether or not vested, from a retirement in25 come account described in section 403(b)(9) to 


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1 a plan described in section 401(a), or a retire2 ment income account described in section 

3 403(b)(9), which is a church plan described in 

4 section 414(e), if such plan and account are 

5 both maintained by the same church or conven6 tion or association of churches, or 

7 ‘‘(C) a merger of a plan described in sec8 tion 401(a), or a retirement income account de9 scribed in section 403(b)(9), which is a church 

10 plan described in section 414(e) with a retire11 ment income account described in section 

12 403(b)(9), if such plan and account are both 

13 maintained by the same church or convention or 

14 association of churches. 

15 ‘‘(2) LIMITATION.—Paragraph (1) shall not 

16 apply to a transfer or merger unless the partici17 pant’s or beneficiary’s benefit immediately after the 

18 transfer or merger is equal to or greater than the 

19 participant’s or beneficiary’s benefit immediately be20 fore the transfer or merger. 

21 ‘‘(3) QUALIFICATION.—A plan or account shall 

22 not fail to be considered to be described in sections 

23 401(a) or 403(b)(9) merely because such plan or ac24 count engages in a transfer or merger described in 

25 this subsection. 


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1 ‘‘(4) DEFINITION OF CHURCH.—For purposes 

2 of this subsection, the term ‘church’ includes an or3 ganization described in subparagraph (A) or (B)(ii) 

4 of subsection (e)(3).’’. 

5 (b) EFFECTIVE DATE.—The amendment made by 

6 this section shall apply to transfers or mergers occurring 

7 after the date of the enactment of this Act. 

8 SEC. 6. INVESTMENTS BY CHURCH PLANS IN COLLECTIVE 

9 TRUSTS. 

10 (a) IN GENERAL.—In the case of— 

11 (1) a church plan (as defined in section 414(e) 

12 of the Internal Revenue Code 1986), including a 

13 plan described in section 401(a) of such Code and 

14 a retirement income account described in section 

15 403(b)(9) of such Code, and 

16 (2) an organization described in section 

17 414(e)(3)(A) of such Code the principal purpose or 

18 function of which is the administration of such a 

19 plan or account, 

20 the assets of such plan, account, or organization (includ21 ing any assets otherwise permitted to be commingled for 

22 investment purposes with the assets of such a plan, ac23 count, or organization) may be invested in a group trust 

24 otherwise described in Internal Revenue Service Revenue 

25 Ruling 81–100 (as modified by Internal Revenue Service 


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1 Revenue Ruling 2004–67), or any subsequent revenue rul2 ing that supersedes or modifies such revenue ruling, with3 out adversely affecting the tax status of the group trust, 

4 such plan, account, or organization, or any other plan or 

5 trust that invests in the group trust. 

6 (b) EFFECTIVE DATE.—This section shall apply to 

7 investments made after the date of the enactment of this 

8 Act. 

Æ 


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