I 

111TH CONGRESS 

1ST SESSION H. R. 4126 

To amend the Internal Revenue Code of 1986 to prevent the overstatement 

of benefits payable to non-highly compensated employees under qualified 

plans, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

NOVEMBER 19, 2009 

Mr. DOGGETT (for himself, Mr. STARK, Mr. MCDERMOTT, Mr. LEWIS of 

Georgia, Mr. PASCRELL, Ms. LINDA T. SA ́NCHEZ of California, Mr. 

BRALEY of Iowa, Mr. HINCHEY, Mr. MASSA, Ms. SCHAKOWSKY, Mr. 

WELCH, Mr. GENE GREEN of Texas, Mr. DEFAZIO, Mr. MCGOVERN, Mr. 

TIERNEY, Mr. YARMUTH, and Mr. BLUMENAUER) introduced the following bill; which was referred to the Committee on Ways and Means 

A BILL 

To amend the Internal Revenue Code of 1986 to prevent 

the overstatement of benefits payable to non-highly compensated employees under qualified 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 ‘‘Retirement Fairness 

5 Act of 2009’’. 


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1 SEC. 2. TREATMENT OF PART TIME EMPLOYEES IN DETER2 MINING MINIMUM COVERAGE REQUIRE3 MENTS. 

4 (a) IN GENERAL.—Paragraph (6) of section 410(b) 

5 of the Internal Revenue Code of 1986 is amended by re6 designating subparagraph (G) as subparagraph (H) and 

7 by inserting after subparagraph (F) the following new 

8 subparagraph: 

9 ‘‘(G) PART TIME AND LESS THAN FULL

10 YEAR EMPLOYEES.—For purposes of deter11 mining a number of employees under this sub12 section, in the case of an employee who has not 

13 completed 2,080 hours of service for the year 

14 and is not a highly compensated employee, such 

15 employee shall be counted as a fraction— 

16 ‘‘(i) the numerator of which is an 

17 amount equal to the number of hours of 

18 service of the employee during the year, 

19 over 

20 ‘‘(ii) 2,080.’’. 

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

22 this section shall apply to plan years beginning after the 

23 date of the enactment of this Act. 

24 SEC. 3. MODIFICATION OF RULES RELATING TO NON25 DISCRIMINATION REQUIREMENTS. 

26 (a) IN GENERAL.— 


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1 (1) ONLY VESTED CONTRIBUTIONS OR BENE2 FITS TAKEN INTO ACCOUNT.—Paragraph (5) of sec3 tion 401(a) of the Internal Revenue Code of 1986 is 

4 amended by adding at the end the following new 

5 subparagraph: 

6 ‘‘(H) BENEFITS AND CONTRIBUTIONS

7 TAKEN INTO ACCOUNT.—Subparagraph (B) and 

8 paragraph (4) shall be applied by taking into 

9 account— 

10 ‘‘(i) all contributions and benefits of 

11 highly compensated employees under the 

12 plan, and 

13 ‘‘(ii) all nonforfeitable contributions 

14 and benefits of employees who are not 

15 highly compensated employees under the 

16 plan.’’. 

17 (2) ELIMINATION OF CROSS-TESTING.—Para18 graph (5) of section 401(a) of such Code, as amend19 ed by this Act, is amended by adding at the fol20 lowing new subparagraphs: 

21 ‘‘(I) ELIMINATION OF CROSS TESTING.— 

22 For purposes of this paragraph and paragraph 

23 (4)— 


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1 ‘‘(i) IN GENERAL.—The non2 discrimination requirements of paragraph 

3 (4)— 

4 ‘‘(I) in the case of a defined con5 tribution plan, may only be satisfied 

6 based on contributions to such plan, 

7 and 

8 ‘‘(II) in the case of a defined 

9 benefit plan, may only be satisfied 

10 based on benefits provided under the 

11 plan. 

12 ‘‘(ii) SPECIAL RULE FOR CASH BAL13 ANCE PLANS.—Notwithstanding clause 

14 (i)(II), accrued benefits calculated as the 

15 balance of a hypothetical account (or sub16 stantially similar accruals) under an appli17 cable defined benefit plan (as defined in 

18 section 411(a)(13)(C)) shall be treated as 

19 contributions. 

20 ‘‘(J) REGULATIONS.—The Secretary may 

21 prescribe regulations that allow, in such cir22 cumstances as the Secretary determines appro23 priate, a defined contribution plan, or an appli24 cable defined benefit plan (as defined in section 

25 411(a)(13)(C)), to satisfy the nondiscrimination 


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1 requirements of paragraph (4) based on bene2 fits, rather than only based on contributions. 

3 Any such regulations shall provide that, in all 

4 such circumstances, the allocation formula 

5 under the defined contribution plan (or the ben6 efit formula in the case of an applicable defined 

7 benefit plan) must be reasonably designed to 

8 fund or provide an accumulated benefit for each 

9 participant, when expressed as an annual ben10 efit commencing at normal retirement age, that 

11 as of any date would not be less than the accu12 mulated benefit of any similarly situated young13 er participant when so expressed.’’. 

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

15 this section shall apply to plan years beginning after the 

16 date of the enactment of this Act. 

Æ 


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