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[Congressional Bills 105th Congress]
[From the U.S. Government Publishing Office]
[S. 14 Introduced in Senate (IS)]

105th CONGRESS
  1st Session
                                 S. 14

To provide for retirement savings and security, and for other purposes.

_______________________________________________________________________

                   IN THE SENATE OF THE UNITED STATES

                            January 21, 1997

 Mr. Daschle (for himself, Mrs. Boxer, Mr. Kennedy, Mr. Bingaman, Ms. 
 Moseley-Braun, Mr. Rockefeller, Mr. Graham, Ms. Mikulski, Mr. Kerry, 
   Mr. Reid, Mr. Durbin, Mr. Inouye, Mr. Torricelli, and Mr. Breaux) 
introduced the following bill; which was read twice and referred to the 
                          Committee on Finance

_______________________________________________________________________

                                 A BILL

 
To provide for retirement savings and security, and for other purposes.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Retirement Security Act of 1997''.

SEC. 2. TABLE OF CONTENTS.

    The table of contents for this Act is as follows:

Sec. 1. Short title.
Sec. 2. Table of contents.
                  TITLE I--PENSION ACCESS AND COVERAGE

Sec. 100. Amendment of 1986 Code.
      Subtitle A--Improved Access to Individual Retirement Savings

Chapter 1--Contributions To Individual Retirement Plans Through Payroll 
                               Deductions

Sec. 101. Definitions.
Sec. 102. Establishment of payroll deduction and investment system.
Sec. 103. Contributions to individual retirement plans.
Sec. 104. Investment options.
Sec. 105. Accounting and information.
Sec. 106. Administrative costs.
Sec. 107. Fiduciary responsibilities; liability and penalties; bonding; 
                            investigative authority.
Sec. 108. Selection of contractor.
  Chapter 2--Nonrefundable Tax Credit for Contributions to Individual 
                          Retirement Accounts

Sec. 111. Nonrefundable tax credit for contributions to individual 
                            retirement plans.
Chapter 3--Expanded Individual Retirement Accounts to Increase Coverage 
                      subchapter a--ira deduction
Sec. 121. Increase in income limitations.
Sec. 122. Inflation adjustment for deductible amount and income 
              subchapter b--distributions and investments
Sec. 131. Distributions from IRAs may be used without additional tax to 
                            purchase first homes, to pay higher 
                            education, or to pay financially 
                            devastating medical expenses.
Sec. 132. Contributions must be held at least 5 years in certain cases.
            Chapter 4--Periodic Pension Benefits Statements

Sec. 141. Periodic pension benefits statements.
       Subtitle B--Improved Fairness in Retirement Plan Benefits

Sec. 151. Amendments to simple retirement accounts.
Sec. 152. Nondiscrimination rules for qualified cash or deferred 
                            arrangements and matching contributions.
Sec. 153. Definition of highly compensated employees.
             Subtitle C--Improving Retirement Plan Coverage

Sec. 161. Credit for pension plan start-up costs of small employers.
Sec. 162. Treatment of multiemployer plans under section 415.
Sec. 163. Exemption of mirror plans from section 457 limits.
Sec. 164. Special rules for self-employed individuals.
Sec. 165. Immediate participation in the thrift savings plan for 
                            Federal employees.
Sec. 166. Modification of 10 percent tax for nondeductible 
                            contributions.
               Subtitle D--Simplifying Plan Requirements

Sec. 171. Full funding limitation for multiemployer plans.
Sec. 172. Elimination of partial termination rules for multiemployer 
                            plans.
Sec. 173. Modifications to nondiscrimination and minimum participation 
                            rules with respect to governmental plans.
Sec. 174. Elimination of requirement for plan descriptions and the 
                            filing requirement for summary plan 
                            descriptions and descriptions of material 
                            modifications to a plan; technical 
                            corrections.
Sec. 175. New technologies in retirement plans.
                           TITLE II--SECURITY

Sec. 200. Amendment of ERISA.
                     Subtitle A--General Provisions

Sec. 201. Section 401(k) investment protection.
Sec. 202. Requirement of annual, detailed investment reports applied to 
                            certain 401(k) plans.
Sec. 203. Study on investments in collectibles.
Sec. 204. Qualified employer plans prohibited from making loans through 
                            credit cards and other intermediaries.
Sec. 205. Multiemployer plan benefits guaranteed.
Sec. 206. Prohibited transactions.
Sec. 207. Substantial owner benefits.
Sec. 208. Reversion report.
Sec. 209. Development of additional remedies.
                     Subtitle B--ERISA Enforcement

Sec. 211. Repeal of limited scope audit.
Sec. 212. Additional requirements for qualified public accountants.
Sec. 213. Clarification of fiduciary penalties.
Sec. 214. Conforming amendments relating to ERISA enforcement.
                         TITLE III--PORTABILITY

Sec. 301. Faster vesting of employer matching contributions.
Sec. 302. Rationalize the restrictions on distributions from 401(k) 
                            plans.
Sec. 303. Treatment of transfers between defined contribution plans.
Sec. 304. Missing participants.
                   TITLE IV--TOWARD EQUITY FOR WOMEN

Sec. 401. Individual's participation in plan not treated as 
                            participation by spouse.
Sec. 402. Modifications of joint and survivor annuity requirements.
Sec. 403. Division of pension benefits upon divorce.
Sec. 404. Deferred annuities for surviving spouses of Federal 
                            employees.
Sec. 405. Payment of lump-sum credit for former spouses of Federal 
                            employees.
Sec. 406. Women's pension toll-free phone number.
             TITLE V--DATE FOR ADOPTION OF PLAN AMENDMENTS

Sec. 501. Date for adoption of plan amendments.

                  TITLE I--PENSION ACCESS AND COVERAGE

SEC. 100. AMENDMENT OF 1986 CODE.

    Except as otherwise expressly provided, whenever in this title an 
amendment or repeal is expressed in terms of an amendment to, or repeal 
of, a section or other provision, the reference shall be considered to 
be made to a section or other provision of the Internal Revenue Code of 
1986.

      Subtitle A--Improved Access to Individual Retirement Savings

CHAPTER 1--CONTRIBUTIONS TO INDIVIDUAL RETIREMENT PLANS THROUGH PAYROLL 
                               DEDUCTIONS

SEC. 101. DEFINITIONS.

    For purposes of this chapter:
            (1) Contractor.--The term ``contractor'' means the private 
        entity awarded a contract by the Secretary of Labor under 
        section 108.
            (2) Contribution certificate.--The term ``contribution 
        certificate'' means a certificate submitted by an eligible 
        employee to the employee's employer and the contractor which--
                    (A) identifies the employee by name, address, and 
                social security number,
                    (B) includes a certification by the employee that 
                the employee is an eligible employee, and
                    (C) identifies the amount of the contribution to an 
                individual retirement plan the employee wishes to make 
                for the taxable year through a payroll deduction, not 
                to exceed the amount allowed under section 408 of the 
                Internal Revenue Code of 1986 to an individual 
                retirement plan for such year.
            (2) Eligible employee.--
                    (A) In general.--The term ``eligible employee'' 
                means, with respect to any taxable year, an employee 
                whose employer does not sponsor a qualified retirement 
                plan (as defined in section 4974(c) of the Internal 
                Revenue Code of 1986.
                    (B) Employee.--The term ``employee'' does not 
                include an employee as defined in section 401(c)(1) of 
                such Code.
            (3) Individual retirement plans.--
                    (A) In general.--The term ``individual retirement 
                plan'' has the meaning given the term by section 
                7701(a)(37) of the Internal Revenue Code of 1986).
                    (B) Application of rules.--Rules applicable to an 
                individual retirement plan under the Internal Revenue 
                Code of 1986 are applicable to an individual retirement 
                plan referred to in this chapter.

SEC. 102. ESTABLISHMENT OF PAYROLL DEDUCTION AND INVESTMENT SYSTEM.

    The contractor shall establish a system under which--
            (1) eligible employees, through employer payroll 
        deductions, may make contributions to individual retirement 
        plans, and
            (2) amounts in the individual retirement plans are invested 
        as provided in section 104.

SEC. 103. CONTRIBUTIONS TO INDIVIDUAL RETIREMENT PLANS.

    (a) In General.--The system established under section 102 shall 
provide that contributions made to an individual retirement plan for 
any taxable year are--
            (1) contributions under an employer payroll deduction 
        system, and
            (2) additional contributions which, when added to 
        contributions under paragraph (1), do not exceed the amount 
        allowed under section 408 of the Internal Revenue Code of 1986 
        for the taxable year.
    (b) Employer Payroll Deduction Systems.--
            (1) In general.--The system established under section 102 
        shall provide to the maximum extent feasible that contributions 
        under employer payroll deduction systems are made in such a 
        manner as provides all employers with a simple, cost-effective 
        way of making such contributions.
            (2) Simplified employee enrollment and participation.--
                    (A) Establishment.--An eligible employee may 
                establish and maintain an individual retirement plan 
                simply by--
                            (i) completing a contribution certificate, 
                        and
                            (ii) submitting such certificate to the 
                        eligible employee's employer and the contractor 
                        in the manner provided under paragraph (3).
                    (B) Ease of administration.--An eligible employee 
                establishing and maintaining an individual retirement 
                plan under subparagraph (A) may change the amount of an 
                employer payroll deduction, request employer payroll 
                deductions by new employers to an existing plan, and 
                make changes in elections made under section 104(d) in 
                the same manner as under subparagraph (A).
                    (C) Simplified forms.--
                            (i) Contribution certificate.--The 
                        contractor shall develop a contribution 
                        certificate for purposes of subparagraph (A)--
                                    (I) which is written in a clear and 
                                easily understandable manner, and
                                    (II) the completion of which by an 
                                eligible employee will constitute the 
                                establishment of an individual 
                                retirement plan and the request for 
                                employer payroll deductions.
                            (ii) Other forms.--The contractor shall 
                        develop such model forms for purposes of 
                        subparagraph (B) as are necessary to enable the 
                        contractor and an employer to easily administer 
                        an individual retirement plan on behalf of an 
                        eligible employee.
                            (iii) Availability.--The contractor shall 
                        make available to all eligible employees and 
                        employers the forms developed under this 
                        subparagraph, and shall include with such forms 
                        easy to understand explanatory materials.
            (3) Use of certificate.--Each employer upon receipt of a 
        contribution certificate from an eligible employee shall deduct 
        the appropriate contribution as determined by such certificate 
        from the employee's wages in equal amounts during the remaining 
        payroll periods for the taxable year and shall remit such 
        amounts to the contractor for investment in the employee's 
        individual retirement plan.
            (4) Failure to remit payroll deductions.--For purposes of 
        the Internal Revenue Code of 1986, any amount which an employer 
        fails to remit to the contractor on behalf of an eligible 
        employee pursuant to a contribution certificate of such 
        employee shall not be allowed as a deduction to the employer 
        under such Code.

SEC. 104. INVESTMENT OPTIONS.

    (a) In General.--The contractor shall, pursuant to the system 
established under section 102, enter into arrangements, on a 
competitive basis, with qualified professional asset managers to 
provide individuals with the opportunity to invest sums in an 
individual retirement plan in each of the funds described in subsection 
(b).
    (b) Type of Funds.--The funds described in the subsection are the 
following:
            (1) A government securities investment fund.
            (2) A fixed income investment fund.
            (3) A common stock index investment fund.
    (c) Asset Managers.--
            (1) In general.--The contractor may select more than 1 
        qualified professional asset manager for each type of fund 
        described in subsection (b).
            (2) Asset allocation.--The contractor may place limits on 
        the amount which may be allocated by the contractor to any 
        qualified professional asset manager to the extent the 
        contractor determines necessary to prevent undue impact on any 
        financial market or undue risk to participants.
            (3) Definition.--For purposes of this section, the term 
        ``qualified professional asset manager'' has the meaning given 
        the term by section 8438(a)(7) of title 5, United States Code.
    (d) Participant Elections.--
            (1) In general.--The system established under section 102 
        shall provide that an individual on whose behalf an individual 
        retirement plan is established may--
                    (A) elect the investment funds into which 
                contributions to the plan are to be invested, and
                    (B) elect to transfer contributions (and earnings) 
                from one fund to another.
            (2) Method.--Any election shall be made in the manner 
        provided by the system, except that the contractor shall seek 
        to ensure elections may be made in a simple, timely manner.
            (3) Limitation.--Any election under this subsection shall 
        be subject to the asset allocation limitation under subsection 
        (c)(2).
    (e) Investment Policies.--The system established under section 102 
shall provide that any investment policies adopted by the contractor 
shall provide for--
            (1) prudent investments suitable for accumulating funds for 
        payment of retirement income, and
            (2) low administrative costs.

SEC. 105. ACCOUNTING AND INFORMATION.

    (a) Establishment of Plans.--
            (1) In general.--The system established under section 102 
        shall provide for the establishment and maintenance of an 
        individual retirement plan for each individual--
                    (A) for whom contributions are made to the 
                contractor under an employer payroll deduction system 
                pursuant to a contribution certificate, and
                    (B) who makes any additional contributions allowed 
                under section 408 of the Internal Revenue Code of 1986 
                for the taxable year.
            (2) Allocations and reductions to plan.--Such system shall 
        provide for--
                    (A) the allocation to each plan of an amount equal 
                to a pro rata share of the net earnings and net losses 
                from each investment of sums in such plan, and
                    (B) a reduction in each such plan for the plan's 
                appropriate share of the administrative expenses to be 
                paid out.
            (3) Examination of plans.--
                    (A) In general.--The contractor shall annually 
                engage, on behalf of all individuals for whom an 
                individual retirement plan is maintained, an 
                independent qualified public accountant (within the 
                meaning of section 103(a)(3)(D) of the Employee 
                Retirement Income Security Act of 1974 (29 U.S.C. 
                1023(a)(3)(D)) who shall conduct an examination of all 
                plans and other books and records maintained in the 
                administration of this chapter as the accountant 
                considers necessary to make the determination under 
                subparagraph (B). The examination shall be conducted in 
                accordance with generally accepted auditing standards 
                and shall involve such tests of the plans, books, and 
                records as the public accountant considers necessary.
                    (B) Determination of compliance.--The public 
                accountant conducting an examination under subparagraph 
                (A) shall determine whether the plans, books, and 
                records referred to in such subparagraph have been 
                maintained in conformity with generally accepted 
                accounting principles. The public accountant shall 
                transmit to the contractor and the Secretary of Labor a 
                report on such examination and determination.
                    (C) Reliance.--In making a determination under 
                subparagraph (B), a public accountant may rely on the 
                correctness of any actuarial matter certified by an 
                enrolled actuary if the public accountant states a 
                reliance in the report to the contractor.
    (b) Additional Information.--
            (1) In general.--The system established under section 102 
        shall provide for the furnishing of information to employees 
        and employers of the opportunity of establishing individual 
        retirement plans and of transferring amounts to such plans.
            (2) Plan participants.--
                    (A) In general.--Such system shall provide that 
                each individual for whom an individual retirement plan 
                is maintained shall be periodically furnished with--
                            (i) a statement relating to the 
                        individual's plan, and
                            (ii) a summary description of the 
                        investment options under the plan and a history 
                        of the investment performance of such options 
                        during the 5-year period preceding the 
                        evaluation.
                    (B) Plan valuation.--Such system shall also provide 
                that each individual for whom an individual retirement 
                plan is established shall be entitled, upon request, to 
                a periodic valuation of amounts in each fund described 
                in section 104(b) in order to enable the individual to 
                make an election to transfer such amounts between 
                funds.
            (3) Investment information.--The contractor shall also make 
        available to employees information on how to make informed 
        investment decisions and how to achieve retirement objectives.
            (4) Information not investment advice.--Information 
        provided under this subsection shall not be treated as 
        investment advice for purposes of any Federal or State law.

SEC. 106. ADMINISTRATIVE COSTS.

    (a) In General.--Except as provided from amounts described in 
section 108(c), any expense incurred by the contractor in carrying out 
its functions under this chapter shall be paid first from the earnings 
of the funds in individual retirement plans and then from balances in 
such plans.
    (b) Allocation.--Expenses under subsection (a) shall be allocated 
to each individual retirement plan in the manner provided under section 
105.

SEC. 107. FIDUCIARY RESPONSIBILITIES; LIABILITY AND PENALTIES; BONDING; 
              INVESTIGATIVE AUTHORITY.

    Except as modified by the Secretary of Labor in regulations to 
correspond to the structure and responsibilities of the contractor, the 
provisions of sections 8477, 8478, 8478a, and 8479(a) of title 5, 
United States Code, shall apply to the contractor in the same manner as 
such provisions apply to the Thrift Savings Fund.

SEC. 108. SELECTION OF CONTRACTOR.

    (a) Selection.--
            (1) In general.--The Secretary of Labor shall contract out, 
        on a competitive basis, the duties under this chapter to a 
        private entity.
            (2) Measurement of contract performance.--No contract shall 
        be entered into with any entity under paragraph (1) unless the 
        Secretary of Labor finds that such entity will perform its 
        obligations under the contract efficiently and effectively and 
        will meet such requirements as to financial responsibility, 
        legal authority, and other matters as the Secretary finds 
        pertinent. The Secretary of Labor shall publish in the Federal 
        Register standards and criteria for the efficient and effective 
        performance of contract obligations under this chapter 
        (including standards and criteria for the termination of such 
        contract), and opportunity shall be provided for public comment 
        prior to implementation.
    (b) Treatment as Trustee.--For purposes of the Internal Revenue 
Code of 1986 the contractor shall be treated in the same manner as a 
trustee described in section 408(a)(2) of such Code.
    (c) Authorization of Appropriations.--There are authorized to be 
appropriated such sums as are necessary for the Secretary of Labor to 
design and award the contract described in subsection (a)(1) and for 
the contractor to begin operations under this chapter.
    (d) Effective Date of System.--The system established under section 
102 shall take effect on the first day of the sixth month following the 
month in which the contract under subsection (a) is awarded.

  CHAPTER 2--NONREFUNDABLE TAX CREDIT FOR CONTRIBUTIONS TO INDIVIDUAL 
                          RETIREMENT ACCOUNTS

SEC. 111. NONREFUNDABLE TAX CREDIT FOR CONTRIBUTIONS TO INDIVIDUAL 
              RETIREMENT PLANS.

    (a) In General.--Subpart A of part IV of subchapter A of chapter 1 
(relating to nonrefundable personal credits) is amended by inserting 
after section 25 the following new section:

``SEC. 25A. RETIREMENT SAVINGS.

    ``(a) Allowance of Credit.--There shall be allowed as a credit 
against the tax imposed by this chapter so much of the qualified 
retirement contributions of the taxpayer for the taxable year as does 
not exceed the applicable amount of the adjusted gross income of the 
taxpayer for such year.
    ``(b) Applicable Amount.--For purposes of subsection (a), the 
applicable amount is determined in accordance with the following table:

``If adjusted gross income is:      The applicable amount is:
    Not over $15,000...............
                                        $450.
    Over $15,000 but not over 
        $20,000.
                                        $400.
    Over $20,000 but not over 
        $25,000.
                                        $350.
    Over $25,000 but not over 
        $30,000.
                                        $300.
    Over $30,000...................
                                        $0.
    ``(c) Section Not To Apply to Certain Contributions.--This section 
shall not apply with respect to--
            ``(1) an employer contribution to a simplified employee 
        pension, and
            ``(2) any amount contributed to a simple retirement account 
        established under section 408(p).
    ``(d) Other Limitations and Restrictions.--
            ``(1) Beneficiary must be under age 70\1/2\.--No credit 
        shall be allowed under this section with respect to any 
        qualified retirement contribution for the benefit of an 
        individual if such individual has attained age 70\1/2\ before 
        the close of such individual's taxable year for which the 
        contribution was made.
            ``(2) Recontributed amounts.--No credit shall be allowed 
        under this section with respect to a rollover contribution 
        described in section 402(c), 403(a)(4), 403(b)(8), or 
        408(d)(3).
            ``(3) Amounts contributed under endowment contract.--In the 
        case of an endowment contract described in section 408(b), no 
        credit shall be allowed under this section for that portion of 
        the amounts paid under the contract for the taxable year which 
        is properly allocable, under regulations prescribed by the 
        Secretary, to the cost of life insurance.
            ``(4) Denial of credit for amount contributed to inherited 
        annuities or accounts.--No credit shall be allowed under this 
        section with respect to any amount paid to an inherited 
        individual retirement account or individual retirement annuity 
        (within the meaning of section 408(d)(3)(C)(ii)).
            ``(5) No double benefit.--No credit shall be allowed under 
        this section for any taxable year with respect to the amount of 
        any qualified retirement contribution for the benefit of an 
        individual if such individual takes a deduction with respect to 
        such amount under section 219 for such taxable year.
    ``(e) Qualified Retirement Contribution.--For purposes of this 
section, the term `qualified retirement contribution' means--
            ``(1) any amount paid in cash for the taxable year by or on 
        behalf of an individual to an individual retirement plan for 
        such individual's benefit, and
            ``(2) any amount contributed on behalf of any individual to 
        a plan described in section 501(a)(18).
    ``(f) Other Definitions and Special Rules.--
            ``(1) Compensation.--For purposes of this section, the term 
        `compensation' has the meaning given in section 219(f)(1).
            ``(2) Married couples must file joint return.--If the 
        taxpayer is married at the close of the taxable year, the 
        credit shall be allowed under subsection (a) only if the 
        taxpayer and the taxpayer's spouse file a joint return for the 
        taxable year.
            ``(3) Time when contributions deemed made.--For purposes of 
        this section, a taxpayer shall be deemed to have made a 
        contribution to an individual retirement plan on the last day 
        of the preceding taxable year if the contribution is made on 
        account of such taxable year and is made not later than the 
        time prescribed by law for filing the return for such taxable 
        year (not including extensions thereof).
            ``(4) Reports.--The Secretary shall prescribe regulations 
        which prescribe the time and the manner in which reports to the 
        Secretary and plan participants shall be made by the plan 
        administrator of a qualified employer or government plan 
        receiving qualified voluntary employee contributions.
            ``(5) Employer payments.--For purposes of this title, any 
        amount paid by an employer to an individual retirement plan 
        shall be treated as payment of compensation to the employer 
        (other than a self-employed individual who is an employee 
        within the meaning of section 401(c)(1)) includible in his 
        gross income in the taxable year for which the amount was 
        contributed, whether or not a credit for such payment is 
        allowable under this section to the employee.
    ``(g) Cross Reference.--

                                ``For failure to provide required 
reports, see section 6652(g).''.
    (b) Conforming Amendments.--
            (1) Section 86(f) is amended by redesignating paragraphs 
        (2), (3), and (4) as paragraphs (3), (4), and (5), 
        respectively, and by inserting after paragraph (1) the 
        following new paragraph:
            ``(2) section 25A(f)(1) (defining compensation),''.
            (2) Clause (i) of section 501(c)(18)(D) is amended by 
        inserting ``which may be taken into account in computing the 
        credit allowable under section 25A or'' before ``with 
        respect''.
            (3) Section 6047(c) is amended by inserting ``section 25A 
        or'' before ``section 219''.
            (4) Section 6652(g) is amended--
                    (A) by inserting ``section 25A(f)(4) or'' before 
                ``section 219(f)(4)'', and
                    (B) by inserting ``Creditable'' before 
                ``Deductible'' in the heading thereof.
            (5) The table of sections for subpart A of part IV of 
        subchapter A of chapter 1 is amended by inserting after the 
        item relating to section 25 the following new item:

                              ``Sec. 25A. Retirement savings.''.
    (c) Effective Date.--The amendments made by this section apply to 
taxable years beginning after December 31, 1997.

CHAPTER 3--EXPANDED INDIVIDUAL RETIREMENT ACCOUNTS TO INCREASE COVERAGE 
                            AND PORTABILITY

                      Subchapter A--IRA Deduction

SEC. 121. INCREASE IN INCOME LIMITATIONS.

    (a) In General.--Subparagraph (B) of section 219(g)(3) (defining 
applicable dollar amount) is amended--
            (1) by striking ``$40,000'' in clause (i) and inserting 
        ``$80,000 ($70,000 in the case of taxable years beginning in 
        1997, 1998, or 1999)'', and
            (2) by striking ``$25,000'' in clause (ii) and inserting 
        ``$50,000 ($45,000 in the case of taxable years beginning in 
        1997, 1998, or 1999)''.
    (b) Phaseout of Limitations.--Clause (ii) of section 219(g)(2)(A) 
(relating to amount of reduction) is amended by striking ``$10,000'' 
and inserting ``an amount equal to 10 times the dollar amount 
applicable for the taxable year under subsection (b)(1)(A)''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 1996.

SEC. 122. INFLATION ADJUSTMENT FOR DEDUCTIBLE AMOUNT AND INCOME 
              LIMITATIONS.

    (a) In General.--Section 219 (relating to retirement savings) is 
amended by redesignating subsection (h) as subsection (i) and by 
inserting after subsection (g) the following new subsection:
    ``(h) Cost-of-Living Adjustments.--
            ``(1) Deductible amounts.--In the case of any taxable year 
        beginning in a calendar year after 1997, the $2,000 amount 
        under subsection (b)(1)(A) shall be increased by an amount 
        equal to--
                    ``(A) such dollar amount, multiplied by
                    ``(B) the cost-of-living adjustment determined 
                under section 1(f)(3) for the calendar year in which 
                the taxable year begins, determined by substituting 
                `calendar year 1996' for `calendar year 1992' in 
                subparagraph (B) thereof.
            ``(2) Applicable dollar amount.--In the case of any taxable 
        year beginning in a calendar year after 2000, the applicable 
        dollar amounts under subsection (g)(3)(B) shall be increased by 
        an amount equal to--
                    ``(A) such dollar amount, multiplied by
                    ``(B) the cost-of-living adjustment determined 
                under section 1(f)(3) for the calendar year in which 
                the taxable year begins, determined by substituting 
                `calendar year 1999' for `calendar year 1992' in 
                subparagraph (B) thereof.
            ``(3) Rounding rules.--
                    ``(A) Deduction amounts.--If any amount after 
                adjustment under paragraph (1) is not a multiple of 
                $500, such amount shall be rounded to the next lowest 
                multiple of $500.
                    ``(B) Applicable dollar amounts.--If any amount 
                after adjustment under paragraph (2) is not a multiple 
                of $5,000, such amount shall be rounded to the next 
                lowest multiple of $5,000.''.
    (b) Conforming Amendments.--
            (1) Section 408(a)(1) is amended by striking ``in excess of 
        $2,000 on behalf of any individual'' and inserting ``on behalf 
        of any individual in excess of the amount in effect for such 
        taxable year under section 219(b)(1)(A)''.
            (2) Section 408(b)(2)(B) is amended by striking ``$2,000'' 
        and inserting ``the dollar amount in effect under section 
        219(b)(1)(A)''.
            (3) Section 408(j) is amended by striking ``$2,000''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 1996.

              Subchapter B--Distributions and Investments

SEC. 131. DISTRIBUTIONS FROM IRAS MAY BE USED WITHOUT ADDITIONAL TAX TO 
              PURCHASE FIRST HOMES, TO PAY HIGHER EDUCATION, OR TO PAY 
              FINANCIALLY DEVASTATING MEDICAL EXPENSES.

    (a) In General.--Paragraph (2) of section 72(t) (relating to 
exceptions to 10-percent additional tax on early distributions from 
qualified retirement plans) is amended by adding at the end the 
following new subparagraph:
                    ``(E) Distributions from certain plans for first 
                home purchases or educational expenses.--Distributions 
                to an individual from an individual retirement plan--
                            ``(i) which are qualified first-time 
                        homebuyer distributions (as defined in 
                        paragraph (7)); or
                            ``(ii) to the extent such distributions do 
                        not exceed the qualified higher education 
                        expenses (as defined in paragraph (8)) of the 
                        taxpayer for the taxable year.''.
    (b) Financially Devastating Medical Expenses.--
            (1) Certain lineal descendants and ancestors treated as 
        dependents.--Subparagraph (B) of section 72(t)(2) (relating to 
        subsection not to apply to certain distributions) is amended by 
        striking ``medical care'' and all that follows and inserting 
        ``medical care determined--
                            ``(i) without regard to whether the 
                        employee itemizes deductions for such taxable 
                        year, and
                            ``(ii) in the case of an individual 
                        retirement plan, by treating such employee's 
                        dependents as including all children, 
                        grandchildren, and ancestors of the employee or 
                        such employee's spouse.''.
            (2) Conforming amendment.--Subparagraph (B) of section 
        72(t)(2) is amended by striking ``or (D)'' and inserting ``, 
        (D), or (E)''.
    (c) Definitions.--Section 72(t) is amended by adding at the end the 
following new paragraphs:
            ``(7) Qualified first-time homebuyer distributions.--For 
        purposes of paragraph (2)(E)(i)--
                    ``(A) In general.--The term `qualified first-time 
                homebuyer distribution' means any payment or 
                distribution received by an individual to the extent 
                such payment or distribution is used by the individual 
                before the close of the 60th day after the day on which 
                such payment or distribution is received to pay 
                qualified acquisition costs with respect to a principal 
                residence of a first-time homebuyer who is such 
                individual or the spouse, child (as defined in section 
                151(c)(3)), or grandchild of such individual.
                    ``(B) Qualified acquisition costs.--For purposes of 
                this paragraph, the term `qualified acquisition costs' 
                means the costs of acquiring, constructing, or 
                reconstructing a residence. Such term includes any 
                usual or reasonable settlement, financing, or other 
                closing costs.
                    ``(C) First-time homebuyer; other definitions.--For 
                purposes of this paragraph--
                            ``(i) First-time homebuyer.--The term 
                        `first-time homebuyer' means any individual 
                        if--
                                    ``(I) such individual (and if 
                                married, such individual's spouse) had 
                                no present ownership interest in a 
                                principal residence during the 3-year 
                                period ending on the date of 
                                acquisition of the principal residence 
                                to which this paragraph applies, and
                                    ``(II) subsection (h) or (k) of 
                                section 1034 did not suspend the 
                                running of any period of time specified 
                                in section 1034 with respect to such 
                                individual on the day before the date 
                                the distribution is applied pursuant to 
                                subparagraph (A).
                        In the case of an individual described in 
                        section 143(i)(1)(C) for any year, an ownership 
                        interest shall not include any interest under a 
                        contract of deed described in such section. An 
                        individual who loses an ownership interest in a 
                        principal residence incident to a divorce or 
                        legal separation is deemed for purposes of this 
                        subparagraph to have had no ownership interest 
                        in such principal residence within the period 
                        referred to in subclause (II).
                            ``(ii) Principal residence.--The term 
                        `principal residence' has the same meaning as 
                        when used in section 1034.
                            ``(iii) Date of acquisition.--The term 
                        `date of acquisition' means the date--
                                    ``(I) on which a binding contract 
                                to acquire the principal residence to 
                                which subparagraph (A) applies is 
                                entered into, or
                                    ``(II) on which construction or 
                                reconstruction of such a principal 
                                residence is commenced.
                    ``(D) Special rule where delay in acquisition.--Any 
                portion of any distribution from any individual 
                retirement plan which fails to meet the requirements of 
                subparagraph (A) solely by reason of a delay or 
                cancellation of the purchase or construction of the 
                residence may be contributed to an individual 
                retirement plan as provided in section 408(d)(3)(A)(i) 
                (determined by substituting `120 days' for `60 days' in 
                such section), except that--
                            ``(i) section 408(d)(3)(B) shall not be 
                        applied to such portion, and
                            ``(ii) such portion shall not be taken into 
                        account in determining whether section 
                        408(d)(3)(B) applies to any other amount.
            ``(8) Qualified higher education expenses.--For purposes of 
        paragraph (2)(E)(ii)--
                    ``(A) In general.--The term `qualified higher 
                education expenses' means tuition and fees required for 
                the enrollment or attendance of--
                            ``(i) the taxpayer,
                            ``(ii) the taxpayer's spouse,
                            ``(iii) a dependent of the taxpayer with 
                        respect to whom the taxpayer is allowed a 
                        deduction under section 151, or
                            ``(iv) the taxpayer's child (as defined in 
                        section 151(c)(3)) or grandchild,
                as an eligible student at an institution of higher 
                education.
                    ``(B) Exceptions.--The term `qualified higher 
                education expenses' does not include--
                            ``(i) expenses with respect to any course 
                        or other education involving sports, games, or 
                        hobbies, unless such expenses--
                                    ``(I) are part of a degree program, 
                                or
                                    ``(II) are deductible under this 
                                chapter without regard to this section; 
                                or
                            ``(ii) any student activity fees, athletic 
                        fees, insurance expenses, or other expenses 
                        unrelated to a student's academic course of 
                        instruction.
                    ``(C) Coordination with savings bond provisions.--
                The amount of qualified higher education expenses for 
                any taxable year shall be reduced by any amount 
                excludable from gross income under section 135.
                    ``(D) Eligible student.--For purposes of 
                subparagraph (A), the term `eligible student' means a 
                student who--
                            ``(i) meets the requirements of section 
                        484(a)(1) of the Higher Education Act of 1965 
                        (20 U.S.C. 1091(a)(1)), as in effect on the 
                        date of the enactment of this section, and
                            ``(ii)(I) is carrying at least one-half the 
                        normal full-time work load for the course of 
                        study the student is pursuing, as determined by 
                        the institution of higher education, or
                            ``(II) is enrolled in a course which 
                        enables the student to improve the student's 
                        job skills or to acquire new job skills.
                    ``(E) Institution of higher education.--The term 
                `institution of higher education' means an institution 
                which--
                            ``(i) is described in section 481 of the 
                        Higher Education Act of 1965 (20 U.S.C. 1088), 
                        as in effect on the date of the enactment of 
                        this section, and
                            ``(ii) is eligible to participate in 
                        programs under title IV of such Act.''.
    (d) Effective Date.--The amendments made by this section shall 
apply to payments and distributions after December 31, 1996.

SEC. 132. CONTRIBUTIONS MUST BE HELD AT LEAST 5 YEARS IN CERTAIN CASES.

    (a) In General.--Section 72(t), as amended by section 131(c), is 
amended by adding at the end the following new paragraph:
            ``(9) Certain contributions must be held 5 years.--
                    ``(A) In general.--Paragraph (2)(A)(i) shall not 
                apply to any amount distributed out of an individual 
                retirement plan (other than a special individual 
                retirement account) which is allocable to contributions 
                made to the plan during the 5-year period ending on the 
                date of such distribution (and earnings on such 
                contributions).
                    ``(B) Ordering rule.--For purposes of this 
                paragraph--
                            ``(i) First-in, first-out rule.--
                        Distributions shall be treated as having been 
                        made--
                                    ``(I) first from the earliest 
                                contribution (and earnings allocable 
                                thereto) remaining in the account at 
                                the time of the distribution, and
                                    ``(II) then from other 
                                contributions (and earnings allocable 
                                thereto) in the order in which made.
                            ``(ii) Allocation of earnings.--Earnings 
                        shall be allocated to contributions in such 
                        manner as the Secretary may prescribe.
                            ``(iii) Aggregations of contributions.--
                        Except as provided by the Secretary, for 
                        purposes of this subparagraph--
                                    ``(I) all contributions made during 
                                the same taxable year may be treated as 
                                1 contribution, and
                                    ``(II) all contributions made 
                                before the first day of the 5-year 
                                period ending on the day before any 
                                distribution may be treated as 1 
                                contribution.
                    ``(C) Special rule for rollovers.--
                            ``(i) Pension plans.--Subparagraph (A) 
                        shall not apply to distributions out of an 
                        individual retirement plan which are allocable 
                        to rollover contributions to which section 
                        402(c), 403(a)(4), or 403(b)(8) applied.
                            ``(ii) Contribution period.--For purposes 
                        of subparagraph (A), amounts shall be treated 
                        as having been held by a plan during any period 
                        such contributions were held (or are treated as 
                        held under this clause) by any individual 
                        retirement plan from which transferred.''.
    (b) Effective Date.--The amendment made by this section shall apply 
to contributions (and earnings allocable thereto) which are made after 
December 31, 1996.

            CHAPTER 4--PERIODIC PENSION BENEFITS STATEMENTS

SEC. 141. PERIODIC PENSION BENEFITS STATEMENTS.

    (a) In General.--Subsection (a) of section 105 of the Employee 
Retirement Income Security Act of 1974 (29 U.S.C. 1025) is amended by 
striking ``shall furnish to any plan participant or beneficiary who so 
requests in writing,'' and inserting ``shall furnish at least once 
every 3 years, in the case of a defined benefit plan, and annually, in 
the case of a defined contribution plan, to each plan participant, and 
shall furnish to any plan participant or beneficiary who so 
requests,''.
    (b) Rule for Multiemployer Plans.--Subsection (d) of section 105 of 
the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1025) is 
amended to read as follows:
    ``(d) Each administrator of a plan to which more than 1 
unaffiliated employer is required to contribute shall furnish to any 
plan participant or beneficiary who so requests in writing, a statement 
described in subsection (a).''.
    (c) Effective Date.--The amendments made by this section shall 
apply to plan years beginning after the earlier of--
            (1) the date of issuance by the Secretary of Labor of 
        regulations providing guidance for simplifying defined benefit 
        plan calculations with respect to the information required 
        under section 105 of the Employee Retirement Income Security 
        Act of 1974 (29 U.S.C. 1025), or
            (2) December 31, 1997.

       Subtitle B--Improved Fairness in Retirement Plan Benefits

SEC. 151. AMENDMENTS TO SIMPLE RETIREMENT ACCOUNTS.

    (a) Minimum Contribution Requirement.--
            (1) In general.--Paragraph (2) of section 408(p) (defining 
        qualified salary reduction arrangement) is amended--
                    (A) by striking clauses (iii) and (iv) of 
                subparagraph (A) and inserting the following new 
                clauses:
                            ``(iii) the employer is required to make a 
                        matching contribution to the simple retirement 
                        account for any year in an amount equal to--
                                    ``(I) so much of the amount the 
                                employee elects under clause (i)(I) as 
                                does not exceed 3 percent of 
                                compensation for the year, and
                                    ``(II) a uniform percentage (which 
                                is at least 50 percent but not more 
                                than 100 percent) of the amount the 
                                employee elects under clause (i)(I) to 
                                the extent that such amount exceeds 3 
                                percent but does not exceed 5 percent 
                                of the employee's compensation,
                            ``(iv) the employer is required to make 
                        nonelective contributions of 1 percent of 
                        compensation for each employee eligible to 
                        participate in the arrangement who has at least 
                        $5,000 of compensation from the employer for 
                        the year, and
                            ``(v) no contributions may be made other 
                        than contributions described in clause (i), 
                        (iii), or (iv).'', and
                    (B) by striking subparagraph (B) and inserting the 
                following new subparagraph:
                    ``(B) Contribution rules.--
                            ``(i) Employer may elect 3-percent 
                        nonelective contribution.--An employer shall be 
                        treated as meeting the requirements of clauses 
                        (iii) and (iv) of subparagraph (A) for any year 
                        if, in lieu of the contributions described in 
                        such clauses, the employer elects to make 
                        nonelective contributions of 3 percent of 
                        compensation for each employee who is eligible 
                        to participate in the arrangement and who has 
                        at least $5,000 of compensation from the 
                        employer for the year. If an employer makes an 
                        election under this clause for any year, the 
                        employer shall notify employees of such 
                        election within a reasonable period of time 
                        before the 60-day period for such year under 
                        paragraph (5)(C).
                            ``(ii) Discretionary contributions.--A plan 
                        shall not be treated as failing to meet the 
                        requirements of subparagraph (A)(v) merely 
                        because, pursuant to the terms of the plan, an 
                        employer makes nonelective contributions under 
                        subparagraph (A)(iv) or clause (i) of this 
                        subparagraph in excess of 1 percent or 3 
                        percent of compensation, respectively, but only 
                        if all such contributions bear a uniform 
                        relationship to the compensation of each 
                        eligible employee and do not exceed 5 percent 
                        of compensation for any eligible employee.
                            ``(iii) Compensation limitation.--The 
                        compensation taken into account under this 
                        paragraph for any year shall not exceed the 
                        limitation in effect for such year under 
                        section 401(a)(17).''.
            (2) Matching contributions.--Subparagraph (B) of section 
        401(k)(11) (relating to adoption of simple plan to meet 
        nondiscrimination tests) is amended--
                    (A) by striking subclauses (II) and (III) of clause 
                (i) and inserting the following new subclauses:
                                    ``(II) the employer is required to 
                                make a matching contribution to the 
                                trust for any year in an amount equal 
                                to--
                                            ``(aa) so much of the 
                                        amount the employee elects 
                                        under subclause (I) as does not 
                                        exceed 3 percent of 
                                        compensation for the year, and
                                            ``(bb) a uniform percentage 
                                        (which is at least 50 percent 
                                        but not more than 100 percent) 
                                        of the amount the employee 
                                        elects under subclause (I) to 
                                        the extent that such amount 
                                        exceeds 3 percent but does not 
                                        exceed 5 percent of the 
                                        employee's compensation,
                                    ``(III) the employer is required to 
                                make nonelective contributions of 1 
                                percent of compensation for each 
                                employee eligible to participate in the 
                                arrangement who has at least $5,000 of 
                                compensation from the employer for the 
                                year, and
                                    ``(IV) no other contributions may 
                                be made other than contributions 
                                described in subclause (I), (II), or 
                                (III).'', and
                    (B) by striking clause (ii) and inserting the 
                following new clause:
                            ``(ii) Contribution rules.--
                                    ``(I) Employer may elect 3-percent 
                                nonelective contribution.--An employer 
                                shall be treated as meeting the 
                                requirements of subclauses (II) and 
                                (III) of clause (i) for any year if, in 
                                lieu of the contributions described in 
                                such subclauses, the employer elects to 
                                make nonelective contributions of 3 
                                percent of compensation for each 
                                employee who is eligible to participate 
                                in the arrangement and who has at least 
                                $5,000 of compensation from the 
                                employer for the year. If an employer 
                                makes an election under this subclause 
                                for any year, the employer shall notify 
                                employees of such election within a 
                                reasonable period of time before the 
                                60th day before the beginning of such 
                                year.
                                    ``(II) Discretionary 
                                contributions.--A plan shall not be 
                                treated as failing to meet the 
                                requirements of clause (i)(IV) merely 
                                because, pursuant to the terms of the 
                                plan, an employer makes nonelective 
                                contributions under clause (i)(III) or 
                                subclause (I) of this clause in excess 
                                of 1 percent or 3 percent of 
                                compensation, respectively, but only if 
                                all such contributions bear a uniform 
                                relationship to the compensation of 
                                each eligible employee and do not 
                                exceed 5 percent of compensation for 
                                any eligible employee.''.
    (b) Fiduciary Duties.--Section 404 of the Employee Retirement 
Income Security Act of 1974 (29 U.S.C. 1104) is amended--
            (1) by striking ``(1)'' after ``(c)'' in subsection (c),
            (2) by striking paragraph (2) in subsection (c), and
            (3) by redesignating subsection (d) as subsection (e) and 
        by inserting after subsection (c) the following new subsection:
    ``(d)(1) In the case of a simple retirement account which meets the 
requirements of section 408(p) of the Internal Revenue Code of 1986, no 
plan sponsor who is otherwise a fiduciary shall be liable under this 
part for any loss, or by reason of any breach, which results from--
            ``(A) the designation of the trustee or issuer of such 
        account, or
            ``(B) the manner in which the assets in the account are 
        invested,
after the earliest of the dates described in paragraph (2).
    ``(2) The dates described in this paragraph are as follows:
            ``(A) The date on which an affirmative election with 
        respect to the initial investment of any contribution is made 
        by the individual for whose benefit the account is maintained.
            ``(B) The date on which there is a rollover of the assets 
        of the account to any other simple retirement account or 
        individual retirement plan.
            ``(C) The date which is 1 year after the account is 
        established.
    ``(3) This subsection shall not apply to the plan sponsor of a 
simple retirement account unless the plan participants are notified in 
writing (either separately or as part of the notice under section 
408(l)(2)(C)) that such contributions may be transferred without cost 
or penalty to another individual account or annuity.''.
    (c) Option To Suspend Contributions.--Section 408(p) (relating to 
simple retirement accounts) is amended by adding at the end the 
following new paragraph:
            ``(8) Suspension of plan.--Except as provided by the 
        Secretary, a plan shall not be treated as failing to meet the 
        requirements of this subsection if, under the plan, the 
        employer may suspend all elective, matching, and nonelective 
        contributions under the plan after notifying employees eligible 
        to participate in the arrangement of such suspension in writing 
        at least 30 days in advance. Such suspension shall apply to 
        contributions with respect to compensation earned after the 
        effective date of the suspension. Only 1 suspension under this 
        paragraph may take effect during any year.''.
    (d) Conforming Amendments.--Section 408(p)(2)(C), as so added, is 
amended--
            (1) by striking clause (ii),
            (2) by striking ``Definitions'' in the heading and 
        inserting ``Eligible employer'',
            (3) by striking ``(i) Eligible employer.--'', and
            (4) by redesignating subclauses (I) and (II) as clauses (i) 
        and (ii), respectively.
    (e) Effective Date.--
            (1) In general.--Except as provided in paragraph (2), the 
        amendments made by this section shall apply to taxable years 
        beginning after December 31, 1997.
            (2) Delayed effective date for plans established in 1997.--
        In the case of plans established in 1997 under section 408(p) 
        of the Internal Revenue Code of 1986, as in effect on January 
        1, 1997, the amendments made by this section shall apply to 
        taxable years beginning after December 31, 2002.

SEC. 152. NONDISCRIMINATION RULES FOR QUALIFIED CASH OR DEFERRED 
              ARRANGEMENTS AND MATCHING CONTRIBUTIONS.

    (a) Alternative Methods of Satisfying Section 401(k) 
Nondiscrimination Tests.--Subparagraph (B) of section 401(k)(12) 
(relating to alternative methods of meeting nondiscrimination 
requirements) is amended to read as follows:
                    ``(B) Nonelective and matching contributions.--
                            ``(i) In general.--The requirements of this 
                        subparagraph are met if the requirements of 
                        clauses (ii) and (iii) are met.
                            ``(ii) Nonelective contributions.--The 
                        requirements of this clause are met if, under 
                        the arrangement, the employer is required, 
                        without regard to whether the employee makes an 
                        elective contribution or employee contribution, 
                        to make a contribution to a defined 
                        contribution plan on behalf of each employee 
                        who is not a highly compensated employee and 
                        who is eligible to participate in the 
                        arrangement in an amount equal to at least 
1 percent of the employee's compensation.
                            ``(iii) Matching contributions.--The 
                        requirements of this clause are met if, under 
                        the arrangement, the employer makes matching 
                        contributions on behalf of each employee who is 
                        not a highly compensated employee in an amount 
                        equal to--
                                    ``(I) 100 percent of the elective 
                                contributions of the employee to the 
                                extent such elective contributions do 
                                not exceed 3 percent of the employee's 
                                compensation, and
                                    ``(II) 50 percent of the elective 
                                contributions of the employee to the 
                                extent that such elective contributions 
                                exceed 3 percent but do not exceed 5 
                                percent of the employee's compensation.
                            ``(iv) Rate for highly compensated 
                        employees.--The requirements of clause (iii) 
                        are not met if, under the arrangement, the rate 
                        of matching contribution with respect to any 
                        rate of elective contribution of a highly 
                        compensated employee is greater than that with 
                        respect to an employee who is not a highly 
                        compensated employee. For purposes of this 
                        clause, to the extent provided in regulations, 
                        the last sentences of paragraph (3)(A) and 
                        subsection (m)(2)(B) shall not apply.
                            ``(v) Alternative plan designs.--If the 
                        rate of matching contribution with respect to 
                        any rate of elective contribution is not equal 
                        to the percentage required under clause (iii), 
                        an arrangement shall not be treated as failing 
                        to meet the requirements of clause (iii) if--
                                    ``(I) the rate of an employer's 
                                matching contribution does not increase 
                                as an employee's rate of elective 
                                contribution increase, and
                                    ``(II) the aggregate amount of 
                                matching contributions at such rate of 
                                elective contribution is at least equal 
                                to the aggregate amount of matching 
                                contributions which would be made if 
                                matching contributions were made on the 
                                basis of the percentages described in 
                                clause (iii).''.
    (b) Contributions Part of Qualified Cash or Deferred Arrangement.--
Subparagraph (E)(ii) of section 401(k)(12), as so added, is amended to 
read as follows:
                            ``(ii) Social security and similar 
                        contributions not taken into account.--Except 
                        as provided in regulations, an arrangement 
                        shall not be treated as meeting the 
                        requirements of subparagraph (B) or (C) unless 
                        such requirements are met without regard to 
                        subsection (l), and, for purposes of subsection 
                        (l), and determining whether contributions 
                        provided under a plan satisfy subsection (a)(4) 
                        on the basis of equivalent benefits, employer 
                        contributions under subparagraph (B) or (C) 
                        shall not be taken into account.''.
    (c) Alternative Methods of Satisfying Section 401(m) 
Nondiscrimination Tests.--Section 401(m)(11) (relating to alternative 
method of satisfying tests) is amended--
            (1) by striking ``subparagraph (B)'' in subparagraph 
        (A)(iii) and inserting ``subparagraphs (B) and (C)'',
            (2) by adding at the end of subparagraph (B) the following 
        new flush sentence:
                ``To the extent provided in regulations, the last 
                sentences of paragraph (2)(B) and subsection (k)(3)(A) 
                shall not apply for purposes of clause (iii).'', and
            (3) by adding at the end the following new subparagraph:
                    ``(C) Test must be met separately.--If this 
                paragraph applies to any matching contributions, such 
                contributions shall not be taken into account in 
                determining whether employee contributions satisfy the 
                requirements of this subsection.''.
    (d) Special Rule for Determining Average Deferral Percentage for 
First Plan Year, Etc.--Subparagraph (E) of section 401(k)(3) is amended 
to read as follows:
                    ``(E) For purposes of this paragraph, in the case 
                of the first plan year of any plan, the amount taken 
                into account as the actual deferral percentage of 
                nonhighly compensated employees for the preceding plan 
                year shall be--
                            ``(i) 3 percent, or
                            ``(ii) the actual deferral percentage of 
                        nonhighly compensated employees determined for 
                        such first plan year in the case of--
                                    ``(I) an employer who elects to 
                                have this clause apply, or
                                    ``(II) except to the extent 
                                provided by the Secretary, a successor 
                                plan.''.
    (e) Effective Date.--The amendments made by this section shall take 
effect as if included in the amendments made by section 1433 of the 
Small Business Job Protection Act of 1996.

SEC. 153. DEFINITION OF HIGHLY COMPENSATED EMPLOYEES.

    (a) In General.--Subparagraph (B) of section 414(q)(1) (defining 
highly compensated employee) is amended to read as follows:
                    ``(B) for the preceding year had compensation from 
                the employer in excess of $80,000. ''.
    (b) Conforming Amendments.--
            (1)(A) Subsection (q) of section 414 is amended by striking 
        paragraphs (3), (5), and (7) and by redesignating paragraphs 
        (4), (6), and (8) as paragraphs (3) through (5), respectively.
            (B) Sections 129(d)(8)(B), 401(a)(5)(D)(ii), 408(k)(2)(C), 
        and 416(i)(1)(D) are each amended by striking ``section 
        414(q)(4)'' and inserting ``section 414(q)(3)''.
            (C) Section 416(i)(1)(A) is amended by striking ``section 
        414(q)(5)'' and inserting ``section 414(r)(9)''.
            (2)(A) Section 414(r) is amended by adding at the end the 
        following new paragraph:
            ``(9) Excluded employees.--For purposes of paragraph 
        (2)(A), the following employees shall be excluded:
                    ``(A) Employees who have not completed 6 months of 
                service.
                    ``(B) Employees who normally work less than 17\1/2\ 
                hours per week.
                    ``(C) Employees who normally work not more than 6 
                months during any year.
                    ``(D) Employees who have not attained the age of 
                21.
                    ``(E) Except to the extent provided in regulations, 
                employees who are included in a unit of employees 
                covered by an agreement which the Secretary of Labor 
                finds to be a collective bargaining agreement between 
                employee representatives and the employer.''.
            (B) Subparagraph (A) of section 414(r)(2) is amended by 
        striking ``subsection (q)(5)'' and inserting ``paragraph (9)''.
    (c) Effective Date.--The amendments made by this section shall take 
effect as if included in the amendments made by section 1431 of the 
Small Business Job Protection Act of 1996.

             Subtitle C--Improving Retirement Plan Coverage

SEC. 161. CREDIT FOR PENSION PLAN START-UP COSTS OF SMALL EMPLOYERS.

    (a) Allowance of Credit.--Section 38(b) (defining current year 
business credit) is amended by striking ``plus'' at the end of 
paragraph (11), by striking the period at the end of paragraph (12) and 
inserting ``, plus'', and by adding at the end the following new 
paragraph:
            ``(13) the small employer pension plan start-up cost 
        credit.''.
    (b) Small Employer Pension Plan Start-Up Cost Credit.--Subpart D of 
part IV of subchapter A of chapter 1 (relating to business related 
credits) is amended by adding at the end the following new section:

``SEC. 45D. SMALL EMPLOYER PENSION PLAN START-UP COST CREDIT.

    ``(a) Amount of Credit.--For purposes of section 38--
            ``(1) In general.--The small employer pension plan start-up 
        cost credit for any taxable year is an amount equal to the 
        qualified start-up costs of an eligible employer in 
        establishing a qualified pension plan or qualified employer 
        payroll deduction system.
            ``(2) Aggregate limitation.--The amount of the credit under 
        paragraph (1) for any taxable year shall not exceed $500, 
        reduced by the aggregate amount determined under this section 
        for all preceding taxable years of the taxpayer.
    ``(b) Eligible Employer.--For purposes of this section, the term 
`eligible employer' means an employer which--
            ``(1) had an average daily number of employees during the 
        preceding taxable year not in excess of 50, and
            ``(2) did not make any contributions on behalf of any 
        employee to a qualified pension plan during the 2 taxable years 
        immediately preceding the taxable year.
    ``(c) Other Definitions.--For purposes of this section--
            ``(1) Qualified start-up costs.--The term `qualified start-
        up costs' means any ordinary and necessary expenses of an 
        eligible employer which--
                    ``(A) are paid or incurred in connection with the 
                establishment of a qualified pension plan or a 
                qualified employer payroll deduction system, and
                    ``(B) are of a nonrecurring nature.
            ``(2) Qualified pension plan.--The term `qualified pension 
        plan' means--
                    ``(A) a plan described in section 401(a) which 
                includes a trust exempt from tax under section 501(a),
                    ``(B) a simplified employee pension (as defined in 
                section 408(k)), or
                    ``(C) a simple retirement account (as defined in 
                section 408(p)).
            ``(3) Qualified employer payroll deduction system.--The 
        term `qualified employer payroll deduction system' means a 
        system described in section 103 of the Retirement Security Act 
        of 1997.
    ``(d) Special Rules.--For purposes of this section--
            ``(1) Aggregation rules.--All persons treated as a single 
        employer under subsection (a) or (b) of section 52 or 
        subsection (n) or (o) of section 414 shall be treated as one 
        person.
            ``(2) Disallowance of deduction.--No deduction shall be 
        allowable under this chapter for any qualified start-up costs 
        for which a credit is allowable under subsection (a).''.
    (c) Conforming Amendments.--
            (1) Section 39(d) is amended by adding at the end the 
        following new paragraph:
            ``(8) No carryback of pension credit.--No portion of the 
        unused business credit for any taxable year which is 
        attributable to the small employer pension plan start-up cost 
        credit determined under section 45D may be carried back to a 
        taxable year ending before the date of the enactment of section 
        45D.''.
            (2) The table of sections for subpart D of part IV of 
        subchapter A of chapter 1 is amended by adding at the end the 
        following new item:

``Sec. 45D. Small employer pension plan start-up cost credit.''.
    (d) Effective Date.--The amendments made by this section shall 
apply to costs incurred after the date of the enactment of this Act in 
taxable years ending after such date.

SEC. 162. TREATMENT OF MULTIEMPLOYER PLANS UNDER SECTION 415.

    (a) Compensation Limit.--Paragraph (11) of section 415(b) (relating 
to limitation for defined benefit plans) is amended to read as follows:
            ``(11) Special limitation rule for governmental and 
        multiemployer plans.--In the case of a governmental plan (as 
        defined in section 414(d)) or a multiemployer plan (as defined 
        in section 414(f)), subparagraph (B) of paragraph (1) shall not 
        apply.''.
    (b) Treatment of Certain Excess Benefit Plans.--
            (1) Application of section 457.--Paragraph (14) of section 
        457(e) (relating to other definitions and special rules) is 
        amended to read as follows:
            ``(14) Treatment of excess benefit arrangements.--
                    ``(A) In general.--Subsections (b)(2) and (c)(1) 
                shall not apply to any excess benefit arrangement and 
                benefits provided under such an arrangement shall not 
                be taken into account in determining whether any other 
                plan is an eligible deferred compensation plan.
                    ``(B) Excess benefit arrangement defined.--For 
                purposes of this section, the term `excess benefit 
                arrangement' means a plan which is maintained by an 
                eligible employer solely for purposes of providing 
                benefits for certain employees in excess of the limits 
                on contributions and benefits imposed by section 415. 
                Such term includes a qualified governmental excess 
                benefit arrangement (as defined in section 
                415(m)(3)).''.
            (2) Conforming amendment.--Subparagraph (E) of section 
        457(f)(2) (relating to tax treatment of participants where plan 
        or arrangement of employer is not eligible) is amended to read 
        as follows:
                    ``(E) an excess benefit arrangement (as defined in 
                subsection (e)(14)(B)).''.
    (c) Exemption for Survivor and Disability Benefits.--Subparagraph 
(I) of section 415(b)(2) (relating to limitation for defined benefit 
plans) is amended--
            (1) by inserting ``or a multiemployer plan (as defined in 
        section 414(f))'' after ``section 414(d))'' in clause (i),
            (2) by inserting ``or multiemployer plan'' after 
        ``governmental plan'' in clause (ii), and
            (3) by inserting ``and multiemployer'' after 
        ``governmental'' in the heading.
    (d) Effective Date.--The amendments made by this section shall take 
effect as if included in the amendments made by section 1444 of the 
Small Business Job Protection Act of 1996.

SEC. 163. EXEMPTION OF MIRROR PLANS FROM SECTION 457 LIMITS.

    (a) In General.--Subsection (e) of section 457 (relating to 
deferred compensation plans of State and local governments and tax-
exempt organizations), as amended by section 162(b)(1), is amended by 
adding at the end the following new paragraph:
            ``(15) Exemption for mirror plans.--
                    ``(A) In general.--Amounts of compensation deferred 
                under a mirror plan shall not be taken into account in 
                applying this section to amounts of compensation 
                deferred under any other deferred compensation plan.
                    ``(B) Mirror plan.--The term `mirror plan' means a 
                plan, program, or arrangement maintained solely for the 
                purpose of providing retirement benefits for employees 
                in excess of the limitations imposed by section 
                401(a)(17) or section 415, or both.''.
    (b) Effective Date.--The amendment made by this section shall apply 
to taxable years beginning after December 31, 1996.

SEC. 164. SPECIAL RULES FOR SELF-EMPLOYED INDIVIDUALS.

    (a) Contributions by Self-Employed Individuals Treated as Matching 
Contributions.--Section 414 (relating to definitions and special rules) 
is amended by adding at the end the following new subsection:
    ``(v) Contributions by Self-Employed Individuals Treated as 
Matching Contributions.--For purposes of this title, matching 
contributions (as defined in section 401(m)(4)(A)) made on behalf of a 
self-employed individual shall not be treated as elective deferrals 
(within the meaning of section 402(g)(3)) or as made pursuant to an 
election by the self-employed individual.''.
    (b) Effective Date.--The amendment made by this section shall apply 
to years beginning after December 31, 1996.

SEC. 165. IMMEDIATE PARTICIPATION IN THE THRIFT SAVINGS PLAN FOR 
              FEDERAL EMPLOYEES.

    (a) Elimination of Certain Waiting Periods for Purposes of Employee 
Contributions.--Paragraph (4) of section 8432(b) of title 5, United 
States Code, is amended to read as follows:
    ``(4) The Executive Director shall prescribe such regulations as 
may be necessary to carry out the following:
            ``(A) Notwithstanding subparagraph (A) of paragraph (2), an 
        employee or Member described in such subparagraph shall be 
        afforded a reasonable opportunity to first make an election 
        under this subsection beginning on the date of commencing 
        service or, if that is not administratively feasible, beginning 
        on the earliest date thereafter that such an election becomes 
        administratively feasible, as determined by the Executive 
        Director.
            ``(B) An employee or Member described in subparagraph (B) 
        of paragraph (2) shall be afforded a reasonable opportunity to 
        first make an election under this subsection (based on the 
        appointment or election described in such subparagraph) 
        beginning on the date of commencing service pursuant to such 
        appointment or election or, if that is not administratively 
        feasible, beginning on the earliest date thereafter that such 
        an election becomes administratively feasible, as determined by 
        the Executive Director.
            ``(C) Notwithstanding the preceding provisions of this 
        paragraph, contributions under paragraphs (1) and (2) of 
        subsection (c) shall not be payable with respect to any pay 
        period before the earliest pay period for which such 
        contributions would otherwise be allowable under this 
        subsection if this paragraph had not been enacted.
            ``(D) Sections 8351(a)(2), 8440a(a)(2), 8440b(a)(2), 
        8440c(a)(2), and 8440d(a)(2) shall be applied in a manner 
        consistent with the purposes of subparagraphs (A) and (B), to 
        the extent those subparagraphs can be applied with respect 
        thereto.
            ``(E) Nothing in this paragraph shall affect paragraph 
        (3).''.
    (b) Technical and Conforming Amendments.--
            (1) Section 8432(a) of title 5, United States Code, is 
        amended--
                    (A) in the first sentence by striking ``(b)(1)'' 
                and inserting ``(b)''; and
                    (B) by amending the second sentence to read as 
                follows: ``Contributions under this subsection pursuant 
                to such an election shall, with respect to each pay 
                period for which such election remains in effect, be 
                made in accordance with a program of regular 
                contributions provided in regulations prescribed by the 
                Executive Director.''.
            (2) Section 8432(b)(1)(B) of such title is amended by 
        inserting ``(or any election allowable by virtue of paragraph 
        (4))'' after ``subparagraph (A)''.
            (3) Section 8432(b)(3) of such title is amended by striking 
        ``Notwithstanding paragraph (2)(A), an'' and inserting ``An''.
            (4) Section 8432(i)(1)(B)(ii) of such title is amended by 
        striking ``either elected to terminate individual contributions 
        to the Thrift Savings Fund within 2 months before commencing 
        military service or''.
            (5) Section 8439(a)(1) of such title is amended by 
        inserting ``who makes contributions or'' after ``for each 
        individual'' and by striking ``section 8432(c)(1)'' and 
        inserting ``section 8432''.
            (6) Section 8439(c)(2) of such title is amended by adding 
        at the end the following: ``Nothing in this paragraph shall be 
        considered to limit the dissemination of information only to 
        the times required under the preceding sentence.''.
            (7) Sections 8440a(a)(2) and 8440d(a)(2) of such title are 
        amended by striking all after ``subject to'' and inserting 
        ``subject to this chapter.''.
    (c) Effective Date.--This section shall take effect 6 months after 
the date of the enactment of this Act or such earlier date as the 
Executive Director may by regulation prescribe.

SEC. 166. MODIFICATION OF 10 PERCENT TAX FOR NONDEDUCTIBLE 
              CONTRIBUTIONS.

    (a) In General.--Subparagraph (B) of section 4972(c)(6) (relating 
to exceptions) is amended to read as follows:
                    ``(B) contributions to 1 or more defined 
                contribution plans which are not deductible when 
                contributed solely because of section 404(a)(7), in an 
                amount not in excess of the greater of--
                            ``(i) the amount of contributions not in 
                        excess of 6 percent of compensation (within the 
                        meaning of section 404(a)) paid or accrued 
                        (during the taxable year for which the 
                        contributions were made) to beneficiaries under 
                        the plans, or
                            ``(ii) the amount of contributions 
                        described in section 401(m)(4)(A) or 
                        402(g)(3)(A).''.
    (b) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 1996.

               Subtitle D--Simplifying Plan Requirements

SEC. 171. FULL FUNDING LIMITATION FOR MULTIEMPLOYER PLANS.

    (a) Amendments to Code.--
            (1) Full-funding limitation.--Section 412(c)(7)(C) 
        (relating to full-funding limitation) is amended--
                    (A) by inserting ``or in the case of a 
                multiemployer plan,'' after ``paragraph (6)(B),'', and
                    (B) by inserting ``and multiemployer plans'' after 
                ``paragraph (6)(b)'' in the heading thereof.
            (2) Valuation.--Section 412(c)(9) (relating to annual 
        valuation) is amended--
                    (A) by inserting ``(3 years in the case of a 
                multiemployer plan)'' after ``year'', and
                    (B) by striking ``Annual valuation'' in the heading 
                and inserting ``Valuation''.
    (b) Amendments to ERISA.--
            (1) Full-funding limitation.--Section 302(c)(7)(C) of the 
        Employee Retirement Income Security Act of 1974 (29 U.S.C. 
        1082(c)(7)(C)) is amended--
                    (A) by inserting ``or in the case of a 
                multiemployer plan,'' after ``paragraph (6)(B),'', and
                    (B) by inserting ``and multiemployer plans'' after 
                ``paragraph (6)(b)'' in the heading thereof.
            (2) Valuation.--Section 302(c)(9) of such Act (29 U.S.C. 
        1082(c)(9)) is amended--
                    (A) by inserting ``(3 years in the case of a 
                multiemployer plan)'' after ``year'', and
                    (B) by striking ``Annual valuation'' in the heading 
                and inserting ``Valuation''.
    (c) Effective Date.--The amendments made by this section shall 
apply to plan years beginning after December 31, 1996.

SEC. 172. ELIMINATION OF PARTIAL TERMINATION RULES FOR MULTIEMPLOYER 
              PLANS.

    (a) Partial Termination Rules for Multiemployer Plans.--Section 
411(d)(3) (relating to termination or partial termination; 
discontinuance of contributions) is amended by adding at the end the 
following new sentence: ``This paragraph shall not apply in the case of 
a partial termination of a multiemployer plan.''.
    (b) Effective Date.--The amendment made by this section shall apply 
to partial terminations beginning after December 31, 1996.

SEC. 173. MODIFICATIONS TO NONDISCRIMINATION AND MINIMUM PARTICIPATION 
              RULES WITH RESPECT TO GOVERNMENTAL PLANS.

    (a) General Nondiscrimination and Participation Rules.--
            (1) Nondiscrimination requirements.--Paragraph (5) of 
        section 401(a) (relating to qualified pension, profit-sharing, 
        and stock bonus plans) is amended by adding at the end the 
        following new subparagraph:
                    ``(F) Governmental plans.--Paragraphs (3) and (4) 
                shall not apply to a governmental plan (within the 
                meaning of section 414(d)).''.
            (2) Additional participation requirements.--Subparagraph 
        (H) of section 401(a)(26) is amended to read as follows:
                    ``(H) Exception for governmental plans.--This 
                paragraph shall not apply to a governmental plan 
                (within the meaning of section 414(d)).''.
            (3) Minimum participation standards.--Paragraph (2) of 
        section 410(c) is amended to read as follows:
            ``(2) A plan described in paragraph (1) shall be treated as 
        meeting the requirements of this section for purposes of 
        section 401(a), except that in the case of a plan described in 
        subparagraph (B), (C), or (D) of paragraph (1), this paragraph 
        shall only apply if such plan meets the requirements of section 
        401(a)(3) (as in effect on September 1, 1974).''.
    (b) Participation Standards for Qualified Cash or Deferred 
Arrangements.--Paragraph (3) of section 401(k) is amended by adding at 
the end the following new subparagraph:
                    ``(E)(i) The requirements of subparagraph (A)(i) 
                and (C) shall not apply to a governmental plan (within 
                the meaning of section 414(d)).
                    ``(ii) The requirements of subsection (m)(2) 
                (without regard to subsection (a)(4)) shall apply to 
                any matching contribution of a governmental plan (as so 
                defined).''.
    (c) Nondiscrimination Rules for Section 403(b) Plans.--Paragraph 
(12) of section 403(b) is amended by adding at the end the following 
new subparagraph:
                    ``(C) Governmental plans.--For purposes of 
                paragraph (1)(D), the requirements of subparagraph 
                (A)(i) shall not apply to a governmental plan (within 
                the meaning of section 414(d)).''.
    (d) Effective Date.--
            (1) In general.--The amendments made by this section shall 
        apply to taxable years beginning on or after the date of the 
        enactment of this Act.
            (2) Treatment for years beginning before date of 
        enactment.--A governmental plan (within the meaning of section 
        414(d) of the Internal Revenue Code of 1986) shall be treated 
        as satisfying the requirements of sections 401(a)(3), 
        401(a)(4), 401(a)(26), 401(k), 401(m), 403 (b)(1)(D) and 
        (b)(12), and 410 of such Code for all taxable years beginning 
        before the date of the enactment of this Act.

SEC. 174. ELIMINATION OF REQUIREMENT FOR PLAN DESCRIPTIONS AND THE 
              FILING REQUIREMENT FOR SUMMARY PLAN DESCRIPTIONS AND 
              DESCRIPTIONS OF MATERIAL MODIFICATIONS TO A PLAN; 
              TECHNICAL CORRECTIONS.

    (a) Filing Requirements.--Section 101(b) of the Employee Retirement 
Income Security Act of 1974 (29 U.S.C. 1021(b)) is amended by striking 
paragraphs (1), (2), and (3) and by redesignating paragraphs (4) and 
(5) as paragraphs (1) and (2), respectively.
    (b) Plan Description.--
            (1) In general.--Section 102(a) of the Employee Retirement 
        Income Security Act of 1974 (29 U.S.C. 1022(a)) is amended--
                    (A) by striking paragraph (2), and
                    (B) by striking ``(a)(1)'' and inserting ``(a)''.
            (2) Conforming amendments.--
                    (A) Section 102(b) of such Act (29 U.S.C. 1022(b)) 
                is amended by striking ``The plan description and 
                summary plan description shall contain'' and inserting 
                ``The summary plan description shall contain''.
                    (B) The heading for section 102 of such Act is 
                amended by striking ``plan description and''.
    (c) Furnishing of Reports.--
            (1) In general.--Section 104(a)(1) of the Employee 
        Retirement Income Security Act of 1974 (29 U.S.C. 1024(a)(1)) 
        is amended to read as follows:
    ``Sec. 104. (a)(1) The administrator of any employee benefit plan 
subject to this part shall file with the Secretary the annual report 
for a plan year within 210 days after the close of such year (or within 
such time as may be required by regulations promulgated by the 
Secretary in order to reduce duplicative filing). The Secretary shall 
make copies of such annual reports available for inspection in the 
public document room of the Department of Labor.''.
            (2) Secretary may request documents.--
                    (A) In general.--Section 104(a) of such Act (29 
                U.S.C. 1024(a)) is amended by adding at the end the 
                following new paragraph:
    ``(6) The administrator of any employee benefit plan subject to 
this part shall furnish to the Secretary, upon request, any documents 
relating to the employee benefit plan, including but not limited to, 
the latest summary plan description (including any summaries of plan 
changes not contained in the summary plan description), and the 
bargaining agreement, trust agreement, contract, or other instrument 
under which the plan is established or operated.''.
                    (B) Penalty.--Section 502(c) of such Act (29 U.S.C. 
                1132(c)) is amended by redesignating paragraph (6) as 
                paragraph (7) and by inserting after paragraph (5) the 
                following new paragraph:
    ``(6) If, within 30 days of a request by the Secretary to a plan 
administrator for documents under section 104(a)(6), the plan 
administrator fails to furnish the material requested to the Secretary, 
the Secretary may assess a civil penalty against the plan administrator 
of up to $100 a day from the date of such failure (but in no event in 
excess of $1,000 per request). No penalty shall be imposed under this 
paragraph for any failure resulting from matters reasonably beyond the 
control of the plan administrator.''.
    (d) Conforming Amendments.--
            (1) Section 104(b)(1) of the Employee Retirement Income 
        Security Act of 1974 (29 U.S.C. 1024(b)(1)) is amended by 
        striking ``section 102(a)(1)'' each place it appears and 
        inserting ``section 102(a)''.
            (2) Section 104(b)(2) of such Act (29 U.S.C. 1024(b)(2)) is 
        amended by striking ``the plan description and'' and inserting 
        ``the latest updated summary plan description and''.
            (3) Section 104(b)(4) of such Act (29 U.S.C. 1024(b)(4)) is 
        amended by striking ``plan description''.
            (4) Section 106(a) of such Act (29 U.S.C. 1026(a)) is 
        amended by striking ``descriptions,''.
            (5) Section 107 of such Act (29 U.S.C. 1027) is amended by 
        striking ``description or''.
            (6) Paragraph (2)(B) of section 108 of such Act (29 U.S.C. 
        1028) is amended to read as follows: ``(B) after publishing or 
        filing the annual reports,''.
            (7) Section 502(a)(6) of such Act (29 U.S.C. 1132(a)(6)) is 
        amended by striking ``or (5)'' and inserting ``(5), or (6)''.
    (e) Technical Correction.--Section 1144(c) of the Social Security 
Act (42 U.S.C. 1320b-14(c)) is amended by redesignating paragraph (9) 
as paragraph (8).

SEC. 175. NEW TECHNOLOGIES IN RETIREMENT PLANS.

    The Secretary of the Treasury and the Secretary of Labor shall 
expand their efforts to examine existing guidance regarding notice, 
recordkeeping, and operational requirements for retirement plans, in 
order to permit the use of new technologies by plan sponsors and 
administrators in ways which maintain the protection of the rights of 
participants and beneficiaries.

                           TITLE II--SECURITY

SEC. 200. AMENDMENT OF ERISA.

    Except as otherwise expressly provided, whenever in this title an 
amendment or repeal is expressed in terms of an amendment to, or repeal 
of, a section or other provision, the reference shall be considered to 
be made to a section or other provision of the Employee Retirement 
Income Security Act of 1974.

                     Subtitle A--General Provisions

SEC. 201. SECTION 401(k) INVESTMENT PROTECTION.

    (a) Limitations on Investment in Employer Securities and Employer 
Real Property by Cash or Deferred Arrangements.--Paragraph (3) of 
section 407(d) (29 U.S.C. 1107(d)) is amended by adding at the end the 
following new subparagraph:
            ``(D) The term `eligible individual account plan' does not 
        include that portion of an individual account plan that 
        consists of elective deferrals (as defined in section 402(g)(3) 
        of the Internal Revenue Code of 1986) pursuant to a qualified 
        cash or deferred arrangement as defined in section 401(k) of 
        the Internal Revenue Code of 1986 (and earnings thereon), if 
        such elective deferrals (or earnings thereon) are required to 
        be invested in qualifying employer securities or qualifying 
        employer real property or both pursuant to the documents and 
        instruments governing the plan or at the direction of a person 
        other than the participant (or the participant's beneficiary) 
        on whose behalf such elective deferrals are made to the plan. 
        For the purposes of subsection (a), such portion shall be 
        treated as a separate plan. This subparagraph shall not apply 
        to an individual account plan if the fair market value of the 
        assets of all individual account plans maintained by the 
        employer equals not more than 10 percent of the fair market 
        value of the assets of all pension plans maintained by the 
        employer.''.
    (b) Effective Date.--
            (1) In general.--The amendments made by this section shall 
        take effect on the date of the enactment of this Act.
            (2) Transition rule for plans holding excess securities or 
        property.--
                    (A) In general.--In the case of a plan which on the 
                date of the enactment of this Act, has holdings of 
                employer securities and employer real property (as 
                defined in section 407(d) of the Employee Retirement 
                Income Security Act of 1974 (29 U.S.C. 1107(d)) in 
                excess of the amount specified in such section 407, the 
                amendment made by this section applies to any 
                acquisition of such securities and property on or after 
                such date, but does not apply to the specific holdings 
                which constitute such excess during the period of such 
                excess.
                    (B) Special rule for certain acquisitions.--
                Employer securities and employer real property acquired 
                pursuant to a binding written contract to acquire such 
                securities and real property entered into and in effect 
                on the date of the enactment of this Act, shall be 
                treated as acquired immediately before such date.

SEC. 202. REQUIREMENT OF ANNUAL, DETAILED INVESTMENT REPORTS APPLIED TO 
              CERTAIN 401(k) PLANS.

    (a) In General.--Section 104(b)(3) (29 U.S.C. 1024(b)(3)) is 
amended--
            (1) by inserting ``(A)'' after ``(3)''; and
            (2) by adding at the end the following new subparagraph:
            ``(B)(i) If a plan includes a qualified cash or deferred 
        arrangement (as defined in section 401(k)(2) of the Internal 
        Revenue Code of 1986) and is maintained by an employer with 
        less than 100 participants, the administrators shall furnish to 
        each participant and to each beneficiary receiving benefits 
        under the plan an annual investment report detailing such 
        information as the Secretary by regulation shall require.
            ``(ii) Clause (i) shall not apply with respect to any 
        participant described in section 404(c).''.
    (b) Regulations.--
            (1) In general.--The Secretary of Labor, in prescribing 
        regulations required under section 104(b)(3)(B)(i) of the 
        Employee Retirement Income Security Act of 1974 (29 U.S.C. 
        1023(b)(3)(B)(i)), as added by subsection (a), shall consider 
        including in the information required in an annual investment 
        report the following:
                    (A) Total plan assets and liabilities as of the 
                beginning and ending of the plan year.
                    (B) Plan income and expenses and contributions made 
                and benefits paid for the plan year.
                    (C) Any transaction between the plan and the 
                employer, any fiduciary, or any 10-percent owner during 
                the plan year, including the acquisition of any 
                employer security or employer real property.
                    (D) Any noncash contributions made to or purchases 
                of nonpublicly traded securities made by the plan 
                during the plan year without an appraisal by an 
                independent third party.
        In determining the types of information to be included in the 
        annual investment report presented to participants and 
        beneficiaries, the Secretary of Labor shall take into account 
        the purposes of the diversification protection provided to such 
        participants and beneficiaries by section 407(d)(3)(D) of the 
        Employee Retirement Income Security Act of 1974 (29 U.S.C. 
        1107(d)(3)(D)), as added by section 201(a).
            (2) Electronic transfer.--The Secretary of Labor in 
        prescribing such regulations shall also make provision for the 
        electronic transfer of the required annual investment report by 
        a plan administrator to plan participants and beneficiaries.
    (c) Effective Date.--The amendment made by subsection (a) shall 
apply to plan years beginning after the date of the enactment of this 
Act.

SEC. 203. STUDY ON INVESTMENTS IN COLLECTIBLES.

    (a) Study.--The Secretary of Labor, in consultation with the 
Secretary of the Treasury, shall study the extent to which pension 
plans invest in collectibles and whether such investments present a 
risk to the pension security of the participants and beneficiaries of 
such plans.
    (b) Report.--Not later than 12 months after the date of the 
enactment of this Act, the Secretary of Labor shall submit a report to 
the Congress containing the findings of the study described in 
subsection (a) and any recommendations for legislative action.

SEC. 204. QUALIFIED EMPLOYER PLANS PROHIBITED FROM MAKING LOANS THROUGH 
              CREDIT CARDS AND OTHER INTERMEDIARIES.

    (a) In General.--Subsection (a) of section 401 of the Internal 
Revenue Code of 1986 is amended by adding at the end the following new 
paragraph:
            ``(35) Prohibition of loans through credit cards and other 
        intermediaries.--A trust shall not constitute a qualified trust 
        under this section if the plan makes any loan to any 
        beneficiary under the plan through the use of any credit card 
        or any other intermediary.''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply to plan years beginning after the date of the enactment of this 
Act.

SEC. 205. MULTIEMPLOYER PLAN BENEFITS GUARANTEED.

    (a) In General.--Section 4022A(c) (29 U.S.C. 1322a(c)) is amended--
            (1) by striking ``$5'' each place it appears in paragraph 
        (1) and inserting ``$11'',
            (2) by striking ``$15'' in paragraph (1) and inserting 
        ``$33'', and
            (3) by striking paragraphs (2), (5), and (6) and by 
        redesignating paragraphs (3) and (4) as paragraphs (2) and (3), 
        respectively.
    (b) Effective Date.--The amendments made by this section shall 
apply to any multiemployer plan that has not received financial 
assistance (within the meaning of section 4261 of the Employee 
Retirement Income Security Act of 1974) within the 1-year period ending 
on the date of the enactment of this Act.

SEC. 206. PROHIBITED TRANSACTIONS.

    (a) In General.--Section 502(i) (29 U.S.C. 1132(i)) is amended by 
striking ``5 percent'' and inserting ``10 percent''.
    (b) Effective Date.--The amendments made by this section shall 
apply to prohibited transactions occurring after the date of the 
enactment of this Act.

SEC. 207. SUBSTANTIAL OWNER BENEFITS.

    (a) Modification of Phase-in of Guarantee.--Subparagraphs (B) and 
(C) of section 4022(b)(5) (29 U.S.C. 1322(b)(5)) are amended to read as 
follows:
    ``(B) For purposes of this title, the term `majority owner' has the 
same meaning as substantial owner under subparagraph (A), except that 
subparagraph (A) shall be applied by substituting `50 percent or more' 
for `more than 10 percent' each place it appears.
    ``(C) In the case of a participant who is a majority owner, the 
amount of benefits guaranteed under this section shall not exceed the 
product of--
            ``(i) a fraction (not to exceed 1) the numerator of which 
        is the number of years from the later of the effective date or 
        the adoption date of the plan to the termination date, and the 
        denominator of which is 30, and
            ``(ii) the amount of the majority owner's monthly benefits 
        guaranteed under subsection (a) (as limited by paragraph (3) of 
        this subsection).''.
    (b) Modification of Allocation of Assets.--
            (1) Section 4044(a)(4)(B) (29 U.S.C. 1344(a)(4)(B)) is 
        amended by striking ``section 4022(b)(5)'' and inserting 
        ``section 4022(b)(5)(C)''.
            (2) Section 4044(b) (29 U.S.C. 1344(b)) is amended--
                    (A) by striking ``(5)'' in paragraph (2) and 
                inserting ``(4), (5),'', and
                    (B) by redesignating paragraphs (3) through (6) as 
                paragraphs (4) through (7), respectively, and by 
                inserting after paragraph (2) the following new 
                paragraph:
            ``(3) If assets available for allocation under paragraph 
        (4) of subsection (a) are insufficient to satisfy in full the 
        benefits of all individuals who are described in that 
        paragraph, the assets shall be allocated first to benefits 
        described in subparagraph (A) of that paragraph. Any remaining 
        assets shall then be allocated to subparagraph (B). If assets 
        allocated to subparagraph (B) are insufficient to satisfy in 
        full the benefits in that subparagraph, the assets shall be 
        allocated pro rata among individuals on the basis of the 
        present value (as of the termination date) of their respective 
        benefits described in that subparagraph.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to plan terminations--
            (1) under section 4041(c) of the Employee Retirement Income 
        Security Act of 1974 (29 U.S.C. 1341(c)) with respect to which 
        notices of intent to terminate are provided under section 
        4041(a)(2) of such Act (29 U.S.C. 1341(a)(2)) on or after the 
        date of the enactment of this Act, or
            (2) under section 4042 of such Act (29 U.S.C. 1342) with 
        respect to which proceedings are instituted by the corporation 
        on or after such date.

SEC. 208. REVERSION REPORT.

    (a) In General.--Section 4008 (29 U.S.C. 1308) is amended by adding 
at the end the following new subsection:
    ``(b) Reversion Report.--As soon as practicable after the close of 
each fiscal year, the Secretary of Labor (acting in the Secretary's 
capacity as chairman of the corporation's board) shall transmit to the 
President and the Congress a report providing information on plans from 
which residual assets were distributed to employers pursuant to section 
4044(d).''.
    (b) Conforming Amendment.--Section 4008 (29 U.S.C. 1308) is amended 
by striking ``Sec. 4008.'' and inserting ``Sec. 4008. (a) Annual 
Report.--''.
    (c) Effective Date.--The amendments made by this section shall 
apply to fiscal years beginning after September 30, 1996.

SEC. 209. DEVELOPMENT OF ADDITIONAL REMEDIES.

    (a) Findings.--The Congress finds that--
            (1) the provisions of this Act, like many of those proposed 
        by the President and recently signed into law, are designed to 
        expand retirement savings;
            (2) this goal can be achieved in part by simplifying the 
        pension system and reducing administrative costs of maintaining 
        pension plans for all employers;
            (3) such simplification can benefit not only the 
        implementation and ongoing administration of pension plans but 
        also the correction of problems that arise in the operation of 
        such plans;
            (4) the Secretary of the Treasury has commendably already 
        acted to develop programs intended to facilitate such 
        corrections; and
            (5) efficient correction serves participants and 
        beneficiaries not only by fulfilling the law's requirements 
        regarding pension plans but also by directing funds into plans 
        rather than toward correction efforts and by encouraging 
        employers to continue to sponsor support for such plans.
    (b) Sense of Congress.--It is the sense of the Congress that the 
Secretary of the Treasury should--
            (1) review existing correction mechanisms to determine 
        whether modifications might facilitate additional utilization 
        by sponsors, improve voluntary compliance, and hasten the 
        correction of pension plans,
            (2) consider whether additional means of addressing 
        nonegregious violations should be explored,
            (3) make whatever legislative recommendations, if any, 
        appear necessary to fulfill these goals, and
            (4) remain cognizant that the Congress, as well as the 
        Secretary, considers the continuing security of retirement 
        savings for workers, retirees, and beneficiaries of fundamental 
        importance.

                     Subtitle B--ERISA Enforcement

SEC. 211. REPEAL OF LIMITED SCOPE AUDIT.

    (a) In General.--Section 103(a)(3)(C) (29 U.S.C. 1023(a)(3)(C)) is 
amended by adding at the end the following:
    ``(ii) If an accountant is offering an opinion under this section 
in the case of an employee pension benefit plan, the accountant shall, 
to the extent consistent with generally accepted auditing standards, 
rely on the work of any independent public accountant of any bank or 
similar institution or insurance carrier that holds assets or processes 
transactions of the employee pension benefit plan provided that such 
bank, institution, or insurance carrier is regulated, supervised, and 
subject to periodic examination by a State or Federal agency.''.
    (b) Conforming Amendments.--
            (1) Section 103(a)(3)(A) of such Act (29 U.S.C. 
        1023(a)(3)(A)) is amended by striking ``subparagraph (C)'' and 
        inserting ``subparagraph (C)(i)''.
            (2) Section 103(a)(3)(C) of such Act (29 U.S.C. 
        1023(a)(3)(C)) is amended by striking ``(C) The'' and inserting 
        ``(C)(i) In the case of an employee benefit plan other than an 
        employee pension benefit plan, the''.
    (c) Effective Date.--The amendments made by this section shall 
apply with respect to opinions required under section 103(a)(3)(A) of 
the Employee Retirement Income Security Act of 1974 for plan years 
beginning on or after January 1 of the calendar year following the date 
of the enactment of this Act.

SEC. 212. ADDITIONAL REQUIREMENTS FOR QUALIFIED PUBLIC ACCOUNTANTS.

    (a) In General.--Section 103(a)(3)(D) (29 U.S.C. 1023(a)(3)(D)) is 
amended--
            (1) by inserting ``(i)'' after ``(D)'';
            (2) by inserting ``, with respect to any engagement of an 
        accountant under subparagraph (A)'' after ``means'';
            (3) by redesignating clauses (i), (ii), and (iii) as 
        subclauses (I), (II), and (III), respectively;
            (4) by striking the period at the end of subclause (III) 
        (as so redesignated) and inserting a comma;
            (5) by adding after subclause (III) (as so redesignated), 
        and flush with clause (i), the following:
                        ``but only if such person meets the 
                        requirements of clauses (ii) and (iii) with 
                        respect to such engagement.''; and
            (6) by adding at the end the following new clauses:
                            ``(ii) A person meets the requirements of 
                        this clause with respect to an engagement of 
                        such person as an accountant under subparagraph 
                        (A) if such person--
                                    ``(I) has in operation an 
                                appropriate internal quality control 
                                system;
                                    ``(II) has undergone a qualified 
                                external quality control review of the 
                                person's accounting and auditing 
                                practices, including such practices 
                                relevant to employee benefit plans (if 
                                any), during the 3-year period 
                                immediately preceding such engagement; 
                                and
                                    ``(III) has completed, within the 
                                2-year period immediately preceding 
                                such engagement, at least 80 hours of 
                                continuing education or training which 
                                contributes to the accountant's 
                                professional proficiency and which 
                                meets such requirements as may be 
                                prescribed by the Secretary in 
                                regulations.
                        The Secretary shall issue the regulations under 
                        subclause (III) not later than December 31, 
                        1998.
                            ``(iii) A person meets the requirements of 
                        this clause with respect to an engagement of 
                        such person as an accountant under subparagraph 
                        (A) if such person meets such additional 
                        requirements and qualifications of regulations 
                        which the Secretary deems necessary to ensure 
                        the quality of plan audits.
                            ``(iv) For purposes of clause (ii)(II), an 
                        external quality control review shall be 
                        treated as qualified with respect to a person 
                        referred to in clause (ii) if--
                                    ``(I) such review is performed in 
                                accordance with the requirements of 
                                external quality control review 
                                programs of recognized auditing 
                                standard-setting bodies, as determined 
                                in regulations of the Secretary, and
                                    ``(II) in the case of any such 
                                person who has, during the peer review 
                                period, conducted one or more previous 
                                audits of employee benefit plans, such 
                                review includes the review of an 
                                appropriate number (determined as 
                                provided in such regulations, but in no 
                                case less than one) of plan audits in 
                                relation to the scale of such person's 
                                auditing practice.
                        The Secretary shall issue the regulations under 
                        subclause (I) not later than December 31, 
                        1998.''.
    (b) Effective Dates.--
            (1) In general.--Except as provided in paragraph (2), the 
        amendments made by this section shall apply with respect to 
        plan years beginning on or after the date which is 3 years 
        after the date of the enactment of this Act.
            (2) Restrictions on conducting examinations.--Clause (iii) 
        of section 103(a)(3)(D) of the Employee Retirement Income 
        Security Act of 1974 (as added by subsection (a)(6)) shall take 
        effect on the date of the enactment of this Act.

SEC. 213. CLARIFICATION OF FIDUCIARY PENALTIES.

    (a) Modification of Prohibition of Assignment or Alienation.--
            (1) In general.--Section 206(d) (29 U.S.C. 1056(d)) is 
        amended by adding at the end the following new paragraphs:
    ``(4) Paragraph (1) shall not apply to any offset of a 
participant's accrued benefit in an employee pension benefit plan 
against an amount that the participant is ordered or required to pay to 
the plan if--
            ``(A) the order or requirement to pay arises--
                    ``(i) under a judgment of conviction for a crime 
                involving such plan,
                    ``(ii) under a civil judgment (including a consent 
                order or decree) entered by a court in an action 
                brought in connection with a violation (or alleged 
                violation) of part 4 of this subtitle, or
                    ``(iii) pursuant to a settlement agreement between 
                the Secretary and the participant, or a settlement 
                agreement between the Pension Benefit Guaranty 
                Corporation and the participant, in connection with a 
                violation (or alleged violation) of part 4 of this 
                subtitle by a fiduciary or any other person,
            ``(B) the judgment, order, decree, or settlement agreement 
        expressly provides for the offset of all or part of the amount 
        ordered or required to be paid to the plan against the 
        participant's accrued benefit in the plan, and
            ``(C) if the participant has a spouse at the time at which 
        the offset is to be made--
                    ``(i) such spouse has consented in writing to such 
                offset and such consent is witnessed by a notary public 
                or representative of the plan,
                    ``(ii) such spouse is ordered or required in such 
                judgment, order, decree, or settlement to pay an amount 
                to the plan in connection with a violation of part 4 of 
                this title, or
                    ``(iii) in such judgment, order, decree, or 
                settlement, such spouse retains the right to receive 
                the value of the survivor annuity under a qualified 
                joint and survivor annuity provided pursuant to section 
                205(a)(1) and under a qualified preretirement survivor 
                annuity provided pursuant to section 205(a)(2), 
                determined in accordance with paragraph (5).
    ``(5)(A) The value of the survivor annuity described in paragraph 
(4)(C)(iii) shall be determined as if--
            ``(i) the participant terminated employment on the date of 
        the offset,
            ``(ii) there was no offset,
            ``(iii) the plan permitted retirement only on or after 
        normal retirement age,
            ``(iv) the plan provided only the minimum-required 
        qualified joint and survivor annuity, and
            ``(v) the amount of the qualified preretirement survivor 
        annuity under the plan is equal to the amount of the survivor 
        annuity payable under the minimum-required qualified joint and 
        survivor annuity.
    ``(B) For purposes of this paragraph, the term `minimum-required 
qualified joint and survivor annuity' means the qualified joint and 
survivor annuity which is the actuarial equivalent of a single annuity 
for the life of the participant and under which the survivor annuity is 
50 percent of the amount of the annuity which is payable during the 
joint lives of the participant and the spouse.''.
            (2) Effective date.--The amendment made by this subsection 
        shall apply to judgments, orders, and decrees issued, and 
        settlement agreements entered into, on or after the date of the 
        enactment of this Act.
    (b) Civil Penalties for Breach of Fiduciary Responsibility.--
            (1) Imposition and amount of penalty made discretionary.--
        Section 502(l)(1) (29 U.S.C. 1132(l)(1)) is amended--
                    (A) by striking ``shall'' and inserting ``may'', 
                and
                    (B) by striking ``equal to'' and inserting ``not 
                greater than''.
            (2) Applicable recovery amount.--Section 502(l)(2) (29 
        U.S.C. 1132(l)(2)) is amended to read as follows:
    ``(2) For purposes of paragraph (1), the term `applicable recovery 
amount' means any amount which is recovered from (or on behalf of) any 
fiduciary or other person with respect to a breach or violation 
described in paragraph (1) on or after the 30th day following receipt 
by such fiduciary or other person of written notice from the Secretary 
of the violation, whether paid voluntarily or by order of a court in a 
judicial proceeding instituted by the Secretary under subsection (a)(2) 
or (a)(5). The Secretary may, in the Secretary's sole discretion, 
extend the 30-day period described in the preceding sentence.''.
            (3) Other rules.--Section 502(l) (29 U.S.C. 1132(l)) is 
        amended by adding at the end the following new paragraphs:
    ``(5) A person shall be jointly and severally liable for the 
penalty described in paragraph (1) to the same extent that such person 
is jointly and severally liable for the applicable recovery amount on 
which the penalty is based.
    ``(6) No penalty shall be assessed under this subsection unless the 
person against whom the penalty is assessed is given notice and 
opportunity for a hearing with respect to the violation and applicable 
recovery amount.''.
            (4) Effective dates.--
                    (A) In general.--The amendments made by this 
                subsection shall apply to any breach of fiduciary 
                responsibility or other violation of part 4 of subtitle 
                B of title I of the Employee Retirement Income Security 
                Act of 1974 occurring on or after the date of the 
                enactment of this Act.
                    (B) Transition rule.--In applying the amendment 
                made by paragraph (2) (relating to applicable recovery 
                amount), a breach or other violation occurring before 
                the date of the enactment of this Act which continues 
                after the 180th day after such date (and which may have 
                been discontinued at any time during its existence) 
                shall be treated as having occurred after such date of 
                enactment.

SEC. 214. CONFORMING AMENDMENTS RELATING TO ERISA ENFORCEMENT.

    (a) Special Rule for Certain Judgments and Settlements.--Section 
401(a)(13) of the Internal Revenue Code of 1986 (relating to assignment 
and alienation) is amended by adding at the end the following new 
subparagraphs:
                    ``(C) Special rule for certain judgments and 
                settlements.--Subparagraph (A) shall not apply to any 
                offset of a participant's accrued benefit in a plan 
                against an amount that the participant is ordered or 
                required to pay to the plan if--
                            ``(i) the order or requirement to pay 
                        arises--
                                    ``(I) under a judgment of 
                                conviction for a crime involving such 
                                plan,
                                    ``(II) under a civil judgment 
                                (including a consent order or decree) 
                                entered by a court in an action brought 
                                in connection with a violation (or 
                                alleged violation) of part 4 of 
                                subtitle B of title I of the Employee 
                                Retirement Income Security Act of 1974, 
                                or
                                    ``(III) pursuant to a settlement 
                                agreement between the Secretary of 
                                Labor and the participant, or a 
                                settlement agreement between the 
                                Pension Benefit Guaranty Corporation 
                                and the participant, in connection with 
                                a violation (or alleged violation) of 
                                part 4 of subtitle B of title I of such 
                                Act,
                            ``(ii) the judgment, order, decree, or 
                        settlement agreement expressly provides for the 
                        offset of all or part of the amount ordered or 
                        required to be paid to the plan against the 
                        participant's accrued benefit in the plan, and
                            ``(iii) if the participant has a spouse at 
                        the time at which the offset is to be made--
                                    ``(I) such spouse has consented in 
                                writing to such offset and such consent 
                                is witnessed by a notary public or 
                                representative of the plan,
                                    ``(II) such spouse is ordered or 
                                required to pay in such judgment, 
                                order, decree, or settlement an amount 
                                to the plan in connection with a 
                                violation of part 4 of this title, or
                                    ``(III) in such judgment, order, 
                                decree, or settlement, such spouse 
                                retains the right to receive the value 
                                of the survivor annuity under a 
                                qualified joint and survivor annuity 
                                provided pursuant to paragraph 
                                (11)(A)(i) and under a qualified 
                                preretirement survivor annuity provided 
                                pursuant to paragraph (11)(A)(ii), 
                                determined in accordance with 
                                subparagraph (D).
                    ``(D) Determination of value of survivor annuity in 
                connection with offset.--The value of the survivor 
                annuity described in subparagraph (C)(iii)(III) shall 
                be determined as if--
                            ``(i) the participant terminated employment 
                        on the date of the offset,
                            ``(ii) there was no offset,
                            ``(iii) the plan permitted retirement only 
                        on or after normal retirement age,
                            ``(iv) the plan provided only the minimum-
                        required qualified joint and survivor annuity, 
                        and
                            ``(v) the amount of the qualified 
                        preretirement survivor annuity under the plan 
                        is equal to the amount of the survivor annuity 
                        payable under the minimum-required qualified 
                        joint and survivor annuity.
                For purposes of this subparagraph, the term `minimum-
                required qualified joint and survivor annuity' means 
                the qualified joint and survivor annuity which is the 
                actuarial equivalent of a single annuity for the life 
                of the participant and under which the survivor annuity 
                is 50 percent of the amount of the annuity which is 
                payable during the joint lives of the participant and 
                the spouse.
                    ``(E) Waiver of certain distribution 
                requirements.--With respect to the requirements of 
                subsections (a) and (k) of section 401, section 403(b), 
                and section 409(d), a plan shall not be treated as 
                failing to meet such requirements solely by reason of 
                an offset under subparagraph (C).''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply to judgments, orders, and decrees issued, and settlement 
agreements entered into, on or after the date of the enactment of this 
Act.

                         TITLE III--PORTABILITY

SEC. 301. FASTER VESTING OF EMPLOYER MATCHING CONTRIBUTIONS.

    (a) In General.--Paragraph (2) of section 203(a) of the Employee 
Retirement Income Security Act of 1974 (29 U.S.C. 1053(a)) is amended--
            (1) by striking ``or (B)'' and inserting ``(B), and, if 
        applicable, (C)'',
            (2) by striking ``3'', ``4'', ``5'', ``6'', and ``7'' in 
        the table in subparagraph (B) and inserting ``1'', ``2'', 
        ``3'', ``4'', and ``5'', respectively, and
            (3) by adding at the end the following new subparagraph:
            ``(C) 401(k) plans.--A plan satisfies the requirements of 
        this subparagraph if--
                    ``(i) the plan includes a qualified cash or 
                deferred arrangement (as defined in section 401(k)(2)) 
                of the Internal Revenue Code of 1986, and
                    ``(ii) an employee who has completed at least 3 
                years of service has a nonforfeitable right to 100 
                percent of the employee's accrued benefit derived from 
                employer matching contributions (as defined in section 
                401(m)(4)(A) of such Code).
        For purposes of this subparagraph, matching contributions shall 
        be taken into account regardless of whether the matching 
        contributions are made to the same plan as the contributions 
        made under section 401(k) of such Code, and matching 
        contributions to any plan shall be taken into account if such 
        matching contributions are made with respect to after-tax 
        employee contributions includible in gross income and if the 
        employer's limit on matching contributions with respect to such 
        includible employee contributions is coordinated with the 
        employer's limit on matching contributions with respect to 
        contributions under such section.''.
    (b) Conforming Amendments.--Paragraph (2) of section 411(a) of the 
Internal Revenue Code of 1986 (relating to employer contributions) is 
amended--
            (1) by striking ``or (B)'' and inserting ``(B), and, if 
        applicable, (C)'',
            (2) by striking ``3'', ``4'', ``5'', ``6'', and ``7'' in 
        the table in subparagraph (B) and inserting ``1'', ``2'', 
        ``3'', ``4'', and ``5'', respectively,
            (3) by striking ``3 to 7'' and inserting ``1 to 5'', and
            (4) by adding at the end the following new subparagraph:
                    ``(C) 401(k) plans.--A plan satisfies the 
                requirements of this subparagraph if--
                            ``(i) the plan includes a qualified cash or 
                        deferred arrangement (as defined in section 
                        401(k)(2)), and
                            ``(ii) an employee who has completed at 
                        least 3 years of service has a nonforfeitable 
                        right to 100 percent of the employee's accrued 
                        benefit derived from employer matching 
                        contributions (as defined in section 
                        401(m)(4)(A)).
                For purposes of this subparagraph, matching 
                contributions shall be taken into account regardless of 
                whether the matching contributions are made to the same 
                plan as the contributions made under section 401(k), 
                and matching contributions to any plan shall be taken 
                into account if such matching contributions are made 
                with respect to after-tax employee contributions and if 
                the employer's limit on matching contributions with 
                respect to such after-tax employee contributions is 
                coordinated with the employer's limit on matching 
                contributions with respect to contributions under such 
                section.''.
    (c) Effective Date.--
            (1) In general.--Except as provided in paragraphs (2) and 
        (3), the amendments made by this section shall apply to plan 
        years beginning after December 31, 1997.
            (2) Application to current employees.--The amendments made 
        by this section shall not apply to any employee who does not 
        have at least 1 hour of service in any plan year beginning 
        after December 31, 1997.
            (3) Collective bargaining agreements.--In the case of a 
        plan maintained pursuant to 1 or more collective bargaining 
        agreements between employee representatives and 1 or more 
        employers ratified by the date of the enactment of this Act, 
        the amendments made by this section shall not apply to 
        employees covered by any such agreement in plan years beginning 
        before the earlier of--
                    (A) the later of--
                            (i) the date on which the last of such 
                        collective bargaining agreements terminates 
                        (determined without regard to any extension 
                        thereof on or after such date of enactment), or
                            (ii) January 1, 1998, or
                    (B) January 1, 2002.

SEC. 302. RATIONALIZE THE RESTRICTIONS ON DISTRIBUTIONS FROM 401(k) 
              PLANS.

    (a) In General.--Section 401(k)(2)(B)(i)(I) of the Internal Revenue 
Code of 1986 (relating to qualified cash or deferred arrangements) is 
amended by striking ``separation from service'' and inserting 
``severance from employment''.
    (b) Business Sale Requirements Deleted.--
            (1) In general.--Section 401(k)(2)(B)(i)(II) of the 
        Internal Revenue Code of 1986 (relating to qualified cash or 
        deferred arrangements) is amended by striking ``an event'' and 
        inserting ``a plan termination''.
            (2) Conforming amendments.--Section 401(k)(10) of such Code 
        is amended--
                    (A) by striking subparagraph (A) and inserting the 
                following:
                    ``(A) In general.--A plan termination is described 
                in this paragraph if the termination of the plan is 
                without establishment or maintenance of another defined 
                contribution plan (other than an employee stock 
                ownership plan as defined in section 4975(e)(7)).'',
                    (B) by striking subparagraph (C), and
                    (C) by striking ``or disposition of assets or 
                subsidiary'' in the heading.
    (c) Effective Date.--The amendments made by this section shall 
apply to distributions after December 31, 1997.

SEC. 303. TREATMENT OF TRANSFERS BETWEEN DEFINED CONTRIBUTION PLANS.

    (a) In General.--Section 411(d)(6) of the Internal Revenue Code of 
1986 (relating to accrued benefit not to be decreased by amendment) is 
amended by adding at the end the following new subparagraph:
                    ``(D) Plan transfers.--A defined contribution plan 
                (in this subparagraph referred to as the `transferee 
                plan') shall not be treated as failing to meet the 
                requirements of this paragraph merely because the 
                transferee plan does not provide some or all of the 
                forms of distribution previously available under 
                another defined contribution plan (in this subparagraph 
                referred to as the `transferor plan') to the extent 
                that--
                            ``(i) the forms of distribution previously 
                        available under the transferor plan applied to 
                        the account of a participant or beneficiary 
                        under the transferor plan that was transferred 
                        from the transferor plan to the transferee plan 
                        pursuant to a direct transfer rather than 
                        pursuant to a distribution from the transferor 
                        plan,
                            ``(ii) the terms of both the transferor 
                        plan and the transferee plan authorize the 
                        transfer described in clause (i),
                            ``(iii) the transfer described in clause 
                        (i) was made pursuant to a voluntary election 
                        by the participant or beneficiary whose account 
                        was transferred to the transferee plan,
                            ``(iv) the election described in clause 
                        (iii) was made after the participant or 
                        beneficiary received a notice describing the 
                        consequences of making the election,
                            ``(v) if the transferor plan provides for 
                        an annuity as the normal form of distribution 
                        under the plan in accordance with section 417, 
                        the transfer is made with the consent of the 
                        participant's spouse (if any), and such consent 
                        meets requirements similar to the requirements 
                        imposed by section 417(a)(2), and
                            ``(vi) the transferee plan allows the 
                        participant or beneficiary described in clause 
                        (iii) to receive any distribution to which the 
                        participant or beneficiary is entitled under 
                        transferee plan in the form of a single sum 
                        distribution.''.
    (b) Conforming Amendment.--Section 204(g) of the Employee 
Retirement Income Security Act of 1974 (29 U.S.C. 1054(g)) is amended 
by adding at the end the following new paragraph:
    ``(4) A defined contribution plan (in this paragraph referred to as 
the `transferee plan') shall not be treated as failing to meet the 
requirements of this subsection merely because the transferee plan does 
not provide some or all of the forms of distribution previously 
available under another defined contribution plan (in this paragraph 
referred to as the `transferor plan') to the extent that--
            ``(A) the forms of distribution previously available under 
        the transferor plan applied to the account of a participant or 
        beneficiary under the transferor plan that was transferred from 
        the transferor plan to the transferee plan pursuant to a direct 
        transfer rather than pursuant to a distribution from the 
        transferor plan,
            ``(B) the terms of both the transferor plan and the 
        transferee plan authorize the transfer described in 
        subparagraph (A),
            ``(C) the transfer described in subparagraph (A) was made 
        pursuant to a voluntary election by the participant or 
        beneficiary whose account was transferred to the transferee 
        plan,
            ``(D) the election described in subparagraph (C) was made 
        after the participant or beneficiary received a notice 
        describing the consequences of making the election,
            ``(E) if the transferor plan provides for an annuity as the 
        normal form of distribution under the plan in accordance with 
        section 205, the transfer is made with the consent of the 
        participant's spouse (if any), and such consent meets 
        requirements similar to the requirements imposed by section 
        205(c)(2), and
            ``(F) the transferee plan allows the participant or 
        beneficiary described in subparagraph (C) to receive any 
        distribution to which the participant or beneficiary is 
        entitled under transferee plan in the form of a single sum 
        distribution.''.
    (b) Effective Date.--The amendments made by this section shall 
apply to transfers after December 31, 1997.

SEC. 304. MISSING PARTICIPANTS.

    (a) In General.--Section 4050 of the Employee Retirement Income 
Security Act of 1974 (29 U.S.C. 1350) is amended by redesignating 
subsection (c) as subsection (e) and by inserting after subsection (b) 
the following new subsections:
    ``(c) Multiemployer Plans.--The corporation shall prescribe rules 
similar to the rules in subsection (a) for multiemployer plans covered 
by this title that terminate under section 4041A.
    ``(d) Plans Not Otherwise Subject to Title.--
            ``(1) Transfer to corporation.--The plan administrator of a 
        plan described in paragraph (4) may elect to transfer a missing 
        participant's benefits to the corporation upon termination of 
        the plan.
            ``(2) Information to the corporation.--To the extent 
        provided in regulations, the plan administrator of a plan 
        described in paragraph (4) shall, upon termination of the plan, 
        provide the corporation information with respect to benefits of 
        a missing participant if the plan transfers such benefits--
                    ``(A) to the corporation, or
                    ``(B) to an entity other than the corporation or a 
                plan described in paragraph (4)(B)(ii).
            ``(3) Payment by the corporation.--If benefits of a missing 
        participant were transferred to the corporation under paragraph 
        (1), the corporation shall, upon location of the participant or 
        beneficiary, pay to the participant or beneficiary the amount 
        transferred (or the appropriate survivor benefit) either--
                    ``(A) in a single sum (plus interest), or
                    ``(B) in such other form as is specified in 
                regulations of the corporation.
            ``(4) Plans described.--A plan is described in this 
        paragraph if--
                    ``(A) the plan is a pension plan (within the 
                meaning of section 3(2))--
                            ``(i) to which the provisions of this 
                        section do not apply (without regard to this 
                        subsection), and
                            ``(ii) which is not a plan described in 
                        paragraphs (2) through (11) of section 4021(b), 
                        and
                    ``(B) at the time the assets are to be distributed 
                upon termination, the plan--
                            ``(i) has missing participants, and
                            ``(ii) has not provided for the transfer of 
                        assets to pay the benefits of all missing 
                        participants to another pension plan (within 
                        the meaning of section 3(2)).
            ``(5) Certain provisions not to apply.--Subsections (a)(1) 
        and (a)(3) shall not apply to a plan described in paragraph 
        (4).''.
    (b) Conforming Amendments.--
            (1) Section 206(f) of the Employee Retirement Income 
        Security Act of 1974 (29 U.S.C. 1056(f)) is amended--
                    (A) by striking ``title IV'' and inserting 
                ``section 4050'', and
                    (B) by striking ``the plan shall provide that''.
            (2) Section 401(a)(34) (relating to benefits of missing 
        participants on plan termination) is amended by striking 
        ``title IV'' and inserting ``section 4050''.
    (c) Effective Date.--The amendments made by this section shall 
apply to distributions made after final regulations implementing 
subsections (c) and (d) of section 4050 of the Employee Retirement 
Income Security Act of 1974 (as added by subsection (a)), respectively, 
are prescribed.

                   TITLE IV--TOWARD EQUITY FOR WOMEN

SEC. 401. INDIVIDUAL'S PARTICIPATION IN PLAN NOT TREATED AS 
              PARTICIPATION BY SPOUSE.

    (a) In General.--Paragraph (1) of section 219(g) of the Internal 
Revenue Code of 1986 (relating to limitation on deduction for active 
participants in certain pension plans) is amended by striking ``or the 
individual's spouse''.
    (b) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 1996.

SEC. 402. MODIFICATIONS OF JOINT AND SURVIVOR ANNUITY REQUIREMENTS.

    (a) Amendments to ERISA.--
            (1) Amount of annuity.--
                    (A) In general.--Paragraph (1) of section 205(a) of 
                the Employee Retirement Income Security Act of 1974 (29 
                U.S.C. 1055(a)) is amended by inserting ``or, at the 
                election of the participant, shall be provided in the 
form of a qualified joint and \2/3\ survivor annuity'' after ``survivor 
annuity,''.
                    (B) Definition.--Subsection (d) of section 205 of 
                such Act (29 U.S.C. 1055) is amended--
                            (i) by redesignating paragraphs (1) and (2) 
                        as subparagraphs (A) and (B), respectively,
                            (ii) by inserting ``(1)'' after ``(d)'', 
                        and
                            (iii) by adding at the end the following 
                        new paragraph:
    ``(2) For purposes of this section, the term ``qualified joint and 
\2/3\ survivor annuity'' means an annuity--
            ``(A) for the participant while both the participant and 
        the spouse are alive with a survivor annuity for the life of 
        surviving individual (either the participant or the spouse) 
        equal to 67 percent of the amount of the annuity which is 
        payable to the participant while both the participant and the 
        spouse are alive,
            ``(B) which is the actuarial equivalent of a single annuity 
        for the life of the participant, and
            ``(C) which, for all other purposes of this Act, is treated 
        as a qualified joint and survivor annuity.''.
            (2) Illustration requirement.--Clause (i) of section 
        205(c)(3)(A) of such Act (29 U.S.C. 1055(c)(3)(A)) is amended 
        to read as follows:
            ``(i) the terms and conditions of each qualified joint and 
        survivor annuity and qualified joint and \2/3\ survivor annuity 
        offered, accompanied by an illustration of the benefits under 
        each such annuity for the particular participant and spouse and 
        an acknowledgement form to be signed by the participant and the 
        spouse that they have read and considered the illustration 
        before any form of retirement benefit is chosen,''.
    (b) Amendments to Internal Revenue Code.--
            (1) Amount of annuity.--
                    (A) In general.--Clause (i) of section 
                401(a)(11)(A) of the Internal Revenue Code of 1986 
                (relating to requirement of joint and survivor annuity 
                and preretirement survivor annuity) is amended by 
                inserting ``or, at the election of the participant, 
                shall be provided in the form of a qualified joint and 
                \2/3\ survivor annuity'' after ``survivor annuity,''.
                    (B) Definition.--Section 417 of such Code (relating 
                to definitions and special rules for purposes of 
                minimum survivor annuity requirements) is amended by 
                redesignating subsection (f) as subsection (g) and by 
                inserting after subsection (e) the following new 
                subsection:
    ``(f) Definition of Qualified Joint and \2/3\ Survivor Annuity.--
For purposes of this section and section 401(a)(11), the term 
``qualified joint and \2/3\ survivor annuity'' means an annuity--
            ``(1) for the participant while both the participant and 
        the spouse are alive with a survivor annuity for the life of 
        surviving individual (either the participant or the spouse) 
        equal to 67 percent of the amount of the annuity which is 
        payable to the participant while both the participant and the 
        spouse are alive,
            ``(2) which is the actuarial equivalent of a single annuity 
        for the life of the participant, and
            ``(3) which, for all other purposes of this title, is 
        treated as a qualified joint and survivor annuity.''.
            (2) Illustration requirement.--Clause (i) of section 
        417(a)(3)(A) of such Code (relating to explanation of joint and 
        survivor annuity) is amended to read as follows:
                            ``(i) the terms and conditions of each 
                        qualified joint and survivor annuity and 
                        qualified joint and \2/3\ survivor annuity 
                        offered, accompanied by an illustration of the 
                        benefits under each such annuity for the 
                        particular participant and spouse and an 
                        acknowledgement form to be signed by the 
                        participant and the spouse that they have read 
                        and considered the illustration before any form 
                        of retirement benefit is chosen,''.
    (c) Effective Date.--The amendments made by this section shall 
apply to plan years beginning after December 31, 1996.

SEC. 403. DIVISION OF PENSION BENEFITS UPON DIVORCE.

    (a) Amendments to the Internal Revenue Code of 1986.--Subsection 
(p)(1) of section 414 of the Internal Revenue Code of 1986 is amended 
by adding the following new subparagraph:
                    ``(C) Deemed domestic relations order upon 
                divorce.--
                            ``(i) In general.--A divorce decree issued 
                        with respect to the participant and the former 
                        spouse pursuant to a State domestic relations 
                        law (including an annulment or other order of 
                        marital dissolution) shall, upon delivery to a 
                        plan along with the information required by 
                        paragraph (2)(A), be deemed by the plan to be a 
                        domestic relations order that specifies that 50 
                        percent of the marital share of the 
                        participant's accrued benefit is to be provided 
                        to such former spouse, unless the divorce 
                        decree states that pension benefits were 
                        considered by the parties and no division is 
                        intended.
                            ``(ii) Marital share.--The marital share 
                        shall be the accrued benefit of the participant 
                        under the plan as of the date of the divorce 
                        (to the extent such accrued benefit is vested 
                        at the date of the divorce or any later date) 
                        multiplied by a fraction, the numerator of 
                        which is the period of participation by the 
                        participant under the plan starting with the 
                        date of marriage and ending with the date of 
                        divorce, and the denominator of which is the 
total period of participation by the participant under the plan.
                            ``(iii) Interpretation as qualified 
                        domestic relations order.--Each plan shall 
                        establish reasonable rules for determining how 
                        any such deemed domestic relations order is to 
                        be interpreted under the plan so as to 
                        constitute a qualified domestic relations order 
                        that satisfies paragraphs (2) through (4) (and 
                        a copy of such rules shall be provided to such 
                        former spouse promptly after delivery of the 
                        divorce decree). Such rules--
                                    ``(I) may delay the effect of such 
                                an order until the earlier of the date 
                                the participant is fully vested or has 
                                terminated employment,
                                    ``(II) may allow the former spouse 
                                to be paid out immediately,
                                    ``(III) shall permit the former 
                                spouse to be paid not later than the 
                                earliest retirement age under the plan,
                                    ``(IV) may require the submitter of 
                                the divorce decree to present a 
                                marriage certificate or other evidence 
                                of the marriage date to assist in 
                                benefit calculations,
                                    ``(V) may require that a divorce 
                                decree be presented on the date which 
                                is not later than 2 years after the 
                                date of the issuance of the decree, and
                                    ``(VI) may conform to the rules 
                                applicable to qualified domestic 
                                relations orders regarding form or type 
                                of benefit.
                            ``(iv) Application.--This subparagraph 
                        shall not apply to the extent that a qualified 
                        domestic relations order issued in connection 
                        with such divorce provides otherwise.''.
    (b) Amendments to the Employee Retirement Income Security Act of 
1974.--Subsection (d)(2)(B) of section 206 of the Employee Retirement 
Income Security Act of 1974 (29 U.S.C. 1056) is amended by adding the 
following new subclause (iii):
                            ``(iii) Deemed domestic relations order 
                        upon divorce.--
                                    ``(I) In general.--A divorce decree 
                                issued with respect to the participant 
                                and the former spouse pursuant to a 
                                State domestic relations law (including 
                                an annulment or other order of marital 
                                dissolution) shall, upon delivery to a 
                                plan along with the information 
                                required by subparagraph (C)(i), be 
                                deemed by the plan to be a domestic 
                                relations order that specifies that 50 
                                percent of the marital share of the 
                                participant's accrued benefit is to be 
                                provided to such former spouse.
                                    ``(II) Marital share.--The marital 
                                share shall be the accrued benefit of 
                                the participant under the plan as of 
                                the date of the divorce (to the extent 
                                such accrued benefit is vested at the 
                                date of the divorce or any later date) 
                                multiplied by a fraction, the numerator 
                                of which is the period of participation 
                                by the participant under the plan 
                                starting with the date of marriage and 
                                ending with the date of divorce, and 
                                the denominator of which is the total 
                                period of participation by the 
                                participant under the plan.
                                    ``(III) Interpretation as qualified 
                                domestic relations order.--Each plan 
                                shall establish reasonable rules for 
                                determining how any such deemed 
                                domestic relations order is to be 
                                interpreted under the plan so as to 
                                constitute a qualified domestic 
                                relations order that satisfies 
                                subparagraphs (C) through (E) (and a 
                                copy of such rules shall be provided to 
                                such former spouse promptly after 
                                delivery of the divorce decree). Such 
                                rules (aa) may delay the effect of such 
                                an order until the earlier of the date 
                                the participant is fully vested or has 
                                terminated employment, (bb) may allow 
                                the former spouse to be paid out 
                                immediately, and (cc) shall permit the 
                                spouse to be paid not later than the 
                                earliest retirement age under the plan.
                                    ``(IV) Application.--This subclause 
                                shall not apply to the extent that a 
                                qualified domestic relations order 
issued in connection with such divorce provides otherwise.''.
    (c) Effective Date.--The amendments made by this section shall be 
effective for divorce decrees issued after December 31, 1999.

SEC. 404. DEFERRED ANNUITIES FOR SURVIVING SPOUSES OF FEDERAL 
              EMPLOYEES.

    (a) In General.--Section 8341 of title 5, United States Code, is 
amended--
            (1) in subsection (h)(1), by striking ``section 8338(b) of 
        this title'' and inserting ``section 8338(b), and a former 
        spouse of a deceased former employee who separated from the 
        service with title to a deferred annuity under section 8338 (if 
        they were married to one another prior to the date of 
        separation),''; and
            (2) by adding at the end the following:
    ``(j)(1) If a former employee dies after having separated from the 
service with title to a deferred annuity under section 8338 but before 
having established a valid claim for annuity, and is survived by a 
spouse to whom married on the date of separation, the surviving spouse 
may elect to receive--
            ``(A) an annuity, commencing on what would have been the 
        former employee's 62d birthday, equal to 55 percent of the 
        former employee's deferred annuity;
            ``(B) an annuity, commencing on the day after the date of 
        death of the former employee, such that, to the extent 
        practicable, the present value of the future payments of the 
        annuity would be actuarially equivalent to the present value of 
        the future payments under subparagraph (A) as of the day after 
        the former employee's death; or
            ``(C) the lump-sum credit, if the surviving spouse is the 
        individual who would be entitled to the lump-sum credit and if 
        such surviving spouse files application therefor.
    ``(2) An annuity under this subsection and the right thereto 
terminate on the last day of the month before the surviving spouse 
remarries before becoming 55 years of age, or dies.''.
    (b) Corresponding Amendment for FERS.--Section 8445(a) of title 5, 
United States Code, is amended--
            (1) by striking ``(or of a former employee or'' and 
        inserting ``(or of a former''; and
            (2) by striking ``annuity)'' and inserting ``annuity, or of 
        a former employee who dies after having separated from the 
        service with title to a deferred annuity under section 8413 but 
        before having established a valid claim for annuity (if such 
        former spouse was married to such former employee prior to the 
        date of separation))''.
    (c) Effective Date.--The amendments made by this section shall 
apply with respect to surviving spouses and former spouses (whose 
marriage, in the case of the amendments made by subsection (a), 
terminated after May 6, 1985) of former employees who die after the 
date of the enactment of this Act.

SEC. 405. PAYMENT OF LUMP-SUM CREDIT FOR FORMER SPOUSES OF FEDERAL 
              EMPLOYEES.

    (a) In General.--Title 5, United States Code, is amended--
            (1) in section 8342(c), by striking ``Lump-sum'' and 
        inserting ``Except as provided in section 8345(j), lump-sum'';
            (2) in section 8345(j)--
                    (A) in paragraph (1), by inserting after ``that 
                individual'' the following: ``, or be made under 
                section 8342(d) through (f) to an individual entitled 
                under section 8342(c),''; and
                    (B) by adding at the end the following:
    ``(4) Any payment under this subsection to a person bars recovery 
by any other person.'';
            (3) in section 8424(d), by striking ``Lump-sum'' and 
        inserting ``Except as provided in section 8467(a), lump-sum''; 
        and
            (4) in section 8467--
                    (A) in subsection (a), by inserting after ``that 
                individual'' the following: ``, or be made under 
                section 8424(e) through (g) to an individual entitled 
                under section 8424(d),''; and
                    (B) by adding at the end the following:
    ``(d) Any payment under this section to a person bars recovery by 
any other person.''.
    (b) Effective Date.--The amendments made by this section shall 
apply with respect to any death occurring after the 90th day after the 
date of the enactment of this Act.

SEC. 406. WOMEN'S PENSION TOLL-FREE PHONE NUMBER.

    (a) In General.--The Secretary of Labor shall contract with an 
independent organization to create a women's pension toll-free 
telephone number and contact to serve as--
            (1) a resource for women on pension questions and issues;
            (2) a source for referrals to appropriate agencies; and
            (3) a source for printed information.
    (b) Authorization of Appropriations.--There are authorized to be 
appropriated $500,000 for each of the fiscal years 1997, 1998, 1999, 
and 2000.

             TITLE V--DATE FOR ADOPTION OF PLAN AMENDMENTS

SEC. 501. DATE FOR ADOPTION OF PLAN AMENDMENTS.

    (a) In General.--Except as otherwise provided in this Act, if any 
amendment made by this Act requires an amendment to any plan, such plan 
amendment shall not be required to be made before the last day of the 
first plan year beginning on or after January 1, 1998, if--
            (1) during the period after such amendment takes effect and 
        before the last day of such first plan year, the plan is 
        operated in accordance with the requirements of such amendment, 
        and
            (2) such plan amendment applies retroactively to such 
        period.
A plan shall not be treated as failing to provide definitely 
determinable benefits or contributions, or to be operated in accordance 
with the provisions of the plan, merely because it operates in 
accordance with this subsection.
    (b) Governmental Plans.--In the case of a governmental plan (as 
defined in section 414(d) of the Internal Revenue Code of 1986), 
subsection (a) shall be applied by substituting for ``January 1, 1998'' 
the later of--
            (1) January 1, 1999, or
            (2) the date which is 90 days after the opening of the 
        first legislative session beginning after January 1, 1999, of 
        the governing body with authority to amend the plan, but only 
        if such governing body does not meet continuously.
    (c) Special Rule for Collectively Bargained Plans.--
Nothwithstanding any other provision of this Act, in the case of a plan 
maintained pursuant to 1 or more collective bargaining agreements 
between employee representatives and 1 or more employers ratified on or 
before the date of the enactment of this Act, any amendment made by 
this Act which requires an amendment to such plan shall not be required 
to be made before the last day of the first plan year beginning on or 
after the earlier of--
            (1) the later of--
                    (A) January 1, 1998, or
                    (B) the date on which the last of such collective 
                bargaining agreements terminates (determined without 
                regard to any extension thereof after the date of the 
                enactment of this Act), or
            (2) January 1, 1999.
                                 <all>
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