II 

110TH CONGRESS 

2D SESSION S. 3720 

To amend the Internal Revenue Code of 1986 to suspend the minimum 

required pension distribution rules for 2008 and 2009. 

IN THE SENATE OF THE UNITED STATES 

DECEMBER 8 (legislative day, NOVEMBER 20), 2008 

Mr. SPECTER introduced the following bill; which was read twice and referred 

to the Committee on Finance 

A BILL 

To amend the Internal Revenue Code of 1986 to suspend 

the minimum required pension distribution rules for 

2008 and 2009. 

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

3 SECTION 1. TEMPORARY WAIVER OF REQUIRED MINIMUM 

4 DISTRIBUTION RULES FOR CERTAIN RETIRE5 MENT PLANS AND ACCOUNTS. 

6 (a) IN GENERAL.—Section 401(a)(9) of the Internal 

7 Revenue Code of 1986 (relating to required distributions) 

8 is amended by adding at the end the following new sub9 paragraph: 


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•S 3720 IS

1 ‘‘(H) TEMPORARY WAIVER OF MINIMUM

2 REQUIRED DISTRIBUTION.— 

3 ‘‘(i) IN GENERAL.—The requirements 

4 of this paragraph shall not apply in cal5 endar year 2008 or 2009. 

6 ‘‘(ii) PLANS MUST ALLOW ELEC7 TIONS.—A trust forming part of a plan 

8 shall not constitute a qualified trust under 

9 this subsection unless the plan provides 

10 that it will allow an employee or bene11 ficiary to elect to eliminate or reduce pay12 ments or distributions during calendar 

13 year 2009 which would otherwise be made 

14 to meet the requirements of this para15 graph. This clause shall not apply to an 

16 employee or beneficiary who is receiving, 

17 after the annuity starting date, distribu18 tions under the plan through an annuity 

19 contract issued by a company licensed to 

20 do business as an insurance company 

21 under the laws of any State. 

22 ‘‘(iii) ELECTION.—An election under 

23 clause (ii) shall be made at such time and 

24 in such manner as the Secretary may pre25 scribe. 


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•S 3720 IS

1 ‘‘(iv) COORDINATION WITH SIMILAR

2 REQUIREMENTS.—In the case of— 

3 ‘‘(I) an individual retirement ac4 count or annuity described in section 

5 408, this subparagraph shall be ap6 plied without regard to clauses (ii) 

7 and (iii), and 

8 ‘‘(II) an eligible deferred com9 pensation plan described in section 

10 457(b), this subparagraph shall only 

11 apply to such a plan maintained by an 

12 employer described in section 

13 457(e)(1)(A). 

14 ‘‘(v) SPECIAL RULES REGARDING SUS15 PENSION PERIOD.—For purposes of this 

16 paragraph— 

17 ‘‘(I) the required beginning date 

18 with respect to such individual shall 

19 be determined without regard to this 

20 subparagraph for purposes of applying 

21 this paragraph to calendar years after 

22 2009, and 

23 ‘‘(II) if clause (ii) of subpara24 graph (B) applies to such individual, 

25 the amount of any distribution reVerDate Aug 31 2005 23:47 Dec 08, 2008 Jkt 079200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S3720.IS S3720

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•S 3720 IS

1 quired by this paragraph for 2008 or 

2 2009 which was not made (or rolled 

3 over) by reason of this subparagraph 

4 shall be required to be distributed in 

5 2010.’’. 

6 (b) ELIGIBLE ROLLOVER DISTRIBUTIONS.—Section 

7 402(c)(4) of the Internal Revenue Code of 1986 (defining 

8 eligible rollover distribution) is amended by adding at the 

9 end the following new flush sentence: 

10 ‘‘Subparagraph (A) shall not apply to any distribu11 tions made in 2008 or 2009 to an individual who is 

12 not subject to the required minimum distribution 

13 rules under section 401(a)(9) for the calendar year 

14 solely by reason of the application of section 

15 401(a)(9)(H). In the case of a distribution which is 

16 treated as an eligible rollover distribution solely by 

17 reason of the preceding sentence, such distribution 

18 shall not be treated as an eligible rollover distribu19 tion for purposes of section 401(a)(31) or 3405(c) or 

20 subsection (f) of this section.’’. 

21 (c) EFFECTIVE DATES.— 

22 (1) IN GENERAL.—The amendments made by 

23 this section shall apply to taxable years beginning 

24 after December 31, 2007. 


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•S 3720 IS

1 (2) EXTENSION OF ROLLOVER PERIODS FOR

2 DISTRIBUTIONS IN 2008.— 

3 (A) IN GENERAL.—In the case of a dis4 tribution from an eligible retirement plan made 

5 during 2008 to an individual who is not subject 

6 to the required minimum distribution rules 

7 under section 401(a)(9) of the Internal Revenue 

8 Code of 1986 for the calendar year solely by 

9 reason of the application of section 

10 401(a)(9)(H) of such Code— 

11 (i) the 60-day period under section 

12 402(c)(3) or 408(d)(3) of such Code dur13 ing which such distribution may be rolled 

14 over, whichever is applicable, shall not end 

15 before the later of— 

16 (I) the due date (determined 

17 without regard to any extension) for 

18 filing the return of tax imposed by 

19 chapter 1 of such Code for the taxable 

20 year in which the distribution was 

21 made, or 

22 (II) the date which is 60 days 

23 after the date of the enactment of this 

24 Act, 


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•S 3720 IS

1 (ii) in the case of an individual retire2 ment plan, the limitation under section 

3 408(d)(3)(B) of such Code shall not apply 

4 to any rollover contribution of the distribu5 tion, and 

6 (iii) subject to such rules or guidance 

7 as the Secretary of the Treasury or the 

8 Secretary’s delegate may prescribe— 

9 (I) notwithstanding section 

10 408(d)(3)(C) of such Code, if such in11 dividual is the beneficiary of an inher12 ited individual retirement account or 

13 annuity, the individual may rollover 

14 such distribution, and 

15 (II) notwithstanding section 

16 402(c)(11) of such Code, such indi17 vidual shall not be treated as failing 

18 to meet the requirements of such sec19 tion solely because the transfer is not 

20 made in a direct trustee-to-trustee 

21 transfer. 

22 (B) ELIGIBLE RETIREMENT PLAN.—For 

23 purposes of this paragraph, the term ‘‘eligible 

24 retirement plan’’ has the meaning given such 

25 term by section 402(c)(8)(B) of such Code. 


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•S 3720 IS

1 (3) PROVISIONS RELATING TO PLAN OR CON2 TRACT AMENDMENTS.— 

3 (A) IN GENERAL.—If this paragraph ap4 plies to any pension plan or contract amend5 ment, such pension plan or contract shall be 

6 treated as being operated in accordance with 

7 the terms of the plan during the period de8 scribed in subparagraph (B)(ii)(I). 

9 (B) AMENDMENTS TO WHICH PARAGRAPH

10 APPLIES.— 

11 (i) IN GENERAL.—This paragraph 

12 shall apply to any amendment to any pen13 sion plan or annuity contract which— 

14 (I) is made by reason of the 

15 amendments made by this section, 

16 and 

17 (II) is made on or before the last 

18 day of the first plan year beginning 

19 on or after January 1, 2011. 

20 In the case of a governmental plan, sub21 clause (II) shall be applied by substituting 

22 ‘‘2012’’ for ‘‘2011’’. 

23 (ii) CONDITIONS.—This paragraph 

24 shall not apply to any amendment unless— 


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•S 3720 IS

1 (I) during the period beginning 

2 on January 1, 2009, and ending on 

3 December 31, 2009 (or, if earlier, the 

4 date the plan or contract amendment 

5 is adopted), the plan or contract is op6 erated as if such plan or contract 

7 amendment were in effect; and 

8 (II) such plan or contract amend9 ment applies retroactively for such pe10 riod. 

Æ 


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