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[Congressional Bills 106th Congress]
[From the U.S. Government Publishing Office]
[S. 1979 Introduced in Senate (IS)]

106th CONGRESS
  1st Session
                                S. 1979

To amend the Internal Revenue Code of 1986 and the Employee Retirement 
Income Security Act of 1974 to provide that restrictions on application 
    of State laws to pension benefits shall not apply to State laws 
prohibiting individuals from benefiting from crimes involving the death 
                     of pension plan participants.

_______________________________________________________________________

                   IN THE SENATE OF THE UNITED STATES

                           November 19, 1999

  Mr. Conrad (for himself and Mr. Moynihan) 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 and the Employee Retirement 
Income Security Act of 1974 to provide that restrictions on application 
    of State laws to pension benefits shall not apply to State laws 
prohibiting individuals from benefiting from crimes involving the death 
                     of pension plan participants.

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

SECTION 1. PENSION PLANS SUBJECT TO STATE LAWS PROHIBITING INDIVIDUALS 
              FROM BENEFITING FROM CRIMES INVOLVING DEATH OF A 
              PARTICIPANT.

    (a) Amendment of Internal Revenue Code.--
            (1) In general.--Section 401 of the Internal Revenue Code 
        of 1986 (relating to qualified pension, profit-sharing, and 
        stock bonus plans) is amended by redesignating subsection (o) 
        as subsection (p) and by inserting after subsection (n) the 
        following new subsection:
    ``(o) Application of State Laws Prohibiting Individuals from 
Benefiting From Crimes Involving Death of a Participant.--
            ``(1) In general.--If a State law provides that benefits 
        payable with respect to a participant under a plan shall not be 
        paid to a beneficiary if the beneficiary has been convicted of 
        a crime involving the death of the participant, then--
                    ``(A) the State law shall apply to payment of 
                benefits under the plan, and
                    ``(B) notwithstanding paragraph (11) or (13) of 
                subsection (a), such benefits shall be payable--
                            ``(i) in accordance with the terms of a 
                        qualified State order, or
                            ``(ii) if there is no such order, in the 
                        same manner as such benefits would be payable 
                        under the terms of the plan if the beneficiary 
                        were deceased.
            ``(2) Qualified state order.--For purposes of this 
        subsection, the term `qualified State order' means--
                    ``(A) any State law which creates the right of 1 or 
                more individuals to receive all or part of the benefits 
                payable with respect to a participant under a plan if 
                the beneficiary is convicted of a crime involving the 
                death of the participant, or
                    ``(B) any qualified criminal restitution order.
            ``(3) Qualified criminal restitution order.--The term 
        `qualified criminal restitution order' means a judgment, order, 
        or decree--
                    ``(A) which is issued by a State court in 
                connection with a criminal conviction of a beneficiary 
                under a plan involving the death of the participant 
                whose benefits are the subject of the judgment, order, 
                or decree,
                    ``(B)(i) which creates or recognizes a right to 
                attach all or a portion of the benefits payable with 
                respect to the participant under a plan, or
                    ``(ii) which creates or recognizes the existence of 
                a victim's right to, or assigns to a victim the right 
                to, receive all or a part of those benefits, and
                    ``(C) with respect to which the requirements of 
                paragraphs (2) and (3) of section 414(p) are met 
                (determined after application of section 414(p)(4)), 
                except that in applying such paragraphs, the term 
                `criminal restitution order' shall be substituted for 
                the term `domestic relations order'.
            ``(4) Plan and fiduciary.--The provisions of paragraphs (6) 
        and (7) of section 414(p) shall apply to any plan administrator 
        or fiduciary of a plan to which this paragraph applies.
            ``(5) Special rules.--Rules similar to the rules of 
        paragraphs (9), (10), (11), and (12) of section 414(p) shall 
        apply for purposes of this subsection.''
            (2) Tax treatment of distributions.--
                    (A) Section 402(e)(1) of such Code is amended by 
                adding at the end the following new subparagraph:
                    ``(C) Criminal restitution orders.--Rules similar 
                to the rules of subparagraphs (A) and (B) shall apply 
                to payments or distributions to individual pursuant to 
qualified State orders described in section 401(o).''
                    (B) Section 72(m)(10) of such Code is amended--
                            (i) by adding at the end the following new 
                        sentence: ``The preceding sentence shall also 
                        apply to payments or distributions made to 
                        individuals pursuant to a qualified State order 
                        described in section 401(o).'', and
                            (ii) by inserting ``or qualified State 
                        orders'' after ``orders'' in the heading.
                    (C) Subparagraph (J) of section 402(d)(4) of such 
                Code is amended by adding at the end the following new 
                sentence: ``This subparagraph shall also apply to any 
                distributions or payments to individuals pursuant to a 
                qualified State order described in section 401(o).''
    (b) Amendments to ERISA.--Section 514(b) of the Employee Retirement 
Income Security Act of 1974 is amended by redesignating paragraph (9) 
as paragraph (10) and by adding at the end the following new paragraph:
    ``(9)(A) If a State law provides that benefits payable with respect 
to a participant under a plan shall not be paid to a beneficiary if the 
beneficiary has been convicted of a crime involving the death of the 
participant, then--
            ``(i) subsection (a) shall not apply to the State law and 
        such law shall apply to payment of benefits under the plan, and
            ``(ii) notwithstanding section 205 or 206(d), such benefits 
        shall be payable--
                    ``(I) in accordance with the terms of a qualified 
                State order, or
                    ``(II) if there is no such order, in the same 
                manner as such benefits would be payable under the 
                terms of the plan if the beneficiary were deceased.
    ``(B) For purposes of this paragraph, the term `qualified State 
order' means--
            ``(i) any State law which creates the right of 1 or more 
        individuals to receive all or part of the benefits payable with 
        respect to a participant under a plan if the beneficiary is 
        convicted of a crime involving the death of the participant, or
            ``(ii) any qualified criminal restitution order.
    ``(C) The term `qualified criminal restitution order' means a 
judgment, order, or decree--
            ``(i) which is issued by a State court in connection with a 
        criminal conviction of a beneficiary under a plan involving the 
        death of the participant whose benefits are the subject of the 
        judgment, order, or decree,
            ``(ii)(I) which creates or recognizes a right to attach all 
        or a portion of the benefits payable with respect to the 
        participant under a plan, or
            ``(II) which creates or recognizes the existence of a 
        victim's right to, or assigns to a victim the right to, receive 
        all or a part of those benefits, and
            ``(iii) with respect to which the requirements of 
        subparagraphs (C) and (D) of section 206(d)(3) are met 
        (determined after application of section 206(d)(3)(E)), except 
        that in applying such paragraphs, the term `criminal 
        restitution order' shall be substituted for the term `domestic 
        relations order'.
    ``(D) The provisions of subparagraphs (G), (H), and (I) of section 
206(d)(3) shall apply to any plan administrator or fiduciary of a plan 
to which this paragraph applies.
    ``(E) Rules similar to the rules of subparagraphs (J), (M), and (N) 
of section 206(D)(3) shall apply for purposes of this subsection.''
    (c) Effective Date.--The amendments made by this section shall 
apply on and after the date of the enactment of this Act.
                                 <all>
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