I

104TH CONGRESS

2D SESSION H. R. 4204

To amend the Internal Revenue Code of 1986 to provide comprehensive

pension protection for women.

IN THE HOUSE OF REPRESENTATIVES

SEPTEMBER 26, 1996

Mrs. KENNELLY (for herself, Mrs. MEEK of Florida, Mrs. MALONEY, Ms.

MCKINNEY, Ms. DELAURO, Miss COLLINS of Michigan, Ms. FURSE, Ms.

KAPTUR, Ms. SLAUGHTER, Ms. BROWN of Florida, Ms. EDDIE BERNICE

JOHNSON of Texas, Ms. PELOSI, Mrs. LOWEY, Ms. NORTON, and Ms.

ROYBAL-ALLARD) introduced the following bill; which was referred to the

Committee on Ways and Means, and in addition to the Committees on

Economic and Educational Opportunities, Transportation and Infrastructure, and Government Reform and Oversight, for a period to be subsequently determined by the Speaker, in each case for consideration of such

provisions as fall within the jurisdiction of the committee concerned

A BILL

To amend the Internal Revenue Code of 1986 to provide

comprehensive pension protection for women.

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

3 SECTION 1. SHORT TITLE.

4 (a) SHORT TITLE.—This Act may be cited as the

5 ‘‘Comprehensive Women’s Pension Protection Act of

6 1996’’.
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1 (b) TABLE OF CONTENTS.—

Sec. 1. Short title.

TITLE I—PENSION REFORM

Sec. 101. Pension integration rules.

Sec. 102. Application of minimum coverage requirements with respect to separate lines of business.

Sec. 103. Division of pension benefits upon divorce.

Sec. 104. Effective dates.

Sec. 105. Clarification of continued availability of remedies relating to matters

treated in domestic relations orders entered before 1985.

Sec. 106. Entitlement of divorced spouses to railroad retirement annuities independent of actual entitlement of employee.

TITLE II—PROTECTION OF RIGHTS OF FORMER SPOUSES TO

PENSION BENEFITS UNDER CERTAIN GOVERNMENT AND GOVERNMENT-SPONSORED RETIREMENT PROGRAMS

Sec. 201. Extension of tier II railroad retirement benefits to surviving former

spouses pursuant to divorce agreements.

Sec. 202. Survivor annuities for widows, widowers, and former spouses of Federal employees who die before attaining age for deferred annuity under civil service retirement system.

Sec. 203. Court orders relating to Federal retirement benefits for former

spouses of Federal employees.

Sec. 204. Prevention of circumvention of court order by waiver of retired pay

to enhance civil service retirement annuity.

TITLE III—REFORMS RELATED TO 401(K) PLANS

Sec. 301. 401(k) plans prohibited from investing in collectibles.

Sec. 302. Requirement of annual, detailed investment reports applied to certain

401(k) plans.

Sec. 303. 10-percent limitation on acquisition and holding of employer securities and employer real property applied to 401(k) plans.

TITLE IV—MODIFICATIONS OF JOINT AND SURVIVOR ANNUITY

REQUIREMENTS

Sec. 401. Modifications of joint and survivor annuity requirements.

TITLE V—SPOUSAL CONSENT REQUIRED FOR DISTRIBUTIONS

FROM SECTION 401(K) PLANS

Sec. 501. Spousal consent required for distributions from section 401(k) plans.

TITLE VI—WOMEN’S PENSION TOLL-FREE PHONE NUMBER

Sec. 601. Women’s pension toll-free phone number.

TITLE VII—ANNUAL PENSION BENEFITS STATEMENTS

Sec. 701. Annual pension benefits statements.
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1 TITLE I—PENSION REFORM

2 SEC. 101. PENSION INTEGRATION RULES.

3 (a) APPLICABILITY OF NEW INTEGRATION RULES

4 EXTENDED TO ALL EXISTING ACCRUED BENEFITS.—

5 Notwithstanding subsection (c)(1) of section 1111 of the

6 Tax Reform Act of 1986 (relating to effective date of ap7 plication of nondiscrimination rules to integrated plans)

8 (100 Stat. 2440), effective for plan years beginning after

9 the date of the enactment of this Act, the amendments

10 made by subsection (a) of such section 1111 shall also

11 apply to benefits attributable to plan years beginning on

12 or before December 31, 1988.

13 (b) INTEGRATION DISALLOWED FOR SIMPLIFIED

14 EMPLOYEE PENSIONS.—

15 (1) IN GENERAL.—Subparagraph (D) of section

16 408(k)(3) of the Internal Revenue Code of 1986 (re17 lating to permitted disparity under rules limiting

18 discrimination under simplified employee pensions)

19 is repealed.

20 (2) CONFORMING AMENDMENT.—Subparagraph

21 (C) of such section 408(k)(3) is amended by striking

22 ‘‘and except as provided in subparagraph (D),’’.

23 (3) EFFECTIVE DATE.—The amendments made

24 by this subsection shall apply with respect to taxable

25 years beginning on or after January 1, 1996.
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1 (c) EVENTUAL REPEAL OF INTEGRATION RULES.—

2 Effective for plan years beginning on or after January 1,

3 2003—

4 (1) subparagraphs (C) and (D) of section

5 401(a)(5) of the Internal Revenue Code of 1986 (re6 lating to pension integration exceptions under non7 discrimination requirements for qualification) are re8 pealed, and subparagraph (E) of such section

9 401(a)(5) is redesignated as subparagraph (C); and

10 (2) subsection (l) of section 401 of such Code

11 (relating to nondiscriminatory coordination of de12 fined contribution plans with OASDI) is repealed.

13 SEC. 102. APPLICATION OF MINIMUM COVERAGE REQUIRE14 MENTS WITH RESPECT TO SEPARATE LINES

15 OF BUSINESS.

16 (a) IN GENERAL.—Subsection (b) of section 410 of

17 the Internal Revenue Code of 1986 (relating to minimum

18 coverage requirements) is amended—

19 (1) in paragraph (1), by striking ‘‘A trust’’ and

20 inserting ‘‘In any case in which the employer with

21 respect to a plan is treated, under section 414(r), as

22 operating separate lines of business for a plan year,

23 a trust’’, and by inserting ‘‘for such plan year’’ after

24 ‘‘requirements’’; and
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1 (2) by redesignating paragraphs (3) through

2 (6) as paragraphs (4) through (7), respectively and

3 by inserting after paragraph (2) the following new

4 paragraph:

5 ‘‘(3) SPECIAL RULE WHERE EMPLOYER OPER6 ATES SINGLE LINE OF BUSINESS.—In any case in

7 which the employer with respect to a plan is not

8 treated, under section 414(r), as operating separate

9 lines of business for a plan year, a trust shall not

10 constitute a qualified trust under section 401(a) un11 less such trust is designated by the employer as part

12 of a plan which benefits all employees of the

13 employer.’’.

14 (b) LIMITATION ON LINE OF BUSINESS EXCEP15 TION.—Paragraph (6) of section 410(b) of such Code (as

16 redesignated by subsection (a)(2) of this section) is

17 amended by inserting ‘‘other than paragraph (1)(A)’’ after

18 ‘‘this subsection’’.

19 SEC. 103. DIVISION OF PENSION BENEFITS UPON DIVORCE.

20 (a) AMENDMENTS TO THE INTERNAL REVENUE

21 CODE OF 1986.—

22 (1) IN GENERAL.—Subsection (a) of section

23 401 of the Internal Revenue Code of 1986 (relating

24 to requirements for qualification) is amended—
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1 (A) by inserting after paragraph (31) the

2 following new paragraph:

3 ‘‘(32) DIVISION OF PENSION BENEFITS UPON

4 DIVORCE.—

5 ‘‘(A) IN GENERAL.—In the case of a di6 vorce of a participant in a pension plan from a

7 spouse who is, immediately before the divorce,

8 a beneficiary under the plan, a trust forming a

9 part of such plan shall not constitute a quali10 fied trust under this section unless the plan

11 provides that at least 50 percent of the marital

12 share of the accrued benefit of the participant

13 under the plan ceases to be an accrued benefit

14 of such participant and becomes an accrued

15 benefit of such divorced spouse, determined and

16 payable upon the earlier of the retirement of

17 the participant, the participant’s death, or the

18 termination of the plan, except to the extent

19 that a qualified domestic relations order in con20 nection with such divorce provides otherwise.

21 ‘‘(B) LIMITATION.—Subparagraph (A)

22 shall not be construed—

23 ‘‘(i) to require a plan to provide any

24 type or form of benefit, or any option, not

25 otherwise provided under the plan,
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1 ‘‘(ii) to require the plan to provide in2 creased benefits (determined on the basis

3 of actuarial value),

4 ‘‘(iii) to require the payment of bene5 fits to the divorced spouse which are re6 quired to be paid to another individual in

7 accordance with this paragraph or pursu8 ant to a domestic relations order previously

9 determined to be a qualified domestic rela10 tions order, or

11 ‘‘(iv) to require payment of benefits to

12 the divorced spouse in the form of a quali13 fied joint and survivor annuity to the di14 vorced spouse and his or her subsequent

15 spouse.

16 ‘‘(C) DEFINITIONS.—For purposes of this

17 paragraph—

18 ‘‘(i) DOMESTIC RELATIONS ORDER;

19 QUALIFIED DOMESTIC RELATIONS

20 ORDER.—The terms ‘domestic relations

21 order’ and ‘qualified domestic relations

22 order’ shall have the meanings provided in

23 section 414(p).

24 ‘‘(ii) MARITAL SHARE.—The term

25 ‘marital share’ means, in connection with
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1 an accrued benefit under a pension plan,

2 the product derived by multiplying—

3 ‘‘(I) the actuarial present value

4 of the accrued benefit, by

5 ‘‘(II) a fraction, the numerator of

6 which is the period of time, during the

7 marriage between the spouse and the

8 participant in the plan, which con9 stitutes creditable service by the par10 ticipant under the plan, and the de11 nominator of which is the total period

12 of time which constitutes creditable

13 service by the participant under the

14 plan.

15 ‘‘(iii) QUALIFIED JOINT AND SURVI16 VOR ANNUITY.—The term ‘qualified joint

17 and survivor annuity’ has the meaning pro18 vided in section 417(b).

19 ‘‘(D) REGULATIONS.—In prescribing regu20 lations under this paragraph, the Secretary

21 shall consult with the Secretary of Labor.’’; and

22 (B) in the last sentence, by striking ‘‘and

23 (20)’’ and inserting ‘‘(20), and (32)’’.

24 (2) CONFORMING AMENDMENTS.—
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1 (A) Subparagraph (B) of section

2 401(a)(13) of such Code (relating to special

3 rules for domestic relations orders) is amended

4 by inserting ‘‘or if such creation, assignment, or

5 recognition pursuant to such order is necessary

6 for compliance with the requirements of para7 graph (32)’’ before the period.

8 (B) Subsection (p) of section 414 of such

9 Code (defining qualified domestic relations or10 ders) is amended—

11 (i) in paragraph (3)(C), by inserting

12 ‘‘or to a divorced spouse of the participant

13 in connection with a previously occurring

14 divorce as required under section

15 401(a)(32)’’ before the period; and

16 (ii) in paragraph (7)(C), by striking

17 ‘‘if there had been no order’’ and inserting

18 ‘‘in accordance with section 401(a)(32) as

19 if there had been no qualified domestic re20 lations order’’.

21 (b) AMENDMENTS TO THE EMPLOYEE RETIREMENT

22 INCOME SECURITY ACT OF 1974.—

23 (1) IN GENERAL.—Section 206 of Employee

24 Retirement Income Security Act of 1974 (29 U.S.C.
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1 1056) is amended by adding at the end the following

2 new subsection:

3 ‘‘(e)(1) In the case of a divorce of a participant in

4 a pension plan from a spouse who is, immediately before

5 the divorce, a beneficiary under the plan, the plan shall

6 provide that at least 50 percent of the marital share of

7 the accrued benefit of the participant under the plan

8 ceases to be an accrued benefit of such participant and

9 becomes an accrued benefit of such divorced spouse, deter10 mined and payable upon the earlier of the retirement of

11 the participant, the participant’s death, or the termination

12 of the plan, except to the extent that a qualified domestic

13 relations order in connection with such divorce provides

14 otherwise.

15 ‘‘(2) Paragraph (1) shall not be construed—

16 ‘‘(A) to require a plan to provide any type or

17 form of benefit, or any option, not otherwise pro18 vided under the plan,

19 ‘‘(B) to require the plan to provide increased

20 benefits (determined on the basis of actuarial value),

21 ‘‘(C) to require the payment of benefits to the

22 divorced spouse which are required to be paid to an23 other individual in accordance with this subsection

24 or pursuant to a domestic relation order previously
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1 determined to be a qualified domestic relations

2 order, or

3 ‘‘(D) to require payment of benefits to the di4 vorced spouse in the form of a joint and survivor an5 nuity to the divorced spouse and his or her subse6 quent spouse.

7 ‘‘(3) For purposes of this subsection—

8 ‘‘(A) The terms ‘domestic relations order’ and

9 ‘qualified domestic relations order’ shall have the

10 meanings provided in subsection (d)(3)(B).

11 ‘‘(B) The term ‘marital share’ means, in con12 nection with an accrued benefit under a pension

13 plan, the product derived by multiplying—

14 ‘‘(i) the actuarial present value of the ac15 crued benefit, by

16 ‘‘(ii) a fraction—

17 ‘‘(I) the numerator of which is the pe18 riod of time, during the marriage between

19 the spouse and the participant in the plan,

20 which constitutes creditable service by the

21 participant under the plan, and

22 ‘‘(II) the denominator of which is the

23 total period of time which constitutes cred24 itable service by the participant under the

25 plan.
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1 ‘‘(C) The term ‘qualified joint and survivor an2 nuity’ shall have the meaning provided in section

3 205(d).

4 ‘‘(4) In prescribing regulations under this subsection,

5 the Secretary shall consult with the Secretary of the

6 Treasury.’’.

7 (2) CONFORMING AMENDMENTS.—Section

8 206(d) of such Act (29 U.S.C. 1056(d)) is amend9 ed—

10 (A) in the first sentence of paragraph

11 (3)(A), by inserting ‘‘or if such creation, assign12 ment, or recognition pursuant to such order is

13 necessary for compliance with the requirements

14 of subsection (e)’’ before the period;

15 (B) in paragraph (3)(D)(iii), by inserting

16 ‘‘or to a divorced spouse of the participant in

17 connection with a previously occurring divorce

18 as required under subsection (e)’’ before the pe19 riod; and

20 (C) in paragraph (3)(H)(iii), by striking

21 ‘‘if there had been no order’’ and inserting ‘‘in

22 accordance with subsection (e) as if there had

23 been no qualified domestic relations order’’.
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1 SEC. 104. EFFECTIVE DATES.

2 (a) IN GENERAL.—Except as provided in subsection

3 (b), the amendments made by this title, other than section

4 101, shall apply with respect to plan years beginning on

5 or after January 1, 1996, and the amendments made by

6 section 103 shall apply only with respect to divorces be7 coming final in such plan years.

8 (b) SPECIAL RULE FOR COLLECTIVELY BARGAINED

9 PLANS.—In the case of a plan maintained pursuant to 1

10 or more collective bargaining agreements between em11 ployee representatives and 1 or more employers ratified

12 on or before the date of the enactment of this Act, sub13 section (a) shall be applied to benefits pursuant to, and

14 individuals covered by, any such agreement by substituting

15 for ‘‘January 1, 1996’’ the date of the commencement of

16 the first plan year beginning on or after the earlier of—

17 (1) the later of—

18 (A) January 1, 1996, or

19 (B) the date on which the last of such col20 lective bargaining agreements terminates (de21 termined without regard to any extension there22 of after the date of the enactment of this Act),

23 or

24 (2) January 1, 1999.

25 (c) PLAN AMENDMENTS.—If any amendment made

26 by this title requires an amendment to any plan, such plan
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1 amendment shall not be required to be made before the

2 first plan year beginning on or after January 1, 1996, if—

3 (1) during the period after such amendment

4 made by this title takes effect and before such first

5 plan year, the plan is operated in accordance with

6 the requirements of such amendment made by this

7 title, and

8 (2) such plan amendment applies retroactively

9 to the period after such amendment made by this

10 title takes effect and such first plan year.

11 A plan shall not be treated as failing to provide definitely

12 determinable benefits or contributions, or to be operated

13 in accordance with the provisions of the plan, merely be14 cause it operates in accordance with this subsection.

15 SEC. 105. CLARIFICATION OF CONTINUED AVAILABILITY OF

16 REMEDIES RELATING TO MATTERS TREATED

17 IN DOMESTIC RELATIONS ORDERS ENTERED

18 BEFORE 1985.

19 (a) IN GENERAL.—In any case in which—

20 (1) under a prior domestic relations order en21 tered before January 1, 1985, in an action for di22 vorce—

23 (A) the right of a spouse under a pension

24 plan to an accrued benefit under such plan was

25 not divided between spouses,
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1 (B) any right of a spouse with respect to

2 such an accrued benefit was waived without the

3 informed consent of such spouse, or

4 (C) the right of a spouse as a participant

5 under a pension plan to an accrued benefit

6 under such plan was divided so that the other

7 spouse received less than such other spouse’s

8 pro rata share of the accrued benefit under the

9 plan, or

10 (2) a court of competent jurisdiction determines

11 that any further action is appropriate with respect

12 to any matter to which a prior domestic relations

13 order entered before such date applies,

14 nothing in the provisions of section 104, 204, or 303 of

15 the Retirement Equity Act of 1984 (Public Law 98–397)

16 or the amendments made thereby shall be construed to

17 require or permit the treatment, for purposes of such pro18 visions, of a domestic relations order, which is entered on

19 or after the date of the enactment of this Act and which

20 supercedes, amends the terms of, or otherwise affects such

21 prior domestic relations order, as other than a qualified

22 domestic relations order solely because such prior domestic

23 relations order was entered before January 1, 1985.

24 (b) DEFINITIONS.—For purposes of this section—
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1 (1) IN GENERAL.—Terms used in this section

2 which are defined in section 3 of the Employee Re3 tirement Income Security Act of 1974 (29 U.S.C.

4 1002) shall have the meanings provided such terms

5 by such section.

6 (2) PRO RATA SHARE.—The term ‘‘pro rata

7 share’’ of a spouse means, in connection with an ac8 crued benefit under a pension plan, 50 percent of

9 the product derived by multiplying—

10 (A) the actuarial present value of the ac11 crued benefit, by

12 (B) a fraction—

13 (i) the numerator of which is the pe14 riod of time, during the marriage between

15 the spouse and the participant in the plan,

16 which constitutes creditable service by the

17 participant under the plan, and

18 (ii) the denominator of which is the

19 total period of time which constitutes cred20 itable service by the participant under the

21 plan.

22 (3) PLAN.—All pension plans in which a person

23 has been a participant shall be treated as one plan

24 with respect to such person.
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1 SEC. 106. ENTITLEMENT OF DIVORCED SPOUSES TO RAIL2 ROAD RETIREMENT ANNUITIES INDEPEND3 ENT OF ACTUAL ENTITLEMENT OF EM4 PLOYEE.

5 Section 2 of the Railroad Retirement Act of 1974 (45

6 U.S.C. 231a) is amended—

7 (1) in subsection (c)(4)(i), by striking ‘‘(A) is

8 entitled to an annuity under subsection (a)(1) and

9 (B)’’; and

10 (2) in subsection (e)(5), by striking ‘‘or di11 vorced wife’’ the second place it appears.

12 TITLE II—PROTECTION OF

13 RIGHTS OF FORMER SPOUSES

14 TO PENSION BENEFITS

15 UNDER CERTAIN GOVERN16 MENT AND GOVERNMENT17 SPONSORED RETIREMENT

18 PROGRAMS

19 SEC. 201. EXTENSION OF TIER II RAILROAD RETIREMENT

20 BENEFITS TO SURVIVING FORMER SPOUSES

21 PURSUANT TO DIVORCE AGREEMENTS.

22 (a) IN GENERAL.—Section 5 of the Railroad Retire23 ment Act of 1974 (45 U.S.C. 231d) is amended by adding

24 at the end the following new subsection:

25 ‘‘(d) Notwithstanding any other provision of law, the

26 payment of any portion of an annuity computed under sec-
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1 tion 3(b) to a surviving former spouse in accordance with

2 a court decree of divorce, annulment, or legal separation

3 or the terms of any court-approved property settlement

4 incident to any such court decree shall not be terminated

5 upon the death of the individual who performed the service

6 with respect to which such annuity is so computed unless

7 such termination is otherwise required by the terms of

8 such court decree.’’.

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

10 this section shall take effect on the date of the enactment

11 of this Act.

12 SEC. 202. SURVIVOR ANNUITIES FOR WIDOWS, WIDOWERS,

13 AND FORMER SPOUSES OF FEDERAL EM14 PLOYEES WHO DIE BEFORE ATTAINING AGE

15 FOR DEFERRED ANNUITY UNDER CIVIL

16 SERVICE RETIREMENT SYSTEM.

17 (a) BENEFITS FOR WIDOW OR WIDOWER.—Section

18 8341(f) of title 5, United States Code, is amended—

19 (1) in the matter preceding paragraph (1) by—

20 (A) by inserting ‘‘a former employee sepa21 rated from the service with title to deferred an22 nuity from the Fund dies before having estab23 lished a valid claim for annuity and is survived

24 by a spouse, or if’’ before ‘‘a Member’’; and
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1 (B) by inserting ‘‘of such former employee

2 or Member’’ after ‘‘the surviving spouse’’;

3 (2) in paragraph (1)—

4 (A) by inserting ‘‘former employee or’’

5 before ‘‘Member commencing’’; and

6 (B) by inserting ‘‘former employee or’’

7 before ‘‘Member dies’’; and

8 (3) in the undesignated sentence following para9 graph (2)—

10 (A) in the matter preceding subparagraph

11 (A) by inserting ‘‘former employee or’’ before

12 ‘‘Member’’; and

13 (B) in subparagraph (B) by inserting

14 ‘‘former employee or’’ before ‘‘Member’’.

15 (b) BENEFITS FOR FORMER SPOUSE.—Section

16 8341(h) of title 5, United States Code, is amended—

17 (1) in paragraph (1) by adding after the first

18 sentence ‘‘Subject to paragraphs (2) through (5) of

19 this subsection, a former spouse of a former em20 ployee who dies after having separated from the

21 service with title to a deferred annuity under section

22 8338(a) but before having established a valid claim

23 for annuity is entitled to a survivor annuity under

24 this subsection, if and to the extent expressly pro25 vided for in an election under section 8339(j)(3) of
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1 this title, or in the terms of any decree of divorce

2 or annulment or any court order or court-approved

3 property settlement agreement incident to such de4 cree.’’; and

5 (2) in paragraph (2)—

6 (A) in subparagraph (A)(ii) by striking ‘‘or

7 annuitant,’’ and inserting ‘‘annuitant, or former

8 employee’’; and

9 (B) in subparagraph (B)(iii) by inserting

10 ‘‘former employee or’’ before ‘‘Member’’.

11 (c) PROTECTION OF SURVIVOR BENEFIT RIGHTS.—

12 Section 8339(j)(3) of title 5, United States Code, is

13 amended by inserting at the end the following:

14 ‘‘The Office shall provide by regulation for the appli15 cation of this subsection to the widow, widower, or surviv16 ing former spouse of a former employee who dies after

17 having separated from the service with title to a deferred

18 annuity under section 8338(a) but before having estab19 lished a valid claim for annuity.’’.

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

21 this section shall take effect on the date of the enactment

22 of this Act and shall apply only in the case of a former

23 employee who dies on or after such date.
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1 SEC. 203. COURT ORDERS RELATING TO FEDERAL RETIRE2 MENT BENEFITS FOR FORMER SPOUSES OF

3 FEDERAL EMPLOYEES.

4 (a) CIVIL SERVICE RETIREMENT SYSTEM.—

5 (1) IN GENERAL.—Section 8345(j) of title 5,

6 United States Code, is amended—

7 (A) by redesignating paragraph (3) as

8 paragraph (4); and

9 (B) by inserting after paragraph (2) the

10 following new paragraph:

11 ‘‘(3) Payment to a person under a court decree, court

12 order, property settlement, or similar process referred to

13 under paragraph (1) shall include payment to a former

14 spouse of the employee, Member, or annuitant.’’.

15 (2) LUMP-SUM BENEFITS.—Section 8342 of

16 title 5, United States Code, is amended—

17 (A) in subsection (c) by striking ‘‘Lump18 sum benefits’’ and inserting ‘‘Subject to sub19 section (j), lump-sum benefits’’; and

20 (B) in subsection (j)(1) by striking ‘‘the

21 lump-sum credit under subsection (a) of this

22 section’’ and inserting ‘‘any lump-sum credit or

23 lump-sum benefit under this section’’.

24 (b) FEDERAL EMPLOYEES RETIREMENT SYSTEM.—

25 Section 8467 of title 5, United States Code, is amended—
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1 (1) by redesignating subsection (c) as sub2 section (d); and

3 (2) by inserting after subsection (b) the follow4 ing new subsection:

5 ‘‘(c) Payment to a person under a court decree, court

6 order, property settlement, or similar process referred to

7 under subsection (a) shall include payment to a former

8 spouse of the employee, Member, or annuitant.’’.

9 (c) EFFECTIVE DATE.—The amendments made by

10 this section shall take effect on the date of the enactment

11 of this Act.

12 SEC. 204. PREVENTION OF CIRCUMVENTION OF COURT

13 ORDER BY WAIVER OF RETIRED PAY TO EN14 HANCE CIVIL SERVICE RETIREMENT ANNU15 ITY.

16 (a) CIVIL SERVICE RETIREMENT AND DISABILITY

17 SYSTEM.—(1) Subsection (c) of section 8332 of title 5,

18 United States Code, is amended by adding at the end the

19 following:

20 ‘‘(4) If an employee or Member waives retired pay

21 that is subject to a court order for which there has been

22 effective service on the Secretary concerned for purposes

23 of section 1408 of title 10, the military service on which

24 the retired pay is based may be credited as service for

25 purposes of this subchapter only if, in accordance with
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1 regulations prescribed by the Director of the Office of Per2 sonnel Management, the employee or Member authorizes

3 the Director to deduct and withhold from the annuity pay4 able to the employee or Member under this subchapter,

5 and to pay to the former spouse covered by the court

6 order, the same amount that would have been deducted

7 and withheld from the employee’s or Member’s retired pay

8 and paid to that former spouse under such section 1408.’’.

9 (2) Paragraph (1) of such subsection is amended by

10 striking out ‘‘Except as provided in paragraph (2)’’ and

11 inserting ‘‘Except as provided in paragraphs (2) and (4)’’.

12 (b) FEDERAL EMPLOYEES’ RETIREMENT SYSTEM.—

13 (1) Subsection (c) of section 8411 of title 5, United States

14 Code, is amended by adding at the end the following:

15 ‘‘(5) If an employee or Member waives retired pay

16 that is subject to a court order for which there has been

17 effective service on the Secretary concerned for purposes

18 of section 1408 of title 10, the military service on which

19 the retired pay is based may be credited as service for

20 purposes of this chapter only if, in accordance with regula21 tions prescribed by the Director of the Office of Personnel

22 Management, the employee or Member authorizes the Di23 rector to deduct and withhold from the annuity payable

24 to the employee or Member under this subchapter, and

25 to pay to the former spouse covered by the court order,
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1 the same amount that would have been deducted and with2 held from the employee’s or Member’s retired pay and

3 paid to that former spouse under such section 1408.’’.

4 (2) Paragraph (1) of such subsection is amended by

5 striking out ‘‘Except as provided in paragraph (2) or (3)’’

6 and inserting ‘‘Except as provided in paragraphs (2), (3),

7 and (5)’’.

8 (c) EFFECTIVE DATE.—The amendment made by

9 subsection (a) shall take effect on January 1, 1997.

10 TITLE III—REFORMS RELATED

11 TO 401(K) PLANS

12 SEC. 301. 401(K) PLANS PROHIBITED FROM INVESTING IN

13 COLLECTIBLES.

14 (a) IN GENERAL.—Paragraph (4) of section 401(k)

15 of the Internal Revenue Code of 1986 (relating to cash

16 or deferred arrangements) is amended by adding at the

17 end the following new subparagraph:

18 ‘‘(D) INVESTMENT IN COLLECTIBLES

19 TREATED AS DISTRIBUTIONS.—The rules of

20 section 408(m) shall apply to a cash or deferred

21 arrangement of any employer.’’

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

23 subsection (a) shall apply to plan years beginning after

24 the date of the enactment of this Act.
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1 SEC. 302. REQUIREMENT OF ANNUAL, DETAILED INVEST2 MENT REPORTS APPLIED TO CERTAIN 401(K)

3 PLANS.

4 (a) IN GENERAL.—Paragraph (4) of section 401(k)

5 of the Internal Revenue Code of 1986 (relating to cash

6 or deferred arrangements), as amended by section 1, is

7 amended by adding at the end the following new subpara8 graph:

9 ‘‘(E) ANNUAL, DETAILED INVESTMENT RE10 PORTS REQUIRED.—

11 ‘‘(i) IN GENERAL.—A cash or deferred

12 arrangement of any employer with less

13 than 100 participants shall not be treated

14 as a qualified cash or deferred arrange15 ment unless the plan of which it is a part

16 provides to each participant an annual in17 vestment report detailing the name of each

18 investment acquired during such plan year

19 and the date and cost of such acquisition,

20 the name of each investment sold during

21 such year and the date and net proceeds of

22 such sale, and the overall rate of return for

23 all investments for such year.

24 ‘‘(ii) EXCEPTION.—Clause (i) shall

25 not apply with respect to any participant

26 described in section 404(c) of the Em-
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1 ployee Retirement Income Security Act of

2 1974 (29 U.S.C. 1104(c)).’’

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

4 subsection (a) shall apply to plan years beginning after

5 the date of the enactment of this Act.

6 SEC. 303. 10-PERCENT LIMITATION ON ACQUISITION AND

7 HOLDING OF EMPLOYER SECURITIES AND

8 EMPLOYER REAL PROPERTY APPLIED TO

9 401(K) PLANS.

10 (a) IN GENERAL.—Subparagraph (A) of section

11 407(d)(3) of the Employee Retirement Income Security

12 Act of 1974 (29 U.S.C. 1107(d)(3)) is amended by adding

13 at the end the following new sentence: ‘‘Such term also

14 excludes an individual account plan that includes a quali15 fied cash or deferred arrangement described in section

16 401(k) of the Internal Revenue Code of 1986, if such plan,

17 together with all other individual account plans main18 tained by the employer, owns more than 10 percent of the

19 assets owned by all pension plans maintained by the em20 ployer. For purposes of the preceding sentence, the assets

21 of such plan subject to participant control (within the

22 meaning of section 404(c)) shall not be taken into ac23 count.’’.

24 (b) EFFECTIVE DATE; TRANSITION RULE.—
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1 (1) EFFECTIVE DATE.—Except as provided in

2 paragraph (2), the amendment made by this section

3 shall apply to plans on and after the date of the en4 actment of this Act.

5 (2) TRANSITION RULE FOR PLANS HOLDING

6 EXCESS SECURITIES OR PROPERTY.—In the case of

7 a plan which on the date of the enactment of this

8 Act has holdings of employer securities and employer

9 real property (as defined in section 407(d) of the

10 Employee Retirement Income Security Act of 1974

11 (29 U.S.C. 1107(d)) in excess of the amount speci12 fied in such section 407, the amendment made by

13 this section shall apply to any acquisition of such se14 curities and property on or after such date of enact15 ment, but shall not apply to the specific holdings

16 which constitute such excess during the period of

17 such excess.

18 TITLE IV—MODIFICATIONS OF

19 JOINT AND SURVIVOR ANNU20 ITY REQUIREMENTS

21 SEC. 401. MODIFICATIONS OF JOINT AND SURVIVOR ANNU22 ITY REQUIREMENTS.

23 (a) AMENDMENTS TO ERISA.—

24 (1) AMOUNT OF ANNUITY.—
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1 (A) IN GENERAL.—Paragraph (1) of sec2 tion 205(a) of the Employee Retirement Income

3 Security Act of 1974 (29 U.S.C. 1055(a)) is

4 amended by inserting ‘‘or, at the election of the

5 participant, shall be provided in the form of a

6 qualified joint and two-thirds survivor annuity’’

7 after ‘‘survivor annuity,’’.

8 (B) DEFINITION.—Subsection (d) of sec9 tion 205 of such Act (29 U.S.C. 1055) is

10 amended—

11 (i) by redesignating paragraphs (1)

12 and (2) as subparagraphs (A) and (B), re13 spectively,

14 (ii) by inserting ‘‘(1)’’ after ‘‘(d)’’,

15 and

16 (iii) by adding at the end the follow17 ing new paragraph:

18 ‘‘(2) For purposes of this section, the term ‘qualified

19 joint and two-thirds survivor annuity’ means an annuity—

20 ‘‘(A) for the participant while both the partici21 pant and the spouse are alive with a survivor annu22 ity for the life of the surviving individual (either the

participant or the spouse) equal to 662 23 ⁄3 percent of

24 the amount of the annuity which is payable to the
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1 participant while both the participant and the

2 spouse are alive,

3 ‘‘(B) which is the actuarial equivalent of a sin4 gle annuity for the life of the participant, and

5 ‘‘(C) which, for all other purposes of this Act,

6 is treated as a qualified joint and survivor annuity.’’.

7 (2) ILLUSTRATION REQUIREMENT.—Clause (i)

8 of section 205(c)(3)(A) of such Act (29 U.S.C.

9 1055(c)(3)(A)) is amended to read as follows:

10 ‘‘(i) the terms and conditions of each qualified

11 joint and survivor annuity and qualified joint and

12 two-thirds survivor annuity offered, accompanied by

13 an illustration of the benefits under each such annu14 ity for the particular participant and spouse and an

15 acknowledgement form to be signed by the partici16 pant and the spouse that they have read and consid17 ered the illustration before any form of retirement

18 benefit is chosen,’’.

19 (b) AMENDMENTS TO INTERNAL REVENUE CODE.—

20 (1) AMOUNT OF ANNUITY.—

21 (A) IN GENERAL.—Clause (i) of section

22 401(a)(11)(A) of the Internal Revenue Code of

23 1986 (relating to requirement of joint and sur24 vivor annuity and preretirement survivor annu25 ity) is amended by inserting ‘‘or, at the election
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1 of the participant, shall be provided in the form

2 of a qualified joint and two-thirds survivor an3 nuity’’ after ‘‘survivor annuity,’’.

4 (B) DEFINITION.—Section 417 of such

5 Code (relating to definitions and special rules

6 for purposes of minimum survivor annuity re7 quirements) is amended by redesignating sub8 section (f) as subsection (g) and by inserting

9 after subsection (e) the following new sub10 section:

11 ‘‘(f) DEFINITION OF QUALIFIED JOINT AND TWO12 THIRDS SURVIVOR ANNUITY.—For purposes of this sec13 tion and section 401(a)(11), the term ‘qualified joint and

14 two-thirds survivor annuity’ means an annuity—

15 ‘‘(1) for the participant while both the partici16 pant and the spouse are alive with a survivor annu17 ity for the life of the surviving individual (either the

participant or the spouse) equal to 662 18 ⁄3 percent of

19 the amount of the annuity which is payable to the

20 participant while both the participant and the

21 spouse are alive,

22 ‘‘(2) which is the actuarial equivalent of a sin23 gle annuity for the life of the participant, and

24 ‘‘(3) which, for all other purposes of this title,

25 is treated as a qualified joint and survivor annuity.’’.
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1 (2) ILLUSTRATION REQUIREMENT.—Clause (i)

2 of section 417(a)(3)(A) of such Code (relating to ex3 planation of joint and survivor annuity) is amended

4 to read as follows:

5 ‘‘(i) the terms and conditions of each

6 qualified joint and survivor annuity and

7 qualified joint and two-thirds survivor an8 nuity offered, accompanied by an illustra9 tion of the benefits under each such annu10 ity for the particular participant and

11 spouse and an acknowledgement form to

12 be signed by the participant and the

13 spouse that they have read and considered

14 the illustration before any form of retire15 ment benefit is chosen,’’.

16 (c) EFFECTIVE DATES.—

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

18 this section shall apply to plan years beginning after

19 December 31, 1996.

20 (2) SPECIAL RULE FOR COLLECTIVELY BAR21 GAINED PLANS.—In the case of a plan maintained

22 pursuant to one or more collective bargaining agree23 ments between employee representatives and one or

24 more employers ratified on or before the date of the

25 enactment of this Act, the amendments made by this
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1 section shall apply to the first plan year beginning

2 on or after the earlier of—

3 (A) the later of—

4 (i) January 1, 1997, or

5 (ii) the date on which the last of such

6 collective bargaining agreements termi7 nates (determined without regard to any

8 extension thereof after the date of the en9 actment of this Act), or

10 (B) January 1, 1998.

11 (3) PLAN AMENDMENTS.—If any amendment

12 made by this section requires an amendment to any

13 plan, such plan amendment shall not be required to

14 be made before the first plan year beginning on or

15 after January 1, 1998, if—

16 (A) during the period after such amend17 ment made by this section takes effect and be18 fore such first plan year, the plan is operated

19 in accordance with the requirements of such

20 amendment made by this section, and

21 (B) such plan amendment applies retro22 actively to the period after such amendment

23 made by this section takes effect and such first

24 plan year.
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1 A plan shall not be treated as failing to provide defi2 nitely determinable benefits or contributions, or to

3 be operated in accordance with the provisions of the

4 plan, merely because it operates in accordance with

5 this paragraph.

6 TITLE V—SPOUSAL CONSENT

7 REQUIRED FOR DISTRIBU8 TIONS FROM SECTION 401(K)

9 PLANS

10 SEC. 501. SPOUSAL CONSENT REQUIRED FOR DISTRIBU11 TIONS FROM SECTION 401(K) PLANS.

12 (a) IN GENERAL.—Paragraph (2) of section 401(k)

13 of the Internal Revenue Code of 1986 (defining qualified

14 cash or deferred arrangement) is amended by striking

15 ‘‘and’’ at the end of subparagraph (C), by striking the pe16 riod at the end of subparagraph (D) and inserting ‘‘, and’’,

17 and by adding at the end the following new subparagraph:

18 ‘‘(E) which provides that no distribution

19 may be made unless—

20 ‘‘(i) the spouse of the employee (if

21 any) consents in writing (during the 90-

22 day period ending on the date of the dis23 tribution) to such distribution, and
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1 ‘‘(ii) requirements comparable to the

2 requirements of section 417(a)(2) are met

3 with respect to such consent.’’

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

5 this section shall apply to distributions in plan years be6 ginning after December 31, 1996.

7 TITLE VI—WOMEN’S PENSION

8 TOLL-FREE PHONE NUMBER

9 SEC. 601. WOMEN’S PENSION TOLL-FREE PHONE NUMBER.

10 (a) IN GENERAL.—The Secretary of Labor shall con11 tract with an independent organization to create a wom12 en’s pension toll-free telephone number and contact to

13 serve as—

14 (1) a resource for women on pension questions

15 and issues;

16 (2) a source for referrals to appropriate agen17 cies; and

18 (3) a source for printed information.

19 (b) AUTHORIZATION OF APPROPRIATIONS.—There

20 are authorized to be appropriated $500,000 for each of

21 the fiscal years 1997, 1998, 1999, and 2000 to carry out

22 subsection (a).
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1 TITLE VII—ANNUAL PENSION

2 BENEFITS STATEMENTS

3 SEC. 701. ANNUAL PENSION BENEFITS STATEMENTS.

4 (a) IN GENERAL.—Subsection (a) of section 105 of

5 Employee Retirement Income Security Act of 1974 (29

6 U.S.C. 1025) is amended by striking ‘‘shall furnish to any

7 plan participant or beneficiary who so requests in writ8 ing,’’ and inserting ‘‘shall annually furnish to any plan

9 participant and shall furnish to any plan beneficiary who

10 so requests,’’.

11 (b) CONFORMING AMENDMENT.—Subsection (a) of

12 section 105 of such Act (29 U.S.C. 1025) is amended by

13 striking ‘‘participant or’’.

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

15 this section shall apply to plan years beginning after De16 cember 31, 1996.

Æ