II 

108TH CONGRESS 

1ST SESSION S. 1912

A bill to amend the Internal Revenue Code of 1986 to expand pension 

coverage and savings opportunities and to provide other pension reforms. 

IN THE SENATE OF THE UNITED STATES 

NOVEMBER 21, 2003

Mr. JEFFORDS (for himself, Ms. SNOWE, and Mr. HATCH) introduced the 

following bill; which was read twice and referred to the Committee on Finance 

A BILL

A bill to amend the Internal Revenue Code of 1986 to 

expand pension coverage and savings opportunities and 

to provide other pension reforms.

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; AMENDMENT OF 1986 CODE; 

4 TABLE OF CONTENTS. 

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

6 ‘‘Retirement Account Portability Act of 2003’’. 

7 (b) AMENDMENT OF 1986 CODE.—Except as other8 wise expressly provided, whenever in this Act an amend9 ment or repeal is expressed in terms of an amendment 

10 to, or repeal of, a section or other provision, the reference 
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1 shall be considered to be made to a section or other provi2 sion of the Internal Revenue Code of 1986. 

3 (c) TABLE OF CONTENTS.—The table of contents of 

4 this Act is as follows:

Sec. 1. Short title; amendment of 1986 Code; table of contents. 

TITLE I—BUILDING AND PRESERVING RETIREMENT ASSETS AND 

ENHANCING PORTABILITY 

Sec. 101. Allow rollovers by nonspouse beneficiaries of certain retirement plan 

distributions. 

Sec. 102. Facilitation under fiduciary rules of certain rollovers and annuity distributions. 

Sec. 103. Faster vesting of employer nonelective contributions. 

Sec. 104. Allow rollover of after-tax amounts in annuity contracts. 

TITLE II—EXPANDING RETIREMENT PLAN COVERAGE TO 

EMPLOYEES OF SMALL BUSINESSES 

Sec. 201. Elimination of higher penalty on certain Simple distributions. 

Sec. 202. Simple plan portability. 

TITLE III—EXPANDING RETIREMENT SAVINGS FOR TAX-EXEMPT 

ORGANIZATION AND GOVERNMENT EMPLOYEES 

Sec. 301. Clarifications regarding purchase of permissive service credit. 

Sec. 302. Eligibility for participation in retirement plans. 

TITLE IV—SIMPLIFICATION AND EQUITY 

Sec. 401. Allow direct rollovers from retirement plans to Roth IRAs. 

Sec. 402. Transfers to the PBGC.

5 TITLE I—BUILDING AND PRE6 SERVING RETIREMENT AS7 SETS AND ENHANCING PORT8 ABILITY 

9 SEC. 101. ALLOW ROLLOVERS BY NONSPOUSE BENE10 FICIARIES OF CERTAIN RETIREMENT PLAN 

11 DISTRIBUTIONS. 

12 (a) IN GENERAL.—
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1 (1) QUALIFIED PLANS.—Section 402(c) (relat2 ing to rollovers from exempt trusts) is amended by 

3 adding at the end the following new paragraph: 

4 ‘‘(11) DISTRIBUTIONS TO INHERITED INDI5 VIDUAL RETIREMENT PLAN OF NONSPOUSE BENE6 FICIARY.—

7 ‘‘(A) IN GENERAL.—If, with respect to any 

8 portion of a distribution from an eligible retire9 ment plan of a deceased employee, a direct 

10 trustee-to-trustee transfer is made to an indi11 vidual retirement plan described in clause (i) or 

12 (ii) of paragraph (8)(B) established for the pur13 poses of receiving the distribution on behalf of 

14 an individual who is a designated beneficiary 

15 (as defined by section 401(a)(9)(E)) of the em16 ployee and who is not the surviving spouse of 

17 the employee—

18 ‘‘(i) the transfer shall be treated as an 

19 eligible rollover distribution for purposes of 

20 this subsection, 

21 ‘‘(ii) the individual retirement plan 

22 shall be treated as an inherited individual 

23 retirement account or individual retirement 

24 annuity (within the meaning of section 
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1 408(d)(3)(C)) for purposes of this title, 

2 and 

3 ‘‘(iii) section 401(a)(9)(B) (other than 

4 clause (iv) thereof) shall apply to such 

5 plan. 

6 ‘‘(B) CERTAIN TRUSTS TREATED AS BENE7 FICIARIES.—For purposes of this paragraph, to 

8 the extent provided in rules prescribed by the 

9 Secretary, a trust maintained for the benefit of 

10 one or more designated beneficiaries shall be 

11 treated in the same manner as a trust des12 ignated beneficiary.’’. 

13 (2) SECTION 403(a) PLANS.—Subparagraph (B) 

14 of section 403(a)(4) (relating to rollover amounts) is 

15 amended by inserting ‘‘and (11)’’ after ‘‘(7)’’. 

16 (3) SECTION 403(b) PLANS.—Subparagraph (B) 

17 of section 403(b)(8) (relating to rollover amounts) is 

18 amended by striking ‘‘and (9)’’ and inserting ‘‘, (9), 

19 and (11)’’. 

20 (4) SECTION 457 PLANS.—Subparagraph (B) of 

21 section 457(e)(16) (relating to rollover amounts) is 

22 amended by striking ‘‘and (9)’’ and inserting ‘‘, (9), 

23 and (11)’’.
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1 (b) EFFECTIVE DATE.—The amendments made by 

2 this section shall apply to distributions after December 31, 

3 2003.

4 SEC. 102. FACILITATION UNDER FIDUCIARY RULES OF CER5 TAIN ROLLOVERS AND ANNUITY DISTRIBU6 TIONS. 

7 (a) IN GENERAL.—Section 404(c) of the Employee 

8 Retirement Income Security Act of 1974 (29 U.S.C. 

9 1104(c)) is amended by adding at the end the following 

10 new paragraph: 

11 ‘‘(4)(A) In the case of a pension plan which makes 

12 a transfer under section 401(a)(31)(A) of the Internal 

13 Revenue Code of 1986 to an individual retirement plan 

14 (as defined in section 7701(a)(37) of such Code) in con15 nection with a participant or beneficiary or makes a dis16 tribution to a participant or beneficiary of an annuity con17 tract described in subparagraph (B), the participant or 

18 beneficiary shall, for purposes of paragraph (1), be treated 

19 as exercising control over the transfer or distribution if—

20 ‘‘(i) the participant or beneficiary elected such 

21 transfer or distribution, and 

22 ‘‘(ii) in connection with such election, the par23 ticipant or beneficiary was given an opportunity to 

24 elect any other individual retirement plan (in the 

25 case of a transfer) or any other annuity contract de-
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1 scribed in subparagraph (B) (in the case of a dis2 tribution). 

3 ‘‘(B) An annuity contract is described in this sub4 paragraph if it provides, either on an immediate or de5 ferred basis, a series of substantially equal periodic pay6 ments (not less frequently than annually) for the life of 

7 the participant or beneficiary or the joint lives of the par8 ticipant or beneficiary and such individual’s designated 

9 beneficiary. Annuity payments shall not fail to be treated 

10 as part of a series of substantially equal periodic payments 

11 because the amount of the periodic payments may vary 

12 in accordance with investment experience, reallocations 

13 among investment options, actuarial gains or losses, cost 

14 of living indices, or similar fluctuating criteria. The avail15 ability of a commutation benefit, a minimum period of 

16 payments certain, or a minimum amount to be paid in 

17 any event shall not affect the treatment of an annuity con18 tract as an annuity contract described in this subpara19 graph. 

20 ‘‘(C) Under regulations prescribed by the Secretary, 

21 this paragraph shall apply without regard to whether the 

22 particular individual retirement plan receiving the transfer 

23 or the particular annuity contract being distributed is spe24 cifically identified by the pension plan as available to the 

25 participant or beneficiary. 
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1 ‘‘(D) Notwithstanding the preceding provisions of 

2 this paragraph, paragraph (1)(B) shall not apply with re3 spect to liability under section 406 in connection with the 

4 specific identification of any individual retirement plan or 

5 annuity contract as being available to the participant or 

6 beneficiary.’’. 

7 (b) EFFECTIVE DATE AND RELATED RULES.—

8 (1) EFFECTIVE DATE.—The amendment made 

9 by this section shall take effect on the date of the 

10 enactment of this Act. 

11 (2) ISSUANCE OF FINAL REGULATIONS.—Final 

12 regulations under section 404(c)(4) of the Employee 

13 Retirement Income Security Act of 1974 (added by 

14 this section) shall be issued no later than 1 year 

15 after the date of the enactment of this Act. 

16 SEC. 103. FASTER VESTING OF EMPLOYER NONELECTIVE 

17 CONTRIBUTIONS. 

18 (a) AMENDMENTS TO THE INTERNAL REVENUE

19 CODE OF 1986.—

20 (1) IN GENERAL.—Paragraph (2) of section 

21 411(a) (relating to employer contributions) is 

22 amended to read as follows: 

23 ‘‘(2) EMPLOYER CONTRIBUTIONS.—

24 ‘‘(A) DEFINED BENEFIT PLANS.—
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1 ‘‘(i) IN GENERAL.—In the case of a 

2 defined benefit plan, a plan satisfies the 

3 requirements of this paragraph if it satis4 fies the requirements of clause (ii) or (iii). 

5 ‘‘(ii) 5-YEAR VESTING.—A plan satis6 fies the requirements of this clause if an 

7 employee who has completed at least 5 

8 years of service has a nonforfeitable right 

9 to 100 percent of the employee’s accrued 

10 benefit derived from employer contribu11 tions. 

12 ‘‘(iii) 3 TO 7 YEAR VESTING.—A plan 

13 satisfies the requirements of this clause if 

14 an employee has a nonforfeitable right to 

15 a percentage of the employee’s accrued 

16 benefit derived from employer contribu17 tions determined under the following table:

The nonforfeitable 

‘‘Years of service: percentage is:

3 ................................................................................... 20

4 ................................................................................... 40

5 ................................................................................... 60

6 ................................................................................... 80

7 or more ...................................................................... 100.

18 ‘‘(B) DEFINED CONTRIBUTION PLANS.—

19 ‘‘(i) IN GENERAL.—In the case of a 

20 defined contribution plan, a plan satisfies 

21 the requirements of this paragraph if it 
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1 satisfies the requirements of clause (ii) or 

2 (iii). 

3 ‘‘(ii) 3-YEAR VESTING.—A plan satis4 fies the requirements of this clause if an 

5 employee who has completed at least 3 

6 years of service has a nonforfeitable right 

7 to 100 percent of the employee’s accrued 

8 benefit derived from employer contribu9 tions. 

10 ‘‘(iii) 2 TO 6 YEAR VESTING.—A plan 

11 satisfies the requirements of this clause if 

12 an employee has a nonforfeitable right to 

13 a percentage of the employee’s accrued 

14 benefit derived from employer contribu15 tions determined under the following table:

The nonforfeitable 

‘‘Years of service: percentage is:

2 ................................................................................... 20

3 ................................................................................... 40

4 ................................................................................... 60

5 ................................................................................... 80

6 ................................................................................... 100.’’.

16 (2) CONFORMING AMENDMENT.—Section 

17 411(a) (relating to general rule for minimum vesting 

18 standards) is amended by striking paragraph (12). 

19 (b) AMENDMENTS TO THE EMPLOYEE RETIREMENT

20 INCOME SECURITY ACT OF 1974.—

21 (1) IN GENERAL.—Paragraph (2) of section 

22 203(a) of the Employee Retirement Income Security 
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1 Act of 1974 (29 U.S.C. 1053(a)(2)) is amended to 

2 read as follows: 

3 ‘‘(2)(A)(i) In the case of a defined benefit plan, 

4 a plan satisfies the requirements of this paragraph 

5 if it satisfies the requirements of clause (ii) or (iii). 

6 ‘‘(ii) A plan satisfies the requirements of this 

7 clause if an employee who has completed at least 5 

8 years of service has a nonforfeitable right to 100 

9 percent of the employee’s accrued benefit derived 

10 from employer contributions. 

11 ‘‘(iii) A plan satisfies the requirements of this 

12 clause if an employee has a nonforfeitable right to 

13 a percentage of the employee’s accrued benefit de14 rived from employer contributions determined under 

15 the following table:

The nonforfeitable 

‘‘Years of service: percentage is:

3 ................................................................................... 20

4 ................................................................................... 40

5 ................................................................................... 60

6 ................................................................................... 80

7 or more ...................................................................... 100.

16 ‘‘(B)(i) In the case of an individual account 

17 plan, a plan satisfies the requirements of this para18 graph if it satisfies the requirements of clause (ii) or 

19 (iii). 

20 ‘‘(ii) A plan satisfies the requirements of this 

21 clause if an employee who has completed at least 3 

22 years of service has a nonforfeitable right to 100 
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1 percent of the employee’s accrued benefit derived 

2 from employer contributions. 

3 ‘‘(iii) A plan satisfies the requirements of this 

4 clause if an employee has a nonforfeitable right to 

5 a percentage of the employee’s accrued benefit de6 rived from employer contributions determined under 

7 the following table:

The nonforfeitable 

‘‘Years of service: percentage is:

2 ................................................................................... 20

3 ................................................................................... 40

4 ................................................................................... 60

5 ................................................................................... 80

6 ................................................................................... 100.’’.

8 (2) CONFORMING AMENDMENT.—Section 

9 203(a) of such Act is amended by striking para10 graph (4). 

11 (c) EFFECTIVE DATES.—

12 (1) IN GENERAL.—Except as provided in para13 graph (2), the amendments made by this section 

14 shall apply to contributions for plan years beginning 

15 after December 31, 2003. 

16 (2) COLLECTIVE BARGAINING AGREEMENTS.—

17 In the case of a plan maintained pursuant to one or 

18 more collective bargaining agreements between em19 ployee representatives and one or more employers 

20 ratified before the date of the enactment of this Act, 

21 the amendments made by this section shall not apply 

22 to contributions on behalf of employees covered by 
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1 any such agreement for plan years beginning before 

2 the earlier of—

3 (A) the later of—

4 (i) the date on which the last of such 

5 collective bargaining agreements termi6 nates (determined without regard to any 

7 extension thereof on or after such date of 

8 the enactment); or 

9 (ii) January 1, 2004; or 

10 (B) January 1, 2006. 

11 (3) SERVICE REQUIRED.—With respect to any 

12 plan, the amendments made by this section shall not 

13 apply to any employee before the date that such em14 ployee has 1 hour of service under such plan in any 

15 plan year to which the amendments made by this 

16 section apply. 

17 SEC. 104. ALLOW ROLLOVER OF AFTER-TAX AMOUNTS IN 

18 ANNUITY CONTRACTS. 

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

20 402(c)(2) (maximum amount which may be rolled over) 

21 is amended by striking ‘‘and which’’ and inserting ‘‘or to 

22 an annuity contract described in section 403(b) and such 

23 plan or contract’’. 
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1 (b) EFFECTIVE DATE.—The amendment made by 

2 subsection (a) shall apply to taxable years beginning after 

3 December 31, 2003.

4 TITLE II—EXPANDING RETIRE5 MENT PLAN COVERAGE TO 

6 EMPLOYEES OF SMALL BUSI7 NESSES 

8 SEC. 201. ELIMINATION OF HIGHER PENALTY ON CERTAIN 

9 SIMPLE DISTRIBUTIONS. 

10 (a) IN GENERAL.—Subsection (t) of section 72 (re11 lating to 10-percent additional tax on early distributions 

12 from qualified retirement plans) is amended by striking 

13 paragraph (6) and redesignating paragraphs (7), (8), and 

14 (9) as paragraphs (6), (7), and (8), respectively. 

15 (b) CONFORMING AMENDMENTS.—

16 (1) Section 72(t)(2)(E) is amended by striking 

17 ‘‘paragraph (7)’’ and inserting ‘‘paragraph (6)’’. 

18 (2) Section 72(t)(2)(F) is amended by striking 

19 ‘‘paragraph (8)’’ and inserting ‘‘paragraph (7)’’. 

20 (3) Section 408(d)(3)(G) is amended by strik21 ing ‘‘applies’’ and inserting ‘‘applied on the day be22 fore the date of the enactment of the Retirement Ac23 count Portability Act of 2003)’’. 

24 (4) Section 457(a)(2) is amended by striking 

25 ‘‘section 72(t)(9)’’ and inserting ‘‘section 72(t)(8)’’. 
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1 (c) EFFECTIVE DATE.—The amendments made by 

2 this section shall apply to years beginning after December 

3 31, 2003. 

4 SEC. 202. SIMPLE PLAN PORTABILITY. 

5 (a) REPEAL OF LIMITATION.—Paragraph (3) of sec6 tion 408(d) (relating to rollover contributions), as amend7 ed by this Act, is amended by striking subparagraph (G) 

8 and redesignating subparagraph (H) as subparagraph 

9 (G). 

10 (b) Section 402(c)(8)(B) is amended by adding at the 

11 end the following new sentence: ‘‘Individual retirement ac12 counts and individual retirement annuities described in 

13 clauses (i) and (ii) shall be treated as eligible retirement 

14 plans without regard to whether they are part of a sim15 plified employee pension (within the meaning of section 

16 408(k)) or a simplified retirement account (within the 

17 meaning of section 408(p)).’’. 

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

19 this section shall apply to years beginning after December 

20 31, 2003.
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1 TITLE III—EXPANDING RETIRE2 MENT SAVINGS FOR TAX-EX3 EMPT ORGANIZATION AND 

4 GOVERNMENT EMPLOYEES 

5 SEC. 301. CLARIFICATIONS REGARDING PURCHASE OF PER6 MISSIVE SERVICE CREDIT. 

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

8 457(e)(17) (relating to trustee-to-trustee transfers to pur9 chase permissive service credit), and subparagraph (A) of 

10 section 403(b)(13) (relating to trustee-to-trustee transfers 

11 to purchase permissive service credit), are both amended 

12 by striking ‘‘section 415(n)(3)(A)’’ and inserting ‘‘section 

13 415(n)(3) (without regard to subparagraphs (B) and (C) 

14 thereof)’’. 

15 (b) DISTRIBUTION REQUIREMENTS.—Section 

16 457(e)(17) and section 403(b)(13) are both amended by 

17 adding at the end the following sentence: ‘‘Amounts trans18 ferred under this paragraph shall be distributed solely in 

19 accordance with section 401(a) as applicable to such de20 fined benefit plan.’’. 

21 (c) SERVICE CREDIT.—Clause (ii) of section 

22 415(n)(3)(A) is amended to read as follows: 

23 ‘‘(ii) which relates to benefits with re24 spect to which such participant is not oth25 erwise entitled, and’’. 
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1 (d) EFFECTIVE DATE.—The amendments made by 

2 this section shall take effect as if included in the amend3 ments made by section 647 of the Economic Growth and 

4 Tax Relief Reconciliation Act of 2001. 

5 SEC. 302. ELIGIBILITY FOR PARTICIPATION IN RETIRE6 MENT PLANS. 

7 An individual shall not be precluded from partici8 pating in an eligible deferred compensation plan by reason 

9 of having received a distribution under section 457(e)(9) 

10 of the Internal Revenue Code of 1986, as in effect prior 

11 to the enactment of the Small Business Job Protection 

12 Act of 1996.

13 TITLE IV—SIMPLIFICATION AND 

14 EQUITY 

15 SEC. 401. ALLOW DIRECT ROLLOVERS FROM RETIREMENT 

16 PLANS TO ROTH IRAS. 

17 (a) IN GENERAL.—Subsection (e) of section 408A 

18 (defining qualified rollover contribution) is amended to 

19 read as follows: 

20 ‘‘(e) QUALIFIED ROLLOVER CONTRIBUTION.—For 

21 purposes of this section, the term ‘qualified rollover con22 tribution’ means a rollover contribution—

23 ‘‘(1) to a Roth IRA from another such account, 

24 ‘‘(2) from an eligible retirement plan, but only 

25 if—
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1 ‘‘(A) in the case of an individual retire2 ment plan, such rollover contribution meets the 

3 requirements of section 408(d)(3), and 

4 ‘‘(B) in the case of any eligible retirement 

5 plan (as defined in section 402(c)(8)(B) other 

6 than clauses (i) and (ii) thereof), such rollover 

7 contribution meets the requirements of section 

8 402(c), 403(b)(8), or 457(e)(16), as applicable. 

9 For purposes of section 408(d)(3)(B), there shall be dis10 regarded any qualified rollover contribution from an indi11 vidual retirement plan (other than a Roth IRA) to a Roth 

12 IRA.’’. 

13 (b) CONFORMING AMENDMENTS.—

14 (1) Section 408A(c)(3)(B) is amended—

15 (A) in the text by striking ‘‘individual re16 tirement plan’’ and inserting ‘‘an eligible retire17 ment plan (as defined by section 

18 402(c)(8)(B))’’, and 

19 (B) in the heading by striking ‘‘IRA’’ and 

20 inserting ‘‘ELIGIBLE RETIREMENT PLAN’’. 

21 (2) Section 408A(d)(3) is amended—

22 (A) in subparagraph (A) by striking ‘‘sec23 tion 408(d)(3)’’ inserting ‘‘sections 402(c), 

24 403(b)(8), 408(d)(3), and 457(e)(16)’’, 
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1 (B) in subparagraph (B) by striking ‘‘indi2 vidual retirement plan’’ and inserting ‘‘eligible 

3 retirement plan (as defined by section 

4 402(c)(8)(B))’’, 

5 (C) in subparagraph (D) by striking ‘‘or 

6 6047’’ after ‘‘408(i)’’, 

7 (D) in subparagraph (D) by striking ‘‘or 

8 both’’ and inserting ‘‘persons subject to section 

9 6047(d)(1), or all of the foregoing persons’’, 

10 and 

11 (E) in the heading by striking ‘‘IRA’’ and 

12 inserting ‘‘ELIGIBLE RETIREMENT PLAN’’. 

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

14 this section shall apply to distributions after December 31, 

15 2003. 

16 SEC. 402. TRANSFERS TO THE PBGC. 

17 (a) MANDATORY DISTRIBUTIONS TO PBGC.—Clause 

18 (i) of section 401(a)(31)(B) (relating to general rule for 

19 certain mandatory distributions) is amended by inserting 

20 ‘‘to the Pension Benefit Guaranty Corporation in accord21 ance with section 4050(e) of the Employee Retirement In22 come Security Act of 1974 or’’ after ‘‘such transfer’’. 

23 (b) TAX TREATMENT OF DISTRIBUTIONS.—Subpara24 graph (B) of section 401(a)(31) is amended by adding at 

25 the end the following new clause: 
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1 ‘‘(iii) INCOME TAX TREATMENT OF

2 TRANSFERS TO PBGC.—For purposes of 

3 determining the income tax treatment re4 lating to transfers to the Pension Benefit 

5 Guaranty Corporation under clause (i)—

6 ‘‘(I) the transfer of amounts to 

7 the Pension Benefit Guaranty Cor8 poration pursuant to clause (i) shall 

9 be treated as a transfer to an indi10 vidual retirement plan under such 

11 clause, and 

12 ‘‘(II) the distribution of such 

13 amounts from the Pension Benefit 

14 Guaranty Corporation shall be treated 

15 as a distribution from an individual 

16 retirement plan.’’. 

17 (c) MISSING PARTICIPANTS AND BENEFICIARIES.—

18 (1) IN GENERAL.—Section 4050 of the Em19 ployee Retirement Income Security Act of 1974 (29 

20 U.S.C. 1350) is amended by redesignating sub21 section (c) as subsection (f) and by inserting after 

22 subsection (b) the following new subsections: 

23 ‘‘(c) MULTIEMPLOYER PLANS.—The corporation 

24 shall prescribe rules similar to the rules in subsection (a)
20

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1 for multiemployer plans covered by this title that termi2 nate under section 4041A. 

3 ‘‘(d) PLANS NOT OTHERWISE SUBJECT TO TITLE.—

4 ‘‘(1) TRANSFER TO CORPORATION.—The plan 

5 administrator of a plan described in paragraph (4) 

6 may elect to transfer the benefits of a missing par7 ticipant or beneficiary to the corporation upon ter8 mination of the plan. 

9 ‘‘(2) INFORMATION TO THE CORPORATION.—To 

10 the extent provided in regulations, the plan adminis11 trator of a plan described in paragraph (4) shall, 

12 upon termination of the plan, provide the corpora13 tion information with respect to benefits of a miss14 ing participant or beneficiary if the plan transfers 

15 such benefits—

16 ‘‘(A) to the corporation, or 

17 ‘‘(B) to an entity other than the corpora18 tion or a plan described in paragraph (4)(B)(ii).

19 ‘‘(3) PAYMENT BY THE CORPORATION.—If ben20 efits of a missing participant or beneficiary were 

21 transferred to the corporation under paragraph (1), 

22 the corporation shall, upon location of the partici23 pant or beneficiary, pay to the participant or bene24 ficiary the amount transferred (or the appropriate 

25 survivor benefit) either—
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1 ‘‘(A) in a single sum (plus interest), or 

2 ‘‘(B) in such other form as is specified in 

3 regulations of the corporation. 

4 ‘‘(4) PLANS DESCRIBED.—A plan is described 

5 in this paragraph if—

6 ‘‘(A) the plan is a pension plan (within the 

7 meaning of section 3(2))—

8 ‘‘(i) to which the provisions of this 

9 section do not apply (without regard to 

10 this subsection), and 

11 ‘‘(ii) which is not a plan described in 

12 paragraphs (2) through (11) of section 

13 4021(b), and 

14 ‘‘(B) at the time the assets are to be dis15 tributed upon termination, the plan—

16 ‘‘(i) has one or more missing partici17 pants or beneficiaries, and 

18 ‘‘(ii) has not provided for the transfer 

19 of assets to pay the benefits of all missing 

20 participants and beneficiaries to another 

21 pension plan (within the meaning of sec22 tion 3(2)). 

23 ‘‘(5) CERTAIN PROVISIONS NOT TO APPLY.—

24 Subsections (a)(1) and (a)(3) shall not apply to a 

25 plan described in paragraph (4). 
22

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1 ‘‘(e) INVOLUNTARY CASHOUTS.—

2 ‘‘(1) PAYMENT BY THE CORPORATION.—If ben3 efits under a plan described in paragraph (2) were 

4 transferred to the corporation under section 

5 401(a)(31)(B) of the Internal Revenue Code of 

6 1986, the corporation shall, upon application filed by 

7 the participant or beneficiary with the corporation in 

8 such form and manner as may be prescribed in regu9 lations of the corporation, pay to the participant or 

10 beneficiary the amount transferred (or the appro11 priate survivor benefit) either—

12 ‘‘(A) in a single sum (plus interest), or 

13 ‘‘(B) in such other form as is specified in 

14 regulations of the corporation. 

15 ‘‘(2) INFORMATION TO THE CORPORATION.—To 

16 the extent provided in regulations, the plan adminis17 trator of a plan described in paragraph (3) shall, 

18 upon transferred to the corporation under section 

19 401(a)(31)(B) of such Code, provide the corporation 

20 information with respect to benefits of the partici21 pant or beneficiary so transferred. 

22 ‘‘(3) PLANS DESCRIBED.—A plan is described 

23 in this paragraph if the plan is a pension plan (with24 in the meaning of section 3(2))—
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1 ‘‘(A) which provides for mandatory dis2 tributions under section 401(a)(31)(B) of the 

3 Internal Revenue Code of 1986, and 

4 ‘‘(B) which is not a plan described in para5 graphs (2) through (11) of section 4021(b). 

6 ‘‘(4) CERTAIN PROVISIONS NOT TO APPLY.—

7 Subsections (a)(1) and (a)(3) shall not apply to a 

8 plan described in paragraph (2).’’. 

9 (2) CONFORMING AMENDMENTS.—Section 

10 206(f) of such Act (29 U.S.C. 1056(f)) is amend11 ed—

12 (A) by striking ‘‘title IV’’ and inserting 

13 ‘‘section 4050’’; and 

14 (B) by striking ‘‘the plan shall provide 

15 that,’’. 

16 (d) EFFECTIVE DATE.—

17 (1) INTERNAL REVENUE CODE OF 1986 PROVI18 SIONS.—The amendments made by subsections (a) 

19 and (b) shall take effect as if included in the amend20 ments made by section 657 of the Economic Growth 

21 and Tax Relief Reconciliation Act of 2001. 

22 (2) EMPLOYEE RETIREMENT INCOME SECURITY

23 ACT OF 1974 PROVISIONS.—The amendments made 

24 by subsection (c) shall apply to distributions made 

25 after final regulations implementing subsections (c), 
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1 (d), and (e) of section 4050 of the Employee Retire2 ment Income Security Act of 1974 (as added by sub3 section (c)), respectively, are prescribed. 

4 (3) REGULATIONS.—The Pension Benefit Guar5 anty Corporation shall issue regulations necessary to 

6 carry out the amendments made by subsection (c) 

7 not later than December 31, 2004.

Æ