II 

109TH CONGRESS 

1ST SESSION S. 547 

To amend the Internal Revenue Code of 1986 to provide for employer 

retirement savings accounts, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

MARCH 8, 2005 

Mr. THOMAS (for himself and Mr. KYL) 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 provide 

for employer retirement savings accounts, and for other 

purposes.

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

3 SECTION 1. EMPLOYER RETIREMENT SAVINGS ACCOUNTS. 

4 (a) IN GENERAL.—Subpart A of part 1 of subchapter 

5 D of chapter 1 of the Internal Revenue Code of 1986 is 

6 amended by inserting after section 401 the following new 

7 section: 

8 ‘‘SEC. 401A. EMPLOYER RETIREMENT SAVINGS ACCOUNTS. 

9 ‘‘(a) IN GENERAL.—A defined contribution plan shall 

10 not fail to meet the requirements of section 401(a) merely 
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1 because the plan includes an employer retirement savings 

2 account arrangement. 

3 ‘‘(b) EMPLOYER RETIREMENT SAVINGS ACCOUNT

4 ARRANGEMENT.—An employer retirement savings account 

5 arrangement is any arrangement which is part of a plan 

6 which meets the requirements of section 401(a)— 

7 ‘‘(1) under which a covered employee may elect 

8 to have the employer make payments as contribu9 tions to a trust under the plan on behalf of the em10 ployee, or to the employee directly in cash, 

11 ‘‘(2) under which amounts held by the trust 

12 which are attributable to employer contributions 

13 made pursuant to the employee’s election— 

14 ‘‘(A) may not be distributable to partici15 pants or other beneficiaries earlier than— 

16 ‘‘(i) severance from employment, 

17 death, or disability, 

18 ‘‘(ii) an event described in subsection 

19 (g), 

20 ‘‘(iii) the attainment of age 59, or 

21 ‘‘(iv) upon hardship of the employee, 

22 and 

23 ‘‘(B) will not be distributable merely by 

24 reason of the completion of a stated period of 
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1 participation or the lapse of a fixed number of 

2 years, 

3 ‘‘(3) which provides that an employee’s right to 

4 the employee’s accrued benefit derived from em5 ployer contributions made to the trust pursuant to 

6 the employee’s election is nonforfeitable, and 

7 ‘‘(4) which does not require, as a condition of 

8 participation in the arrangement, that an employee 

9 complete a period of service with the employer (or 

10 employers) maintaining the plan extending beyond 

11 the period permitted under section 410(a)(1) (deter12 mined without regard to subparagraph (B)(i) there13 of). 

14 ‘‘(c) APPLICATION OF NONDISCRIMINATION STAND15 ARDS.— 

16 ‘‘(1) CONTRIBUTION PERCENTAGE REQUIRE17 MENT.—An arrangement shall not be treated as an 

18 employer retirement savings account arrangement 

19 for any plan year unless— 

20 ‘‘(A) the contribution percentage for eligi21 ble highly compensated employees for the plan 

22 year does not exceed 200 percent of such per23 centage for all other eligible employees for the 

24 preceding plan year, or 
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1 ‘‘(B) the contribution percentage of non2 highly compensated employees for the preceding 

3 plan year exceeded 6 percent. 

4 ‘‘(2) ALTERNATIVE METHODS OF MEETING

5 NONDISCRIMINATION REQUIREMENTS.— 

6 ‘‘(A) IN GENERAL.—An arrangement shall 

7 be treated as meeting the requirements of para8 graph (1)(A) if such arrangement— 

9 ‘‘(i) meets the contribution require10 ments of subparagraph (B), and 

11 ‘‘(ii) meets the notice requirements of 

12 subparagraph (D). 

13 ‘‘(B) CONTRIBUTION REQUIREMENT.—The 

14 requirements of this subparagraph are met if, 

15 under the arrangement, the employer is re16 quired to make contributions to a defined con17 tribution plan on behalf of each eligible em18 ployee who is not a highly compensated em19 ployee in an amount equal to at least 3 percent 

20 of the employee’s compensation. For purposes 

21 of this subparagraph, elective deferrals and em22 ployee contributions shall not be taken into ac23 count in determining the amount of contribu24 tions the employer makes to the plan. 
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1 ‘‘(C) SPECIAL RULES FOR MATCHING CON2 TRIBUTIONS.— 

3 ‘‘(i) IN GENERAL.—If an employer 

4 takes matching contributions into account 

5 for purposes of subparagraph (B), the re6 quirements of such subparagraph shall be 

7 treated as met only if the matching con8 tributions on behalf of each employee who 

9 is not a highly compensated employee are 

10 equal to 50 percent of the elective deferrals 

11 of the employee to the extent that such 

12 elective deferrals do not exceed 6 percent 

13 of the employee’s compensation. 

14 ‘‘(ii) ALTERNATIVE PLAN DESIGNS.—

15 If the rate of any matching contribution 

16 with respect to any rate of elective deferral 

17 is not equal to the percentage required 

18 under clause (i), an arrangement shall not 

19 be treated as failing to meet the require20 ments of clause (i) if— 

21 ‘‘(I) the rate of an employer’s 

22 matching contribution does not in23 crease as an employee’s rate of elec24 tive contributions increases, and 
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1 ‘‘(II) the aggregate amount of 

2 matching contributions at such rate of 

3 elective contribution is at least equal 

4 to the aggregate amount of matching 

5 contributions which would be made if 

6 matching contributions were made on 

7 the basis of the percentages described 

8 in clause (i). 

9 ‘‘(iii) RATE FOR HIGHLY COM10 PENSATED EMPLOYEES.—The require11 ments of this subparagraph are not met if, 

12 under the arrangement, the rate of match13 ing contribution with respect to any elec14 tive deferral of a highly compensated em15 ployee at any rate of elective deferral is 

16 greater than that with respect to an em17 ployee who is not a highly compensated 

18 employee. 

19 ‘‘(D) NOTICE REQUIREMENT.—An ar20 rangement meets the requirements of this sub21 paragraph if, under the arrangement, each em22 ployee eligible to participate is, within a reason23 able period before any year, given written notice 

24 of the employee’s rights and obligations under 

25 the arrangement which— 
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1 ‘‘(i) is sufficiently accurate and com2 prehensive to apprise the employee of such 

3 rights and obligations, and 

4 ‘‘(ii) is written in a manner calculated 

5 to be understood by the average employee 

6 eligible to participate. 

7 ‘‘(E) OTHER REQUIREMENTS.— 

8 ‘‘(i) WITHDRAWAL AND VESTING RE9 STRICTIONS.—An arrangement shall not be 

10 treated as meeting the requirements of 

11 subparagraph (B) unless the requirements 

12 of paragraphs (2) and (3) of subsection (b) 

13 are met with respect to all employer con14 tributions (including matching contribu15 tions) taken into account in determining 

16 whether the requirements of subparagraph 

17 (B) are met. 

18 ‘‘(ii) SOCIAL SECURITY AND SIMILAR

19 CONTRIBUTIONS NOT TAKEN INTO AC20 COUNT.—An arrangement shall not be 

21 treated as meeting the requirements of 

22 subparagraph (B) unless such require23 ments are met without regard to section 

24 401(l), and, for purposes of section 401(l), 
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1 employer contributions under subpara2 graph (B) shall not be taken into account. 

3 ‘‘(F) OTHER PLANS.—An arrangement 

4 shall be treated as meeting the requirements of 

5 subparagraph (B) if any other plan maintained 

6 by the employer meets such requirements with 

7 respect to employees eligible under the arrange8 ment. 

9 ‘‘(3) CONTRIBUTION PERCENTAGE.—For pur10 poses of paragraph (1), the contribution percentage 

11 for an eligible employee for a specified group of em12 ployees for a plan year shall be the average of the 

13 ratios (calculated separately for each employee in 

14 such group) of— 

15 ‘‘(A) the sum of the elective deferrals, 

16 matching contributions, employee contributions, 

17 and qualified nonelective contributions paid 

18 under the plan on behalf of each such employee 

19 for such plan year, to 

20 ‘‘(B) the employee’s compensation for such 

21 plan year. 

22 ‘‘(4) SPECIAL RULES.—For purposes of this 

23 subsection— 

24 ‘‘(A) MULTIPLE ARRANGEMENTS.—If 2 or 

25 more plans which include employer retirement 
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1 savings account arrangements are considered as 

2 1 plan for purposes of section 401(a)(4) or 

3 410(b), all such arrangements included in such 

4 plans shall be treated as 1 arrangement. 

5 ‘‘(B) EMPLOYEES IN MORE THAN 1 AR6 RANGEMENT.—If any highly compensated em7 ployee is a participant under 2 or more em8 ployer retirement savings account arrangements 

9 of the employer, for purposes of determining 

10 the contribution percentage with respect to such 

11 employee, all such arrangements shall be treat12 ed as 1 arrangement. 

13 ‘‘(C) USE OF CURRENT YEAR.—An em14 ployer may elect to apply paragraph (1) (A) or 

15 (B) by using the plan year rather than the pre16 ceding plan year. An employer may change such 

17 an election only with the consent of the Sec18 retary. 

19 ‘‘(D) 1ST PLAN YEAR.—In the case of the 

20 first plan year of any plan (other than a suc21 cessor plan), the amount taken into account as 

22 the contribution percentage of nonhighly com23 pensated employees for the preceding plan year 

24 shall be— 

25 ‘‘(i) 3 percent, or 
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1 ‘‘(ii) if the employer makes an election 

2 under this clause, the contribution percent3 age of nonhighly compensated employees 

4 determined for such first plan year. 

5 ‘‘(E) SPECIAL RULE FOR EARLY PARTICI6 PATION.—If an employer elects to apply section 

7 410(b)(4)(B) in determining whether an em8 ployer retirement savings account arrangement 

9 meets the requirements of section 410(b)(1), 

10 the employer may, in determining whether the 

11 arrangement meets the requirements of this 

12 subsection, exclude from consideration all eligi13 ble employees (other than highly compensated 

14 employees) who have not met the minimum age 

15 and service requirements of section 

16 410(a)(1)(A). 

17 ‘‘(5) EXCEPTIONS.— 

18 ‘‘(A) GOVERNMENTAL PLANS.—A govern19 mental plan (within the meaning of section 

20 414(d)) maintained by a State or local govern21 ment or political subdivision thereof (or agency 

22 or instrumentality thereof) shall be treated as 

23 meeting the requirements of this subsection. 

24 ‘‘(B) TAX EXEMPT PLANS.— 
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1 ‘‘(i) IN GENERAL.—A plan not de2 scribed in subparagraph (A) which is 

3 maintained by an organization described in 

4 section 501(c)(3) shall be treated as meet5 ing the requirements of this subsection for 

6 any plan year if the plan provides that all 

7 employees of such organization may elect 

8 to have the employer make contributions of 

9 more than $200 pursuant to a salary re10 duction agreement if any employee of the 

11 organization may elect to have the organi12 zation make contributions pursuant to 

13 such agreement. 

14 ‘‘(ii) EXCEPTION.—Clause (i) shall 

15 not apply to any plan if under the plan— 

16 ‘‘(I) matching contributions may 

17 be made on behalf of any employee, or 

18 ‘‘(II) an employee may make con19 tributions other than elective defer20 rals. 

21 ‘‘(iii) EXCLUSION.—For purposes of 

22 clause (i), there may be excluded any em23 ployee who is— 
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1 ‘‘(I) a participant in another em2 ployer retirement savings account ar3 rangement of the organization, 

4 ‘‘(II) a nonresident alien de5 scribed in section 410(b)(3)(C), or 

6 ‘‘(III) subject to the conditions 

7 applicable under section 410(b)(4), a 

8 student performing services described 

9 in section 3121(b)(10) or an employee 

10 who normally works less than 20 

11 hours per week. 

12 ‘‘(6) COORDINATION WITH SUBSECTION

13 (a)(4).—A cash or deferred arrangement shall be 

14 treated as meeting the requirements of subsection 

15 (a)(4) with respect to contributions if the require16 ments of paragraph (1) are met. 

17 ‘‘(d) OTHER REQUIREMENTS.—For purposes of this 

18 section— 

19 ‘‘(1) BENEFITS (OTHER THAN MATCHING CON20 TRIBUTIONS) MUST NOT BE CONTINGENT ON ELEC21 TION TO DEFER.—An employer retirement savings 

22 account arrangement of any employer shall not be 

23 treated as such an arrangement if any other benefit 

24 is conditioned (directly or indirectly) on the em25 ployee electing to have the employer make or not 
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1 make contributions under the arrangement in lieu of 

2 receiving cash. The preceding sentence shall not 

3 apply to any matching contribution made by reason 

4 of such an election. 

5 ‘‘(2) COORDINATION WITH OTHER PLANS.—Any 

6 employer contribution made pursuant to an employ7 ee’s election under an employer retirement savings 

8 account arrangement shall not be taken into account 

9 for purposes of determining whether any other plan 

10 meets the requirements of section 401(a) or 410(b). 

11 This paragraph shall not apply for purposes of de12 termining whether a plan meets the average benefit 

13 requirement of section 410(b)(2)(A)(ii). 

14 ‘‘(e) DEFINITIONS.—For purposes of this section— 

15 ‘‘(1) ELIGIBLE EMPLOYEE.—The term ‘eligible 

16 employee’ means any employee who is eligible to 

17 benefit under the employer retirement savings ac18 count arrangement. 

19 ‘‘(2) HIGHLY COMPENSATED EMPLOYEE.—For 

20 purposes of this subsection, the term ‘highly com21 pensated employee’ has the meaning given such term 

22 by section 414(q). 

23 ‘‘(3) MATCHING CONTRIBUTION.—The term 

24 ‘matching contribution’ means— 
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1 ‘‘(A) any employer contribution made to a 

2 defined contribution plan on behalf of an em3 ployee on account of an employee contribution 

4 made by such employee, and 

5 ‘‘(B) any employer contribution made to a 

6 defined contribution plan on behalf of an em7 ployee on account of an employee’s elective de8 ferral. 

9 ‘‘(4) ELECTIVE DEFERRAL.—The term ‘elective 

10 deferral’ means any employer contribution described 

11 in section 402(g)(3). 

12 ‘‘(5) QUALIFIED NONELECTIVE CONTRIBU13 TIONS.—The term ‘qualified nonelective contribu14 tion’ means any employer contribution (other than a 

15 matching contribution) with respect to which— 

16 ‘‘(A) the employee may not elect to have 

17 the contribution paid to the employee in cash 

18 instead of being contributed to the plan, and 

19 ‘‘(B) the requirements of paragraphs (2) 

20 and (3) of subsection (b) are met. 

21 ‘‘(6) COMPENSATION.—The term ‘compensa22 tion’ has the meaning given such term by section 

23 414(s). 

24 ‘‘(f) ARRANGEMENT NOT DISQUALIFIED IF EXCESS

25 CONTRIBUTIONS DISTRIBUTED.— 
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1 ‘‘(1) IN GENERAL.—An employer retirement 

2 savings account arrangement shall not be treated as 

3 failing to meet the requirements of subsection 

4 (c)(1)(A) for any plan year if, before the close of the 

5 following plan year— 

6 ‘‘(A) the amount of the excess contribu7 tions for such plan year (and any income allo8 cable to such contributions) is distributed, or 

9 ‘‘(B) to the extent provided in regulations, 

10 the employee elects to treat the amount of the 

11 excess contributions as an amount distributed 

12 to the employee and then contributed by the 

13 employee to the plan. 

14 Any distribution of excess contributions (and in15 come) may be made without regard to any other pro16 vision of law. 

17 ‘‘(2) EXCESS CONTRIBUTIONS.—For purposes 

18 of paragraph (1), the term ‘excess contributions’ 

19 means, with respect to any plan year, the excess 

20 of— 

21 ‘‘(A) the aggregate amount of employer 

22 contributions actually paid over to the trust on 

23 behalf of highly compensated employees for 

24 such plan year, over 
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1 ‘‘(B) the maximum amount of such con2 tributions permitted under the limitations of 

3 subsection (c)(1)(A) (determined by reducing 

4 contributions made on behalf of highly com5 pensated employees in order of the contribution 

6 percentages beginning with the highest of such 

7 percentages). 

8 ‘‘(3) METHOD OF DISTRIBUTING EXCESS CON9 TRIBUTIONS.—Any distribution of the excess con10 tributions for any plan year shall be made to highly 

11 compensated employees on the basis of the amount 

12 of contributions by, or on behalf of, each of such em13 ployees. 

14 ‘‘(4) ADDITIONAL TAX UNDER SECTION 72(t) 

15 NOT TO APPLY.—No tax shall be imposed under sec16 tion 72(t) on any amount required to be distributed 

17 under this subsection. 

18 ‘‘(5) TREATMENT OF MATCHING CONTRIBU19 TIONS FORFEITED BY REASON OF EXCESS DEFER20 RAL OR CONTRIBUTION.—For purposes of subsection 

21 (b)(3), a matching contribution shall not be treated 

22 as forfeitable merely because such contribution is 

23 forfeitable if the contribution to which the matching 

24 contribution relates is treated as an excess contribu-
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1 tion under paragraph (2) or an excess deferral under 

2 section 402(g)(2)(A). 

3 ‘‘(6) CROSS REFERENCE.—For excise tax on 

4 certain excess contributions, see section 4979. 

5 ‘‘(g) DISTRIBUTIONS UPON TERMINATION OF

6 PLAN.— 

7 ‘‘(1) IN GENERAL.—An event described in this 

8 subsection is the termination of the plan without es9 tablishment or maintenance of another defined con10 tribution plan (other than an employee stock owner11 ship plan as defined in section 4975(e)(7)). 

12 ‘‘(2) DISTRIBUTIONS MUST BE LUMP SUM DIS13 TRIBUTIONS.— 

14 ‘‘(A) IN GENERAL.—A termination shall 

15 not be treated as described in paragraph (1) 

16 with respect to any employee unless the em17 ployee receives a lump sum distribution by rea18 son of the termination. 

19 ‘‘(B) LUMP-SUM DISTRIBUTION.—For pur20 poses of this paragraph, the term ‘lump-sum 

21 distribution’ has the meaning given such term 

22 by section 402(e)(4)(D) (without regard to sub23 clauses (I), (II), (III), and (IV) of clause (i) 

24 thereof). Such term includes a distribution of 

25 an annuity contract from— 
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1 ‘‘(i) a trust which forms a part of a 

2 plan described in section 401(a) and which 

3 is exempt from tax under section 501(a), 

4 or 

5 ‘‘(ii) an annuity plan described in sec6 tion 403(a). 

7 ‘‘(h) SPECIAL RULES FOR SMALL EMPLOYERS.— 

8 ‘‘(1) IN GENERAL.—An arrangement main9 tained by an eligible employer shall not fail to meet 

10 the requirements of this section merely because con11 tributions under the arrangement on behalf of any 

12 employee are made to an individual retirement plan 

13 (as defined under section 7701(a)(37)) established 

14 on behalf of the employee. 

15 ‘‘(2) ELIGIBLE EMPLOYER.—For purposes of 

16 paragraph (1), the term ‘eligible employer’ means, 

17 with respect to any year, an employer which had no 

18 more than 10 employees who received at least 

19 $5,000 of compensation from the employer for the 

20 preceding year. An eligible employer who establishes 

21 and maintains an arrangement under this subsection 

22 for 1 or more years and who fails to be an eligible 

23 employer for any subsequent year shall be treated as 

24 an eligible employer for the 2 years following the 

25 last year the employer was an eligible employer. If 
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1 such failure is due to any acquisition, disposition, or 

2 similar transaction involving an eligible employer, 

3 the preceding sentence shall not apply. 

4 ‘‘(i) REGULATIONS.—The Secretary shall prescribe 

5 such regulations as may be necessary to carry out the pur6 poses of this section, including regulations permitting ap7 propriate aggregation of plans and contributions. 

8 ‘‘(j) TRANSITION RULES.— 

9 ‘‘(1) DEEMED ERSAS.—Any arrangement 

10 which, as of December 31, 2005— 

11 ‘‘(A) is part of a plan meeting the require12 ments of section 401(a), and 

13 ‘‘(B) is— 

14 ‘‘(i) a qualified cash or deferred ar15 rangement (as defined in section 

16 401(k)(2)), or 

17 ‘‘(ii) subject to the requirements of 

18 section 401(m), 

19 shall be treated as an employer retirement savings 

20 account arrangement and subject to the require21 ments of this title applicable to such an arrangement 

22 for plan years beginning after December 31, 2005. 

23 ‘‘(2) ELECTABLE ERSAS.— 

24 ‘‘(A) IN GENERAL.—If an employer makes 

25 an election under this paragraph with respect to 
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1 any applicable arrangement, such arrangement 

2 shall be treated as an employer retirement sav3 ings account arrangement and subject to the re4 quirements of this title applicable to such an 

5 arrangement for plan years beginning after De6 cember 31, 2005. 

7 ‘‘(B) APPLICABLE ARRANGEMENT.—For 

8 purposes of subparagraph (A), the term ‘appli9 cable arrangement’ means an arrangement 

10 which, as of December 31, 2005, is— 

11 ‘‘(i) an arrangement under which 

12 amounts are contributed by an individual’s 

13 employer for an annuity contract described 

14 in section 403(b), 

15 ‘‘(ii) an eligible deferred compensation 

16 plan (within the meaning of section 

17 457(b)) maintained by an eligible employer 

18 described in section 457(e)(1)(A), 

19 ‘‘(iii) a simplified employee pension 

20 (within the meaning of section 408(k)) for 

21 which an election is in effect under para22 graph (6) thereof, or 

23 ‘‘(iv) a simple retirement account 

24 (within the meaning of section 408(p).’’. 
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1 (b) ELECTIVE DEFERRALS.—Section 402 of such 

2 Code is amended— 

3 (1) in subsection (e)(3), by inserting ‘‘, an em4 ployer retirement savings account arrangement (as 

5 defined in section 401A(b)),’’ after ‘‘section 

6 401(k)(2))’’, and 

7 (2) in subsection (g)(3)(A), by inserting ‘‘, or 

8 an employer retirement savings account arrangement 

9 (as defined in section 401A(b)),’’ before ‘‘to the ex10 tent’’. 

11 (c) TERMINATION OF CONTRIBUTIONS TO OTHER

12 PLANS.— 

13 (1) 401(k) PLANS.—Section 401(k) of such 

14 Code is amended by adding at the end the following 

15 new paragraph: 

16 ‘‘(13) TERMINATION.—This subsection shall not 

17 apply to any plan year beginning after December 31, 

18 2005.’’. 

19 (2) 403(b) ANNUITY CONTRACTS.—Section 

20 403(b) of such Code is amended by adding at the 

21 end the following new paragraph: 

22 ‘‘(14) TERMINATION.—No elective deferral (as 

23 defined in section 402(g)(3)) may be contributed 

24 under this subsection by an employer, and no 

25 amount may be transferred under an eligible roll-
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1 over, for an annuity contract after December 31, 

2 2006.’’. 

3 (3) GOVERNMENTAL 457 PLANS.—Section 457 

4 of such Code is amended by adding at the end the 

5 following new subsection: 

6 ‘‘(h) TERMINATION.—No amount may be deferred 

7 under this subsection under a plan maintained by an eligi8 ble employer described in subsection (e)(1)(A), and no 

9 amount may be transferred under an eligible rollover to 

10 an eligible deferred compensation plan maintained by such 

11 an employer, after December 31, 2006.’’. 

12 (4) SARSEPS.—Subparagraph (H) of section 

13 408(k)(6) of such Code is amended by adding at the 

14 end the following new sentence: ‘‘No amount may be 

15 contributed under this paragraph to a simplified em16 ployee pension by an employer, and no amount may 

17 be transferred to a simplified employee pension 

18 maintained under this paragraph under an eligible 

19 rollover, after December 31, 2006.’’. 

20 (5) SIMPLE IRAS.—Section 408(p) of such Code 

21 is amended by adding at the end the following new 

22 paragraph: 

23 ‘‘(11) TERMINATION.—No amount may be con24 tributed under this paragraph to a simple retirement 

25 account after December 31, 2006.’’. 
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1 (d) OTHER CONFORMING CHANGES.— 

2 (1) Section 401 of such Code is amended by 

3 striking subsection (m). 

4 (2) Section 7701(j) of such Code (relating to 

5 tax treatment of Federal Thrift Savings Fund) is 

6 amended— 

7 (A) in paragraph (1)(C), by striking ‘‘sec8 tion 401(k)(4)(B)’’ and inserting ‘‘section 

9 401A(d)(1)’’, and 

10 (B) in paragraph (2), by striking ‘‘section 

11 401(k)’’ and inserting ‘‘section 401A’’. 

12 (3) The Secretary of the Treasury shall, not 

13 later than 90 days after the date of the enactment 

14 of this Act, submit such technical and other con15 forming changes as are necessary to carry out the 

16 amendments made by this section. 

17 (e) CLERICAL AMENDMENT.—The table of sections 

18 for subpart A of part 1 of subchapter D of chapter 1 of 

19 such Code is amended by inserting after the item relating 

20 to section 401 the following new item:

‘‘Sec. 401A. Employer Retirement Savings Accounts.’’.

21 (f) EFFECTIVE DATE.—The amendments made by 

22 this section shall apply to years beginning after December 

23 31, 2005. 

24 (g) PROVISIONS RELATING TO PLAN AMEND25 MENTS.— 
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1 (1) IN GENERAL.—If this subsection applies to 

2 any plan or contract amendment— 

3 (A) such plan or contract shall be treated 

4 as being operated in accordance with the terms 

5 of the plan during the period described in para6 graph (2)(C)(i), and 

7 (B) except as provided by the Secretary of 

8 the Treasury, such plan shall not fail to meet 

9 the requirements of section 401A of the Inter10 nal Revenue Code of 1986 by reason of such 

11 amendment. 

12 (2) AMENDMENTS TO WHICH SECTION AP13 PLIES.— 

14 (A) IN GENERAL.—This subsection shall 

15 apply to any amendment to any plan or annuity 

16 contract which is made— 

17 (i) pursuant to any amendment made 

18 by this section, or pursuant to any regula19 tion issued by the Secretary of the Treas20 ury or the Secretary of Labor under this 

21 section, and 

22 (ii) on or before the last day of the 

23 first plan year beginning on or after Janu24 ary 1, 2007. 
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1 (B) GOVERNMENTAL PLAN.—In the case 

2 of a governmental plan (as defined in section 

3 414(d) of the Internal Revenue Code of 1986), 

4 subparagraph (A) shall be applied by sub5 stituting ‘‘2009’’ for ‘‘2007’’. 

6 (C) CONDITIONS.—This subsection shall 

7 not apply to any amendment unless— 

8 (i) during the period— 

9 (I) beginning on the date the leg10 islative or regulatory amendment de11 scribed in subparagraph (A)(i) takes 

12 effect (or in the case of a plan or con13 tract amendment not required by such 

14 legislative or regulatory amendment, 

15 the effective date specified by the 

16 plan), and 

17 (II) ending on the date described 

18 in subparagraph (A)(ii) (or, if earlier, 

19 the date the plan or contract amend20 ment is adopted), the plan or contract 

21 is operated as if such plan or contract 

22 amendment were in effect; and 

23 (ii) such plan or contract amendment 

24 applies retroactively for such period.

Æ