I 
113TH CONGRESS 
2D SESSION 
H. R. 5381 
To amend the nondiscrimination provisions of the Internal Revenue Code 
of 1986 to protect older, longer service participants. 
IN THE HOUSE OF REPRESENTATIVES 
JULY 31, 2014 
Mr. TIBERI (for himself and Mr. NEAL) introduced the following bill; which 
was referred to the Committee on Ways and Means 
A BILL 
To amend the nondiscrimination provisions of the Internal 
Revenue Code of 1986 to protect older, longer service 
participants. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. PROTECTING OLDER, LONGER SERVICE PAR-
TICIPANTS. 
(a) IN GENERAL.—Paragraph (4) of section 401(a) 
of the Internal Revenue Code of 1986 is amended to read 
as follows: 
‘‘(4) NONDISCRIMINATION.— 
‘‘(A) IN GENERAL.—A trust shall not con-
stitute a qualified trust under this section un-
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less the contributions or benefits provided under 
the plan do not discriminate in favor of highly 
compensated employees (within the meaning of 
section 414(q)). For purposes of this para-
graph, there shall be excluded from consider-
ation employees described in section 410(b)(3) 
(A) and (C). 
‘‘(B) PROTECTION
OF
OLDER, LONGER 
SERVICE PARTICIPANTS.— 
‘‘(i)(I) A defined benefit plan de-
scribed in subclause (II) shall not fail to 
satisfy this paragraph with respect to plan 
benefits, rights, or features by reason of— 
‘‘(aa) the composition of the 
closed class of participants described 
in subclause (II), or 
‘‘(bb) the benefits, rights, or fea-
tures provided to such closed class. 
‘‘(II) A plan is described in this sub-
clause if— 
‘‘(aa) the plan provides benefits, 
rights, or features to a closed class of 
participants, 
‘‘(bb) such closed class and such 
benefits, rights, and features satisfy 
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the requirements of subparagraph (A) 
(without regard to this clause) as of 
the date that the class was closed, and 
‘‘(cc) after the date as of which 
the class was closed, any plan amend-
ments that modify the closed class or 
the benefits, rights, and features pro-
vided to such closed class satisfy sub-
paragraph (A) (without regard to this 
clause). 
If a plan amendment causes a plan to 
cease to be described in this subclause (II) 
by reason of subclause (II)(cc), the plan is 
nevertheless described in this subclause 
(II) if such plan satisfies this subclause 
(II) (without regard to subclause (II)(cc)) 
as of the effective date of such amend-
ment. In such cases, subclause (II)(bb) 
and (cc) shall subsequently be applied by 
reference to the effective date of the plan 
amendment, rather than by reference to 
the original date that the class was closed. 
‘‘(ii)(I) A defined contribution plan 
described in subclause (II) shall be per-
mitted to be tested on a benefits basis. 
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ment. In such cases, subclause (II)(bb) 
and (cc) shall subsequently be applied by 
reference to the effective date of the plan 
amendment, rather than by reference to 
the original date that the class was closed. 
‘‘(III) In addition to other testing 
methodologies otherwise applicable, for 
purposes of determining compliance with 
this paragraph and with section 410(b) of 
the portion of one or more defined con-
tribution plans described in subclause (II) 
that provide make-whole contributions, 
such portion of such plans may be aggre-
gated and tested on a benefits basis with 
the portion of one or more defined con-
tribution plans that— 
‘‘(aa) provides matching con-
tributions (as defined in subsection 
(m)(4)(A)), or 
‘‘(bb) consists of an employee 
stock ownership plan within the mean-
ing of section 4975(e)(7) or a tax 
credit employee stock ownership plan 
within the meaning of section 409(a). 
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For such purposes, matching contributions 
shall be treated in the same manner as em-
ployer contributions that are made without 
regard to whether an employee makes an 
elective contribution or employee contribu-
tion, including for purposes of applying the 
rules of subsection (l). 
‘‘(C) DEFINITIONS.—For purposes of this 
paragraph— 
‘‘(i) MAKE-WHOLE CONTRIBUTIONS.— 
The 
term 
‘make-whole 
contributions’ 
means allocations for each employee in the 
class that are reasonably calculated, in a 
consistent manner, to replace some or all 
of the retirement benefits that the em-
ployee would have received under the de-
fined benefit plan and any other plan or 
arrangement if the employee had continued 
to benefit at the same level under such de-
fined benefit plan and such other plan or 
arrangement. 
‘‘(ii) REFERENCES TO CLOSED CLASS 
OF PARTICIPANTS.—References to a closed 
class of participants and similar references 
to a closed class shall include arrange-
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ments under which one or more classes of 
participants are closed. 
‘‘(D) PROTECTING GRANDFATHERED PAR-
TICIPANTS IN DEFINED BENEFIT PLANS.— 
‘‘(i) One or more defined benefit plans 
described in clause (ii) shall be permitted 
to be tested on a benefits basis with one or 
more defined contribution plans. 
‘‘(ii) A defined benefit plan is de-
scribed in this clause if— 
‘‘(I) the plan provides benefits to 
a closed class of participants, 
‘‘(II) the plan and such benefits 
satisfy the requirements of subpara-
graph (A) (without regard to this sub-
paragraph) as of the date the class 
was closed, and 
‘‘(III) after the date as of which 
the class was closed, any plan amend-
ments that modify the closed class or 
the benefits provided to such closed 
class satisfy subparagraph (A) (with-
out regard to this subparagraph). 
If a plan amendment causes a plan to 
cease to be described in this clause (ii) by 
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reason of subclause (III), the plan is never-
theless described in this clause (ii) if such 
plan satisfies this clause (ii) (without re-
gard to subclause (III)) as of the effective 
date of such amendment. In such cases, 
subclauses (II) and (III) shall subsequently 
be applied by reference to the effective 
date of the plan amendment, rather than 
by reference to the original date that the 
class was closed. 
‘‘(iii) In addition to other testing 
methodologies otherwise applicable, for 
purposes of determining compliance with 
this paragraph and with section 410(b) of 
one or more defined benefit plans described 
in clause (ii), such plans may be aggre-
gated and tested on a benefits basis with 
the portion of one or more defined con-
tribution plans that— 
‘‘(I) provides matching contribu-
tions 
(as 
defined 
in 
subsection 
(m)(4)(A)), or 
‘‘(II) consists of an employee 
stock ownership plan within the mean-
ing of section 4975(e)(7) or a tax 
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credit employee stock ownership plan 
within the meaning of section 409(a). 
For such purposes, matching contributions 
shall be treated in the same manner as em-
ployer contributions that are made without 
regard to whether an employee makes an 
elective contribution or employee contribu-
tion, including for purposes of applying the 
rules of subsection (l). 
‘‘(E) RULES.—The Secretary may pre-
scribe rules designed to prevent abuse of the 
plan designs otherwise permitted by reason of 
subparagraphs (B) and (D). Such rules shall be 
directed towards abuses under which the de-
fined benefit plan was established within a spec-
ified period prior to the date that— 
‘‘(i) the class of participants described 
in 
subparagraphs 
(B)(i)(II)(aa), 
(B)(ii)(II)(aa), and (D)(ii)(I) is closed, or 
‘‘(ii) the defined benefit plan accruals 
have been reduced or eliminated, in the 
case of the make-whole contributions de-
scribed in subparagraph (C). 
‘‘(F) TRANSITION
RULES.—Within one 
year after the date of enactment of the Retire-
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ment Plan Simplification and Enhancement Act 
of 2013, the Secretary shall prescribe rules that 
facilitate the use of the provisions of subpara-
graphs (B) and (D) without regard to— 
‘‘(i) whether the closing of the class of 
participants referred to in such subpara-
graphs occurred before or after such date 
of enactment, or 
‘‘(ii) plan amendments that were 
adopted or effective before such date of en-
actment and that would not have been nec-
essary if subparagraphs (B) and (D) had 
been in effect.’’. 
(b) 
PARTICIPATION
REQUIREMENTS.—Paragraph 
(26) of section 401(a) of the Internal Revenue Code of 
1986 is amended by adding at the end the following new 
subparagraph: 
‘‘(I) PROTECTED PARTICIPANTS.—A plan 
described in this subparagraph shall be deemed 
to satisfy the requirements of subparagraph 
(A). A plan is described in this paragraph if— 
‘‘(i) the plan is amended to— 
‘‘(I) cease all benefit accruals, or 
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