essary to provide for coverage under such
defined contribution plan pursuant to elec-
tions under this paragraph.
‘‘(B) REQUIRED
LEVEL
OF
CONTRIBU-
TIONS.—The requirements of subparagraph (A)
shall not be treated as met unless the defined
contribution plan with respect to which an elec-
tion is made under subparagraph (A) provides
for contributions (other than employee contribu-
tions (if any)) at least equivalent to the con-
tributions (other than employee contributions
(if any)) provided for under the terms of the
defined benefit plan.
‘‘(C) REQUIRED ELECTION PERIOD.—The
requirements of subparagraph (A) shall not be
treated as met unless the defined benefit plan
provides that an election under subparagraph
(A) may be made at any time during the 90-
day period beginning with the later of—
‘‘(i) the commencement of the first
plan year to which this paragraph applies,
or
‘‘(ii) the commencement of the em-
ployee’s service under the plan.’’.
(c) EFFECTIVE DATES.—
(1) GENERAL RULE.—The amendments made
by this section shall apply to plan years beginning
after December 31, 1996.
(2) SPECIAL RULE FOR COLLECTIVE BARGAIN-
ING AGREEMENTS.—In the case of a defined benefit
plan maintained pursuant to one or more collective
bargaining agreements between employee organiza-
tions and one or more employers ratified before the
date of the enactment of this Act, the amendments
made by this section shall not apply to plan years
beginning before the later of—
(A) the date on which the last of the col-
lective bargaining agreements relating to the
plan terminates (determined without regard to
any extension thereof agreed to after the date
of the enactment of this Act), or
(B) January 1, 1999.
For purposes of subparagraph (A), any plan amend-
ment made pursuant to a collective bargaining
agreement relating to the plan which amends the
plan solely to conform to any requirement added by
this section shall not be treated as a termination of
such collective bargaining agreement.
SEC. 3. TIMELY INVESTMENT OF PLAN CONTRIBUTIONS.
(a) IN GENERAL.—Section 404 of the Employee Re-
tirement Income Security Act of 1974 (29 U.S.C. 1104)
is amended by adding at the end the following new sub-
section:
‘‘(e) Any failure, by a person who is a fiduciary with
respect to a pension plan and who has discretionary au-
thority respecting investment of amounts contributed to
the plan, to ensure that amounts contributed to the plan
are invested, in accordance with the terms of the plan and
this title, before 15 days after the calendar month in which
such amounts are received by the plan, shall be treated
as a breach of fiduciary duties under the plan.’’.
(b) EFFECTIVE DATE.—The amendment made by
subsection (a) shall apply with respect to plan years begin-
ning on December 31, 1996.
SEC. 4. INCREASE IN PENALTY FOR EARLY DISTRIBUTIONS
FROM PENSION PLANS.
(a) IN GENERAL.—Paragraph (1) of section 72(t) of
the Internal Revenue Code of 1986 (relating to imposition
of additional tax) is amended by striking ‘‘10 percent’’ and
all that follows and inserting ‘‘100 percent of the portion
of such distribution which would (but for the following
sentence) be includible in gross income. A distribution on
which tax is imposed by the preceding sentence shall not
be includible in gross income.’’
(b) EFFECTIVE DATE.—The amendment made by
subsection (a) shall apply to distributions after December
31, 1996.
Æ