HR 10 PCS
(B) the end of any remedial amendment
period with respect to the plan beginning within
the first 5 plan years; or
(2) made by the sponsor of any prototype or
similar plan which the sponsor intends to market to
participating employers.
(b) PENSION BENEFIT PLAN.—For purposes of this
section, the term ‘‘pension benefit plan’’ means a pension,
profit-sharing, stock bonus, annuity, or employee stock
ownership plan.
(c) ELIGIBLE EMPLOYER.—For purposes of this sec-
tion, the term ‘‘eligible employer’’ has the same meaning
given such term in section 408(p)(2)(C)(i)(I) of the Inter-
nal Revenue Code of 1986. The determination of whether
an employer is an eligible employer under this section shall
be made as of the date of the request described in sub-
section (a).
(d) 
DETERMINATION
OF
AVERAGE
FEES
CHARGED.—For purposes of any determination of average
fees charged, any request to which subsection (a) applies
shall not be taken into account.
(e) EFFECTIVE DATE.—The provisions of this section
shall apply with respect to requests made after December
31, 2001.
HR 10 PCS
SEC. 207. DEDUCTION LIMITS.
(a) STOCK BONUS AND PROFIT SHARING TRUSTS.—
(1) IN
GENERAL.—Subclause (I) of section
404(a)(3)(A)(i) (relating to stock bonus and profit
sharing trusts) is amended by striking ‘‘15 percent’’
and inserting ‘‘20 percent’’.
(2) CONFORMING AMENDMENT.—Subparagraph
(C) of section 404(h)(1) is amended by striking ‘‘15
percent’’ each place it appears and inserting ‘‘20
percent’’.
(b) COMPENSATION.—
(1) IN GENERAL.—Section 404(a) (relating to
general rule) is amended by adding at the end the
following:
‘‘(12) DEFINITION
OF
COMPENSATION.—For
purposes of paragraphs (3), (7), (8), and (9), the
term ‘compensation otherwise paid or accrued dur-
ing the taxable year’ shall include amounts treated
as ‘participant’s compensation’ under subparagraph
(C) or (D) of section 415(c)(3).’’.
(2) CONFORMING AMENDMENTS.—
(A) Subparagraph (B) of section 404(a)(3)
is amended by striking the last sentence.
(B) Clause (i) of section 4972(c)(6)(B) is
amended by striking ‘‘(within the meaning of
section 404(a))’’ and inserting ‘‘(within the
HR 10 PCS
meaning of section 404(a) and as adjusted
under section 404(a)(12))’’.
(c) EFFECTIVE DATE.—The amendments made by
this section shall apply to years beginning after December
31, 2001.
SEC. 208. OPTION TO TREAT ELECTIVE DEFERRALS AS
AFTER-TAX CONTRIBUTIONS.
(a) IN GENERAL.—Subpart A of part I of subchapter
D of chapter 1 (relating to deferred compensation, etc.)
is amended by inserting after section 402 the following
new section:
‘‘SEC. 402A. OPTIONAL TREATMENT OF ELECTIVE DEFER-
RALS AS PLUS CONTRIBUTIONS.
‘‘(a) GENERAL RULE.—If an applicable retirement
plan includes a qualified plus contribution program—
‘‘(1) any designated plus contribution made by
an employee pursuant to the program shall be treat-
ed as an elective deferral for purposes of this chap-
ter, except that such contribution shall not be ex-
cludable from gross income, and
‘‘(2) such plan (and any arrangement which is
part of such plan) shall not be treated as failing to
meet any requirement of this chapter solely by rea-
son of including such program.
HR 10 PCS
‘‘(b) QUALIFIED PLUS CONTRIBUTION PROGRAM.—
For purposes of this section—
‘‘(1) IN
GENERAL.—The term ‘qualified plus
contribution program’ means a program under which
an employee may elect to make designated plus con-
tributions in lieu of all or a portion of elective defer-
rals the employee is otherwise eligible to make under
the applicable retirement plan.
‘‘(2) SEPARATE
ACCOUNTING
REQUIRED.—A
program shall not be treated as a qualified plus con-
tribution program unless the applicable retirement
plan—
‘‘(A) establishes separate accounts (‘des-
ignated plus accounts’) for the designated plus
contributions of each employee and any earn-
ings properly allocable to the contributions, and
‘‘(B) maintains separate recordkeeping
with respect to each account.
‘‘(c) DEFINITIONS AND RULES RELATING TO DES-
IGNATED PLUS CONTRIBUTIONS.—For purposes of this
section—
‘‘(1) DESIGNATED PLUS CONTRIBUTION.—The
term ‘designated plus contribution’ means any elec-
tive deferral which—
HR 10 PCS
‘‘(A) is excludable from gross income of an
employee without regard to this section, and
‘‘(B) the employee designates (at such time
and in such manner as the Secretary may pre-
scribe) as not being so excludable.
‘‘(2) DESIGNATION
LIMITS.—The amount of
elective deferrals which an employee may designate
under paragraph (1) shall not exceed the excess (if
any) of—
‘‘(A) the maximum amount of elective de-
ferrals excludable from gross income of the em-
ployee for the taxable year (without regard to
this section), over
‘‘(B) the aggregate amount of elective de-
ferrals of the employee for the taxable year
which the employee does not designate under
paragraph (1).
‘‘(3) ROLLOVER CONTRIBUTIONS.—
‘‘(A) IN
GENERAL.—A rollover contribu-
tion of any payment or distribution from a des-
ignated plus account which is otherwise allow-
able under this chapter may be made only if the
contribution is to—
HR 10 PCS
‘‘(i) another designated plus account
of the individual from whose account the
payment or distribution was made, or
‘‘(ii) a Roth IRA of such individual.
‘‘(B) COORDINATION
WITH
LIMIT.—Any
rollover contribution to a designated plus ac-
count under subparagraph (A) shall not be
taken into account for purposes of paragraph
(1).
‘‘(d) DISTRIBUTION RULES.—For purposes of this
title—
‘‘(1) EXCLUSION.—Any qualified distribution
from a designated plus account shall not be includ-
ible in gross income.
‘‘(2) QUALIFIED DISTRIBUTION.—For purposes
of this subsection—
‘‘(A) IN
GENERAL.—The term ‘qualified
distribution’ has the meaning given such term
by section 408A(d)(2)(A) (without regard to
clause (iv) thereof).
‘‘(B) DISTRIBUTIONS WITHIN NONEXCLU-
SION PERIOD.—A payment or distribution from
a designated plus account shall not be treated
as a qualified distribution if such payment or
HR 10 PCS
distribution is made within the 5-taxable-year
period beginning with the earlier of—
‘‘(i) the first taxable year for which
the individual made a designated plus con-
tribution to any designated plus account
established for such individual under the
same applicable retirement plan, or
‘‘(ii) if a rollover contribution was
made to such designated plus account from
a designated plus account previously estab-
lished for such individual under another
applicable retirement plan, the first taxable
year for which the individual made a des-
ignated plus contribution to such pre-
viously established account.
‘‘(C) DISTRIBUTIONS OF EXCESS DEFER-
RALS
AND
CONTRIBUTIONS
AND
EARNINGS
THEREON.—The term ‘qualified distribution’
shall not include any distribution of an excess
deferral under section 402(g)(2) or any excess
contribution under section 401(k)(8), and any
income on the excess deferral or contribution.
‘‘(3) TREATMENT OF DISTRIBUTIONS OF CER-
TAIN EXCESS DEFERRALS.—Notwithstanding section
72, if any excess deferral under section 402(g)(2) at-
HR 10 PCS
tributable to a designated plus contribution is not
distributed on or before the 1st April 15 following
the close of the taxable year in which such excess de-
ferral is made, the amount of such excess deferral
shall—
‘‘(A) not be treated as investment in the
contract, and
‘‘(B) be included in gross income for the
taxable year in which such excess is distributed.
‘‘(4) AGGREGATION RULES.—Section 72 shall
be applied separately with respect to distributions
and payments from a designated plus account and
other distributions and payments from the plan.
‘‘(e) OTHER DEFINITIONS.—For purposes of this
section—
‘‘(1) APPLICABLE
RETIREMENT
PLAN.—The
term ‘applicable retirement plan’ means—
‘‘(A) an employees’ trust described in sec-
tion 401(a) which is exempt from tax under
section 501(a), and
‘‘(B) a plan under which amounts are con-
tributed by an individual’s employer for an an-
nuity contract described in section 403(b).
HR 10 PCS
‘‘(2) ELECTIVE DEFERRAL.—The term ‘elective
deferral’ means any elective deferral described in
subparagraph (A) or (C) of section 402(g)(3).’’.
(b) EXCESS DEFERRALS.—Section 402(g) (relating
to limitation on exclusion for elective deferrals) is
amended—
(1) by adding at the end of paragraph (1)(A)
(as added by section 201(d)(1)) the following new
sentence: ‘‘The preceding sentence shall not apply to
so much of such excess as does not exceed the des-
ignated plus contributions of the individual for the
taxable year.’’; and
(2) by inserting ‘‘(or would be included but for
the last sentence thereof)’’ after ‘‘paragraph (1)’’ in
paragraph (2)(A).
(c) ROLLOVERS.—Subparagraph (B) of section
402(c)(8) is amended by adding at the end the following:
‘‘If any portion of an eligible rollover distribu-
tion is attributable to payments or distributions
from a designated plus account (as defined in
section 402A), an eligible retirement plan with
respect to such portion shall include only an-
other designated plus account and a Roth
IRA.’’.
(d) REPORTING REQUIREMENTS.—
HR 10 PCS
(1) W–2 INFORMATION.—Section 6051(a)(8) is
amended by inserting ‘‘, including the amount of
designated plus contributions (as defined in section
402A)’’ before the comma at the end.
(2) INFORMATION.—Section 6047 is amended
by redesignating subsection (f) as subsection (g) and
by inserting after subsection (e) the following new
subsection:
‘‘(f) DESIGNATED PLUS CONTRIBUTIONS.—The Sec-
retary shall require the plan administrator of each applica-
ble retirement plan (as defined in section 402A) to make
such returns and reports regarding designated plus con-
tributions (as so defined) to the Secretary, participants
and beneficiaries of the plan, and such other persons as
the Secretary may prescribe.’’.
(e) CONFORMING AMENDMENTS.—
(1) Section 408A(e) is amended by adding after
the first sentence the following new sentence: ‘‘Such
term includes a rollover contribution described in
section 402A(c)(3)(A).’’.
(2) The table of sections for subpart A of part
I of subchapter D of chapter 1 is amended by insert-
ing after the item relating to section 402 the fol-
lowing new item:
‘‘Sec. 402A. Optional treatment of elective deferrals as plus con-
tributions.’’.
HR 10 PCS
(f) EFFECTIVE DATE.—The amendments made by
this section shall apply to taxable years beginning after
December 31, 2001.
SEC. 209. AVAILABILITY OF QUALIFIED PLANS TO SELF-EM-
PLOYED INDIVIDUALS WHO ARE EXEMPT
FROM THE SELF-EMPLOYMENT TAX BY REA-
SON OF THEIR RELIGIOUS BELIEFS.
(a) IN GENERAL.—Subparagraph (A) of section
401(c)(2) (defining earned income) is amended by adding
at the end thereof the following new sentence: ‘‘For pur-
poses of this part only (other than sections 419 and
419A), this subparagraph shall be applied as if the term
‘trade or business’ for purposes of section 1402 included
service described in section 1402(c)(6).’’.
(b) SIMPLE RETIREMENT ACCOUNTS.—Clause (ii) of
section 408(p)(6)(A) (defining self-employed) is amended
by adding at the end the following new sentence: ‘‘The
preceding sentence shall be applied as if the term ‘trade
or business’ for purposes of section 1402 included service
described in section 1402(c)(6).’’.
(c) EFFECTIVE DATE.—The amendments made by
this section shall apply to taxable years beginning after
December 31, 2001.
HR 10 PCS
SEC. 210. CERTAIN NONRESIDENT ALIENS EXCLUDED IN
APPLYING MINIMUM COVERAGE REQUIRE-
MENTS.
(a) IN GENERAL.—Subparagraph (C) of section
410(b)(3) (relating to exclusion of certain employees) is
amended by inserting ‘‘, determined without regard to the
reference to subchapter D in the last sentence thereof’’
after ‘‘section 861(a)(3)’’.
(b) EFFECTIVE DATE.—The amendment made by
subsection (a) shall apply to plan years beginning after
December 31, 2001.
TITLE III—ENHANCING
FAIRNESS FOR WOMEN
SEC. 301. CATCH-UP CONTRIBUTIONS FOR INDIVIDUALS
AGE 50 OR OVER.
(a) IN GENERAL.—Section 414 (relating to defini-
tions and special rules) is amended by adding at the end
the following new subsection:
‘‘(v) CATCH-UP CONTRIBUTIONS FOR INDIVIDUALS
AGE 50 OR OVER.—
‘‘(1) IN
GENERAL.—An applicable employer
plan shall not be treated as failing to meet any re-
quirement of this title solely because the plan per-
mits an eligible participant to make additional elec-
tive deferrals in any plan year.
HR 10 PCS
‘‘(2) LIMITATION ON AMOUNT OF ADDITIONAL
DEFERRALS.—A plan shall not permit additional
elective deferrals under paragraph (1) for any year
in an amount greater than the lesser of—
‘‘(A) $5,000, or
‘‘(B) the excess (if any) of—
‘‘(i) the participant’s compensation for
the year, over
‘‘(ii) any other elective deferrals of the
participant for such year which are made
without regard to this subsection.
‘‘(3) TREATMENT OF CONTRIBUTIONS.—In the
case of any contribution to a plan under paragraph
(1), such contribution shall not, with respect to the
year in which the contribution is made—
‘‘(A) be subject to any otherwise applicable
limitation 
contained 
in 
section 
402(g),
402(h)(2), 404(a), 404(h), 408(p)(2)(A)(ii),
415, or 457, or
‘‘(B) be taken into account in applying
such limitations to other contributions or bene-
fits under such plan or any other such plan.
‘‘(4) APPLICATION
OF
NONDISCRIMINATION
RULES.—
HR 10 PCS
‘‘(A) IN
GENERAL.—An applicable em-
ployer plan shall not be treated as failing to
meet the nondiscrimination requirements under
section 401(a)(4) with respect to benefits,
rights, and features if the plan allows all eligi-
ble participants to make the same election with
respect to the additional elective deferrals under
this subsection.
‘‘(B) AGGREGATION.—For purposes of
subparagraph (A), all plans maintained by em-
ployers who are treated as a single employer
under subsection (b), (c), (m), or (o) of section
414 shall be treated as 1 plan.
‘‘(5) ELIGIBLE PARTICIPANT.—For purposes of
this subsection, the term ‘eligible participant’ means,
with respect to any plan year, a participant in a
plan—
‘‘(A) who has attained the age of 50 before
the close of the plan year, and
‘‘(B) with respect to whom no other elec-
tive deferrals may (without regard to this sub-
section) be made to the plan for the plan year
by reason of the application of any limitation or
other restriction described in paragraph (3) or
HR 10 PCS
comparable limitation contained in the terms of
the plan.
‘‘(6) OTHER
DEFINITIONS
AND
RULES.—For
purposes of this subsection—
‘‘(A) APPLICABLE EMPLOYER PLAN.—The
term ‘applicable employer plan’ means—
‘‘(i) an employees’ trust described in
section 401(a) which is exempt from tax
under section 501(a),
‘‘(ii) a plan under which amounts are
contributed by an individual’s employer for
an annuity contract described in section
403(b),
‘‘(iii) an eligible deferred compensa-
tion plan under section 457 of an eligible
employer 
as 
defined 
in 
section
457(e)(1)(A), and
‘‘(iv) an arrangement meeting the re-
quirements of section 408 (k) or (p).
‘‘(B) ELECTIVE
DEFERRAL.—The term
‘elective deferral’ has the meaning given such
term by subsection (u)(2)(C).
‘‘(C) 
EXCEPTION
FOR
SECTION
457
PLANS.—This subsection shall not apply to an
applicable employer plan described in subpara-
HR 10 PCS
graph (A)(iii) for any year to which section
457(b)(3) applies.
‘‘(D) COST-OF-LIVING
ADJUSTMENT.—In
the case of a year beginning after December 31,
2006, the Secretary shall adjust annually the
$5,000 amount in paragraph (2)(A) for in-
creases in the cost-of-living at the same time
and in the same manner as adjustments under
section 415(d); except that the base period
taken into account shall be the calendar quarter
beginning July 1, 2005, and any increase under
this subparagraph which is not a multiple of
$500 shall be rounded to the next lower mul-
tiple of $500.’’.
(b) EFFECTIVE DATE.—The amendment made by
this section shall apply to contributions in taxable years
beginning after December 31, 2001.
SEC. 302. EQUITABLE TREATMENT FOR CONTRIBUTIONS OF
EMPLOYEES 
TO 
DEFINED 
CONTRIBUTION
PLANS.
(a) EQUITABLE TREATMENT.—
(1) IN GENERAL.—Subparagraph (B) of section
415(c)(1) (relating to limitation for defined con-
tribution plans) is amended by striking ‘‘25 percent’’
and inserting ‘‘100 percent’’.
HR 10 PCS
(2) APPLICATION TO SECTION 403(b).—Section
403(b) is amended—
(A) by striking ‘‘the exclusion allowance
for such taxable year’’ in paragraph (1) and in-
serting ‘‘the applicable limit under section
415’’;
(B) by striking paragraph (2); and
(C) by inserting ‘‘or any amount received
by a former employee after the fifth taxable
year following the taxable year in which such
employee was terminated’’ before the period at
the end of the second sentence of paragraph
(3).
(3) CONFORMING AMENDMENTS.—
(A) Subsection (f) of section 72 is amend-
ed by striking ‘‘section 403(b)(2)(D)(iii))’’ and
inserting ‘‘section 403(b)(2)(D)(iii), as in effect
before the enactment of the Comprehensive Re-
tirement Security and Pension Reform Act of
2001)’’.
(B) Section 404(a)(10)(B) is amended by
striking ‘‘, the exclusion allowance under sec-
tion 403(b)(2),’’.
(C) Section 404(j) is amended by adding
at the end the following new paragraph:
HR 10 PCS
‘‘(3) SPECIAL
RULE
FOR
MONEY
PURCHASE
PLANS.—For purposes of paragraph (1)(B), in the
case of a defined contribution plan which is subject
to the funding standards of section 412, section
415(c)(1)(B) shall be applied by substituting ‘25
percent’ for ‘100 percent’.’’.
(D) Section 415(a)(2) is amended by strik-
ing ‘‘, and the amount of the contribution for
such portion shall reduce the exclusion allow-
ance as provided in section 403(b)(2)’’.
(E) Section 415(c)(3) is amended by add-
ing at the end the following new subparagraph:
‘‘(E) ANNUITY CONTRACTS.—In the case
of an annuity contract described in section
403(b), the term ‘participant’s compensation’
means the participant’s includible compensation
determined under section 403(b)(3).’’.
(F) Section 415(c) is amended by striking
paragraph (4).
(G) Section 415(c)(7) is amended to read
as follows:
‘‘(7) CERTAIN
CONTRIBUTIONS
BY
CHURCH
PLANS NOT TREATED AS EXCEEDING LIMIT.—
‘‘(A) IN GENERAL.—Notwithstanding any
other provision of this subsection, at the elec-
HR 10 PCS
tion of a participant who is an employee of a
church or a convention or association of church-
es, including an organization described in sec-
tion 414(e)(3)(B)(ii), contributions and other
additions for an annuity contract or retirement
income account described in section 403(b) with
respect to such participant, when expressed as
an annual addition to such participant’s ac-
count, shall be treated as not exceeding the lim-
itation of paragraph (1) if such annual addition
is not in excess of $10,000.
‘‘(B) $40,000 AGGREGATE LIMITATION.—
The total amount of additions with respect to
any participant which may be taken into ac-
count for purposes of this subparagraph for all
years may not exceed $40,000.
‘‘(C) ANNUAL ADDITION.—For purposes of
this paragraph, the term ‘annual addition’ has
the meaning given such term by paragraph
(2).’’.
(H) 
Subparagraph 
(B) 
of 
section
402(g)(7) (as redesignated by section 201) is
amended by inserting before the period at the
end the following: ‘‘(as in effect before the en-
HR 10 PCS
actment of the Comprehensive Retirement Se-
curity and Pension Reform Act of 2001)’’.
(I) Section 664(g) is amended—
(i) in paragraph (3)(E) by striking
‘‘limitations under section 415(c)’’ and in-
serting ‘‘applicable limitation under para-
graph (7)’’, and
(ii) by adding at the end the following
new paragraph:
‘‘(7) APPLICABLE LIMITATION.—
‘‘(A) IN GENERAL.—For purposes of para-
graph (3)(E), the applicable limitation under
this paragraph with respect to a participant is
an amount equal to the lesser of—
‘‘(i) $30,000, or
‘‘(ii) 25 percent of the participant’s
compensation 
(as 
defined 
in 
section
415(c)(3)).
‘‘(B) COST-OF-LIVING ADJUSTMENT.—The
Secretary shall adjust annually the $30,000
amount under subparagraph (A)(i) at the same
time and in the same manner as under section
415(d), except that the base period shall be the
calendar quarter beginning October 1, 1993,
and any increase under this subparagraph
HR 10 PCS
which is not a multiple of $5,000 shall be
rounded to the next lowest multiple of $5,000.’’.
(4) EFFECTIVE DATE.—The amendments made
by this subsection shall apply to years beginning
after December 31, 2001.
(b) SPECIAL RULES
FOR SECTIONS 403(b) AND
408.—
(1) IN
GENERAL.—Subsection (k) of section
415 is amended by adding at the end the following
new paragraph:
‘‘(4) SPECIAL
RULES
FOR
SECTIONS 403(B)
AND 408.—For purposes of this section, any annuity
contract described in section 403(b) for the benefit
of a participant shall be treated as a defined con-
tribution plan maintained by each employer with re-
spect to which the participant has the control re-
quired under subsection (b) or (c) of section 414 (as
modified by subsection (h)). For purposes of this
section, any contribution by an employer to a sim-
plified employee pension plan for an individual for a
taxable year shall be treated as an employer con-
tribution to a defined contribution plan for such in-
dividual for such year.’’.
(2) EFFECTIVE DATE.—
HR 10 PCS
(A) IN GENERAL.—The amendment made
by paragraph (1) shall apply to limitation years
beginning after December 31, 1999.
(B) EXCLUSION
ALLOWANCE.—Effective
for limitation years beginning in 2000, in the
case of any annuity contract described in sec-
tion 403(b) of the Internal Revenue Code of
1986, the amount of the contribution disquali-
fied by reason of section 415(g) of such Code
shall reduce the exclusion allowance as provided
in section 403(b)(2) of such Code.
(3) MODIFICATION OF 403(b) EXCLUSION AL-
LOWANCE TO CONFORM TO 415 MODIFICATION.—The
Secretary of the Treasury shall modify the regula-
tions regarding the exclusion allowance under section
403(b)(2) of the Internal Revenue Code of 1986 to
render void the requirement that contributions to a
defined benefit pension plan be treated as previously
excluded amounts for purposes of the exclusion al-
lowance. For taxable years beginning after Decem-
ber 31, 1999, such regulations shall be applied as if
such requirement were void.
(c) DEFERRED COMPENSATION PLANS
OF STATE
AND LOCAL GOVERNMENTS AND TAX-EXEMPT ORGANI-
ZATIONS.—
HR 10 PCS
The nonforfeitable
‘‘Years of service:
percentage is:
2 ...................................................................................
3 ...................................................................................
4 ...................................................................................
5 ...................................................................................
6 ...................................................................................
100.’’.
(b) AMENDMENT OF ERISA.—Section 203(a) of the
Employee Retirement Income Security Act of 1974 (29
U.S.C. 1053(a)) is amended—
(1) in paragraph (2), in the matter preceding
subparagraph (A), by striking ‘‘A plan’’ and insert-
ing ‘‘Except as provided in paragraph (4), a plan’’,
and
(2) by adding at the end the following:
‘‘(4) In the case of matching contributions (as
defined in section 401(m)(4)(A) of the Internal Rev-
enue Code of 1986), paragraph (2) shall be
applied—
‘‘(A) by substituting ‘3 years’ for ‘5 years’
in subparagraph (A), and
‘‘(B) by substituting the following table for
the table contained in subparagraph (B):
The nonforfeitable
‘‘Years of service:
percentage is:
2 ...................................................................................
3 ...................................................................................
4 ...................................................................................
5 ...................................................................................
6 ...................................................................................
100.’’.
(c) EFFECTIVE DATES.—
HR 10 PCS
(1) IN GENERAL.—Except as provided in para-
graph (2), the amendments made by this section
shall apply to contributions for plan years beginning
after December 31, 2001.
(2) COLLECTIVE BARGAINING AGREEMENTS.—
In the case of a plan maintained pursuant to one or
more collective bargaining agreements between em-
ployee representatives and one or more employers
ratified by the date of the enactment of this Act, the
amendments made by this section shall not apply to
contributions on behalf of employees covered by any
such agreement for plan years beginning before the
earlier of—
(A) the later of—
(i) the date on which the last of such
collective bargaining agreements termi-
nates (determined without regard to any
extension thereof on or after such date of
the enactment); or
(ii) January 1, 2002; or
(B) January 1, 2006.
(3) SERVICE REQUIRED.—With respect to any
plan, the amendments made by this section shall not
apply to any employee before the date that such em-
ployee has 1 hour of service under such plan in any
HR 10 PCS
plan year to which the amendments made by this
section apply.
SEC. 304. MODIFICATIONS TO MINIMUM DISTRIBUTION
RULES.
(a) LIFE EXPECTANCY TABLES.—The Secretary of
the Treasury shall modify the life expectancy tables under
the regulations relating to minimum distribution require-
ments under sections 401(a)(9), 408(a)(6) and (b)(3),
403(b)(10), and 457(d)(2) of the Internal Revenue Code
to reflect current life expectancy.
(b) REPEAL OF RULE WHERE DISTRIBUTIONS HAD
BEGUN BEFORE DEATH OCCURS.—
(1) IN GENERAL.—Subparagraph (B) of section
401(a)(9) is amended by striking clause (i) and re-
designating clauses (ii), (iii), and (iv) as clauses (i),
(ii), and (iii), respectively.
(2) CONFORMING CHANGES.—
(A) Clause (i) of section 401(a)(9)(B) (as
so redesignated) is amended—
(i) by striking ‘‘FOR OTHER CASES’’ in
the heading; and
(ii) by striking ‘‘the distribution of the
employee’s interest has begun in accord-
ance with subparagraph (A)(ii)’’ and in-
HR 10 PCS
serting ‘‘his entire interest has been dis-
tributed to him’’.
(B) Clause (ii) of section 401(a)(9)(B) (as
so redesignated) is amended by striking ‘‘clause
(ii)’’ and inserting ‘‘clause (i)’’.
(C) Clause (iii) of section 401(a)(9)(B) (as
so redesignated) is amended—
(i) by striking ‘‘clause (iii)(I)’’ and in-
serting ‘‘clause (ii)(I)’’;
(ii) by striking ‘‘clause (iii)(III)’’ in
subclause 
(I) 
and 
inserting 
‘‘clause
(ii)(III)’’;
(iii) by striking ‘‘the date on which
the employee would have attained age
701⁄2,’’ in subclause (I) and inserting
‘‘April 1 of the calendar year following the
calendar year in which the spouse attains
701⁄2,’’; and
(iv) by striking ‘‘the distributions to
such spouse begin,’’ in subclause (II) and
inserting ‘‘his entire interest has been dis-
tributed to him,’’.
(3) EFFECTIVE DATE.—
(A) IN GENERAL.—Except as provided in
subparagraph (B), the amendments made by
HR 10 PCS
this subsection shall apply to years beginning
after December 31, 2001.
(B) 
DISTRIBUTIONS
TO
SURVIVING
SPOUSE.—
(i) IN GENERAL.—In the case of an
employee described in clause (ii), distribu-
tions to the surviving spouse of the em-
ployee shall not be required to commence
prior to the date on which such distribu-
tions would have been required to begin
under section 401(a)(9)(B) of the Internal
Revenue Code of 1986 (as in effect on the
day before the date of the enactment of
this Act).
(ii) CERTAIN
EMPLOYEES.—An em-
ployee is described in this clause if such
employee dies before—
(I) the date of the enactment of
this Act, and
(II) the required beginning date
(within 
the 
meaning 
of 
section
401(a)(9)(C) of the Internal Revenue
Code of 1986) of the employee.
(c) REDUCTION IN EXCISE TAX.—
HR 10 PCS
(1) IN
GENERAL.—Subsection (a) of section
4974 is amended by striking ‘‘50 percent’’ and in-
serting ‘‘10 percent’’.
(2) EFFECTIVE DATE.—The amendment made
by this subsection shall apply to years beginning
after December 31, 2001.
SEC. 305. CLARIFICATION OF TAX TREATMENT OF DIVISION
OF SECTION 457 PLAN BENEFITS UPON DI-
VORCE.
(a) IN GENERAL.—Section 414(p)(11) (relating to
application of rules to governmental and church plans) is
amended—
(1) by inserting ‘‘or an eligible deferred com-
pensation plan (within the meaning of section
457(b))’’ after ‘‘subsection (e))’’; and
(2) in the heading, by striking ‘‘GOVERN-
MENTAL AND CHURCH PLANS’’ and inserting ‘‘CER-
TAIN OTHER PLANS’’.
(b) WAIVER OF CERTAIN DISTRIBUTION REQUIRE-
MENTS.—Paragraph (10) of section 414(p) is amended by
striking ‘‘and section 409(d)’’ and inserting ‘‘section
409(d), and section 457(d)’’.
(c) TAX TREATMENT OF PAYMENTS FROM A SEC-
TION 457 PLAN.—Subsection (p) of section 414 is amend-
ed by redesignating paragraph (12) as paragraph (13) and
HR 10 PCS
inserting after paragraph (11) the following new para-
graph:
‘‘(12) TAX TREATMENT OF PAYMENTS FROM A
SECTION 457 PLAN.—If a distribution or payment
from an eligible deferred compensation plan de-
scribed in section 457(b) is made pursuant to a
qualified domestic relations order, rules similar to
the rules of section 402(e)(1)(A) shall apply to such
distribution or payment.’’.
(d) EFFECTIVE DATE.—The amendments made by
this section shall apply to transfers, distributions, and
payments made after December 31, 2001.
SEC. 306. PROVISIONS RELATING TO HARDSHIP DISTRIBU-
TIONS.
(a) SAFE HARBOR RELIEF.—
(1) IN GENERAL.—The Secretary of the Treas-
ury shall revise the regulations relating to hardship
distributions under section 401(k)(2)(B)(i)(IV) of
the Internal Revenue Code of 1986 to provide that
the period an employee is prohibited from making
elective and employee contributions in order for a
distribution to be deemed necessary to satisfy finan-
cial need shall be equal to 6 months.
HR 10 PCS
(2) EFFECTIVE DATE.—The revised regulations
under this subsection shall apply to years beginning
after December 31, 2001.
(b) HARDSHIP DISTRIBUTIONS NOT TREATED AS
ELIGIBLE ROLLOVER DISTRIBUTIONS.—
(1) MODIFICATION OF DEFINITION OF ELIGI-
BLE
ROLLOVER.—Subparagraph (C) of section
402(c)(4) (relating to eligible rollover distribution) is
amended to read as follows:
‘‘(C) any distribution which is made upon
hardship of the employee.’’.
(2) EFFECTIVE DATE.—The amendment made
by this subsection shall apply to distributions made
after December 31, 2001.
SEC. 307. WAIVER OF TAX ON NONDEDUCTIBLE CONTRIBU-
TIONS FOR DOMESTIC OR SIMILAR WORKERS.
(a) IN GENERAL.—Section 4972(c)(6) (relating to
exceptions to nondeductible contributions), as amended by
section 502, is amended by striking ‘‘or’’ at the end of
subparagraph (A), by striking the period and inserting ‘‘,
and’’ at the end of subparagraph (B), and by inserting
after subparagraph (B) the following new subparagraph:
‘‘(C) so much of the contributions to a
simple retirement account (within the meaning
of section 408(p)) or a simple plan (within the
HR 10 PCS
meaning of section 401(k)(11)) which are not
deductible when contributed solely because such
contributions are not made in connection with
a trade or business of the employer.’’.
(b) EXCLUSION OF CERTAIN CONTRIBUTIONS.—Sec-
tion 4972(c)(6) is amended by adding at the end the fol-
lowing new sentence: ‘‘Subparagraph (C) shall not apply
to contributions made on behalf of the employer or a mem-
ber of the employer’s family (as defined in section
447(e)(1)).’’.
(c) NO INFERENCE.—Nothing in the amendments
made by this section shall be construed to infer the proper
treatment of nondeductible contributions under the laws
in effect before such amendments.
(d) EFFECTIVE DATE.—The amendments made by
this section shall apply to taxable years beginning after
December 31, 2001.
TITLE 
IV—INCREASING 
PORT-
ABILITY FOR PARTICIPANTS
SEC. 401. ROLLOVERS ALLOWED AMONG VARIOUS TYPES
OF PLANS.
(a) ROLLOVERS
FROM
AND
TO
SECTION
457
PLANS.—
(1) ROLLOVERS FROM SECTION 457 PLANS.—
HR 10 PCS
(A) IN GENERAL.—Section 457(e) (relat-
ing to other definitions and special rules) is
amended by adding at the end the following:
‘‘(16) ROLLOVER AMOUNTS.—
‘‘(A) GENERAL RULE.—In the case of an
eligible deferred compensation plan established
and maintained by an employer described in
subsection (e)(1)(A), if—
‘‘(i) any portion of the balance to the
credit of an employee in such plan is paid
to such employee in an eligible rollover dis-
tribution (within the meaning of section
402(c)(4) without regard to subparagraph
(C) thereof),
‘‘(ii) the employee transfers any por-
tion of the property such employee receives
in such distribution to an eligible retire-
ment 
plan 
described 
in 
section
402(c)(8)(B), and
‘‘(iii) in the case of a distribution of
property other than money, the amount so
transferred consists of the property distrib-
uted,
HR 10 PCS
then such distribution (to the extent so trans-
ferred) shall not be includible in gross income
for the taxable year in which paid.
‘‘(B) CERTAIN
RULES
MADE
APPLICA-
BLE.—The rules of paragraphs (2) through (7)
(other than paragraph (4)(C)) and (9) of sec-
tion 402(c) and section 402(f) shall apply for
purposes of subparagraph (A).
‘‘(C) REPORTING.—Rollovers under this
paragraph shall be reported to the Secretary in
the same manner as rollovers from qualified re-
tirement 
plans 
(as 
defined 
in 
section
4974(c)).’’.
(B) DEFERRAL LIMIT DETERMINED WITH-
OUT REGARD TO ROLLOVER AMOUNTS.—Section
457(b)(2) (defining eligible deferred compensa-
tion plan) is amended by inserting ‘‘(other than
rollover amounts)’’ after ‘‘taxable year’’.
(C) DIRECT ROLLOVER.—Paragraph (1) of
section 457(d) is amended by striking ‘‘and’’ at
the end of subparagraph (A), by striking the
period at the end of subparagraph (B) and in-
serting ‘‘, and’’, and by inserting after subpara-
graph (B) the following:
HR 10 PCS
‘‘(C) in the case of a plan maintained by
an employer described in subsection (e)(1)(A),
the plan meets requirements similar to the re-
quirements of section 401(a)(31).
Any amount transferred in a direct trustee-to-trust-
ee transfer in accordance with section 401(a)(31)
shall not be includible in gross income for the tax-
able year of transfer.’’.
(D) WITHHOLDING.—
(i) Paragraph (12) of section 3401(a)
is amended by adding at the end the fol-
lowing:
‘‘(E) under or to an eligible deferred com-
pensation plan which, at the time of such pay-
ment, is a plan described in section 457(b)
maintained by an employer described in section
457(e)(1)(A); or’’.
(ii) Paragraph (3) of section 3405(c)
is amended to read as follows:
‘‘(3) ELIGIBLE ROLLOVER DISTRIBUTION.—For
purposes of this subsection, the term ‘eligible roll-
over distribution’ has the meaning given such term
by section 402(f)(2)(A).’’.
(iii) LIABILITY FOR WITHHOLDING.—
Subparagraph (B) of section 3405(d)(2) is
HR 10 PCS
‘‘(3)(A) An applicable pension plan to which para-
graph (1) applies shall not be treated as meeting the re-
quirements of such paragraph unless, in addition to any
notice required to be provided to an individual or organiza-
tion under such paragraph, the plan administrator pro-
vides the notice described in subparagraph (B) to each ap-
plicable individual (and to each employee organization rep-
resenting applicable individuals).
‘‘(B) The notice required by subparagraph (A) shall
be written in a manner calculated to be understood by the
average plan participant and shall provide sufficient infor-
mation (as determined in accordance with regulations pre-
scribed by the Secretary of the Treasury) to allow applica-
ble individuals to understand the effect of the plan amend-
ment. The Secretary of the Treasury may provide a sim-
plified form of notice for, or exempt from any notice re-
quirement, a plan—
‘‘(i) which has fewer than 100 participants who
have accrued a benefit under the plan, or
‘‘(ii) which offers participants the option to
choose between the new benefit formula and the old
benefit formula.
‘‘(C) Except as provided in regulations prescribed by
the Secretary of the Treasury, the notice required by sub-
Calendar No. 69
107TH CONGRESS
1ST SESSION
H. R. 10
AN ACT
To provide for pension reform, and for other
purposes.
JUNE 7, 2001
Read the second time and placed on the calendar