I
104TH CONGRESS
2D SESSION
H. R. 3104
To amend the Internal Revenue Code of 1986 to provide special rules relating
to veterans’ reemployment rights under the Uniformed Services Employ-
ment and Reemployment Rights Act of 1994.
IN THE HOUSE OF REPRESENTATIVES
MARCH 18, 1996
Mrs. VUCANOVICH introduced the following bill; which was referred to the
Committee on Ways and Means
A BILL
To amend the Internal Revenue Code of 1986 to provide
special rules relating to veterans’ reemployment rights
under the Uniformed Services Employment and Reem-
ployment Rights Act of 1994.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. TREATMENT OF CERTAIN VETERANS’ REEM-
PLOYMENT RIGHTS.
(a) IN GENERAL.—Section 414 of the Internal Reve-
nue Code of 1986 is amended by adding at the end the
following new subsection:
‘‘(u) SPECIAL RULES RELATING TO VETERANS’ RE-
EMPLOYMENT RIGHTS UNDER USERRA.—
‘‘(1) TREATMENT OF CERTAIN CONTRIBUTIONS
MADE
PURSUANT
TO
VETERANS’ REEMPLOYMENT
RIGHTS.—If any contribution is made by an em-
ployer or an employee under an individual account
plan with respect to an employee, or by an employee
to a defined benefit plan that provides for employee
contributions, and such contribution is required by
reason of such employee’s rights under chapter 43 of
title 38, United States Code, resulting from qualified
military service, then—
‘‘(A) such contribution shall not be subject
to any otherwise applicable limitation contained
in section 402(g), 402(h), 403(b), 404(a),
404(h), 408, 415, or 457, and shall not be
taken into account in applying such limitations
to other contributions or benefits under such
plan or any other plan, with respect to the year
in which the contribution is made,
‘‘(B) such contribution shall be subject to
the limitations referred to in subparagraph (A)
with respect to the year to which the contribu-
tion relates (in accordance with rules prescribed
by the Secretary), and
‘‘(C) such plan shall not be treated as fail-
ing to meet the requirements of section
401(a)(4), 401(a)(26), 401(k)(3), 401(k)(11),
401(m), 
403(b)(12), 
408(k)(3), 
408(k)(6),
410(b), or 416 by reason of the making of (or
the right to make) such contribution.
For purposes of the preceding sentence, any elective
deferral or employee contribution made under para-
graph (2) shall be treated as required by reason of
the employee’s rights under such chapter 43.
‘‘(2) REEMPLOYMENT RIGHTS UNDER USERRA
WITH RESPECT TO ELECTIVE DEFERRALS.—
‘‘(A) IN GENERAL.—For purposes of this
subchapter and section 457, if an employee is
entitled to the benefits of chapter 43 of title 38,
United States Code, with respect to any plan
which provides for elective deferrals, the em-
ployer sponsoring the plan shall be treated as
meeting the requirements of such chapter 43
with respect to such elective deferrals only if
such employer—
‘‘(i) permits such employee to make
additional elective deferrals under such
plan (in the amount determined under sub-
paragraph (B) or such lesser amount as is
elected by the employee) during the period
which begins on the date of the reemploy-
ment of such employee with such employer
and has the same length as the lesser of—
‘‘(I) the product of 3 and the pe-
riod of qualified military service which
resulted in such rights, and
‘‘(II) 5 years, and
‘‘(ii) makes a matching contribution
with respect to any additional elective de-
ferral made pursuant to clause (i) which
would have been required had such defer-
ral actually been made during the period of
such qualified military service.
‘‘(B) AMOUNT OF MAKEUP REQUIRED.—
The amount determined under this subpara-
graph with respect to any plan is the maximum
amount of the elective deferrals that the indi-
vidual would have been permitted to make
under the plan in accordance with the limita-
tions referred to in paragraph (1)(A) during the
period of qualified military service if the indi-
vidual had continued to be employed by the em-
ployer during such period and received com-
pensation as determined under paragraph (7).
Proper adjustment shall be made to the amount
determined under the preceding sentence for
any elective deferrals actually made during the
period of such qualified military service.
‘‘(C) ELECTIVE DEFERRAL.—For purposes
of this paragraph, the term ‘elective deferral’
has the meaning given such term by section
402(g)(3); except that such term shall include
any deferral of compensation under an eligible
deferred compensation plan (as defined in sec-
tion 457(b)).
‘‘(D) AFTER-TAX
EMPLOYEE
CONTRIBU-
TIONS.—References in subparagraphs (A) and
(B) to elective deferrals shall be treated as in-
cluding references to employee contributions.
‘‘(3) CERTAIN
RETROACTIVE
ADJUSTMENTS
NOT REQUIRED.—For purposes of this subchapter
and subchapter E, no provision of chapter 43 of title
38, United States Code, shall be construed as re-
quiring—
‘‘(A) any crediting of earnings to an em-
ployee with respect to any contribution before
such contribution is actually made, or
‘‘(B) any allocation of any forfeiture with
respect to the period of qualified military serv-
ice.
‘‘(4) LOAN
REPAYMENT
SUSPENSIONS
PER-
MITTED.—If any plan suspends the obligation to
repay any loan made to an employee from such plan
for any part of any period during which such em-
ployee is performing service in the uniformed serv-
ices (as defined in chapter 43 of title 38, United
States Code), whether or not qualified military serv-
ice, such suspension shall not be taken into account
for purposes of section 72(p), 401(a), or 4975(d)(1).
‘‘(5) QUALIFIED MILITARY SERVICE.—For pur-
poses of this subsection, the term ‘qualified military
service’ means any service in the uniformed services
(as defined in chapter 43 of title 38, United States
Code) by any individual if such individual is entitled
to reemployment rights under such chapter with re-
spect to such service.
‘‘(6) INDIVIDUAL
ACCOUNT
PLAN.—For pur-
poses of this subsection, the term ‘individual account
plan’ means any defined contribution plan (including
any tax-sheltered annuity plan under section 403(b),
any simplified employee pension under section
408(k), and any eligible deferred compensation plan
(as defined in section 457(b)).
‘‘(7) COMPENSATION.—For purposes of sections
403(b)(3), 415(c)(3), and 457(e)(5), an employee
who is in qualified military service shall be treated
as receiving compensation from the employer during
such period of qualified military service equal to—
‘‘(A) the compensation the employee would
have received during such period if the em-
ployee were not in qualified military service, de-
termined based on the rate of pay the employee
would have received from the employer but for
absence during the period of qualified military
service, or
‘‘(B) if the compensation the employee
would have received during such period was not
reasonably certain, the employee’s average com-
pensation from the employer during the 12-
month period immediately preceding the quali-
fied military service (or, if shorter, the period of
employment immediately preceding the qualified
military service).
‘‘(8) USERRA REQUIREMENTS FOR QUALIFIED
RETIREMENT
PLANS.—For purposes of this sub-
chapter and section 457, an employer sponsoring a
retirement plan shall be treated as meeting the re-
quirements of chapter 43 of title 38, United States
Code, only if each of the following requirements is
met:
‘‘(A) An individual reemployed under such
chapter is treated with respect to such plan as
not having incurred a break in service with the
employer maintaining the plan by reason of
such individual’s period of qualified military
service.
‘‘(B) Each period of qualified military
service served by an individual is, upon reem-
ployment under such chapter, deemed with re-
spect to such plan to constitute service with the
employer maintaining the plan for the purpose
of determining the nonforfeitability of the indi-
vidual’s accrued benefits under such plan and
for the purpose of determining the accrual of
benefits under such plan.
‘‘(C) An individual reemployed under such
chapter is entitled to accrued benefits that are
contingent on the making of, or derived from,
employee contributions or elective deferrals only
to the extent the individual makes payment to
the plan with respect to such contributions or
deferrals. No such payment may exceed the
amount the individual would have been per-
mitted or required to contribute had the indi-
vidual remained continuously employed by the
employer throughout the period of qualified
military service. Any payment to such plan shall
be made during the period beginning with the
date of reemployment and whose duration is 3
times the period of the qualified military service
(but not greater than 5 years).
‘‘(9) PLANS NOT SUBJECT TO TITLE 38.—This
subsection shall not apply to any retirement plan to
which chapter 43 of title 38, United States Code,
does not apply.
‘‘(10) REFERENCES.—For purposes of this sec-
tion, any reference to chapter 43 of title 38, United
States Code, shall be treated as a reference to such
chapter as in effect on December 12, 1994 (without
regard to any subsequent amendment).’’
(b) EFFECTIVE DATE.—The amendment made by
this section shall be effective as of December 12, 1994.
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