I
104TH CONGRESS
2D SESSION
H. R. 4005
To amend title I of the Employee Retirement Income Security Act of 1974
and the Internal Revenue Code of 1986 to promote availability of private
pensions upon retirement.
IN THE HOUSE OF REPRESENTATIVES
AUGUST 2, 1996
Mr. SCHUMER introduced the following bill; which was referred to the Com-
mittee on Economic and Educational Opportunities, and in addition to
the Committee on Ways and Means, for a period to be subsequently de-
termined by the Speaker, in each case for consideration of such provisions
as fall within the jurisdiction of the committee concerned
A BILL
To amend title I of the Employee Retirement Income Secu-
rity Act of 1974 and the Internal Revenue Code of
1986 to promote availability of private pensions upon
retirement.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Pension Choice and
Security Act of 1996’’.
SEC. 2. AVAILABILITY OF DEFINED CONTRIBUTION PLAN
OPTION FOR PARTICIPANTS IN DEFINED
BENEFIT PLANS.
(a) AMENDMENT TO THE EMPLOYEE RETIREMENT
INCOME SECURITY ACT OF 1974.—Section 206 of the
Employee Retirement Income Security Act of 1974 (29
U.S.C. 1056) is amended by adding at the end the follow-
ing new subsection:
‘‘(g) AVAILABILITY
OF DEFINED CONTRIBUTION
PLAN OPTION FOR PARTICIPANTS IN DEFINED BENEFIT
PLANS.—
‘‘(1) IN GENERAL.—Each defined benefit plan
to which an employer makes contributions shall pro-
vide (in such form and manner as may be provided
in regulations prescribed jointly by the Secretary
and the Secretary of the Treasury) for an oppor-
tunity for each participant employed by such em-
ployer to elect, in lieu of coverage under the defined
benefit plan and before any election made by the em-
ployer under such plan pursuant to subsection (c),
coverage under a defined contribution plan main-
tained in whole or in part by the participant’s em-
ployer. An employer making contributions to a de-
fined benefit plan shall maintain for his employees
a defined contribution plan to the extent necessary
to provide for coverage under such defined contribu-
tion plan pursuant to elections under this sub-
section.
‘‘(2) REQUIRED LEVEL OF CONTRIBUTIONS.—
The requirements of paragraph (1) shall not be
treated as met unless the defined contribution plan
with respect to which an election is made under
paragraph (1) provides for contributions (other than
employee contributions (if any)) at least equivalent
to the contributions (other than employee contribu-
tions (if any)) provided for under the terms of the
defined benefit plan.
‘‘(3) REQUIRED
ELECTION
PERIOD.—The re-
quirements of paragraph (1) shall not be treated as
met unless the defined benefit plan provides that an
election under paragraph (1) may be made at any
time during the 90-day period beginning with the
later of—
‘‘(A) the commencement of the first plan
year to which this subsection applies, or
‘‘(B) the commencement of the employee’s
service under the plan.’’.
(b) AMENDMENTS
TO
THE INTERNAL REVENUE
CODE OF 1986.—Subsection (a) of section 401 of the In-
ternal Revenue Code of 1986 (relating to requirements for
qualification) is amended by inserting after paragraph
(34) the following new paragraph:
‘‘(35) AVAILABILITY
OF
DEFINED
CONTRIBU-
TION PLAN OPTION FOR PARTICIPANTS IN DEFINED
BENEFIT PLANS.—
‘‘(A) IN
GENERAL.—A trust forming a
part of a defined benefit plan to which an em-
ployer makes contributions shall not constitute
a qualified trust under this section unless—
‘‘(i) the plan provides (in such form
and manner as may be provided in regula-
tions prescribed jointly by the Secretary
and the Secretary of Labor) for an oppor-
tunity for each participant employed by
such employer to elect, in lieu of coverage
under the defined benefit plan and before
any election made by the employer under
such plan pursuant to section 417, cov-
erage under a defined contribution plan
maintained in whole or in part by the par-
ticipant’s employer, and
‘‘(ii) the defined benefit plan provides
that each employer making contributions
to the plan maintains for his employees a
defined contribution plan to the extent nec-