105 
(A) Paragraph (6) of section 408(a) of 
such Code is amended by striking ‘‘Under regu-
lations’’ and inserting ‘‘Except as provided in 
subsection (r), under regulations’’. 
(B) Paragraph (3) of section 408(b) of 
such Code is amended by striking ‘‘Under regu-
lations’’ and inserting ‘‘Except as provided in 
subsection (r), under regulations’’. 
(d) EFFECTIVE DATE.— 
(1) IN GENERAL.—Except as provided in para-
graph (2), the amendments made by this section 
shall apply to years beginning after December 31, 
2006. 
(2) TRANSITION.—A plan shall not be treated 
as failing to meet the requirements of section 
401(a)(9) of the Internal Revenue Code of 1986 
merely because, in years beginning after December 
31, 2004, no distribution is made to an employee be-
fore the employee’s required beginning date, as de-
termined in accordance with the amendments made 
by this section. 
SEC. 502. CLARIFICATION OF CATCH-UP CONTRIBUTIONS. 
(a) EXCEPTION TO NONDISCRIMINATION RULES.— 
(1) IN
GENERAL.—Paragraph (4) of section 
414(v) of the Internal Revenue Code of 1986 (relat-
106 
ing to application of nondiscrimination rules) is 
amended by redesignating subparagraph (B) as sub-
paragraph (C) and by inserting after subparagraph 
(A) the following new subparagraph: 
‘‘(B) EXCEPTION.—An applicable employer 
plan shall not fail to satisfy the requirements of 
this subparagraph solely because another appli-
cable employer plan maintained by the employer 
that is qualified under Puerto Rico law does not 
provide for additional elective deferrals under 
this subsection.’’. 
(2) EXCEPTION
TO
AGGREGATION
RULES.— 
Subparagraph (C) of section 414(v)(4) of such Code, 
as redesignated by paragraph (1), is amended by 
adding at the end the following new sentence: ‘‘In 
addition, employees described in section 410(b)(3) 
shall be excluded from consideration. For any year 
in which an employer complies with section 410(b) 
on the basis of separate lines of business pursuant 
to section 410(b)(5), the employer may apply sub-
paragraph (A) for such year separately with respect 
to employees in each separate line of business.’’. 
(b) EFFECTIVE DATE.—The amendments made by 
this section shall take effect as if included in section
107 
631(a) of the Economic Growth and Tax Relief Reconcili-
ation Act of 2001. 
SEC. 503. TREATMENT OF UNCLAIMED BENEFITS. 
(a) AMENDMENTS TO INTERNAL REVENUE CODE OF 
1986.— 
(1) AMENDMENT
TO
SECTION 401(a)(34).— 
Section 401(a)(34) of the Internal Revenue Code of 
1986 (relating to benefits of missing participants) is 
amended to read as follows: 
‘‘(34) UNCLAIMED BENEFITS.—A trust forming 
part of a plan shall not be treated as failing to con-
stitute a qualified trust under this section merely be-
cause the plan of which such trust is a part treats 
unclaimed benefits in a manner that satisfies the re-
quirements of section 414(y).’’. 
(2) AMENDMENT TO SECTION 414.—Section 414 
of such Code (relating to definitions and special 
rules) (as amended by this Act) is amended by add-
ing at the end the following new subsection: 
‘‘(y) UNCLAIMED BENEFITS.— 
‘‘(1) IN GENERAL.—A plan meets the require-
ments of this subsection only if— 
‘‘(A) ONGOING PLANS.—In the case of an 
ongoing plan, the plan provides for one or more
108 
of the following with respect to unclaimed bene-
fits: 
‘‘(i) In the case of an unclaimed ben-
efit to which section 401(a)(31)(B) applies, 
a transfer under section 401(a)(31)(B). 
‘‘(ii) A transfer to the Pension Benefit 
Guaranty Corporation, in accordance with 
section 4050(e) of the Employee Retire-
ment Income Security Act of 1974. 
‘‘(iii) Any other treatment permitted 
under rules prescribed by the Secretary. 
‘‘(B) TERMINATED PLANS.—In the case of 
a terminated plan, the plan provides for the fol-
lowing with respect to unclaimed benefits: 
‘‘(i) DEFINED
BENEFIT
PLANS.—In 
the case of a defined benefit plan, one or 
more of the following: 
‘‘(I) In the case of an unclaimed 
benefit to which section 401(a)(31)(B) 
applies, a transfer under section 
401(a)(31)(B). 
‘‘(II) A transfer of the unclaimed 
benefit to another defined benefit plan 
maintained by the employer.
109 
‘‘(III) The purchase of an annu-
ity contract to provide for an individ-
ual’s unclaimed benefit. 
‘‘(IV) A transfer to the Pension 
Benefit Guaranty Corporation in ac-
cordance with section 4050(a) or 
4050(e) (as applicable) of the Em-
ployee Retirement Income Security 
Act of 1974. 
‘‘(V) Any other treatment per-
mitted under rules prescribed by the 
Secretary. 
‘‘(ii) 
DEFINED
CONTRIBUTION 
PLANS.—In the case of a defined contribu-
tion plan, one or more of the following: 
‘‘(I) In the case of an unclaimed 
benefit to which section 401(a)(31)(B) 
applies, a transfer under section 
401(a)(31)(B). 
‘‘(II) A transfer of the unclaimed 
benefit to another defined contribution 
plan maintained by the employer. 
‘‘(III) The purchase of an annu-
ity contract to provide for an individ-
ual’s unclaimed benefit.
110 
‘‘(IV) A transfer to the Pension 
Benefit Guaranty Corporation in ac-
cordance with section 4050(d) or 
4050(e) (as applicable) of the Em-
ployee Retirement Income Security 
Act of 1974. 
‘‘(V) Any other treatment per-
mitted under rules prescribed by the 
Secretary. 
‘‘(2) TREATMENT OF TRANSFERS TO PENSION 
BENEFIT GUARANTY CORPORATION.— 
‘‘(A) TRANSFERS
TO
PBGC.—Amounts 
transferred from a plan to the Pension Benefit 
Guaranty Corporation pursuant to paragraph 
(1) shall be treated as a transfer under section 
401(a)(31)(A). 
‘‘(B) DISTRIBUTIONS
FROM
PBGC.—Ex-
cept as provided in rules prescribed by the Sec-
retary, amounts distributed by the Pension 
Benefit Guaranty Corporation shall be treated 
as distributed by an individual retirement plan 
under section 408(d) (without regard to para-
graphs (4), (5) and (7) thereof). Rules similar 
to the rules of section 402(c)(4) shall apply.
111 
‘‘(3) DEFINITIONS.—For purposes of this sub-
section— 
‘‘(A) UNCLAIMED
BENEFIT.—The term 
‘unclaimed benefit’ means— 
‘‘(i) any benefit of a participant or 
beneficiary which is distributable under the 
terms of the plan to the participant or ben-
eficiary, if the distribution of the benefit 
has not commenced within 1 year after the 
later of the date on which the benefit first 
became so distributable or the participant’s 
severance from employment; 
‘‘(ii) any benefit or other amount of a 
participant or beneficiary which is distrib-
utable under the terms of the plan with re-
spect to a missing participant; or 
‘‘(iii) any benefit to which section 
401(a)(31)(B) applies or would apply if 
subclause (I) of section 401(a)(31)(B)(i) 
did not require the distribution to exceed 
$1,000. 
A benefit otherwise described in clause (i) shall 
not be treated as an unclaimed benefit under 
clause (i) if the participant or beneficiary elects 
not to have such treatment apply. Any such
112 
participant or beneficiary shall be given reason-
able notice of the opportunity to make such an 
election. If the participant or beneficiary fails to 
make such an election within a reasonable pe-
riod specified in the notice, any subsequent elec-
tion shall not be given effect and the benefit 
shall be treated as an unclaimed benefit. A no-
tice mailed to the last known address of the 
participant or beneficiary shall be treated as a 
notice to the participant or beneficiary for pur-
poses of this paragraph. 
‘‘(B) ONGOING PLAN.—The term ‘ongoing 
plan’ means any plan which has neither termi-
nated nor is in the process of terminating. 
‘‘(C) TERMINATED PLAN.—The term ‘ter-
minated plan’ means any plan which has termi-
nated or is in the process of terminating. 
‘‘(D) MISSING
PARTICIPANT.—The term 
‘missing participant’ shall have the meaning 
given to such term by section 4050(b)(1) of the 
Employee Retirement Income Security Act of 
1974.’’. 
(3) CONFORMING AMENDMENT.—Subparagraph 
(B) of section 401(a)(31) of such Code is amended 
by adding at the end the following:
113 
‘‘(iii) 
OTHER
PERMITTED
TRANS-
FERS.—A plan administrator shall be 
treated as having complied with the re-
quirements of this subparagraph if such 
plan administrator complies with the re-
quirements of section 414(y).’’. 
(b) AMENDMENTS TO EMPLOYEE RETIREMENT IN-
COME SECURITY ACT OF 1974.— 
(1) IN
GENERAL.—Subsection (b) of section 
4050 of the Employee Retirement Income Security 
Act of 1974 (29 U.S.C. 1350) is amended by adding 
at the end the following paragraph: 
‘‘(3) UNCLAIMED
BENEFIT.—The term ‘un-
claimed benefit’ means— 
‘‘(A) any benefit of a participant or bene-
ficiary which is distributable under the terms of 
the plan to the participant or beneficiary, if the 
distribution of the benefit has not commenced 
within 1 year after the later of the date on 
which the benefit first became so distributable 
or the participant’s severance from employment; 
‘‘(B) any benefit or other amount of a par-
ticipant or beneficiary which is distributable 
under the terms of the plan with respect to a 
missing participant; or
114 
‘‘(C) 
any 
benefit 
to 
which 
section 
401(a)(31)(B) of the Internal Revenue Code of 
1986 applies or would apply if subclause (I) of 
section 401(a)(31)(B)(i) of such Code did not 
require the distribution to exceed $1,000. 
A benefit otherwise described in subparagraph (A) 
shall not be treated as an unclaimed benefit under 
subparagraph (A) if the participant or beneficiary 
elects not to have such treatment apply. Any such 
participant or beneficiary shall be given reasonable 
notice of the opportunity to make such an election. 
If the participant or beneficiary fails to make such 
an election within a reasonable period specified in 
the notice, any subsequent election shall not be given 
effect and the benefit shall be treated as an un-
claimed benefit. A notice mailed to the last known 
address of the participant or beneficiary shall be 
treated as a notice to the participant or beneficiary 
for purposes of this paragraph.’’. 
(2) OTHER
AMENDMENTS.—Section 4050 of 
such Act is amended by redesignating subsection (c) 
as subsection (f) and by inserting after subsection 
(b) the following new subsections: 
‘‘(c) MULTIEMPLOYER
PLANS.—The corporation 
shall prescribe rules similar to the rules in subsection (a)
115 
for multiemployer plans covered by this title that termi-
nate under section 4041A. 
‘‘(d) PLANS NOT OTHERWISE SUBJECT TO TITLE.— 
‘‘(1) TRANSFER TO CORPORATION.—The plan 
administrator of a plan described in paragraph (4) 
may elect to transfer a missing participant’s benefits 
to the corporation upon termination of the plan. 
‘‘(2) INFORMATION TO THE CORPORATION.—To 
the extent provided in regulations, the plan adminis-
trator of a plan described in paragraph (4) shall, 
upon termination of the plan, provide the corpora-
tion information with respect to the benefits of a 
missing participant if the plan transfers such bene-
fits— 
‘‘(A) to the corporation, or 
‘‘(B) to an entity other than the corpora-
tion or a plan described in paragraph (4)(B)(ii). 
‘‘(3) PAYMENT BY THE CORPORATION.—If ben-
efits of a missing participant were transferred to the 
corporation under paragraph (1), the corporation 
shall, upon location of the participant or beneficiary, 
pay to the participant or beneficiary the amount 
transferred (or the appropriate survivor benefit) ei-
ther— 
‘‘(A) in a single sum (plus interest), or