‘‘(ii) the amount or percentage of the partici-
pant’s benefits to be paid by the plan to each such 
aggrieved State or local government, or the manner 
in which such amount or percentage is to be deter-
mined, 
‘‘(iii) the number of payments or period to 
which such order applies, and 
‘‘(iv) each plan to which such order applies. 
‘‘(D) A qualified embezzlement restitution order 
meets the requirements of this subparagraph only if such 
order—
‘‘(i) does not require a plan to provide any type 
or form of benefit, or any option, not otherwise pro-
vided under the plan, 
‘‘(ii) does not require the plan to provide in-
creased benefits (determined on the basis of actu-
arial value), and 
‘‘(iii) does not require the payment of benefits 
to the government of any State or political subdivi-
sion thereof which are required to be paid to any 
other entity—
‘‘(I) as an aggrieved State or local govern-
ment under another order previously deter-
mined to be a qualified embezzlement restitu-
tion order, or
‘‘(II) as an alternate payee under an order 
previously determined to be a qualified domestic 
relations order (as defined in paragraph 
(3)(B)(i)). 
‘‘(E) The provisions of subparagraphs (E), (G), (H), 
(I), and (M) of paragraph (3) shall apply for purposes of 
this paragraph in the same manner and to the same extent 
as such subparagraphs apply for purposes of paragraph 
(3), except that—
‘‘(i) any reference to a ‘qualified domestic rela-
tions order‘ or a ‘domestic relations order’ shall be 
deemed a reference to a qualified embezzlement res-
titution order or an embezzlement restitution order, 
respectively, and 
‘‘(ii) any reference to an ‘alternate payee’ shall 
be deemed a reference to an aggrieved State or local 
government. 
‘‘(F) Notwithstanding subparagraph (A), paragraph 
(1) shall apply with respect to the creation, assignment, 
or recognition of a right to any benefit payable with re-
spect to a participant pursuant to any embezzlement res-
titution order if the requirements of paragraph (4)(C) are 
met with respect to the plan. In applying paragraph (4)(C) 
and paragraph (5) for purposes of this subparagraph—
‘‘(i) any reference to an ‘offset’ shall be deemed 
a reference to the creation, assignment, or recogni-
tion of a right to any benefit payable with respect 
to the participant pursuant to an embezzlement res-
titution order, 
‘‘(ii) any reference to a ‘judgment, order, de-
cree, or settlement’ to pay an amount to the plan 
shall be deemed a reference to the embezzlement res-
titution order, and 
‘‘(iii) any reference to a ‘violation of part 4’ of 
subtitle B shall be deemed a reference to embezzle-
ment in violation of the applicable laws of the 
United States or of any State or political subdivision 
thereof. 
‘‘(G) For purposes of this paragraph, the term ‘ag-
grieved State or local government’ means, with respect to 
any plan participant, the government of a State or a polit-
ical subdivision thereof that is recognized by an embezzle-
ment restitution order as having a right to receive as res-
titution all, or a portion of, the benefits payable under the 
plan with respect to such participant. 
‘‘(H) This paragraph shall not apply to any plan to 
which paragraph (1) does not apply.
‘‘(I) In prescribing regulations under this paragraph, 
the Secretary shall consult with the Secretary of the 
Treasury.’’. 
(2) CLARIFICATION
OF
PREEMPTION
PROVI-
SION.—Paragraph (7) of section 514(b) of such Act 
(29 U.S.C. 1144(b)(7)) is amended by inserting 
‘‘qualified embezzlement restitution orders (within 
the meaning of section 206(d)(6)(B)(i)),’’ after ‘‘sec-
tion 206(d)(3)(B)(i)),’’. 
(b) AMENDMENTS
TO
THE INTERNAL REVENUE 
CODE OF 1986.—
(1) IN GENERAL.—Paragraph (13) of section 
401(a) of the Internal Revenue Code of 1986 (relat-
ing to assignment and alienation) is amended by 
adding at the end the following new subparagraph: 
‘‘(E) SPECIAL RULES FOR QUALIFIED EM-
BEZZLEMENT
RESTITUTION
ORDERS.—Sub-
paragraph (A) shall not apply with respect to 
the creation, assignment, or recognition of a 
right to any benefit payable with respect to a 
participant pursuant to an embezzlement res-
titution order, except that subparagraph (A) 
shall not apply if the order is determined to be 
a qualified embezzlement restitution order.’’.