tion previously available under another defined
contribution plan (in this subparagraph referred
to as the ‘transferor plan’) to the extent that—
‘‘(i) the forms of distribution pre-
viously available under the transferor plan
applied to the account of a participant or
beneficiary under the transferor plan that
was transferred from the transferor plan to
the transferee plan pursuant to a direct
transfer rather than pursuant to a dis-
tribution from the transferor plan,
‘‘(ii) the terms of both the transferor
plan and the transferee plan authorize the
transfer described in clause (i),
‘‘(iii) the transfer described in clause
(i) was made pursuant to a voluntary elec-
tion by the participant or beneficiary
whose account was transferred to the
transferee plan,
‘‘(iv) the election described in clause
(iii) was made after the participant or ben-
eficiary received a notice describing the
consequences of making the election,
‘‘(v) if the transferor plan provides for
an annuity as the normal form of distribu-
tion under the plan in accordance with sec-
tion 417, the transfer is made with the
consent of the participant’s spouse (if
any), and such consent meets requirements
similar to the requirements imposed by
section 417(a)(2), and
‘‘(vi) the transferee plan allows the
participant or beneficiary described in
clause (iii) to receive any distribution to
which the participant or beneficiary is enti-
tled under transferee plan in the form of
a single sum distribution.’’.
(b) CONFORMING AMENDMENT.—Section 204(g) of
the Employee Retirement Income Security Act of 1974
(29 U.S.C. 1054(g)) is amended by adding at the end the
following new paragraph:
‘‘(4) A defined contribution plan (in this paragraph
referred to as the ‘transferee plan’) shall not be treated
as failing to meet the requirements of this subsection
merely because the transferee plan does not provide some
or all of the forms of distribution previously available
under another defined contribution plan (in this para-
graph referred to as the ‘transferor plan’) to the extent
that—
‘‘(A) the forms of distribution previously avail-
able under the transferor plan applied to the account
of a participant or beneficiary under the transferor
plan that was transferred from the transferor plan
to the transferee plan pursuant to a direct transfer
rather than pursuant to a distribution from the
transferor plan,
‘‘(B) the terms of both the transferor plan and
the transferee plan authorize the transfer described
in subparagraph (A),
‘‘(C) the transfer described in subparagraph
(A) was made pursuant to a voluntary election by
the participant or beneficiary whose account was
transferred to the transferee plan,
‘‘(D) the election described in subparagraph (C)
was made after the participant or beneficiary re-
ceived a notice describing the consequences of mak-
ing the election,
‘‘(E) if the transferor plan provides for an an-
nuity as the normal form of distribution under the
plan in accordance with section 205, the transfer is
made with the consent of the participant’s spouse (if
any), and such consent meets requirements similar
to the requirements imposed by section 205(c)(2),
and
‘‘(F) the transferee plan allows the participant
or beneficiary described in subparagraph (C) to re-
ceive any distribution to which the participant or
beneficiary is entitled under transferee plan in the
form of a single sum distribution.’’.
(b) EFFECTIVE DATE.—The amendments made by
this section shall apply to transfers after December 31,
1998.
SEC. 10. ALLOWANCE OF EMPLOYERS TO DISREGARD
ROLLOVERS FOR PURPOSES OF CASH-OUT
AMOUNTS.
(a) AMENDMENTS TO 1986 CODE.—
(1) Section 411(a)(11) (relating to restrictions
on certain mandatory distributions) is amended by
adding at the end the following:
‘‘(D) SPECIAL RULE FOR ROLLOVER CON-
TRIBUTIONS.—A plan shall not fail to meet the
requirements of this paragraph if, under the
terms of the plan, the present value of the non-
forfeitable accrued benefit is determined with-
out regard to that portion of such benefit which
is attributable to rollover contributions (and
earnings allocable thereto). For purposes of this
subparagraph, the term ‘rollover contributions’
means any rollover contribution under sections
402(c), 403(a)(4), 403(b)(8), clause (ii), (iii),
or (iv) of 408(d)(3)(A), and 457(e)(16).’’.
(2) Clause (i) of section 457(e)(9)(A) is amend-
ed by striking ‘‘such amount’’ and inserting ‘‘the
portion of such amount which is not attributable to
rollover 
contributions 
(as 
defined 
in 
section
411(a)(11)(D))’’.
(b) AMENDMENT TO ERISA.—Section 203(e) of the
Employee Retirement Income Security Act of 1974 (29
U.S.C. 1053(e)) is amended by adding at the end the fol-
lowing:
‘‘(4) A plan shall not fail to meet the requirements
of this subsection if, under the terms of the plan, the
present value of the nonforfeitable accrued benefit is de-
termined without regard to that portion of such benefit
which is attributable to rollover contributions (and earn-
ings allocable thereto). For purposes of this paragraph,
the term ‘rollover contributions’ means any rollover con-
tribution under sections 402(c), 403(a)(4), 403(b)(8),
clause (ii), (iii), or (iv) of 408(d)(3)(A), and 457(e)(16)
of the Internal Revenue Code of 1986.’’.
(c) EFFECTIVE DATE.—The amendments made by
this section shall apply to distributions after December 31,
1998.