paragraph (A)(i)(I) shall be amortized over a
20-year period.’’
(2) 
CONFORMING
AMENDMENT.—Section
412(c)(7)(D) of such Code is amended by adding
‘‘and’’ at the end of clause (i), by striking ‘‘, and’’
at the end of clause (ii) and inserting a period, and
by striking clause (iii).
(3) EFFECTIVE DATE.—The amendments made
by this subsection shall apply to any unamortized
bases with respect to plan years beginning before,
on, or after December 31, 1997.
SEC. 176. NEW TECHNOLOGIES IN RETIREMENT PLANS.
The Secretary of the Treasury and the Secretary of
Labor shall expand their efforts to examine existing guid-
ance regarding notice, recordkeeping, and operational re-
quirements for retirement plans, in order to permit the
use of new technologies by plan sponsors and administra-
tors in ways which maintain the protection of the rights
of participants and beneficiaries.
TITLE II—SECURITY
SEC. 200. AMENDMENT OF ERISA.
Except as otherwise expressly provided, whenever in
this title an amendment or repeal is expressed in terms
of an amendment to, or repeal of, a section or other provi-
sion, the reference shall be considered to be made to a
section or other provision of the Employee Retirement In-
come Security Act of 1974.
Subtitle A—General Provisions
SEC. 201. SECTION 401(k) INVESTMENT PROTECTION.
(a) LIMITATIONS ON INVESTMENT IN EMPLOYER SE-
CURITIES AND EMPLOYER REAL PROPERTY BY CASH OR
DEFERRED ARRANGEMENTS.—Paragraph (3) of section
407(d) (29 U.S.C. 1107(d)) is amended by adding at the
end the following new subparagraph:
‘‘(D) The term ‘eligible individual account plan’
does not include that portion of an individual ac-
count plan that consists of elective deferrals (as de-
fined in section 402(g)(3) of the Internal Revenue
Code of 1986) pursuant to a qualified cash or de-
ferred arrangement as defined in section 401(k) of
the Internal Revenue Code of 1986 (and earnings
thereon), if such elective deferrals (or earnings
thereon) are required to be invested in qualifying
employer securities or qualifying employer real prop-
erty or both pursuant to the documents and instru-
ments governing the plan or at the direction of a
person other than the participant (or the partici-
pant’s beneficiary) on whose behalf such elective de-
ferrals are made to the plan. For the purposes of
subsection (a), such portion shall be treated as a
separate plan. This subparagraph shall not apply to
an individual account plan if the fair market value
of the assets of all individual account plans main-
tained by the employer equals not more than 10 per-
cent of the fair market value of the assets of all pen-
sion plans maintained by the employer.’’.
(b) EFFECTIVE DATE.—
(1) IN GENERAL.—The amendments made by
this section shall take effect on the date of the en-
actment of this Act.
(2) TRANSITION
RULE
FOR
PLANS
HOLDING
EXCESS SECURITIES OR PROPERTY.—
(A) IN GENERAL.—In the case of a plan
which on the date of the enactment of this Act,
has holdings of employer securities and em-
ployer real property (as defined in section
407(d) of the Employee Retirement Income Se-
curity Act of 1974 (29 U.S.C. 1107(d)) in ex-
cess of the amount specified in such section
407, the amendment made by this section ap-
plies to any acquisition of such securities and
property on or after such date, but does not
apply to the specific holdings which constitute
such excess during the period of such excess.
(B) SPECIAL RULE FOR CERTAIN ACQUISI-
TIONS.—Employer securities and employer real
property acquired pursuant to a binding written
contract to acquire such securities and real
property entered into and in effect on the date
of the enactment of this Act, shall be treated as
acquired immediately before such date.
SEC. 202. REQUIREMENT OF ANNUAL, DETAILED INVEST-
MENT REPORTS APPLIED TO CERTAIN 401(k)
PLANS.
(a) IN GENERAL.—Section 104(b)(3) (29 U.S.C.
1024(b)(3)) is amended—
(1) by inserting ‘‘(A)’’ after ‘‘(3)’’; and
(2) by adding at the end the following new sub-
paragraph:
‘‘(B)(i) If a plan includes a qualified cash or
deferred 
arrangement 
(as 
defined 
in 
section
401(k)(2) of the Internal Revenue Code of 1986)
and is maintained by an employer with less than 100
participants, the administrators shall furnish to each
participant and to each beneficiary receiving benefits
under the plan an annual investment report detail-
ing such information as the Secretary by regulation
shall require.
‘‘(ii) Clause (i) shall not apply with respect to
any participant described in section 404(c).’’.
(b) REGULATIONS.—
(1) IN GENERAL.—The Secretary of Labor, in
prescribing 
regulations 
required 
under 
section
104(b)(3)(B)(i) of the Employee Retirement Income
Security Act of 1974 (29 U.S.C. 1023(b)(3)(B)(i)),
as added by subsection (a), shall consider including
in the information required in an annual investment
report the following:
(A) Total plan assets and liabilities as of
the beginning and ending of the plan year.
(B) Plan income and expenses and con-
tributions made and benefits paid for the plan
year.
(C) Any transaction between the plan and
the employer, any fiduciary, or any 10-percent
owner during the plan year, including the acqui-
sition of any employer security or employer real
property.
(D) Any noncash contributions made to or
purchases of nonpublicly traded securities made
by the plan during the plan year without an ap-
praisal by an independent third party.
In determining the types of information to be in-
cluded in the annual investment report presented to
participants and beneficiaries, the Secretary of
Labor shall take into account the purposes of the di-
versification protection provided to such participants
and beneficiaries by section 407(d)(3)(D) of the Em-
ployee Retirement Income Security Act of 1974 (29
U.S.C. 1107(d)(3)(D)), as added by section 201(a).
(2) ELECTRONIC TRANSFER.—The Secretary of
Labor in prescribing such regulations shall also
make provision for the electronic transfer of the re-
quired annual investment report by a plan adminis-
trator to plan participants and beneficiaries.
(c) EFFECTIVE DATE.—The amendment made by
subsection (a) shall apply to plan years beginning after
the date of the enactment of this Act.
SEC. 203. INFORMATION REQUIRED TO BE PROVIDED TO
INVESTMENT MANAGERS OF 401(k) PLANS.
(a) IN GENERAL.—Section 105 (29 U.S.C. 1025) is
amended by adding at the end the following new sub-
section:
‘‘(e) If—
‘‘(1) the administrator of an individual account
plan described in section 401(k) of the Internal Rev-
enue Code of 1986 provides for investment of the
ings of the study described in subsection (a) and any rec-
ommendations for legislative action.
SEC. 205. QUALIFIED EMPLOYER PLANS PROHIBITED FROM
MAKING LOANS THROUGH CREDIT CARDS
AND OTHER INTERMEDIARIES.
(a) IN GENERAL.—Subsection (a) of section 401 of
the Internal Revenue Code of 1986 is amended by adding
at the end the following new paragraph:
‘‘(35) PROHIBITION OF LOANS THROUGH CRED-
IT CARDS AND OTHER INTERMEDIARIES.—A trust
shall not constitute a qualified trust under this sec-
tion if the plan makes any loan to any beneficiary
under the plan through the use of any credit card
or any other intermediary.’’.
(b) EFFECTIVE DATE.—The amendment made by
subsection (a) shall apply to plan years beginning after
the date of the enactment of this Act.
SEC. 206. MULTIEMPLOYER PLAN BENEFITS GUARANTEED.
(a) IN GENERAL.—Section 4022A(c) (29 U.S.C.
1322a(c)) is amended—
(1) by striking ‘‘$5’’ each place it appears in
paragraph (1) and inserting ‘‘$11’’,
(2) by striking ‘‘$15’’ in paragraph (1) and in-
serting ‘‘$33’’, and
(3) by striking paragraphs (2), (5), and (6) and
by redesignating paragraphs (3) and (4) as para-
graphs (2) and (3), respectively.
(b) EFFECTIVE DATE.—The amendments made by
this section shall apply to any multiemployer plan that has
not received financial assistance (within the meaning of
section 4261 of the Employee Retirement Income Security
Act of 1974) within the 1-year period ending on the date
of the enactment of this Act.
SEC. 207. PROHIBITED TRANSACTIONS.
(a) IN
GENERAL.—Section 502(i) (29 U.S.C.
1132(i)) is amended by striking ‘‘5 percent’’ and inserting
‘‘10 percent’’.
(b) EFFECTIVE DATE.—The amendments made by
this section shall apply to prohibited transactions occur-
ring after the date of the enactment of this Act.
SEC. 208. SUBSTANTIAL OWNER BENEFITS.
(a) MODIFICATION OF PHASE-IN OF GUARANTEE.—
Subparagraphs (B) and (C) of section 4022(b)(5) (29
U.S.C. 1322(b)(5)) are amended to read as follows:
‘‘(B) For purposes of this title, the term ‘majority
owner’ has the same meaning as substantial owner under
subparagraph (A), except that subparagraph (A) shall be
applied by substituting ‘50 percent or more’ for ‘more
than 10 percent’ each place it appears.
‘‘(C) In the case of a participant who is a majority
owner, the amount of benefits guaranteed under this sec-
tion shall not exceed the product of—
‘‘(i) a fraction (not to exceed 1) the numerator
of which is the number of years from the later of the
effective date or the adoption date of the plan to the
termination date, and the denominator of which is
30, and
‘‘(ii) the amount of the majority owner’s month-
ly benefits guaranteed under subsection (a) (as lim-
ited by paragraph (3) of this subsection).’’.
(b) MODIFICATION OF ALLOCATION OF ASSETS.—
(1) 
Section 
4044(a)(4)(B) 
(29 
U.S.C.
1344(a)(4)(B)) is amended by striking ‘‘section
4022(b)(5)’’ and inserting ‘‘section 4022(b)(5)(C)’’.
(2) Section 4044(b) (29 U.S.C. 1344(b)) is
amended—
(A) by striking ‘‘(5)’’ in paragraph (2) and
inserting ‘‘(4), (5),’’, and
(B) 
by 
redesignating 
paragraphs 
(3)
through (6) as paragraphs (4) through (7), re-
spectively, and by inserting after paragraph (2)
the following new paragraph:
‘‘(3) If assets available for allocation under
paragraph (4) of subsection (a) are insufficient to
satisfy in full the benefits of all individuals who are
described in that paragraph, the assets shall be allo-
cated first to benefits described in subparagraph (A)
of that paragraph. Any remaining assets shall then
be allocated to subparagraph (B). If assets allocated
to subparagraph (B) are insufficient to satisfy in full
the benefits in that subparagraph, the assets shall
be allocated pro rata among individuals on the basis
of the present value (as of the termination date) of
their respective benefits described in that subpara-
graph.’’.
(c) EFFECTIVE DATE.—The amendments made by
this section shall apply to plan terminations—
(1) under section 4041(c) of the Employee Re-
tirement Income Security Act of 1974 (29 U.S.C.
1341(c)) with respect to which notices of intent to
terminate are provided under section 4041(a)(2) of
such Act (29 U.S.C. 1341(a)(2)) on or after the
date of the enactment of this Act, or
(2) under section 4042 of such Act (29 U.S.C.
1342) with respect to which proceedings are insti-
tuted by the corporation on or after such date.
SEC. 209. REVERSION REPORT.
(a) IN GENERAL.—Section 4008 (29 U.S.C. 1308)
is amended by adding at the end the following new sub-
section:
‘‘(b) REVERSION REPORT.—As soon as practicable
after the close of each fiscal year, the Secretary of Labor
(acting in the Secretary’s capacity as chairman of the cor-
poration’s board) shall transmit to the President and the
Congress a report providing information on plans from
which residual assets were distributed to employers pursu-
ant to section 4044(d).’’.
(b) CONFORMING AMENDMENT.—Section 4008 (29
U.S.C. 1308) is amended by striking ‘‘SEC. 4008.’’ and
inserting ‘‘SEC. 4008. (a) ANNUAL REPORT.—’’.
(c) EFFECTIVE DATE.—The amendments made by
this section shall apply to fiscal years beginning after Sep-
tember 30, 1996.
SEC. 210. DEVELOPMENT OF ADDITIONAL REMEDIES.
(a) FINDINGS.—The Congress finds that—
(1) the provisions of this Act, like many of
those proposed by the President and recently signed
into law, are designed to expand retirement savings;
(2) this goal can be achieved in part by sim-
plifying the pension system and reducing administra-
tive costs of maintaining pension plans for all em-
ployers;
(3) such simplification can benefit not only the
implementation and ongoing administration of pen-
sion plans but also the correction of problems that
arise in the operation of such plans;
(4) the Secretary of the Treasury has com-
mendably already acted to develop programs in-
tended to facilitate such corrections; and
(5) efficient correction serves participants and
beneficiaries not only by fulfilling the law’s require-
ments regarding pension plans but also by directing
funds into plans rather than toward correction ef-
forts and by encouraging employers to continue to
sponsor support for such plans.
(b) SENSE OF CONGRESS.—It is the sense of the
Congress that the Secretary of the Treasury should—
(1) review existing correction mechanisms to de-
termine whether modifications might facilitate addi-
tional utilization by sponsors, improve voluntary
compliance, and hasten the correction of pension
plans,
(2) consider whether additional means of ad-
dressing nonegregious violations should be explored,
(3) make whatever legislative recommendations,
if any, appear necessary to fulfill these goals, and
(4) remain cognizant that the Congress, as well
as the Secretary, considers the continuing security of
retirement savings for workers, retirees, and bene-
ficiaries of fundamental importance.
Subtitle B—ERISA Enforcement
SEC. 211. REPEAL OF LIMITED SCOPE AUDIT.
(a) IN GENERAL.—Section 103(a)(3)(C) (29 U.S.C.
1023(a)(3)(C)) is amended by adding at the end the fol-
lowing:
‘‘(ii) If an accountant is offering an opinion under
this section in the case of an employee pension benefit
plan, the accountant shall, to the extent consistent with
generally accepted auditing standards, rely on the work
of any independent public accountant of any bank or simi-
lar institution or insurance carrier that holds assets or
processes transactions of the employee pension benefit
plan provided that such bank, institution, or insurance
carrier is regulated, supervised, and subject to periodic ex-
amination by a State or Federal agency.’’.
(b) CONFORMING AMENDMENTS.—
(1) Section 103(a)(3)(A) of such Act (29
U.S.C. 1023(a)(3)(A)) is amended by striking ‘‘sub-
paragraph 
(C)’’ 
and 
inserting 
‘‘subparagraph
(C)(i)’’.
(2) Section 103(a)(3)(C) of such Act (29
U.S.C. 1023(a)(3)(C)) is amended by striking ‘‘(C)
The’’ and inserting ‘‘(C)(i) In the case of an em-
ployee benefit plan other than an employee pension
benefit plan, the’’.
(c) EFFECTIVE DATE.—The amendments made by
this section shall apply with respect to opinions required
under section 103(a)(3)(A) of the Employee Retirement
Income Security Act of 1974 for plan years beginning on
or after January 1 of the calendar year following the date
of the enactment of this Act.
SEC. 212. ADDITIONAL REQUIREMENTS FOR QUALIFIED
PUBLIC ACCOUNTANTS.
(a) IN GENERAL.—Section 103(a)(3)(D) (29 U.S.C.
1023(a)(3)(D)) is amended—
(1) by inserting ‘‘(i)’’ after ‘‘(D)’’;
(2) by inserting ‘‘, with respect to any engage-
ment of an accountant under subparagraph (A)’’
after ‘‘means’’;
(3) by redesignating clauses (i), (ii), and (iii) as
subclauses (I), (II), and (III), respectively;
(4) by striking the period at the end of sub-
clause (III) (as so redesignated) and inserting a
comma;
(5) by adding after subclause (III) (as so redes-
ignated), and flush with clause (i), the following:
‘‘but only if such person meets the require-
ments of clauses (ii) and (iii) with respect
to such engagement.’’; and
(6) by adding at the end the following new
clauses:
‘‘(ii) A person meets the requirements
of this clause with respect to an engage-
ment of such person as an accountant
under subparagraph (A) if such person—
‘‘(I) has in operation an appro-
priate internal quality control system;
‘‘(II) has undergone a qualified
external quality control review of the
person’s 
accounting 
and 
auditing
practices, including such practices rel-
evant to employee benefit plans (if
any), during the 3-year period imme-
diately preceding such engagement;
and
‘‘(III) has completed, within the
2-year period immediately preceding
such engagement, at least the mini-
mum number of hours of continuing
education or training which contrib-
utes to the accountant’s professional
proficiency and which meets such re-
quirements as may be prescribed by
the Secretary in regulations.
The Secretary shall issue the regulations
under subclause (III) not later than De-
cember 31, 1998.
‘‘(iii) A person meets the require-
ments of this clause with respect to an en-
gagement of such person as an accountant
under subparagraph (A) if such person
meets such additional requirements and
qualifications of regulations which the Sec-
retary deems necessary to ensure the qual-
ity of plan audits.
‘‘(iv) For purposes of clause (ii)(II),
an external quality control review shall be
treated as qualified with respect to a per-
son referred to in clause (ii) if—
‘‘(I) such review is performed in
accordance with the requirements of
external quality control review pro-
grams of recognized auditing stand-
ard-setting bodies, as determined in
regulations of the Secretary, and
‘‘(II) in the case of any such per-
son who has, during the peer review
period, conducted one or more pre-
vious audits of employee benefit plans,
such review includes the review of an
appropriate number (determined as
provided in such regulations, but in
no case less than one) of plan audits
in relation to the scale of such per-
son’s auditing practice.
The Secretary shall issue the regulations
under subclause (I) not later than Decem-
ber 31, 1998.’’.
(b) EFFECTIVE DATES.—
(1) IN GENERAL.—Except as provided in para-
graph (2), the amendments made by this section
shall apply with respect to plan years beginning on
or after the date which is 3 years after the date of
the enactment of this Act.
(2) RESTRICTIONS ON CONDUCTING EXAMINA-
TIONS.—Clause (iii) of section 103(a)(3)(D) of the
Employee Retirement Income Security Act of 1974
(as added by subsection (a)(6)) shall take effect on
the date of the enactment of this Act.
SEC. 213. CLARIFICATION OF FIDUCIARY PENALTIES.
(a) MODIFICATION OF PROHIBITION OF ASSIGNMENT
OR ALIENATION.—
(1) IN GENERAL.—Section 206(d) (29 U.S.C.
1056(d)) is amended by adding at the end the fol-
lowing new paragraphs:
‘‘(4) Paragraph (1) shall not apply to any offset of
a participant’s accrued benefit in an employee pension
benefit plan against an amount that the participant is or-
dered or required to pay to the plan if—
‘‘(A) the order or requirement to pay arises—
‘‘(i) under a judgment of conviction for a
crime involving such plan,
‘‘(ii) under a civil judgment (including a
consent order or decree) entered by a court in
an action brought in connection with a violation
(or alleged violation) of part 4 of this subtitle,
or
‘‘(iii) pursuant to a settlement agreement
between the Secretary and the participant, or a
settlement agreement between the Pension Ben-
efit Guaranty Corporation and the participant,
in connection with a violation (or alleged viola-
tion) of part 4 of this subtitle by a fiduciary or
any other person,
‘‘(B) the judgment, order, decree, or settlement
agreement expressly provides for the offset of all or
part of the amount ordered or required to be paid
to the plan against the participant’s accrued benefit
in the plan, and
‘‘(C) if the participant has a spouse at the time
at which the offset is to be made—
‘‘(i) such spouse has consented in writing
to such offset and such consent is witnessed by
a notary public or representative of the plan,
‘‘(ii) such spouse is ordered or required in
such judgment, order, decree, or settlement to
pay an amount to the plan in connection with
a violation of part 4 of this title, or
‘‘(iii) in such judgment, order, decree, or
settlement, such spouse retains the right to re-
ceive the value of the survivor annuity under a
qualified joint and survivor annuity provided
pursuant to section 205(a)(1) and under a
qualified preretirement survivor annuity pro-
vided pursuant to section 205(a)(2), determined
in accordance with paragraph (5).
‘‘(5)(A) The value of the survivor annuity described
in paragraph (4)(C)(iii) shall be determined as if—
‘‘(i) the participant terminated employment on
the date of the offset,
‘‘(ii) there was no offset,
‘‘(iii) the plan permitted retirement only on or
after normal retirement age,
‘‘(iv) the plan provided only the minimum-re-
quired qualified joint and survivor annuity, and
‘‘(v) the amount of the qualified preretirement
survivor annuity under the plan is equal to the
amount of the survivor annuity payable under the
minimum-required qualified joint and survivor annu-
ity.
‘‘(B) For purposes of this paragraph, the term ‘mini-
mum-required qualified joint and survivor annuity’ means
the qualified joint and survivor annuity which is the actu-
arial equivalent of a single annuity for the life of the par-
ticipant and under which the survivor annuity is 50 per-
cent of the amount of the annuity which is payable during
the joint lives of the participant and the spouse.’’.
(2) EFFECTIVE DATE.—The amendment made
by this subsection shall apply to judgments, orders,
and decrees issued, and settlement agreements en-
tered into, on or after the date of the enactment of
this Act.
(b) CIVIL PENALTIES FOR BREACH OF FIDUCIARY
RESPONSIBILITY.—
(1) IMPOSITION
AND
AMOUNT
OF
PENALTY
MADE
DISCRETIONARY.—Section 
502(l)(1) 
(29
U.S.C. 1132(l)(1)) is amended—
(A) by striking ‘‘shall’’ and inserting
‘‘may’’, and
(B) by striking ‘‘equal to’’ and inserting
‘‘not greater than’’.
(2) APPLICABLE RECOVERY AMOUNT.—Section
502(l)(2) (29 U.S.C. 1132(l)(2)) is amended to read
as follows:
‘‘(2) For purposes of paragraph (1), the term ‘appli-
cable recovery amount’ means any amount which is recov-
ered from (or on behalf of) any fiduciary or other person
with respect to a breach or violation described in para-
graph (1) on or after the 30th day following receipt by
such fiduciary or other person of written notice from the
Secretary of the violation, whether paid voluntarily or by
order of a court in a judicial proceeding instituted by the
Secretary under subsection (a)(2) or (a)(5). The Secretary
may, in the Secretary’s sole discretion, extend the 30-day
period described in the preceding sentence.’’.
(3) OTHER RULES.—Section 502(l) (29 U.S.C.
1132(l)) is amended by adding at the end the follow-
ing new paragraphs:
‘‘(5) A person shall be jointly and severally liable for
the penalty described in paragraph (1) to the same extent
that such person is jointly and severally liable for the ap-
plicable recovery amount on which the penalty is based.
‘‘(6) No penalty shall be assessed under this sub-
section unless the person against whom the penalty is as-
sessed is given notice and opportunity for a hearing with
respect to the violation and applicable recovery amount.’’.
(4) EFFECTIVE DATES.—
(A) IN GENERAL.—The amendments made
by this subsection shall apply to any breach of
fiduciary responsibility or other violation of part
4 of subtitle B of title I of the Employee Re-
tirement Income Security Act of 1974 occurring
on or after the date of the enactment of this
Act.
(B) TRANSITION RULE.—In applying the
amendment made by paragraph (2) (relating to
applicable recovery amount), a breach or other
violation occurring before the date of the enact-
ment of this Act which continues after the
180th day after such date (and which may have
100
been discontinued at any time during its exist-
ence) shall be treated as having occurred after
such date of enactment.
SEC. 214. CONFORMING AMENDMENTS RELATING TO ERISA
ENFORCEMENT.
(a) SPECIAL RULE FOR CERTAIN JUDGMENTS AND
SETTLEMENTS.—Section 401(a)(13) of the Internal Reve-
nue Code of 1986 (relating to assignment and alienation)
is amended by adding at the end the following new sub-
paragraphs:
‘‘(C) SPECIAL RULE FOR CERTAIN JUDG-
MENTS AND SETTLEMENTS.—Subparagraph (A)
shall not apply to any offset of a participant’s
accrued benefit in a plan against an amount
that the participant is ordered or required to
pay to the plan if—
‘‘(i) the order or requirement to pay
arises—
‘‘(I) under a judgment of convic-
tion for a crime involving such plan,
‘‘(II) under a civil judgment (in-
cluding a consent order or decree) en-
tered by a court in an action brought
in connection with a violation (or al-
leged violation) of part 4 of subtitle B
101
of title I of the Employee Retirement
Income Security Act of 1974, or
‘‘(III) pursuant to a settlement
agreement between the Secretary of
Labor and the participant, or a settle-
ment agreement between the Pension
Benefit Guaranty Corporation and the
participant, in connection with a viola-
tion (or alleged violation) of part 4 of
subtitle B of title I of such Act,
‘‘(ii) the judgment, order, decree, or
settlement agreement expressly provides
for the offset of all or part of the amount
ordered or required to be paid to the plan
against the participant’s accrued benefit in
the plan, and
‘‘(iii) if the participant has a spouse
at the time at which the offset is to be
made—
‘‘(I) such spouse has consented
in writing to such offset and such con-
sent is witnessed by a notary public or
representative of the plan,
‘‘(II) such spouse is ordered or
required to pay in such judgment,
102
order, 
decree, 
or 
settlement 
an
amount to the plan in connection with
a violation of part 4 of this title, or
‘‘(III) in such judgment, order,
decree, or settlement, such spouse re-
tains the right to receive the value of
the survivor annuity under a qualified
joint and survivor annuity provided
pursuant to paragraph (11)(A)(i) and
under a qualified preretirement survi-
vor annuity provided pursuant to
paragraph (11)(A)(ii), determined in
accordance with subparagraph (D).
‘‘(D) DETERMINATION OF VALUE OF SUR-
VIVOR
ANNUITY
IN
CONNECTION
WITH
OFF-
SET.—The value of the survivor annuity de-
scribed in subparagraph (C)(iii)(III) shall be
determined as if—
‘‘(i) the participant terminated em-
ployment on the date of the offset,
‘‘(ii) there was no offset,
‘‘(iii) the plan permitted retirement
only on or after normal retirement age,
103
‘‘(iv) the plan provided only the mini-
mum-required qualified joint and survivor
annuity, and
‘‘(v) the amount of the qualified pre-
retirement survivor annuity under the plan
is equal to the amount of the survivor an-
nuity payable under the minimum-required
qualified joint and survivor annuity.
For purposes of this subparagraph, the term
‘minimum-required qualified joint and survivor
annuity’ means the qualified joint and survivor
annuity which is the actuarial equivalent of a
single annuity for the life of the participant and
under which the survivor annuity is 50 percent
of the amount of the annuity which is payable
during the joint lives of the participant and the
spouse.
‘‘(E) WAIVER OF CERTAIN DISTRIBUTION
REQUIREMENTS.—With respect to the require-
ments of subsections (a) and (k) of section 401,
section 403(b), and section 409(d), a plan shall
not be treated as failing to meet such require-
ments solely by reason of an offset under sub-
paragraph (C).’’.
104
(b) EFFECTIVE DATE.—The amendment made by
subsection (a) shall apply to judgments, orders, and de-
crees issued, and settlement agreements entered into, on
or after the date of the enactment of this Act.
TITLE III—PORTABILITY
SEC. 301. FASTER VESTING OF EMPLOYER MATCHING CON-
TRIBUTIONS.
(a) IN GENERAL.—Paragraph (2) of section 203(a)
of the Employee Retirement Income Security Act of 1974
(29 U.S.C. 1053(a)) is amended—
(1) by striking ‘‘or (B)’’ and inserting ‘‘(B), or,
if applicable, (C)’’, and
(2) by adding at the end the following new sub-
paragraph:
‘‘(C) 401(k) PLANS.—A plan satisfies the re-
quirements of this subparagraph—
‘‘(i) if the plan includes a qualified cash or
deferred arrangement (as defined in section
401(k)(2)) of the Internal Revenue Code of
1986, and
‘‘(ii) if—
‘‘(I) an employee who has completed
at least 3 years of service has a nonforfeit-
able right to 100 percent of the employee’s
accrued benefit derived from employer
105
matching contributions (as defined in sec-
tion 401(m)(4)(A) of such Code), or
‘‘(II) an employee has a nonforfeitable
right to a percentage of the employee’s ac-
crued 
benefit 
derived 
from 
employer
matching contributions (as so defined) de-
termined under the following table:
The nonforfeitable
‘‘Years of service:
percentage is:
1 ...............................................................................................
2 ...............................................................................................
3 ...............................................................................................
4 ...............................................................................................
5 ...............................................................................................
100.
For purposes of this subparagraph, matching con-
tributions shall be taken into account regardless of
whether the matching contributions are made to the
same plan as the contributions made under section
401(k) of such Code, and matching contributions to
any plan shall be taken into account if such match-
ing contributions are made with respect to after-tax
employee contributions includible in gross income
and if the employer’s limit on matching contribu-
tions with respect to such includible employee con-
tributions is coordinated with the employer’s limit on
matching contributions with respect to contributions
under such section.’’.
106
(b) CONFORMING AMENDMENTS.—Paragraph (2) of
section 411(a) of the Internal Revenue Code of 1986 (re-
lating to employer contributions) is amended—
(1) by striking ‘‘or (B)’’ and inserting ‘‘(B), or,
if applicable, (C)’’, and
(2) by adding at the end the following new sub-
paragraph:
‘‘(C) 401(k) PLANS.—A plan satisfies the
requirements of this subparagraph—
‘‘(i) if the plan includes a qualified
cash or deferred arrangement (as defined
in section 401(k)(2)), and
‘‘(ii) if—
‘‘(I) an employee who has com-
pleted at least 3 years of service has
a nonforfeitable right to 100 percent
of the employee’s accrued benefit de-
rived from employer matching con-
tributions (as defined in section
401(m)(4)(A) of such Code), or
‘‘(II) an employee has a non-
forfeitable right to a percentage of the
employee’s accrued benefit derived
from employer matching contributions
107
(as so defined) determined under the
following table:
The nonforfeitable
‘‘Years of service:
percentage is:
1 ...............................................................................................
2 ...............................................................................................
3 ...............................................................................................
4 ...............................................................................................
5 ...............................................................................................
100.
For purposes of this subparagraph, matching
contributions shall be taken into account re-
gardless of whether the matching contributions
are made to the same plan as the contributions
made under section 401(k), and matching con-
tributions to any plan shall be taken into ac-
count if such matching contributions are made
with respect to after-tax employee contributions
and if the employer’s limit on matching con-
tributions with respect to such after-tax em-
ployee contributions is coordinated with the em-
ployer’s limit on matching contributions with
respect to contributions under such section.’’.
(c) EFFECTIVE DATE.—
(1) IN GENERAL.—Except as provided in para-
graphs (2) and (3), the amendments made by this
section shall apply to plan years beginning after De-
cember 31, 1997.
(2) APPLICATION TO CURRENT EMPLOYEES.—
The amendments made by this section shall not
108
apply to any employee who does not have at least 1
hour of service in any plan year beginning after De-
cember 31, 1997.
(3) COLLECTIVE BARGAINING AGREEMENTS.—
In the case of a plan maintained pursuant to 1 or
more collective bargaining agreements between em-
ployee representatives and 1 or more employers rati-
fied by the date of the enactment of this Act, the
amendments made by this section shall not apply to
employees covered by any such agreement in plan
years beginning before the earlier of—
(A) the later of—
(i) the date on which the last of such
collective bargaining agreements termi-
nates (determined without regard to any
extension thereof on or after such date of
enactment), or
(ii) January 1, 1998, or
(B) January 1, 2002.
SEC. 302. RATIONALIZE THE RESTRICTIONS ON DISTRIBU-
TIONS FROM 401(k) PLANS.
(a) IN GENERAL.—Section 401(k)(2)(B)(i)(I) of the
Internal Revenue Code of 1986 (relating to qualified cash
or deferred arrangements) is amended by striking ‘‘sepa-
109
ration from service’’ and inserting ‘‘severance from em-
ployment’’.
(b) BUSINESS SALE REQUIREMENTS DELETED.—
(1) IN GENERAL.—Section 401(k)(2)(B)(i)(II)
of the Internal Revenue Code of 1986 (relating to
qualified cash or deferred arrangements) is amended
by striking ‘‘an event’’ and inserting ‘‘a plan termi-
nation’’.
(2) 
CONFORMING
AMENDMENTS.—Section
401(k)(10) of such Code is amended—
(A) by striking subparagraph (A) and in-
serting the following:
‘‘(A) IN GENERAL.—A plan termination is
described in this paragraph if the termination
of the plan is without establishment or mainte-
nance of another defined contribution plan
(other than an employee stock ownership plan
as defined in section 4975(e)(7)).’’,
(B) by striking subparagraph (C), and
(C) by striking ‘‘OR DISPOSITION OF AS-
SETS OR SUBSIDIARY’’ in the heading.
(c) EFFECTIVE DATE.—The amendments made by
this section shall apply to distributions after December 31,
1997.
111
‘‘(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
112
(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,
113
‘‘(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,
1997.
SEC. 304. MISSING PARTICIPANTS.
(a) IN GENERAL.—Section 4050 of the Employee Re-
tirement Income Security Act of 1974 (29 U.S.C. 1350)
is amended by redesignating subsection (c) as subsection
(e) and by inserting after subsection (b) the following new
subsections:
114
‘‘(c) MULTIEMPLOYER
PLANS.—The corporation
shall prescribe rules similar to the rules in subsection (a)
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 benefits of a miss-
ing participant if the plan transfers such benefits—
‘‘(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—
115
‘‘(A) in a single sum (plus interest), or
‘‘(B) in such other form as is specified in
regulations of the corporation.
‘‘(4) PLANS DESCRIBED.—A plan is described
in this paragraph if—
‘‘(A) the plan is a pension plan (within the
meaning of section 3(2))—
‘‘(i) to which the provisions of this
section do not apply (without regard to
this subsection), and
‘‘(ii) which is not a plan described in
paragraphs (2) through (11) of section
4021(b), and
‘‘(B) at the time the assets are to be dis-
tributed upon termination, the plan—
‘‘(i) has missing participants, and
‘‘(ii) has not provided for the transfer
of assets to pay the benefits of all missing
participants to another pension plan (with-
in the meaning of section 3(2)).
‘‘(5) CERTAIN PROVISIONS NOT TO APPLY.—
Subsections (a)(1) and (a)(3) shall not apply to a
plan described in paragraph (4).’’.
(b) CONFORMING AMENDMENTS.—
116
(1) Section 206(f) of the Employee Retirement
Income Security Act of 1974 (29 U.S.C. 1056(f)) is
amended—
(A) by striking ‘‘title IV’’ and inserting
‘‘section 4050’’, and
(B) by striking ‘‘the plan shall provide
that’’.
(2) Section 401(a)(34) (relating to benefits of
missing participants on plan termination) is amend-
ed by striking ‘‘title IV’’ and inserting ‘‘section
4050’’.
(c) EFFECTIVE DATE.—The amendments made by
this section shall apply to distributions made after final
regulations implementing subsections (c) and (d) of sec-
tion 4050 of the Employee Retirement Income Security
Act of 1974 (as added by subsection (a)), respectively, are
prescribed.
TITLE IV—COMPREHENSIVE
WOMEN’S PENSION PROTECTION
Subtitle A—Pension Reform
SEC. 401. PENSION INTEGRATION RULES.
(a) APPLICABILITY OF NEW INTEGRATION RULES
EXTENDED TO ALL EXISTING ACCRUED BENEFITS.—
Notwithstanding subsection (c)(1) of section 1111 of the
Tax Reform Act of 1986 (relating to effective date of ap-
117
plication of nondiscrimination rules to integrated plans)
(100 Stat. 2440), effective for plan years beginning after
the date of the enactment of this Act, the amendments
made by subsection (a) of such section 1111 shall also
apply to benefits attributable to plan years beginning on
or before December 31, 1988.
(b) INTEGRATION DISALLOWED
FOR SIMPLIFIED
EMPLOYEE PENSIONS.—
(1) IN GENERAL.—Subparagraph (D) of section
408(k)(3) of the Internal Revenue Code of 1986 (re-
lating to permitted disparity under rules limiting
discrimination under simplified employee pensions)
is repealed.
(2) CONFORMING AMENDMENT.—Subparagraph
(C) of such section 408(k)(3) is amended by striking
‘‘and except as provided in subparagraph (D),’’.
(3) EFFECTIVE DATE.—The amendments made
by this subsection shall apply with respect to taxable
years beginning on or after January 1, 1998.
(c) EVENTUAL REPEAL OF INTEGRATION RULES.—
Effective for plan years beginning on or after January 1,
2004—
(1) subparagraphs (C) and (D) of section
401(a)(5) of the Internal Revenue Code of 1986 (re-
lating to pension integration exceptions under non-
118
discrimination requirements for qualification) are re-
pealed, and subparagraph (E) of such section
401(a)(5) is redesignated as subparagraph (C); and
(2) subsection (l) of section 401 of such Code
(relating to nondiscriminatory coordination of de-
fined contribution plans with OASDI) is repealed.
SEC. 402. APPLICATION OF MINIMUM COVERAGE REQUIRE-
MENTS WITH RESPECT TO SEPARATE LINES
OF BUSINESS.
(a) IN GENERAL.—Subsection (b) of section 410 of
the Internal Revenue Code of 1986 (relating to minimum
coverage requirements) is amended—
(1) in paragraph (1), by striking ‘‘A trust’’ and
inserting ‘‘In any case in which the employer with
respect to a plan is treated, under section 414(r), as
operating separate lines of business for a plan year,
a trust’’, and by inserting ‘‘for such plan year’’ after
‘‘requirements’’; and
(2) by redesignating paragraphs (3) through
(6) as paragraphs (4) through (7), respectively and
by inserting after paragraph (2) the following new
paragraph:
‘‘(3) SPECIAL RULE WHERE EMPLOYER OPER-
ATES SINGLE LINE OF BUSINESS.—In any case in
which the employer with respect to a plan is not
119
treated, under section 414(r), as operating separate
lines of business for a plan year, a trust shall not
constitute a qualified trust under section 401(a) un-
less such trust is designated by the employer as part
of a plan which benefits all employees of the em-
ployer.’’.
(b) LIMITATION
ON LINE
OF BUSINESS EXCEP-
TION.—Paragraph (6) of section 410(b) of such Code (as
redesignated by subsection (a)(2) of this section) is
amended by inserting ‘‘other than paragraph (1)(A)’’ after
‘‘this subsection’’.
SEC. 403. DIVISION OF PENSION BENEFITS UPON DIVORCE.
(a) AMENDMENTS
TO
THE INTERNAL REVENUE
CODE OF 1986.—
(1) IN
GENERAL.—Paragraph (1) of section
414(p) of the Internal Revenue Code of 1986 (relat-
ing to qualified domestic relations order defined) is
amended by adding at the end the following new
subparagraph:
‘‘(C) 
DEEMED
DOMESTIC
RELATIONS
ORDER UPON DIVORCE.—
‘‘(i) IN
GENERAL.—Except as pro-
vided in clause (iv), a domestic relations
order with respect to a marriage of at least
5 years duration between the participant
120
and the former spouse (including an annul-
ment or other order of marital dissolution)
shall, if the former spouse, within 60 days
after the receipt of notice under paragraph
(6)(B)(i)(II), so elects, be deemed by the
plan to be a domestic relations order that
specifies that 50 percent of the marital
share of the participant’s accrued benefit
is to be provided to such former spouse.
‘‘(ii) MARITAL
SHARE.—The marital
share shall be the accrued benefit of the
participant under the plan as of the date
of the first payment under the plan (to the
extent such accrued benefit is vested at the
date of the divorce or any later date) mul-
tiplied by a fraction, the numerator of
which is the period of participation by the
participant under the plan starting with
the date of marriage and ending with the
date of divorce, and the denominator of
which is the total period of participation by
the participant under the plan.
‘‘(iii) INTERPRETATION AS QUALIFIED
DOMESTIC RELATIONS ORDER.—Each plan
shall establish reasonable rules for deter-
121
mining how any such deemed domestic re-
lations order is to be interpreted under the
plan so as to constitute a qualified domes-
tic relations order that satisfies paragraphs
(2) through (4) (and a copy of such rules
shall be provided to such former spouse
promptly after delivery of the divorce de-
cree). Such rules—
‘‘(I) may delay the effect of such
an order until the earlier of the date
the participant is fully vested or has
terminated employment,
‘‘(II) may allow the former
spouse to be paid out immediately,
‘‘(III) shall permit the former
spouse to be paid not later than the
earliest retirement age under the plan
or the participant’s death,
‘‘(IV) may require the submitter
of the divorce decree to present a
marriage certificate or other evidence
of the marriage date to assist in bene-
fit calculations, and
‘‘(V) may conform to the rules
applicable to qualified domestic rela-
122
tions orders regarding form or type of
benefit.
‘‘(iv) APPLICATION.—This subpara-
graph shall not apply—
‘‘(I) if the domestic relations
order states that pension benefits
were considered by the parties and no
division is intended, or
‘‘(II) to the extent that a quali-
fied domestic relations order issued in
connection with such divorce provides
otherwise.’’.
(2) 
NOTIFICATION
PROCEDURES.—Section
414(p)(6) of such Code (relating to plan procedures
with respect to orders) is amended by striking sub-
paragraph (A), by redesignating subparagraph (B)
as subparagraph (C), and by inserting before sub-
paragraph (C) (as so redesignated) the following
new subparagraphs:
‘‘(A) NOTICE AND DETERMINATION BY AD-
MINISTRATOR.—In the case of any domestic re-
lations order received by a plan, including such
an order received under subparagraph (B) or
section 4980B(f)(6)(C)—
123
‘‘(i) within 14 days after receipt of
such order, the plan administrator shall—
‘‘(I) notify the participant and
each alternate payee of the receipt of
such order and the plan’s procedures
for determining the qualified status of
domestic relation orders, and
‘‘(II) notify the former spouse of
such former spouse’s rights under
paragraph (1)(C), and
‘‘(ii) within a reasonable period after
receipt of such order, the plan adminis-
trator shall determine whether such order
is a qualified domestic relations order and
notify the participant and each alternate
payee of such determination.
‘‘(B) NOTIFICATION
OF
PLAN
ADMINIS-
TRATOR.—In the case of a domestic relations
order which is not a qualified domestic relations
order, each plan—
‘‘(i) shall require that each participant
is responsible for notifying the plan admin-
istrator of the occurrence of a divorce of
the participant from the former spouse and
for delivery to the plan administrator of
124
the domestic relations order along with the
information required by paragraph (2)(A)
within 60 days after the date of the di-
vorce, and
‘‘(ii) shall allow a former spouse to so
notify the plan administrator and deliver to
the plan administrator the domestic rela-
tions order within 60 days after the date
of the divorce.’’.
(b) AMENDMENTS TO THE EMPLOYEE RETIREMENT
INCOME SECURITY ACT OF 1974.—
(1) IN GENERAL.—Subsection (d)(3)(B) of sec-
tion 206 of the Employee Retirement Income Secu-
rity Act of 1974 (29 U.S.C. 1056) is amended—
(A) by striking ‘‘this paragraph—’’ and in-
serting ‘‘this paragraph:’’,
(B) in clause (i)—
(i) by striking ‘‘the term’’ and insert-
ing ‘‘The term’’, and
(ii) by striking ‘‘met, and’’ and insert-
ing ‘‘met.’’,
(C) in clause (ii), by striking ‘‘the term’’
and inserting ‘‘The term’’, and
(D) by adding at the end the following new
clause:
125
‘‘(iii)(I) Except as provided on subclause (IV),
a domestic relations order with respect to a marriage
of at least 5 years duration between the participant
and the former spouse (including an annulment or
other order of marital dissolution) shall, if the
former spouse, within 60 days after the receipt of
notice under subparagraph (G)(ii)(I)(bb), so elects,
be deemed by the plan to be a domestic relations
order that specifies that 50 percent of the marital
share of the participant’s accrued benefit is to be
provided to such former spouse.
‘‘(II) The marital share shall be the accrued
benefit of the participant under the plan as of the
date of the first payment under the plan (to the ex-
tent such accrued benefit is vested at the date of the
divorce or any later date) multiplied by a fraction,
the numerator of which is the period of participation
by the participant under the plan starting with the
date of marriage and ending with the date of di-
vorce, and the denominator of which is the total pe-
riod of participation by the participant under the
plan.
‘‘(III) Each plan shall establish reasonable rules
for determining how any such deemed domestic rela-
tions order is to be interpreted under the plan so as
126
to constitute a qualified domestic relations order
that satisfies subparagraphs (C) through (E) (and a
copy of such rules shall be provided to such former
spouse promptly after delivery of the divorce decree).
Such rules—
‘‘(aa) may delay the effect of such an order
until the earlier of the date the participant is
fully vested or has terminated employment,
‘‘(bb) may allow the former spouse to be
paid out immediately,
‘‘(cc) shall permit the spouse to be paid
not later than the earliest retirement age under
the plan or the participant’s death,
‘‘(dd) may require the submitter of the di-
vorce decree to present a marriage certificate or
other evidence of the marriage date to assist in
benefit calculations, and
‘‘(ee) may conform to the rules applicable
to qualified domestic relations orders regarding
form or type of benefit.
‘‘(IV) This clause shall not apply—
‘‘(aa) if the domestic relations order states
that pension benefits were considered by the
parties and no division is intended, or
127
‘‘(bb) to the extent that a qualified domes-
tic relations order issued in connection with
such divorce provides otherwise.’’.
(2) 
NOTIFICATION
PROCEDURES.—Section
206(d)(3)(G) of such Act (29 U.S.C. 1056(d)(3)(G))
is amended by striking all matter before clause (ii),
by redesignating clause (ii) as clause (iii), and by in-
serting before clause (iii) (as so redesignated) the
following:
‘‘(G)(i) In the case of any domestic relations order
received by a plan, including such an order received under
clause (ii) or section 606(a)(3)—
‘‘(I) within 14 days after receipt of such order,
the plan administrator shall—
‘‘(aa) notify the participant and each alter-
nate payee of the receipt of such order and the
plan’s procedures for determining the qualified
status of domestic relation orders, and
‘‘(bb) notify the former spouse of such
former spouse’s rights under subparagraph
(B)(iii), and
‘‘(II) within a reasonable period after receipt of
such order, the plan administrator shall determine
whether such order is a qualified domestic relations
128
order and notify the participant and each alternate
payee of such determination.
‘‘(ii) In the case of a domestic relations order which
is not a qualified domestic relations order, each plan—
‘‘(I) shall require that each participant is re-
sponsible for notifying the plan administrator of the
occurrence of a divorce of the participant from the
former spouse and for delivery to the plan adminis-
trator of the domestic relations order along with the
information required by subparagraph (C)(i) within
60 days after the date of the divorce, and
‘‘(II) shall allow a former spouse to so notify
the plan administrator and deliver to the plan ad-
ministrator the domestic relations order within 60
days after the date of the divorce.’’.
SEC. 404. ENTITLEMENT OF DIVORCED SPOUSES TO RAIL-
ROAD RETIREMENT ANNUITIES INDEPEND-
ENT 
OF 
ACTUAL 
ENTITLEMENT 
OF 
EM-
PLOYEE.
Section 2 of the Railroad Retirement Act of 1974 (45
U.S.C. 231a) is amended—
(1) in subsection (c)(4)(i), by striking ‘‘(A) is
entitled to an annuity under subsection (a)(1) and
(B)’’; and
129
(2) in subsection (e)(5), by striking ‘‘or di-
vorced wife’’ the second place it appears.
SEC. 405. EFFECTIVE DATES.
(a) IN GENERAL.—Except as provided in subsection
(b), the amendments made by this subtitle, other than sec-
tion 401, shall apply with respect to plan years beginning
on or after January 1, 1998, and the amendments made
by section 403 shall apply only with respect to divorces
becoming final in such plan years.
(b) SPECIAL RULE FOR COLLECTIVELY BARGAINED
PLANS.—In the case of a plan maintained pursuant to 1
or more collective bargaining agreements between em-
ployee representatives and 1 or more employers ratified
on or before the date of the enactment of this Act, sub-
section (a) shall be applied to benefits pursuant to, and
individuals covered by, any such agreement by substituting
for ‘‘January 1, 1998’’ the date of the commencement of
the first plan year beginning on or after the earlier of—
(1) the later of—
(A) January 1, 1999, or
(B) the date on which the last of such col-
lective bargaining agreements terminates (de-
termined without regard to any extension there-
of after the date of the enactment of this Act),
or
130
(2) January 1, 2000.
(c) PLAN AMENDMENTS.—If any amendment made
by this subtitle requires an amendment to any plan, such
plan amendment shall not be required to be made before
the first plan year beginning on or after January 1, 2000,
if—
(1) during the period after such amendment
made by this subtitle takes effect and before such
first plan year, the plan is operated in accordance
with the requirements of such amendment made by
this subtitle, and
(2) such plan amendment applies retroactively
to the period after such amendment made by this
subtitle takes effect and such first plan year.
A plan shall not be treated as failing to provide definitely
determinable benefits or contributions, or to be operated
in accordance with the provisions of the plan, merely be-
cause it operates in accordance with this subsection.
131
Subtitle B—Protection of Rights of
Former Spouses to Pension Ben-
efits Under Certain Government
and Government-Sponsored Re-
tirement Programs
SEC. 411. EXTENSION OF TIER II RAILROAD RETIREMENT
BENEFITS TO SURVIVING FORMER SPOUSES
PURSUANT TO DIVORCE AGREEMENTS.
(a) IN GENERAL.—Section 5 of the Railroad Retire-
ment Act of 1974 (45 U.S.C. 231d) is amended by adding
at the end the following new subsection:
‘‘(d) Notwithstanding any other provision of law, the
payment of any portion of an annuity computed under sec-
tion 3(b) to a surviving former spouse in accordance with
a court decree of divorce, annulment, or legal separation
or the terms of any court-approved property settlement
incident to any such court decree shall not be terminated
upon the death of the individual who performed the service
with respect to which such annuity is so computed unless
such termination is otherwise required by the terms of
such court decree.’’.
(b) EFFECTIVE DATE.—The amendment made by
this section shall take effect on the date of the enactment
of this Act.
132
SEC. 412. SURVIVOR ANNUITIES FOR WIDOWS, WIDOWERS,
AND FORMER SPOUSES OF FEDERAL EM-
PLOYEES WHO DIE BEFORE ATTAINING AGE
FOR 
DEFERRED 
ANNUITY 
UNDER 
CIVIL
SERVICE RETIREMENT SYSTEM.
(a) BENEFITS FOR WIDOW OR WIDOWER.—Section
8341(f) of title 5, United States Code, is amended—
(1) in the matter preceding paragraph (1) by—
(A) by inserting ‘‘a former employee sepa-
rated from the service with title to deferred an-
nuity from the Fund dies before having estab-
lished a valid claim for annuity and is survived
by a spouse, or if’’ before ‘‘a Member’’; and
(B) by inserting ‘‘of such former employee
or Member’’ after ‘‘the surviving spouse’’;
(2) in paragraph (1)—
(A) by inserting ‘‘former employee or’’ be-
fore ‘‘Member commencing’’; and
(B) by inserting ‘‘former employee or’’ be-
fore ‘‘Member dies’’; and
(3) in the undesignated sentence following para-
graph (2)—
(A) in the matter preceding subparagraph
(A) by inserting ‘‘former employee or’’ before
‘‘Member’’; and
133
(B) in subparagraph (B) by inserting
‘‘former employee or’’ before ‘‘Member’’.
(b) BENEFITS
FOR
FORMER
SPOUSE.—Section
8341(h) of title 5, United States Code, is amended—
(1) in paragraph (1) by adding after the first
sentence ‘‘Subject to paragraphs (2) through (5) of
this subsection, a former spouse of a former em-
ployee who dies after having separated from the
service with title to a deferred annuity under section
8338(a) but before having established a valid claim
for annuity is entitled to a survivor annuity under
this subsection, if and to the extent expressly pro-
vided for in an election under section 8339(j)(3) of
this title, or in the terms of any decree of divorce
or annulment or any court order or court-approved
property settlement agreement incident to such de-
cree.’’; and
(2) in paragraph (2)—
(A) in subparagraph (A)(ii) by striking ‘‘or
annuitant,’’ and inserting ‘‘annuitant, or former
employee’’; and
(B) in subparagraph (B)(iii) by inserting
‘‘former employee or’’ before ‘‘Member’’.
(c) PROTECTION OF SURVIVOR BENEFIT RIGHTS.—
Section 8339(j)(3) of title 5, United States Code, is
134
amended by inserting at the end the following: ‘‘The Office
shall provide by regulation for the application of this sub-
section to the widow, widower, or surviving former spouse
of a former employee who dies after having separated from
the service with title to a deferred annuity under section
8338(a) but before having established a valid claim for
annuity.’’.
(d) EFFECTIVE DATE.—The amendments made by
this section shall take effect on the date of the enactment
of this Act and shall apply only in the case of a former
employee who dies on or after such date.
SEC. 413. TERMINATION OF TWO-TIER ANNUITY COMPUTA-
TION AND SOCIAL SECURITY OFFSET UNDER
MILITARY SURVIVOR BENEFIT PLAN.
(a) TERMINATION.—Section 1451 of title 10, United
States Code, is amended—
(1) in subsection (a)—
(A) in paragraph (1), by striking out
‘‘shall be’’ in the matter preceding subpara-
graph (A) and all that follows in that para-
graph and inserting in lieu thereof ‘‘shall be the
amount equal to 55 percent of the base
amount.’’; and
(B) in paragraph (2), by striking out
‘‘shall be’’ in the matter preceding subpara-
135
graph (A) and all that follows in that para-
graph and inserting in lieu thereof ‘‘shall be the
amount equal to a percentage of the base
amount that—
‘‘(A) is less than 55 percent; and
‘‘(B) is determined under subsection (f).’’;
and
(2) in paragraph (1) of subsection (c), by strik-
ing out ‘‘shall be’’ in the matter preceding subpara-
graph (A) and all that follows in that paragraph and
inserting in lieu thereof ‘‘shall be the amount equal
to 55 percent of the retired pay to which the mem-
ber or former member would have been entitled if
the member or former member had been entitled to
that pay based upon his years of active service when
he died.’’.
(b) REPEAL OF REQUIREMENT FOR REDUCTION OF
ANNUITY AT AGE 62.—Such section is further amended
by striking out subsection (d).
(c) REPEAL OF ALTERNATIVE COMPUTATION FOR
CERTAIN BENEFICIARIES FOR WHOM SOCIAL SECURITY
OFFSET WAS MORE BENEFICIAL THAN TWO-TIER COM-
PUTATION.—Such section is further amended by striking
out subsection (e).
136
(d) CONFORMING AMENDMENT.—Subsection (f) of
such section is amended by striking out ‘‘(a)(2), (b)(2),
or (e)(2)(B)’’ and inserting in lieu thereof ‘‘(a)(2) or
(b)(2)’’.
(e) EFFECTIVE DATE.—The amendments made by
this section shall apply to payment of annuities for months
that begin after the date of the enactment of this Act.
(f) RECOMPUTATION OF EXISTING ANNUITIES.—In
the case of a person who is a beneficiary under the Survi-
vor Benefit Plan established by subchapter II of chapter
73 of title 10, United States Code, on the date of the en-
actment of this Act, the Secretary concerned (as defined
in section 101 of title 37, United States Code) shall re-
compute the amount of that person’s annuity as necessary
to reflect the amendments made by this section.
SEC. 414. PAYMENT OF LUMP-SUM BENEFITS TO FORMER
SPOUSES OF FEDERAL EMPLOYEES.
(a) CIVIL SERVICE RETIREMENT SYSTEM.—Chapter
83 of title 5, United States Code, is amended—
(1) in section 8342(c), by striking ‘‘Lump-sum’’
and inserting ‘‘Except as provided in section
8345(j), lump-sum’’;
(2) in section 8345(j) by adding at the end of
paragraph (1) the following: ‘‘Except for purposes of
subparagraph (B), the first sentence of this para-
137
graph shall be deemed to be amended by inserting
after ‘that individual’ the following: ‘, and any lump-
sum benefits authorized by section 8342(d) through
(f) which would otherwise be paid to any person or
persons under section 8342(c),’ ’’; and
(B) by adding at the end the following:
‘‘(4) Any payment under this subsection to a person
bars recovery by any other person.’’.
(b) FEDERAL EMPLOYEES’ RETIREMENT SYSTEM.—
Chapter 84 of title 5, United States Code, is amended—
(1) in section 8424(d), by striking ‘‘Lump-sum’’
and inserting ‘‘Except as provided in section
8467(a), lump-sum’’; and
(2) in section 8467—
(A) in subsection (a), by adding at the end
the following: ‘‘Except for purposes of para-
graph (2), the first sentence of this subsection
shall be deemed to be amended by inserting
after ‘that individual’ the following: ‘, and any
lump-sum 
benefits 
authorized 
by 
section
8424(e) through (g) which would otherwise be
paid to any individual or individuals under sec-
tion 8424(d),’ ’’; and
(B) by adding at the end the following:
138
‘‘(d) Any payment under this section to a person bars
recovery by any other person.’’.
(c) EFFECTIVE DATE.—The amendments made by
this section shall apply with respect to any amount payable
by reason of any death occurring on or after the date of
the enactment of this Act.
Subtitle C—Modifications of Joint
and Survivor Annuity Require-
ments
SEC. 421. MODIFICATIONS OF JOINT AND SURVIVOR ANNU-
ITY REQUIREMENTS.
(a) AMENDMENTS TO ERISA.—
(1) AMOUNT OF ANNUITY.—
(A) IN GENERAL.—Paragraph (1) of sec-
tion 205(a) of the Employee Retirement Income
Security Act of 1974 (29 U.S.C. 1055(a)) is
amended by inserting ‘‘or, at the election of the
participant, shall be provided in the form of a
qualified joint and 2⁄3 survivor annuity’’ after
‘‘survivor annuity,’’.
(B) DEFINITION.—Subsection (d) of sec-
tion 205 of such Act (29 U.S.C. 1055) is
amended—
139
(i) by redesignating paragraphs (1)
and (2) as subparagraphs (A) and (B), re-
spectively,
(ii) by inserting ‘‘(1)’’ after ‘‘(d)’’,
and
(iii) by adding at the end the follow-
ing new paragraph:
‘‘(2) For purposes of this section, the term ‘‘qualified
joint and 2⁄3 survivor annuity’’ means an annuity—
‘‘(A) for the participant while both the partici-
pant and the spouse are alive with a survivor annu-
ity for the life of surviving individual (either the par-
ticipant or the spouse) equal to 67 percent of the
amount of the annuity which is payable to the par-
ticipant while both the participant and the spouse
are alive,
‘‘(B) which is the actuarial equivalent of a sin-
gle annuity for the life of the participant, and
‘‘(C) which, for all other purposes of this Act,
is treated as a qualified joint and survivor annuity.’’.
(2) ILLUSTRATION REQUIREMENT.—Clause (i)
of section 205(c)(3)(A) of such Act (29 U.S.C.
1055(c)(3)(A)) is amended to read as follows:
‘‘(i) the terms and conditions of each qualified
joint and survivor annuity and qualified joint and
140
2⁄3 survivor annuity offered, accompanied by an illus-
tration of the benefits under each such annuity for
the particular participant and spouse and an ac-
knowledgement form to be signed by the participant
and the spouse that they have read and considered
the illustration before any form of retirement benefit
is chosen,’’.
(b) AMENDMENTS TO INTERNAL REVENUE CODE.—
(1) AMOUNT OF ANNUITY.—
(A) IN
GENERAL.—Clause (i) of section
401(a)(11)(A) of the Internal Revenue Code of
1986 (relating to requirement of joint and sur-
vivor annuity and preretirement survivor annu-
ity) is amended by inserting ‘‘or, at the election
of the participant, shall be provided in the form
of a qualified joint and 2⁄3 survivor annuity’’
after ‘‘survivor annuity,’’.
(B) DEFINITION.—Section 417 of such
Code (relating to definitions and special rules
for purposes of minimum survivor annuity re-
quirements) is amended by redesignating sub-
section (f) as subsection (g) and by inserting
after subsection (e) the following new sub-
section:
141
‘‘(f) DEFINITION OF QUALIFIED JOINT AND 2⁄3 SUR-
VIVOR ANNUITY.—For purposes of this section and section
401(a)(11), the term ‘‘qualified joint and 2⁄3 survivor an-
nuity’’ means an annuity—
‘‘(1) for the participant while both the partici-
pant and the spouse are alive with a survivor annu-
ity for the life of surviving individual (either the par-
ticipant or the spouse) equal to 67 percent of the
amount of the annuity which is payable to the par-
ticipant while both the participant and the spouse
are alive,
‘‘(2) which is the actuarial equivalent of a sin-
gle annuity for the life of the participant, and
‘‘(3) which, for all other purposes of this title,
is treated as a qualified joint and survivor annuity.’’.
(2) ILLUSTRATION REQUIREMENT.—Clause (i)
of section 417(a)(3)(A) of such Code (relating to ex-
planation of joint and survivor annuity) is amended
to read as follows:
‘‘(i) the terms and conditions of each
qualified joint and survivor annuity and
qualified joint and 2⁄3 survivor annuity of-
fered, accompanied by an illustration of
the benefits under each such annuity for
the particular participant and spouse and
142
an acknowledgement form to be signed by
the participant and the spouse that they
have read and considered the illustration
before any form of retirement benefit is
chosen,’’.
(c) EFFECTIVE DATES.—
(1) IN GENERAL.—The amendments made by
this section shall apply to plan years beginning on
or after January 1, 1998.
(2) SPECIAL
RULE
FOR
COLLECTIVELY
BAR-
GAINED PLANS.—In the case of a plan maintained
pursuant to 1 or more collective bargaining agree-
ments between employee representatives and 1 or
more employers ratified on or before the date of en-
actment of this Act, the amendments made by this
section shall apply to the first plan year beginning
on or after the earlier of—
(A) the later of—
(i) January 1, 1999, or
(ii) the date on which the last of such
collective bargaining agreements termi-
nates (determined without regard to any
extension thereof after the date of enact-
ment of this Act), or
(B) January 1, 2000.
143
(3) PLAN
AMENDMENTS.—If any amendment
made by this section requires an amendment to any
plan, such plan amendment shall not be required to
be made before the first plan year beginning on or
after January 1, 2000, if—
(A) during the period after such amend-
ment made by this section takes effect and be-
fore such first plan year, the plan is operated
in accordance with the requirements of such
amendment made by this section, and
(B) such plan amendment applies retro-
actively to the period after such amendment
made by this section takes effect and such first
plan year.
A plan shall not be treated as failing to provide defi-
nitely determinable benefits or contributions, or to
be operated in accordance with the provisions of the
plan, merely because it operates in accordance with
this paragraph.
144
Subtitle D—Spousal Consent Re-
quired for Distributions From
Section 401(k) Plans
SEC. 431. SPOUSAL CONSENT REQUIRED FOR DISTRIBU-
TIONS FROM SECTION 401(k) PLANS.
(a) IN GENERAL.—Paragraph (2) of section 401(k)
of the Internal Revenue Code of 1986 (defining qualified
cash or deferred arrangement) is amended by striking
‘‘and’’ at the end of subparagraph (C), by striking the pe-
riod at the end of subparagraph (D) and inserting ‘‘, and’’,
and by adding at the end the following new subparagraph:
‘‘(E) which provides that no distribution
may be made unless—
‘‘(i) the spouse of the employee (if
any) consents in writing (during the 90-
day period ending on the date of the dis-
tribution) to such distribution, and
‘‘(ii) requirements comparable to the
requirements of section 417(a)(2) are met
with respect to such consent.’’
(b) EFFECTIVE DATE.—The amendments made by
this section shall apply to distributions in plan years be-
ginning on or after January 1, 1998.
145
Subtitle E—Women’s Pension Toll-
Free Phone Number
SEC. 441. WOMEN’S PENSION TOLL-FREE PHONE NUMBER.
(a) IN GENERAL.—The Secretary of Labor shall con-
tract with an independent organization to create a wom-
en’s pension toll-free telephone number and contact to
serve as—
(1) a resource for women on pension questions
and issues;
(2) a source for referrals to appropriate agen-
cies; and
(3) a source for printed information.
(b) AUTHORIZATION
OF APPROPRIATIONS.—There
are authorized to be appropriated $500,000 for each of
the fiscal years 1998, 1999, 2000, and 2001 to carry out
subsection (a).
TITLE V—DATE FOR ADOPTION
OF PLAN AMENDMENTS
SEC. 501. DATE FOR ADOPTION OF PLAN AMENDMENTS.
(a) IN GENERAL.—Except as otherwise provided in
this Act, if any amendment made by this Act requires an
amendment to any plan, such plan amendment shall not
be required to be made before the last day of the first
plan year beginning on or after January 1, 1998, if—
146
(1) during the period after such amendment
takes effect and before the last day of such first
plan year, the plan is operated in accordance with
the requirements of such amendment, and
(2) such plan amendment applies retroactively
to such period.
A plan shall not be treated as failing to provide definitely
determinable benefits or contributions, or to be operated
in accordance with the provisions of the plan, merely be-
cause it operates in accordance with this subsection.
(b) GOVERNMENTAL PLANS.—In the case of a gov-
ernmental plan (as defined in section 414(d) of the Inter-
nal Revenue Code of 1986), subsection (a) shall be applied
by substituting for ‘‘January 1, 1998’’ the later of—
(1) January 1, 1999, or
(2) the date which is 90 days after the opening
of the first legislative session beginning after Janu-
ary 1, 1999, of the governing body with authority to
amend the plan, but only if such governing body
does not meet continuously.
(c) SPECIAL RULE FOR COLLECTIVELY BARGAINED
PLANS.—Nothwithstanding any other provision of this
Act, in the case of a plan maintained pursuant to 1 or
more collective bargaining agreements between employee
representatives and 1 or more employers ratified on or be-
147
fore the date of the enactment of this Act, any amendment
made by this Act which requires an amendment to such
plan shall not be required to be made before the last day
of the first plan year beginning on or after the earlier of—
(1) the later of—
(A) January 1, 1998, or
(B) the date on which the last of such col-
lective bargaining agreements terminates (de-
termined without regard to any extension there-
of after the date of the enactment of this Act),
or
(2) January 1, 1999.
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