117 
‘‘(II) such portion will be distrib-
uted (in accordance with regulations) 
over the life of such eligible des-
ignated beneficiary (or over a period 
not extending beyond the life expect-
ancy of such beneficiary), and 
‘‘(III) such distributions begin 
not later than 1 year after the date of 
the employee’s death or such later 
date as the Secretary may by regula-
tions prescribe, 
for purposes of clause (i), the portion re-
ferred to in subclause (I) shall be treated 
as distributed on the date on which such 
distributions begin. 
‘‘(vi) SPECIAL RULE FOR SURVIVING 
SPOUSE
OF
EMPLOYEE.—If the eligible 
designated beneficiary is the surviving 
spouse of the employee— 
‘‘(I) the date on which the dis-
tributions are required to begin under 
clause (v)(III) shall not be earlier 
than the date on which the employee 
would have attained age 701⁄2, and 
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118 
‘‘(II) if the surviving spouse dies 
before the distributions to such spouse 
begin, this subparagraph shall be ap-
plied as if the surviving spouse were 
the employee. 
‘‘(vii) RULES UPON DEATH OF ELIGI-
BLE DESIGNATED BENEFICIARY.—If an el-
igible designated beneficiary dies before the 
portion of the employee’s interest to which 
clause (i) applies which is payable to (or 
for the benefit of) such eligible designated 
beneficiary is entirely distributed, the ex-
ception under clause (v) shall not apply to 
any beneficiary of such eligible designated 
beneficiary and the remainder of such por-
tion shall be distributed within 5 years 
after the death of such beneficiary. 
‘‘(viii) COORDINATION
WITH
INDI-
VIDUAL
RETIREMENT
PLANS.—For pur-
poses of applying the provisions of this 
subparagraph and subsections (a)(6) and 
(b)(3) of section 408, individual retirement 
plans shall be treated as defined contribu-
tion plans in determining the aggregate ac-
count balances to the credit of the em-
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119 
ployee under all defined contribution plans 
and the amount required to be distributed 
to each beneficiary under such provi-
sions.’’. 
(2) DEFINITION
OF
ELIGIBLE
DESIGNATED 
BENEFICIARY.—Section 401(a)(9)(E) of such Code 
is amended to read as follows: 
‘‘(E) DEFINITIONS AND RULES RELATING 
TO DESIGNATED BENEFICIARY.—For purposes 
of this paragraph— 
‘‘(i) DESIGNATED BENEFICIARY.—The 
term ‘designated beneficiary’ means any 
individual designated as a beneficiary by 
the employee. 
‘‘(ii) ELIGIBLE
DESIGNATED
BENE-
FICIARY.—The term ‘eligible designated 
beneficiary’ means, with respect to any em-
ployee, any designated beneficiary who is— 
‘‘(I) the surviving spouse of the 
employee, 
‘‘(II) subject to clause (iii), a 
child of the employee who has not 
reached majority (within the meaning 
of subparagraph (F)), 
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120 
‘‘(III) disabled (within the mean-
ing of section 72(m)(7)), 
‘‘(IV) a chronically ill individual 
(within 
the 
meaning 
of 
section 
7702B(c)(2), except that the require-
ments of subparagraph (A)(i) thereof 
shall only be treated as met if there is 
a certification that, as of such date, 
the period of inability described in 
such subparagraph with respect to the 
individual is an indefinite one which is 
reasonably expected to be lengthy in 
nature), or 
‘‘(V) an individual not described 
in any of the preceding subclauses 
who is not more than 10 years young-
er than the employee. 
‘‘(iii) 
SPECIAL
RULE
FOR
CHIL-
DREN.—Subject to subparagraph (F), an 
individual described in clause (ii)(II) shall 
cease to be an eligible designated bene-
ficiary as of the date the individual reaches 
majority and any remainder of the portion 
of the interest described in subparagraph 
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121 
(H)(v) shall be distributed within 5 years 
after such date. 
‘‘(iv) TIME FOR DETERMINATION OF 
ELIGIBLE
DESIGNATED
BENEFICIARY.— 
The determination of whether a designated 
beneficiary is an eligible designated bene-
ficiary shall be made as of the date of 
death of the employee.’’. 
(3) CONFORMING AMENDMENTS.— 
(A) Clause (ii) of section 401(a)(9)(B) of 
the Internal Revenue Code of 1986 is amended 
by striking ‘‘A trust’’ and inserting ‘‘Except as 
provided in subparagraph (H), a trust’’. 
(B) Section 402(c)(11)(A)(iii) of such 
Code 
is 
amended 
by 
striking 
‘‘section 
401(a)(9)(B) (other than clause (iv) thereof)’’ 
and inserting ‘‘subparagraphs (B) (other than 
clause (iv) thereof) and (H) (other than clause 
(vi) thereof) of section 401(a)(9)’’. 
(4) EFFECTIVE DATES.— 
(A) IN GENERAL.—Except as provided in 
this paragraph and paragraphs (5) and (6), the 
amendments made by this subsection shall 
apply to distributions with respect to employees 
who die after December 31, 2018. 
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122 
(B) 
COLLECTIVE
BARGAINING
EXCEP-
TION.—In the case of a plan maintained pursu-
ant to 1 or more collective bargaining agree-
ments between employee representatives and 1 
or more employers ratified before the date of 
enactment of this Act, the amendments made 
by this subsection shall apply to distributions 
with respect to employees who die in calendar 
years beginning after the earlier of— 
(i) the later of— 
(I) the date on which the last of 
such collective bargaining agreements 
terminates (determined without re-
gard to any extension thereof agreed 
to on or after the date of the enact-
ment of this Act); or 
(II) December 31, 2018; or 
(ii) December 31, 2020. 
For purposes of clause (i)(I), any plan amend-
ment made pursuant to a collective bargaining 
agreement relating to the plan which amends 
the plan solely to conform to any requirement 
added by this section shall not be treated as a 
termination of such collective bargaining agree-
ment. 
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123 
(C) GOVERNMENTAL PLANS.—In the case 
of a governmental plan (as defined in section 
414(d) of the Internal Revenue Code of 1986), 
subparagraph (A) shall be applied by sub-
stituting ‘‘December 31, 2020’’ for ‘‘December 
31, 2018’’. 
(5) EXCEPTION FOR CERTAIN EXISTING ANNU-
ITY CONTRACTS.— 
(A) IN GENERAL.—The amendments made 
by this subsection shall not apply to a qualified 
annuity which is a binding annuity contract in 
effect on the date of enactment of this Act and 
at all times thereafter. 
(B) QUALIFIED
ANNUITY.—For purposes 
of this paragraph, the term ‘‘qualified annuity’’ 
means, with respect to an employee, an annu-
ity— 
(i) which is a commercial annuity (as 
defined in section 3405(e)(6) of the Inter-
nal Revenue Code of 1986); 
(ii) under which the annuity payments 
are made over the life of the employee or 
over the joint lives of such employee and a 
designated beneficiary (or over a period 
not extending beyond the life expectancy of 
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124 
such employee or the joint life expectancy 
of such employee and a designated bene-
ficiary) in accordance with the regulations 
described in section 401(a)(9)(A)(ii) of 
such Code (as in effect before such amend-
ments) and which meets the other require-
ments of section 401(a)(9) of such Code 
(as so in effect) with respect to such pay-
ments; and 
(iii) with respect to which— 
(I) annuity payments to the em-
ployee have begun before the date of 
enactment of this Act, and the em-
ployee has made an irrevocable elec-
tion before such date as to the method 
and amount of the annuity payments 
to the employee or any designated 
beneficiaries; or 
(II) if subclause (I) does not 
apply, the employee has made an ir-
revocable election before the date of 
enactment of this Act as to the meth-
od and amount of the annuity pay-
ments to the employee or any des-
ignated beneficiaries. 
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125 
(6) 
EXCEPTION
FOR
CERTAIN
BENE-
FICIARIES.— 
(A) IN GENERAL.—If an employee dies be-
fore the effective date, then, in applying the 
amendments made by this subsection to such 
employee’s designated beneficiary who dies after 
such date— 
(i) such amendments shall apply to 
any beneficiary of such designated bene-
ficiary; and 
(ii) the designated beneficiary shall be 
treated as an eligible designated bene-
ficiary for purposes of applying section 
401(a)(9)(H)(iv) of the Internal Revenue 
Code of 1986 (as in effect after such 
amendments). 
(B) EFFECTIVE DATE.—For purposes of 
this paragraph, the term ‘‘effective date’’ means 
the first day of the first calendar year to which 
the amendments made by this subsection apply 
to a plan with respect to employees dying on or 
after such date. 
(b) PROVISIONS
RELATING
TO
PLAN
AMEND-
MENTS.— 
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126 
(1) IN GENERAL.—If this subsection applies to 
any plan amendment— 
(A) such plan shall be treated as being op-
erated in accordance with the terms of the plan 
during the period described in paragraph 
(2)(B)(i); and 
(B) except as provided by the Secretary of 
the Treasury, such plan shall not fail to meet 
the requirements of section 411(d)(6) of the In-
ternal Revenue Code of 1986 and section 
204(g) of the Employee Retirement Income Se-
curity Act of 1974 by reason of such amend-
ment. 
(2) AMENDMENTS TO WHICH SUBSECTION AP-
PLIES.— 
(A) IN
GENERAL.—This subsection shall 
apply to any amendment to any plan or which 
is made— 
(i) pursuant to any amendment made 
by this section or pursuant to any regula-
tion issued by the Secretary of the Treas-
ury under this section or such amend-
ments; and 
(ii) on or before the last day of the 
first plan year beginning after December 
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127 
31, 2020, or such later date as the Sec-
retary of the Treasury may prescribe. 
In the case of a governmental or collectively 
bargained plan to which subparagraph (B) or 
(C) of subsection (a)(4) applies, clause (ii) shall 
be applied by substituting the date which is 2 
years after the date otherwise applied under 
such clause. 
(B) CONDITIONS.—This subsection shall 
not apply to any amendment unless— 
(i) during the period— 
(I) beginning on the date the leg-
islative or regulatory amendment de-
scribed in paragraph (1)(A) takes ef-
fect (or in the case of a plan amend-
ment not required by such legislative 
or regulatory amendment, the effec-
tive date specified by the plan); and 
(II) ending on the date described 
in subparagraph (A)(ii) (or, if earlier, 
the date the plan amendment is 
adopted), 
the plan is operated as if such plan amend-
ment were in effect; and 
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128 
(ii) such plan amendment applies 
retroactively for such period. 
SEC. 502. INCREASE IN PENALTY FOR FAILURE TO FILE. 
(a) IN GENERAL.—The second sentence of subsection 
(a) of section 6651 of the Internal Revenue Code of 1986 
is amended by striking ‘‘$205’’ and inserting ‘‘$400’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to returns the due date for which 
(including extensions) is after December 31, 2018. 
SEC. 503. INCREASED PENALTIES FOR FAILURE TO FILE 
RETIREMENT PLAN RETURNS. 
(a) IN GENERAL.—Subsection (e) of section 6652 of 
the Internal Revenue Code of 1986 is amended— 
(1) by striking ‘‘$25’’ and inserting ‘‘$100’’; 
and 
(2) by striking ‘‘$15,000’’ and inserting 
‘‘$50,000’’. 
(b) ANNUAL REGISTRATION STATEMENT AND NOTI-
FICATION OF CHANGES.—Subsection (d) of section 6652 
of the Internal Revenue Code of 1986 is amended— 
(1) by striking ‘‘$1’’ both places it appears in 
paragraphs (1) and (2) and inserting ‘‘$2’’; 
(2) by striking ‘‘$5,000’’ in paragraph (1) and 
inserting ‘‘$10,000’’; and 
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