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fit derived from employer contributions deter-
mined under the following table:
‘‘Years of
Nonforfeitable
Service
Percentage
1 .........................................................................
2 .........................................................................
3 .........................................................................
4 .........................................................................
5 or more ...........................................................
100.
‘‘(C) MULTIEMPLOYER
PLANS.—A plan
satisfies the requirements of this subparagraph
if—
‘‘(i) the plan is a multiemployer plan
(within the meaning of section 414(f), and
‘‘(ii) under the plan—
‘‘(I) an employee who is covered
pursuant to a collective bargaining
agreement described in section 414
(f)(1)(B) and who has completed at
least five years of service has a non-
forfeitable right to 100 percent of the
employee’s accrued benefits derived
from employer contributions, and
‘‘(II) the requirements of sub-
paragraph (A) or (B) are met with re-
spect to employees not described in
subclause (I).’’.
(b) AMENDMENTS TO ERISA.—IN GENERAL.—Para-
graph (2) of section 203(a) of the Employee Retirement
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Income Security Act of 1974 (29 U.S.C. 1053(a)(2)) is
amended to read as follows:
‘‘(2) A plan satisfies the requirements of this
paragraph if it satisfies the following requirements
of subparagraph (A), (B), or (C).
‘‘(A) A plan satisfies the requirements of
this subparagraph if an employee who has com-
pleted at least three years of service has a non-
forfeitable right to 100 percent of the employ-
ee’s accrued benefit derived from employer con-
tributions.
‘‘(B) A plan satisfies the requirement of
this subparagraph if an employee has a non-
forfeitable right to a percentage of the employ-
ee’s accrued benefit derived from employer con-
tributions determined under the following table:
‘‘Years of
Nonforfeitable
Service
Percentage
1 .........................................................................
2 .........................................................................
3 .........................................................................
4 .........................................................................
5 or more ...........................................................
100.
‘‘(C) A plan satisfies the requirements of
this subparagraph if—
‘‘(i) the plan is a multiemployer plan
(within the meaning of section 3(37)), and
‘‘(ii) under the plan—
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‘‘(I) an employee who is covered
pursuant to a collective bargaining
agreement 
described 
in 
section
414(f)(1)(B) and who has completed
at least five years of service has a
nonforfeitable right to 100 percent of
the employee’s accrued benefit derived
from employer contributions, and
‘‘(II) the requirements of sub-
paragraph (A) or (B) are met with re-
spect to employees not described in
subclause (I).’’.
SEC. 3. PORTABILITY REQUIREMENTS FOR QUALIFIED
PLANS.
(a) IN GENERAL.—Part 2 of title I of the Employee
Retirement Income Security Act of 1974 is amended by
inserting after section 204(h) the following new sub-
section:
‘‘(i) PORTABILITY REQUIREMENTS FOR QUALIFIED
PLANS.—
‘‘(1) GENERAL RULES.—
‘‘(A) QUALIFIED
PLANS.—Each qualified
plan shall, at the election of an employee upon
separation from service, make a direct transfer
of the portion of the employee’s eligible amount
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specified in the election to a portable pension
account specified in the election.
‘‘(B) INDIVIDUALS.—An individual may—
‘‘(i) establish a portable pension ac-
count on the individual’s own behalf to
which transfers described in paragraph
(1)(A), or transfers from other portable
pension accounts, may be made, and
‘‘(ii) transfer, in a direct transfer,
amounts in a portable pension account es-
tablished on the individual’s behalf to a
portable pension account maintained by a
qualified plan in which the individual is a
participant or to another portable pension
account established by the individual on
the individual’s own behalf.
‘‘(2) PORTABLE PENSION ACCOUNTS.—For pur-
poses of this section.—
‘‘(A) IN
GENERAL.—The term ‘portable
pension account’ means—
‘‘(i) in the case of an employer, an in-
dividual account plan, an individual ac-
count within a qualified plan, or a sim-
plified employee pension under section
408(k) of the Internal Revenue Code meet-
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ing requirements of the following para-
graphs of this subsection, and
‘‘(ii) in the case of an individual, an
individual retirement plan meeting such re-
quirements.
‘‘(B) DISTRIBUTION REQUIREMENTS.—
‘‘(i) IN GENERAL.—The requirements
of this paragraph are met if distributions
from the account—
‘‘(I) may only be made in a per-
mitted retirement income form, and
‘‘(II) may only be made with the
consent of the participant.
‘‘(ii) PERMITTED
RETIREMENT
IN-
COME
FORM.—For the purposes of sub-
paragraph (A) a permitted retirement in-
come form means:
‘‘(I) A lump sum distribution of
the employee’s entire earned benefit.
‘‘(II) A qualified joint and survi-
vor annuity (within the meaning of
section 205(d)).
‘‘(III) Any other joint life annu-
ity (including a cash refund annuity).
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immediately before any distribution, notice is
provided to the recipient with respect to—
‘‘(i) the provisions under which the
distribution may or may not be subject to
tax or penalty under the Internal Revenue
Code of 1986, and
‘‘(ii) the terms and conditions of each
permitted retirement income form under
paragraph (B) (including the terms and
conditions of any spousal consent require-
ments under subparagraph (B)(iii).
‘‘(3) ELIGIBLE AMOUNT.—For purposes of this
section—
‘‘(A) IN
GENERAL.—The term ‘eligible
amount’ means, with respect to any partici-
pant—
‘‘(i) in the case of a defined benefit
plan that is at least 100 percent funded
for nonforfeitable accrued benefits, 100
percent of the present value of the partici-
pant’s 
nonforfeitable 
accrued 
benefits
under the plan,
‘‘(ii) in the case of a defined benefit
plan that is less than 100 percent funded
for nonforfeitable accrued benefits, a per-
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centage of the present value of the partici-
pant’s 
nonforfeitable 
accrued 
benefits
under the plan equal to the plan’s percent-
age of funding for nonforfeitable accrued
benefits, and
‘‘(iii) in the case of a defined con-
tribution plan, the balance to the credit of
the participant at the time of the distribu-
tion without regard to any reductions on
account of back-end loads, market value
adjustments, early withdrawal charges, or
any other charges or penalties.
‘‘(B) EMPLOYEE
CONTRIBUTIONS.—The
eligible amount shall include employee contribu-
tions.
‘‘(C) PRESENT VALUE.—For purposes of
subparagraphs (A)(i) and (A)(ii)—
‘‘(i) the present value of the non-
forfeitable accrued benefits of a participant
shall be determined utilizing formulas pub-
lished by the Pension Benefit Guaranty
Corporation for lump sum valuations with
the following specifications regarding their
application:
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‘‘(I) For the period commencing
with the normal retirement date for
full benefits under the plan, the im-
mediate annuity rate as published by
the Pension Benefit Guaranty Cor-
poration shall be utilized as the dis-
count rate.
‘‘(II) For the period commencing
with the date of termination of em-
ployment until the normal retirement
date for full benefits under the plan,
a discount rate of not more than 3
percent shall be utilized. In addition,
for the period between termination of
employment and until the normal re-
tirement date for full benefits under
the plan, the resulting present value
shall be determined as if the payment
at the normal retirement date is not
contingent on the survival of any per-
son to that date.
‘‘(III) The formulas shall utilize
unisex mortality tables constructed to
reflect the experience of the plan re-
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garding the percentages of males and
females in the plan.
‘‘(ii) PHASE-IN.—For plan years be-
ginning in 1995 or 1996, the following per-
centages shall be substituted for 3 percent
in subparagraph (i)(b);
‘‘For plan years
beginning in
The percentage is
1995 ...........................................................
1996 ...........................................................
4.
‘‘(4) OTHER
DEFINITIONS
AND
RULES.—For
purposes of this section—
‘‘(A) QUALIFIED PLAN.—The term ‘quali-
fied plan’ means—
‘‘(i) a plan described in section 401(a)
of the Internal Revenue Code of 1986
which includes a trust which is exempt
from tax under section 501(a) of such
Code,
‘‘(ii) an annuity plan described in sec-
tion 403(a) of such Code, and
‘‘(iii) an annuity contract described in
section 403(b) of such Code.
‘‘(B) INDIVIDUAL
RETIREMENT
PLAN.—
The term ‘individual retirement plan’ means—
‘‘(i) an individual retirement account
described in section 408(a) of such Code,
and
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‘‘(ii) an individual retirement annuity
described in section 408(b) of such Code.
‘‘(C) BENEFICIARIES OR ALTERNATE PAY-
EES.—In the case of an individual who is a ben-
eficiary of the participant or an alternate payee
(within the meaning of section 206(d)(3)(K)
under a plan, such an individual shall be treat-
ed in the same manner as a participant in the
plan.
(b) AMENDMENTS
TO
THE INTERNAL REVENUE
CODE.—Section 411 of the Internal Revenue Code of
1986 is amended by inserting at the end thereof, the fol-
lowing new subparagraph:
‘‘(f) PORTABILITY REQUIREMENTS FOR QUALIFIED
PLANS.—
‘‘(1) GENERAL RULES.—
‘‘(A) QUALIFIED
PLANS.—Each qualified
plan shall, at the election of an employee upon
separation from service, make a direct transfer
of the portion of the employee’s eligible amount
specified in the election to a portable pension
account specified in the election.
‘‘(B) INDIVIDUALS.—An individual may—
‘‘(i) establish a portable pension ac-
count on the individual’s own behalf to
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which transfers described in paragraph
(1)(A), or transfers from other portable
pension accounts, may be made, and
‘‘(ii) transfer, in a direct transfer,
amounts in a portable pension account es-
tablished on the individual’s behalf to a
portable pension account maintained by a
qualified plan in which the individual is a
participant or to another portable pension
account established by the individual on
the individual’s own behalf.
‘‘(2) PORTABLE PENSION ACCOUNTS.—For the
purposes of this section—
‘‘(A) IN
GENERAL.—The term ‘portable
pension account’ means—
‘‘(i) in the case of an employer, an in-
dividual account plan, an individual ac-
count within a qualified plan, or a sim-
plified employee pension under section
408(k) of the Internal Revenue Code meet-
ing requirements of the following para-
graphs of this subsection, and
‘‘(ii) in the case of an individual, an
individual retirement plan meeting such re-
quirements.
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‘‘(B) DISTRIBUTION REQUIREMENTS.—
‘‘(i) IN GENERAL.—The requirements
of this paragraph are met if distributions
from the account—
‘‘(I) may only be made in a per-
mitted retirement income form, and
‘‘(II) may only be made with the
consent of the participant.
‘‘(ii) PERMITTED
RETIREMENT
IN-
COME
FORM.—For the purposes of sub-
paragraph (i), a permitted retirement in-
come form means:
‘‘(I) A lump sum distribution of
the individual’s entire earned benefit.
‘‘(II) A qualified joint and survi-
vor annuity (within the meaning of
section 205(D)).
‘‘(III) Any other joint life annu-
ity (including a cash refund annuity).
‘‘(IV) A single life annuity (in-
cluding a cash refund annuity).
‘‘(V) Any series of substantially
equal periodic payments described in
section 72(t)(2)(A)(iv) of the Internal
Revenue Code of 1986 which are not
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part of an annuity described in the
preceding clauses.
‘‘(iii) SPOUSAL
CONSENT.—The re-
quirements of this paragraph shall not be
met unless the account provides that any
election as to form of benefit must meet
spousal consent requirements which are
identical to the requirements of section
205(c)(2).
‘‘(C) ASSET CONTROL.—The requirements
of this paragraph are met if the account pro-
vides that participants may elect to exercise
control over the assets in their accounts and
such control is the same as that described in
section 404(c) (as determined under regulations
prescribed by the Secretary).
‘‘(D) NOTICE.—The requirements of this
paragraph are met if the account provides that,
immediately before any distribution, notice is
provided to the recipient with respect to—
‘‘(i) the provisions under which the
distribution may or may not be subject to
tax or penalty under the Internal Revenue
Code of 1986, and
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‘‘(ii) the terms and conditions of each
permitted retirement income form under
paragraph (B)(ii) (including the terms and
conditions of any spousal consent require-
ments under paragraph (B)(iii)).
‘‘(3) ELIGIBLE AMOUNT.—For the purposes of
this section—
‘‘(A) IN
GENERAL.—The term ‘eligible
amount’ means, with respect to any partici-
pant—
‘‘(i) in the case of a defined benefit
plan that is at least 100 percent funded
for nonforfeitable accrued benefits, 100
percent of the present value of the partici-
pant’s 
nonforfeitable 
accrued 
benefits
under the plan,
‘‘(ii) in the case of a defined benefit
plan that is less than 100 percent funded
for nonforfeitable accrued benefits, a per-
centage of the present value of the partici-
pant’s 
nonforfeitable 
accrued 
benefits
under the plan equal to the plan’s percent-
age of funding for nonforfeitable accrued
benefits, and
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‘‘(iii) in the case of a defined con-
tribution plan, the balance to the credit of
the participant as of the time of the dis-
tribution without regard to any reductions
on account of back-end loads, market value
adjustments, early withdrawal charges, or
any other charges or penalties.
‘‘(B) EMPLOYEE
CONTRIBUTIONS.—The
eligible amount shall include employee contribu-
tions.
‘‘(C) PRESENT VALUE.—For purposes of
subparagraphs (A)(i) and (A)(ii)—
‘‘(i) the present value of the non-
forfeitable accrued benefits of a participant
shall be determined utilizing formulas pub-
lished by the Pension Benefit Guaranty
Corporation for lump sum valuations with
the following specifications regarding their
application:
‘‘(I) For the period commencing
with the normal retirement date for
full benefits under the plan, the im-
mediate annuity rate as published by
the Pension Benefit Corporation shall
be utilized as the discount rate.