I 
114TH CONGRESS 
1ST SESSION H. R. 4085 
To amend the Internal Revenue Code of 1986 to clarify the treatment of 
church pension plans, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
NOVEMBER 19, 2015 
Mr. TIBERI (for himself, Mr. NEAL, Mr. SESSIONS, Mr. REED, and Ms. 
LINDA T. SA´NCHEZ of California) introduced the following bill; which was 
referred to the Committee on Ways and Means 
A BILL 
To amend the Internal Revenue Code of 1986 to clarify 
the treatment of church pension plans, and for other 
purposes. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Church Plan Clarifica-
tion Act of 2015’’. 
SEC. 2. CHURCH PLAN CLARIFICATION. 
(a) APPLICATION OF CONTROLLED GROUP RULES TO 
CHURCH PLANS.— 
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(1) IN GENERAL.—Section 414(c) of the Inter-
nal Revenue Code of 1986 is amended— 
(A) by striking ‘‘For purposes’’ and insert-
ing the following: 
‘‘(1) IN GENERAL.—Except as provided in para-
graph (2), for purposes’’, and 
(B) by adding at the end the following new 
paragraph: 
‘‘(2) SPECIAL
RULES
RELATING
TO
CHURCH 
PLANS.— 
‘‘(A) GENERAL RULE.—Except as provided 
in subparagraphs (B) and (C), for purposes of 
this subsection and subsection (m), an organi-
zation that is otherwise eligible to participate in 
a church plan shall not be aggregated with an-
other such organization and treated as a single 
employer with such other organization for a 
plan year beginning in a taxable year unless— 
‘‘(i) one such organization provides 
(directly or indirectly) at least 80 percent 
of the operating funds for the other orga-
nization during the preceding tax year of 
the recipient organization, and 
‘‘(ii) there is a degree of common 
management or supervision between the or-
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ganizations such that the organization pro-
viding the operating funds is directly in-
volved in the day-to-day operations of the 
other organization. 
‘‘(B) 
NONQUALIFIED
CHURCH-CON-
TROLLED
ORGANIZATIONS.—Notwithstanding 
subparagraph (A), for purposes of this sub-
section and subsection (m), an organization 
that is a nonqualified church-controlled organi-
zation shall be aggregated with 1 or more other 
nonqualified church-controlled organizations, or 
with an organization that is not exempt from 
tax under section 501, and treated as a single 
employer with such other organization, if at 
least 80 percent of the directors or trustees of 
such other organization are either representa-
tives of, or directly or indirectly controlled by, 
such nonqualified church-controlled organiza-
tion. For purposes of this subparagraph, the 
term ‘nonqualified church-controlled organiza-
tion’ means a church-controlled tax-exempt or-
ganization described in section 501(c)(3) that is 
not a qualified church-controlled organization 
(as defined in section 3121(w)(3)(B)). 
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‘‘(C) PERMISSIVE
AGGREGATION
AMONG 
CHURCH-RELATED
ORGANIZATIONS.—The 
church or convention or association of churches 
with which an organization described in sub-
paragraph (A) is associated (within the mean-
ing of subsection (e)(3)(D)), or an organization 
designated by such church or convention or as-
sociation of churches, may elect to treat such 
organizations as a single employer for a plan 
year. Such election, once made, shall apply to 
all succeeding plan years unless revoked with 
notice provided to the Secretary in such manner 
as the Secretary shall prescribe. 
‘‘(D) PERMISSIVE
DISAGGREGATION
OF 
CHURCH-RELATED
ORGANIZATIONS.—For pur-
poses of subparagraph (A), in the case of a 
church plan, an employer may elect to treat 
churches (as defined in section 403(b)(12)(B)) 
separately from entities that are not churches 
(as so defined), without regard to whether such 
entities maintain separate church plans. Such 
election, once made, shall apply to all suc-
ceeding plan years unless revoked with notice 
provided to the Secretary in such manner as the 
Secretary shall prescribe.’’. 
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(2) CLARIFICATION RELATING TO APPLICATION 
OF
ANTI-ABUSE
RULE.—The rule of 26 CFR 
1.414(c)–5(f) shall continue to apply to each para-
graph of section 414(c) of the Internal Revenue 
Code of 1986, as amended by paragraph (1). 
(3) EFFECTIVE DATE.—The amendments made 
by paragraph (1) shall apply to years beginning be-
fore, on, or after the date of the enactment of this 
Act. 
(b) APPLICATION OF CONTRIBUTION AND FUNDING 
LIMITATIONS
TO
403(b) GRANDFATHERED
DEFINED 
BENEFIT PLANS.— 
(1) IN GENERAL.—Section 251(e)(5) of the Tax 
Equity and Fiscal Responsibility Act of 1982 (Public 
Law 97–248), is amended— 
(A) by striking ‘‘403(b)(2)’’ and inserting 
‘‘403(b)’’, and 
(B) by inserting before the period at the 
end the following: ‘‘, and shall be subject to the 
applicable limitations of section 415(b) of such 
Code as if it were a defined benefit plan under 
section 401(a) of such Code (and not to the 
limitations of section 415(c) of such Code).’’. 
(2) EFFECTIVE DATE.—The amendments made 
by this subsection shall apply to years beginning be-
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fore, on, or after the date of the enactment of this 
Act. 
(c) AUTOMATIC ENROLLMENT BY CHURCH PLANS.— 
(1) IN GENERAL.—This subsection shall super-
sede any law of a State that relates to wage, salary, 
or payroll payment, collection, deduction, garnish-
ment, assignment, or withholding which would di-
rectly or indirectly prohibit or restrict the inclusion 
in any church plan (as defined in section 414(e) of 
the Internal Revenue Code of 1986) of an automatic 
contribution arrangement. 
(2) DEFINITION OF AUTOMATIC CONTRIBUTION 
ARRANGEMENT.—For purposes of this subsection, 
the term ‘‘automatic contribution arrangement’’ 
means an arrangement— 
(A) under which a participant may elect to 
have the plan sponsor or the employer make 
payments as contributions under the plan on 
behalf of the participant, or to the participant 
directly in cash, 
(B) under which a participant is treated as 
having elected to have the plan sponsor or the 
employer make such contributions in an amount 
equal to a uniform percentage of compensation 
provided under the plan until the participant 
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specifically elects not to have such contributions 
made (or specifically elects to have such con-
tributions made at a different percentage), and 
(C) under which the notice and election re-
quirements of paragraph (3), and the invest-
ment requirements of paragraph (4), are satis-
fied. 
(3) NOTICE REQUIREMENTS.— 
(A) IN GENERAL.—The plan sponsor of, or 
plan administrator or employer maintaining, an 
automatic contribution arrangement shall, with-
in a reasonable period before the first day of 
each plan year, provide to each participant to 
whom the arrangement applies for such plan 
year notice of the participant’s rights and obli-
gations under the arrangement which— 
(i) is sufficiently accurate and com-
prehensive to apprise the participant of 
such rights and obligations, and 
(ii) is written in a manner calculated 
to be understood by the average partici-
pant to whom the arrangement applies. 
(B) ELECTION REQUIREMENTS.—A notice 
shall not be treated as meeting the require-
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ments of subparagraph (A) with respect to a 
participant unless— 
(i) the notice includes an explanation 
of the participant’s right under the ar-
rangement not to have elective contribu-
tions made on the participant’s behalf (or 
to elect to have such contributions made at 
a different percentage), 
(ii) the participant has a reasonable 
period of time, after receipt of the expla-
nation described in clause (i) and before 
the first elective contribution is made, to 
make such election, and 
(iii) the notice explains how contribu-
tions made under the arrangement will be 
invested in the absence of any investment 
election by the participant. 
(4) DEFAULT INVESTMENT.—If no affirmative 
investment election has been made with respect to 
any automatic contribution arrangement, contribu-
tions to such arrangement shall be invested in a de-
fault investment selected with the care, skill, pru-
dence, and diligence that a prudent person selecting 
an investment option would use. 
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