(2) QUALIFIED EMBEZZLEMENT RESTITUTION 
ORDER DEFINED.—Section 414 of such Code (relat-
ing to definitions and special rules) is amended by 
adding at the end the following new subsection: 
‘‘(w) QUALIFIED
EMBEZZLEMENT
RESTITUTION 
ORDER DEFINED.—For purposes of this subsection and 
section 401(a)(13)—
‘‘(1) IN GENERAL.—
‘‘(A) QUALIFIED
EMBEZZLEMENT
RES-
TITUTION ORDER.—The term ‘qualified embez-
zlement restitution order’ means an embezzle-
ment restitution order—
‘‘(i) which creates or recognizes the 
existence of an aggrieved State or local 
government’s right to, or assigns to an ag-
grieved State or local government the right 
to, receive all or a portion of the benefits 
payable with respect to a participant under 
a plan, and 
‘‘(ii) with respect to which the re-
quirements of paragraphs (2) and (3) are 
met. 
‘‘(B) 
EMBEZZLEMENT
RESTITUTION 
ORDER.—The term ‘embezzlement restitution 
order’ means an order arising under a judg-
ment of conviction of an individual by a court 
of competent jurisdiction of the crime of embez-
zlement in violation of the applicable laws of the 
United States or of any State or political sub-
division thereof, which provides for restitution 
to the government of any State or political sub-
division thereof of losses sustained by such gov-
ernment in connection with the embezzlement of 
the funds of such government by such indi-
vidual. 
‘‘(2) ORDER MUST CLEARLY SPECIFY CERTAIN 
FACTS.—A qualified embezzlement restitution order 
meets the requirements of this paragraph only if 
such order clearly specifies—
‘‘(A) the name and the last known mailing 
address (if any) of the participant and the 
name and mailing address of each aggrieved 
State or local government covered by the order, 
‘‘(B) the amount or percentage of the par-
ticipant’s benefits to be paid by the plan to 
each such aggrieved State or local government, 
or the manner in which such amount or per-
centage is to be determined, 
‘‘(C) the number of payments or period to 
which such order applies, and
‘‘(D) each plan to which such order ap-
plies. 
‘‘(3) ORDER MAY NOT ALTER AMOUNT, FORM, 
ETC., OF BENEFITS.—A qualified embezzlement res-
titution order meets the requirements of this para-
graph only if such order—
‘‘(A) does not require a plan to provide 
any type or form of benefit, or any option, not 
otherwise provided under the plan, 
‘‘(B) does not require the plan to provide 
increased benefits (determined on the basis of 
actuarial value), and 
‘‘(C) does not require the payment of bene-
fits to the government of any State or political 
subdivision thereof which are required to be 
paid to any other entity—
‘‘(i) as an aggrieved State or local 
government under another order previously 
determined to be a qualified embezzlement 
restitution order, or 
‘‘(ii) as an alternate payee under an 
order previously determined to be a quali-
fied domestic relations order (as defined in 
subsection (p)(1)(A)).
‘‘(4) APPLICATION OF CERTAIN PROVISIONS.—
The provisions of paragraphs (4), (6), (7), (10), 
(11), and (12) of subsection (p) shall apply for pur-
poses of this subsection and section 401(a)(13) in 
the same manner and to the same extent as such 
paragraphs apply for purposes of subsection (p) and 
section 401(a)(13), except that—
‘‘(A) any reference to a ‘qualified domestic 
relations order‘ or a ‘domestic relations order’ 
shall be deemed a reference to a qualified em-
bezzlement restitution order or an embezzle-
ment restitution order, respectively, and 
‘‘(B) any reference to an ‘alternate payee’ 
shall be deemed a reference to an aggrieved 
State or local government. 
‘‘(5) INAPPLICABILITY OF EMBEZZLEMENT RES-
TITUTION ORDERS IN THE CASE OF CERTAIN SUR-
VIVOR
ANNUITY
REQUIREMENTS
APPLICABLE
TO 
SPOUSE.—Notwithstanding section 401(a)(13)(E), 
section 401(a)(13)(A) shall apply with respect to the 
creation, assignment, or recognition of a right to any 
benefit payable with respect to a participant pursu-
ant to any embezzlement restitution order if the re-
quirements of section 401(a)(13)(C)(iii) are met 
with respect to the plan. In applying subparagraphs
(C)(iii) and (D) of section 401(a)(13) for purposes 
of this paragraph—
‘‘(A) any reference to an ‘offset’ shall be 
deemed a reference to the creation, assignment, 
or recognition of a right to any benefit payable 
with respect to the participant pursuant to an 
embezzlement restitution order, 
‘‘(B) to pay an amount to the plan shall be 
deemed a reference to the embezzlement restitu-
tion order, and 
‘‘(C) any reference to a ‘violation of part 
4’ of subtitle B of title I of the Employee Re-
tirement Income Security Act of 1974 shall be 
deemed a reference to embezzlement in violation 
of the applicable laws of the United States or 
of any State or political subdivision thereof. 
‘‘(6) AGGRIEVED
STATE
OR
LOCAL
GOVERN-
MENT.—The term ‘aggrieved State or local govern-
ment’ means, with respect to any plan participant, 
the government of any State or political subdivision 
thereof that is recognized by an embezzlement res-
titution order as having a right to receive as restitu-
tion all, or a portion of, the benefits payable under 
the plan with respect to such participant.