[Congressional Bills 105th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4152 Introduced in House (IH)]







105th CONGRESS
  2d Session
                                H. R. 4152

           To provide retirement security for all Americans.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             June 25, 1998

 Mr. Gejdenson (for himself, Mr. Neal of Massachusetts, Mr. Gephardt, 
Mr. Bonior, Mr. Fazio of California, Mrs. Kennelly of Connecticut, Mr. 
Frost, Mr. Rangel, Mr. Clay, Mr. Pomeroy, Ms. Stabenow, Mr. Matsui, Mr. 
 Payne, Mr. Lewis of Georgia, Mr. Yates, Mr. Sandlin, Ms. Sanchez, Mr. 
     Vento, Mr. Underwood, Mr. Pascrell, Ms. DeLauro, Mr. Frank of 
   Massachusetts, Mr. McGovern, Mr. Lantos, Ms. Lee, Mr. Filner, Mr. 
 Towns, Mrs. Lowey, Mr. Rahall, Mr. Hinchey, Mr. Baldacci, Mr. Gordon, 
  Mr. Andrews, Mr. Jefferson, Mrs. Mink of Hawaii, Mr. Price of North 
Carolina, Mr. Manton, Mr. Delahunt, Ms. Carson, Mr. Nadler, Mr. Levin, 
 and Mr. Borski) introduced the following bill; which was referred to 
 the Committee on Ways and Means, and in addition to the Committees on 
   Education and the Workforce, Government Reform and Oversight, and 
  Transportation and Infrastructure, for a period to be subsequently 
   determined by the Speaker, in each case for consideration of such 
 provisions as fall within the jurisdiction of the committee concerned

_______________________________________________________________________

                                 A BILL


 
           To provide retirement security for all Americans.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Retirement Accessibility, Security, 
and Portability Act of 1998''.

SEC. 2. TABLE OF CONTENTS.

    The table of contents for this Act is as follows:

Sec. 1. Short title.
Sec. 2. Table of contents.
                  TITLE I--PENSION ACCESS AND COVERAGE

Sec. 100. Amendment of 1986 Code.
      Subtitle A--Improved Access to Individual Retirement Savings

Sec. 101. Credit for pension plan startup costs of small employers.
Sec. 102. Exclusion for payroll deduction contributions to IRAs.
Sec. 103. Nonrefundable tax credit for contributions to individual 
                            retirement plans.
Sec. 104. Distributions from certain plans may be used without penalty 
                            during periods of unemployment.
     Subtitle B--Secure Money Annuity or Retirement (SMART) Trusts

Sec. 111. Secure money annuity or retirement (SMART) trusts.
       Subtitle C--Improved Fairness in Retirement Plan Benefits

Sec. 121. Amendments to SIMPLE retirement accounts.
Sec. 122. Nondiscrimination rules for qualified cash or deferred 
                            arrangements and matching contributions.
Sec. 123. Definition of highly compensated employees.
Sec. 124. Treatment of multiemployer plans under section 415.
Sec. 125. Exemption of mirror plans from section 457 limits.
Sec. 126. Immediate participation in the thrift savings plan for 
                            Federal employees.
Sec. 127. Full funding limitation for multiemployer plans.
Sec. 128. Elimination of partial termination rules for multiemployer 
                            plans.
Sec. 129. Repeal of 150 percent of current liability funding limit.
                           TITLE II--SECURITY

Sec. 200. Amendment of ERISA.
                     Subtitle A--General Provisions

Sec. 201. Periodic pension benefits statements.
Sec. 202. Requirement of annual, detailed investment reports applied to 
                            certain 401(k) plans.
Sec. 203. Information required to be provided to investment managers of 
                            401(k) plans.
Sec. 204. Study on investments in collectibles.
Sec. 205. Qualified employer plans prohibited from making loans through 
                            credit cards and other intermediaries.
Sec. 206. Multiemployer plan benefits guaranteed.
Sec. 207. Prohibited transactions.
Sec. 208. Substantial owner benefits.
Sec. 209. Reversion report.
                     Subtitle B--ERISA Enforcement

Sec. 211. Civil penalties for breach of fiduciary responsibilities made 
                            discretionary, etc.
Sec. 212. Reporting and enforcement requirements for employee benefit 
                            plans.
Sec. 213. Additional requirements for qualified public accountants.
Sec. 214. Inspector General study.
       Subtitle C--Increase in Excise Tax on Employer Reversions

Sec. 221. Increase in excise tax.
                         TITLE III--PORTABILITY

Sec. 301. Faster vesting of employer matching contributions.
Sec. 302. Rationalization of the restrictions on distributions from 
                            401(k) plans.
Sec. 303. Treatment of transfers between defined contribution plans.
Sec. 304. Missing participants.
Sec. 305. Allowance of rollovers from and to 403(b) plans.
Sec. 306. Rollover contributions from deferred compensation plans of 
                            State and local governments.
Sec. 307. Extension of 60-day rollover period in the case of 
                            Presidentially declared disasters and 
                            service in combat zone.
Sec. 308. Purchase of service credit in governmental defined benefit 
                            plans.
           TITLE IV--COMPREHENSIVE WOMEN'S PENSION PROTECTION

                       Subtitle A--Pension Reform

Sec. 401. Pension right to know proposals.
Sec. 402. Women's pension toll-free phone number.
Sec. 403. Modification of government pension offset.
Sec. 404. Family leave provisions.
Sec. 405. Pension integration rules.
Sec. 406. Division of pension benefits upon divorce.
Sec. 407. Entitlement of divorced spouses to railroad retirement 
                            annuities independent of actual entitlement 
                            of employee.
Sec. 408. Effective dates.
Subtitle B--Protection of Rights of Former Spouses to Pension Benefits 
 Under Certain Government and Government-Sponsored Retirement Programs

Sec. 411. Extension of tier II railroad retirement benefits to 
                            surviving former spouses pursuant to 
                            divorce agreements.
Sec. 412. Survivor annuities for widows, widowers, and former spouses 
                            of Federal employees who die before 
                            attaining age for deferred annuity under 
                            civil service retirement system.
Sec. 413. Payment of lump-sum benefits to former spouses of Federal 
                            employees.
  Subtitle C--Modifications of Joint and Survivor Annuity Requirements

Sec. 421. Modifications of joint and survivor annuity requirements.
Sec. 422. Spousal consent required for distributions from defined 
                            contribution plans.
             TITLE V--DATE FOR ADOPTION OF PLAN AMENDMENTS

Sec. 501. Date for adoption of plan amendments.

                  TITLE I--PENSION ACCESS AND COVERAGE

SEC. 100. AMENDMENT OF 1986 CODE.

    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 provision, the reference shall be considered to 
be made to a section or other provision of the Internal Revenue Code of 
1986.

      Subtitle A--Improved Access to Individual Retirement Savings

SEC. 101. CREDIT FOR PENSION PLAN STARTUP COSTS OF SMALL EMPLOYERS.

    (a) In General.--Subpart D of part IV of subchapter A of chapter 1 
(relating to business related credits) is amended by adding at the end 
the following new section:

``SEC. 45D. SMALL EMPLOYER PENSION PLAN STARTUP COSTS.

    ``(a) General Rule.--For purposes of section 38, in the case of an 
eligible employer, the small employer pension plan startup cost credit 
determined under this section for any taxable year is an amount equal 
to 50 percent of the qualified startup costs paid or incurred by the 
taxpayer during the taxable year.
    ``(b) Dollar Limitation.--The amount of the credit determined under 
this section for any taxable year shall not exceed--
            ``(1) $1,000 for the first credit year,
            ``(2) $500 for each of the 2 taxable years immediately 
        following the first credit year, and
            ``(3) zero for any other taxable year.
    ``(c) Eligible Employer.--For purposes of this section--
            ``(1) In general.--The term `eligible employer' has the 
        meaning given such term by section 408(p)(2)(C)(i).
            ``(2) Employers maintaining qualified plans during 1997 not 
        eligible.--Such term shall not include an employer if such 
        employer (or any predecessor employer) maintained a qualified 
        plan (as defined in section 408(p)(2)(D)(ii)) with respect to 
        which contributions were made, or benefits were accrued, for 
        service in 1997. If only individuals other than employees 
        described in subparagraph (A) or (B) of section 410(b)(3) are 
        eligible to participate in the qualified employer plan referred 
        to in subsection (d)(1), then the preceding sentence shall be 
        applied without regard to any qualified plan in which only 
        employees so described are eligible to participate.
    ``(d) Other Definitions.--For purposes of this section--
            ``(1) Qualified startup costs.--
                    ``(A) In general.--The term `qualified startup 
                costs' means any ordinary and necessary expenses of an 
                eligible employer which are paid or incurred in 
                connection with--
                            ``(i) the establishment or administration 
                        of an eligible employer plan, or
                            ``(ii) the retirement-related education of 
                        employees with respect to such plan.
                    ``(B) Plan must have at least 2 participants.--Such 
                term shall not include any expense in connection with a 
                plan that does not have at least 2 individuals who are 
                eligible to participate.
                    ``(C) Plan must be established before january 1, 
                2001.--Such term shall not include any expense in 
                connection with a plan established after December 31, 
                2000.
            ``(2) Eligible employer plan.--The term `eligible employer 
        plan' means a qualified employer plan within the meaning of 
        section 4972(d), or a qualified payroll deduction arrangement 
        within the meaning of section 408(q)(1) (whether or not an 
        election is made under section 408(q)(2)). A qualified payroll 
        deduction arrangement shall be treated as an eligible employer 
        plan only if all employees of the employer who--
                    ``(A) have been employed for 90 days, and
                    ``(B) are not described in subparagraph (A) or (C) 
                of section 410(b)(3),
        are eligible to make the election under section 408(q)(1)(A).
            ``(3) First credit year.--The term `first credit year' 
        means--
                    ``(A) the taxable year which includes the date that 
                the eligible employer plan to which such costs relate 
                becomes effective, or
                    ``(B) at the election of the eligible employer, the 
                taxable year preceding the taxable year referred to in 
                subparagraph (A).
    ``(e) Special Rules.--For purposes of this section--
            ``(1) Aggregation rules.--All persons treated as a single 
        employer under subsection (a) or (b) of section 52, or 
        subsection (n) or (o) of section 414, shall be treated as one 
        person. All eligible employer plans shall be treated as 1 
        eligible employer plan.
            ``(2) Disallowance of deduction.--No deduction shall be 
        allowed for that portion of the qualified startup costs paid or 
        incurred for the taxable year which is equal to the credit 
        determined under subsection (a).
            ``(3) Election not to claim credit.--This section shall not 
        apply to a taxpayer for any taxable year if such taxpayer 
        elects to have this section not apply for such taxable year.''
    (b) Credit Allowed as Part of General Business Credit.--Section 
38(b) (defining current year business credit) is amended by striking 
``plus'' at the end of paragraph (11), by striking the period at the 
end of paragraph (12) and inserting ``, plus'', and by adding at the 
end the following new paragraph:
            ``(13) in the case of an eligible employer (as defined in 
        section 45D(c)), the small employer pension plan startup cost 
        credit determined under section 45D(a).''
    (c) Conforming Amendments.--
            (1) Section 39(d) is amended by adding at the end the 
        following new paragraph:
            ``(8) No carryback of small employer pension plan startup 
        cost credit before effective date.--No portion of the unused 
        business credit for any taxable year which is attributable to 
        the small employer pension plan startup cost credit determined 
        under section 45D may be carried back to a taxable year ending 
on or before the date of the enactment of section 45D.''
            (2) Subsection (c) of section 196 is amended by striking 
        ``and'' at the end of paragraph (7), by striking the period at 
        the end of paragraph (8) and inserting ``, and'', and by adding 
        at the end the following new paragraph:
            ``(9) the small employer pension plan startup cost credit 
        determined under section 45D(a).''
            (3) The table of sections for subpart D of part IV of 
        subchapter A of chapter 1 is amended by adding at the end the 
        following new item:

                              ``Sec. 45D. Small employer pension plan 
                                        startup costs.''
    (d) Effective Date.--The amendments made by this section shall 
apply to costs paid or incurred in taxable years ending after the date 
of the enactment of this Act.

SEC. 102. EXCLUSION FOR PAYROLL DEDUCTION CONTRIBUTIONS TO IRAS.

    (a) In General.--Section 408 (relating to individual retirement 
accounts) is amended by redesignating subsection (q) as subsection (r) 
and by inserting after subsection (p) the following new subsection:
    ``(q) Qualified Payroll Deduction Arrangement for IRA 
Contributions.--
            ``(1) In general.--For purposes of this title, the term 
        `qualified payroll deduction arrangement' means a written 
        arrangement of an employer under which--
                    ``(A) an employee eligible to participate in the 
                arrangement may elect to have the employer make 
                payments--
                            ``(i) to the employee directly in cash, or
                            ``(ii) as elective employer contributions 
                        to an individual retirement plan (as defined in 
                        section 7701(a)(37)), other than an individual 
                        retirement plan described in section 408(k), 
                        408(p), or 408A(b), on behalf of the employee 
                        for the taxable year in which the payments 
                        otherwise would have been made to the employee 
                        directly in cash,
                    ``(B) the amount which the employee may elect under 
                subparagraph (A) for any year may not exceed a total of 
                $2,000,
                    ``(C) no other contributions may be made other than 
                contributions described in subparagraph (A),
                    ``(D) the employee's rights to any contributions 
                made to an individual retirement plan are 
                nonforfeitable (for this purpose, rules similar to the 
                rules of subsection (k)(4) shall apply), and
                    ``(E) the employer makes the elective employer 
                contributions under subparagraph (A) not later than the 
                close of the 30-day period following the last day of 
                the month with respect to which the contributions are 
                to be made.
            ``(2) Election not to have subsection apply.--An employer 
        that maintains an arrangement otherwise described in paragraph 
        (1) may elect to have contributions treated as though they were 
        not made under such an arrangement. If an employer does not 
        make an election described in the preceding sentence, an 
        employee may elect, before any contributions are made for the 
        calendar year, to have contributions on behalf of the employee 
        treated as though they were not made under an arrangement 
        described in paragraph (1). An employer shall be deemed to have 
        made an election under this paragraph for a year if the 
        employer maintained a qualified plan with respect to which 
        contributions were made or benefits were accrued for such year. 
        For purposes of the preceding sentence, the term `qualified 
        plan' means a plan, contract, pension, or trust described in 
        subparagraph (A) or (B) of section 219(g)(5).''.
    (b) Tax Treatment of Employer Contributions Made Under a Qualified 
Payroll Deduction Arrangement.--
            (1) Coordination with deduction under section 219.--
                    (A) Section 219(b) (relating to maximum amount of 
                deduction) is amended by adding at the end the 
                following new paragraph:
            ``(5) Special rule for contributions under a qualified 
        payroll deduction arrangement.--This section shall not apply 
        with respect to any amount contributed under a qualified 
        payroll deduction arrangement described in section 408(q)(1) 
        (for which an election has not been made under section 
        408(q)(2)).''.
                    (B) Section 219(g)(1) (relating to the limitation 
                on deduction for active participants) is amended to 
                read as follows:
            ``(1) In general.--If (for any part of any plan year ending 
        with or within a taxable year) an individual is an active 
        participant, each of the dollar limitations contained in 
        subsections (b)(1)(A) and (c)(1)(A) for such taxable year shall 
        be reduced (but not below zero) by the sum of--
                    ``(A) the amount determined under paragraph (2), 
                and
                    ``(B) the amount contributed for the taxable year 
                under a qualified payroll deduction arrangement 
                described in section 408(q)(1) (for which an election 
                has not been made under section 408(q)(2)).''.
            (2) Deductibility of employer contributions.--Section 404 
        (relating to deductions for contributions of an employer to 
        pension, etc., plans) is amended by adding at the end the 
        following new subsection:
    ``(n) Special Rules for Contributions Under a Qualified Payroll 
Deduction Arrangement.--Rules similar to the rules of subsection (m) 
shall apply to employer contributions made under a qualified payroll 
deduction arrangement described in section 408(q)(1) (for which an 
election has not been made under section 408(q)(2)).''.
            (3) Contributions and distributions.--Section 402 (relating 
        to taxability of beneficiary of employees' trust) is amended by 
        adding at the end the following new subsection:
    ``(l) Treatment of Contributions and Distributions Under a 
Qualified Payroll Deduction Arrangement.--Rules similar to the rules of 
paragraphs (1) and (3) of subsection (h) shall apply to contributions 
and distributions made with respect to an individual retirement plan 
under a qualified payroll deduction arrangement described in section 
408(q)(1) (for which an election has not been made under section 
408(q)(2)), except that contributions made by an employer on behalf of 
an employee for a taxable year shall be excluded from income only to 
the extent such contributions would have been deductible for such 
taxable year under section 219, if such section applied, without regard 
to section 219(g)(1)(B). Contributions that are not excluded from 
income under the preceding sentence shall be treated as designated 
nondeductible contributions under section 408(o).''.
    (c) Exemption From Withholding.--Subsection (a) of section 3401 
(defining wages) is amended by striking ``or'' at the end of paragraph 
(20), by striking the period at the end of paragraph (21) and inserting 
``; or'', and by inserting after paragraph (21) the following new 
paragraph:
            ``(22) for any payment made for the benefit of the employee 
        to an individual retirement plan if the amount of such payment 
        was deducted and withheld under section 408(q).''.
    (d) Exclusion Shown on W-2.--Subsection (a) of section 6051 
(relating to receipts for employees) is amended by striking ``and'' at 
the end of paragraph (10), by striking the period at the end of 
paragraph (11) and inserting ``, and'', and by inserting after 
paragraph (11) the following new paragraph:
            ``(12) the total amount deducted and withheld pursuant to 
        section 408(q).''.
    (e) Effective Date.--The amendments made by this section shall 
apply to remuneration paid after December 31, 1998.

SEC. 103. NONREFUNDABLE TAX CREDIT FOR CONTRIBUTIONS TO INDIVIDUAL 
              RETIREMENT PLANS.

    (a) In General.--Subpart A of part IV of subchapter A of chapter 1 
(relating to nonrefundable personal credits) is amended by inserting 
after section 25A the following new section:

``SEC. 25B. RETIREMENT SAVINGS.

    ``(a) Allowance of Credit.--There shall be allowed as a credit 
against the tax imposed by this chapter so much of the qualified 
retirement contributions of the taxpayer for the taxable year as does 
not exceed the applicable amount of the adjusted gross income of the 
taxpayer for such year.
    ``(b) Applicable Amount.--For purposes of subsection (a), the 
applicable amount is determined in accordance with the following table:

``If adjusted gross income is:      The applicable amount is:
    Not over $15,000...............
                                        $450.
    Over $15,000 but not over 
        $20,000.
                                        $400.
    Over $20,000 but not over 
        $25,000.
                                        $350.
    Over $25,000 but not over 
        $30,000.
                                        $300.
    Over $30,000...................
                                        $0.
    ``(c) Section Not To Apply to Certain Contributions.--This section 
shall not apply with respect to--
            ``(1) an employer contribution to a simplified employee 
        pension,
            ``(2) any amount contributed to a simple retirement account 
        established under section 408(p),
            ``(3) any amount contributed to a Roth IRA, and
            ``(4) any designated nondeductible contribution (as defined 
        in section 408(o)(2)(C)).
    ``(d) Other Limitations and Restrictions.--
            ``(1) Beneficiary must be under age 70\1/2\.--No credit 
        shall be allowed under this section with respect to any 
        qualified retirement contribution for the benefit of an 
        individual if such individual has attained age 70\1/2\ before 
        the close of such individual's taxable year for which the 
        contribution was made.
            ``(2) Recontributed amounts.--No credit shall be allowed 
        under this section with respect to a rollover contribution 
        described in section 402(c), 403(a)(4), 403(b)(8), or 
        408(d)(3).
            ``(3) Amounts contributed under endowment contract.--In the 
        case of an endowment contract described in section 408(b), no 
        credit shall be allowed under this section for that portion of 
        the amounts paid under the contract for the taxable year which 
        is properly allocable, under regulations prescribed by the 
        Secretary, to the cost of life insurance.
            ``(4) Denial of credit for amount contributed to inherited 
        annuities or accounts.--No credit shall be allowed under this 
        section with respect to any amount paid to an inherited 
        individual retirement account or individual retirement annuity 
        (within the meaning of section 408(d)(3)(C)(ii)).
            ``(5) No double benefit.--No credit shall be allowed under 
        this section for any taxable year with respect to the amount of 
        any qualified retirement contribution for the benefit of an 
individual if such individual takes a deduction with respect to such 
amount under section 219 for such taxable year.
    ``(e) Qualified Retirement Contribution.--For purposes of this 
section, the term `qualified retirement contribution' means--
            ``(1) any amount paid in cash for the taxable year by or on 
        behalf of an individual to an individual retirement plan for 
        such individual's benefit, and
            ``(2) any amount contributed on behalf of any individual to 
        a plan described in section 501(c)(18).
    ``(f) Other Definitions and Special Rules.--
            ``(1) Compensation.--For purposes of this section, the term 
        `compensation' has the meaning given in section 219(f)(1).
            ``(2) Married couples must file joint return.--If the 
        taxpayer is married at the close of the taxable year, the 
        credit shall be allowed under subsection (a) only if the 
        taxpayer and the taxpayer's spouse file a joint return for the 
        taxable year.
            ``(3) Time when contributions deemed made.--For purposes of 
        this section, a taxpayer shall be deemed to have made a 
        contribution to an individual retirement plan on the last day 
        of the preceding taxable year if the contribution is made on 
        account of such taxable year and is made not later than the 
        time prescribed by law for filing the return for such taxable 
        year (not including extensions thereof).
            ``(4) Employer payments.--For purposes of this title, any 
        amount paid by an employer to an individual retirement plan 
        shall be treated as payment of compensation to the employee 
        (other than a self-employed individual who is an employee 
        within the meaning of section 401(c)(1)) includible in his 
        gross income in the taxable year for which the amount was 
        contributed, whether or not a credit for such payment is 
        allowable under this section to the employee.''
    (b) Conforming Amendments.--
            (1) Section 86(f) is amended by redesignating paragraphs 
        (2), (3), and (4) as paragraphs (3), (4), and (5), 
        respectively, and by inserting after paragraph (1) the 
        following new paragraph:
            ``(2) section 25B(f)(1) (defining compensation),''.
            (2) Clause (i) of section 501(c)(18)(D) is amended by 
        inserting ``which may be taken into account in computing the 
        credit allowable under section 25B or'' before ``with 
        respect''.
            (3) Section 6047(c) is amended by inserting ``section 25B 
        or'' before ``section 219''.
            (4) Section 6652(g) is amended by inserting ``Creditable'' 
        before ``Deductible'' in the heading thereof.
            (5) The table of sections for subpart A of part IV of 
        subchapter A of chapter 1 is amended by inserting after the 
        item relating to section 25A the following new item:

                              ``Sec. 25B. Retirement savings.''
    (c) Effective Date.--The amendments made by this section apply to 
taxable years beginning after December 31, 1998.

SEC. 104. DISTRIBUTIONS FROM CERTAIN PLANS MAY BE USED WITHOUT PENALTY 
              DURING PERIODS OF UNEMPLOYMENT.

    (a) In General.--Paragraph (2) of section 72(t) (relating to 
exceptions to 10-percent additional tax on early distributions from 
qualified retirement plans) is amended by adding at the end the 
following new subparagraph:
                    ``(G) Additional distributions to unemployed 
                individuals.--
                            ``(i) In general.--Distributions from an 
                        individual retirement plan, or from amounts 
                        attributable to employer contributions made 
                        pursuant to elective deferrals described in 
                        subparagraph (A) or (C) of section 402(g)(3) or 
                        section 501(c)(18)(D)(iii), to an individual 
                        after separation from employment if--
                                    ``(I) such individual has received 
                                unemployment compensation for 12 
                                consecutive weeks under any Federal or 
                                State unemployment compensation law by 
                                reason of such separation, and
                                    ``(II) such distributions are made 
                                during the 1-year period beginning on 
                                the date of such separation.
                            ``(ii) Distributions after reemployment.--
                        Clause (i) shall not apply to any distribution 
                        made after the individual has been employed for 
                        at least 60 days after the separation from 
                        employment to which clause (i) applies.
                            ``(iii) Coordination with subparagraph 
                        (d).--Distributions during the 1-year period 
                        described in clause (i)(II) shall not be taken 
                        into account in applying the limitation under 
                        subparagraph (D)(i)(III).''
    (b) Conforming Amendments.--
            (1) Section 401(k)(2)(B)(i) is amended by striking ``or'' 
        at the end of subclause (III), by striking ``and'' at the end 
        of subclause (IV) and inserting ``or'', and by inserting after 
        subclause (IV) the following new subclause:
                                    ``(V) the date on which a period 
                                referred to in section 72(t)(2)(G) 
                                begins, and''.
            (2) Section 403(b)(11) is amended by striking ``or'' at the 
        end of subparagraph (A), by striking the period at the end of 
        subparagraph (B) and inserting ``, or'', and by inserting after 
        subparagraph (B) the following new subparagraph:
                    ``(C) for distributions to which section 
                72(t)(2)(G) applies.''
    (c) Effective Date.--The amendments made by this section shall 
apply to distributions after the date of the enactment of this Act.

     Subtitle B--Secure Money Annuity or Retirement (SMART) Trusts

SEC. 111. SECURE MONEY ANNUITY OR RETIREMENT (SMART) TRUSTS.

    (a) In General.--Subpart A of part I of subchapter D of chapter 1 
is amended by inserting after section 408A the following new section:

``SEC. 408B. SMART PLANS.

    ``(a) Employer Eligibility.--
            ``(1) In general.--An employer may establish and maintain a 
        SMART annuity or a SMART trust for any year only if--
                    ``(A) the employer is an eligible employer (as 
                defined in section 408(p)(2)(C)), and
                    ``(B) the employer does not maintain (and no 
                predecessor of the employer maintains) a qualified plan 
                (other than a permissible plan) with respect to which 
                contributions were made, or benefits were accrued, for 
                service in any year in the period beginning with the 
                year such annuity or trust became effective and ending 
                with the year for which the determination is being 
                made.
        The period described in subparagraph (B) shall include the 
        period of 5 years before the year such trust or annuity became 
        effective with respect to qualified plans which are defined 
        benefit plans or money purchase pension plans.
            ``(2) Definitions.--For purposes of paragraph (1)--
                    ``(A) Qualified plan.--The term `qualified plan' 
                has the meaning given such term by section 
                408(p)(2)(D)(ii).
                    ``(B) Permissible plan.--The term `permissible 
                plan' means--
                            ``(i) a SIMPLE plan described in section 
                        408(p),
                            ``(ii) a SIMPLE 401(k) plan described in 
                        section 401(k)(11),
                            ``(iii) an eligible deferred compensation 
                        plan described in section 457(b),
                            ``(iv) a collectively bargained plan but 
                        only if the employees eligible to participate 
                        in such plan are not also entitled to a benefit 
                        described in subsection (b)(5) or (c)(5), or
                            ``(v) a plan under which there may be made 
                        only--
                                    ``(I) elective deferrals described 
                                in section 402(g)(3), and
                                    ``(II) employer matching 
                                contributions not in excess of the 
                                amounts described in subclauses (I) and 
                                (II) of section 401(k)(12)(B)(i).
    ``(b) SMART Annuity.--
            ``(1) In general.--For purposes of this title, the term 
        `SMART annuity' means an individual retirement annuity (as 
        defined in section 408(b) without regard to paragraph (2) 
        thereof and without regard to the limitation on aggregate 
        annual premiums contained in the flush language of section 
        408(b)) if--
                    ``(A) such annuity meets the requirements of 
                paragraphs (2) through (8), and
                    ``(B) the only contributions to such annuity are 
                employer contributions.
        Nothing in this section shall be construed as preventing an 
        employer from using a group annuity contract which is divisible 
        into individual retirement annuities for purposes of providing 
        SMART annuities.
            ``(2) Participation requirements.--
                    ``(A) In general.--The requirements of this 
                paragraph are met for any year only if all employees of 
                the employer who--
                            ``(i) received at least $5,000 in 
                        compensation from the employer during any 2 
                        consecutive preceding years, and
                            ``(ii) received at least $5,000 in 
                        compensation during the year,
                are entitled to the benefit described in paragraph (5) 
                for such year.
                    ``(B) Excludable employees.--An employer may elect 
                to exclude from the requirements under subparagraph (A) 
                employees described in subparagraph (A) or (C) of 
                section 410(b)(3).
            ``(3) Vesting.--The requirements of this paragraph are met 
        if the employee's rights to any benefits under the annuity are 
        nonforfeitable.
            ``(4) Benefit form.--The requirements of this paragraph are 
        met if the only form of benefit is--
                    ``(A) a benefit payable annually in the form of a 
                single life annuity with monthly payments (with no 
                ancillary benefits) beginning at age 65, or
                    ``(B) any other form of benefit which is the 
                actuarial equivalent (based on the 
assumptions specified in the SMART annuity) of the benefit described in 
subparagraph (A).
            ``(5) Amount of annual accrued benefit.--
                    ``(A) In general.--The requirements of this 
                paragraph are met for any plan year if the accrued 
                benefit of each participant derived from employer 
                contributions for such year, when expressed as a 
                benefit described in paragraph (4)(A), equals the 
                applicable percentage of the participant's compensation 
                for such year.
                    ``(B) Applicable percentage.--For purposes of this 
                paragraph--
                            ``(i) In general.--The term `applicable 
                        percentage' means 2 percent.
                            ``(ii) Election of different percentage.--
                        An employer may elect to apply an applicable 
                        percentage of 1 percent for any year for all 
                        employees eligible to participate in the plan 
                        for such year, if the employer notifies the 
                        employees of such percentage within a 
                        reasonable period before the beginning of such 
                        year. An employer may also elect to apply an 
                        applicable percentage of 3 percent for any of 
                        the first 5 years that the plan is effective 
                        for all employees eligible to participate in 
                        the plan for such year, if the employer so 
                        notifies the employees.
                    ``(C) Compensation limit.--
                            ``(i) In general.--The compensation taken 
                        into account under this paragraph for any year 
                        shall not exceed $100,000.
                            ``(ii) Cost-of-living adjustment.--The 
                        Secretary shall adjust annually the $100,000 
                        amount in clause (i) for increases in the cost-
                        of-living at the same time and in the same 
                        manner as adjustments under section 415(d); 
                        except that the base period shall be the 
                        calendar quarter beginning October 1, 1998, and 
                        any increase which is not a multiple of $5,000 
                        shall be rounded to the next lowest multiple of 
                        $5,000.
            ``(6) Funding.--
                    ``(A) In general.--The requirements of this 
                paragraph are met only if the employer is required to 
                contribute to the annuity for each plan year the amount 
                necessary to purchase a SMART annuity in the amount of 
                the benefit accrued for such year for each participant 
                entitled to such benefit. Such contribution must be 
                made no later than 8\1/2\ months after the end of the 
                plan year.
                    ``(B) Penalty for failure to make required 
                contribution.--The taxes imposed by section 4971 shall 
                apply to a failure to make the contribution required by 
                this paragraph in the same manner as if the amount of 
                the failure were an accumulated funding deficiency to 
                which such section applies.
            ``(7) Limitation on distributions.--
                    ``(A) In general.--The requirements of this 
                paragraph are met only if distributions may be paid 
                only when the employee attains age 65, separates from 
                service, dies, or becomes disabled (within the meaning 
                of section 72(m)(7)).
                    ``(B) Limitation on distributions on separation 
                from service of employees who have not attained age 
                65.--Subparagraph (A) shall apply to a distribution on 
                separation of service of an employee who has not 
                attained age 65 only if--
                            ``(i) the aggregate cash value of an 
                        employee's SMART annuities does not exceed the 
                        dollar limit in effect under section 
                        411(a)(11)(A), or
                            ``(ii) the distribution is a direct 
                        trustee-to-trustee transfer of the entire 
                        balance to the credit of the employee to a 
                        SMART trust described in subsection (c), a 
                        SMART rollover plan, or a SMART annuity for the 
                        benefit of such employee.
            ``(8) Joint and survivor annuity rules applicable.--The 
        requirements of this paragraph are met only if the annuity 
        satisfies section 401(a)(11).
            ``(9) Definitions and special rule.--
                    ``(A) Definitions.--The definitions in section 
                408(p)(6) shall apply for purposes of this subsection.
                    ``(B) Use of designated financial institutions.--A 
                rule similar to the rule of section 408(p)(7) (without 
                regard to the last sentence thereof) shall apply for 
                purposes of this subsection.
                    ``(C) SMART rollover plan.--For purposes of this 
                section, the term `SMART rollover plan' means an 
                individual retirement plan for the benefit of the 
employee to which a rollover was made from a SMART Annuity, SMART 
trust, or another SMART Rollover plan.
    ``(c) SMART Trust.--
            ``(1) In general.--For purposes of this title, the term 
        `SMART trust' means a trust forming part of a defined benefit 
        plan if--
                    ``(A) such trust meets the requirements of section 
                401(a) as modified by subsection (d),
                    ``(B) such plan meets the requirements of 
                paragraphs (2) through (8), and
                    ``(C) the only contributions to such trust are 
                employer contributions.
            ``(2) Participation requirements.--A plan meets the 
        requirements of this paragraph for any year only if the 
        requirements of subsection (b)(2) are met for such year.
            ``(3) Vesting.--A plan meets the requirements of this 
        paragraph for any year only if the requirements of subsection 
        (b)(3) are met for such year.
            ``(4) Benefit form.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), a plan meets the requirements of this 
                paragraph only if the trustee distributes a SMART 
                annuity that satisfies subsection (b)(4) where the 
                annual benefit described in subsection (b)(4)(A) is no 
                less than the accrued benefit determined under 
                paragraph (5).
                    ``(B) Direct transfers to individual retirement 
                plan or smart annuity.--A plan shall not fail to meet 
                the requirements of this paragraph by reason of 
                permitting, as an optional form of benefit, the 
                distribution of the entire balance to the credit of the 
                employee. If the employee is under age 65, such 
                distribution must be in the form of a direct trustee-
                to-trustee transfer to a SMART annuity, another SMART 
                trust, or a SMART rollover plan (or, in the case of a 
                distribution that does not exceed the dollar limit in 
                effect under section 411(a)(11)(A), any other 
                individual retirement plan).
            ``(5) Amount of annual accrued benefit.--A plan meets the 
        requirements of this paragraph for any year only if the 
        requirements of subsection (b)(5) are met for such year.
            ``(6) Funding.--
                    ``(A) In general.--A plan meets the requirements of 
                this paragraph for any year only if--
                            ``(i) the requirements of subparagraph (A) 
                        of subsection (b)(6) are met for such year,
                            ``(ii) in the case of a plan which has an 
                        unfunded annuity amount with respect to the 
                        account of any participant, the plan requires 
                        that the employer make an additional 
                        contribution to such plan (at the time the 
                        annuity contract to which such amount relates 
                        is purchased) equal to the unfunded annuity 
                        amount, and
                            ``(iii) in the case of a plan which has an 
                        unfunded prior year liability as of the close 
                        of such plan year, the plan requires that the 
                        employer make an additional contribution to 
                        such plan for such year equal to the amount of 
                        such unfunded prior year liability no later 
                        than 8\1/2\ months following the end of the 
                        plan year.
                    ``(B) Unfunded annuity amount.--For purposes of 
                this paragraph, the term `unfunded annuity amount' 
                means, with respect to the account of any participant 
                for whom an annuity is being purchased, the excess (if 
                any) of--
                            ``(i) the amount necessary to purchase an 
                        annuity contract which meets the requirements 
                        of subsection (b)(4) in the amount of the 
                        participant's accrued benefit determined under 
                        paragraph (5), over
                            ``(ii) the balance in such account at the 
                        time such contract is purchased.
                    ``(C) Unfunded prior year liability.--For purposes 
                of this paragraph, the term `unfunded prior year 
                liability' means, with respect to any plan year, the 
                excess (if any) of--
                            ``(i) the aggregate of the present value 
                        under the plan as of the close of the prior 
                        plan year, over
                            ``(ii) the value of the plan's assets 
                        determined under section 412(c)(2) as of the 
                        close of the plan year (determined without 
                        regard to any contributions for such plan 
                        year).
                Such present value shall be determined using the 
                assumptions specified in subparagraph (D).
                    ``(D) Actuarial assumptions.--In determining the 
                amount required to be contributed under subparagraph 
                (A)--
                            ``(i) the assumed interest rate shall be 5 
                        percent per year,
                            ``(ii) the assumed mortality shall be 
                        determined under the applicable mortality table 
                        (as defined in section 417(e)(3), as modified 
                        by the Secretary so that it does not include 
                        any assumption for preretirement mortality), 
                        and
                            ``(iii) the assumed retirement age shall be 
                        65.
                    ``(E) Changes in mortality table.--If the 
                applicable mortality table under section 417(e)(3) for 
                any plan year is not the same as such table for the 
                prior plan year, the Secretary shall prescribe 
                regulations which phase in the effect of the changes 
                over a reasonable period of plan years determined by 
                the Secretary.
                    ``(F) Penalty for failure to make required 
                contribution.--The taxes imposed by section 4971 shall 
                apply to a failure to make the contribution required by 
                this paragraph in the same manner as if the amount of 
                the failure were an accumulated funding deficiency to 
                which such section applies.
            ``(7) Separate accounts for participants.--A plan meets the 
        requirements of this paragraph for any year only if the plan 
        provides--
                    ``(A) for an individual account for each 
                participant, and
                    ``(B) for benefits based solely on--
                            ``(i) the amount contributed to the 
                        participant's account,
                            ``(ii) any income, expenses, gains and 
                        losses, and any forfeitures of accounts of 
                        other participants which may be allocated to 
                        such participant's account, and
                            ``(iii) the amount of any unfunded annuity 
                        amount with respect to the participant.
            ``(8) Trust may not hold securities which are not readily 
        tradable.--A plan meets the requirements of this paragraph only 
        if the plan prohibits the trust from holding directly or 
        indirectly securities which are not readily tradable on an 
        established securities market. Nothing in this paragraph shall 
        prohibit the trust from holding insurance company products 
        regulated by State law.
            ``(9) Definitions.--The definitions applicable under 
        subsection (b)(8) shall apply for purposes of this subsection.
    ``(d) Special Rules for SMART Annuities and Trusts.--For purposes 
of section 401(a), a SMART annuity and a SMART trust shall be treated 
as meeting the requirements of the following provisions:
            ``(1) Section 401(a)(4) (relating to nondiscrimination 
        rules).
            ``(2) Section 401(a)(26) (relating to minimum 
        participation).
            ``(3) Section 410 (relating to minimum participation and 
        coverage requirements).
            ``(4) Section 411(b) (relating to accrued benefit 
        requirements).
            ``(5) Section 416 (relating to special rules for top-heavy 
        plans).''
    (b) Deduction Rules.--
            (1) In general.--Section 404 is amended by adding at the 
        end the following new subsection:
    ``(n) Special Rules for SMART Annuities and Trusts.--
            ``(1) In general.--Employer contributions to a SMART 
        annuity shall be treated as if they are made to a plan 
        described in paragraph (1) of subsection (a).
            ``(2) Deductible limit.--For purposes of section 
        404(a)(1)(A)(i), the amount necessary to satisfy the minimum 
        funding requirement of section 408B(b)(6) or (c)(6) shall be 
        treated as the amount necessary to satisfy the minimum funding 
        requirement of section 412.''
            (2) Coordination with deduction under section 219.--
                    (A) Section 219(b) is amended by adding at the end 
                the following new paragraph:
            ``(5) Special rule for smart annuities.--This section shall 
        not apply with respect to any amount contributed to a SMART 
        annuity established under section 408B(b).''
                    (B) Section 219(g)(5)(A) (defining active 
                participant) is amended by striking ``or'' at the end 
                of clause (v) and by adding at the end the following 
                new clause:
                            ``(vii) any SMART annuity (within the 
                        meaning of section 408B), or''.
    (c) Contributions and Distributions.--
            (1) Section 402 is amended by adding at the end the 
        following new subsection:
    ``(l) Treatment of SMART Annuities.--Rules similar to the rules of 
paragraphs (1) and (3) of subsection (h) shall apply to contributions 
and distributions with respect to SMART annuities under section 408B.''
            (2) Section 408(d)(3) is amended by adding at the end the 
        following new subparagraph:
                    ``(H) SMART annuities.--This paragraph shall not 
                apply to any amount paid or distributed out of a SMART 
                annuity (as defined in section 408B) unless it is paid 
                in a trustee-to-trustee transfer into a SMART rollover 
                plan.''
            (3)(A) Section 412(h) is amended by striking ``or'' at the 
        end of paragraph (5), by striking the period at the end of 
        paragraph (6) and inserting ``, or'', and by inserting after 
        paragraph (6) the following new paragraph:
            ``(7) any plan providing for the purchase of any SMART 
        annuity or any SMART plan.''
            (B) Section 301(a) of Employee Retirement Income Security 
        Act of 1974 (29 U.S.C. 1081) is amended by striking ``or'' at 
        the end of paragraph (9), by striking the period at the end of 
        paragraph (10) and inserting ``; or'', and by adding at the end 
        the following new paragraph:
            ``(11) any plan providing for the purchase of any SMART 
        annuity or any SMART plan (as such terms are defined in section 
        408B of such Code).''
            (4) Section 415(b) is amended by adding at the end the 
        following new paragraph:
            ``(12) Treatment of smart annuities and trusts.--A SMART 
        annuity and a SMART trust shall be treated as meeting the 
        requirements of this section, but distributions from such an 
        annuity or trust shall be taken into account in determining 
        whether any other plan satisfies the requirements of this 
        section.''
    (d) Increased Penalty on Early Withdrawals.--Section 72(t) 
(relating to additional tax on early distributions) is amended by 
adding at the end the following new paragraph:
            ``(9) Special rules for smart annuities and trusts.--In the 
        case of any amount received from a SMART annuity, a SMART 
        trust, or a SMART rollover plan (within the meaning of section 
        408B), paragraph (1) shall be applied by substituting `20 
        percent' for `10 percent' and paragraph (2) shall be applied by 
        substituting `age 65' for `age 59\1/2\'.''
    (e) Simplified Employer Reports.--
            (1) SMART annuities.--Section 408(l) (relating to 
        simplified employer reports) is amended by adding at the end 
        the following new paragraph:
            ``(3) SMART annuities.--
                    ``(A) Simplified report.--The employer maintaining 
                any SMART annuity (within the meaning of section 408B) 
                shall file a simplified annual return with the 
                Secretary containing only the information described in 
                subparagraph (B).
                    ``(B) Contents.--The return required by 
                subparagraph (A) shall set forth--
                            ``(i) the name and address of the employer,
                            ``(ii) the date the plan was adopted,
                            ``(iii) the number of employees of the 
                        employer,
                            ``(iv) the number of such employees who are 
                        eligible to participate in the plan,
                            ``(v) the total amount contributed by the 
                        employer to each such annuity for such year and 
                        the minimum amount required under section 408B 
                        to be so contributed,
                            ``(vi) the percentage elected under section 
                        408B(b)(5)(B),
                            ``(vii) the name of the issuer,
                            ``(viii) the employer identification 
                        number,
                            ``(ix) the name of the plan, and
                            ``(x) the date of the contribution.
                    ``(C) Reporting by issuer of smart annuity.--
                            ``(i) In general.--The issuer of each SMART 
                        annuity shall provide to the owner of the 
                        annuity for each year a statement setting forth 
                        as of the close of such year--
                                    ``(I) the benefits guaranteed at 
                                age 65 under the annuity, and
                                    ``(II) the cash surrender value of 
                                the annuity.
                            ``(ii) Summary description.--The issuer of 
                        any SMART annuity shall provide to the employer 
                        maintaining the annuity for each year a 
                        description containing the following 
                        information:
                                    ``(I) The name and address of the 
                                employer and the issuer.
                                    ``(II) The requirements for 
                                eligibility for participation.
                                    ``(III) The benefits provided with 
                                respect to the annuity.
                                    ``(IV) The procedures for, and 
                                effects of, withdrawals (including 
                                rollovers) from the annuity.
                    ``(D) Time and manner of reporting.--Any return, 
                report, or statement required under this paragraph 
                shall be made in such form and at such time as the 
                Secretary shall prescribe.''
            (2) SMART trusts.--Section 6059 (relating to actuarial 
        reports) is amended by redesignating subsections (c) and (d) as 
        subsections (d) and (e), respectively, and by inserting after 
        subsection (b) the following new subsection:
    ``(c) SMART Trusts.--In the case of a SMART trust (within the 
meaning of section 408B), the Secretary shall require a simplified 
actuarial report which contains--
            ``(1) information similar to the information required in 
        section 408(l)(3)(B),
            ``(2) the fair market value of the assets of the trust,
            ``(3) the amounts distributed directly to participants,
            ``(4) the amounts transferred to SMART rollover plans, and
            ``(5) the present value of the annual accrued benefits 
        under the plan to which the trust relates.''
    (f) Conforming Amendments.--
            (1) Subparagraph (A) of section 219(g)(5) is amended by 
        striking ``or'' at the end of clause (v) and by inserting after 
        clause (vi) the following new clause:
                            ``(vii) any SMART trust or SMART annuity 
                        (within the meaning of section 408B), or''.
            (2) Section 280G(b)(6) is amended by striking ``or'' at the 
        end of subparagraph (C), by striking the period at the end of 
        subparagraph (D) and inserting ``, or'' and by adding after 
        subparagraph (D) the following new subparagraph:
                    ``(E) a SMART annuity described in section 408B.''
            (3) Subsections (b), (c), (m)(4)(B), and (n)(3)(B) of 
        section 414 are each amended by inserting ``408B,'' after 
        ``408(p),''.
            (4) Section 4972(d)(1)(A) is amended by striking ``and'' at 
        the end of clause (iii), by striking the period at the end of 
        clause (iv) and inserting ``, and'', and by adding after clause 
        (iv) the following new clause:
                            ``(v) any SMART annuity (within the meaning 
                        of section 408B).''
    (g) Reporting Requirements Under ERISA.--Section 101 of the 
Employee Retirement Income Security Act of 1974 (29 U.S.C. 1021) is 
amended by redesignating subsection (h) as subsection (i) and by 
inserting after subsection (g) the following new subsection:
    ``(h) SMART Annuities.--
            ``(1) No employer reports.--Except as provided in this 
        subsection, no report shall be required under this section by 
        an employer maintaining a SMART annuity under section 408B(b) 
        of the Internal Revenue Code of 1986.
            ``(2) Summary description.--The issuer of any SMART annuity 
        shall provide to the employer maintaining the annuity for each 
        year a description containing the following information:
                    ``(A) The name and address of the employer and the 
                issuer.
                    ``(B) The requirements for eligibility for 
                participation.
                    ``(C) The benefits provided with respect to the 
                annuity.
                    ``(D) The procedures for, and effects of, 
                withdrawals (including rollovers) from the annuity.''
            ``(3) Employee notification.--The employer shall provide 
        each employee eligible to participate in the SMART annuity with 
        the description described in paragraph (2) at the same time as 
        the notification required under section 408B(b)(5)(B) of the 
        Internal Revenue Code of 1986.''
    (h) $5 Per Participant PBGC Premium.--Subparagraph (A) of section 
4006(a)(3) of the Employee Retirement Income Security Act of 1974 (29 
U.S.C. 1306) is amended--
            (1) by inserting ``not described in clause (iv)'' after 
        ``in the case of a single-employer plan'' in clause (i),
            (2) by striking the period at the end of clause (iii) and 
        inserting ``; and'', and
            (3) by inserting after clause (iii) the following new 
        clause:
            ``(iv) in the case of a single-employer plan described in 
        section 408B(c) of the Internal Revenue Code of 1986, an amount 
        equal to $5 for each participant.''.
    (i) Clerical Amendment.--The table of sections for subpart A of 
part I of subchapter D of chapter 1 is amended by inserting after the 
item relating to section 408A the following new item:

                              ``Sec. 408B. SMART plans.''
    (j) Effective Date.--The amendments made by this section shall 
apply to years beginning after December 31, 1998.

       Subtitle C--Improved Fairness in Retirement Plan Benefits

SEC. 121. AMENDMENTS TO SIMPLE RETIREMENT ACCOUNTS.

    (a) Minimum Contribution Requirement.--
            (1) In general.--Paragraph (2) of section 408(p) (defining 
        qualified salary reduction arrangement) is amended--
                    (A) by striking clauses (iii) and (iv) of 
                subparagraph (A) and inserting the following new 
                clauses:
                            ``(iii) the employer is required to make a 
                        matching contribution to the simple retirement 
                        account for any year in an amount equal to--
                                    ``(I) so much of the amount the 
                                employee elects under clause (i)(I) as 
                                does not exceed 3 percent of 
                                compensation for the year, and
                                    ``(II) a uniform percentage (which 
                                is at least 50 percent but not more 
                                than 100 percent) of the amount the 
                                employee elects under clause (i)(I) to 
                                the extent that such amount exceeds 3 
                                percent but does not exceed 5 percent 
                                of the employee's compensation,
                            ``(iv) the employer is required to make 
                        nonelective contributions of 1 percent of 
                        compensation for each employee eligible to 
                        participate in the arrangement who has at least 
                        $5,000 of compensation from the employer for 
                        the year, and
                            ``(v) no contributions may be made other 
                        than contributions described in clause (i), 
                        (iii), or (iv).'', and
                    (B) by striking subparagraph (B) and inserting the 
                following new subparagraph:
                    ``(B) Contribution rules.--
                            ``(i) Employer may elect 3-percent 
                        nonelective contribution.--An employer shall be 
                        treated as meeting the requirements of clauses 
                        (iii) and (iv) of subparagraph (A) for any year 
                        if, in lieu of the contributions described in 
                        such clauses, the employer elects to make 
                        nonelective contributions of 3 percent of 
                        compensation for each employee who is eligible 
                        to participate in the arrangement and who has 
                        at least $5,000 of compensation from the 
                        employer for the year. If an employer makes an 
                        election under this clause for any year, the 
                        employer shall notify employees of such 
                        election within a reasonable period of time 
                        before the 60-day period for such year under 
                        paragraph (5)(C).
                            ``(ii) Discretionary contributions.--A plan 
                        shall not be treated as failing to meet the 
                        requirements of subparagraph (A)(v) merely 
                        because, pursuant to the terms of the plan, an 
                        employer makes nonelective contributions under 
                        subparagraph (A)(iv) or clause (i) of this 
                        subparagraph in excess of 1 percent or 3 
                        percent of compensation, respectively, but only 
                        if all such contributions bear a uniform 
                        relationship to the compensation of each 
                        eligible employee and do not exceed 5 percent 
                        of compensation for any eligible employee.
                            ``(iii) Compensation limitation.--The 
                        compensation taken into account under this 
                        paragraph for any year shall not exceed the 
                        limitation in effect for such year under 
                        section 401(a)(17).''
            (2) Matching contributions.--Subparagraph (B) of section 
        401(k)(11) (relating to adoption of simple plan to meet 
        nondiscrimination tests) is amended--
                    (A) by striking subclauses (II) and (III) of clause 
                (i) and inserting the following new subclauses:
                                    ``(II) the employer is required to 
                                make a matching contribution to the 
                                trust for any year in an amount equal 
                                to--
                                            ``(aa) so much of the 
                                        amount the employee elects 
                                        under subclause (I) as does not 
                                        exceed 3 percent of 
                                        compensation for the year, and
                                            ``(bb) a uniform percentage 
                                        (which is at least 50 percent 
                                        but not more than 100 percent) 
of the amount the employee elects under subclause (I) to the extent 
that such amount exceeds 3 percent but does not exceed 5 percent of the 
employee's compensation,
                                    ``(III) the employer is required to 
                                make nonelective contributions of 1 
                                percent of compensation for each 
                                employee eligible to participate in the 
                                arrangement who has at least $5,000 of 
                                compensation from the employer for the 
                                year, and
                                    ``(IV) no other contributions may 
                                be made other than contributions 
                                described in subclause (I), (II), or 
                                (III).'', and
                    (B) by striking clause (ii) and inserting the 
                following new clause:
                            ``(ii) Contribution rules.--
                                    ``(I) Employer may elect 3-percent 
                                nonelective contribution.--An employer 
                                shall be treated as meeting the 
                                requirements of subclauses (II) and 
                                (III) of clause (i) for any year if, in 
                                lieu of the contributions described in 
                                such subclauses, the employer elects to 
                                make nonelective contributions of 3 
                                percent of compensation for each 
                                employee who is eligible to participate 
                                in the arrangement and who has at least 
                                $5,000 of compensation from the 
                                employer for the year. If an employer 
                                makes an election under this subclause 
                                for any year, the employer shall notify 
                                employees of such election within a 
                                reasonable period of time before the 
                                60th day before the beginning of such 
                                year.
                                    ``(II) Discretionary 
                                contributions.--A plan shall not be 
                                treated as failing to meet the 
                                requirements of clause (i)(IV) merely 
                                because, pursuant to the terms of the 
                                plan, an employer makes nonelective 
                                contributions under clause (i)(III) or 
                                subclause (I) of this clause in excess 
                                of 1 percent or 3 percent of 
                                compensation, respectively, but only if 
                                all such contributions bear a uniform 
                                relationship to the compensation of 
                                each eligible employee and do not 
                                exceed 5 percent of compensation for 
                                any eligible employee.''
    (b) Option To Suspend Contributions.--Section 408(p) (relating to 
simple retirement accounts) is amended by adding at the end the 
following new paragraph:
            ``(10) Suspension of plan.--Except as provided by the 
        Secretary, a plan shall not be treated as failing to meet the 
        requirements of this subsection if, under the plan, the 
        employer may suspend all elective, matching, and nonelective 
        contributions under the plan after notifying employees eligible 
        to participate in the arrangement of such suspension in writing 
        at least 30 days in advance. Such suspension shall apply to 
        contributions with respect to compensation earned after the 
        effective date of the suspension. Only 1 suspension under this 
        paragraph may take effect during any year.''
    (c) Conforming Amendments.--Section 408(p)(2)(C) is amended--
            (1) by striking clause (ii),
            (2) by striking ``Definitions'' in the heading and 
        inserting ``Eligible employer'',
            (3) by striking ``(i) Eligible employer.--'', and
            (4) by redesignating subclauses (I) and (II) as clauses (i) 
        and (ii), respectively.
    (d) Effective Date.--
            (1) In general.--Except as provided in paragraph (2), the 
        amendments made by this section shall apply to taxable years 
        beginning after December 31, 1998.
            (2) Delayed effective date for plans established in 1997 or 
        1998.--In the case of plans established in 1997 or 1998 under 
        section 408(p) of the Internal Revenue Code of 1986, the 
        amendments made by this section shall apply to taxable years 
        beginning after December 31, 2002.

SEC. 122. NONDISCRIMINATION RULES FOR QUALIFIED CASH OR DEFERRED 
              ARRANGEMENTS AND MATCHING CONTRIBUTIONS.

    (a) Alternative Methods of Satisfying Section 401(k) 
Nondiscrimination Tests.--Subparagraph (B) of section 401(k)(12) 
(relating to alternative methods of meeting nondiscrimination 
requirements) is amended to read as follows:
                    ``(B) Nonelective and matching contributions.--
                            ``(i) In general.--The requirements of this 
                        subparagraph are met if the requirements of 
                        clauses (ii) and (iii) are met.
                            ``(ii) Nonelective contributions.--The 
                        requirements of this clause are met if, under 
                        the arrangement, the employer is required, 
                        without regard to whether the employee makes an 
                        elective contribution or employee contribution, 
                        to make a contribution to a defined 
                        contribution plan on behalf of each employee 
                        who is not a highly compensated employee and 
                        who is eligible to participate in the 
                        arrangement in an amount equal to at least 1 
                        percent of the employee's compensation.
                            ``(iii) Matching contributions.--The 
                        requirements of this clause are met if, under 
                        the arrangement, the employer makes matching 
                        contributions on behalf of each employee who is 
                        not a highly compensated employee in an amount 
                        equal to--
                                    ``(I) 100 percent of the elective 
                                contributions of the employee to the 
                                extent such elective contributions do 
                                not exceed 3 percent of the employee's 
                                compensation, and
                                    ``(II) 50 percent of the elective 
                                contributions of the employee to the 
                                extent that such elective contributions 
                                exceed 3 percent but do not exceed 5 
                                percent of the employee's compensation.
                            ``(iv) Rate for highly compensated 
                        employees.--The requirements of clause (iii) 
                        are not met if, under the arrangement, the rate 
                        of matching contribution with respect to any 
                        rate of elective contribution of a highly 
                        compensated employee is greater than that with 
                        respect to an employee who is not a highly 
                        compensated employee. For purposes of this 
                        clause, to the extent provided in regulations, 
                        the last sentences of paragraph (3)(A) and 
                        subsection (m)(2)(B) shall not apply.
                            ``(v) Alternative plan designs.--If the 
                        rate of matching contribution with respect to 
                        any rate of elective contribution is not equal 
                        to the percentage required under clause (iii), 
                        an arrangement shall not be treated as failing 
                        to meet the requirements of clause (iii) if--
                                    ``(I) the rate of an employer's 
                                matching contribution does not increase 
                                as an employee's rate of elective 
                                contribution increase, and
                                    ``(II) the aggregate amount of 
                                matching contributions at such rate of 
                                elective contribution is at least equal 
                                to the aggregate amount of matching 
                                contributions which would be made if 
                                matching contributions were made on the 
                                basis of the percentages described in 
                                clause (iii).''
    (b) Contributions Part of Qualified Cash or Deferred Arrangement.--
Subparagraph (E)(ii) of section 401(k)(12) is amended to read as 
follows:
                            ``(ii) Social security and similar 
                        contributions not taken into account.--Except 
                        as provided in regulations, an arrangement 
                        shall not be treated as meeting the 
                        requirements of subparagraph (B) or (C) unless 
                        such requirements are met without regard to 
                        subsection (l), and, for purposes of subsection 
                        (l), and determining whether contributions 
                        provided under a plan satisfy subsection (a)(4) 
                        on the basis of equivalent benefits, employer 
                        contributions under subparagraph (B) or (C) 
                        shall not be taken into account.''
    (c) Alternative Methods of Satisfying Section 401(m) 
Nondiscrimination Tests.--Section 401(m)(11) (relating to alternative 
method of satisfying tests) is amended--
            (1) by striking ``subparagraph (B)'' in subparagraph 
        (A)(iii) and inserting ``subparagraphs (B) and (C)'',
            (2) by adding at the end of subparagraph (B) the following 
        new flush sentence:
                ``To the extent provided in regulations, the last 
                sentences of paragraph (2)(B) and subsection (k)(3)(A) 
                shall not apply for purposes of clause (iii).'', and
            (3) by adding at the end the following new subparagraph:
                    ``(C) Test must be met separately.--If this 
                paragraph applies to any matching contributions, such 
                contributions shall not be taken into account in 
                determining whether employee contributions satisfy the 
                requirements of this subsection.''
    (d) Special Rule for Determining Average Deferral Percentage for 
First Plan Year, Etc.--Subparagraph (E) of section 401(k)(3) is amended 
to read as follows:
                    ``(E) For purposes of this paragraph, in the case 
                of the first plan year of any plan, the amount taken 
                into account as the actual deferral percentage of 
                nonhighly compensated employees for the preceding plan 
                year shall be--
                            ``(i) 3 percent, or
                            ``(ii) the actual deferral percentage of 
                        nonhighly compensated employees determined for 
                        such first plan year in the case of--
                                    ``(I) an employer who elects to 
                                have this clause apply, or
                                    ``(II) except to the extent 
                                provided by the Secretary, a successor 
                                plan.''
    (e) Effective Date.--The amendments made by this section shall 
apply to years beginning after December 31, 1998.

SEC. 123. DEFINITION OF HIGHLY COMPENSATED EMPLOYEES.

    (a) In General.--Subparagraph (B) of section 414(q)(1) (defining 
highly compensated employee) is amended to read as follows:
                    ``(B) for the preceding year had compensation from 
                the employer in excess of $80,000.''
    (b) Conforming Amendments.--
            (1)(A) Subsection (q) of section 414 is amended by striking 
        paragraphs (3), (5), and (7) and by redesignating paragraphs 
        (4), (6), (8), and (9) as paragraphs (3) through (6), 
        respectively.
            (B) Sections 129(d)(8)(B), 401(a)(5)(D)(ii), 408(k)(2)(C), 
        and 416(i)(1)(D) are each amended by striking ``section 
        414(q)(4)'' and inserting ``section 414(q)(3)''.
            (C) Section 416(i)(1)(A) is amended by striking ``section 
        414(q)(5)'' and inserting ``section 414(r)(9)''.
            (2)(A) Section 414(r) is amended by adding at the end the 
        following new paragraph:
            ``(9) Excluded employees.--For purposes of paragraph 
        (2)(A), the following employees shall be excluded:
                    ``(A) Employees who have not completed 6 months of 
                service.
                    ``(B) Employees who normally work less than 17\1/2\ 
                hours per week.
                    ``(C) Employees who normally work during not more 
                than 6 months during any year.
                    ``(D) Employees who have not attained the age of 
                21.
                    ``(E) Except to the extent provided in regulations, 
                employees who are included in a unit of employees 
                covered by an agreement which the Secretary of Labor 
                finds to be a collective bargaining agreement between 
                employee representatives and the employer.''
            (B) Subparagraph (A) of section 414(r)(2) is amended by 
        striking ``subsection (q)(5)'' and inserting ``paragraph (9)''.
    (c) Effective Date.--The amendments made by this section shall 
apply to years beginning after December 31, 1998.

SEC. 124. TREATMENT OF MULTIEMPLOYER PLANS UNDER SECTION 415.

    (a) Compensation Limit.--Paragraph (11) of section 415(b) (relating 
to limitation for defined benefit plans) is amended to read as follows:
            ``(11) Special limitation rule for governmental and 
        multiemployer plans.--In the case of a governmental plan (as 
        defined in section 414(d)) or a multiemployer plan (as defined 
        in section 414(f)), subparagraph (B) of paragraph (1) shall not 
        apply.''
    (b) Exemption for Survivor and Disability Benefits.--Subparagraph 
(I) of section 415(b)(2) (relating to limitation for defined benefit 
plans) is amended--
            (1) by inserting ``or a multiemployer plan (as defined in 
        section 414(f))'' after ``section 414(d))'' in clause (i),
            (2) by inserting ``or multiemployer plan'' after 
        ``governmental plan'' in clause (ii), and
            (3) by inserting ``and multiemployer'' after 
        ``governmental'' in the heading.
    (c) Effective Date.--The amendments made by this section shall 
apply to years beginning after December 31, 1998.

SEC. 125. EXEMPTION OF MIRROR PLANS FROM SECTION 457 LIMITS.

    (a) In General.--Subsection (e) of section 457 (relating to 
deferred compensation plans of State and local governments and tax-
exempt organizations) is amended by adding at the end the following new 
paragraph:
            ``(16) Exemption for mirror plans.--
                    ``(A) In general.--Amounts of compensation deferred 
                under a mirror plan shall not be taken into account in 
                applying this section to amounts of compensation 
                deferred under any other deferred compensation plan.
                    ``(B) Mirror plan.--The term `mirror plan' means a 
                plan, program, or arrangement maintained solely for the 
                purpose of providing retirement benefits for employees 
                in excess of the limitations imposed by section 
                401(a)(17) or section 415, or both.''
    (b) Effective Date.--The amendment made by this section shall apply 
to taxable years beginning after December 31, 1998.

SEC. 126. IMMEDIATE PARTICIPATION IN THE THRIFT SAVINGS PLAN FOR 
              FEDERAL EMPLOYEES.

    (a) Elimination of Certain Waiting Periods for Purposes of Employee 
Contributions.--Paragraph (4) of section 8432(b) of title 5, United 
States Code, is amended to read as follows:
    ``(4) The Executive Director shall prescribe such regulations as 
may be necessary to carry out the following:
            ``(A) Notwithstanding subparagraph (A) of paragraph (2), an 
        employee or Member described in such subparagraph shall be 
        afforded a reasonable opportunity to first make an election 
under this subsection beginning on the date of commencing service or, 
if that is not administratively feasible, beginning on the earliest 
date thereafter that such an election becomes administratively 
feasible, as determined by the Executive Director.
            ``(B) An employee or Member described in subparagraph (B) 
        of paragraph (2) shall be afforded a reasonable opportunity to 
        first make an election under this subsection (based on the 
        appointment or election described in such subparagraph) 
        beginning on the date of commencing service pursuant to such 
        appointment or election or, if that is not administratively 
        feasible, beginning on the earliest date thereafter that such 
        an election becomes administratively feasible, as determined by 
        the Executive Director.
            ``(C) Notwithstanding the preceding provisions of this 
        paragraph, contributions under paragraphs (1) and (2) of 
        subsection (c) shall not be payable with respect to any pay 
        period before the earliest pay period for which such 
        contributions would otherwise be allowable under this 
        subsection if this paragraph had not been enacted.
            ``(D) Sections 8351(a)(2), 8440a(a)(2), 8440b(a)(2), 
        8440c(a)(2), and 8440d(a)(2) shall be applied in a manner 
        consistent with the purposes of subparagraphs (A) and (B), to 
        the extent those subparagraphs can be applied with respect 
        thereto.
            ``(E) Nothing in this paragraph shall affect paragraph 
        (3).''
    (b) Technical and Conforming Amendments.--
            (1) Section 8432(a) of title 5, United States Code, is 
        amended--
                    (A) in the first sentence by striking ``(b)(1)'' 
                and inserting ``(b)''; and
                    (B) by amending the second sentence to read as 
                follows: ``Contributions under this subsection pursuant 
                to such an election shall, with respect to each pay 
                period for which such election remains in effect, be 
                made in accordance with a program of regular 
                contributions provided in regulations prescribed by the 
                Executive Director.''
            (2) Section 8432(b)(1)(B) of such title is amended by 
        inserting ``(or any election allowable by virtue of paragraph 
        (4))'' after ``subparagraph (A)''.
            (3) Section 8432(b)(3) of such title is amended by striking 
        ``Notwithstanding paragraph (2)(A), an'' and inserting ``An''.
            (4) Section 8432(i)(1)(B)(ii) of such title is amended by 
        striking ``either elected to terminate individual contributions 
        to the Thrift Savings Fund within 2 months before commencing 
        military service or''.
            (5) Section 8439(a)(1) of such title is amended by 
        inserting ``who makes contributions or'' after ``for each 
        individual'' and by striking ``section 8432(c)(1)'' and 
        inserting ``section 8432''.
            (6) Section 8439(c)(2) of such title is amended by adding 
        at the end the following: ``Nothing in this paragraph shall be 
        considered to limit the dissemination of information only to 
        the times required under the preceding sentence.''
            (7) Sections 8440a(a)(2) and 8440d(a)(2) of such title are 
        amended by striking all after ``subject to'' and inserting 
        ``subject to this chapter.''
    (c) Effective Date.--This section shall take effect 6 months after 
the date of the enactment of this Act or such earlier date as the 
Executive Director may by regulation prescribe.

SEC. 127. FULL FUNDING LIMITATION FOR MULTIEMPLOYER PLANS.

    (a) Amendments to Code.--
            (1) Full funding limitation.--Section 412(c)(7)(C) 
        (relating to full funding limitation) is amended--
                    (A) by inserting ``or in the case of a 
                multiemployer plan,'' after ``paragraph (6)(B),'', and
                    (B) by inserting ``and multiemployer plans'' after 
                ``paragraph (6)(b)'' in the heading thereof.
            (2) Valuation.--Section 412(c)(9) (relating to annual 
        valuation) is amended--
                    (A) by inserting ``(3 years in the case of a 
                multiemployer plan)'' after ``year'', and
                    (B) by striking ``Annual valuation'' in the heading 
                and inserting ``Valuation''.
    (b) Amendments to ERISA.--
            (1) Full funding limitation.--Section 302(c)(7)(C) of the 
        Employee Retirement Income Security Act of 1974 (29 U.S.C. 
        1082(c)(7)(C)) is amended--
                    (A) by inserting ``or in the case of a 
                multiemployer plan,'' after ``paragraph (6)(B),'', and
                    (B) by inserting ``and multiemployer plans'' after 
                ``paragraph (6)(b)'' in the heading thereof.
            (2) Valuation.--Section 302(c)(9) of such Act (29 U.S.C. 
        1082(c)(9)) is amended--
                    (A) by inserting ``(3 years in the case of a 
                multiemployer plan)'' after ``year'', and
                    (B) by striking ``Annual valuation'' in the heading 
                and inserting ``Valuation''.
    (c) Effective Date.--The amendments made by this section shall 
apply to plan years beginning after December 31, 1998.

SEC. 128. ELIMINATION OF PARTIAL TERMINATION RULES FOR MULTIEMPLOYER 
              PLANS.

    (a) Partial Termination Rules for Multiemployer Plans.--Section 
411(d)(3) (relating to termination or partial termination; 
discontinuance of contributions) is amended by adding at the end the 
following new sentence: ``This paragraph shall not apply in the case of 
a partial termination of a multiemployer plan.''
    (b) Effective Date.--The amendment made by this section shall apply 
to partial terminations beginning after December 31, 1998.

SEC. 129. REPEAL OF 150 PERCENT OF CURRENT LIABILITY FUNDING LIMIT.

    (a) In General.--Section 412(c)(7) (relating to full-funding 
limitation) is amended--
            (1) by striking ``150 percent'' in subparagraph (A)(i)(I) 
        and inserting ``the applicable percentage'', and
            (2) by adding at the end the following new subparagraph:
                    ``(F) Applicable percentage.--For purposes of 
                subparagraph (A)(i)(I), the applicable percentage is 
                determined according to the following table:

``In the case of any plan year      The applicable percentage is--
        beginning in--
    1998..........................................                 155 
    1999..........................................                 160 
    2000..........................................                 165 
    2001..........................................                 170 
    2002 and succeeding years.....................                 0.''
    (b) Special Amortization Rule.--
            (1) In general.--Section 412(c)(7), as amended by 
        subsection (a), is amended by adding at the end the following 
        new subparagraph:
                    ``(G) Special amortization rule.--Contributions 
                that would be required to be made under the plan but 
                for the provisions of subparagraph (A)(i)(I) shall be 
                amortized over a 20-year period.''
            (2) Conforming amendment.--Section 412(c)(7)(D) 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, 1998.

                           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 provision, the reference shall be considered to 
be made to a section or other provision of the Employee Retirement 
Income Security Act of 1974.

                     Subtitle A--General Provisions

SEC. 201. PERIODIC PENSION BENEFITS STATEMENTS.

    (a) In General.--Subsection (a) of section 105 (29 U.S.C. 1025) is 
amended--
            (1) by striking ``shall furnish to any plan participant or 
        beneficiary who so requests in writing,'' and inserting ``shall 
        furnish at least once every 3 years, in the case of a 
        participant in a defined benefit plan who has attained age 35, 
        and annually, in the case of a defined contribution plan, to 
        each plan participant, and shall furnish to any plan 
        participant or beneficiary who so requests,'', and
            (2) by adding at the end the following flush sentence:
``Information furnished under the preceding sentence to a participant 
in a defined benefit plan (other than at the request of the 
participant) may be based on reasonable estimates determined under 
regulations prescribed by the Secretary.''
    (b) Rule for Multiemployer Plans.--Subsection (d) of section 105 
(29 U.S.C. 1025) is amended to read as follows:
    ``(d) Each administrator of a plan to which more than 1 
unaffiliated employer is required to contribute shall furnish to any 
plan participant or beneficiary who so requests in writing, a statement 
described in subsection (a).''
    (c) Effective Date.--The amendments made by this section shall 
apply to plan years beginning after the later of--
            (1) the date of issuance by the Secretary of Labor of 
        regulations providing guidance for simplifying defined benefit 
        plan calculations with respect to the information required 
        under section 105 of the Employee Retirement Income Security 
        Act of 1974 (29 U.S.C. 1025), or
            (2) December 31, 1998.

SEC. 202. REQUIREMENT OF ANNUAL, DETAILED INVESTMENT 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 subparagraph:
            ``(B)(i) If, for any plan year, a plan includes a qualified 
        cash or deferred arrangement (as defined in section 401(k)(2) 
        of the Internal Revenue Code of 1986) and such plan covers less 
        than 100 participants, the administrator shall furnish (within 
        60 days after the end of such plan year) to each participant 
        and to each beneficiary receiving benefits under the plan an 
        annual investment report detailing 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 contributions 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 acquisition 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 appraisal by an 
                independent third party.
            (2) Electronic transfer.--The Secretary of Labor in 
        prescribing such regulations shall also make provision for the 
        electronic transfer of the required annual investment report by 
        a plan administrator 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 subsection:
    ``(e) If--
            ``(1) the administrator of an individual account plan 
        described in section 401(k) of the Internal Revenue Code of 
        1986 provides for investment of the plan assets by means of a 
        contractual arrangement with another party, and
            ``(2) such other party is not required under such 
        arrangement to separately account for benefits accrued with 
        respect to each participant and beneficiary under this plan,
such administrator shall be treated as failing to meet the requirements 
of subsection (a) unless, under such contractual arrangement, such 
administrator provides to such other party such information as is 
necessary to enable such party to separately account at any time for 
benefits accrued with respect to each participant and beneficiary.''
    (b) Civil Penalty for Violations.--Paragraph (1) of section 502(c) 
(29 U.S.C. 1132(c)(1)) is amended by striking ``or section 101(e)(1)'' 
and inserting ``, section 101(e)(1), or section 105(e)''.

SEC. 204. STUDY ON INVESTMENTS IN COLLECTIBLES.

    (a) Study.--The Secretary of Labor, in consultation with the 
Secretary of the Treasury, shall study the extent to which pension 
plans invest in collectibles and whether such investments present a 
risk to the pension security of the participants and beneficiaries of 
such plans.
    (b) Report.--Not later than 12 months after the date of the 
enactment of this Act, the Secretary of Labor shall submit a report to 
the Congress containing the findings of the study described in 
subsection (a) and any recommendations 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 after paragraph (34) the 
following new paragraph:
            ``(35) Prohibition of loans through credit cards and other 
        intermediaries.--A trust shall not constitute a qualified trust 
        under this section 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 inserting 
        ``$33'', and
            (3) by striking paragraphs (2), (5), and (6) and by 
        redesignating paragraphs (3) and (4) as paragraphs (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 ``15 percent''.
    (b) Effective Date.--The amendments made by this section shall 
apply to prohibited transactions occurring 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 section 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 monthly benefits 
        guaranteed under subsection (a) (as limited 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), respectively, 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 allocated 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 subparagraph.''
    (c) Effective Date.--The amendments made by this section shall 
apply to plan terminations--
            (1) under section 4041(c) of the Employee Retirement 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 instituted 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 subsection:
    ``(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 corporation's board) shall transmit to the 
President and the Congress a report providing information on plans from 
which residual assets were distributed to employers pursuant 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 September 30, 1998.

                     Subtitle B--ERISA Enforcement

SEC. 211. CIVIL PENALTIES FOR BREACH OF FIDUCIARY RESPONSIBILITIES MADE 
              DISCRETIONARY, ETC.

    (a) Imposition and Amount of Penalty Made Discretionary.--Section 
502(l)(1) (29 U.S.C. 1132(l)) is amended--
            (1) by striking ``shall'' and inserting ``may'', and
            (2) by striking ``equal to'' and inserting ``not greater 
        than''.
    (b) 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 `applicable recovery 
amount' means any amount which is recovered from (or on behalf of) any 
fiduciary or other person with respect to a breach or violation 
described in paragraph (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 paragraph (2) or 
(5) of subsection (a). The Secretary may, in the Secretary's sole 
discretion, extend the 30-day period described in the preceding 
sentence.''.
    (c) Other Rules.--Section 502(l) is amended by adding at the end 
the following 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 applicable recovery amount on 
which the penalty is based.
    ``(6) No penalty shall be assessed under this subsection unless the 
person against whom the penalty is assessed is given notice and 
opportunity for a hearing with respect to the violation and applicable 
recovery amount.''
    (d) Effective Dates.--
            (1) In general.--The amendments made by this section shall 
        apply to any breach of fiduciary responsibility or other 
        violation of part 4 of title I of the Employee Retirement 
        Income Security Act of 1974 occurring on or after the date of 
        the enactment of this Act.
            (2) Transition rule.--In applying the amendment made by 
        subsection (b), a breach or other violation occurring before 
        the date of the enactment of this Act which continues after the 
        180th day after such date (and which may be discontinued at any 
        time during its existence) shall be treated as having occurred 
        on the day after such date of enactment.

SEC. 212. REPORTING AND ENFORCEMENT REQUIREMENTS FOR EMPLOYEE BENEFIT 
              PLANS.

    (a) In General.--Part 1 of subtitle B of title I (29 U.S.C. 1021 et 
seq.) is amended--
            (1) by redesignating section 111 as section 112, and
            (2) inserting after section 110 the following new section:

                  ``direct reporting of certain events

    ``Sec. 111. (a) Required Notifications.--
            ``(1) Notifications by plan administrator.--Within 5 
        business days after an administrator of an employee benefit 
        plan determines that there is evidence (or after the 
        administrator is notified under paragraph (2)) that an 
        irregularity may have occurred with respect to the plan, the 
        administrator shall--
                    ``(A) notify the Secretary of the irregularity in 
                writing; and
                    ``(B) furnish a copy of such notification to the 
                accountant who is currently engaged under section 
                103(a)(3)(A).
            ``(2) Notifications by accountant.--
                    ``(A) In general.--Within 5 business days after an 
                accountant engaged by the administrator of an employee 
                benefit plan under section 103(a)(3)(A) determines in 
                connection with such engagement that there is evidence 
                that an irregularity may have occurred with respect to 
                the plan, the accountant shall--
                            ``(i) notify the plan administrator of the 
                        irregularity in writing, or
                            ``(ii) if the accountant determines that 
                        there is evidence that the irregularity may 
                        have involved an individual who is the plan 
                        administrator or who is a senior official of 
                        the plan administrator, notify the Secretary of 
                        the irregularity in writing.
                    ``(B) Notification upon failure of plan 
                administrator to notify.--If an accountant who has 
                provided notification to the plan administrator 
                pursuant to subparagraph (A)(i) does not receive a copy 
                of the administrator's notification to the Secretary 
                required in paragraph (1) within the 5-business day 
                period specified therein, the accountant shall furnish 
                to the Secretary a copy of the accountant's 
                notification made to the plan administrator on the next 
                business day following such period.
            ``(3) Irregularity defined.--
                    ``(A) For purposes of this subsection, the term 
                `irregularity' means--
                            ``(i) a theft, embezzlement, or a violation 
                        of section 664 of title 18, United States Code 
                        (relating to theft or embezzlement from an 
                        employee benefit plan);
                            ``(ii) an extortion or a violation of 
                        section 1951 of title 18, United States Code 
                        (relating to interference with commerce by 
                        threats or violence);
                            ``(iii) a bribery, a kickback, or a 
                        violation of section 1954 of title 18, United 
                        States Code (relating to offer, acceptance, or 
                        solicitation to influence operations of an 
                        employee benefit plan);
                            ``(iv) a violation of section 1027 of title 
                        18, United States Code (relating to false 
                        statements and concealment of facts in relation 
                        to employee benefit plan records); or
                            ``(v) a violation of section 411, 501, or 
                        511 of this title (relating to criminal 
                        violations).
                    ``(B) The term `irregularity' does not include any 
                act or omission described in this paragraph involving 
                less than $1,000 unless there is reason to believe that 
                the act or omission may bear on the integrity of plan 
                management.
    ``(b) Notification Upon Termination of Engagement of Accountant.--
            ``(1) Notification by plan administrator.--Within 5 
        business days after the termination of an engagement of an 
        accountant under section 103(a)(3)(A) with respect to an 
        employee benefit plan, the administrator of such plan shall--
                    ``(A) notify the Secretary in writing of such 
                termination, giving the reasons for such termination, 
                and
                    ``(B) furnish the accountant whose engagement was 
                terminated with a copy of the notification sent to the 
                Secretary.
            ``(2) Notification by accountant.--If the accountant 
        referred to in paragraph (1)(B) has not received a copy of the 
        administrator's notification to the Secretary as required under 
        paragraph (1)(B), or if the accountant disagrees with the 
        reasons given in the notification of termination of the 
        engagement for auditing services, the accountant shall notify 
        the Secretary in writing of the termination, giving the reasons 
        for the termination, within 10 business days after the 
        termination of the engagement.
    ``(c) Determination of Periods Required for Notification.--In 
determining whether a notification required under this section with 
respect to any act or omission has been made within the required number 
of business days--
            ``(1) the day on which such act or omission begins shall 
        not be included; and
            ``(2) Saturdays, Sundays, and legal holidays shall not be 
        included.
For purposes of this subsection, the term `legal holiday' means any 
Federal legal holiday and any other day appointed as a holiday by the 
State in which the person responsible for making the notification 
principally conducts business.
    ``(d) Immunity for Good Faith Notification.--No accountant or plan 
administrator shall be liable to any person for any finding, 
conclusion, or statement made in any notification made pursuant to 
subsection (a)(2) or (b)(2), or pursuant to any regulations issued 
under those subsections, if the finding, conclusion, or statement is 
made in good faith.''
    (b) Civil Penalty.--
            (1) In general.--Section 502(c) (29 U.S.C. 1132(c)) is 
        amended by inserting after paragraph (6) the following new 
        paragraph:
    ``(8)(A) The Secretary may assess a civil penalty of up to $50,000 
against any administrator who fails to provide the Secretary with any 
notification as required under section 111.
    ``(B) The Secretary may assess a civil penalty of up to $50,000 
against any accountant who knowingly and willfully fails to provide the 
Secretary with any notification as required under section 111.''
            (2) Conforming amendment.--Section 502(a)(6) (29 U.S.C. 
        1132(a)(6)) is amended by striking ``or (6)'' and inserting 
        ``(6), or (8)''.
    (c) Clerical Amendments.--
            (1) Section 514(d) (29 U.S.C. 114(d)) is amended by 
        striking ``111'' and inserting ``112''.
            (2) The table of contents in section 1 is amended by 
        striking the item relating to section 111 and inserting the 
        following new items:

``Sec. 111. Direct reporting of certain events.
``Sec. 112. Repeal and effective date.''
    (d) Effective Date.--The amendments made by this section shall 
apply with respect to any irregularity or termination of engagement 
described in the amendments only if the 5-day period described in the 
amendments in connection with the irregularity or termination commences 
at least 90 days after the date of the enactment of this Act.

SEC. 213. 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 engagement 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 subclause (III) 
        (as so redesignated) and inserting a comma;
            (5) by adding after and below subclause (III) (as so 
        redesignated), the following: ``but only if such person meets 
        the requirements 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 engagement of the person as 
                an accountant under subparagraph (A) if the person--
                            ``(I) has in operation an appropriate 
                        internal quality control system;
                            ``(II) has undergone a qualified external 
                        quality control review of the person's 
                        accounting and auditing practices, including 
                        such practices relevant to employee benefit 
                        plans (if any), during the 3-year period 
                        immediately preceding such engagement; and
                            ``(III) has completed, within the 2 
                        calendar years immediately preceding such 
                        engagement, such continuing education or 
                        training as the Secretary in regulations 
                        determines is necessary to maintain 
                        professional proficiency in connection with 
                        employee benefit plans.
                    ``(iii) A person meets the requirements of this 
                clause with respect to an engagement of the person as 
                an accountant under subparagraph (A) if the person 
                meets such additional requirements and qualifications 
                of regulations which the Secretary deems necessary to 
                ensure the quality of plan audits.
                    ``(iv) For purposes of clause (ii)(II), an external 
                quality control review shall be treated as qualified 
                with respect to a person referred to in clause (ii) 
                if--
                            ``(I) such review is performed in 
                        accordance with the requirements of external 
                        quality control review programs of recognized 
                        auditing standard setting bodies, as determined 
                        in regulations of the Secretary, and
                            ``(II) in the case of any such person who 
                        has, during the peer review period, conducted 1 
                        or more previous 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 1) 
                        of plan audits in relation to the scale of the 
                        person's auditing practice.
    (b) Effective Dates.--
            (1) In general.--Except as provided in paragraph (2), the 
        amendments made by this section 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 examinations.--Clause (iii) 
        of section 103(a)(1)(D) of the Employee Retirement Income 
        Security Act of 1974 (as added by subsection (a)(6)) takes 
        effect on the date of enactment of this Act.
            (3) Regulations.--The Secretary shall issue regulations 
        under this section no later than December 31, 1999.

SEC. 214. INSPECTOR GENERAL STUDY.

    (a) Study.--The Inspector General of the Department of Labor shall 
conduct a study on the need for regulatory standards and procedures to 
authorize the Secretary, in appropriate cases, to prohibit persons from 
serving as qualified accountants for purposes of section 103 of the 
Employee Retirement Income Security Act of 1974 (29 U.S.C. 1023).
    (b) Matters To Be Studied.--In conducting the study under this 
section, the Inspector General shall address whether standards and 
procedures to prohibit persons from serving as qualified public 
accountants are likely to improve the quality of employee benefit plan 
audits, and the potential for increased costs to plans. If the 
Inspector General concludes that regulations incorporating standards 
and procedures would be appropriate, the study shall include 
recommended standards and procedures.
    (c) Report.--Not later than 1 year after the date of the enactment 
of this Act, the Inspector General shall submit a report on the results 
of the study conducted pursuant to this section to each house of 
Congress and the Secretary of Labor.

       Subtitle C--Increase in Excise Tax on Employer Reversions

SEC. 221. INCREASE IN EXCISE TAX.

    (a) In General.--Section 4980 of the Internal Revenue Code of 1986 
(relating to tax on reversion of qualified plan assets to employer) is 
amended--
            (1) in subsection (a), by striking ``20 percent'' and 
        inserting ``35 percent''; and
            (2) in subsection (d)(1), by striking ``substituting `50 
        percent' for `20 percent' with respect to any employer 
        reversion'' and inserting ``substituting `65 percent' for `35 
        percent' with respect to any employer reversion''.
    (b) Effective Date.--
            (1) In general.--Except as provided in paragraph (2), the 
        amendment made by this section shall apply to reversions 
        occurring after December 31, 1998.
            (2) Exception.--The amendment made by this section shall 
        not apply to any reversion after December 31, 1998, if--
                    (A) in the case of plans subject to title IV of the 
                Employee Retirement Income Security Act of 1974, a 
                notice of intent to terminate under such title was 
                provided to participants (or if no participants, to the 
                Pension Benefit Guaranty Corporation) before June 25, 
                1998,
                    (B) in the case of plans subject to title I (and 
                not to title IV) of such Act, a notice of intent to 
                reduce future accruals under section 204(h) of such Act 
                was provided to participants in connection with the 
                termination before June 25, 1998,
                    (C) in the case of plans not subject to title I or 
                IV of such Act, a request for a determination letter 
                with respect to the termination was filed with the 
                Secretary of the Treasury or the Secretary's delegate 
                before June 25, 1998, or
                    (D) in the case of plans not subject to title I or 
                IV of such Act and having only 1 participant, a 
                resolution terminating the plan was adopted by the 
                employer before June 25, 1998.

                         TITLE III--PORTABILITY

SEC. 301. FASTER VESTING OF EMPLOYER MATCHING CONTRIBUTIONS.

    (a) Amendment of Internal Revenue Code.--Paragraph (2) of section 
411(a) of the Internal Revenue Code of 1986 (relating to employer 
contributions) is amended--
            (1) by inserting ``, and, if applicable, (C)'' after ``or 
        (B)'', and
            (2) by adding at the end the following new subparagraph:
                    ``(C) Matching contributions.--In the case of a 
                plan that includes an accrued benefit derived from 
                matching contributions (as defined in section 
                401(m)(4)(A)), the plan satisfies the requirements of 
                this subparagraph if--
                            ``(i) an employee who has completed at 
                        least 3 years of service has a nonforfeitable 
                        right to 100 percent of the employee's accrued 
                        benefit derived from such matching 
                        contributions, or
                            ``(ii) an employee has a nonforfeitable 
                        right to a percentage of the employee's accrued 
                        benefit derived from employer matching 
                        contributions (as so defined) determined under 
                        the following table:

                                                     The nonforfeitable
``Years of service:                                      percentage is:
    2.............................................                  20 
    3.............................................                  40 
    4.............................................                  60 
    5.............................................                  80 
    6.............................................               100.''
    (b) Amendment of ERISA.--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 inserting ``, and, if applicable, (C)'' after ``or 
        (B)'', and
            (2) by adding at the end the following new subparagraph:
                    ``(C) Matching contributions.--In the case of a 
                plan that includes an accrued benefit derived from 
                matching contributions (as defined in section 
                401(m)(4)(A) of the Internal Revenue Code of 1986), the 
                plan satisfies the requirements of this subparagraph 
                if--
                            ``(i) an employee who has completed at 
                        least 3 years of service has a nonforfeitable 
                        right to 100 percent of the employee's accrued 
                        benefit derived from such matching 
                        contributions, or
                            ``(ii) an employee has a nonforfeitable 
                        right to a percentage of the employee's accrued 
                        benefit derived from employer matching 
                        contributions (as so defined) determined under 
                        the following table:

                                                     The nonforfeitable
``Years of service:                                      percentage is:
    2.............................................                  20 
    3.............................................                  40 
    4.............................................                  60 
    5.............................................                  80 
    6.............................................               100.''
    (c) Effective Date.--
            (1) In general.--Except as provided in paragraphs (2) and 
        (3), the amendments made by this section shall apply to plan 
        years beginning after December 31, 1998.
            (2) Application to current employees.--The amendments made 
        by this section shall not apply to any employee who does not 
        have at least 1 hour of service in any plan year beginning 
        after December 31, 1998.
            (3) Collective bargaining agreements.--In the case of a 
        plan maintained pursuant to 1 or more collective bargaining 
        agreements between employee representatives and 1 or more 
        employers ratified 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 terminates 
                        (determined without regard to any extension 
                        thereof on or after such date of enactment), or
                            (ii) January 1, 1999, or
                    (B) January 1, 2003.

SEC. 302. RATIONALIZATION OF THE RESTRICTIONS ON DISTRIBUTIONS 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 ``separation from service'' and inserting 
``severance from employment''.
    (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 termination''.
            (2) Conforming amendments.--Section 401(k)(10) of such Code 
        is amended--
                    (A) by striking subparagraph (A) and inserting the 
                following:
                    ``(A) In general.--A plan termination is described 
                in this paragraph if the termination of the plan is 
                without establishment or maintenance 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 assets or 
                subsidiary'' in the heading.
    (c) Effective Date.--The amendments made by this section shall 
apply to distributions after December 31, 1998.

SEC. 303. TREATMENT OF TRANSFERS BETWEEN DEFINED CONTRIBUTION PLANS.

    (a) In General.--Section 411(d)(6) of the Internal Revenue Code of 
1986 (relating to accrued benefit not to be decreased by amendment) is 
amended by adding at the end the following new subparagraph:
                    ``(D) Plan transfers.--A defined contribution plan 
                (in this subparagraph referred to as the `transferee 
                plan') shall not be treated as failing to meet the 
                requirements of this paragraph 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 subparagraph 
                referred to as the `transferor plan') to the extent 
                that--
                            ``(i) the forms of distribution previously 
                        available 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,
                            ``(ii) the terms of both the transferor 
                        plan and the transferee plan authorize the 
                        transfer described in clause (i),
                            ``(iii) the transfer described in clause 
                        (i) was made pursuant to a voluntary election 
                        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 
                        beneficiary received a notice describing the 
                        consequences of making the election,
                            ``(v) if the transferor plan provides for 
                        an annuity as the normal form of distribution 
                        under the plan in accordance with section 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 entitled 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 (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 paragraph 
referred to as the `transferor plan') to the extent that--
            ``(A) the forms of distribution previously available 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,
            ``(D) the election described in subparagraph (C) was made 
        after the participant or beneficiary received a notice 
        describing the consequences of making the election,
            ``(E) if the transferor plan provides for an annuity 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 receive 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, 1998.

SEC. 304. MISSING PARTICIPANTS.

    (a) In General.--Section 4050 of the Employee Retirement 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:
    ``(c) Multiemployer Plans.--The corporation shall prescribe rules 
similar to the rules in subsection (a) for multiemployer plans covered 
by this title that terminate 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 administrator of a plan 
        described in paragraph (4) shall, upon termination of the plan, 
        provide the corporation information with respect to benefits of 
        a missing participant if the plan transfers such benefits--
                    ``(A) to the corporation, or
                    ``(B) to an entity other than the corporation or a 
                plan described in paragraph (4)(B)(ii).
            ``(3) Payment by the corporation.--If benefits 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) either--
                    ``(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 distributed 
                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 (within 
                        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.--
            (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) of the Internal Revenue Code of 1986 
        (relating to benefits of missing participants on plan 
        termination) is amended 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 section 4050 of the Employee Retirement 
Income Security Act of 1974 (as added by subsection (a)), respectively, 
are prescribed.

SEC. 305. ALLOWANCE OF ROLLOVERS FROM AND TO 403(B) PLANS.

    (a) Rollovers From Section 403(b) Plans.--Section 403(b)(8)(A)(ii) 
of the Internal Revenue Code of 1986 (relating to rollover amounts) is 
amended by striking ``such distribution'' and all that follows and 
inserting ``such distribution to an eligible retirement plan described 
in section 402(c)(8)(B), and''.
    (b) Rollovers to Section 403(b) Plans.--Section 402(c)(8)(B) of 
such Code (defining eligible retirement plan) is amended by striking 
``and'' at the end of clause (ii), by striking the period at the end of 
clause (iv) and inserting ``, and'', and by adding at the end the 
following:
                            ``(v) an annuity contract described in 
                        section 403(b).''
    (c) Conforming Amendments.--
            (1) Section 72(o)(4) of such Code is amended by striking 
        ``and 408(d)(3)'' and inserting ``403(b)(8), and 408(d)(3)''.
            (2) Section 401(a)(31)(B) of such Code is amended by 
        striking ``and 403(a)(4)'' and inserting ``, 403(a)(4), and 
        403(b)(8)''.
            (3) Subparagraph (B) of section 403(b)(8) of such Code is 
        amended by inserting ``and (9)'' after ``through (7)''.
            (4) Subparagraphs (A) and (B) of section 415(b)(2) of such 
        Code are each amended by striking ``and 408(d)(3)'' and 
        inserting ``403(b)(8), and 408(d)(3)''.
    (d) Effective Date; Special Rule.--
            (1) Effective date.--The amendments made by this section 
        shall apply to distributions after December 31, 1998.
            (2) Special rule.--Notwithstanding any other provision of 
        law, subsections (h)(3) and (h)(5) of section 1122 of the Tax 
        Reform Act of 1986 shall not apply to any distribution from an 
        eligible retirement plan on behalf of an individual if there 
        was a rollover to such plan on behalf of such individual which 
        is permitted solely by reason of any amendment made by this 
        section.

SEC. 306. ROLLOVER CONTRIBUTIONS FROM DEFERRED COMPENSATION PLANS OF 
              STATE AND LOCAL GOVERNMENTS.

    (a) Rollovers From Section 457 Plans.--
            (1) In general.--Section 457(e) of the Internal Revenue 
        Code of 1986 (relating to other definitions and special rules) 
        is amended by adding at the end the following:
            ``(16) Rollover amounts.--
                    ``(A) General rule.--In the case of an eligible 
                deferred compensation plan of an eligible employer 
                described in paragraph (1)(A), if--
                            ``(i) any portion of the balance to the 
                        credit of an employee in such plan is paid to 
                        such employee in a rollover distribution (other 
                        than a distribution described in subsection 
                        (d)(1)(A)(iii) or in subparagraph (A) or (B) of 
                        section 402(c)(4)),
                            ``(ii) the employee transfers any portion 
                        of the property such employee receives in such 
                        distribution to an individual retirement plan 
                        (as defined in section 7701(a)(37), and
                            ``(iii) in the case of a distribution of 
                        property other than money, the amount so 
                        transferred consists of the property 
                        distributed,
                then such distribution (to the extent so transferred) 
                shall not be includible in gross income for the taxable 
                year in which paid.
                    ``(B) Certain rules made applicable.--Rules similar 
                to the rules of section 401(a)(31), paragraphs (2), 
                (3), (5), (6), (7), and (9) of section 402(c), and 
                section 402(f) shall apply for purposes of subparagraph 
                (A).''
            (2) Distribution requirements.--Section 457(d)(1)(A) of 
        such Code (relating to distribution requirements) is amended by 
        inserting ``except as provided in subsection (e)(16),'' after 
        ``(A)''.
            (3) Conforming amendments.--
                    (A) Section 72(o)(4) of such Code is amended--
                            (i) by striking ``and 408(d)(3)'' and 
                        inserting ``408(d)(3), and 457(e)(16)'',
                            (ii) by inserting ``or excludable'' after 
                        ``deductible'' each place it appears, and
                            (iii) in the heading by inserting ``or 
                        Excludable'' after ``Deductible''.
                    (B) Section 219(d)(2) of such Code is amended by 
                striking ``or 408(d)(3)'' and inserting ``408(d)(3), or 
                457(e)(16)''.
                    (C) Section 401(a)(31)(B) of such Code is amended 
                by striking ``and 403(b)(8)'' and inserting ``, 
                403(b)(8), and 457(e)(16)''.
                    (D) Paragraph (4) of section 402(c) of such Code is 
                amended by inserting ``or in an eligible deferred 
                compensation plan (as defined in section 457(b)) of an 
                eligible employer described in section 457(e)(1)(A)'' 
                after ``qualified trust''.
                    (E) Section 408(a)(1) of such Code is amended by 
                striking ``or 403(b)(8)'' and inserting ``, 403(b)(8), 
                or 457(e)(16)''.
                    (F) Section 408(d)(3)(A)(ii) of such Code is 
                amended by striking ``or'' after ``501(a)'' and 
                inserting a comma, and by inserting ``, or from an 
                eligible deferred compensation plan described in 
                section 457(b)'' after ``contribution)''.
                    (G) Subparagraphs (A) and (B) of section 415(b)(2) 
                of such Code are each amended by striking ``and 
408(d)(3)'' and inserting ``408(d)(3), and 457(e)(16)''.
                    (H) Section 4973(b)(1)(A) of such Code is amended 
                by striking ``or 408(d)(3)'' and inserting ``408(d)(3), 
                or 457(e)(16)''.
    (d) Effective Date; Special Rule.--
            (1) Effective date.--The amendments made by this section 
        shall apply to distributions after December 31, 1998.
            (2) Special rule.--Notwithstanding any other provision of 
        law, subsections (h)(3) and (h)(5) of section 1122 of the Tax 
        Reform Act of 1986 shall not apply to any distribution from an 
        individual retirement plan on behalf of an individual if there 
        was a rollover to such plan on behalf of such individual which 
        is permitted solely by reason of any amendment made by this 
        section.

SEC. 307. EXTENSION OF 60-DAY ROLLOVER PERIOD IN THE CASE OF 
              PRESIDENTIALLY DECLARED DISASTERS AND SERVICE IN COMBAT 
              ZONE.

    (a) In General.--Paragraph (1) of section 7508(a) of the Internal 
Revenue Code of 1986 (relating to time postponed for performing certain 
acts) is amended by striking ``and'' at the end of subparagraph (J), by 
redesignating subparagraph (K) as subparagraph (L), and by inserting 
after subparagraph (J) the following new subparagraph:
                    ``(K) Rollover of any distribution within the 60-
                day period specified in section 402(c)(3) or 
                408(d)(3)(A); and''.
    (b) Effective Date.--The amendment made by this section shall apply 
to distributions made after December 31, 1998.

SEC. 308. PURCHASE OF SERVICE CREDIT IN GOVERNMENTAL DEFINED BENEFIT 
              PLANS.

    (a) 403(b) Plans.--Subsection (b) of section 403 of the Internal 
Revenue Code of 1986 is amended by adding at the end the following new 
paragraph:
            ``(13) Trustee-to-trustee transfers to purchase permissive 
        service credit.--No amount shall be includible in gross income 
        by reason of a direct trustee-to-trustee transfer to a defined 
        benefit governmental plan (as defined in section 414(d)) if 
        such transfer is--
                    ``(A) for the purchase of permissive service credit 
                (as defined in section 415(n)(3)(A)) under such plan, 
                or
                    ``(B) a repayment to which section 415 does not 
                apply by reason of subsection (k)(3) thereof.''
    (b) 457 Plans.--Subsection (e) of section 457 of such Code, as 
amended by section 306, is amended by adding at the end the following 
new paragraph:
            ``(17) Trustee-to-trustee transfers to purchase permissive 
        service credit.--No amount shall be includible in gross income 
        by reason of a direct trustee-to-trustee transfer to a defined 
        benefit governmental plan (as defined in section 414(d)) if 
        such transfer is--
                    ``(A) for the purchase of permissive service credit 
                (as defined in section 415(n)(3)(A)) under such plan, 
                or
                    ``(B) a repayment to which section 415 does not 
                apply by reason of subsection (k)(3) thereof.''
    (c) Effective Date.--The amendments made by this section shall 
apply to trustee-to-trustee transfers after December 31, 1998.

           TITLE IV--COMPREHENSIVE WOMEN'S PENSION PROTECTION

                       Subtitle A--Pension Reform

SEC. 401. PENSION RIGHT TO KNOW PROPOSALS.

    (a) Spouse's Right To Know Distribution Information.--
            (1) Amendment of internal revenue code.--Paragraph (3) of 
        section 417(a) of the Internal Revenue Code of 1986 (relating 
        to definitions and special rules for purposes of minimum 
        survivor annuity requirements) is amended by adding at the end 
        the following new subparagraph:
                    ``(C) Explanation to spouse.--At the time a plan 
                provides a participant with a written explanation under 
                subparagraph (A) or (B), such plan shall provide a copy 
                of such explanation to such participant's spouse. If 
                the last known address of the spouse is the same as the 
                last known address of the participant, the requirement 
                of the preceding sentence shall be treated as met if 
                the copy referred to in the preceding sentence is 
                included in a single mailing made to such address and 
                addressed to both such participant and spouse.''
            (2) Amendment of erisa.--Paragraph (3) of section 205(c) of 
        Employee Retirement Income Security Act of 1974 is amended by 
        adding at the end the following new subparagraph:
                    ``(C) Explanation to spouse.--At the time a plan 
                provides a participant with a written explanation under 
                subparagraph (A) or (B), such plan shall provide a copy 
of such explanation to such participant's spouse. If the last known 
address of the spouse is the same as the last known address of the 
participant, the requirement of the preceding sentence shall be treated 
as met if the copy referred to in the preceding sentence is included in 
a single mailing made to such address and addressed to both such 
participant and spouse.''
    (b) Employee's Right To Know of Opportunity for Elective 
Contributions Under 401(k) Plans.--Subparagraph (D) of section 
401(k)(12) of the Internal Revenue Code of 1986 (relating to notice 
requirements) is amended--
            (1) by striking ``, within a reasonable period before any 
        year,'' and inserting ``before the 60th day before the 
        beginning of any year'', and
            (2) by adding at the end the following new flush sentence:
                ``The requirements of paragraph (11)(B)(iii) shall 
                apply for purposes of this subparagraph.''

SEC. 402. WOMEN'S PENSION TOLL-FREE PHONE NUMBER.

    (a) In General.--The Secretary of Labor shall contract with an 
independent organization to create a women'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 agencies; and
            (3) a source for printed information.
    (b) Authorization of Appropriations.--There are authorized to be 
appropriated $1,000,000 for each of the fiscal years 1999, 2000, 2001, 
and 2002 to carry out subsection (a).

SEC. 403. MODIFICATION OF GOVERNMENT PENSION OFFSET.

    (a) Wife's Insurance Benefits.--Section 202(b)(4)(A) of the Social 
Security Act (42 U.S.C. 402(b)(4)(A)) is amended--
            (1) by inserting ``the amount (if any) by which the sum of 
        such benefit (before reduction under this paragraph) and'' 
        after ``two-thirds of''; and
            (2) by inserting ``exceeds the amount described in 
        subsection (z) for such month,'' before ``if''.
    (b) Husband's Insurance Benefits.--Section 202(c)(2)(A) of such Act 
(42 U.S.C. 402(c)(2)(A)) is amended--
            (1) by inserting ``the amount (if any) by which the sum of 
        such benefit (before reduction under this paragraph) and'' 
        after ``two-thirds of''; and
            (2) by inserting ``exceeds the amount described in 
        subsection (z) for such month,'' before ``if''.
    (c) Widow's Insurance Benefits.--Section 202(e)(7)(A) of such Act 
(42 U.S.C. 402(e)(7)(A)) is amended--
            (1) by inserting ``the amount (if any) by which the sum of 
        such benefit (before reduction under this paragraph) and'' 
        after ``two-thirds of''; and
            (2) by inserting ``exceeds the amount described in 
        subsection (z) for such month,'' before ``if''.
    (d) Widower's Insurance Benefits.--Section 202(f)(2)(A) of such Act 
(42 U.S.C. 402(f)(2)(A)) is amended--
            (1) by inserting ``the amount (if any) by which the sum of 
        such benefit (before reduction under this paragraph) and'' 
        after ``two-thirds of''; and
            (2) by inserting ``exceeds the amount described in 
        subsection (z) for such month,'' before ``if''.
    (e) Mother's and Father's Insurance Benefits.--Section 202(g)(4)(A) 
of such Act (42 U.S.C. 402(g)(4)(A)) is amended--
            (1) by inserting ``the amount (if any) by which the sum of 
        such benefit (before reduction under this paragraph) and'' 
        after ``two-thirds of''; and
            (2) by inserting ``exceeds the amount described in 
        subsection (z) for such month,'' before ``if''.
    (f) Amount Described.--Section 202 of such Act (42 U.S.C. 402) is 
amended by adding at the end the following:
    ``(z) The amount described in this subsection is, for months in 
each 12-month period beginning in December of 1998, and each succeeding 
calendar year, the greater of--
            ``(1) $1200; or
            ``(2) the amount applicable for months in the preceding 12-
        month period, increased by the cost-of-living adjustment for 
        such period determined for an annuity under section 8340 of 
        title 5, United States Code (without regard to any other 
        provision of law).''
    (g) Limitations on Reductions in Benefits.--Section 202 of such Act 
(42 U.S.C. 402), as amended by subsection (f), is amended by adding at 
the end the following:
    ``(aa) For any month after December 1998, in no event shall an 
individual receive a reduction in a benefit under subsection (b)(4)(A), 
(c)(2)(A), (e)(7)(A), (f)(2)(A), or (g)(4)(A) for the month that is 
more than the reduction in such benefit that would have applied for 
such month under such subsections as in effect on December 1, 1998.''
    (h) Effective Date.--The amendments made by this section shall 
apply with respect to monthly insurance benefits payable under title II 
of the Social Security Act for months after December 1998.

SEC. 404. PERIODS OF FAMILY AND MEDICAL LEAVE TREATED AS HOURS OF 
              SERVICE FOR PENSION PARTICIPATION AND VESTING.

    (a) Amendments of Internal Revenue Code.--
            (1) Participation.--
                    (A) In general.--Paragraph (3) of section 410(a) of 
                the Internal Revenue Code of 1986 (relating to minimum 
                participation standards) is amended by adding at the 
                end the following new subparagraph:
                    ``(E) Family and medical leave treated as 
                service.--
                            ``(i) In general.--For purposes of this 
                        subsection, in the case of an individual who is 
                        absent from work on leave required to be given 
                        to such individual under the Family and Medical 
                        Leave Act of 1993, the plan shall treat as 
                        hours of service--
                                    ``(I) the hours of service which 
                                otherwise would normally have been 
                                credited to such individual but for 
                                such absence, or
                                    ``(II) in any case in which the 
                                plan is unable to determine the hours 
                                described in subclause (I), 8 hours of 
                                service per day of absence.
                            ``(ii) Year to which hours are credited.--
                        The hours described in clause (i) shall be 
                        treated as hours of service as provided in this 
                        subparagraph--
                                    ``(I) only in the year in which the 
                                absence from work begins, if a 
                                participant would have a year of 
                                service solely because the period of 
                                absence is treated as hours of service 
                                as provided in clause (i); or
                                    ``(II) in any other case, in the 
                                immediately following year.''
                    (B) Coordination with treatment of maternity and 
                paternity absences under break in service rules.--
                Subparagraph (E) of section 410(a)(5) of such Code is 
                amended--
                            (i) by inserting ``not under family and 
                        medical leave act of 1993'' after ``absences'' 
                        in the heading, and
                            (ii) by adding at the end of clause (i) the 
                        following new sentence: ``The preceding 
                        sentence shall apply to an absence from work 
                        only if no part of such absence is required to 
                        be given under the Family and Medical Leave Act 
                        of 1993.''
            (2) Vesting.--
                    (A) In general.--Paragraph (5) of section 411(a) of 
                such Code (relating to minimum vesting standards) is 
                amended by adding at the end the following new 
                subparagraph:
                    ``(E) Family and medical leave treated as 
                service.--
                            ``(i) In general.--For purposes of this 
                        subsection, in the case of an individual who is 
                        absent from work on leave required to be given 
                        to such individual under the Family and Medical 
                        Leave Act of 1993, the plan shall treat as 
                        hours of service--
                                    ``(I) the hours of service which 
                                otherwise would normally have been 
                                credited to such individual but for 
                                such absence, or
                                    ``(II) in any case in which the 
                                plan is unable to determine the hours 
                                described in subclause (I), 8 hours of 
                                service per day of absence.
                            ``(ii) Year to which hours are credited.--
                        The hours described in clause (i) shall be 
                        treated as hours of service as provided in this 
                        subparagraph--
                                    ``(I) only in the year in which the 
                                absence from work begins, if a 
                                participant would have a year of 
                                service solely because the period of 
                                absence is treated as hours of service 
                                as provided in clause (i); or
                                    ``(II) in any other case, in the 
                                immediately following year.''
                    (B) Coordination with treatment of maternity and 
                paternity absences under break in service rules.--
                Subparagraph (E) of section 411(a)(6) of such Code is 
                amended--
                            (i) by inserting ``not under family and 
                        medical leave act of 1993'' after ``absences'' 
                        in the heading, and
                            (ii) by adding at the end of clause (i) the 
                        following new sentence: ``The preceding 
                        sentence shall apply to an absence from work 
                        only if no part of such absence is required to 
                        be given under the Family and Medical Leave Act 
                        of 1993.''
    (b) Amendments of ERISA.--
            (1) Participation.--
                    (A) In general.--Paragraph (3) of section 202(a) of 
                the Employee Retirement Income Security Act of 1974 
                (relating to minimum participation standards) is 
                amended by adding at the end the following new 
                subparagraph:
    ``(E)(i) For purposes of this subsection, in the case of an 
individual who is absent from work on leave required to be given to 
such individual under the Family and Medical Leave Act of 1993, the 
plan shall treat as hours of service--
            ``(I) the hours of service which otherwise would normally 
        have been credited to such individual but for such absence, or
            ``(II) in any case in which the plan is unable to determine 
        the hours described in subclause (I), 8 hours of service per 
        day of absence.
    ``(ii) The hours described in clause (i) shall be treated as hours 
of service as provided in this subparagraph--
            ``(I) only in the year in which the absence from work 
        begins, if a participant would have a year of service solely 
        because the period of absence is treated as hours of service as 
        provided in clause (i); or
            ``(II) in any other case, in the immediately following 
        year.''
                    (B) Coordination with treatment of maternity and 
                paternity absences under break in service rules.--
                Subparagraph (A) of section 202(b)(5) of such Act is 
                amended by adding at the end of clause (i) the 
                following new sentence: ``The preceding sentence shall 
                apply to an absence from work only if no part of such 
                absence is required to be given under the Family and 
                Medical Leave Act of 1993.''
            (2) Vesting.--
                    (A) In general.--Paragraph (2) of section 203(b) of 
                such Act (relating to minimum vesting standards) is 
                amended by adding at the end the following new 
                subparagraph:
    ``(E)(i) For purposes of this subsection, in the case of an 
individual who is absent from work on leave required to be given to 
such individual under the Family and Medical Leave Act of 1993, the 
plan shall treat as hours of service--
            ``(I) the hours of service which otherwise would normally 
        have been credited to such individual but for such absence, or
            ``(II) in any case in which the plan is unable to determine 
        the hours described in subclause (I), 8 hours of service per 
        day of absence.
    ``(ii) The hours described in clause (i) shall be treated as hours 
of service as provided in this subparagraph--
            ``(I) only in the year in which the absence from work 
        begins, if a participant would have a year of service solely 
        because the period of absence is treated as hours of service as 
        provided in clause (i); or
            ``(II) in any other case, in the immediately following 
        year.''
                    (B) Coordination with treatment of maternity and 
                paternity absences under break in service rules.--
                Clause (i) of section 203(b)(3)(E) of such Act is 
                amended by adding at the end of clause (i) the 
                following new sentence: ``The preceding sentence shall 
                apply to an absence from work only if no part of such 
                absence is required to be given under the Family and 
                Medical Leave Act of 1993.''

SEC. 405. 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 application 
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 (relating 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 (relating to pension integration 
        exceptions under nondiscrimination requirements for 
        qualification) are repealed, 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 defined contribution plans 
        with OASDI) is repealed.

SEC. 406. DIVISION OF PENSION BENEFITS UPON DIVORCE.

    (a) Amendments to the Internal Revenue Code of 1986.--Section 
414(p) of the Internal Revenue Code of 1986 (relating to qualified 
domestic relations order defined) is amended by redesignating paragraph 
(12) as paragraph (13) and by adding at the end the following new 
paragraph:
            ``(12) Special rules and procedures for domestic relations 
        orders not specifying division of pension benefits.--
                    ``(A) In general.--If--
                            ``(i) a domestic relations order (including 
                        an annulment or other order of marital 
                        dissolution) relates to provision of marital 
                        property with respect to a marriage of at least 
                        5 years duration between the participant and 
                        the former spouse,
                            ``(ii)(I) such order (and any prior order) 
                        does not specifically provide that pension 
                        benefits were considered by the parties and no 
                        division is intended, and
                            ``(II) such order is not a qualified 
                        domestic relations order without regard to this 
                        paragraph and there is no other prior qualified 
                        domestic relations order issued in connection 
                        with the dissolution of the marriage to which 
                        such order relates, and
                            ``(iii) the former spouse notifies a plan 
                        within the period prescribed under subparagraph 
                        (C) that the former spouse is entitled to 
                        benefits under the plan in accordance with the 
                        provisions of this paragraph,
                then such domestic relations order shall be treated as 
                a qualified domestic relations order for purposes of 
                this subsection and section 401(a)(13).
                    ``(B) Amount of benefit.--
                            ``(i) In general.--Any domestic relations 
                        order treated as a qualified domestic relations 
                        order under subparagraph (A) shall be treated 
                        as specifying that the former spouse is 
                        entitled to the applicable percentage of the 
                        marital share of the participant's accrued 
                        benefit.
                            ``(ii) Marital share.--For purposes of 
                        clause (i), the marital share of a 
                        participant's accrued benefit is an amount 
                        equal to the product of--
                                    ``(I) such benefit 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), and
                                    ``(II) 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) Applicable percentage.--For 
                        purposes of this subparagraph, the applicable 
                        percentage is--
                                    ``(I) except as provided in 
                                subclause (II), 50 percent, and
                                    ``(II) in the case of a participant 
                                who fails to provide the plan with 
                                notice of a domestic relations order 
                                within the time prescribed under 
                                subparagraph (C), 67 percent.
                    ``(C) Notice requirements.--
                            ``(i) Notice by employee.--Each employee 
                        who is a participant in a pension plan shall, 
                        within 60 days after the dissolution of the 
                        marriage of the employee--
                                    ``(I) notify the plan administrator 
                                of the plan of such dissolution, and
                                    ``(II) provide to the plan 
                                administrator a copy of the domestic 
                                relations order (including an annulment 
                                or other order of marital dissolution) 
                                providing for such dissolution and 
the last known address of the employee's former spouse.
                            ``(ii) Notice by plan administrator.--Each 
                        plan administrator receiving notice under 
                        clause (i) shall promptly notify the former 
                        spouse of a participant of such spouse's rights 
                        under this paragraph, including the time period 
                        within which such spouse is required to notify 
                        the plan of the spouse's intention to claim 
                        rights under this paragraph.
                            ``(iii) Notice by former spouse.--A former 
                        spouse may notify the plan administrator of 
                        such spouse's intent to claim rights under this 
                        paragraph at any time before the last day of 
                        the 1-year period following receipt of notice 
                        under clause (ii).
                            ``(iv) Coordination with plan procedures.--
                        The determination under paragraph (6)(A)(ii) 
                        with respect to a domestic relations order to 
                        which this paragraph applies shall be made 
                        within a reasonable period of time after the 
                        plan administrator receives the notice 
                        described in clause (iii).
                    ``(D) Interpretation as qualified domestic 
                relations order.--Each plan shall establish reasonable 
                rules for determining how any such deemed domestic 
                relations order is to be interpreted under the plan so 
                as to constitute a qualified domestic 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 decree). 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 benefit calculations, and
                            ``(v) may conform to the rules applicable 
                        to qualified domestic relations orders 
                        regarding form or type of benefit.''
    (b) Amendments to the Employee Retirement Income Security Act of 
1974.--Section 206(d)(3) of the Employee Retirement Income Security Act 
of 1974 (29 U.S.C. 1056(d)(3)) is amended by redesignating subparagraph 
(N) as subparagraph (O) and by inserting after subparagraph (M) the 
following new subparagraph:
                    ``(N) Special rules and procedures for domestic 
                relations orders not specifying division of pension 
                benefits.--
                            ``(i) In general.--If--
                                    ``(I) a domestic relations order 
                                (including an annulment or other order 
                                of marital dissolution) relates to 
                                provision of marital property with 
                                respect to a marriage of at least 5 
                                years duration between the participant 
                                and the former spouse,
                                    ``(II)(aa) such order (and any 
                                prior order) does not specifically 
                                provide that pension benefits were 
                                considered by the parties and no 
                                division is intended, or
                                    ``(bb) such order is a qualified 
                                domestic relations order without regard 
                                to this subparagraph or there is no 
                                other prior qualified domestic 
                                relations order issued in connection 
                                with the dissolution of the marriage to 
                                which such order relates, and
                                    ``(III) the former spouse notifies 
                                a plan within the period prescribed 
                                under clause (iii) that the former 
                                spouse is entitled to benefits under 
                                the plan in accordance with the 
                                provisions of this subparagraph,
                        then such domestic relations order shall be 
                        treated as a qualified domestic relations order 
                        for purposes of this paragraph.
                            ``(ii) Amount of benefit.--
                                    ``(I) In general.--Any domestic 
                                relations order treated as a qualified 
                                domestic relations order under clause 
                                (i) shall be treated as specifying that 
                                the former spouse is entitled to the 
                                applicable percentage of the marital 
                                share of the participant's accrued 
                                benefit.
                                    ``(II) Marital share.--For purposes 
                                of subclause (I), the marital share of 
                                a participant's accrued benefit is an 
                                amount equal to the product of--
                                            ``(aa) such benefit 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), and
                                            ``(bb) 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) Applicable percentage.--For 
                                purposes of this clause, the applicable 
                                percentage is--
                                            ``(aa) except as provided 
                                        in item (bb), 50 percent, and
                                            ``(bb) in the case of a 
                                        participant who fails to 
                                        provide the plan with notice of 
                                        a domestic relations order 
                                        within the time prescribed 
                                        under clause (iii), 67 percent.
                            ``(iii) Notice requirements.--
                                    ``(I) Notice by employee.--Each 
                                employee who is a participant in a 
                                pension plan shall, within 60 days 
                                after the dissolution of the marriage 
                                of the employee--
                                            ``(aa) notify the plan 
                                        administrator of the plan of 
                                        such dissolution, and
                                            ``(bb) provide to the plan 
                                        administrator a copy of the 
                                        domestic relations order 
                                        (including an annulment or 
                                        other order of marital 
                                        dissolution) providing for such 
                                        dissolution and the last known 
address of the employee's former spouse.
                                    ``(II) Notice by plan 
                                administrator.--Each plan administrator 
                                receiving notice under subclause (I) 
                                shall promptly notify the former spouse 
                                of a participant of such spouse's 
                                rights under this subparagraph, 
                                including the time period within which 
                                such spouse is required to notify the 
                                plan of the spouse's intention to claim 
                                rights under this subparagraph.
                                    ``(III) Notice by former spouse.--A 
                                former spouse may notify the plan 
                                administrator of such spouse's intent 
                                to claim rights under this subparagraph 
                                at any time before the last day of the 
                                1-year period following receipt of 
                                notice under subclause (II).
                                    ``(IV) Coordination with plan 
                                procedures.--The determination under 
                                subparagraph (G)(i)(II) with respect to 
                                a domestic relations order to which 
                                this subparagraph applies shall be made 
                                within a reasonable period of time 
                                after the plan administrator receives 
                                the notice described in subclause 
                                (III).
                            ``(iv) Interpretation as qualified domestic 
                        relations order.--Each plan shall establish 
                        reasonable rules for determining how any such 
                        deemed domestic relations order is to be 
                        interpreted under the plan so as 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--
                                    ``(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 
                                benefit calculations, and
                                    ``(V) may conform to the rules 
                                applicable to qualified domestic 
                                relations orders regarding form or type 
                                of benefit.''

SEC. 407. ENTITLEMENT OF DIVORCED SPOUSES TO RAILROAD RETIREMENT 
              ANNUITIES INDEPENDENT OF ACTUAL ENTITLEMENT OF EMPLOYEE.

    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
            (2) in subsection (e)(5), by striking ``or divorced wife'' 
        the second place it appears.

SEC. 408. EFFECTIVE DATES.

    (a) In General.--Except as provided in subsection (b), the 
amendments made by this subtitle, other than sections 403 and 405, 
shall apply with respect to plan years beginning on or after January 1, 
1999, and the amendments made by section 406 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 employee representatives and 1 or more employers 
ratified on or before the date of the enactment of this Act, subsection 
(a) shall be applied to benefits pursuant to, and individuals covered 
by, any such agreement by substituting for ``January 1, 1999'' the date 
of the commencement of the first plan year beginning on or after the 
earlier of--
            (1) the later of--
                    (A) January 1, 2000, or
                    (B) the date on which the last of such collective 
                bargaining agreements terminates (determined without 
                regard to any extension thereof after the date of the 
                enactment of this Act), or
            (2) January 1, 2001.

Subtitle B--Protection of Rights of Former Spouses to Pension Benefits 
 Under Certain Government and Government-Sponsored Retirement 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 Retirement 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 section 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.

SEC. 412. SURVIVOR ANNUITIES FOR WIDOWS, WIDOWERS, AND FORMER SPOUSES 
              OF FEDERAL EMPLOYEES 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 separated from 
                the service with title to deferred annuity from the 
                Fund dies before having established 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'' before 
                ``Member commencing''; and
                    (B) by inserting ``former employee or'' before 
                ``Member dies''; and
            (3) in the undesignated sentence following paragraph (2)--
                    (A) in the matter preceding subparagraph (A) by 
                inserting ``former employee or'' before ``Member''; and
                    (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 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 is entitled to a survivor annuity under this 
        subsection, if and to the extent expressly provided 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 decree.''; 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 amended by inserting at the end the 
following: ``The Office shall provide by regulation for the application 
of this subsection 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. 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 paragraph 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 paragraph (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 section 
                8424(d),' ''; and
                    (B) by adding at the end the following:
    ``(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 Requirements

SEC. 421. MODIFICATIONS OF JOINT AND SURVIVOR ANNUITY REQUIREMENTS.

    (a) Amendments to ERISA.--
            (1) Amount of annuity.--
                    (A) In general.--Paragraph (1) of section 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 section 205 of 
                such Act (29 U.S.C. 1055) is amended--
                            (i) by redesignating paragraphs (1) and (2) 
                        as subparagraphs (A) and (B), respectively,
                            (ii) by inserting ``(1)'' after ``(d)'', 
                        and
                            (iii) by adding at the end the following 
                        new paragraph:
    ``(2) For purposes of this section, the term ``qualified joint and 
\2/3\ survivor annuity'' means a joint and survivor annuity under which 
the survivor annuity for the life of the surviving spouse is equal to 
at least \2/3\ of the amount of the annuity which is payable during the 
joint lives of the participant and spouse.''
            (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 \2/3\ survivor annuity 
        offered, accompanied by an illustration of the benefits under 
        each such annuity for the particular participant and spouse and 
        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,''.
    (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 survivor annuity 
                and preretirement survivor annuity) 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 requirements), as amended by 
                section 422, is amended by redesignating subsection (f) 
                as subsection (g) and by inserting after subsection (e) 
                the following new subsection:
    ``(f) Definition of Qualified Joint and \2/3\ Survivor Annuity.--
For purposes of this section and section 401(a)(11), the term 
``qualified joint and \2/3\ survivor annuity'' means a joint and 
survivor annuity under which the survivor annuity for the life of the 
surviving spouse is equal to at least \2/3\ of the amount of the 
annuity which is payable during the joint lives of the participant and 
spouse.''
            (2) Illustration requirement.--Clause (i) of section 
        417(a)(3)(A) of such Code (relating to explanation 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 
                        offered, accompanied by an illustration of the 
                        benefits under each such annuity for the 
                        particular participant and spouse and 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 Date.--The amendments made by this section shall 
apply to plan years beginning on or after January 1, 1999.

SEC. 422. SPOUSAL CONSENT REQUIRED FOR DISTRIBUTIONS FROM DEFINED 
              CONTRIBUTION PLANS.

    (a) Amendments to Internal Revenue Code of 1986.--
            (1) In general.--Section 401(a)(11) of the Internal Revenue 
        Code of 1986 (relating to requirement of joint and survivor 
        annuity and preretirement survivor annuity) is amended by 
        striking subparagraphs (B), (C), and (D), by redesignating 
        subparagraphs (E) and (F) as subparagraphs (C) and (D), 
        respectively, and by inserting after subparagraph (A) the 
        following new subparagraph:
                    ``(B) Plans to which paragraph applies.--This 
                paragraph shall apply to any defined benefit plan and 
                to any defined contribution plan.''
            (2) Exception for hardship distributions.--Section 417(f) 
        of such Code is amended by adding at the end the following new 
        paragraph:
            ``(8) Hardship distributions.--The requirements of section 
        401(a)(11) and this section shall not apply to a hardship 
        distribution under section 401(k)(2)(B)(i)(IV).''
            (3) Special rule for cash-outs.--Section 417(e) of such 
        Code is amended by adding at the end the following new 
        paragraph:
            ``(4) Special rule for defined contribution plans.--
                    ``(A) In general.--In the case of a defined 
                contribution plan, notwithstanding paragraph (2), if 
                the present value of the qualified joint and survivor 
                annuity does not exceed $10,000, the plan may 
                immediately distribute 50 percent of the present value 
                of such annuity to each spouse.
                    ``(B) Exception.--The plan may distribute a 
                different percentage of the present value of an annuity 
                to each spouse if a court order or contractual 
                agreement provides for such different percentage.''
    (b) Amendments to ERISA.--
            (1) In general.--Section 205(b) of the Employee Retirement 
        Income Security Act of 1974 (29 U.S.C. 1055(b)) is amended to 
        read as follows:
    ``(b)(1) This section shall apply to any defined benefit plan and 
to any individual account plan.
    ``(2) This section shall not apply to a plan which the Secretary of 
the Treasury or his delegate has determined is a plan described in 
section 404(c) of the Internal Revenue Code of 1986 (or a continuation 
thereof) in which participation is substantially limited to individuals 
who, before January 1, 1976, ceased employment covered by the plan.''
            (2) Hardship distribution.--Section 205 of such Act (29 
        U.S.C. 1055) is amended by adding at the end the following new 
        subsection:
    ``(m) This section shall not apply to a hardship distribution under 
section 401(k)(2)(B)(i)(IV) of the Internal Revenue Code of 1986.''
            (3) Special rule for cash-outs.--Section 205(g) of such Act 
        (29 U.S.C. 1055(g)) is amended by adding at the end the 
        following new paragraph:
            ``(4) Special rule for defined contribution plans.--
                    ``(A) In general.--In the case of an individual 
                account plan, notwithstanding paragraph (2), if the 
                present value of the qualified joint and survivor 
                annuity or the qualified preretirement survivor annuity 
                exceeds $10,000, the plan may immediately distribute 50 
                percent of the present value of such annuity to each 
                spouse.
                    ``(B) Exception.--The plan may distribute a 
                different percentage of the present value of an annuity 
                to each spouse if a court order or contractual 
                agreement provides for such different percentage.''
    (c) Effective Date.--The amendments made by this section shall 
apply to plan years beginning after December 31, 1999.

             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, 1999, if--
            (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 because it operates in 
accordance with this subsection.
    (b) Governmental Plans.--In the case of a governmental plan (as 
defined in section 414(d) of the Internal Revenue Code of 1986), 
subsection (a) shall be applied by substituting for ``January 1, 1999'' 
the later of--
            (1) January 1, 2000, or
            (2) the date which is 90 days after the opening of the 
        first legislative session beginning after January 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.--Notwithstanding 
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 before 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, 1999, or
                    (B) the date on which the last of such collective 
                bargaining agreements terminates (determined without 
                regard to any extension thereof after the date of the 
                enactment of this Act), or
            (2) January 1, 2000.
                                 <all>