[Congressional Bills 105th Congress]
[From the U.S. Government Publishing Office]
[S. 1856 Introduced in Senate (IS)]







105th CONGRESS
  2d Session
                                S. 1856

    To amend the Internal Revenue Code of 1986 to provide equitable 
   treatment for contributions by employees to defined contribution 
                             pension plans.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             March 25, 1998

 Mr. Grassley (for himself, Mr. Breaux, Mr. Jeffords, Mr. Graham, Mr. 
 Baucus, and Mr. Hatch) introduced the following bill; which was read 
             twice and referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL


 
    To amend the Internal Revenue Code of 1986 to provide equitable 
   treatment for contributions by employees to defined contribution 
                             pension plans.

    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 ``Enhanced Savings Opportunities 
Act''.

SEC. 2. EQUITABLE TREATMENT FOR CONTRIBUTIONS OF EMPLOYEES TO DEFINED 
              CONTRIBUTION PLANS.

    (a) In General.--Subparagraph (B) of section 415(c)(1) of the 
Internal Revenue Code of 1986 (relating to limitation for defined 
contribution plans) is amended to read as follows:
                    ``(B) the participant's compensation.''
    (b) Conforming Amendments.--
            (1)(A) Section 403(b) of the Internal Revenue Code of 1986 
        is amended--
                    (i) by striking ``the exclusion allowance for such 
                taxable year'' in paragraph (1) and inserting ``the 
                applicable limit under section 415'', and
                    (ii) by striking paragraph (2).
            (B) Section 404(a)(10)(B) of such Code is amended by 
        striking ``, the exclusion allowance under section 
        403(b)(2),''.
            (C) Section 415(a)(2) of such Code is amended by striking 
        ``, and the amount of the contribution for such portion shall 
        reduce the exclusion allowance as provided in section 
        403(b)(2)''.
            (D) Section 415(c)(3) of such Code is amended by adding at 
        the end the following new subparagraph:
                    ``(E) Annuity contracts.--In the case of an annuity 
                contract described in section 403(b), the term 
                `participant's compensation' shall mean the 
                participant's includible compensation as determined 
                under regulations prescribed by the Secretary.''
            (E) Section 415(c) of such Code is amended by striking 
        paragraph (4).
            (F) Section 415(c)(7) of such Code is amended to read as 
        follows:
            ``(7) Certain contributions by church plans not treated as 
        exceeding limit.--
                    ``(A) In general.--Notwithstanding any other 
                provision of this subsection, at the election of a 
                participant who is an employee of a church, a 
                convention or association of churches, including an 
                organization described in section 414(e)(3)(B)(ii), 
                contributions and other additions for an annuity 
                contract or retirement income account described in 
                section 403(b) with respect to such participant, when 
                expressed as an annual addition to such participant's 
                account, shall be treated as not exceeding the 
                limitation of paragraph (1) if such annual addition is 
                not in excess of $10,000.
                    ``(B) $40,000 aggregate limitation.--The total 
                amount of additions with respect to any participant 
                which may be taken into account for purposes of this 
                subparagraph for all years may not exceed $40,000.
                    ``(C) Annual addition.--For purposes of this 
                paragraph, the term `annual addition' has the meaning 
                given such term by paragraph (2).''
            (G) Section 415(e)(5) of such Code is amended--
                    (i) by striking ``(except in the case of a 
                participant who has elected under subsection (c)(4)(D) 
                to have the provisions of subsection (c)(4)(C) 
                apply)'', and
                    (ii) by striking the last sentence.
            (2) Section 415(n)(2)(B) of such Code is amended by 
        striking ``percentage''.
    (c) Effective Date.--The amendments made by this section shall 
apply to years beginning after December 31, 1998.
                                 <all>