[Congressional Bills 105th Congress]
[From the U.S. Government Publishing Office]
[S. 2329 Introduced in Senate (IS)]







105th CONGRESS
  2d Session
                                S. 2329

 To amend the Internal Revenue Code of 1986 to enhance the portability 
            of retirement benefits, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             July 17, 1998

Mr. Jeffords (for himself, Mr. Bingaman, and Mr. Graham) 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 enhance the portability 
            of retirement benefits, and for other purposes.

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

SECTION 1. SHORT TITLE; AMENDMENT OF 1986 CODE.

    (a) Short Title.--This Act may be cited as the ``Retirement Account 
Portability Act of 1998''.
    (b) Amendment of 1986 Code.--Except as otherwise expressly 
provided, whenever in this Act 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.

SEC. 2. ROLLOVERS ALLOWED AMONG VARIOUS TYPES OF PLANS.

    (a) Rollovers From and to Section 457 Plans.--
            (1) Rollovers from section 457 plans.--
                    (A) In general.--Section 457(e) (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, if--
                            ``(i) any portion of the balance to the 
                        credit of an employee in such plan is paid to 
                        such employee in an eligible rollover 
                        distribution (within the meaning of section 
                        402(c)(4)),
                            ``(ii) the employee transfers any portion 
                        of the property such employee receives in such 
                        distribution to an eligible retirement plan 
                        described in section 402(c)(8)(B), 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 paragraphs (2) through (7) and (9) of 
                section 402(c) and section 402(f) shall apply for 
                purposes of subparagraph (A).
                    ``(C) Reporting.--Rollovers under this paragraph 
                shall be reported to the Secretary in the same manner 
                as rollovers from qualified retirement plans (as 
                defined in section 4974(c)).''.
                    (B) Deferral limit determined without regard to 
                rollover amounts.--Section 457(b)(2) (defining eligible 
                deferred compensation plan) is amended by inserting 
                ``(other than rollover amounts)'' after ``taxable 
                year''.
            (2) Rollovers to section 457 plans.--
                    (A) Section 402(c)(8)(B) (defining eligible 
                retirement plan) 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 
                at the end the following:
                            ``(v) an eligible deferred compensation 
                        plan described in section 457(b) of an eligible 
                        employer described in section 457(e)(1)(A).''.
                    (B) Paragraph (9) of section 402(c) is amended by 
                striking ``except that'' and all that follows and 
                inserting ``except that only an account or annuity 
                described in clause (i) or (ii) of paragraph (8)(B) 
                shall be treated as an eligible retirement plan with 
                respect to such distribution.''.
                    (C) Subsection (a) of section 457 (relating to year 
                of inclusion in gross income) is amended by striking 
                ``or otherwise made available''.
    (b) Allowance of Rollovers From and To 403(b) Plans.--
            (1) Rollovers from section 403(b) plans.--Section 
        403(b)(8)(A)(ii) (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''.
            (2) Rollovers to section 403(b) plans.--Section 
        402(c)(8)(B) (defining eligible retirement plan), as amended by 
        subsection (a), is amended by striking ``and'' at the end of 
        clause (iv), by striking the period at the end of clause (v) 
        and inserting ``, and'', and by adding at the end the 
        following:
                            ``(vi) an annuity contract described in 
                        section 403(b).''
    (c) Expanded Explanation to Recipients of Rollover Distributions.--
Paragraph (1) of section 402(f) (relating to written explanation to 
recipients of distributions eligible for rollover treatment) is amended 
by striking ``and'' at the end of subparagraph (C), by striking the 
period at the end of subparagraph (D) and inserting ``, and'', and by 
adding at the end the following new subparagraph:
                    ``(E) of the provisions under which distributions 
                from the eligible retirement plan receiving the 
                distribution may be subject to restrictions and tax 
                consequences which are different from those applicable 
                to distributions from the plan making such 
                distribution.''
    (d) Conforming Amendments.--
            (1) Section 72(o)(4) is amended by striking ``and 
        408(d)(3)'' and inserting ``403(b)(8), 408(d)(3), and 
        457(e)(16)''.
            (2) Section 219(d)(2) is amended by striking ``or 
        408(d)(3)'' and inserting ``408(d)(3), or 457(e)(16)''.
            (3) Section 401(a)(31)(B) is amended by striking ``and 
        403(a)(4)'' and inserting ``, 403(a)(4), 403(b)(8), and 
        457(e)(16)''.
            (4) Subparagraph (B) of section 403(b)(8) is amended by 
        inserting ``and (9)'' after ``through (7)''.
            (5) Section 408(a)(1) is amended by striking ``or 
        403(b)(8)'' and inserting ``, 403(b)(8), or 457(e)(16)''.
            (6) Subparagraphs (A) and (B) of section 415(b)(2) are each 
        amended by striking ``and 408(d)(3)'' and inserting 
        ``403(b)(8), 408(d)(3), and 457(e)(16)''.
            (7) Section 415(c)(2) is amended by striking ``and 
        408(d)(3)'' and inserting ``408(d)(3), and 457(e)(16)''.
            (8) Section 4973(b)(1)(A) is amended by striking ``or 
        408(d)(3)'' and inserting ``408(d)(3), or 457(e)(16)''.
    (e) 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, and section 402(d) of the Internal Revenue 
        Code of 1986 (as in effect for taxable years beginning before 
        January 1, 2000), shall not apply to any distribution from a 
        defined contribution plan (as defined in section 408(d)(3)(A) 
        of such Code, as amended by section 3) or a defined benefit 
        plan (as so defined) 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. 3. ROLLOVERS OF IRAS INTO WORKPLACE RETIREMENT PLANS.

    (a) In General.--Subparagraph (A) of section 408(d)(3) (relating to 
rollover amounts) is amended by striking ``or'' at the end of clause 
(ii), by striking the period at the end of clause (iii) and inserting a 
semicolon, and by adding at the end the following:
                            ``(iv)(I) the entire amount received 
                        (including money and other property) represents 
                        the entire interest in the account or the 
                        entire value of the annuity,
                            ``(II) no amount in the account and no part 
                        of the value of the annuity is attributable to 
                        any source other than a rollover contribution 
                        from a defined contribution plan or a defined 
                        benefit plan and any earnings on such rollover, 
                        and
                            ``(III) such entire amount received is paid 
                        into a defined contribution plan or a defined 
                        benefit plan (for the benefit of such 
                        individual) not later than the 60th day after 
                        he receives the payment or distribution; or
                            ``(v)(I) the entire amount received 
                        (including money and other property) represents 
                        the entire interest in the account or the 
                        entire value of the annuity,
                            ``(II) no amount in any such account and no 
                        part of the value of any such annuity is 
                        attributable to any source other than a 
                        rollover contribution from such an account or 
                        annuity of such individual (and any earnings on 
                        such contribution),
                            ``(III) all contributions to all individual 
                        retirement accounts, and all amounts paid for 
                        all individual retirement annuities, of such 
                        individual were allowed as a deduction under 
                        section 219, and
                            ``(IV) such entire amount received is paid 
                        (not later than the 60th day after being so 
                        received) into a defined contribution plan or a 
                        defined benefit plan (for the benefit of such 
                        individual) under which amounts are held in 
                        trust by a person described in section 
                        408(a)(2) or in a manner that satisfies section 
                        401(f).
                If a payment or distribution from an individual 
                retirement plan is described in more than one clause of 
                this subparagraph, such payment or distribution shall 
                be treated as described only in the clause specified by 
                the payee or distributee. For purposes of this 
                subparagraph, the term `defined contribution plan' 
                means a defined contribution plan (as defined in 
                section 414(i)) which includes a trust exempt from tax 
                under section 501(a), an annuity plan described in 
                section 403(a), an annuity contract described in 
                section 403(b), and an eligible deferred compensation 
                plan described in section 457(b) of an eligible 
                employer described in section 457(e)(1)(A). For 
                purposes of clause (iv)(II), the term `defined 
                contribution plan' shall also include an eligible 
                deferred compensation plan described in section 457(b) 
                of an eligible employer described in section 
                457(e)(1)(B). For purposes of this subparagraph, the 
                term `defined benefit plan' means a defined benefit 
                plan (as defined in section 414(j)) which includes a 
                trust exempt from tax under section 501(a).''
    (b) Conforming Amendment.--Paragraph (1) of section 403(b) is 
amended by striking ``section 408(d)(3)(A)(iii)'' and inserting 
``clause (iii), (iv), or (v) of section 408(d)(3)(A)''.
    (c) 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, and section 402(d) of the Internal Revenue 
        Code of 1986 (as in effect for taxable years beginning before 
        January 1, 2000), shall not apply to any distribution from a 
defined contribution plan (as defined in section 408(d)(3)(A) of the 
such Code, as amended by this section) or a defined benefit plan (as so 
defined) 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 the amendments made by this section.

SEC. 4. ROLLOVERS OF AFTER-TAX CONTRIBUTIONS.

    (a) In General.--
            (1) Subsection (c) of section 402 (relating to rules 
        applicable to rollovers from exempt trusts) (as amended by 
        section 2) is amended by striking paragraph (2) and 
        redesignating paragraphs (3) through (10) as paragraphs (2) 
        through (9), respectively.
            (2) Paragraph (31) of section 401(a) (relating to optional 
        direct transfer of eligible rollover distributions) is amended 
        by striking subparagraph (B) and redesignating subparagraphs 
        (C) and (D) as subparagraphs (B) and (C), respectively.
            (3) Subparagraph (B) of section 408(d)(3) (relating to 
        rollover contributions) is amended by striking ``which was not 
        includible in his gross income because of the application of 
        this paragraph'' and inserting ``to which this paragraph 
        applied''.
    (b) Hardship Exception to 60-Day Rule.--
            (1) Paragraph (2) of section 402(c) (as so redesignated) is 
        amended to read as follows:
            ``(2) Transfer must be made within 60 days of receipt.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), paragraph (1) shall not apply to any 
                transfer of a distribution made after the 60th day 
                following the day on which the distributee received the 
                property distributed.
                    ``(B) Hardship exception.--The Secretary may waive 
                the 60-day requirement under subparagraph (A) where the 
                failure to waive such requirement would be against 
                equity or good conscience, including casualty, 
                disaster, or other events beyond the reasonable control 
                of the individual subject to such requirement.''
            (2) Paragraph (3) of section 408(d) (relating to rollover 
        contributions) is amended by adding at the end the following 
        new subparagraph:
                    ``(H) Waiver of 60-day requirement.--The Secretary 
                may waive the 60-day requirement under subparagraphs 
                (A) and (D) where the failure to waive such requirement 
                would be against equity or good conscience, including 
                casualty, disaster, or other events beyond the 
                reasonable control of the individual subject to such 
                requirement.''
    (c) Conforming Amendments.--
            (1) Subparagraph (B) of section 403(a)(4) is amended by 
        striking ``(2) through (7)'' and inserting ``(2) through (6)''.
            (2) Section 403(b)(8)(A)(ii) (as amended by section 301) is 
        amended by striking ``section 402(c)(8)(B)'' and inserting 
        ``section 402(c)(7)(B)''.
            (3) Paragraph (16) of section 457(e) (as added by section 
        2) is amended--
                    (A) in subparagraph (A)(i) by striking 
                ``402(c)(4)'' and inserting ``402(c)(3)'',
                    (B) in subparagraph (A)(ii) by striking 
                ``402(c)(8)(B)'' and inserting ``402(c)(7)(B)'', and
                    (C) in subparagraph (B) by striking ``paragraphs 
                (2) through (7) and (9) of section 402(c)'' and 
                inserting ``paragraphs (2) through (6) and (8) of 
                section 402(c)''.
    (d) Effective Date.--
            (1) In general.--Except as provided by paragraph (2), the 
        amendments made by this section shall apply to distributions 
        made after December 31, 1998.
            (2) Hardship exception.--The amendments made by subsection 
        (b) shall apply to 60-day periods ending after the date of the 
        enactment of this Act.

SEC. 5. EXTENSION OF MISSING PARTICIPANTS PROGRAM TO MULTIEMPLOYER 
              PLANS.

    (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 (d) and by inserting after subsection (b) 
the following new subsection:
    ``(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.''
    (b) Conforming Amendment.--Section 206(f) of the Employee 
Retirement Income Security Act of 1974 (29 U.S.C. 1056(f)) is amended 
by striking ``the plan shall provide that''.
    (c) Effective Date.--The amendments made by this section shall 
apply to distributions made after final regulations implementing 
subsection (c) of section 4050 of the Employee Retirement Income 
Security Act of 1974 (as added by subsection (a)) are prescribed.

SEC. 6. RATIONALIZATION OF RESTRICTIONS ON DISTRIBUTIONS FROM DEFINED 
              CONTRIBUTION PLANS.

    (a) Distributions Permitted on Severance From Employment.--
            (1) 401(k) plans.--Section 401(k)(2)(B)(i)(I) (relating to 
        qualified cash or deferred arrangements) is amended by striking 
        ``separation from service'' and inserting ``severance from 
        employment''.
            (2) 403(b) contracts.--
                    (A) Clause (ii) of section 403(b)(7)(A) is amended 
                by striking ``separates from service'' and inserting 
                ``severs from employment''.
                    (B) Paragraph (11) of section 403(b) is amended--
                            (i) by striking ``separation from service'' 
                        in the heading and inserting ``severance from 
                        employment'', and
                            (ii) by striking ``separates from service'' 
                        and inserting ``severs from employment''.
            (3) 457 plans.--Clause (ii) of section 457(d)(1)(A) is 
        amended by striking ``is separated from service'' and inserting 
        ``has a severance from employment''.
    (b) Business Sale Requirements Deleted.--
            (1) In general.--Section 401(k)(2)(B)(i)(II) (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) 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 does 
                not involve the establishment or maintenance of another 
                defined contribution plan (other than an employee stock 
                ownership plan as defined in section 4975(e)(7)).'',
                    (B) in subparagraph (B)--
                            (i) by striking ``An event'' and inserting 
                        ``A termination'', and
                            (ii) by striking ``the event'' and 
                        inserting ``the termination'',
                    (C) by striking subparagraph (C), and
                    (D) 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. 7. TRANSFEREE DEFINED CONTRIBUTION PLAN NEED NOT HAVE SAME 
              DISTRIBUTION OPTIONS AS TRANSFEROR DEFINED CONTRIBUTION 
              PLAN.

    (a) In General.--Section 411(d)(6) (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. 8. EMPLOYERS MAY DISREGARD ROLLOVERS FOR PURPOSES OF CASH-OUT 
              AMOUNTS.

    (a) Amendments to 1986 Code.--
            (1) Section 411(a)(11) (relating to restrictions on certain 
        mandatory distributions) is amended by adding at the end the 
        following:
                    ``(D) Special rule for rollover contributions.--A 
                plan shall not fail to meet the requirements of this 
                paragraph if, under the terms of the plan, the present 
                value of the nonforfeitable accrued benefit is 
                determined without regard to that portion of such 
                benefit which is attributable to rollover contributions 
                (and earnings allocable thereto). For purposes of this 
                subparagraph, the term `rollover contributions' means 
                any rollover contribution under sections 402(c), 
                403(a)(4), 403(b)(8), clause (ii), (iii), or (iv) of 
                408(d)(3)(A), and 457(e)(16).''.
            (2) Clause (i) of section 457(e)(9)(A) is amended by 
        striking ``such amount'' and inserting ``the portion of such 
        amount which is not attributable to rollover contributions (as 
        defined in section 411(a)(11)(D))''.
    (b) Amendment to ERISA.--Section 203(e) of the Employee Retirement 
Income Security Act of 1974 (29 U.S.C. 1053(e)) is amended by adding at 
the end the following:
    ``(4) A plan shall not fail to meet the requirements of this 
subsection if, under the terms of the plan, the present value of the 
nonforfeitable accrued benefit is determined without regard to that 
portion of such benefit which is attributable to rollover contributions 
(and earnings allocable thereto). For purposes of this paragraph, the 
term `rollover contributions' means any rollover contribution under 
sections 402(c), 403(a)(4), 403(b)(8), clause (ii), (iii), or (iv) of 
408(d)(3)(A), and 457(e)(16) of the Internal Revenue Code of 1986.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to distributions after December 31, 1998.

SEC. 9. PURCHASE OF SERVICE CREDIT IN GOVERNMENTAL DEFINED BENEFIT 
              PLANS.

    (a) 403(b) Plans.--Subsection (b) of section 403 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.--
            (1) Subsection (e) of section 457 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.''
            (2) Section 457(b)(2), as amended by section 2, is amended 
        by striking ``(other than rollover amounts)'' and inserting 
``(other than rollover amounts and amounts received in a transfer 
referred to in subsection (e)(17))''.
    (c) Effective Date.--The amendments made by this section shall 
apply to trustee-to-trustee transfers after December 31, 1998.

SEC. 10. PROVISIONS RELATING TO PLAN AMENDMENTS.

    (a) In General.--If this section applies to any plan or contract 
amendment--
            (1) such plan or contract shall be treated as being 
        operated in accordance with the terms of the plan during the 
        period described in subsection (b)(2)(A), and
            (2) such plan shall not fail to meet the requirements of 
        section 411(d)(6) of the Internal Revenue Code of 1986 or 
        section 204(g) of the Employee Retirement Income Security Act 
        of 1974 by reason of such amendment.
    (b) Amendments to Which Section Applies.--
            (1) In general.--This section shall apply to any amendment 
        to any plan or annuity contract which is made--
                    (A) pursuant to any amendment made by this Act or 
                pursuant to any guidance issued by the Secretary of the 
                Treasury (or the Secretary's delegate) under any such 
                amendment, and
                    (B) on or before the last day of the first plan 
                year beginning on or after January 1, 2001.
        In the case of a governmental plan (as defined in section 
        414(d) of the Internal Revenue Code of 1986), this paragraph 
        shall be applied by substituting ``2003'' for ``2001''.
            (2) Conditions.--This section shall not apply to any 
        amendment unless--
                    (A) during the period--
                            (i) beginning on the date the legislative 
                        amendment or guidance described in paragraph 
                        (1)(A) takes effect (or in the case of a plan 
                        or contract amendment not required by such 
                        legislative amendment or guidance, the 
                        effective date specified by the plan), and
                            (ii) ending on the date described in 
                        paragraph (1)(B) (or, if earlier, the date the 
                        plan or contract amendment is adopted),
                the plan or contract is operated as if such plan or 
                contract amendment were in effect, and
                    (B) such plan or contract amendment applies 
                retroactively for such period.
                                 <all>