[Congressional Bills 106th Congress]
[From the U.S. Government Publishing Office]
[S. 2853 Introduced in Senate (IS)]







106th CONGRESS
  2d Session
                                S. 2853

To amend the Internal Revenue Code of 1986 to allow distributions to be 
made from certain pension plans before the participant is severed from 
                              employment.


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                   IN THE SENATE OF THE UNITED STATES

                             July 12, 2000

 Mr. Grassley 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 allow distributions to be 
made from certain pension plans before the participant is severed from 
                              employment.

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

SECTION 1. CERTAIN PENSION DISTRIBUTIONS ALLOWED BEFORE SEVERANCE FROM 
              EMPLOYMENT.

    (a) In General.--Section 401(a) of the Internal Revenue Code of 
1986 (relating to qualified pension, profit-sharing, and stock bonus 
plans) is amended by inserting after paragraph (34) the following new 
paragraph:
            ``(35) Distribution prior to severance from employment.--A 
        trust forming part of a defined benefit plan (or a defined 
        contribution plan which is subject to the funding standards of 
        section 412) shall not constitute a qualified trust under this 
        section if the plan provides a distribution to a participant 
        who has not been severed from employment and the distribution 
        is made before the earliest of the following with respect to 
        the participant:
                    ``(A) Normal retirement age (as defined in section 
                411(a)(8)).
                    ``(B) Attainment of age 59\1/2\.
                    ``(C) The date the participant completes 30 years 
                of service.''
    (b) Effective Date.--The amendment made by this section shall apply 
to years beginning after December 31, 2000.
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