[Congressional Bills 106th Congress]
[From the U.S. Government Publishing Office]
[S. 476 Introduced in Senate (IS)]







106th CONGRESS
  1st Session
                                 S. 476

               To enhance and protect retirement savings.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                           February 25, 1999

  Mr. Schumer introduced the following bill; which was read twice and 
                  referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL


 
               To enhance and protect retirement savings.

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

SECTION 1. SHORT TITLE.

    (a) Short Title.--This Act may be cited as the ``Comprehensive 
Pension and Retirement Security Act of 1999''.
    (b) Table of Contents.--

Sec. 1. Short title.
     TITLE I--RESTRICTIONS ON LOANS FROM QUALIFIED RETIREMENT PLANS

Sec. 101. Qualified employer plans prohibited from making loans through 
                            credit cards and other intermediaries.
Sec. 102. Loans from qualified employer plans treated as distributions 
                            unless used to purchase a first home, to 
                            pay higher education or financially 
                            devastating medical expenses, or during 
                            periods of unemployment.
TITLE II--PROMOTION OF AVAILABILITY OF PRIVATE PENSIONS UPON RETIREMENT

Sec. 201. Availability of defined contribution plan option for 
                            participants in defined benefit plans.
Sec. 202. Timely investment of plan contributions.
Sec. 203. Increase in penalty for early distributions from pension 
                            plans.
                     TITLE III--GROUP HEALTH PLANS

Sec. 301. Advance notice of material reductions in covered services 
                            under group health plans.
  TITLE IV--APPLICATION OF CERTAIN PROHIBITED TRANSACTIONS RULES FOR 
                              401(k) PLANS

Sec. 401. Certain prohibited transactions applied to 401(k) plans.
                TITLE V--RETIREMENT SAVINGS AND SECURITY

Sec. 500. Amendment of ERISA.
                        Subtitle A--Portability

Sec. 501. Missing participants.
                     Subtitle B--Enhanced Security

                     Chapter 1--General Provisions

Sec. 511. Multiemployer plan benefits guaranteed.
Sec. 512. Reversion report.
Sec. 513. Full funding limitation for multiemployer plans.
Sec. 514. Prohibited transactions.
Sec. 515. Substantial owner benefits.
                      Chapter 2--ERISA Enforcement

Sec. 521. Short title.
Sec. 522. Repeal of limited scope audit.
Sec. 523. Reporting and enforcement requirements for employee benefit 
                            plans.
Sec. 524. Additional requirements for qualified public accountants.
Sec. 525. Clarification of civil penalty for breach of fiduciary 
                            responsibility.
TITLE VI--EXPANDED INDIVIDUAL RETIREMENT ACCOUNTS TO INCREASE COVERAGE 
                            AND PORTABILITY

               Subtitle A--Retirement Savings Incentives

Sec. 601. Increase in income limitations.
Sec. 602. Coordination of IRA deduction limit with elective deferral 
                            limit.
               Subtitle B--Distributions and Investments

Sec. 611. Distributions from IRAs may be used without additional tax to 
                            pay financially devastating medical 
                            expenses, or by the unemployed.
Sec. 612. Contributions must be held at least 5 years in certain cases.

     TITLE I--RESTRICTIONS ON LOANS FROM QUALIFIED RETIREMENT PLANS

SEC. 101. 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. 102. LOANS FROM QUALIFIED EMPLOYER PLANS TREATED AS DISTRIBUTIONS 
              UNLESS USED TO PURCHASE A FIRST HOME, TO PAY HIGHER 
              EDUCATION OR FINANCIALLY DEVASTATING MEDICAL EXPENSES, OR 
              DURING PERIODS OF UNEMPLOYMENT.

    (a) In General.--Subsection (p) of section 72 of the Internal 
Revenue Code of 1986 (relating to loans treated as distributions) is 
amended by redesignating paragraphs (3), (4), and (5) as paragraphs 
(4), (5), and (6), respectively, and by inserting after paragraph (2) 
the following new paragraph:
            ``(3) Exception only to apply to certain loans.--Paragraph 
        (2) shall apply to any loan only if such loan is--
                    ``(A) a qualified first-time homebuyer loan (as 
                defined in paragraph (7)),
                    ``(B) a qualified higher education loan (as defined 
                in paragraph (8)),
                    ``(C) a qualified medical expense loan (as defined 
                in paragraph (9)), or
                    ``(D) a qualified unemployment loan (as defined in 
                paragraph (10)).''.
    (b) Definitions.--Subsection (p) of section 72 of such Code is 
amended by adding at the end the following new paragraphs:
            ``(7) Qualified first-time homebuyer loan.--
                    ``(A) In general.--For purposes of paragraph (3), 
                the term `qualified first-time homebuyer loan' means 
                any loan received by an individual to the extent the 
                amount of the loan is used within a reasonable period 
                to pay qualified acquisition costs with respect to a 
                principal residence of a first-time homebuyer who is 
                such individual, the spouse of such individual, or any 
                child, grandchild, or ancestor of such individual or 
                the individual's spouse.
                    ``(B) First-time homebuyer; date of acquisition; 
                principal residence; qualified acquisition costs.--For 
                purposes of this paragraph, the terms `first-time 
                homebuyer', `date of acquisition', `principal 
                residence', and `qualified acquisition costs' have the 
                same meaning as when such terms are used in subsection 
                (t)(8).
            ``(8) Qualified higher education loan.--For purposes of 
        paragraph (3)--
                    ``(A) In general.--The term `qualified higher 
                education loan' means any loan received by an 
                individual to the extent the amount of the loan is used 
                within a reasonable period to pay qualified higher 
                education expenses (as defined in section 529(e)(3)) 
                for education furnished to--
                            ``(i) the individual,
                            ``(ii) the individual's spouse, or
                            ``(iii) any child (as defined in section 
                        151(c)(3)), grandchild, or ancestor of the 
                        individual or the individual's spouse,
                at an eligible educational institution (as defined in 
                section 529(e)(5)).
                    ``(B) Coordination with savings bond provisions.--
                The amount of the qualified higher education expenses 
                (as so defined) for any taxable year shall be reduced 
                by any amount excludable from gross income under 
                section 135.
            ``(9) Qualified medical expense loan.--The term `qualified 
        medical expense loan' means any loan received by an individual 
        to the extent the amount of the loan does not exceed the amount 
        allowable as a deduction under section 213 to the individual 
        for amounts paid during the taxable year for medical care 
        (determined without regard to whether the taxpayer itemizes 
        deductions for such taxable year).
            ``(10) Qualified unemployment loan.--The term `qualified 
        unemployment loan' means any loan to an individual after 
        separation from employment, if--
                    ``(A) such individual has received unemployment 
                compensation for 12 consecutive weeks under any Federal 
                or State unemployment compensation law by reason of 
                such separation, and
                    ``(B) such loan is received during any taxable year 
                during which such unemployment compensation is paid or 
                the succeeding taxable year.
        To the extent provided in regulations, a self-employed 
        individual shall be treated as meeting the requirements of 
        subparagraph (A) if, under Federal or State law, the individual 
        would have received unemployment compensation but for the fact 
        the individual was self-employed.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to loans made after the date of the enactment of this Act with 
respect to expenses paid after such date (in tax years ending after 
such date).

TITLE II--PROMOTION OF AVAILABILITY OF PRIVATE PENSIONS UPON RETIREMENT

SEC. 201. AVAILABILITY OF DEFINED CONTRIBUTION PLAN OPTION FOR 
              PARTICIPANTS IN DEFINED BENEFIT PLANS.

    (a) Amendment to the Employee Retirement Income Security Act of 
1974.--Section 206 of the Employee Retirement Income Security Act of 
1974 (29 U.S.C. 1056) is amended by adding at the end the following new 
subsection:
    ``(g) Availability of Defined Contribution Plan Option for 
Participants in Defined Benefit Plans.--
            ``(1) In general.--Each defined benefit plan to which an 
        employer makes contributions shall provide (in such form and 
        manner as may be provided in regulations prescribed jointly by 
        the Secretary and the Secretary of the Treasury) for an 
        opportunity for each participant employed by such employer to 
        elect, in lieu of coverage under the defined benefit plan and 
        before any election made by the employee under such plan 
        pursuant to subsection (c), coverage under a defined 
        contribution plan maintained in whole or in part by the 
        participant's employer. An employer making contributions to a 
        defined benefit plan shall maintain for his employees a defined 
        contribution plan to the extent necessary to provide for 
        coverage under such defined contribution plan pursuant to 
        elections under this subsection.
            ``(2) Required level of contributions.--The requirements of 
        paragraph (1) shall not be treated as met unless the defined 
        contribution plan with respect to which an election is made 
        under paragraph (1) provides for contributions (other than 
        employee contributions (if any)) at least equivalent to the 
        contributions (other than employee contributions (if any)) 
        provided for under the terms of the defined benefit plan.
            ``(3) Required election period.--The requirements of 
        paragraph (1) shall not be treated as met unless the defined 
        benefit plan provides that an election under paragraph (1) may 
        be made at any time during the 90-day period beginning with the 
        later of--
                    ``(A) the commencement of the first plan year to 
                which this subsection applies, or
                    ``(B) the commencement of the employee's service 
                under the plan.''.
    (b) Amendments to the Internal Revenue Code of 1986.--Subsection 
(a) of section 401 of the Internal Revenue Code of 1986 (relating to 
requirements for qualification), as amended by section 101, is amended 
by inserting after paragraph (35) the following new paragraph:
            ``(36) Availability of defined contribution plan option for 
        participants in defined benefit plans.--
                    ``(A) In general.--A trust forming a part of a 
                defined benefit plan to which an employer makes 
                contributions shall not constitute a qualified trust 
                under this section unless--
                            ``(i) the plan provides (in such form and 
                        manner as may be provided in regulations 
                        prescribed jointly by the Secretary and the 
                        Secretary of Labor) for an opportunity for each 
                        participant employed by such employer to elect, 
                        in lieu of coverage under the defined benefit 
                        plan and before any election made by the 
                        employee under such plan pursuant to section 
                        417, coverage under a defined contribution plan 
                        maintained in whole or in part by the 
                        participant's employer, and
                            ``(ii) the defined benefit plan provides 
                        that each employer making contributions to the 
                        plan maintains for his employees a defined 
                        contribution plan to the extent necessary to 
                        provide for coverage under such defined 
                        contribution plan pursuant to elections under 
                        this paragraph.
                    ``(B) Required level of contributions.--The 
                requirements of subparagraph (A) shall not be treated 
                as met unless the defined contribution plan with 
                respect to which an election is made under subparagraph 
                (A) provides for contributions (other than employee 
                contributions (if any)) at least equivalent to the 
                contributions (other than employee contributions (if 
                any)) provided for under the terms of the defined 
                benefit plan.
                    ``(C) Required election period.--The requirements 
                of subparagraph (A) shall not be treated as met unless 
                the defined benefit plan provides that an election 
                under subparagraph (A) may be made at any time during 
                the 90-day period beginning with the later of--
                            ``(i) the commencement of the first plan 
                        year to which this paragraph applies, or
                            ``(ii) the commencement of the employee's 
                        service under the plan.''.
    (c) Effective Dates.--
            (1) General rule.--The amendments made by this section 
        shall apply to plan years beginning after December 31, 1999.
            (2) Special rule for collective bargaining agreements.--In 
        the case of a defined benefit plan maintained pursuant to one 
        or more collective bargaining agreements between employee 
        organizations and one or more employers ratified before the 
        date of the enactment of this Act, the amendments made by this 
        section shall not apply to plan years beginning before the 
        later of--
                    (A) the date on which the last of the collective 
                bargaining agreements relating to the plan terminates 
                (determined without regard to any extension thereof 
                agreed to after the date of the enactment of this Act), 
                or
                    (B) January 1, 2001.
        For purposes of subparagraph (A), any plan amendment made 
        pursuant to a collective bargaining agreement relating to the 
        plan which amends the plan solely to conform to any requirement 
        added by this section shall not be treated as a termination of 
        such collective bargaining agreement.

SEC. 202. TIMELY INVESTMENT OF PLAN CONTRIBUTIONS.

    (a) In General.--Section 404 of the Employee Retirement Income 
Security Act of 1974 (29 U.S.C. 1104) is amended by adding at the end 
the following new subsection:
    ``(e) Any failure, by a person who is a fiduciary with respect to a 
pension plan and who has discretionary authority respecting investment 
of amounts contributed to the plan, to ensure that amounts contributed 
to the plan are invested, in accordance with the terms of the plan and 
this title, before 15 days after the calendar month in which such 
amounts are received by the plan, shall be treated as a breach of 
fiduciary duties under the plan.''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply with respect to plan years beginning on December 31, 1999.

SEC. 203. INCREASE IN ADDITIONAL TAX FOR EARLY DISTRIBUTIONS FROM 
              PENSION PLANS.

    (a) In General.--Paragraph (1) of section 72(t) of the Internal 
Revenue Code of 1986 (relating to imposition of additional tax) is 
amended to read as follows:
            ``(1) Imposition of additional tax.--If any portion of an 
        amount a taxpayer receives from a qualified retirement plan (as 
        defined in section 4974(c)) is (without regard to this 
        paragraph) includible in gross income--
                    ``(A) the taxpayer's tax under this chapter for the 
                taxable year in which such amount is received shall be 
                increased by an amount equal to such portion, and
                    ``(B) such portion shall not be includible in gross 
                income.''
    (b) Conforming Amendment.--Paragraph (6) of section 72(t) of such 
Code is repealed.
    (c) Effective Date.--The amendment made by this section shall apply 
to distributions after December 31, 1999.

                     TITLE III--GROUP HEALTH PLANS

SEC. 301. ADVANCE NOTICE OF MATERIAL REDUCTIONS IN COVERED SERVICES 
              UNDER GROUP HEALTH PLANS.

    (a) Advance Notice.--
            (1) In general.--Section 104(b)(1) of the Employee 
        Retirement Income Security Act of 1974 is amended--
                    (A) by redesignating subparagraphs (A) and (B) as 
                clauses (i) and (ii), respectively,
                    (B) by striking ``(1) The administrator'' and 
                inserting ``(1)(A) The administrator'',
                    (C) by striking ``The administrator'' the second 
                place it appears and inserting the following:
    ``(B) The administrator'',
                    (D) by striking ``If there is a modification'' and 
                inserting the following:
    ``(C) If there is a modification'', and
                    (E) by adding at the end the following new 
                subparagraph:
    ``(D) Notwithstanding subparagraph (C), if there is a modification 
or change described in section 102(a)(1) in covered services or 
benefits provided in the case of a group health plan (as defined in 
section 706(a)(1)) relating to retiree health benefits, a summary 
description of such modification or change shall be furnished to 
participants, beneficiaries, and the Secretary not later than 180 days 
before the effective date of the modification or change. In any case in 
which an individual first becomes a participant under a group health 
plan during any such 180-day period with respect to such a modification 
or change or (in the case of any other beneficiary under the plan) 
first receives benefits under the plan during such 180-day period, the 
requirements of the preceding sentence may be met by providing the 
summary description of such modification or change not later than the 
date on which such individual first becomes a participant or such other 
beneficiary first receives benefits under the plan.''.
            (2) Determination by secretary.--Section 104 of the 
        Employee Retirement Income Security Act of 1974 (29 U.S.C. 
        1024) is further amended by redesignating subsection (d) as 
        subsection (e) and by inserting after subsection (c) the 
        following new subsection:
    ``(d) A change or modification in covered services or benefits 
provided in the case of a group health plan relating to retiree health 
benefits that is subject to the requirements of subsection (b)(1)(D) 
may not take effect until after the Secretary determines that such 
change or modification does not violate the plan, including collective 
bargaining agreements.''.
            (3) Civil penalty.--Section 502(c)(1) of such Act (29 
        U.S.C. 1132(c)(1)) is amended by striking ``or section 
        101(e)(1)'' and inserting ``, section 101(e)(1), or section 
        104(b)(1)(D)''.
    (b) Enforcement.--
            (1) Requirements.--Section 4980B of the Internal Revenue 
        Code of 1986 is amended by redesignating subsection (g) as 
        subsection (h) and by inserting after subsection (f) the 
        following new subsection:
    ``(g) Notice of Change or Modification in Health Benefits.--
            ``(1) In general.--A group health plan meets the 
        requirements of this subsection if--
                    ``(A) the plan sponsor complies with section 
                104(b)(1)(D) of the Employee Retirement Income Security 
                Act of 1974 (relating to providing advance notice of 
                modification or change in retiree health benefits 
                provided under a group health plan), and
                    ``(B) such modification or change in retiree health 
                benefits in a group health plan takes effect after the 
                Secretary of Labor makes the determination required by 
                section 104(d) of such Act that such change or 
                modification does not violate the plan, including 
                collective bargaining agreements.
            ``(2) Noncompliance period.--For the purposes of subsection 
        (b), the noncompliance period with respect to this subsection 
        shall be determined without regard to paragraph (2)(B)(ii) of 
subsection (b).''
            (2) Conforming amendments.--
                    (A) Subsection (a) of section 4980B of such Code is 
                amended by striking ``subsection (f)'' and inserting 
                ``subsections (f) and (g)''.
                    (B) Clause (iv)(II) of section 4980B(f)(2)(B) of 
                such Code is amended by striking ``subsection 
                (g)(1)(D)'' and inserting ``subsection (h)(1)(D)''.
    (c) Effective Date.--The amendments made by this section shall 
apply with respect to plan years ending after January 1, 1999.

  TITLE IV--APPLICATION OF CERTAIN PROHIBITED TRANSACTIONS RULES FOR 
                              401(k) PLANS

SEC. 401. CERTAIN PROHIBITED TRANSACTIONS APPLIED TO 401(K) PLANS.

    (a) In General.--Paragraph (3) of section 407(d) of the Employee 
Retirement Income Security Act of 1974 (29 U.S.C. 1107(d)) is amended 
by adding at the end the following new sentence: ``Such term also 
excludes an individual account plan that includes a qualified cash or 
deferred arrangement described in section 401(k) of the Internal 
Revenue Code of 1986, if such plan, together with all other individual 
account plans maintained by the employer, owns more than 10 percent of 
the assets owned by all pension plans maintained by the employer. For 
purposes of the preceding sentence, the assets of such plan subject to 
participant control (within the meaning of section 404(c)) shall not be 
taken into account.''.
    (b) Effective Date; Transition Rule.--
            (1) Effective date.--Except as provided in paragraph (2), 
        the amendment made by this section shall apply to plans on and 
        after the date of the enactment of this Act.
            (2) Transition rule for plans holding excess securities or 
        property.--In the case of a plan which on the date of the 
        enactment of this Act has holdings of employer securities and 
        employer real property (as defined in section 407(d) of the 
        Employee Retirement Income Security Act of 1974 (29 U.S.C. 
        1107(d)) in excess of the amount specified in such section 407, 
        the amendment made by this section shall apply to any 
        acquisition of such securities and property on or after such 
        date of enactment, but shall not apply to the specific holdings 
        which constitute such excess during the period of such excess.

                TITLE V--RETIREMENT SAVINGS AND SECURITY

SEC. 500. 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--Portability

SEC. 501. MISSING PARTICIPANTS.

    (a) In General.--Section 4050 (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) (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.

                     Subtitle B--Enhanced Security

                     CHAPTER 1--GENERAL PROVISIONS

SEC. 511. 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. 512. 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, 1999.

SEC. 513. FULL FUNDING LIMITATION FOR MULTIEMPLOYER PLANS.

    (a) Full-Funding Limitation.--Section 302(c)(7)(C) (29 U.S.C. 
1082(c)(7)(C)) is amended--
            (1) by inserting ``or in the case of a multiemployer 
        plan,'' after ``paragraph (6)(B),'', and
            (2) by inserting ``and multiemployer plans'' after 
        ``paragraph (6)(b)'' in the heading thereof.
    (b) Valuation.--Section 302(c)(9) (29 U.S.C. 1082(c)(9)) is amended 
by inserting ``(3 years in the case of a multiemployer plan)'' after 
``year''.
    (c) Effective Date.--The amendments made by this section shall 
apply to plan years beginning after December 31, 1998.

SEC. 514. PROHIBITED TRANSACTIONS.

    (a) In General.--Section 502(i) (29 U.S.C. 1132(i)) is amended by 
striking ``5 percent'' and inserting ``10 percent''.
    (b) Effective Date.--The amendments made by this section shall 
apply to prohibited transactions occurring after the date of enactment 
of this Act.

SEC. 515. 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.

                      CHAPTER 2--ERISA ENFORCEMENT

SEC. 521. SHORT TITLE.

    This chapter may be cited as the ``Pension Audit Improvement Act of 
1999''.

SEC. 522. REPEAL OF LIMITED SCOPE AUDIT.

    (a) In General.--Section 103(a)(3) (29 U.S.C. 1023(a)(3)) is 
amended by striking subparagraph (C) and by redesignating subparagraph 
(D) as subparagraph (C).
    (b) Conforming Amendments.--
            (1) Section 103(a)(3)(A) (29 U.S.C. 1023(a)(3)(A)) is 
        amended by striking ``Except as provided in subparagraph (C), 
        the'' and inserting ``The''.
            (2) Section 104(a)(5)(A) (29 U.S.C. 1024(a)(5)(A)) is 
        amended by striking ``section 103(a)(3)(D)'' and inserting 
        ``section 103(a)(3)(C)''.
    (c) Effective Date.--The amendments made by this section shall 
apply with respect to opinions required under section 103(a)(3)(A) of 
the Employee Retirement Income Security Act of 1974 for plan years 
beginning on or after January 1 of the calendar year following the date 
of the enactment of this Act.

SEC. 523. 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) by inserting after section 110 the following new 
        section:

                  ``direct reporting of certain events

    ``Sec. 111. (a) Required Notifications.--
            ``(1) Notifications by plan administrator.--The 
        administrator of an employee benefit plan shall, within 5 
        business days after the administrator 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--
                    ``(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.--An accountant engaged by the 
                administrator of an employee benefit plan under section 
                103(a)(3)(A) shall, within 5 business days after the 
                accountant in connection with such engagement 
                determines that there is evidence that an irregularity 
                may have occurred with respect to the plan--
                            ``(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 under 
paragraph (1)(B) 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 such title 18 (relating to 
                        interference with commerce by threats or 
                        violence);
                            ``(iii) a bribery, a kickback, or a 
                        violation of section 1954 of such title 18 
                        (relating to offer, acceptance, or solicitation 
                        to influence operations of an employee benefit 
                        plan);
                            ``(iv) a violation of section 1027 of such 
                        title 18 (relating to false statements and 
                        concealment of facts in relation to employer 
                        benefit plan records); or
                            ``(v) a violation of section 411, 501, or 
                        511 of this title (relating to criminal 
                        violations).
                    ``(B) The term `irregularity' shall 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 for 
        auditing services 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 his business.
    ``(d) Immunity for Good Faith Notification.--Except as provided in 
this Act, 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 thereunder, if such 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 redesignating paragraph (7) as paragraph (8) and by 
        inserting after paragraph (6) the following new paragraph:
    ``(7)(A) The Secretary may assess a civil penalty of up to $100,000 
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 $100,000 
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 (7)''.
    (c) Clerical Amendments.--
            (1) Section 514(d) (29 U.S.C. 1144(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 such amendments only if the 5-day period described in such 
amendments in connection with such irregularity or termination 
commences at least 90 days after the date of the enactment of this Act.

SEC. 524. ADDITIONAL REQUIREMENTS FOR QUALIFIED PUBLIC ACCOUNTANTS.

    (a) In General.--Section 103(a)(3)(C) (29 U.S.C. 1023(a)(3)(C)), as 
redesignated by section 522, is amended--
            (1) by inserting ``(i)'' after ``(C)'',
            (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 semicolon,
            (5) by adding after subclause (III) (as so redesignated), 
        and flush with clause (i), 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 such person as an accountant under subparagraph (A) 
if such 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-year period immediately 
        preceding such engagement, at least 80 hours of continuing 
        education or training which contributes to the accountant's 
        professional proficiency, at least 20 hours of which have been 
        completed during the 1-year period immediately preceding the 
        engagement, and at least 16 hours of which relate to employee 
        benefit plan matters.
    ``(iii) A person meets the requirements of this clause with respect 
to an engagement of such person as an accountant under subparagraph (A) 
if such 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 
        under regulations of the Secretary; and
            ``(II) in the case of any such person who has, during the 
        peer review period, conducted one 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 one) of plan audits in relation to the 
        scale of such person's auditing practice.
The Secretary shall issue the regulations under subclause (I) no later 
than December 31, 1999.''
    (b) Effective Dates.--
            (1) In general.--Except as provided in paragraph (2), the 
        amendments made by this section shall 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)(3)(C) of the Employee Retirement Income 
        Security Act of 1974 (as added by subsection (a)(6)) shall take 
        effect on the date of enactment of this Act.

SEC. 525. CLARIFICATION OF CIVIL PENALTY FOR BREACH OF FIDUCIARY 
              RESPONSIBILITY.

    (a) Imposition and Amount of Penalty Made Discretionary.--Section 
502(l)(1) (29 U.S.C. 1132(l)(1)) 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 subsection (a)(2) 
or (a)(5). 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) (29 U.S.C. 1132(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 subtitle B of title I of the Employee 
        Retirement Income Security Act of 1974 occurring on or after 
        the date of enactment of this Act.
            (2) Transition rule.--In applying the amendment made by 
        subsection (b) (relating to applicable recovery amount), 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 have been discontinued at any time 
during its existence) shall be treated as having occurred after such 
date of enactment.

TITLE VI--EXPANDED INDIVIDUAL RETIREMENT ACCOUNTS TO INCREASE COVERAGE 
                            AND PORTABILITY

               Subtitle A--Retirement Savings Incentives

SEC. 601. INCREASE IN INCOME LIMITATIONS.

    (a) In General.--Clauses (i) and (ii) of subparagraph (B) of 
section 219(g)(3) of the Internal Revenue Code of 1986 (relating to 
adjusted gross income) are amended to read as follows:
                            ``(i) In the case of a taxpayer filing a 
                        joint return:

      ``For taxable years beginning in:
                                                         The applicable
                                                      dollar amount is:
                  1999...............................          $60,000 
                  2000...............................          $70,000 
                  2001 and thereafter................          $80,000.
                            ``(ii) In the case of any other taxpayer 
                        (other than a married individual filing a 
                        separate return):

      ``For taxable years beginning in:
                                                         The applicable
                                                      dollar amount is:
                  1999...............................          $35,000 
                  2000...............................          $45,000 
                  2001 and thereafter................        $50,000.''
    (b) Phaseout of Limitations.--Clause (ii) of section 219(g)(2)(A) 
is amended--
            (1) by striking ``$10,000'' and inserting ``an amount equal 
        to 10 times the dollar amount applicable for the taxable year 
        under subsection (b)(1)(A)'', and
            (2) by striking ``($20,000 in the case of a joint return 
        for a taxable year beginning after 2006)''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 1998.

SEC. 602. COORDINATION OF IRA DEDUCTION LIMIT WITH ELECTIVE DEFERRAL 
              LIMIT.

    (a) In General.--Section 219(b) of the Internal Revenue Code of 
1986 (relating to maximum amount of deduction) is amended by adding at 
the end the following new paragraph:
            ``(5) Coordination with elective deferral limit.--The 
        amount determined under paragraph (1) or subsection (c) with 
        respect to any individual for any taxable year shall not exceed 
        the excess (if any) of--
                    ``(A) the limitation applicable for the taxable 
                year under section 402(g)(1), over
                    ``(B) the elective deferrals (as defined in section 
                402(g)(3)) of such individual for such taxable year.''
    (b) Conforming Amendment.--Section 219(c) of such Code is amended 
by adding at the end the following new paragraph:
    ``(3) Cross reference.--

                                ``For reduction in paragraph (2) 
amount, see subsection (b)(5).''
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 1998.

               Subtitle B--Distributions and Investments

SEC. 611. DISTRIBUTIONS FROM IRAS MAY BE USED WITHOUT ADDITIONAL TAX TO 
              PAY FINANCIALLY DEVASTATING MEDICAL EXPENSES, OR BY THE 
              UNEMPLOYED.

    (a) Certain Lineal Descendants and Ancestors Treated as Dependents 
and Long-Term Care Services Treated as Medical Care.--Subparagraph (B) 
of section 72(t)(2) of the Internal Revenue Code of 1986 (relating to 
medical expenses) is amended by striking ``medical care'' and all that 
follows and inserting ``medical care determined--
                            ``(i) without regard to whether the 
                        employee itemizes deductions for such taxable 
                        year, and
                            ``(ii) in the case of an individual 
                        retirement plan--
                                    ``(I) by treating such employee's 
                                dependents as including all children, 
                                grandchildren, and ancestors of the 
                                employee or such employee's spouse and
                                    ``(II) by treating qualified long-
                                term care services (as defined in 
                                paragraph (9)) as medical care for 
                                purposes of this subparagraph.''
    (b) Definition of Long-Term Care Services.--Section 72(t) of such 
Code is amended by adding at the end the following new paragraph:
            ``(9) Qualified long-term care services.--For purposes of 
        paragraph (2)(B)--
                    ``(A) In general.--The term `qualified long-term 
                care services' means necessary diagnostic, curing, 
                mitigating, treating, preventive, therapeutic, and 
                rehabilitative services, and maintenance and personal 
                care services (whether performed in a residential or 
                nonresidential setting) which--
                            ``(i) are required by an individual during 
                        any period the individual is an incapacitated 
                        individual (as defined in subparagraph (B)),
                            ``(ii) have as their primary purpose--
                                    ``(I) the provision of needed 
                                assistance with 1 or more activities of 
                                daily living (as defined in section 
                                7702B(c)(2)(B)), or
                                    ``(II) protection from threats to 
                                health and safety due to severe 
                                cognitive impairment, and
                            ``(iii) are provided pursuant to a 
                        continuing plan of care prescribed by a 
                        licensed professional (as defined in 
                        subparagraph (C)).
                    ``(B) Incapacitated individual.--The term 
                `incapacitated individual' means any individual who--
                            ``(i) is unable to perform, without 
                        substantial assistance from another individual 
                        (including assistance involving cueing 
or substantial supervision), at least 2 activities of daily living (as 
so defined), or
                            ``(ii) has severe cognitive impairment as 
                        defined by the Secretary in consultation with 
                        the Secretary of Health and Human Services.
                Such term shall not include any individual otherwise 
                meeting the requirements of the preceding sentence 
                unless, within the preceding 12-month period, a 
                licensed professional has certified that such 
                individual meets such requirements.
                    ``(C) Licensed professional.--The term `licensed 
                professional' means--
                            ``(i) a physician or registered 
                        professional nurse, or
                            ``(ii) any other individual who meets such 
                        requirements as may be prescribed by the 
                        Secretary after consultation with the Secretary 
                        of Health and Human Services.
                    ``(D) Certain services not included.--The term 
                `qualified long-term care services' shall not include 
                any services provided to an individual--
                            ``(i) by a relative (directly or through a 
                        partnership, corporation, or other entity) 
                        unless the relative is a licensed professional 
                        with respect to such services, or
                            ``(ii) by a corporation or partnership 
                        which is related (within the meaning of section 
                        267(b) or 707(b)) to the individual.
                For purposes of this subparagraph, the term `relative' 
                means an individual bearing a relationship to the 
                individual which is described in paragraphs (1) through 
                (8) of section 152(a).''
    (c) Distributions for Certain Unemployed Individuals.--Paragraph 
(2) of section 72(t) of the Internal Revenue Code of 1986 is amended by 
adding at the end the following new subparagraph:
                    ``(G) Distributions to unemployed individuals.--A 
                distribution from an individual retirement plan 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 
                        any taxable year during which such unemployment 
                        compensation is paid or the succeeding taxable 
                        year.''
    (d) Effective Date.--The amendments made by this section shall 
apply to payments and distributions after December 31, 1998.

SEC. 612. CONTRIBUTIONS MUST BE HELD AT LEAST 5 YEARS IN CERTAIN CASES.

    (a) In General.--Section 72(t) of the Internal Revenue Code of 1986 
(relating to 10-percent additional tax on early distributions from 
qualified retirement plans), as amended by section 611(b), is amended 
by adding at the end the following new paragraph:
            ``(10) Certain contributions must be held 5 years.--
                    ``(A) In general.--Paragraph (2)(A)(i) shall not 
                apply to any amount distributed out of an individual 
                retirement plan (other than a Roth IRA) which is 
                allocable to contributions made to the plan during the 
                5-year period ending on the date of such distribution 
                (and earnings on such contributions).
                    ``(B) Ordering rule.--For purposes of this 
                paragraph--
                            ``(i) First-in, first-out rule.--
                        Distributions shall be treated as having been 
                        made--
                                    ``(I) first from the earliest 
                                contribution (and earnings allocable 
                                thereto) remaining in the account at 
                                the time of the distribution, and
                                    ``(II) then from other 
                                contributions (and earnings allocable 
                                thereto) in the order in which made.
                            ``(ii) Allocation of earnings.--Earnings 
                        shall be allocated to contributions in such 
                        manner as the Secretary may prescribe.
                            ``(iii) Aggregations of contributions.--
                        Except as provided by the Secretary, for 
                        purposes of this subparagraph--
                                    ``(I) all contributions made during 
                                the same taxable year may be treated as 
                                1 contribution, and
                                    ``(II) all contributions made 
                                before the first day of the 5-year 
                                period ending on the day before any 
                                distribution may be treated as 1 
                                contribution.
                    ``(C) Special rule for rollovers.--
                            ``(i) Pension plans.--Subparagraph (A) 
                        shall not apply to distributions out of an 
                        individual retirement plan which are allocable 
                        to rollover contributions to which section 
                        402(c), 403(a)(4), or 403(b)(8) applied.
                            ``(ii) Contribution period.--For purposes 
                        of subparagraph (A), amounts shall be treated 
                        as having been held by a plan during any period 
                        such contributions were held (or are treated as 
                        held under this clause) by any individual 
                        retirement plan from which transferred.
                    ``(D) Roth ira.--For rules applicable to Roth IRAs 
                under section 408A, see subsection (d)(3)(F) of such 
                section.''
    (b) Effective Date.--The amendment made by this section shall apply 
to contributions (and earnings allocable thereto) which are made after 
December 31, 1998.
                                 <all>