[Congressional Bills 108th Congress]
[From the U.S. Government Publishing Office]
[S. 1617 Introduced in Senate (IS)]







108th CONGRESS
  1st Session
                                S. 1617

 To amend the Employee Retirement Income Security Act of 1974 and the 
    Internal Revenue Code of 1986 to provide comprehensive pension 
                         protection for women.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                           September 15, 2003

Mr. Kennedy (for himself and Ms. Snowe) introduced the following bill; 
     which was read twice and referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL


 
 To amend the Employee Retirement Income Security Act of 1974 and the 
    Internal Revenue Code of 1986 to provide comprehensive pension 
                         protection for women.

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

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Women's Pension 
Protection Act of 2003''.
    (b) Table of Contents.--

Sec. 1. Short title; table of contents.
   TITLE I--SPOUSAL CONSENT REQUIRED FOR DISTRIBUTIONS FROM DEFINED 
                           CONTRIBUTION PLANS

Sec. 101. Application of joint and survivor annuity rules to all 
                            defined contribution plans.
          TITLE II--DIVISION OF PENSION BENEFITS UPON DIVORCE

Sec. 201. Regulations on time and order of issuance of domestic 
                            relations orders.
Sec. 202. Former spouses treated as surviving spouses in certain cases.
 TITLE III--PROTECTION OF RIGHTS OF FORMER SPOUSES TO PENSION BENEFITS 
 UNDER CERTAIN GOVERNMENT AND GOVERNMENT-SPONSORED RETIREMENT PROGRAMS

                  Subtitle A--Civil Service Retirement

Sec. 301. Survivor annuities for widows, widowers, and former spouses 
                            of Federal employees who die before 
                            attaining age for deferred annuity under 
                            civil service retirement system.
Sec. 302. Court orders relating to Federal retirement benefits for 
                            former spouses of Federal employees.
Sec. 303. Order of precedence for disposition of amounts remaining in 
                            the thrift savings account of a Federal 
                            employee (or former employee) who dies 
                            before making an effective election 
                            controlling such disposition.
                    Subtitle B--Railroad Retirement

Sec. 311. Entitlement of divorced spouses to railroad retirement 
                            annuities independent of actual entitlement 
                            of employee.
Sec. 312. Extension of tier II railroad retirement benefits to 
                            surviving former spouses pursuant to 
                            divorce agreements.
   TITLE IV--MODIFICATIONS OF JOINT AND SURVIVOR ANNUITY REQUIREMENTS

Sec. 401. Modifications of joint and survivor annuity requirements.
                        TITLE V--PLAN AMENDMENTS

Sec. 501. Provisions relating to plan amendments.

   TITLE I--SPOUSAL CONSENT REQUIRED FOR DISTRIBUTIONS FROM DEFINED 
                           CONTRIBUTION PLANS

SEC. 101. APPLICATION OF JOINT AND SURVIVOR ANNUITY RULES TO ALL 
              DEFINED CONTRIBUTION PLANS.

    (a) Application to All Defined Contribution Plans.--
            (1) Amendments to erisa.--
                    (A) In general.--Section 205(a) of the Employee 
                Retirement Income Security Act of 1974 (29 U.S.C. 
                1055(a)) is amended by striking ``to which this section 
                applies''.
                    (B) Conforming amendments.--
                            (i) Section 205(b) of such Act (29 U.S.C. 
                        1055(b)) is amended to read as follows:
    ``(b)(1)(A) In the case of--
            ``(i) a tax credit employee stock ownership plan (as 
        defined in section 409(a) of the Internal Revenue Code of 
        1986), or
            ``(ii) an employee stock ownership plan (as defined in 
        section 4975(e)(7) of such Code),
subsection (a) shall not apply to that portion of the employee's 
accrued benefit to which the requirements of section 409(h) of such 
Code apply.
    ``(B) Subparagraph (A) shall apply with respect to any participant 
only if--
            ``(i) such plan provides that the participant's 
        nonforfeitable accrued benefit (reduced by any security 
        interest held by the plan by reason of a loan outstanding to 
        such participant) is payable in full, on the death of the 
        participant, to the participant's surviving spouse (or, if 
        there is no surviving spouse or the surviving spouse consents 
        in the manner required under subsection (c)(2), to a designated 
        beneficiary),
            ``(ii) such participant does not elect the payment of 
        benefits in the form of a life annuity, and
            ``(iii) with respect to such participant, such plan is not 
        a direct or indirect transferee (in a transfer after December 
        31, 1984) of a plan to which, at the time of the transfer, 
        subsection (a) applied (or to which this clause applied with 
        respect to the participant).
Clause (iii) shall apply only with respect to the transferred assets 
(and income therefrom) if the plan separately accounts for such assets 
and any income therefrom. A plan shall not be treated as failing to 
meet the requirements of this subparagraph merely because the plan 
provides that benefits will not be payable to the surviving spouse of 
the participant unless the participant and such spouse had been married 
throughout the 1-year period ending on the earlier of the participant's 
annuity starting date or the date of the participant's death.
    ``(2) This section shall not apply to a plan which the Secretary of 
the Treasury or his delegate has determined is a plan described in 
section 404(c) of the Internal Revenue Code of 1986 (or a continuation 
thereof) in which participation is substantially limited to individuals 
who, before January 1, 1976, ceased employment covered by the plan.''
                            (ii) Section 205(e)(2) of such Act (20 
                        U.S.C. 1055(e)(2)) is amended--
                                    (I) by striking ``individual 
                                account plan or participant described 
                                in subparagraph (B) or (C) of 
                                subsection (b)(1)'' and inserting 
                                ``individual account plan to which this 
                                section applies, or any participant 
                                described in subsection (b)(1)(B)'', 
                                and
                                    (II) by striking ``50 percent of''.
            (2) Amendments to internal revenue code.--
                    (A) In general.--Section 401(a)(11)(A) of the 
                Internal Revenue Code of 1986 (relating to requirement 
                of joint and survivor annuity and preretirement 
                survivor annuity) is amended by striking the matter 
                preceding clause (i) and inserting:
                    ``(A) In general.--Except as provided in section 
                417 and subparagraph (B), a trust forming part of a 
                plan shall not constitute a qualified trust under this 
section unless such plan provides--''.
                    (B) Conforming amendments.--
                            (i) Section 401(a)(11) of such Code is 
                        amended by striking subparagraphs (B), (C), and 
                        (D) and inserting the following new 
                        subparagraphs:
                    ``(B) Exception for certain esop benefits.--
                            ``(i) In general.--In the case of--
                                    ``(I) a tax credit employee stock 
                                ownership plan (as defined in section 
                                409(a)), or
                                    ``(II) an employee stock ownership 
                                plan (as defined in section 
                                4975(e)(7)),
                        subparagraph (A) shall not apply to that 
                        portion of the employee's accrued benefit to 
                        which the requirements of section 409(h) apply.
                            ``(ii) Nonforfeitable benefit must be paid 
                        in full, etc.--In the case of any participant, 
                        clause (i) shall apply only if--
                                    ``(I) such plan provides that the 
                                participant's nonforfeitable accrued 
                                benefit (reduced by any security 
                                interest held by the plan by reason of 
                                a loan outstanding to such participant) 
                                is payable in full, on the death of the 
                                participant, to the participant's 
                                surviving spouse (or, if there is no 
                                surviving spouse or the surviving 
                                spouse consents in the manner required 
                                under section 417(a)(2), to a 
                                designated beneficiary),
                                    ``(II) such participant does not 
                                elect the payment of benefits in the 
                                form of a life annuity, and
                                    ``(III) with respect to such 
                                participant, such plan is not a direct 
                                or indirect transferee (in a transfer 
                                after December 31, 1984) of a plan to 
                                which, at the time of the transfer, 
                                subparagraph (A) applied (or to which 
                                this subclause applied with respect to 
                                the participant).
                        Subclause (III) shall apply only with respect 
                        to the transferred assets (and income 
                        therefrom) if the plan separately accounts for 
                        such assets and any income therefrom.
                    ``(C) Special rule where participant and spouse 
                married less than 1 year.--A plan shall not be treated 
                as failing to meet the requirements of subparagraph 
                (B)(ii) merely because the plan provides that benefits 
                will not be payable to the surviving spouse of the 
                participant unless the participant and such spouse had 
                been married throughout the 1-year period ending on the 
                earlier of the participant's annuity starting date or 
                the date of the participant's death.''
                            (ii) Section 401(a)(11) of such Code is 
                        amended by redesignating subparagraphs (E) and 
                        (F) as subparagraphs (D) and (E), respectively.
                            (iii) Section 417(c)(2) of such Code is 
                        amended--
                                    (I) by striking ``defined 
                                contribution plan or participant 
                                described in clause (ii) or (iii) of 
                                section 401(a)(11)(B)'' and inserting 
                                ``defined contribution plan to which 
                                section 401(a)(11) applies, or any 
                                participant described in section 
                                401(a)(11)(B)(ii),''; and
                                    (II) by striking ``50 percent of''.
    (b) Special Rules Relating to Defined Contribution Plans.--
            (1) Amendments to erisa.--
                    (A) Loans.--Section 205(c)(4) of the Employee 
                Retirement Income Security Act of 1974 (29 U.S.C. 
                1055(c)(4)) is amended by adding at the end the 
                following flush sentence:
``This paragraph shall not apply to an individual account plan other 
than a plan which is subject to the funding standards of section 302.''
                    (B) Hardship withdrawals.--Section 205(c) of such 
                Act (29 U.S.C. 1055(c)) is amended by adding at the end 
                the following new paragraph:
    ``(9) Nothing in this section shall be construed as requiring an 
individual account plan to obtain the consent of the spouse of a 
participant before making a hardship distribution to the participant.''
                    (C) Payments in lieu of annuity.--Section 205 of 
                such Act (29 U.S.C. 1055) is amended by redesignating 
                subsection (l) as subsection (m) and by inserting after 
                subsection (k) the following new subsection:
    ``(l)(1) For purposes of this section, an individual account plan 
required to provide a qualified joint and survivor annuity or a 
qualified preretirement survivor annuity shall be treated as 
providing--
            ``(A) a qualified joint and survivor annuity if the plan 
        provides that the account balance of the participant to which 
        the participant had a nonforfeitable right (within the meaning 
        of section 203) will be distributed in a series of periodic 
        payments (determined in accordance with tables prescribed by 
        the Secretary of the Treasury) over the joint life expectancy 
        of the participant and the participant's spouse, and
            ``(B) a qualified preretirement survivor annuity if the 
        plan provides that the account balance of the participant (as 
        of the date of death) to which the participant had a 
        nonforfeitable right (as so defined) will be distributed to the 
        surviving spouse, at the option of the spouse, in either such a 
        series of periodic payments over the life expectancy of the 
        surviving spouse or any other form of benefit payment that the 
        plan provides.
A plan shall not be treated as failing to meet the requirements of 
subparagraph (A) merely because the plan provides that a participant 
may, with the consent of the spouse, elect at any time to have the plan 
pay all of the remaining portion of the account balance in any other 
form of benefit payment that the plan provides.
    ``(2) In the case of a termination of an individual account plan 
that provides for payments described in paragraph (1), such plan shall 
be treated as meeting the requirements of paragraph (1) only if, for 
each participant or surviving spouse eligible to receive such payments 
who is not paid the remaining account balance in a lump sum, the plan 
administrator purchases from an insurer an irrevocable commitment to 
provide--
            ``(A) the payments described in paragraph (1), or
            ``(B) either--
                    ``(i) a qualified joint and survivor annuity (and, 
                if applicable, a qualified preretirement survivor 
                annuity) in the case of a participant, or
                    ``(ii) a single life annuity or qualified 
                preretirement survivor annuity, whichever is 
                applicable, in the case of a surviving spouse of a 
                participant.
    ``(3) The requirements of paragraph (2) are met with respect to a 
purchase only if, within a reasonable time after the effective date of 
the purchase, the individual entitled to payments from the insurer is 
provided a copy of the insurance contract or a certificate showing the 
insurer's name and address and clearly stating the insurer's obligation 
to provide the required payments.''.
                    (D) Conforming amendment.--Section 206 of such Act 
                (29 U.S.C. 1056) is amended by adding at the end the 
                following:
    ``(g) Final Distributions From Terminated Individual Account 
Plans.--In the case of an individual account plan which provides for 
payments described in section 205(l)(1), the plan shall provide that, 
upon termination of such plan, benefits of married participants and 
surviving spouses shall be paid in accordance with section 
205(l)(2).''.
            (2) Amendments to internal revenue code.--
                    (A) Loans.--Section 417(a)(4) of the Internal 
                Revenue Code of 1986 is amended by adding at the end 
                the following flush sentence:
        ``This paragraph shall not apply to a defined contribution plan 
        other than a plan which is subject to the funding standards of 
        section 412.''
                    (B) Hardship withdrawals.--Section 417(a) of such 
                Code is amended by adding at the end the following new 
                paragraph:
            ``(8) Hardship distributions.--Nothing in this section or 
        section 401(a)(11) shall be construed as requiring a defined 
        contribution plan to obtain the consent of the spouse of a 
        participant before making a hardship distribution to the 
        participant.''
                    (C) Payments in lieu of annuity.--Section 417 of 
                such Code (relating to definitions and special rules 
                for purposes of minimum survivor annuity requirements) 
                is amended by adding at the end the following new 
                subsection:
    ``(g) Special Rules for Defined Contribution Plans.--For purposes 
of this section and section 401(a)(11)--
            ``(1) Payments in lieu of annuities.--A defined 
        contribution plan required to provide a qualified joint and 
        survivor annuity or a qualified preretirement survivor annuity 
        shall be treated as providing--
                    ``(A) a qualified joint and survivor annuity if the 
                plan provides that the account balance of the 
                participant to which the participant had a 
                nonforfeitable right (within the meaning of section 
                411(a)) will be distributed in a series of periodic 
                payments (determined in accordance with tables 
                prescribed by the Secretary) over the joint life 
                expectancy of the participant and the participant's 
                spouse, and
                    ``(B) a qualified preretirement survivor annuity if 
                the plan provides that the account balance of the 
                participant (as of the date of death) to which the 
                participant had a nonforfeitable right (as so defined) 
                will be distributed to the surviving spouse, at the 
                option of the spouse, in either such a series of 
                periodic payments over the life expectancy of the 
                surviving spouse or any other form of benefit payment 
                that the plan provides.
        A plan shall not be treated as failing to meet the requirements 
        of subparagraph (A) merely because the plan provides that a 
        participant may, with the consent of the spouse, elect at any 
        time to have the plan pay all of the remaining portion of the 
        account balance in any other form of benefit payment that the 
        plan provides.
            ``(2) Terminating plans.--In the case of a termination of a 
        defined contribution plan that provides for payments described 
        in paragraph (1), such plan shall be treated as meeting the 
        requirements of paragraph (1) only if, for each participant or 
        surviving spouse eligible to receive such payments who is not 
        paid the remaining account balance in a lump sum, the plan 
        administrator purchases from an insurer an irrevocable 
        commitment to provide--
                    ``(A) the payments described in paragraph (1), or
                    ``(B) either--
                            ``(i) a qualified joint and survivor 
                        annuity (and, if applicable, a qualified 
                        preretirement survivor annuity) in the case of 
                        a participant, or
                            ``(ii) a single life annuity or qualified 
                        preretirement survivor annuity, whichever is 
                        applicable, in the case of a surviving spouse 
                        of a participant.
            ``(3) Notice.--The requirements of paragraph (2) are met 
        with respect to a purchase only if, within a reasonable time 
        after the effective date of the purchase, the individual 
        entitled to payments from the insurer is provided a copy of the 
        insurance contract or a certificate showing the insurer's name 
        and address and clearly stating the insurer's obligation to 
        provide the required payments.''.
                    (D) Conforming amendment.--Section 401(a) of such 
                Code (relating to requirements for a qualified trust) 
                is amended by inserting after paragraph (34) the 
                following new paragraph:
            ``(35) Final distributions from terminated defined 
        contribution plans.--In the case of a defined contribution plan 
        which provides for payments described in section 417(g)(1), a 
        trust forming part of such plan shall not be treated as failing 
        to constitute a qualified trust under this section merely 
        because the pension plan of which such trust is a part pays, 
        upon its termination, benefits in accordance with section 
        417(g)(2).''
    (c) Transfers Between Plans.--
            (1) Amendment to erisa.--Section 205(c) of the Employee 
        Retirement Income Security Act of 1974 (29 U.S.C. 1055(c)), as 
        amended by this Act, is amended by adding at the end the 
        following new paragraph:
    ``(10) Nothing in this section shall be treated as requiring a plan 
to obtain the consent of the spouse of the participant before making a 
direct trustee-to-trustee transfer of any portion of the balance to the 
credit of the participant to another pension plan if the other plan is 
a plan to which this section applies.''
            (2) Amendment to internal revenue code.--Section 417(a) of 
        the Internal Revenue Code of 1986, as amended by this Act, is 
        amended by adding at the end the following new paragraph:
            ``(9) Transfers.--Nothing in this section or section 
        401(a)(11) shall be treated as requiring a plan to obtain the 
        consent of the spouse of the participant before making a direct 
        trustee-to-trustee transfer of any portion of the balance to 
        the credit of the participant to another plan if the other plan 
        is a plan to which this section and section 401(a)(11) apply.''
    (d) Effective Dates.--
            (1) In general.--Except as provided in paragraph (2), the 
        amendments made by this section shall apply to plan years 
        beginning after December 31, 2003.
            (2) Special rule for collectively bargained plans.--In the 
        case of a plan maintained pursuant to 1 or more collective 
        bargaining agreements between employee representatives and 1 or 
        more employers ratified on or before the date of the enactment 
        of this Act the amendments made by this section shall not, in 
        the case of employees covered by any such agreement, apply to 
        plan years beginning before the earlier of--
                    (A) the later of--
                            (i) January 1, 2004, or
                            (ii) the date on which the last of such 
                        collective bargaining agreements terminates 
                        (determined without regard to any extension 
                        thereof after the date of enactment of this 
                        Act), or
                    (B) January 1, 2005.
            (3) 1 hour of service requirement.--The amendments made by 
        this section shall apply only in the case of participants who 
        have at least 1 hour of service under the plan on or after the 
        date of the enactment of this Act or who have at least 1 hour 
        of paid leave on or after such date.

          TITLE II--DIVISION OF PENSION BENEFITS UPON DIVORCE

SEC. 201. REGULATIONS ON TIME AND ORDER OF ISSUANCE OF DOMESTIC 
              RELATIONS ORDERS.

    Not later than one year after the date of the enactment of this 
Act, the Secretary of the Treasury shall issue regulations under 
section 206(d)(3) of the Employee Retirement Security Act of 1974 and 
section 414(p) of the Internal Revenue Code of 1986 which clarify 
that--
            (1) a domestic relations order otherwise meeting the 
        requirements to be a qualified domestic relations order, 
        including the requirements of section 206(d)(3)(D) of such Act 
        and section 414(p)(3) of such Code, shall not fail to be 
        treated as a qualified domestic relations order solely 
        because--
                    (A) the order is issued after, or revises, another 
                domestic relations order or qualified domestic 
                relations order; or
                    (B) of the time at which it is issued; and
            (2) any order described in paragraph (1) shall be subject 
        to the same requirements and protections which apply to 
        qualified domestic relations orders, including the provisions 
        of section 206(d)(3)(H) of such Act and section 414(p)(7) of 
        such Code.

SEC. 202. FORMER SPOUSES TREATED AS SURVIVING SPOUSES IN CERTAIN CASES.

    (a) Amendment to ERISA.--Section 205 of the Employee Retirement 
Income Security Act of 1974 (29 U.S.C. 1055), as amended by this Act, 
is amended by redesignating subsection (m) as subsection (n) and by 
inserting after subsection (l) the following new subsection:
    ``(m)(1)(A) For purposes of this section, a former spouse to whom 
this subsection applies shall, upon the death of the participant to 
whom the former spouse was married, be entitled to receive a qualified 
joint and survivor annuity or qualified preretirement survivor annuity 
in the same manner, and to the same extent, as if the former spouse 
were the surviving spouse of the participant.
    ``(B) This subsection applies to a former spouse of a participant 
in a plan if--
            ``(i) the plan is a defined benefit plan or an individual 
        account plan subject to the funding standards under section 
        302,
            ``(ii) an election by the former spouse to waive the 
        benefits of this section was not in effect during the period 
        the participant was covered by the plan or at the time of the 
        dissolution of the marriage,
            ``(iii) there is no domestic relations order which 
        specifically provides that the survivor benefits under the plan 
        were considered by the participant and the former spouse and 
        that the survivor benefits were expressly awarded, denied, or 
        waived by the former spouse, and
            ``(iv) the requirements of either paragraph (2) or (3) are 
        met with respect to the participant.
    ``(2) In the case of a qualified joint and survivor annuity, the 
requirements of this paragraph are met with respect to a participant if 
the participant and the former spouse were married on the annuity 
starting date and--
            ``(A) the participant's annuity was reduced in order to 
        provide a qualified joint and survivor annuity under this 
        section, or
            ``(B) the participant was receiving a subsidized annuity 
        described in subsection (c)(5).
    ``(3) In the case of a qualified preretirement survivor annuity, 
the requirements of this paragraph are met with respect to a 
participant if the participant--
            ``(A) was married to the former spouse for at least 1 year 
        during the period the participant was covered by the plan,
            ``(B) did not remarry at any time following the dissolution 
        of the marriage to the former spouse, and
            ``(C) did not make a subsequent beneficiary designation at 
        any time after dissolution of the marriage to the former 
        spouse, and the plan does not provide for the payment of an 
        equivalent or greater benefit to a default beneficiary.
    ``(4)(A) This subsection shall not apply to a former spouse unless 
the former spouse notifies the plan of possible eligibility for a 
benefit under this subsection within one year of the participant's 
death or one year after the effective date of this subsection, 
whichever is later, and provides such information as may be necessary 
to establish each element of eligibility.
    ``(B) The plan may waive the one-year requirement under this 
paragraph 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) Payments to a former spouse under this subsection shall not 
be made before the earliest date the participant would have been 
eligible to receive a retirement benefit under the plan.
    ``(D) Any payments to a former spouse pursuant to this subsection 
shall be prospective only, beginning from the date the former spouse 
notifies the plan of the former spouse's potential eligibility for 
benefits under this subsection.
    ``(E) In making determinations under this subsection, the plan may 
reasonably rely on the validity of marriage certificates, divorce 
decrees, death certificates, and other documentation such as obituaries 
and affidavits, and need not independently authenticate their validity. 
Any plan fiduciary that in good faith pays a qualified preretirement 
survivor annuity benefit to a former spouse in accordance with this 
subsection shall be discharged from liability to any other claimant.
    ``(F) In the event that the plan makes payments to a former spouse 
under this section, and a surviving spouse or another former spouse 
comes forward and establishes that the participant had remarried after 
dissolution of the marriage to the former spouse who is receiving 
benefits, the plan shall cease payments to that former spouse. If the 
plan has evidence that the former spouse's representations to the plan 
on the participant's remarriage status were not in good faith, the plan 
may seek repayment of any amounts paid. If the plan determines that the 
participant was legally married at the time of death, it shall make 
payments on a prospective basis only to that surviving spouse.''
    (b) Amendment to Internal Revenue Code.--Section 417 of the 
Internal Revenue Code of 1986 (relating to definitions and special 
rules for purposes of minimum survivor annuity requirements), as 
amended by this Act, is amended by adding at the end the following new 
subsection:
    ``(h) Treatment of Certain Former Spouses.--
            ``(1) In general.--For purposes of this section and section 
        401(a)(11), a former spouse to whom this subsection applies 
        shall, upon the death of the participant to whom the former 
        spouse was married, be entitled to receive a qualified joint 
        and survivor annuity or qualified preretirement survivor 
        annuity in the same manner, and to the same extent, as if the 
        former spouse were the surviving spouse of the participant.
            ``(2) Application.--This subsection applies to a former 
        spouse of a participant in a plan if--
                    ``(A) the plan is a defined benefit plan or a 
                defined contribution plan subject to the funding 
                standards under section 412,
                    ``(B) an election by the former spouse to waive the 
                benefits of this section was not in effect during the 
                period the participant was covered by the plan or at 
                the time of the dissolution of the marriage,
                    ``(C) there is no domestic relations order which 
                specifically provides that the survivor benefits under 
                the plan were considered by the participant and the 
                former spouse and that the survivor benefits were 
                expressly awarded, denied, or waived by the former 
                spouse, and
                    ``(D) the requirements of either paragraph (3) or 
                (4) are met with respect to the participant.
            ``(3) Qualified Joint and Survivor Annuity.--In the case of 
        a qualified joint and survivor annuity, the requirements of 
        this paragraph are met with respect to a participant if the 
        participant and the former spouse were married on the annuity 
        starting date and--
                    ``(A) the participant's annuity was reduced in 
                order to provide a qualified joint and survivor annuity 
                under this section, or
                    ``(B) the participant was receiving a subsidized 
                annuity described in section 417(a)(5).
            ``(4) Qualified Preretirement Survivor Annuity.--In the 
        case of a qualified preretirement survivor annuity, the 
        requirements of this paragraph are met with respect to a 
        participant if the participant--
                    ``(A) was married to the former spouse for at least 
                1 year during the period the participant was covered by 
                the plan,
                    ``(B) did not remarry at any time following the 
                dissolution of the marriage to the former spouse, and
                    ``(C) did not make a subsequent beneficiary 
                designation at any time after dissolution of the 
                marriage to the former spouse, and the plan does not 
                provide for the payment of an equivalent or greater 
                benefit to a default beneficiary.
            ``(5) Other rules.--
                    ``(A) Notice.--
                            ``(i) In general.--This subsection shall 
                        not apply to a former spouse unless the former 
                        spouse notifies the plan of the former spouse's 
                        eligibility under this subsection within one 
                        year of the participant's death or one year 
                        after the effective date of this subsection, 
                        whichever is later, and provides such 
                        information as may be required to establish 
                        each element of eligibility.
                            ``(ii) Waiver.--The plan may waive the one-
                        year requirement under clause (i) 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.
                    ``(B) Time for payment.--Payments to a former 
                spouse under this subsection shall not be made before 
                the earliest date the participant would have been 
                eligible to receive a retirement benefit under the 
                plan.
                    ``(C) Prospective payments.--Payments to a former 
                spouse under this subsection shall be prospective only, 
                beginning from the date the former spouse notifies the 
                plan of the former spouse's potential eligibility for 
                benefits under this subsection.
                    ``(D) Reliance.--In making determinations under 
                this subsection, the plan may reasonably rely on the 
                validity of marriage certificates, divorce decrees, 
                death certificates, and other documentation such as 
                obituaries and affidavits, and need not independently 
                authenticate their validity. Any plan fiduciary that in 
                good faith pays a qualified preretirement survivor 
                annuity to a former spouse under this subsection shall 
                be discharged from liability to any other claimant.
                    ``(E) Subsequent claims.--In the event that the 
                plan makes payments to a former spouse under this 
                section, and a surviving spouse or another former 
                spouse comes forward and establishes that the 
                participant had remarried after dissolution of the 
                marriage to the former spouse who is receiving 
                benefits, the plan shall cease payments to that former 
                spouse. If the plan has evidence that the former 
                spouse's representations to the plan on the 
                participant's remarriage status were not in good faith, 
                the plan may seek repayment of any amounts paid. If the 
                plan determines that the participant was legally 
                married at the time of death, it shall make payments on 
                a prospective basis only to that surviving spouse.''
    (c) Effective Dates.--
            (1) In general.--Except as provided in paragraph (2), the 
        amendments made by this subsection shall apply to plan years 
        after December 31, 2003.
            (2) Special rule for collectively bargained plans.--In the 
        case of a plan maintained pursuant to 1 or more collective 
        bargaining agreements between employee representatives and 1 or 
        more employers ratified on or before the date of the enactment 
        of this Act, the amendments made by this section shall not, in 
        the case of employees covered by any such agreement, apply to 
        benefits which are payable (without regard to when the 
        participant died) in plan years before the earlier of--
                    (A) the later of January 1, 2004, or the date on 
                which the last of such collective bargaining agreements 
                terminates (determined without regard to any extension 
                thereof after the date of enactment of this Act), or
                    (B) January 1, 2005.

 TITLE III--PROTECTION OF RIGHTS OF FORMER SPOUSES TO PENSION BENEFITS 
 UNDER CERTAIN GOVERNMENT AND GOVERNMENT-SPONSORED RETIREMENT PROGRAMS

                  Subtitle A--Civil Service Retirement

SEC. 301. SURVIVOR ANNUITIES FOR WIDOWS, WIDOWERS, AND FORMER SPOUSES 
              OF FEDERAL EMPLOYEES WHO DIE BEFORE ATTAINING AGE FOR 
              DEFERRED ANNUITY UNDER CIVIL SERVICE RETIREMENT SYSTEM.

    (a) Benefits for Widow or Widower.--Section 8341(f) of title 5, 
United States Code, is amended--
            (1) in the matter preceding paragraph (1)--
                    (A) by inserting ``a former employee separated from 
                the service with title to deferred annuity from the 
                Fund dies before having established a valid claim for 
                annuity and is survived by a spouse, or if'' before ``a 
                Member''; and
                    (B) by inserting ``of such former employee or 
                Member'' after ``the surviving spouse'';
            (2) in paragraph (1)--
                    (A) by inserting ``former employee or'' before 
                ``Member commencing''; and
                    (B) by inserting ``former employee or'' before 
                ``Member dies''; and
            (3) in the undesignated sentence following paragraph (2)--
                    (A) in the matter preceding subparagraph (A), by 
                inserting ``former employee or'' before ``Member''; and
                    (B) in subparagraph (B), by inserting ``former 
                employee or'' before ``Member''.
    (b) Benefits for Former Spouse.--Section 8341(h) of title 5, United 
States Code, is amended--
            (1) in paragraph (1), by adding after the first sentence 
        ``Subject to paragraphs (2) through (5) of this subsection, a 
        former spouse of a former employee who dies after having 
        separated from the service with title to a deferred annuity 
        under section 8338(a) but before having established a valid 
        claim for annuity is entitled to a survivor annuity under this 
        subsection, if and to the extent expressly provided for in an 
        election under section 8339(j)(3) of this title, or in the 
        terms of any decree of divorce or annulment or any court order 
        or court-approved property settlement agreement incident to 
        such decree.''; and
            (2) in paragraph (2)--
                    (A) in subparagraph (A)(ii), by striking ``or 
                annuitant,'' and inserting ``annuitant, or former 
                employee''; and
                    (B) in subparagraph (B)(iii), by inserting ``former 
                employee or'' before ``Member''.
    (c) Protection of Survivor Benefit Rights.--Section 8339(j)(3) of 
title 5, United States Code, is amended by inserting at the end the 
following: ``The Office shall provide by regulation for the application 
of this subsection to the widow, widower, or surviving former spouse of 
a former employee who dies after having separated from the service with 
title to a deferred annuity under section 8338(a) but before having 
established a valid claim for annuity.''.
    (d) Effective Date.--The amendments made by this section shall take 
effect on the date of the enactment of this Act and shall apply only in 
the case of a former employee who dies on or after such date.

SEC. 302. COURT ORDERS RELATING TO FEDERAL RETIREMENT BENEFITS FOR 
              FORMER SPOUSES OF FEDERAL EMPLOYEES.

    (a) Civil Service Retirement System.--
            (1) In general.--Section 8345(j) of title 5, United States 
        Code, is amended--
                    (A) by redesignating paragraph (3) as paragraph 
                (4); and
                    (B) by inserting after paragraph (2) the following:
            ``(3)(A) Except as provided in this paragraph, a court 
        decree, court order, property settlement, or similar process 
        referred to under paragraph (1)(A) shall not be treated as 
        failing to meet the requirements of such paragraph solely 
        because it authorizes payment of benefits to be made to the 
        former spouse of the employee or Member before the employee or 
        Member begins to receive payment of benefits.
            ``(B) Subparagraph (A) shall only apply if the payment of 
        benefits--
                    ``(i) are not required to be made before the date 
                on which the employee or Member attains (or would have 
                attained) the earliest retirement age; and
                    ``(ii) are required to be made as if the employee 
                or Member had retired on the date on which such payment 
                is to begin, but taking into account only the present 
                value of the benefits as calculated on the basis of the 
                employee's or Member's service at the time the former 
                spouse begins collecting benefits.
            ``(C) For purposes of this paragraph, the term `earliest 
        retirement age' means the date on which the employee or Member 
        is entitled to an annuity under this chapter (without regard to 
        whether the employee or Member separated from service or made 
        any required election).
            ``(D) For purposes of this paragraph, former employees or 
        Members shall be treated as employees or Members.
            ``(E)(i) The Office of Personnel Management shall make such 
        adjustments as are necessary to the benefits of a former spouse 
        under this paragraph to reflect any increase in creditable 
        service that affects the benefit of the former spouse and that 
        occurs at the time the employee or Member actually retires.
            ``(ii) To ensure that the total of all benefits payable 
        under this chapter (other than benefits based on participation 
        in the Thrift Savings Plan) based on the service of an employee 
        or Member do not actuarially exceed all benefits which could 
        otherwise be payable under section 8339, the Office of 
        Personnel Management may make an adjustment in the payment of 
        benefits to--
                    ``(I) a former spouse under this paragraph; or
                    ``(II) the employee or Member.
        Such actuarial value shall in no event be less than the present 
        value determined under subparagraph (B).''
    (b) Federal Employees Retirement System.--Section 8467 of title 5, 
United States Code, is amended--
            (1) by redesignating subsection (c) as subsection (d); and
            (2) by inserting after subsection (b) the following:
    ``(c)(1) Except as provided in this subsection, a court decree, 
court order, property settlement, or similar process referred to under 
subsection (a)(1) shall not be treated as failing to meet the 
requirements of such subsection solely because it authorizes payment of 
benefits to be made to the former spouse of the employee or Member 
before the employee or Member begins to receive payment of benefits.
    ``(2) Paragraph (1) shall only apply if the payment of benefits--
            ``(A) are not required to be made before the date on which 
        the employee or Member attains (or would have attained) the 
        earliest retirement age; and
            ``(B) are required to be made as if the employee or Member 
        had retired on the date on which such payment is to begin, but 
        taking into account only the present value of the benefits as 
        calculated on the basis of the employee's or Member's service 
        at the time the former spouse begins collecting benefits.
    ``(3) For purposes of this subsection, the term `earliest 
retirement age' means the date on which the employee or Member is 
entitled to an annuity under this chapter (without regard to whether 
the employee or Member separated from service or made any required 
election).
    ``(4) For purposes of this subsection, former employees or Members 
shall be treated as employees or Members.
    ``(5)(A) The Office of Personnel Management shall make such 
adjustments as are necessary to the benefits of a former spouse under 
this subsection to reflect any increase in creditable service that 
affects the benefit of the former spouse and that occurs at the time 
the employee or Member actually retires.
    ``(B) To ensure that the total of all benefits payable under this 
chapter (other than benefits based on participation in the Thrift 
Savings Plan) based on the service of an employee or Member do not 
actuarially exceed all benefits which could otherwise be payable under 
section 8415, the Office of Personnel Management may make an adjustment 
in the payment of benefits to--
            ``(i) a former spouse under this subsection; or
            ``(ii) the employee or Member.
        Such actuarial value shall in no event be less than the present 
        value determined under paragraph (2).''
    (c) Regulations.--Not later than 1 year after the date of enactment 
of this Act, the Office of Personnel Management shall prescribe 
regulations to carry out the amendments made by this section.
    (d) Effective Date.--The amendments made by this section shall take 
effect 1 year after the date of enactment of this Act and apply to any 
court decree, court order, property settlement, or similar process 
issued after such effective date.

SEC. 303. ORDER OF PRECEDENCE FOR DISPOSITION OF AMOUNTS REMAINING IN 
              THE THRIFT SAVINGS ACCOUNT OF A FEDERAL EMPLOYEE (OR 
              FORMER EMPLOYEE) WHO DIES BEFORE MAKING AN EFFECTIVE 
              ELECTION CONTROLLING SUCH DISPOSITION.

    (a) In General.--Section 8433(e) of title 5, United States Code, is 
amended--
            (1) by striking ``(e)'' and inserting ``(e)(1)'';
            (2) by striking all that follows ``paid'' and inserting 
        ``in accordance with paragraph (2).''; and
            (3) by adding at the end the following:
    ``(2)(A) An amount under paragraph (1) shall be paid in a manner 
consistent with the provisions of section 8424(d), except that, in 
applying the order of precedence under such provisions--
            ``(i) the widow or widower of the decedent shall be the 
        first party entitled to receive (instead of any designated 
        beneficiary); and
            ``(ii) if there is no widow or widower, the party next 
        entitled to receive shall be the beneficiary or beneficiaries 
        designated by the employee or Member (or former employee or 
        Member) in accordance with the procedures that would otherwise 
        normally apply, subject to such additional conditions as the 
        Executive Director shall by regulation prescribe based on 
        section 205(c)(2) of the Employee Retirement Income Security 
        Act of 1974 (29 U.S.C. 1055(c)(2)).
    ``(B) The order of precedence under subparagraph (A) shall not 
apply if the widow or widower consents in writing to the application of 
the order of precedence under section 8424(d).
    ``(C) For purposes of this paragraph, the term `widow' or `widower' 
shall not include a common law spouse of a deceased employee or Member 
(or former employee or Member).''
    (b) Effective Date.--The amendments made by this section shall take 
effect on the date which is 1 year after the date of the enactment of 
this Act (or such earlier date as the Executive Director of the Federal 
Retirement Thrift Investment Board may prescribe), and shall apply in 
the case of any individual who dies on or after such date.

                    Subtitle B--Railroad Retirement

SEC. 311. ENTITLEMENT OF DIVORCED SPOUSES TO RAILROAD RETIREMENT 
              ANNUITIES INDEPENDENT OF ACTUAL ENTITLEMENT OF EMPLOYEE.

    (a) In General.--Section 2 of the Railroad Retirement Act of 1974 
(45 U.S.C. 231a) is amended--
            (1) in subsection (c)(4)(i), by striking ``(A) is entitled 
        to an annuity under subsection (a)(1) and (B)''; and
            (2) in subsection (e)(5), by striking ``or divorced wife'' 
        the second place it appears.
    (b) Effective Date.--The amendments made by this section shall take 
effect 1 year after the date of the enactment of this Act.

SEC. 312. EXTENSION OF TIER II RAILROAD RETIREMENT BENEFITS TO 
              SURVIVING FORMER SPOUSES PURSUANT TO DIVORCE AGREEMENTS.

    (a) In General.--Section 5 of the Railroad Retirement Act of 1974 
(45 U.S.C. 231d) is amended by adding at the end the following:
    ``(d) Notwithstanding any other provision of law, the payment of 
any portion of an annuity computed under section 3(b) to a surviving 
former spouse in accordance with a court decree of divorce, annulment, 
or legal separation or the terms of any court-approved property 
settlement incident to any such court decree shall not be terminated 
upon the death of the individual who performed the service with respect 
to which such annuity is so computed unless such termination is 
otherwise required by the terms of such court decree.''
    (b) Effective Date.--The amendment made by this section shall take 
effect 1 year after the date of the enactment of this Act.

   TITLE IV--MODIFICATIONS OF JOINT AND SURVIVOR ANNUITY REQUIREMENTS

SEC. 401. MODIFICATIONS OF JOINT AND SURVIVOR ANNUITY REQUIREMENTS.

    (a) Amendments to ERISA.--
            (1) Amount of annuity.--
                    (A) In general.--Paragraph (1) of section 205(a) of 
                the Employee Retirement Income Security Act of 1974 (29 
                U.S.C. 1055(a)) is amended by inserting ``or, at the 
                election of the participant, shall be provided in the 
                form of a qualified joint and \3/4\ survivor annuity,'' 
                after ``survivor annuity,''.
                    (B) Definition.--Subsection (d) of section 205 of 
                such Act (29 U.S.C. 1055) is amended--
                            (i) by redesignating paragraphs (1) and (2) 
                        as subparagraphs (A) and (B), respectively,
                            (ii) by inserting ``(1)'' after ``(d)'', 
                        and
                            (iii) by adding at the end the following 
                        new paragraph:
    ``(2)(A) For purposes of this section, the term `qualified joint 
and \3/4\ survivor annuity' means an annuity--
            ``(i) for the life of the participant with a survivor 
        annuity for the life of the spouse which is not less than 75 
        percent of the amount of the annuity which is payable during 
        the joint lives of the participant and the spouse, and
            ``(ii) which is the actuarial equivalent of a single 
        annuity for the life of the participant.
    ``(B) For purposes of this Act, a qualified joint and \3/4\ 
survivor annuity shall be treated as a qualified joint and survivor 
annuity.''
            (2) Illustration requirement.--Clause (i) of section 
        205(c)(3)(A) of such Act (29 U.S.C. 1055(c)(3)(A)) is amended 
        to read as follows:
            ``(i) the terms and conditions of each qualified joint and 
        survivor annuity and qualified joint and \3/4\ survivor annuity 
        offered, accompanied by an illustration of the benefits under 
        each such annuity for the particular participant and spouse,''.
    (b) Amendments to Internal Revenue Code.--
            (1) Amount of annuity.--
                    (A) In general.--Clause (i) of section 
                401(a)(11)(A) of the Internal Revenue Code of 1986 
                (relating to requirement of joint and survivor annuity 
                and preretirement survivor annuity) is amended by 
                inserting ``or, at the election of the participant, 
                shall be provided in the form of a qualified joint and 
                \3/4\ survivor annuity,'' after ``survivor annuity,''.
                    (B) Definition.--Section 417 (relating to 
                definitions and special rules for purposes of minimum 
                survivor annuity requirements), as amended by this Act, 
                is amended by adding at the end the following new 
                subsection:
    ``(i) Definition of Qualified Joint and \3/4\ Survivor Annuity.--
            ``(1) In general.--For purposes of this section and section 
        401(a)(11), the term `qualified joint and \3/4\ survivor 
        annuity' means an annuity--
                    ``(A) for the life of the participant with a 
                survivor annuity for the life of the spouse which is 
                not less than 75 percent of the amount of the annuity 
                which is payable during the joint lives of the 
                participant and the spouse, and
                    ``(B) which is the actuarial equivalent of a single 
                annuity for the life of the participant.
            ``(2) Treatment.--For purposes of this title, a qualified 
        joint and 3/4 survivor annuity shall be treated as a qualified 
        joint and survivor annuity.''
            (2) Illustration requirement.--Clause (i) of section 
        417(a)(3)(A) (relating to explanation of joint and survivor 
        annuity) is amended to read as follows:
                            ``(i) the terms and conditions of each 
                        qualified joint and survivor annuity and 
                        qualified joint and \3/4\ survivor annuity 
                        offered, accompanied by an illustration of the 
                        benefits under each such annuity for the 
                        particular participant and spouse,''.
    (c) Effective Dates.--
            (1) In general.--The amendments made by this section shall 
        apply to plan years beginning on or after January 1, 2005.
            (2) Special rule for collectively bargained plans.--In the 
        case of a plan maintained pursuant to 1 or more collective 
        bargaining agreements between employee representatives and 1 or 
        more employers ratified on or before the date of the enactment 
        of this Act, the amendments made by this section shall apply to 
        the first plan year beginning on or after the earlier of--
                    (A) the later of--
                            (i) January 1, 2005, or
                            (ii) the date on which the last of such 
                        collective bargaining agreements terminates 
                        (determined without regard to any extension 
                        thereof after the date of enactment of this 
                        Act), or
                    (B) January 1, 2006.
            (3) Form of accrued benefit not treated as decreased by 
        reason of amendment.--For purposes of sections 204(g) of the 
        Employee Retirement Income Security Act of 1974 (29 U.S.C. 
        1054(g)) and 411(d)(6) of the Internal Revenue Code of 1986, a 
        plan shall not be treated as having decreased the accrued 
        benefit of a participant solely by reason of the adoption of a 
        plan amendment which provides for a qualified joint and \3/4\ 
        survivor annuity.

                        TITLE V--PLAN AMENDMENTS

SEC. 501. PROVISIONS RELATING TO PLAN AMENDMENTS.

    (a) In General.--If this section applies to any plan or contract 
amendment, 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).
    (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 regulation issued under this Act, and
                    (B) on or before the last day of the first plan 
                year beginning on or after January 1, 2005.
        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 ``2007'' for ``2005''.
            (2) Conditions.--This section shall not apply to any 
        amendment unless--
                    (A) during the period--
                            (i) beginning on the date the legislative 
                        or regulatory amendment described in paragraph 
                        (1)(A) takes effect (or in the case of a plan 
                        or contract amendment not required by such 
                        legislative or regulatory amendment, 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>