1.
Short title; table of contents
(a)
This Act may be cited as the
National Employee Savings and Trust
Equity Guarantee Act of 2005
.
(b)
Sec. 1. Short title; table of contents.
TITLE I—Provisions relating to investment of participants'
accounts
Subtitle A—Diversification of pension plan assets
Sec. 101. Defined contribution plans required to provide
employees with freedom to invest their plan assets.
Sec. 102. Notice of freedom to divest employer securities or
real property.
Subtitle B—Information to assist pension plan
participants
Sec. 111. Periodic pension benefit statements.
Sec. 112. Defined contribution plans required to provide
adequate investment education to participants.
Sec. 113. Material information relating to investment in
employer securities.
Sec. 114. Fiduciary rules for plan sponsors designating
independent investment advisers.
Sec. 115. Treatment of qualified retirement planning
services.
Subtitle C—Protection of pension plan participants
Sec. 121. Notice to participants or beneficiaries of blackout
periods.
Sec. 122. Allowance of catchup payments.
TITLE II—Provisions relating to funding, deductions, and the
Pension Benefit Guaranty Corporation
Subtitle A—Replacement of interest rate on 30-Year Treasury
securities
Sec. 201. Replacement of 30-year Treasury rate for purposes of
funding and PBGC premium rates.
Sec. 202. Replacement of 30-year Treasury rate for calculating
lump-sum distributions.
Sec. 203. Section 415
limitation on defined benefit plans.
Subtitle B—Provisions relating to pension plan funding and
deductions
Sec. 211. Deduction limits for plan contributions.
Sec. 212. Benefit limitations for certain financially
distressed plans.
Sec. 213. Updating deduction rules for combination of
plans.
Subtitle C—Provisions relating to the Pension Benefit Guaranty
Corporation
Sec. 221. PBGC premiums for new plans of small
employers.
Sec. 222. Additional PBGC premium for new and small
plans.
Sec. 223. Authorization for PBGC to pay interest on premium
overpayment refunds.
Sec. 224. Substantial owner benefits in terminated
plans.
Sec. 225. Acceleration of computation of benefits attributable
to recoveries of employer liability.
Subtitle D—Studies
Sec. 231. Joint study on revitalizing defined benefit
plans.
Sec. 232. Study on floor-offset ESOPs.
TITLE III—Improvements in portability and distribution
rules
Sec. 301. Clarifications regarding purchase of permissive
service credit.
Sec. 302. Allow rollover of after-tax amounts in annuity
contracts.
Sec. 303. Clarification of minimum distribution
rules.
Sec. 304. Waiver of 10 percent early withdrawal penalty tax on
certain distributions of pension plans for public safety employees.
Sec. 305. Allow rollovers by nonspouse beneficiaries of certain
retirement plan distributions.
Sec. 306. Faster vesting of employer nonelective
contributions.
Sec. 307. Allow direct rollovers from retirement plans to Roth
IRAs.
Sec. 308. Elimination of higher penalty on certain simple plan
distributions.
Sec. 309. Simple plan portability.
Sec. 310. Eligibility for participation in retirement
plans.
Sec. 311. Transfers to the PBGC.
Sec. 312. Missing participants.
TITLE IV—Administrative provisions
Sec. 401. Employee Plans Compliance Resolution
System.
Sec. 402. Extension to all governmental plans of moratorium on
application of certain nondiscrimination rules applicable to State and local
plans.
Sec. 403. Notice and consent period regarding
distributions.
Sec. 404. Reporting simplification.
Sec. 405. Voluntary early retirement incentive and employment
retention plans maintained by local educational agencies and other
entities.
Sec. 406. No reduction in unemployment compensation as a result
of pension rollovers.
Sec. 407. Withholding on distributions from governmental
Section 457 plans.
Sec. 408. Provisions relating to plan amendments.
TITLE V—Provisions relating to spousal pension
protection
Subtitle A—Study of spousal consent for distributions from
defined contribution plans
Sec. 501. Joint study of application of spousal consent rules
to defined contribution plans.
Subtitle B—Division Of pension benefits upon
divorce
Sec. 511. Regulations on time and order of issuance of domestic
relations orders.
Subtitle C—Railroad retirement
Sec. 521. Entitlement of divorced spouses to railroad
retirement annuities independent of actual entitlement of employee.
Sec. 522. Extension of tier II railroad retirement benefits to
surviving former spouses pursuant to divorce agreements.
Subtitle D—Modifications of joint and survivor annuity
requirements
Sec. 531. Requirement for additional survivor annuity
option.
TITLE VI—Tax Court pension and compensation
Sec. 600. Amendment of 1986 Code.
Sec. 601. Annuities for survivors of Tax Court judges who are
assassinated.
Sec. 602. Cost-of-Living adjustments for Tax Court judicial
survivor annuities.
Sec. 603. Life insurance coverage for Tax Court
judges.
Sec. 604. Cost of life insurance coverage for Tax Court judges
age 65 or over.
Sec. 605. Modification of timing of Lump-Sum Payment of judges’
accrued annual leave.
Sec. 606. Participation of Tax Court judges in the Thrift
Savings Plan.
Sec. 607. Exemption of teaching compensation of retired judges
from limitation on outside earned income.
Sec. 608. General provisions relating to Magistrate Judges of
the Tax Court.
Sec. 609. Annuities to surviving spouses and dependent children
of Magistrate Judges of the Tax Court.
Sec. 610. Retirement and annuity Program.
Sec. 611. Incumbent Magistrate Judges of the Tax
Court.
Sec. 612. Provisions for recall.
Sec. 613. Effective date.
TITLE VII—Other provisions
Sec. 701. Transfer of excess pension assets to multiemployer
health plan.
Sec. 702. Transfer of excess funds from black lung disability
trusts to United Mine Workers of America Combined Benefit Fund.
Sec. 703. Treatment of death benefits from corporate-owned life
insurance.
<enum>I</enum>
<header>Provisions relating to investment of participants'
accounts</header>
<subtitle commented="no" id="id36E0CE98234A4EC9A171CF75489AAD8E" style="OLC">
<enum>A</enum>
<header>Diversification of pension plan assets</header>
<section commented="no" display-inline="no-display-inline" id="IDB0795202700A4FC4A30CEAD1DA8599CF" section-type="subsequent-section">
<enum>101.</enum>
<header>Defined contribution plans required to provide employees with
freedom to invest their plan assets</header>
<subsection commented="no" display-inline="no-display-inline" id="ID514B6FAE393143F880558D52695AE19F">
<enum>(a)</enum>
<header>Amendments of Internal Revenue Code</header>
<paragraph commented="no" display-inline="no-display-inline" id="ID959137C4BF634105BB539E95B0B7A212">
<enum>(1)</enum>
<header>Qualification requirement</header>
<text display-inline="yes-display-inline">Section 401(a) of the
Internal Revenue Code of 1986 (relating to qualified pension, profit-sharing,
and stock bonus plans) is amended by inserting after paragraph (34) the
following new paragraph:</text>
<quoted-block display-inline="no-display-inline" id="ID9E7E1DD66C874D9BAD1EC0191096B6D3" style="OLC">
<paragraph commented="no" display-inline="no-display-inline" id="ID1A23A9D9592A404CB3ABFB2410F1F625">
<enum>(35)</enum>
<header>Diversification requirements for certain defined contribution
plans</header>
<subparagraph commented="no" display-inline="no-display-inline" id="ID336A8130A24241F89F6918C5DC808D9F">
<enum>(A)</enum>
<header>In general</header>
<text display-inline="yes-display-inline">A trust which is part of an
applicable defined contribution plan shall not be treated as a qualified trust
unless the plan meets the diversification requirements of subparagraphs (B),
(C), and (D).</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="IDC2B552EDE0E54DF7872F099EA8661ED2">
<enum>(B)</enum>
<header>Employee contributions and elective deferrals invested in
employer securities or real property</header>
<text display-inline="yes-display-inline">In the case of the portion
of an applicable individual’s account attributable to employee contributions
and elective deferrals which is invested in employer securities or employer
real property, a plan meets the requirements of this subparagraph if the
applicable individual may elect to direct the plan to divest any such
securities or real property and to reinvest an equivalent amount in other
investment options meeting the requirements of subparagraph (D).</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID9865D74F92104F138E599FCBB165C41A">
<enum>(C)</enum>
<header>Employer contributions invested in employer securities or
real property</header>
<text display-inline="yes-display-inline">In the case of the portion
of the account attributable to employer contributions other than elective
deferrals which is invested in employer securities or employer real property, a
plan meets the requirements of this subparagraph if each applicable individual
who—</text>
<clause commented="no" display-inline="no-display-inline" id="ID98CDC04FBC604317AEBFAF1E955DD1F5">
<enum>(i)</enum>
<text display-inline="yes-display-inline">is a participant who has
completed at least 3 years of service, or</text>
</clause><clause commented="no" display-inline="no-display-inline" id="ID38757FEF27B1408D9985F7E0B4D1665A">
<enum>(ii)</enum>
<text display-inline="yes-display-inline">is a beneficiary of a
participant described in clause (i) or of a deceased participant,</text>
</clause><continuation-text commented="no" continuation-text-level="subparagraph">may elect to direct the plan to
divest any such securities or real property and to reinvest an equivalent
amount in other investment options meeting the requirements of subparagraph
(D).</continuation-text></subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID8B4E8E56A554427B8E7722998BD33BCD">
<enum>(D)</enum>
<header>Investment options</header>
<clause commented="no" display-inline="no-display-inline" id="ID6734757BA5E5442880EB41C3FFC2982C">
<enum>(i)</enum>
<header>In general</header>
<text display-inline="yes-display-inline">The requirements of this
subparagraph are met if the plan offers not less than 3 investment options,
other than employer securities or employer real property, to which an
applicable individual may direct the proceeds from the divestment of employer
securities or employer real property pursuant to this paragraph, each of which
is diversified and has materially different risk and return
characteristics.</text>
</clause><clause commented="no" display-inline="no-display-inline" id="ID7466ACC22AD944D4B07C8E3F6389FD25">
<enum>(ii)</enum>
<header>Treatment of certain restrictions and conditions</header>
<subclause commented="no" display-inline="no-display-inline" id="ID9CC7720302DF41D9B54A5D02FE3F4DC5">
<enum>(I)</enum>
<header>Time for making investment choices</header>
<text display-inline="yes-display-inline">A plan shall not be treated
as failing to meet the requirements of this subparagraph merely because the
plan limits the time for divestment and reinvestment to periodic, reasonable
opportunities occurring no less frequently than quarterly.</text>
</subclause><subclause commented="no" display-inline="no-display-inline" id="IDCE033F6F92714D23B31405F74D0EC927">
<enum>(II)</enum>
<header>Certain restrictions and conditions not allowed</header>
<text display-inline="yes-display-inline">Except as provided in
regulations, a plan shall not meet the requirements of this subparagraph if the
plan imposes restrictions or conditions with respect to the investment of
employer securities or employer real property which are not imposed on the
investment of other assets of the plan. This subclause shall not apply to any
restrictions or conditions imposed by reason of the application of securities
laws.</text>
</subclause></clause></subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="IDDBC00C5554C84C33AE355ED37140464A">
<enum>(E)</enum>
<header>Applicable defined contribution plan</header>
<text display-inline="yes-display-inline">For purposes of this
paragraph—</text>
<clause commented="no" display-inline="no-display-inline" id="ID67909147CE394CF0BBF8C07355573CBA">
<enum>(i)</enum>
<header>In general</header>
<text display-inline="yes-display-inline">The term <term>applicable
defined contribution plan</term> means any defined contribution plan which
holds any publicly traded employer securities.</text>
</clause><clause commented="no" display-inline="no-display-inline" id="ID5D672D492AD74039B7627E1AB275A49B">
<enum>(ii)</enum>
<header>Exception for certain ESOPs</header>
<text display-inline="yes-display-inline">Such term does not include
an employee stock ownership plan if—</text>
<subclause commented="no" display-inline="no-display-inline" id="ID9A9D72B685C94CBBA56C206A8E26769C">
<enum>(I)</enum>
<text display-inline="yes-display-inline">there are no contributions
to such plan (or earnings thereunder) which are held within such plan and are
subject to subsection (k) or (m), and</text>
</subclause><subclause commented="no" display-inline="no-display-inline" id="IDEA8DF66AF020472D9C788F4AC4FAADB5">
<enum>(II)</enum>
<text display-inline="yes-display-inline">such plan is a separate
plan for purposes of section 414(l) with respect to any other defined benefit
plan or defined contribution plan maintained by the same employer or
employers.</text>
</subclause></clause><clause commented="no" display-inline="no-display-inline" id="ID16EBC31BDF714D48818B572038A39C12">
<enum>(iii)</enum>
<header>Exception for one participant plans</header>
<text display-inline="yes-display-inline">Such term does not include
a one-participant retirement plan.</text>
</clause><clause commented="no" display-inline="no-display-inline" id="ID4A7876049D494A2C92451C1C35095FBB">
<enum>(iv)</enum>
<header>One-participant retirement plan</header>
<text display-inline="yes-display-inline">For purposes of clause
(iii), the term <term>one-participant retirement plan</term> means a retirement
plan that—</text>
<subclause commented="no" display-inline="no-display-inline" id="ID969A80A3D09649408BFB63990D6A5719">
<enum>(I)</enum>
<text display-inline="yes-display-inline">on the first day of the
plan year covered only one individual (or the individual and the individual’s
spouse) and the individual owned 100 percent of the plan sponsor (whether or
not incorporated), or covered only one or more partners (or partners and their
spouses) in the plan sponsor,</text>
</subclause><subclause commented="no" display-inline="no-display-inline" id="IDF7F463C255B84B209CB771BA8CDE2F1D">
<enum>(II)</enum>
<text display-inline="yes-display-inline">meets the minimum coverage
requirements of section 410(b) without being combined with any other plan of
the business that covers the employees of the business,</text>
</subclause><subclause commented="no" display-inline="no-display-inline" id="IDC850FDF1AC2849A1B24A63D5F816AF8F">
<enum>(III)</enum>
<text display-inline="yes-display-inline">does not provide benefits
to anyone except the individual (and the individual’s spouse) or the partners
(and their spouses),</text>
</subclause><subclause commented="no" display-inline="no-display-inline" id="ID72E408A55605419097D2C64ACCF41C8F">
<enum>(IV)</enum>
<text display-inline="yes-display-inline">does not cover a business
that is a member of an affiliated service group, a controlled group of
corporations, or a group of businesses under common control, and</text>
</subclause><subclause commented="no" display-inline="no-display-inline" id="ID297131D1C6E149C98E333F60D8DED544">
<enum>(V)</enum>
<text display-inline="yes-display-inline">does not cover a business
that uses the services of leased employees (within the meaning of section
414(n)).</text>
</subclause><continuation-text commented="no" continuation-text-level="clause">For purposes of this clause, the term
<quote>partner</quote> includes a 2-percent shareholder (as defined in section
1372(b)) of an S corporation.</continuation-text></clause></subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID3A7022229B2645119BF236A4E1FD5730">
<enum>(F)</enum>
<header>Certain plans treated as holding publicly traded employer
securities</header>
<clause commented="no" display-inline="no-display-inline" id="ID57B2B3B717C141F9B0A352F96CFD7945">
<enum>(i)</enum>
<header>In general</header>
<text display-inline="yes-display-inline">Except as provided in
regulations or in clause (ii), a plan holding employer securities which are not
publicly traded employer securities shall be treated as holding publicly traded
employer securities if any employer corporation, or any member of a controlled
group of corporations which includes such employer corporation, has issued a
class of stock which is a publicly traded employer security.</text>
</clause><clause commented="no" display-inline="no-display-inline" id="ID6AB4766031234337A20670868A8E6C66">
<enum>(ii)</enum>
<header>Exception for certain controlled groups with publicly traded
securities</header>
<text display-inline="yes-display-inline">Clause (i) shall not apply
to a plan if—</text>
<subclause commented="no" display-inline="no-display-inline" id="ID28F155740AA842889CD559705655A852">
<enum>(I)</enum>
<text display-inline="yes-display-inline">no employer corporation, or
parent corporation of an employer corporation, has issued any publicly traded
employer security, and</text>
</subclause><subclause commented="no" display-inline="no-display-inline" id="ID0B59654921224B5A8DD93888C933F5B4">
<enum>(II)</enum>
<text display-inline="yes-display-inline">no employer corporation, or
parent corporation of an employer corporation, has issued any special class of
stock which grants particular rights to, or bears particular risks for, the
holder or issuer with respect to any corporation described in clause (i) which
has issued any publicly traded employer security.</text>
</subclause></clause><clause commented="no" display-inline="no-display-inline" id="ID7708ED628BF049C5A74D45667540D7E4">
<enum>(iii)</enum>
<header>Definitions</header>
<text display-inline="yes-display-inline">For purposes of this
subparagraph, the term—</text>
<subclause commented="no" display-inline="no-display-inline" id="IDCC4C2701409C4541BA670F348B0E49DF">
<enum>(I)</enum>
<text display-inline="yes-display-inline">
<quote>controlled group of
corporations</quote> has the meaning given such term by section 1563(a), except
that <quote>50 percent</quote> shall be substituted for <quote>80
percent</quote> each place it appears,</text>
</subclause><subclause commented="no" display-inline="no-display-inline" id="ID699FFC3E170D462FAF7EBA3AFE088923">
<enum>(II)</enum>
<text display-inline="yes-display-inline">
<quote>employer
corporation</quote> means a corporation which is an employer maintaining the
plan, and</text>
</subclause><subclause commented="no" display-inline="no-display-inline" id="ID413F9A7371024088B24E9495FC0F8633">
<enum>(III)</enum>
<text display-inline="yes-display-inline">
<quote>parent
corporation</quote> has the meaning given such term by section 424(e).</text>
</subclause></clause></subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="IDCFF17482AAA3438288245FACADB3B49F">
<enum>(G)</enum>
<header>Other definitions</header>
<text display-inline="yes-display-inline">For purposes of this
paragraph—</text>
<clause commented="no" display-inline="no-display-inline" id="ID537860DE85884810BA0E303B450FC5AB">
<enum>(i)</enum>
<header>Applicable individual</header>
<text display-inline="yes-display-inline">The term <term>applicable
individual</term> means—</text>
<subclause commented="no" display-inline="no-display-inline" id="IDD6137344F3E34FF99A4A1F848E202E58">
<enum>(I)</enum>
<text display-inline="yes-display-inline">any participant in the
plan, and</text>
</subclause><subclause commented="no" display-inline="no-display-inline" id="ID4DBB98BADA894554A71C552A470DDB01">
<enum>(II)</enum>
<text display-inline="yes-display-inline">any beneficiary who has an
account under the plan with respect to which the beneficiary is entitled to
exercise the rights of a participant.</text>
</subclause></clause><clause commented="no" display-inline="no-display-inline" id="ID0B99657C5FF04E79BFF7B2F4EE9D049E">
<enum>(ii)</enum>
<header>Elective deferral</header>
<text display-inline="yes-display-inline">The term <term>elective
deferral</term> means an employer contribution described in section
402(g)(3)(A).</text>
</clause><clause commented="no" display-inline="no-display-inline" id="IDCEEC3FB6602849DE9C5EF3E63EB34488">
<enum>(iii)</enum>
<header>Employer security</header>
<text display-inline="yes-display-inline">The term <term>employer
security</term> has the meaning given such term by section 407(d)(1) of the
<act-name parsable-cite="ERISA">Employee Retirement Income Security Act of
1974</act-name>.</text>
</clause><clause commented="no" display-inline="no-display-inline" id="ID7AA073BB9A1E4160AFE8F31B92C66F37">
<enum>(iv)</enum>
<header>Employer real property</header>
<text display-inline="yes-display-inline">The term <term>employer
real property</term> has the meaning given such term by section 407(d)(2) of
the <act-name parsable-cite="ERISA">Employee Retirement Income Security Act of
1974</act-name>.</text>
</clause><clause commented="no" display-inline="no-display-inline" id="IDBB7546D3848842E28FC52690FE9B7AAD">
<enum>(v)</enum>
<header>Employee stock ownership plan</header>
<text display-inline="yes-display-inline">The term <term>employee
stock ownership plan</term> has the meaning given such term by section
4975(e)(7).</text>
</clause><clause commented="no" display-inline="no-display-inline" id="ID450AB57E85B5448B9FBDBA1ADF706673">
<enum>(vi)</enum>
<header>Publicly traded employer securities</header>
<text display-inline="yes-display-inline">The term <term>publicly
traded employer securities</term> means employer securities which are readily
tradable on an established securities market.</text>
</clause><clause commented="no" display-inline="no-display-inline" id="ID6D4B850E11CB419DB4F767FE185CACB4">
<enum>(vii)</enum>
<header>Year of service</header>
<text display-inline="yes-display-inline">The term <term>year of
service</term> has the meaning given such term by section 411(a)(5).</text>
</clause></subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID87D0FB5FD30D43678486FFBAE268AC4C">
<enum>(H)</enum>
<header>Transition rule for securities or real property attributable
to employer contributions</header>
<clause commented="no" display-inline="no-display-inline" id="ID87DC955E4E67441EB549729CBBF10FF5">
<enum>(i)</enum>
<header>Rules phased in over 3 years</header>
<subclause commented="no" display-inline="no-display-inline" id="ID66C982F1308A43CB81F366F26DFC9C91">
<enum>(I)</enum>
<header>In general</header>
<text display-inline="yes-display-inline">In the case of the portion
of an account to which subparagraph (C) applies and which consists of employer
securities or employer real property acquired in a plan year beginning before
January 1, 2006, subparagraph (C) shall only apply to the applicable percentage
of such securities or real property. This subparagraph shall be applied
separately with respect to each class of securities and employer real
property.</text>
</subclause><subclause commented="no" display-inline="no-display-inline" id="IDC936DA643B044837921A5FA6E472D4A1">
<enum>(II)</enum>
<header>Exception for certain participants aged 55 or over</header>
<text display-inline="yes-display-inline">Subclause (I) shall not
apply to an applicable individual who is a participant who has attained age 55
and completed at least 3 years of service before the first plan year beginning
after December 31, 2005.</text>
</subclause></clause><clause commented="no" display-inline="no-display-inline" id="ID85C50FA291FC468AB339D5832C73A5C7">
<enum>(ii)</enum>
<header>Applicable percentage</header>
<text display-inline="yes-display-inline">For purposes of clause (i),
the applicable percentage shall be determined as follows:</text>
<table blank-lines-after="0" blank-lines-before="1" line-rules="no-gen" table-type="subformat">
<tgroup cols="2">
<thead>
<row>
<entry colname="I49">Plan year to which </entry>
<entry colname="I50">The applicable</entry>
</row>
<row><entry colname="I49">subparagraph (C) applies:</entry><entry colname="I50"> percentage is:</entry>
</row>
</thead>
<tbody>
<row>
<entry colname="I51">1st</entry>
<entry colname="I52">33</entry>
</row>
<row>
<entry colname="I51">2d</entry>
<entry colname="I52">66 </entry>
</row>
<row>
<entry colname="I51">3d and following</entry>
<entry colname="I52">100.</entry>
</row>
</tbody>
</tgroup>
</table>
</clause></subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDC89C8F639BB847A48B7AF7B7682C0E38">
<enum>(2)</enum>
<header>Conforming amendments</header>
<subparagraph commented="no" display-inline="no-display-inline" id="ID051A73F085DB4ED4B0545019431E287F">
<enum>(A)</enum>
<text display-inline="yes-display-inline">Section 401(a)(28)(B) of such
Code (relating to additional requirements relating to employee stock ownership
plans) is amended by adding at the end the following new clause:</text>
<quoted-block display-inline="no-display-inline" id="IDB2052295CAE643F1A99B3147025B6953" style="OLC">
<clause commented="no" display-inline="no-display-inline" id="IDFB2487041C65464987ED95AAAEBA2935">
<enum>(v)</enum>
<header>Exception</header>
<text display-inline="yes-display-inline">This subparagraph shall not
apply to an applicable defined contribution plan (as defined in paragraph
(35)(E)).</text>
</clause><after-quoted-block></after-quoted-block></quoted-block>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID47EEED278A624D2AB95EA8B82D9F489D">
<enum>(B)</enum>
<text display-inline="yes-display-inline">Section 409(h)(7) of such
Code is amended by inserting <quote>or subparagraph (B) or (C) of section
401(a)(35)</quote> before the period at the end.</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="IDA4E493F12E1649378FF85167FA2B12D7">
<enum>(C)</enum>
<text display-inline="yes-display-inline">Section 4980(c)(3)(A) of such
Code is amended by striking <quote>if—</quote> and all that follows and
inserting <quote>if the requirements of subparagraphs (B), (C), and (D) are
met.</quote></text>
</subparagraph></paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="ID1F378D261C3C4CBE92CFF4FFF90CAAE0">
<enum>(b)</enum>
<header>Amendments of ERISA</header>
<text display-inline="yes-display-inline">
<external-xref legal-doc="act" parsable-cite="ERISA/204">Section
204</external-xref> of the <act-name parsable-cite="ERISA">Employee Retirement
Income Security Act of 1974</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/29/1054">29 U.S.C. 1054</external-xref>) is amended by
redesignating subsection (j) as subsection (k) and by inserting after
subsection (i) the following new subsection:</text>
<quoted-block act-name="Employee Retirement Income Security Act of 1974" display-inline="no-display-inline" id="ID8480934306D64E06B1EEDDFC0EDBC891" style="OLC">
<subsection commented="no" display-inline="no-display-inline" id="ID795C89E80E6749F29B64A416AAA981C4">
<enum>(j)</enum>
<header>Diversification requirements for certain individual account
plans</header>
<paragraph commented="no" display-inline="no-display-inline" id="IDC675F2ED175347849FE75DF388A9704A">
<enum>(1)</enum>
<header>In general</header>
<text display-inline="yes-display-inline">An applicable individual
account plan shall meet the diversification requirements of paragraphs (2),
(3), and (4).</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDBD856298238D4B92A9DE934AE9C943E0">
<enum>(2)</enum>
<header>Employee contributions and elective deferrals invested in
employer securities or real property</header>
<text display-inline="yes-display-inline">In the case of the portion
of an applicable individual’s account attributable to employee contributions
and elective deferrals which is invested in employer securities or employer
real property, a plan meets the requirements of this paragraph if the
applicable individual may elect to direct the plan to divest any such
securities or real property and to reinvest an equivalent amount in other
investment options meeting the requirements of paragraph (4).</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID75EAF6A073D54B6A94FF90BC4FF3D685">
<enum>(3)</enum>
<header>Employer contributions invested in employer securities or
real property</header>
<text display-inline="yes-display-inline">In the case of the portion
of the account attributable to employer contributions other than elective
deferrals which is invested in employer securities or employer real property, a
plan meets the requirements of this paragraph if each applicable individual
who—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="IDDA53921A76D140868B4741B27555A52A">
<enum>(A)</enum>
<text display-inline="yes-display-inline">is a participant who has
completed at least 3 years of service, or</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="IDD3D774D0ECE945FA9B528E0311028F09">
<enum>(B)</enum>
<text display-inline="yes-display-inline">is a beneficiary of a
participant described in subparagraph (A) or of a deceased participant,</text>
</subparagraph><continuation-text commented="no" continuation-text-level="paragraph">may elect to direct the plan to
divest any such securities or real property and to reinvest an equivalent
amount in other investment options meeting the requirements of paragraph
(4).</continuation-text></paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID6305857386F348C1840719C3A85628F2">
<enum>(4)</enum>
<header>Investment options</header>
<subparagraph commented="no" display-inline="no-display-inline" id="ID00B38B41BD5743BF891BF9BDFA8CA7F6">
<enum>(A)</enum>
<header>In general</header>
<text display-inline="yes-display-inline">The requirements of this
paragraph are met if the plan offers not less than 3 investment options, other
than employer securities or employer real property, to which an applicable
individual may direct the proceeds from the divestment of employer securities
or employer real property pursuant to this subsection, each of which is
diversified and has materially different risk and return
characteristics.</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID2B32D297C3AE4FD888801F8383619CF0">
<enum>(B)</enum>
<header>Treatment of certain restrictions and conditions</header>
<clause commented="no" display-inline="no-display-inline" id="ID2D3E77D8CA3941AEABE68086F028E1E6">
<enum>(i)</enum>
<header>Time for making investment choices</header>
<text display-inline="yes-display-inline">A plan shall not be treated
as failing to meet the requirements of this paragraph merely because the plan
limits the time for divestment and reinvestment to periodic, reasonable
opportunities occurring no less frequently than quarterly.</text>
</clause><clause commented="no" display-inline="no-display-inline" id="ID4ABD0EFEDE84454490575CD40FF8A1E6">
<enum>(ii)</enum>
<header>Certain restrictions and conditions not allowed</header>
<text display-inline="yes-display-inline">Except as provided in
regulations, a plan shall not meet the requirements of this paragraph if the
plan imposes restrictions or conditions with respect to the investment of
employer securities or employer real property which are not imposed on the
investment of other assets of the plan. This subparagraph shall not apply to
any restrictions or conditions imposed by reason of the application of
securities laws.</text>
</clause></subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID9E86BA9B4BE54C29B51A1B23CACE68E4">
<enum>(5)</enum>
<header>Applicable individual account plan</header>
<text display-inline="yes-display-inline">For purposes of this
subsection—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="IDE506EBA26F604239808525B904581BF5">
<enum>(A)</enum>
<header>In general</header>
<text display-inline="yes-display-inline">The term <term>applicable
individual account plan</term> means any individual account plan (as defined in
section 3(34)) which holds any publicly traded employer securities.</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID0732BC3031694F9B89380D6B644B8686">
<enum>(B)</enum>
<header>Exception for certain ESOPs</header>
<text display-inline="yes-display-inline">Such term does not include
an employee stock ownership plan if—</text>
<clause commented="no" display-inline="no-display-inline" id="IDB332F42269134724AE12A3094E325924">
<enum>(i)</enum>
<text display-inline="yes-display-inline">there are no contributions
to such plan (or earnings thereunder) which are held within such plan and are
subject to subsection (k) or (m) of section 401 of the Internal Revenue Code of
1986, and</text>
</clause><clause commented="no" display-inline="no-display-inline" id="ID7E0738DF889B4860A39A8CDDA547FB10">
<enum>(ii)</enum>
<text display-inline="yes-display-inline">such plan is a separate
plan (for purposes of section 414(l) of such Code) with respect to any other
defined benefit plan or individual account plan maintained by the same employer
or employers.</text>
</clause></subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID6BB492B9E65C4AACB877A783F6E7637E">
<enum>(C)</enum>
<header>Exception for one participant plans</header>
<text display-inline="yes-display-inline">Such term shall not include
a one-participant retirement plan (as defined in section 101(i)(8)(B)).</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID036ECF3982BE444D935179E2CE0ABFDE">
<enum>(D)</enum>
<header>Certain plans treated as holding publicly traded employer
securities</header>
<clause commented="no" display-inline="no-display-inline" id="IDAF128FFAB6BC4BDEABBDA88B58CCC37F">
<enum>(i)</enum>
<header>In general</header>
<text display-inline="yes-display-inline">Except as provided in
regulations or in clause (ii), a plan holding employer securities which are not
publicly traded employer securities shall be treated as holding publicly traded
employer securities if any employer corporation, or any member of a controlled
group of corporations which includes such employer corporation, has issued a
class of stock which is a publicly traded employer security.</text>
</clause><clause commented="no" display-inline="no-display-inline" id="IDAACA205FA54A4EC884C9B695B62083E4">
<enum>(ii)</enum>
<header>Exception for certain controlled groups with publicly traded
securities</header>
<text display-inline="yes-display-inline">Clause (i) shall not apply
to a plan if—</text>
<subclause commented="no" display-inline="no-display-inline" id="IDB838850175D343C7811C2B1082E2E09A">
<enum>(I)</enum>
<text display-inline="yes-display-inline">no employer corporation, or
parent corporation of an employer corporation, has issued any publicly traded
employer security, and</text>
</subclause><subclause commented="no" display-inline="no-display-inline" id="IDD0AC09A8F0954889B98C74AC0BA3CD48">
<enum>(II)</enum>
<text display-inline="yes-display-inline">no employer corporation, or
parent corporation of an employer corporation, has issued any special class of
stock which grants particular rights to, or bears particular risks for, the
holder or issuer with respect to any corporation described in clause (i) which
has issued any publicly traded employer security.</text>
</subclause></clause><clause commented="no" display-inline="no-display-inline" id="IDA4C278A6CEBC4B8B9DE46BACCEC5A05C">
<enum>(iii)</enum>
<header>Definitions</header>
<text display-inline="yes-display-inline">For purposes of this
subparagraph, the term—</text>
<subclause commented="no" display-inline="no-display-inline" id="ID7264CCC7665848C89409CD3DF6D534BE">
<enum>(I)</enum>
<text display-inline="yes-display-inline">
<quote>controlled group of
corporations</quote> has the meaning given such term by section 1563(a) of the
Internal Revenue Code of 1986, except that <quote>50 percent</quote> shall be
substituted for <quote>80 percent</quote> each place it appears,</text>
</subclause><subclause commented="no" display-inline="no-display-inline" id="IDD4909E57FBE848D299C950CF95AD0C08">
<enum>(II)</enum>
<text display-inline="yes-display-inline">
<quote>employer
corporation</quote> means a corporation which is an employer maintaining the
plan, and</text>
</subclause><subclause commented="no" display-inline="no-display-inline" id="ID838BAF791C674A0B94B10F34420BD71E">
<enum>(III)</enum>
<text display-inline="yes-display-inline">
<quote>parent
corporation</quote> has the meaning given such term by section 424(e) of such
Code.</text>
</subclause></clause></subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDCB3EBF3215C74D6DB803F4B466805AEE">
<enum>(6)</enum>
<header>Other definitions</header>
<text display-inline="yes-display-inline">For purposes of this
paragraph—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="IDF4481E5853C04C389DB40A9D8BD56EE3">
<enum>(A)</enum>
<header>Applicable individual</header>
<text display-inline="yes-display-inline">The term <term>applicable
individual</term> means—</text>
<clause commented="no" display-inline="no-display-inline" id="IDAAF99C48687B4975BADA20235EB63C74">
<enum>(i)</enum>
<text display-inline="yes-display-inline">any participant in the
plan, and</text>
</clause><clause commented="no" display-inline="no-display-inline" id="ID7346261DC2FB4E09B75BA3538DADEE94">
<enum>(ii)</enum>
<text display-inline="yes-display-inline">any beneficiary who has an
account under the plan with respect to which the beneficiary is entitled to
exercise the rights of a participant.</text>
</clause></subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID52122FDBF6E6472AA96D25D118523A6A">
<enum>(B)</enum>
<header>Elective deferral</header>
<text display-inline="yes-display-inline">The term <term>elective
deferral</term> means an employer contribution described in section
402(g)(3)(A) of the Internal Revenue Code of 1986.</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="IDC90860C37C3643AD9764C0CCD392B7CE">
<enum>(C)</enum>
<header>Employer security</header>
<text display-inline="yes-display-inline">The term <term>employer
security</term> has the meaning given such term by section 407(d)(1).</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="IDA99F63F9F45D4DE3BE73A35C8E99CFA3">
<enum>(D)</enum>
<header>Employer real property</header>
<text display-inline="yes-display-inline">The term <term>employer
real property</term> has the meaning given such term by section
407(d)(2).</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID797AE3326AFB4E6FAE9DF5AC3AF22989">
<enum>(E)</enum>
<header>Employee stock ownership plan</header>
<text display-inline="yes-display-inline">The term <term>employee
stock ownership plan</term> has the meaning given such term by section
4975(e)(7) of such Code.</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID7D481285562E421CB151AADFF9B42A9E">
<enum>(F)</enum>
<header>Publicly traded employer securities</header>
<text display-inline="yes-display-inline">The term <term>publicly
traded employer securities</term> means employer securities which are readily
tradable on an established securities market.</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID84499799B48747CEB2E0F701C5DD8E9F">
<enum>(G)</enum>
<header>Year of service</header>
<text display-inline="yes-display-inline">The term <term>year of
service</term> has the meaning given such term by section 203(b)(2).</text>
</subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDADDE1EBCA7FB4130AE35038E7381CAA2">
<enum>(7)</enum>
<header>Transition rule for securities or real property attributable
to employer contributions</header>
<subparagraph commented="no" display-inline="no-display-inline" id="ID818914CABF10439BBFDC9EAA795BDE68">
<enum>(A)</enum>
<header>Rules phased in over 3 years</header>
<clause commented="no" display-inline="no-display-inline" id="ID7FC0B59A2130461592B9B594215D787F">
<enum>(i)</enum>
<header>In general</header>
<text display-inline="yes-display-inline">In the case of the portion
of an account to which paragraph (3) applies and which consists of employer
securities or employer real property acquired in a plan year beginning before
January 1, 2006, paragraph (3) shall only apply to the applicable percentage of
such securities or real property. This subparagraph shall be applied separately
with respect to each class of securities and employer real property.</text>
</clause><clause commented="no" display-inline="no-display-inline" id="ID89F709218544478B9D2B2BF0987FBC13">
<enum>(ii)</enum>
<header>Exception for certain participants aged 55 or over</header>
<text display-inline="yes-display-inline">Clause (i) shall not apply
to an applicable individual who is a participant who has attained age 55 and
completed at least 3 years of service before the first plan year beginning
after December 31, 2005.</text>
</clause></subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="IDC9F285BCCFB4422BAF0583226FB43DB5">
<enum>(B)</enum>
<header>Applicable percentage</header>
<text display-inline="yes-display-inline">For purposes of
subparagraph (A), the applicable percentage shall be determined as
follows:</text>
<table blank-lines-after="0" blank-lines-before="1" line-rules="no-gen" table-type="subformat">
<tgroup cols="2">
<thead>
<row>
<entry colname="I49">Plan year to which </entry>
<entry colname="I50">The applicable</entry>
</row>
<row><entry colname="I49">paragraph (3) applies:</entry><entry colname="I50"> percentage is:</entry>
</row>
</thead>
<tbody>
<row>
<entry colname="I51">1st</entry>
<entry colname="I52">33</entry>
</row>
<row>
<entry colname="I51">2d</entry>
<entry colname="I52">66</entry>
</row>
<row>
<entry colname="I51">3d and following</entry>
<entry colname="I52">100.</entry>
</row>
</tbody>
</tgroup>
</table>
</subparagraph></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection commented="no" display-inline="no-display-inline" id="IDB3CAD77A6F994EE48BFB6533190B8FFE">
<enum>(c)</enum>
<header>Effective dates</header>
<paragraph commented="no" display-inline="no-display-inline" id="ID78DF5DE093B144DBA751B34EEAF44A96">
<enum>(1)</enum>
<header>In general</header>
<text display-inline="yes-display-inline">Except as provided in
paragraphs (2) and (3), the amendments made by this section shall apply to plan
years beginning after December 31, 2005.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID2398E7DE53624D82BFA139E7B55C767A">
<enum>(2)</enum>
<header>Special rule for collectively bargained agreements</header>
<text display-inline="yes-display-inline">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, paragraph (1) shall be applied to benefits
pursuant to, and individuals covered by, any such agreement by substituting for
<quote>December 31, 2005</quote> the earlier of—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="ID7611D0928C2B41FE9CA2F0ADF9852B21">
<enum>(A)</enum>
<text display-inline="yes-display-inline">the later of—</text>
<clause commented="no" display-inline="no-display-inline" id="ID08EA4D9AD606402DA9E831A669149408">
<enum>(i)</enum>
<text display-inline="yes-display-inline">December 31, 2006, or</text>
</clause><clause commented="no" display-inline="no-display-inline" id="ID3BB9B8A9DD1E4DDE9FE8964A0878642D">
<enum>(ii)</enum>
<text display-inline="yes-display-inline">the date on which the last of
such collective bargaining agreements terminates (determined without regard to
any extension thereof after such date of enactment), or</text>
</clause></subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID0CCFD7953374462598378E3A267AAB78">
<enum>(B)</enum>
<text display-inline="yes-display-inline">December 31, 2007.</text>
</subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDE7579E01C2BD4979BF14D23655A2C650">
<enum>(3)</enum>
<header>Special rule for certain employer securities held in an
esop</header>
<subparagraph commented="no" display-inline="no-display-inline" id="ID760E9756C2B6444B8ADB8D171EF109FA">
<enum>(A)</enum>
<header>In general</header>
<text display-inline="yes-display-inline">In the case of employer
securities to which this paragraph applies, the amendments made by this section
shall apply to plan years beginning after the earlier of—</text>
<clause commented="no" display-inline="no-display-inline" id="ID385CC9B86D6D41638527183332F9E2AB">
<enum>(i)</enum>
<text display-inline="yes-display-inline">December 31, 2006, or</text>
</clause><clause commented="no" display-inline="no-display-inline" id="IDE097ACB663094407A2B8D037769434D0">
<enum>(ii)</enum>
<text display-inline="yes-display-inline">the first date on which the
fair market value of such securities exceeds the guaranteed minimum value
described in subparagraph (B)(ii).</text>
</clause></subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID7C2CB253B5AF4F26BA5A31A035161F35">
<enum>(B)</enum>
<header>Applicable securities</header>
<text display-inline="yes-display-inline">This paragraph shall apply to
employer securities which are attributable to employer contributions other than
elective deferrals, and which, on September 17, 2003—</text>
<clause commented="no" display-inline="no-display-inline" id="ID8290B0CFE6954241A285A5BBA4BC68D3">
<enum>(i)</enum>
<text display-inline="yes-display-inline">consist of preferred stock,
and</text>
</clause><clause commented="no" display-inline="no-display-inline" id="ID6693BF2C55304EAE9A748A8B62D3A158">
<enum>(ii)</enum>
<text display-inline="yes-display-inline">are within an employee stock
ownership plan (as defined in section 4975(e)(7) of the Internal Revenue Code
of 1986), the terms of which provide that the value of the securities cannot be
less than the guaranteed minimum value specified by the plan on such
date.</text>
</clause></subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID13CB1CF0D93645B88EEDBE32D91698C6">
<enum>(C)</enum>
<header>Coordination with transition rule</header>
<text display-inline="yes-display-inline">In applying section
401(a)(35)(H) of the Internal Revenue Code of 1986 and
<external-xref legal-doc="act" parsable-cite="ERISA/204(j)(7)">section
204(j)(7)</external-xref> of the <act-name parsable-cite="ERISA">Employee
Retirement Income Security Act of 1974</act-name> (as added by this section) to
employer securities to which this paragraph applies, the applicable percentage
shall be determined without regard to this paragraph.</text>
</subparagraph></paragraph></subsection></section><section commented="no" display-inline="no-display-inline" id="ID019EDA6C316F4F9FAA35AC0C3C880913" section-type="subsequent-section">
<enum>102.</enum>
<header>Notice of freedom to divest employer securities or real
property</header>
<subsection commented="no" display-inline="no-display-inline" id="ID68D7A28F5FED4C5F99C2F1195580C84F">
<enum>(a)</enum>
<header>Amendments of Internal Revenue Code</header>
<paragraph commented="no" display-inline="no-display-inline" id="ID314E5E3927A34FE191D2D9ED5989DB14">
<enum>(1)</enum>
<header>Excise tax</header>
<text display-inline="yes-display-inline">Chapter 43 of the Internal
Revenue Code of 1986 (relating to qualified pension, etc., plans) is amended by
adding at the end the following new section:</text>
<quoted-block display-inline="no-display-inline" id="IDBB4A52A4EB9645629F6EB0887F4E9047" style="OLC">
<section commented="no" display-inline="no-display-inline" id="IDB8CE58A119BC41399EB261FDF0CF2BF6" section-type="subsequent-section">
<enum>4980H.</enum>
<header>Failure of certain defined contribution plans to provide
notice of freedom to divest employer securities</header>
<subsection commented="no" display-inline="no-display-inline" id="ID29B8AB268F474E41A4FE922857F08ED9">
<enum>(a)</enum>
<header>Imposition of tax</header>
<text display-inline="yes-display-inline">There is hereby imposed a
tax on the failure of a defined contribution plan to meet the requirements of
subsection (e) with respect to any participant or beneficiary.</text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="ID143A9A5772114F09AE6CFD6539294D7A">
<enum>(b)</enum>
<header>Amount of tax</header>
<paragraph commented="no" display-inline="no-display-inline" id="ID15026E21EE2C4AB495589D662FE9D31E">
<enum>(1)</enum>
<header>In general</header>
<text display-inline="yes-display-inline">The amount of the tax
imposed by subsection (a) on any failure with respect to any participant or
beneficiary shall be $100 for each day in the noncompliance period with respect
to the failure.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDC0D09ADA02F340C89AE6833A0D2B7771">
<enum>(2)</enum>
<header>Noncompliance period</header>
<text display-inline="yes-display-inline">For purposes of this
section, the term <term>noncompliance period</term> means, with respect to any
failure, the period beginning on the date the failure first occurs and ending
on the date the notice to which the failure relates is provided or the failure
is otherwise corrected.</text>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="IDE9E254453DC94D46AE93F792F6FC1C83">
<enum>(c)</enum>
<header>Limitations on amount of tax</header>
<paragraph commented="no" display-inline="no-display-inline" id="ID2CD861FE8B1B4B8F9CFA2317BE4C2848">
<enum>(1)</enum>
<header>Tax not to apply where failure not discovered and reasonable
diligence exercised</header>
<text display-inline="yes-display-inline">No tax shall be imposed by
subsection (a) on any failure during any period for which it is established to
the satisfaction of the Secretary that any person subject to liability for tax
under subsection (d) did not know that the failure existed and exercised
reasonable diligence to meet the requirements of subsection (e).</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID2344EA8F9E79464A882C3939CE8AA2EE">
<enum>(2)</enum>
<header>Tax not to apply to failures corrected within 30
days</header>
<text display-inline="yes-display-inline">No tax shall be imposed by
subsection (a) on any failure if—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="IDC0598A7B65AD433EAC04FEBD9FE3F8D7">
<enum>(A)</enum>
<text display-inline="yes-display-inline">any person subject to
liability for the tax under subsection (d) exercised reasonable diligence to
meet the requirements of subsection (e), and</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="IDD31BE0767E4C457A9C666F98BDF0FEF6">
<enum>(B)</enum>
<text display-inline="yes-display-inline">such person provides the
notice described in subsection (e) during the 30-day period beginning on the
first date such person knew, or exercising reasonable diligence should have
known, that such failure existed.</text>
</subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID77E2340FE14949E59041E3FEC5F509F8">
<enum>(3)</enum>
<header>Overall limitation for unintentional failures</header>
<subparagraph commented="no" display-inline="no-display-inline" id="IDF319144454064653992C8973640A9E6D">
<enum>(A)</enum>
<header>In general</header>
<text display-inline="yes-display-inline">If the person subject to
liability for tax under subsection (d) exercised reasonable diligence to meet
the requirements of subsection (e), the tax imposed by subsection (a) for
failures during the taxable year of the employer (or, in the case of a
multiemployer plan, the taxable year of the trust forming part of the plan)
shall not exceed $500,000. For purposes of the preceding sentence, all
multiemployer plans of which the same trust forms a part shall be treated as 1
plan.</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID98F4CA8FCF8A487380A1EE74C14CC9DD">
<enum>(B)</enum>
<header>Taxable years in the case of certain controlled
groups</header>
<text display-inline="yes-display-inline">For purposes of this
paragraph, if all persons who are treated as a single employer for purposes of
this section do not have the same taxable year, the taxable years taken into
account shall be determined under principles similar to the principles of
section 1561.</text>
</subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID13B14F24C65145F39C7C0C0CAE52BA5B">
<enum>(4)</enum>
<header>Waiver by Secretary</header>
<text display-inline="yes-display-inline">In the case of a failure
which is due to reasonable cause and not to willful neglect, the Secretary may
waive part or all of the tax imposed by subsection (a) to the extent that the
payment of such tax would be excessive or otherwise inequitable relative to the
failure involved.</text>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="ID9F8F1EB82EB04B5FB669CFC6900DD80C">
<enum>(d)</enum>
<header>Liability for tax</header>
<text display-inline="yes-display-inline">The following shall be
liable for the tax imposed by subsection (a):</text>
<paragraph commented="no" display-inline="no-display-inline" id="IDE1A56A7FBA6B415386DA3C2ED470842B">
<enum>(1)</enum>
<text display-inline="yes-display-inline">In the case of a plan not
described in paragraph (2), the employer.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID22205B9173DC4064B58DE3B4F5E5CA54">
<enum>(2)</enum>
<text display-inline="yes-display-inline">In the case of a
multiemployer plan, the plan.</text>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="ID5C7B47E8D37B4235A117B628D3467A18">
<enum>(e)</enum>
<header>Notice of right to divest</header>
<text display-inline="yes-display-inline">Not later than 30 days
before the first date on which an applicable individual of an applicable
defined contribution plan is eligible to exercise the right under section
401(a)(35) to direct the proceeds from the divestment of employer securities or
employer real property with respect to any type of contribution, the plan
administrator shall provide to such individual a notice—</text>
<paragraph commented="no" display-inline="no-display-inline" id="ID375C157B77504C9A989B7F939032F01F">
<enum>(1)</enum>
<text display-inline="yes-display-inline">setting forth such right
under such section, and</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID7E7302E34D6C4AFCB52315B637C9697E">
<enum>(2)</enum>
<text display-inline="yes-display-inline">describing the importance
of diversifying the investment of retirement account assets.</text>
</paragraph><continuation-text commented="no" continuation-text-level="subsection">The notice required by this
subsection shall be written in a manner calculated to be understood by the
average plan participant and may be delivered in written, electronic, or other
appropriate form to the extent that such form is reasonably accessible to the
applicable individual.</continuation-text></subsection><subsection commented="no" display-inline="no-display-inline" id="ID58976B662329436CA7D7726EB4D968EF">
<enum>(f)</enum>
<header>Definitions</header>
<text display-inline="yes-display-inline">Any term used in this
section which is also used in section 401(a)(35) shall have the meaning given
such term by section 401(a)(35).</text>
</subsection></section><after-quoted-block></after-quoted-block></quoted-block>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID75F19AFCE8E2480595C1D8C7A786F872">
<enum>(2)</enum>
<header>Aggregation</header>
<text display-inline="yes-display-inline">Section 414(t) of such Code
is amended by striking <quote>or 4980B</quote> and inserting <quote>4980B, or
4980H</quote>.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDE013398DCF254180BE467E32FEC8D845">
<enum>(3)</enum>
<header>Clerical amendment</header>
<text display-inline="yes-display-inline">The table of sections for
chapter 43 of such Code is amended by adding at the end the following new
item:</text>
<quoted-block display-inline="no-display-inline" id="IDE4D84BFF78BE4B03B9D4E5015ED5D668" style="USC">
<toc regeneration="no-regeneration">
<toc-entry bold="off" level="section">Sec. 4980H. Failure of certain
defined contribution plans to provide notice of freedom to divest employer
securities.</toc-entry>
</toc>
<after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="ID0E7CC2B18ACD4EA7B409EFA7EFBF6081">
<enum>(b)</enum>
<header>Amendments of ERISA</header>
<paragraph commented="no" display-inline="no-display-inline" id="IDA7A834A6EDC24099A3711E094CA6526B">
<enum>(1)</enum>
<header>In general</header>
<text display-inline="yes-display-inline">
<external-xref legal-doc="act" parsable-cite="ERISA/104">Section
104</external-xref> of the <act-name parsable-cite="ERISA">Employee Retirement
Income Security Act of 1974</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/29/1024">29 U.S.C. 1024</external-xref>) is amended by
redesignating subsection (d) as subsection (e) and by inserting after
subsection (c) the following new subsection:</text>
<quoted-block act-name="Employee Retirement Income Security Act of 1974" display-inline="no-display-inline" id="ID6E51652F3D78481280FDD0E873F02876" style="OLC">
<subsection commented="no" display-inline="no-display-inline" id="ID06C9A8B59DCF4C258350030966C1E8CA">
<enum>(d)</enum>
<header>Notice of right to divest</header>
<text display-inline="yes-display-inline">Not later than 30 days
before the first date on which an applicable individual of an applicable
individual account plan is eligible to exercise the right under section 204(j)
to direct the proceeds from the divestment of employer securities or employer
real property with respect to any type of contribution, the administrator shall
provide to such individual a notice—</text>
<paragraph commented="no" display-inline="no-display-inline" id="IDA37FAE0EA9A044E08392B4A7BFECAA4A">
<enum>(1)</enum>
<text display-inline="yes-display-inline">setting forth such right
under such section, and</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID0A24CE30DEF142A09E5C6BBAC9561B8F">
<enum>(2)</enum>
<text display-inline="yes-display-inline">describing the importance
of diversifying the investment of retirement account assets.</text>
</paragraph><continuation-text commented="no" continuation-text-level="subsection">The notice required by this
subsection shall be written in a manner calculated to be understood by the
average plan participant and may be delivered in written, electronic, or other
appropriate form to the extent that such form is reasonably accessible to the
applicable individual.</continuation-text></subsection><after-quoted-block></after-quoted-block></quoted-block>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDAF0F1994980640C29CDCAB50107816D9">
<enum>(2)</enum>
<header>Penalties</header>
<text display-inline="yes-display-inline">
<external-xref legal-doc="act" parsable-cite="ERISA/502(c)(7)">Section
502(c)(7)</external-xref> of the <act-name parsable-cite="ERISA">Employee
Retirement Income Security Act of 1974</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/29/1132(c)(7)">29 U.S.C.
1132(c)(7)</external-xref>) is amended by inserting <quote>or section
104(d)</quote> after <quote>section 101(i)</quote>.</text>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="ID84E50CD0FC1949D3B3BF7FE726BE5371">
<enum>(c)</enum>
<header>Model notice</header>
<text display-inline="yes-display-inline">The Secretary of Labor shall,
within 180 days after the date of the enactment of this subsection, prescribe a
model notice for purposes of satisfying the requirements of the amendments made
by this section.</text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="ID88837B6B12134FF287ACD2B794E71771">
<enum>(d)</enum>
<header>Effective dates</header>
<paragraph commented="no" display-inline="no-display-inline" id="ID9D6EC88D46F94288818F3EDB850E0E79">
<enum>(1)</enum>
<header>In general</header>
<text display-inline="yes-display-inline">The amendments made by this
section shall apply to plan years beginning after December 31, 2005.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID631B7310BDE24769BC837BA18DECB1B8">
<enum>(2)</enum>
<header>Transition rule</header>
<text display-inline="yes-display-inline">If notice under section
4980H(e) of the Internal Revenue Code of 1986 or
<external-xref legal-doc="act" parsable-cite="ERISA/104(d)">section
104(d)</external-xref> of the <act-name parsable-cite="ERISA">Employee
Retirement Income Security Act of 1974</act-name> (as added by this section)
would otherwise be required to be provided before the 90th day after the date
of the enactment of this Act, such notice shall not be required to be provided
until such 90th day.</text>
</paragraph></subsection></section></subtitle><subtitle commented="no" id="id5E9133B1B9AF4FCFB9D8A8BDF37EDBFC" style="OLC">
<enum>B</enum>
<header>Information to assist pension plan participants</header>
<section commented="no" display-inline="no-display-inline" id="ID3C7A9BC1F52448ACBDDBE8773812D921" section-type="subsequent-section">
<enum>111.</enum>
<header>Periodic pension benefit statements</header>
<subsection commented="no" display-inline="no-display-inline" id="ID7A70E26EF854439A8D7D525B5817CE6E">
<enum>(a)</enum>
<header>Amendments of Internal Revenue Code</header>
<paragraph commented="no" display-inline="no-display-inline" id="IDCFE1B59952C74FD9A1CD69CDAA9902BE">
<enum>(1)</enum>
<header>Excise tax</header>
<text display-inline="yes-display-inline">Chapter 43 of the Internal
Revenue Code of 1986 (relating to qualified pension, etc., plans), as amended
by this Act, is amended by adding at the end the following new section:</text>
<quoted-block display-inline="no-display-inline" id="ID7ECE7977D67D4C0191B8085ADA971E36" style="OLC">
<section commented="no" display-inline="no-display-inline" id="IDFB7D4CE876F84F6AABFA217036F06BF9" section-type="subsequent-section">
<enum>4980I.</enum>
<header>Failure of certain pension plans to provide required
information</header>
<subsection commented="no" display-inline="no-display-inline" id="ID150C027E9C6542A085D12370FCD44A6C">
<enum>(a)</enum>
<header>Imposition of tax</header>
<text display-inline="yes-display-inline">There is hereby imposed a
tax on the failure of an applicable pension plan to meet the requirements of
subsection (e) with respect to any participant or beneficiary.</text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="ID93748DCEF77A438D8D78CDEC047BDFD2">
<enum>(b)</enum>
<header>Amount of tax</header>
<paragraph commented="no" display-inline="no-display-inline" id="ID1606A2CFC0C54A92907257EC38F46C45">
<enum>(1)</enum>
<header>In general</header>
<text display-inline="yes-display-inline">The amount of the tax
imposed by subsection (a) on any failure with respect to any participant or
beneficiary shall be $100 for each day in the noncompliance period with respect
to the failure.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID36A67CD8998B4CEC9C12BB238DAD1069">
<enum>(2)</enum>
<header>Noncompliance period</header>
<text display-inline="yes-display-inline">For purposes of this
section, the term <term>noncompliance period</term> means, with respect to any
failure, the period beginning on the date the failure first occurs and ending
on the date the statement to which the failure relates is provided or the
failure is otherwise corrected.</text>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="ID662BA5CF071246F1BD0F7444CED8BC6B">
<enum>(c)</enum>
<header>Limitations on amount of tax</header>
<paragraph commented="no" display-inline="no-display-inline" id="ID6E9684DFF9A3406981A9DAE1A96887A6">
<enum>(1)</enum>
<header>Tax not to apply where failure not discovered and reasonable
diligence exercised</header>
<text display-inline="yes-display-inline">No tax shall be imposed by
subsection (a) on any failure during any period for which it is established to
the satisfaction of the Secretary that any person subject to liability for tax
under subsection (d) did not know that the failure existed and exercised
reasonable diligence to meet the requirements of subsection (e).</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDDAE4C789EAA147EA8F598E4A108EF6E1">
<enum>(2)</enum>
<header>Tax not to apply to failures corrected within 30
days</header>
<text display-inline="yes-display-inline">No tax shall be imposed by
subsection (a) on any failure if—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="ID9D48CC82EBCC4C57AEDAE226189041CB">
<enum>(A)</enum>
<text display-inline="yes-display-inline">any person subject to
liability for the tax under subsection (d) exercised reasonable diligence to
meet the requirements of subsection (e), and</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID4BD542443B134EB3826B4DE66B8DEA05">
<enum>(B)</enum>
<text display-inline="yes-display-inline">such person provides the
statement described in subsection (e) during the 30-day period beginning on the
first date such person knew, or exercising reasonable diligence should have
known, that such failure existed.</text>
</subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDC0A4FAE4736F4537BBABC4DF7C0FBFB4">
<enum>(3)</enum>
<header>Overall limitation for unintentional failures</header>
<subparagraph commented="no" display-inline="no-display-inline" id="ID4D7EA38E82674BED8FF74B64D2961220">
<enum>(A)</enum>
<header>In general</header>
<text display-inline="yes-display-inline">If the person subject to
liability for tax under subsection (d) exercised reasonable diligence to meet
the requirements of subsection (e), the tax imposed by subsection (a) for
failures during the taxable year of the employer (or, in the case of a
multiemployer plan, the taxable year of the trust forming part of the plan)
shall not exceed $500,000. For purposes of the preceding sentence, all
multiemployer plans of which the same trust forms a part shall be treated as 1
plan.</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID5AA234A4BA954C299BC5347C058A2366">
<enum>(B)</enum>
<header>Taxable years in the case of certain controlled
groups</header>
<text display-inline="yes-display-inline">For purposes of this
paragraph, if all persons who are treated as a single employer for purposes of
this section do not have the same taxable year, the taxable years taken into
account shall be determined under principles similar to the principles of
section 1561.</text>
</subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID270F184081844B04ABDFEBD1E6523712">
<enum>(4)</enum>
<header>Waiver by Secretary</header>
<text display-inline="yes-display-inline">In the case of a failure
which is due to reasonable cause and not to willful neglect, the Secretary may
waive part or all of the tax imposed by subsection (a) to the extent that the
payment of such tax would be excessive or otherwise inequitable relative to the
failure involved.</text>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="ID7D819E11C52C4A46BF4C97FDB0E7AF33">
<enum>(d)</enum>
<header>Liability for tax</header>
<text display-inline="yes-display-inline">The following shall be
liable for the tax imposed by subsection (a):</text>
<paragraph commented="no" display-inline="no-display-inline" id="ID0FF939EE148F4F41BFA7DDAB96DECDE6">
<enum>(1)</enum>
<text display-inline="yes-display-inline">In the case of a plan not
described in paragraph (2) or (3), the employer.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDA7403F05285A4F42A2FBB16AC8BBCF50">
<enum>(2)</enum>
<text display-inline="yes-display-inline">In the case of a
multiemployer plan, the plan.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDAAC5F09296F442C0B78C3C739130FE74">
<enum>(3)</enum>
<text display-inline="yes-display-inline">In the case of an
arrangement described in subsection (e)(4), the person required to provide the
statement under subsection (e).</text>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="ID01F9BE8E650046159DD84D45A4BB49CE">
<enum>(e)</enum>
<header>Requirements to provide pension benefit statements</header>
<paragraph commented="no" display-inline="no-display-inline" id="ID9BEA243ACDDD4589815DE934FBFCF750">
<enum>(1)</enum>
<header>Requirements</header>
<subparagraph commented="no" display-inline="no-display-inline" id="IDB56D6D0C3A314302974EEE04BC46CCD7">
<enum>(A)</enum>
<header>Defined contribution plan</header>
<text display-inline="yes-display-inline">The administrator of an
applicable pension plan which is a defined contribution plan shall furnish a
pension benefit statement described in paragraph (2)—</text>
<clause commented="no" display-inline="no-display-inline" id="IDC63658269E614EEA8EFAD8FAAEADDFCF">
<enum>(i)</enum>
<text display-inline="yes-display-inline">at least once each calendar
quarter to a participant or beneficiary who has the right to direct the
investment of assets in his or her account under the plan,</text>
</clause><clause commented="no" display-inline="no-display-inline" id="IDF29E896E5182474DA84D5978F1B9961C">
<enum>(ii)</enum>
<text display-inline="yes-display-inline">at least once each calendar
year to a participant or beneficiary who has his or her own account under the
plan but who does not have the right to direct the investment of assets in that
account, and</text>
</clause><clause commented="no" display-inline="no-display-inline" id="ID38A330D42C344CAEA8CE5F36AE397756">
<enum>(iii)</enum>
<text display-inline="yes-display-inline">upon written request to a
plan beneficiary who is not a participant or beneficiary described in clause
(i) or (ii), except that this subparagraph shall apply to only 1 request during
any 12-month period.</text>
</clause></subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID7BC5E398CE514E34A69B4BD31F23FEBA">
<enum>(B)</enum>
<header>Defined benefit plan</header>
<text display-inline="yes-display-inline">The administrator of an
applicable pension plan which is a defined benefit plan shall furnish a pension
benefit statement described in paragraph (2)—</text>
<clause commented="no" display-inline="no-display-inline" id="ID8246A18C5EAF4226992EA864FBCB3356">
<enum>(i)</enum>
<text display-inline="yes-display-inline">at least once every 3 years
to each participant who has a nonforfeitable accrued benefit and who is
employed by the employer maintaining the plan at the time the statement is to
be furnished, and</text>
</clause><clause commented="no" display-inline="no-display-inline" id="ID6863B123CBF54C45B4FF340232A35D6C">
<enum>(ii)</enum>
<text display-inline="yes-display-inline">to a participant or
beneficiary of the plan upon written request, except that this clause shall
apply to only 1 request during any 12-month period.</text>
</clause><continuation-text commented="no" continuation-text-level="subparagraph">Information furnished under clause
(i) to a participant may be based on reasonable estimates determined under
regulations prescribed by the Secretary of Labor, in consultation with the
Pension Benefit Guaranty Corporation.</continuation-text></subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID5B967274EB4A4F85B6A98A7D0C813F65">
<enum>(2)</enum>
<header>Statements</header>
<subparagraph commented="no" display-inline="no-display-inline" id="ID2191EAF466AA45DAAE7B97FF1A2FDFA4">
<enum>(A)</enum>
<header>In general</header>
<text display-inline="yes-display-inline">A pension benefit statement
furnished under paragraph (1)—</text>
<clause commented="no" display-inline="no-display-inline" id="ID840D7BE6B69F45108FDBA85B7FEAD5CF">
<enum>(i)</enum>
<text display-inline="yes-display-inline">shall indicate, on the
basis of the latest available information—</text>
<subclause commented="no" display-inline="no-display-inline" id="ID26E11E091D5E46548463BC7EC4D8A9ED">
<enum>(I)</enum>
<text display-inline="yes-display-inline">the total benefits accrued,
and</text>
</subclause><subclause commented="no" display-inline="no-display-inline" id="ID2894F0CBEBCC4505813154D9F52612ED">
<enum>(II)</enum>
<text display-inline="yes-display-inline">the nonforfeitable pension
benefits, if any, which have accrued, or the earliest date on which benefits
will become nonforfeitable,</text>
</subclause></clause><clause commented="no" display-inline="no-display-inline" id="ID46CEF0B3E7F947F6BB52534BC2AC0A02">
<enum>(ii)</enum>
<text display-inline="yes-display-inline">shall include an
explanation of any permitted disparity under section 401(l) or any floor-offset
arrangement that may be applied in determining any accrued benefits described
in clause (i),</text>
</clause><clause commented="no" display-inline="no-display-inline" id="IDE1F553F8CE644978A518AE06305E632A">
<enum>(iii)</enum>
<text display-inline="yes-display-inline">shall be written in a
manner calculated to be understood by the average plan participant, and</text>
</clause><clause commented="no" display-inline="no-display-inline" id="ID6CE706D061A044BC8452989FE3FB0E15">
<enum>(iv)</enum>
<text display-inline="yes-display-inline">may be delivered in
written, electronic, or other appropriate form to the extent such form is
reasonably accessible to the participant or beneficiary.</text>
</clause></subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID01CA1D97B04844198174D129B4F7808A">
<enum>(B)</enum>
<header>Additional information</header>
<text display-inline="yes-display-inline">In the case of a defined
contribution plan, any pension benefit statement under clause (i) or (ii) of
paragraph (1)(A) shall include—</text>
<clause commented="no" display-inline="no-display-inline" id="ID80D15C9276D849C58A92CB8C3BD10A5A">
<enum>(i)</enum>
<text display-inline="yes-display-inline">the value of each
investment to which assets in the individual account have been allocated,
determined as of the most recent valuation date under the plan, including the
value of any assets held in the form of employer securities or employer real
property, without regard to whether such securities or real property were
contributed by the plan sponsor or acquired at the direction of the plan or of
the participant or beneficiary, and</text>
</clause><clause commented="no" display-inline="no-display-inline" id="ID9B580E8DED00465493D449C56A659D18">
<enum>(ii)</enum>
<text display-inline="yes-display-inline">in the case of a pension
benefit statement under paragraph (1)(A)(i)—</text>
<subclause commented="no" display-inline="no-display-inline" id="ID325F7EF60F5649DAB2837858FC02DA9E">
<enum>(I)</enum>
<text display-inline="yes-display-inline">an explanation of any
limitations or restrictions on any right of the participant or beneficiary
under the plan to direct an investment, and</text>
</subclause><subclause commented="no" display-inline="no-display-inline" id="ID2CA442B0C71B442EB48F8488D71B382D">
<enum>(II)</enum>
<text display-inline="yes-display-inline">a notice that investments
in any individual account may not be adequately diversified if the value of any
investment in the account exceeds 20 percent of the fair market value of all
investments in the account.</text>
</subclause></clause></subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID6E45B5AF1182482BA5ED3A61A190AE8A">
<enum>(C)</enum>
<header>Alternative notice</header>
<text display-inline="yes-display-inline">The requirements of
subparagraph (A)(i)(II) are met if, at least annually and in accordance with
requirements of the Secretary of Labor, the plan—</text>
<clause commented="no" display-inline="no-display-inline" id="IDF5565D38291242F097E0F6BE5E83D893">
<enum>(i)</enum>
<text display-inline="yes-display-inline">updates the information
described in such paragraph which is provided in the pension benefit statement,
or</text>
</clause><clause commented="no" display-inline="no-display-inline" id="ID84869BD4AED3407D900CFD2AE4C246AE">
<enum>(ii)</enum>
<text display-inline="yes-display-inline">provides in a separate
statement such information as is necessary to enable a participant or
beneficiary to determine their nonforfeitable vested benefits.</text>
</clause></subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDCB6DA67F940E4A13A83093470A0C4038">
<enum>(3)</enum>
<header>Defined benefit plans</header>
<subparagraph commented="no" display-inline="no-display-inline" id="ID91B2F58D0FDD44F4890DDDAB4ECA0A3B">
<enum>(A)</enum>
<header>Alternative notice</header>
<text display-inline="yes-display-inline">In the case of a defined
benefit plan, the requirements of paragraph (1)(B)(i) shall be treated as met
with respect to a participant if at least once each year the administrator
provides to the participant notice of the availability of the pension benefit
statement and the ways in which the participant may obtain such statement. Such
notice may be delivered in written, electronic, or other appropriate form to
the extent such form is reasonably accessible to the participant.</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID2808330FA7AB474CADF7262E545EA9FF">
<enum>(B)</enum>
<header>Years in which no benefits accrue</header>
<text display-inline="yes-display-inline">The Secretary may provide
that years in which no employee or former employee benefits (within the meaning
of section 410(b)) under the plan need not be taken into account in determining
the 3-year period under paragraph (1)(B)(i).</text>
</subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID1E290B03F1D5449FB56C8653458A18E9">
<enum>(4)</enum>
<header>Special rule for certain annuities</header>
<text display-inline="yes-display-inline">In the case of an annuity
contract or custodial account described in section 403(b) which is not a plan
established or maintained by the employer, the pension benefit statement under
this subsection shall be furnished by the issuer of the contract, the custodian
of the account, or such other person as is specified by the Secretary.</text>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="IDFC34C8B483A54608B87523E2B2BB842A">
<enum>(f)</enum>
<header>Definitions and special rules</header>
<text display-inline="yes-display-inline">For purposes of this
section—</text>
<paragraph commented="no" display-inline="no-display-inline" id="IDAF7B760ADAAD4592BD9FA8C7459202CD">
<enum>(1)</enum>
<header>Applicable pension plan</header>
<text display-inline="yes-display-inline">The term <term>applicable
pension plan</term> means a plan described in clause (i), (ii), or (iv) of
section 219(g)(5)(A) other than a one-participant retirement plan (as defined
in section 401(a)(35)(E)(iv)).</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID5CE93AB67EBD436D94FB3F8B1F2DCCB0">
<enum>(2)</enum>
<header>Exception for government and church plans</header>
<text display-inline="yes-display-inline">This section shall not
apply to any governmental or church plan. For purposes of this paragraph, the
terms <term>governmental plan</term> and <term>church plan</term> have the
meanings given such terms by section 414.</text>
</paragraph></subsection></section><after-quoted-block></after-quoted-block></quoted-block>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDE99A847E004A4C7E86DAB2E6CFB30FE8">
<enum>(2)</enum>
<header>Aggregation</header>
<text display-inline="yes-display-inline">Section 414(t) of such Code,
as amended by this Act, is amended by striking <quote>or 4980H</quote> and
inserting <quote>4980H, or 4980I</quote>.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID0134DCC4F54C460D8E30A95DFF49EF99">
<enum>(3)</enum>
<header>Clerical amendment</header>
<text display-inline="yes-display-inline">The table of sections for
chapter 43 of such Code, as amended by this Act, is amended by adding at the
end the following new item:</text>
<quoted-block display-inline="no-display-inline" id="ID21EE2FA72CDD4E30829887F68690A55B" style="USC">
<toc regeneration="no-regeneration">
<toc-entry bold="off" level="section">Sec. 4980I. Failure of certain
pension plans to provide required
information.</toc-entry>
</toc>
<after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="ID6156BA714A3049B48B7B89246E527784">
<enum>(b)</enum>
<header>Amendments of ERISA</header>
<paragraph commented="no" display-inline="no-display-inline" id="IDC1BDC6D8FD3647F5903DABA87C68EB70">
<enum>(1)</enum>
<header>In general</header>
<text display-inline="yes-display-inline">
<external-xref legal-doc="act" parsable-cite="ERISA/105(a)">Section
105(a)</external-xref> of the <act-name parsable-cite="ERISA">Employee
Retirement Income Security Act of 1974</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/29/1025(a)">29 U.S.C.
1025(a)</external-xref>) is amended to read as follows:</text>
<quoted-block act-name="Employee Retirement Income Security Act of 1974" display-inline="no-display-inline" id="ID7D5AD833B52E4880AE4F37D4D22EA9EB" style="OLC">
<subsection commented="no" display-inline="no-display-inline" id="ID57505789764649CEB9213C007A914B98">
<enum>(a)</enum>
<header>Requirements to provide pension benefit statements</header>
<paragraph commented="no" display-inline="no-display-inline" id="IDFB2A8C5CCD194F89869649ACB1A3D361">
<enum>(1)</enum>
<header>Requirements</header>
<subparagraph commented="no" display-inline="no-display-inline" id="ID7AD4E12CFDE3478F8E72FD681464ABFB">
<enum>(A)</enum>
<header>Individual account plan</header>
<text display-inline="yes-display-inline">The administrator of an
individual account plan (other than a one-participant retirement plan described
in section 101(i)(8)(B)) shall furnish a pension benefit statement—</text>
<clause commented="no" display-inline="no-display-inline" id="ID222D8E10E9774572BC71DA24ABCE39F3">
<enum>(i)</enum>
<text display-inline="yes-display-inline">at least once each calendar
quarter to a participant or beneficiary who has the right to direct the
investment of assets in his or her account under the plan,</text>
</clause><clause commented="no" display-inline="no-display-inline" id="ID9DE7B0A0ADF64D16AA69060256926D5A">
<enum>(ii)</enum>
<text display-inline="yes-display-inline">at least once each calendar
year to a participant or beneficiary who has his or her own account under the
plan but does not have the right to direct the investment of assets in that
account, and</text>
</clause><clause commented="no" display-inline="no-display-inline" id="ID1D33669115CF43ECB9FCC6ACBD6E7755">
<enum>(iii)</enum>
<text display-inline="yes-display-inline">upon written request to a
plan beneficiary not described in clause (i) or (ii).</text>
</clause></subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID3294AB07414D49B590A4DDD5E838E3F2">
<enum>(B)</enum>
<header>Defined benefit plan</header>
<text display-inline="yes-display-inline">The administrator of a
defined benefit plan (other than a one-participant retirement plan described in
section 101(i)(8)(B)) shall furnish a pension benefit statement—</text>
<clause commented="no" display-inline="no-display-inline" id="ID2785E20F7BDC4F34B9DEBD5D4A5EACAF">
<enum>(i)</enum>
<text display-inline="yes-display-inline">at least once every 3 years
to each participant with a nonforfeitable accrued benefit and who is employed
by the employer maintaining the plan at the time the statement is to be
furnished, and</text>
</clause><clause commented="no" display-inline="no-display-inline" id="IDE37811BBECED48FF9419AADE070397D7">
<enum>(ii)</enum>
<text display-inline="yes-display-inline">to a participant or
beneficiary of the plan upon written request.</text>
</clause><continuation-text commented="no" continuation-text-level="subparagraph">Information furnished under clause
(i) to a participant may be based on reasonable estimates determined under
regulations prescribed by the Secretary, in consultation with the Pension
Benefit Guaranty Corporation.</continuation-text></subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID8EF9B6B82D634417BF055CB7773EBA24">
<enum>(2)</enum>
<header>Statements</header>
<subparagraph commented="no" display-inline="no-display-inline" id="ID8EBAF676B455427EB3C8F33F1CA106CA">
<enum>(A)</enum>
<header>In general</header>
<text display-inline="yes-display-inline">A pension benefit statement
under paragraph (1)—</text>
<clause commented="no" display-inline="no-display-inline" id="ID5623FB309DC044A6BA635E308C0BB796">
<enum>(i)</enum>
<text display-inline="yes-display-inline">shall indicate, on the
basis of the latest available information—</text>
<subclause commented="no" display-inline="no-display-inline" id="ID447861A16725432C9DB6EEF3EF6A928F">
<enum>(I)</enum>
<text display-inline="yes-display-inline">the total benefits accrued,
and</text>
</subclause><subclause commented="no" display-inline="no-display-inline" id="ID1226768EC1B147A5A07B0D6BE53782AD">
<enum>(II)</enum>
<text display-inline="yes-display-inline">the nonforfeitable pension
benefits, if any, which have accrued, or the earliest date on which benefits
will become nonforfeitable,</text>
</subclause></clause><clause commented="no" display-inline="no-display-inline" id="ID640E1FF2075843CB95D63B4FA7B160F9">
<enum>(ii)</enum>
<text display-inline="yes-display-inline">shall include an
explanation of any permitted disparity under section 401(l) of the Internal
Revenue Code of 1986 or any floor-offset arrangement that may be applied in
determining any accrued benefits described in clause (i),</text>
</clause><clause commented="no" display-inline="no-display-inline" id="IDC90BEE28BE414C3D9D81EBACCC940FC1">
<enum>(iii)</enum>
<text display-inline="yes-display-inline">shall be written in a
manner calculated to be understood by the average plan participant, and</text>
</clause><clause commented="no" display-inline="no-display-inline" id="ID8CE2767C756246F085D2F110369460B1">
<enum>(iv)</enum>
<text display-inline="yes-display-inline">may be delivered in
written, electronic, or other appropriate form to the extent such form is
reasonably accessible to the participant or beneficiary.</text>
</clause></subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID7C4D2526CD504D7FB8C7037F406A1FFB">
<enum>(B)</enum>
<header>Additional information</header>
<text display-inline="yes-display-inline">In the case of an
individual account plan, any pension benefit statement under clause (i) or (ii)
of paragraph (1)(A) shall include—</text>
<clause commented="no" display-inline="no-display-inline" id="IDB1542682E3C14F07AF66344233C5CB1C">
<enum>(i)</enum>
<text display-inline="yes-display-inline">the value of each
investment to which assets in the individual account have been allocated,
determined as of the most recent valuation date under the plan, including the
value of any assets held in the form of employer securities or employer real
property, without regard to whether such securities or real property were
contributed by the plan sponsor or acquired at the direction of the plan or of
the participant or beneficiary, and</text>
</clause><clause commented="no" display-inline="no-display-inline" id="IDA58F8A189F9448A18D14F30BE6C51F81">
<enum>(ii)</enum>
<text display-inline="yes-display-inline">in the case of a pension
benefit statement under paragraph (1)(A)(i)—</text>
<subclause commented="no" display-inline="no-display-inline" id="IDA1B7BD87EAB74485BB026ABCB44D51CC">
<enum>(I)</enum>
<text display-inline="yes-display-inline">an explanation of any
limitations or restrictions on any right of the participant or beneficiary
under the plan to direct an investment, and</text>
</subclause><subclause commented="no" display-inline="no-display-inline" id="IDA348B17268AE463785F1A1771B3F1CC3">
<enum>(II)</enum>
<text display-inline="yes-display-inline">a notice that investments
in any individual account may not be adequately diversified if the value of any
investment in the account exceeds 20 percent of the fair market value of all
investments in the account.</text>
</subclause></clause></subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="IDA8FFE22D515C429EA6A3216B04762B57">
<enum>(C)</enum>
<header>Alternative notice</header>
<text display-inline="yes-display-inline">The requirements of
subparagraph (A)(i)(II) are met if, at least annually and in accordance with
requirements of the Secretary, the plan—</text>
<clause commented="no" display-inline="no-display-inline" id="ID8DD939184A904B9B9889E5FD7CC2A196">
<enum>(i)</enum>
<text display-inline="yes-display-inline">updates the information
described in such paragraph which is provided in the pension benefit statement,
or</text>
</clause><clause commented="no" display-inline="no-display-inline" id="ID516D44757B194D1682324B47CD93E0FA">
<enum>(ii)</enum>
<text display-inline="yes-display-inline">provides in a separate
statement such information as is necessary to enable a participant or
beneficiary to determine their nonforfeitable vested benefits.</text>
</clause></subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID06C363C00A9D42A2BEC2AC4FACE1EC60">
<enum>(3)</enum>
<header>Defined benefit plans</header>
<subparagraph commented="no" display-inline="no-display-inline" id="ID30B81AAAF5E44E2D9CB8E9262AF60BD8">
<enum>(A)</enum>
<header>Alternative notice</header>
<text display-inline="yes-display-inline">In the case of a defined
benefit plan, the requirements of paragraph (1)(B)(i) shall be treated as met
with respect to a participant if at least once each year the administrator
provides to the participant notice of the availability of the pension benefit
statement and the ways in which the participant may obtain such statement. Such
notice may be delivered in written, electronic, or other appropriate form to
the extent such form is reasonably accessible to the participant.</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID7E3B5AC4F9CF409995DA8318F2D4D263">
<enum>(B)</enum>
<header>Years in which no benefits accrue</header>
<text display-inline="yes-display-inline">The Secretary may provide
that years in which no employee or former employee benefits (within the meaning
of section 410(b) of the Internal Revenue Code of 1986) under the plan need not
be taken into account in determining the 3-year period under paragraph
(1)(B)(i).</text>
</subparagraph></paragraph></subsection><after-quoted-block></after-quoted-block></quoted-block>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDB4E594C10944427A883B85077348E491">
<enum>(2)</enum>
<header>Conforming amendments</header>
<subparagraph commented="no" display-inline="no-display-inline" id="ID089023EF6B8B4BDAA1AAE3D92A845EEF">
<enum>(A)</enum>
<text display-inline="yes-display-inline">
<external-xref legal-doc="act" parsable-cite="ERISA/105">Section
105</external-xref> of the <act-name parsable-cite="ERISA">Employee Retirement
Income Security Act of 1974</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/29/1025">29 U.S.C. 1025</external-xref>) is amended by
striking subsection (d).</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID500D2133D1B940809AE680AB2F53E8DA">
<enum>(B)</enum>
<text display-inline="yes-display-inline">Section 105(b) of such Act
(<external-xref legal-doc="usc" parsable-cite="usc/29/1025(b)">29 U.S.C.
1025(b)</external-xref>) is amended to read as follows:</text>
<quoted-block display-inline="no-display-inline" id="ID902073D842AD486D9BD3CB9451830750" style="OLC">
<subsection commented="no" display-inline="no-display-inline" id="ID97852386ACE94D07976387FB322778C5">
<enum>(b)</enum>
<header>Limitation on number of statements</header>
<text display-inline="yes-display-inline">In no case shall a
participant or beneficiary of a plan be entitled to more than 1 statement
described in subparagraph (A)(iii) or (B)(ii) of subsection (a)(1), whichever
is applicable, in any 12-month period.</text>
</subsection><after-quoted-block></after-quoted-block></quoted-block>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="IDB347E16704AF4623B7567E61ABD1A68A">
<enum>(C)</enum>
<text display-inline="yes-display-inline">Section 502(c)(1) of such Act
(<external-xref legal-doc="usc" parsable-cite="usc/29/1132(c)(1)">29 U.S.C.
1132(c)(1)</external-xref>) is amended by striking <quote>or section
101(f)</quote> and inserting <quote>section 101(f), or section
105(a)</quote>.</text>
</subparagraph></paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="ID142FA94FC22D4D24B9A3C4C930CF59F3">
<enum>(c)</enum>
<header>Model statements</header>
<text display-inline="yes-display-inline">The Secretary of Labor shall,
within 180 days after the date of the enactment of this section, develop 1 or
more model benefit statements that are written in a manner calculated to be
understood by the average plan participant and that may be used by plan
administrators in complying with the requirements of section 4980I of the
Internal Revenue Code of 1986 and
<external-xref legal-doc="act" parsable-cite="ERISA/105">section
105</external-xref> of the <act-name parsable-cite="ERISA">Employee Retirement
Income Security Act of 1974</act-name>.</text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="ID05EAFBBD401C4C9E88E54499A92F343E">
<enum>(d)</enum>
<header>Effective date</header>
<paragraph commented="no" display-inline="no-display-inline" id="IDC91D2A4018C240C79F9D649EF921AE68">
<enum>(1)</enum>
<header>In general</header>
<text display-inline="yes-display-inline">The amendments made by this
section shall apply to plan years beginning after December 31, 2006.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDFAA895EA695D4855BF877774C06AC6B8">
<enum>(2)</enum>
<header>Special rule for collectively bargained agreements</header>
<text display-inline="yes-display-inline">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, paragraph (1) shall be applied to benefits
pursuant to, and individuals covered by, any such agreement by substituting for
<quote>December 31, 2006</quote> the earlier of—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="IDA2ABBB3357154B20A9E5D9EEF4749AEA">
<enum>(A)</enum>
<text display-inline="yes-display-inline">the later of—</text>
<clause commented="no" display-inline="no-display-inline" id="ID942A50687ED54FA395F5FF8DD11FF2FE">
<enum>(i)</enum>
<text display-inline="yes-display-inline">December 31, 2007, or</text>
</clause><clause commented="no" display-inline="no-display-inline" id="ID884BCAE638A944E09C65647038662474">
<enum>(ii)</enum>
<text display-inline="yes-display-inline">the date on which the last of
such collective bargaining agreements terminates (determined without regard to
any extension thereof after such date of enactment), or</text>
</clause></subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="IDE8A4ED515CC04BE18F5FF60E38F897D7">
<enum>(B)</enum>
<text display-inline="yes-display-inline">December 31, 2008.</text>
</subparagraph></paragraph></subsection></section><section commented="no" display-inline="no-display-inline" id="ID96348481C2BA4FC9AF5CD447EAF06CEA" section-type="subsequent-section">
<enum>112.</enum>
<header>Defined contribution plans required to provide adequate
investment education to participants</header>
<subsection commented="no" display-inline="no-display-inline" id="ID5159088B35C140B195EB408B6C193DFC">
<enum>(a)</enum>
<header>Excise tax on failure of certain defined contribution plans to
provide adequate investment information</header>
<paragraph commented="no" display-inline="no-display-inline" id="ID15D80246952548A4837E3BD008DB1B46">
<enum>(1)</enum>
<header>In general</header>
<text display-inline="yes-display-inline">Section 4980I(e)(1)(A) of the
Internal Revenue Code of 1986, as added by section 111, is amended by adding at
the end the following new flush sentence:</text>
<quoted-block display-inline="no-display-inline" id="ID469494848274432F9588C4B2B0AE7E86" style="OLC">
<quoted-block-continuation-text quoted-block-continuation-text-level="subparagraph">In
addition to the pension benefit statement, the administrator shall furnish at
least once each year to each participant or beneficiary who has the right to
direct the investment of assets in his or her account the model form relating
to basic investment guidelines as provided in paragraph
(5).</quoted-block-continuation-text><after-quoted-block></after-quoted-block></quoted-block>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID0D1E7CF9CD6C4354977F9F5E8E813B9E">
<enum>(2)</enum>
<header>Basic investment guidelines</header>
<text display-inline="yes-display-inline">Section 4980I(e) of such
Code, as so added, is amended by adding at the end the following new
paragraph:</text>
<quoted-block display-inline="no-display-inline" id="ID58BDB4D1429B4484B3ADB130C1BB7E26" style="OLC">
<paragraph commented="no" display-inline="no-display-inline" id="ID0DE7611598AB4DDA89BA9518BAE41EC3">
<enum>(5)</enum>
<header>Basic investment guidelines</header>
<subparagraph commented="no" display-inline="no-display-inline" id="IDE088E656857142EDBB739CBF2846E7D5">
<enum>(A)</enum>
<header>In general</header>
<text display-inline="yes-display-inline">The Secretary shall, in
consultation with the Secretary of Labor, develop and make available to defined
contribution plans for distribution under paragraph (1)(A) a model form
containing basic guidelines for investing for retirement. Except as otherwise
provided by the Secretary, such guidelines shall include—</text>
<clause commented="no" display-inline="no-display-inline" id="ID348620B7E2D74446B1BDD20E34F8B3C7">
<enum>(i)</enum>
<text display-inline="yes-display-inline">information on the benefits
of diversification,</text>
</clause><clause commented="no" display-inline="no-display-inline" id="ID526C44EF561A4384871BEA77643676AB">
<enum>(ii)</enum>
<text display-inline="yes-display-inline">information on the
essential differences, in terms of risk and return, of pension plan
investments, including stocks, bonds, mutual funds, and money market
investments,</text>
</clause><clause commented="no" display-inline="no-display-inline" id="ID3852B20CC3D248BBB25D41427EFC641A">
<enum>(iii)</enum>
<text display-inline="yes-display-inline">information on how an
individual’s pension plan investment allocations may differ depending on the
individual’s age and years to retirement and on other factors determined by the
Secretary,</text>
</clause><clause commented="no" display-inline="no-display-inline" id="IDD0CB4EE777D14DF5AA18F40BACFE8970">
<enum>(iv)</enum>
<text display-inline="yes-display-inline">sources of information
where individuals may learn more about pension rights, individual investing,
and investment advice, and</text>
</clause><clause commented="no" display-inline="no-display-inline" id="ID0F64CA7305634035BE2EF60DC9186383">
<enum>(v)</enum>
<text display-inline="yes-display-inline">such other information
related to individual investing as the Secretary determines appropriate.</text>
</clause></subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID7DE582A517F2478E8FF223DAEF6E7B7A">
<enum>(B)</enum>
<header>Calculation information</header>
<text display-inline="yes-display-inline">The model form under
subparagraph (A) shall include addresses for Internet sites, and a worksheet,
which a participant or beneficiary may use to calculate—</text>
<clause commented="no" display-inline="no-display-inline" id="ID25025F1776624997B026F93E71438883">
<enum>(i)</enum>
<text display-inline="yes-display-inline">the retirement age value of
the participant’s or beneficiary’s nonforfeitable pension benefits under the
plan (expressed as an annuity amount and determined by reference to varied
historical annual rates of return and annuity interest rates), and</text>
</clause><clause commented="no" display-inline="no-display-inline" id="ID1472A6E7DF6B4772A360CCB6C6796BEB">
<enum>(ii)</enum>
<text display-inline="yes-display-inline">other important amounts
relating to retirement savings, including the amount which a participant or
beneficiary would be required to save annually to provide a retirement income
equal to various percentages of their current salary (adjusted for expected
growth prior to retirement).</text>
</clause><continuation-text commented="no" continuation-text-level="subparagraph">The Secretary of Labor shall
develop an Internet site which an individual may use in making such
calculations and the address for such site shall be included with the
form.</continuation-text></subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID78479BB0C4F34007BBD621797E9F9987">
<enum>(C)</enum>
<header>Public comment</header>
<text display-inline="yes-display-inline">The Secretary shall provide
at least 90 days for public comment before publishing final notice of the model
form.</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID3A74745CDCBA42DF8A7D8FC6D3B31336">
<enum>(D)</enum>
<header>Rules relating to form and statement</header>
<text display-inline="yes-display-inline">The model form under
subparagraph (A)—</text>
<clause commented="no" display-inline="no-display-inline" id="ID2DC16E5C79B74BEFA431B63899CA50DC">
<enum>(i)</enum>
<text display-inline="yes-display-inline">shall be written in a
manner calculated to be understood by the average plan participant, and</text>
</clause><clause commented="no" display-inline="no-display-inline" id="IDF4817C2C76364D46972BA3FD01BC6887">
<enum>(ii)</enum>
<text display-inline="yes-display-inline">may be delivered in
written, electronic, or other appropriate form to the extent such form is
reasonably accessible to participants and beneficiaries.</text>
</clause></subparagraph></paragraph><after-quoted-block></after-quoted-block></quoted-block>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID9C90B8AEA0A24C9ABBECE93520E8AA28">
<enum>(3)</enum>
<header>Conforming amendments</header>
<text display-inline="yes-display-inline">Section 4980I of such Code is
amended—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="ID9674A4B02D174058BC197AB01F87F6FD">
<enum>(A)</enum>
<text display-inline="yes-display-inline">by adding at the end of
subsection (c)(3) the following new subparagraph:</text>
<quoted-block display-inline="no-display-inline" id="IDE8F57A3ECBD64CF289D6E1B6616E055C" style="OLC">
<subparagraph commented="no" display-inline="no-display-inline" id="ID3CA04C91CC0C4638B17ED7FCC4652065">
<enum>(C)</enum>
<header>Separate application</header>
<text display-inline="yes-display-inline">This paragraph shall be
applied separately to failures to meet the requirements of subsection (e)(1)(A)
to provide pension benefit statements and failures to meet the requirements of
subsection (e)(1)(A) to provide model forms containing basic investment
guidelines.</text>
</subparagraph><after-quoted-block>;</after-quoted-block></quoted-block>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID9B6C6BEF577F4DF78C51BB368FECF2C3">
<enum>(B)</enum>
<text display-inline="yes-display-inline">by inserting <quote>or model
form</quote> after <quote>statement</quote> in subsection (d)(3); and</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID25A4BF5CB2C44E99BC2B4E06901D9121">
<enum>(C)</enum>
<text display-inline="yes-display-inline">by inserting <quote>or model
form containing basic investment guidelines</quote> after
<quote>statement</quote> in subsection (e)(4).</text>
</subparagraph></paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="IDC20B87D498CC4CB88211983434993999">
<enum>(b)</enum>
<header>Adequate investment education</header>
<paragraph commented="no" display-inline="no-display-inline" id="ID09764360E04A4A288BA5E5E22F00E02E">
<enum>(1)</enum>
<header>In general</header>
<text display-inline="yes-display-inline">
<external-xref legal-doc="act" parsable-cite="ERISA/104">Section
104</external-xref> of the <act-name parsable-cite="ERISA">Employee Retirement
Income Security Act of 1974</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/29/1024">29 U.S.C. 1024</external-xref>), as amended by
section 102, is amended by redesignating subsection (e) as subsection (f) and
by inserting after subsection (d) the following new subsection:</text>
<quoted-block act-name="Employee Retirement Income Security Act of 1974" display-inline="no-display-inline" id="ID168FAB2E719048328FDDA73DB7C4B95E" style="OLC">
<subsection commented="no" display-inline="no-display-inline" id="ID1572C323C7EE43A494F3FEB4B0DDC8AE">
<enum>(e)</enum>
<header>Basic investment guidelines</header>
<paragraph commented="no" display-inline="no-display-inline" id="IDA8DFB544EC8344F8A2E9D5D3469C1885">
<enum>(1)</enum>
<header>In general</header>
<text display-inline="yes-display-inline">The administrator of an
individual account plan (other than a one-participant retirement plan described
in section 101(i)(8)(B)) shall furnish at least once each year to each
participant or beneficiary who has the right to direct the investment of assets
in his or her account the model form relating to basic investment guidelines
which is described in paragraph (2).</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID3844F4A3235B4DE9B9B984F0CF8717E7">
<enum>(2)</enum>
<header>Model form</header>
<subparagraph commented="no" display-inline="no-display-inline" id="IDB342C2FE740D45F7991B7FB46D85448E">
<enum>(A)</enum>
<header>In general</header>
<text display-inline="yes-display-inline">The Secretary of the
Treasury, in consultation with the Secretary, shall develop and make available
to individual account plans for distribution under paragraph (1) a model form
containing basic guidelines for investing for retirement. Except as otherwise
provided by the Secretary of the Treasury, such guidelines shall
include—</text>
<clause commented="no" display-inline="no-display-inline" id="IDD2B4B0B2EE974972AC2220AE7917346F">
<enum>(i)</enum>
<text display-inline="yes-display-inline">information on the benefits
of diversification,</text>
</clause><clause commented="no" display-inline="no-display-inline" id="IDACF0C8BAA942411A962E6DEB6B957D6C">
<enum>(ii)</enum>
<text display-inline="yes-display-inline">information on the
essential differences, in terms of risk and return, of pension plan
investments, including stocks, bonds, mutual funds, and money market
investments,</text>
</clause><clause commented="no" display-inline="no-display-inline" id="ID44A08B0B850B4D60847A98FB570CDAB7">
<enum>(iii)</enum>
<text display-inline="yes-display-inline">information on how an
individual’s pension plan investment allocations may differ depending on the
individual’s age and years to retirement and on other factors determined by the
Secretary of the Treasury,</text>
</clause><clause commented="no" display-inline="no-display-inline" id="IDD21E416CF3EB4FBD9286CDECD36AE9B3">
<enum>(iv)</enum>
<text display-inline="yes-display-inline">sources of information
where individuals may learn more about pension rights, individual investing,
and investment advice, and</text>
</clause><clause commented="no" display-inline="no-display-inline" id="IDE0864A806573400A8571CAFDE77BB935">
<enum>(v)</enum>
<text display-inline="yes-display-inline">such other information
related to individual investing as the Secretary of the Treasury determines
appropriate.</text>
</clause></subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID328539DED28F436C8593E480634FE98C">
<enum>(B)</enum>
<header>Calculation information</header>
<text display-inline="yes-display-inline">The model form under
subparagraph (A) shall include addresses for Internet sites, and a worksheet,
which a participant or beneficiary may use to calculate—</text>
<clause commented="no" display-inline="no-display-inline" id="ID834E38A4CA37491084363CB4935430BA">
<enum>(i)</enum>
<text display-inline="yes-display-inline">the retirement age value of
the participant’s or beneficiary’s nonforfeitable pension benefits under the
plan (expressed as an annuity amount and determined by reference to varied
historical annual rates of return and annuity interest rates), and</text>
</clause><clause commented="no" display-inline="no-display-inline" id="IDE1C4EDCCD1684B69AABD2BC75F58BE4C">
<enum>(ii)</enum>
<text display-inline="yes-display-inline">other important amounts
relating to retirement savings, including the amount which a participant or
beneficiary would be required to save annually to provide a retirement income
equal to various percentages of their current salary (adjusted for expected
growth prior to retirement).</text>
</clause></subparagraph></paragraph><continuation-text commented="no" continuation-text-level="subsection">The Secretary shall develop an
Internet site which an individual may use in making such calculations and the
address for such site shall be included with the form.</continuation-text><paragraph commented="no" display-inline="no-display-inline" id="ID944BA3652CB04E88AACDD5AD9563189D">
<enum>(3)</enum>
<header>Rules relating to form and statement</header>
<text display-inline="yes-display-inline">The model form under
paragraph (2)—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="ID044BECAD35254BCCB27D16CA36FA40BB">
<enum>(A)</enum>
<text display-inline="yes-display-inline">shall be written in a
manner calculated to be understood by the average plan participant, and</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID8529071D21D543928C5330F7F6BD2FA5">
<enum>(B)</enum>
<text display-inline="yes-display-inline">may be delivered in
written, electronic, or other appropriate form to the extent such form is
reasonably accessible to participants and beneficiaries.</text>
</subparagraph></paragraph></subsection><after-quoted-block></after-quoted-block></quoted-block>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDAAAA0A81D7564B1B871DEFF8BAFC977A">
<enum>(2)</enum>
<header>Enforcement</header>
<text display-inline="yes-display-inline">Section 502(c)(7) of such Act
(<external-xref legal-doc="usc" parsable-cite="usc/29/1132(c)(7)">29 U.S.C.
1132(c)(7)</external-xref>), as amended by section 102, is amended by striking
<quote>section 104(d)</quote> and inserting <quote>subsection (d) or (e) of
section 104</quote>.</text>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="IDB781E71688E84CA4AE59B2852AA9F4F6">
<enum>(c)</enum>
<header>Effective date</header>
<paragraph commented="no" display-inline="no-display-inline" id="ID23AEC5C990A242F98E69FA886F279DC1">
<enum>(1)</enum>
<header>In general</header>
<text display-inline="yes-display-inline">The amendments made by this
section shall apply to plan years beginning after December 31, 2006.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDC0D0A2DAB22F4A51B696F5668C3F0F15">
<enum>(2)</enum>
<header>Special rule for collectively bargained agreements</header>
<text display-inline="yes-display-inline">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, paragraph (1) shall be applied to benefits
pursuant to, and individuals covered by, any such agreement by substituting for
<quote>December 31, 2006</quote> the earlier of—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="IDA4AF50DACA10438FA1D639D2B13B6846">
<enum>(A)</enum>
<text display-inline="yes-display-inline">the later of—</text>
<clause commented="no" display-inline="no-display-inline" id="ID2A2C0389F47149CCA4C8980368C12530">
<enum>(i)</enum>
<text display-inline="yes-display-inline">December 31, 2007, or</text>
</clause><clause commented="no" display-inline="no-display-inline" id="ID8667A66275184652A0364EC79923E951">
<enum>(ii)</enum>
<text display-inline="yes-display-inline">the date on which the last of
such collective bargaining agreements terminates (determined without regard to
any extension thereof after such date of enactment), or</text>
</clause></subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="IDE9D6FC0B033B4BE982E1244B246E0D20">
<enum>(B)</enum>
<text display-inline="yes-display-inline">December 31, 2008.</text>
</subparagraph></paragraph></subsection></section><section commented="no" display-inline="no-display-inline" id="ID6EF93852625049679779EC3D214A1635" section-type="subsequent-section">
<enum>113.</enum>
<header>Material information relating to investment in employer
securities</header>
<subsection commented="no" display-inline="no-display-inline" id="IDBFBB30131CD04CAC9EFFFFA917E4CD52">
<enum>(a)</enum>
<header>Amendments of Internal Revenue Code</header>
<paragraph commented="no" display-inline="no-display-inline" id="ID5D0A18BA7DF34CABA168E58F814C3A13">
<enum>(1)</enum>
<header>In general</header>
<text display-inline="yes-display-inline">Section 4980H(e) of the
Internal Revenue Code of 1986, as added by section 102, is amended—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="ID70D54705DE8940F1945B0043493114FE">
<enum>(A)</enum>
<text display-inline="yes-display-inline">by striking <quote>(e)
<header-in-text level="subsection" style="OLC">Notice of Right To
Divest</header-in-text>.—Not</quote> and inserting:</text>
<quoted-block display-inline="no-display-inline" id="ID0A6FAFF00B114CE685282B1A41FA3618" style="OLC">
<subsection commented="no" display-inline="no-display-inline" id="IDC72EFA0BBE4E454E8CE3D470F5F20690">
<enum>(e)</enum>
<header>Notice requirements</header>
<paragraph commented="no" display-inline="no-display-inline" id="ID12D731D1AF2043CB86474956346D2AC0">
<enum>(1)</enum>
<header>Notice of right to divest</header>
<text display-inline="yes-display-inline">Not</text>
</paragraph></subsection><after-quoted-block>,</after-quoted-block></quoted-block>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID3237F8E4225A4FE8ADED7D30D6CE9C99">
<enum>(B)</enum>
<text display-inline="yes-display-inline">by redesignating paragraphs
(1) and (2) as subparagraphs (A) and (B) and adjusting all margins accordingly,
and</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="IDFE1D9637613C4762B12DCAF2EEC511B7">
<enum>(C)</enum>
<text display-inline="yes-display-inline">by adding at the end the
following new paragraph:</text>
<quoted-block display-inline="no-display-inline" id="ID933C5A4E90EF4F399D30F6FD157DE0BB" style="OLC">
<paragraph commented="no" display-inline="no-display-inline" id="ID126FC10BDF0B45938BFD234E5AE67137">
<enum>(2)</enum>
<header>Material information</header>
<subparagraph commented="no" display-inline="no-display-inline" id="ID8E8DB44E26824D9BA65C9AACA25128DC">
<enum>(A)</enum>
<header>In general</header>
<text display-inline="yes-display-inline">The administrator of a
defined contribution plan (other than a one-participant retirement plan) shall
provide to each participant and beneficiary who has the right to direct the
investment of assets in his or her account in employer securities with all
reports, proxy statements, and other communications regarding investment of
such assets in employer securities to the extent that such reports, statements,
and communications are required to be provided by the plan sponsor to investors
in connection with such an investment under applicable securities laws. Such
reports, statements, and communications may be delivered in written,
electronic, or other appropriate form to the extent such form is reasonably
accessible to participants and beneficiaries.</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="IDF39EA78E64E0447EB9114859E6F059A8">
<enum>(B)</enum>
<header>Plan sponsor</header>
<text display-inline="yes-display-inline">If any information required
to be provided under paragraph (1) is maintained by the plan sponsor, the plan
sponsor shall transmit such information to the plan administrator.</text>
</subparagraph></paragraph><after-quoted-block></after-quoted-block></quoted-block>
</subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID55D048BBB9C944FD923C2F7E596FE7A5">
<enum>(2)</enum>
<header>Conforming amendments</header>
<subparagraph commented="no" display-inline="no-display-inline" id="ID4408A8697A074D64A039AAEC647DD56F">
<enum>(A)</enum>
<text display-inline="yes-display-inline">Section 4980H(c)(3) of such
Code, as so added, is amended by adding at the end the following new
subparagraph:</text>
<quoted-block display-inline="no-display-inline" id="ID03DAA257872F4782BADFF8CB746121A8" style="OLC">
<subparagraph commented="no" display-inline="no-display-inline" id="ID9909845EFED44B8F96C662CD64DEA5A2">
<enum>(C)</enum>
<header>Separate application</header>
<text display-inline="yes-display-inline">This paragraph shall be
applied separately for failures to meet the requirements of subsection (e)(1)
and failures to meet the requirements of subsection (e)(2).</text>
</subparagraph><after-quoted-block></after-quoted-block></quoted-block>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="IDEB4058F4FBAF492A9A7E3D3FCFDC45CF">
<enum>(B)</enum>
<clause commented="no" display-inline="yes-display-inline" id="ID6A3CD6B9CC1246A8B09B6D3D55B3FD8B"><enum>(i)</enum>
<text display-inline="yes-display-inline">The heading for section 4980H
of such Code, as so added, is amended by striking <quote><header-in-text level="section" style="OLC">notice of freedom to divest employer
securities</header-in-text></quote> and inserting <quote><header-in-text level="section" style="OLC">information regarding investment in employer
securities</header-in-text></quote>.</text>
</clause><clause commented="no" display-inline="no-display-inline" id="IDE9961191F27E4CE7B7596E6DFE54177D" indent="up1">
<enum>(ii)</enum>
<text display-inline="yes-display-inline">The item relating to section
4980H in the table of sections for chapter 43 of such Code, as so added, is
amended by striking <quote>notice of freedom to divest employer
securities</quote> and inserting <quote>information regarding investment in
employer securities</quote>.</text>
</clause></subparagraph></paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="ID3C00DF489AF0431AA661C40035087ACC">
<enum>(b)</enum>
<header>Amendments of ERISA</header>
<paragraph commented="no" display-inline="no-display-inline" id="ID299075D010944D4BBE70400317BC1B3C">
<enum>(1)</enum>
<header>In general</header>
<text display-inline="yes-display-inline">
<external-xref legal-doc="act" parsable-cite="ERISA/104">Section
104</external-xref> of the <act-name parsable-cite="ERISA">Employee Retirement
Income Security Act of 1974</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/29/1024">29 U.S.C. 1024</external-xref>) as amended by
sections 102 and 112, is amended by redesignating subsection (f) as subsection
(g) and by inserting after subsection (e) the following new subsection:</text>
<quoted-block act-name="Employee Retirement Income Security Act of 1974" display-inline="no-display-inline" id="ID0543B669BB8648C3BE862609E45CC98B" style="OLC">
<subsection commented="no" display-inline="no-display-inline" id="ID833F8840078A4E36A34B3A7C0E468DEA">
<enum>(f)</enum>
<header>Providing of material information</header>
<paragraph commented="no" display-inline="no-display-inline" id="ID6B3AD5C8037F42A995795046D9171459">
<enum>(1)</enum>
<header>In general</header>
<text display-inline="yes-display-inline">The administrator of an
individual account plan (other than a one-participant retirement plan described
in section 101(i)(8)(B)) shall provide to each participant and beneficiary who
has the right to direct the investment of assets in his or her account in
employer securities with all reports, proxy statements, and other
communications regarding investment of such assets in employer securities to
the extent that such reports, statements, and communications are required to be
provided by the plan sponsor to investors in connection with such an investment
under applicable securities laws. Such reports, statements, and communications
may be delivered in written, electronic, or other appropriate form to the
extent such form is reasonably accessible to participants and
beneficiaries.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDADBA8A6E9602421290CDCE41879290BC">
<enum>(2)</enum>
<header>Plan sponsor</header>
<text display-inline="yes-display-inline">If any information required
to be provided under paragraph (1) is maintained by the plan sponsor, the plan
sponsor shall transmit such information to the plan administrator.</text>
</paragraph></subsection><after-quoted-block></after-quoted-block></quoted-block>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID6619FEDC0D0D425FB3863ADA708845C2">
<enum>(2)</enum>
<header>Enforcement</header>
<text display-inline="yes-display-inline">Section 502 of such Act
(<external-xref legal-doc="usc" parsable-cite="usc/29/1132">29 U.S.C.
1132</external-xref>) is amended—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="ID0EBBE430DCE74162A8A0B1A4CC0302C0">
<enum>(A)</enum>
<text display-inline="yes-display-inline">in subsection (a)(6), by
striking <quote>(6), or (7)</quote> and inserting <quote>(6), (7), or
(8)</quote>;</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="IDEF873E8677C145B79A6A2777A1E6317A">
<enum>(B)</enum>
<text display-inline="yes-display-inline">by redesignating paragraph
(8) of subsection (c) as paragraph (9); and</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="IDDBCC540440394E2D8FAAF4289096DE20">
<enum>(C)</enum>
<text display-inline="yes-display-inline">by inserting after paragraph
(7) of subsection (c) the following new paragraph:</text>
<quoted-block display-inline="no-display-inline" id="ID124B8B7A79634BEB81156E8BACC4301B" style="OLC">
<paragraph commented="no" display-inline="no-display-inline" id="ID39963660F6F74119BED1A4FE406675D2" indent="up1">
<enum>(8)</enum>
<text display-inline="yes-display-inline">The Secretary may assess a
civil penalty against any person of up to $1,000 a day from the date of the
person’s failure or refusal to comply with the requirements of section 104(f)
until such failure or refusal is corrected.</text>
</paragraph><after-quoted-block></after-quoted-block></quoted-block>
</subparagraph></paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="ID3009D2687CDD4972AB3699DD946A20C0">
<enum>(c)</enum>
<header>Effective date</header>
<paragraph commented="no" display-inline="no-display-inline" id="ID1C716FB0989D4D98B58454053A2A8A79">
<enum>(1)</enum>
<header>In general</header>
<text display-inline="yes-display-inline">The amendments made by this
section shall apply to plan years beginning after December 31, 2005.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDCADB9BE5A3694364A1051C03753E830A">
<enum>(2)</enum>
<header>Special rule for collectively bargained agreements</header>
<text display-inline="yes-display-inline">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, paragraph (1) shall be applied to benefits
pursuant to, and individuals covered by, any such agreement by substituting for
<quote>December 31, 2005</quote> the earlier of—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="ID24770093D1174102974B6D376A8DA65A">
<enum>(A)</enum>
<text display-inline="yes-display-inline">the later of—</text>
<clause commented="no" display-inline="no-display-inline" id="IDF530CAA7433C456DA8B9F81F2B5D2656">
<enum>(i)</enum>
<text display-inline="yes-display-inline">December 31, 2006, or</text>
</clause><clause commented="no" display-inline="no-display-inline" id="IDBD15B9B347B44171ADD089CAC170FA03">
<enum>(ii)</enum>
<text display-inline="yes-display-inline">the date on which the last of
such collective bargaining agreements terminates (determined without regard to
any extension thereof after such date of enactment), or</text>
</clause></subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="IDC9A5C4045EA2495E872B8A6132B88621">
<enum>(B)</enum>
<text display-inline="yes-display-inline">December 31, 2007.</text>
</subparagraph></paragraph></subsection></section><section commented="no" display-inline="no-display-inline" id="IDE5D86BEC5C2D488290F4F8EBFA151E54" section-type="subsequent-section">
<enum>114.</enum>
<header>Fiduciary rules for plan sponsors designating independent
investment advisers</header>
<subsection commented="no" display-inline="no-display-inline" id="ID56C6946D49C64DB19EB3955FE90E7FD8">
<enum>(a)</enum>
<header>In general</header>
<text display-inline="yes-display-inline">
<external-xref legal-doc="act" parsable-cite="ERISA/404">Section
404</external-xref> of the <act-name parsable-cite="ERISA">Employee Retirement
Income Security Act of 1974</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/29/1104">29 U.S.C. 1104</external-xref>) is amended by
adding at the end the following new subsection:</text>
<quoted-block act-name="Employee Retirement Income Security Act of 1974" display-inline="no-display-inline" id="ID69BB8E0E4CEF467C9B5EDEBDA1EED8A1" style="OLC">
<subsection commented="no" display-inline="no-display-inline" id="IDDAAE1F4D2EFE4567AE9F26B1FCA2D66C">
<enum>(e)</enum>
<header>Independent investment adviser</header>
<paragraph commented="no" display-inline="no-display-inline" id="ID0D45C7BAFED94CCF826B6F205166D4B4">
<enum>(1)</enum>
<header>In general</header>
<text display-inline="yes-display-inline">In the case of an
individual account plan which permits a plan participant or beneficiary to
direct the investment of the assets in his or her account, if a plan sponsor or
other person who is a fiduciary designates and monitors a qualified investment
adviser pursuant to the requirements of paragraph (3), such fiduciary—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="ID2BB530C66A56446481287276AF9E9FC8">
<enum>(A)</enum>
<text display-inline="yes-display-inline">shall be deemed to have
satisfied the requirements under this section for the prudent designation and
periodic review of an investment adviser with whom the plan sponsor or other
person who is a fiduciary enters into an arrangement for the provision of
advice referred to in section 3(21)(A)(ii),</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID72C5527C82874EC6B24BA0C0E39D9075">
<enum>(B)</enum>
<text display-inline="yes-display-inline">shall not be liable under
this section for any loss, or by reason of any breach, with respect to the
provision of investment advice given by such adviser to any plan participant or
beneficiary, and</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="IDEC3CBFC8F83C479A98483A31E070CB1C">
<enum>(C)</enum>
<text display-inline="yes-display-inline">shall not be liable for any
co-fiduciary liability under subsections (a)(2) and (b) of section 405 with
respect to the provision of investment advice given by such adviser to any plan
participant or beneficiary.</text>
</subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID77EA56F2CD424683AC3C255D1DDAEA13">
<enum>(2)</enum>
<header>Qualified investment adviser</header>
<subparagraph commented="no" display-inline="no-display-inline" id="ID7581381463C14F328A10C051FFB7316A">
<enum>(A)</enum>
<header>In general</header>
<text display-inline="yes-display-inline">For purposes of this
subsection, the term <term>qualified investment adviser</term> means, with
respect to a plan, a person—</text>
<clause commented="no" display-inline="no-display-inline" id="IDF66397ECF9894AA78EF6117BFD33EBF3">
<enum>(i)</enum>
<text display-inline="yes-display-inline">who is a fiduciary of the
plan by reason of the provision of investment advice by such person to a plan
participant or beneficiary;</text>
</clause><clause commented="no" display-inline="no-display-inline" id="ID74FEBA037FF1449FABC4D505C24AD280">
<enum>(ii)</enum>
<text display-inline="yes-display-inline">who—</text>
<subclause commented="no" display-inline="no-display-inline" id="IDFBB35AFFCA68408686E69B8D9BB4605D">
<enum>(I)</enum>
<text display-inline="yes-display-inline">is registered as an
investment adviser under the <act-name parsable-cite="IAA40">Investment
Advisers Act of 1940</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/15/80b-1">15 U.S.C. 80b–1</external-xref> et seq.),</text>
</subclause><subclause commented="no" display-inline="no-display-inline" id="ID755121164CB949F9B5EADA73B113ECC5">
<enum>(II)</enum>
<text display-inline="yes-display-inline">is registered as an
investment adviser under the laws of the State in which such adviser maintains
the principal office and place of business of such adviser, but only if such
State laws are consistent with section 203A of the
<act-name parsable-cite="IAA40">Investment Advisers Act of 1940</act-name>
(<external-xref legal-doc="usc" parsable-cite="usc/15/80b-3a">15 U.S.C.
80b–3a</external-xref>),</text>
</subclause><subclause commented="no" display-inline="no-display-inline" id="IDCA8B404F2E4847F98B37DF5E2392FD2A">
<enum>(III)</enum>
<text display-inline="yes-display-inline">is a bank or similar
financial institution referred to in section 408(b)(4),</text>
</subclause><subclause commented="no" display-inline="no-display-inline" id="IDFD4EC70388C04F34B2E71166925A01A6">
<enum>(IV)</enum>
<text display-inline="yes-display-inline">is an insurance company
qualified to do business under the laws of a State, or</text>
</subclause><subclause commented="no" display-inline="no-display-inline" id="ID652BD044CD4C4364A9DAE1F5B7EF376B">
<enum>(V)</enum>
<text display-inline="yes-display-inline">is any other comparably
qualified entity which satisfies such criteria as the Secretary determines
appropriate, consistent with the purposes of this subsection, and</text>
</subclause></clause><clause commented="no" display-inline="no-display-inline" id="IDECCEBB523DE14BA68264BC637260A128">
<enum>(iii)</enum>
<text display-inline="yes-display-inline">who meets the requirements
of subparagraph (B).</text>
</clause></subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="IDF371FDE017C240C6B97C02EEAF2E04C8">
<enum>(B)</enum>
<header>Adviser requirements</header>
<text display-inline="yes-display-inline">The requirements of this
subparagraph are met if every individual employed (or otherwise compensated) by
a person described in subparagraph (A)(ii) who provides investment advice on
behalf of such person to any plan participant or beneficiary is—</text>
<clause commented="no" display-inline="no-display-inline" id="ID3A9728559CCC4D2182964E725FDDA864">
<enum>(i)</enum>
<text display-inline="yes-display-inline">an individual described in
subclause (I) of subparagraph (A)(ii),</text>
</clause><clause commented="no" display-inline="no-display-inline" id="IDC725AD267FF6496F8AF7AC7DEB0A5AF3">
<enum>(ii)</enum>
<text display-inline="yes-display-inline">an individual described in
subclause (II) of subparagraph (A)(ii), but only if such State has an
examination requirement to qualify for registration,</text>
</clause><clause commented="no" display-inline="no-display-inline" id="IDF00BFA3428394100A2FE7F9BDB942511">
<enum>(iii)</enum>
<text display-inline="yes-display-inline">registered as a broker or
dealer under the <act-name parsable-cite="SEA34">Securities Exchange Act of
1934</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/15/78a">15
U.S.C. 78a</external-xref> et seq.),</text>
</clause><clause commented="no" display-inline="no-display-inline" id="IDC7076428F18B4095BE96DA8033CFC1D9">
<enum>(iv)</enum>
<text display-inline="yes-display-inline">a registered representative
as described in section 3(a)(18) of the <act-name parsable-cite="SEA34">Securities Exchange Act of 1934</act-name>
(<external-xref legal-doc="usc" parsable-cite="usc/15/78c(a)(18)">15 U.S.C.
78c(a)(18)</external-xref>) or section 202(a)(17) of the
<act-name parsable-cite="IAA40">Investment Advisers Act of 1940</act-name>
(<external-xref legal-doc="usc" parsable-cite="usc/15/80b-2(a)(17)">15 U.S.C.
80b–2(a)(17)</external-xref>), or</text>
</clause><clause commented="no" display-inline="no-display-inline" id="ID59A5DA2EA8554C69A9D6376FAA9F6A79">
<enum>(v)</enum>
<text display-inline="yes-display-inline">any other comparably
qualified individual who satisfies such criteria as the Secretary determines
appropriate, consistent with the purposes of this subsection.</text>
</clause></subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDC05544D80B844FF6BFD4D46DC1E6334A">
<enum>(3)</enum>
<header>Verification requirements</header>
<text display-inline="yes-display-inline">The requirements of this
paragraph are met if—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="ID8F3FCC54D64C4B0285512585111B363B">
<enum>(A)</enum>
<text display-inline="yes-display-inline">the plan sponsor or other
person who is a fiduciary in designating a qualified investment adviser
receives at the time of the designation, and annually thereafter, a written
verification from the qualified investment adviser that the investment
adviser—</text>
<clause commented="no" display-inline="no-display-inline" id="ID5082A7C015034EF6AFC8688C9E2ABEB7">
<enum>(i)</enum>
<text display-inline="yes-display-inline">is and remains a qualified
investment adviser,</text>
</clause><clause commented="no" display-inline="no-display-inline" id="ID5A488C06909443E7A13D7A9E9D6F815B">
<enum>(ii)</enum>
<text display-inline="yes-display-inline">acknowledges that the
investment adviser is a fiduciary with respect to the plan and is solely
responsible for its investment advice,</text>
</clause><clause commented="no" display-inline="no-display-inline" id="ID7D4C98EC9A5F4B4B94F82B6FBD8D6FC4">
<enum>(iii)</enum>
<text display-inline="yes-display-inline">has reviewed the plan
documents (including investment options) and has determined that its
relationship with the plan and the investment advice provided to any plan
participant or beneficiary, including any fees or other compensation it will
receive, will not constitute a violation of section 406,</text>
</clause><clause commented="no" display-inline="no-display-inline" id="IDCB2B29A7566D4E5C90D9C00FD01FC33E">
<enum>(iv)</enum>
<text display-inline="yes-display-inline">will, in providing
investment advice to any participant or beneficiary, consider any employer
securities or employer real property allocated to his or her account,
and</text>
</clause><clause commented="no" display-inline="no-display-inline" id="IDEED169D0BCE64DECBED3BF65ED792BD9">
<enum>(v)</enum>
<text display-inline="yes-display-inline">has the necessary insurance
coverage (as determined by the Secretary) for any claim by any plan participant
or beneficiary,</text>
</clause></subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID389D3DC9EEA14EB08BAEF998168CEC38">
<enum>(B)</enum>
<text display-inline="yes-display-inline">the plan sponsor or other
person who is a fiduciary in designating a qualified investment adviser reviews
the documents described in paragraph (4) provided by such adviser and
determines that there is no material reason not to enter into an arrangement
for the provision of advice by such qualified investment adviser, and</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID6C2872ABE94645C0B861997F5FF6270C">
<enum>(C)</enum>
<text display-inline="yes-display-inline">the plan sponsor or other
person who is a fiduciary in designating a qualified investment adviser, within
30 days of having information brought to its attention that the investment
adviser is no longer qualified or that a substantial number of plan
participants or beneficiaries have raised concerns about the services being
provided by the investment adviser—</text>
<clause commented="no" display-inline="no-display-inline" id="ID1A34D98ADD064FD5AC0F454832546259">
<enum>(i)</enum>
<text display-inline="yes-display-inline">investigates such
information and concerns, and</text>
</clause><clause commented="no" display-inline="no-display-inline" id="IDE3D5A10C5C724899B5AFE139C3C2D6B6">
<enum>(ii)</enum>
<text display-inline="yes-display-inline">determines that there is no
material reason not to continue the designation of the adviser as a qualified
investment adviser.</text>
</clause></subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID745CF3DE805445D4A9AF1D99DCDB040E">
<enum>(4)</enum>
<header>Documentation</header>
<text display-inline="yes-display-inline">A qualified investment
adviser shall provide the following documents to the plan sponsor or other
person who is a fiduciary in designating the adviser:</text>
<subparagraph commented="no" display-inline="no-display-inline" id="ID9F92C3CD88D54FF0BB1A1829AB41C5C3">
<enum>(A)</enum>
<text display-inline="yes-display-inline">The contract with the plan
sponsor or other person who is a fiduciary for the services to be provided by
the investment adviser to the plan participants and beneficiaries.</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="IDF6345C76EC4C4E56A3E1F2EEB8D24A80">
<enum>(B)</enum>
<text display-inline="yes-display-inline">A disclosure as to any fees
or other compensation that will be received by the investment adviser for the
provision of such investment advice and as to any fees and other compensation
that will be received as a result of a participant’s investment
election.</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID8E85FA1679924CD4AADE4733A7D6682B">
<enum>(C)</enum>
<text display-inline="yes-display-inline">The Uniform Application for
Investment Adviser Registration as filed with the Securities and Exchange
Commission or a substantially similar disclosure application as determined by
and filed with the Secretary.</text>
</subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID39FD0507791F44DBAE70776799FE8E5B">
<enum>(5)</enum>
<header>Treatment as fiduciary</header>
<text display-inline="yes-display-inline">Any qualified investment
adviser that acknowledges it is a fiduciary pursuant to paragraph (3)(A)(ii)
shall be deemed a fiduciary under this part with respect to the provision of
investment advice to a plan participant or beneficiary.</text>
</paragraph></subsection><after-quoted-block></after-quoted-block></quoted-block>
</subsection><subsection commented="no" display-inline="no-display-inline" id="ID63A05EE0ADDA4B73B15250A787E7820D">
<enum>(b)</enum>
<header>Fiduciary liability</header>
<text display-inline="yes-display-inline">Section 404(c)(1)(B) of such
Act is amended by inserting <quote>(other than a qualified investment
adviser)</quote> after <quote>fiduciary</quote>.</text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="ID59126B964BE0492888F081ED7A3FC859">
<enum>(c)</enum>
<header>Effective date</header>
<text display-inline="yes-display-inline">The amendments made by this
section shall apply with respect to investment advisers designated after the
date of the enactment of this Act.</text>
</subsection></section><section commented="no" display-inline="no-display-inline" id="ID40D9B6715E294D0893D06E316A575ED3" section-type="subsequent-section">
<enum>115.</enum>
<header>Treatment of qualified retirement planning services</header>
<subsection commented="no" display-inline="no-display-inline" id="IDDD78280D335B45D597E8D1162E3B5A9E">
<enum>(a)</enum>
<header>In general</header>
<text display-inline="yes-display-inline">Subsection (m) of section 132
of the Internal Revenue Code of 1986 (defining qualified retirement services)
is amended by adding at the end the following new paragraph:</text>
<quoted-block display-inline="no-display-inline" id="IDD5D740E0F2CD47B880D09EF81AAFD2AE" style="OLC">
<paragraph commented="no" display-inline="no-display-inline" id="IDCC9862B9391444B48CB2B4AECA8B5C06">
<enum>(4)</enum>
<header>No constructive receipt</header>
<subparagraph commented="no" display-inline="no-display-inline" id="IDC08C6DA3E6E043E78AC39685725525EA">
<enum>(A)</enum>
<header>In general</header>
<text display-inline="yes-display-inline">No amount shall be included
in the gross income of any employee solely because the employee may choose
between any qualified retirement planning services provided by an eligible
investment advisor and compensation which would otherwise be includible in the
gross income of such employee. The preceding sentence shall apply to highly
compensated employees only if the choice described in such sentence is
available on substantially the same terms to each member of the group of
employees normally provided education and information regarding the employer’s
qualified employer plan.</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID1A60D49C9BED4E0F84C6E7EB42D695A5">
<enum>(B)</enum>
<header>Limitation</header>
<text display-inline="yes-display-inline">The maximum amount which
may be excluded under subparagraph (A) with respect to any employee for any
taxable year shall not exceed $1,000.</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="IDF557FB11DEE748BCB44B79CB3A5828FA">
<enum>(C)</enum>
<header>Eligible investment adviser</header>
<text display-inline="yes-display-inline">For purposes of this
paragraph, the term <term>eligible investment adviser</term> means, with
respect to a plan, a person—</text>
<clause commented="no" display-inline="no-display-inline" id="IDA47DA0401B934BD0AD33EE390531D2F9">
<enum>(i)</enum>
<text display-inline="yes-display-inline">who—</text>
<subclause commented="no" display-inline="no-display-inline" id="IDDE0DD951A56A44D48151DA5F99320D05">
<enum>(I)</enum>
<text display-inline="yes-display-inline">is registered as an
investment adviser under the <act-name parsable-cite="IAA40">Investment
Advisers Act of 1940</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/15/80b-1">15 U.S.C. 80b–1</external-xref> et seq.),</text>
</subclause><subclause commented="no" display-inline="no-display-inline" id="ID8510A45A00F8438CBA516E416482CEE6">
<enum>(II)</enum>
<text display-inline="yes-display-inline">is registered as an
investment adviser under the laws of the State in which such adviser maintains
the principal office and place of business of such adviser, but only if such
State laws are consistent with section 203A of the
<act-name parsable-cite="IAA40">Investment Advisers Act of 1940</act-name>
(<external-xref legal-doc="usc" parsable-cite="usc/15/80b-3a">15 U.S.C.
80b–3a</external-xref>),</text>
</subclause><subclause commented="no" display-inline="no-display-inline" id="ID2C25E0EDDF4A477B9537D97A57C5D968">
<enum>(III)</enum>
<text display-inline="yes-display-inline">is a bank or similar
financial institution referred to in section 408(b)(4),</text>
</subclause><subclause commented="no" display-inline="no-display-inline" id="IDF8AEA86E99E142DDAD031B4D042DB440">
<enum>(IV)</enum>
<text display-inline="yes-display-inline">is an insurance company
qualified to do business under the laws of a State, or</text>
</subclause><subclause commented="no" display-inline="no-display-inline" id="ID49691FB7DC1F4B45A2BFD77AA2AA852A">
<enum>(V)</enum>
<text display-inline="yes-display-inline">is any other comparably
qualified entity which satisfies such criteria as the Secretary determines
appropriate, consistent with the purposes of this subsection, and</text>
</subclause></clause><clause commented="no" display-inline="no-display-inline" id="IDF57DB2468D754062B7A5C97C1136009C">
<enum>(ii)</enum>
<text display-inline="yes-display-inline">who meets the requirements
of subparagraph (D).</text>
</clause></subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID1FCA032F3C3A40DB9E1C231560968AFE">
<enum>(D)</enum>
<header>Adviser requirements</header>
<text display-inline="yes-display-inline">The requirements of this
subparagraph are met if every individual employed (or otherwise compensated) by
a person described in subparagraph (C)(i) who provides investment advice on
behalf of such person to any plan participant or beneficiary is—</text>
<clause commented="no" display-inline="no-display-inline" id="IDCD76CAC9653A4ED7906E43DD3F712B5E">
<enum>(i)</enum>
<text display-inline="yes-display-inline">an individual described in
subclause (I) of subparagraph (C)(i),</text>
</clause><clause commented="no" display-inline="no-display-inline" id="ID669C3FEF6CC842788331ADE592A0F21E">
<enum>(ii)</enum>
<text display-inline="yes-display-inline">an individual described in
subclause (II) of subparagraph (C)(i), but only if such State has an
examination requirement to qualify for registration,</text>
</clause><clause commented="no" display-inline="no-display-inline" id="ID2533414B137C40D897EACFB8C9DBE847">
<enum>(iii)</enum>
<text display-inline="yes-display-inline">registered as a broker or
dealer under the <act-name parsable-cite="SEA34">Securities Exchange Act of
1934</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/15/78a">15
U.S.C. 78a</external-xref> et seq.),</text>
</clause><clause commented="no" display-inline="no-display-inline" id="ID96BFBBB7D1134AF9ABE0FD384B52C98D">
<enum>(iv)</enum>
<text display-inline="yes-display-inline">a registered representative
as described in section 3(a)(18) of the <act-name parsable-cite="SEA34">Securities Exchange Act of 1934</act-name>
(<external-xref legal-doc="usc" parsable-cite="usc/15/78c(a)(18)">15 U.S.C.
78c(a)(18)</external-xref>) or section 202(a)(17) of the
<act-name parsable-cite="IAA40">Investment Advisers Act of 1940</act-name>
(<external-xref legal-doc="usc" parsable-cite="usc/15/80b-2(a)(17)">15 U.S.C.
80b–2(a)(17)</external-xref>), or</text>
</clause><clause commented="no" display-inline="no-display-inline" id="ID56E288CD1F474E8D86323B735DA93E32">
<enum>(v)</enum>
<text display-inline="yes-display-inline">any other comparably
qualified individual who satisfies such criteria as the Secretary determines
appropriate, consistent with the purposes of this paragraph.</text>
</clause></subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID5B1B85314BD046E19897CB06B584BA88">
<enum>(E)</enum>
<header>Termination</header>
<text display-inline="yes-display-inline">This paragraph shall not
apply to taxable years beginning after December 31, 2010.</text>
</subparagraph></paragraph><after-quoted-block></after-quoted-block></quoted-block>
</subsection><subsection commented="no" display-inline="no-display-inline" id="ID252DF0EBC1504F9089AF6D5AD2D933AC">
<enum>(b)</enum>
<header>Conforming amendments</header>
<paragraph commented="no" display-inline="no-display-inline" id="ID33D2B6EE269B454A9350B05CD6EF9EDA">
<enum>(1)</enum>
<text display-inline="yes-display-inline">Section 403(b)(3)(B) of such
Code is amended by inserting <quote>132(m)(4),</quote> after
<quote>132(f)(4),</quote>.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID90D5FDE6558B49798EC907DFA8529874">
<enum>(2)</enum>
<text display-inline="yes-display-inline">Section 414(s)(2) of such
Code is amended by inserting <quote>132(m)(4),</quote> after
<quote>132(f)(4),</quote>.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID395FB09BA37F42C5AC16720B549D28A2">
<enum>(3)</enum>
<text display-inline="yes-display-inline">Section 415(c)(3)(D)(ii) of
such Code is amended by inserting <quote>132(m)(4),</quote> after
<quote>132(f)(4),</quote>.</text>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="IDE462392DCCA04C6B9A9CF40CD0388E2C">
<enum>(c)</enum>
<header>Effective date</header>
<text display-inline="yes-display-inline">The amendments made by this
section shall apply to taxable years beginning after December 31, 2005.</text>
</subsection></section></subtitle><subtitle commented="no" id="id3E37174776AF4385876DE08C2C712F94" style="OLC">
<enum>C</enum>
<header>Protection of pension plan participants</header>
<section commented="no" display-inline="no-display-inline" id="IDF52C9940AF9848BD823817DF230F0A0B" section-type="subsequent-section">
<enum>121.</enum>
<header>Notice to participants or beneficiaries of blackout
periods</header>
<subsection commented="no" display-inline="no-display-inline" id="ID97441D14260F46CAA1CB56E15C467A90">
<enum>(a)</enum>
<header>Amendments of Internal Revenue Code</header>
<paragraph commented="no" display-inline="no-display-inline" id="ID41C69356AD4F45A5929F291CE9B606DF">
<enum>(1)</enum>
<header>Excise tax</header>
<subparagraph commented="no" display-inline="no-display-inline" id="ID0CF049D5B7F7488AA1AC5BCD6BF06861">
<enum>(A)</enum>
<header>In general</header>
<text display-inline="yes-display-inline">Chapter 43 of the Internal
Revenue Code of 1986 (relating to qualified pension, etc., plans), as amended
by this Act, is amended by adding at the end the following new section:</text>
<quoted-block display-inline="no-display-inline" id="ID63E51699E7144DA19077CD49DDF5515C" style="OLC">
<section commented="no" display-inline="no-display-inline" id="ID86418DE5A40D4E62B2F5AD0369277CB3" section-type="subsequent-section">
<enum>4980J.</enum>
<header>Failure of certain defined contribution plans to provide
notice of blackout periods</header>
<subsection commented="no" display-inline="no-display-inline" id="ID5AABE4FAA36A4BF59EE5F0E02E29DEDA">
<enum>(a)</enum>
<header>Imposition of tax</header>
<text display-inline="yes-display-inline">There is hereby imposed a
tax on the failure of any defined contribution plan to which this section
applies to meet the requirements of subsection (e) with respect to any
participant or beneficiary.</text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="ID4E680D2ACA4C4636887374B39C74AEC4">
<enum>(b)</enum>
<header>Amount of tax</header>
<paragraph commented="no" display-inline="no-display-inline" id="IDF8E8949BACF14D8A8E1DDA96DBDA4F3A">
<enum>(1)</enum>
<header>In general</header>
<text display-inline="yes-display-inline">The amount of the tax
imposed by subsection (a) on any failure with respect to any participant or
beneficiary shall be $100 for each day in the noncompliance period with respect
to the failure.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID07D09381C92A415B8E2E28984F074384">
<enum>(2)</enum>
<header>Noncompliance period</header>
<text display-inline="yes-display-inline">For purposes of this
section, the term <term>noncompliance period</term> means, with respect to any
failure, the period beginning on the date the failure first occurs and ending
on the date the notice to which the failure relates is provided or the failure
is otherwise corrected.</text>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="ID8E45CD8C6F65410391DE4EDA61008D32">
<enum>(c)</enum>
<header>Limitations on amount of tax</header>
<paragraph commented="no" display-inline="no-display-inline" id="IDF63B0BA16C6449EA90649E4C5CF61C85">
<enum>(1)</enum>
<header>Tax not to apply where failure not discovered and reasonable
diligence exercised</header>
<text display-inline="yes-display-inline">No tax shall be imposed by
subsection (a) on any failure during any period for which it is established to
the satisfaction of the Secretary that any person subject to liability for tax
under subsection (d) did not know that the failure existed and exercised
reasonable diligence to meet the requirements of subsection (e).</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDB3DD59B91023495B9FE86D4566D8AB29">
<enum>(2)</enum>
<header>Tax not to apply to failures corrected as soon as reasonably
practicable</header>
<text display-inline="yes-display-inline">No tax shall be imposed by
subsection (a) on any failure if—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="ID772C149688634E4894AB3FB48843EE8D">
<enum>(A)</enum>
<text display-inline="yes-display-inline">any person subject to
liability for the tax under subsection (d) exercised reasonable diligence to
meet the requirements of subsection (e), and</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID33A1C0EA4DDD49E08F6372E90D53E619">
<enum>(B)</enum>
<text display-inline="yes-display-inline">such person provides the
notice described in subsection (e) as soon as reasonably practicable after the
first date such person knew, or exercising reasonable diligence should have
known, that such failure existed.</text>
</subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID756D9BD20F9E4A33941F800580BB7552">
<enum>(3)</enum>
<header>Overall limitation for unintentional failures</header>
<subparagraph commented="no" display-inline="no-display-inline" id="IDB4192E0476E44F78BA6928F28D09641F">
<enum>(A)</enum>
<header>In general</header>
<text display-inline="yes-display-inline">If the person subject to
liability for tax under subsection (d) exercised reasonable diligence to meet
the requirements of subsection (e), the tax imposed by subsection (a) for
failures during the taxable year of the employer (or, in the case of a
multiemployer plan, the taxable year of the trust forming part of the plan)
shall not exceed $500,000. For purposes of the preceding sentence, all
multiemployer plans of which the same trust forms a part shall be treated as 1
plan.</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="IDC52D8BE09FD14EA59B2D0F6EACD98F52">
<enum>(B)</enum>
<header>Taxable years in the case of certain controlled
groups</header>
<text display-inline="yes-display-inline">For purposes of this
paragraph, if all persons who are treated as a single employer for purposes of
this section do not have the same taxable year, the taxable years taken into
account shall be determined under principles similar to the principles of
section 1561.</text>
</subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID18130915B7F945478EA348B740714F62">
<enum>(4)</enum>
<header>Waiver by Secretary</header>
<text display-inline="yes-display-inline">In the case of a failure
which is due to reasonable cause and not to willful neglect, the Secretary may
waive part or all of the tax imposed by subsection (a) to the extent that the
payment of such tax would be excessive or otherwise inequitable relative to the
failure involved.</text>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="ID30EAE3C163A5436DA055565400969BC4">
<enum>(d)</enum>
<header>Liability for tax</header>
<text display-inline="yes-display-inline">The following shall be
liable for the tax imposed by subsection (a):</text>
<paragraph commented="no" display-inline="no-display-inline" id="ID2722BB6E86CD42A6B36453A4475FA02D">
<enum>(1)</enum>
<text display-inline="yes-display-inline">In the case of a plan not
described in paragraph (2) or (3), the employer.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDB4BA2240463C459B9E5875CDCB815579">
<enum>(2)</enum>
<text display-inline="yes-display-inline">In the case of a
multiemployer plan, the plan.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDBB2FC71B8DFD4736A623A1920E0174F0">
<enum>(3)</enum>
<text display-inline="yes-display-inline">In the case of an
arrangement described in subsection (e)(1)(B), the person required to provide
the notice under subsection (e).</text>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="ID130C3A8B49B5449BBEDA8CE8B5B65883">
<enum>(e)</enum>
<header>Notice of blackout periods to participant or beneficiary
under defined contribution plan</header>
<paragraph commented="no" display-inline="no-display-inline" id="ID49AB1EFB8913482B927972CBCC0F787B">
<enum>(1)</enum>
<header>In general</header>
<subparagraph commented="no" display-inline="no-display-inline" id="ID354FAA98F1FD4523981A0B7D72462B2F">
<enum>(A)</enum>
<header>Duties of plan administrator</header>
<text display-inline="yes-display-inline">In advance of the
commencement of any blackout period with respect to a defined contribution
plan, the plan administrator shall notify the plan participants and
beneficiaries who are affected by such action in accordance with this
subsection.</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID04AAD0AE12B847D98FF589042BAAFB2F">
<enum>(B)</enum>
<header>Special rule for certain annuities</header>
<text display-inline="yes-display-inline">In the case of an annuity
contract or custodial account described in section 403(b) which is not a plan
established or maintained by the employer, the notice shall be furnished by the
issuer of the contract, the custodian of the account, or such other person as
is specified by the Secretary.</text>
</subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDFC926FAA43F746CC9BEC72D14CC070EB">
<enum>(2)</enum>
<header>Notice requirements</header>
<subparagraph commented="no" display-inline="no-display-inline" id="ID1703FD12995B42028732FA4F62BEAD88">
<enum>(A)</enum>
<header>In general</header>
<text display-inline="yes-display-inline">The notices described in
paragraph (1) shall be written in a manner calculated to be understood by the
average plan participant and shall include—</text>
<clause commented="no" display-inline="no-display-inline" id="ID29CA865B2CD34456B472CB9ADAD84E39">
<enum>(i)</enum>
<text display-inline="yes-display-inline">the reasons for the
blackout period,</text>
</clause><clause commented="no" display-inline="no-display-inline" id="ID0AE90B803FFB4115AE72EEF854C3B619">
<enum>(ii)</enum>
<text display-inline="yes-display-inline">an identification of the
investments and other rights affected,</text>
</clause><clause commented="no" display-inline="no-display-inline" id="ID69FD2E413796446AA5515267CC4A8899">
<enum>(iii)</enum>
<text display-inline="yes-display-inline">the expected beginning date
and length of the blackout period,</text>
</clause><clause commented="no" display-inline="no-display-inline" id="ID800CCE3206AF4DA4AAE8B9ABB53E1386">
<enum>(iv)</enum>
<text display-inline="yes-display-inline">in the case of investments
affected, a statement that the participant or beneficiary should evaluate the
appropriateness of their current investment decisions in light of their
inability to direct or diversify assets credited to their accounts during the
blackout period, and</text>
</clause><clause commented="no" display-inline="no-display-inline" id="ID79245228E0DB4798ADDFD3DBD625CD27">
<enum>(v)</enum>
<text display-inline="yes-display-inline">such other matters as the
Secretary of Labor may require by regulation.</text>
</clause></subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID3DD7361E66EC49C8A0BD04C562F37B37">
<enum>(B)</enum>
<header>Notice to participants and beneficiaries</header>
<text display-inline="yes-display-inline">Except as otherwise
provided in this subsection, notices described in paragraph (1) shall be
furnished to all participants and beneficiaries under the plan to whom the
blackout period applies at least 30 days in advance of the blackout
period.</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID5A4A2818CAAB4893AEF68D9E3A41012D">
<enum>(C)</enum>
<header>Exception to 30-day notice requirement</header>
<text display-inline="yes-display-inline">In any case in
which—</text>
<clause commented="no" display-inline="no-display-inline" id="ID40442A6BE55545E0ABCCCCB66F5C260A">
<enum>(i)</enum>
<text display-inline="yes-display-inline">a deferral of the blackout
period would violate the requirements of subparagraph (A) or (B) of section
404(a)(1) of the <act-name parsable-cite="ERISA">Employee Retirement Income
Security Act of 1974</act-name>, and a fiduciary of the plan reasonably so
determines in writing, or</text>
</clause><clause commented="no" display-inline="no-display-inline" id="ID09126DB9B17A4F0EA96AC3D615C59772">
<enum>(ii)</enum>
<text display-inline="yes-display-inline">the inability to provide
the 30-day advance notice is due to events that were unforeseeable or
circumstances beyond the reasonable control of the plan administrator, and a
fiduciary of the plan reasonably so determines in writing,</text>
</clause><continuation-text commented="no" continuation-text-level="subparagraph">subparagraph (B) shall not apply,
and the notice shall be furnished to all participants and beneficiaries under
the plan to whom the blackout period applies as soon as reasonably possible
under the circumstances unless such a notice in advance of the termination of
the blackout period is impracticable.</continuation-text></subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="IDEC93714F62484A6286CDBA3C632ECF1F">
<enum>(D)</enum>
<header>Written notice</header>
<text display-inline="yes-display-inline">The notice required to be
provided under this subsection shall be in writing, except that such notice may
be in electronic or other form to the extent that such form is reasonably
accessible to the recipient.</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID177AAB3DA1BA45CA839389732B9E24C1">
<enum>(E)</enum>
<header>Notice to issuers of employer securities subject to blackout
period</header>
<text display-inline="yes-display-inline">In the case of any blackout
period in connection with a defined contribution plan, the plan administrator
shall provide timely notice of such blackout period to the issuer of any
employer securities subject to such blackout period.</text>
</subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDE0C1E3C99ADF4CDF85253DFCF7A69547">
<enum>(3)</enum>
<header>Exception for blackout periods with limited
applicability</header>
<text display-inline="yes-display-inline">In any case in which the
blackout period applies only to 1 or more participants or beneficiaries in
connection with a merger, acquisition, divestiture, or similar transaction
involving the plan or plan sponsor and occurs solely in connection with
becoming or ceasing to be a participant or beneficiary under the plan by reason
of such merger, acquisition, divestiture, or transaction, the requirement of
this subsection that the notice be provided to all participants and
beneficiaries shall be treated as met if the notice required under paragraph
(1) is provided to such participants or beneficiaries to whom the blackout
period applies as soon as reasonably practicable.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID7775F241B55E4F36A183F2E5F214057E">
<enum>(4)</enum>
<header>Changes in length of blackout period</header>
<text display-inline="yes-display-inline">If, following the
furnishing of the notice pursuant to this subsection, there is a change in the
beginning date or length of the blackout period (specified in such notice
pursuant to paragraph (2)(A)(iii)), the administrator shall provide affected
participants and beneficiaries notice of the change as soon as reasonably
practicable. In relation to the extended blackout period, such notice shall
meet the requirements of paragraph (2)(D) and shall specify any material change
in the matters referred to in clauses (i) through (v) of paragraph
(2)(A).</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID1883C41581CC482AB853FC3D999CCFD9">
<enum>(5)</enum>
<header>Regulatory exceptions</header>
<text display-inline="yes-display-inline">The Secretary of Labor may
provide by regulation for additional exceptions to the requirements of this
subsection which the Secretary of Labor determines are in the interests of
participants and beneficiaries.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID9C4097429F974F03A2C4380D31733DDF">
<enum>(6)</enum>
<header>Guidance and model notices</header>
<text display-inline="yes-display-inline">The Secretary of Labor
shall issue guidance and model notices which meet the requirements of this
subsection.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDA25E30C3CB124535B2AF656D84156BDF">
<enum>(7)</enum>
<header>Blackout period</header>
<text display-inline="yes-display-inline">For purposes of this
subsection—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="ID2651020A82294EA68D5832E6CAAE0592">
<enum>(A)</enum>
<header>In general</header>
<text display-inline="yes-display-inline">The term <term>blackout
period</term> means, in connection with a defined contribution plan, any period
for which any ability of participants or beneficiaries under the plan, which is
otherwise available under such plan, to direct or diversify assets credited to
their accounts, to obtain loans from the plan, or to obtain distributions from
the plan is temporarily suspended, limited, or restricted, if such suspension,
limitation, or restriction is for any period of more than 3 consecutive
business days.</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID11C2A36A859E420E8F468A76C1C6DA6D">
<enum>(B)</enum>
<header>Exclusions</header>
<text display-inline="yes-display-inline">The term <term>blackout
period</term> does not include a suspension, limitation, or restriction—</text>
<clause commented="no" display-inline="no-display-inline" id="ID8E22069DEDA345C4BBA6270E80115E29">
<enum>(i)</enum>
<text display-inline="yes-display-inline">which occurs by reason of
the application of the securities laws (as defined in section 3(a)(47) of the
<act-name parsable-cite="SEA34">Securities Exchange Act of
1934</act-name>),</text>
</clause><clause commented="no" display-inline="no-display-inline" id="ID915913A05F5941909714C51FCAA9F303">
<enum>(ii)</enum>
<text display-inline="yes-display-inline">which is a change to the
plan which provides for a regularly scheduled suspension, limitation, or
restriction which is disclosed to participants or beneficiaries through any
summary of material modifications, any materials describing specific investment
alternatives under the plan, or any changes thereto, or</text>
</clause><clause commented="no" display-inline="no-display-inline" id="ID2ADB21AA172444E19909D4517E724427">
<enum>(iii)</enum>
<text display-inline="yes-display-inline">which applies only to 1 or
more individuals, each of whom is the participant, an alternate payee (as
defined in section 414(p)(8)), or any other beneficiary pursuant to a qualified
domestic relations order (as defined in section 414(p)(1)(A)).</text>
</clause></subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDD76149F73DD74278833B39D938E68218">
<enum>(8)</enum>
<header>Defined contribution plan to which Section applies</header>
<subparagraph commented="no" display-inline="no-display-inline" id="IDADE7FDB8D89445BAAFCD398CFD4F0C89">
<enum>(A)</enum>
<header>In general</header>
<text display-inline="yes-display-inline">Except as provided in this
paragraph, this section applies to any defined contribution plan described in
clause (i), (ii), or (iv) of section 219(g)(5)(A).</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="IDB2294E7D30A448CBB935DD7F81A8A61E">
<enum>(B)</enum>
<header>Exception for one-participant retirement plan</header>
<text display-inline="yes-display-inline">This section shall not
apply to a one-participant retirement plan (as defined in section
401(a)(35)(E)(iv)).</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="IDCF1CD7D69A0749FC83FC743364394B60">
<enum>(C)</enum>
<header>Exception for governmental and church plans</header>
<text display-inline="yes-display-inline">This section shall not
apply to governmental and church plans. For purposes of this subparagraph, the
terms <term>governmental plan</term> and <term>church plan</term> have the
meanings given such terms by section 414.</text>
</subparagraph></paragraph></subsection></section><after-quoted-block></after-quoted-block></quoted-block>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID0AC6FE8FFAFA40E2B56A3D3A030DC514">
<enum>(B)</enum>
<header>Aggregation</header>
<text display-inline="yes-display-inline">Section 414(t) of such Code,
as amended by this Act, is amended by striking <quote>or 4980I</quote> and
inserting <quote>4980I, or 4980J</quote>.</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="IDA480CD51E5BC4077956E07515FAE504B">
<enum>(C)</enum>
<header>Clerical amendment</header>
<text display-inline="yes-display-inline">The table of sections for
chapter 43 of such Code is amended by adding at the end the following new
item:</text>
<quoted-block display-inline="no-display-inline" id="ID747F56A8673144A6A9311DF4ADDF21FC" style="USC">
<toc regeneration="no-regeneration">
<toc-entry bold="off" level="section">Sec. 4980J. Failure of
applicable defined contribution plan to provide notice of blackout
periods.</toc-entry>
</toc>
<after-quoted-block>.</after-quoted-block></quoted-block>
</subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID5FC5A5EDA5D64766982188B6BF9ED879">
<enum>(2)</enum>
<header>Effective date</header>
<text display-inline="yes-display-inline">The amendments made by this
subsection shall apply to failures after the date of the enactment of this
Act.</text>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="ID89A16D9E30E74C67B89050EA7AFCC100">
<enum>(b)</enum>
<header>Amendments of ERISA</header>
<paragraph commented="no" display-inline="no-display-inline" id="ID9A16DAD3C6BB46238BF4BD6ED47542BA">
<enum>(1)</enum>
<header>In general</header>
<text display-inline="yes-display-inline">
<external-xref legal-doc="act" parsable-cite="ERISA/101(i)">Section
101(i)</external-xref> of the <act-name parsable-cite="ERISA">Employee
Retirement Income Security Act of 1974</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/29/1021(i)">29 U.S.C.
1021(i)</external-xref>) is amended—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="IDC2EBDD6F32ED48C9938D35BA6A123D93">
<enum>(A)</enum>
<text display-inline="yes-display-inline">by striking <quote>the terms
of</quote> in paragraph (7)(A),</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="IDC7D8ECFF42C84ECDB0A908462165A1DC">
<enum>(B)</enum>
<text display-inline="yes-display-inline">by striking clause (i) of
paragraph (8)(B) and inserting:</text>
<quoted-block display-inline="no-display-inline" id="ID0E48621FDD274BC79A15D2253E35F1DC" style="OLC">
<clause commented="no" display-inline="no-display-inline" id="IDD82BC33CACB54FF7B7622D2A61ED9149">
<enum>(i)</enum>
<text display-inline="yes-display-inline">on the first day of the
plan year—</text>
<subclause commented="no" display-inline="no-display-inline" id="ID44ED931D12E64871AA539F8B5734FB6D">
<enum>(I)</enum>
<text display-inline="yes-display-inline">covered only one individual
(or the individual and the individual’s spouse) and the individual owned 100
percent of the plan sponsor (whether or not incorporated), or</text>
</subclause><subclause commented="no" display-inline="no-display-inline" id="ID1D1E94A684644B618CE9E7B1925ED47B">
<enum>(II)</enum>
<text display-inline="yes-display-inline">covered only one or more
partners (or partners and their spouses) in the plan sponsor,</text>
</subclause></clause><after-quoted-block>,</after-quoted-block></quoted-block>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="IDF7386ABFE56748D1AC84BB06238405CE">
<enum>(C)</enum>
<text display-inline="yes-display-inline">by striking
<quote>employer</quote> and <quote>employer’s</quote> in paragraph (8)(B)(iii)
and inserting <quote>individual</quote> and <quote>individual’s</quote>,
respectively,</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID021B7917740A4E9697A8E2B486A505BA">
<enum>(D)</enum>
<text display-inline="yes-display-inline">by striking <quote>leases
employees</quote> in paragraph (8)(B)(v) and inserting <quote>uses the services
of leased employees (within the meaning of section 414(n) of the Internal
Revenue Code of 1986)</quote>, and</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID2DF889A610614E4388F8C2BE20EAC48A">
<enum>(E)</enum>
<text display-inline="yes-display-inline">by adding at the end of
paragraph (8)(B) the following flush sentence:</text>
<quoted-block display-inline="no-display-inline" id="IDA6342CE5251342C18E22666086395EF5" style="OLC">
<quoted-block-continuation-text quoted-block-continuation-text-level="subparagraph">For
purposes of this paragraph, an individual shall be treated as a partner if the
individual is so treated under section 401(a)(35)(E)(iv) of the Internal
Revenue Code of 1986.</quoted-block-continuation-text><after-quoted-block></after-quoted-block></quoted-block>
</subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDB8E274B77FE74F699CD032A4EB2DE007">
<enum>(2)</enum>
<header>Effective date</header>
<text display-inline="yes-display-inline">The amendments made by this
subsection shall take effect as if included in the provisions of section 306 of
<external-xref legal-doc="public-law" parsable-cite="pl/107/204">Public Law
107–204</external-xref> (<external-xref legal-doc="statute-at-large" parsable-cite="stat/116/745">116 Stat. 745</external-xref> et seq.).</text>
</paragraph></subsection></section><section commented="no" display-inline="no-display-inline" id="IDAFB8F38594B849F0BC5300559C42BEF8" section-type="subsequent-section">
<enum>122.</enum>
<header>Allowance of catchup payments</header>
<subsection commented="no" display-inline="no-display-inline" id="IDCA754E6280E44F028FAEA200A23C9D17">
<enum>(a)</enum>
<header>In general</header>
<text display-inline="yes-display-inline">Section 219(b)(5) of the
Internal Revenue Code of 1986 (relating to deductible amount) is amended by
redesignating subparagraph (C) as subparagraph (D) and by inserting after
subparagraph (B) the following new subparagraph:</text>
<quoted-block display-inline="no-display-inline" id="IDB241420289AB4C5AB01AFA0B36A2BCA6" style="OLC">
<subparagraph commented="no" display-inline="no-display-inline" id="ID591E809455A6457891341EA6A7E95D07">
<enum>(C)</enum>
<header>Catchup contributions for certain individuals</header>
<clause commented="no" display-inline="no-display-inline" id="ID55AADE0D500D42D884AFC3686A35A378">
<enum>(i)</enum>
<header>In general</header>
<text display-inline="yes-display-inline">In the case of an eligible
individual who elects to make a qualified retirement contribution in addition
to the deductible amount determined under subparagraph (A)—</text>
<subclause commented="no" display-inline="no-display-inline" id="IDCF91D54112BC4F0C82C916CBAA5F21B4">
<enum>(I)</enum>
<text display-inline="yes-display-inline">the deductible amount for
any taxable year shall be increased by an amount equal to 3 times the
applicable amount determined under subparagraph (B) for such taxable year,
and</text>
</subclause><subclause commented="no" display-inline="no-display-inline" id="ID71453B5B2C33423B9E8DFFA34686538E">
<enum>(II)</enum>
<text display-inline="yes-display-inline">subparagraph (B) shall not
apply.</text>
</subclause></clause><clause commented="no" display-inline="no-display-inline" id="ID2CA8E4B1265544FEB96FF9304096C60A">
<enum>(ii)</enum>
<header>Eligible individual</header>
<text display-inline="yes-display-inline">For purposes of this
subparagraph, the term <term>eligible individual</term> means, with respect to
any taxable year, any individual who was a qualified participant in a qualified
cash or deferred arrangement (as defined in section 401(k)) of an employer
described in clause (ii) under which the employer matched at least 50 percent
of the employee’s contributions to such arrangement with stock of such
employer.</text>
</clause><clause commented="no" display-inline="no-display-inline" id="ID4CC02C2826654A189669EE5875D1AFF4">
<enum>(iii)</enum>
<header>Employer described</header>
<text display-inline="yes-display-inline">An employer is described in
this clause if, in any taxable year preceding the taxable year described in
clause (ii)—</text>
<subclause commented="no" display-inline="no-display-inline" id="ID227F2F14164D4EB4A3CD6E9B978F23AE">
<enum>(I)</enum>
<text display-inline="yes-display-inline">such employer (or any
controlling corporation of such employer) was a debtor in a case under title 11
of the United States Code, or similar Federal or State law, and</text>
</subclause><subclause commented="no" display-inline="no-display-inline" id="ID2F50074539A14D459EEF6ABD6BA5C4A4">
<enum>(II)</enum>
<text display-inline="yes-display-inline">such employer (or any other
person) was subject to an indictment or conviction resulting from business
transactions related to such case.</text>
</subclause></clause><clause commented="no" display-inline="no-display-inline" id="IDBEFFE8B7B7704DCB9E94DDC5187D21B4">
<enum>(iv)</enum>
<header>Qualified participant</header>
<text display-inline="yes-display-inline">For purposes of clause
(ii), the term <term>qualified participant</term> means any eligible individual
who was a participant in the cash or deferred arrangement described in clause
(i) on the date that is 6 months before the filing of the case described in
clause (iii).</text>
</clause><clause commented="no" display-inline="no-display-inline" id="IDA7D471DE9C954B998FADE4355C307D5D">
<enum>(v)</enum>
<header>Termination</header>
<text display-inline="yes-display-inline">This subparagraph shall not
apply to taxable years beginning after December 31, 2009.</text>
</clause></subparagraph><after-quoted-block></after-quoted-block></quoted-block>
</subsection><subsection commented="no" display-inline="no-display-inline" id="id1B33E7C1DBE142B98C2FC5514FFEB6D0">
<enum>(b)</enum>
<header>Effective date</header>
<text display-inline="yes-display-inline">The amendments made by this
section shall apply to taxable years beginning after December 31, 2004.</text>
</subsection></section></subtitle>
<enum>II</enum>
<header>Provisions relating to funding, deductions, and the Pension
Benefit Guaranty Corporation</header>
<subtitle commented="no" id="ID787B5066D3BB4D0ABDBDD27BFBDC036B" style="OLC">
<enum>A</enum>
<header>Replacement of interest rate on 30-Year Treasury
securities</header>
<section commented="no" display-inline="no-display-inline" id="ID62F2C2017E3A46CF8C7FA60E76A32C7D" section-type="subsequent-section">
<enum>201.</enum>
<header>Replacement of 30-Year Treasury rate for purposes of funding
and PBGC premium rates</header>
<subsection commented="no" display-inline="no-display-inline" id="ID23E4EE7ECBAD45AE9DB71507CC6FFAF4">
<enum>(a)</enum>
<header>Amendments of Internal Revenue Code</header>
<paragraph commented="no" display-inline="no-display-inline" id="ID35BAA51ADBA9419F9ABFE38064E6F967">
<enum>(1)</enum>
<header>In general</header>
<text display-inline="yes-display-inline">Section 412(b)(5)(B) of the
Internal Revenue Code of 1986 is amended to read as follows:</text>
<quoted-block display-inline="no-display-inline" id="IDEFBDAE2C0D5948C29954B8F1568F9BC9" style="OLC">
<subparagraph commented="no" display-inline="no-display-inline" id="IDF7C3D223D2454A03BF350632C9399B04">
<enum>(B)</enum>
<header>Determination of current liability</header>
<text display-inline="yes-display-inline">Notwithstanding subsection
(c)(3), a plan’s current liability (including for purposes of determining a
plan’s required contribution under subsection (l)) for any plan year shall be
determined—</text>
<clause commented="no" display-inline="no-display-inline" id="ID8D23AC84BE66419987AD1337A31138B7">
<enum>(i)</enum>
<text display-inline="yes-display-inline">in the case of plan years
beginning in 2006, by using an interest rate determined in accordance with the
rules prescribed under subsection (o)(1),</text>
</clause><clause commented="no" display-inline="no-display-inline" id="ID45BEF4DD9C10461E8E082CC739726A68">
<enum>(ii)</enum>
<text display-inline="yes-display-inline">in the case of plan years
beginning in 2007, 2008, 2009, or 2010, by using the phase-in yield curve
method (as defined in subsection (o)(3)), and</text>
</clause><clause commented="no" display-inline="no-display-inline" id="ID881CF9FCD774441EB73820AEE9AB5FC2">
<enum>(iii)</enum>
<text display-inline="yes-display-inline">in the case of plan years
beginning after 2010, by using the yield curve method (as defined in subsection
(o)(2)).</text>
</clause></subparagraph><after-quoted-block></after-quoted-block></quoted-block>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID598DD82ABD4944889DB41272A9A66E2C">
<enum>(2)</enum>
<header>Rules relating to current liability determinations</header>
<text display-inline="yes-display-inline">Section 412 of such Code is
amended by adding at the end the following new subsection:</text>
<quoted-block display-inline="no-display-inline" id="ID18648FFC461E47919C3793DD17822F47" style="OLC">
<subsection commented="no" display-inline="no-display-inline" id="IDDF75CCBF6EFE4907AECDE4254ABE4FF1">
<enum>(o)</enum>
<header>Rules relating to current liability determinations</header>
<text display-inline="yes-display-inline">For purposes of subsection
(b)(5)(B)—</text>
<paragraph commented="no" display-inline="no-display-inline" id="ID69F0F697406D48DBB111F638344CD3A5">
<enum>(1)</enum>
<header>Rules relating to interest rates for 2006</header>
<subparagraph commented="no" display-inline="no-display-inline" id="ID7110A411574347AD882B4FB50992B196">
<enum>(A)</enum>
<header>Determination of rate</header>
<clause commented="no" display-inline="no-display-inline" id="ID5D5AC52F39124F33A466AC735B7C91A9">
<enum>(i)</enum>
<header>In general</header>
<text display-inline="yes-display-inline">If any rate of interest
used under the plan to determine cost is not within the permissible range, the
plan shall establish a new rate of interest within the permissible
range.</text>
</clause><clause commented="no" display-inline="no-display-inline" id="ID8925CFC587AC4A2FB4CF4F0502B8184F">
<enum>(ii)</enum>
<header>Permissible range</header>
<text display-inline="yes-display-inline">For purposes of clause (i),
the term <term>permissible range</term> means a rate of interest which is not
more than, and not more than 10 percent below, the weighted average of
conservative long-term corporate bond rates during the 4-year period ending on
the last day before the beginning of the plan year.</text>
</clause></subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID5970D2432101459498B99FA4346D5990">
<enum>(B)</enum>
<header>Conservative long-term corporate bond rates</header>
<text display-inline="yes-display-inline">The Secretary shall, by
regulation, prescribe a method for periodically determining conservative
long-term corporate bond rates for purposes of this paragraph. Such rates shall
reflect rates of interest on amounts invested in high-quality, long-term
corporate bonds and shall be based on the use of 1 or more indices, as
determined from time to time by the Secretary.</text>
</subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDB79F0D77AB9F46FC966D9093612ACE9A">
<enum>(2)</enum>
<header>Yield curve method</header>
<text display-inline="yes-display-inline">For purposes of this
subsection, the yield curve method is a method under which current liability is
determined—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="ID1A32FC2E899D43F29ED53D6E6382DD56">
<enum>(A)</enum>
<text display-inline="yes-display-inline">by using interest rates
drawn from a yield curve which is prescribed by the Secretary and which
reflects high-quality corporate bonds, and</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID755039267CA04B57A4B5E9242F03249D">
<enum>(B)</enum>
<text display-inline="yes-display-inline">by matching the timing of
the expected benefit payments under the plan to the interest rates on such
yield curve.</text>
</subparagraph><continuation-text commented="no" continuation-text-level="paragraph">The Secretary shall publish any yield
curve prescribed under this paragraph and the method by which the yield curve
was established.</continuation-text></paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDFD268481FDD04A26B65291DE4CA80F3B">
<enum>(3)</enum>
<header>Phase-In yield curve method</header>
<subparagraph commented="no" display-inline="no-display-inline" id="IDB611287929DE4EAF979BBC0C12AE2445">
<enum>(A)</enum>
<header>In general</header>
<text display-inline="yes-display-inline">The current liability under
the phase-in yield curve method shall be equal to the sum of—</text>
<clause commented="no" display-inline="no-display-inline" id="ID7D014AEA4D144F049F81320CAA6440F8">
<enum>(i)</enum>
<text display-inline="yes-display-inline">the applicable percentage
of current liability determined under the yield curve method described in
paragraph (2), and</text>
</clause><clause commented="no" display-inline="no-display-inline" id="IDAFB14872E5954FA3992A27D3A954B7E4">
<enum>(ii)</enum>
<text display-inline="yes-display-inline">the product of the current
liability determined by using the interest rate rules described in paragraph
(1) and a percentage equal to 100 percent minus the applicable
percentage.</text>
</clause></subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID81F21B0E22B845729E0CE8BBB2F9F2E3">
<enum>(B)</enum>
<header>Applicable percentage</header>
<text display-inline="yes-display-inline">For purposes of
subparagraph (A), the applicable percentage shall be determined in accordance
with the following table:</text>
<table blank-lines-after="0" blank-lines-before="1" line-rules="no-gen" pgwide="1" table-type="subformat">
<tgroup cols="2">
<thead>
<row>
<entry colname="I49">In the case of years</entry>
<entry colname="I50">The applicable</entry>
</row>
<row>
<entry colname="I49">beginning in—</entry>
<entry colname="I50">percentage is—</entry>
</row>
</thead>
<tbody>
<row>
<entry colname="I51">2007</entry>
<entry colname="I52">20 </entry>
</row>
<row>
<entry colname="I51">2008</entry>
<entry colname="I52">40 </entry>
</row>
<row>
<entry colname="I51">2009</entry>
<entry colname="I52">60 </entry>
</row>
<row>
<entry colname="I51">2010</entry>
<entry colname="I52">80.</entry>
</row>
</tbody>
</tgroup>
</table>
</subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID984B6AFE15A64A2588FA1E7877FC5C35">
<enum>(4)</enum>
<header>Simplified methods</header>
<subparagraph commented="no" display-inline="no-display-inline" id="IDF0992F15F8374CDC92AB49FAC48F5B2B">
<enum>(A)</enum>
<header>Establishment by Secretary</header>
<text display-inline="yes-display-inline">The Secretary shall
prescribe 1 or more simplified methods under which current liability can be
determined by substituting any such method for the yield curve method for
purposes of paragraphs (2) and (3).</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="IDFA638295FE5A43FDAE021415A735C050">
<enum>(B)</enum>
<header>Use of simplified method</header>
<text display-inline="yes-display-inline">A plan (other than a
multiemployer plan) may use a simplified method established under subparagraph
(A) if, on each day during the preceding plan year, the plan had no more than
100 participants. The aggregation rule under subsection (l)(6)(C) shall apply
for purposes of this subparagraph.</text>
</subparagraph></paragraph></subsection><after-quoted-block></after-quoted-block></quoted-block>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDEB6437C8BE994ABAAD0EC79881A57C48">
<enum>(3)</enum>
<header>Additional funding requirements</header>
<text display-inline="yes-display-inline">Section 412(l)(7)(C)(i) of
such Code is amended to read as follows:</text>
<quoted-block display-inline="no-display-inline" id="ID143335B1C4FC47BFB99185C9DBF5F8A8" style="OLC">
<clause commented="no" display-inline="no-display-inline" id="ID620D895B8DB74657A8328EB4F8136F08">
<enum>(i)</enum>
<header>Current liability</header>
<text display-inline="yes-display-inline">Current liability under
this subsection for any plan year shall be determined under the rules or method
provided under subsection (b)(5) for the plan year.</text>
</clause><after-quoted-block></after-quoted-block></quoted-block>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="ID5FBD17B324F24D91B6A885F24FE46ABC">
<enum>(b)</enum>
<header>Amendments of ERISA</header>
<paragraph commented="no" display-inline="no-display-inline" id="ID49F1A89649734157B2B0C40115B5E764">
<enum>(1)</enum>
<header>In general</header>
<text display-inline="yes-display-inline">
<external-xref legal-doc="act" parsable-cite="ERISA/302(b)(5)(B)">Section
302(b)(5)(B)</external-xref> of the <act-name parsable-cite="ERISA">Employee
Retirement Income Security Act of 1974</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/29/1082(b)(5)(B)">29 U.S.C.
1082(b)(5)(B)</external-xref>) is amended to read as follows:</text>
<quoted-block act-name="Employee Retirement Income Security Act of 1974" display-inline="no-display-inline" id="ID34D7823FB75B465D9A4FDEE4D7B968FA" style="OLC">
<subparagraph commented="no" display-inline="no-display-inline" id="IDD4F1885516F243CD91AC24D1078F0D5B">
<enum>(B)</enum>
<header>Determination of current liability</header>
<text display-inline="yes-display-inline">Notwithstanding subsection
(c)(3), a plan’s current liability (including for purposes of determining a
plan’s required contribution under subsection (d)) for any plan year shall be
determined—</text>
<clause commented="no" display-inline="no-display-inline" id="ID44F1DC0F2BDF4C9ABD6B8BDCB0D5F667">
<enum>(i)</enum>
<text display-inline="yes-display-inline">in the case of plan years
beginning in 2006, by using an interest rate determined in accordance with the
rules prescribed under subsection (h)(1),</text>
</clause><clause commented="no" display-inline="no-display-inline" id="ID8B75A3A92D7D42E6B8875013CE777DF3">
<enum>(ii)</enum>
<text display-inline="yes-display-inline">in the case of plan years
beginning in 2007, 2008, 2009, or 2010, by using the phase-in yield curve
method (as defined in subsection (h)(3)), and</text>
</clause><clause commented="no" display-inline="no-display-inline" id="ID69C206152B814D5A8EA994CFF3764CD3">
<enum>(iii)</enum>
<text display-inline="yes-display-inline">in the case of plan years
beginning after 2010, by using the yield curve method (as defined in subsection
(h)(2)).</text>
</clause></subparagraph><after-quoted-block></after-quoted-block></quoted-block>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID79E38810927D4479B2EC6832E307E573">
<enum>(2)</enum>
<header>Rules relating to current liability determinations</header>
<text display-inline="yes-display-inline">Section 302 of such Act
(<external-xref legal-doc="usc" parsable-cite="usc/29/1082">29 U.S.C.
1082</external-xref>) is amended by redesignating subsection (h) as subsection
(i) and by inserting after subsection (g) the following new subsection:</text>
<quoted-block display-inline="no-display-inline" id="ID8C5BB381B8414C5CB2428D750F5D5333" style="OLC">
<subsection commented="no" display-inline="no-display-inline" id="ID99734AD886734D38A8070464387A218D">
<enum>(h)</enum>
<header>Rules relating to current liability determinations</header>
<text display-inline="yes-display-inline">For purposes of subsection
(b)(5)(B)—</text>
<paragraph commented="no" display-inline="no-display-inline" id="ID4D0FBBC02BB74AFF9776EA0930E9C803">
<enum>(1)</enum>
<header>Rules relating to interest rates for 2006</header>
<subparagraph commented="no" display-inline="no-display-inline" id="ID58AC865DE06B449091F71A1513270E1E">
<enum>(A)</enum>
<header>Determination of rate</header>
<clause commented="no" display-inline="no-display-inline" id="IDA31FD84E511346E9B839983C5A86CBEC">
<enum>(i)</enum>
<header>In general</header>
<text display-inline="yes-display-inline">If any rate of interest
used under the plan to determine cost is not within the permissible range, the
plan shall establish a new rate of interest within the permissible
range.</text>
</clause><clause commented="no" display-inline="no-display-inline" id="ID4EA43E7C3D4347148FA859FBCAD10B01">
<enum>(ii)</enum>
<header>Permissible range</header>
<text display-inline="yes-display-inline">For purposes of clause (i),
the term <term>permissible range</term> means a rate of interest which is not
more than, and not more than 10 percent below, the weighted average of
conservative long-term corporate bond rates during the 4-year period ending on
the last day before the beginning of the plan year.</text>
</clause></subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="IDFEF84E5626084EEEB6DB1F3FFDA7FF2E">
<enum>(B)</enum>
<header>Conservative long-term corporate bond rates</header>
<text display-inline="yes-display-inline">The Secretary of the
Treasury shall, by regulation, prescribe a method for periodically determining
conservative long-term corporate bond rates for purposes of this paragraph.
Such rates shall reflect rates of interest on amounts invested in high-quality,
long-term corporate bonds and shall be based on the use of 1 or more indices,
as determined from time to time by the Secretary of the Treasury.</text>
</subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID16C6BD29B8354DED83F528963C7DFD17">
<enum>(2)</enum>
<header>Yield curve method</header>
<text display-inline="yes-display-inline">For purposes of this
subsection, the yield curve method is a method under which current liability is
determined—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="ID670E5343A2FD4F4BB19C5F9C3139FA7E">
<enum>(A)</enum>
<text display-inline="yes-display-inline">by using interest rates
drawn from a yield curve which is prescribed by the Secretary of the Treasury
and which reflects high-quality corporate bonds, and</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID1FB9341B0F154615A96DE920FAD4A38D">
<enum>(B)</enum>
<text display-inline="yes-display-inline">by matching the timing of
the expected benefit payments under the plan to the interest rates on such
yield curve.</text>
</subparagraph><continuation-text commented="no" continuation-text-level="paragraph">The Secretary of the Treasury shall
publish any yield curve prescribed under this paragraph and the method by which
the yield curve was established.</continuation-text></paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID36242D36703740BE9D1AF33DAEAD8C7F">
<enum>(3)</enum>
<header>Phase-In yield curve method</header>
<subparagraph commented="no" display-inline="no-display-inline" id="IDF2A2E065AAD24A0CA1C8955CBBCB2426">
<enum>(A)</enum>
<header>In general</header>
<text display-inline="yes-display-inline">The current liability under
the phase-in yield curve method shall be equal to the sum of—</text>
<clause commented="no" display-inline="no-display-inline" id="ID949C63FA082240C48F12E2B03089D7FD">
<enum>(i)</enum>
<text display-inline="yes-display-inline">the applicable percentage
of current liability determined under the yield curve method described in
paragraph (2), and</text>
</clause><clause commented="no" display-inline="no-display-inline" id="IDE64D6E8F02B14461BD0451BD83082310">
<enum>(ii)</enum>
<text display-inline="yes-display-inline">the product of the current
liability determined by using the interest rate rules described in paragraph
(1) and a percentage equal to 100 percent minus the applicable
percentage.</text>
</clause></subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="IDC845F3FCD4134AD0BBE83CB344508960">
<enum>(B)</enum>
<header>Applicable percentage</header>
<text display-inline="yes-display-inline">For purposes of
subparagraph (A), the applicable percentage shall be determined in accordance
with the following table:</text>
<table blank-lines-after="0" blank-lines-before="1" line-rules="no-gen" table-type="subformat">
<tgroup cols="2">
<thead>
<row>
<entry colname="I49">In the case of years</entry>
<entry colname="I50">The applicable</entry>
</row>
<row>
<entry colname="I49">beginning in—</entry>
<entry colname="I50">percentage is—</entry>
</row>
</thead>
<tbody>
<row>
<entry colname="I51">2007</entry>
<entry colname="I52">20 </entry>
</row>
<row>
<entry colname="I51">2008</entry>
<entry colname="I52">40 </entry>
</row>
<row>
<entry colname="I51">2009</entry>
<entry colname="I52">60 </entry>
</row>
<row>
<entry colname="I51">2010</entry>
<entry colname="I52">80.</entry>
</row>
</tbody>
</tgroup>
</table>
</subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID6A9BEFB174A743AFB111EEBAFDFC347F">
<enum>(4)</enum>
<header>Simplified methods</header>
<subparagraph commented="no" display-inline="no-display-inline" id="IDC68D8B16E14348DCBF44D0DE6A3D59C4">
<enum>(A)</enum>
<header>Establishment by Secretary</header>
<text display-inline="yes-display-inline">The Secretary of the
Treasury shall prescribe 1 or more simplified methods under which current
liability can be determined by substituting any such method for the yield curve
method for purposes of paragraphs (2) and (3).</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="IDAE95BF0465E74D1DB2FEA607949C65DF">
<enum>(B)</enum>
<header>Use of simplified method</header>
<text display-inline="yes-display-inline">A plan (other than a
multiemployer plan) may use a simplified method established under subparagraph
(A) if, on each day during the preceding plan year, the plan had no more than
100 participants. The aggregation rule under subsection (d)(6)(C) shall apply
for purposes of this subparagraph.</text>
</subparagraph></paragraph></subsection><after-quoted-block></after-quoted-block></quoted-block>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID59A357805A7241D58AB8EB3C93389E38">
<enum>(3)</enum>
<header>Additional funding requirements</header>
<text display-inline="yes-display-inline">Section 302(d)(7)(C)(i) of
such Act (<external-xref legal-doc="usc" parsable-cite="usc/29/1082(d)(7)(C)(i)">29 U.S.C.
1082(d)(7)(C)(i)</external-xref>) is amended to read as follows:</text>
<quoted-block display-inline="no-display-inline" id="IDD63014D8B0A64D7BB030E08A8C992683" style="OLC">
<clause commented="no" display-inline="no-display-inline" id="ID08FC03557CAB4CA89F151D9C0ADED0FD">
<enum>(i)</enum>
<header>Current liability</header>
<text display-inline="yes-display-inline">Current liability under
this subsection for any plan year shall be determined under the rules or method
provided under subsection (b)(5) for the plan year.</text>
</clause><after-quoted-block></after-quoted-block></quoted-block>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID9498BB190079483C84BF77DF7370CFEF">
<enum>(4)</enum>
<header>PBGC premium rates</header>
<subparagraph commented="no" display-inline="no-display-inline" id="IDDC616A89A44B46BD9A03B669E57C4D97">
<enum>(A)</enum>
<header>In general</header>
<text display-inline="yes-display-inline">Section
4006(a)(3)(E)(iii)(II) of such Act (<external-xref legal-doc="usc" parsable-cite="usc/29/1306(a)(3)(E)(iii)(II)">29 U.S.C.
1306(a)(3)(E)(iii)(II)</external-xref>) is amended to read as follows:</text>
<quoted-block display-inline="no-display-inline" id="IDF0EDDB67A9274222B67785F8A90DCE29" style="OLC">
<subclause commented="no" display-inline="no-display-inline" id="ID202BCB9011F54704966ADFFA78625427">
<enum>(II)</enum>
<text display-inline="yes-display-inline">For purposes of determining
unfunded current liability under subclause (I), current liability for any plan
year shall be determined under the rules or method provided under section
302(b)(5) for the plan year, except that for purposes of plan years beginning
in 2006, the interest rate used shall be the conservative long-term corporate
bond rate for the month preceding the month in which the plan year begins. For
purposes of the preceding sentence, a plan may, in lieu of the yield curve
method, use a simplified method under section 302(h)(4) in applying paragraph
(2) or (3) of section 302(h).</text>
</subclause><after-quoted-block></after-quoted-block></quoted-block>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID651FA5719A07476886FDBB6BB75C5E84">
<enum>(B)</enum>
<header>Conforming amendments</header>
<text display-inline="yes-display-inline">Section 4006(a)(3)(E)(iii) of
such Act (<external-xref legal-doc="usc" parsable-cite="usc/29/1306(a)(3)(E)(iii)">29 U.S.C.
1306(a)(3)(E)(iii)</external-xref>) is amended by striking subclauses (III),
(IV), and (V).</text>
</subparagraph></paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="ID750AD738CF5D4AD4A31F7BF4BD1E18EF">
<enum>(c)</enum>
<header>Conforming changes regarding quarterly contributions</header>
<paragraph commented="no" display-inline="no-display-inline" id="ID903D1C7EBFDD4911BB0031B84AC33E4F">
<enum>(1)</enum>
<header>Amendment of Internal Revenue Code</header>
<text display-inline="yes-display-inline">Section 412(m)(1)(B) of the
Internal Revenue Code of 1986 (relating to quarterly contributions) is amended
by striking <quote>(including adjustments under subsection
(b)(5)(B))</quote>.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDC2DD1E019FEB47A2BE7A86AA48456F44">
<enum>(2)</enum>
<header>Amendment of ERISA</header>
<text display-inline="yes-display-inline">
<external-xref legal-doc="act" parsable-cite="ERISA/302(e)(1)(B)">Section
302(e)(1)(B)</external-xref> of the <act-name parsable-cite="ERISA">Employee
Retirement Income Security Act of 1974</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/29/1082(e)(1)(B)">29 U.S.C.
1082(e)(1)(B)</external-xref>) is amended by striking <quote>(including
adjustments under subsection (b)(5)(B))</quote>.</text>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="IDEED7638C4F42425095071E78CB4B64AC">
<enum>(d)</enum>
<header>Effective dates</header>
<paragraph commented="no" display-inline="no-display-inline" id="IDA1F8FE3FC9184EF09B2A6130377A9C7D">
<enum>(1)</enum>
<header>In general</header>
<text display-inline="yes-display-inline">Except as provided in
paragraphs (2) and (3), the amendments made by this section shall apply to plan
years beginning after December 31, 2004</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDC3708068C537479789BE4B49FB83E503">
<enum>(2)</enum>
<header>Lookback rules</header>
<text display-inline="yes-display-inline">For purposes of applying
subsections (d)(9)(B) and (e)(1) of section 302 of the
<act-name parsable-cite="ERISA">Employee Retirement Income Security Act of
1974</act-name> and subsections (l)(9)(B) and (m)(1) of section 412 of the
Internal Revenue Code of 1986 to plan years beginning after December 31, 2004,
the amendments made by this section may be applied as if such amendments had
been in effect for all prior plan years. The Secretary of the Treasury may
prescribe simplified assumptions which may be used in applying the amendments
made by this section to such prior plan years.</text>
</paragraph></subsection></section><section commented="no" display-inline="no-display-inline" id="IDCA6B17CC4D964D77BA98210331AFE1EE" section-type="subsequent-section">
<enum>202.</enum>
<header>Replacement of 30-Year Treasury rate for calculating lump-sum
distributions</header>
<subsection commented="no" display-inline="no-display-inline" id="ID7EC34B7CFA094E1F8A4991799FBA5CC1">
<enum>(a)</enum>
<header>Amendments of Internal Revenue Code</header>
<text display-inline="yes-display-inline">Section 417(e)(3)(A) of the
Internal Revenue Code of 1986 (relating to determination of present value) is
amended—</text>
<paragraph commented="no" display-inline="no-display-inline" id="IDEA61A8251C6F40F39910687E7B75F52F">
<enum>(1)</enum>
<text display-inline="yes-display-inline">by striking <quote>and the
applicable interest rate.</quote> in clause (i) and inserting</text>
<quoted-block display-inline="yes-display-inline" id="ID85FD7204E4504F4F9FEA5AC09B191658" style="OLC">
<text>and by using—</text><subclause commented="no" display-inline="no-display-inline" id="ID54CE6F5AB5CF49FE80C9E3233E852D0F">
<enum>(I)</enum>
<text display-inline="yes-display-inline">the phase-in yield curve
method in the case of plan years beginning in 2007, 2008, 2009, or 2010,
and</text>
</subclause><subclause commented="no" display-inline="no-display-inline" id="ID62F9D2E1B93844F094CA4DE79F75D134">
<enum>(II)</enum>
<text display-inline="yes-display-inline">the yield curve method for
years beginning after 2010.</text>
</subclause><after-quoted-block>,
and</after-quoted-block></quoted-block>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDAD40FA68E2134F67BABA681840AA6E17">
<enum>(2)</enum>
<text display-inline="yes-display-inline">by striking subclause (II) of
clause (ii) and inserting:</text>
<quoted-block display-inline="no-display-inline" id="ID950324F622034F4B9AE504A97AE2A5E5" style="OLC">
<subclause commented="no" display-inline="no-display-inline" id="ID809458032C7A4508AA069D3DDF598E8E">
<enum>(II)</enum>
<header>Yield curve methods</header>
<text display-inline="yes-display-inline">The terms <term>yield curve
method</term> and <term>phase-in yield curve method</term> have the meanings
given such terms by paragraphs (2) and (3) of section 412(o), respectively,
except that each such paragraph shall be applied by substituting <quote>present
value</quote> for <quote>current liability</quote> and in applying paragraph
(3)(A)(ii) of section 412(o), the annual rate of interest on 30-year Treasury
securities shall be substituted for the interest rate under section 412(o)(1).
A plan may, in lieu of the yield curve method, use a simplified method under
section 412(o)(4) for purposes of applying such paragraphs.</text>
</subclause><after-quoted-block></after-quoted-block></quoted-block>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="ID94B87ED6FFCE4059AE19E763C2EB5092">
<enum>(b)</enum>
<header>Amendments of ERISA</header>
<text display-inline="yes-display-inline">
<external-xref legal-doc="act" parsable-cite="ERISA/205(g)(3)(A)">Section
205(g)(3)(A)</external-xref> of the <act-name parsable-cite="ERISA">Employee
Retirement Income Security Act of 1974</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/29/1055(g)(3)">29 U.S.C.
1055(g)(3)</external-xref>) is amended—</text>
<paragraph commented="no" display-inline="no-display-inline" id="ID7B9B0B45021D469BAC3E1794FDF56002">
<enum>(1)</enum>
<text display-inline="yes-display-inline">by striking <quote>and the
applicable interest rate.</quote> in clause (i) and inserting</text>
<quoted-block display-inline="yes-display-inline" id="ID8CD82B2C2695443AAD241CCF98AC75BA" style="OLC">
<text>and by using—</text><subclause commented="no" display-inline="no-display-inline" id="IDE176F6A8120E480EA038224D8B3D2215">
<enum>(I)</enum>
<text display-inline="yes-display-inline">the phase-in yield curve
method in the case of plan years beginning in 2007, 2008, 2009, or 2010,
and</text>
</subclause><subclause commented="no" display-inline="no-display-inline" id="IDCF9FC3F609804212868E2D3E78A613FA">
<enum>(II)</enum>
<text display-inline="yes-display-inline">the yield curve method for
years beginning after 2010.</text>
</subclause><after-quoted-block>,
and</after-quoted-block></quoted-block>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID53C5DEB3FB594F4BBE322C0DCFAD4381">
<enum>(2)</enum>
<text display-inline="yes-display-inline">by striking subclause (II) of
clause (ii) and inserting:</text>
<quoted-block display-inline="no-display-inline" id="ID8EEB0E589BE5485BB40FD1FBDB94EA27" style="OLC">
<subclause commented="no" display-inline="no-display-inline" id="ID6180A36936D443B4A4F0F6F19BE21BE8">
<enum>(II)</enum>
<header>Yield curve methods</header>
<text display-inline="yes-display-inline">The terms <term>yield curve
method</term> and <term>phase-in yield curve method</term> have the meanings
given such terms by paragraphs (2) and (3) of section 302(h), respectively,
except that each such paragraph shall be applied by substituting <quote>present
value</quote> for <quote>current liability</quote> and in applying paragraph
(3)(A)(ii) of section 302(h), the annual rate of interest on 30-year Treasury
securities shall be substituted for the interest rate under section 302(h)(1).
A plan may, in lieu of the yield curve method, use a simplified method under
section 302(h)(4) for purposes of applying such paragraphs.</text>
</subclause><after-quoted-block></after-quoted-block></quoted-block>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="ID7B4782E7C30D4059AA7C6C490AFFF0A3">
<enum>(c)</enum>
<header>Effective dates</header>
<paragraph commented="no" display-inline="no-display-inline" id="ID793A57DE7B4B494BA48F96E08712669F">
<enum>(1)</enum>
<header>In general</header>
<text display-inline="yes-display-inline">The amendments made by this
section shall apply to plan years beginning after December 31, 2006.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDCBC0CFCE61044F4FA1F195FBD3748D51">
<enum>(2)</enum>
<header>Special rule for certain optional benefits</header>
<text display-inline="yes-display-inline">If—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="IDC4FB05AB4307425FB29FB024CED77710">
<enum>(A)</enum>
<text display-inline="yes-display-inline">for the last plan year of a
plan beginning in 2003, the plan provides that the applicable interest rate
under section 417(e)(3) of the Internal Revenue Code of 1986 and section
205(g)(3) of <act-name parsable-cite="ERISA">Employee Retirement Income
Security Act of 1974</act-name> shall be used for purposes of determining the
amount of a benefit (other than the accrued benefit) to which such sections
417(e)(3) and 205(g)(3) do not apply, and</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID0AC7F4B76C5046DEB3D2C04C9C325654">
<enum>(B)</enum>
<text display-inline="yes-display-inline">such plan is amended to
provide that a rate other than the applicable interest rate shall be used for
such purposes and the first plan year for which such amendment is effective
begins no later than January 1, 2007,</text>
</subparagraph><continuation-text commented="no" continuation-text-level="paragraph">such plan shall not fail to meet the
requirements of section 411(d)(6) of the Internal Revenue Code of 1986 and
section 204(g) of <act-name parsable-cite="ERISA">Employee Retirement Income
Security Act of 1974</act-name> by reason of such amendment.</continuation-text></paragraph></subsection></section><section commented="no" display-inline="no-display-inline" id="IDAF9F38E66AEA42C8ABF8D867DE1A844A" section-type="subsequent-section">
<enum>203.</enum>
<header>Section <enum-in-header>415</enum-in-header> limitation on
defined benefit plans</header>
<subsection commented="no" display-inline="no-display-inline" id="ID8088173E9B744F7AA315B312F4DA972B">
<enum>(a)</enum>
<header>In general</header>
<text display-inline="yes-display-inline">Section 415(b)(2)(E)(ii) of
the Internal Revenue Code of 1986 (relating to limitation on certain
assumptions) is amended to read as follows:</text>
<quoted-block display-inline="no-display-inline" id="ID1442A168BD9E41399F7904B4F3995473" style="OLC">
<clause commented="no" display-inline="no-display-inline" id="IDF729D5942E6848AB9A1D87A1C60A8A6C">
<enum>(ii)</enum>
<text display-inline="yes-display-inline">For purposes of adjusting
any benefit under subparagraph (B) for any form of benefit subject to section
417(e)(3), <quote>5.5 percent</quote> shall be substituted for <quote>5
percent</quote> in clause (i).</text>
</clause><after-quoted-block></after-quoted-block></quoted-block>
</subsection><subsection commented="no" display-inline="no-display-inline" id="IDF3E9DFEF01AC40B48775B3E648262642">
<enum>(b)</enum>
<header>Effective date</header>
<text display-inline="yes-display-inline">The amendment made by this
section shall apply to years beginning after December 31, 2005.</text>
</subsection></section></subtitle><subtitle commented="no" id="id7CB621902F5F4AD4986024CC0FA777F9" style="OLC">
<enum>B</enum>
<header>Provisions relating to pension plan funding and
deductions</header>
<section commented="no" display-inline="no-display-inline" id="ID5A36C4661B0C44B6BB8294B62C88AF51" section-type="subsequent-section">
<enum>211.</enum>
<header>Deduction limits for plan contributions</header>
<subsection commented="no" display-inline="no-display-inline" id="ID2A7D839F46E24666AC6AF1BC097B28A8">
<enum>(a)</enum>
<header>In general</header>
<text display-inline="yes-display-inline">Clause (i) of section
404(a)(1)(D) of the Internal Revenue Code of 1986 (relating to special rule in
case of certain plans) is amended by striking <quote>section 412(l)</quote> and
inserting <quote>section 412(l)(8)(A), except that section 412(l)(8)(A) shall
be applied for purposes of this clause by substituting <quote>130 percent of
current liability</quote> for <quote>the current liability</quote> in clause
(i).</quote></text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="ID650084FA14024086A6D039C1647C0114">
<enum>(b)</enum>
<header>Conforming amendment</header>
<text display-inline="yes-display-inline">Section 404(a)(1) of the
Internal Revenue Code of 1986 is amended by striking subparagraph (F).</text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="ID01CE57C9A17149FD8D9EF7F7E650097E">
<enum>(c)</enum>
<header>Effective date</header>
<text display-inline="yes-display-inline">The amendments made by this
section shall apply to years beginning after December 31, 2005.</text>
</subsection></section><section commented="no" display-inline="no-display-inline" id="IDBFD4E58A984D499DB6BEBB598A2ED60C" section-type="subsequent-section">
<enum>212.</enum>
<header>Benefit limitations for certain financially distressed
plans</header>
<subsection commented="no" display-inline="no-display-inline" id="ID747D701146DA4C59942D0DA242BEDD44">
<enum>(a)</enum>
<header>Internal Revenue Code of 1986</header>
<text display-inline="yes-display-inline">Section 401(a) of the
Internal Revenue Code of 1986 (relating to qualified pension, profit-sharing,
and stock bonus plans), as amended by this Act, is amended by adding after
paragraph (35) the following new paragraph:</text>
<quoted-block display-inline="no-display-inline" id="ID6BBA234047FD49D7899E3C607EF9D265" style="OLC">
<paragraph commented="no" display-inline="no-display-inline" id="ID686044BE65884CA3A9C710FC4CD7B9D7">
<enum>(36)</enum>
<header>Benefit limitations for certain financially distressed
plans</header>
<subparagraph commented="no" display-inline="no-display-inline" id="ID4EC0814BF4344219AEFA8DC4FA6D0D97">
<enum>(A)</enum>
<header>In general</header>
<text display-inline="yes-display-inline">Notwithstanding any other
provision of this part, if a defined benefit plan to which the requirements of
section 412(l) apply is a financially distressed plan for any plan year, a
trust forming part of the plan shall not be treated as a qualified trust under
this section unless—</text>
<clause commented="no" display-inline="no-display-inline" id="IDF8B12075BD3D4DD3B63A57690EB4FF3C">
<enum>(i)</enum>
<text display-inline="yes-display-inline">no amendment to the plan
takes effect during the plan year if such amendment increases liabilities of
the plan by reason of increases in benefits, any change in the accrual of
benefits, or any change in the rate at which benefits become
nonforfeitable,</text>
</clause><clause commented="no" display-inline="no-display-inline" id="ID90FBE5DCBE874464AAC4936F92FD6D28">
<enum>(ii)</enum>
<text display-inline="yes-display-inline">notwithstanding any other
provision of the plan—</text>
<subclause commented="no" display-inline="no-display-inline" id="ID1C34898C86514CAB910CCB7E7B1B9BE9">
<enum>(I)</enum>
<text display-inline="yes-display-inline">the accrued benefit, any
death or disability benefit, and any social security supplement described in
the last sentence of section 411(a)(9) of each participant are frozen at the
amount of such benefit or supplement as of the end of the preceding plan year,
determined without regard to any plan amendment adopted during the preceding
plan year which increased any such benefit or supplement and determined after
the application of this subclause, and</text>
</subclause><subclause commented="no" display-inline="no-display-inline" id="ID9C9B1ADE852D4334A066B5BAAACF3739">
<enum>(II)</enum>
<text display-inline="yes-display-inline">all other benefits provided
under the plan are eliminated,</text>
</subclause><continuation-text commented="no" continuation-text-level="clause">but only to the extent the freezing or
elimination of such benefits would have been permitted under section 411(d)(6)
if they had been implemented by a plan amendment adopted at the end of the
preceding plan year, and</continuation-text></clause><clause commented="no" display-inline="no-display-inline" id="ID10C6B1FAE06F4A6CA70493975C6948A1">
<enum>(iii)</enum>
<text display-inline="yes-display-inline">no payments described in
paragraph (32)(B) are made to any participant or beneficiary whose annuity
starting date occurs during the plan year.</text>
</clause><continuation-text commented="no" continuation-text-level="subparagraph">Clause (iii) shall apply to any
plan year beginning after such plan year and before the 1st plan year following
such plan year for which the plan is not a financially distressed plan.</continuation-text></subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID9757CFD480084F75BAA60F17EA587EC7">
<enum>(B)</enum>
<header>Special rules if funding increases to at least 50
percent</header>
<text display-inline="yes-display-inline">If a plan is a financially
distressed plan for any plan year but the funded current liability percentage
as of the beginning of the preceding plan year is at least 50 percent—</text>
<clause commented="no" display-inline="no-display-inline" id="ID6F6F42B3464A41E18E447AE8D887D1BB">
<enum>(i)</enum>
<text display-inline="yes-display-inline">an amendment described in
subparagraph (A)(i) may take effect but only if the funded current liability
percentage as of the end of the plan year is projected (taking into the account
the effect of the amendment) to be at least 50 percent, and</text>
</clause><clause commented="no" display-inline="no-display-inline" id="ID7015EF92FE7E4F8DB82724EF7E66733B">
<enum>(ii)</enum>
<text display-inline="yes-display-inline">the requirements of
subparagraph (A)(ii) shall not apply with respect to the plan year or any
preceding plan year.</text>
</clause></subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID4C5CAD8737CE4FAB9BE17AA65E349D5E">
<enum>(C)</enum>
<header>Special rules</header>
<text display-inline="yes-display-inline">For purposes of this
paragraph—</text>
<clause commented="no" display-inline="no-display-inline" id="IDE2975007BB29498EAB956BAC1B2AC9DC">
<enum>(i)</enum>
<header>Impermissible amendments</header>
<text display-inline="yes-display-inline">If a plan adopts an
amendment in violation of subparagraph (A)(i) or (B)(i), the provisions of the
plan shall be applied without regard to the amendment.</text>
</clause><clause commented="no" display-inline="no-display-inline" id="ID04D3186CD2E345B4A44CE4DC7679DC82">
<enum>(ii)</enum>
<header>Collectively bargained plans</header>
<text display-inline="yes-display-inline">In the case of a plan
maintained pursuant to a collective bargaining agreement between employee
representatives and the employer and in effect before the beginning of the
first plan year of any continuous period of 1 or more plan years for which a
plan is a financially distressed plan, this paragraph shall not be applied to
benefits pursuant to, and individuals covered by, such agreement for plan years
beginning before the date on which such collective bargaining agreement
terminates (determined without regard to any extension thereof).</text>
</clause></subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="IDBB2BC2B38B794D849D18305C581A66A0">
<enum>(D)</enum>
<header>Financially distressed plan</header>
<text display-inline="yes-display-inline">For purposes of this
paragraph—</text>
<clause commented="no" display-inline="no-display-inline" id="ID02F712E672A44B62B2358E184DC1D772">
<enum>(i)</enum>
<header>In general</header>
<text display-inline="yes-display-inline">A plan shall be treated as
a financially distressed plan for any plan year if—</text>
<subclause commented="no" display-inline="no-display-inline" id="ID3B7B316162F645D6AC8514C3B0EBFECD">
<enum>(I)</enum>
<text display-inline="yes-display-inline">the plan sponsor during any
2 of the 5 plan years immediately preceding such plan year has an outstanding
debt instrument which is rated speculative grade or lower by 1 or more
nationally recognized statistical rating organizations for corporate bonds,
and</text>
</subclause><subclause commented="no" display-inline="no-display-inline" id="ID66043745E995424490650B3E505F55D9">
<enum>(II)</enum>
<text display-inline="yes-display-inline">the funded current
liability percentage of the plan as of the beginning of the plan year preceding
such plan year is less than 50 percent.</text>
</subclause><continuation-text commented="no" continuation-text-level="clause">The Secretary shall prescribe rules for
the application of subclause (I) in cases where outstanding debt instruments of
the plan sponsor are not rated.</continuation-text></clause><clause commented="no" display-inline="no-display-inline" id="ID3E83F27547304CF8A745B9F759D1BDF9">
<enum>(ii)</enum>
<header>Financial status must improve for at least 5 years</header>
<subclause commented="no" display-inline="no-display-inline" id="ID2308AA995C034D429E716172908378DC">
<enum>(I)</enum>
<header>In general</header>
<text display-inline="yes-display-inline">Notwithstanding clause (i),
if a plan is treated under clause (i) as a financially distressed plan for 1 or
more plan years, the plan shall continue to be treated as a financially
distressed plan for subsequent plan years beginning before the first plan year
after the close of the first period described in subclause (II).</text>
</subclause><subclause commented="no" display-inline="no-display-inline" id="IDB6394B332A8C49819D22D8C03AE2660A">
<enum>(II)</enum>
<header>5-year period</header>
<text display-inline="yes-display-inline">A period described in this
subparagraph is a 5-consecutive-plan year period if during each of the 5 plan
years in the period the plan sponsor did not have an outstanding debt
obligation described in clause (i)(I) or during each of such 5 plan years the
plan was not described in clause (i)(II).</text>
</subclause></clause></subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="IDCA7DC99BCF604AF7AA6DF0F77F329CC3">
<enum>(E)</enum>
<header>Funded current liability percentage</header>
<text display-inline="yes-display-inline">For purposes of this
paragraph, the term <term>funded current liability percentage</term> has the
meaning given such term by section 412(l)(8)(B), except that the current
liability used in computing such percentage shall be determined by only taking
into account vested benefits and by using the interest rate described in
section 4006(a)(3)(E)(iii)(II) of the <act-name parsable-cite="ERISA">Employee
Retirement Income Security Act of 1974</act-name> and the fair market value of
the plan assets.</text>
</subparagraph></paragraph><after-quoted-block></after-quoted-block></quoted-block>
</subsection><subsection commented="no" display-inline="no-display-inline" id="ID31AC43EC8DE140F19852B5BE94458D8C">
<enum>(b)</enum>
<header>
<act-name parsable-cite="ERISA">Employee Retirement Income
Security Act of 1974</act-name>
</header>
<paragraph commented="no" display-inline="no-display-inline" id="IDB3A15D2C052E46DD85A75BFF101E1DC7">
<enum>(1)</enum>
<header>In general</header>
<text display-inline="yes-display-inline">
<external-xref legal-doc="act" parsable-cite="ERISA/206">Section
206</external-xref> of the <act-name parsable-cite="ERISA">Employee Retirement
Income Security Act of 1974</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/29/1056">29 U.S.C. 1056</external-xref>) is amended by
adding at the end the following new subsection:</text>
<quoted-block act-name="Employee Retirement Income Security Act of 1974" display-inline="no-display-inline" id="IDCBF2EE7A35E541868E0EF601A6806A58" style="OLC">
<subsection commented="no" display-inline="no-display-inline" id="IDEA3378AD63F645CFAEBCF791D5C40A65">
<enum>(g)</enum>
<header>Benefit limitations for certain financially distressed
plans</header>
<paragraph commented="no" display-inline="no-display-inline" id="IDBB112F42E345437DB27CBE669987DC1D">
<enum>(1)</enum>
<header>In general</header>
<text display-inline="yes-display-inline">Notwithstanding any other
provision of this part, if a defined benefit plan to which the requirements of
section 302(d) apply is a financially distressed plan for any plan year—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="ID57C128D369874AAC9F345122A2E58485">
<enum>(A)</enum>
<text display-inline="yes-display-inline">no amendment to the plan
shall take effect during the plan year if such amendment increases liabilities
of the plan by reason of increases in benefits, any change in the accrual of
benefits, or any change in the rate at which benefits become
nonforfeitable,</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID8AC6172C690D4CD5AF7A03B82B22E045">
<enum>(B)</enum>
<text display-inline="yes-display-inline">notwithstanding any other
provision of the plan—</text>
<clause commented="no" display-inline="no-display-inline" id="ID45135FFC890A488CACDFCB1568A529AE">
<enum>(i)</enum>
<text display-inline="yes-display-inline">the accrued benefit, any
death or disability benefit, and any social security supplement described in
the last sentence of section 3(22) of each participant shall be frozen at the
amount of such benefit or supplement as of the end of the preceding plan year,
determined without regard to any plan amendment adopted during the preceding
plan year which increased any such benefit or supplement and determined after
the application of this clause, and</text>
</clause><clause commented="no" display-inline="no-display-inline" id="IDAD05CFD260494604A86B04DFE533B0F8">
<enum>(ii)</enum>
<text display-inline="yes-display-inline">all other benefits provided
under the plan shall be eliminated,</text>
</clause><continuation-text commented="no" continuation-text-level="subparagraph">but only to the extent the
freezing or elimination of such benefits would have been permitted under
section 204(g) if they had been implemented by a plan amendment adopted at the
end of the preceding plan year, and</continuation-text></subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID1FE1E70A737A4780B80061B127838E9D">
<enum>(C)</enum>
<text display-inline="yes-display-inline">the plan may not make any
payments described in section 206(e)(2) to any participant or beneficiary whose
annuity starting date occurs during the plan year.</text>
</subparagraph><continuation-text commented="no" continuation-text-level="paragraph">Subparagraph (C) shall apply to any
plan year beginning after such plan year and before the 1st plan year following
such plan year for which the plan is not a financially distressed plan.</continuation-text></paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDD6FE8B14F23746FDBEB329D6A1B9AEB8">
<enum>(2)</enum>
<header>Special rules if funding increases to at least 50
percent</header>
<text display-inline="yes-display-inline">If a plan is a financially
distressed plan for any plan year but the funded current liability percentage
as of the beginning of the preceding plan year is at least 50 percent—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="ID8F9E9D2E503E4B93B1640D596E26AADB">
<enum>(A)</enum>
<text display-inline="yes-display-inline">an amendment described in
paragraph (1)(A) may take effect but only if the funded current liability
percentage as of the end of the plan year is projected (taking into the account
the effect of the amendment) to be at least 50 percent, and</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID42D8B4E87ACC4F5DB4AFBE09DCE7F052">
<enum>(B)</enum>
<text display-inline="yes-display-inline">the requirements of
paragraph (1)(B) shall not apply with respect to the plan year or any preceding
plan year.</text>
</subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDE58779C1D7A9471784AC982AE80FAE40">
<enum>(3)</enum>
<header>Special rules</header>
<text display-inline="yes-display-inline">For purposes of this
subsection—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="IDBC27149AC95A4A97B5EC7CE2E48B03C6">
<enum>(A)</enum>
<header>Impermissible amendments</header>
<text display-inline="yes-display-inline">If a plan adopts an
amendment in violation of paragraph (1)(A) or (2)(A), the provisions of the
plan shall be applied without regard to the amendment.</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="IDCA5CA0C8484345338C1E37209C0047DD">
<enum>(B)</enum>
<header>Collectively bargained plans</header>
<text display-inline="yes-display-inline">In the case of a plan
maintained pursuant to a collective bargaining agreement between employee
representatives and the employer and in effect before the beginning of the
first plan year of any continuous period of 1 or more plan years for which a
plan is a financially distressed plan, this paragraph shall not be applied to
benefits pursuant to, and individuals covered by, such agreement for plan years
beginning before the date on which such collective bargaining agreement
terminates (determined without regard to any extension thereof).</text>
</subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDA9389589CAC44B898AFD34C0D9F8B390">
<enum>(4)</enum>
<header>Notice requirements</header>
<subparagraph commented="no" display-inline="no-display-inline" id="ID56F61C82A11F467F8CE2059AD7AC2599">
<enum>(A)</enum>
<header>In general</header>
<text display-inline="yes-display-inline">The plan administrator of a
plan which is a financially distressed plan for any year shall, at least 45
days before the beginning of the plan year, notify each plan participant or
beneficiary, each labor organization representing such participants or
beneficiaries, and the Pension Benefit Guaranty Corporation that—</text>
<clause commented="no" display-inline="no-display-inline" id="ID29FF23A7CDDF4F7FB110D8EA5CD726B7">
<enum>(i)</enum>
<text display-inline="yes-display-inline">the plan is treated as a
financially distressed plan for purposes of this subsection and the reasons why
it is so treated, and</text>
</clause><clause commented="no" display-inline="no-display-inline" id="ID78163878DB0E48A3A213F0C0D7507265">
<enum>(ii)</enum>
<text display-inline="yes-display-inline">the restrictions applicable
to the plan under this subsection for the plan year.</text>
</clause><continuation-text commented="no" continuation-text-level="subparagraph">The Secretary of the Treasury may
provide for the coordination of the notice under this subsection with the
notice under section 204(h).</continuation-text></subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID171438F8AF9A4D3D91E9273A68EF94F1">
<enum>(B)</enum>
<header>Form and manner</header>
<text display-inline="yes-display-inline">Any notice under
subparagraph (A)—</text>
<clause commented="no" display-inline="no-display-inline" id="IDB946E7A54BEF4AA283D689995A94D122">
<enum>(i)</enum>
<text display-inline="yes-display-inline">shall be provided in a form
and manner prescribed by the Secretary of the Treasury,</text>
</clause><clause commented="no" display-inline="no-display-inline" id="IDAA6CB8F21A6B43619E4A530B6B8FBB3B">
<enum>(ii)</enum>
<text display-inline="yes-display-inline">shall be written in a
manner so as to be understood by the average plan participant, and</text>
</clause><clause commented="no" display-inline="no-display-inline" id="IDA470284B5EC84FCCBCC03B5F78093BD7">
<enum>(iii)</enum>
<text display-inline="yes-display-inline">may be provided in written,
electronic, or other appropriate form to the extent such form is reasonably
accessible to persons to whom the notice is required to be provided.</text>
</clause></subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID1FBDD4C48FE94600B26993EFFF08B785">
<enum>(5)</enum>
<header>Financially distressed plan</header>
<text display-inline="yes-display-inline">For purposes of this
subsection—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="IDB8B6D3D85BF44CB1AF33F9D3195B7948">
<enum>(A)</enum>
<header>In general</header>
<text display-inline="yes-display-inline">A plan shall be treated as
a financially distressed plan for any plan year if—</text>
<clause commented="no" display-inline="no-display-inline" id="IDAE38262925D04921B72EF86491863E67">
<enum>(i)</enum>
<text display-inline="yes-display-inline">the plan sponsor during any
2 of the 5 plan years immediately preceding such plan year has an outstanding
debt instrument which is rated speculative grade or lower by 1 or more
nationally recognized statistical rating organizations for corporate bonds,
and</text>
</clause><clause commented="no" display-inline="no-display-inline" id="ID3CFE83099A65455090DA69A9CBF7EA35">
<enum>(ii)</enum>
<text display-inline="yes-display-inline">the funded current
liability percentage of the plan as of the beginning of the plan year preceding
such plan year is less than 50 percent.</text>
</clause><continuation-text commented="no" continuation-text-level="subparagraph">The Secretary of the Treasury
shall prescribe rules for the application of clause (i) in cases where
outstanding debt instruments of the plan sponsor are not rated.</continuation-text></subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID11DB59EA106541BEB3061904BAC45821">
<enum>(B)</enum>
<header>Financial status must improve for at least 5 years</header>
<clause commented="no" display-inline="no-display-inline" id="ID90F8076D5A4B40D0AE3E6FE7E31157FB">
<enum>(i)</enum>
<header>In general</header>
<text display-inline="yes-display-inline">Notwithstanding
subparagraph (A), if a plan is treated under subparagraph (A) as a financially
distressed plan for 1 or more plan years, the plan shall continue to be treated
as a financially distressed plan for subsequent plan years beginning before the
first plan year after the close of the first period described in clause
(ii).</text>
</clause><clause commented="no" display-inline="no-display-inline" id="IDF50E56510FE74399A85ECC519D358B8E">
<enum>(ii)</enum>
<header>5-year period</header>
<text display-inline="yes-display-inline">A period described in this
clause is any 5-consecutive-plan year period if during each of the 5 plan years
in the period the plan sponsor did not have an outstanding debt instrument
described in subparagraph (A)(i) or during each of such 5 plan years the plan
was not described in subparagraph (A)(ii).</text>
</clause></subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID6E1EA72416CB4896AD90E7E027AB2FAF">
<enum>(6)</enum>
<header>Funded current liability percentage</header>
<text display-inline="yes-display-inline">For purposes of this
subsection the term <term>funded current liability percentage</term> has the
meaning given such term by section 302(d)(8)(B), except that the current
liability used in computing such percentage shall be determined by only taking
into account vested benefits and by using the interest rate described in
section 4006(a)(3)(E)(iii)(II) and the fair market value of the plan
assets.</text>
</paragraph></subsection><after-quoted-block></after-quoted-block></quoted-block>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID285CF1444F2E41B394D505A24C26FD24">
<enum>(2)</enum>
<header>Enforcement</header>
<text display-inline="yes-display-inline">Section 502(c)(3) of such Act
(<external-xref legal-doc="usc" parsable-cite="usc/29/1132(c)(3)">29 U.S.C.
1132(c)(3)</external-xref>) is amended by inserting <quote>206(g)(4) or</quote>
before <quote>302(d)(12)(E)</quote>.</text>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="ID998E2104FE7B4376972E64B5E6685F5F">
<enum>(c)</enum>
<header>Effective dates</header>
<paragraph commented="no" display-inline="no-display-inline" id="ID77501514FA004BCFA2391F4501B48F7B">
<enum>(1)</enum>
<header>In general</header>
<text display-inline="yes-display-inline">The amendments made by this
section shall apply to plan years beginning after December 31, 2006.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID1F42742DACD1402C82997A370ED4D7EE">
<enum>(2)</enum>
<header>Rules</header>
<text display-inline="yes-display-inline">The Secretary of the Treasury
shall, not later than December 31, 2005, publish such rules as are necessary to
carry out the amendments made by this section.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID0B65BB46FA804779AD389DD5D9826711">
<enum>(3)</enum>
<header>Collective bargaining agreements</header>
<text display-inline="yes-display-inline">In the case of a plan
maintained pursuant to 1 or more collective bargaining agreements between
employee representatives and 1 or more employers ratified by the date of the
enactment of this Act, the amendments made by this section shall not apply to
employees covered by any such agreement for plan years beginning before the
later of—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="IDC42E2639E58542E68505A541169A9468">
<enum>(A)</enum>
<text display-inline="yes-display-inline">the date on which the last of
such collective bargaining agreements terminates (determined without regard to
any extension thereof on or after such date of enactment); or</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="IDC1D2586C6FD44F5CBF0C4C9FF3B24887">
<enum>(B)</enum>
<text display-inline="yes-display-inline">January 1, 2007.</text>
</subparagraph></paragraph></subsection></section><section commented="no" display-inline="no-display-inline" id="ID4FD93D11AEBC405CBF187859A09D4730" section-type="subsequent-section">
<enum>213.</enum>
<header>Updating deduction rules for combination of plans</header>
<subsection commented="no" display-inline="no-display-inline" id="ID4D21B40C114C495EA68751F7C34E40AF">
<enum>(a)</enum>
<header>In general</header>
<text display-inline="yes-display-inline">Subparagraph (C) of section
404(a)(7) of the Internal Revenue Code of 1986 (relating to limitation on
deductions where combination of defined contribution plan and defined benefit
plan) is amended by adding after clause (ii) the following new clause:</text>
<quoted-block display-inline="no-display-inline" id="ID91EBA1B0FEF641D58D87AD3B423C1E77" style="OLC">
<clause commented="no" display-inline="no-display-inline" id="IDB318AB6F2B8A4074B2F92D1700FB4B9C">
<enum>(iii)</enum>
<header>Limitation</header>
<text display-inline="yes-display-inline">In the case of employer
contributions to 1 or more defined contribution plans, this paragraph shall
only apply to the extent that such contributions exceed 6 percent of the
compensation otherwise paid or accrued during the taxable year to the
beneficiaries under such plans. For purposes of this clause, amounts carried
over from preceding taxable years under subparagraph (B) shall be treated as
employer contributions to 1 or more defined contributions to the extent
attributable to employer contributions to such plans in such preceding taxable
years.</text>
</clause><after-quoted-block></after-quoted-block></quoted-block>
</subsection><subsection commented="no" display-inline="no-display-inline" id="ID43E04888F5864C18871FCA2FD0B12401">
<enum>(b)</enum>
<header>Conforming amendment</header>
<text display-inline="yes-display-inline">Subparagraph (A) of section
4972(c)(6) of such Code (relating to nondeductible contributions) is amended to
read as follows:</text>
<quoted-block display-inline="no-display-inline" id="IDD0D9B52AA7EF4E9BA5D40573A6C33A44" style="OLC">
<subparagraph commented="no" display-inline="no-display-inline" id="ID2155AE26068145348781AFCDB7B86EAD">
<enum>(A)</enum>
<text display-inline="yes-display-inline">so much of the
contributions to 1 or more defined contribution plans which are not deductible
when contributed solely because of section 404(a)(7) as does not exceed the
amount of contributions described in section 401(m)(4)(A), or</text>
</subparagraph><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection commented="no" display-inline="no-display-inline" id="ID91AB97D1C3AF4DAEA81CD8B508695DDB">
<enum>(c)</enum>
<header>Effective date</header>
<text display-inline="yes-display-inline">The amendments made by this
section shall apply to contributions for taxable years beginning after December
31, 2004.</text>
</subsection></section></subtitle><subtitle commented="no" id="id3E4170769E264733AF6362B1C0F9FE00" style="OLC">
<enum>C</enum>
<header>Provisions relating to the Pension Benefit Guaranty
Corporation</header>
<section commented="no" display-inline="no-display-inline" id="ID4D9A9C7CABE74F7CB65ABB7285D7525C" section-type="subsequent-section">
<enum>221.</enum>
<header>PBGC premiums for new plans of small employers</header>
<subsection commented="no" display-inline="no-display-inline" id="ID94734B1D756343C786E1E38B44C3D134">
<enum>(a)</enum>
<header>In general</header>
<text display-inline="yes-display-inline">Subparagraph (A) of
<external-xref legal-doc="act" parsable-cite="ERISA/4006(a)(3)">section
4006(a)(3)</external-xref> of the <act-name parsable-cite="ERISA">Employee
Retirement Income Security Act of 1974</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/29/1306(a)(3)(A)">29 U.S.C.
1306(a)(3)(A)</external-xref>) is amended—</text>
<paragraph commented="no" display-inline="no-display-inline" id="IDDE282B1CFA554E2593EEF29C8DBC68EC">
<enum>(1)</enum>
<text display-inline="yes-display-inline">in clause (i), by inserting
<quote>other than a new single-employer plan (as defined in subparagraph (F))
maintained by a small employer (as so defined),</quote> after
<quote>single-employer plan,</quote>,</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID476D9346F8234FDEBDFE25BC06C745C5">
<enum>(2)</enum>
<text display-inline="yes-display-inline">in clause (iii), by striking
the period at the end and inserting <quote>, and</quote>, and</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID0824B28AF15443D1B9F8F9958F8717F1">
<enum>(3)</enum>
<text display-inline="yes-display-inline">by adding at the end the
following new clause:</text>
<quoted-block display-inline="no-display-inline" id="ID8CAD075CB0B74BD98D1CB316B6ED0A63" style="OLC">
<clause commented="no" display-inline="no-display-inline" id="IDFD5FC115D3F94E3980EEA0F2FEA15892" indent="up2">
<enum>(iv)</enum>
<text display-inline="yes-display-inline">in the case of a new
single-employer plan (as defined in subparagraph (F)) maintained by a small
employer (as so defined) for the plan year, $5 for each individual who is a
participant in such plan during the plan year.</text>
</clause><after-quoted-block></after-quoted-block></quoted-block>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="ID2BE6AD80BA1D4A19ACF18891AA220787">
<enum>(b)</enum>
<header>Definition of new Single-Employer plan</header>
<text display-inline="yes-display-inline">
<external-xref legal-doc="act" parsable-cite="ERISA/4006(a)(3)">Section
4006(a)(3)</external-xref> of the <act-name parsable-cite="ERISA">Employee
Retirement Income Security Act of 1974</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/29/1306(a)(3)">29 U.S.C.
1306(a)(3)</external-xref>) is amended by adding at the end the following new
subparagraph:</text>
<quoted-block act-name="Employee Retirement Income Security Act of 1974" display-inline="no-display-inline" id="IDFBF86F30D2F44932B8CA30B6AA46E439" style="OLC">
<subparagraph commented="no" display-inline="no-display-inline" id="ID977DA738690C4FCA8616537AC1D3CED0" indent="up2">
<enum>(F)</enum>
<clause commented="no" display-inline="yes-display-inline" id="ID8BB643FD99F5409B952D14F0F7E9ACD9"><enum>(i)</enum>
<text display-inline="yes-display-inline">For purposes of this
paragraph, a single-employer plan maintained by a contributing sponsor shall be
treated as a new single-employer plan for each of its first 5 plan years if,
during the 36-month period ending on the date of the adoption of such plan, the
sponsor or any member of such sponsor’s controlled group (or any predecessor of
either) did not establish or maintain a plan to which this title applies with
respect to which benefits were accrued for substantially the same employees as
are in the new single-employer plan.</text>
</clause><clause commented="no" display-inline="no-display-inline" id="ID97BBB4632980441AB511B9204C096585" indent="up1">
<enum>(ii)</enum>
<subclause commented="no" display-inline="yes-display-inline" id="IDF2B94468732E407AA50A961E10672AEB"><enum>(I)</enum>
<text display-inline="yes-display-inline">For purposes of this
paragraph, the term <term>small employer</term> means an employer which on the
first day of any plan year has, in aggregation with all members of the
controlled group of such employer, 100 or fewer employees.</text>
</subclause><subclause commented="no" display-inline="no-display-inline" id="ID6743D43855A5405A9383005069EFBBDA" indent="up1">
<enum>(II)</enum>
<text display-inline="yes-display-inline">In the case of a plan
maintained by two or more contributing sponsors that are not part of the same
controlled group, the employees of all contributing sponsors and controlled
groups of such sponsors shall be aggregated for purposes of determining whether
any contributing sponsor is a small employer.</text>
</subclause></clause></subparagraph><after-quoted-block></after-quoted-block></quoted-block>
</subsection><subsection commented="no" display-inline="no-display-inline" id="IDC369B4AE67BF4126A89D6DA029214685">
<enum>(c)</enum>
<header>Effective date</header>
<text display-inline="yes-display-inline">The amendments made by this
section shall apply to plans first effective after December 31, 2005.</text>
</subsection></section><section commented="no" display-inline="no-display-inline" id="ID5C13008DF44047F99E95CD96FA3D0637" section-type="subsequent-section">
<enum>222.</enum>
<header>Additional PBGC premium for new and small plans</header>
<subsection commented="no" display-inline="no-display-inline" id="ID636DCBD566994EB9AFC5E8A39377137F">
<enum>(a)</enum>
<header>New plans</header>
<text display-inline="yes-display-inline">Subparagraph (E) of
<external-xref legal-doc="act" parsable-cite="ERISA/4006(a)(3)">section
4006(a)(3)</external-xref> of the <act-name parsable-cite="ERISA">Employee
Retirement Income Security Act of 1974</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/29/1306(a)(3)(E)">29 U.S.C.
1306(a)(3)(E)</external-xref>) is amended by adding at the end the following
new clause:</text>
<quoted-block act-name="Employee Retirement Income Security Act of 1974" display-inline="no-display-inline" id="IDE484E667199E422A8F9DD63EE4969180" style="OLC">
<clause commented="no" display-inline="no-display-inline" id="ID097643D264EE4E5E8EA896EBB0B2FBF1" indent="up3">
<enum>(v)</enum>
<text display-inline="yes-display-inline">In the case of a new
defined benefit plan, the amount determined under clause (ii) for any plan year
shall be an amount equal to the product of the amount determined under clause
(ii) and the applicable percentage. For purposes of this clause, the term
<term>applicable percentage</term> means—</text>
<subclause commented="no" display-inline="no-display-inline" id="IDE2C06CAA21E945A38A669F0BB4069231">
<enum>(I)</enum>
<text display-inline="yes-display-inline">0 percent, for the first
plan year.</text>
</subclause><subclause commented="no" display-inline="no-display-inline" id="IDE7E96D3962594D558E21E383FC8F65DD">
<enum>(II)</enum>
<text display-inline="yes-display-inline">20 percent, for the second
plan year.</text>
</subclause><subclause commented="no" display-inline="no-display-inline" id="IDAAB8870677F747FEBC9B83AE3F83EECB">
<enum>(III)</enum>
<text display-inline="yes-display-inline">40 percent, for the third
plan year.</text>
</subclause><subclause commented="no" display-inline="no-display-inline" id="ID4BDCF7FBCB78461E87BC6E3879DFD33C">
<enum>(IV)</enum>
<text display-inline="yes-display-inline">60 percent, for the fourth
plan year.</text>
</subclause><subclause commented="no" display-inline="no-display-inline" id="IDD7B71628F651441B8752409350BCBF36">
<enum>(V)</enum>
<text display-inline="yes-display-inline">80 percent, for the fifth
plan year.</text>
</subclause></clause><quoted-block-continuation-text quoted-block-continuation-text-level="section">For purposes
of this clause, a defined benefit plan (as defined in section 3(35)) maintained
by a contributing sponsor shall be treated as a new defined benefit plan for
each of its first 5 plan years if, during the 36-month period ending on the
date of the adoption of the plan, the sponsor and each member of any controlled
group including the sponsor (or any predecessor of either) did not establish or
maintain a plan to which this title applies with respect to which benefits were
accrued for substantially the same employees as are in the new
plan.</quoted-block-continuation-text><after-quoted-block></after-quoted-block></quoted-block>
</subsection><subsection commented="no" display-inline="no-display-inline" id="ID912F88018D3F4AFD8C696FC44BFB840A">
<enum>(b)</enum>
<header>Small plans</header>
<text display-inline="yes-display-inline">Paragraph (3) of
<external-xref legal-doc="act" parsable-cite="ERISA/4006(a)">section
4006(a)</external-xref> of the <act-name parsable-cite="ERISA">Employee
Retirement Income Security Act of 1974</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/29/1306(a)">29 U.S.C.
1306(a)</external-xref>), as amended by section 221(b), is amended—</text>
<paragraph commented="no" display-inline="no-display-inline" id="IDCC93A986678445EE980301B392CD04FB">
<enum>(1)</enum>
<text display-inline="yes-display-inline">by striking
<quote>The</quote> in subparagraph (E)(i) and inserting <quote>Except as
provided in subparagraph (G), the</quote>, and</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID2B0285F942584C65AF84CED62005EB9B">
<enum>(2)</enum>
<text display-inline="yes-display-inline">by inserting after
subparagraph (F) the following new subparagraph:</text>
<quoted-block display-inline="no-display-inline" id="IDC661917C80D14DCF81D4EDE24CEB8A32" style="OLC">
<subparagraph commented="no" display-inline="no-display-inline" id="ID728635D65DBA4D8986FD007ACD4D0AF1" indent="up2">
<enum>(G)</enum>
<clause commented="no" display-inline="yes-display-inline" id="ID0FE2BA7FD4824CA5A6C81B5A107123A6"><enum>(i)</enum>
<text display-inline="yes-display-inline">In the case of an employer
who has 25 or fewer employees on the first day of the plan year, the additional
premium determined under subparagraph (E) for each participant shall not exceed
$5 multiplied by the number of participants in the plan as of the close of the
preceding plan year.</text>
</clause><clause commented="no" display-inline="no-display-inline" id="ID2E0FA8E8ADE44FED8B4968F635551320" indent="up1">
<enum>(ii)</enum>
<text display-inline="yes-display-inline">For purposes of clause (i),
whether an employer has 25 or fewer employees on the first day of the plan year
is determined by taking into consideration all of the employees of all members
of the contributing sponsor’s controlled group. In the case of a plan
maintained by two or more contributing sponsors, the employees of all
contributing sponsors and their controlled groups shall be aggregated for
purposes of determining whether the 25-or-fewer-employees limitation has been
satisfied.</text>
</clause></subparagraph><after-quoted-block></after-quoted-block></quoted-block>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="IDAA2FE5E88E9D417391C4A06FAD001E09">
<enum>(c)</enum>
<header>Effective dates</header>
<paragraph commented="no" display-inline="no-display-inline" id="IDDF432814FD8A459FBAE8C51ECC30EAAB">
<enum>(1)</enum>
<header>Subsection <enum-in-header>(a)</enum-in-header></header>
<text display-inline="yes-display-inline">The amendments made by
subsection (a) shall apply to plans first effective after December 31,
2005.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID79B736D008FD426C884B87557915207D">
<enum>(2)</enum>
<header>Subsection <enum-in-header>(b)</enum-in-header></header>
<text display-inline="yes-display-inline">The amendments made by
subsection (b) shall apply to plan years beginning after December 31,
2005.</text>
</paragraph></subsection></section><section commented="no" display-inline="no-display-inline" id="IDFD211943357D4754A1BAC22CC1EE6C14" section-type="subsequent-section">
<enum>223.</enum>
<header>Authorization for PBGC to pay interest on premium overpayment
refunds</header>
<subsection commented="no" display-inline="no-display-inline" id="ID02D0DFC48EF04801A5FF682B0132C721">
<enum>(a)</enum>
<header>In general</header>
<text display-inline="yes-display-inline">Section 4007(b) of the
Employment Retirement Income Security Act of 1974 (<external-xref legal-doc="usc" parsable-cite="usc/29/1307(b)">29 U.S.C.
1307(b)</external-xref>) is amended—</text>
<paragraph commented="no" display-inline="no-display-inline" id="ID0145C0B7A8994EA2BEC8062B77176DF8">
<enum>(1)</enum>
<text display-inline="yes-display-inline">by striking
<quote>(b)</quote> and inserting <quote>(b)(1)</quote>, and</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDED0E4731198E4650A4AEEE29070FDEBD">
<enum>(2)</enum>
<text display-inline="yes-display-inline">by inserting at the end the
following new paragraph:</text>
<quoted-block display-inline="no-display-inline" id="ID8FD789490F2B488F97D0A7C632044E6A" style="OLC">
<paragraph commented="no" display-inline="no-display-inline" id="ID045E8CBD8A924D06B2BADBA2FAFDD7B5" indent="up1">
<enum>(2)</enum>
<text display-inline="yes-display-inline">The corporation is
authorized to pay, subject to regulations prescribed by the corporation,
interest on the amount of any overpayment of premium refunded to a designated
payor. Interest under this paragraph shall be calculated at the same rate and
in the same manner as interest is calculated for underpayments under paragraph
(1).</text>
</paragraph><after-quoted-block></after-quoted-block></quoted-block>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="ID5263830560DF4C38953A4B43CAAF8AE5">
<enum>(b)</enum>
<header>Effective date</header>
<text display-inline="yes-display-inline">The amendments made by
subsection (a) shall apply to interest accruing for periods beginning not
earlier than the date of the enactment of this Act.</text>
</subsection></section><section commented="no" display-inline="no-display-inline" id="IDFC4ABA8444D943628C056B05E5827772" section-type="subsequent-section">
<enum>224.</enum>
<header>Substantial owner benefits in terminated plans</header>
<subsection commented="no" display-inline="no-display-inline" id="ID8DBFE54A411D47C59C083B189BC48AE4">
<enum>(a)</enum>
<header>Modification of Phase-In of guarantee</header>
<text display-inline="yes-display-inline">
<external-xref legal-doc="act" parsable-cite="ERISA/4022(b)(5)">Section
4022(b)(5)</external-xref> of the <act-name parsable-cite="ERISA">Employee
Retirement Income Security Act of 1974</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/29/1322(b)(5)">29 U.S.C.
1322(b)(5)</external-xref>) is amended to read as follows:</text>
<quoted-block act-name="Employee Retirement Income Security Act of 1974" display-inline="no-display-inline" id="ID3FD95674BEDE4DA39B2EAF116BB5E829" style="OLC">
<paragraph commented="no" display-inline="no-display-inline" id="ID504FB819B9D645A29F5D980B6AA28011" indent="up1">
<enum>(5)</enum>
<subparagraph commented="no" display-inline="yes-display-inline" id="ID175D3DBDAFED4AC99B1C80B4127D82AE"><enum>(A)</enum>
<text display-inline="yes-display-inline">For purposes of this
paragraph, the term <term>majority owner</term> means an individual who, at any
time during the 60-month period ending on the date the determination is being
made—</text>
<clause commented="no" display-inline="no-display-inline" id="IDEA53E9DA50E543B39C89B7F6EC113F2C" indent="up1">
<enum>(i)</enum>
<text display-inline="yes-display-inline">owns the entire interest in
an unincorporated trade or business,</text>
</clause><clause commented="no" display-inline="no-display-inline" id="ID553828CE8142447FB7164E5B52E2E705" indent="up1">
<enum>(ii)</enum>
<text display-inline="yes-display-inline">in the case of a
partnership, is a partner who owns, directly or indirectly, 50 percent or more
of either the capital interest or the profits interest in such partnership,
or</text>
</clause><clause commented="no" display-inline="no-display-inline" id="IDC785B3AA31D84FEAABFFCD50210D8707" indent="up1">
<enum>(iii)</enum>
<text display-inline="yes-display-inline">in the case of a
corporation, owns, directly or indirectly, 50 percent or more in value of
either the voting stock of that corporation or all the stock of that
corporation.</text>
</clause></subparagraph><continuation-text commented="no" continuation-text-level="paragraph" indent="paragraph">For purposes of clause (iii), the constructive
ownership rules of section 1563(e) of the Internal Revenue Code of 1986 shall
apply (determined without regard to section 1563(e)(3)(C)).</continuation-text><subparagraph commented="no" display-inline="no-display-inline" id="ID6F63DB97297F4D0896095A5435CD1DD3" indent="up1">
<enum>(B)</enum>
<text display-inline="yes-display-inline">In the case of a
participant who is a majority owner, the amount of benefits guaranteed under
this section shall equal the product of—</text>
<clause commented="no" display-inline="no-display-inline" id="ID1835C86D1F1345C9A313943A7C6DA1A9">
<enum>(i)</enum>
<text display-inline="yes-display-inline">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 10, and</text>
</clause><clause commented="no" display-inline="no-display-inline" id="IDA06DAB7261DC4DD0BD6A1849D8B76FA2">
<enum>(ii)</enum>
<text display-inline="yes-display-inline">the amount of benefits that
would be guaranteed under this section if the participant were not a majority
owner.</text>
</clause></subparagraph></paragraph><after-quoted-block></after-quoted-block></quoted-block>
</subsection><subsection commented="no" display-inline="no-display-inline" id="ID21F9110EAE4C4F0DA412FAFF6373ECA9">
<enum>(b)</enum>
<header>Modification of allocation of assets</header>
<paragraph commented="no" display-inline="no-display-inline" id="IDB0E6E754377C40A4A60ED5E5F5E211CA">
<enum>(1)</enum>
<text display-inline="yes-display-inline">
<external-xref legal-doc="act" parsable-cite="ERISA/4044(a)(4)(B)">Section
4044(a)(4)(B)</external-xref> of the <act-name parsable-cite="ERISA">Employee
Retirement Income Security Act of 1974</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/29/1344(a)(4)(B)">29 U.S.C.
1344(a)(4)(B)</external-xref>) is amended by striking <quote>section
4022(b)(5)</quote> and inserting <quote>section 4022(b)(5)(B)</quote>.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID8437ADCB83964033B45E87C3C99E5A31">
<enum>(2)</enum>
<text display-inline="yes-display-inline">Section 4044(b) of such Act
(<external-xref legal-doc="usc" parsable-cite="usc/29/1344(b)">29 U.S.C.
1344(b)</external-xref>) is amended—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="IDCC4CBB0AEF0F4F4EA4BECAA7FFDE90AF">
<enum>(A)</enum>
<text display-inline="yes-display-inline">by striking
<quote>(5)</quote> in paragraph (2) and inserting <quote>(4), (5),</quote>,
and</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID89D21087709B42D8A56C7A15413E5696">
<enum>(B)</enum>
<text display-inline="yes-display-inline">by redesignating paragraphs
(3) through (6) as paragraphs (4) through (7), respectively, and by inserting
after paragraph (2) the following new paragraph:</text>
<quoted-block display-inline="no-display-inline" id="ID8AA82EF37F134209B71EAB9A0B40B7D7" style="OLC">
<paragraph commented="no" display-inline="no-display-inline" id="ID964AA23D16CE4DCA8FE901010BE93992">
<enum>(3)</enum>
<text display-inline="yes-display-inline">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 benefits
described in subparagraph (B) of that paragraph. If assets allocated to such
subparagraph (B) are insufficient to satisfy in full the benefits described 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.</text>
</paragraph><after-quoted-block></after-quoted-block></quoted-block>
</subparagraph></paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="ID0252D9A07C664DE9BE3D98290E3C3788">
<enum>(c)</enum>
<header>Conforming amendments</header>
<paragraph commented="no" display-inline="no-display-inline" id="IDCF9B65CAAEFC416693A3F10094058390">
<enum>(1)</enum>
<text display-inline="yes-display-inline">
<external-xref legal-doc="act" parsable-cite="ERISA/4021">Section
4021</external-xref> of the <act-name parsable-cite="ERISA">Employee Retirement
Income Security Act of 1974</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/29/1321">29 U.S.C. 1321</external-xref>) is amended—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="ID9CC1CF9AE3814D72BC2E2CABDC49D292">
<enum>(A)</enum>
<text display-inline="yes-display-inline">in subsection (b)(9), by
striking <quote>as defined in section 4022(b)(6)</quote>, and</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="IDD7D0AB56443C4A8CA810D0A25384DA0D">
<enum>(B)</enum>
<text display-inline="yes-display-inline">by adding at the end the
following new subsection:</text>
<quoted-block display-inline="no-display-inline" id="ID517F0E7817C840D996F37A00DDC735A2" style="OLC">
<subsection commented="no" display-inline="no-display-inline" id="ID88C8EB8C856E47C5BD9B438B845B7F0B">
<enum>(d)</enum>
<text display-inline="yes-display-inline">For purposes of subsection
(b)(9), the term <term>substantial owner</term> means an individual who, at any
time during the 60-month period ending on the date the determination is being
made—</text>
<paragraph commented="no" display-inline="no-display-inline" id="ID04D73BD451404EA6A8A5F6D4473A2B92">
<enum>(1)</enum>
<text display-inline="yes-display-inline">owns the entire interest in
an unincorporated trade or business,</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDB5ADCD73F9F049A988349A89FDC5E09A">
<enum>(2)</enum>
<text display-inline="yes-display-inline">in the case of a
partnership, is a partner who owns, directly or indirectly, more than 10
percent of either the capital interest or the profits interest in such
partnership, or</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDC6EF1F19EBA4474686CFF8D2DDC4FED3">
<enum>(3)</enum>
<text display-inline="yes-display-inline">in the case of a
corporation, owns, directly or indirectly, more than 10 percent in value of
either the voting stock of that corporation or all the stock of that
corporation.</text>
</paragraph><continuation-text commented="no" continuation-text-level="subsection">For purposes of paragraph (3), the
constructive ownership rules of section 1563(e) of the Internal Revenue Code of
1986 shall apply (determined without regard to section
1563(e)(3)(C)).</continuation-text></subsection><after-quoted-block></after-quoted-block></quoted-block>
</subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDC3DE1841B5FB4A7B8ECD7C7B47E01CB5">
<enum>(2)</enum>
<text display-inline="yes-display-inline">Section 4043(c)(7) of such
Act (<external-xref legal-doc="usc" parsable-cite="usc/29/1343(c)(7)">29 U.S.C.
1343(c)(7)</external-xref>) is amended by striking <quote>section
4022(b)(6)</quote> and inserting <quote>section 4021(d)</quote>.</text>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="ID154946EF07E44C80ABB4CE084B8C91D4">
<enum>(d)</enum>
<header>Effective dates</header>
<paragraph commented="no" display-inline="no-display-inline" id="ID9FDD2525CAA64B15A400BD037ADA84A4">
<enum>(1)</enum>
<header>In general</header>
<text display-inline="yes-display-inline">Except as provided in
paragraph (2), the amendments made by this section shall apply to plan
terminations—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="ID3F29A08000F343BF85FDDFF179550302">
<enum>(A)</enum>
<text display-inline="yes-display-inline">under
<external-xref legal-doc="act" parsable-cite="ERISA/4041(c)">section
4041(c)</external-xref> of the <act-name parsable-cite="ERISA">Employee
Retirement Income Security Act of 1974</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/29/1341(c)">29 U.S.C.
1341(c)</external-xref>) with respect to which notices of intent to terminate
are provided under section 4041(a)(2) of such Act (<external-xref legal-doc="usc" parsable-cite="usc/29/1341(a)(2)">29 U.S.C.
1341(a)(2)</external-xref>) after December 31, 2005, and</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID97602D00EA5340AD8A7876F9C47656D0">
<enum>(B)</enum>
<text display-inline="yes-display-inline">under section 4042 of such
Act (<external-xref legal-doc="usc" parsable-cite="usc/29/1342">29 U.S.C.
1342</external-xref>) with respect to which proceedings are instituted by the
corporation after such date.</text>
</subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="id1DA0DD1E6AC54E5891D809DAF40A8360">
<enum>(2)</enum>
<header>Conforming amendments</header>
<text display-inline="yes-display-inline">The amendments made by
subsection (c) shall take effect on January 1, 2006.</text>
</paragraph></subsection></section><section commented="no" display-inline="no-display-inline" id="IDF702A1FC25E54B1B96BCD28AD159AF04" section-type="subsequent-section">
<enum>225.</enum>
<header>Acceleration of computation of benefits attributable to
recoveries of employer liability</header>
<subsection commented="no" display-inline="no-display-inline" id="ID2E7F7000F1FD41E4862A182CCC830F87">
<enum>(a)</enum>
<header>Modification of average recovery percentage of outstanding
amount of benefit liabilities payable by Corporation to participants and
beneficiaries</header>
<text display-inline="yes-display-inline">
<external-xref legal-doc="act" parsable-cite="ERISA/4022(c)(3)(B)(ii)">Section
4022(c)(3)(B)(ii)</external-xref> of the <act-name parsable-cite="ERISA">Employee Retirement Income Security Act of
1974</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/29/1322(c)(3)(B)(ii)">29 U.S.C.
1322(c)(3)(B)(ii)</external-xref>) is amended to read as follows:</text>
<quoted-block act-name="Employee Retirement Income Security Act of 1974" display-inline="no-display-inline" id="IDD2D068F4ECAB4D679D708C660D00162B" style="OLC">
<clause commented="no" display-inline="no-display-inline" id="ID64056AE4539C4C34BB0FF2E71AC13EE9">
<enum>(ii)</enum>
<text display-inline="yes-display-inline">notices of intent to
terminate were provided (or in the case of a termination by the corporation, a
notice of determination under section 4042 was issued) during the 5-Federal
fiscal year period ending with the third fiscal year preceding the fiscal year
in which occurs the date of the notice of intent to terminate (or the notice of
determination under section 4042) with respect to the plan termination for
which the recovery ratio is being determined.</text>
</clause><after-quoted-block></after-quoted-block></quoted-block>
</subsection><subsection commented="no" display-inline="no-display-inline" id="IDD61F165AB3DD4746A1B7106D988E58D6">
<enum>(b)</enum>
<header>Valuation of Section 4062<enum-in-header>(c)</enum-in-header>
liability for determining amounts payable by Corporation to participants and
beneficiaries</header>
<text display-inline="yes-display-inline">
<external-xref legal-doc="act" parsable-cite="ERISA/4044">Section
4044</external-xref> of the <act-name parsable-cite="ERISA">Employee Retirement
Income Security Act of 1974</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/29/1362">29 U.S.C. 1362</external-xref>) is amended by
adding at the end the following new subsection:</text>
<quoted-block act-name="Employee Retirement Income Security Act of 1974" display-inline="no-display-inline" id="ID87D8E333E3C9465FA4CCB33344F2D526" style="OLC">
<subsection commented="no" display-inline="no-display-inline" id="IDB8F186A151C44D16A5765ACA3934A9A6">
<enum>(e)</enum>
<header>Valuation of Section 4062<enum-in-header>(c)</enum-in-header>
liability for determining amounts payable by Corporation to participants and
beneficiaries</header>
<paragraph commented="no" display-inline="no-display-inline" id="ID0CC44FE8DEF54339A0DB2F38AE0D8CF6">
<enum>(1)</enum>
<header>In general</header>
<text display-inline="yes-display-inline">In the case of a terminated
plan, the value of the recovery of liability under section 4062(c) allocable as
a plan asset under this section for purposes of determining the amount of
benefits payable by the corporation shall be determined by multiplying—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="ID2CC1C59784C34B28A8C547485B0863F0">
<enum>(A)</enum>
<text display-inline="yes-display-inline">the amount of liability
under section 4062(c) as of the termination date of the plan, by</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID7A7764FF397246E382BE75371024A655">
<enum>(B)</enum>
<text display-inline="yes-display-inline">the applicable section
4062(c) recovery ratio.</text>
</subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID3F91C356E2AA478989171DFA65975685">
<enum>(2)</enum>
<header>Section 4062<enum-in-header>(c)</enum-in-header> recovery
ratio</header>
<text display-inline="yes-display-inline">For purposes of this
subsection—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="ID8897D623B94443CBB42554E1523EA02C">
<enum>(A)</enum>
<header>In general</header>
<text display-inline="yes-display-inline">Except as provided in
subparagraph (C), the term <term>section 4062(c) recovery ratio</term> means
the average, determined with respect to prior plan terminations described in
subparagraph (B), of the ratio which—</text>
<clause commented="no" display-inline="no-display-inline" id="ID73E353B400074E91BC12893EDBDE3802">
<enum>(i)</enum>
<text display-inline="yes-display-inline">the value of the recovery
under section 4062(c) determined by the corporation in connection with any such
prior termination, bears to</text>
</clause><clause commented="no" display-inline="no-display-inline" id="ID794554F2EDE34B45B9B6A32C67D3D0E5">
<enum>(ii)</enum>
<text display-inline="yes-display-inline">the amount of liability
under section 4062(c) with respect to such plans as of the termination date in
connection with any such prior termination.</text>
</clause></subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="IDB34C15CA34A04ECB913C17D16DD23E50">
<enum>(B)</enum>
<header>Prior terminations</header>
<text display-inline="yes-display-inline">A plan termination
described in this subparagraph is a termination with respect to which—</text>
<clause commented="no" display-inline="no-display-inline" id="ID4545BCE5AC014A6E89CDF5A71E37FA02">
<enum>(i)</enum>
<text display-inline="yes-display-inline">the value of recoveries
under section 4062(c) have been determined by the corporation, and</text>
</clause><clause commented="no" display-inline="no-display-inline" id="IDC2056FC49FAF49BCA6D2C3DE93238415">
<enum>(ii)</enum>
<text display-inline="yes-display-inline">notices of intent to
terminate were provided (or in the case of a termination by the corporation, a
notice of determination under section 4042 was issued) during the 5-Federal
fiscal year period ending with the third fiscal year preceding the fiscal year
in which occurs the date of the notice of intent to terminate (or the notice of
determination under section 4042) with respect to the plan termination for
which the recovery ratio is being determined.</text>
</clause></subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID5242CD236F29409BA547F59541BAA3AA">
<enum>(C)</enum>
<header>Exception</header>
<text display-inline="yes-display-inline">In the case of a terminated
plan with respect to which the outstanding amount of benefit liabilities
exceeds $20,000,000, the term <term>section 4062(c) recovery ratio</term>
means, with respect to the termination of such plan, the ratio of—</text>
<clause commented="no" display-inline="no-display-inline" id="IDEB2D0E04B7BF49C8BE1EEF2EC51F9495">
<enum>(i)</enum>
<text display-inline="yes-display-inline">the value of the recoveries
on behalf of the plan under section 4062(c), to</text>
</clause><clause commented="no" display-inline="no-display-inline" id="IDA09261E9FB13461292201AFCF94B81EE">
<enum>(ii)</enum>
<text display-inline="yes-display-inline">the amount of the liability
owed under section 4062(c) as of the date of plan termination to the trustee
appointed under section 4042 (b) or (c).</text>
</clause></subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID98833C4506E74C60A633D0244EB83DAF">
<enum>(3)</enum>
<header>Subsection not to apply</header>
<text display-inline="yes-display-inline">This subsection shall not
apply with respect to the determination of—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="ID5AFDDDC3794D49E28F9F2D794CEEA4F0">
<enum>(A)</enum>
<text display-inline="yes-display-inline">whether the amount of
outstanding benefit liabilities exceeds $20,000,000, or</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="IDED54125B9C694578A8444744929181F0">
<enum>(B)</enum>
<text display-inline="yes-display-inline">the amount of any liability
under section 4062 to the corporation or the trustee appointed under section
4042 (b) or (c).</text>
</subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID507BEDBD9CD44FBBAE90D51022837A82">
<enum>(4)</enum>
<header>Determinations</header>
<text display-inline="yes-display-inline">Determinations under this
subsection shall be made by the corporation. Such determinations shall be
binding unless shown by clear and convincing evidence to be
unreasonable.</text>
</paragraph></subsection><after-quoted-block></after-quoted-block></quoted-block>
</subsection><subsection commented="no" display-inline="no-display-inline" id="id59E68DDD186C4BDBAA7ED915AA93B8C4">
<enum>(c)</enum>
<header>Effective date</header>
<text display-inline="yes-display-inline">The amendments made by this
section shall apply for any termination for which notices of intent to
terminate are provided (or in the case of a termination by the corporation, a
notice of determination under section 4042 is issued) on or after the date
which is 30 days after the date of enactment of this section.</text>
</subsection></section></subtitle><subtitle commented="no" id="IDDE098EA72B8E4AE793789377B5207332" style="OLC">
<enum>D</enum>
<header>Studies</header>
<section commented="no" display-inline="no-display-inline" id="IDA906BAAA30194DB9806ABCCB12B1140B" section-type="subsequent-section">
<enum>231.</enum>
<header>Joint study on revitalizing defined benefit plans</header>
<subsection commented="no" display-inline="no-display-inline" id="ID449D03F0EA45419DB1412C2D2A223CFD">
<enum>(a)</enum>
<header>Study</header>
<text display-inline="yes-display-inline">As soon as practicable after
the date of the enactment of this Act, the Secretary of the Treasury, the
Secretary of Labor, and the Executive Director of the Pension Benefit Guaranty
Corporation shall jointly undertake a study on ways to revitalize interest in
defined benefit plans among employers. In conducting such study, the
Secretaries and the Executive Director shall consider—</text>
<paragraph commented="no" display-inline="no-display-inline" id="ID985223300BB549FF9EC8A95193B6C8E7">
<enum>(1)</enum>
<text display-inline="yes-display-inline">ways to encourage the
establishment of defined benefit plans by small- and mid-sized
employers,</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID495648DDFDB94F1198EDA2BB2384A18D">
<enum>(2)</enum>
<text display-inline="yes-display-inline">ways to encourage the
continued maintenance of defined benefit plans by larger employers, and</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID22EE3ED64A3346728EA241E19F8DF1AC">
<enum>(3)</enum>
<text display-inline="yes-display-inline">legislative proposals to
accomplish the objectives described in paragraphs (1) and (2).</text>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="ID1309AC9B28C047068C103C42E4438A6A">
<enum>(b)</enum>
<header>Report</header>
<text display-inline="yes-display-inline">Not later than 2 years after
the date of the enactment of this Act, the Secretaries and the Executive
Director shall report the results of the study, together with any
recommendations for legislative changes, to the Committees on Ways and Means
and Education and the Workforce of the House of Representatives and the
Committees on Finance and Health, Education, Labor, and Pensions of the
Senate.</text>
</subsection></section><section commented="no" display-inline="no-display-inline" id="ID1395AED2649243A48B16980557A9599F" section-type="subsequent-section">
<enum>232.</enum>
<header>Study on floor-offset ESOPs</header>
<subsection commented="no" display-inline="no-display-inline" id="ID92850FD6296D4BF59160373E4445A565">
<enum>(a)</enum>
<header>Study</header>
<text display-inline="yes-display-inline">As soon as practicable after
the date of the enactment of this Act, the Secretary of the Treasury and the
Pension Benefit Guaranty Corporation shall undertake a study to determine the
number of floor-offset employee stock ownership plans still in existence and
the extent to which such plans pose a risk to plan participants or
beneficiaries and to the Corporation. Such study shall consider legislative
proposals to address such risks.</text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="id0CA7746A01F340FB85F52DFB86F69A19">
<enum>(b)</enum>
<header>Report</header>
<text display-inline="yes-display-inline">Not later than 1 year after
the date of the enactment of this Act, the Secretary and the Corporation shall
report the results of the study, together with any recommendations for
legislative changes, to the Committees on Ways and Means and Education and the
Workforce of the House of Representatives and the Committees on Finance and
Health, Education, Labor, and Pensions of the Senate.</text>
</subsection></section></subtitle>
<enum>III</enum>
<header>Improvements in portability and distribution rules</header>
<section commented="no" display-inline="no-display-inline" id="ID8D70ABA4640243198785E0ACC3F4DC0C" section-type="subsequent-section">
<enum>301.</enum>
<header>Clarifications regarding purchase of permissive service
credit</header>
<subsection commented="no" display-inline="no-display-inline" id="ID37F0B4FEDDFF4F169F9EA9C54F0AECAA">
<enum>(a)</enum>
<header>In general</header>
<text display-inline="yes-display-inline">Section 415(n) of the
Internal Revenue Code of 1986 (relating to special rules for the purchase of
permissive service credit) is amended—</text>
<paragraph commented="no" display-inline="no-display-inline" id="IDC593656811084CE799911EAAA2E84727">
<enum>(1)</enum>
<text display-inline="yes-display-inline">by striking <quote>an
employee</quote> in paragraph (1) and inserting <quote>a participant</quote>,
and</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID1AB7CA9ED6344EFABC6343310CC5F95A">
<enum>(2)</enum>
<text display-inline="yes-display-inline">by adding at the end of
paragraph (3)(A) the following new flush sentence:</text>
<quoted-block display-inline="no-display-inline" id="ID3A8BBEE1D65645A3A761F9E5469F2D86" style="OLC">
<quoted-block-continuation-text quoted-block-continuation-text-level="subparagraph">Such
term may include service credit for periods for which there is no performance
of service, and notwithstanding clause (ii), may include service credited in
order to provide an increased benefit for service credit which a participant is
receiving under the plan.</quoted-block-continuation-text><after-quoted-block></after-quoted-block></quoted-block>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="IDCEF16142223E49118F0201089620AF63">
<enum>(b)</enum>
<header>Special rules for Trustee-to-Trustee transfers</header>
<text display-inline="yes-display-inline">Section 415(n)(3) of such
Code is amended by adding at the end the following new subparagraph:</text>
<quoted-block display-inline="no-display-inline" id="ID830D864D03934E538AE6F2D8D1B2796E" style="OLC">
<subparagraph commented="no" display-inline="no-display-inline" id="IDFF10CECB1CE448AA96323B1DAE3ADC9F">
<enum>(D)</enum>
<header>Special rules for Trustee-to-Trustee transfers</header>
<text display-inline="yes-display-inline">In the case of a
trustee-to-trustee transfer to which section 403(b)(13)(A) or 457(e)(17)(A)
applies (without regard to whether the transfer is made between plans
maintained by the same employer)—</text>
<clause commented="no" display-inline="no-display-inline" id="ID929E3C288EA04EB7A8617130AFC9C760">
<enum>(i)</enum>
<text display-inline="yes-display-inline">the limitations of
subparagraph (B) shall not apply in determining whether the transfer is for the
purchase of permissive service credit, and</text>
</clause><clause commented="no" display-inline="no-display-inline" id="ID26BC3BC0767A4085AA82EA455517040C">
<enum>(ii)</enum>
<text display-inline="yes-display-inline">the distribution rules
applicable under this title to the defined benefit governmental plan to which
any amounts are so transferred shall apply to such amounts and any benefits
attributable to such amounts.</text>
</clause></subparagraph><after-quoted-block></after-quoted-block></quoted-block>
</subsection><subsection commented="no" display-inline="no-display-inline" id="ID34617045A1BA4E55AE5BAD07B43E0AC3">
<enum>(c)</enum>
<header>Nonqualified service</header>
<text display-inline="yes-display-inline">Section 415(n)(3) of such
Code is amended—</text>
<paragraph commented="no" display-inline="no-display-inline" id="ID442917079BC04D4A9FD7B347856E401D">
<enum>(1)</enum>
<text display-inline="yes-display-inline">by striking <quote>permissive
service credit attributable to nonqualified service</quote> each place it
appears in subparagraph (B) and inserting <quote>nonqualified service
credit</quote>,</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID781B6E8DA0004C2DBF25E841F5F78851">
<enum>(2)</enum>
<text display-inline="yes-display-inline">by striking so much of
subparagraph (C) as precedes clause (i) and inserting:</text>
<quoted-block display-inline="no-display-inline" id="IDC40E27FB5405411C839BB8E637174D77" style="OLC">
<subparagraph commented="no" display-inline="no-display-inline" id="ID5DEE05B40F734E838FF7A85D2AD96BE1">
<enum>(C)</enum>
<header>Nonqualified service credit</header>
<text display-inline="yes-display-inline">For purposes of
subparagraph (B), the term <term>nonqualified service credit</term> means
permissive service credit other than that allowed with respect to—</text>
</subparagraph><after-quoted-block>, and</after-quoted-block></quoted-block>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID42CCEF13DFF34512B790355540A425DC">
<enum>(3)</enum>
<text display-inline="yes-display-inline">by striking <quote>elementary
or secondary education (through grade 12), as determined under State
law</quote> and inserting <quote>elementary or secondary education (through
grade 12), or a comparable level of education, as determined under the
applicable law of the jurisdiction in which the service was
performed</quote>.</text>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="ID15010C22DC2D4236AE503BA37C57F8A4">
<enum>(d)</enum>
<header>Effective dates</header>
<paragraph commented="no" display-inline="no-display-inline" id="ID7FAC159CC8C0418D8911ACF2FAFE2775">
<enum>(1)</enum>
<header>In general</header>
<text display-inline="yes-display-inline">The amendments made by
subsections (a) and (c) shall take effect as if included in the amendments made
by section 1526 of the Taxpayer Relief Act of 1997.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID916EA7CEE20943CC84AE0FD46F8C0FE7">
<enum>(2)</enum>
<header>Subsection <enum-in-header>(b)</enum-in-header></header>
<text display-inline="yes-display-inline">The amendments made by
subsection (b) shall take effect as if included in the amendments made by
section 647 of the Economic Growth and Tax Relief Reconciliation Act of
2001.</text>
</paragraph></subsection></section><section commented="no" display-inline="no-display-inline" id="IDAF18C04BE35E4E42BFF7300CD10CCEB2" section-type="subsequent-section">
<enum>302.</enum>
<header>Allow rollover of after-tax amounts in annuity
contracts</header>
<subsection commented="no" display-inline="no-display-inline" id="ID08F08131B3B5454A8CD0A7DE2D1880CC">
<enum>(a)</enum>
<header>In general</header>
<text display-inline="yes-display-inline">Subparagraph (A) of section
402(c)(2) (maximum amount which may be rolled over) is amended—</text>
<paragraph commented="no" display-inline="no-display-inline" id="IDB09609F05C22492AAC72857D221D7469">
<enum>(1)</enum>
<text display-inline="yes-display-inline">by striking <quote>which is
part of a plan which is a defined contribution plan and which agrees to
separately account</quote> and inserting <quote>or to an annuity contract
described in section 403(b) and such trust or contract provides for separate
accounting</quote>; and</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDC0023B2483824110925C7C9CF2124F8E">
<enum>(2)</enum>
<text display-inline="yes-display-inline">by inserting <quote>(and
earnings thereon)</quote> after <quote>so transferred</quote>.</text>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="IDF54D6AC2F457448EBEB01D65537CE0B9">
<enum>(b)</enum>
<header>Effective date</header>
<text display-inline="yes-display-inline">The amendment made by
subsection (a) shall apply to taxable years beginning after December 31,
2005.</text>
</subsection></section><section commented="no" display-inline="no-display-inline" id="IDB8A607C3319741C6990B0011FB91EBF8" section-type="subsequent-section">
<enum>303.</enum>
<header>Clarification of minimum distribution rules</header>
<text display-inline="no-display-inline">The Secretary of the Treasury
shall issue regulations under which a governmental plan (as defined in section
414(d) of the Internal Revenue Code of 1986) shall, for all years to which
section 401(a)(9) of such Code applies to such plan, be treated as having
complied with such section 401(a)(9) if such plan complies with a reasonable
good faith interpretation of such section 401(a)(9).</text>
</section><section commented="no" display-inline="no-display-inline" id="ID0FE007B2A380460494713504059F3D73" section-type="subsequent-section">
<enum>304.</enum>
<header>Waiver of 10 percent early withdrawal penalty tax on certain
distributions of pension plans for public safety employees</header>
<subsection commented="no" display-inline="no-display-inline" id="ID803306A882354788BCD41C37384FC74B">
<enum>(a)</enum>
<header>In general</header>
<text display-inline="yes-display-inline">Section 72(t) of the Internal
Revenue Code of 1986 (relating to subsection not to apply to certain
distributions) is amended by adding at the end the following new
paragraph:</text>
<quoted-block display-inline="no-display-inline" id="ID02FC0F8DA31444F8B175F98915684AD9" style="OLC">
<paragraph commented="no" display-inline="no-display-inline" id="ID7336224E7FF14F17AFA6A1B6CCCD7BCA">
<enum>(10)</enum>
<header>Distributions to qualified public safety employees in
governmental plans</header>
<subparagraph commented="no" display-inline="no-display-inline" id="ID69D2DA03B6A14ED1BB9408270839BBA5">
<enum>(A)</enum>
<header>In general</header>
<text display-inline="yes-display-inline">In the case of a
distribution to a qualified public safety employee from a governmental plan
(within the meaning of section 414(d)) which is a defined benefit plan,
paragraph (2)(A)(v) shall be applied by substituting <quote>age 50</quote> for
<quote>age 55</quote>.</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID62273F7A32DF4894BBAB5AF89FF04779">
<enum>(B)</enum>
<header>Qualified public safety employee</header>
<text display-inline="yes-display-inline">For purposes of this
paragraph, the term <term>qualified public safety employee</term> means any
employee of a State or political subdivision of a State who provides police
protection, firefighting services, or emergency medical services for any area
within the jurisdiction of such State or political subdivision.</text>
</subparagraph></paragraph><after-quoted-block></after-quoted-block></quoted-block>
</subsection><subsection commented="no" display-inline="no-display-inline" id="ID0790449F0BDE45F8BAD6053EBD6A4F36">
<enum>(b)</enum>
<header>Effective date</header>
<text display-inline="yes-display-inline">The amendment made by this
section shall apply to distributions after the date of the enactment of this
Act.</text>
</subsection></section><section commented="no" display-inline="no-display-inline" id="ID832E0E001F7242BB942EDD921ADC8D61" section-type="subsequent-section">
<enum>305.</enum>
<header>Allow rollovers by nonspouse beneficiaries of certain
retirement plan distributions</header>
<subsection commented="no" display-inline="no-display-inline" id="IDA0B40D97BB6C426C8A7099B291676B3D">
<enum>(a)</enum>
<header>In general</header>
<paragraph commented="no" display-inline="no-display-inline" id="ID3A2697648D9345E4B822EFBE51925950">
<enum>(1)</enum>
<header>Qualified plans</header>
<text display-inline="yes-display-inline">Section 402(c) of the
Internal Revenue Code of 1986 (relating to rollovers from exempt trusts) is
amended by adding at the end the following new paragraph:</text>
<quoted-block display-inline="no-display-inline" id="ID61FDB893267E48E2BE108D1C10DBA2D0" style="OLC">
<paragraph commented="no" display-inline="no-display-inline" id="IDEF33DFD75FFD43BB8E88E30FBA645428">
<enum>(11)</enum>
<header>Distributions to inherited individual retirement plan of
nonspouse beneficiary</header>
<subparagraph commented="no" display-inline="no-display-inline" id="ID4B91093E85BB4CCD82EF76B6B3F097CD">
<enum>(A)</enum>
<header>In general</header>
<text display-inline="yes-display-inline">If, with respect to any
portion of a distribution from an eligible retirement plan of a deceased
employee, a direct trustee-to-trustee transfer is made to an individual
retirement plan described in clause (i) or (ii) of paragraph (8)(B) established
for the purposes of receiving the distribution on behalf of an individual who
is a designated beneficiary (as defined by section 401(a)(9)(E)) of the
employee and who is not the surviving spouse of the employee—</text>
<clause commented="no" display-inline="no-display-inline" id="ID9CEEC13D20624F7C843C62BF290A6A7D">
<enum>(i)</enum>
<text display-inline="yes-display-inline">the transfer shall be
treated as an eligible rollover distribution for purposes of this
subsection,</text>
</clause><clause commented="no" display-inline="no-display-inline" id="ID4D6685F5D74B44F89931933676643993">
<enum>(ii)</enum>
<text display-inline="yes-display-inline">the individual retirement
plan shall be treated as an inherited individual retirement account or
individual retirement annuity (within the meaning of section 408(d)(3)(C)) for
purposes of this title, and</text>
</clause><clause commented="no" display-inline="no-display-inline" id="ID74EA085E4F194C9880E051BDC31481CD">
<enum>(iii)</enum>
<text display-inline="yes-display-inline">section 401(a)(9)(B) (other
than clause (iv) thereof) shall apply to such plan.</text>
</clause></subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID1E426E8C1F1C45F6BBBED8098E33F841">
<enum>(B)</enum>
<header>Certain trusts treated as beneficiaries</header>
<text display-inline="yes-display-inline">For purposes of this
paragraph, to the extent provided in rules prescribed by the Secretary, a trust
maintained for the benefit of one or more designated beneficiaries shall be
treated in the same manner as a designated beneficiary.</text>
</subparagraph></paragraph><after-quoted-block></after-quoted-block></quoted-block>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID30B560723B12493BA6DD4C80760C49B2">
<enum>(2)</enum>
<header>Section 403<enum-in-header>(a)</enum-in-header> plans</header>
<text display-inline="yes-display-inline">Subparagraph (B) of section
403(a)(4) of such Code (relating to rollover amounts) is amended by striking
<quote>and (9)</quote> and inserting <quote>, (9), and (11)</quote>.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDF36D13D423D34FA0AA17467824AC9AA8">
<enum>(3)</enum>
<header>Section 403<enum-in-header>(b)</enum-in-header> plans</header>
<text display-inline="yes-display-inline">Subparagraph (B) of section
403(b)(8) of such Code (relating to rollover amounts) is amended by striking
<quote>and (9)</quote> and inserting <quote>, (9), and (11)</quote>.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDEEF0627FBDC746118FDE83C023B7E876">
<enum>(4)</enum>
<header>Section <enum-in-header>457</enum-in-header> plans</header>
<text display-inline="yes-display-inline">Subparagraph (B) of section
457(e)(16) of such Code (relating to rollover amounts) is amended by striking
<quote>and (9)</quote> and inserting <quote>, (9), and (11)</quote>.</text>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="ID989465296BFC4A22B6EFB9002B175AFF">
<enum>(b)</enum>
<header>Effective date</header>
<text display-inline="yes-display-inline">The amendments made by this
section shall apply to distributions after December 31, 2005.</text>
</subsection></section><section commented="no" display-inline="no-display-inline" id="ID891136E35A674A94AD5D82B4FEC707F0" section-type="subsequent-section">
<enum>306.</enum>
<header>Faster vesting of employer nonelective contributions</header>
<subsection commented="no" display-inline="no-display-inline" id="ID11DB4BB6DE874D4E9C312F2D7559CC1E">
<enum>(a)</enum>
<header>Amendments to the Internal Revenue Code of 1986</header>
<paragraph commented="no" display-inline="no-display-inline" id="ID14ED5566D45C439DAEC8B2BDBC85E70A">
<enum>(1)</enum>
<header>In general</header>
<text display-inline="yes-display-inline">Paragraph (2) of section
411(a) of the Internal Revenue Code of 1986 (relating to employer
contributions) is amended to read as follows:</text>
<quoted-block display-inline="no-display-inline" id="ID4419EB8262194C9F911F5D2B5F66609B" style="OLC">
<paragraph commented="no" display-inline="no-display-inline" id="IDC6194268F3264F05BD0718139CEEBA21">
<enum>(2)</enum>
<header>Employer contributions</header>
<subparagraph commented="no" display-inline="no-display-inline" id="ID7A4223DE351B4CB2B60D759EF17C3173">
<enum>(A)</enum>
<header>Defined benefit plans</header>
<clause commented="no" display-inline="no-display-inline" id="IDAAD95AA35CFE4B7F846C4587BA82C9D7">
<enum>(i)</enum>
<header>In general</header>
<text display-inline="yes-display-inline">In the case of a defined
benefit plan, a plan satisfies the requirements of this paragraph if it
satisfies the requirements of clause (ii) or (iii).</text>
</clause><clause commented="no" display-inline="no-display-inline" id="ID0ED2E9771FBD416CAF998BFB9A62A782">
<enum>(ii)</enum>
<header>5-year vesting</header>
<text display-inline="yes-display-inline">A plan satisfies the
requirements of this clause if an employee who has completed at least 5 years
of service has a nonforfeitable right to 100 percent of the employee’s accrued
benefit derived from employer contributions.</text>
</clause><clause commented="no" display-inline="no-display-inline" id="ID5DA1EB6DE57D45E8B51F9EEB45844113">
<enum>(iii)</enum>
<header>3 to 7 year vesting</header>
<text display-inline="yes-display-inline">A plan satisfies the
requirements of this clause if an employee has a nonforfeitable right to a
percentage of the employee’s accrued benefit derived from employer
contributions determined under the following table:</text>
<table blank-lines-after="0" blank-lines-before="1" line-rules="no-gen" pgwide="1" table-type="subformat">
<tgroup cols="2">
<thead>
<row>
<entry colname="I23"></entry><entry colname="I07"><bold>The
nonforfeitable</bold>
</entry>
</row>
<row><entry colname="I23">
<bold>Years of service:</bold>
</entry>
<entry colname="I07">
<bold>percentage is: </bold>
</entry>
</row>
</thead>
<tbody>
<row>
<entry colname="I26"> 3</entry>
<entry colname="I07">20 </entry>
</row>
<row>
<entry colname="I26"> 4</entry>
<entry colname="I07">40 </entry>
</row>
<row>
<entry colname="I26"> 5</entry>
<entry colname="I07">60 </entry>
</row>
<row>
<entry colname="I26"> 6</entry>
<entry colname="I07">80 </entry>
</row>
<row>
<entry colname="I26"> 7 or more</entry>
<entry colname="I07">100.</entry>
</row>
</tbody>
</tgroup>
</table>
</clause></subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID892D1573444C4A3CB28EE6489127788E">
<enum>(B)</enum>
<header>Defined contribution plans</header>
<clause commented="no" display-inline="no-display-inline" id="ID6C61B86FAA9341099B7A2D07B80B5B00">
<enum>(i)</enum>
<header>In general</header>
<text display-inline="yes-display-inline">In the case of a defined
contribution plan, a plan satisfies the requirements of this paragraph if it
satisfies the requirements of clause (ii) or (iii).</text>
</clause><clause commented="no" display-inline="no-display-inline" id="IDE1ABBD4D495348B48AF462DC46D0D53F">
<enum>(ii)</enum>
<header>3-year vesting</header>
<text display-inline="yes-display-inline">A plan satisfies the
requirements of this clause if an employee who has completed at least 3 years
of service has a nonforfeitable right to 100 percent of the employee’s accrued
benefit derived from employer contributions.</text>
</clause><clause commented="no" display-inline="no-display-inline" id="ID942B31576BC343059A25BB44EB0A0A5D">
<enum>(iii)</enum>
<header>2 to 6 year vesting</header>
<text display-inline="yes-display-inline">A plan satisfies the
requirements of this clause if an employee has a nonforfeitable right to a
percentage of the employee’s accrued benefit derived from employer
contributions determined under the following table:</text>
<table blank-lines-after="0" blank-lines-before="1" line-rules="no-gen" table-type="subformat">
<tgroup cols="2">
<thead>
<row>
<entry colname="I23"></entry><entry colname="I07"><bold>The
nonforfeitable</bold>
</entry>
</row>
<row>
<entry colname="I23">
<bold>Years of service:</bold>
</entry>
<entry colname="I07">
<bold>percentage is: </bold>
</entry>
</row>
</thead>
<tbody>
<row>
<entry colname="I26"> 2</entry>
<entry colname="I07">20 </entry>
</row>
<row>
<entry colname="I26"> 3</entry>
<entry colname="I07">40 </entry>
</row>
<row>
<entry colname="I26"> 4</entry>
<entry colname="I07">60 </entry>
</row>
<row>
<entry colname="I26"> 5</entry>
<entry colname="I07">80 </entry>
</row>
<row>
<entry colname="I26"> 6 or more</entry>
<entry colname="I07">100.</entry>
</row>
</tbody>
</tgroup>
</table>
</clause></subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID13790BF1D4634506A3C9584DB3AD3093">
<enum>(2)</enum>
<header>Conforming amendment</header>
<text display-inline="yes-display-inline">Section 411(a) of such Code
(relating to general rule for minimum vesting standards) is amended by striking
paragraph (12).</text>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="IDE89564C27B0447D6994B163FC55BB924">
<enum>(b)</enum>
<header>Amendments to the <act-name parsable-cite="ERISA">Employee
Retirement Income Security Act of 1974</act-name></header>
<paragraph commented="no" display-inline="no-display-inline" id="ID569CAA58B2EF4E5DB694A1AE1209F1B7">
<enum>(1)</enum>
<header>In general</header>
<text display-inline="yes-display-inline">Paragraph (2) of
<external-xref legal-doc="act" parsable-cite="ERISA/203(a)">section
203(a)</external-xref> of the <act-name parsable-cite="ERISA">Employee
Retirement Income Security Act of 1974</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/29/1053(a)(2)">29 U.S.C.
1053(a)(2)</external-xref>) is amended to read as follows:</text>
<quoted-block act-name="Employee Retirement Income Security Act of 1974" display-inline="no-display-inline" id="ID7BA69CF0A39140E0A7532769917A3AB0" style="OLC">
<paragraph commented="no" display-inline="no-display-inline" id="ID568B8DE942A045399570CA63447848CE">
<enum>(2)</enum>
<subparagraph commented="no" display-inline="yes-display-inline" id="ID67E8BF8AF4264333A8C60D1DB3E9210D"><enum>(A)</enum>
<clause commented="no" display-inline="yes-display-inline" id="IDA811ABEDD5DB485C83520F3D4E3CF3C2"><enum>(i)</enum>
<text display-inline="yes-display-inline">In the case of a defined
benefit plan, a plan satisfies the requirements of this paragraph if it
satisfies the requirements of clause (ii) or (iii).</text>
</clause><clause commented="no" display-inline="no-display-inline" id="IDEA85C4CDCD8E4509921A310E418006E1" indent="up2">
<enum>(ii)</enum>
<text display-inline="yes-display-inline">A plan satisfies the
requirements of this clause if an employee who has completed at least 5 years
of service has a nonforfeitable right to 100 percent of the employee’s accrued
benefit derived from employer contributions.</text>
</clause><clause commented="no" display-inline="no-display-inline" id="ID20904F0001AB4AFD9FA763430B3C8E2B" indent="up2">
<enum>(iii)</enum>
<text display-inline="yes-display-inline">A plan satisfies the
requirements of this clause if an employee has a nonforfeitable right to a
percentage of the employee’s accrued benefit derived from employer
contributions determined under the following table:</text>
<table blank-lines-after="0" blank-lines-before="1" line-rules="no-gen" table-type="subformat">
<tgroup cols="2">
<thead>
<row>
<entry colname="I23"> </entry>
<entry colname="I07">
<bold>The nonforfeitable</bold>
</entry>
</row>
<row>
<entry colname="I23">
<bold>Years of service:</bold>
</entry>
<entry colname="I07">
<bold>percentage is: </bold>
</entry>
</row>
</thead>
<tbody>
<row>
<entry colname="I26"> 3</entry>
<entry colname="I07">20 </entry>
</row>
<row>
<entry colname="I26"> 4</entry>
<entry colname="I07">40 </entry>
</row>
<row>
<entry colname="I26"> 5</entry>
<entry colname="I07">60 </entry>
</row>
<row>
<entry colname="I26"> 6</entry>
<entry colname="I07">80 </entry>
</row>
<row>
<entry colname="I26"> 7 or more</entry>
<entry colname="I07">100.</entry>
</row>
</tbody>
</tgroup>
</table>
</clause></subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="IDBCF837D15E5049A5800D3AB72648D543" indent="up1">
<enum>(B)</enum>
<clause commented="no" display-inline="yes-display-inline" id="ID264B7DF30E3249BF9B7D0CAAF2C80CB8"><enum>(i)</enum>
<text display-inline="yes-display-inline">In the case of an
individual account plan, a plan satisfies the requirements of this paragraph if
it satisfies the requirements of clause (ii) or (iii).</text>
</clause><clause commented="no" display-inline="no-display-inline" id="IDEA9597AC5F7046969BA82D94BE0F75FE" indent="up1">
<enum>(ii)</enum>
<text display-inline="yes-display-inline">A plan satisfies the
requirements of this clause if an employee who has completed at least 3 years
of service has a nonforfeitable right to 100 percent of the employee’s accrued
benefit derived from employer contributions.</text>
</clause><clause commented="no" display-inline="no-display-inline" id="ID6C086C22BAF145BD815A2B9E6D3DD719" indent="up1">
<enum>(iii)</enum>
<text display-inline="yes-display-inline">A plan satisfies the
requirements of this clause if an employee has a nonforfeitable right to a
percentage of the employee’s accrued benefit derived from employer
contributions determined under the following table:</text>
<table blank-lines-after="0" blank-lines-before="0" line-rules="no-gen" table-type="subformat">
<tgroup cols="2">
<thead>
<row>
<entry colname="I23"> </entry>
<entry colname="I07">
<bold>The nonforfeitable</bold>
</entry>
</row>
<row>
<entry colname="I23">
<bold>Years of service:</bold>
</entry>
<entry colname="I07">
<bold>percentage is: </bold>
</entry>
</row>
</thead>
<tbody>
<row>
<entry colname="I26"> 2</entry>
<entry colname="I07">20 </entry>
</row>
<row>
<entry colname="I26"> 3</entry>
<entry colname="I07">40 </entry>
</row>
<row>
<entry colname="I26"> 4</entry>
<entry colname="I07">60 </entry>
</row>
<row>
<entry colname="I26"> 5</entry>
<entry colname="I07">80 </entry>
</row>
<row>
<entry colname="I26"> 6 or more</entry>
<entry colname="I07">100.</entry>
</row>
</tbody>
</tgroup>
</table>
</clause></subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDE4D0315C01724FC996B18DE3C0CA369C">
<enum>(2)</enum>
<header>Conforming amendment</header>
<text display-inline="yes-display-inline">Section 203(a) of such Act is
amended by striking paragraph (4).</text>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="IDBC1B245886D346A6854175D709FEB48D">
<enum>(c)</enum>
<header>Effective dates</header>
<paragraph commented="no" display-inline="no-display-inline" id="ID23918122879646C380A8D9FBEEDEDE89">
<enum>(1)</enum>
<header>In general</header>
<text display-inline="yes-display-inline">Except as provided in
paragraph (2), the amendments made by this section shall apply to contributions
for plan years beginning after December 31, 2005.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID4420C19D7CFC4849BF9FAEF478239341">
<enum>(2)</enum>
<header>Collective bargaining agreements</header>
<text display-inline="yes-display-inline">In the case of a plan
maintained pursuant to one or more collective bargaining agreements between
employee representatives 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 contributions on behalf of employees covered by any such agreement for plan
years beginning before the earlier of—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="ID229D2F28B50542C9A7D95DC9A1090716">
<enum>(A)</enum>
<text display-inline="yes-display-inline">the later of—</text>
<clause commented="no" display-inline="no-display-inline" id="ID9CE39868719D40FDB7CFBD183756B761">
<enum>(i)</enum>
<text display-inline="yes-display-inline">the date on which the last of
such collective bargaining agreements terminates (determined without regard to
any extension thereof on or after such date of the enactment); or</text>
</clause><clause commented="no" display-inline="no-display-inline" id="IDBDB491270DB94DD4AEBFE984EADD9233">
<enum>(ii)</enum>
<text display-inline="yes-display-inline">January 1, 2006; or</text>
</clause></subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID50EA549A4DAA4D5693D106C11D73DF0E">
<enum>(B)</enum>
<text display-inline="yes-display-inline">January 1, 2008.</text>
</subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID57B97FC964C24403AAE8A5DC55CF3977">
<enum>(3)</enum>
<header>Service required</header>
<text display-inline="yes-display-inline">With respect to any plan, the
amendments made by this section shall not apply to any employee before the date
that such employee has 1 hour of service under such plan in any plan year to
which the amendments made by this section apply.</text>
</paragraph></subsection></section><section commented="no" display-inline="no-display-inline" id="ID8E51ED2BC1684C9E8A9428CF30CE7CD2" section-type="subsequent-section">
<enum>307.</enum>
<header>Allow direct rollovers from retirement plans to Roth
IRAs</header>
<subsection commented="no" display-inline="no-display-inline" id="IDC38801010091487BBF07CAF168BF3204">
<enum>(a)</enum>
<header>In general</header>
<text display-inline="yes-display-inline">Subsection (e) of section
408A of the Internal Revenue Code of 1986 (defining qualified rollover
contribution) is amended to read as follows:</text>
<quoted-block display-inline="no-display-inline" id="ID308EC0E050274EA79603591BC4EA6D44" style="OLC">
<subsection commented="no" display-inline="no-display-inline" id="ID4E01F3C66D7A4A3AB09B5052D2774DB2">
<enum>(e)</enum>
<header>Qualified rollover contribution</header>
<text display-inline="yes-display-inline">For purposes of this
section, the term <term>qualified rollover contribution</term> means a rollover
contribution—</text>
<paragraph commented="no" display-inline="no-display-inline" id="IDD58A59B2A68B4E2D92F70D624E352435">
<enum>(1)</enum>
<text display-inline="yes-display-inline">to a Roth IRA from another
such account,</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDA6B70BBF41974C3999C2C1D34B1C59B4">
<enum>(2)</enum>
<text display-inline="yes-display-inline">from an eligible retirement
plan, but only if—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="ID73108BB0E01D46AFB106145068CC6D8A">
<enum>(A)</enum>
<text display-inline="yes-display-inline">in the case of an
individual retirement plan, such rollover contribution meets the requirements
of section 408(d)(3), and</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID63EC43544ACD4FBFB06A1AA2D60900DA">
<enum>(B)</enum>
<text display-inline="yes-display-inline">in the case of any eligible
retirement plan (as defined in section 402(c)(8)(B) other than clauses (i) and
(ii) thereof), such rollover contribution meets the requirements of section
402(c), 403(b)(8), or 457(e)(16), as applicable.</text>
</subparagraph></paragraph><continuation-text commented="no" continuation-text-level="subsection">For purposes of section
408(d)(3)(B), there shall be disregarded any qualified rollover contribution
from an individual retirement plan (other than a Roth IRA) to a Roth
IRA.</continuation-text></subsection><after-quoted-block></after-quoted-block></quoted-block>
</subsection><subsection commented="no" display-inline="no-display-inline" id="IDCF2275307E49486B839A1BAF8861B63E">
<enum>(b)</enum>
<header>Conforming amendments</header>
<paragraph commented="no" display-inline="no-display-inline" id="ID4449CF80B0C34B4BA4BA2FE8567F2119">
<enum>(1)</enum>
<text display-inline="yes-display-inline">Section 408A(c)(3)(B) of such
Code is amended—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="IDE42FE93D3B504CA9B671902D4C1AFE6B">
<enum>(A)</enum>
<text display-inline="yes-display-inline">in the text by striking
<quote>individual retirement plan</quote> and inserting <quote>an eligible
retirement plan (as defined by section 402(c)(8)(B))</quote>, and</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="IDB228C8EA878B4E00B9A27B404F33A17E">
<enum>(B)</enum>
<text display-inline="yes-display-inline">in the heading by striking
<quote><header-in-text level="subsection" style="OLC">IRA</header-in-text></quote> and inserting <quote><header-in-text level="subsection" style="OLC">eligible retirement
plan</header-in-text></quote>.</text>
</subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDC8DE52C51EEE4B7E9B88ECCF08D2ED38">
<enum>(2)</enum>
<text display-inline="yes-display-inline">Section 408A(d)(3) of such
Code is amended—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="IDB9EE513240CA43558F24C738CFED1B11">
<enum>(A)</enum>
<text display-inline="yes-display-inline">in subparagraph (A), by
striking <quote>section 408(d)(3)</quote> inserting <quote>sections 402(c),
403(b)(8), 408(d)(3), and 457(e)(16)</quote>,</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID202FA290AB684C88BC080C9BFC4F6CA0">
<enum>(B)</enum>
<text display-inline="yes-display-inline">in subparagraph (B), by
striking <quote>individual retirement plan</quote> and inserting
<quote>eligible retirement plan (as defined by section
402(c)(8)(B))</quote>,</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID9ACA52945D60415DBE82E47F9B4094F3">
<enum>(C)</enum>
<text display-inline="yes-display-inline">in subparagraph (D), by
inserting <quote>or 6047</quote> after <quote>408(i)</quote>,</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID95EA41B1C5054CCDBB83B0511A351AC5">
<enum>(D)</enum>
<text display-inline="yes-display-inline">in subparagraph (D), by
striking <quote>or both</quote> and inserting <quote>persons subject to section
6047(d)(1), or all of the foregoing persons</quote>, and</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="IDAF605CEEDBA34622B4F8184CA9D3921B">
<enum>(E)</enum>
<text display-inline="yes-display-inline">in the heading, by striking
<quote><header-in-text level="subsection" style="OLC">IRA</header-in-text></quote> and inserting <quote><header-in-text level="subsection" style="OLC">eligible retirement
plan</header-in-text></quote>.</text>
</subparagraph></paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="ID33E0007FF68D4218922DFE2F86E032FB">
<enum>(c)</enum>
<header>Effective date</header>
<text display-inline="yes-display-inline">The amendments made by this
section shall apply to distributions after December 31, 2005.</text>
</subsection></section><section commented="no" display-inline="no-display-inline" id="ID419F78278ED744619D4E8A6B27A090F4" section-type="subsequent-section">
<enum>308.</enum>
<header>Elimination of higher penalty on certain simple plan
distributions</header>
<subsection commented="no" display-inline="no-display-inline" id="IDFB43EB6BDC1F4F4693D48D2CACADC815">
<enum>(a)</enum>
<header>In general</header>
<text display-inline="yes-display-inline">Subsection (t) of section 72
of the Internal Revenue Code of 1986 (relating to 10-percent additional tax on
early distributions from qualified retirement plans), as amended by section
304, is amended by striking paragraph (6) and redesignating paragraphs (7),
(8), (9), and (10) as paragraphs (6), (7), (8), and (9), respectively.</text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="IDD640F265E9C748B0BB491ECA765D9A4B">
<enum>(b)</enum>
<header>Conforming amendments</header>
<paragraph commented="no" display-inline="no-display-inline" id="IDC51770152A6144009BEA888EB9D38C09">
<enum>(1)</enum>
<text display-inline="yes-display-inline">Section 72(t)(2)(E) of such
Code is amended by striking <quote>paragraph (7)</quote> and inserting
<quote>paragraph (6)</quote>.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDE516753E3ADA4B599B4BDCAAE2EE92FA">
<enum>(2)</enum>
<text display-inline="yes-display-inline">Section 72(t)(2)(F) of such
Code is amended by striking <quote>paragraph (8)</quote> and inserting
<quote>paragraph (7)</quote>.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDD4E7167116AE4C998778E686840613D9">
<enum>(3)</enum>
<text display-inline="yes-display-inline">Section 408(d)(3)(G) of such
Code is amended by striking <quote>applies</quote> and inserting <quote>applied
on the day before the date of the enactment of the National Employee Savings
and Trust Equity Guarantee Act of 2005)</quote>.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID887657BC7C374E1290E3D44D3E447351">
<enum>(4)</enum>
<text display-inline="yes-display-inline">Section 457(a)(2) of such
Code is amended by striking <quote>section 72(t)(9)</quote> and inserting
<quote>section 72(t)(8)</quote>.</text>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="ID7671AE7A47AC4A82B207A33DAD83C650">
<enum>(c)</enum>
<header>Effective date</header>
<text display-inline="yes-display-inline">The amendments made by this
section shall apply to years beginning after December 31, 2005.</text>
</subsection></section><section commented="no" display-inline="no-display-inline" id="ID6C8119878B20417DA17866FF8DFF078C" section-type="subsequent-section">
<enum>309.</enum>
<header>Simple plan portability</header>
<subsection commented="no" display-inline="no-display-inline" id="ID6C99FA183FA84E87B7C81184366E42F3">
<enum>(a)</enum>
<header>Repeal of limitation</header>
<text display-inline="yes-display-inline">Paragraph (3) of section
408(d) of the Internal Revenue Code of 1986 (relating to rollover
contributions), as amended by this Act, is amended by striking subparagraph (G)
and redesignating subparagraphs (H) and (I) as subparagraphs (G) and (H),
respectively.</text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="ID353916E51B764957AA4EA81852A0FCAB">
<enum>(b)</enum>
<header>Effective date</header>
<text display-inline="yes-display-inline">The amendment made by this
section shall apply to years beginning after December 31, 2005.</text>
</subsection></section><section commented="no" display-inline="no-display-inline" id="ID64929E38E85047E9B9D632EF9DD16077" section-type="subsequent-section">
<enum>310.</enum>
<header>Eligibility for participation in retirement plans</header>
<text display-inline="no-display-inline">An individual shall not be
precluded from participating in an eligible deferred compensation plan by
reason of having received a distribution under section 457(e)(9) of the
Internal Revenue Code of 1986, as in effect prior to the enactment of the Small
Business Job Protection Act of 1996.</text>
</section><section commented="no" display-inline="no-display-inline" id="IDB90B8B440D5741D9966373B9B9C17962" section-type="subsequent-section">
<enum>311.</enum>
<header>Transfers to the PBGC</header>
<subsection commented="no" display-inline="no-display-inline" id="IDAD792383659A44C59004907F88E90F28">
<enum>(a)</enum>
<header>Mandatory distributions to PBGC</header>
<text display-inline="yes-display-inline">Clause (i) of section
401(a)(31)(B) of the Internal Revenue Code of 1986 (relating to general rule
for certain mandatory distributions) is amended by inserting <quote>to the
Pension Benefit Guaranty Corporation in accordance with
<external-xref legal-doc="act" parsable-cite="ERISA/4050(e)">section
4050(e)</external-xref> of the <act-name parsable-cite="ERISA">Employee
Retirement Income Security Act of 1974</act-name> or</quote> after <quote>such
transfer</quote>.</text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="ID72265D369EFB492D81CD65083A5A5BA2">
<enum>(b)</enum>
<header>Tax treatment of distributions</header>
<text display-inline="yes-display-inline">Subparagraph (B) of section
401(a)(31) of such Code is amended by adding at the end the following new
clause:</text>
<quoted-block display-inline="no-display-inline" id="ID9E6D3A6032F4483BA75FBD96A656C9F0" style="OLC">
<clause commented="no" display-inline="no-display-inline" id="IDD210B6FDC29D4C0D9EB99D942ADADB26">
<enum>(iii)</enum>
<header>Income tax treatment of transfers to PBGC</header>
<text display-inline="yes-display-inline">For purposes of determining
the income tax treatment relating to transfers to the Pension Benefit Guaranty
Corporation under clause (i)—</text>
<subclause commented="no" display-inline="no-display-inline" id="ID30B238B8B5E2432AB08442E16A480B74">
<enum>(I)</enum>
<text display-inline="yes-display-inline">the transfer of amounts to
the Pension Benefit Guaranty Corporation pursuant to clause (i) shall be
treated as a transfer to an individual retirement plan under such clause,
and</text>
</subclause><subclause commented="no" display-inline="no-display-inline" id="IDCEA385BF4B7C4A6DADC1AB0965FC507F">
<enum>(II)</enum>
<text display-inline="yes-display-inline">the distribution of such
amounts from the Pension Benefit Guaranty Corporation shall be treated as a
distribution from an individual retirement plan.</text>
</subclause></clause><after-quoted-block></after-quoted-block></quoted-block>
</subsection><subsection commented="no" display-inline="no-display-inline" id="ID2B7BBCDEA39C4D398FB7DD1145779D06">
<enum>(c)</enum>
<header>Missing participants and beneficiaries</header>
<text display-inline="yes-display-inline">
<external-xref legal-doc="act" parsable-cite="ERISA/4050">Section
4050</external-xref> of the <act-name parsable-cite="ERISA">Employee Retirement
Income Security Act of 1974</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/29/1350">29 U.S.C. 1350</external-xref>), as amended by
section 312, is amended by redesignating subsection (e) as subsection (f) and
by inserting after subsection (d) the following new subsection:</text>
<quoted-block act-name="Employee Retirement Income Security Act of 1974" display-inline="no-display-inline" id="IDEEF55153F35548FCAE7B0ECA66078209" style="OLC">
<subsection commented="no" display-inline="no-display-inline" id="ID6B05EDA2051C4AB390D20943EBE881E9">
<enum>(e)</enum>
<header>Involuntary cashouts</header>
<paragraph commented="no" display-inline="no-display-inline" id="ID0A0A8500A16544E09EA672066C358A87">
<enum>(1)</enum>
<header>Payment by the Corporation</header>
<text display-inline="yes-display-inline">If benefits under a plan
described in paragraph (3) were transferred to the corporation under section
401(a)(31)(B) of the Internal Revenue Code of 1986, the corporation shall, upon
application filed by the participant or beneficiary with the corporation in
such form and manner as may be prescribed in regulations of the corporation,
pay to the participant or beneficiary the amount transferred (or the
appropriate survivor benefit) either—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="ID2044CE388C1E492B823EE033FED468F5">
<enum>(A)</enum>
<text display-inline="yes-display-inline">in a single sum (plus
interest), or</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID30C09ADBB02B4B51963592209415609E">
<enum>(B)</enum>
<text display-inline="yes-display-inline">in such other form as is
specified in regulations of the corporation.</text>
</subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDBD0EA4AFFF63468D93C44786F54D807E">
<enum>(2)</enum>
<header>Information to the Corporation</header>
<text display-inline="yes-display-inline">To the extent provided in
regulations, the plan administrator of a plan described in paragraph (3) shall,
upon a transfer of benefits to the corporation under section 401(a)(31)(B) of
such Code, provide the corporation information with respect to benefits of the
participant or beneficiary so transferred.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID7291951304B344C4AF7AF0C7E3409FC0">
<enum>(3)</enum>
<header>Plans described</header>
<text display-inline="yes-display-inline">A plan is described in this
paragraph if the plan is a pension plan (within the meaning of section
3(2))—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="IDA527C4C908B54296AC0B975B4E3E6EFD">
<enum>(A)</enum>
<text display-inline="yes-display-inline">which provides for
mandatory distributions under section 401(a)(31)(B) of the Internal Revenue
Code of 1986, and</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID7F668C9BB9F842BE97985B3F061B1D79">
<enum>(B)</enum>
<text display-inline="yes-display-inline">which is not a plan
described in paragraphs (2) through (11) of section 4021(b).</text>
</subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDF2A110521DCF4C7FB6D026A7858634B5">
<enum>(4)</enum>
<header>Certain provisions not to apply</header>
<text display-inline="yes-display-inline">Subsections (a)(1) and
(a)(3) shall not apply to a plan described in paragraph (3).</text>
</paragraph></subsection><after-quoted-block></after-quoted-block></quoted-block>
</subsection><subsection commented="no" display-inline="no-display-inline" id="ID23AB520F032E4F3D8ABFF5C34BD13AF7">
<enum>(d)</enum>
<header>Effective dates</header>
<paragraph commented="no" display-inline="no-display-inline" id="IDC0D31CC889974017B4FDDD78B695B3FD">
<enum>(1)</enum>
<header>Internal Revenue Code provisions</header>
<text display-inline="yes-display-inline">The amendments made by
subsections (a) and (b) shall take effect as if included in the amendments made
by section 657 of the Economic Growth and Tax Relief Reconciliation Act of
2001.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID3DDE7BD3AAC64A62B8E6A1085F34980D">
<enum>(2)</enum>
<header>
<act-name parsable-cite="ERISA">Employee Retirement Income
Security Act of 1974</act-name> provisions</header>
<text display-inline="yes-display-inline">The amendments made by
subsection (c) shall apply to distributions made after final regulations
implementing subsection (e) of section 4050 of the
<act-name parsable-cite="ERISA">Employee Retirement Income Security Act of
1974</act-name> (as added by subsection (c)) are prescribed.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID279CF0051A5B49F1ABB7F37E7B612CA7">
<enum>(3)</enum>
<header>Regulations</header>
<text display-inline="yes-display-inline">The Pension Benefit Guaranty
Corporation shall issue regulations necessary to carry out the amendments made
by subsection (c) not later than December 31, 2006.</text>
</paragraph></subsection></section><section commented="no" display-inline="no-display-inline" id="IDA6AC6F8D58A94446BC8D891F0B570DC2" section-type="subsequent-section">
<enum>312.</enum>
<header>Missing participants</header>
<subsection commented="no" display-inline="no-display-inline" id="IDEB62B8866CF5469EB60B11D9F9C7C08F">
<enum>(a)</enum>
<header>In general</header>
<text display-inline="yes-display-inline">
<external-xref legal-doc="act" parsable-cite="ERISA/4050">Section
4050</external-xref> of the <act-name parsable-cite="ERISA">Employee Retirement
Income Security Act of 1974</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/29/1350">29 U.S.C. 1350</external-xref>) is amended by
redesignating subsection (c) as subsection (e) and by inserting after
subsection (b) the following new subsections:</text>
<quoted-block act-name="Employee Retirement Income Security Act of 1974" display-inline="no-display-inline" id="IDA0C7F5ACA4E74911A437BBD265C18D8D" style="OLC">
<subsection commented="no" display-inline="no-display-inline" id="ID2745D0392DCD40C48EAB7B8C137AA4F2">
<enum>(c)</enum>
<header>Multiemployer plans</header>
<text display-inline="yes-display-inline">The corporation shall
prescribe rules similar to the rules in subsection (a) for multiemployer plans
covered by this title that terminate under section 4041A.</text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="ID2B0E7A1CCF474F49B48DEAD9C773012D">
<enum>(d)</enum>
<header>Plans not otherwise subject to title</header>
<paragraph commented="no" display-inline="no-display-inline" id="IDD72240EF1B98460E9C51FC8A14B73144">
<enum>(1)</enum>
<header>Transfer to Corporation</header>
<text display-inline="yes-display-inline">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.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID701CCB68AD5F414C8FE56BD622351C19">
<enum>(2)</enum>
<header>Information to the Corporation</header>
<text display-inline="yes-display-inline">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—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="IDC544169BE3034CD99E18E33C4351640B">
<enum>(A)</enum>
<text display-inline="yes-display-inline">to the corporation,
or</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID42E287D121264945922C7A6E8247E80E">
<enum>(B)</enum>
<text display-inline="yes-display-inline">to an entity other than the
corporation or a plan described in paragraph (4)(B)(ii).</text>
</subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID74CB13A3CC874B0397FCAA2654A989BD">
<enum>(3)</enum>
<header>Payment by the Corporation</header>
<text display-inline="yes-display-inline">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—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="IDABBF98A9304F43E9BDD248DE78F64FBC">
<enum>(A)</enum>
<text display-inline="yes-display-inline">in a single sum (plus
interest), or</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID17958781B03544E28691B0D78DECFC79">
<enum>(B)</enum>
<text display-inline="yes-display-inline">in such other form as is
specified in regulations of the corporation.</text>
</subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDB2F22EBD2ED64C828072A8ACB706D63C">
<enum>(4)</enum>
<header>Plans described</header>
<text display-inline="yes-display-inline">A plan is described in this
paragraph if—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="ID731D556DC7274CC093D8D9E44804502E">
<enum>(A)</enum>
<text display-inline="yes-display-inline">the plan is a pension plan
(within the meaning of section 3(2))—</text>
<clause commented="no" display-inline="no-display-inline" id="ID0D161B40CF6542AE84FF47A4E941C00F">
<enum>(i)</enum>
<text display-inline="yes-display-inline">to which the provisions of
this section do not apply (without regard to this subsection), and</text>
</clause><clause commented="no" display-inline="no-display-inline" id="ID4EF860C5D1C34AE1BEF7886FA362E866">
<enum>(ii)</enum>
<text display-inline="yes-display-inline">which is not a plan
described in paragraphs (2) through (11) of section 4021(b), and</text>
</clause></subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID49B1FEC75F954DFDB6695EDEC888A515">
<enum>(B)</enum>
<text display-inline="yes-display-inline">at the time the assets are
to be distributed upon termination, the plan—</text>
<clause commented="no" display-inline="no-display-inline" id="IDA7C507C857054D81B294B73F593B99E5">
<enum>(i)</enum>
<text display-inline="yes-display-inline">has missing participants,
and</text>
</clause><clause commented="no" display-inline="no-display-inline" id="ID3F3A51907CCE43F189842257A36FC634">
<enum>(ii)</enum>
<text display-inline="yes-display-inline">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)).</text>
</clause></subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID1B22DEFA14E64984A4EF3D3421CFF3E2">
<enum>(5)</enum>
<header>Certain provisions not to apply</header>
<text display-inline="yes-display-inline">Subsections (a)(1) and
(a)(3) shall not apply to a plan described in paragraph (4).</text>
</paragraph></subsection><after-quoted-block></after-quoted-block></quoted-block>
</subsection><subsection commented="no" display-inline="no-display-inline" id="ID09717EE1EF344BE38DD6A8BFA8929F43">
<enum>(b)</enum>
<header>Conforming amendments</header>
<text display-inline="yes-display-inline">Section 206(f) of such Act
(<external-xref legal-doc="usc" parsable-cite="usc/29/1056(f)">29 U.S.C.
1056(f)</external-xref>) is amended—</text>
<paragraph commented="no" display-inline="no-display-inline" id="IDEA3E521F1BC149C39300B7768E33FA5D">
<enum>(1)</enum>
<text display-inline="yes-display-inline">by striking <quote>title
IV</quote> and inserting <quote>section 4050</quote>; and</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDD5BA94F9DE8C42F99F2AD718FD9DD0DE">
<enum>(2)</enum>
<text display-inline="yes-display-inline">by striking <quote>the plan
shall provide that,</quote>.</text>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="IDF5DE48898B064C328355A13E63D23A83">
<enum>(c)</enum>
<header>Effective date</header>
<text display-inline="yes-display-inline">The amendments made by this
section shall apply to distributions made after final regulations implementing
subsections (c) and (d) of section 4050 of the <act-name parsable-cite="ERISA">Employee Retirement Income Security Act of
1974</act-name> (as added by subsection (a)), respectively, are
prescribed.</text>
</subsection></section>
<enum>IV</enum>
<header>Administrative provisions</header>
<section commented="no" display-inline="no-display-inline" id="IDA9A2F9460061426B9C1C2908603D1359" section-type="subsequent-section">
<enum>401.</enum>
<header>Employee Plans Compliance Resolution System</header>
<subsection commented="no" display-inline="no-display-inline" id="IDDAB0E6E298174CC882783FCDDB3C887C">
<enum>(a)</enum>
<header>In general</header>
<text display-inline="yes-display-inline">The Secretary of the Treasury
shall have full authority to establish and implement the Employee Plans
Compliance Resolution System (or any successor program) and any other employee
plans correction policies, including the authority to waive income, excise, or
other taxes to ensure that any tax, penalty, or sanction is not excessive and
bears a reasonable relationship to the nature, extent, and severity of the
failure.</text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="IDFD0E9098707944BFB682EEC7DF8EBA7D">
<enum>(b)</enum>
<header>Improvements</header>
<text display-inline="yes-display-inline">The Secretary of the Treasury
shall continue to update and improve the Employee Plans Compliance Resolution
System (or any successor program), giving special attention to—</text>
<paragraph commented="no" display-inline="no-display-inline" id="ID8015BEEBFBC84EAAB19A15A15C1F760A">
<enum>(1)</enum>
<text display-inline="yes-display-inline">increasing the awareness and
knowledge of small employers concerning the availability and use of the
program;</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDAEAE980D6F3C48B8A3B16F4083277406">
<enum>(2)</enum>
<text display-inline="yes-display-inline">taking into account special
concerns and circumstances that small employers face with respect to compliance
and correction of compliance failures;</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID3DF729626BA2429790432BB76AE2EE3C">
<enum>(3)</enum>
<text display-inline="yes-display-inline">extending the duration of the
self-correction period under the Self-Correction Program for significant
compliance failures;</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID9C872401EEDE45D1A16FC0ECE457ED62">
<enum>(4)</enum>
<text display-inline="yes-display-inline">expanding the availability to
correct insignificant compliance failures under the Self-Correction Program
during audit; and</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDAA0317AD72D24600A4AF52967B00C2D0">
<enum>(5)</enum>
<text display-inline="yes-display-inline">assuring that any tax,
penalty, or sanction that is imposed by reason of a compliance failure is not
excessive and bears a reasonable relationship to the nature, extent, and
severity of the failure.</text>
</paragraph></subsection></section><section commented="no" display-inline="no-display-inline" id="ID02262C5752B043EC86C73F2DFAEF7B1F" section-type="subsequent-section">
<enum>402.</enum>
<header>Extension to all governmental plans of moratorium on
application of certain nondiscrimination rules applicable to State and local
plans</header>
<subsection commented="no" display-inline="no-display-inline" id="ID8DDFFE5A1C6C40228C6480245CEFFA46">
<enum>(a)</enum>
<header>In general</header>
<text display-inline="yes-display-inline">The following provisions are
each amended by striking <quote>maintained by a State or local government or
political subdivision thereof (or agency or instrumentality
thereof)</quote>:</text>
<paragraph commented="no" display-inline="no-display-inline" id="IDA6B86D18BEAE4090931E631A8261A188">
<enum>(1)</enum>
<text display-inline="yes-display-inline">Section 401(a)(5)(G) of the
Internal Revenue Code of 1986.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID362769DFFA77486AAC811CEDEA7966AD">
<enum>(2)</enum>
<text display-inline="yes-display-inline">Section 401(a)(26)(H) of such
Code.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID2AF1B2C2A38B47389B6CD154297D21A4">
<enum>(3)</enum>
<text display-inline="yes-display-inline">Section 401(k)(3)(G) of such
Code.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID1314D657CCA7470695E565BC2F6A1FB0">
<enum>(4)</enum>
<text display-inline="yes-display-inline">Section 1505(d)(2) of the
Taxpayer Relief Act of 1997.</text>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="ID5E5472C3BFB34BC1A608ED780AAFEC0F">
<enum>(b)</enum>
<header>Conforming amendments</header>
<paragraph commented="no" display-inline="no-display-inline" id="ID15304625503B4B7A8EE537F2A3A33696">
<enum>(1)</enum>
<text display-inline="yes-display-inline">The heading for section
401(a)(5)(G) of such Code is amended to read as follows: <quote><header-in-text level="subsection" style="OLC">Governmental
plans</header-in-text>.—</quote>.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDD523316EED8240468A7513E580E11D37">
<enum>(2)</enum>
<text display-inline="yes-display-inline">The heading for section
401(a)(26)(H) of such Code is amended to read as follows:
<quote><header-in-text level="subsection" style="OLC">Exception for
governmental plans</header-in-text>.—</quote>.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID525AE52E4E4B4B8EBF17471F39587AE8">
<enum>(3)</enum>
<text display-inline="yes-display-inline">Section 401(k)(3)(G) of such
Code is amended by inserting <quote><header-in-text level="subsection" style="OLC">Governmental plans</header-in-text>.—</quote> after
<quote>(G)</quote>.</text>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="ID011F33D21AE0457FAA9B8F7726517F6C">
<enum>(c)</enum>
<header>Effective date</header>
<text display-inline="yes-display-inline">The amendments made by this
section shall apply to plan years beginning after December 31, 2005.</text>
</subsection></section><section commented="no" display-inline="no-display-inline" id="ID97A01B5EF7A247CEB47D923083197CC8" section-type="subsequent-section">
<enum>403.</enum>
<header>Notice and consent period regarding distributions</header>
<subsection commented="no" display-inline="no-display-inline" id="IDE5AFDDBF047345E99B5CB7533C8FA78B">
<enum>(a)</enum>
<header>Expansion of period</header>
<paragraph commented="no" display-inline="no-display-inline" id="ID850353C5A7A14F18BD1E0DBEB7F56A5A">
<enum>(1)</enum>
<header>Amendment of Internal Revenue Code</header>
<subparagraph commented="no" display-inline="no-display-inline" id="ID315C74E5C5C447F8844B7C0754F8957C">
<enum>(A)</enum>
<header>In general</header>
<text display-inline="yes-display-inline">Section 417(a)(6)(A) of the
Internal Revenue Code of 1986 is amended by striking <quote>90-day</quote> and
inserting <quote>180-day</quote>.</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="IDCA95E94A64CD435F9F35AB4B3D61EC73">
<enum>(B)</enum>
<header>Modification of regulations</header>
<text display-inline="yes-display-inline">The Secretary of the Treasury
shall modify the regulations under sections 402(f), 411(a)(11), and 417 of the
Internal Revenue Code of 1986 by substituting <quote>180 days</quote> for
<quote>90 days</quote> each place it appears in Treasury Regulations sections
1.402(f)–1, 1.411(a)–11(c), and 1.417(e)–1(b).</text>
</subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDD6184CFF9F464127AA98293B61E3EE74">
<enum>(2)</enum>
<header>Amendment of ERISA</header>
<subparagraph commented="no" display-inline="no-display-inline" id="IDE8FEBC2C498343559DA8B1F9DE8B3164">
<enum>(A)</enum>
<header>In general</header>
<text display-inline="yes-display-inline">
<external-xref legal-doc="act" parsable-cite="ERISA/205(c)(7)(A)">Section
205(c)(7)(A)</external-xref> of the <act-name parsable-cite="ERISA">Employee
Retirement Income Security Act of 1974</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/29/1055(c)(7)(A)">29 U.S.C.
1055(c)(7)(A)</external-xref>) is amended by striking <quote>90-day</quote> and
inserting <quote>180-day</quote>.</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID33C7C45E3DB642F4AC98487EEAD0B4DE">
<enum>(B)</enum>
<header>Modification of regulations</header>
<text display-inline="yes-display-inline">The Secretary of the Treasury
shall modify the regulations under part 2 of subtitle B of title I of the
<act-name parsable-cite="ERISA">Employee Retirement Income Security Act of
1974</act-name> relating to sections 203(e) and 205 of such Act by substituting
<quote>180 days</quote> for <quote>90 days</quote> each place it
appears.</text>
</subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID57012D29C069425F97C5D6BB5BC9B7F9">
<enum>(3)</enum>
<header>Effective date</header>
<text display-inline="yes-display-inline">The amendments and
modifications made or required by this subsection shall apply to years
beginning after December 31, 2005.</text>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="IDB41F66D51E774AABA8BB34623006927C">
<enum>(b)</enum>
<header>Notification of right to defer</header>
<paragraph commented="no" display-inline="no-display-inline" id="ID57036F5F31A14B2C96359B7C173F91E9">
<enum>(1)</enum>
<header>In general</header>
<text display-inline="yes-display-inline">The Secretary of the Treasury
shall modify the regulations under section 411(a)(11) of the Internal Revenue
Code of 1986 and under <external-xref legal-doc="act" parsable-cite="ERISA/205">section 205</external-xref> of the
<act-name parsable-cite="ERISA">Employee Retirement Income Security Act of
1974</act-name> to provide that the description of a participant’s right, if
any, to defer receipt of a distribution shall also describe the consequences of
failing to defer such receipt.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID21FA68E089C5473B8E6C339068FB0E5E">
<enum>(2)</enum>
<header>Effective date</header>
<subparagraph commented="no" display-inline="no-display-inline" id="ID03027AE85791426CAE0A7C9B6EE7D265">
<enum>(A)</enum>
<header>In general</header>
<text display-inline="yes-display-inline">The modifications required by
paragraph (1) shall apply to years beginning after December 31, 2005.</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID65441128C1204DD9B6BC970F14399F56">
<enum>(B)</enum>
<header>Reasonable notice</header>
<text display-inline="yes-display-inline">A plan shall not be treated
as failing to meet the requirements of section 411(a)(11) of such Code or
section 205 of such Act with respect to any description of consequences
described in paragraph (1) made within 90 days after the Secretary of the
Treasury issues the modifications required by paragraph (1) if the plan
administrator makes a reasonable attempt to comply with such
requirements.</text>
</subparagraph></paragraph></subsection></section><section commented="no" display-inline="no-display-inline" id="ID460ADC5698C84240A4E1204E02137611" section-type="subsequent-section">
<enum>404.</enum>
<header>Reporting simplification</header>
<subsection commented="no" display-inline="no-display-inline" id="ID06D324D891214EE788BE8C66D5DCE67A">
<enum>(a)</enum>
<header>Simplified annual filing requirement for owners and their
spouses</header>
<paragraph commented="no" display-inline="no-display-inline" id="ID8432A07C4A6D4E52B88C41BA134FF5F1">
<enum>(1)</enum>
<header>In general</header>
<text display-inline="yes-display-inline">The Secretary of the Treasury
and the Secretary of Labor shall modify the requirements for filing annual
returns with respect to one-participant retirement plans to ensure that such
plans with assets of $250,000 or less as of the close of the plan year need not
file a return for that year.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDCD675A1AABDB4546878C9DBAC5F5D456">
<enum>(2)</enum>
<header>One-participant retirement plan defined</header>
<text display-inline="yes-display-inline">For purposes of this
subsection, the term <term>one-participant retirement plan</term> means a
retirement plan with respect to which the following requirements are
met:</text>
<subparagraph commented="no" display-inline="no-display-inline" id="IDB4DF6CB756D44544A4FE28406AADF47A">
<enum>(A)</enum>
<text display-inline="yes-display-inline">on the first day of the plan
year—</text>
<clause commented="no" display-inline="no-display-inline" id="ID9A50331FAE0843FA9D3377C9EA0D0936">
<enum>(i)</enum>
<text display-inline="yes-display-inline">the plan covered only one
individual (or the individual and the individual’s spouse) and the individual
owned 100 percent of the plan sponsor (whether or not incorporated), or</text>
</clause><clause commented="no" display-inline="no-display-inline" id="ID67002E8957A34A2FB6DD1E2DC0824343">
<enum>(ii)</enum>
<text display-inline="yes-display-inline">the plan covered only one or
more partners (or partners and their spouses) in the plan sponsor;</text>
</clause></subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID8CC587D4520D45C1A96D8E3B257211B6">
<enum>(B)</enum>
<text display-inline="yes-display-inline">the plan meets the minimum
coverage requirements of section 410(b) of the Internal Revenue Code of 1986
without being combined with any other plan of the business that covers the
employees of the business;</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="IDC18FD0DBA5FA45B1BC55D9EB69BBADF8">
<enum>(C)</enum>
<text display-inline="yes-display-inline">the plan does not provide
benefits to anyone except the individual (and the individual’s spouse) or the
partners (and their spouses);</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID62818B82B9DE4F45BBBD9F2CF8D9CE0D">
<enum>(D)</enum>
<text display-inline="yes-display-inline">the plan does not cover a
business that is a member of an affiliated service group, a controlled group of
corporations, or a group of businesses under common control; and</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="IDAC7292AC41104F51960474C60AFCDE7E">
<enum>(E)</enum>
<text display-inline="yes-display-inline">the plan does not cover a
business that uses the services of leased employees (within the meaning of
section 414(n) of such Code).</text>
</subparagraph><continuation-text commented="no" continuation-text-level="paragraph">For purposes of this paragraph, the
term <quote>partner</quote> includes a 2-percent shareholder (as defined in
section 1372(b) of such Code) of an S corporation.</continuation-text></paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID4201840FF01E48F4AFE62E360CCE2BFB">
<enum>(3)</enum>
<header>Other definitions</header>
<text display-inline="yes-display-inline">Terms used in paragraph (2)
which are also used in section 414 of the Internal Revenue Code of 1986 shall
have the respective meanings given such terms by such section.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID5072A2EF7BEA43A7B1FFDDA485758F88">
<enum>(4)</enum>
<header>Effective date</header>
<text display-inline="yes-display-inline">The provisions of this
subsection shall apply to plan years beginning on or after January 1,
2006.</text>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="IDE5EE40923E964A9494FBA449D26619FA">
<enum>(b)</enum>
<header>Simplified annual filing requirement for plans with fewer than
25 employees</header>
<text display-inline="yes-display-inline">In the case of plan years
beginning after December 31, 2006, the Secretary of the Treasury and the
Secretary of Labor shall provide for the filing of a simplified annual return
for any retirement plan which covers less than 25 employees on the first day of
a plan year and which meets the requirements described in subparagraphs (B),
(D), and (E) of subsection (a)(2).</text>
</subsection></section><section commented="no" display-inline="no-display-inline" id="ID93C8FFCA965D491CA4DAE8DD29711808" section-type="subsequent-section">
<enum>405.</enum>
<header>Voluntary early retirement incentive and employment retention
plans maintained by local educational agencies and other entities</header>
<subsection commented="no" display-inline="no-display-inline" id="IDD97BEBE39F98411B91AD2C3DAFFCEFD8">
<enum>(a)</enum>
<header>Voluntary early retirement incentive plans</header>
<paragraph commented="no" display-inline="no-display-inline" id="IDD3086F2AFDC64D8AA4D21DE4332B6CEC">
<enum>(1)</enum>
<header>Treatment as plan providing severance pay</header>
<text display-inline="yes-display-inline">Section 457(e)(11) of the
Internal Revenue Code of 1986 (relating to certain plans excluded) is amended
by adding at the end the following new subparagraph:</text>
<quoted-block display-inline="no-display-inline" id="ID88A1B0EC78E94D228C573576CE3B7EE2" style="OLC">
<subparagraph commented="no" display-inline="no-display-inline" id="ID2D66F49567174B029DB55926C14C3050">
<enum>(D)</enum>
<header>Certain voluntary early retirement incentive plans</header>
<clause commented="no" display-inline="no-display-inline" id="ID7FAC404CCB1540349A0EF7B580AC519E">
<enum>(i)</enum>
<header>In general</header>
<text display-inline="yes-display-inline">If an applicable voluntary
early retirement incentive plan—</text>
<subclause commented="no" display-inline="no-display-inline" id="IDDE4BF60AD5D54153AC03731735BAE718">
<enum>(I)</enum>
<text display-inline="yes-display-inline">makes payments or
supplements as an early retirement benefit, a retirement-type subsidy, or a
benefit described in the last sentence of section 411(a)(9), and</text>
</subclause><subclause commented="no" display-inline="no-display-inline" id="ID3F14439C74784C388D121AEC12F835A7">
<enum>(II)</enum>
<text display-inline="yes-display-inline">such payments or
supplements are made in coordination with a defined benefit plan which is
described in section 401(a) and includes a trust exempt from tax under section
501(a) and which is maintained by an eligible employer described in paragraph
(1)(A) or by an education association described in clause (ii)(II),</text>
</subclause><continuation-text commented="no" continuation-text-level="clause">such applicable plan shall be treated
for purposes of subparagraph (A)(i) as a bona fide severance pay plan with
respect to such payments or supplements to the extent such payments or
supplements could otherwise have been provided under such defined benefit plan
(determined as if section 411 applied to such defined benefit plan).</continuation-text></clause><clause commented="no" display-inline="no-display-inline" id="ID364883A0FE5C48CEAC7B4844FC75F8E0">
<enum>(ii)</enum>
<header>Applicable voluntary early retirement incentive plan</header>
<text display-inline="yes-display-inline">For purposes of this
subparagraph, the term <term>applicable voluntary early retirement incentive
plan</term> means a voluntary early retirement incentive plan maintained
by—</text>
<subclause commented="no" display-inline="no-display-inline" id="IDAAF5651F7F2849EAB48A3956AA654481">
<enum>(I)</enum>
<text display-inline="yes-display-inline">a local educational agency
(as defined in section 9101 of the <act-name parsable-cite="ESEA">Elementary
and Secondary Education Act of 1965</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/20/7801">20 U.S.C. 7801</external-xref>)), or</text>
</subclause><subclause commented="no" display-inline="no-display-inline" id="ID62C60963C1F9496FAAA670629C48E4EE">
<enum>(II)</enum>
<text display-inline="yes-display-inline">an education association
which principally represents employees of 1 or more agencies described in
subclause (I) and which is described in section 501(c) (5) or (6) and exempt
from tax under section 501(a).</text>
</subclause></clause></subparagraph><after-quoted-block></after-quoted-block></quoted-block>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDE65E4BFAEB2B4CC9ABDA1BD0C0A24256">
<enum>(2)</enum>
<header>Age Discrimination in Employment Act</header>
<text display-inline="yes-display-inline">Section
4(<added-phrase>l</added-phrase>)(1) of the Age Discrimination in Employment
Act of 1967 (<external-xref legal-doc="usc" parsable-cite="usc/29/623">29
U.S.C. 623</external-xref>(<added-phrase>l</added-phrase>)(1)) is
amended—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="ID13714E72B8B74D329C9C9860E8C4BF64">
<enum>(A)</enum>
<text display-inline="yes-display-inline">by inserting
<quote>(A)</quote> after <quote>(1)</quote>,</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="IDE1116372D4D84D4FAAB97979B50E6B34">
<enum>(B)</enum>
<text display-inline="yes-display-inline">by redesignating
subparagraphs (A) and (B) as clauses (i) and (ii), respectively,</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID3779AE040BC64FC38533408B74C4BEAE">
<enum>(C)</enum>
<text display-inline="yes-display-inline">by redesignating clauses (i)
and (ii) of subparagraph (B) (as in effect before the amendments made by
subparagraph (B)) as subclauses (I) and (II), respectively, and</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID7E25A3F86CAB485BA7FBE958BAB8EB97">
<enum>(D)</enum>
<text display-inline="yes-display-inline">by adding at the end the
following:</text>
<quoted-block display-inline="no-display-inline" id="idC085F4615F964E55A3B725FA147217EF" style="OLC">
<subparagraph commented="no" display-inline="no-display-inline" id="ID4F9126393DF9451FB7C5A200231D8E81" indent="up1">
<enum>(B)</enum>
<text display-inline="yes-display-inline">A voluntary early
retirement incentive plan that—</text>
<clause commented="no" display-inline="no-display-inline" id="ID87A1EB48A0C04DBDBC7E53382A0868A3">
<enum>(i)</enum>
<text display-inline="yes-display-inline">is maintained by—</text>
<subclause commented="no" display-inline="no-display-inline" id="ID031BBCC9549948A9AE556D4B814E87E6">
<enum>(I)</enum>
<text display-inline="yes-display-inline">a local educational agency
(as defined in section 9101 of the <act-name parsable-cite="ESEA">Elementary
and Secondary Education Act of 1965</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/20/7801">20 U.S.C. 7801</external-xref>), or</text>
</subclause><subclause commented="no" display-inline="no-display-inline" id="ID418DCBD0B24C423A933338169D117BE9">
<enum>(II)</enum>
<text display-inline="yes-display-inline">an education association
which principally represents employees of 1 or more agencies described in
subclause (I) and which is described in section 501(c) (5) or (6) of the
Internal Revenue Code of 1986 and exempt from taxation under section 501(a) of
such Code, and</text>
</subclause></clause><clause commented="no" display-inline="no-display-inline" id="ID57D77A355F0D49D1918AE4F7793B1CE5">
<enum>(ii)</enum>
<text display-inline="yes-display-inline">makes payments or
supplements described in subclauses (I) and (II) of subparagraph (A)(ii) in
coordination with a defined benefit plan (as so defined) maintained by an
eligible employer described in section 457(e)(1)(A) of such Code or by an
education association described in clause (i)(II),</text>
</clause><continuation-text commented="no" continuation-text-level="subparagraph" indent="paragraph">shall be
treated solely for purposes of subparagraph (A)(ii) as if it were a part of the
defined benefit plan with respect to such payments or supplements. Payments or
supplements under such a voluntary early retirement incentive plan shall not
constitute severance pay for purposes of section 4(l)(2) of the Age
Discrimination in Employment Act (<external-xref legal-doc="usc" parsable-cite="usc/29/623(l)(2)">29 U.S.C.
623(l)(2)</external-xref>).</continuation-text></subparagraph><after-quoted-block></after-quoted-block></quoted-block>
</subparagraph></paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="ID094715D1A0A541C8963A47E5985DEEF5">
<enum>(b)</enum>
<header>Employment retention plans</header>
<paragraph commented="no" display-inline="no-display-inline" id="ID72F8289BF3BD43F389352BD6CF6C58B8">
<enum>(1)</enum>
<header>In general</header>
<text display-inline="yes-display-inline">Section 457(f)(2) of the
Internal Revenue Code of 1986 (relating to exceptions) is amended by striking
<quote>and</quote> at the end of subparagraph (D), by striking the period at
the end of subparagraph (E) and inserting <quote>, and</quote>, and by adding
at the end the following:</text>
<quoted-block display-inline="no-display-inline" id="ID9C2BFA861A7846E4B8E6B6DD0E74950B" style="OLC">
<subparagraph commented="no" display-inline="no-display-inline" id="ID79CCBEECAF6544BA97744B90C6E76EC1">
<enum>(F)</enum>
<text display-inline="yes-display-inline">that portion of any
applicable employment retention plan described in paragraph (4) with respect to
any participant.</text>
</subparagraph><after-quoted-block></after-quoted-block></quoted-block>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDF7DE1FA4D96C41798C7666B85993B890">
<enum>(2)</enum>
<header>Definitions and rules relating to employment retention
plans</header>
<text display-inline="yes-display-inline">Section 457(f) of such Code
is amended by adding at the end the following new paragraph:</text>
<quoted-block display-inline="no-display-inline" id="ID17BEEBF3D0C64D9F83A699872DA30961" style="OLC">
<paragraph commented="no" display-inline="no-display-inline" id="ID4001F95BA97D4AC4A0E161AD172B4729">
<enum>(4)</enum>
<header>Employment retention plans</header>
<text display-inline="yes-display-inline">For purposes of paragraph
(2)(F)—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="ID73594D8590BF4541B2F62ED006465C25">
<enum>(A)</enum>
<header>In general</header>
<text display-inline="yes-display-inline">The portion of an
applicable employment retention plan described in this paragraph with respect
to any participant is that portion of the plan which provides benefits payable
to the participant not in excess of twice the applicable dollar limit
determined under subsection (e)(15).</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="IDA19443E254C549E6AF343CD7DE042F10">
<enum>(B)</enum>
<header>Other rules</header>
<clause commented="no" display-inline="no-display-inline" id="ID10088966380B4AD582A641F53531C3DB">
<enum>(i)</enum>
<header>Limitation</header>
<text display-inline="yes-display-inline">Paragraph (2)(F) shall only
apply to the portion of the plan described in subparagraph (A) for years
preceding the year in which such portion is paid or otherwise made available to
the participant.</text>
</clause><clause commented="no" display-inline="no-display-inline" id="ID52415027C9D146719770EF6B73AFB372">
<enum>(ii)</enum>
<header>Treatment</header>
<text display-inline="yes-display-inline">A plan shall not be treated
for purposes of this title as providing for the deferral of compensation for
any year with respect to the portion of the plan described in subparagraph
(A).</text>
</clause></subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID177E4A0F020D470CB39CDB5756A5A172">
<enum>(C)</enum>
<header>Applicable employment retention plan</header>
<text display-inline="yes-display-inline">The term <term>applicable
employment retention plan</term> means an employment retention plan maintained
by—</text>
<clause commented="no" display-inline="no-display-inline" id="IDCDE1AF25DA32444982764341AA31964A">
<enum>(i)</enum>
<text display-inline="yes-display-inline">a local educational agency
(as defined in section 9101 of the <act-name parsable-cite="ESEA">Elementary
and Secondary Education Act of 1965</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/20/7801">20 U.S.C. 7801</external-xref>), or</text>
</clause><clause commented="no" display-inline="no-display-inline" id="ID8585077A5DA447EA8DD6A04D612F578B">
<enum>(ii)</enum>
<text display-inline="yes-display-inline">an education association
which principally represents employees of 1 or more agencies described in
clause (i) and which is described in section 501(c) (5) or (6) and exempt from
taxation under section 501(a).</text>
</clause></subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="IDE4B28458C1354ABD93B317272D6E828B">
<enum>(D)</enum>
<header>Employment retention plan</header>
<text display-inline="yes-display-inline">The term <term>employment
retention plan</term> means a plan to pay, upon termination of employment,
compensation to an employee of a local educational agency or education
association described in subparagraph (C) for purposes of—</text>
<clause commented="no" display-inline="no-display-inline" id="ID744F2F73E6FA42F3A15A68522632EEBF">
<enum>(i)</enum>
<text display-inline="yes-display-inline">retaining the services of
the employee, or</text>
</clause><clause commented="no" display-inline="no-display-inline" id="ID5D6F98CA0C7044C3B88D300405D8AD33">
<enum>(ii)</enum>
<text display-inline="yes-display-inline">rewarding such employee for
the employee’s service with 1 or more such agencies or associations.</text>
</clause></subparagraph></paragraph><after-quoted-block></after-quoted-block></quoted-block>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="ID53EFF86770FD4EA79E83845540433BDE">
<enum>(c)</enum>
<header>Coordination with ERISA</header>
<text display-inline="yes-display-inline">
<external-xref legal-doc="act" parsable-cite="ERISA/3(2)(B)">Section
3(2)(B)</external-xref> of the <act-name parsable-cite="ERISA">Employee
Retirement Income Security Act of 1974</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/29/1002(2)(B)">29 U.S.C.
1002(2)(B)</external-xref>) is amended by adding at the end the following:
<quote>An applicable voluntary early retirement incentive plan (as defined in
section 457(e)(11)(D)(ii) of the Internal Revenue Code of 1986) making payments
or supplements described in section 457(e)(11)(D)(i) of such Code, and an
applicable employment retention plan (as defined in section 457(f)(4)(C) of
such Code) making payments of benefits described in section 457(f)(4)(A) of
such Code, shall, for purposes of this title, be treated as a welfare plan (and
not a pension plan) with respect to such payments and
supplements.</quote></text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="IDD0F3CB4B721842DDB6BCC30B4084B9DB">
<enum>(d)</enum>
<header>Effective dates</header>
<paragraph commented="no" display-inline="no-display-inline" id="IDDC0E1F3E44C74FB5A6008AB0D244D139">
<enum>(1)</enum>
<header>In general</header>
<text display-inline="yes-display-inline">The amendments made by this
Act shall take effect on the date of the enactment of this Act.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID53176E4906744E12A649A7D63974502B">
<enum>(2)</enum>
<header>Tax amendments</header>
<text display-inline="yes-display-inline">The amendments made by
subsections (a)(1) and (b) shall apply to taxable years ending after the date
of the enactment of this Act.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID2E8767F1D90E4FEFB9D81FF237AEAF72">
<enum>(3)</enum>
<header>ERISA amendments</header>
<text display-inline="yes-display-inline">The amendment made by
subsection (c) shall apply to plan years ending after the date of the enactment
of this Act.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID09BA7C433EC6400CB0D5AD19BEDBAD8C">
<enum>(4)</enum>
<header>Construction</header>
<text display-inline="yes-display-inline">Nothing in the amendments
made by this section shall alter or affect the construction of the Internal
Revenue Code of 1986, the <act-name parsable-cite="ERISA">Employee Retirement
Income Security Act of 1974</act-name>, or the Age Discrimination in Employment
Act of 1967 as applied to any plan, arrangement, or conduct to which such
amendments do not apply.</text>
</paragraph></subsection></section><section commented="no" display-inline="no-display-inline" id="IDE036FBAF2B5049AFAEF214EDD3D766F4" section-type="subsequent-section">
<enum>406.</enum>
<header>No reduction in unemployment compensation as a result of
pension rollovers</header>
<subsection commented="no" display-inline="no-display-inline" id="IDE2C0A9F95A7742148E0E44A18CF7CCB3">
<enum>(a)</enum>
<header>In general</header>
<text display-inline="yes-display-inline">Section 3304(a) of the
Internal Revenue Code of 1986 (relating to requirements for State unemployment
laws) is amended by adding at the end the following new flush sentence:</text>
<quoted-block display-inline="no-display-inline" id="ID62C105D321D64E65AAE2D305A474FE7A" style="OLC">
<quoted-block-continuation-text quoted-block-continuation-text-level="subsection">Compensation shall not be reduced
under paragraph (15) for any pension, retirement or retired pay, annuity, or
similar payment which is not includible in gross income of the individual for
the taxable year in which paid because it was part of a rollover
distribution.</quoted-block-continuation-text><after-quoted-block></after-quoted-block></quoted-block>
</subsection><subsection commented="no" display-inline="no-display-inline" id="ID47ECDA03888B47ADBD837FAA3191F450">
<enum>(b)</enum>
<header>Effective date</header>
<text display-inline="yes-display-inline">The amendment made by this
section shall apply to weeks beginning on or after the date of the enactment of
this Act.</text>
</subsection></section><section commented="no" display-inline="no-display-inline" id="ID17F862E539454AF8AC61E58D1E859231" section-type="subsequent-section">
<enum>407.</enum>
<header>Withholding on distributions from governmental Section
<enum-in-header>457</enum-in-header> plans</header>
<subsection commented="no" display-inline="no-display-inline" id="ID23CE6E185D8C4AEFB72592C487797D38">
<enum>(a)</enum>
<header>In general</header>
<text display-inline="yes-display-inline">Section 641(f) of the
Economic Growth and Tax Relief Reconciliation Act of 2001 is amended by adding
at the end the following new paragraph:</text>
<quoted-block display-inline="no-display-inline" id="IDC7A716EA11644491AC042CF83B42E892" style="OLC">
<paragraph commented="no" display-inline="no-display-inline" id="IDBC137B97BFDA452DBEB8AFDC65CBF91D">
<enum>(4)</enum>
<header>Transition rule for certain governmental plans</header>
<text display-inline="yes-display-inline">In the case of
distributions from an eligible deferred compensation plan of an employer
described in section 457(e)(1)(A) of the Internal Revenue Code of 1986 which
are made after December 31, 2001, and which are part of a series of
distributions which—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="IDA4A4ED9CFAA44D1EB80D24CED2B3DCB7">
<enum>(A)</enum>
<text display-inline="yes-display-inline">began before January 1,
2002, and</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID5B83FDE188704BFE81636C65D007E6DE">
<enum>(B)</enum>
<text display-inline="yes-display-inline">are payable for 10 years or
less, the Internal Revenue Code of 1986 may be applied to such distributions
without regard to the amendments made by subsection (a)(1)(D).</text>
</subparagraph></paragraph><after-quoted-block></after-quoted-block></quoted-block>
</subsection><subsection commented="no" display-inline="no-display-inline" id="ID9B18F98EF4EF4289A6E63F134334A305">
<enum>(b)</enum>
<header>Effective date</header>
<text display-inline="yes-display-inline">The amendment made by
subsection (a) shall take effect as if included in the provisions of section
641 of the Economic Growth and Tax Relief Reconciliation Act of 2001.</text>
</subsection></section><section commented="no" display-inline="no-display-inline" id="ID029F6974DB324F079D6724CC568B9517" section-type="subsequent-section">
<enum>408.</enum>
<header>Provisions relating to plan amendments</header>
<subsection commented="no" display-inline="no-display-inline" id="ID0C8AEC3FAAD24633B490513CAAA33FB1">
<enum>(a)</enum>
<header>In general</header>
<text display-inline="yes-display-inline">If this section applies to
any plan or contract amendment—</text>
<paragraph commented="no" display-inline="no-display-inline" id="ID1018B8E707BF4CEAB0BD4C5490DDC8E1">
<enum>(1)</enum>
<text display-inline="yes-display-inline">such plan or contract shall
be treated as being operated in accordance with the terms of the plan during
the period described in subsection (b)(2)(A), and</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDFD3DFB6373584BDAB45F58F37D5D419C">
<enum>(2)</enum>
<text display-inline="yes-display-inline">except as provided by the
Secretary of the Treasury, such plan shall not fail to meet the requirements of
section 411(d)(6) of the Internal Revenue Code of 1986 and
<external-xref legal-doc="act" parsable-cite="ERISA/204(g)">section
204(g)</external-xref> of the <act-name parsable-cite="ERISA">Employee
Retirement Income Security Act of 1974</act-name> by reason of such
amendment.</text>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="IDA7A745ED1B6A44BAA9847E5AE691461B">
<enum>(b)</enum>
<header>Amendments to which Section applies</header>
<paragraph commented="no" display-inline="no-display-inline" id="IDDAE7CC6518894EA480DED6B69CD41F2B">
<enum>(1)</enum>
<header>In general</header>
<text display-inline="yes-display-inline">This section shall apply to
any amendment to any plan or annuity contract which is made—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="ID5D0AC74F7BF644229E4DBDF42D79CCDB">
<enum>(A)</enum>
<text display-inline="yes-display-inline">pursuant to any amendment
made by this Act or the Economic Growth and Tax Relief Reconciliation Act of
2001, or pursuant to any regulation issued by the Secretary of the Treasury or
the Secretary of Labor under such Acts, and</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID7881CE6CA656460CB6A2A9A9E0C59501">
<enum>(B)</enum>
<text display-inline="yes-display-inline">on or before the last day of
the first plan year beginning on or after January 1, 2007, or such later date
as the Secretary of the Treasury may prescribe.</text>
</subparagraph><continuation-text commented="no" continuation-text-level="paragraph">In the case of a governmental plan
(as defined in section 414(d) of the Internal Revenue Code of 1986),
subparagraph (B) shall be applied by substituting the date which is 2 years
after the date otherwise applied under subparagraph (B).</continuation-text></paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDC61F16FCDFFB48DAA13F18529634B9CB">
<enum>(2)</enum>
<header>Conditions</header>
<text display-inline="yes-display-inline">This section shall not apply
to any amendment unless—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="ID45977BC5D488491291518BCDFF3CEB25">
<enum>(A)</enum>
<text display-inline="yes-display-inline">during the period—</text>
<clause commented="no" display-inline="no-display-inline" id="ID988EE2AE357346E4AF0A9EB1BD8EC51D">
<enum>(i)</enum>
<text display-inline="yes-display-inline">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</text>
</clause><clause commented="no" display-inline="no-display-inline" id="IDB00CD66A11C94624A5C959355CA13B45">
<enum>(ii)</enum>
<text display-inline="yes-display-inline">ending on the date described
in paragraph (1)(B) (or, if earlier, the date the plan or contract amendment is
adopted),</text>
</clause><continuation-text commented="no" continuation-text-level="subparagraph">the plan or contract is operated
as if such plan or contract amendment were in effect; and</continuation-text></subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="IDBE95A804232E4477965F6229973CFD91">
<enum>(B)</enum>
<text display-inline="yes-display-inline">such plan or contract
amendment applies retroactively for such period.</text>
</subparagraph></paragraph></subsection></section>
<enum>V</enum>
<header>Provisions relating to spousal pension protection</header>
<subtitle commented="no" id="ID7DC296A580B44E519143F04CD8D05006" style="OLC">
<enum>A</enum>
<header>Study of spousal consent for distributions from defined
contribution plans</header>
<section commented="no" display-inline="no-display-inline" id="ID855C10F8B12343C7AC84C4ABA194B97D" section-type="subsequent-section">
<enum>501.</enum>
<header>Joint study of application of spousal consent rules to defined
contribution plans</header>
<subsection commented="no" display-inline="no-display-inline" id="ID47002969184F41F6B824BB4F86105D32">
<enum>(a)</enum>
<header>Study</header>
<text display-inline="yes-display-inline">The Secretary of Labor and
the Secretary of the Treasury shall jointly conduct a study of the feasibility
and desirability of extending the application of the requirements of
<external-xref legal-doc="act" parsable-cite="ERISA/205">section
205</external-xref> of the <act-name parsable-cite="ERISA">Employee Retirement
Income Security Act of 1974</act-name> and sections 401(a)(11) and 417 of the
Internal Revenue Code of 1986 (relating to spousal consent requirements) to
defined contribution plans to which such requirements do not apply. Such study
shall include consideration of—</text>
<paragraph commented="no" display-inline="no-display-inline" id="ID11615A1D5FC840D3BB3A2CAE19ABC9D9">
<enum>(1)</enum>
<text display-inline="yes-display-inline">any modifications of such
requirements that are necessary to apply such requirements to such plans,
and</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID81CB9F9F702A4BD58B2995EF70AB9C4D">
<enum>(2)</enum>
<text display-inline="yes-display-inline">the feasibility of providing
notice and spousal consent in 1 or more electronic forms that are capable of
authentication.</text>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="ID0EEB9A4A946E4F20AC50FC686B800066">
<enum>(b)</enum>
<header>Report</header>
<text display-inline="yes-display-inline">Not later than 2 years after
the date of the enactment of this Act, the Secretaries shall report the results
of the study, together with any recommendations for legislative changes, to the
Committees on Ways and Means and Education and the Workforce of the House of
Representatives and the Committees on Finance and Health, Education, Labor, and
Pensions of the Senate.</text>
</subsection></section></subtitle><subtitle commented="no" id="IDC0E844CED4E4446C81DC1797BE401D1D" style="OLC">
<enum>B</enum>
<header>Division Of pension benefits upon divorce</header>
<section commented="no" display-inline="no-display-inline" id="IDE3272B7CCA8844CEB0B20EA48C2EC1DF" section-type="subsequent-section">
<enum>511.</enum>
<header>Regulations on time and order of issuance of domestic relations
orders</header>
<text display-inline="no-display-inline">Not later than 1 year after
the date of the enactment of this Act, the Secretary of Labor 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—</text>
<paragraph commented="no" display-inline="no-display-inline" id="ID45B9D0ED52414F3EA7FA3A6EA9A1C8B6">
<enum>(1)</enum>
<text display-inline="yes-display-inline">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—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="ID1E7246EE00324DF5B3C66483E35F1693">
<enum>(A)</enum>
<text display-inline="yes-display-inline">the order is issued after, or
revises, another domestic relations order or qualified domestic relations
order; or</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID6A8AA0C0042C4993B34033DE9D45EC80">
<enum>(B)</enum>
<text display-inline="yes-display-inline">of the time at which it is
issued; and</text>
</subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID861CB03A29AC440182B766AB6CA52171">
<enum>(2)</enum>
<text display-inline="yes-display-inline">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.</text>
</paragraph></section></subtitle><subtitle commented="no" id="ID7DFA6CDDA3F340A8B4815CD9CA303F6C" style="OLC">
<enum>C</enum>
<header>Railroad retirement</header>
<section commented="no" display-inline="no-display-inline" id="ID0C5CF04345BA4D5381D5DF827FA3D689" section-type="subsequent-section">
<enum>521.</enum>
<header>Entitlement of divorced spouses to railroad retirement
annuities independent of actual entitlement of employee</header>
<subsection commented="no" display-inline="no-display-inline" id="ID69008299FC58477C8095EFC57FFD4D1C">
<enum>(a)</enum>
<header>In general</header>
<text display-inline="yes-display-inline">Section 2 of the Railroad
Retirement Act of 1974 (<external-xref legal-doc="usc" parsable-cite="usc/45/231a">45 U.S.C. 231a</external-xref>) is amended—</text>
<paragraph commented="no" display-inline="no-display-inline" id="IDD118ED4820B24D43AD125DDFED4D756A">
<enum>(1)</enum>
<text display-inline="yes-display-inline">in subsection (c)(4)(i), by
striking <quote>(A) is entitled to an annuity under subsection (a)(1) and
(B)</quote>; and</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID4159AD72526340678E546DC6345CC6A3">
<enum>(2)</enum>
<text display-inline="yes-display-inline">in subsection (e)(5), by
striking <quote>or divorced wife</quote> the second place it appears.</text>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="ID2FC1D376895F4B199E458C14D13D9ADF">
<enum>(b)</enum>
<header>Effective date</header>
<text display-inline="yes-display-inline">The amendments made by this
section shall take effect 1 year after the date of the enactment of this
Act.</text>
</subsection></section><section commented="no" display-inline="no-display-inline" id="IDD30C0485340B4331A874657E4A176F7D" section-type="subsequent-section">
<enum>522.</enum>
<header>Extension of tier II railroad retirement benefits to surviving
former spouses pursuant to divorce agreements</header>
<subsection commented="no" display-inline="no-display-inline" id="ID233476C9DA4143128F7F321D6EDFFDEB">
<enum>(a)</enum>
<header>In general</header>
<text display-inline="yes-display-inline">Section 5 of the Railroad
Retirement Act of 1974 (<external-xref legal-doc="usc" parsable-cite="usc/45/231d">45 U.S.C. 231d</external-xref>) is amended by
adding at the end the following:</text>
<quoted-block display-inline="no-display-inline" id="ID313801B521104B8AAF6FE99E91B4AC17" style="OLC">
<subsection commented="no" display-inline="no-display-inline" id="ID7BE745DFABAA47E39FB691CA7036A657">
<enum>(d)</enum>
<text display-inline="yes-display-inline">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.</text>
</subsection><after-quoted-block></after-quoted-block></quoted-block>
</subsection><subsection commented="no" display-inline="no-display-inline" id="ID464C678EF7FB4131BD7108CC8ED16546">
<enum>(b)</enum>
<header>Effective date</header>
<text display-inline="yes-display-inline">The amendment made by this
section shall take effect 1 year after the date of the enactment of this
Act.</text>
</subsection></section></subtitle><subtitle commented="no" id="ID58B8520F18FD4A239B1B5D9ADAEAEE91" style="OLC">
<enum>D</enum>
<header>Modifications of joint and survivor annuity
requirements</header>
<section commented="no" display-inline="no-display-inline" id="ID34E40467D23B4B909DE3A248B5D198AB" section-type="subsequent-section">
<enum>531.</enum>
<header>Requirement for additional survivor annuity option</header>
<subsection commented="no" display-inline="no-display-inline" id="IDF42251802A6D4639BF5B0C0C2DAD2FEE">
<enum>(a)</enum>
<header>Amendments to Internal Revenue Code</header>
<paragraph commented="no" display-inline="no-display-inline" id="IDEF9DCF54F2264B6B9C57AFDD936D8C3E">
<enum>(1)</enum>
<header>Election of survivor annuity</header>
<text display-inline="yes-display-inline">Section 417(a)(1)(A) of the
Internal Revenue Code of 1986 is amended—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="ID963932DC6CA941C298F1E6037E08444C">
<enum>(A)</enum>
<text display-inline="yes-display-inline">in clause (i), by striking
<quote>, and</quote> and inserting a comma;</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="IDB0394E232F144F20B207DAEF115952DB">
<enum>(B)</enum>
<text display-inline="yes-display-inline">by redesignating clause (ii)
as clause (iii); and</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID20FAAE82E8E5430FB88970A64DEA10DE">
<enum>(C)</enum>
<text display-inline="yes-display-inline">by inserting after clause (i)
the following:</text>
<quoted-block display-inline="no-display-inline" id="IDB768C9FC9B7E4EC6A27717FE6C1602AA" style="OLC">
<clause commented="no" display-inline="no-display-inline" id="ID45A694EA65474F8EA6C4FE60131C25F0" indent="up1">
<enum>(ii)</enum>
<text display-inline="yes-display-inline">if the participant elects a
waiver under clause (i), may elect the qualified optional survivor annuity at
any time during the applicable election period, and</text>
</clause><after-quoted-block>.</after-quoted-block></quoted-block>
</subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID8438F5EE0B4340FABB71F0B9CF525C75">
<enum>(2)</enum>
<header>Definition</header>
<text display-inline="yes-display-inline">Section 417 of such Code is
amended by adding at the end the following:</text>
<quoted-block display-inline="no-display-inline" id="ID70E12E5B174F41B0B80C64DF4C699A69" style="OLC">
<subsection commented="no" display-inline="no-display-inline" id="ID12C146F505B344F4AF974B35DA6F80F7">
<enum>(g)</enum>
<header>Definition of qualified optional survivor annuity</header>
<paragraph commented="no" display-inline="no-display-inline" id="ID777BFB2D29114C2FB77A9ACAA8D391AE">
<enum>(1)</enum>
<header>In general</header>
<text display-inline="yes-display-inline">For purposes of this
section, the term <term>qualified optional survivor annuity</term> means an
annuity—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="ID96CCE08FF5D441DFBFCE0C8D5C5A20F2">
<enum>(A)</enum>
<text display-inline="yes-display-inline">for the life of the
participant with a survivor annuity for the life of the spouse which is equal
to the applicable percentage of the amount of the annuity which is payable
during the joint lives of the participant and the spouse, and</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="IDC76A3A177417441BAEB9EC11B02CD3B6">
<enum>(B)</enum>
<text display-inline="yes-display-inline">which is the actuarial
equivalent of a single annuity for the life of the participant.</text>
</subparagraph><continuation-text commented="no" continuation-text-level="paragraph">Such term also includes any annuity
in a form having the effect of an annuity described in the preceding
sentence.</continuation-text></paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDED94E61177DD4181849B6EE846943A9A">
<enum>(2)</enum>
<header>Applicable percentage</header>
<subparagraph commented="no" display-inline="no-display-inline" id="ID2F47671CB19A4F1798249BF106F3F599">
<enum>(A)</enum>
<header>In general</header>
<text display-inline="yes-display-inline">For purposes of paragraph
(1), if the survivor annuity percentage—</text>
<clause commented="no" display-inline="no-display-inline" id="IDF41A4FB444E54451B965210E55336897">
<enum>(i)</enum>
<text display-inline="yes-display-inline">is less than 75 percent,
the applicable percentage is 75 percent, and</text>
</clause><clause commented="no" display-inline="no-display-inline" id="IDAAE03DFD8E1E4D7DAAA71A3887CEBDEA">
<enum>(ii)</enum>
<text display-inline="yes-display-inline">is greater than or equal to
75 percent, the applicable percentage is 50 percent.</text>
</clause></subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID96B2FC252D9C45A7B44174D26C7B37F8">
<enum>(B)</enum>
<header>Survivor annuity percentage</header>
<text display-inline="yes-display-inline">For purposes of
subparagraph (A), the term <term>survivor annuity percentage</term> means the
percentage which the survivor annuity under the plan’s qualified joint and
survivor annuity bears to the annuity payable during the joint lives of the
participant and the spouse.</text>
</subparagraph></paragraph></subsection><after-quoted-block></after-quoted-block></quoted-block>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID91A94AFB042447C2AC01D55EB019DD0A">
<enum>(3)</enum>
<header>Notice</header>
<text display-inline="yes-display-inline">Section 417(a)(3)(A)(i) of
such Code is amended by inserting <quote>and of the qualified optional survivor
annuity</quote> after <quote>annuity</quote>.</text>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="IDB1F20CE1E74048D1A643FA6EA9EA4404">
<enum>(b)</enum>
<header>Amendments to ERISA</header>
<paragraph commented="no" display-inline="no-display-inline" id="ID3DAD5454AB0F4A2886C3DC24D06FEDEF">
<enum>(1)</enum>
<header>Election of survivor annuity</header>
<text display-inline="yes-display-inline">
<external-xref legal-doc="act" parsable-cite="ERISA/205(c)(1)(A)">Section
205(c)(1)(A)</external-xref> of the <act-name parsable-cite="ERISA">Employee
Retirement Income Security Act of 1974</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/29/1055(c)(1)(A)">29 U.S.C.
1055(c)(1)(A)</external-xref>) is amended—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="ID2F9AFB296EE448E69478E5EB232BF656">
<enum>(A)</enum>
<text display-inline="yes-display-inline">in clause (i), by striking
<quote>, and</quote> and inserting a comma;</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="IDF4322E43B88A4AEFA57BBEA216DA4406">
<enum>(B)</enum>
<text display-inline="yes-display-inline">by redesignating clause (ii)
as clause (iii); and</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID36294060E719445389D34E89B3D5224D">
<enum>(C)</enum>
<text display-inline="yes-display-inline">by inserting after clause (i)
the following:</text>
<quoted-block display-inline="no-display-inline" id="ID13E0067ABF1F445A80D3136399BFB41A" style="OLC">
<clause commented="no" display-inline="no-display-inline" id="ID1F75C18EA22C4B5EA427C6B2BCF11B9A" indent="up1">
<enum>(ii)</enum>
<text display-inline="yes-display-inline">if the participant elects a
waiver under clause (i), may elect the qualified optional survivor annuity at
any time during the applicable election period, and</text>
</clause><after-quoted-block>.</after-quoted-block></quoted-block>
</subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDB393CD6A436449E7A2FB1ECA9F6C754B">
<enum>(2)</enum>
<header>Definition</header>
<text display-inline="yes-display-inline">Section 205(d) of such Act
(<external-xref legal-doc="usc" parsable-cite="usc/29/1055(d)">29 U.S.C.
1055(d)</external-xref>) is amended—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="ID148AFA252F1E49C4818B3AD2627180B1">
<enum>(A)</enum>
<text display-inline="yes-display-inline">by inserting
<quote>(1)</quote> after <quote>(d)</quote>;</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID4AEFE0B7D53A48F8A1440A92E8456EC3">
<enum>(B)</enum>
<text display-inline="yes-display-inline">by redesignating paragraphs
(1) and (2) as subparagraphs (A) and (B), respectively; and</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID3F0423CD7DBD48E18D04F7CF0544AEB8">
<enum>(C)</enum>
<text display-inline="yes-display-inline">by adding at the end the
following:</text>
<quoted-block display-inline="no-display-inline" id="ID6241B276F7184A08B1A5E77FF03EA263" style="OLC">
<paragraph commented="no" display-inline="no-display-inline" id="ID46152A0828EA4471BF3546944E9E2A1A" indent="up1">
<enum>(2)</enum>
<subparagraph commented="no" display-inline="yes-display-inline" id="ID3B4A8B999AC4423E9A64023C2ABD73C2"><enum>(A)</enum>
<text display-inline="yes-display-inline">For purposes of this
section, the term <term>qualified optional survivor annuity</term> means an
annuity—</text>
<clause commented="no" display-inline="no-display-inline" id="ID3295C257ED6646D4AF6669C54B168595" indent="up1">
<enum>(i)</enum>
<text display-inline="yes-display-inline">for the life of the
participant with a survivor annuity for the life of the spouse which is equal
to the applicable percentage of the amount of the annuity which is payable
during the joint lives of the participant and the spouse, and</text>
</clause><clause commented="no" display-inline="no-display-inline" id="IDA02390BD42BF426BAC3AB1F4F7C325C3" indent="up1">
<enum>(ii)</enum>
<text display-inline="yes-display-inline">which is the actuarial
equivalent of a single annuity for the life of the participant.</text>
</clause></subparagraph><continuation-text commented="no" continuation-text-level="paragraph">Such term also includes any annuity
in a form having the effect of an annuity described in the preceding
sentence.</continuation-text><subparagraph commented="no" display-inline="no-display-inline" id="IDE6C2666CF79B4618889BB4FB6EDCCBFD" indent="up1">
<enum>(B)</enum>
<clause commented="no" display-inline="yes-display-inline" id="IDE6BA51ADAC654CE2BC5BC00D6514CE47"><enum>(i)</enum>
<text display-inline="yes-display-inline">For purposes of
subparagraph (A), if the survivor annuity percentage—</text>
<subclause commented="no" display-inline="no-display-inline" id="ID9631B36D958D4DBF8CEFCA2F1D17E285" indent="up1">
<enum>(I)</enum>
<text display-inline="yes-display-inline">is less than 75 percent,
the applicable percentage is 75 percent, and</text>
</subclause><subclause commented="no" display-inline="no-display-inline" id="ID9C130C96739D43F4906333815508A391" indent="up1">
<enum>(II)</enum>
<text display-inline="yes-display-inline">is greater than or equal to
75 percent, the applicable percentage is 50 percent.</text>
</subclause></clause><clause commented="no" display-inline="no-display-inline" id="ID245290D287AD44B2A239AD8337B64A3D" indent="up1">
<enum>(ii)</enum>
<text display-inline="yes-display-inline">For purposes of clause (i),
the term <term>survivor annuity percentage</term> means the percentage which
the survivor annuity under the plan’s qualified joint and survivor annuity
bears to the annuity payable during the joint lives of the participant and the
spouse.</text>
</clause></subparagraph></paragraph><after-quoted-block></after-quoted-block></quoted-block>
</subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID1646DBA877574AC9BE2F54F012523B8E">
<enum>(3)</enum>
<header>Notice</header>
<text display-inline="yes-display-inline">Section 205(c)(3)(A)(i) of
such Act (<external-xref legal-doc="usc" parsable-cite="usc/29/1055(c)(3)(A)(i)">29 U.S.C.
1055(c)(3)(A)(i)</external-xref>) is amended by inserting <quote>and of the
qualified optional survivor annuity</quote> after
<quote>annuity</quote>.</text>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="IDA32CBF1E75894D6595EAAABB63EFBC87">
<enum>(c)</enum>
<header>Effective dates</header>
<paragraph commented="no" display-inline="no-display-inline" id="ID17E5B9E76DE34B7F9393F3410B3DA15D">
<enum>(1)</enum>
<header>In general</header>
<text display-inline="yes-display-inline">The amendments made by this
section shall apply to plan years beginning after December 31, 2005.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID9BABEA39AEBB497E98D5653C14E7CC2A">
<enum>(2)</enum>
<header>Special rule for collectively bargained plans</header>
<text display-inline="yes-display-inline">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—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="ID35A863E053D4442B9F5C8F9226C9F2B7">
<enum>(A)</enum>
<text display-inline="yes-display-inline">the later of—</text>
<clause commented="no" display-inline="no-display-inline" id="ID9DB16B91A4644AB48FA918ED64A8C4A9">
<enum>(i)</enum>
<text display-inline="yes-display-inline">January 1, 2006, or</text>
</clause><clause commented="no" display-inline="no-display-inline" id="ID21FB5679A04A48ACA8406337F163F41C">
<enum>(ii)</enum>
<text display-inline="yes-display-inline">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</text>
</clause></subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID8EE11C6F4B1E40799484748999804EB0">
<enum>(B)</enum>
<text display-inline="yes-display-inline">January 1, 2007.</text>
</subparagraph></paragraph></subsection></section></subtitle>
<enum>VI</enum>
<header>Tax Court pension and compensation</header>
<section commented="no" display-inline="no-display-inline" id="ID5A23923C5479484F9C3EBE7B42D4B6AC" section-type="subsequent-section">
<enum>600.</enum>
<header>Amendment of 1986 Code</header>
<text display-inline="no-display-inline">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 Internal
Revenue Code of 1986.</text>
</section><section commented="no" display-inline="no-display-inline" id="IDF66C10477515454C8EE4EB2E72873293" section-type="subsequent-section">
<enum>601.</enum>
<header>Annuities for survivors of Tax Court judges who are
assassinated</header>
<subsection commented="no" display-inline="no-display-inline" id="ID28D79A439C3943E2A09C91403CA52F9B">
<enum>(a)</enum>
<header>Eligibility in case of death by assassination</header>
<text display-inline="yes-display-inline">Subsection (h) of section
7448 (relating to annuities to surviving spouses and dependent children of
judges) is amended to read as follows:</text>
<quoted-block display-inline="no-display-inline" id="ID07148573F2F64611B6236DE7B5DAE6AE" style="OLC">
<subsection commented="no" display-inline="no-display-inline" id="ID3D116F70659D45BF93EEFB829405FD8C">
<enum>(h)</enum>
<header>Entitlement to annuity</header>
<paragraph commented="no" display-inline="no-display-inline" id="ID5FA28B2C20A7450889F82AD1981CC7F6">
<enum>(1)</enum>
<header>In general</header>
<subparagraph commented="no" display-inline="no-display-inline" id="ID986909CDC18440A6BDA32528FDB5ADA7">
<enum>(A)</enum>
<header>Annuity to surviving spouse</header>
<text display-inline="yes-display-inline">If a judge described in
paragraph (2) is survived by a surviving spouse but not by a dependent child,
there shall be paid to such surviving spouse an annuity beginning with the day
of the death of the judge or following the surviving spouse’s attainment of the
age of 50 years, whichever is the later, in an amount computed as provided in
subsection (m).</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="IDC4C187D669C54FC096E43ED159F3054E">
<enum>(B)</enum>
<header>Annuity to child</header>
<text display-inline="yes-display-inline">If such a judge is survived
by a surviving spouse and a dependent child or children, there shall be paid to
such surviving spouse an immediate annuity in an amount computed as provided in
subsection (m), and there shall also be paid to or on behalf of each such child
an immediate annuity equal to the lesser of—</text>
<clause commented="no" display-inline="no-display-inline" id="IDED23DE20D10E450685F34B5DDCC16E51">
<enum>(i)</enum>
<text display-inline="yes-display-inline">10 percent of the average
annual salary of such judge (determined in accordance with subsection (m)),
or</text>
</clause><clause commented="no" display-inline="no-display-inline" id="ID495C9D3569964348BABF2EA275B4964E">
<enum>(ii)</enum>
<text display-inline="yes-display-inline">20 percent of such average
annual salary, divided by the number of such children.</text>
</clause></subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID41FD8985EF3E4D559F4EE2E97F012969">
<enum>(C)</enum>
<header>Annuity to surviving dependent children</header>
<text display-inline="yes-display-inline">If such a judge leaves no
surviving spouse but leaves a surviving dependent child or children, there
shall be paid to or on behalf of each such child an immediate annuity equal to
the lesser of—</text>
<clause commented="no" display-inline="no-display-inline" id="ID4DE3CFCB093141AABE746D06BA12002F">
<enum>(i)</enum>
<text display-inline="yes-display-inline">20 percent of the average
annual salary of such judge (determined in accordance with subsection (m)),
or</text>
</clause><clause commented="no" display-inline="no-display-inline" id="ID5D34D8633DA74542A4186C353C63629C">
<enum>(ii)</enum>
<text display-inline="yes-display-inline">40 percent of such average
annual salary, divided by the number of such children.</text>
</clause></subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID6459EEE66DA643DF86E9A66E8FDCB87B">
<enum>(2)</enum>
<header>Covered judges</header>
<text display-inline="yes-display-inline">Paragraph (1) applies to
any judge electing under subsection (b)—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="IDE446042904D7453C88BE6FB7D249F588">
<enum>(A)</enum>
<text display-inline="yes-display-inline">who dies while a judge
after having rendered at least 5 years of civilian service computed as
prescribed in subsection (n), for the last 5 years of which the salary
deductions provided for by subsection (c)(1) or the deposits required by
subsection (d) have actually been made or the salary deductions required by the
civil service retirement laws have actually been made, or</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID84A5A1AD65BA4D67BF7AF358BF9C4E62">
<enum>(B)</enum>
<text display-inline="yes-display-inline">who dies by assassination
after having rendered less than 5 years of civilian service computed as
prescribed in subsection (n) if, for the period of such service, the salary
deductions provided for by subsection (c)(1) or the deposits required by
subsection (d) have actually been made.</text>
</subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID29520AA710654B2CAC80298522CEA1A1">
<enum>(3)</enum>
<header>Termination of annuity</header>
<subparagraph commented="no" display-inline="no-display-inline" id="ID0FC0D2CDF876406DA09DE379CBE766B1">
<enum>(A)</enum>
<header>In the case of a surviving spouse</header>
<text display-inline="yes-display-inline">The annuity payable to a
surviving spouse under this subsection shall be terminable upon such surviving
spouse’s death or such surviving spouse’s remarriage before attaining age
55.</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID92C78A06912B4FB5A5F53C3963DF9EF7">
<enum>(B)</enum>
<header>In the case of a child</header>
<text display-inline="yes-display-inline">The annuity payable to a
child under this subsection shall be terminable upon (i) the child attaining
the age of 18 years, (ii) the child’s marriage, or (iii) the child’s death,
whichever first occurs, except that if such child is incapable of self-support
by reason of mental or physical disability the child’s annuity shall be
terminable only upon death, marriage, or recovery from such disability.</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID6298D3F21A794CE1A340FEBCADB4EB71">
<enum>(C)</enum>
<header>In the case of a dependent child after death of surviving
spouse</header>
<text display-inline="yes-display-inline">In case of the death of a
surviving spouse of a judge leaving a dependent child or children of the judge
surviving such spouse, the annuity of such child or children shall be
recomputed and paid as provided in paragraph (1)(C).</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID4FEAD05C103246869F88DBF1190BC02A">
<enum>(D)</enum>
<header>Recomputation</header>
<text display-inline="yes-display-inline">In any case in which the
annuity of a dependent child is terminated under this subsection, the annuities
of any remaining dependent child or children, based upon the service of the
same judge, shall be recomputed and paid as though the child whose annuity was
so terminated had not survived such judge.</text>
</subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID39AE36B91CB94E6899E043228A538AB3">
<enum>(4)</enum>
<header>Special rule for assassinated judges</header>
<text display-inline="yes-display-inline">In the case of a survivor
or survivors of a judge described in paragraph (2)(B), there shall be deducted
from the annuities otherwise payable under this section an amount equal
to—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="ID128016E76D114E5591295B0AA61A00A9">
<enum>(A)</enum>
<text display-inline="yes-display-inline">the amount of salary
deductions provided for by subsection (c)(1) that would have been made if such
deductions had been made for 5 years of civilian service computed as prescribed
in subsection (n) before the judge’s death, reduced by</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID8A1A1A881BA444EB842AFBEB657B9B5E">
<enum>(B)</enum>
<text display-inline="yes-display-inline">the amount of such salary
deductions that were actually made before the date of the judge’s death.</text>
</subparagraph></paragraph></subsection><after-quoted-block></after-quoted-block></quoted-block>
</subsection><subsection commented="no" display-inline="no-display-inline" id="ID99BC5D20727D4B39A29265DFA0AFD1E5">
<enum>(b)</enum>
<header>Definition of assassination</header>
<text display-inline="yes-display-inline">Section 7448(a) (relating to
definitions) is amended by adding at the end the following new
paragraph:</text>
<quoted-block display-inline="no-display-inline" id="ID53A13AA553B4475798CE51C31270D50A" style="OLC">
<paragraph commented="no" display-inline="no-display-inline" id="ID8604ABE5741B4260A8F36205F9DE15A0">
<enum>(8)</enum>
<text display-inline="yes-display-inline">The terms
<term>assassinated</term> and <term>assassination</term> mean the killing of a
judge that is motivated by the performance by that judge of his or her official
duties.</text>
</paragraph><after-quoted-block></after-quoted-block></quoted-block>
</subsection><subsection commented="no" display-inline="no-display-inline" id="IDCCC156A305C74AD983A64BC2D5D418D9">
<enum>(c)</enum>
<header>Determination of assassination</header>
<text display-inline="yes-display-inline">Subsection (i) of section
7448 is amended—</text>
<paragraph commented="no" display-inline="no-display-inline" id="ID4B734C8C0F504DE0B621D577EFA926F3">
<enum>(1)</enum>
<text display-inline="yes-display-inline">by striking the subsection
heading and inserting the following:</text>
<quoted-block display-inline="no-display-inline" id="ID5084C8A2F1404AD5ACEDA4C9A733BAA1" style="OLC">
<subsection commented="no" display-inline="no-display-inline" id="ID5E6DC16B4C624254BBA90F959D13DC6C">
<enum>(i)</enum>
<header>Determinations by chief judge</header>
<paragraph commented="no" display-inline="no-display-inline" id="ID24866EA759F04B6899E616F7F4F189CB">
<enum>(1)</enum>
<header>Dependency and disability</header>
</paragraph></subsection><after-quoted-block>,</after-quoted-block></quoted-block>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDDE9FB7A5D2EF476693C1093E4A635F7F">
<enum>(2)</enum>
<text display-inline="yes-display-inline">by moving the text 2 ems to
the right, and</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID108A4680434F430881D7C2B5A7B78637">
<enum>(3)</enum>
<text display-inline="yes-display-inline">by adding at the end the
following new paragraph:</text>
<quoted-block display-inline="no-display-inline" id="IDBDA1B1ADE62D4AEF85F85E242F0316FF" style="OLC">
<paragraph commented="no" display-inline="no-display-inline" id="IDE8B13457B83B415680A03332BDB0DBF3">
<enum>(2)</enum>
<header>Assassination</header>
<text display-inline="yes-display-inline">The chief judge shall
determine whether the killing of a judge was an assassination, subject to
review only by the Tax Court. The head of any Federal agency that investigates
the killing of a judge shall provide information to the chief judge that would
assist the chief judge in making such a determination.</text>
</paragraph><after-quoted-block></after-quoted-block></quoted-block>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="ID31DFD817121C4E0589C2D32646B06CAB">
<enum>(d)</enum>
<header>Computation of annuities</header>
<text display-inline="yes-display-inline">Subsection (m) of section
7448 is amended—</text>
<paragraph commented="no" display-inline="no-display-inline" id="ID7B2DA44447F14DD5AE24EDC5E909463D">
<enum>(1)</enum>
<text display-inline="yes-display-inline">by striking the subsection
heading and inserting the following:</text>
<quoted-block display-inline="no-display-inline" id="IDFFAE427247D44FD3906A04D367F48945" style="OLC">
<subsection commented="no" display-inline="no-display-inline" id="ID75DCA212A06447418A41AFD1CB15C396">
<enum>(m)</enum>
<header>Computation of annuities</header>
<paragraph commented="no" display-inline="no-display-inline" id="ID35EC437C0B6741B89B07165358909381">
<enum>(1)</enum>
<header>In general</header>
</paragraph></subsection><after-quoted-block>,</after-quoted-block></quoted-block>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDD14ECECB80FB417F93B0306D41A65851">
<enum>(2)</enum>
<text display-inline="yes-display-inline">by moving the text 2 ems to
the right, and</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID2422FA9B56EE45AEB84386E5178E95C3">
<enum>(3)</enum>
<text display-inline="yes-display-inline">by adding at the end the
following new paragraph:</text>
<quoted-block display-inline="no-display-inline" id="IDEEAA27B853FB45BC8F35C5FEF78EA37C" style="OLC">
<paragraph commented="no" display-inline="no-display-inline" id="ID20B1AB0B65054A59BFD5CC3C4F463BD9">
<enum>(2)</enum>
<header>Assassinated judges</header>
<text display-inline="yes-display-inline">In the case of a judge who
is assassinated and who has served less than 3 years, the annuity of the
surviving spouse of such judge shall be based upon the average annual salary
received by such judge for judicial service.</text>
</paragraph><after-quoted-block></after-quoted-block></quoted-block>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="ID871E09BD759A47D9860FDDDEB4C34150">
<enum>(e)</enum>
<header>Other benefits</header>
<text display-inline="yes-display-inline">Section 7448 is amended by
adding at the end the following:</text>
<quoted-block display-inline="no-display-inline" id="ID0195187234CF4BE0B9FA364DC168E6EE" style="OLC">
<subsection commented="no" display-inline="no-display-inline" id="IDA52CC34DA6CD4ADD80BE7A0CAD882DE0">
<enum>(u)</enum>
<header>Other benefits</header>
<text display-inline="yes-display-inline">In the case of a judge who
is assassinated, an annuity shall be paid under this section notwithstanding a
survivor’s eligibility for or receipt of benefits under chapter 81 of title 5,
United States Code, except that the annuity for which a surviving spouse is
eligible under this section shall be reduced to the extent that the total
benefits paid under this section and chapter 81 of that title for any year
would exceed the current salary for that year of the office of the
judge.</text>
</subsection><after-quoted-block></after-quoted-block></quoted-block>
</subsection></section><section commented="no" display-inline="no-display-inline" id="IDA34888E00D2146D19BE8DAC119C3446D" section-type="subsequent-section">
<enum>602.</enum>
<header>Cost-of-Living adjustments for Tax Court judicial survivor
annuities</header>
<subsection commented="no" display-inline="no-display-inline" id="IDECDAD0742B734B7086969806D5259F90">
<enum>(a)</enum>
<header>In general</header>
<text display-inline="yes-display-inline">Subsection (s) of section
7448 (relating to annuities to surviving spouses and dependent children of
judges) is amended to read as follows:</text>
<quoted-block display-inline="no-display-inline" id="IDC7B3EE3A2E094EC9B397B78057129A06" style="OLC">
<subsection commented="no" display-inline="no-display-inline" id="ID7CDBBA17F18C45DDA6BC676C8DF54A62">
<enum>(s)</enum>
<header>Increases in survivor annuities</header>
<text display-inline="yes-display-inline">Each time that an increase
is made under section 8340(b) of title 5, United States Code, in annuities
payable under subchapter III of chapter 83 of that title, each annuity payable
from the survivors annuity fund under this section shall be increased at the
same time by the same percentage by which annuities are increased under such
section 8340(b).</text>
</subsection><after-quoted-block></after-quoted-block></quoted-block>
</subsection><subsection commented="no" display-inline="no-display-inline" id="ID054C6F18D75C4C37BCFA804884C8ECA1">
<enum>(b)</enum>
<header>Effective date</header>
<text display-inline="yes-display-inline">The amendment made by this
section shall apply with respect to increases made under section 8340(b) of
title 5, United States Code, in annuities payable under subchapter III of
chapter 83 of that title, taking effect after the date of the enactment of this
Act.</text>
</subsection></section><section commented="no" display-inline="no-display-inline" id="IDE997662EF03540AFA8337E5448765804" section-type="subsequent-section">
<enum>603.</enum>
<header>Life insurance coverage for Tax Court judges</header>
<subsection commented="no" display-inline="no-display-inline" id="ID8E6A64A3C6EC41719807E3D42601D0FC">
<enum>(a)</enum>
<header>In general</header>
<text display-inline="yes-display-inline">Section 7447 (relating to
retirement of judges) is amended by adding at the end the following new
subsection:</text>
<quoted-block display-inline="no-display-inline" id="ID4DA3EC2072004DAC9F5C4CBEF364E17C" style="OLC">
<subsection commented="no" display-inline="no-display-inline" id="ID0A738B73F22242DDAA28216D106C8B77">
<enum>(j)</enum>
<header>Life insurance coverage</header>
<text display-inline="yes-display-inline">For purposes of chapter 87
of title 5, United States Code (relating to life insurance), any individual who
is serving as a judge of the Tax Court or who is retired under this section is
deemed to be an employee who is continuing in active employment.</text>
</subsection><after-quoted-block></after-quoted-block></quoted-block>
</subsection><subsection commented="no" display-inline="no-display-inline" id="IDD2744E1DAC9541639C3E604F694B1016">
<enum>(b)</enum>
<header>Effective date</header>
<text display-inline="yes-display-inline">The amendment made by this
section shall apply to any individual serving as a judge of the United States
Tax Court or to any retired judge of the United States Tax Court on the date of
the enactment of this Act.</text>
</subsection></section><section commented="no" display-inline="no-display-inline" id="ID5958204CA14C432AA85B172470DC982D" section-type="subsequent-section">
<enum>604.</enum>
<header>Cost of life insurance coverage for Tax Court judges age 65 or
over</header>
<text display-inline="no-display-inline">Section 7472 (relating to
expenditures) is amended by inserting after the first sentence the following
new sentence: <quote>Notwithstanding any other provision of law, the Tax Court
is authorized to pay on behalf of its judges, age 65 or over, any increase in
the cost of Federal Employees’ Group Life Insurance imposed after April 24,
1999, including any expenses generated by such payments, as authorized by the
chief judge in a manner consistent with such payments authorized by the
Judicial Conference of the United States pursuant to section 604(a)(5) of title
28, United States Code.</quote></text>
</section><section commented="no" display-inline="no-display-inline" id="ID5CD52206176B4295BD59AB1CBB77B7AB" section-type="subsequent-section">
<enum>605.</enum>
<header>Modification of timing of Lump-Sum Payment of judges’ accrued
annual leave</header>
<subsection commented="no" display-inline="no-display-inline" id="ID6230D1B989C74556B1BDC86D0245CC41">
<enum>(a)</enum>
<header>In general</header>
<text display-inline="yes-display-inline">Section 7443 (relating to
membership of the Tax Court) is amended by adding at the end the following new
subsection:</text>
<quoted-block display-inline="no-display-inline" id="ID8493302D3FF843ADBA9A500271424D02" style="OLC">
<subsection commented="no" display-inline="no-display-inline" id="ID843A6E4DFD8342EABD58F61AC6608E7E">
<enum>(h)</enum>
<header>Lump-Sum Payment of judges’ accrued annual leave</header>
<text display-inline="yes-display-inline">Notwithstanding the
provisions of sections 5551 and 6301 of title 5, United States Code, when an
individual subject to the leave system provided in chapter 63 of that title is
appointed by the President to be a judge of the Tax Court, the individual shall
be entitled to receive, upon appointment to the Tax Court, a lump-sum payment
from the Tax Court of the accumulated and accrued current annual leave standing
to the individual’s credit as certified by the agency from which the individual
resigned.</text>
</subsection><after-quoted-block></after-quoted-block></quoted-block>
</subsection><subsection commented="no" display-inline="no-display-inline" id="ID9E863F926C7E442FA7F3F11EAF0EB633">
<enum>(b)</enum>
<header>Effective date</header>
<text display-inline="yes-display-inline">The amendment made by this
section shall apply to any judge of the United States Tax Court who has an
outstanding leave balance on the date of the enactment of this Act and to any
individual appointed by the President to serve as a judge of the United States
Tax Court after such date.</text>
</subsection></section><section commented="no" display-inline="no-display-inline" id="IDE8977C68CB014513A5AE146BBC113A66" section-type="subsequent-section">
<enum>606.</enum>
<header>Participation of Tax Court judges in the Thrift Savings
Plan</header>
<subsection commented="no" display-inline="no-display-inline" id="IDD63B316F65814AF7B113C256CCAC28BE">
<enum>(a)</enum>
<header>In general</header>
<text display-inline="yes-display-inline">Section 7447 (relating to
retirement of judges), as amended by this Act, is amended by adding at the end
the following new subsection:</text>
<quoted-block display-inline="no-display-inline" id="ID39C48D17EFDF4913B76B9404066EF645" style="OLC">
<subsection commented="no" display-inline="no-display-inline" id="ID33CADF89C4534BC98E0B152F359EFD67">
<enum>(k)</enum>
<header>Thrift Savings Plan</header>
<paragraph commented="no" display-inline="no-display-inline" id="ID650785EA5D424390A3A9805CC7A0802A">
<enum>(1)</enum>
<header>Election to contribute</header>
<subparagraph commented="no" display-inline="no-display-inline" id="IDADE942ADA9024DAFAC25A1372AA85983">
<enum>(A)</enum>
<header>In general</header>
<text display-inline="yes-display-inline">A judge of the Tax Court
may elect to contribute to the Thrift Savings Fund established by section 8437
of title 5, United States Code.</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID437F32E72FC846D597FFBFBF0AD0C233">
<enum>(B)</enum>
<header>Period of election</header>
<text display-inline="yes-display-inline">An election may be made
under this paragraph only during a period provided under section 8432(b) of
title 5, United States Code, for individuals subject to chapter 84 of such
title.</text>
</subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDAB52E53ADA0A452A907D0F401B7BA5E9">
<enum>(2)</enum>
<header>Applicability of title <enum-in-header>5</enum-in-header>
provisions</header>
<text display-inline="yes-display-inline">Except as otherwise
provided in this subsection, the provisions of subchapters III and VII of
chapter 84 of title 5, United States Code, shall apply with respect to a judge
who makes an election under paragraph (1).</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID8836C61B712A46CDAB6D079EF01496C8">
<enum>(3)</enum>
<header>Special rules</header>
<subparagraph commented="no" display-inline="no-display-inline" id="ID914C9C75B91F4F6D95B9B9B03EF0D45C">
<enum>(A)</enum>
<header>Amount contributed</header>
<text display-inline="yes-display-inline">The amount contributed by a
judge to the Thrift Savings Fund in any pay period shall not exceed the maximum
percentage of such judge’s basic pay for such period as allowable under section
8440f of title 5, United States Code. Basic pay does not include any retired
pay paid pursuant to this section.</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID4B4CDE0851394A489D1BA3DC6C9870E1">
<enum>(B)</enum>
<header>Contributions for benefit of judge</header>
<text display-inline="yes-display-inline">No contributions may be
made for the benefit of a judge under section 8432(c) of title 5, United States
Code.</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID44076B1BBB3243B3B00E5DA1B3BAC8A6">
<enum>(C)</enum>
<header>Applicability of Section
8433<enum-in-header>(b)</enum-in-header> of title
<enum-in-header>5</enum-in-header> whether or not judge retires</header>
<text display-inline="yes-display-inline">Section 8433(b) of title 5,
United States Code, applies with respect to a judge who makes an election under
paragraph (1) and who either—</text>
<clause commented="no" display-inline="no-display-inline" id="ID88F41312A9654C2FA56185CE3A4EC174">
<enum>(i)</enum>
<text display-inline="yes-display-inline">retires under subsection
(b), or</text>
</clause><clause commented="no" display-inline="no-display-inline" id="IDBABD55A43D084DEC9A1702E834621F29">
<enum>(ii)</enum>
<text display-inline="yes-display-inline">ceases to serve as a judge
of the Tax Court but does not retire under subsection (b).</text>
</clause><continuation-text commented="no" continuation-text-level="subparagraph">Retirement under subsection (b) is
a separation from service for purposes of subchapters III and VII of chapter 84
of that title.</continuation-text></subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID9E77BA24180845BC9472A8BD1B799403">
<enum>(D)</enum>
<header>Applicability of Section
8351<enum-in-header>(b)</enum-in-header>(5) of title
<enum-in-header>5</enum-in-header></header>
<text display-inline="yes-display-inline">The provisions of section
8351(b)(5) of title 5, United States Code, shall apply with respect to a judge
who makes an election under paragraph (1).</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID21C814C7C5FD4748A71F8D9C74668E1D">
<enum>(E)</enum>
<header>Exception</header>
<text display-inline="yes-display-inline">Notwithstanding
subparagraph (C), if any judge retires under this section, or resigns without
having met the age and service requirements set forth under subsection (b)(2),
and such judge’s nonforfeitable account balance is less than an amount that the
Executive Director of the Office of Personnel Management prescribes by
regulation, the Executive Director shall pay the nonforfeitable account balance
to the participant in a single payment.</text>
</subparagraph></paragraph></subsection><after-quoted-block></after-quoted-block></quoted-block>
</subsection><subsection commented="no" display-inline="no-display-inline" id="ID643866B2B41D4B3D922F5F684191ADE1">
<enum>(b)</enum>
<header>Effective date</header>
<text display-inline="yes-display-inline">The amendment made by this
section shall take effect on the date of the enactment of this Act, except that
United States Tax Court judges may only begin to participate in the Thrift
Savings Plan at the next open season beginning after such date.</text>
</subsection></section><section commented="no" display-inline="no-display-inline" id="ID42C4857BF6B44F56A041AFE05BD78036" section-type="subsequent-section">
<enum>607.</enum>
<header>Exemption of teaching compensation of retired judges from
limitation on outside earned income</header>
<subsection commented="no" display-inline="no-display-inline" id="IDAC5E3AE051B640A3B4CE01E9D70E4B64">
<enum>(a)</enum>
<header>In general</header>
<text display-inline="yes-display-inline">Section 7447 (relating to
retirement of judges), as amended by this Act, is amended by adding at the end
the following new subsection:</text>
<quoted-block display-inline="no-display-inline" id="ID679C1165979A40E1A939B5C8B1EDC9F6" style="OLC">
<subsection commented="no" display-inline="no-display-inline" id="ID3E14E152BB694098B4E027C869FDD5F7">
<enum>(l)</enum>
<header>Teaching compensation of retired judges</header>
<text display-inline="yes-display-inline">For purposes of the
limitation under section 501(a) of the Ethics in Government Act of 1978 (5
U.S.C. App.), any compensation for teaching approved under section 502(a)(5) of
such Act shall not be treated as outside earned income when received by a judge
of the Tax Court who has retired under subsection (b) for teaching performed
during any calendar year for which such a judge has met the requirements of
subsection (c), as certified by the chief judge of the Tax Court.</text>
</subsection><after-quoted-block></after-quoted-block></quoted-block>
</subsection><subsection commented="no" display-inline="no-display-inline" id="IDA7910131499941B58747831198C10AF9">
<enum>(b)</enum>
<header>Effective date</header>
<text display-inline="yes-display-inline">The amendment made by this
section shall apply to any individual serving as a retired judge of the United
States Tax Court on or after the date of the enactment of this Act.</text>
</subsection></section><section commented="no" display-inline="no-display-inline" id="ID7A30D241A4FE4B76B0339AFA4C658CCA" section-type="subsequent-section">
<enum>608.</enum>
<header>General provisions relating to Magistrate Judges of the Tax
Court</header>
<subsection commented="no" display-inline="no-display-inline" id="ID261F128105F64BAE89779F6899C82A52">
<enum>(a)</enum>
<header>Title OF special trial judge changed to magistrate judge of the
Tax Court</header>
<text display-inline="yes-display-inline">The heading of section 7443A
is amended to read as follows:</text>
<quoted-block display-inline="no-display-inline" id="ID43DEF705E6844395B4D54F95CA09F261" style="OLC">
<section commented="no" display-inline="no-display-inline" id="ID8B81076657B749388E661BC052E0D24D" section-type="subsequent-section">
<enum>7443A.</enum>
<header>Magistrate Judges of the Tax Court</header>
</section><after-quoted-block></after-quoted-block></quoted-block>
</subsection><subsection commented="no" display-inline="no-display-inline" id="ID9EA7EB46CFB24BE3899C66914E8F67A5">
<enum>(b)</enum>
<header>Appointment, tenure, and removal</header>
<text display-inline="yes-display-inline">Subsection (a) of section
7443A is amended to read as follows:</text>
<quoted-block display-inline="no-display-inline" id="ID01A4790CA7C04EE48DB9050C22360D8E" style="OLC">
<subsection commented="no" display-inline="no-display-inline" id="IDB05A9342DA214371A4674E5782F5B145">
<enum>(a)</enum>
<header>Appointment, tenure, and removal</header>
<paragraph commented="no" display-inline="no-display-inline" id="IDD5FB552D3C424DE89B1323F8463A6A81">
<enum>(1)</enum>
<header>Appointment</header>
<text display-inline="yes-display-inline">The chief judge may, from
time to time, appoint and reappoint magistrate judges of the Tax Court for a
term of 8 years. The magistrate judges of the Tax Court shall proceed under
such rules as may be promulgated by the Tax Court.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDC85E9293B6FC434CBC9D2F15D8074C70">
<enum>(2)</enum>
<header>Removal</header>
<text display-inline="yes-display-inline">Removal of a magistrate
judge of the Tax Court during the term for which he or she is appointed shall
be only for incompetency, misconduct, neglect of duty, or physical or mental
disability, but the office of a magistrate judge of the Tax Court shall be
terminated if the judges of the Tax Court determine that the services performed
by the magistrate judge of the Tax Court are no longer needed. Removal shall
not occur unless a majority of all the judges of the Tax Court concur in the
order of removal. Before any order of removal shall be entered, a full
specification of the charges shall be furnished to the magistrate judge of the
Tax Court, and he or she shall be accorded by the judges of the Tax Court an
opportunity to be heard on the charges.</text>
</paragraph></subsection><after-quoted-block></after-quoted-block></quoted-block>
</subsection><subsection commented="no" display-inline="no-display-inline" id="IDFD5098F10C0D41ECB13CDA9358E7B740">
<enum>(c)</enum>
<header>Salary</header>
<text display-inline="yes-display-inline">Section 7443A(d) (relating to
salary) is amended by striking <quote>90</quote> and inserting
<quote>92</quote>.</text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="ID5E7C3E430DC249B08CCCBAE7B78A2C86">
<enum>(d)</enum>
<header>Exemption from Federal leave provisions</header>
<text display-inline="yes-display-inline">Section 7443A is amended by
adding at the end the following new subsection:</text>
<quoted-block display-inline="no-display-inline" id="IDAC0E089A91914FAA8DC2860717177479" style="OLC">
<subsection commented="no" display-inline="no-display-inline" id="ID68A0AB409ED94BD2B7ED371B0EAC01C2">
<enum>(f)</enum>
<header>Exemption from Federal leave provisions</header>
<paragraph commented="no" display-inline="no-display-inline" id="ID89E4A0A7163F41D28555105BEDA7BB64">
<enum>(1)</enum>
<header>In general</header>
<text display-inline="yes-display-inline">A magistrate judge of the
Tax Court appointed under this section shall be exempt from the provisions of
subchapter I of chapter 63 of title 5, United States Code.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID263ACC9BC34B436788657BEDBED917D8">
<enum>(2)</enum>
<header>Treatment of unused leave</header>
<subparagraph commented="no" display-inline="no-display-inline" id="ID94F6466ACA4645FB8A759907E3FF2B8D">
<enum>(A)</enum>
<header>After service as magistrate judge</header>
<text display-inline="yes-display-inline">If an individual who is
exempted under paragraph (1) from the subchapter referred to in such paragraph
was previously subject to such subchapter and, without a break in service,
again becomes subject to such subchapter on completion of the individual’s
service as a magistrate judge, the unused annual leave and sick leave standing
to the individual’s credit when such individual was exempted from this
subchapter is deemed to have remained to the individual’s credit.</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID8EAD59B1ACC243A7B2D6C6110BA25F14">
<enum>(B)</enum>
<header>Computation of annuity</header>
<text display-inline="yes-display-inline">In computing an annuity
under section 8339 of title 5, United States Code, the total service of an
individual specified in subparagraph (A) who retires on an immediate annuity or
dies leaving a survivor or survivors entitled to an annuity includes, without
regard to the limitations imposed by subsection (f) of such section 8339, the
days of unused sick leave standing to the individual’s credit when such
individual was exempted from subchapter I of chapter 63 of title 5, United
States Code, except that these days will not be counted in determining average
pay or annuity eligibility.</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID858ED5A13D93462F8294701B4C725616">
<enum>(C)</enum>
<header>Lump sum payment</header>
<text display-inline="yes-display-inline">Any accumulated and current
accrued annual leave or vacation balances credited to a magistrate judge as of
the date of the enactment of this subsection shall be paid in a lump sum at the
time of separation from service pursuant to the provisions and restrictions set
forth in section 5551 of title 5, United States Code, and related provisions
referred to in such section.</text>
</subparagraph></paragraph></subsection><after-quoted-block></after-quoted-block></quoted-block>
</subsection><subsection commented="no" display-inline="no-display-inline" id="ID101A03AAE44A47448686D92240E4D29A">
<enum>(e)</enum>
<header>Conforming amendments</header>
<paragraph commented="no" display-inline="no-display-inline" id="ID7540F2DEF8CE4144B2847CC04CD8A33B">
<enum>(1)</enum>
<text display-inline="yes-display-inline">The heading of subsection (b)
of section 7443A is amended by striking <quote><header-in-text level="subsection" style="OLC">Special Trial Judges</header-in-text></quote>
and inserting <quote>Magistrate Judges of the Tax Court</quote>.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID7E5D8FEE52954A9689FA8E1B7623B6E0">
<enum>(2)</enum>
<text display-inline="yes-display-inline">Section 7443A(b) is amended
by striking <quote>special trial judges of the court</quote> and inserting
<quote>magistrate judges of the Tax Court</quote>.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID650AC44118A34DF88F33D98B85157734">
<enum>(3)</enum>
<text display-inline="yes-display-inline">Subsections (c) and (d) of
section 7443A are amended by striking <quote>special trial judge</quote> and
inserting <quote>magistrate judge of the Tax Court</quote> each place it
appears.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID6F8B7FF19F1B4081A41B2A1B6BFA956C">
<enum>(4)</enum>
<text display-inline="yes-display-inline">Section 7443A(e) is amended
by striking <quote>special trial judges</quote> and inserting <quote>magistrate
judges of the Tax Court</quote>.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID19163C37EBA048D89EBF8005F3275977">
<enum>(5)</enum>
<text display-inline="yes-display-inline">Section 7456(a) is amended by
striking <quote>special trial judge</quote> each place it appears and inserting
<quote>magistrate judge</quote>.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDB75E52E924E94A44B978042A747187CD">
<enum>(6)</enum>
<text display-inline="yes-display-inline">Subsection (c) of section
7471 is amended—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="IDFEBDFDA942C743F68B77143F86F88DA8">
<enum>(A)</enum>
<text display-inline="yes-display-inline">by striking the subsection
heading and inserting <quote><header-in-text level="subsection" style="OLC">Magistrate Judges of the Tax Court</header-in-text>.—</quote>,
and</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="IDDFCB250A3EDF41BBB8DA54F87BCE6618">
<enum>(B)</enum>
<text display-inline="yes-display-inline">by striking <quote>special
trial judges</quote> and inserting <quote>magistrate judges</quote>.</text>
</subparagraph></paragraph></subsection></section><section commented="no" display-inline="no-display-inline" id="ID34EFEDB01E1A4314946177BE3FDED0C8" section-type="subsequent-section">
<enum>609.</enum>
<header>Annuities to surviving spouses and dependent children of
Magistrate Judges of the Tax Court</header>
<subsection commented="no" display-inline="no-display-inline" id="IDBCD358DC8F4D419585F847F502BD25AD">
<enum>(a)</enum>
<header>Definitions</header>
<text display-inline="yes-display-inline">Section 7448(a) (relating to
definitions), as amended by this Act, is amended by redesignating paragraphs
(5), (6), (7), and (8) as paragraphs (7), (8), (9), and (10), respectively, and
by inserting after paragraph (4) the following new paragraphs:</text>
<quoted-block display-inline="no-display-inline" id="ID966BED4F12D3448C811DBF78A91AF547" style="OLC">
<paragraph commented="no" display-inline="no-display-inline" id="ID9605203A8DD04133AA14ED4CCFD95F2E">
<enum>(5)</enum>
<text display-inline="yes-display-inline">The term <term>magistrate
judge</term> means a judicial officer appointed pursuant to section 7443A,
including any individual receiving an annuity under section 7443B, or chapters
83 or 84, as the case may be, of title 5, United States Code, whether or not
performing judicial duties under section 7443C.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID24982C803A5E4C6D9C9934801712A9F0">
<enum>(6)</enum>
<text display-inline="yes-display-inline">The term <term>magistrate
judge’s salary</term> means the salary of a magistrate judge received under
section 7443A(d), any amount received as an annuity under section 7443B, or
chapters 83 or 84, as the case may be, of title 5, United States Code, and
compensation received under section 7443C.</text>
</paragraph><after-quoted-block></after-quoted-block></quoted-block>
</subsection><subsection commented="no" display-inline="no-display-inline" id="ID398F06FA4A3F474D9A869F1A893DCAB6">
<enum>(b)</enum>
<header>Election</header>
<text display-inline="yes-display-inline">Subsection (b) of section
7448 (relating to annuities to surviving spouses and dependent children of
judges) is amended—</text>
<paragraph commented="no" display-inline="no-display-inline" id="IDC7859DC7D5BA44868EE994B8CDBD8B8F">
<enum>(1)</enum>
<text display-inline="yes-display-inline">by striking the subsection
heading and inserting the following:</text>
<quoted-block display-inline="no-display-inline" id="ID5E5FA12B2EE04648A504CCBDDF0B778E" style="OLC">
<subsection commented="no" display-inline="no-display-inline" id="ID191A0A6251ED43E79ED9E7CDF71E8D32">
<enum>(b)</enum>
<header>Election</header>
<paragraph commented="no" display-inline="no-display-inline" id="ID842608F33705432594817D45112A6552">
<enum>(1)</enum>
<header>Judges</header>
</paragraph></subsection><after-quoted-block>,</after-quoted-block></quoted-block>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID4023E03E915D4D9482328F10A6D4BAEC">
<enum>(2)</enum>
<text display-inline="yes-display-inline">by moving the text 2 ems to
the right, and</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDC94731A857EB429AAFF78F1F6C42061B">
<enum>(3)</enum>
<text display-inline="yes-display-inline">by adding at the end the
following new paragraph:</text>
<quoted-block display-inline="no-display-inline" id="IDC49888D2F8184A85B22DF500E092ADFC" style="OLC">
<paragraph commented="no" display-inline="no-display-inline" id="IDE9AE9BDA47514B388B8C2C36BC97E125">
<enum>(2)</enum>
<header>Magistrate judges</header>
<text display-inline="yes-display-inline">Any magistrate judge may by
written election filed with the chief judge bring himself or herself within the
purview of this section. Such election shall be filed not later than the later
of 6 months after—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="ID0428239C9ECF41B5893AD0EE3D89A33C">
<enum>(A)</enum>
<text display-inline="yes-display-inline">6 months after the date of
the enactment of this paragraph,</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="IDF6CB3E281B9F4FD8BBB7FD14054D7C13">
<enum>(B)</enum>
<text display-inline="yes-display-inline">the date the judge takes
office, or</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="IDB2DF957BF6AD4F46BE73965302DB6C3F">
<enum>(C)</enum>
<text display-inline="yes-display-inline">the date the judge
marries.</text>
</subparagraph></paragraph><after-quoted-block></after-quoted-block></quoted-block>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="ID891713625F1F4F3A8E7A1E3D25390D8C">
<enum>(c)</enum>
<header>Conforming amendments</header>
<paragraph commented="no" display-inline="no-display-inline" id="IDC46735C23D2C4D2FBAE3C3CCC0379FCE">
<enum>(1)</enum>
<text display-inline="yes-display-inline">The heading of section 7448
is amended by inserting <quote><header-in-text level="section" style="OLC">and
magistrate judges</header-in-text></quote> after <quote><header-in-text level="section" style="OLC">judges</header-in-text></quote>.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID1B32EFEDD4054561A6BFE9D308AC4A68">
<enum>(2)</enum>
<text display-inline="yes-display-inline">The item relating to section
7448 in the table of sections for part I of subchapter C of chapter 76 is
amended by inserting <quote>and magistrate judges</quote> after
<quote>judges</quote>.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID0A0B3F8372174533A4AE5E178EF991B0">
<enum>(3)</enum>
<text display-inline="yes-display-inline">Subsections (c)(1), (d), (f),
(g), (h), (j), (m), (n), and (u) of section 7448, as amended by this Act, are
each amended—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="ID4054F9CA3AC84F17826E1B660D70DB11">
<enum>(A)</enum>
<text display-inline="yes-display-inline">by inserting <quote>or
magistrate judge</quote> after <quote>judge</quote> each place it appears other
than in the phrase <quote>chief judge</quote>, and</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID0C038B334F38471F87C494A9AC5F27B9">
<enum>(B)</enum>
<text display-inline="yes-display-inline">by inserting <quote>or
magistrate judge’s</quote> after <quote>judge’s</quote> each place it
appears.</text>
</subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID7C6F1656399D499BA4B96DA8E4C55081">
<enum>(4)</enum>
<text display-inline="yes-display-inline">Section 7448(c) is
amended—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="ID01D6FDC3EAF4401B891063A2F872EC0F">
<enum>(A)</enum>
<text display-inline="yes-display-inline">in paragraph (1), by striking
<quote>Tax Court judges</quote> and inserting <quote>Tax Court judicial
officers</quote>,</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="IDFD100B16CEAA4C05A1AD2D9DE883C3D5">
<enum>(B)</enum>
<text display-inline="yes-display-inline">in paragraph (2)—</text>
<clause commented="no" display-inline="no-display-inline" id="ID257CE05AFF374AC2909D32E548F9D569">
<enum>(i)</enum>
<text display-inline="yes-display-inline">in subparagraph (A), by
inserting <quote>and section 7443A(d)</quote> after <quote>(a)(4)</quote>,
and</text>
</clause><clause commented="no" display-inline="no-display-inline" id="ID3DEB2828E7424A8B9A988C9B332A64CE">
<enum>(ii)</enum>
<text display-inline="yes-display-inline">in subparagraph (B), by
striking <quote>subsection (a)(4)</quote> and inserting <quote>subsections
(a)(4) and (a)(6)</quote>.</text>
</clause></subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID43812337DFFA4959A06BADA04DADA17E">
<enum>(5)</enum>
<text display-inline="yes-display-inline">Section 7448(g) is amended by
inserting <quote>or section 7443B</quote> after <quote>section 7447</quote>
each place it appears, and by inserting <quote>or an annuity</quote> after
<quote>retired pay</quote>.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID7A65B3FCE90E47AC8157902A768A7ED5">
<enum>(6)</enum>
<text display-inline="yes-display-inline">Section 7448(j)(1) is
amended—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="ID42B04B5015B34EE4AF5120315F3209C4">
<enum>(A)</enum>
<text display-inline="yes-display-inline">in subparagraph (A), by
striking <quote>service or retired</quote> and inserting <quote>service,
retired</quote>, and by inserting <quote>, or receiving any annuity under
section 7443B or chapters 83 or 84 of title 5, United States Code,</quote>
after <quote>section 7447</quote>, and</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID861C2586F4B0406F935051721CE2A4A9">
<enum>(B)</enum>
<text display-inline="yes-display-inline">in the last sentence, by
striking <quote>subsections (a) (6) and (7)</quote> and inserting
<quote>paragraphs (8) and (9) of subsection (a)</quote>.</text>
</subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID9391596DE30642739A3DA3199990926F">
<enum>(7)</enum>
<text display-inline="yes-display-inline">Section 7448(m)(1), as
amended by this Act, is amended—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="IDF1DD6B808AA0481AB5CE94F57ADD0116">
<enum>(A)</enum>
<text display-inline="yes-display-inline">by inserting <quote>or any
annuity under section 7443B or chapters 83 or 84 of title 5, United States
Code</quote> after <quote>7447(d)</quote>, and</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID439545C073404A8AB458E27ED3E9A71A">
<enum>(B)</enum>
<text display-inline="yes-display-inline">by inserting “or
7443B(m)(1)(B) after “7447(f)(4)”.</text>
</subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDC9DEC06F012646B782DC9277D1031BFB">
<enum>(8)</enum>
<text display-inline="yes-display-inline">Section 7448(n) is amended by
inserting <quote>his years of service pursuant to any appointment under section
7443A,</quote> after <quote>of the Tax Court,</quote>.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID8D483247F8C8420DA0162C89A17A5AAE">
<enum>(9)</enum>
<text display-inline="yes-display-inline">Section 3121(b)(5)(E) is
amended by inserting <quote>or magistrate judge</quote> before <quote>of the
United States Tax Court</quote>.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID42E6A161772B4385B53BB383230D4EA0">
<enum>(10)</enum>
<text display-inline="yes-display-inline">
<external-xref legal-doc="act" parsable-cite="SSA/210(a)(5)(E)">Section
210(a)(5)(E)</external-xref> of the <act-name parsable-cite="SSA">Social
Security Act</act-name> is amended by inserting <quote>or magistrate
judge</quote> before <quote>of the United States Tax Court</quote>.</text>
</paragraph></subsection></section><section commented="no" display-inline="no-display-inline" id="ID8797710180574315B28992CB8EF69090" section-type="subsequent-section">
<enum>610.</enum>
<header>Retirement and annuity Program</header>
<subsection commented="no" display-inline="no-display-inline" id="IDC35703DC42A64B228210C1429EFABF38">
<enum>(a)</enum>
<header>Retirement and annuity Program</header>
<text display-inline="yes-display-inline">Part I of subchapter C of
chapter 76 is amended by inserting after section 7443A the following new
section:</text>
<quoted-block display-inline="no-display-inline" id="ID5A1E46AAC6F942C8ADDE38FE223B8484" style="OLC">
<section commented="no" display-inline="no-display-inline" id="IDF033CD504A0F42EA8DA5F7C127D1A2C1" section-type="subsequent-section">
<enum>7443B.</enum>
<header>Retirement for Magistrate Judges of the Tax Court</header>
<subsection commented="no" display-inline="no-display-inline" id="ID7E13AD649B8D4586B493E289439AB401">
<enum>(a)</enum>
<header>Retirement based on years of service</header>
<text display-inline="yes-display-inline">A magistrate judge of the
Tax Court to whom this section applies and who retires from office after
attaining the age of 65 years and serving at least 14 years, whether
continuously or otherwise, as such magistrate judge shall, subject to
subsection (f), be entitled to receive, during the remainder of the magistrate
judge’s lifetime, an annuity equal to the salary being received at the time the
magistrate judge leaves office.</text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="ID47043D2B9C8B46F4BDB5627FDC0977E9">
<enum>(b)</enum>
<header>Retirement upon failure of reappointment</header>
<text display-inline="yes-display-inline">A magistrate judge of the
Tax Court to whom this section applies who is not reappointed following the
expiration of the term of office of such magistrate judge and who retires upon
the completion of the term shall, subject to subsection (f), be entitled to
receive, upon attaining the age of 65 years and during the remainder of such
magistrate judge’s lifetime, an annuity equal to that portion of the salary
being received at the time the magistrate judge leaves office which the
aggregate number of years of service, not to exceed 14, bears to 14, if—</text>
<paragraph commented="no" display-inline="no-display-inline" id="ID85C159A04B284ADB8487678F3AA6A227">
<enum>(1)</enum>
<text display-inline="yes-display-inline">such magistrate judge has
served at least 1 full term as a magistrate judge, and</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDB6954B0D6AE6481A8D3AD1BF66D01AA7">
<enum>(2)</enum>
<text display-inline="yes-display-inline">not earlier than 9 months
before the date on which the term of office of such magistrate judge expires,
and not later than 6 months before such date, such magistrate judge notified
the chief judge of the Tax Court in writing that such magistrate judge was
willing to accept reappointment to the position in which such magistrate judge
was serving.</text>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="IDCD64C0214E3540BF97ACD8B01ABCE2FD">
<enum>(c)</enum>
<header>Service of at least 8 years</header>
<text display-inline="yes-display-inline">A magistrate judge of the
Tax Court to whom this section applies and who retires after serving at least 8
years, whether continuously or otherwise, as such a magistrate judge shall,
subject to subsection (f), be entitled to receive, upon attaining the age of 65
years and during the remainder of the magistrate judge’s lifetime, an annuity
equal to that portion of the salary being received at the time the magistrate
judge leaves office which the aggregate number of years of service, not to
exceed 14, bears to 14. Such annuity shall be reduced by
<fraction>1/6</fraction> of 1 percent for each full month such magistrate judge
was under the age of 65 at the time the magistrate judge left office, except
that such reduction shall not exceed 20 percent.</text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="IDC43AC7763FD7452CB8C8E5EEFF683B86">
<enum>(d)</enum>
<header>Retirement for disability</header>
<text display-inline="yes-display-inline">A magistrate judge of the
Tax Court to whom this section applies, who has served at least 5 years,
whether continuously or otherwise, as such a magistrate judge and who retires
or is removed from office upon the sole ground of mental or physical disability
shall, subject to subsection (f), be entitled to receive, during the remainder
of the magistrate judge’s lifetime, an annuity equal to 40 percent of the
salary being received at the time of retirement or removal or, in the case of a
magistrate judge who has served for at least 10 years, an amount equal to that
proportion of the salary being received at the time of retirement or removal
which the aggregate number of years of service, not to exceed 14, bears to
14.</text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="IDC5675F3598A14B2CB80461A26B215511">
<enum>(e)</enum>
<header>Cost-of-Living adjustments</header>
<text display-inline="yes-display-inline">A magistrate judge of the
Tax Court who is entitled to an annuity under this section is also entitled to
a cost-of-living adjustment in such annuity, calculated and payable in the same
manner as adjustments under section 8340(b) of title 5, United States Code,
except that any such annuity, as increased under this subsection, may not
exceed the salary then payable for the position from which the magistrate judge
retired or was removed.</text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="ID7BB28A0220C04BEA8A21E334F3971FFB">
<enum>(f)</enum>
<header>Election; annuity in lieu of other annuities</header>
<paragraph commented="no" display-inline="no-display-inline" id="ID65F199640FD14ACE8F4A7C6A871D2BD9">
<enum>(1)</enum>
<header>In general</header>
<text display-inline="yes-display-inline">A magistrate judge of the
Tax Court shall be entitled to an annuity under this section if the magistrate
judge elects an annuity under this section by notifying the chief judge of the
Tax Court not later than the later of—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="IDD28B208AAB5B4613A3D21E4EC22DE8E9">
<enum>(A)</enum>
<text display-inline="yes-display-inline">5 years after the
magistrate judge of the Tax Court begins judicial service, or</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="IDCAA952C0F8FE4AF9B9015401BED04EF6">
<enum>(B)</enum>
<text display-inline="yes-display-inline">5 years after the date of
the enactment of this subsection.</text>
</subparagraph><continuation-text commented="no" continuation-text-level="paragraph">Such notice shall be given in
accordance with procedures prescribed by the Tax Court.</continuation-text></paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDE2C5D78B8F8441F1B7E4DEFCDF79E230">
<enum>(2)</enum>
<header>Annuity in lieu of other annuity</header>
<text display-inline="yes-display-inline">A magistrate judge who
elects to receive an annuity under this section shall not be entitled to
receive—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="IDC650DA71A9094FDDA860B475607718D9">
<enum>(A)</enum>
<text display-inline="yes-display-inline">any annuity to which such
magistrate judge would otherwise have been entitled under subchapter III of
chapter 83, or under chapter 84 (except for subchapters III and VII), of title
5, United States Code, for service performed as a magistrate or
otherwise,</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID440BA170A8C34ED8AB733E4A215C3580">
<enum>(B)</enum>
<text display-inline="yes-display-inline">an annuity or salary in
senior status or retirement under section 371 or 372 of title 28, United States
Code,</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID15611F680C84410DA471AFC4B2E8F4F9">
<enum>(C)</enum>
<text display-inline="yes-display-inline">retired pay under section
7447, or</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="IDAFAC40DDC78B4816AF26701571639A0B">
<enum>(D)</enum>
<text display-inline="yes-display-inline">retired pay under section
7296 of title 38, United States Code.</text>
</subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID77CE63F9736F4ABC902DEE01A19BF19A">
<enum>(3)</enum>
<header>Coordination with title
<enum-in-header>5</enum-in-header></header>
<text display-inline="yes-display-inline">A magistrate judge of the
Tax Court who elects to receive an annuity under this section—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="ID51137366C8CD4F019B501E04DE8D393F">
<enum>(A)</enum>
<text display-inline="yes-display-inline">shall not be subject to
deductions and contributions otherwise required by section 8334(a) of title 5,
United States Code,</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="IDA0DD0AE6BFD34C8DA2492C6F91644E7B">
<enum>(B)</enum>
<text display-inline="yes-display-inline">shall be excluded from the
operation of chapter 84 (other than subchapters III and VII) of such title 5,
and</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="IDD717F1ADFDE9454CB92E75F8A0205282">
<enum>(C)</enum>
<text display-inline="yes-display-inline">is entitled to a lump-sum
credit under section 8342(a) or 8424 of such title 5, as the case may
be.</text>
</subparagraph></paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="IDBC946BD1202C4B8B92C366CB3605B25F">
<enum>(g)</enum>
<header>Calculation of service</header>
<text display-inline="yes-display-inline">For purposes of calculating
an annuity under this section—</text>
<paragraph commented="no" display-inline="no-display-inline" id="ID0EA8DEF7D07C4A758AB431DB05B30BC4">
<enum>(1)</enum>
<text display-inline="yes-display-inline">service as a magistrate
judge of the Tax Court to whom this section applies may be credited, and</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID4AAA41892B644387B4A65EA36A3FAB8F">
<enum>(2)</enum>
<text display-inline="yes-display-inline">each month of service shall
be credited as <fraction>1/12</fraction> of a year, and the fractional part of
any month shall not be credited.</text>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="IDFD6D7BA4FF114627BC161915518512B6">
<enum>(h)</enum>
<header>Covered positions and service</header>
<text display-inline="yes-display-inline">This section applies to any
magistrate judge of the Tax Court or special trial judge of the Tax Court
appointed under this subchapter, but only with respect to service as such a
magistrate judge or special trial judge after a date not earlier than
9<fraction>1/2</fraction> years before the date of the enactment of this
subsection.</text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="IDFD6AE7258BDE4D58B45C46F5CC4C2C23">
<enum>(i)</enum>
<header>Payments pursuant to court order</header>
<paragraph commented="no" display-inline="no-display-inline" id="IDDFCAE0CFF24A43999040338A582D6A31">
<enum>(1)</enum>
<header>In general</header>
<text display-inline="yes-display-inline">Payments under this section
which would otherwise be made to a magistrate judge of the Tax Court based upon
his or her service shall be paid (in whole or in part) by the chief judge of
the Tax Court to another person if and to the extent expressly provided for in
the terms of any court decree of divorce, annulment, or legal separation, or
the terms of any court order or court-approved property settlement agreement
incident to any court decree of divorce, annulment, or legal separation. Any
payment under this paragraph to a person bars recovery by any other
person.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID666DAD32E825470E9BD0DF443630793F">
<enum>(2)</enum>
<header>Requirements for payment</header>
<text display-inline="yes-display-inline">Paragraph (1) shall apply
only to payments made by the chief judge of the Tax Court after the date of
receipt by the chief judge of written notice of such decree, order, or
agreement, and such additional information as the chief judge may
prescribe.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID74A85E72902F4F868C140E3096424669">
<enum>(3)</enum>
<header>Court defined</header>
<text display-inline="yes-display-inline">For purposes of this
subsection, the term <term>court</term> means any court of any State, the
District of Columbia, the Commonwealth of Puerto Rico, Guam, the Northern
Mariana Islands, or the Virgin Islands, and any Indian tribal court or courts
of Indian offense.</text>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="ID73FA35F28BC645079C2EDB9261E7A8F5">
<enum>(j)</enum>
<header>Deductions, contributions, and deposits</header>
<paragraph commented="no" display-inline="no-display-inline" id="ID2BA5679A61404F49ADD35A6407641574">
<enum>(1)</enum>
<header>Deductions</header>
<text display-inline="yes-display-inline">Beginning with the next pay
period after the chief judge of the Tax Court receives a notice under
subsection (f) that a magistrate judge of the Tax Court has elected an annuity
under this section, the chief judge shall deduct and withhold 1 percent of the
salary of such magistrate judge. Amounts shall be so deducted and withheld in a
manner determined by the chief judge. Amounts deducted and withheld under this
subsection shall be deposited in the Treasury of the United States to the
credit of the Tax Court Judicial Officers’ Retirement Fund. Deductions under
this subsection from the salary of a magistrate judge shall terminate upon the
retirement of the magistrate judge or upon completion of 14 years of service
for which contributions under this section have been made, whether continuously
or otherwise, as calculated under subsection (g), whichever occurs
first.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID44A318A9D22948C9B8ED654DED67B23D">
<enum>(2)</enum>
<header>Consent to deductions; discharge of claims</header>
<text display-inline="yes-display-inline">Each magistrate judge of
the Tax Court who makes an election under subsection (f) shall be deemed to
consent and agree to the deductions from salary which are made under paragraph
(1). Payment of such salary less such deductions (and any deductions made under
section 7448) is a full and complete discharge and acquittance of all claims
and demands for all services rendered by such magistrate judge during the
period covered by such payment, except the right to those benefits to which the
magistrate judge is entitled under this section (and section 7448).</text>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="IDFE9CFC6B39CF4B89B8AF437080ED0284">
<enum>(k)</enum>
<header>Deposits for prior service</header>
<text display-inline="yes-display-inline">Each magistrate judge of
the Tax Court who makes an election under subsection (f) may deposit, for
service performed before such election for which contributions may be made
under this section, an amount equal to 1 percent of the salary received for
that service. Credit for any period covered by that service may not be allowed
for purposes of an annuity under this section until a deposit under this
subsection has been made for that period.</text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="ID03BB17C2A4B044FB87A7560FF2DC0C95">
<enum>(l)</enum>
<header>Individual retirement records</header>
<text display-inline="yes-display-inline">The amounts deducted and
withheld under subsection (j), and the amounts deposited under subsection (k),
shall be credited to individual accounts in the name of each magistrate judge
of the Tax Court from whom such amounts are received, for credit to the Tax
Court Judicial Officers’ Retirement Fund.</text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="ID28D31D54DCB84CFB81E2EF779AF22902">
<enum>(m)</enum>
<header>Annuities affected in certain cases</header>
<paragraph commented="no" display-inline="no-display-inline" id="ID6FBDC27030DC4286B137C6477154C035">
<enum>(1)</enum>
<header>1-year forfeiture for failure to perform judicial
duties</header>
<text display-inline="yes-display-inline">Subject to paragraph (3),
any magistrate judge of the Tax Court who retires under this section and who
fails to perform judicial duties required of such individual by section 7443C
shall forfeit all rights to an annuity under this section for a 1-year period
which begins on the 1st day on which such individual fails to perform such
duties.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID1559AD45711A4D30AB9FD0F48AA9EC12">
<enum>(2)</enum>
<header>Permanent forfeiture of retired pay where certain
non-government services performed</header>
<text display-inline="yes-display-inline">Subject to paragraph (3),
any magistrate judge of the Tax Court who retires under this section and who
thereafter performs (or supervises or directs the performance of) legal or
accounting services in the field of Federal taxation for the individual’s
client, the individual’s employer, or any of such employer’s clients, shall
forfeit all rights to an annuity under this section for all periods beginning
on or after the first day on which the individual performs (or supervises or
directs the performance of) such services. The preceding sentence shall not
apply to any civil office or employment under the Government of the United
States.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDF40E0E4F9CFC40E1A958113D2E493A83">
<enum>(3)</enum>
<header>Forfeitures not to apply where individual elects to freeze
amount of annuity</header>
<subparagraph commented="no" display-inline="no-display-inline" id="ID74E95F0006184E08816C3C5A8854055B">
<enum>(A)</enum>
<header>In general</header>
<text display-inline="yes-display-inline">If a magistrate judge of
the Tax Court makes an election under this paragraph—</text>
<clause commented="no" display-inline="no-display-inline" id="ID6C9C575BD94C4409A238C115C50754AE">
<enum>(i)</enum>
<text display-inline="yes-display-inline">paragraphs (1) and (2) (and
section 7443C) shall not apply to such magistrate judge beginning on the date
such election takes effect, and</text>
</clause><clause commented="no" display-inline="no-display-inline" id="IDF8512014F4D947A08A2C9FDB223A511C">
<enum>(ii)</enum>
<text display-inline="yes-display-inline">the annuity payable under
this section to such magistrate judge, for periods beginning on or after the
date such election takes effect, shall be equal to the annuity to which such
magistrate judge is entitled on the day before such effective date.</text>
</clause></subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID26BD7A01E2CD4D1EB5C86FD8647FA999">
<enum>(B)</enum>
<header>Election requirements</header>
<text display-inline="yes-display-inline">An election under
subparagraph (A)—</text>
<clause commented="no" display-inline="no-display-inline" id="ID371DCF97CABE42679F852857BD9BD9C6">
<enum>(i)</enum>
<text display-inline="yes-display-inline">may be made by a magistrate
judge of the Tax Court eligible for retirement under this section, and</text>
</clause><clause commented="no" display-inline="no-display-inline" id="IDCA073A8FC8CA4EEDAB680DD95CEE6608">
<enum>(ii)</enum>
<text display-inline="yes-display-inline">shall be filed with the
chief judge of the Tax Court.</text>
</clause><continuation-text commented="no" continuation-text-level="subparagraph">Such an election, once it takes
effect, shall be irrevocable.</continuation-text></subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID4DA8AB25803545AE8F97EC4156CFD07E">
<enum>(C)</enum>
<header>Effective date of election</header>
<text display-inline="yes-display-inline">Any election under
subparagraph (A) shall take effect on the first day of the first month
following the month in which the election is made.</text>
</subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDD6B505637FD444FAB863E6D3668EAA69">
<enum>(4)</enum>
<header>Accepting other employment</header>
<text display-inline="yes-display-inline">Any magistrate judge of the
Tax Court who retires under this section and thereafter accepts compensation
for civil office or employment under the United States Government (other than
for the performance of functions as a magistrate judge of the Tax Court under
section 7443C) shall forfeit all rights to an annuity under this section for
the period for which such compensation is received. For purposes of this
paragraph, the term <term>compensation</term> includes retired pay or salary
received in retired status.</text>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="IDA4F928D07CCC4185BB08D38AEC701AC7">
<enum>(n)</enum>
<header>Lump-Sum payments</header>
<paragraph commented="no" display-inline="no-display-inline" id="ID156BE676F58F496182D067337EF03C0B">
<enum>(1)</enum>
<header>Eligibility</header>
<subparagraph commented="no" display-inline="no-display-inline" id="ID5232367A51674BDF82C2189D4A5DCC64">
<enum>(A)</enum>
<header>In general</header>
<text display-inline="yes-display-inline">Subject to paragraph (2),
an individual who serves as a magistrate judge of the Tax Court and—</text>
<clause commented="no" display-inline="no-display-inline" id="ID66228BB5413A476E8BAFFF93D7719203">
<enum>(i)</enum>
<text display-inline="yes-display-inline">who leaves office and is
not reappointed as a magistrate judge of the Tax Court for at least 31
consecutive days,</text>
</clause><clause commented="no" display-inline="no-display-inline" id="ID965D6686C83B4F29B5F543DEA19FB3A6">
<enum>(ii)</enum>
<text display-inline="yes-display-inline">who files an application
with the chief judge of the Tax Court for payment of a lump-sum credit,</text>
</clause><clause commented="no" display-inline="no-display-inline" id="ID234E5525B4874E0F9804C1611EC226BD">
<enum>(iii)</enum>
<text display-inline="yes-display-inline">is not serving as a
magistrate judge of the Tax Court at the time of filing of the application,
and</text>
</clause><clause commented="no" display-inline="no-display-inline" id="ID1C13F375F9E249BA8D85EF01B1BFAA78">
<enum>(iv)</enum>
<text display-inline="yes-display-inline">will not become eligible to
receive an annuity under this section within 31 days after filing the
application,</text>
</clause><continuation-text commented="no" continuation-text-level="subparagraph">is entitled to be paid the
lump-sum credit. Payment of the lump-sum credit voids all rights to an annuity
under this section based on the service on which the lump-sum credit is based,
until that individual resumes office as a magistrate judge of the Tax
Court.</continuation-text></subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID211116E8B8984D538963BB159DC792A3">
<enum>(B)</enum>
<header>Payment to survivors</header>
<text display-inline="yes-display-inline">Lump-sum benefits
authorized by subparagraphs (C), (D), and (E) of this paragraph shall be paid
to the person or persons surviving the magistrate judge of the Tax Court and
alive on the date title to the payment arises, in the order of precedence set
forth in subsection (o) of section 376 of title 28, United States Code, and in
accordance with the last 2 sentences of paragraph (1) of that subsection. For
purposes of the preceding sentence, the term <term>judicial official</term> as
used in subsection (o) of such section 376 shall be deemed to mean
<quote>magistrate judge of the Tax Court</quote> and the terms
<term>Administrative Office of the United States Courts</term> and
<term>Director of the Administrative Office of the United States Courts</term>
shall be deemed to mean <quote>chief judge of the Tax Court</quote>.</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID72A05FB9F8054D5E99575B3AFC8AED71">
<enum>(C)</enum>
<header>Payment upon death of judge before receipt of
annuity</header>
<text display-inline="yes-display-inline">If a magistrate judge of
the Tax Court dies before receiving an annuity under this section, the lump-sum
credit shall be paid.</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID5181BB30190F4B41B8CCB47D88FBAEE0">
<enum>(D)</enum>
<header>Payment of annuity remainder</header>
<text display-inline="yes-display-inline">If all annuity rights under
this section based on the service of a deceased magistrate judge of the Tax
Court terminate before the total annuity paid equals the lump-sum credit, the
difference shall be paid.</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID0C2266943DF547F6A35D4ED60C2BD862">
<enum>(E)</enum>
<header>Payment upon death of judge during receipt of
annuity</header>
<text display-inline="yes-display-inline">If a magistrate judge of
the Tax Court who is receiving an annuity under this section dies, any accrued
annuity benefits remaining unpaid shall be paid.</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID76D2CB6245FA43F0AB81B3703D198EAE">
<enum>(F)</enum>
<header>Payment upon termination</header>
<text display-inline="yes-display-inline">Any accrued annuity
benefits remaining unpaid on the termination, except by death, of the annuity
of a magistrate judge of the Tax Court shall be paid to that individual.</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID1BC0A920A4424EF9A7B8DA7011C7D5BA">
<enum>(G)</enum>
<header>Payment upon accepting other employment</header>
<text display-inline="yes-display-inline">Subject to paragraph (2), a
magistrate judge of the Tax Court who forfeits rights to an annuity under
subsection (m)(4) before the total annuity paid equals the lump-sum credit
shall be entitled to be paid the difference if the magistrate judge of the Tax
Court files an application with the chief judge of the Tax Court for payment of
that difference. A payment under this subparagraph voids all rights to an
annuity on which the payment is based.</text>
</subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID65D73F913E8F413BAB7217D642EF4AFB">
<enum>(2)</enum>
<header>Spouses and former spouses</header>
<subparagraph commented="no" display-inline="no-display-inline" id="ID89FE31C0236B47EFBB81FB89DFDC6F1D">
<enum>(A)</enum>
<header>In general</header>
<text display-inline="yes-display-inline">Payment of the lump-sum
credit under paragraph (1)(A) or a payment under paragraph (1)(G)—</text>
<clause commented="no" display-inline="no-display-inline" id="ID36EDEFF7E3F34289A1AE5B1EE0EDDD26">
<enum>(i)</enum>
<text display-inline="yes-display-inline">may be made only if any
current spouse and any former spouse of the magistrate judge of the Tax Court
are notified of the magistrate judge’s application, and</text>
</clause><clause commented="no" display-inline="no-display-inline" id="ID9AC06CD695D044418241583235D1B9A4">
<enum>(ii)</enum>
<text display-inline="yes-display-inline">shall be subject to the
terms of a court decree of divorce, annulment, or legal separation, or any
court or court approved property settlement agreement incident to such decree,
if—</text>
<subclause commented="no" display-inline="no-display-inline" id="IDEB92D1C55F3947C6B2CC0F80BDE233FD">
<enum>(I)</enum>
<text display-inline="yes-display-inline">the decree, order, or
agreement expressly relates to any portion of the lump-sum credit or other
payment involved, and</text>
</subclause><subclause commented="no" display-inline="no-display-inline" id="ID403596AF23D348A5802DAB4516B61844">
<enum>(II)</enum>
<text display-inline="yes-display-inline">payment of the lump-sum
credit or other payment would extinguish entitlement of the magistrate judge’s
spouse or former spouse to any portion of an annuity under subsection
(i).</text>
</subclause></clause></subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="IDCBD95D6A98074C7BB52B506C68073298">
<enum>(B)</enum>
<header>Notification</header>
<text display-inline="yes-display-inline">Notification of a spouse or
former spouse under this paragraph shall be made in accordance with such
procedures as the chief judge of the Tax Court shall prescribe. The chief judge
may provide under such procedures that subparagraph (A)(i) may be waived with
respect to a spouse or former spouse if the magistrate judge establishes to the
satisfaction of the chief judge that the whereabouts of such spouse or former
spouse cannot be determined.</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID4D6D4137FC6140D8B3C4B57635F630FB">
<enum>(C)</enum>
<header>Resolution of 2 or more orders</header>
<text display-inline="yes-display-inline">The chief judge shall
prescribe procedures under which this paragraph shall be applied in any case in
which the chief judge receives 2 or more orders or decrees described in
subparagraph (A).</text>
</subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID1195C2AD4AA44CA987B2AFC739B6FECE">
<enum>(3)</enum>
<header>Definition</header>
<text display-inline="yes-display-inline">For purposes of this
subsection, the term <term>lump-sum credit</term> means the unrefunded amount
consisting of—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="IDA5440BEAD03B44B9A25CAAA6BB1D16F8">
<enum>(A)</enum>
<text display-inline="yes-display-inline">retirement deductions made
under this section from the salary of a magistrate judge of the Tax
Court,</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="IDFD2872C94623454586354FB527E6955A">
<enum>(B)</enum>
<text display-inline="yes-display-inline">amounts deposited under
subsection (k) by a magistrate judge of the Tax Court covering earlier service,
and</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="IDC792510E27124C208D30665BC2776933">
<enum>(C)</enum>
<text display-inline="yes-display-inline">interest on the deductions
and deposits which, for any calendar year, shall be equal to the overall
average yield to the Tax Court Judicial Officers’ Retirement Fund during the
preceding fiscal year from all obligations purchased by the Secretary during
such fiscal year under subsection (o); but does not include interest—</text>
<clause commented="no" display-inline="no-display-inline" id="ID1C912335819D486DABE8F70A2769588E">
<enum>(i)</enum>
<text display-inline="yes-display-inline">if the service covered
thereby aggregates 1 year or less, or</text>
</clause><clause commented="no" display-inline="no-display-inline" id="ID50E53AC779A04F9480B540912F4E5FF4">
<enum>(ii)</enum>
<text display-inline="yes-display-inline">for the fractional part of
a month in the total service.</text>
</clause></subparagraph></paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="ID9BBA665CBFC04865B0EF4C0D004992C5">
<enum>(o)</enum>
<header>Tax Court judicial officers’ retirement Fund</header>
<paragraph commented="no" display-inline="no-display-inline" id="ID2F83E3A729CE44A9AC74CFD09BA472ED">
<enum>(1)</enum>
<header>Establishment</header>
<text display-inline="yes-display-inline">There is established in the
Treasury a fund which shall be known as the ‘Tax Court Judicial Officers’
Retirement Fund’. Amounts in the Fund are authorized to be appropriated for the
payment of annuities, refunds, and other payments under this section.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDF1F8731AFDD840A8A47EB3E9E5384047">
<enum>(2)</enum>
<header>Investment of Fund</header>
<text display-inline="yes-display-inline">The Secretary shall invest,
in interest bearing securities of the United States, such currently available
portions of the Tax Court Judicial Officers’ Retirement Fund as are not
immediately required for payments from the Fund. The income derived from these
investments constitutes a part of the Fund.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDDFEB2BD5DB804429A817BE26FB3F7929">
<enum>(3)</enum>
<header>Unfunded liability</header>
<subparagraph commented="no" display-inline="no-display-inline" id="IDD89DB28364914A54A495249F7FD3060B">
<enum>(A)</enum>
<header>In general</header>
<text display-inline="yes-display-inline">There are authorized to be
appropriated to the Tax Court Judicial Officers’ Retirement Fund amounts
required to reduce to zero the unfunded liability of the Fund.</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID8AB931A5C0F24F238AF051AC04F5D156">
<enum>(B)</enum>
<header>Unfunded liability</header>
<text display-inline="yes-display-inline">For purposes of
subparagraph (A), the term <term>unfunded liability</term> means the estimated
excess, determined on an annual basis in accordance with the provisions of
section 9503 of title 31, United States Code, of the present value of all
benefits payable from the Tax Court Judicial Officers’ Retirement Fund over the
sum of—</text>
<clause commented="no" display-inline="no-display-inline" id="ID0FA66D81C67B4DEF903A3025A0DA0C8B">
<enum>(i)</enum>
<text display-inline="yes-display-inline">the present value of
deductions to be withheld under this section from the future basic pay of
magistrate judges of the Tax Court, plus</text>
</clause><clause commented="no" display-inline="no-display-inline" id="IDC59792824FBD47CCB37BA6B0B0DAA49C">
<enum>(ii)</enum>
<text display-inline="yes-display-inline">the balance in the Fund as
of the date the unfunded liability is determined.</text>
</clause></subparagraph></paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="IDD25D727548064C04B9F877C2E97124C8">
<enum>(p)</enum>
<header>Participation in Thrift Savings Plan</header>
<paragraph commented="no" display-inline="no-display-inline" id="IDF1333F23C44F4D08B816231C82976A8F">
<enum>(1)</enum>
<header>Election to contribute</header>
<subparagraph commented="no" display-inline="no-display-inline" id="ID4D38683BD0A64054B76BAA12A02FAA7C">
<enum>(A)</enum>
<header>In general</header>
<text display-inline="yes-display-inline">A magistrate judge of the
Tax Court who elects to receive an annuity under this section or under section
611 of the National Employee Savings and Trust Equity Guarantee Act of 2005 may
elect to contribute an amount of such individual’s basic pay to the Thrift
Savings Fund established by section 8437 of title 5, United States Code.</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID7FB3A9BAD14149E494462873A1E1928A">
<enum>(B)</enum>
<header>Period of election</header>
<text display-inline="yes-display-inline">An election may be made
under this paragraph only during a period provided under section 8432(b) of
title 5, United States Code, for individuals subject to chapter 84 of such
title.</text>
</subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID554732F29D8B4BF4A7119895BF1552F7">
<enum>(2)</enum>
<header>Applicability of title <enum-in-header>5</enum-in-header>
provisions</header>
<text display-inline="yes-display-inline">Except as otherwise
provided in this subsection, the provisions of subchapters III and VII of
chapter 84 of title 5, United States Code, shall apply with respect to a
magistrate judge who makes an election under paragraph (1).</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID435F8A99D77E4EBE83D4BF314444C1E1">
<enum>(3)</enum>
<header>Special rules</header>
<subparagraph commented="no" display-inline="no-display-inline" id="ID9DAB7E75B54340B5B2D028436219DC70">
<enum>(A)</enum>
<header>Amount contributed</header>
<text display-inline="yes-display-inline">The amount contributed by a
magistrate judge to the Thrift Savings Fund in any pay period shall not exceed
the maximum percentage of such judge’s basic pay for such pay period as
allowable under section 8440f of title 5, United States Code.</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="IDF754B26E2B7F48279254CDDEA478740B">
<enum>(B)</enum>
<header>Contributions for benefit of judge</header>
<text display-inline="yes-display-inline">No contributions may be
made for the benefit of a magistrate judge under section 8432(c) of title 5,
United States Code.</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID1D5B7B67B1EE403396BC6054F6322ED5">
<enum>(C)</enum>
<header>Applicability of Section
8433<enum-in-header>(b)</enum-in-header> of title
<enum-in-header>5</enum-in-header></header>
<text display-inline="yes-display-inline">Section 8433(b) of title 5,
United States Code, applies with respect to a magistrate judge who makes an
election under paragraph (1) and—</text>
<clause commented="no" display-inline="no-display-inline" id="IDF0B1656F81A440E9863CEB2B86042AE3">
<enum>(i)</enum>
<text display-inline="yes-display-inline">who retires entitled to an
immediate annuity under this section (including a disability annuity under
subsection (d) of this section) or section 611 of the National Employee Savings
and Trust Equity Guarantee Act of 2005,</text>
</clause><clause commented="no" display-inline="no-display-inline" id="ID4C92E1938888416C8A7716E7344FC5F3">
<enum>(ii)</enum>
<text display-inline="yes-display-inline">who retires before
attaining age 65 but is entitled, upon attaining age 65, to an annuity under
this section or section 611 of the National Employee Savings and Trust Equity
Guarantee Act of 2005, or</text>
</clause><clause commented="no" display-inline="no-display-inline" id="ID23699958493A48BCBD3167D2609B2919">
<enum>(iii)</enum>
<text display-inline="yes-display-inline">who retires before becoming
entitled to an immediate annuity, or an annuity upon attaining age 65, under
this section or section 611 of the National Employee Savings and Trust Equity
Guarantee Act of 2005.</text>
</clause></subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="IDD6FB7EFE8FE1447D9FE5F5B9BB0DE48B">
<enum>(D)</enum>
<header>Separation from service</header>
<text display-inline="yes-display-inline">With respect to a
magistrate judge to whom this subsection applies, retirement under this section
or section 611 of the National Employee Savings and Trust Equity Guarantee Act
of 2005 is a separation from service for purposes of subchapters III and VII of
chapter 84 of title 5, United States Code.</text>
</subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID0B6B1C4D485F44689F50B57F9724E6B1">
<enum>(4)</enum>
<header>Definitions</header>
<text display-inline="yes-display-inline">For purposes of this
subsection, the terms <term>retirement</term> and <term>retire</term> include
removal from office under section 7443A(a)(2) on the sole ground of mental or
physical disability.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDF12DFD2A660845A694CBB0391756709D">
<enum>(5)</enum>
<header>Offset</header>
<text display-inline="yes-display-inline">In the case of a magistrate
judge who receives a distribution from the Thrift Savings Fund and who later
receives an annuity under this section, that annuity shall be offset by an
amount equal to the amount which represents the Government’s contribution to
that person’s Thrift Savings Account, without regard to earnings attributable
to that amount. Where such an offset would exceed 50 percent of the annuity to
be received in the first year, the offset may be divided equally over the first
2 years in which that person receives the annuity.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDACE1E8A8E4A74B7EB54018BF0E4C7967">
<enum>(6)</enum>
<header>Exception</header>
<text display-inline="yes-display-inline">Notwithstanding clauses (i)
and (ii) of paragraph (3)(C), if any magistrate judge retires under
circumstances making such magistrate judge eligible to make an election under
subsection (b) of section 8433 of title 5, United States Code, and such
magistrate judge’s nonforfeitable account balance is less than an amount that
the Executive Director of the Office of Personnel Management prescribes by
regulation, the Executive Director shall pay the nonforfeitable account balance
to the participant in a single payment.</text>
</paragraph></subsection></section><after-quoted-block></after-quoted-block></quoted-block>
</subsection><subsection commented="no" display-inline="no-display-inline" id="IDA49B1667E68A4321A2FAB73411EA9E79">
<enum>(b)</enum>
<header>Conforming amendment</header>
<text display-inline="yes-display-inline">The table of sections for
part I of subchapter C of chapter 76 is amended by inserting after the item
relating to section 7443A the following new item:</text>
<quoted-block display-inline="no-display-inline" id="IDD8D1A74114F34C789C30E21CCF7429F1" style="USC">
<toc regeneration="no-regeneration">
<toc-entry bold="off" level="section">Sec. 7443B. Retirement for
magistrate judges of the Tax
Court.</toc-entry>
</toc>
<after-quoted-block>.</after-quoted-block></quoted-block>
</subsection></section><section commented="no" display-inline="no-display-inline" id="ID38936310C3284E24921FADD823F683ED" section-type="subsequent-section">
<enum>611.</enum>
<header>Incumbent Magistrate Judges of the Tax Court</header>
<subsection commented="no" display-inline="no-display-inline" id="ID8E13830EC64D415DAEA7087404139148">
<enum>(a)</enum>
<header>Retirement annuity under title
<enum-in-header>5</enum-in-header> and Section
<enum-in-header>7443B</enum-in-header> of the Internal Revenue Code of
1986</header>
<text display-inline="yes-display-inline">A magistrate judge of the
United States Tax Court in active service on the date of the enactment of this
Act shall, subject to subsection (b), be entitled, in lieu of the annuity
otherwise provided under the amendments made by this title, to—</text>
<paragraph commented="no" display-inline="no-display-inline" id="IDA53CEA8C707646F7A6DB201AFB49CBC0">
<enum>(1)</enum>
<text display-inline="yes-display-inline">an annuity under subchapter
III of chapter 83, or under chapter 84 (except for subchapters III and VII), of
title 5, United States Code, as the case may be, for creditable service before
the date on which service would begin to be credited for purposes of paragraph
(2), and</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID2B98D1063F3D469DAA7AAC10B6958E6D">
<enum>(2)</enum>
<text display-inline="yes-display-inline">an annuity calculated under
subsection (b) or (c) and subsection (g) of section 7443B of the Internal
Revenue Code of 1986, as added by this Act, for any service as a magistrate
judge of the United States Tax Court or special trial judge of the United
States Tax Court but only with respect to service as such a magistrate judge or
special trial judge after a date not earlier than 9<fraction>1/2</fraction>
years prior to the date of the enactment of this Act (as specified in the
election pursuant to subsection (b)) for which deductions and deposits are made
under subsections (j) and (k) of such section 7443B, as applicable, without
regard to the minimum number of years of service as such a magistrate judge of
the United States Tax Court, except that—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="ID52859D45A9B344C5AC999E2C7AE4E3D6">
<enum>(A)</enum>
<text display-inline="yes-display-inline">in the case of a magistrate
judge who retired with less than 8 years of service, the annuity under
subsection (c) of such section 7443B shall be equal to that proportion of the
salary being received at the time the magistrate judge leaves office which the
years of service bears to 14, subject to a reduction in accordance with
subsection (c) of such section 7443B if the magistrate judge is under age 65 at
the time he or she leaves office, and</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID70D64AD87DA64E3E99BDFB8EC44BCE9B">
<enum>(B)</enum>
<text display-inline="yes-display-inline">the aggregate amount of the
annuity initially payable on retirement under this subsection may not exceed
the rate of pay for the magistrate judge which is in effect on the day before
the retirement becomes effective.</text>
</subparagraph></paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="IDB7F31940A37C4060BEF3DC8B0A2DBFF4">
<enum>(b)</enum>
<header>Filing of notice of election</header>
<text display-inline="yes-display-inline">A magistrate judge of the
United States Tax Court shall be entitled to an annuity under this section only
if the magistrate judge files a notice of that election with the chief judge of
the United States Tax Court specifying the date on which service would begin to
be credited under section 7443B of the Internal Revenue Code of 1986, as added
by this Act, in lieu of chapter 83 or chapter 84 of title 5, United States
Code. Such notice shall be filed in accordance with such procedures as the
chief judge of the United States Tax Court shall prescribe.</text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="ID57EBBAF47ED04211B50363829B5D0FED">
<enum>(c)</enum>
<header>Lump-Sum credit under title
<enum-in-header>5</enum-in-header></header>
<text display-inline="yes-display-inline">A magistrate judge of the
United States Tax Court who makes an election under subsection (b) shall be
entitled to a lump-sum credit under section 8342 or 8424 of title 5, United
States Code, as the case may be, for any service which is covered under section
7443B of the Internal Revenue Code of 1986, as added by this Act, pursuant to
that election, and with respect to which any contributions were made by the
magistrate judge under the applicable provisions of title 5, United States
Code.</text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="ID7F332730868548B1998F5D19163A5778">
<enum>(d)</enum>
<header>Recall</header>
<text display-inline="yes-display-inline">With respect to any
magistrate judge of the United States Tax Court receiving an annuity under this
section who is recalled to serve under section 7443C of the Internal Revenue
Code of 1986, as added by this Act—</text>
<paragraph commented="no" display-inline="no-display-inline" id="ID5A6C44620F0F4307B98AC4A6F3E50CA1">
<enum>(1)</enum>
<text display-inline="yes-display-inline">the amount of compensation
which such recalled magistrate judge receives under such section 7443C shall be
calculated on the basis of the annuity received under this section, and</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDC92CB4BF71C447BA931C3ED42D92906E">
<enum>(2)</enum>
<text display-inline="yes-display-inline">such recalled magistrate
judge of the United States Tax Court may serve as a reemployed annuitant to the
extent otherwise permitted under title 5, United States Code.</text>
</paragraph><continuation-text commented="no" continuation-text-level="subsection">Section 7443B(m)(4) of the Internal
Revenue Code of 1986, as added by this Act, shall not apply with respect to
service as a reemployed annuitant described in paragraph (2).</continuation-text></subsection></section><section commented="no" display-inline="no-display-inline" id="IDE6A22BC8CE7D480DBD918A535B6D3F20" section-type="subsequent-section">
<enum>612.</enum>
<header>Provisions for recall</header>
<subsection commented="no" display-inline="no-display-inline" id="ID8E17130C8DCD4D36B96B681449D8B5A3">
<enum>(a)</enum>
<header>In general</header>
<text display-inline="yes-display-inline">Part I of subchapter C of
chapter 76, as amended by this Act, is amended by inserting after section 7443B
the following new section:</text>
<quoted-block display-inline="no-display-inline" id="ID6E0FF5B92A734BEFA9A5BBA9B11AA57C" style="OLC">
<section commented="no" display-inline="no-display-inline" id="IDD0309BFDCDF9460C9F56241C85242FDF" section-type="subsequent-section">
<enum>7443C.</enum>
<header>Recall of Magistrate Judges of the Tax Court</header>
<subsection commented="no" display-inline="no-display-inline" id="ID97EBE089DE5A420586183D8DE6672145">
<enum>(a)</enum>
<header>Recalling of retired magistrate judges</header>
<text display-inline="yes-display-inline">Any individual who has
retired pursuant to section 7443B or the applicable provisions of title 5,
United States Code, upon reaching the age and service requirements established
therein, may at or after retirement be called upon by the chief judge of the
Tax Court to perform such judicial duties with the Tax Court as may be
requested of such individual for any period or periods specified by the chief
judge; except that in the case of any such individual—</text>
<paragraph commented="no" display-inline="no-display-inline" id="IDAF3EA7749613468FA206371D197198BE">
<enum>(1)</enum>
<text display-inline="yes-display-inline">the aggregate of such
periods in any 1 calendar year shall not (without such individual’s consent)
exceed 90 calendar days, and</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDEC57BFBAF6794125976A581A6789CCCE">
<enum>(2)</enum>
<text display-inline="yes-display-inline">such individual shall be
relieved of performing such duties during any period in which illness or
disability precludes the performance of such duties.</text>
</paragraph><continuation-text commented="no" continuation-text-level="subsection">Any act, or failure to act, by an
individual performing judicial duties pursuant to this subsection shall have
the same force and effect as if it were the act (or failure to act) of a
magistrate judge of the Tax Court.</continuation-text></subsection><subsection commented="no" display-inline="no-display-inline" id="ID47581048658B4D5BB47E1991AE913181">
<enum>(b)</enum>
<header>Compensation</header>
<text display-inline="yes-display-inline">For the year in which a
period of recall occurs, the magistrate judge shall receive, in addition to the
annuity provided under the provisions of section 7443B or under the applicable
provisions of title 5, United States Code, an amount equal to the difference
between that annuity and the current salary of the office to which the
magistrate judge is recalled. The annuity of the magistrate judge who completes
that period of service, who is not recalled in a subsequent year, and who
retired under section 7443B, shall be equal to the salary in effect at the end
of the year in which the period of recall occurred for the office from which
such individual retired.</text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="IDCE5D97401036463FA5C790E0FD77B3A5">
<enum>(c)</enum>
<header>Rulemaking authority</header>
<text display-inline="yes-display-inline">The provisions of this
section may be implemented under such rules as may be promulgated by the Tax
Court.</text>
</subsection></section><after-quoted-block></after-quoted-block></quoted-block>
</subsection><subsection commented="no" display-inline="no-display-inline" id="ID30CA475876DA421BA72E16ED8E5F6209">
<enum>(b)</enum>
<header>Conforming amendment</header>
<text display-inline="yes-display-inline">The table of sections for
part I of subchapter C of chapter 76, as amended by this Act, is amended by
inserting after the item relating to section 7443B the following new
item:</text>
<quoted-block display-inline="no-display-inline" id="ID316D89D1A76B4B2EAE23607BEF763410" style="USC">
<toc regeneration="no-regeneration">
<toc-entry bold="off" level="section">Sec. 7443C. Recall of
magistrate judges of the Tax
Court.</toc-entry>
</toc>
<after-quoted-block>.</after-quoted-block></quoted-block>
</subsection></section><section commented="no" display-inline="no-display-inline" id="ID3417E109EAD84F36AB846E4C60A19E7F" section-type="subsequent-section">
<enum>613.</enum>
<header>Effective date</header>
<text display-inline="no-display-inline">Except as otherwise provided,
the amendments made by this title shall take effect on the date of the
enactment of this Act.</text>
</section>
<enum>VII</enum>
<header>Other provisions</header>
<section commented="no" display-inline="no-display-inline" id="ID1A2260414D7B4AE3B1E6162DF08FC0C9" section-type="subsequent-section">
<enum>701.</enum>
<header>Transfer of excess pension assets to multiemployer health
plan</header>
<subsection commented="no" display-inline="no-display-inline" id="ID37E2EE3F6F71403A9875F088BAD23E06">
<enum>(a)</enum>
<header>In general</header>
<text display-inline="yes-display-inline">Section 420(e) of the
Internal Revenue Code of 1986 (relating to definitions and special rules) is
amended by adding at the end the following new paragraph:</text>
<quoted-block display-inline="no-display-inline" id="IDAD0F70E35A174D93A99944A7B17879AA" style="OLC">
<paragraph commented="no" display-inline="no-display-inline" id="ID0452A1B748E743CDB768D192908AEB09">
<enum>(5)</enum>
<header>Application to multiemployer plan</header>
<text display-inline="yes-display-inline">In the case of any plan to
which section 404(c) applies (or any successor plan primarily covering
employees in the building and construction industry)—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="ID8B89E51C61BD4FEFA1855CD4B2700B08">
<enum>(A)</enum>
<text display-inline="yes-display-inline">the prohibition under
subsection (a) on the application of this section to a multiemployer plan shall
not apply, and</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="IDD92831641D6A45FEB0B30628AF21B32C">
<enum>(B)</enum>
<text display-inline="yes-display-inline">this section shall be
applied to any such plan—</text>
<clause commented="no" display-inline="no-display-inline" id="IDCFCDC263830947978BFC2CF004887F59">
<enum>(i)</enum>
<text display-inline="yes-display-inline">by treating any reference
in this section to an employer as a reference to all employers maintaining the
plan (or, if appropriate, the plan sponsor), and</text>
</clause><clause commented="no" display-inline="no-display-inline" id="IDA7BF087D526C4F73A1B5311FC937C53A">
<enum>(ii)</enum>
<text display-inline="yes-display-inline">in accordance with such
modifications of this section (and the provisions of this title and the
<act-name parsable-cite="ERISA">Employee Retirement Income Security Act of
1974</act-name> relating to this section) as the Secretary determines
appropriate to reflect the fact the plan is not maintained by a single
employer.</text>
</clause></subparagraph></paragraph><after-quoted-block></after-quoted-block></quoted-block>
</subsection><subsection commented="no" display-inline="no-display-inline" id="IDDCCE042B6B0E4ABF89C26B94D8EC5865">
<enum>(b)</enum>
<header>Amendments of ERISA</header>
<paragraph commented="no" display-inline="no-display-inline" id="ID25D241C8A63840F292AB3D3A0180A0A1">
<enum>(1)</enum>
<text display-inline="yes-display-inline">
<external-xref legal-doc="act" parsable-cite="ERISA/101(e)(3)">Section
101(e)(3)</external-xref> of the <act-name parsable-cite="ERISA">Employee
Retirement Income Security Act of 1974</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/29/1021(e)(3)">29 U.S.C.
1021(e)(3)</external-xref>) is amended by striking <quote>American Jobs
Creation Act of 2004</quote> and inserting <quote>National Employee Savings and
Trust Equity Guarantee Act of 2005</quote>.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID642220922B0449ECA3100377A5D16B56">
<enum>(2)</enum>
<text display-inline="yes-display-inline">Section 403(c)(1) of such Act
(<external-xref legal-doc="usc" parsable-cite="usc/29/1103(c)(1)">29 U.S.C.
1103(c)(1)</external-xref>) is amended by striking <quote>American Jobs
Creation Act of 2004</quote> and inserting <quote>National Employee Savings and
Trust Equity Guarantee Act of 2005</quote>.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID2A7D7A52FFE34596AC486EFF9C0996DA">
<enum>(3)</enum>
<text display-inline="yes-display-inline">Section 408(b)(13) of such
Act (<external-xref legal-doc="usc" parsable-cite="usc/29/1108(b)(13)">29
U.S.C. 1108(b)(13)</external-xref>) is amended by striking <quote>American Jobs
Creation Act of 2004</quote> and inserting <quote>National Employee Savings and
Trust Equity Guarantee Act of 2005</quote>.</text>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="ID2828529ABFAA440698B03B1F396EDB37">
<enum>(c)</enum>
<header>Effective date</header>
<text display-inline="yes-display-inline">The amendment made by this
section shall apply to transfers made in taxable years beginning after December
31, 2004.</text>
</subsection></section><section commented="no" display-inline="no-display-inline" id="ID89E7C9C164B84EA29C34487EF1CAA9F1" section-type="subsequent-section">
<enum>702.</enum>
<header>Transfer of excess funds from black lung disability trusts to
United Mine Workers of America Combined Benefit Fund</header>
<subsection commented="no" display-inline="no-display-inline" id="ID5E72EC6B1D48475F8292F6A21278F1B1">
<enum>(a)</enum>
<header>In general</header>
<text display-inline="yes-display-inline">So much of section
501(c)(21)(C) of the Internal Revenue Code of 1986 (relating to black lung
disability trusts) as precedes the last sentence is amended to read as
follows:</text>
<quoted-block display-inline="no-display-inline" id="ID0714DAABB1A149A58B3FF029E82751C6" style="OLC">
<subparagraph commented="no" display-inline="no-display-inline" id="ID855BD3B4047A4CC49B784999500CEF9C">
<enum>(C)</enum>
<text display-inline="yes-display-inline">Payments described in
subparagraph (A)(i)(IV) may be made from such trust during a taxable year only
to the extent that the aggregate amount of such payments during such taxable
year does not exceed the excess (if any), as of the close of the preceding
taxable year, of—</text>
<clause commented="no" display-inline="no-display-inline" id="ID0B2BD7B1F54D4AAA9F743F0C7521690F">
<enum>(i)</enum>
<text display-inline="yes-display-inline">the fair market value of
the assets of the trust, over</text>
</clause><clause commented="no" display-inline="no-display-inline" id="IDC7136212E0DC4C7C9CADC2E6FCFF3B72">
<enum>(ii)</enum>
<text display-inline="yes-display-inline">110 percent of the present
value of the liability described in subparagraph (A)(i)(I) of such
person.</text>
</clause></subparagraph><after-quoted-block></after-quoted-block></quoted-block>
</subsection><subsection commented="no" display-inline="no-display-inline" id="ID50E97D05928340FA85926A7D72A6A5EE">
<enum>(b)</enum>
<header>Transfer</header>
<text display-inline="yes-display-inline">Section 9705 of such Code
(relating to transfer) is amended by adding at the end the following new
subsection:</text>
<quoted-block display-inline="no-display-inline" id="IDD7D57842F75A48B1ABB0C2F6563A007B" style="OLC">
<subsection commented="no" display-inline="no-display-inline" id="ID0826CA6F3A85420AB459E1031A28C94B">
<enum>(c)</enum>
<header>Transfer from black lung disability trusts</header>
<paragraph commented="no" display-inline="no-display-inline" id="IDBA459532F6B14F09AAE1979A1B0CAED9">
<enum>(1)</enum>
<header>In general</header>
<text display-inline="yes-display-inline">The Secretary shall
transfer each fiscal year to the Fund from the general fund of the Treasury an
amount which the Secretary estimates to be the additional amounts received in
the Treasury for that fiscal year by reason of the amendment made by section
804(a) of the National Employee Savings and Trust Equity Guarantee Act of 2005.
The Secretary shall adjust the amount transferred for any year to the extent
necessary to correct errors in any estimate for any prior year.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID67F65664753E48A7B33B3216242E5167">
<enum>(2)</enum>
<header>Use of funds</header>
<text display-inline="yes-display-inline">Any amount transferred to
the Combined Fund under paragraph (1) shall be used to proportionately reduce
the unassigned beneficiary premium under section 9704(a)(3) of each assigned
operator for the plan year in which transferred.</text>
</paragraph></subsection><after-quoted-block></after-quoted-block></quoted-block>
</subsection><subsection commented="no" display-inline="no-display-inline" id="ID268DA9CBE48046C1BFF653CC576DB198">
<enum>(c)</enum>
<header>Effective date</header>
<text display-inline="yes-display-inline">The amendments made by this
section shall apply to taxable years beginning after December 31, 2002.</text>
</subsection></section><section commented="no" display-inline="no-display-inline" id="ID5C80A420F3D34F6FB405761A2EF84949" section-type="subsequent-section">
<enum>703.</enum>
<header>Treatment of death benefits from corporate-owned life
insurance</header>
<subsection commented="no" display-inline="no-display-inline" id="ID96EA445F04804B218AF8C28C906D2711">
<enum>(a)</enum>
<header>In general</header>
<text display-inline="yes-display-inline">Section 101 of the Internal
Revenue Code of 1986 (relating to certain death benefits) is amended by adding
at the end the following new subsection:</text>
<quoted-block display-inline="no-display-inline" id="ID7CFCF166EAAB47E4BEA1D6F10C85963C" style="OLC">
<subsection commented="no" display-inline="no-display-inline" id="IDB6629D9F51C74B26881287CA0B91CF6A">
<enum>(j)</enum>
<header>Treatment of certain Employer-Owned life insurance
contracts</header>
<paragraph commented="no" display-inline="no-display-inline" id="IDAF78113012C4430DB179A6FE267B98E8">
<enum>(1)</enum>
<header>General rule</header>
<text display-inline="yes-display-inline">In the case of an
employer-owned life insurance contract, the amount excluded from gross income
of an applicable policyholder by reason of paragraph (1) of subsection (a)
shall not exceed an amount equal to the sum of the premiums and other amounts
paid by the policyholder for the contract.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDA7412B64095B48C7919CB4FF415A4373">
<enum>(2)</enum>
<header>Exceptions</header>
<text display-inline="yes-display-inline">In the case of an
employer-owned life insurance contract with respect to which the notice and
consent requirements of paragraph (4) are met, paragraph (1) shall not apply to
any of the following:</text>
<subparagraph commented="no" display-inline="no-display-inline" id="ID443E9761900A4E43837834F9BB75DBD3">
<enum>(A)</enum>
<header>Exceptions based on insured’s status</header>
<text display-inline="yes-display-inline">Any amount received by
reason of the death of an insured who, with respect to an applicable
policyholder—</text>
<clause commented="no" display-inline="no-display-inline" id="ID04FA85CE20B54B248EA9751CE7787C51">
<enum>(i)</enum>
<text display-inline="yes-display-inline">was an employee at any time
during the 12-month period before the insured’s death, or</text>
</clause><clause commented="no" display-inline="no-display-inline" id="IDCE1A6A7D7A49457096D6DE0213D695FA">
<enum>(ii)</enum>
<text display-inline="yes-display-inline">is, at the time the
contract is issued—</text>
<subclause commented="no" display-inline="no-display-inline" id="ID29F0AB8F8ACF475684195F6F42539AF6">
<enum>(I)</enum>
<text display-inline="yes-display-inline">a director,</text>
</subclause><subclause commented="no" display-inline="no-display-inline" id="ID9D676B8A05DA4E829B493BB8849D98A5">
<enum>(II)</enum>
<text display-inline="yes-display-inline">a highly compensated
employee within the meaning of section 414(q) (without regard to paragraph
(1)(B)(ii) thereof), or</text>
</subclause><subclause commented="no" display-inline="no-display-inline" id="ID259473B3FECD42D389345F479D201ED0">
<enum>(III)</enum>
<text display-inline="yes-display-inline">a highly compensated
individual within the meaning of section 105(h)(5), except that <quote>35
percent</quote> shall be substituted for <quote>25 percent</quote> in
subparagraph (C) thereof.</text>
</subclause></clause></subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID61F4E5AEBC19444AA24738A8BEEBD755">
<enum>(B)</enum>
<header>Exception for amounts paid to insured’s heirs</header>
<text display-inline="yes-display-inline">Any amount received by
reason of the death of an insured to the extent—</text>
<clause commented="no" display-inline="no-display-inline" id="ID1E06E5ED423B406D8587A8F8D830A41A">
<enum>(i)</enum>
<text display-inline="yes-display-inline">the amount is paid to a
member of the family (within the meaning of section 267(c)(4)) of the insured,
any individual who is the designated beneficiary of the insured under the
contract (other than the applicable policyholder), a trust established for the
benefit of any such member of the family or designated beneficiary, or the
estate of the insured, or</text>
</clause><clause commented="no" display-inline="no-display-inline" id="ID00723E9BCCAB4EB184DF7009454D12DA">
<enum>(ii)</enum>
<text display-inline="yes-display-inline">the amount is used to
purchase an equity (or capital or profits) interest in the applicable
policyholder from any person described in clause (i).</text>
</clause></subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDA2C555B245C346D3819EEC5C6D243D6A">
<enum>(3)</enum>
<header>Employer-Owned life insurance contract</header>
<subparagraph commented="no" display-inline="no-display-inline" id="ID5EB0676AEC5949B6B62C879630E5AEA4">
<enum>(A)</enum>
<header>In general</header>
<text display-inline="yes-display-inline">For purposes of this
subsection, the term <term>employer-owned life insurance contract</term> means
a life insurance contract which—</text>
<clause commented="no" display-inline="no-display-inline" id="IDFBF19E9078FB413CAE09FE6C61A82357">
<enum>(i)</enum>
<text display-inline="yes-display-inline">is owned by a person
engaged in a trade or business and under which such person (or a related person
described in subparagraph (B)(ii)) is directly or indirectly a beneficiary
under the contract, and</text>
</clause><clause commented="no" display-inline="no-display-inline" id="ID5EB713E0CF7C4064B3538A94D014B91A">
<enum>(ii)</enum>
<text display-inline="yes-display-inline">covers the life of an
insured who is an employee with respect to the trade or business of the
applicable policyholder on the date the contract is issued.</text>
</clause><continuation-text commented="no" continuation-text-level="subparagraph">For purposes of the preceding
sentence, if coverage for each insured under a master contract is treated as a
separate contract for purposes of sections 817(h), 7702, and 7702A, coverage
for each such insured shall be treated as a separate contract.</continuation-text></subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID3990A77F3E5147EEB6E7B0DD375466C2">
<enum>(B)</enum>
<header>Applicable policyholder</header>
<text display-inline="yes-display-inline">For purposes of this
subsection—</text>
<clause commented="no" display-inline="no-display-inline" id="ID5275361C9FBD4DE3A8FB102D4A1ADE5E">
<enum>(i)</enum>
<header>In general</header>
<text display-inline="yes-display-inline">The term <term>applicable
policyholder</term> means, with respect to any employer-owned life insurance
contract, the person described in subparagraph (A)(i) which owns the
contract.</text>
</clause><clause commented="no" display-inline="no-display-inline" id="ID94654FA18EF948B6BA18DCD735EAF788">
<enum>(ii)</enum>
<header>Related persons</header>
<text display-inline="yes-display-inline">The term <term>applicable
policyholder</term> includes any person which—</text>
<subclause commented="no" display-inline="no-display-inline" id="ID067B9264201340C093E7EF70010FDEBE">
<enum>(I)</enum>
<text display-inline="yes-display-inline">bears a relationship to the
person described in clause (i) which is specified in section 267(b) or
707(b)(1), or</text>
</subclause><subclause commented="no" display-inline="no-display-inline" id="ID9FEC756FB6C1464489D1A4DC0FA3CEFB">
<enum>(II)</enum>
<text display-inline="yes-display-inline">is engaged in trades or
businesses with such person which are under common control (within the meaning
of subsection (a) or (b) of section 52).</text>
</subclause></clause></subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID120F216848EE40CC9680AD03A4BA9091">
<enum>(4)</enum>
<header>Notice and consent requirements</header>
<text display-inline="yes-display-inline">The notice and consent
requirements of this paragraph are met if, before the issuance of the contract,
the employee—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="IDE2216B54C818406CACF4A9B6BAECE7AC">
<enum>(A)</enum>
<text display-inline="yes-display-inline">is notified in writing that
the applicable policyholder intends to insure the employee’s life and the
maximum face amount for which the employee could be insured at the time the
contract was issued,</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID3A902B96A5934BA7B9F81CDF0650A56F">
<enum>(B)</enum>
<text display-inline="yes-display-inline">provides written consent to
being insured under the contract and that such coverage may continue after the
insured terminates employment, and</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID878CED33C4E944B5996B5A462FC851D1">
<enum>(C)</enum>
<text display-inline="yes-display-inline">is informed in writing that
an applicable policyholder will be a beneficiary of any proceeds payable upon
the death of the employee.</text>
</subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID21F37F79E8F443BDB5A9CF181CA2492B">
<enum>(5)</enum>
<header>Definitions</header>
<text display-inline="yes-display-inline">For purposes of this
subsection—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="ID8D0F2A230544451EAEFBF990F4569336">
<enum>(A)</enum>
<header>Employee</header>
<text display-inline="yes-display-inline">The term
<term>employee</term> includes an officer, director, and highly compensated
employee (within the meaning of section 414(q)).</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="IDAF62BDAF19B74FA59431172DA035DC20">
<enum>(B)</enum>
<header>Insured</header>
<text display-inline="yes-display-inline">The term
<term>insured</term> means, with respect to an employer-owned life insurance
contract, an individual covered by the contract who is a United States citizen
or resident. In the case of a contract covering the joint lives of 2
individuals, references to an insured include both of the individuals.</text>
</subparagraph></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection commented="no" display-inline="no-display-inline" id="ID199C445434A14EE5BBB3A75C5BF5DCA3">
<enum>(b)</enum>
<header>Reporting requirements</header>
<text display-inline="yes-display-inline">Subpart A of part III of
subchapter A of chapter 61 of the Internal Revenue Code of 1986 (relating to
information concerning persons subject to special provisions) is amended by
inserting after section 6039H the following new section:</text>
<quoted-block display-inline="no-display-inline" id="ID66B281CAA6CD48D7A1C6C30D4D18D3CA" style="OLC">
<section commented="no" display-inline="no-display-inline" id="IDABE9196EB7E24310AE089A8EDEF8B04E" section-type="subsequent-section">
<enum>6039I.</enum>
<header>Returns and records with respect to Employer-Owned life
insurance contracts</header>
<subsection commented="no" display-inline="no-display-inline" id="ID547D69E554F24F6EADB4A0BECB9A651F">
<enum>(a)</enum>
<header>In general</header>
<text display-inline="yes-display-inline">Every applicable
policyholder owning 1 or more employer-owned life insurance contracts issued
after the date of the enactment of this section shall file a return (at such
time and in such manner as the Secretary shall by regulations prescribe)
showing for each year such contracts are owned—</text>
<paragraph commented="no" display-inline="no-display-inline" id="ID3DBEC7D27A10469ABBC648D4296FAA69">
<enum>(1)</enum>
<text display-inline="yes-display-inline">the number of employees of
the applicable policyholder at the end of the year,</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDDF0577AF9D8A4B1A8FB96C9AACD14454">
<enum>(2)</enum>
<text display-inline="yes-display-inline">the number of such
employees insured under such contracts at the end of the year,</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID636CFAFFED9E4898967EC8A500981925">
<enum>(3)</enum>
<text display-inline="yes-display-inline">the total amount of
insurance in force at the end of the year under such contracts,</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDF244FC155D9842C49055EB72A6978647">
<enum>(4)</enum>
<text display-inline="yes-display-inline">the name, address, and
taxpayer identification number of the applicable policyholder and the type of
business in which the policyholder is engaged, and</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDE2C3B5A50A4E4B1896960A966C89BB05">
<enum>(5)</enum>
<text display-inline="yes-display-inline">that the applicable
policyholder has a valid consent for each insured employee (or, if all such
consents are not obtained, the number of insured employees for whom such
consent was not obtained).</text>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="IDCF2A0BA26809425789E26E4C869D4B72">
<enum>(b)</enum>
<header>Recordkeeping requirement</header>
<text display-inline="yes-display-inline">Each applicable
policyholder owning 1 or more employer-owned life insurance contracts during
any year shall keep such records as may be necessary for purposes of
determining whether the requirements of this section and section 101(j) are
met.</text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="IDE0F4F60C297740CAB804200B5F03C246">
<enum>(c)</enum>
<header>Definitions</header>
<text display-inline="yes-display-inline">Any term used in this
section which is used in section 101(j) shall have the same meaning given such
term by section 101(j).</text>
</subsection></section><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection commented="no" display-inline="no-display-inline" id="ID920802FFF21845DE8A1CE1946A527B4E">
<enum>(c)</enum>
<header>Conforming amendments</header>
<paragraph commented="no" display-inline="no-display-inline" id="ID19665CC6024E48EBBF53B6223B4CFA82">
<enum>(1)</enum>
<text display-inline="yes-display-inline">Paragraph (1) of section
101(a) of the Internal Revenue Code of 1986 is amended by striking <quote>and
subsection (f)</quote> and inserting <quote>subsection (f), and subsection
(j)</quote>.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="IDEE5A922BFD5647898B88B4A0BDBE137A">
<enum>(2)</enum>
<text display-inline="yes-display-inline">The table of sections for
subpart A of part III of subchapter A of chapter 61 of such Code is amended by
inserting after the item relating to section 6039H the following new
item:</text>
<quoted-block display-inline="no-display-inline" id="ID411CB8B309BE4F4184186C5B697471BD" style="USC">
<toc regeneration="no-regeneration">
<toc-entry bold="off" level="section">Sec. 6039I. Returns and records
with respect to employer-owned life insurance
contracts.</toc-entry>
</toc>
<after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="ID00BE7097B2C7487DA334DA972D762337">
<enum>(d)</enum>
<header>Effective date</header>
<text display-inline="yes-display-inline">The amendments made by this
section shall apply to life insurance contracts issued after the date of the
enactment of this Act, except for a contract issued after such date pursuant to
an exchange described in section 1035 of the Internal Revenue Code of 1986 for
a contract issued on or prior to that date. For purposes of the preceding
sentence, any material increase in the death benefit or other material change
shall cause the contract to be treated as a new contract except that, in the
case of a master contract (within the meaning of section 264(f)(4)(E) of such
Code), the addition of covered lives shall be treated as a new contract only
with respect to such additional covered lives.</text>
</subsection></section>