[Congressional Bills 110th Congress]
[From the U.S. Government Publishing Office]
[S. 1725 Introduced in Senate (IS)]







110th CONGRESS
  1st Session
                                S. 1725

   To amend the Employee Retirement Income Security Act of 1974, the 
  Internal Revenue Code of 1986, and title 5, United States Code, to 
  improve the protection of pension benefits, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             June 28, 2007

  Mr. Harkin introduced the following bill; which was read twice and 
  referred to the Committee on Health, Education, Labor, and Pensions

_______________________________________________________________________

                                 A BILL


 
   To amend the Employee Retirement Income Security Act of 1974, the 
  Internal Revenue Code of 1986, and title 5, United States Code, to 
  improve the protection of pension benefits, and for other purposes.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Restoring Pension Promises to 
Workers Act''.

 TITLE I--AMENDMENTS TO THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 
               1974 AND THE INTERNAL REVENUE CODE OF 1986

SEC. 101. NO EXCLUSION FOR COMPENSATION UNDER NONQUALIFIED DEFERRED 
              COMPENSATION PLANS UNLESS EMPLOYER MAINTAINS QUALIFIED 
              EMPLOYER PLAN.

    (a) In General.--Paragraph (1) of section 409A(a) of the Internal 
Revenue Code of 1986 (relating to inclusion in gross income of deferred 
compensation under nonqualified deferred compensation plans) is amended 
by redesignating subparagraph (B) as subparagraph (C) and by inserting 
after subparagraph (A) the following new subparagraph:
                    ``(B) Gross income inclusion for employer 
                failures.--If at any time during a taxable year an 
                employer maintaining a nonqualified deferred 
                compensation plan fails to meet the requirements of 
                subsection (e), all compensation deferred under the 
                plan for the taxable year and all preceding taxable 
                years shall be includible in gross income for the 
                taxable year to the extent not subject to a substantial 
                risk of forfeiture and not previously included in gross 
                income.''.
    (b) Requirement To Maintain Qualified Employer Plan.--Section 409A 
of the Internal Revenue Code of 1986 (relating to inclusion in gross 
income of deferred compensation under nonqualified deferred 
compensation plans) is amended by redesignating subsection (e) as 
subsection (f) and by adding after subsection (d) the following new 
subsection:
    ``(e) Requirement That Employer Maintain Qualified Employer 
Plans.--
            ``(1) In general.--An employer meets the requirements of 
        this subsection only if, at all times during the taxable year, 
        the employer maintains 1 or more qualified employer plans which 
        are defined benefit plans and which meet--
                    ``(A) the participation requirements of paragraph 
                (2),
                    ``(B) the vesting requirements of paragraph (3), 
                and
                    ``(C) the minimum benefit requirements of paragraph 
                (4).
            ``(2) Participation requirements.--A qualified employer 
        plan shall meet the requirements of this paragraph if the plan 
        meets the requirements of section 410(b).
            ``(3) Vesting requirements.--A qualified employer plan 
        shall meet the requirements of this paragraph if the plan meets 
        the requirements of section 416(b)(1).
            ``(4) Minimum benefit requirements.--A qualified employer 
        plan shall meet the requirements of this paragraph if the plan 
        meets the requirements of section 416(c)(1), except that such 
        section shall be applied for purposes of this paragraph by 
        determining the applicable percentage under section 
        416(c)(1)(B)(i) (and without regard to section 
        416(c)(1)(B)(ii)).
            ``(5) Applicable rules.--The Secretary shall prescribe 
        rules for the application of sections 410(b), 416(b), and 
        416(c)(1) for purposes of this subsection. Such rules shall 
        provide--
                    ``(A) for such modifications to such sections are 
                necessary to apply such sections to a qualified 
                employer plan which is not a plan described in section 
                401(a) which includes a trust exempt from tax under 
                section 501(a), including for the exclusion of 
                employees from the application of section 410(b) in the 
                same manner as employees may be excluded under 
                paragraphs (3) and (4) of section 410(b), and
                    ``(B) for the application of section 416 to a 
                qualified employer plan which is not a top-heavy 
                plan.''.
    (c) Effective Date.--
            (1) In general.--The amendments made by this section shall 
        apply to taxable years beginning after December 31, 2007, 
        except that the amendments shall only apply to amounts deferred 
        after December 31, 2007 (and to earnings on such amounts).
            (2) Guidance relating to certain existing arrangements.--
        Not later than 60 days after the date of the enactment of this 
        Act, the Secretary of the Treasury shall issue guidance 
        providing a limited period during which a nonqualified deferred 
        compensation plan adopted before such date of enactment, may, 
        without violating the requirements of section 409A(a) of such 
        Code, be amended--
                    (A) to provide that a participant may, no later 
                than December 31, 2008--
                            (i) terminate participation in the plan, or
                            (ii) cancel or modify an outstanding 
                        deferral election with regard to all or a 
                        portion of amounts deferred after December 31, 
                        2007, to the extent necessary for the plan to 
                        meet the requirements of section 409A(a)(1)(B) 
                        of such Code (as added by the amendments made 
                        by this section),
                but only if amounts subject to the termination, 
                cancellation, or modification are, to the extent not 
                previously included in gross income, includible in 
                income of the participant when no longer subject to 
                substantial risk of forfeiture, and
                    (B) to conform to the requirements of section 
                409A(a)(1)(B) of such Code (as added by the amendments 
                made by this section) with regard to amounts deferred 
                after December 31, 2007.

SEC. 102. LIMITATIONS ON RECOVERY OF OVERPAYMENTS TO PARTICIPANTS AND 
              BENEFICIARIES.

    (a) In General.--Section 206 of the Employee Retirement Income 
Security Act of 1974 (29 U.S.C. 1056) is amended by adding at the end 
the following new subsection:
    ``(h) Special Rules Relating To Plan Recovery of Overpayment of 
Benefits.--
            ``(1) No recovery in cases of hardship or insignificant 
        amounts.--Each pension plan shall provide that the plan shall 
        not take any action to recover any applicable overpayment if 
        the recovery--
                    ``(A) would be against equity and good conscience 
                by reason of the hardship the recovery would impose on 
                the participant or beneficiary, or
                    ``(B) is of an amount that the plan's actuary 
                determines is actuarially insignificant.
        For purposes of subparagraph (B), if the error resulting in the 
        overpayment also resulted in overpayments to 1 or more other 
        participants or beneficiaries, the determination as to whether 
        any such overpayment is actuarially insignificant shall be made 
        by reference to the aggregate of all such overpayments rather 
        than each such overpayment.
            ``(2) Time limitation on recovery.--Each pension plan shall 
        provide that the plan shall not initiate any action to recover 
        any applicable overpayment if the plan did not initiate any 
        such action with respect to the overpayment during the 3-year 
        period beginning on the date the overpayment was made.
            ``(3) Notice requirement.--Any notice to a plan participant 
        or beneficiary with respect to an applicable overpayment shall 
        include notice of the participant's or beneficiary's rights to 
        appeal any administrative decision of the plan with respect to 
        the overpayment.
            ``(4) Satisfaction of fiduciary responsibility.--A 
        fiduciary of a plan shall not be treated as violating any 
        fiduciary responsibility under part 4 of this subtitle solely 
        by reason of a failure to recover any applicable overpayment in 
        accordance with the requirements of this subsection.
            ``(5) Applicable overpayment.--The term `applicable 
        overpayment' means any payment of benefits to a participant or 
        beneficiary in excess of the amount to which the participant or 
        beneficiary is entitled to under the plan which is not due to 
        the fault of the participant or beneficiary.''.
    (b) Effective Date.--
            (1) In general.--The amendment made by this section shall 
        apply to any overpayment of benefits made on or after the date 
        of the enactment of this Act.
            (2) Previous overpayments.--The amendment made by this 
        section shall apply to any overpayment of benefits made before 
        the date of the enactment of this Act if, on or before such 
        date, the plan has not initiated any action to recover such 
        overpayment.
            (3) Guidance.--Not later than 90 days after the date of the 
        enactment of this Act, the Secretary of Labor shall issue 
        guidance on the method or methods for determining whether an 
        overpayment is actuarially insignificant for purposes of 
        section 206(h)(1)(B) of the Employee Retirement Income Security 
        Act of 1974 (as added by this section).

SEC. 103. PROTECTION OF SUBSIDIZED EARLY RETIREMENT BENEFITS IN 
              CORPORATE MERGERS AND ACQUISITIONS.

    (a) Amendment to ERISA.--Section 208 of the Employee Retirement 
Income Security Act of 1974 (29 U.S.C. 1058) is amended by--
            (1) striking ``A pension plan'' and inserting ``(a) In 
        General.--A pension plan''; and
            (2) adding at the end the following:
    ``(b) Protection of Pro-Rata Share of Early Retirement Subsidy.--
If--
            ``(1) an employee, following the sale of a corporation or a 
        corporate division, liquidation, merger, consolidation, sale of 
        an interest in another corporation, partnership, or joint 
        venture, or other similar transaction, continues employment 
        with the employer that acquires all or part of the trade or 
        business in such transaction (referred to in this subsection as 
        the `successor employer'), and
            ``(2) the employee was a participant in a pension plan 
        maintained by the previous employer before such transaction,
        then, solely for the purpose of determining eligibility for any 
        subsidized early retirement benefit provided by such plan, 
        there shall be taken into account any periods of service with 
        the successor employer that would have been taken into account 
        had such transaction not occurred.''.
    (b) Amendment to the Internal Revenue Code.--Section 414(l) of the 
Internal Revenue Code of 1986 (relating to mergers and consolidations 
of plans) is amended by adding at the end the following:
            ``(3) Protection of pro-rata share of early retirement 
        subsidy.--If--
                    ``(A) an employee, following the sale of a 
                corporation or a corporate division, liquidation, 
                merger, consolidation, sale of an interest in another 
                corporation, partnership, or joint venture, or other 
                similar transaction, continues employment with the 
                employer that acquires all or part of the trade or 
                business in such transaction (referred to in this 
                paragraph as the `successor employer'), and
                    ``(B) the employee was a participant in a pension 
                plan maintained by the previous employer before such 
                transaction,
        then, solely for the purpose of determining eligibility for any 
        subsidized early retirement benefit provided by such plan, 
        there shall be taken into account any periods of service with 
        the successor employer that would have been taken into account 
        had such transaction not occurred.''.

SEC. 104. OFFICE OF PENSION PARTICIPANT ADVOCACY.

    (a) In General.--Title III of the Employee Retirement Income 
Security Act of 1974 (29 U.S.C. 1201 et seq.) is amended by adding at 
the end the following:

          ``Subtitle D--Office of Pension Participant Advocacy

``SEC. 3051. OFFICE OF PENSION PARTICIPANT ADVOCACY.

    ``(a) Establishment.--
            ``(1) In general.--There is established in the Department 
        of Labor an office to be known as the `Office of Pension 
        Participant Advocacy'.
            ``(2) Pension participant advocate.--The Office of Pension 
        Participant Advocacy shall be under the supervision and 
        direction of an official to be known as the `Pension 
        Participant Advocate' who shall--
                    ``(A) have demonstrated experience in the area of 
                pension participant assistance, and
                    ``(B) be selected by the Secretary after 
                consultation with pension participant advocacy 
                organizations.
        The Pension Participant Advocate shall report directly to the 
        Secretary and shall be entitled to compensation at the same 
        rate as the highest rate of basic pay established for the 
        Senior Executive Service under section 5382 of title 5, United 
        States Code.
    ``(b) Functions of Office.--It shall be the function of the Office 
of Pension Participant Advocacy to--
            ``(1) evaluate the efforts of the Federal Government, 
        business, and financial, professional, retiree, labor, women's, 
        and other appropriate organizations in assisting and protecting 
        pension plan participants, including--
                    ``(A) serving as a focal point for, and actively 
                seeking out, the receipt of information with respect to 
                the policies and activities of the Federal Government, 
                business, and such organizations which affect such 
                participants,
                    ``(B) identifying significant problems for pension 
                plan participants and the capabilities of the Federal 
                Government, business, and such organizations to address 
                such problems, and
                    ``(C) developing proposals for changes in such 
                policies and activities to correct such problems, and 
                communicating such changes to the appropriate 
                officials,
            ``(2) promote the expansion of pension plan coverage and 
        the receipt of promised benefits by increasing the awareness of 
        the general public of the value of pension plans and by 
        protecting the rights of pension plan participants, including--
                    ``(A) enlisting the cooperation of the public and 
                private sectors in disseminating information, and
                    ``(B) forming private-public partnerships and other 
                efforts to assist pension plan participants in 
                receiving their benefits,
            ``(3) advocate for the full attainment of the rights of 
        pension plan participants, including by making pension plan 
        sponsors and fiduciaries aware of their responsibilities,
            ``(4) give priority to the special needs of low and 
        moderate income participants, and
            ``(5) develop needed information with respect to pension 
        plans, including information on the types of existing pension 
        plans, levels of employer and employee contributions, vesting 
        status, accumulated benefits, benefits received, and forms of 
        benefits.
    ``(c) Reports.--
            ``(1) Annual report.--Not later than December 31 of each 
        calendar year, the Pension Participant Advocate shall report to 
        the Committees on Education and Labor and Ways and Means of the 
        House of Representatives and the Committees on Health, 
        Education, Labor, and Pensions and Finance of the Senate on its 
        activities during the fiscal year ending in the calendar year. 
        Such report shall--
                    ``(A) identify significant problems the Advocate 
                has identified,
                    ``(B) include specific legislative and regulatory 
                changes to address the problems, and
                    ``(C) identify any actions taken to correct 
                problems identified in any previous report.
        The Pension Participant Advocate shall submit a copy of such 
        report to the Secretary and any other appropriate official at 
        the same time it is submitted to the committees of Congress.
            ``(2) Specific reports.--The Pension Participant Advocate 
        shall report to the Secretary or any other appropriate official 
        any time the Advocate identifies a problem which may be 
        corrected by the Secretary or such official.
            ``(3) Reports to be submitted directly.--The report 
        required under paragraph (1) shall be provided directly to the 
        committees of Congress without any prior review or comment by 
        any person other than the Secretary or any other Federal 
        officer or employee.
    ``(d) Specific Powers.--
            ``(1) Receipt of information.--Subject to such 
        confidentiality requirements as may be appropriate, the 
        Secretary and other Federal officials shall, upon request, 
        provide such information (including plan documents) as may be 
        necessary to enable the Pension Participant Advocate to carry 
        out the Advocate's responsibilities under this section.
            ``(2) Appearances.--The Pension Participant Advocate may 
        represent the views and interests of pension plan participants 
        before any Federal agency, including, upon request of a 
        participant, in any proceeding involving the participant.
            ``(3) Contracting authority.--In carrying out 
        responsibilities under subsection (b)(5), the Pension 
        Participant Advocate may, in addition to any other authority 
        provided by law--
                    ``(A) contract with any person to acquire 
                statistical information with respect to pension plan 
                participants, and
                    ``(B) conduct direct surveys of pension plan 
                participants.''.
    (b) Conforming Amendment.--The table of contents for title III of 
such Act is amended by adding at the end the following:

          ``Subtitle D--Office of Pension Participant Advocacy

``3051. Office of Pension Participant Advocacy.''.
    (c) Effective Date.--The amendment made by this section shall take 
effect on January 1, 2009.

SEC. 105. PROSPECTIVE APPLICATION OF REQUIRED BENEFIT REDUCTIONS UNDER 
              PLANS IN CRITICAL STATUS.

    (a) In General.--
            (1) Amendment to erisa.--Clause (ii) of section 
        305(e)(8)(A) of the Employee Retirement Income Security Act of 
        1974 (29 U.S.C. 1085(e)(8)(A)(ii)) is amended by striking ``the 
        date on which the plan provides notice to the participant or 
        beneficiary under subsection (b)(3)(D) for the initial critical 
        year'' and inserting ``the effective date of the reduction 
        specified in the notice which the plan provides to the 
        participant or beneficiary under subparagraph (C)''.
            (2) Amendment to 1986 code.--Clause (ii) of section 
        432(e)(8)(A) of the Internal Revenue Code of 1986 is amended by 
        striking ``the date on which the plan provides notice to the 
        participant or beneficiary under subsection (b)(3)(D) for the 
        initial critical year'' and inserting ``the effective date of 
        the reduction specified in the notice which the plan provides 
        to the participant or beneficiary under subparagraph (C)''.
    (b) Notice Requirements.--
            (1) Amendment to erisa.--Subclause (II) of section 
        305(b)(3)(D)(ii) of the Employee Retirement Income Security Act 
        of 1974 (29 U.S.C. 1085(b)(3)(D)(ii)(II)) is amended by 
        striking ``the date such notice is provided for the first plan 
        year in which the plan is in critical status'' and inserting 
        ``the effective date of the reduction specified in the notice 
        which the plan provides to the participant or beneficiary under 
        subsection (e)(8)(C)''.
            (2) Amendment to 1986 code.--Subclause (II) of section 
        432(b)(3)(D)(ii) of the Internal Revenue Code of 1986 is 
        amended by striking ``the date such notice is provided for the 
        first plan year in which the plan is in critical status'' and 
        inserting ``the effective date of the reduction specified in 
        the notice which the plan provides to the participant or 
        beneficiary under subsection (e)(8)(C)''.
    (c) Effective Date.--The amendments made by this section shall take 
effect as if included in the amendments made by sections 202 and 212 of 
the Pension Protection Act of 2006 to which they relate.

       TITLE II--PROTECTION FOR THE SPOUSES OF FEDERAL EMPLOYEES

SEC. 201. SURVIVOR ANNUITIES FOR WIDOWS, WIDOWERS, AND FORMER SPOUSES 
              OF FEDERAL EMPLOYEES WHO DIE BEFORE ATTAINING AGE FOR 
              DEFERRED ANNUITY UNDER CIVIL SERVICE RETIREMENT SYSTEM.

    (a) Definition.--Section 8341(a) of title 5, United States Code, is 
amended--
            (1) in paragraph (1), by striking ``employee or Member'' 
        and inserting ``employee, Member, or annuitant, or of a former 
        employee or Member,''; and
            (2) in paragraph (2), by striking ``employee or Member'' 
        and inserting ``employee, Member, or annuitant, or of a former 
        employee or Member,''.
    (b) Benefits for Widow, Widower, or Former Spouse.--
            (1) In general.--Section 8341 of title 5, United States 
        Code, is amended by adding at the end the following:
    ``(l) If a former employee heretofore or hereafter separated from 
the service with title to deferred annuity from the Fund hereafter dies 
before having established a valid claim for annuity and is survived by 
a widow or widower to whom married at the date of separation, the widow 
or widower--
            ``(1) is entitled to an annuity equal to 55 percent of the 
        deferred annuity of the former employee commencing on the day 
        after the former employee dies and terminating on the last day 
        of the month before the widow or widower dies or remarries 
        before becoming 55 years of age; or
            ``(2) may elect to receive the lump-sum credit instead of 
        annuity if the widow or widower is the individual who would be 
        entitled to the lump-sum credit and files application therefor 
        with the Office before the award of the annuity.
Notwithstanding the preceding sentence, an annuity payable under this 
subsection to the widow or widower of a former employee may not exceed 
the difference between--
            ``(A) the annuity which would otherwise be payable to such 
        widow or widower under this subsection, and
            ``(B) the amount of the survivor annuity payable to any 
        former spouse of such former employee under subsection (h) of 
        this section.''.
            (2) Technical and conforming amendments.--Section 8339(j) 
        of title 5, United States Code, is amended--
                    (A) in paragraph (3)(A)(ii), by striking ``and 
                (h)'' and inserting ``(h), and (l)''; and
                    (B) in paragraph (4), by striking ``and (h)'' and 
                inserting ``(h), and (l)''.
    (c) Benefits for Former Spouse.--Section 8341(h) of title 5, United 
States Code, is amended--
            (1) in paragraph (1), by adding after the first sentence 
        ``Subject to paragraphs (2) through (5) of this subsection, a 
        former spouse of a former employee who dies after having 
        separated from the service with title to a deferred annuity 
        under section 8338(a) but before having established a valid 
        claim for annuity is entitled to a survivor annuity under this 
        subsection, if and to the extent expressly provided for in an 
        election under section 8339(j)(3) of this title, or in the 
        terms of any decree of divorce or annulment or any court order 
        or court-approved property settlement agreement incident to 
        such decree.''; and
            (2) in paragraph (2)--
                    (A) in subparagraph (A)(ii), by striking ``or 
                annuitant,'' and inserting ``annuitant, or former 
                employee''; and
                    (B) in subparagraph (B)--
                            (i) in clause (ii), by striking ``or'' at 
                        the end;
                            (ii) in clause (iii), by striking the 
                        period and inserting ``; or''; and
                            (iii) by adding at the end the following:
                            ``(iv) under subparagraph (A) of subsection 
                        (l) of this section in the case of a widow or 
                        widower, if the deceased was a former employee 
                        described in the first sentence of such 
                        subsection.''.
    (d) Protection of Survivor Benefit Rights.--Section 8339(j)(3) of 
title 5, United States Code, is amended by inserting at the end the 
following:
    ``The Office shall provide by regulation for the application of 
this subsection to the widow, widower, or surviving former spouse of a 
former employee who dies after having separated from the service with 
title to a deferred annuity under section 8338(a) but before having 
established a valid claim for annuity.''.
    (e) Effective Date.--The amendments made by this section shall take 
effect on the date of the enactment of this Act and shall apply only in 
the case of a former employee who dies on or after such date.

SEC. 202. COURT ORDERS RELATING TO FEDERAL RETIREMENT BENEFITS FOR 
              FORMER SPOUSES OF FEDERAL EMPLOYEES.

    (a) Civil Service Retirement System.--Section 8345(j) of title 5, 
United States Code, is amended--
            (1) by redesignating paragraph (3) as paragraph (4); and
            (2) by inserting after paragraph (2) the following:
    ``(3)(A) A court decree, court order, property settlement, or 
similar process referred to under paragraph (1)(A) shall be treated as 
meeting the requirements of that paragraph if it requires that payment 
of benefits be made to the former spouse of the employee, Member, or 
annuitant--
            ``(i) in the case of any payment before the employee, 
        Member, or annuitant has separated from service, on or after 
        the date on which the employee, Member, or annuitant attains 
        (or would have attained) the earliest retirement age,
            ``(ii) as if the employee, Member, or annuitant had retired 
        on the date on which such payment is to begin under such order 
        (but taking into account only the present value of the benefits 
        actually accrued and not taking into account the present value 
        of any employer subsidy for early retirement), and
            ``(iii) in any form in which such benefits may be paid 
        under this chapter to the employee, Member, or annuitant (other 
        than in the form of a joint and survivor annuity with respect 
        to the former spouse and his or her subsequent spouse).
For purposes of clause (ii), the interest rate assumption used in 
determining the present value shall be the interest rate specified 
under this chapter or, if no rate is specified, 5 percent.
    ``(B) In this paragraph, the term `earliest retirement age' means 
the earlier of--
            ``(i) the date on which the employee, Member, or annuitant 
        is entitled to a distribution under this chapter, or
            ``(ii) the later of--
                    ``(I) the date the employee, Member, or annuitant 
                attains age 50, or
                    ``(II) the earliest date on which the employee, 
                Member, or annuitant could begin receiving benefits 
                under this chapter if the employee, Member, or 
                annuitant separated from service.''.
    (b) Federal Employees Retirement System.--Section 8467 of title 5, 
United States Code, is amended--
            (1) by redesignating subsection (c) as subsection (d); and
            (2) by inserting after subsection (b) the following:
    ``(c)(1) A court decree, court order, property settlement, or 
similar process referred to under subsection (a)(1) shall be treated as 
meeting the requirements of that subsection if it requires that payment 
of benefits be made to the former spouse of the employee, Member, or 
annuitant--
            ``(A) in the case of any payment before the employee, 
        Member, or annuitant has separated from service, on or after 
        the date on which the employee, Member, or annuitant attains 
        (or would have attained) the earliest retirement age,
            ``(B) as if the employee, Member, or annuitant had retired 
        on the date on which such payment is to begin under such order 
        (but taking into account only the present value of the benefits 
        actually accrued and not taking into account the present value 
        of any employer subsidy for early retirement), and
            ``(C) in any form in which such benefits may be paid under 
        this chapter to the employee, Member, or annuitant (other than 
        in the form of a joint and survivor annuity with respect to the 
        alternate payee and his or her subsequent spouse).
For purposes of subparagraph (B), the interest rate assumption used in 
determining the present value shall be the interest rate specified 
under this chapter or, if no rate is specified, 5 percent.
    ``(2) In this subsection, the term `earliest retirement age' means 
the earlier of--
            ``(A) the date on which the employee, Member, or annuitant 
        is entitled to a distribution under this chapter, or
            ``(B) the later of--
                    ``(i) the date the employee, Member, or annuitant 
                attains age 50, or
                    ``(ii) the earliest date on which the employee, 
                Member, or annuitant could begin receiving benefits 
                under this chapter if the employee, Member, or 
                annuitant separated from service.''
    (c) Effective Date and Application.--The amendments made by this 
section shall take effect on the date of the enactment of this Act and 
apply to any court decree, court order, property settlement, or similar 
process issued or approved before, on, or after that date.

SEC. 203. ELIMINATION OF CERTAIN BARS TO ELIGIBILITY FOR SURVIVOR 
              ANNUITY.

    Section 4(b) of the Civil Service Spouse Equity Act of 1984 (5 
U.S.C. 8341 note) is amended--
            (1) in paragraph (1)(B)(i), by striking ``after September 
        14, 1978, and''; and
            (2) by striking paragraph (4).

SEC. 204. ORDER OF PRECEDENCE FOR DISPOSITION OF AMOUNTS REMAINING IN 
              THE THRIFT SAVINGS ACCOUNT OF A FEDERAL EMPLOYEE (OR 
              FORMER EMPLOYEE) WHO DIES BEFORE MAKING AN EFFECTIVE 
              ELECTION CONTROLLING SUCH DISPOSITION.

    (a) In General.--Section 8433(e) of title 5, United States Code, is 
amended--
            (1) by striking ``(e)'' and inserting ``(e)(1)'';
            (2) by striking all that follows ``paid'' and inserting 
        ``in accordance with paragraph (2).''; and
            (3) by adding at the end the following:
    ``(2)(A) An amount under paragraph (1) shall be paid in a manner 
consistent with the provisions of section 8424(d), except that, in 
applying the order of precedence under such provisions--
            ``(i) the widow or widower of the decedent shall be the 
        first party entitled to receive (instead of any designated 
        beneficiary); and
            ``(ii) if there is no widow or widower, the party next 
        entitled to receive shall be the beneficiary or beneficiaries 
        designated by the employee or Member (or former employee or 
        Member) in accordance with the procedures that would otherwise 
        normally apply, subject to such additional conditions as the 
        Executive Director shall by regulation prescribe based on 
        section 205(c)(2) of the Employee Retirement Income Security 
        Act of 1974 (29 U.S.C. 1055(c)(2)).
    ``(B) The order of precedence under subparagraph (A) shall not 
apply if the widow or widower consents in writing to the application of 
the order of precedence under section 8424(d).''
    (b) Effective Date.--The amendments made by this section shall take 
effect on the 90th day after the date of the enactment of this Act, and 
shall apply in the case of any individual who dies on or after such 
90th day.
                                 <all>