[Congressional Bills 111th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4126 Introduced in House (IH)]

111th CONGRESS
  1st Session
                                H. R. 4126

To amend the Internal Revenue Code of 1986 to prevent the overstatement 
of benefits payable to non-highly compensated employees under qualified 
                     plans, and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                           November 19, 2009

   Mr. Doggett (for himself, Mr. Stark, Mr. McDermott, Mr. Lewis of 
 Georgia, Mr. Pascrell, Ms. Linda T. Sanchez of California, Mr. Braley 
 of Iowa, Mr. Hinchey, Mr. Massa, Ms. Schakowsky, Mr. Welch, Mr. Gene 
 Green of Texas, Mr. DeFazio, Mr. McGovern, Mr. Tierney, Mr. Yarmuth, 
 and Mr. Blumenauer) introduced the following bill; which was referred 
                   to the Committee on Ways and Means

_______________________________________________________________________

                                 A BILL


 
To amend the Internal Revenue Code of 1986 to prevent the overstatement 
of benefits payable to non-highly compensated employees under qualified 
                     plans, 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 ``Retirement Fairness Act of 2009''.

SEC. 2. TREATMENT OF PART TIME EMPLOYEES IN DETERMINING MINIMUM 
              COVERAGE REQUIREMENTS.

    (a) In General.--Paragraph (6) of section 410(b) of the Internal 
Revenue Code of 1986 is amended by redesignating subparagraph (G) as 
subparagraph (H) and by inserting after subparagraph (F) the following 
new subparagraph:
                    ``(G) Part time and less than full year 
                employees.--For purposes of determining a number of 
                employees under this subsection, in the case of an 
                employee who has not completed 2,080 hours of service 
                for the year and is not a highly compensated employee, 
                such employee shall be counted as a fraction--
                            ``(i) the numerator of which is an amount 
                        equal to the number of hours of service of the 
                        employee during the year, over
                            ``(ii) 2,080.''.
    (b) Effective Date.--The amendments made by this section shall 
apply to plan years beginning after the date of the enactment of this 
Act.

SEC. 3. MODIFICATION OF RULES RELATING TO NONDISCRIMINATION 
              REQUIREMENTS.

    (a) In General.--
            (1) Only vested contributions or benefits taken into 
        account.--Paragraph (5) of section 401(a) of the Internal 
        Revenue Code of 1986 is amended by adding at the end the 
        following new subparagraph:
                    ``(H) Benefits and contributions taken into 
                account.--Subparagraph (B) and paragraph (4) shall be 
                applied by taking into account--
                            ``(i) all contributions and benefits of 
                        highly compensated employees under the plan, 
                        and
                            ``(ii) all nonforfeitable contributions and 
                        benefits of employees who are not highly 
                        compensated employees under the plan.''.
            (2) Elimination of cross-testing.--Paragraph (5) of section 
        401(a) of such Code, as amended by this Act, is amended by 
        adding at the following new subparagraphs:
                    ``(I) Elimination of cross testing.--For purposes 
                of this paragraph and paragraph (4)--
                            ``(i) In general.--The nondiscrimination 
                        requirements of paragraph (4)--
                                    ``(I) in the case of a defined 
                                contribution plan, may only be 
                                satisfied based on contributions to 
                                such plan, and
                                    ``(II) in the case of a defined 
                                benefit plan, may only be satisfied 
                                based on benefits provided under the 
                                plan.
                            ``(ii) Special rule for cash balance 
                        plans.--Notwithstanding clause (i)(II), accrued 
                        benefits calculated as the balance of a 
                        hypothetical account (or substantially similar 
                        accruals) under an applicable defined benefit 
                        plan (as defined in section 411(a)(13)(C)) 
                        shall be treated as contributions.
                    ``(J) Regulations.--The Secretary may prescribe 
                regulations that allow, in such circumstances as the 
                Secretary determines appropriate, a defined 
                contribution plan, or an applicable defined benefit 
                plan (as defined in section 411(a)(13)(C)), to satisfy 
                the nondiscrimination requirements of paragraph (4) 
                based on benefits, rather than only based on 
                contributions. Any such regulations shall provide that, 
                in all such circumstances, the allocation formula under 
                the defined contribution plan (or the benefit formula 
                in the case of an applicable defined benefit plan) must 
                be reasonably designed to fund or provide an 
                accumulated benefit for each participant, when 
                expressed as an annual benefit commencing at normal 
                retirement age, that as of any date would not be less 
                than the accumulated benefit of any similarly situated 
                younger participant when so expressed.''.
    (b) Effective Date.--The amendments made by this section shall 
apply to plan years beginning after the date of the enactment of this 
Act.
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