II 111th CONGRESS 1st Session S. 157 IN THE SENATE OF THE UNITED STATES January 6, 2009 Ms. Snowe (for herself and Mrs. Lincoln) introduced the following bill; which was read twice and referred to the Committee on Finance A BILL To amend the Internal Revenue Code of 1986 to expand the temporary waiver of required minimum distribution rules for certain retirement plans and accounts.

1.

Short title

This Act may be cited as the Retirement Account Distribution Improvement Act of 2009.

2.

Expansion of waiver of required minimum distribution rules from certain retirement plans and accounts

(a)

In general

Subparagraph (H) of section 401(a)(9) of the Internal Revenue Code of 1986, as added by the Worker, Retiree, and Employer Recovery Act of 2008, is amended— (1)by striking for calendar year 2009 in clause (i) and inserting for calendar years 2008, 2009 or 2010, (2)by striking 2009 in clause (ii)(I) and inserting 2010, and (3)by striking to calendar year 2009 in clause (ii)(II) and inserting to calendar years 2008, 2009, or 2010. (b)

Eligible rollover distributions

The last sentence of section 402(c)(4) of the Internal Revenue Code of 1986, as added by the Worker, Retiree, and Employer Recovery Act of 2008, is amended by striking 2009 and inserting 2008, 2009, or 2010. (c)

Effective dates

(1)

In general

The amendments made by this section shall apply to taxable years beginning after December 31, 2007. (2)

Recontributions of distributions in 2008 or early 2009

(A)

In general

If a person receives 1 or more eligible distributions, the person may, on or before July 1, 2009, make one or more contributions (in an aggregate amount not exceeding all eligible distributions) to an eligible retirement plan and to which a rollover contribution of such distribution could be made under section 402(c), 403(a)(4), 403(b)(8), 408(d)(3), or 457(e)(16) of the Internal Revenue Code of 1986, as the case may be. For purposes of the preceding sentence, rules similar to the rules of clauses (ii) and (iii) of section 402(c)(11)(A) of such Code shall apply in the case of a beneficiary who is not the surviving spouse of the employee or of the owner of the individual retirement plan. (B)

Eligible distribution

For purposes of this paragraph— (i)

In general

Except as provided in clause (ii), the term eligible distribution means an applicable distribution to a person from an individual account or annuity— (I)under a plan which is described in clause (iv), and (II)from which a distribution would, but for the application of section 401(a)(9)(H) of such Code, have been required to have been made to the individual for 2008 or 2009, whichever is applicable, in order to satisfy the requirements of sections 401(a)(9), 404(a)(2), 403(b)(10), 408(a)(6), 408(b)(3), and 457(d)(2) of such Code. (ii)

Eligible distributions limited to required distributions

The aggregate amount of applicable distributions which may be treated as eligible distributions for purposes of this paragraph shall not exceed— (I)for purposes of applying subparagraph (A) to distributions made in 2008, the amount which would, but for the application of section 401(a)(9)(H) of such Code, have been required to have been made to the individual in order to satisfy the requirements of sections 401(a)(9), 404(a)(2), 403(b)(10), 408(a)(6), 408(b)(3), and 457(d)(2) of such Code for 2008, and (II)for purposes of applying subparagraph (A) to distributions made in 2009, the sum of the amount which would, but for the application of such section 401(a)(9)(H), have been required to have been made to the individual in order to satisfy such requirements for 2009, plus the excess (if any) of the amount described in subclause (I) which may be distributed in 2009 to meet such requirements for 2008 over the portion of such amount taken into account under subclause (I) for distributions made in 2008. (iii)

Applicable distribution

(I)

In general

The term applicable distribution means a payment or distribution which is made during the period beginning on January 1, 2008, and ending on June 30, 2009. (II)

Exception for minimum required distributions for other years

Such term shall not include a payment or distribution which is required to be made in order to satisfy the requirements of section 401(a)(9), 404(a)(2), 403(b)(10), 408(a)(6), 408(b)(3), or 457(d)(2) of such Code for a calendar year other than 2008 or 2009. (III)

Exception for payments in a series

In the case of any plan described in clause (iv)(I), such term shall not include any payment or distribution made in 2009 which is a payment or distribution described in section 402(c)(4)(A). (iv)

Plans described

A plan is described in this clause if the plan is— (I)a defined contribution plan (within the meaning of section 414(i) of such Code) which is described in section 401, 403(a), or 403(b) of such Code or which is an eligible deferred compensation plan described in section 457(b) of such Code maintained by an eligible employer described in section 457(e)(1)(A)) of such Code, or (II)an individual retirement plan (as defined in section 7701(a)(37) of such Code). (C)

Treatment of repayments of distributions from eligible retirement plans other than IRAs

For purposes of the Internal Revenue Code of 1986, if a contribution is made pursuant to subparagraph (A) with respect to a payment or distribution from a plan other than an individual retirement plan, then the taxpayer shall, to the extent of the amount of the contribution, be treated as having received the payment or distribution in an eligible rollover distribution (as defined in section 402(c)(4) of such Code) and as having transferred the amount to the plan in a direct trustee to trustee transfer. (D)

Treatment of repayments for distributions from IRAs

For purposes of the Internal Revenue Code of 1986, if a contribution is made pursuant to subparagraph (A) with respect to a payment or distribution from an individual retirement plan (as defined by section 7701(a)(37) of such Code), then, to the extent of the amount of the contribution, such payments or distributions shall be treated as a distribution that satisfies subparagraphs (A) and (B) of section 408(d)(3) of such Code and as having been transferred to the individual retirement plan in a direct trustee to trustee transfer. (3)

Provisions relating to plan or contract amendments

(A)

In general

If this paragraph applies to any pension plan or contract amendment, such pension plan or contract shall be treated as being operated in accordance with the terms of the plan during the period described in subparagraph (B)(ii)(I). (B)

Amendments to which paragraph applies

(i)

In general

This paragraph shall apply to any amendment to any pension plan or annuity contract which— (I)is made by pursuant to the amendments made by this section, and (II)is made on or before the last day of the first plan year beginning on or after January 1, 2011. In the case of a governmental plan, subclause (II) shall be applied by substituting 2012 for 2011.(ii)

Conditions

This paragraph shall not apply to any amendment unless during the period beginning on January 1, 2009, and ending on December 31, 2010 (or, if earlier, the date the plan or contract amendment is adopted), the plan or contract is operated as if such plan or contract amendment were in effect.