1.Short title; reference; table
of contents
(a)This Act may be cited
as the Retirement Plan Simplification
and Enhancement Act of 2012
.
(b)Except as otherwise expressly provided, whenever in
this Act 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.
(c)The table of
contents of this Act is as follows:
Sec. 1. Short title; reference; table of contents.
Title I—Expanding Coverage and Increasing Retirement
Savings
Sec. 101. Modification of Automatic Enrollment Safe
Harbor.
Sec. 102. Qualified cash or deferred arrangements must allow
long-term employees working more than 500 but less than 1,000 hours per year to
participate.
Sec. 103. Separate application of top heavy rules to defined
contribution plans covering part-time employees.
Title II—Encouraging Small Businesses to Enter and Remain in the
Employer Retirement Plan System
Sec. 201. Enhancement of credit for small employer pension plan
startup costs.
Sec. 202. Eliminating barriers to use of multiple employer
plans.
Title III—Preservation of Income
Sec. 301. Study of application of spousal consent rules to
defined contribution plans.
Sec. 302. Administration of joint and survivor annuity
requirements.
Sec. 303. Availability of distribution options.
Sec. 304. Rollover of insurance contracts to IRAs.
Sec. 305. Portability of lifetime income options.
Title IV—Simplification and Clarification of Qualified Retirement
Plan Rules
Sec. 401. Exception from required distributions where aggregate
retirement savings do not exceed $100,000.
Sec. 402. Alternative methods for electronic
disclosure.
Sec. 403. Expansion of Employee Plans Compliance Resolution
System.
Sec. 404. Use of forfeitures to fund safe harbor
contributions.
Sec. 405. Substantial cessation of operations.
Sec. 406. Church plan clarification.
Sec. 407. Protecting older, longer service
participants.
Sec. 408. Review and report to the Congress relating to
reporting and disclosure requirements.
Sec. 409. Consolidation of defined contribution plan
notices.
<enum>I</enum><header>Expanding Coverage
and Increasing Retirement Savings</header>
<section id="HA40A873FD5CC4A80949501B7BCCBCC4C"><enum>101.</enum><header>Modification of
Automatic Enrollment Safe Harbor</header>
<subsection id="H850B1F634CC745B1A84F1A3000E67BBF"><enum>(a)</enum><header>In
general</header>
<paragraph id="HC0C5ED28431942959613238A547DA0A4"><enum>(1)</enum><header>Removal of 10
percent cap</header><text display-inline="yes-display-inline">Clause (iii) of
section 401(k)(13)(C) is amended by striking <quote>, does not exceed 10
percent, and is at least</quote> and inserting <quote>and is</quote>.</text>
</paragraph><paragraph id="HD22A34FFC78D46B5BE2111AC9F3AFD32"><enum>(2)</enum><header>Conforming
amendments</header>
<subparagraph id="H9BDDFA4AD8114DBEB09C707017C314C8"><enum>(A)</enum><text>Subclause (I) of
section 401(k)(13)(C)(iii) is amended by striking <quote>3 percent</quote> and
inserting <quote>at least 3 percent, but not greater than 10
percent,</quote>.</text>
</subparagraph><subparagraph id="H708D8A385FE7413CAEA86ADA481A5057"><enum>(B)</enum><text>Subclause (II) of
section 401(k)(13)(C)(iii) is amended by striking <quote>4 percent</quote> and
inserting <quote>at least 4 percent</quote>.</text>
</subparagraph><subparagraph id="H839325B93A8A445FB208625C486A3E3B"><enum>(C)</enum><text>Subclause (III) of
section 401(k)(13)(C)(iii) is amended by striking <quote>5 percent</quote> and
inserting <quote>at least 5 percent</quote>.</text>
</subparagraph><subparagraph id="H910FC20FB7A0449383C605C3865358C3"><enum>(D)</enum><text>Subclause (IV) of
section 401(k)(13)(C)(iii) is amended by striking <quote>6 percent</quote> and
inserting <quote>at least 6 percent</quote>.</text>
</subparagraph></paragraph></subsection><subsection id="H5F90AF6A3BBC43DE837371B966DE2DCB"><enum>(b)</enum><header>Regulations</header><text>Subparagraph
(C) of section 401(k)(13) is amended by adding at the end thereof the following
new clause:</text>
<quoted-block id="H53EB5C6431164058A7250411A32B5BF5" style="OLC">
<clause id="H886E5FB45660475CA1D3A09EE3EE5D72"><enum>(v)</enum><header>Regulations</header>
<subclause id="H2BDDCB67F958480C9746020B11426745"><enum>(I)</enum><header>In
general</header><text>The Secretary may prescribe regulations that increase the
percentages referenced in subclauses (I)–(IV) of clause (iii), except that no
percentage may be increased by more than 8 percentage points and each such
percentage may be increased by the same or different amounts or not increased.
In determining whether and how to exercise this authority, the Secretary may
consider all relevant factors, including—</text>
<item id="HD3913A26CD094BF1A5E98140AD0D81C6"><enum>(aa)</enum><text>the
extent to which such increases would directly result in more retirement savings
by participants in arrangements described in this paragraph, resulting in
higher level of retirement income for participants,</text>
</item><item id="H90335C11820B480180102F14FAE52B5D"><enum>(bb)</enum><text>the
extent to which such increases would result in more retirement savings by
reason of communicating to employers and employees the importance of saving
more than the percentages referenced in such subclauses (without regard to this
clause),</text>
</item><item id="HADA7ED01D4FB4A14B6D7A9AB2E71C320"><enum>(cc)</enum><text>the
extent to which increases that are too large could result in fewer employers
adopting arrangements described in this paragraph for any reason, including the
possible increase in employer cost due to increased matching
contributions,</text>
</item><item id="HB85839AE5CAA449B8A7E6E04297688E1"><enum>(dd)</enum><text>the
extent to which increases that are too large could result in more employees
making elections described in clause (ii)(I), and</text>
</item><item id="H26312C87577E4D4F8D93C031380B17A6"><enum>(ee)</enum><text>the
extent to which any such increases would increase administrative burdens and
complexity, and how the increases can be structured to minimize such burdens
and complexity.</text>
</item></subclause><subclause id="H15BBBBE7463848969235FC964A199C05"><enum>(II)</enum><header>Clarifications</header><text>Any
such regulation shall clarify that—</text>
<item id="H14585A7F67F742DF947ACD2054B89B80"><enum>(aa)</enum><text>the
percentages referenced in subclauses (I) through (IV) of clause (iii) are
minimums,</text>
</item><item id="H91AA17A729F6457EA104B6582B863D7F"><enum>(bb)</enum><text>with respect to
an arrangement, one or more of such percentages may be set at higher levels,
except as provided in clause (iii)(I), and</text>
</item><item id="H1A1623927CE84258A703002138191A11"><enum>(cc)</enum><text>there need not be
a uniform disparity between such higher levels and the levels referenced in
subclauses (I)–(IV) of clause
(iii).</text>
</item></subclause></clause><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="H4CD5E8BD015B4347B5A3F998B0200349"><enum>(c)</enum><header>Effective
dates</header>
<paragraph id="H069B62A6F8ED4A5394348C0AC2E0AB25"><enum>(1)</enum><header>Subsection
<enum-in-header>(a)</enum-in-header></header><text>The amendments made by
subsection (a) shall apply to plan years beginning after the date of the
enactment of this Act.</text>
</paragraph><paragraph id="H03052484130347AB980AB9CDF6AB28B2"><enum>(2)</enum><header>Subsection
<enum-in-header>(b)</enum-in-header></header><text>Any regulations prescribed
pursuant to the amendment made by subsection (b) shall apply to arrangements
first established for plan years beginning at least six months after
publication of such regulations, or for such later plan years determined under
such regulations.</text>
</paragraph></subsection></section><section id="HA1445B274BBF47ABAC637542375F4966"><enum>102.</enum><header>Qualified cash
or deferred arrangements must allow long-term employees working more than 500
but less than 1,000 hours per year to participate</header>
<subsection id="HAA95D85C09D14B14B8C99BF0A8C033D6"><enum>(a)</enum><header>Participation
requirement</header>
<paragraph id="H97CE524974324558933A886F27CEE67F"><enum>(1)</enum><header>In
general</header><text>Subparagraph (D) of section 401(k)(2) (defining qualified
cash or deferred arrangement) is amended to read as follows:</text>
<quoted-block id="H75909440FC024266A3E034B0D42B85D8" style="OLC">
<subparagraph id="H7E9C52A9BA09473498DFE56CDF4A159D"><enum>(D)</enum><text>which does not
require, as a condition of participation in the arrangement, that an employee
complete a period of service with the employer (or employers) maintaining the
plan extending beyond the close of the earlier of—</text>
<clause id="HE9383AFE4D2D4951811CAA70C294F663"><enum>(i)</enum><text>the period
permitted under section 410(a)(1) (determined without regard to subparagraph
(B)(i) thereof), or</text>
</clause><clause id="H0DBD7D120C334326A034A46EDE6B422B"><enum>(ii)</enum><text>subject to the
provisions of paragraph (14), the first period of 3 consecutive 12-month
periods during each of which the employee has at least 500 hours of
service.</text>
</clause></subparagraph><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph><paragraph id="H95A37806937C49CAA96435D3ED6D8BC4"><enum>(2)</enum><header>Special
rules</header><text>Section 401(k) (relating to cash or deferred arrangements),
as amended by section 902 of the Pension Protection Act of 2006, is amended by
adding at the end the following new paragraph:</text>
<quoted-block id="HD76F073CD7C44CEE858F141329D21CF0" style="OLC">
<paragraph id="HED2E7DA55D1647BCAAACEB875E1FC8EA"><enum>(14)</enum><header>Special rules
for participation requirement for long-term, part-time
workers</header><text>For purposes of paragraph (2)(D)(ii)—</text>
<subparagraph id="HFDDAE6AD53424D2DB620BC5E18015077"><enum>(A)</enum><header>Age requirement
must be met</header><text>Paragraph (2)(D)(ii) shall not apply to an employee
unless the employee has met the requirement of section 410(a)(1)(A)(i) by the
close of the last of the 12-month periods described in such paragraph.</text>
</subparagraph><subparagraph id="H004C3F60A2B84D34A09862313F7CC3FF"><enum>(B)</enum><header>Nondiscrimination
and top-heavy rules not to apply</header>
<clause id="H75039962F54E486E8A9072F96C3D4417"><enum>(i)</enum><header>Nondiscrimination
rules</header><text>In the case of employees who are eligible to participate in
the arrangement solely by reason of paragraph (2)(D)(ii)—</text>
<subclause id="HA37EF2B960B1435CA1DA5A6DD36D8FC9"><enum>(I)</enum><text>notwithstanding
subsection (a)(4), an employer shall not be required to make nonelective or
matching contributions on behalf of such employees even if such contributions
are made on behalf of other employees eligible to participate in the
arrangement, and</text>
</subclause><subclause id="H13BB6B610BAC43C9AC265F51B6C1F5CF"><enum>(II)</enum><text display-inline="yes-display-inline">an employer may elect to exclude such
employees from the application of subsection (a)(4), paragraph (3), subsection
(m)(2), and section 410(b).</text>
</subclause></clause><clause id="HDF9A4C619D5B42F78750DC903C6ECAA3"><enum>(ii)</enum><header>Top-heavy
rules</header><text>An employer may elect to exclude all employees who are
eligible to participate in a plan maintained by the employer solely by reason
of paragraph (2)(D)(ii) from the application of the vesting and benefit
requirements under subsections (b) and (c) of section 416.</text>
</clause><clause id="HEE0B73CF740D422891CA473C37185F49"><enum>(iii)</enum><header>Vesting</header><text>For
purposes of determining whether an employee described in clause (i) has a
nonforfeitable right to employer contributions (other than contributions
described in paragraph (3)(D)(i)) under the arrangement, each 12-month period
for which the employee has at least 500 hours of service shall be treated as a
year of service.</text>
</clause><clause id="HD18E486AC36F4C4A93EA7B5BDC05F384"><enum>(iv)</enum><header>Employees who
become full-time employees</header><text>This subparagraph shall cease to apply
to any employee as of the first plan year beginning after the plan year in
which the employee meets the requirements of section 410(a)(1)(A)(ii) without
regard to paragraph (2)(D)(ii).</text>
</clause></subparagraph><subparagraph id="HB257D79F7DA54C6D97A677F0E33CA376"><enum>(C)</enum><header>Exception for
employees under collectively bargained plans, etc</header><text>Paragraph
(2)(D)(ii) shall not apply to employees described in section 410(b)(3).</text>
</subparagraph><subparagraph id="H05E5D83AB9F94076BC17B3ABE068C09A"><enum>(D)</enum><header>Special
rules</header>
<clause id="H85BB24CA1438414FACC675F113C7F1A1"><enum>(i)</enum><header>Time of
participation</header><text>The rules of section 410(a)(4) shall apply to an
employee eligible to participate in an arrangement solely by reason of
paragraph (2)(D)(ii).</text>
</clause><clause id="H08CDD77C3D4B4E86ADCD9B5A1EBA663E"><enum>(ii)</enum><header>12-month
periods</header><text>12-month periods shall be determined in the same manner
as under the last sentence of section
410(a)(3)(A).</text>
</clause></subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph></subsection><subsection id="HD3416C7FD52A4EA087AB78C3F0395942"><enum>(b)</enum><header>Effective
date</header><text>The amendments made by this section shall apply to plan
years beginning after December 31, 2012, except that, for purposes of section
401(k)(2)(D)(ii) of the Internal Revenue Code of 1986 (as added by such
amendments), 12-month periods beginning before January 1, 2013, shall not be
taken into account.</text>
</subsection></section><section commented="no" id="HAB0E9BC287BC4ED58AA112342BEC5770"><enum>103.</enum><header>Separate
application of top heavy rules to defined contribution plans covering part-time
employees</header>
<subsection commented="no" id="H4EAD9A70C11E4209A04B4B6A3AC8E4CC"><enum>(a)</enum><header>In
general</header><text>Paragraph (2) of section 416(c) is amended by adding at
the end the following:</text>
<quoted-block display-inline="no-display-inline" id="H902FEBD21E084823B6C4C05440306735" style="OLC">
<subparagraph commented="no" id="H1DC365F8099D4BB69424F7AE87653BCA"><enum>(C)</enum><header>Separate
application to employees not meeting age and service requirements</header><text display-inline="yes-display-inline">If employees not meeting the age or service
requirements of section 410(a)(1) (without regard to subparagraph (B) thereof)
are covered under a plan of the employer which meets the requirements of
paragraphs (A) and (B) separately with respect to such employees, such
employees may be excluded from consideration in determining whether any plan of
the employer meets the requirements of subparagraphs (A) and
(B).</text>
</subparagraph><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection commented="no" id="HF036C03D6230472897CACDAE914D80CD"><enum>(b)</enum><header>Effective
date</header><text>The amendment made by subsection (a) shall apply to plan
years beginning after the date of the enactment of this Act.</text>
</subsection></section><enum>II</enum><header>Encouraging Small
Businesses to Enter and Remain in the Employer Retirement Plan System</header>
<section id="H04B39EDBB6FD4B5787BA864017E5C82C"><enum>201.</enum><header>Enhancement of
credit for small employer pension plan startup costs</header>
<subsection commented="no" id="H52FF5EA890674D52AF8878F0850A1521"><enum>(a)</enum><header>In
general</header><text>Section 45E(b)(1) is amended by striking
<quote>$500</quote> and inserting <quote>$1,500</quote>.</text>
</subsection><subsection commented="no" id="H84FBF770D029474A901D7DBE8ECDD61A"><enum>(b)</enum><header>Effective
date</header><text>The amendment made by subsection (a) shall apply to taxable
years beginning after December 31, 2012.</text>
</subsection></section><section commented="no" id="HBF0DD24B2B284A93AEA96E7F6AAEEEC3"><enum>202.</enum><header>Eliminating
barriers to use of multiple employer plans</header><text display-inline="no-display-inline">By December 31, 2012, the Secretaries of the
Treasury and Labor shall—</text>
<paragraph id="HFB602797B3D648A2B4F9C1A556EBBA21"><enum>(1)</enum><text display-inline="yes-display-inline">prescribe administrative guidance
establishing conditions under which an employer participating in a plan
described in section 413(c) of the Internal Revenue Code of 1986 shall not have
any liability under title I of the Employee Retirement Income Security Act of
1974 with respect to the acts or omissions of one or more other participating
employers, which regulations may require that the portion of the plan
attributable to such participating employers be spun off to plans maintained by
such employers,</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="HAAB5BA3F582A4FA0895BBC9A811A7941"><enum>(2)</enum><text display-inline="yes-display-inline">prescribe administrative guidance
establishing conditions under which a plan described in section 413(c) of such
Code may be treated as satisfying the qualification requirements of sections
401(a) and 413(c) of such Code despite the violation of such requirements by
one or more participating employers, including requiring, if appropriate, that
the portion of the plan attributable to such participating employers be spun
off to plans maintained by such employers, and</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="HF5F4D2CBD5264616B37A7B5183E14EAD"><enum>(3)</enum><text display-inline="yes-display-inline">prescribe administrative guidance providing
simplified means by which plans described in section 413(c) of such Code may
satisfy the requirements of section 103 of the Employee Retirement Income
Security Act of 1974.</text>
</paragraph></section><enum>III</enum><header>Preservation of
Income</header>
<section id="H6C591541ED614E62882BD00CAC2CC1E1"><enum>301.</enum><header>Study of
application of spousal consent rules to defined contribution plans</header>
<subsection id="HF3A2C27A9BC74D519A62EFE1612BF288"><enum>(a)</enum><header>Study</header><text>The
Government Accountability Office shall conduct a study of the feasibility and
desirability of extending the application of the requirements of section 205 of
the Employee Retirement Income Security Act of 1974 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 any modifications of such
requirements that are necessary to apply such requirements to such
plans.</text>
</subsection><subsection id="HC47A8D3C795F4FFC87434BCC70FD7CA7"><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 Government Accountability Office shall report the
results of the study, together with any recommendations for legislative
changes, to the Committees on Finance and Health, Education, Labor, and
Pensions of the Senate and the Committees on Ways and Means and Education and
the Workforce of the House of Representatives.</text>
</subsection></section><section id="HF14BA7E456A441D086900C0CC892FFFE" section-type="subsequent-section"><enum>302.</enum><header>Administration of
joint and survivor annuity requirements</header>
<subsection id="HCDF0830977AF4F03B6B8CE4F70F23856"><enum>(a)</enum><header>Amendments to
the Employee Retirement Income Security Act of 1974</header>
<paragraph id="H727D2EF87587487AAD5B8FC1EA368F2C"><enum>(1)</enum><header>In
general</header><text>Section 402(c) of the Employee Retirement Income Security
Act of 1974 (29 U.S.C. 1102(c)) is amended—</text>
<subparagraph id="H97611207498A44F685B207013AF1E85E"><enum>(A)</enum><text>in paragraph (2)
by striking <quote>or</quote> at the end,</text>
</subparagraph><subparagraph id="H897FE0B59CB74E5189ED6C469B6CC9C9"><enum>(B)</enum><text>in paragraph (3)
by striking the period at the end and inserting <quote>; or</quote>, and</text>
</subparagraph><subparagraph id="HE433FCBD9E0848BA8636BFDD5D39325E"><enum>(C)</enum><text>by adding at the
end the following new paragraph:</text>
<quoted-block id="HE1C67C6D2D9C40B59996ED208D6405B6" style="OLC">
<paragraph id="HD620D375579649D9840039EB03998B3C"><enum>(4)</enum><text>that a named
fiduciary, or a fiduciary designated by a named fiduciary pursuant to a plan
procedure described in section 405(e), may appoint an annuity administrator or
administrators with responsibility for administration of an individual account
plan in accordance with the requirements of section 205 and payment of any
annuity required
thereunder.</text>
</paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</subparagraph></paragraph><paragraph id="HA4D90191EDF046618BC1E153F3B3C86C"><enum>(2)</enum><text>Section 405 of
such Act (29 U.S.C. 1105) is amended by adding at the end the following new
subsection:</text>
<quoted-block id="HFF673BBA276B42CB82E747F3D13962B0" style="OLC">
<subsection id="H47A2B1BE8C7C436D83A84ACFF075A095"><enum>(e)</enum><header>Annuity
Administrator</header><text display-inline="yes-display-inline">If an annuity
administrator or administrators have been appointed under section 402(c)(4) and
such entity acknowledges in writing that they are the annuity administrator,
then neither the named fiduciary nor any appointing fiduciary shall be liable
for any act or omission of the annuity administrator except to the extent
that—</text>
<paragraph id="HD5A4E94243BC45A39E5E0E6C38BAEE64"><enum>(1)</enum><text>the fiduciary
violated section 404(a)(1)—</text>
<subparagraph id="H3114588102B64657B8D373F0CD1BD4DE"><enum>(A)</enum><text display-inline="yes-display-inline">with respect to such allocation or
designation, or</text>
</subparagraph><subparagraph id="HB920230807794546A5063B509DC9F2FF"><enum>(B)</enum><text>in continuing the
allocation or designation,</text>
</subparagraph></paragraph><paragraph id="H578D8BDE9A60498D99D0C3E19736C819"><enum>(2)</enum><text display-inline="yes-display-inline">the fiduciary would otherwise be liable in
accordance with subsection (a), or</text>
</paragraph><paragraph id="HA727159938454E34B8C789D1637C2B25"><enum>(3)</enum><text>the fiduciary is
neither an insurance company nor approved to be an annuity administrator by the
Secretary.</text>
</paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph></subsection><subsection id="H117CDBCD84EA48708182063DBF2A5894"><enum>(b)</enum><header>Effective
date</header><text>The amendments made by subsection (a) shall apply as of the
date of enactment of this Act.</text>
</subsection></section><section id="H9254D43972384C21A1061A5A26019250"><enum>303.</enum><header>Availability of
distribution options</header>
<subsection id="HDBAC57225749428884AEF024E9153E09"><enum>(a)</enum><header>Lifetime income
investments</header><text display-inline="yes-display-inline">By the date that
is one year after the date of enactment of this Act, the Secretary of the
Treasury shall issue final regulations under which it is clarified that any
specified age or service condition (or combination of age and service
conditions) with respect to a lifetime income investment (as defined in section
401(a)(38)(B)(ii)) under a defined contribution plan shall be disregarded in
determining whether such lifetime income investment is currently available to
an employee for purposes of Treasury Regulation section 1.401(a)(4)–4(b) (or
any successor provision).</text>
</subsection><subsection id="H7B405915D0604DD3A9A456CE96F41536"><enum>(b)</enum><header>Enforcement</header><text>As
of the date of enactment of this Act, the Secretary of the Treasury shall
administer and enforce the law in accordance with subsection (a) with respect
to plan years beginning before, on, or after the date of enactment of this
Act.</text>
</subsection><subsection id="HEABD56769AD44AEDBE0814F03E790E13"><enum>(c)</enum><header>Effective
date</header><text>This section shall take effect as of the date of enactment
of this Act.</text>
</subsection></section><section commented="no" id="HCC18DC4E3E534719AA0BEC298572D4C0"><enum>304.</enum><header>Rollover of
insurance contracts to IRAs</header>
<subsection commented="no" id="HF502B9021D784160AAE285314587D36E"><enum>(a)</enum><header>In
general</header><text>Section 408(a)(3) is amended by inserting <quote>other
than insurance contracts that were rolled over to an IRA from a qualified
retirement plan described in clause (iii), (iv), or (vi) of section
402(c)(8)(b) provided that such contracts provide only incidental death
benefits taking into account both the IRA and the qualified retirement
plan</quote> after <quote>contract</quote>.</text>
</subsection><subsection commented="no" id="HAB7F956AC802407781E71B1CAC5CE1EA"><enum>(b)</enum><header>Effective
date</header><text display-inline="yes-display-inline">The amendment made by
subsection (a) shall apply to years beginning after December 31, 2012.</text>
</subsection></section><section id="HC255AEDF0800404A9C6A54B6B1D5D3F7"><enum>305.</enum><header>Portability of
lifetime income options</header>
<subsection id="H207BDAC5F1B74139BE77CF8BC1F72FDE"><enum>(a)</enum><header>In
general</header><text>Subsection (a) of section 401 of the Internal Revenue
Code of 1986 is amended by adding at the end thereof the following new
paragraph:</text>
<quoted-block display-inline="no-display-inline" id="HAF096C5BA64747038E0C96DECE6CC703" style="OLC">
<paragraph id="HE19E03AAC45C44DC93692117F647FA21"><enum>(38)</enum><header>Portability of
lifetime income</header>
<subparagraph id="H2AA9DC77F53F4321B660DE1B47FA8C37"><enum>(A)</enum><header>In
general</header><text>A trust forming part of a defined contribution plan shall
not be treated as failing to constitute a qualified trust under this section
solely by reason of allowing—</text>
<clause id="HBBC7AAC580E44895AB58F2A1D6150C44"><enum>(i)</enum><text>qualified
distributions of a lifetime income investment, or</text>
</clause><clause id="HAE917315AE054DAC92E82A56D0C3CCA8"><enum>(ii)</enum><text>distributions of
a lifetime income investment in the form of a qualified plan distribution
annuity contract,</text>
</clause><continuation-text continuation-text-level="subparagraph">on or
after the date that is 90 days prior to the date on which such lifetime income
investment is no longer authorized to be held as an investment option under the
plan except as may otherwise be provided by regulations.</continuation-text></subparagraph><subparagraph id="H62ECA4ED95314DF9A3507151E9C6E570"><enum>(B)</enum><header>Definitions</header><text>For
purposes of this subsection—</text>
<clause id="HB6429CE93B2E484180DE5F754F29F012"><enum>(i)</enum><text>the term
<term>qualified distribution</term> means a direct trustee-to-trustee transfer
to an eligible retirement plan (as defined in section 402(c)(8)(B)), as
described in section 401(a)(31)(A),</text>
</clause><clause id="H7D9B32D22FDE44EBAAF40C0480009C09"><enum>(ii)</enum><text>the term
<term>lifetime income investment</term> means an investment option that is
designed to provide an employee with election rights—</text>
<subclause id="HA74C37D32839437197CA988C43313622"><enum>(I)</enum><text>that are not
uniformly available with respect to other investment options under the plan,
and</text>
</subclause><subclause id="H7E5E471677C242139A2837EA5E78420D"><enum>(II)</enum><text>that are to a
lifetime income feature available through a contract or other arrangement
offered under the plan or under another eligible retirement plan (as defined in
section 402(c)(8)(B)) through a direct trustee-to-trustee transfer to such
other eligible retirement plan under section 401(a)(31)(A),</text>
</subclause></clause><clause id="HE7953E5A600E43BD9C27F9F4159C6147"><enum>(iii)</enum><text>the term
<term>lifetime income feature</term> means—</text>
<subclause id="H49402A1E37624DC3915E40BF0DD6053C"><enum>(I)</enum><text>a feature that
guarantees a minimum level of income annually (or more frequently) for at least
the remainder of the life of the employee or the joint lives of the employee
and the employee’s designated beneficiary, or</text>
</subclause><subclause id="H21FA67644F9F480396118CD6D11D258C"><enum>(II)</enum><text>an annuity
payable on behalf of the employee under which payments are made in
substantially equal periodic payments (not less frequently than annually) over
the life of the employee or the joint lives of the employee and the employee’s
designated beneficiary, taking into account the rules of clause (iii) of
section 401(a)(9)(I), and</text>
</subclause></clause><clause id="HE29CC1679A5347438B0EBE95281607A2"><enum>(iv)</enum><text display-inline="yes-display-inline">the term <term>qualified plan distribution
annuity contract</term> means an annuity contract purchased for a participant
and distributed to the participant by a plan described in subparagraph (B) of
section 402(c)(8) (without regard to clauses (i) and (ii)
thereof).</text>
</clause></subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="H6949CA71570C4A2182820A9B0E613E46"><enum>(b)</enum><header>Cash or deferred
arrangement</header><text>Clause (i) of section 401(k)(2)(B) of such Code is
amended by striking <quote>or</quote> at the end of subclause (IV), by striking
<quote>and</quote> at the end of subclause (V) and inserting <quote>or</quote>,
and by adding at the end of clause (i) the following:</text>
<quoted-block display-inline="no-display-inline" id="HAACA51984ABF4B61B77A37392C21B344" style="OLC">
<subclause id="HA8B588D4070F4EDDB39FA7EBB2B3384A"><enum>(VI)</enum><text display-inline="yes-display-inline">with respect to amounts invested in a
lifetime income investment (as defined in section 401(a)(38)(B)(ii)), the date
that is 90 days prior to the date that such lifetime income investment may no
longer be held as an investment option under the plan, provided that any
distribution under this subclause must be in the form of a qualified
distribution (as defined in section 401(a)(38)(B)(i)) or a qualified plan
distribution annuity contract (as defined in section
401(a)(38)(B)(iv)).</text>
</subclause><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="H28C429B9869F41379E0598D3A5135249"><enum>(c)</enum><header>Section
403(<enum-in-header>b</enum-in-header>) plans</header>
<paragraph id="H77310EA16BDE4695A498FE8FFB0D04ED"><enum>(1)</enum><header>Annuity
contracts</header><text>Paragraph (11) of section 403 of such Code is amended
by striking <quote>or</quote> at the end of subparagraph (B), by striking the
period at the end of subparagraph (C), and by inserting <quote>, or</quote>,
and by adding at the end of paragraph (11) the following:</text>
<quoted-block display-inline="no-display-inline" id="H74DD42AA345A4D88A141AB5D7CF82DA2" style="OLC">
<subparagraph id="HB47316CF35034BFA8FD319B8E8698212"><enum>(D)</enum><text display-inline="yes-display-inline">with respect to amounts invested in a
lifetime income investment (as defined in section 401(a)(38)(B)(ii)), the date
that is 90 days prior to the date that such lifetime income investment may no
longer be held as an investment option under the plan, provided that any
distribution under this subparagraph must be in the form of a qualified
distribution (as defined in section 401(a)(38)(B)(i)) or a qualified plan
distribution annuity contract (as defined in section
401(a)(38)(B)(iv)).</text>
</subparagraph><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph><paragraph id="H1DDA168BD3F0411F9B872CF2584C6168"><enum>(2)</enum><header>Custodial
accounts</header><text>Clause (ii) of section 403(b)(7)(A) of such Code is
amended to read as follows:</text>
<quoted-block display-inline="no-display-inline" id="H7FB682673A5246E4BC539BFA43CFE358" style="OLC">
<clause id="HC888D5518164414F97876CFA60582DB1"><enum>(ii)</enum><text>under the
custodial account, no such amounts may be paid or made available to any
distributee (unless such amount is a distribution to which section 72(t)(2)(G)
applies) before—</text>
<subclause id="H5FA264C466394F33ACE24DC7FA629132"><enum>(I)</enum><text>the employee
dies,</text>
</subclause><subclause id="H8C34069A7B3B4012A762C492C8729755"><enum>(II)</enum><text>the employee
attains age 59½,</text>
</subclause><subclause id="H95D269D3792B4D91A3B39DD2CB1DD050"><enum>(III)</enum><text>the employee has
a severance from employment,</text>
</subclause><subclause id="H135ADFC2B1E64EEC9D45D791CA5E088D"><enum>(IV)</enum><text>the employee
becomes disabled (within the meaning of section 72(m)(7)),</text>
</subclause><subclause id="H5FBE769AC2E1426ABBFBB71828139D92"><enum>(V)</enum><text>in the case of
contributions made pursuant to a salary reduction agreement (within the meaning
of section 3121(a)(5)(D)), the employee encounters financial hardship,
or</text>
</subclause><subclause id="H4B00127ECE734F45A785A6AA1BE5BD9F"><enum>(VI)</enum><text display-inline="yes-display-inline">with respect to amounts invested in a
lifetime income investment (as defined in section 401(a)(38)(B)(ii)), the date
that is 90 days prior to the date that such lifetime income investment may no
longer be held as an investment option under the plan, provided that any
distribution under this subparagraph must be in the form of a qualified
distribution (as defined in section 401(a)(38)(B)(i)) or a qualified plan
distribution annuity contract (as defined in section
401(a)(38)(B)(iv)).</text>
</subclause></clause><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph></subsection><subsection id="H9A2016330D9D4EC28965344C62F9B2D9"><enum>(d)</enum><header>Eligible
deferred compensation plans</header><text>Subparagraph (A) of section 457(d)(1)
of such Code is amended by striking <quote>or</quote> at the end of clause
(ii), by inserting <quote>or</quote> at the end of clause (iii), and by adding
at the end of subparagraph (A) the following:</text>
<quoted-block display-inline="no-display-inline" id="H6E25B1CFD5BA4137B4F856F7792245EA" style="OLC">
<clause id="HBE2DF72C8C3F4AC9A0157907E4C933E3"><enum>(iv)</enum><text display-inline="yes-display-inline">with respect to amounts invested in a
lifetime income investment (as defined in section 401(a)(38)(B)(ii)), the date
that is 90 days prior to the date that such lifetime income investment may no
longer be held as an investment option under the plan, provided that any
distribution under this subparagraph must be in the form of a qualified
distribution (as defined in section 401(a)(38)(B)(i)) or a qualified plan
distribution annuity contract (as defined in section
401(a)(38)(B)(iv)).</text>
</clause><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="HB45B6EDE9ACF450A9073E89217549265"><enum>(e)</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,
2012.</text>
</subsection></section><enum>IV</enum><header>Simplification
and Clarification of Qualified Retirement Plan Rules</header>
<section id="HFEEB67B78FBC4BBD938E336A9B6320BE"><enum>401.</enum><header>Exception from
required distributions where aggregate retirement savings do not exceed
$100,000</header>
<subsection id="HD3AE339AC9BB4E8D9509C73B46AD65A9"><enum>(a)</enum><header>In
general</header><text display-inline="yes-display-inline">Section 401(a)(9)
(relating to required distributions) is amended by adding at the end the
following new subparagraph:</text>
<quoted-block display-inline="no-display-inline" id="H7B6687C57C0A4178BC7100764421D44F" style="OLC">
<subparagraph id="H484F160E0BCA40B7A209FB34DF37DFD0"><enum>(J)</enum><header>Exception from
required minimum distributions during life of employee or beneficiary where
assets do not exceed $100,000</header>
<clause id="H6BB3277B98FB478D88579AD7E9D4F790"><enum>(i)</enum><header>In
general</header><text>If, as of a measurement date, the aggregate balance to
the credit of an employee under all applicable eligible retirement plans does
not exceed $100,000, then the requirements of subparagraph (A) shall not apply
to the employee during any succeeding calendar year. In addition, if, as of a
measurement date, the aggregate balance to the credit of an employee under all
applicable eligible retirement plans does not exceed $100,000, then the
requirements of subparagraph (B) shall not apply during any succeeding calendar
year to the employee’s designated beneficiary with respect to the designated
beneficiary’s interest in the balance to the credit of the deceased
employee.</text>
</clause><clause id="H535636E4A8F849809511E196C9A3E6A1"><enum>(ii)</enum><header>Applicable
eligible retirement plan</header><text>For purposes of this subparagraph, the
term <quote>applicable eligible retirement plan</quote> means an eligible
retirement plan (as defined in section 402(c)(8)(B)) and any other plan,
contract, or arrangement to which the requirements of section 401(a)(9)
apply.</text>
</clause><clause id="H45D8632C66C54503A9FBF6DAAE7D7D12"><enum>(iii)</enum><header>Special rule
for benefits paid as a life annuity from defined benefit plan</header><text>In
determining the aggregate balance under clause (i), there shall not be taken
into account the value of any benefits under a defined benefit plan that, on
the measurement date, are being paid as a life annuity.</text>
</clause><clause id="H7AFA12D848D4443EA8132B8BEA920D26"><enum>(iv)</enum><header>Measurement
date</header>
<subclause id="H74FB5C7E1CC144D0B91D710056AA1AC1"><enum>(I)</enum><header>Initial
measurement dates</header><text>The initial measurement date for an individual
is the last day of the calendar year preceding the earlier of—</text>
<item id="HCC0DF50207964988A1F49E81EC07D282"><enum>(aa)</enum><text>the
calendar year in which the employee attains age 70<fraction>1/2</fraction>,
or</text>
</item><item id="H36E6BC732F7F49079661FFB5D23AEB4E"><enum>(bb)</enum><text>the
calendar year in which the employee dies.</text>
</item></subclause><subclause id="H113228659E404AB6B818A27E8D0A5751"><enum>(II)</enum><header>Subsequent
measurement dates</header><text>If, in a calendar year, an individual who is
exempted from the requirements of this paragraph pursuant to clause (i)
receives contributions, rollovers, or transfers of amounts, or accrues
additional benefits under a defined benefit plan, that were not previously
taken into account in applying this subparagraph, then the last day of that
calendar year shall be a new measurement date and a new determination shall be
made as to whether clause (i) applies.</text>
</subclause></clause><clause id="HEC3E0EDF808A48E8AFA20107DFA4E8E9"><enum>(v)</enum><header>Determining
value of defined benefit plan benefits</header><text>The value of defined
benefit plan benefits is determined in accordance with the applicable interest
rate and applicable mortality rate assumptions under section 417(e), except
that the value shall be equal to the amount of the single sum payment payable
to the extent available under the plan.</text>
</clause><clause id="HA6BDCE88D54243A6A81A50210F8F6FD2"><enum>(vi)</enum><header>Phase-in of
minimum distribution requirements</header><text>For an individual whose
aggregate balance exceeds the exemption level in clause (i) by less than
$10,000, required minimum distribution requirements will phase in based on the
ratio of—</text>
<subclause id="H548ABE9245E64041B319AFCC46E88948"><enum>(I)</enum><text>the amount by
which the aggregate balance exceeds the exemption level, to</text>
</subclause><subclause id="HDE5B46D2883942D9BA7E15421FFFA3AB"><enum>(II)</enum><text>$10,000.</text>
</subclause></clause><clause id="H0BE36590425F4FD987B8FAE7D3AB52B9"><enum>(vii)</enum><header>Cost of living
adjustments</header><text>The Secretary shall adjust annually the $100,000
amount specified in clause (i) for increases in the cost-of-living at the same
time and in the same manner as adjustments under section 415(d); except that
the base period shall be the calendar quarter beginning July 1, 2012, and any
increase which is not a multiple of $5,000 shall be rounded to the next lowest
multiple of
$5,000.</text>
</clause></subparagraph><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="HF7260BCA04864DB0B583066A65AA192A"><enum>(b)</enum><header>Effective
date</header><text>The amendment made by this section shall apply to initial
measurement dates occurring on or after December 31, 2012.</text>
</subsection></section><section id="H3002AB40C75441AD83251A5DF6516417"><enum>402.</enum><header>Alternative
methods for electronic disclosure</header>
<subsection id="HE5D07F5116134D948CB95CBC728C20A4"><enum>(a)</enum><header>Amendment to
Employee Retirement Income Security Act of 1974</header><text display-inline="yes-display-inline">Part 1 of subtitle B of title I of the
Employee Retirement Income Security Act of 1974 is amended by adding at the end
thereof the following new section:</text>
<quoted-block display-inline="no-display-inline" id="H15D9E4EA43374AC4B8293B37BDED3F3F" style="OLC">
<section id="HF14586F1071442B6B1713ABECACFC52F"><enum>112.</enum><header>Electronic
communication of pension plan information</header>
<subsection id="HAE908E1FBA704A0298994E8F83BACE60"><enum>(a)</enum><header>In
general</header><text>In the case of any documents or materials that are
required under this title to be furnished to a plan participant, beneficiary,
or other individual with respect to a pension plan, such documents or materials
shall be furnished in accordance with subsection (b) or (c). This section shall
apply to documents or materials that are required to be furnished by operation
of law or on individual request and to documents or materials described in
paragraphs (2), (3), (4), and (5) of subsection (b). For purposes of this
section—</text>
<paragraph id="H149E39F8FFB54CEE9ECE727242E7AFD8"><enum>(1)</enum><text>the term
<term>documents or materials</term> shall include, without limitation, reports,
statements, notices, notifications, and other information, and</text>
</paragraph><paragraph id="H5CEEF9B3929A4689BDD70BA148F5A8BA"><enum>(2)</enum><text display-inline="yes-display-inline">the term <term>recipient</term> shall mean
all plan participants, beneficiaries, and any other persons entitled to
documents under this title or regulations issued thereunder (including, but not
limited to, <term>alternate payees</term> within the meaning of section
206(d)(3) and <quote>qualified beneficiaries</quote> within the meaning of
section 607(3)).</text>
</paragraph></subsection><subsection id="H930154FA4BFE4F02B205B9DBE23E7108"><enum>(b)</enum><header>Websites</header><text>Any
documents or materials described in subsection (a) may be furnished to a
recipient by posting it on one or more websites if—</text>
<paragraph id="H2D0027A6C7AB48AC8EA78F440EA47C3D"><enum>(1)</enum><header>Access</header><text>Access
to such documents or materials is available to such recipient on such website
or websites on either a timely or continuous basis, as appropriate.</text>
</paragraph><paragraph id="HAAE49EC8A09A4075B437E2EAE5CD95BC"><enum>(2)</enum><header>Notification of
availability</header><text>Such recipient has been furnished notification of
the availability of such documents or materials on such website or websites and
how such documents or materials can be accessed.</text>
</paragraph><paragraph id="H377A112EEBA94B02A8FBC73E24D40642"><enum>(3)</enum><header>Free paper
copy</header><text>Such recipient has been apprised of his ability to request
and obtain, free of charge, a paper copy of such documents or materials.</text>
</paragraph><paragraph id="HBB66FF3F3FCB45E2B04B4B824CB68BBB"><enum>(4)</enum><header>Timing and form
of notifications</header><text>The notifications described in paragraphs (2)
and (3) are—</text>
<subparagraph id="H27F1C588E8FA40AABF9908EE75709366"><enum>(A)</enum><text>written in a
manner calculated to be understood by the average plan participant,</text>
</subparagraph><subparagraph id="H058DA105CA7C411597248B31E6354B32"><enum>(B)</enum><text>except in the case
of notifications described in paragraph (5), furnished in advance of the date
that the document or materials are required to be provided, and annually
thereafter, and</text>
</subparagraph><subparagraph id="H951FE5687EA34E1C9DEC140410496B5E"><enum>(C)</enum><text>furnished in a
manner permitted under subsection (c).</text>
</subparagraph></paragraph><paragraph id="H8791E349E7E940F68913BB5A8765C1A4"><enum>(5)</enum><header>Additional
notifications</header>
<subparagraph id="HA705302F535F4D6380331B880BC5D158"><enum>(A)</enum><text>In the case of
documents or materials described in subparagraph (B), the notifications
described in paragraphs (2) and (3) must be provided within a reasonable period
prior to the applicable date described in subparagraph (B)(ii).</text>
</subparagraph><subparagraph id="H5BD9D2C180A1441EB0D7107EEC456E97"><enum>(B)</enum><text>Documents or
materials are described in this subparagraph if they are described in
subsection (a) and—</text>
<clause id="HB8BAA9BA838C4BB9A8F59EA45B80B922"><enum>(i)</enum><text>such documents or
materials relate to an event or other occurrence that was not scheduled at the
time of any prior notification,</text>
</clause><clause id="HBDD858E3D2974E00A60E79AE968C8776"><enum>(ii)</enum><text>the documents or
materials relate to a date by which such recipient should be aware of such
event or occurrence, and</text>
</clause><clause id="HF4DFC652D10B481EBEE9E0146BEF966C"><enum>(iii)</enum><text>the recipient
would not have had any reason to know that such date exists and applies to him
without the notification.</text>
</clause><continuation-text continuation-text-level="subparagraph">Documents or materials to which
this requirement applies include, without limitation, notifications regarding a
blackout period (as defined in section 101(i)(7)) and notifications regarding a
change in the address of the website.</continuation-text></subparagraph></paragraph><paragraph id="H01FE559B7651413292686C67A400CFEF"><enum>(6)</enum><header>Definition of
website</header><text>For purposes of this section, the term
<term>website</term> shall include any electronic application, site, or other
accessible means of storing and displaying data or information.</text>
</paragraph></subsection><subsection id="H4DB606BCAB504861997FDB972A6EDE6C"><enum>(c)</enum><header>Paper or
electronic communication</header>
<paragraph id="H6ACDCDA3E88B4A40B077D486915433C0"><enum>(1)</enum><header>Use of paper or
electronic communication</header><text>Any documents or materials described in
subsection (a) may be furnished to a recipient in the following manner
described in subparagraph (A), (B), (C), (D), or (E) of this paragraph, as
determined by the entity furnishing the documents or materials:</text>
<subparagraph id="H7CEE7B7D196A4EA6B00E948D7337A6F6"><enum>(A)</enum><text>Such documents or
materials may be furnished through the use of paper.</text>
</subparagraph><subparagraph id="H52608D3A6DCD44B689FF08D7CEF2EEBF"><enum>(B)</enum><text>Such documents or
materials may be furnished electronically to a recipient who—</text>
<clause id="H9ABAD9F786BE4E1896BB5C64C44311F2"><enum>(i)</enum><text>has the ability to
effectively access documents furnished in electronic form at any location where
the participant is reasonably expected to perform his or her duties as an
employee, and</text>
</clause><clause id="H2AF87525709C469185A308655F929306"><enum>(ii)</enum><text>with respect to
whom access to the employer’s or plan sponsor’s electronic information is an
integral part of those duties.</text>
</clause></subparagraph><subparagraph id="H742B63C88C5A425B8AD0974B42DE4BBA"><enum>(C)</enum><text>Such documents or
materials may be furnished electronically to a recipient who has affirmatively
consented, in electronic or nonelectronic form, to receiving documents or
materials through electronic media and has not withdrawn such consent.</text>
</subparagraph><subparagraph id="H0493212683714C3C868951217D68798D"><enum>(D)</enum><text display-inline="yes-display-inline">Such documents or materials may be
furnished electronically to a recipient who has the effective ability to access
the electronic medium used and who has received notification through the use of
paper of his ability to request and obtain, free of charge, a paper copy of
such documents or materials.</text>
</subparagraph><subparagraph id="H3733DB091E7A4154B940E8282F750A13"><enum>(E)</enum><text>Such documents or
materials may be furnished in any additional manner permitted by the Secretary
or the Secretary of the Treasury, as applicable.</text>
</subparagraph></paragraph><paragraph id="HD5F51D5F17EE4F9187A113493450FAFE"><enum>(2)</enum><header>Protections for
recipients</header><text>Electronic communications described in paragraph (1)
(B), (C), or (D) shall only be permitted with respect to a plan if appropriate
and necessary measures have been taken that are reasonably calculated to ensure
that the system for furnishing documents or materials—</text>
<subparagraph id="H7E493463933243A38470BE43AF605D75"><enum>(A)</enum><text>has safeguards to
maximize the likelihood of actual receipt of transmitted information,</text>
</subparagraph><subparagraph id="H89A1B77FDBC842AF8259911AE74EC975"><enum>(B)</enum><text>protects the
confidentiality of a recipient’s personal information,</text>
</subparagraph><subparagraph id="H5B75E5D49D3F4D3A8D37CE24A354E05B"><enum>(C)</enum><text>is designed so
that the electronically delivered documents or materials are prepared and
furnished in a manner that is consistent with the style, format, and content
requirements applicable to the documents or materials,</text>
</subparagraph><subparagraph id="H2EB9971915A44D27BC5412FDE3049D0C"><enum>(D)</enum><text>if necessary,
apprises each recipient of the significance of the documents or
materials,</text>
</subparagraph><subparagraph id="H6C4CAE45929449088EF955553562B1D9"><enum>(E)</enum><text>apprises each
recipient of the ability to request and obtain a paper version of the
electronically furnished documents or materials, and provides such paper
version on request, and</text>
</subparagraph><subparagraph id="HEB1F300C4A6440C39C8E67CDC80DC0AA"><enum>(F)</enum><text>to the extent
required by identical regulations prescribed by the Secretary and the Secretary
of the Treasury, facilitates the ability of a recipient who is an employee to
make the request described in subparagraph (E) with respect to documents or
materials that are required to be furnished to such recipient after his
termination of employment.</text>
</subparagraph></paragraph><paragraph id="H21A58B01252C4BB5868E0C8CD2BAAF59"><enum>(3)</enum><header>Notifications
regarding consent</header><text>Electronic communications described in
paragraph (1)(C) shall only be permitted with respect to a plan if recipients
are provided with timely notifications with respect to—</text>
<subparagraph id="H03C332D49E6A4B2EA8B163672173E673"><enum>(A)</enum><text>the effect of the
consent,</text>
</subparagraph><subparagraph id="HD76FB93083C442518D1388DBD15C8C01"><enum>(B)</enum><text>hardware and
software requirements, and</text>
</subparagraph><subparagraph id="HBBF7CB688E354926B762E261500A2152"><enum>(C)</enum><text>changes in the
hardware and software
requirements.</text>
</subparagraph></paragraph></subsection></section><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="H27AD22A7BE724BA4B440002B48637693"><enum>(b)</enum><header>Amendment to
Internal Revenue Code of 1986</header><text>Section 414 of the Internal Revenue
Code of 1986 is amended by adding at the end thereof the following new
subsection:</text>
<quoted-block display-inline="no-display-inline" id="HF8F4759CC77842DAA701953C2F9B6838" style="OLC">
<subsection id="HE6B42B4511A44389AD0C9F34FC7BB692"><enum>(y)</enum><header>Electronic
communication of retirement plan information</header>
<paragraph id="HBA62D1240A914F7DA057B9C9EC37519D"><enum>(1)</enum><header>In
general</header><text>In the case of any documents or materials that are
required under this title to be furnished to a plan participant, beneficiary,
or other individual with respect to a plan subject to this subchapter or to
section 457, such documents or materials shall be furnished in accordance with
paragraph (2) or (3). This subsection shall apply to documents or materials
that are required to be furnished by operation of law or on individual request
and to documents or materials described in subparagraphs (B), (C), (D), and (E)
of paragraph (2). For purposes of this subsection—</text>
<subparagraph id="H95A7678DB0C746F2810677D391836985"><enum>(A)</enum><text>the term
<term>documents or materials</term> shall include, without limitation, reports,
statements, notices, notifications, and other information, and</text>
</subparagraph><subparagraph id="H77733C05B5C9474D8BF4FB58E7CA341F"><enum>(B)</enum><text display-inline="yes-display-inline">the term <term>recipient</term> shall mean
all plan participants, beneficiaries, and any other persons entitled to
documents under this subchapter or section 457 or regulations issued thereunder
(including, but not limited to, <term>alternate payees</term> within the
meaning of subsection (p)(8) and <term>qualified beneficiaries</term> within
the meaning of section 4980B(g)(1)).</text>
</subparagraph></paragraph><paragraph id="HC1468190F1B04DF3AE7FE205CF5E8163"><enum>(2)</enum><header>Websites</header><text>Any
documents or materials described in subsection (a) may be furnished to a
recipient by posting it on one or more websites if—</text>
<subparagraph id="H31BEBCA9EBA7403194C8D4DB0E5114A8"><enum>(A)</enum><header>Access</header><text>Access
to such documents or materials is available to such recipient on such website
or websites on either a timely or continuous basis, as appropriate.</text>
</subparagraph><subparagraph id="H61327FC0BB5D4A83BEBA696ED8F372E5"><enum>(B)</enum><header>Notification of
availability</header><text>Such recipient has been furnished notification of
the availability of such documents or materials on such website or websites and
how such documents or materials can be accessed.</text>
</subparagraph><subparagraph id="HADA58A97A61540AE88AFF25CAC084F5C"><enum>(C)</enum><header>Free paper
copy</header><text>Such recipient has been apprised of his ability to request
and obtain, free of charge, a paper copy of such documents or materials.</text>
</subparagraph><subparagraph id="H66FA01D7EC85483D9F1A38F91FF3450F"><enum>(D)</enum><header>Timing and form
of notifications</header><text>The notifications described in subparagraphs (B)
and (C) are—</text>
<clause id="H7B53C80A0F9649D4998DBFF6D736740D"><enum>(i)</enum><text>written in a
manner calculated to be understood by the average plan participant,</text>
</clause><clause id="HB4FD64167236450BA3BF911ED374AC23"><enum>(ii)</enum><text>except in the
case of notifications described in subparagraph (E), furnished in advance of
the date that the document or materials are required to be provided, and
annually thereafter, and</text>
</clause><clause id="HC693177862AC43DFBD28205DFEFC6050"><enum>(iii)</enum><text>furnished in a
manner permitted under paragraph (3).</text>
</clause></subparagraph><subparagraph id="H43DDB4C2D88D41879E8508CF75D4451F"><enum>(E)</enum><header>Additional
notifications</header>
<clause id="H35ECB929B2944ADD819506D63E88E055"><enum>(i)</enum><text>In
the case of documents or materials described in clause (ii), the notifications
described in subparagraphs (B) and (C) must be provided within a reasonable
period prior to the applicable date described in clause (ii)(II).</text>
</clause><clause id="H4D6D39D6B5D74584BF9F5C016F37A62E"><enum>(ii)</enum><text>Documents or
materials are described in this subparagraph if they are described in
subsection (a) and—</text>
<subclause id="H3B5A50C9EEBA4B4F9571B0F6F2CE1853"><enum>(I)</enum><text>such documents or
materials relate to an event or other occurrence that was not scheduled at the
time of any prior notification,</text>
</subclause><subclause id="HB2951451C4D34629BB5EC2E771D6F658"><enum>(II)</enum><text>the documents or
materials relate to a date by which such recipient should be aware of such
event or occurrence, and</text>
</subclause><subclause id="HE1B456D9092746019DB15F8CA6A3AA6C"><enum>(III)</enum><text>the recipient
would not have had any reason to know that such date exists and applies to him
without the notification.</text>
</subclause><continuation-text continuation-text-level="clause">Documents or
materials to which this requirement applies include, without limitation,
notifications regarding a change in the address of the website.</continuation-text></clause></subparagraph><subparagraph id="H9E7822F2D6FF4181BEDCC9109FD8578A"><enum>(F)</enum><header>Definition of
website</header><text>For purposes of this subsection, the term
<term>website</term> shall include any electronic application, site, or other
accessible means of storing and displaying data or information.</text>
</subparagraph></paragraph><paragraph id="H2A3DCD6D72C54E4B86F4328E65FE71B6"><enum>(3)</enum><header>Paper or
electronic communication</header>
<subparagraph id="HAB8A2CBB1A4744A686E7D6CA7F52FAB3"><enum>(A)</enum><header>Use of paper or
electronic communication</header><text>Any documents or materials described in
paragraph (1) may be furnished to a recipient in the following manner described
in clause (i), (ii), (iii), (iv), or (v) of this paragraph, as determined by
the entity furnishing the documents or materials:</text>
<clause id="H1008B9A851084160A4888A34FF29DBEA"><enum>(i)</enum><text>Such documents or
materials may be furnished through the use of paper.</text>
</clause><clause id="H67661A855D864A0BBD326CDC41C1071E"><enum>(ii)</enum><text>Such documents or
materials may be furnished electronically to a recipient who—</text>
<subclause id="HE25FE6A790A04D15BDC78152F3567D69"><enum>(I)</enum><text>has the ability to
effectively access documents furnished in electronic form at any location where
the participant is reasonably expected to perform his or her duties as an
employee, and</text>
</subclause><subclause id="HCA7D6B3D41394848967902374EB5B48C"><enum>(II)</enum><text>with respect to
whom access to the employer’s or plan sponsor’s electronic information is an
integral part of those duties.</text>
</subclause></clause><clause id="H6F315314E5404DAD9A0DDA9D041A44F2"><enum>(iii)</enum><text>Such documents
or materials may be furnished electronically to a recipient who has
affirmatively consented, in electronic or nonelectronic form, to receiving
documents or materials through electronic media and has not withdrawn such
consent.</text>
</clause><clause id="HAA58613661B6407D94CD1C54D405B98A"><enum>(iv)</enum><text display-inline="yes-display-inline">Such documents or materials may be
furnished electronically to a recipient who has the effective ability to access
the electronic medium used and who has received notification through the use of
paper of his ability to request and obtain, free of charge, a paper copy of
such documents or materials.</text>
</clause><clause id="HBEDE52134F0B4140B8ACA04612406224"><enum>(v)</enum><text>Such documents or
materials may be furnished in any additional manner permitted by the Secretary
or the Secretary of the Treasury, as applicable.</text>
</clause></subparagraph><subparagraph id="HBBB5F1D2FD924D9880ED6A372E8E6D14"><enum>(B)</enum><header>Protections for
recipients</header><text>Electronic communications described in subparagraph
(A) (ii), (iii), or (iv) shall only be permitted with respect to a plan if
appropriate and necessary measures have been taken that are reasonably
calculated to ensure that the system for furnishing documents or
materials—</text>
<clause id="HF9DE1269313C4C78848CDE8BEB728879"><enum>(i)</enum><text>has safeguards to
maximize the likelihood of actual receipt of transmitted information,</text>
</clause><clause id="H51A2899772C946CF89B8B3884D8A78F8"><enum>(ii)</enum><text>protects the
confidentiality of a recipient’s personal information,</text>
</clause><clause id="HF6CE84CBA897466398504E23A009DBF3"><enum>(iii)</enum><text>is designed so
that the electronically delivered documents or materials are prepared and
furnished in a manner that is consistent with the style, format, and content
requirements applicable to the documents or materials,</text>
</clause><clause id="H27E2BBD8916C453D918E015187CA450C"><enum>(iv)</enum><text>if necessary,
apprises each recipient of the significance of the documents or
materials,</text>
</clause><clause id="H415CB1EF97BC491DBFB320C428343744"><enum>(v)</enum><text>apprises each
recipient of the ability to request and obtain a paper version of the
electronically furnished documents or materials, and provides such paper
version on request, and</text>
</clause><clause id="H01CBAE681FBD4ACC9332D4716E48B9A7"><enum>(vi)</enum><text>to the extent
required by identical regulations prescribed by the Secretary and the Secretary
of Labor, facilitates the ability of a recipient who is an employee to make the
request described in clause (v) with respect to documents or materials that are
required to be furnished to such recipient after his termination of
employment.</text>
</clause></subparagraph><subparagraph id="HE512242AE4834DB787AD165CB2BA2598"><enum>(C)</enum><header>Notifications
regarding consent</header><text>Electronic communications described in
subparagraph (A)(iii) shall only be permitted with respect to a plan if
recipients are provided with timely notifications with respect to—</text>
<clause id="H20757B3D91614EF5AAC01E3F92B278CD"><enum>(i)</enum><text>the effect of the
consent,</text>
</clause><clause id="H5944BCC948C74A12BA55E4209EDCCEEC"><enum>(ii)</enum><text>hardware and
software requirements, and</text>
</clause><clause id="H0C2C38B561CF4C4485240E650A865C61"><enum>(iii)</enum><text>changes in the
hardware and software
requirements.</text>
</clause></subparagraph></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="HB4CCBDC16C2944B29B5135C89A156850"><enum>(c)</enum><header>Assuring
coordination</header><text>The Secretary of the Treasury and the Secretary of
Labor shall ensure, through the execution of an interagency memorandum of
understanding among such Secretaries, that—</text>
<paragraph id="HB152E04DB2A64C5DB7D0FBC459C349FF"><enum>(1)</enum><text>regulations,
rulings, and interpretations issued by such Secretaries relating to the same
matter over which such Secretaries have responsibility under section 112 of
Employee Retirement Income Security Act of 1974 and 414(y) of the Internal
Revenue Code of 1986 are administered so as to have the same effect at all
times; and</text>
</paragraph><paragraph id="HDF8845B38F22478ABB5B82A87A50322E"><enum>(2)</enum><text>coordination of
policies relating to enforcing the same requirements through such Secretaries
in order to have a coordinated enforcement strategy that avoids duplication of
enforcement efforts and assigns priorities in enforcement.</text>
</paragraph></subsection><subsection id="H119F328F1FF24E95914144CA5605D786"><enum>(d)</enum><header>Effective
date</header><text>The amendments made by this section shall apply as of the
date of enactment of this Act.</text>
</subsection></section><section id="H72AD9601B83C4766A1C742178FC168A6"><enum>403.</enum><header>Expansion of
Employee Plans Compliance Resolution System</header>
<subsection id="H0001F6C49BF1490AB8DD6DE5D3B80F5E"><enum>(a)</enum><header>In
general</header><text display-inline="yes-display-inline">Not later than one
year after the date of the enactment of this Act, the Secretary of the Treasury
shall modify the Employee Plans Compliance Resolution System (as described in
Revenue Procedure 2008–50) to achieve the results specified in the succeeding
subsections of this section and to further facilitate corrections and
compliance in such other means as the Secretary deems appropriate.</text>
</subsection><subsection id="HFD351B97AFFA4833B6FCBC6A2FF724CC"><enum>(b)</enum><header>Loan
error</header>
<paragraph id="H980361B628AD487595DAD2A8F64248FF"><enum>(1)</enum><text display-inline="yes-display-inline">In the case of plan loan errors for which
corrections are specified under the voluntary compliance program,
self-correction shall be made available by methods applicable to such loans
through the voluntary compliance program.</text>
</paragraph><paragraph id="HB76F0162E734414FB19FA88B87F5BC3F"><enum>(2)</enum><text>The Secretary of
Labor shall treat any loan error corrected pursuant to paragraph (1) as meeting
the requirements of the Voluntary Fiduciary Correction Program of the
Department of Labor.</text>
</paragraph></subsection><subsection id="HCC2F911C26944AB28BD1530DAFE8FFC6"><enum>(c)</enum><header>403(<enum-in-header>b</enum-in-header>)
and 457(<enum-in-header>b</enum-in-header>) plan correction</header><text display-inline="yes-display-inline">The Secretary of the Treasury shall update
the Employee Plans Compliance Resolution System to provide the same type of
comprehensive correction program that is available under such system to
retirement plans qualified under section 401(a) of the Internal Revenue Code of
1986 to—</text>
<paragraph id="H33E7F45F07EB433DAACEE7C12F2D8AFF"><enum>(1)</enum><text>plans maintained
pursuant to section 403(b) of such Code, and</text>
</paragraph><paragraph id="H8D8716C0176E4E8489A74E348AA90A66"><enum>(2)</enum><text>plans maintained
pursuant to section 457(b) of such Code by an employer described in section
457(e)(1)(A) of such Code.</text>
</paragraph></subsection><subsection id="HBB5EE56B4B6E46C2BC7A4DB522FD8EC1"><enum>(d)</enum><header>EPCRS for
IRAs</header><text display-inline="yes-display-inline">The Secretary of the
Treasury shall expand the Employee Plans Compliance Resolution System to allow
custodians of individual retirement plans to address inadvertent errors for
which the owner of an individual retirement plan was not at fault, including
(but not limited to)—</text>
<paragraph id="H8AC042C60AB946EAAC9DCF2614BE0A23"><enum>(1)</enum><text>waivers of the
excise tax that would otherwise apply under section 4974 of the Internal
Revenue Code of 1986,</text>
</paragraph><paragraph id="HAFE6465F443D4F97A7B0DE795FDFEA46"><enum>(2)</enum><text display-inline="yes-display-inline">under the self-correction component of the
Employee Plans Compliance Resolution System, waivers of the 60-day deadline for
a rollover where the deadline is missed for reasons beyond the reasonable
control of the account owner, and</text>
</paragraph><paragraph id="H9B07A80A95E648979583BDF530181A04"><enum>(3)</enum><text>rules permitting a
nonspouse beneficiary to return distributions to an inherited individual
retirement plan described in section 408(d)(3)(C) of the Internal Revenue Code
of 1986 in a case where, due to an inadvertent error by a service provider, the
beneficiary had reason to believe that the distribution could be rolled over
without inclusion in income of any part of the distributed amount.</text>
</paragraph></subsection><subsection id="H883843C1BCB0413BA7FCF4F15D53F86C"><enum>(e)</enum><header>Required minimum
distribution corrections</header><text>The Secretary of the Treasury shall
expand the Employee Plans Compliance Resolution System to allow plans to which
such system applies and custodians of individual retirement plans to
self-correct, without an excise tax, any inadvertent errors pursuant to which a
distribution is made no more than 180 days after it was required to be
made.</text>
</subsection><subsection id="H38255E5EC1F54FC19ED22FB33B346B35"><enum>(f)</enum><header>Automatic
feature error correction</header><text>In order to promote the adoption of
automatic enrollment and automatic escalation, the Secretary of the Treasury
shall modify the Employee Plans Compliance Resolution System to establish
specific correction methods for errors in implementing automatic enrollment and
automatic escalation features.</text>
</subsection></section><section id="H8B73261D7DA64A71AE81EE5E2D1CC6BD"><enum>404.</enum><header>Use of
forfeitures to fund safe harbor contributions</header>
<subsection id="H1E41F2AEA26047CC8B2D5D1FAFF2623E"><enum>(a)</enum><header>In
general</header><text>Section 401(k) is amended by adding at the end the
following new paragraph:</text>
<quoted-block id="H2478C5BFC1184F788FEB61556102FD69" style="OLC">
<paragraph id="H665581DB5B9C4C37851E07F318930EF2"><enum>(14)</enum><text>A matching
contribution or nonelective contribution described in paragraph (3)(D)(ii),
subparagraph (B) or (C) of paragraph (12), or paragraph (13)(D) shall not fail
to satisfy the definition under such paragraph merely because the contribution
is funded in whole or in part by
forfeitures.</text>
</paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="H7A8D5E4B81D34891B176D166FF4B993B"><enum>(b)</enum><header>Effective
date</header><text>The amendment made by subsection (a) shall apply to
forfeitures allocated in accordance with section 401(k)(14) of the Internal
Revenue Code of 1986 (as amended by subsection (a)) before, on or after the
date of enactment of this Act.</text>
</subsection></section><section id="H209449A0695D48CFBAD517C76529F847" section-type="subsequent-section"><enum>405.</enum><header>Substantial
cessation of operations</header>
<subsection id="H1FC6C7DDE1B0448EB13142622B5D9CDC"><enum>(a)</enum><header>In
general</header><text display-inline="yes-display-inline">Subsection (e) of
section 4062 of the Employee Retirement Income Security Act of 1974 is amended
by striking <quote>If an employer</quote> and inserting <quote>(1)
<header-in-text level="paragraph" style="OLC">In General.—</header-in-text>If
an employer</quote>, and by adding at the end thereof the following new
paragraph:</text>
<quoted-block display-inline="no-display-inline" id="HF34B24DD5A85446F86A8AAFBED6C8EF0" style="OLC">
<paragraph id="HCCC5F96FEEEF48CA86C762933CF65F57"><enum>(2)</enum><header>Substantial
cessation of operations</header><text>An employer shall not be treated as
having a cessation described in paragraph (1) unless—</text>
<subparagraph id="HF27DA70ECC6D4B7F8D88830E11AB822B"><enum>(A)</enum><text>all operations at
a facility in a location are ceased and—</text>
<clause id="H60AE1575484A4828BA2E1ADEA08F957E"><enum>(i)</enum><text>such cessation is
reasonably expected to be permanent,</text>
</clause><clause id="H99069F0D94B54A1CA1AC0EE1C35E0175"><enum>(ii)</enum><text>no portion of
such operations is moved to another facility at a different location,</text>
</clause><clause id="H9F82113CF52C4C55B0DEC97BFDFB4686"><enum>(iii)</enum><text>no portion of
such operations is assumed or otherwise transferred to another employer,
and</text>
</clause><clause id="H2A74C98786B04492A8FF3449AE3AE4CE"><enum>(iv)</enum><text>no other
operations are reasonably expected to be maintained at such facility,
and</text>
</clause></subparagraph><subparagraph id="H0D60E5159B3E468BAD632D710D247E5E"><enum>(B)</enum><text display-inline="yes-display-inline">as a result of the cessation described in
subparagraph (A), more than 20 percent of the employees of the employer have a
termination of employment that is reasonably expected to be permanent. For
purposes of this subparagraph, employees of the employer shall include all
employees treated as employed by a single employer under sections 210(c) and
(d).</text>
</subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="HF8C3CA25E8C34731919B152CA6C1C517"><enum>(b)</enum><header>Direction to the
corporation</header><text>The Pension Benefit Guaranty Corporation shall not
take any enforcement, administrative, or other actions pursuant to section
4062(e) of such Act that are inconsistent with subparagraph (A) of section
4062(e)(2) of such Act, as amended, without regard to whether such actions
relate to a cessation or other event that occurs before or after the date of
enactment of this Act.</text>
</subsection><subsection id="H753788FEBE904F7D96A5F867EFED314D"><enum>(c)</enum><header>Effective
date</header><text>Subsection (b) and the amendment made by subsection (a)
shall apply as of the date of enactment of this Act.</text>
</subsection></section><section id="H03E279FE109145568AC30C38701080ED" section-type="subsequent-section"><enum>406.</enum><header>Church plan
clarification</header>
<subsection id="H415519DE2CA644699E7E69810C5BE9D2"><enum>(a)</enum><header>Application of
controlled group rules to church plans</header>
<paragraph id="HFFD780A5C2C640469C749843A56E9720"><enum>(1)</enum><header>In
general</header><text display-inline="yes-display-inline">Section 414(c) is
amended—</text>
<subparagraph id="HB75820BFB3414CBB87BA45462E7B52DD"><enum>(A)</enum><text display-inline="yes-display-inline">by striking <quote>For purposes</quote> and
inserting the following:</text>
<quoted-block display-inline="no-display-inline" id="HD57B2587815A4995B10400C314C41766" style="OLC">
<paragraph id="HFA86D1A796A347CAB7609ED2AE8E0E9D"><enum>(1)</enum><header>In
general</header><text display-inline="yes-display-inline">For
purposes</text>
</paragraph><after-quoted-block>,
and</after-quoted-block></quoted-block>
</subparagraph><subparagraph id="H909A63936E0640EA9D0FC146DC0D714D"><enum>(B)</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="H1B27BC1F247640AB9CE1BC9641C2A3E1" style="OLC">
<paragraph id="H2E2200EBC04841DC93A4DBE5A21E9760"><enum>(2)</enum><header>Church
plans</header>
<subparagraph id="H2BA63C8B61E540AFB02143C42A511329"><enum>(A)</enum><header>General
Rule</header><text>Except as provided in subparagraphs (B) and (C) below, for
purposes of this subsection and subsection (m), an organization that is
otherwise eligible to participate in a church plan as defined in subsection (e)
shall not be aggregated with another such organization and treated as a single
employer with such other organization unless—</text>
<clause id="HEA0644F360364FB796D4AC8E31DD7528"><enum>(i)</enum><text>one such
organization provides directly or indirectly at least 80 percent of the
operating funds for the other organization during the preceding tax year of the
recipient organization, and</text>
</clause><clause id="H89803AE3B6704D058484B32D15BB807D"><enum>(ii)</enum><text>there is a degree
of common management or supervision between the organizations.</text>
</clause><continuation-text continuation-text-level="subparagraph">For
purposes of this subparagraph, a degree of common management or supervision
exists only if the organization providing the operating funds is directly
involved in the day-to-day operations of the other organization.</continuation-text></subparagraph><subparagraph id="H36C8970CB0944556910FAE4563E777F9"><enum>(B)</enum><header>Nonqualified
Church-Controlled Organizations</header><text>Notwithstanding the provisions of
subparagraph (A), for purposes of this subsection and subsection (m), an
organization that is a nonqualified church-controlled organization shall be
aggregated with one or more other nonqualified church-controlled organizations,
or with an organization that is not exempt from tax under section 501, and
treated as a single employer with such other organizations, if at least 80
percent of the directors or trustees of such organizations are either
representatives of, or directly or indirectly controlled by, the first
organization. For purposes of this subparagraph, a <quote>nonqualified church
controlled organization</quote> shall mean a church-controlled organization
described in section 501(c)(3) that is not a qualified church-controlled
organization described in section 3121(w)(3)(B).</text>
</subparagraph><subparagraph id="HDD4F1CD30CA94EA48F5728A6DDBC27A7"><enum>(C)</enum><header>Permissive
Aggregation Among Church-Related Organizations</header><text>Organizations
described in subparagraph (A) may elect to be treated as under common control
for purposes of this subsection. Such election shall be made by the church or
convention or association of churches with which such organizations are
associated within the meaning of section 414(e)(3)(D), or by an organization
determined by such church or convention or association of churches to be the
appropriate organization for making such election.</text>
</subparagraph><subparagraph id="H29FB64DF864B4CCAABF5E1F8C1F28C52"><enum>(D)</enum><header>Permissive
Disaggregation of Church-Related Organizations</header><text>For purposes of
subparagraph (A) above, in the case of a church plan (as defined in section
414(e)), any employer may permissively disaggregate those entities that are not
churches (as defined in section 403(b)(12)(B)) separately from those entities
that are churches, even if such entities maintain separate church plans.</text>
</subparagraph><subparagraph id="H97145440C21D4C7199717DF70D069F57"><enum>(E)</enum><header>Anti-Abuse
Rule</header><text>For purposes of subparagraphs (A) and (B), the anti-abuse
rule in Treasury Regulation section 1.414(c)–5(f) shall
apply.</text>
</subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</subparagraph></paragraph><paragraph id="H7DBD276BF58B487F865ABF3357E099C1"><enum>(2)</enum><header>Effective
date</header><text>The amendments made by this subsection shall apply to
taxable years beginning before, on, or after the date of the enactment of this
Act.</text>
</paragraph></subsection><subsection id="H2CFFFE55B9C54BB5AD90D4581B128B0F"><enum>(b)</enum><header>Application of
contribution and funding limitations to 403(<enum-in-header>b</enum-in-header>)
grandfathered defined benefit plans</header>
<paragraph id="H46E62C0A1AAD4F999841BBB74802F3FA"><enum>(1)</enum><header>In
general</header><text display-inline="yes-display-inline">Section 251(e)(5) of
the Tax Equity and Fiscal Responsibility Act of 1982 (Public Law 97–248), is
amended—</text>
<subparagraph id="H2E129B4A4B5D4BBE947DAA46F72D0BB3"><enum>(A)</enum><text>by striking
<quote>403(b)(2)</quote> and inserting <quote>403(b)</quote>, and</text>
</subparagraph><subparagraph id="H3F0F619E26A24B1FA99BAEC567C5440B"><enum>(B)</enum><text>by inserting
before the period at the end the following: <quote>, and shall be subject to
the applicable limitations of section 415(b) of such Code as if it were a
defined benefit plan under section 401(a) of such Code and not the limitations
of section 415(c) of such Code (relating to limitation for defined contribution
plans).</quote>.</text>
</subparagraph></paragraph><paragraph id="HF7500707E2E641F292F268ACE93FE672"><enum>(2)</enum><header>Effective
date</header><text>The amendments made by this subsection shall apply as if
included in the enactment of the Tax Equity and Fiscal Responsibility Act of
1982.</text>
</paragraph></subsection><subsection id="HF566F91754294F38A794EEB8DC7174E3"><enum>(c)</enum><header>Automatic
enrollment by church plans</header>
<paragraph id="HB26F1D9FF7934F42ABEA4EDD40CADBCA"><enum>(1)</enum><header>In
general</header><text>This subsection shall supersede any law of a State which
would directly or indirectly prohibit or restrict the inclusion in any church
plan (as defined in this subsection) of an automatic contribution
arrangement.</text>
</paragraph><paragraph id="H7378F7BE6980454D86CD90672834E084"><enum>(2)</enum><header>Definition of
automatic contribution arrangement</header><text>For purposes of this
subsection, the term <term>automatic contribution arrangement</term> means an
arrangement—</text>
<subparagraph id="H8E8B6EB0968B48DA8DF9E5F6ABA86E22"><enum>(A)</enum><text>under which a
participant may elect to have the plan sponsor make payments as contributions
under the plan on behalf of the participant, or to the participant directly in
cash, and</text>
</subparagraph><subparagraph id="HABFB4752CBDA4743BB786B7FF860F813"><enum>(B)</enum><text>under which a
participant is treated as having elected to have the plan sponsor make such
contributions in an amount equal to a uniform percentage of compensation
provided under the plan until the participant specifically elects not to have
such contributions made (or specifically elects to have such contributions made
at a different percentage).</text>
</subparagraph></paragraph><paragraph id="HBE8F8C70CC614D70833A6AF4AF0C27B8"><enum>(3)</enum><header>Notice
requirements</header>
<subparagraph id="H91939B3D757F40D7BDA3AB87FE99075E"><enum>(A)</enum><text>The plan
administrator of an automatic contribution arrangement shall, within a
reasonable period before such plan year, provide to each participant to whom
the arrangement applies for such plan year notice of the participant’s rights
and obligations under the arrangement which—</text>
<clause id="HA6E338788886484CA4BCB6F6276FC8E3"><enum>(i)</enum><text>is
sufficiently accurate and comprehensive to apprise the participant of such
rights and obligations, and</text>
</clause><clause id="H77C1AAC60D8844489AA949C9F07B8314"><enum>(ii)</enum><text>is
written in a manner calculated to be understood by the average participant to
whom the arrangement applies.</text>
</clause></subparagraph><subparagraph id="H40683F14D4FE4EFEBC7D521AA5011F57"><enum>(B)</enum><text>A notice shall not
be treated as meeting the requirements of subparagraph (A) with respect to a
participant unless—</text>
<clause id="HA31C58C978684F66AC1D1B46AD63ED8E"><enum>(i)</enum><text>the
notice includes an explanation of the participant’s right under the arrangement
not to have elective contributions made on the participant’s behalf (or to
elect to have such contributions made at a different percentage),</text>
</clause><clause id="HE5195F68A9564EDB950BB23A560E4AB9"><enum>(ii)</enum><text>the
participant has a reasonable period of time, after receipt of the notice
described in clause (i) and before the first elective contribution is made, to
make such election, and</text>
</clause><clause id="H29BC574835DD4762AA8EC890A741D7A5"><enum>(iii)</enum><text>the notice
explains how contributions made under the arrangement will be invested in the
absence of any investment election by the participant.</text>
</clause></subparagraph></paragraph><paragraph id="HA066B20B3CA541DD99577CEF82239886"><enum>(4)</enum><header>Effective
date</header><text>This subsection shall take effect on the date of the
enactment of this Act.</text>
</paragraph></subsection><subsection id="H947DC68C5CDF4777903D1BB4DBF69143"><enum>(d)</enum><header>Allow certain
plan transfers and mergers</header>
<paragraph id="H68B65C8664994A93B549441F55904535"><enum>(1)</enum><header>In
general</header><text display-inline="yes-display-inline">Section 414 is
amended by adding at the end the following new subsection:</text>
<quoted-block display-inline="no-display-inline" id="H54EEFF5B864142ABA26DBED5A4C2C319" style="OLC">
<subsection id="HC43BA7365ABF405AB26609D44A2CA6E9"><enum>(z)</enum><header>Certain plan
transfers and mergers</header>
<paragraph id="H441633160F634820995E42942EF335D4"><enum>(1)</enum><header>In
general</header><text>Under rules prescribed by the Secretary, except as
provided in paragraph (2), no amount shall be includible in gross income by
reason of—</text>
<subparagraph id="H51FCEDC79EE14F1E94A28BE68E24871E"><enum>(A)</enum><text>a transfer of all
or a portion of the account balance of a participant or beneficiary, whether or
not vested, from a plan described in section 401(a) or an annuity contract
described in section 403(b), which is a church plan described in section 414(e)
to an annuity contract described in section 403(b), if such plan and annuity
contract are both maintained by the same church or convention or association of
churches,</text>
</subparagraph><subparagraph id="H491DC972033442F0A57F136F2FB05269"><enum>(B)</enum><text>a transfer of all
or a portion of the account balance of a participant or beneficiary, whether or
not vested, from an annuity contract described in section 403(b) to a plan
described in section 401(a) or an annuity contract described in section 403(b),
which is a church plan described in section 414(e), if such plan and annuity
contract are both maintained by the same church or convention or association of
churches, or</text>
</subparagraph><subparagraph id="H47C53FC725D240A19E2AEF3B2ABDA12F"><enum>(C)</enum><text>a merger of a plan
described in section 401(a), or an annuity contract described in section
403(b), which is a church plan described in section 414(e) with an annuity
contract described in section 403(b), if such plan and annuity contract are
both maintained by the same church or convention or association of
churches.</text>
</subparagraph></paragraph><paragraph id="HBDD60BE9EAFE432BACE94E8E197D3CA1"><enum>(2)</enum><header>Limitation</header><text>Paragraph
(1) shall not apply to a transfer or merger unless the participant’s or
beneficiary's benefit immediately after the transfer or merger is equal to or
greater than the participant’s or beneficiary's benefit immediately before the
transfer or merger.</text>
</paragraph><paragraph id="HF0DE77D8A83A45DB9BC1955FF8BA17D2"><enum>(3)</enum><header>Qualification</header><text display-inline="yes-display-inline">A plan or annuity contract shall not fail
to be considered to be described in sections 401(a) or 403(b) merely because
such plan or account engages in a transfer or merger described in this
subsection.</text>
</paragraph><paragraph id="HFCF50005DFC84BA391755197BA16051D"><enum>(4)</enum><header>Definitions</header><text>For
purposes of this subsection:</text>
<subparagraph id="HA9DE9B5955704BDDB532B64D77592443"><enum>(A)</enum><header>Church</header><text>The
term <term>church</term> includes an organization described in subparagraph (A)
or (B)(ii) of subsection (e)(3).</text>
</subparagraph><subparagraph id="H8F041D1E0A5D456DA9B237A5DFBF4E51"><enum>(B)</enum><header>Annuity
contract</header><text display-inline="yes-display-inline">The term
<term>annuity contract</term> includes a custodial account described in section
403(b)(7) and a retirement income account described in section
403(b)(9).</text>
</subparagraph></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph><paragraph id="HFC7BBF4EE430418D88D0F7421FFCA13F"><enum>(2)</enum><header>Effective
date</header><text>The amendment made by this subsection shall apply to
transfers or mergers occurring after the date of the enactment of this
Act.</text>
</paragraph></subsection><subsection id="H54E9E477BF2E42448C5EBC45B3533400"><enum>(e)</enum><header>Investments by
church plans in collective trusts</header>
<paragraph id="H71B2AB0C213749AEA12BC2D3DDC18766"><enum>(1)</enum><header>In
general</header><text display-inline="yes-display-inline">In the case
of—</text>
<subparagraph id="HC0BB05C9473248D796E073935A815461"><enum>(A)</enum><text display-inline="yes-display-inline">a church plan (as defined in section 414(e)
of the Internal Revenue Code 1986), including a plan described in section
401(a) of such Code and a retirement income account described in section
403(b)(9) of such Code, and</text>
</subparagraph><subparagraph id="H4FB6700339CE40F3B94783893A78729C"><enum>(B)</enum><text display-inline="yes-display-inline">an organization described in section
414(e)(3)(A) of such Code the principal purpose or function of which is the
administration of such a plan or account,</text>
</subparagraph><continuation-text continuation-text-level="paragraph">the assets
of such plan, account, or organization (including any assets otherwise
permitted to be commingled for investment purposes with the assets of such a
plan, account, or organization) may be invested in a group trust otherwise
described in Internal Revenue Service Revenue Ruling 81–100 (as modified by
Internal Revenue Service Revenue Rulings 2004–67 and 2011–1), or any subsequent
revenue ruling that supersedes or modifies such revenue ruling, without
adversely affecting the tax status of the group trust, such plan, account, or
organization, or any other plan or trust that invests in the group
trust.</continuation-text></paragraph><paragraph commented="no" display-inline="no-display-inline" id="H6773AA59993549CDB8F9ED4D0E54F696"><enum>(2)</enum><header>Effective
date</header><text>This subsection shall apply to investments made after the
date of the enactment of this Act.</text>
</paragraph></subsection></section><section display-inline="no-display-inline" id="H2191C8F593154D218EC21DB475B0665A" section-type="subsequent-section"><enum>407.</enum><header>Protecting older,
longer service participants</header>
<subsection id="HE2ACA70DC0AC4F0485D21B94FD7FAF6A"><enum>(a)</enum><header>In
general</header><text>Paragraph (4) of section 401(a) of the Internal Revenue
Code of 1986 is amended to read as follows:</text>
<quoted-block id="HED984A821B8944098E1C51C4A24A92C7" style="OLC">
<paragraph id="HEF1EE670C0054F9289D8213B2E84E69A"><enum>(4)</enum><header>Nondiscrimination</header>
<subparagraph id="HC681EE1857DA4DC891C241D0AD5A5DC9"><enum>(A)</enum><header>In
general</header><text>A trust shall not constitute a qualified trust under this
section unless the contributions or benefits provided under the plan do not
discriminate in favor of highly compensated employees (within the meaning of
section 414(q)). For purposes of this paragraph, there shall be excluded from
consideration employees described in section 410(b)(3) (A) and (C).</text>
</subparagraph><subparagraph id="H830BEAF726ED4CD880FE60849D7F9318"><enum>(B)</enum><header>Protection of
older, longer service participants in defined benefit plans</header>
<clause display-inline="no-display-inline" id="H883E88AFADA24DB687E47A7736F64D8C"><enum>(i)</enum><subclause commented="no" display-inline="yes-display-inline" id="H93647DDE678A4B759A6305AF70822FD8"><enum>(I)</enum><text display-inline="yes-display-inline">A plan described in subclause (ii) shall
not fail to satisfy this paragraph by reason of—</text>
<item id="H71CD4E3CB5F44534B59466978EDFCF2D" indent="up1"><enum>(aa)</enum><text>the composition of the closed class
of participants described in subclause (II), or</text>
</item><item id="H56267DFD8C914236BE5200A0860003E8" indent="up1"><enum>(bb)</enum><text>the benefits, rights, or features
provided to such closed class.</text>
</item></subclause><subclause id="HFF9EAC51D514460791770D120F3DF00F" indent="up1"><enum>(II)</enum><text>A plan is described in this subclause
if—</text>
<item id="HD32DC9621F624D5EBFBDCE1927DADA75"><enum>(aa)</enum><text>the plan provides benefits, rights,
or features to a closed class of participants,</text>
</item><item id="H4E478606F14846998DC498120B141071"><enum>(bb)</enum><text>such closed class and such benefits,
rights, and features satisfy the requirements of subparagraph (A) as of the
date that the class was closed, and</text>
</item><item id="HC6603CBBAB2B40A2B46D6F043A2F8610"><enum>(cc)</enum><text>after the date as of which the class
was closed, any plan amendments that modify the closed class or of the
benefits, rights, and features provided to such closed class satisfy
subparagraph (A).</text>
</item></subclause></clause><clause display-inline="no-display-inline" id="H1C1749F323A846CF87744F354A589D87"><enum>(ii)</enum><subclause commented="no" display-inline="yes-display-inline" id="H7CBCD723FDB0476F93EAE14090BE7567"><enum>(I)</enum><text>A defined contribution
plan described in subclause (II) shall not fail to satisfy this paragraph by
reason of—</text>
<item id="H393F3FD9C9334C90AE7DA733B48E29AB" indent="up1"><enum>(aa)</enum><text>the composition of the closed class
of participants described in subclause (II), or</text>
</item><item id="H47B9E8B0D38C441982398C78F55BF52B" indent="up1"><enum>(bb)</enum><text>the allocations, benefits, rights, or
features provided to such closed class.</text>
</item></subclause><subclause id="HE2B6EF2171D04895803DA5AF0EA2C8AC" indent="up1"><enum>(II)</enum><text>A defined contribution plan is described
in this subclause if—</text>
<item id="H01113BD941434A7FB53D2AC7FF89454A"><enum>(aa)</enum><text>the plan provides make-whole
contributions to a closed class of participants whose defined benefit plan
accruals have been reduced or eliminated,</text>
</item><item id="HBD32D97EF1DD463799241D674A788B9C"><enum>(bb)</enum><text>the benefits, rights, and features
provided to such closed class satisfy the requirements of subparagraph (A) as
of the date that the class of participants was closed, taking into account only
such closed class,</text>
</item><item id="HB1DA4183A9D9418B937525811CB2B5D1"><enum>(cc)</enum><text>such closed class of participants
satisfies section 410(b)(2)(A)(i) as of the date that the class of participants
was closed, and</text>
</item><item id="H07BDF8AF071C40C79496D328B771BC8C"><enum>(dd)</enum><text>after the date as of which the class
was closed, any plan amendments that modify the closed class or the
allocations, benefits, rights, and features provided to such closed class
satisfy section 401(a)(4).</text>
</item></subclause></clause></subparagraph><subparagraph id="H893C531E88F641669A11AB04E31F38B8"><enum>(C)</enum><header>Make-whole
contributions</header><text>For purposes of this paragraph, the term
<term>make-whole contributions</term> means allocations for each employee in
the class that are reasonably calculated, in a consistent manner, to replace
some or all of the retirement benefits that the employee would have received
under the defined benefit plan and any other plan or arrangement if the
employee had continued to benefit at the same level under such defined benefit
plan and such other plan or arrangement.</text>
</subparagraph><subparagraph id="HC426306089DE4BFABE8DB1538D1D4B72"><enum>(D)</enum><header>Rules</header><text>The
Secretary may prescribe rules designed to prevent abuse of the plan designs
otherwise permitted by reason of subparagraph (B). Such rules shall be directed
towards abuses under which the defined benefit plan was established within a
specified period prior to the date that—</text>
<clause id="H15CA997CC0C34836BEED445E5BD5BF5E"><enum>(i)</enum><text display-inline="yes-display-inline">the class of participants described in
paragraphs (1) and (2)(A) is closed, or</text>
</clause><clause id="H899C875457B24BAF8DD8082742C6C390"><enum>(ii)</enum><text>the defined
benefit plan accruals have been reduced or eliminated, in the case of the
make-whole contributions described in paragraph
(2).</text>
</clause></subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="HA642AD2F07954F8BBB3AE7B2474378B7"><enum>(b)</enum><header>Participation
requirements</header><text>Paragraph (26) of section 401(a) of the Internal
Revenue Code of 1986 is amended by adding at the end the following new
subparagraph:</text>
<quoted-block id="HB13AB62F022742719FB21116D760EBC5" style="OLC">
<subparagraph id="H1C2D7A0D7D264859A2E68EE58F8F9AC6"><enum>(I)</enum><header>Protected
participants</header><text>A plan described in this subparagraph shall be
deemed to satisfy the requirements of subparagraph (A). A plan is described in
this paragraph if—</text>
<clause id="H60D05EB3869646438734BA4D1A02373A"><enum>(i)</enum><text>the plan is
amended to—</text>
<subclause id="H2BE9B38D9F274E30951BA99AE99B4362"><enum>(I)</enum><text>cease all benefit
accruals, or</text>
</subclause><subclause id="H83F9AF980ED448EDAF0B32C7BB8BACB7"><enum>(II)</enum><text>provide future
benefit accruals only to a closed class of participants, and</text>
</subclause></clause><clause id="H21E2153EA64A47E48C75B82B6B5C7407"><enum>(ii)</enum><text>the plan
satisfies subparagraph (A) (without regard to this subparagraph) as of the
effective date of the amendment.</text>
</clause><continuation-text continuation-text-level="subparagraph">The
Secretary may prescribe such rules as are necessary or appropriate to fulfill
the purposes of this subparagraph, including prevention of abuse of this
subparagraph in the case of plans established within a specific period prior to
the effective date of the
amendment.</continuation-text></subparagraph><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="H25379A00A3B54905B3E9674346C8BEA1"><enum>(c)</enum><header>Effective
date</header><text display-inline="yes-display-inline">The amendments made by
this section shall take effect on the date of the enactment of this Act,
without regard to whether any plan modifications referenced in such amendments
are adopted or effective before, on, or after such date of enactment.</text>
</subsection></section><section id="H053F5B918DAC4447BC3FB8E864860E69"><enum>408.</enum><header>Review and
report to the Congress relating to reporting and disclosure
requirements</header>
<subsection id="H1CD37DEE0A484393BA2155EF401AD94F"><enum>(a)</enum><header>Study</header><text>As
soon as practicable after the date of the enactment of this Act, the Secretary
of Labor, the Secretary of the Treasury, and the Pension Benefit Guaranty
Corporation shall review the reporting and disclosure requirements of—</text>
<paragraph id="H8D143B35FD9F43E19F4062950858FD79"><enum>(1)</enum><text>title I of the
Employee Retirement Income Security Act of 1974 applicable to pension plans (as
defined in section 3(2) of such Act), and</text>
</paragraph><paragraph id="H400E05FE63E241C19B043C2D770DAE8E"><enum>(2)</enum><text>the Internal
Revenue Code of 1986 applicable to qualified retirement plans (as defined in
section 4974(c) of such Code without regard to paragraphs (4) and (5)
thereof).</text>
</paragraph></subsection><subsection id="H5D15EC100A6C410982B7EE21D964C723"><enum>(b)</enum><header>Report</header><text>Not
later than 18 months after the date of the enactment of this Act, the Secretary
of Labor, the Secretary of the Treasury, and the Pension Benefit Guaranty
Corporation, jointly, shall make such recommendations as may be appropriate to
the appropriate committees of the Congress to consolidate, simplify,
standardize, and improve the applicable reporting and disclosure requirements
so as to simplify reporting for plans referenced to in subsection (a) and
ensure that needed understandable information is provided to participants and
beneficiaries of such plans.</text>
</subsection></section><section id="H89F0DCDCB85446E58E4EA980E7C8693D" section-type="subsequent-section"><enum>409.</enum><header>Consolidation of
defined contribution plan notices</header>
<subsection id="H033714EE55734F589636D298F0B1ECAF"><enum>(a)</enum><header>In
general</header>
<paragraph id="H8B7467F966DE499FAC9C1B46D6CB5541"><enum>(1)</enum><text display-inline="yes-display-inline">Not later than 18 months after the date of
the enactment of this Act, the Secretary of Labor and the Secretary of the
Treasury shall adopt final regulations providing that a plan may, but is not
required to, consolidate two or more of the notices required under sections
404(c)(5)(B) and 514(e)(3) of the Employee Retirement Income Security Act of
1974 (29 U.S.C. 1144(e)(3)), sections 401(k)(12)(D), 401(k)(13)(E), and
414(w)(4) of the Internal Revenue Code of 1986, and section 2550.404a–5 of
title 29, Code of Federal Regulations (29 C.F.R. 2550.404a–5) into a single
notice or, to the extent provided by such regulations, consolidate such notices
with the summary plan description or summary of material modifications
described in section 104(b) of the Employee Retirement Income Security Act of
1974 (29 U.S.C. 1024(b)), so long as the combined notice, summary plan
description or summary of material modifications includes the required content,
clearly identifies the issues addressed therein, and is provided at the time
and with the frequency required for each such notice.</text>
</paragraph><paragraph id="HE2DD380E1C6B49B992205189BA4DC70F"><enum>(2)</enum><text>The Secretary of
Labor and the Secretary of the Treasury may include in such regulations rules
to ensure that, to the extent such notices are consolidated with the summary
plan description or summary of material modifications, the presentation,
placement, or prominence of the information in such notices shall not have the
effect of failing to inform participants and beneficiaries regarding the
information in such notices.</text>
</paragraph></subsection><subsection id="H48827C0D10594E129D2E146538C09B6B"><enum>(b)</enum><header>Provision of
annual notices without regard to plan year</header>
<paragraph id="H9FD5F783F804478F8B478559368EA271"><enum>(1)</enum><text>Clause (i) of
section 404(c)(5)(B) of the Employee Retirement Income Security Act of 1974 (29
U.S.C. 1104(c)(5)(B)) is amended—</text>
<subparagraph id="HEE0C7CD70B0148E68204535851C59C11"><enum>(A)</enum><text>in subclause (I)
by striking <quote>within a reasonable period of time before each plan
year,</quote> and inserting <quote>within a reasonable period before the
arrangement described in subparagraph (A) applies to such participant or
beneficiary, and thereafter at least once within any 12-month period (without
regard to the plan year) during which such arrangement applies,</quote>,
and</text>
</subparagraph><subparagraph id="H743091BCDA1844E491888F7567012D58"><enum>(B)</enum><text>in subclause (II)
by striking <quote>and before the beginning of the plan year</quote>.</text>
</subparagraph></paragraph><paragraph id="H882DC7886438444EBD59452E332A6BFA"><enum>(2)</enum><text>Subparagraph (A)
of section 514(e)(3) of the Employee Retirement Income Security Act of 1974 (29
U.S.C. 1144(e)(3)(A)) is amended by striking <quote>, within a reasonable
period before such plan year, provide to each participant to whom the
arrangement applies for such plan year</quote> and inserting <quote>, within a
reasonable period before the arrangement applies to a participant or
beneficiary, and thereafter at least once within any 12-month period (without
regard to the plan year) during which such arrangement applies,
provide</quote>.</text>
</paragraph><paragraph id="H56E771FB870D48A396CD6C35AB93D89F"><enum>(3)</enum><text>Clause (i) of
section 401(k)(13)(E) of the Internal Revenue Code of 1986 is amended by
striking <quote>, within a reasonable period before each plan year, each
employee eligible to participate in the arrangement for such year
receives</quote> and inserting <quote>each employee eligible to participate in
the arrangement receives, within a reasonable period before the employee
becomes eligible, and thereafter within a reasonable period before each plan
year during which such arrangement applies,</quote>.</text>
</paragraph><paragraph id="H8FD0007A8E47492D9EBE31442EC61548"><enum>(4)</enum><text>Subparagraph (D)
of section 401(k)(12) of the Internal Revenue Code of 1986 is amended by
striking <quote>, within a reasonable period before any year, given written
notice</quote> and inserting <quote>given written notice, within a reasonable
period before the employee becomes eligible, and thereafter within a reasonable
period before each plan year during which such arrangement
applies,</quote>.</text>
</paragraph><paragraph id="HDDEFC23C97654BA69B03DFD15260F161"><enum>(5)</enum><text>Subparagraph (A)
of section 414(w)(4) of the Internal Revenue Code of 1986 is amended by
striking <quote>, within a reasonable period before each plan year, give to
each employee to whom an arrangement described in paragraph (3) applies for
such plan year</quote> and inserting <quote>, within a reasonable period before
an arrangement described in paragraph (3) applies to an employee, and
thereafter at least once within any 12-month period (without regard to the plan
year) during which such arrangement applies, give to each such
employee</quote>.</text>
</paragraph></subsection></section>