[Congressional Bills 115th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3910 Introduced in House (IH)]
<DOC>
115th CONGRESS
1st Session
H. R. 3910
To amend the Internal Revenue Code of 1986 to make lifetime income and
managed account options of defined contribution retirement savings
plans portable.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
October 2, 2017
Mr. Neal (for himself and Mr. Bishop of Michigan) introduced the
following bill; which was referred to the Committee on Ways and Means
_______________________________________________________________________
A BILL
To amend the Internal Revenue Code of 1986 to make lifetime income and
managed account options of defined contribution retirement savings
plans portable.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. PORTABILITY OF LIFETIME INCOME AND MANAGED ACCOUNT OPTIONS.
(a) In General.--Subsection (a) of section 401 of the Internal
Revenue Code of 1986 is amended by inserting after paragraph (37) the
following new paragraph:
``(38) Portability of lifetime income and managed account
options.--
``(A) In general.--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--
``(i) qualified distributions of a lifetime
income investment or a managed account
investment, or
``(ii) distributions of a lifetime income
investment in the form of a qualified plan
distribution annuity contract,
on or after the date that is 90 days prior to the date
on which such lifetime income investment or such
managed account investment is no longer authorized to
be held as an investment option under the plan except
as may otherwise be provided by regulations.
``(B) Definitions.--For purposes of this
subsection--
``(i) the term `qualified distribution'
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), and in the case of a managed
account investment, the eligible retirement
plan must be maintained by the account manager
of such managed account investment,
``(ii) the term `lifetime income
investment' means an investment option that is
designed to provide an employee with election
rights--
``(I) that are not uniformly
available with respect to other
investment options under the plan, and
``(II) 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),
``(iii) the term `lifetime income feature'
means--
``(I) 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
``(II) 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,
``(iv) the term `qualified plan
distribution annuity contract' 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),
``(v) the term `managed account investment'
means an investment option under which the
assets of the employee's individual account are
managed by an account manager, applying
generally accepted investment theories, to
achieve varying degrees of long-term
appreciation and capital preservation based on
the employee's age, target retirement date or
life expectancy,
``(vi) the term `account manager' means an
investment manager (within the meaning of
section 3(38) of the Employee Retirement Income
Security Act), and
``(vii) a lifetime income investment or
managed account investment is treated as no
longer authorized to be held as an investment
under the plan if such treatment applies to all
plan participants or to a class of such
participants, as determined in any reasonable
manner.''.
(b) Cash or Deferred Arrangement.--Clause (i) of section
401(k)(2)(B) of such Code is amended by striking ``or'' at the end of
subclause (IV), by striking ``and'' at the end of subclause (V) and
inserting ``or'', and by adding at the end of clause (i) the following:
``(VI) with respect to amounts
invested in a lifetime income
investment (as defined in section
401(a)(38)(B)(ii)) or a managed account
investment (as defined in section
401(a)(38)(B)(v)), the date that is 90
days prior to the date that such
lifetime income investment or such
managed account investment may no
longer be held as an investment option
under the plan (within the meaning of
section 401(a)(38)(B)(vii)), 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, in the
case of a lifetime income investment, a
qualified plan distribution annuity
contract (as defined in section
401(a)(38)(B)(iv)), and''.
(c) Section 403(b) Plans.--
(1) Annuity contracts.--Paragraph (11) of section 403(b) of
such Code is amended by striking ``or'' at the end of
subparagraph (B), by striking the period at the end of
subparagraph (C), and by inserting ``, or'', and by adding at
the end the following:
``(D) with respect to amounts invested in a
lifetime income investment (as defined in section
401(a)(38)(B)(ii)) or a managed account investment (as
defined in section 401(a)(38)(B)(v)), the date that is
90 days prior to the date that such lifetime income
investment or such managed account investment may no
longer be held as an investment option under the plan
(within the meaning of section 401(a)(38)(B)(vii)),
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, in the case of
a lifetime income investment, a qualified plan
distribution annuity contract (as defined in section
401(a)(38)(B)(iv)).''.
(2) Custodial accounts.--Clause (ii) of section
403(b)(7)(A) of such Code is amended to read as follows:
``(ii) 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--
``(I) the employee dies,
``(II) the employee attains age
59\1/2\,
``(III) the employee has a
severance from employment,
``(IV) the employee becomes
disabled (within the meaning of section
72(m)(7)),
``(V) 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
``(VI) with respect to amounts
invested in a lifetime income
investment (as defined in section
401(a)(38)(B)(ii)) or a managed account
investment (as defined in section
401(a)(38)(B)(v)), the date that is 90
days prior to the date that such
lifetime income investment or such
managed account investment may no
longer be held as an investment option
under the plan (within the meaning of
section 401(a)(38)(B)(vii)), 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, in the
case of a lifetime income investment, a
qualified plan distribution annuity
contract (as defined in section
401(a)(38)(B)(iv)).''.
(d) Eligible Deferred Compensation Plans.--Subparagraph (A) of
section 457(d)(1) of such Code is amended by striking ``or'' at the end
of clause (ii), by inserting ``or'' at the end of clause (iii), and by
adding after clause (iii) the following:
``(iv) with respect to amounts invested in
a lifetime income investment (as defined in
section 401(a)(38)(B)(ii)) or a managed account
investment (as defined in section
401(a)(38)(B)(v)), the date that is 90 days
prior to the date that such lifetime income
investment or such managed account investment
may no longer be held as an investment option
under the plan (within the meaning of section
401(a)(38)(B)(vii)), 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, in the
case of a lifetime income investment, a
qualified plan distribution annuity contract
(as defined in section 401(a)(38)(B)(iv)),''.
(e) Effective Date.--The amendments made by this section shall
apply to plan years beginning after December 31, 2017.
<all>