[Congressional Bills 115th Congress]
[From the U.S. Government Publishing Office]
[S. 1076 Introduced in Senate (IS)]

<DOC>






115th CONGRESS
  1st Session
                                S. 1076

 To amend the Employee Retirement Income Security Act of 1974 and the 
Internal Revenue Code of 1986 to modify certain provisions relating to 
            multiemployer pensions, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                              May 9, 2017

  Mr. Sanders (for himself, Ms. Baldwin, Mr. Brown, Mr. Franken, Ms. 
Klobuchar, Mrs. McCaskill, Mr. Peters, Mr. Reed, Ms. Stabenow, and Mr. 
  Whitehouse) introduced the following bill; which was read twice and 
                  referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL


 
 To amend the Employee Retirement Income Security Act of 1974 and the 
Internal Revenue Code of 1986 to modify certain provisions relating to 
            multiemployer pensions, and for other purposes.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Keep Our Pension Promises Act''.

SEC. 2. RESTORING ANTI-CUTBACK PROVISIONS.

    Section 201 of the Multiemployer Pension Reform Act of 2014 
(division O of Public Law 113-235) and the amendments made by such 
section are repealed, and the Employee Retirement Income Security Act 
of 1974 and the Internal Revenue Code of 1986 shall be applied as if 
such section and amendments had never been enacted.

SEC. 3. PARTITIONS OF ELIGIBLE MULTIEMPLOYER PLANS.

    (a) In General.--Section 4233 of the Employee Retirement Income 
Security Act of 1974 (29 U.S.C. 1413), as amended by section 122 of the 
Multiemployer Pension Reform Act of 2014 (division O of Public Law 113-
235), is amended to read as follows:

``SEC. 4233. PARTITIONS OF ELIGIBLE MULTIEMPLOYER PLANS.

    ``(a)(1) Upon the application by the plan sponsor of an eligible 
multiemployer plan for a partition of the plan, the corporation may 
order a partition of the plan in accordance with this section. The 
corporation shall make a determination regarding the application, in 
accordance with regulations promulgated by the corporation, not later 
than 270 days after--
            ``(A) the date such application was filed; or
            ``(B) if later, the date such application was completed.
    ``(2) At least 14 days before submitting an application for 
partition of a plan under paragraph (1), the plan sponsor of the plan 
shall notify all participants and beneficiaries of such application, in 
the form and manner prescribed by regulations issued by the 
corporation.
    ``(b) For purposes of this section, a multiemployer plan is an 
eligible multiemployer plan if--
            ``(1) the plan is in critical status and is projected to 
        become insolvent within the meaning of section 4245--
                    ``(A) during the current plan year or any of the 14 
                succeeding plan years; or
                    ``(B) during the current plan year or any of the 19 
                succeeding plan years, if the plan has a ratio of 
                inactive participants to active participants that 
                exceeds 2 to 1 and the funded percentage of the plan is 
                less than 80 percent;
            ``(2) the corporation determines, after consultation with 
        the Participant and Plan Sponsor Advocate selected under 
        section 4004, that the plan sponsor has taken (or is taking 
        concurrently with an application for partition) all reasonable 
        measures described in section 432(e)(3)(A) of the Internal 
        Revenue Code of 1986, and has made (or is making) benefit 
        adjustments under section 432(e)(8) of such Code to reduce the 
        risk of insolvency;
            ``(3) 20 percent or more of the amount by which the 
        liabilities of the plan exceed the value of plan assets is 
        attributable to the service of participants whose employers--
                    ``(A) withdrew from the plan prior to the date of 
                enactment of the Keep Our Pension Promises Act; and
                    ``(B) failed to pay (or are delinquent with respect 
                to paying) the full amount of the employer's withdrawal 
                liability under section 4201(b)(1) or as otherwise 
                determined under an agreement with the plan;
            ``(4) the corporation reasonably expects that--
                    ``(A) a partition of the plan will reduce the 
                corporation's expected long-term loss with respect to 
                the plan; and
                    ``(B) a partition of the plan is necessary for the 
                plan to remain or become solvent; and
            ``(5) the corporation certifies to Congress that after 
        partition the corporation will continue to have the ability to 
        meet existing financial assistance obligations to other plans 
        (including any liabilities associated with multiemployer plans 
        that are insolvent or that are projected to become insolvent 
        within 10 years).
    ``(c)(1) A partition under this section shall consist of a transfer 
to the plan created by the partition order of benefits to which 
eligible participants and beneficiaries were entitled under the plan 
that was partitioned, in an amount not to exceed the amount that would 
be guaranteed under section 4022A if the plan were insolvent as of the 
date of the partition order.
    ``(2) The corporation's partition order shall provide for an annual 
transfer by the corporation to the plan created by the partition order 
of an amount equal to the yearly benefits that would be guaranteed 
under section 4022A to the eligible participants and beneficiaries if 
the plan were insolvent as of the date of the partition order.
    ``(3)(A) Where practicable, the initial transfer in accordance with 
paragraph (2) shall be completed at least 60 days prior to the plan 
year that immediately follows the partition start date. The partition 
order shall require that the initial transfer be sufficient to satisfy 
the guaranteed benefits in the first plan year of the partitioned plan.
    ``(B) Subsequent transfers in accordance with paragraph (2) shall 
be completed at least 60 days prior to the first day of each succeeding 
plan year.
    ``(d)(1)(A) The plan created by the partition order is a successor 
plan to which section 4022A applies.
    ``(B) At the discretion of the plan sponsor, the plan created by 
the partition order may remain a part of the plan that was partitioned 
or be maintained as a separate plan.
    ``(2)(A) The plan sponsor and the administrator of an eligible 
multiemployer plan prior to the partition shall be the plan sponsor and 
the administrator, respectively, of the plan created by the partition 
order, and shall adopt reasonable procedures to reduce administrative 
expenses and to coordinate benefit payments and communications with the 
participants and beneficiaries in the plan created by the partition 
order.
    ``(B) Benefit payments equal to the amount of an eligible 
participant or beneficiary's guaranteed benefits shall be paid to such 
participant or beneficiary and may be--
            ``(i) paid separately by the plan created by the partition 
        order; or
            ``(ii) paid in a single, monthly payment by the plan that 
        was partitioned.
    ``(3) In the event an employer withdraws from the plan that was 
partitioned, withdrawal liability shall be computed under section 4201 
with respect to both the plan that was partitioned and the plan created 
by the partition order.
    ``(e) In addition to the payment of guaranteed benefits under 
subsection (d)(2)(B), each eligible participant or beneficiary of the 
plan created by the partition order shall receive a monthly benefit for 
each month the benefit is in pay status in an amount that--
            ``(1) the corporation, in consultation with the Participant 
        and Plan Sponsor Advocate, determines to be fair to the plan, 
        the participant or beneficiary, the employers, and the 
        corporation; and
            ``(2) when aggregated with the payment under subsection 
        (d)(2)(B), results in a monthly benefit that is at least equal 
        to the lesser of--
                    ``(A) the monthly nonforfeitable benefit for such 
                participant or beneficiary payable under the plan that 
                was partitioned; or
                    ``(B) 80 percent of the maximum benefit commencing 
                at age 65 guaranteed under section 4022(a) for 
                participants and beneficiaries in terminated single 
                employer plans, unreduced for early retirement.
Such monthly benefit may be combined with the monthly payment under 
subsection (d)(2)(B)(ii).
    ``(f)(1) The corporation shall establish a legacy fund for the 
purposes of funding the administrative and benefit costs to the 
corporation arising from partitions under this section, as described in 
paragraph (2).
    ``(2) Any administrative and benefit costs to the corporation 
arising from a partition ordered under this section in excess of 
amounts available in such legacy fund shall be paid from the fund for 
basic benefits guaranteed for multiemployer plans.
    ``(g) Only one partition order shall be issued with respect to each 
eligible multiemployer plan.
    ``(h) For purposes of this subsection, the term `eligible 
participant or beneficiary' means a participant or beneficiary of an 
eligible multiemployer plan that is partitioned in accordance with a 
petition order under this section, and who is an employee or 
beneficiary of an employee of an employer that is described in 
subsection (b)(3).
    ``(i) Not later than 14 days after the issuance of a partition 
order under this section, the corporation shall provide notice of such 
order to the Committee on Finance of the Senate, the Committee on 
Health, Education, Labor, and Pensions of the Senate, the Committee on 
Education and the Workforce of the House of Representatives, the 
Committee on Ways and Means of the House of Representatives, and to all 
eligible participants or beneficiaries whose guaranteed benefits will 
be paid directly or indirectly by the plan created by the partition 
order.''.
    (b) Effective Date.--The amendments made by subsection (a) shall 
apply with respect to plan years beginning after the date of enactment 
of this Act.
    (c) Transfers to Legacy Fund.--The Secretary of the Treasury shall 
from time to time transfer from the general fund of the Treasury to the 
legacy fund established under section 4233(f)(1) of the Employee 
Retirement Income Security Act of 1974 (29 U.S.C. 1413(f)(1)) (as 
amended by subsection (a)) amounts equal to the increase in revenues to 
the Treasury by reason of the amendments made by sections 6 and 7 of 
this Act.
    (d) Transfers Between Funds of the PBGC.--Section 4005 of the 
Employee Retirement Income Security Act of 1974 (29 U.S.C. 1305) is 
amended by adding at the end the following:
    ``(i)(1) An eighth fund is established under section 4233(f) and 
credited with the amounts described in section 3(c) of the Keep Our 
Pension Promises Act.
    ``(2) Notwithstanding subsection (g), the corporation may transfer 
amounts into the legacy fund established under section 4233(f)(1) from 
other funds established under this section, as the corporation 
determines appropriate.''.

SEC. 4. EMPLOYER WITHDRAWALS RELATING TO MULTIEMPLOYER PLANS.

    The matter preceding paragraph (1) of section 4225(b) of the 
Employee Retirement Income Security Act of 1974 (29 U.S.C. 1405(b)) is 
amended by inserting ``, including an employer undergoing liquidation 
under chapter 7 of title 11, United States Code, or similar provisions 
of State law,'' after ``dissolution,''.

SEC. 5. PRIORITIES OF CLAIMS IN BANKRUPTCY.

    (a) In General.--Section 507(a) of title 11, United States Code, is 
amended--
            (1) by redesignating paragraphs (1) through 10 as 
        paragraphs (2) through (11), respectively;
            (2) by inserting before paragraph (2) (as redesignated) the 
        following:
            ``(1) First, withdrawal liability determined under part 1 
        of subtitle E of title IV of the Employee Retirement Income 
        Security Act of 1974 (29 U.S.C. 1381 et seq.).'';
            (3) in the matter preceding subparagraph (A) of paragraph 
        (2) (as redesignated), by striking ``First:'' and inserting 
        ``Second:'';
            (4) in paragraph (3) (as redesignated), by striking 
        ``Second,'' and inserting ``Third,'';
            (5) in paragraph (4) (as redesignated), by striking 
        ``Third,'' and inserting ``Fourth,'';
            (6) in the matter preceding subparagraph (A) of paragraph 
        (5) (as redesignated), by striking ``Fourth,'' and inserting 
        ``Fifth,'';
            (7) in the matter preceding subparagraph (A) of paragraph 
        (6) (as redesignated), by striking ``Fifth,'' and inserting 
        ``Sixth,'';
            (8) in the matter preceding subparagraph (A) of paragraph 
        (7) (as redesignated), by striking ``Sixth,'' and inserting 
        ``Seventh,'';
            (9) in paragraph (8) (as redesignated), by striking 
        ``Seventh,'' and inserting ``Eighth,'';
            (10) in the matter preceding subparagraph (A) of paragraph 
        (9) (as redesignated), by striking ``Eighth,'' and inserting 
        ``Ninth,'';
            (11) in paragraph (10) (as redesignated), by striking 
        ``Ninth,'' and inserting ``Tenth,''; and
            (12) in paragraph (11) (as redesignated), by striking 
        ``Tenth,'' and inserting ``Eleventh,''.
    (b) Technical and Conforming Amendments.--
            (1) Section 502(i) of title 11, United States Code, is 
        amended by striking ``section 507(a)(8)'' and inserting 
        ``section 507(a)(9)''.
            (2) Section 503(b)(1)(B)(i) of title 11, United States 
        Code, is amended by striking ``section 507(a)(8)'' and 
        inserting ``section 507(a)(9)''.
            (3) Section 507(d) of title 11, United States Code, is 
        amended by striking ``(a)(1), (a)(4), (a)(5), (a)(6), (a)(7), 
        (a)(8), or (a)(9)'' and inserting ``(a)(2), (a)(5), (a)(6), 
        (a)(7), (a)(8), (a)(9), or (a)(10)''.
            (4) Section 523(A) of title 11, United States Code, is 
        amended by striking ``section 507(a)(3) or 507(a)(8)'' and 
        inserting ``section 507(a)(4) or 507(a)(9)''.
            (5) Section 724 of title 11, United States Code, is 
        amended--
                    (A) in subsection (b)(2), by striking ``section 
                507(a)(1)(C) or 507(a)(2)'' and inserting ``section 
                507(a)(2)(C) or 507(a)(3)''; and
                    (B) in subsection (f)--
                            (i) in paragraph (1), by striking ``section 
                        507(a)(4)'' and inserting ``section 
                        507(a)(5)''; and
                            (ii) in paragraph (2), by striking 
                        ``section 507(a)(5)'' and inserting ``section 
                        507(a)(6)''.
            (6) Section 726(b) of title 11, United States Code, is 
        amended by striking ``paragraph (1), (2), (3), (4), (5), (6), 
        (7), (8), (9), or (10) of section 507(a)'' and inserting 
        ``paragraphs (2) through (11) of section 507(a)''.
            (7) Section 752(a) of title 11, United States Code, is 
        amended by striking ``section 507(a)(2)'' and inserting 
        ``section 507(a)(3)''.
            (8) Section 766 of title 11, United States Code, is 
        amended--
                    (A) in subsection (h), by striking ``section 
                507(a)(2)'' and inserting ``section 507(a)(3)''; and
                    (B) in subsection (i)--
                            (i) in paragraph (1), by striking ``section 
                        507(a)(2)'' and inserting ``section 
                        507(a)(3)''; and
                            (ii) in paragraph (2), by striking 
                        ``section 507(a)(2)'' and inserting ``section 
                        507(a)(3)''.
            (9) Section 901 of title 11, United States Code, is amended 
        by striking ``507(a)(2)'' and inserting ``507(a)(3)''.
            (10) Section 943(b)(5) of title 11, United States Code, is 
        amended by striking ``section 507(a)(2)'' and inserting 
        ``section 507(a)(3)''.
            (11) Section 1123(a)(1) of title 11, United States Code, is 
        amended by striking ``section 507(a)(2), 507(a)(3), or 
        507(a)(8)'' and inserting ``section 507(a)(3), 507(a)(4), or 
        507(a)(9)''.
            (12) Section 1129(a)(9) of title 11, United States Code, is 
        amended--
                    (A) in subparagraph (A), by striking ``section 
                507(a)(3) or 507(a)(4)'' and inserting ``section 
                507(a)(4) or 507(a)(5)'';
                    (B) in the matter preceding clause (i) of 
                subparagraph (B), by striking ``section 507(a)(1), 
                507(a)(4), 507(a)(5), 507(a)(6), or 507(a)(7)'' and 
                inserting ``section 507(a)(2), 507(a)(5), 507(a)(6), 
                507(a)(7), or 507(a)(8)'';
                    (C) in the matter preceding clause (i) of 
                subparagraph (C), by striking ``section 507(a)(8)'' and 
                inserting ``section 507(a)(9)''; and
                    (D) in subparagraph (D), by striking ``section 
                507(a)(8)'' and inserting ``section 507(a)(9)''.
            (13) Section 1222(a)(4) of title 11, United States Code, is 
        amended by striking ``section 507(a)(1)(B)'' and inserting 
        ``507(a)(2)(B)''.
            (14) Section 1226(b)(1) of title 11, United States Code, is 
        amended by striking ``section 507(a)(2)'' and inserting 
        ``section 507(a)(3)''.
            (15) Section 1322(a)(4) of title 11, United States Code, is 
        amended by striking ``section 507(a)(1)(B)'' and inserting 
        ``section 507(a)(2)(B)''.
            (16) Section 1326(b)(1) of title 11, United States Code, is 
        amended by striking ``section 507(a)(2)'' and inserting 
        ``section 507(a)(3)''.
            (17) Section 1328(a)(2) of title 11, United States Code, is 
        amended by striking ``section 507(a)(8)(C)'' and inserting 
        ``section 507(a)(9)(C)''.

SEC. 6. LIMITATION OF NONRECOGNITION OF LIKE-KIND EXCHANGES.

    (a) In General.--Paragraph (2) of section 1031(a) of the Internal 
Revenue Code of 1986 is amended--
            (1) by redesignating subparagraphs (A), (B), (C), (D), (E), 
        and (F) as clauses (i), (ii), (iii), (iv), (v), and (vi), and 
        by moving such clauses 2 ems to the right,
            (2) by moving the flush language after the first sentence 2 
        ems to the right,
            (3) by striking ``(2) Exception.--This subsection'' and 
        inserting ``(2) Exceptions.--
                    ``(A) Excluded property.--This subsection'', and
            (4) by adding at the end the following new subparagraph:
                    ``(B) Dollar limitation for exchanges of real 
                property.--
                            ``(i) In general.--Paragraph (1) shall not 
                        apply so much of the gain which, but for such 
                        paragraph, would be recognized by the taxpayer 
                        with respect to real property exchanged during 
                        the taxable year as exceeds $1,000,000.
                            ``(ii) Special rules for partnerships and 
                        s-corporations.--In the case of a pass-through 
                        entity, clause (i) shall be applied at both the 
                        entity and at the partner or owner level.
                            ``(iii) Aggregation rules.--For purposes of 
                        this subparagraph--
                                    ``(I) Family members.--Individuals 
                                who are spouses or who bear any of the 
                                relationships described in section 
                                152(d)(2) to each other shall be 
                                treated as 1 taxpayer (without regard 
                                to whether spouses file a joint 
                                return).
                                    ``(II) Corporations and other 
                                entities.--All persons treated as a 
                                single employer under subsection (a) or 
                                (b) of section 52 or subsection (m) or 
                                (o) of section 414 shall be treated as 
                                1 person.
                            ``(iv) Adjustment for inflation.--In the 
                        case of exchanges completed in a taxable year 
                        beginning after December 31, 2017, the 
                        $1,000,000 amount in clause (i) shall be 
                        increased by an amount equal to--
                                    ``(I) such dollar amount, 
                                multiplied by
                                    ``(II) the cost-of-living 
                                adjustment determined under section 
                                1(f)(3) for the calendar year in which 
                                the taxable year begins, determined by 
                                substituting `calendar year 2016' for 
                                `calendar year 1992' in subparagraph 
                                (B) thereof.
                        If any amount as adjusted under the preceding 
                        sentence is not a multiple of $1,000, such 
                        amount shall be rounded to the nearest multiple 
                        of $1,000.''.
    (b) Exclusion of Art and Collectibles.--Subparagraph (A) of section 
1031(a)(2) of the Internal Revenue Code of 1986, as amended by 
subsection (a), is amended--
            (1) by striking ``or'' at the end of clause (v),
            (2) by striking the period at the end of clause (vi) and 
        inserting ``, or'', and
            (3) by inserting after clause (vi) the following new 
        clause:
                            ``(vii) any collectible (within the meaning 
                        of section 408(m), without regard to paragraph 
                        (3) thereof).''.
    (c) Regulatory Authority.--Subsection (f) of section 1031 of the 
Internal Revenue Code of 1986 is amended by adding at the end the 
following new paragraph:
            ``(5) Rules relating to dollar limitation.--The Secretary 
        shall prescribe such guidance as is necessary for applying 
        subsection (a)(2)(B)(i) in the case of the exchange of multiple 
        pieces of real property by related persons.''.
    (d) Conforming Amendments.--
            (1) Subsection (b) of section 1031 of the Internal Revenue 
        Code of 1986 is amended--
                    (A) by striking ``in Kind.--If an exchange'' and 
                inserting ``in Kind.--
            ``(1) In general.--If an exchange'', and
                    (B) by adding at the end the following new 
                paragraph:
            ``(2) Coordination with subsection (a)(2)(B).--In the case 
        of an exchange to which paragraph (1) applies--
                    ``(A) paragraph (1) shall be applied before the 
                application of subsection (a)(2)(B), and
                    ``(B) subsection (a)(2)(B) shall be applied--
                            ``(i) as if such exchange were within the 
                        provisions of subsection (a), and
                            ``(ii) by increasing the basis of the 
                        property disposed of by the taxpayer in such 
                        exchange by the amount of any gain determined 
                        under paragraph (1).''.
            (2) Subsection (d) of section 1031 of such Code is amended 
        by striking ``in the amount of gain'' and inserting ``in the 
        amount of gain (including any gain recognized by reason of 
        subsection (a)(2)(B)(i))''.
            (3) Subsection (i) of section 1031 of such Code is amended 
        by striking ``(a)(2)(B)'' and inserting ``(a)(2)(A)(ii)''.
    (e) Effective Date.--The amendments made by this section shall 
apply to exchanges completed in taxable years beginning after December 
31, 2016.

SEC. 7. CONTRIBUTION LIMIT AND INCREASED MINIMUM DISTRIBUTIONS FOR 
              CERTAIN RETIREMENT PLANS WITH LARGE ACCOUNT BALANCES.

    (a) Contribution Limit.--
            (1) In general.--Subpart A of part I of subchapter D of 
        chapter 1 of the Internal Revenue Code of 1986 is amended by 
        adding at the end the following:

``SEC. 409B. CONTRIBUTION LIMIT ON CERTAIN RETIREMENT PLANS WITH LARGE 
              ACCOUNT BALANCES.

    ``(a) General Rule.--Notwithstanding any other provision of this 
title, no applicable annual additions shall be made by, or on behalf 
of, an individual for the taxable year to any applicable retirement 
plan to the extent such applicable annual additions exceed the excess 
(if any) of--
            ``(1) the applicable dollar amount for the taxable year, 
        over
            ``(2) the aggregate balances to the credit of the 
        individual (whether as a participant, owner, or beneficiary) in 
        all applicable retirement plans (determined as of the close of 
        the calendar year preceding the calendar year in which the 
        taxable year begins).
    ``(b) Rules Relating to Contribution Limitations.--
            ``(1) Plans other than certain iras.--
                    ``(A) In general.--Except as provided in paragraph 
                (2), applicable annual additions in excess of the 
                limitation under subsection (a) shall be treated for 
                purposes of this title in the same manner as excess 
                deferrals are treated under section 402(g).
                    ``(B) Special rule for after tax contributions.--
                If, without regard to this paragraph, any portion of an 
                applicable annual addition to which subparagraph (A) 
                applies with respect to an individual is not excludable 
                from gross income of the individual (or no deduction is 
                allowable to the individual with respect to such 
                portion), such portion shall not be--
                            ``(i) includible in gross income by reason 
                        of the application of subparagraph (A), or
                            ``(ii) taken into account in computing the 
                        investment in the contract for purposes of 
                        section 72.
            ``(2) Special rule for iras.--
                    ``(A) In general.--In the case of an applicable 
                retirement plan which is an individual retirement plan 
                (other than a simplified employee pension under section 
                408(k) or a simple retirement account under section 
                408(p)), any applicable annual addition to such plan in 
                excess of the limitation under subsection (a) shall be 
                treated for purposes of sections 408 and 408A as a 
                contribution for the taxable year in excess of the 
                maximum amount allowable as a deduction under section 
                219 for the taxable year.
                    ``(B) After tax contributions.--In the case of 
                applicable annual additions in excess of the limitation 
                under subsection (a)--
                            ``(i) which are treated as designated 
                        nondeductible contributions under section 
                        408(o), rules similar to the rules of paragraph 
                        (1)(B) shall apply, and
                            ``(ii) to a Roth IRA, section 408A(d)(2)(C) 
                        shall apply to such additions and to any net 
                        income allocable to such additions.
                For purposes of clause (ii), distributions from a Roth 
                IRA shall be treated as first made from amounts 
                described in clause (ii) and section 408A(d)(2)(C) 
                shall be applied in the same manner as if there were a 
                distribution of a contribution described in section 
                408(d)(4) (without regard to whether such distribution 
                is timely made).
            ``(3) Allocation of excess applicable annual additions.--If 
        the applicable dollar amount for a taxable year exceeds the 
        amount described in subsection (a)(2), the taxpayer may, in 
        such form and manner as the Secretary may prescribe, allocate 
        such excess to applicable annual additions to each applicable 
        retirement plan in such manner as the taxpayer chooses.
    ``(c) Definitions and Special Rules.--For purposes of this 
section--
            ``(1) Applicable annual addition.--
                    ``(A) In general.--The term `applicable annual 
                addition' means any of the following made to or on 
                behalf of an individual:
                            ``(i) An annual addition (within the 
                        meaning of section 415(c)(2)).
                            ``(ii) Any contribution to an individual 
                        retirement plan, including any employer or 
                        employee contribution to a simplified employee 
                        pension under section 408(k) or a simple 
                        retirement account under section 408(p).
                            ``(iii) Any deferral under an eligible 
                        deferred compensation plan described in section 
                        457(b) which is maintained by an eligible 
                        employer described in section 457(e)(1)(A).
                    ``(B) Rollover contributions disregarded.--A 
                rollover contribution under section 402(c), 403(b)(8), 
                408(d)(3)(A)(ii), or 457(e)(16) shall not be treated as 
                an annual addition.
            ``(2) Applicable dollar amount.--
                    ``(A) In general.--The term `applicable dollar 
                amount' means $5,000,000.
                    ``(B) Adjustment for inflation.--In the case of any 
                taxable year beginning after 2017, the $5,000,000 
                amount under subparagraph (A) shall be increased by an 
                amount equal to the product of--
                            ``(i) such amount, and
                            ``(ii) the cost-of-living adjustment under 
                        section 1(f)(3) for the calendar year in which 
                        such taxable year begins, determined by 
                        substituting `calendar year 2016' for `calendar 
                        year 1992' in subparagraph (B) thereof.
                    ``(C) Rounding.--If any amount as adjusted under 
                subparagraph (B) is not a multiple of $1,000, such 
                amount shall be rounded to the next lowest multiple of 
                $1,000.
            ``(3) Applicable retirement plan.--The term `applicable 
        retirement plan' means--
                    ``(A) a defined contribution plan to which section 
                401(a) or 403(a) applies,
                    ``(B) an annuity contract under section 403(b),
                    ``(C) an eligible deferred compensation plan 
                described in section 457(b) which is maintained by an 
                eligible employer described in section 457(e)(1)(A), or
                    ``(D) an individual retirement plan.
    ``(d) Regulations.--The Secretary shall prescribe such regulations 
and guidance as are necessary or appropriate to carry out the purposes 
of this section, including regulations or guidance that provide for the 
application of this section and section 4974(e) in the case of plans 
with a valuation date other than the last day of a calendar year.''.
            (2) Conforming amendments.--
                    (A) The table of contents for subpart A of part I 
                of subchapter D of chapter 1 of such Code is amended by 
                adding after the item relating to section 409A the 
                following new item:

``Sec. 409B. Contribution limit on certain retirement plans with large 
                            account balances.''.
                    (B) Section 402(g) of such Code is amended by 
                adding at the end the following new paragraph:
            ``(9) Aggregate limitation.--For additional limitation on 
        contributions to certain plans with large account balances, see 
        section 409B.''.
                    (C) Section 403(b)(1) of such Code is amended by 
                adding at the end the following new sentence: ``For 
                additional limitation on contributions to certain plans 
                with large account balances, see section 409B.''.
                    (D) Section 408(r) of such Code is amended by 
                adding at the end the following new paragraph:
            ``(3) For additional limitation on contributions to certain 
        plans with large account balances, see section 409B.''.
                    (E) Section 457(c) of such Code is amended by 
                adding at the end the following new sentence: ``For 
                additional limitation on contributions to certain plans 
                with large account balances, see section 409B.''.
    (b) Excise Tax on Excess Annual Additions.--
            (1) In general.--Subsection (a) of section 4973 of the 
        Internal Revenue Code of 1986 is amended--
                    (A) by striking ``or'' at the end of paragraph (5),
                    (B) by inserting ``or'' after the comma at the end 
                of paragraph (6), and
                    (C) by inserting after paragraph (6) the following 
                new paragraph:
            ``(7) an applicable retirement plan (within the meaning of 
        section 409B(c)(3)),''.
            (2) Excess contributions to applicable retirement plans.--
        Section 4973 of such Code is amended by adding at the end the 
        following new subsection:
    ``(i) Excess Contributions to Applicable Retirement Plans.--For 
purposes of this section, in the case of applicable retirement plans 
(within the meaning of section 409B(c)(3)), the term `excess 
contributions' with respect to any taxable year means the sum of--
            ``(1) the excess of the applicable annual additions (within 
        the meaning of section 409B(c)(1)) to such plans over the 
        limitation under section 409B(a) for such taxable year, and
            ``(2) the lesser of--
                    ``(A) the amount determined under this subsection 
                for the preceding taxable year, reduced by the 
                aggregate distributions from such plans for the taxable 
                year (including distributions required under section 
                4974(e)) to the extent not contributed in a rollover 
                contribution to another eligible retirement plan in 
                accordance with section 402(c), 403(b)(8), 457(e)(16), 
                408(d)(3), or 408A(d)(3), or
                    ``(B) the amount (if any) by which the amount 
                determined under section 409B(a)(2) for the taxable 
                year exceeds the applicable dollar amount under section 
                409B(c)(2) for the taxable year.''.
            (3) Conforming amendments.--Subsection (a) of section 4973 
        of such Code is amended--
                    (A) by striking ``accounts or annuities'' and 
                inserting ``accounts, annuities, or plans'', and
                    (B) by striking ``account or annuity'' and 
                inserting ``account, annuity, or plan''.
    (c) Increase in Minimum Required Distributions.--
            (1) In general.--Section 4974 of the Internal Revenue Code 
        of 1986 is amended by adding at the end the following:
    ``(e) Increase in Minimum Required Distributions for Payees With 
Large Aggregate Account Balances.--
            ``(1) In general.--If this subsection applies to a payee 
        for any taxable year--
                    ``(A) all qualified retirement plans and eligible 
                deferred compensation plans of the payee which are 
                applicable retirement plans taken into account in 
                computing the excess described in paragraph (2)(A) 
                shall be treated as 1 plan solely for purposes of 
                applying this section to the increase in minimum 
                required distributions for the taxable year described 
                in subparagraph (B), and
                    ``(B) the minimum required distributions under this 
                section for all plans treated as 1 plan under 
                subparagraph (A) with respect to such payee for the 
                taxable year shall be increased by the excess (if any) 
                of--
                            ``(i) the excess described in paragraph 
                        (2)(A), over
                            ``(ii) the sum of the minimum required 
                        distributions (determined without regard to 
                        this subsection) for all such plans.
            ``(2) Application.--This subsection shall apply to a payee 
        for a taxable year--
                    ``(A) if the aggregate balances to the credit of 
                the payee (whether as a participant, owner, or 
                beneficiary) in all applicable retirement plans 
                (determined as of the close of the calendar year 
                preceding the calendar year in which the taxable year 
                begins) exceed the applicable dollar amount for the 
                calendar year in which the taxable year begins, and
                    ``(B) without regard to whether amounts with 
                respect to the payee are otherwise required to be 
                distributed under section 401(a)(9), 403(b)(10), 
                408(a)(6), 408(b)(3), or 457(d)(2).
            ``(3) Coordination and allocation.--
                    ``(A) Minimum distribution requirements.--If this 
                subsection applies to a payee for any taxable year--
                            ``(i) this section shall apply first to 
                        minimum required distributions determined 
                        without regard to this subsection and then to 
                        any increase in minimum required distributions 
                        by reason of this subsection, and
                            ``(ii) nothing in this subsection shall be 
                        construed to affect the amount of any minimum 
                        required distribution determined without regard 
                        to this subsection or the plan or plans from 
                        which it is required to be distributed from.
                    ``(B) Allocation of increase in minimum required 
                distributions.--The taxpayer may, in such form and 
                manner as the Secretary may prescribe, allocate any 
                increase in minimum required distributions by reason of 
                this subsection to applicable retirement plans treated 
                as 1 plan under subparagraph (A) in such manner as the 
                taxpayer chooses.
            ``(4) Treatment of roth iras.--
                    ``(A) In general.--Notwithstanding section 
                408A(c)(5)--
                            ``(i) the aggregate balance to the credit 
                        of a payee of any Roth IRA shall be taken into 
                        account for purposes of this subsection, and
                            ``(ii) distributions from a Roth IRA may be 
                        taken into account in determining whether the 
                        required increase in minimum required 
                        distributions by reason of this subsection has 
                        been satisfied.
                    ``(B) Inclusion in income of distributed 
                earnings.--If any distribution from a Roth IRA is taken 
                into account under subparagraph (A)(ii), then, 
                notwithstanding section 408A(d)(5), the portion of such 
                distribution which is properly allocable to net income 
                on contributions to the Roth IRA shall not be treated 
                as a qualified distribution and shall be included in 
                gross income of the payee.
            ``(5) Ratable inclusion for first year of increase.--If the 
        first taxable year of a taxpayer for which there is a required 
        increase in minimum required distributions by reason of this 
        subsection begins before January 1, 2019, any amount required 
        to be included in gross income by reason of such increase shall 
        be included in income ratably over the 6-taxable-year period 
        (or such shorter period as the taxpayer may elect) beginning 
        with such first taxable year.
            ``(6) Definitions.--For purposes of this subsection, any 
        term used in this subsection which is also used in section 409B 
        shall have the same meaning as when such term is used in such 
        section.''.
            (2) Exception from 10 percent additional tax on early 
        distributions.--Section 72(t)(2) of such Code is amended by 
        adding at the end the following new subparagraph:
                    ``(H) Distributions of excess balances.--
                Distributions from applicable retirement plans (within 
                the meaning of section 409B) to the extent such 
                distributions during the taxable year do not exceed the 
                amount (if any) by which--
                            ``(i) the amount determined under section 
                        409B(a)(2) for the taxable year, exceeds
                            ``(ii) the applicable dollar amount under 
                        section 409B(c)(2) for the preceding taxable 
                        year.''.
    (d) Reporting Requirements.--Section 6047 of the Internal Revenue 
Code of 1986 is amended by redesignating subsection (g) as subsection 
(h) and by inserting after subsection (f) the following:
    ``(g) Reporting Relating to Aggregate Contribution and Balance 
Limits on Certain Retirement Plans.--The Secretary shall require the 
plan administrator or trustee of an applicable retirement plan (as 
defined in section 409B) to make such returns and reports to the 
Secretary and participants and beneficiaries as are necessary to apply 
the aggregate limits on contributions imposed by section 409B and the 
increases in minimum required distributions required by section 
4974(e). If the account balance of a plan as of the close of a calendar 
year is not otherwise required under this title to be reported to a 
participant, a beneficiary, or the Secretary, such requirements shall 
include a requirement that the plan administrator or trustee shall 
notify the participant, the beneficiary, or the Secretary of such 
account balance at such time and in such manner as the Secretary may 
prescribe.''.
    (e) Effective Dates.--
            (1) In general.--The amendments made by this section shall 
        apply to taxable years beginning after the date of the 
        enactment of this Act.
            (2) Plan requirements.--The amendments made by subsection 
        (d) shall apply to years beginning after the date of the 
        enactment of this Act.
                                 <all>