[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1007 Introduced in House (IH)]
<DOC>
116th CONGRESS
1st Session
H. R. 1007
To amend the Internal Revenue Code of 1986 to encourage retirement
savings, and for other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
February 6, 2019
Mr. Kind (for himself, Mr. Kelly of Pennsylvania, Mr. Blumenauer, Ms.
Sanchez, Mr. Beyer, Ms. Judy Chu of California, Mr. Higgins of New
York, Mr. Holding, Mr. Kildee, Mr. Pascrell, and Mr. Larson of
Connecticut) introduced the following bill; which was referred to the
Committee on Ways and Means, and in addition to the Committee on
Education and Labor, for a period to be subsequently determined by the
Speaker, in each case for consideration of such provisions as fall
within the jurisdiction of the committee concerned
_______________________________________________________________________
A BILL
To amend the Internal Revenue Code of 1986 to encourage retirement
savings, 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, ETC.
(a) Short Title.--This Act may be cited as the ``Retirement
Enhancement and Savings Act of 2019''.
(b) Table of Contents.--The table of contents of this Act is as
follows:
Sec. 1. Short title, etc.
TITLE I--EXPANDING AND PRESERVING RETIREMENT SAVINGS
Sec. 101. Multiple employer plans.
Sec. 102. Pooled employer and multiple employer plan reporting.
Sec. 103. Removal of 10 percent cap from automatic enrollment safe
harbor after 1st plan year.
Sec. 104. Rules relating to election of safe harbor 401(k) status.
Sec. 105. Increase in credit limitation for small employer pension plan
startup costs.
Sec. 106. Small employer automatic enrollment credit.
Sec. 107. Certain taxable non-tuition fellowship and stipend payments
treated as compensation for IRA purposes.
Sec. 108. Repeal of maximum age for traditional IRA contributions.
Sec. 109. Expansion of IRA ownership of S corporation bank stock.
Sec. 110. Qualified employer plans prohibited from making loans through
credit cards and other similar
arrangements.
Sec. 111. Portability of lifetime income options.
Sec. 112. Treatment of custodial accounts on termination of section
403(b) plans.
Sec. 113. Clarification of retirement income account rules relating to
church-controlled organizations.
TITLE II--ADMINISTRATIVE IMPROVEMENTS
Sec. 201. Plan adopted by filing due date for year may be treated as in
effect as of close of year.
Sec. 202. Combined annual report for group of plans.
Sec. 203. Disclosure regarding lifetime income.
Sec. 204. Fiduciary safe harbor for selection of lifetime income
provider.
Sec. 205. Modification of nondiscrimination rules to protect older,
longer service participants.
Sec. 206. Modification of PBGC premiums for CSEC plans.
TITLE III--BENEFITS RELATING TO UNITED STATES TAX COURT
Sec. 301. Thrift Savings Plan contributions for judges in the Federal
Employees Retirement System.
Sec. 302. Change in vesting period for survivor annuities and waiver of
vesting period in the event of
assassination.
Sec. 303. Coordination of retirement and survivor annuity with the
Federal Employees Retirement System.
Sec. 304. Limit on teaching compensation of retired judges.
Sec. 305. General provisions relating to magistrate judges of the Tax
Court.
Sec. 306. Life insurance for magistrate judges of the Tax Court age 65
or older.
Sec. 307. Retirement and annuity program.
Sec. 308. Provisions for recall.
TITLE IV--OTHER BENEFITS
Sec. 401. Benefits provided to volunteer firefighters and emergency
medical responders.
TITLE V--REVENUE PROVISIONS
Sec. 501. Modifications of required distribution rules for pension
plans.
Sec. 502. Increase in penalty for failure to file.
Sec. 503. Increased penalties for failure to file retirement plan
returns.
Sec. 504. Increase information sharing to administer excise taxes.
Sec. 505. Pension variable rate premium payment acceleration.
TITLE I--EXPANDING AND PRESERVING RETIREMENT SAVINGS
SEC. 101. MULTIPLE EMPLOYER PLANS.
(a) Qualification Requirements.--
(1) In general.--Section 413 of the Internal Revenue Code
of 1986 is amended by adding at the end the following new
subsection:
``(e) Application of Qualification Requirements for Certain
Multiple Employer Plans With Pooled Plan Providers.--
``(1) In general.--Except as provided in paragraph (2), if
a defined contribution plan to which subsection (c) applies--
``(A) is sponsored by employers all of which have
both a common interest other than having adopted the
plan and control of the plan, or
``(B) in the case of a plan not described in
subparagraph (A), has a pooled plan provider,
then the plan shall not be treated as failing to meet the
requirements under this title applicable to a plan described in
section 401(a) or to a plan that consists of individual
retirement accounts described in section 408 (including by
reason of subsection (c) thereof), whichever is applicable,
merely because one or more employers of employees covered by
the plan fail to take such actions as are required of such
employers for the plan to meet such requirements.
``(2) Limitations.--
``(A) In general.--Paragraph (1) shall not apply to
any plan unless the terms of the plan provide that in
cases of employers failing to take the actions
described in paragraph (1)--
``(i) the assets of the plan attributable
to employees of the employer will be
transferred to a plan maintained only by the
employer (or its successor), to an eligible
retirement plan as defined in section
402(c)(8)(B) for each individual whose account
is transferred, or to any other arrangement
that the Secretary determines is appropriate,
unless the Secretary determines it is in the
best interests of such employees to retain the
assets in the plan, and
``(ii) the employer described in clause (i)
(and not the plan with respect to which the
failure occurred or any other participating
employer in such plan) shall, except to the
extent provided by the Secretary, be liable for
any liabilities with respect to such plan
attributable to employees of the employer.
``(B) Failures by pooled plan providers.--If the
pooled plan provider of a plan described in paragraph
(1)(B) does not perform substantially all of the
administrative duties which are required of the
provider under paragraph (3)(A)(i) for any plan year,
the Secretary, in the Secretary's own discretion, may
provide that the determination as to whether the plan
meets the requirements under this title applicable to a
plan described in section 401(a) or to a plan that
consists of individual retirement accounts described in
section 408 (including by reason of subsection (c)
thereof), whichever is applicable, shall be made in the
same manner as would be made without regard to
paragraph (1).
``(3) Pooled plan provider.--For purposes of this
subsection--
``(A) In general.--The term `pooled plan provider'
means, with respect to any plan, a person who--
``(i) is designated by the terms of the
plan as a named fiduciary (within the meaning
of section 402(a)(2) of the Employee Retirement
Income Security Act of 1974), as the plan
administrator, and as the person responsible to
perform all administrative duties (including
conducting proper testing with respect to the
plan and employees of each participating
employer) which are reasonably necessary to
ensure that--
``(I) the plan meets any
requirement applicable under the
Employee Retirement Income Security Act
of 1974 or this title to a plan
described in section 401(a) or to a
plan that consists of individual
retirement accounts described in
section 408 (including by reason of
subsection (c) thereof), whichever is
applicable, and
``(II) each participating employer
takes such actions as the Secretary or
such person determines are necessary
for the plan to meet the requirements
described in subclause (I), including
providing to such person any
disclosures or other information which
the Secretary may require or which such
person otherwise determines is
necessary to administer the plan or to
allow the plan to meet such
requirements,
``(ii) registers as a pooled plan provider
with the Secretary, and provides such other
information to the Secretary as the Secretary
may require, before beginning operations as a
pooled plan provider,
``(iii) acknowledges in writing that such
person is a named fiduciary (within the meaning
of section 402(a)(2) of the Employee Retirement
Income Security Act of 1974), and the plan
administrator, with respect to the plan, and
``(iv) is responsible for ensuring that all
persons who handle assets of, or who are
fiduciaries of, the plan are bonded in
accordance with section 412 of the Employee
Retirement Income Security Act of 1974.
``(B) Audits, examinations and investigations.--The
Secretary may perform audits, examinations, and
investigations of pooled plan providers as may be
necessary to enforce and carry out the purposes of this
subsection.
``(4) Guidance.--
``(A) In general.--The Secretary shall issue such
guidance as the Secretary determines appropriate to
carry out this subsection, including guidance--
``(i) to identify the administrative duties
and other actions required to be performed by a
pooled plan provider under this subsection,
``(ii) which describes the procedures to be
taken to terminate a plan which fails to meet
the requirements to be a plan described in
paragraph (1), including the proper treatment
of, and actions needed to be taken by, any
participating employer of the plan and the
assets and liabilities of the plan with respect
to employees of that employer, and
``(iii) identifying appropriate cases to
which the rules of paragraph (2)(A) will apply
to employers failing to take the actions
described in paragraph (1).
The Secretary shall take into account under clause
(iii) whether the failure of an employer or pooled plan
provider to provide any disclosures or other
information, or to take any other action, necessary to
administer a plan or to allow a plan to meet
requirements applicable to the plan under section
401(a) or 408, whichever is applicable, has continued
over a period of time that clearly demonstrates a lack
of commitment to compliance.
``(B) Prospective application.--Any guidance issued
by the Secretary under this paragraph shall not apply
to any action or failure occurring before the issuance
of such guidance.
``(5) Model plan.--The Secretary shall, in consultation
with the Secretary of Labor when appropriate, publish model
plan language which meets the requirements of this subsection
and of paragraphs (43) and (44) of section 3 of the Employee
Retirement Income Security Act of 1974 and which may be adopted
in order for a plan to be treated as a plan described in
paragraph (1)(B).''.
(2) Conforming amendment.--Paragraph (3) of section 413(b)
of such Code is amended by striking ``section 401(a)'' and
inserting ``sections 401(a) and 408(c)''.
(3) Technical amendment.--Subsection (c) of section 408 of
such Code is amended by inserting after paragraph (2) the
following new paragraph:
``(3) There is a separate accounting for any interest of an
employee or member (or spouse of an employee or member) in a
Roth IRA.''.
(b) No Common Interest Required for Pooled Employer Plans.--Section
3(2) of the Employee Retirement Income Security Act of 1974 (29 U.S.C.
1002(2)) is amended by adding at the end the following:
``(C) A pooled employer plan shall be treated as--
``(i) a single employee pension benefit
plan or single pension plan; and
``(ii) a plan to which section 210(a)
applies.''.
(c) Pooled Employer Plan and Provider Defined.--
(1) In general.--Section 3 of the Employee Retirement
Income Security Act of 1974 (29 U.S.C. 1002) is amended by
adding at the end the following:
``(43) Pooled employer plan.--
``(A) In general.--The term `pooled employer plan'
means a plan--
``(i) which is an individual account plan
established or maintained for the purpose of
providing benefits to the employees of 2 or
more employers;
``(ii) which is a plan described in section
401(a) of the Internal Revenue Code of 1986
which includes a trust exempt from tax under
section 501(a) of such Code or a plan that
consists of individual retirement accounts
described in section 408 of such Code
(including by reason of subsection (c)
thereof); and
``(iii) the terms of which meet the
requirements of subparagraph (B).
Such term shall not include a plan with respect to
which all of the participating employers have both a
common interest other than having adopted the plan and
control of the plan.
``(B) Requirements for plan terms.--The
requirements of this subparagraph are met with respect
to any plan if the terms of the plan--
``(i) designate a pooled plan provider and
provide that the pooled plan provider is a
named fiduciary of the plan;
``(ii) designate one or more trustees
meeting the requirements of section 408(a)(2)
of the Internal Revenue Code of 1986 (other
than a participating employer) to be
responsible for collecting contributions to,
and holding the assets of, the plan and require
such trustees to implement written contribution
collection procedures that are reasonable,
diligent, and systematic;
``(iii) provide that each participating
employer retains fiduciary responsibility for--
``(I) the selection and monitoring
in accordance with section 404(a) of
the person designated as the pooled
plan provider and any other person who,
in addition to the pooled plan
provider, is designated as a named
fiduciary of the plan; and
``(II) to the extent not otherwise
delegated to another fiduciary by the
pooled plan provider and subject to the
provisions of section 404(c), the
investment and management of that
portion of the plan's assets
attributable to the employees of that
participating employer;
``(iv) provide that a participating
employer, or a participant or beneficiary, is
not subject to unreasonable restrictions, fees,
or penalties with regard to ceasing
participation, receipt of distributions, or
otherwise transferring assets of the plan in
accordance with section 208 or paragraph
(44)(C)(i)(II);
``(v) require--
``(I) the pooled plan provider to
provide to participating employers any
disclosures or other information which
the Secretary may require, including
any disclosures or other information to
facilitate the selection or any
monitoring of the pooled plan provider
by participating employers; and
``(II) each participating employer
to take such actions as the Secretary
or the pooled plan provider determines
are necessary to administer the plan or
for the plan to meet any requirement
applicable under this Act or the
Internal Revenue Code of 1986 to a plan
described in section 401(a) of such
Code or to a plan that consists of
individual retirement accounts
described in section 408 of such Code
(including by reason of subsection (c)
thereof), whichever is applicable,
including providing any disclosures or
other information which the Secretary
may require or which the pooled plan
provider otherwise determines is
necessary to administer the plan or to
allow the plan to meet such
requirements; and
``(vi) provide that any disclosure or other
information required to be provided under
clause (v) may be provided in electronic form
and will be designed to ensure only reasonable
costs are imposed on pooled plan providers and
participating employers.
``(C) Exceptions.--The term `pooled employer plan'
does not include--
``(i) a multiemployer plan; or
``(ii) a plan established before the date
of the enactment of the Retirement Enhancement
and Savings Act of 2019, unless the plan
administrator elects that the plan will be
treated as a pooled employer plan and the plan
meets the requirements of this title applicable
to a pooled employer plan established on or
after such date.
``(44) Pooled plan provider.--
``(A) In general.--The term `pooled plan provider'
means a person who--
``(i) is designated by the terms of a
pooled employer plan as a named fiduciary, as
the plan administrator, and as the person
responsible for the performance of all
administrative duties (including conducting
proper testing with respect to the plan and
employees of each participating employer) which
are reasonably necessary to ensure that--
``(I) the plan meets any
requirement applicable under this Act
or the Internal Revenue Code of 1986 to
a plan described in section 401(a) of
such Code or to a plan that consists of
individual retirement accounts
described in section 408 of such Code
(including by reason of subsection (c)
thereof), whichever is applicable; and
``(II) each participating employer
takes such actions as the Secretary or
pooled plan provider determines are
necessary for the plan to meet the
requirements described in subclause
(I), including providing the
disclosures and information described
in paragraph (43)(B)(v)(II);
``(ii) registers as a pooled plan provider
with the Secretary, and provides to the
Secretary such other information as the
Secretary may require, before beginning
operations as a pooled plan provider;
``(iii) acknowledges in writing that such
person is a named fiduciary, and the plan
administrator, with respect to the pooled
employer plan; and
``(iv) is responsible for ensuring that all
persons who handle assets of, or who are
fiduciaries of, the pooled employer plan are
bonded in accordance with section 412.
``(B) Audits, examinations and investigations.--The
Secretary may perform audits, examinations, and
investigations of pooled plan providers as may be
necessary to enforce and carry out the purposes of this
paragraph and paragraph (43).
``(C) Guidance.--
``(i) In general.--The Secretary shall
issue such guidance as the Secretary determines
appropriate to carry out this paragraph and
paragraph (43), including guidance--
``(I) to identify the
administrative duties and other actions
required to be performed by a pooled
plan provider under either such
paragraph; and
``(II) which requires in
appropriate cases that if a
participating employer fails to take
the actions required under subparagraph
(A)(i)(II)--
``(aa) the assets of the
plan attributable to employees
of the participating employer
are transferred to a plan
maintained only by the
participating employer (or its
successor), to an eligible
retirement plan as defined in
section 402(c)(8)(B) of the
Internal Revenue Code of 1986
for each individual whose
account is transferred, or to
any other arrangement that the
Secretary determines is
appropriate in such guidance;
and
``(bb) the participating
employer described in item (aa)
(and not the plan with respect
to which the failure occurred
or any other participating
employer in such plan) shall,
except to the extent provided
in such guidance, be liable for
any liabilities with respect to
such plan attributable to
employees of the participating
employer.
The Secretary shall take into account under
subclause (II) whether the failure of an
employer or pooled plan provider to provide any
disclosures or other information, or to take
any other action, necessary to administer a
plan or to allow a plan to meet requirements
described in subparagraph (A)(i)(II) has
continued over a period of time that clearly
demonstrates a lack of commitment to
compliance. The Secretary may waive the
requirements of subclause (II)(aa) in
appropriate circumstances if the Secretary
determines it is in the best interests of the
employees of the participating employer
described in such clause to retain the assets
in the plan with respect to which the
employer's failure occurred.
``(ii) Prospective application.--Any
guidance issued by the Secretary under this
subparagraph shall not apply to any action or
failure occurring before the issuance of such
guidance.
``(D) Aggregation rules.--For purposes of this
paragraph--
``(i) In general.--In determining whether a
person meets the requirements of this paragraph
to be a pooled plan provider with respect to
any plan, all persons who are members of the
same controlled group and who perform services
for the plan shall be treated as one person.
``(ii) Members of common group.--Persons
shall be treated as members of the same
controlled group if such persons are treated as
a single employer under subsection (c) or (d)
of section 210.''.
(2) Bonding requirements for pooled employer plans.--The
last sentence of section 412(a) of the Employee Retirement
Income Security Act of 1974 (29 U.S.C. 1112(a)) is amended by
inserting ``or in the case of a pooled employer plan (as
defined in section 3(43))'' after ``section 407(d)(1))''.
(3) Conforming and technical amendments.--Section 3 of the
Employee Retirement Income Security Act of 1974 (29 U.S.C.
1002) is amended--
(A) in paragraph (16)(B)--
(i) by striking ``or'' at the end of clause
(ii); and
(ii) by striking the period at the end and
inserting ``, or (iv) in the case of a pooled
employer plan, the pooled plan provider.''; and
(B) by striking the second paragraph (41).
(d) Effective Date.--
(1) In general.--The amendments made by this section shall
apply to years beginning after December 31, 2021.
(2) Rule of construction.--Nothing in the amendments made
by subsection (a) shall be construed as limiting the authority
of the Secretary of the Treasury or the Secretary's delegate
(determined without regard to such amendment) to provide for
the proper treatment of a failure to meet any requirement
applicable under the Internal Revenue Code of 1986 with respect
to one employer (and its employees) in a multiple employer
plan.
SEC. 102. POOLED EMPLOYER AND MULTIPLE EMPLOYER PLAN REPORTING.
(a) Additional Information.--Section 103 of the Employee Retirement
Income Security Act of 1974 (29 U.S.C. 1023) is amended--
(1) in subsection (a)(1)(B), by striking ``applicable
subsections (d), (e), and (f)'' and inserting ``applicable
subsections (d), (e), (f), and (g)''; and
(2) by amending subsection (g) to read as follows:
``(g) Additional Information With Respect to Pooled Employer and
Multiple Employer Plans.--An annual report under this section for a
plan year shall include--
``(1) with respect to any plan to which section 210(a)
applies (including a pooled employer plan), a list of
participating employers and a good faith estimate of the
percentage of total contributions made by such participating
employers during the plan year; and
``(2) with respect to a pooled employer plan, the
identifying information for the person designated under the
terms of the plan as the pooled plan provider.''.
(b) Simplified Annual Reports.--Section 104(a) of the Employee
Retirement Income Security Act of 1974 (29 U.S.C. 1024(a)) is amended
by striking paragraph (2)(A) and inserting the following:
``(2)(A) With respect to annual reports required to be
filed with the Secretary under this part, the Secretary may by
regulation prescribe simplified annual reports for any pension
plan that--
``(i) covers fewer than 100 participants; or
``(ii) is a plan described in section 210(a) that
covers fewer than 1,000 participants, but only if no
single participating employer has 100 or more
participants covered by the plan.''.
(c) Effective Date.--The amendments made by this section shall
apply to annual reports for plan years beginning after December 31,
2021.
SEC. 103. REMOVAL OF 10 PERCENT CAP FROM AUTOMATIC ENROLLMENT SAFE
HARBOR AFTER 1ST PLAN YEAR.
(a) In General.--Clause (iii) of section 401(k)(13)(C) of the
Internal Revenue Code of 1986 is amended by striking ``, does not
exceed 10 percent, and is at least'' and inserting ``and is''.
(b) Conforming Amendments.--
(1) Subclause (I) of section 401(k)(13)(C)(iii) of the
Internal Revenue Code of 1986 is amended by striking ``3
percent'' and inserting ``at least 3 percent, but not greater
than 10 percent,''.
(2) Subclause (II) of section 401(k)(13)(C)(iii) of such
Code is amended by striking ``4 percent'' and inserting ``at
least 4 percent''.
(3) Subclause (III) of section 401(k)(13)(C)(iii) of such
Code is amended by striking ``5 percent'' and inserting ``at
least 5 percent''.
(4) Subclause (IV) of section 401(k)(13)(C)(iii) of such
Code is amended by striking ``6 percent'' and inserting ``at
least 6 percent''.
(c) Effective Date.--The amendments made by this section shall
apply to plan years beginning after December 31, 2018.
SEC. 104. RULES RELATING TO ELECTION OF SAFE HARBOR 401(K) STATUS.
(a) Limitation of Annual Safe Harbor Notice to Matching
Contribution Plans.--
(1) In general.--Subparagraph (A) of section 401(k)(12) of
the Internal Revenue Code of 1986 is amended by striking ``if
such arrangement'' and all that follows and inserting ``if such
arrangement--
``(i) meets the contribution requirements
of subparagraph (B) and the notice requirements
of subparagraph (D), or
``(ii) meets the contribution requirements
of subparagraph (C).''.
(2) Automatic contribution arrangements.--Subparagraph (B)
of section 401(k)(13) of such Code is amended by striking
``means'' and all that follows and inserting ``means a cash or
deferred arrangement--
``(A) which is described in subparagraph (D)(i)(I)
and meets the applicable requirements of subparagraphs
(C) through (E), or
``(B) which is described in subparagraph (D)(i)(II)
and meets the applicable requirements of subparagraphs
(C) and (D).''.
(b) Nonelective Contributions.--Section 401(k)(12) of the Internal
Revenue Code of 1986 is amended by redesignating subparagraph (F) as
subparagraph (G), and by inserting after subparagraph (E) the following
new subparagraph:
``(F) Timing of plan amendment for employer making
nonelective contributions.--
``(i) In general.--Except as provided in
clause (ii), a plan may be amended after the
beginning of a plan year to provide that the
requirements of subparagraph (C) shall apply to
the arrangement for the plan year, but only if
the amendment is adopted--
``(I) at any time before the 30th
day before the close of the plan year,
or
``(II) at any time before the last
day under paragraph (8)(A) for
distributing excess contributions for
the plan year.
``(ii) Exception where plan provided for
matching contributions.--Clause (i) shall not
apply to any plan year if the plan provided at
any time during the plan year that the
requirements of subparagraph (B) or paragraph
(13)(D)(i)(I) applied to the plan year.
``(iii) 4-percent contribution
requirement.--Clause (i)(II) shall not apply to
an arrangement unless the amount of the
contributions described in subparagraph (C)
which the employer is required to make under
the arrangement for the plan year with respect
to any employee is an amount equal to at least
4 percent of the employee's compensation.''.
(c) Automatic Contribution Arrangements.--Section 401(k)(13) of the
Internal Revenue Code of 1986 is amended by adding at the end the
following:
``(F) Timing of plan amendment for employer making
nonelective contributions.--
``(i) In general.--Except as provided in
clause (ii), a plan may be amended after the
beginning of a plan year to provide that the
requirements of subparagraph (D)(i)(II) shall
apply to the arrangement for the plan year, but
only if the amendment is adopted--
``(I) at any time before the 30th
day before the close of the plan year,
or
``(II) at any time before the last
day under paragraph (8)(A) for
distributing excess contributions for
the plan year.
``(ii) Exception where plan provided for
matching contributions.--Clause (i) shall not
apply to any plan year if the plan provided at
any time during the plan year that the
requirements of subparagraph (D)(i)(I) or
paragraph (12)(B) applied to the plan year.
``(iii) 4-percent contribution
requirement.--Clause (i)(II) shall not apply to
an arrangement unless the amount of the
contributions described in subparagraph
(D)(i)(II) which the employer is required to
make under the arrangement for the plan year
with respect to any employee is an amount equal
to at least 4 percent of the employee's
compensation.''.
(d) Effective Date.--The amendments made by this section shall
apply to plan years beginning after December 31, 2018.
SEC. 105. INCREASE IN CREDIT LIMITATION FOR SMALL EMPLOYER PENSION PLAN
STARTUP COSTS.
(a) In General.--Paragraph (1) of section 45E(b) of the Internal
Revenue Code of 1986 is amended to read as follows:
``(1) for the first credit year and each of the 2 taxable
years immediately following the first credit year, the greater
of--
``(A) $500, or
``(B) the lesser of--
``(i) $250 for each employee of the
eligible employer who is not a highly
compensated employee (as defined in section
414(q)) and who is eligible to participate in
the eligible employer plan maintained by the
eligible employer, or
``(ii) $5,000, and''.
(b) Effective Date.--The amendment made by this section shall apply
to taxable years beginning after December 31, 2018.
SEC. 106. SMALL EMPLOYER AUTOMATIC ENROLLMENT CREDIT.
(a) In General.--Subpart D of part IV of subchapter A of chapter 1
of the Internal Revenue Code of 1986 is amended by adding at the end
the following new section:
``SEC. 45T. AUTO-ENROLLMENT OPTION FOR RETIREMENT SAVINGS OPTIONS
PROVIDED BY SMALL EMPLOYERS.
``(a) In General.--For purposes of section 38, in the case of an
eligible employer, the retirement auto-enrollment credit determined
under this section for any taxable year is an amount equal to--
``(1) $500 for any taxable year occurring during the credit
period, and
``(2) zero for any other taxable year.
``(b) Credit Period.--For purposes of subsection (a)--
``(1) In general.--The credit period with respect to any
eligible employer is the 3-taxable-year period beginning with
the first taxable year for which the employer includes an
eligible automatic contribution arrangement (as defined in
section 414(w)(3)) in a qualified employer plan (as defined in
section 4972(d)) sponsored by the employer.
``(2) Maintenance of arrangement.--No taxable year with
respect to an employer shall be treated as occurring within the
credit period unless the arrangement described in paragraph (1)
is included in the plan for such year.
``(c) Eligible Employer.--For purposes of this section, the term
`eligible employer' has the meaning given such term in section
408(p)(2)(C)(i).''.
(b) Credit To Be Part of General Business Credit.--Subsection (b)
of section 38 of the Internal Revenue Code of 1986 is amended by
striking ``plus'' at the end of paragraph (31), by striking the period
at the end of paragraph (32) and inserting ``, plus'', and by adding at
the end the following new paragraph:
``(33) in the case of an eligible employer (as defined in
section 45T(c)), the retirement auto-enrollment credit
determined under section 45T(a).''.
(c) Clerical Amendment.--The table of sections for subpart D of
part IV of subchapter A of chapter 1 of the Internal Revenue Code of
1986 is amended by inserting after the item relating to section 45R the
following new item:
``Sec. 45T. Auto-enrollment option for retirement savings options
provided by small employers.''.
(d) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2018.
SEC. 107. CERTAIN TAXABLE NON-TUITION FELLOWSHIP AND STIPEND PAYMENTS
TREATED AS COMPENSATION FOR IRA PURPOSES.
(a) In General.--Paragraph (1) of section 219(f) of the Internal
Revenue Code of 1986 is amended by adding at the end the following:
``The term `compensation' shall include any amount paid to an
individual to aid the individual in the pursuit of graduate or
postdoctoral study.''.
(b) Effective Date.--The amendment made by this section shall apply
to taxable years beginning after December 31, 2018.
SEC. 108. REPEAL OF MAXIMUM AGE FOR TRADITIONAL IRA CONTRIBUTIONS.
(a) In General.--Paragraph (1) of section 219(d) of the Internal
Revenue Code of 1986 is repealed.
(b) Conforming Amendment.--Subsection (c) of section 408A of the
Internal Revenue Code of 1986 is amended by striking paragraph (4) and
by redesignating paragraphs (5), (6), and (7) as paragraphs (4), (5),
and (6), respectively.
(c) Effective Date.--The amendments made by this section shall
apply to contributions made for taxable years beginning after December
31, 2018.
SEC. 109. EXPANSION OF IRA OWNERSHIP OF S CORPORATION BANK STOCK.
(a) In General.--Section 1361(c)(2)(A)(vi) of the Internal Revenue
Code of 1986 is amended by striking ``, but only to the extent of the
stock held by such trust in such bank or company as of the date of the
enactment of this clause''.
(b) Sale of Stock in IRA Relating to S Corporation Election Exempt
From Prohibited Transaction Rules.--Section 4975(d)(16) of the Internal
Revenue Code of 1986 is amended by striking subparagraph (B) and by
redesignating subparagraphs (C), (D), (E), and (F) as subparagraphs
(B), (C), (D) and (E), respectively.
(c) Effective Date.--The amendments made by this section shall take
effect on January 1, 2018.
SEC. 110. QUALIFIED EMPLOYER PLANS PROHIBITED FROM MAKING LOANS THROUGH
CREDIT CARDS AND OTHER SIMILAR ARRANGEMENTS.
(a) In General.--Paragraph (2) of section 72(p) of the Internal
Revenue Code of 1986 is amended by redesignating subparagraph (D) as
subparagraph (E) and by inserting after subparagraph (C) the following
new subparagraph:
``(D) Prohibition of loans through credit cards and
other similar arrangements.--
``(i) In general.--Except as provided in
clause (ii), subparagraph (A) shall not apply
to any loan which is made through the use of
any credit card or any other similar
arrangement.
``(ii) Exception for existing credit card
systems.--Clause (i) shall not apply to any
loan to the extent such loan is provided
through an electronic card system which, as of
September 21, 2016, was available for use to
provide loans under qualified employer plans.
``(iii) Disallowed transactions.--If any
card through which a loan is provided under the
exception of clause (ii) is used for any
transaction--
``(I) in an amount equal to or less
than $1,000, or
``(II) with or on the premises of
any establishment described in clause
(i), (ii), or (iii) of section
408(a)(12)(A) of the Social Security
Act,
the amount of such transaction shall be treated
as having been received by the individual as a
distribution in accordance with subparagraph
(A) of paragraph (1).
``(iv) Cost-of-living adjustment.--In the
case of any loan made during a plan year
beginning after December 31, 2019, the $1,000
amount under clause (iii)(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 plan year begins, determined by
substituting `calendar year 2018' for
`calendar year 1992' in subparagraph
(B) thereof. Any increase determined
under the preceding sentence shall be
rounded to the next lowest multiple of
$50.''.
(b) Effective Date.--The amendments made by subsection (a) shall
apply to plan years beginning after December 31, 2018.
(c) Study.--The Comptroller General of the United States shall, not
later than the date which is 1 year after the date of the enactment of
this Act--
(1) study the impact of loans from qualified employer plans
(as defined in section 72(p)(4)(A) of the Internal Revenue Code
of 1986) provided through credit cards and similar arrangements
on the use of retirement savings for purposes other than
funding retirement; and
(2) report the results of such study to the Committee on
Finance of the Senate and the Committee on Ways and Means of
the House of Representatives.
If the study under paragraph (1) determines that such loans, after
implementation of the restrictions imposed by the amendment made by
subsection (a), result in greater usage of retirement savings for
purposes other than funding retirement than loans made by other means,
the report under paragraph (2) shall include recommendations to reduce
such result.
SEC. 111. PORTABILITY OF LIFETIME INCOME 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.--
``(A) In general.--Except as may be otherwise
provided by regulations, 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
``(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 is no longer
authorized to be held as an investment option under the
plan.
``(B) Definitions.--For purposes of this
subsection--
``(i) the term `qualified distribution'
means a direct trustee-to-trustee transfer
described in paragraph (31)(A) to an eligible
retirement plan (as defined in section
402(c)(8)(B)),
``(ii) the term `lifetime income
investment' means an investment option which is
designed to provide an employee with election
rights--
``(I) which are not uniformly
available with respect to other
investment options under the plan, and
``(II) which are to a lifetime
income feature available through a
contract or other arrangement offered
under the plan (or under another
eligible retirement plan (as so
defined), if paid by means of a direct
trustee-to-trustee transfer described
in paragraph (31)(A) to such other
eligible retirement plan),
``(iii) the term `lifetime income feature'
means--
``(I) a feature which 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, and
``(iv) the term `qualified plan
distribution annuity contract' means an annuity
contract purchased for a participant and
distributed to the participant by a plan or
contract described in subparagraph (B) of
section 402(c)(8) (without regard to clauses
(i) and (ii) thereof).''.
(b) Cash or Deferred Arrangement.--
(1) In general.--Clause (i) of section 401(k)(2)(B) of the
Internal Revenue Code of 1986 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
the following new subclause:
``(VI) except as may be otherwise
provided by regulations, with respect
to amounts invested in a lifetime
income investment (as defined in
subsection (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 arrangement, and''.
(2) Distribution requirement.--Subparagraph (B) of section
401(k)(2) of such Code, as amended by paragraph (1), is amended
by striking ``and'' at the end of clause (i), by striking the
semicolon at the end of clause (ii) and inserting ``, and'',
and by adding at the end the following new clause:
``(iii) except as may be otherwise provided
by regulations, in the case of amounts
described in clause (i)(VI), will be
distributed only in the form of a qualified
distribution (as defined in subsection
(a)(38)(B)(i)) or a qualified plan distribution
annuity contract (as defined in subsection
(a)(38)(B)(iv)),''.
(c) Section 403(b) Plans.--
(1) Annuity contracts.--Paragraph (11) of section 403(b) of
the Internal Revenue Code of 1986 is amended by striking ``or''
at the end of subparagraph (B), by striking the period at the
end of subparagraph (C) and inserting ``, or'', and by
inserting after subparagraph (C) the following new
subparagraph:
``(D) except as may be otherwise provided by
regulations, with respect to amounts invested in a
lifetime income investment (as defined in section
401(a)(38)(B)(ii))--
``(i) on or after 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 contract, and
``(ii) 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)).''.
(2) Custodial accounts.--Subparagraph (A) of section
403(b)(7) of such Code is amended by striking ``if--'' and all
that follows and inserting ``if the amounts are to be invested
in regulated investment company stock to be held in that
custodial account, and under the custodial account--
``(i) 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) except as may be otherwise
provided by regulations, 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 contract, and
``(ii) in the case of amounts described in
clause (i)(VI), such amounts will be
distributed only 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)).''.
(d) Eligible Deferred Compensation Plans.--
(1) In general.--Subparagraph (A) of section 457(d)(1) of
the Internal Revenue Code of 1986 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) except as may be otherwise provided
by regulations, in the case of a plan
maintained by an employer described in
subsection (e)(1)(A), 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,''.
(2) Distribution requirement.--Paragraph (1) of section
457(d) of such Code is amended by striking ``and'' at the end
of subparagraph (B), by striking the period at the end of
subparagraph (C) and inserting ``, and'', and by inserting
after subparagraph (C) the following new subparagraph:
``(D) except as may be otherwise provided by
regulations, in the case of amounts described in
subparagraph (A)(iv), such amounts will be distributed
only 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)).''.
(e) Effective Date.--The amendments made by this section shall
apply to plan years beginning after December 31, 2018.
SEC. 112. TREATMENT OF CUSTODIAL ACCOUNTS ON TERMINATION OF SECTION
403(B) PLANS.
(a) In General.--Section 403(b)(7) of the Internal Revenue Code of
1986 is amended by adding at the end the following:
``(D) Treatment of custodial account upon plan
termination.--
``(i) In general.--If--
``(I) an employer terminates the
plan under which amounts are
contributed to a custodial account
under subparagraph (A), and
``(II) the person holding the
assets of the account has demonstrated
to the satisfaction of the Secretary
under section 408(a)(2) that the person
is qualified to be a trustee of an
individual retirement plan,
then, as of the date of the termination, the
custodial account shall be deemed to be an
individual retirement plan for purposes of this
title.
``(ii) Treatment as roth ira.--Any
custodial account treated as an individual
retirement plan under clause (i) shall be
treated as a Roth IRA only if the custodial
account was a designated Roth account.''.
(b) Effective Date.--The amendment made by this section shall apply
to plan terminations occurring after December 31, 2018.
SEC. 113. CLARIFICATION OF RETIREMENT INCOME ACCOUNT RULES RELATING TO
CHURCH-CONTROLLED ORGANIZATIONS.
(a) In General.--Subparagraph (B) of section 403(b)(9) of the
Internal Revenue Code of 1986 is amended by inserting ``(including an
employee described in section 414(e)(3)(B))'' after ``employee
described in paragraph (1)''.
(b) Effective Date.--The amendment made by this section shall apply
to years beginning before, on, or after the date of the enactment of
this Act.
TITLE II--ADMINISTRATIVE IMPROVEMENTS
SEC. 201. PLAN ADOPTED BY FILING DUE DATE FOR YEAR MAY BE TREATED AS IN
EFFECT AS OF CLOSE OF YEAR.
(a) In General.--Subsection (b) of section 401 of the Internal
Revenue Code of 1986 is amended--
(1) by striking ``Retroactive Changes in Plan.--A stock
bonus'' and inserting ``Plan Amendments.--
``(1) Certain retroactive changes in plan.--A stock
bonus''; and
(2) by adding at the end the following new paragraph:
``(2) Adoption of plan.--If an employer adopts a stock
bonus, pension, profit-sharing, or annuity plan after the close
of a taxable year but before the time prescribed by law for
filing the return of the employer for the taxable year
(including extensions thereof), the employer may elect to treat
the plan as having been adopted as of the last day of the
taxable year.''.
(b) Effective Date.--The amendments made by this section shall
apply to plans adopted for taxable years beginning after December 31,
2018.
SEC. 202. COMBINED ANNUAL REPORT FOR GROUP OF PLANS.
(a) In General.--The Secretary of the Treasury and the Secretary of
Labor shall, in cooperation, modify the returns required under section
6058 of the Internal Revenue Code of 1986 and the reports required by
section 104 of the Employee Retirement Income Security Act of 1974 (29
U.S.C. 1024) so that all members of a group of plans described in
subsection (c) may file a single aggregated annual return or report
satisfying the requirements of both such sections.
(b) Administrative Requirements.--In developing the consolidated
return or report under subsection (a), the Secretary of the Treasury
and the Secretary of Labor may require such return or report to include
any information regarding each plan in the group as such Secretaries
determine is necessary or appropriate for the enforcement and
administration of the Internal Revenue Code of 1986 and the Employee
Retirement Income Security Act of 1974.
(c) Plans Described.--A group of plans is described in this
subsection if all plans in the group--
(1) are individual account plans or defined contribution
plans (as defined in section 3(34) of the Employee Retirement
Income Security Act of 1974 (29 U.S.C. 1002(34)) or in section
414(i) of the Internal Revenue Code of 1986);
(2) have--
(A) the same trustee (as described in section
403(a) of such Act (29 U.S.C. 1103(a)));
(B) the same one or more named fiduciaries (as
described in section 402(a) of such Act (29 U.S.C.
1102(a)));
(C) the same administrator (as defined in section
3(16)(A) of such Act (29 U.S.C. 1002(16)(A))) and plan
administrator (as defined in section 414(g) of the
Internal Revenue Code of 1986); and
(D) plan years beginning on the same date; and
(3) provide the same investments or investment options to
participants and beneficiaries.
A plan not subject to title I of the Employee Retirement Income
Security Act of 1974 shall be treated as meeting the requirements of
paragraph (2) as part of a group of plans if the same person that
performs each of the functions described in such paragraph, as
applicable, for all other plans in such group performs each of such
functions for such plan.
(d) Clarification Relating to Electronic Filing of Returns for
Deferred Compensation Plans.--
(1) In general.--Section 6011(e) of the Internal Revenue
Code of 1986 is amended by adding at the end the following new
paragraph:
``(6) Application of numerical limitation to returns
relating to deferred compensation plans.--For purposes of
applying the numerical limitation under paragraph (2)(A) to any
return required under section 6058, information regarding each
plan for which information is provided on such return shall be
treated as a separate return.''.
(2) Effective date.--The amendment made by paragraph (1)
shall apply to returns required to be filed with respect to
plan years beginning after December 31, 2018.
(e) Effective Date.--The modification required by subsection (a)
shall be implemented not later than January 1, 2021, and shall apply to
returns and reports for plan years beginning after December 31, 2020.
SEC. 203. DISCLOSURE REGARDING LIFETIME INCOME.
(a) In General.--Subparagraph (B) of section 105(a)(2) of the
Employee Retirement Income Security Act of 1974 (29 U.S.C. 1025(a)(2))
is amended--
(1) in clause (i), by striking ``and'' at the end;
(2) in clause (ii), by striking ``diversification.'' and
inserting ``diversification, and''; and
(3) by inserting at the end the following:
``(iii) the lifetime income disclosure
described in subparagraph (D)(i).
In the case of pension benefit statements described in
clause (i) of paragraph (1)(A), a lifetime income
disclosure under clause (iii) of this subparagraph
shall be required to be included in only one pension
benefit statement during any one 12-month period.''.
(b) Lifetime Income.--Paragraph (2) of section 105(a) of the
Employee Retirement Income Security Act of 1974 (29 U.S.C. 1025(a)) is
amended by adding at the end the following new subparagraph:
``(D) Lifetime income disclosure.--
``(i) In general.--
``(I) Disclosure.--A lifetime
income disclosure shall set forth the
lifetime income stream equivalent of
the total benefits accrued with respect
to the participant or beneficiary.
``(II) Lifetime income stream
equivalent of the total benefits
accrued.--For purposes of this
subparagraph, the term `lifetime income
stream equivalent of the total benefits
accrued' means the amount of monthly
payments the participant or beneficiary
would receive if the total accrued
benefits of such participant or
beneficiary were used to provide
lifetime income streams described in
subclause (III), based on assumptions
specified in rules prescribed by the
Secretary.
``(III) Lifetime income streams.--
The lifetime income streams described
in this subclause are a qualified joint
and survivor annuity (as defined in
section 205(d)), based on assumptions
specified in rules prescribed by the
Secretary, including the assumption
that the participant or beneficiary has
a spouse of equal age, and a single
life annuity. Such lifetime income
streams may have a term certain or
other features to the extent permitted
under rules prescribed by the
Secretary.
``(ii) Model disclosure.--Not later than 1
year after the date of the enactment of the
Retirement Enhancement and Savings Act of 2019,
the Secretary shall issue a model lifetime
income disclosure, written in a manner so as to
be understood by the average plan participant,
which--
``(I) explains that the lifetime
income stream equivalent is only
provided as an illustration;
``(II) explains that the actual
payments under the lifetime income
stream described in clause (i)(III)
which may be purchased with the total
benefits accrued will depend on
numerous factors and may vary
substantially from the lifetime income
stream equivalent in the disclosures;
``(III) explains the assumptions
upon which the lifetime income stream
equivalent was determined; and
``(IV) provides such other similar
explanations as the Secretary considers
appropriate.
``(iii) Assumptions and rules.--Not later
than 1 year after the date of the enactment of
the Retirement Enhancement and Savings Act of
2019, the Secretary shall--
``(I) prescribe assumptions which
administrators of individual account
plans may use in converting total
accrued benefits into lifetime income
stream equivalents for purposes of this
subparagraph; and
``(II) issue interim final rules
under clause (i).
In prescribing assumptions under subclause (I),
the Secretary may prescribe a single set of
specific assumptions (in which case the
Secretary may issue tables or factors which
facilitate such conversions), or ranges of
permissible assumptions. To the extent that an
accrued benefit is or may be invested in a
lifetime income stream described in clause
(i)(III), the assumptions prescribed under
subclause (I) shall, to the extent appropriate,
permit administrators of individual account
plans to use the amounts payable under such
lifetime income stream as a lifetime income
stream equivalent.
``(iv) Limitation on liability.--No plan
fiduciary, plan sponsor, or other person shall
have any liability under this title solely by
reason of the provision of lifetime income
stream equivalents which are derived in
accordance with the assumptions and rules
described in clause (iii) and which include the
explanations contained in the model lifetime
income disclosure described in clause (ii).
This clause shall apply without regard to
whether the provision of such lifetime income
stream equivalent is required by subparagraph
(B)(iii).
``(v) Effective date.--The requirement in
subparagraph (B)(iii) shall apply to pension
benefit statements furnished more than 12
months after the latest of the issuance by the
Secretary of--
``(I) interim final rules under
clause (i);
``(II) the model disclosure under
clause (ii); or
``(III) the assumptions under
clause (iii).''.
SEC. 204. FIDUCIARY SAFE HARBOR FOR SELECTION OF LIFETIME INCOME
PROVIDER.
Section 404 of the Employee Retirement Income Security Act of 1974
(29 U.S.C. 1104) is amended by adding at the end the following:
``(e) Safe Harbor for Annuity Selection.--
``(1) In general.--With respect to the selection of an
insurer for a guaranteed retirement income contract, the
requirements of subsection (a)(1)(B) will be deemed to be
satisfied if a fiduciary--
``(A) engages in an objective, thorough, and
analytical search for the purpose of identifying
insurers from which to purchase such contracts;
``(B) with respect to each insurer identified under
subparagraph (A)--
``(i) considers the financial capability of
such insurer to satisfy its obligations under
the guaranteed retirement income contract; and
``(ii) considers the cost (including fees
and commissions) of the guaranteed retirement
income contract offered by the insurer in
relation to the benefits and product features
of the contract and administrative services to
be provided under such contract; and
``(C) on the basis of such consideration, concludes
that--
``(i) at the time of the selection, the
insurer is financially capable of satisfying
its obligations under the guaranteed retirement
income contract; and
``(ii) the relative cost of the selected
guaranteed retirement income contract as
described in subparagraph (B)(ii) is
reasonable.
``(2) Financial capability of the insurer.--A fiduciary
will be deemed to satisfy the requirements of paragraphs
(1)(B)(i) and (1)(C)(i) if--
``(A) the fiduciary obtains written representations
from the insurer that--
``(i) the insurer is licensed to offer
guaranteed retirement income contracts;
``(ii) the insurer, at the time of
selection and for each of the immediately
preceding 7 plan years--
``(I) operates under a certificate
of authority from the insurance
commissioner of its domiciliary State
which has not been revoked or
suspended;
``(II) has filed audited financial
statements in accordance with the laws
of its domiciliary State under
applicable statutory accounting
principles;
``(III) maintains (and has
maintained) reserves which satisfies
all the statutory requirements of all
States where the insurer does business;
and
``(IV) is not operating under an
order of supervision, rehabilitation,
or liquidation;
``(iii) the insurer undergoes, at least
every 5 years, a financial examination (within
the meaning of the law of its domiciliary
State) by the insurance commissioner of the
domiciliary State (or representative, designee,
or other party approved by such commissioner);
and
``(iv) the insurer will notify the
fiduciary of any change in circumstances
occurring after the provision of the
representations in clauses (i), (ii), and (iii)
which would preclude the insurer from making
such representations at the time of issuance of
the guaranteed retirement income contract; and
``(B) after receiving such representations and as
of the time of selection, the fiduciary has not
received any notice described in subparagraph (A)(iv)
and is in possession of no other information which
would cause the fiduciary to question the
representations provided.
``(3) No requirement to select lowest cost.--Nothing in
this subsection shall be construed to require a fiduciary to
select the lowest cost contract. A fiduciary may consider the
value of a contract, including features and benefits of the
contract and attributes of the insurer (including, without
limitation, the insurer's financial strength) in conjunction
with the cost of the contract.
``(4) Time of selection.--
``(A) In general.--For purposes of this subsection,
the time of selection is--
``(i) the time that the insurer and the
contract are selected for distribution of
benefits to a specific participant or
beneficiary; or
``(ii) if the fiduciary periodically
reviews the continuing appropriateness of the
conclusion described in paragraph (1)(C) with
respect to a selected insurer, taking into
account the considerations described in such
paragraph, the time that the insurer and the
contract are selected to provide benefits at
future dates to participants or beneficiaries
under the plan.
Nothing in the preceding sentence shall be construed to
require the fiduciary to review the appropriateness of
a selection after the purchase of a contract for a
participant or beneficiary.
``(B) Periodic review.--A fiduciary will be deemed
to have conducted the periodic review described in
subparagraph (A)(ii) if the fiduciary obtains the
written representations described in clauses (i), (ii),
and (iii) of paragraph (2)(A) from the insurer on an
annual basis, unless the fiduciary receives any notice
described in paragraph (2)(A)(iv) or otherwise becomes
aware of facts that would cause the fiduciary to
question such representations.
``(5) Limited liability.--A fiduciary which satisfies the
requirements of this subsection shall not be liable following
the distribution of any benefit, or the investment by or on
behalf of a participant or beneficiary pursuant to the selected
guaranteed retirement income contract, for any losses that may
result to the participant or beneficiary due to an insurer's
inability to satisfy its financial obligations under the terms
of such contract.
``(6) Definitions.--For purposes of this subsection--
``(A) Insurer.--The term `insurer' means an
insurance company, insurance service, or insurance
organization, including affiliates of such companies.
``(B) Guaranteed retirement income contract.--The
term `guaranteed retirement income contract' means an
annuity contract for a fixed term or a contract (or
provision or feature thereof) which provides guaranteed
benefits annually (or more frequently) for at least the
remainder of the life of the participant or the joint
lives of the participant and the participant's
designated beneficiary as part of an individual account
plan.''.
SEC. 205. MODIFICATION OF NONDISCRIMINATION RULES TO PROTECT OLDER,
LONGER SERVICE PARTICIPANTS.
(a) In General.--Section 401 of the Internal Revenue Code of 1986
is amended--
(1) by redesignating subsection (o) as subsection (p); and
(2) by inserting after subsection (n) the following new
subsection:
``(o) Special Rules for Applying Nondiscrimination Rules To Protect
Older, Longer Service and Grandfathered Participants.--
``(1) Testing of defined benefit plans with closed classes
of participants.--
``(A) Benefits, rights, or features provided to
closed classes.--A defined benefit plan which provides
benefits, rights, or features to a closed class of
participants shall not fail to satisfy the requirements
of subsection (a)(4) by reason of the composition of
such closed class or the benefits, rights, or features
provided to such closed class, if--
``(i) for the plan year as of which the
class closes and the 2 succeeding plan years,
such benefits, rights, and features satisfy the
requirements of subsection (a)(4) (without
regard to this subparagraph but taking into
account the rules of subparagraph (I)),
``(ii) after the date as of which the class
was closed, any plan amendment which modifies
the closed class or the benefits, rights, and
features provided to such closed class does not
discriminate significantly in favor of highly
compensated employees, and
``(iii) the class was closed before
September 21, 2016, or the plan is described in
subparagraph (C).
``(B) Aggregate testing with defined contribution
plans permitted on a benefits basis.--
``(i) In general.--For purposes of
determining compliance with subsection (a)(4)
and section 410(b), a defined benefit plan
described in clause (iii) may be aggregated and
tested on a benefits basis with 1 or more
defined contribution plans, including with the
portion of 1 or more defined contribution plans
which--
``(I) provides matching
contributions (as defined in subsection
(m)(4)(A)),
``(II) provides annuity contracts
described in section 403(b) which are
purchased with matching contributions
or nonelective contributions, or
``(III) consists of an employee
stock ownership plan (within the
meaning of section 4975(e)(7)) or a tax
credit employee stock ownership plan
(within the meaning of section 409(a)).
``(ii) Special rules for matching
contributions.--For purposes of clause (i), if
a defined benefit plan is aggregated with a
portion of a defined contribution plan
providing matching contributions--
``(I) such defined benefit plan
must also be aggregated with any
portion of such defined contribution
plan which provides elective deferrals
described in subparagraph (A) or (C) of
section 402(g)(3), and
``(II) such matching contributions
shall be treated in the same manner as
nonelective contributions, including
for purposes of applying the rules of
subsection (l).
``(iii) Plans described.--A defined benefit
plan is described in this clause if--
``(I) the plan provides benefits to
a closed class of participants,
``(II) for the plan year as of
which the class closes and the 2
succeeding plan years, the plan
satisfies the requirements of section
410(b) and subsection (a)(4) (without
regard to this subparagraph but taking
into account the rules of subparagraph
(I)),
``(III) after the date as of which
the class was closed, any plan
amendment which modifies the closed
class or the benefits provided to such
closed class does not discriminate
significantly in favor of highly
compensated employees, and
``(IV) the class was closed before
September 21, 2016, or the plan is
described in subparagraph (C).
``(C) Plans described.--A plan is described in this
subparagraph if, taking into account any predecessor
plan--
``(i) such plan has been in effect for at
least 5 years as of the date the class is
closed, and
``(ii) during the 5-year period preceding
the date the class is closed, there has not
been a substantial increase in the coverage or
value of the benefits, rights, or features
described in subparagraph (A) or in the
coverage or benefits under the plan described
in subparagraph (B)(iii) (whichever is
applicable).
``(D) Determination of substantial increase for
benefits, rights, and features.--In applying
subparagraph (C)(ii) for purposes of subparagraph
(A)(iii), a plan shall be treated as having had a
substantial increase in coverage or value of the
benefits, rights, or features described in subparagraph
(A) during the applicable 5-year period only if, during
such period--
``(i) the number of participants covered by
such benefits, rights, or features on the date
such period ends is more than 50 percent
greater than the number of such participants on
the first day of the plan year in which such
period began, or
``(ii) such benefits, rights, and features
have been modified by 1 or more plan amendments
in such a way that, as of the date the class is
closed, the value of such benefits, rights, and
features to the closed class as a whole is
substantially greater than the value as of the
first day of such 5-year period, solely as a
result of such amendments.
``(E) Determination of substantial increase for
aggregate testing on benefits basis.--In applying
subparagraph (C)(ii) for purposes of subparagraph
(B)(iii)(IV), a plan shall be treated as having had a
substantial increase in coverage or benefits during the
applicable 5-year period only if, during such period--
``(i) the number of participants benefiting
under the plan on the date such period ends is
more than 50 percent greater than the number of
such participants on the first day of the plan
year in which such period began, or
``(ii) the average benefit provided to such
participants on the date such period ends is
more than 50 percent greater than the average
benefit provided on the first day of the plan
year in which such period began.
``(F) Certain employees disregarded.--For purposes
of subparagraphs (D) and (E), any increase in coverage
or value or in coverage or benefits, whichever is
applicable, which is attributable to such coverage and
value or coverage and benefits provided to employees--
``(i) who became participants as a result
of a merger, acquisition, or similar event
which occurred during the 7-year period
preceding the date the class is closed, or
``(ii) who became participants by reason of
a merger of the plan with another plan which
had been in effect for at least 5 years as of
the date of the merger,
shall be disregarded, except that clause (ii) shall
apply for purposes of subparagraph (D) only if, under
the merger, the benefits, rights, or features under 1
plan are conformed to the benefits, rights, or features
of the other plan prospectively.
``(G) Rules relating to average benefit.--For
purposes of subparagraph (E)--
``(i) the average benefit provided to
participants under the plan will be treated as
having remained the same between the 2 dates
described in subparagraph (E)(ii) if the
benefit formula applicable to such participants
has not changed between such dates, and
``(ii) if the benefit formula applicable to
1 or more participants under the plan has
changed between such 2 dates, then the average
benefit under the plan shall be considered to
have increased by more than 50 percent only
if--
``(I) the total amount determined
under section 430(b)(1)(A)(i) for all
participants benefiting under the plan
for the plan year in which the 5-year
period described in subparagraph (E)
ends, exceeds
``(II) the total amount determined
under section 430(b)(1)(A)(i) for all
such participants for such plan year,
by using the benefit formula in effect
for each such participant for the first
plan year in such 5-year period,
by more than 50 percent. In the case of a CSEC
plan (as defined in section 414(y)), the normal
cost of the plan (as determined under section
433(j)(1)(B)) shall be used in lieu of the
amount determined under section
430(b)(1)(A)(i).
``(H) Treatment as single plan.--For purposes of
subparagraphs (E) and (G), a plan described in section
413(c) shall be treated as a single plan rather than as
separate plans maintained by each participating
employer.
``(I) Special rules.--For purposes of subparagraphs
(A)(i) and (B)(iii)(II), the following rules shall
apply:
``(i) In applying section 410(b)(6)(C), the
closing of the class of participants shall not
be treated as a significant change in coverage
under section 410(b)(6)(C)(i)(II).
``(ii) Two or more plans shall not fail to
be eligible to be aggregated and treated as a
single plan solely by reason of having
different plan years.
``(iii) Changes in the employee population
shall be disregarded to the extent attributable
to individuals who become employees or cease to
be employees, after the date the class is
closed, by reason of a merger, acquisition,
divestiture, or similar event.
``(iv) Aggregation and all other testing
methodologies otherwise applicable under
subsection (a)(4) and section 410(b) may be
taken into account.
The rule of clause (ii) shall also apply for purposes
of determining whether plans to which subparagraph
(B)(i) applies may be aggregated and treated as 1 plan
for purposes of determining whether such plans meet the
requirements of subsection (a)(4) and section 410(b).
``(J) Spun-off plans.--For purposes of this
paragraph, if a portion of a defined benefit plan
described in subparagraph (A) or (B)(iii) is spun off
to another employer and the spun-off plan continues to
satisfy the requirements of--
``(i) subparagraph (A)(i) or (B)(iii)(II),
whichever is applicable, if the original plan
was still within the 3-year period described in
such subparagraph at the time of the spin off,
and
``(ii) subparagraph (A)(ii) or
(B)(iii)(III), whichever is applicable,
the treatment under subparagraph (A) or (B) of the
spun-off plan shall continue with respect to such other
employer.
``(2) Testing of defined contribution plans.--
``(A) Testing on a benefits basis.--A defined
contribution plan shall be permitted to be tested on a
benefits basis if--
``(i) such defined contribution plan
provides make-whole contributions to a closed
class of participants whose accruals under a
defined benefit plan have been reduced or
eliminated,
``(ii) for the plan year of the defined
contribution plan as of which the class
eligible to receive such make-whole
contributions closes and the 2 succeeding plan
years, such closed class of participants
satisfies the requirements of section
410(b)(2)(A)(i) (determined by applying the
rules of paragraph (1)(I)),
``(iii) after the date as of which the
class was closed, any plan amendment to the
defined contribution plan which modifies the
closed class or the allocations, benefits,
rights, and features provided to such closed
class does not discriminate significantly in
favor of highly compensated employees, and
``(iv) the class was closed before
September 21, 2016, or the defined benefit plan
under clause (i) is described in paragraph
(1)(C) (as applied for purposes of paragraph
(1)(B)(iii)(IV)).
``(B) Aggregation with plans including matching
contributions.--
``(i) In general.--With respect to 1 or
more defined contribution plans described in
subparagraph (A), for purposes of determining
compliance with subsection (a)(4) and section
410(b), the portion of such plans which
provides make-whole contributions or other
nonelective contributions may be aggregated and
tested on a benefits basis with the portion of
1 or more other defined contribution plans
which--
``(I) provides matching
contributions (as defined in subsection
(m)(4)(A)),
``(II) provides annuity contracts
described in section 403(b) which are
purchased with matching contributions
or nonelective contributions, or
``(III) consists of an employee
stock ownership plan (within the
meaning of section 4975(e)(7)) or a tax
credit employee stock ownership plan
(within the meaning of section 409(a)).
``(ii) Special rules for matching
contributions.--Rules similar to the rules of
paragraph (1)(B)(ii) shall apply for purposes
of clause (i).
``(C) Special rules for testing defined
contribution plan features providing matching
contributions to certain older, longer service
participants.--In the case of a defined contribution
plan which provides benefits, rights, or features to a
closed class of participants whose accruals under a
defined benefit plan have been reduced or eliminated,
the plan shall not fail to satisfy the requirements of
subsection (a)(4) solely by reason of the composition
of the closed class or the benefits, rights, or
features provided to such closed class if the defined
contribution plan and defined benefit plan otherwise
meet the requirements of subparagraph (A) but for the
fact that the make-whole contributions under the
defined contribution plan are made in whole or in part
through matching contributions.
``(D) Spun-off plans.--For purposes of this
paragraph, if a portion of a defined contribution plan
described in subparagraph (A) or (C) is spun off to
another employer, the treatment under subparagraph (A)
or (C) of the spun-off plan shall continue with respect
to the other employer if such plan continues to comply
with the requirements of clauses (ii) (if the original
plan was still within the 3-year period described in
such clause at the time of the spin off) and (iii) of
subparagraph (A), as determined for purposes of
subparagraph (A) or (C), whichever is applicable.
``(3) Definitions.--For purposes of this subsection--
``(A) Make-whole contributions.--Except as
otherwise provided in paragraph (2)(C), the term `make-
whole contributions' means nonelective allocations for
each employee in the class which are reasonably
calculated, in a consistent manner, to replace some or
all of the retirement benefits which the employee would
have received under the defined benefit plan and any
other plan or qualified cash or deferred arrangement
under subsection (k)(2) if no change had been made to
such defined benefit plan and such other plan or
arrangement. For purposes of the preceding sentence,
consistency shall not be required with respect to
employees who were subject to different benefit
formulas under the defined benefit plan.
``(B) References to closed class of participants.--
References to a closed class of participants and
similar references to a closed class shall include
arrangements under which 1 or more classes of
participants are closed, except that 1 or more classes
of participants closed on different dates shall not be
aggregated for purposes of determining the date any
such class was closed.
``(C) Highly compensated employee.--The term
`highly compensated employee' has the meaning given
such term in section 414(q).''.
(b) Participation Requirements.--Paragraph (26) of section 401(a)
of the Internal Revenue Code of 1986 is amended by adding at the end
the following new subparagraph:
``(I) Protected participants.--
``(i) In general.--A plan shall be deemed
to satisfy the requirements of subparagraph (A)
if--
``(I) the plan is amended--
``(aa) to cease all benefit
accruals, or
``(bb) to provide future
benefit accruals only to a
closed class of participants,
``(II) the plan satisfies
subparagraph (A) (without regard to
this subparagraph) as of the effective
date of the amendment, and
``(III) the amendment was adopted
before September 21, 2016, or the plan
is described in clause (ii).
``(ii) Plans described.--A plan is
described in this clause if the plan would be
described in subsection (o)(1)(C), as applied
for purposes of subsection (o)(1)(B)(iii)(IV)
and by treating the effective date of the
amendment as the date the class was closed for
purposes of subsection (o)(1)(C).
``(iii) Special rules.--For purposes of
clause (i)(II), in applying section
410(b)(6)(C), the amendments described in
clause (i) shall not be treated as a
significant change in coverage under section
410(b)(6)(C)(i)(II).
``(iv) Spun-off plans.--For purposes of
this subparagraph, if a portion of a plan
described in clause (i) is spun off to another
employer, the treatment under clause (i) of the
spun-off plan shall continue with respect to
the other employer.''.
(c) Effective Date.--
(1) In general.--Except as provided in paragraph (2), 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 referred to in such amendments are adopted
or effective before, on, or after such date of enactment.
(2) Special rules.--
(A) Election of earlier application.--At the
election of the plan sponsor, the amendments made by
this section shall apply to plan years beginning after
December 31, 2013.
(B) Closed classes of participants.--For purposes
of paragraphs (1)(A)(iii), (1)(B)(iii)(IV), and
(2)(A)(iv) of section 401(o) of the Internal Revenue
Code of 1986 (as added by this section), a closed class
of participants shall be treated as being closed before
September 21, 2016, if the plan sponsor's intention to
create such closed class is reflected in formal written
documents and communicated to participants before such
date.
(C) Certain post-enactment plan amendments.--A plan
shall not be treated as failing to be eligible for the
application of section 401(o)(1)(A), 401(o)(1)(B)(iii),
or 401(a)(26) of such Code (as added by this section)
to such plan solely because in the case of--
(i) such section 401(o)(1)(A), the plan was
amended before the date of the enactment of
this Act to eliminate 1 or more benefits,
rights, or features, and is further amended
after such date of enactment to provide such
previously eliminated benefits, rights, or
features to a closed class of participants, or
(ii) such section 401(o)(1)(B)(iii) or
section 401(a)(26), the plan was amended before
the date of the enactment of this Act to cease
all benefit accruals, and is further amended
after such date of enactment to provide benefit
accruals to a closed class of participants.
Any such section shall only apply if the plan otherwise
meets the requirements of such section and in applying
such section, the date the class of participants is
closed shall be the effective date of the later
amendment.
SEC. 206. MODIFICATION OF PBGC PREMIUMS FOR CSEC PLANS.
(a) Flat Rate Premium.--Subparagraph (A) of section 4006(a)(3) of
the Employee Retirement Income Security Act of 1974 (29 U.S.C.
1306(a)(3)) is amended--
(1) in clause (i), by striking ``plan,'' and inserting
``plan other than a CSEC plan (as defined in section
210(f)(1))'';
(2) in clause (v), by striking ``or'' at the end;
(3) in clause (vi), by striking the period at the end and
inserting ``, or''; and
(4) by adding at the end the following new clause:
``(vii) in the case of a CSEC plan (as
defined in section 210(f)(1)), for plan years
beginning after December 31, 2017, for each
individual who is a participant in such plan
during the plan year an amount equal to the sum
of--
``(I) the additional premium (if
any) determined under subparagraph (E),
and
``(II) $19.''.
(b) Variable Rate Premium.--
(1) Unfunded vested benefits.--
(A) In general.--Subparagraph (E) of section
4006(a)(3) of the Employee Retirement Income Security
Act of 1974 (29 U.S.C. 1306(a)(3)) is amended by adding
at the end the following new clause:
``(v) For purposes of clause (ii), in the
case of a CSEC plan (as defined in section
210(f)(1)), the term `unfunded vested benefits'
means, for plan years beginning after December
31, 2017, the excess (if any) of--
``(I) the funding liability of the
plan as determined under section
306(j)(5)(C) for the plan year by only
taking into account vested benefits,
over
``(II) the fair market value of
plan assets for the plan year which are
held by the plan on the valuation
date.''.
(B) Conforming amendment.--Clause (iii) of section
4006(a)(3)(E) of such Act (29 U.S.C. 1306(a)(3)(E)) is
amended by striking ``For purposes'' and inserting
``Except as provided in clause (v), for purposes''.
(2) Applicable dollar amount.--
(A) In general.--Paragraph (8) of section 4006(a)
of such Act (29 U.S.C. 1306(a)) is amended by adding at
the end the following new subparagraph:
``(E) CSEC plans.--In the case of a CSEC plan (as
defined in section 210(f)(1)), the applicable dollar
amount shall be $9.''.
(B) Conforming amendment.--Subparagraph (A) of
section 4006(a)(8) of such Act (29 U.S.C. 1306(a)(8))
is amended by striking ``(B) and (C)'' and inserting
``(B), (C), and (E)''.
TITLE III--BENEFITS RELATING TO UNITED STATES TAX COURT
SEC. 301. THRIFT SAVINGS PLAN CONTRIBUTIONS FOR JUDGES IN THE FEDERAL
EMPLOYEES RETIREMENT SYSTEM.
(a) In General.--Subsection (j)(3)(B) of section 7447 of the
Internal Revenue Code of 1986 is amended to read as follows:
``(B) Contributions for benefit of judge.--No
contributions under section 8432(c) of title 5, United
States Code, shall be made for the benefit of a judge
who has filed an election to receive retired pay under
subsection (e).''.
(b) Offset.--Paragraph (3) of section 7447(j) of the Internal
Revenue Code of 1986 is amended by adding at the end the following new
subparagraph:
``(F) Offset.--In the case of a judge who receives
a distribution from the Thrift Savings Plan and who
later receives retired pay under subsection (d), the
retired pay shall be offset by an amount equal to the
amount of the distribution which represents the
Government's contribution to the individual's Thrift
Savings Account during years of service as a full-time
judicial officer under the Federal Employees Retirement
System, without regard to earnings attributable to such
amount. Where such an offset would exceed 50 percent of
the retired pay to be received in the first year, the
offset may be divided equally over the first 2 years in
which the individual receives the annuity.''.
(c) Effective Date.--The amendments made by this section shall
apply to basic pay earned while serving as a judge of the United States
Tax Court on or after the date of the enactment of this Act.
SEC. 302. CHANGE IN VESTING PERIOD FOR SURVIVOR ANNUITIES AND WAIVER OF
VESTING PERIOD IN THE EVENT OF ASSASSINATION.
(a) Eligibility in Case of Death by Assassination.--Subsection (h)
of section 7448 of the Internal Revenue Code of 1986 is amended to read
as follows:
``(h) Entitlement to Annuity.--
``(1) In general.--
``(A) Annuity to surviving spouse.--If a judge or
magistrate judge of the Tax Court described in
paragraph (2) is survived by a surviving spouse but not
by a dependent child, there shall be paid to such
surviving spouse an annuity beginning with the day of
the death of the judge or magistrate judge of the Tax
Court or following the surviving spouse's attainment of
age 50, whichever is the later, in an amount computed
as provided in subsection (m).
``(B) Annuity to surviving spouse and child.--If a
judge or magistrate judge of the Tax Court described in
paragraph (2) is survived by a surviving spouse and
dependent child or children, there shall be paid to
such surviving spouse an annuity, beginning on the day
of the death of the judge or magistrate judge of the
Tax Court, in an amount computed as provided in
subsection (m), and there shall also be paid to or on
behalf of each such child an immediate annuity equal to
the lesser of--
``(i) 10 percent of the average annual
salary of such judge or magistrate judge of the
Tax Court (determined in accordance with
subsection (m)), or
``(ii) 20 percent of such average annual
salary, divided by the number of such children.
``(C) Annuity to surviving dependent children.--If
a judge or magistrate judge of the Tax Court described
in paragraph (2) leaves no surviving spouse but leaves
a surviving dependent child or children, there shall be
paid to or on behalf of each such child an immediate
annuity equal to the lesser of--
``(i) 20 percent of the average annual
salary of such judge or magistrate judge of the
Tax Court (determined in accordance with
subsection (m)), or
``(ii) 40 percent of such average annual
salary divided by the number of such children.
``(2) Covered judges.--Paragraph (1) applies to any judge
or magistrate judge of the Tax Court electing under subsection
(b)--
``(A) who dies while a judge or magistrate judge of
the Tax Court after having rendered at least 18 months
of civilian service computed as prescribed in
subsection (n), for the last 18 months of which the
salary deductions provided for by subsection (c)(1) or
the deposits required by subsection (d) have actually
been made or the salary deductions required by the
civil service retirement laws have actually been made,
or
``(B) who dies by assassination after having
rendered less than 18 months of civilian service
computed as prescribed in subsection (n) if, for the
period of such service, the salary deductions provided
for by subsection (c)(1) or the deposits required by
subsection (d) have actually been made.
``(3) Termination of annuity.--
``(A) Surviving spouse.--The annuity payable to a
surviving spouse under this subsection shall be
terminable upon such surviving spouse's death or such
surviving spouse's remarriage before attaining age 55.
``(B) Surviving child.--Any annuity payable to a
child under this subsection shall be terminable upon
the earliest of--
``(i) the child attainment of age 18,
``(ii) the child's marriage, or
``(iii) the child's death,
except that if such child is incapable of self-support
by reason of mental or physical disability the child's
annuity shall be terminable only upon death, marriage,
or recovery from such disability.
``(C) Dependent child after death of surviving
spouse.--In case of the death of a surviving spouse of
a judge or magistrate judge of the Tax Court leaving a
dependent child or children of the judge or magistrate
judge of the Tax Court surviving such spouse, the
annuity of such child or children shall be recomputed
and paid as provided in paragraph (1)(C).
``(D) Recomputation with respect to other dependent
children.--In any case in which the annuity of a
dependent child is terminated under this subsection,
the annuities of any remaining dependent child or
children based upon the service of the same judge or
magistrate judge of the Tax Court shall be recomputed
and paid as though the child whose annuity was so
terminated had not survived such judge.
``(E) Special rule for assassinated judges.--In the
case of a survivor of a judge or magistrate judge of
the Tax Court described in paragraph (2)(B), there
shall be deducted from the annuities otherwise payable
under this section an amount equal to the amount of
salary deductions that would have been made if such
deductions had been made for 18 months prior to the
death of the judge or magistrate judge of the Tax
Court.''.
(b) Definition of Assassination.--Section 7448(a) of the Internal
Revenue Code of 1986 is amended by adding at the end the following new
paragraph:
``(10) The terms `assassinated' and `assassination' mean
the killing of a judge or magistrate judge of the Tax Court
that is motivated by the performance by the judge or magistrate
judge of the Tax Court of his or her official duties.''.
(c) Determination of Assassination.--Subsection (i) of section 7448
of the Internal Revenue Code of 1986 is amended--
(1) by striking ``of Dependency and Disability.--
Questions'' and inserting ``by Chief Judge.--
``(1) Dependency and disability.--Questions''; and
(2) by adding at the end the following new paragraph:
``(2) Assassination.--The chief judge shall determine
whether the killing of a judge or magistrate judge of the Tax
Court was an assassination, subject to review only by the Tax
Court. The head of any Federal agency that investigates the
killing of a judge or magistrate judge of the Tax Court shall
provide to the chief judge any information that would assist
the chief judge in making such a determination.''.
(d) Computation of Annuities.--Subsection (m) of section 7448 of
the Internal Revenue Code of 1986 is amended--
(1) by striking ``Annuities.--The annuity'' and inserting
``Annuities.--
``(1) In general.--The annuity'';
(2) by striking ``the sum of (1) 1.5 percent'' and
inserting ``the sum of--
``(A) 1.5 percent'';
(3) by striking ``and (2) three-fourths of 1 percent'' and
inserting ``and
``(B) three-fourths of 1 percent'';
(4) by striking ``prior allowable service, except that''
and inserting ``prior allowable service,
except that''; and
(5) by adding at the end the following new paragraph:
``(2) Assassinated judges and magistrate judges of the tax
court.--In the case of a judge or magistrate judge of the Tax
Court who is assassinated and who has served less than 18
months, the annuity of the surviving spouse of such judge or
magistrate judge of the Tax Court shall be based upon the
average annual salary received by such judge or magistrate
judge of the Tax Court for judicial service.''.
(e) Other Benefits.--Section 7448 of the Internal Revenue Code of
1986 is amended by adding at the end the following new subsection:
``(u) Other Benefits in Case of Assassination.--In the case of a
judge or magistrate judge of the Tax Court who is assassinated, an
annuity shall be paid under this section notwithstanding a survivor's
eligibility for or receipt of benefits under chapter 81 of title 5,
United States Code, except that the annuity for which a surviving
spouse is eligible under this section shall be reduced to the extent
that the total benefits paid under this section and chapter 81 of that
title for any year would exceed the current salary for that year of the
office of the judge or magistrate judge of the Tax Court.''.
SEC. 303. COORDINATION OF RETIREMENT AND SURVIVOR ANNUITY WITH THE
FEDERAL EMPLOYEES RETIREMENT SYSTEM.
(a) Retirement.--Section 7447 of the Internal Revenue Code of 1986
is amended--
(1) by striking ``section 8331(8)'' in subsection (g)(2)(C)
and inserting ``sections 8331(8) and 8401(19)''; and
(2) by striking ``Civil Service Commission'' both places it
appears in subsection (i)(2) and inserting ``Office of
Personnel Management''.
(b) Annuities to Surviving Spouses and Dependent Children.--Section
7448 of the Internal Revenue Code of 1986 is amended--
(1) by striking ``section 8332'' in subsection (d) and
inserting ``sections 8332 and 8411''; and
(2) by striking ``section 8332'' in subsection (n) and
inserting ``sections 8332 and 8411''.
SEC. 304. LIMIT ON TEACHING COMPENSATION OF RETIRED JUDGES.
(a) In General.--Section 7447 of the Internal Revenue Code of 1986
is amended by adding at the end the following new subsection:
``(k) Teaching Compensation of Retired Judges.--For purposes of the
limitation under section 501(a) of the Ethics in Government Act of 1978
(5 U.S.C. App.), any compensation for teaching approved under section
502(a)(5) of such Act shall not be treated as outside earned income
when received by a judge of the United States Tax Court who has retired
under subsection (b) for teaching performed during any calendar year
for which such a judge has met the requirements of subsection (c), as
certified by the chief judge.''.
(b) Effective Date.--The amendment made by this section shall apply
to any individual serving as a retired judge of the United States Tax
Court on or after the date of the enactment of this Act.
SEC. 305. GENERAL PROVISIONS RELATING TO MAGISTRATE JUDGES OF THE TAX
COURT.
(a) Title of Special Trial Judge Changed to Magistrate Judge of the
Tax Court.--The heading of section 7443A of the Internal Revenue Code
of 1986 is amended by striking ``special trial judges'' and inserting
``magistrate judges of the tax court''.
(b) Appointment, Tenure, and Removal.--Subsection (a) of section
7443A of the Internal Revenue Code of 1986 is amended to read as
follows:
``(a) Appointment, Tenure, and Removal.--
``(1) Appointment.--The chief judge may, from time to time,
appoint and reappoint magistrate judges of the Tax Court for a
term of 8 years. The magistrate judges of the Tax Court shall
proceed under such rules as may be promulgated by the Tax
Court.
``(2) Removal.--
``(A) In general.--Except as provided in
subparagraph (B), removal of a magistrate judge of the
Tax Court during the term for which such magistrate
judge is appointed shall be only for incompetency,
misconduct, neglect of duty, or physical or mental
disability. Removal shall not occur unless a majority
of all the judges of the Tax Court concur in the order
of removal. Before any order of removal shall be
entered, a full specification of the charges shall be
furnished to the magistrate judge of the Tax Court, and
such magistrate judge shall be accorded by the judges
of the Tax Court an opportunity to be heard on the
charges.
``(B) Termination of office.--The office of a
magistrate judge of the Tax Court shall be terminated
if the judges of the Tax Court determine that the
services performed by such magistrate judge of the Tax
Court are no longer needed.''.
(c) Salary.--Subsection (d) of section 7443A of the Internal
Revenue Code of 1986 is amended to read as follows:
``(d) Salary.--Each magistrate judge of the Tax Court shall receive
salary--
``(1) at a rate equal to 92 percent of the rate for judges
of the Tax Court, and
``(2) in the same installments as such judges.''.
(d) Exemption From Federal Leave Provisions.--Section 7443A of the
Internal Revenue Code of 1986 is amended by adding at the end the
following new subsection:
``(f) Exemption From Federal Leave Provisions.--
``(1) In general.--A magistrate judge of the Tax Court
shall be exempt from the provisions of subchapter I of chapter
63 of title 5, United States Code.
``(2) Treatment of unused leave.--
``(A) After service as magistrate judge of the tax
court.--If an individual who is exempted under
paragraph (1) from the subchapter referred to in such
paragraph was previously subject to such subchapter
and, without a break in service, again becomes subject
to such subchapter on completion of the individual's
service as a magistrate judge of the Tax Court, the
unused annual leave and sick leave standing to the
individual's credit at the time such individual became
a magistrate judge of the Tax Court is deemed to have
remained to the individual's credit.
``(B) Computation of annuity.--In computing an
annuity under section 8339 or 8415 of title 5, United
States Code, the total service of an individual
specified in subparagraph (A) who retires on an
immediate annuity or dies leaving a survivor or
survivors entitled to an annuity includes, without
regard to the limitations imposed by subsection (f) of
section 8339 of such title 5, the days of unused sick
leave standing to the individual's credit at the time
such individual became a magistrate judge of the Tax
Court, except that such days will not be counted in
determining average pay or annuity eligibility.
``(C) Lump sum payment.--Any accumulated and
current accrued annual leave or vacation balances
credited to a magistrate judge of the Tax Court as of
the date of the enactment of this subsection shall be
paid in a lump sum at the time of separation from
service pursuant to the provisions and restrictions set
forth in section 5551 of such title 5 and related
provisions referred to in such section.''.
(e) Contempt Authority.--Section 7443A of the Internal Revenue Code
of 1986, as amended by this section, is amended by adding at the end
the following new subsection:
``(g) Incidental Powers.--A magistrate judge of the Tax Court
appointed under this section shall have the power to punish for
contempt of the authority of the Tax Court as provided in section
7456(c), except the sentence imposed by such a magistrate judge of the
Tax Court for any contempt shall not exceed the penalties for a Class C
misdemeanor as set forth in sections 3571(b)(6) and 3581(b)(8) of title
18, United States Code. This subsection shall not be construed to limit
the authority of a magistrate judge of the Tax Court to order sanctions
under any other statute or any rule of the Tax Court prescribed
pursuant to section 7453.''.
(f) Conforming Amendments.--
(1) The heading of subsection (b) of section 7443A of the
Internal Revenue Code of 1986 is amended by striking ``Special
Trial Judges'' and inserting ``Magistrate Judges of the Tax
Court''.
(2) Subsection (b) of section 7443A of such Code is amended
by striking ``special trial judges of the court'' and inserting
``magistrate judges of the Tax Court''.
(3) Subsection (c) of section 7443A of such Code is amended
by striking ``special trial judge'' and inserting ``magistrate
judge of the Tax Court''.
(4) Subsection (e) of section 7443A of such Code is amended
by striking ``special trial judges'' and inserting ``magistrate
judges of the Tax Court''.
(5) The item relating to section 7443A in the table of
sections for part I of subchapter C of chapter 76 of such Code
is amended to read as follows:
``Sec. 7443A. Magistrate judges of the Tax Court.''.
(6) The heading of section 7448 of such Code is amended by
striking ``special trial judges'' and inserting ``magistrate
judges of the tax court''.
(7) Section 7448 of such Code is amended--
(A) by striking ``special trial judge's'' each
place it appears in subsections (a)(6), (c)(1), (d),
and (m)(1) and inserting ``magistrate judge of the Tax
Court's''; and
(B) by striking ``special trial judge'' each place
it appears other than in subsection (n) and inserting
``magistrate judge of the Tax Court''.
(8) Subsection (n) of section 7448 of such Code is amended
to read as follows:
``(n) Includible Service.--Subject to the provisions of subsection
(d), the years of service of a judge or magistrate judge of the Tax
Court which are allowable as the basis for calculating the amount of
the annuity of such judge or magistrate judge's surviving spouse shall
include the judge or magistrate judge's years of service--
``(1) as a judge or magistrate judge of the Tax Court, a
special trial judge of the Tax Court, or a judge of the Tax
Court of the United States,
``(2) pursuant to any appointment under section 7443A,
``(3) as a Senator, Representative, Delegate, or Resident
Commissioner in Congress,
``(4) as a member of the Armed Forces of the United States
(not including any service for which credit is allowed for
purposes of retirement or retired pay under any other provision
of law), and
``(5) in any other civilian service within the purview of
section 8332 of title 5, United States Code.
For purposes of paragraph (4), not more than 5 years of service shall
be taken into account.''.
(9) The item relating to section 7448 in the table of
sections for part I of subchapter C of chapter 76 of such Code
is amended to read as follows:
``Sec. 7448. Annuities to surviving spouses and dependent children of
judges and magistrate judges of the Tax
Court.''.
(10) Subsection (a) of section 7456 of such Code is
amended--
(A) by striking ``special trial judge'' each place
it appears and inserting ``magistrate judge''; and
(B) by striking ``(or by the clerk'' and inserting
``of the Tax Court (or by the clerk''.
(11) Subsection (a) of section 7466 of such Code is amended
by striking ``special trial judge'' and inserting ``magistrate
judge''.
(12) Section 7470A of such Code is amended by striking
``special trial judges'' both places it appears in subsections
(a) and (b) and inserting ``magistrate judges''.
(13) Subparagraph (A) of section 7471(a)(2) of such Code is
amended by striking ``special trial judges'' and inserting
``magistrate judges''.
(14) Subsection (c) of section 7471 of such Code is
amended--
(A) by striking ``Special Trial Judges'' in the
heading and inserting ``Magistrate Judges of the Tax
Court''; and
(B) by striking ``special trial judges'' and
inserting ``magistrate judges''.
(g) Effective Date.--
(1) In general.--The amendments made by this section shall
apply to individuals serving as special trial judges of the
United States Tax Court on or after the day before the date of
enactment of this Act.
(2) Appointment savings provision.--Any individual serving
as a special trial judge of the United States Tax Court as of
the day before the date of the enactment of this Act shall be
considered to have been appointed as a magistrate judge of the
Tax Court under section 7443A of the Internal Revenue Code of
1986 on such date of enactment, and service as a special trial
judge of the Tax Court before such date of enactment shall be
considered to be service as a magistrate judge of the Tax Court
for purposes of any provision of law relating to length of
service.
SEC. 306. LIFE INSURANCE FOR MAGISTRATE JUDGES OF THE TAX COURT AGE 65
OR OLDER.
Section 7472 of the Internal Revenue Code of 1986 is amended by
striking ``its judges'' in the second sentence and inserting ``the
judges and magistrate judges of the Tax Court''.
SEC. 307. RETIREMENT AND ANNUITY PROGRAM.
(a) Retirement and Annuity Program.--Part I of subchapter C of
chapter 76 of the Internal Revenue Code of 1986 is amended by inserting
after section 7443A the following new section:
``SEC. 7443B. RETIREMENT FOR MAGISTRATE JUDGES OF THE TAX COURT.
``(a) Retirement.--
``(1) In general.--Each magistrate judge of the Tax Court
who makes an election under this section shall receive an
annuity at the same rate and in the same manner as magistrate
judges of the district courts of the United States pursuant to
section 377 of title 28, United States Code.
``(2) Rules of application.--For purposes of subsection
(a), section 377 of title 28, United States Code, shall be
applied with the following modifications:
``(A) By substituting--
``(i) `magistrate judge of the Tax Court'
for `judicial official', `judicial officer',
and `magistrate judge' each place such terms
appear,
``(ii) `magistrate judge of the Tax
Court's' for `magistrate judge's' each place it
appears,
``(iii) `chief judge of the Tax Court' for
`Administrative Office of the United States
Courts', `Director of the Administrative Office
of the United States Courts', `Director', and
`chief judge of the district court' each place
such terms appear,
``(iv) `Tax Court Judicial Officers'
Retirement Fund' for `Judicial Officers'
Retirement Fund' each place it appears,
``(v) `under section 7443A of the Internal
Revenue Code of 1986' for `under section 631 of
this title' in subsection (h)(2),
``(vi) `under section 7443C of the Internal
Revenue Code of 1986' for `under section
155(b), 375, or 636(h) of this title' each
place it appears in paragraphs (2) and (3) of
subsection (m), and
``(vii) `from the date of appointment, for
those individuals appointed pursuant to section
7443A of the Internal Revenue Code of 1986
prior to, and in active service on, the date of
enactment of the Retirement Enhancement and
Savings Act of 2019' for `on or after October
1, 1979' in subsection (h).
``(B) By disregarding subsection (m)(2) and
subsection (o).
``(b) 1-Year Forfeiture for Failure To Perform Judicial Duties.--
Subject to subparagraph (B) of section 377(m)(1) of title 28, United
States Code, any magistrate judge of the Tax Court who retires under
this section and who fails to perform judicial duties required of such
individual by section 7443C shall forfeit all rights to an annuity
under this section for a 1-year period which begins on the 1st day on
which such individual fails to perform such duties.
``(c) Tax Court Judicial Officers' Retirement Fund.--
``(1) Establishment.--There is established in the Treasury
of the United States a fund which shall be known as the `Tax
Court Judicial Officers' Retirement Fund'. The Fund is
appropriated for the payment of annuities, refunds, and other
payments under this section.
``(2) Investment of fund.--The Secretary shall invest, in
interest-bearing securities of the United States, such
currently available portions of the Tax Court Judicial
Officers' Retirement Fund as are not immediately required for
payments from the Fund. The income derived from these
investments constitutes a part of the Fund.
``(3) Unfunded liability.--
``(A) In general.--Not later than the close of each
fiscal year, there shall be deposited in the Tax Court
Judicial Officers' Retirement Fund amounts required to
reduce to zero the unfunded liability, if any, of such
Fund.
``(B) Unfunded liability.--For purposes of
subparagraph (A), the term `unfunded liability' means
the amount estimated by the Secretary to be equal to
the excess (as of the close of the fiscal year
involved) of--
``(i) the present value of all benefits
payable from the Tax Court Judicial Officers'
Retirement Fund, over
``(ii) the sum of--
``(I) the present value of future
deductions to be withheld under this
section from the basic pay of
magistrate judges of the Tax Court,
plus
``(II) the balance in such Fund as
of the close of such fiscal year.
``(d) Participation in Thrift Savings Plan.--
``(1) Election to contribute.--A magistrate judge of the
Tax Court may elect to contribute out of such individual's
basic pay to the Thrift Savings Fund established by section
8437 of title 5, United States Code.
``(2) Applicability of title 5 provisions.--Except as
otherwise provided in this subsection, the provisions of
subchapters III and VII of chapter 84 of such title 5 shall
apply with respect to a magistrate judge of the Tax Court who
makes an election under paragraph (1).
``(3) Special rules.--
``(A) Amount contributed.--The amount contributed
by a magistrate judge of the Tax Court to the Thrift
Savings Plan in any pay period shall not exceed the
maximum percentage of such magistrate judge's basic pay
for such period as allowable under section 8440f of
such title 5.
``(B) Contributions for benefit of magistrate judge
of the tax court.--No contributions under section
8432(c) of such title 5 shall be made for the benefit
of a magistrate judge of the Tax Court who has filed an
election to receive an annuity under this section.
``(C) Applicability of rules relating to annuity of
a child.--Section 8433(b) of such title 5 applies with
respect to a magistrate judge of the Tax Court who
makes an election under paragraph (1) and who--
``(i) retires entitled to an immediate
annuity under this section (including a
disability annuity under this section),
``(ii) retires before attaining age 65 but
is entitled, upon attaining age 65, to an
annuity under this section, or
``(iii) retires before becoming entitled to
an immediate annuity, or an annuity upon
attaining age 65, under this section.
``(D) Retirement as separation from service.--With
respect to a magistrate judge of the Tax Court to whom
this subsection applies, retirement under this section
is a separation from service for purposes of
subchapters III and VII of chapter 84 of such title 5.
``(4) Definitions.--For purposes of this subsection, the
terms `retirement' and `retire' include removal from office
under section 7443A(a)(2) on the sole ground of mental or
physical disability.
``(5) Offset.--In the case of a magistrate judge of the Tax
Court who receives a distribution from the Thrift Savings Plan
and who later receives an annuity under this section, the
annuity shall be offset by an amount equal to the amount which
represents the Government's contribution to the individual's
Thrift Savings Account during years of service as a full-time
judicial officer under the Federal Employees Retirement System,
without regard to earnings attributable to such amount. Where
such an offset would exceed 50 percent of the annuity to be
received in the first year, the offset may be divided equally
over the first 2 years in which the individual receives the
annuity.
``(6) Exception.--Notwithstanding clauses (i) and (ii) of
paragraph (3)(C), if any magistrate judge of the Tax Court
retires under circumstances making such magistrate judge of the
Tax Court eligible to make an election under subsection (b) of
section 8433 of such title 5, and the nonforfeitable account
balance of such magistrate judge of the Tax Court is less than
an amount which the Executive Director of the Office of
Personnel Management prescribes by regulation, the Executive
Director shall pay the nonforfeitable account balance to the
participant in a single payment.
``(e) Coordination With Title 5.--A magistrate judge of the Tax
Court who elects to receive an annuity under this section--
``(1) shall not be subject to deductions and contributions
otherwise required by section 8334(a) of title 5 United States
Code,
``(2) shall be excluded from the application of chapter 84
(other than subchapters III and VII) of such title 5, and
``(3) is entitled to a lump-sum credit under section
8342(a) or 8424 of such title 5, as the case may be.''.
(b) Conforming Amendments.--
(1) Section 3121(b)(5)(E) of the Internal Revenue Code of
1986 is amended by inserting ``or magistrate judge'' before
``of the United States Tax Court''.
(2) Section 210(a)(5)(E) of the Social Security Act (42
U.S.C. 410(a)(5)(E)) is amended by inserting ``or a magistrate
judge of the Tax Court who files an election under section
7443B(a) of the Internal Revenue Code of 1986'' after ``of the
United States Tax Court''.
(3) Section 7448(b)(2) of the Internal Revenue Code of 1986
is amended to read as follows:
``(2) Magistrate judges of the tax court.--Any magistrate
judge of the Tax Court may by written election filed with the
chief judge bring himself or herself within the purview of this
section. Such election shall be filed while such individual is
a magistrate judge of the Tax Court.''.
(c) Clerical Amendment.--The table of sections for part I of
subchapter C of chapter 76 of the Internal Revenue Code of 1986 is
amended by inserting after the item relating to section 7443A the
following new item:
``Sec. 7443B. Retirement for magistrate judges of the Tax Court.''.
(d) Effective Date.--The amendments made by this section shall take
effect on the date of the enactment of this Act.
SEC. 308. PROVISIONS FOR RECALL.
(a) In General.--Part I of subchapter C of chapter 76 of the
Internal Revenue Code of 1986, as amended by section 307, is amended by
inserting after section 7443B the following new section:
``SEC. 7443C. RECALL OF MAGISTRATE JUDGES OF THE TAX COURT.
``(a) Recalling of Retired Magistrate Judges of the Tax Court.--Any
individual who has retired pursuant to section 7443B or the applicable
provisions of title 5 or 28, United States Code, upon reaching the age
and service requirements established under such titles 5 and 28, may be
called upon by the chief judge to perform such judicial duties with the
Tax Court as may be requested of such individual for a period or
periods specified by the chief judge, except that in the case of any
such individual--
``(1) the aggregate of such periods in any 1 calendar year
shall not (without the consent of such individual) exceed 90
calendar days, and
``(2) such individual shall be relieved of performing such
duties during any period in which illness or disability
precludes the performance of such duties.
Any act, or failure to act, by an individual performing judicial duties
pursuant to this subsection shall have the same force and effect as if
it were the act (or failure to act) of a magistrate judge of the Tax
Court.
``(b) Compensation.--For the year in which a period of recall
occurs, the magistrate judge of the Tax Court shall receive, in
addition to the annuity provided under the provisions of section 7443B,
an amount equal to the difference between that annuity and the current
salary of the office to which the magistrate judge of the Tax Court is
recalled (and allowances for travel and other expenses of the
magistrate judge of the Tax Court). The annuity for years after the
year in which a period of recall occurs of the magistrate judge of the
Tax Court who completes such a period of service, who is not recalled
in a subsequent year, and who retired under section 7443B, shall be
equal to the salary in effect at the end of the year in which the
period of recall occurred for the office from which such magistrate
judge of the Tax Court retired.
``(c) Rulemaking Authority.--The provisions of this section shall
be implemented under such rules and regulations as may be promulgated
by the Tax Court.''.
(b) Clerical Amendment.--The table of sections for part I of
subchapter C of chapter 76 of the Internal Revenue Code of 1986, as
amended by section 307, is amended by inserting after the item relating
to section 7443B the following new item:
``Sec. 7443C. Recall of magistrate judges of the Tax Court.''.
TITLE IV--OTHER BENEFITS
SEC. 401. BENEFITS PROVIDED TO VOLUNTEER FIREFIGHTERS AND EMERGENCY
MEDICAL RESPONDERS.
(a) Increase in Dollar Limitation on Qualified Payments.--
Subparagraph (B) of section 139B(c)(2) of the Internal Revenue Code of
1986 is amended by striking ``$30'' and inserting ``$50''.
(b) Extension.--Subsection (d) of section 139B of the Internal
Revenue Code of 1986 is amended by striking ``beginning after December
31, 2010.'' and inserting ``beginning--
``(1) after December 31, 2010, and before January 1, 2019,
or
``(2) after December 31, 2019.''.
(c) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2018.
TITLE V--REVENUE PROVISIONS
SEC. 501. MODIFICATIONS OF REQUIRED DISTRIBUTION RULES FOR PENSION
PLANS.
(a) Modification of Rules Where Employee Dies Before Entire
Distribution.--
(1) In general.--Section 401(a)(9) of the Internal Revenue
Code of 1986 is amended by adding at the end the following new
subparagraph:
``(H) Special rules for certain defined
contribution plans.--
``(i) In general.--In the case of
distributions from a defined contribution plan,
a trust forming part of such plan shall not
constitute a qualified trust under this section
unless the plan provides that, if--
``(I) an employee dies before the
distribution of the employee's interest
(whether or not such distribution has
begun in accordance with subparagraph
(A)), and
``(II) the aggregate account
balances to the credit of the employee
under all defined contribution plans,
determined as of the date of the
employee's death, exceeds $450,000,
so much of the entire interest of the employee
as exceeds the dollar amount in subclause (II)
will be distributed within 5 years after the
death of such employee.
``(ii) Allocation of limitation.--If an
employee has an account under more than 1
defined contribution plan, the $450,000 amount
under clause (i)(II) shall be allocated among
all such plans, as provided in regulations
prescribed by the Secretary, for purposes of
applying clause (i).
``(iii) Treatment of remaining amount.--The
portion of the employee's interest distributed
under clause (i) shall not be taken into
account for purposes of determining the
rapidity or the method of distribution of any
portion of the interest of the employee to
which clause (i) does not apply.
``(iv) Multiple beneficiaries.--In the case
of an employee who has more than 1 beneficiary,
the amount of the portion required to be
distributed under clause (i) which shall be
treated as payable to (or for the benefit of)
such beneficiary is the amount which bears the
same ratio to the total amount of such portion
as--
``(I) the portion of the employee's
entire interest (determined as of the
date of the employee's death) which is
payable to (or for the benefit of) such
beneficiary, bears to
``(II) the amount of the employee's
entire interest (so determined).
``(v) Exception for eligible designated
beneficiaries.--If--
``(I) any portion of the employee's
interest is payable to (or for the
benefit of) an eligible designated
beneficiary,
``(II) such portion will be
distributed (in accordance with
regulations) over the life of such
eligible designated beneficiary (or
over a period not extending beyond the
life expectancy of such beneficiary),
and
``(III) such distributions begin
not later than 1 year after the date of
the employee's death or such later date
as the Secretary may by regulations
prescribe,
for purposes of clause (i), the portion
referred to in subclause (I) shall be treated
as distributed on the date on which such
distributions begin.
``(vi) Special rule for surviving spouse of
employee.--If the eligible designated
beneficiary is the surviving spouse of the
employee--
``(I) the date on which the
distributions are required to begin
under clause (v)(III) shall not be
earlier than the date on which the
employee would have attained age 70\1/
2\, and
``(II) if the surviving spouse dies
before the distributions to such spouse
begin, this subparagraph shall be
applied as if the surviving spouse were
the employee.
``(vii) Rules upon death of eligible
designated beneficiary.--If an eligible
designated beneficiary dies before the portion
of the employee's interest to which clause (i)
applies which is payable to (or for the benefit
of) such eligible designated beneficiary is
entirely distributed, the exception under
clause (v) shall not apply to any beneficiary
of such eligible designated beneficiary and the
remainder of such portion shall be distributed
within 5 years after the death of such
beneficiary.
``(viii) Coordination with individual
retirement plans.--For purposes of applying the
provisions of this subparagraph and subsections
(a)(6) and (b)(3) of section 408, individual
retirement plans shall be treated as defined
contribution plans in determining the aggregate
account balances to the credit of the employee
under all defined contribution plans and the
amount required to be distributed to each
beneficiary under such provisions.''.
(2) Definition of eligible designated beneficiary.--Section
401(a)(9)(E) of such Code is amended to read as follows:
``(E) Definitions and rules relating to designated
beneficiary.--For purposes of this paragraph--
``(i) Designated beneficiary.--The term
`designated beneficiary' means any individual
designated as a beneficiary by the employee.
``(ii) Eligible designated beneficiary.--
The term `eligible designated beneficiary'
means, with respect to any employee, any
designated beneficiary who is--
``(I) the surviving spouse of the
employee,
``(II) subject to clause (iii), a
child of the employee who has not
reached majority (within the meaning of
subparagraph (F)),
``(III) disabled (within the
meaning of section 72(m)(7)),
``(IV) a chronically ill individual
(within the meaning of section
7702B(c)(2), except that the
requirements of subparagraph (A)(i)
thereof shall only be treated as met if
there is a certification that, as of
such date, the period of inability
described in such subparagraph with
respect to the individual is an
indefinite one which is reasonably
expected to be lengthy in nature), or
``(V) an individual not described
in any of the preceding subclauses who
is not more than 10 years younger than
the employee.
``(iii) Special rule for children.--Subject
to subparagraph (F), an individual described in
clause (ii)(II) shall cease to be an eligible
designated beneficiary as of the date the
individual reaches majority and any remainder
of the portion of the interest described in
subparagraph (H)(v) shall be distributed within
5 years after such date.
``(iv) Time for determination of eligible
designated beneficiary.--The determination of
whether a designated beneficiary is an eligible
designated beneficiary shall be made as of the
date of death of the employee.''.
(3) Conforming amendments.--
(A) Clause (ii) of section 401(a)(9)(B) of the
Internal Revenue Code of 1986 is amended by striking
``A trust'' and inserting ``Except as provided in
subparagraph (H), a trust''.
(B) Section 402(c)(11)(A)(iii) of such Code is
amended by striking ``section 401(a)(9)(B) (other than
clause (iv) thereof)'' and inserting ``subparagraphs
(B) (other than clause (iv) thereof) and (H) (other
than clause (vi) thereof) of section 401(a)(9)''.
(4) Effective dates.--
(A) In general.--Except as provided in this
paragraph and paragraphs (5) and (6), the amendments
made by this subsection shall apply to distributions
with respect to employees who die after December 31,
2018.
(B) Collective bargaining exception.--In the case
of a plan maintained pursuant to 1 or more collective
bargaining agreements between employee representatives
and 1 or more employers ratified before the date of
enactment of this Act, the amendments made by this
subsection shall apply to distributions with respect to
employees who die in calendar years beginning after the
earlier of--
(i) the later of--
(I) the date on which the last of
such collective bargaining agreements
terminates (determined without regard
to any extension thereof agreed to on
or after the date of the enactment of
this Act); or
(II) December 31, 2018; or
(ii) December 31, 2020.
For purposes of clause (i)(I), any plan amendment made
pursuant to a collective bargaining agreement relating
to the plan which amends the plan solely to conform to
any requirement added by this section shall not be
treated as a termination of such collective bargaining
agreement.
(C) Governmental plans.--In the case of a
governmental plan (as defined in section 414(d) of the
Internal Revenue Code of 1986), subparagraph (A) shall
be applied by substituting ``December 31, 2020'' for
``December 31, 2018''.
(5) Exception for certain existing annuity contracts.--
(A) In general.--The amendments made by this
subsection shall not apply to a qualified annuity which
is a binding annuity contract in effect on the date of
enactment of this Act and at all times thereafter.
(B) Qualified annuity.--For purposes of this
paragraph, the term ``qualified annuity'' means, with
respect to an employee, an annuity--
(i) which is a commercial annuity (as
defined in section 3405(e)(6) of the Internal
Revenue Code of 1986);
(ii) under which the annuity payments are
made over the life of the employee or over the
joint lives of such employee and a designated
beneficiary (or over a period not extending
beyond the life expectancy of such employee or
the joint life expectancy of such employee and
a designated beneficiary) in accordance with
the regulations described in section
401(a)(9)(A)(ii) of such Code (as in effect
before such amendments) and which meets the
other requirements of section 401(a)(9) of such
Code (as so in effect) with respect to such
payments; and
(iii) with respect to which--
(I) annuity payments to the
employee have begun before the date of
enactment of this Act, and the employee
has made an irrevocable election before
such date as to the method and amount
of the annuity payments to the employee
or any designated beneficiaries; or
(II) if subclause (I) does not
apply, the employee has made an
irrevocable election before the date of
enactment of this Act as to the method
and amount of the annuity payments to
the employee or any designated
beneficiaries.
(6) Exception for certain beneficiaries.--
(A) In general.--If an employee dies before the
effective date, then, in applying the amendments made
by this subsection to such employee's designated
beneficiary who dies after such date--
(i) such amendments shall apply to any
beneficiary of such designated beneficiary; and
(ii) the designated beneficiary shall be
treated as an eligible designated beneficiary
for purposes of applying section
401(a)(9)(H)(iv) of the Internal Revenue Code
of 1986 (as in effect after such amendments).
(B) Effective date.--For purposes of this
paragraph, the term ``effective date'' means the first
day of the first calendar year to which the amendments
made by this subsection apply to a plan with respect to
employees dying on or after such date.
(b) Provisions Relating to Plan Amendments.--
(1) In general.--If this subsection applies to any plan
amendment--
(A) such plan shall be treated as being operated in
accordance with the terms of the plan during the period
described in paragraph (2)(B)(i); and
(B) except as provided by the Secretary of the
Treasury, such plan shall not fail to meet the
requirements of section 411(d)(6) of the Internal
Revenue Code of 1986 and section 204(g) of the Employee
Retirement Income Security Act of 1974 by reason of
such amendment.
(2) Amendments to which subsection applies.--
(A) In general.--This subsection shall apply to any
amendment to any plan or which is made--
(i) pursuant to any amendment made by this
section or pursuant to any regulation issued by
the Secretary of the Treasury under this
section or such amendments; and
(ii) on or before the last day of the first
plan year beginning after December 31, 2020, or
such later date as the Secretary of the
Treasury may prescribe.
In the case of a governmental or collectively bargained
plan to which subparagraph (B) or (C) of subsection
(a)(4) applies, clause (ii) shall be applied by
substituting the date which is 2 years after the date
otherwise applied under such clause.
(B) Conditions.--This subsection shall not apply to
any amendment unless--
(i) during the period--
(I) beginning on the date the
legislative or regulatory amendment
described in paragraph (1)(A) takes
effect (or in the case of a plan
amendment not required by such
legislative or regulatory amendment,
the effective date specified by the
plan); and
(II) ending on the date described
in subparagraph (A)(ii) (or, if
earlier, the date the plan amendment is
adopted),
the plan is operated as if such plan amendment
were in effect; and
(ii) such plan amendment applies
retroactively for such period.
SEC. 502. INCREASE IN PENALTY FOR FAILURE TO FILE.
(a) In General.--The second sentence of subsection (a) of section
6651 of the Internal Revenue Code of 1986 is amended by striking
``$205'' and inserting ``$400''.
(b) Effective Date.--The amendment made by this section shall apply
to returns the due date for which (including extensions) is after
December 31, 2018.
SEC. 503. INCREASED PENALTIES FOR FAILURE TO FILE RETIREMENT PLAN
RETURNS.
(a) In General.--Subsection (e) of section 6652 of the Internal
Revenue Code of 1986 is amended--
(1) by striking ``$25'' and inserting ``$100''; and
(2) by striking ``$15,000'' and inserting ``$50,000''.
(b) Annual Registration Statement and Notification of Changes.--
Subsection (d) of section 6652 of the Internal Revenue Code of 1986 is
amended--
(1) by striking ``$1'' both places it appears in paragraphs
(1) and (2) and inserting ``$2'';
(2) by striking ``$5,000'' in paragraph (1) and inserting
``$10,000''; and
(3) by striking ``$1,000'' in paragraph (2) and inserting
``$5,000''.
(c) Failure To Provide Notice.--Subsection (h) of section 6652 of
the Internal Revenue Code of 1986 is amended--
(1) by striking ``$10'' and inserting ``$100''; and
(2) by striking ``$5,000'' and inserting ``$50,000''.
(d) Effective Date.--The amendments made by this section shall
apply to returns, statements, and notifications required to be filed,
and notices required to be provided, after December 31, 2018.
SEC. 504. INCREASE INFORMATION SHARING TO ADMINISTER EXCISE TAXES.
(a) In General.--Section 6103(o) of the Internal Revenue Code of
1986 is amended by adding at the end the following new paragraph:
``(3) Taxes imposed by section 4481.--Returns and return
information with respect to taxes imposed by section 4481 shall
be open to inspection by or disclosure to officers and
employees of United States Customs and Border Protection of the
Department of Homeland Security whose official duties require
such inspection or disclosure for purposes of administering
such section.''.
(b) Conforming Amendments.--Paragraph (4) of section 6103(p) of the
Internal Revenue Code of 1986 is amended by striking ``or (o)(1)(A)''
each place it appears and inserting ``, (o)(1)(A), or (o)(3)''.
SEC. 505. PENSION VARIABLE RATE PREMIUM PAYMENT ACCELERATION.
Notwithstanding section 4007(a) of the Employee Retirement Income
Security Act of 1974 (29 U.S.C. 1307(a)) and section 4007.11 of title
29, Code of Federal Regulations, any additional premium determined
under subparagraph (E) of section 4006(a)(3) of such Act (29 U.S.C.
1306(a)(3)) the due date for which is (but for this section) after
September 30, 2027, and before June 1, 2028, shall be due not later
than September 30, 2027.
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