[House Report 106-760]
[From the U.S. Government Publishing Office]



106th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES
 2d Session                                                     106-760

======================================================================



 
    PROVIDING FOR THE CONSIDERATION OF H.R. 1102, THE COMPREHENSIVE 
           RETIREMENT SECURITY AND PENSION REFORM ACT OF 2000

                                _______
                                

   July 18, 2000.--Referred to the House Calendar and ordered to be 
                                printed

                                _______
                                

   Mr. Reynolds, from the Committee on Rules, submitted the following

                              R E P O R T

                       [To accompany H. Res. 557]

    The Committee on Rules, having had under consideration 
House Resolution 557, by a nonrecord vote, report the same to 
the House with the recommendation that the resolution be 
adopted.

                SUMMARY OF PROVISIONS OF THE RESOLUTION

    The resolution provides for the consideration of H.R. 1102, 
the Comprehensive Retirement Security and Pension Reform Act of 
2000, under a modified closed rule. The rule provides that, in 
lieu of the amendment recommended by the Committee on Education 
and the Workforce now printed in the bill, the text of H.R. 
4843 as reported by the Committee on Ways and Means shall be 
considered as adopted. The rule waives all points of order 
against consideration of the bill. The rule provides one hour 
of debate equally divided and controlled by the chairman and 
ranking minority member of the Committee on Ways and Means.
    The rule provides for consideration of the amendment 
printed in this report, if offered by Representative Rangel or 
his designee, which shall be considered as read and shall be 
separately debatable for one hour equally divided and 
controlled by the proponent and an opponent. The rule waives 
all points of order against the amendment printed in this 
report. Finally, the rule provides one motion to recommit with 
or without instructions.

           SUMMARY OF AMENDMENT MADE IN ORDER UNDER THE RULE

    Rangel--Amendment in the nature of a substitute. 
Incorporates the text of H.R. 4843, as reported, with the 
following additional provisions: (1) Provides a refundable 
credit for low- and middle-income workers who save for their 
retirement; (2) makes small business employees eligible to 
claim a credit or certain expenses incurred as a result of 
establishing a qualified pension plan and makes small business 
employees eligible to claim an additional credit equal to 50% 
of certain employer contributions made to the employer's 
pension plan; (3) provides relief from certain section 415 
rules and benefit limits; and (4) expresses a Sense of Congress 
that issues concerning cash balance plans should be resolved.

             TEXT OF AMENDMENT MADE IN ORDER UNDER THE RULE

 An Amendment To Be Offered by Representative Rangel of New York, or a 
                   Designee, Debatable for 60 Minutes

  Strike all after the enacting clause and insert the text of 
H.R. 4843, as reported, and add at the end the following new 
title:

                   TITLE VIII--ADDITIONAL PROVISIONS

SEC. 801. REFUNDABLE CREDIT TO CERTAIN INDIVIDUALS FOR ELECTIVE 
                    DEFERRALS AND IRA CONTRIBUTIONS.

  (a) In General.--Subpart C of part IV of subchapter A of 
chapter 1 of the Internal Revenue Code of 1986 (relating to 
refundable credits) is amended by redesignating section 35 as 
section 36 and by inserting after section 34 the following new 
section:

``SEC. 35. ELECTIVE DEFERRALS AND IRA CONTRIBUTIONS BY CERTAIN 
                    INDIVIDUALS.

  ``(a) Allowance of Credit.--In the case of an eligible 
individual, there shall be allowed as a credit against the tax 
imposed by this subtitle for the taxable year an amount equal 
to the applicable percentage of so much of the qualified 
retirement savings contributions of the eligible individual for 
the taxable year as do not exceed $2,000.
  ``(b) Applicable Percentage.--For purposes of this section, 
the applicable percentage is the percentage determined in 
accordance with the following table:

------------------------------------------------------------------------
                    Adjusted Gross Income
-------------------------------------------------------------
    Joint return           Head of a        All other cases   Applicable
---------------------      household     -------------------- percentage
                     --------------------
   Over     Not over    Over    Not over    Over    Not over
------------------------------------------------------------------------
$0         $25,000    $0        $18,750   $0        $12,500          50
 25,000     35,000     18,750    26,250    12,500    17,500          45
 35,000     45,000     26,250    33,750    17,500    22,500          35
 45,000     55,000     33,750    41,250    22,500    27,500          25
 55,000     75,000     41,250    56,250    27,500    37,500          15
 75,000    .........   56,250   ........   37,500   ........          0
------------------------------------------------------------------------

  ``(c) Eligible Individual.--For purposes of this section--
          ``(1) In general.--The term `eligible individual' 
        means any individual if--
                  ``(A) such individual has attained the age of 
                18, but has not attained the age of 61, as of 
                the close of the taxable year, and
                  ``(B) the compensation (as defined in section 
                219(f)(1)) includible in the gross income of 
                the individual (or, in the case of a joint 
                return, of the taxpayer) for such taxable year 
                is at least $5,000.
          ``(2) Dependents and full-time students not 
        eligible.--The term `eligible individual' shall not 
        include--
                  ``(A) any individual with respect to whom a 
                deduction under section 151 is allowable to 
                another taxpayer for a taxable year beginning 
                in the calendar year in which such individual's 
                taxable year begins, and
                  ``(B) any individual who is a student (as 
                defined in section 151(c)(4)).
          ``(3) Individuals receiving certain retirement 
        distributions not eligible.--
                  ``(A) In general.--The term `eligible 
                individual' shall not include, with respect to 
                a taxable year, any individual who received 
                during the testing period--
                          ``(i) any distribution from a 
                        qualified retirement plan (as defined 
                        in section 4974(c)), or from an 
                        eligible deferred compensation plan (as 
                        defined in section 457(b)), which is 
                        includible in gross income, or
                          ``(ii) any distribution from a Roth 
                        IRA which is not a qualified rollover 
                        contribution (as defined in section 
                        408A(e)) to a Roth IRA.
                  ``(B) Testing period.--For purposes of 
                subparagraph (A), the testing period, with 
                respect to a taxable year, is the period which 
                includes--
                          ``(i) such taxable year,
                          ``(ii) the 2 preceding taxable years, 
                        and
                          ``(iii) the period after such taxable 
                        year and before the due date (without 
                        extensions) for filing the return of 
                        tax for such taxable year.
                  ``(C) Excepted distributions.--There shall 
                not be taken into account under subparagraph 
                (A)--
                          ``(i) any distribution referred to in 
                        section 72(p), 401(k)(8), 401(m)(6), 
                        402(g)(2), 404(k), or 408(d)(4),
                          ``(ii) any distribution to which 
                        section 408A(d)(3) applies, and
                          ``(iii) any distribution before 
                        January 1, 2002.
                  ``(D) Treatment of distributions received by 
                spouse of individual.--For purposes of 
                determining whether an individual is an 
                eligible individual for any taxable year, any 
                distribution received by the spouse of such 
                individual shall be treated as received by such 
                individual if such individual and spouse file a 
                joint return for such taxable year and for the 
                taxable year during which the spouse receives 
                the distribution.
  ``(d) Qualified Retirement Savings Contributions.--For 
purposes of this section, the term `qualified retirement 
savings contributions' means the sum of--
          ``(1) the amount of the qualified retirement 
        contributions (as defined in section 219(e)) for the 
        benefit of the eligible individual,
          ``(2) the amount of the elective deferrals (as 
        defined in section 414(u)(2)(C)) of such individual, 
        and
          ``(3) the amount of voluntary employee contributions 
        by such individual to any qualified retirement plan (as 
        defined in section 4974(c)).
  ``(e) Adjusted Gross Income.--For purposes of this section, 
adjusted gross income shall be determined without regard to 
sections 911, 931, and 933.
  ``(f) Investment in the Contract.--Notwithstanding any other 
provision of law, a qualified retirement savings contribution 
shall not fail to be included in determining the investment in 
the contract for purposes of section 72 by reason of the credit 
under this section.
  ``(g) Transitional Rules.--In the case of taxable years 
beginning before January 1, 2008--
          ``(1) Contribution limit.--Subsection (a) shall be 
        applied by substituting for `$2,000'--
                  ``(A) $600 in the case of taxable years 
                beginning in 2002, 2003, or 2004, and
                  ``(B) $1,000 in the case of taxable years 
                beginning in 2005, 2006, or 2007.
          ``(2) Applicable percentage.--The applicable 
        percentage shall be determined under the following 
        table (in lieu of the table in subsection (b)):

------------------------------------------------------------------------
                    Adjusted Gross Income
-------------------------------------------------------------
    Joint return           Head of a        All other cases   Applicable
---------------------      household     -------------------- percentage
                     --------------------
   Over     Not over    Over    Not over    Over    Not over
------------------------------------------------------------------------
$0         $20,000    $0        $15,000   $0        $10,000          50
 20,000     25,000     15,000    18,750    10,000    12,500          45
 25,000     30,000     18,750    22,500    12,500    15,000          35
 30,000     35,000     22,500    26,250    15,000    17,500          25
 35,000     40,000     26,250    30,000    17,500    20,000          15
 40,000    .........   30,000   ........   20,000   ........       0.''
------------------------------------------------------------------------

  (b) Conforming Amendments.--
          (1) Paragraph (2) of section 1324(b) of title 31, 
        United States Code, is amended by inserting before the 
        period ``, or from section 35 of such Code''.
          (2) The table of sections for subpart C of part IV of 
        subchapter A of chapter 1 of such Code is amended by 
        striking the last item and inserting the following new 
        items:

        ``Sec. 35. Elective deferrals and IRA contributions by certain 
                  individuals.
        ``Sec. 36. Overpayments of tax.''

  (c) Effective Date.--The amendments made by this section 
shall apply to taxable years beginning after December 31, 2001.

SEC. 802. CREDIT FOR PENSION PLAN STARTUP COSTS OF SMALL EMPLOYERS.

  (a) In General.--Subpart D of part IV of subchapter A of 
chapter 1 (relating to business related credits) is amended by 
adding at the end the following new section:

``SEC. 45D. SMALL EMPLOYER PENSION PLAN STARTUP COSTS.

  ``(a) General Rule.--For purposes of section 38, in the case 
of an eligible employer, the small employer pension plan 
startup cost credit determined under this section for any 
taxable year is an amount equal to 50 percent of the qualified 
startup costs paid or incurred by the taxpayer during the 
taxable year.
  ``(b) Dollar Limitation.--The amount of the credit determined 
under this section for any taxable year shall not exceed--
          ``(1) $1,000 for the first credit year,
          ``(2) $500 for each of the 2 taxable years 
        immediately following the first credit year, and
          ``(3) zero for any other taxable year.
  ``(c) Eligible Employer.--For purposes of this section--
          ``(1) In general.--The term `eligible employer' has 
        the meaning given such term by section 408(p)(2)(C)(i).
          ``(2) Employers maintaining qualified plans during 
        1998 not eligible.--Such term shall not include an 
        employer if such employer (or any predecessor employer) 
        maintained a qualified plan (as defined in section 
        408(p)(2)(D)(ii)) with respect to which contributions 
        were made, or benefits were accrued, for service in 
        1998. If only individuals other than employees 
        described in subparagraph (A) or (B) of section 
        410(b)(3) are eligible to participate in the qualified 
        employer plan referred to in subsection (d)(1), then 
        the preceding sentence shall be applied without regard 
        to any qualified plan in which only employees so 
        described are eligible to participate.
  ``(d) Other Definitions.--For purposes of this section--
          ``(1) Qualified startup costs.--
                  ``(A) In general.--The term `qualified 
                startup costs' means any ordinary and necessary 
                expenses of an eligible employer which are paid 
                or incurred in connection with--
                          ``(i) the establishment or 
                        administration of an eligible employer 
                        plan, or
                          ``(ii) the retirement-related 
                        education of employees with respect to 
                        such plan.
                  ``(B) Plan must have at least 2 
                participants.--Such term shall not include any 
                expense in connection with a plan that does not 
                have at least 2 individuals who are eligible to 
                participate.
                  ``(C) Plan must be established before january 
                1, 2010.--Such term shall not include any 
                expense in connection with a plan established 
                after December 31, 2009.
          ``(2) Eligible employer plan.--The term `eligible 
        employer plan' means a qualified employer plan within 
        the meaning of section 4972(d), or a qualified payroll 
        deduction arrangement within the meaning of section 
        408(q)(1) (whether or not an election is made under 
        section 408(q)(2)). A qualified payroll deduction 
        arrangement shall be treated as an eligible employer 
        plan only if all employees of the employer who--
                  ``(A) have been employed for 90 days, and
                  ``(B) are not described in subparagraph (A) 
                or (C) of section 410(b)(3),
        are eligible to make the election under section 
        408(q)(1)(A).
          ``(3) First credit year.--The term `first credit 
        year' means--
                  ``(A) the taxable year which includes the 
                date that the eligible employer plan to which 
                such costs relate becomes effective, or
                  ``(B) at the election of the eligible 
                employer, the taxable year preceding the 
                taxable year referred to in subparagraph (A).
  ``(e) Special Rules.--For purposes of this section--
          ``(1) Aggregation rules.--All persons treated as a 
        single employer under subsection (a) or (b) of section 
        52, or subsection (n) or (o) of section 414, shall be 
        treated as one person. All eligible employer plans 
        shall be treated as 1 eligible employer plan.
          ``(2) Disallowance of deduction.--No deduction shall 
        be allowed for that portion of the qualified startup 
        costs paid or incurred for the taxable year which is 
        equal to the credit determined under subsection (a).
          ``(3) Election not to claim credit.--This section 
        shall not apply to a taxpayer for any taxable year if 
        such taxpayer elects to have this section not apply for 
        such taxable year.''
  (b) Credit Allowed as Part of General Business Credit.--
Section 38(b) (defining current year business credit) is 
amended by striking ``plus'' at the end of paragraph (11), by 
striking the period at the end of paragraph (12) and inserting 
``, plus'', and by adding at the end the following new 
paragraph:
          ``(13) in the case of an eligible employer (as 
        defined in section 45D(c)), the small employer pension 
        plan startup cost credit determined under section 
        45D(a).''
  (c) Conforming Amendments.--
          (1) Section 39(d) is amended by adding at the end the 
        following new paragraph:
          ``(8) No carryback of small employer pension plan 
        startup cost credit before effective date.--No portion 
        of the unused business credit for any taxable year 
        which is attributable to the small employer pension 
        plan startup cost credit determined under section 45D 
        may be carried back to a taxable year ending on or 
        before the date of the enactment of section 45D.''
          (2) Subsection (c) of section 196 is amended by 
        striking ``and'' at the end of paragraph (7), by 
        striking the period at the end of paragraph (8) and 
        inserting ``, and'', and by adding at the end the 
        following new paragraph:
          ``(9) the small employer pension plan startup cost 
        credit determined under section 45D(a).''
          (3) The table of sections for subpart D of part IV of 
        subchapter A of chapter 1 is amended by adding at the 
        end the following new item:

        ``Sec. 45D. Small employer pension plan startup costs.''

  (d) Effective Date.--The amendments made by this section 
shall apply to costs paid or incurred in taxable years ending 
after the date of the enactment of this Act.

SEC. 803. CREDIT FOR QUALIFIED PENSION PLAN CONTRIBUTIONS OF SMALL 
                    EMPLOYERS.

  (a) In General.--Subpart D of part IV of subchapter A of 
chapter 1 (relating to business related credits) is amended by 
adding at the end the following new section:

``SEC. 45E. SMALL EMPLOYER PENSION PLAN CONTRIBUTIONS.

  ``(a) General Rule.--For purposes of section 38, in the case 
of an eligible employer, the small employer pension plan 
contribution credit determined under this section for any 
taxable year is an amount equal to 50 percent of the amount 
which would (but for subsection (f)(1)) be allowed as a 
deduction under section 404 for such taxable year for qualified 
employer contributions made to any qualified retirement plan on 
behalf of any nonhighly compensated employee.
  ``(b) Credit Limited to 3 Years.--The credit allowable by 
this section shall be allowed only with respect to the period 
of 3 taxable years beginning with the taxable year in which the 
qualified retirement plan becomes effective.
  ``(c) Qualified Employer Contribution.--For purposes of this 
section--
          ``(1) Defined contribution plans.--In the case of a 
        defined contribution plan, the term `qualified employer 
        contribution' means the amount of nonelective and 
        matching contributions to the plan made by the employer 
        on behalf of any nonhighly compensated employee to the 
        extent such amount does not exceed 3 percent of such 
        employee's compensation from the employer for the year.
          ``(2) Defined benefit plans.--In the case of a 
        defined benefit plan, the term `qualified employer 
        contribution' means the amount of employer 
        contributions to the plan made on behalf of any 
        nonhighly compensated employee to the extent that the 
        accrued benefit of such employee derived from such 
        contributions for the year do not exceed the equivalent 
        (as determined under regulations prescribed by the 
        Secretary and without regard to contributions and 
        benefits under the Social Security Act) of 3 percent of 
        such employee's compensation from the employer for the 
        year.
  ``(d) Qualified Retirement Plan.--
          ``(1) In general.--The term `qualified retirement 
        plan' means any plan described in section 401(a) which 
        includes a trust exempt from tax under section 501(a) 
        if the plan meets--
                  ``(A) the contribution requirements of 
                paragraph (2),
                  ``(B) the vesting requirements of paragraph 
                (3), and
                  ``(C) the distributions requirements of 
                paragraph (4).
          ``(2) Contribution requirements.--
                  ``(A) In general.--The requirements of this 
                paragraph are met if, under the plan--
                          ``(i) the employer is required to 
                        make nonelective contributions of at 
                        least 1 percent of compensation (or the 
                        equivalent thereof in the case of a 
                        defined benefit plan) for each 
                        nonhighly compensated employee who is 
                        eligible to participate in the plan, 
                        and
                          ``(ii) allocations of nonelective 
                        employer contributions are either in 
                        equal dollar amounts for all employees 
                        covered by the plan or bear a uniform 
                        relationship to the total compensation, 
                        or the basic or regular rate of 
                        compensation, of the employees covered 
                        by the plan.
                  ``(B) Compensation limitation.--The 
                compensation taken into account under 
                subparagraph (A) for any year shall not exceed 
                the limitation in effect for such year under 
                section 401(a)(17).
          ``(3) Vesting requirements.--The requirements of this 
        paragraph are met if the plan satisfies the 
        requirements of subparagraph (A) or (B).
                  ``(A) 3-year vesting.--A plan satisfies the 
                requirements of this subparagraph if an 
                employee who has completed at least 3 years of 
                service has a nonforfeitable right to 100 
                percent of the employee's accrued benefit 
                derived from employer contributions.
                  ``(B) 5-year graded vesting.--A plan 
                satisfies the requirements of this subparagraph 
                if an employee has a nonforfeitable right to a 
                percentage of the employee's accrued benefit 
                derived from employer contributions determined 
                under the following table:

                                                      The nonforfeitable
``Years of service:                                       percentage is:
    1.........................................................       20 
    2.........................................................       40 
    3.........................................................       60 
    4.........................................................       80 
    5.........................................................      100.

          ``(4) Distribution requirements.--
                  ``(A) In general.--Except as provided in 
                subparagraph (B), the requirements of this 
                paragraph are met if, under the plan--
                          ``(i) in the case of a profit-sharing 
                        or stock bonus plan, amounts are 
                        distributable only as provided in 
                        section 401(k)(2)(B), and
                          ``(ii) in the case of a pension plan, 
                        amounts are distributable subject to 
                        the limitations applicable to other 
                        distributions from the plan.
                  ``(B) Distributions within 5 years after 
                separation, etc.--In no event shall a plan meet 
                the requirements of this paragraph unless, 
                under the plan, amounts distributed--
                          ``(i) after separation from service 
                        or severance from employment, and
                          ``(ii) within 5 years after the date 
                        of the earliest employer contribution 
                        to the plan,
                may be distributed only in a direct trustee-to-
                trustee transfer to a plan having the same 
                distribution restrictions as the distributing 
                plan.
  ``(e) Other Definitions.--For purposes of this section--
          ``(1) Eligible employer.--The term `eligible 
        employer' has the meaning given such term by section 
        408(p)(2)(C)(i).
          ``(2) Nonhighly compensated employees.--The term 
        `highly compensated employee' has the meaning given 
        such term by section 414(q) (determined without regard 
        to section 414(q)(1)(B)(ii)).
  ``(f) Special Rules.--
          ``(1) Disallowance of deduction.--No deduction shall 
        be allowed for that portion of the qualified employer 
        contributions paid or incurred for the taxable year 
        which is equal to the credit determined under 
        subsection (a).
          ``(2) Election not to claim credit.--This section 
        shall not apply to a taxpayer for any taxable year if 
        such taxpayer elects to have this section not apply for 
        such taxable year.
  ``(g) Recapture of Credit on Forfeited Contributions.--If any 
accrued benefit which is forfeitable by reason of subsection 
(d)(3) is forfeited, the employer's tax imposed by this chapter 
for the taxable year in which the forfeiture occurs shall be 
increased by 35 percent of the employer contributions from 
which such benefit is derived to the extent such contributions 
were taken into account in determining the credit under this 
section.
  ``(h) Regulations.--The Secretary shall prescribe such 
regulations as may be appropriate to carry out the purposes of 
this section, including regulations to prevent the abuse of the 
purposes of this section through the use of multiple plans.
  ``(i) Termination.--This section shall not apply to any plan 
established after December 31, 2009.''
  (b) Credit Allowed as Part of General Business Credit.--
Section 38(b) (defining current year business credit) is 
amended by striking ``plus'' at the end of paragraph (12), by 
striking the period at the end of paragraph (13) and inserting 
``, plus'', and by adding at the end the following new 
paragraph:
          ``(14) in the case of an eligible employer (as 
        defined in section 45E(e)), the small employer pension 
        plan contribution credit determined under section 
        45E(a).''
  (c) Conforming Amendments.--
          (1) Section 39(d) is amended by adding at the end the 
        following new paragraph:
          ``(9) No carryback of small employer pension plan 
        contribution credit before january 1, 2002.--No portion 
        of the unused business credit for any taxable year 
        which is attributable to the small employer pension 
        plan contribution credit determined under section 45E 
        may be carried back to a taxable year beginning before 
        January 1, 2002.''
          (2) Subsection (c) of section 196 is amended by 
        striking ``and'' at the end of paragraph (8), by 
        striking the period at the end of paragraph (9) and 
        inserting ``, and'', and by adding at the end the 
        following new paragraph:
          ``(10) the small employer pension plan contribution 
        credit determined under section 45E(a).''
          (3) The table of sections for subpart D of part IV of 
        subchapter A of chapter 1 is amended by adding at the 
        end the following new item:

        ``Sec. 45E. Small employer pension plan contributions.''

  (d) Effective Date.--The amendments made by this section 
shall apply to contributions paid or incurred in taxable years 
beginning after December 31, 2001.

SEC. 804. LIMITATION ON CATCH-UP CONTRIBUTIONS.

  (a) In General.--Section 414(v), as added by section 301, is 
amended by adding at the end the following new paragraph:
          ``(6) Limitation.--This subsection shall apply with 
        respect to a participant for a year only if the 
        participant is not a highly compensated employee and 
        certifies to the plan administrator that the 
        participant has been out of the workforce for at least 
        2 of the preceding 7 years. A plan shall not be treated 
        as failing to meet the requirements of this subsection 
        by reason of reliance on an incorrect certification 
        under this paragraph unless the plan administrator 
        knew, or reasonably should have known, that the 
        certification was incorrect.''
  (b) Effective Date.--The amendment made by this section shall 
apply to contributions in taxable years beginning after Decem-
ber 31, 2000.

SEC. 805. TREATMENT OF MULTIEMPLOYER PLANS UNDER SECTION 415.

  (a) Early Retirement Limits for Certain Plans.--Subparagraph 
(F) of section 415(b)(2) is amended to read as follows:
                  ``(F) Multiemployer plans and plans 
                maintained by governments and tax exempt 
                organizations.--In the case of a governmental 
                plan (within the meaning of section 414(d)), a 
                plan maintained by an organization (other than 
                a governmental unit) exempt from tax under this 
                subtitle, a multiemployer plan (as defined in 
                section 414(f)), or a qualified merchant marine 
                plan--
                          ``(i) subparagraph (C) shall be 
                        applied--
                                  ``(I) by substituting `age 
                                62' for `social security 
                                retirement age' each place it 
                                appears, and
                                  ``(II) as if the last 
                                sentence thereof read as 
                                follows: `The reduction under 
                                this subparagraph shall not 
                                reduce the limitation of 
                                paragraph (1)(A) below (i) 80 
                                percent of such limitation as 
                                in effect for the year, or (ii) 
                                if the benefit begins before 
                                age 55, the equivalent of such 
                                80 percent amount for age 55.', 
                                and
                          ``(ii) subparagraph (D) shall be 
                        applied by substituting `age 65' for 
                        `social security retirement age' each 
                        place it appears.
                For purposes of this subparagraph, the term 
                `qualified merchant marine plan' means a plan 
                in existence on January 1, 1986, the 
                participants in which are merchant marine 
                officers holding licenses issued by the 
                Secretary of Transportation under title 46, 
                United States Code.''.
  (b) Effective Date.--The amendments made by this section 
shall apply to years beginning after December 31, 2000.

SEC. 806. SENSE OF THE HOUSE OF REPRESENTATIVES REGARDING CASH BALANCE 
                    PENSION PLAN CONVERSIONS.

  (a) Findings.--The House of Representatives finds the 
following:
          (1) Defined benefit pension plans are guaranteed by 
        the Pension Benefit Guaranty Corporation and provide a 
        lifetime benefit for a beneficiary and spouse.
          (2) Defined benefit pension plans provide meaningful 
        retirement benefits to rank and file workers, since 
        such plans are generally funded by employer 
        contributions.
          (3) Employers should be encouraged to establish and 
        maintain defined benefit pension plans.
          (4) An increasing number of major employers have been 
        converting their traditional defined benefit plans to 
        ``cash balance'' or other hybrid defined benefit plans.
          (5) Under current law, employers are not required to 
        provide plan participants with meaningful disclosure of 
        the impact of converting a traditional defined benefit 
        plan to a ``cash balance'' or other hybrid formula.
          (6) For a number of years after a conversion, the 
        cash balance or other hybrid benefit formula may result 
        in a period of ``wear away'' during which older and 
        longer service participants earn no additional 
        benefits.
          (7) Federal law prohibits pension plan participants 
        from being discriminated against on the basis of age in 
        the provision of pension benefits.
  (b) Sense of the House.--It is the sense of the House of 
Representatives that pension plan participants whose plans are 
changed to cause older or longer service workers to earn less 
retirement income, including conversions to ``cash balance 
plans'', should receive additional protection under the 
Internal Revenue Code of 1986 than what is currently provided, 
and Congress should act this year to address this important 
issue. In particular, the tax laws, at a minimum, should 
provide that--
          (1) all pension plan participants receive adequate, 
        accurate, and timely notice of any change to a plan 
        that will cause participants to earn less retirement 
        income in the future; and
          (2) pension plans that are changed to a cash balance 
        or other hybrid formula not be permitted to ``wear 
        away'' participants' benefits in such a manner that 
        older and longer service participants earn no 
        additional pension benefits for a period of time after 
        the change.

                                
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