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S.631
Comprehensive Retirement Security and Pension Reform Act of 2001
(Introduced in Senate)
S 631 IS
107th CONGRESS
1st Session
S. 631
To provide for pension reform, and for other purposes.
IN THE SENATE OF THE UNITED STATES
March 27, 2001
Mr. VOINOVICH introduced the following bill; which was read twice and
referred to the Committee on Finance
A BILL
To provide for pension reform, 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; REFERENCES; TABLE OF CONTENTS.
(a) SHORT TITLE- This Act may be cited as the `Comprehensive Retirement
Security and Pension Reform Act of 2001'.
(b) AMENDMENT OF 1986 CODE- Except as otherwise expressly provided,
whenever in this Act an amendment or repeal is expressed in terms of an
amendment to, or repeal of, a section or other provision, the reference shall
be considered to be made to a section or other provision of the Internal
Revenue Code of 1986.
(c) TABLE OF CONTENTS- The table of contents of this Act is as follows:
Sec. 1. Short title; references; table of contents.
TITLE I--INDIVIDUAL RETIREMENT ACCOUNT PROVISIONS
Sec. 101. Modification of IRA contribution limits.
TITLE II--EXPANDING COVERAGE
Sec. 201. Increase in benefit and contribution limits.
Sec. 202. Plan loans for subchapter S owners, partners, and sole
proprietors.
Sec. 203. Modification of top-heavy rules.
Sec. 204. Elective deferrals not taken into account for purposes of
deduction limits.
Sec. 205. Repeal of coordination requirements for deferred compensation
plans of State and local governments and tax-exempt organizations.
Sec. 206. Elimination of user fee for requests to IRS regarding pension
plans.
Sec. 207. Deduction limits.
Sec. 208. Option to treat elective deferrals as after-tax
contributions.
TITLE III--ENHANCING FAIRNESS FOR WOMEN
Sec. 301. Catch-Up contributions for individuals age 50 or over.
Sec. 302. Equitable treatment for contributions of employees to defined
contribution plans.
Sec. 303. Faster vesting of certain employer matching
contributions.
Sec. 304. Simplify and update the minimum distribution rules.
Sec. 305. Clarification of tax treatment of division of section 457 plan
benefits upon divorce.
Sec. 306. Modification of safe harbor relief for hardship withdrawals
from cash or deferred arrangements.
TITLE IV--INCREASING PORTABILITY FOR PARTICIPANTS
Sec. 401. Rollovers allowed among various types of plans.
Sec. 402. Rollovers of IRAs into workplace retirement plans.
Sec. 403. Rollovers of after-tax contributions.
Sec. 404. Hardship exception to 60 -day rule .
Sec. 405. Treatment of forms of distribution.
Sec. 406. Rationalization of restrictions on distributions.
Sec. 407. Purchase of service credit in governmental defined benefit
plans.
Sec. 408. Employers may disregard rollovers for purposes of cash-out
amounts.
Sec. 409. Minimum distribution and inclusion requirements for section
457 plans.
TITLE V--STRENGTHENING PENSION SECURITY AND ENFORCEMENT
Sec. 501. Repeal of percent of current liability funding limit.
Sec. 502. Maximum contribution deduction rules modified and applied to
all defined benefit plans.
Sec. 503. Excise tax relief for sound pension funding.
Sec. 504. Excise tax on failure to provide notice by defined benefit
plans significantly reducing future benefit accruals.
Sec. 505. Treatment of multiemployer plans under section 415.
Sec. 506. Protection of investment of employee contributions to 401(k)
plans.
Sec. 507. Periodic pension benefits statements.
Sec. 508. Prohibited allocations of stock in S corporation ESOP.
TITLE VI--REDUCING REGULATORY BURDENS
Sec. 601. Modification of timing of plan valuations.
Sec. 602. ESOP dividends may be reinvested without loss of dividend
deduction.
Sec. 603. Repeal of transition rule relating to certain highly
compensated employees.
Sec. 604. Employees of tax-exempt entities.
Sec. 605. Clarification of treatment of employer-provided retirement
advice.
Sec. 606. Reporting simplification.
Sec. 607. Improvement of employee plans compliance resolution
system.
Sec. 608. Repeal of the multiple use test.
Sec. 609. Flexibility in nondiscrimination, coverage, and line of
business rules.
Sec. 610. Extension to all governmental plans of moratorium on
application of certain nondiscrimination rules applicable to State and local
plans.
Sec. 611. Notice and consent period regarding distributions.
Sec. 612. Annual report dissemination.
Sec. 613. Technical corrections to SAVER Act.
TITLE VII--OTHER ERISA PROVISIONS
Sec. 701. Missing participants.
Sec. 702. Reduced PBGC premium for new plans of small employers.
Sec. 703. Reduction of additional PBGC premium for new and small
plans.
Sec. 704. Authorization for PBGC to pay interest on premium overpayment
refunds.
Sec. 705. Substantial owner benefits in terminated plans.
Sec. 706. Civil penalties for breach of fiduciary responsibility.
Sec. 707. Benefit suspension notice.
TITLE VIII--PLAN AMENDMENTS
Sec. 801. Provisions relating to plan amendments.
TITLE I--INDIVIDUAL RETIREMENT ACCOUNTS
SEC. 101. MODIFICATION OF IRA CONTRIBUTION LIMITS.
(a) INCREASE IN CONTRIBUTION LIMIT-
(1) IN GENERAL- Paragraph (1)(A) of section 219(b) (relating to maximum
amount of deduction) is amended by striking `$2,000' and inserting `the
deductible amount'.
(2) DEDUCTIBLE AMOUNT- Section 219(b) is amended by adding at the end
the following new paragraph:
`(5) DEDUCTIBLE AMOUNT- For purposes of paragraph (1)(A)--
`(A) IN GENERAL- The deductible amount shall be determined in
accordance with the following table:
`For taxable years
--The deductible
beginning in:
--amount is:
$3,000
$4,000
$5,000.
`(B) CATCH-UP CONTRIBUTIONS FOR INDIVIDUALS 50 OR OLDER- In the case
of an individual who has attained the age of 50 before the close of the
taxable year, the deductible amount for taxable years beginning in 2001 or
2002 shall be $5,000.
`(C) COST-OF-LIVING ADJUSTMENT-
`(i) IN GENERAL- In the case of any taxable year beginning in a
calendar year after 2003, the $5,000 amount under subparagraph (A) shall
be increased by an amount equal to--
`(I) such dollar amount, multiplied by
`(II) the cost-of-living adjustment determined under section
1(f)(3) for the calendar year in which the taxable year begins,
determined by substituting `calendar year 2002' for `calendar year
1992' in subparagraph (B) thereof.
`(ii) ROUNDING RULES- If any amount after adjustment under clause
(i) is not a multiple of $500, such amount shall be rounded to the next
lower multiple of $500.'.
(b) CONFORMING AMENDMENTS-
(1) Section 408(a)(1) is amended by striking `in excess of $2,000 on
behalf of any individual' and inserting `on behalf of any individual in
excess of the amount in effect for such taxable year under section
219(b)(1)(A)'.
(2) Section 408(b)(2)(B) is amended by striking `$2,000' and inserting
`the dollar amount in effect under section 219(b)(1)(A)'.
(3) Section 408(b) is amended by striking `$2,000' in the matter
following paragraph (4) and inserting `the dollar amount in effect under
section 219(b)(1)(A)'.
(4) Section 408(j) is amended by striking `$2,000'.
(5) Section 408(p)(8) is amended by striking `$2,000' and inserting `the
dollar amount in effect under section 219(b)(1)(A)'.
(c) EFFECTIVE DATE- The amendments made by this section shall apply to
taxable years beginning after December 31, 2000.
TITLE II--EXPANDING COVERAGE
SEC. 201. INCREASE IN BENEFIT AND CONTRIBUTION LIMITS.
(a) DEFINED BENEFIT PLANS-
(A) Subparagraph (A) of section 415(b)(1) (relating to limitation for
defined benefit plans) is amended by striking `$90,000' and inserting
`$160,000'.
(B) Subparagraphs (C) and (D) of section 415(b)(2) are each amended by
striking `$90,000' each place it appears in the headings and the text and
inserting `$160,000'.
(C) Paragraph (7) of section 415(b) (relating to benefits under
certain collectively bargained plans) is amended by striking `the greater
of $68,212 or one-half the amount otherwise applicable for such year under
paragraph (1)(A) for `$90,000' and inserting `one-half the amount
otherwise applicable for such year under paragraph (1)(A) for
`$160,000'.
(2) LIMIT REDUCED WHEN BENEFIT BEGINS BEFORE AGE 62- Subparagraph (C) of section
415(b)(2) is amended by striking `the social security retirement age' each place it appears in the
heading and text and inserting `age 62' and by striking the second
sentence.
(3) LIMIT INCREASED WHEN BENEFIT BEGINS AFTER AGE 65- Subparagraph (D) of section
415(b)(2) is amended by striking `the social security retirement age' each place it appears in the
heading and text and inserting `age 65'.
(4) COST-OF-LIVING ADJUSTMENTS- Subsection (d) of section 415 (related
to cost-of-living adjustments) is amended--
(A) by striking `$90,000' in paragraph (1)(A) and inserting
`$160,000'; and
(B) in paragraph (3)(A)--
(i) by striking `$90,000' in the heading and inserting `$160,000';
and
(ii) by striking `October 1, 1986' and inserting `July 1,
2000'.
(5) CONFORMING AMENDMENTS-
(A) Section 415(b)(2) is amended by striking subparagraph
(F).
(B) Section 415(b)(9) is amended to read as follows:
`(9) SPECIAL RULE FOR
COMMERCIAL AIRLINE
PILOTS-
`(A) IN GENERAL- Except as provided in subparagraph (B), in the case
of any participant who is a commercial airline pilot, if, as of the
time of the participant's retirement, regulations prescribed by the
Federal Aviation Administration require an individual to separate from
service as a commercial airline pilot after attaining
any age occurring on or
after age 60 and before age 62, paragraph (2)(C) shall
be applied by substituting such age for age 62.
`(B) INDIVIDUALS WHO SEPARATE FROM SERVICE BEFORE AGE 60 - If a participant described
in subparagraph (A) separates from service before age 60 , the rules of paragraph
(2)(C) shall apply.'.
(C) Section 415(b)(10)(C)(i) is amended by striking `applied without
regard to paragraph (2)(F)'.
(b) DEFINED CONTRIBUTION PLANS-
(1) DOLLAR LIMIT- Subparagraph (A) of section 415(c)(1) (relating to
limitation for defined contribution plans) is amended by striking `$30,000'
and inserting `$40,000'.
(2) COST-OF-LIVING ADJUSTMENTS- Subsection (d) of section 415 (related
to cost-of-living adjustments) is amended--
(A) by striking `$30,000' in paragraph (1)(C) and inserting `$40,000';
and
(B) in paragraph (3)(D)--
(i) by striking `$30,000' in the heading and inserting `$40,000';
and
(ii) by striking `October 1, 1993' and inserting `July 1,
2000'.
(1) COMPENSATION LIMIT- Sections 401(a)(17), 404(l), 408(k), and
505(b)(7) are each amended by striking `$150,000' each place it appears and
inserting `$200,000'.
(2) BASE PERIOD AND ROUNDING OF COST-OF-LIVING ADJUSTMENT- Subparagraph
(B) of section 401(a)(17) is amended--
(A) by striking `October 1, 1993' and inserting `July 1, 2000';
and
(B) by striking `$10,000' both places it appears and inserting
`$5,000'.
(1) IN GENERAL- Paragraph (1) of section 402(g) (relating to limitation
on exclusion for elective deferrals) is amended to read as follows:
`(A) LIMITATION- Notwithstanding subsections (e)(3) and (h)(1)(B), the
elective deferrals of any individual for any taxable year shall be
included in such individual's gross income to the extent the amount of
such deferrals for the taxable year exceeds the applicable dollar
amount.
`(B) APPLICABLE DOLLAR AMOUNT- For purposes of subparagraph (A), the
applicable
dollar amount shall be the amount determined in accordance with the following
table:
`For taxable years
--The applicable
beginning in
-- dollar amount:
calendar year:
--$11,000
--$12,000
--$13,000
--$14,000
--$15,000.'.
(2) COST-OF-LIVING ADJUSTMENT- Paragraph (5) of section 402(g) is
amended to read as follows:
`(5) COST-OF-LIVING ADJUSTMENT- In the case of taxable years beginning
after December 31, 2005, the Secretary shall adjust the $15,000 amount under
paragraph (1)(B) at the same time and in the same manner as under section
415(d), except that the base period shall be the calendar quarter beginning
July 1, 2004, and any increase under this paragraph which is not a multiple
of $500 shall be rounded to the next lowest multiple of $500.'.
(3) CONFORMING AMENDMENTS-
(A) Section 402(g) (relating to limitation on exclusion for elective
deferrals), as amended by
paragraphs (1) and (2), is further amended by striking paragraph (4) and
redesignating paragraphs (5), (6), (7), (8), and (9) as paragraphs (4), (5),
(6), (7), and (8), respectively.
(B) Paragraph (2) of section 457(c) is amended by striking
`402(g)(8)(A)(iii)' and inserting `402(g)(7)(A)(iii)'.
(C) Clause (iii) of section 501(c)(18)(D) is amended by striking
`(other than paragraph (4) thereof)'.
(e) DEFERRED COMPENSATION PLANS OF STATE AND LOCAL GOVERNMENTS AND
TAX-EXEMPT ORGANIZATIONS-
(1) IN GENERAL- Section 457 (relating to deferred compensation plans of
State and local governments and tax-exempt organizations) is amended--
(A) in subsections (b)(2)(A) and (c)(1) by striking `$7,500' each
place it appears and inserting `the applicable dollar amount';
and
(B) in subsection (b)(3)(A) by striking `$15,000' and inserting `twice
the dollar amount in effect under subsection (b)(2)(A)'.
(2) APPLICABLE DOLLAR AMOUNT; COST-OF-LIVING ADJUSTMENT- Paragraph (15)
of section 457(e) is amended to read as follows:
`(15) APPLICABLE DOLLAR AMOUNT-
`(A) IN GENERAL- The applicable dollar amount shall be the amount
determined in accordance with the following table:
`For taxable years
--The applicable
beginning in
-- dollar amount:
calendar year:
--$11,000
--$12,000
--$13,000
--$14,000
--$15,000.
`(B) COST-OF-LIVING ADJUSTMENTS- In the case of taxable years
beginning after December 31, 2005, the Secretary shall adjust the $15,000
amount under subparagraph (A) at the same time and in the same manner as
under section 415(d), except that the base period shall be the calendar
quarter beginning July 1, 2004, and any increase under this paragraph
which is not a multiple of $500 shall be rounded to the next lowest
multiple of $500.'.
(f) SIMPLE RETIREMENT ACCOUNTS-
(1) LIMITATION- Clause (ii) of section 408(p)(2)(A) (relating to general
rule for qualified salary
reduction arrangement) is amended by striking `$6,000' and inserting `the
applicable dollar amount'.
(2) APPLICABLE DOLLAR AMOUNT- Subparagraph (E) of 408(p)(2) is amended
to read as follows:
`(E) APPLICABLE DOLLAR AMOUNT; COST-OF-LIVING ADJUSTMENT-
`(i) IN GENERAL- For purposes of subparagraph (A)(ii), the
applicable dollar amount shall be the amount determined in accordance
with the following table:
`For taxable years
--The applicable
beginning in
-- dollar amount:
calendar year:
2001
--$7,000
2002
--$8,000
2003
--$9,000
2004 or thereafter
--$10,000.
`(ii) COST-OF-LIVING ADJUSTMENT- In the case of a year beginning
after December 31, 2004, the Secretary shall adjust the $10,000 amount
under clause (i) at the same time and in the same manner as under
section 415(d), except that the base period taken into account shall be
the calendar quarter beginning July 1, 2003, and any increase under this
subparagraph which is not a multiple of $500 shall be rounded to the
next lower multiple of $500.'.
(3) CONFORMING AMENDMENTS-
(A) Subclause (I) of section 401(k)(11)(B)(i) is amended by striking
`$6,000' and inserting `the amount in effect under section
408(p)(2)(A)(ii)'.
(B) Section 401(k)(11) is amended by striking subparagraph
(E).
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