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S.631
Comprehensive Retirement Security and Pension Reform Act of 2001
(Introduced in Senate)
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).
(g) ROUNDING RULE RELATING
TO DEFINED BENEFIT PLANS AND DEFINED CONTRIBUTION PLANS- Paragraph (4) of
section 415(d) is amended to read as follows:
`(A) $160,000 AMOUNT- Any increase under subparagraph (A) of paragraph
(1) which is not a multiple of $5,000 shall be rounded to the next lowest
multiple of $5,000.
`(B) $40,000 AMOUNT- Any increase under subparagraph (C) of paragraph
(1) which is not a multiple of $1,000 shall be rounded to the next lowest
multiple of $1,000.'.
(h) EFFECTIVE DATE- The amendments made by this section shall apply to
years beginning after December 31, 2000.
SEC. 202. PLAN LOANS FOR SUBCHAPTER S OWNERS, PARTNERS, AND SOLE
PROPRIETORS.
(a) AMENDMENT OF INTERNAL REVENUE CODE- Subparagraph (B) of section
4975(f)(6) (relating to exemptions not to apply to certain transactions) is
amended by adding at the end the following new clause:
`(iii) LOAN EXCEPTION- For purposes of subparagraph (A)(i), the term
`owner-employee' shall only include a person described in subclause (II)
or (III) of clause (i).'.
(b) AMENDMENT OF ERISA- Section 408(d)(2) of the Employee Retirement
Income Security Act of 1974 (29 U.S.C. 1108(d)(2)) is amended by adding at the
end the following new subparagraph:
`(C) For purposes of paragraph (1)(A), the term `owner-employee' shall
only include a person described in clause (ii) or (iii) of subparagraph
(A).'.
(c) EFFECTIVE DATE- The amendments made by this section shall apply to
years beginning after December 31, 2001.
SEC. 203. MODIFICATION OF TOP-HEAVY RULES.
(a) SIMPLIFICATION OF DEFINITION OF KEY EMPLOYEE-
(1) IN GENERAL- Section 416(i)(1)(A) (defining key employee) is
amended--
(A) by striking `or any of the 4 preceding plan years' in the matter
preceding clause (i);
(B) by striking clause (i) and inserting the following:
`(i) an officer of the employer having an annual compensation
greater than $150,000,';
(C) by striking clause (ii) and redesignating clauses (iii) and (iv)
as clauses (ii) and (iii), respectively; and
(D) by striking the second sentence in the matter following clause
(iii), as redesignated by subparagraph (C).
(2) CONFORMING AMENDMENT- Section 416(i)(1)(B)(iii) is amended by
striking `and subparagraph (A)(ii)'.
(b) MATCHING CONTRIBUTIONS TAKEN INTO ACCOUNT FOR MINIMUM CONTRIBUTION
REQUIREMENTS- Section 416(c)(2)(A) (relating to defined contribution plans) is
amended by adding at the end the following: `Employer matching contributions
(as defined in section 401(m)(4)(A)) shall be taken into account for purposes
of this subparagraph.'.
(c) DISTRIBUTIONS DURING LAST YEAR BEFORE DETERMINATION DATE TAKEN INTO
ACCOUNT-
(1) IN GENERAL- Paragraph (3) of section 416(g) is amended to read as
follows:
`(3) DISTRIBUTIONS DURING LAST YEAR BEFORE DETERMINATION DATE TAKEN INTO
ACCOUNT-
`(A) IN GENERAL- For purposes of determining--
`(i) the present value of the cumulative accrued benefit for any
employee, or
`(ii) the amount of the account of any employee,
such present value or amount shall be increased by the aggregate
distributions made with respect to such employee under the plan during the
1-year period ending on the determination date. The preceding sentence
shall also apply to distributions under a terminated plan which if it had
not been terminated would have been required to be included in an
aggregation group.
`(B) 5-YEAR PERIOD IN CASE OF IN-SERVICE DISTRIBUTION- In the case of
any distribution made for a reason other than separation from service,
death, or disability, subparagraph (A) shall be applied by substituting
`5-year period' for `1-year period'.'.
(2) BENEFITS NOT TAKEN INTO ACCOUNT- Subparagraph (E) of section
416(g)(4) is amended--
(A) by striking `LAST 5 YEARS' in the heading and inserting `LAST YEAR
BEFORE DETERMINATION DATE'; and
(B) by striking `5-year period' and inserting `1-year
period'.
(d) DEFINITION OF TOP-HEAVY PLANS- Paragraph (4) of section 416(g)
(relating to other special rules for top-heavy plans) is amended by adding at
the end the following new subparagraph:
`(H) CASH OR DEFERRED ARRANGEMENTS USING ALTERNATIVE METHODS OF
MEETING NONDISCRIMINATION REQUIREMENTS- The term `top-heavy plan' shall
not include a plan which consists solely of--
`(i) a cash or deferred arrangement which meets the requirements of
section 401(k)(12), and
`(ii) matching contributions with respect to which the requirements
of section 401(m)(11) are met.
If, but for this subparagraph, a plan would be treated as a top-heavy
plan because it is a
member of an aggregation group which is a top-heavy group, contributions
under the plan may be taken into account in determining whether any other plan
in the group meets the requirements of subsection (c)(2).'.
(e) FROZEN PLAN EXEMPT FROM MINIMUM BENEFIT REQUIREMENT- Subparagraph (C)
of section 416(c)(1) (relating to defined benefit plans) is amended--
(A) by striking `clause (ii)' in clause (i) and inserting `clause (ii)
or (iii)'; and
(B) by adding at the end the following:
`(iii) EXCEPTION FOR FROZEN PLAN- For purposes of determining an
employee's years of service with the employer, any service with the
employer shall be disregarded to the extent that such service occurs
during a plan year when the plan benefits (within the meaning of section
410(b)) no key employee or former key employee.'.
(f) ELIMINATION OF FAMILY ATTRIBUTION- Section 416(i)(1)(B) (defining
5-percent owner) is amended by adding at the end the following new clause:
`(iv) FAMILY ATTRIBUTION DISREGARDED- Solely for purposes of
applying this paragraph (and not for purposes of any provision of this
title which incorporates by reference the definition of a key employee
or 5-percent owner under this paragraph), section 318 shall be applied
without regard to subsection (a)(1) thereof in determining whether any
person is a 5-percent owner.'.
(g) EFFECTIVE DATE- The amendments made by this section shall apply to
years beginning after December 31, 2001.
SEC. 204. ELECTIVE DEFERRALS NOT TAKEN INTO ACCOUNT FOR PURPOSES OF
DEDUCTION LIMITS.
(a) IN GENERAL- Section 404 (relating to deduction for contributions of an
employer to an employees' trust or annuity plan and compensation under a
deferred payment plan) is amended by adding at the end the following new
subsection:
`(n) ELECTIVE DEFERRALS NOT TAKEN INTO ACCOUNT FOR PURPOSES OF DEDUCTION
LIMITS- Elective deferrals (as defined in section 402(g)(3)) shall not be
subject to any limitation contained in paragraph (3), (7), or (9) of
subsection (a), and such elective deferrals shall
not be taken into account in applying any such limitation to any other
contributions.'.
(b) EFFECTIVE DATE- The amendment made by this section shall apply to
years beginning after December 31, 2001.
SEC. 205. REPEAL OF COORDINATION REQUIREMENTS FOR DEFERRED COMPENSATION
PLANS OF STATE AND LOCAL GOVERNMENTS AND TAX-EXEMPT ORGANIZATIONS.
(a) IN GENERAL- Subsection (c) of section 457 (relating to deferred
compensation plans of State and local governments and tax-exempt
organizations), as amended by section 201, is amended to read as follows:
`(c) LIMITATION- The maximum amount of the compensation of any one
individual which may be deferred under subsection (a) during any taxable year
shall not exceed the amount in effect under subsection (b)(2)(A) (as modified
by any adjustment provided under subsection (b)(3)).'.
(b) EFFECTIVE DATE- The amendment made by subsection (a) shall apply to
years beginning after December 31, 2001.
SEC. 206. ELIMINATION OF USER FEE FOR REQUESTS TO IRS REGARDING PENSION
PLANS.
(a) ELIMINATION OF CERTAIN USER FEES- The Secretary of the Treasury or the
Secretary's delegate shall not require payment of user fees under the program
established under section 10511 of the Revenue Act of 1987 for requests to the
Internal Revenue Service for determination letters with respect to the
qualified status of a pension benefit plan maintained solely by one or more
eligible employers or any trust which is part of the plan. The preceding
sentence shall not apply to any request--
(1) made after the later of--
(A) the fifth plan year the pension benefit plan is in existence;
or
(B) the end of any remedial amendment period with respect to the plan
beginning within the first 5 plan years; or
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