[Congressional Bills 115th Congress]
[From the U.S. Government Publishing Office]
[S. 1076 Introduced in Senate (IS)]
<DOC>
115th CONGRESS
1st Session
S. 1076
To amend the Employee Retirement Income Security Act of 1974 and the
Internal Revenue Code of 1986 to modify certain provisions relating to
multiemployer pensions, and for other purposes.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
May 9, 2017
Mr. Sanders (for himself, Ms. Baldwin, Mr. Brown, Mr. Franken, Ms.
Klobuchar, Mrs. McCaskill, Mr. Peters, Mr. Reed, Ms. Stabenow, and Mr.
Whitehouse) introduced the following bill; which was read twice and
referred to the Committee on Finance
_______________________________________________________________________
A BILL
To amend the Employee Retirement Income Security Act of 1974 and the
Internal Revenue Code of 1986 to modify certain provisions relating to
multiemployer pensions, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Keep Our Pension Promises Act''.
SEC. 2. RESTORING ANTI-CUTBACK PROVISIONS.
Section 201 of the Multiemployer Pension Reform Act of 2014
(division O of Public Law 113-235) and the amendments made by such
section are repealed, and the Employee Retirement Income Security Act
of 1974 and the Internal Revenue Code of 1986 shall be applied as if
such section and amendments had never been enacted.
SEC. 3. PARTITIONS OF ELIGIBLE MULTIEMPLOYER PLANS.
(a) In General.--Section 4233 of the Employee Retirement Income
Security Act of 1974 (29 U.S.C. 1413), as amended by section 122 of the
Multiemployer Pension Reform Act of 2014 (division O of Public Law 113-
235), is amended to read as follows:
``SEC. 4233. PARTITIONS OF ELIGIBLE MULTIEMPLOYER PLANS.
``(a)(1) Upon the application by the plan sponsor of an eligible
multiemployer plan for a partition of the plan, the corporation may
order a partition of the plan in accordance with this section. The
corporation shall make a determination regarding the application, in
accordance with regulations promulgated by the corporation, not later
than 270 days after--
``(A) the date such application was filed; or
``(B) if later, the date such application was completed.
``(2) At least 14 days before submitting an application for
partition of a plan under paragraph (1), the plan sponsor of the plan
shall notify all participants and beneficiaries of such application, in
the form and manner prescribed by regulations issued by the
corporation.
``(b) For purposes of this section, a multiemployer plan is an
eligible multiemployer plan if--
``(1) the plan is in critical status and is projected to
become insolvent within the meaning of section 4245--
``(A) during the current plan year or any of the 14
succeeding plan years; or
``(B) during the current plan year or any of the 19
succeeding plan years, if the plan has a ratio of
inactive participants to active participants that
exceeds 2 to 1 and the funded percentage of the plan is
less than 80 percent;
``(2) the corporation determines, after consultation with
the Participant and Plan Sponsor Advocate selected under
section 4004, that the plan sponsor has taken (or is taking
concurrently with an application for partition) all reasonable
measures described in section 432(e)(3)(A) of the Internal
Revenue Code of 1986, and has made (or is making) benefit
adjustments under section 432(e)(8) of such Code to reduce the
risk of insolvency;
``(3) 20 percent or more of the amount by which the
liabilities of the plan exceed the value of plan assets is
attributable to the service of participants whose employers--
``(A) withdrew from the plan prior to the date of
enactment of the Keep Our Pension Promises Act; and
``(B) failed to pay (or are delinquent with respect
to paying) the full amount of the employer's withdrawal
liability under section 4201(b)(1) or as otherwise
determined under an agreement with the plan;
``(4) the corporation reasonably expects that--
``(A) a partition of the plan will reduce the
corporation's expected long-term loss with respect to
the plan; and
``(B) a partition of the plan is necessary for the
plan to remain or become solvent; and
``(5) the corporation certifies to Congress that after
partition the corporation will continue to have the ability to
meet existing financial assistance obligations to other plans
(including any liabilities associated with multiemployer plans
that are insolvent or that are projected to become insolvent
within 10 years).
``(c)(1) A partition under this section shall consist of a transfer
to the plan created by the partition order of benefits to which
eligible participants and beneficiaries were entitled under the plan
that was partitioned, in an amount not to exceed the amount that would
be guaranteed under section 4022A if the plan were insolvent as of the
date of the partition order.
``(2) The corporation's partition order shall provide for an annual
transfer by the corporation to the plan created by the partition order
of an amount equal to the yearly benefits that would be guaranteed
under section 4022A to the eligible participants and beneficiaries if
the plan were insolvent as of the date of the partition order.
``(3)(A) Where practicable, the initial transfer in accordance with
paragraph (2) shall be completed at least 60 days prior to the plan
year that immediately follows the partition start date. The partition
order shall require that the initial transfer be sufficient to satisfy
the guaranteed benefits in the first plan year of the partitioned plan.
``(B) Subsequent transfers in accordance with paragraph (2) shall
be completed at least 60 days prior to the first day of each succeeding
plan year.
``(d)(1)(A) The plan created by the partition order is a successor
plan to which section 4022A applies.
``(B) At the discretion of the plan sponsor, the plan created by
the partition order may remain a part of the plan that was partitioned
or be maintained as a separate plan.
``(2)(A) The plan sponsor and the administrator of an eligible
multiemployer plan prior to the partition shall be the plan sponsor and
the administrator, respectively, of the plan created by the partition
order, and shall adopt reasonable procedures to reduce administrative
expenses and to coordinate benefit payments and communications with the
participants and beneficiaries in the plan created by the partition
order.
``(B) Benefit payments equal to the amount of an eligible
participant or beneficiary's guaranteed benefits shall be paid to such
participant or beneficiary and may be--
``(i) paid separately by the plan created by the partition
order; or
``(ii) paid in a single, monthly payment by the plan that
was partitioned.
``(3) In the event an employer withdraws from the plan that was
partitioned, withdrawal liability shall be computed under section 4201
with respect to both the plan that was partitioned and the plan created
by the partition order.
``(e) In addition to the payment of guaranteed benefits under
subsection (d)(2)(B), each eligible participant or beneficiary of the
plan created by the partition order shall receive a monthly benefit for
each month the benefit is in pay status in an amount that--
``(1) the corporation, in consultation with the Participant
and Plan Sponsor Advocate, determines to be fair to the plan,
the participant or beneficiary, the employers, and the
corporation; and
``(2) when aggregated with the payment under subsection
(d)(2)(B), results in a monthly benefit that is at least equal
to the lesser of--
``(A) the monthly nonforfeitable benefit for such
participant or beneficiary payable under the plan that
was partitioned; or
``(B) 80 percent of the maximum benefit commencing
at age 65 guaranteed under section 4022(a) for
participants and beneficiaries in terminated single
employer plans, unreduced for early retirement.
Such monthly benefit may be combined with the monthly payment under
subsection (d)(2)(B)(ii).
``(f)(1) The corporation shall establish a legacy fund for the
purposes of funding the administrative and benefit costs to the
corporation arising from partitions under this section, as described in
paragraph (2).
``(2) Any administrative and benefit costs to the corporation
arising from a partition ordered under this section in excess of
amounts available in such legacy fund shall be paid from the fund for
basic benefits guaranteed for multiemployer plans.
``(g) Only one partition order shall be issued with respect to each
eligible multiemployer plan.
``(h) For purposes of this subsection, the term `eligible
participant or beneficiary' means a participant or beneficiary of an
eligible multiemployer plan that is partitioned in accordance with a
petition order under this section, and who is an employee or
beneficiary of an employee of an employer that is described in
subsection (b)(3).
``(i) Not later than 14 days after the issuance of a partition
order under this section, the corporation shall provide notice of such
order to the Committee on Finance of the Senate, the Committee on
Health, Education, Labor, and Pensions of the Senate, the Committee on
Education and the Workforce of the House of Representatives, the
Committee on Ways and Means of the House of Representatives, and to all
eligible participants or beneficiaries whose guaranteed benefits will
be paid directly or indirectly by the plan created by the partition
order.''.
(b) Effective Date.--The amendments made by subsection (a) shall
apply with respect to plan years beginning after the date of enactment
of this Act.
(c) Transfers to Legacy Fund.--The Secretary of the Treasury shall
from time to time transfer from the general fund of the Treasury to the
legacy fund established under section 4233(f)(1) of the Employee
Retirement Income Security Act of 1974 (29 U.S.C. 1413(f)(1)) (as
amended by subsection (a)) amounts equal to the increase in revenues to
the Treasury by reason of the amendments made by sections 6 and 7 of
this Act.
(d) Transfers Between Funds of the PBGC.--Section 4005 of the
Employee Retirement Income Security Act of 1974 (29 U.S.C. 1305) is
amended by adding at the end the following:
``(i)(1) An eighth fund is established under section 4233(f) and
credited with the amounts described in section 3(c) of the Keep Our
Pension Promises Act.
``(2) Notwithstanding subsection (g), the corporation may transfer
amounts into the legacy fund established under section 4233(f)(1) from
other funds established under this section, as the corporation
determines appropriate.''.
SEC. 4. EMPLOYER WITHDRAWALS RELATING TO MULTIEMPLOYER PLANS.
The matter preceding paragraph (1) of section 4225(b) of the
Employee Retirement Income Security Act of 1974 (29 U.S.C. 1405(b)) is
amended by inserting ``, including an employer undergoing liquidation
under chapter 7 of title 11, United States Code, or similar provisions
of State law,'' after ``dissolution,''.
SEC. 5. PRIORITIES OF CLAIMS IN BANKRUPTCY.
(a) In General.--Section 507(a) of title 11, United States Code, is
amended--
(1) by redesignating paragraphs (1) through 10 as
paragraphs (2) through (11), respectively;
(2) by inserting before paragraph (2) (as redesignated) the
following:
``(1) First, withdrawal liability determined under part 1
of subtitle E of title IV of the Employee Retirement Income
Security Act of 1974 (29 U.S.C. 1381 et seq.).'';
(3) in the matter preceding subparagraph (A) of paragraph
(2) (as redesignated), by striking ``First:'' and inserting
``Second:'';
(4) in paragraph (3) (as redesignated), by striking
``Second,'' and inserting ``Third,'';
(5) in paragraph (4) (as redesignated), by striking
``Third,'' and inserting ``Fourth,'';
(6) in the matter preceding subparagraph (A) of paragraph
(5) (as redesignated), by striking ``Fourth,'' and inserting
``Fifth,'';
(7) in the matter preceding subparagraph (A) of paragraph
(6) (as redesignated), by striking ``Fifth,'' and inserting
``Sixth,'';
(8) in the matter preceding subparagraph (A) of paragraph
(7) (as redesignated), by striking ``Sixth,'' and inserting
``Seventh,'';
(9) in paragraph (8) (as redesignated), by striking
``Seventh,'' and inserting ``Eighth,'';
(10) in the matter preceding subparagraph (A) of paragraph
(9) (as redesignated), by striking ``Eighth,'' and inserting
``Ninth,'';
(11) in paragraph (10) (as redesignated), by striking
``Ninth,'' and inserting ``Tenth,''; and
(12) in paragraph (11) (as redesignated), by striking
``Tenth,'' and inserting ``Eleventh,''.
(b) Technical and Conforming Amendments.--
(1) Section 502(i) of title 11, United States Code, is
amended by striking ``section 507(a)(8)'' and inserting
``section 507(a)(9)''.
(2) Section 503(b)(1)(B)(i) of title 11, United States
Code, is amended by striking ``section 507(a)(8)'' and
inserting ``section 507(a)(9)''.
(3) Section 507(d) of title 11, United States Code, is
amended by striking ``(a)(1), (a)(4), (a)(5), (a)(6), (a)(7),
(a)(8), or (a)(9)'' and inserting ``(a)(2), (a)(5), (a)(6),
(a)(7), (a)(8), (a)(9), or (a)(10)''.
(4) Section 523(A) of title 11, United States Code, is
amended by striking ``section 507(a)(3) or 507(a)(8)'' and
inserting ``section 507(a)(4) or 507(a)(9)''.
(5) Section 724 of title 11, United States Code, is
amended--
(A) in subsection (b)(2), by striking ``section
507(a)(1)(C) or 507(a)(2)'' and inserting ``section
507(a)(2)(C) or 507(a)(3)''; and
(B) in subsection (f)--
(i) in paragraph (1), by striking ``section
507(a)(4)'' and inserting ``section
507(a)(5)''; and
(ii) in paragraph (2), by striking
``section 507(a)(5)'' and inserting ``section
507(a)(6)''.
(6) Section 726(b) of title 11, United States Code, is
amended by striking ``paragraph (1), (2), (3), (4), (5), (6),
(7), (8), (9), or (10) of section 507(a)'' and inserting
``paragraphs (2) through (11) of section 507(a)''.
(7) Section 752(a) of title 11, United States Code, is
amended by striking ``section 507(a)(2)'' and inserting
``section 507(a)(3)''.
(8) Section 766 of title 11, United States Code, is
amended--
(A) in subsection (h), by striking ``section
507(a)(2)'' and inserting ``section 507(a)(3)''; and
(B) in subsection (i)--
(i) in paragraph (1), by striking ``section
507(a)(2)'' and inserting ``section
507(a)(3)''; and
(ii) in paragraph (2), by striking
``section 507(a)(2)'' and inserting ``section
507(a)(3)''.
(9) Section 901 of title 11, United States Code, is amended
by striking ``507(a)(2)'' and inserting ``507(a)(3)''.
(10) Section 943(b)(5) of title 11, United States Code, is
amended by striking ``section 507(a)(2)'' and inserting
``section 507(a)(3)''.
(11) Section 1123(a)(1) of title 11, United States Code, is
amended by striking ``section 507(a)(2), 507(a)(3), or
507(a)(8)'' and inserting ``section 507(a)(3), 507(a)(4), or
507(a)(9)''.
(12) Section 1129(a)(9) of title 11, United States Code, is
amended--
(A) in subparagraph (A), by striking ``section
507(a)(3) or 507(a)(4)'' and inserting ``section
507(a)(4) or 507(a)(5)'';
(B) in the matter preceding clause (i) of
subparagraph (B), by striking ``section 507(a)(1),
507(a)(4), 507(a)(5), 507(a)(6), or 507(a)(7)'' and
inserting ``section 507(a)(2), 507(a)(5), 507(a)(6),
507(a)(7), or 507(a)(8)'';
(C) in the matter preceding clause (i) of
subparagraph (C), by striking ``section 507(a)(8)'' and
inserting ``section 507(a)(9)''; and
(D) in subparagraph (D), by striking ``section
507(a)(8)'' and inserting ``section 507(a)(9)''.
(13) Section 1222(a)(4) of title 11, United States Code, is
amended by striking ``section 507(a)(1)(B)'' and inserting
``507(a)(2)(B)''.
(14) Section 1226(b)(1) of title 11, United States Code, is
amended by striking ``section 507(a)(2)'' and inserting
``section 507(a)(3)''.
(15) Section 1322(a)(4) of title 11, United States Code, is
amended by striking ``section 507(a)(1)(B)'' and inserting
``section 507(a)(2)(B)''.
(16) Section 1326(b)(1) of title 11, United States Code, is
amended by striking ``section 507(a)(2)'' and inserting
``section 507(a)(3)''.
(17) Section 1328(a)(2) of title 11, United States Code, is
amended by striking ``section 507(a)(8)(C)'' and inserting
``section 507(a)(9)(C)''.
SEC. 6. LIMITATION OF NONRECOGNITION OF LIKE-KIND EXCHANGES.
(a) In General.--Paragraph (2) of section 1031(a) of the Internal
Revenue Code of 1986 is amended--
(1) by redesignating subparagraphs (A), (B), (C), (D), (E),
and (F) as clauses (i), (ii), (iii), (iv), (v), and (vi), and
by moving such clauses 2 ems to the right,
(2) by moving the flush language after the first sentence 2
ems to the right,
(3) by striking ``(2) Exception.--This subsection'' and
inserting ``(2) Exceptions.--
``(A) Excluded property.--This subsection'', and
(4) by adding at the end the following new subparagraph:
``(B) Dollar limitation for exchanges of real
property.--
``(i) In general.--Paragraph (1) shall not
apply so much of the gain which, but for such
paragraph, would be recognized by the taxpayer
with respect to real property exchanged during
the taxable year as exceeds $1,000,000.
``(ii) Special rules for partnerships and
s-corporations.--In the case of a pass-through
entity, clause (i) shall be applied at both the
entity and at the partner or owner level.
``(iii) Aggregation rules.--For purposes of
this subparagraph--
``(I) Family members.--Individuals
who are spouses or who bear any of the
relationships described in section
152(d)(2) to each other shall be
treated as 1 taxpayer (without regard
to whether spouses file a joint
return).
``(II) Corporations and other
entities.--All persons treated as a
single employer under subsection (a) or
(b) of section 52 or subsection (m) or
(o) of section 414 shall be treated as
1 person.
``(iv) Adjustment for inflation.--In the
case of exchanges completed in a taxable year
beginning after December 31, 2017, the
$1,000,000 amount in clause (i) shall be
increased by an amount equal to--
``(I) such dollar amount,
multiplied by
``(II) the cost-of-living
adjustment determined under section
1(f)(3) for the calendar year in which
the taxable year begins, determined by
substituting `calendar year 2016' for
`calendar year 1992' in subparagraph
(B) thereof.
If any amount as adjusted under the preceding
sentence is not a multiple of $1,000, such
amount shall be rounded to the nearest multiple
of $1,000.''.
(b) Exclusion of Art and Collectibles.--Subparagraph (A) of section
1031(a)(2) of the Internal Revenue Code of 1986, as amended by
subsection (a), is amended--
(1) by striking ``or'' at the end of clause (v),
(2) by striking the period at the end of clause (vi) and
inserting ``, or'', and
(3) by inserting after clause (vi) the following new
clause:
``(vii) any collectible (within the meaning
of section 408(m), without regard to paragraph
(3) thereof).''.
(c) Regulatory Authority.--Subsection (f) of section 1031 of the
Internal Revenue Code of 1986 is amended by adding at the end the
following new paragraph:
``(5) Rules relating to dollar limitation.--The Secretary
shall prescribe such guidance as is necessary for applying
subsection (a)(2)(B)(i) in the case of the exchange of multiple
pieces of real property by related persons.''.
(d) Conforming Amendments.--
(1) Subsection (b) of section 1031 of the Internal Revenue
Code of 1986 is amended--
(A) by striking ``in Kind.--If an exchange'' and
inserting ``in Kind.--
``(1) In general.--If an exchange'', and
(B) by adding at the end the following new
paragraph:
``(2) Coordination with subsection (a)(2)(B).--In the case
of an exchange to which paragraph (1) applies--
``(A) paragraph (1) shall be applied before the
application of subsection (a)(2)(B), and
``(B) subsection (a)(2)(B) shall be applied--
``(i) as if such exchange were within the
provisions of subsection (a), and
``(ii) by increasing the basis of the
property disposed of by the taxpayer in such
exchange by the amount of any gain determined
under paragraph (1).''.
(2) Subsection (d) of section 1031 of such Code is amended
by striking ``in the amount of gain'' and inserting ``in the
amount of gain (including any gain recognized by reason of
subsection (a)(2)(B)(i))''.
(3) Subsection (i) of section 1031 of such Code is amended
by striking ``(a)(2)(B)'' and inserting ``(a)(2)(A)(ii)''.
(e) Effective Date.--The amendments made by this section shall
apply to exchanges completed in taxable years beginning after December
31, 2016.
SEC. 7. CONTRIBUTION LIMIT AND INCREASED MINIMUM DISTRIBUTIONS FOR
CERTAIN RETIREMENT PLANS WITH LARGE ACCOUNT BALANCES.
(a) Contribution Limit.--
(1) In general.--Subpart A of part I of subchapter D of
chapter 1 of the Internal Revenue Code of 1986 is amended by
adding at the end the following:
``SEC. 409B. CONTRIBUTION LIMIT ON CERTAIN RETIREMENT PLANS WITH LARGE
ACCOUNT BALANCES.
``(a) General Rule.--Notwithstanding any other provision of this
title, no applicable annual additions shall be made by, or on behalf
of, an individual for the taxable year to any applicable retirement
plan to the extent such applicable annual additions exceed the excess
(if any) of--
``(1) the applicable dollar amount for the taxable year,
over
``(2) the aggregate balances to the credit of the
individual (whether as a participant, owner, or beneficiary) in
all applicable retirement plans (determined as of the close of
the calendar year preceding the calendar year in which the
taxable year begins).
``(b) Rules Relating to Contribution Limitations.--
``(1) Plans other than certain iras.--
``(A) In general.--Except as provided in paragraph
(2), applicable annual additions in excess of the
limitation under subsection (a) shall be treated for
purposes of this title in the same manner as excess
deferrals are treated under section 402(g).
``(B) Special rule for after tax contributions.--
If, without regard to this paragraph, any portion of an
applicable annual addition to which subparagraph (A)
applies with respect to an individual is not excludable
from gross income of the individual (or no deduction is
allowable to the individual with respect to such
portion), such portion shall not be--
``(i) includible in gross income by reason
of the application of subparagraph (A), or
``(ii) taken into account in computing the
investment in the contract for purposes of
section 72.
``(2) Special rule for iras.--
``(A) In general.--In the case of an applicable
retirement plan which is an individual retirement plan
(other than a simplified employee pension under section
408(k) or a simple retirement account under section
408(p)), any applicable annual addition to such plan in
excess of the limitation under subsection (a) shall be
treated for purposes of sections 408 and 408A as a
contribution for the taxable year in excess of the
maximum amount allowable as a deduction under section
219 for the taxable year.
``(B) After tax contributions.--In the case of
applicable annual additions in excess of the limitation
under subsection (a)--
``(i) which are treated as designated
nondeductible contributions under section
408(o), rules similar to the rules of paragraph
(1)(B) shall apply, and
``(ii) to a Roth IRA, section 408A(d)(2)(C)
shall apply to such additions and to any net
income allocable to such additions.
For purposes of clause (ii), distributions from a Roth
IRA shall be treated as first made from amounts
described in clause (ii) and section 408A(d)(2)(C)
shall be applied in the same manner as if there were a
distribution of a contribution described in section
408(d)(4) (without regard to whether such distribution
is timely made).
``(3) Allocation of excess applicable annual additions.--If
the applicable dollar amount for a taxable year exceeds the
amount described in subsection (a)(2), the taxpayer may, in
such form and manner as the Secretary may prescribe, allocate
such excess to applicable annual additions to each applicable
retirement plan in such manner as the taxpayer chooses.
``(c) Definitions and Special Rules.--For purposes of this
section--
``(1) Applicable annual addition.--
``(A) In general.--The term `applicable annual
addition' means any of the following made to or on
behalf of an individual:
``(i) An annual addition (within the
meaning of section 415(c)(2)).
``(ii) Any contribution to an individual
retirement plan, including any employer or
employee contribution to a simplified employee
pension under section 408(k) or a simple
retirement account under section 408(p).
``(iii) Any deferral under an eligible
deferred compensation plan described in section
457(b) which is maintained by an eligible
employer described in section 457(e)(1)(A).
``(B) Rollover contributions disregarded.--A
rollover contribution under section 402(c), 403(b)(8),
408(d)(3)(A)(ii), or 457(e)(16) shall not be treated as
an annual addition.
``(2) Applicable dollar amount.--
``(A) In general.--The term `applicable dollar
amount' means $5,000,000.
``(B) Adjustment for inflation.--In the case of any
taxable year beginning after 2017, the $5,000,000
amount under subparagraph (A) shall be increased by an
amount equal to the product of--
``(i) such amount, and
``(ii) the cost-of-living adjustment under
section 1(f)(3) for the calendar year in which
such taxable year begins, determined by
substituting `calendar year 2016' for `calendar
year 1992' in subparagraph (B) thereof.
``(C) Rounding.--If any amount as adjusted under
subparagraph (B) is not a multiple of $1,000, such
amount shall be rounded to the next lowest multiple of
$1,000.
``(3) Applicable retirement plan.--The term `applicable
retirement plan' means--
``(A) a defined contribution plan to which section
401(a) or 403(a) applies,
``(B) an annuity contract under section 403(b),
``(C) an eligible deferred compensation plan
described in section 457(b) which is maintained by an
eligible employer described in section 457(e)(1)(A), or
``(D) an individual retirement plan.
``(d) Regulations.--The Secretary shall prescribe such regulations
and guidance as are necessary or appropriate to carry out the purposes
of this section, including regulations or guidance that provide for the
application of this section and section 4974(e) in the case of plans
with a valuation date other than the last day of a calendar year.''.
(2) Conforming amendments.--
(A) The table of contents for subpart A of part I
of subchapter D of chapter 1 of such Code is amended by
adding after the item relating to section 409A the
following new item:
``Sec. 409B. Contribution limit on certain retirement plans with large
account balances.''.
(B) Section 402(g) of such Code is amended by
adding at the end the following new paragraph:
``(9) Aggregate limitation.--For additional limitation on
contributions to certain plans with large account balances, see
section 409B.''.
(C) Section 403(b)(1) of such Code is amended by
adding at the end the following new sentence: ``For
additional limitation on contributions to certain plans
with large account balances, see section 409B.''.
(D) Section 408(r) of such Code is amended by
adding at the end the following new paragraph:
``(3) For additional limitation on contributions to certain
plans with large account balances, see section 409B.''.
(E) Section 457(c) of such Code is amended by
adding at the end the following new sentence: ``For
additional limitation on contributions to certain plans
with large account balances, see section 409B.''.
(b) Excise Tax on Excess Annual Additions.--
(1) In general.--Subsection (a) of section 4973 of the
Internal Revenue Code of 1986 is amended--
(A) by striking ``or'' at the end of paragraph (5),
(B) by inserting ``or'' after the comma at the end
of paragraph (6), and
(C) by inserting after paragraph (6) the following
new paragraph:
``(7) an applicable retirement plan (within the meaning of
section 409B(c)(3)),''.
(2) Excess contributions to applicable retirement plans.--
Section 4973 of such Code is amended by adding at the end the
following new subsection:
``(i) Excess Contributions to Applicable Retirement Plans.--For
purposes of this section, in the case of applicable retirement plans
(within the meaning of section 409B(c)(3)), the term `excess
contributions' with respect to any taxable year means the sum of--
``(1) the excess of the applicable annual additions (within
the meaning of section 409B(c)(1)) to such plans over the
limitation under section 409B(a) for such taxable year, and
``(2) the lesser of--
``(A) the amount determined under this subsection
for the preceding taxable year, reduced by the
aggregate distributions from such plans for the taxable
year (including distributions required under section
4974(e)) to the extent not contributed in a rollover
contribution to another eligible retirement plan in
accordance with section 402(c), 403(b)(8), 457(e)(16),
408(d)(3), or 408A(d)(3), or
``(B) the amount (if any) by which the amount
determined under section 409B(a)(2) for the taxable
year exceeds the applicable dollar amount under section
409B(c)(2) for the taxable year.''.
(3) Conforming amendments.--Subsection (a) of section 4973
of such Code is amended--
(A) by striking ``accounts or annuities'' and
inserting ``accounts, annuities, or plans'', and
(B) by striking ``account or annuity'' and
inserting ``account, annuity, or plan''.
(c) Increase in Minimum Required Distributions.--
(1) In general.--Section 4974 of the Internal Revenue Code
of 1986 is amended by adding at the end the following:
``(e) Increase in Minimum Required Distributions for Payees With
Large Aggregate Account Balances.--
``(1) In general.--If this subsection applies to a payee
for any taxable year--
``(A) all qualified retirement plans and eligible
deferred compensation plans of the payee which are
applicable retirement plans taken into account in
computing the excess described in paragraph (2)(A)
shall be treated as 1 plan solely for purposes of
applying this section to the increase in minimum
required distributions for the taxable year described
in subparagraph (B), and
``(B) the minimum required distributions under this
section for all plans treated as 1 plan under
subparagraph (A) with respect to such payee for the
taxable year shall be increased by the excess (if any)
of--
``(i) the excess described in paragraph
(2)(A), over
``(ii) the sum of the minimum required
distributions (determined without regard to
this subsection) for all such plans.
``(2) Application.--This subsection shall apply to a payee
for a taxable year--
``(A) if the aggregate balances to the credit of
the payee (whether as a participant, owner, or
beneficiary) in all applicable retirement plans
(determined as of the close of the calendar year
preceding the calendar year in which the taxable year
begins) exceed the applicable dollar amount for the
calendar year in which the taxable year begins, and
``(B) without regard to whether amounts with
respect to the payee are otherwise required to be
distributed under section 401(a)(9), 403(b)(10),
408(a)(6), 408(b)(3), or 457(d)(2).
``(3) Coordination and allocation.--
``(A) Minimum distribution requirements.--If this
subsection applies to a payee for any taxable year--
``(i) this section shall apply first to
minimum required distributions determined
without regard to this subsection and then to
any increase in minimum required distributions
by reason of this subsection, and
``(ii) nothing in this subsection shall be
construed to affect the amount of any minimum
required distribution determined without regard
to this subsection or the plan or plans from
which it is required to be distributed from.
``(B) Allocation of increase in minimum required
distributions.--The taxpayer may, in such form and
manner as the Secretary may prescribe, allocate any
increase in minimum required distributions by reason of
this subsection to applicable retirement plans treated
as 1 plan under subparagraph (A) in such manner as the
taxpayer chooses.
``(4) Treatment of roth iras.--
``(A) In general.--Notwithstanding section
408A(c)(5)--
``(i) the aggregate balance to the credit
of a payee of any Roth IRA shall be taken into
account for purposes of this subsection, and
``(ii) distributions from a Roth IRA may be
taken into account in determining whether the
required increase in minimum required
distributions by reason of this subsection has
been satisfied.
``(B) Inclusion in income of distributed
earnings.--If any distribution from a Roth IRA is taken
into account under subparagraph (A)(ii), then,
notwithstanding section 408A(d)(5), the portion of such
distribution which is properly allocable to net income
on contributions to the Roth IRA shall not be treated
as a qualified distribution and shall be included in
gross income of the payee.
``(5) Ratable inclusion for first year of increase.--If the
first taxable year of a taxpayer for which there is a required
increase in minimum required distributions by reason of this
subsection begins before January 1, 2019, any amount required
to be included in gross income by reason of such increase shall
be included in income ratably over the 6-taxable-year period
(or such shorter period as the taxpayer may elect) beginning
with such first taxable year.
``(6) Definitions.--For purposes of this subsection, any
term used in this subsection which is also used in section 409B
shall have the same meaning as when such term is used in such
section.''.
(2) Exception from 10 percent additional tax on early
distributions.--Section 72(t)(2) of such Code is amended by
adding at the end the following new subparagraph:
``(H) Distributions of excess balances.--
Distributions from applicable retirement plans (within
the meaning of section 409B) to the extent such
distributions during the taxable year do not exceed the
amount (if any) by which--
``(i) the amount determined under section
409B(a)(2) for the taxable year, exceeds
``(ii) the applicable dollar amount under
section 409B(c)(2) for the preceding taxable
year.''.
(d) Reporting Requirements.--Section 6047 of the Internal Revenue
Code of 1986 is amended by redesignating subsection (g) as subsection
(h) and by inserting after subsection (f) the following:
``(g) Reporting Relating to Aggregate Contribution and Balance
Limits on Certain Retirement Plans.--The Secretary shall require the
plan administrator or trustee of an applicable retirement plan (as
defined in section 409B) to make such returns and reports to the
Secretary and participants and beneficiaries as are necessary to apply
the aggregate limits on contributions imposed by section 409B and the
increases in minimum required distributions required by section
4974(e). If the account balance of a plan as of the close of a calendar
year is not otherwise required under this title to be reported to a
participant, a beneficiary, or the Secretary, such requirements shall
include a requirement that the plan administrator or trustee shall
notify the participant, the beneficiary, or the Secretary of such
account balance at such time and in such manner as the Secretary may
prescribe.''.
(e) Effective Dates.--
(1) In general.--The amendments made by this section shall
apply to taxable years beginning after the date of the
enactment of this Act.
(2) Plan requirements.--The amendments made by subsection
(d) shall apply to years beginning after the date of the
enactment of this Act.
<all>