I
112th CONGRESS
2d Session
H. R. 4143
IN THE HOUSE OF REPRESENTATIVES
March 5, 2012
Mr. Tiberi (for himself and Mr. Pascrell) introduced the following bill; which was referred to the Committee on Ways and Means, and in addition to the Committee on Education and the Workforce, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned
A BILL
To amend the Internal Revenue Code of 1986 to extend the period during which transfers of excess pension assets may be made to retiree health accounts and to provide for the transfer of such assets to retiree group term life insurance accounts.
Short title
This Act may be cited as the
Extension of Section 420 and Retiree
Life Insurance Act of 2012
.
Extension for transfers of excess pension assets to retiree health accounts
In general
Paragraph (5) of
section 420(b) of the Internal Revenue Code of 1986 is amended by striking
December 31, 2013
and inserting December 31,
2021
.
Conforming ERISA amendments
Sections 101(e)(3), 403(c)(1), and
408(b)(13) of the Employee Retirement Income Security Act of 1974 are each
amended by striking Pension Protection Act of 2006
and inserting
Extension of Section 420 and Retiree Life Insurance Act of 2012
.
Section 408(b)(13)
of such Act (29 U.S.C. 1108(b)(13)) is amended by striking January 1,
2014
and inserting January 1, 2022
.
Effective date
The amendments made by this Act shall take effect on the date of the enactment of this Act.
Transfer of excess pension assets to retiree group term life insurance accounts
In general
Subsection (a) of
section 420 of the Internal Revenue Code of 1986 is amended by inserting
, or an applicable life insurance account,
after health
benefits account
.
Applicable life insurance account defined
In general
Subsection (e) of section 420 of the Internal Revenue Code of 1986 is amended by redesignating paragraphs (4) and (5) as paragraphs (5) and (6), respectively, and by inserting after paragraph (3) the following new paragraph:
Applicable life insurance account
The term applicable life insurance account means a separate account established and maintained for amounts transferred under this section for qualified current retiree liabilities based on premiums for applicable life insurance benefits.
.
Applicable life insurance benefits defined
Paragraph (1) of section 420(e) of such Code is amended by redesignating subparagraph (D) as subparagraph (E) and by inserting after subparagraph (C) the following new subparagraph:
Applicable life insurance benefits
The term applicable life insurance benefits means group-term life insurance coverage provided to retired employees who, immediately before the qualified transfer, are entitled to receive such coverage by reason of retirement and who are entitled to pension benefits under the plan, but only to the extent that such coverage is provided under a policy for retired employees and the cost of such coverage is excludable from the retired employee’s gross income under section 79.
.
Collectively bargained life insurance benefits defined
In general
Paragraph (6) of section 420(f) of such Code is amended by redesignating subparagraph (D) as subparagraph (E) and by inserting after subparagraph (C) the following new subparagraph:
Collectively bargained life insurance benefits
The term collectively bargained life insurance benefits means, with respect to any collectively bargained transfer—
applicable life insurance benefits which are provided to retired employees who, immediately before the transfer, are entitled to receive such benefits by reason of retirement, and
if specified by the provisions of the collective bargaining agreement governing the transfer, applicable life insurance benefits which will be provided at retirement to employees who are not retired employees at the time of the transfer.
.
Conforming amendments
Clause (i) of
section 420(e)(1)(C) of such Code is amended by striking upon
retirement
and inserting by reason of retirement
.
Subparagraph (C) of section 420(f)(6) of such Code is amended—
by striking
which are provided to
in the matter preceding clause (i),
by inserting
which are provided to
before retired employees
in
clause (i),
by striking
upon retirement
in clause (i) and inserting by reason of
retirement
, and
by striking
active employees who, following their retirement,
and inserting
which will be provided at retirement to employees who are not retired
employees at the time of the transfer and who
.
Maintenance of effort
In general
Subparagraph (A) of section 420(c)(3) of the Internal
Revenue Code of 1986 is amended by inserting , and each group-term life
insurance plan under which applicable life insurance benefits are
provided,
after health benefits are provided
.
Conforming amendments
Subparagraph (B) of section 420(c)(3) of such Code is amended—
by redesignating subclauses (I) and (II) of clause (i) as subclauses (II) and (III) of such clause, respectively, and by inserting before subclause (II) of such clause, as so redesignated, the following new subclause:
separately with respect to applicable health benefits and applicable life insurance benefits,
, and
by
striking for applicable health benefits
and all that follows in
clause (ii) and inserting was provided during such taxable year for the
benefits with respect to which the determination under clause (i) is
made.
.
Subparagraph (C) of section 420(c)(3) of such Code is amended—
by
inserting for applicable health benefits
after applied
separately
, and
by
inserting , and separately for applicable life insurance benefits with
respect to individuals age 65 or older at any time during the taxable year and
with respect to individuals under age 65 during the taxable year
before
the period.
Subparagraph (E) of section 420(c)(3) of such Code is amended—
in
clause (i), by inserting or retiree life insurance coverage, as the case
may be,
after retiree health coverage
,
in
clause (ii), by inserting for
retiree health coverage
after cost reductions
in the
heading thereof, and
in clause (ii)(II), by inserting
with respect to applicable health benefits
after
liabilities of the employer
.
Paragraph (2) of
section 420(f) of such Code is amended by striking collectively
bargained retiree health liabilities
each place it occurs and inserting
collectively bargained retiree liabilities
.
Clause (i) of section 420(f)(2)(D) of such Code is amended—
by
inserting , and each group-term life insurance plan or arrangement under
which applicable life insurance benefits are provided,
in subclause (I)
after applicable health benefits are provided
,
by
inserting or applicable life insurance benefits, as the case may
be,
in subclause (I) after provides applicable health
benefits
,
by
striking group health
in subclause (II), and
by
inserting or collectively bargained life insurance benefits
in
subclause (II) after collectively bargained health
benefits
.
Clause (ii) of section 420(f)(2)(D) of such Code is amended—
by inserting with respect to
applicable health benefits or applicable life insurance benefits
after
requirements of subsection (c)(3)
, and
by
adding at the end the following: Such election may be made separately
with respect to applicable health benefits and applicable life insurance
benefits. In the case of an election with respect to applicable life insurance
benefits, the first sentence of this clause shall be applied as if subsection
(c)(3) as in effect before the amendments made by such Act applied to such
benefits.
.
Clause (iii) of section 420(f)(2)(D) of such Code is amended—
by striking
retiree
each place it occurs, and
by
inserting , collectively bargained life insurance benefits, or both, as
the case may be,
after health benefits
each place it
occurs.
Coordination with section 79
Section 79 of the Internal Revenue Code of 1986 is amended by adding at the end the following new subsection:
Exception for life insurance purchased in connection with qualified transfer of excess pension assets
Subsection (b)(3) and section 72(m)(3) shall not apply in the case of any cost paid (whether directly or indirectly) with assets held in an applicable life insurance account (as defined in section 420(e)(4)) under a defined benefit plan.
.
Conforming amendments
Section 420 of the
Internal Revenue Code of 1986 is amended by striking qualified current
retiree health liabilities
each place it appears and inserting
qualified current retiree liabilities
.
Section 420 of
such Code is amended by inserting , or an applicable life insurance
account,
after a health benefits account
each place it
appears in subsection (b)(1)(A), subparagraphs (A), (B)(i), and (C) of
subsection (c)(1), subsection (d)(1)(A), and subsection (f)(2)(E)(ii).
Section 420(b) of such Code is amended—
by adding the
following at the end of paragraph (2)(A): If there is a transfer from a
defined benefit plan to both a health benefits account and an applicable life
insurance account during any taxable year, such transfers shall be treated as 1
transfer for purposes of this paragraph.
, and
by inserting
to an account
after may be transferred
in
paragraph (3).
The heading for
section 420(c)(1)(B) of such Code is amended by inserting
or life
insurance
after health
benefits
.
Paragraph (1) of section 420(e) of such Code is amended—
by inserting
and applicable life insurance benefits
in subparagraph (A) after
applicable health benefits
, and
by striking
health
in the heading thereof.
Subparagraph (B) of section 420(e)(1) of such Code is amended—
in the matter
preceding clause (i), by inserting (determined separately for applicable
health benefits and applicable life insurance benefits)
after
shall be reduced by the amount
,
in clause (i), by
inserting or applicable life insurance accounts
after
health benefit accounts
, and
in clause (i), by striking qualified
current retiree health liability
and inserting qualified current
retiree liability
.
The heading for
subsection (f) of section 420 of such Code is amended by striking
health
each place it occurs.
Subclause (II) of
section 420(f)(2)(B)(ii) of such Code is amended by inserting or
applicable life insurance account, as the case may be,
after
health benefits account
.
Subclause (III) of section 420(f)(2)(E)(i) of such Code is amended—
by inserting
defined benefit
before plan maintained by an
employer
, and
by inserting
health
before benefit plans maintained by the
employer
.
Paragraphs (4)
and (6) of section 420(f) of such Code are each amended by striking
collectively bargained retiree health liabilities
each place it
occurs and inserting collectively bargained retiree
liabilities
.
Subparagraph (A) of section 420(f)(6) of such Code is amended—
in clauses (i) and
(ii), by inserting , in the case of a transfer to a health benefits
account,
before his covered spouse and dependents
,
and
in clause (ii), by
striking health plan
and inserting plan
.
Subparagraph (B) of section 420(f)(6) of such Code is amended—
in clause (i), by
inserting , and collectively bargained life insurance benefits,
after collectively bargained health benefits
,
in clause (ii)—
by
adding at the end the following: The preceding sentence shall be applied
separately for collectively bargained health benefits and collectively
bargained life insurance benefits.
, and
by
inserting , applicable life insurance accounts,
after
health benefit accounts
, and
by striking
health
in the heading thereof.
Subparagraph (E) of section 420(f)(6) of such Code, as redesignated by subsection (b), is amended—
by striking
bargained health
and inserting bargained
,
by inserting
, or a group-term life insurance plan or arrangement for retired
employees,
after dependents
, and
by striking
health
in the heading thereof.
Section 101(e) of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1021(e)) is amended—
in paragraphs (1)
and (2), by inserting or applicable life insurance account
after
health benefits account
each place it appears, and
in paragraph (1),
by inserting or applicable life insurance benefit liabilities
after health benefits liabilities
.
Technical correction
Clause (iii) of section 420(f)(6)(B) is amended by
striking 416(I)(1)
and inserting
416(i)(1)
.
Repeal of deadwood
Subparagraph (A) of section 420(b)(1) of
the Internal Revenue Code of 1986 is amended by striking in a taxable
year beginning after December 31, 1990
.
Subsection (b) of section 420 of such Code is amended by striking paragraph (4) and by redesignating paragraph (5), as amended by this Act, as paragraph (4).
Paragraph (2) of section 420(b) of such Code, as amended by this section, is amended—
by striking subparagraph (B), and
by striking
per
year.—
and all that follows through No more
than
and inserting per year.—No more than
.
Paragraph (2) of section 420(c) of such Code is amended—
by striking subparagraph (B),
by moving subparagraph (A) two ems to the left, and
by striking
before
transfer.—
and all that follows through The
requirements of this paragraph
and inserting the following:
before
transfer.—The requirements of this paragraph
.
Paragraph (2) of
section 420(d) of such Code is amended by striking after December 31,
1990
.
Effective date
In general
The amendments made by this section shall apply to transfers made after the date of the enactment of this Act.
Conforming amendments relating to Pension Protection Act
The amendments made by subsections (b)(3)(B) and (f) shall take effect as if included in the amendments made by section 841(a) of the Pension Protection Act of 2006.