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H.R. 4280 (98th): Retirement Equity Act of 1984

The text of the bill below is as of Aug 23, 1984 (Passed Congress).


98 STAT. 1426                    PUBLIC LAW 98-397—AUG. 23, 1984
                 Public Law 98-397
                 98th Congress
                                                      An Act
                 To amend the Employee Retirement Income Security Act of 1974 and the Internal
                   Revenue Code of 1954 to improve the delivery of retirement benefits and provide
 Aug. 23, 1984     for greater equity under private pension plans for workers and their spouses and
  [H.R. 4280]      dependents by taking into account changes in work patterns, the status of marriage
                   as an economic partnership, and the substantial contribution to that partnership of
                   spouses who work both in and outside the home, and for other purposes.
                     Be it enacted by the Senate and House of Representatives of the
Retirement       United States of America in Congress assembled,
Equity Act of                   '
1984.            SECTION 1. SHORT TITLE.
29 u s e 1001
note.              This Act may be cited as the "Retirement Equity Act of 1984".

                 TITLE I — AMENDMENTS TO THE
                   EMPLOYEE RETIREMENT INCOME SE-
                   CURITY ACT OF 1974
                 SEC. 101. AMENDMENT OF ERISA.
                   Except as otherwise expressly provided, whenever in this title an
                 amendment or repeal is expressed in terms of an amendment to, or
                 repeal of, a section or other provision, the reference shall be consid-
                 ered to be made to a section or other provision of the Employee
29 use 1001      Retirement Income Security Act of 1974.
note.
                 SEC. 102. MODIFICATIONS OF MINIMUM PARTICIPATION AND VESTING
                             STANDARDS.
                   (a) AGE LIMITATION FOR MINIMUM PARTICIPATION STANDARDS LOW-
                 ERED FROM AGE 25 TO AGE 21.—
                         (1) IN GENERAL.—Clause (i) of section 202(a)(lXA) (29 U.S.C.
                      1052(aXlXAXi)) is amended by striking out "25" and inserting in
                      lieu thereof "21".
                         (2) SPECIAL RULE FOR CERTAIN PLANS.—Clause (ii) of section
                      202(aXlXB) (29 U.S.C. 1052(aXlXBXii)) is amended by striking
                      out " '30' for '25' " and inserting in lieu thereof " '26' for '21' ' \
                   (b) YEARS OF SERVICE AFTER AGE 18 (INSTEAD OF AGE 22) TAKEN
                 INTO ACCOUNT FOR DETERMINING NONFORFEITABLE PERCENTAGE.—
                 Subparagraph (A) of section 203(bXl) (29 U.S.C. 1053(bXlXA)) is
                 amended by striking out "22" and inserting in lieu thereof "18".
                   (c) BREAK IN SERVICE FOR VESTING UNDER INDIVIDUAL ACCOUNT
                 PLANS.—Subparagraph (C) of section 203(bX3) (29 U.S.C.
                 1053(bX3XC)) is amended—
                        (1) by striking out "any 1-year break in service" and inserting
                     in lieu thereof "5 consecutive 1-year breaks in service", and
                        (2) by striking out "such break" each place it appears and
                     inserting in lieu thereof "such 5-year period".
                   (d) RULE OF PARITY FOR NONVESTED PARTICIPANTS TO B E APPUED
                 ONLY IF BREAK IN SERVICE EXCEEDS 5 YEARS.—

PUBLIC LAW 98-397—AUG. 23, 1984 98 STAT. 1427 (1) MINIMUM PARTICIPATION STANDARDS.—Paragraph (4) of sec- tion 202(b) (29 U.S.C. 1052(b)(4)) is amended to read as follows: "(4XA) For purposes of paragraph (1), in the case of a nonvested participant, years of service with the employer or employers main- taining the plan before any period of consecutive 1-year breaks in service shall not be required to be taken into account in computing the period of service if the number of consecutive 1-year breaks in service within such period equals or exceeds the greater of— "(i)5,or "(ii) the aggregate number of years of service before such period. "(B) If any years of service are not required to be taken into account by reason of a period of breaks in service to which subpara- graph (A) applies, such years of service shall not be taken into account in appl3dng subparagraph (A) to a subsequent period of breaks in service. "(C) For purposes of subparagraph (A), the term 'nonvested partic- ipant' means a participant who does not have any nonforfeitable right under the plan to an accrued benefit derived from employer contributions.". (2) MINIMUM VESTING STANDARDS.—Subparagraph (D) of sec- tion 203(b)(3) (29 U.S.C. 1053(b)(3)(D)) is amended to read as follows: "(DXi) For purposes of paragraph (1), in the case of a nonvested participant, years of service with the employer or employers main- taining the plan before any period of consecutive 1-year breaks in service shall not be required to be taken into account if the number of consecutive 1-year breaks in service within such period equals or exceeds the greater of— "(I) 5, or "(II) the aggregate number of years of service before such period. "(ii) If any years of service are not required to be taken into account by reason of a period of breaks in service to which clause (i) applies, such years of service shall not be taken into account in applying clause (i) to a subsequent period of breaks in service. "(iii) For purposes of clause (i), the term 'nonvested participant' means a participant who does not have any nonforfeitable right under the plan to an accrued benefit derived from employer contributions.". (e) CERTAIN MATERNITY OR PATERNITY ABSENCES NOT TREATED AS BREAKS IN SERVICE.— (1) MINIMUM PARTICIPATION STANDARDS.—Subsection (b) of sec- tion 202 (29 U.S.C. 1052(b)) is amended by adding at the end thereof the following new paragraph: "(5)(A) In the case of each individual who is absent from work for any period— "(i) by reason of the pregnancy of the individual, "(ii) by reason of the birth of a child of the individual, "(iii) by reason of the placement of a child with the individual in connection with the adoption of such child by such individ- ual, or "(iv) for purposes of caring for such child for a period begin- ning immediately following such birth or placement, the plan shall treat as hours of service, solely for purposes of determining under this subsection whether a 1-year break in service
98 STAT. 1428 PUBLIC LAW 98-397—AUG. 23, 1984 29 use 1053. (as defined in section 203(b)(3XA)) has occurred, the hours described in subparagraph (B). "(B) The hours described in this subparagraph are— "(i) the hours of service which otherwise would normally have been credited to such individual but for such absence, or "(ii) in any case in which the plan is unable to determine the hours described in clause (i), 8 hours of service per day of such absence, except that the total number of hours treated as hours of service under this subparagraph by reason of any such pregnancy or place- ment shall not exceod 501 hours. "(C) The hours described in subparagraph (B) shall be treated as hours of service as provided in this par£^aph— "(i) only in the year in which the absence from work begins, if a participant would be prevented from incurring a 1-year break in service in such year solely because the period of absence is treated as hours of service as provided in subparagraph (A); or "(ii) in any other case, in the immediately following year. "(D) For purposes of this paragraph, the term 'year' means the 29 use 1052. period used in computations pursuant to section 202(a)(3)(A). "(E) A plan may provide that no credit will be given pursuant to this paragraph unless the individual furnishes to the plan adminis- trator such timely information as the plan may reasonably require to establish— "(i) that the absence from work is for reasons referred to in subparagraph (A), and "(ii) the number of days for which there was such an absence (2) MINIMUM VESTING STANDARDS.—Section 203(bX3) (29 U.S.C. 1053(b)(3)) is amended by adding at the end thereof the following new subparagraph: "(EXi) In the case of each individual who is absent from work for any period— "(I) by reason of the pregnancy of the individual, "(II) by reason of the birth of a child of the individual, "(III) by reason of the placement of a child with the individual in connection with the adoption of such child by such individ- ual, or "(IV) for purposes of caring for such child for a period begin- ning immediately following such birth or placement, the plan shall treat as hours of service, solely for purposes of determining under this paragraph whether a 1-year break in service has occurred, the hours described in clause (ii). "(ii) The hours described in this clause are— "(I) the hours of service which otherwise would normally have been credited to such individual but for such absence, or "(II) in any case in which the plan is unable to determine the hours described in subclause (I), 8 hours of service per day of absence, except that the total number of hours treated as hours of service under this clause by reason of such pregnancy or placement shall not exceed 501 hours. "(iii) The hours described in clause (ii) shall be treated as hours of service as provided in this subparagraph— "(I) only in the year in which the absence from work begins, if a participant would be prevented from incurring a 1-year break
PUBLIC LAW 98-397—AUG. 23, 1984 98 STAT. 1429 in service in such year solely because the period of absence is treated as hours of service as provided in clause (i); or "(ID in any other case, in the immediately following year, "(iv) For purposes of this subparagraph, the term 'year' means the period used in computations pursuant to paragraph (2). "(v) A plan may provide that no credit will be given pursuant to this subparagraph unless the individual furnishes to the plan ad- ministrator such timely information as the plan may reasonably require to establish— "(I) that the absence from work is for reasons referred to in clause (i), and "(11) the number of days for which there was such an absence.". (3) ABSENCES DISREGARDED FOR PURPOSES OF ACCRUED BENEFIT REQUIREMENTS.—Subparagraph (A) of section 204(bX3) (29 U.S.C. 1054(bX3XA)) is amended by inserting ", determined without regard to section 202(bX5)" after "section 202(b)". (f) APPUCATION OF BREAK IN SERVICE RULES TO ACCRUED BENE- FITS.—Subsection (e) of section 204 (29 U.S.C. 1054(e)) is amended by striking out "any 1-year break in service" and inserting in lieu thereof "5 consecutive 1-year breaks in service". SEC. 103. REQUIREMENT OF JOINT AND SURVIVOR ANNUITIES AND PRE- RETIREMENT SURVIVOR ANNUITIES. (a) GENERAL RULE.—Section 205 (29 U.S.C. 1055) is amended to read as follows: "REQUIREMENT OF JOINT A N D SURVIVOR ANNUITY AND PRERETIREMENT SURVIVOR ANNUITY "SEC. 205. (a) Each pension plan to which this section applies shall provide that— "(1) in the case of a vested participant who retires under the plan, the accrued benefit payable to such participant shall be provided in the form of a qualified joint and survivor annuity, and "(2) in the case of a vested participant who dies before the annuity starting date and who has a surviving spouse, a quali- fied preretirement survivor annuity shall be provided to the surviving spouse of such participant. "(bXD This section shall apply to— "(A) any defined benefit plan, "(B) any individual account plan which is subject to the funding standards of section 302, and 29 use 1082. "(C) any participant under any other individual account plan unless— "(i) such plan provides that the participant's nonforfeit- able accrued benefit is payable in full, on the death of the participant, to the participant's surviving spouse (or, if there is no surviving spouse or the surviving spouse con- sents in the manner required under subsection (cX2XA), to a designated beneficiary), "(ii) such participant does not elect the payment of bene- fits in the form of a life annuity, and "(iii) with respect to such participant, such plan is not a transferee of a plan which is described in subparagraph (A)
98 STAT. 1430 PUBLIC LAW 98-397—AUG. 23, 1984 or (B) or to which this clause applied with respect to the participant. "(2XA) In the case of— "(i) a tax credit employee stock ownership plan (as defined in Ante, p. 852. section 409(a) of the Internal Revenue CJode of 1954), or "(ii) an employee stock ownership plan (as defined in section 26 use 4975. 4975(eX7) of such Ck)de), subsection (a) shall not apply to that portion of the employee's Ante, p. 852. accrued benefit to which the requirements of section 409(h) of such Code apply. "(B) Subparagraph (A) shall not apply with respect to any partici- pant unless the requirements of clause (i), (ii), and (iii) of paragraph (IXC) are met with respect to such participant. "(cXD A plan meete the requirements of this section only if— "(A) under the plan, each participant— "(i) may elect at any time during the applicable election period to waive the qualified joint and survivor annuity form of benefit or the qualified preretirement survivor annuity form of benefit (or both), and "(ii) may revoke any such election at any time during the applicable election period, £uid "(B) the plan meets the requirements of paragraphs (2) and (3). "(2) Each plan shall provide that an election under paragraph (IXAXi) shall not take effect unless— "(A) the spouse of the participant consents in writing to such election, and the spouse's consent acknowledges the effect of such election and is witnessed by a plan representative or a notary public, or "(B) it is established to the satisfaction of a plan representa- tive that the consent required under subparagraph (A) may not be obtained because there is no spouse, because the spouse cannot be located, or because of such other circumstances as the Secretary of the Treasury may by regulations prescribe. Any consent by a spouse (or estoblishment that the consent of a spouse may not be obtained) under the preceding sentence shall be effective only with respect to such spouse. "(3XA) Each plan shall provide to each participant, within a reasonable period of time before the annuity starting date (and consistent with such regulations as the Secretary of the Treasury may prescribe) a written explemation of— "(i) the terms and conditions of the qualified joint and survi- vor annuity, "(ii) the participant's right to make, and the effect of, an election under paragraph (1) to waive the joint and survivor annuity form of benefit, "(iii) the rights of the participant's spouse under paragraph (2), and "(iv) the right to make, and the effect of, a revocation of an election under paragraph (1). Age limitation. "(B) Each plan shall provide to each participant, within the period beginning with the first day of the plan year in which the partici- p£int attains age 32 and ending with the close of the plan year preceding the plan year in which the participant attains age 35 (and consistent with such regulations as the Secretary of the Treasury may prescribe), a written explanation with respect to the qualified
PUBLIC LAW 98-397—AUG. 23, 1984 98 STAT. 1431 preretirement survivor annuity comparable to that required under subparagraph (A). "(4XA) The requirements of this subsection shall not apply with respect to the qualified joint and survivor annuity form of benefit or the qualified preretirement survivor annuity form of benefit, as the case may be, if the plan fully subsidizes the costs of such benefit. "(B) For purposes of subparagraph (A), a plan fully subsidizes the costs of a benefit if under the plan the failure to waive such benefit by a participant would not result in a decrease in any plan benefits with respect to such participant and would not result in increased contributions from such participant. "(5) If a plan fiduciary acts in accordance with part 4 of this subtitle in— 29 use iioi. "(A) relying on a consent or revocation referred to in para- graph dXA), or "(B) making a determination under paragraph (2), then such consent, revocation, or determination shall be treated as valid for purposes of discharging the plan from liability to the extent of payments made pursuant to such act. "(6) For purposes of this subsection, the term 'applicable election period' means— "(A) in the case of an election to waive the qualified joint and survivor annuity form of benefit, the 90-day period ending on the annuity starting date, or "(B) in the case of an election to waive the qualified preretire- ment survivor annuity, the period which begins on the first day of the plan year in which the participant attains age 35 and ends on the date of the participant's death. In the case of a participant who is separated from service, the applicable election period under subparagraph (B) with respect to benefits accrued before the date of such separation from service shall not begin later than such date. "(d) For purposes of this section, the term 'qualified joint and survivor annuity' means an annuity— "(1) for the life of the participant with a survivor annuity for the life of the spouse which is not less than 50 percent of (and is not greater than 100 percent of) the amount of the annuity which is payable during the joint lives of the participant and the spouse, and "(2) which is the actuarial equivalent of a single annuity for the life of the participant. Such term also includes any annuity in a form having the effect of an annuity described in the preceding sentence. "(e) For purposes of this section— "(1) Except as provided in paragraph (2), the term 'qualified preretirement survivor annuity' means a survivor annuity for the life of the surviving spouse of the participant if— "(A) the payments to the surviving spouse under such annuity are not less than the amounts which would be payable as a survivor annuity under the qualified joint and survivor annuity under the plan (or the actuarial equiva- lent thereof) if— "(i) in the case of a participant who dies after the date on which the participant attained the earliest retirement age, such participant had retired with an immediate qualified joint and survivor annuity on the day before the participant's date of death, or
98 STAT. 1432 PUBLIC LAW 98-397—AUG. 23, 1984 "(ii) in the case of a participant who dies on or before the date on which the participant would have attained the eariiest retirement age, such participant had— "(I) separated from service on the date of death, "(II) survived to the earUest retirement age, "(III) retired with an immediate qualified joint and survivor annuity at the earliest retirement age, and "(IV) died on the day after the day on which such participant would have attained the earliest retire- ment age, and "(B) under the plan, the earliest period for which the surviving spouse may receive a payment under such annu- ity is not later than the month in which the participant would have attained the earliest retirement age under the plan. "(2) In the case of any individual account plan or participant described in subparagraph (B) or (C) of subsection (bXD, the term 'qualified preretirement survivor annuity' means an annu- ity for the life of the surviving spouse the actuarial equivalent of which is not less than 50 percent of the account balance of the participant as of the date of death. "(f)(1) Except as provided in paragraph (2), a plan may provide that a qualified joint and survivor annuity (or a qualified preretire- ment survivor annuity) will not be provided unless the participant and spouse had been married throughout the 1-year period ending on the earlier of^ "(A) the participant's annuity starting date, or "(B) the date of the participant's death. "(2) For purposes of paragraph (1), if— "(A) a participant marries within 1 year before the annuity starting date, and "(B) the participant and the participant's spouse in such marriage have been married for at least a 1-year period ending on or before the date of the participant's death, such participant and such spouse shall be treated as having been married throughout the 1-year period ending on the participant's annuity starting date. "(g)(1) A plan may provide that the present value of a qualified joint and survivor annuity or a qualified preretirement survivor annuity will be immediately distributed if such value does not exceed $3,500. No distribution may be made under the preceding sentence after the annuity starting date unless the participant and the spouse of the participant (or where the participant has died, the surviving spouse) consent in writing to such distribution. "(2) If— "(A) the present value of the qualified joint and survivor annuity or the qualified preretirement survivor annuity exceeds $3,500, and "(B) the participant and the spouse of the participant (or where the participant has died, the surviving spouse) consent in writing to the distribution, the plan may immediately distribute the present value of such annuity. "(3) For purposes of paragraphs (1) and (2), the present value of a qualified joint and survivor annuity or a qualified preretirement survivor annuity shall be determined as of the date of the distribu-
PUBLIC LAW 98-397—AUG. 23, 1984 98 STAT. 1433 tion and by using an interest rate not greater than the interest rate which would be used (as of the date of the distribution) by the Pension Benefit Guaranty Corporation for purposes of determining the present value of a lump sum distribution on plan termination. "(h) For purposes of this section— "(1) the term 'vested participant' means any participant who has a nonforfeitable right (within the meaning of section 3(19)) 29 USC 1002. to any portion of the accrued benefit derived from employer contributions, "(2) the term 'annuity starting date' means the first day of the first period for which an amount is received as an annuity (whether by reason of retirement or disability), and "(3) the term 'earliest retirement age' means the earliest date on which, under the plan, the participant could elect to receive retirement benefits. "(i) A plan may take into account in any equitable manner (as determined by the Secretary of the Treasury) any increased costs resulting from providing a qualified joint or survivor annuity or a qualified preretirement survivor annuity. "(j) In prescribing regulations under this section, the Secretary of the Treasury shall consult with the Secretary of Labor.". (b) CLERICAL AMENDMENT.—The table of contents in section 1 is amended by striking out the item relating to section 205 and inserting in lieu thereof the following new item: "Sec. 205. Requirement of joint and survivor annuity and preretirement survivor annuity.", SEC. 104. SPECIAL RULES FOR ASSIGNMENTS IN DIVORCE. ETC., PROCEEDINGS. (a) IN GENERAL.—Section 206(d) (29 U.S.C. 1056(d)) is amended by adding at the end thereof the following new paragraph: "(3)(A) Paragraph (1) shall apply to the creation, assignment, or recognition of a right to any benefit payable with respect to a participant pursuant to a domestic relations order, except that paragraph (1) shall not apply if the order is determined to be a qualified domestic relations order. Each pension plan shall provide for the payment of benefits in accordance with the applicable requirements of any qualified domestic relations order. "(B) For purposes of this paragraph— "(i) the term 'qualified domestic relations order' means a domestic relations order— "(I) which creates or recognizes the existence of an alter- nate payee's right to, or assigns to an alternate payee the right to, receive all or a portion of the benefits payable with respect to a participant under a plan, and "(II) with respect to which the requirements of subpara- graphs (C) and (D) are met, and "(ii) the term 'domestic relations order' means any judgment, decree, or order (including approval of a property settlement agreement) which— "(I) relates to the provision of child support, alimony payments, or marital property rights to a spouse, former spouse, child, or other dependent of a participant, and "(II) is made pursuant to a State domestic relations law (including a community property law).
98 STAT. 1434 PUBLIC LAW 98-397—AUG. 23, 1984 "(C) A domestic relations order meets the requirements of this subparagraph only if such order clearly specifies— "(i) the name and the last known mailing address (if any) of the participant and the name and mailing address of each alternate payee covered by the order, "(ii) the amount or percentage of the participant's benefits to be paid by the plan to each such alternate payee, or the manner in which such amount or percentage is to be determined, "(iii) the number of payments or period to which such order applies, and "(iv) each plan to which such order applies. "(D) A domestic relations order meets the requirements of this subparagraph only if such order— "(i) does not require a plan to provide any type or form of benefit, or any option, not otherwise provided under the plan, "(ii) does not require the plan to provide increased benefits (determined on the basis of actuarial value), and "(iii) does not require the pajmaent of benefits to an alternate payee which are required to be paid to another alternate payee under another order previously determined to be a qualified domestic relations order. "(EXi) In the case of any pajmient before a participant has sepa- rated from service, a domestic relations order shall not be treated as failing to meet the requirements of clause (i) of subparagraph (D) solely because such order requires that payment of benefits be made to an alternate payee— "(I) on or after the date on which the participant attains (or would have attained) the eeirliest retirement age, "(II) as if the participant had retired on the date on which such payment is to begin under such order (but taking into account only the present value of benefits actually accrued and not taking into account the present value of any employer subsidy for early retirement), and "(III) in any form in which such benefits may be paid under the plan to the participant (other than in the form of a joint and survivor annuity with respect to the alternate payee and his or her subsequent spouse). For purposes of subclause (II), the interest rate assumption used in determining the present value shall be the interest rate specified in the plan or, if no rate is specified, 5 percent, "(ii) For purposes of this subparagraph, the term 'earliest retire- Ante, p. 1429. ment age' has the meaning given such term by section 205(hX3), except that in the case of any individual account plan, the earliest retirement age shall be the date which is 10 years before the normal retirement age. "(F) To the extent provided in any qualified domestic relations order— "(i) the former spouse of a participant shall be treated as a surviving spouse of such participant for purposes of section 205, and "(ii) if married for at least 1 year, the former spouse shall be treated £is meeting the requirements of section 205(f). "(G)(i) In the case of any domestic relations order received by a plan— "(I) the plan administrator shall promptly notify the partici- pant and any other alternate payee of the receipt of such order
PUBLIC LAW 98-397—AUG. 23, 1984 98 STAT. 1435 and the plan's procedures for determining the qualified status of domestic relations orders, and "(II) within a reasonable period after receipt of such order, the plan administrator shall determine whether such order is a qualified domestic relations order and notify the participant and each alternate payee of such determination. "(ii) Each plan shall establish reasonable procedures to determine the qualified status of domestic relations orders and to administer distributions under such qualified orders. Such procedures— "(I) shall be in writing, "(II) shall provide for the notification of each person specified '- ^ in a domestic relations order as entitled to payment of benefits under the plan (at the address included in the domestic rela- tions order) of such procedures promptly upon receipt by the plan of the domestic relations order, and "(III) shall permit an alternate payee to designate a repre- sentative for receipt of copies of notices that are sent to the alternate payee with respect to a domestic relations order. "(H)(i) During any period in which the issue of whether a domestic relations order is a qualified domestic relations order is being determined (by the plan administrator, by a court of competent jurisdiction, or otherwise), the plan administrator shall segregate in a separate account in the plan or in an escrow account the amounts which would have been payable to the alternate payee during such period if the order had been determined to be a qualified domestic relations order. "(ii) If within 18 months the order (or modification thereof) is determined to be a qualified domestic relations order, the plan administrator shall pay the segregated amounts (plus any interest thereon) to the person or persons entitled thereto, "(iii) If within 18 months— "(I) it is determined that the order is not a qualified domestic relations order, or "(II) the issue as to whether such order is a qualified domestic relations order is not resolved, then the plan administrator shall pay the segregated amounts (plus any interest thereon) to the person or persons who would have been entitled to such amounts if there had been no order. "(iv) Any determination that an order is a qualified domestic relations order which is made after the close of the 18-month period shall be applied prospectively only. "(I) If a plan fiduciary acts in accordance with part 4 of this 29 use iioi. subtitle in— "(i) treating a domestic relations order as being (or not being) a qualified domestic relations order, or (ii) taking action under subparagraph (H), then the plan's obligation to the participant and each alternate payee shall be discharged to the extent of any payment made e pursuant to such act. "(J) A person who is an alternate payee under a qualified domestic relations order shall be considered for purposes of any provision of this Act a beneficiary under the plan. Nothing in the preceding sentence shall permit a requirement under section 4001 of the 29 USC 1301. payment of more than 1 premium with respect to a participant for any period. '(K) The term 'alternate payee' means any spouse, former spouse, child, or other dependent of a participant who is recognized by a
98 STAT. 1436 PUBLIC LAW 98-397—AUG. 23, 1984 domestic relations order as having a right to receive all, or a por- tion of, the benefits payable under a plan with respect to such participant. "(L) In prescribing regulations under this paragraph, the Secre- tary shall consult with the Secretary of the Treasury.". (b) CLARIFICATION OF PREEMPTION PROVISION.—Subsection (b) of section 514 (29 U.S.C. 1144(b)) is amended by adding at the end thereof the following new paragraph: "(7) Subsection (a) shall not apply to qualified domestic relations Ante, p. 1433. Orders (within the meaning of section 206(d)(3)(BXi)).". SEC. 105. RESTRICTIONS ON MANDATORY DISTRIBUTIONS. (a) GENERAL RULE.—Section 203 (29 U.S.C. 1053) is amended by adding at the end thereof the following new subsection: "(eXD If the present value of any accrued benefit exceeds $3,500, such benefit shall not be treated as nonforfeitable if the plan provides that the present value of such benefit could be immediately distributed without the consent of the participant. "(2) For purposes of paragraph (1), the present value shall be calculated by using an interest rate not greater than the interest rate which would be used (as of the date of the distribution) by the Pension Benefit Guaranty Corporation for purposes of determining the present value of a lump sum distribution on plan termination.'. (b) CONFORMING AMENDMENT.—Paragraph (1) of section 204(d) (29 U.S.C. 1054(dXl)) is amended by striking out "$1,750" and inserting in lieu thereof "$3,500". SEC. 106. PARTICIPANT TO BE NOTIFIED THAT BENEFITS MAY BE FOR- FEITABLE. Subsection (c) of section 105 (29 U.S.C. 1025(c)) is amended by inserting at the end thereof the following new sentence: "Such statement shall also include a notice to the participant of any benefits which are forfeitable if the participant dies before a certain date.". TITLE II—AMENDMENTS TO THE INTERNAL REVENUE CODE OF 1954 SEC. 201. AMENDMENT OF 1954 CODE. Except as otherwise expressly provided, whenever in this title an amendment or repeal is expressed in terms of an amendment to, or repeal of, a section or other provision, the reference shall be consid- ered to be made to a section or other provision of the Internal 26 use 1 et seg. Revenue Code of 1954. SEC. 202. MODIFICATIONS OF MINIMUM PARTICIPATION AND VESTING STANDARDS. (a) AGE LIMITATION FOR MINIMUM PARTICIPATION STANDARDS LOW- ERED FROM AGE 25 TO AGE 21.— 26 use 410. (1) IN GENERAL.—Subparagraph (AXi) of section 410(aXl) relating to minimum a^e requirement for participation is amended by striking out "25" and inserting in lieu thereof "21". (2) SPECIAL RULE FOR CERTAIN PLANS.—Subparagraph (BXii) of section 410(aXl) (relating to special rules for certain plans) is amended by striking out " '30' for ' 2 5 ' " and inserting in lieu thereof " ' 2 6 ' f o r ' 2 1 ' " .
PUBLIC LAW 98-397—AUG. 23, 1984 98 STAT. 1437 (b) YEARS OF SERVICE AFTER AGE 18 (INSTEAD OF AGE 22.) TAKEN INTO ACCOUNT FOR DETERMINING NONFORFEITABLE PERCENTAGE.— Subparagraph (A) of section 411(a)(4) (relating to service included in 26 use 4ii. determination of nonforfeitable percentage) is amended by striking out "22" and inserting in lieu thereof "18 . (c) BREAK IN SERVICE FOR VESTING UNDER DEFINED CONTRIBUTION PLANS, ETC.—Subparagraph (C) of section 411(a)(6) (relating to 1- year break in service under defined contribution plan) is amended— (1) by striking out "I-YEAR BREAK IN SERVICE" in the subpara- graph heading and inserting in lieu thereof "5 CONSECUTIVE i- YEAR BREAKS I N SERVICE", (2) by striking out "any 1-year break in service" and inserting in lieu thereof "5 consecutive 1-year breaks in service", and (3) by striking out "such break" each place it appears and inserting in lieu thereof "such 5-year period". (d) RULE OF PARITY FOR NONVESTED PARTICIPANTS TO B E APPUED ONLY IF BREAK IN SERVICE EXCEEDS 5 YEARS.— (1) MINIMUM PARTICIPATION STANDARDS.—Subparagraph (D) of section 410(a)(5) (relating to breaks in service) is amended to 26 use 410. read as follows: "(D) NONVESTED PARTICIPANTS.— "(i) I N GENERAL.—For purposes of paragraph (1), in the case of a nonvested participant, years of service with the employer or employers maintaining the plan before any period of consecutive 1-year breaks in serv- ice shall not be required to be taken into account in computing the period of service if the number of con- secutive 1-year breaks in service within such period equals or exceeds the greater of— "(I) 5, or "(II) the aggregate number of years of service before such period, "(ii) YEARS OF SERVICE NOT TAKEN INTO ACCOUNT.—If any years of service are not required to be taken into account by reason of a period of breaks in service to which clause (i) applies, such years of service shall not be taken into account in applying clause (i) to a subse- quent period of breaks in service. "(iii) NONVESTED PARTICIPANT DEFINED.—For pur- poses of clause (i), the term 'nonvested participant' means a participant who does not have any nonforfeit- able right under the plan to an accrued benefit derived from employer contributions.". (2) MINIMUM VESTING STANDARDS.—Subparagraph (D) of sec- 26 u s e 4ii. tion 411(a)(6) (relating to breaks in service) is amended to read as follows: "(D) NONVESTED PARTICIPANTS.— "(i) I N GENERAL.—For purposes of paragraph (4), in the case of a nonvested participant, years of service with the employer or employers maintaining the plan before any period of consecutive 1-year breaks in serv- ice shall not be required to be taken into account if the number of consecutive 1-year breaks in service within such period equals or exceeds the greater of— "(I) 5, or "(II) the aggregate number of years of service before such period.
98 STAT. 1438 PUBLIC LAW 98-397—AUG. 23, 1984 "(ii) YEARS OF SERVICE NOT TAKEN INTO ACCOUNT.—If any years of service are not required to be taken into ,,f i:; , . account by reason of a period of breaks in service to which clause (i) applies, such years of service shall not be taken into account in applying clause (i) to a subse- quent period of breaks in service. "(iii) NONVESTED PARTICIPANT DEFINED.—For pur- poses of clause (i), the term 'nonvested participant' means a participant who does not have any nonforfeit- able right under the plan to an accrued benefit derived from employer contributions.", (e) CERTAIN MATERNITY OR PATERNITY ABSENCES NOT TREATED AS BREAKS IN SERVICE.— (1) MINIMUM PARTICIPATION STANDARDS.—Paragraph (5) of sec- 26 use 410. tion 410(a) (relating to breaks in service) is amended by adding at the end thereof the following new subparagraph: "(E) SPECIAL RULE FOR MATERNITY OR PATERNITY ABSENCES.— "(i) GENERAL RULE.—In the case of each individual who is absent from work for any period— "(I) by reason of the pregnancy of the individual, "(II) by reason of the birth of a child of the individual, "(HI) by reason of the placement of a child with the individual in connection with the adoption of such child by such individual, or "(IV) for purposes of caring for such child for a period beginning immediately following such birth or placement, the plan shall treat as hours of service, solely for purposes of determining under this paragraph whether a 1-year break in service (as defined in section 26 use 411. 411(aX6XA)) has occurred, the hours described in clause (ii). "(ii) HOURS TREATED AS HOURS OF SERVICE.—The hours described in this clause are— "(I) the hours of service which otherwise would normally have been credited to such individual but for such absence, or "(II) in any case in which the plan is unable to determine the hours described in subclause (I), 8 hours of service per day of such absence, lii .)c J o except that the total number of hours treated as hours of service under this clause by reason of any such pregnancy or placement shall not exceed 501 hours. "(iii) YEAR TO WHICH HOURS ARE CREDITED.—The hours described in clause (ii) shall be treated as hours of service as provided in this subparagraph— "(I) only in the year in which the absence from work begins, if a participant would be prevented from incurring a 1-year break in service in such year solely because the period of absence is treated as hours of service as provided in clause (i); or • -i, "(II) in any other case, in the immediately follow- •• ' ingyear.
PUBLIC LAW 98-397—AUG. 23, 1984 98 STAT. 1439 "(iv) YEAR DEFINED.—For purposes of this subpara- graph, the term 'year' means the period used in compu- tations pursuant to paragraph (3). "(v) INFORMATION REQUIRED TO BE FILED.—A plan shall not fail to satisfy the requirements of this sub- paragraph solely because it provides that no credit will be given pursuant to this subparagraph unless the individual furnishes to the plan administrator such timely information as the plan may reasonably require to establish— "(I) that the absence from work is for reasons referred to in clause (i), and "(II) the number of days for which there was such an absence.". (2) MINIMUM VESTING STANDARDS.—Paragraph (6) of section 26 use 4ii. 411(a) (relating to breaks in service) is amended by adding at the end thereof the following new subparagraph: "(E) SPECIAL RULE FOR MATERNITY OR PATERNITY ABSENCES.— "(i) GENERAL RULE.—In the case of each individual who is absent from work for any period— "(I) by reason of the pregnancy of the individual, "(II) by reason of the birth of a child of the individual, "(III) by reason of the placement of a child with the individual in connection with the adoption of such child by such individual, or "(IV) for purposes of caring for such child for a period beginning immediately following such birth ^ .,, or placement, "" ' the plan shall treat as hours of service, solely for purposes of determining under this paragraph whether ' a 1-year break in service has occurred, the hours de- scribed in clause (ii). "(ii) HOURS TREATED AS HOURS OF SERVICE.—The hours described in this clause are— \ "(I) the hours of service which otherwise would normally have been credited to such individual but for such absence, or "(II) in any case in which the plan is unable to determine the hours described in subclause (I), 8 hours of service per day of absence, except that the total number of hours treated as hours of service under this clause by reason of any such pregnancy or placement shall not exceed 501 hours. "(iii) YEAR TO WHICH HOURS ARE CREDITED.—The hours described in clause (ii) shall be treated as hours of service as provided in this subparagraph— "(I) only in the year in which the absence from work begins, if a participant would be prevented from incurring a 1-year break in service in such year solely because the period of absence is treated as hours of service as provided in clause (i); or "(II) in any other case, in the immediately follow- ing year.
98 STAT. 1440 PUBLIC LAW 98-397—AUG. 23, 1984 "(iv) YEAR DEFINED.—For purposes of this subpara- graph, the term 'year' means the period used in compu- tations pursuant to paragraph (5). "(v) INFORMATION REQUIRED TO BE FILED.—A plan shall not fail to satisfy the requirements of this sub- paragraph solely because it provides that no credit will be given pursuant to this subparagraph unless the individual furnishes to the plan administrator such timely information as the plan may reasonably require to establish— "(I) that the absence from work is for reasons referred to in clause (i), and "(II) the number of days for which there was such an absence.". (3) ABSENCES DISREGARDED FOR PURPOSES OF ACCRUED BENEFIT 26 use 411. REQUIREMENTS.—Subparagraph (A) of section 411(b)(3) (relating to year of participation) is amended by inserting ", determined without regard to section 410(a)(5)(E)" after "section 410(a)(5)". (f) APPLICATION OF BREAK IN SERVICE RULES TO ACCRUED BENE- FITS.—Subparagraph (C) of section 411(aX7) (defining accrued bene- fit) is amended by striking out "any one-year break in service" and inserting in lieu thereof "5 consecutive 1-year breaks in service". SEC. 203. REQUIREMENT OF JOINT AND SURVIVOR ANNUITIES AND PRE- RETIREMENT SURVIVOR ANNUITIES. 26 use 401. (a) GENERAL RULE.—Paragraph (11) of section 401(a) (relating to requirement of joint and survivor annuities) is amended to read as follows: "(11) REQUIREMENT OF JOINT AND SURVIVOR ANNUITY AND Trust. PRERETIREMENT SURVIVOR ANNUITY.— "(A) I N GENERAL.—In the case of any plan to which this Post, p. 1441. paragraph applies, except as provided in section 417, a trust forming part of such plan shall not constitute a qualified trust under this section unless— "(i) in the case of a vested participant who retires under the plan, the accrued benefit payable to such participant is provided in the form of a qualified joint and survivor annuity, and "(ii) in the case of a vested participant who dies before the annuity starting date and who has a surviv- ing spouse, a qualified preretirement survivor annuity is provided to the surviving spouse of such participant. "(B) PLANS TO WHICH PARAGRAPH APPUES.—This para- graph shall apply to— "(i) any defined benefit plan, "(ii) any defined contribution plan which is subject to 26 use 412. the funding standards of section 412, and "(iii) any participant under any other defined contri- bution plan unless— "(I) such plan provides that the participant's nonforfeitable accrued benefit is payable in full, on the death of the participant, to the participant's surviving spouse (or, if there is no surviving spouse or the surviving spouse consents in the manner Post, p. 1441. required under section 417(a)(2)(A), to a designated beneficiary).
PUBLIC LAW 98-397—AUG. 23, 1984 98 STAT. 1441 "(11) such participant does not elect a payment of benefits in the form of a life annuity, and "(III) with respect to such participant, such plan is not a direct or indirect transferee of a plan which is described in clause (i) or (ii) or to which this clause applied with respect to the participant. J "(C) EXCEPTION FOR CERTAIN ESOP BENEFITS.— "(i) IN GENERAL.—In the case of— "(I) a tax credit employee stock ownership plan (as defined in section 409(a)), or Ante, p. 852. "(II) an employee stock ownership plan (as de- fined in section 4975(eX7)), 26 use 4975. subparagraph (A) shall not apply to that portion of the employee's accrued benefit to which the requirements of section 409(h) apply. Ante, p. 852. "(ii) NONFORFEITABLE BENEFIT MUST BE PAID IN FULL, ETC.—In the case of any participant, clause (i) shall apply only if the requirements of subclauses (I), (II), and (III) of subparagraph (B)(iii) are met with respect to such participant. ' ' ' "(D) CROSS REFERENCE.—For— "(i) provisions under which participants may elect to waive the requirements of this paragraph, and "(ii) other definitions and special rules for purposes of this paragraph, see section 417. . (b) DEFINITIONS AND SPECIAL RULES.—Subpart B of part I of subchapter D of chapter 1 is amended by adding at the end thereof the following new section: "SEC. 417. DEFINITIONS AND SPECIAL RULES FOR PURPOSES OF MINIMUM 26 USC 417. SURVIVOR ANNUITY REQUIREMENTS. "(a) ELECTION TO WAIVE QUAUFIED JOINT AND SURVIVOR ANNUITY OR QUAUFIED PRERETIREMENT SURVIVOR ANNUITY.— "(1) IN GENERAL.—A plan meets the requirements of section 401(aXii) only if— "(A) under the plan, each participant— "(i) may elect at any time during the applicable election period to waive the qualified joint and survivor annuity form of benefit or the qualified preretirement survivor annuity form of benefit (or both), and "(ii) may revoke any such election at any time during the applicable election period, and "(B) the plan meets the requirements of paragraphs (2) and (3) of this subsection. "(2) SPOUSE MUST CONSENT TO ELECTION.—Each plan shall provide that an election under paragraph (IXAXi) shall not take effect unless— "(A) the spouse of the participant consents in writing to such election, and the spouse's consent acknowledges the effect of such election and is witnessed by a plan represent- ative or a notary public, or "(B) it is established to the satisfaction of a plan repre- sentative that the consent required under subparagraph (A) may not be obtained because there is no spouse, because the spouse cannot be located, or because of such other circum- stances £is the Secretary may by regulations prescribe.
98 STAT. 1442 PUBLIC LAW 98-397—AUG. 23, 1984 Any consent by a spouse (or establishment that the consent of a spouse may not be obtained) under the preceding sentence shall De effective only with respect to such spouse. "(3) PLAN TO PROVIDE WRITTEN EXPLANATIONS.— "(A) EXPLANATION OP JOINT AND SURVIVOR ANNUITY.— Each plan shall provide to each participant, within a rea- sonable period of time before the annuity starting date (and consistent with such regulations as the Secretary may pre- scribe), a written explanation of— "(i) the terms and conditions of the qualified joint and survivor annuity, "(ii) the participant's right to make, and the effect of, an election under paragraph (1) to waive the joint and survivor annuity form of benefit, "(iii) the rights of the participant's spouse under paragraph (2), and "(iv) the right to make, and the effect of, a revocation of an election under para^aph (1). Age limitation. "(B) EXPLANATION OF QUALIFIED PRERETIREMENT SURVIVOR ANNUITY.—Each plan shall provide to each participant, within the period beginning with the first day of the plan year in which the participant attains age 32 and ending with the close of the plan year preceding the plan year in which the participant attains age 35 (and consistent with such regulations as the Secretary may prescribe), a written explanation with respect to the qualified preretirement survivor annuity comparable to that required under sub- paragraph (A). "(4) SPECIAL RULES WHERE PLAN FULLY SUBSIDIZES COSTS.— "(A) IN GENERAL.—The requirements of this subsection shall not apply with respect to the qualified joint and survivor annuity form of benefit or the qualified preretire- ment survivor annuity form of benefit, as the case may be, if the plan fully subsidizes the costs of such benefit. "(B) DEFINITION.—For purposes of subparagraph (A), a plan fully subsidizes the costs of a benefit if under the plan the failure to waive such benefit by a participant would not result in a decrease in any plan benefits with respect to such participant and would not result in increased contri- butions from such participant. "(5) APPLICABLE ELECTION PERIOD DEFINED.—For purposes of this subsection, the term 'applicable election period' means— "(A) in the case of an election to waive the qualified joint and survivor annuity form of benefit, the 90-day period ending on the annuity starting date, or "(B) in the case of .an election to waive the qualified preretirement survivor annuity, the period which begins on the first day of the plan year in which the participant attains age 35 and ends on the date of the participant's death. In the C£ise of a participemt who is separated from service, the applicable election period under subparagraph (B) with respect to benefits accrued before the date of such separation from service shall not begin later than such date. "(b) DEFINITION OF QUALIFIED JOINT AND SURVIVOR ANNUITY.—For Ante, p. 1440. purposes of this section and section 401(aXll), the term 'qualified joint and survivor annuity' means an annuity—
PUBLIC LAW 98-397—AUG. 23, 1984 98 STAT. 1443 : "(1) for the life of the participant with a survivor annuity for the life of the spouse which is not less than 50 percent of (and is not greater than 100 percent of) the amount of the annuity which is payable during the joint lives of the participant and the spouse, and "(2) which is the actuarial equivalent of a single annuity for the life of the participant. Such term also includes any annuity in a form having the effect of an annuity described in the preceding sentence. "(c) DEFINITION OF QUAUFIED PRERETIREMENT SURVIVOR ANNU- ITY.—For purposes of this section and section 401(aXll)— Ante, p. 1440. "(1) IN GENERAL.—Except as provided in paragraph (2), the term 'qualified preretirement survivor annuity' means a survi- vor annuity or the life of the surviving spouse of the participant if— "(A) the payments to the surviving spouse under such annuity are not less than the amounts which would be payable as a survivor annuity under the qualified joint and survivor annuity under the plan (or the actuarim equiva- lent thereof) if— "(i) in the case of a participant who dies after the date on which the participant attained the earliest retirement age, such participant had retired with an, immediate qualified joint and survivor annuity on the* dav before the participant's date of death, or fd» "(ii) in the case of a participant who dies on or before the date on which the participant would have attained the earliest retirement age, such participant had— "(I) separated from service on the date of death, "(II) survived to the earliest retirement age, n "(III) retired with an immediate qualified joint and survivor annuity at the earliest retirement age, and 4 "(IV) died on the day after the day on which such participant would have attained the earliest retire- I ment s^e, and "(B) under the plan, the earliest period for which the surviving spouse may receive a pa5niient under such annu- ity is not later than the month in which the participant would have attained the earliest retirement age under the plan. "(2) SPECIAL RULE FOR DEFINED CONTRIBUTION PLANS.—In the case of any defined contribution plan or participant described in clause (ii) or (iii) of section 401(aXllXB), the term 'qualified Ante, p. 1440. preretirement survivor annuity' means an annuity for the life of the surviving spouse the actuarial equivalent of which is not : r :• ^i^f^ less than 50 percent of the account balance of the participant as of the date of death. "(d) SURVIVOR ANNUITIES NEED NOT BE PROVIDED IF PARTICIPANT ; ij )8i g*; AND SPOUSE MARRIED LESS THAN 1 YEAR.— "(1) IN GENERAL.—Except as provided in paragraph (2);, a plan shall not be treated as failing to meet the requirements of section 401(a)(ll) merely because the plan provides that a quali- Ante, p. 1440. fied joint and survivor annuity (or a qualified preretirement survivor annuity) will not be provided unless the participant and spouse had been married throughout the 1-year period ending on the earlier of—
98 STAT. 1444 PUBLIC LAW 98-397—AUG. 23, 1984 "(A) the participant's annuity starting date, or "(B) the date of the participant's death. "(2) TREATMENT OF CERTAIN MARRIAGES WITHIN i YEAR OF ANNUITY STARTING DATE FOR PURPOSES OF QUAUFIED JOINT AND SURVIVOR ANNUITIES.—For purposes of paragraph (1), if— "(A) a participant marries within 1 year before the annu- ity starting date, and "(B) the participant and the participant's spouse in such marriage have been meirried for at least a 1-year period ending on or before the date of the participant's death, such participant and such spouse shall be treated as having been married throughout the 1-year period ending on the par- ticipant's annuity starting date. "(e) RESTRICTIONS ON CASH-OUTS.— "(1) PLAN MAY REQUIRE DISTRIBUTION IF PRESENT VALUE NOT IN EXCESS OF $3,500.—A plan may provide that the present value of a qualified joint and survivor annuity or a qugdified preretire- ment survivor annuity will be immediately distributed if such value does not exceed $3,500. No distribution may be made under the preceding sentence after the annuity starting date unless the participsmt and the spouse of the participant (or where the participsmt has died, the surviving spouse) consents in writing to such distribution. "(2) PLAN MAY DISTRIBUTE BENEFIT IN EXCESS OF $3,500 ONLY WITH CONSENT.—If^ "(A) the present value of the qualified joint and survivor annuity or the qualified preretirement survivor annuity exceeds $3,500, and "(B) the participgmt and the spouse of the participant (or where the participant has died, the surviving spouse) con- sent in writing to the distribution, the plan may immediately distribute the present value of such annuity. "(3) DETERMINATION OF PRESENT VALUE.—For purposes of paragraphs (1) and (2), the present value of a qualified joint and survivor annuity or a qualified preretirement survivor annuity shall be determined as of the date of the distribution and by using an interest rate not greater than the interest rate which would be used (as of the date of the distribution) by the Pension Benefit Guaranty Corporation for purposes of determining the present value of a lump sum distribution on plan termination. "(f) OTHER DEFINITIONS AND SPECIAL RULES.—For purposes of this Ante, p. 1440. section and section 401(aXll)— "(1) VESTED PARTICIPANT.—The term 'vested participant' means any participant who has a nonforfeitable right (within 26 use 411. the meaning of section 411(a)) to any portion of the accrued benefit derived from employer contributions. "(2) ANNUITY STARTING DATE.—The term 'annuity starting date* means the first day of the first period for which an amount is received as an annuity (whether by reason of retirement or disability). "(3) EARUEST RETIREMENT AGE.—The term 'earliest retire- ment age' means the earliest date on which, under the plan, the participant could elect to receive retirement benefits. "(4) PLAN MAY TAKE INTO ACCOUNT INCREASED COSTS.—A plan may take into account in any equitable manner (as determined by the Secretary) any increased costs resulting from providing a
PUBLIC LAW 98-397—AUG. 23, 1984 98 STAT. 1445 qualified joint or survivor annuity or a qualified preretirement survivor annuity. "(5) CONSULTATION WITH THE SECRETARY OF LABOR.—In pre- scribing regulations under this section and section 401(a)(ll), Ante, p. 1440. the Secretary shall consult with the Secretary of Labor.". (c) CLERICAL AMENDMENT.—The table of sections for subpart B of part I of subchapter D of chapter 1 is amended by adding at the end thereof the following new item: "Sec. 417. Definitions and special rules for purposes of minimum survivor annuity requirements.". SEC. 204. SPECIAL RULES FOR ASSIGNMENTS IN DIVORCE, ETC., PROCEED- INGS. (a) PROHIBITION AGAINST ASSIGNMENT NOT TO APPLY IN DIVORCE, ETC., PROCEEDINGS.—Paragraph (13) of section 401(a) (relating to 26USC401. assignment of benefits) is amended— (1) by striking out "(13) A trust" and inserting in lieu thereof the following: "(13) ASSIGNMENT AND ALIENATION.— "(A) IN GENERAL.—A trust", and (2) by correcting the margin for such subparagraph (A), and (3) by adding at the end thereof the following new sub- paragraph: "(B) SPECIAL RULES FOR DOMESTIC RELATIONS ORDERS.— Subparagraph (A) shall apply to the creation, assignment, or recognition of a right to any benefit payable with respect to a participant pursuant to a domestic relations order, except that subparagraph (A) shall not apply if the order is determined to be a qualified domestic relations order.". (b) QUALIFIED DOMESTIC RELATIONS ORDER DEFINED.—Section 414 Ante, p. 875. is amended by adding at the end thereof the following new 26 USC 414. subsection: "(p) QUALIFIED DOMESTIC RELATIONS ORDER DEFINED.—For pur- poses of this subsection and section 401(a)(13)— "(1) I N GENERAL.— "(A) QUAUFIED DOMESTIC RELATIONS ORDER.—The term 'qualified domestic relations order' means a domestic rela- tions order— "(i) which creates or recognizes the existence of an alternate payee's right to, or assigns to an alternate payee the right to, receive all or a portion of the benefits payable with respect to a participant under a plan, and "(ii) with respect to which the requirements of para- graphs (2) and (3) are met. "(B) DOMESTIC RELATIONS ORDER.—The term 'domestic re- lations order' means any judgment, decree, or order (includ- ing approval of a property settlement agreement) which— (i) relates to the provision of child support, alimony payments, or marital property rights to a spouse, child, or other dependent of a participant, and "(ii) is made pursuant to a State domestic relations law (including a community property law). "(2) ORDER MUST CLEARLY SPECIFY CERTAIN FACTS.—A domestic relations order meets the requirements of this paragraph only if such order clearly specifies—
98 STAT. 1446 PUBLIC LAW 98-397—AUG. 23, 1984 "(A) the name and the last known mailing address (if any) of the participant and the name and mailing address of each alternate payee covered by the order, "(B) the amount or percentage of the participant's bene- fits to be paid by the plan to each such alternate payee, or the manner in which such amount or percentage is to be determined, "(C) the number of payments or period to which such order applies, and "(D) each plan to which such order applies. "(3) ORDER MAY NOT ALTER AMOUNT, FORM, ETC., OF BENEFITS.— A domestic relations order meets the requirements of this paragraph only if such order— "(A) does not require a plan to provide any type or form of benefit, or any option, not otherwise provided under the plan, "(B) does not require the plan to provide increased bene- fits, (determined on the basis of actuarial value), and "(C) does not require the payment of benefits to an alternate payee which are required to be paid to another alternate payee under another order previously determined to be a qualified domestic relations order. "(4) EXCEPTION FOR CERTAIN PAYMENTS MADE AFTER EARUEST RETIREMENT AGE.— "(A) IN GENERAL.—In the case of any payment before a participant has separated from service, a domestic relations order shall not be treated as failing to meet the require- ments of subparagraph (A) of paragraph (3) solely because such order requires that payment of benefits be made to an alternate payee— "(i) on or after the date on which the participant attains (or would have attained) the earliest retirement age, "(ii) as if the participant had retired on the date on which such pajmient is to begin under such order (but taking into accoimt only the present value of the bene- fits actually accrued and not tsddng into account the present value of any employer subsidy for early retire- ment), and "(iii) in any form in which such benefits may be paid under the plan to the participant (other than in the form of a joint and survivor annuity with respect to the alternate payee and his or her subsequent spouse). For purposes of clause (ii), the interest rate assumption used in determining the present value shall be the interest rate specified in the plan or, if no rate is specified, 5 percent. "(B) EARLIEST RETIREMENT AGE.—For purposes of this paragraph, the term 'earliest retirement age* has the mean- Ante, p. 1441. ing given such term by section 417(fK3), except that in the case of any defined contribution plem, the earliest retire- ment age shall be the date which is 10 years before the normal retirement age (within the meaning of section 26 use 411. 411(aX8)). "(5) TREATMENT OF FORMER SPOUSE AS SURVIVING SPOUSE FOR PURPOSES OF DETERMINING SURVIVOR BENEFITS.—To the extent provided in any qualified domestic relations order—
PUBLIC LAW 98-397—AUG. 23, 1984 98 STAT. 1447 "(A) the former spouse of a participant shall be treated as a surviving spouse of such participant for purposes of sec- tions 401(aXll) and 417, and Ante, pp. 1440, "(B) if married for at least 1 year, the surviving spouse I44i. shall be treated as meeting the requirements of section 417(d). A plan shall not be treated as failing to meet the requirements Prohibition. of subsection (a) or (k) of section 401 which prohibit payment of 26 use 40i. benefits before termination of employment solely by reason of payments to an alternate payee pursuant to a qualified domes- tic relations order. " ( 6 ) P L A N PROCEDURES WITH RESPECT TO ORDERS.— '*f • .'.» "(A) NOTICE AND DETERMINATION BY ADMINISTRATOR.—In the case of any domestic relations order received by a plan— "(i) the plan administrator shall promptly notify the -.•>:. * participant and any other a l t e r n ^ e payee of the re- ceipt of such order and the plan's procedures for deter- mining the qualified status of domestic relations orders, and "(ii) within a reasonable period after receipt of such i > '),. order, the plan administrator shall determine whether such order is a qualified domestic relations order and notify the participant and each alternate payee of such determination. "(B) PLAN TO ESTABUSH REASONABLE PROCEDURES.—Each plan shall establish reasonable procedures to determine the qualified status of domestic relations orders and to adminis- ter distributions under such qualified orders. "(7) PROCEDURES FOR PERIOD DURING WHICH DETERMINATION IS BEING MADE.— "(A) IN GENERAL.—During any period in which the issue of whether a domestic relations order is a qualified domes- >^'AV: tic relations order is being determined (by the plan adminis- trator, by a court of competent jurisdiction, or otherwise), the plan administrator shall segregate in a separate ac- count in the plan or in an escrow account the amounts which would have been payable to the alternate payee during such period if the order had been determined to be a qualified domestic relations order. s j at "(B) PAYMENT TO ALTERNATE PAYEE IF ORDER DETERMINED TO BE QUALIFIED DOMESTIC RELATIONS ORDER,—If within 18 months the order (or modification thereof) is determined to be a qualified domestic relations order, the plan administra- tor shall pay the segregated amounts (plus any interest thereon) to the person or persons entitled thereto. "(C) PAYMENT TO PLAN PARTICIPANT IN CERTAIN CASES.—If within 18 months— "(i) it is determined that the order is not a qualified domestic relations order, or "(ii) the issue as to whether such order is a qualified domestic relations order is not resolved, then the plan administrator shall pay the segregated amounts (plus any interest thereon) to the person or per- sons who would have been entitled to such amounts if there had been no order.
98 STAT. 1448 PUBLIC LAW 98-397—AUG. 23, 1984 "(D) SUBSEQUENT DETERMINATION OR ORDER TO BE APPLIED PROSPECTIVELY ONLY.—Any determination that an order is a qualified domestic relations order which is made after the close of the 18-month period shall be applied prospectively only. "(8) ALTERNATE PAYEE DEFINED.—The term 'alternate payee' means any spouse, former spouse, child or other dependent of a participant who is recognized by a domestic relations order as having a right to receive all, or a portion of, the benefits payable under a plan with respect to such participant. "(9) CONSULTATION WITH THE SECRETARY.—In prescribing regu- Ante, p. 1445. lations Under this subsection and section 401(a)(13), the Secre- tary of Labor shall consult with the Secretary.", (c) TAX TREATMENT OF DIVORCE DISTRIBUTIONS.— (1) ALTERNATE PAYEE MUST INCLUDE BENEFITS IN GROSS 26 use 402. INCOME.—Section 402(a) (relating to taxability of beneficiary of trust) is amended by adding at the end thereof the following new paragraph: "(9) ALTERNATE PAYEE UNDER QUAUFIED DOMESTIC RELATIONS ORDER TREATED AS DISTRIBUTEE.—For purposes of subsection 26 use 72. (a)(1) and section 72, the alternate payee shall be treated as the distributee of any distribution or payment made to the alter- nate payee under a qualified domestic relations order (as de- Ante, p. 1445. fined in section 414(p)).". 26 use 72. (2) ALLOCATION OF INVESTMENT IN THE CONTRACT.—Subsection (m) of section 72 (relating to special rules applicable to employee annuities and distributions under employee plans) is amended by adding at the end thereof the following new paragraph: "(10) DETERMINATION OF INVESTMENT IN THE CONTRACT IN THE CASE OF QUAUFIED DOMESTIC RELATIONS ORDERS.—Under regula- tions prescribed by the Secretary, in the case of a distribution or payment made to an alternate payee pursuant to a qualified Supra. domestic relations order (as defined in section 414(p)), the in- vestment in the contract as of the date prescribed in such regulations shall be allocated on a pro rata basis between the present value of such distribution or payment and the present value of all other benefits payable with respect to the partici- pant to which such order relates.". (3) ROLLOVER OF DISTRIBUTIONS UNDER QUALIFIED DOMESTIC 26 use 402. RELATIONS ORDERS.—Paragraph (6) of section 402(a) (relating to special rules for rollovers) is amended by adding at the end thereof the following new subparagraph: "(F) QUALIFIED DOMESTIC RELATIONS ORDERS.—If— "(i) within 1 taxable year of the recipient, the balance to the credit of the recipient by reason of any qualified domestic relations order (within the meaning of section 414(p)) is distributed or paid to the recipient, "(ii) the recipient transfers any portion of the property the recipient receives in such distributions to an eligible retirement plan described in subclause (I) or (II) of paragraph (5XE)(iv), and "(iii) in the case of a distribution of property other than money, the amount so transferred consists of the property distributed, then the portion of the distribution so transferred shall be treated as a distribution described in paragraph (5)(A).".
PUBLIC LAW 98-397—AUG. 23, 1984 98 STAT. 1449 I (4) CLARIFICATION OF ELIGIBIUTY OF PARTICIPANT FOR LUMP SUM TREATMENT.—Paragraph (4) of section 402(e) (relating to tax 26 use 402. on lump sum distributions) is amended by adding at the end thereof the following new subparagraph: "(M) BALANCE TO CREDIT OF EMPLOYEE NOT TO INCLUDE AMOUNTS PAYABLE UNDER QUAUFIED DOMESTIC RELATIONS ORDER.—For purposes of this subsection, subsection (a)(2) of this section, and section 403(a)(2), the balance to the credit 26 use 403. of an employee shall not include any amount payable to an alternate payee under a qualified domestic relations order (within the meaning of section 414(p)).". Ante, p. 1445. SEC. 205. RESTRICTION ON MANDATORY DISTRIBUTIONS. (a) GENERAL RULE.—Subsection (a) of section 411 (relating to 26 use 4 ii. minimum vesting standards) is amended by adding at the end thereof the following new paragraph: "(11) RESTRICTIONS ON CERTAIN MANDATORY DISTRIBUTIONS.— "(A) IN GENERAL.—If the present value of any accrued benefit exceeds $3,500, such benefit shall not be treated as *? nonforfeitable if the plan provides that the present value of such benefit could be immediately distributed without the consent of the participant. "(B) DETERMINATION OF PRESENT VALUE.—For purposes of subparagraph (A), the present value shall be calculated by J. using an interest rate not greater than the interest rate which would be used (as of the date of the distribution) by the Pension Benefit Guaranty Corporation for purposes of ^^ determining the present value of a lump sum distribution on plan termination.". (b) CONFORMING AMENDMENT.—Subparagraph (B) of section 411(aX7) (relating to effect of certein distributions) is amended by 26 use 411. striking out "$1,750" and inserting in lieu thereof "$3,500". SEC. 206. PARTICIPANT TO BE NOTIFIED THAT BENEFITS MAY BE FORFEITABLE. Subsection (e) of section 6057 (relating to individual statement to 26 use 6Ci57. participants) is amended by adding at the end thereof the following new sentence: "Such statement shall also include a notice to the participant of any benefits which are forfeitable if the participant ,| j ^ , f«;. dies before a certain date.". SEC. 207. WRITTEN EXPLANATION OF ROLLOVER TREATMENT REQUIRED TO BE GIVEN TO RECIPIENT OF DISTRIBUTIONS ELIGIBLE FOR ROLLOVER TREATMENT. (a) GENERAL RULE.—Section 402 (relating to taxability of benefici- 26 use 402. ary of employees trusts) is amended by adding at the end thereof the following new subsection: "(f) WRITTEN EXPLANATION TO RECIPIENTS OF DISTRIBUTIONS EUGI- BLE FOR ROLLOVER TREATMENT.— "(1) IN GENERAL.—The plan administrator of any plan shall, when making a qualifying rollover distribution, provide a writ- ten explanation to the recipient— "(A) of the provisions under which such distribution will not be subject to tax if transferred to an eligible retirement • > plan within 60 days after the date on which the recipient received the distribution, and 31-194 - 0 - 86 - 10 : QL. 3 Part 2
98 STAT. 1450 PUBLIC LAW 98-397—AUG. 23, 1984 "(B) if applicable, the provisions of subsections (aX2) and (e) of this section. "(2) DEFINITIONS.—For purposes of this subsection, the terms 'qualifying rollover distribution' and 'eligible retirement plan* have the respective meanings given such terms by subsection (a)(5)(E).". (b) PENALTY FOR FAILURE TO PROVIDE WRITTEN EXPLANATION.— Ante, p. 963. Section 6652 (relating to penalty for failure to file certain informa- 26 use 6652. tion returns, registration statements, etc.) is amended by redesignat- ing subsection (j) as subsection (k) and by inserting after subsection (i) the following new subsection: "(j) FAILURE TO GIVE WRITTEN EXPLANATION TO RECIPIENTS OF CERTAIN QUAUFYING ROLLOVER DISTRIBUTIONS.—In the case of each Ante, p. 1449. failure to provide a written explanation as required by section 402(f), at the time prescribed therefor, unless it is shown that such failure is due to reasonable cause and not to willful neglect, there shall be paid, on notice and demand of the Secretary and in the same manner as tax, by the person failing to provide such written expla- nation, an amount equal to the $10 for each such failure, but the total amount imposed on such person for all such failures during any calendar year shall not exceed $5,000.". TITLE III—GENERAL PROVISIONS SEC. 301. TREATMENT OF CERTAIN PLAN AMENDMENTS AND ACTUARIAL ASSUMPTIONS. (a) CERTAIN PLAN AMENDMENTS TREATED AS REDUCING BENEFITS.— (1) AMENDMENT OF INTERNAL REVENUE CODE OF 1954.—Para- 26 use 411. graph (6) of section 411(d) of the Internal Revenue Code of 1954 (relating to accrued benefit not to be decreased by amendment) is amended to read as follows: "(6) ACCRUED BENEFIT NOT TO BE DECREASED BY AMENDMENT.— "(A) IN GENERAL.—A plan shall be treated as not satisfy- ing the requirements of this section if the accrued benefit of a participant is decreased by an amendment of the plan, 26 use 412. other than an amendment described in section 412(cX8), or section 4281 of the Employee Retirement Income Security 29 use 1441. Act of 1974. "(B) TREATMENT OF CERTAIN PLAN AMENDMENTS.—For purposes of subparagraph (A), a plan amendment which has the effect of^ "(i) eliminating or reducing an early retirement ben- efit or a retirement-type subsidy (as defined in regula- tions), or "(ii) eliminating an optional form of benefit, with respect to benefits attributable to service before the amendment shall be treated as reducing accrued benefits. In the case of a retirement-type subsidy, the preceding sentence shall apply only with respect to a participant who satisfies (either before or after the amendment) the pre- amendment conditions for the subsidy. The Secretary may by regulations provide that this subparagraph shall not apply to a plan amendment described in clause (ii) (other . than a plan amendment having an effect described in clause (i)).".
PUBLIC LAW 98-397—AUG. 23, 1984 98 STAT. 1451 (2) AMENDMENT OF EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974.—Subsection (g) of section 204 of the Employee Retirement Income Security Act of 1974 is amended to read as 29 USC 1054. follows: "(gXl) The accrued benefit of a participant under a plan may not be decreased by an amendment of the plan, other than an amend- ment described in section 302(c)(8). 29 use 1082. "(2) For purposes of paragraph (1), a plan amendment which has the effect of^ "(A) eliminating or reducing an early retirement benefit or a retirement-type subsidy (as defined in regulations), or "(B) eliminating an optional form of benefit, with respect to benefits attributable to service before the amend- ^K ^i 4 , v i ment shall be treated as reducing accrued benefits. In the case of a retirement-type subsidy, the preceding sentence shall apply only with respect to a participant who satisfies (either before or after the amendment) the preamendment conditions for the subsidy. The ., c: K Secretary of the Treasury may by regulations provide that this '"'"' ,,. subparagraph shall not apply to a plan amendment described in subparagraph (B) (other than a plan amendment having an effect described in subparagraph (A)).". (b) REQUIREMENT THAT ACTUARIAL ASSUMPTIONS B E SPECIFIED.— A' Subsection (a) of section 401 of the Internal Revenue Code of 1954 26 use 401. (relating to qualified pension, profit-sharing, and stock bonus plans) is amended by inserting after paragraph (24) the following new paragraph: "(25) REQUIREMENT THAT ACTUARIAL ASSUMPTIONS BE SPECI- FIED.—A defined benefit plan shall not be treated as providing definitely determinable benefits unless, whenever the amount of any benefit is to be determined on the basis of actuarial assumptions, such assumptions are specified in the plan in a ' '" way which precludes employer discretion.". SEC. 302. GENERAL EFFECTIVE DATES. 29 USC 1001 (a) IN GENERAL.—Except as otherwise provided in this section or Pogt p 1452 section 303, the amendments made by this Act shall apply to plan years beginning after December 31,1984. (b) SPECIAL RULE FOR COLLECTIVE BARGAINING AGREEMENTS.—In the case of a plan maintained pursuant to 1 or more collective ,: qq ^ bargaining agreements between employee representatives and 1 or more employers ratified before the date of the enactment of this Act, except as provided in subsection (d) or section 303, the amendments Post, p. 1452. made by this Act shall not apply to plan years beginning before the earlier of— (1) the date on which the last of the collective bargaining agreements relating to the plan terminates (determined without regard to any extension thereof agreed to after the date of the enactment of this Act), or (2) January 1,1987. For purposes of paragraph (1), any plan amendment made pursuant to a collective bargaining agreement relating to the plan which amends the plan solely to conform to any requirement added by title I or II shall not be treated as a termination of such collective Ante, pp. 1426, bargaining agreement. 1436. (c) NOTICE REQUIREMENT.—The amendments made by section 207 Ante, p. 1449. shall apply to distributions after December 31,1984. (d) SPECIAL RULES FOR TREATMENT OF PLAN AMENDMENTS.—
98 STAT. 1452 PUBLIC LAW 98-397—AUG. 23, 1984 (1) I N GENERAL.—Except as provided in paragraph (2), the Ante, p. 1450. amendments made by section 301 shall apply to plan amend- ments made after July 30,1984. (2) SPECIAL RULE FOR COLLECTIVE BARGAINING AGREEMENTS.— In the case of a plan maintained pursuant to 1 or more collec- tive bargaining agreements entered into before January 1,1985, .':b-'.n ':P\I ?is which are— >.• (A) between employee representatives and 1 or more employers, and g I (B) successor agreements to 1 or more collective bargain- ing agreements which terminate after July 30, 1984, and before January 1,1985, Ante, p. 1450. the amendments made by section 301 shall not apply to plan amendments adopted before April 1, 1985, pursuant to such successor agreements (without regard to any modification or reopening after December 31,1984). 29 use 1001 SEC. 303. TRANSITIONAL RULES. (a) AMENDMENTS RELATING TO VESTING RULES; BREAKS IN SERVICE; MATERNITY OR PATERNITY LEAVE.— (1) MINIMUM AGE FOR VESTING.—The amendments made by Ante, pp. 1426, sections 1020t)) and 202(b) shall apply in the case of participants 1436. who have at least 1 hour of service under the plan on or after the first day of the first plan year to which the amendments made by this Act apply. (2) BREAK I N SERVICE RULES.—If, a s of t h e day before t h e first day of t h e first plan year to which t h e a m e n d m e n t s m a d e by this Act apply, section 202 (a) or (b) or 203(b) of t h e Employee 29 u s e 1052, Retirement Income Security Act of 1974 or section 410(a) or 1053. 411(a) of t h e Internal Revenue Code of 1954 (as in effect on t h e 26 u s e 410, 411. ^ay before t h e d a t e of t h e e n a c t m e n t of this Act) would not require a n y service to be t a k e n into account, nothing in t h e a m e n d m e n t s m a d e by subsections (c) a n d (d) of section 102 of ''; this Act a n d subsections (c) a n d (d) of section 202 of this Act shall be construed a s requiring such service to be t a k e n into Supra. account under such section 202 (a) or (b), 2030)), 410(a), or 411(a); as the case may be. (3) MATERNITY OR PATERNITY LEAVE.—The amendments made Ante, pp. 1426, by sections 102(e) and 202(e) shall apply in the case of absences 1436. from work which begin on or after the first day of the first plan year to which the amendments made by this Act apply. 1 A (b) SPECIAL RULE FOR AMENDMENTS RELATING TO MATERNITY OR PATERNITY ABSENCES.—If a plan is administered in a manner which would meet the amendments made by sections 102(e) and 202(e) (relating to certain maternity or paternity absences not treated as breaks in service), such plan need not be amended to meet such requirements until the earlier of— (1) the date on which such plan is first otherwise amended after the date of the enactment of this Act, or (2) the beginning of the first plan year beginning after Decem- ber 31,1986. (c) REQUIREMENT OF JOINT AND SURVIVOR ANNUITY AND PRERE- !;ir.(<. v;.; TIREMENT SURVIVOR ANNUITY.— (1^ REQUIREMENT THAT PARTICIPANT HAVE AT LEAST i HOUR OF " SERVICE OR PAID LEAVE ON OR AFTER DATE OF ENACTMENT.—The Ante, pp. 1429, amendments made by sections 103 and 203 shall apply only in 1440. the c£ise of participants who have at least 1 hour of service
PUBLIC LAW 98-397—AUG. 23, 1984 98 STAT. 1453 under the plan on or after the date of the enactment of this Act or have at least 1 hour of paid leave on or after such date of enactment. (2) REQUIREMENT THAT PRERETIREMENT SURVIVOR ANNUITY BE PROVIDED IN CASE OF CERTAIN PARTICIPANTS DYING ON OR AFTER DATE OF ENACTMENT.—In the case of any participant— (A) who has at least 1 hour of service under the plan on or after the date of the enactment of this Act or has at least 1 hour of paid leave on or after such date of enactment, .r (B) who dies before the annuity starting date, and (C) who dies on or after the date of the enactment of this Act and before the first day of the first plan year to which the amendments made by this Act apply, the amendments made by sections 103 and 203 shsill be treated Ante, pp. 1429, as in effect as of the time of such participant's death. 1440. (3) SPOUSAL CONSENT REQUIRED FOR CERTAIN ELECTIONS AFTER DECEMBER 31, 1984.—Any election after December 31, 1984, and before the first day of the first plan year to which the amend- ments made by this Act apply not to take a joint and survivor ' annuity shall not be effective unless the requirements of section 205(cX2) of the Employee Retirement Income Security Act of 1974 (as amended by section 103 of this Act) and section 417(aX2) Ante, p. 1429. of the Internal Revenue Code of 1954 (as added by section 203 of Ante, p. 1441. this Act) are met with respect to such election. (d) AMENDMENTS RELATING TO ASSIGNMENTS IN DIVORCE, ETC., Effective date. PROCEEDINGS.—The amendments made by sections 104 and 204 shall Ante, pp. 1433, take effect on January 1,1985, except that in the case of a domestic 1445. relations order entered before such date, the plan administrator— (1) shall treat such order as a qualified domestic relations order if such administrator is paying benefits pursuant to such order on such date, and (2) may treat any other such order entered before such date as a qualified domestic relations order even if such order does not meet the requirements of such amendments. (e) TREATMENT OF CERTAIN PARTICIPANTS W H O SEPARATE FROM SERVICE BEFORE DATE OF ENACTMENT.— (1) JOINT A N D SURVIVOR ANNUITY PROVISIONS OF EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974 APPLY TO CERTAIN 29 u s e 1001 PARTICIPANTS.—If— note. (A) a participant had at least 1 hour of service under the plan on or after September 2,1974, (B) section 205 of the Employee Retirement Income Secu- rity Act of 1974 and section 401(aXll) of the Internal Reve- 29 use 1055. nue Code of 1954 (as in effect on the day before the date of 26 use 40i. the enactment of this Act) would not (but for this para- graph) apply to such participant, (C) the amendments made by sections 103 and 203 of this Act do not apply to such participant, and (D) as of the date of the enactment of this Act, the participant's annuity starting date has not occurred and the participant is alive, then such participant may elect to have section 205 of the Employee Retirement Income Security Act of 1974 and section 401(a)(ll) of the Internal Revenue Code of 1954 (as in effect on the day before the date of the enactment of this Act) apply. (2) TREATMENT OF CERTAIN PARTICIPANTS WHO PERFORM SERV- ICE ON OR AFTER JANUARY 1, 1976.—If—
98 STAT. 1454 PUBLIC LAW 98-397—AUG. 23, 1984 (A) a participant had at least 1 hour of service in the first plan year beginning on or after January 1,1976, Ante, pp. 1429, (B) the amendments made by sections 103 and 203 would 1440. not (but for this paragraph) apply to such participant, (C) when such participant separated from service, such participant had at least 10 years of service under the plan ;;j and had a nonforfeitable right to all (or any portion) of such participant's accrued benefit derived from employer contri- butions, and (D) as of the date of the enactment of this Act, such participant's annuity starting date has not occurred and such participant is alive, then such participant may elect to have the qualified preretire- '•^' ' ment survivor annuity requirements of the amendments made by sections 103 and 203 apply. (3) PERIOD DURING WHICH ELECTION MAY BE MADE.—An elec- tion under paragraph (1) or (2) may be made by any participant during the period— (A) beginning on the date of the enactment of this Act, and (B) ending on the earlier of the participant's annuity starting date or the date of the participant's death. «f**^ (4) REQUIREMENT OP NOTICE.— (A) I N GENERAL.— (i) TIME AND MANNER.—Every plan shall give notice of the provisions of this subsection at such time or times and in such manner or manners as the Secretary of the Treasury may prescribe. (ii) PENALTY.—If any plan fails to meet the require- ments of clause (i), such plan shall pay a civil penalty ^ ^ mBb *° *^® Secretary of the Treasury equal to $1 per partici- 30FI ¥K P^^* ^^^ ®^^^ ^^7 during the period beginning with the first day on which such failure occurs and ending on j,,^^nr the day before notice is given by the plan; except that the amount of such penalty imposed on any plan shall not exceed $2,500. 100r DP!J '2 ^^^ RESPONSIBIUTIES OF SECRETARY OF LABOR.—The Secre- eJon tary of Labor shall take such steps (by public announce- ments and otherwise) as may be necessary or appropriate to bring to public attention the provisions of this subsection. 29 use 1001 SEC. 304. STUDY BY COMPTROLLER GENERAL OF THE UNITED STATES. Women. (&) GENERAL RuLE.—The Comptroller General of the United States shall conduct a detailed study Glased on a reliable scientific sample of t3T)ical pension plans of various designs £md sizes) of the effect on women of participation, vesting, funding, integration, sur- vivorship features, and other relevant plan and Federal pension rules. (b) GENERAL ACCOUNTING OFFICE ACCESS TO RECORDS.—For the purpose of conducting the study under subsection (a), the Comptrol- ler General, or any of his duly authorized representatives, shall have access to and the right to examine and copy— (1) any pension plan books, documents, papers, records, or other recorded information within the possession or control of ,, the plan administrator or sponsor, or any person providing services to the plan, and
PUBLIC LAW 98-397—AUG. 23, 1984 98 STAT. 1455 (2) any payroll, employment, or other related records within the possession or control of any employer contributing to or sponsoring a pension plan, that is pertinent to such study. The Comptroller General shall not disclose the identity of any individual or employer in making any information obtained under this subsection available to the public. (c) DEFINITIONS.—For purposes of this section, the terms "pension plan", "administrator", "plan sponsor", and "employer" are defined in section 3 of the Employee Retirement Income Security Act of 1974, as amended. 29 use lOOia. (d) COOPERATION WITH OTHER FEDERAL AGENCIES.—In conducting the study under subsection (a), the Comptroller General shall con- sult with the Internal Revenue Service, the Department of Labor, and other interested Federal agencies so as to prevent any duplica- tion of data compilation or analyses. (e) REPORT.—Not later than January 1, 1990, the Comptroller General shall submit a report on the study conducted under this section to the Committee on Ways and Means of the House of Representatives, the Committee on Education and Labor of the House of Representatives, the Committee on Finance of the Senate, *- - the Committee on Labor and Human Resources of the Senate, and the Joint Committee on Taxation. Approved August 23, 1984. LEGISLATIVE HISTORY—H.R. 4280: HOUSE REPORTS: No. 98-655, Pt. 1 (Comm. on Education and Labor) and Pt. 2 (Comm. on Ways and Means). SENATE REPORT No. 98-575 (Comm. on Finance). ,/>« U^i. CONGRESSIONAL RECORD, Vol. 130 (1984): May 22, considered and passed House. Aug. 6, considered and passed Senate, amended. Aug. 9, House concurred in Senate amendment. WEEKLY COMPILATION OF PRESIDENTIAL DOCUMENTS, Vol. 20, No. 35 (1984): Aug. 23, Presidential statement.