A bill to amend the Internal Revenue Code of 1986 to improve the portability of pension benefits, and for other purposes.

Summary

Amends Internal Revenue Code provisions relating to whether a trust that is part of a defined contribution plan constitutes a qualified trust or annuity plan for tax-deferred compensation plan purposes. Requires such a trust, in order to constitute a qualified trust, to: (1) permit employees to make rollover contributions to the plan; (2) prohibit, with certain exceptions (including nursing home and long-term care insurance expenses), retirement distributions to an employee before the employee attains age 59 1/2, unless the employee makes a direct transfer to another eligible retirement plan; (3) distribute amounts to a retiree based on post-retirement life expectancy; and (4) provide for the direct transfer of an employee's benefit to another eligible retirement plan upon the employee's separation from service. Applies these requirements, insofar as they relate to retirement distributions, to individual retirement accounts and individual retirement annuities. Permits an employer to provide salary reduction arrangements under a simplified employee pension plan (SEP) without regard to the number of employees (current law restricts such plans to employers having fewer than 25 employees). Requires an employer to offer such a salary reduction arrangement if any employee requests the employer to establish a SEP that permits an employee to elect to have the employer make payments: (1) as contributions to the SEP on behalf of the employee; or (2) to the employee directly in cash.

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Documents

1 official file

• Introduced in House

  summary · EN · 10 June 1987

  Open at official source

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