Pension Simplification Act of 1993

TABLE OF CONTENTS:

Title I: Simplified Distribution Rules

Title II: Increased Access to Pension Plans

Title III: Nondiscrimination Provisions

Title IV: Miscellaneous Simplification

Pension Simplification Act of 1993 - Title I: Simplified Distribution Rules - Amends the Internal Revenue Code to repeal: (1) the $5,000 limitation on the exclusion of employees' death benefits; and (2) the five-year forward income averaging for lump-sum distributions.

Establishes a method of taxing annuity payments by taking into account the investment in the contract and the number of anticipated payments.

Title II: Increased Access to Pension Plans - Modifies certain simplified employee pensions with respect to allowable participants and participation requirements.

Allows local governments and tax-exempt organizations to participate in cash or deferred arrangements.

Authorizes the Secretary, as a condition of sponsorship, to prescribe rules defining the duties and responsibilities of certain master and prototype retirement plans.

Title III: Nondiscrimination Provisions - Redefines the term "highly compensated employee" for pension, profit sharing, stock bonus plan, etc. purposes. Makes such an employee one who is a five-percent owner or who has compensation from the employer in excess of $50,000. Provides a special rule where no employees are treated as highly compensated.

Provides alternative methods of satisfying the special nondiscrimination requirements applicable to elective deferrals and employer matching contributions.

Modifies the two-part nondiscrimination test for elective contributions under cash or deferred arrangements by permitting the use of the average deferral percentage for nonhighly compensated employees for the preceding year to be used in determining the permitted average deferral percentage for highly compensated employees for the current year.

Title IV: Miscellaneous Simplification - Revises the definition of a leased employee to mean one whose services are performed under the control of a service recipient, instead of one whose services are historically performed by employees.

Provides that the cost-of-living adjustment with respect to any calendar year is based on the increase in the applicable index as of the close of the calendar quarter ending September of the preceding calendar year. Requires the rounding of such amounts.

Establishes a contribution limit for owner-employees of retirement plans.

Eliminates the special vesting rule for multiemployer plans.

Permits certain employers to elect an alternative full funding limitation with respect to any defined benefit plan based solely on the accrued liability under such plan. Requires the Secretary to adjust the 150-percent current liability full funding limit for other plans if there is a revenue shortfall.

Allows rural cooperative plans which include cash or deferred arrangements to make distributions to participants after attainment of age 59 1/2.

Modifies the treatment of governmental plans with respect to limits on contributions and benefits.

Makes the social security retirement age the uniform retirement age for purposes of discrimination testing.

Makes uniform the penalty provisions applicable to certain pension reporting requirements.

Defines affiliated employers for Treasury regulation purposes with respect to tax-exemption.

Treats certain nonunion air pilots as a separate class of employees for nondiscrimination testing purposes.

Provides special rules for distributions of deferred compensation plans of State and local governments and tax-exempt organizations.

Provides that, for purposes of the excise tax, an employer reversion does not include certain amounts paid to the Federal Government by reason of certain government contracting regulations.

Requires continuation of health coverage for employees, including retired employees of failed financial institutions.

Declares that the health care continuation plan maintained by the Federal Deposit Insurance Corporation on June 25, 1992, and any other substantially similar plan maintained by such Corporation, satisfies continuation coverage requirements.

Establishes the National Commission on Private Pension Plans to report to the President and congressional leaders on a review of existing Federal incentives and programs that encourage and protect private retirement savings. Requires the report to make recommendations for increasing the level and security of private retirement savings.