Extension of Section 420 and Retiree Life Insurance Act of 2012 - Amends the Internal Revenue Code to: (1) extend through 2021 the authority for transfers of excess pension assets of a defined benefit plan to a retiree health benefits account, and (2) allow the transfer of excess pension assets of a defined benefit plan to a retiree group term life insurance account.
[Congressional Bills 112th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4143 Introduced in House (IH)]
112th CONGRESS
2d Session
H. R. 4143
To amend the Internal Revenue Code of 1986 to extend the period during
which transfers of excess pension assets may be made to retiree health
accounts and to provide for the transfer of such assets to retiree
group term life insurance accounts.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
March 5, 2012
Mr. Tiberi (for himself and Mr. Pascrell) introduced the following
bill; which was referred to the Committee on Ways and Means, and in
addition to the Committee on Education and the Workforce, for a period
to be subsequently determined by the Speaker, in each case for
consideration of such provisions as fall within the jurisdiction of the
committee concerned
_______________________________________________________________________
A BILL
To amend the Internal Revenue Code of 1986 to extend the period during
which transfers of excess pension assets may be made to retiree health
accounts and to provide for the transfer of such assets to retiree
group term life insurance accounts.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Extension of Section 420 and Retiree
Life Insurance Act of 2012''.
SEC. 2. EXTENSION FOR TRANSFERS OF EXCESS PENSION ASSETS TO RETIREE
HEALTH ACCOUNTS.
(a) In General.--Paragraph (5) of section 420(b) of the Internal
Revenue Code of 1986 is amended by striking ``December 31, 2013'' and
inserting ``December 31, 2021''.
(b) Conforming ERISA Amendments.--
(1) Sections 101(e)(3), 403(c)(1), and 408(b)(13) of the
Employee Retirement Income Security Act of 1974 are each
amended by striking ``Pension Protection Act of 2006'' and
inserting ``Extension of Section 420 and Retiree Life Insurance
Act of 2012''.
(2) Section 408(b)(13) of such Act (29 U.S.C. 1108(b)(13))
is amended by striking ``January 1, 2014'' and inserting
``January 1, 2022''.
(c) Effective Date.--The amendments made by this Act shall take
effect on the date of the enactment of this Act.
SEC. 3. TRANSFER OF EXCESS PENSION ASSETS TO RETIREE GROUP TERM LIFE
INSURANCE ACCOUNTS.
(a) In General.--Subsection (a) of section 420 of the Internal
Revenue Code of 1986 is amended by inserting ``, or an applicable life
insurance account,'' after ``health benefits account''.
(b) Applicable Life Insurance Account Defined.--
(1) In general.--Subsection (e) of section 420 of the
Internal Revenue Code of 1986 is amended by redesignating
paragraphs (4) and (5) as paragraphs (5) and (6), respectively,
and by inserting after paragraph (3) the following new
paragraph:
``(4) Applicable life insurance account.--The term
`applicable life insurance account' means a separate account
established and maintained for amounts transferred under this
section for qualified current retiree liabilities based on
premiums for applicable life insurance benefits.''.
(2) Applicable life insurance benefits defined.--Paragraph
(1) of section 420(e) of such Code is amended by redesignating
subparagraph (D) as subparagraph (E) and by inserting after
subparagraph (C) the following new subparagraph:
``(D) Applicable life insurance benefits.--The term
`applicable life insurance benefits' means group-term
life insurance coverage provided to retired employees
who, immediately before the qualified transfer, are
entitled to receive such coverage by reason of
retirement and who are entitled to pension benefits
under the plan, but only to the extent that such
coverage is provided under a policy for retired
employees and the cost of such coverage is excludable
from the retired employee's gross income under section
79.''.
(3) Collectively bargained life insurance benefits
defined.--
(A) In general.--Paragraph (6) of section 420(f) of
such Code is amended by redesignating subparagraph (D)
as subparagraph (E) and by inserting after subparagraph
(C) the following new subparagraph:
``(D) Collectively bargained life insurance
benefits.--The term `collectively bargained life
insurance benefits' means, with respect to any
collectively bargained transfer--
``(i) applicable life insurance benefits
which are provided to retired employees who,
immediately before the transfer, are entitled
to receive such benefits by reason of
retirement, and
``(ii) if specified by the provisions of
the collective bargaining agreement governing
the transfer, applicable life insurance
benefits which will be provided at retirement
to employees who are not retired employees at
the time of the transfer.''.
(B) Conforming amendments.--
(i) Clause (i) of section 420(e)(1)(C) of
such Code is amended by striking ``upon
retirement'' and inserting ``by reason of
retirement''.
(ii) Subparagraph (C) of section 420(f)(6)
of such Code is amended--
(I) by striking ``which are
provided to'' in the matter preceding
clause (i),
(II) by inserting ``which are
provided to'' before ``retired
employees'' in clause (i),
(III) by striking ``upon
retirement'' in clause (i) and
inserting ``by reason of retirement'',
and
(IV) by striking ``active employees
who, following their retirement,'' and
inserting ``which will be provided at
retirement to employees who are not
retired employees at the time of the
transfer and who''.
(c) Maintenance of Effort.--
(1) In general.--Subparagraph (A) of section 420(c)(3) of
the Internal Revenue Code of 1986 is amended by inserting ``,
and each group-term life insurance plan under which applicable
life insurance benefits are provided,'' after ``health benefits
are provided''.
(2) Conforming amendments.--
(A) Subparagraph (B) of section 420(c)(3) of such
Code is amended--
(i) by redesignating subclauses (I) and
(II) of clause (i) as subclauses (II) and (III)
of such clause, respectively, and by inserting
before subclause (II) of such clause, as so
redesignated, the following new subclause:
``(I) separately with respect to
applicable health benefits and
applicable life insurance benefits,'',
and
(ii) by striking ``for applicable health
benefits'' and all that follows in clause (ii)
and inserting ``was provided during such
taxable year for the benefits with respect to
which the determination under clause (i) is
made.''.
(B) Subparagraph (C) of section 420(c)(3) of such
Code is amended--
(i) by inserting ``for applicable health
benefits'' after ``applied separately'', and
(ii) by inserting ``, and separately for
applicable life insurance benefits with respect
to individuals age 65 or older at any time
during the taxable year and with respect to
individuals under age 65 during the taxable
year'' before the period.
(C) Subparagraph (E) of section 420(c)(3) of such
Code is amended--
(i) in clause (i), by inserting ``or
retiree life insurance coverage, as the case
may be,'' after ``retiree health coverage'',
(ii) in clause (ii), by inserting ``for
retiree health coverage'' after ``cost
reductions'' in the heading thereof, and
(iii) in clause (ii)(II), by inserting
``with respect to applicable health benefits''
after ``liabilities of the employer''.
(D) Paragraph (2) of section 420(f) of such Code is
amended by striking ``collectively bargained retiree
health liabilities'' each place it occurs and inserting
``collectively bargained retiree liabilities''.
(E) Clause (i) of section 420(f)(2)(D) of such Code
is amended--
(i) by inserting ``, and each group-term
life insurance plan or arrangement under which
applicable life insurance benefits are
provided,'' in subclause (I) after ``applicable
health benefits are provided'',
(ii) by inserting ``or applicable life
insurance benefits, as the case may be,'' in
subclause (I) after ``provides applicable
health benefits'',
(iii) by striking ``group health'' in
subclause (II), and
(iv) by inserting ``or collectively
bargained life insurance benefits'' in
subclause (II) after ``collectively bargained
health benefits''.
(F) Clause (ii) of section 420(f)(2)(D) of such
Code is amended--
(i) by inserting ``with respect to
applicable health benefits or applicable life
insurance benefits'' after ``requirements of
subsection (c)(3)'', and
(ii) by adding at the end the following:
``Such election may be made separately with
respect to applicable health benefits and
applicable life insurance benefits. In the case
of an election with respect to applicable life
insurance benefits, the first sentence of this
clause shall be applied as if subsection (c)(3)
as in effect before the amendments made by such
Act applied to such benefits.''.
(G) Clause (iii) of section 420(f)(2)(D) of such
Code is amended--
(i) by striking ``retiree'' each place it
occurs, and
(ii) by inserting ``, collectively
bargained life insurance benefits, or both, as
the case may be,'' after ``health benefits''
each place it occurs.
(d) Coordination With Section 79.--Section 79 of the Internal
Revenue Code of 1986 is amended by adding at the end the following new
subsection:
``(f) Exception for Life Insurance Purchased in Connection With
Qualified Transfer of Excess Pension Assets.--Subsection (b)(3) and
section 72(m)(3) shall not apply in the case of any cost paid (whether
directly or indirectly) with assets held in an applicable life
insurance account (as defined in section 420(e)(4)) under a defined
benefit plan.''.
(e) Conforming Amendments.--
(1) Section 420 of the Internal Revenue Code of 1986 is
amended by striking ``qualified current retiree health
liabilities'' each place it appears and inserting ``qualified
current retiree liabilities''.
(2) Section 420 of such Code is amended by inserting ``, or
an applicable life insurance account,'' after ``a health
benefits account'' each place it appears in subsection
(b)(1)(A), subparagraphs (A), (B)(i), and (C) of subsection
(c)(1), subsection (d)(1)(A), and subsection (f)(2)(E)(ii).
(3) Section 420(b) of such Code is amended--
(A) by adding the following at the end of paragraph
(2)(A): ``If there is a transfer from a defined benefit
plan to both a health benefits account and an
applicable life insurance account during any taxable
year, such transfers shall be treated as 1 transfer for
purposes of this paragraph.'', and
(B) by inserting ``to an account'' after ``may be
transferred'' in paragraph (3).
(4) The heading for section 420(c)(1)(B) of such Code is
amended by inserting ``or life insurance'' after ``health
benefits''.
(5) Paragraph (1) of section 420(e) of such Code is
amended--
(A) by inserting ``and applicable life insurance
benefits'' in subparagraph (A) after ``applicable
health benefits'', and
(B) by striking ``health'' in the heading thereof.
(6) Subparagraph (B) of section 420(e)(1) of such Code is
amended--
(A) in the matter preceding clause (i), by
inserting ``(determined separately for applicable
health benefits and applicable life insurance
benefits)'' after ``shall be reduced by the amount'',
(B) in clause (i), by inserting ``or applicable
life insurance accounts'' after ``health benefit
accounts'', and
(C) in clause (i), by striking ``qualified current
retiree health liability'' and inserting ``qualified
current retiree liability''.
(7) The heading for subsection (f) of section 420 of such
Code is amended by striking ``Health'' each place it occurs.
(8) Subclause (II) of section 420(f)(2)(B)(ii) of such Code
is amended by inserting ``or applicable life insurance account,
as the case may be,'' after ``health benefits account''.
(9) Subclause (III) of section 420(f)(2)(E)(i) of such Code
is amended--
(A) by inserting ``defined benefit'' before ``plan
maintained by an employer'', and
(B) by inserting ``health'' before ``benefit plans
maintained by the employer''.
(10) Paragraphs (4) and (6) of section 420(f) of such Code
are each amended by striking ``collectively bargained retiree
health liabilities'' each place it occurs and inserting
``collectively bargained retiree liabilities''.
(11) Subparagraph (A) of section 420(f)(6) of such Code is
amended--
(A) in clauses (i) and (ii), by inserting ``, in
the case of a transfer to a health benefits account,''
before ``his covered spouse and dependents'', and
(B) in clause (ii), by striking ``health plan'' and
inserting ``plan''.
(12) Subparagraph (B) of section 420(f)(6) of such Code is
amended--
(A) in clause (i), by inserting ``, and
collectively bargained life insurance benefits,'' after
``collectively bargained health benefits'',
(B) in clause (ii)--
(i) by adding at the end the following:
``The preceding sentence shall be applied
separately for collectively bargained health
benefits and collectively bargained life
insurance benefits.'', and
(ii) by inserting ``, applicable life
insurance accounts,'' after ``health benefit
accounts'', and
(C) by striking ``health'' in the heading thereof.
(13) Subparagraph (E) of section 420(f)(6) of such Code, as
redesignated by subsection (b), is amended--
(A) by striking ``bargained health'' and inserting
``bargained'',
(B) by inserting ``, or a group-term life insurance
plan or arrangement for retired employees,'' after
``dependents'', and
(C) by striking ``health'' in the heading thereof.
(14) Section 101(e) of the Employee Retirement Income
Security Act of 1974 (29 U.S.C. 1021(e)) is amended--
(A) in paragraphs (1) and (2), by inserting ``or
applicable life insurance account'' after ``health
benefits account'' each place it appears, and
(B) in paragraph (1), by inserting ``or applicable
life insurance benefit liabilities'' after ``health
benefits liabilities''.
(f) Technical Correction.--Clause (iii) of section 420(f)(6)(B) is
amended by striking ``416(I)(1)'' and inserting ``416(i)(1)''.
(g) Repeal of Deadwood.--
(1) Subparagraph (A) of section 420(b)(1) of the Internal
Revenue Code of 1986 is amended by striking ``in a taxable year
beginning after December 31, 1990''.
(2) Subsection (b) of section 420 of such Code is amended
by striking paragraph (4) and by redesignating paragraph (5),
as amended by this Act, as paragraph (4).
(3) Paragraph (2) of section 420(b) of such Code, as
amended by this section, is amended--
(A) by striking subparagraph (B), and
(B) by striking ``per year.--'' and all that
follows through ``No more than'' and inserting ``per
year.--No more than''.
(4) Paragraph (2) of section 420(c) of such Code is
amended--
(A) by striking subparagraph (B),
(B) by moving subparagraph (A) two ems to the left,
and
(C) by striking ``before transfer.--'' and all that
follows through ``The requirements of this paragraph''
and inserting the following: ``before transfer.--The
requirements of this paragraph''.
(5) Paragraph (2) of section 420(d) of such Code is amended
by striking ``after December 31, 1990''.
(h) Effective Date.--
(1) In general.--The amendments made by this section shall
apply to transfers made after the date of the enactment of this
Act.
(2) Conforming amendments relating to pension protection
act.--The amendments made by subsections (b)(3)(B) and (f)
shall take effect as if included in the amendments made by
section 841(a) of the Pension Protection Act of 2006.
<all>
Introduced in House
Introduced in House
Referred to the Committee on Ways and Means, and in addition to the Committee on Education and the Workforce, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
Referred to the Committee on Ways and Means, and in addition to the Committee on Education and the Workforce, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
Referred to the Subcommittee on Health, Employment, Labor, and Pensions.
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