,,ii #aaeth ,,congress #b;d ,session ,s4 #cggb ,,in ,,the ,,senate ,,of ,,the ,,united ,,states ,december #ah1 #bjah ,mr4 ,merkley introduced the following bill2 which was read twice and referred to the ,committee on ,finance ,a ,,bill ,to amend the ,internal ,revenue ,code of #aihf to provide a contribution limit and increased minimum distributions for certain retirement plans with large account balances4 #a4 ,short title ,this ,act may be cited as the ,retirement ,fairness ,act4 #b4 ,contribution limit and increased minimum distributions for certain retirement plans with large account balances 7a7 ,contribution limit 7#a7 ,in general ,subpart ,a of part ,i of subchapter ,d of chapter #a of the ,internal ,revenue ,code of #aihf is amended by adding at the end the following3 #dji;,b4 ,contribution limit on certain retirement plans with large account balances 7a7 ,general rule ,notwithstanding any other provision of this title1 no applicable annual additions shall be made by1 or on behalf of1 an individual for the taxable year to any applicable retirement plan to the extent such applicable annual additions exceed the excess 7if any7 of-- 7#a7 the applicable dollar amount for the taxable year1 over 7#b7 the aggregate balances to the credit of the individual 7whether as a participant1 owner1 or beneficiary7 in all applicable retirement plans 7determined as of the close of the calendar year preceding the calendar year in which the taxable year begins74 7b7 ,rules relating to contribution limitations 7#a7 ,plans other than certain ,i,r,as 7,a7 ,in general ,except as provided in paragraph 7#b71 applicable annual additions in excess of the limitation under subsection 7a7 shall be treated for purposes of this title in the same manner as excess deferrals are treated under section #djb7;g74 7,b7 ,special rule for after tax contributions ,if1 without regard to this paragraph1 any portion of an applicable annual addition to which subparagraph 7,a7 applies with respect to an individual is not excludable from gross income of the individual 7or no deduction is allowable to the individual with respect to such portion71 such portion shall not be-- 7i7 includible in gross income by reason of the application of subparagraph 7,a71 or 7ii7 taken into account in computing the investment in the contract for purposes of section #gb4 7#b7 ,special rule for ,i,r,as 7,a7 ,in general ,in the case of an applicable retirement plan which is an individual retirement plan 7other than a simplified employee pension under section #djh7k7 or a simple retirement account under section #djh7p771 any applicable annual addition to such plan in excess of the limitation under subsection 7a7 shall be treated for purposes of sections #djh and #djh;,a as a contribution for the taxable year in excess of the maximum amount allowable as a deduction under section #bai for the taxable year4 7,b7 ,after tax contributions ,in the case of applicable annual additions in excess of the limitation under subsection 7a7-- 7i7 rules similar to the rules of paragraph 7#a77;,b7 shall apply to any such additions which are treated as designated nondeductible contributions under section #djh7o71 and 7ii7 section #djh;,a7d77#b77;,c7 shall apply to any such additions which are to a ,roth ,,ira 7and to any net income allocable to such additions74 ,for purposes of clause 7ii71 distributions from a ,roth ,,ira shall be treated as first made from amounts described in clause 7ii7 and section #djh;,a7d77#b77;,c7 shall be applied in the same manner as if there were a distribution of a contribution described in section #djh7;d77#d7 7without regard to whether such distribution is timely made74 7#c7 ,allocation of excess applicable annual additions ,if the applicable dollar amount for a taxable year exceeds the amount described in subsection 7a77#b71 the taxpayer may1 in such form and manner as the ,secretary may prescribe1 allocate such excess to applicable annual additions to each applicable retirement plan in such manner as the taxpayer chooses4 7c7 ,definitions and special rules ,for purposes of this section-- 7#a7 ,applicable annual addition 7,a7 ,in general ,the term applicable annual addition means any of the following made to or on behalf of an individual3 7i7 ,an annual addition 7within the meaning of section #dae7;c77#b774 7ii7 ,any contribution to an individual retirement plan1 including any employer or employee contribution to a simplified employee pension under section #djh7k7 or a simple retirement account under section #djh7p74 7iii7 ,any deferral under an eligible deferred compensation plan described in section #deg7;b7 which is maintained by an eligible employer described in section #deg7;e77#a77;,a74 7,b7 ,rollover contributions disregarded ,a rollover contribution under section #djb7;c71 #djc7;b77#h71 #djh7;d77#c77;,a77ii71 or #deg7;e77#af7 shall not be treated as an annual addition4 7#b7 ,applicable dollar amount 7,a7 ,in general ,the term applicable dollar amount means #d1jjj1jjj4 7,b7 ,adjustment for inflation ,in the case of any taxable year beginning after #bjai1 the #d1jjj1jjj amount under subparagraph 7,a7 shall be increased by an amount equal to the product of-- 7i7 such amount1 and 7ii7 the cost-of-living adjustment under section #a7;f77#c7 for the calendar year in which such taxable year begins1 determined by substituting calendar year #bjai for calendar year #bjaf in subparagraph 7,a77ii7 thereof4 7,c7 ,rounding ,if any amount as adjusted under subparagraph 7,b7 is not a multiple of #a1jjj1 such amount shall be rounded to the next lowest multiple of #a1jjj4 7#c7 ,applicable retirement plan ,the term applicable retirement plan means-- 7,a7 a defined contribution plan to which section #dja7;a7 or #djc7;a7 applies1 7,b7 an annuity contract under section #djc7;b71 7,c7 an eligible deferred compensation plan described in section #deg7;b7 which is maintained by an eligible employer described in section #deg7;e77#a77;,a71 or 7,d7 an individual retirement plan4 7d7 ,regulations ,the ,secretary shall prescribe such regulations and guidance as are necessary or appropriate to carry out the purposes of this section1 including regulations or guidance that provide for the application of this section and section #digd7;e7 in the case of plans with a valuation date other than the last day of a calendar year4 4 7#b7 ,conforming amendments 7,a7 ,the table of contents for subpart ,a of part ,i of subchapter ,d of chapter #a of such ,code is amended by adding after the item relating to section #dji;,a the following new item3 ,sec4#dji;,b4 ,contribution limit on certain retirement plans with large account balances4 4 7,b7 ,section #djb7;g7 of such ,code is amended by adding at the end the following new paragraph3 7#i7 ,aggregate limitation ,for additional limitation on contributions to certain plans with large account balances1 see section #dji;,b4 4 7,c7 ,section #djc7;b77#a7 of such ,code is amended by adding at the end the following new sentence3 ,for additional limitation on contributions to certain plans with large account balances1 see section #dji;,b4 7,d7 ,section #djh7r7 of such ,code is amended by adding at the end the following new paragraph3 7#c7 ,for additional limitation on contributions to certain plans with large account balances1 see section #dji;,b4 4 7,e7 ,section #deg7;c7 of such ,code is amended by adding at the end the following new sentence3 ,for additional limitation on contributions to certain plans with large account balances1 see section #dji;,b44 7b7 ,excise tax on excess annual additions 7#a7 ,in general ,subsection 7a7 of section #digc of the ,internal ,revenue ,code of #aihf is amended-- 7,a7 by striking or at the end of paragraph 7#e71 7,b7 by inserting or after the comma at the end of paragraph 7#f71 and 7,c7 by inserting after paragraph 7#f7 the following new paragraph3 7#g7 an applicable retirement plan 7within the meaning of section #dji;,b7c77#c771 4 7#b7 ,excess contributions to applicable retirement plans ,section #digc of such ,code is amended by adding at the end the following new subsection3 7i7 ,excess contributions to applicable retirement plans ,for purposes of this section1 in the case of applicable retirement plans 7within the meaning of section #dji;,b7c77#c771 the term excess contributions means1 with respect to any taxable year1 the sum of-- 7#a7 the excess of the applicable annual additions 7within the meaning of section #dji;,b7c77#a77 to such plans over the limitation under section #dji;,b7a7 for such taxable year1 and 7#b7 the lesser of-- 7,a7 the amount determined under this subsection for the preceding taxable year1 reduced by the aggregate distributions from such plans for the taxable year 7including distributions required under section #digd7;e77 to the extent not contributed in a rollover contribution to another eligible retirement plan in accordance with section #djb7;c71 #djc7;b77#h71 #deg7;e77#af71 #djh7;d77#c71 or #djh;,a7d77#c71 or 7,b7 the amount 7if any7 by which the amount determined under section #dji;,b7a77#b7 for the taxable year exceeds the applicable dollar amount under section #dji;,b7c77#b7 for the taxable year4 4 7#c7 ,conforming amendments ,subsection 7a7 of section #digc of such ,code is amended-- 7,a7 by striking accounts or annuities and inserting accounts1 annuities1 or plans1 and 7,b7 by striking account or annuity and inserting account1 annuity1 or plan4 7c7 ,increase in minimum required distributions 7#a7 ,in general ,section #digd of the ,internal ,revenue ,code of #aihf is amended by adding at the end the following3 7e7 ,increase in minimum required distributions for payees with large aggregate account balances 7#a7 ,in general ,if this subsection applies to a payee for any taxable year-- 7,a7 all qualified retirement plans and eligible deferred compensation plans of the payee which are applicable retirement plans taken into account in computing the excess described in paragraph 7#b77;,a7 shall be treated as #a plan solely for purposes of applying this section to the increase in minimum required distributions for the taxable year described in subparagraph 7,b71 and 7,b7 the minimum required distributions under this section for all plans treated as #a plan under subparagraph 7,a7 with respect to such payee for the taxable year shall be increased by the excess 7if any7 of-- 7i7 the excess described in paragraph 7#b77;,a71 over 7ii7 the sum of the minimum required distributions 7determined without regard to this subsection7 for all such plans4 7#b7 ,application ,this subsection shall apply to a payee for a taxable year-- 7,a7 if the aggregate balances to the credit of the payee 7whether as a participant1 owner1 or beneficiary7 in all applicable retirement plans 7determined as of the close of the calendar year preceding the calendar year in which the taxable year begins7 exceed the applicable dollar amount for the calendar year in which the taxable year begins1 and 7,b7 without regard to whether amounts with respect to the payee are otherwise required to be distributed under section #dja7;a77#i71 #djc7;b77#aj71 #djh7;a77#f71 #djh7;b77#c71 or #deg7;d77#b74 7#c7 ,coordination and allocation 7,a7 ,minimum distribution requirements ,if this subsection applies to a payee for any taxable year-- 7i7 this section shall apply first to minimum required distributions determined without regard to this subsection and then to any increase in minimum required distributions by reason of this subsection1 and 7ii7 nothing in this subsection shall be construed to affect the amount of any minimum required distribution determined without regard to this subsection or the plan or plans from which it is required to be distributed from4 7,b7 ,allocation of increase in minimum required distributions ,the taxpayer may1 in such form and manner as the ,secretary may prescribe1 allocate any increase in minimum required distributions by reason of this subsection to applicable retirement plans treated as #a plan under subparagraph 7,a7 in such manner as the taxpayer chooses4 7#d7 ,treatment of ,roth ,i,r,as 7,a7 ,in general ,notwithstanding section #djh;,a7c77#e7-- 7i7 the aggregate balance to the credit of a payee of any ,roth ,,ira shall be taken into account for purposes of this subsection1 and 7ii7 distributions from a ,roth ,,ira may be taken into account in determining whether the required increase in minimum required distributions by reason of this subsection has been satisfied4 7,b7 ,inclusion in income of distributed earnings ,if any distribution from a ,roth ,,ira is taken into account under subparagraph 7,a77ii71 then1 notwithstanding section #djh;,a7d77#e71 the portion of such distribution which is properly allocable to net income on contributions to the ,roth ,,ira shall not be treated as a qualified distribution and shall be included in gross income of the payee4 7#e7 ,phase-in for taxpayers with excess balances for taxable year beginning in #bjai 7,a7 ,in general ,if there is an excess described in paragraph 7#b77;,a7 for the first taxable year of a taxpayer beginning during #bjai 7in this paragraph referred to as the historic excess71 then the amount taken into account under paragraph 7#a77;,b77i7 for such first taxable year and each subsequent taxable year to which this paragraph applies shall1 in lieu of the excess described in paragraph 7#b77;,a7 for each such taxable year1 be equal to-- 7i7 in the case of such first taxable year1 #aj percent of the historic excess1 and 7ii7 in the case of each subsequent taxable year to which this paragraph applies1 the sum of-- 7,i7 #ajj percent of amount 7if any7 by which the excess described in paragraph 7#b77;,a7 for such taxable year exceeds the adjusted historic excess for such taxable year1 plus 7,,ii7 #aj percent of the adjusted historic excess for such taxable year 7#ajj percent of such adjusted historic excess for any taxable year if it is less than #a1jjj74 7,b7 ,adjusted historic excess ,for purposes of this paragraph1 the term adjusted historic excess means1 with respect to any taxable year1 the lesser of-- 7i7 the excess 7if any7 of the-- 7,i7 the historic excess1 over 7,,ii7 the aggregate amount of the historic excess taken into account under clauses 7i7 and 7ii77,,ii7 of subparagraph 7,a7 for all preceding taxable years1 or 7ii7 the aggregate balances to the credit of the payee 7whether as a participant1 owner1 or beneficiary7 in all applicable retirement plans 7determined as of the close of the calendar year preceding the calendar year in which such taxable year begins7 in excess of #d1jjj1jjj4 7,c7 ,taxable years to which paragraph applies ,this paragraph shall not apply to-- 7i7 any taxable year if the aggregate amount of the historic excess taken into account under clauses 7i7 and 7ii77,,ii7 of subparagraph 7,a7 for all preceding taxable years equals such historic excess1 or 7ii7 the first taxable year in which the aggregate balances to the credit of the payee 7whether as a participant1 owner1 or beneficiary7 in all applicable retirement plans 7determined as of the close of the calendar year preceding the calendar year in which such taxable year begins7 are #d1jjj1jjj or less and any subsequent taxable year4 7#f7 ,definitions ,for purposes of this subsection1 any term used in this subsection which is also used in section #dji;,b shall have the same meaning as when such term is used in such section4 4 7#b7 ,exception from #aj percent additional tax on early distributions ,section #gb7t77#b7 of such ,code is amended by adding at the end the following new subparagraph3 7,h7 ,distributions of excess balances ,distributions from applicable retirement plans 7within the meaning of section #dji;,b7 to the extent such distributions during the taxable year do not exceed the amount 7if any7 by which-- 7i7 the amount determined under section #dji;,b7a77#b7 for the taxable year1 exceeds 7ii7 the applicable dollar amount under section #dji;,b7c77#b7 for the preceding taxable year4 4 7d7 ,reporting requirements ,section #fjdg of the ,internal ,revenue ,code of #aihf is amended by redesignating subsection 7h7 as subsection 7i7 and by inserting after subsection 7g7 the following3 7h7 ,reporting relating to aggregate contribution and balance limits on certain retirement plans ,the ,secretary shall require the plan administrator or trustee of an applicable retirement plan 7as defined in section #dji;,b7 to make such returns and reports to the ,secretary and participants and beneficiaries as are necessary to apply the aggregate limits on contributions imposed by section #dji;,b and the increases in minimum required distributions required by section #digd7;e74 ,if the account balance of a plan as of the close of a calendar year is not otherwise required under this title to be reported to a participant1 a beneficiary1 or the ,secretary1 such requirements shall include a requirement that the plan administrator or trustee shall notify the participant1 the beneficiary1 or the ,secretary of such account balance at such time and in such manner as the ,secretary may prescribe4 4 7e7 ,effective dates 7#a7 ,in general ,the amendments made by this section shall apply to taxable years beginning after ,december #ca1 #bjah4 7#b7 ,plan requirements ,the amendments made by subsection 7d7 shall apply to years beginning after ,december #ca1 #bjah4