,,ii  #aaf? ,,congress  #a/ ,session    
,s4 #bceb  ,,9 ,,! ,,s5ate ,,( ,,!      
,,unit$ ,,/ates  ,july #ca1 #bjai ,mr4  
,c>d9 7= himself & ,mr4 ,portman7       
introduc$ ! foll[+ bill2 :i* 0 read     
twice & ref]r$ to ! ,committee on       
,f9ance  ,a ,,bill  ,to am5d ! ,int]nal 
,rev5ue ,code ( #aihf to modify         
nondiscrim9ation rules to protect old]1 
long] s]vice p>ticipants 9 retirem5t    
plans4  #a4 ,%ort title ,?is ,act may be
 cit$ z ! ,retirem5t ,security          
,pres]vation ,act ( #bjai4  #b4         
,modification ( nondiscrim9ation rules  
to protect old]1 long] s]vice           
p>ticipants  7a7 ,9 g5]al ,section #dja 
( ! ,int]nal ,rev5ue ,code ( #aihf is   
am5d$--  7#a7 by r$esignat+ subsection  
7o7 z subsection 7p72 &  7#b7 by ins]t+ 
aft] subsection 7n7 ! foll[+ new        
subsection3  7o7 ,special rules = apply+
 nondiscrim9ation rules ,to protect     
old]1 long] s]vice & gr&fa!r$           
p>ticipants  7#a7 ,te/+ ( def9$ b5efit  
plans ) clos$ classes ( p>ticipants     

7,a7 ,b5efits1 rights1 or features      
provid$ to clos$ classes ,a def9$ b5efit
 plan :i* provides b5efits1 rights1 or  
features to a clos$ class ( p>ticipants 
%all n fail to satisfy ! requirem5ts (  
subsection 7a77#d7 by reason ( !        
composition ( su* clos$ class or !      
b5efits1 rights1 or features provid$ to 
su* clos$ class1 if--  7i7 = ! plan ye> 
z ( :i* ! class closes & ! #b succe$+   
plan ye>s1 su* b5efits1 rights1 &       
features satisfy ! requirem5ts (        
subsection 7a77#d7 7)\t reg>d to ?is    
subp>agraph b tak+ into acc\nt ! rules (
 subp>agraph 7,i771  7ii7 aft] ! date z 
( :i* ! class 0 clos$1 any plan am5dm5t 
:i* modifies ! clos$ class or ! b5efits1
 rights1 & features provid$ to su* clos$
 class does n discrim9ate significantly 
9 favor ( highly comp5sat$ employees1 & 
7iii7 ! class 0 clos$ be=e ,april #e1   
#bjag1 or ! plan is describ$ 9          
subp>agraph 7,c74  7,b7 ,aggregate te/+ 
) def9$ contribution plans p]mitt$ on a 
b5efits basis  7i7 ,9 g5]al ,= purposes 

( det]m9+ compliance ) subsection       
7a77#d7 & section #daj7;b71 a def9$     
b5efit plan describ$ 9 clause 7iii7 may 
be aggregat$ & te/$ on a b5efits basis )
 "o or m def9$ contribution plans1      
includ+ ) ! portion ( "o or m def9$     
contribution plans :i*--  7,i7 provides 
mat*+ contributions 7z def9$ 9          
subsection 7m77#d77;,a771  7,,ii7       
provides annuity contracts describ$ 9   
section #djc7;b7 :i* are pur*as$ ) mat*+
 contributions or nonelective           
contributions1 or  7,,iii7 consi/s ( an 
employee /ock own]%ip plan 7)9 ! mean+ (
 section #dige7;e77#g77 or a tax cr$it  
employee /ock own]%ip plan 7)9 ! mean+ (
 section #dji7;a774  7ii7 ,special rules
 = mat*+ contributions ,= purposes (    
clause 7i71 if a def9$ b5efit plan is   
aggregat$ ) a portion ( a def9$         
contribution plan provid+ mat*+         
contributions--  7,i7 su* def9$ b5efit  
plan mu/ also be aggregat$ ) any portion
 ( su* def9$ contribution plan :i*      
provides elective def]rals describ$ 9   

subp>agraph 7,a7 or 7,c7 ( section      
#djb7;g77#c71 &  7,,ii7 su* mat*+       
contributions %all be treat$ 9 ! same   
mann] z nonelective contributions1      
includ+ = purposes ( apply+ ! rules (   
subsection 7l74  7iii7 ,plans describ$  
,a def9$ b5efit plan is describ$ 9 ?is  
clause if-- 7,i7 ! plan provides b5efits
 to a clos$ class ( p>ticipants1  7,,ii7
 = ! plan ye> z ( :i* ! class closes & !
 #b succe$+ plan ye>s1 ! plan satisfies 
! requirem5ts ( section #daj7;b7 &      
subsection 7a77#d7 7)\t reg>d to ?is    
subp>agraph b tak+ into acc\nt ! rules (
 subp>agraph 7,i771  7,,iii7 aft] ! date
 z ( :i* ! class 0 clos$1 any plan      
am5dm5t :i* modifies ! clos$ class or ! 
b5efits provid$ to su* clos$ class does 
n discrim9ate significantly 9 favor (   
highly comp5sat$ employees1 &  7,,iv7 ! 
class 0 clos$ be=e ,april #e1 #bjag1 or 
! plan is describ$ 9 subp>agraph 7,c74  
7,c7 ,plans describ$ ,a plan is describ$
 9 ?is subp>agraph if1 tak+ into acc\nt 
any pr$ecessor plan--  7i7 su* plan has 

be5 9 effect = at lea/ #e ye>s z ( !    
date ! class is clos$1 &  7ii7 dur+ !   
#e-ye> p]iod prec$+ ! date ! class is   
clos$1 !re has n be5 a sub/antial       
increase 9 ! cov]age or value ( !       
b5efits1 rights1 or features describ$ 9 
subp>agraph 7,a7 or 9 ! cov]age or      
b5efits "u ! plan describ$ 9 subp>agraph
 7,b77iii7 7:i*ev] is applicable74  7,d7
 ,det]m9ation ( sub/antial increase =   
b5efits1 rights1 & features ,9 apply+   
subp>agraph 7,c77ii7 = purposes (       
subp>agraph 7,a77iii71 a plan %all be   
treat$ z hav+ _h a sub/antial increase 9
 cov]age or value ( ! b5efits1 rights1  
or features describ$ 9 subp>agraph 7,a7 
dur+ ! applicable #e-ye> p]iod only if1 
dur+ su* p]iod--  7i7 ! numb] (         
p>ticipants cov]$ by su* b5efits1       
rights1 or features on ! date su* p]iod 
ends is m ?an #ej p]c5t great] ?an !    
numb] ( su* p>ticipants on ! fir/ day ( 
! plan ye> 9 :i* su* p]iod began1 or    
7ii7 su* b5efits1 rights1 & features h  
be5 modifi$ by "o or m plan am5dm5ts 9  

su* a way t1 z ( ! date ! class is      
clos$1 ! value ( su* b5efits1 rights1 & 
features to ! clos$ class z a :ole is   
sub/antially great] ?an ! value z ( !   
fir/ day ( su* #e-ye> p]iod1 solely z a 
result ( su* am5dm5ts4  7,e7            
,det]m9ation ( sub/antial increase =    
aggregate te/+ on b5efits basis ,9      
apply+ subp>agraph 7,c77ii7 = purposes (
 subp>agraph 7,b77iii77,,iv71 a plan    
%all be treat$ z hav+ _h a sub/antial   
increase 9 cov]age or b5efits dur+ !    
applicable #e-ye> p]iod only if1 dur+   
su* p]iod--  7i7 ! numb] ( p>ticipants  
b5efitt+ "u ! plan on ! date su* p]iod  
ends is m ?an #ej p]c5t great] ?an !    
numb] ( su* p>ticipants on ! fir/ day ( 
! plan ye> 9 :i* su* p]iod began1 or    
7ii7 ! av]age b5efit provid$ to su*     
p>ticipants on ! date su* p]iod ends is 
m ?an #ej p]c5t great] ?an ! av]age     
b5efit provid$ on ! fir/ day ( ! plan   
ye> 9 :i* su* p]iod began4  7,f7 ,c]ta9 
employees disreg>d$ ,= purposes (       
subp>agraphs 7,d7 & 7,e71 any increase 9

 cov]age or value or 9 cov]age or       
b5efits1 :i*ev] is applicable1 :i* is   
attributable to su* cov]age & value or  
cov]age & b5efits provid$ to employees--
  7i7 :o became p>ticipants z a result (
 a m]g]1 acquisition1 or simil> ev5t :i*
 occurr$ dur+ ! #g-ye> p]iod prec$+ !   
date ! class is clos$1 or  7ii7 :o      
became p>ticipants by reason ( a m]g] ( 
! plan ) ano!r plan :i* _h be5 9 effect 
= at lea/ #e ye>s z ( ! date ( ! m]g]1  
%all be disreg>d$1 except t clause 7ii7 
%all apply = purposes ( subp>agraph 7,d7
 only if1 "u ! m]g]1 ! b5efits1 rights1 
or features "u #a plan are con=m$ to !  
b5efits1 rights1 or features ( ! o!r    
plan prospectively4  7,g7 ,rules relat+ 
to av]age b5efit ,= purposes (          
subp>agraph 7,e7-- 7i7 ! av]age b5efit  
provid$ to p>ticipants "u ! plan w be   
treat$ z hav+ rema9$ ! same betwe5 ! #b 
dates describ$ 9 subp>agraph 7,e77ii7 if
 ! b5efit =mula applicable to su*       
p>ticipants has n *ang$ betwe5 su*      
dates1 &  7ii7 if ! b5efit =mula        

applicable to "o or m p>ticipants "u !  
plan has *ang$ betwe5 su* #b dates1 !n !
 av]age b5efit "u ! plan %all be        
consid]$ to h increas$ by m ?an #ej     
p]c5t only if--  7,i7 ! total am\nt     
det]m9$ "u section #dcj7;b77#a77;,a77i7 
= all p>ticipants b5efitt+ "u ! plan = !
 plan ye> 9 :i* ! #e-ye> p]iod describ$ 
9 subp>agraph 7,e7 ends1 exce$s  7,,ii7 
! total am\nt det]m9$ "u section        
#dcj7;b77#a77;,a77i7 = all su*          
p>ticipants = su* plan ye>1 by us+ !    
b5efit =mula 9 effect = ea* su*         
p>ticipant = ! fir/ plan ye> 9 su*      
#e-ye> p]iod1  by m ?an #ej p]c5t4 ,9 ! 
case ( a ,,csec plan 7z def9$ 9 section 
#dad7y771 ! normal co/ ( ! plan 7z      
det]m9$ "u section #dcc7;j77#a77;,b77   
%all be us$ 9 lieu ( ! am\nt det]m9$ "u 
section #dcj7;b77#a77;,a77i74  7,h7     
,treatm5t z s+le plan ,= purposes (     
subp>agraphs 7,e7 & 7,g71 a plan        
describ$ 9 section #dac7;c7 %all be     
treat$ z a s+le plan r ?an z sep>ate    
plans ma9ta9$ by ea* employ] 9 ! plan4  

7,i7 ,special rules ,= purposes (       
subp>agraphs 7,a77i7 & 7,b77iii77,,ii71 
! foll[+ rules %all apply3 7i7 ,9 apply+
 section #daj7;b77#f77;,c71 ! clos+ ( ! 
class ( p>ticipants %all n be treat$ z a
 significant *ange 9 cov]age "u section 
#daj7;b77#f77;,c77i77,,ii74  7ii7 ,two  
or m plans %all n fail to be eligible to
 be aggregat$ & treat$ z a s+le plan    
solely by reason ( hav+ diff]5t plan    
ye>s4  7iii7 ,*anges 9 ! employee       
population %all be disreg>d$ to ! ext5t 
attributable to individuals :o become   
employees or cease to be employees1 aft]
 ! date ! class is clos$1 by reason ( a 
m]g]1 acquisition1 dive/iture1 or simil>
 ev5t4  7iv7 ,aggregation & all o!r te/+
 me?odologies o!rwise applicable "u     
subsection 7a77#d7 & section #daj7;b7   
may be tak5 into acc\nt4  ,! rule (     
clause 7ii7 %all also apply = purposes (
 det]m9+ :e!r plans to :i* subp>agraph  
7,b77i7 applies may be aggregat$ &      
treat$ z #a plan = purposes ( det]m9+   
:e!r su* plans meet ! requirem5ts (     

subsection 7a77#d7 & section #daj7;b74  
7,j7 ,spun-(f plans ,= purposes ( ?is   
p>agraph1 if a portion ( a def9$ b5efit 
plan describ$ 9 subp>agraph 7,a7 or     
7,b77iii7 is spun (f to ano!r employ] & 
! spun-(f plan cont9ues to satisfy !    
requirem5ts (--  7i7 subp>agraph 7,a77i7
 or 7,b77iii77,,ii71 :i*ev] is          
applicable1 if ! orig9al plan 0 /ill )9 
! #c-ye> p]iod describ$ 9 su*           
subp>agraph at ! "t ( ! sp9 (f1 &  7ii7 
subp>agraph 7,a77ii7 or                 
7,b77iii77,,iii71 :i*ev] is applicable1 
! treatm5t "u subp>agraph 7,a7 or 7,b7 (
 ! spun-(f plan %all cont9ue ) respect  
to su* o!r employ]4  7#b7 ,te/+ ( def9$ 
contribution plans  7,a7 ,te/+ on a     
b5efits basis ,a def9$ contribution plan
 %all be p]mitt$ to be te/$ on a b5efits
 basis if--  7i7 su* def9$ contribution 
plan provides make-:ole contributions to
 a clos$ class ( p>ticipants ^: accruals
 "u a def9$ b5efit plan h be5 r$uc$ or  
elim9at$1  7ii7 = ! plan ye> ( ! def9$  
contribution plan z ( :i* ! class       

eligible to receive su* make-:ole       
contributions closes & ! #b succe$+ plan
 ye>s1 su* clos$ class ( p>ticipants    
satisfies ! requirem5ts ( section       
#daj7;b77#b77;,a77i7 7det]m9$ by apply+ 
! rules ( p>agraph 7#a77;,i771  7iii7   
aft] ! date z ( :i* ! class 0 clos$1 any
 plan am5dm5t to ! def9$ contribution   
plan :i* modifies ! clos$ class or !    
allocations1 b5efits1 rights1 & features
 provid$ to su* clos$ class does n      
discrim9ate significantly 9 favor (     
highly comp5sat$ employees1 &  7iv7 !   
class 0 clos$ be=e ,april #e1 #bjag1 or 
! def9$ b5efit plan "u clause 7i7 is    
describ$ 9 p>agraph 7#a77;,c7 7z appli$ 
= purposes ( p>agraph                   
7#a77;,b77iii77,,iv774  7,b7            
,aggregation ) plans includ+ mat*+      
contributions  7i7 ,9 g5]al ,) respect  
to "o or m def9$ contribution plans     
describ$ 9 subp>agraph 7,a71 = purposes 
( det]m9+ compliance ) subsection       
7a77#d7 & section #daj7;b71 ! portion ( 
su* plans :i* provides make-:ole        

contributions or o!r nonelective        
contributions may be aggregat$ & te/$ on
 a b5efits basis ) ! portion ( "o or m  
o!r def9$ contribution plans :i*--  7,i7
 provides mat*+ contributions 7z def9$ 9
 subsection 7m77#d77;,a771  7,,ii7      
provides annuity contracts describ$ 9   
section #djc7;b7 :i* are pur*as$ ) mat*+
 contributions or nonelective           
contributions1 or  7,,iii7 consi/s ( an 
employee /ock own]%ip plan 7)9 ! mean+ (
 section #dige7;e77#g77 or a tax cr$it  
employee /ock own]%ip plan 7)9 ! mean+ (
 section #dji7;a774  7ii7 ,special rules
 = mat*+ contributions ,rules simil> to 
! rules ( p>agraph 7#a77;,b77ii7 %all   
apply = purposes ( clause 7i74  7,c7    
,special rules = te/+ def9$ contribution
 plan features provid+ mat*+            
contributions to c]ta9 old]1 long]      
s]vice p>ticipants ,9 ! case ( a def9$  
contribution plan :i* provides b5efits1 
rights1 or features to a clos$ class (  
p>ticipants ^: accruals "u a def9$      
b5efit plan h be5 r$uc$ or elim9at$1 !  

plan %all n fail to satisfy !           
requirem5ts ( subsection 7a77#d7 solely 
by reason ( ! composition ( ! clos$     
class or ! b5efits1 rights1 or features 
provid$ to su* clos$ class if ! def9$   
contribution plan & def9$ b5efit plan   
o!rwise meet ! requirem5ts ( subp>agraph
 7,a7 b = ! fact t ! make-:ole          
contributions "u ! def9$ contribution   
plan are made 9 :ole or 9 "p ?r\gh mat*+
 contributions4  7,d7 ,spun-(f plans ,= 
purposes ( ?is p>agraph1 if a portion ( 
a def9$ contribution plan describ$ 9    
subp>agraph 7,a7 or 7,c7 is spun (f to  
ano!r employ]1 ! treatm5t "u subp>agraph
 7,a7 or 7,c7 ( ! spun-(f plan %all     
cont9ue ) respect to ! o!r employ] if   
su* plan cont9ues to comply ) !         
requirem5ts ( clauses 7ii7 7if ! orig9al
 plan 0 /ill )9 ! #c-ye> p]iod describ$ 
9 su* clause at ! "t ( ! sp9 (f7 & 7iii7
 ( subp>agraph 7,a71 z det]m9$ =        
purposes ( subp>agraph 7,a7 or 7,c71    
:i*ev] is applicable4  7#c7 ,def9itions 
& special rule ,= purposes ( ?is        

subsection-- 7,a7 ,make-:ole            
contributions ,except z o!rwise provid$ 
9 p>agraph 7#b77;,c71 ! t]m make-:ole   
contributions means nonelective         
allocations = ea* employee 9 ! class :i*
 are reasonably calculat$1 9 a consi/5t 
mann]1 to replace "s or all ( !         
retirem5t b5efits :i* ! employee w\ld h 
receiv$ "u ! def9$ b5efit plan & any o!r
 plan or qualifi$ ca% or def]r$         
arrangem5t "u subsection 7k77#b7 if no  
*ange _h be5 made to su* def9$ b5efit   
plan & su* o!r plan or arrangem5t4 ,=   
purposes ( ! prec$+ s5t5ce1 consi/5cy   
%all n be requir$ ) respect to employees
 :o 7 subject to diff]5t b5efit =mulas  
"u ! def9$ b5efit plan4  7,b7 ,ref]5ces 
to clos$ class ( p>ticipants ,ref]5ces  
to a clos$ class ( p>ticipants & simil> 
ref]5ces to a clos$ class %all include  
arrangem5ts "u :i* "o or m classes (    
p>ticipants are clos$1 except t "o or m 
classes ( p>ticipants clos$ on diff]5t  
dates %all n be aggregat$ = purposes (  
det]m9+ ! date any su* class 0 clos$4   

7,c7 ,highly comp5sat$ employee ,! t]m  
highly comp5sat$ employee has ! mean+   
giv5 su* t]m 9 section #dad7q74  4  7b7 
,p>ticipation requirem5ts ,p>agraph     
7#bf7 ( section #dja7;a7 ( ! ,int]nal   
,rev5ue ,code ( #aihf is am5d$ by add+  
at ! end ! foll[+ new subp>agraph3  7,i7
 ,protect$ p>ticipants  7i7 ,9 g5]al ,a 
plan %all be deem$ to satisfy !         
requirem5ts ( subp>agraph 7,a7 if-- 7,i7
 ! plan is am5d$--  7aa7 to cease all   
b5efit accruals1 or  7bb7 to provide    
future b5efit accruals only to a clos$  
class ( p>ticipants1  7,,ii7 ! plan     
satisfies subp>agraph 7,a7 7)\t reg>d to
 ?is subp>agraph7 z ( ! effective date (
 ! am5dm5t1 &  7,,iii7 ! am5dm5t 0      
adopt$ be=e ,april #e1 #bjag1 or ! plan 
is describ$ 9 clause 7ii74  7ii7 ,plans 
describ$ ,a plan is describ$ 9 ?is      
clause if ! plan w\ld be describ$ 9     
subsection 7o77#a77;,c71 z appli$ =     
purposes ( subsection                   
7o77#a77;,b77iii77,,iv7 & by treat+ !   
effective date ( ! am5dm5t z ! date !   

class 0 clos$ = purposes ( subsection   
7o77#a77;,c74  7iii7 ,special rules ,=  
purposes ( clause 7i77,,ii71 9 apply+   
section #daj7;b77#f77;,c71 ! am5dm5ts   
describ$ 9 clause 7i7 %all n be treat$ z
 a significant *ange 9 cov]age "u       
section #daj7;b77#f77;,c77i77,,ii74     
7iv7 ,spun-(f plans ,= purposes ( ?is   
subp>agraph1 if a portion ( a plan      
describ$ 9 clause 7i7 is spun (f to     
ano!r employ]1 ! treatm5t "u clause 7i7 
( ! spun-(f plan %all cont9ue ) respect 
to ! o!r employ]4  4  7c7 ,effective    
date  7#a7 ,9 g5]al ,except z provid$ 9 
p>agraph 7#b71 ! am5dm5ts made by ?is   
section %all take effect on ! date ( !  
enactm5t ( ?is ,act1 )\t reg>d to :e!r  
any plan modifications ref]r$ to 9 su*  
am5dm5ts are adopt$ or effective be=e1  
on1 or aft] su* date ( enactm5t4  7#b7  
,special rules  7,a7 ,election ( e>li]  
application ,at ! election ( ! plan     
sponsor1 ! am5dm5ts made by ?is section 
%all apply to plan ye>s beg9n+ aft]     
,decemb] #ca1 #bjac4  7,b7 ,clos$       

classes ( p>ticipants ,= purposes (     
p>agraphs 7#a77;,a77iii71               
7#a77;,b77iii77,,iv71 & 7#b77;,a77iv7 ( 
section #dja7o7 ( ! ,int]nal ,rev5ue    
,code ( #aihf 7z add$ by ?is section71 a
 clos$ class ( p>ticipants %all be      
treat$ z be+ clos$ be=e ,april #e1      
#bjag1 if ! plan sponsor's int5tion to  
create su* clos$ class is reflect$ 9    
=mal writt5 docum5ts & communicat$ to   
p>ticipants be=e su* date4  7,c7 ,c]ta9 
po/-enactm5t plan am5dm5ts ,a plan %all 
n be treat$ z fail+ to be eligible = !  
application ( section #dja7o77#a77;,a71 
#dja7o77#a77;,b77iii71 or #dja7;a77#bf7 
( su* ,code 7z add$ by ?is section7 to  
su* plan solely because 9 ! case (--    
7i7 su* section #dja7o77#a77;,a71 ! plan
 0 am5d$ be=e ! date ( ! enactm5t ( ?is 
,act to elim9ate "o or m b5efits1       
rights1 or features1 & is fur!r am5d$   
aft] su* date ( enactm5t to provide su* 
previ\sly elim9at$ b5efits1 rights1 or  
features to a clos$ class ( p>ticipants1
 or  7ii7 su* section                   

#dja7o77#a77;,b77iii7 or section        
#dja7;a77#bf71 ! plan 0 am5d$ be=e !    
date ( ! enactm5t ( ?is ,act to cease   
all b5efit accruals1 & is fur!r am5d$   
aft] su* date ( enactm5t to provide     
b5efit accruals to a clos$ class (      
p>ticipants4  ,any su* section %all only
 apply if ! plan o!rwise meets !        
requirem5ts ( su* section & 9 apply+ su*
 section1 ! date ! class ( p>ticipants  
is clos$ %all be ! effective date ( !   
lat] am5dm5t4