Women's Pension Protection Act of 2003

        [Congressional Bills 108th Congress]
[From the U.S. Government Publishing Office]
[S. 1617 Introduced in Senate (IS)]

108th CONGRESS
1st Session
S. 1617

To amend the Employee Retirement Income Security Act of 1974 and the
Internal Revenue Code of 1986 to provide comprehensive pension
protection for women.

_______________________________________________________________________

IN THE SENATE OF THE UNITED STATES

September 15, 2003

Mr. Kennedy (for himself and Ms. Snowe) introduced the following bill;
which was read twice and referred to the Committee on Finance

_______________________________________________________________________

A BILL

To amend the Employee Retirement Income Security Act of 1974 and the
Internal Revenue Code of 1986 to provide comprehensive pension
protection for women.

Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

(a) Short Title.--This Act may be cited as the ``Women's Pension
Protection Act of 2003''.
(b) Table of Contents.--

Sec. 1. Short title; table of contents.
TITLE I--SPOUSAL CONSENT REQUIRED FOR DISTRIBUTIONS FROM DEFINED
CONTRIBUTION PLANS

Sec. 101. Application of joint and survivor annuity rules to all
defined contribution plans.
TITLE II--DIVISION OF PENSION BENEFITS UPON DIVORCE

Sec. 201. Regulations on time and order of issuance of domestic
relations orders.
Sec. 202. Former spouses treated as surviving spouses in certain cases.
TITLE III--PROTECTION OF RIGHTS OF FORMER SPOUSES TO PENSION BENEFITS
UNDER CERTAIN GOVERNMENT AND GOVERNMENT-SPONSORED RETIREMENT PROGRAMS

Subtitle A--Civil Service Retirement

Sec. 301. Survivor annuities for widows, widowers, and former spouses
of Federal employees who die before
attaining age for deferred annuity under
civil service retirement system.
Sec. 302. Court orders relating to Federal retirement benefits for
former spouses of Federal employees.
Sec. 303. Order of precedence for disposition of amounts remaining in
the thrift savings account of a Federal
employee (or former employee) who dies
before making an effective election
controlling such disposition.
Subtitle B--Railroad Retirement

Sec. 311. Entitlement of divorced spouses to railroad retirement
annuities independent of actual entitlement
of employee.
Sec. 312. Extension of tier II railroad retirement benefits to
surviving former spouses pursuant to
divorce agreements.
TITLE IV--MODIFICATIONS OF JOINT AND SURVIVOR ANNUITY REQUIREMENTS

Sec. 401. Modifications of joint and survivor annuity requirements.
TITLE V--PLAN AMENDMENTS

Sec. 501. Provisions relating to plan amendments.

TITLE I--SPOUSAL CONSENT REQUIRED FOR DISTRIBUTIONS FROM DEFINED
CONTRIBUTION PLANS

SEC. 101. APPLICATION OF JOINT AND SURVIVOR ANNUITY RULES TO ALL
DEFINED CONTRIBUTION PLANS.

(a) Application to All Defined Contribution Plans.--
(1) Amendments to erisa.--
(A) In general.--Section 205(a) of the Employee
Retirement Income Security Act of 1974 (29 U.S.C.
1055(a)) is amended by striking ``to which this section
applies''.
(B) Conforming amendments.--
(i) Section 205(b) of such Act (29 U.S.C.
1055(b)) is amended to read as follows:
``(b)(1)(A) In the case of--
``(i) a tax credit employee stock ownership plan (as
defined in section 409(a) of the Internal Revenue Code of
1986), or
``(ii) an employee stock ownership plan (as defined in
section 4975(e)(7) of such Code),
subsection (a) shall not apply to that portion of the employee's
accrued benefit to which the requirements of section 409(h) of such
Code apply.
``(B) Subparagraph (A) shall apply with respect to any participant
only if--
``(i) such plan provides that the participant's
nonforfeitable accrued benefit (reduced by any security
interest held by the plan by reason of a loan outstanding to
such participant) is payable in full, on the death of the
participant, to the participant's surviving spouse (or, if
there is no surviving spouse or the surviving spouse consents
in the manner required under subsection (c)(2), to a designated
beneficiary),
``(ii) such participant does not elect the payment of
benefits in the form of a life annuity, and
``(iii) with respect to such participant, such plan is not
a direct or indirect transferee (in a transfer after December
31, 1984) of a plan to which, at the time of the transfer,
subsection (a) applied (or to which this clause applied with
respect to the participant).
Clause (iii) shall apply only with respect to the transferred assets
(and income therefrom) if the plan separately accounts for such assets
and any income therefrom. A plan shall not be treated as failing to
meet the requirements of this subparagraph merely because the plan
provides that benefits will not be payable to the surviving spouse of
the participant unless the participant and such spouse had been married
throughout the 1-year period ending on the earlier of the participant's
annuity starting date or the date of the participant's death.
``(2) This section shall not apply to a plan which the Secretary of
the Treasury or his delegate has determined is a plan described in
section 404(c) of the Internal Revenue Code of 1986 (or a continuation
thereof) in which participation is substantially limited to individuals
who, before January 1, 1976, ceased employment covered by the plan.''
(ii) Section 205(e)(2) of such Act (20
U.S.C. 1055(e)(2)) is amended--
(I) by striking ``individual
account plan or participant described
in subparagraph (B) or (C) of
subsection (b)(1)'' and inserting
``individual account plan to which this
section applies, or any participant
described in subsection (b)(1)(B)'',
and
(II) by striking ``50 percent of''.
(2) Amendments to internal revenue code.--
(A) In general.--Section 401(a)(11)(A) of the
Internal Revenue Code of 1986 (relating to requirement
of joint and survivor annuity and preretirement
survivor annuity) is amended by striking the matter
preceding clause (i) and inserting:
``(A) In general.--Except as provided in section
417 and subparagraph (B), a trust forming part of a
plan shall not constitute a qualified trust under this
section unless such plan provides--''.
(B) Conforming amendments.--
(i) Section 401(a)(11) of such Code is
amended by striking subparagraphs (B), (C), and
(D) and inserting the following new
subparagraphs:
``(B) Exception for certain esop benefits.--
``(i) In general.--In the case of--
``(I) a tax credit employee stock
ownership plan (as defined in section
409(a)), or
``(II) an employee stock ownership
plan (as defined in section
4975(e)(7)),
subparagraph (A) shall not apply to that
portion of the employee's accrued benefit to
which the requirements of section 409(h) apply.
``(ii) Nonforfeitable benefit must be paid
in full, etc.--In the case of any participant,
clause (i) shall apply only if--
``(I) such plan provides that the
participant's nonforfeitable accrued
benefit (reduced by any security
interest held by the plan by reason of
a loan outstanding to such participant)
is payable in full, on the death of the
participant, to the participant's
surviving spouse (or, if there is no
surviving spouse or the surviving
spouse consents in the manner required
under section 417(a)(2), to a
designated beneficiary),
``(II) such participant does not
elect the payment of benefits in the
form of a life annuity, and
``(III) with respect to such
participant, such plan is not a direct
or indirect transferee (in a transfer
after December 31, 1984) of a plan to
which, at the time of the transfer,
subparagraph (A) applied (or to which
this subclause applied with respect to
the participant).
Subclause (III) shall apply only with respect
to the transferred assets (and income
therefrom) if the plan separately accounts for
such assets and any income therefrom.
``(C) Special rule where participant and spouse
married less than 1 year.--A plan shall not be treated
as failing to meet the requirements of subparagraph
(B)(ii) merely because the plan provides that benefits
will not be payable to the surviving spouse of the
participant unless the participant and such spouse had
been married throughout the 1-year period ending on the
earlier of the participant's annuity starting date or
the date of the participant's death.''
(ii) Section 401(a)(11) of such Code is
amended by redesignating subparagraphs (E) and
(F) as subparagraphs (D) and (E), respectively.
(iii) Section 417(c)(2) of such Code is
amended--
(I) by striking ``defined
contribution plan or participant
described in clause (ii) or (iii) of
section 401(a)(11)(B)'' and inserting
``defined contribution plan to which
section 401(a)(11) applies, or any
participant described in section
401(a)(11)(B)(ii),''; and
(II) by striking ``50 percent of''.
(b) Special Rules Relating to Defined Contribution Plans.--
(1) Amendments to erisa.--
(A) Loans.--Section 205(c)(4) of the Employee
Retirement Income Security Act of 1974 (29 U.S.C.
1055(c)(4)) is amended by adding at the end the
following flush sentence:
``This paragraph shall not apply to an individual account plan other
than a plan which is subject to the funding standards of section 302.''
(B) Hardship withdrawals.--Section 205(c) of such
Act (29 U.S.C. 1055(c)) is amended by adding at the end
the following new paragraph:
``(9) Nothing in this section shall be construed as requiring an
individual account plan to obtain the consent of the spouse of a
participant before making a hardship distribution to the participant.''
(C) Payments in lieu of annuity.--Section 205 of
such Act (29 U.S.C. 1055) is amended by redesignating
subsection (l) as subsection (m) and by inserting after
subsection (k) the following new subsection:
``(l)(1) For purposes of this section, an individual account plan
required to provide a qualified joint and survivor annuity or a
qualified preretirement survivor annuity shall be treated as
providing--
``(A) a qualified joint and survivor annuity if the plan
provides that the account balance of the participant to which
the participant had a nonforfeitable right (within the meaning
of section 203) will be distributed in a series of periodic
payments (determined in accordance with tables prescribed by
the Secretary of the Treasury) over the joint life expectancy
of the participant and the participant's spouse, and
``(B) a qualified preretirement survivor annuity if the
plan provides that the account balance of the participant (as
of the date of death) to which the participant had a
nonforfeitable right (as so defined) will be distributed to the
surviving spouse, at the option of the spouse, in either such a
series of periodic payments over the life expectancy of the
surviving spouse or any other form of benefit payment that the
plan provides.
A plan shall not be treated as failing to meet the requirements of
subparagraph (A) merely because the plan provides that a participant
may, with the consent of the spouse, elect at any time to have the plan
pay all of the remaining portion of the account balance in any other
form of benefit payment that the plan provides.
``(2) In the case of a termination of an individual account plan
that provides for payments described in paragraph (1), such plan shall
be treated as meeting the requirements of paragraph (1) only if, for
each participant or surviving spouse eligible to receive such payments
who is not paid the remaining account balance in a lump sum, the plan
administrator purchases from an insurer an irrevocable commitment to
provide--
``(A) the payments described in paragraph (1), or
``(B) either--
``(i) a qualified joint and survivor annuity (and,
if applicable, a qualified preretirement survivor
annuity) in the case of a participant, or
``(ii) a single life annuity or qualified
preretirement survivor annuity, whichever is
applicable, in the case of a surviving spouse of a
participant.
``(3) The requirements of paragraph (2) are met with respect to a
purchase only if, within a reasonable time after the effective date of
the purchase, the individual entitled to payments from the insurer is
provided a copy of the insurance contract or a certificate showing the
insurer's name and address and clearly stating the insurer's obligation
to provide the required payments.''.
(D) Conforming amendment.--Section 206 of such Act
(29 U.S.C. 1056) is amended by adding at the end the
following:
``(g) Final Distributions From Terminated Individual Account
Plans.--In the case of an individual account plan which provides for
payments described in section 205(l)(1), the plan shall provide that,
upon termination of such plan, benefits of married participants and
surviving spouses shall be paid in accordance with section
205(l)(2).''.
(2) Amendments to internal revenue code.--
(A) Loans.--Section 417(a)(4) of the Internal
Revenue Code of 1986 is amended by adding at the end
the following flush sentence:
``This paragraph shall not apply to a defined contribution plan
other than a plan which is subject to the funding standards of
section 412.''
(B) Hardship withdrawals.--Section 417(a) of such
Code is amended by adding at the end the following new
paragraph:
``(8) Hardship distributions.--Nothing in this section or
section 401(a)(11) shall be construed as requiring a defined
contribution plan to obtain the consent of the spouse of a
participant before making a hardship distribution to the
participant.''
(C) Payments in lieu of annuity.--Section 417 of
such Code (relating to definitions and special rules
for purposes of minimum survivor annuity requirements)
is amended by adding at the end the following new
subsection:
``(g) Special Rules for Defined Contribution Plans.--For purposes
of this section and section 401(a)(11)--
``(1) Payments in lieu of annuities.--A defined
contribution plan required to provide a qualified joint and
survivor annuity or a qualified preretirement survivor annuity
shall be treated as providing--
``(A) a qualified joint and survivor annuity if the
plan provides that the account balance of the
participant to which the participant had a
nonforfeitable right (within the meaning of section
411(a)) will be distributed in a series of periodic
payments (determined in accordance with tables
prescribed by the Secretary) over the joint life
expectancy of the participant and the participant's
spouse, and
``(B) a qualified preretirement survivor annuity if
the plan provides that the account balance of the
participant (as of the date of death) to which the
participant had a nonforfeitable right (as so defined)
will be distributed to the surviving spouse, at the
option of the spouse, in either such a series of
periodic payments over the life expectancy of the
surviving spouse or any other form of benefit payment
that the plan provides.
A plan shall not be treated as failing to meet the requirements
of subparagraph (A) merely because the plan provides that a
participant may, with the consent of the spouse, elect at any
time to have the plan pay all of the remaining portion of the
account balance in any other form of benefit payment that the
plan provides.
``(2) Terminating plans.--In the case of a termination of a
defined contribution plan that provides for payments described
in paragraph (1), such plan shall be treated as meeting the
requirements of paragraph (1) only if, for each participant or
surviving spouse eligible to receive such payments who is not
paid the remaining account balance in a lump sum, the plan
administrator purchases from an insurer an irrevocable
commitment to provide--
``(A) the payments described in paragraph (1), or
``(B) either--
``(i) a qualified joint and survivor
annuity (and, if applicable, a qualified
preretirement survivor annuity) in the case of
a participant, or
``(ii) a single life annuity or qualified
preretirement survivor annuity, whichever is
applicable, in the case of a surviving spouse
of a participant.
``(3) Notice.--The requirements of paragraph (2) are met
with respect to a purchase only if, within a reasonable time
after the effective date of the purchase, the individual
entitled to payments from the insurer is provided a copy of the
insurance contract or a certificate showing the insurer's name
and address and clearly stating the insurer's obligation to
provide the required payments.''.
(D) Conforming amendment.--Section 401(a) of such
Code (relating to requirements for a qualified trust)
is amended by inserting after paragraph (34) the
following new paragraph:
``(35) Final distributions from terminated defined
contribution plans.--In the case of a defined contribution plan
which provides for payments described in section 417(g)(1), a
trust forming part of such plan shall not be treated as failing
to constitute a qualified trust under this section merely
because the pension plan of which such trust is a part pays,
upon its termination, benefits in accordance with section
417(g)(2).''
(c) Transfers Between Plans.--
(1) Amendment to erisa.--Section 205(c) of the Employee
Retirement Income Security Act of 1974 (29 U.S.C. 1055(c)), as
amended by this Act, is amended by adding at the end the
following new paragraph:
``(10) Nothing in this section shall be treated as requiring a plan
to obtain the consent of the spouse of the participant before making a
direct trustee-to-trustee transfer of any portion of the balance to the
credit of the participant to another pension plan if the other plan is
a plan to which this section applies.''
(2) Amendment to internal revenue code.--Section 417(a) of
the Internal Revenue Code of 1986, as amended by this Act, is
amended by adding at the end the following new paragraph:
``(9) Transfers.--Nothing in this section or section
401(a)(11) shall be treated as requiring a plan to obtain the
consent of the spouse of the participant before making a direct
trustee-to-trustee transfer of any portion of the balance to
the credit of the participant to another plan if the other plan
is a plan to which this section and section 401(a)(11) apply.''
(d) Effective Dates.--
(1) In general.--Except as provided in paragraph (2), the
amendments made by this section shall apply to plan years
beginning after December 31, 2003.
(2) Special rule for collectively bargained plans.--In the
case of a plan maintained pursuant to 1 or more collective
bargaining agreements between employee representatives and 1 or
more employers ratified on or before the date of the enactment
of this Act the amendments made by this section shall not, in
the case of employees covered by any such agreement, apply to
plan years beginning before the earlier of--
(A) the later of--
(i) January 1, 2004, or
(ii) the date on which the last of such
collective bargaining agreements terminates
(determined without regard to any extension
thereof after the date of enactment of this
Act), or
(B) January 1, 2005.
(3) 1 hour of service requirement.--The amendments made by
this section shall apply only in the case of participants who
have at least 1 hour of service under the plan on or after the
date of the enactment of this Act or who have at least 1 hour
of paid leave on or after such date.

TITLE II--DIVISION OF PENSION BENEFITS UPON DIVORCE

SEC. 201. REGULATIONS ON TIME AND ORDER OF ISSUANCE OF DOMESTIC
RELATIONS ORDERS.

Not later than one year after the date of the enactment of this
Act, the Secretary of the Treasury shall issue regulations under
section 206(d)(3) of the Employee Retirement Security Act of 1974 and
section 414(p) of the Internal Revenue Code of 1986 which clarify
that--
(1) a domestic relations order otherwise meeting the
requirements to be a qualified domestic relations order,
including the requirements of section 206(d)(3)(D) of such Act
and section 414(p)(3) of such Code, shall not fail to be
treated as a qualified domestic relations order solely
because--
(A) the order is issued after, or revises, another
domestic relations order or qualified domestic
relations order; or
(B) of the time at which it is issued; and
(2) any order described in paragraph (1) shall be subject
to the same requirements and protections which apply to
qualified domestic relations orders, including the provisions
of section 206(d)(3)(H) of such Act and section 414(p)(7) of
such Code.

SEC. 202. FORMER SPOUSES TREATED AS SURVIVING SPOUSES IN CERTAIN CASES.

(a) Amendment to ERISA.--Section 205 of the Employee Retirement
Income Security Act of 1974 (29 U.S.C. 1055), as amended by this Act,
is amended by redesignating subsection (m) as subsection (n) and by
inserting after subsection (l) the following new subsection:
``(m)(1)(A) For purposes of this section, a former spouse to whom
this subsection applies shall, upon the death of the participant to
whom the former spouse was married, be entitled to receive a qualified
joint and survivor annuity or qualified preretirement survivor annuity
in the same manner, and to the same extent, as if the former spouse
were the surviving spouse of the participant.
``(B) This subsection applies to a former spouse of a participant
in a plan if--
``(i) the plan is a defined benefit plan or an individual
account plan subject to the funding standards under section
302,
``(ii) an election by the former spouse to waive the
benefits of this section was not in effect during the period
the participant was covered by the plan or at the time of the
dissolution of the marriage,
``(iii) there is no domestic relations order which
specifically provides that the survivor benefits under the plan
were considered by the participant and the former spouse and
that the survivor benefits were expressly awarded, denied, or
waived by the former spouse, and
``(iv) the requirements of either paragraph (2) or (3) are
met with respect to the participant.
``(2) In the case of a qualified joint and survivor annuity, the
requirements of this paragraph are met with respect to a participant if
the participant and the former spouse were married on the annuity
starting date and--
``(A) the participant's annuity was reduced in order to
provide a qualified joint and survivor annuity under this
section, or
``(B) the participant was receiving a subsidized annuity
described in subsection (c)(5).
``(3) In the case of a qualified preretirement survivor annuity,
the requirements of this paragraph are met with respect to a
participant if the participant--
``(A) was married to the former spouse for at least 1 year
during the period the participant was covered by the plan,
``(B) did not remarry at any time following the dissolution
of the marriage to the former spouse, and
``(C) did not make a subsequent beneficiary designation at
any time after dissolution of the marriage to the former
spouse, and the plan does not provide for the payment of an
equivalent or greater benefit to a default beneficiary.
``(4)(A) This subsection shall not apply to a former spouse unless
the former spouse notifies the plan of possible eligibility for a
benefit under this subsection within one year of the participant's
death or one year after the effective date of this subsection,
whichever is later, and provides such information as may be necessary
to establish each element of eligibility.
``(B) The plan may waive the one-year requirement under this
paragraph where the failure to waive such requirement would be against
equity or good conscience, including casualty, disaster, or other
events beyond the reasonable control of the individual subject to such
requirement.
``(C) Payments to a former spouse under this subsection shall not
be made before the earliest date the participant would have been
eligible to receive a retirement benefit under the plan.
``(D) Any payments to a former spouse pursuant to this subsection
shall be prospective only, beginning from the date the former spouse
notifies the plan of the former spouse's potential eligibility for
benefits under this subsection.
``(E) In making determinations under this subsection, the plan may
reasonably rely on the validity of marriage certificates, divorce
decrees, death certificates, and other documentation such as obituaries
and affidavits, and need not independently authenticate their validity.
Any plan fiduciary that in good faith pays a qualified preretirement
survivor annuity benefit to a former spouse in accordance with this
subsection shall be discharged from liability to any other claimant.
``(F) In the event that the plan makes payments to a former spouse
under this section, and a surviving spouse or another former spouse
comes forward and establishes that the participant had remarried after
dissolution of the marriage to the former spouse who is receiving
benefits, the plan shall cease payments to that former spouse. If the
plan has evidence that the former spouse's representations to the plan
on the participant's remarriage status were not in good faith, the plan
may seek repayment of any amounts paid. If the plan determines that the
participant was legally married at the time of death, it shall make
payments on a prospective basis only to that surviving spouse.''
(b) Amendment to Internal Revenue Code.--Section 417 of the
Internal Revenue Code of 1986 (relating to definitions and special
rules for purposes of minimum survivor annuity requirements), as
amended by this Act, is amended by adding at the end the following new
subsection:
``(h) Treatment of Certain Former Spouses.--
``(1) In general.--For purposes of this section and section
401(a)(11), a former spouse to whom this subsection applies
shall, upon the death of the participant to whom the former
spouse was married, be entitled to receive a qualified joint
and survivor annuity or qualified preretirement survivor
annuity in the same manner, and to the same extent, as if the
former spouse were the surviving spouse of the participant.
``(2) Application.--This subsection applies to a former
spouse of a participant in a plan if--
``(A) the plan is a defined benefit plan or a
defined contribution plan subject to the funding
standards under section 412,
``(B) an election by the former spouse to waive the
benefits of this section was not in effect during the
period the participant was covered by the plan or at
the time of the dissolution of the marriage,
``(C) there is no domestic relations order which
specifically provides that the survivor benefits under
the plan were considered by the participant and the
former spouse and that the survivor benefits were
expressly awarded, denied, or waived by the former
spouse, and
``(D) the requirements of either paragraph (3) or
(4) are met with respect to the participant.
``(3) Qualified Joint and Survivor Annuity.--In the case of
a qualified joint and survivor annuity, the requirements of
this paragraph are met with respect to a participant if the
participant and the former spouse were married on the annuity
starting date and--
``(A) the participant's annuity was reduced in
order to provide a qualified joint and survivor annuity
under this section, or
``(B) the participant was receiving a subsidized
annuity described in section 417(a)(5).
``(4) Qualified Preretirement Survivor Annuity.--In the
case of a qualified preretirement survivor annuity, the
requirements of this paragraph are met with respect to a
participant if the participant--
``(A) was married to the former spouse for at least
1 year during the period the participant was covered by
the plan,
``(B) did not remarry at any time following the
dissolution of the marriage to the former spouse, and
``(C) did not make a subsequent beneficiary
designation at any time after dissolution of the
marriage to the former spouse, and the plan does not
provide for the payment of an equivalent or greater
benefit to a default beneficiary.
``(5) Other rules.--
``(A) Notice.--
``(i) In general.--This subsection shall
not apply to a former spouse unless the former
spouse notifies the plan of the former spouse's
eligibility under this subsection within one
year of the participant's death or one year
after the effective date of this subsection,
whichever is later, and provides such
information as may be required to establish
each element of eligibility.
``(ii) Waiver.--The plan may waive the one-
year requirement under clause (i) where the
failure to waive such requirement would be
against equity or good conscience, including
casualty, disaster, or other events beyond the
reasonable control of the individual subject to
such requirement.
``(B) Time for payment.--Payments to a former
spouse under this subsection shall not be made before
the earliest date the participant would have been
eligible to receive a retirement benefit under the
plan.
``(C) Prospective payments.--Payments to a former
spouse under this subsection shall be prospective only,
beginning from the date the former spouse notifies the
plan of the former spouse's potential eligibility for
benefits under this subsection.
``(D) Reliance.--In making determinations under
this subsection, the plan may reasonably rely on the
validity of marriage certificates, divorce decrees,
death certificates, and other documentation such as
obituaries and affidavits, and need not independently
authenticate their validity. Any plan fiduciary that in
good faith pays a qualified preretirement survivor
annuity to a former spouse under this subsection shall
be discharged from liability to any other claimant.
``(E) Subsequent claims.--In the event that the
plan makes payments to a former spouse under this
section, and a surviving spouse or another former
spouse comes forward and establishes that the
participant had remarried after dissolution of the
marriage to the former spouse who is receiving
benefits, the plan shall cease payments to that former
spouse. If the plan has evidence that the former
spouse's representations to the plan on the
participant's remarriage status were not in good faith,
the plan may seek repayment of any amounts paid. If the
plan determines that the participant was legally
married at the time of death, it shall make payments on
a prospective basis only to that surviving spouse.''
(c) Effective Dates.--
(1) In general.--Except as provided in paragraph (2), the
amendments made by this subsection shall apply to plan years
after December 31, 2003.
(2) Special rule for collectively bargained plans.--In the
case of a plan maintained pursuant to 1 or more collective
bargaining agreements between employee representatives and 1 or
more employers ratified on or before the date of the enactment
of this Act, the amendments made by this section shall not, in
the case of employees covered by any such agreement, apply to
benefits which are payable (without regard to when the
participant died) in plan years before the earlier of--
(A) the later of January 1, 2004, or the date on
which the last of such collective bargaining agreements
terminates (determined without regard to any extension
thereof after the date of enactment of this Act), or
(B) January 1, 2005.

TITLE III--PROTECTION OF RIGHTS OF FORMER SPOUSES TO PENSION BENEFITS
UNDER CERTAIN GOVERNMENT AND GOVERNMENT-SPONSORED RETIREMENT PROGRAMS

Subtitle A--Civil Service Retirement

SEC. 301. SURVIVOR ANNUITIES FOR WIDOWS, WIDOWERS, AND FORMER SPOUSES
OF FEDERAL EMPLOYEES WHO DIE BEFORE ATTAINING AGE FOR
DEFERRED ANNUITY UNDER CIVIL SERVICE RETIREMENT SYSTEM.

(a) Benefits for Widow or Widower.--Section 8341(f) of title 5,
United States Code, is amended--
(1) in the matter preceding paragraph (1)--
(A) by inserting ``a former employee separated from
the service with title to deferred annuity from the
Fund dies before having established a valid claim for
annuity and is survived by a spouse, or if'' before ``a
Member''; and
(B) by inserting ``of such former employee or
Member'' after ``the surviving spouse'';
(2) in paragraph (1)--
(A) by inserting ``former employee or'' before
``Member commencing''; and
(B) by inserting ``former employee or'' before
``Member dies''; and
(3) in the undesignated sentence following paragraph (2)--
(A) in the matter preceding subparagraph (A), by
inserting ``former employee or'' before ``Member''; and
(B) in subparagraph (B), by inserting ``former
employee or'' before ``Member''.
(b) Benefits for Former Spouse.--Section 8341(h) of title 5, United
States Code, is amended--
(1) in paragraph (1), by adding after the first sentence
``Subject to paragraphs (2) through (5) of this subsection, a
former spouse of a former employee who dies after having
separated from the service with title to a deferred annuity
under section 8338(a) but before having established a valid
claim for annuity is entitled to a survivor annuity under this
subsection, if and to the extent expressly provided for in an
election under section 8339(j)(3) of this title, or in the
terms of any decree of divorce or annulment or any court order
or court-approved property settlement agreement incident to
such decree.''; and
(2) in paragraph (2)--
(A) in subparagraph (A)(ii), by striking ``or
annuitant,'' and inserting ``annuitant, or former
employee''; and
(B) in subparagraph (B)(iii), by inserting ``former
employee or'' before ``Member''.
(c) Protection of Survivor Benefit Rights.--Section 8339(j)(3) of
title 5, United States Code, is amended by inserting at the end the
following: ``The Office shall provide by regulation for the application
of this subsection to the widow, widower, or surviving former spouse of
a former employee who dies after having separated from the service with
title to a deferred annuity under section 8338(a) but before having
established a valid claim for annuity.''.
(d) Effective Date.--The amendments made by this section shall take
effect on the date of the enactment of this Act and shall apply only in
the case of a former employee who dies on or after such date.

SEC. 302. COURT ORDERS RELATING TO FEDERAL RETIREMENT BENEFITS FOR
FORMER SPOUSES OF FEDERAL EMPLOYEES.

(a) Civil Service Retirement System.--
(1) In general.--Section 8345(j) of title 5, United States
Code, is amended--
(A) by redesignating paragraph (3) as paragraph
(4); and
(B) by inserting after paragraph (2) the following:
``(3)(A) Except as provided in this paragraph, a court
decree, court order, property settlement, or similar process
referred to under paragraph (1)(A) shall not be treated as
failing to meet the requirements of such paragraph solely
because it authorizes payment of benefits to be made to the
former spouse of the employee or Member before the employee or
Member begins to receive payment of benefits.
``(B) Subparagraph (A) shall only apply if the payment of
benefits--
``(i) are not required to be made before the date
on which the employee or Member attains (or would have
attained) the earliest retirement age; and
``(ii) are required to be made as if the employee
or Member had retired on the date on which such payment
is to begin, but taking into account only the present
value of the benefits as calculated on the basis of the
employee's or Member's service at the time the former
spouse begins collecting benefits.
``(C) For purposes of this paragraph, the term `earliest
retirement age' means the date on which the employee or Member
is entitled to an annuity under this chapter (without regard to
whether the employee or Member separated from service or made
any required election).
``(D) For purposes of this paragraph, former employees or
Members shall be treated as employees or Members.
``(E)(i) The Office of Personnel Management shall make such
adjustments as are necessary to the benefits of a former spouse
under this paragraph to reflect any increase in creditable
service that affects the benefit of the former spouse and that
occurs at the time the employee or Member actually retires.
``(ii) To ensure that the total of all benefits payable
under this chapter (other than benefits based on participation
in the Thrift Savings Plan) based on the service of an employee
or Member do not actuarially exceed all benefits which could
otherwise be payable under section 8339, the Office of
Personnel Management may make an adjustment in the payment of
benefits to--
``(I) a former spouse under this paragraph; or
``(II) the employee or Member.
Such actuarial value shall in no event be less than the present
value determined under subparagraph (B).''
(b) Federal Employees Retirement System.--Section 8467 of title 5,
United States Code, is amended--
(1) by redesignating subsection (c) as subsection (d); and
(2) by inserting after subsection (b) the following:
``(c)(1) Except as provided in this subsection, a court decree,
court order, property settlement, or similar process referred to under
subsection (a)(1) shall not be treated as failing to meet the
requirements of such subsection solely because it authorizes payment of
benefits to be made to the former spouse of the employee or Member
before the employee or Member begins to receive payment of benefits.
``(2) Paragraph (1) shall only apply if the payment of benefits--
``(A) are not required to be made before the date on which
the employee or Member attains (or would have attained) the
earliest retirement age; and
``(B) are required to be made as if the employee or Member
had retired on the date on which such payment is to begin, but
taking into account only the present value of the benefits as
calculated on the basis of the employee's or Member's service
at the time the former spouse begins collecting benefits.
``(3) For purposes of this subsection, the term `earliest
retirement age' means the date on which the employee or Member is
entitled to an annuity under this chapter (without regard to whether
the employee or Member separated from service or made any required
election).
``(4) For purposes of this subsection, former employees or Members
shall be treated as employees or Members.
``(5)(A) The Office of Personnel Management shall make such
adjustments as are necessary to the benefits of a former spouse under
this subsection to reflect any increase in creditable service that
affects the benefit of the former spouse and that occurs at the time
the employee or Member actually retires.
``(B) To ensure that the total of all benefits payable under this
chapter (other than benefits based on participation in the Thrift
Savings Plan) based on the service of an employee or Member do not
actuarially exceed all benefits which could otherwise be payable under
section 8415, the Office of Personnel Management may make an adjustment
in the payment of benefits to--
``(i) a former spouse under this subsection; or
``(ii) the employee or Member.
Such actuarial value shall in no event be less than the present
value determined under paragraph (2).''
(c) Regulations.--Not later than 1 year after the date of enactment
of this Act, the Office of Personnel Management shall prescribe
regulations to carry out the amendments made by this section.
(d) Effective Date.--The amendments made by this section shall take
effect 1 year after the date of enactment of this Act and apply to any
court decree, court order, property settlement, or similar process
issued after such effective date.

SEC. 303. ORDER OF PRECEDENCE FOR DISPOSITION OF AMOUNTS REMAINING IN
THE THRIFT SAVINGS ACCOUNT OF A FEDERAL EMPLOYEE (OR
FORMER EMPLOYEE) WHO DIES BEFORE MAKING AN EFFECTIVE
ELECTION CONTROLLING SUCH DISPOSITION.

(a) In General.--Section 8433(e) of title 5, United States Code, is
amended--
(1) by striking ``(e)'' and inserting ``(e)(1)'';
(2) by striking all that follows ``paid'' and inserting
``in accordance with paragraph (2).''; and
(3) by adding at the end the following:
``(2)(A) An amount under paragraph (1) shall be paid in a manner
consistent with the provisions of section 8424(d), except that, in
applying the order of precedence under such provisions--
``(i) the widow or widower of the decedent shall be the
first party entitled to receive (instead of any designated
beneficiary); and
``(ii) if there is no widow or widower, the party next
entitled to receive shall be the beneficiary or beneficiaries
designated by the employee or Member (or former employee or
Member) in accordance with the procedures that would otherwise
normally apply, subject to such additional conditions as the
Executive Director shall by regulation prescribe based on
section 205(c)(2) of the Employee Retirement Income Security
Act of 1974 (29 U.S.C. 1055(c)(2)).
``(B) The order of precedence under subparagraph (A) shall not
apply if the widow or widower consents in writing to the application of
the order of precedence under section 8424(d).
``(C) For purposes of this paragraph, the term `widow' or `widower'
shall not include a common law spouse of a deceased employee or Member
(or former employee or Member).''
(b) Effective Date.--The amendments made by this section shall take
effect on the date which is 1 year after the date of the enactment of
this Act (or such earlier date as the Executive Director of the Federal
Retirement Thrift Investment Board may prescribe), and shall apply in
the case of any individual who dies on or after such date.

Subtitle B--Railroad Retirement

SEC. 311. ENTITLEMENT OF DIVORCED SPOUSES TO RAILROAD RETIREMENT
ANNUITIES INDEPENDENT OF ACTUAL ENTITLEMENT OF EMPLOYEE.

(a) In General.--Section 2 of the Railroad Retirement Act of 1974
(45 U.S.C. 231a) is amended--
(1) in subsection (c)(4)(i), by striking ``(A) is entitled
to an annuity under subsection (a)(1) and (B)''; and
(2) in subsection (e)(5), by striking ``or divorced wife''
the second place it appears.
(b) Effective Date.--The amendments made by this section shall take
effect 1 year after the date of the enactment of this Act.

SEC. 312. EXTENSION OF TIER II RAILROAD RETIREMENT BENEFITS TO
SURVIVING FORMER SPOUSES PURSUANT TO DIVORCE AGREEMENTS.

(a) In General.--Section 5 of the Railroad Retirement Act of 1974
(45 U.S.C. 231d) is amended by adding at the end the following:
``(d) Notwithstanding any other provision of law, the payment of
any portion of an annuity computed under section 3(b) to a surviving
former spouse in accordance with a court decree of divorce, annulment,
or legal separation or the terms of any court-approved property
settlement incident to any such court decree shall not be terminated
upon the death of the individual who performed the service with respect
to which such annuity is so computed unless such termination is
otherwise required by the terms of such court decree.''
(b) Effective Date.--The amendment made by this section shall take
effect 1 year after the date of the enactment of this Act.

TITLE IV--MODIFICATIONS OF JOINT AND SURVIVOR ANNUITY REQUIREMENTS

SEC. 401. MODIFICATIONS OF JOINT AND SURVIVOR ANNUITY REQUIREMENTS.

(a) Amendments to ERISA.--
(1) Amount of annuity.--
(A) In general.--Paragraph (1) of section 205(a) of
the Employee Retirement Income Security Act of 1974 (29
U.S.C. 1055(a)) is amended by inserting ``or, at the
election of the participant, shall be provided in the
form of a qualified joint and \3/4\ survivor annuity,''
after ``survivor annuity,''.
(B) Definition.--Subsection (d) of section 205 of
such Act (29 U.S.C. 1055) is amended--
(i) by redesignating paragraphs (1) and (2)
as subparagraphs (A) and (B), respectively,
(ii) by inserting ``(1)'' after ``(d)'',
and
(iii) by adding at the end the following
new paragraph:
``(2)(A) For purposes of this section, the term `qualified joint
and \3/4\ survivor annuity' means an annuity--
``(i) for the life of the participant with a survivor
annuity for the life of the spouse which is not less than 75
percent of the amount of the annuity which is payable during
the joint lives of the participant and the spouse, and
``(ii) which is the actuarial equivalent of a single
annuity for the life of the participant.
``(B) For purposes of this Act, a qualified joint and \3/4\
survivor annuity shall be treated as a qualified joint and survivor
annuity.''
(2) Illustration requirement.--Clause (i) of section
205(c)(3)(A) of such Act (29 U.S.C. 1055(c)(3)(A)) is amended
to read as follows:
``(i) the terms and conditions of each qualified joint and
survivor annuity and qualified joint and \3/4\ survivor annuity
offered, accompanied by an illustration of the benefits under
each such annuity for the particular participant and spouse,''.
(b) Amendments to Internal Revenue Code.--
(1) Amount of annuity.--
(A) In general.--Clause (i) of section
401(a)(11)(A) of the Internal Revenue Code of 1986
(relating to requirement of joint and survivor annuity
and preretirement survivor annuity) is amended by
inserting ``or, at the election of the participant,
shall be provided in the form of a qualified joint and
\3/4\ survivor annuity,'' after ``survivor annuity,''.
(B) Definition.--Section 417 (relating to
definitions and special rules for purposes of minimum
survivor annuity requirements), as amended by this Act,
is amended by adding at the end the following new
subsection:
``(i) Definition of Qualified Joint and \3/4\ Survivor Annuity.--
``(1) In general.--For purposes of this section and section
401(a)(11), the term `qualified joint and \3/4\ survivor
annuity' means an annuity--
``(A) for the life of the participant with a
survivor annuity for the life of the spouse which is
not less than 75 percent of the amount of the annuity
which is payable during the joint lives of the
participant and the spouse, and
``(B) which is the actuarial equivalent of a single
annuity for the life of the participant.
``(2) Treatment.--For purposes of this title, a qualified
joint and 3/4 survivor annuity shall be treated as a qualified
joint and survivor annuity.''
(2) Illustration requirement.--Clause (i) of section
417(a)(3)(A) (relating to explanation of joint and survivor
annuity) is amended to read as follows:
``(i) the terms and conditions of each
qualified joint and survivor annuity and
qualified joint and \3/4\ survivor annuity
offered, accompanied by an illustration of the
benefits under each such annuity for the
particular participant and spouse,''.
(c) Effective Dates.--
(1) In general.--The amendments made by this section shall
apply to plan years beginning on or after January 1, 2005.
(2) Special rule for collectively bargained plans.--In the
case of a plan maintained pursuant to 1 or more collective
bargaining agreements between employee representatives and 1 or
more employers ratified on or before the date of the enactment
of this Act, the amendments made by this section shall apply to
the first plan year beginning on or after the earlier of--
(A) the later of--
(i) January 1, 2005, or
(ii) the date on which the last of such
collective bargaining agreements terminates
(determined without regard to any extension
thereof after the date of enactment of this
Act), or
(B) January 1, 2006.
(3) Form of accrued benefit not treated as decreased by
reason of amendment.--For purposes of sections 204(g) of the
Employee Retirement Income Security Act of 1974 (29 U.S.C.
1054(g)) and 411(d)(6) of the Internal Revenue Code of 1986, a
plan shall not be treated as having decreased the accrued
benefit of a participant solely by reason of the adoption of a
plan amendment which provides for a qualified joint and \3/4\
survivor annuity.

TITLE V--PLAN AMENDMENTS

SEC. 501. PROVISIONS RELATING TO PLAN AMENDMENTS.

(a) In General.--If this section applies to any plan or contract
amendment, such plan or contract shall be treated as being operated in
accordance with the terms of the plan during the period described in
subsection (b)(2)(A).
(b) Amendments to Which Section Applies.--
(1) In general.--This section shall apply to any amendment
to any plan or annuity contract which is made--
(A) pursuant to any amendment made by this Act, or
pursuant to any regulation issued under this Act, and
(B) on or before the last day of the first plan
year beginning on or after January 1, 2005.
In the case of a governmental plan (as defined in section
414(d) of the Internal Revenue Code of 1986), this paragraph
shall be applied by substituting ``2007'' for ``2005''.
(2) Conditions.--This section shall not apply to any
amendment unless--
(A) during the period--
(i) beginning on the date the legislative
or regulatory amendment described in paragraph
(1)(A) takes effect (or in the case of a plan
or contract amendment not required by such
legislative or regulatory amendment, the
effective date specified by the plan); and
(ii) ending on the date described in
paragraph (1)(B) (or, if earlier, the date the
plan or contract amendment is adopted),
the plan or contract is operated as if such plan or
contract amendment were in effect; and
(B) such plan or contract amendment applies
retroactively for such period.
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