II
113th CONGRESS
1st Session
S. 506
IN THE SENATE OF THE UNITED STATES
March 7, 2013
Ms. Collins (for herself and Mr. Schumer) introduced the following bill; which was read twice and referred to the Committee on Finance
A BILL
To amend the Internal Revenue Code of 1986 to provide recruitment and retention incentives for volunteer emergency service workers.
Short title
This Act may be cited as the
Volunteer Emergency Services
Recruitment and Retention Act of 2013
.
Elective treatment of length of service award programs as eligible deferred compensation plans
In general
Section 457(e) of the Internal Revenue Code of 1986 is amended by adding at the end the following new paragraph:
Special rules applicable to length of service award plans
In general
The term eligible deferred compensation plan shall include, at the election of its sponsor, any length of service award plan. Any such election shall be irrevocable. In the case of a length of service award plan whose sponsor has elected to have such plan treated as an eligible deferred compensation plan, such plan shall be administered in a manner consistent with the requirements of this section and such sponsor shall be treated as an eligible employer described in paragraph (1)(A).
Length of service award plan
For purposes of this paragraph—
In general
The term length of service award plan means any plan paying solely length of service awards to bona fide volunteers (or their beneficiaries) on account of qualified services performed by such volunteers.
Bona fide volunteer
An individual shall be treated as a bona fide volunteer if the only compensation received by such individual for performing qualified services is in the form of—
reimbursement for (or a reasonable allowance for) reasonable expenses incurred in the performance of such services, or
reasonable benefits (including length of service awards), and fees for such services, customarily paid by eligible employers in connection with the performance of such services by volunteers.
Qualified services
The term qualified services means firefighting and prevention services, emergency medical services, ambulance services, and emergency rescue services.
Maximum deferral amount
In the case of a length of service award plan whose
sponsor has elected to have such plan treated as an eligible deferred
compensation plan, subsection (b)(2) shall be applied by striking the
lesser of—
and all that follows and inserting the applicable
dollar amount,
.
Distribution requirements
In the case of a length of service award plan whose sponsor has elected to have such plan treated as an eligible deferred compensation plan, subsection (d)(1)(A)(ii) shall be applied by deeming a severance from employment to have occurred at the later of—
the payment date under the terms of the plan, or
the date on which the plan participant ceases to perform qualified services.
Limitation on accruals
In general
In the case of a length of service award plan that is a defined benefit plan (as defined in section 414(j)) whose sponsor has not elected to have such plan treated as an eligible deferred compensation plan, such plan shall be treated as not providing for the deferral of compensation if the aggregate amount of length of service awards accruing with respect to any year of service for any bona fide volunteer does not exceed $5,500. In the case of a length of service award plan described in the preceding sentence that is a defined benefit plan (as defined in section 414(j)), the limitation on the annual deferral shall apply to the actuarial present value of the aggregate amount of length of service awards accruing with respect to any year of service. Such actuarial present value shall be calculated using reasonable actuarial assumptions and methods assuming payment shall be made under the most valuable form of payment of the length of service award under the program with payment commencing at the later of the earliest age at which unreduced benefits are payable under the program or the participant’s current age.
Cost-of-living adjustment
In the case of taxable years beginning after December 31, 2013, the Secretary shall adjust the $5,500 amount under clause (i) at the same time and in the same manner as under section 415(d), except that the base period shall be the calendar quarter beginning July 1, 2012, and any increase under this paragraph that is not a multiple of $500 shall be rounded to the next lowest multiple of $500.
.
Conforming amendments
Section 457(e)(11) of the Internal Revenue Code of 1986 is amended to read as follows:
Certain plans excluded
Any bona fide vacation leave, sick leave, compensatory time, severance pay, disability pay, or death benefit plan shall be treated as not providing for the deferral of compensation.
.
Section
3121(a)(5)(I) of such Code is amended by striking section
457(e)(11)(A)(ii)
and inserting section
457(e)(19)
.
Effective date
The amendments made by this section shall apply to taxable years beginning after December 31, 2012.
Exemption of length of service award programs from the Employee Retirement Income Security Act of 1974
The Secretary of Labor shall issue guidance clarifying that a length of service award program described in section 457(e)(19) of the Internal Revenue Code of 1986 is not an employee pension benefit plan under section 3(2) of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1002(2)).