Portable Pension Plan Act of 1987

Portable Pension Plan Act of 1987 - Amends the Employee Retirement Income Security Act of 1974 (ERISA) to require, at an employee's request, any employer who has not maintained a qualified pension plan for five years prior to such request to establish a salary reduction arrangement providing for employee coverage under a simplified employee pension plan. Provides that employers are not required to make contributions to such plan. Amends the Internal Revenue Code to make conforming amendments.

Directs the Secretary of Labor to prescribe by regulation a simplified method of compliance with simplified employee pension plans. Makes participation and vesting requirements of ERISA applicable to such plans and funding requirements inapplicable to such plans.

Increases from ten percent to 20 percent the additional tax on early distributions from qualified retirement plans. Exempts from such tax early distributions from individual retirement plans for medical expenses.

Requires the consent of the participant before the immediate distribution of a vested accrued benefit in excess of $3,500. Provides for the portability (transfer) of amounts between plans upon a participant's preretirement separation from service. Allows the distribution of vested amounts that do not exceed $200. Makes conforming amendments to the Internal Revenue Code.

Requires the Secretary of Labor to take such action as necessary to facilitate and encourage the establishment and continued maintenance by small employers of employee pension benefit plan coverage, including providing access to instructional information and information by toll-free telephone. Directs the Secretary to report annually to specified congressional committees on the extent to which efforts have been made to meet such requirement.

Requires the Comptroller General of the General Accounting Office to report to the Congress on the retirement plan qualification process and the portability of pension benefits, together with recommendations.