To amend the Internal Revenue Code of 1986 to provide for the payment of fellowship benefits to pension plan participants.

Amends Section 401 (Qualified Pension, Profit-Sharing, and Stock Bonus Plans) to prohibit a trust forming part of a defined benefit pension plan being treated as failing to constitute a qualified trust under such section merely because such plan provides for the payment of qualified fellowship benefits to participants in such plan. Defines the term "qualified fellowship benefits."

[Congressional Bills 106th Congress]
[From the U.S. Government Publishing Office]
[H.R. 5466 Introduced in House (IH)]







106th CONGRESS
  2d Session
                                H. R. 5466

 To amend the Internal Revenue Code of 1986 to provide for the payment 
          of fellowship benefits to pension plan participants.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                            October 12, 2000

  Mr. Matsui introduced the following bill; which was referred to the 
                      Committee on Ways and Means

_______________________________________________________________________

                                 A BILL


 
 To amend the Internal Revenue Code of 1986 to provide for the payment 
          of fellowship benefits to pension plan participants.

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

SECTION 1. QUALIFIED FELLOWSHIP BENEFITS.

    (a) In General.--Section 401(a) of the Internal Revenue Code of 
1986 (26 U.S.C. 401(a)) is amended by adding after paragraph (34) a new 
paragraph to read as follows:
            ``(35) Qualified fellowship benefits.--
                    ``(A) In general.--A trust forming part of a 
                defined benefit pension plan shall not be treated as 
                failing to constitute a qualified trust under this 
                section merely because such plan provides for the 
                payment of qualified fellowship benefits to 
                participants in such plan.
                    ``(B) Qualified fellowship benefits defined.--
                Except as otherwise provided by this paragraph, the 
                term `qualified fellowship benefits' means any amounts 
                payable to a participant under a plan referred to in 
                subparagraph (A) if--
                            ``(i) such amounts are payable only after 
                        such participant has terminated employment with 
                        the employer maintaining such plan on or after 
                        attaining the age of 55,
                            ``(ii) such amounts are payable only if 
                        such participant renders substantial volunteer 
                        services for any organization described in 
                        section 501(c)(3) (other than a private 
                        foundation within the meaning of section 
                        509(a)(1) or the employer maintaining the plan) 
                        and exempt from tax under section 501(a), and
                            ``(iii) after taking into account the 
                        payment of such amounts to such participant, 
                        the value of the assets of such plan is not 
                        less than 125 percent of the value of the 
                        current liability (within the meaning of 
                        section 412(c)(7)(B)) of such plan.
                    ``(C) Limitations on qualified fellowship 
                benefits.--No amount otherwise described in 
                subparagraph (B) that is payable to a participant shall 
                be considered a qualified fellowship benefit under this 
                paragraph to the extent that--
                            ``(i) such amount is payable with respect 
                        to services described in clause (ii) of 
                        subparagraph (B) that are rendered more than 4 
                        years after such participant has terminated 
                        employment with the employer maintaining the 
                        plan, and
                            ``(ii) such amount, when added to all other 
                        amounts described in subparagraph (B) that are 
                        payable to any other participant under the plan 
                        during a single plan year, exceeds 1 percent of 
                        the value of such plan's assets.
                    ``(D) Status of qualified fellowship benefits.--
                            ``(i) All qualified fellowship benefits 
                        under this paragraph shall be treated as 
                        ancillary benefits for all purposes under this 
                        part.
                            ``(ii) All qualified fellowship benefits 
                        under this paragraph shall be deemed to satisfy 
                        the requirements of subsection (a)(4) if such 
                        benefits are available on substantially the 
                        same terms to all participants under a plan who 
                        satisfy the conditions of clause (i) of 
                        subparagraph (B).''.
    (b) Effective Date.--The amendment made by this section shall apply 
to plan years beginning after December 31, 2000.
                                 <all>