MODIFICATION OF PROHIBITION OF ASSIGNMENT OR ALIENATION.

SEC. 1502. MODIFICATION OF PROHIBITION OF ASSIGNMENT OR ALIENATION. (a) Amendment to ERISA.—Section 206(d) of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1056(d)) is amended by adding at the end the following: “(4) Paragraph (1) shall not apply to any offset of a participant’s benefits provided under an employee pension benefit plan against an amount that the participant is ordered or required to pay to the plan if— “(A) the order or requirement to pay arises— “(i) under a judgment of conviction for a crime involving such plan,111 STAT. 1059 “(ii) under a civil judgment (including a consent order or decree) entered by a court in an action brought in connection with a violation (or alleged violation) of part 4 of this subtitle, or “(iii) pursuant to a settlement agreement between the Secretary and the participant, or a settlement agreement between the Pension Benefit Guaranty Corporation and the participant, in connection with a violation (or alleged violation) of part 4 of this subtitle by a fiduciary or any other person, “(B) the judgment, order, decree, or settlement agreement expressly provides for the offset of all or part of the amount ordered or required to be paid to the plan against the participant’s benefits provided under the plan, and “(C) in a case in which the survivor annuity requirements of section 205 apply with respect to distributions from the plan to the participant, if the participant has a spouse at the time at which the offset is to be made— “(i) either— “(I) such spouse has consented in writing to such offset and such consent is witnessed by a notary public or representative of the plan (or it is established to the satisfaction of a plan representative that such consent may not be obtained by reason of circumstances described in section 205(c)(2)(B)), or “(II) an election to waive the right of the spouse to a qualified joint and survivor annuity or a qualified preretirement survivor annuity is in effect in accordance with the requirements of section 205(c), “(ii) such spouse is ordered or required in such judgment, order, decree, or settlement to pay an amount to the plan in connection with a violation of part 4 of this subtitle, or “(iii) in such judgment, order, decree, or settlement, such spouse retains the right to receive the survivor annuity under a qualified joint and survivor annuity provided pursuant to section 205(a)(1) and under a qualified preretirement survivor annuity provided pursuant to section 205(a)(2), determined in accordance with paragraph (5). A plan shall not be treated as failing to meet the requirements of section 205 solely by reason of an offset under this paragraph. “(5)(A) The survivor annuity described in paragraph (4)(C)(iii) shall be determined as if— “(i) the participant terminated employment on the date of the offset, “(ii) there was no offset, “(iii) the plan permitted commencement of benefits only on or after normal retirement age, “(iv) the plan provided only the minimum-required qualified joint and survivor annuity, and “(v) the amount of the qualified preretirement survivor annuity under the plan is equal to the amount of the survivor annuity payable under the minimum-required qualified joint and survivor annuity. “(B) For purposes of this paragraph, the term ‘minimum-required qualified joint and survivor annuity’ means the qualified joint and survivor annuity which is the actuarial equivalent of 111 STAT. 1060the participant’s accrued benefit (within the meaning of section 3(23)) and under which the survivor annuity is 50 percent of the amount of the annuity which is payable during the joint lives of the participant and the spouse.”. (b) Amendment to 1986 Code.—Section 401(a)(13) (relating to assignment and alienation) is amended by adding at the end the following: “(C) Special rule for certain judgments and settlements.—Subparagraph (A) shall not apply to any offset of a participant’s benefits provided under a plan against an amount that the participant is ordered or required to pay to the plan if— “(i) the order or requirement to pay arises— “(I) under a judgment of conviction for a crime involving such plan, “(II) under a civil judgment (including a consent order or decree) entered by a court in an action brought in connection with a violation (or alleged violation) of part 4 of subtitle B of title I of the Employee Retirement Income Security Act of 1974, or “(III) pursuant to a settlement agreement between the Secretary of Labor and the participant, or a settlement agreement between the Pension Benefit Guaranty Corporation and the participant, in connection with a violation (or alleged violation) of part 4 of such subtitle by a fiduciary or any other person, “(ii) the judgment, order, decree, or settlement agreement expressly provides for the offset of all or part of the amount ordered or required to be paid to the plan against the participant’s benefits provided under the plan, and “(iii) in a case in which the survivor annuity requirements of section 401(a)(H) apply with respect to distributions from the plan to the participant, if the participant has a spouse at the time at which the offset is to be made— “(I) either such spouse has consented in writing to such offset and such consent is witnessed by a notary public or representative of the plan (or it is established to the satisfaction of a plan representative that such consent may not be obtained by reason of circumstances described in section 417(a)(2)(B)), or an election to waive the right of the spouse to either a qualified joint and survivor annuity or a qualified preretirement survivor annuity is in effect in accordance with the requirements of section 417(a), “(II) such spouse is ordered or required in such judgment, order, decree, or settlement to pay an amount to the plan in connection with a violation of part 4 of such subtitle, or “(III) in such judgment, order, decree, or settlement, such spouse retains the right to receive the survivor annuity under a qualified joint and survivor annuity provided pursuant to section 111 STAT. 1061401(a)(11)(A)(i) and under a qualified preretirement survivor annuity provided pursuant to section 401(a)(11)(A)(ii), determined in accordance with subparagraph (D). A plan shall not be treated as failing to meet the requirements of this subsection, subsection (k), section 403(b), or section 409(d) solely by reason of an offset described in this subparagraph. “(D) Survivor annuity.— “(i) In general.—The survivor annuity described in subparagraph (C)(iii)(III) shall be determined as if— “(I) the participant terminated employment on the date of the offset, “(II) there was no offset, “(III) the plan permitted commencement of benefits only on or after normal retirement age, “(IV) the plan provided only the minimum-required qualified joint and survivor annuity, and “(V) the amount of the qualified preretirement survivor annuity under the plan is equal to the amount of the survivor annuity payable under the minimum-required qualified joint and survivor annuity. “(ii) Definition.—For purposes of this subparagraph, the term ‘minimum-required qualified joint and survivor annuity’ means the qualified joint and survivor annuity which is the actuarial equivalent of the participant’s accrued benefit (within the meaning of section 411(a)(7)) and under which the survivor annuity is 50 percent of the amount of the annuity which is payable during the joint lives of the participant and the spouse.”. (c) Effective Date.—The amendments made by this section shall apply to judgments, orders, and decrees issued, and settlement agreements entered into, on or after the date of the enactment of this Act.