text: SECTION 1. PROTECTING OLDER, LONGER SERVICE PARTICIPANTS.
  
      (a) In General.--Paragraph (4) of section 401(a) of the Internal 
  Revenue Code of 1986 is amended to read as follows:
              ``(4) Nondiscrimination.--
                      ``(A) In general.--A trust shall not constitute a 
                  qualified trust under this section unless the 
                  contributions or benefits provided under the plan do 
                  not discriminate in favor of highly compensated 
                  employees (within the meaning of section 414(q)). For 
                  purposes of this paragraph, there shall be excluded 
                  from consideration employees described in section 
                  410(b)(3) (A) and (C).
                      ``(B) Protection of older, longer service 
                  participants.--
                              ``(i)(I) A defined benefit plan described 
                          in subclause (II) shall not fail to satisfy 
                          this paragraph with respect to plan benefits, 
                          rights, or features by reason of--
                                      ``(aa) the composition of the 
                                  closed class of participants described 
                                  in subclause (II), or
                                      ``(bb) the benefits, rights, or 
                                  features provided to such closed class.
                              ``(II) A plan is described in this 
                          subclause if--
                                      ``(aa) the plan provides benefits, 
                                  rights, or features to a closed class 
                                  of participants,
                                      ``(bb) such closed class and such 
                                  benefits, rights, and features satisfy 
                                  the requirements of subparagraph (A) 
                                  (without regard to this clause) as of 
                                  the date that the class was closed, and
                                      ``(cc) after the date as of which 
                                  the class was closed, any plan 
                                  amendments that modify the closed class 
                                  or the benefits, rights, and features 
                                  provided to such closed class satisfy 
                                  subparagraph (A) (without regard to 
                                  this clause).
                          If a plan amendment causes a plan to cease to 
                          be described in this subclause (II) by reason 
                          of subclause (II)(cc), the plan is nevertheless 
                          described in this subclause (II) if such plan 
                          satisfies this subclause (II) (without regard 
                          to subclause (II)(cc)) as of the effective date 
                          of such amendment. In such cases, subclause 
                          (II)(bb) and (cc) shall subsequently be applied 
                          by reference to the effective date of the plan 
                          amendment, rather than by reference to the 
                          original date that the class was closed.
                              ``(ii)(I) A defined contribution plan 
                          described in subclause (II) shall be permitted 
                          to be tested on a benefits basis.
                              ``(II) A defined contribution plan is 
                          described in this subclause if--
                                      ``(aa) the plan provides make-whole 
                                  contributions to a closed class of 
                                  participants whose defined benefit plan 
                                  accruals have been reduced or 
                                  eliminated,
                                      ``(bb) such closed class of 
                                  participants satisfies section 
                                  410(b)(2)(A)(i) as of the date that the 
                                  class of participants was closed, and
                                      ``(cc) after the date as of which 
                                  the class was closed, any plan 
                                  amendments that modify the closed class 
                                  or the allocations, benefits, rights, 
                                  and features provided to such closed 
                                  class satisfy subparagraph (A) (without 
                                  regard to this clause).
                          If a plan amendment causes a plan to cease to 
                          be described in this subclause (II) by reason 
                          of subclause (II)(cc), the plan is nevertheless 
                          described in this subclause (II) if such plan 
                          satisfies this subclause (II) (without regard 
                          to subclause (II)(cc)) as of the effective date 
                          of such amendment. In such cases, subclause 
                          (II)(bb) and (cc) shall subsequently be applied 
                          by reference to the effective date of the plan 
                          amendment, rather than by reference to the 
                          original date that the class was closed.
                              ``(III) In addition to other testing 
                          methodologies otherwise applicable, for 
                          purposes of determining compliance with this 
                          paragraph and with section 410(b) of the 
                          portion of one or more defined contribution 
                          plans described in subclause (II) that provide 
                          make-whole contributions, such portion of such 
                          plans may be aggregated and tested on a 
                          benefits basis with the portion of one or more 
                          defined contribution plans that--
                                      ``(aa) provides matching 
                                  contributions (as defined in subsection 
                                  (m)(4)(A)), or
                                      ``(bb) consists of an employee 
                                  stock ownership plan within the meaning 
                                  of section 4975(e)(7) or a tax credit 
                                  employee stock ownership plan within 
                                  the meaning of section 409(a).
                          For such purposes, matching contributions shall 
                          be treated in the same manner as employer 
                          contributions that are made without regard to 
                          whether an employee makes an elective 
                          contribution or employee contribution, 
                          including for purposes of applying the rules of 
                          subsection (l).
                      ``(C) Definitions.--For purposes of this 
                  paragraph--
                              ``(i) Make-whole contributions.--The term 
                          `make-whole contributions' means allocations 
                          for each employee in the class that are 
                          reasonably calculated, in a consistent manner, 
                          to replace some or all of the retirement 
                          benefits that the employee would have received 
                          under the defined benefit plan and any other 
                          plan or arrangement if the employee had 
                          continued to benefit at the same level under 
                          such defined benefit plan and such other plan 
                          or arrangement.
                              ``(ii) References to closed class of 
                          participants.--References to a closed class of 
                          participants and similar references to a closed 
                          class shall include arrangements under which 
                          one or more classes of participants are closed.
                      ``(D) Protecting grandfathered participants in 
                  defined benefit plans.--
                              ``(i) One or more defined benefit plans 
                          described in clause (ii) shall be permitted to 
                          be tested on a benefits basis with one or more 
                          defined contribution plans.
                              ``(ii) A defined benefit plan is described 
                          in this clause if--
                                      ``(I) the plan provides benefits to 
                                  a closed class of participants,
                                      ``(II) the plan and such benefits 
                                  satisfy the requirements of 
                                  subparagraph (A) (without regard to 
                                  this subparagraph) as of the date the 
                                  class was closed, and
                                      ``(III) after the date as of which 
                                  the class was closed, any plan 
                                  amendments that modify the closed class 
                                  or the benefits provided to such closed 
                                  class satisfy subparagraph (A) (without 
                                  regard to this subparagraph).
                          If a plan amendment causes a plan to cease to 
                          be described in this clause (ii) by reason of 
                          subclause (III), the plan is nevertheless 
                          described in this clause (ii) if such plan 
                          satisfies this clause (ii) (without regard to 
                          subclause (III)) as of the effective date of 
                          such amendment. In such cases, subclauses (II) 
                          and (III) shall subsequently be applied by 
                          reference to the effective date of the plan 
                          amendment, rather than by reference to the 
                          original date that the class was closed.
                              ``(iii) In addition to other testing 
                          methodologies otherwise applicable, for 
                          purposes of determining compliance with this 
                          paragraph and with section 410(b) of one or 
                          more defined benefit plans described in clause 
                          (ii), such plans may be aggregated and tested 
                          on a benefits basis with the portion of one or 
                          more defined contribution plans that--
                                      ``(I) provides matching 
                                  contributions (as defined in subsection 
                                  (m)(4)(A)), or
                                      ``(II) consists of an employee 
                                  stock ownership plan within the meaning 
                                  of section 4975(e)(7) or a tax credit 
                                  employee stock ownership plan within 
                                  the meaning of section 409(a).
                          For such purposes, matching contributions shall 
                          be treated in the same manner as employer 
                          contributions that are made without regard to 
                          whether an employee makes an elective 
                          contribution or employee contribution, 
                          including for purposes of applying the rules of 
                          subsection (l).
                      ``(E) Rules.--The Secretary may prescribe rules 
                  designed to prevent abuse of the plan designs otherwise 
                  permitted by reason of subparagraphs (B) and (D). Such 
                  rules shall be directed towards abuses under which the 
                  defined benefit plan was established within a specified 
                  period prior to the date that--
                              ``(i) the class of participants described 
                          in subparagraphs (B)(i)(II)(aa), 
                          (B)(ii)(II)(aa), and (D)(ii)(I) is closed, or
                              ``(ii) the defined benefit plan accruals 
                          have been reduced or eliminated, in the case of 
                          the make-whole contributions described in 
                          subparagraph (C).
                      ``(F) Transition rules.--Within one year after the 
                  date of enactment of the Retirement Plan Simplification 
                  and Enhancement Act of 2013, the Secretary shall 
                  prescribe rules that facilitate the use of the 
                  provisions of subparagraphs (B) and (D) without regard 
                  to--
                              ``(i) whether the closing of the class of 
                          participants referred to in such subparagraphs 
                          occurred before or after such date of 
                          enactment, or
                              ``(ii) plan amendments that were adopted or 
                          effective before such date of enactment and 
                          that would not have been necessary if 
                          subparagraphs (B) and (D) had been in 
                          effect.''.
      (b) Participation Requirements.--Paragraph (26) of section 401(a) 
  of the Internal Revenue Code of 1986 is amended by adding at the end 
  the following new subparagraph:
                      ``(I) Protected participants.--A plan described in 
                  this subparagraph shall be deemed to satisfy the 
                  requirements of subparagraph (A). A plan is described 
                  in this paragraph if--
                              ``(i) the plan is amended to--
                                      ``(I) cease all benefit accruals, 
                                  or
                                      ``(II) provide future benefit 
                                  accruals only to a closed class of 
                                  participants, and
                              ``(ii) the plan satisfies subparagraph (A) 
                          (without regard to this subparagraph) as of the 
                          effective date of the amendment.
                  The Secretary may prescribe such rules as are necessary 
                  or appropriate to fulfill the purposes of this 
                  subparagraph, including prevention of abuse of this 
                  subparagraph in the case of plans established within a 
                  specific period prior to the effective date of the 
                  amendment.''.
      (c) Effective Date.--The amendments made by this section shall take 
  effect on the date of the enactment of this Act, without regard to 
  whether any plan modifications referenced in such amendments are 
  adopted or effective before, on, or after such date of enactment.
target: Amends the Internal Revenue Code, with respect to nondiscrimination requirements for tax-exempt employee pension, profit-sharing, and stock bonus plans, to include protections for older, longer service participants in such plans, including the grandfathering of such participants under&nbsp;defined benefit plans. 
feat_title: To amend the nondiscrimination provisions of the Internal Revenue Code of 1986 to protect older, longer service participants.