Retirement Security Act of 2014 - Directs the Secretary of the Treasury to: (1) prescribe final regulations to permit employers to participate in multiple employer pension benefit plans, (2) promulgate regulations or other guidance to simplify and clarify rules relating to the timing of participant notices required under tax-preferred pension plans and the automatic escalation rules, and (3) modify the 1040EZ tax return form to allow taxpayers to claim the tax credit for retirement savings (saver's credit) on such form.
Amends the Employee Retirement Income Security Act of 1974 (ERISA) and the Internal Revenue Code, with respect to employer pension benefit plans, to: (1) allow employers to maintain a tax-exempt multiple employer pension benefit plan even if the employers sponsoring the plan share no common interest, (2) modify requirements for secure deferral arrangements with respect to nondiscrimination and employer matching contributions, and (3) allow employers with not more than 100 employees a business-related tax credit to cover increased matching contributions required by this Act.
[Congressional Bills 113th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4376 Introduced in House (IH)]
113th CONGRESS
2d Session
H. R. 4376
To amend the Internal Revenue Code of 1986 to modify safe harbor
requirements applicable to automatic contribution arrangements, and for
other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
April 2, 2014
Mr. Braley of Iowa introduced the following bill; which was referred to
the Committee on Ways and Means, and in addition to the Committee on
Education and the Workforce, for a period to be subsequently determined
by the Speaker, in each case for consideration of such provisions as
fall within the jurisdiction of the committee concerned
_______________________________________________________________________
A BILL
To amend the Internal Revenue Code of 1986 to modify safe harbor
requirements applicable to automatic contribution arrangements, and for
other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Retirement Security Act of 2014''.
SEC. 2. ELIMINATION OF DISINCENTIVE TO POOLING FOR MULTIPLE EMPLOYER
PLANS.
(a) In General.--Not later than one year after the date of the
enactment of this Act, the Secretary of the Treasury shall prescribe
final regulations under which a plan described in section 413(c) of the
Internal Revenue Code of 1986 may be treated as satisfying the
qualification requirements of section 401(a) of such Code despite the
violation of such requirements with respect to one or more
participating employers. Such rules may require that the portion of the
plan attributable to such participating employers be spun off to plans
maintained by such employers.
SEC. 3. MODIFICATION OF ERISA RULES RELATING TO MULTIPLE EMPLOYER
DEFINED CONTRIBUTION PLANS.
(a) In General.--
(1) Requirement of common interest.--Section 3(2) of the
Employee Retirement Income Security Act of 1974 is amended by
adding at the end the following:
``(C)(i) A qualified multiple employer plan shall not fail
to be treated as an employee pension benefit plan or pension
plan solely because the employers sponsoring the plan share no
common interest.
``(ii) For purposes of this subparagraph, the term
`qualified multiple employer plan' means a plan described in
section 413(c) of the Internal Revenue Code of 1986 which--
``(I) is an individual account plan with respect to
which the requirements of clauses (iii), (iv), and (v)
are met, and
``(II) includes in its annual report required to be
filed under section 104(a) the name and identifying
information of each participating employer.
``(iii) The requirements of this clause are met if, under
the plan, each participating employer retains fiduciary
responsibility for--
``(I) the selection and monitoring of the named
fiduciary, and
``(II) the investment and management of the portion
of the plan's assets attributable to employees of the
employer to the extent not otherwise delegated to
another fiduciary.
``(iv) The requirements of this clause are met if, under
the plan, a participating employer is not subject to
unreasonable restrictions, fees, or penalties by reason of
ceasing participation in, or otherwise transferring assets
from, the plan.
``(v) The requirements of this clause are met if each
participating employer in the plan is an eligible employer as
defined in section 408(p)(2)(C)(i) of the Internal Revenue Code
of 1986, applied--
``(I) by substituting `500' for `100' in subclause
(I) thereof,
``(II) by substituting `5' for `2' each place it
appears in subclause (II) thereof, and
``(III) without regard to the last sentence of
subclause (II) thereof.''.
(2) Simplified reporting for small multiple employer
plans.--Section 104(a) of such Act (29 U.S.C. 1024(a)) is
amended by adding at the end the following:
``(7)(A) In the case of any eligible small multiple employer plan,
the Secretary may by regulation--
``(i) prescribe simplified summary plan descriptions,
annual reports, and pension benefit statements for purposes of
section 102, 103, or 105, respectively, and
``(ii) waive the requirement under section 103(a)(3) to
engage an independent qualified public accountant in cases
where the Secretary determines it appropriate.
``(B) For purposes of this paragraph, the term `eligible small
multiple employer plan' means, with respect to any plan year--
``(i) a qualified multiple employer plan, as defined in
section 3(2)(C)(ii), or
``(ii) any other plan described in section 413(c) of the
Internal Revenue Code of 1986 that satisfies the requirements
of clause (v) of section 3(2)(C).''.
(b) Effective Date.--The amendments made by this section shall
apply to years beginning after December 31, 2014.
SEC. 4. SECURE DEFERRAL ARRANGEMENTS.
(a) In General.--Subsection (k) of section 401 of the Internal
Revenue Code of 1986 is amended by adding at the end the following new
paragraph:
``(14) Alternative method for secure deferral arrangements
to meet nondiscrimination requirements.--
``(A) In general.--A secure deferral arrangement
shall be treated as meeting the requirements of
paragraph (3)(A)(ii).
``(B) Secure deferral arrangement.--For purposes of
this paragraph, the term `secure deferral arrangement'
means any cash or deferred arrangement which meets the
requirements of subparagraphs (C), (D), and (E) of
paragraph (13), except as modified by this paragraph.
``(C) Qualified percentage.--For purposes of this
paragraph, with respect to any employee, the term
`qualified percentage' means, in lieu of the meaning
given such term in paragraph (13)(C)(iii), any
percentage determined under the arrangement if such
percentage is applied uniformly and is--
``(i) at least 6 percent, but not greater
than 10 percent, during the period ending on
the last day of the first plan year which
begins after the date on which the first
elective contribution described in paragraph
(13)(C)(i) is made with respect to such
employee,
``(ii) at least 8 percent during the first
plan year following the plan year described in
clause (i), and
``(iii) at least 10 percent during any
subsequent plan year.
``(D) Matching contributions.--
``(i) In general.--For purposes of this
paragraph, an arrangement shall be treated as
having met the requirements of paragraph
(13)(D)(i) if and only if the employer makes
matching contributions on behalf of each
employee who is not a highly compensated
employee in an amount equal to the sum of--
``(I) 100 percent of the elective
contributions of the employee to the
extent that such contributions do not
exceed 1 percent of compensation,
``(II) 50 percent of so much of
such contributions as exceed 1 percent
but do not exceed 6 percent of
compensation, plus
``(III) 25 percent of so much of
such contributions as exceed 6 percent
but do not exceed 10 percent of
compensation.
``(ii) Application of rules for matching
contributions.--The rules of clause (ii) of
paragraph (12)(B) and clauses (iii) and (iv) of
paragraph (13)(D) shall apply for purposes of
clause (i) but the rule of clause (iii) of
paragraph (12)(B) shall not apply for such
purposes. The rate of matching contribution for
each incremental deferral must be at least as
high as the rate specified in clause (i), and
may be higher, so long as such rate does not
increase as an employee's rate of elective
contributions increases.''.
(b) Matching Contributions and Employee Contributions.--Subsection
(m) of section 401 of the Internal Revenue Code of 1986 is amended by
redesignating paragraph (13) as paragraph (14) and by inserting after
paragraph (12) the following new paragraph:
``(13) Alternative method for secure deferral
arrangements.--A defined contribution plan shall be treated as
meeting the requirements of paragraph (2) with respect to
matching contributions and employee contributions if the plan--
``(A) is a secure deferral arrangement (as defined
in subsection (k)(14)),
``(B) meets the requirements of clauses (ii) and
(iii) of paragraph (11)(B), and
``(C) provides that matching contributions on
behalf of any employee may not be made with respect to
an employee's contributions or elective deferrals in
excess of 10 percent of the employee's compensation.''.
(c) Effective Date.--The amendments made by this section shall
apply to plan years beginning after December 31, 2014.
SEC. 5. CREDIT FOR EMPLOYERS WITH RESPECT TO MODIFIED SAFE HARBOR
REQUIREMENTS.
(a) In General.--Subpart D of part IV of subchapter A of chapter 1
of the Internal Revenue Code of 1986 is amended by adding at the end
the following new section:
``SEC. 45S. CREDIT FOR SMALL EMPLOYERS WITH RESPECT TO MODIFIED SAFE
HARBOR REQUIREMENTS FOR AUTOMATIC CONTRIBUTION
ARRANGEMENTS.
``(a) General Rule.--For purposes of section 38, in the case of a
small employer, the safe harbor adoption credit determined under this
section for any taxable year is the amount equal to the total of the
employer's matching contributions under section 401(k)(14)(D) during
the taxable year on behalf of employees who are not highly compensated
employees, subject to the limitations of subsection (b).
``(b) Limitations.--
``(1) Limitation with respect to compensation.--The credit
determined under subsection (a) with respect to contributions
made on behalf of an employee who is not a highly compensated
employee shall not exceed 2 percent of the compensation of such
employee for the taxable year.
``(2) Limitation with respect to years of participation.--
Credit shall be determined under subsection (a) with respect to
contributions made on behalf of an employee who is not a highly
compensated employee only during the first 5 years such
employee participates in the qualified automatic contribution
arrangement.
``(c) Definitions.--
``(1) In general.--Any term used in this section which is
also used in section 401(k)(14) shall have the same meaning as
when used in such section.
``(2) Small employer.--The term `small employer' means an
eligible employer (as defined in section 408(p)(2)(C)(i)).
``(d) Denial of Double Benefit.--No deduction shall be allowable
under this title for any contribution with respect to which a credit is
allowed under this section.''.
(b) Credit To Be Part of General Business Credit.--Subsection (b)
of section 38 of the Internal Revenue Code of 1986 is amended--
(1) by striking ``plus'' at the end of paragraph (35),
(2) by striking the period at the end of paragraph (36) and
inserting ``, plus'', and
(3) by adding at the end the following new paragraph:
``(37) the safe harbor adoption credit determined under
section 45S.''.
(c) Clerical Amendment.--The table of sections for subpart D of
part IV of subchapter A of chapter 1 of the Internal Revenue Code of
1986 is amended by adding after the item relating to section 45R the
following new item:
``Sec. 45S. Credit for small employers with respect to modified safe
harbor requirements for automatic
contribution arrangements.''.
(d) Effective Date.--The amendments made by this section shall
apply to taxable years that include any portion of a plan year
beginning after December 31, 2014.
SEC. 6. MODIFICATION OF REGULATIONS.
The Secretary of the Treasury shall promulgate regulations or other
guidance that--
(1) simplify and clarify the rules regarding the timing of
participant notices required under section 401(k)(13)(E) of the
Internal Revenue Code of 1986, with specific application to--
(A) plans that allow employees to be eligible for
participation immediately upon beginning employment,
and
(B) employers with multiple payroll and
administrative systems, and
(2) simplify and clarify the automatic escalation rules
under sections 401(k)(13)(C)(iii) and 401(k)(14)(C) of the
Internal Revenue Code of 1986 in the context of employers with
multiple payroll and administrative systems.
Such regulations or guidance shall address the particular case of
employees within the same plan who are subject to different notice
timing and different percentage requirements, and provide assistance
for plan sponsors in managing such cases.
SEC. 7. OPPORTUNITY TO CLAIM THE SAVER'S CREDIT ON FORM 1040EZ.
The Secretary of the Treasury shall modify the forms for the return
of tax of individuals in order to allow individuals claiming the credit
under section 25B of the Internal Revenue Code of 1986 to file (and
claim such credit on) Form 1040EZ.
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Introduced in House
Introduced in House
Referred to the Committee on Ways and Means, and in addition to the Committee on Education and the Workforce, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
Referred to the Committee on Ways and Means, and in addition to the Committee on Education and the Workforce, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
Referred to the Subcommittee on Health, Employment, Labor, and Pensions.
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