Securing a Strong Retirement Act of 2020
This bill makes various changes with respect to employer-sponsored retirement plans, including providing for the automatic enrollment of employees in certain plans and increasing the age at which participants are required to begin receiving mandatory distributions.
[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[H.R. 8696 Introduced in House (IH)]
<DOC>
116th CONGRESS
2d Session
H. R. 8696
To increase retirement savings, simplify and clarify retirement plan
rules, and for other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
October 27, 2020
Mr. Neal (for himself and Mr. Brady) introduced the following bill;
which was referred to the Committee on Ways and Means, and in addition
to the Committees on Financial Services, and Education and Labor, 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 increase retirement savings, simplify and clarify retirement plan
rules, 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; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``Securing a Strong
Retirement Act of 2020''.
(b) Table of Contents.--The table of contents for this Act is as
follows:
Sec. 1. Short title; table of contents.
TITLE I--EXPANDING COVERAGE AND INCREASING RETIREMENT SAVINGS
Sec. 101. Expanding automatic enrollment in retirement plans.
Sec. 102. Modification of credit for small employer pension plan
startup costs.
Sec. 103. Simplification and increase in Saver's Credit.
Sec. 104. Enhancement of 403(b) plans.
Sec. 105. Increase in age for required beginning date for mandatory
distributions.
Sec. 106. Deferral of tax for certain sales of employer stock to
employee stock ownership plan sponsored by
S corporation.
Sec. 107. Indexing IRA catch-up limit.
Sec. 108. Higher catch-up limit to apply at age 60.
Sec. 109. Multiple employer 403(b) plans.
Sec. 110. Treatment of student loan payments as elective deferrals for
purposes of matching contributions.
Sec. 111. Application of credit for small employer pension plan startup
costs to employers which join an existing
plan.
Sec. 112. Military spouse retirement plan eligibility credit for small
employers.
Sec. 113. Small immediate financial incentives for contributing to a
plan.
Sec. 114. Safe harbor for corrections of employee elective deferral
failures.
Sec. 115. One-year reduction in period of service requirement for long-
term, part-time workers.
Sec. 116. Governmental pension plans may include certain firefighters,
emergency medical technicians, and
paramedics.
TITLE II--PRESERVATION OF INCOME
Sec. 201. Remove required minimum distribution barriers for life
annuities.
Sec. 202. Qualifying longevity annuity contracts.
Sec. 203. Insurance-dedicated exchange-traded funds.
TITLE III--SIMPLIFICATION AND CLARIFICATION OF RETIREMENT PLAN RULES
Sec. 301. Recovery of retirement plan overpayments.
Sec. 302. Reduction in excise tax on certain accumulations in qualified
retirement plans.
Sec. 303. Performance benchmarks for asset allocation funds.
Sec. 304. Review and report to the Congress relating to reporting and
disclosure requirements.
Sec. 305. Eliminating unnecessary plan requirements related to
unenrolled participants.
Sec. 306. Retirement savings lost and found.
Sec. 307. Exemption from required minimum distribution rules for
individuals with certain account balances.
Sec. 308. Expansion of Employee Plans Compliance Resolution System.
Sec. 309. Eliminate the ``first day of the month'' requirement for
governmental section 457(b) plans.
Sec. 310. One-time election for qualified charitable distribution to
split-interest entity; increase in
qualified charitable distribution
limitation.
Sec. 311. Retirement plan distributions for charitable purpose.
Sec. 312. Distributions to firefighters.
Sec. 313. Exclusion of certain disability-related first responder
retirement payments.
Sec. 314. Individual retirement plan statute of limitations for excise
tax on excess contributions, certain
accumulations, and prohibited transactions.
Sec. 315. Requirement to provide paper statements in certain cases.
TITLE IV--TECHNICAL AMENDMENTS
Sec. 401. Amendments relating to Setting Every Community Up for
Retirement Enhancement Act of 2019.
TITLE V--ADMINISTRATIVE PROVISIONS
Sec. 501. Provisions relating to plan amendments.
TITLE I--EXPANDING COVERAGE AND INCREASING RETIREMENT SAVINGS
SEC. 101. EXPANDING AUTOMATIC ENROLLMENT IN RETIREMENT PLANS.
(a) In General.--Subpart B of part I of subchapter D of chapter 1
of the Internal Revenue Code of 1986 is amended by inserting after
section 414 the following new section:
``SEC. 414A. REQUIREMENTS RELATED TO AUTOMATIC ENROLLMENT.
``(a) In General.--Except as otherwise provided in this section--
``(1) an arrangement shall not be treated as a qualified
cash or deferred arrangement described in section 401(k) or as
a qualified salary reduction arrangement described in section
408(p) unless such arrangement meets the automatic enrollment
requirements of subsection (b), and
``(2) an annuity contract otherwise described in section
403(b)(1) which is purchased under a salary reduction agreement
shall not be treated as described in such section unless such
agreement meets the automatic enrollment requirements of
subsection (b).
``(b) Automatic Enrollment Requirements.--
``(1) In general.--An arrangement or agreement meets the
requirements of this subsection if such arrangement or
agreement is an eligible automatic contribution arrangement (as
defined in section 414(w)(3)) which meets the requirements of
paragraphs (2) through (4).
``(2) Allowance of permissible withdrawals.--An eligible
automatic contribution arrangement meets the requirements of
this paragraph if such arrangement allows employees to make
permissible withdrawals (as defined in section 414(w)(2)).
``(3) Minimum contribution percentage.--An eligible
automatic contribution arrangement meets the requirements of
this paragraph if--
``(A) the uniform percentage of compensation
contributed by the participant under such arrangement
during the first year of participation is not less than
3 percent and not more than 10 percent (unless the
participant specifically elects not to have such
contributions made or to have such contributions made
at a different percentage), and
``(B) such uniform percentage is increased by 1
percentage point for each year of participation under
such arrangement (but not above 10 percent) unless the
participant specifically elects not to have such
contributions made or to have such contributions made
at a different percentage.
``(4) Investment requirements.--An eligible automatic
contribution arrangement meets the requirements of this
paragraph if amounts contributed pursuant to such arrangement,
and for which no investment is elected by the participant, are
invested consistent with the requirements of section 2550.404c-
5 of title 29, Code of Federal Regulations (or any successor
regulations).
``(c) Exceptions.--For purposes of this section--
``(1) Exception for plans or arrangements established
before enactment of section.--Subsection (a) shall not apply
to--
``(A) any qualified cash or deferred arrangement or
qualified salary reduction arrangement established
before the date of the enactment of this section, or
``(B) any annuity contract purchased under a plan
established before the date of the enactment of this
section.
``(2) Exception for governmental and church plans.--
Subsection (a) shall not apply to any governmental plan (within
the meaning of section 414(d)) or any church plan (within the
meaning of section 414(e)).
``(3) Exception for new businesses.--Subsection (a) shall
not apply to--
``(A) any qualified cash or deferred arrangement or
qualified salary reduction arrangement established
while all employers maintaining the plan (and any
predecessor employers) have been in existence for less
than 3 years, or
``(B) any annuity contract purchased under a plan
established while all employers maintaining such plan
have been in existence for less than 3 years.
``(4) Exception for small businesses.--Subsection (a) shall
not apply to--
``(A) any qualified cash or deferred arrangement or
qualified salary reduction arrangement if such
arrangement is established not later than 1 year after
the close of the last taxable year with respect to
which all employers maintaining the plan normally
employed 10 or fewer employees on a typical business
day, or
``(B) any annuity contract purchased under a plan
established not later than 1 year after the close of
the last taxable year with respect to which all
employers maintaining such plan normally employed 10 or
fewer employees on a typical business day.''.
(b) Clerical Amendment.--The table of sections for subpart B of
part I of subchapter D of chapter 1 of the Internal Revenue Code of
1986 is amended by inserting after the item relating to section 414 the
following new item:
``Sec. 414A. Requirements related to automatic enrollment.''.
(c) Effective Date.--The amendments made by this section shall
apply to plan years beginning after December 31, 2021.
SEC. 102. MODIFICATION OF CREDIT FOR SMALL EMPLOYER PENSION PLAN
STARTUP COSTS.
(a) Increase in Credit Percentage for Smaller Employers.--Section
45E(e) of the Internal Revenue Code of 1986 is amended by adding at the
end the following new paragraph:
``(4) Increased credit for certain small employers.--In the
case of an employer which would be an eligible employer under
subsection (c) if section 408(p)(2)(C)(i) was applied by
substituting `50 employees' for `100 employees', subsection (a)
shall be applied by substituting `100 percent' for `50
percent'.''.
(b) Additional Credit for Employer Contributions by Certain Small
Employers.--Section 45E of such Code is amended by adding at the end
the following new subsection:
``(f) Additional Credit for Employer Contributions by Certain
Eligible Employers.--
``(1) In general.--In the case of an eligible employer, the
credit allowed for the taxable year under subsection (a)
(determined without regard to this subsection) shall be
increased by an amount equal to the applicable percentage of
employer contributions (other than any elective deferrals (as
defined in section 402(g)(3))) by the employer to an eligible
employer plan (other than a defined benefit plan (as defined in
section 414(j))).
``(2) Limitations.--
``(A) Dollar limitation.--The amount determined
under paragraph (1) (before the application of
subparagraph (B)) with respect to any employee of the
employer shall not exceed $1,000.
``(B) Credit phase-in.--In the case of any eligible
employer which had for the preceding taxable year more
than 50 employees, the amount determined under
paragraph (1) (without regard to this subparagraph)
shall be reduced by an amount equal to the product of--
``(i) the amount otherwise so determined
under paragraph (1), multiplied by
``(ii) a percentage equal to 2 percentage
points for each employee of the employer for
the preceding taxable year in excess of 50
employees.
``(3) Applicable percentage.--For purposes of this section,
the applicable percentage for the taxable year during which the
eligible employer plan is established shall be 100 percent, and
for taxable years thereafter shall be determined under the
following table:
``In the case of the following The applicable percentage shall be:
taxable year beginning
after the taxable year
during which plan is
established:
1st................................................ 100%
2nd................................................ 75%
3rd................................................ 50%
4th................................................ 25%
Any taxable year thereafter........................ 0%
``(4) Determination of eligible employer; number of
employees.--For purposes of this subsection, whether an
employer is an eligible employer and the number of employees of
an employer shall be determined under the rules of subsection
(c), except that paragraph (2) thereof shall only apply to the
taxable year during which the eligible employer plan to which
this section applies is established.''.
(c) Disallowance of Deduction.--Section 45E(e)(2) of such Code is
amended to read as follows:
``(2) Disallowance of deduction.--No deduction shall be
allowed--
``(A) for that portion of the qualified startup
costs paid or incurred for the taxable year which is
equal to so much of the portion of the credit
determined under subsection (a) as is properly
allocable to such costs, and
``(B) for that portion of the employer
contributions by the employer for the taxable year
which is equal to so much of the credit increase
determined under subsection (f) as is properly
allocable to such contributions.''.
(d) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2020.
SEC. 103. SIMPLIFICATION AND INCREASE IN SAVER'S CREDIT.
(a) In General.--Section 25B(a) of the Internal Revenue Code of
1986 is amended by striking ``the applicable percentage'' and all that
follows through ``$2,000'' and inserting the following: ``50 percent of
so much of the qualified retirement savings contributions of the
eligible individual for the taxable year as does not exceed $3,000''.
(b) Income Limitation.--Section 25B(b) of such Code is amended to
read as follows:
``(b) Income Limitation.--
``(1) In general.--The amount allowable as a credit under
subsection (a) for any taxable year (determined without regard
to this subsection) shall be reduced (but not below zero) by an
amount which bears the same ratio to the amount so allowable
(as so determined) as--
``(A) the amount by which the taxpayer's adjusted
gross income exceeds the applicable threshold, bears to
``(B) $20,000.
``(2) Applicable threshold.--For purposes of this
subsection, the applicable threshold is--
``(A) except as provided in subparagraph (B) or
(C), $40,000,
``(B) in the case of a joint return, 200 percent of
the amount in effect for the taxable year under
subparagraph (A), or
``(C) in the case of a head of household, 150
percent of the amount in effect for the taxable year
under subparagraph (A).
``(3) Inflation adjustment.--In the case of any taxable
year beginning in a calendar year after 2021, the $40,000
dollar amount in paragraph (2) shall be increased by an amount
equal to--
``(A) such dollar amount, multiplied by
``(B) the cost-of-living adjustment determined
under section 1(f)(3) for the calendar year in which
the taxable year begins, determined by substituting
`calendar year 2020' for `calendar year 2016' in
subparagraph (A)(ii) thereof.
Any increase determined under the preceding sentence shall be
rounded to the nearest multiple of $500.''.
(c) Saver's Credit.--The heading for section 25B of such Code is
amended to read as follows: ``saver's credit.''.
(d) Saver's Credit Promotion.--
(1) In general.--The Secretary of the Treasury (or the
Secretary's delegate) shall take such steps as the Secretary
(or delegate) determines are necessary and appropriate to
increase public awareness of the credit provided under section
25B of such Code (as amended by this section).
(2) Report.--Not later than 1 year after the date of the
enactment of this Act, the Secretary (or delegate) shall submit
to Congress a report detailing the steps taken under paragraph
(1).
(e) Clerical Amendment.--The table of sections for subpart A of
part IV of subchapter A of chapter 1 of such Code is amended by
striking the item relating to section 25B and inserting the following
new item:
``Sec. 25B. Saver's credit.''.
(f) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after the date of the enactment of
this Act.
SEC. 104. ENHANCEMENT OF 403(B) PLANS.
(a) In General.--
(1) Permitted investments.--Section 403(b)(7)(A) of the
Internal Revenue Code of 1986 is amended by striking ``if the
amounts are to be invested in regulated investment company
stock to be held in that custodial account'' and inserting ``if
the amounts are to be held in that custodial account and
invested in regulated investment company stock or a group trust
intended to satisfy the requirements of Internal Revenue
Service Revenue Ruling 81-100 (or any successor guidance)''.
(2) Conforming amendment.--The heading of paragraph (7) of
section 403(b) of such Code is amended by striking ``for
regulated investment company stock''.
(3) Effective date.--The amendments made by this subsection
shall apply to amounts invested after December 31, 2020.
(b) Amendments to the Investment Company Act of 1940.--Section
3(c)(11) of the Investment Company Act of 1940 (15 U.S.C. 80a-3(c)(11))
is amended to read as follows:
``(11) Any--
``(A) employee's stock bonus, pension, or profit-
sharing trust which meets the requirements for
qualification under section 401 of the Internal Revenue
Code of 1986;
``(B) custodial account meeting the requirements of
section 403(b)(7) of such Code;
``(C) governmental plan described in section
3(a)(2)(C) of the Securities Act of 1933;
``(D) collective trust fund maintained by a bank
consisting solely of assets of one or more--
``(i) trusts described in subparagraph (A);
``(ii) government plans described in
subparagraph (C);
``(iii) church plans, companies, or
accounts that are excluded from the definition
of an investment company under paragraph (14)
of this subsection; or
``(iv) plans which meet the requirements of
section 403(b) of the Internal Revenue Code of
1986 if--
``(I) such plan is subject to title
I of the Employee Retirement Income
Security Act of 1974 (29 U.S.C. 1001 et
seq.);
``(II) any employer making such
plan available agrees to serve as a
fiduciary for the plan with respect to
the selection of the plan's investments
among which participants can choose; or
``(III) such plan is a governmental
plan (as defined in section 414(d) of
such Code); or
``(E) separate account the assets of which are
derived solely from--
``(i) contributions under pension or
profit-sharing plans which meet the
requirements of section 401 of the Internal
Revenue Code of 1986 or the requirements for
deduction of the employer's contribution under
section 404(a)(2) of such Code;
``(ii) contributions under governmental
plans in connection with which interests,
participations, or securities are exempted from
the registration provisions of section 5 of the
Securities Act of 1933 by section 3(a)(2)(C) of
such Act;
``(iii) advances made by an insurance
company in connection with the operation of
such separate account; and
``(iv) contributions to a plan described in
subparagraph (D)(iv).''.
(c) Amendments to the Securities Act of 1933.--Section 3(a)(2) of
the Securities Act of 1933 (15 U.S.C. 77c(a)(2)) is amended--
(1) by striking ``or (D)'' and inserting ``(D) a plan which
meets the requirements of section 403(b) of such Code if (i)
such plan is subject to title I of the Employee Retirement
Income Security Act of 1974 (29 U.S.C. 1001 et seq.), (ii) any
employer making such plan available agrees to serve as a
fiduciary for the plan with respect to the selection of the
plan's investments among which participants can choose, or
(iii) such plan is a governmental plan (as defined in section
414(d) of such Code); or (E)'';
(2) by striking ``(C), or (D)'' and inserting ``(C), (D),
or (E)''; and
(3) by striking ``(iii) which is a plan funded'' and
inserting ``(iii) in the case of a plan not described in
subparagraph (D), which is a plan funded''.
(d) Amendments to the Securities Exchange Act of 1934.--Section
3(a)(12)(C) of the Securities Exchange Act of 1934 (15 U.S.C.
78c(a)(12)(C)) is amended--
(1) by striking ``or (iv)'' and inserting ``(iv) a plan
which meets the requirements of section 403(b) of such Code if
(I) such plan is subject to title I of the Employee Retirement
Income Security Act of 1974 (29 U.S.C. 1001 et seq.), (II) any
employer making such plan available agrees to serve as a
fiduciary for the plan with respect to the selection of the
plan's investments among which participants can choose, or
(III) such plan is a governmental plan (as defined in section
414(d) of such Code), or (v)'';
(2) by striking ``(ii), or (iii)'' and inserting ``(ii),
(iii), or (iv)''; and
(3) by striking ``(II) is a plan funded'' and inserting
``(II) in the case of a plan not described in clause (iv), is a
plan funded''.
SEC. 105. INCREASE IN AGE FOR REQUIRED BEGINNING DATE FOR MANDATORY
DISTRIBUTIONS.
(a) In General.--Section 401(a)(9)(C)(i)(I) of the Internal Revenue
Code of 1986 is amended by striking ``age 72'' and inserting ``age
75''.
(b) Spouse Beneficiaries; Special Rule for Owners.--Subparagraphs
(B)(iv)(I) and (C)(ii)(I) of section 401(a)(9) of such Code are each
amended by striking ``age 72'' and inserting ``age 75''.
(c) Conforming Amendments.--The last sentence of section 408(b) of
such Code is amended by striking ``age 72'' and inserting ``age 75''.
(d) Effective Date.--The amendments made by this section shall
apply to distributions required to be made after December 31, 2020,
with respect to individuals who attain age 72 after such date.
SEC. 106. DEFERRAL OF TAX FOR CERTAIN SALES OF EMPLOYER STOCK TO
EMPLOYEE STOCK OWNERSHIP PLAN SPONSORED BY S CORPORATION.
(a) In General.--Section 1042(c)(1)(A) of the Internal Revenue Code
of 1986 is amended by striking ``domestic C corporation'' and inserting
``domestic corporation''.
(b) Effective Date.--The amendment made by this section shall apply
to sales after the date of the enactment of this Act.
SEC. 107. INDEXING IRA CATCH-UP LIMIT.
(a) In General.--Subparagraph (C) of section 219(b)(5) of the
Internal Revenue Code of 1986 is amended by adding at the end the
following new clause:
``(iii) Indexing of catch-up limitation.--
In the case of any taxable year beginning in a
calendar year after 2021, the $1,000 amount
under subparagraph (B)(ii) shall be increased
by an amount equal to--
``(I) such dollar amount,
multiplied by
``(II) the cost-of-living
adjustment determined under section
1(f)(3) for the calendar year in which
the taxable year begins, determined by
substituting `calendar year 2020' for
`calendar year 2016' in subparagraph
(A)(ii) thereof.
If any amount after adjustment under the
preceding sentence is not a multiple of $100,
such amount shall be rounded to the next lower
multiple of $100.''.
(b) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2021.
SEC. 108. HIGHER CATCH-UP LIMIT TO APPLY AT AGE 60.
(a) In General.--
(1) Plans other than simple plans.--Section 414(v)(2)(B)(i)
of the Internal Revenue Code of 1986 is amended by inserting
the following before the period: ``($10,000, in the case of an
eligible participant who has attained age 60 before the close
of the taxable year)''.
(2) Simple plans.--Section 414(v)(2)(B)(ii) of such Code is
amended by inserting the following before the period:
``($5,000, in the case of an eligible participant who has
attained age 60 before the close of the taxable year)''.
(b) Cost-of-Living Adjustments.--Subparagraph (C) of section
414(v)(2) of such Code is amended by adding at the end the following:
``In the case of a year beginning after December 31, 2021, the
Secretary shall adjust annually the $10,000 amount in subparagraph
(B)(i) and the $5,000 amount in subparagraph (B)(ii) for increases in
the cost-of-living at the same time and in the same manner as
adjustments under the preceding sentence; except that the base period
taken into account shall be the calendar quarter beginning July 1,
2020.''.
(c) Effective Date.--The amendments made by this section shall
apply to years beginning after December 31, 2020.
SEC. 109. MULTIPLE EMPLOYER 403(B) PLANS.
(a) In General.--Section 403(b) of the Internal Revenue Code of
1986 is amended by adding at the end the following new paragraph:
``(15) Multiple employer plans.--
``(A) In general.--Except in the case of a church
plan, this subsection shall not be treated as failing
to apply to an annuity contract solely by reason of
such contract being purchased under a plan maintained
by more than 1 employer.
``(B) Treatment of employers failing to meet
requirements of plan.--
``(i) In general.--In the case of a plan
maintained by more than 1 employer, this
subsection shall not be treated as failing to
apply to an annuity contract held under such
plan merely because of one or more employers
failing to meet the requirements of this
subsection if such plan satisfies rules similar
to the rules of section 413(e)(2) with respect
to any such employer failure.
``(ii) Additional requirements in case of
non-governmental plans.--A plan shall not be
treated as meeting the requirements of this
subparagraph unless the plan meets the
requirements of subparagraph (A) or (B) of
section 413(e)(1), except in the case of a
multiple employer plan maintained solely by any
of the following: A State, a political
subdivision of a State, or an agency or
instrumentality of any one or more of the
foregoing.''.
(b) Annual Registration for 403(b) Multiple Employer Plan.--Section
6057 of such Code is amended by redesignating subsection (g) as
subsection (h) and by inserting after subsection (f) the following new
subsection:
``(g) 403(b) Multiple Employer Plans Treated as One Plan.--In the
case of annuity contracts to which this section applies and to which
section 403(b) applies by reason of the plan under which such contracts
are purchased meeting the requirements of paragraph (15) thereof, such
plan shall be treated as a single plan for purposes of this section.''.
(c) Annual Information Returns for 403(b) Multiple Employer Plan.--
Section 6058 of the Internal Revenue Code of 1986 is amended by
redesignating subsection (f) as subsection (g) and by inserting after
subsection (e) the following new subsection:
``(f) 403(b) Multiple Employer Plans Treated as One Plan.--In the
case of annuity contracts to which this section applies and to which
section 403(b) applies by reason of the plan under which such contracts
are purchased meeting the requirements of paragraph (15) thereof, such
plan shall be treated as a single plan for purposes of this section.''.
(d) Amendments to Employee Retirement Income Security Act of
1974.--
(1) Treated as pooled employer plan.--
(A) In general.--Section 3(43)(A) of the Employee
Retirement Income Security Act of 1974 is amended--
(i) in clause (ii), by striking ``section
501(a) of such Code or'' and inserting ``501(a)
of such Code, a plan that consists of contracts
described in section 403(b) of such Code, or'';
and
(ii) in the flush text at the end, by
striking ``the plan.'' and inserting ``the
plan, but such term shall include any program
(other than a governmental plan) maintained for
the benefit of the employees of more than 1
employer that consists of contracts described
in section 403(b) of such Code and that meets
the requirements of subparagraph (A) or (B) of
section 413(e)(1) of such Code.''.
(B) Conforming amendments.--Sections
3(43)(B)(v)(II) and 3(44)(A)(i)(I) of such Act are each
amended by striking ``section 401(a) of such Code or''
and inserting ``401(a) of such Code, a plan that
consists of contracts described in section 403(b) of
such Code, or''.
(2) Fiduciaries.--Section 3(43)(B)(ii) of such Act is
amended--
(A) by striking ``trustees meeting the requirements
of section 408(a)(2) of the Internal Revenue Code of
1986'' and inserting ``trustees (or other fiduciaries
in the case of a plan that consists of contracts
described in section 403(b) of the Internal Revenue
Code of 1986) meeting the requirements of section
408(a)(2) of such Code'', and
(B) by striking ``holding'' and inserting ``holding
(or causing to be held under the terms of a plan
consisting of such contracts)''.
(e) Regulations Relating to Plan Termination.--The Secretary of the
Treasury (or the Secretary's designee) shall prescribe such regulations
as may be necessary to clarify the treatment of a plan termination by
an employer in the case of plans to which section 403(b)(15) of such
Code applies.
(f) Modification of Model Plan Language.--
(1) Plan notifications.--The Secretary of the Treasury (or
the Secretary's designee) shall modify the model plan language
published under section 413(e)(5) of the Internal Revenue Code
of 1986 to include language which notifies participating
employers which are exempt from tax under section 501(a) of
such Code that the plan is subject to the Employee Retirement
Income Security Act of 1974 and that such employer is a plan
sponsor with respect to its employees participating in the
multiple employer plan and, as such, has certain fiduciary
duties with respect to the plan and to its employees.
(2) Model plans for multiple employer 403(b) non-
governmental plans.--For plans to which section 403(b)(15)(A)
of the Internal Revenue Code of 1986 applies (other than a plan
maintained for its employees by a State, a political
subdivision of a State, or an agency or instrumentality of any
one or more of the foregoing) the Secretary shall publish model
plan language similar to model plan language published under
section 413(e)(5) of such Code.
(g) No Inference With Respect to Church Plans.--Regarding any
application of section 403(b) of the Internal Revenue Code of 1986 to
an annuity contract purchased under a church plan (as defined in
section 414(e) of such Code) maintained by more than 1 employer, or to
any application of rules similar to section 413(e) of such Code to such
a plan, no inference shall be made from section 403(b)(15)(A) of such
Code (as added by this Act) not applying to such plans.
(h) Effective Date.--
(1) In general.--The amendments made by this section shall
apply to plan years beginning after December 31, 2020.
(2) Rule of construction.--Nothing in the amendments made
by subsection (a) shall be construed as limiting the authority
of the Secretary of the Treasury or the Secretary's delegate
(determined without regard to such amendment) to provide for
the proper treatment of a failure to meet any requirement
applicable under such Code with respect to one employer (and
its employees) in the case of a plan to which section
403(b)(15) applies.
SEC. 110. TREATMENT OF STUDENT LOAN PAYMENTS AS ELECTIVE DEFERRALS FOR
PURPOSES OF MATCHING CONTRIBUTIONS.
(a) In General.--Subparagraph (A) of section 401(m)(4) of the
Internal Revenue Code of 1986 is amended by striking ``and'' at the end
of clause (i), by striking the period at the end of clause (ii) and
inserting ``, and'', and by adding at the end the following new clause:
``(iii) subject to the requirements of
paragraph (13), any employer contribution made
to a defined contribution plan on behalf of an
employee on account of a qualified student loan
payment.''.
(b) Qualified Student Loan Payment.--Paragraph (4) of section
401(m) of such Code is amended by adding at the end the following new
subparagraph:
``(D) Qualified student loan payment.--The term
`qualified student loan payment' means a payment made
by an employee in repayment of a qualified education
loan (as defined section 221(d)(1)) incurred by the
employee to pay qualified higher education expenses,
but only--
``(i) to the extent such payments in the
aggregate for the year do not exceed an amount
equal to--
``(I) the limitation applicable
under section 402(g) for the year (or,
if lesser, the employee's compensation
(as defined in section 415(c)(3)) for
the year), reduced by
``(II) the elective deferrals made
by the employee for such year, and
``(ii) if the employee certifies to the
employer making the matching contribution under
this paragraph that such payment has been made
on such loan.
For purposes of this subparagraph, the term `qualified
higher education expenses' means the cost of attendance
(as defined in section 472 of the Higher Education Act
of 1965, as in effect on the day before the date of the
enactment of the Taxpayer Relief Act of 1997) at an
eligible educational institution (as defined in section
221(d)(2)).''.
(c) Matching Contributions for Qualified Student Loan Payments.--
Subsection (m) of section 401 of such Code is amended by redesignating
paragraph (13) as paragraph (14), and by inserting after paragraph (12)
the following new paragraph:
``(13) Matching contributions for qualified student loan
payments.--
``(A) In general.--For purposes of paragraph
(4)(A)(iii), an employer contribution made to a defined
contribution plan on account of a qualified student
loan payment shall be treated as a matching
contribution for purposes of this title if--
``(i) the plan provides matching
contributions on account of elective deferrals
at the same rate as contributions on account of
qualified student loan payments,
``(ii) the plan provides matching
contributions on account of qualified student
loan payments only on behalf of employees
otherwise eligible to receive matching
contributions on account of elective deferrals,
``(iii) under the plan, all employees
eligible to receive matching contributions on
account of elective deferrals are eligible to
receive matching contributions on account of
qualified student loan payments, and
``(iv) the plan provides that matching
contributions on account of qualified student
loan payments vest in the same manner as
matching contributions on account of elective
deferrals.
``(B) Treatment for purposes of nondiscrimination
rules, etc.--
``(i) Nondiscrimination rules.--For
purposes of subparagraph (A)(iii), subsection
(a)(4), and section 410(b), matching
contributions described in paragraph
(4)(A)(iii) shall not fail to be treated as
available to an employee solely because such
employee does not have debt incurred under a
qualified education loan (as defined in section
221(d)(1)).
``(ii) Student loan payments not treated as
plan contribution.--Except as provided in
clause (iii), a qualified student loan payment
shall not be treated as a contribution to a
plan under this title.
``(iii) Matching contribution rules.--
Solely for purposes of meeting the requirements
of paragraph (11)(B) or (12) of this
subsection, or paragraph (11)(B)(i)(II),
(12)(B), or (13)(D) of subsection (k), a plan
may treat a qualified student loan payment as
an elective deferral or an elective
contribution, whichever is applicable.''.
(d) Simple Retirement Accounts.--Paragraph (2) of section 408(p) of
such Code is amended by adding at the end the following new
subparagraph:
``(F) Matching contributions for qualified student
loan payments.--
``(i) In general.--Subject to the rules of
clause (iii), an arrangement shall not fail to
be treated as meeting the requirements of
subparagraph (A)(iii) solely because under the
arrangement, solely for purposes of such
subparagraph, qualified student loan payments
are treated as amounts elected by the employee
under subparagraph (A)(i)(I) to the extent such
payments do not exceed--
``(I) the applicable dollar amount
under subparagraph (E) (after
application of section 414(v)) for the
year (or, if lesser, the employee's
compensation (as defined in section
415(c)(3)) for the year), reduced by
``(II) any other amounts elected by
the employee under subparagraph
(A)(i)(I) for the year.
``(ii) Qualified student loan payment.--For
purposes of this subparagraph--
``(I) In general.--The term
`qualified student loan payment' means
a payment made by an employee in
repayment of a qualified education loan
(as defined in section 221(d)(1))
incurred by the employee to pay
qualified higher education expenses,
but only if the employee certifies to
the employer making the matching
contribution that such payment has been
made on such a loan.
``(II) Qualified higher education
expenses.--The term `qualified higher
education expenses' has the same
meaning as when used in section
401(m)(4)(D).
``(iii) Applicable rules.--Clause (i) shall
apply to an arrangement only if, under the
arrangement--
``(I) matching contributions on
account of qualified student loan
payments are provided only on behalf of
employees otherwise eligible to elect
contributions under subparagraph
(A)(i)(I), and
``(II) all employees otherwise
eligible to participate in the
arrangement are eligible to receive
matching contributions on account of
qualified student loan payments.''.
(e) 403(b) Plans.--Subparagraph (A) of section 403(b)(12) of such
Code is amended by adding at the end the following: ``The fact that the
employer offers matching contributions on account of qualified student
loan payments as described in section 401(m)(13) shall not be taken
into account in determining whether the arrangement satisfies the
requirements of clause (ii) (and any regulation thereunder).''.
(f) 457(b) Plans.--Subsection (b) of section 457 of such Code is
amended by adding at the end the following: ``A plan which is
established and maintained by an employer which is described in
subsection (e)(1)(A) shall not be treated as failing to meet the
requirements of this subsection solely because the plan, or another
plan maintained by the employer which meets the requirements of section
401(a), provides for matching contributions on account of qualified
student loan payments as described in section 401(m)(13).''.
(g) Regulatory Authority.--The Secretary shall prescribe
regulations for purposes of implementing the amendments made by this
section, including regulations--
(1) permitting a plan to make matching contributions for
qualified student loan payments, as defined in sections
401(m)(4)(D) and 408(p)(2)(F) of the Internal Revenue Code of
1986, as added by this section, at a different frequency than
matching contributions are otherwise made under the plan,
provided that the frequency is not less than annually;
(2) permitting employers to establish reasonable procedures
to claim matching contributions for such qualified student loan
payments under the plan, including an annual deadline (not
earlier than 3 months after the close of each plan year) by
which a claim must be made; and
(3) promulgating model amendments which plans may adopt to
implement matching contributions on such qualified student loan
payments for purposes of sections 401(m), 408(p), 403(b), and
457(b) of the Internal Revenue Code of 1986.
(h) Effective Date.--The amendments made by this section shall
apply to contributions made for years beginning after December 31,
2020.
SEC. 111. APPLICATION OF CREDIT FOR SMALL EMPLOYER PENSION PLAN STARTUP
COSTS TO EMPLOYERS WHICH JOIN AN EXISTING PLAN.
(a) In General.--Section 45E(d)(3)(A) of the Internal Revenue Code
of 1986 is amended by striking ``effective'' and inserting ``effective
with respect to the eligible employer''.
(b) Effective Date.--The amendment made by this section shall apply
to eligible employer plans which become effective with respect to the
eligible employer after the date of the enactment of this Act.
SEC. 112. MILITARY SPOUSE RETIREMENT PLAN ELIGIBILITY CREDIT FOR SMALL
EMPLOYERS.
(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. 45U. MILITARY SPOUSE RETIREMENT PLAN ELIGIBILITY CREDIT FOR
SMALL EMPLOYERS.
``(a) In General.--For purposes of section 38, in the case of any
eligible small employer, the military spouse retirement plan
eligibility credit determined under this section for any taxable year
is an amount equal to the sum of--
``(1) $250 with respect to each military spouse who is an
employee of such employer and who is eligible to participate in
an eligible defined contribution plan of such employer at any
time during such taxable year, plus
``(2) so much of the contributions made by such employer to
all such plans with respect to such employee during such
taxable year as do not exceed $250.
``(b) Limitation.--An individual shall only be taken into account
as a military spouse under subsection (a) for the taxable year which
includes the date on which such individual began participating in the
eligible defined contribution plan of the employer and the 2 succeeding
taxable years.
``(c) Eligible Small Employer.--For purposes of this section--
``(1) In general.--The term `eligible small employer' means
an eligible employer (as defined in section
408(p)(2)(C)(i)(I)).
``(2) Application of 2-year grace period.--A rule similar
to the rule of section 408(p)(2)(C)(i)(II) shall apply for
purposes of this section.
``(d) Military Spouse.--For purposes of this section--
``(1) In general.--The term `military spouse' means, with
respect to any employer, any individual who is married (within
the meaning of section 7703 as of the first date that the
employee is employed by the employer) to an individual who is a
member of the uniformed services (as defined section 101(a)(5)
of title 10, United States Code). For purposes of this section,
an employer may rely on an employee's certification that such
employee's spouse is a member of the uniformed services if such
certification provides the name, rank, and service branch of
such spouse.
``(2) Exclusion of highly compensated employees.--With
respect to any employer, the term `military spouse' shall not
include any individual if such individual is a highly
compensated employee of such employer (within the meaning of
section 414(q)).
``(e) Eligible Defined Contribution Plan.--For purposes of this
section, the term `eligible defined contribution plan' means, with
respect to any eligible small employer, any defined contribution plan
(as defined in section 414(i)) of such employer if, under the terms of
such plan--
``(1) military spouses employed by such employer are
eligible to participate in such plan not later than the date
which is 2 months after the date on which such individual
begins employment with such employer, and
``(2) military spouses who are eligible to participate in
such plan--
``(A) are immediately eligible to receive an amount
of employer contributions under such plan which is not
less the amount of such contributions that a similarly
situated participant who is not a military spouse would
be eligible to receive under such plan after 2 years of
service, and
``(B) immediately have a nonforfeitable right to
the employee's accrued benefit derived from employer
contributions under such plan.
``(f) Aggregation Rule.--All persons treated as a single employer
under subsection (b), (c), (m), or (o) of section 414 shall be treated
as one employer for purposes of this section.''.
(b) Credit Allowed as Part of General Business Credit.--Section
38(b) of such Code is amended by striking ``plus'' at the end of
paragraph (32), by striking the period at the end of paragraph (33) and
inserting ``, plus'', and by adding at the end the following new
paragraph:
``(34) in the case of an eligible small employer (as
defined in section 45U(c)), the military spouse retirement plan
eligibility credit determined under section 45U(a).''.
(c) Clerical Amendment.--The table of sections for subpart D of
part IV of subchapter A of chapter 1 of such Code is amended by adding
at the end the following new item:
``Sec. 45U. Military spouse retirement plan eligibility credit for
small employers.''.
(d) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after the date of the enactment of
this Act.
SEC. 113. SMALL IMMEDIATE FINANCIAL INCENTIVES FOR CONTRIBUTING TO A
PLAN.
(a) In General.--Subparagraph (A) of section 401(k)(4) of the
Internal Revenue Code of 1986 is amended by inserting ``(other than a
de minimis financial incentive)'' after ``any other benefit''.
(b) Section 403(b) Plans.--Subparagraph (A) of section 403(b)(12)
of such Code, as amended by the preceding provisions of this Act, is
further amended by adding at the end the following: ``A plan shall not
fail to satisfy clause (ii) solely by reason of offering a de minimis
financial incentive to employees to elect to have the employer make
contributions pursuant to a salary reduction agreement.''.
(c) Exemption From Prohibited Transaction Rules.--Subsection (d) of
section 4975 of such Code is amended by striking ``or'' at the end of
paragraph (22), by striking the period at the end of paragraph (23) and
inserting ``, or'', and by adding at the end the following new
paragraph:
``(24) the provision of a de minimis financial incentive
described in section 401(k)(4)(A) or 403(b)(12)(A).''.
(d) Amendment of Employee Retirement Income Security Act of 1974.--
Subsection (b) of section 408 of the Employee Retirement Income
Security Act of 1974 (29 U.S.C. 1108(b)) is amended by adding at the
end the following new paragraph:
``(21) The provision of a de minimis financial incentive
described in section 401(k)(4)(A) or 403(b)(12)(A) of the
Internal Revenue Code of 1986.''.
(e) Effective Date.--The amendments made by this section shall
apply with respect to plan years beginning after the date of enactment
of this Act.
SEC. 114. SAFE HARBOR FOR CORRECTIONS OF EMPLOYEE ELECTIVE DEFERRAL
FAILURES.
(a) In General.--Section 414 of the Internal Revenue Code of 1986
is amended by adding at the end the following new subsection:
``(aa) Correcting Automatic Contribution Errors.--
``(1) In general.--Any plan or arrangement shall not fail
to be treated as a plan described in sections 401(a), 403(b),
408, or 457(b), as applicable, solely by reason of a corrected
error.
``(2) Corrected error defined.--For purposes of this
subsection, the term `corrected error' means a reasonable
administrative error in implementing an automatic enrollment or
automatic escalation feature in accordance with the terms of an
eligible automatic contribution arrangement (as defined under
subsection (w)(3)), provided that such implementation error--
``(A) is corrected by the date that is 9\1/2\
months after the end of the plan year during which the
failure occurred,
``(B) is corrected in a manner that is favorable to
the participant, and
``(C) is of a type which is so corrected for all
similarly situated participants in a nondiscriminatory
manner.
Such correction may occur before or after the participant has
terminated employment and may occur without regard to whether
the error is identified by the Secretary.
``(3) Regulations and guidance for favorable correction
methods.--The Secretary shall, by regulations or other guidance
of general applicability, specify the correction methods that
are in a manner favorable to the participant for purposes of
paragraph (2)(B).''.
(b) Effective Date.--The amendment made by this section shall apply
with respect to any errors with respect to which the date referred to
in section 414(aa) (as added by this section) is after the date of
enactment of this Act.
SEC. 115. ONE-YEAR REDUCTION IN PERIOD OF SERVICE REQUIREMENT FOR LONG-
TERM, PART-TIME WORKERS.
(a) In General.--Section 401(k)(2)(D)(ii) of the Internal Revenue
Code of 1986 is amended by striking ``3'' and inserting ``2''.
(b) Effective Date.--The amendment made by this section shall take
effect as if included in the addition of section 401(k)(2)(D)(ii) of
such Code by section 112 of the Setting Every Community Up for
Retirement Enhancement Act of 2019.
SEC. 116. GOVERNMENTAL PENSION PLANS MAY INCLUDE CERTAIN FIREFIGHTERS,
EMERGENCY MEDICAL TECHNICIANS, AND PARAMEDICS.
(a) Internal Revenue Code of 1986.--Section 414(d) of the Internal
Revenue Code of 1986 (relating to governmental plans) is amended by
adding at the end the following: ``The term `governmental plan' also
includes a plan which is established by a State or political
subdivision thereof and maintained by a public safety agency (described
in section 501(c) and exempt from taxation under section 501(a)), and
all of the participants of which are employees of such agency who are
emergency response providers (defined in section 2 of the Homeland
Security Act of 2002 (6 U.S.C. 101)), substantially all of whose
services as emergency response providers are in the performance of
firefighting services or out-of-hospital emergency medical services for
a political subdivision of a State under a contract between such public
safety agency and the political subdivision of a State.''.
(b) Employee Retirement Income Security Act of 1974.--
(1) In general.--Section 3(32) of the Employee Retirement
Income Security Act of 1974 (29 U.S.C. 1002(32)) is amended by
adding at the end the following: ``. The term `governmental
plan' also includes a plan which is established by a State or
political subdivision thereof and maintained by a public safety
agency (described in section 501(c) of the Internal Revenue
Code of 1986 and exempt from taxation under section 501(a) of
such Code), and all of the participants of which are employees
of such agency who are emergency response providers (defined in
section 2 of the Homeland Security Act of 2002 (6 U.S.C. 101)),
substantially all of whose services as emergency response
providers are in the performance of firefighting services or
out-of-hospital emergency medical services for a political
subdivision of a State under a contract between such public
safety agency and the political subdivision of a State.''.
(2) PBGC exception.--Section 4021(b)(2) of such Act (29
U.S.C. 1321(b)(2)) is amended by striking ``described in the
last sentence of section 3(32)'' and inserting ``described in
either of the last two sentences of section 3(32).''.
(c) Conforming Amendments.--
(1) Section 414(h)(2) of the Internal Revenue Code of 1986
is amended by striking ``described in the last sentence of
section 414(d) (relating to plans of Indian tribal
governments)'' and inserting ``described in either of the last
two sentences of subsection (d)''.
(2) Section 415(b)(2)(H)(i) of such Code is amended by
adding at the end the following: ``or a public safety agency
described in the last sentence of section 414(d),''.
(3) Section 415(b)(2)(H)(ii)(I) of such Code is amended by
striking ``or any political subdivision'' and inserting ``any
political subdivision, or a public safety agency described in
the last sentence of section 414(d)''.
(4) Section 415(b)(10)(A) of such Code is amended by
striking ``described in the last sentence of section 414(d)
(relating to plans of Indian tribal governments)'' and
inserting ``described in either of the last two sentences of
section 414(d)''.
(d) Effective Date.--The amendment made by this section shall apply
to plan years beginning after the date of the enactment of this Act.
TITLE II--PRESERVATION OF INCOME
SEC. 201. REMOVE REQUIRED MINIMUM DISTRIBUTION BARRIERS FOR LIFE
ANNUITIES.
(a) In General.--Paragraph (9) of section 401(a) of the Internal
Revenue Code of 1986 is amended by adding at the end the following new
subparagraph:
``(J) Certain increases in payments under a
commercial annuity.--Nothing in this section shall
prohibit a commercial annuity (within the meaning of
section 3405(e)(6)) that is issued in connection with
any eligible retirement plan (within the meaning of
section 402(c)(8)(B), other than a defined benefit
plan) from providing one or more of the following types
of payments on or after the annuity starting date:
``(i) annuity payments that increase by a
constant percentage, applied not less
frequently than annually, at a rate that is
less than 5 percent per year,
``(ii) a lump sum payment that--
``(I) results in a shortening of
the payment period with respect to an
annuity or a full or partial
commutation of the future annuity
payments, provided that such lump sum
is determined using reasonable
actuarial methods and assumptions, as
determined in good faith by the issuer
of the contract, or
``(II) accelerates the receipt of
annuity payments that are scheduled to
be received within the ensuing 12
months, regardless of whether such
acceleration shortens the payment
period with respect to the annuity,
reduces the dollar amount of benefits
to be paid under the contract, or
results in a suspension of annuity
payments during the period being
accelerated,
``(iii) an amount which is in the nature of
a dividend or similar distribution, provided
that the issuer of the contract determines such
amount based on a reasonable comparison of the
actuarial factors assumed when calculating the
initial annuity payments and the issuer's
experience with respect to those factors, or
``(iv) a final payment upon death that does
not exceed the excess of the total amount of
the consideration paid for the annuity
payments, less the aggregate amount of prior
distributions or payments from or under the
contract.''.
(b) Regulations and Enforcement.--
(1) Regulations.--By the date that is one year after the
date of enactment of this Act, the Secretary of the Treasury
shall amend the regulation issued by the Department of the
Treasury relating to ``Required Distributions from Retirement
Plans'', 69 Fed. Reg. 33288 (June 15, 2004), and make any
corresponding amendments to other regulations, in order to--
(A) conform such regulations to subsection (a),
including by eliminating the types of payments
described in subsection (a) from the scope of the
requirement in Q&A-14(c) of Treasury Regulation section
1.401(a)(9)-6 that the total future expected payments
must exceed the total value being annuitized;
(B) amend Q&A-14(c) of Treasury Regulation section
1.401(a)(9)-6 to provide that a commercial annuity that
provides an initial payment that is at least equal to
the initial payment that would be required from an
individual account pursuant to Treasury Regulation
section 1.401(a)(9)-5 will be deemed to satisfy the
requirement in Q&A-14(c) of Treasury Regulation section
1.401(a)(9)-6 that the total future expected payments
must exceed the total value being annuitized; and
(C) amend Q&A-14(e)(3) of Treasury Regulation
section 1.401(a)(9)-6 to provide that the total future
expected payments under a commercial annuity are
determined using the tables or other actuarial
assumptions that the issuer of the contract actually
uses in pricing the premiums and benefits with respect
to the contract, provided that such tables or other
actuarial assumptions are reasonable.
(2) Enforcement.--As of the date of enactment of this Act,
the Secretary of the Treasury shall administer and enforce the
law in accordance with subsections (a) and (b).
(c) Effective Date.--This section shall take effect on the date of
the enactment of this Act.
SEC. 202. QUALIFYING LONGEVITY ANNUITY CONTRACTS.
(a) In General.--Not later than the date which is 1 year after the
date of the enactment of this Act, the Secretary of the Treasury or the
Secretary's delegate (hereafter in this section referred to as the
``Secretary'') shall amend the regulation issued by the Department of
the Treasury relating to ``Longevity Annuity Contracts'' (79 Fed. Reg.
37633 (July 2, 2014)), as follows:
(1) Repeal 25-percent premium limit.--The Secretary shall
amend Q&A-17(b)(3) of Treasury Regulation section 1.401(a)(9)-6
and Q&A-12(b)(3) of Treasury Regulation section 1.408-8 to
eliminate the requirement that premiums for qualifying
longevity annuity contracts be limited to a percentage of an
individual's account balance, and to make such corresponding
changes to the regulations and related forms as are necessary
to reflect the elimination of this requirement.
(2) Increase dollar limitation.--
(A) In general.--The Secretary shall amend Q&A-
17(b)(2)(i) of Treasury Regulation section 1.401(a)(9)-
6 and Q&A-12(b)(2)(i) of Treasury Regulation section
1.408-8 to increase the dollar limitation on premiums
for qualifying longevity annuity contracts from
$125,000 to $200,000, and to make such corresponding
changes to the regulations and related forms as are
necessary to reflect this increase in the dollar
limitation.
(B) Adjustments for inflation.--The Secretary shall
amend Q&A-17(d)(2)(i) of Treasury Regulation section
1.401(a)(9)-6 to provide that, in the case of calendar
years beginning on or after January 1 of the second
year following the year of enactment of this Act, the
$200,000 dollar limitation (as increased by
subparagraph (A)) will be adjusted at the same time and
in the same manner as the limits are adjusted under
section 415(d) of the Internal Revenue Code of 1986,
except that the base period shall be the calendar
quarter beginning July 1 of the year of enactment of
this Act, and any increase to such dollar limitation
which is not a multiple of $10,000 will be rounded to
the next lowest multiple of $10,000.
(3) Facilitate joint and survivor benefits.--The Secretary
shall amend Q&A-17(c) of Treasury Regulation section
1.401(a)(9)-6, and make such corresponding changes to the
regulations and related forms as are necessary, to provide
that, in the case of a qualifying longevity annuity contract
which was purchased with joint and survivor annuity benefits
for the individual and the individual's spouse which were
permissible under the regulations at the time the contract was
originally purchased, a divorce occurring after the original
purchase and before the annuity payments commence under the
contract will not affect the permissibility of the joint and
survivor annuity benefits or other benefits under the contract,
or require any adjustment to the amount or duration of benefits
payable under the contract, provided that any qualified
domestic relations order (within the meaning of section 414(p)
of the Internal Revenue Code of 1986) or any divorce or
separation instrument (as defined in subsection (b))--
(A) provides that the former spouse is entitled to
the survivor benefits under the contract;
(B) does not modify the treatment of the former
spouse as the beneficiary under the contract who is
entitled to the survivor benefits; or
(C) does not modify the treatment of the former
spouse as the measuring life for the survivor benefits
under the contract.
(4) Permit short free look period.--The Secretary shall
amend Q&A-17(a)(4) of Treasury Regulation section 1.401(a)(9)-6
to ensure that such Q&A does not preclude a contract from
including a provision under which an employee may rescind the
purchase of the contract within a period not exceeding 90 days
from the date of purchase.
(b) Divorce or Separation Instrument.--For purposes of subsection
(a)(3), the term ``divorce or separation instrument'' means--
(1) a decree of divorce or separate maintenance or a
written instrument incident to such a decree,
(2) a written separation agreement, or
(3) a decree (not described in paragraph (1)) requiring a
spouse to make payments for the support or maintenance of the
other spouse.
(c) Effective Dates, Enforcement, and Interpretations.--
(1) Effective dates.--
(A) Paragraphs (1) and (2) of subsection (a) shall
be effective with respect to contracts purchased or
received in an exchange on or after the date of the
enactment of this Act.
(B) Paragraphs (3) and (4) of subsection (a) shall
be effective with respect to contracts purchased or
received in an exchange on or after July 2, 2014.
(2) Enforcement and interpretations.--Prior to the date on
which the Secretary issues final regulations pursuant to
subsection (a)--
(A) the Secretary (or delegate) shall administer
and enforce the law in accordance with subsection (a)
and the effective dates in paragraph (1) of this
subsection; and
(B) taxpayers may rely upon their reasonable good
faith interpretations of subsection (a).
SEC. 203. INSURANCE-DEDICATED EXCHANGE-TRADED FUNDS.
(a) In General.--Not later than the date which is 1 year after the
date of the enactment of this Act, the Secretary of the Treasury (or
the Secretary's delegate) shall amend the regulation issued by the
Department of the Treasury relating to ``Income Tax; Diversification
Requirements for Variable Annuity, Endowment, and Life Insurance
Contracts'', 54 Fed. Reg. 8728 (March 2, 1989), and make any necessary
corresponding amendments to other regulations, in order to facilitate
the use of exchange-traded funds as investment options under variable
contracts within the meaning of section 817(d) of the Internal Revenue
Code of 1986, in accordance with subsections (b) and (c) of this
section.
(b) Designate Certain Authorized Participants and Market Makers as
Eligible Investors.--The Secretary of the Treasury (or the Secretary's
delegate) shall amend Treas. Reg. section 1.817-5(f)(3) to provide that
satisfaction of the requirements in Treas. Reg. section 1.817-
5(f)(2)(i) with respect to an exchange-traded fund shall not be
prevented by reason of beneficial interests in such a fund being held
by 1 or more authorized participants or market makers.
(c) Confirm That Similarities to Other Funds Are Irrelevant.--The
Secretary of the Treasury (or the Secretary's delegate) shall amend
Treas. Reg. section 1.817-5(f) to confirm that, for Federal income tax
purposes, a regulated investment company, partnership, or trust
(including an exchange-traded fund) that satisfies the requirements of
Treas. Reg. section 1.817-5(f) (2) and (3) shall not be treated as
owned by the holder of a variable contract pursuant to the principles
of Rev. Rul. 81-225, 1981-2 C.B. 12, merely because another regulated
investment company, partnership, trust, or similar investment vehicle
follows the same investment strategy, has the same investment manager,
or holds the same investments.
(d) Define Relevant Terms.--In amending Treas. Reg. section 1.817-
5(f)(3) in accordance with subsections (b) and (c) of this section, the
Secretary of the Treasury (or the Secretary's delegate) shall provide
definitions consistent with the following:
(1) Exchange-traded fund.--The term ``exchange-traded
fund'' means a regulated investment company, partnership, or
trust--
(A) that is registered with the Securities and
Exchange Commission as an open-end investment company
or a unit investment trust;
(B) the shares of which can be purchased or
redeemed directly from the fund only by an authorized
participant; and
(C) the shares of which are traded throughout the
day on a national stock exchange at market prices that
may or may not be the same as the net asset value of
the shares.
(2) Authorized participant.--The term ``authorized
participant'' means a financial institution that is a member or
participant of a clearing agency registered under section
17A(b) of the Securities Exchange Act of 1934 that enters into
a contractual relationship with an exchange-traded fund
pursuant to which the financial institution is permitted to
purchase and redeem shares directly from the fund and to sell
such shares to third parties, but only if the contractual
arrangement or applicable law precludes the financial
institution from--
(A) purchasing the shares for its own investment
purposes rather than for the exclusive purpose of
creating and redeeming such shares on behalf of third
parties; and
(B) selling the shares to third parties who are not
market makers or otherwise described in Treas. Reg.
section 1.817-5(f) (1) and (3).
(3) Market maker.--The term ``market maker'' means a
financial institution that is a registered broker or dealer
under section 15(b) of the Securities Exchange Act of 1934 that
maintains liquidity for an exchange-traded fund on a national
stock exchange by being always ready to buy and sell shares of
such fund on the market, but only if the financial institution
is contractually or legally precluded from selling or buying
such shares to or from persons who are not authorized
participants or otherwise described in Treas. Reg. section
1.817-5(f) (2) and (3).
(e) Effective Dates, Enforcement, and Interpretations.--
(1) Effective dates.--
(A) Subsection (b).--Subsection (b), and the
definitions under subsection (d), shall apply to
segregated asset account investments made on or after
the earlier of--
(i) the date that is 18 months after the
date of the of enactment of this Act, or
(ii) the date on which the amendments to
regulations under subsection (b) are made.
(B) Subsection (c).--Subsection (c) shall apply to
taxable years beginning after the date of the enactment
of this Act.
(2) Enforcement and interpretations.--Prior to the date
that the Secretary of the Treasury (or the Secretary's
delegate) issues final regulations pursuant to this section--
(A) the Secretary (or delegate) shall administer
and enforce the law in accordance with this section and
the effective dates under paragraph (1), and
(B) taxpayers may rely upon their reasonable good
faith interpretations of the preceding subsections of
this section.
(3) No inference.--Nothing contained in the amendments to
regulations pursuant to subsection (c), or the administration
and enforcement of such subsection under paragraph (2), shall
be construed to create any inference as to a change in law or
guidance in effect prior to enactment of this section.
TITLE III--SIMPLIFICATION AND CLARIFICATION OF RETIREMENT PLAN RULES
SEC. 301. RECOVERY OF RETIREMENT PLAN OVERPAYMENTS.
(a) Overpayments Under Internal Revenue Code of 1986.--
(1) Qualification requirements.--Section 414 of the
Internal Revenue Code of 1986, as amended by the preceding
provisions of this Act, is further amended by adding at the end
the following new subsection:
``(bb) Special Rules Applicable to Benefit Overpayments.--
``(1) In general.--A plan shall not fail to be treated as
described in clause (i), (ii), (iii), or (iv) of section
219(g)(5)(A) (and shall not fail to be treated as satisfying
the requirements of section 401(a) or 403) merely because--
``(A) the plan fails to obtain payment from any
participant, beneficiary, employer, plan sponsor,
fiduciary, or other party on account of any inadvertent
benefit overpayment made by the plan, or
``(B) the plan sponsor amends the plan to increase
past or future benefit payments to affected
participants and beneficiaries in order to adjust for
prior inadvertent benefit overpayments.
``(2) Reduction in future benefit payments and recovery
from responsible party.--Paragraph (1) shall not fail to apply
to a plan merely because, after discovering a benefit
overpayment, such plan--
``(A) reduces future benefit payments to the
correct amount provided for under the terms of the
plan, or
``(B) seeks recovery from the person or persons
responsible for such overpayment.
``(3) Employer funding obligations.--Nothing in this
subsection shall relieve an employer of any obligation imposed
on it to make contributions to a plan to meet the minimum
funding standards under section 412 or to prevent or restore an
impermissible forfeiture in accordance with section 411.
``(4) Observance of benefit limitations.--Notwithstanding
paragraph (1), a plan to which paragraph (1) applies shall
observe any limitations imposed on it by section 401(a)(17) or
415. The plan may enforce such limitations using any method
approved by the Secretary for recouping benefits previously
paid or allocations previously made in excess of such
limitations.
``(5) Coordination with other qualification requirements.--
The Secretary may issue regulations or other guidance of
general applicability specifying how benefit overpayments and
their recoupment or non-recoupment from a participant or
beneficiary shall be taken into account for purposes of
satisfying any requirement applicable to a plan to which
paragraph (1) applies.''.
(2) Rollovers.--Section 402(c) of such Code is amended by
adding at the end the following new paragraph:
``(13) In the case of an inadvertent benefit overpayment
from a plan to which section 414(bb)(1) applies which is
transferred to an eligible retirement plan by or on behalf of a
participant or beneficiary--
``(A) the portion of such overpayment with respect
to which recoupment is not sought on behalf of the plan
shall be treated as having been paid in an eligible
rollover distribution if the payment would have been an
eligible rollover distribution but for being an
overpayment, and
``(B) the portion of such overpayment with respect
to which recoupment is sought on behalf of the plan
shall be permitted to be returned to such plan and in
such case shall be treated as an eligible rollover
distribution transferred to such plan by the
participant or beneficiary who received such
overpayment (and the plans making and receiving such
transfer shall be treated as permitting such transfer).
In any case in which recoupment is sought on behalf of the plan
but is disputed by the participant or beneficiary who received
such overpayment, such dispute shall be subject to the claims
and appeals procedures of the plan that made such overpayment,
such plan shall notify the plan receiving the rollover of such
dispute, and the plan receiving the rollover shall retain such
overpayment on behalf of the participant or beneficiary (and
shall be entitled to treat such overpayment as plan assets)
pending the outcome of such procedures.''.
(b) Overpayments Under ERISA.--Section 206 of the Employee
Retirement Income Security Act of 1974 (29 U.S.C. 1056) is amended by
adding at the end the following new subsection:
``(h) Special Rules Applicable to Benefit Overpayments.--
``(1) General rule.--In the case of an inadvertent benefit
overpayment by any pension plan, the responsible plan fiduciary
shall not be considered to have failed to comply with the
requirements of this title merely because such fiduciary
determines, in the exercise of its fiduciary discretion, not to
seek recovery of all or part of such overpayment from--
``(A) any participant or beneficiary,
``(B) any plan sponsor of, or contributing employer
to--
``(i) an individual account plan, provided
that the amount needed to prevent or restore
any impermissible forfeiture from any
participant's or beneficiary's account arising
in connection with the overpayment is,
separately from and independently of the
overpayment, allocated to such account pursuant
to the nonforfeitability requirements of
section 203 (for example, out of the plan's
forfeiture account, additional employer
contributions, or recoveries from those
responsible for the overpayment), or
``(ii) a defined benefit pension plan
subject to the funding rules in part 3 of this
subtitle B, unless the responsible plan
fiduciary determines, in the exercise of its
fiduciary discretion, that failure to recover
all or part of the overpayment faster than
required under such funding rules would
materially affect the plan's ability to pay
benefits due to other participants and
beneficiaries, or
``(C) any fiduciary of the plan, other than a
fiduciary (including a plan sponsor or contributing
employer acting in a fiduciary capacity) whose breach
of its fiduciary duties resulted in such overpayment,
provided that if the plan has established prudent
procedures to prevent and minimize overpayment of
benefits and the relevant plan fiduciaries have
followed such procedures, an inadvertent benefit
overpayment will not give rise to a breach of fiduciary
duty.
``(2) Reduction in future benefit payments and recovery
from responsible party.--Paragraph (1) shall not fail to apply
with respect to any inadvertent benefit overpayment merely
because, after discovering such overpayment, the responsible
plan fiduciary--
``(A) reduces future benefit payments to the
correct amount provided for under the terms of the
plan, or
``(B) seeks recovery from the person or persons
responsible for the overpayment.
``(3) Employer funding obligations.--Nothing in this
subsection shall relieve an employer of any obligation imposed
on it to make contributions to a plan to meet the minimum
funding standards under part 3 of this subtitle B or to prevent
or restore an impermissible forfeiture in accordance with
section 203.
``(4) Recoupment from participants and beneficiaries.--If
the responsible plan fiduciary, in the exercise of its
fiduciary discretion, decides to seek recoupment from a
participant or beneficiary of all or part of an inadvertent
benefit overpayment made by the plan to such participant or
beneficiary, it may do so, subject to the following conditions:
``(A) No interest or other additional amounts (such
as collection costs or fees) are sought on overpaid
amounts.
``(B) If the plan seeks to recoup past overpayments
of a non-decreasing periodic benefit by reducing future
benefit payments--
``(i) the reduction ceases after the plan
has recovered the full dollar amount of the
overpayment,
``(ii) the amount recouped each calendar
year does not exceed 10 percent of the full
dollar amount of the overpayment, and
``(iii) future benefit payments are not
reduced to below 90 percent of the periodic
amount otherwise payable under the terms of the
plan.
Alternatively, if the plan seeks to recoup past
overpayments of a non-decreasing periodic benefit
through one or more installment payments, the sum of
such installment payments in any calendar year does not
exceed the sum of the reductions that would be
permitted in such year under the preceding sentence.
``(C) If the plan seeks to recoup past overpayments
of a benefit other than a non-decreasing periodic
benefit, the plan satisfies requirements developed by
the Secretary of the Treasury for purposes of this
subparagraph.
``(D) Efforts to recoup overpayments are not made
through a collection agency or similar third party and
such efforts are not accompanied by threats of
litigation, unless the responsible plan fiduciary
reasonably believes it could prevail in a civil action
brought in Federal or State court to recoup the
overpayments.
``(E) Recoupment of past overpayments to a
participant is not sought from any beneficiary of the
participant, including a spouse, surviving spouse,
former spouse, or other beneficiary.
``(F) Recoupment may not be sought if the first
overpayment occurred more than 3 years before the
participant or beneficiary is first notified in writing
of the error.
``(G) A participant or beneficiary from whom
recoupment is sought is entitled to contest all or part
of the recoupment pursuant to the plan's claims and
appeals procedures.
``(H) In determining the amount of recoupment to
seek, the responsible plan fiduciary may take into
account the hardship that recoupment likely would
impose on the participant or beneficiary.
``(5) Effect of culpability.--Subparagraphs (A) through (F)
of paragraph (4) shall not apply to protect a participant or
beneficiary who is culpable. For purposes of this paragraph, a
participant or beneficiary is culpable if the individual bears
responsibility for the overpayment (such as through
misrepresentations or omissions that led to the overpayment),
or if the individual knew, or had good reason to know under the
circumstances, that the benefit payment or payments were
materially in excess of the correct amount. Notwithstanding the
preceding sentence, an individual is not culpable merely
because the individual believed the benefit payment or payments
were or might be in excess of the correct amount, if the
individual raised that question with an authorized plan
representative and was told the payment or payments were not in
excess of the correct amount. With respect to a culpable
participant or beneficiary, efforts to recoup overpayments
shall not be made through threats of litigation, unless a
lawyer for the plan could make the representations required
under Rule 11 of the Federal Rules of Civil Procedure if the
litigation were brought in Federal court.''.
(c) Effective Date.--The amendments made by this section shall
apply as of the date of the enactment of this Act.
(d) Certain Actions Before Date of Enactment.--Plans, fiduciaries,
employers, and plan sponsors are entitled to rely on--
(1) a good faith interpretation of then existing
administrative guidance for inadvertent benefit overpayment
recoupments and recoveries that commenced before the date of
enactment of this Act, and
(2) determinations made before such date of enactment by
the responsible plan fiduciary, in the exercise of its
fiduciary discretion, not to seek recoupment or recovery of all
or part of an inadvertent benefit overpayment.
In the case of a benefit overpayment that occurred prior to the date of
enactment of this Act, any installment payments by the participant or
beneficiary to the plan or any reduction in periodic benefit payments
to the participant or beneficiary, which were made in recoupment of
such overpayment and which commenced prior to such date, may continue
after such date. Nothing in this subsection shall relieve a fiduciary
from responsibility for an overpayment that resulted from a breach of
its fiduciary duties.
SEC. 302. REDUCTION IN EXCISE TAX ON CERTAIN ACCUMULATIONS IN QUALIFIED
RETIREMENT PLANS.
(a) In General.--Subsection (a) of section 4974 of the Internal
Revenue Code of 1986 is amended by striking ``50 percent'' and
inserting ``25 percent''.
(b) Reduction in Excise Tax on Failures To Take Required Minimum
Distributions.--Section 4974 of such Code is amended by adding at the
end the following new subsection:
``(e) Reduction of Tax in Certain Cases.--
``(1) Reduction.--In the case of a taxpayer who--
``(A) corrects, during the correction window, a
shortfall of distributions from an individual
retirement plan which resulted in imposition of a tax
under subsection (a), and
``(B) submits a return, during the correction
window, reflecting such tax (as modified by this
subsection),
the first sentence of subsection (a) shall be applied by
substituting `10 percent' for `25 percent'.
``(2) Correction window.--For purposes of this subsection,
the term `correction window' means the period of time beginning
on the date on which the tax under subsection (a) is imposed
with respect to a shortfall of distributions from an individual
retirement plan, and ending on the earlier of--
``(A) the date on which the Secretary initiates an
audit, or otherwise demands payment, with respect to
the shortfall of distributions, or
``(B) the last day of the second taxable year that
begins after the end of the taxable year in which the
tax under subsection (a) is imposed.''.
(c) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2020.
SEC. 303. PERFORMANCE BENCHMARKS FOR ASSET ALLOCATION FUNDS.
(a) In General.--Not later than 6 months after the date of the
enactment of this Act, the Secretary of Labor (or the Secretary's
delegate) shall modify the regulations under section 404 of the
Employee Retirement Income Security Act of 1974 (29 U.S.C. 1104) to
provide that, in the case of a designated investment alternative which
contains a mix of asset classes, a plan administrator may, but is not
required to, use a benchmark which is a blend of different broad-based
securities market indices if--
(1) the blend is reasonably representative of the asset
class holdings of the designated investment alternative;
(2) for purposes of determining the blend's returns for 1-,
5-, and 10-calendar-year periods (or for the life of the
alternative, if shorter), the blend is modified at least once
per year to reflect changes in the asset class holdings of the
designated investment alternative;
(3) the blend is furnished to participants and
beneficiaries in a manner that is reasonably designed to be
understandable and helpful; and
(4) each securities market index which is used for an
associated asset class would separately satisfy the
requirements of such regulations for such asset class.
(b) Study.--Not later than December 31, 2021, the Secretary of
Labor (or the Secretary's delegate) shall deliver a report to the
Committees on Ways and Means and Education and Labor of the House of
Representatives and the Committees on Finance and Health, Education,
Labor, and Pensions of the Senate regarding the effectiveness of the
benchmarking requirements under section 2550.404a-5 of title 29, Code
of Federal Regulations.
SEC. 304. REVIEW AND REPORT TO THE CONGRESS RELATING TO REPORTING AND
DISCLOSURE REQUIREMENTS.
(a) Study.--As soon as practicable after the date of the enactment
of this Act, the Secretary of Labor, the Secretary of the Treasury, and
the Pension Benefit Guaranty Corporation shall review the reporting and
disclosure requirements of--
(1) title I of the Employee Retirement Income Security Act
of 1974 applicable to pension plans (as defined in section 3(2)
of such Act); and
(2) the Internal Revenue Code of 1986 applicable to
qualified retirement plans (as defined in section 4974(c) of
such Code without regard to paragraphs (4) and (5) thereof).
(b) Report.--Not later than 18 months after the date of the
enactment of this Act, the Secretary of Labor, the Secretary of the
Treasury, and the Pension Benefit Guaranty Corporation, jointly, and
after consultation with a balanced group of participant and employer
representatives, shall with respect to plans referenced in subsection
(a) report on the effectiveness of the applicable reporting and
disclosure requirements and make such recommendations as may be
appropriate to the appropriate committees of the Congress to
consolidate, simplify, standardize, and improve such requirements so as
to simplify reporting for such plans and ensure that plans can simply
furnish and participants and beneficiaries timely receive and better
understand the information they need to monitor their plans, plan for
retirement, and obtain the benefits they have earned. Such report shall
assess the extent to which retirement plans are retaining disclosures,
work records, and plan documents that are needed to ensure accurate
calculation of future benefits. To assess the effectiveness of the
applicable reporting and disclosure requirements, the report shall
include an analysis, based on plan data, of how participants and
beneficiaries are providing preferred contact information, the methods
by which plan sponsors and plans are furnishing disclosures, and the
rate at which participants and beneficiaries (grouped by key
demographics) are receiving, accessing, and retaining disclosures. The
agencies shall conduct appropriate surveys and data collection to
obtain any needed information.
SEC. 305. ELIMINATING UNNECESSARY PLAN REQUIREMENTS RELATED TO
UNENROLLED PARTICIPANTS.
(a) Amendment of Internal Revenue Code of 1986.--Section 414 of the
Internal Revenue Code of 1986, as amended by the preceding provisions
of this Act, is further amended by adding at the end the following new
subsection:
``(cc) Eliminating Unnecessary Plan Requirements Related to
Unenrolled Participants.--
``(1) In general.--Notwithstanding any other provision of
this title, with respect to any defined contribution plan, no
disclosure, notice, or other plan document (other than the
notices and documents described in subparagraphs (A) and (B))
shall be required to be furnished under this title to any
unenrolled participant if the unenrolled participant receives--
``(A) in connection with the annual open season
election period with respect to the plan or, if there
is no such period, within a reasonable period prior to
the beginning of each plan year, an annual reminder
notice (in paper format, or in any electronic format
consented to by the participant) of such participant's
eligibility to participate in such plan and any
applicable election deadlines under the plan, and
``(B) any document requested by such participant
which the participant would be entitled to receive
without regard to this subsection.
``(2) Unenrolled participant.--For purposes of this
subsection, the term `unenrolled participant' means an employee
who--
``(A) is eligible to participate in a defined
contribution plan,
``(B) has been furnished all required notices,
disclosures, and other plan documents required to be
furnished under this title and the summary plan
description as provided in section 104(b) of the
Employee Retirement Income Security Act of 1974 in
connection with such participant's initial eligibility
to participate in such plan,
``(C) is not participating in such plan, and
``(D) does not have a balance in the plan.
For purposes of this subsection, any eligibility to participate
in the plan following any period for which such employee was
not eligible to participate shall be treated as initial
eligibility.
``(3) Annual reminder notice.--For purposes of this
subsection, the term `annual reminder notice' means the notice
described in section 111(c) of the Employee Retirement Income
Security Act of 1974.''.
(b) Amendment of Employee Retirement Income Security Act of 1974.--
(1) In general.--Part 1 of subtitle B of subchapter I of
the Employee Retirement Income Security Act of 1974 is amended
by redesignating section 111 as section 112 and by inserting
after section 110 the following new section:
``SEC. 111. ELIMINATING UNNECESSARY PLAN REQUIREMENTS RELATED TO
UNENROLLED PARTICIPANTS.
``(a) In General.--Notwithstanding any other provision of this
title, with respect to any individual account plan, no disclosure,
notice, or other plan document (other than the notices and documents
described in paragraphs (1) and (2)) shall be required to be furnished
under this title to any unenrolled participant if the unenrolled
participant receives--
``(1) in connection with the annual open season election
period with respect to the plan or, if there is no such period,
within a reasonable period prior to the beginning of each plan
year, an annual reminder notice of such participant's
eligibility to participate in such plan and any applicable
election deadlines under the plan; and
``(2) any document requested by such participant which the
participant would be entitled to receive without regard to this
section.
``(b) Unenrolled Participant.--For purposes of this section, the
term `unenrolled participant' means an employee who--
``(1) is eligible to participate in an individual account
plan;
``(2) has received all required notices, disclosures, and
other plan documents, including the summary plan description,
required to be furnished under this title in connection with
such participant's initial eligibility to participate in such
plan;
``(3) is not participating in such plan; and
``(4) does not have a balance in the plan.
For purposes of this section, any eligibility to participate in the
plan following any period for which such employee was not eligible to
participate shall be treated as initial eligibility.
``(c) Annual Reminder Notice.--For purposes of this section, the
term `annual reminder notice' means a notice provided in accordance
with section 2520.104b-1 of title 29, Code of Federal Regulations (or
any successor regulation), which--
``(1) is furnished in connection with the annual open
season election period with respect to the plan or, if there is
no such period, is furnished within a reasonable period prior
to the beginning of each plan year;
``(2) notifies the unenrolled participant of--
``(A) the unenrolled participant's eligibility to
participate in the plan; and
``(B) the key benefits under the plan and the key
rights and features under the plan affecting such
benefits; and
``(3) provides such information in a prominent manner
calculated to be understood by the average participant.''.
(2) Clerical amendment.--The table of contents in section 1
of the Employee Retirement Income Security Act of 1974 is
amended by striking the item relating to section 111 and by
inserting after the item relating to section 110 the following
new items:
``Sec. 111. Eliminating unnecessary plan requirements related to
unenrolled participants.
``Sec. 112. Repeal and effective date.''.
(c) Effective Date.--The amendments made by this section shall
apply to plan years beginning after December 31, 2020.
SEC. 306. RETIREMENT SAVINGS LOST AND FOUND.
(a) Retirement Savings Lost and Found.--
(1) Establishment.--
(A) In general.--Not later than 2 years after the
date of the enactment of this Act, the Secretary of
Labor, the Secretary of the Treasury, and the Secretary
of Commerce, in cooperation, shall establish an Office
of the Retirement Savings Lost and Found, which shall
develop and maintain an online searchable database (to
be managed by the Pension Benefit Guaranty Corporation)
of unclaimed vested benefits of participants and
beneficiaries in plans--
(i) to allow an individual to search for
information that enables the individual to
locate the plan administrator of any plans with
respect to which the individual is a
participant or beneficiary, and to provide
contact information for the plan administrator
of any plan described in subparagraph (B) with
respect to which the individual may be entitled
to a benefit;
(ii) to allow the corporation to assist
such an individual in locating any plan of the
individual; and
(iii) to allow the corporation to make any
necessary changes to contact information on
record for the plan administrator based on any
changes to the plan due to merger or
consolidation of the plan with any other plan,
division of the plan into two or more plans,
bankruptcy, termination, change in name of the
plan, change in name or address of the plan
administrator, or other causes.
The Retirement Savings Lost and Found established under
this paragraph shall contain the information obtained
by the corporation from the Internal Revenue Service
regarding deferred vested benefits of separated
participants and beneficiaries in plans as reported
under section 6057(d) of the Internal Revenue Code of
1986, as amended by this subsection, and the
information on missing participants collected as part
of the corporation's Missing Participant Program
established under section 4050 of the Employee
Retirement Income Security Act of 1974.
(B) Plans described.--A plan described in this
subparagraph is a plan to which the vesting standards
of section 203 of part 2 of subtitle B of title I of
the Employee Retirement Income Security Act of 1974
apply.
(2) Administration.--The Retirement Savings Lost and Found
established under paragraph (1) shall provide individuals
described in paragraph (1)(A) only with the ability to view
contact information for the plan administrator of any plan with
respect to which the individual is a participant or
beneficiary, sufficient to allow the individual to locate the
individual's plan in order to recover any benefit owing to the
individual under the plan.
(3) Current information.--
(A) In general.--Paragraph (2) of section 6057(a)
of the Internal Revenue Code of 1986 is amended--
(i) in subparagraph (C)--
(I) by striking ``during such plan
year'' in clause (i) and inserting
``during the plan year immediately
preceding such plan year'';
(II) by adding ``and'' at the end
of clause (i); and
(III) by striking clause (iii);
(ii) by redesignating subparagraph (E) as
subparagraph (G);
(iii) by striking ``and'' at the end of
subparagraph (D); and
(iv) by inserting after subparagraph (D)
the following new subparagraphs:
``(E) the name and taxpayer identifying number of
each participant or former participant in the plan--
``(i) who, during any previous plan year,
was reported under subparagraph (C), and with
respect to whom the benefits described in
subparagraph (C)(ii) were fully paid during the
plan year,
``(ii) with respect to whom any amount was
distributed under section 401(a)(31)(B) during
the plan year, or
``(iii) with respect to whom a deferred
annuity contract was distributed during the
plan year,
``(F) in the case of a participant or former
participant to whom subparagraph (E) applies--
``(i) in the case of a participant
described in clause (ii) thereof, the name and
address of the designated trustee or issuer
described in section 401(a)(31)(B)(i) and the
account number of the individual retirement
plan to which the amount was distributed, and
``(ii) in the case of a participant
described in clause (iii) thereof, the name and
address of the issuer of such annuity contract
and the contract or certificate number, and''.
(B) Rules relating to direct trustee-to-trustee
transfers.--
(i) In general.--Paragraph (6) of section
402(e) of such Code is amended--
(I) by striking ``transfers.--Any''
and inserting ``transfers.--
``(A) In general.--Any''; and
(II) by adding at the end the
following new subparagraph:
``(B) Notification of trustee.--In the case of a
distribution under section 401(a)(31)(B), the plan
administrator shall notify the designated trustee or
issuer described in clause (i) thereof that the
transfer is a mandatory distribution required by such
section.''.
(ii) Penalty.--Subsection (i) of section
6652 of such Code is amended--
(I) by striking ``to Recipients''
in the heading and inserting ``or
Notification'';
(II) by striking ``402(f),'' and
inserting ``402(f) or a notification as
required by section 402(e)(6)(B),'';
and
(III) by striking ``such written
explanation'' and inserting ``such
written explanation or notification''.
(iii) Reports.--Subsection (i) of section
408 of such Code is amended--
(I) by redesignating subparagraphs
(A) and (B) of paragraph (2) as clauses
(i) and (ii), respectively, and by
moving such clauses 2 ems to the right;
(II) by redesignating paragraphs
(1) and (2) as subparagraphs (A) and
(B), respectively, and by moving such
subparagraphs 2 ems to the right; and
(III) by striking ``as the
Secretary prescribes'' in subparagraph
(B)(ii), as so redesignated, and all
that follows through ``a simple
retirement account'' and inserting ``as
the Secretary prescribes.
``(3) Simple retirement accounts.--In the case of a simple
retirement account'';
(IV) by striking ``Reports.--The
trustee of'' and inserting ``Reports.--
``(1) In general.--The trustee of'';
(V) by striking ``under paragraph
(2)'' in paragraph (3), as redesignated
by clause (iii), and inserting ``under
paragraph (1)(B)''; and
(VI) by inserting after paragraph
(1)(B)(ii), as redesignated by the
preceding clauses, the following new
paragraph:
``(2) Mandatory distributions.--In the case of an account,
contract, or annuity to which a transfer under section
401(a)(31)(B) is made (including a transfer from the individual
retirement plan to which the original transfer under such
section was made to another individual retirement plan), the
report required by this subsection for the year of the transfer
shall--
``(A) identify such transfer as a mandatory
distribution required by such section,
``(B) include the name, address, and taxpayer
identifying number of the trustee or issuer of the
individual retirement plan to which the amount is
transferred, and
``(C) be filed with the Pension Benefit Guaranty
Corporation as well as with the Secretary.''.
(C) Notification of participants upon separation.--
Subsection (e) of section 6057 of such Code is amended
by inserting ``, and a notice of the availability of,
and the contact information for, the Retirement Savings
Lost and Found established under section 306(a)(1) of
the Securing a Strong Retirement Act of 2020'' before
the period at the end of the second sentence.
(D) Effective date.--The amendments made by this
paragraph shall apply to distributions made in, and
returns and reports relating to, years beginning after
the second December 31 occurring after the date of the
enactment of this Act.
(4) Coordination with distribution requirements, fiduciary
duties, etc.--
(A) Amendment of internal revenue code of 1986.--
Paragraph (9) of section 401(a) of the Internal Revenue
Code of 1986, as amended by the preceding provisions of
this Act, is further amended by adding at the end the
following new subparagraph:
``(K) Coordination with retirement savings lost and
found.--
``(i) In general.--With respect to any lost
or missing participant of a plan, the plan
shall not be treated as failing to satisfy the
requirements of this paragraph or any other
requirement of this title which cannot be
satisfied due to the plan's inability to locate
the participant.
``(ii) Lost or missing participant.--For
purposes of subclause (i), the term `lost or
missing participant' shall be defined in
guidance to be issued jointly by the Internal
Revenue Service, Department of the Treasury,
the Employee Benefits Security Administration,
Department of Labor, and the Pension Benefit
Guaranty Corporation. Such guidance shall be so
issued not later than 1 year after the date of
the enactment of this subparagraph.''.
(B) Amendment of employee retirement income
security act of 1974.--
(i) In general.--Section 404 of the
Employee Retirement Income Security Act of 1974
(29 U.S.C. 1104) is amended by adding at the
end the following new subsection:
``(e) Coordination With Retirement Savings Lost and Found.--
``(1) In general.--With respect to any lost or missing
participant of a plan, a fiduciary of the plan shall not be
treated as failing to satisfy any requirement to search for or
attempt to locate, or to provide any document or information
to, such individual, or any other requirement of this title
which cannot be satisfied due to the plan's inability to locate
the participant.
``(2) Lost or missing participant.--For purposes of
paragraph (1), the term `lost or missing participant' shall be
defined in guidance to be issued jointly by the Internal
Revenue Service, Department of the Treasury, the Employee
Benefits Security Administration, Department of Labor, and the
Pension Benefit Guaranty Corporation.''.
(ii) Conforming amendments.--Section
4050(a)(1) of the Employee Retirement Income
Security Act of 1974 (29 U.S.C. 1350(a)(1)) is
amended in subparagraph (B)--
(I) by striking ``provides'' and
inserting ``either--
``(i) provides'';
(II) by striking the period at the
end and inserting ``; or''; and
(III) by adding at the end the
following new clause:
``(ii) satisfies the requirements of
section 6057(a) of the Internal Revenue Code of
1986.''.
(5) Requirement of electronic filing.--
(A) In general.--Paragraph (2) of section 6011(e)
of the Internal Revenue Code of 1986 is amended--
(i) by redesignating subparagraphs (A) and
(B) as clauses (i) and (ii), respectively, and
by moving such clauses 2 ems to the right;
(ii) by striking ``the requirements of such
regulations'' and all that follows through
``the Secretary shall require'' and inserting
``the requirements of such regulations.
``(B) Certain partnerships.--Notwithstanding
subparagraph (A), the Secretary shall require'';
(iii) by striking ``regulations.--In
prescribing'' and inserting ``regulations.--
``(A) In general.--In prescribing''; and
(iv) by adding at the end the following new
subparagraph:
``(C) Exceptions.--Notwithstanding subparagraph
(A), the Secretary shall require returns or reports
required under--
``(i) sections 6057, 6058, and 6059, and
``(ii) sections 408(i), 6041, and 6047 to
the extent such return or report relates to the
tax treatment of a distribution from a plan,
account, contract, or annuity,
to be filed on magnetic media, but only with respect to
persons who are required to file at least 50 returns
during the calendar year which includes the first day
of the plan year to which such returns or reports
relate.''.
(B) Effective date.--The amendments made by this
paragraph shall apply to returns and reports relating
to years beginning after the second December 31
occurring after the date of the enactment of this Act.
(6) Safeguarding participant privacy and security.--In
establishing the Retirement Savings Lost and Found under
paragraph (1), the Secretary of Labor, the Secretary of
Treasury, and the Secretary of Commerce shall take all
necessary and proper precautions to ensure that individuals'
plan information maintained by the Retirement Savings Lost and
Found is protected and that persons other than the individual
cannot fraudulently claim the benefits to which any individual
is entitled, and to allow any individual to opt out of
inclusion in the Retirement Savings Lost and Found at the
election of the individual.
(7) Authorization of appropriations.--There are authorized
to be appropriated such sums as may be necessary to carry out
the purposes of this subsection.
(b) Mandatory Transfers of Rollover Distributions.--
(1) Investment options.--
(A) In general.--Subparagraph (B) of section
404(c)(3) of the Employee Retirement Income Security
Act of 1974 (29 U.S.C. 1104(c)(3)) is amended by
striking the period at the end and inserting ``, and,
to the extent the Secretary provides in guidance or
regulations issued after the enactment of the Securing
a Strong Retirement Act of 2020, is made to--
``(i) a target date or life cycle fund held
under such account;
``(ii) as described in section 2550.404a-2
of title 29, Code of Federal Regulations, an
investment product held under such account
designed to preserve principal and provide a
reasonable rate of return;
``(iii) the Pension Benefit Guaranty
Corporation in accordance with section
401(a)(31)(B)(iv) of the Internal Revenue Code
of 1986 and section 306(c)(2)(A)(ii) of the
Securing a Strong Retirement Act of 2020; or
``(iv) such other option as the Secretary
may so provide.''.
(B) Regulations.--Not later than 270 days after the
date of the enactment of this Act, the Secretary of
Labor shall promulgate regulations identifying the
target date or life cycle funds, or specifying the
characteristics of such a fund, that will be deemed to
meet the requirements of section 404(c)(3)(B)(i) of the
Employee Retirement Income Security Act of 1974 (29
U.S.C. 1104(c)(3)(B)), as amended by subparagraph (A).
(2) Expansion of cap; authority to transfer lesser
amounts.--
(A) Cap.--Sections 401(a)(31)(B)(ii) and
411(a)(11)(A) of the Internal Revenue Code of 1986 and
section 203(e)(1) of the Employee Retirement Income
Security Act of 1974 are each amended by striking
``$5,000'' and inserting ``$6,000''.
(B) Distribution of larger amounts to individual
retirement plans only.--Section 401(a)(31)(B)(i) of
such Code is amended by adding at the end the
following: ``The Office of the Retirement Savings Lost
and Found established by Section 306 of the Securing a
Strong Retirement Act shall not be treated as a trustee
or issuer that is eligible to receive such
distributions.''.
(C) Lesser amounts.--Section 401(a)(31)(B) of such
Code is amended by adding at the end the following new
clauses:
``(iii) Treatment of lesser amounts.--In
the case of a trust which is part of an
eligible plan, such trust shall not be a
qualified trust under this section unless such
plan provides that, if a participant in the
plan separates from the service covered by the
plan and the nonforfeitable accrued benefit
described in clause (ii) is not in excess of
$1,000, the plan administrator shall (either
separately or as part of the notice under
section 402(f)) notify the participant that the
participant is entitled to such benefit or
attempt to pay the benefit directly to the
participant.
``(iv) Transfers to retirement savings lost
and found.--If, after a plan administrator
takes the action required under clause (iii),
the participant does not--
``(I) within 6 months of the
notification under such clause, make an
election under subparagraph (A) or
elect to receive a distribution of the
benefit directly, or
``(II) accept any direct payment
made under such clause within 6 months
of the attempted payment,
the plan administrator shall transfer the
amount of such benefit to the Office of the
Retirement Savings Lost and Found in accordance
with section 306(c)(2)(a)(ii) of the Securing a
Strong Retirement Act of 2020.
``(v) Income tax treatment of transfers to
retirement savings lost and found.--For
purposes of determining the income tax
treatment of transfers to the Office of the
Retirement Savings Lost and Found under clause
(iv)--
``(I) such a transfer shall be
treated as a transfer to an individual
retirement plan under clause (i), and
``(II) the distribution of such
amounts by the Office of the Retirement
Savings Lost and Found shall be treated
as a distribution from an individual
retirement plan.''.
(D) Effective date.--The amendments made by this
paragraph shall apply to vested benefits with respect
to participants who separate from service connected to
the plan in plan years beginning after the second
December 31 occurring after the date of the enactment
of this Act.
(c) Office of the Retirement Savings Lost and Found.--
(1) In general.--Not later than one year after the date of
the enactment of this Act, the Secretary of Labor, the
Secretary of Treasury, and the Secretary of Commerce shall
establish within the Pension Benefit Guaranty Corporation an
Office of the Retirement Savings Lost and Found to operate in
conjunction with section 4050 of the Employee Retirement Income
Security Act of 1974 (29 U.S.C. 1350).
(2) Responsibilities of office.--
(A) In general.--In addition to administering the
Retirement Savings Lost and Found under subsection (a)
and carrying out the duties described in clauses (ii)
and (iii) of subsection (a)(1)(A), the Office of the
Retirement Savings Lost and Found established under
this section shall--
(i) perform an annual audit of plan
information contained in the Retirement Savings
Lost and Found and ensure that such information
is current and accurate;
(ii) invest any amount transferred under
section 401(a)(31)(B)(iv) of the Internal
Revenue Code of 1986 in United States Treasury
securities;
(iii) upon application filed by the
participant or beneficiary in such form and
manner as may be prescribed in regulations, pay
to the participant or beneficiary the amount
transferred (or the appropriate survivor
benefit) either--
(I) in a single sum (plus
interest); or
(II) in such other form as is
specified in regulations; and
(iv) identify such amount as eligible to be
paid into an eligible retirement plan described
in section 402(c)(8)(B) of the Internal Revenue
Code of 1986.
(B) Option to contract.--The Office of the
Retirement Savings Lost and Found shall conduct an
analysis of the cost effectiveness of contracting with
a third party to carry out the responsibilities under
subparagraph (A) and, if the Pension Benefit Guaranty
Corporation determines that it would be more cost
effective to do so than to carry out such
responsibilities within the Office of the Retirement
Savings Lost and Found, the Director shall report to
the Committees on Finance and Health, Education, Labor,
and Pensions of the Senate and the Committees on Ways
and Means and Education and Labor of the House of
Representatives the intention to so contract.
(C) Option to prescribe protocols.--The Pension
Benefit Guaranty Corporation may establish protocols to
assist participants originally treated as lost or
missing in claiming their benefits under a plan.
(D) Coordination.--The Office of the Retirement
Savings Lost and Found shall coordinate with the Social
Security Administration, the Employee Benefits Security
Administration, and other applicable agencies to
integrate information and databases on lost, missing,
and inactive participants.
(d) Transmission of Information to Pension Benefit Guaranty
Corporation.--Section 6057 of the Internal Revenue Code of 1986, as
amended by the preceding provisions of this Act, is amended by
redesignating subsection (h) as subsection (i) and by inserting after
subsection (g) the following new subsection:
``(h) Transmission of Information to Director of Pension Benefit
Guaranty Corporation.--The Secretary shall transmit copies of any
statements, notifications, reports, or other information obtained by
him under this section to the Director of the Pension Benefit Guaranty
Corporation.''.
SEC. 307. EXEMPTION FROM REQUIRED MINIMUM DISTRIBUTION RULES FOR
INDIVIDUALS WITH CERTAIN ACCOUNT BALANCES.
(a) In General.--Section 401(a)(9) of the Internal Revenue Code of
1986, as amended by the preceding provisions of this Act, is further
amended by adding at the end the following new subparagraph:
``(L) Exception from required minimum distributions
during life of employee where assets do not exceed
$100,000.--
``(i) In general.--If, as of a measurement
date, the aggregate value of an employee's
entire interest under all defined contribution
plans does not exceed $100,000, then, during
any succeeding calendar year beginning before
the next measurement date, the requirements of
subparagraph (A) shall not apply with respect
to such employee.
``(ii) Defined contribution plan.--For
purposes of this subparagraph, the term
`defined contribution plan' has the same
meaning as when used in subparagraph (H).
``(iii) Limit on required minimum
distribution.--The required minimum
distribution determined under subparagraph (A)
for an employee under all defined contribution
plans shall not exceed an amount equal to the
excess of--
``(I) the aggregate value of an
employee's entire interest under such
plans on the last day of the calendar
year to which such distribution
relates, over
``(II) the dollar amount in effect
under clause (i) for such calendar
year.
The Secretary in regulations or other guidance
may provide how such amount shall be
distributed in the case of an individual with
more than one defined contribution plan.
``(iv) Measurement date.--For purposes of
this subparagraph, the term `measurement date'
means, with respect to any employee--
``(I) the last day of the calendar
year preceding the calendar year in
which the employee attains age 75, and
``(II) in the case of any employee
who (after a measurement date
determined under subclause (I) with
respect to such employee) receives
contributions, rollovers, or transfers
of amounts that were not previously
taken into account in applying this
subparagraph, the last day of the
calendar year in which such
contribution, rollover, or transfer was
so received.
``(v) Inflation adjustment.--In the case of
any calendar year beginning after 2020, the
$100,000 amount in clause (i) shall be
increased by an amount equal to--
``(I) such dollar amount,
multiplied by
``(II) the cost of living
adjustment determined under section
1(f)(3) for the calendar year,
determined by substituting `calendar
year 2019' for `calendar year 2016' in
subparagraph (A)(ii) thereof.
Any increase determined under this clause shall
be rounded to the next lowest multiple of
$5,000.
``(vi) Plan administrator reliance on
employee certification.--A defined contribution
plan described in clause (iii), (iv), (v), or
(vi) of section 402(c)(8)(B) shall not be
treated as failing to meet the requirements of
this paragraph in the case of any failure to
make a required minimum distribution for a
calendar year if--
``(I) the aggregate value of an
employee's entire interest under all
defined contribution plans of the
employer on the last day of the
calendar year to which such
distribution relates does not exceed
the dollar amount in effect for such
year under clause (i), and
``(II) the employee certifies that
the aggregate value of the employee's
entire interest under all defined
contribution plans on the most recent
measurement date with respect to the
employee (as determined by the employee
based on guidance provided by the
Secretary) did not exceed the dollar
amount in effect for such year under
clause (i).
``(vii) Aggregation rule.--All employers
treated as a single employer under subsection
(b), (c), (m), or (o) of section 414 shall be
treated as a single employer for purposes of
clause (v).''.
(b) Plan Administrator Reporting.--Section 6047 of such Code is
amended by redesignating subsection (h) as subsection (i) and by
inserting after subsection (g) the following new subsection:
``(h) Account Balance for Participants Who Have Attained Age 74.--
``(1) In general.--Not later than January 31 of each year,
the plan administrator (as defined in section 414(g)) of each
defined contribution plan (as defined in section 401(a)(9)(L))
shall make a return to the Secretary with respect to each
participant of such plan who has attained age 74 as of the end
of the preceding calendar year which states--
``(A) the name and plan number of the plan,
``(B) the name and address of the plan
administrator,
``(C) the name, address, and taxpayer
identification number of the participant, and
``(D) the account balance of such participant as of
the end of the preceding calendar year.
``(2) Statement furnished to participant.--Every person
required to make a return under paragraph (1) with respect to a
participant shall furnish a copy of such return to such
participant.
``(3) Application to individual retirement plans and
annuities.--In the case of an defined contribution plan
described in clause (i) or (ii) of section 402(c)(8)(B)--
``(A) any reference in this subsection to the plan
administrator shall be treated as a reference to the
trustee or issuer, as the case may be, and
``(B) any reference in this subsection to the
participant shall be treated as a reference to the
individual for whom such account or annuity is
maintained.''.
(c) Effective Date.--The amendments made by this section shall
apply to distributions required to be made in calendar years beginning
more than 120 days after the date of the enactment of this Act.
SEC. 308. EXPANSION OF EMPLOYEE PLANS COMPLIANCE RESOLUTION SYSTEM.
(a) In General.--Except as otherwise provided in the Internal
Revenue Code of 1986 or regulations prescribed by the Secretary of the
Treasury or the Secretary's delegate (referred to in this section as
the ``Secretary''), any eligible inadvertent failure to comply with the
rules applicable under section 401(a), 403(a), 403(b), 408(p), or
408(k) of such Code may be self-corrected under the Employee Plans
Compliance Resolution System (as described in Revenue Procedure 2019-19
or any successor guidance and hereafter in this section referred to as
the ``EPCRS''), except to the extent that such failure was identified
by the Secretary prior to any actions which demonstrate a commitment to
implement a self-correction. Revenue Procedure 2019-19 is deemed
amended as of the date of the enactment of this Act to provide that the
correction period under section 9.02 of such Revenue Procedure (or any
successor guidance) for an eligible inadvertent failure, except as
otherwise provided under such Code or in regulations prescribed by the
Secretary, is indefinite and has no last day, other than with respect
to failures identified by the Secretary prior to any self-correction as
described in the preceding sentence.
(b) Loan Errors.--In the case of an eligible inadvertent failure
relating to a loan from a plan to a participant--
(1) such failure may be self-corrected under subsection (a)
according to the rules of section 6.07 of Revenue Procedure
2019-19 (or any successor guidance), including the provisions
related to whether a deemed distribution must be reported on
Form 1099-R, and
(2) the Secretary of Labor shall treat any such failure
which is so self-corrected under subsection (a) as meeting the
requirements of the Voluntary Fiduciary Correction Program of
the Department of Labor if, with respect to the violation of
the fiduciary standards of the Employee Retirement Income
Security Act of 1974, there is a similar loan error eligible
for correction under EPCRS and the loan error is corrected in
such manner.
(c) EPCRS for IRAs.--The Secretary shall expand the EPCRS to allow
custodians of individual retirement plans (as defined in section
7701(a)(37) of the Internal Revenue Code of 1986) to address eligible
inadvertent failures for which the owner of an individual retirement
plan (as so defined) was not at fault, including (but not limited to)--
(1) waivers of the excise tax which would otherwise apply
under section 4974 of the Internal Revenue Code of 1986,
(2) under the self-correction component of the EPCRS,
waivers of the 60-day deadline for a rollover where the
deadline is missed for reasons beyond the reasonable control of
the account owner, and
(3) rules permitting a nonspouse beneficiary to return
distributions to an inherited individual retirement plan
described in section 408(d)(3)(C) of the Internal Revenue Code
of 1986 in a case where, due to an inadvertent error by a
service provider, the beneficiary had reason to believe that
the distribution could be rolled over without inclusion in
income of any part of the distributed amount.
(d) Required Minimum Distribution Corrections.--The Secretary shall
expand the EPCRS to allow plans to which such system applies and
custodians and owners of individual retirement plans to self-correct,
without an excise tax, any eligible inadvertent failures pursuant to
which a distribution is made no more than 180 days after it was
required to be made.
(e) Additional Safe Harbors.--The Secretary shall expand the EPCRS
to provide additional safe harbor means of correcting eligible
inadvertent failures described in subsection (a), including safe harbor
means of calculating the earnings which must be restored to a plan in
cases where plan assets have been depleted by reason of an eligible
inadvertent failure.
(f) Eligible Inadvertent Failure.--For purposes of this section--
(1) In general.--Except as provided in paragraph (2), the
term ``eligible inadvertent failure'' means a failure that
occurs despite the existence of practices and procedures
which--
(A) satisfy the standards set forth in section 4.04
of Revenue Procedure 2019-19 (or any successor
guidance), or
(B) satisfy similar standards in the case of an
individual retirement plan.
(2) Exception.--The term ``eligible inadvertent failure''
shall not include any failure which is egregious, relates to
the diversion or misuse of plan assets, or is directly or
indirectly related to an abusive tax avoidance transaction.
(g) Application of Certain Requirements for Correcting Errors.--
This section shall not apply to any failure unless the correction of
such failure under this section is made in conformity with the general
principles that apply to corrections of such failures under the
Internal Revenue Code of 1986, including regulations or other guidance
issued thereunder and including those principles and corrections set
forth in Revenue Procedure 2019-19 (or any successor guidance).''
SEC. 309. ELIMINATE THE ``FIRST DAY OF THE MONTH'' REQUIREMENT FOR
GOVERNMENTAL SECTION 457(B) PLANS.
(a) In General.--Paragraph (4) of section 457(b) of the Internal
Revenue Code of 1986 is amended to read as follows:
``(4) which provides that compensation--
``(A) in the case of an eligible employer described
in subsection (e)(1)(A), will be deferred only if an
agreement providing for such deferral has been entered
into before the compensation is currently available to
the individual, and
``(B) in any other case, will be deferred for any
calendar month only if an agreement providing for such
deferral has been entered into before the beginning of
such month,''.
(b) Effective Date.--The amendment made by this section shall apply
to taxable years beginning after the date of the enactment of this Act.
SEC. 310. ONE-TIME ELECTION FOR QUALIFIED CHARITABLE DISTRIBUTION TO
SPLIT-INTEREST ENTITY; INCREASE IN QUALIFIED CHARITABLE
DISTRIBUTION LIMITATION.
(a) Increase in Limitation.--Section 408(d)(8)(A) of the Internal
Revenue Code of 1986 is amended by striking ``$100,000'' and inserting
``$130,000''.
(b) One-Time Election for Qualified Charitable Distribution to
Split-Interest Entity.--Section 408(d)(8) of such Code is amended by
adding at the end the following new subparagraph:
``(F) One-time election for qualified charitable
distribution to split-interest entity.--
``(i) In general.--A taxpayer may for a
taxable year elect under this subparagraph to
treat as meeting the requirement of
subparagraph (B)(i) any distribution from an
individual retirement account which is made
directly by the trustee to a split-interest
entity, but only if--
``(I) an election is not in effect
under this subparagraph for a preceding
taxable year, and
``(II) such distribution meets the
requirements of clauses (iii) and (iv).
``(ii) Split-interest entity.--For purposes
of this subparagraph, the term `split-interest
entity' means--
``(I) a charitable remainder
annuity trust (as defined in section
664(d)(1)), but only if such trust is
funded exclusively by qualified
charitable distributions,
``(II) a charitable remainder
unitrust (as defined in section
664(d)(2)), but only if such unitrust
is funded exclusively by qualified
charitable distributions, or
``(III) a charitable gift annuity
(as defined in section 501(m)(5)), but
only if such annuity is funded
exclusively by qualified charitable
distributions and commences fixed
payments of 5 percent or greater not
later than 1 year from the date of
funding.
``(iii) Contributions must be otherwise
deductible.--A distribution meets the
requirement of this clause only if--
``(I) in the case of a distribution
to a charitable remainder annuity trust
or a charitable remainder unitrust, a
deduction for the entire value of the
remainder interest in the distribution
for the benefit of a specified
charitable organization would be
allowable under section 170 (determined
without regard to subsection (b)
thereof and this paragraph), and
``(II) in the case of a charitable
gift annuity, a deduction in an amount
equal to the amount of the distribution
reduced by the value of the annuity
described in section 501(m)(5)(B) would
be allowable under section 170
(determined without regard to
subsection (b) thereof and this
paragraph).
``(iv) Limitation on income interests.--A
distribution meets the requirements of this
clause only if--
``(I) no person holds an income
interest in the split-interest entity
other than the individual for whose
benefit such account is maintained, the
spouse of such individual, or both, and
``(II) the income interest in the
split-interest entity is nonassignable.
``(v) Special rules.--
``(I) Charitable remainder
trusts.--Notwithstanding section
664(b), distributions made from a trust
described in subclause (I) or (II) of
clause (ii) shall be treated as
ordinary income in the hands of the
beneficiary to whom the annuity
described in section 664(d)(1)(A) or
the payment described in section
664(d)(2)(A) is paid.
``(II) Charitable gift annuities.--
Qualified charitable distributions made
to fund a charitable gift annuity shall
not be treated as an investment in the
contract for purposes of section
72(c).''.
(c) Effective Date.--The amendment made by this section shall apply
to distributions made in taxable years ending after the date of the
enactment of this Act.
SEC. 311. RETIREMENT PLAN DISTRIBUTIONS FOR CHARITABLE PURPOSE.
(a) In General.--Section 402 of the Internal Revenue Code of 1986
is amended by adding at the end the following new subsection:
``(m) Distributions for Charitable Purposes.--
``(1) In general.--Gross income for any taxable year shall
not include so much of the aggregate amount of qualified
charitable distributions made with respect to a taxpayer during
such taxable year which does not exceed the applicable amount.
``(2) Qualified charitable distribution.--For purposes of
this subsection, the term `qualified charitable distribution'
means any distribution from a trust as defined in section
401(a) that is exempt from tax under 501(a)--
``(A) which is made directly by the plan to an
organization described in section 170(b)(1)(A) (other
than any organization described in section 509(a)(3) or
any fund or account described in section 4966(d)(2)),
and
``(B) which is made on or after the date that the
individual on whose behalf the distribution is made has
attained age 70\1/2\.
A distribution shall be treated as a qualified charitable
distribution only to the extent that the distribution would be
includible in gross income without regard to paragraph (1).
``(3) Special rules.--
``(A) In general.--Rules similar to the rules of
subparagraphs (C), (E), and (F) of section 408(d)(8)
shall apply for purposes of this subsection.
``(B) Application of section 72.--Rules similar to
the rules of section 408(d)(8)(D) shall apply for
purposes of this subsection, by taking into account all
amounts in the eligible retirement plan to which the
taxpayer has a nonforfeitable right in lieu of all
amounts in all individual retirement plans of the
individual.
``(4) Applicable amount.--For purposes of this subsection,
the term `applicable amount' means the excess of--
``(A) $130,000, over
``(B) the total amount of any distributions not
includible in gross income of the taxpayer for the
taxable year by reason of sections 403(d), 408(d)(8),
and 457(e)(19).''.
(b) SEPs and SIMPLEs.--Section 408(d)(8)(B) of such Code is amended
by striking ``(other than a plan described in subsection (k) or (p))''.
(c) Certain Annuity Plans.--Section 403 of such Code is amended by
adding at the end the following new subsection:
``(d) Distributions for Charitable Purposes.--The rules of section
402(m) shall apply to distributions under an annuity plan described in
subsection (a) or an annuity contract described in subsection (b).''.
(d) 457(b) Plans.--Subsection (e) of section 457 of such Code is
amended by adding at the end the following new paragraph:
``(19) Distributions for charitable purposes.--The rules of
section 402(m) shall apply to distributions under an eligible
deferred compensation plan established and maintained by an
employer described in subsection (e)(1)(A).''.
(e) Effective Date.--The amendments made by this section shall
apply to distributions made in taxable years ending after the date of
the enactment of this Act.
SEC. 312. DISTRIBUTIONS TO FIREFIGHTERS.
(a) In General.--Subparagraph (A) of section 72(t)(10) of the
Internal Revenue Code of 1986 is amended by striking ``414(d))'' and
inserting ``414(d)) or a distribution from a plan described in clause
(iii), (iv), or (vi) of section 402(c)(8)(B) to an employee who
provides firefighting services''.
(b) Conforming Amendment.--The heading of paragraph (10) of section
72(t) of such Code is amended--
(1) by striking ``qualified'', and
(2) by striking ``in governmental plans''.
(c) Effective Date.--The amendments made by this section shall
apply to distributions made after December 31, 2020.
SEC. 313. EXCLUSION OF CERTAIN DISABILITY-RELATED FIRST RESPONDER
RETIREMENT PAYMENTS.
(a) In General.--Part III of subchapter B of chapter 1 of the
Internal Revenue Code of 1986 is amended by inserting after section
139B the following new section:
``SEC. 139C. CERTAIN DISABILITY-RELATED FIRST RESPONDER RETIREMENT
PAYMENTS.
``(a) In General.--In the case of an individual who receives
qualified first responder retirement payments for any taxable year,
gross income shall not include so much of such payments as do not
exceed the annualized excludable disability amount with respect to such
individual.
``(b) Qualified First Responder Retirement Payments.--For purposes
of this section, the term `qualified first responder retirement
payments' means, with respect to any taxable year, any pension or
annuity which but for this section would be includible in gross income
for such taxable year and which is received--
``(1) from a plan described in clause (iii), (iv), (v), or
(vi) of section 402(c)(8)(B), and
``(2) in connection with such individual's qualified first
responder service.
``(c) Annualized Excludable Disability Amount.--For purposes of
this section--
``(1) In general.--The term `annualized excludable
disability amount' means, with respect to any individual, the
service-connected excludable disability amounts which are
properly attributable to the 12-month period immediately
preceding the date on which such individual attains retirement
age.
``(2) Service-connected excludable disability amount.--The
term `service-connected excludable disability amount' means
periodic payments received by an individual which--
``(A) are not includible in such individual's gross
income under section 104(a)(1),
``(B) are received in connection with such
individual's qualified first responder service, and
``(C) terminate when such individual attains
retirement age.
``(3) Special rule for partial-year payments.--In the case
of an individual who only receives service-connected excludable
disability amounts properly attributable to a portion of the
12-month period described in paragraph (1), such paragraph
shall be applied by multiplying such amounts by the ratio of
365 to the number of days in such period to which such amounts
were properly attributable.
``(d) Qualified First Responder Service.--For purposes of this
section, the term `qualified first responder service' means service as
a law enforcement officer, firefighter, paramedic, or emergency medical
technician.''.
(b) Clerical Amendment.--The table of sections for part III of
subchapter B of chapter 1 of such Code is amended by inserting after
the item relating to section 139B the following new item:
``Sec. 139C. Certain disability-related first responder retirement
payments.''.
(c) Effective Date.--The amendments made by this section shall
apply to amounts received with respect to taxable years beginning after
the date of the enactment of this Act.
SEC. 314. INDIVIDUAL RETIREMENT PLAN STATUTE OF LIMITATIONS FOR EXCISE
TAX ON EXCESS CONTRIBUTIONS, CERTAIN ACCUMULATIONS, AND
PROHIBITED TRANSACTIONS.
Section 6501(l) of the Internal Revenue Code of 1986 is amended--
(1) in paragraph (1), by inserting ``(other than with
respect to an individual retirement plan)'' after ``section
4975'', and
(2) by adding at the end the following new paragraph:
``(4) Individual retirement plans.--
``(A) In general.--For purposes of any tax imposed
by section 4973, 4974, or 4975 in connection with an
individual retirement plan, the return referred to in
this section shall be the income tax return filed by
the person on whom the tax under such section is
imposed for the year in which the act (or failure to
act) giving rise to the liability for such tax
occurred.
``(B) Rule in case of individuals not required to
file return.--In the case of a person who is not
required to file an income tax return for such year--
``(i) the return referred to in this
section shall be the income tax return that
such person would have been required to file
but for the fact that such person was not
required to file such return, and
``(ii) the 3-year period referred to in
subsection (a) with respect to the return shall
be deemed to begin on the date by which the
return would have been required to be filed
(excluding any extension thereof).''.
SEC. 315. REQUIREMENT TO PROVIDE PAPER STATEMENTS IN CERTAIN CASES.
(a) In General.--Section 105(a)(2) of the Employee Retirement
Income Security Act of 1974 (29 U.S.C. 1025(a)(2)) is amended--
(1) in subparagraph (A)(iv), by inserting ``subject to
subparagraph (E),'' before ``may be delivered''; and
(2) by adding at the end the following:
``(E) Provision of paper statements.--With respect
to at least 1 pension benefit statement furnished for a
calendar year with respect to an individual account
plan under paragraph (1)(A), and with respect to at
least 1 pension benefit statement furnished every 3
calendar years with respect to a defined benefit plan
under paragraph (1)(B), such statement shall be
furnished on paper in written form except--
``(i) in the case of a plan that furnishes
such statement in accordance with section
2520.104b-1(c) of title 29, Code of Federal
Regulations; or
``(ii) in the case of a plan that permits a
participant or beneficiary to request that the
statements referred to in the matter preceding
clause (i) be furnished by electronic delivery,
if the participant or beneficiary requests that
such statements be delivered electronically and
the statements are so delivered.''.
(b) Implementation.--
(1) In general.--The Secretary of Labor shall, not later
than July 1, 2021, update section 2520.104b-1(c) of title 29,
Code of Federal Regulations, to provide that a plan may furnish
the statements referred to in subparagraph (E) of section
105(a)(2) by electronic delivery only if, in addition to
meeting the other requirements under the regulations--
(A) such plan furnishes each participant, including
participants described in subparagraph (B), a one-time
initial notice on paper in written form, prior to the
electronic delivery of any pension benefit statement,
of their right to request that all documents required
to be disclosed under title I of the Employee
Retirement Income Security Act of 1974 be furnished on
paper in written form; and
(B) such plan furnishes each participant who is
separated from service with at least 1 pension benefit
statement on paper in written form for each calendar
year.
(2) Other guidance.--In implementing the amendment made by
subsection (a) with respect to a plan that discloses required
documents or statements electronically, in accordance with
applicable guidance governing electronic disclosure by the
Department of Labor (with the exception of section 2520.104b-
1(c) of title 29, Code of Federal Regulations), the Secretary
of Labor shall, not later than July 1, 2021, update such
guidance to the extent necessary to ensure that--
(A) a participant or beneficiary under such a plan
is permitted the opportunity to request that any
disclosure required to be delivered on paper under
applicable guidance by the Department of Labor shall be
furnished by electronic delivery;
(B) each paper statement furnished under such a
plan pursuant to the amendment shall include--
(i) an explanation of how to request that
all such statements, and any other document
required to be disclosed under title I of the
Employee Retirement Income Security Act of
1974, be furnished by electronic delivery; and
(ii) contact information for the plan
sponsor, including a telephone number;
(C) the plan may not charge any fee to a
participant or beneficiary for the delivery of paper
statements;
(D) each paper pension benefit statement shall
identify each plan document required to be disclosed
and shall include information about how a participant
or beneficiary may access each such document;
(E) each document required to be disclosed that is
furnished by electronic delivery under such a plan
shall include an explanation of how to request that all
such documents be furnished on paper in written form;
(F) a plan is permitted to furnish a duplicate
electronic statement in any case in which the plan
furnishes a paper statement; and
(G) furnishment of such a paper pension benefit
statement may be combined, in one document, with a
notice explaining electronic delivery of other
disclosure documents as a default selection and the
right to opt out of such electronic delivery, but only
if such paper statement is furnished prior to the
electronic delivery of any such statement.
(c) Effective Date.--The amendment made by subsection (a) shall
apply with respect to plan years beginning after December 31, 2021.
TITLE IV--TECHNICAL AMENDMENTS
SEC. 401. AMENDMENTS RELATING TO SETTING EVERY COMMUNITY UP FOR
RETIREMENT ENHANCEMENT ACT OF 2019.
(a) Technical Amendments.--
(1) Amendment relating to section 114.--Section
401(a)(9)(C)(iii) of the Internal Revenue Code of 1986 is
amended by striking ``employee to whom clause (i)(II) applies''
and inserting ``employee (other than an employee to whom clause
(i)(II) does not apply by reason of clause (ii))''.
(2) Amendment relating to section 116.--Section 4973(b) of
the Internal Revenue Code of 1986 is amended by adding at the
end of the flush matter the following: ``Such term shall not
include any designated nondeductible contribution (as defined
in subparagraph (C) of section 408(o)(2)) which does not exceed
the nondeductible limit under subparagraph (B) thereof by
reason of an election under section 408(o)(5).''.
(3) Effective date.--The amendments made by this section
shall take effect as if included in section of the Setting
Every Community Up for Retirement Enhancement Act of 2019 to
which the amendment relates.
(b) Clerical Amendment.--Section 72(t)(2)(H)(vi)(IV) of the
Internal Revenue Code of 1986 is amended by striking
``403(b)(7)(A)(ii)'' and inserting `` 403(b)(7)(A)(i)''.
TITLE V--ADMINISTRATIVE PROVISIONS
SEC. 501. PROVISIONS RELATING TO PLAN AMENDMENTS.
(a) In General.--If this section applies to any retirement plan or
contract amendment--
(1) such retirement plan or contract shall be treated as
being operated in accordance with the terms of the plan during
the period described in subsection (b)(2)(A); and
(2) except as provided by the Secretary of the Treasury (or
the Secretary's delegate), such retirement plan shall not fail
to meet the requirements of section 411(d)(6) of the Internal
Revenue Code of 1986 and section 204(g) of the Employee
Retirement Income Security Act of 1974 by reason of such
amendment.
(b) Amendments to Which Section Applies.--
(1) In general.--This section shall apply to any amendment
to any retirement plan or annuity contract which is made--
(A) pursuant to any amendment made by this Act or
pursuant to any regulation issued by the Secretary of
the Treasury or the Secretary of Labor (or a delegate
of either such Secretary) under this Act; and
(B) on or before the last day of the first plan
year beginning on or after January 1, 2022.
In the case of a governmental plan (as defined in section
414(d) of the Internal Revenue Code of 1986), this paragraph
shall be applied by substituting ``2024'' for ``2022''.
(2) Conditions.--This section shall not apply to any
amendment unless--
(A) during the period--
(i) beginning on the date the legislative
or regulatory amendment described in paragraph
(1)(A) takes effect (or in the case of a plan
or contract amendment not required by such
legislative or regulatory amendment, the
effective date specified by the plan); and
(ii) ending on the date described in
paragraph (1)(B) (as modified by the second
sentence of paragraph (1)) (or, if earlier, the
date the plan or contract amendment is
adopted),
the plan or contract is operated as if such plan or
contract amendment were in effect; and
(B) such plan or contract amendment applies
retroactively for such period.
<all>
Introduced in House
Introduced in House
Referred to the Committee on Ways and Means, and in addition to the Committees on Financial Services, and Education and Labor, 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 Committees on Financial Services, and Education and Labor, 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 Committees on Financial Services, and Education and Labor, 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.
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