[Congressional Bills 115th Congress]
[From the U.S. Government Publishing Office]
[H.R. 6990 Introduced in House (IH)]

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115th CONGRESS
  2d Session
                                H. R. 6990

     To create portable retirement and investment accounts for all 
                   Americans, and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                           September 28, 2018

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

_______________________________________________________________________

                                 A BILL


 
     To create portable retirement and investment accounts for all 
                   Americans, and for other purposes.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Portable Retirement and Investment 
Account Act of 2018'' or the ``PRIA Act of 2018''.

SEC. 2. PORTABLE RETIREMENT AND INVESTMENT ACCOUNT BOARD.

    (a) Establishment.--There is established a Portable Retirement and 
Investment Board (referred to in this Act as the ``Board'') to be 
headed by a Director (referred to in this Act as the ``Director'').
    (b) Membership.--
            (1) In general.--The Board shall consist of--
                    (A) 3 members appointed by the Secretary of the 
                Treasury;
                    (B) 3 members appointed by the Secretary of Labor;
                    (C) 2 members appointed by the Pension Benefit 
                Guaranty Corporation; and
                    (D) 1 member appointed by the Director of the 
                Bureau of Consumer Financial Protection.
            (2) Deadline for appointment.--The appointments described 
        under paragraph (1) shall be made not later than 1 year after 
        the date of the enactment of this Act.
            (3) Limitation.--In making appointments under paragraph 
        (1), the officials making such appointments shall coordinate to 
        ensure that not more than 5 members of the same political party 
        may serve on the Board at the same time.
            (4) Terms of office.--Each member of the Board shall hold 
        office for a term of 5 years and shall continue in office until 
        his successor is appointed in the same manner as the original 
        appointment was made. The terms of office of the members of the 
        Board first taking office after the date of the enactment of 
        this Act shall expire as follows: one at the end of 1 year, two 
        at the end of 2 years, two at the end of 3 years, two at the 
        end of 4 years, and two at the end of 5 years.
            (5) Vacancies.--Each member of the Board shall continue in 
        office until his successor is appointed in the same manner as 
        the original appointment was made. Any vacancy on the Board 
        shall be filled in the same manner as the initial appointment 
        was made, and members of the Board appointed to fill vacancies 
        shall be appointed for the remainder of such term.
    (c) Director.--
            (1) In general.--The Director shall be selected by the 
        President from among the members of the Board.
            (2) Authority to issue regulations.--The Director is 
        authorized to issue such regulations or other guidance as the 
        Director determines are necessary to carry out the purposes of 
        this Act.

SEC. 3. CONTRACTS TO PROVIDE PORTABLE RETIREMENT AND INVESTMENT 
              ACCOUNTS.

    (a) In General.--Not later than 1 year after the date of the 
enactment of this Act, the Director shall establish a program under 
which the Director shall award one contract each year on a competitive 
basis to an entity in the private sector to act as trustee of all 
portable retirement and investment accounts (as defined in section 223A 
of the Internal Revenue Code of 1986) established pursuant to section 
4(a)(2) during such year. Each amount in a portable retirement and 
investment account provided by a trustee pursuant to a contract under 
this subsection shall be invested in a lifecycle fund provided by the 
trustee as described in subsection (c). In awarding contracts to 
entities under this subsection, the Director shall consider--
            (1) the specific composition of the lifecycle funds 
        provided by such trustee;
            (2) the services to account holders offered by such 
        trustee, including available investment advice;
            (3) the fees charged by such trustee; and
            (4) the importance of maintaining a diversity of trustees.
    (b) Certification of Trustees.--The Director may not award a 
contract to an entity under subsection (a) unless the Director has 
certified such entity under this subsection. The Director shall 
establish certification criteria which shall include the following:
            (1) Expertise, including the professional qualifications, 
        business model, experience, and training of the trustee and any 
        service providers that the trustee intends to use.
            (2) Registration, licensing, and financial soundness 
        demonstrating that participant funds would be handled by a 
        regulated financial entity.
            (3) Reputation and customer service, including records of 
        comments or complaints from employers and participants, timely 
        consideration and resolution of complaints filed, and 
        independent rating or accreditations.
    (c) Lifecycle Fund.--A lifecycle fund described in this subsection 
is a fund that--
            (1) is comprised of an appropriate mix of index funds;
            (2) is automatically adjusted over time during the time 
        horizon of the fund;
            (3) strikes a balance between expected risk and return over 
        the time horizon of the fund; and
            (4) has an initial target retirement date that is 
        consistent with retirement at age 65.
    (d) Fiduciary Responsibility.--A trustee of a portable retirement 
and investment account shall act as a fiduciary to the account holder 
and shall discharge his duties with respect to the account in the sole 
interest of the account holder under rules similar to those applicable 
to an ERISA fiduciary under section 404 of the Employee Retirement 
Income Security Act of 1974 (29 U.S.C. 1104).

SEC. 4. ESTABLISHMENT; CONTRIBUTIONS.

    (a) Establishment.--
            (1) Portable retirement and investment account fund.--There 
        is established in the Treasury the Portable Retirement and 
        Investment Account Fund (in this Act referred to as the 
        ``Fund''). The Board shall, to the greatest extent practicable 
        and consistent with the requirements of this Act, manage the 
        Fund in the same manner as the Thrift Savings Fund established 
        under section 8437 of title 5, United States Code.
            (2) Accounts.--For each individual for whom a notification 
        is made under clause (iv) of section 205(c)(2)(B) of the Social 
        Security Act (42 U.S.C. 405(c)(2)(B)), as added by paragraph 
        (3), or whose name is included on the list submitted under 
        paragraph (4), not later than 90 days after such notification 
        or submission, the Director shall establish, with such 
        individual as the sole beneficiary, a portable retirement and 
        investment account within the Fund.
            (3) Notification of issuance of social security account 
        number.--
                    (A) In general.--Section 205(c)(2)(B) of the Social 
                Security Act (42 U.S.C. 405(c)(2)(B)) is amended by 
                adding at the end the following:
    ``(iv) Not later than 60 days after assigning a social security 
account number to an individual, the Commissioner of Social Security 
shall notify the Director of the Portable Retirement and Investment 
Account Board of such assignment.''.
                    (B) Effective date.--The amendment made by 
                subparagraph (A) shall apply with respect to social 
                security account numbers assigned after a certain date, 
                to be designated by the Director, occurring not later 
                than 3 years after the date of the enactment of this 
                Act.
            (4) Transition.--Not later than the date designated 
        pursuant to paragraph (3)(B), occurring not later than 3 years 
        after the date of the enactment of this Act, the Commissioner 
        of Social Security shall submit to the Director a list of the 
        name of each living individual who has been assigned a social 
        security account number.
    (b) Federal Contributions.--
            (1) In general.--In the case of an individual for whom a 
        notification is made under clause (iv) of section 205(c)(2)(B) 
        of the Social Security Act (42 U.S.C. 405(c)(2)(B)), as added 
        by subsection (a)(3), who is a child of a taxpayer who received 
        a credit against tax under section 32 of the Internal Revenue 
        Code of 1986 for the most recent taxable year ending before the 
        date of the notification under such subsection, the Director 
        shall deposit into the portable retirement and investment 
        account of the individual an amount determined under paragraph 
        (2).
            (2) Amount.--Subject to paragraph (3), the amount 
        determined under this paragraph is--
                    (A) in the case of a taxpayer eligible for the 
                maximum credit applicable to such individual under 
                section 32 of the Internal Revenue Code of 1986, the 
                applicable contribution amount; and
                    (B) in any other case, a lower amount to be 
                determined under regulations issued by the Secretary of 
                the Treasury to reflect a proportional reduction of 
                such amount as the credit under such section decreases.
            (3) Applicable contribution amount.--
                    (A) In general.--For purposes of this subsection, 
                the term ``applicable contribution amount'' means $500.
                    (B) Inflation adjustment.--In the case of any 
                taxable year beginning in a calendar year after 2020, 
                the dollar amount in subparagraph (A) 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) of the 
                        Internal Revenue Code of 1986 for the calendar 
                        year in which the taxable year begins, by 
                        substituting ``calendar year 2019'' for 
                        ``calendar year 2016'' in subparagraph (A)(ii) 
                        thereof.
                Any increase determined under the preceding sentence 
                shall be rounded to the nearest multiple of $10.
            (4) Contribution for transfer.--A beneficiary of a portable 
        retirement and investment account, or in the case of a 
        beneficiary who has not attained the age of 18, the parent or 
        guardian of such beneficiary, may elect at any time to transfer 
        the entire amount in the account to a portable retirement and 
        investment account in the private sector. Such account shall be 
        held by a custodial entity such as a bank, credit union, trust 
        company or an entity that is licensed and regulated by the 
        Secretary pursuant to requirements consistent with section 
        1.408-2e of title 26, Code of Federal Regulations. Upon such 
        election, the Director shall provide for a $50 deposit if the 
        beneficiary completes a financial literacy training, as 
        determined appropriate by the Director. Investments in such 
        accounts are not subject to the limitation to lifecycle funds 
        described in section 3.
    (c) Personal Contributions.--
            (1) In general.--The beneficiary of a portable retirement 
        and investment account may at any time contribute additional 
        funds for deposit into such account.
            (2) Direct deposit.--Any employer who permits wages to be 
        paid to an employee by electronic funds transfer shall permit 
        such employee to elect to deposit, by means of electronic funds 
        transfer, a portion of such wages specified by the employee 
        into the employee's portable retirement and investment account.
            (3) Automatic contribution arrangement.--Any employer may 
        provide that an employee is treated as having elected to have 
        the employer make contributions in an amount equal to a uniform 
        percentage of compensation disclosed in advance to the employee 
        until the employee specifically elects not to have such 
        contributions made (or specifically elects to have such 
        contributions made at a different percentage).
            (4) Supersedure.--Paragraph (4) shall supercede any law of 
        any State (within the meaning of section 514(c)(1) of title 29) 
        which would directly or indirectly prohibit an employer from 
        adopting an arrangement described in paragraph (4). The 
        Director may prescribe regulations which would establish 
        minimum standards that such an arrangement would be required to 
        satisfy in order for this paragraph to apply in the case of 
        such arrangement.
    (d) Employer Contributions.--The employer of a beneficiary of a 
portable retirement and investment account may at any time contribute 
additional funds for deposit into such account.
    (e) Transfer Option.--
            (1) In general.--A beneficiary of a portable retirement and 
        investment account (or, in the case of a beneficiary who is 
        under 18 years of age, the parent or guardian of the 
        beneficiary) may elect at any time to transfer the entire 
        amount in such portable retirement and investment account to 
        any portable retirement and investment account in the private 
        sector (as defined in section 223A of the Internal Revenue Code 
        of 1986) with such beneficiary as the sole beneficiary.
            (2) Notifications.--
                    (A) Statements.--The Director shall ensure that 
                account statements are delivered to the beneficiary of 
                a portable retirement and investment account by 
                electronic delivery to the extent practicable.
                    (B) Notice of transfer option.--When the amount in 
                a portable retirement and investment account first 
                exceeds $15,000 and when the beneficiary of the account 
                attains the age of 18, the Director shall notify the 
                beneficiary of the account of the option under 
                paragraph (3) to transfer the entire amount in such 
                account to another account.

SEC. 5. TAX TREATMENT.

    (a) In General.--Part VII of subchapter B of chapter 1 of the 
Internal Revenue Code of 1986 is amended by inserting after section 223 
the following new section:

``SEC. 223A. PORTABLE RETIREMENT AND INVESTMENT ACCOUNTS.

    ``(a) Deduction Allowed.--
            ``(1) In general.--There shall be allowed as a deduction 
        for the taxable year an amount equal to the aggregate amount 
        paid in cash during such taxable year to a portable retirement 
        and investment account by the account beneficiary.
            ``(2) Certain rules to apply.--Rules similar to section 
        219(d)(2) (relating to no deduction for rollovers) shall apply 
        for purposes of this section.
    ``(b) Maximum Amount of Deduction.--
            ``(1) In general.--The amount allowable as a deduction 
        under subsection (a) to any individual for any taxable year 
        shall not exceed the lesser of--
                    ``(A) $18,500, or
                    ``(B) an amount equal to the compensation 
                includible in the individual's gross income for such 
                taxable year.
            ``(2) Catch-up contributions for individuals 50 or older.--
        In the case of an individual who has attained the age of 50 
        before the close of the taxable year, the amounts described in 
        paragraph (1)(A) and subsection (c)(4) for such taxable year 
        shall be increased by $6,000.
    ``(c) Portable Retirement and Investment Account.--For purposes of 
this title, the term `portable retirement and investment account' means 
a trust created or organized in the United States for the exclusive 
benefit of an individual, but only if the written governing instrument 
creating the trust meets the following requirements:
            ``(1) The trustee is a bank (as defined in section 408(n) 
        of the Internal Revenue Code of 1986) or such other person who 
        demonstrates to the satisfaction of the Secretary that the 
        manner in which such other person will administer the trust 
        will be consistent with the requirements of this section.
            ``(2) The amounts in the trust may consist only of--
                    ``(A) deposits under section 4(b) of the Portable 
                Retirement and Investment Account Act of 2018,
                    ``(B) amounts described in subsection (a)(1),
                    ``(C) amounts deposited by an employer of the 
                account beneficiary,
                    ``(D) interest on amounts in such trust, and
                    ``(E) proceeds from investment of amounts in such 
                trust.
            ``(3) Except in the case of a rollover contribution 
        described in subsection (d)(4), no contribution will be 
        accepted unless it is in cash.
            ``(4) No contributions in excess of the amount that is 
        twice the dollar amount in effect under subsection (b)(1)(A) 
        will be accepted during a calendar year.
            ``(5) No distribution that would bring the account balance 
        below the amount deposited in such trust under section (b)(1) 
        of the PRIA Act of 2018 is allowed to an account beneficiary 
        who has not attained the age 59\1/2\.
    ``(d) Tax Treatment of Accounts.--
            ``(1) In general.--A portable retirement and investment 
        account is exempt from taxation under this subtitle unless such 
        account has ceased to be a portable retirement and investment 
        account. Notwithstanding the preceding sentence, any such 
        account is subject to the taxes imposed by section 511 
        (relating to imposition of tax on unrelated business income of 
        charitable, etc. organizations).
            ``(2) Account terminations.--Rules similar to the rules of 
        paragraphs (2) and (4) of section 408(e) shall apply to 
        portable retirement and investment accounts, and subsection 
        (e)(2) shall not apply to any amount treated as distributed 
        under such rules.
    ``(e) Tax Treatment of Distributions.--
            ``(1) In general.--Any amount paid or distributed out of a 
        portable retirement and investment account shall be included in 
        the gross income of such beneficiary.
            ``(2) Additional tax on certain distributions.--The tax 
        imposed by this chapter on the account beneficiary for any 
        taxable year in which there is a payment or distribution from a 
        portable retirement and investment account of such beneficiary 
        shall be increased by 10 percent unless such payment or 
        distribution is--
                    ``(A) paid or distributed on or after the date on 
                which the account beneficiary attains age 59\1/2\,
                    ``(B) paid or distributed to an account beneficiary 
                who is disabled within the meaning of subsection 
                (m)(7), or
                    ``(C) paid or distributed to an account beneficiary 
                who has attained age 55 and becomes unemployed after 
                attaining such age.
            ``(3) Certain distributions not taxed.--
                    ``(A) In general.--Paragraphs (1) and (2) shall not 
                apply to any amount paid or distributed from a portable 
                retirement and investment account to the account 
                beneficiary to the extent the amount received is paid 
                into a portable retirement and investment account, or 
                for an annuity, for the benefit of such beneficiary not 
                later than the 60th day after the day on which the 
                beneficiary receives the payment or distribution.
                    ``(B) Limitation.--This paragraph shall not apply 
                to any amount described in subparagraph (A) received by 
                an individual from a portable retirement and investment 
                account if, at any time during the 1-year period ending 
                on the day of such receipt, such individual received 
                any other amount described in subparagraph (A) from a 
                portable retirement and investment account which was 
                not includible in the individual's gross income because 
                of the application of this paragraph.
            ``(4) Transfer of account incident to divorce.--The 
        transfer of an individual's interest in a portable retirement 
        and investment account to an individual's spouse or former 
        spouse under a divorce or separation instrument described in 
        subparagraph (A) of section 71(b)(2) shall not be considered a 
        taxable transfer made by such individual notwithstanding any 
        other provision of this subtitle, and such interest shall, 
        after such transfer, be treated as a portable retirement and 
        investment account with respect to which such spouse is the 
        account beneficiary.
            ``(5) Treatment after death of account beneficiary.--
                    ``(A) Treatment if designated beneficiary is 
                spouse.--If the account beneficiary's surviving spouse 
                acquires such beneficiary's interest in a portable 
                retirement and investment account by reason of being 
                the designated beneficiary of such account at the death 
                of the account beneficiary, such portable retirement 
                and investment account shall be treated as if the 
                spouse were the account beneficiary.
                    ``(B) Other cases.--If, by reason of the death of 
                the account beneficiary, any person acquires the 
                account beneficiary's interest in a portable retirement 
                and investment account in a case to which subparagraph 
                (A) does not apply--
                            ``(i) such account shall cease to be a 
                        portable retirement and investment account as 
                        of the date of death, and
                            ``(ii) an amount equal to the fair market 
                        value of the assets in such account on such 
                        date shall be includible if such person is not 
                        the estate of such beneficiary, in such 
                        person's gross income for the taxable year 
                        which includes such date, or if such person is 
                        the estate of such beneficiary, in such 
                        beneficiary's gross income for the last taxable 
                        year of such beneficiary.
    ``(f) Loans Treated as Distributions.--For purposes of this 
section--
            ``(1) In general.--If during any taxable year a participant 
        or beneficiary receives (directly or indirectly) any amount as 
        a loan from a portable retirement and investment account, such 
        amount shall be treated as having been received by such 
        individual as a distribution from such account.
            ``(2) Exception for certain loans.--
                    ``(A) General rule.--Paragraph (1) shall not apply 
                to any loan to the extent that such loan (when added to 
                the outstanding balance of all other loans from such 
                account), does not exceed the lesser of--
                            ``(i) $50,000, reduced by the excess (if 
                        any) of--
                                    ``(I) the highest outstanding 
                                balance of loans from the account 
                                during the 1-year period ending on the 
                                day before the date on which such loan 
                                was made, over
                                    ``(II) the outstanding balance of 
                                loans from the plan on the date on 
                                which such loan was made, or
                            ``(ii) the greater of--
                                    ``(I) one-half of the amount in the 
                                account, or
                                    ``(II) $10,000.
                    ``(B) Requirement that loan be repayable within 5 
                years.--
                            ``(i) In general.--Subparagraph (A) shall 
                        not apply to any loan unless such loan, by its 
                        terms, is required to be repaid within 5 years.
                            ``(ii) Exception for home loans.--Clause 
                        (i) shall not apply to any loan used to acquire 
                        any dwelling unit which within a reasonable 
                        time is to be used (determined at the time the 
                        loan is made) as the principal residence of the 
                        participant.
                    ``(C) Requirement of level amortization.--Except as 
                provided in regulations, this paragraph shall not apply 
                to any loan unless substantially level amortization of 
                such loan (with payments not less frequently than 
                quarterly) is required over the term of the loan.
    ``(g) Employer Deductions.--
            ``(1) In general.--For deductions related to employer 
        contributions, see section 162.
            ``(2) Nondiscrimination.--Under regulations prescribed by 
        the Secretary, notwithstanding section 162, no deduction shall 
        be allowed for employer contributions to a portable retirement 
        and investment account on behalf of an employee who is a highly 
        compensated employee (as defined in section 414(q) 105(h)(5)) 
        if the employer contributions made on behalf of all employees 
        discriminate in favor of such employees who are highly 
        compensated employees.
            ``(3) Certain controlled groups.--All employees who are 
        treated as employed by a single employer under subsection (b), 
        (c), and (m) of section 414 shall be treated as employed by a 
        single employer for purposes of this subsection.
    ``(h) Inflation Adjustment.--
            ``(1) In general.--In the case of any taxable year 
        beginning in a calendar year after 2020, the dollar amounts 
        under subsection (b) and subsection (c)(4) 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 2019' for `calendar year 2016' in 
                subparagraph (A)(ii) thereof.
            ``(2) Rounding rules.--If any amount after adjustment under 
        paragraph (1) is not a multiple of $500, such amount shall be 
        rounded to the next lower multiple of $500.''.
    (b) Clerical Amendments.--The table of sections for chapter 1 is 
amended by inserting after the item related to section 223 the 
following new item:

``Sec. 223A. Portable Retirement and Investment Accounts.''.

SEC. 6. OPTION TO ROLLOVER.

    (a) Rollover Option.--
            (1) In general.--Any individual who holds an account 
        described under paragraph (2) may elect to roll over the entire 
        amount in such account into a portable retirement and 
        investment account. Such rollover shall be treated as a 
        rollover described in section 223A(e)(4) of the Internal 
        Revenue Code of 1986.
            (2) Accounts described.--This subsection shall apply to 
        accounts opened or annuity contracts purchased pursuant to the 
        following sections of the Internal Revenue Code of 1986:
                    (A) Section 401(k).
                    (B) Section 403(b).
                    (C) Section 457.
                    (D) Section 409A.
                    (E) Section 408.

SEC. 7. REGULATIONS.

    Not later than 180 days after the date of the enactment of this 
Act, the Secretary of the Treasury, in coordination with the 
Commissioner of Social Security, as determined necessary by the 
Secretary, shall issue regulations to carry out this section.
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