[Congressional Bills 117th Congress]
[From the U.S. Government Publishing Office]
[S. 3751 Introduced in Senate (IS)]

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117th CONGRESS
  2d Session
                                S. 3751

 To amend the Employee Retirement Income Security Act of 1974 and the 
 Internal Revenue Code of 1986 to improve retirement plan coverage for 
                           part-time workers.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             March 3, 2022

Mr. Casey (for himself and Mr. Scott of South Carolina) introduced the 
 following bill; which was read twice and referred to the Committee on 
                 Health, Education, Labor, and Pensions

_______________________________________________________________________

                                 A BILL


 
 To amend the Employee Retirement Income Security Act of 1974 and the 
 Internal Revenue Code of 1986 to improve retirement plan coverage for 
                           part-time workers.

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

SECTION 1. IMPROVING COVERAGE FOR PART-TIME WORKERS.

    (a) Amendments to Employee Retirement Income Security Act of 
1974.--
            (1) In general.--Section 202 of the Employee Retirement 
        Income Security Act of 1974 (29 U.S.C. 1052) is amended by 
        adding at the end the following new subsection:
    ``(c) Special Rule for Certain Part-Time Employees.--
            ``(1) In general.--A pension plan that includes either a 
        qualified cash or deferred arrangement (as defined in section 
        401(k) of the Internal Revenue Code of 1986) or a salary 
        reduction agreement (as described in section 403(b) of such 
        Code) shall not require, as a condition of participation in the 
        arrangement or agreement, that an employee complete a period of 
        service with the employer (or employers) maintaining the plan 
        extending beyond the close of the earlier of--
                    ``(A) the period permitted under subsection (a)(1) 
                (determined without regard to subparagraph (B)(i) 
                thereof); or
                    ``(B) the first 24-month period--
                            ``(i) consisting of 2 consecutive 12-month 
                        periods during each of which the employee has 
                        at least 500 hours of service; and
                            ``(ii) by the close of which the employee 
                        has attained the age of 21.
            ``(2) Exception.--Paragraph (1)(B) shall not apply to any 
        employee described in section 410(b)(3) of the Internal Revenue 
        Code of 1986.
            ``(3) Coordination with other rules.--
                    ``(A) In general.--In the case of employees who are 
                eligible to participate in the arrangement or agreement 
                solely by reason of paragraph (1)(B):
                            ``(i) Exclusions.--An employer may elect to 
                        exclude such employees from the application of 
                        subsections (a)(4), (k)(3), (k)(12), (k)(13), 
                        (k)(15)(B)(i)(I), and (m)(2) of section 401 of 
                        the Internal Revenue Code of 1986 and section 
                        410(b) of such Code.
                            ``(ii) Time of participation.--The rules of 
                        subsection (a)(4) shall apply with respect to 
                        such employees.
                    ``(B) Top-heavy rules.--An employer may elect to 
                exclude all employees who are eligible to participate 
                in a plan maintained by the employer solely by reason 
                of paragraph (1)(B) from the application of the vesting 
                and benefit requirements under subsections (b) and (c) 
                of section 416 of the Internal Revenue Code of 1986.
            ``(4) 12-month period.--For purposes of this subsection, 
        12-month periods shall be determined in the same manner as 
        under the last sentence of subsection (a)(3)(A), except that 
        12-month periods beginning before January 1, 2022, shall not be 
        taken into account.''.
            (2) Vesting.--Section 203(b) of the Employee Retirement 
        Income Security Act of 1974 (29 U.S.C. 1053(a)) is amended by 
        redesignating paragraph (4) as paragraph (5) and by inserting 
        after paragraph (3) the following new paragraph:
            ``(4) Part-time employees.--For purposes of determining 
        whether an employee who is eligible to participate in a 
        qualified cash or deferred arrangement or a salary reduction 
        agreement under a plan solely by reason of section 202(c)(1)(B) 
        has a nonforfeitable right to employer contributions--
                    ``(A) except as provided in subparagraph (B), each 
                12-month period for which the employee has at least 500 
                hours of service shall be treated as a year of service;
                    ``(B) paragraph (3) shall be applied by 
                substituting `at least 500 hours of service' for `more 
                than 500 hours of service' in subparagraph (A) thereof; 
                and
                    ``(C) 12-month periods occurring before the 24-
                month period described in section 202(c)(1)(B) shall 
                not be treated as years of service.
        For purposes of this paragraph, 12-month periods shall be 
        determined in the same manner as under the last sentence of 
        section 202(a)(3)(A), except that 12-month periods beginning 
        before January 1, 2022, shall not be taken into account.''.
    (b) Conforming Amendment to Internal Revenue Code of 1986.--Section 
410(a) of the Internal Revenue Code of 1986 is amended by adding at the 
end the following new paragraphs:
            ``(6) Special rule for certain part-time employees.--
                    ``(A) In general.--In the case of a plan that 
                includes either a qualified cash or deferred 
                arrangement (as defined in section 401(k)), a trust of 
                which such plan is a part shall not constitute a 
                qualified trust under section 401(a) if the plan 
                requires, as a condition of participation in the plan 
                or arrangement, that an employee complete a period of 
                service with the employer (or employers) maintaining 
                the plan extending beyond the close of the earlier of--
                            ``(i) the period permitted under paragraph 
                        (1) (determined without regard to subparagraph 
                        (B)(i) thereof), or
                            ``(ii) the first 24-month period--
                                    ``(I) consisting of 2 consecutive 
                                12-month periods during each of which 
                                the employee has at least 500 hours of 
                                service, and
                                    ``(II) by the close of which the 
                                employee has attained the age of 21.
                    ``(B) Exception.--Subparagraph (A)(ii) shall not 
                apply to any employee described in subsection (b)(3).
                    ``(C) Coordination with other rules.--
                            ``(i) In general.--In the case of employees 
                        who are eligible to participate in the 
                        arrangement or agreement solely by reason of 
                        subparagraph (A)(ii)--
                                    ``(I) Exclusions.--An employer may 
                                elect to exclude such employees from 
                                the application of subsection (b) and 
                                of subsections (a)(4), (k)(3), (k)(12), 
                                (k)(13), (k)(15)(B)(i)(I), and (m)(2) 
                                of section 401.
                                    ``(II) Time of participation.--The 
                                rules of paragraph (4) shall apply with 
                                respect to such employees.
                            ``(ii) Top-heavy rules.--An employer may 
                        elect to exclude all employees who are eligible 
                        to participate in a plan maintained by the 
                        employer solely by reason of subparagraph 
                        (A)(ii) from the application of the vesting and 
                        benefit requirements under subsections (b) and 
                        (c) of section 416.
                    ``(D) 12-month period.--For purposes of this 
                paragraph, 12-month periods shall be determined in the 
                same manner as under the last sentence of paragraph 
                (3)(A), except that 12-month periods beginning before 
                January 1, 2022, shall not be taken into account.
            ``(7) Part-time employees.--For purposes of determining 
        whether an employee who is eligible to participate in a 
        qualified cash or deferred arrangement or a salary reduction 
        agreement under a plan solely by reason of paragraph (6)(A)(ii) 
        has a nonforfeitable right to employer contributions--
                    ``(A) except as provided in subparagraph (B), each 
                12-month period for which the employee has at least 500 
                hours of service shall be treated as a year of service,
                    ``(B) section 411(a)(6) shall be applied by 
                substituting `at least 500 hours of service' for `more 
                than 500 hours of service' in subparagraph (A) thereof, 
                and
                    ``(C) 12-month periods occurring before the 24-
                month period described in paragraph (6)(A)(ii) shall 
                not be treated as years of service.
        For purposes of this paragraph, 12-month periods shall be 
        determined in the same manner as under paragraph (6)(D).''.
    (c) Pre-2021 Service.--Section 112(b) of the Setting Every 
Community Up for Retirement Enhancement Act of 2019 (26 U.S.C. 401 
note) is amended by striking ``section 401(k)(2)(D)(ii)'' and inserting 
``paragraphs (2)(D)(ii) and (15)(B)(iii) of section 401(k)''.
    (d) Effective Date.--The amendments made by this section shall 
apply to plan years beginning after the date which is 1 year after the 
date of the enactment of this Act.
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