[Congressional Record Volume 168, Number 55 (Tuesday, March 29, 2022)]
[House]
[Pages H3925-H3950]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
SECURING A STRONG RETIREMENT ACT OF 2022
Mr. NEAL. Madam Speaker, I move to suspend the rules and pass the
bill (H.R. 2954) to increase retirement savings, simplify and clarify
retirement plan rules, and for other purposes, as amended.
The Clerk read the title of the bill.
The text of the bill is as follows:
H.R. 2954
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 2022''.
(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. Promotion of Saver's Credit.
Sec. 104. Enhancement of Saver's Credit.
Sec. 105. Enhancement of 403(b) plans.
Sec. 106. Increase in age for required beginning date for mandatory
distributions.
Sec. 107. Indexing IRA catch-up limit.
Sec. 108. Higher catch-up limit to apply at age 62, 63, and 64.
Sec. 109. Pooled employer plans modification.
Sec. 110. Multiple employer 403(b) plans.
Sec. 111. Treatment of student loan payments as elective deferrals for
purposes of matching contributions.
Sec. 112. Application of credit for small employer pension plan startup
costs to employers which join an existing plan.
Sec. 113. Military spouse retirement plan eligibility credit for small
employers.
Sec. 114. Small immediate financial incentives for contributing to a
plan.
Sec. 115. Safe harbor for corrections of employee elective deferral
failures.
Sec. 116. Improving coverage for part-time workers.
Sec. 117. Deferral of tax for certain sales of employer stock to
employee stock ownership plan sponsored by S corporation.
Sec. 118. Certain securities treated as publicly traded in case of
employee stock ownership plans.
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 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. Updating dollar limit for mandatory distributions.
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. Distributions to firefighters.
Sec. 312. Exclusion of certain disability-related first responder
retirement payments.
Sec. 313. Individual retirement plan statute of limitations for excise
tax on excess contributions and certain accumulations.
Sec. 314. Requirement to provide paper statements in certain cases.
Sec. 315. Separate application of top heavy rules to defined
contribution plans covering excludible employees.
Sec. 316. Repayment of qualified birth or adoption distribution limited
to 3 years.
Sec. 317. Employer may rely on employee certifying that deemed hardship
distribution conditions are met.
Sec. 318. Penalty-free withdrawals from retirement plans for
individuals in case of domestic abuse.
Sec. 319. Reform of family attribution rules.
Sec. 320. Amendments to increase benefit accruals under plan for
previous plan year allowed until employer tax return due
date.
Sec. 321. Retroactive first year elective deferrals for sole
proprietors.
Sec. 322. Limiting cessation of IRA treatment to portion of account
involved in a prohibited transaction.
Sec. 323. Review of pension risk transfer interpretive bulletin.
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 VI--REVENUE PROVISIONS
Sec. 601. Simple and SEP Roth IRAs.
Sec. 602. Hardship withdrawal rules for 403(b) plans.
Sec. 603. Elective deferrals generally limited to regular contribution
limit.
Sec. 604. Optional treatment of employer matching contributions as Roth
contributions.
TITLE VII--BUDGETARY EFFECTS
Sec. 701. Determination of budgetary effects.
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
[[Page H3926]]
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)
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.--
``(A) In general.--An eligible automatic contribution
arrangement meets the requirements of this paragraph if--
``(i) 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
``(ii) effective for the first day of each plan year
starting after each completed year of participation under
such arrangement such uniform percentage is increased by 1
percentage point (to at least 10 percent, but not more than
15 percent) unless the participant specifically elects not to
have such contributions made or to have such contributions
made at a different percentage.
``(B) Initial reduced ceiling for certain plans.--In the
case of any eligible automatic contribution arrangement
(other than an arrangement that meets the requirements of
paragraph (12) or (13) of section 401(k)), for plan years
ending before January 1, 2025, subparagraph (A)(ii) shall be
applied by substituting `10 percent' for `15 percent'.
``(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 in accordance 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) Simple plans.--Subsection (a) shall not apply to any
simple plan (within the meaning of section 401(k)(11)).
``(2) Exception for plans or arrangements established
before enactment of section.--
``(A) In general.--Subsection (a) shall not apply to--
``(i) any qualified cash or deferred arrangement
established before the date of the enactment of this section,
or
``(ii) any annuity contract purchased under a plan
established before the date of the enactment of this section.
``(B) Post-enactment adoption of multiple employer plan.--
Subparagraph (A) shall not apply in the case of an employer
adopting after such date of enactment a plan maintained by
more than one employer, and subsection (a) shall apply with
respect to such employer as if such plan were a single plan.
``(3) 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)).
``(4) Exception for new and small businesses.--
``(A) New business.--Subsection (a) shall not apply to any
qualified cash or deferred arrangement, or any annuity
contract purchased under a plan, while the employer
maintaining such plan (and any predecessor employer) has been
in existence for less than 3 years.
``(B) Small businesses.--Subsection (a) shall not apply to
any qualified cash or deferred arrangement, or any annuity
contract purchased under a plan, earlier than the date that
is 1 year after the close of the first taxable year with
respect to which the employer maintaining the plan normally
employed more than 10 employees.
``(C) Treatment of multiple employer plans.--In the case of
a plan maintained by more than 1 employer, subparagraphs (A)
and (B) shall be applied separately with respect to each such
employer, and all such employers to which subsection (a)
applies (after the application of this paragraph) shall be
treated as maintaining a separate plan for purposes of this
section.''.
(b) Clerical Amendment.--The table of sections for subpart
B of part I of subchapter D of chapter 1 of such Code 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, 2023.
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, as amended by
subsection (a), 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 with respect to the
eligible employer shall be 100 percent, and for taxable years
thereafter shall be determined under the following table:
``In the case of the following taxable year beginning after the taxable
year during which plan is established with respect to the eligible
The applicable percentage shall be:
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 with
respect to the eligible employer.''.
(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,
2022.
SEC. 103. PROMOTION OF SAVER'S CREDIT.
(a) In General.--The Secretary of the Treasury shall take
such steps as the Secretary determines are necessary and
appropriate to increase public awareness of the credit
provided under section 25B of the Internal Revenue Code of
1986.
(b) Report to Congress.--
(1) In general.--Not later than 90 days after the date of
the enactment of this Act, the Secretary shall provide a
report to Congress to summarize the anticipated promotion
efforts of the Treasury under subsection (a).
(2) Contents.--Such report shall include--
(A) a description of plans for--
(i) the development and distribution of digital and print
materials, including the distribution of such materials to
States for participants in State facilitated retirement
savings programs, and
(ii) the translation of such materials into the 10 most
commonly spoken languages in the United States after English
(as determined by reference to the most recent American
Community Survey of the Bureau of the Census), and
[[Page H3927]]
(B) such other information as the Secretary determines is
necessary
SEC. 104. ENHANCEMENT OF SAVER'S CREDIT.
(a) 50 Percent Credit Rate.--Section 25B(a) of the Internal
Revenue Code of 1986 is amended by striking ``the applicable
percentage'' and inserting ``50 percent''.
(b) Adjusted Gross Income Phaseouts.--Section 25B(b) of
such Code is amended to read as follows:
``(b) Limitation.--For purposes of this section--
``(1) In general.--The amount of credit allowable under
subsection (a) (determined without regard to this subsection)
shall be reduced (but not below zero) by an amount which
bears the same ratio to the credit otherwise so allowable
as--
``(A) the excess (if any) of--
``(i) adjusted gross income of the taxpayer, over
``(ii) the threshold amount, bears to
``(B) the phaseout amount.
``(2) Threshold amount.--The term `threshold amount'
means--
``(A) in the case of a joint return or a surviving spouse
(as defined in section 2(a)), $48,000,
``(B) in the case of a head of household, 75 percent of the
amount in effect for the taxable year under subparagraph (A),
and
``(C) in the case of any other individual, 50 percent of
the amount in effect for the taxable year under subparagraph
(A).
``(3) Phaseout amount.--The term `phaseout amount' means--
``(A) in the case of a joint return or a surviving spouse
(as defined in 2(a)), $35,000,
``(B) in the case of a head of household (as defined in
section 2(b)), 75 percent of the amount in effect for the
taxable year under subparagraph (A), and
``(C) in the case of any other individual, 50 percent of
the amount in effect for the taxable year under subparagraph
(A).
``(4) Inflation adjustment.--
``(A) In general.--In the case of any taxable year
beginning in a calendar year after 2026, the $48,000 dollar
amount in paragraph (2) and the $35,000 in paragraph (3)
shall each 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 2022'
for `calendar year 2016' in subparagraph (A)(ii) thereof.
``(B) Rounding.--Any increase determined under subparagraph
(A) that is not a multiple of $500 shall be rounded to the
nearest multiple of $500.''.
(c) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December 31,
2026.
SEC. 105. ENHANCEMENT OF 403(B) PLANS.
(a) In General.--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)''.
(b) Conforming Amendment.--The heading of paragraph (7) of
section 403(b) of such Code is amended by striking ``for
regulated investment company stock''.
(c) Effective Date.--The amendments made by this section
shall apply to amounts invested after December 31, 2022.
SEC. 106. 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 ``the applicable age''.
(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 ``the applicable age''.
(c) Applicable Age.--Section 401(a)(9)(C) of such Code is
amended by adding at the end the following new clause:
``(v) Applicable age.--
``(I) In the case of an individual who attains age 72 after
December 31, 2022, and age 73 before January 1, 2030, the
applicable age is 73.
``(II) In the case of an individual who attains age 73
after December 31, 2029, and age 74 before January 1, 2033,
the applicable age is 74.
``(III) In the case of an individual who attains age 74
after December 31, 2032, the applicable age is 75.''.
(d) Conforming Amendments.--The last sentence of section
408(b) of such Code is amended by striking ``age 72'' and
inserting ``the applicable age (determined under section
401(a)(9)(C)(v) for the calendar year in which such taxable
year begins)''.
(e) Effective Date.--The amendments made by this section
shall apply to distributions required to be made after
December 31, 2022, with respect to individuals who attain age
72 after such date.
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 2023, 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 2022'
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,
2023.
SEC. 108. HIGHER CATCH-UP LIMIT TO APPLY AT AGE 62, 63, AND
64.
(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 would attain age 62, but not age
65, 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 would
attain age 62, but not age 65, 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, 2023, 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,
2022.''.
(c) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December 31,
2023.
SEC. 109. POOLED EMPLOYER PLANS MODIFICATION.
(a) In General.--Section 3(43)(B)(ii) of the Employee
Retirement Income Security Act of 1974 (29 U.S.C.
1002(43)(B)(ii)) is amended to read as follows:
``(ii) designate a named fiduciary (other than an employer
in the plan) to be responsible for collecting contributions
to the plan and require such fiduciary to implement written
contribution collection procedures that are reasonable,
diligent, and systematic;''.
(b) Effective Date.--The amendments made by this section
shall apply to plan years beginning after December 31, 2022.
SEC. 110. 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 satisfies
rules similar to the rules 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 such Code 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) In general.--Section 3(43)(A) of the Employee
Retirement Income Security Act of 1974 is amended--
(A) in clause (ii), by striking ``section 501(a) of such
Code or'' and inserting ``section 501(a) of such Code, a plan
that consists of contracts described in section 403(b) of
such Code, or''; and
[[Page H3928]]
(B) 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.''.
(2) Conforming amendments.--Sections 3(43)(B)(v)(II) and
3(44)(A)(i)(I) of the Employee Retirement Income Security Act
of 1974 are each amended by striking ``section 401(a) of such
Code or'' and inserting ``section 401(a) of such Code, a plan
that consists of contracts described in section 403(b) of
such Code, or''.
(e) Regulations Relating to Employer Failure to Meet
Multiple Employer Plan Requirements.--The Secretary of the
Treasury (or the Secretary's delegate) shall prescribe such
regulations as may be necessary to clarify, in the case of
plans to which section 403(b)(15) of the Internal Revenue
Code of 1986 applies, the treatment of an employer departing
such plan in connection with such employer's failure to meet
multiple employer plan requirements.
(f) Modification of Model Plan Language, etc.--
(1) Plan notifications.--The Secretary of the Treasury (or
the Secretary's delegate) shall modify the model plan
language published under section 413(e)(5) of the Internal
Revenue Code of 1986 to include language that notifies
participating employers described in section 501(c)(3), and
which are exempt from tax under section 501(a), 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 of the
Treasury shall publish model plan language similar to model
plan language published under section 413(e)(5) of such Code.
(3) Educational outreach to employers exempt from tax.--The
Secretary of the Treasury (or the Secretary's delegate) shall
provide education and outreach to increase awareness to
employers described in section 501(c)(3) of the Internal
Revenue Code of 1986, and which are exempt from tax under
section 501(a) of such Code, that multiple employer plans are
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.
(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, 2022.
(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 the Internal Revenue Code of
1986 with respect to one employer (and its employees) in the
case of a plan to which section 403(b)(15) of the Internal
Revenue Code of 1986 applies.
SEC. 111. TREATMENT OF STUDENT LOAN PAYMENTS AS ELECTIVE
DEFERRALS FOR PURPOSES OF MATCHING
CONTRIBUTIONS.
(a) In General.--Section 401(m)(4)(A) 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.--Section 401(m)(4) 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.--Section 401(m) 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.
``(iv) Actual deferral percentage testing.--In determining
whether a plan meets the requirements of subsection
(k)(3)(A)(ii) for a plan year, the plan may apply the
requirements of such subsection separately with respect to
all employees who receive matching contributions described in
paragraph (4)(A)(iii) for the plan year.
``(C) Employer may rely on employee certification.--The
employer may rely on an employee certification of payment
under paragraph (4)(D)(ii).''.
(d) Simple Retirement Accounts.--Section 408(p)(2) 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.''.
[[Page H3929]]
(e) 403(b) Plans.--Section 403(b)(12)(A) 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.--Section 457(b) 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) or 403(b), 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 plan years beginning
after December 31, 2022.
SEC. 112. 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 take effect as if included in the enactment of section
104 of the Setting Every Community Up for Retirement
Enhancement Act of 2019.
SEC. 113. 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) Specified Credit for Purposes of Certified Professional
Employer Organizations.--Section 3511(d)(2) of such Code is
amended by redesignating subparagraphs (F), (G), and (H) as
subparagraphs (G), (H), and (I), respectively, and by
inserting after subparagraph (E) the following new
subparagraph:
``(F) section 45U (military spouse retirement plan
eligibility credit),''.
(d) 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.''.
(e) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after the date of the
enactment of this Act.
SEC. 114. 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 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).''.
(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 section 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. 115. 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 error 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.
[[Page H3930]]
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. 116. IMPROVING COVERAGE FOR PART-TIME WORKERS.
(a) 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), and (m)(2) of section 401 of the Internal
Revenue Code of 1986 and section 410(b) of such Code.
``(ii) Nondiscrimination rules.--Notwithstanding paragraph
(1), section 401(k)(15)(B)(i)(I) of such Code shall apply.
``(iii) Time of participation.--The rules of subsection
(a)(4) shall apply 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, 2021, shall not
be taken into account.''
(b) 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; and
``(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.
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, 2021, shall not be taken into account.''.
(c) Reduction in Period Service Requirement for Qualified
Cash and Deferred Arrangements.--Section 401(k)(2)(D)(ii) of
the Internal Revenue Code of 1986 is amended by striking
``3'' and inserting ``2''.
(d) 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)''.
(e) Effective Dates.--
(1) In general.--Except as provided in paragraph (2), the
amendments made by this section shall apply to plan years
beginning after December 31, 2022.
(2) Subsection (d).--The amendment made by subsection (d)
shall take effect as if included in the enactment of section
112 of the Setting Every Community Up for Retirement
Enhancement Act of 2019.
SEC. 117. 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) 10 Percent Limitation on Application of Gain on Sale of
S Corporation Stock.--Section 1042 of such Code is amended by
adding at the end the following new subsection:
``(h) Application of Section to Sale of Stock in S
Corporation.--In the case of the sale of qualified securities
of an S corporation, the election under subsection (a) may be
made with respect to not more than 10 percent of the amount
realized on such sale for purposes of determining the amount
of gain not recognized and the extent to which (if at all)
the amount realized on such sale exceeds the cost of
qualified replacement property. The portion of adjusted basis
that is properly allocable to the portion of the amount
realized with respect to which the election is made under
this subsection shall be taken into account for purposes of
the preceding sentence.''.
(c) Effective Date.--The amendments made by this section
shall apply to sales after December 31, 2027.
SEC. 118. CERTAIN SECURITIES TREATED AS PUBLICLY TRADED IN
CASE OF EMPLOYEE STOCK OWNERSHIP PLANS.
(a) In General.--Section 401(a)(35) of the Internal Revenue
Code of 1986 is amended by adding at the end the following
new subparagraph:
``(I) ESOP rules relating to publicly traded securities.--
In the case of an applicable defined contribution plan which
is an employee stock ownership plan, an employer security
shall be treated as described in subparagraph (G)(v) if--
``(i) the security is the subject of priced quotations by
at least 4 dealers, published and made continuously available
on an interdealer quotation system (as such term is used in
section 13 of the Securities Exchange Act of 1934) which has
made the request described in section 6(j) of such Act to be
treated as an alternative trading system,
``(ii) the security is not a penny stock (as defined by
section 3(a)(51) of such Act),
``(iii) the security is issued by a corporation which is
not a shell company (as such term is used in section 4(d)(6)
of the Securities Act of 1933), a blank check company (as
defined in section 7(b)(3) of such Act), or subject to
bankruptcy proceedings,
``(iv) the security has a public float (as such term is
used in section 240.12b-2 of title 17, Code of Federal
Regulations) which has a fair market value of at least
$1,000,000 and constitutes at least 10 percent of the total
shares issued and outstanding.
``(v) in the case of a security issued by a domestic
corporation, the issuer publishes, not less frequently than
annually, financial statements audited by an independent
auditor registered with the Public Company Accounting
Oversight Board established under the Sarbanes-Oxley Act of
2002, and
``(vi) in the case of a security issued by a foreign
corporation, the security is represented by a depositary
share (as defined under section 240.12b-2 of title 17, Code
of Federal Regulations), or is issued by a foreign
corporation incorporated in Canada and readily tradeable on
an established securities market in Canada, and the issuer--
``(I) is subject to, and in compliance with, the reporting
requirements of section 13 or 15(d) of the Securities
Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)),
``(II) is subject to, and in compliance with, the reporting
requirements of section 230.257 of title 17, Code of Federal
Regulations, or
``(III) is exempt from such requirements under section
240.12g3-2(b) of title 17, Code of Federal Regulations.''.
(b) Effective Date.--The amendments made by this section
shall apply to plan years beginning after December 31, 2027.
TITLE II--PRESERVATION OF INCOME
SEC. 201. REMOVE REQUIRED MINIMUM DISTRIBUTION BARRIERS FOR
LIFE ANNUITIES.
(a) In General.--Section 401(a)(9) 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
[[Page H3931]]
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) Effective Date.--This section shall apply to calendar
years ending after 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) 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, in the case of an arrangement not subject to
section 414(p) of such Code or section 206(d) of the Employee
Retirement Income Security Act of 1974 (29 U.S.C. 1056(d)),
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.
(3) 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)(2), 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) Paragraph (1) 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 (2) and (3) 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).
(d) Regulatory Successor Provision.--Any reference to a
regulation under this section shall be treated as including a
reference to any successor regulation thereto.
SEC. 203. INSURANCE-DEDICATED EXCHANGE-TRADED FUNDS.
(a) In General.--Not later than the date which is 7 years
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 Treasury Regulation
section 1.817-5(f)(3) to provide that satisfaction of the
requirements in Treasury Regulation 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) Define Relevant Terms.--In amending Treasury Regulation
section 1.817-5(f)(3) in accordance with subsections (b) 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 paragraphs (2) and (3) of
Treasury Regulation section 1.817-5(f).
(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 paragraphs
(2) and (3) of Treasury Regulations section 1.817-5(f).
(d) Effective Date.--Subsections (b) and (c) shall apply to
segregated asset account investments made on or after the
date that is 7 years after the date of the enactment of this
Act.
TITLE III--SIMPLIFICATION AND CLARIFICATION OF RETIREMENT PLAN RULES
SEC. 301. RECOVERY OF RETIREMENT PLAN OVERPAYMENTS.
(a) 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
[[Page H3932]]
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 for
any period.
``(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 for
purposes of this subparagraph.
``(D) Efforts to recoup overpayments are--
``(i) 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, and
``(ii) not made through a collection agency or similar
third party, unless the participant or beneficiary ignores or
rejects efforts to recoup the overpayment following either a
final judgment in Federal or State court or a settlement
between the participant or beneficiary and the plan, in
either case authorizing such recoupment.
``(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 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.''.
(b) Overpayments Under Internal Revenue Code of 1986.--
(1) Qualification requirements.--Section 414 of the
Internal Revenue Code of 1986, as amended by this preceding
provisions of this Act, is 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 sections 412 and 430 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 of the Treasury for
recouping benefits previously paid or allocations previously
made in excess of such limitations.
``(5) Coordination with other qualification requirements.--
The Secretary of the Treasury 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:
``(12) In the case of an inadvertent benefit overpayment
from a plan to which section 414(bb)(1) applies that 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 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.''.
(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 the date of enactment of
this Act 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.--Section 4974(a) 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
[[Page H3933]]
``(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,
2022.
SEC. 303. PERFORMANCE BENCHMARKS FOR ASSET ALLOCATION FUNDS.
(a) In General.--Not later than 1 year after the date of
enactment of this Act, the Secretary of Labor shall provide
that, in the case of a designated investment alternative that
contains a mix of asset classes, the administrator of a plan
may, but is not required to, use a benchmark that 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
(4) each securities market index that is used for an
associated asset class would separately satisfy the
requirements of such regulation for such asset class.
(b) Study.--Not later than 3 years after the date of
enactment of this Act, the Secretary of Labor shall deliver a
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 regarding the utilization, effectiveness, and
participants' understanding of the benchmarking requirements
under this section.
SEC. 304. REVIEW AND REPORT TO CONGRESS RELATING TO REPORTING
AND DISCLOSURE REQUIREMENTS.
(a) Study.--As soon as practicable after the date of
enactment of this Act, the Secretary of Labor, the Secretary
of the Treasury, and the Director of the Pension Benefit
Guaranty Corporation shall review the reporting and
disclosure requirements as applicable to each such agency
head, of--
(1) the Employee Retirement Income Security Act of 1974
applicable to pension plans (as defined in section 3(2) of
such Act (29 U.S.C. 1002(2)); 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) of such
section).
(b) Report.--
(1) In general.--Not later than 2 years after the date of
enactment of this Act, the Secretary of Labor, the Secretary
of the Treasury, and the Director of 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 Committee on Education and Labor and
the Committee on Ways and Means of the House of
Representatives and the Committee on Health, Education,
Labor, and Pensions and the Committee on Finance of the
Senate to consolidate, simplify, standardize, and improve
such requirements so as to simplify reporting for such plans
and ensure that plans can 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.
(2) Analysis of effectiveness.--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, understanding, and retaining
disclosures.
(3) Collection of information.--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 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) 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 that the
participant would be entitled to receive notwithstanding 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--
``(A) the summary plan description pursuant to section
104(b), and
``(B) any other notices related to eligibility under the
plan required to be furnished under this title, or the
Internal Revenue Code of 1986, in connection with such
participant's initial eligibility to participate in such
plan;
``(3) is not participating in such plan;
``(4) does not have an account balance in the plan; and
``(5) satisfies such other criteria as the Secretary of
Labor may determine appropriate, as prescribed in guidance
issued in consultation with the Secretary of Treasury.
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 and rights under the plan, with a
focus on employer contributions and vesting provisions; 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.''.
(b) 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 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) an annual reminder notice 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 that the
participant would be entitled to receive notwithstanding 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 received--
``(i) the summary plan description pursuant to section
104(b) of the Employee Retirement Income Security Act of
1974, and
``(ii) any other notices related to eligibility under the
plan and required to be furnished under this title, or 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,
``(D) does not have an account balance in the plan, and
``(E) satisfies such other criteria as the Secretary of the
Treasury may determine appropriate, as prescribed in guidance
issued in consultation with the Secretary of Labor.
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.
[[Page H3934]]
``(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.''.
(c) Effective Date.--The amendments made by this section
shall apply to plan years beginning after December 31, 2022.
SEC. 306. RETIREMENT SAVINGS LOST AND FOUND.
(a) In General.--
(1) Establishment of retirement savings lost and found.--
Part 5 of title I of the Employee Retirement Income Security
Act of 1974 (29 U.S.C. 1341 et seq.) is amended by adding at
the end the following:
``SEC. 523. RETIREMENT SAVINGS LOST AND FOUND.
``(a) Establishment.--
``(1) In general.--Not later than 2 years after the date of
the enactment of this section, the Secretary of Labor, in
consultation with the Secretary of the Treasury, shall
establish an online searchable database (to be managed by the
Department of Labor in accordance with this section) to be
known as the `Retirement Savings Lost and Found'. The
Retirement Savings Lost and Found shall--
``(A) allow an individual to search for information that
enables the individual to locate the administrator of any
plan described in paragraph (2) with respect to which the
individual is or was a participant or beneficiary, and
provide contact information for the administrator of any such
plan;
``(B) allow the Department of Labor to assist such an
individual in locating any such plan of the individual; and
``(C) allow the Department of Labor to make any necessary
changes to contact information on record for the
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
administrator, or other causes.
The Retirement Savings Lost and Found established under this
paragraph shall include information reported under this
section and other relevant information obtained by the
Department of Labor.
``(2) Plans described.--A plan described in this paragraph
is a plan to which the vesting standards of section 203
apply.
``(b) Administration.--The Retirement Savings Lost and
Found established under subsection (a) shall provide
individuals described in subsection (a)(1) only with the
ability to search for information that enables the individual
to locate the administrator and contact information for the
administrator of any plan with respect to which the
individual is or was 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.
``(c) Safeguarding Participant Privacy and Security.--In
establishing the Retirement Savings Lost and Found under
subsection (a), the Department of Labor shall take all
necessary and proper precautions to ensure that individuals'
plan information maintained by the Retirement Savings Lost
and Found is protected.
``(d) Definition of Administrator.--For purposes of this
section, the term `administrator' has the meaning given such
term in section 3(16)(A).
``(e) Information Collection From Plans.--Effective with
respect to plan years beginning after the second December 31
occurring after the date of the enactment of this subsection,
the administrator of a plan to which the vesting standards of
section 203 apply shall submit to the Department of Labor, at
such time and in such form and manner as is prescribed in
regulations--
``(1) the information described in paragraphs (1) through
(4) of section 6057(b) of the Internal Revenue Code of 1986;
``(2) the information described in subparagraphs (A) and
(B) of section 6057(a)(2) of such Code;
``(3) the name and taxpayer identifying number of each
participant or former participant in the plan--
``(A) who, during the current plan year or any previous
plan year, was reported under section 6057(a)(2)(C) of such
Code, and with respect to whom the benefits described in
clause (ii) thereof were fully paid during the plan year;
``(B) with respect to whom any amount was distributed under
section 401(a)(31)(B) of such Code during the plan year; or
``(C) with respect to whom a deferred annuity contract was
distributed during the plan year;
``(4) in the case of a participant or former participant to
whom paragraph (3) applies--
``(A) in the case of a participant described in
subparagraph (B) thereof, the name and address of the
designated trustee or issuer described in section
401(a)(31)(B)(i) of such Code and the account number of the
individual retirement plan to which the amount was
distributed; and
``(B) in the case of a participant described in
subparagraph (C) thereof, the name and address of the issuer
of such annuity contract and the contract or certificate
number; and
``(5) such other information as the Secretary of Labor may
require.
``(f) Information Collection From Federal Agencies.--On
request, the Secretary of Labor may access and receive such
information collected by other Federal agencies as may be
necessary and appropriate to perform work related to the
Retirement Savings Lost and Found.
``(g) Program Integrity Audit.--On an annual basis for each
of the first 5 years beginning one year after the
establishment of the database in subsection (a)(1) and every
5 years thereafter, the Inspector General of the Department
of Labor shall conduct an audit of the administration of the
Retirement Savings Lost and Found.''.
(3) Conforming amendment.--The table of contents for the
Employee Retirement Income Security Act of 1974 (29 U.S.C.
1001 et seq.) is amended by inserting after the item relating
to section 522 the following:
``Sec. 523.Retirement Savings Lost and Found.''.
SEC. 307. UPDATING DOLLAR LIMIT FOR MANDATORY DISTRIBUTIONS.
(a) In General.--Section 203(e)(1) of the Employee
Retirement Income Security Act of 1974 and sections
401(a)(31)(B)(ii) and 411(a)(11)(A) of the Internal Revenue
Code of 1986 are each amended by striking ``$5,000'' and
inserting ``$7,000''.
(b) Effective Date.--The amendments made by this section
shall apply to distributions made after December 31, 2022.
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 2021-30, 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 2021-30 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
2021-30 (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 with
respect to an individual retirement plan (as so defined),
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) 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.
(e) 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 2021-30 (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
[[Page H3935]]
or misuse of plan assets, or is directly or indirectly
related to an abusive tax avoidance transaction.
(f) 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 2021-30 (or any successor
guidance).''
SEC. 309. ELIMINATE THE ``FIRST DAY OF THE MONTH''
REQUIREMENT FOR GOVERNMENTAL SECTION 457(B)
PLANS.
(a) In General.--Section 457(b)(4) 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) One-time Election for Qualified Charitable Distribution
to Split-interest Entity.--Section 408(d)(8) of the Internal
Revenue Code of 1986 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,
``(II) the aggregate amount of distributions of the
taxpayer with respect to which an election under this
subparagraph is made does not exceed $50,000, and
``(III) 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).''.
(b) Inflation Adjustment.--Section 408(d)(8) of such Code,
as amended by subsection (a), is amended by adding at the end
the following new subparagraph:
``(G) Inflation adjustment.--
``(i) In general.--In the case of any taxable year
beginning after 2022, each of the dollar amounts in
subparagraphs (A) and (F) 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 2021'
for `calendar year 2016' in subparagraph (A)(ii) thereof.
``(ii) Rounding.--If any dollar amount increased under
clause (i) is not a multiple of $1,000, such dollar amount
shall be rounded to the nearest multiple of $1,000.''.
(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. 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 by striking ``in
governmental plans'' and inserting ``and private sector
firefighters''
(c) Effective Date.--The amendments made by this section
shall apply to distributions made after December 31, 2022.
SEC. 312. 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 December 31, 2027.
SEC. 313. INDIVIDUAL RETIREMENT PLAN STATUTE OF LIMITATIONS
FOR EXCISE TAX ON EXCESS CONTRIBUTIONS AND
CERTAIN ACCUMULATIONS.
Section 6501(l) of the Internal Revenue Code of 1986 is
amended 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 or 4974 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--
[[Page H3936]]
``(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. 314. 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 December 31, 2022, 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 or beneficiary,
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, unless, on
election of the participant, the participant receives such
statements electronically.
(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 December 31, 2022, 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 any 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; and
(F) a plan is permitted to furnish a duplicate electronic
statement in any case in which the plan furnishes a paper
pension benefit statement.
(c) Effective Date.--The amendment made by subsection (a)
shall apply with respect to plan years beginning after
December 31, 2023.
SEC. 315. SEPARATE APPLICATION OF TOP HEAVY RULES TO DEFINED
CONTRIBUTION PLANS COVERING EXCLUDIBLE
EMPLOYEES.
(a) In General.--Section 416(c)(2) of the Internal Revenue
Code of 1986 is amended by adding at the end the following:
``(C) Separate application to employees not meeting age and
service requirements.--If employees not meeting the age or
service requirements of section 410(a)(1) (without regard to
subparagraph (B) thereof) are covered under a plan of the
employer which meets the requirements of subparagraphs (A)
and (B) separately with respect to such employees, such
employees may be excluded from consideration in determining
whether any plan of the employer meets the requirements of
subparagraphs (A) and (B).''.
(b) Effective Date.--The amendment made by subsection (a)
shall apply to plan years beginning after the date of the
enactment of this Act.
SEC. 316. REPAYMENT OF QUALIFIED BIRTH OR ADOPTION
DISTRIBUTION LIMITED TO 3 YEARS.
(a) In General.--Section 72(t)(2)(H)(v)(I) of the Internal
Revenue Code of 1986 is amended by striking ``may make'' and
inserting ``may, at any time during the 3-year period
beginning on the day after the date on which such
distribution was received, make''.
(b) Effective Date.--The amendment made by this section
shall take effect as if included in the enactment of section
113 of the Setting Every Community Up for Retirement
Enhancement Act of 2019.
SEC. 317. EMPLOYER MAY RELY ON EMPLOYEE CERTIFYING THAT
DEEMED HARDSHIP DISTRIBUTION CONDITIONS ARE
MET.
(a) Cash or Deferred Arrangements.--Section 401(k)(14) of
the Internal Revenue Code of 1986 is amended by adding at the
end the following new subparagraph:
``(C) Employee certification.--In determining whether a
distribution is upon the hardship of an employee, the
administrator of the plan may rely on a certification by the
employee that the distribution is on account of a financial
need of a type that is deemed in regulations prescribed by
the Secretary to be an immediate and heavy financial need and
that such distribution is not in excess of the amount
required to satisfy such financial need.''.
(b) 403(b) Plans.--
(1) Custodial accounts.--Section 403(b)(7) of such Code is
amended by adding at the end the following new subparagraph:
``(D) Employee certification.--In determining whether a
distribution is upon the financial hardship of an employee,
the administrator of the plan may rely on a certification by
the employee that the distribution is on account of a
financial need of a type that is deemed in regulations
prescribed by the Secretary to be an immediate and heavy
financial need and that such distribution is not in excess of
the amount required to satisfy such financial need.''.
(2) Annuity contracts.--Section 403(b)(11) of such Code is
amended by adding at the end the following: ``In determining
whether a distribution is upon hardship of an employee, the
administrator of the plan may rely on a certification by the
employee that the distribution is on account of a financial
need of a type that is deemed in regulations prescribed by
the Secretary to be an immediate and heavy financial need and
that such distribution is not in excess of the amount
required to satisfy such financial need.''.
(c) 457(b) Plan.--Section 457(d) of such Code is amended by
adding at the end the following new paragraph:
``(4) Participant certification.--In determining whether a
distribution to a participant is made when the participant is
faced with an unforeseeable emergency, the administrator of a
plan maintained by an eligible employer described in
subsection (e)(1)(A) may rely on a certification by the
participant that the distribution is made when the
participant is faced with unforeseeable emergency of a type
that is described in regulations prescribed by the Secretary
as an unforeseeable emergency and that the distribution is
not in excess of the amount reasonably necessary to satisfy
the emergency need.''.
(d) Effective Date.--The amendments made by this section
shall apply to plan years beginning after December 31, 2022.
SEC. 318. PENALTY-FREE WITHDRAWALS FROM RETIREMENT PLANS FOR
INDIVIDUALS IN CASE OF DOMESTIC ABUSE.
(a) In General.--Section 72(t)(2) of the Internal Revenue
Code of 1986 is amended by adding at the end the following
new subparagraph:
``(I) Distributions from retirement plans in case of
domestic abuse.--
``(i) In general.--Any eligible distribution to a domestic
abuse victim.
``(ii) Limitation.--The aggregate amount which may be
treated as an eligible distribution to a domestic abuse
victim by any individual shall not exceed an amount equal to
the lesser of--
``(I) $10,000, or
``(II) 50 percent of the present value of the
nonforfeitable accrued benefit of the employee under the
plan.
``(iii) Eligible distribution to a domestic abuse victim.--
For purposes of this subparagraph--
``(I) In general.--A distribution shall be treated as an
eligible distribution to a domestic abuse victim if such
distribution is from an applicable eligible retirement plan
to an individual and made during the 1-year period beginning
on any date on which the individual is a victim of domestic
abuse by a spouse or domestic partner.
``(II) Domestic abuse.--The term `domestic abuse' means
physical, psychological, sexual, emotional, or economic
abuse, including efforts to control, isolate, humiliate, or
intimidate the victim, or to undermine the victim's ability
to reason independently, including by means of abuse of the
victim's child or another family member living in the
household.
``(iv) Treatment of plan distributions.--
[[Page H3937]]
``(I) In general.--If a distribution to an individual would
(without regard to clause (ii)) be an eligible distribution
to a domestic abuse victim , a plan shall not be treated as
failing to meet any requirement of this title merely because
the plan treats the distribution as an eligible distribution
to a domestic abuse victim, unless the aggregate amount of
such distributions from all plans maintained by the employer
(and any member of any controlled group which includes the
employer) to such individual exceeds the limitation under
clause (ii).
``(II) Controlled group.--For purposes of subclause (I),
the term `controlled group' means any group treated as a
single employer under subsection (b), (c), (m), or (o) of
section 414.
``(v) Amount distributed may be repaid.--
``(I) In general.--Any individual who receives a
distribution described in clause (i) may, at any time during
the 3-year period beginning on the day after the date on
which such distribution was received, make one or more
contributions in an aggregate amount not to exceed the amount
of such distribution to an applicable eligible retirement
plan of which such individual is a beneficiary and to which a
rollover contribution of such distribution could be made
under section 402(c), 403(a)(4), 403(b)(8), 408(d)(3), or
457(e)(16), as the case may be.
``(II) Limitation on contributions to applicable eligible
retirement plans other than IRAs.--The aggregate amount of
contributions made by an individual under subclause (I) to
any applicable eligible retirement plan which is not an
individual retirement plan shall not exceed the aggregate
amount of eligible distributions to a domestic abuse victim
which are made from such plan to such individual. Subclause
(I) shall not apply to contributions to any applicable
eligible retirement plan which is not an individual
retirement plan unless the individual is eligible to make
contributions (other than those described in subclause (I))
to such applicable eligible retirement plan.
``(III) Treatment of repayments of distributions from
applicable eligible retirement plans other than iras.--If a
contribution is made under subclause (I) with respect to an
eligible distribution to a domestic abuse victim from an
applicable eligible retirement plan other than an individual
retirement plan, then the taxpayer shall, to the extent of
the amount of the contribution, be treated as having received
such distribution in an eligible rollover distribution (as
defined in section 402(c)(4)) and as having transferred the
amount to the applicable eligible retirement plan in a direct
trustee to trustee transfer within 60 days of the
distribution.
``(IV) Treatment of repayments for distributions from
iras.--If a contribution is made under subclause (I) with
respect to an eligible distribution to a domestic abuse
victim from an individual retirement plan, then, to the
extent of the amount of the contribution, such distribution
shall be treated as a distribution described in section
408(d)(3) and as having been transferred to the applicable
eligible retirement plan in a direct trustee to trustee
transfer within 60 days of the distribution.
``(vi) Definition and special rules.--For purposes of this
subparagraph:
``(I) Applicable eligible retirement plan.--The term
`applicable eligible retirement plan' means an eligible
retirement plan (as defined in section 402(c)(8)(B)) other
than a defined benefit plan.
``(II) Exemption of distributions from trustee to trustee
transfer and withholding rules.--For purposes of sections
401(a)(31), 402(f), and 3405, an eligible distribution to a
domestic abuse victim shall not be treated as an eligible
rollover distribution.
``(III) Distributions treated as meeting plan distribution
requirements; self-certification.--Any distribution which the
employee or participant certifies as being an eligible
distribution to a domestic abuse victim shall be treated as
meeting the requirements of sections 401(k)(2)(B)(i),
403(b)(7)(A)(i), 403(b)(11), and 457(d)(1)(A).''.
(b) Effective Date.--The amendments made by this section
shall apply to distributions made after the date of the
enactment of this Act.
SEC. 319. REFORM OF FAMILY ATTRIBUTION RULES.
(a) Controlled Groups.--Section 414(b) of the Internal
Revenue Code of 1986 is amended--
(1) by striking ``For purposes of'' and inserting the
following:
``(1) In general.--For purposes of'', and
(2) by adding at the end the following new paragraphs:
``(2) Special rules for applying family attribution.--For
purposes of applying the attribution rules under section 1563
with respect to paragraph (1), the following rules apply:
``(A) Community property laws shall be disregarded for
purposes of determining ownership.
``(B) Except as provided by the Secretary, stock of an
individual not attributed under section 1563(e)(5) to such
individual's spouse shall not be attributed to such spouse by
reason of section 1563(e)(6)(A).
``(C) Except as provided by the Secretary, in the case of
stock in different corporations that is attributed to a child
under section 1563(e)(6)(A) from each parent, and is not
attributed to such parents as spouses under section
1563(e)(5), such attribution to the child shall not by itself
result in such corporations being members of the same
controlled group.
``(3) Plan shall not fail to be treated as satisfying this
section.--If the application of paragraph (2) causes two or
more entities to be a controlled group, or to no longer be in
a controlled group, such change shall be treated as a
transaction to which section 410(b)(6)(C) applies.''.
(b) Affiliated Service Groups.--Section 414(m)(6)(B) of
such Code is amended--
(1) by striking ``Ownership.--In determining'' and
inserting the following: ``Ownership.--
``(i) In general.--In determining'', and
(2) by adding at the end the following new clauses:
``(ii) Special rules for applying family attribution.--For
purposes of applying the attribution rules under section 318
with respect to clause (i), the following rules apply:
``(I) Community property laws shall be disregarded for
purposes of determining ownership.
``(II) Except as provided by the Secretary, stock of an
individual not attributed under section 318(a)(1)(A)(i) to
such individual's spouse shall not be attributed by reason of
section 318(a)(1)(A)(ii) to such spouse from a child who has
not attained the age of 21 years.
``(III) Except as provided by the Secretary, in the case of
stock in different corporations that is attributed under
section 318(a)(1)(A)(ii) to a child who has not attained the
age of 21 years from each parent, and is not attributed to
such parents as spouses under section 318(a)(1)(A)(i), such
attribution to the child shall not by itself result in such
corporations being members of the same affiliated service
group.
``(iii) Plan shall not fail to be treated as satisfying
this section.--If the application of clause (ii) causes two
or more entities to be an affiliated service group, or to no
longer be in an affiliated service group, such change shall
be treated as a transaction to which section 410(b)(6)(C)
applies.''.
(c) Effective Date.--The amendments made by this section
shall apply to plan years beginning on or after the date of
the enactment of this Act.
SEC. 320. AMENDMENTS TO INCREASE BENEFIT ACCRUALS UNDER PLAN
FOR PREVIOUS PLAN YEAR ALLOWED UNTIL EMPLOYER
TAX RETURN DUE DATE.
(a) In General.--Section 401(b) of the Internal Revenue
Code of 1986 is amended by adding at the end the following
new paragraph:
``(3) Retroactive plan amendments that increase benefit
accruals.--If--
``(A) an employer amends a stock bonus, pension, profit-
sharing, or annuity plan to increase benefits accrued under
the plan effective for the preceding plan year (other than
increasing the amount of matching contributions (as defined
in subsection (m)(4)(A))),
``(B) such amendment would not otherwise cause the plan to
fail to meet any of the requirements of this subchapter, and
``(C) such amendment is adopted before the time prescribed
by law for filing the return of the employer for a taxable
year (including extensions thereof) during which such
amendment is effective,
the employer may elect to treat such amendment as having been
adopted as of the last day of the plan year in which the
amendment is effective.''.
(b) Effective Date.--The amendments made by this section
shall apply to plan years beginning after December 31, 2023.
SEC. 321. RETROACTIVE FIRST YEAR ELECTIVE DEFERRALS FOR SOLE
PROPRIETORS.
(a) In General.--Section 401(b)(2) of the Internal Revenue
Code of 1986 is amended by adding at the end the following:
``In the case of an individual who owns the entire interest
in an unincorporated trade or business, and who is the only
employee of such trade or business, any elective deferrals
(as defined in section 402(g)(3)) under a qualified cash or
deferred arrangement to which the preceding sentence applies,
which are made by such individual before the time for filing
the return of such individual for the taxable year
(determined without regard to any extensions) ending after or
with the end of the plan's first plan year, shall be treated
as having been made before the end of such first plan
year.''.
(b) Effective Date.--The amendment made by this section
shall apply to plan years beginning after the date of the
enactment of this Act.
SEC. 322. LIMITING CESSATION OF IRA TREATMENT TO PORTION OF
ACCOUNT INVOLVED IN A PROHIBITED TRANSACTION.
(a) In General.--Section 408(e)(2)(A) of the Internal
Revenue Code of 1986 is amended by striking ``such account
ceases to be an individual retirement account'' and inserting
the following: ``the amount involved (as defined in section
4975(f)(4)) in such transaction shall be treated as
distributed to the individual''.
(b) Conforming Amendments.--
(1) Section 408(e)(2)(B) of such Code is amended to read as
follows:
``(B) Account treated as distributing potion of assets used
in prohibited transaction.--In any case in which a portion of
an individual retirement account is treated as distributed
under subparagraph (A) as of the first day of any taxable
year, paragraph (1) of subsection (d) applies as if there
were a distribution on such first day in an amount equal to
the fair market value of such portion, determined as of the
date on which the
[[Page H3938]]
transaction prohibited by section 4975 occurs.''.
(A) by striking ``all its assets.--In any case'' and all
that follows through ``by reason of subparagraph (A)'' and
inserting the following: ``portion of assets used in
prohibited transaction.--In any case in which a portion of an
individual retirement account is treated as distributed under
subparagraph (A)'', and
(B) by striking ``all assets in the account'' and inserting
``such portion''.
(2) Section 4975(c)(3) of such Code is amended by striking
``the account ceases'' and all that follows and inserting the
following: ``the portion of the account used in the
transaction is treated as distributed under paragraph (2)(A)
or (4) of section 408(e).''.
(c) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after the date of the
enactment of this Act.
SEC. 323. REVIEW OF PENSION RISK TRANSFER INTERPRETIVE
BULLETIN.
Not later than 1 year after the date of enactment of this
Act, the Secretary of Labor shall--
(1) review section 2509.95-1 of title 29, Code of Federal
Regulations (relating to the fiduciary standards under the
Employee Retirement Income Security Act of 1974 when
selecting an annuity provider for a defined benefit pension
plan) to determine whether amendments to such section are
warranted; and
(2) report to Congress on the findings of such review,
including an assessment of any risk to participants.
TITLE IV--TECHNICAL AMENDMENTS
SEC. 401. AMENDMENTS RELATING TO SETTING EVERY COMMUNITY UP
FOR RETIREMENT ENHANCEMENT ACT OF 2019.
(a) Technical Amendments.--
(1) Amendments relating to section 103.--
(A) Section 401(k)(12)(G) of the Internal Revenue Code of
1986 is amended by striking ``the requirements under
subparagraph (A)(i)'' and inserting ``the contribution
requirements under subparagraph (B) or (C)''.
(B) Section 401(k)(13)(D)(iv) of such Code is amended by
striking ``and (F)'' and inserting ``and (G)''.
(C) Section 401(m)(12) of such Code is amended by striking
``and'' at the end of subparagraph (A), by redesignating
subparagraph (B) as subparagraph (C), and by inserting after
subparagraph (A) (as so amended) the following new
subparagraph:
``(B) meets the notice requirements of subsection
(k)(13)(E), and''.
(2) Amendment relating to section 112.--Section
401(k)(15)(B)(i)(II) of such Code is amended by striking
``subsection (m)(2)'' and inserting ``paragraphs (2), (11),
and (12) of subsection (m)''.
(3) Amendment relating to section 114.--Section
401(a)(9)(C)(iii) of such Code 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))''.
(4) Amendment relating to section 116.--Section 4973(b) of
such Code 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).''.
(5) Effective date.--The amendments made by this subsection
shall take effect as if included in the section of the
Setting Every Community Up for Retirement Enhancement Act of
2019 to which the amendment relates.
(b) Clerical Amendments.--
(1) Section 408(o)(5)(A) of such Code is amended by
striking ``subsection (b)'' and inserting ``section 219(b)''.
(2) Section 72(t)(2)(H)(vi)(IV) of such Code 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, 2024, or such later date as
the Secretary of the Treasury may prescribe.
In the case of a governmental plan (as defined in section
414(d) of the Internal Revenue Code of 1986), or an
applicable collectively bargained plan, this paragraph shall
be applied by substituting ``2026'' for ``2024''. For
purposes of the preceding sentence, the term ``applicable
collectively bargained plan'' means a plan maintained
pursuant to 1 or more collective bargaining agreements
between employee representatives and 1 or more employers
ratified before the date of enactment of this Act.
(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.
(c) Coordination With Other Provisions Relating to Plan
Amendments.--
(1) SECURE act.--Section 601(b)(1) of the Setting Every
Community Up for Retirement Enhancement Act of 2019 is
amended--
(A) by striking ``January 1, 2022'' in subparagraph (B) and
inserting ``January 1, 2024'', and
(B) by striking ``substituting `2024' for `2022'.'' in the
flush matter at the end and inserting ``substituting `2026'
for `2024'.''.
(2) CARES act.--
(A) Special rules for use of retirement funds.--Section
2202(c)(2)(A) of the CARES Act is amended by striking
``January 1, 2022'' in clause (ii) and inserting ``January 1,
2024''.
(B) Temporary waiver of required minimum distributions
rules for certain retirement plans and accounts.--Section
2203(c)(2)(B)(i) of the CARES Act is amended--
(i) by striking ``January 1, 2022'' in subclause (II) and
inserting ``January 1, 2024'', and
(ii) by striking ``substituting `2024' for `2022'.'' in the
flush matter at the end and inserting ``substituting `2026'
for `2024'.''.
(C) Taxpayer certainty and disaster tax relief act of
2020.--Section 302(d)(2)(A) of the Taxpayer Certainty and
Disaster Tax Relief Act of 2020 is amended by striking
``January 1, 2022'' in clause (ii) and inserting ``January 1,
2024''.
TITLE VI--REVENUE PROVISIONS
SEC. 601. SIMPLE AND SEP ROTH IRAS.
(a) In General.--Section 408A of the Internal Revenue Code
of 1986 is amended by striking subsection (f).
(b) Rules Relating to Simplified Employee Pensions.--
(1) Contributions.--Section 402(h)(1) of such Code is
amended by striking ``and'' at the end of subparagraph (A),
by striking the period at the end of subparagraph (B) and
inserting ``, and'', and by adding at the end the following
new subparagraph:
``(C) in the case of any contributions pursuant to a
simplified employer pension which are made to an individual
retirement plan designated as a Roth IRA, such contribution
shall not be excludable from gross income.''.
(2) Distributions.--Section 402(h)(3) of such Code is
amended by inserting ``, or section 408A(d) in the case of an
individual retirement plan designated as a Roth IRA'' before
the period at the end.
(3) Election required.--Section 408(k) of such Code is
amended by redesignating paragraphs (7), (8), and (9) as
paragraphs (8), (9), and (10), respectively, and by inserting
the after paragraph (6) the following new paragraph:
``(7) Roth contribution election.--An individual retirement
plan which is designated as a Roth IRA shall not be treated
as a simplified employee pension under this subsection unless
the employee elects for such plan to be so treated (at such
time and in such manner as the Secretary may provide).''.
(c) Rules Relating to Simple Retirement Accounts.--
(1) Election required.--Section 408(p) of such Code is
amended by adding at the end the following new paragraph:
``(11) Roth contribution election.--An individual
retirement plan which is designated as a Roth IRA shall not
be treated as a simple retirement account under this
subsection unless the employee elects for such plan to be so
treated (at such time and in such manner as the Secretary may
provide).''.
(2) Rollovers.--Section 408A(e) of such Code is amended by
adding at the end the following new paragraph:
``(3) Simple retirement accounts.--In the case of any
payment or distribution out of a simple retirement account
(as defined in section 408(p)) with respect to which an
election has been made under section 408(p)(11) and to which
72(t)(6) applies, the term `qualified rollover contribution'
shall not include any payment or distribution paid into an
account other than another simple retirement account (as so
defined).''.
(d) Coordination With Roth Contribution Limitation.--
Section 408A(c) of such Code is amended by adding at the end
the following new paragraph:
``(7) Coordination with limitation for simple retirement
plans and SEPs.--In the case of an individual on whose behalf
contributions are made to a simple retirement account or a
simplified employee pension,
[[Page H3939]]
the amount described in paragraph (2)(A) shall be increased
by an amount equal to the contributions made on the
individual's behalf to such account or pension for the
taxable year, but only to the extent such contributions--
``(A) in the case of a simplified retirement account--
``(i) do not exceed the sum of the dollar amount in effect
for the taxable year under section 408(p)(2)(A)(ii) and the
employer contribution required under subparagraph (A)(iii) or
(B)(i), as the case may be, of section 408(p)(2), and
``(ii) do not cause the elective deferrals (as defined in
section 402(g)(3)) on behalf of such individual to exceed the
limitation under section 402(g)(1) (taking into account any
additional elective deferrals permitted under section
414(v)), or
``(B) in the case of a simplified employee pension, do not
exceed the limitation in effect under section 408(j).''.
(e) Conforming Amendment.--Section 408A(d)(2)(B) of such
Code is amended by inserting ``, or employer in the case of a
simple retirement account (as defined in section 408(p)) or
simplified employee pension (as defined in section 408(k)),''
after ``individual's spouse''.
(f) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December 31,
2022.
SEC. 602. HARDSHIP WITHDRAWAL RULES FOR 403(B) PLANS.
(a) In General.--Section 403(b) of the Internal Revenue
Code of 1986, as amended by the preceding provisions of this
Act, is amended by adding at the end the following new
paragraph:
``(16) Special rules relating to hardship withdrawals.--For
purposes of paragraphs (7) and (11)--
``(A) Amounts which may be withdrawn.--The following
amounts may be distributed upon hardship of the employee:
``(i) Contributions made pursuant to a salary reduction
agreement (within the meaning of section 3121(a)(5)(D)).
``(ii) Qualified nonelective contributions (as defined in
section 401(m)(4)(C)).
``(iii) Qualified matching contributions described in
section 401(k)(3)(D)(ii)(I).
``(iv) Earnings on any contributions described in clause
(i), (ii), or (iii).
``(B) No requirement to take available loan.--A
distribution shall not be treated as failing to be made upon
the hardship of an employee solely because the employee does
not take any available loan under the plan.''.
(b) Conforming Amendments.--
(1) Section 403(b)(7)(A)(i)(V) of such Code is amended by
striking ``in the case of contributions made pursuant to a
salary reduction agreement (within the meaning of section
3121(a)(5)(D))'' and inserting ``subject to the provisions of
paragraph (16)''.
(2) Paragraph (11) of section 403(b) of such Code, as
amended by the preceding provisions of this Act, is amended--
(A) by striking ``in'' in subparagraph (B) and inserting
``subject to the provisions of paragraph (16), in'', and
(B) by striking the penultimate sentence.
(c) Effective Date.--The amendments made by this section
shall apply to plan years beginning after December 31, 2022.
SEC. 603. ELECTIVE DEFERRALS GENERALLY LIMITED TO REGULAR
CONTRIBUTION LIMIT.
(a) Applicable Employer Plans.--Section 414(v)(1) of the
Internal Revenue Code of 1986 is amended by adding at the end
the following: ``Except in the case of an applicable employer
plan described in paragraph (6)(A)(iv), the preceding
sentence shall only apply if contributions are designated
Roth contributions (as defined in section 402A(c)(1)).''.
(b) Conforming Amendments.--
(1) Section 402(g)(1) of such Code is amended by striking
subparagraph (C).
(2) Section 457(e)(18)(A)(ii) of such Code is amended by
inserting ``the lesser of any designated Roth contributions
made by the participant to the plan or'' before ``the
applicable dollar amount''.
(c) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December 31,
2022.
SEC. 604. OPTIONAL TREATMENT OF EMPLOYER MATCHING
CONTRIBUTIONS AS ROTH CONTRIBUTIONS.
(a) In General.--Section 402A(a) of the Internal Revenue
Code of 1986 is amended by redesignating paragraph (2) as
paragraph (3), by striking ``and'' at the end of paragraph
(1), and by inserting after paragraph (1) the following new
paragraph:
``(2) any designated Roth contribution which is made by the
employer to the program on the employee's behalf, and on
account of the employee's contribution, elective deferral, or
(subject to the requirements of section 401(m)(13)) qualified
student loan payment, shall be treated as a matching
contribution for purposes of this chapter, except that such
contribution shall not be excludable from gross income,
and''.
(b) Matching Included in Qualified Roth Contribution
Program.--Section 402A(b)(1) of such Code is amended--
(1) by inserting ``, or to have made on the employee's
behalf,'' after ``elect to make'', and
(2) by inserting ``, or of matching contributions which may
otherwise be made on the employee's behalf,'' after
``otherwise eligible to make''.
(c) Designated Roth Matching Contributions.--Section
402A(c)(1) of such Code is amended by inserting ``or matching
contribution'' after ``elective deferral''.
(d) Matching Contribution Defined.--Section 402A(e) of such
Code is amended by adding at the end the following:
``(3) Matching contribution.--The term `matching
contribution' means--
``(A) any matching contribution described in section
401(m)(4)(A), and
``(B) any contribution to an eligible deferred compensation
plan (as defined in section 457(b)) by an eligible employer
described in section 457(e)(1)(A) on behalf of an employee
and on account of such employee's elective deferral under
such plan.''.
(e) Effective Date.--The amendments made by this section
shall apply to contributions made after the date of the
enactment of this Act.
TITLE VII--BUDGETARY EFFECTS
SEC. 701. DETERMINATION OF BUDGETARY EFFECTS.
The budgetary effects of this Act, for the purpose of
complying with the Statutory Pay-As-You-Go Act of 2010, shall
be determined by reference to the latest statement titled
``Budgetary Effects of PAYGO Legislation'' for this Act,
submitted for printing in the Congressional Record by the
Chairman of the House Budget Committee, provided that such
statement has been submitted prior to the vote on passage.
The SPEAKER pro tempore. Pursuant to the order of the House today,
the gentleman from Massachusetts (Mr. Neal) and the gentleman from
Texas (Mr. Brady) each will control 40 minutes.
The Chair recognizes the gentleman from Massachusetts.
Mr. NEAL. Madam Speaker, I yield myself such time as I may consume.
Madam Speaker, H.R. 2954 will help all Americans successfully save
for a secure retirement by expanding coverage and increasing retirement
savings, simplifying the current retirement system and protecting
Americans' retirement accounts.
Retirement security has consistently been one of my top priorities as
chairman of the Committee on Ways and Means. Too many workers in this
Nation reach retirement age without having the savings they need. In
fact--and I hope people will listen to this number--it is estimated
that up to 50 percent of the individuals in America who go to work
every single day do not have enrollment in a qualified retirement plan.
That means those households are at risk of not having enough to
maintain their living standards in retirement.
We need to do more to encourage workers to begin planning for
retirement earlier and we need to make saving considerably easier.
Last Congress, Mr. Brady and I worked together on a bipartisan basis
to do that by enacting the SECURE Act, one of the most significant
retirement bills to become law in well over a decade.
Thanks to the SECURE Act, 4 million more Americans are now able to
save for retirement through their employers, and as many as 700,000 new
retirement accounts will be formed.
Last year, we built on this progress with the passage into law, my
legislation, the Butch Lewis Act. After years of fighting for a
solution to the multiemployer pension crisis, the Butch Lewis Act saved
multiemployer pension plans from insolvency and secured the financial
future of over a million workers and retirees who have played by the
rules and made responsible savings decisions. Think of that and couple
it with what we are about to do today with the guarantee of Social
Security, and we will help to improve the opportunity for members of
American families to have a secure retirement.
Madam Speaker, but more work needs to be done. That is why I am
pleased the H.R. 2954, the Securing a Strong Retirement Act of 2022, is
before us today.
This bipartisan legislation--and by bipartisan, let me thank Mr.
Brady again for his good work on this legislation as well--will expand
automatic enrollment in 401(k) plans by requiring 401(k), 403(b), and
SIMPLE plans to automatically enroll participants upon becoming
eligible, with the ability for employees to opt out of coverage--which
I think, by the way, is not the best idea, but we do provide that
option. Expansion of automatic enrollment will significantly increase
participation in retirement savings plans at work.
H.R. 2954 also enhances the start-up credit, making it easier for
small businesses to sponsor a retirement plan. And the legislation
increases the required minimum distribution age to 75 and indexes the
catch-up contribution limit for individual retirement accounts. These
changes will make it
[[Page H3940]]
easier for American families to prepare for a financially secure
retirement.
On a related note, I think it is important to highlight that U.S.
defined contribution plans have created a unique reservoir of capital
in the innovation economy. Retirement plans are investing in areas such
as tech, financial services, digital commerce, and biotech. That means
that workers' retirement assets are directly tying middle-class workers
to our national innovation economy. That certainly is a win-win for all
of us.
Madam Speaker, I am really pleased that Ranking Member Brady and I
were able to come together on a bipartisan basis to develop this
important legislation. Once again, it passed the Committee on Ways and
Means unanimously. Our efforts have resulted in an excellent product
that has broad support from organizations representing diverse
interests, including retirees, charitable organizations, financial
services providers, police officers, small businesses, and employers.
The list of specific supporters is too long to read but we can start
with the American Red Cross, AARP, and many others, which we will
submit for the Record. Hundreds of groups have endorsed this plan.
Let's work together to expand retirement savings in America.
Madam Speaker, I urge my colleagues to support this legislation, and
I reserve the balance of my time.
Mr. BRADY. Madam Speaker, I yield myself such time as I may consume.
Madam Speaker, I am pleased to join with my friend, Chairman Rich
Neal, in jointly reintroducing SECURE 2.0, which will help hardworking
Americans approach retirement with both confidence and dignity.
For 5 years now, members of the Committee on Ways and Means have
worked tirelessly together to ensure Americans have the resources to
save for a secure retirement. A lot of hard work and negotiation has
gotten us to this point, and I am grateful to Chairman Neal for his
commitment to get this bill across the finish line to the President's
desk.
It is important to remember how far we have come in our joint efforts
to help Americans better prepare for their long-term financial goals.
Following the historic rewrite of our Tax Code with the Tax Cuts and
Jobs Act, Republicans moved toward building on this success for years
to come.
That happened when the Republicans and Democrats worked together to
develop and enact the Setting Every Community Up for Retirement
Enhancement Act, known as the SECURE Act, the most significant
retirement legislation to become law in over a decade.
We made it easier for Main Street businesses to offer retirement
plans to their workers by easing administrative burdens, cutting down
on unnecessary and often costly paperwork.
The SECURE Act made significant improvements to our country's
retirement system. And today, we will do even more.
A recent AARP survey found that rising prices are taking a big toll
on workers, making it difficult to cover everyday expenses or save for
the future. In fact, with a 40-year high inflation, nearly a quarter of
workers surveyed reported that their financial situation is worse today
than it was last year.
A study also found that nearly 40 percent of workers said that they
have no emergency savings, with one out of five reporting they have
nothing saved for retirement. Nothing.
{time} 1615
Both groups peg rising prices of everyday goods as the biggest
barrier for planning for their financial future.
Ensuring Americans have the resources they need for a prosperous
retirement is a bipartisan priority. And with American families'
paychecks falling further behind through rising prices, it has really
never been more important for Congress to help workers get back on
track with their retirement plans.
With this bill we build on the landmark provisions in the SECURE Act,
enabling more workers, especially those with low income and modest
income, to begin saving earlier and giving them piece of mind as they
plan for the future.
Our bill, SECURE 2.0 improves workers' long-term financial wellbeing
by helping more Americans save for retirement at every stage of their
life. SECURE 2.0 contains more than 20 provisions sponsored or
cosponsored by Republicans and Democrats in standalone legislation.
By providing flexibility, for example, we make it easier for local
businesses to tailor retirement plans to best fit the needs of their
workers. These reforms help Americans not only save earlier in their
careers, but helps families save longer as well.
We expand access to workplace retirement by increasing the incentives
for businesses, especially small businesses, to create new plans or
join groups of plans while sharing the cost of administration.
To further help small businesses shoulder the burden of creating a
new plan, our bill matches employer contributions with the new business
tax credit. That can help a small business match up to the first $1,000
in matching contributions for that work.
For those Americans who are further along in their career or already
in retirement, this bill raises the amount these workers can contribute
to catch up on their retirement savings as they near retirement,
doubling it to $10,000 a year. Because we want Americans to save
throughout their lifetime, together we increase the age at which
retirement plan distributions become mandatory to age 75 over time from
72 today.
These changes are especially important because many workers find
themselves making more at the end of their careers and are more open to
focusing on retirement. Those already in retirement often worry about
the effects of mandatory taxable distributions on their long-term
financial plans.
Another recent study by Edward Jones and Morning Consult found 57
percent of Americans who prioritize paying off a student loan are now
behind on their schedule on saving for retirement. Our bill allows
employers to essentially match their workers' student loan repayments
with contributions to the workers' retirement plan.
This means from workers struggling to make ends meet under crushing
student debt and rising prices, they are able to tackle both, paying
off their debt and getting help in working toward a secure retirement.
Madam Speaker, I want to thank Chairman Neal and the members of the
Ways and Means Committee from both parties for their long-term and
diligent efforts. Together, we will ensure more hardworking Americans
are confident in their retirement.
Madam Speaker, I reserve the balance of my time.
Mr. NEAL. Madam Speaker, I yield 1 minute to the gentleman from
California (Mr. Thompson), a real champion of retirement savings.
Mr. THOMPSON of California. Madam Speaker, I thank Chairman Neal and
Ranking Member Brady for their hard work on this important piece of
legislation.
The Securing a Strong Retirement Act of 2021 is bipartisan
legislation that gives workers the tools they need to retire with the
financial stability they deserve and worked so hard to obtain.
Importantly, this legislation allows individuals to pay down a
student loan instead of contributing to a 401(k) plan while still
receiving an employer match in their retirement plan.
I have heard from thousands of individuals in my district who are
facing an overwhelming amount of student loan debt. These are people
who are struggling to start their careers while also trying to pay off
their loans. The SECURE Act provides the opportunity to make payments
on their student loans now while also investing in their future.
I am proud to support this legislation that we are hearing today, and
I thank you for this great bipartisan bill that you have put before us.
Mr. BRADY. Madam Speaker, I yield 1 minute to the gentleman from
Nebraska (Mr. Smith), the Republican leader of the Trade Subcommittee.
Mr. SMITH of Nebraska. Madam Speaker, I am glad we are finally
considering SECURE 2.0, which will help every American family save. The
Savers Credit improvements in this bill will help low-income families
start putting aside money for the future, certainly a key to getting
out of poverty.
The enhanced credit for small employers offering retirement plans
will
[[Page H3941]]
help more businesses offer plans, an important factor in recruiting and
retaining talent.
New tools--like allowing employers to match workers' student loan
repayments with retirement contributions--eliminate the need for young
workers to choose between paying their debt or saving for retirement.
Provisions like enhanced catch-up contributions and delaying required
minimum distributions until age 75 will help older workers have more
control as they near retirement. This is a strong package for savers of
all ages.
Madam Speaker, I thank the chairman and the ranking member for their
efforts to get this to the floor and I certainly urge support.
Mr. NEAL. Madam Speaker, I yield 1 minute to the gentleman from
Connecticut (Mr. Larson), a real champion of retirement savings,
including all things Social Security.
Mr. LARSON of Connecticut. Madam Speaker, I thank Chairman Neal and
Leader Brady--what an outstanding example of bipartisan cooperation.
But especially as it relates to what has amounted to a financial
retirement crisis, this clearly will help aid in the work that has
already been done by Chairman Neal with regard to both the SECURES Act
and the Butch Lewis Act, but this even adds more flexibility and also
provides an automatic opportunity for people to put money forward.
I went to the Aetna School of Insurance and they said there are three
legs on this table: personal savings, pension, and Social Security.
This helps address the pension issue as no one can. Again, I want to
commend Mr. Neal and Mr. Brady for their efforts, and point out that we
have another leg on that stool that is called Social Security that
Congress hasn't addressed in more than 50 years. I commend the chairman
as we go through the process of markup on that as well.
Mr. BRADY. Madam Speaker, I yield 1 minute to the gentleman from
Arizona (Mr. Schweikert).
Mr. SCHWEIKERT. Madam Speaker, it is neat to see us actually have
something that we are all doing together.
A bit of trivia, at the end of this decade, 22 percent of our
population will be 65 or older. Retirement security is--besides just
the moral imperative--it is going to be the financial, it is going to
be the driver of almost all sovereign debt.
Look, there are a couple dozen provisions in this legislation, and in
many ways they look like tinkering, but they come together. If you
happen to have a profession where you have a mandatory retirement age
that might be 60, 65, the ability to do catch-up--to be a small
business and knowing what you can contribute to your 401(k) when you
are doing your taxes instead of trying to guess at the end of the
year--these things all come together.
We are also going to have to look forward in the coming year and deal
with the reality of what did inflation do to the cost of future
retirement? The taxation on, really, gain, that isn't purchasing power,
but is inflation. This is a terrific first step and it is neat to have
us do something together.
Mr. NEAL. Madam Speaker, I yield 1 minute to the gentleman from
Wisconsin (Mr. Kind), another real champion of retirement savings.
Mr. KIND. Madam Speaker, I rise in strong support of Securing a
Strong Retirement Act, or SECURE 2.0, as it is being referred to. This
falls on the heels of passage of the SECURE Act roughly 2 years ago, to
try to make it easier for individuals to save for their retirement
security, especially for small businesses to offer retirement savings
plans for their employees, which has traditionally been a big black
hole when it comes to individual savings.
I am proud that a few of the provisions in this legislation have been
based on legislation I have been working on throughout the years with
my friend and colleague from Pennsylvania (Mr. Kelly). We offered
legislation that would extend the startup tax credit to small employers
that joined multiemployer plans.
Again, with Mr. Kelly, this allows 403(b) plans to participate in
MEPS, including pooled employer plans, or PEPS, as they are known under
the SECURE Act.
Finally, there has been an anomaly in the tax code that we are
addressing in part trying to make it easier for S corporations to be
able to convert to an ESOP model, or an employee share ownership plan.
It is a very good business model, but we are trying to bring that on
par with C corporations.
The SPEAKER pro tempore. The time of the gentleman has expired.
Mr. NEAL. Madam Speaker, I yield an additional 30 seconds to the
gentleman.
Mr. KIND. This has been a great bipartisan effort in committee.
Again, I thank the chairman and the ranking member for creating the
environment not just with today's legislation, but the previous SECURE
Act that we passed roughly 2 years ago, and the ongoing work that we
will have.
My friend from Arizona is right, with 70 million baby boomers
beginning their massive retirement, we have to figure out ways to make
it easier for individuals to save for their own retirement and for
future generations to participate and get a head start. I believe this
legislation accomplishes that.
Mr. BRADY. Madam Speaker, I yield 1\1/2\ minutes to the gentleman
from Illinois (Mr. LaHood).
Mr. LaHOOD. Madam Speaker, I rise today in support of SECURE 2.0. As
a member of the Ways and Means Committee, I thank Chairman Neal and
Ranking Member Brady for their bipartisan work on this legislation that
will help workers save for retirement at all stages of their career and
protect American futures.
This bill includes two key provisions that I was proud to work on,
Retirement Parity for Student Loans Act and the Public Service
Retirement Fairness Act.
The Retirement Parity for Student Loans Act allows workers to make
student loan payments while receiving employer matching contributions
into their retirement plan. This will allow individuals to pay down
student loan debt and save for retirement at the same time.
The Public Service Retirement Fairness Act creates parity between the
public and private sectors, ensuring public-sector and nonprofit
retirement-saving programs have the same access to low-cost investments
as private sector retirement plans.
SECURE 2.0 supports workers at all stages to save for retirement,
helps small businesses create retirement plan options, and builds on
bipartisan success of the SECURE Act passed last Congress.
Madam Speaker, I want to thank my colleagues that worked in a
bipartisan effort for their work on this vital legislation, and I urge
my colleagues to vote ``yes''.
Mr. NEAL. Madam Speaker, I yield 1 minute to the gentlewoman from
California (Ms. Chu), another real champion of retirement savings.
Ms. CHU. Madam Speaker, I rise in strong support of H.R. 2954, the
Securing a Strong Retirement Act. This bill continues the work the Ways
and Means Committee began 2 years ago with the SECURE Act to expand
access to retirement savings and enhance retirement readiness
for millions of Americans across the country.
I am especially proud of provisions drawn from my bill, the
Encouraging Americans to Save Act, that strengthens the Saver's Credit.
This credit provides millions of low- and middle-income taxpayers with
an incentive to save for retirement each year. But currently it is
split into three tiers of 10, 20, or 50 percent.
This legislation not only directs the IRS to promote the credit to
more communities, including those with limited English proficiency, but
also makes it both simpler and more generous by setting it at 50
percent for all eligible taxpayers.
Madam Speaker, I urge a ``yes'' vote on this bill.
Mr. BRADY. Madam Speaker, I yield 1 minute to the gentleman from
Kansas (Mr. Estes).
Mr. ESTES. Madam Speaker, today I rise in support of SECURE 2.0.
Since my time as Kansas State Treasurer and a member of the Ways and
Means Committee, increased retirement security for Americans of all
ages has been a major policy priority for me.
Building on our great success with the SECURE Act in 2019, SECURE 2.0
includes a number of provisions for new employees and near-retirees,
like my bill to improve the required minimum distribution rules, and my
bill that
[[Page H3942]]
would make it easier for employees to save for retirement and pay off
their student loans.
Employers who are part of an employee stock ownership plan--like the
Kansas workers I have talked to at Inland Truck Parts, Conco, and
others--benefit from the bipartisan ESOP provisions in SECURE 2.0.
The bill also ensures public-sector and nonprofit retirement programs
have the same access to low-cost retirements, just like for-profit
retirement plans.
It allows individuals who have decided to pay down a student loan
instead of contributing to a 401(k) to still receive an employee match
for their retirement plans.
These commonsense retirement security reforms deserve to be law, and
I strongly encourage my colleagues to vote ``yes'' on SECURE 2.0.
{time} 1630
Mr. NEAL. Madam Speaker, I am pleased to yield 1 minute to the
gentleman from California (Mr. Panetta), another real champion of
Social Security and retirement.
Mr. PANETTA. Madam Speaker, I rise in support of H.R. 2954, the
SECURE 2.0.
This bipartisan legislation would make it easier for something that
has been getting harder and harder, saving for retirement for workers
and working families.
I commend the chairman and the ranking member for their very, very
hard work, and I thank them for including two of my bipartisan bills in
SECURE 2.0.
My Public Service Retirement Fairness Act ensures that retirement
savings programs for nonprofits and the public sector have the same
access to low-cost investments as private-sector plans.
This bill would greatly benefit many teachers and nonprofit employees
who serve in my district and also have to spend an inordinate amount on
housing by providing them access to affordable retirement plans.
My Family Attribution Modernization Act, which I worked on with my
good friend, Jodey Arrington, is also included in SECURE 2.0.
This bill would modernize outdated family attribution rules so that
women-owned businesses and other small businesses in community property
States, like California, have more flexibility and independence.
The SPEAKER pro tempore. The time of the gentleman has expired.
Mr. NEAL. Madam Speaker, I yield the gentleman an additional 30
seconds.
Mr. PANETTA. Madam Speaker, these bills, along with many, many other
provisions in this bipartisan legislation, are commonsense solutions
for the futures and the retirements of working families. That is why,
Madam Speaker, I urge a ``yes'' vote for SECURE 2.0.
Mr. BRADY. Madam Speaker, I am proud to yield 1 minute to the
gentleman from Pennsylvania (Mr. Kelly).
Mr. KELLY of Pennsylvania. Madam Speaker, I think we should mark this
down, March 29, 2022, the day that the people who were elected and came
to represent our folks back home actually got together and did
something on the House floor that was good for everybody in America.
We are not firing bullets back and forth at each other. We are
saying: Do you know what? Isn't it great, when we work together, what
we can get done.
Mr. Kind and I were walking over together, and he said: Mike, I am
really happy this happened because there is a lot in there that we both
worked on, and it looks like it is going to put a little more gold in
our retirees' pockets when they hit their golden years.
But this is one thing the press will never cover. They will never
say: My God, these Republicans and Democrats got together for American
workers to make sure that they go into retirement and lay their heads
on pillows at night and sleep because they know they have enough to get
through the rest of their lives.
What a moment. What a moment.
I have to tell you, I am so proud to be a part of this. I thank Mr.
Brady and Mr. Neal.
For both sides of the aisle, why don't we use this as an example as
we move forward as to what the heck we are supposed to do for the
people who sent us here to represent them?
The SPEAKER pro tempore. The time of the gentleman has expired.
Mr. BRADY. Madam Speaker, I yield an additional 30 seconds to the
gentleman.
Mr. KELLY of Pennsylvania. Madam Speaker, I thank Kara Getz, from
Chairman Neal's staff, and Payson Peabody, from Ranking Member Brady's
staff, for working together on this. They get so little credit for all
the midnight oil they burn to make sure that we can get legislation
done. I thank them so much, not just for me but for all the retirees
and future retirees we have in this country.
Mr. NEAL. Madam Speaker, might I inquire of the ranking member how
many more speakers he might have.
Mr. BRADY. Madam Speaker, I have a few more.
Mr. NEAL. Madam Speaker, I reserve the balance of my time.
Mr. BRADY. Madam Speaker, I am really proud to yield 1 minute to the
gentleman from North Carolina (Mr. Murphy).
Mr. MURPHY of North Carolina. Madam Speaker, I rise today in support
of SECURE Act 2.0.
When our military members pledge a commitment to the United States,
we promise, in return, to care for them and their families. As the
proud Representative of close to 90,000 veterans in North Carolina, I
am committed to supporting strong legislation that improves the lives
of our veterans and their families.
When servicemembers change base assignments, their spouses often
relocate with them, putting their own careers at stake and on hold. The
SECURE Act prioritizes military family retirements by providing a tax
credit for small employers that make more benefit plans available for
military spouses.
Incentivizing job creators to hire and retain military spouses is an
important step to strengthening military family retirement savings.
I am proud of the bipartisan effort by the Ways and Means Committee
to lead the charge to support our military families, who so often face
many uphill challenges in attaining retirement security. We must always
fight for those who have given us so much to keep our safety.
Mr. NEAL. Madam Speaker, I continue to reserve the balance of my
time.
Mr. BRADY. Madam Speaker, first, I include in the Record a number of
letters and documents in support of SECURE 2.0.
Among a litany of letters advocating for swift passage, there are
four I would like to include. These letters are led by the Employee-
owned S Corporations of America, the American Benefits Council, the
American Retirement Association, and the Investment Company Institute,
all of which were invaluable members in crafting this bipartisan
legislation.
Employee-Owned
S Corporations of America,
Washington, DC, March 24, 2022.
Hon. Richard Neal,
Chairman, Committee on Ways & Means,
Washington, DC.
Hon. Kevin Brady,
Ranking Member, Committee on Ways & Means,
Washington, DC.
Dear Chairman Neal and Ranking Member Brady: Employee-Owned
S Corporations of America (``ESCA'') applauds your efforts to
advance the bipartisan Securing a Strong Retirement Act. We
are particularly supportive of the inclusion of a key
provision reflecting themes of legislation introduced by
Committee members Ron Kind and Jason Smith to encourage the
creation of more private, employee-owned businesses. We thank
you for recognizing the value of S corporation ESOPs to
worker retirement savings, and for reflecting that
recognition in your important legislation.
ESCA is the national voice for employee-owned S
corporations, and its exclusive mission is to preserve and
promote employee-owned S corporations and the benefits
provided to their employee-owners. Most S corporation
employee stock ownership plans (``S ESOPS'') are 100-percent
owned by their employees. Our S ESOP companies engage in a
broad spectrum of business activities ranging from
manufacturing to construction to playing critical supporting
roles such as retail grocery stores and other essential
functions to America's infrastructure.
As you know well, S corporation ESOPs were created 25 years
ago with significant bipartisan support from Congress. Today
S ESOPs accomplish exactly what Congress intended: they
create jobs, generate economic activity, and promote
retirement savings.
[[Page H3943]]
Both specifically for S ESOP employees and more generally,
your bill will increase retirement savings opportunities at a
time when more than 30 percent of Americans do not have
access to a workplace retirement plan and 20 percent of
Americans have no retirement savings at all. By contrast, we
note, the vast majority of S ESOP companies offer their
workers two retirement plans--typically the ESOP plus a
401(k). This focus on retirement security is a hallmark of
employee-owned companies.
A new study conducted by the National Center for Employee
Ownership found that, heading into and during the pandemic,
employees at S ESOP companies had greater job retention and
retirement security, including more than twice the average
total retirement savings of Americans who work at non-ESOP
companies.
We appreciate you recognizing the value of having more S
corporation ESOP companies and look forward to working with
you to continue to identify more ways to enable more working
Americans to be employee-owners.
Thank you for your leadership.
Sincerely,
Stephanie Silverman,
President and CEO.
____
Dear Paige: I am writing on behalf of the American Benefits
Council to express our support for bipartisan retirement
security legislation that will soon be considered on the
floor of the U.S. House of Representatives. This important
legislation follows in the tradition of the Setting Every
Community Up for Retirement Enhancement (SECURE) Act of 2019.
The forthcoming ``SECURE 2.0'' bill reflects a thoroughness
and thoughtfulness that provides enormous value to the
American worker by expanding access to workplace retirement
plans and removing barriers to financial well-being. We have
recently completed a study of the enormously beneficial
impact of the past 25 years of bipartisan retirement
legislation:
Millions of Americans are facing short-term challenges that
need critical attention. But it is also important to continue
our work on enhancing retirement security because of the
harmful effect of the pandemic on savings and retirement
programs, which were facing challenges even before the
pandemic. As we rebuild our economy, part of that effort
needs to include even greater attention to the role of
retirement programs that have been jeopardized. We look
forward to continued progress in the field of retirement
security and stand ready to assist in those efforts.
Lynn Dudley,
Senior Vice President, Global Retirement and Compensation
Policy, American Benefits Council.
Diann Howland,
Vice President, Legislative Affairs, American Benefits
Council.
____
American Retirement Association,
Arlington, VA, March 28, 2022.
Re Letter of Support for the Securing a Strong Retirement Act
of 2022.
Hon. Richard Neal,
Chairman, Ways & Means Committee,
House of Representatives, Washington, DC.
Hon. Bobby Scott,
Chairman, Education & Labor Committee,
House of Representatives, Washington, DC.
Hon. Kevin Brady,
Ranking Member, Ways & Means Committee,
House of Representatives, Washington, DC.
Hon. Virginia Foxx,
Ranking Member, Education & Labor Committee,
House of Representatives, Washington, DC.
Dear Chairman Neal, Ranking Member Brady, Chairman Scott,
and Ranking Member Foxx: On behalf of the over 30,000 members
of the American Retirement Association (ARA), we hereby
express our support for the Securing a Strong Retirement Act
of 2022. We commend you for championing this important piece
of bipartisan retirement legislation.
The ARA is the coordinating entity for its five underlying
affiliate organizations representing the full spectrum of
America's private retirement system--the American Society of
Enrolled Actuaries (ASEA), the American Society of Pension
Professionals and Actuaries (ASPPA), the National Association
of Plan Advisors (NAPA), the National Tax-Deferred Savings
Association (NTSA), and the Plan Sponsor Council of America
(PSCA). The ARA's members include organizations of all sizes
and industries across the nation who sponsor and/or support
retirement saving plans and are dedicated to expanding on the
success of employer-sponsored plans. The ARA and its
underlying affiliate organizations are diverse but united in
their common dedication to the success of America's private
retirement system.
The Securing a Strong Retirement Act of 2022 (SSRA) builds
upon the success of the Setting Every Community Up for
Retirement Enhancement (SECURE) Act to make it even easier
for small businesses to adopt and maintain a workplace-based
retirement savings plan. The SSRA further increases the small
employer pension plan start-up credit to cover 100 percent of
the cost to small employers to implement a 401(k) plan for
the first three years. The SSRA creates an additional new
credit to encourage small employers to make direct
contributions to their 401(k) plan for their employees,
offsetting up to $1,000 of these employer contributions for
each participating employee.
The SSRA contains several policy items championed by the
American Retirement Association. The first item gives
employers more time to adopt beneficial discretionary
retirement plan amendments up until the due date of the
employer's tax return. This new deadline to adopt a
beneficial discretionary amendment is consistent with the
deadline to adopt a new retirement plan that was provided for
in the SECURE Act. This provision gives employers with
existing retirement plans the flexibility to make their
401(k) plans more generous to rank and files workers after
the end of the year. The second item corrects and modernizes
the outdated and unfair family attribution rules to ensure
women business owners are not penalized if they happen to
have minor children or live in a community property state. A
third item would broaden the scope of the SECURE Act's pooled
employer plan or open multiple employer plan provisions to
allow unrelated public education and other non-profit
employers to join a single 403(b) plan.
The SSRA also creates a retirement plan matching program to
encourage employees to pay off student loans. The latest
version of this program addresses a problem that ARA
identified about the impact this new retirement plan design
feature could have with the special test that applies to
401(k) plans called the average deferral percentage (ADP)
test. Since that problem has been fixed in this bill, small
businesses will now not have to worry that this benefit puts
their retirement plan testing at risk.
While the SSRA has many good provisions, it is not perfect.
The ARA remains concerned about the provision in the bill
(Section 314) that would require at least one participant
benefit statement be mailed in a paper format given the
impact on the environment as well as plan and participant
costs. ARA supports the provision that would direct the
Department of Labor, Treasury, and the Pension Benefit
Guaranty Corporation to issue a report recommending ways to
consolidate, simplify, standardize, and improve the various
retirement plan disclosure requirements. The ARA will
continue to work with Congress on ways to ensure retirement
plan participants are effectively accessing the required
disclosures.
But on balance the Securing a Strong Retirement Act of 2022
builds upon the success of the workplace-based retirement
system and is yet another example of the extensive history of
bipartisan legislating in this critical policy area. The ARA
thanks Chairman Neal, Ranking Member Brady, Chairman Scott,
and Ranking Member Foxx for your hard work and results to
improve and enhance the retirement savings of the American
workforce and would urge Congress to enact this bill into
law.
Sincerely,
Brian H. Graff, Esq. APM,
Executive Director/CEO,
American Retirement Association.
____
Investment Company Institute,
Washington, DC, March 28, 2022.
Re. Securing a Strong Retirement Act of 2022.
Hon. Richard Neal,
Chairman, Committee on Ways and Means,
House of Representatives, Washington, DC.
Hon. Kevin Brady,
Ranking Member, Committee on Ways and Means,
House of Representatives, Washington, DC.
Hon. Bobby Scott,
Chairman, Committee on Education and Labor,
House of Representatives, Washington, DC.
Hon. Virginia Foxx,
Ranking Member, Committee on Education and Labor
House of Representatives, Washington, DC.
Dear Chairmen Neal and Scott and Ranking Members Brady and
Foxx: On behalf of the Investment Company Institute (ICI), I
commend your leadership on the bipartisan Securing a Strong
Retirement Act of 2022 or SECURE Act 2.0, which would expand
access to retirement savings plans and improve Americans'
ability to save.
The ICI urges the House of Representatives to pass this
landmark bipartisan bill as soon as possible and work with
the Senate on a unified package of retirement-savings
reforms.
The ICI notes that the bill would:
Allow savers to keep their retirement savings invested
longer by increasing the age for required minimum
distributions from retirement accounts to 75 from 72;
Ensure that workers get the same ``bang for their buck''
for their retirement saving efforts over time by indexing
individual retirement account (IRA) catch-up contribution
limits to inflation;
Broaden the ability of employers of various sizes, across
different industries to band together in a new type of
multiple-employer
[[Page H3944]]
retirement plan--called a ``pooled employer plan'' or
``PEP''--created by the original SECURE Act;
Streamline and clarify information retirement savers
receive concerning increasingly popular target date funds by
allowing use of a single benchmark for the funds that more
appropriately tracks its asset allocation;
Allow employer matching contributions based on student loan
payments; and
Simplify and clarify more than a dozen retirement plan
rules.
We hope that the legislation can be further improved by
allowing 403(b) plans to invest in collective investment
trusts.
We wholeheartedly support these provisions and believe your
legislation is vitally important to the country and the
financial well-being of millions of Americans. SECURE Act 2.0
would strengthen our nation's retirement-savings system by
expanding coverage, further increasing savings opportunities,
and streamlining administrative rules. We look forward to
seeing its enactment into law.
Sincerely,
Eric J. Pan,
President & CEO,
Investment Company Institute.
Mr. BRADY. Madam Speaker, I reserve the balance of my time.
Mr. NEAL. Madam Speaker, we are waiting on one more speaker. If Mr.
Brady has anybody else he wants to thank, that would be great.
I reserve the balance of my time.
Mr. BRADY. Actually, never make that offer to a sitting Member of
Congress.
Madam Speaker, I yield myself such time as I may consume.
This has been awfully good work on behalf of the bipartisan Members
of Congress on an issue they believe in. But Chairman Neal and I are
both blessed to have incredibly hardworking personnel, a professional
team.
Madam Speaker, I thank Payson Peabody and Derek Theurer, from our tax
subcommittee team, for the work that they put in, along with Chairman
Neal's folks, to develop this legislation, fine-tune the legislation,
make adjustments as it comes to the floor, and, again, put it in the
format and with the right designs that we think will do great things
for the American people and American workers.
Madam Speaker, I reserve the balance of my time.
Mr. NEAL. Madam Speaker, I include in the Record a letter that has
been signed by 50 different charities in support of this legislation.
March 27, 2022.
Hon. Richard Neal,
Chair, Ways and Means Committee,
House of Representatives.
Hon. Bobby Scott,
Chair, Education & Labor Committee,
House of Representatives.
Hon. Kevin Brady,
Ranking Member, Ways and Means Committee,
House of Representatives.
Hon. Virginia Foxx,
Ranking Member, Education & Labor Committee,
House of Representatives.
Dear Chairmen Neal and Scott and Ranking Members Brady and
Foxx: On behalf of the undersigned nonprofits, including
charities and faith-based organizations, we want to express
our strong support for the inclusion of the Legacy IRA Act in
the bipartisan Securing a Strong Retirement Act (H.R. 2954,
section 310). The Legacy IRA Act was originally introduced as
H.R. 2909 by Representatives Don Beyer (D-VA-08) and Mike
Kelly (R-PA-16).
We appreciate you placing a priority on families in America
who are saving for retirement and simplifying the retirement
system through the broader Securing a Strong Retirement Act.
Specifically, the Legacy IRA provision will encourage more
charitable giving by enabling seniors to make tax-free
contributions from their traditional IRAs to charities
through life-income plans. It is an important piece of
broader efforts to increase charitable giving to enable
nonprofits to continue to provide critical services in local
communities such as health research and patient education,
food assistance, domestic violence services, childcare, youth
homeless shelters, and cultural and arts programming.
Many of our organizations are dependent on private
philanthropy, including gift planning. We believe the Legacy
IRA provision simply offers seniors another philanthropic
option and would incentivize more giving to help charities
while helping middle-income seniors who need a lifetime
income.
We strongly support the inclusion of the Legacy IRA Act in
the Securing a Strong Retirement Act and urge the House of
Representatives to approve this measure. America is stronger
when everyone has the opportunity to give, to get involved,
and to strengthen their communities.
Sincerely,
ALS Association, Alternate ROOTS, Alzheimer's Association,
American Alliance of Museums, American Cancer Society Cancer
Action Network, American Council on Gift Annuities, American
Heart Association, American Lung Association, American Red
Cross, Americans for the Arts, Arab Community Center for
Economic and Social Services (ACCESS), Association of Art
Museum Directors, Association of Fundraising Professionals,
Big Brothers Big Sisters of America, Boys & Girls Clubs of
America, Catalyst of San Diego & Imperial Counties, Council
for Advancement and Support of Education, Council for
Christian Colleges & Universities, Council on Foundations,
Covenant House International, DANCE/USA, Florida
Philanthropic Network, Girl Scouts of the USA, Girls Inc.,
Goodwill Industries International, Inc., Grantmakers in the
Arts, Habitat for Humanity International, Hemophilia
Federation of America.
Independent Sector, JDRF, Jewish Federations of North
America, Leadership 18, League of American Orchestras,
Lutheran Services in America, March of Dimes, Mental Health
America, Momentum Nonprofit Partners, National Alliance on
Mental Illness, National Association of Charitable Gift
Planners, National Community Action Partnership, National MS
Society, New York Funders Alliance, OPERA America, Performing
Arts Alliance, Philanthropy Ohio, Philanthropy Southeast,
Providence, Social Current, The Nonprofit Alliance, The
Salvation Army USA, Theatre Communications Group, UNICEF USA,
United Philanthropy Forum, Volunteers of America, Wabash
College, YMCA of the USA, YWCA USA.
Mr. NEAL. Madam Speaker, I also include in the Record a letter from
the AARP supporting this legislation.
AARP,
March 28, 2022.
Hon. Richard Neal,
Chair, Committee on Ways and Means, Washington, DC.
Hon. Robert Scott,
Chair, House Committee on Education and Labor, Washington,
DC.
Hon. Kevin Brady,
Ranking Member, Committee on Ways and Means, Washington, DC.
Hon. Virginia Foxx,
Ranking Member, House Committee on Education and Labor,
Washington, DC.
Dear Chairs Neal and Scott, Ranking Members Brady and Foxx:
On behalf of our 38 million members and all older Americans
nationwide, AARP appreciates your leadership to improve
retirement savings opportunities via the Securing a Strong
Retirement Act of 2022. While Social Security continues to be
the bedrock of retirement income for most American workers
and their families, individuals want and need additional
retirement income sources. Your bipartisan legislation would
make several significant enhancements to current law.
AARP strongly supports the provision in this bill that
would provide an annual paper statement of benefits to ensure
families know where they stand when saving for retirement. As
the U.S. increasingly relies on individual account-based
retirement savings, workers and their families must timely
understand, monitor, and manage their lifetime savings. Full
and meaningful disclosure is critical to individual planning
and pension law generally. As such, to be effective, Congress
needs to ensure all workers and plan participants will
receive and can review important retirement plan documents in
the form that most workers and families want. No document is
more fundamental than an individual's annual benefit
statement. AARP also supports the optional delivery--and
retention--of important information electronically.
The Securing a Strong Retirement Act also takes important
steps towards improving worker access to retirement plans.
Under this bill, more people who work part-time will be able
to enroll in their employers' retirement savings plans by
allowing them to save after only two (rather than three)
years of employment. More than 27 million employees across
the country work less than full-time. This provision will be
especially helpful to the many older workers who can only
find part-time work or need to work part-time due to
caregiving responsibilities. In addition, employers with more
than ten employees would be required to automatically enroll
workers in new retirement savings plans under this bill. This
provision will help many employees benefit from automatic
savings tools.
For workers who are struggling to save for retirement, the
bill expands the current SAVERS tax credit to provide an
enhanced matching contribution to millions of additional low-
and moderate-income families. The matching contribution is
both an incentive for individuals to save for retirement
while also providing additional retirement funds.
Additionally, the creation of a national retirement Lost
and Found database will help workers locate retirement
accounts they may have had with previous employers. This is
increasingly important as more and more workers change jobs
several times over the course of their careers. The
legislation also establishes limitations and safeguards for
retirees who may have mistakenly received plan overpayments,
including allowing a retirement plan to forego recouping the
overpayment. Finally, we urge the retention of
[[Page H3945]]
the pretax option for catch-up contributions to help the 50+
save for retirement.
We look forward to continuing to work with you to help
every American adequately save for retirement in order to be
independent as they age.
Sincerely,
Bill Sweeney,
Senior Vice President,
Government Affairs.
Mr. NEAL. Madam Speaker, I reserve the balance of my time.
Mr. BRADY. Madam Speaker, I yield myself such time as I may consume.
I think one of the things I am most proud of in this legislation
began almost 2 years ago. After the passage of the SECURE Act, Chairman
Neal and I sat down on the floor talking about what more we could do to
help people save for retirement.
What we both talked about is what everyone knows exists, the savings
gap, and what little is being done to address it. This is the gap of
how many Americans will spend their lifetime and save virtually
nothing. When it is time to retire, their retirement isn't in their
hands. It is all owed to government or other help.
We decided we would do the hard work to try to engage millions of
Americans. We know who they are. They don't make lots of money. It is
low income or moderate income. They usually work for a very small
business. They are the toughest to be able to begin getting into that
savings environment.
We designed this bill to really focus on those who have not saved in
the past and, unless we do something differently, were not going to be
saving for the future.
That is why so much of this bill is designed around them. That is why
we help small businesses set up plans.
Here is what we know, Madam Speaker. To have a secure retirement, we
need to make sure a business offers a plan.
Secondly, we need to make sure that worker is part of that plan.
Thirdly, we need to have those contributions matched.
Fourthly, you need to save more over time as your income increases.
This bill really takes significant steps to make sure small
businesses are offering those plans and get help matching those first
thousand dollars.
We use the saver's credit, which is pretty unused these days, and
muscle it up, make it more available to help those with low income
provide those first dollars.
Then, we make the changes so it is easier for small businesses to
either start their own plan or pool with others, as we did in the
SECURE Act, all of which we think are the elements to close that
saver's gap and give Americans who really had no chance to save an
opportunity to do that.
That is what, in my view, is the importance of this legislation, why
I am proud of the work.
Chairman Neal and the Republican and Democrat members of our
committee worked together beautifully on this bill. I think this is an
important one that I urge the Senate to take up and pass as well.
Madam Speaker, I yield the balance of my time to the gentleman from
Georgia (Mr. Allen), and I ask unanimous consent that he may control
the remainder of the time.
The SPEAKER pro tempore. Is there objection to the request of the
gentleman from Texas?
There was no objection.
Mr. NEAL. Madam Speaker, I yield myself such time as I may consume.
Oftentimes in this Chamber, you will hear the phrase
``transformative.'' Sometimes it is hyperbolic, but on this occasion,
this is transformative legislation.
We have fundamentally changed the opportunities for retirement for
the American family, for millions and millions of people. I want to
acknowledge the work of the ranking member on this, Mr. Brady, because
his input has been invaluable in helping to get to this moment.
We are proud of this work. We are helping Americans prepare for a
secure retirement. The catch-up provisions alone are startling in this
legislation.
Remember, there are a lot of people in America who are trying to
simultaneously educate their children and save for retirement. It is a
real challenge.
The catch-up provisions here mean that if people wish to work longer
or begin to set aside more prescribed dollars for retirement because
they couldn't do it during certain years of paying college expenses, we
provide that opportunity.
This has been meaningful for Members on both sides. I have heard
Members on the Republican side point out their contributions to it, and
they are entirely correct.
We, on our side, have also included Mr. Davis' legislation that
ensures workers with student loans don't miss out on 401(k) matching
contributions. Representative Murphy's legislation to increase the
required minimum distribution age to 75 is here as well.
We created a higher catch-up contribution amount for those years just
before retirement, a provision particularly important for pilots who
have a mandatory retirement age. That was a priority of Representatives
Sanchez and Pascrell.
Mr. Kind's bills have been included. His legislation fixing a problem
with startup credits and multiple employer plans is here as well.
SECURE 2.0 contains Representative Chu's legislation that would
enhance the saver's credit, which was also a priority for
Representative Sewell.
We have included Representative Panetta's legislation that provides
403(b) custodial accounts that are permitted to invest in collective
investment trusts, as well as his legislation reforming family
attribution rules.
We have included Representative Sewell's legislation to reduce by 1
year the period of service requirement for long-term part-time workers
to participate in 401(k) plans. This provision is particularly
important for women who tend to work part-time more frequently than
men.
Mr. Suozzi contributed legislation that would direct Treasury to
issue regulations addressing a glitch with respect to insurance-
dedicated exchange-traded funds.
Mr. Beyer's legislation is included. That was important to the
charitable community and would, among other things, index the inflation
rate for annual IRA charitable distribution limits.
The bill includes Representative Moore's legislation that would
provide penalty-free withdrawals from retirement plans for individuals
in case of domestic abuse.
We have included Representative Evans' legislation directing the
Labor Department to update its disclosure rules to allow better
comparisons amongst investments to aid participant decisionmaking.
Finally, we have included Representative Pascrell's legislation that
would allow first responders to exclude service-connected disability
pension plans and payments from their gross income after they reach
retirement age. That also touches upon Representative Higgins' ESOP
Fairness Act.
{time} 1645
Mr. Brady noted earlier, and let me reinforce, the exceptional work
of the Ways and Means Committee staff on this occasion. As I have said
many times before, we are blessed with amongst the brightest, smartest,
and hardest working staff members in Congress. Let me thank MaiLan
Rodgers for her work and Kara Getz, who has been integral to the
development of not only this legislation but also the SECURE Act and
the Butch Lewis Act, both of which became law.
The SECURE Act was one of the most significant retirement
opportunities, and this legislation will become law, I hope, in the
near future. Let's not wait another decade to enact the important
provisions of this legislation. This bill goes a long way in addressing
this country's retirement crisis.
I want to point out something I said earlier. Half the people who get
up and go to work every day in America are not in a qualified
retirement plan. We need to continue to address that issue.
This is important legislation. I know it will pass. I think the last
time this legislation came to the floor, all but four Members of this
Chamber voted for this legislation.
I thank Mr. Brady, again, for his good work and the good work of his
staff.
Madam Speaker, I yield the balance of my time to the gentleman from
Virginia (Mr. Scott), and I ask unanimous consent that he be permitted
to control the remainder of the time.
[[Page H3946]]
The SPEAKER pro tempore. Is there objection to the request of the
gentleman from Massachusetts?
There was no objection.
Mr. SCOTT of Virginia. Madam Speaker, I yield myself such time as I
may consume.
Madam Speaker, I rise in support of H.R. 2954, the Securing a Strong
Retirement Act of 2022, which incorporates the bipartisan Retirement
Improvement and Savings Enhancement Act, or RISE Act, that the
Committee on Education and Labor approved by voice vote last fall.
I thank the gentleman from Massachusetts (Mr. Neal) for his hard work
in incorporating this legislation into SECURE 2.0. Our committee was
able to reach a bipartisan agreement on the RISE Act, thanks in large
part to the leadership of the chairman and ranking member of our
Subcommittee on Health, Employment, Labor, and Pensions, the gentleman
from California (Mr. DeSaulnier) and the gentleman from Georgia (Mr.
Allen). I want to recognize them and thank them for their important
contributions to this bill.
American workers deserve a decent wage and the ability to retire with
dignity and security. Unfortunately, far too many Americans are working
later in their lives and still relying on the next paycheck to cover
monthly expenses. This legislation makes meaningful improvements to our
retirement system, helping Americans prepare for and achieve the secure
retirement that they deserve.
I am particularly pleased that this bill incorporates several key
priorities authorized by Committee on Education and Labor members.
For example, it includes legislation sponsored by the gentlewoman
from Oregon (Ms. Bonamici), the chair of the Subcommittee on Civil
Rights and Human Services, which creates an online retirement lost-and-
found database at the Department of Labor to help workers locate their
hard-earned retirement savings as they move from job to job. According
to the Government Accountability Office, more than 25 million people
who changed jobs between 2004 and 2014 left behind one or more
retirement accounts. Establishing this kind of database at the
Department of Labor is necessary and long overdue.
The bill includes legislation sponsored by the gentlewoman from North
Carolina (Ms. Manning) that reduces barriers preventing part-time
workers from participating in their employer's retirement savings
plans. This simple change will benefit many part-time workers,
particularly women.
It also includes legislation sponsored by the gentleman from Indiana
(Mr. Mrvan) requiring the Department of Labor to review and update
guidance from the mid-1990s regarding pension risk transfers.
Importantly, Madam Speaker, this bill offers an opportunity to send a
message to workers and retirees across the country that their
retirement security is a critical priority for every Member of this
House.
Madam Speaker, I urge my colleagues to support the bill, and I
reserve the balance of my time.
Mr. ALLEN. Madam Speaker, I yield myself such time as I may consume.
Madam Speaker, I rise today in support of H.R. 2954, which includes
the text of the Education and Labor Committee's bipartisan Retirement
Improvement and Savings Enhancement Act, the RISE Act, H.R. 5891, a
bill that I was proud to cosponsor with the distinguished chairman of
the Education and Labor Committee and Ranking Member Foxx.
This bipartisan legislation is a much-needed push toward
modernization that our country's retirement system needs. Our economy
has evolved and so have the ways Americans plan for retirement.
Neither employers nor employee benefit plans fit into the same
cookie-cutter policies they did when the Employee Retirement Income
Security Act of 1974 was first enacted. The RISE Act and H.R. 2954
include reforms that will benefit America's workforce and job creators.
Worker access to employer-sponsored retirement plans has improved
over the last three decades, and participation has grown. Today, more
workers are saving and saving more in employer-sponsored plans.
However, there remains room for improvement, as too many Americans
still lack access to these benefits. This legislation is a major step
toward providing reasonable solutions to solve the problems hindering
Americans from being able to save for a secure future.
Building on the SECURE Act of 2019, the RISE Act and H.R. 2954 expand
multiple and pooled employer plans, giving charities, educational
institutions, and nonprofit organizations the opportunity to offer
affordable retirement plans. Expanding pooled employer plans give small
businesses access to more affordable plans by allowing them to band
together, decreasing the costs and burdens associated with sponsoring a
plan and providing more Americans with an opportunity to save.
Allowing small businesses and nonprofits the opportunity to offer
competitive retirement plans so they can attract workers is extremely
important, as the labor shortage has hit them the hardest.
Additionally, the RISE Act and H.R. 2954 will allow employers to
offer small financial incentives to employees for participating in a
retirement plan. This will help encourage employees to start preparing
for retirement earlier in their careers, which is vital for employee
contributions to earn years of compounding benefits for their
retirement accounts.
Finally, this bill expands access to retirement savings for part-time
workers who otherwise would be limited from participating in the
employer plan. Removing barriers to saving ensures more Americans have
a secure and self-sufficient retirement. Red tape and unnecessary
barriers must not keep employees from building a strong retirement.
The RISE Act and H.R. 2954 also ease the burden of administering
retirement accounts by removing unnecessary disclosure requirements.
The legislation directs the Department of Labor, Department of the
Treasury, and the Pension Benefit Guaranty Corporation to simplify
reporting and disclosure regulations, streamline the collection of
contributions to pooled employer plans, and update benchmarking
guidelines to accommodate a broader selection of plan investments.
Importantly, retirement professionals themselves are in support of
the RISE Act. Organizations like the American Benefits Council, the
Insured Retirement Institute, the American Retirement Association, and
the SPARK Institute are supportive of this legislation.
Workers and plan sponsors alike can see that the RISE Act will make
commonsense reforms and improve the lives and futures of the American
worker. The RISE Act offers creative and practical solutions to the
problems in our retirement system.
As legislators, we must take action to tackle issues that affect the
daily lives of our constituents. As a businessman, I know firsthand the
issues that are affecting American workers that can be improved upon.
This legislation will improve the retirement security for millions of
Americans. I urge my colleagues to join in support, and I look forward
to its passage in the House and for these reforms to be ultimately
signed into law.
Madam Speaker, I reserve the balance of my time.
Mr. SCOTT of Virginia. Madam Speaker, I yield 3 minutes to the
gentlewoman from North Carolina (Ms. Manning), a distinguished member
of the Committee on Education and Labor.
Ms. MANNING. Madam Speaker, I thank Chairman Scott for yielding me
this time.
Madam Speaker, I rise in strong support of the Securing a Strong
Retirement Act.
Today, too many workers face difficulty saving for retirement. Even
for those who have access to retirement plans, it can be difficult to
grow and protect hard-earned savings.
There are roughly 55 million Americans who lack access to a
retirement savings plan at work, with many lacking any retirement
savings at all. This is particularly true for women. Approximately 50
percent of women ages 55 to 66 have no personal retirement savings,
compared to 47 percent of men, and only 22 percent of women have
$100,000 or more in savings, compared to 30 percent of men.
[[Page H3947]]
Women are also more likely than men to work in part-time jobs that
don't qualify for a retirement plan and are more likely than men to
quit work, transfer jobs, or interrupt their careers to care for family
members, resulting in lower retirement savings.
This is why I am proud to have my bill, the Improving Part-Time
Workers Access to Retirement Act, included in this important
legislation. This provision will make it easier for long-term part-time
workers to access retirement by shortening the amount of time they are
required to work for their employer in order to participate in their
401(k) plan. This will have an important impact on the ability of women
and low-wage workers to be able to save for retirement.
As a member of the House Education and Labor Committee and a strong
supporter of college affordability, I am also pleased that this
legislation will allow borrowers the option to pay down their student
loans while still receiving an employer match in their retirement plan.
This commonsense approach to retirement savings will help the nearly 46
million Americans facing student loan debt become more financially
stable while overcoming the barriers too many in our country face upon
graduating, like advancing in their career, buying a home, or starting
a family.
SECURE 2.0 will help workers save more longer, improve flexibility
and protections for Americans' retirement accounts, and eliminate some
of the barriers small businesses face in providing comprehensive
retirement options to their employees.
These are bipartisan, commonsense provisions that will better serve
workers and employers across our country. I strongly urge my colleagues
to vote in favor of this critical legislation.
Mr. ALLEN. Madam Speaker, I yield 2 minutes to the gentleman from
Michigan (Mr. Walberg), my good friend.
Mr. WALBERG. Madam Speaker, I rise in support of the Securing a
Strong Retirement Act.
As an entire generation moves closer to retirement, we must ensure
our laws are up to date to help Americans achieve their retirement
goals.
Last Congress, we passed the SECURE Act, which made significant
improvements to our Nation's retirement policies. Today, we are
building upon that success to ensure Americans can live their golden
years with dignity.
I would like to highlight one provision of this bill, which
incorporates a bipartisan policy I have long championed with my
colleague, Representative Sablan. Our provision will reduce the
administrative costs for employers sponsoring retirement plans for
their employees.
Businesses often cite limited financial resources as a key reason for
not offering retirement benefits. The Retirement Plan Modernization Act
would ease the administrative burdens on employers, especially small
businesses, enabling more small businesses to offer retirement benefits
and ensure employees are not needlessly paying higher fees.
I thank both the Committee on Education and Labor and the Committee
on Ways and Means for including text from our bill in H.R. 2954.
Madam Speaker, the Securing a Strong Retirement Act will enhance
opportunities for Americans to save for retirement. I urge all Members
to support it.
{time} 1700
Mr. SCOTT of Virginia. Madam Speaker, I yield 3 minutes to the
gentleman from Indiana (Mr. Mrvan), a distinguished member of the
Committee on Education and Labor.
Mr. MRVAN. Madam Speaker, I thank Chairman Scott for allowing me the
time.
I rise today in support of H.R. 2954, the Securing a Strong
Retirement Act. I am grateful for the bipartisan collaboration to
produce this legislation that makes commonsense improvements to our
Nation's retirement system.
There are far too many challenges today that prevent workers from
having access to secure retirement benefits and information to protect
their hard-earned savings.
I also appreciate the inclusion of the provisions of my legislation,
the Pension Risk Transfer Accountability Act, which requires the
Department of Labor to review existing rules on pension risk transfers.
A promise made should be a promise kept for all workers and retirees.
I encourage all my colleagues to support this legislation to further
ensure that workers can retire with dignity, security, and peace of
mind.
Mr. ALLEN. Madam Speaker, I yield 2 minutes to the gentleman from
Pennsylvania (Mr. Keller), another good friend.
Mr. KELLER. Madam Speaker, I thank the gentleman from Georgia. I rise
in support of the Securing a Strong Retirement Act. As part of the
Education and Labor Committee, our goal is to provide employers and
employees with opportunities to access a safe, effective, and
productive workplace.
We also work on policy that encourages people to save for retirement
and provides opportunities for their families. This bill accomplishes
both by improving employer-sponsored benefits to help workers make good
decisions that will serve them well in the future.
The bill increases access to retirement accounts, lowers the cost of
administering programs for small businesses, and provides incentives
for workers to voluntarily put money towards savings.
It also requires the Department of Labor to review existing reporting
and disclosure requirements, making them easier to comply with and
understand, updates the dollar threshold for automatic distributions by
plans to participants which was last updated in 1997.
It streamlines the collection of contributions to pooled employer
plans and updates benchmarking guidelines to accommodate different
investment products. The bill also adds tax incentives for small
businesses that offer employee stock ownership plans, a great tool and
benefit for employees to have a stake with their employer.
The Employee Retirement Income Security Act of 1974 set a foundation
for today's policies, but the measure needs to be updated to reflect
the 21st century workforce.
I urge my colleagues to support this important measure and look
forward to this legislation becoming law.
Mr. SCOTT of Virginia. Madam Speaker, I yield 3 minutes to the
gentleman from Oregon (Mr. Blumenauer), a distinguished member of the
Committee on Ways and Means and chair of its Subcommittee on Trade.
Mr. BLUMENAUER. Madam Speaker, I appreciate the chairman's courtesy
for permitting me to speak on this issue and his leadership on an issue
that concerns us all.
We are facing a retirement crisis in this country. Too many people do
not have adequate resources. The aging population is exploding, and we
have seen financial uncertainty in the midst of the COVID crisis, in
particular.
I am pleased that we are able to come together as a Congress on a
bipartisan basis to advance this legislation.
Recently, we watched people come together dealing with trade
relations with Russia, ratcheting up sanctions on a bipartisan basis,
and this is another strong signal, I think.
I also appreciate Chairman Neal for his leadership in spearheading
the SECURE 2.0 which takes the Oregon auto-enrollment model to the
Federal level and provides new incentives to promote and expand
employee stock ownership plans, ESOPs.
I have long supported ESOPs as a successful model that provides a
company's workers with retirement savings through their investment in
their employee stock. I have been stunned at the stories I have heard
about people who have what one would think are unexceptional jobs who,
through this mechanism, have been able to retire with significant
savings as a result.
Now, by giving employees skin in the game, the ESOP structure
produces employees that are more likely to set aside money for
retirement. They can retire earlier and worry less about retirement
income.
The companies that use this mechanism are fundamentally different. We
have seen in times of economic strife, employee ESOP-owned companies
are more generous with their employees. They are slower to lay people
off, they bring them back, and, in fact, they are more profitable.
It is an encouraging mechanism that I think epitomizes the best of
the American ingenuity and the creation of wealth.
[[Page H3948]]
This is a structure that works and one that is being expanded by this
legislation. By allowing for a deferral of gain on a small amount of
the proceeds of sales of employer stock to an ESOP, there will be even
more companies incented to sell stock to ESOPs, promoting and expanding
this innovative model.
I am honored to support this legislation. I hope that we will be able
to promote greater awareness and understanding of this powerful model.
This is an important step forward.
Mr. ALLEN. Madam Speaker, I yield 5 minutes to the gentlewoman from
North Carolina (Ms. Foxx), our great Republican leader.
Ms. FOXX. Madam Speaker, I thank my colleague from Georgia for
yielding me time.
H.R. 2954 includes the text of the RISE Act, a bill that I am proud
to lead with Chairman Scott of the Education and Labor Committee.
This bill was born out of true bipartisan collaboration, and I am
pleased at the progress we have made with our colleagues across the
aisle.
Hardworking Americans deserve the opportunity to save for a secure
future, yet too many workers aren't putting anything towards their
retirement nest egg.
By removing the red tape tying up job creators and providing
incentives for workers to save more, this legislation will strengthen
and modernize America's retirement system, so our Nation's workers,
retirees, and employers are better served.
It truly is a much-needed step in the right direction. Practical
solutions like the RISE Act and H.R. 2954 are a win for job creators,
workers, and our Nation's economic future.
I urge my colleagues to vote ``yes''.
Madam Speaker, I would like to inquire if the distinguished chairman
of the Education and Labor Committee would be willing to engage in a
colloquy with me about the matter of furnishing paper ERISA disclosures
to participants and beneficiaries.
I yield to the chairman.
Mr. SCOTT of Virginia. I would be happy to enter into a colloquy with
my colleague.
Ms. FOXX. I thank the chairman.
Madam Speaker, the underlying bill includes an imperfect provision
requiring retirement plans to provide a paper statement annually.
The bill also directs the Department of Labor to revise its 2002 and
2020 safe harbor regulations to conform with this requirement.
While I support the bill, I have serious concerns about this blunt
provision which would undermine DOL's 2002 and 2020 e-delivery safe
harbor regulations. Participants in plans have been relying on the 2002
safe harbor regulations for nearly 20 years.
The Committee on Education and Labor has dedicated considerable time
to this issue. I do not consider this a settled matter, and I will
continue to engage with my House and Senate colleagues to find a
workable solution that simplifies and modernizes the disclosure
requirements for retirement plans.
Mr. SCOTT of Virginia. Will the gentlewoman yield?
Ms. FOXX. I yield to the gentleman from Virginia.
Mr. SCOTT of Virginia. Madam Speaker, I thank the ranking member for
yielding to me and for her comments.
It is my understanding that our staffs will continue their efforts,
along with their Senate counterparts, to try to find a path forward on
this issue that balances the interests of plan sponsors and the
retirement plan participants.
Ms. FOXX. Madam Speaker, reclaiming my time, I thank the chairman for
his willingness to continue working on this issue together.
Again, I urge a ``yes'' vote on the bill.
Mr. SCOTT of Virginia. Madam Speaker, I yield 3 minutes to the
gentlewoman from Oregon (Ms. Bonamici), the chair of the Subcommittee
on Civil Rights of the Education and Labor Committee.
Ms. BONAMICI. Madam Speaker, I thank Chairman Scott for yielding, and
I thank him for his leadership on this and so many important issues in
the Education and Labor Committee.
I rise in strong support of the Securing a Strong Retirement Act of
2022 or SECURE 2.0, which makes important and bipartisan improvements
that will improve enrollment in and access to retirement savings plans.
As employers have shifted from pension plans to retirement plans such
as 401(k)'s, workers have increasingly become responsible for tracking,
managing, and consolidating their retirement accounts when they change
jobs.
There is no standard way for workers to consolidate their accounts,
and many workers actually lose track of their hard-earned investments.
According to a Government Accountability Office report, about 25
million people changed jobs between 2004 and 2014 and left one or more
retirement accounts behind. This problem is only expected to grow as
young workers transition between jobs at greater rates than previous
generations.
The SECURE Act 2.0 includes provisions from my Retirement Savings
Lost and Found Act which will help address the challenge of tracking
retirement savings. My bill creates a national lost-and-found registry
for retirement accounts housed at the Department of Labor.
The lost-and-found registry will provide workers with a centralized
way to track their retirement accounts, and it will also help workers
claim their hard-earned retirement funds regardless of how often they
transition from job to job.
I strongly support the commonsense improvements in the SECURE Act
2.0, including the creation of a retirement savings lost-and-found
registry which will help working families retire with dignity.
I urge all of my colleagues to vote in favor of passage of this
important legislation.
Mr. ALLEN. Madam Speaker, I yield myself the balance of my time.
Madam Speaker, the goal of every American is to retire with security
and dignity. The RISE Act and H.R. 2954 will help workers do just that.
This bill will expand the availability of private retirement programs
to more Americans.
Neither small businesses, nor non-profits and educational
institutions should be prohibited from accessing the benefits offered
to larger retirement plans.
Building on the success of the SECURE Act of 2019, this legislation
cuts red tape, streamlines reporting and disclosure requirements, and
provides American workers retirement.
I thank the chairman and our Republican leader for their commitment
to bipartisanship and for defending the committee's important
jurisdiction over retirement issues in this bill.
I urge my colleagues to vote in favor of H.R. 2954, and I yield back
the balance of my time.
Mr. SCOTT of Virginia. Madam Speaker, I yield myself the balance of
the time.
Madam Speaker, as my colleagues have said, the bill makes meaningful
and sensible improvements to America's retirement system. It will help
workers, retirees, and employers.
I again congratulate my Education and Labor Committee colleagues who
have authored provisions in this bill, and I want to recognize and
thank the ranking member of the Committee on Education and Labor, Dr.
Foxx, and her staff for their partnership and work on this important
bill with my staff which includes Kevin McDermott, Richard Miller,
Daniel Foster, and Eli Hovland who have worked hard on this bill from
start to finish.
Madam Speaker, I urge all Members to support the bill, and I yield
back the balance of my time.
Mr. DANNY K. DAVIS of Illinois. Madam Speaker, I strongly support the
Securing a Strong Retirement Act because it will strengthen the
retirement coverage and savings of millions of Americans. I applaud the
many provisions included to expand retirement coverage and savings,
such as automatic enrollment in the retirement plans, modernizing the
Saver's Credit, creating new incentives to small businesses to offer
retirement plans, and increasing charitable donations permitted through
an IRA.
I thank Chairman Neal for including my bill, the Retirement Parity
for Student Loans Act, that promotes increased retirement savings
through an employer match for employees making student loan payments.
By allowing employers to contribute an employer-match into a retirement
plan based on an employee's student loan payment, younger workers who
currently cannot afford to save for their retirement will begin saving
much sooner.
[[Page H3949]]
Although over three-quarters of Americans have access to an
employment-based retirement savings account, few Americans can make the
maximum contribution of $19,500 to their retirement savings. Any
contribution to retirement savings is particularly limited for
millennials struggling with heavy student loan debt. The average
student loan balance for 2019 graduates was $32,731, and only 30
percent of young workers use 401(k) programs to save for retirement.
This policy is an important tool for employers to retain their
workforce and for workers to improve retirement savings and lower
educational debt.
I urge passage of this bill that does so much to expand retirement
coverage and savings to improve workers' long-term financial well-
being.
Mr. DeSAULNIER. Madam Speaker, Americans are living longer than ever
before--about 30 years longer, on average, than a century ago. To quote
the founder of the Stanford Center on Longevity, ``longevity is . . .
among the greatest opportunities we have had in human history.''
Those extra years mean more time spent with family and friends and
enjoying retirement.
Unfortunately, while life expectancy increases, Americans are falling
behind on retirement savings.
More than 4 in 10 American adults have less than $25,000 saved for
retirement.
And the coronavirus pandemic has made it worse. According to a recent
study, 1 in 5 Americans said they are saving less for retirement due to
the pandemic's impact on their finances.
We need to act now to correct course to improve retirement savings.
The Securing a Strong Retirement Act is a comprehensive, bipartisan
bill that eliminates many of the hurdles to workers enrolling in and
remaining in retirement savings plans.
As a former small business owner and as the current Chair of the
Health, Employment, Labor, and Pensions Subcommittee, I have seen
firsthand how reforms like the ones in this bill can help people live
happier lives into their retirement.
Importantly, this legislation incorporates the RISE Act, which I was
proud to co-author with the Chairman of the full Committee Chairman
Scott, Ranking Member Foxx, and the Ranking member of my HELP
Subcommittee Mr. Allen. Through that effort, we can:
Help part-time workers join an employers' retirement savings plan;
Incentivize workers to participate in retirement plans with small
financial incentives; and
Through the ``Retirement Lost and Found'' database at the Department
of Labor help workers locate their hard-earned retirement savings as
they move from job to job.
I am proud to have played a part in this significant and bipartisan
effort, and will proudly vote in support of this legislation.
Mr. BEYER. Madam Speaker, I rise today to speak in support of the
bipartisan Securing a Strong Retirement Act which includes the Legacy
IRA Act. This legislation, led by my colleague Mike Kelly and I, would
encourage charitable giving by American seniors. Donating to charity is
a hallmark of American society. We are fortunate to have one of the
most generous countries in the world. In spite of, or possibly because
of, the upheavals in recent years, we have seen increases in American
charitable giving to the highest levels in our history.
We must do all we can to encourage this impulse, particularly among
middle-income seniors who wish to continue giving post-retirement. The
Legacy IRA Act would enable seniors to make tax-free contributions from
their traditional IRAs to charities through life-income plans. This
bill is a win-win, for philanthropic seniors who want to continue
giving, and for charitable organizations that benefit from donations. I
would like to thank Chairman Neal for his support in including this
measure in the SECURE Act and Rep. Kelly for his partnership on this
important legislation.
Mr. SUOZZI. Madam Speaker, I rise in support of the Securing a Strong
Retirement Act of 2022. Everyone can agree that the American Dream
should be achievable for anyone willing to work hard. The American
Dream is the ability for families to one day own a home, provide an
education for their children, and retire with dignity. The SECURE Act
2.0 does several things to help make retirement security easier for
millions of hardworking Americans. I rise today not only in support of
the bill, but to advocate for the inclusion of another bipartisan bill,
the ABLE Employment Flexibility Act, as SECURE 2.0 progresses through
the legislative process.
Along with my colleague Mr. Wenstrup, I introduced another practical
solution that will allow more hardworking Americans the ability to
participate in the labor force more fully by providing them access to
benefits tailored to their needs. My bill permits employers to make
tax-exempt contributions to ABLE (Achieving Better Life Experience)
accounts in lieu of making contributions to existing tax-exempt defined
contribution retirement plans. An ABLE account is established to pay
expenses such as food, education, housing, transportation, employment
training and support, and health care expenses of a designated
beneficiary who is disabled. In other words, it will allow millions of
Americans with disabilities to receive, and their employers the ability
to provide, similar tax-preferred benefits as their fellow employees.
The ABLE Employment Flexibility Act would allow ABLE-eligible workers
to permit an employer to make contributions to a 529A account in lieu
of contributions to the employer's defined contribution plan. The
legislation is needed because, under current law, an employer that
offers employees with a disability the choice to have employer
contributions that would be made to the retirement plan instead
contributed to a 529A account would jeopardize the tax-qualified status
of the retirement plan.
Many defined contribution plans permit an eligible employee to defer
compensation into that defined contribution plan, with the employer
sponsoring the plan providing for a matching contribution on such
deferrals. The plan may also have nonelective employer contributions
that are automatically made. Unfortunately, assets in these plans could
adversely impact the availability of means-tested benefits. By
eliminating this barrier, employers will be able to provide equitable
opportunities to their employees to save for critical services while
allowing them to retain critical government support and services.
Through the leadership of Chairman Neal and Ranking Member Brady, we
are passing SECURE 2.0, a bill with overwhelming support. The bill has
support from every stakeholder, from advocates for seniors to the
retirement industry, and the practical solutions contained have
garnered bipartisan support. Both things the American people are
clamoring for in these hyper-partisan times. Like SECURE 2.0, the ABLE
Employment Flexibility Act has received support from an array of
stakeholders from disability advocates to associations representing the
retirement industry.
I want to thank the Chairman, Ranking Member, their staffs, and the
Joint Committee on Taxation for their willingness to work with myself
and Mr. Wenstrup to address technical issues with the legislative text
of the ABLE Employment Flexibility Act to achieve the underlying policy
goal--help more Americans save effectively and efficiently to live and
retire in dignity. I look forward to our continued efforts and hope
that we can resolve outstanding issues as we advance the SECURE Act 2.0
to the President for his signature.
Mr. BUCHANAN. Madam Speaker, I rise today in strong support of H.R.
2954, the Securing a Strong Retirement Act, also known as SECURE 2.0.
It is a sad reality that today too many hardworking Americans enter
retirement without enough savings.
In fact, according to a recent report, only 36 percent of working
adults feel their retirement savings are on track to meet their goals
and more than one-third of U.S. workers have never even had a
retirement account.
It's clear that millions of Americans could face a financial crisis
during their retirement years. Congress can help head off this
avoidable emergency and give individuals, families, and businesses more
tools to boost their retirement nest eggs.
Last year, the House Ways & Means Committee unanimously passed the
bipartisan Securing a Strong Retirement Act of 2021, legislation
providing new incentives to help improve the retirement financial
landscape for Americans across the country.
This bipartisan retirement savings bill seeks to build on the
momentum from legislation that passed last Congress.
Specifically, this important new legislation would double the
existing tax credit for businesses with 50 or fewer employees that
start a company retirement plan, expand-auto-enrollment, push back the
withdrawal retirement age, and allow workers to double their catch-up
contributions. This bipartisan bill also authorizes new protections for
people paying down student loan debts and incentives to America's
veterans.
SECURE 2.0 is also completely budget neutral.
Retirement doesn't have to turn into another U.S. financial crisis.
With responsible incentives and smart planning, we can give more people
the peace of mind they deserve as they grow older. I'm pleased to see
Congress put aside partisan games and finally come together to enact
SECURE 2.0 and strengthen America's retirement security.
Ms. JACKSON LEE. Madam Speaker, I rise in strong support of H.R.
2954, the Securing a Strong Retirement Act of 2021, which will make
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.
[[Page H3950]]
This legislation expands opportunities for Americans to increase
their retirement savings, improves workers' long-term financial
wellbeing, and builds on the Setting Every Community Up for Retirement
Enhancement (SECURE) Act of 2019.
The purpose of this legislation is to expand automatic enrollment,
simplify many retirement plan rules, and strengthen small businesses'
ability to offer workplace retirement plans.
Among other things, H.R. 2954 would:
Expand automatic enrollment of workers in employer-sponsored
retirement saving plans.
Employees would be automatically enrolled in plans such as 401(k)s
and 403(b)s unless they opt out.
The initial automatic enrollment amount is at least 3 percent but no
more than 10 percent. And then each year that amount is increased by 1
percent until it reaches 10 percent.
The age at which seniors must take required minimum distributions
(RMDs) from their retirement savings accounts would be raised from 72
to 73. The bill subsequently would raise the age to 74 starting in 2029
and to 75 starting in 2032.
Reduce the penalty for failure to take RMDs to 25 percent from 50
percent. If this failure is corrected in a timely manner, as defined by
the bill, the penalty would be further reduced to 10 percent.
Increase the limits on so-called catch-up contributions for employees
ages 62 to 64. In 2021, these workers were allowed to contribute up to
$6,500 to their retirement savings plans beyond the otherwise
applicable limits. This bill would increase that amount to $10,000 and
index it to inflation.
The catch-up contribution limit for individual retirement accounts
would be indexed to inflation. Currently, savers ages 50 and up may
contribute an additional $1,000 annually to their IRAs, but that limit
isn't indexed to inflation.
Allow employers to match a worker's student loan payment by making an
equivalent contribution to that worker's retirement savings plan.
This provision is intended to help workers who can't afford to save
for retirement because of high student-loan debt, which causes them to
miss out on their employers' matching contributions to retirement
savings plans.
Today's workplace is more generationally diverse than ever.
Older employees are working longer, and millennials make up roughly a
third of the American workforce. This bill helps both older and younger
workers.
For younger workers, this can help jump start the saving process
earlier by making employer matches available for those who are also
paying off student loans.
For older workers nearing retirement, they would have more time to
save, due to the increased catch-up contribution limits and delayed
required minimum distributions (RMD).
By automatically enrolling every working person in a plan, with the
option to opt out, we begin to solve the biggest reasons people don't
save for retirement.
According to the U.S. Census Bureau, the three biggest reasons people
do not save for retirement are: not having a plan at work (74 percent
of non-savers), being self-employed (14 percent) and not being included
in a workplace plan (12 percent).
These proposed changes are beneficial to Americans of all ages,
helping them reach their savings goals and provide more flexibility
upon retirement.
Though there are many paths to retirement, it's critical to be
financially prepared, especially as people are living longer.
For these reasons, I ask my colleagues to join me in voting for H.R.
2954 because we need to ensure that every American can benefit from the
best retirement plan for them.
The SPEAKER pro tempore. The question is on the motion offered by the
gentleman from Massachusetts (Mr. Neal) that the House suspend the
rules and pass the bill, H.R. 2954, as amended.
The question was taken.
The SPEAKER pro tempore. In the opinion of the Chair, two-thirds
being in the affirmative, the ayes have it.
Mr. ALLEN. Madam Speaker, on that I demand the yeas and nays.
The SPEAKER pro tempore. Pursuant to section 3(s) of House Resolution
8, the yeas and nays are ordered.
Pursuant to clause 8 of rule XX, further proceedings on this motion
are postponed.
____________________