Retirement Plan Simplification and Enhancement Act of 2013 - Amends the Internal Revenue Code (IRC) to repeal the 10% cap on the qualified percentage of an employee's compensation as the standard for an employer's contribution to an automatic cash or deferred contribution arrangement under the alternative method for meeting nondiscrimination requirements.
Prescribes criteria for an alternative method for qualified secure deferral arrangements (under a qualified profit-sharing or stock bonus plan, a rural cooperative plan, or a "pre-ERISA" money purchase plan established before enactment of the Employee Retirement Income Security Act of 1974 [ERISA]) to meet the nondiscrimination requirement that the actual deferral percentage for eligible highly compensated employees for the plan year bears a relationship, meeting specified criteria, to the actual deferral percentage for all other eligible employees for the preceding plan year.
Allows an eligible employer a secure deferral arrangement credit against the income tax of 10% of all contributions under a secure deferral arrangement made during the plan year by or on behalf of employees other than highly compensated employees.
Revises the period of service requirements for a qualified cash or deferred arrangement to cover long-term part-time employees working at least 3 consecutive 12-month periods during each of which the employee has at least 500 hours of service.
Requires separate application of the rules for a top-heavy defined benefit plan (whose the present value of the accrued benefits [PVAB] for the highly-paid key employees exceeds 60% of the PVAB for all employees) to any defined contribution plan covering part-time employees who do not meet age and service requirements.
Revises the tax credit for an applicable percentage of up to $2,000 of an individual's qualified retirement savings contributions for the taxable year. Doubles the credit if the taxpayer consents that the Secretary pay it into a designated retirement account. Limits contributions to $500, with annual increases up to $1,500 (adjusted for inflation) after 2023.
Amends title VII (Administration) of the Social Security Act to direct the Commissioner of Social Security to prepare: (1) a financial reference handbook for distribution to an individual applying for the first time for benefits under title II (Old-Age, Survivors, and Disability Insurance) (OASDI), and (2) a retirement readiness checklist for inclusion in an individual's annual Social Security account statement.
Amends the IRC to allow adoption of a qualified plan by the due date (including extensions) for filing the federal income tax return for the employer's taxable year.
Revises the dollar limitation on the tax credit for small employer pension plan startup costs for each of the first three credit years to allow the greater of $500 or the lesser of: (1) $5,000; or (2) $250 for each employee eligible to participate in the eligible employer plan who is not a highly compensated employee.
Directs the Secretaries of the Treasury and of Labor to prescribe administrative guidance establishing conditions allowing the use of a multiple employer plan.
Directs the Government Accountability Office (GAO) to study the feasibility and desirability of extending the application of spousal consent requirements to defined contribution plans to which they do not currently apply.
Amends ERISA to authorize an employee benefit plan to allow a named fiduciary, or a fiduciary designated by a named fiduciary, to appoint an annuity administrator for an individual account plan.
Directs the Secretary of the Treasury to issue final regulations stating that any specified age or service condition (or combination of such conditions) with respect to a lifetime income investment under a defined contribution plan shall be disregarded in determining whether the lifetime income investment is currently available for distribution to the employee.
Amends the IRC to allow an Individual Retirement Account (IRA) to be invested in a life insurance contract rolled over to an IRA from a qualified retirement plan if the contract provides only incidental death benefits.
Declares that a trust forming part of a defined contribution plan shall not be treated as failing to constitute a qualified trust solely by reason of allowing after a certain date as portable lifetime income options: (1) qualified distributions of a lifetime income investment, or (2) distributions of a lifetime income investment in the form of a qualified plan distribution annuity contract.
Requires the Pension Benefit Guaranty Corporation (PBGC) to establish a Lost Pension Plan Registry database to record: (1) any change in a pension plan's name, (2) any change in the name or address of the plan administrator, (3) the termination of the plan, or (4) the merger or consolidation of the plan with any other plan or its division into two or more plans. Requires publication of the Registry on the PBGC website.
Exempts from mandatory minimum plan distributions an employee whose aggregate retirement savings do not exceed $100,000.
Directs the Secretary of the Treasury to modify the Employee Plans Compliance Resolution System to correct plan loan, minimum distribution, and other errors.
Amends the IRC to allow matching contributions or nonelective contributions (safe harbor contributions) to satisfy certain requirements even though they are funded in whole or in part by forfeitures.
Amends ERISA to specify the meaning of a substantial cessation of operations by an employer with respect to liability for termination of single-employer plans under a distress termination or a termination by a corporation.
Amends the IRC to declare that an organization otherwise eligible to participate in a church plan shall not be aggregated with another such organization and treated as a single employer with it unless: (1) one organization provides directly or indirectly at least 80% of the operating funds for the other one during the recipient's preceding tax year, and (2) there is a degree of common management or supervision between the organizations.
Preempts any state law relating to wage, salary, or payroll payment, collection, deduction, garnishment, assignment, or withholding which would directly or indirectly prohibit or restrict the inclusion in any church plan of an automatic contribution arrangement.
Excludes from gross income for income tax purposes amounts attributable to transfers of and mergers of church plans that are maintained by the same church or convention or association of churches.
Allows church plans and their supporting organizations to invest plan assets in a group trust (as defined by Internal Revenue Service Revenue Rulings).
Revises the prohibition against discrimination in favor of highly compensated employees by contributions or benefits provided under qualified pension, profit-sharing, and stock bonus plans. Extends certain protections to older, longer service participants in defined benefit plans.
Requires the Secretary of Labor, the Secretary of the Treasury, and the PBGC to review and report to the appropriate congressional committees on the reporting and disclosure requirements of ERISA applicable to pension plans and of the IRC applicable to qualified retirement plans.
Directs the Secretaries of Labor and of the Treasury to adopt final regulations allowing, but not requiring, a plan to consolidate into a single notice two or more of the notices required by ERISA, the IRC, and related regulations.
Directs the Secretary of Labor to modify specified regulations under ERISA to allow, but not require, a plan administrator, in the case of a designated investment alternative that contains a mix of asset classes, to use as a benchmark a blend of different broad-based securities market indices if the blend meets certain criteria.
Amends the IRC to treat as an eligible rollover distribution any direct trustee-to-trustee transfer of a portion of a distribution from a deceased employee's eligible retirement plan to a plan or annuity of a designated beneficiary who is not the employee's surviving spouse.
Revises the meaning of "eligible deferred compensation plan" to eliminate the requirement that the deferral agreement be entered into before the first day of the month in which the compensation will be deferred. Requires only that the agreement be entered into before the compensation is currently available to the individual in question.
Amends both the IRC and ERISA to require a plan administrator to account separately for 50% of plan benefits and not distribute them during a 90-day segregation period (which may be extended) if the administrator is notified by a participant's spouse or former spouse that benefits payable to the participant are a subject of a pending domestic relations action.
Amends ERISA to authorize the Secretary to assess a civil penalty against any plan administrator of up to $100 a day from the date of the administrator's failure or refusal to provide required information to prospective alternative payees (or a representative or the Secretary) under a domestic relations order.
Amends the Railroad Retirement Act of 1974 (RRA) to eliminate for widows, surviving divorced wives, or surviving divorced mothers of a deceased railroad employee eligible for annuities the requirement of a current connection with the railroad industry.
Permits divorced spouses, widows, and widowers of a deceased railroad employee to marry after age 60 without penalty for annuity purposes under RRA.
Repeals the requirement that, in order to treat the disposable retired pay of a retired Armed Forces member as property of the member and his or her spouse, a court have jurisdiction over the member by reason of: (1) his or her residence, other than because of military assignment, in the court's territorial jurisdiction; (2) his or her domicile in the court's territorial jurisdiction; or (3) his or her consent to the court's jurisdiction.
Requires the Secretary concerned to make child support, alimony, or property settlement payments to a spouse or former spouse of a retired member of the Armed Forces, if the member's disposable retired pay is reduced for specified reasons including a waiver in order to receive active duty or military reserve compensation, in the amount of the lesser of: (1) the amount payable under the final court order from the disposable retired pay (determined without regard to such reductions), or (2) 100% of the disposable retired pay (determined after such reductions).
Entitles to specified survivor annuities under the Civil Service Retirement System (CSRS) widows, widowers, and former spouses of federal employees who die after separation from the service but before establishing a valid claim for a deferred annuity.
Requires payments to a federal employee's former spouse of certain retirement benefits under CSRS or the Federal Employees Retirement System (FERS) according to the terms of a court decree, court order, property settlement, or similar process.
Amends the IRC to establish in the Internal Revenue Service (IRS) an Office of the Participant and Plan Sponsor Advocate.
[Congressional Bills 113th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2117 Introduced in House (IH)]
113th CONGRESS
1st Session
H. R. 2117
To simplify and enhance qualified retirement plans, and for other
purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
May 22, 2013
Mr. Neal introduced the following bill; which was referred to the
Committee on Ways and Means, and in addition to the Committees on
Education and the Workforce, Armed Services, Oversight and Government
Reform, and Transportation and Infrastructure, for a period to be
subsequently determined by the Speaker, in each case for consideration
of such provisions as fall within the jurisdiction of the committee
concerned
_______________________________________________________________________
A BILL
To simplify and enhance qualified retirement plans, and for other
purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE; REFERENCE; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``Retirement Plan
Simplification and Enhancement Act of 2013''.
(b) Amendment of 1986 Code.--Except as otherwise expressly
provided, whenever in this Act an amendment or repeal is expressed in
terms of an amendment to, or repeal of, a section or other provision,
the reference shall be considered to be made to a section or other
provision of the Internal Revenue Code of 1986.
(c) Table of Contents.--The table of contents of this Act is as
follows:
Sec. 1. Short title; reference; table of contents.
TITLE I--EXPANDING COVERAGE AND INCREASING RETIREMENT SAVINGS
Sec. 101. Modification of automatic enrollment safe harbor.
Sec. 102. Secure deferral arrangements.
Sec. 103. Qualified cash or deferred arrangements must allow long-term
employees working more than 500 but less
than 1,000 hours per year to participate.
Sec. 104. Separate application of top heavy rules to defined
contribution plans covering part-time
employees.
Sec. 105. Modification of saver's credit.
Sec. 106. Retirement handbook and retirement readiness checklist.
Sec. 107. Additional time to adopt a qualified plan.
TITLE II--ENCOURAGING SMALL BUSINESSES TO ENTER AND REMAIN IN THE
EMPLOYER RETIREMENT PLAN SYSTEM
Sec. 201. Increase in credit limitation for small employer pension plan
startup costs.
Sec. 202. Eliminating barriers to use of multiple employer plans.
TITLE III--PRESERVATION OF INCOME
Sec. 301. Study of application of spousal consent rules to defined
contribution plans.
Sec. 302. Administration of joint and survivor annuity requirements.
Sec. 303. Availability of distribution options.
Sec. 304. Rollover of insurance contracts to IRAs.
Sec. 305. Portability of lifetime income options.
Sec. 306. Lost Pension Plan Registry.
TITLE IV--SIMPLIFICATION AND CLARIFICATION OF QUALIFIED RETIREMENT PLAN
RULES
Sec. 401. Exception from required distributions where aggregate
retirement savings do not exceed $100,000.
Sec. 402. Expansion of Employee Plans Compliance Resolution System.
Sec. 403. Use of forfeitures to fund safe harbor contributions.
Sec. 404. Substantial cessation of operations.
Sec. 405. Church plan clarification.
Sec. 406. Protecting older, longer service participants.
Sec. 407. Review and report to the Congress relating to reporting and
disclosure requirements.
Sec. 408. Consolidation of defined contribution plan notices.
Sec. 409. Performance benchmarks for asset allocation funds.
Sec. 410. Permit nonspousal beneficiaries to roll assets to plans.
Sec. 411. Eliminate the ``first day of the month'' requirement.
TITLE V--PROVISIONS ENSURING EQUITY IN DIVORCE
Sec. 501. Special rules relating to treatment of qualified domestic
relations orders.
Sec. 502. Elimination of current connection requirement under Railroad
Retirement Act for certain survivors.
Sec. 503. Permitting divorced spouses and widows and widowers to
remarry after turning 60 without a penalty
under Railroad Retirement Act.
Sec. 504. Repeal of jurisdictional requirement for court to treat
military retirement pay as property of the
military member and spouse.
Sec. 505. Modification of reductions in disposable retired pay for
payments in compliance with court orders.
Sec. 506. Survivor annuities for widows, widowers, and former spouses
of federal employees who die before
attaining age for deferred annuity under
civil service retirement system.
Sec. 507. Court orders relating to Federal retirement benefits for
former spouses of federal employees.
TITLE VI--OFFICE OF PARTICIPANT AND PLAN SPONSOR ADVOCATE
Sec. 601. Office of Participant and Plan Sponsor Advocate.
TITLE I--EXPANDING COVERAGE AND INCREASING RETIREMENT SAVINGS
SEC. 101. MODIFICATION OF AUTOMATIC ENROLLMENT SAFE HARBOR.
(a) In General.--
(1) Removal of 10 percent cap.--Clause (iii) of section
401(k)(13)(C) is amended by striking ``, does not exceed 10
percent, and is at least'' and inserting ``and is''.
(2) Conforming amendments.--
(A) Subclause (I) of section 401(k)(13)(C)(iii) is
amended by striking ``3 percent'' and inserting ``at
least 3 percent, but not greater than 10 percent,''.
(B) Subclause (II) of section 401(k)(13)(C)(iii) is
amended by striking ``4 percent'' and inserting ``at
least 4 percent''.
(C) Subclause (III) of section 401(k)(13)(C)(iii)
is amended by striking ``5 percent'' and inserting ``at
least 5 percent''.
(D) Subclause (IV) of section 401(k)(13)(C)(iii) is
amended by striking ``6 percent'' and inserting ``at
least 6 percent''.
(b) Effective Date.--The amendments made by this section shall
apply to plan years beginning after the date of enactment of this Act.
SEC. 102. SECURE DEFERRAL ARRANGEMENTS.
(a) In General.--Subsection (k) of section 401 of the Internal
Revenue Code of 1986 is amended by adding at the end the following new
paragraph:
``(14) Alternative method for secure deferral arrangements
to meet nondiscrimination requirements.--
``(A) In general.--A secure deferral arrangement
shall be treated as meeting the requirements of
paragraph (3)(A)(ii).
``(B) Secure deferral arrangement.--For purposes of
this paragraph, the term `secure deferral arrangement'
means any cash or deferred arrangement which meets the
requirements of subparagraphs (C), (D), and (E) of
paragraph (13), except as modified by this paragraph.
``(C) Qualified percentage.--For purposes of this
paragraph, with respect to any employee, the term
`qualified percentage' means, in lieu of the meaning
given such term in paragraph (13)(C)(iii), any
percentage determined under the arrangement if such
percentage is applied uniformly and is--
``(i) at least 6 percent, but not greater
than 10 percent, during the period ending on
the last day of the first plan year which
begins after the date on which the first
elective contribution described in paragraph
(13)(C)(i) is made with respect to such
employee,
``(ii) at least 8 percent during the first
plan year following the plan year described in
clause (i), and
``(iii) at least 10 percent during any
subsequent plan year.
``(D) Matching contributions.--
``(i) In general.--For purposes of this
paragraph, an arrangement shall be treated as
having met the requirements of paragraph
(13)(D)(i) if and only if the employer makes
matching contributions on behalf of each
employee who is not a highly compensated
employee in an amount equal to the sum of 50
percent of the elective contributions of the
employee to the extent that such contributions
do not exceed 2 percent of compensation plus 30
percent of so much of such contributions as
exceed 2 percent but do not exceed 10 percent
of compensation.
``(ii) Application of rules for matching
contributions.--The rules of clause (ii) of
paragraph (12)(B) and clauses (iii) and (iv) of
paragraph (13)(D) shall apply for purposes of
clause (i) but the rule of clause (iii) of
paragraph (12)(B) shall not apply for such
purposes. The rate of matching contribution for
each incremental deferral must be at least as
high as the rate specified in clause (i), and
may be higher, so long as such rate does not
increase as an employee's rate of elective
contributions increases.''.
(b) Matching Contributions and Employee Contributions.--Subsection
(m) of section 401 of such Code is amended by redesignating paragraph
(13) as paragraph (14) and by adding after paragraph (12) the following
new paragraph:
``(13) Alternative method for secure deferral
arraignments.--A defined contribution plan shall be treated as
meeting the requirements of paragraph (2) with respect to
matching contributions and employee contributions if the plan--
``(A) is a secure deferral arrangement (as defined
in subsection (k)(14)),
``(B) meets the requirements of clauses (ii) and
(iii) of paragraph (11)(B), and
``(C) provides that matching contributions on
behalf of any employee may not be made with respect to
an employee's contributions or elective deferrals in
excess of 10 percent of the employee's compensation.''.
(c) Tax Credit.--
(1) In general.--Subpart (D) of part IV of subchapter A of
Chapter 1 of subtitle A of such Code is amended by adding at
the end thereof the following new section:
``SEC. 45S. SECURE DEFERRAL ARRANGEMENTS.
``(a) In General.--For purposes of section 38, in the case of an
eligible employer maintaining a qualified employer plan (as defined in
clauses (i) and (ii) of section 4972(d)(1)(A)), the secure deferral
arrangement credit determined under this section for any taxable year
is an amount equal to 10 percent of all contributions under a secure
deferral arrangement (as defined in section 401(k)(14)) made during the
plan year ending with or within the taxable year of the eligible
employer by or on behalf of employees other than highly compensated
employees (as defined in section 414(q)).
``(b) Dollar Limitation.--The amount of the credit determined under
this section for any taxable year shall not exceed--
``(1) $10,000 for the first credit year and each of the 2
taxable years immediately following the first credit year, and
``(2) zero for any other taxable year.
``(c) First Credit Year.--The term `first credit year' means--
``(1) the taxable year of the eligible employer with which
or within which ends the first plan year during which the
secure deferral arrangement was in effect for the entire year,
or
``(2) at the election of the eligible employer, the taxable
year preceding the taxable year referred to in paragraph (1).
``(d) Definition and Special Rules.--
``(1) Eligible employer.--The term `eligible employer' has
the meaning given such term by section 408(p)(2)(C)(i).
``(2) Aggregation.--All persons treated as a single
employer under subsection (a) or (b) of section 52, or
subsection (m) or (o) of section 414, shall be treated as one
person. All qualified employer plans of an eligible employer
shall be treated as 1 qualified employer plan.
``(3) Disallowance of deduction.--No deduction shall be
allowed for that portion of the contribution for the taxable
year which is equal to the credit determined under subsection
(a).
``(4) Election not to claim credit.--This section shall not
apply to a taxpayer for any taxable year if such taxpayer
elects to have this section not apply for such taxable year.
Any such taxable year shall not be taken into account under
subsection (b).''.
(2) Conforming amendments.--
(A) General business credit.--Subsection (b) of
section 38 of such Code is amended by striking ``plus''
at the end of paragraph (35), by striking the period at
the end of paragraph (36) and inserting ``, plus'', and
by adding at the end the following:
``(37) the secure deferral arrangement credit determined
under section 45S.''.
(B) Credit cross-references.--
(i) Subsection (k) of section 401 of such
Code, as amended by subsection (a), is amended
at the end thereof to add the following new
paragraph:
``(15) Secure deferral arrangement credit.--For a general
business credit with respect to secure deferral arrangements,
see section 45S.''.
(ii) Subsection (m) of section 401 of such
Code, as amended by subsection (b), is amended
by adding at the end the following new
paragraph:
``(15) Secure deferral arrangement credit.--For a general
business credit with respect to secure deferral arrangements,
see section 45S.''.
(d) Facilitating Qualified Automatic Contribution Arrangements and
Secure Deferral Arraignments.--By no later than the date that is twelve
months after the date of enactment of this Act, the Secretary of the
Treasury shall prescribe rules that facilitate the administration of
qualified automatic contribution arrangements (as defined in section
401(k)(13) of the Internal Revenue Code of 1986) and secure deferral
arrangements (as defined in section 401(k)(14) of such Code). Such
rules shall--
(1) Clarify, simplify, and provide safe harbors with
respect to the application of the notice requirements described
in section 401(k)(13)(E) of such Code, especially in cases
where--
(A) employees become eligible under such
arrangements upon becoming employed or shortly
thereafter, or
(B) the employer has employees subject to different
payroll and administrative systems.
(2) Clarify, simplify and provide safe harbors with respect
to the timing of the increases in the qualified percentage
described in subclauses (II), (III), and (IV) of section
401(k)(13)(C)(iii) of such Code and in clauses (ii) and (iii)
of section 401(k)(14)(C) of such Code, especially in cases
where the employer has employees subject to different payroll
and administrative systems.
(e) Effective Date.--
(1) In general.--The amendments made by subsections (a) and
(b) shall apply to plan years beginning after December 31,
2013.
(2) Tax credit.--The amendments made by subsection (c)
shall apply to taxable years beginning after December 31, 2013.
SEC. 103. QUALIFIED CASH OR DEFERRED ARRANGEMENTS MUST ALLOW LONG-TERM
EMPLOYEES WORKING MORE THAN 500 BUT LESS THAN 1,000 HOURS
PER YEAR TO PARTICIPATE.
(a) Participation Requirement.--
(1) In general.--Subparagraph (D) of section 401(k)(2)
(defining qualified cash or deferred arrangement) is amended to
read as follows:
``(D) which does not require, as a condition of
participation in the arrangement, that an employee
complete a period of service with the employer (or
employers) maintaining the plan extending beyond the
close of the earlier of--
``(i) the period permitted under section
410(a)(1) (determined without regard to
subparagraph (B)(i) thereof), or
``(ii) subject to the provisions of
paragraph (14), the first period of 3
consecutive 12-month periods during each of
which the employee has at least 500 hours of
service.''.
(2) Special rules.--Section 401(k) (relating to cash or
deferred arrangements) (as amended by section 102) is amended
by adding at the end the following new paragraph:
``(16) Special rules for participation requirement for
long-term, part-time workers.--For purposes of paragraph
(2)(D)(ii)--
``(A) Age requirement must be met.--Paragraph
(2)(D)(ii) shall not apply to an employee unless the
employee has met the requirement of section
410(a)(1)(A)(i) by the close of the last of the 12-
month periods described in such paragraph.
``(B) Nondiscrimination and top-heavy rules not to
apply.--
``(i) Nondiscrimination rules.--In the case
of employees who are eligible to participate in
the arrangement solely by reason of paragraph
(2)(D)(ii)--
``(I) notwithstanding subsection
(a)(4), an employer shall not be
required to make nonelective or
matching contributions on behalf of
such employees even if such
contributions are made on behalf of
other employees eligible to participate
in the arrangement, and
``(II) an employer may elect to
exclude such employees from the
application of subsection (a)(4),
paragraph (3), subsection (m)(2), and
section 410(b).
``(ii) Top-heavy rules.--An employer may
elect to exclude all employees who are eligible
to participate in a plan maintained by the
employer solely by reason of paragraph
(2)(D)(ii) from the application of the vesting
and benefit requirements under subsections (b)
and (c) of section 416.
``(iii) Vesting.--For purposes of
determining whether an employee described in
clause (i) has a nonforfeitable right to
employer contributions (other than
contributions described in paragraph (3)(D)(i))
under the arrangement, each 12-month period for
which the employee has at least 500 hours of
service shall be treated as a year of service.
``(iv) Employees who become full-time
employees.--This subparagraph shall cease to
apply to any employee as of the first plan year
beginning after the plan year in which the
employee meets the requirements of section
410(a)(1)(A)(ii) without regard to paragraph
(2)(D)(ii).
``(C) Exception for employees under collectively
bargained plans, etc.--Paragraph (2)(D)(ii) shall not
apply to employees described in section 410(b)(3).
``(D) Special rules.--
``(i) Time of participation.--The rules of
section 410(a)(4) shall apply to an employee
eligible to participate in an arrangement
solely by reason of paragraph (2)(D)(ii).
``(ii) 12-month periods.--12-month periods
shall be determined in the same manner as under
the last sentence of section 410(a)(3)(A).''.
(b) Effective Date.--The amendments made by this section shall
apply to plan years beginning after December 31, 2013, except that, for
purposes of section 401(k)(2)(D)(ii) of the Internal Revenue Code of
1986 (as added by such amendments), 12-month periods beginning before
January 1, 2014, shall not be taken into account.
SEC. 104. SEPARATE APPLICATION OF TOP HEAVY RULES TO DEFINED
CONTRIBUTION PLANS COVERING PART-TIME EMPLOYEES.
(a) In General.--Paragraph (2) of section 416(c) 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 paragraphs (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. 105. MODIFICATION OF SAVER'S CREDIT.
(a) 50 Percent Credit for All Taxpayers: Expansion of Phaseout
Ranges.--Subsection (b) of section 25B is amended to read as follows:
``(b) Applicable Percentage.--For purposes of this section--
``(1) In general.--Except as provided in paragraph (2), the
applicable percentage is 50 percent.
``(2) Phaseout.--The percentage under paragraph (1) shall
be reduced (but not below zero) by the number of percentage
points which bears the same ratio to 50 percentage points as--
``(A) the excess of--
``(i) the taxpayer's adjusted gross income
for such taxable year, over
``(ii) the applicable dollar amount, bears
to
``(B) the phaseout range.
If any reduction determined under this paragraph is not a whole
percentage point, such reduction shall be rounded to the
nearest whole percentage point.
``(3) Applicable dollar amount; phaseout range.--
``(A) Joint returns.--Except as provided in
subparagraph (B)--
``(i) the applicable dollar amount is
$65,000, and
``(ii) the phaseout range is $20,000.
``(B) Other returns.--In the case of--
``(i) a head of a household (as defined in
section 2(b)), the applicable dollar amount and
the phaseout range shall be \3/4\ of the
amounts applicable under subparagraph (A) (as
adjusted under paragraph (4)), and
``(ii) any taxpayer who is not filing a
joint return and who is not a head of a
household (as so defined), the applicable
dollar amount and the phaseout range shall be
\1/2\ of the amounts applicable under
subparagraph (A) (as so adjusted).
``(4) Inflation adjustment of applicable dollar amount.--In
the case of any taxable year beginning in a calendar year after
2014, the dollar amount in paragraph (3)(A)(i) shall be
increased by an amount equal to--
``(A) such dollar amount, multiplied by
``(B) the cost-of-living adjustment determined
under section 1(f)(3) for the calendar year in which
the taxable year begins, determined by substituting
`calendar year 2013' for `calendar year 1992' in
subparagraph (B) thereof.
Any increase determined under the preceding sentence shall be
rounded to the nearest multiple of $500.''.
(b) Credit Made Refundable; Matching Contributions.--
(1) Credit made refundable.--The Internal Revenue Code of
1986 is amended by moving section 25B to subpart C of part IV
of subchapter A of chapter 1 of such Code (relating to
refundable credits), by inserting section 25B after section
36B, and by redesignating section 25B as section 36C.
(2) Matching contributions.--Section 36C, as redesignated
by paragraph (1), is amended by adding at the end the
following:
``(g) Matching Contributions.--
``(1) In general.--The credit allowed to an eligible
individual under this section for any taxable year shall be
twice the credit which would (but for this subsection) be
allowed if--
``(A) the individual consents to the application of
paragraph (2), and
``(B) a designation by such individual is in effect
for such year under paragraph (3).
``(2) Credit paid into designated retirement account.--Any
credit under this section for any taxable year shall be paid by
the Secretary into the designated retirement account of the
individual for such year. The amount payable under the
preceding sentence shall be subject to the reductions under
section 6402 in the same manner as if such amount were an
overpayment. The amount so paid shall be treated as refunded to
such individual.
``(3) Designated retirement account.--For purposes of this
subsection, the term `designated retirement account' means any
account or plan--
``(A) of a type to which qualified retirement
savings contributions may be made,
``(B) which is for such individual's benefit, and
``(C) which is designated by such individual (in
such form and manner as the Secretary may provide) on
the return of tax for the taxable year.
``(4) Treatment of matching contributions.--In the case of
an amount paid under paragraph (2) into a designated retirement
account--
``(A) any dollar limitation otherwise applicable to
the amount of contributions or deferrals to such
account shall be increased by the amount so paid,
``(B) the individual's basis in such account shall
not be increased by reason of the amount so paid, and
``(C) such amount shall be treated as an employer
contribution for the plan year in which such amount is
paid for purposes of--
``(i) section 401(k)(3), and
``(ii) section 408(k)(6)(A)(iii).
``(5) Regulations.--The Secretary shall prescribe such
regulations or other guidance as may be necessary to address
situations under which the Secretary is not able to make a
payment to a designated retirement account of an individual,
including a plan of an employer for which the individual no
longer works and to an account that does not exist.''.
(3) Conforming amendments.--
(A) Section 6211(b)(4)(A) is amended by inserting
``36C,'' after ``36B,''.
(B) The table of sections for subpart A of part IV
of subchapter A of chapter 1 is amended by striking the
item relating to section 25B.
(C) The table of sections for subpart C of such
part is amended by adding at the end the following new
item:
``Sec. 36C. Elective deferrals and IRA contributions by certain
individuals.''.
(D) Section 1324(b)(2) of title 31, United States
Code, is amended by inserting ``36C,'' after ``36B,''.
(c) Maximum Contributions.--Subsection (a) of section 36C, as
redesignated by subsection (b), is amended to read as follows:
``(a) Allowance of Credit.--
``(1) In general.--In the case of an eligible individual,
there shall be allowed as a credit against the tax imposed by
this subtitle for the taxable year an amount equal to the
applicable percentage of so much of the qualified retirement
savings contributions of the eligible individual for the
taxable year as do not exceed the contribution limit.
``(2) Contribution limit.--For purposes of paragraph (1)--
``(A) In general.--Except as otherwise provided in
this paragraph, the contribution limit is $500 ($1,500
for taxable years beginning after 2023).
``(B) Annual increases to reach $1,500.--In the
case of taxable years beginning in a calendar year
after 2013 and before 2024, the contribution limit
shall be the sum of--
``(i) the contribution limit for taxable
years beginning in the preceding calendar year
(as increased under this subparagraph), and
``(ii) $100.
``(C) Inflation adjustment.--In the case of any
taxable year beginning in a calendar year after 2023,
the $1,500 amount in subparagraph (A) shall be
increased by an amount equal to--
``(i) such dollar amount, multiplied by
``(ii) the cost-of-living adjustment
determined under section 1(f)(3) for the
calendar year in which the taxable year begins,
determined by substituting `calendar year 2022'
for `calendar year 1992' in subparagraph (B)
thereof.
Any increase determined under the preceding sentence
shall be rounded to the nearest multiple of $50.''.
(d) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2013.
SEC. 106. RETIREMENT HANDBOOK AND RETIREMENT READINESS CHECKLIST.
(a) In General.--Section 704 of the Social Security Act is amended
by adding at the end the following new subsection:
``(f) Retirement Information.--
``(1) In general.--The Commissioner, in consultation with
the Social Security Advisory Board, shall prepare--
``(A) the financial reference handbook described in
paragraph (2), and
``(B) the retirement readiness checklist described
in paragraph (3).
``(2) Financial reference handbook.--The handbook described
in this paragraph is a pamphlet which--
``(A) includes definitions of basic financial
terms,
``(B) contains a listing of financial issues and
problems facing individuals who are retiring and
explanations of methods of dealing with the issues and
problems, and
``(C) is in a form readily understandable by the
average retiree.
``(3) Readiness checklist.--The checklist described in this
paragraph is a list of questions that individuals need to
consider in preparation for retirement, including the
following:
``(A) What annual income will the individual need
in retirement?
``(B) How many years will the individual live in
retirement?
``(C) What will be the cost of Medicare premiums?
``(D) What will be the cost of insurance necessary
to supplement Medicare?
``(E) How will savings be invested in retirement?
``(F) How will taxes affect your retirement income?
The checklist will include answers to the questions or
directions as to where information is available to answer the
questions. All information shall be in a form readily
understandable to the average recipient of the checklist.
``(4) Revisions.--The Commissioner shall periodically
revise and update the handbook and checklist prepared under
this subsection.
``(5) Distribution of materials.--
``(A) Handbook.--The financial reference handbook
described in paragraph (2) shall be included with
materials provided to an individual when the individual
first applies for benefits under title II and such
other times as the Commissioner determines appropriate.
``(B) Checklist.--The retirement readiness
checklist described in paragraph (3) shall be included
with an individual's annual social security account
statement provided under section 1143.''.
(b) Effective Date.--The amendment made by this section shall take
effect on the date of the enactment of this Act, but the handbooks and
checklists required to be provided by such amendment shall be provided
on or after January 1, 2014 (or such earlier date as the Commissioner
of Social Security may provide).
SEC. 107. ADDITIONAL TIME TO ADOPT A QUALIFIED PLAN.
(a) In General.--Subsection (a) of section 401 is amended by
inserting after paragraph (37) the following new paragraph:
``(38) The adoption of a plan by the applicable date shall
not cause a plan to fail to meet the requirements of this
section for a plan year. For purposes of the preceding
sentence, the term `applicable date' means the due date
(including extensions) for filing the Federal income tax return
for the employer's taxable year in which ends the plan year for
which the plan is effective. A plan adopted in accordance with
this paragraph will be treated as established by the end of the
employer's taxable year for purposes of applying section
404(a).''.
(b) Effective Date.--The amendment made by subsection (a) shall
apply to years beginning after December 31, 2013.
TITLE II--ENCOURAGING SMALL BUSINESSES TO ENTER AND REMAIN IN THE
EMPLOYER RETIREMENT PLAN SYSTEM
SEC. 201. INCREASE IN CREDIT LIMITATION FOR SMALL EMPLOYER PENSION PLAN
STARTUP COSTS.
(a) In General.--Paragraph (1) of section 45E(b) is amended to read
as follows:
``(1) for the first credit year and each of the 2 taxable
years immediately following the first credit year, the greater
of--
``(A) $500, or
``(B) the lesser of--
``(i) $250 for each employee of the
eligible employer who is not a highly
compensated employee (as defined in section
415(q)) and who is eligible to participate in
the eligible employer plan maintained by the
eligible employer, or
``(ii) $5,000, and''.
(b) Effective Date.--The amendment made by this section shall apply
to taxable years beginning after December 31, 2013.
SEC. 202. ELIMINATING BARRIERS TO USE OF MULTIPLE EMPLOYER PLANS.
By December 31, 2013, the Secretaries of the Treasury and Labor
shall--
(1) prescribe administrative guidance establishing
conditions under which an employer participating in a plan
described in section 413(c) of the Internal Revenue Code of
1986 shall not have any liability under title I of the Employee
Retirement Income Security Act of 1974 with respect to the acts
or omissions of one or more other participating employers,
which regulations may require that the portion of the plan
attributable to such participating employers be spun off to
plans maintained by such employers,
(2) prescribe administrative guidance establishing
conditions under which a plan described in section 413(c) of
such Code may be treated as satisfying the qualification
requirements of sections 401(a) and 413(c) of such Code despite
the violation of such requirements by one or more participating
employers, including requiring, if appropriate, that the
portion of the plan attributable to such participating
employers be spun off to plans maintained by such employers,
and
(3) prescribe administrative guidance providing simplified
means by which plans described in section 413(c) of such Code
may satisfy the requirements of section 103 of the Employee
Retirement Income Security Act of 1974.
TITLE III--PRESERVATION OF INCOME
SEC. 301. STUDY OF APPLICATION OF SPOUSAL CONSENT RULES TO DEFINED
CONTRIBUTION PLANS.
(a) Study.--The Government Accountability Office shall conduct a
study of the feasibility and desirability of extending the application
of the requirements of section 205 of the Employee Retirement Income
Security Act of 1974 and sections 401(a)(11) and 417 of the Internal
Revenue Code of 1986 (relating to spousal consent requirements) to
defined contribution plans to which such requirements do not apply.
Such study shall include consideration of any modifications of such
requirements that are necessary to apply such requirements to such
plans.
(b) Report.--Not later than 1 year after the date of the enactment
of this Act, the Government Accountability Office shall report the
results of the study, together with any recommendations for legislative
changes, to the Committees on Finance and Health, Education, Labor, and
Pensions of the Senate and the Committees on Ways and Means and
Education and the Workforce of the House of Representatives.
SEC. 302. ADMINISTRATION OF JOINT AND SURVIVOR ANNUITY REQUIREMENTS.
(a) Amendments to the Employee Retirement Income Security Act of
1974.--
(1) In general.--Section 402(c) of the Employee Retirement
Income Security Act of 1974 (29 U.S.C. 1102(c)) is amended--
(A) in paragraph (2) by striking ``or'' at the end,
(B) in paragraph (3) by striking the period at the
end and inserting ``; or'', and
(C) by adding at the end the following new
paragraph:
``(4) that a named fiduciary, or a fiduciary designated by
a named fiduciary pursuant to a plan procedure described in
section 405(e), may appoint an annuity administrator or
administrators with responsibility for administration of an
individual account plan in accordance with the requirements of
section 205 and payment of any annuity required thereunder.''.
(2) Section 405 of such Act (29 U.S.C. 1105) is amended by
adding at the end the following new subsection:
``(e) Annuity Administrator.--If an annuity administrator or
administrators have been appointed under section 402(c)(4) and such
entity acknowledges in writing that they are the annuity administrator
and a fiduciary under the plan with respect to their appointed duties,
then neither the named fiduciary nor any appointing fiduciary shall be
liable for any act or omission of the annuity administrator except to
the extent that--
``(1) the named fiduciary or appointing fiduciary violated
section 404(a)(1)--
``(A) with respect to such allocation or
designation, or
``(B) in continuing the allocation or designation,
``(2) the named fiduciary or appointing fiduciary would
otherwise be liable in accordance with subsection (a), or
``(3) the entity appointed to be the annuity administrator
is neither an insurance company nor approved to be an annuity
administrator by the Secretary.''.
(b) Effective Date.--The amendments made by subsection (a) shall
apply as of the date of enactment of this Act.
SEC. 303. AVAILABILITY OF DISTRIBUTION OPTIONS.
(a) Lifetime Income Investments.--By the date that is one year
after the date of enactment of this Act, the Secretary of the Treasury
shall issue final regulations under which it is clarified that any
specified age or service condition (or combination of age and service
conditions) with respect to a lifetime income investment (as defined in
section 401(a)(38)(B)(ii)) under a defined contribution plan shall be
disregarded in determining whether such lifetime income investment is
currently available to an employee for purposes of Treasury Regulation
section 1.401(a)(4)-4(b) (or any successor provision).
(b) Enforcement.--As of the date of enactment of this Act, the
Secretary of the Treasury shall administer and enforce the law in
accordance with subsection (a) with respect to plan years beginning
before, on, or after the date of enactment of this Act.
(c) Effective Date.--This section shall take effect as of the date
of enactment of this Act.
SEC. 304. ROLLOVER OF INSURANCE CONTRACTS TO IRAS.
(a) In General.--Section 408(a)(3) is amended by inserting ``other
than insurance contracts that were rolled over to an IRA from a
qualified retirement plan described in clause (iii), (iv), or (vi) of
section 402(c)(8)(B) provided that such contracts provide only
incidental death benefits taking into account both the IRA and the
qualified retirement plan'' after ``contract''.
(b) Effective Date.--The amendment made by subsection (a) shall
apply to years beginning after December 31, 2013.
SEC. 305. PORTABILITY OF LIFETIME INCOME OPTIONS.
(a) In General.--Subsection (a) of section 401 is amended by
inserting after paragraph (37) the following new paragraph:
``(38) Portability of lifetime income.--
``(A) In general.--A trust forming part of a
defined contribution plan shall not be treated as
failing to constitute a qualified trust under this
section solely by reason of allowing--
``(i) qualified distributions of a lifetime
income investment, or
``(ii) distributions of a lifetime income
investment in the form of a qualified plan
distribution annuity contract,
on or after the date that is 90 days prior to the date
on which such lifetime income investment is no longer
authorized to be held as an investment option under the
plan except as may otherwise be provided by
regulations.
``(B) Definitions.--For purposes of this
subsection--
``(i) the term `qualified distribution'
means a direct trustee-to-trustee transfer to
an eligible retirement plan (as defined in
section 402(c)(8)(B)), as described in section
401(a)(31)(A),
``(ii) the term `lifetime income
investment' means an investment option that is
designed to provide an employee with election
rights--
``(I) that are not uniformly
available with respect to other
investment options under the plan, and
``(II) that are to a lifetime
income feature available through a
contract or other arrangement offered
under the plan or under another
eligible retirement plan (as defined in
section 402(c)(8)(B)) through a direct
trustee-to-trustee transfer to such
other eligible retirement plan under
section 401(a)(31)(A),
``(iii) the term `lifetime income feature'
means--
``(I) a feature that guarantees a
minimum level of income annually (or
more frequently) for at least the
remainder of the life of the employee
or the joint lives of the employee and
the employee's designated beneficiary,
or
``(II) an annuity payable on behalf
of the employee under which payments
are made in substantially equal
periodic payments (not less frequently
than annually) over the life of the
employee or the joint lives of the
employee and the employee's designated
beneficiary, taking into account the
rules of clause (iii) of section
401(a)(9)(I), and
``(iv) the term `qualified plan
distribution annuity contract' means an annuity
contract purchased for a participant and
distributed to the participant by a plan
described in subparagraph (B) of section
402(c)(8) (without regard to clauses (i) and
(ii) thereof).''.
(b) Cash or Deferred Arrangement.--Clause (i) of section
401(k)(2)(B) is amended by striking ``or'' at the end of subclause
(IV), by striking ``and'' at the end of subclause (V) and inserting
``or'', and by adding at the end of clause (i) the following:
``(VI) with respect to amounts
invested in a lifetime income
investment (as defined in section
401(a)(38)(B)(ii)), the date that is 90
days prior to the date that such
lifetime income investment may no
longer be held as an investment option
under the plan, provided that any
distribution under this subclause must
be in the form of a qualified
distribution (as defined in section
401(a)(38)(B)(i)) or a qualified plan
distribution annuity contract (as
defined in section 401(a)(38)(B)(iv)),
and''.
(c) Section 403(b) Plans.--
(1) Annuity contracts.--Paragraph (11) of section 403(b) is
amended by striking ``or'' at the end of subparagraph (B), by
striking the period at the end of subparagraph (C), and by
inserting ``, or'', and by adding at the end the following:
``(D) with respect to amounts invested in a
lifetime income investment (as defined in section
401(a)(38)(B)(ii)), the date that is 90 days prior to
the date that such lifetime income investment may no
longer be held as an investment option under the plan,
provided that any distribution under this subparagraph
must be in the form of a qualified distribution (as
defined in section 401(a)(38)(B)(i)) or a qualified
plan distribution annuity contract (as defined in
section 401(a)(38)(B)(iv)).''.
(2) Custodial accounts.--Clause (ii) of section
403(b)(7)(A) is amended to read as follows:
``(ii) under the custodial account, no such
amounts may be paid or made available to any
distributee (unless such amount is a
distribution to which section 72(t)(2)(G)
applies) before--
``(I) the employee dies,
``(II) the employee attains age
59\1/2\,
``(III) the employee has a
severance from employment,
``(IV) the employee becomes
disabled (within the meaning of section
72(m)(7)),
``(V) in the case of contributions
made pursuant to a salary reduction
agreement (within the meaning of
section 3121(a)(5)(D)), the employee
encounters financial hardship, or
``(VI) with respect to amounts
invested in a lifetime income
investment (as defined in section
401(a)(38)(B)(ii)), the date that is 90
days prior to the date that such
lifetime income investment may no
longer be held as an investment option
under the plan, provided that any
distribution under this subparagraph
must be in the form of a qualified
distribution (as defined in section
401(a)(38)(B)(i)) or a qualified plan
distribution annuity contract (as
defined in section
401(a)(38)(B)(iv)).''.
(d) Eligible Deferred Compensation Plans.--Subparagraph (A) of
section 457(d)(1) is amended by striking ``or'' at the end of clause
(ii), by inserting ``or'' at the end of clause (iii), and by adding
after clause (iii) the following:
``(iv) with respect to amounts invested in
a lifetime income investment (as defined in
section 401(a)(38)(B)(ii)), the date that is 90
days prior to the date that such lifetime
income investment may no longer be held as an
investment option under the plan, provided that
any distribution under this subparagraph must
be in the form of a qualified distribution (as
defined in section 401(a)(38)(B)(i)) or a
qualified plan distribution annuity contract
(as defined in section 401(a)(38)(B)(iv)),''.
(e) Effective Date.--The amendments made by this section shall
apply to plan years beginning after December 31, 2013.
SEC. 306. LOST PENSION PLAN REGISTRY.
(a) In General.--Subtitle C of title IV 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. 4051. LOST PENSION PLAN REGISTRY.
``No later than December 31, 2014, the corporation shall establish
a database to be known as the Lost Pension Plan Registry. The
corporation shall--
``(1) ensure that the database contains a record of the
information described in section 6057(b) of the Internal
Revenue Code of 1986 that is transmitted by the Secretary of
the Treasury to the corporation pursuant to section 6057(d) of
such Code, and
``(2) post such record on the corporation's website in a
manner calculated to inform participants and beneficiaries of
the name, location, and contact information for any plan that
has changed its identity or status.''.
(b) Amendment to the Internal Revenue Code.--Section 6057(d) of the
Internal Revenue Code of 1986 is amended by inserting ``and to the
Pension Benefit Guaranty Corporation'' before the period at the end.
TITLE IV--SIMPLIFICATION AND CLARIFICATION OF QUALIFIED RETIREMENT PLAN
RULES
SEC. 401. EXCEPTION FROM REQUIRED DISTRIBUTIONS WHERE AGGREGATE
RETIREMENT SAVINGS DO NOT EXCEED $100,000.
(a) In General.--Section 401(a)(9) (relating to required
distributions) is amended by adding at the end the following new
subparagraph:
``(I) Exception from required minimum distributions
during life of employee or beneficiary where assets do
not exceed $100,000.--
``(i) In general.--If, as of a measurement
date, the aggregate balance to the credit of an
employee under all applicable eligible
retirement plans does not exceed $100,000, then
the requirements of subparagraph (A) shall not
apply to the employee during any succeeding
calendar year. In addition, if, as of a
measurement date, the aggregate balance to the
credit of an employee under all applicable
eligible retirement plans does not exceed
$100,000, then the requirements of subparagraph
(B) shall not apply during any succeeding
calendar year to the employee's designated
beneficiary with respect to the designated
beneficiary's interest in the balance to the
credit of the deceased employee.
``(ii) Applicable eligible retirement
plan.--For purposes of this subparagraph, the
term `applicable eligible retirement plan'
means an eligible retirement plan (as defined
in section 402(c)(8)(B)) and any other plan,
contract, or arrangement to which the
requirements of this paragraph apply.
``(iii) Special rule for benefits paid as a
life annuity from defined benefit plan.--In
determining the aggregate balance under clause
(i), there shall not be taken into account the
value of any benefits under a defined benefit
plan that, on the measurement date, are being
paid as a life annuity.
``(iv) Measurement date.--
``(I) Initial measurement dates.--
The initial measurement date for an
individual is the last day of the
calendar year preceding the earlier
of--
``(aa) the calendar year in
which the employee attains age
70\1/2\, or
``(bb) the calendar year in
which the employee dies.
``(II) Subsequent measurement
dates.--If, in a calendar year, an
individual who is exempted from the
requirements of this paragraph pursuant
to clause (i) receives contributions,
rollovers, or transfers of amounts, or
accrues additional benefits under a
defined benefit plan, that were not
previously taken into account in
applying this subparagraph, then the
last day of that calendar year shall be
a new measurement date and a new
determination shall be made as to
whether clause (i) applies.
``(v) Determining value of defined benefit
plan benefits.--The value of defined benefit
plan benefits is determined in accordance with
the applicable interest rate and applicable
mortality rate assumptions under section
417(e), except that the value shall be equal to
the amount of the single sum payment payable to
the extent available under the plan.
``(vi) Phase-in of minimum distribution
requirements.--For an individual whose
aggregate balance exceeds the exemption level
in clause (i) by less than $10,000, required
minimum distribution requirements will phase in
based on the ratio of--
``(I) the amount by which the
aggregate balance exceeds the exemption
level, to
``(II) $10,000.
``(vii) Cost of living adjustments.--The
Secretary shall adjust annually the $100,000
amount specified in clause (i) for increases in
the cost-of-living at the same time and in the
same manner as adjustments under section
415(d); except that the base period shall be
the calendar quarter beginning July 1, 2013,
and any increase which is not a multiple of
$5,000 shall be rounded to the next lowest
multiple of $5,000.''.
(b) Effective Date.--The amendment made by this section shall apply
to initial measurement dates occurring on or after December 31, 2013.
SEC. 402. EXPANSION OF EMPLOYEE PLANS COMPLIANCE RESOLUTION SYSTEM.
(a) In General.--Not later than one year after the date of the
enactment of this Act, the Secretary of the Treasury shall modify the
Employee Plans Compliance Resolution System (as described in Revenue
Procedure 2013-12) to achieve the results specified in the succeeding
subsections of this section and to further facilitate corrections and
compliance in such other means as the Secretary deems appropriate.
(b) Loan Error.--
(1) In the case of plan loan errors for which corrections
are specified under the voluntary compliance program, self-
correction shall be made available by methods applicable to
such loans through the voluntary compliance program.
(2) The Secretary of Labor shall treat any loan error
corrected pursuant to paragraph (1) as meeting the requirements
of the Voluntary Fiduciary Correction Program of the Department
of Labor.
(c) 457(b) Plan Correction.--The Secretary of the Treasury shall
update the Employee Plans Compliance Resolution System to provide the
same type of comprehensive correction program that is available under
such system to retirement plans qualified under section 401(a) of the
Internal Revenue Code of 1986 to plans maintained pursuant to section
457(b) of such Code by an employer described in section 457(e)(1)(A) of
such Code.
(d) EPCRS for IRAs.--The Secretary of the Treasury shall expand the
Employee Plans Compliance Resolution System to allow custodians of
individual retirement plans to address inadvertent errors for which the
owner of an individual retirement plan was not at fault, including (but
not limited to)--
(1) waivers of the excise tax that would otherwise apply
under section 4974 of the Internal Revenue Code of 1986,
(2) under the self-correction component of the Employee
Plans Compliance Resolution System, 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.
(e) Required Minimum Distribution Corrections.--The Secretary of
the Treasury shall expand the Employee Plans Compliance Resolution
System to allow plans to which such system applies and custodians of
individual retirement plans to self-correct, without an excise tax, any
inadvertent errors pursuant to which a distribution is made no more
than 180 days after it was required to be made.
(f) Automatic Feature Error Correction.--In order to promote the
adoption of automatic enrollment and automatic escalation, the
Secretary of the Treasury shall modify the Employee Plans Compliance
Resolution System to establish specific correction methods for errors
in implementing automatic enrollment and automatic escalation features.
SEC. 403. USE OF FORFEITURES TO FUND SAFE HARBOR CONTRIBUTIONS.
(a) In General.--Section 401(k) (as amended by this Act) is amended
by adding at the end the following new paragraph:
``(17) A matching contribution or nonelective contribution
described in paragraph (3)(D)(ii), subparagraph (B) or (C) of
paragraph (12), or paragraph (13)(D) shall not fail to satisfy
the definition under such paragraph merely because the
contribution is funded in whole or in part by forfeitures.''.
(b) Effective Date.--The amendment made by subsection (a) shall
apply to forfeitures allocated in accordance with section 401(k)(14) of
the Internal Revenue Code of 1986 (as amended by subsection (a))
before, on or after the date of enactment of this Act.
SEC. 404. SUBSTANTIAL CESSATION OF OPERATIONS.
(a) In General.--Subsection (e) of section 4062 of the Employee
Retirement Income Security Act of 1974 is amended by striking ``If an
employer'' and inserting ``(1) In general.--If an employer'', and by
adding at the end thereof the following new paragraph:
``(2) Substantial cessation of operations.--An employer
shall not be treated as having a cessation described in
paragraph (1) unless--
``(A) all operations at a facility in a location
are ceased and--
``(i) such cessation is reasonably expected
to be permanent,
``(ii) no portion of such operations is
moved to another facility at a different
location,
``(iii) no portion of such operations is
assumed or otherwise transferred to another
employer, and
``(iv) no other operations are reasonably
expected to be maintained at such facility, and
``(B) as a result of the cessation described in
subparagraph (A), more than 20 percent of the employees
of the employer have a termination of employment that
is reasonably expected to be permanent. For purposes of
this subparagraph, employees of the employer shall
include all employees treated as employed by a single
employer under sections 210(c) and (d).''.
(b) Direction to the Corporation.--The Pension Benefit Guaranty
Corporation shall not take any enforcement, administrative, or other
actions pursuant to section 4062(e) of such Act that are inconsistent
with subparagraph (A) of section 4062(e)(2) of such Act, as amended,
without regard to whether such actions relate to a cessation or other
event that occurs before or after the date of enactment of this Act.
(c) Effective Date.--Subsection (b) and the amendment made by
subsection (a) shall apply as of the date of enactment of this Act.
SEC. 405. CHURCH PLAN CLARIFICATION.
(a) Application of Controlled Group Rules to Church Plans.--
(1) In general.--Section 414(c) is amended--
(A) by striking ``For purposes'' and inserting the
following:
``(1) In general.--For purposes'', and
(B) by adding at the end the following new
paragraph:
``(2) Church plans.--
``(A) General rule.--Except as provided in
subparagraphs (B) and (C), for purposes of this
subsection and subsection (m), an organization that is
otherwise eligible to participate in a church plan as
defined in subsection (e) shall not be aggregated with
another such organization and treated as a single
employer with such other organization unless--
``(i) one such organization provides
directly or indirectly at least 80 percent of
the operating funds for the other organization
during the preceding tax year of the recipient
organization, and
``(ii) there is a degree of common
management or supervision between the
organizations.
For purposes of this subparagraph, a degree of common
management or supervision exists only if the
organization providing the operating funds is directly
involved in the day-to-day operations of the other
organization.
``(B) Nonqualified church-controlled
organizations.--Notwithstanding the provisions of
subparagraph (A), for purposes of this subsection and
subsection (m), an organization that is a nonqualified
church-controlled organization shall be aggregated with
one or more other nonqualified church-controlled
organizations, or with an organization that is not
exempt from tax under section 501, and treated as a
single employer with such other organizations, if at
least 80 percent of the directors or trustees of such
organizations are either representatives of, or
directly or indirectly controlled by, the first
organization. For purposes of this subparagraph, a
`nonqualified church controlled organization' shall
mean a church-controlled organization described in
section 501(c)(3) that is not a qualified church-
controlled organization described in section
3121(w)(3)(B).
``(C) Permissive aggregation among church-related
organizations.--Organizations described in subparagraph
(A) may elect to be treated as under common control for
purposes of this subsection. Such election shall be
made by the church or convention or association of
churches with which such organizations are associated
within the meaning of section 414(e)(3)(D), or by an
organization determined by such church or convention or
association of churches to be the appropriate
organization for making such election.
``(D) Permissive disaggregation of church-related
organizations.--For purposes of subparagraph (A) above,
in the case of a church plan (as defined in section
414(e)), any employer may permissively disaggregate
those entities that are not churches (as defined in
section 403(b)(12)(B)) separately from those entities
that are churches, even if such entities maintain
separate church plans.
``(E) Anti-abuse rule.--For purposes of
subparagraphs (A) and (B), the anti-abuse rule in
Treasury Regulation section 1.414(c)-5(f) shall
apply.''.
(2) Effective date.--The amendments made by this subsection
shall apply to taxable years beginning before, on, or after the
date of the enactment of this Act.
(b) Application of Contribution and Funding Limitations to 403(b)
Grandfathered Defined Benefit Plans.--
(1) In general.--Section 251(e)(5) of the Tax Equity and
Fiscal Responsibility Act of 1982 (Public Law 97-248), is
amended--
(A) by striking ``403(b)(2)'' and inserting
``403(b)'', and
(B) by inserting before the period at the end the
following: ``, and shall be subject to the applicable
limitations of section 415(b) of such Code as if it
were a defined benefit plan under section 401(a) of
such Code and not the limitations of section 415(c) of
such Code (relating to limitation for defined
contribution plans).''.
(2) Effective date.--The amendments made by this subsection
shall apply as if included in the enactment of the Tax Equity
and Fiscal Responsibility Act of 1982.
(c) Automatic Enrollment by Church Plans.--
(1) In general.--This subsection shall supersede any law of
a State that relates to wage, salary, or payroll payment,
collection, deduction, garnishment, assignment or withholding
which would directly or indirectly prohibit or restrict the
inclusion in any church plan (as defined in this subsection) of
an automatic contribution arrangement.
(2) Definition of automatic contribution arrangement.--For
purposes of this subsection, the term ``automatic contribution
arrangement'' means an arrangement--
(A) under which a participant may elect to have the
plan sponsor make payments as contributions under the
plan on behalf of the participant, or to the
participant directly in cash, and
(B) under which a participant is treated as having
elected to have the plan sponsor make such
contributions in an amount equal to a uniform
percentage of compensation provided under the plan
until the participant specifically elects not to have
such contributions made (or specifically elects to have
such contributions made at a different percentage).
(3) Notice requirements.--
(A) The plan administrator of an automatic
contribution arrangement shall, within a reasonable
period before such plan year, provide to each
participant to whom the arrangement applies for such
plan year notice of the participant's rights and
obligations under the arrangement which--
(i) is sufficiently accurate and
comprehensive to apprise the participant of
such rights and obligations, and
(ii) is written in a manner calculated to
be understood by the average participant to
whom the arrangement applies.
(B) A notice shall not be treated as meeting the
requirements of subparagraph (A) with respect to a
participant unless--
(i) the notice includes an explanation of
the participant's right under the arrangement
not to have elective contributions made on the
participant's behalf (or to elect to have such
contributions made at a different percentage),
(ii) the participant has a reasonable
period of time, after receipt of the notice
described in subparagraph (A) and before the
first elective contribution is made, to make
such election, and
(iii) the notice explains how contributions
made under the arrangement will be invested in
the absence of any investment election by the
participant.
(4) Effective date.--This subsection shall take effect on
the date of the enactment of this Act.
(d) Allow Certain Plan Transfers and Mergers.--
(1) In general.--Section 414 is amended by adding at the
end the following new subsection:
``(y) Certain Plan Transfers and Mergers.--
``(1) In general.--Under rules prescribed by the Secretary,
except as provided in paragraph (2), no amount shall be
includible in gross income by reason of--
``(A) a transfer of all or a portion of the account
balance of a participant or beneficiary, whether or not
vested, from a plan described in section 401(a) or an
annuity contract described in section 403(b), which is
a church plan described in section 414(e) to an annuity
contract described in section 403(b), if such plan and
annuity contract are both maintained by the same church
or convention or association of churches,
``(B) a transfer of all or a portion of the account
balance of a participant or beneficiary, whether or not
vested, from an annuity contract described in section
403(b) to a plan described in section 401(a) or an
annuity contract described in section 403(b), which is
a church plan described in section 414(e), if such plan
and annuity contract are both maintained by the same
church or convention or association of churches, or
``(C) a merger of a plan described in section
401(a), or an annuity contract described in section
403(b), which is a church plan described in section
414(e) with an annuity contract described in section
403(b), if such plan and annuity contract are both
maintained by the same church or convention or
association of churches.
``(2) Limitation.--Paragraph (1) shall not apply to a
transfer or merger unless the participant's or beneficiary's
benefit immediately after the transfer or merger is equal to or
greater than the participant's or beneficiary's benefit
immediately before the transfer or merger.
``(3) Qualification.--A plan or annuity contract shall not
fail to be considered to be described in sections 401(a) or
403(b) merely because such plan or account engages in a
transfer or merger described in this subsection.
``(4) Definitions.--For purposes of this subsection:
``(A) Church.--The term `church' includes an
organization described in subparagraph (A) or (B)(ii)
of subsection (e)(3).
``(B) Annuity contract.--The term `annuity
contract' includes a custodial account described in
section 403(b)(7) and a retirement income account
described in section 403(b)(9).''.
(2) Effective date.--The amendment made by this subsection
shall apply to transfers or mergers occurring after the date of
the enactment of this Act.
(e) Investments by Church Plans in Collective Trusts.--
(1) In general.--In the case of--
(A) a church plan (as defined in section 414(e) of
the Internal Revenue Code 1986), including a plan
described in section 401(a) of such Code and a
retirement income account described in section
403(b)(9) of such Code, and
(B) an organization described in section
414(e)(3)(A) of such Code the principal purpose or
function of which is the administration of such a plan
or account,
the assets of such plan, account, or organization (including
any assets otherwise permitted to be commingled for investment
purposes with the assets of such a plan, account, or
organization) may be invested in a group trust otherwise
described in Internal Revenue Service Revenue Ruling 81-100 (as
modified by Internal Revenue Service Revenue Rulings 2004-67
and 2011-1), or any subsequent revenue ruling that supersedes
or modifies such revenue ruling, without adversely affecting
the tax status of the group trust, such plan, account, or
organization, or any other plan or trust that invests in the
group trust.
(2) Effective date.--This subsection shall apply to
investments made after the date of the enactment of this Act.
SEC. 406. PROTECTING OLDER, LONGER SERVICE PARTICIPANTS.
(a) In General.--Paragraph (4) of section 401(a) of the Internal
Revenue Code of 1986 is amended to read as follows:
``(4) Nondiscrimination.--
``(A) In general.--A trust shall not constitute a
qualified trust under this section unless the
contributions or benefits provided under the plan do
not discriminate in favor of highly compensated
employees (within the meaning of section 414(q)). For
purposes of this paragraph, there shall be excluded
from consideration employees described in section
410(b)(3) (A) and (C).
``(B) Protection of older, longer service
participants.--
``(i)(I) A defined benefit plan described
in subclause (II) shall not fail to satisfy
this paragraph with respect to plan benefits,
rights, or features by reason of--
``(aa) the composition of the
closed class of participants described
in subclause (II), or
``(bb) the benefits, rights, or
features provided to such closed class.
``(II) A plan is described in this
subclause if--
``(aa) the plan provides benefits,
rights, or features to a closed class
of participants,
``(bb) such closed class and such
benefits, rights, and features satisfy
the requirements of subparagraph (A)
(without regard to this clause) as of
the date that the class was closed, and
``(cc) after the date as of which
the class was closed, any plan
amendments that modify the closed class
or the benefits, rights, and features
provided to such closed class satisfy
subparagraph (A) (without regard to
this clause).
If a plan amendment causes a plan to cease to
be described in this subclause (II) by reason
of subclause (II)(cc), the plan is nevertheless
described in this subclause (II) if such plan
satisfies this subclause (II) (without regard
to subclause (II)(cc)) as of the effective date
of such amendment. In such cases, subclauses
(II)(bb) and (cc) shall subsequently be applied
by reference to the effective date of the plan
amendment, rather than by reference to the
original date that the class was closed.
``(ii)(I) A defined contribution plan
described in subclause (II) shall permitted to
be tested on a benefits basis.
``(II) A defined contribution plan is
described in this subclause if--
``(aa) the plan provides make-whole
contributions to a closed class of
participants whose defined benefit plan
accruals have been reduced or
eliminated,
``(bb) such closed class of
participants satisfies section
410(b)(2)(A)(i) as of the date that the
class of participants was closed, and
``(cc) after the date as of which
the class was closed, any plan
amendments that modify the closed class
or the allocations, benefits, rights,
and features provided to such closed
class satisfy subparagraph (A) (without
regard to this clause).
If a plan amendment causes a plan to cease to
be described in this subclause (II) by reason
of subclause (II)(cc), the plan is nevertheless
described in this subclause (II) if such plan
satisfies this subclause (II) (without regard
to subclause (II)(cc)) as of the effective date
of such amendment. In such cases, subclause
(II)(bb) and (cc) shall subsequently be applied
by reference to the effective date of the plan
amendment, rather than by reference to the
original date that the class was closed.
``(III) In addition to other testing
methodologies otherwise applicable, for
purposes of determining compliance with this
paragraph and with section 410(b) of the
portion of one or more defined contribution
plans described in subclause (II) that provide
make-whole contributions, such portion of such
plans may be aggregated and tested on a
benefits basis with the portion of one or more
defined contribution plans that--
``(aa) provides matching
contributions (as defined in subsection
(m)(4)(A)), or
``(bb) consists of an employee
stock ownership plan within the meaning
of section 4975(e)(7) or a tax credit
employee stock ownership plan within
the meaning of section 409(a).
For such purposes, matching contributions shall
be treated in the same manner as employer
contributions that are made without regard to
whether an employee makes an elective
contribution or employee contribution,
including for purposes of applying the rules of
subsection (l).
``(C) Definitions.--For purposes of this
paragraph--
``(i) Make-whole contributions.--The term
`make-whole contributions' means allocations
for each employee in the class that are
reasonably calculated, in a consistent manner,
to replace some or all of the retirement
benefits that the employee would have received
under the defined benefit plan and any other
plan or arrangement if the employee had
continued to benefit at the same level under
such defined benefit plan and such other plan
or arrangement.
``(ii) References to closed class of
participants.--References to a closed class of
participants and similar references to a closed
class shall include arrangements under which
one or more classes of participants are closed.
``(D) Protecting grandfathered participants in
defined benefit plans.--
``(i) One or more defined benefit plans
described in clause (ii) shall be permitted to
be tested on a benefits basis with one or more
defined contribution plans.
``(ii) A defined benefit plan is described
in this clause if--
``(I) the plan provides benefits to
a closed class of participants,
``(II) the plan and such benefits
satisfy the requirements of
subparagraph (A) (without regard to
this subparagraph) as of the date the
class was closed, and
``(III) after the date as of which
the class was closed, any plan
amendments that modify the closed class
or the benefits provided to such closed
class satisfy subparagraph (A) (without
regard to this subparagraph).
If a plan amendment causes a plan to cease to
be described in this clause (ii) by reason of
subclause (III), the plan is nevertheless
described in this clause (ii) if such plan
satisfies this clause (ii) (without regard to
subclause (III)) as of the effective date of
such amendment. In such cases, subclauses (II)
and (III) shall subsequently be applied by
reference to the effective date of the plan
amendment, rather than by reference to the
original date that the class was closed.
``(iii) In addition to other testing
methodologies otherwise applicable, for
purposes of determining compliance with this
paragraph and with section 410(b) of one or
more defined benefit plans described in clause
(ii), such plans may be aggregated and tested
on a benefits basis with the portion of one or
more defined contribution plans that--
``(I) provides matching
contributions (as defined in subsection
(m)(4)(A)), or
``(II) consists of an employee
stock ownership plan within the meaning
of section 4975(e)(7) or a tax credit
employee stock ownership plan within
the meaning of section 409(a).
For such purposes, matching contributions shall
be treated in the same manner as employer
contributions that are made without regard to
whether an employee makes an elective
contribution or employee contribution,
including for purposes of applying the rules of
subsection (l).
``(E) Rules.--The Secretary may prescribe rules
designed to prevent abuse of the plan designs otherwise
permitted by reason of subparagraphs (B) and (D). Such
rules shall be directed towards abuses under which the
defined benefit plan was established within a specified
period prior to the date that--
``(i) the class of participants described
in subparagraphs (B)(i)(II)(aa),
(B)(ii)(II)(aa), and (D)(ii)(I) is closed, or
``(ii) the defined benefit plan accruals
have been reduced or eliminated, in the case of
the make-whole contributions described in
subparagraph (C).
``(F) Transition rules.--Within one year after the
date of enactment of the Retirement Plan Simplification
and Enhancement Act of 2013, the Secretary shall
prescribe rules that facilitate the use of the
provisions of subparagraph (B) and (D) without regard
to--
``(i) whether the closing of the class of
participants referred to in such subparagraphs
occurred before or after such date of
enactment, or
``(ii) plan amendments that were adopted or
effective before such date of enactment and
that would not have been necessary if
subparagraphs (B) and (D) had been in
effect.''.
(b) Participation Requirements.--Paragraph (26) of section 401(a)
of the Internal Revenue Code of 1986 is amended by adding at the end
the following new subparagraph:
``(I) Protected participants.--A plan described in
this subparagraph shall be deemed to satisfy the
requirements of subparagraph (A). A plan is described
in this paragraph if--
``(i) the plan is amended to--
``(I) cease all benefit accruals,
or
``(II) provide future benefit
accruals only to a closed class of
participants, and
``(ii) the plan satisfies subparagraph (A)
(without regard to this subparagraph) as of the
effective date of the amendment.
The Secretary may prescribe such rules as are necessary
or appropriate to fulfill the purposes of this
subparagraph, including prevention of abuse of this
subparagraph in the case of plans established within a
specific period prior to the effective date of the
amendment.''.
(c) Effective Date.--The amendments made by this section shall take
effect on the date of the enactment of this Act, without regard to
whether any plan modifications referenced in such amendments are
adopted or effective before, on, or after such date of enactment.
SEC. 407. REVIEW AND REPORT TO THE CONGRESS RELATING TO REPORTING AND
DISCLOSURE REQUIREMENTS.
(a) Study.--As soon as practicable after the date of the enactment
of this Act, the Secretary of Labor, the Secretary of the Treasury, and
the Pension Benefit Guaranty Corporation shall review the reporting and
disclosure requirements of--
(1) title I of the Employee Retirement Income Security Act
of 1974 applicable to pension plans (as defined in section 3(2)
of such Act), and
(2) the Internal Revenue Code of 1986 applicable to
qualified retirement plans (as defined in section 4974(c) of
such Code without regard to paragraphs (4) and (5) thereof).
(b) Report.--Not later than 18 months after the date of the
enactment of this Act, the Secretary of Labor, the Secretary of the
Treasury, and the Pension Benefit Guaranty Corporation, jointly, shall
make such recommendations as may be appropriate to the appropriate
committees of the Congress to consolidate, simplify, standardize, and
improve the applicable reporting and disclosure requirements so as to
simplify reporting for plans referenced to in subsection (a) and ensure
that needed understandable information is provided to participants and
beneficiaries of such plans.
SEC. 408. CONSOLIDATION OF DEFINED CONTRIBUTION PLAN NOTICES.
(a) In General.--
(1) Not later than 18 months after the date of the
enactment of this Act, the Secretary of Labor and the Secretary
of the Treasury shall adopt final regulations providing that a
plan may, but is not required to, consolidate two or more of
the notices required under sections 404(c)(5)(B) and 514(e)(3)
of the Employee Retirement Income Security Act of 1974 (29
U.S.C. 1144(e)(3)), sections 401(k)(12)(D), 401(k)(13)(E), and
414(w)(4) of the Internal Revenue Code of 1986, and section
2550.404a-5 of title 29, Code of Federal Regulations (29 C.F.R.
2550.404a-5) into a single notice or, to the extent provided by
such regulations, consolidate such notices with the summary
plan description or summary of material modifications described
in section 104(b) of the Employee Retirement Income Security
Act of 1974 (29 U.S.C. 1024(b)), so long as the combined
notice, summary plan description or summary of material
modifications includes the required content, clearly identifies
the issues addressed therein, and is provided at the time and
with the frequency required for each such notice.
(2) The Secretary of Labor and the Secretary of the
Treasury may include in such regulations rules to ensure that,
to the extent such notices are consolidated with the summary
plan description or summary of material modifications, the
presentation, placement, or prominence of the information in
such notices shall not have the effect of failing to inform
participants and beneficiaries regarding the information in
such notices.
(b) Provision of Annual Notices Without Regard to Plan Year.--
(1) Clause (i) of section 404(c)(5)(B) of the Employee
Retirement Income Security Act of 1974 (29 U.S.C.
1104(c)(5)(B)) is amended--
(A) in subclause (I) by striking ``within a
reasonable period of time before each plan year,'' and
inserting ``within a reasonable period before the
arrangement described in subparagraph (A) applies to
such participant or beneficiary, and thereafter at
least once within any 12-month period (without regard
to the plan year) during which such arrangement
applies,'', and
(B) in subclause (II) by striking ``and before the
beginning of the plan year''.
(2) Subparagraph (A) of section 514(e)(3) of the Employee
Retirement Income Security Act of 1974 (29 U.S.C.
1144(e)(3)(A)) is amended by striking ``, within a reasonable
period before such plan year, provide to each participant to
whom the arrangement applies for such plan year'' and inserting
``, within a reasonable period before the arrangement applies
to a participant or beneficiary, and thereafter at least once
within any 12-month period (without regard to the plan year)
during which such arrangement applies, provide''.
(3) Clause (i) of section 401(k)(13)(E) of the Internal
Revenue Code of 1986 is amended by striking ``, within a
reasonable period before each plan year, each employee eligible
to participate in the arrangement for such year receives'' and
inserting ``each employee eligible to participate in the
arrangement receives, within a reasonable period before the
employee becomes eligible, and thereafter within a reasonable
period before each plan year during which such arrangement
applies,''.
(4) Subparagraph (D) of section 401(k)(12) of the Internal
Revenue Code of 1986 is amended by striking ``, within a
reasonable period before any year, given written notice'' and
inserting ``given written notice, within a reasonable period
before the employee becomes eligible, and thereafter within a
reasonable period before each plan year during which such
arrangement applies,''.
(5) Subparagraph (A) of section 414(w)(4) of the Internal
Revenue Code of 1986 is amended by striking ``, within a
reasonable period before each plan year, give to each employee
to whom an arrangement described in paragraph (3) applies for
such plan year'' and inserting ``, within a reasonable period
before an arrangement described in paragraph (3) applies to an
employee, and thereafter at least once within any 12-month
period (without regard to the plan year) during which such
arrangement applies, give to each such employee''.
SEC. 409. PERFORMANCE BENCHMARKS FOR ASSET ALLOCATION FUNDS.
Not later than six months after the date of enactment of this Act,
the Secretary of Labor shall modify the regulations under section 404
of the Employee Retirement Income Security Act of 1974 to provide that,
in the case of a designated investment alternative that contains a mix
of asset classes, a plan administrator 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; and
(3) each securities market index that is used for an
associated asset class would separately satisfy the
requirements of such regulations for such asset class.
SEC. 410. PERMIT NONSPOUSAL BENEFICIARIES TO ROLL ASSETS TO PLANS.
(a) In General.--Section 402(c) is amended by adding at the end the
following new paragraph:
``(12) Distributions to qualified plan of nonspouse
beneficiary.--If, with respect to any portion of a distribution
from an eligible retirement plan described in paragraph
(8)(B)(iii) of a deceased employee, a direct trustee-to-trustee
transfer is made to a plan or annuity described in clause
(iii), (iv), (v), or (vi) of paragraph (8)(B) of an individual
who is a designated beneficiary (as defined by section
401(a)(9)(E)) of the employee and who is not the surviving
spouse of the employee--
``(A) the transfer shall be treated as an eligible
rollover distribution, and
``(B) section 401(a)(9)(B) (other than clause (iv)
thereof) shall apply to such plan.''.
(b) Effective Date.--The amendment made by subsection (a) shall
apply to distributions made after the date of the enactment of this
Act.
SEC. 411. ELIMINATE THE ``FIRST DAY OF THE MONTH'' REQUIREMENT.
(a) In General.--Paragraph (4) of section 457(b) is amended to read
as follows:
``(4) which provides that compensation will be deferred
only if an agreement providing for such deferral has been
entered into before the compensation is currently available to
the individual,''.
(b) Effective Date.--The amendment made by this section shall apply
to years beginning after the date of the enactment of this Act.
TITLE V--PROVISIONS ENSURING EQUITY IN DIVORCE
SEC. 501. SPECIAL RULES RELATING TO TREATMENT OF QUALIFIED DOMESTIC
RELATIONS ORDERS.
(a) Preservation of Assets.--
(1) Amendment of 1986 code.--Section 414(p) is amended by
redesignating paragraph (13) as paragraph (14) and by inserting
after paragraph (12) the following new paragraph:
``(13) Preservation of assets.--
``(A) In general.--If a spouse or former spouse of
a participant notifies a plan in writing that--
``(i) an action is pending pursuant to a
State domestic relations law (including a
community property law), and
``(ii) all or a portion of the benefits
payable with respect to the participant under
the plan are a subject of such action,
and includes with the notice evidence of the pendency
of the action, the plan administrator shall, during the
segregation period, separately account for 50 percent
of such benefits. Any amounts so separately accounted
for may not be distributed by the plan during the
segregation period.
``(B) Segregation period.--For purposes of
subparagraph (A), the term `segregation period' means
the period--
``(i) beginning on the date of the receipt
of the notice, and
``(ii) ending as of the close of the 90-day
period beginning on such date (or, if earlier,
the date of receipt of a domestic relations
order with respect to the participant and the
spouse or former spouse or the date the action
is no longer pending).
The segregation period shall be extended for 1 or more
additional periods described in the preceding sentence
upon notice by the spouse or former spouse that the
action described in subparagraph (A) is still pending
as of the close of any prior segregation period.''.
(2) Amendment of employee retirement income security act of
1974.--Section 206(d)(3) of the Employee Retirement Income
Security Act of 1974 (29 U.S.C. 1056(d)(3)) is amended by
redesignating subparagraph (N) as subparagraph (O) and by
inserting after subparagraph (M) the following new
subparagraph:
``(N) Preservation of assets.--
``(i) In general.--If a spouse or former
spouse of a participant notifies a plan in
writing that--
``(I) an action is pending pursuant
to a State domestic relations law
(including a community property law),
and
``(II) all or a portion of the
benefits payable with respect to the
participant under the plan are a
subject of such action,
and includes with the notice evidence of the
pendency of the action, the plan administrator
shall, during the segregation period,
separately account for 50 percent of such
benefits. Any amounts so separately accounted
for may not be distributed by the plan during
the segregation period.
``(ii) Segregation period.--For purposes of
clause (i), the term `segregation period' means
the period--
``(I) beginning on the date of the
receipt of the notice, and
``(II) ending as of the close of
the 90-day period beginning on such
date (or, if earlier, the date of
receipt of a domestic relations order
with respect to the participant and the
spouse or former spouse or the date the
action is no longer pending).
The segregation period shall be extended for 1
or more additional periods described in the
preceding sentence upon notice by the spouse or
former spouse that the action described in
clause (i) is still pending as of the close of
any prior segregation period.''.
(b) Penalty for Failure To Provide Information Regarding Alternate
Payees.--Section 502(c) of the Employee Retirement Income Security Act
of 1974 (29 U.S.C. 1132(c)) is amended by redesignating paragraphs (8)
and (9) as paragraphs (9) and (10), respectively, and by inserting
after paragraph (7) the following new paragraph:
``(8) Failure to provide information regarding alternate
payees.--The Secretary may assess a civil penalty against any
plan administrator of up to $100 a day from the date of the
plan administrator's failure or refusal to provide the
information the plan administrator is required to provide under
regulations under this Act to prospective alternative payees
under a domestic relations order under section 206(d)(3) or to
the Secretary or any representative of a prospective
alternative payee in connection with such an order.''.
(c) Allocation of Plan Expenses in Complying With Domestic
Relations Orders.--
(1) Amendment of 1986 code.--Section 414(p), as amended by
subsection (a), is amended by redesignating paragraph (14) as
paragraph (15) and by inserting after paragraph (13) the
following new paragraph:
``(14) Allocation of expenses.--Any expenses incurred by a
plan with respect to compliance with the requirements of this
subsection shall not be allocated to an individual participant
but rather shall be allocated among all participants on the
basis of the relative value of each participant's share of the
assets of the plan, on the basis of a flat amount per
participant, or on any other reasonable basis provided for
under the plan.''.
(2) Amendment of employee retirement income security act of
1974.--Section 206(d)(3) of the Employee Retirement Income
Security Act of 1974 (29 U.S.C. 1056(d)(3)), as amended by
subsection (a), is amended by redesignating subparagraph (O) as
subparagraph (P) and by inserting after subparagraph (N) the
following new subparagraph:
``(O) Allocation of expenses.--Any expenses
incurred by a plan with respect to compliance with the
requirements of this paragraph shall not be allocated
to an individual participant but rather shall be
allocated among all participants on the basis of the
relative value of each participant's share of the
assets of the plan, on the basis of a flat amount per
participant, or on any other reasonable basis provided
for under the plan.''.
(d) Effective Date.--The amendments made by this section shall
apply to plan years beginning after December 31, 2013.
SEC. 502. ELIMINATION OF CURRENT CONNECTION REQUIREMENT UNDER RAILROAD
RETIREMENT ACT FOR CERTAIN SURVIVORS.
(a) In General.--Section 2(d)(1) of the Railroad Retirement Act of
1974 (45 U.S.C. 231a(d)(1)), in the matter preceding paragraph (i), is
amended by inserting ``, except with respect to survivors described in
paragraph (i), (ii), or (v),'' after ``December 31, 1995) and''.
(b) Effective Dates.--
(1) In general.--The amendment made by subsection (a) shall
take effect on the date of enactment of this Act.
(2) Retroactive application to certain survivors.--If a
survivor of a deceased employee would be entitled to an annuity
by reason of the amendment made by subsection (a) but for the
fact that the employee died before the date of the enactment of
this Act, the survivor shall be entitled to such an annuity but
only with respect to annuity payments for months beginning on
or after such date. Appropriate adjustments shall be made in
annuity payments of other individuals to reflect any annuity
payable by reason of this paragraph.
SEC. 503. PERMITTING DIVORCED SPOUSES AND WIDOWS AND WIDOWERS TO
REMARRY AFTER TURNING 60 WITHOUT A PENALTY UNDER RAILROAD
RETIREMENT ACT.
(a) In General.--
(1) Divorced spouse.--Section 2(c)(4) of the Railroad
Retirement Act of 1974 (45 U.S.C. 231a(c)(4)) is amended by
adding at the end the following new sentence: ``For purposes of
paragraph (ii)(B), if a divorced wife marries after attaining
age 60, such marriage shall be deemed not to have occurred.''.
(2) Widows and widowers.--Section 2(d)(1)(v) of the
Railroad Retirement Act of 1974 (45 U.S.C. 231a(d)(1)(v)) is
amended by adding at the end the following new sentence: ``For
purposes of this paragraph, if a widow marries after attaining
age 60, such marriage shall be deemed not to have occurred.''.
(b) Effective Dates.--
(1) In general.--The amendments made by this section shall
take effect on the date of enactment of this Act.
(2) Retroactive application.--If a divorced wife, widow, or
widower would be entitled to an annuity by reason of the
amendments made by this section but for the fact the individual
was married before the date of the enactment of this Act, the
individual shall be entitled to such an annuity but only with
respect to annuity payments for months beginning on or after
such date. Appropriate adjustments shall be made in annuity
payments of other individuals to reflect any annuity payable by
reason of this paragraph.
SEC. 504. REPEAL OF JURISDICTIONAL REQUIREMENT FOR COURT TO TREAT
MILITARY RETIREMENT PAY AS PROPERTY OF THE MILITARY
MEMBER AND SPOUSE.
(a) In General.--Section 1408(c) of title 10, United States Code,
is amended by striking paragraph (4).
(b) Effective Date.--The amendment made by this section shall apply
to final decrees issued on or after the date of the enactment of this
Act.
SEC. 505. MODIFICATION OF REDUCTIONS IN DISPOSABLE RETIRED PAY FOR
PAYMENTS IN COMPLIANCE WITH COURT ORDERS.
(a) In General.--Section 1408(d) of title 10, United States Code,
is amended by adding at the end the following new paragraph:
``(8) Notwithstanding subsection (a)(4) or (e)(1), if the
disposable retired pay of a member is reduced under
subparagraph (B) of subsection (a)(4) as a result of a waiver
required to receive compensation under title 38, or is reduced
under subparagraph (C) of subsection (a)(4), the Secretary
concerned shall pay (subject to any other limitation under this
section) to the spouse or former spouse the lesser of--
``(A) the amount payable under the final court
order from the disposable retired pay (determined
without regard to such reductions), or
``(B) 100 percent of the disposable retired pay
(determined after such reductions).''.
(b) Effective Date.--The amendment made by this section shall apply
to payments of disposable retired pay attributable to periods beginning
on or after the date of the enactment of this Act with respect to final
court orders issued on, before, or after such date.
SEC. 506. SURVIVOR ANNUITIES FOR WIDOWS, WIDOWERS, AND FORMER SPOUSES
OF FEDERAL EMPLOYEES WHO DIE BEFORE ATTAINING AGE FOR
DEFERRED ANNUITY UNDER CIVIL SERVICE RETIREMENT SYSTEM.
(a) Definition.--Section 8341(a) of title 5, United States Code, is
amended--
(1) in paragraph (1), by striking ``employee or Member''
and inserting ``employee, Member, or annuitant, or of a former
employee or Member,''; and
(2) in paragraph (2), by striking ``employee or Member''
and inserting ``employee, Member, or annuitant, or of a former
employee or Member,''.
(b) Benefits for Widow, Widower, or Former Spouse.--
(1) In general.--Section 8341 of title 5, United States
Code, is amended by adding at the end the following:
``(l) If a former employee heretofore or hereafter separated from
the service with title to deferred annuity from the Fund hereafter dies
before having established a valid claim for annuity and is survived by
a widow or widower to whom married at the date of separation, the widow
or widower--
``(1) is entitled to an annuity equal to 55 percent of the
deferred annuity of the former employee commencing on the day
after the former employee dies and terminating on the last day
of the month before the widow or widower dies or remarries
before becoming 55 years of age; or
``(2) may elect to receive the lump-sum credit instead of
annuity if the widow or widower is the individual who would be
entitled to the lump-sum credit and files application therefor
with the Office before the award of the annuity.
Notwithstanding the preceding sentence, an annuity payable
under this subsection to the widow or widower of a former
employee may not exceed the difference between--
``(A) the annuity which would otherwise be payable
to such widow or widower under this subsection, and
``(B) the amount of the survivor annuity payable to
any former spouse of such former employee under
subsection (h) of this section.''.
(2) Technical and conforming amendments.--Section 8339(j)
of title 5, United States Code, is amended--
(A) in paragraph (3)(A)(ii), by striking ``and
(h)'' and inserting ``(h), and (l)''; and
(B) in paragraph (4), by striking ``and (h)'' and
inserting ``(h), and (l)''.
(c) Benefits for Former Spouse.--Section 8341(h) of title 5, United
States Code, is amended--
(1) in paragraph (1), by adding after the first sentence
``Subject to paragraphs (2) through (5) of this subsection, a
former spouse of a former employee who dies after having
separated from the service with title to a deferred annuity
under section 8338(a) but before having established a valid
claim for annuity is entitled to a survivor annuity under this
subsection, if and to the extent expressly provided for in an
election under section 8339(j)(3) of this title, or in the
terms of any decree of divorce or annulment or any court order
or court-approved property settlement agreement incident to
such decree.''; and
(2) in paragraph (2)--
(A) in subparagraph (A)(ii), by striking ``or
annuitant,'' and inserting ``annuitant, or former
employee''; and
(B) in subparagraph (B)--
(i) in clause (ii), by striking ``or'' at
the end;
(ii) in clause (iii), by striking the
period and inserting ``; or''; and
(iii) by adding at the end the following:
``(iv) under subparagraph (A) of subsection
(l) of this section in the case of a widow or
widower, if the deceased was a former employee
described in the first sentence of such
subsection.''.
(d) Protection of Survivor Benefit Rights.--Section 8339(j)(3) of
title 5, United States Code, is amended by inserting at the end the
following: ``The Office shall provide by regulation for the application
of this subsection to the widow, widower, or surviving former spouse of
a former employee who dies after having separated from the service with
title to a deferred annuity under section 8338(a) but before having
established a valid claim for annuity.''.
(e) Effective Date.--The amendments made by this section shall take
effect on the date of the enactment of this Act and shall apply only in
the case of a former employee who dies on or after such date.
SEC. 507. COURT ORDERS RELATING TO FEDERAL RETIREMENT BENEFITS FOR
FORMER SPOUSES OF FEDERAL EMPLOYEES.
(a) Civil Service Retirement System.--Section 8345(j) of title 5,
United States Code, is amended--
(1) by redesignating paragraph (3) as paragraph (4); and
(2) by inserting after paragraph (2) the following:
``(3)(A) A court decree, court order, property settlement,
or similar process referred to under paragraph (1)(A) shall be
treated as meeting the requirements of that paragraph if it
requires that payment of benefits be made to the former spouse
of the employee, Member, or annuitant--
``(i) in the case of any payment before the
employee, Member, or annuitant has separated from
service, on or after the date on which the employee,
Member, or annuitant attains (or would have attained)
the earliest retirement age,
``(ii) as if the employee, Member, or annuitant had
retired on the date on which such payment is to begin
under such order (but taking into account only the
present value of the benefits actually accrued and not
taking into account the present value of any employer
subsidy for early retirement), and
``(iii) in any form in which such benefits may be
paid under this chapter to the employee, Member, or
annuitant (other than in the form of a joint and
survivor annuity with respect to the former spouse and
his or her subsequent spouse).
For purposes of clause (ii), the interest rate assumption used
in determining the present value shall be the interest rate
specified under this subchapter or, if no rate is specified, 5
percent.
``(B) In this paragraph, the term `earliest retirement age'
means the earlier of--
``(i) the date on which the employee, Member, or
annuitant is entitled to a distribution under this
subchapter, or
``(ii) the later of--
``(I) the date the employee, Member, or
annuitant attains age 50, or
``(II) the earliest date on which the
employee, Member, or annuitant could begin
receiving benefits under this chapter if the
employee, Member, or annuitant separated from
service.''.
(b) Federal Employees Retirement System.--Section 8467 of title 5,
United States Code, is amended--
(1) by redesignating subsection (c) as subsection (d); and
(2) by inserting after subsection (b) the following:
``(c)(1) A court decree, court order, property settlement, or
similar process referred to under subsection (a)(1) shall be treated as
meeting the requirements of that subsection if it requires that payment
of benefits be made to the former spouse of the employee, Member, or
annuitant--
``(A) in the case of any payment before the employee,
Member, or annuitant has separated from service, on or after
the date on which the employee, Member, or annuitant attains
(or would have attained) the earliest retirement age,
``(B) as if the employee, Member, or annuitant had retired
on the date on which such payment is to begin under such order
(but taking into account only the present value of the benefits
actually accrued and not taking into account the present value
of any employer subsidy for early retirement), and
``(C) in any form in which such benefits may be paid under
this chapter to the employee, Member, or annuitant (other than
in the form of a joint and survivor annuity with respect to the
alternate payee and his or her subsequent spouse).
For purposes of subparagraph (B), the interest rate assumption used in
determining the present value shall be the interest rate specified
under this chapter or, if no rate is specified, 5 percent.
``(2) In this subsection, the term `earliest retirement age' means
the earlier of--
``(A) the date on which the employee, Member, or annuitant
is entitled to a distribution under this chapter, or
``(B) the later of--
``(i) the date the employee, Member, or annuitant
attains age 50, or
``(ii) the earliest date on which the employee,
Member, or annuitant could begin receiving benefits
under this chapter if the employee, Member, or
annuitant separated from service.''.
(c) Effective Date and Application.--The amendments made by this
section shall take effect on the date of the enactment of this Act and
apply to any court decree, court order, property settlement, or similar
process issued or approved before, on, or after that date.
TITLE VI--OFFICE OF PARTICIPANT AND PLAN SPONSOR ADVOCATE
SEC. 601. OFFICE OF PARTICIPANT AND PLAN SPONSOR ADVOCATE.
(a) In General.--Section 7803 is amended by adding at the end the
following:
``(e) Participant and Plan Sponsor Advocate.--
``(1) In general.--There is established in the Internal
Revenue Service an office to be known as the `Office of the
Participant and Plan Sponsor Advocate'.
``(2) Participant and plan sponsor advocate.--
``(A) In general.--The Office of the Participant
and Plan Sponsor Advocate shall be under the
supervision and direction of an official to be known as
the `Participant and Plan Sponsor Advocate'. The
Commissioner shall select the Participant and Plan
Sponsor Advocate without regard to the provisions of
title 5, United States Code, relating to appointments
in the competitive service or Senior Executive Service.
``(B) Duties.--The Participant and Plan Sponsor
Advocate shall--
``(i) act as a liaison between the Internal
Revenue Service, sponsors of sponsors of
qualified retirement plans (as defined in
section 4974(c)), and participants in such
plans;
``(ii) advocate for the full attainment of
the rights of such plan sponsors and
participants;
``(iii) assist pension plan sponsors and
participants in resolving disputes with the
Internal Revenue Service;
``(iv) identify areas in which participants
and plan sponsors have persistent problems in
dealings with the Internal Revenue Service;
``(v) to the extent possible, propose
changes in the administrative practices of the
Internal Revenue Service to mitigate problems;
``(vi) identify potential legislative
changes which may be appropriate to mitigate
problems; and
``(vii) refer instances of fraud, waste,
and abuse, and violations of law to the Office
of the Treasury Inspector General for Tax
Administration.
``(C) Removal.--If the Participant and Plan Sponsor
Advocate is removed from office or is transferred to
another position or location within the Internal
Revenue Service, the Commissioner shall communicate in
writing the reasons for any such removal or transfer to
Congress not less than 30 days before the removal or
transfer. Nothing in this paragraph shall prohibit a
personnel action otherwise authorized by law, other
than transfer or removal.
``(D) Compensation.--The annual rate of basic pay
for the Participant and Plan Sponsor Advocate shall be
the same rate as the highest rate of basic pay
established for the Senior Executive Service under
section 5382 of title 5, United States Code, or, if the
Commissioner so determines, at a rate fixed under
section 9503 of such title.
``(3) Annual report.--
``(A) In general.--Not later than December 31 of
each calendar year, the Participant and Plan Sponsor
Advocate shall report to the Health, Education, Labor,
and Pensions Committee of the Senate, the Committee on
Finance of the Senate, the Committee on Education and
the Workforce of the House of Representatives, and the
Committee on Ways and Means of the House of
Representatives on the activities of the Office of the
Participant and Plan Sponsor Advocate during the fiscal
year ending during such calendar year.
``(B) Content.--Each report submitted under
subparagraph (A) shall--
``(i) summarize the assistance requests
received from participants and plan sponsors
and describe the activities, and evaluate the
effectiveness, of the Participant and Plan
Sponsor Advocate during the preceding year;
``(ii) identify significant problems the
Participant and Plan Sponsor Advocate has
identified;
``(iii) include specific legislative and
regulatory changes to address the problems; and
``(iv) identify any actions taken to
correct problems identified in any previous
report.
``(C) Concurrent submission.--The Participant and
Plan Sponsor Advocate shall submit a copy of each
report to the Secretary of the Treasury, the
Commissioner of Internal Revenue, and any other
appropriate official at the same time such report is
submitted to the committees of Congress under
subparagraph (A).''.
(b) Effective Date.--The amendment made by this section shall take
effect on January 1, 2014.
<all>
Introduced in House
Introduced in House
Referred to the Committee on Ways and Means, and in addition to the Committees on Education and the Workforce, Armed Services, Oversight and Government Reform, and Transportation and Infrastructure, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
Referred to the Committee on Ways and Means, and in addition to the Committees on Education and the Workforce, Armed Services, Oversight and Government Reform, and Transportation and Infrastructure, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
Referred to the Committee on Ways and Means, and in addition to the Committees on Education and the Workforce, Armed Services, Oversight and Government Reform, and Transportation and Infrastructure, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
Referred to the Committee on Ways and Means, and in addition to the Committees on Education and the Workforce, Armed Services, Oversight and Government Reform, and Transportation and Infrastructure, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
Referred to the Committee on Ways and Means, and in addition to the Committees on Education and the Workforce, Armed Services, Oversight and Government Reform, and Transportation and Infrastructure, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
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Sponsor introductory remarks on measure. (CR E732-733)
Referred to the Subcommittee on Railroads, Pipelines, and Hazardous Materials.
Referred to the Subcommittee on Health, Employment, Labor, and Pensions.
Referred to the Subcommittee on Military Personnel.