SAFE Retirement Act of 2013

Summary: Secure Annuities for Employee Retirement Act of 2013 or the SAFE Retirement Act of 2013 - Title I: Public Pension Reform - Amends the Internal Revenue Code to provide for annuity accumulation retirement plans for state and local government employees beginning after 2014.   Directs the Comptroller General (GOA) to conduct a study of federal employee pension plans.  Title II: Private Pension Reform - Subtitle A: Enhanced Pension Plan Coverage - Amends the Internal Revenue Code, with respect to 401(k) plans, to allow employers who do not maintain a qualified retirement plan to establish a starter 401(k) deferral-only arrangement. Allows contributions to such arrangements of up to $8,000 per year and catch-up contributions for individuals age 50 and older.  Increases from $500 to $5,000 the cap on the tax credit for the pension start-up costs of small employers.  Allows employers to replace certain pension plans with safe harbor 401(k) plans.  Eliminates the 10% cap on contributions to automatic 401(k) plans. Revises rules relating to the election of safe harbor 401(k) status and multiple employer defined contributions.  Subtitle B: Pension Plan and Retirement Savings Simplification - Revises rules relating to pension plan amendments, discrimination testing, restrictions on hardship distributions, rollovers, forfeitures, notice requirements for new plan participants, and plan terminations.   Terminates rules relating to top-heavy pension plans (plans that have a higher concentration of accrued benefits for key employees) for plan years beginning after December 31, 2013.  Allows a new tax credit for contributions to a secure deferral arrangement.  Subtitle C: Longevity Reforms - Modifies minimum distribution requirements to allow 25% of the account balance for the purchase of a deferred joint and survivor life annuity. Requires the annuity to be purchased on or before the date of the plan participant's initial required minimum distributions. Prohibits any deferral period from extending beyond the date the participant attains age 85.   Requires the Secretary of the Treasury to update or provide new mortality tables for purposes of determining a plan participant's minimum required distribution. Requires a new update every five years.   Allows plan participants to convert their required minimum distribution into a Roth individual retirement account (Roth IRA).   Allows a plan sponsor to transfer responsibility for the administration of the joint and survivor annuity rules to the annuity provider.   Requires the Secretary to modify the Employee Plans Compliance Resolution System to allow for the correction of loan errors and inadvertent errors in retirement plans, IRAs, and required minimum distribution requirements. Subtitle D: Modifications to the Employee Retirement Income Security Act of 1974 - Amends the Employee Retirement and Income Security Act of 1974 (ERISA) and the Internal Revenue Code to: (1) authorize all documents required or permitted to be furnished to a plan participant to be furnished in electronic form unless the plan participant has elected to receive paper documents; (2) modify the deadline for summary plan description updates; (3) make the annual audit requirement applicable to 100 participants who have an accrued benefit under the plan (currently, 100 participants); and (4) deem the fiduciary duty in selecting an annuity provider and annuity contract in connection with the payment of benefits under a defined contribution plan satisfied to the extent that the contracts are guaranteed by a state guaranty association. Title III: Individual Retirement Investment Advice Reform - Transfers authority to the Secretary of the Treasury for the enforcement of prohibited transaction rules for individual retirement accounts (IRAs). Requires the Secretary to consult with the Securities and Exchange Commission (SEC) in prescribing rules relating to the professional standards of care owed by brokers and investment advisors to holders of IRA accounts and annuities. Provides for the joint issuance of regulations for prohibited transaction rules applicable to employer-sponsored retirement plans by the Secretary of the Treasury and the Secretary of Labor. 

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.

 Subtitle D--Modifications to the Employee Retirement Income Security 
                              Act of 1974

SEC. 241. ELECTRONIC COMMUNICATION OF PENSION PLAN INFORMATION.

    (a) Amendment to Employee Retirement Income Security Act of 1974.--
Part 1 of subtitle B of title 1 of the Employee Retirement Income 
Security Act of 1974 (29 U.S.C. 1021 et seq.) is amended by adding at 
the end the following new section:

``SEC. 112. ELECTRONIC COMMUNICATION OF PENSION PLAN INFORMATION.

    ``Any document that is required or permitted under this title to be 
furnished to a plan participant, beneficiary, or other individual with 
respect to a pension plan may be furnished in electronic form if--
            ``(1) the system for furnishing such a document--
                    ``(A) is designed to result in access to the 
                document by the participant, beneficiary, or other 
                specified individual through electronic means, 
                including--
                            ``(i) the direct delivery of material to an 
                        electronic address of such participant, 
                        beneficiary, or individual,
                            ``(ii) the posting of material to a website 
                        or other internet or electronic-based 
                        information repository to which access has been 
                        granted to such participant, beneficiary, or 
                        individual, but only if proper notice of the 
                        posting has been provided (which may include 
                        notice furnished by other electronic means if 
                        the content of the notice conveys the need to 
                        take action to access the posted material), and
                            ``(iii) other electronic means reasonably 
                        calculated to ensure actual receipt of the 
                        material by such participant, beneficiary, or 
                        individual, and
                    ``(B) protects the confidentiality of personal 
                information relating to such participant's, 
                beneficiary's, or individual's accounts and benefits;
            ``(2) the participant or beneficiary has not elected to 
        receive a paper version of such document;
            ``(3) notice is provided to each participant or 
        beneficiary, in electronic or non-electronic form, before a 
        document is furnished electronically, that apprises the 
        individual of the right to elect to receive a paper version of 
        such document; and
            ``(4) the electronically furnished document--
                    ``(A) is prepared and furnished in a manner that is 
                consistent with the style, format, and content 
                requirements applicable to the particular document; and
                    ``(B) includes a notice that apprises the 
                individual of the significance of the document when it 
                is not otherwise reasonably evident as transmitted.
For purposes of this section, the term `document' includes reports, 
statements, notices, notifications, and other information.''.
    (b) Amendment to Internal Revenue Code of 1986.--Section 414 of the 
Internal Revenue Code of 1986 is amended by adding at the end the 
following new subsection:
    ``(y) Electronic Communication of Pension Plan Information.--Any 
document that is required or permitted under this title to be furnished 
to a plan participant, beneficiary, or other individual with respect to 
a pension plan may be furnished in electronic form if--
            ``(1) the system for furnishing such a document--
                    ``(A) is designed to result in access to the 
                document by the participant, beneficiary, or other 
                specified individual through electronic means, 
                including--
                            ``(i) the direct delivery of material to an 
                        electronic address of such participant, 
                        beneficiary, or individual,
                            ``(ii) the posting of material to a website 
                        or other internet or electronic-based 
                        information repository to which access has been 
                        granted to such participant, beneficiary, or 
                        individual, but only if proper notice of the 
                        posting has been provided (which may include 
                        notice furnished by other electronic means if 
                        the content of the notice conveys the need to 
                        take action to access the posted material), and
                            ``(iii) other electronic means reasonably 
                        calculated to ensure actual receipt of the 
                        material by such participant, beneficiary, or 
                        individual, and
                    ``(B) protects the confidentiality of personal 
                information relating to such participant's, 
                beneficiary's, or individual's accounts and benefits;
            ``(2) the participant or beneficiary has not elected to 
        receive a paper version of such document;
            ``(3) notice is provided to each participant or 
        beneficiary, in electronic or non-electronic form, before a 
        document is furnished electronically, that apprises the 
        individual of the right to elect to receive a paper version of 
        such document; and
            ``(4) the electronically furnished document--
                    ``(A) is prepared and furnished in a manner that is 
                consistent with the style, format, and content 
                requirements applicable to the particular document; and
                    ``(B) includes a notice that apprises the 
                individual of the significance of the document when it 
                is not otherwise reasonably evident as transmitted.
For purposes of this subsection, the term `document' includes reports, 
statements, notices, notifications, and other information.''.
    (c) Effective Date.--The amendments made by this section shall 
apply with respect to documents furnished with respect to plan years 
beginning after December 31, 2013.

SEC. 242. MODIFICATION OF DEADLINES FOR SUMMARY PLAN DESCRIPTION 
              UPDATES.

    (a) In General.--Paragraph (1) of section 104(b) of the Employee 
Retirement Income Security Act of 1974 (29 U.S.C. 1024(b)(1)) is 
amended to read as follows:
    ``(1)(A) The administrator shall furnish to each participant, and 
each beneficiary receiving benefits under the plan, a copy of the 
summary plan description, and all modifications and changes referred to 
in section 102(a)--
            ``(i) within 90 days after becoming a participant, or in 
        the case of a beneficiary, within 90 days after first receiving 
        benefits, or
            ``(ii) if later, within 120 days after the plan becomes 
        subject to this part.
    ``(B)(i) Except as provided in clause (ii), the administrator shall 
furnish to each participant, and each beneficiary receiving benefits 
under the plan, every fifth year after the plan becomes subject to this 
part an updated summary plan description described in section 102 which 
integrates all plan amendments made within such five-year period, 
except that in a case where no amendments have been made to a plan 
during such five-year period, this sentence shall not apply. 
Notwithstanding the foregoing, the administrator shall furnish to each 
participant, and to each beneficiary receiving benefits under the plan, 
the summary plan description described in section 102 every tenth year 
after the plan becomes subject to this part.
    ``(ii) In the case of a pension plan, the administrator shall 
furnish to each participant, and each beneficiary receiving benefits 
under the plan, 210 days after the end of each remedial plan review 
period, an updated summary plan description described in section 102 
which integrates all plan amendments made during such period, except 
that if no amendments have been made to a plan during such period, an 
updated summary plan description shall be furnished not later than 210 
days after the end of the subsequent remedial plan review period 
(without regard to whether plan amendments were made during such 
subsequent period).
    ``(C)(i) If there is a modification or change described in section 
102(a) (other than a material reduction in covered services or benefits 
provided in the case of a group health plan (as defined in section 
733(a)(1))), a summary description of such modification or change shall 
be furnished not later than 210 days after the end of the plan year in 
which the change is adopted to each participant, and to each 
beneficiary who is receiving benefits under the plan.
    ``(ii) For purposes of clause (i), any amendment to a pension plan 
adopted during a remedial plan review period shall be treated as 
adopted in the plan year in which the amendment took effect.
    ``(D) If there is a modification or change described in section 
102(a) that is a material reduction in covered services or benefits 
provided under a group health plan (as defined in section 733(a)(1)), a 
summary description of such modification or change shall be furnished 
to participants and beneficiaries not later than 60 days after the date 
of the adoption of the modification or change. In the alternative, the 
plan sponsors may provide such description at regular intervals of not 
more than 90 days.
    ``(E) In this paragraph, the term `remedial plan review period' 
means, with respect to any pension plan, the period established by the 
Secretary of the Treasury under the authority of subsection (b) of 
section 401 of the Internal Revenue Code of 1986 as the regular cycle 
of review by the Secretary of the Treasury for determining whether the 
pension plan continues to meet the requirements of such Code for 
treatment as a qualified plan under subsection (a) of such section 
401.''.
    (b) Effective Date.--The amendments made by this section shall 
apply with respect to summary plan descriptions furnished under section 
104(b) of the Employee Retirement Income Security Act of 1974 (29 
U.S.C. 1024(b)), and modifications or changes described in section 
102(a) of such Act (29 U.S.C. 1022(a)), with respect to plan years 
beginning after December 31, 2013.

SEC. 243. MODIFICATION OF SMALL PLAN SIMPLIFIED REPORTING REQUIREMENTS.

    (a) In General.--Section 104(a)(2) of the Employee Retirement 
Income Security Act of 1974, as amended by section 201(c) of this Act, 
is amended by striking ``100 participants'' and inserting ``100 
participants who have an accrued benefit under the plan''.
    (b) Effective Date.--The amendments made by this section shall 
apply to plan years beginning after December 31, 2013.

SEC. 244. FIDUCIARY REQUIREMENT REGARDING SELECTION OF ANNUITY PROVIDER 
              AND ANNUITY CONTRACT.

    (a) In General.--Section 404 of the Employee Retirement Income 
Security Act of 1974 (29 U.S.C. 1104) is amended by adding at the end 
the following:
    ``(e) Ability of Annuity Providers To Make Payments.--In the case 
of the selection of an annuity provider and annuity contract in 
connection with the payment of benefits under a defined contribution 
plan, the fiduciary requirement under subsection (a)(1)(B) is deemed 
satisfied with respect to determining the ability of the annuity 
provider to make all payments due under the contract to the extent that 
such payments are guaranteed by a State guaranty association under 
applicable State law in effect as of the date of issuance of the 
contract.''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply to annuity contracts purchased after the date of enactment of 
this Act.

       TITLE III--INDIVIDUAL RETIREMENT INVESTMENT ADVICE REFORM

SEC. 301. TRANSFER TO SECRETARY OF THE TREASURY OF AUTHORITIES 
              REGARDING INDIVIDUAL RETIREMENT PLANS.

    (a) In General.--Section 102 of Reorganization Plan No. 4 of 1978 
(ratified and affirmed as law by Public Law 98-532 (98 Stat. 2705)) is 
amended--
            (1) in subsection (a)--
                    (A) by striking ``and'' at the end of clause (ii),
                    (B) by striking ``and'' at the end of clause (iii), 
                and
                    (C) by inserting ``(iv) regulations, rulings, 
                opinions, and exemptions relating to individual 
                retirement accounts described in section 408(a) of the 
                Code and individual retirement annuities described in 
                section 408(b) of the Code, including simplified 
                employee pensions under section 408(k) of the Code and 
                simple retirement accounts under section 408(p) of the 
                Code; and (v) regulations described in section 103(b) 
                of this Plan; and'' at the end of clause (iii) (as 
                amended by subparagraph (B)), and
            (2) by adding at the end the following new flush sentence:
``The Secretary of the Treasury shall consult with the Securities and 
Exchange Commission in prescribing regulations, rulings, opinions, and 
exemptions under subsection (a)(iv) that provide guidance of general 
application as to the professional standards of care (whether involving 
fiduciary, suitability, or other standards) owed by brokers and 
investment advisors to owners and account holders of accounts and 
annuities described in such subsection.''.
    (b) Joint Authority.--Section 103 of such Plan is amended--
            (1) by striking ``In the case of'' and inserting:
    ``(a) In the case of''; and
            (2) by adding at the end:
    ``(b)(1) The Secretary of the Treasury and the Secretary of Labor 
shall have joint authority to issue regulations described in this 
subsection, and any such regulations shall be issued jointly by such 
Secretaries.
    ``(2) A regulation is described in this subsection if (i) the 
regulation is not described in clause (i), (ii), (iii), or (iv) of 
section 102(a) of this Plan and (ii) defines or interprets a term or 
requirement that is included in section 4975 of the Code or section 406 
of ERISA. The determination of whether any regulation is described in 
this subsection shall be made without regard to whether any such term 
or requirement is also used or defined in any other provision of the 
Code or ERISA.''.
    (c) Effective Date.--
            (1) In general.--The amendments made by this section shall 
        apply to regulations, rulings, opinions, and exemptions which 
        have not been finalized as of July 8, 2013.
            (2) Transition.--Any final regulation, ruling, opinion, or 
        exemption described in section 102(a)(iv) or 103(b) of 
        Reorganization Plan No. 4 of 1978 (as added by the amendments 
        made by this section) which was issued by the Secretary of 
        Labor before July 9, 2013, shall apply until such time as such 
        regulation, ruling, opinion, or exemption is revoked or 
        modified pursuant to such amendments.