II 

115TH CONGRESS 

1ST SESSION S. 1383 

To amend the Internal Revenue Code of 1986 to modify safe harbor requirements applicable to automatic contribution arrangements, and for other 

purposes. 

IN THE SENATE OF THE UNITED STATES 

JUNE 20, 2017 

Ms. COLLINS (for herself and Mr. NELSON) introduced the following bill; 

which was read twice and referred to the Committee on Finance 

A BILL 

To amend the Internal Revenue Code of 1986 to modify 

safe harbor requirements applicable to automatic contribution arrangements, and for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Retirement Security 

5 Act of 2017’’. 

6 SEC. 2. MULTIPLE EMPLOYER PLANS. 

7 (a) QUALIFICATION REQUIREMENTS.— 


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1 (1) IN GENERAL.—Section 413 of the Internal 

2 Revenue Code of 1986 is amended by adding at the 

3 end the following new subsection: 

4 ‘‘(e) APPLICATION OF QUALIFICATION REQUIRE5 MENTS FOR CERTAIN MULTIPLE EMPLOYER PLANS WITH

6 POOLED PLAN PROVIDERS.— 

7 ‘‘(1) IN GENERAL.—Except as provided in para8 graph (2), if a defined contribution plan to which 

9 subsection (c) applies— 

10 ‘‘(A) is sponsored by employers all of 

11 which have both a common interest other than 

12 having adopted the plan and control of the 

13 plan, or 

14 ‘‘(B) in the case of a plan not described in 

15 subparagraph (A), has a pooled plan provider, 

16 then the plan shall not be treated as failing to meet 

17 the requirements under this title applicable to a plan 

18 described in section 401(a) or to a plan that consists 

19 of individual retirement accounts described in sec20 tion 408 (including by reason of subsection (c) 

21 thereof), whichever is applicable, merely because one 

22 or more employers of employees covered by the plan 

23 fail to take such actions as are required of such em24 ployers for the plan to meet such requirements. 

25 ‘‘(2) LIMITATIONS.— 


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1 ‘‘(A) IN GENERAL.—Paragraph (1) shall 

2 not apply to any plan unless the terms of the 

3 plan provide that in cases of employers failing 

4 to take the actions described in paragraph 

5 (1)— 

6 ‘‘(i) the assets of the plan attributable 

7 to employees of the employer will be trans8 ferred to a plan maintained only by the 

9 employer (or its successor), to an eligible 

10 retirement plan as defined in section 

11 402(c)(8)(B) for each individual whose ac12 count is transferred, or to any other ar13 rangement that the Secretary determines is 

14 appropriate, unless the Secretary deter15 mines it is in the best interests of such em16 ployees to retain the assets in the plan, 

17 and 

18 ‘‘(ii) the employer described in clause 

19 (i) (and not the plan with respect to which 

20 the failure occurred or any other partici21 pating employer in such plan) shall, except 

22 to the extent provided by the Secretary, be 

23 liable for any liabilities with respect to 

24 such plan attributable to employees of the 

25 employer. 


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1 ‘‘(B) FAILURES BY POOLED PLAN PRO2 VIDERS.—If the pooled plan provider of a plan 

3 described in paragraph (1)(B) does not perform 

4 substantially all of the administrative duties 

5 which are required of the provider under para6 graph (3)(A)(i) for any plan year, the Sec7 retary, in the Secretary’s own discretion, may 

8 provide that the determination as to whether 

9 the plan meets the requirements under this title 

10 applicable to a plan described in section 401(a) 

11 or to a plan that consists of individual retire12 ment accounts described in section 408 (includ13 ing by reason of subsection (c) thereof), which14 ever is applicable, shall be made in the same 

15 manner as would be made without regard to 

16 paragraph (1). 

17 ‘‘(3) POOLED PLAN PROVIDER.—For purposes 

18 of this subsection— 

19 ‘‘(A) IN GENERAL.—The term ‘pooled plan 

20 provider’ means, with respect to any plan, a 

21 person who— 

22 ‘‘(i) is designated by the terms of the 

23 plan as a named fiduciary (as defined in 

24 section 402(a)(2) of the Employee Retire25 ment Income Security Act of 1974), as the 


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1 plan administrator, and as the person re2 sponsible to perform all administrative du3 ties (including conducting proper testing 

4 with respect to the plan and employees of 

5 each participating employer) which are 

6 reasonably necessary to ensure that— 

7 ‘‘(I) the plan meets any require8 ment applicable under the Employee 

9 Retirement Income Security Act of 

10 1974 or this title to a plan described 

11 in section 401(a) or to a plan that 

12 consists of individual retirement ac13 counts described in section 408 (in14 cluding by reason of subsection (c) 

15 thereof), whichever is applicable, and 

16 ‘‘(II) each participating employer 

17 takes such actions as the Secretary or 

18 such person determines are necessary 

19 for the plan to meet the requirements 

20 described in subclause (I), including 

21 providing to such person any disclo22 sures or other information which the 

23 Secretary may require or which such 

24 person otherwise determines is nec25 essary to administer the plan or to 


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1 allow the plan to meet such require2 ments, 

3 ‘‘(ii) registers as a pooled plan pro4 vider with the Secretary, and provides such 

5 other information to the Secretary as the 

6 Secretary may require, before beginning 

7 operations as a pooled plan provider, 

8 ‘‘(iii) acknowledges in writing that 

9 such person is a named fiduciary (within 

10 the meaning of section 402(a)(2) of the 

11 Employee Retirement Income Security Act 

12 of 1974), and the plan administrator, with 

13 respect to the plan, and 

14 ‘‘(iv) is responsible for ensuring that 

15 all persons who handle assets of, or who 

16 are fiduciaries of, the plan are bonded in 

17 accordance with section 412 of the Em18 ployee Retirement Income Security Act of 

19 1974. 

20 ‘‘(B) AUDITS, EXAMINATIONS AND INVES21 TIGATIONS.—The Secretary may perform au22 dits, examinations, and investigations of pooled 

23 plan providers as may be necessary to enforce 

24 and carry out the purposes of this subsection. 

25 ‘‘(4) GUIDANCE.— 


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1 ‘‘(A) IN GENERAL.—The Secretary shall 

2 issue such guidance as the Secretary determines 

3 appropriate to carry out this subsection, includ4 ing guidance— 

5 ‘‘(i) to identify the administrative du6 ties and other actions required to be per7 formed by a pooled plan provider under 

8 this subsection, 

9 ‘‘(ii) which describes the procedures to 

10 be taken to terminate a plan which fails to 

11 meet the requirements to be a plan de12 scribed in paragraph (1), including the 

13 proper treatment of, and actions needed to 

14 be taken by, any participating employer of 

15 the plan and the assets and liabilities of 

16 the plan with respect to employees of that 

17 employer, and 

18 ‘‘(iii) identifying appropriate cases to 

19 which the rules of paragraph (2)(A) will 

20 apply to employers failing to take the ac21 tions described in paragraph (1). 

22 The Secretary shall take into account under 

23 clause (iii) whether the failure of an employer 

24 or pooled plan provider to provide any disclo25 sures or other information, or to take any other 


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1 action, necessary to administer a plan or to 

2 allow a plan to meet requirements applicable to 

3 the plan under section 401(a) or 408, whichever 

4 is applicable, has continued over a period of 

5 time that clearly demonstrates a lack of com6 mitment to compliance. 

7 ‘‘(B) PROSPECTIVE APPLICATION.—Any 

8 guidance issued by the Secretary under this 

9 paragraph shall not apply to any action or fail10 ure occurring before the issuance of such guid11 ance. 

12 ‘‘(5) MODEL PLAN.—The Secretary shall, in 

13 consultation with the Secretary of Labor when ap14 propriate, publish model plan language which meets 

15 the requirements of this subsection and of para16 graphs (43) and (44) of section 3 of the Employee 

17 Retirement Income Security Act of 1974 and which 

18 may be adopted in order for a plan to be treated as 

19 a plan described in paragraph (1)(B).’’. 

20 (2) CONFORMING AMENDMENT.—Paragraph (3) 

21 of section 413(b) of such Code is amended by strik22 ing ‘‘section 401(a)’’ and inserting ‘‘sections 401(a) 

23 and 408(c)’’. 


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1 (3) TECHNICAL AMENDMENT.—Subsection (c) 

2 of section 408 of such Code is amended by inserting 

3 after paragraph (2) the following new paragraph: 

4 ‘‘(3) There is a separate accounting for any in5 terest of an employee or member (or spouse of an 

6 employee or member) in a Roth IRA.’’. 

7 (b) NO COMMON INTEREST REQUIRED FOR POOLED

8 EMPLOYER PLANS.—Section 3(2) of the Employee Retire9 ment Income Security Act of 1974 (29 U.S.C. 1002(2)) 

10 is amended by adding at the end the following: 

11 ‘‘(C) A pooled employer plan shall be treat12 ed as— 

13 ‘‘(i) a single employee pension benefit 

14 plan or single pension plan; and 

15 ‘‘(ii) a plan to which section 210(a) 

16 applies.’’. 

17 (c) POOLED EMPLOYER PLAN AND PROVIDER DE18 FINED.— 

19 (1) IN GENERAL.—Section 3 of the Employee 

20 Retirement Income Security Act of 1974 (29 U.S.C. 

21 1002) is amended by adding at the end the fol22 lowing: 

23 ‘‘(43) POOLED EMPLOYER PLAN.— 

24 ‘‘(A) IN GENERAL.—The term ‘pooled em25 ployer plan’ means a plan— 


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1 ‘‘(i) which is an individual account 

2 plan established or maintained for the pur3 pose of providing benefits to the employees 

4 of 2 or more employers; 

5 ‘‘(ii) which is a plan described in sec6 tion 401(a) of the Internal Revenue Code 

7 of 1986 which includes a trust exempt 

8 from tax under section 501(a) of such 

9 Code or a plan that consists of individual 

10 retirement accounts described in section 

11 408 of such Code (including by reason of 

12 subsection (c) thereof); and 

13 ‘‘(iii) the terms of which meet the re14 quirements of subparagraph (B). 

15 Such term shall not include a plan with respect 

16 to which all of the participating employers have 

17 both a common interest other than having 

18 adopted the plan and control of the plan. 

19 ‘‘(B) REQUIREMENTS FOR PLAN TERMS.— 

20 The requirements of this subparagraph are met 

21 with respect to any plan if the terms of the 

22 plan— 

23 ‘‘(i) designate a pooled plan provider 

24 and provide that the pooled plan provider 

25 is a named fiduciary of the plan; 


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1 ‘‘(ii) designate one or more trustees 

2 meeting the requirements of section 

3 408(a)(2) of the Internal Revenue Code of 

4 1986 (other than a participating employer) 

5 to be responsible for collecting contribu6 tions to, and holding the assets of, the 

7 plan and require such trustees to imple8 ment written contribution collection proce9 dures that are reasonable, diligent, and 

10 systematic; 

11 ‘‘(iii) provide that each participating 

12 employer retains fiduciary responsibility 

13 for— 

14 ‘‘(I) the selection and monitoring 

15 in accordance with section 404(a) of 

16 the person designated as the pooled 

17 plan provider and any other person 

18 who, in addition to the pooled plan 

19 provider, is designated as a named fi20 duciary of the plan; and 

21 ‘‘(II) to the extent not otherwise 

22 delegated to another fiduciary by the 

23 pooled plan provider and subject to 

24 the provisions of section 404(c), the 

25 investment and management of that 


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1 portion of the plan’s assets attrib2 utable to the employees of that par3 ticipating employer; 

4 ‘‘(iv) provide that a participating em5 ployer, or a participant or beneficiary, is 

6 not subject to unreasonable restrictions, 

7 fees, or penalties with regard to ceasing 

8 participation, receipt of distributions, or 

9 otherwise transferring assets of the plan in 

10 accordance with section 208 or paragraph 

11 (44)(C)(i)(II); 

12 ‘‘(v) require— 

13 ‘‘(I) the pooled plan provider to 

14 provide to participating employers any 

15 disclosures or other information which 

16 the Secretary may require, including 

17 any disclosures or other information 

18 to facilitate the selection or any moni19 toring of the pooled plan provider by 

20 participating employers; and 

21 ‘‘(II) each participating employer 

22 to take such actions as the Secretary 

23 or the pooled plan provider determines 

24 are necessary to administer the plan 

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1 ment applicable under this Act or the 

2 Internal Revenue Code of 1986 to a 

3 plan described in section 401(a) of 

4 such Code or to a plan that consists 

5 of individual retirement accounts de6 scribed in section 408 of such Code 

7 (including by reason of subsection (c) 

8 thereof), whichever is applicable, in9 cluding providing any disclosures or 

10 other information which the Secretary 

11 may require or which the pooled plan 

12 provider otherwise determines is nec13 essary to administer the plan or to 

14 allow the plan to meet such require15 ments; and 

16 ‘‘(vi) provide that any disclosure or 

17 other information required to be provided 

18 under clause (v) may be provided in elec19 tronic form and will be designed to ensure 

20 only reasonable costs are imposed on 

21 pooled plan providers and participating 

22 employers. 

23 ‘‘(C) EXCEPTIONS.—The term ‘pooled em24 ployer plan’ does not include— 

25 ‘‘(i) a multiemployer plan; or 


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1 ‘‘(ii) a plan established before Janu2 ary 1, 2016, unless the plan administrator 

3 elects that the plan will be treated as a 

4 pooled employer plan and the plan meets 

5 the requirements of this title applicable to 

6 a pooled employer plan established on or 

7 after such date. 

8 ‘‘(44) POOLED PLAN PROVIDER.— 

9 ‘‘(A) IN GENERAL.—The term ‘pooled plan 

10 provider’ means a person who— 

11 ‘‘(i) is designated by the terms of a 

12 pooled employer plan as a named fiduciary, 

13 as the plan administrator, and as the per14 son responsible for the performance of all 

15 administrative duties (including conducting 

16 proper testing with respect to the plan and 

17 employees of each participating employer) 

18 which are reasonably necessary to ensure 

19 that— 

20 ‘‘(I) the plan meets any require21 ment applicable under this Act or the 

22 Internal Revenue Code of 1986 to a 

23 plan described in section 401(a) of 

24 such Code or to a plan that consists 

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1 scribed in section 408 of such Code 

2 (including by reason of subsection (c) 

3 thereof), whichever is applicable; and 

4 ‘‘(II) each participating employer 

5 takes such actions as the Secretary or 

6 pooled plan provider determines are 

7 necessary for the plan to meet the re8 quirements described in subclause (I), 

9 including providing the disclosures 

10 and information described in para11 graph (43)(B)(v)(II); 

12 ‘‘(ii) registers as a pooled plan pro13 vider with the Secretary, and provides to 

14 the Secretary such other information as 

15 the Secretary may require, before begin16 ning operations as a pooled plan provider; 

17 ‘‘(iii) acknowledges in writing that 

18 such person is a named fiduciary, and the 

19 plan administrator, with respect to the 

20 pooled employer plan; and 

21 ‘‘(iv) is responsible for ensuring that 

22 all persons who handle assets of, or who 

23 are fiduciaries of, the pooled employer plan 

24 are bonded in accordance with section 412. 


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1 ‘‘(B) AUDITS, EXAMINATIONS AND INVES2 TIGATIONS.—The Secretary may perform au3 dits, examinations, and investigations of pooled 

4 plan providers as may be necessary to enforce 

5 and carry out the purposes of this paragraph 

6 and paragraph (43). 

7 ‘‘(C) GUIDANCE.— 

8 ‘‘(i) IN GENERAL.—The Secretary 

9 shall issue such guidance as the Secretary 

10 determines appropriate to carry out this 

11 paragraph and paragraph (43), including 

12 guidance— 

13 ‘‘(I) to identify the administra14 tive duties and other actions required 

15 to be performed by a pooled plan pro16 vider under either such paragraph; 

17 and 

18 ‘‘(II) which requires in appro19 priate cases that if a participating 

20 employer fails to take the actions re21 quired under subparagraph 

22 (A)(i)(II)— 

23 ‘‘(aa) the assets of the plan 

24 attributable to employees of the 

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1 ferred to a plan maintained only 

2 by the participating employer (or 

3 its successor), to an eligible re4 tirement plan as defined in sec5 tion 402(c)(8)(B) of the Internal 

6 Revenue Code of 1986 for each 

7 individual whose account is 

8 transferred, or to any other ar9 rangement that the Secretary de10 termines is appropriate in such 

11 guidance; and 

12 ‘‘(bb) the participating em13 ployer described in item (aa) 

14 (and not the plan with respect to 

15 which the failure occurred or any 

16 other participating employer in 

17 such plan) shall, except to the ex18 tent provided in such guidance, 

19 be liable for any liabilities with 

20 respect to such plan attributable 

21 to employees of the participating 

22 employer. 

23 The Secretary shall take into account 

24 under subclause (II) whether the failure of 

25 an employer or pooled plan provider to 


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1 provide any disclosures or other informa2 tion, or to take any other action, necessary 

3 to administer a plan or to allow a plan to 

4 meet requirements described in subpara5 graph (A)(i)(II) has continued over a pe6 riod of time that clearly demonstrates a 

7 lack of commitment to compliance. The 

8 Secretary may waive the requirements of 

9 subclause (II)(aa) in appropriate cir10 cumstances if the Secretary determines it 

11 is in the best interests of the employees of 

12 the participating employer described in 

13 such clause to retain the assets in the plan 

14 with respect to which the employer’s fail15 ure occurred. 

16 ‘‘(ii) PROSPECTIVE APPLICATION.— 

17 Any guidance issued by the Secretary 

18 under this subparagraph shall not apply to 

19 any action or failure occurring before the 

20 issuance of such guidance. 

21 ‘‘(D) AGGREGATION RULES.—For purposes 

22 of this paragraph— 

23 ‘‘(i) IN GENERAL.—In determining 

24 whether a person meets the requirements 

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1 vider with respect to any plan, all persons 

2 who are members of the same controlled 

3 group and who perform services for the 

4 plan shall be treated as one person. 

5 ‘‘(ii) MEMBERS OF COMMON GROUP.— 

6 Persons shall be treated as members of the 

7 same controlled group if such persons are 

8 treated as a single employer under sub9 section (c) or (d) of section 210.’’. 

10 (2) BONDING REQUIREMENTS FOR POOLED EM11 PLOYER PLANS.—The last sentence of section 412(a) 

12 of the Employee Retirement Income Security Act of 

13 1974 (29 U.S.C. 1112(a)) is amended by inserting 

14 ‘‘or in the case of a pooled employer plan (as defined 

15 in section 3(43)’’ after ‘‘section 407(d)(1))’’. 

16 (3) CONFORMING AND TECHNICAL AMEND17 MENTS.—Section 3 of the Employee Retirement In18 come Security Act of 1974 (29 U.S.C. 1002) is 

19 amended— 

20 (A) in paragraph (16)(B)— 

21 (i) by striking ‘‘or’’ at the end of 

22 clause (ii), and 

23 (ii) by striking the period at the end 

24 and inserting ‘‘, or (iv) in the case of a 


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1 pooled employer plan, the pooled plan pro2 vider.’’; and 

3 (B) by striking the second paragraph (41). 

4 (d) EFFECTIVE DATE.— 

5 (1) IN GENERAL.—The amendments made by 

6 this section shall apply to years beginning after De7 cember 31, 2017. 

8 (2) RULE OF CONSTRUCTION.—Nothing in the 

9 amendments made by subsection (a) shall be con10 strued as limiting the authority of the Secretary of 

11 the Treasury or the Secretary’s delegate (determined 

12 without regard to such amendment) to provide for 

13 the proper treatment of a failure to meet any re14 quirement applicable under the Internal Revenue 

15 Code of 1986 with respect to one employer (and its 

16 employees) in a multiple employer plan. 

17 SEC. 3. POOLED EMPLOYER AND MULTIPLE EMPLOYER 

18 PLAN REPORTING. 

19 (a) ADDITIONAL INFORMATION.—Section 103 of the 

20 Employee Retirement Income Security Act of 1974 (29 

21 U.S.C. 1023) is amended— 

22 (1) in subsection (a)(1)(B), by striking ‘‘appli23 cable subsections (d), (e), and (f)’’ and inserting 

24 ‘‘applicable subsections (d), (e), (f), and (g)’’; and 


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1 (2) by amending subsection (g) to read as fol2 lows: 

3 ‘‘(g) ADDITIONAL INFORMATION WITH RESPECT TO

4 POOLED EMPLOYER AND MULTIPLE EMPLOYER

5 PLANS.—An annual report under this section for a plan 

6 year shall include— 

7 ‘‘(1) with respect to any plan to which section 

8 210(a) applies (including a pooled employer plan), a 

9 list of participating employers and a good faith esti10 mate of the percentage of total contributions made 

11 by such participating employers during the plan 

12 year; and 

13 ‘‘(2) with respect to a pooled employer plan, the 

14 identifying information for the person designated 

15 under the terms of the plan as the pooled plan pro16 vider.’’. 

17 (b) SIMPLIFIED ANNUAL REPORTS.—Section 104(a) 

18 of the Employee Retirement Income Security Act of 1974 

19 (29 U.S.C. 1024(a)) is amended by striking paragraph 

20 (2)(A) and inserting the following: 

21 ‘‘(2)(A) With respect to annual reports required 

22 to be filed with the Secretary under this part, the 

23 Secretary may by regulation prescribe simplified an24 nual reports for any pension plan that— 

25 ‘‘(i) covers fewer than 100 participants; or 


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1 ‘‘(ii) is a plan described in section 210(a) 

2 that covers fewer than 1,000 participants, but 

3 only if no single participating employer has 100 

4 or more participants covered by the plan.’’. 

5 (c) EFFECTIVE DATE.—The amendments made by 

6 this section shall apply to annual reports for plan years 

7 beginning after December 31, 2017. 

8 SEC. 4. REMOVAL OF 10 PERCENT CAP FROM AUTOMATIC 

9 ENROLLMENT SAFE HARBOR AFTER 1ST 

10 PLAN YEAR. 

11 (a) IN GENERAL.—Clause (iii) of section 

12 401(k)(13)(C) of the Internal Revenue Code of 1986 is 

13 amended by striking ‘‘, does not exceed 10 percent, and 

14 is at least’’ and inserting ‘‘and is’’. 

15 (b) CONFORMING AMENDMENTS.— 

16 (1) Subclause (I) of section 401(k)(13)(C)(iii) 

17 of the Internal Revenue Code of 1986 is amended by 

18 striking ‘‘3 percent’’ and inserting ‘‘at least 3 per19 cent, but not greater than 10 percent,’’. 

20 (2) Subclause (II) of section 401(k)(13)(C)(iii) 

21 of such Code is amended by striking ‘‘4 percent’’ 

22 and inserting ‘‘at least 4 percent’’. 

23 (3) Subclause (III) of section 401(k)(13)(C)(iii) 

24 of such Code is amended by striking ‘‘5 percent’’ 

25 and inserting ‘‘at least 5 percent’’. 


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1 (4) Subclause (IV) of section 401(k)(13)(C)(iii) 

2 of such Code is amended by striking ‘‘6 percent’’ 

3 and inserting ‘‘at least 6 percent’’. 

4 (c) EFFECTIVE DATE.—The amendments made by 

5 this section shall apply to plan years beginning after De6 cember 31, 2017. 

7 SEC. 5. RULES RELATING TO ELECTION OF SAFE HARBOR 

8 401(k) STATUS. 

9 (a) LIMITATION OF ANNUAL SAFE HARBOR NOTICE

10 TO MATCHING CONTRIBUTION PLANS.— 

11 (1) IN GENERAL.—Subparagraph (A) of section 

12 401(k)(12) of the Internal Revenue Code of 1986 is 

13 amended by striking ‘‘if such arrangement’’ and all 

14 that follows and inserting ‘‘if such arrangement— 

15 ‘‘(i) meets the contribution require16 ments of subparagraph (B) and the notice 

17 requirements of subparagraph (D), or 

18 ‘‘(ii) meets the contribution require19 ments of subparagraph (C).’’. 

20 (2) AUTOMATIC CONTRIBUTION ARRANGE21 MENTS.—Subparagraph (B) of section 401(k)(13) of 

22 such Code is amended by striking ‘‘means’’ and all 

23 that follows and inserting ‘‘means a cash or deferred 

24 arrangement— 


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1 ‘‘(i) which is described in subpara2 graph (D)(i)(I) and meets the applicable 

3 requirements of subparagraphs (C) 

4 through (E), or 

5 ‘‘(ii) which is described in subpara6 graph (D)(i)(II) and meets the applicable 

7 requirements of subparagraphs (C) and 

8 (D).’’. 

9 (b) NONELECTIVE CONTRIBUTIONS.—Section 

10 401(k)(12) of the Internal Revenue Code of 1986 is 

11 amended by redesignating subparagraph (F) as subpara12 graph (G), and by inserting after subparagraph (E) the 

13 following new subparagraph: 

14 ‘‘(F) TIMING OF PLAN AMENDMENT FOR

15 EMPLOYER MAKING NONELECTIVE CONTRIBU16 TIONS.— 

17 ‘‘(i) IN GENERAL.—Except as pro18 vided in clause (ii), a plan may be amend19 ed after the beginning of a plan year to 

20 provide that the requirements of subpara21 graph (C) shall apply to the arrangement 

22 for the plan year, but only if the amend23 ment is adopted— 


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1 ‘‘(I) at any time before the 30th 

2 day before the close of the plan year, 

3 or 

4 ‘‘(II) at any time before the last 

5 day under paragraph (8)(A) for dis6 tributing excess contributions for the 

7 plan year. 

8 ‘‘(ii) EXCEPTION WHERE PLAN PRO9 VIDED FOR MATCHING CONTRIBUTIONS.— 

10 Clause (i) shall not apply to any plan year 

11 if the plan provided at any time during the 

12 plan year that the requirements of sub13 paragraph (B) or paragraph (13)(D)(i)(I) 

14 applied to the plan year. 

15 ‘‘(iii) 4-PERCENT CONTRIBUTION RE16 QUIREMENT.—Clause (i)(II) shall not 

17 apply to an arrangement unless the 

18 amount of the contributions described in 

19 subparagraph (C) which the employer is 

20 required to make under the arrangement 

21 for the plan year with respect to any em22 ployee is an amount equal to at least 4 

23 percent of the employee’s compensation.’’. 


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1 (c) AUTOMATIC CONTRIBUTION ARRANGEMENTS.— 

2 Section 401(k)(13) of the Internal Revenue Code of 1986 

3 is amended by adding at the end the following: 

4 ‘‘(F) TIMING OF PLAN AMENDMENT FOR

5 EMPLOYER MAKING NONELECTIVE CONTRIBU6 TIONS.— 

7 ‘‘(i) IN GENERAL.—Except as pro8 vided in clause (ii), a plan may be amend9 ed after the beginning of a plan year to 

10 provide that the requirements of subpara11 graph (D)(i)(II) shall apply to the arrange12 ment for the plan year, but only if the 

13 amendment is adopted— 

14 ‘‘(I) at any time before the 30th 

15 day before the close of the plan year, 

16 or 

17 ‘‘(II) at any time before the last 

18 day under paragraph (8)(A) for dis19 tributing excess contributions for the 

20 plan year. 

21 ‘‘(ii) EXCEPTION WHERE PLAN PRO22 VIDED FOR MATCHING CONTRIBUTIONS.— 

23 Clause (i) shall not apply to any plan year 

24 if the plan provided at any time during the 

25 plan year that the requirements of subVerDate Sep 11 2014 02:14 Jun 24, 2017 Jkt 069200 PO 00000 Frm 00026 Fmt 6652 Sfmt 6201 E:\BILLS\S1383.IS S1383

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1 paragraph (D)(i)(I) or paragraph (12)(B) 

2 applied to the plan year. 

3 ‘‘(iii) 4-PERCENT CONTRIBUTION RE4 QUIREMENT.—Clause (i)(II) shall not 

5 apply to an arrangement unless the 

6 amount of the contributions described in 

7 subparagraph (D)(i)(II) which the em8 ployer is required to make under the ar9 rangement for the plan year with respect 

10 to any employee is an amount equal to at 

11 least 4 percent of the employee’s com12 pensation.’’. 

13 (d) EFFECTIVE DATE.—The amendments made by 

14 this section shall apply to plan years beginning after De15 cember 31, 2017. 

16 SEC. 6. INCREASE IN CREDIT LIMITATION FOR SMALL EM17 PLOYER PENSION PLAN STARTUP COSTS. 

18 (a) IN GENERAL.—Paragraph (1) of section 45E(b) 

19 of the Internal Revenue Code of 1986 is amended to read 

20 as follows: 

21 ‘‘(1) for the first credit year and each of the 2 

22 taxable years immediately following the first credit 

23 year, the greater of— 

24 ‘‘(A) $500, or 

25 ‘‘(B) the lesser of— 


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1 ‘‘(i) $250 for each employee of the eli2 gible employer who is not a highly com3 pensated employee (as defined in section 

4 414(q)) and who is eligible to participate 

5 in the eligible employer plan maintained by 

6 the eligible employer, or 

7 ‘‘(ii) $5,000, and’’. 

8 (b) EFFECTIVE DATE.—The amendment made by 

9 this section shall apply to taxable years beginning after 

10 December 31, 2017. 

11 SEC. 7. SMALL EMPLOYER AUTOMATIC ENROLLMENT 

12 CREDIT. 

13 (a) IN GENERAL.—Subpart D of part IV of sub14 chapter A of chapter 1 of the Internal Revenue Code of 

15 1986 is amended by adding at the end the following new 

16 section: 

17 ‘‘SEC. 45S. AUTO-ENROLLMENT OPTION FOR RETIREMENT 

18 SAVINGS OPTIONS PROVIDED BY SMALL EM19 PLOYERS. 

20 ‘‘(a) IN GENERAL.—For purposes of section 38, in 

21 the case of an eligible employer, the retirement auto-en22 rollment credit determined under this section for any tax23 able year is an amount equal to— 

24 ‘‘(1) $500 for any taxable year occurring during 

25 the credit period, and 


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1 ‘‘(2) zero for any other taxable year. 

2 ‘‘(b) CREDIT PERIOD.—For purposes of subsection 

3 (a)— 

4 ‘‘(1) IN GENERAL.—The credit period with re5 spect to any eligible employer is the 3-taxable-year 

6 period beginning with the first taxable year for 

7 which the employer includes an eligible automatic 

8 contribution arrangement (as defined in section 

9 414(w)(3)) in a qualified employer plan (as defined 

10 in section 4972(d)) sponsored by the employer. 

11 ‘‘(2) MAINTENANCE OF ARRANGEMENT.—No 

12 taxable year with respect to an employer shall be 

13 treated as occurring within the credit period unless 

14 the arrangement described in paragraph (1) is in15 cluded in the plan for such year. 

16 ‘‘(c) ELIGIBLE EMPLOYER.—For purposes of this 

17 section, the term ‘eligible employer’ has the meaning given 

18 such term in section 408(p)(2)(C)(i).’’. 

19 (b) CREDIT TO BE PART OF GENERAL BUSINESS

20 CREDIT.—Subsection (b) of section 38 of the Internal 

21 Revenue Code of 1986 is amended by striking ‘‘plus’’ at 

22 the end of paragraph (35), by striking the period at the 

23 end of paragraph (36) and inserting ‘‘, plus’’, and by add24 ing at the end the following new paragraph: 


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1 ‘‘(37) in the case of an eligible employer (as de2 fined in section 45S(c)), the retirement auto-enroll3 ment credit determined under section 45S(a).’’. 

4 (c) CLERICAL AMENDMENT.—The table of sections 

5 for subpart D of part IV of subchapter A of chapter 1 

6 of the Internal Revenue Code of 1986 is amended by in7 serting after the item relating to section 45R the following 

8 new item: 

‘‘Sec. 45S. Auto-enrollment option for retirement savings options provided by 

small employers.’’. 

9 (d) EFFECTIVE DATE.—The amendments made by 

10 this section shall apply to taxable years beginning after 

11 December 31, 2017. 

12 SEC. 8. SECURE DEFERRAL ARRANGEMENTS. 

13 (a) IN GENERAL.—Subsection (k) of section 401 of 

14 the Internal Revenue Code of 1986 is amended by adding 

15 at the end the following new paragraph: 

16 ‘‘(14) ALTERNATIVE METHOD FOR SECURE DE17 FERRAL ARRANGEMENTS TO MEET NONDISCRIMINA18 TION REQUIREMENTS.— 

19 ‘‘(A) IN GENERAL.—A secure deferral ar20 rangement shall be treated as meeting the re21 quirements of paragraph (3)(A)(ii). 

22 ‘‘(B) SECURE DEFERRAL ARRANGE23 MENT.—For purposes of this paragraph, the 

24 term ‘secure deferral arrangement’ means any 


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1 cash or deferred arrangement which meets the 

2 requirements of subparagraphs (C), (D), and 

3 (E) of paragraph (13), except as modified by 

4 this paragraph. 

5 ‘‘(C) QUALIFIED PERCENTAGE.—For pur6 poses of this paragraph, with respect to any 

7 employee, the term ‘qualified percentage’ 

8 means, in lieu of the meaning given such term 

9 in paragraph (13)(C)(iii), any percentage deter10 mined under the arrangement if such percent11 age is applied uniformly and is— 

12 ‘‘(i) at least 6 percent, but not greater 

13 than 10 percent, during the period ending 

14 on the last day of the first plan year which 

15 begins after the date on which the first 

16 elective contribution described in para17 graph (13)(C)(i) is made with respect to 

18 such employee, 

19 ‘‘(ii) at least 8 percent during the 

20 first plan year following the plan year de21 scribed in clause (i), and 

22 ‘‘(iii) at least 10 percent during any 

23 subsequent plan year. 

24 ‘‘(D) MATCHING CONTRIBUTIONS.— 


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1 ‘‘(i) IN GENERAL.—For purposes of 

2 this paragraph, an arrangement shall be 

3 treated as having met the requirements of 

4 paragraph (13)(D)(i) if and only if the em5 ployer makes matching contributions on 

6 behalf of each employee who is not a highly 

7 compensated employee in an amount equal 

8 to the sum of— 

9 ‘‘(I) 100 percent of the elective 

10 contributions of the employee to the 

11 extent that such contributions do not 

12 exceed 1 percent of compensation, 

13 ‘‘(II) 50 percent of so much of 

14 such contributions as exceed 1 percent 

15 but do not exceed 6 percent of com16 pensation, plus 

17 ‘‘(III) 25 percent of so much of 

18 such contributions as exceed 6 percent 

19 but do not exceed 10 percent of com20 pensation. 

21 ‘‘(ii) APPLICATION OF RULES FOR

22 MATCHING CONTRIBUTIONS.—The rules of 

23 clause (ii) of paragraph (12)(B) and 

24 clauses (iii) and (iv) of paragraph (13)(D) 

25 shall apply for purposes of clause (i) but 


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1 the rule of clause (iii) of paragraph 

2 (12)(B) shall not apply for such purposes. 

3 The rate of matching contribution for each 

4 incremental deferral must be at least as 

5 high as the rate specified in clause (i), and 

6 may be higher, so long as such rate does 

7 not increase as an employee’s rate of elec8 tive contributions increases.’’. 

9 (b) MATCHING CONTRIBUTIONS AND EMPLOYEE

10 CONTRIBUTIONS.—Subsection (m) of section 401 of the 

11 Internal Revenue Code of 1986 is amended by redesig12 nating paragraph (13) as paragraph (14) and by inserting 

13 after paragraph (12) the following new paragraph: 

14 ‘‘(13) ALTERNATIVE METHOD FOR SECURE DE15 FERRAL ARRANGEMENTS.—A defined contribution 

16 plan shall be treated as meeting the requirements of 

17 paragraph (2) with respect to matching contribu18 tions and employee contributions if the plan— 

19 ‘‘(A) is a secure deferral arrangement (as 

20 defined in subsection (k)(14)), 

21 ‘‘(B) meets the requirements of clauses (ii) 

22 and (iii) of paragraph (11)(B), and 

23 ‘‘(C) provides that matching contributions 

24 on behalf of any employee may not be made 

25 with respect to an employee’s contributions or 


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1 elective deferrals in excess of 10 percent of the 

2 employee’s compensation.’’. 

3 (c) EFFECTIVE DATE.—The amendments made by 

4 this section shall apply to plan years beginning after De5 cember 31, 2017. 

6 SEC. 9. CREDIT FOR EMPLOYERS WITH RESPECT TO MODI7 FIED SAFE HARBOR REQUIREMENTS. 

8 (a) IN GENERAL.—Subpart D of part IV of sub9 chapter A of chapter 1 of the Internal Revenue Code of 

10 1986, as amended by section 7, is further amended by 

11 adding at the end the following new section: 

12 ‘‘SEC. 45T. CREDIT FOR SMALL EMPLOYERS WITH RESPECT 

13 TO MODIFIED SAFE HARBOR REQUIREMENTS 

14 FOR AUTOMATIC CONTRIBUTION ARRANGE15 MENTS. 

16 ‘‘(a) GENERAL RULE.—For purposes of section 38, 

17 in the case of a small employer, the safe harbor adoption 

18 credit determined under this section for any taxable year 

19 is the amount equal to the total of the employer’s match20 ing contributions under section 401(k)(14)(D) during the 

21 taxable year on behalf of employees who are not highly 

22 compensated employees, subject to the limitations of sub23 section (b). 

24 ‘‘(b) LIMITATIONS.— 


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1 ‘‘(1) LIMITATION WITH RESPECT TO COM2 PENSATION.—The credit determined under sub3 section (a) with respect to contributions made on be4 half of an employee who is not a highly compensated 

5 employee shall not exceed 2 percent of the com6 pensation of such employee for the taxable year. 

7 ‘‘(2) LIMITATION WITH RESPECT TO YEARS OF

8 PARTICIPATION.—Credit shall be determined under 

9 subsection (a) with respect to contributions made on 

10 behalf of an employee who is not a highly com11 pensated employee only during the first 5 years such 

12 employee participates in the qualified automatic con13 tribution arrangement. 

14 ‘‘(c) DEFINITIONS.— 

15 ‘‘(1) IN GENERAL.—Any term used in this sec16 tion which is also used in section 401(k)(14) shall 

17 have the same meaning as when used in such sec18 tion. 

19 ‘‘(2) SMALL EMPLOYER.—The term ‘small em20 ployer’ means an eligible employer (as defined in 

21 section 408(p)(2)(C)(i)). 

22 ‘‘(d) DENIAL OF DOUBLE BENEFIT.—No deduction 

23 shall be allowable under this title for any contribution with 

24 respect to which a credit is allowed under this section.’’. 


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1 (b) CREDIT TO BE PART OF GENERAL BUSINESS

2 CREDIT.—Subsection (b) of section 38 of the Internal 

3 Revenue Code of 1986, as amended by section 7, is further 

4 amended— 

5 (1) by striking ‘‘plus’’ at the end of paragraph 

6 (36), 

7 (2) by striking the period at the end of para8 graph (37) and inserting ‘‘, plus’’, and 

9 (3) by adding at the end the following new 

10 paragraph: 

11 ‘‘(38) the safe harbor adoption credit deter12 mined under section 45T.’’. 

13 (c) CLERICAL AMENDMENT.—The table of sections 

14 for subpart D of part IV of subchapter A of chapter 1 

15 of the Internal Revenue Code of 1986, as amended by sec16 tion 7, is further amended by adding after the item relat17 ing to section 45S the following new item: 

‘‘Sec. 45T. Credit for small employers with respect to modified safe harbor requirements for automatic contribution arrangements.’’. 

18 (d) EFFECTIVE DATE.—The amendments made by 

19 this section shall apply to taxable years that include any 

20 portion of a plan year beginning after December 31, 2017. 

21 SEC. 10. MODIFICATION OF REGULATIONS. 

22 The Secretary of the Treasury shall promulgate regu23 lations or other guidance that— 


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1 (1) simplify and clarify the rules regarding the 

2 timing of participant notices required under section 

3 401(k)(13)(E) of the Internal Revenue Code of 

4 1986, with specific application to— 

5 (A) plans that allow employees to be eligi6 ble for participation immediately upon begin7 ning employment, and 

8 (B) employers with multiple payroll and 

9 administrative systems, and 

10 (2) simplify and clarify the automatic escalation 

11 rules under sections 401(k)(13)(C)(iii) and 

12 401(k)(14)(C) of the Internal Revenue Code of 1986 

13 in the context of employers with multiple payroll and 

14 administrative systems. 

15 Such regulations or guidance shall address the particular 

16 case of employees within the same plan who are subject 

17 to different notice timing and different percentage require18 ments, and provide assistance for plan sponsors in man19 aging such cases. 

20 SEC. 11. OPPORTUNITY TO CLAIM THE SAVER’S CREDIT ON 

21 FORM 1040EZ. 

22 The Secretary of the Treasury shall modify the forms 

23 for the return of tax of individuals in order to allow indi24 viduals claiming the credit under section 25B of the InterVerDate Sep 11 2014 02:14 Jun 24, 2017 Jkt 069200 PO 00000 Frm 00037 Fmt 6652 Sfmt 6201 E:\BILLS\S1383.IS S1383

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1 nal Revenue Code of 1986 to file (and claim such credit 

2 on) Form 1040EZ. 

Æ 


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