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[Congressional Bills 113th Congress]
[From the U.S. Government Publishing Office]
[S. 1270 Introduced in Senate (IS)]

113th CONGRESS
  1st Session
                                S. 1270

  To amend the Internal Revenue Code of 1986 to provide for reform of 
       public and private pension plans, and for other purposes.

_______________________________________________________________________

                   IN THE SENATE OF THE UNITED STATES

                              July 9, 2013

   Mr. Hatch 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 provide for reform of 
       public and private pension 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; AMENDMENT OF 1986 CODE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Secure Annuities 
for Employee Retirement Act of 2013'' or the ``SAFE Retirement 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 is as follows:

Sec. 1. Short title; amendment of 1986 Code; table of contents.
                     TITLE I--PUBLIC PENSION REFORM

Sec. 101. Annuity accumulation retirement plans of employees of State 
                            and local governments.
Sec. 102. Study of Federal pension systems.
                    TITLE II--PRIVATE PENSION REFORM

               Subtitle A--Enhanced Pension Plan Coverage

Sec. 201. Starter 401(k) plans for employers with no retirement plan.
Sec. 202. Increase in credit limitation for small employer pension plan 
                            startup costs.
Sec. 203. Employers allowed to replace simple retirement accounts with 
                            safe harbor 401(k) plans during a year.
Sec. 204. Modification of automatic enrollment safe harbor.
Sec. 205. Plan adopted by filing due date for year may be treated as in 
                            effect as of close of year.
Sec. 206. Rules relating to election of safe harbor 401(k) status.
Sec. 207. Modifications of rules relating to multiple employer defined 
                            contribution plans.
     Subtitle B--Pension Plan and Retirement Savings Simplification

Sec. 211. Modifications of deadlines for adopting pension plan 
                            amendments.
Sec. 212. Termination of application of top-heavy plan rules.
Sec. 213. Amendments to safe harbor 401(k) plans during plan year.
Sec. 214. Modification of rules relating to hardship withdrawals from 
                            cash or deferred arrangements.
Sec. 215. Individual may roll over insurance contract into individual 
                            retirement account.
Sec. 216. Forfeitures allocated to participant's account may be treated 
                            as employer matching or nonelective 
                            contributions.
Sec. 217. Time for providing explanation of qualified preretirement 
                            survivor annuity.
Sec. 218. Modifications of additional participation requirements for 
                            defined benefit plans.
Sec. 219. Treatment of custodial accounts on termination of section 
                            403(b) plans.
Sec. 220. Secure deferral arrangements.
Sec. 221. Portability of lifetime income options.
Sec. 222. Consolidation of defined contribution plan notices.
Sec. 223. Performance benchmarks for asset allocation funds.
                     Subtitle C--Longevity Reforms

Sec. 231. Modification of required minimum distribution rules where 
                            portion of benefit of defined contribution 
                            plan is annuitized.
Sec. 232. Updating of mortality tables for minimum required 
                            distributions.
Sec. 233. Minimum required distributions may be rolled over into Roth 
                            IRAs.
Sec. 234. Transfer of minimum survivor annuity requirements from plan 
                            sponsors to annuity providers.
Sec. 235. Expansion of Employee Plans Compliance Resolution System.
 Subtitle D--Modifications to the Employee Retirement Income Security 
                              Act of 1974

Sec. 241. Electronic communication of pension plan information.
Sec. 242. Modification of deadlines for summary plan description 
                            updates.
Sec. 243. Modification of small plan simplified reporting requirements.
Sec. 244. Fiduciary requirement regarding selection of annuity provider 
                            and annuity contract.
       TITLE III--INDIVIDUAL RETIREMENT INVESTMENT ADVICE REFORM

Sec. 301. Transfer to Secretary of the Treasury of authorities 
                            regarding individual retirement plans.

                     TITLE I--PUBLIC PENSION REFORM

SEC. 101. ANNUITY ACCUMULATION RETIREMENT PLANS OF EMPLOYEES OF STATE 
              AND LOCAL GOVERNMENTS.

    (a) In General.--Part I of subchapter D of chapter 1 is amended by 
inserting after subpart E the following new subpart:

``Subpart F--Annuity Accumulation Retirement Plans for State and Local 
                         Government Employees.

``Sec. 420A. Annuity accumulation retirement plans.

``SEC. 420A. ANNUITY ACCUMULATION RETIREMENT PLANS.

    ``(a) Annuity Accumulation Retirement Plans.--For purposes of this 
subpart--
            ``(1) In general.--The term `annuity accumulation 
        retirement plan' means a State or local governmental retirement 
        plan--
                    ``(A) which provides for the purchase, not less 
                frequently than annually, of a qualified individual 
                deferred fixed income annuity contract for each 
                participant which provides benefits based solely on the 
                contributions by an employer to an annuity provider and 
                the actuarial assumptions specified in the annuity 
                contract, and
                    ``(B) which provides that--
                            ``(i) no contributions may be made under 
                        the plan other than contributions described in 
                        subsection (c),
                            ``(ii) contributions pursuant to the plan 
                        on behalf of any eligible employee for any plan 
                        year, whether made annually or more frequently, 
                        are required to be paid not later than 90 days 
                        after the close of the plan year to an annuity 
                        provider to purchase a qualified individual 
                        deferred fixed income annuity contract for the 
                        employee, and
                            ``(iii) no benefits are provided by the 
                        employer under the plan other than the purchase 
                        of qualified individual deferred fixed income 
                        annuity contracts for eligible employees.
        Subject to the provisions of subsection (d)(3), nothing in 
        subparagraph (B)(iii) shall prohibit an employer from 
        establishing or maintaining a defined contribution plan or 
        defined benefit plan or providing any form of employee welfare 
        benefit separately from the plan.
            ``(2) Plan structure.--A plan will not be treated as an 
        annuity accumulation retirement plan unless--
                    ``(A) benefits under the plan are limited to a 
                monthly payment for the life of the participant, 
                commencing at the applicable age under subsection 
                (b)(1)(B), as provided under the qualified individual 
                deferred fixed income annuity contract purchased with 
                the employer contributions described in subsection (c) 
                and issued to the participant, and
                    ``(B) the plan does not accumulate assets in trust 
                or otherwise, and the employer has no ownership 
                interest in any qualified individual deferred fixed 
                income annuity contract issued to a participant.
            ``(3) Requirements for annuity contract purchasing 
        process.--
                    ``(A) In general.--A plan will not be treated as an 
                annuity accumulation retirement plan unless the plan 
                provides that individual deferred fixed income annuity 
                contracts will be purchased through a process by which, 
                with respect to each purchase under paragraph (1)(A), 
                the plan administrator--
                            ``(i) obtains competitive bids pursuant to 
                        a formal, public procurement process authorized 
                        under State law which requires institutional 
                        pricing on a group contract basis from multiple 
                        annuity providers verified by the applicable 
                        State insurance regulator as properly licensed 
                        to meet the specifications in the procurement 
                        request,
                            ``(ii) allocates its purchases of 
                        individual deferred fixed income annuity 
                        contracts among the providers selected under 
                        clause (i), with the largest allocation (not to 
                        exceed 75 percent of the aggregate purchase 
                        amount of all such contracts) purchased from 
                        the annuity provider submitting the superior 
                        bid,
                            ``(iii) ensures, to the maximum extent 
                        possible, that each employee's entire interest 
                        under an individual deferred fixed income 
                        annuity contract would be fully guaranteed by a 
                        State guaranty association under applicable 
                        State law, regulations, and industry standards 
                        in effect as of the date of issuance of the 
                        contract, and
                            ``(iv) ensures, to the maximum extent 
                        possible, that each employee's entire interest 
                        under all contracts provided under the plan by 
                        any single annuity provider (and any related 
                        parties, within the meaning of such term as 
                        applied by the State guaranty association) does 
                        not exceed the maximum amount which would be 
                        covered by a State guaranty association 
                        described in clause (iii) in case of the 
                        insolvency of the provider.
                    ``(B) Prohibition on providing benefit in exchange 
                for selection.--An annuity provider shall not be 
                treated as meeting the competitive bid requirements of 
                subparagraph (A)(i) if such provider, or any related 
                party to (within the meaning of such term as applied by 
                the State guaranty association) or agent of such 
                provider, on their own or on another's behalf, provides 
                anything of value to any employee of a State or local 
                government entity, or agency or instrumentality 
                thereof, or to a plan administrator, in connection with 
                the bidding process or the annuity purchase process 
                described in subparagraph (A).
                    ``(C) Compliance safe harbor.--A plan shall be 
                deemed to meet the requirements of subparagraph (A) if 
                the plan administrator obtains a determination in 
                writing from the Office of Domestic Finance, Department 
                of the Treasury, that such plan meets such 
                requirements. Authority to issue such a determination 
                shall not be delegated to any entity outside of the 
                Office of Domestic Finance.
            ``(4) General exemption from pension plan requirements.--
        Notwithstanding any other provision of this subchapter--
                    ``(A) except as provided in this section, no 
                requirement of this subchapter otherwise applicable to 
                a State or local governmental retirement plan shall 
                apply to an annuity accumulation retirement plan, and
                    ``(B) for purposes of this title other than any 
                such requirements, an annuity accumulation retirement 
                plan shall be treated as a defined benefit plan which 
                meets the requirements of section 401(a).
    ``(b) Qualified Individual Deferred Fixed Income Annuity 
Contract.--For purposes of this subpart, the term `qualified individual 
deferred fixed income annuity contract' means, with respect to an 
employee for any plan year, an individual annuity contract issued by an 
annuity provider--
            ``(1) under the terms of which--
                    ``(A) the monthly annuity payments during the 
                period described in subparagraph (B) are in equal 
                installments and are fixed at the time of purchase, and
                    ``(B) except as provided in subsection (e), the 
                entire interest of the employee in the contract will be 
                distributed in the form of monthly annuity payments 
                under a single life annuity, beginning on the later 
                of--
                            ``(i) the date the employee attains age--
                                    ``(I) 57, in the case of a public 
                                safety employee, and
                                    ``(II) 67, in the case of any other 
                                employee, or
                            ``(ii) in the case of a contract purchased 
                        after the date the employee attains such age, 
                        the 1st day of the 1st calendar year beginning 
                        after the calendar year in which such contract 
                        was purchased,
            ``(2) the purchase price of which is equal to the 
        contributions described in subsection (c) with respect to the 
        employee for the plan year in which it is purchased,
            ``(3) under which the employee's rights are nonforfeitable,
            ``(4) under which no loan may be made with respect to any 
        portion of any interest in the contract, and
            ``(5) except as provided in subsection (e), no portion of 
        any interest in the contract may be assigned, alienated, or 
        pledged as collateral.
    ``(c) Contribution Requirements and Limitations.--For purposes of 
subsection (a)(1)(B)--
            ``(1) In general.--The plan must provide that the only 
        contributions which may be made pursuant to the plan for any 
        plan year are nonelective contributions (within the meaning of 
        section 401(k)(11)(B)(ii)) made by the employer for the 
        purchase of qualified individual deferred fixed income annuity 
        contracts which are--
                    ``(A) made on behalf of each eligible employee for 
                the plan year, and
                    ``(B) equal to a percentage of the employee's 
                compensation which (except as provided in this 
                paragraph) is determined not later than the start of 
                the plan year.
        An employer shall not be treated as failing to meet the 
        requirements of this paragraph merely because the plan allows 
        the employer to elect to reduce the percentage under 
        subparagraph (B), or not to make any contributions pursuant to 
        the plan, for any period for all employees, and the employer so 
        elects not later than the start of the plan year.
            ``(2) Limits based on compensation.--
                    ``(A) In general.--The compensation (as determined 
                for purposes of section 415(c)) taken into account 
                under paragraph (1)(B) with respect to an employee for 
                any year shall not exceed the limitation in effect for 
                such year under section 401(a)(17).
                    ``(B) Percentage limitation.--
                            ``(i) In general.--The percentage under 
                        paragraph (1)(B) for any period shall not 
                        exceed--
                                    ``(I) 30 percent in the case of a 
                                public safety employee, or
                                    ``(II) 20 percent in the case of 
                                any other employee.
                            ``(ii) Election of higher percentage for 
                        employees 50 or older.--A plan may elect for 
                        any plan year to provide a higher percentage 
                        under paragraph (1)(B) than that specified 
                        under clause (i) for all employees who have 
                        attained age 50 before the beginning of a plan 
                        year, except that such percentage may not 
                        exceed--
                                    ``(I) 35 percent in the case of a 
                                public safety employee who has attained 
                                such age, or
                                    ``(II) 25 percent in the case of 
                                any other employee who has attained 
                                such age.
                    ``(C) Aggregation rule.--All plans of an employer 
                treated as a single plan for purposes of section 415 
                shall be treated as a single plan for purposes of this 
                paragraph.
    ``(d) Tax Treatment of Annuity Accumulation Retirement Plans.--
            ``(1) Taxation of eligible employee.--The amount actually 
        paid to a distributee under a qualified individual deferred 
        fixed income annuity contract shall be taxable to the 
        distributee under section 72.
            ``(2) Treatment of employer contributions.--Contributions 
        made by an employer for the purchase of a qualified individual 
        deferred fixed income annuity contract under an annuity 
        accumulation retirement plan shall be excluded from the gross 
        income of the employee.
            ``(3) Inclusion in income of excess contributions or 
        contributions for participants in another defined benefit plan 
        of an employer.--
                    ``(A) Excess contributions.--Except as provided in 
                subparagraph (B), if--
                            ``(i) contributions are made for any plan 
                        year by an employer on behalf of an employee in 
                        excess of the limit determined after 
                        application of subsection (c)(2), the employee 
                        shall include in gross income an amount equal 
                        to such excess, or
                            ``(ii) an employee for whom such 
                        contributions are made for any plan year 
                        accrues benefits (for any period of service for 
                        which such contributions were made) under any 
                        other defined benefit plan of the employer 
                        which is not an annuity accumulation retirement 
                        plan, the employee shall include in gross 
                        income an amount equal to such contributions.
                    ``(B) Exception for premiums refunded.--
                Subparagraph (A) shall not apply with respect to 
                contributions on behalf of an employee for any plan 
                year if, not later than 6 months after the last day of 
                the plan year, the contributions described in 
                subparagraph (A) used to purchase a qualified 
                individual deferred fixed income annuity contract for 
                the employee are refunded to the employer.
                    ``(C) Taxable year of inclusion.--Any amount under 
                subparagraph (A) shall be includible in gross income of 
                the employee for the taxable year which includes the 
                date which is 6 months after the last day of the plan 
                year.
                    ``(D) Investment in the contract.--Any amount 
                included in gross income shall not be treated as 
                investment in the contract for purposes of section 72.
    ``(e) Certain Judgments and Settlements.--Paragraphs (1)(B) and (5) 
of subsection (b) shall not apply to any offset of an employee's 
benefits payable under an annuity contract--
            ``(1) pursuant to--
                    ``(A) the enforcement of a levy under section 6331 
                or the collection by the United States of a judgment 
                resulting from an unpaid tax assessment, or
                    ``(B) the enforcement of a fine imposed as part of 
                a criminal sentence under subchapter C of chapter 227 
                of title 18, United States Code, or an order of 
                restitution made pursuant to such title, or
            ``(2) to the extent required under any State tax, criminal, 
        or domestic relations law.
    ``(f) Definitions.--
            ``(1) State or local governmental retirement plan.--For 
        purposes of this section, the term `State or local governmental 
        retirement plan' means a governmental plan providing for the 
        deferral of compensation which is established and maintained 
        for its employees by a State, a political subdivision of a 
        State, or an agency or instrumentality of a State or a 
        political subdivision of a State.
            ``(2) General definitions.--For purposes of this 
        subchapter--
                    ``(A) Eligible employee.--The term `eligible 
                employee' means, with respect to any State or local 
                governmental retirement plan, any officer or employee 
                (other than a contractor) eligible to participate in 
                the plan.
                    ``(B) Annuity provider.--The term `annuity 
                provider' means any company which is licensed to do 
                business as a life insurance company under the laws of 
                the State in which a qualified individual deferred 
                fixed income annuity contract to which this subchapter 
                applies is to be issued.
                    ``(C) Public safety employee.--The term `public 
                safety employee' means any employee of a State or 
                political subdivision of a State who provides police 
                protection, firefighting services, or emergency medical 
                services for any area within the jurisdiction of such 
                State or political subdivision.''.
    (b) Limitation on 403(a) Annuity Plans of State and Local 
Governments.--
            (1) In general.--Subsection (a) of section 403 is amended 
        by adding at the end the following new paragraph:
            ``(6) Exclusion of certain state and local governmental 
        plans.--This subsection shall not apply in the case of annuity 
        contracts purchased under a State or local governmental 
        retirement plan (as defined in section 420A(f)) which was 
        established after July 8, 2013.''.
            (2) Effective date.--The amendment made by this subsection 
        shall apply to plans established after July 8, 2013.
    (c) FICA Exemption.--Paragraph (5) of section 3121(a) is amended by 
striking ``or'' at the end of subparagraph (H), by striking the 
semicolon at the end of subparagraph (I) and inserting ``, or'', and by 
adding at the end the following new subparagraph:
                    ``(J) under an annuity accumulation retirement plan 
                for the purchase of annuity contracts under section 
                420A;''.
    (d) Inclusion of Amount for the Purchase of Annuity Contracts on W-
2.--Subsection (a) of section 6051 is amended by striking ``and'' at 
the end of paragraph (13), by striking the period at the end of 
paragraph (14)(B) and inserting ``, and'', and by inserting after 
paragraph (14) the following new paragraph:
            ``(15) the total amount contributed under an annuity 
        accumulation retirement plan for the purchase of annuity 
        contracts under section 420A.''.
    (e) Clerical Amendment.--The table of subparts for part I of 
subchapter D of chapter 1 is amended by inserting after the item 
relating to subpart E the following new item:

``subpart f--annuity accumulation retirement plans for state and local 
                        government employees''.

    (f) Effective Date.--Except as provided in subsection (b), the 
amendments made by this section shall apply to years beginning after 
December 31, 2014.

SEC. 102. STUDY OF FEDERAL PENSION SYSTEMS.

    (a) Study.--The Comptroller General of the United States shall 
conduct a study of pension systems established by law for employees of 
the Government of the United States, including an analysis of--
            (1) the benefits provided under such systems, particularly 
        in comparison to those offered to private employees, and
            (2) whether such systems are adequately funded.
    (b) Report.--The Comptroller General of the United States shall, 
not later than 1 year after the date of enactment of this Act, report 
to Congress the results of the study conducted under subsection (a), 
including any recommendations for legislative or administrative changes 
to the pension systems considered in the study.

                    TITLE II--PRIVATE PENSION REFORM

               Subtitle A--Enhanced Pension Plan Coverage

SEC. 201. STARTER 401(K) PLANS FOR EMPLOYERS WITH NO RETIREMENT PLAN.

    (a) In General.--Section 401(k) is amended by adding at the end the 
following new paragraph:
            ``(14) Starter 401(k) deferral-only plans for employers 
        with no retirement plan.--
                    ``(A) In general.--A starter 401(k) deferral-only 
                arrangement maintained by an eligible employer shall be 
                treated as meeting the requirements of paragraph 
                (3)(A)(ii).
                    ``(B) Starter 401(k) deferral-only arrangement.--
                For purposes of this paragraph, the term `starter 
                401(k) deferral-only arrangement' means any cash or 
                deferred arrangement which meets--
                            ``(i) the automatic deferral requirements 
                        of subparagraph (C),
                            ``(ii) the contribution limitations of 
                        subparagraph (D), and
                            ``(iii) the requirements of subparagraph 
                        (E) of paragraph (13).
                    ``(C) Automatic deferral.--
                            ``(i) In general.--The requirements of this 
                        subparagraph are met if, under the arrangement, 
                        each employee eligible to participate in the 
                        arrangement is treated as having elected to 
                        have the employer make elective contributions 
                        in an amount equal to a qualified percentage of 
                        compensation.
                            ``(ii) Election out.--The election treated 
                        as having been made under clause (i) shall 
                        cease to apply with respect to any employee if 
                        such employee makes an affirmative election--
                                    ``(I) to not have such 
                                contributions made, or
                                    ``(II) to make elective 
                                contributions at a level specified in 
                                such affirmative election.
                            ``(iii) Qualified percentage.--For purposes 
                        of this subparagraph, the term `qualified 
                        percentage' means, with respect to any 
                        employee, any percentage determined under the 
                        arrangement if such percentage is applied 
                        uniformly and is not less than 3 or more than 
                        15 percent.
                    ``(D) Contribution limitations.--
                            ``(i) In general.--The requirements of this 
                        subparagraph are met if, under the 
                        arrangement--
                                    ``(I) the only contributions which 
                                may be made are elective contributions 
                                of employees described in subparagraph 
                                (C), and
                                    ``(II) the aggregate amount of such 
                                elective contributions which may be 
                                made with respect to any employee for 
                                any calendar year shall not exceed 
                                $8,000.
                            ``(ii) Cost-of-living adjustment.--In the 
                        case of any calendar year beginning after 
                        December 31, 2014, the $8,000 amount under 
                        clause (i) shall be adjusted in the same manner 
                        as under section 402(g)(4), except that `2013' 
                        shall be substituted for `2005'.
                            ``(iii) Cross reference.--For catch-up 
                        contributions for individuals age 50 or over, 
                        see section 414(v)(2)(B)(ii).
                    ``(E) Eligible employer.--For purposes of this 
                paragraph--
                            ``(i) In general.--The term `eligible 
                        employer' means any employer which, during the 
                        first plan year of the cash or deferred 
                        arrangement described in subparagraph (B), does 
                        not maintain any other qualified plan. An 
                        employer treated as an eligible employer under 
                        the preceding sentence shall be treated as an 
                        eligible employer with respect to the 
                        arrangement for any subsequent plan year 
                        without regard to whether it maintains another 
                        qualified plan.
                            ``(ii) Qualified plan.--The term `qualified 
                        plan' means a plan, contract, pension, account, 
                        or trust described in subparagraph (A) or (B) 
                        of paragraph (5) of section 219(g) (determined 
                        without regard to the last sentence of such 
                        paragraph (5)).''.
    (b) Catch-Up Contributions for Individuals Age 50 and Over.--
            (1) Section 414(v)(2)(B) is amended by inserting ``, 
        401(k)(14),'' after ``401(k)(11)'' each place it appears.
            (2) Section 414(v)(3)(B) is amended by inserting 
        ``401(k)(14),'' after ``401(k)(11),''.
    (c) Simplified Reporting.--Section 104(a)(2)(A) of the Employee 
Retirement Income Security Act of 1974 (29 U.S.C. 1024(a)(2)) is 
amended by inserting ``or for any pension plan which is a starter 
401(k) deferral-only arrangement described in section 401(k)(14)(B) of 
the Internal Revenue Code of 1986'' before the period at the end.
    (d) Starter Plans Not Treated as Top-Heavy Plans.--Clause (i) of 
section 416(g)(4)(H) is amended by striking ``or 401(k)(13)'' and 
inserting ``401(k)(13), or 401(k)(14)''.
    (e) Effective Date.--The amendments made by this section shall 
apply to plan years beginning after December 31, 2013.

SEC. 202. 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. 203. EMPLOYERS ALLOWED TO REPLACE SIMPLE RETIREMENT ACCOUNTS WITH 
              SAFE HARBOR 401(K) PLANS DURING A YEAR.

    (a) In General.--Section 408(p) is amended by adding at the end the 
following new paragraph:
            ``(11) Replacement of simple retirement accounts with safe 
        harbor plans during plan year.--
                    ``(A) In general.--Subject to the requirements of 
                this paragraph, an employer may elect (in such form and 
                manner as the Secretary may prescribe) at any time 
                during a year to terminate the qualified salary 
                reduction arrangement under paragraph (2), but only if 
                the employer establishes and maintains (as of the day 
                after the termination date) a safe harbor plan to 
                replace the terminated arrangement.
                    ``(B) Combined limits on contributions.--The 
                terminated arrangement and safe harbor plan shall both 
                be treated as violating the requirements of paragraph 
                (2)(A)(ii) or section 401(a)(30) (whichever is 
                applicable) if the aggregate elective contributions of 
                the employee under the terminated arrangement during 
                its last plan year and under the safe harbor plan 
                during its transition year exceed the sum of--
                            ``(i) the applicable dollar amount for such 
                        arrangement (determined on a full-year basis) 
                        with respect to the employee for such last plan 
                        year multiplied by a fraction equal to the 
                        number of days in such plan year divided by 
                        365, and
                            ``(ii) the applicable dollar amount (as so 
                        determined) for such safe harbor plan on such 
                        elective contributions during the transition 
                        year multiplied by a fraction equal to the 
                        number of days in such transition year divided 
                        by 365.
                    ``(C) Applicable dollar amount.--The applicable 
                dollar amount is the amount determined under paragraph 
                (2)(A)(ii) (after the application of section 414(v)) or 
                section 402(g)(1), whichever is applicable.
                    ``(D) Transition year.--For purposes of this 
                paragraph, the transition year is the period beginning 
                after the termination date and ending on the last day 
                of the calendar year during which the termination 
                occurs.
                    ``(E) Safe harbor plan.--For purposes of this 
                paragraph, the term `safe harbor plan' means a 
                qualified cash or deferred arrangement which meets the 
                requirements of paragraph (11), (12), or (13) of 
                section 401(k).''.
    (b) Effective Date.--The amendments made by this section shall 
apply to plan years beginning after December 31, 2013.

SEC. 204. MODIFICATION OF AUTOMATIC ENROLLMENT SAFE HARBOR.

    (a) Removal of 10 Percent Cap After 1st Plan Year.--
            (1) In general.--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. 205. PLAN ADOPTED BY FILING DUE DATE FOR YEAR MAY BE TREATED AS IN 
              EFFECT AS OF CLOSE OF YEAR.

    (a) In General.--Section 401(b), as amended by section 211 of this 
Act, is amended by adding at the end the following:
            ``(4) Adoption of plan.--If an employer adopts a stock 
        bonus, pension, profit-sharing, or annuity plan after the close 
        of a taxable year but before the time prescribed by law for 
        filing the return of the employer for the taxable year 
        (including extensions thereof), the employer may elect to treat 
        the plan as having been adopted as of the last day of the 
        taxable year.''.
    (b) Effective Date.--The amendments made by this section shall 
apply to plans adopted for taxable years beginning after December 31, 
2013.

SEC. 206. RULES RELATING TO ELECTION OF SAFE HARBOR 401(K) STATUS.

    (a) Limitation of Annual Safe Harbor Notice to Matching 
Contribution Plans.--
            (1) In general.--Subparagraph (A) of section 401(k)(12) is 
        amended by striking ``if such arrangement'' and all that 
        follows and inserting ``if such arrangement--
                            ``(i) meets the contribution requirements 
                        of subparagraph (B) and the notice requirements 
                        of subparagraph (D), or
                            ``(ii) meets the contribution requirements 
                        of subparagraph (C).''.
            (2) Automatic contribution arrangements.--Subparagraph (B) 
        of section 401(k)(13) is amended by striking ``means'' and all 
        that follows and inserting ``means a cash or deferred 
        arrangement--
                    ``(A) which is described in subparagraph (D)(i)(I) 
                and meets the applicable requirements of subparagraphs 
                (C) through (E), or
                    ``(B) which is described in subparagraph (D)(i)(II) 
                and meets the applicable requirements of subparagraphs 
                (C) and (D).''.
    (b) Nonelective Contributions.--Section 401(k)(12) is amended by 
redesignating subparagraph (F) as subparagraph (G), and by inserting 
after subparagraph (E) the following new subparagraph:
                    ``(F) Timing of plan amendment for employer making 
                nonelective contributions.--
                            ``(i) In general.--Except as provided in 
                        clause (ii), a plan may be amended after the 
                        beginning of a plan year to provide that the 
                        requirements of subparagraph (C) shall apply to 
                        the arrangement for the plan year, but only if 
                        the amendment is adopted--
                                    ``(I) at any time before the 30th 
                                day before the close of the plan year, 
                                or
                                    ``(II) if the requirements of 
                                clause (iii) are met, at any time 
                                before the last day under paragraph 
                                (8)(A) for distributing excess 
                                contributions for the plan year.
                            ``(ii) Exception where plan provided for 
                        matching contributions.--Clause (i) shall not 
                        apply to any plan year if the plan provided at 
                        any time during the plan year that the 
                        requirements of subparagraph (B) applied to the 
                        plan year.
                            ``(iii) 4-percent contribution 
                        requirement.--Clause (i)(II) shall not apply to 
                        an arrangement unless the amount of the 
                        contributions described in subparagraph (C) 
                        which the employer is required to make under 
                        the arrangement for the plan year with respect 
                        to any employee is an amount equal to at least 
                        4 percent of the employee's compensation.''.
    (c) Automatic Contribution Arrangements.--Section 401(k)(13) is 
amended by adding at the end the following :
                    ``(F) Timing of plan amendment for employer making 
                nonelective contributions.--
                            ``(i) In general.--Except as provided in 
                        clause (ii), a plan may be amended after the 
                        beginning of a plan year to provide that the 
                        requirements of subparagraph (D)(i)(II) shall 
                        apply to the arrangement for the plan year, but 
                        only if the amendment is adopted--
                                    ``(I) at any time before the 30th 
                                day before the close of the plan year, 
                                or
                                    ``(II) if the requirements of 
                                clause (iii) are met, at any time 
                                before the last day under paragraph 
                                (8)(A) for distributing excess 
                                contributions for the plan year.
                            ``(ii) Exception where plan provided for 
                        matching contributions.--Clause (i) shall not 
                        apply to any plan year if the plan provided at 
                        any time during the plan year that the 
                        requirements of subparagraph (D)(i)(I) applied 
                        to the plan year.
                            ``(iii) 4-percent contribution 
                        requirement.--Clause (i)(II) shall not apply to 
                        an arrangement unless the amount of the 
                        contributions described in subparagraph 
                        (D)(i)(II) which the employer is required to 
                        make under the arrangement for the plan year 
                        with respect to any employee is an amount equal 
                        to at least 4 percent of the employee's 
                        compensation.''.
    (d) Effective Date.--The amendments made by this section shall 
apply to plan years beginning after December 31, 2013.

SEC. 207. MODIFICATIONS OF RULES RELATING TO MULTIPLE EMPLOYER DEFINED 
              CONTRIBUTION PLANS.

    (a) Qualification Requirements.--Section 413 is amended by adding 
at the end the following:
    ``(d) Application of Qualification Requirements for Certain 
Multiple Employer Plans With Designated Plan Providers.--
            ``(1) In general.--If a plan to which subsection (c) 
        applies is sponsored by employers that have a common interest 
        other than having adopted the plan, or has a designated plan 
        provider, then, except as provided in paragraph (3), the 
        failure of the portion of the plan covering the employees of an 
        employer maintaining the plan to satisfy any applicable 
        qualification requirement under section 401(a) will not affect 
        the qualification of any portion of the plan covering employees 
        of any employer who has satisfied all such requirements.
            ``(2) Designated plan provider.--For purposes of this 
        subsection--
                    ``(A) In general.--The term `designated plan 
                provider' means the person designated under the terms 
                of the plan as the person responsible to perform all 
                administrative duties which are reasonably necessary to 
                ensure that the plan, and each participating employer, 
                meets the requirements described in paragraph (1), 
                including conducting proper testing of such plan and 
                employers.
                    ``(B) Registration, etc. requirements.--A person 
                shall not be treated as a designated plan provider with 
                respect to any plan unless--
                            ``(i) the person registers with the 
                        Secretary and provides such identifying 
                        information as the Secretary may require, and
                            ``(ii) the person consents to audits by the 
                        Secretary at such times as the Secretary 
                        determines appropriate to ensure the person is 
                        performing the duties described in subparagraph 
                        (A).
            ``(3) Failure by provider to perform duties.--If the 
        designated plan provider of a plan does not perform the duties 
        described in paragraph (2)(A) with respect to any plan year so 
        as to reasonably ensure the plan meets the requirements 
        described in paragraph (1)--
                    ``(A) paragraph (1) shall not apply to the plan for 
                the plan year, and
                    ``(B) the determination as to whether the plan, or 
                any participating employer, meets such requirements 
                shall be made in the same manner as made with respect 
                to a plan without a designated plan provider.
            ``(4) Guidance.--The Secretary shall issue such guidance as 
        the Secretary determines appropriate to carry out this 
        subsection, including guidance to--
                    ``(A) identify the administrative duties required 
                to be performed under paragraph (2)(A), and
                    ``(B) require, if appropriate, that the portion of 
                the plan attributable to participating employers not 
                meeting the requirements described in paragraph (1) be 
                spun off to plans maintained by such employers.''.
    (b) Modification of ERISA Requirements.--
            (1) Requirement of common interest.--Section 3(2) of the 
        Employee Retirement Income Security Act of 1974 is amended by 
        adding at the end the following:
            ``(C)(i) A qualified multiple employer plan shall not fail 
        to be treated as an employee pension benefit plan or pension 
        plan solely because the employers sponsoring the plan share no 
        common interest.
            ``(ii) For purposes of this subparagraph, the term 
        `qualified multiple employer plan' means a plan described in 
        section 413(c) of the Internal Revenue Code of 1986 which--
                    ``(I) is an individual account plan with respect to 
                which the requirements of clauses (iii) and (iv) are 
                met, and
                    ``(II) includes in its annual report required to be 
                filed under section 104(a) the name and identifying 
                information of each participating employer and each 
                person designated as a designated plan provider under 
                section 413 of the Internal Revenue Code of 1986.
            ``(iii) The requirements of this clause are met if, under 
        the plan, each participating employer retains fiduciary 
        responsibility for--
                    ``(I) the selection and monitoring of the person 
                designated as the designated plan provider and the 
                named fiduciary if different from such provider, and
                    ``(II) the investment and management of the portion 
                of the plan's assets attributable to employees of the 
                employer to the extent not otherwise delegated to 
                another fiduciary.
            ``(iv) The requirements of this clause are met if, under 
        the plan, a participating employer is not subject to 
        unreasonable restrictions, fees, or penalties by reason of 
        ceasing participation in, or otherwise transferring assets 
        from, the plan.''.
            (2) Simplified reporting for small multiple employer 
        plans.--Section 104(a) of such Act (29 U.S.C. 1024(a)) is 
        amended by adding at the end the following:
    ``(7)(A) In the case of any eligible small multiple employer plan, 
the Secretary may by regulation--
            ``(i) prescribe simplified summary plan descriptions, 
        annual reports, and pension benefit statements for purposes of 
        section 102, 103, or 105, respectively, and
            ``(ii) waive the requirement under section 103(a)(3) to 
        engage an independent qualified public accountant in cases 
        where the Secretary determines it appropriate.
    ``(B) For purposes of this paragraph, the term `eligible small 
multiple employer plan' means, with respect to any plan year, a 
qualified multiple employer plan (as defined in section 3(2)(C)) which, 
for the preceding plan year--
            ``(i) did not have more than 2,500 participants, and
            ``(ii) did not have any employer sponsoring the plan which 
        had more than 500 employees as participants.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to years beginning after December 31, 2013.

     Subtitle B--Pension Plan and Retirement Savings Simplification

SEC. 211. MODIFICATIONS OF DEADLINES FOR ADOPTING PENSION PLAN 
              AMENDMENTS.

    (a) Required Amendments.--Section 401(b) is amended--
            (1) by striking all that precedes ``stock bonus, pension, 
        profit-sharing'' and inserting:
    ``(b) Retroactive Amendments to, and Adoption of, a Plan.--
            ``(1) Retroactive changes to amendments causing plan to 
        fail.--A'', and
            (2) by adding at the end the following:
            ``(2) Coordination of timing of pension plan amendment 
        adoption, and remedial plan review, requirements.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), in the case of any required amendment 
                to a stock bonus, pension, profit-sharing, or annuity 
                plan--
                            ``(i) the plan shall be treated as being 
                        operated in accordance with the terms of the 
                        plan during the remedial period, and
                            ``(ii) except as provided by the Secretary, 
                        such plan shall not fail to meet the 
                        requirements of section 411(d)(6) of the 
                        Internal Revenue Code of 1986 and section 
                        204(g) of the Employee Retirement Income 
                        Security Act of 1974 by reason of such 
                        amendment.
                    ``(B) Conditions.--Subparagraph (A) shall not apply 
                to any required amendment to a plan unless--
                            ``(i) the required amendment is adopted 
                        before the end of the remedial period,
                            ``(ii) the plan is operated as if the 
                        required amendment were in effect during the 
                        remedial period, and
                            ``(iii) the required amendment applies 
                        retroactively for the remedial period.
                    ``(C) Required amendment.--For purposes of this 
                paragraph, the term `required amendment' means any 
                amendment to a plan which is required by (or integral 
                to meeting the requirements of) any Federal law or any 
                regulation issued by the Secretary or the Secretary of 
                Labor.
                    ``(D) Remedial period.--For purposes of this 
                paragraph--
                            ``(i) Remedial period.--The term `remedial 
                        period' means, with respect to any required 
                        amendment to a plan, the period--
                                    ``(I) beginning on the date the 
                                amendment is required under the law or 
                                regulation described in subparagraph 
                                (C) to take effect, and
                                    ``(II) ending on the last day in 
                                the remedial plan review period with 
                                respect to the plan in which the date 
                                determined under subclause (I) occurs 
                                (or, if earlier, the date the plan 
                                amendment is adopted).
                            ``(ii) Remedial plan review period.--The 
                        term `remedial plan review period' means, with 
                        respect to any plan, the period established by 
                        the Secretary under the authority of section 
                        401(b) as the regular cycle of review by the 
                        Secretary for determining whether the plan 
                        continues to meet the requirements of this 
                        title for treatment as a qualified plan under 
                        section 401(a).''.
    (b) Retroactive Application of Discretionary Amendments.--Section 
401(b), as amended by subsection (a), is amended by adding at the end 
the following:
            ``(3) Discretionary amendments.--In the case of an 
        amendment to which paragraphs (1) and (2) do not otherwise 
        apply, the provisions of paragraph (1) shall apply to such 
        amendment if it is to take effect during a plan year and is 
        adopted by the last day prescribed by law (including 
        extensions) for filing the return of tax for the taxable year 
        of the employer within which such plan year ends.''.
    (c) Effective Date.--The amendments made by this section shall 
apply with respect to amendments taking effect with respect to plan 
years beginning after December 31, 2013.

SEC. 212. TERMINATION OF APPLICATION OF TOP-HEAVY PLAN RULES.

    (a) In General.--Section 416 is amended by adding at the end the 
following:
    ``(j) Termination.--
            ``(1) In general.--This section shall not apply to any plan 
        year beginning after December 31, 2013.
            ``(2) Vesting rules applicable to previously accrued 
        benefits.--If a plan was a top-heavy plan for any plan year 
        beginning before January 1, 2014, then, notwithstanding 
        paragraph (1), the vesting rules applicable to the plan under 
        subsection (b) for the plan year shall continue to apply to any 
        accrued benefit derived during the plan year.''.
    (b) Effective Date.--The amendments made by this section shall 
apply to plan years beginning after December 31, 2013.

SEC. 213. AMENDMENTS TO SAFE HARBOR 401(K) PLANS DURING PLAN YEAR.

    (a) In General.--Section 401(k)(12), as amended by section 206 of 
this Act, is amended by redesignating subparagraph (G) as subparagraph 
(H) and by inserting after subparagraph (F) the following:
                    ``(G) Amendments to safe harbor plans during plan 
                year.--
                            ``(i) In general.--Except as provided in 
                        clause (ii), an amendment to an arrangement to 
                        which this paragraph or paragraph (13) applies 
                        may take effect during a plan year if it is 
                        adopted before the close of the plan year.
                            ``(ii) No reduction in matching 
                        contributions.--Clause (i) shall not apply to 
                        any amendment which reduces the amount of the 
                        matching contributions an employer is required 
                        to make under the arrangement as in effect 
                        before the amendment.''.
    (b) Effective Date.--The amendment made by this section shall apply 
to plan years beginning after December 31, 2013.

SEC. 214. MODIFICATION OF RULES RELATING TO HARDSHIP WITHDRAWALS FROM 
              CASH OR DEFERRED ARRANGEMENTS.

    (a) In General.--Section 401(k), as amended by section 201 of this 
Act, is amended by adding at the end the following:
            ``(15) Special rules relating to hardship withdrawals.--For 
        purposes of paragraph (2)(B)(i)(IV)--
                    ``(A) Amounts which may be withdrawn.--The 
                following amounts may be distributed upon hardship of 
                the employee:
                            ``(i) Contributions to a profit-sharing or 
                        stock bonus plan to which section 402(e)(3) 
                        applies.
                            ``(ii) Qualified nonelective contributions 
                        (as defined in subsection (m)(4)(C)).
                            ``(iii) Qualified matching contributions 
                        described in paragraph (3)(D)(ii)(I).
                            ``(iv) Earnings on any contributions 
                        described in clause (i), (ii), or (iii).
                    ``(B) No requirement to take available loan.--A 
                distribution shall not be treated as failing to be made 
                upon the hardship of an employee solely because the 
                employee does not take any available loan under the 
                plan.
                    ``(C) Participation in arrangement not conditioned 
                on whether hardship distribution made.--In determining 
                whether a distribution is made upon the hardship of an 
                employee, the Secretary shall not take into account 
                whether or not an employee makes elective or employee 
                contributions under the arrangement for any period 
                after the distribution.''.
    (b) Conforming Amendment.--Subclause (IV) of section 
401(k)(2)(B)(i) is amended to read as follows:
                                    ``(IV) subject to the provisions of 
                                paragraph (15), upon hardship of the 
                                employee, or''.
    (c) Effective Date.--The amendments made by this section shall 
apply to distributions made after December 31, 2013.

SEC. 215. INDIVIDUAL MAY ROLL OVER INSURANCE CONTRACT INTO INDIVIDUAL 
              RETIREMENT ACCOUNT.

    (a) In General.--Section 408(a) is amended by adding at the end the 
following new flush sentence:
``A trust shall not be treated as failing to meet the requirements of 
paragraph (3) merely because it holds a life insurance contract which 
was transferred to the trust in a rollover contribution described in 
paragraph (1).''.
    (b) Conforming Amendments.--Section 72(m)(3) is amended--
            (1) in subparagraph (A), by striking ``or'' at the end of 
        clause (i), by striking the period at the end of clause (ii) 
        and inserting ``, or'', and by adding at the end the following:
                            ``(iii) held by a trust described in 
                        section 408(a) after being contributed to the 
                        trust in a rollover contribution described in 
                        section 408(a)(1).'', and
            (2) in subparagraph (B), by striking ``subparagraph 
        (A)(ii)'' each place it appears and inserting ``clauses (ii) or 
        (iii) of subparagraph (A)''.
    (c) Effective Date.--The amendments made by this section shall 
apply to rollover contributions after December 31, 2013.

SEC. 216. FORFEITURES ALLOCATED TO PARTICIPANT'S ACCOUNT MAY BE TREATED 
              AS EMPLOYER MATCHING OR NONELECTIVE CONTRIBUTIONS.

    (a) In General.--Section 401(k)(12), as amended by sections 206 and 
213 of this Act, is amended by redesignating subparagraph (H) as 
subparagraph (I), and by inserting after subparagraph (G) the 
following:
                    ``(H) Treatment of forfeitures allocated to 
                employee's account.--For purposes of this paragraph and 
                paragraph (13), an employer may treat a forfeiture 
                allocated to an employee's account for any plan year as 
                a matching or nonelective contribution made by the 
                employer which is taken into account in determining 
                whether the contribution requirements of this paragraph 
                or paragraph (13), whichever is applicable, are met.''.
    (b) Effective Date.--The amendment made by this section shall apply 
to plan years beginning after December 31, 2013.

SEC. 217. TIME FOR PROVIDING EXPLANATION OF QUALIFIED PRERETIREMENT 
              SURVIVOR ANNUITY.

    (a) Amendment to Internal Revenue Code of 1986.--Subparagraph (B) 
of section 417(a)(3) is amended to read as follows:
                    ``(B) Explanation of qualified preretirement 
                survivor annuity.--Each plan shall provide to each 
                participant, within a reasonable time after the 
                individual becomes a participant (and consistent with 
                such regulations as the Secretary may prescribe), a 
                written explanation with respect to the qualified 
                preretirement survivor annuity comparable to the 
                explanation required under subparagraph (A). A plan 
                shall be treated as meeting the requirements of this 
                subparagraph if the explanation is included with each 
                summary plan description required to be provided to the 
                participant under section 102 of the Employee 
                Retirement Income Security Act of 1974 (29 U.S.C. 
                1022).''.
    (b) Amendment to Employee Retirement Income Security Act of 1974.--
Subparagraph (B) of section 205(c)(3) of the Employee Retirement Income 
Security Act of 1974 is amended to read as follows:
                    ``(B) Each plan shall provide to each participant, 
                within a reasonable time after the individual becomes a 
                participant (and consistent with such regulations as 
                the Secretary of the Treasury may prescribe), a written 
                explanation with respect to the qualified preretirement 
                survivor annuity comparable to the explanation required 
                under subparagraph (A). A plan shall be treated as 
                meeting the requirements of this subparagraph if the 
                explanation is included with each summary plan 
                description required to be provided to the participant 
                under section 102.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to--
            (1) individuals who become participants after December 31, 
        2013, and
            (2) individuals who became participants before such date 
        but to whom the written explanation under section 417(a)(3)(B) 
        of the Internal Revenue Code of 1986 and section 205(c)(3)(B) 
        of the Employee Retirement Income Security Act of 1974 (as in 
        effect before such amendments) was not required to be provided 
        before January 1, 2014.
In the case of any individual described in paragraph (2), a plan shall 
be treated as meeting the requirements of such sections 417(a)(3)(B) 
and 205(c)(3)(B) (as in effect after such amendments) if the written 
explanation is provided within a reasonable period after December 31, 
2013.

SEC. 218. MODIFICATIONS OF ADDITIONAL PARTICIPATION REQUIREMENTS FOR 
              DEFINED BENEFIT PLANS.

    (a) In General.--Section 401(a)(26) is amended by redesignating 
subparagraph (H) as subparagraph (J) and by inserting after 
subparagraph (G) the following:
                    ``(H) Requirements may be satisfied through minimum 
                contributions to defined contribution plan.--
                            ``(i) In general.--This paragraph shall not 
                        apply to a defined benefit plan of an employer 
                        for any plan year if--
                                    ``(I) the defined benefit plan is 
                                aggregated with a defined contribution 
                                plan of the employer for purposes of 
                                subsection (a)(4) and section 410(b),
                                    ``(II) the defined benefit plan and 
                                the defined contribution plan, when so 
                                aggregated, meet the requirements of 
                                subsection (a)(4) and section 410(b), 
                                and
                                    ``(III) the contribution 
                                requirements of clause (ii) are met 
                                with respect to the defined 
                                contribution plan.
                            ``(ii) Contribution requirements.--The 
                        requirements of this clause are met with 
                        respect to a defined contribution plan if, 
                        under the plan, the employer is required to 
                        make nonelective contributions for the 
                        applicable plan year of at least 7.5 percent of 
                        compensation for a number of employees at least 
                        equal to the number of employees which the 
                        defined benefit plan would have been required 
                        to benefit under this paragraph without regard 
                        to this subparagraph. No highly compensated 
                        employees (within the meaning of section 
                        414(q)) may be taken into account in 
                        determining whether the requirements of this 
                        clause are met.
                            ``(iii) Applicable plan year.--For purposes 
                        of clause (ii), the term `applicable plan year' 
                        means the plan year of the defined contribution 
                        plan which ends with or within the plan year of 
                        the defined benefit plan to which clause (i) 
                        applies.
                    ``(I) Special rules for frozen plans.--
                            ``(i) Aggregation permitted to satisfy 
                        requirements.--
                                    ``(I) In general.--Except as 
                                provided in subclauses (II) and (III), 
                                if a plan is a frozen defined benefit 
                                plan for any plan year, an employer may 
                                aggregate the plan with any other 
                                defined benefit plan or defined 
                                contribution plan of the employer for 
                                purposes of determining whether the 
                                requirements of this paragraph are met 
                                with respect to the frozen defined 
                                benefit plan.
                                    ``(II) Aggregation for other 
                                purposes.--An employer may not apply 
                                subclause (I) unless the employer also 
                                aggregates the plans for purposes of 
                                subsection (a)(4) and section 410(b).
                                    ``(III) Benefits of highly 
                                compensated employees disregarded.--In 
                                the case of any other plan aggregated 
                                with a frozen defined benefit plan 
                                under subclause (I), accrued benefits 
                                of highly compensated employees shall 
                                not be taken into account in applying 
                                subclause (I).
                            ``(ii) Requirements not to apply in certain 
                        cases.--
                                    ``(I) In general.--Except as 
                                provided in subclause (II), this 
                                paragraph shall apply to a frozen 
                                defined benefit plan of an employer for 
                                any plan year only if the employer 
                                maintains any other defined benefit 
                                plan during the 6-year period beginning 
                                with the first day of the plan year.
                                    ``(II) Retroactive application.--
                                Clause (i) shall not apply unless the 
                                frozen defined benefit plan provides 
                                that if the employer establishes or 
                                maintains any other defined benefit 
                                plan during the 6-year period under 
                                subclause (I), each employee (other 
                                than a highly compensated employee) 
                                shall retroactively accrue benefits 
                                under the frozen defined benefit plan 
                                for each year of service the employee 
                                would have had under the plan during 
                                such period (determined as if the 
                                employee were one of the employees 
                                required to benefit under the plan 
                                under this paragraph).
                            ``(iii) Frozen defined benefit plan.--For 
                        purposes of this subparagraph, the term `frozen 
                        defined benefit plan' means a defined benefit 
                        plan which has in effect an amendment that 
                        provides that the plan may not accept any new 
                        participants after the effective date of the 
                        amendment.
                            ``(iv) Highly compensated employee.--The 
                        term `highly compensated employee' has the 
                        meaning given such term by section 414(q).''.
    (b) Effective Date.--The amendment made by this section applies to 
plan years beginning after December 31, 2013.

SEC. 219. TREATMENT OF CUSTODIAL ACCOUNTS ON TERMINATION OF SECTION 
              403(B) PLANS.

    (a) In General.--Section 403(b)(7) is amended by adding at the end 
the following:
                    ``(D) Treatment of custodial account upon plan 
                termination.--
                            ``(i) In general.--If--
                                    ``(I) an employer terminates the 
                                plan under which amounts are 
                                contributed to a custodial account 
                                under subparagraph (A), and
                                    ``(II) the person holding the 
                                assets of the account has demonstrated 
                                to the satisfaction of the Secretary 
                                under section 408(a)(2) that the person 
                                is qualified to be a trustee of an 
                                individual retirement plan,
                        then, as of the date of the termination, the 
                        custodial account shall be deemed to be an 
                        individual retirement plan for purposes of this 
                        title.
                            ``(ii) Treatment as roth ira.--Any 
                        custodial account treated as an individual 
                        retirement plan under clause (i) shall be 
                        treated as a Roth IRA only if the custodial 
                        account was a designated Roth account.''.
    (b) Effective Date.--The amendments made by this section shall 
apply to plan terminations occurring after December 31, 2013.

SEC. 220. SECURE DEFERRAL ARRANGEMENTS.

    (a) In General.--Subsection (k) of section 401, as amended by this 
Act, is amended by adding at the end the following new paragraph:
            ``(16) 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 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 
        arrangements.--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)(16)),
                    ``(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 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 matching and nonelective 
contributions under a secure deferral arrangement (as defined in 
section 401(k)(16)) 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 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, as 
                        amended by subsection (a), is amended by adding 
                        at the end the following new paragraph:
            ``(17) Secure deferral arrangement credit.--For a general 
        business credit with respect to secure deferral arrangements, 
        see section 45S.''.
                            (ii) Subsection (m) of section 401, as 
                        amended by subsection (b), is amended by 
                        redesignating paragraph (14) as paragraph (15) 
                        and by inserting after paragraph (13) the 
                        following new paragraph:
            ``(14) 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 Arrangements.--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)(16) 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, and
            (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)(16)(C) of such Code, especially in 
        cases where the employer has employees subject to different 
        payroll and administrative systems.
    (e) Effective Dates.--
            (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. 221. 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) in the case of a plan maintained by 
                        an employer described in subsection (e)(1)(A), 
                        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. 222. 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. 223. 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.

                     Subtitle C--Longevity Reforms

SEC. 231. MODIFICATION OF REQUIRED MINIMUM DISTRIBUTION RULES WHERE 
              PORTION OF BENEFIT OF DEFINED CONTRIBUTION PLAN IS 
              ANNUITIZED.

    (a) In General.--Section 401(a)(9) is amended by redesignating 
subparagraph (F) as subparagraph (G) and by inserting after 
subparagraph (E) the following:
                    ``(F) Exemption for certain annuitized amounts.--
                This paragraph shall not apply to the portion of an 
                employee's entire interest under a defined contribution 
                plan which is invested in a qualified deferred annuity 
                in accordance with the requirements of subsection 
                (o).''.
    (b) Investment in Qualified Annuity.--Section 401 is amended by 
redesignating subsection (o) as subsection (p) and by inserting after 
subsection (n) the following:
    ``(o) Rules and Definitions Relating to Investments in Qualified 
Deferred Annuities.--
            ``(1) In general.--Subparagraph (F) of subsection (a)(9) 
        shall apply to the portion of an employee's entire interest 
        under the plan invested in a qualified deferred annuity only 
        if--
                    ``(A) the annuity contract is purchased on or 
                before the required beginning date, and
                    ``(B) the investment in the contract does not 
                exceed 25 percent of the employee's entire interest 
                under the plan as of the close of the calendar year 
                preceding the calendar year in which the purchase 
                occurs.
            ``(2) Exception applies only to 1 annuity.--Subparagraph 
        (F) of subsection (a)(9) shall apply only with respect to 1 
        qualified deferred annuity purchased with a portion of an 
        employee's interest in any plan.
            ``(3) Qualified deferred annuity.--For purposes of 
        subsection (a)(9)(F) and this subsection, the term `qualified 
        deferred annuity' means an annuity contract--
                    ``(A) which is a commercial annuity (as defined in 
                section 3405(e)(6)) which provides benefits in the form 
                of either--
                            ``(i) a single annuity for the life of the 
                        employee under which the annuity payments are 
                        substantially equal periodic payments made not 
                        less frequently than annually, or
                            ``(ii) a qualified joint and survivor 
                        annuity (as defined in section 417(b)) which is 
                        the actuarial equivalent of an annuity under 
                        clause (i), and
                    ``(B) under which payments are deferred but must 
                commence no later than the date on which the employee 
                attains the age of 85.
            ``(4) Employee dying before distributions begin.--If--
                    ``(A) an employee dies before the distribution of 
                the employee's interest has begun in accordance with 
                subsection (a)(9)(A)(ii) and before the employee has 
                invested in a qualified deferred annuity in accordance 
                with this subsection, and
                    ``(B) the designated beneficiary is the surviving 
                spouse of the employee,
        the surviving spouse may invest any portion of the entire 
        interest in a qualified deferred annuity in accordance with 
        this subsection in the same manner as the employee but the 
        required beginning date shall not be earlier than, and the 
        deferral period of the annuity shall be based on, the dates the 
        employee would have attained the age of 70\1/2\ or 85, 
        respectively.
            ``(5) Special rule for iras and 403(b)s.--In the case of 
        individual retirement plans and annuity contracts to which the 
        requirements of subsection (a)(9) apply by reason of 
        subsections (a)(6) and (b)(3) of section 408 and section 
        403(b)(10), the employee may elect to treat all such plans and 
        accounts with the same required beginning date as 1 plan for 
        purposes of applying this subsection.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to investments in annuity contracts after December 31, 2013.

SEC. 232. UPDATING OF MORTALITY TABLES FOR MINIMUM REQUIRED 
              DISTRIBUTIONS.

    Section 401(a)(9), as amended by section 231, is amended by 
redesignating subparagraph (G) as subparagraph (H) and by inserting 
after subparagraph (F) the following:
                    ``(G) Mortality tables.--
                            ``(i) Initial update.--Not later than 1 
                        year after the date of the enactment of this 
                        subparagraph, the Secretary shall either 
                        update, or provide new tables to replace, the 
                        mortality tables used as of such date for 
                        purposes of this paragraph.
                            ``(ii) Periodic revision.--The Secretary 
                        shall (at least every 5 years) make revisions 
                        in, or provide new tables to replace, any table 
                        in effect under this subparagraph to reflect 
                        the actual experience of pension plans and 
                        projected trends in such experience.
                            ``(iii) Effective date.--Any table 
                        prescribed under this subparagraph shall apply 
                        to plan years beginning after the date which is 
                        1 year after publication of the final table.''.

SEC. 233. MINIMUM REQUIRED DISTRIBUTIONS MAY BE ROLLED OVER INTO ROTH 
              IRAS.

    (a) In General.--Section 408A(e) is amended by adding at the end 
the following:
            ``(3) Rollover of minimum required distributions allowed.--
        Section 408(d)(3)(E) shall not apply in determining whether a 
        rollover contribution is a qualified rollover distribution 
        under paragraph (1).''.
    (b) Effective Date.--The amendment made by this section shall apply 
to distributions for taxable years beginning after December 31, 2013.

SEC. 234. TRANSFER OF MINIMUM SURVIVOR ANNUITY REQUIREMENTS FROM PLAN 
              SPONSORS TO ANNUITY PROVIDERS.

    (a) Amendment of 1986 Code.--Section 417 is amended by adding at 
the end the following:
    ``(h) Transfer of Minimum Survivor Annuity Requirements From Plan 
Sponsors to Annuity Providers.--
            ``(1) In general.--If a defined contribution plan to which 
        the requirements of section 401(a)(11) and this section apply 
        has a designated annuity provider, then, except as provided in 
        paragraph (3), the designated annuity provider (and not any 
        plan sponsor or administrator) shall be liable for any failure 
        to meet any such requirement.
            ``(2) Designated annuity provider.--For purposes of this 
        subsection, the term `designated annuity provider' means a 
        person licensed under the laws of any State to issue annuity 
        contracts which has entered into a contract with the plan 
        sponsor or other person who is a fiduciary with respect to the 
        plan to--
                    ``(A) provide annuity contracts to participants and 
                beneficiaries under the plan, and
                    ``(B) meet all requirements under this section and 
                section 401(a)(11) with respect to the providing of 
                such annuities, including providing such annuities in 
                the proper form, providing any notice or written 
                explanations during any applicable notice period, and 
                providing the opportunity for participants and their 
                spouses or beneficiaries to make appropriate elections 
                during any applicable election period.
            ``(3) Requirement for prudent solicitation and retention of 
        provider.--This subsection shall apply to a plan with a 
        designated annuity provider only if the plan sponsor or other 
        person who is a fiduciary with respect to the plan met all 
        requirements for the prudent selection and periodic review of 
        the annuity provider with respect to whom a contract described 
        in paragraph (2) was entered into.
            ``(4) Authority to charge fees to participants.--A plan 
        shall not be treated as failing to meet the requirements of 
        this subsection merely because plan assets are used to pay for 
        reasonable expenses of the designated annuity provider in 
        meeting the requirements described in paragraph (2)(B).
            ``(5) Electronic notification.--The Secretary shall, to the 
        maximum extent practicable, ensure that notices and 
        explanations provided by the designated annuity provider are 
        provided in electronic form.''.
    (b) Amendment of ERISA.--Section 205 of the Employee Retirement 
Income Security Act of 1974 (29 U.S.C. 1055) is amended by adding at 
the end the following:
    ``(m) Transfer of Minimum Survivor Annuity Requirements From Plan 
Sponsors to Annuity Providers.--
            ``(1) In general.--If an individual account plan to which 
        the requirements of this section apply has a designated annuity 
        provider, then, except as provided in paragraph (3), the 
        designated annuity provider (and not any plan sponsor or 
        administrator) shall be liable for any failure to meet any such 
        requirement.
            ``(2) Designated annuity provider.--For purposes of this 
        subsection, the term `designated annuity provider' means a 
        person licensed under the laws of any State to issue annuity 
        contracts which has entered into a contract with the plan 
        sponsor or other person who is a fiduciary with respect to the 
        plan to--
                    ``(A) provide annuity contracts to participants and 
                beneficiaries under the plan, and
                    ``(B) meet all requirements under this section and 
                section 401(a)(11) of the Internal Revenue Code of 1986 
                with respect to the providing of such annuities, 
                including providing such annuities in the proper form, 
                providing any notice or written explanations during any 
                applicable notice period, and providing the opportunity 
                for participants and their spouses or beneficiaries to 
                make appropriate elections during any applicable 
                election period.
            ``(3) Requirement for prudent solicitation and retention of 
        provider.--This subsection shall apply to a plan with a 
        designated annuity provider only if the plan sponsor or other 
        person who is a fiduciary with respect to the plan met all 
        requirements for the prudent selection and periodic review of 
        the annuity provider with respect to whom a contract described 
        in paragraph (2) was entered into.
            ``(4) Authority to charge fees to participants.--A plan 
        shall not be treated as failing to meet the requirements of 
        this subsection merely because plan assets are used to pay for 
        reasonable expenses of the designated annuity provider in 
        meeting the requirements described in paragraph (2)(B).
            ``(5) Electronic notification.--The Secretary of the 
        Treasury shall, to the maximum extent practicable, ensure that 
        notices and explanations provided by the designated annuity 
        provider are provided in electronic form.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to plan years beginning after December 31, 2013.

SEC. 235. 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.

 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.
                                 <all>
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