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[Congressional Bills 115th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4523 Introduced in House (IH)]

<DOC>

115th CONGRESS
  1st Session
                                H. R. 4523

 To amend the Internal Revenue Code of 1986 to expand retirement plan 
    coverage, increase retirement security, and for other purposes.

_______________________________________________________________________

                    IN THE HOUSE OF REPRESENTATIVES

                            December 1, 2017

   Mr. Neal introduced the following bill; which was referred to the 
   Committee on Ways and Means, and in addition to the Committee on 
Education and the Workforce, for a period to be subsequently determined 
 by the Speaker, in each case for consideration of such provisions as 
        fall within the jurisdiction of the committee concerned

_______________________________________________________________________

                                 A BILL

 
 To amend the Internal Revenue Code of 1986 to expand retirement plan 
    coverage, increase retirement security, 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; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Automatic 
Retirement Plan Act of 2017''.
    (b) Table of Contents.--The table of contents of this Act is as 
follows:

Sec. 1. Short title; table of contents.
Sec. 2. Employers required to maintain automatic contribution plan.
Sec. 3. Deferral-only arrangements.
Sec. 4. Nondiscrimination testing changes to facilitate higher 
                            contributions.
Sec. 5. Multiple employer plans.
Sec. 6. Limitation on employer liability.
Sec. 7. Portability of lifetime income options.
Sec. 8. Increase in credit limitation for small employer pension plan 
                            startup costs.
Sec. 9. Small employer automatic enrollment credit.
Sec. 10. Treatment of automatic contribution plans under State law.
Sec. 11. Matching payments for elective deferral and IRA contributions 
                            by certain individuals.
Sec. 12. Authority to require reporting.

SEC. 2. EMPLOYERS REQUIRED TO MAINTAIN AUTOMATIC CONTRIBUTION PLAN.

    (a) Automatic Contribution Plan.--Section 414 of the Internal 
Revenue Code of 1986 is amended by adding at the end the following:
    ``(aa) Automatic Contribution Plan.--For purposes of this title--
            ``(1) In general.--The term `automatic contribution plan' 
        means a defined contribution plan that--
                    ``(A) is described in clause (i), (ii), or (iv) of 
                section 219(g)(5)(A),
                    ``(B) is described in paragraph (2), and
                    ``(C) meets the eligibility, investment, lifetime 
                income, and fee requirements described in paragraphs 
                (3), (4), (5), and (6), respectively, of this 
                subsection.
            ``(2) Plan described.--A plan is described in this 
        paragraph if the plan is one of the following:
                    ``(A) Deferral only.--A deferral only arrangement 
                that meets the requirements of section 401(k)(14).
                    ``(B) 403(b) plan.--A 403(b) plan that--
                            ``(i) meets the requirements of section 
                        401(k)(14), or
                            ``(ii) would be described in subparagraph 
                        (C) without regard to the references to section 
                        416.
                    ``(C) Testing automatic contribution plan.--A plan 
                that--
                            ``(i) would qualify as a plan described in 
                        subparagraph (A), except that such plan allows 
                        employer contributions, and
                            ``(ii) satisfies sections 401(k)(3)(A)(ii), 
                        401(m)(2), and 416 taking into account all 
                        applicable rules, including--
                                    ``(I) paragraphs (11), (12), and 
                                (13) of section 401(k),
                                    ``(II) paragraphs (10), (11), and 
                                (12) of section 401(m), and
                                    ``(III) section 416(g)(4)(H).
                    ``(D) Grandfathered automatic contribution plan.--A 
                plan described in clause (i), (ii), (iv), (v), or (vi) 
                of section 219(g)(5)(A) that--
                            ``(i) is maintained by an employer as of 
                        the date of enactment of the Automatic 
                        Retirement Plan Act of 2017,
                            ``(ii) has been maintained by such employer 
                        (or a predecessor employer) for at least 1 year 
                        before such date of enactment, and
                            ``(iii) except as provided by the 
                        Secretary, has not had its coverage or benefits 
                        substantially decreased for any plan year 
                        beginning after such date of enactment.
            ``(3) Eligibility requirements.--
                    ``(A) In general.--Subject to subparagraph (B), the 
                eligibility requirements described in this paragraph 
                are that all employees of the employer are eligible to 
                participate in an automatic contribution plan 
                maintained by the employer.
                    ``(B) Certain exclusions.--Subparagraph (A) shall 
                not apply to the following:
                            ``(i) Individuals less than 21 years old.--
                        The employer may, but need not, include an 
                        employee who has not attained age 21 in an 
                        automatic contribution plan maintained by the 
                        employer.
                            ``(ii) Certain other employees.--The 
                        employer may, but need not, include an employee 
                        described in section 410(b)(3) in an automatic 
                        contribution plan maintained by the employer.
                            ``(iii) Part time employees, etc.--No 
                        employee may be treated as ineligible in an 
                        automatic contribution plan maintained by the 
                        employer solely by reason of working on a part-
                        time, temporary, or seasonal basis, except as 
                        otherwise provided in this subparagraph.
                            ``(iv) New employee.--The employer may, but 
                        need not, exclude an employee from an automatic 
                        contribution plan maintained by the employer 
                        until the first day of the second calendar 
                        month beginning on or after the day the 
                        individual begins work for the employer.
                            ``(v) Seasonal or temporary employees.--The 
                        employer may, but need not, exclude an employee 
                        from an automatic contribution plan maintained 
                        by the employer to the extent that such 
                        employee is not expected to work during more 
                        than three months during the 12-month period 
                        starting when such employee would otherwise be 
                        required to be eligible under such plan.
                    ``(C) Special rules for controlled groups.--
                Eligible employees within an employer need not be 
                eligible to participate in the same automatic 
                contribution plan. For purposes of this subsection, the 
                term `employer' shall include all employers treated as 
                a single employer under subsection (b), (c), (m), or 
                (o) of section 414.
                    ``(D) Special rules for grandfathered plans.--This 
                paragraph shall not apply to a plan described in 
                paragraph (2)(D) until the sixth plan year beginning on 
                or after the date of enactment of the Automatic 
                Retirement Plan Act of 2017. In the case of an eligible 
                employer (as defined in section 408(p)(2)(C)(i)), 
                `eighth' shall be substituted for `sixth' in the 
                preceding sentence.
            ``(4) Investment requirements.--Except in the case of a 
        plan that is an automatic contribution plan by reason of 
        paragraph (2)(D), any investment made in the absence of an 
        investment election by a participant or beneficiary shall be 
        invested in accordance with regulations prescribed by the 
        Secretary of Labor under section 404(c)(5) of the Employee 
        Retirement Income Security Act of 1974.
            ``(5) Lifetime income requirements.--Except in the case of 
        a plan that is an automatic contribution plan by reason of 
        paragraph (2)(D), the lifetime income requirements described in 
        this paragraph are--
                    ``(A) Guaranteed income for life available.--A plan 
                shall not be treated as an automatic contribution plan 
                unless the plan permits participants to elect to 
                receive at least 50 percent of their vested account 
                balance in a form of distribution described in section 
                401(a)(38)(B)(iii).
                    ``(B) Exceptions.--This paragraph shall not apply 
                with respect to any participant whose vested account 
                balance is $5,000 or less at the time of distribution.
            ``(6) Fee requirements.--Under the fee requirements of this 
        paragraph, no participant may be charged unreasonable fees 
        solely on the basis that the participant's balance in an 
        automatic contribution plan is small or solely on the basis 
        that adoption of such a plan by the employee's employer is 
        mandatory.''.
    (b) Excise Tax for Failure To Maintain Automatic Contribution 
Plan.--Chapter 43 of such Code is amended by adding at the end the 
following new section:

``SEC. 4980J. FAILURE TO MAINTAIN AUTOMATIC CONTRIBUTION PLAN.

    ``(a) General Rule.--
            ``(1) In general.--There is hereby imposed a tax on the 
        failure of an employer to make eligible to participate in an 
        automatic contribution plan maintained by the employer any 
        employee of the employer who, under the terms of section 
        414(aa), would be required to be eligible to participate in an 
        automatic contribution plan maintained by the employer.
            ``(2) Exceptions.--
                    ``(A) Paragraph (1) shall not apply to an employer 
                to the extent such employer participates in an 
                arrangement under a qualified State law under section 
                514(f)(2) of the Employee Retirement Income Security 
                Act of 1974.
                    ``(B) Paragraph (1) shall not apply to an employer 
                with respect to any employee who is eligible to 
                participate in a different automatic contribution plan 
                than one or more other employees of the employer.
    ``(b) Amount of Tax.--
            ``(1) In general.--The amount of the tax imposed by 
        subsection (a) on any failure with respect to an employee shall 
        be $10 for each day in the noncompliance period with respect to 
        such failure.
            ``(2) Noncompliance period.--For purposes of this section, 
        the term `noncompliance period' means, with respect to any 
        failure, the period--
                    ``(A) beginning on the date such failure first 
                occurs, and
                    ``(B) ending on the earlier of--
                            ``(i) the date such failure is corrected, 
                        or
                            ``(ii) with respect to any employer, the 
                        date that is 3 months after the last date on 
                        which the employee is required to be eligible 
                        to participate in an automatic contribution 
                        plan maintained by such employer.
    ``(c) Limitations on Amount of Tax.--
            ``(1) Tax not to apply where failure not discovered 
        exercising reasonable diligence.--No tax shall be imposed by 
        subsection (a) on any failure during any period for which it is 
        established to the satisfaction of the Secretary that none of 
        the persons referred to in subsection (e) knew that such 
        failure existed.
            ``(2) Tax not to apply to failures corrected within 9\1/2\ 
        months.--No tax shall be imposed by subsection (a) on any 
        failure if--
                    ``(A) such failure was due to reasonable cause and 
                not to willful neglect, and
                    ``(B) such failure is corrected during the 9\1/2\-
                month period beginning on the first date any of the 
                persons referred to in subsection (e) knew that such 
                failure existed.
            ``(3) Overall limitation for unintentional failures.--In 
        the case of failures which are due to reasonable cause and not 
        to willful neglect--
                    ``(A) General rule.--The tax imposed by subsection 
                (a) for failures during the taxable year of the 
                employer shall not exceed $500,000.
                    ``(B) Taxable years in the case of certain 
                controlled groups.--For purposes of this subparagraph, 
                if not all persons who are treated as a single employer 
                for purposes of this section have the same taxable 
                year, the taxable years taken into account shall be 
                determined under principles similar to the principles 
                of section 1561.
            ``(4) Waiver by secretary.--In the case of a failure which 
        is due to reasonable cause and not to willful neglect, the 
        Secretary may waive part or all of the tax imposed by 
        subsection (a) to the extent that the payment of such tax would 
        be excessive relative to the failure involved.
    ``(d) Tax Not To Apply in Certain Cases.--This section shall not 
apply in the case of--
            ``(1) any failure of an employer to meet the requirements 
        of subsection (a) with respect to any employee if the failure 
        with respect to such employee occurred during the calendar year 
        immediately following a calendar year during which all 
        employers maintaining such plan normally employed 10 or fewer 
        employees on a typical business day,
            ``(2) any governmental plan (within the meaning of section 
        414(d)),
            ``(3) any church plan (within the meaning of section 
        414(e)), or
            ``(4) employers that have not been in existence for three 
        years, taking into account all predecessor employers.
    ``(e) Liability for Tax.--The employer shall be liable for the tax 
imposed by subsection (a) on a failure. All employers, determined 
without regard to subsection (f)(2), shall be jointly and severally 
liable for the liability of any other employer with which they are 
aggregated under subsection (f)(2).
    ``(f) Definitions.--For purposes of this section--
            ``(1) the term `automatic contribution plan' has the 
        meaning given such term under section 414(aa), and
            ``(2) the term `employer' includes all employers treated as 
        a single employer under subsection (b), (c), (m), or (o) of 
        section 414.''.
    (c) Clerical Amendment.--The table of sections for chapter 43 of 
the Internal Revenue Code of 1986 is amended by adding at the end the 
following new item:

``Sec. 4980J. Failure to maintain automatic contribution plan.''.
    (d) Effective Date.--
            (1) In general.--The amendments made by subsection (a) 
        shall apply to years beginning after December 31, 2017.
            (2) Delayed effective date.--
                    (A) Large employers.--Except as provided in 
                subparagraph (B), the amendments made by subsections 
                (b) and (c) shall apply to years beginning after 
                December 31, 2019.
                    (B) Small employers.--In the case of an eligible 
                employer (as defined in section 408(p)(2)(C)(i) of the 
                Internal Revenue Code of 1986), the amendments made by 
                subsections (b) and (c) shall apply to years beginning 
                after December 31, 2021.

SEC. 3. DEFERRAL-ONLY ARRANGEMENTS.

    (a) In General.--Subsection (k) of section 401 of the Internal 
Revenue Code of 1986 is amended by adding at the end the following new 
paragraph:
            ``(14) Deferral-only arrangement.--
                    ``(A) In general.--A deferral-only arrangement 
                shall be treated as meeting the requirements of 
                paragraph (3)(A)(ii).
                    ``(B) Deferral-only arrangement.--For purposes of 
                this paragraph, the term `deferral-only arrangement' 
                means any cash or deferred arrangement which meets--
                            ``(i) the automatic deferral requirements 
                        of subparagraph (C),
                            ``(ii) the elective contribution 
                        requirement 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 who is not contributing or is 
                        contributing less than the qualified percentage 
                        applicable to an eligible employee in the first 
                        year of eligibility is treated as having 
                        elected in applicable years to have the 
                        employer make elective contributions in an 
                        amount equal to the qualified percentage of 
                        compensation applicable under clause (iii). In 
                        the absence of an election out as described in 
                        clause (ii), such election shall, as adjusted 
                        under clause (iii), remain in effect for all 
                        subsequent years, regardless of whether such 
                        years are applicable years.
                            ``(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, 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 clause (i) is 
                                made with respect to such employee 
                                (disregarding any elective contribution 
                                made for any preceding year that 
                                preceded a year in which the employee 
                                made an affirmative election described 
                                in clause (ii)),
                                    ``(II) at least 7 percent during 
                                the first plan year following the plan 
                                year described in subclause (I),
                                    ``(III) at least 8 percent during 
                                the first plan year following the plan 
                                year described in subclause (II),
                                    ``(IV) at least 9 percent during 
                                the first plan year following the plan 
                                year described in subclause (III), and
                                    ``(V) At least 10 percent during 
                                any subsequent plan year.
                            ``(iv) Applicable year every third year.--
                                    ``(I) In general.--For purposes of 
                                this subparagraph, the term `applicable 
                                year' means, with respect to an 
                                employee, such employee's first plan 
                                year of eligibility under the 
                                arrangement, and all subsequent plan 
                                years of eligibility.
                                    ``(II) Exception.--Following any 
                                applicable year of the employee 
                                (determined after the application of 
                                this subclause), the plan may elect to 
                                treat the next one or two plan years as 
                                not being applicable years with respect 
                                to such employee.
                    ``(D) Elective contributions.--
                            ``(i) In general.--The requirements of this 
                        subparagraph are met if under the plan 
                        containing the arrangement--
                                    ``(I) the only contributions which 
                                may be made are elective contributions 
                                of employees who are eligible to 
                                participate in the arrangement, 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, 2018, the $8,000 amount under 
                        clause (i) shall be adjusted in the same manner 
                        as cost of living adjustments are made under 
                        section 402(g)(4), except that `2017' shall be 
                        substituted for `2005'.
                            ``(iii) Cross reference.--For catch-up 
                        contributions for individuals age 50 or over, 
                        see section 414(v).''.
    (b) Catch-Up Contributions for Individuals Age 50 and Over.--
            (1) Clause (i) of section 414(v)(2)(B) of such Code is 
        amended by inserting ``, 401(k)(14),'' after ``401(k)(11)''.
            (2) Section 414(v)(2)(B) of such Code is amended by adding 
        at the end thereof the following clause:
                            ``(iii) in the case of an applicable 
                        employer plan described in section 401(k)(14), 
                        the applicable dollar amount is $1,000.''.
            (3) Section 414(v)(2)(C) of such Code is amended by--
                    (A) by striking ``(B)(i) and'' and inserting 
                ``(B)(i),'' and by inserting after ``subparagraph 
                (B)(ii)'' the following: ``, and the $1,000 amount 
                described in subparagraph (B)(iii)'', and
                    (B) inserting after ``2005'' the following: ``(the 
                calendar quarter beginning July 1, 2017, in the case of 
                the $1,000 amount described in subparagraph 
                (B)(iii))''.
    (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 deferral-only 
arrangement described in section 401(k)(14)(B) of the Internal Revenue 
Code of 1986'' before the period at the end.
    (d) Plans Not Treated as Top-Heavy Plans.--Clause (i) of section 
416(g)(4)(H) of such Code 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, 2017.

SEC. 4. NONDISCRIMINATION TESTING CHANGES TO FACILITATE HIGHER 
              CONTRIBUTIONS.

    (a) In General.--Clause (iii) of section 401(k)(13)(C) of the 
Internal Revenue Code of 1986 is amended by striking ``, does not 
exceed 10 percent, and is at least'' and inserting ``and is''.
    (b) Conforming Amendments.--
            (1) Subclause (I) of section 401(k)(13)(C)(iii) of such 
        Code is amended by striking ``3 percent'' and inserting ``at 
        least 3 percent, but not greater than 10 percent,''.
            (2) Subclause (II) of section 401(k)(13)(C)(iii) of such 
        Code is amended by striking ``4 percent'' and inserting ``at 
        least 4 percent''.
            (3) Subclause (III) of section 401(k)(13)(C)(iii) of such 
        Code is amended by striking ``5 percent'' and inserting ``at 
        least 5 percent''.
            (4) Subclause (IV) of section 401(k)(13)(C)(iii) of such 
        Code is amended by striking ``6 percent'' and inserting ``at 
        least 6 percent''.
    (c) Matching Contributions.--Clause (i) of section 401(m)(11)(B) of 
such Code is amended by striking ``6'' and inserting ``10''.
    (d) Effective Date.--The amendments made by this section shall 
apply to plan years beginning after December 31, 2017.

SEC. 5. MULTIPLE EMPLOYER PLANS.

    (a) Qualification Requirements.--
            (1) In general.--Section 413 of the Internal Revenue Code 
        of 1986, as amended by this Act, is amended by adding at the 
        end the following new subsection:
    ``(g) Application of Qualification Requirements for Certain 
Multiple Employer Plans With Pooled Plan Providers.--
            ``(1) In general.--Except as provided in paragraph (2), a 
        defined contribution plan to which subsection (c) applies shall 
        not be treated as failing to meet the requirements under this 
        title applicable to a plan described in section 401(a) or to a 
        plan that consists of individual retirement accounts described 
        in section 408 (including by reason of subsection (c) thereof), 
        whichever is applicable, merely because one or more employers 
        of employees covered by the plan fail to take such actions as 
        are required of such employers for the plan to meet such 
        requirements if the plan--
                    ``(A) is sponsored by employers all of which have 
                both a common interest other than having adopted the 
                plan and control of the plan, or
                    ``(B) in the case of a plan not described in 
                subparagraph (A), has a pooled plan provider.
            ``(2) Limitations.--
                    ``(A) In general.--Paragraph (1) shall not apply to 
                any plan unless the terms of the plan provide that in 
                cases of employers failing to take the actions 
                described in paragraph (1)--
                            ``(i) the assets of the plan attributable 
                        to employees of the employer will be 
                        transferred to a plan maintained only by the 
                        employer (or its successor), to an eligible 
                        retirement plan as defined in section 
                        402(c)(8)(B) for each individual whose account 
                        is transferred, or to any other arrangement 
                        that the Secretary determines is appropriate, 
                        unless the Secretary determines it is in the 
                        best interests of such employees to retain the 
                        assets in the plan, and
                            ``(ii) the employer described in clause (i) 
                        (and not the plan with respect to which the 
                        failure occurred or any other participating 
                        employer in such plan) shall, except to the 
                        extent provided by the Secretary, be liable for 
                        any liabilities with respect to such plan 
                        attributable to employees of the employer.
                    ``(B) Failures by pooled plan providers.--If the 
                pooled plan provider of a plan described in paragraph 
                (1)(B) does not perform substantially all of the 
                administrative duties which are required of the 
                provider under paragraph (3)(A)(i) for any plan year, 
                the Secretary, in the Secretary's own discretion, may 
                provide that the determination as to whether the plan 
                meets the requirements under this title applicable to a 
                plan described in section 401(a) or to a plan that 
                consists of individual retirement accounts described in 
                section 408 (including by reason of subsection (c) 
                thereof), whichever is applicable, shall be made in the 
                same manner as would be made without regard to 
                paragraph (1).
            ``(3) Pooled plan provider.--For purposes of this 
        subsection--
                    ``(A) In general.--The term `pooled plan provider' 
                means, with respect to any plan, a person who--
                            ``(i) is designated by the terms of the 
                        plan as a named fiduciary (as defined in 
                        section 402(a)(2) of the Employee Retirement 
                        Income Security Act of 1974), as the plan 
                        administrator, and as the person responsible to 
                        perform all administrative duties (including 
                        conducting proper testing with respect to the 
                        plan and employees of each participating 
                        employer) which are reasonably necessary to 
                        ensure that--
                                    ``(I) the plan meets any 
                                requirement applicable under the 
                                Employee Retirement Income Security Act 
                                of 1974 or this title to a plan 
                                described in section 401(a) or to a 
                                plan that consists of individual 
                                retirement accounts described in 
                                section 408 (including by reason of 
                                subsection (c) thereof), whichever is 
                                applicable, and
                                    ``(II) each participating employer 
                                takes such actions as the Secretary or 
                                such person determines are necessary 
                                for the plan to meet the requirements 
                                described in subclause (I), including 
                                providing to such person any 
                                disclosures or other information which 
                                the Secretary may require or which such 
                                person otherwise determines is 
                                necessary to administer the plan or to 
                                allow the plan to meet such 
                                requirements,
                            ``(ii) registers as a pooled plan provider 
                        with the Secretary, and provides such other 
                        information to the Secretary as the Secretary 
                        may require, before beginning operations as a 
                        pooled plan provider,
                            ``(iii) acknowledges in writing that such 
                        person is a named fiduciary (within the meaning 
                        of section 402(a)(2) of the Employee Retirement 
                        Income Security Act of 1974), and the plan 
                        administrator, with respect to the plan, and
                            ``(iv) is responsible for ensuring that all 
                        persons who handle assets of, or who are 
                        fiduciaries of, the plan are bonded in 
                        accordance with section 412 of the Employee 
                        Retirement Income Security Act of 1974.
                    ``(B) Audits, examinations, and investigations.--
                The Secretary may perform audits, examinations, and 
                investigations of pooled plan providers as may be 
                necessary to enforce and carry out the purposes of this 
                subsection.
            ``(4) Guidance.--
                    ``(A) In general.--The Secretary shall issue such 
                guidance as the Secretary determines appropriate to 
                carry out this subsection, including guidance--
                            ``(i) to identify the administrative duties 
                        and other actions required to be performed by a 
                        pooled plan provider under this subsection,
                            ``(ii) which describes the procedures to be 
                        taken to terminate a plan which fails to meet 
                        the requirements to be a plan described in 
                        paragraph (1), including the proper treatment 
                        of, and actions needed to be taken by, any 
                        participating employer of the plan and the 
                        assets and liabilities of the plan with respect 
                        to employees of that employer, and
                            ``(iii) identifying appropriate cases to 
                        which the rules of paragraph (2)(A) will apply 
                        to employers failing to take the actions 
                        described in paragraph (1).
                The Secretary shall take into account under clause 
                (iii) whether the failure of an employer or pooled plan 
                provider to provide any disclosures or other 
                information, or to take any other action, necessary to 
                administer a plan or to allow a plan to meet 
                requirements applicable to the plan under section 
                401(a) or 408, whichever is applicable, has continued 
                over a period of time that clearly demonstrates a lack 
                of commitment to compliance.
                    ``(B) Prospective application.--Any guidance issued 
                by the Secretary under this paragraph shall not apply 
                to any action or failure occurring before the issuance 
                of such guidance.
            ``(5) Model plan.--No later than June 30, 2018, the 
        Secretary shall, in consultation with the Secretary of Labor 
        when appropriate, publish model plan language which meets the 
        requirements of this subsection and of paragraphs (43) and (44) 
        of section 3 of the Employee Retirement Income Security Act of 
        1974 and which may be adopted in order for a plan to be treated 
        as a plan described in paragraph (1)(B). Such model plans shall 
        also include options under which they can be used by plans that 
        are not pooled employer plans.''.
            (2) Conforming amendment.--Paragraph (3) of section 413(b) 
        of such Code is amended by striking ``section 401(a)'' and 
        inserting ``sections 401(a) and 408(c)''.
            (3) Technical amendment.--Subsection (c) of section 408 of 
        such Code is amended by inserting after paragraph (2) the 
        following new paragraph:
            ``(3) There is a separate accounting for any interest of an 
        employee or member (or spouse of an employee or member) in a 
        Roth IRA.''.
    (b) No Common Interest Required for Pooled Employer Plans.--Section 
3(2) of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 
1002(2)) is amended by adding at the end the following:
                    ``(C) A pooled employer plan shall be treated as--
                            ``(i) a single employee pension benefit 
                        plan or single pension plan, and
                            ``(ii) a plan to which section 210(a) 
                        applies.''.
    (c) Pooled Employer Plan and Provider Defined.--
            (1) In general.--Section 3 of the Employee Retirement 
        Income Security Act of 1974 (29 U.S.C. 1002) is amended by 
        adding at the end the following:
            ``(43) Pooled employer plan.--
                    ``(A) In general.--The term `pooled employer plan' 
                means a plan--
                            ``(i) which is an individual account plan 
                        established or maintained for the purpose of 
                        providing benefits to the employees of two or 
                        more employers;
                            ``(ii) which is a plan described in section 
                        401(a) of the Internal Revenue Code of 1986 
                        which includes a trust exempt from tax under 
                        section 501(a) of such Code or a plan that 
                        consists of individual retirement accounts 
                        described in section 408 of such Code 
                        (including by reason of subsection (c) 
                        thereof); and
                            ``(iii) the terms of which meet the 
                        requirements of subparagraph (B).
                Such term shall not include a plan with respect to 
                which all of the participating employers have both a 
                common interest other than having adopted the plan and 
                control of the plan.
                    ``(B) Requirements for plan terms.--The 
                requirements of this subparagraph are met with respect 
                to any plan if the terms of the plan--
                            ``(i) designate a pooled plan provider and 
                        provide that the pooled plan provider is a 
                        named fiduciary of the plan;
                            ``(ii) designate one or more trustees 
                        meeting the requirements of section 408(a)(2) 
                        of the Internal Revenue Code of 1986 (other 
                        than a participating employer) to be 
                        responsible for collecting contributions to, 
                        and holding the assets of, the plan and require 
                        such trustees to implement written contribution 
                        collection procedures that are reasonable, 
                        diligent, and systematic;
                            ``(iii) except as provided in section 
                        404(e), provide that each participating 
                        employer retains fiduciary responsibility for--
                                    ``(I) the selection and monitoring 
                                in accordance with section 404(a) of 
                                the person designated as the pooled 
                                plan provider and any other person who, 
                                in addition to the pooled plan 
                                provider, is designated as a named 
                                fiduciary of the plan; and
                                    ``(II) to the extent not otherwise 
                                delegated to another fiduciary by the 
                                pooled plan provider and subject to the 
                                provisions of section 404(c), the 
                                investment and management of that 
                                portion of the plan's assets 
                                attributable to the employees of that 
                                participating employer;
                            ``(iv) provide that a participating 
                        employer, or a participant or beneficiary, is 
                        not subject to unreasonable restrictions, fees, 
                        or penalties with regard to ceasing 
                        participation, receipt of distributions, or 
                        otherwise transferring assets of the plan in 
                        accordance with section 208 or paragraph 
                        (44)(C)(i)(II);
                            ``(v) require--
                                    ``(I) the pooled plan provider to 
                                provide to participating employers any 
                                disclosures or other information which 
                                the Secretary may require, including, 
                                as applicable, any disclosures or other 
                                information to facilitate the selection 
                                or any monitoring of the pooled plan 
                                provider by participating employers; 
                                and
                                    ``(II) each participating employer 
                                to take such actions as the Secretary 
                                or the pooled plan provider determines 
                                are necessary to administer the plan or 
                                for the plan to meet any requirement 
                                applicable under this Act or the 
                                Internal Revenue Code of 1986 to a plan 
                                described in section 401(a) of such 
                                Code or to a plan that consists of 
                                individual retirement accounts 
                                described in section 408 of such Code 
                                (including by reason of subsection (c) 
                                thereof), whichever is applicable, 
                                including providing any disclosures or 
                                other information which the Secretary 
                                may require or which the pooled plan 
                                provider otherwise determines is 
                                necessary to administer the plan or to 
                                allow the plan to meet such 
                                requirements; and
                            ``(vi) provide that any disclosure or other 
                        information required to be provided under 
                        clause (v) may be provided in electronic form 
                        and will be designed to ensure only reasonable 
                        costs are imposed on pooled plan providers and 
                        participating employers.
                    ``(C) Exceptions.--The term `pooled employer plan' 
                does not include--
                            ``(i) a multiemployer plan;
                            ``(ii) a plan established before January 1, 
                        2016, unless the plan administrator elects that 
                        the plan will be treated as a pooled employer 
                        plan and the plan meets the requirements of 
                        this title applicable to a pooled employer plan 
                        established on or after such date; and
                            ``(iii) a plan with respect to which all of 
                        the participating employers have both a common 
                        interest other than having adopted the plan and 
                        control of the plan.
            ``(44) Pooled plan provider.--
                    ``(A) In general.--The term `pooled plan provider' 
                means a person who--
                            ``(i) is designated by the terms of a 
                        pooled employer plan as a named fiduciary, as 
                        the plan administrator, and as the person 
                        responsible for the performance of all 
                        administrative duties (including conducting 
                        proper testing with respect to the plan and 
                        employees of each participating employer) which 
                        are reasonably necessary to ensure that--
                                    ``(I) the plan meets any 
                                requirement applicable under this Act 
                                or the Internal Revenue Code of 1986 to 
                                a plan described in section 401(a) of 
                                such Code or to a plan that consists of 
                                individual retirement accounts 
                                described in section 408 of such Code 
                                (including by reason of subsection (c) 
                                thereof), whichever is applicable; and
                                    ``(II) each participating employer 
                                takes such actions as the Secretary or 
                                pooled plan provider determines are 
                                necessary for the plan to meet the 
                                requirements described in subclause 
                                (I), including providing the 
                                disclosures and information described 
                                in paragraph (43)(B)(v)(II);
                            ``(ii) registers as a pooled plan provider 
                        with the Secretary, and provides to the 
                        Secretary such other information as the 
                        Secretary may require, before beginning 
                        operations as a pooled plan provider;
                            ``(iii) acknowledges in writing that such 
                        person is a named fiduciary, and the plan 
                        administrator, with respect to the pooled 
                        employer plan; and
                            ``(iv) is responsible for ensuring that all 
                        persons who handle assets of, or who are 
                        fiduciaries of, the pooled employer plan are 
                        bonded in accordance with section 412.
                    ``(B) Audits, examinations, and investigations.--
                The Secretary may perform audits, examinations, and 
                investigations of pooled plan providers as may be 
                necessary to enforce and carry out the purposes of this 
                paragraph and paragraph (43).
                    ``(C) Guidance.--
                            ``(i) In general.--The Secretary shall 
                        issue such guidance as the Secretary determines 
                        appropriate to carry out this paragraph and 
                        paragraph (43), including guidance--
                                    ``(I) to identify the 
                                administrative duties and other actions 
                                required to be performed by a pooled 
                                plan provider under either such 
                                paragraph; and
                                    ``(II) which requires in 
                                appropriate cases that if a 
                                participating employer fails to take 
                                the actions required under subparagraph 
                                (A)(i)(II)--
                                            ``(aa) the assets of the 
                                        plan attributable to employees 
                                        of the participating employer 
                                        are transferred to a plan 
                                        maintained only by the 
                                        participating employer (or its 
                                        successor), to an eligible 
                                        retirement plan as defined in 
                                        section 402(c)(8)(B) of the 
                                        Internal Revenue Code of 1986 
                                        for each individual whose 
                                        account is transferred, or to 
                                        any other arrangement that the 
                                        Secretary determines is 
                                        appropriate in such guidance; 
                                        and
                                            ``(bb) the participating 
                                        employer described in item (aa) 
                                        (and not the plan with respect 
                                        to which the failure occurred 
                                        or any other participating 
                                        employer in such plan) shall, 
                                        except to the extent provided 
                                        in such guidance, be liable for 
                                        any liabilities with respect to 
                                        such plan attributable to 
                                        employees of the participating 
                                        employer.
                                The Secretary shall take into account 
                                under subclause (II) whether the 
                                failure of an employer or pooled plan 
                                provider to provide any disclosures or 
                                other information, or to take any other 
                                action, necessary to administer a plan 
                                or to allow a plan to meet requirements 
                                described in subparagraph (A)(i)(II) 
                                has continued over a period of time 
                                that clearly demonstrates a lack of 
                                commitment to compliance. The Secretary 
                                may waive the requirements of subclause 
                                (II)(aa) in appropriate circumstances 
                                if the Secretary determines it is in 
                                the best interests of the employees of 
                                the participating employer described in 
                                such clause to retain the assets in the 
                                plan with respect to which the 
                                employer's failure occurred.
                            ``(ii) Prospective application.--Any 
                        guidance issued by the Secretary under this 
                        subparagraph shall not apply to any action or 
                        failure occurring before the issuance of such 
                        guidance.
                    ``(D) Aggregation rules.--For purposes of this 
                paragraph--
                            ``(i) In general.--In determining whether a 
                        person meets the requirements of this paragraph 
                        to be a pooled plan provider with respect to 
                        any plan, all persons who are members of the 
                        same controlled group and who perform services 
                        for the plan shall be treated as one person.
                            ``(ii) Members of common group.--Persons 
                        shall be treated as members of the same 
                        controlled group if such persons are treated as 
                        a single employer under subsection (c) or (d) 
                        of section 210.''.
            (2) Bonding requirements for pooled employer plans.--The 
        last sentence of section 412(a) of the Employee Retirement 
        Income Security Act of 1974 (29 U.S.C. 1112(a)) is amended by 
        inserting ``or in the case of a pooled employer plan (as 
        defined in section 3(43)'' after ``section 407(d)(1))''.
            (3) Conforming and technical amendments.--Section 3 of the 
        Employee Retirement Income Security Act of 1974 (29 U.S.C. 
        1002) is amended--
                    (A) in paragraph (16)(B)--
                            (i) by striking ``or'' at the end of clause 
                        (ii); and
                            (ii) by striking the period at the end and 
                        inserting ``, or (iv) in the case of a pooled 
                        employer plan, the pooled plan provider.''; and
                    (B) by striking the second paragraph (41).
    (d) Effective Date.--
            (1) In general.--The amendments made by this section shall 
        apply to years beginning after December 31, 2019.
            (2) Rule of construction.--Nothing in the amendments made 
        by subsection (a) shall be construed as limiting the authority 
        of the Secretary of the Treasury or the Secretary's delegate 
        (determined without regard to such amendment) to provide for 
        the proper treatment of a failure to meet any requirement 
        applicable under the Internal Revenue Code of 1986 with respect 
        to one employer (and its employees) in a multiple employer 
        plan.

SEC. 6. LIMITATION ON EMPLOYER LIABILITY.

    Section 404 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:
    ``(e)(1) An eligible employer (as defined in section 
408(p)(2)(C)(i) of the Internal Revenue Code of 1986) shall not be a 
fiduciary in any respect with respect to a pooled employer plan, 
including with respect to the selection or monitoring of any plan 
service provider or any investment under the plan, if the pooled plan 
provider--
            ``(A) receives no more than reasonable compensation for its 
        services, as agreed to by the eligible employer, and
            ``(B) agrees in the plan document to--
                    ``(i) comply with all requirements applicable to a 
                pooled plan provider under this title, and
                    ``(ii) assume, with respect to such eligible 
                employer as agreed to by the eligible employer, all 
                fiduciary responsibility with respect to the plan not 
                retained by the eligible employer, and
            ``(C) notifies the eligible employer of its obligations 
        under the pooled employer plan.
    ``(2) Notwithstanding paragraph (1), eligible employers 
participating in such a pooled employer plan shall be responsible for--
            ``(A) meeting the enrollment requirements applicable to 
        such employer under the plan,
            ``(B) transmitting contributions to the plan in accordance 
        with the terms of the plan,
            ``(C) providing such information and assistance as is 
        within the sole control of the eligible employer and is needed 
        by the plan to operate in accordance with the plan document, 
        and
            ``(D) providing such other information or assistance in 
        accordance with regulations prescribed by the Secretary.''.

SEC. 7. PORTABILITY OF LIFETIME INCOME OPTIONS.

    (a) In General.--Subsection (a) of section 401 of the Internal 
Revenue Code of 1986 is amended by inserting after paragraph (37) the 
following new paragraph:
            ``(38) Portability of lifetime income and managed account 
        options.--
                    ``(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 a managed account 
                        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 or such 
                managed account 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), and in the case of a managed 
                        account investment, the eligible retirement 
                        plan must be maintained by the account manager 
                        of such managed account investment,
                            ``(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,
                            ``(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),
                            ``(v) the term `managed account investment' 
                        means an investment option under which the 
                        assets of the employee's individual account are 
                        managed by an account manager, applying 
                        generally accepted investment theories, to 
                        achieve varying degrees of long-term 
                        appreciation and capital preservation based on 
                        the employee's age, target retirement date or 
                        life expectancy,
                            ``(vi) the term `account manager' means an 
                        investment manager (within the meaning of 
                        section 3(38) of the Employee Retirement Income 
                        Security Act), and
                            ``(vii) a lifetime income investment or 
                        managed account investment is treated as no 
                        longer authorized to be held as an investment 
                        under the plan if such treatment applies to all 
                        plan participants or to a class of such 
                        participants, as determined in any reasonable 
                        manner.''.
    (b) Cash or Deferred Arrangement.--Clause (i) of section 
401(k)(2)(B) of such Code 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)) or a managed account 
                                investment (as defined in section 
                                401(a)(38)(B)(v)), the date that is 90 
                                days prior to the date that such 
                                lifetime income investment or such 
                                managed account investment may no 
                                longer be held as an investment option 
                                under the plan (within the meaning of 
                                section 401(a)(38)(B)(vii)), 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, in the 
                                case of a lifetime income investment, 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) of 
        such Code 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)) or a managed account investment (as 
                defined in section 401(a)(38)(B)(v)), the date that is 
                90 days prior to the date that such lifetime income 
                investment or such managed account investment may no 
                longer be held as an investment option under the plan 
                (within the meaning of section 401(a)(38)(B)(vii)), 
                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, in the case of 
                a lifetime income investment, 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) of such Code 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)) or a managed account 
                                investment (as defined in section 
                                401(a)(38)(B)(v)), the date that is 90 
                                days prior to the date that such 
                                lifetime income investment or such 
                                managed account investment may no 
                                longer be held as an investment option 
                                under the plan (within the meaning of 
                                section 401(a)(38)(B)(vii)), 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, in the 
                                case of a lifetime income investment, 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) of such Code is amended by striking ``or'' at the end 
of clause (ii), by inserting ``or'' at the end of clause (iii), and by 
adding after clause (iii) the following:
                            ``(iv) with respect to amounts invested in 
                        a lifetime income investment (as defined in 
                        section 401(a)(38)(B)(ii)) or a managed account 
                        investment (as defined in section 
                        401(a)(38)(B)(v)), the date that is 90 days 
                        prior to the date that such lifetime income 
                        investment or such managed account investment 
                        may no longer be held as an investment option 
                        under the plan (within the meaning of section 
                        401(a)(38)(B)(vii)), 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, in the 
                        case of a lifetime income investment, 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, 2017.

SEC. 8. INCREASE IN CREDIT LIMITATION FOR SMALL EMPLOYER PENSION PLAN 
              STARTUP COSTS.

    (a) In General.--Paragraph (1) of section 45E(b) of the Internal 
Revenue Code of 1986 is amended to read as follows:
            ``(1) for the first credit year and each of the 4 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 
                        414(q)) and who is eligible to participate in 
                        the eligible employer plan maintained by the 
                        eligible employer, or
                            ``(ii) $5,000, and''.
    (b) Special Rule for Employers With 25 or Fewer Employees.--
Subsection (a) of section 45E of such Code is amended by inserting 
before the period at the end the following: ``(100 percent of such 
costs in the case of an eligible employer with 25 or fewer employees, 
as determined by substituting `25' for `100' in section 
408(p)(2)(C)(i))''.
    (c) Automatic Contribution Plan.--Paragraph (2) of section 45E(d) 
of such Code is amended by striking ``a qualified employer plan within 
the meaning of section 4972(d)'' and inserting ``an automatic 
contribution plan within the meaning of section 414(aa)''.
    (d) Conforming Change.--Paragraph (2) of section 45E(d) of such 
Code is amended by adding at the end thereof the following: ``For 
purposes of this section, the term `qualified employer plan' has the 
meaning given such term under section 4972(d).''.
    (e) Effective Date.--The amendment made by this section shall apply 
to taxable years beginning after December 31, 2017.

SEC. 9. SMALL EMPLOYER AUTOMATIC ENROLLMENT CREDIT.

    (a) In General.--Subpart D of part IV of subchapter A of chapter 1 
of the Internal Revenue Code of 1986 is amended by adding at the end 
the following new section:

``SEC. 45S. AUTO-ENROLLMENT CREDIT FOR RETIREMENT SAVINGS OPTIONS 
              PROVIDED BY SMALL EMPLOYERS.

    ``(a) In General.--For purposes of section 38, in the case of an 
eligible employer, the retirement auto-enrollment credit determined 
under this section for any taxable year is an amount equal to--
            ``(1) $500 for any taxable year occurring during the credit 
        period, and
            ``(2) zero for any other taxable year.
    ``(b) Credit Period.--For purposes of subsection (a)--
            ``(1) In general.--The credit period with respect to any 
        eligible employer is the 5-taxable-year period beginning with 
        the first taxable year for which the employer adopts an 
        automatic contribution plan (as defined in section 414(aa)), 
        determined without regard to a plan described in section 
        414(aa)(2)(D) (relating to a grandfathered automatic 
        contribution plan).
            ``(2) Maintenance of arrangement.--No taxable year with 
        respect to an employer shall be treated as occurring within the 
        credit period unless the arrangement described in section 
        401(k)(14)(C) is included in the plan for such year.
    ``(c) Eligible Employer.--For purposes of this section, the term 
`eligible employer' has the meaning given such term in section 
408(p)(2)(C)(i).''.
    (b) Credit To Be Part of General Business Credit.--Subsection (b) 
of section 38 of the Internal Revenue Code of 1986 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 new paragraph:
            ``(37) in the case of an eligible employer (as defined in 
        section 45S(c)), the retirement auto-enrollment credit 
        determined under section 45S(a).''.
    (c) Clerical Amendment.--The table of sections for subpart D of 
part IV of subchapter A of chapter 1 of the Internal Revenue Code of 
1986 is amended by inserting after the item relating to section 45R the 
following new item:

``Sec. 45S. Auto-enrollment credit for retirement savings options 
                            provided by small employers.''.
    (d) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2017.

SEC. 10. TREATMENT OF AUTOMATIC CONTRIBUTION PLANS UNDER STATE LAW.

    (a) In General.--Section 514 of the Employee Retirement Income 
Security Act of 1974 (29 U.S.C. 1144) is amended by adding at the end 
the following:
    ``(f) Automatic Contribution Plans.--
            ``(1) In general.--If an employer maintains an automatic 
        contribution plan (as defined in section 414(aa) of the 
        Internal Revenue Code of 1986) that satisfies the requirements 
        of section 414(aa)(3) (without regard to subparagraph (D) 
        thereof), the employer--
                    ``(A) shall not be subject to any requirement 
                imposed by a State or political subdivision thereof to 
                contribute to an individual retirement plan (as defined 
                in section 7701(a)(37) of the Internal Revenue Code of 
                1986) established and maintained pursuant to a payroll 
                deduction savings program of a State or political 
                subdivision thereof, and
                    ``(B) shall not be required to participate in any 
                manner in such a payroll deduction savings program.
            ``(2) Qualified state law exception.--This subsection shall 
        not apply with respect to any employer to the extent that such 
        employer participates in an arrangement under a qualified State 
        law.
            ``(3) Qualified state law.--For purposes of this 
        subsection--
                    ``(A) In general.--The term `qualified State law' 
                means a State law that--
                            ``(i) was enacted before the date of 
                        enactment of the Automatic Retirement Plan Act 
                        of 2017,
                            ``(ii)(I) requires certain employers to 
                        contribute to, or participate in, an individual 
                        retirement plan (as defined in section 
                        7701(a)(37) of such Code) established and 
                        maintained pursuant to a payroll deduction 
                        savings program of the State, or
                            ``(II) allows certain employers to 
                        contribute to, or participate in, a plan 
                        described in section 413(c) of such Code 
                        established and maintained by the State, and
                            ``(iii) is not superseded by this title 
                        (determined without regard to this subsection).
                    ``(B) Exception.--If a State law described in 
                subparagraph (A)(ii) is amended after the date of 
                enactment of the Automatic Retirement Plan Act of 2017 
                to materially expand the scope of the requirement 
                described in subparagraph (A)(ii)(I) or the 
                availability of a plan described in subparagraph 
                (A)(ii)(II), the State law shall, as of the effective 
                date of such amendment, cease to treated as a qualified 
                State law.''.
    (b) Effective Date.--The amendments made by this section shall 
apply to plan years beginning after December 31, 2017.

SEC. 11. MATCHING PAYMENTS FOR ELECTIVE DEFERRAL AND IRA CONTRIBUTIONS 
              BY CERTAIN INDIVIDUALS.

    (a) In General.--Subchapter B of chapter 65 of the Internal Revenue 
Code of 1986 is amended by adding at the end the following new section:

``SEC. 6433. MATCHING PAYMENTS FOR ELECTIVE DEFERRAL AND IRA 
              CONTRIBUTIONS BY CERTAIN INDIVIDUALS.

    ``(a) In General.--
            ``(1) Allowance of credit.--Any eligible individual who 
        makes qualified retirement savings contributions for the 
        taxable year shall be allowed a credit for such taxable year in 
        an amount equal to the applicable percentage of so much of the 
        qualified retirement savings contributions made by such 
        eligible individual for the taxable year as does not exceed 
        $1,000.
            ``(2) Payment of credit.--The credit under this section 
        shall be paid by the Secretary as a contribution (as soon as 
        practicable after the eligible individual has filed a tax 
        return for the taxable year) to the applicable retirement 
        vehicle of the eligible individual.
    ``(b) Applicable Percentage.--For purposes of this section--
            ``(1) In general.--Except as provided in paragraph (2), the 
        applicable percentage is 50 percent.
            ``(2) Phaseout.--The percentage under paragraph (1) shall 
        be reduced (but not below zero) by the number of percentage 
        points which bears the same ratio to 50 percentage points as--
                    ``(A) the excess of--
                            ``(i) the taxpayer's modified adjusted 
                        gross income for such taxable year, over
                            ``(ii) the applicable dollar amount, bears 
                        to
                    ``(B) the phaseout range.
        If any reduction determined under this paragraph is not a whole 
        percentage point, such reduction shall be rounded to the next 
        lowest whole percentage point.
            ``(3) Applicable dollar amount; phaseout range.--
                    ``(A) Joint returns.--Except as provided in 
                subparagraph (B)--
                            ``(i) the applicable dollar amount is 
                        $65,000, and
                            ``(ii) the phaseout range is $20,000.
                    ``(B) Other returns.--In the case of--
                            ``(i) a head of a household (as defined in 
                        section 2(b)), the applicable dollar amount and 
                        the phaseout range shall be \3/4\ of the 
                        amounts applicable under subparagraph (A) (as 
                        adjusted under subsection (g)), and
                            ``(ii) any taxpayer who is not filing a 
                        joint return and who is not a head of a 
                        household (as so defined), the applicable 
                        dollar amount and the phaseout range shall be 
                        \1/2\ of the amounts applicable under 
                        subparagraph (A) (as so adjusted).
    ``(c) Eligible Individual.--For purposes of this section--
            ``(1) In general.--The term `eligible individual' means any 
        individual if such individual has attained the age of 18 as of 
        the close of the taxable year.
            ``(2) Dependents and full-time students not eligible.--The 
        term `eligible individual' shall not include--
                    ``(A) any individual with respect to whom a 
                deduction under section 151 is allowed to another 
                taxpayer for a taxable year beginning in the calendar 
                year in which such individual's taxable year begins, 
                and
                    ``(B) any individual who is a student (as defined 
                in section 152(f)(2)).
    ``(d) Qualified Retirement Savings Contributions.--For purposes of 
this section--
            ``(1) In general.--The term `qualified retirement savings 
        contributions' means, with respect to any taxable year, the sum 
        of--
                    ``(A) the amount of the qualified retirement 
                contributions (as defined in section 219(e)) made by 
                the eligible individual,
                    ``(B) the amount of--
                            ``(i) any elective deferrals (as defined in 
                        section 402(g)(3)) of such individual, and
                            ``(ii) any elective deferral of 
                        compensation by such individual under an 
                        eligible deferred compensation plan (as defined 
                        in section 457(b)) of an eligible employer 
                        described in section 457(e)(1)(A), and
                    ``(C) the amount of voluntary employee 
                contributions by such individual to any qualified 
                retirement plan (as defined in section 4974(c)).
        Such term shall not include any amount attributable to a 
        payment under subsection (a).
            ``(2) Reduction for certain distributions.--
                    ``(A) In general.--The qualified retirement savings 
                contributions determined under paragraph (1) for a 
                taxable year shall be reduced (but not below zero) by 
                the aggregate distributions received by the individual 
                during the testing period from any entity of a type to 
                which contributions under paragraph (1) may be made.
                    ``(B) Testing period.--For purposes of subparagraph 
                (A), the testing period, with respect to a taxable 
                year, is the period which includes--
                            ``(i) such taxable year,
                            ``(ii) the 2 preceding taxable years, and
                            ``(iii) the period after such taxable year 
                        and before the due date (including extensions) 
                        for filing the return of tax for such taxable 
                        year.
                    ``(C) Excepted distributions.--There shall not be 
                taken into account under subparagraph (A)--
                            ``(i) any distribution referred to in 
                        section 72(p), 401(k)(8), 401(m)(6), 402(g)(2), 
                        404(k), or 408(d)(4),
                            ``(ii) any distribution to which section 
                        408(d)(3) or 408A(d)(3) applies, and
                            ``(iii) any portion of a distribution if 
                        such portion is transferred or paid in a 
                        rollover contribution (as defined in section 
                        402(c), 403(a)(4), 403(b)(8), 408A(e), or 
                        457(e)(16)) to an account or plan to which 
                        qualified retirement contributions can be made.
                    ``(D) Treatment of distributions received by spouse 
                of individual.--For purposes of determining 
                distributions received by an individual under 
                subparagraph (A) for any taxable year, any distribution 
                received by the spouse of such individual shall be 
                treated as received by such individual if such 
                individual and spouse file a joint return for such 
                taxable year and for the taxable year during which the 
                spouse receives the distribution.
    ``(e) Applicable Retirement Savings Vehicle.--
            ``(1) In general.--The term `applicable retirement savings 
        vehicle' means--
                    ``(A) an account or plan elected by the eligible 
                individual under paragraph (2), or
                    ``(B) if no such election is made, a retirement 
                bond purchased by the Secretary for the benefit of the 
                eligible individual.
            ``(2) Other retirement vehicles.--An eligible individual 
        may elect to have the amount determined under subsection (a) 
        contributed to an account or plan which--
                    ``(A) is a Roth IRA (as defined in section 408A), 
                or a designated Roth account (within the meaning of 
                section 402A) of an applicable retirement plan (as 
                defined in section 402A(e)(1)),
                    ``(B) is for the benefit of the eligible 
                individual,
                    ``(C) accepts contributions made under this 
                section, and
                    ``(D) is designated by such individual (in such 
                form and manner as the Secretary may provide) on the 
                return of tax for the taxable year.
            ``(3) Retirement bond.--
                    ``(A) In general.--For purposes of this section, 
                the term `retirement bond' means a bond issued under 
                chapter 31 of title 31, United States Code, which by 
                its terms, or by regulations prescribed by the 
                Secretary under such chapter--
                            ``(i) provides for interest to be credited 
                        at rates that take into account the expected 
                        duration of the funds invested in retirement 
                        bonds and at rates determined or adjusted in a 
                        manner and with sufficient frequency to provide 
                        substantial protection from inflation,
                            ``(ii) is not transferable, and
                            ``(iii) is designed for investment for 
                        retirement.
                    ``(B) Roth ira rules applicable.--The provisions of 
                this title applicable to a Roth IRA, including 
                provisions relating to contributions, holding and 
                distributions, shall apply to a retirement bond, except 
                as determined by the Secretary.
                    ``(C) Regulations.--The Secretary may issue such 
                regulations as are necessary to carry out the purposes 
                of this section, including--
                            ``(i) establishment of procedures to 
                        communicate to individuals the importance of 
                        investment diversification and the transfer 
                        option described in clause (ii),
                            ``(ii) simplified procedures under which 
                        holders of retirement bonds may periodically 
                        choose to have the bonds or their proceeds 
                        transferred to available Roth IRAs, and
                            ``(iii) means by which individuals may 
                        elect (or be treated as electing) whether to 
                        have retirement bonds or their proceeds so 
                        transferred.
                Any such transfer shall be treated as a rollover 
                contribution for purposes of section 408(d)(3) (other 
                than subparagraph (B) thereof).
    ``(f) Other Definitions and Special Rules.--
            ``(1) Modified adjusted gross income.--For purposes of this 
        section, the term `modified adjusted gross income' means 
        adjusted gross income--
                    ``(A) determined without regard to sections 911, 
                931, and 933, and
                    ``(B) determined without regard to any exclusion or 
                deduction allowed for any qualified retirement savings 
                contribution made during the taxable year.
            ``(2) Treatment of contributions.--In the case of any 
        contribution under subsection (a)(2)--
                    ``(A) except as otherwise provided in this section 
                or by the Secretary under regulations, such 
                contribution shall be treated in the same manner as a 
                contribution made by the individual on whose behalf 
                such contribution was made,
                    ``(B) such contribution shall not be treated as 
                income to the taxpayer, and
                    ``(C) such contribution shall not be taken into 
                account with respect to any applicable limitation under 
                sections 402(g)(1), 403(b), 408(a)(1), 408(b)(2)(B), 
                408A(c)(2), 414(v)(2), 415(c), or 457(b)(2).
            ``(3) Treatment of qualified plans, etc.--A plan or 
        arrangement to which a contribution is made under this section 
        shall not be treated as violating any requirement under section 
        401, 403, 408, or 457 solely by reason of accepting such 
        contribution.
            ``(4) Erroneous credits.--If any contribution is 
        erroneously paid under subsection (a)(2), the amount of such 
        erroneous payment shall be treated as an underpayment of tax.
    ``(g) Inflation Adjustments.--
            ``(1) In general.--In the case of any taxable year 
        beginning in a calendar year after 2018, each of the dollar 
        amounts in subsections (a)(2) and (b)(3)(A)(i) shall be 
        increased by an amount equal to--
                    ``(A) such dollar amount, multiplied by
                    ``(B) the cost-of-living adjustment determined 
                under section 1(f)(3) for the calendar year in which 
                the taxable year begins, determined by substituting 
                `calendar year 2017' for `calendar year 1992' in 
                subparagraph (B) thereof.
            ``(2) Rounding.--Any increase determined under paragraph 
        (1) shall be rounded to the nearest multiple of--
                    ``(A) $100 in the case of an adjustment of the 
                amount in subsection (a)(2), and
                    ``(B) $1,000 in the case of an adjustment of the 
                amount in subsection (b)(3)(A)(i).''.
    (b) Promotion and Guidance.--
            (1) Promotion.--The Secretary of the Treasury (or the 
        Secretary's delegate) shall educate taxpayers on the benefits 
        provided under section 6433 of the Internal Revenue Code of 
        1986.
            (2) Guidance.--Not later than December 31, 2017, the 
        Secretary of the Treasury (or the Secretary's delegate) shall 
        issue guidance on the implementation and administration of the 
        amendments made by this section.
    (c) Payment Authority.--Section 1324(b)(2) of title 31, United 
States Code, is amended by striking ``or 6431'' and inserting ``6431, 
or 6433''.
    (d) Deficiencies.--Section 6211(b)(4) is amended by striking ``and 
6431'' and inserting ``6431, and 6433''.
    (e) Conforming Amendments.--
            (1) Section 25B of the Internal Revenue Code of 1986 is 
        amended by striking subsections (a) through (f) and inserting 
        the following:
    ``For payment of credit related to qualified retirement savings 
contributions, see section 6433.''.
            (2) The table of sections for subchapter B of chapter 65 of 
        such Code is amended by adding at the end the following new 
        item:

``Sec. 6433. Matching payments for elective deferral and IRA 
                            contributions by certain individuals.''.
    (f) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2017.

SEC. 12. AUTHORITY TO REQUIRE REPORTING.

    (a) Reporting Under Internal Revenue Code.--Subsection (a) of 
section 6058 of the Internal Revenue Code of 1986 is amended by adding 
at the end thereof the following: ``The Secretary may by regulation 
require the inclusion in such annual return of such information as may 
be necessary or appropriate to determine the effects of the alternative 
methods of satisfying applicable nondiscrimination requirements, which 
are described in subsections (k)(13), (k)(14), (m)(11), and (m)(12) of 
section 401, on the contribution levels of employees who are not highly 
compensated employees (as defined in section 414(q)).''.
    (b) Reporting Under Employee Retirement Income Security Act of 
1974.--Section 104(a)(2)(A) of the Employee Retirement Income Security 
Act of 1974 (29 U.S.C. 1042(a)(2)), as amended by section 3(c), is 
further amended by inserting before the period at the end thereof the 
following: ``, except that in the case of such a deferral-only 
arrangement contained in a pension plan with at least 100 participants, 
the Secretary may require such reporting as is necessary or appropriate 
with respect to service providers, investment options, and fees, but 
not in excess of any reporting applicable to other arrangements.''.
                                 <all>
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