I 

115TH CONGRESS 

1ST SESSION H. R. 4524 

To expand retirement coverage, preserve retirement income, simplify rules 

related to retirement plans, 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 expand retirement coverage, preserve retirement income, 

simplify rules related to retirement plans, and for other 

purposes. 

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

3 SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 

4 (a) SHORT TITLE.—This Act may be cited as the 

5 ‘‘Retirement Plan Simplification and Enhancement Act of 

6 2017’’. 

7 (b) TABLE OF CONTENTS.—The table of contents for 

8 this Act is as follows: 


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Sec. 1. Short title; table of contents. 

TITLE I—EXPANDING COVERAGE AND INCREASING RETIREMENT 

SAVINGS 

Sec. 101. Modification of automatic enrollment safe harbor. 

Sec. 102. Secure deferral arrangements. 

Sec. 103. Facilitating automatic enrollment. 

Sec. 104. Credit for employers with respect to modified safe harbor requirements. 

Sec. 105. Qualified cash or deferred arrangements must allow long-term employees working more than 500 but less than 1,000 hours per 

year to participate. 

Sec. 106. Separate application of top heavy rules to defined contribution plans 

covering part-time employees. 

Sec. 107. Opportunity to claim the saver’s credit on form 1040EZ. 

Sec. 108. Additional time to adopt a qualified plan. 

Sec. 109. Repeal of maximum age for traditional IRA contributions. 

Sec. 110. 60-day rollover to inherited individual retirement plan of nonspouse 

beneficiary. 

Sec. 111. Increase in age for required beginning date for mandatory distributions. 

Sec. 112. Increase in credit limitation for small employer pension plan startup 

costs. 

Sec. 113. Safe harbor for corrections of employee elective deferral failures. 

Sec. 114. Economically targeted investments. 

Sec. 115. Small immediate financial incentives for contributing to a plan. 

TITLE II—PRESERVATION OF INCOME 

Sec. 201. Availability of distribution options. 

Sec. 202. Portability of lifetime income and managed account options. 

Sec. 203. Qualifying longevity annuity contracts. 

Sec. 204. Remove required minimum distribution barriers for life annuities. 

TITLE III—SIMPLIFICATION AND CLARIFICATION OF QUALIFIED 

RETIREMENT PLAN RULES 

Sec. 301. Exception from required distributions where aggregate retirement 

savings do not exceed $250,000. 

Sec. 302. Expansion of employee plans compliance resolution system. 

Sec. 303. Review and report to the congress relating to reporting and disclosure 

requirements. 

Sec. 304. Consolidation of defined contribution plan notices. 

Sec. 305. Performance benchmarks for asset allocation funds. 

Sec. 306. Permit nonspousal beneficiaries to roll assets to plans. 

Sec. 307. Eliminate the ‘‘first day of the month’’ requirement. 

Sec. 308. Office of participant and plan sponsor advocate. 

Sec. 309. Simplifying 402(f) notices. 

Sec. 310. Guidance related to certain overpayment recoupment practices. 

Sec. 311. Rules relating to election of safe harbor 401(k) status. 

Sec. 312. Use of forfeitures to fund safe harbor contributions. 

Sec. 313. Treatment of custodial accounts on termination of section 403(b) 

plans. 

TITLE IV—DEFINED BENEFIT PLAN REFORMS 


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Sec. 401. Cash balance. 

Sec. 402. Aligning use of lookback months to determine interest rates. 

Sec. 403. Aligning employer pension contribution due date with corporate return due date. 

Sec. 404. Clarification of the role of the Participant and Plan Sponsor Advocate. 

1 TITLE I—EXPANDING COVERAGE 

2 AND INCREASING RETIRE3 MENT SAVINGS 

4 SEC. 101. MODIFICATION OF AUTOMATIC ENROLLMENT 

5 SAFE HARBOR. 

6 (a) IN GENERAL.— 

7 (1) REMOVAL OF 10-PERCENT CAP.—Clause 

8 (iii) of section 401(k)(13)(C) of the Internal Rev9 enue Code of 1986 is amended by striking ‘‘, does 

10 not exceed 10 percent, and is at least’’ and inserting 

11 ‘‘and is’’. 

12 (2) CONFORMING AMENDMENTS.— 

13 (A) Subclause (I) of section 

14 401(k)(13)(C)(iii) is amended by striking ‘‘3 

15 percent’’ and inserting ‘‘at least 3 percent, but 

16 not greater than 10 percent,’’. 

17 (B) Subclause (II) of section 

18 401(k)(13)(C)(iii) is amended by striking ‘‘4 

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

20 (C) Subclause (III) of section 

21 401(k)(13)(C)(iii) is amended by striking ‘‘5 

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


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1 (D) Subclause (IV) of section 

2 401(k)(13)(C)(iii) is amended by striking ‘‘6 

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

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

5 this section shall apply to plan years beginning after the 

6 date of enactment of this Act. 

7 SEC. 102. SECURE DEFERRAL ARRANGEMENTS. 

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

9 the Internal Revenue Code of 1986 is amended by adding 

10 at the end the following new paragraph: 

11 ‘‘(14) ALTERNATIVE METHOD FOR SECURE DE12 FERRAL ARRANGEMENTS TO MEET NONDISCRIMINA13 TION REQUIREMENTS.— 

14 ‘‘(A) IN GENERAL.—A secure deferral ar15 rangement shall be treated as meeting the re16 quirements of paragraph (3)(A)(ii). 

17 ‘‘(B) SECURE DEFERRAL ARRANGE18 MENT.—For purposes of this paragraph, the 

19 term ‘secure deferral arrangement’ means any 

20 cash or deferred arrangement which meets the 

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

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

23 this paragraph. 

24 ‘‘(C) QUALIFIED PERCENTAGE.—For pur25 poses of this paragraph, with respect to any 


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1 employee, the term ‘qualified percentage’ 

2 means, in lieu of the meaning given such term 

3 in paragraph (13)(C)(iii), any percentage deter4 mined under the arrangement if such percent5 age is applied uniformly and is— 

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

7 than 10 percent, during the period ending 

8 on the last day of the first plan year which 

9 begins after the date on which the first 

10 elective contribution described in para11 graph (13)(C)(i) is made with respect to 

12 such employee, 

13 ‘‘(ii) at least 7 percent during the 

14 first plan year following the plan year de15 scribed in clause (i), 

16 ‘‘(iii) at least 8 percent during the 

17 second plan year following the plan year 

18 described in clause (i), 

19 ‘‘(iv) at least 9 percent during the 

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

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

23 subsequent plan year. 

24 ‘‘(D) MATCHING CONTRIBUTIONS.— 


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1 ‘‘(i) IN GENERAL.—For purposes of 

2 this paragraph, an arrangement shall be 

3 treated as having met the requirements of 

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

6 behalf of each employee who is not a highly 

7 compensated employee in an amount equal 

8 to the sum of— 

9 ‘‘(I) 100 percent of the elective 

10 contributions of the employee to the 

11 extent that such contributions do not 

12 exceed 1 percent of compensation, 

13 ‘‘(II) 50 percent of so much of 

14 such contributions as exceed 1 percent 

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

17 ‘‘(III) 25 percent of so much of 

18 such contributions as exceed 6 percent 

19 but do not exceed 10 percent of com20 pensation. 

21 ‘‘(ii) APPLICATION OF RULES FOR

22 MATCHING CONTRIBUTIONS.—The rules of 

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

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

25 shall apply for purposes of clause (i) but 


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1 the rule of clause (iii) of paragraph 

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

3 The rate of matching contribution for each 

4 incremental deferral must be at least as 

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

6 may be higher, so long as such rate does 

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

9 (b) MATCHING CONTRIBUTIONS AND EMPLOYEE

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

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

13 after paragraph (12) the following new paragraph: 

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

16 plan shall be treated as meeting the requirements of 

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

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

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

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

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

23 ‘‘(C) provides that matching contributions 

24 on behalf of any employee may not be made 

25 with respect to an employee’s contributions or 


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1 elective deferrals in excess of 10 percent of the 

2 employee’s compensation.’’. 

3 (c) CONFORMING AMENDMENT.—Subparagraph (H) 

4 of section 416(g)(4) of the Internal Revenue Code of 1986 

5 is amended— 

6 (1) in clause (i), by striking ‘‘section 

7 401(k)(12) or 401(k)(13)’’ and inserting ‘‘paragraph 

8 (12), (13), or (14) of section 401(k)’’, and 

9 (2) in clause (ii), by striking ‘‘section 

10 401(m)(11) or 401(m)(12)’’ and inserting ‘‘para11 graph (11), (12), or (13) of section 401(m)’’. 

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

13 this section shall apply to plan years beginning after De14 cember 31, 2017. 

15 SEC. 103. FACILITATING AUTOMATIC ENROLLMENT. 

16 The Secretary of the Treasury shall promulgate regu17 lations or other guidance that— 

18 (1) simplify and clarify the rules regarding the 

19 timing of participant notices required under section 

20 401(k)(13)(E) of the Internal Revenue Code of 

21 1986, with specific application to— 

22 (A) plans that allow employees to be eligi23 ble for participation immediately upon begin24 ning employment; and 


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1 (B) employers with multiple payroll and 

2 administrative systems; and 

3 (2) simplify and clarify the automatic escalation 

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

5 401(k)(14)(C) of the Internal Revenue Code of 1986 

6 in the context of employers with multiple payroll and 

7 administrative systems. 

8 Such regulations or guidance shall address the particular 

9 case of employees within the same plan who are subject 

10 to different notice timing and different percentage require11 ments, and provide assistance for plan sponsors in man12 aging such cases. 

13 SEC. 104. CREDIT FOR EMPLOYERS WITH RESPECT TO 

14 MODIFIED SAFE HARBOR REQUIREMENTS. 

15 (a) IN GENERAL.—Subpart D of part IV of sub16 chapter A of chapter 1 of the Internal Revenue Code of 

17 1986 is amended by adding at the end the following new 

18 section: 

19 ‘‘SEC. 45S. CREDIT FOR SMALL EMPLOYERS WITH RESPECT 

20 TO MODIFIED SAFE HARBOR REQUIREMENTS 

21 FOR AUTOMATIC CONTRIBUTION ARRANGE22 MENTS. 

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

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

25 credit determined under this section for any taxable year 


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1 is the amount equal to the total of the employer’s match2 ing contributions under section 401(k)(14)(D) during the 

3 taxable year on behalf of employees who are not highly 

4 compensated employees, subject to the limitations of sub5 section (b). 

6 ‘‘(b) LIMITATIONS.— 

7 ‘‘(1) LIMITATION WITH RESPECT TO COM8 PENSATION.—The credit determined under sub9 section (a) with respect to contributions made on be10 half of an employee who is not a highly compensated 

11 employee shall not exceed 2 percent of the com12 pensation of such employee for the taxable year. 

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

14 PARTICIPATION.—Credit shall be determined under 

15 subsection (a) with respect to contributions made on 

16 behalf of an employee who is not a highly com17 pensated employee only during the first 5 years such 

18 employee participates in the qualified automatic con19 tribution arrangement. 

20 ‘‘(c) DEFINITIONS.— 

21 ‘‘(1) IN GENERAL.—Any term used in this sec22 tion which is also used in section 401(k)(14) shall 

23 have the same meaning as when used in such sec24 tion. 


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1 ‘‘(2) SMALL EMPLOYER.—The term ‘small em2 ployer’ means an eligible employer (as defined in 

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

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

5 shall be allowable under this title for any contribution with 

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

7 (b) CREDIT TO BE PART OF GENERAL BUSINESS

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

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

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

11 end of paragraph (36) and inserting ‘‘, plus’’, and by add12 ing at the end the following new paragraph: 

13 ‘‘(37) the safe harbor adoption credit deter14 mined under section 45S.’’. 

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

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

17 of the Internal Revenue Code of 1986 is amended by add18 ing after the item relating to section 45R the following 

19 new item: 

‘‘Sec. 45S. Credit for small employers with respect to modified safe harbor requirements for automatic contribution arrangements.’’. 

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

21 this section shall apply to taxable years that include any 

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


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1 SEC. 105. QUALIFIED CASH OR DEFERRED ARRANGEMENTS 

2 MUST ALLOW LONG-TERM EMPLOYEES 

3 WORKING MORE THAN 500 BUT LESS THAN 

4 1,000 HOURS PER YEAR TO PARTICIPATE. 

5 (a) PARTICIPATION REQUIREMENT.— 

6 (1) IN GENERAL.—Subparagraph (D) of section 

7 401(k)(2) of the Internal Revenue Code of 1986 is 

8 amended to read as follows: 

9 ‘‘(D) which does not require, as a condi10 tion of participation in the arrangement, that 

11 an employee complete a period of service with 

12 the employer (or employers) maintaining the 

13 plan extending beyond the close of the earlier 

14 of— 

15 ‘‘(i) the period permitted under sec16 tion 410(a)(1) (determined without regard 

17 to subparagraph (B)(i) thereof), or 

18 ‘‘(ii) subject to the provisions of para19 graph (14), the first period of 3 consecu20 tive 12-month periods during each of which 

21 the employee has at least 500 hours of 

22 service.’’. 

23 (2) SPECIAL RULES.—Section 401(k) of the In24 ternal Revenue Code of 1986 is amended by adding 

25 at the end the following new paragraph: 


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1 ‘‘(15) SPECIAL RULES FOR PARTICIPATION RE2 QUIREMENT FOR LONG-TERM, PART-TIME WORK3 ERS.—For purposes of paragraph (2)(D)(ii)— 

4 ‘‘(A) AGE REQUIREMENT MUST BE MET.— 

5 Paragraph (2)(D)(ii) shall not apply to an em6 ployee unless the employee has met the require7 ment of section 410(a)(1)(A)(i) by the close of 

8 the last of the 12-month periods described in 

9 such paragraph. 

10 ‘‘(B) NONDISCRIMINATION AND TOP11 HEAVY RULES NOT TO APPLY.— 

12 ‘‘(i) NONDISCRIMINATION RULES.—In 

13 the case of employees who are eligible to 

14 participate in the arrangement solely by 

15 reason of paragraph (2)(D)(ii)— 

16 ‘‘(I) notwithstanding subsection 

17 (a)(4), an employer shall not be re18 quired to make nonelective or match19 ing contributions on behalf of such 

20 employees even if such contributions 

21 are made on behalf of other employees 

22 eligible to participate in the arrange23 ment, and 

24 ‘‘(II) an employer may elect to 

25 exclude such employees from the apVerDate Sep 11 2014 21:46 Dec 07, 2017 Jkt 079200 PO 00000 Frm 00013 Fmt 6652 Sfmt 6201 E:\BILLS\H4524.IH H4524

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1 plication of subsection (a)(4), para2 graph (3), subsection (m)(2), and sec3 tion 410(b). 

4 ‘‘(ii) TOP-HEAVY RULES.—An em5 ployer may elect to exclude all employees 

6 who are eligible to participate in a plan 

7 maintained by the employer solely by rea8 son of paragraph (2)(D)(ii) from the appli9 cation of the vesting and benefit require10 ments under subsections (b) and (c) of sec11 tion 416. 

12 ‘‘(iii) VESTING.—For purposes of de13 termining whether an employee described 

14 in clause (i) has a nonforfeitable right to 

15 employer contributions (other than con16 tributions described in paragraph 

17 (3)(D)(i)) under the arrangement, each 

18 12-month period for which the employee 

19 has at least 500 hours of service shall be 

20 treated as a year of service. 

21 ‘‘(iv) EMPLOYEES WHO BECOME

22 FULL-TIME EMPLOYEES.—This subpara23 graph shall cease to apply to any employee 

24 as of the first plan year beginning after 

25 the plan year in which the employee meets 


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1 the requirements of section 

2 410(a)(1)(A)(ii) without regard to para3 graph (2)(D)(ii). 

4 ‘‘(C) EXCEPTION FOR EMPLOYEES UNDER

5 COLLECTIVELY BARGAINED PLANS, ETC.—Para6 graph (2)(D)(ii) shall not apply to employees 

7 described in section 410(b)(3). 

8 ‘‘(D) SPECIAL RULES.— 

9 ‘‘(i) TIME OF PARTICIPATION.—The 

10 rules of section 410(a)(4) shall apply to an 

11 employee eligible to participate in an ar12 rangement solely by reason of paragraph 

13 (2)(D)(ii). 

14 ‘‘(ii) 12-MONTH PERIODS.—12-month 

15 periods shall be determined in the same 

16 manner as under the last sentence of sec17 tion 410(a)(3)(A).’’. 

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

19 this section shall apply to plan years beginning after De20 cember 31, 2017, except that, for purposes of section 

21 401(k)(2)(D)(ii) of the Internal Revenue Code of 1986 (as 

22 added by such amendments), 12-month periods beginning 

23 before January 1, 2018, shall not be taken into account. 


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1 SEC. 106. SEPARATE APPLICATION OF TOP HEAVY RULES 

2 TO DEFINED CONTRIBUTION PLANS COV3 ERING PART-TIME EMPLOYEES. 

4 (a) IN GENERAL.—Paragraph (2) of section 416(c) 

5 of the Internal Revenue Code of 1986 is amended by add6 ing at the end the following: 

7 ‘‘(C) SEPARATE APPLICATION TO EMPLOY8 EES NOT MEETING AGE AND SERVICE REQUIRE9 MENTS.—If employees not meeting the age or 

10 service requirements of section 410(a)(1) (with11 out regard to subparagraph (B) thereof) are 

12 covered under a plan of the employer which 

13 meets the requirements of paragraphs (A) and 

14 (B) separately with respect to such employees, 

15 such employees may be excluded from consider16 ation in determining whether any plan of the 

17 employer meets the requirements of subpara18 graphs (A) and (B).’’. 

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

20 subsection (a) shall apply to plan years beginning after 

21 the date of the enactment of this Act. 

22 SEC. 107. OPPORTUNITY TO CLAIM THE SAVER’S CREDIT 

23 ON FORM 1040EZ. 

24 The Secretary of the Treasury shall modify the forms 

25 for the return of tax of individuals in order to allow indi26 viduals claiming the credit under section 25B of the InterVerDate Sep 11 2014 21:46 Dec 07, 2017 Jkt 079200 PO 00000 Frm 00016 Fmt 6652 Sfmt 6201 E:\BILLS\H4524.IH H4524

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

2 on) Form 1040EZ. 

3 SEC. 108. ADDITIONAL TIME TO ADOPT A QUALIFIED PLAN. 

4 (a) IN GENERAL.—Subsection (a) of section 401 of 

5 the Internal Revenue Code of 1986 is amended by insert6 ing after paragraph (37) the following new paragraph: 

7 ‘‘(38) The adoption of a plan by the applicable 

8 date shall not cause a plan to fail to meet the re9 quirements of this section for a plan year. For pur10 poses of the preceding sentence, the term ‘applicable 

11 date’ means the due date (including extensions) for 

12 filing the Federal income tax return for the employ13 er’s taxable year in which ends the plan year for 

14 which the plan is effective. An employer may elect 

15 to have a plan adopted in accordance with this para16 graph be treated as established by the end of the 

17 employer’s taxable year for purposes of applying sec18 tion 404(a).’’. 

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

20 subsection (a) shall apply to years beginning after Decem21 ber 31, 2017. 

22 SEC. 109. REPEAL OF MAXIMUM AGE FOR TRADITIONAL IRA 

23 CONTRIBUTIONS. 

24 (a) IN GENERAL.—Paragraph (1) of section 219(d) 

25 of the Internal Revenue Code of 1986 is repealed. 


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1 (b) CONFORMING AMENDMENT.—Subsection (c) of 

2 section 408A of the Internal Revenue Code of 1986 is 

3 amended by striking paragraph (4) and by redesignating 

4 paragraphs (5), (6), and (7) as paragraphs (4), (5), and 

5 (6), respectively. 

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

7 this section shall apply to contributions made for taxable 

8 years beginning after December 31, 2017. 

9 SEC. 110. 60-DAY ROLLOVER TO INHERITED INDIVIDUAL 

10 RETIREMENT PLAN OF NONSPOUSE BENE11 FICIARY. 

12 (a) IN GENERAL.—Section 402(c)(11) of the Internal 

13 Revenue Code of 1986 is amended by redesignating sub14 paragraph (B) as subparagraph (C) and by striking sub15 paragraph (A) and inserting the following: 

16 ‘‘(A) IN GENERAL.—If— 

17 ‘‘(i) any portion of a distribution at18 tributable to an employee is paid after the 

19 death of the employee to an individual who 

20 is a designated beneficiary (as defined by 

21 section 401(a)(9)(E)) of the employee and 

22 who is not the surviving spouse of the em23 ployee, and 

24 ‘‘(ii) such portion is transferred or 

25 paid to an individual retirement plan in a 


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1 transfer or payment meeting the require2 ments of subparagraph (B), 

3 the preceding provisions of this subsection shall 

4 apply to such distribution in the same manner 

5 as if the designated beneficiary were the em6 ployee. 

7 ‘‘(B) REQUIREMENTS FOR TRANSFER OF

8 DISTRIBUTION.—The requirements of this sub9 paragraph are met with respect to the portion 

10 of any distribution if— 

11 ‘‘(i) such portion is transferred or 

12 paid to an individual retirement plan de13 scribed in clause (i) or (ii) of paragraph 

14 (8)(B) established for the purposes of re15 ceiving the distribution on behalf of the 

16 designated beneficiary, 

17 ‘‘(ii) such individual retirement plan is 

18 established as an inherited individual re19 tirement account or individual retirement 

20 annuity (within the meaning of section 

21 408(d)(3)(C)), whichever is applicable, and 

22 ‘‘(iii) notice is provided to the trustee, 

23 insurance company, or other provider of 

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1 lished as an inherited individual retirement 

2 account or individual retirement annuity. 

3 Section 401(a)(9)(B) (other than clause (iv) 

4 thereof) shall apply to such individual retire5 ment plan.’’. 

6 (b) ROLLOVER TREATMENT FOR INHERITED AC7 COUNTS.—Section 408(d)(3)(C) of the Internal Revenue 

8 Code of 1986 is amended by adding at the end the fol9 lowing: 

10 ‘‘(iii) EXCEPTION FOR QUALIFIED

11 TRANSFERS TO ANOTHER INHERITED AC12 COUNT.—Clause (i) shall not apply to any 

13 portion of a distribution out of an inher14 ited individual retirement account or inher15 ited individual retirement annuity if such 

16 portion is paid to another such individual 

17 retirement plan or annuity but only if the 

18 requirements of subparagraphs (A), (B), 

19 and (E) of this paragraph, and the re20 quirements of section 402(c)(11)(B), are 

21 met with respect to such transfer or pay22 ment.’’. 

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

24 this section shall apply to distributions made after Decem25 ber 31, 2017. 


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1 SEC. 111. INCREASE IN AGE FOR REQUIRED BEGINNING 

2 DATE FOR MANDATORY DISTRIBUTIONS. 

3 (a) INCREASE IN AGE FOR REQUIRED BEGINNING

4 DATE.— 

5 (1) IN GENERAL.—Subclause (I) of section 

6 401(a)(9)(C)(i) of the Internal Revenue Code of 

7 1986 is amended to read as follows: 

8 ‘‘(I) the first calendar year in 

9 which the employee attains the appli10 cable age for such calendar year, or’’. 

11 (2) SPECIAL RULE FOR OWNERS.—Subclause 

12 (I) of section 401(a)(9)(C)(ii) of such Code is 

13 amended by striking ‘‘in which the employee attains 

age 701 14 ⁄2’’ and inserting ‘‘described in clause (i)(I) 

15 with respect to the employee’’. 

16 (b) MANDATORY DISTRIBUTION AGE.—Paragraph 

17 (9) of section 401(a) of the Internal Revenue Code of 

18 1986 is amended by inserting at the end the following new 

19 subparagraph: 

20 ‘‘(H) APPLICABLE AGE.—For purposes of 

21 this paragraph— 

22 ‘‘(i) IN GENERAL.—The applicable age 

23 is— 

24 ‘‘(I) for calendar years before 

2019, age 701 25 ⁄2, 


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1 ‘‘(II) for calendar years 2019, 

2 2020, 2021, 2022, and 2023, age 71, 

3 ‘‘(III) for calendar years 2024, 

4 2025, 2026, 2027, and 2028, age 72, 

5 ‘‘(IV) for calendar year 2029, 

6 age 73, and 

7 ‘‘(V) for calendar years after 

8 2029, the age as adjusted under 

9 clause (ii). 

10 ‘‘(ii) ADJUSTMENT.—The Secretary 

11 shall adjust the age under clause (i)(IV) 

12 for calendar year 2030 and each suc13 ceeding calendar year in a manner propor14 tional to increases in the life expectancy of 

15 an individual who attained age 73 in the 

16 calendar year preceding the calendar year 

17 for which the adjustment is being made as 

18 compared to the life expectancy of an indi19 vidual who attained age 73 in 2028. The 

20 applicable age for any calendar year as ad21 justed under this clause— 

22 ‘‘(I) shall be applicable only with 

23 respect to employees whose required 

24 beginning date has not occurred as of 


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1 December 31 of the year preceding 

2 such year, and 

3 ‘‘(II) shall be rounded to the next 

4 lowest whole number. 

5 ‘‘(iii) LIFE EXPECTANCIES.—The life 

6 expectancies under clause (ii) shall be de7 termined on a unisex basis in accordance 

8 with life expectancies underlying the tables 

9 described in section 430(h)(3)(A).’’. 

10 (c) SPOUSE BENEFICIARIES.—Subclause (I) of sec11 tion 401(a)(9)(B)(iv) of the Internal Revenue Code of 

1986 is amended by striking ‘‘age 701 12 ⁄2’’ and inserting 

13 ‘‘the applicable age’’. 

14 (d) CONFORMING AMENDMENT.—Subsection (b) of 

15 section 408 of such Code is amended by striking ‘‘age 

701 16 ⁄2’’ and inserting ‘‘the applicable age determined under 

17 section 401(a)(9)(H) with respect to such individual’’. 

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

19 this section shall apply to calendar years beginning after 

20 December 31, 2017. 

21 SEC. 112. INCREASE IN CREDIT LIMITATION FOR SMALL 

22 EMPLOYER PENSION PLAN STARTUP COSTS. 

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

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

25 as follows: 


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1 ‘‘(1) for the first credit year and each of the 4 

2 taxable years immediately following the first credit 

3 year, the greater of— 

4 ‘‘(A) $500, or 

5 ‘‘(B) the lesser of— 

6 ‘‘(i) $250 for each employee of the eli7 gible employer who is not a highly com8 pensated employee (as defined in section 

9 415(q)) and who is eligible to participate 

10 in the eligible employer plan maintained by 

11 the eligible employer, or 

12 ‘‘(ii) $5,000, and’’. 

13 (b) SPECIAL RULE FOR EMPLOYERS WITH 25 OR

14 FEWER EMPLOYEES.—Subsection (a) of section 45E of 

15 such Code is amended by inserting before the period at 

16 the end the following: ‘‘(100 percent of such costs in the 

17 case of an eligible employer with 25 or fewer employees, 

18 as determined by substituting ‘25’ for ‘100’ in section 

19 408(p)(2)(C)(i))’’. 

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

21 this section shall apply to taxable years beginning after 

22 December 31, 2017. 


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1 SEC. 113. SAFE HARBOR FOR CORRECTIONS OF EMPLOYEE 

2 ELECTIVE DEFERRAL FAILURES. 

3 (a) IN GENERAL.—Section 414 of the Internal Rev4 enue Code of 1986 is amended by adding at the end the 

5 following new subsection: 

6 ‘‘(aa) CORRECTING AUTOMATIC CONTRIBUTION ER7 RORS.— 

8 ‘‘(1) IN GENERAL.—Any plan or arrangement 

9 shall not fail to satisfy any requirement of this sub10 chapter or section 457 solely by reason of a cor11 rected error. 

12 ‘‘(2) CORRECTED ERROR DEFINED.—For pur13 poses of this subsection, the term ‘corrected error’ 

14 means a reasonable administrative error in imple15 menting an automatic enrollment or automatic esca16 lation feature in accordance with the terms of an eli17 gible automatic contribution arrangement (as de18 fined under subsection (w)(3)), provided that the im19 plementation failure is corrected by the date that is 

91 20 ⁄2 months after the end of the plan year during 

21 which the failure occurred. Such correction may 

22 occur before or after the participant has terminated 

23 employment and may occur without regard to wheth24 er the error is identified by the Secretary.’’. 

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

26 this Act shall apply with respect to any errors with respect 


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1 to which the date referred to in section 414(aa) (as added 

2 by this section) is after the date of enactment of this Act. 

3 SEC. 114. ECONOMICALLY TARGETED INVESTMENTS. 

4 Subsection (a) of section 404 of the Employee Retire5 ment Income Security Act of 1974 (29 U.S.C. 1104) is 

6 amended by adding at the end the following new para7 graph: 

8 ‘‘(3) A fiduciary shall not fail to satisfy the require9 ments of this subsection solely by reason of taking into 

10 account economic, social, and governance factors in con11 nection with an investment or investment strategy, but 

12 only if the fiduciary prudently determines the investment 

13 is appropriate based solely on economic considerations, in14 cluding those derived from such factors.’’. 

15 SEC. 115. SMALL IMMEDIATE FINANCIAL INCENTIVES FOR 

16 CONTRIBUTING TO A PLAN. 

17 (a) IN GENERAL.—Subparagraph (A) of section 

18 401(k)(4) of the Internal Revenue Code of 1986 is amend19 ed by inserting ‘‘(other than a de minimus financial incen20 tive)’’ after ‘‘any other benefit’’. 

21 (b) EFFECTIVE DATE.—The amendments made by 

22 this section shall apply with respect to taxable years begin23 ning after the date of enactment of this Act. 


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1 TITLE II—PRESERVATION OF 

2 INCOME 

3 SEC. 201. AVAILABILITY OF DISTRIBUTION OPTIONS. 

4 (a) LIFETIME INCOME INVESTMENTS.—By the date 

5 that is one year after the date of enactment of this Act, 

6 the Secretary of the Treasury shall issue final regulations 

7 under which it is clarified that any specified age or service 

8 condition (or combination of age and service conditions) 

9 with respect to a lifetime income investment (as defined 

10 in section 401(a)(38)(B)(ii)) under a defined contribution 

11 plan shall be disregarded in determining whether such life12 time income investment is currently available to an em13 ployee for purposes of Treasury Regulation section 

14 1.401(a)(4)–4(b) (or any successor provision). 

15 (b) ENFORCEMENT.—As of the date of enactment of 

16 this Act, the Secretary of the Treasury shall administer 

17 and enforce the law in accordance with subsection (a) with 

18 respect to plan years beginning before, on, or after the 

19 date of enactment of this Act. 

20 (c) EFFECTIVE DATE.—This section shall take effect 

21 as of the date of enactment of this Act. 


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1 SEC. 202. PORTABILITY OF LIFETIME INCOME AND MAN2 AGED ACCOUNT OPTIONS. 

3 (a) IN GENERAL.—Subsection (a) of section 401 of 

4 the Internal Revenue Code of 1986 is amended by insert5 ing after paragraph (37) the following new paragraph: 

6 ‘‘(38) PORTABILITY OF LIFETIME INCOME AND

7 MANAGED ACCOUNT OPTIONS.— 

8 ‘‘(A) IN GENERAL.—A trust forming part 

9 of a defined contribution plan shall not be 

10 treated as failing to constitute a qualified trust 

11 under this section solely by reason of allowing— 

12 ‘‘(i) qualified distributions of a life13 time income investment or a managed ac14 count investment, or 

15 ‘‘(ii) distributions of a lifetime income 

16 investment in the form of a qualified plan 

17 distribution annuity contract, 

18 on or after the date that is 90 days prior to the 

19 date on which such lifetime income investment 

20 or such managed account investment is no 

21 longer authorized to be held as an investment 

22 option under the plan except as may otherwise 

23 be provided by regulations. 

24 ‘‘(B) DEFINITIONS.—For purposes of this 

25 subsection— 


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1 ‘‘(i) the term ‘qualified distribution’ 

2 means a direct trustee-to-trustee transfer 

3 to an eligible retirement plan (as defined 

4 in section 402(c)(8)(B)), as described in 

5 section 401(a)(31)(A), and in the case of a 

6 managed account investment, the eligible 

7 retirement plan must be maintained by the 

8 account manager of such managed account 

9 investment, 

10 ‘‘(ii) the term ‘lifetime income invest11 ment’ means an investment option that is 

12 designed to provide an employee with elec13 tion rights— 

14 ‘‘(I) that are not uniformly avail15 able with respect to other investment 

16 options under the plan, and 

17 ‘‘(II) that are to a lifetime in18 come feature available through a con19 tract or other arrangement offered 

20 under the plan or under another eligi21 ble retirement plan (as defined in sec22 tion 402(c)(8)(B)) through a direct 

23 trustee-to-trustee transfer to such 

24 other eligible retirement plan under 

25 section 401(a)(31)(A), 


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1 ‘‘(iii) the term ‘lifetime income fea2 ture’ means— 

3 ‘‘(I) a feature that guarantees a 

4 minimum level of income annually (or 

5 more frequently) for at least the re6 mainder of the life of the employee or 

7 the joint lives of the employee and the 

8 employee’s designated beneficiary, or 

9 ‘‘(II) an annuity payable on be10 half of the employee under which pay11 ments are made in substantially equal 

12 periodic payments (not less frequently 

13 than annually) over the life of the em14 ployee or the joint lives of the em15 ployee and the employee’s designated 

16 beneficiary, 

17 ‘‘(iv) the term ‘qualified plan distribu18 tion annuity contract’ means an annuity 

19 contract purchased for a participant and 

20 distributed to the participant by a plan de21 scribed in subparagraph (B) of section 

22 402(c)(8) (without regard to clauses (i) 

23 and (ii) thereof), 

24 ‘‘(v) the term ‘managed account in25 vestment’ means an investment option 


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1 under which the assets of the employee’s 

2 individual account are managed by an ac3 count manager, applying generally accept4 ed investment theories, to achieve varying 

5 degrees of long-term appreciation and cap6 ital preservation based on the employee’s 

7 age, target retirement date or life expect8 ancy, 

9 ‘‘(vi) the term ‘account manager’ 

10 means an investment manager (within the 

11 meaning of section 3(38) of the Employee 

12 Retirement Income Security Act), and 

13 ‘‘(vii) a lifetime income investment or 

14 managed account investment is treated as 

15 no longer authorized to be held as an in16 vestment under the plan if such treatment 

17 applies to all plan participants or to a class 

18 of such participants, as determined in any 

19 reasonable manner.’’. 

20 (b) CASH OR DEFERRED ARRANGEMENT.—Clause (i) 

21 of section 401(k)(2)(B) of such Code is amended by strik22 ing ‘‘or’’ at the end of subclause (IV), by striking ‘‘and’’ 

23 at the end of subclause (V) and inserting ‘‘or’’, and by 

24 adding at the end of clause (i) the following: 


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1 ‘‘(VI) with respect to amounts in2 vested in a lifetime income investment 

3 (as defined in section 

4 401(a)(38)(B)(ii)) or a managed ac5 count investment (as defined in sec6 tion 401(a)(38)(B)(v)), the date that 

7 is 90 days prior to the date that such 

8 lifetime income investment or such 

9 managed account investment may no 

10 longer be held as an investment option 

11 under the plan (within the meaning of 

12 section 401(a)(38)(B)(vii)), provided 

13 that any distribution under this sub14 clause must be in the form of a quali15 fied distribution (as defined in section 

16 401(a)(38)(B)(i)) or, in the case of a 

17 lifetime income investment, a qualified 

18 plan distribution annuity contract (as 

19 defined in section 401(a)(38)(B)(iv)), 

20 and’’. 

21 (c) SECTION 403(b) PLANS.— 

22 (1) ANNUITY CONTRACTS.—Paragraph (11) of 

23 section 403(b) of such Code is amended by striking 

24 ‘‘or’’ at the end of subparagraph (B), by striking the 

25 period at the end of subparagraph (C), and by inVerDate Sep 11 2014 21:46 Dec 07, 2017 Jkt 079200 PO 00000 Frm 00032 Fmt 6652 Sfmt 6201 E:\BILLS\H4524.IH H4524

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1 serting ‘‘, or’’, and by adding at the end the fol2 lowing: 

3 ‘‘(D) with respect to amounts invested in a 

4 lifetime income investment (as defined in sec5 tion 401(a)(38)(B)(ii)) or a managed account 

6 investment (as defined in section 

7 401(a)(38)(B)(v)), the date that is 90 days 

8 prior to the date that such lifetime income in9 vestment or such managed account investment 

10 may no longer be held as an investment option 

11 under the plan (within the meaning of section 

12 401(a)(38)(B)(vii)), provided that any distribu13 tion under this subparagraph must be in the 

14 form of a qualified distribution (as defined in 

15 section 401(a)(38)(B)(i)) or, in the case of a 

16 lifetime income investment, a qualified plan dis17 tribution annuity contract (as defined in section 

18 401(a)(38)(B)(iv)).’’. 

19 (2) CUSTODIAL ACCOUNTS.—Clause (ii) of sec20 tion 403(b)(7)(A) of such Code is amended to read 

21 as follows: 

22 ‘‘(ii) under the custodial account, no 

23 such amounts may be paid or made avail24 able to any distributee (unless such 


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1 amount is a distribution to which section 

2 72(t)(2)(G) applies) before— 

3 ‘‘(I) the employee dies, 

4 ‘‘(II) the employee attains age 

591 5 ⁄2, 

6 ‘‘(III) the employee has a sever7 ance from employment, 

8 ‘‘(IV) the employee becomes dis9 abled (within the meaning of section 

10 72(m)(7)), 

11 ‘‘(V) in the case of contributions 

12 made pursuant to a salary reduction 

13 agreement (within the meaning of sec14 tion 3121(a)(5)(D)), the employee en15 counters financial hardship, or 

16 ‘‘(VI) with respect to amounts in17 vested in a lifetime income investment 

18 (as defined in section 

19 401(a)(38)(B)(ii)) or a managed ac20 count investment (as defined in sec21 tion 401(a)(38)(B)(v)), the date that 

22 is 90 days prior to the date that such 

23 lifetime income investment or such 

24 managed account investment may no 

25 longer be held as an investment option 


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1 under the plan (within the meaning of 

2 section 401(a)(38)(B)(vii)), provided 

3 that any distribution under this sub4 paragraph must be in the form of a 

5 qualified distribution (as defined in 

6 section 401(a)(38)(B)(i)) or, in the 

7 case of a lifetime income investment, 

8 a qualified plan distribution annuity 

9 contract (as defined in section 

10 401(a)(38)(B)(iv)).’’. 

11 (d) ELIGIBLE DEFERRED COMPENSATION PLANS.— 

12 Subparagraph (A) of section 457(d)(1) of such Code is 

13 amended by striking ‘‘or’’ at the end of clause (ii), by in14 serting ‘‘or’’ at the end of clause (iii), and by adding after 

15 clause (iii) the following: 

16 ‘‘(iv) with respect to amounts invested 

17 in a lifetime income investment (as defined 

18 in section 401(a)(38)(B)(ii)) or a managed 

19 account investment (as defined in section 

20 401(a)(38)(B)(v)), the date that is 90 days 

21 prior to the date that such lifetime income 

22 investment or such managed account in23 vestment may no longer be held as an in24 vestment option under the plan (within the 

25 meaning of section 401(a)(38)(B)(vii)), 


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1 provided that any distribution under this 

2 subparagraph must be in the form of a 

3 qualified distribution (as defined in section 

4 401(a)(38)(B)(i)) or, in the case of a life5 time income investment, a qualified plan 

6 distribution annuity contract (as defined in 

7 section 401(a)(38)(B)(iv)),’’. 

8 (e) EFFECTIVE DATE.—The amendments made by 

9 this section shall apply to plan years beginning after De10 cember 31, 2017. 

11 SEC. 203. QUALIFYING LONGEVITY ANNUITY CONTRACTS. 

12 (a) IN GENERAL.—By the date that is one year after 

13 the date of enactment of this Act, the Secretary of the 

14 Treasury shall amend the regulation issued by the Depart15 ment of the Treasury relating to ‘‘Longevity Annuity Con16 tracts’’ 79 Fed. Reg. 37633 (July 2, 2014), as follows: 

17 (1) REPEAL 25-PERCENT PREMIUM LIMIT.—The 

18 Secretary shall amend Q&A–17(b)(3) of 26 C.F.R. 

19 section 1.401(a)(9)–6 and Q&A–12(b)(3) of 26 

20 C.F.R. section 1.408–8 to eliminate the requirement 

21 that premiums for qualifying longevity annuity con22 tracts be limited to 25 percent of an individual’s ac23 count balance, and to make such corresponding 

24 changes to the regulations and related forms as nec25 essary to reflect the elimination of this requirement. 


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1 (2) INCREASE DOLLAR LIMITATION.— 

2 (A) The Secretary shall amend Q&A– 

3 17(b)(2)(i) of 26 C.F.R. section 1.401(a)(9)–6 

4 and Q&A–12(b)(2)(i) of 26 C.F.R. section 

5 1.408–8 to increase the dollar limitation on pre6 miums for qualifying longevity annuity con7 tracts from $125,000 to $200,000, and to make 

8 such corresponding changes to the regulations 

9 and related forms as necessary to reflect this 

10 increase in the dollar limitation. 

11 (B) The Secretary shall amend Q&A– 

12 17(d)(2)(i) of 26 C.F.R. section 1.401(a)(9)–6 

13 to provide that, in the case of calendar years 

14 beginning on or after January 1 of the second 

15 year following the year of enactment of this 

16 Act, the $200,000 dollar limitation (as in17 creased by subparagraph (A)) will be adjusted 

18 at the same time and in the same manner as 

19 the limits are adjusted under section 415(d) of 

20 the Internal Revenue Code of 1986, except that 

21 the base period shall be the calendar quarter 

22 beginning July 1 of the year of enactment of 

23 this Act, and any increase to such dollar limita24 tion that is not a multiple of $10,000 will be 

25 rounded to the next lowest multiple of $10,000. 


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1 (3) FACILITATE JOINT AND SURVIVOR BENE2 FITS.—The Secretary shall amend Q&A–17(c) of 26 

3 C.F.R. section 1.401(a)(9)–6, and make such cor4 responding changes to the regulations and related 

5 forms as necessary, to provide that in the case of a 

6 qualifying longevity annuity contract that was pur7 chased with joint and survivor annuity benefits for 

8 the individual and his or her spouse that were per9 missible under the regulations at the time the con10 tract was originally purchased, a divorce occurring 

11 after the original purchase and before the annuity 

12 payments commence under the contract will not af13 fect the permissibility of the joint and survivor an14 nuity benefits or other benefits under the contract, 

15 or require any adjustment to the amount or duration 

16 of benefits payable under the contract, provided that 

17 a qualified domestic relations order (within the 

18 meaning of section 414(p) of the Internal Revenue 

19 Code of 1986) or a divorce or separation instrument 

20 (within the meaning of section 71(b)(2) of the Inter21 nal Revenue Code of 1986)— 

22 (A) provides that the former spouse is en23 titled to the survivor benefits under the con24 tract; 


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1 (B) does not modify the treatment of the 

2 former spouse as the beneficiary under the con3 tract who is entitled to the survivor benefits; or 

4 (C) does not modify the treatment of the 

5 former spouse as the measuring life for the sur6 vivor benefits under the contract. 

7 (b) EFFECTIVE DATES, ENFORCEMENT, AND INTER8 PRETATIONS.— 

9 (1) EFFECTIVE DATES.— 

10 (A) Paragraphs (1) and (2) of subsection 

11 (a) shall be effective with respect to contracts 

12 purchased or received in an exchange on or 

13 after the date of enactment of this Act. 

14 (B) Paragraph (3) of subsection (a) shall 

15 be effective with respect to contracts purchased 

16 or received in an exchange on or after July 2, 

17 2014. 

18 (2) ENFORCEMENT AND INTERPRETATIONS.— 

19 Prior to the date that the Secretary of the Treasury 

20 issues final regulations pursuant to subsection (a)— 

21 (A) the Secretary shall administer and en22 force the law in accordance with subsection (a) 

23 and the effective dates in paragraph (1) of this 

24 subsection; and 


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1 (B) taxpayers may rely upon their reason2 able good faith interpretations of subsection (a). 

3 SEC. 204. REMOVE REQUIRED MINIMUM DISTRIBUTION 

4 BARRIERS FOR LIFE ANNUITIES. 

5 (a) IN GENERAL.—Paragraph (9) of section 401(a) 

6 of the Internal Revenue Code of 1986, as amended by sec7 tion 111 of this Act, is further amended by adding at the 

8 end the following new subparagraph: 

9 ‘‘(I) CERTAIN INCREASES IN PAYMENTS

10 UNDER A COMMERCIAL ANNUITY.—Nothing in 

11 this section shall prohibit a commercial annuity 

12 (within the meaning of section 3405(e)(6)) that 

13 is issued in connection with any eligible retire14 ment plan (within the meaning of section 

15 402(c)(8)(B)) from providing one or more of 

16 the following types of payments on or after the 

17 annuity starting date: 

18 ‘‘(i) annuity payments that increase 

19 by a constant percentage, applied not less 

20 frequently than annually, at a rate that is 

21 less than 5 percent per year, 

22 ‘‘(ii) a lump sum payment that— 

23 ‘‘(I) results in a shortening of the 

24 payment period with respect to an an25 nuity or a full or partial commutation 


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1 of the future annuity payments, pro2 vided that such lump sum is deter3 mined using reasonable actuarial 

4 methods and assumptions, as deter5 mined in good faith by the issuer of 

6 the contract, or 

7 ‘‘(II) accelerates the receipt of 

8 annuity payments that are scheduled 

9 to be received within the ensuing 12 

10 months, regardless of whether such 

11 acceleration shortens the payment pe12 riod with respect to the annuity, re13 duces the dollar amount of benefits to 

14 be paid under the contract, or results 

15 in a suspension of annuity payments 

16 during the period being accelerated, 

17 ‘‘(iii) an amount which is in the na18 ture of a dividend or similar distribution, 

19 provided that the issuer of the contract de20 termines such amount based on a reason21 able comparison of the actuarial factors as22 sumed when calculating the initial annuity 

23 payments and the issuer’s experience with 

24 respect to those factors, or 


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1 ‘‘(iv) a final payment upon death that 

2 does not exceed the excess of the total 

3 amount of the consideration paid for the 

4 annuity payments, less the aggregate 

5 amount of prior distributions or payments 

6 from or under the contract.’’. 

7 (b) REGULATIONS AND ENFORCEMENT.— 

8 (1) REGULATIONS.—By the date that is one 

9 year after the date of enactment of this Act, the 

10 Secretary of the Treasury shall amend the regula11 tion issued by the Department of the Treasury relat12 ing to ‘‘Required Distributions from Retirement 

13 Plans,’’ 69 Fed. Reg. 33288 (June 15, 2004), and 

14 make any corresponding amendments to other regu15 lations, in order to— 

16 (A) conform such regulations to subsection 

17 (a), including by eliminating the types of pay18 ments described in subsection (a) from the 

19 scope of the requirement in Q&A–14(c) of 26 

20 C.F.R. section 1.401(a)(9)–6 that the total fu21 ture expected payments must exceed the total 

22 value being annuitized; 

23 (B) amend Q&A–14(c) of 26 C.F.R. sec24 tion 1.401(a)(9)–6 to provide that a commercial 

25 annuity that provides an initial payment that is 


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1 at least equal to the initial payment that would 

2 be required from an individual account pursu3 ant to 26 C.F.R. section 1.401(a)(9)–5 will be 

4 deemed to satisfy the requirement in Q&A– 

5 14(c) of 26 C.F.R. section 1.401(a)(9)–6 that 

6 the total future expected payments must exceed 

7 the total value being annuitized; and 

8 (C) amend Q&A–14(e)(3) of 26 C.F.R. 

9 section 1.401(a)(9)–6 to provide that the total 

10 future expected payments under a commercial 

11 annuity are determined using the tables or 

12 other actuarial assumptions that the issuer of 

13 the contract actually uses in pricing the pre14 miums and benefits with respect to the con15 tract, provided that such tables or other actu16 arial assumptions are reasonable. 

17 (2) ENFORCEMENT.—As of the date of enact18 ment of this Act, the Secretary of the Treasury shall 

19 administer and enforce the law in accordance with 

20 subsections (a) and (b) with respect to taxable years 

21 beginning before, on, or after the date of enactment 

22 of this Act. 

23 (c) EFFECTIVE DATE.—This section shall take effect 

24 as of the date of enactment of this Act. 


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1 TITLE III—SIMPLIFICATION AND 

2 CLARIFICATION OF QUALI3 FIED RETIREMENT PLAN 

4 RULES 

5 SEC. 301. EXCEPTION FROM REQUIRED DISTRIBUTIONS 

6 WHERE AGGREGATE RETIREMENT SAVINGS 

7 DO NOT EXCEED $250,000. 

8 (a) IN GENERAL.—Section 401(a)(9) of the Internal 

9 Revenue Code of 1986, as amedended by sections 111 and 

10 204, is further amended by adding at the end the following 

11 new subparagraph: 

12 ‘‘(J) EXCEPTION FROM REQUIRED MIN13 IMUM DISTRIBUTIONS DURING LIFE OF EM14 PLOYEE OR BENEFICIARY WHERE ASSETS DO

15 NOT EXCEED $250,000.— 

16 ‘‘(i) IN GENERAL.—If, as of a meas17 urement date, the aggregate value of the 

18 entire interest of an employee under all ap19 plicable eligible retirement plans does not 

20 exceed $250,000, then, during any suc21 ceeding calendar year beginning before the 

22 next measurement date— 

23 ‘‘(I) the requirements of subpara24 graph (A) shall not apply to the em25 ployee, and 


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1 ‘‘(II) the requirements of sub2 paragraph (B) shall not apply to the 

3 employee’s designated beneficiary with 

4 respect to the designated beneficiary’s 

5 interest in the interest of the deceased 

6 employee. 

7 ‘‘(ii) APPLICABLE ELIGIBLE RETIRE8 MENT PLAN.—For purposes of this sub9 paragraph, the term ‘applicable eligible re10 tirement plan’ means an eligible retirement 

11 plan (as defined in section 402(c)(8)(B)) 

12 and any other plan, contract, or arrange13 ment to which the requirements of this 

14 paragraph apply. 

15 ‘‘(iii) SPECIAL RULE FOR BENEFITS

16 PAID AS A LIFE ANNUITY FROM DEFINED

17 BENEFIT PLAN.—In determining the ag18 gregate value under clause (i), there shall 

19 not be taken into account the value of any 

20 benefits under a defined benefit plan that, 

21 on the measurement date, are being paid 

22 as a life annuity. 

23 ‘‘(iv) MEASUREMENT DATE.— 

24 ‘‘(I) INITIAL MEASUREMENT

25 DATES.—The initial measurement 


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1 date for an employee is the last day of 

2 the calendar year preceding the earlier 

3 of— 

4 ‘‘(aa) the calendar year in 

5 which the employee attains the 

6 applicable age, or 

7 ‘‘(bb) the calendar year in 

8 which the employee dies. 

9 ‘‘(II) SUBSEQUENT MEASURE10 MENT DATES.—If, in a calendar year, 

11 an employee to whom subparagraph 

12 (A) or (B) does not apply by reason 

13 of clause (i) receives contributions, 

14 rollovers, or transfers of amounts, or 

15 accrues additional benefits under a 

16 defined benefit plan, that were not 

17 previously taken into account in ap18 plying this subparagraph, then the 

19 last day of that calendar year shall be 

20 a new measurement date and a new 

21 determination shall be made as to 

22 whether clause (i) applies to such em23 ployee. 

24 ‘‘(v) DETERMINATION OF VALUE.— 

25 For purposes of this subparagraph— 


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1 ‘‘(I) IN GENERAL.—Except as 

2 provided in subclause (II), the value 

3 of an employee’s interest in a plan is 

4 the account balance of such plan. 

5 ‘‘(II) DEFINED BENEFIT

6 PLANS.—The value of defined benefit 

7 plan benefits shall be determined in 

8 accordance with the applicable inter9 est rate and applicable mortality rate 

10 assumptions under section 417(e), ex11 cept that the value shall be equal to 

12 the amount of the single sum payment 

13 payable to the extent available under 

14 the plan. 

15 ‘‘(vi) PHASE-OUT OF EXCEPTION.—In 

16 the case of an employee whose aggregate 

17 balance described in clause (i) as of a 

18 measurement date exceeds the dollar 

19 amount in effect under such clause by less 

20 than $10,000, the required distributions 

21 under this paragraph for calendar years 

22 beginning after such measurement date 

23 and before the next measurement date 

24 shall be equal to the amount which bears 

25 the same ratio to the required distributions 


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1 otherwise determined under this paragraph 

2 as— 

3 ‘‘(I) the amount by which such 

4 aggregate balance exceeds such dollar 

5 amount so in effect, bears to 

6 ‘‘(II) $10,000. 

7 ‘‘(vii) COST OF LIVING ADJUST8 MENTS.—The Secretary shall adjust annu9 ally the $250,000 amount specified in 

10 clause (i) for increases in the cost-of-living 

11 at the same time and in the same manner 

12 as adjustments under section 415(d); ex13 cept that the base period shall be the cal14 endar quarter beginning July 1, 2017, and 

15 any increase which is not a multiple of 

16 $5,000 shall be rounded to the next lowest 

17 multiple of $5,000.’’. 

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

19 this section shall apply to initial measurement dates occur20 ring on or after December 31, 2017. 

21 SEC. 302. EXPANSION OF EMPLOYEE PLANS COMPLIANCE 

22 RESOLUTION SYSTEM. 

23 (a) IN GENERAL.—Not later than one year after the 

24 date of the enactment of this Act, the Secretary of the 

25 Treasury shall modify the Employee Plans Compliance 


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1 Resolution System (as described in Revenue Procedure 

2 2016–51 or any successor guidance) to achieve the results 

3 specified in the succeeding subsections of this section and 

4 to further facilitate corrections and compliance in such 

5 other means as the Secretary deems appropriate. 

6 (b) LOAN ERROR.— 

7 (1) In the case of plan loan errors for which 

8 corrections are specified under the voluntary compli9 ance program, self-correction shall be made available 

10 by methods applicable to such loans through the vol11 untary compliance program. 

12 (2) The Secretary of Labor shall treat any loan 

13 error corrected pursuant to paragraph (1) as meet14 ing the requirements of the Voluntary Fiduciary 

15 Correction Program of the Department of Labor. 

16 (c) EPCRS FOR IRAS.—The Secretary of the Treas17 ury shall expand the Employee Plans Compliance Resolu18 tion System to allow custodians of individual retirement 

19 plans to address inadvertent errors for which the owner 

20 of an individual retirement plan was not at fault, including 

21 (but not limited to)— 

22 (1) waivers of the excise tax that would other23 wise apply under section 4974 of the Internal Rev24 enue Code of 1986; 


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1 (2) under the self-correction component of the 

2 Employee Plans Compliance Resolution System, 

3 waivers of the 60-day deadline for a rollover where 

4 the deadline is missed for reasons beyond the rea5 sonable control of the account owner; and 

6 (3) rules permitting a nonspouse beneficiary to 

7 return distributions to an inherited individual retire8 ment plan described in section 408(d)(3)(C) of the 

9 Internal Revenue Code of 1986 in a case where, due 

10 to an inadvertent error by a service provider, the 

11 beneficiary had reason to believe that the distribu12 tion could be rolled over without inclusion in income 

13 of any part of the distributed amount. 

14 (d) REQUIRED MINIMUM DISTRIBUTION CORREC15 TIONS.—The Secretary of the Treasury shall expand the 

16 Employee Plans Compliance Resolution System to allow 

17 plans to which such system applies and custodians of indi18 vidual retirement plans to self-correct, without an excise 

19 tax, any inadvertent errors pursuant to which a distribu20 tion is made no more than 180 days after it was required 

21 to be made. 


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1 SEC. 303. REVIEW AND REPORT TO THE CONGRESS RELAT2 ING TO REPORTING AND DISCLOSURE RE3 QUIREMENTS. 

4 (a) STUDY.—As soon as practicable after the date of 

5 the enactment of this Act, the Secretary of Labor, the Sec6 retary of the Treasury, and the Pension Benefit Guaranty 

7 Corporation shall review the reporting and disclosure re8 quirements of— 

9 (1) title I of the Employee Retirement Income 

10 Security Act of 1974 applicable to pension plans (as 

11 defined in section 3(2) of such Act); and 

12 (2) the Internal Revenue Code of 1986 applica13 ble to qualified retirement plans (as defined in sec14 tion 4974(c) of such Code without regard to para15 graphs (4) and (5) thereof). 

16 (b) REPORT.—Not later than 18 months after the 

17 date of the enactment of this Act, the Secretary of Labor, 

18 the Secretary of the Treasury, and the Pension Benefit 

19 Guaranty Corporation, jointly, shall make such rec20 ommendations as may be appropriate to the appropriate 

21 committees of the Congress to consolidate, simplify, stand22 ardize, and improve the applicable reporting and disclo23 sure requirements so as to simplify reporting for plans ref24 erenced to in subsection (a) and ensure that needed under25 standable information is provided to participants and 

26 beneficiaries of such plans. 


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1 SEC. 304. CONSOLIDATION OF DEFINED CONTRIBUTION 

2 PLAN NOTICES. 

3 (a) IN GENERAL.— 

4 (1) Not later than 18 months after the date of 

5 the enactment of this Act, the Secretary of Labor 

6 and the Secretary of the Treasury shall adopt final 

7 regulations providing that a plan may, but is not re8 quired to, consolidate two or more of the notices re9 quired under sections 404(c)(5)(B) and 514(e)(3) of 

10 the Employee Retirement Income Security Act of 

11 1974 (29 U.S.C. 1144(e)(3)), sections 

12 401(k)(12)(D), 401(k)(13)(E), and 414(w)(4) of the 

13 Internal Revenue Code of 1986, and section 

14 2550.404a–5 of title 29, Code of Federal Regula15 tions (29 C.F.R. 2550.404a–5) into a single notice 

16 or, to the extent provided by such regulations, con17 solidate such notices with the summary plan descrip18 tion or summary of material modifications described 

19 in section 104(b) of the Employee Retirement In20 come Security Act of 1974 (29 U.S.C. 1024(b)), so 

21 long as the combined notice, summary plan descrip22 tion or summary of material modifications includes 

23 the required content, clearly identifies the issues ad24 dressed therein, and is provided at the time and with 

25 the frequency required for each such notice. 


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1 (2) The Secretary of Labor and the Secretary 

2 of the Treasury may include in such regulations 

3 rules to ensure that, to the extent such notices are 

4 consolidated with the summary plan description or 

5 summary of material modifications, the presentation, 

6 placement, or prominence of the information in such 

7 notices shall not have the effect of failing to inform 

8 participants and beneficiaries regarding the informa9 tion in such notices. 

10 (b) PROVISION OF ANNUAL NOTICES WITHOUT RE11 GARD TO PLAN YEAR.— 

12 (1) Clause (i) of section 404(c)(5)(B) of the 

13 Employee Retirement Income Security Act of 1974 

14 (29 U.S.C. 1104(c)(5)(B)) is amended— 

15 (A) in subclause (I) by striking ‘‘within a 

16 reasonable period of time before each plan 

17 year,’’ and inserting ‘‘within a reasonable pe18 riod before the arrangement described in sub19 paragraph (A) applies to such participant or 

20 beneficiary, and thereafter at least once within 

21 any 12-month period (without regard to the 

22 plan year) during which such arrangement ap23 plies,’’; and 

24 (B) in subclause (II) by striking ‘‘and be25 fore the beginning of the plan year’’. 


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1 (2) Subparagraph (A) of section 514(e)(3) of 

2 the Employee Retirement Income Security Act of 

3 1974 (29 U.S.C. 1144(e)(3)(A)) is amended by 

4 striking ‘‘, within a reasonable period before such 

5 plan year, provide to each participant to whom the 

6 arrangement applies for such plan year’’ and insert7 ing ‘‘, within a reasonable period before the arrange8 ment applies to a participant or beneficiary, and 

9 thereafter at least once within any 12-month period 

10 (without regard to the plan year) during which such 

11 arrangement applies, provide’’. 

12 (3) Clause (i) of section 401(k)(13)(E) of the 

13 Internal Revenue Code of 1986 is amended by strik14 ing ‘‘, within a reasonable period before each plan 

15 year, each employee eligible to participate in the ar16 rangement for such year receives’’ and inserting 

17 ‘‘each employee eligible to participate in the arrange18 ment receives, within a reasonable period before the 

19 employee becomes eligible, and thereafter within a 

20 reasonable period before each plan year during 

21 which such arrangement applies,’’. 

22 (4) Subparagraph (D) of section 401(k)(12) of 

23 the Internal Revenue Code of 1986 is amended by 

24 striking ‘‘, within a reasonable period before any 

25 year, given written notice’’ and inserting ‘‘given 


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1 written notice, within a reasonable period before the 

2 employee becomes eligible, and thereafter within a 

3 reasonable period before each plan year during 

4 which such arrangement applies,’’. 

5 (5) Subparagraph (A) of section 414(w)(4) of 

6 the Internal Revenue Code of 1986 is amended by 

7 striking ‘‘, within a reasonable period before each 

8 plan year, give to each employee to whom an ar9 rangement described in paragraph (3) applies for 

10 such plan year’’ and inserting ‘‘, within a reasonable 

11 period before an arrangement described in para12 graph (3) applies to an employee, and thereafter at 

13 least once within any 12-month period (without re14 gard to the plan year) during which such arrange15 ment applies, give to each such employee’’. 

16 SEC. 305. PERFORMANCE BENCHMARKS FOR ASSET ALLO17 CATION FUNDS. 

18 (a) IN GENERAL.—Not later than six months after 

19 the date of enactment of this Act, the Secretary of Labor 

20 shall modify the regulations under section 404 of the Em21 ployee Retirement Income Security Act of 1974 to provide 

22 that, in the case of a designated investment alternative 

23 that contains a mix of asset classes, a plan administrator 

24 may, but is not required to, use a benchmark that is a 


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1 blend of different broad-based securities market indices 

2 if— 

3 (1) the blend is reasonably representative of the 

4 asset class holdings of the designated investment al5 ternative; 

6 (2) for purposes of determining the blend’s re7 turns for 1-, 5-, and 10-calendar year periods (or for 

8 the life of the alternative, if shorter), the blend is 

9 modified at least once per year to reflect changes in 

10 the asset class holdings of the designated investment 

11 alternative; and 

12 (3) each securities market index that is used for 

13 an associated asset class would separately satisfy the 

14 requirements of such regulations for such asset 

15 class. 

16 (b) STUDY.—Not later than December 31, 2018, the 

17 Secretary of Labor shall deliver a report to the House 

18 Committee on Ways and Means, the House Committee on 

19 Education and the Workforce, the Senate Committee on 

20 Finance, and the Senate Committee on Health, Education, 

21 Labor and Pensions regarding the effectiveness of the 

22 benchmarking requirements under 29 C.F.R. section 

23 2550.404a–5. 


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1 SEC. 306. PERMIT NONSPOUSAL BENEFICIARIES TO ROLL 

2 ASSETS TO PLANS. 

3 (a) IN GENERAL.—Section 402(c) of the Internal 

4 Revenue Code of 1986 is amended by adding at the end 

5 the following new paragraph: 

6 ‘‘(12) DISTRIBUTIONS TO QUALIFIED PLAN OF

7 NONSPOUSE BENEFICIARY.—If, with respect to any 

8 portion of a distribution from an eligible retirement 

9 plan described in paragraph (8)(B)(iii) of a deceased 

10 employee, a direct trustee-to-trustee transfer is made 

11 to a plan or annuity described in clause (iii), (iv), 

12 (v), or (vi) of paragraph (8)(B) of an individual who 

13 is a designated beneficiary (as defined by section 

14 401(a)(9)(E)) of the employee and who is not the 

15 surviving spouse of the employee— 

16 ‘‘(A) the transfer shall be treated as an eli17 gible rollover distribution, and 

18 ‘‘(B) section 401(a)(9)(B) (other than 

19 clause (iv) thereof) shall apply to such plan.’’. 

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

21 subsection (a) shall apply to distributions made after the 

22 date of the enactment of this Act. 


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1 SEC. 307. ELIMINATE THE ‘‘FIRST DAY OF THE MONTH’’ RE2 QUIREMENT. 

3 (a) IN GENERAL.—Paragraph (4) of section 457(b) 

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

5 as follows: 

6 ‘‘(4) which provides that compensation will be 

7 deferred only if an agreement providing for such de8 ferral has been entered into before the compensation 

9 is currently available to the individual,’’. 

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

11 this section shall apply to years beginning after the date 

12 of the enactment of this Act. 

13 SEC. 308. OFFICE OF PARTICIPANT AND PLAN SPONSOR AD14 VOCATE. 

15 (a) IN GENERAL.—Section 7803 of the Internal Rev16 enue Code of 1986 is amended by adding at the end the 

17 following: 

18 ‘‘(e) PARTICIPANT AND PLAN SPONSOR ADVO19 CATE.— 

20 ‘‘(1) IN GENERAL.—There is established in the 

21 Internal Revenue Service an office to be known as 

22 the ‘Office of the Participant and Plan Sponsor Ad23 vocate’. 

24 ‘‘(2) PARTICIPANT AND PLAN SPONSOR ADVO25 CATE.— 


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1 ‘‘(A) IN GENERAL.—The Office of the Par2 ticipant and Plan Sponsor Advocate shall be 

3 under the supervision and direction of an offi4 cial to be known as the ‘Participant and Plan 

5 Sponsor Advocate’. The Commissioner shall se6 lect the Participant and Plan Sponsor Advocate 

7 without regard to the provisions of title 5, 

8 United States Code, relating to appointments in 

9 the competitive service or Senior Executive 

10 Service. 

11 ‘‘(B) DUTIES.—The Participant and Plan 

12 Sponsor Advocate shall— 

13 ‘‘(i) act as a liaison between the Inter14 nal Revenue Service, sponsors of qualified 

15 retirement plans (as defined in section 

16 4974(c)), and participants in such plans, 

17 ‘‘(ii) advocate for the full attainment 

18 of the rights of such plan sponsors and 

19 participants, 

20 ‘‘(iii) assist pension plan sponsors and 

21 participants in resolving disputes with the 

22 Internal Revenue Service, 

23 ‘‘(iv) identify areas in which partici24 pants and plan sponsors have persistent 


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1 problems in dealings with the Internal Rev2 enue Service, 

3 ‘‘(v) to the extent possible, propose 

4 changes in the administrative practices of 

5 the Internal Revenue Service to mitigate 

6 problems, 

7 ‘‘(vi) identify potential legislative 

8 changes which may be appropriate to miti9 gate problems, and 

10 ‘‘(vii) refer instances of fraud, waste, 

11 and abuse, and violations of law to the Of12 fice of the Treasury Inspector General for 

13 Tax Administration. 

14 ‘‘(C) REMOVAL.—The Participant and 

15 Plan Sponsor Advocate can only be removed 

16 from office or transferred to another position or 

17 location within the Internal Revenue Service by 

18 the Secretary of the Treasury. If the Partici19 pant and Plan Sponsor Advocate is removed 

20 from office or is transferred to another position 

21 or location within the Internal Revenue Service, 

22 the Secretary shall communicate in writing the 

23 reasons for any such removal or transfer to 

24 Congress not less than 30 days before the re25 moval or transfer. Nothing in this paragraph 


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1 shall prohibit a personnel action otherwise au2 thorized by law, other than transfer or removal. 

3 ‘‘(D) COMPENSATION.—The annual rate of 

4 basic pay for the Participant and Plan Sponsor 

5 Advocate shall be the same rate as the highest 

6 rate of basic pay established for the Senior Ex7 ecutive Service under section 5382 of title 5, 

8 United States Code, or, if the Commissioner so 

9 determines, at a rate fixed under section 9503 

10 of such title. 

11 ‘‘(3) ANNUAL REPORT.— 

12 ‘‘(A) IN GENERAL.—Not later than De13 cember 31 of each calendar year, the Partici14 pant and Plan Sponsor Advocate shall report to 

15 the Health, Education, Labor, and Pensions 

16 Committee of the Senate, the Committee on Fi17 nance of the Senate, the Committee on Edu18 cation and the Workforce of the House of Rep19 resentatives, and the Committee on Ways and 

20 Means of the House of Representatives on the 

21 activities of the Office of the Participant and 

22 Plan Sponsor Advocate during the fiscal year 

23 ending during such calendar year. 

24 ‘‘(B) CONTENT.—Each report submitted 

25 under subparagraph (A) shall— 


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1 ‘‘(i) summarize the assistance re2 quests received from participants and plan 

3 sponsors and describe the activities, and 

4 evaluate the effectiveness, of the Partici5 pant and Plan Sponsor Advocate during 

6 the preceding year, 

7 ‘‘(ii) identify significant problems the 

8 Participant and Plan Sponsor Advocate 

9 has identified, 

10 ‘‘(iii) include specific legislative and 

11 regulatory changes to address the prob12 lems, and 

13 ‘‘(iv) identify any actions taken to cor14 rect problems identified in any previous re15 port. 

16 ‘‘(C) CONCURRENT SUBMISSION.—The 

17 Participant and Plan Sponsor Advocate shall 

18 submit a copy of each report to the Secretary 

19 of the Treasury, the Commissioner of Internal 

20 Revenue, and any other appropriate official at 

21 the same time such report is submitted to the 

22 committees of Congress under subparagraph 

23 (A).’’. 

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

25 this section shall take effect on January 1, 2018. 


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1 SEC. 309. SIMPLIFYING 402(f) NOTICES. 

2 Not later than December 31, 2018, the Secretary of 

3 the Treasury, in consultation with the Secretary of Labor 

4 and the Director of the Pension Benefit Guaranty Cor5 poration, shall simplify the model notices issued under sec6 tion 402(f) of the Internal Revenue Code of 1986 so as 

7 to facilitate better understanding by recipients of different 

8 distribution options and corresponding tax consequences. 

9 Such model notices shall include an explanation of the ef10 fect of elections on spousal rights. 

11 SEC. 310. GUIDANCE RELATED TO CERTAIN OVERPAYMENT 

12 RECOUPMENT PRACTICES. 

13 (a) OVERPAYMENTS UNDER INTERNAL REVENUE

14 CODE.—Not later than December 31, 2018, the Secretary 

15 of the Treasury shall modify the Employee Plans Compli16 ance Resolution System (as described in Revenue Proce17 dure 2016–51 or any successor guidance)— 

18 (1) to clarify that in no case shall any person 

19 be required to seek recoupment of an inadvertent 

20 overpayment (as defined in such System) from a 

21 participant or beneficiary; and 

22 (2) in the case of an inadvertent overpayment, 

23 except as otherwise provided by such Secretary 

24 based on the size of the overpayment, a contribution 

25 of such overpayment that would qualify as a rollover 

26 under section 402(c), 403(a)(4), 403(b)(8), or 


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1 457(e)(16) of the Internal Revenue Code of 1986 

2 but for the fact that it is an overpayment, shall be 

3 treated as a rollover contribution for all purposes 

4 under such Code. 

5 (b) OVERPAYMENTS UNDER ERISA.—Not later than 

6 December 31, 2018, the Secretary of Labor shall prescribe 

7 rules under which no fiduciary of a plan shall have a duty 

8 under part 4 of title I of the Employee Retirement Income 

9 Security Act of 1974 to seek recoupment from a partici10 pant or beneficiary of an inadvertent overpayment (as de11 fined in the Employee Plans Compliance Resolution Sys12 tem issued by the Secretary of the Treasury, as described 

13 in Revenue Procedure 2016–51 or any successor guid14 ance), provided that such overpayment is paid back by the 

15 plan sponsor or other person. 

16 (c) OVERPAYMENTS BY PBGC.—Effective for over17 payments made to a participant or beneficiary after De18 cember 31, 2018, the Pension Benefit Guaranty Corpora19 tions shall not recoup any such overpayment by reducing 

20 any future payments with respect to the same participant 

21 or beneficiary by more than 10 percent. 

22 SEC. 311. RULES RELATING TO ELECTION OF SAFE HARBOR 

23 401(k) STATUS. 

24 (a) LIMITATION OF ANNUAL SAFE HARBOR NOTICE

25 TO MATCHING CONTRIBUTION PLANS.— 


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

2 401(k)(12) of the Internal Revenue Code of 1986 is 

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

4 that follows and inserting ‘‘if such arrangement— 

5 ‘‘(i) meets the contribution require6 ments of subparagraph (B) and the notice 

7 requirements of subparagraph (D), or 

8 ‘‘(ii) meets the contribution require9 ments of subparagraph (C).’’. 

10 (2) AUTOMATIC CONTRIBUTION ARRANGE11 MENTS.—Subparagraph (B) of section 401(k)(13) of 

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

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

14 arrangement— 

15 ‘‘(A) which is described in subparagraph 

16 (D)(i)(I) and meets the applicable requirements 

17 of subparagraphs (C) through (E), or 

18 ‘‘(B) which is described in subparagraph 

19 (D)(i)(II) and meets the applicable require20 ments of subparagraphs (C) and (D).’’. 

21 (b) NONELECTIVE CONTRIBUTIONS.—Section 

22 401(k)(12) of the Internal Revenue Code of 1986 is 

23 amended by redesignating subparagraph (F) as subpara24 graph (G), and by inserting after subparagraph (E) the 

25 following new subparagraph: 


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1 ‘‘(F) TIMING OF PLAN AMENDMENT FOR

2 EMPLOYER MAKING NONELECTIVE CONTRIBU3 TIONS.— 

4 ‘‘(i) IN GENERAL.—Except as pro5 vided in clause (ii), a plan may be amend6 ed after the beginning of a plan year to 

7 provide that the requirements of subpara8 graph (C) shall apply to the arrangement 

9 for the plan year, but only if the amend10 ment is adopted— 

11 ‘‘(I) at any time before the 30th 

12 day before the close of the plan year, 

13 or 

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

15 day under paragraph (8)(A) for dis16 tributing excess contributions for the 

17 plan year. 

18 ‘‘(ii) EXCEPTION WHERE PLAN PRO19 VIDED FOR MATCHING CONTRIBUTIONS.— 

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

21 if the plan provided at any time during the 

22 plan year that the requirements of sub23 paragraph (B) or paragraph (13)(D)(i)(I) 

24 applied to the plan year. 


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1 ‘‘(iii) 4-PERCENT CONTRIBUTION RE2 QUIREMENT.—Clause (i)(II) shall not 

3 apply to an arrangement unless the 

4 amount of the contributions described in 

5 subparagraph (C) which the employer is 

6 required to make under the arrangement 

7 for the plan year with respect to any em8 ployee is an amount equal to at least 4 

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

10 (c) AUTOMATIC CONTRIBUTION ARRANGEMENTS.— 

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

12 is amended by adding at the end the following : 

13 ‘‘(F) TIMING OF PLAN AMENDMENT FOR

14 EMPLOYER MAKING NONELECTIVE CONTRIBU15 TIONS.— 

16 ‘‘(i) IN GENERAL.—Except as pro17 vided in clause (ii), a plan may be amend18 ed after the beginning of a plan year to 

19 provide that the requirements of subpara20 graph (D)(i)(II) shall apply to the arrange21 ment for the plan year, but only if the 

22 amendment is adopted— 

23 ‘‘(I) at any time before the 30th 

24 day before the close of the plan year, 

25 or 


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1 ‘‘(II) at any time before the last 

2 day under paragraph (8)(A) for dis3 tributing excess contributions for the 

4 plan year. 

5 ‘‘(ii) EXCEPTION WHERE PLAN PRO6 VIDED FOR MATCHING CONTRIBUTIONS.— 

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

8 if the plan provided at any time during the 

9 plan year that the requirements of sub10 paragraph (D)(i)(I) or paragraph (12)(B) 

11 applied to the plan year. 

12 ‘‘(iii) 4-PERCENT CONTRIBUTION RE13 QUIREMENT.—Clause (i)(II) shall not 

14 apply to an arrangement unless the 

15 amount of the contributions described in 

16 subparagraph (D)(i)(II) which the em17 ployer is required to make under the ar18 rangement for the plan year with respect 

19 to any employee is an amount equal to at 

20 least 4 percent of the employee’s com21 pensation.’’. 

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

23 this section shall apply to plan years beginning after De24 cember 31, 2017. 


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1 SEC. 312. USE OF FORFEITURES TO FUND SAFE HARBOR 

2 CONTRIBUTIONS. 

3 (a) IN GENERAL.—Section 401(k) (as amended by 

4 this Act) is amended by adding at the end the following 

5 new paragraph: 

6 ‘‘(16) A matching contribution or nonelective 

7 contribution described in paragraph (3)(D)(ii), sub8 paragraph (B) or (C) of paragraph (12), or para9 graph (13)(D) shall not fail to satisfy the definition 

10 under such paragraph merely because the contribu11 tion is funded in whole or in part by forfeitures.’’. 

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

13 subsection (a) shall apply to forfeitures allocated in ac14 cordance with section 401(k)(16) of the Internal Revenue 

15 Code of 1986 (as added by subsection (a)) before, on or 

16 after the date of enactment of this Act. 

17 SEC. 313. TREATMENT OF CUSTODIAL ACCOUNTS ON TER18 MINATION OF SECTION 403(B) PLANS. 

19 Not later than six months after the date of enactment 

20 of this Act, the Secretary of the Treasury shall issue guid21 ance to provide that, if an employer terminates the plan 

22 under which amounts are contributed to a custodial ac23 count under subparagraph (A) of section 403(b)(7), the 

24 plan administrator or custodian may distribute an indi25 vidual custodial account in kind to a participant or bene26 ficiary of the plan and the distributed custodial account 


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1 shall be maintained by the custodian on a tax-deferred 

2 basis as a section 403(b)(7) custodial account, similar to 

3 the treatment of fully-paid individual annuity contracts 

4 under Revenue Ruling 2011–7, until amounts are actually 

5 paid to the participant or beneficiary. The guidance shall 

6 provide further (i) that the section 403(b)(7) status of the 

7 distributed custodial account is generally maintained if the 

8 custodial account thereafter adheres to the requirements 

9 of section 403(b) that are in effect at the time of the dis10 tribution of the account and (ii) that a custodial account 

11 would not be considered distributed to the participant or 

12 beneficiary if the employer has any material retained 

13 rights under the account (but the employer would not be 

14 treated as retaining material rights simply because the 

15 custodial account was originally opened under a group 

16 contract). Such guidance shall be retroactively effective for 

17 taxable years beginning after December 31, 2008. 

18 TITLE IV—DEFINED BENEFIT 

19 PLAN REFORMS 

20 SEC. 401. CASH BALANCE. 

21 (a) IN GENERAL.—Section 414 of the Internal Rev22 enue Code of 1986, as amended by this Act, is amended 

23 by adding at the end the following new subsection: 

24 ‘‘(bb) PROJECTED INTEREST CREDITING RATE.— 

25 For purposes of this part, in the case of an applicable deVerDate Sep 11 2014 21:46 Dec 07, 2017 Jkt 079200 PO 00000 Frm 00070 Fmt 6652 Sfmt 6201 E:\BILLS\H4524.IH H4524

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1 fined benefit plan that provides variable interest crediting 

2 rates, the interest crediting rate that is treated as in effect 

3 and as the projected interest crediting rate shall be a rea4 sonable projection of such variable interest crediting rate, 

5 subject to a maximum of 6 percent.’’. 

6 (b) EFFECTIVE DATE.—The amendments made by 

7 this section shall apply with respect to years beginning 

8 after the date of enactment of this Act. 

9 SEC. 402. ALIGNING USE OF LOOKBACK MONTHS TO DE10 TERMINE INTEREST RATES. 

11 The Secretary of the Treasury shall modify Treasury 

12 Regulation section 1.417(e)–1(d)(10)(ii) (or any successor 

13 provision) to provide that the same rule applicable to 

14 modifications of the time for determining the applicable 

15 interest rate shall apply to modifications of the time for 

16 determining any interest rate used by a plan to the extent 

17 that the use of such interest rate is permissible under sec18 tion 417(e)(3) of the Internal Revenue Code of 1986, pro19 vided that the regulations shall require that after any such 

20 modification of such time under a plan pursuant to this 

21 section, no further modifications of such time are to be 

22 permitted for five years with respect to such plan without 

23 the consent of the Secretary of the Treasury. As of the 

24 date of enactment of this Act, such regulation (or any suc25 cessor provision) shall be deemed to be amended in such 


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1 manner, so that this change in the regulations is deemed 

2 to have occurred. 

3 SEC. 403. ALIGNING EMPLOYER PENSION CONTRIBUTION 

4 DUE DATE WITH CORPORATE RETURN DUE 

5 DATE. 

6 (a) IN GENERAL.—Paragraph (1) of section 430(j) 

7 of the Internal Revenue Code of 1986 is amended by striking ‘‘8 1⁄2’’ and inserting ‘‘91 8 ⁄2’’. 

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

10 this section shall apply to payments made after the date 

11 of enactment of this Act. 

12 SEC. 404. CLARIFICATION OF THE ROLE OF THE PARTICI13 PANT AND PLAN SPONSOR ADVOCATE. 

14 Section 4004 of the Employee Retirement Income Se15 curity Act of 1974 (29 U.S.C. 1304) is amended— 

16 (1) in subsection (b)— 

17 (A) in paragraph (1), by striking ‘‘a liai18 son’’ and inserting ‘‘an independent liaison’’; 

19 and 

20 (B) in paragraph (3), by striking ‘‘assist’’ 

21 and inserting ‘‘advocate for’’; 

22 (2) by redesignating subsections (c) through (e) 

23 as subsections (d) through (f), respectively; and 

24 (3) by inserting after subsection (b) the fol25 lowing: 


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1 ‘‘(c) REQUESTS FOR INFORMATION.—The corpora2 tion shall, upon request, provide information to the Partic3 ipant and Plan Sponsor Advocate to the extent necessary 

4 to enable the Participant and Plan Sponsor Advocate to 

5 perform the responsibilities described under this section.’’. 

Æ 


sradovich on DSK3GMQ082PROD with BILLS