116TH CONGRESS 

1ST SESSION H. R. 1994 

AN ACT 

To amend the Internal Revenue Code of 1986 to encourage 

retirement savings, 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, 
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1 SECTION 1. SHORT TITLE, ETC. 

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

3 ‘‘Setting Every Community Up for Retirement Enhance4 ment Act of 2019’’. 

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

6 this Act is as follows: 

Sec. 1. Short title, etc. 

TITLE I—EXPANDING AND PRESERVING RETIREMENT SAVINGS 

Sec. 101. Multiple employer plans; pooled employer plans. 

Sec. 102. Increase in 10 percent cap for automatic enrollment safe harbor after 

1st plan year. 

Sec. 103. Rules relating to election of safe harbor 401(k) status. 

Sec. 104. Increase in credit limitation for small employer pension plan startup 

costs. 

Sec. 105. Small employer automatic enrollment credit. 

Sec. 106. Certain taxable non-tuition fellowship and stipend payments treated 

as compensation for IRA purposes. 

Sec. 107. Repeal of maximum age for traditional IRA contributions. 

Sec. 108. Qualified employer plans prohibited from making loans through credit 

cards and other similar arrangements. 

Sec. 109. Portability of lifetime income options. 

Sec. 110. Treatment of custodial accounts on termination of section 403(b) 

plans. 

Sec. 111. Clarification of retirement income account rules relating to churchcontrolled organizations. 

Sec. 112. 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. 113. Penalty-free withdrawals from retirement plans for individuals in case 

of birth of child or adoption. 

Sec. 114. Increase in age for required beginning date for mandatory distributions. 

Sec. 115. Special rules for minimum funding standards for community newspaper plans. 

Sec. 116. Treating excluded difficulty of care payments as compensation for determining retirement contribution limitations. 

TITLE II—ADMINISTRATIVE IMPROVEMENTS 

Sec. 201. Plan adopted by filing due date for year may be treated as in effect 

as of close of year. 

Sec. 202. Combined annual report for group of plans. 

Sec. 203. Disclosure regarding lifetime income. 

Sec. 204. Fiduciary safe harbor for selection of lifetime income provider. 

Sec. 205. Modification of nondiscrimination rules to protect older, longer service participants. 

Sec. 206. Modification of PBGC premiums for CSEC plans. 
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TITLE III—OTHER BENEFITS 

Sec. 301. Benefits provided to volunteer firefighters and emergency medical responders. 

Sec. 302. Expansion of section 529 plans. 

TITLE IV—REVENUE PROVISIONS 

Sec. 401. Modification of required distribution rules for designated beneficiaries. 

Sec. 402. Increase in penalty for failure to file. 

Sec. 403. Increased penalties for failure to file retirement plan returns. 

Sec. 404. Increase information sharing to administer excise taxes. 

TITLE V—TAX RELIEF FOR CERTAIN CHILDREN 

Sec. 501. Modification of rules relating to the taxation of unearned income of 

certain children. 

1 TITLE I—EXPANDING AND PRE2 SERVING RETIREMENT SAV3 INGS 

4 SEC. 101. MULTIPLE EMPLOYER PLANS; POOLED EM5 PLOYER PLANS. 

6 (a) QUALIFICATION REQUIREMENTS.— 

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

8 Revenue Code of 1986 is amended by adding at the 

9 end the following new subsection: 

10 ‘‘(e) APPLICATION OF QUALIFICATION REQUIRE11 MENTS FOR CERTAIN MULTIPLE EMPLOYER PLANS WITH

12 POOLED PLAN PROVIDERS.— 

13 ‘‘(1) IN GENERAL.—Except as provided in para14 graph (2), if a defined contribution plan to which 

15 subsection (c) applies— 
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1 ‘‘(A) is maintained by employers which 

2 have a common interest other than having 

3 adopted the plan, or 

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

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

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

7 the requirements under this title applicable to a plan 

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

9 of individual retirement accounts described in sec10 tion 408 (including by reason of subsection (c) 

11 thereof), whichever is applicable, merely because one 

12 or more employers of employees covered by the plan 

13 fail to take such actions as are required of such em14 ployers for the plan to meet such requirements. 

15 ‘‘(2) LIMITATIONS.— 

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

17 not apply to any plan unless the terms of the 

18 plan provide that in the case of any employer 

19 in the plan failing to take the actions described 

20 in paragraph (1)— 

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

22 to employees of such employer (or bene23 ficiaries of such employees) will be trans24 ferred to a plan maintained only by such 

25 employer (or its successor), to an eligible 
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1 retirement plan as defined in section 

2 402(c)(8)(B) for each individual whose ac3 count is transferred, or to any other ar4 rangement that the Secretary determines is 

5 appropriate, unless the Secretary deter6 mines it is in the best interests of the em7 ployees of such employer (and the bene8 ficiaries of such employees) to retain the 

9 assets in the plan, and 

10 ‘‘(ii) such employer (and not the plan 

11 with respect to which the failure occurred 

12 or any other employer in such plan) shall, 

13 except to the extent provided by the Sec14 retary, be liable for any liabilities with re15 spect to such plan attributable to employ16 ees of such employer (or beneficiaries of 

17 such employees). 

18 ‘‘(B) FAILURES BY POOLED PLAN PRO19 VIDERS.—If the pooled plan provider of a plan 

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

21 substantially all of the administrative duties 

22 which are required of the provider under para23 graph (3)(A)(i) for any plan year, the Secretary 

24 may provide that the determination as to 

25 whether the plan meets the requirements under 
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1 this title applicable to a plan described in sec2 tion 401(a) or to a plan that consists of indi3 vidual retirement accounts described in section 

4 408 (including by reason of subsection (c) 

5 thereof), whichever is applicable, shall be made 

6 in the same manner as would be made without 

7 regard to paragraph (1). 

8 ‘‘(3) POOLED PLAN PROVIDER.— 

9 ‘‘(A) IN GENERAL.—For purposes of this 

10 subsection, the term ‘pooled plan provider’ 

11 means, with respect to any plan, a person 

12 who— 

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

14 plan as a named fiduciary (within the 

15 meaning of section 402(a)(2) of the Em16 ployee Retirement Income Security Act of 

17 1974), as the plan administrator, and as 

18 the person responsible to perform all ad19 ministrative duties (including conducting 

20 proper testing with respect to the plan and 

21 the employees of each employer in the 

22 plan) which are reasonably necessary to 

23 ensure that— 

24 ‘‘(I) the plan meets any require25 ment applicable under the Employee 
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1 Retirement Income Security Act of 

2 1974 or this title to a plan described 

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

4 consists of individual retirement ac5 counts described in section 408 (in6 cluding by reason of subsection (c) 

7 thereof), whichever is applicable, and 

8 ‘‘(II) each employer in the plan 

9 takes such actions as the Secretary or 

10 such person determines are necessary 

11 for the plan to meet the requirements 

12 described in subclause (I), including 

13 providing to such person any disclo14 sures or other information which the 

15 Secretary may require or which such 

16 person otherwise determines are nec17 essary to administer the plan or to 

18 allow the plan to meet such require19 ments, 

20 ‘‘(ii) registers as a pooled plan pro21 vider with the Secretary, and provides such 

22 other information to the Secretary as the 

23 Secretary may require, before beginning 

24 operations as a pooled plan provider, 
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1 ‘‘(iii) acknowledges in writing that 

2 such person is a named fiduciary (within 

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

4 Employee Retirement Income Security Act 

5 of 1974), and the plan administrator, with 

6 respect to the plan, and 

7 ‘‘(iv) is responsible for ensuring that 

8 all persons who handle assets of, or who 

9 are fiduciaries of, the plan are bonded in 

10 accordance with section 412 of the Em11 ployee Retirement Income Security Act of 

12 1974. 

13 ‘‘(B) AUDITS, EXAMINATIONS AND INVES14 TIGATIONS.—The Secretary may perform au15 dits, examinations, and investigations of pooled 

16 plan providers as may be necessary to enforce 

17 and carry out the purposes of this subsection. 

18 ‘‘(C) AGGREGATION RULES.—For purposes 

19 of this paragraph, in determining whether a 

20 person meets the requirements of this para21 graph to be a pooled plan provider with respect 

22 to any plan, all persons who perform services 

23 for the plan and who are treated as a single 

24 employer under subsection (b), (c), (m), or (o) 

25 of section 414 shall be treated as one person. 
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1 ‘‘(D) TREATMENT OF EMPLOYERS AS PLAN

2 SPONSORS.—Except with respect to the admin3 istrative duties of the pooled plan provider de4 scribed in subparagraph (A)(i), each employer 

5 in a plan which has a pooled plan provider shall 

6 be treated as the plan sponsor with respect to 

7 the portion of the plan attributable to employ8 ees of such employer (or beneficiaries of such 

9 employees). 

10 ‘‘(4) GUIDANCE.— 

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

12 issue such guidance as the Secretary determines 

13 appropriate to carry out this subsection, includ14 ing guidance— 

15 ‘‘(i) to identify the administrative du16 ties and other actions required to be per17 formed by a pooled plan provider under 

18 this subsection, 

19 ‘‘(ii) which describes the procedures to 

20 be taken to terminate a plan which fails to 

21 meet the requirements to be a plan de22 scribed in paragraph (1), including the 

23 proper treatment of, and actions needed to 

24 be taken by, any employer in the plan and 

25 the assets and liabilities of the plan attrib-
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1 utable to employees of such employer (or 

2 beneficiaries of such employees), and 

3 ‘‘(iii) identifying appropriate cases to 

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

5 apply to employers in the plan failing to 

6 take the actions described in paragraph 

7 (1). 

8 The Secretary shall take into account under 

9 clause (iii) whether the failure of an employer 

10 or pooled plan provider to provide any disclo11 sures or other information, or to take any other 

12 action, necessary to administer a plan or to 

13 allow a plan to meet requirements applicable to 

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

15 is applicable, has continued over a period of 

16 time that demonstrates a lack of commitment 

17 to compliance. 

18 ‘‘(B) GOOD FAITH COMPLIANCE WITH LAW

19 BEFORE GUIDANCE.—An employer or pooled 

20 plan provider shall not be treated as failing to 

21 meet a requirement of guidance issued by the 

22 Secretary under this paragraph if, before the 

23 issuance of such guidance, the employer or 

24 pooled plan provider complies in good faith with 
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1 a reasonable interpretation of the provisions of 

2 this subsection to which such guidance relates. 

3 ‘‘(5) MODEL PLAN.—The Secretary shall pub4 lish model plan language which meets the require5 ments of this subsection and of paragraphs (43) and 

6 (44) of section 3 of the Employee Retirement In7 come Security Act of 1974 and which may be adopt8 ed in order for a plan to be treated as a plan de9 scribed in paragraph (1)(B).’’. 

10 (2) CONFORMING AMENDMENT.—Section 

11 413(c)(2) of such Code is amended by striking ‘‘sec12 tion 401(a)’’ and inserting ‘‘sections 401(a) and 

13 408(c)’’. 

14 (3) TECHNICAL AMENDMENT.—Section 408(c) 

15 of such Code is amended by inserting after para16 graph (2) the following new paragraph: 

17 ‘‘(3) There is a separate accounting for any in18 terest of an employee or member (or spouse of an 

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

20 (b) NO COMMON INTEREST REQUIRED FOR POOLED

21 EMPLOYER PLANS.—Section 3(2) of the Employee Retire22 ment Income Security Act of 1974 (29 U.S.C. 1002(2)) 

23 is amended by adding at the end the following: 

24 ‘‘(C) A pooled employer plan shall be treat25 ed as— 
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1 ‘‘(i) a single employee pension benefit 

2 plan or single pension plan; and 

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

4 applies.’’. 

5 (c) POOLED EMPLOYER PLAN AND PROVIDER DE6 FINED.— 

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

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

9 1002) is amended by adding at the end the fol10 lowing: 

11 ‘‘(43) POOLED EMPLOYER PLAN.— 

12 ‘‘(A) IN GENERAL.—The term ‘pooled em13 ployer plan’ means a plan— 

14 ‘‘(i) which is an individual account 

15 plan established or maintained for the pur16 pose of providing benefits to the employees 

17 of 2 or more employers; 

18 ‘‘(ii) which is a plan described in sec19 tion 401(a) of the Internal Revenue Code 

20 of 1986 which includes a trust exempt 

21 from tax under section 501(a) of such 

22 Code or a plan that consists of individual 

23 retirement accounts described in section 

24 408 of such Code (including by reason of 

25 subsection (c) thereof); and 
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1 ‘‘(iii) the terms of which meet the re2 quirements of subparagraph (B). 

3 Such term shall not include a plan maintained 

4 by employers which have a common interest 

5 other than having adopted the plan. 

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

7 The requirements of this subparagraph are met 

8 with respect to any plan if the terms of the 

9 plan— 

10 ‘‘(i) designate a pooled plan provider 

11 and provide that the pooled plan provider 

12 is a named fiduciary of the plan; 

13 ‘‘(ii) designate one or more trustees 

14 meeting the requirements of section 

15 408(a)(2) of the Internal Revenue Code of 

16 1986 (other than an employer in the plan) 

17 to be responsible for collecting contribu18 tions to, and holding the assets of, the 

19 plan and require such trustees to imple20 ment written contribution collection proce21 dures that are reasonable, diligent, and 

22 systematic; 

23 ‘‘(iii) provide that each employer in 

24 the plan retains fiduciary responsibility 

25 for— 
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1 ‘‘(I) the selection and monitoring 

2 in accordance with section 404(a) of 

3 the person designated as the pooled 

4 plan provider and any other person 

5 who, in addition to the pooled plan 

6 provider, is designated as a named fi7 duciary of the plan; and 

8 ‘‘(II) to the extent not otherwise 

9 delegated to another fiduciary by the 

10 pooled plan provider and subject to 

11 the provisions of section 404(c), the 

12 investment and management of the 

13 portion of the plan’s assets attrib14 utable to the employees of the em15 ployer (or beneficiaries of such em16 ployees); 

17 ‘‘(iv) provide that employers in the 

18 plan, and participants and beneficiaries, 

19 are not subject to unreasonable restric20 tions, fees, or penalties with regard to 

21 ceasing participation, receipt of distribu22 tions, or otherwise transferring assets of 

23 the plan in accordance with section 208 or 

24 paragraph (44)(C)(i)(II); 

25 ‘‘(v) require— 
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1 ‘‘(I) the pooled plan provider to 

2 provide to employers in the plan any 

3 disclosures or other information which 

4 the Secretary may require, including 

5 any disclosures or other information 

6 to facilitate the selection or any moni7 toring of the pooled plan provider by 

8 employers in the plan; and 

9 ‘‘(II) each employer in the plan 

10 to take such actions as the Secretary 

11 or the pooled plan provider determines 

12 are necessary to administer the plan 

13 or for the plan to meet any require14 ment applicable under this Act or the 

15 Internal Revenue Code of 1986 to a 

16 plan described in section 401(a) of 

17 such Code or to a plan that consists 

18 of individual retirement accounts de19 scribed in section 408 of such Code 

20 (including by reason of subsection (c) 

21 thereof), whichever is applicable, in22 cluding providing any disclosures or 

23 other information which the Secretary 

24 may require or which the pooled plan 

25 provider otherwise determines are nec-
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1 essary to administer the plan or to 

2 allow the plan to meet such require3 ments; and 

4 ‘‘(vi) provide that any disclosure or 

5 other information required to be provided 

6 under clause (v) may be provided in elec7 tronic form and will be designed to ensure 

8 only reasonable costs are imposed on 

9 pooled plan providers and employers in the 

10 plan. 

11 ‘‘(C) EXCEPTIONS.—The term ‘pooled em12 ployer plan’ does not include— 

13 ‘‘(i) a multiemployer plan; or 

14 ‘‘(ii) a plan established before the 

15 date of the enactment of the Setting Every 

16 Community Up for Retirement Enhance17 ment Act of 2019 unless the plan adminis18 trator elects that the plan will be treated 

19 as a pooled employer plan and the plan 

20 meets the requirements of this title appli21 cable to a pooled employer plan established 

22 on or after such date. 

23 ‘‘(D) TREATMENT OF EMPLOYERS AS PLAN

24 SPONSORS.—Except with respect to the admin25 istrative duties of the pooled plan provider de-
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1 scribed in paragraph (44)(A)(i), each employer 

2 in a pooled employer plan shall be treated as 

3 the plan sponsor with respect to the portion of 

4 the plan attributable to employees of such em5 ployer (or beneficiaries of such employees). 

6 ‘‘(44) POOLED PLAN PROVIDER.— 

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

8 provider’ means a person who— 

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

10 pooled employer plan as a named fiduciary, 

11 as the plan administrator, and as the per12 son responsible for the performance of all 

13 administrative duties (including conducting 

14 proper testing with respect to the plan and 

15 the employees of each employer in the 

16 plan) which are reasonably necessary to 

17 ensure that— 

18 ‘‘(I) the plan meets any require19 ment applicable under this Act or the 

20 Internal Revenue Code of 1986 to a 

21 plan described in section 401(a) of 

22 such Code or to a plan that consists 

23 of individual retirement accounts de24 scribed in section 408 of such Code 
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1 (including by reason of subsection (c) 

2 thereof), whichever is applicable; and 

3 ‘‘(II) each employer in the plan 

4 takes such actions as the Secretary or 

5 pooled plan provider determines are 

6 necessary for the plan to meet the re7 quirements described in subclause (I), 

8 including providing the disclosures 

9 and information described in para10 graph (43)(B)(v)(II); 

11 ‘‘(ii) registers as a pooled plan pro12 vider with the Secretary, and provides to 

13 the Secretary such other information as 

14 the Secretary may require, before begin15 ning operations as a pooled plan provider; 

16 ‘‘(iii) acknowledges in writing that 

17 such person is a named fiduciary, and the 

18 plan administrator, with respect to the 

19 pooled employer plan; and 

20 ‘‘(iv) is responsible for ensuring that 

21 all persons who handle assets of, or who 

22 are fiduciaries of, the pooled employer plan 

23 are bonded in accordance with section 412. 

24 ‘‘(B) AUDITS, EXAMINATIONS AND INVES25 TIGATIONS.—The Secretary may perform au-
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1 dits, examinations, and investigations of pooled 

2 plan providers as may be necessary to enforce 

3 and carry out the purposes of this paragraph 

4 and paragraph (43). 

5 ‘‘(C) GUIDANCE.—The Secretary shall 

6 issue such guidance as the Secretary determines 

7 appropriate to carry out this paragraph and 

8 paragraph (43), including guidance— 

9 ‘‘(i) to identify the administrative du10 ties and other actions required to be per11 formed by a pooled plan provider under ei12 ther such paragraph; and 

13 ‘‘(ii) which requires in appropriate 

14 cases that if an employer in the plan fails 

15 to take the actions required under sub16 paragraph (A)(i)(II)— 

17 ‘‘(I) the assets of the plan attrib18 utable to employees of such employer 

19 (or beneficiaries of such employees) 

20 are transferred to a plan maintained 

21 only by such employer (or its suc22 cessor), to an eligible retirement plan 

23 as defined in section 402(c)(8)(B) of 

24 the Internal Revenue Code of 1986 

25 for each individual whose account is 
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1 transferred, or to any other arrange2 ment that the Secretary determines is 

3 appropriate in such guidance; and 

4 ‘‘(II) such employer (and not the 

5 plan with respect to which the failure 

6 occurred or any other employer in 

7 such plan) shall, except to the extent 

8 provided in such guidance, be liable 

9 for any liabilities with respect to such 

10 plan attributable to employees of such 

11 employer (or beneficiaries of such em12 ployees). 

13 The Secretary shall take into account 

14 under clause (ii) whether the failure of an 

15 employer or pooled plan provider to provide 

16 any disclosures or other information, or to 

17 take any other action, necessary to admin18 ister a plan or to allow a plan to meet re19 quirements described in subparagraph 

20 (A)(i)(II) has continued over a period of 

21 time that demonstrates a lack of commit22 ment to compliance. The Secretary may 

23 waive the requirements of subclause (ii)(I) 

24 in appropriate circumstances if the Sec25 retary determines it is in the best interests 
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1 of the employees of the employer referred 

2 to in such clause (and the beneficiaries of 

3 such employees) to retain the assets in the 

4 plan with respect to which the employer’s 

5 failure occurred. 

6 ‘‘(D) GOOD FAITH COMPLIANCE WITH LAW

7 BEFORE GUIDANCE.—An employer or pooled 

8 plan provider shall not be treated as failing to 

9 meet a requirement of guidance issued by the 

10 Secretary under subparagraph (C) if, before the 

11 issuance of such guidance, the employer or 

12 pooled plan provider complies in good faith with 

13 a reasonable interpretation of the provisions of 

14 this paragraph, or paragraph (43), to which 

15 such guidance relates. 

16 ‘‘(E) AGGREGATION RULES.—For purposes 

17 of this paragraph, in determining whether a 

18 person meets the requirements of this para19 graph to be a pooled plan provider with respect 

20 to any plan, all persons who perform services 

21 for the plan and who are treated as a single 

22 employer under subsection (b), (c), (m), or (o) 

23 of section 414 of the Internal Revenue Code of 

24 1986 shall be treated as one person.’’. 
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1 (2) BONDING REQUIREMENTS FOR POOLED EM2 PLOYER PLANS.—The last sentence of section 412(a) 

3 of the Employee Retirement Income Security Act of 

4 1974 (29 U.S.C. 1112(a)) is amended by inserting 

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

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

7 (3) CONFORMING AND TECHNICAL AMEND8 MENTS.—Section 3 of the Employee Retirement In9 come Security Act of 1974 (29 U.S.C. 1002) is 

10 amended— 

11 (A) in paragraph (16)(B)— 

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

13 clause (ii); and 

14 (ii) by striking the period at the end 

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

16 pooled employer plan, the pooled plan pro17 vider.’’; and 

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

19 (d) POOLED EMPLOYER AND MULTIPLE EMPLOYER

20 PLAN REPORTING.— 

21 (1) ADDITIONAL INFORMATION.—Section 103 

22 of the Employee Retirement Income Security Act of 

23 1974 (29 U.S.C. 1023) is amended— 

24 (A) in subsection (a)(1)(B), by striking 

25 ‘‘applicable subsections (d), (e), and (f)’’ and 
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1 inserting ‘‘applicable subsections (d), (e), (f), 

2 and (g)’’; and 

3 (B) by amending subsection (g) to read as 

4 follows: 

5 ‘‘(g) ADDITIONAL INFORMATION WITH RESPECT TO

6 POOLED EMPLOYER AND MULTIPLE EMPLOYER

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

8 year shall include— 

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

10 210(a) applies (including a pooled employer plan), a 

11 list of employers in the plan and a good faith esti12 mate of the percentage of total contributions made 

13 by such employers during the plan year and the ag14 gregate account balances attributable to each em15 ployer in the plan (determined as the sum of the ac16 count balances of the employees of such employer 

17 (and the beneficiaries of such employees)); and 

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

19 identifying information for the person designated 

20 under the terms of the plan as the pooled plan pro21 vider.’’. 

22 (2) SIMPLIFIED ANNUAL REPORTS.—Section 

23 104(a) of the Employee Retirement Income Security 

24 Act of 1974 (29 U.S.C. 1024(a)) is amended by 
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1 striking paragraph (2)(A) and inserting the fol2 lowing: 

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

4 be filed with the Secretary under this part, the Secretary 

5 may by regulation prescribe simplified annual reports for 

6 any pension plan that— 

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

8 ‘‘(ii) is a plan described in section 210(a) that 

9 covers fewer than 1,000 participants, but only if no 

10 single employer in the plan has 100 or more partici11 pants covered by the plan.’’. 

12 (e) EFFECTIVE DATE.— 

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

14 this section shall apply to plan years beginning after 

15 December 31, 2020. 

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

17 amendments made by subsection (a) shall be con18 strued as limiting the authority of the Secretary of 

19 the Treasury or the Secretary’s delegate (determined 

20 without regard to such amendment) to provide for 

21 the proper treatment of a failure to meet any re22 quirement applicable under the Internal Revenue 

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

24 employees) in a multiple employer plan. 
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1 SEC. 102. INCREASE IN 10 PERCENT CAP FOR AUTOMATIC 

2 ENROLLMENT SAFE HARBOR AFTER 1ST 

3 PLAN YEAR. 

4 (a) IN GENERAL.—Section 401(k)(13)(C)(iii) of the 

5 Internal Revenue Code of 1986 is amended by striking 

6 ‘‘does not exceed 10 percent’’ and inserting ‘‘does not ex7 ceed 15 percent (10 percent during the period described 

8 in subclause (I))’’. 

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

10 this section shall apply to plan years beginning after De11 cember 31, 2019. 

12 SEC. 103. RULES RELATING TO ELECTION OF SAFE HARBOR 

13 401(k) STATUS. 

14 (a) LIMITATION OF ANNUAL SAFE HARBOR NOTICE

15 TO MATCHING CONTRIBUTION PLANS.— 

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

17 401(k)(12) of the Internal Revenue Code of 1986 is 

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

19 that follows and inserting ‘‘if such arrangement— 

20 ‘‘(i) meets the contribution require21 ments of subparagraph (B) and the notice 

22 requirements of subparagraph (D), or 

23 ‘‘(ii) meets the contribution require24 ments of subparagraph (C).’’. 

25 (2) AUTOMATIC CONTRIBUTION ARRANGE26 MENTS.—Subparagraph (B) of section 401(k)(13) of 
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1 such Code is amended by striking ‘‘means’’ and all 

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

3 arrangement— 

4 ‘‘(i) which is described in subpara5 graph (D)(i)(I) and meets the applicable 

6 requirements of subparagraphs (C) 

7 through (E), or 

8 ‘‘(ii) which is described in subpara9 graph (D)(i)(II) and meets the applicable 

10 requirements of subparagraphs (C) and 

11 (D).’’. 

12 (b) NONELECTIVE CONTRIBUTIONS.—Section 

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

14 amended by redesignating subparagraph (F) as subpara15 graph (G), and by inserting after subparagraph (E) the 

16 following new subparagraph: 

17 ‘‘(F) TIMING OF PLAN AMENDMENT FOR

18 EMPLOYER MAKING NONELECTIVE CONTRIBU19 TIONS.— 

20 ‘‘(i) IN GENERAL.—Except as pro21 vided in clause (ii), a plan may be amend22 ed after the beginning of a plan year to 

23 provide that the requirements of subpara24 graph (C) shall apply to the arrangement 
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1 for the plan year, but only if the amend2 ment is adopted— 

3 ‘‘(I) at any time before the 30th 

4 day before the close of the plan year, 

5 or 

6 ‘‘(II) at any time before the last 

7 day under paragraph (8)(A) for dis8 tributing excess contributions for the 

9 plan year. 

10 ‘‘(ii) EXCEPTION WHERE PLAN PRO11 VIDED FOR MATCHING CONTRIBUTIONS.— 

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

13 if the plan provided at any time during the 

14 plan year that the requirements of sub15 paragraph (B) or paragraph (13)(D)(i)(I) 

16 applied to the plan year. 

17 ‘‘(iii) 4-PERCENT CONTRIBUTION RE18 QUIREMENT.—Clause (i)(II) shall not 

19 apply to an arrangement unless the 

20 amount of the contributions described in 

21 subparagraph (C) which the employer is 

22 required to make under the arrangement 

23 for the plan year with respect to any em24 ployee is an amount equal to at least 4 

25 percent of the employee’s compensation.’’. 
28 

•HR 1994 EH

1 (c) AUTOMATIC CONTRIBUTION ARRANGEMENTS.— 

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

3 is amended by adding at the end the following: 

4 ‘‘(F) TIMING OF PLAN AMENDMENT FOR

5 EMPLOYER MAKING NONELECTIVE CONTRIBU6 TIONS.— 

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

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

13 amendment is adopted— 

14 ‘‘(I) at any time before the 30th 

15 day before the close of the plan year, 

16 or 

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

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

20 plan year. 

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

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

24 if the plan provided at any time during the 

25 plan year that the requirements of sub-
29 

•HR 1994 EH

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

2 applied to the plan year. 

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

5 apply to an arrangement unless the 

6 amount of the contributions described in 

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

10 to any employee is an amount equal to at 

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

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

14 this section shall apply to plan years beginning after De15 cember 31, 2019. 

16 SEC. 104. INCREASE IN CREDIT LIMITATION FOR SMALL 

17 EMPLOYER PENSION PLAN STARTUP COSTS. 

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

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

20 as follows: 

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

22 taxable years immediately following the first credit 

23 year, the greater of— 

24 ‘‘(A) $500, or 

25 ‘‘(B) the lesser of— 
30 

•HR 1994 EH

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

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

5 in the eligible employer plan maintained by 

6 the eligible employer, or 

7 ‘‘(ii) $5,000, and’’. 

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

9 this section shall apply to taxable years beginning after 

10 December 31, 2019. 

11 SEC. 105. SMALL EMPLOYER AUTOMATIC ENROLLMENT 

12 CREDIT. 

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

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

16 section: 

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

18 SAVINGS OPTIONS PROVIDED BY SMALL EM19 PLOYERS. 

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

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

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

25 the credit period, and 
31 

•HR 1994 EH

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

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

3 (a)— 

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

6 period beginning with the first taxable year for 

7 which the employer includes an eligible automatic 

8 contribution arrangement (as defined in section 

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

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

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

12 taxable year with respect to an employer shall be 

13 treated as occurring within the credit period unless 

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

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

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

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

19 (b) CREDIT TO BE PART OF GENERAL BUSINESS

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

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

22 the end of paragraph (31), by striking the period at the 

23 end of paragraph (32) and inserting ‘‘, plus’’, and by add24 ing at the end the following new paragraph: 
32 

•HR 1994 EH

1 ‘‘(33) in the case of an eligible employer (as de2 fined in section 45T(c)), the retirement auto-enroll3 ment credit determined under section 45T(a).’’. 

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

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

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

8 new item: 

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

small employers.’’. 

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

10 this section shall apply to taxable years beginning after 

11 December 31, 2019. 

12 SEC. 106. CERTAIN TAXABLE NON-TUITION FELLOWSHIP 

13 AND STIPEND PAYMENTS TREATED AS COM14 PENSATION FOR IRA PURPOSES. 

15 (a) IN GENERAL.—Paragraph (1) of section 219(f) 

16 of the Internal Revenue Code of 1986 is amended by add17 ing at the end the following: ‘‘The term ‘compensation’ 

18 shall include any amount which is included in the individ19 ual’s gross income and paid to the individual to aid the 

20 individual in the pursuit of graduate or postdoctoral 

21 study.’’. 

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

23 this section shall apply to taxable years beginning after 

24 December 31, 2019. 
33 

•HR 1994 EH

1 SEC. 107. REPEAL OF MAXIMUM AGE FOR TRADITIONAL IRA 

2 CONTRIBUTIONS. 

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

4 of the Internal Revenue Code of 1986 is repealed. 

5 (b) COORDINATION WITH QUALIFIED CHARITABLE

6 DISTRIBUTIONS.—Add at the end of section 408(d)(8)(A) 

7 of such Code the following: ‘‘The amount of distributions 

8 not includible in gross income by reason of the preceding 

9 sentence for a taxable year (determined without regard to 

10 this sentence) shall be reduced (but not below zero) by 

11 an amount equal to the excess of— 

12 ‘‘(i) the aggregate amount of deduc13 tions allowed to the taxpayer under section 

14 219 for all taxable years ending on or after 

the date the taxpayer attains age 701 15 ⁄2, 

16 over 

17 ‘‘(ii) the aggregate amount of reduc18 tions under this sentence for all taxable 

19 years preceding the current taxable year.’’. 

20 (c) CONFORMING AMENDMENT.—Subsection (c) of 

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

22 amended by striking paragraph (4) and by redesignating 

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

24 (6), respectively. 

25 (d) EFFECTIVE DATE.— 
34 

•HR 1994 EH

1 (1) IN GENERAL.—Except as provided in para2 graph (2), the amendments made by this section 

3 shall apply to contributions made for taxable years 

4 beginning after December 31, 2019. 

5 (2) SUBSECTION (b).—The amendment made 

6 by subsection (b) shall apply to distributions made 

7 for taxable years beginning after December 31, 

8 2019. 

9 SEC. 108. QUALIFIED EMPLOYER PLANS PROHIBITED FROM 

10 MAKING LOANS THROUGH CREDIT CARDS 

11 AND OTHER SIMILAR ARRANGEMENTS. 

12 (a) IN GENERAL.—Paragraph (2) of section 72(p) of 

13 the Internal Revenue Code of 1986 is amended by redesig14 nating subparagraph (D) as subparagraph (E) and by in15 serting after subparagraph (C) the following new subpara16 graph: 

17 ‘‘(D) PROHIBITION OF LOANS THROUGH

18 CREDIT CARDS AND OTHER SIMILAR ARRANGE19 MENTS.—Subparagraph (A) shall not apply to 

20 any loan which is made through the use of any 

21 credit card or any other similar arrangement.’’. 

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

23 subsection (a) shall apply to loans made after the date 

24 of the enactment of this Act. 
35 

•HR 1994 EH

1 SEC. 109. PORTABILITY OF LIFETIME INCOME OPTIONS. 

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

3 the Internal Revenue Code of 1986 is amended by insert4 ing after paragraph (37) the following new paragraph: 

5 ‘‘(38) PORTABILITY OF LIFETIME INCOME.— 

6 ‘‘(A) IN GENERAL.—Except as may be oth7 erwise provided by regulations, a trust forming 

8 part of a defined contribution plan shall not be 

9 treated as failing to constitute a qualified trust 

10 under this section solely by reason of allowing— 

11 ‘‘(i) qualified distributions of a life12 time income investment, or 

13 ‘‘(ii) distributions of a lifetime income 

14 investment in the form of a qualified plan 

15 distribution annuity contract, 

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

17 date on which such lifetime income investment 

18 is no longer authorized to be held as an invest19 ment option under the plan. 

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

21 subsection— 

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

23 means a direct trustee-to-trustee transfer 

24 described in paragraph (31)(A) to an eligi25 ble retirement plan (as defined in section 

26 402(c)(8)(B)), 
36 

•HR 1994 EH

1 ‘‘(ii) the term ‘lifetime income invest2 ment’ means an investment option which is 

3 designed to provide an employee with elec4 tion rights— 

5 ‘‘(I) which are not uniformly 

6 available with respect to other invest7 ment options under the plan, and 

8 ‘‘(II) which are to a lifetime in9 come feature available through a con10 tract or other arrangement offered 

11 under the plan (or under another eli12 gible retirement plan (as so defined), 

13 if paid by means of a direct trustee14 to-trustee transfer described in para15 graph (31)(A) to such other eligible 

16 retirement plan), 

17 ‘‘(iii) the term ‘lifetime income fea18 ture’ means— 

19 ‘‘(I) a feature which guarantees a 

20 minimum level of income annually (or 

21 more frequently) for at least the re22 mainder of the life of the employee or 

23 the joint lives of the employee and the 

24 employee’s designated beneficiary, or 
37 

•HR 1994 EH

1 ‘‘(II) an annuity payable on be2 half of the employee under which pay3 ments are made in substantially equal 

4 periodic payments (not less frequently 

5 than annually) over the life of the em6 ployee or the joint lives of the em7 ployee and the employee’s designated 

8 beneficiary, and 

9 ‘‘(iv) the term ‘qualified plan distribu10 tion annuity contract’ means an annuity 

11 contract purchased for a participant and 

12 distributed to the participant by a plan or 

13 contract described in subparagraph (B) of 

14 section 402(c)(8) (without regard to 

15 clauses (i) and (ii) thereof).’’. 

16 (b) CASH OR DEFERRED ARRANGEMENT.— 

17 (1) IN GENERAL.—Clause (i) of section 

18 401(k)(2)(B) of the Internal Revenue Code of 1986 

19 is amended by striking ‘‘or’’ at the end of subclause 

20 (IV), by striking ‘‘and’’ at the end of subclause (V) 

21 and inserting ‘‘or’’, and by adding at the end the fol22 lowing new subclause: 

23 ‘‘(VI) except as may be otherwise 

24 provided by regulations, with respect 

25 to amounts invested in a lifetime in-
38 

•HR 1994 EH

1 come investment (as defined in sub2 section (a)(38)(B)(ii)), the date that 

3 is 90 days prior to the date that such 

4 lifetime income investment may no 

5 longer be held as an investment option 

6 under the arrangement, and’’. 

7 (2) DISTRIBUTION REQUIREMENT.—Subpara8 graph (B) of section 401(k)(2) of such Code, as 

9 amended by paragraph (1), is amended by striking 

10 ‘‘and’’ at the end of clause (i), by striking the semi11 colon at the end of clause (ii) and inserting ‘‘, and’’, 

12 and by adding at the end the following new clause: 

13 ‘‘(iii) except as may be otherwise pro14 vided by regulations, in the case of 

15 amounts described in clause (i)(VI), will be 

16 distributed only in the form of a qualified 

17 distribution (as defined in subsection 

18 (a)(38)(B)(i)) or a qualified plan distribu19 tion annuity contract (as defined in sub20 section (a)(38)(B)(iv)),’’. 

21 (c) SECTION 403(b) PLANS.— 

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

23 section 403(b) of the Internal Revenue Code of 1986 

24 is amended by striking ‘‘or’’ at the end of subpara25 graph (B), by striking the period at the end of sub-
39 

•HR 1994 EH

1 paragraph (C) and inserting ‘‘, or’’, and by inserting 

2 after subparagraph (C) the following new subpara3 graph: 

4 ‘‘(D) except as may be otherwise provided 

5 by regulations, with respect to amounts invested 

6 in a lifetime income investment (as defined in 

7 section 401(a)(38)(B)(ii))— 

8 ‘‘(i) on or after the date that is 90 

9 days prior to the date that such lifetime 

10 income investment may no longer be held 

11 as an investment option under the con12 tract, and 

13 ‘‘(ii) in the form of a qualified dis14 tribution (as defined in section 

15 401(a)(38)(B)(i)) or a qualified plan dis16 tribution annuity contract (as defined in 

17 section 401(a)(38)(B)(iv)).’’. 

18 (2) CUSTODIAL ACCOUNTS.—Subparagraph (A) 

19 of section 403(b)(7) of such Code is amended by 

20 striking ‘‘if—’’ and all that follows and inserting ‘‘if 

21 the amounts are to be invested in regulated invest22 ment company stock to be held in that custodial ac23 count, and under the custodial account— 

24 ‘‘(i) no such amounts may be paid or 

25 made available to any distributee (unless 
40 

•HR 1994 EH

1 such amount is a distribution to which sec2 tion 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) except as may be otherwise 

17 provided by regulations, with respect 

18 to amounts invested in a lifetime in19 come investment (as defined in section 

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

21 days prior to the date that such life22 time income investment may no longer 

23 be held as an investment option under 

24 the contract, and 
41 

•HR 1994 EH

1 ‘‘(ii) in the case of amounts described 

2 in clause (i)(VI), such amounts will be dis3 tributed only in the form of a qualified dis4 tribution (as defined in section 

5 401(a)(38)(B)(i)) or a qualified plan dis6 tribution annuity contract (as defined in 

7 section 401(a)(38)(B)(iv)).’’. 

8 (d) ELIGIBLE DEFERRED COMPENSATION PLANS.— 

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

10 457(d)(1) of the Internal Revenue Code of 1986 is 

11 amended by striking ‘‘or’’ at the end of clause (ii), 

12 by inserting ‘‘or’’ at the end of clause (iii), and by 

13 adding after clause (iii) the following: 

14 ‘‘(iv) except as may be otherwise pro15 vided by regulations, in the case of a plan 

16 maintained by an employer described in 

17 subsection (e)(1)(A), with respect to 

18 amounts invested in a lifetime income in19 vestment (as defined in section 

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

21 days prior to the date that such lifetime 

22 income investment may no longer be held 

23 as an investment option under the plan,’’. 

24 (2) DISTRIBUTION REQUIREMENT.—Paragraph 

25 (1) of section 457(d) of such Code is amended by 
42 

•HR 1994 EH

1 striking ‘‘and’’ at the end of subparagraph (B), by 

2 striking the period at the end of subparagraph (C) 

3 and inserting ‘‘, and’’, and by inserting after sub4 paragraph (C) the following new subparagraph: 

5 ‘‘(D) except as may be otherwise provided 

6 by regulations, in the case of amounts described 

7 in subparagraph (A)(iv), such amounts will be 

8 distributed only in the form of a qualified dis9 tribution (as defined in section 

10 401(a)(38)(B)(i)) or a qualified plan distribu11 tion annuity contract (as defined in section 

12 401(a)(38)(B)(iv)).’’. 

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

14 this section shall apply to plan years beginning after De15 cember 31, 2019. 

16 SEC. 110. TREATMENT OF CUSTODIAL ACCOUNTS ON TER17 MINATION OF SECTION 403(b) PLANS. 

18 Not later than six months after the date of enactment 

19 of this Act, the Secretary of the Treasury shall issue guid20 ance to provide that, if an employer terminates the plan 

21 under which amounts are contributed to a custodial ac22 count under subparagraph (A) of section 403(b)(7), the 

23 plan administrator or custodian may distribute an indi24 vidual custodial account in kind to a participant or bene25 ficiary of the plan and the distributed custodial account 
43 

•HR 1994 EH

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 SEC. 111. CLARIFICATION OF RETIREMENT INCOME AC19 COUNT RULES RELATING TO CHURCH-CON20 TROLLED ORGANIZATIONS. 

21 (a) IN GENERAL.—Subparagraph (B) of section 

22 403(b)(9) of the Internal Revenue Code of 1986 is amend23 ed by inserting ‘‘(including an employee described in sec24 tion 414(e)(3)(B))’’ after ‘‘employee described in para25 graph (1)’’. 
44 

•HR 1994 EH

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

2 this section shall apply to years beginning before, on, or 

3 after the date of the enactment of this Act. 

4 SEC. 112. QUALIFIED CASH OR DEFERRED ARRANGEMENTS 

5 MUST ALLOW LONG-TERM EMPLOYEES 

6 WORKING MORE THAN 500 BUT LESS THAN 

7 1,000 HOURS PER YEAR TO PARTICIPATE. 

8 (a) PARTICIPATION REQUIREMENT.— 

9 (1) IN GENERAL.—Section 401(k)(2)(D) of the 

10 Internal Revenue Code of 1986 is amended to read 

11 as follows: 

12 ‘‘(D) which does not require, as a condi13 tion of participation in the arrangement, that 

14 an employee complete a period of service with 

15 the employer (or employers) maintaining the 

16 plan extending beyond the close of the earlier 

17 of— 

18 ‘‘(i) the period permitted under sec19 tion 410(a)(1) (determined without regard 

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

21 ‘‘(ii) subject to the provisions of para22 graph (15), the first period of 3 consecu23 tive 12-month periods during each of which 

24 the employee has at least 500 hours of 

25 service.’’. 
45 

•HR 1994 EH

1 (2) SPECIAL RULES.—Section 401(k) of such 

2 Code is amended by adding at the end the following 

3 new paragraph: 

4 ‘‘(15) SPECIAL RULES FOR PARTICIPATION RE5 QUIREMENT FOR LONG-TERM, PART-TIME WORK6 ERS.—For purposes of paragraph (2)(D)(ii)— 

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

8 Paragraph (2)(D)(ii) shall not apply to an em9 ployee unless the employee has met the require10 ment of section 410(a)(1)(A)(i) by the close of 

11 the last of the 12-month periods described in 

12 such paragraph. 

13 ‘‘(B) NONDISCRIMINATION AND TOP14 HEAVY RULES NOT TO APPLY.— 

15 ‘‘(i) NONDISCRIMINATION RULES.—In 

16 the case of employees who are eligible to 

17 participate in the arrangement solely by 

18 reason of paragraph (2)(D)(ii)— 

19 ‘‘(I) notwithstanding subsection 

20 (a)(4), an employer shall not be re21 quired to make nonelective or match22 ing contributions on behalf of such 

23 employees even if such contributions 

24 are made on behalf of other employees 
46 

•HR 1994 EH

1 eligible to participate in the arrange2 ment, and 

3 ‘‘(II) an employer may elect to 

4 exclude such employees from the ap5 plication of subsection (a)(4), para6 graphs (3), (12), and (13), subsection 

7 (m)(2), and section 410(b). 

8 ‘‘(ii) TOP-HEAVY RULES.—An em9 ployer may elect to exclude all employees 

10 who are eligible to participate in a plan 

11 maintained by the employer solely by rea12 son of paragraph (2)(D)(ii) from the appli13 cation of the vesting and benefit require14 ments under subsections (b) and (c) of sec15 tion 416. 

16 ‘‘(iii) VESTING.—For purposes of de17 termining whether an employee described 

18 in clause (i) has a nonforfeitable right to 

19 employer contributions (other than con20 tributions described in paragraph 

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

22 12-month period for which the employee 

23 has at least 500 hours of service shall be 

24 treated as a year of service, and section 

25 411(a)(6) shall be applied by substituting 
47 

•HR 1994 EH

1 ‘at least 500 hours of service’ for ‘more 

2 than 500 hours of service’ in subparagraph 

3 (A) thereof. 

4 ‘‘(iv) EMPLOYEES WHO BECOME

5 FULL-TIME EMPLOYEES.—This subpara6 graph (other than clause (iii)) shall cease 

7 to apply to any employee as of the first 

8 plan year beginning after the plan year in 

9 which the employee meets the requirements 

10 of section 410(a)(1)(A)(ii) without regard 

11 to paragraph (2)(D)(ii). 

12 ‘‘(C) EXCEPTION FOR EMPLOYEES UNDER

13 COLLECTIVELY BARGAINED PLANS, ETC.—Para14 graph (2)(D)(ii) shall not apply to employees 

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

16 ‘‘(D) SPECIAL RULES.— 

17 ‘‘(i) TIME OF PARTICIPATION.—The 

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

19 employee eligible to participate in an ar20 rangement solely by reason of paragraph 

21 (2)(D)(ii). 

22 ‘‘(ii) 12-MONTH PERIODS.—12-month 

23 periods shall be determined in the same 

24 manner as under the last sentence of sec25 tion 410(a)(3)(A).’’. 
48 

•HR 1994 EH

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

2 this section shall apply to plan years beginning after De3 cember 31, 2020, except that, for purposes of section 

4 401(k)(2)(D)(ii) of the Internal Revenue Code of 1986 (as 

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

6 before January 1, 2021, shall not be taken into account. 

7 SEC. 113. PENALTY-FREE WITHDRAWALS FROM RETIRE8 MENT PLANS FOR INDIVIDUALS IN CASE OF 

9 BIRTH OF CHILD OR ADOPTION. 

10 (a) IN GENERAL.—Section 72(t)(2) of the Internal 

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

12 the following new subparagraph: 

13 ‘‘(H) DISTRIBUTIONS FROM RETIREMENT

14 PLANS IN CASE OF BIRTH OF CHILD OR ADOP15 TION.— 

16 ‘‘(i) IN GENERAL.—Any qualified 

17 birth or adoption distribution. 

18 ‘‘(ii) LIMITATION.—The aggregate 

19 amount which may be treated as qualified 

20 birth or adoption distributions by any indi21 vidual with respect to any birth or adop22 tion shall not exceed $5,000. 

23 ‘‘(iii) QUALIFIED BIRTH OR ADOPTION

24 DISTRIBUTION.—For purposes of this sub25 paragraph— 
49 

•HR 1994 EH

1 ‘‘(I) IN GENERAL.—The term 

2 ‘qualified birth or adoption distribu3 tion’ means any distribution from an 

4 applicable eligible retirement plan to 

5 an individual if made during the 1- 

6 year period beginning on the date on 

7 which a child of the individual is born 

8 or on which the legal adoption by the 

9 individual of an eligible adoptee is fi10 nalized. 

11 ‘‘(II) ELIGIBLE ADOPTEE.—The 

12 term ‘eligible adoptee’ means any indi13 vidual (other than a child of the tax14 payer’s spouse) who has not attained 

15 age 18 or is physically or mentally in16 capable of self-support. 

17 ‘‘(iv) TREATMENT OF PLAN DISTRIBU18 TIONS.— 

19 ‘‘(I) IN GENERAL.—If a distribu20 tion to an individual would (without 

21 regard to clause (ii)) be a qualified 

22 birth or adoption distribution, a plan 

23 shall not be treated as failing to meet 

24 any requirement of this title merely 

25 because the plan treats the distribu-
50 

•HR 1994 EH

1 tion as a qualified birth or adoption 

2 distribution, unless the aggregate 

3 amount of such distributions from all 

4 plans maintained by the employer 

5 (and any member of any controlled 

6 group which includes the employer) to 

7 such individual exceeds $5,000. 

8 ‘‘(II) CONTROLLED GROUP.—For 

9 purposes of subclause (I), the term 

10 ‘controlled group’ means any group 

11 treated as a single employer under 

12 subsection (b), (c), (m), or (o) of sec13 tion 414. 

14 ‘‘(v) AMOUNT DISTRIBUTED MAY BE

15 REPAID.— 

16 ‘‘(I) IN GENERAL.—Any indi17 vidual who receives a qualified birth 

18 or adoption distribution may make 

19 one or more contributions in an ag20 gregate amount not to exceed the 

21 amount of such distribution to an ap22 plicable eligible retirement plan of 

23 which such individual is a beneficiary 

24 and to which a rollover contribution of 

25 such distribution could be made under 
51 

•HR 1994 EH

1 section 402(c), 403(a)(4), 403(b)(8), 

2 408(d)(3), or 457(e)(16), as the case 

3 may be. 

4 ‘‘(II) LIMITATION ON CONTRIBU5 TIONS TO APPLICABLE ELIGIBLE RE6 TIREMENT PLANS OTHER THAN

7 IRAS.—The aggregate amount of con8 tributions made by an individual 

9 under subclause (I) to any applicable 

10 eligible retirement plan which is not 

11 an individual retirement plan shall not 

12 exceed the aggregate amount of quali13 fied birth or adoption distributions 

14 which are made from such plan to 

15 such individual. Subclause (I) shall 

16 not apply to contributions to any ap17 plicable eligible retirement plan which 

18 is not an individual retirement plan 

19 unless the individual is eligible to 

20 make contributions (other than those 

21 described in subclause (I)) to such ap22 plicable eligible retirement plan. 

23 ‘‘(III) TREATMENT OF REPAY24 MENTS OF DISTRIBUTIONS FROM AP25 PLICABLE ELIGIBLE RETIREMENT
52 

•HR 1994 EH

1 PLANS OTHER THAN IRAs.—If a con2 tribution is made under subclause (I) 

3 with respect to a qualified birth or 

4 adoption distribution from an applica5 ble eligible retirement plan other than 

6 an individual retirement plan, then 

7 the taxpayer shall, to the extent of the 

8 amount of the contribution, be treated 

9 as having received such distribution in 

10 an eligible rollover distribution (as de11 fined in section 402(c)(4)) and as 

12 having transferred the amount to the 

13 applicable eligible retirement plan in a 

14 direct trustee to trustee transfer with15 in 60 days of the distribution. 

16 ‘‘(IV) TREATMENT OF REPAY17 MENTS FOR DISTRIBUTIONS FROM

18 IRAS.—If a contribution is made 

19 under subclause (I) with respect to a 

20 qualified birth or adoption distribution 

21 from an individual retirement plan, 

22 then, to the extent of the amount of 

23 the contribution, such distribution 

24 shall be treated as a distribution de25 scribed in section 408(d)(3) and as 
53 

•HR 1994 EH

1 having been transferred to the appli2 cable eligible retirement plan in a di3 rect trustee to trustee transfer within 

4 60 days of the distribution. 

5 ‘‘(vi) DEFINITION AND SPECIAL

6 RULES.—For purposes of this subpara7 graph— 

8 ‘‘(I) APPLICABLE ELIGIBLE RE9 TIREMENT PLAN.—The term ‘applica10 ble eligible retirement plan’ means an 

11 eligible retirement plan (as defined in 

12 section 402(c)(8)(B)) other than a de13 fined benefit plan. 

14 ‘‘(II) EXEMPTION OF DISTRIBU15 TIONS FROM TRUSTEE TO TRUSTEE

16 TRANSFER AND WITHHOLDING

17 RULES.—For purposes of sections 

18 401(a)(31), 402(f), and 3405, a quali19 fied birth or adoption distribution 

20 shall not be treated as an eligible roll21 over distribution. 

22 ‘‘(III) TAXPAYER MUST INCLUDE

23 TIN.—A distribution shall not be 

24 treated as a qualified birth or adop25 tion distribution with respect to any 
54 

•HR 1994 EH

1 child or eligible adoptee unless the 

2 taxpayer includes the name, age, and 

3 TIN of such child or eligible adoptee 

4 on the taxpayer’s return of tax for the 

5 taxable year. 

6 ‘‘(IV) DISTRIBUTIONS TREATED

7 AS MEETING PLAN DISTRIBUTION RE8 QUIREMENTS.—Any qualified birth or 

9 adoption distribution shall be treated 

10 as meeting the requirements of sec11 tions 401(k)(2)(B)(i), 

12 403(b)(7)(A)(ii), 403(b)(11), and 

13 457(d)(1)(A).’’. 

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

15 this section shall apply to distributions made after Decem16 ber 31, 2019. 

17 SEC. 114. INCREASE IN AGE FOR REQUIRED BEGINNING 

18 DATE FOR MANDATORY DISTRIBUTIONS. 

19 (a) IN GENERAL.—Section 401(a)(9)(C)(i)(I) of the 

20 Internal Revenue Code of 1986 is amended by striking 

‘‘age 701 21 ⁄2’’ and inserting ‘‘age 72’’. 

22 (b) SPOUSE BENEFICIARIES; SPECIAL RULE FOR

23 OWNERS.—Subparagraphs (B)(iv)(I) and (C)(ii)(I) of sec24 tion 401(a)(9) of such Code are each amended by striking 

‘‘age 701 25 ⁄2’’ and inserting ‘‘age 72’’. 
55 

•HR 1994 EH

1 (c) CONFORMING AMENDMENTS.—The last sentence 

2 of section 408(b) of such Code is amended by striking 

‘‘age 701 3 ⁄2’’ and inserting ‘‘age 72’’. 

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

5 this section shall apply to distributions required to be 

6 made after December 31, 2019, with respect to individuals 

who attain age 701 7 ⁄2 after such date. 

8 SEC. 115. SPECIAL RULES FOR MINIMUM FUNDING STAND9 ARDS FOR COMMUNITY NEWSPAPER PLANS. 

10 (a) AMENDMENT TO INTERNAL REVENUE CODE OF

11 1986.—Section 430 of the Internal Revenue Code of 1986 

12 is amended by adding at the end the following new sub13 section: 

14 ‘‘(m) SPECIAL RULES FOR COMMUNITY NEWSPAPER

15 PLANS.— 

16 ‘‘(1) IN GENERAL.—The plan sponsor of a com17 munity newspaper plan under which no participant 

18 has had the participant’s accrued benefit increased 

19 (whether because of service or compensation) after 

20 December 31, 2017, may elect to have the alter21 native standards described in paragraph (3) apply to 

22 such plan, and any plan sponsored by any member 

23 of the same controlled group. 

24 ‘‘(2) ELECTION.—An election under paragraph 

25 (1) shall be made at such time and in such manner 
56 

•HR 1994 EH

1 as prescribed by the Secretary. Such election, once 

2 made with respect to a plan year, shall apply to all 

3 subsequent plan years unless revoked with the con4 sent of the Secretary. 

5 ‘‘(3) ALTERNATIVE MINIMUM FUNDING STAND6 ARDS.—The alternative standards described in this 

7 paragraph are the following: 

8 ‘‘(A) INTEREST RATES.— 

9 ‘‘(i) IN GENERAL.—Notwithstanding 

10 subsection (h)(2)(C) and except as pro11 vided in clause (ii), the first, second, and 

12 third segment rates in effect for any 

13 month for purposes of this section shall be 

14 8 percent. 

15 ‘‘(ii) NEW BENEFIT ACCRUALS.—Not16 withstanding subsection (h)(2), for pur17 poses of determining the funding target 

18 and normal cost of a plan for any plan 

19 year, the present value of any benefits ac20 crued or earned under the plan for a plan 

21 year with respect to which an election 

22 under paragraph (1) is in effect shall be 

23 determined on the basis of the United 

24 States Treasury obligation yield curve for 
57 

•HR 1994 EH

1 the day that is the valuation date of such 

2 plan for such plan year. 

3 ‘‘(iii) UNITED STATES TREASURY OB4 LIGATION YIELD CURVE.—For purposes of 

5 this subsection, the term ‘United States 

6 Treasury obligation yield curve’ means, 

7 with respect to any day, a yield curve 

8 which shall be prescribed by the Secretary 

9 for such day on interest-bearing obligations 

10 of the United States. 

11 ‘‘(B) SHORTFALL AMORTIZATION BASE.— 

12 ‘‘(i) PREVIOUS SHORTFALL AMORTIZA13 TION BASES.—The shortfall amortization 

14 bases determined under subsection (c)(3) 

15 for all plan years preceding the first plan 

16 year to which the election under paragraph 

17 (1) applies (and all shortfall amortization 

18 installments determined with respect to 

19 such bases) shall be reduced to zero under 

20 rules similar to the rules of subsection 

21 (c)(6). 

22 ‘‘(ii) NEW SHORTFALL AMORTIZATION

23 BASE.—Notwithstanding subsection (c)(3), 

24 the shortfall amortization base for the first 

25 plan year to which the election under para-
58 

•HR 1994 EH

1 graph (1) applies shall be the funding 

2 shortfall of such plan for such plan year 

3 (determined using the interest rates as 

4 modified under subparagraph (A)). 

5 ‘‘(C) DETERMINATION OF SHORTFALL AM6 ORTIZATION INSTALLMENTS.— 

7 ‘‘(i) 30-YEAR PERIOD.—Subpara8 graphs (A) and (B) of subsection (c)(2) 

9 shall be applied by substituting ‘30-plan10 year’ for ‘7-plan-year’ each place it ap11 pears. 

12 ‘‘(ii) NO SPECIAL ELECTION.—The 

13 election under subparagraph (D) of sub14 section (c)(2) shall not apply to any plan 

15 year to which the election under paragraph 

16 (1) applies. 

17 ‘‘(D) EXEMPTION FROM AT-RISK TREAT18 MENT.—Subsection (i) shall not apply. 

19 ‘‘(4) COMMUNITY NEWSPAPER PLAN.—For pur20 poses of this subsection— 

21 ‘‘(A) IN GENERAL.—The term ‘community 

22 newspaper plan’ means a plan to which this sec23 tion applies maintained by an employer which, 

24 as of December 31, 2017— 
59 

•HR 1994 EH

1 ‘‘(i) publishes and distributes daily, ei2 ther electronically or in printed form, 1 or 

3 more community newspapers in a single 

4 State, 

5 ‘‘(ii) is not a company the stock of 

6 which is publicly traded (on a stock ex7 change or in an over-the-counter market), 

8 and is not controlled, directly or indirectly, 

9 by such a company, 

10 ‘‘(iii) is controlled, directly or indi11 rectly— 

12 ‘‘(I) by 1 or more persons resid13 ing primarily in the State in which 

14 the community newspaper is pub15 lished, 

16 ‘‘(II) for not less than 30 years 

17 by individuals who are members of the 

18 same family, 

19 ‘‘(III) by a trust created or orga20 nized in the State in which the com21 munity newspaper is published, the 

22 sole trustees of which are persons de23 scribed in subclause (I) or (II), 

24 ‘‘(IV) by an entity which is de25 scribed in section 501(c)(3) and ex-
60 

•HR 1994 EH

1 empt from taxation under section 

2 501(a), which is organized and oper3 ated in the State in which the commu4 nity newspaper is published, and the 

5 primary purpose of which is to benefit 

6 communities in such State, or 

7 ‘‘(V) by a combination of persons 

8 described in subclause (I), (III), or 

9 (IV), and 

10 ‘‘(iv) does not control, directly or indi11 rectly, any newspaper in any other State. 

12 ‘‘(B) COMMUNITY NEWSPAPER.—The term 

13 ‘community newspaper’ means a newspaper 

14 which primarily serves a metropolitan statistical 

15 area, as determined by the Office of Manage16 ment and Budget, with a population of not less 

17 than 100,000. 

18 ‘‘(C) CONTROL.—A person shall be treated 

19 as controlled by another person if such other 

20 person possesses, directly or indirectly, the 

21 power to direct or cause the direction and man22 agement of such person (including the power to 

23 elect a majority of the members of the board of 

24 directors of such person) through the ownership 

25 of voting securities. 
61 

•HR 1994 EH

1 ‘‘(5) CONTROLLED GROUP.—For purposes of 

2 this subsection, the term ‘controlled group’ means all 

3 persons treated as a single employer under sub4 section (b), (c), (m), or (o) of section 414 as of the 

5 date of the enactment of this subsection.’’. 

6 (b) AMENDMENT TO EMPLOYEE RETIREMENT IN7 COME SECURITY ACT OF 1974.—Section 303 of the Em8 ployee Retirement Income Security Act of 1974 (29 

9 U.S.C. 1083) is amended by adding at the end the fol10 lowing new subsection: 

11 ‘‘(m) SPECIAL RULES FOR COMMUNITY NEWSPAPER

12 PLANS.— 

13 ‘‘(1) IN GENERAL.—The plan sponsor of a com14 munity newspaper plan under which no participant 

15 has had the participant’s accrued benefit increased 

16 (whether because of service or compensation) after 

17 December 31, 2017, may elect to have the alter18 native standards described in paragraph (3) apply to 

19 such plan, and any plan sponsored by any member 

20 of the same controlled group. 

21 ‘‘(2) ELECTION.—An election under paragraph 

22 (1) shall be made at such time and in such manner 

23 as prescribed by the Secretary of the Treasury. Such 

24 election, once made with respect to a plan year, shall 
62 

•HR 1994 EH

1 apply to all subsequent plan years unless revoked 

2 with the consent of the Secretary of the Treasury. 

3 ‘‘(3) ALTERNATIVE MINIMUM FUNDING STAND4 ARDS.—The alternative standards described in this 

5 paragraph are the following: 

6 ‘‘(A) INTEREST RATES.— 

7 ‘‘(i) IN GENERAL.—Notwithstanding 

8 subsection (h)(2)(C) and except as pro9 vided in clause (ii), the first, second, and 

10 third segment rates in effect for any 

11 month for purposes of this section shall be 

12 8 percent. 

13 ‘‘(ii) NEW BENEFIT ACCRUALS.—Not14 withstanding subsection (h)(2), for pur15 poses of determining the funding target 

16 and normal cost of a plan for any plan 

17 year, the present value of any benefits ac18 crued or earned under the plan for a plan 

19 year with respect to which an election 

20 under paragraph (1) is in effect shall be 

21 determined on the basis of the United 

22 States Treasury obligation yield curve for 

23 the day that is the valuation date of such 

24 plan for such plan year. 
63 

•HR 1994 EH

1 ‘‘(iii) UNITED STATES TREASURY OB2 LIGATION YIELD CURVE.—For purposes of 

3 this subsection, the term ‘United States 

4 Treasury obligation yield curve’ means, 

5 with respect to any day, a yield curve 

6 which shall be prescribed by the Secretary 

7 of the Treasury for such day on interest8 bearing obligations of the United States. 

9 ‘‘(B) SHORTFALL AMORTIZATION BASE.— 

10 ‘‘(i) PREVIOUS SHORTFALL AMORTIZA11 TION BASES.—The shortfall amortization 

12 bases determined under subsection (c)(3) 

13 for all plan years preceding the first plan 

14 year to which the election under paragraph 

15 (1) applies (and all shortfall amortization 

16 installments determined with respect to 

17 such bases) shall be reduced to zero under 

18 rules similar to the rules of subsection 

19 (c)(6). 

20 ‘‘(ii) NEW SHORTFALL AMORTIZATION

21 BASE.—Notwithstanding subsection (c)(3), 

22 the shortfall amortization base for the first 

23 plan year to which the election under para24 graph (1) applies shall be the funding 

25 shortfall of such plan for such plan year 
64 

•HR 1994 EH

1 (determined using the interest rates as 

2 modified under subparagraph (A)). 

3 ‘‘(C) DETERMINATION OF SHORTFALL AM4 ORTIZATION INSTALLMENTS.— 

5 ‘‘(i) 30-YEAR PERIOD.—Subpara6 graphs (A) and (B) of subsection (c)(2) 

7 shall be applied by substituting ‘30-plan8 year’ for ‘7-plan-year’ each place it ap9 pears. 

10 ‘‘(ii) NO SPECIAL ELECTION.—The 

11 election under subparagraph (D) of sub12 section (c)(2) shall not apply to any plan 

13 year to which the election under paragraph 

14 (1) applies. 

15 ‘‘(D) EXEMPTION FROM AT-RISK TREAT16 MENT.—Subsection (i) shall not apply. 

17 ‘‘(4) COMMUNITY NEWSPAPER PLAN.—For pur18 poses of this subsection— 

19 ‘‘(A) IN GENERAL.—The term ‘community 

20 newspaper plan’ means a plan to which this sec21 tion applies maintained by an employer which, 

22 as of December 31, 2017— 

23 ‘‘(i) publishes and distributes daily, ei24 ther electronically or in printed form— 

25 ‘‘(I) a community newspaper, or 
65 

•HR 1994 EH

1 ‘‘(II) 1 or more community news2 papers in the same State, 

3 ‘‘(ii) is not a company the stock of 

4 which is publicly traded (on a stock ex5 change or in an over-the-counter market), 

6 and is not controlled, directly or indirectly, 

7 by such a company, 

8 ‘‘(iii) is controlled, directly or indi9 rectly— 

10 ‘‘(I) by 1 or more persons resid11 ing primarily in the State in which 

12 the community newspaper is pub13 lished, 

14 ‘‘(II) for not less than 30 years 

15 by individuals who are members of the 

16 same family, 

17 ‘‘(III) by a trust created or orga18 nized in the State in which the com19 munity newspaper is published, the 

20 sole trustees of which are persons de21 scribed in subclause (I) or (II), 

22 ‘‘(IV) by an entity which is de23 scribed in section 501(c)(3) of the In24 ternal Revenue Code of 1986 and ex25 empt from taxation under section 
66 

•HR 1994 EH

1 501(a) of such Code, which is orga2 nized and operated in the State in 

3 which the community newspaper is 

4 published, and the primary purpose of 

5 which is to benefit communities in 

6 such State, or 

7 ‘‘(V) by a combination of persons 

8 described in subclause (I), (III), or 

9 (IV), and 

10 ‘‘(iv) does not control, directly or indi11 rectly, any newspaper in any other State. 

12 ‘‘(B) COMMUNITY NEWSPAPER.—The term 

13 ‘community newspaper’ means a newspaper 

14 which primarily serves a metropolitan statistical 

15 area, as determined by the Office of Manage16 ment and Budget, with a population of not less 

17 than 100,000. 

18 ‘‘(C) CONTROL.—A person shall be treated 

19 as controlled by another person if such other 

20 person possesses, directly or indirectly, the 

21 power to direct or cause the direction and man22 agement of such person (including the power to 

23 elect a majority of the members of the board of 

24 directors of such person) through the ownership 

25 of voting securities. 
67 

•HR 1994 EH

1 ‘‘(5) CONTROLLED GROUP.—For purposes of 

2 this subsection, the term ‘controlled group’ means all 

3 persons treated as a single employer under sub4 section (b), (c), (m), or (o) of section 414 of the In5 ternal Revenue Code of 1986 as of the date of the 

6 enactment of this subsection. 

7 ‘‘(6) EFFECT ON PREMIUM RATE CALCULA8 TION.—Notwithstanding any other provision of law 

9 or any regulation issued by the Pension Benefit 

10 Guaranty Corporation, in the case of a plan for 

11 which an election is made to apply the alternative 

12 standards described in paragraph (3), the additional 

13 premium under section 4006(a)(3)(E) shall be deter14 mined as if such election had not been made.’’. 

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

16 this section shall apply to plan years ending after Decem17 ber 31, 2017. 

18 SEC. 116. TREATING EXCLUDED DIFFICULTY OF CARE PAY19 MENTS AS COMPENSATION FOR DETER20 MINING RETIREMENT CONTRIBUTION LIMI21 TATIONS. 

22 (a) INDIVIDUAL RETIREMENT ACCOUNTS.— 

23 (1) IN GENERAL.—Section 408(o) of the Inter24 nal Revenue Code of 1986 is amended by adding at 

25 the end the following new paragraph: 
68 

•HR 1994 EH

1 ‘‘(5) SPECIAL RULE FOR DIFFICULTY OF CARE

2 PAYMENTS EXCLUDED FROM GROSS INCOME.—In 

3 the case of an individual who for a taxable year ex4 cludes from gross income under section 131 a quali5 fied foster care payment which is a difficulty of care 

6 payment, if— 

7 ‘‘(A) the deductible amount in effect for 

8 the taxable year under subsection (b), exceeds 

9 ‘‘(B) the amount of compensation includ10 ible in the individual’s gross income for the tax11 able year, 

12 the individual may elect to increase the nondeduct13 ible limit under paragraph (2) for the taxable year 

14 by an amount equal to the lesser of such excess or 

15 the amount so excluded.’’. 

16 (2) EFFECTIVE DATE.—The amendments made 

17 by this subsection shall apply to contributions after 

18 the date of the enactment of this Act. 

19 (b) DEFINED CONTRIBUTION PLANS.— 

20 (1) IN GENERAL.—Section 415(c) of such Code 

21 is amended by adding at the end the following new 

22 paragraph: 

23 ‘‘(8) SPECIAL RULE FOR DIFFICULTY OF CARE

24 PAYMENTS EXCLUDED FROM GROSS INCOME.— 
69 

•HR 1994 EH

1 ‘‘(A) IN GENERAL.—For purposes of para2 graph (1)(B), in the case of an individual who 

3 for a taxable year excludes from gross income 

4 under section 131 a qualified foster care pay5 ment which is a difficulty of care payment, the 

6 participant’s compensation, or earned income, 

7 as the case may be, shall be increased by the 

8 amount so excluded. 

9 ‘‘(B) CONTRIBUTIONS ALLOCABLE TO DIF10 FICULTY OF CARE PAYMENTS TREATED AS

11 AFTER-TAX.—Any contribution by the partici12 pant which is allowable due to such increase— 

13 ‘‘(i) shall be treated for purposes of 

14 this title as investment in the contract, and 

15 ‘‘(ii) shall not cause a plan (and any 

16 arrangement which is part of such plan) to 

17 be treated as failing to meet any require18 ments of this chapter solely by reason of 

19 allowing any such contributions.’’. 

20 (2) EFFECTIVE DATE.—The amendment made 

21 by this subsection shall apply to plan years begin22 ning after December 31, 2015. 
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•HR 1994 EH

1 TITLE II—ADMINISTRATIVE 

2 IMPROVEMENTS 

3 SEC. 201. PLAN ADOPTED BY FILING DUE DATE FOR YEAR 

4 MAY BE TREATED AS IN EFFECT AS OF CLOSE 

5 OF YEAR. 

6 (a) IN GENERAL.—Subsection (b) of section 401 of 

7 the Internal Revenue Code of 1986 is amended— 

8 (1) by striking ‘‘RETROACTIVE CHANGES IN

9 PLAN.—A stock bonus’’ and inserting ‘‘PLAN

10 AMENDMENTS.— 

11 ‘‘(1) CERTAIN RETROACTIVE CHANGES IN

12 PLAN.—A stock bonus’’; and 

13 (2) by adding at the end the following new 

14 paragraph: 

15 ‘‘(2) ADOPTION OF PLAN.—If an employer 

16 adopts a stock bonus, pension, profit-sharing, or an17 nuity plan after the close of a taxable year but be18 fore the time prescribed by law for filing the return 

19 of the employer for the taxable year (including ex20 tensions thereof), the employer may elect to treat 

21 the plan as having been adopted as of the last day 

22 of the taxable year.’’. 

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

24 this section shall apply to plans adopted for taxable years 

25 beginning after December 31, 2019. 
71 

•HR 1994 EH

1 SEC. 202. COMBINED ANNUAL REPORT FOR GROUP OF 

2 PLANS. 

3 (a) IN GENERAL.—The Secretary of the Treasury 

4 and the Secretary of Labor shall, in cooperation, modify 

5 the returns required under section 6058 of the Internal 

6 Revenue Code of 1986 and the reports required by section 

7 104 of the Employee Retirement Income Security Act of 

8 1974 (29 U.S.C. 1024) so that all members of a group 

9 of plans described in subsection (c) may file a single aggre10 gated annual return or report satisfying the requirements 

11 of both such sections. 

12 (b) ADMINISTRATIVE REQUIREMENTS.—In devel13 oping the consolidated return or report under subsection 

14 (a), the Secretary of the Treasury and the Secretary of 

15 Labor may require such return or report to include any 

16 information regarding each plan in the group as such Sec17 retaries determine is necessary or appropriate for the en18 forcement and administration of the Internal Revenue 

19 Code of 1986 and the Employee Retirement Income Secu20 rity Act of 1974 and shall require such information as will 

21 enable a participant in a plan to identify any aggregated 

22 return or report filed with respect to the plan. 

23 (c) PLANS DESCRIBED.—A group of plans is de24 scribed in this subsection if all plans in the group— 

25 (1) are individual account plans or defined con26 tribution plans (as defined in section 3(34) of the 
72 

•HR 1994 EH

1 Employee Retirement Income Security Act of 1974 

2 (29 U.S.C. 1002(34)) or in section 414(i) of the In3 ternal Revenue Code of 1986); 

4 (2) have— 

5 (A) the same trustee (as described in sec6 tion 403(a) of such Act (29 U.S.C. 1103(a))); 

7 (B) the same one or more named fidu8 ciaries (as described in section 402(a) of such 

9 Act (29 U.S.C. 1102(a))); 

10 (C) the same administrator (as defined in 

11 section 3(16)(A) of such Act (29 U.S.C. 

12 1002(16)(A))) and plan administrator (as de13 fined in section 414(g) of the Internal Revenue 

14 Code of 1986); and 

15 (D) plan years beginning on the same 

16 date; and 

17 (3) provide the same investments or investment 

18 options to participants and beneficiaries. 

19 A plan not subject to title I of the Employee Retirement 

20 Income Security Act of 1974 shall be treated as meeting 

21 the requirements of paragraph (2) as part of a group of 

22 plans if the same person that performs each of the func23 tions described in such paragraph, as applicable, for all 

24 other plans in such group performs each of such functions 

25 for such plan. 
73 

•HR 1994 EH

1 (d) CLARIFICATION RELATING TO ELECTRONIC FIL2 ING OF RETURNS FOR DEFERRED COMPENSATION

3 PLANS.— 

4 (1) IN GENERAL.—Section 6011(e) of the Inter5 nal Revenue Code of 1986 is amended by adding at 

6 the end the following new paragraph: 

7 ‘‘(6) APPLICATION OF NUMERICAL LIMITATION

8 TO RETURNS RELATING TO DEFERRED COMPENSA9 TION PLANS.—For purposes of applying the numer10 ical limitation under paragraph (2)(A) to any return 

11 required under section 6058, information regarding 

12 each plan for which information is provided on such 

13 return shall be treated as a separate return.’’. 

14 (2) EFFECTIVE DATE.—The amendment made 

15 by paragraph (1) shall apply to returns required to 

16 be filed with respect to plan years beginning after 

17 December 31, 2019. 

18 (e) EFFECTIVE DATE.—The modification required by 

19 subsection (a) shall be implemented not later than Janu20 ary 1, 2022, and shall apply to returns and reports for 

21 plan years beginning after December 31, 2021. 

22 SEC. 203. DISCLOSURE REGARDING LIFETIME INCOME. 

23 (a) IN GENERAL.—Subparagraph (B) of section 

24 105(a)(2) of the Employee Retirement Income Security 

25 Act of 1974 (29 U.S.C. 1025(a)(2)) is amended— 
74 

•HR 1994 EH

1 (1) in clause (i), by striking ‘‘and’’ at the end; 

2 (2) in clause (ii), by striking ‘‘diversification.’’ 

3 and inserting ‘‘diversification, and’’; and 

4 (3) by inserting at the end the following: 

5 ‘‘(iii) the lifetime income disclosure 

6 described in subparagraph (D)(i). 

7 In the case of pension benefit statements de8 scribed in clause (i) of paragraph (1)(A), a life9 time income disclosure under clause (iii) of this 

10 subparagraph shall be required to be included 

11 in only one pension benefit statement during 

12 any one 12-month period.’’. 

13 (b) LIFETIME INCOME.—Paragraph (2) of section 

14 105(a) of the Employee Retirement Income Security Act 

15 of 1974 (29 U.S.C. 1025(a)) is amended by adding at the 

16 end the following new subparagraph: 

17 ‘‘(D) LIFETIME INCOME DISCLOSURE.— 

18 ‘‘(i) IN GENERAL.— 

19 ‘‘(I) DISCLOSURE.—A lifetime in20 come disclosure shall set forth the life21 time income stream equivalent of the 

22 total benefits accrued with respect to 

23 the participant or beneficiary. 

24 ‘‘(II) LIFETIME INCOME STREAM

25 EQUIVALENT OF THE TOTAL BENE-
75 

•HR 1994 EH

1 FITS ACCRUED.—For purposes of this 

2 subparagraph, the term ‘lifetime in3 come stream equivalent of the total 

4 benefits accrued’ means the amount of 

5 monthly payments the participant or 

6 beneficiary would receive if the total 

7 accrued benefits of such participant or 

8 beneficiary were used to provide life9 time income streams described in sub10 clause (III), based on assumptions 

11 specified in rules prescribed by the 

12 Secretary. 

13 ‘‘(III) LIFETIME INCOME

14 STREAMS.—The lifetime income 

15 streams described in this subclause 

16 are a qualified joint and survivor an17 nuity (as defined in section 205(d)), 

18 based on assumptions specified in 

19 rules prescribed by the Secretary, in20 cluding the assumption that the par21 ticipant or beneficiary has a spouse of 

22 equal age, and a single life annuity. 

23 Such lifetime income streams may 

24 have a term certain or other features 
76 

•HR 1994 EH

1 to the extent permitted under rules 

2 prescribed by the Secretary. 

3 ‘‘(ii) MODEL DISCLOSURE.—Not later 

4 than 1 year after the date of the enact5 ment of the Setting Every Community Up 

6 for Retirement Enhancement Act of 2019, 

7 the Secretary shall issue a model lifetime 

8 income disclosure, written in a manner so 

9 as to be understood by the average plan 

10 participant, which— 

11 ‘‘(I) explains that the lifetime in12 come stream equivalent is only pro13 vided as an illustration; 

14 ‘‘(II) explains that the actual 

15 payments under the lifetime income 

16 stream described in clause (i)(III) 

17 which may be purchased with the 

18 total benefits accrued will depend on 

19 numerous factors and may vary sub20 stantially from the lifetime income 

21 stream equivalent in the disclosures; 

22 ‘‘(III) explains the assumptions 

23 upon which the lifetime income stream 

24 equivalent was determined; and 
77 

•HR 1994 EH

1 ‘‘(IV) provides such other similar 

2 explanations as the Secretary con3 siders appropriate. 

4 ‘‘(iii) ASSUMPTIONS AND RULES.— 

5 Not later than 1 year after the date of the 

6 enactment of the Setting Every Commu7 nity Up for Retirement Enhancement Act 

8 of 2019, the Secretary shall— 

9 ‘‘(I) prescribe assumptions which 

10 administrators of individual account 

11 plans may use in converting total ac12 crued benefits into lifetime income 

13 stream equivalents for purposes of 

14 this subparagraph; and 

15 ‘‘(II) issue interim final rules 

16 under clause (i). 

17 In prescribing assumptions under sub18 clause (I), the Secretary may prescribe a 

19 single set of specific assumptions (in which 

20 case the Secretary may issue tables or fac21 tors which facilitate such conversions), or 

22 ranges of permissible assumptions. To the 

23 extent that an accrued benefit is or may be 

24 invested in a lifetime income stream de25 scribed in clause (i)(III), the assumptions 
78 

•HR 1994 EH

1 prescribed under subclause (I) shall, to the 

2 extent appropriate, permit administrators 

3 of individual account plans to use the 

4 amounts payable under such lifetime in5 come stream as a lifetime income stream 

6 equivalent. 

7 ‘‘(iv) LIMITATION ON LIABILITY.—No 

8 plan fiduciary, plan sponsor, or other per9 son shall have any liability under this title 

10 solely by reason of the provision of lifetime 

11 income stream equivalents which are de12 rived in accordance with the assumptions 

13 and rules described in clause (iii) and 

14 which include the explanations contained in 

15 the model lifetime income disclosure de16 scribed in clause (ii). This clause shall 

17 apply without regard to whether the provi18 sion of such lifetime income stream equiva19 lent is required by subparagraph (B)(iii). 

20 ‘‘(v) EFFECTIVE DATE.—The require21 ment in subparagraph (B)(iii) shall apply 

22 to pension benefit statements furnished 

23 more than 12 months after the latest of 

24 the issuance by the Secretary of— 
79 

•HR 1994 EH

1 ‘‘(I) interim final rules under 

2 clause (i); 

3 ‘‘(II) the model disclosure under 

4 clause (ii); or 

5 ‘‘(III) the assumptions under 

6 clause (iii).’’. 

7 SEC. 204. FIDUCIARY SAFE HARBOR FOR SELECTION OF 

8 LIFETIME INCOME PROVIDER. 

9 Section 404 of the Employee Retirement Income Se10 curity Act of 1974 (29 U.S.C. 1104) is amended by adding 

11 at the end the following: 

12 ‘‘(e) SAFE HARBOR FOR ANNUITY SELECTION.— 

13 ‘‘(1) IN GENERAL.—With respect to the selec14 tion of an insurer for a guaranteed retirement in15 come contract, the requirements of subsection 

16 (a)(1)(B) will be deemed to be satisfied if a fidu17 ciary— 

18 ‘‘(A) engages in an objective, thorough, 

19 and analytical search for the purpose of identi20 fying insurers from which to purchase such con21 tracts; 

22 ‘‘(B) with respect to each insurer identified 

23 under subparagraph (A)— 

24 ‘‘(i) considers the financial capability 

25 of such insurer to satisfy its obligations 
80 

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1 under the guaranteed retirement income 

2 contract; and 

3 ‘‘(ii) considers the cost (including fees 

4 and commissions) of the guaranteed retire5 ment income contract offered by the in6 surer in relation to the benefits and prod7 uct features of the contract and adminis8 trative services to be provided under such 

9 contract; and 

10 ‘‘(C) on the basis of such consideration, 

11 concludes that— 

12 ‘‘(i) at the time of the selection, the 

13 insurer is financially capable of satisfying 

14 its obligations under the guaranteed retire15 ment income contract; and 

16 ‘‘(ii) the relative cost of the selected 

17 guaranteed retirement income contract as 

18 described in subparagraph (B)(ii) is rea19 sonable. 

20 ‘‘(2) FINANCIAL CAPABILITY OF THE IN21 SURER.—A fiduciary will be deemed to satisfy the 

22 requirements of paragraphs (1)(B)(i) and (1)(C)(i) 

23 if— 

24 ‘‘(A) the fiduciary obtains written rep25 resentations from the insurer that— 
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1 ‘‘(i) the insurer is licensed to offer 

2 guaranteed retirement income contracts; 

3 ‘‘(ii) the insurer, at the time of selec4 tion and for each of the immediately pre5 ceding 7 plan years— 

6 ‘‘(I) operates under a certificate 

7 of authority from the insurance com8 missioner of its domiciliary State 

9 which has not been revoked or sus10 pended; 

11 ‘‘(II) has filed audited financial 

12 statements in accordance with the 

13 laws of its domiciliary State under ap14 plicable statutory accounting prin15 ciples; 

16 ‘‘(III) maintains (and has main17 tained) reserves which satisfies all the 

18 statutory requirements of all States 

19 where the insurer does business; and 

20 ‘‘(IV) is not operating under an 

21 order of supervision, rehabilitation, or 

22 liquidation; 

23 ‘‘(iii) the insurer undergoes, at least 

24 every 5 years, a financial examination 

25 (within the meaning of the law of its domi-
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1 ciliary State) by the insurance commis2 sioner of the domiciliary State (or rep3 resentative, designee, or other party ap4 proved by such commissioner); and 

5 ‘‘(iv) the insurer will notify the fidu6 ciary of any change in circumstances oc7 curring after the provision of the represen8 tations in clauses (i), (ii), and (iii) which 

9 would preclude the insurer from making 

10 such representations at the time of 

11 issuance of the guaranteed retirement in12 come contract; and 

13 ‘‘(B) after receiving such representations 

14 and as of the time of selection, the fiduciary 

15 has not received any notice described in sub16 paragraph (A)(iv) and is in possession of no 

17 other information which would cause the fidu18 ciary to question the representations provided. 

19 ‘‘(3) NO REQUIREMENT TO SELECT LOWEST

20 COST.—Nothing in this subsection shall be construed 

21 to require a fiduciary to select the lowest cost con22 tract. A fiduciary may consider the value of a con23 tract, including features and benefits of the contract 

24 and attributes of the insurer (including, without lim-
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1 itation, the insurer’s financial strength) in conjunc2 tion with the cost of the contract. 

3 ‘‘(4) TIME OF SELECTION.— 

4 ‘‘(A) IN GENERAL.—For purposes of this 

5 subsection, the time of selection is— 

6 ‘‘(i) the time that the insurer and the 

7 contract are selected for distribution of 

8 benefits to a specific participant or bene9 ficiary; or 

10 ‘‘(ii) if the fiduciary periodically re11 views the continuing appropriateness of the 

12 conclusion described in paragraph (1)(C) 

13 with respect to a selected insurer, taking 

14 into account the considerations described 

15 in such paragraph, the time that the in16 surer and the contract are selected to pro17 vide benefits at future dates to participants 

18 or beneficiaries under the plan. 

19 Nothing in the preceding sentence shall be con20 strued to require the fiduciary to review the ap21 propriateness of a selection after the purchase 

22 of a contract for a participant or beneficiary. 

23 ‘‘(B) PERIODIC REVIEW.—A fiduciary will 

24 be deemed to have conducted the periodic re25 view described in subparagraph (A)(ii) if the fi-
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1 duciary obtains the written representations de2 scribed in clauses (i), (ii), and (iii) of paragraph 

3 (2)(A) from the insurer on an annual basis, un4 less the fiduciary receives any notice described 

5 in paragraph (2)(A)(iv) or otherwise becomes 

6 aware of facts that would cause the fiduciary to 

7 question such representations. 

8 ‘‘(5) LIMITED LIABILITY.—A fiduciary which 

9 satisfies the requirements of this subsection shall not 

10 be liable following the distribution of any benefit, or 

11 the investment by or on behalf of a participant or 

12 beneficiary pursuant to the selected guaranteed re13 tirement income contract, for any losses that may 

14 result to the participant or beneficiary due to an in15 surer’s inability to satisfy its financial obligations 

16 under the terms of such contract. 

17 ‘‘(6) DEFINITIONS.—For purposes of this sub18 section— 

19 ‘‘(A) INSURER.—The term ‘insurer’ means 

20 an insurance company, insurance service, or in21 surance organization, including affiliates of 

22 such companies. 

23 ‘‘(B) GUARANTEED RETIREMENT INCOME

24 CONTRACT.—The term ‘guaranteed retirement 

25 income contract’ means an annuity contract for 
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•HR 1994 EH

1 a fixed term or a contract (or provision or fea2 ture thereof) which provides guaranteed bene3 fits annually (or more frequently) for at least 

4 the remainder of the life of the participant or 

5 the joint lives of the participant and the partici6 pant’s designated beneficiary as part of an indi7 vidual account plan.’’. 

8 SEC. 205. MODIFICATION OF NONDISCRIMINATION RULES 

9 TO PROTECT OLDER, LONGER SERVICE PAR10 TICIPANTS. 

11 (a) IN GENERAL.—Section 401 of the Internal Rev12 enue Code of 1986 is amended— 

13 (1) by redesignating subsection (o) as sub14 section (p); and 

15 (2) by inserting after subsection (n) the fol16 lowing new subsection: 

17 ‘‘(o) SPECIAL RULES FOR APPLYING NON18 DISCRIMINATION RULES TO PROTECT OLDER, LONGER

19 SERVICE AND GRANDFATHERED PARTICIPANTS.— 

20 ‘‘(1) TESTING OF DEFINED BENEFIT PLANS

21 WITH CLOSED CLASSES OF PARTICIPANTS.— 

22 ‘‘(A) BENEFITS, RIGHTS, OR FEATURES

23 PROVIDED TO CLOSED CLASSES.—A defined 

24 benefit plan which provides benefits, rights, or 

25 features to a closed class of participants shall 
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•HR 1994 EH

1 not fail to satisfy the requirements of sub2 section (a)(4) by reason of the composition of 

3 such closed class or the benefits, rights, or fea4 tures provided to such closed class, if— 

5 ‘‘(i) for the plan year as of which the 

6 class closes and the 2 succeeding plan 

7 years, such benefits, rights, and features 

8 satisfy the requirements of subsection 

9 (a)(4) (without regard to this subpara10 graph but taking into account the rules of 

11 subparagraph (I)), 

12 ‘‘(ii) after the date as of which the 

13 class was closed, any plan amendment 

14 which modifies the closed class or the ben15 efits, rights, and features provided to such 

16 closed class does not discriminate signifi17 cantly in favor of highly compensated em18 ployees, and 

19 ‘‘(iii) the class was closed before April 

20 5, 2017, or the plan is described in sub21 paragraph (C). 

22 ‘‘(B) AGGREGATE TESTING WITH DEFINED

23 CONTRIBUTION PLANS PERMITTED ON A BENE24 FITS BASIS.— 
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1 ‘‘(i) IN GENERAL.—For purposes of 

2 determining compliance with subsection 

3 (a)(4) and section 410(b), a defined benefit 

4 plan described in clause (iii) may be aggre5 gated and tested on a benefits basis with 

6 1 or more defined contribution plans, in7 cluding with the portion of 1 or more de8 fined contribution plans which— 

9 ‘‘(I) provides matching contribu10 tions (as defined in subsection 

11 (m)(4)(A)), 

12 ‘‘(II) provides annuity contracts 

13 described in section 403(b) which are 

14 purchased with matching contribu15 tions or nonelective contributions, or 

16 ‘‘(III) consists of an employee 

17 stock ownership plan (within the 

18 meaning of section 4975(e)(7)) or a 

19 tax credit employee stock ownership 

20 plan (within the meaning of section 

21 409(a)). 

22 ‘‘(ii) SPECIAL RULES FOR MATCHING

23 CONTRIBUTIONS.—For purposes of clause 

24 (i), if a defined benefit plan is aggregated 
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•HR 1994 EH

1 with a portion of a defined contribution 

2 plan providing matching contributions— 

3 ‘‘(I) such defined benefit plan 

4 must also be aggregated with any por5 tion of such defined contribution plan 

6 which provides elective deferrals de7 scribed in subparagraph (A) or (C) of 

8 section 402(g)(3), and 

9 ‘‘(II) such matching contribu10 tions shall be treated in the same 

11 manner as nonelective contributions, 

12 including for purposes of applying the 

13 rules of subsection (l). 

14 ‘‘(iii) PLANS DESCRIBED.—A defined 

15 benefit plan is described in this clause if— 

16 ‘‘(I) the plan provides benefits to 

17 a closed class of participants, 

18 ‘‘(II) for the plan year as of 

19 which the class closes and the 2 suc20 ceeding plan years, the plan satisfies 

21 the requirements of section 410(b) 

22 and subsection (a)(4) (without regard 

23 to this subparagraph but taking into 

24 account the rules of subparagraph 

25 (I)), 
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1 ‘‘(III) after the date as of which 

2 the class was closed, any plan amend3 ment which modifies the closed class 

4 or the benefits provided to such closed 

5 class does not discriminate signifi6 cantly in favor of highly compensated 

7 employees, and 

8 ‘‘(IV) the class was closed before 

9 April 5, 2017, or the plan is described 

10 in subparagraph (C). 

11 ‘‘(C) PLANS DESCRIBED.—A plan is de12 scribed in this subparagraph if, taking into ac13 count any predecessor plan— 

14 ‘‘(i) such plan has been in effect for 

15 at least 5 years as of the date the class is 

16 closed, and 

17 ‘‘(ii) during the 5-year period pre18 ceding the date the class is closed, there 

19 has not been a substantial increase in the 

20 coverage or value of the benefits, rights, or 

21 features described in subparagraph (A) or 

22 in the coverage or benefits under the plan 

23 described in subparagraph (B)(iii) (which24 ever is applicable). 
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1 ‘‘(D) DETERMINATION OF SUBSTANTIAL

2 INCREASE FOR BENEFITS, RIGHTS, AND FEA3 TURES.—In applying subparagraph (C)(ii) for 

4 purposes of subparagraph (A)(iii), a plan shall 

5 be treated as having had a substantial increase 

6 in coverage or value of the benefits, rights, or 

7 features described in subparagraph (A) during 

8 the applicable 5-year period only if, during such 

9 period— 

10 ‘‘(i) the number of participants cov11 ered by such benefits, rights, or features 

12 on the date such period ends is more than 

13 50 percent greater than the number of 

14 such participants on the first day of the 

15 plan year in which such period began, or 

16 ‘‘(ii) such benefits, rights, and fea17 tures have been modified by 1 or more 

18 plan amendments in such a way that, as of 

19 the date the class is closed, the value of 

20 such benefits, rights, and features to the 

21 closed class as a whole is substantially 

22 greater than the value as of the first day 

23 of such 5-year period, solely as a result of 

24 such amendments. 
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1 ‘‘(E) DETERMINATION OF SUBSTANTIAL

2 INCREASE FOR AGGREGATE TESTING ON BENE3 FITS BASIS.—In applying subparagraph (C)(ii) 

4 for purposes of subparagraph (B)(iii)(IV), a 

5 plan shall be treated as having had a substan6 tial increase in coverage or benefits during the 

7 applicable 5-year period only if, during such pe8 riod— 

9 ‘‘(i) the number of participants bene10 fitting under the plan on the date such pe11 riod ends is more than 50 percent greater 

12 than the number of such participants on 

13 the first day of the plan year in which such 

14 period began, or 

15 ‘‘(ii) the average benefit provided to 

16 such participants on the date such period 

17 ends is more than 50 percent greater than 

18 the average benefit provided on the first 

19 day of the plan year in which such period 

20 began. 

21 ‘‘(F) CERTAIN EMPLOYEES DIS22 REGARDED.—For purposes of subparagraphs 

23 (D) and (E), any increase in coverage or value 

24 or in coverage or benefits, whichever is applica25 ble, which is attributable to such coverage and 
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1 value or coverage and benefits provided to em2 ployees— 

3 ‘‘(i) who became participants as a re4 sult of a merger, acquisition, or similar 

5 event which occurred during the 7-year pe6 riod preceding the date the class is closed, 

7 or 

8 ‘‘(ii) who became participants by rea9 son of a merger of the plan with another 

10 plan which had been in effect for at least 

11 5 years as of the date of the merger, 

12 shall be disregarded, except that clause (ii) 

13 shall apply for purposes of subparagraph (D) 

14 only if, under the merger, the benefits, rights, 

15 or features under 1 plan are conformed to the 

16 benefits, rights, or features of the other plan 

17 prospectively. 

18 ‘‘(G) RULES RELATING TO AVERAGE BEN19 EFIT.—For purposes of subparagraph (E)— 

20 ‘‘(i) the average benefit provided to 

21 participants under the plan will be treated 

22 as having remained the same between the 

23 2 dates described in subparagraph (E)(ii) 

24 if the benefit formula applicable to such 
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•HR 1994 EH

1 participants has not changed between such 

2 dates, and 

3 ‘‘(ii) if the benefit formula applicable 

4 to 1 or more participants under the plan 

5 has changed between such 2 dates, then 

6 the average benefit under the plan shall be 

7 considered to have increased by more than 

8 50 percent only if— 

9 ‘‘(I) the total amount determined 

10 under section 430(b)(1)(A)(i) for all 

11 participants benefitting under the 

12 plan for the plan year in which the 5- 

13 year period described in subparagraph 

14 (E) ends, exceeds 

15 ‘‘(II) the total amount deter16 mined under section 430(b)(1)(A)(i) 

17 for all such participants for such plan 

18 year, by using the benefit formula in 

19 effect for each such participant for 

20 the first plan year in such 5-year pe21 riod, 

22 by more than 50 percent. In the case of a 

23 CSEC plan (as defined in section 414(y)), 

24 the normal cost of the plan (as determined 

25 under section 433(j)(1)(B)) shall be used 
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•HR 1994 EH

1 in lieu of the amount determined under 

2 section 430(b)(1)(A)(i). 

3 ‘‘(H) TREATMENT AS SINGLE PLAN.—For 

4 purposes of subparagraphs (E) and (G), a plan 

5 described in section 413(c) shall be treated as 

6 a single plan rather than as separate plans 

7 maintained by each employer in the plan. 

8 ‘‘(I) SPECIAL RULES.—For purposes of 

9 subparagraphs (A)(i) and (B)(iii)(II), the fol10 lowing rules shall apply: 

11 ‘‘(i) In applying section 410(b)(6)(C), 

12 the closing of the class of participants shall 

13 not be treated as a significant change in 

14 coverage under section 410(b)(6)(C)(i)(II). 

15 ‘‘(ii) 2 or more plans shall not fail to 

16 be eligible to be aggregated and treated as 

17 a single plan solely by reason of having dif18 ferent plan years. 

19 ‘‘(iii) Changes in the employee popu20 lation shall be disregarded to the extent at21 tributable to individuals who become em22 ployees or cease to be employees, after the 

23 date the class is closed, by reason of a 

24 merger, acquisition, divestiture, or similar 

25 event. 
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1 ‘‘(iv) Aggregation and all other testing 

2 methodologies otherwise applicable under 

3 subsection (a)(4) and section 410(b) may 

4 be taken into account. 

5 The rule of clause (ii) shall also apply for pur6 poses of determining whether plans to which 

7 subparagraph (B)(i) applies may be aggregated 

8 and treated as 1 plan for purposes of deter9 mining whether such plans meet the require10 ments of subsection (a)(4) and section 410(b). 

11 ‘‘(J) SPUN-OFF PLANS.—For purposes of 

12 this paragraph, if a portion of a defined benefit 

13 plan described in subparagraph (A) or (B)(iii) 

14 is spun off to another employer and the spun15 off plan continues to satisfy the requirements 

16 of— 

17 ‘‘(i) subparagraph (A)(i) or 

18 (B)(iii)(II), whichever is applicable, if the 

19 original plan was still within the 3-year pe20 riod described in such subparagraph at the 

21 time of the spin off, and 

22 ‘‘(ii) subparagraph (A)(ii) or 

23 (B)(iii)(III), whichever is applicable, 
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1 the treatment under subparagraph (A) or (B) 

2 of the spun-off plan shall continue with respect 

3 to such other employer. 

4 ‘‘(2) TESTING OF DEFINED CONTRIBUTION

5 PLANS.— 

6 ‘‘(A) TESTING ON A BENEFITS BASIS.—A 

7 defined contribution plan shall be permitted to 

8 be tested on a benefits basis if— 

9 ‘‘(i) such defined contribution plan 

10 provides make-whole contributions to a 

11 closed class of participants whose accruals 

12 under a defined benefit plan have been re13 duced or eliminated, 

14 ‘‘(ii) for the plan year of the defined 

15 contribution plan as of which the class eli16 gible to receive such make-whole contribu17 tions closes and the 2 succeeding plan 

18 years, such closed class of participants sat19 isfies the requirements of section 

20 410(b)(2)(A)(i) (determined by applying 

21 the rules of paragraph (1)(I)), 

22 ‘‘(iii) after the date as of which the 

23 class was closed, any plan amendment to 

24 the defined contribution plan which modi25 fies the closed class or the allocations, ben-
97 

•HR 1994 EH

1 efits, rights, and features provided to such 

2 closed class does not discriminate signifi3 cantly in favor of highly compensated em4 ployees, and 

5 ‘‘(iv) the class was closed before April 

6 5, 2017, or the defined benefit plan under 

7 clause (i) is described in paragraph (1)(C) 

8 (as applied for purposes of paragraph 

9 (1)(B)(iii)(IV)). 

10 ‘‘(B) AGGREGATION WITH PLANS INCLUD11 ING MATCHING CONTRIBUTIONS.— 

12 ‘‘(i) IN GENERAL.—With respect to 1 

13 or more defined contribution plans de14 scribed in subparagraph (A), for purposes 

15 of determining compliance with subsection 

16 (a)(4) and section 410(b), the portion of 

17 such plans which provides make-whole con18 tributions or other nonelective contribu19 tions may be aggregated and tested on a 

20 benefits basis with the portion of 1 or 

21 more other defined contribution plans 

22 which— 

23 ‘‘(I) provides matching contribu24 tions (as defined in subsection 

25 (m)(4)(A)), 
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•HR 1994 EH

1 ‘‘(II) provides annuity contracts 

2 described in section 403(b) which are 

3 purchased with matching contribu4 tions or nonelective contributions, or 

5 ‘‘(III) consists of an employee 

6 stock ownership plan (within the 

7 meaning of section 4975(e)(7)) or a 

8 tax credit employee stock ownership 

9 plan (within the meaning of section 

10 409(a)). 

11 ‘‘(ii) SPECIAL RULES FOR MATCHING

12 CONTRIBUTIONS.—Rules similar to the 

13 rules of paragraph (1)(B)(ii) shall apply 

14 for purposes of clause (i). 

15 ‘‘(C) SPECIAL RULES FOR TESTING DE16 FINED CONTRIBUTION PLAN FEATURES PRO17 VIDING MATCHING CONTRIBUTIONS TO CERTAIN

18 OLDER, LONGER SERVICE PARTICIPANTS.—In 

19 the case of a defined contribution plan which 

20 provides benefits, rights, or features to a closed 

21 class of participants whose accruals under a de22 fined benefit plan have been reduced or elimi23 nated, the plan shall not fail to satisfy the re24 quirements of subsection (a)(4) solely by reason 

25 of the composition of the closed class or the 
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•HR 1994 EH

1 benefits, rights, or features provided to such 

2 closed class if the defined contribution plan and 

3 defined benefit plan otherwise meet the require4 ments of subparagraph (A) but for the fact that 

5 the make-whole contributions under the defined 

6 contribution plan are made in whole or in part 

7 through matching contributions. 

8 ‘‘(D) SPUN-OFF PLANS.—For purposes of 

9 this paragraph, if a portion of a defined con10 tribution plan described in subparagraph (A) or 

11 (C) is spun off to another employer, the treat12 ment under subparagraph (A) or (C) of the 

13 spun-off plan shall continue with respect to the 

14 other employer if such plan continues to comply 

15 with the requirements of clauses (ii) (if the 

16 original plan was still within the 3-year period 

17 described in such clause at the time of the spin 

18 off) and (iii) of subparagraph (A), as deter19 mined for purposes of subparagraph (A) or (C), 

20 whichever is applicable. 

21 ‘‘(3) DEFINITIONS AND SPECIAL RULE.—For 

22 purposes of this subsection— 

23 ‘‘(A) MAKE-WHOLE CONTRIBUTIONS.—Ex24 cept as otherwise provided in paragraph (2)(C), 

25 the term ‘make-whole contributions’ means non-
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1 elective allocations for each employee in the 

2 class which are reasonably calculated, in a con3 sistent manner, to replace some or all of the re4 tirement benefits which the employee would 

5 have received under the defined benefit plan 

6 and any other plan or qualified cash or deferred 

7 arrangement under subsection (k)(2) if no 

8 change had been made to such defined benefit 

9 plan and such other plan or arrangement. For 

10 purposes of the preceding sentence, consistency 

11 shall not be required with respect to employees 

12 who were subject to different benefit formulas 

13 under the defined benefit plan. 

14 ‘‘(B) REFERENCES TO CLOSED CLASS OF

15 PARTICIPANTS.—References to a closed class of 

16 participants and similar references to a closed 

17 class shall include arrangements under which 1 

18 or more classes of participants are closed, ex19 cept that 1 or more classes of participants 

20 closed on different dates shall not be aggre21 gated for purposes of determining the date any 

22 such class was closed. 

23 ‘‘(C) HIGHLY COMPENSATED EMPLOYEE.— 

24 The term ‘highly compensated employee’ has 
101 

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1 the meaning given such term in section 

2 414(q).’’. 

3 (b) PARTICIPATION REQUIREMENTS.—Paragraph 

4 (26) of section 401(a) of the Internal Revenue Code of 

5 1986 is amended by adding at the end the following new 

6 subparagraph: 

7 ‘‘(I) PROTECTED PARTICIPANTS.— 

8 ‘‘(i) IN GENERAL.—A plan shall be 

9 deemed to satisfy the requirements of sub10 paragraph (A) if— 

11 ‘‘(I) the plan is amended— 

12 ‘‘(aa) to cease all benefit ac13 cruals, or 

14 ‘‘(bb) to provide future ben15 efit accruals only to a closed 

16 class of participants, 

17 ‘‘(II) the plan satisfies subpara18 graph (A) (without regard to this sub19 paragraph) as of the effective date of 

20 the amendment, and 

21 ‘‘(III) the amendment was adopt22 ed before April 5, 2017, or the plan is 

23 described in clause (ii). 

24 ‘‘(ii) PLANS DESCRIBED.—A plan is 

25 described in this clause if the plan would 
102 

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1 be described in subsection (o)(1)(C), as ap2 plied for purposes of subsection 

3 (o)(1)(B)(iii)(IV) and by treating the effec4 tive date of the amendment as the date the 

5 class was closed for purposes of subsection 

6 (o)(1)(C). 

7 ‘‘(iii) SPECIAL RULES.—For purposes 

8 of clause (i)(II), in applying section 

9 410(b)(6)(C), the amendments described in 

10 clause (i) shall not be treated as a signifi11 cant change in coverage under section 

12 410(b)(6)(C)(i)(II). 

13 ‘‘(iv) SPUN-OFF PLANS.—For pur14 poses of this subparagraph, if a portion of 

15 a plan described in clause (i) is spun off to 

16 another employer, the treatment under 

17 clause (i) of the spun-off plan shall con18 tinue with respect to the other employer.’’. 

19 (c) EFFECTIVE DATE.— 

20 (1) IN GENERAL.—Except as provided in para21 graph (2), the amendments made by this section 

22 shall take effect on the date of the enactment of this 

23 Act, without regard to whether any plan modifica24 tions referred to in such amendments are adopted or 

25 effective before, on, or after such date of enactment. 
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1 (2) SPECIAL RULES.— 

2 (A) ELECTION OF EARLIER APPLICA3 TION.—At the election of the plan sponsor, the 

4 amendments made by this section shall apply to 

5 plan years beginning after December 31, 2013. 

6 (B) CLOSED CLASSES OF PARTICIPANTS.— 

7 For purposes of paragraphs (1)(A)(iii), 

8 (1)(B)(iii)(IV), and (2)(A)(iv) of section 401(o) 

9 of the Internal Revenue Code of 1986 (as added 

10 by this section), a closed class of participants 

11 shall be treated as being closed before April 5, 

12 2017, if the plan sponsor’s intention to create 

13 such closed class is reflected in formal written 

14 documents and communicated to participants 

15 before such date. 

16 (C) CERTAIN POST-ENACTMENT PLAN

17 AMENDMENTS.—A plan shall not be treated as 

18 failing to be eligible for the application of sec19 tion 401(o)(1)(A), 401(o)(1)(B)(iii), or 

20 401(a)(26) of such Code (as added by this sec21 tion) to such plan solely because in the case 

22 of— 

23 (i) such section 401(o)(1)(A), the plan 

24 was amended before the date of the enact25 ment of this Act to eliminate 1 or more 
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1 benefits, rights, or features, and is further 

2 amended after such date of enactment to 

3 provide such previously eliminated benefits, 

4 rights, or features to a closed class of par5 ticipants, or 

6 (ii) such section 401(o)(1)(B)(iii) or 

7 section 401(a)(26), the plan was amended 

8 before the date of the enactment of this 

9 Act to cease all benefit accruals, and is 

10 further amended after such date of enact11 ment to provide benefit accruals to a closed 

12 class of participants. 

13 Any such section shall only apply if the plan 

14 otherwise meets the requirements of such sec15 tion and in applying such section, the date the 

16 class of participants is closed shall be the effec17 tive date of the later amendment. 

18 SEC. 206. MODIFICATION OF PBGC PREMIUMS FOR CSEC 

19 PLANS. 

20 (a) FLAT RATE PREMIUM.—Subparagraph (A) of 

21 section 4006(a)(3) of the Employee Retirement Income 

22 Security Act of 1974 (29 U.S.C. 1306(a)(3)) is amend23 ed— 
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1 (1) in clause (i), by striking ‘‘plan,’’ and insert2 ing ‘‘plan other than a CSEC plan (as defined in 

3 section 210(f)(1))’’; 

4 (2) in clause (v), by striking ‘‘or’’ at the end; 

5 (3) in clause (vi), by striking the period at the 

6 end and inserting ‘‘, or’’; and 

7 (4) by adding at the end the following new 

8 clause: 

9 ‘‘(vii) in the case of a CSEC plan (as 

10 defined in section 210(f)(1)), for plan 

11 years beginning after December 31, 2018, 

12 for each individual who is a participant in 

13 such plan during the plan year an amount 

14 equal to the sum of— 

15 ‘‘(I) the additional premium (if 

16 any) determined under subparagraph 

17 (E), and 

18 ‘‘(II) $19.’’. 

19 (b) VARIABLE RATE PREMIUM.— 

20 (1) UNFUNDED VESTED BENEFITS.— 

21 (A) IN GENERAL.—Subparagraph (E) of 

22 section 4006(a)(3) of the Employee Retirement 

23 Income Security Act of 1974 (29 U.S.C. 

24 1306(a)(3)) is amended by adding at the end 

25 the following new clause: 
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1 ‘‘(v) For purposes of clause (ii), in the case 

2 of a CSEC plan (as defined in section 

3 210(f)(1)), the term ‘unfunded vested benefits’ 

4 means, for plan years beginning after December 

5 31, 2018, the excess (if any) of— 

6 ‘‘(I) the funding liability of the plan 

7 as determined under section 306(j)(5)(C) 

8 for the plan year by only taking into ac9 count vested benefits, over 

10 ‘‘(II) the fair market value of plan as11 sets for the plan year which are held by 

12 the plan on the valuation date.’’. 

13 (B) CONFORMING AMENDMENT.—Clause 

14 (iii) of section 4006(a)(3)(E) of such Act (29 

15 U.S.C. 1306(a)(3)(E)) is amended by striking 

16 ‘‘For purposes’’ and inserting ‘‘Except as pro17 vided in clause (v), for purposes’’. 

18 (2) APPLICABLE DOLLAR AMOUNT.— 

19 (A) IN GENERAL.—Paragraph (8) of sec20 tion 4006(a) of such Act (29 U.S.C. 1306(a)) 

21 is amended by adding at the end the following 

22 new subparagraph: 

23 ‘‘(E) CSEC PLANS.—In the case of a 

24 CSEC plan (as defined in section 210(f)(1)), 

25 the applicable dollar amount shall be $9.’’. 
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1 (B) CONFORMING AMENDMENT.—Subpara2 graph (A) of section 4006(a)(8) of such Act (29 

3 U.S.C. 1306(a)(8)) is amended by striking ‘‘(B) 

4 and (C)’’ and inserting ‘‘(B), (C), and (E)’’. 

5 TITLE III—OTHER BENEFITS 

6 SEC. 301. BENEFITS PROVIDED TO VOLUNTEER FIRE7 FIGHTERS AND EMERGENCY MEDICAL RE8 SPONDERS. 

9 (a) INCREASE IN DOLLAR LIMITATION ON QUALI10 FIED PAYMENTS.—Subparagraph (B) of section 

11 139B(c)(2) of the Internal Revenue Code of 1986 is 

12 amended by striking ‘‘$30’’ and inserting ‘‘$50’’. 

13 (b) EXTENSION.—Section 139B(d) of the Internal 

14 Revenue Code of 1986 is amended by striking ‘‘beginning 

15 after December 31, 2010.’’ and inserting ‘‘beginning— 

16 ‘‘(1) after December 31, 2010, and before Jan17 uary 1, 2020, or 

18 ‘‘(2) after December 31, 2020.’’. 

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

20 this section shall apply to taxable years beginning after 

21 December 31, 2019. 

22 SEC. 302. EXPANSION OF SECTION 529 PLANS. 

23 (a) DISTRIBUTIONS FOR CERTAIN EXPENSES ASSO24 CIATED WITH REGISTERED APPRENTICESHIP PRO25 GRAMS.—Section 529(c) of the Internal Revenue Code of 
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1 1986 is amended by adding at the end the following new 

2 paragraph: 

3 ‘‘(8) TREATMENT OF CERTAIN EXPENSES ASSO4 CIATED WITH REGISTERED APPRENTICESHIP PRO5 GRAMS.—Any reference in this subsection to the 

6 term ‘qualified higher education expense’ shall in7 clude a reference to expenses for fees, books, sup8 plies, and equipment required for the participation 

9 of a designated beneficiary in an apprenticeship pro10 gram registered and certified with the Secretary of 

11 Labor under section 1 of the National Apprentice12 ship Act (29 U.S.C. 50).’’. 

13 (b) DISTRIBUTIONS FOR QUALIFIED EDUCATION

14 LOAN REPAYMENTS.— 

15 (1) IN GENERAL.—Section 529(c) of such Code, 

16 as amended by subsection (a), is amended by adding 

17 at the end the following new paragraph: 

18 ‘‘(9) TREATMENT OF QUALIFIED EDUCATION

19 LOAN REPAYMENTS.— 

20 ‘‘(A) IN GENERAL.—Any reference in this 

21 subsection to the term ‘qualified higher edu22 cation expense’ shall include a reference to 

23 amounts paid as principal or interest on any 

24 qualified education loan (as defined in section 
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1 221(d)) of the designated beneficiary or a sib2 ling of the designated beneficiary. 

3 ‘‘(B) LIMITATION.—The amount of dis4 tributions treated as a qualified higher edu5 cation expense under this paragraph with re6 spect to the loans of any individual shall not ex7 ceed $10,000 (reduced by the amount of dis8 tributions so treated for all prior taxable years). 

9 ‘‘(C) SPECIAL RULES FOR SIBLINGS OF

10 THE DESIGNATED BENEFICIARY.— 

11 ‘‘(i) SEPARATE ACCOUNTING.—For 

12 purposes of subparagraph (B) and sub13 section (d), amounts treated as a qualified 

14 higher education expense with respect to 

15 the loans of a sibling of the designated 

16 beneficiary shall be taken into account 

17 with respect to such sibling and not with 

18 respect to such designated beneficiary. 

19 ‘‘(ii) SIBLING DEFINED.—For pur20 poses of this paragraph, the term ‘sibling’ 

21 means an individual who bears a relation22 ship to the designated beneficiary which is 

23 described in section 152(d)(2)(B).’’. 

24 (2) COORDINATION WITH DEDUCTION FOR STU25 DENT LOAN INTEREST.—Section 221(e)(1) of such 
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1 Code is amended by adding at the end the following: 

2 ‘‘The deduction otherwise allowable under subsection 

3 (a) (prior to the application of subsection (b)) to the 

4 taxpayer for any taxable year shall be reduced (but 

5 not below zero) by so much of the distributions 

6 treated as a qualified higher education expense 

7 under section 529(c)(9) with respect to loans of the 

8 taxpayer as would be includible in gross income 

9 under section 529(c)(3)(A) for such taxable year but 

10 for such treatment.’’. 

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

12 this section shall apply to distributions made after Decem13 ber 31, 2018. 

14 TITLE IV—REVENUE 

15 PROVISIONS 

16 SEC. 401. MODIFICATION OF REQUIRED DISTRIBUTION 

17 RULES FOR DESIGNATED BENEFICIARIES. 

18 (a) MODIFICATION OF RULES WHERE EMPLOYEE

19 DIES BEFORE ENTIRE DISTRIBUTION.— 

20 (1) IN GENERAL.—Section 401(a)(9) of the In21 ternal Revenue Code of 1986 is amended by adding 

22 at the end the following new subparagraph: 

23 ‘‘(H) SPECIAL RULES FOR CERTAIN DE24 FINED CONTRIBUTION PLANS.—In the case of a 

25 defined contribution plan, if an employee dies 
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1 before the distribution of the employee’s entire 

2 interest— 

3 ‘‘(i) IN GENERAL.—Except in the case 

4 of a beneficiary who is not a designated 

5 beneficiary, subparagraph (B)(ii)— 

6 ‘‘(I) shall be applied by sub7 stituting ‘10 years’ for ‘5 years’, and 

8 ‘‘(II) shall apply whether or not 

9 distributions of the employee’s inter10 ests have begun in accordance with 

11 subparagraph (A). 

12 ‘‘(ii) EXCEPTION ONLY FOR ELIGIBLE

13 DESIGNATED BENEFICIARIES.—Subpara14 graph (B)(iii) shall apply only in the case 

15 of an eligible designated beneficiary. 

16 ‘‘(iii) RULES UPON DEATH OF ELIGI17 BLE DESIGNATED BENEFICIARY.—If an el18 igible designated beneficiary dies before the 

19 portion of the employee’s interest to which 

20 this subparagraph applies is entirely dis21 tributed, the exception under clause (iii) 

22 shall not apply to any beneficiary of such 

23 eligible designated beneficiary and the re24 mainder of such portion shall be distrib-
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1 uted within 10 years after the death of 

2 such eligible designated beneficiary. 

3 ‘‘(iv) APPLICATION TO CERTAIN ELI4 GIBLE RETIREMENT PLANS.—For purposes 

5 of applying the provisions of this subpara6 graph in determining amounts required to 

7 be distributed pursuant to this paragraph, 

8 all eligible retirement plans (as defined in 

9 section 402(c)(8)(B), other than a defined 

10 benefit plan described in clause (iv) or (v) 

11 thereof or a qualified trust which is a part 

12 of a defined benefit plan) shall be treated 

13 as a defined contribution plan.’’. 

14 (2) DEFINITION OF ELIGIBLE DESIGNATED

15 BENEFICIARY.—Section 401(a)(9)(E) of such Code 

16 is amended to read as follows: 

17 ‘‘(E) DEFINITIONS AND RULES RELATING

18 TO DESIGNATED BENEFICIARY.—For purposes 

19 of this paragraph— 

20 ‘‘(i) DESIGNATED BENEFICIARY.—The 

21 term ‘designated beneficiary’ means any 

22 individual designated as a beneficiary by 

23 the employee. 

24 ‘‘(ii) ELIGIBLE DESIGNATED BENE25 FICIARY.—The term ‘eligible designated 
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1 beneficiary’ means, with respect to any em2 ployee, any designated beneficiary who is— 

3 ‘‘(I) the surviving spouse of the 

4 employee, 

5 ‘‘(II) subject to clause (iii), a 

6 child of the employee who has not 

7 reached majority (within the meaning 

8 of subparagraph (F)), 

9 ‘‘(III) disabled (within the mean10 ing of section 72(m)(7)), 

11 ‘‘(IV) a chronically ill individual 

12 (within the meaning of section 

13 7702B(c)(2), except that the require14 ments of subparagraph (A)(i) thereof 

15 shall only be treated as met if there is 

16 a certification that, as of such date, 

17 the period of inability described in 

18 such subparagraph with respect to the 

19 individual is an indefinite one which is 

20 reasonably expected to be lengthy in 

21 nature), or 

22 ‘‘(V) an individual not described 

23 in any of the preceding subclauses 

24 who is not more than 10 years young25 er than the employee. 
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1 ‘‘(iii) SPECIAL RULE FOR CHIL2 DREN.—Subject to subparagraph (F), an 

3 individual described in clause (ii)(II) shall 

4 cease to be an eligible designated bene5 ficiary as of the date the individual reaches 

6 majority and any remainder of the portion 

7 of the individual’s interest to which sub8 paragraph (H)(ii) applies shall be distrib9 uted within 10 years after such date. 

10 ‘‘(iv) TIME FOR DETERMINATION OF

11 ELIGIBLE DESIGNATED BENEFICIARY.— 

12 The determination of whether a designated 

13 beneficiary is an eligible designated bene14 ficiary shall be made as of the date of 

15 death of the employee.’’. 

16 (3) EFFECTIVE DATES.— 

17 (A) IN GENERAL.—Except as provided in 

18 this paragraph and paragraphs (4) and (5), the 

19 amendments made by this subsection shall 

20 apply to distributions with respect to employees 

21 who die after December 31, 2019. 

22 (B) COLLECTIVE BARGAINING EXCEP23 TION.—In the case of a plan maintained pursu24 ant to 1 or more collective bargaining agree25 ments between employee representatives and 1 
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1 or more employers ratified before the date of 

2 enactment of this Act, the amendments made 

3 by this subsection shall apply to distributions 

4 with respect to employees who die in calendar 

5 years beginning after the earlier of— 

6 (i) the later of— 

7 (I) the date on which the last of 

8 such collective bargaining agreements 

9 terminates (determined without re10 gard to any extension thereof agreed 

11 to on or after the date of the enact12 ment of this Act), or 

13 (II) December 31, 2019, or 

14 (ii) December 31, 2021. 

15 For purposes of clause (i)(I), any plan amend16 ment made pursuant to a collective bargaining 

17 agreement relating to the plan which amends 

18 the plan solely to conform to any requirement 

19 added by this section shall not be treated as a 

20 termination of such collective bargaining agree21 ment. 

22 (C) GOVERNMENTAL PLANS.—In the case 

23 of a governmental plan (as defined in section 

24 414(d) of the Internal Revenue Code of 1986), 

25 subparagraph (A) shall be applied by sub-
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1 stituting ‘‘December 31, 2021’’ for ‘‘December 

2 31, 2019’’. 

3 (4) EXCEPTION FOR CERTAIN EXISTING ANNU4 ITY CONTRACTS.— 

5 (A) IN GENERAL.—The amendments made 

6 by this subsection shall not apply to a qualified 

7 annuity which is a binding annuity contract in 

8 effect on the date of enactment of this Act and 

9 at all times thereafter. 

10 (B) QUALIFIED ANNUITY.—For purposes 

11 of this paragraph, the term ‘‘qualified annuity’’ 

12 means, with respect to an employee, an annu13 ity— 

14 (i) which is a commercial annuity (as 

15 defined in section 3405(e)(6) of the Inter16 nal Revenue Code of 1986); 

17 (ii) under which the annuity payments 

18 are made over the life of the employee or 

19 over the joint lives of such employee and a 

20 designated beneficiary (or over a period 

21 not extending beyond the life expectancy of 

22 such employee or the joint life expectancy 

23 of such employee and a designated bene24 ficiary) in accordance with the regulations 

25 described in section 401(a)(9)(A)(ii) of 
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1 such Code (as in effect before such amend2 ments) and which meets the other require3 ments of section 401(a)(9) of such Code 

4 (as so in effect) with respect to such pay5 ments; and 

6 (iii) with respect to which— 

7 (I) annuity payments to the em8 ployee have begun before the date of 

9 enactment of this Act, and the em10 ployee has made an irrevocable elec11 tion before such date as to the method 

12 and amount of the annuity payments 

13 to the employee or any designated 

14 beneficiaries; or 

15 (II) if subclause (I) does not 

16 apply, the employee has made an ir17 revocable election before the date of 

18 enactment of this Act as to the meth19 od and amount of the annuity pay20 ments to the employee or any des21 ignated beneficiaries. 

22 (5) EXCEPTION FOR CERTAIN BENE23 FICIARIES.— 

24 (A) IN GENERAL.—If an employee dies be25 fore the effective date, then, in applying the 
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1 amendments made by this subsection to such 

2 employee’s designated beneficiary who dies after 

3 such date— 

4 (i) such amendments shall apply to 

5 any beneficiary of such designated bene6 ficiary; and 

7 (ii) the designated beneficiary shall be 

8 treated as an eligible designated bene9 ficiary for purposes of applying section 

10 401(a)(9)(H)(ii) of the Internal Revenue 

11 Code of 1986 (as in effect after such 

12 amendments). 

13 (B) EFFECTIVE DATE.—For purposes of 

14 this paragraph, the term ‘‘effective date’’ means 

15 the first day of the first calendar year to which 

16 the amendments made by this subsection apply 

17 to a plan with respect to employees dying on or 

18 after such date. 

19 (b) PROVISIONS RELATING TO PLAN AMEND20 MENTS.— 

21 (1) IN GENERAL.—If this subsection applies to 

22 any plan amendment— 

23 (A) such plan shall be treated as being op24 erated in accordance with the terms of the plan 
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1 during the period described in paragraph 

2 (2)(B)(i); and 

3 (B) except as provided by the Secretary of 

4 the Treasury, such plan shall not fail to meet 

5 the requirements of section 411(d)(6) of the In6 ternal Revenue Code of 1986 and section 

7 204(g) of the Employee Retirement Income Se8 curity Act of 1974 by reason of such amend9 ment. 

10 (2) AMENDMENTS TO WHICH SUBSECTION AP11 PLIES.— 

12 (A) IN GENERAL.—This subsection shall 

13 apply to any amendment to any plan or which 

14 is made— 

15 (i) pursuant to any amendment made 

16 by this section or pursuant to any regula17 tion issued by the Secretary of the Treas18 ury under this section or such amend19 ments; and 

20 (ii) on or before the last day of the 

21 first plan year beginning after December 

22 31, 2021, or such later date as the Sec23 retary of the Treasury may prescribe. 

24 In the case of a governmental or collectively 

25 bargained plan to which subparagraph (B) or 
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1 (C) of subsection (a)(4) applies, clause (ii) shall 

2 be applied by substituting the date which is 2 

3 years after the date otherwise applied under 

4 such clause. 

5 (B) CONDITIONS.—This subsection shall 

6 not apply to any amendment unless— 

7 (i) during the period— 

8 (I) beginning on the date the leg9 islative or regulatory amendment de10 scribed in paragraph (1)(A) takes ef11 fect (or in the case of a plan amend12 ment not required by such legislative 

13 or regulatory amendment, the effec14 tive date specified by the plan); and 

15 (II) ending on the date described 

16 in subparagraph (A)(ii) (or, if earlier, 

17 the date the plan amendment is 

18 adopted), 

19 the plan is operated as if such plan amend20 ment were in effect; and 

21 (ii) such plan amendment applies 

22 retroactively for such period. 
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1 SEC. 402. INCREASE IN PENALTY FOR FAILURE TO FILE. 

2 (a) IN GENERAL.—The second sentence of subsection 

3 (a) of section 6651 of the Internal Revenue Code of 1986 

4 is amended by striking ‘‘$205’’ and inserting ‘‘$400’’. 

5 (b) INFLATION ADJUSTMENT.—Section 6651(j)(1) of 

6 such Code is amended by striking ‘‘$205’’ and inserting 

7 ‘‘$400’’. 

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

9 this section shall apply to returns the due date for which 

10 (including extensions) is after December 31, 2019. 

11 SEC. 403. INCREASED PENALTIES FOR FAILURE TO FILE 

12 RETIREMENT PLAN RETURNS. 

13 (a) IN GENERAL.—Subsection (e) of section 6652 of 

14 the Internal Revenue Code of 1986 is amended— 

15 (1) by striking ‘‘$25’’ and inserting ‘‘$250’’; 

16 and 

17 (2) by striking ‘‘$15,000’’ and inserting 

18 ‘‘$150,000’’. 

19 (b) ANNUAL REGISTRATION STATEMENT AND NOTI20 FICATION OF CHANGES.—Subsection (d) of section 6652 

21 of the Internal Revenue Code of 1986 is amended— 

22 (1) by striking ‘‘$1’’ both places it appears in 

23 paragraphs (1) and (2) and inserting ‘‘$10’’; 

24 (2) by striking ‘‘$5,000’’ in paragraph (1) and 

25 inserting ‘‘$50,000’’; and 
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1 (3) by striking ‘‘$1,000’’ in paragraph (2) and 

2 inserting ‘‘$10,000’’. 

3 (c) FAILURE TO PROVIDE NOTICE.—Subsection (h) 

4 of section 6652 of the Internal Revenue Code of 1986 is 

5 amended— 

6 (1) by striking ‘‘$10’’ and inserting ‘‘$100’’; 

7 and 

8 (2) by striking ‘‘$5,000’’ and inserting 

9 ‘‘$50,000’’. 

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

11 this section shall apply to returns, statements, and notifi12 cations required to be filed, and notices required to be pro13 vided, after December 31, 2019. 

14 SEC. 404. INCREASE INFORMATION SHARING TO ADMIN15 ISTER EXCISE TAXES. 

16 (a) IN GENERAL.—Section 6103(o) of the Internal 

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

18 the following new paragraph: 

19 ‘‘(3) TAXES IMPOSED BY SECTION 4481.—Re20 turns and return information with respect to taxes 

21 imposed by section 4481 shall be open to inspection 

22 by or disclosure to officers and employees of United 

23 States Customs and Border Protection of the De24 partment of Homeland Security whose official duties 
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1 require such inspection or disclosure for purposes of 

2 administering such section.’’. 

3 (b) CONFORMING AMENDMENTS.—Paragraph (4) of 

4 section 6103(p) of the Internal Revenue Code of 1986 is 

5 amended by striking ‘‘or (o)(1)(A)’’ each place it appears 

6 and inserting ‘‘, (o)(1)(A), or (o)(3)’’. 

7 TITLE V—TAX RELIEF FOR 

8 CERTAIN CHILDREN 

9 SEC. 501. MODIFICATION OF RULES RELATING TO THE TAX10 ATION OF UNEARNED INCOME OF CERTAIN 

11 CHILDREN. 

12 (a) IN GENERAL.—Section 1(j) of the Internal Rev13 enue Code of 1986 is amended by striking paragraph (4). 

14 (b) COORDINATION WITH ALTERNATIVE MINIMUM

15 TAX.—Section 55(d)(4)(A) of the Internal Revenue Code 

16 of 1986 is amended by striking ‘‘and’’ at the end of clause 

17 (i)(II), by striking the period at the end of clause (ii)(III) 

18 and inserting ‘‘, and’’, and by adding at the end the fol19 lowing new clause: 

20 ‘‘(iii) subsection (j) of section 59 shall 

21 not apply.’’. 

22 (c) EFFECTIVE DATE.— 

23 (1) IN GENERAL.—Except as otherwise pro24 vided in this subsection, the amendment made by 
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1 subsection (a) shall apply to taxable years beginning 

2 after December 31, 2018. 

3 (2) COORDINATION WITH ALTERNATIVE MIN4 IMUM TAX.—The amendment made by subsection 

5 (b) shall apply to taxable years beginning after De6 cember 31, 2017. 

7 (3) ELECTIVE RETROACTIVE APPLICATION.—In 

8 the case of a taxpayer who elects the application of 

9 this paragraph (at such time and in such manner as 

10 the Secretary of the Treasury (or the Secretary’s 

11 designee) may provide), the amendment made by 

12 subsection (a) shall apply to taxable years beginning 

13 after December 31, 2017. 

Passed the House of Representatives May 23, 2019. 

Attest: 

Clerk. 

116TH CONGRESS 

1ST SESSION H. R. 1994 

AN ACT 

To amend the Internal Revenue Code of 1986 to 

poses. encourage retirement savings, and for other pur-