I 

116TH CONGRESS 

1ST SESSION H. R. 1994 

To amend the Internal Revenue Code of 1986 to encourage retirement 

savings, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

MARCH 29, 2019 

Mr. NEAL (for himself, Mr. BRADY, Mr. KIND, and Mr. KELLY of Pennsylvania) introduced the following bill; which was referred to the Committee 

on Ways and Means, and in addition to the Committee on Education and 

Labor, for a period to be subsequently determined by the Speaker, in 

each case for consideration of such provisions as fall within the jurisdiction of the committee concerned 

A BILL 

To amend the Internal Revenue Code of 1986 to 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, 

3 SECTION 1. SHORT TITLE, ETC. 

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

5 ‘‘Setting Every Community Up for Retirement Enhance6 ment Act of 2019’’. 

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

8 this Act is as follows: 


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Sec. 1. Short title, etc. 

TITLE I—EXPANDING AND PRESERVING RETIREMENT SAVINGS 

Sec. 101. Increase in 10 percent cap for automatic enrollment safe harbor after 

1st plan year. 

Sec. 102. Rules relating to election of safe harbor 401(k) status. 

Sec. 103. Increase in credit limitation for small employer pension plan startup 

costs. 

Sec. 104. Small employer automatic enrollment credit. 

Sec. 105. Certain taxable non-tuition fellowship and stipend payments treated 

as compensation for IRA purposes. 

Sec. 106. Repeal of maximum age for traditional IRA contributions. 

Sec. 107. Qualified employer plans prohibited from making loans through credit 

cards and other similar arrangements. 

Sec. 108. Portability of lifetime income options. 

Sec. 109. Treatment of custodial accounts on termination of section 403(b) 

plans. 

Sec. 110. Clarification of retirement income account rules relating to churchcontrolled organizations. 

Sec. 111. 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. 112. Penalty-free withdrawals from retirement plans for individuals in case 

of birth of child or adoption. 

Sec. 113. Increase in age for required beginning date for mandatory distributions. 

Sec. 114. Special rules for minimum funding standards for community newspaper plans. 

Sec. 115. 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. 

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. Modifications 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. 


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1 TITLE I—EXPANDING AND PRE2 SERVING RETIREMENT SAV3 INGS 

4 SEC. 101. INCREASE IN 10 PERCENT CAP FOR AUTOMATIC 

5 ENROLLMENT SAFE HARBOR AFTER 1ST 

6 PLAN YEAR. 

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

8 Internal Revenue Code of 1986 is amended by striking 

9 ‘‘does not exceed 10 percent’’ and inserting ‘‘does not ex10 ceed 15 percent (10 percent during the period described 

11 in subclause (I))’’. 

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

13 this section shall apply to plan years beginning after De14 cember 31, 2019. 

15 SEC. 102. RULES RELATING TO ELECTION OF SAFE HARBOR 

16 401(k) STATUS. 

17 (a) LIMITATION OF ANNUAL SAFE HARBOR NOTICE

18 TO MATCHING CONTRIBUTION PLANS.— 

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

20 401(k)(12) of the Internal Revenue Code of 1986 is 

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

22 that follows and inserting ‘‘if such arrangement— 

23 ‘‘(i) meets the contribution require24 ments of subparagraph (B) and the notice 

25 requirements of subparagraph (D), or 


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1 ‘‘(ii) meets the contribution require2 ments of subparagraph (C).’’. 

3 (2) AUTOMATIC CONTRIBUTION ARRANGE4 MENTS.—Subparagraph (B) of section 401(k)(13) of 

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

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

7 arrangement— 

8 ‘‘(A) which is described in subparagraph 

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

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

11 ‘‘(B) which is described in subparagraph 

12 (D)(i)(II) and meets the applicable require13 ments of subparagraphs (C) and (D).’’. 

14 (b) NONELECTIVE CONTRIBUTIONS.—Section 

15 401(k)(12) of the Internal Revenue Code of 1986 is 

16 amended by redesignating subparagraph (F) as subpara17 graph (G), and by inserting after subparagraph (E) the 

18 following new subparagraph: 

19 ‘‘(F) TIMING OF PLAN AMENDMENT FOR

20 EMPLOYER MAKING NONELECTIVE CONTRIBU21 TIONS.— 

22 ‘‘(i) IN GENERAL.—Except as pro23 vided in clause (ii), a plan may be amend24 ed after the beginning of a plan year to 

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1 graph (C) shall apply to the arrangement 

2 for the plan year, but only if the amend3 ment is adopted— 

4 ‘‘(I) at any time before the 30th 

5 day before the close of the plan year, 

6 or 

7 ‘‘(II) at any time before the last 

8 day under paragraph (8)(A) for dis9 tributing excess contributions for the 

10 plan year. 

11 ‘‘(ii) EXCEPTION WHERE PLAN PRO12 VIDED FOR MATCHING CONTRIBUTIONS.— 

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

14 if the plan provided at any time during the 

15 plan year that the requirements of sub16 paragraph (B) or paragraph (13)(D)(i)(I) 

17 applied to the plan year. 

18 ‘‘(iii) 4-PERCENT CONTRIBUTION RE19 QUIREMENT.—Clause (i)(II) shall not 

20 apply to an arrangement unless the 

21 amount of the contributions described in 

22 subparagraph (C) which the employer is 

23 required to make under the arrangement 

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1 ployee is an amount equal to at least 4 

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

3 (c) AUTOMATIC CONTRIBUTION ARRANGEMENTS.— 

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

5 is amended by adding at the end the following: 

6 ‘‘(F) TIMING OF PLAN AMENDMENT FOR

7 EMPLOYER MAKING NONELECTIVE CONTRIBU8 TIONS.— 

9 ‘‘(i) IN GENERAL.—Except as pro10 vided in clause (ii), a plan may be amend11 ed after the beginning of a plan year to 

12 provide that the requirements of subpara13 graph (D)(i)(II) shall apply to the arrange14 ment for the plan year, but only if the 

15 amendment is adopted— 

16 ‘‘(I) at any time before the 30th 

17 day before the close of the plan year, 

18 or 

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

20 day under paragraph (8)(A) for dis21 tributing excess contributions for the 

22 plan year. 

23 ‘‘(ii) EXCEPTION WHERE PLAN PRO24 VIDED FOR MATCHING CONTRIBUTIONS.— 

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


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1 if the plan provided at any time during the 

2 plan year that the requirements of sub3 paragraph (D)(i)(I) or paragraph (12)(B) 

4 applied to the plan year. 

5 ‘‘(iii) 4-PERCENT CONTRIBUTION RE6 QUIREMENT.—Clause (i)(II) shall not 

7 apply to an arrangement unless the 

8 amount of the contributions described in 

9 subparagraph (D)(i)(II) which the em10 ployer is required to make under the ar11 rangement for the plan year with respect 

12 to any employee is an amount equal to at 

13 least 4 percent of the employee’s com14 pensation.’’. 

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

16 this section shall apply to plan years beginning after De17 cember 31, 2019. 

18 SEC. 103. INCREASE IN CREDIT LIMITATION FOR SMALL 

19 EMPLOYER PENSION PLAN STARTUP COSTS. 

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

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

22 as follows: 

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

24 taxable years immediately following the first credit 

25 year, the greater of— 


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1 ‘‘(A) $500, or 

2 ‘‘(B) the lesser of— 

3 ‘‘(i) $250 for each employee of the eli4 gible employer who is not a highly com5 pensated employee (as defined in section 

6 414(q)) and who is eligible to participate 

7 in the eligible employer plan maintained by 

8 the eligible employer, or 

9 ‘‘(ii) $5,000, and’’. 

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

11 this section shall apply to taxable years beginning after 

12 December 31, 2019. 

13 SEC. 104. SMALL EMPLOYER AUTOMATIC ENROLLMENT 

14 CREDIT. 

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

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

18 section: 

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

20 SAVINGS OPTIONS PROVIDED BY SMALL EM21 PLOYERS. 

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

23 the case of an eligible employer, the retirement auto-en24 rollment credit determined under this section for any tax25 able year is an amount equal to— 


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

2 the credit period, and 

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

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

5 (a)— 

6 ‘‘(1) IN GENERAL.—The credit period with re7 spect to any eligible employer is the 3-taxable-year 

8 period beginning with the first taxable year for 

9 which the employer includes an eligible automatic 

10 contribution arrangement (as defined in section 

11 414(w)(3)) in a qualified employer plan (as defined 

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

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

14 taxable year with respect to an employer shall be 

15 treated as occurring within the credit period unless 

16 the arrangement described in paragraph (1) is in17 cluded in the plan for such year. 

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

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

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

21 (b) CREDIT TO BE PART OF GENERAL BUSINESS

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

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

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


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1 end of paragraph (32) and inserting ‘‘, plus’’, and by add2 ing at the end the following new paragraph: 

3 ‘‘(33) in the case of an eligible employer (as de4 fined in section 45T(c)), the retirement auto-enroll5 ment credit determined under section 45T(a).’’. 

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

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

8 of the Internal Revenue Code of 1986 is amended by in9 serting after the item relating to section 45S the following 

10 new item: 

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

small employers.’’. 

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

12 this section shall apply to taxable years beginning after 

13 December 31, 2019. 

14 SEC. 105. CERTAIN TAXABLE NON-TUITION FELLOWSHIP 

15 AND STIPEND PAYMENTS TREATED AS COM16 PENSATION FOR IRA PURPOSES. 

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

18 of the Internal Revenue Code of 1986 is amended by add19 ing at the end the following: ‘‘The term ‘compensation’ 

20 shall include any amount which is included in the individ21 ual’s gross income and paid to the individual to aid the 

22 individual in the pursuit of graduate or postdoctoral 

23 study.’’. 


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

2 this section shall apply to taxable years beginning after 

3 December 31, 2019. 

4 SEC. 106. REPEAL OF MAXIMUM AGE FOR TRADITIONAL IRA 

5 CONTRIBUTIONS. 

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

7 of the Internal Revenue Code of 1986 is repealed. 

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

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

10 amended by striking paragraph (4) and by redesignating 

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

12 (6), respectively. 

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

14 this section shall apply to contributions made for taxable 

15 years beginning after December 31, 2019. 

16 SEC. 107. QUALIFIED EMPLOYER PLANS PROHIBITED FROM 

17 MAKING LOANS THROUGH CREDIT CARDS 

18 AND OTHER SIMILAR ARRANGEMENTS. 

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

20 the Internal Revenue Code of 1986 is amended by redesig21 nating subparagraph (D) as subparagraph (E) and by in22 serting after subparagraph (C) the following new subpara23 graph: 

24 ‘‘(D) PROHIBITION OF LOANS THROUGH

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1 MENTS.—Subparagraph (A) shall not apply to 

2 any loan which is made through the use of any 

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

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

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

6 of the enactment of this Act. 

7 SEC. 108. PORTABILITY OF LIFETIME INCOME OPTIONS. 

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

9 the Internal Revenue Code of 1986 is amended by insert10 ing after paragraph (37) the following new paragraph: 

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

12 ‘‘(A) IN GENERAL.—Except as may be oth13 erwise provided by regulations, a trust forming 

14 part of a defined contribution plan shall not be 

15 treated as failing to constitute a qualified trust 

16 under this section solely by reason of allowing— 

17 ‘‘(i) qualified distributions of a life18 time income investment, or 

19 ‘‘(ii) distributions of a lifetime income 

20 investment in the form of a qualified plan 

21 distribution annuity contract, 

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

23 date on which such lifetime income investment 

24 is no longer authorized to be held as an invest25 ment option under the plan. 


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

2 subsection— 

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

4 means a direct trustee-to-trustee transfer 

5 described in paragraph (31)(A) to an eligi6 ble retirement plan (as defined in section 

7 402(c)(8)(B)), 

8 ‘‘(ii) the term ‘lifetime income invest9 ment’ means an investment option which is 

10 designed to provide an employee with elec11 tion rights— 

12 ‘‘(I) which are not uniformly 

13 available with respect to other invest14 ment options under the plan, and 

15 ‘‘(II) which are to a lifetime in16 come feature available through a con17 tract or other arrangement offered 

18 under the plan (or under another eli19 gible retirement plan (as so defined), 

20 if paid by means of a direct trustee21 to-trustee transfer described in para22 graph (31)(A) to such other eligible 

23 retirement plan), 

24 ‘‘(iii) the term ‘lifetime income fea25 ture’ means— 


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1 ‘‘(I) a feature which guarantees a 

2 minimum level of income annually (or 

3 more frequently) for at least the re4 mainder of the life of the employee or 

5 the joint lives of the employee and the 

6 employee’s designated beneficiary, or 

7 ‘‘(II) an annuity payable on be8 half of the employee under which pay9 ments are made in substantially equal 

10 periodic payments (not less frequently 

11 than annually) over the life of the em12 ployee or the joint lives of the em13 ployee and the employee’s designated 

14 beneficiary, and 

15 ‘‘(iv) the term ‘qualified plan distribu16 tion annuity contract’ means an annuity 

17 contract purchased for a participant and 

18 distributed to the participant by a plan or 

19 contract described in subparagraph (B) of 

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

21 clauses (i) and (ii) thereof).’’. 

22 (b) CASH OR DEFERRED ARRANGEMENT.— 

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

24 401(k)(2)(B) of the Internal Revenue Code of 1986 

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


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

2 and inserting ‘‘or’’, and by adding at the end the fol3 lowing new subclause: 

4 ‘‘(VI) except as may be otherwise 

5 provided by regulations, with respect 

6 to amounts invested in a lifetime in7 come investment (as defined in sub8 section (a)(38)(B)(ii)), the date that 

9 is 90 days prior to the date that such 

10 lifetime income investment may no 

11 longer be held as an investment option 

12 under the arrangement, and’’. 

13 (2) DISTRIBUTION REQUIREMENT.—Subpara14 graph (B) of section 401(k)(2) of such Code, as 

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

16 ‘‘and’’ at the end of clause (i), by striking the semi17 colon at the end of clause (ii) and inserting ‘‘, and’’, 

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

19 ‘‘(iii) except as may be otherwise pro20 vided by regulations, in the case of 

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

22 distributed only in the form of a qualified 

23 distribution (as defined in subsection 

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1 tion annuity contract (as defined in sub2 section (a)(38)(B)(iv)),’’. 

3 (c) SECTION 403(b) PLANS.— 

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

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

6 is amended by striking ‘‘or’’ at the end of subpara7 graph (B), by striking the period at the end of sub8 paragraph (C) and inserting ‘‘, or’’, and by inserting 

9 after subparagraph (C) the following new subpara10 graph: 

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

12 by regulations, with respect to amounts invested 

13 in a lifetime income investment (as defined in 

14 section 401(a)(38)(B)(ii))— 

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

16 days prior to the date that such lifetime 

17 income investment may no longer be held 

18 as an investment option under the con19 tract, and 

20 ‘‘(ii) in the form of a qualified dis21 tribution (as defined in section 

22 401(a)(38)(B)(i)) or a qualified plan dis23 tribution annuity contract (as defined in 

24 section 401(a)(38)(B)(iv)).’’. 


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

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

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

4 the amounts are to be invested in regulated invest5 ment company stock to be held in that custodial ac6 count, and under the custodial account— 

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

8 made available to any distributee (unless 

9 such amount is a distribution to which sec10 tion 72(t)(2)(G) applies) before— 

11 ‘‘(I) the employee dies, 

12 ‘‘(II) the employee attains age 

591 13 ⁄2, 

14 ‘‘(III) the employee has a sever15 ance from employment, 

16 ‘‘(IV) the employee becomes dis17 abled (within the meaning of section 

18 72(m)(7)), 

19 ‘‘(V) in the case of contributions 

20 made pursuant to a salary reduction 

21 agreement (within the meaning of sec22 tion 3121(a)(5)(D)), the employee en23 counters financial hardship, or 

24 ‘‘(VI) except as may be otherwise 

25 provided by regulations, with respect 


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1 to amounts invested in a lifetime in2 come investment (as defined in section 

3 401(a)(38)(B)(ii)), the date that is 90 

4 days prior to the date that such life5 time income investment may no longer 

6 be held as an investment option under 

7 the contract, and 

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

9 in clause (i)(VI), such amounts will be dis10 tributed only in the form of a qualified dis11 tribution (as defined in section 

12 401(a)(38)(B)(i)) or a qualified plan dis13 tribution annuity contract (as defined in 

14 section 401(a)(38)(B)(iv)).’’. 

15 (d) ELIGIBLE DEFERRED COMPENSATION PLANS.— 

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

17 457(d)(1) of the Internal Revenue Code of 1986 is 

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

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

20 adding after clause (iii) the following: 

21 ‘‘(iv) except as may be otherwise pro22 vided by regulations, in the case of a plan 

23 maintained by an employer described in 

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

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1 vestment (as defined in section 

2 401(a)(38)(B)(ii)), the date that is 90 

3 days prior to the date that such lifetime 

4 income investment may no longer be held 

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

6 (2) DISTRIBUTION REQUIREMENT.—Paragraph 

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

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

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

10 and inserting ‘‘, and’’, and by inserting after sub11 paragraph (C) the following new subparagraph: 

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

13 by regulations, in the case of amounts described 

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

15 distributed only in the form of a qualified dis16 tribution (as defined in section 

17 401(a)(38)(B)(i)) or a qualified plan distribu18 tion annuity contract (as defined in section 

19 401(a)(38)(B)(iv)).’’. 

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

21 this section shall apply to plan years beginning after De22 cember 31, 2019. 


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1 SEC. 109. TREATMENT OF CUSTODIAL ACCOUNTS ON TER2 MINATION OF SECTION 403(b) PLANS. 

3 Not later than six months after the date of enactment 

4 of this Act, the Secretary of the Treasury shall issue guid5 ance to provide that, if an employer terminates the plan 

6 under which amounts are contributed to a custodial ac7 count under subparagraph (A) of section 403(b)(7), the 

8 plan administrator or custodian may distribute an indi9 vidual custodial account in kind to a participant or bene10 ficiary of the plan and the distributed custodial account 

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

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

13 the treatment of fully-paid individual annuity contracts 

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

15 paid to the participant or beneficiary. The guidance shall 

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

17 distributed custodial account is generally maintained if the 

18 custodial account thereafter adheres to the requirements 

19 of section 403(b) that are in effect at the time of the dis20 tribution of the account and (ii) that a custodial account 

21 would not be considered distributed to the participant or 

22 beneficiary if the employer has any material retained 

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

24 treated as retaining material rights simply because the 

25 custodial account was originally opened under a group 


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1 contract). Such guidance shall be retroactively effective for 

2 taxable years beginning after December 31, 2008. 

3 SEC. 110. CLARIFICATION OF RETIREMENT INCOME AC4 COUNT RULES RELATING TO CHURCH-CON5 TROLLED ORGANIZATIONS. 

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

7 403(b)(9) of the Internal Revenue Code of 1986 is amend8 ed by inserting ‘‘(including an employee described in sec9 tion 414(e)(3)(B))’’ after ‘‘employee described in para10 graph (1)’’. 

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

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

13 after the date of the enactment of this Act. 

14 SEC. 111. QUALIFIED CASH OR DEFERRED ARRANGEMENTS 

15 MUST ALLOW LONG-TERM EMPLOYEES 

16 WORKING MORE THAN 500 BUT LESS THAN 

17 1,000 HOURS PER YEAR TO PARTICIPATE. 

18 (a) PARTICIPATION REQUIREMENT.— 

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

20 Internal Revenue Code of 1986 is amended to read 

21 as follows: 

22 ‘‘(D) which does not require, as a condi23 tion of participation in the arrangement, that 

24 an employee complete a period of service with 

25 the employer (or employers) maintaining the 


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1 plan extending beyond the close of the earlier 

2 of— 

3 ‘‘(i) the period permitted under sec4 tion 410(a)(1) (determined without regard 

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

6 ‘‘(ii) subject to the provisions of para7 graph (15), the first period of 3 consecu8 tive 12-month periods during each of which 

9 the employee has at least 500 hours of 

10 service.’’. 

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

12 Code is amended by adding at the end the following 

13 new paragraph: 

14 ‘‘(15) SPECIAL RULES FOR PARTICIPATION RE15 QUIREMENT FOR LONG-TERM, PART-TIME WORK16 ERS.—For purposes of paragraph (2)(D)(ii)— 

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

18 Paragraph (2)(D)(ii) shall not apply to an em19 ployee unless the employee has met the require20 ment of section 410(a)(1)(A)(i) by the close of 

21 the last of the 12-month periods described in 

22 such paragraph. 

23 ‘‘(B) NONDISCRIMINATION AND TOP24 HEAVY RULES NOT TO APPLY.— 


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1 ‘‘(i) NONDISCRIMINATION RULES.—In 

2 the case of employees who are eligible to 

3 participate in the arrangement solely by 

4 reason of paragraph (2)(D)(ii)— 

5 ‘‘(I) notwithstanding subsection 

6 (a)(4), an employer shall not be re7 quired to make nonelective or match8 ing contributions on behalf of such 

9 employees even if such contributions 

10 are made on behalf of other employees 

11 eligible to participate in the arrange12 ment, and 

13 ‘‘(II) an employer may elect to 

14 exclude such employees from the ap15 plication of subsection (a)(4), para16 graphs (3), (12), and (13), subsection 

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

18 ‘‘(ii) TOP-HEAVY RULES.—An em19 ployer may elect to exclude all employees 

20 who are eligible to participate in a plan 

21 maintained by the employer solely by rea22 son of paragraph (2)(D)(ii) from the appli23 cation of the vesting and benefit require24 ments under subsections (b) and (c) of sec25 tion 416. 


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1 ‘‘(iii) VESTING.—For purposes of de2 termining whether an employee described 

3 in clause (i) has a nonforfeitable right to 

4 employer contributions (other than con5 tributions described in paragraph 

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

7 12-month period for which the employee 

8 has at least 500 hours of service shall be 

9 treated as a year of service. 

10 ‘‘(iv) EMPLOYEES WHO BECOME

11 FULL-TIME EMPLOYEES.—This subpara12 graph shall cease to apply to any employee 

13 as of the first plan year beginning after 

14 the plan year in which the employee meets 

15 the requirements of section 

16 410(a)(1)(A)(ii) without regard to para17 graph (2)(D)(ii). 

18 ‘‘(C) EXCEPTION FOR EMPLOYEES UNDER

19 COLLECTIVELY BARGAINED PLANS, ETC.—Para20 graph (2)(D)(ii) shall not apply to employees 

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

22 ‘‘(D) SPECIAL RULES.— 

23 ‘‘(i) TIME OF PARTICIPATION.—The 

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

25 employee eligible to participate in an arVerDate Sep 11 2014 00:52 Apr 13, 2019 Jkt 089200 PO 00000 Frm 00024 Fmt 6652 Sfmt 6201 E:\BILLS\H1994.IH H1994

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1 rangement solely by reason of paragraph 

2 (2)(D)(ii). 

3 ‘‘(ii) 12-MONTH PERIODS.—12-month 

4 periods shall be determined in the same 

5 manner as under the last sentence of sec6 tion 410(a)(3)(A).’’. 

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

8 this section shall apply to plan years beginning after De9 cember 31, 2020, except that, for purposes of section 

10 401(k)(2)(D)(ii) of the Internal Revenue Code of 1986 (as 

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

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

13 SEC. 112. PENALTY-FREE WITHDRAWALS FROM RETIRE14 MENT PLANS FOR INDIVIDUALS IN CASE OF 

15 BIRTH OF CHILD OR ADOPTION. 

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

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

18 the following new subparagraph: 

19 ‘‘(H) DISTRIBUTIONS FROM RETIREMENT

20 PLANS IN CASE OF BIRTH OF CHILD OR ADOP21 TION.— 

22 ‘‘(i) IN GENERAL.—Any qualified 

23 birth or adoption distribution. 

24 ‘‘(ii) LIMITATION.—The aggregate 

25 amount which may be treated as qualified 


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1 birth or adoption distributions by any indi2 vidual with respect to any birth or adop3 tion shall not exceed $5,000. 

4 ‘‘(iii) QUALIFIED BIRTH OR ADOPTION

5 DISTRIBUTION.—For purposes of this sub6 paragraph— 

7 ‘‘(I) IN GENERAL.—The term 

8 ‘qualified birth or adoption distribu9 tion’ means any distribution from an 

10 applicable eligible retirement plan to 

11 an individual if made during the 1- 

12 year period beginning on the date on 

13 which a child of the individual is born 

14 or on which the legal adoption by the 

15 individual of an eligible adoptee is fi16 nalized. 

17 ‘‘(II) ELIGIBLE ADOPTEE.—The 

18 term ‘eligible adoptee’ means any indi19 vidual (other than a child of the tax20 payer’s spouse) who has not attained 

21 age 18 or is physically or mentally in22 capable of self-support. 

23 ‘‘(iv) TREATMENT OF PLAN DISTRIBU24 TIONS.— 


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1 ‘‘(I) IN GENERAL.—If a distribu2 tion to an individual would (without 

3 regard to clause (ii)) be a qualified 

4 birth or adoption distribution, a plan 

5 shall not be treated as failing to meet 

6 any requirement of this title merely 

7 because the plan treats the distribu8 tion as a qualified birth or adoption 

9 distribution, unless the aggregate 

10 amount of such distributions from all 

11 plans maintained by the employer 

12 (and any member of any controlled 

13 group which includes the employer) to 

14 such individual exceeds $5,000. 

15 ‘‘(II) CONTROLLED GROUP.—For 

16 purposes of subclause (I), the term 

17 ‘controlled group’ means any group 

18 treated as a single employer under 

19 subsection (b), (c), (m), or (o) of sec20 tion 414. 

21 ‘‘(v) AMOUNT DISTRIBUTED MAY BE

22 REPAID.— 

23 ‘‘(I) IN GENERAL.—Any indi24 vidual who receives a qualified birth 

25 or adoption distribution may make 


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1 one or more contributions in an ag2 gregate amount not to exceed the 

3 amount of such distribution to an ap4 plicable eligible retirement plan of 

5 which such individual is a beneficiary 

6 and to which a rollover contribution of 

7 such distribution could be made under 

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

9 408(d)(3), or 457(e)(16), as the case 

10 may be. 

11 ‘‘(II) LIMITATION ON CONTRIBU12 TIONS TO APPLICABLE ELIGIBLE RE13 TIREMENT PLANS OTHER THAN

14 IRAS.—The aggregate amount of con15 tributions made by an individual 

16 under subclause (I) to any applicable 

17 eligible retirement plan which is not 

18 an individual retirement plan shall not 

19 exceed the aggregate amount of quali20 fied birth or adoption distributions 

21 which are made from such plan to 

22 such individual. Subclause (I) shall 

23 not apply to contributions to any ap24 plicable eligible retirement plan which 

25 is not an individual retirement plan 


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1 unless the individual is eligible to 

2 make contributions (other than those 

3 described in subclause (I)) to such ap4 plicable eligible retirement plan. 

5 ‘‘(III) TREATMENT OF REPAY6 MENTS OF DISTRIBUTIONS FROM AP7 PLICABLE ELIGIBLE RETIREMENT

8 PLANS OTHER THAN IRAS.—If a con9 tribution is made under subclause (I) 

10 with respect to a qualified birth or 

11 adoption distribution from an applica12 ble eligible retirement plan other than 

13 an individual retirement plan, then 

14 the taxpayer shall, to the extent of the 

15 amount of the contribution, be treated 

16 as having received such distribution in 

17 an eligible rollover distribution (as de18 fined in section 402(c)(4)) and as 

19 having transferred the amount to the 

20 applicable eligible retirement plan in a 

21 direct trustee to trustee transfer with22 in 60 days of the distribution. 

23 ‘‘(IV) TREATMENT OF REPAY24 MENTS FOR DISTRIBUTIONS FROM

25 IRAS.—If a contribution is made 


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1 under subclause (I) with respect to a 

2 qualified birth or adoption distribution 

3 from an individual retirement plan, 

4 then, to the extent of the amount of 

5 the contribution, such distribution 

6 shall be treated as a distribution de7 scribed in section 408(d)(3) and as 

8 having been transferred to the appli9 cable eligible retirement plan in a di10 rect trustee to trustee transfer within 

11 60 days of the distribution. 

12 ‘‘(vi) DEFINITION AND SPECIAL

13 RULES.—For purposes of this subpara14 graph— 

15 ‘‘(I) APPLICABLE ELIGIBLE RE16 TIREMENT PLAN.—The term ‘applica17 ble eligible retirement plan’ means an 

18 eligible retirement plan (as defined in 

19 section 402(c)(8)(B)) other than a de20 fined benefit plan. 

21 ‘‘(II) EXEMPTION OF DISTRIBU22 TIONS FROM TRUSTEE TO TRUSTEE

23 TRANSFER AND WITHHOLDING

24 RULES.—For purposes of sections 

25 401(a)(31), 402(f), and 3405, a qualiVerDate Sep 11 2014 00:52 Apr 13, 2019 Jkt 089200 PO 00000 Frm 00030 Fmt 6652 Sfmt 6201 E:\BILLS\H1994.IH H1994

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1 fied birth or adoption distribution 

2 shall not be treated as an eligible roll3 over distribution. 

4 ‘‘(III) TAXPAYER MUST INCLUDE

5 TIN.—A distribution shall not be 

6 treated as a qualified birth or adop7 tion distribution with respect to any 

8 child or eligible adoptee unless the 

9 taxpayer includes the name, age, and 

10 TIN of such child or eligible adoptee 

11 on the taxpayer’s return of tax for the 

12 taxable year. 

13 ‘‘(IV) DISTRIBUTIONS TREATED

14 AS MEETING PLAN DISTRIBUTION RE15 QUIREMENTS.—Any qualified birth or 

16 adoption distribution shall be treated 

17 as meeting the requirements of sec18 tions 401(k)(2)(B)(i), 

19 403(b)(7)(A)(ii), 403(b)(11), and 

20 457(d)(1)(A).’’. 

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

22 this section shall apply to distributions made after Decem23 ber 31, 2019. 


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1 SEC. 113. INCREASE IN AGE FOR REQUIRED BEGINNING 

2 DATE FOR MANDATORY DISTRIBUTIONS. 

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

4 Internal Revenue Code of 1986 is amended by striking 

‘‘age 701 5 ⁄2’’ and inserting ‘‘age 72’’. 

6 (b) SPOUSE BENEFICIARIES; SPECIAL RULE FOR

7 OWNERS.—Subparagraphs (B)(iv)(I) and (C)(ii)(I) of sec8 tion 401(a)(9) of such Code are each amended by striking 

‘‘age 701 9 ⁄2’’ and inserting ‘‘age 72’’. 

10 (c) ACTUARIAL ADJUSTMENT.—Section 

11 401(a)(9)(C)(iii) of such Code is amended by striking 

‘‘age 701 12 ⁄2’’ each place it appears and inserting ‘‘age 72’’. 

13 (d) CONFORMING AMENDMENTS.— 

14 (1) The last sentence of section 408(b) of such 

Code is amended by striking ‘‘age 701 15 ⁄2’’ and insert16 ing ‘‘age 72’’. 

17 (2) Section 457(d)(1)(A)(i) of such Code is 

amended by striking ‘‘age 701 18 ⁄2’’ and inserting ‘‘age 

19 72’’. 

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

21 this section shall apply to distributions required to be 

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

who attain age 701 23 ⁄2 after such date. 


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1 SEC. 114. SPECIAL RULES FOR MINIMUM FUNDING STAND2 ARDS FOR COMMUNITY NEWSPAPER PLANS. 

3 (a) AMENDMENT TO INTERNAL REVENUE CODE OF

4 1986.—Section 430 of the Internal Revenue Code of 1986 

5 is amended by adding at the end the following new sub6 section: 

7 ‘‘(m) SPECIAL RULES FOR COMMUNITY NEWSPAPER

8 PLANS.— 

9 ‘‘(1) IN GENERAL.—The plan sponsor of a com10 munity newspaper plan under which no participant 

11 has had the participant’s accrued benefit increased 

12 (whether because of service or compensation) after 

13 December 31, 2017, may elect to have the alter14 native standards described in paragraph (3) apply to 

15 such plan, and any plan sponsored by any member 

16 of the same controlled group. 

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

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

19 as prescribed by the Secretary. Such election, once 

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

21 subsequent plan years unless revoked with the con22 sent of the Secretary. 

23 ‘‘(3) ALTERNATIVE MINIMUM FUNDING STAND24 ARDS.—The alternative standards described in this 

25 paragraph are the following: 

26 ‘‘(A) INTEREST RATES.— 


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1 ‘‘(i) IN GENERAL.—Notwithstanding 

2 subsection (h)(2)(C) and except as pro3 vided in clause (ii), the first, second, and 

4 third segment rates in effect for any 

5 month for purposes of this section shall be 

6 8 percent. 

7 ‘‘(ii) NEW BENEFIT ACCRUALS.—Not8 withstanding subsection (h)(2), for pur9 poses of determining the funding target 

10 and normal cost of a plan for any plan 

11 year, the present value of any benefits ac12 crued or earned under the plan for a plan 

13 year with respect to which an election 

14 under paragraph (1) is in effect shall be 

15 determined on the basis of the U.S. Treas16 ury obligation yield curve for the day that 

17 is the valuation date of such plan for such 

18 plan year. 

19 ‘‘(iii) U.S. TREASURY OBLIGATION

20 YIELD CURVE.—For purposes of this sub21 section, the term ‘U.S. Treasury obligation 

22 yield curve’ means, with respect to any 

23 day, a yield curve which shall be prescribed 

24 by the Secretary for such day on interest25 bearing obligations of the United States. 


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1 ‘‘(B) SHORTFALL AMORTIZATION BASE.— 

2 ‘‘(i) PREVIOUS SHORTFALL AMORTIZA3 TION BASES.—The shortfall amortization 

4 bases determined under subsection (c)(3) 

5 for all plan years preceding the first plan 

6 year to which the election under paragraph 

7 (1) applies (and all shortfall amortization 

8 installments determined with respect to 

9 such bases) shall be reduced to zero under 

10 rules similar to the rules of subsection 

11 (c)(6). 

12 ‘‘(ii) NEW SHORTFALL AMORTIZATION

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

14 the shortfall amortization base for the first 

15 plan year to which the election under para16 graph (1) applies shall be the funding 

17 shortfall of such plan for such plan year 

18 (determined using the interest rates as 

19 modified under subparagraph (A)). 

20 ‘‘(C) DETERMINATION OF SHORTFALL AM21 ORTIZATION INSTALLMENTS.— 

22 ‘‘(i) 30-YEAR PERIOD.—Subpara23 graphs (A) and (B) of subsection (c)(2) 

24 shall be applied by substituting ‘30-planVerDate Sep 11 2014 00:52 Apr 13, 2019 Jkt 089200 PO 00000 Frm 00035 Fmt 6652 Sfmt 6201 E:\BILLS\H1994.IH H1994

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1 year’ for ‘7-plan-year’ each place it ap2 pears. 

3 ‘‘(ii) NO SPECIAL ELECTION.—The 

4 election under subparagraph (D) of sub5 section (c)(2) shall not apply to any plan 

6 year to which the election under paragraph 

7 (1) applies. 

8 ‘‘(D) EXEMPTION FROM AT-RISK TREAT9 MENT.—Subsection (i) shall not apply. 

10 ‘‘(4) COMMUNITY NEWSPAPER PLAN.—For pur11 poses of this subsection— 

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

13 newspaper plan’ means a plan to which this sec14 tion applies maintained by an employer which, 

15 as of December 31, 2017— 

16 ‘‘(i) publishes and distributes daily, ei17 ther electronically or in printed form, 1 or 

18 more community newspapers in a single 

19 State, 

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

21 which is publicly traded (on a stock ex22 change or in an over-the-counter market), 

23 and is not controlled, directly or indirectly, 

24 by such a company, 


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1 ‘‘(iii) is controlled, directly or indi2 rectly— 

3 ‘‘(I) by 1 or more persons resid4 ing primarily in the State in which 

5 the community newspaper is pub6 lished, 

7 ‘‘(II) for not less than 30 years 

8 by individuals who are members of the 

9 same family, 

10 ‘‘(III) by a trust created or orga11 nized in the State in which the com12 munity newspaper is published, the 

13 sole trustees of which are persons de14 scribed in subclause (I) or (II), 

15 ‘‘(IV) by an entity which is de16 scribed in section 501(c)(3) and ex17 empt from taxation under section 

18 501(a), which is organized and oper19 ated in the State in which the commu20 nity newspaper is published, and the 

21 primary purpose of which is to benefit 

22 communities in such State, or 

23 ‘‘(V) by a combination of persons 

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

25 (IV), and 


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1 ‘‘(iv) does not control, directly or indi2 rectly, any newspaper in any other State. 

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

4 ‘community newspaper’ means a newspaper 

5 which primarily serves a metropolitan statistical 

6 area, as determined by the Office of Manage7 ment and Budget, with a population of not less 

8 than 100,000. 

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

10 as controlled by another person if such other 

11 person possesses, directly or indirectly, the 

12 power to direct or cause the direction and man13 agement of such person (including the power to 

14 elect a majority of the members of the board of 

15 directors of such person) through the ownership 

16 of voting securities. 

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

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

19 persons treated as a single employer under sub20 section (b), (c), (m), or (o) of section 414 as of the 

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

22 (b) AMENDMENT TO EMPLOYEE RETIREMENT IN23 COME SECURITY ACT OF 1974.—Section 303 of the Em24 ployee Retirement Income Security Act of 1974 (29 


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•HR 1994 IH

1 U.S.C. 1083) is amended by adding at the end the fol2 lowing new subsection: 

3 ‘‘(m) SPECIAL RULES FOR COMMUNITY NEWSPAPER

4 PLANS.— 

5 ‘‘(1) IN GENERAL.—The plan sponsor of a com6 munity newspaper plan under which no participant 

7 has had the participant’s accrued benefit increased 

8 (whether because of service or compensation) after 

9 December 31, 2017, may elect to have the alter10 native standards described in paragraph (3) apply to 

11 such plan, and any plan sponsored by any member 

12 of the same controlled group. 

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

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

15 as prescribed by the Secretary of the Treasury. Such 

16 election, once made with respect to a plan year, shall 

17 apply to all subsequent plan years unless revoked 

18 with the consent of the Secretary of the Treasury. 

19 ‘‘(3) ALTERNATIVE MINIMUM FUNDING STAND20 ARDS.—The alternative standards described in this 

21 paragraph are the following: 

22 ‘‘(A) INTEREST RATES.— 

23 ‘‘(i) IN GENERAL.—Notwithstanding 

24 subsection (h)(2)(C) and except as pro25 vided in clause (ii), the first, second, and 


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•HR 1994 IH

1 third segment rates in effect for any 

2 month for purposes of this section shall be 

3 8 percent. 

4 ‘‘(ii) NEW BENEFIT ACCRUALS.—Not5 withstanding subsection (h)(2), for pur6 poses of determining the funding target 

7 and normal cost of a plan for any plan 

8 year, the present value of any benefits ac9 crued or earned under the plan for a plan 

10 year with respect to which an election 

11 under paragraph (1) is in effect shall be 

12 determined on the basis of the U.S. Treas13 ury obligation yield curve for the day that 

14 is the valuation date of such plan for such 

15 plan year. 

16 ‘‘(iii) U.S. TREASURY OBLIGATION

17 YIELD CURVE.—For purposes of this sub18 section, the term ‘U.S. Treasury obligation 

19 yield curve’ means, with respect to any 

20 day, a yield curve which shall be prescribed 

21 by the Secretary of the Treasury for such 

22 day on interest-bearing obligations of the 

23 United States. 

24 ‘‘(B) SHORTFALL AMORTIZATION BASE.— 


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1 ‘‘(i) PREVIOUS SHORTFALL AMORTIZA2 TION BASES.—The shortfall amortization 

3 bases determined under subsection (c)(3) 

4 for all plan years preceding the first plan 

5 year to which the election under paragraph 

6 (1) applies (and all shortfall amortization 

7 installments determined with respect to 

8 such bases) shall be reduced to zero under 

9 rules similar to the rules of subsection 

10 (c)(6). 

11 ‘‘(ii) NEW SHORTFALL AMORTIZATION

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

13 the shortfall amortization base for the first 

14 plan year to which the election under para15 graph (1) applies shall be the funding 

16 shortfall of such plan for such plan year 

17 (determined using the interest rates as 

18 modified under subparagraph (A)). 

19 ‘‘(C) DETERMINATION OF SHORTFALL AM20 ORTIZATION INSTALLMENTS.— 

21 ‘‘(i) 30-YEAR PERIOD.—Subpara22 graphs (A) and (B) of subsection (c)(2) 

23 shall be applied by substituting ‘30-plan24 year’ for ‘7-plan-year’ each place it ap25 pears. 


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1 ‘‘(ii) NO SPECIAL ELECTION.—The 

2 election under subparagraph (D) of sub3 section (c)(2) shall not apply to any plan 

4 year to which the election under paragraph 

5 (1) applies. 

6 ‘‘(D) EXEMPTION FROM AT-RISK TREAT7 MENT.—Subsection (i) shall not apply. 

8 ‘‘(4) COMMUNITY NEWSPAPER PLAN.—For pur9 poses of this subsection— 

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

11 newspaper plan’ means a plan to which this sec12 tion applies maintained by an employer which, 

13 as of December 31, 2017— 

14 ‘‘(i) publishes and distributes daily, ei15 ther electronically or in printed form— 

16 ‘‘(I) a community newspaper, or 

17 ‘‘(II) 1 or more community news18 papers in the same State, 

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

20 which is publicly traded (on a stock ex21 change or in an over-the-counter market), 

22 and is not controlled, directly or indirectly, 

23 by such a company, 

24 ‘‘(iii) is controlled, directly or indi25 rectly— 


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1 ‘‘(I) by 1 or more persons resid2 ing primarily in the State in which 

3 the community newspaper is pub4 lished, 

5 ‘‘(II) for not less than 30 years 

6 by individuals who are members of the 

7 same family, 

8 ‘‘(III) by a trust created or orga9 nized in the State in which the com10 munity newspaper is published, the 

11 sole trustees of which are persons de12 scribed in subclause (I) or (II), 

13 ‘‘(IV) by an entity which is de14 scribed in section 501(c)(3) of the In15 ternal Revenue Code of 1986 and ex16 empt from taxation under section 

17 501(a) of such Code, which is orga18 nized and operated in the State in 

19 which the community newspaper is 

20 published, and the primary purpose of 

21 which is to benefit communities in 

22 such State, or 

23 ‘‘(V) by a combination of persons 

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

25 (IV), and 


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•HR 1994 IH

1 ‘‘(iv) does not control, directly or indi2 rectly, any newspaper in any other State. 

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

4 ‘community newspaper’ means a newspaper 

5 which primarily serves a metropolitan statistical 

6 area, as determined by the Office of Manage7 ment and Budget, with a population of not less 

8 than 100,000. 

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

10 as controlled by another person if such other 

11 person possesses, directly or indirectly, the 

12 power to direct or cause the direction and man13 agement of such person (including the power to 

14 elect a majority of the members of the board of 

15 directors of such person) through the ownership 

16 of voting securities. 

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

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

19 persons treated as a single employer under sub20 section (b), (c), (m), or (o) of section 414 of the In21 ternal Revenue Code of 1986 as of the date of the 

22 enactment of this subsection. 

23 ‘‘(6) EFFECT ON PREMIUM RATE CALCULA24 TION.—Notwithstanding any other provision of law 

25 or any regulation issued by the Pension Benefit 


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•HR 1994 IH

1 Guaranty Corporation, in the case of a community 

2 newspaper plan which elects the application of the 

3 alternative standards described in paragraph (3), the 

4 additional premium under section 4006(a)(3)(E) 

5 shall be determined as if such election had not been 

6 made.’’. 

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

8 this section shall apply to plan years ending after Decem9 ber 31, 2017. 

10 SEC. 115. TREATING EXCLUDED DIFFICULTY OF CARE PAY11 MENTS AS COMPENSATION FOR DETER12 MINING RETIREMENT CONTRIBUTION LIMI13 TATIONS. 

14 (a) INDIVIDUAL RETIREMENT ACCOUNTS.— 

15 (1) IN GENERAL.—Section 408(o) of the Inter16 nal Revenue Code of 1986 is amended by adding at 

17 the end the following new paragraph: 

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

19 PAYMENTS EXCLUDED FROM GROSS INCOME.—In 

20 the case of an individual who for a taxable year ex21 cludes from gross income under section 131 a quali22 fied foster care payment which is a difficulty of care 

23 payment, if— 

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

25 the taxable year under subsection (b), exceeds 


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•HR 1994 IH

1 ‘‘(B) the amount of compensation includ2 ible in the individual’s gross income for the tax3 able year, 

4 the individual may elect to increase the nondeduct5 ible limit under paragraph (2) for the taxable year 

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

7 the amount so excluded.’’. 

8 (2) EFFECTIVE DATE.—The amendments made 

9 by this subsection shall apply to contributions after 

10 the date of the enactment of this Act. 

11 (b) DEFINED CONTRIBUTION PLANS.— 

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

13 is amended by adding at the end the following new 

14 paragraph: 

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

16 PAYMENTS EXCLUDED FROM GROSS INCOME.— 

17 ‘‘(A) IN GENERAL.—For purposes of para18 graph (1)(B), in the case of an individual who 

19 for a taxable year excludes from gross income 

20 under section 131 a qualified foster care pay21 ment which is a difficulty of care payment, the 

22 participant’s compensation, or earned income, 

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

24 amount so excluded. 


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1 ‘‘(B) CONTRIBUTIONS ALLOCABLE TO DIF2 FICULTY OF CARE PAYMENTS TREATED AS

3 AFTER-TAX.—Any contribution by the partici4 pant which is allowable due to such increase— 

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

6 this title as investment in the contract, and 

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

8 arrangement which is part of such plan) to 

9 be treated as failing to meet any require10 ments of this chapter solely by reason of 

11 allowing any such contributions.’’. 

12 (2) EFFECTIVE DATE.—The amendment made 

13 by this subsection shall apply to plan years begin14 ning after December 31, 2015. 

15 TITLE II—ADMINISTRATIVE 

16 IMPROVEMENTS 

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

18 MAY BE TREATED AS IN EFFECT AS OF CLOSE 

19 OF YEAR. 

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

21 the Internal Revenue Code of 1986 is amended— 

22 (1) by striking ‘‘RETROACTIVE CHANGES IN

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

24 AMENDMENTS.— 


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1 ‘‘(1) CERTAIN RETROACTIVE CHANGES IN

2 PLAN.—A stock bonus’’; and 

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

4 paragraph: 

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

6 adopts a stock bonus, pension, profit-sharing, or an7 nuity plan after the close of a taxable year but be8 fore the time prescribed by law for filing the return 

9 of the employer for the taxable year (including ex10 tensions thereof), the employer may elect to treat 

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

12 of the taxable year.’’. 

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

14 this section shall apply to plans adopted for taxable years 

15 beginning after December 31, 2019. 

16 SEC. 202. COMBINED ANNUAL REPORT FOR GROUP OF 

17 PLANS. 

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

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

20 the returns required under section 6058 of the Internal 

21 Revenue Code of 1986 and the reports required by section 

22 104 of the Employee Retirement Income Security Act of 

23 1974 (29 U.S.C. 1024) so that all members of a group 

24 of plans described in subsection (c) may file a single aggreVerDate Sep 11 2014 00:52 Apr 13, 2019 Jkt 089200 PO 00000 Frm 00048 Fmt 6652 Sfmt 6201 E:\BILLS\H1994.IH H1994

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1 gated annual return or report satisfying the requirements 

2 of both such sections. 

3 (b) ADMINISTRATIVE REQUIREMENTS.—In devel4 oping the consolidated return or report under subsection 

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

6 Labor may require such return or report to include any 

7 information regarding each plan in the group as such Sec8 retaries determine is necessary or appropriate for the en9 forcement and administration of the Internal Revenue 

10 Code of 1986 and the Employee Retirement Income Secu11 rity Act of 1974. 

12 (c) PLANS DESCRIBED.—A group of plans is de13 scribed in this subsection if all plans in the group— 

14 (1) are individual account plans or defined con15 tribution plans (as defined in section 3(34) of the 

16 Employee Retirement Income Security Act of 1974 

17 (29 U.S.C. 1002(34)) or in section 414(i) of the In18 ternal Revenue Code of 1986); 

19 (2) have— 

20 (A) the same trustee (as described in sec21 tion 403(a) of such Act (29 U.S.C. 1103(a))); 

22 (B) the same one or more named fidu23 ciaries (as described in section 402(a) of such 

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


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1 (C) the same administrator (as defined in 

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

3 1002(16)(A))) and plan administrator (as de4 fined in section 414(g) of the Internal Revenue 

5 Code of 1986); and 

6 (D) plan years beginning on the same 

7 date; and 

8 (3) provide the same investments or investment 

9 options to participants and beneficiaries. 

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

11 Income Security Act of 1974 shall be treated as meeting 

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

13 plans if the same person that performs each of the func14 tions described in such paragraph, as applicable, for all 

15 other plans in such group performs each of such functions 

16 for such plan. 

17 (d) CLARIFICATION RELATING TO ELECTRONIC FIL18 ING OF RETURNS FOR DEFERRED COMPENSATION

19 PLANS.— 

20 (1) IN GENERAL.—Section 6011(e) of the Inter21 nal Revenue Code of 1986 is amended by adding at 

22 the end the following new paragraph: 

23 ‘‘(6) APPLICATION OF NUMERICAL LIMITATION

24 TO RETURNS RELATING TO DEFERRED COMPENSA25 TION PLANS.—For purposes of applying the numerVerDate Sep 11 2014 00:52 Apr 13, 2019 Jkt 089200 PO 00000 Frm 00050 Fmt 6652 Sfmt 6201 E:\BILLS\H1994.IH H1994

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1 ical limitation under paragraph (2)(A) to any return 

2 required under section 6058, information regarding 

3 each plan for which information is provided on such 

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

5 (2) EFFECTIVE DATE.—The amendment made 

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

7 be filed with respect to plan years beginning after 

8 December 31, 2019. 

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

10 subsection (a) shall be implemented not later than Janu11 ary 1, 2022, and shall apply to returns and reports for 

12 plan years beginning after December 31, 2021. 

13 SEC. 203. DISCLOSURE REGARDING LIFETIME INCOME. 

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

15 105(a)(2) of the Employee Retirement Income Security 

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

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

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

19 and inserting ‘‘diversification, and’’; and 

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

21 ‘‘(iii) the lifetime income disclosure 

22 described in subparagraph (D)(i). 

23 In the case of pension benefit statements de24 scribed in clause (i) of paragraph (1)(A), a life25 time income disclosure under clause (iii) of this 


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1 subparagraph shall be required to be included 

2 in only one pension benefit statement during 

3 any one 12-month period.’’. 

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

5 105(a) of the Employee Retirement Income Security Act 

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

7 end the following new subparagraph: 

8 ‘‘(D) LIFETIME INCOME DISCLOSURE.— 

9 ‘‘(i) IN GENERAL.— 

10 ‘‘(I) DISCLOSURE.—A lifetime in11 come disclosure shall set forth the life12 time income stream equivalent of the 

13 total benefits accrued with respect to 

14 the participant or beneficiary. 

15 ‘‘(II) LIFETIME INCOME STREAM

16 EQUIVALENT OF THE TOTAL BENE17 FITS ACCRUED.—For purposes of this 

18 subparagraph, the term ‘lifetime in19 come stream equivalent of the total 

20 benefits accrued’ means the amount of 

21 monthly payments the participant or 

22 beneficiary would receive if the total 

23 accrued benefits of such participant or 

24 beneficiary were used to provide life25 time income streams described in subVerDate Sep 11 2014 00:52 Apr 13, 2019 Jkt 089200 PO 00000 Frm 00052 Fmt 6652 Sfmt 6201 E:\BILLS\H1994.IH H1994

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1 clause (III), based on assumptions 

2 specified in rules prescribed by the 

3 Secretary. 

4 ‘‘(III) LIFETIME INCOME

5 STREAMS.—The lifetime income 

6 streams described in this subclause 

7 are a qualified joint and survivor an8 nuity (as defined in section 205(d)), 

9 based on assumptions specified in 

10 rules prescribed by the Secretary, in11 cluding the assumption that the par12 ticipant or beneficiary has a spouse of 

13 equal age, and a single life annuity. 

14 Such lifetime income streams may 

15 have a term certain or other features 

16 to the extent permitted under rules 

17 prescribed by the Secretary. 

18 ‘‘(ii) MODEL DISCLOSURE.—Not later 

19 than 1 year after the date of the enact20 ment of the Setting Every Community Up 

21 for Retirement Enhancement Act of 2019, 

22 the Secretary shall issue a model lifetime 

23 income disclosure, written in a manner so 

24 as to be understood by the average plan 

25 participant, which— 


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1 ‘‘(I) explains that the lifetime in2 come stream equivalent is only pro3 vided as an illustration; 

4 ‘‘(II) explains that the actual 

5 payments under the lifetime income 

6 stream described in clause (i)(III) 

7 which may be purchased with the 

8 total benefits accrued will depend on 

9 numerous factors and may vary sub10 stantially from the lifetime income 

11 stream equivalent in the disclosures; 

12 ‘‘(III) explains the assumptions 

13 upon which the lifetime income stream 

14 equivalent was determined; and 

15 ‘‘(IV) provides such other similar 

16 explanations as the Secretary con17 siders appropriate. 

18 ‘‘(iii) ASSUMPTIONS AND RULES.— 

19 Not later than 1 year after the date of the 

20 enactment of the Setting Every Commu21 nity Up for Retirement Enhancement Act 

22 of 2019, the Secretary shall— 

23 ‘‘(I) prescribe assumptions which 

24 administrators of individual account 

25 plans may use in converting total acVerDate Sep 11 2014 00:52 Apr 13, 2019 Jkt 089200 PO 00000 Frm 00054 Fmt 6652 Sfmt 6201 E:\BILLS\H1994.IH H1994

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1 crued benefits into lifetime income 

2 stream equivalents for purposes of 

3 this subparagraph; and 

4 ‘‘(II) issue interim final rules 

5 under clause (i). 

6 In prescribing assumptions under sub7 clause (I), the Secretary may prescribe a 

8 single set of specific assumptions (in which 

9 case the Secretary may issue tables or fac10 tors which facilitate such conversions), or 

11 ranges of permissible assumptions. To the 

12 extent that an accrued benefit is or may be 

13 invested in a lifetime income stream de14 scribed in clause (i)(III), the assumptions 

15 prescribed under subclause (I) shall, to the 

16 extent appropriate, permit administrators 

17 of individual account plans to use the 

18 amounts payable under such lifetime in19 come stream as a lifetime income stream 

20 equivalent. 

21 ‘‘(iv) LIMITATION ON LIABILITY.—No 

22 plan fiduciary, plan sponsor, or other per23 son shall have any liability under this title 

24 solely by reason of the provision of lifetime 

25 income stream equivalents which are deVerDate Sep 11 2014 00:52 Apr 13, 2019 Jkt 089200 PO 00000 Frm 00055 Fmt 6652 Sfmt 6201 E:\BILLS\H1994.IH H1994

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1 rived in accordance with the assumptions 

2 and rules described in clause (iii) and 

3 which include the explanations contained in 

4 the model lifetime income disclosure de5 scribed in clause (ii). This clause shall 

6 apply without regard to whether the provi7 sion of such lifetime income stream equiva8 lent is required by subparagraph (B)(iii). 

9 ‘‘(v) EFFECTIVE DATE.—The require10 ment in subparagraph (B)(iii) shall apply 

11 to pension benefit statements furnished 

12 more than 12 months after the latest of 

13 the issuance by the Secretary of— 

14 ‘‘(I) interim final rules under 

15 clause (i); 

16 ‘‘(II) the model disclosure under 

17 clause (ii); or 

18 ‘‘(III) the assumptions under 

19 clause (iii).’’. 

20 SEC. 204. FIDUCIARY SAFE HARBOR FOR SELECTION OF 

21 LIFETIME INCOME PROVIDER. 

22 Section 404 of the Employee Retirement Income Se23 curity Act of 1974 (29 U.S.C. 1104) is amended by adding 

24 at the end the following: 

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


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1 ‘‘(1) IN GENERAL.—With respect to the selec2 tion of an insurer for a guaranteed retirement in3 come contract, the requirements of subsection 

4 (a)(1)(B) will be deemed to be satisfied if a fidu5 ciary— 

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

7 and analytical search for the purpose of identi8 fying insurers from which to purchase such con9 tracts; 

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

11 under subparagraph (A)— 

12 ‘‘(i) considers the financial capability 

13 of such insurer to satisfy its obligations 

14 under the guaranteed retirement income 

15 contract; and 

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

17 and commissions) of the guaranteed retire18 ment income contract offered by the in19 surer in relation to the benefits and prod20 uct features of the contract and adminis21 trative services to be provided under such 

22 contract; and 

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

24 concludes that— 


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

2 insurer is financially capable of satisfying 

3 its obligations under the guaranteed retire4 ment income contract; and 

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

6 guaranteed retirement income contract as 

7 described in subparagraph (B)(ii) is rea8 sonable. 

9 ‘‘(2) FINANCIAL CAPABILITY OF THE IN10 SURER.—A fiduciary will be deemed to satisfy the 

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

12 if— 

13 ‘‘(A) the fiduciary obtains written rep14 resentations from the insurer that— 

15 ‘‘(i) the insurer is licensed to offer 

16 guaranteed retirement income contracts; 

17 ‘‘(ii) the insurer, at the time of selec18 tion and for each of the immediately pre19 ceding 7 plan years— 

20 ‘‘(I) operates under a certificate 

21 of authority from the insurance com22 missioner of its domiciliary State 

23 which has not been revoked or sus24 pended; 


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1 ‘‘(II) has filed audited financial 

2 statements in accordance with the 

3 laws of its domiciliary State under ap4 plicable statutory accounting prin5 ciples; 

6 ‘‘(III) maintains (and has main7 tained) reserves which satisfies all the 

8 statutory requirements of all States 

9 where the insurer does business; and 

10 ‘‘(IV) is not operating under an 

11 order of supervision, rehabilitation, or 

12 liquidation; 

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

14 every 5 years, a financial examination 

15 (within the meaning of the law of its domi16 ciliary State) by the insurance commis17 sioner of the domiciliary State (or rep18 resentative, designee, or other party ap19 proved by such commissioner); and 

20 ‘‘(iv) the insurer will notify the fidu21 ciary of any change in circumstances oc22 curring after the provision of the represen23 tations in clauses (i), (ii), and (iii) which 

24 would preclude the insurer from making 

25 such representations at the time of 


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1 issuance of the guaranteed retirement in2 come contract; and 

3 ‘‘(B) after receiving such representations 

4 and as of the time of selection, the fiduciary 

5 has not received any notice described in sub6 paragraph (A)(iv) and is in possession of no 

7 other information which would cause the fidu8 ciary to question the representations provided. 

9 ‘‘(3) NO REQUIREMENT TO SELECT LOWEST

10 COST.—Nothing in this subsection shall be construed 

11 to require a fiduciary to select the lowest cost con12 tract. A fiduciary may consider the value of a con13 tract, including features and benefits of the contract 

14 and attributes of the insurer (including, without lim15 itation, the insurer’s financial strength) in conjunc16 tion with the cost of the contract. 

17 ‘‘(4) TIME OF SELECTION.— 

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

19 subsection, the time of selection is— 

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

21 contract are selected for distribution of 

22 benefits to a specific participant or bene23 ficiary; or 

24 ‘‘(ii) if the fiduciary periodically re25 views the continuing appropriateness of the 


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1 conclusion described in paragraph (1)(C) 

2 with respect to a selected insurer, taking 

3 into account the considerations described 

4 in such paragraph, the time that the in5 surer and the contract are selected to pro6 vide benefits at future dates to participants 

7 or beneficiaries under the plan. 

8 Nothing in the preceding sentence shall be con9 strued to require the fiduciary to review the ap10 propriateness of a selection after the purchase 

11 of a contract for a participant or beneficiary. 

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

13 be deemed to have conducted the periodic re14 view described in subparagraph (A)(ii) if the fi15 duciary obtains the written representations de16 scribed in clauses (i), (ii), and (iii) of paragraph 

17 (2)(A) from the insurer on an annual basis, un18 less the fiduciary receives any notice described 

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

20 aware of facts that would cause the fiduciary to 

21 question such representations. 

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

23 satisfies the requirements of this subsection shall not 

24 be liable following the distribution of any benefit, or 

25 the investment by or on behalf of a participant or 


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1 beneficiary pursuant to the selected guaranteed re2 tirement income contract, for any losses that may 

3 result to the participant or beneficiary due to an in4 surer’s inability to satisfy its financial obligations 

5 under the terms of such contract. 

6 ‘‘(6) DEFINITIONS.—For purposes of this sub7 section— 

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

9 an insurance company, insurance service, or in10 surance organization, including affiliates of 

11 such companies. 

12 ‘‘(B) GUARANTEED RETIREMENT INCOME

13 CONTRACT.—The term ‘guaranteed retirement 

14 income contract’ means an annuity contract for 

15 a fixed term or a contract (or provision or fea16 ture thereof) which provides guaranteed bene17 fits annually (or more frequently) for at least 

18 the remainder of the life of the participant or 

19 the joint lives of the participant and the partici20 pant’s designated beneficiary as part of an indi21 vidual account plan.’’. 


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1 SEC. 205. MODIFICATION OF NONDISCRIMINATION RULES 

2 TO PROTECT OLDER, LONGER SERVICE PAR3 TICIPANTS. 

4 (a) IN GENERAL.—Section 401 of the Internal Rev5 enue Code of 1986 is amended— 

6 (1) by redesignating subsection (o) as sub7 section (p); and 

8 (2) by inserting after subsection (n) the fol9 lowing new subsection: 

10 ‘‘(o) SPECIAL RULES FOR APPLYING NON11 DISCRIMINATION RULES TO PROTECT OLDER, LONGER

12 SERVICE AND GRANDFATHERED PARTICIPANTS.— 

13 ‘‘(1) TESTING OF DEFINED BENEFIT PLANS

14 WITH CLOSED CLASSES OF PARTICIPANTS.— 

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

16 PROVIDED TO CLOSED CLASSES.—A defined 

17 benefit plan which provides benefits, rights, or 

18 features to a closed class of participants shall 

19 not fail to satisfy the requirements of sub20 section (a)(4) by reason of the composition of 

21 such closed class or the benefits, rights, or fea22 tures provided to such closed class, if— 

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

24 class closes and the 2 succeeding plan 

25 years, such benefits, rights, and features 

26 satisfy the requirements of subsection 


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1 (a)(4) (without regard to this subpara2 graph but taking into account the rules of 

3 subparagraph (I)), 

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

5 class was closed, any plan amendment 

6 which modifies the closed class or the ben7 efits, rights, and features provided to such 

8 closed class does not discriminate signifi9 cantly in favor of highly compensated em10 ployees, and 

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

12 5, 2017, or the plan is described in sub13 paragraph (C). 

14 ‘‘(B) AGGREGATE TESTING WITH DEFINED

15 CONTRIBUTION PLANS PERMITTED ON A BENE16 FITS BASIS.— 

17 ‘‘(i) IN GENERAL.—For purposes of 

18 determining compliance with subsection 

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

20 plan described in clause (iii) may be aggre21 gated and tested on a benefits basis with 

22 1 or more defined contribution plans, in23 cluding with the portion of 1 or more de24 fined contribution plans which— 


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1 ‘‘(I) provides matching contribu2 tions (as defined in subsection 

3 (m)(4)(A)), 

4 ‘‘(II) provides annuity contracts 

5 described in section 403(b) which are 

6 purchased with matching contribu7 tions or nonelective contributions, or 

8 ‘‘(III) consists of an employee 

9 stock ownership plan (within the 

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

11 tax credit employee stock ownership 

12 plan (within the meaning of section 

13 409(a)). 

14 ‘‘(ii) SPECIAL RULES FOR MATCHING

15 CONTRIBUTIONS.—For purposes of clause 

16 (i), if a defined benefit plan is aggregated 

17 with a portion of a defined contribution 

18 plan providing matching contributions— 

19 ‘‘(I) such defined benefit plan 

20 must also be aggregated with any por21 tion of such defined contribution plan 

22 which provides elective deferrals de23 scribed in subparagraph (A) or (C) of 

24 section 402(g)(3), and 


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1 ‘‘(II) such matching contribu2 tions shall be treated in the same 

3 manner as nonelective contributions, 

4 including for purposes of applying the 

5 rules of subsection (l). 

6 ‘‘(iii) PLANS DESCRIBED.—A defined 

7 benefit plan is described in this clause if— 

8 ‘‘(I) the plan provides benefits to 

9 a closed class of participants, 

10 ‘‘(II) for the plan year as of 

11 which the class closes and the 2 suc12 ceeding plan years, the plan satisfies 

13 the requirements of section 410(b) 

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

15 to this subparagraph but taking into 

16 account the rules of subparagraph 

17 (I)), 

18 ‘‘(III) after the date as of which 

19 the class was closed, any plan amend20 ment which modifies the closed class 

21 or the benefits provided to such closed 

22 class does not discriminate signifi23 cantly in favor of highly compensated 

24 employees, and 


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1 ‘‘(IV) the class was closed before 

2 April 5, 2017, or the plan is described 

3 in subparagraph (C). 

4 ‘‘(C) PLANS DESCRIBED.—A plan is de5 scribed in this subparagraph if, taking into ac6 count any predecessor plan— 

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

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

9 closed, and 

10 ‘‘(ii) during the 5-year period pre11 ceding the date the class is closed, there 

12 has not been a substantial increase in the 

13 coverage or value of the benefits, rights, or 

14 features described in subparagraph (A) or 

15 in the coverage or benefits under the plan 

16 described in subparagraph (B)(iii) (which17 ever is applicable). 

18 ‘‘(D) DETERMINATION OF SUBSTANTIAL

19 INCREASE FOR BENEFITS, RIGHTS, AND FEA20 TURES.—In applying subparagraph (C)(ii) for 

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

22 be treated as having had a substantial increase 

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

24 features described in subparagraph (A) during 


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

2 period— 

3 ‘‘(i) the number of participants cov4 ered by such benefits, rights, or features 

5 on the date such period ends is more than 

6 50 percent greater than the number of 

7 such participants on the first day of the 

8 plan year in which such period began, or 

9 ‘‘(ii) such benefits, rights, and fea10 tures have been modified by 1 or more 

11 plan amendments in such a way that, as of 

12 the date the class is closed, the value of 

13 such benefits, rights, and features to the 

14 closed class as a whole is substantially 

15 greater than the value as of the first day 

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

17 such amendments. 

18 ‘‘(E) DETERMINATION OF SUBSTANTIAL

19 INCREASE FOR AGGREGATE TESTING ON BENE20 FITS BASIS.—In applying subparagraph (C)(ii) 

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

22 plan shall be treated as having had a substan23 tial increase in coverage or benefits during the 

24 applicable 5-year period only if, during such pe25 riod— 


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1 ‘‘(i) the number of participants bene2 fitting under the plan on the date such pe3 riod ends is more than 50 percent greater 

4 than the number of such participants on 

5 the first day of the plan year in which such 

6 period began, or 

7 ‘‘(ii) the average benefit provided to 

8 such participants on the date such period 

9 ends is more than 50 percent greater than 

10 the average benefit provided on the first 

11 day of the plan year in which such period 

12 began. 

13 ‘‘(F) CERTAIN EMPLOYEES DIS14 REGARDED.—For purposes of subparagraphs 

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

16 or in coverage or benefits, whichever is applica17 ble, which is attributable to such coverage and 

18 value or coverage and benefits provided to em19 ployees— 

20 ‘‘(i) who became participants as a re21 sult of a merger, acquisition, or similar 

22 event which occurred during the 7-year pe23 riod preceding the date the class is closed, 

24 or 


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1 ‘‘(ii) who became participants by rea2 son of a merger of the plan with another 

3 plan which had been in effect for at least 

4 5 years as of the date of the merger, 

5 shall be disregarded, except that clause (ii) 

6 shall apply for purposes of subparagraph (D) 

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

8 or features under 1 plan are conformed to the 

9 benefits, rights, or features of the other plan 

10 prospectively. 

11 ‘‘(G) RULES RELATING TO AVERAGE BEN12 EFIT.—For purposes of subparagraph (E)— 

13 ‘‘(i) the average benefit provided to 

14 participants under the plan will be treated 

15 as having remained the same between the 

16 2 dates described in subparagraph (E)(ii) 

17 if the benefit formula applicable to such 

18 participants has not changed between such 

19 dates, and 

20 ‘‘(ii) if the benefit formula applicable 

21 to 1 or more participants under the plan 

22 has changed between such 2 dates, then 

23 the average benefit under the plan shall be 

24 considered to have increased by more than 

25 50 percent only if— 


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1 ‘‘(I) the total amount determined 

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

3 participants benefitting under the 

4 plan for the plan year in which the 5- 

5 year period described in subparagraph 

6 (E) ends, exceeds 

7 ‘‘(II) the total amount deter8 mined under section 430(b)(1)(A)(i) 

9 for all such participants for such plan 

10 year, by using the benefit formula in 

11 effect for each such participant for 

12 the first plan year in such 5-year pe13 riod, 

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

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

16 the normal cost of the plan (as determined 

17 under section 433(j)(1)(B)) shall be used 

18 in lieu of the amount determined under 

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

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

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

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

23 a single plan rather than as separate plans 

24 maintained by each employer in the plan. 


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

2 subparagraphs (A)(i) and (B)(iii)(II), the fol3 lowing rules shall apply: 

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

5 the closing of the class of participants shall 

6 not be treated as a significant change in 

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

8 ‘‘(ii) Two or more plans shall not fail 

9 to be eligible to be aggregated and treated 

10 as a single plan solely by reason of having 

11 different plan years. 

12 ‘‘(iii) Changes in the employee popu13 lation shall be disregarded to the extent at14 tributable to individuals who become em15 ployees or cease to be employees, after the 

16 date the class is closed, by reason of a 

17 merger, acquisition, divestiture, or similar 

18 event. 

19 ‘‘(iv) Aggregation and all other testing 

20 methodologies otherwise applicable under 

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

22 be taken into account. 

23 The rule of clause (ii) shall also apply for pur24 poses of determining whether plans to which 

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


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1 and treated as 1 plan for purposes of deter2 mining whether such plans meet the require3 ments of subsection (a)(4) and section 410(b). 

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

5 this paragraph, if a portion of a defined benefit 

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

7 is spun off to another employer and the spun8 off plan continues to satisfy the requirements 

9 of— 

10 ‘‘(i) subparagraph (A)(i) or 

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

12 original plan was still within the 3-year pe13 riod described in such subparagraph at the 

14 time of the spin off, and 

15 ‘‘(ii) subparagraph (A)(ii) or 

16 (B)(iii)(III), whichever is applicable, 

17 the treatment under subparagraph (A) or (B) 

18 of the spun-off plan shall continue with respect 

19 to such other employer. 

20 ‘‘(2) TESTING OF DEFINED CONTRIBUTION

21 PLANS.— 

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

23 defined contribution plan shall be permitted to 

24 be tested on a benefits basis if— 


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1 ‘‘(i) such defined contribution plan 

2 provides make-whole contributions to a 

3 closed class of participants whose accruals 

4 under a defined benefit plan have been re5 duced or eliminated, 

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

7 contribution plan as of which the class eli8 gible to receive such make-whole contribu9 tions closes and the 2 succeeding plan 

10 years, such closed class of participants sat11 isfies the requirements of section 

12 410(b)(2)(A)(i) (determined by applying 

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

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

15 class was closed, any plan amendment to 

16 the defined contribution plan which modi17 fies the closed class or the allocations, ben18 efits, rights, and features provided to such 

19 closed class does not discriminate signifi20 cantly in favor of highly compensated em21 ployees, and 

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

23 5, 2017, or the defined benefit plan under 

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


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1 (as applied for purposes of paragraph 

2 (1)(B)(iii)(IV)). 

3 ‘‘(B) AGGREGATION WITH PLANS INCLUD4 ING MATCHING CONTRIBUTIONS.— 

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

6 or more defined contribution plans de7 scribed in subparagraph (A), for purposes 

8 of determining compliance with subsection 

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

10 such plans which provides make-whole con11 tributions or other nonelective contribu12 tions may be aggregated and tested on a 

13 benefits basis with the portion of 1 or 

14 more other defined contribution plans 

15 which— 

16 ‘‘(I) provides matching contribu17 tions (as defined in subsection 

18 (m)(4)(A)), 

19 ‘‘(II) provides annuity contracts 

20 described in section 403(b) which are 

21 purchased with matching contribu22 tions or nonelective contributions, or 

23 ‘‘(III) consists of an employee 

24 stock ownership plan (within the 

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


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1 tax credit employee stock ownership 

2 plan (within the meaning of section 

3 409(a)). 

4 ‘‘(ii) SPECIAL RULES FOR MATCHING

5 CONTRIBUTIONS.—Rules similar to the 

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

7 for purposes of clause (i). 

8 ‘‘(C) SPECIAL RULES FOR TESTING DE9 FINED CONTRIBUTION PLAN FEATURES PRO10 VIDING MATCHING CONTRIBUTIONS TO CERTAIN

11 OLDER, LONGER SERVICE PARTICIPANTS.—In 

12 the case of a defined contribution plan which 

13 provides benefits, rights, or features to a closed 

14 class of participants whose accruals under a de15 fined benefit plan have been reduced or elimi16 nated, the plan shall not fail to satisfy the re17 quirements of subsection (a)(4) solely by reason 

18 of the composition of the closed class or the 

19 benefits, rights, or features provided to such 

20 closed class if the defined contribution plan and 

21 defined benefit plan otherwise meet the require22 ments of subparagraph (A) but for the fact that 

23 the make-whole contributions under the defined 

24 contribution plan are made in whole or in part 

25 through matching contributions. 


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

2 this paragraph, if a portion of a defined con3 tribution plan described in subparagraph (A) or 

4 (C) is spun off to another employer, the treat5 ment under subparagraph (A) or (C) of the 

6 spun-off plan shall continue with respect to the 

7 other employer if such plan continues to comply 

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

9 original plan was still within the 3-year period 

10 described in such clause at the time of the spin 

11 off) and (iii) of subparagraph (A), as deter12 mined for purposes of subparagraph (A) or (C), 

13 whichever is applicable. 

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

15 purposes of this subsection— 

16 ‘‘(A) MAKE-WHOLE CONTRIBUTIONS.—Ex17 cept as otherwise provided in paragraph (2)(C), 

18 the term ‘make-whole contributions’ means non19 elective allocations for each employee in the 

20 class which are reasonably calculated, in a con21 sistent manner, to replace some or all of the re22 tirement benefits which the employee would 

23 have received under the defined benefit plan 

24 and any other plan or qualified cash or deferred 

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


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1 change had been made to such defined benefit 

2 plan and such other plan or arrangement. For 

3 purposes of the preceding sentence, consistency 

4 shall not be required with respect to employees 

5 who were subject to different benefit formulas 

6 under the defined benefit plan. 

7 ‘‘(B) REFERENCES TO CLOSED CLASS OF

8 PARTICIPANTS.—References to a closed class of 

9 participants and similar references to a closed 

10 class shall include arrangements under which 1 

11 or more classes of participants are closed, ex12 cept that 1 or more classes of participants 

13 closed on different dates shall not be aggre14 gated for purposes of determining the date any 

15 such class was closed. 

16 ‘‘(C) HIGHLY COMPENSATED EMPLOYEE.— 

17 The term ‘highly compensated employee’ has 

18 the meaning given such term in section 

19 414(q).’’. 

20 (b) PARTICIPATION REQUIREMENTS.—Paragraph 

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

22 1986 is amended by adding at the end the following new 

23 subparagraph: 

24 ‘‘(I) PROTECTED PARTICIPANTS.— 


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1 ‘‘(i) IN GENERAL.—A plan shall be 

2 deemed to satisfy the requirements of sub3 paragraph (A) if— 

4 ‘‘(I) the plan is amended— 

5 ‘‘(aa) to cease all benefit ac6 cruals, or 

7 ‘‘(bb) to provide future ben8 efit accruals only to a closed 

9 class of participants, 

10 ‘‘(II) the plan satisfies subpara11 graph (A) (without regard to this sub12 paragraph) as of the effective date of 

13 the amendment, and 

14 ‘‘(III) the amendment was adopt15 ed before April 5, 2017, or the plan is 

16 described in clause (ii). 

17 ‘‘(ii) PLANS DESCRIBED.—A plan is 

18 described in this clause if the plan would 

19 be described in subsection (o)(1)(C), as ap20 plied for purposes of subsection 

21 (o)(1)(B)(iii)(IV) and by treating the effec22 tive date of the amendment as the date the 

23 class was closed for purposes of subsection 

24 (o)(1)(C). 


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

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

3 410(b)(6)(C), the amendments described in 

4 clause (i) shall not be treated as a signifi5 cant change in coverage under section 

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

7 ‘‘(iv) SPUN-OFF PLANS.—For pur8 poses of this subparagraph, if a portion of 

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

10 another employer, the treatment under 

11 clause (i) of the spun-off plan shall con12 tinue with respect to the other employer.’’. 

13 (c) EFFECTIVE DATE.— 

14 (1) IN GENERAL.—Except as provided in para15 graph (2), the amendments made by this section 

16 shall take effect on the date of the enactment of this 

17 Act, without regard to whether any plan modifica18 tions referred to in such amendments are adopted or 

19 effective before, on, or after such date of enactment. 

20 (2) SPECIAL RULES.— 

21 (A) ELECTION OF EARLIER APPLICA22 TION.—At the election of the plan sponsor, the 

23 amendments made by this section shall apply to 

24 plan years beginning after December 31, 2013. 


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1 (B) CLOSED CLASSES OF PARTICIPANTS.— 

2 For purposes of paragraphs (1)(A)(iii), 

3 (1)(B)(iii)(IV), and (2)(A)(iv) of section 401(o) 

4 of the Internal Revenue Code of 1986 (as added 

5 by this section), a closed class of participants 

6 shall be treated as being closed before April 5, 

7 2017, if the plan sponsor’s intention to create 

8 such closed class is reflected in formal written 

9 documents and communicated to participants 

10 before such date. 

11 (C) CERTAIN POST-ENACTMENT PLAN

12 AMENDMENTS.—A plan shall not be treated as 

13 failing to be eligible for the application of sec14 tion 401(o)(1)(A), 401(o)(1)(B)(iii), or 

15 401(a)(26) of such Code (as added by this sec16 tion) to such plan solely because in the case 

17 of— 

18 (i) such section 401(o)(1)(A), the plan 

19 was amended before the date of the enact20 ment of this Act to eliminate 1 or more 

21 benefits, rights, or features, and is further 

22 amended after such date of enactment to 

23 provide such previously eliminated benefits, 

24 rights, or features to a closed class of par25 ticipants, or 


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1 (ii) such section 401(o)(1)(B)(iii) or 

2 section 401(a)(26), the plan was amended 

3 before the date of the enactment of this 

4 Act to cease all benefit accruals, and is 

5 further amended after such date of enact6 ment to provide benefit accruals to a closed 

7 class of participants. 

8 Any such section shall only apply if the plan 

9 otherwise meets the requirements of such sec10 tion and in applying such section, the date the 

11 class of participants is closed shall be the effec12 tive date of the later amendment. 

13 TITLE III—OTHER BENEFITS 

14 SEC. 301. BENEFITS PROVIDED TO VOLUNTEER FIRE15 FIGHTERS AND EMERGENCY MEDICAL RE16 SPONDERS. 

17 (a) INCREASE IN DOLLAR LIMITATION ON QUALI18 FIED PAYMENTS.—Subparagraph (B) of section 

19 139B(c)(2) of the Internal Revenue Code of 1986 is 

20 amended by striking ‘‘$30’’ and inserting ‘‘$50’’. 

21 (b) EXTENSION.—Section 139B(d) of the Internal 

22 Revenue Code of 1986 is amended by striking ‘‘beginning 

23 after December 31, 2010.’’ and inserting ‘‘beginning— 

24 ‘‘(1) after December 31, 2010, and before Jan25 uary 1, 2020, or 


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1 ‘‘(2) after December 31, 2020.’’. 

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

3 this section shall apply to taxable years beginning after 

4 December 31, 2019. 

5 SEC. 302. EXPANSION OF SECTION 529 PLANS. 

6 (a) DISTRIBUTIONS FOR CERTAIN EXPENSES ASSO7 CIATED WITH REGISTERED APPRENTICESHIP PRO8 GRAMS.—Section 529(c) of the Internal Revenue Code of 

9 1986 is amended by adding at the end the following new 

10 paragraph: 

11 ‘‘(8) TREATMENT OF CERTAIN EXPENSES ASSO12 CIATED WITH REGISTERED APPRENTICESHIP PRO13 GRAMS.—Any reference in this subsection to the 

14 term ‘qualified higher education expense’ shall in15 clude a reference to expenses for fees, books, sup16 plies, and equipment required for the participation 

17 of a designated beneficiary in an apprenticeship pro18 gram registered and certified with the Secretary of 

19 Labor under section 1 of the National Apprentice20 ship Act (29 U.S.C. 50).’’. 

21 (b) DISTRIBUTIONS FOR CERTAIN HOMESCHOOLING

22 EXPENSES.—Section 529(c)(7) of such Code is amended 

23 by striking ‘‘include a reference to’’ and all that follows 

24 and inserting: ‘‘include a reference to— 


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1 ‘‘(A) expenses for tuition in connection 

2 with enrollment or attendance of a designated 

3 beneficiary at an elementary or secondary pub4 lic, private, or religious school, and 

5 ‘‘(B) expenses, with respect to a des6 ignated beneficiary, for— 

7 ‘‘(i) curriculum and curricular mate8 rials, 

9 ‘‘(ii) books or other instructional ma10 terials, 

11 ‘‘(iii) online educational materials, 

12 ‘‘(iv) tuition for tutoring or edu13 cational classes outside of the home (but 

14 only if the tutor or class instructor is not 

15 related (within the meaning of section 

16 152(d)(2)) to the student), 

17 ‘‘(v) dual enrollment in an institution 

18 of higher education, and 

19 ‘‘(vi) educational therapies for stu20 dents with disabilities, 

21 in connection with a homeschool (whether treat22 ed as a homeschool or a private school for pur23 poses of applicable State law).’’. 

24 (c) DISTRIBUTIONS FOR QUALIFIED EDUCATION

25 LOAN REPAYMENTS.— 


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1 (1) IN GENERAL.—Section 529(c) of such Code, 

2 as amended by subsection (a), is amended by adding 

3 at the end the following new paragraph: 

4 ‘‘(9) TREATMENT OF QUALIFIED EDUCATION

5 LOAN REPAYMENTS.— 

6 ‘‘(A) IN GENERAL.—Any reference in this 

7 subsection to the term ‘qualified higher edu8 cation expense’ shall include a reference to 

9 amounts paid as principal or interest on any 

10 qualified education loan (as defined in section 

11 221(d)) of the designated beneficiary or a sib12 ling of the designated beneficiary. 

13 ‘‘(B) LIMITATION.—The amount of dis14 tributions treated as a qualified higher edu15 cation expense under this paragraph with re16 spect to the loans of any individual shall not ex17 ceed $10,000 (reduced by the amount of dis18 tributions so treated for all prior taxable years). 

19 ‘‘(C) SPECIAL RULES FOR SIBLINGS OF

20 THE DESIGNATED BENEFICIARY.— 

21 ‘‘(i) SEPARATE ACCOUNTING.—For 

22 purposes of subparagraph (B) and sub23 section (d), amounts treated as a qualified 

24 higher education expense with respect to 

25 the loans of a sibling of the designated 


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1 beneficiary shall be taken into account 

2 with respect to such sibling and not with 

3 respect to such designated beneficiary. 

4 ‘‘(ii) SIBLING DEFINED.—For pur5 poses of this paragraph, the term ‘sibling’ 

6 means an individual who bears a relation7 ship to the designated beneficiary which is 

8 described in section 152(d)(2)(B).’’. 

9 (2) COORDINATION WITH DEDUCTION FOR STU10 DENT LOAN INTEREST.—Section 221(e)(1) of such 

11 Code is amended by adding at the end the following: 

12 ‘‘The deduction otherwise allowable under subsection 

13 (a) (prior to the application of subsection (b)) to the 

14 taxpayer for any taxable year shall be reduced (but 

15 not below zero) by so much of the distributions 

16 treated as a qualified higher education expense 

17 under section 529(c)(9) with respect to loans of the 

18 taxpayer as would be includible in gross income 

19 under section 529(c)(3)(A) for such taxable year but 

20 for such treatment.’’. 

21 (d) DISTRIBUTIONS FOR CERTAIN ELEMENTARY AND

22 SECONDARY SCHOOL EXPENSES IN ADDITION TO TUI23 TION.—Section 529(c)(7)(A) of such Code, as amended by 

24 subsection (b), is amended to read as follows: 


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1 ‘‘(A) expenses described in section 

2 530(b)(3)(A)(i) in connection with enrollment 

3 or attendance of a designated beneficiary at an 

4 elementary or secondary public, private, or reli5 gious school, and’’. 

6 (e) EFFECTIVE DATES.—The amendments made by 

7 this section shall apply to distributions made after Decem8 ber 31, 2018. 

9 TITLE IV—REVENUE 

10 PROVISIONS 

11 SEC. 401. MODIFICATIONS OF REQUIRED DISTRIBUTION 

12 RULES FOR DESIGNATED BENEFICIARIES. 

13 (a) MODIFICATION OF RULES WHERE EMPLOYEE

14 DIES BEFORE ENTIRE DISTRIBUTION.— 

15 (1) IN GENERAL.—Section 401(a)(9) of the In16 ternal Revenue Code of 1986 is amended by adding 

17 at the end the following new subparagraph: 

18 ‘‘(H) SPECIAL RULES FOR CERTAIN DE19 FINED CONTRIBUTION PLANS.—In the case of a 

20 defined contribution plan, if an employee dies 

21 before the distribution of the employee’s entire 

22 interest— 

23 ‘‘(i) IN GENERAL.—Except in the case 

24 of a beneficiary who is not a designated 

25 beneficiary, subparagraph (B)(ii)— 


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1 ‘‘(I) shall be applied by sub2 stituting ‘10 years’ for ‘5 years’, and 

3 ‘‘(II) shall apply whether or not 

4 distributions of the employee’s inter5 ests have begun in accordance with 

6 subparagraph (A). 

7 ‘‘(ii) EXCEPTION ONLY FOR ELIGIBLE

8 DESIGNATED BENEFICIARIES.—Subpara9 graph (B)(iii) shall apply only in the case 

10 of an eligible designated beneficiary. 

11 ‘‘(iii) RULES UPON DEATH OF ELIGI12 BLE DESIGNATED BENEFICIARY.—If an el13 igible designated beneficiary dies before the 

14 portion of the employee’s interest to which 

15 this subparagraph applies is entirely dis16 tributed, the exception under clause (iii) 

17 shall not apply to any beneficiary of such 

18 eligible designated beneficiary and the re19 mainder of such portion shall be distrib20 uted within 10 years after the death of 

21 such eligible designated beneficiary. 

22 ‘‘(iv) APPLICATION TO ELIGIBLE RE23 TIREMENT PLANS.—For purposes of apply24 ing the provisions of this subparagraph in 

25 determining the amounts required to be 


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1 distributed pursuant to this paragraph, all 

2 eligible retirement plans (as defined in sec3 tion 402(c)(8)(B)) other than a defined 

4 benefit plan shall be treated as a defined 

5 contribution plan.’’. 

6 (2) DEFINITION OF ELIGIBLE DESIGNATED

7 BENEFICIARY.—Section 401(a)(9)(E) of such Code 

8 is amended to read as follows: 

9 ‘‘(E) DEFINITIONS AND RULES RELATING

10 TO DESIGNATED BENEFICIARY.—For purposes 

11 of this paragraph— 

12 ‘‘(i) DESIGNATED BENEFICIARY.—The 

13 term ‘designated beneficiary’ means any 

14 individual designated as a beneficiary by 

15 the employee. 

16 ‘‘(ii) ELIGIBLE DESIGNATED BENE17 FICIARY.—The term ‘eligible designated 

18 beneficiary’ means, with respect to any em19 ployee, any designated beneficiary who is— 

20 ‘‘(I) the surviving spouse of the 

21 employee, 

22 ‘‘(II) subject to clause (iii), a 

23 child of the employee who has not 

24 reached majority (within the meaning 

25 of subparagraph (F)), 


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1 ‘‘(III) disabled (within the mean2 ing of section 72(m)(7)), 

3 ‘‘(IV) a chronically ill individual 

4 (within the meaning of section 

5 7702B(c)(2), except that the require6 ments of subparagraph (A)(i) thereof 

7 shall only be treated as met if there is 

8 a certification that, as of such date, 

9 the period of inability described in 

10 such subparagraph with respect to the 

11 individual is an indefinite one which is 

12 reasonably expected to be lengthy in 

13 nature), or 

14 ‘‘(V) an individual not described 

15 in any of the preceding subclauses 

16 who is not more than 10 years young17 er than the employee. 

18 ‘‘(iii) SPECIAL RULE FOR CHIL19 DREN.—Subject to subparagraph (F), an 

20 individual described in clause (ii)(II) shall 

21 cease to be an eligible designated bene22 ficiary as of the date the individual reaches 

23 majority and any remainder of the portion 

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1 paragraph (H)(ii) applies shall be distrib2 uted within 10 years after such date. 

3 ‘‘(iv) TIME FOR DETERMINATION OF

4 ELIGIBLE DESIGNATED BENEFICIARY.— 

5 The determination of whether a designated 

6 beneficiary is an eligible designated bene7 ficiary shall be made as of the date of 

8 death of the employee.’’. 

9 (3) EFFECTIVE DATES.— 

10 (A) IN GENERAL.—Except as provided in 

11 this paragraph and paragraphs (4) and (5), the 

12 amendments made by this subsection shall 

13 apply to distributions with respect to employees 

14 who die after December 31, 2019. 

15 (B) COLLECTIVE BARGAINING EXCEP16 TION.—In the case of a plan maintained pursu17 ant to 1 or more collective bargaining agree18 ments between employee representatives and 1 

19 or more employers ratified before the date of 

20 enactment of this Act, the amendments made 

21 by this subsection shall apply to distributions 

22 with respect to employees who die in calendar 

23 years beginning after the earlier of— 

24 (i) the later of— 


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1 (I) the date on which the last of 

2 such collective bargaining agreements 

3 terminates (determined without re4 gard to any extension thereof agreed 

5 to on or after the date of the enact6 ment of this Act), or 

7 (II) December 31, 2019, or 

8 (ii) December 31, 2021. 

9 For purposes of clause (i)(I), any plan amend10 ment made pursuant to a collective bargaining 

11 agreement relating to the plan which amends 

12 the plan solely to conform to any requirement 

13 added by this section shall not be treated as a 

14 termination of such collective bargaining agree15 ment. 

16 (C) GOVERNMENTAL PLANS.—In the case 

17 of a governmental plan (as defined in section 

18 414(d) of the Internal Revenue Code of 1986), 

19 subparagraph (A) shall be applied by sub20 stituting ‘‘December 31, 2021’’ for ‘‘December 

21 31, 2019’’. 

22 (4) EXCEPTION FOR CERTAIN EXISTING ANNU23 ITY CONTRACTS.— 

24 (A) IN GENERAL.—The amendments made 

25 by this subsection shall not apply to a qualified 


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1 annuity which is a binding annuity contract in 

2 effect on the date of enactment of this Act and 

3 at all times thereafter. 

4 (B) QUALIFIED ANNUITY.—For purposes 

5 of this paragraph, the term ‘‘qualified annuity’’ 

6 means, with respect to an employee, an annu7 ity— 

8 (i) which is a commercial annuity (as 

9 defined in section 3405(e)(6) of the Inter10 nal Revenue Code of 1986); 

11 (ii) under which the annuity payments 

12 are made over the life of the employee or 

13 over the joint lives of such employee and a 

14 designated beneficiary (or over a period 

15 not extending beyond the life expectancy of 

16 such employee or the joint life expectancy 

17 of such employee and a designated bene18 ficiary) in accordance with the regulations 

19 described in section 401(a)(9)(A)(ii) of 

20 such Code (as in effect before such amend21 ments) and which meets the other require22 ments of section 401(a)(9) of such Code 

23 (as so in effect) with respect to such pay24 ments; and 

25 (iii) with respect to which— 


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1 (I) annuity payments to the em2 ployee have begun before the date of 

3 enactment of this Act, and the em4 ployee has made an irrevocable elec5 tion before such date as to the method 

6 and amount of the annuity payments 

7 to the employee or any designated 

8 beneficiaries; or 

9 (II) if subclause (I) does not 

10 apply, the employee has made an ir11 revocable election before the date of 

12 enactment of this Act as to the meth13 od and amount of the annuity pay14 ments to the employee or any des15 ignated beneficiaries. 

16 (5) EXCEPTION FOR CERTAIN BENE17 FICIARIES.— 

18 (A) IN GENERAL.—If an employee dies be19 fore the effective date, then, in applying the 

20 amendments made by this subsection to such 

21 employee’s designated beneficiary who dies after 

22 such date— 

23 (i) such amendments shall apply to 

24 any beneficiary of such designated bene25 ficiary; and 


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1 (ii) the designated beneficiary shall be 

2 treated as an eligible designated bene3 ficiary for purposes of applying section 

4 401(a)(9)(H)(ii) of the Internal Revenue 

5 Code of 1986 (as in effect after such 

6 amendments). 

7 (B) EFFECTIVE DATE.—For purposes of 

8 this paragraph, the term ‘‘effective date’’ means 

9 the first day of the first calendar year to which 

10 the amendments made by this subsection apply 

11 to a plan with respect to employees dying on or 

12 after such date. 

13 (b) PROVISIONS RELATING TO PLAN AMEND14 MENTS.— 

15 (1) IN GENERAL.—If this subsection applies to 

16 any plan amendment— 

17 (A) such plan shall be treated as being op18 erated in accordance with the terms of the plan 

19 during the period described in paragraph 

20 (2)(B)(i); and 

21 (B) except as provided by the Secretary of 

22 the Treasury, such plan shall not fail to meet 

23 the requirements of section 411(d)(6) of the In24 ternal Revenue Code of 1986 and section 

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1 curity Act of 1974 by reason of such amend2 ment. 

3 (2) AMENDMENTS TO WHICH SUBSECTION AP4 PLIES.— 

5 (A) IN GENERAL.—This subsection shall 

6 apply to any amendment to any plan or which 

7 is made— 

8 (i) pursuant to any amendment made 

9 by this section or pursuant to any regula10 tion issued by the Secretary of the Treas11 ury under this section or such amend12 ments; and 

13 (ii) on or before the last day of the 

14 first plan year beginning after December 

15 31, 2021, or such later date as the Sec16 retary of the Treasury may prescribe. 

17 In the case of a governmental or collectively 

18 bargained plan to which subparagraph (B) or 

19 (C) of subsection (a)(4) applies, clause (ii) shall 

20 be applied by substituting the date which is 2 

21 years after the date otherwise applied under 

22 such clause. 

23 (B) CONDITIONS.—This subsection shall 

24 not apply to any amendment unless— 

25 (i) during the period— 


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1 (I) beginning on the date the leg2 islative or regulatory amendment de3 scribed in paragraph (1)(A) takes ef4 fect (or in the case of a plan amend5 ment not required by such legislative 

6 or regulatory amendment, the effec7 tive date specified by the plan); and 

8 (II) ending on the date described 

9 in subparagraph (A)(ii) (or, if earlier, 

10 the date the plan amendment is 

11 adopted), 

12 the plan is operated as if such plan amend13 ment were in effect; and 

14 (ii) such plan amendment applies 

15 retroactively for such period. 

16 SEC. 402. INCREASE IN PENALTY FOR FAILURE TO FILE. 

17 (a) IN GENERAL.—The second sentence of subsection 

18 (a) of section 6651 of the Internal Revenue Code of 1986 

19 is amended by striking ‘‘$205’’ and inserting ‘‘$400’’. 

20 (b) INFLATION ADJUSTMENT.—Section 6651(j)(1) of 

21 such Code is amended by striking ‘‘$205’’ and inserting 

22 ‘‘$400’’. 

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

24 this section shall apply to returns the due date for which 

25 (including extensions) is after December 31, 2019. 


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1 SEC. 403. INCREASED PENALTIES FOR FAILURE TO FILE 

2 RETIREMENT PLAN RETURNS. 

3 (a) IN GENERAL.—Subsection (e) of section 6652 of 

4 the Internal Revenue Code of 1986 is amended— 

5 (1) by striking ‘‘$25’’ and inserting ‘‘$105’’; 

6 and 

7 (2) by striking ‘‘$15,000’’ and inserting 

8 ‘‘$50,000’’. 

9 (b) ANNUAL REGISTRATION STATEMENT AND NOTI10 FICATION OF CHANGES.—Subsection (d) of section 6652 

11 of the Internal Revenue Code of 1986 is amended— 

12 (1) by striking ‘‘$1’’ both places it appears in 

13 paragraphs (1) and (2) and inserting ‘‘$2’’; 

14 (2) by striking ‘‘$5,000’’ in paragraph (1) and 

15 inserting ‘‘$10,000’’; and 

16 (3) by striking ‘‘$1,000’’ in paragraph (2) and 

17 inserting ‘‘$5,000’’. 

18 (c) FAILURE TO PROVIDE NOTICE.—Subsection (h) 

19 of section 6652 of the Internal Revenue Code of 1986 is 

20 amended— 

21 (1) by striking ‘‘$10’’ and inserting ‘‘$100’’; 

22 and 

23 (2) by striking ‘‘$5,000’’ and inserting 

24 ‘‘$50,000’’. 

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

26 this subsection shall apply to returns, statements, and noVerDate Sep 11 2014 00:52 Apr 13, 2019 Jkt 089200 PO 00000 Frm 00098 Fmt 6652 Sfmt 6201 E:\BILLS\H1994.IH H1994

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1 tifications required to be filed, and notices required to be 

2 provided, after December 31, 2019. 

3 SEC. 404. INCREASE INFORMATION SHARING TO ADMIN4 ISTER EXCISE TAXES. 

5 (a) IN GENERAL.—Section 6103(o) of the Internal 

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

7 the following new paragraph: 

8 ‘‘(3) TAXES IMPOSED BY SECTION 4481.—Re9 turns and return information with respect to taxes 

10 imposed by section 4481 shall be open to inspection 

11 by or disclosure to officers and employees of United 

12 States Customs and Border Protection of the De13 partment of Homeland Security whose official duties 

14 require such inspection or disclosure for purposes of 

15 administering such section.’’. 

16 (b) CONFORMING AMENDMENTS.—Paragraph (4) of 

17 section 6103(p) of the Internal Revenue Code of 1986 is 

18 amended by striking ‘‘or (o)(1)(A)’’ each place it appears 

19 and inserting ‘‘, (o)(1)(A), or (o)(3)’’. 

Æ 


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