II 

116TH CONGRESS 

1ST SESSION S. 1431 

To amend the Internal Revenue Code of 1986 to reform retirement provisions, 

and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

MAY 13, 2019 

Mr. PORTMAN (for himself and Mr. CARDIN) introduced the following bill; 

which was read twice and referred to the Committee on Finance 

A BILL 

To amend the Internal Revenue Code of 1986 to reform 

retirement provisions, 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 ‘‘Retirement Security and Savings Act of 2019’’. 

6 (b) AMENDMENT OF 1986 CODE.—Except as other7 wise expressly provided, whenever in this Act an amend8 ment or repeal is expressed in terms of an amendment 

9 to, or repeal of, a section or other provision, the reference 


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1 shall be considered to be made to a section or other provi2 sion of the Internal Revenue Code of 1986. 

3 (c) TABLE OF CONTENTS.—The table of contents for 

4 this Act is as follows: 

Sec. 1. Short title, etc. 

TITLE I—EXPANDING COVERAGE AND INCREASING RETIREMENT 

SAVINGS 

Sec. 101. Secure deferral arrangements. 

Sec. 102. Facilitating automatic enrollment. 

Sec. 103. Credit for employers with respect to modified safe harbor requirements. 

Sec. 104. Expansion of saver’s credit. 

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

year to participate. 

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

covering part-time employees. 

Sec. 107. 60-day rollover to inherited individual retirement plan of nonspouse 

beneficiary. 

Sec. 108. Increase in age for required beginning date for mandatory distributions. 

Sec. 109. Updating of mortality tables for minimum required distributions. 

Sec. 110. Increase in credit limitation for small employer pension plan startup 

costs of certain employers. 

Sec. 111. Credit for re-enrollment. 

Sec. 112. Treatment of student loan payments as elective deferrals for purposes 

of matching contributions. 

Sec. 113. Treatment of qualified retirement planning services. 

Sec. 114. Allow additional nonelective contributions to simple plans. 

Sec. 115. Reform of the minimum participation rule. 

Sec. 116. Expansion of Employee Plans Compliance Resolution System. 

Sec. 117. Enhancement of 403(b) plans. 

Sec. 118. Eligibility for participation in retirement plans. 

Sec. 119. Small immediate financial incentives for contributing to a plan. 

Sec. 120. Indexing IRA catch-up limit. 

Sec. 121. Higher catch-up limit to apply at age 60. 

TITLE II—PRESERVATION OF INCOME 

Sec. 201. Qualifying longevity annuity contracts. 

Sec. 202. Remove required minimum distribution barriers for life annuities. 

Sec. 203. Eliminating a penalty on partial annuitization. 

Sec. 204. Insurance-dedicated exchange-traded funds. 

TITLE III—SIMPLIFICATION AND CLARIFICATION OF 

RETIREMENT PLAN RULES 

Sec. 301. Review and report to the Congress relating to reporting and disclosure requirements. 

Sec. 302. Consolidation of defined contribution plan notices. 


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Sec. 303. Performance benchmarks for asset allocation funds. 

Sec. 304. Permit nonspousal beneficiaries to roll assets to plans. 

Sec. 305. Deferral agreements. 

Sec. 306. Simplifying 402(f) notices. 

Sec. 307. Treatment of custodial accounts on termination of section 403(b) 

plans. 

Sec. 308. Permit plans to use base pay or rate of pay calculation. 

Sec. 309. Roth SIMPLE IRAs. 

Sec. 310. Reduction in excise tax on certain accumulations in qualified retirement plans. 

Sec. 311. Clarification of catch-up contributions with respect to separate lines 

of business. 

Sec. 312. Clarification of substantially equal periodic payment rule. 

Sec. 313. Clarification of treatment of distributions of annuity contracts. 

Sec. 314. Clarification regarding elective deferrals. 

Sec. 315. Tax treatment of certain nontrade or business SEP contributions. 

Sec. 316. Allow certain plan transfers and mergers. 

Sec. 317. Exception from required distributions where aggregate retirement 

savings do not exceed $100,000. 

Sec. 318. Hardship rules for 403(b) plans. 

Sec. 319. IRA preservation. 

Sec. 320. Elimination of additional tax on certain distributions. 

Sec. 321. Distributions to firefighters. 

Sec. 322. Eliminating unnecessary plan requirements related to unenrolled participants. 

TITLE IV—DEFINED BENEFIT PLAN REFORMS 

Sec. 401. Cash balance. 

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

Sec. 403. Corrections of mortality tables. 

Sec. 404. Cease double-indexing the variable rate premium. 

Sec. 405. Enhancing retiree health benefits in pension plans. 

TITLE V—REFORMING PLAN RULES TO HARMONIZE WITH IRA 

RULES 

Sec. 501. Roth plan distribution rules. 

Sec. 502. Distributions for charitable purposes. 

Sec. 503. Surviving spouse election to be treated as employee. 

Sec. 504. Rollovers from Roth IRAs to plans. 

TITLE VI—ADMINISTRATIVE PROVISIONS 

Sec. 601. Provisions relating to plan amendments. 


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1 TITLE I—EXPANDING COVERAGE 

2 AND INCREASING RETIRE3 MENT SAVINGS 

4 SEC. 101. SECURE DEFERRAL ARRANGEMENTS. 

5 (a) IN GENERAL.—Subsection (k) of section 401, as 

6 amended by Public Law 115–123, is further amended by 

7 adding at the end the following new paragraph: 

8 ‘‘(15) ALTERNATIVE METHOD FOR SECURE DE9 FERRAL ARRANGEMENTS TO MEET NONDISCRIMINA10 TION REQUIREMENTS.— 

11 ‘‘(A) IN GENERAL.—A secure deferral ar12 rangement shall be treated as meeting the re13 quirements of paragraph (3)(A)(ii). 

14 ‘‘(B) SECURE DEFERRAL ARRANGE15 MENT.—For purposes of this paragraph, the 

16 term ‘secure deferral arrangement’ means any 

17 cash or deferred arrangement which meets the 

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

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

20 this paragraph. 

21 ‘‘(C) QUALIFIED PERCENTAGE.—For pur22 poses of this paragraph, with respect to any 

23 employee, the term ‘qualified percentage’ 

24 means, in lieu of the meaning given such term 

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1 mined under the arrangement if such percent2 age is applied uniformly and is— 

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

4 than 10 percent, during the period ending 

5 on the last day of the first plan year which 

6 begins after the date on which the first 

7 elective contribution described in para8 graph (13)(C)(i) is made with respect to 

9 such employee, 

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

11 first plan year following the plan year de12 scribed in clause (i), 

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

14 second plan year following the plan year 

15 described in clause (i), 

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

17 third plan year following the plan year de18 scribed in clause (i), and 

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

20 subsequent plan year. 

21 ‘‘(D) MATCHING CONTRIBUTIONS.— 

22 ‘‘(i) IN GENERAL.—For purposes of 

23 this paragraph, an arrangement shall be 

24 treated as having met the requirements of 

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1 ployer makes matching contributions on 

2 behalf of each employee who is not a highly 

3 compensated employee in an amount equal 

4 to the sum of— 

5 ‘‘(I) 100 percent of the elective 

6 contributions of the employee to the 

7 extent such contributions do not ex8 ceed 2 percent of compensation, 

9 ‘‘(II) 50 percent of so much of 

10 such contributions as exceed 2 percent 

11 but do not exceed 6 percent of com12 pensation, plus 

13 ‘‘(III) 20 percent of so much of 

14 such contributions as exceed 6 percent 

15 but do not exceed 10 percent of com16 pensation. 

17 ‘‘(ii) APPLICATION OF RULES FOR

18 MATCHING CONTRIBUTIONS.—The rules of 

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

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

21 shall apply for purposes of clause (i), but 

22 the rule of clause (iii) of paragraph 

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

24 The rate of matching contribution for each 

25 incremental deferral must be at least as 


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

2 may be higher, so long as such rate does 

3 not increase as an employee’s rate of elec4 tive contributions increases.’’. 

5 (b) MATCHING CONTRIBUTIONS AND EMPLOYEE

6 CONTRIBUTIONS.—Subsection (m) of section 401 is 

7 amended by redesignating paragraph (13) as paragraph 

8 (14) and by inserting after paragraph (12) the following 

9 new paragraph: 

10 ‘‘(13) ALTERNATIVE METHOD FOR SECURE DE11 FERRAL ARRANGEMENTS.—A defined contribution 

12 plan shall be treated as meeting the requirements of 

13 paragraph (2) with respect to matching contribu14 tions and employee contributions if the plan— 

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

16 defined in subsection (k)(15)), 

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

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

19 ‘‘(C) provides that matching contributions 

20 on behalf of any employee may not be made 

21 with respect to an employee’s contributions or 

22 elective deferrals in excess of 10 percent of the 

23 employee’s compensation.’’. 

24 (c) CONFORMING AMENDMENTS.—Subparagraph 

25 (H) of section 416(g)(4) is amended— 


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

2 401(k)(12) or 401(k)(13)’’ and inserting ‘‘paragraph 

3 (12), (13), or (15) of section 401(k)’’, and 

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

5 401(m)(11) or 401(m)(12)’’ and inserting ‘‘para6 graph (11), (12), or (13) of section 401(m)’’. 

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

8 this section shall apply to plan years beginning after De9 cember 31, 2019. 

10 SEC. 102. FACILITATING AUTOMATIC ENROLLMENT. 

11 The Secretary of the Treasury (or the Secretary’s 

12 delegate) shall promulgate regulations or other guidance 

13 which— 

14 (1) simplifies and clarifies the rules regarding 

15 the timing of participant notices required under the 

16 Internal Revenue Code of 1986 with respect to an 

17 eligible automatic enrollment contribution arrange18 ment (within the meaning of section 414(w)(3) of 

19 the Internal Revenue Code of 1986) or required 

20 under section 336(c)(3) of the Consolidated Appro21 priations Act, 2016 with respect to an automatic 

22 contribution arrangement (within the meaning of 

23 section 336(c)(2) of such Act), with specific applica24 tion to— 


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1 (A) plans which allow employees to be eli2 gible for participation immediately upon begin3 ning employment; and 

4 (B) employers with multiple payroll and 

5 administrative systems; and 

6 (2) simplifies and clarifies the application of 

7 automatic escalation features under arrangements 

8 described in paragraph (1) in the context of employ9 ers with multiple payroll and administrative systems. 

10 Such regulations or guidance shall address the particular 

11 case of employees within the same plan who are subject 

12 to different notice timing and different percentage require13 ments, and provide assistance for plan sponsors in man14 aging such cases. 

15 SEC. 103. CREDIT FOR EMPLOYERS WITH RESPECT TO 

16 MODIFIED SAFE HARBOR REQUIREMENTS. 

17 (a) IN GENERAL.—Subpart D of part IV of sub18 chapter A of chapter 1 is amended by adding at the end 

19 the following new section: 

20 ‘‘SEC. 45T. CREDIT FOR SMALL EMPLOYERS WITH RESPECT 

21 TO MODIFIED SAFE HARBOR REQUIREMENTS 

22 FOR AUTOMATIC CONTRIBUTION ARRANGE23 MENTS. 

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

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


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1 credit determined under this section for any taxable year 

2 is the amount equal to the total of the employer’s match3 ing contributions under section 401(k)(15)(D) during the 

4 taxable year on behalf of employees who are not highly 

5 compensated employees. 

6 ‘‘(b) LIMITATIONS.— 

7 ‘‘(1) LIMITATION WITH RESPECT TO COM8 PENSATION.—The credit determined under sub9 section (a) with respect to contributions made on be10 half of any employee shall not exceed 2 percent of 

11 the compensation of such employee for the taxable 

12 year. 

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

14 PARTICIPATION.—Credit shall be determined under 

15 subsection (a) with respect to contributions made on 

16 behalf of any employee only during the first 5 years 

17 such employee participates in the qualified automatic 

18 contribution arrangement. 

19 ‘‘(c) DEFINITIONS.— 

20 ‘‘(1) IN GENERAL.—Any term used in this sec21 tion which is also used in section 401(k)(15) shall 

22 have the same meaning as when used in such sec23 tion. 


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

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

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

5 shall be allowable under this title for any contribution with 

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

7 (b) CREDIT TO BE PART OF GENERAL BUSINESS

8 CREDIT.—Subsection (b) of section 38 is amended by 

9 striking ‘‘plus’’ at the end of paragraph (31), by striking 

10 the period at the end of paragraph (32) and inserting ‘‘, 

11 plus’’, and by adding at the end the following new para12 graph: 

13 ‘‘(33) the safe harbor adoption credit deter14 mined under section 45T.’’. 

15 (c) CONFORMING AMENDMENT.—Paragraph (2) of 

16 section 3511(d) is amended— 

17 (1) by redesignating subparagraphs (F), (G), 

18 and (H) as subparagraphs (G), (H), and (I), respec19 tively, and 

20 (2) by inserting after subparagraph (E) the fol21 lowing new subparagraph: 

22 ‘‘(F) section 45T (safe harbor adoption 

23 credit),’’. 

24 (d) CLERICAL AMENDMENT.—The table of sections 

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


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1 is amended by adding after the item relating to section 

2 45S the following new item: 

‘‘Sec. 45T. Credit for small employers with respect to modified safe harbor requirements for automatic contribution arrangements.’’. 

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

4 this section shall apply to taxable years which include any 

5 portion of a plan year beginning after December 31, 2019. 

6 SEC. 104. EXPANSION OF SAVER’S CREDIT. 

7 (a) EXPANSION.—Paragraph (1) of section 25B(b) is 

8 amended by striking ‘‘$32,500’’ both places it appears in 

9 subparagraphs (B) and (C) of paragraph (1) and inserting 

10 ‘‘$40,000’’. 

11 (b) TESTING PERIOD.—Subparagraph (B) of section 

12 25B(d)(2) is amended to read as follows: 

13 ‘‘(B) TESTING PERIOD.—For purposes of 

14 subparagraph (A), the testing period, with re15 spect to a taxable year, is the period which in16 cludes— 

17 ‘‘(i) such taxable year, and 

18 ‘‘(ii) the 3 preceding taxable years.’’. 

19 (c) TREATMENT AS REFUNDABLE.— 

20 (1) CREDIT MOVED TO SUBPART RELATING TO

21 REFUNDABLE CREDITS.— 

22 (A) IN GENERAL.—The Internal Revenue 

23 Code of 1986 is amended— 


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1 (i) by redesignating section 25B, as 

2 amended by this Act, as section 36C; and 

3 (ii) by moving such section, as so re4 designated, from subpart A of part IV of 

5 subchapter A of chapter 1 to the location 

6 immediately before section 37 in subpart C 

7 of part IV of subchapter A of chapter 1. 

8 (B) TECHNICAL AMENDMENTS.— 

9 (i) The table of sections for subpart A 

10 of part IV of subchapter A of chapter 1 is 

11 amended by striking the item relating to 

12 section 25B. 

13 (ii) The table of sections for subpart 

14 C of part IV of subchapter A of chapter 1 

15 is amended by inserting after the item re16 lating to section 36B the following new 

17 item: 

‘‘Sec. 36C. Elective deferrals and IRA contributions by certain individuals.’’. 

18 (2) MANDATORY DEPOSIT INTO QUALIFIED AC19 COUNT.— 

20 (A) NO REDUCTION OF TAX.—Subsection 

21 (a) of section 36C, as moved and redesignated 

22 by paragraph (1), is amended by striking 

23 ‘‘against the tax imposed by this subtitle’’. 

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1 nated, is amended by adding at the end the fol2 lowing new subsection: 

3 ‘‘(g) DEPOSIT INTO QUALIFIED ACCOUNT.— 

4 ‘‘(1) IN GENERAL.—Any amount allowed as a 

5 credit under subsection (a) shall not be allowed as 

6 a credit against any tax imposed by this subtitle but 

7 instead shall be treated as an overpayment under 

8 section 6401(b) and— 

9 ‘‘(A) shall be paid on behalf of the indi10 vidual taxpayer to a Roth IRA or a designated 

11 Roth account (within the meaning of section 

12 402A) under an applicable retirement plan des13 ignated by the individual to be invested in a 

14 manner designated by the individual, except 

15 that in the case of a joint return each spouse 

16 shall be entitled to designate an applicable re17 tirement plan and investments with respect to 

18 payments attributable to such spouse, or 

19 ‘‘(B) in the case of a taxpayer who does 

20 not properly designate an applicable retirement 

21 plan in a timely manner or who designates an 

22 applicable retirement plan which does not ac23 cept such amount in a timely manner, shall be 

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1 scribed by the Secretary which provides treat2 ment comparable to the treatment under sub3 paragraph (A) and which— 

4 ‘‘(i) is designed to maintain fees and 

5 other charges at an appropriately low level 

6 taking into account the size of the account 

7 balance, and 

8 ‘‘(ii) utilizes, to the extent appro9 priate, private sector services. 

10 ‘‘(2) APPLICABLE RETIREMENT PLAN.—For 

11 purposes of this subsection, the term ‘applicable re12 tirement plan’ means a plan which elects to accept 

13 deposits under this subsection and which is de14 scribed in clause (iii), (iv), (v), or (vi) of section 

15 402(c)(8)(B) or in section 408A(b). 

16 ‘‘(3) TREATMENT OF PAYMENTS.—In the case 

17 of any payment under this subsection— 

18 ‘‘(A) except as otherwise provided in this 

19 section or by the Secretary under regulations, 

20 such payment shall be treated in the same man21 ner as a payment made by the individual on 

22 whose behalf such payment was made, 

23 ‘‘(B) such payment shall not be treated as 

24 income to the taxpayer, and 


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1 ‘‘(C) such payment shall not be taken into 

2 account with respect to any applicable limita3 tion under section 402(g)(1), 403(b), 408(a)(1), 

4 408(b)(2)(B), 408A(c)(2), 414(v)(2), 415(c), or 

5 457(b)(2). 

6 ‘‘(4) TREATMENT OF QUALIFIED PLANS, ETC.— 

7 A plan or arrangement to which a payment is made 

8 under this subsection shall not be treated as vio9 lating any requirement under section 401, 403, 408, 

10 or 457 solely by reason of accepting such payment. 

11 ‘‘(5) ERRONEOUS CREDITS.—If any payment is 

12 erroneously paid under this subsection, the amount 

13 of such erroneous payment shall be treated as an 

14 underpayment of tax.’’. 

15 (d) REGULATION AND PROMOTION.—The Secretary 

16 of the Treasury (or the Secretary’s delegate) shall take 

17 such steps as the Secretary (or delegate) determines are 

18 necessary and appropriate to increase public awareness of 

19 the credit provided under section 36C of the Internal Rev20 enue Code of 1986 (as amended and redesignated by this 

21 section). 

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

23 this section shall apply to taxable years beginning after 

24 December 31, 2019. 


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1 SEC. 105. QUALIFIED CASH OR DEFERRED ARRANGEMENTS 

2 MUST ALLOW LONG-TERM EMPLOYEES 

3 WORKING MORE THAN 500 BUT LESS THAN 

4 1,000 HOURS PER YEAR TO PARTICIPATE. 

5 (a) PARTICIPATION REQUIREMENT.— 

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

7 401(k)(2) is amended to read as follows: 

8 ‘‘(D) which does not require, as a condi9 tion of participation in the arrangement, that 

10 an employee complete a period of service with 

11 the employer (or employers) maintaining the 

12 plan extending beyond the close of the earlier 

13 of— 

14 ‘‘(i) the period permitted under sec15 tion 410(a)(1) (determined without regard 

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

17 ‘‘(ii) subject to the provisions of para18 graph (16), the first period of 2 consecu19 tive 12-month periods during each of which 

20 the employee has at least 500 hours of 

21 service.’’. 

22 (2) SPECIAL RULES.—Section 401(k), as 

23 amended by this Act, is further amended by adding 

24 at the end the following new paragraph: 


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

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

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

8 the last of the 12-month periods described in 

9 such paragraph. 

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

12 ‘‘(i) NONDISCRIMINATION RULES.—In 

13 the case of employees who are eligible to 

14 participate in the arrangement solely by 

15 reason of paragraph (2)(D)(ii)— 

16 ‘‘(I) notwithstanding subsection 

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

20 employees even if such contributions 

21 are made on behalf of other employees 

22 eligible to participate in the arrange23 ment, and 

24 ‘‘(II) an employer may elect to 

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1 plication of paragraphs (3), (11), 

2 (12), (13), and (15), subsection 

3 (a)(4), paragraphs (2), (10), (11), 

4 (12), and (13) of subsection (m), and 

5 section 410(b). 

6 ‘‘(ii) TOP-HEAVY RULES.—An em7 ployer may elect to exclude all employees 

8 who are eligible to participate in a plan 

9 maintained by the employer solely by rea10 son of paragraph (2)(D)(ii) from the appli11 cation of the vesting and benefit require12 ments under subsections (b) and (c) of sec13 tion 416. 

14 ‘‘(iii) VESTING.—For purposes of de15 termining whether an employee described 

16 in clause (i) has a nonforfeitable right to 

17 employer contributions (other than con18 tributions described in paragraph 

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

20 12-month period for which the employee 

21 has at least 500 hours of service shall be 

22 treated as a year of service. 

23 ‘‘(iv) EMPLOYEES WHO BECOME

24 FULL-TIME EMPLOYEES.—This subpara25 graph shall cease to apply to any employee 


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1 as of the first plan year beginning after 

2 the plan year in which the employee meets 

3 the requirements of section 

4 410(a)(1)(A)(ii) without regard to para5 graph (2)(D)(ii) of this subsection. 

6 ‘‘(C) EXCEPTION FOR EMPLOYEES UNDER

7 COLLECTIVELY BARGAINED PLANS, ETC.—Para8 graph (2)(D)(ii) shall not apply to employees 

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

10 ‘‘(D) SPECIAL RULES.— 

11 ‘‘(i) TIME OF PARTICIPATION.—The 

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

13 employee eligible to participate in an ar14 rangement solely by reason of paragraph 

15 (2)(D)(ii). 

16 ‘‘(ii) 12-MONTH PERIODS.—12-month 

17 periods shall be determined in the same 

18 manner as under the last sentence of sec19 tion 410(a)(3)(A).’’. 

20 (3) CONFORMING AMENDMENT.—Paragraph (1) 

21 of section 413(c) is amended by striking ‘‘Section 

22 410(a)’’ and inserting ‘‘Sections 401(k)(2)(D)(ii) 

23 and 410(a)’’. 

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

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1 cember 31, 2019, except that, for purposes of section 

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

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

4 before January 1, 2020, shall not be taken into account. 

5 SEC. 106. SEPARATE APPLICATION OF TOP HEAVY RULES 

6 TO DEFINED CONTRIBUTION PLANS COV7 ERING PART-TIME EMPLOYEES. 

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

9 is amended by adding at the end the following: 

10 ‘‘(C) SEPARATE APPLICATION TO EMPLOY11 EES NOT MEETING AGE AND SERVICE REQUIRE12 MENTS.—If employees not meeting the age or 

13 service requirements of section 410(a)(1) (with14 out regard to subparagraph (B) thereof) are 

15 covered under a plan of the employer which 

16 meets the requirements of paragraphs (A) and 

17 (B) separately with respect to such employees, 

18 such employees may be excluded from consider19 ation in determining whether any plan of the 

20 employer meets the requirements of subpara21 graphs (A) and (B).’’. 

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

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

24 the date of the enactment of this Act. 


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1 SEC. 107. 60-DAY ROLLOVER TO INHERITED INDIVIDUAL 

2 RETIREMENT PLAN OF NONSPOUSE BENE3 FICIARY. 

4 (a) IN GENERAL.—Section 402(c)(11) is amended by 

5 redesignating subparagraph (B) as subparagraph (C) and 

6 by striking subparagraph (A) and inserting the following: 

7 ‘‘(A) IN GENERAL.—If— 

8 ‘‘(i) any portion of a distribution at9 tributable to an employee is paid after the 

10 death of the employee to an individual who 

11 is a designated beneficiary (as defined by 

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

13 who is not the surviving spouse of the em14 ployee, and 

15 ‘‘(ii) such portion is transferred or 

16 paid to an individual retirement plan in a 

17 transfer or payment meeting the require18 ments of subparagraph (B), 

19 the preceding provisions of this subsection shall 

20 apply to such distribution in the same manner 

21 as if the designated beneficiary were the em22 ployee. 

23 ‘‘(B) REQUIREMENTS FOR TRANSFER OF

24 DISTRIBUTION.—The requirements of this sub25 paragraph are met with respect to the portion 

26 of any distribution if— 


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1 ‘‘(i) such portion is transferred or 

2 paid to an individual retirement plan de3 scribed in clause (i) or (ii) of paragraph 

4 (8)(B) established for the purposes of re5 ceiving the distribution on behalf of the 

6 designated beneficiary, 

7 ‘‘(ii) such individual retirement plan is 

8 established as an inherited individual re9 tirement account or individual retirement 

10 annuity (within the meaning of section 

11 408(d)(3)(C)), whichever is applicable, and 

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

13 insurance company, or other provider of 

14 the individual retirement plan that such in15 dividual retirement plan is being estab16 lished as an inherited individual retirement 

17 account or individual retirement annuity. 

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

19 thereof) shall apply to such individual retire20 ment plan.’’. 

21 (b) ROLLOVER TREATMENT FOR INHERITED AC22 COUNTS.—Section 408(d)(3)(C) is amended by adding at 

23 the end the following: 

24 ‘‘(iii) EXCEPTION FOR QUALIFIED

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1 COUNT.—Clause (i) shall not apply to any 

2 portion of a distribution from an inherited 

3 individual retirement account or inherited 

4 individual retirement annuity if such por5 tion is paid to another such individual re6 tirement plan or annuity, but only if the 

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

8 and (E) of this paragraph and the require9 ments of section 402(c)(11)(B) are met 

10 with respect to such transfer or payment.’’. 

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

12 this section shall apply to distributions made after Decem13 ber 31, 2019. 

14 SEC. 108. INCREASE IN AGE FOR REQUIRED BEGINNING 

15 DATE FOR MANDATORY DISTRIBUTIONS. 

16 (a) INCREASE IN AGE FOR REQUIRED BEGINNING

17 DATE.— 

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

19 401(a)(9)(C)(i) is amended to read as follows: 

20 ‘‘(I) the first calendar year in 

21 which the employee attains the appli22 cable age for such calendar year, or’’. 

23 (2) SPECIAL RULE FOR OWNERS.—Subclause 

24 (I) of section 401(a)(9)(C)(ii) is amended by striking ‘‘in which the employee attains age 701 25 ⁄2’’ and 


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1 inserting ‘‘described in clause (i)(I) with respect to 

2 the employee’’. 

3 (b) MANDATORY DISTRIBUTION AGE.—Paragraph 

4 (9) of section 401(a) is amended by inserting at the end 

5 the following new subparagraph: 

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

7 this paragraph— 

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

9 is— 

10 ‘‘(I) for calendar years before 

2023, age 701 11 ⁄2, 

12 ‘‘(II) for calendar years 2023, 

13 2024, 2025, 2026, 2027, 2028, and 

14 2029, age 72, and 

15 ‘‘(III) for calendar years after 

16 2029, age 75. 

17 ‘‘(ii) TRANSITION RULE.—If, as of a 

18 calendar year, an employee has not at19 tained the applicable age with respect to 

20 such year, such employee shall be treated 

21 as not having attained the applicable age 

22 under this paragraph for such year without 

23 regard to whether, in a previous calendar 

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•S 1431 IS

1 cable age with respect to such previous cal2 endar year.’’. 

3 (c) SPOUSE BENEFICIARIES.—Subclause (I) of section 401(a)(9)(B)(iv) is amended by striking ‘‘age 701 4 ⁄2’’ 

5 and inserting ‘‘the applicable age’’. 

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

section 408 is amended by striking ‘‘age 701 7 ⁄2’’ and insert8 ing ‘‘the applicable age determined under section 

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

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

11 this section shall apply to calendar years beginning after 

12 December 31, 2019. 

13 SEC. 109. UPDATING OF MORTALITY TABLES FOR MINIMUM 

14 REQUIRED DISTRIBUTIONS. 

15 Section 401(a)(9), as amended by this Act, is further 

16 amended by adding at the end the following new subpara17 graph: 

18 ‘‘(I) MORTALITY TABLES.— 

19 ‘‘(i) INITIAL UPDATE.—Not later than 

20 1 year after the date of the enactment of 

21 this subparagraph, the Secretary shall ei22 ther update, or provide new tables to re23 place, the mortality tables used as of such 

24 date for purposes of this paragraph. 


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1 ‘‘(ii) PERIODIC REVISION.—The Sec2 retary shall (at least every 10 years) make 

3 revisions in, or provide new tables to re4 place, any table in effect under this sub5 paragraph to reflect the actual experience 

6 of pension plans and projected trends in 

7 such experience. 

8 ‘‘(iii) EFFECTIVE DATE.—Any table 

9 prescribed under this subparagraph shall 

10 apply to plan years beginning after the 

11 date which is 1 year after publication of 

12 the final table.’’. 

13 SEC. 110. INCREASE IN CREDIT LIMITATION FOR SMALL 

14 EMPLOYER PENSION PLAN STARTUP COSTS 

15 OF CERTAIN EMPLOYERS. 

16 (a) IN GENERAL.—Subsection (a) of section 45E is 

17 amended by inserting before the period at the end the fol18 lowing: ‘‘(75 percent of such costs in the case of an eligible 

19 employer, as determined by substituting ‘25’ for ‘100’ in 

20 section 408(p)(2)(C)(i))’’. 

21 (b) INCREASE.—Paragraph (1) of section 45E(b) is 

22 amended to read 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 

6 415(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 (c) CONFORMING AMENDMENT.—Paragraph (2) of 

11 section 3511(d), as amended by this Act, is further 

12 amended— 

13 (1) by redesignating subparagraphs (E), (F), 

14 (G), (H), and (I) as subparagraphs (F), (G), (H), 

15 (I), and (J), respectively, and 

16 (2) by inserting after subparagraph (D) the fol17 lowing new subparagraph: 

18 ‘‘(E) section 45E (small employer pension 

19 plan startup cost credit),’’. 

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

21 this section shall apply to taxable years beginning after 

22 December 31, 2019. 


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1 SEC. 111. CREDIT FOR RE-ENROLLMENT. 

2 (a) IN GENERAL.—Subpart D of part IV of sub3 chapter A of chapter 1, as amended by this Act, is further 

4 amended by adding at the end the following new section: 

5 ‘‘SEC. 45U. CREDIT FOR RE-ENROLLMENT PROVISIONS IN 

6 PLANS PROVIDED BY SMALL EMPLOYERS. 

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

8 the case of an eligible employer, the retirement re-enroll9 ment credit determined under this section for any taxable 

10 year is an amount equal to— 

11 ‘‘(1) $500 for any taxable year occurring during 

12 the credit period, and 

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

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

15 (a)— 

16 ‘‘(1) IN GENERAL.—The credit period with re17 spect to any eligible employer is the 3-taxable-year 

18 period beginning with the first taxable year for 

19 which the employer includes a re-enrollment provi20 sion in an eligible automatic contribution arrange21 ment (as defined in section 414(w)(3)) in a qualified 

22 employer plan (as defined in section 4972(d)) main23 tained by the employer. 

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

25 taxable year with respect to an employer shall be 

26 treated as occurring within the credit period unless 


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•S 1431 IS

1 the provision described in paragraph (1) is included 

2 in the plan for such year. 

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

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

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

6 ‘‘(d) RE-ENROLLMENT PROVISION.—For purposes of 

7 this section, the term ‘re-enrollment provision’ means a 

8 provision of an eligible automatic contribution arrange9 ment under which— 

10 ‘‘(1) IN GENERAL.—Each employee eligible to 

11 participate in the arrangement who is not contrib12 uting or is contributing less than the percentage ap13 plicable to an eligible employee in the first year of 

14 eligibility is treated as being in such first year of eli15 gibility in each applicable year with respect to the 

16 employee. 

17 ‘‘(2) ELECTION OUT.—The election treated as 

18 having been made under paragraph (1) shall cease 

19 to apply with respect to any employee if such em20 ployee makes an affirmative election— 

21 ‘‘(A) to not have such contributions made, 

22 or 

23 ‘‘(B) to make elective contributions at a 

24 level specified in such affirmative election. 

25 ‘‘(3) APPLICABLE YEAR EVERY THIRD YEAR.— 


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

2 section, the term ‘applicable year’ means, with 

3 respect to an employee, such employee’s first 

4 plan year of eligibility under the arrangement, 

5 and all subsequent plan years of eligibility. 

6 ‘‘(B) EXCEPTION.—Following any applica7 ble year of an employee (determined after the 

8 application of this subparagraph), the plan may 

9 elect to treat the next 1 or 2 plan years as not 

10 being applicable years with respect to such em11 ployee.’’. 

12 (b) CREDIT TO BE PART OF GENERAL BUSINESS

13 CREDIT.—Subsection (b) of section 38, as amended by 

14 this Act, is further amended by striking ‘‘plus’’ at the end 

15 of paragraph (32), by striking the period at the end of 

16 paragraph (33) and inserting ‘‘, plus’’, and by adding at 

17 the end the following new paragraph: 

18 ‘‘(34) in the case of an eligible employer (as de19 fined in section 45U(c)), the retirement re-enroll20 ment credit determined under section 45U(a).’’. 

21 (c) CONFORMING AMENDMENT.—Paragraph (2) of 

22 section 3511(d), as amended by this Act, is further 

23 amended— 


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1 (1) by redesignating subparagraphs (H), (I), 

2 and (J) as subparagraphs (I), (J), and (K), respec3 tively, and 

4 (2) by inserting after subparagraph (G) the fol5 lowing new subparagraph: 

6 ‘‘(H) section 45U (retirement re-enroll7 ment credit),’’. 

8 (d) CLERICAL AMENDMENT.—The table of sections 

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

10 is amended by inserting after the item relating to section 

11 45T the following new item: 

‘‘Sec. 45U. Credit for re-enrollment provisions in plans provided by small employers.’’. 

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

13 this section shall apply to taxable years beginning after 

14 December 31, 2019. 

15 SEC. 112. TREATMENT OF STUDENT LOAN PAYMENTS AS 

16 ELECTIVE DEFERRALS FOR PURPOSES OF 

17 MATCHING CONTRIBUTIONS. 

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

19 401(m)(4) is amended by striking ‘‘and’’ at the end of 

20 clause (i), by striking the period at the end of clause (ii) 

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

23 ‘‘(iii) subject to the requirements of 

24 paragraph (14), any employer contribution 


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•S 1431 IS

1 made to a defined contribution plan on be2 half of an employee on account of a quali3 fied student loan payment.’’. 

4 (b) QUALIFIED STUDENT LOAN PAYMENT.—Para5 graph (4) of section 401(m) is amended by adding at the 

6 end the following new subparagraph: 

7 ‘‘(D) QUALIFIED STUDENT LOAN PAY8 MENT.—The term ‘qualified student loan pay9 ment’ means a payment made by an employee 

10 in repayment of a qualified education loan (as 

11 defined in section 221(d)(1)) incurred to pay 

12 qualified higher education expenses of the em13 ployee, but only— 

14 ‘‘(i) to the extent such payments in 

15 the aggregate for the year do not exceed 

16 an amount equal to— 

17 ‘‘(I) the limitation applicable 

18 under section 402(g) for the year (or, 

19 if lesser, the employee’s compensation 

20 (as defined in section 415(c)(3)) for 

21 the year), reduced by 

22 ‘‘(II) the elective deferrals made 

23 by the employee for such year, and 

24 ‘‘(ii) if the employee certifies to the 

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1 tion under this paragraph that such pay2 ment has been made on such loan. 

3 For purposes of this subparagraph, the term 

4 ‘qualified higher education expenses’ means the 

5 cost of attendance (as defined in section 472 of 

6 the Higher Education Act of 1965, as in effect 

7 on the day before the date of the enactment of 

8 the Taxpayer Relief Act of 1997) at an eligible 

9 educational institution (as defined in section 

10 221(d)(2)).’’. 

11 (c) MATCHING CONTRIBUTIONS FOR QUALIFIED

12 STUDENT LOAN PAYMENTS.—Subsection (m) of section 

13 401, as amended by this Act, is further amended by redes14 ignating paragraph (14) as paragraph (15), and by insert15 ing after paragraph (13) the following new paragraph: 

16 ‘‘(14) MATCHING CONTRIBUTIONS FOR QUALI17 FIED STUDENT LOAN PAYMENTS.— 

18 ‘‘(A) IN GENERAL.—For purposes of para19 graph (4)(A)(iii), an employer contribution 

20 made to a defined contribution plan on account 

21 of a qualified student loan payment shall be 

22 treated as a matching contribution for purposes 

23 of this title if— 

24 ‘‘(i) the plan provides matching con25 tributions on account of elective deferrals 


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•S 1431 IS

1 at the same rate as contributions on ac2 count of qualified student loan payments, 

3 ‘‘(ii) the plan provides matching con4 tributions on account of qualified student 

5 loan payments only on behalf of employees 

6 otherwise eligible to make elective defer7 rals, and 

8 ‘‘(iii) under the plan, all employees el9 igible to receive matching contributions on 

10 account of elective deferrals are eligible to 

11 receive matching contributions on account 

12 of qualified student loan payments. 

13 ‘‘(B) TREATMENT FOR PURPOSES OF NON14 DISCRIMINATION RULES, ETC.— 

15 ‘‘(i) NONDISCRIMINATION RULES.— 

16 For purposes of subparagraph (A)(iii), 

17 subsection (a)(4), and section 410(b), 

18 matching contributions described in para19 graph (4)(A)(iii) shall not fail to be treated 

20 as available to an employee solely because 

21 such employee does not have debt incurred 

22 under a qualified education loan (as de23 fined in section 221(d)(1)). 

24 ‘‘(ii) STUDENT LOAN PAYMENTS NOT

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•S 1431 IS

1 cept as provided in clause (iii), a qualified 

2 student loan payment shall not be treated 

3 as a contribution to a plan under this title. 

4 ‘‘(iii) MATCHING CONTRIBUTION

5 RULES.—Solely for purposes of meeting 

6 the requirements of paragraph (11)(B), 

7 (12), or (13) of this subsection, or para8 graph (11)(B)(i)(II), (12)(B), (13)(D), or 

9 (15)(D) of subsection (k), a plan may treat 

10 a qualified student loan payment as an 

11 elective deferral or an elective contribution, 

12 whichever is applicable.’’. 

13 (d) SIMPLE RETIREMENT ACCOUNTS.—Paragraph 

14 (2) of section 408(p) is amended by adding at the end 

15 the following new subparagraph: 

16 ‘‘(F) MATCHING CONTRIBUTIONS FOR

17 QUALIFIED STUDENT LOAN PAYMENTS.— 

18 ‘‘(i) IN GENERAL.—Subject to the 

19 rules of clause (iii), an arrangement shall 

20 not fail to be treated as meeting the re21 quirements of subparagraph (A)(iii) solely 

22 because under the arrangement, solely for 

23 purposes of such subparagraph, qualified 

24 student loan payments are treated as 

25 amounts elected by the employee under 


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•S 1431 IS

1 subparagraph (A)(i)(I) to the extent such 

2 payments do not exceed— 

3 ‘‘(I) the applicable dollar amount 

4 under subparagraph (E) (after appli5 cation of section 414(v)) for the year 

6 (or, if lesser, the employee’s com7 pensation (as defined in section 

8 415(c)(3)) for the year), reduced by 

9 ‘‘(II) any other amounts elected 

10 by the employee under subparagraph 

11 (A)(i)(I) for the year. 

12 ‘‘(ii) QUALIFIED STUDENT LOAN PAY13 MENT.—For purposes of this subpara14 graph— 

15 ‘‘(I) IN GENERAL.—The term 

16 ‘qualified student loan payment’ 

17 means a payment made by an em18 ployee in repayment of a qualified 

19 education loan (as defined in section 

20 221(d)(1)) incurred to pay qualified 

21 higher education expenses of the em22 ployee, but only if the employee cer23 tifies to the employer making the 

24 matching contribution that such pay25 ment has been made on such a loan. 


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1 ‘‘(II) QUALIFIED HIGHER EDU2 CATION EXPENSES.—The term ‘quali3 fied higher education expenses’ has 

4 the same meaning as when used in 

5 section 401(m)(4)(D). 

6 ‘‘(iii) APPLICABLE RULES.—Clause (i) 

7 shall apply to an arrangement only if, 

8 under the arrangement— 

9 ‘‘(I) matching contributions on 

10 account of qualified student loan pay11 ments are provided only on behalf of 

12 employees otherwise eligible to elect 

13 contributions under subparagraph 

14 (A)(i)(I), and 

15 ‘‘(II) all employees otherwise eli16 gible to participate in the arrange17 ment are eligible to receive matching 

18 contributions on account of qualified 

19 student loan payments.’’. 

20 (e) 403(b) PLANS.—Subparagraph (A) of section 

21 403(b)(12) is amended by adding at the end the following: 

22 ‘‘The fact that the employer offers matching contributions 

23 on account of qualified student loan payments as described 

24 in section 401(m)(14) shall not be taken into account in 

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1 quirements of clause (ii) (and any regulation there2 under).’’. 

3 (f) 457(b) PLANS.—Subsection (b) of section 457 of 

4 the Internal Revenue Code of 1986 is amended by adding 

5 at the end the following: ‘‘A plan which is established and 

6 maintained by an employer which is described in sub7 section (e)(1)(A) shall not be treated as failing to meet 

8 the requirements of this subsection solely because the 

9 plan, or another plan maintained by the employer which 

10 meets the requirements of section 401(a), provides for 

11 matching contributions on account of qualified student 

12 loan payments as described in section 401(m)(14).’’. 

13 (g) REGULATORY AUTHORITY.—The Secretary shall 

14 prescribe regulations for purposes of implementing the 

15 amendments made by this section, including regulations— 

16 (1) permitting a plan to make matching con17 tributions for qualified student loan payments, as 

18 defined in sections 401(m)(4)(D) and 408(p)(2)(F) 

19 of the Internal Revenue Code of 1986, as added by 

20 this section, at a different frequency than matching 

21 contributions are otherwise made under the plan, 

22 provided that the frequency is not less than annu23 ally, 

24 (2) permitting employers to establish reasonable 

25 procedures to claim matching contributions for such 


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•S 1431 IS

1 qualified student loan payments under the plan, in2 cluding an annual deadline (not earlier than 3 

3 months after the close of each plan year) by which 

4 a claim must be made, and 

5 (3) promulgating model amendments which 

6 plans may adopt to implement matching contribu7 tions on such qualified student loan payments for 

8 purposes of sections 401(m), 408(p), 403(b), and 

9 457(b) of the Internal Revenue Code of 1986. 

10 (h) EFFECTIVE DATE.—The amendments made by 

11 this section shall apply to contributions made for years 

12 beginning after December 31, 2019. 

13 SEC. 113. TREATMENT OF QUALIFIED RETIREMENT PLAN14 NING SERVICES. 

15 (a) IN GENERAL.—Subsection (m) of section 132 is 

16 amended by adding at the end the following new para17 graph: 

18 ‘‘(4) NO CONSTRUCTIVE RECEIPT.—No amount 

19 shall be included in the gross income of any em20 ployee solely because the employee may choose be21 tween any qualified retirement planning services and 

22 compensation which would otherwise be includible in 

23 the gross income of such employee. The preceding 

24 sentence shall apply to highly compensated employ25 ees only if the choice described in such sentence is 


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1 available on substantially the same terms to each 

2 member of the group of employees normally provided 

3 education and information regarding the employer’s 

4 qualified employer plan.’’. 

5 (b) DEFINITION.—Paragraph (1) of section 132(m) 

6 is amended by inserting before the period the following: 

7 ‘‘, including— 

8 ‘‘(A) advice regarding investments in any 

9 arrangement described in section 219(g)(5) 

10 (without regard to the last sentence thereof), 

11 and 

12 ‘‘(B) retirement advice regarding invest13 ments held outside such an arrangement.’’. 

14 (c) CONFORMING AMENDMENTS.— 

15 (1) Section 403(b)(3)(B) is amended by insert16 ing ‘‘132(m)(4),’’ after ‘‘132(f)(4),’’. 

17 (2) Section 414(s)(2) is amended by inserting 

18 ‘‘132(m)(4),’’ after ‘‘132(f)(4),’’. 

19 (3) Section 415(c)(3)(D)(ii) is amended by in20 serting ‘‘132(m)(4),’’ after ‘‘132(f)(4),’’. 

21 (d) EFFECTIVE DATE.—The amendment made by 

22 this section shall apply to taxable years beginning after 

23 December 31, 2019. 


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1 SEC. 114. ALLOW ADDITIONAL NONELECTIVE CONTRIBU2 TIONS TO SIMPLE PLANS. 

3 (a) IN GENERAL.— 

4 (1) MODIFICATION TO DEFINITION.—Subpara5 graph (A) of section 408(p)(2) is amended by strik6 ing ‘‘and’’ at the end of clause (iii), by redesignating 

7 clause (iv) as clause (v), and by inserting after 

8 clause (iii) the following new clause: 

9 ‘‘(iv) the employer may make nonelec10 tive contributions of a uniform percentage 

11 (up to 10 percent) of compensation for 

12 each employee who is eligible to participate 

13 in the arrangement and who has at least 

14 $5,000 of compensation from the employer 

15 for the year, and’’. 

16 (2) LIMITATION.—Subparagraph (A) of section 

17 408(p)(2) is amended by adding at the end the fol18 lowing: ‘‘The compensation taken into account under 

19 clause (iv) for any year shall not exceed the limita20 tion in effect for such year under section 

21 401(a)(17).’’. 

22 (3) OVERALL DOLLAR LIMIT ON CONTRIBU23 TIONS.—Paragraph (8) of section 408(p) is amended 

24 to read as follows: 

25 ‘‘(8) COORDINATION WITH MAXIMUM LIMITA26 TION UNDER SUBSECTION (a).—In the case of any 


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•S 1431 IS

1 simple retirement account, subsections (a)(1) and 

2 (b)(2) shall be applied by substituting for ‘the dollar 

3 amount in effect under section 219(b)(1)(A)’ the fol4 lowing: ‘the sum (but not to exceed 50 percent of 

5 the amount in effect under section 415(c)(1)(A) (ex6 cept as provided in section 414(v))) of the dollar 

7 amount in effect under paragraph (2)(A)(ii) of this 

8 subsection; the employer contribution required under 

9 paragraph (2)(A)(iii) or (2)(B)(i) of this subsection, 

10 whichever is applicable; and the employer contribu11 tion made on behalf of the employee under para12 graph (2)(A)(iv) of this subsection’.’’. 

13 (b) CONFORMING AMENDMENTS.— 

14 (1) Section 408(p)(2)(A)(v), as redesignated by 

15 subsection (a), is amended by striking ‘‘or (iii)’’ and 

16 inserting ‘‘, (iii), or (iv)’’. 

17 (2) Paragraph (8) of section 408(p) is amended 

18 by inserting ‘‘, the employer contribution actually 

19 made under paragraph (2)(A)(iv) of this sub20 section,’’ after ‘‘paragraph (2)(A)(ii) of this sub21 section’’. 

22 (3) Section 401(k)(11)(B)(i) is amended by 

23 striking ‘‘and’’ at the end of subclause (II), by re24 designating subclause (III) as subclause (V), and by 


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1 inserting after subclause (II) the following new sub2 clauses: 

3 ‘‘(III) the employer may make 

4 nonelective contributions of a uniform 

5 percentage (up to 10 percent) of com6 pensation for each employee who is el7 igible to participate in the arrange8 ment and who has at least $5,000 of 

9 compensation from the employer for 

10 the year, 

11 ‘‘(IV) contributions on behalf of 

12 any employee for any year may not 

13 exceed 50 percent of the amount in 

14 effect under section 415(c)(1)(A) (ex15 cept as provided in section 414(v)), 

16 and’’. 

17 (4) Section 401(k)(11)(B)(i)(V), as redesig18 nated by paragraph (3), is amended by striking ‘‘or 

19 (II)’’ and inserting ‘‘, (II), or (III)’’. 

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

21 this section shall apply to years beginning after December 

22 31, 2019. 

23 SEC. 115. REFORM OF THE MINIMUM PARTICIPATION RULE. 

24 (a) IN GENERAL.—Subparagraph (H) of section 

25 401(a)(26) is amended by adding at the end the following: 


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1 ‘‘Not later than December 31, 2020, the Secretary shall 

2 issue final regulations under which this paragraph may 

3 be applied separately to bona fide separate subsidiaries or 

4 divisions.’’. 

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

6 subsection (a) shall take effect on the date of enactment 

7 of this Act. 

8 SEC. 116. EXPANSION OF EMPLOYEE PLANS COMPLIANCE 

9 RESOLUTION SYSTEM. 

10 (a) IN GENERAL.—Except as otherwise provided in 

11 regulations prescribed by the Secretary of the Treasury 

12 or the Secretary’s delegate (referred to in this section as 

13 the ‘‘Secretary’’), any inadvertent failure to comply with 

14 the rules applicable under section 401(a), 403(a), 403(b), 

15 408(p), or 408(k) of the Internal Revenue Code of 1986 

16 may be self-corrected under the Employee Plans Compli17 ance Resolution System (as described in Revenue Proce18 dure 2019–19 or any successor guidance), except to the 

19 extent that such failure was identified by the Secretary 

20 prior to any actions which demonstrate a commitment to 

21 implement a self-correction. Revenue Procedure 2019–19 

22 is deemed amended as of the date of the enactment of 

23 this Act to provide that the correction period under section 

24 9.02 of such Revenue Procedure (or any successor provi25 sion) for an inadvertent failure is indefinite and has no 


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•S 1431 IS

1 last day, other than with respect to failures identified by 

2 the Secretary prior to any self-correction as described in 

3 the preceding sentence. 

4 (b) LOAN ERROR.—The Secretary of Labor shall 

5 treat any loan error corrected pursuant to subsection (a) 

6 as meeting the requirements of the Voluntary Fiduciary 

7 Correction Program of the Department of Labor. 

8 (c) EPCRS FOR IRAS.—The Secretary shall expand 

9 the Employee Plans Compliance Resolution System to 

10 allow custodians of individual retirement plans to address 

11 inadvertent failures for which the owner of an individual 

12 retirement plan was not at fault, including (but not limited 

13 to)— 

14 (1) waivers of the excise tax which would other15 wise apply under section 4974 of the Internal Rev16 enue Code of 1986; 

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

18 Employee Plans Compliance Resolution System, 

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

20 the deadline is missed for reasons beyond the rea21 sonable control of the account owner; and 

22 (3) rules permitting a nonspouse beneficiary to 

23 return distributions to an inherited individual retire24 ment plan described in section 408(d)(3)(C) of the 

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


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•S 1431 IS

1 to an inadvertent error by a service provider, the 

2 beneficiary had reason to believe that the distribu3 tion could be rolled over without inclusion in income 

4 of any part of the distributed amount. 

5 (d) REQUIRED MINIMUM DISTRIBUTION CORREC6 TIONS.—The Secretary shall expand the Employee Plans 

7 Compliance Resolution System to allow plans to which 

8 such system applies and custodians and owners of indi9 vidual retirement plans to self-correct, without an excise 

10 tax, any inadvertent failures pursuant to which a distribu11 tion is made no more than 180 days after it was required 

12 to be made. 

13 (e) ADDITIONAL SAFE HARBORS.—The Secretary 

14 shall expand the Employee Plans Compliance Resolution 

15 System (as described in Revenue Procedure 2019–19 or 

16 any successor guidance) to provide additional safe harbor 

17 means of correcting inadvertent failures described in sub18 section (a), including safe harbor means of calculating the 

19 earnings which must be restored to a plan in cases where 

20 plan assets have been depleted by reason of an inadvertent 

21 failure. 

22 (f) DEFINITIONS AND SPECIAL RULES.— 

23 (1) INADVERTENT FAILURE.—For purposes of 

24 this section— 


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

2 subparagraph (B), the term ‘‘inadvertent fail3 ure’’ means a failure that occurs despite the ex4 istence of practices and procedures which— 

5 (i) satisfy the standards set forth in 

6 section 4.04 of Revenue Procedure 2019– 

7 19 (or any successor provision); or 

8 (ii) satisfy similar standards in the 

9 case of an individual retirement plan. 

10 (B) CORRECTION BY OWNER OF INDI11 VIDUAL RETIREMENT PLAN.—In the case of a 

12 correction by an owner of an individual retire13 ment plan under subsection (d), the term ‘‘in14 advertent failure’’ means a failure due to rea15 sonable cause. 

16 (2) PLAN LOAN CORRECTIONS.—In the case of 

17 an inadvertent failure relating to a loan to a partici18 pant from a plan, such failure may be self-corrected 

19 under subsection (a) according to the rules of sec20 tion 6.07 of Revenue Procedure 2019–19 (or any 

21 successor provision), including the provisions related 

22 to whether a deemed distribution must be reported 

23 on Form 1099–R. 

24 SEC. 117. ENHANCEMENT OF 403(b) PLANS. 

25 (a) IN GENERAL.— 


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1 (1) PERMITTED INVESTMENTS.—Clause (i) of 

2 section 403(b)(7)(A) is amended to read as follows: 

3 ‘‘(i) the amounts to be held in that 

4 custodial account are invested in regulated 

5 investment company stock or a group trust 

6 intended to satisfy the requirements of In7 ternal Revenue Service Revenue Ruling 

8 81–100 (or any successor guidance), and’’. 

9 (2) CONFORMING AMENDMENT.—The heading 

10 of paragraph (7) of section 403(b) is amended by 

11 striking ‘‘FOR REGULATED INVESTMENT COMPANY

12 STOCK’’. 

13 (3) EFFECTIVE DATE.—The amendments made 

14 by this subsection shall apply to amounts invested 

15 after December 31, 2019. 

16 (b) AMENDMENTS TO THE INVESTMENT COMPANY

17 ACT OF 1940.—Section 3(c)(11) of the Investment Com18 pany Act of 1940 (15 U.S.C. 80a–3(c)(11)) is amended 

19 to read as follows: 

20 ‘‘(11) Any— 

21 ‘‘(A) employee’s stock bonus, pension, or 

22 profit-sharing trust which meets the require23 ments for qualification under section 401 of the 

24 Internal Revenue Code of 1986; 


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1 ‘‘(B) custodial account meeting the re2 quirements of section 403(b)(7) of such Code; 

3 ‘‘(C) governmental plan described in sec4 tion 3(a)(2)(C) of the Securities Act of 1933; 

5 ‘‘(D) collective trust fund maintained by a 

6 bank consisting solely of assets of one or more 

7 of such trusts, government plans, or church 

8 plans, companies or accounts that are excluded 

9 from the definition of an investment company 

10 under paragraph (14) of this subsection; 

11 ‘‘(E) plan which meets the requirements of 

12 section 403(b) of the Internal Revenue Code of 

13 1986 if— 

14 ‘‘(i) such plan is subject to title I of 

15 the Employee Retirement Income Security 

16 Act of 1974 (29 U.S.C. 1001 et seq.); 

17 ‘‘(ii) any employer making such plan 

18 available agrees to serve as a fiduciary for 

19 the plan with respect to the selection of the 

20 plan’s investments among which partici21 pants can choose; or 

22 ‘‘(iii) such plan is a governmental 

23 plan (as defined in section 414(d) of such 

24 Code); or 


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1 ‘‘(F) separate account the assets of which 

2 are derived solely from— 

3 ‘‘(i) contributions under pension or 

4 profit-sharing plans which meet the re5 quirements of section 401 of the Internal 

6 Revenue Code of 1986 or the requirements 

7 for deduction of the employer’s contribu8 tion under section 404(a)(2) of such Code; 

9 ‘‘(ii) contributions under govern10 mental plans in connection with which in11 terests, participations, or securities are ex12 empted from the registration provisions of 

13 section 5 of the Securities Act of 1933 by 

14 section 3(a)(2)(C) of such Act; 

15 ‘‘(iii) advances made by an insurance 

16 company in connection with the operation 

17 of such separate account; and 

18 ‘‘(iv) contributions to a plan described 

19 in subparagraph (E).’’. 

20 (c) AMENDMENTS TO THE SECURITIES ACT OF

21 1933.—Section 3(a)(2) of the Securities Act of 1933 (15 

22 U.S.C. 77c(a)(2)) is amended— 

23 (1) by striking ‘‘or (D)’’ and inserting ‘‘(D) a 

24 plan which meets the requirements of section 403(b) 

25 of such Code if (i) such plan is subject to title I of 


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1 the Employee Retirement Income Security Act of 

2 1974 (29 U.S.C. 1001 et seq.), (ii) any employer 

3 making such plan available agrees to serve as a fidu4 ciary for the plan with respect to the selection of the 

5 plan’s investments among which participants can 

6 choose, or (iii) such plan is a governmental plan (as 

7 defined in section 414(d) of such Code); or (E)’’; 

8 (2) by striking ‘‘(C), or (D)’’ and inserting 

9 ‘‘(C), (D), or (E)’’; and 

10 (3) by striking ‘‘(iii) which is a plan funded’’ 

11 and inserting ‘‘(iii) in the case of a plan not de12 scribed in subparagraph (D), which is a plan fund13 ed’’. 

14 (d) AMENDMENTS TO THE SECURITIES EXCHANGE

15 ACT OF 1934.—Section 3(a)(12)(C) of the Securities Ex16 change Act of 1934 (15 U.S.C. 78c(a)(12)(C)) is amend17 ed— 

18 (1) by striking ‘‘or (iv)’’ and inserting ‘‘(iv) a 

19 plan which meets the requirements of section 403(b) 

20 of such Code if (I) such plan is subject to title I of 

21 the Employee Retirement Income Security Act of 

22 1974 (29 U.S.C. 1001 et seq.), (II) any employer 

23 making such plan available agrees to serve as a fidu24 ciary for the plan with respect to the selection of the 

25 plan’s investments among which participants can 


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1 choose, or (III) such plan is a governmental plan (as 

2 defined in section 414(d) of such Code), or (v)’’; 

3 (2) by striking ‘‘(ii), or (iii)’’ and inserting 

4 ‘‘(ii), (iii), or (iv)’’; and 

5 (3) by striking ‘‘(II) is a plan funded’’ and in6 serting ‘‘(II) in the case of a plan not described in 

7 clause (iv), is a plan funded’’. 

8 SEC. 118. ELIGIBILITY FOR PARTICIPATION IN RETIRE9 MENT PLANS. 

10 An individual shall not be precluded from partici11 pating in an eligible deferred compensation plan by reason 

12 of having received a distribution under section 457(e)(9) 

13 of the Internal Revenue Code of 1986, as in effect prior 

14 to the enactment of the Small Business Job Protection 

15 Act of 1996. 

16 SEC. 119. SMALL IMMEDIATE FINANCIAL INCENTIVES FOR 

17 CONTRIBUTING TO A PLAN. 

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

19 401(k)(4) is amended by inserting ‘‘(other than a de mini20 mis financial incentive)’’ after ‘‘any other benefit’’. 

21 (b) SECTION 403(b) PLANS.—Subparagraph (A) of 

22 section 403(b)(12), as amended by this Act, is further 

23 amended by adding at the end the following: ‘‘A plan shall 

24 not fail to satisfy clause (ii) solely by reason of the offering 

25 of a de minimis financial incentive for employees to elect 


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1 to have the employer make contributions pursuant to a 

2 salary reduction agreement.’’. 

3 (c) EXEMPTION FROM PROHIBITED TRANSACTION

4 RULES.—Subsection (d) of section 4975 is amended by 

5 striking ‘‘or’’ at the end of paragraph (22), by striking 

6 the period at the end of paragraph (23) and inserting ‘‘, 

7 or’’, and by adding at the end the following new para8 graph: 

9 ‘‘(24) the provision of a de minimis financial in10 centive described in section 401(k)(4)(A) or 

11 403(b)(12)(A).’’. 

12 (d) AMENDMENT OF EMPLOYEE RETIREMENT IN13 COME SECURITY ACT OF 1974.—Subsection (b) of section 

14 408 of the Employee Retirement Income Security Act of 

15 1974 (29 U.S.C. 1108(b)) is amended by adding at the 

16 end the following new paragraph: 

17 ‘‘(21) The provision of a de minimis financial 

18 incentive described in section 401(k)(4)(A) or 

19 403(b)(12)(A) of the Internal Revenue Code of 

20 1986.’’. 

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

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


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1 SEC. 120. INDEXING IRA CATCH-UP LIMIT. 

2 (a) IN GENERAL.—Subparagraph (C) of section 

3 219(b)(5) is amended by adding at the end the following 

4 new clause: 

5 ‘‘(iii) INDEXING OF CATCH-UP LIMITA6 TION.—In the case of any taxable year be7 ginning in a calendar year after 2020, the 

8 $1,000 amount under subparagraph (B)(ii) 

9 shall be increased by an amount equal to— 

10 ‘‘(I) such dollar amount, multi11 plied by 

12 ‘‘(II) the cost-of-living adjust13 ment determined under section 1(f)(3) 

14 for the calendar year in which the tax15 able year begins, determined by sub16 stituting ‘calendar year 2019’ for ‘cal17 endar year 2016’ in subparagraph 

18 (A)(ii) thereof. 

19 If any amount after adjustment under the 

20 preceding sentence is not a multiple of 

21 $200, such amount shall be rounded to the 

22 next lower multiple of $200.’’. 

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

24 this section shall apply to years beginning after December 

25 31, 2020. 


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1 SEC. 121. HIGHER CATCH-UP LIMIT TO APPLY AT AGE 60. 

2 (a) IN GENERAL.— 

3 (1) PLANS OTHER THAN SIMPLE PLANS.—Sec4 tion 414(v)(2)(B)(i) is amended by inserting the fol5 lowing before the period: ‘‘($10,000, in the case of 

6 an eligible participant who has attained age 60 be7 fore the close of the taxable year)’’. 

8 (2) SIMPLE PLANS.—Section 414(v)(2)(B)(ii) is 

9 amended by inserting the following before the pe10 riod: ‘‘($5,000, in the case of an eligible participant 

11 who has attained age 60 before the close of the tax12 able year)’’. 

13 (b) COST-OF-LIVING ADJUSTMENTS.—Subparagraph 

14 (C) of section 414(v)(2) is amended by adding at the end 

15 the following: ‘‘In the case of a year beginning after De16 cember 31, 2020, the Secretary shall adjust annually the 

17 $10,000 amount in subparagraph (B)(i) and the $5,000 

18 amount in subparagraph (B)(ii) for increases in the cost19 of-living at the same time and in the same manner as ad20 justments under the preceding sentence; except that the 

21 base period taken into account shall be the calendar quar22 ter beginning July 1, 2019.’’. 

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

24 this section shall apply to years beginning after December 

25 31, 2019. 


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1 TITLE II—PRESERVATION OF 

2 INCOME 

3 SEC. 201. QUALIFYING LONGEVITY ANNUITY CONTRACTS. 

4 (a) IN GENERAL.—Not later than the date which is 

5 1 year after the date of the enactment of this Act, the 

6 Secretary of the Treasury (or the Secretary’s delegate) 

7 shall amend the regulation issued by the Department of 

8 the Treasury relating to ‘‘Longevity Annuity Contracts’’ 

9 (79 Fed. Reg. 37633 (July 2, 2014)), as follows: 

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

11 Secretary (or delegate) shall amend Q&A–17(b)(3) 

12 of Treas. Reg. section 1.401(a)(9)–6 and Q&A– 

13 12(b)(3) of Treas. Reg. section 1.408–8 to eliminate 

14 the requirement that premiums for qualifying lon15 gevity annuity contracts be limited to 25 percent of 

16 an individual’s account balance, and to make such 

17 corresponding changes to the regulations and related 

18 forms as are necessary to reflect the elimination of 

19 this requirement. 

20 (2) INCREASE DOLLAR LIMITATION.— 

21 (A) IN GENERAL.—The Secretary (or dele22 gate) shall amend Q&A–17(b)(2)(i) of Treas. 

23 Reg. section 1.401(a)(9)–6 and Q&A– 

24 12(b)(2)(i) of Treas. Reg. section 1.408–8 to 

25 increase the dollar limitation on premiums for 


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•S 1431 IS

1 qualifying longevity annuity contracts from 

2 $125,000 to $200,000, and to make such cor3 responding changes to the regulations and re4 lated forms as are necessary to reflect this in5 crease in the dollar limitation. 

6 (B) ADJUSTMENTS FOR INFLATION.—The 

7 Secretary (or delegate) shall amend Q&A– 

8 17(d)(2)(i) of Treas. Reg. section 1.401(a)(9)– 

9 6 to provide that, in the case of calendar years 

10 beginning on or after January 1 of the second 

11 year following the year of enactment of this 

12 Act, the $200,000 dollar limitation (as in13 creased by subparagraph (A)) will be adjusted 

14 at the same time and in the same manner as 

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

16 the Internal Revenue Code of 1986, except that 

17 the base period shall be the calendar quarter 

18 beginning July 1 of the year of enactment of 

19 this Act, and any increase to such dollar limita20 tion which is not a multiple of $10,000 will be 

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

22 (3) FACILITATE JOINT AND SURVIVOR BENE23 FITS.—The Secretary (or delegate) shall amend 

24 Q&A–17(c) of Treas. Reg. section 1.401(a)(9)–6, 

25 and make such corresponding changes to the regulaVerDate Sep 11 2014 03:59 May 22, 2019 Jkt 089200 PO 00000 Frm 00058 Fmt 6652 Sfmt 6201 E:\BILLS\S1431.IS S1431

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1 tions and related forms as are necessary, to provide 

2 that, in the case of a qualifying longevity annuity 

3 contract which was purchased with joint and sur4 vivor annuity benefits for the individual and the in5 dividual’s spouse which were permissible under the 

6 regulations at the time the contract was originally 

7 purchased, a divorce occurring after the original 

8 purchase and before the annuity payments com9 mence under the contract will not affect the permis10 sibility of the joint and survivor annuity benefits or 

11 other benefits under the contract, or require any ad12 justment to the amount or duration of benefits pay13 able under the contract, provided that any qualified 

14 domestic relations order (within the meaning of sec15 tion 414(p) of the Internal Revenue Code of 1986) 

16 or any divorce or separation instrument (within the 

17 meaning of section 71(b)(2) of the Internal Revenue 

18 Code of 1986)— 

19 (A) provides that the former spouse is en20 titled to the survivor benefits under the con21 tract; 

22 (B) does not modify the treatment of the 

23 former spouse as the beneficiary under the con24 tract who is entitled to the survivor benefits; or 


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1 (C) does not modify the treatment of the 

2 former spouse as the measuring life for the sur3 vivor benefits under the contract. 

4 (4) PERMIT SHORT FREE LOOK PERIOD.—The 

5 Secretary (or delegate) shall amend Q&A–17(a)(4) 

6 of Treas. Reg. section 1.401(a)(9)–6 to ensure that 

7 such Q&A does not preclude a contract from includ8 ing a provision under which an employee may re9 scind the purchase of the contract within a period 

10 not exceeding 90 days from the date of purchase. 

11 (5) FACILITATE INDEXED AND VARIABLE CON12 TRACTS WITH GUARANTEED BENEFITS.—The Sec13 retary (or delegate) shall amend Q&A–17(d)(4) of 

14 Treas. Reg. section 1.401(a)(9)–6, and make such 

15 corresponding changes to the regulations and related 

16 forms as are necessary, to provide that an annuity 

17 contract is not treated as a contract described in 

18 such Q&A–17(a)(7) to the extent that the con19 tract— 

20 (A) either— 

21 (i) is a variable contract under section 

22 817(d) of the Internal Revenue Code of 

23 1986; or 

24 (ii) is an indexed contract; 


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1 (B) provides for the possibility of annuity 

2 payment increases (but not decreases) based on 

3 the investment return and market value of 1 or 

4 more segregated asset accounts (in the case of 

5 a variable contract) or based on the perform6 ance of 1 or more specified indexes (in the case 

7 of an indexed contract); 

8 (C) provides for a guaranteed minimum 

9 level of annuity payments irrespective of such 

10 investment return, market value, or perform11 ance; and 

12 (D) in the event of death before the annu13 ity starting date, provides that any death ben14 efit that is payable in a lump sum is equal to 

15 the premiums paid, without reduction for in16 vestment return, market value, index perform17 ance, surrender charges, market value adjust18 ments, or any other amounts. 

19 For purposes of the preceding sentence, a downward 

20 adjustment to the dollar amount of annuity pay21 ments shall not be treated as an impermissible re22 duction in such payments, provided that the adjust23 ment is made to reflect a change in annuitant that 

24 is required or permitted under the Internal Revenue 


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1 Code of 1986 or regulations and the adjustment is 

2 based on reasonable actuarial assumptions. 

3 (b) EFFECTIVE DATES, ENFORCEMENT, AND INTER4 PRETATIONS.— 

5 (1) EFFECTIVE DATES.— 

6 (A) Paragraphs (1), (2), and (5) of sub7 section (a) shall be effective with respect to con8 tracts purchased or received in an exchange on 

9 or after the date of the enactment of this Act. 

10 (B) Paragraphs (3) and (4) of subsection 

11 (a) shall be effective with respect to contracts 

12 purchased or received in an exchange on or 

13 after July 2, 2014. 

14 (2) ENFORCEMENT AND INTERPRETATIONS.— 

15 Prior to the date on which the Secretary of the 

16 Treasury issues final regulations pursuant to sub17 section (a)— 

18 (A) the Secretary (or delegate) shall ad19 minister and enforce the law in accordance with 

20 subsection (a) and the effective dates in para21 graph (1) of this subsection; and 

22 (B) taxpayers may rely upon their reason23 able good faith interpretations of subsection (a). 


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1 SEC. 202. REMOVE REQUIRED MINIMUM DISTRIBUTION 

2 BARRIERS FOR LIFE ANNUITIES. 

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

4 as amended by this Act, is further amended by adding 

5 at the end the following new subparagraph: 

6 ‘‘(J) CERTAIN INCREASES IN PAYMENTS

7 UNDER A COMMERCIAL ANNUITY.—Nothing in 

8 this section shall prohibit a commercial annuity 

9 (within the meaning of section 3405(e)(6)) 

10 which is issued in connection with any eligible 

11 retirement plan (within the meaning of section 

12 402(c)(8)(B)) from providing 1 or more of the 

13 following types of payments on or after the an14 nuity starting date: 

15 ‘‘(i) Annuity payments which increase 

16 by a constant percentage, applied not less 

17 frequently than annually, at a rate which 

18 is less than 5 percent per year. 

19 ‘‘(ii) A lump sum payment which— 

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

21 payment period with respect to an an22 nuity or a full or partial commutation 

23 of the future annuity payments, pro24 vided that such lump sum is deter25 mined using reasonable actuarial 

26 methods and assumptions, as deterVerDate Sep 11 2014 03:59 May 22, 2019 Jkt 089200 PO 00000 Frm 00063 Fmt 6652 Sfmt 6201 E:\BILLS\S1431.IS S1431

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1 mined in good faith by the issuer of 

2 the contract, or 

3 ‘‘(II) accelerates the receipt of 

4 annuity payments which are scheduled 

5 to be received within the ensuing 12 

6 months, regardless of whether such 

7 acceleration shortens the payment pe8 riod with respect to the annuity, re9 duces the dollar amount of benefits to 

10 be paid under the contract, or results 

11 in a suspension of annuity payments 

12 during the period being accelerated. 

13 ‘‘(iii) An amount which is in the na14 ture of a dividend or similar distribution, 

15 provided that the issuer of the contract de16 termines such amount based on a reason17 able comparison of the actuarial factors as18 sumed when calculating the initial annuity 

19 payments and the issuer’s experience with 

20 respect to those factors. 

21 ‘‘(iv) A final payment upon death 

22 which does not exceed the excess of— 

23 ‘‘(I) the total amount of the con24 sideration paid for the annuity pay25 ments, over 


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•S 1431 IS

1 ‘‘(II) the aggregate amount of 

2 prior distributions or payments from 

3 or under the contract.’’. 

4 (b) REGULATIONS AND ENFORCEMENT.— 

5 (1) REGULATIONS.—Not later than the date 

6 which is 1 year after the date of the enactment of 

7 this Act, the Secretary of the Treasury (or the Sec8 retary’s delegate) shall amend the regulation issued 

9 by the Department of the Treasury relating to ‘‘Re10 quired Distributions from Retirement Plans’’ (69 

11 Fed. Reg. 33288 (June 15, 2004)), and make any 

12 necessary corresponding amendments to other regu13 lations, in order to— 

14 (A) conform such regulations to the 

15 amendments made by subsection (a), including 

16 by eliminating the types of payments described 

17 in section 401(a)(9)(J) of the Internal Revenue 

18 Code of 1986, as added by subsection (a), from 

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

20 Treas. Reg. section 1.401(a)(9)–6 that the total 

21 future expected payments must exceed the total 

22 value being annuitized; 

23 (B) amend Q&A–14(c) of such section 

24 1.401(a)(9)–6 to provide that a commercial an25 nuity which provides an initial payment which 


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•S 1431 IS

1 is at least equal to the initial payment which 

2 would be required from an individual account 

3 pursuant to Treas. Reg. section 1.401(a)(9)–5 

4 will be deemed to satisfy the requirement in 

5 Q&A–14(c) of such section 1.401(a)(9)–6 that 

6 the total future expected payments must exceed 

7 the total value being annuitized; and 

8 (C) amend Q&A–14(e)(3) of Treas. Reg. 

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

10 future expected payments under a commercial 

11 annuity are determined using the tables or 

12 other actuarial assumptions which the issuer of 

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

17 (2) EFFECTIVE DATE.—The modifications and 

18 amendments required under paragraph (1) shall be 

19 deemed to have been made as of the date of the en20 actment of this Act, and as of such date the Sec21 retary of the Treasury (or the Secretary’s delegate) 

22 shall administer and enforce the law with respect to 

23 plan years beginning before, on, or after the date of 

24 the enactment of this Act in accordance with the 

25 amendments made by subsection (a) and as though 


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•S 1431 IS

1 the actions which the Secretary is required to take 

2 under paragraph (1) had been taken. 

3 SEC. 203. ELIMINATING A PENALTY ON PARTIAL 

4 ANNUITIZATION. 

5 (a) ELIMINATING A PENALTY ON PARTIAL

6 ANNUITIZATION.—The Secretary of the Treasury (or the 

7 Secretary’s delegate) shall amend the regulations under 

8 section 401(a)(9) of the Internal Revenue Code of 1986 

9 to provide that if an employee’s benefit is in the form of 

10 an individual account under a defined contribution plan, 

11 the plan may allow the employee to elect to have the 

12 amount required to be distributed from such account 

13 under such section for a year to be calculated as the excess 

14 of the total required amount for such year over the annu15 ity amount for such year. 

16 (b) DEFINITIONS.—For purposes of this section— 

17 (1) TOTAL REQUIRED AMOUNT.—The term 

18 ‘‘total required amount’’, with respect to a year, 

19 means the amount which would be required to be 

20 distributed under Treas. Reg. section 1.401(a)(9)–5 

21 for the year, determined by treating the account bal22 ance as of the last valuation date in the immediately 

23 preceding calendar year as including the value on 

24 that date of all annuity contracts which were pur25 chased with a portion of the account and from which 


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1 payments are made in accordance with Treas. Reg. 

2 section 1.401(a)(9)–6. 

3 (2) ANNUITY AMOUNT.—The term ‘‘annuity 

4 amount’’, with respect to a year, is the total amount 

5 distributed in the year from all annuity contracts de6 scribed in paragraph (1). 

7 (c) CONFORMING REGULATORY AMENDMENTS.—The 

8 Secretary of the Treasury (or the Secretary’s delegate) 

9 shall amend the regulations under sections 403(b)(10), 

10 408(a)(6), 408(b)(3), and 457(d)(2) of the Internal Rev11 enue Code of 1986 to conform to the amendments de12 scribed in subsection (a). Such conforming amendments 

13 shall treat all individual retirement plans (as defined in 

14 section 7701(a)(37) of such Code) which an individual 

15 holds as the owner, or which an individual holds as a bene16 ficiary of the same decedent, as one such plan for purposes 

17 of the amendments described in subsection (a). Such con18 forming amendments shall also treat all contracts de19 scribed in section 403(b) of such Code which an individual 

20 holds as an employee, or which an individual holds as a 

21 beneficiary of the same decedent, as one such contract for 

22 such purposes. 

23 (d) EFFECTIVE DATE.—The modifications and 

24 amendments required under subsections (a) and (c) shall 

25 be deemed to have been made as of the date of the enactVerDate Sep 11 2014 03:59 May 22, 2019 Jkt 089200 PO 00000 Frm 00068 Fmt 6652 Sfmt 6201 E:\BILLS\S1431.IS S1431

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1 ment of this Act, and as of such date all applicable laws 

2 shall be applied in all respects as though the actions which 

3 the Secretary of the Treasury (or the Secretary’s delegate) 

4 is required to take under such subsections had been taken. 

5 SEC. 204. INSURANCE-DEDICATED EXCHANGE-TRADED 

6 FUNDS. 

7 (a) IN GENERAL.—Not later than the date which is 

8 1 year after the date of the enactment of this Act, the 

9 Secretary of the Treasury (or the Secretary’s delegate) 

10 shall amend the regulation issued by the Department of 

11 the Treasury relating to ‘‘Income Tax; Diversification Re12 quirements for Variable Annuity, Endowment, and Life 

13 Insurance Contracts’’, 54 Fed. Reg. 8728 (March 2, 

14 1989), and make any necessary corresponding amend15 ments to other regulations, in order to facilitate the use 

16 of exchange-traded funds as investment options under 

17 variable contracts within the meaning of section 817(d) 

18 of the Internal Revenue Code of 1986, in accordance with 

19 subsections (b) and (c) of this section. 

20 (b) DESIGNATE CERTAIN AUTHORIZED PARTICI21 PANTS AND MARKET MAKERS AS ELIGIBLE INVESTORS.— 

22 The Secretary of the Treasury (or the Secretary’s dele23 gate) shall amend Treas. Reg. section 1.817–5(f)(3) to 

24 provide that satisfaction of the requirements in Treas. 

25 Reg. section 1.817–5(f)(2)(i) with respect to an exchangeVerDate Sep 11 2014 03:59 May 22, 2019 Jkt 089200 PO 00000 Frm 00069 Fmt 6652 Sfmt 6201 E:\BILLS\S1431.IS S1431

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1 traded fund shall not be prevented by reason of beneficial 

2 interests in such a fund being held by 1 or more author3 ized participants or market makers. 

4 (c) CONFIRM THAT SIMILARITIES TO OTHER FUNDS

5 ARE IRRELEVANT.—The Secretary of the Treasury (or 

6 the Secretary’s delegate) shall amend Treas. Reg. section 

7 1.817–5(f) to confirm that, for Federal income tax pur8 poses, a regulated investment company, partnership, or 

9 trust (including an exchange-traded fund) that satisfies 

10 the requirements of Treas. Reg. section 1.817–5(f) (2) 

11 and (3) shall not be treated as owned by the holder of 

12 a variable contract pursuant to the principles of Rev. Rul. 

13 81–225, 1981–2 C.B. 12, merely because another regu14 lated investment company, partnership, trust, or similar 

15 investment vehicle follows the same investment strategy, 

16 has the same investment manager, or holds the same in17 vestments. 

18 (d) DEFINE RELEVANT TERMS.—In amending 

19 Treas. Reg. section 1.817–5(f)(3) in accordance with sub20 sections (b) and (c) of this section, the Secretary of the 

21 Treasury (or the Secretary’s delegate) shall provide defini22 tions consistent with the following: 

23 (1) EXCHANGE-TRADED FUND.—The term ‘‘ex24 change-traded fund’’ means a regulated investment 

25 company, partnership, or trust— 


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1 (A) that is registered with the Securities 

2 and Exchange Commission as an open-end in3 vestment company or a unit investment trust; 

4 (B) the shares of which can be purchased 

5 or redeemed directly from the fund only by an 

6 authorized participant; and 

7 (C) the shares of which are traded 

8 throughout the day on a national stock ex9 change at market prices that may or may not 

10 be the same as the net asset value of the 

11 shares. 

12 (2) AUTHORIZED PARTICIPANT.—The term 

13 ‘‘authorized participant’’ means a financial institu14 tion that is a member or participant of a clearing 

15 agency registered under section 17A(b) of the Secu16 rities Exchange Act of 1934 that enters into a con17 tractual relationship with an exchange-traded fund 

18 pursuant to which the financial institution is per19 mitted to purchase and redeem shares directly from 

20 the fund and to sell such shares to third parties, but 

21 only if the contractual arrangement or applicable law 

22 precludes the financial institution from— 

23 (A) purchasing the shares for its own in24 vestment purposes rather than for the exclusive 


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1 purpose of creating and redeeming such shares 

2 on behalf of third parties; and 

3 (B) selling the shares to third parties who 

4 are not market makers or otherwise described 

5 in Treas. Reg. section 1.817–5(f) (1) and (3). 

6 (3) MARKET MAKER.—The term ‘‘market 

7 maker’’ means a financial institution that is a reg8 istered broker or dealer under section 15(b) of the 

9 Securities Exchange Act of 1934 that maintains li10 quidity for an exchange-traded fund on a national 

11 stock exchange by being always ready to buy and sell 

12 shares of such fund on the market, but only if the 

13 financial institution is contractually or legally pre14 cluded from selling or buying such shares to or from 

15 persons who are not authorized participants or oth16 erwise described in Treas. Reg. section 1.817–5(f) 

17 (2) and (3). 

18 (e) EFFECTIVE DATES, ENFORCEMENT, AND INTER19 PRETATIONS.— 

20 (1) EFFECTIVE DATES.— 

21 (A) Subsection (b), and the definitions 

22 under subsection (d), shall apply to segregated 

23 asset account investments made on or after the 

24 date of enactment of this Act. 


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1 (B) Subsection (c) shall apply to taxable 

2 years beginning after December 31, 1983. 

3 (2) ENFORCEMENT AND INTERPRETATIONS.— 

4 Prior to the date that the Secretary of the Treasury 

5 (or the Secretary’s delegate) issues final regulations 

6 pursuant to this section— 

7 (A) the Secretary (or delegate) shall ad8 minister and enforce the law in accordance with 

9 this section and the effective dates in paragraph 

10 (1) of this subsection; and 

11 (B) taxpayers may rely upon their reason12 able good faith interpretations of the preceding 

13 subsections of this section. 

14 TITLE III—SIMPLIFICATION AND 

15 CLARIFICATION OF RETIRE16 MENT PLAN RULES 

17 SEC. 301. REVIEW AND REPORT TO THE CONGRESS RELAT18 ING TO REPORTING AND DISCLOSURE RE19 QUIREMENTS. 

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

21 the enactment of this Act, the Secretary of Labor, the Sec22 retary of the Treasury, and the Director of the Pension 

23 Benefit Guaranty Corporation (or their delegates) shall re24 view the reporting and disclosure requirements of— 


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1 (1) title I of the Employee Retirement Income 

2 Security Act of 1974, as applicable to pension plans 

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

4 (2) the Internal Revenue Code of 1986, as ap5 plicable to qualified retirement plans (as defined in 

6 section 4974(c) of such Code, without regard to 

7 paragraphs (4) and (5) thereof). 

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

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

10 the Secretary of the Treasury, and the Director of the 

11 Pension Benefit Guaranty Corporation (or their dele12 gates), jointly, shall make such recommendations as may 

13 be appropriate to the appropriate committees of the Con14 gress to consolidate, simplify, standardize, and improve 

15 the applicable reporting and disclosure requirements so as 

16 to simplify reporting for plans described in subsection (a) 

17 and ensure that necessary, comprehensible information is 

18 provided to participants and beneficiaries of such plans. 

19 SEC. 302. CONSOLIDATION OF DEFINED CONTRIBUTION 

20 PLAN NOTICES. 

21 Not later than 18 months after the date of the enact22 ment of this Act, the Secretary of Labor and the Secretary 

23 of the Treasury (or such Secretaries’ delegates) shall 

24 adopt regulations providing that a plan may, but is not 

25 required to, consolidate 2 or more of the notices required 


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1 under sections 404(c)(5)(B) and 514(e)(3) of the Em2 ployee Retirement Income Security Act of 1974 (29 

3 U.S.C. 1104(c)(5)(B) and 29 U.S.C. 1144(e)(3)) and sec4 tions 401(k)(12)(D), 401(k)(13)(E), and 414(w)(4) of the 

5 Internal Revenue Code of 1986 into a single notice so long 

6 as the combined notice includes the required content, 

7 clearly identifies the issues addressed therein, is provided 

8 at the time and with the frequency required for each such 

9 notice, and is presented in a manner that is understand10 able and does not obscure or fail to highlight important 

11 points for participants and beneficiaries. 

12 SEC. 303. PERFORMANCE BENCHMARKS FOR ASSET ALLO13 CATION FUNDS. 

14 (a) IN GENERAL.—Not later than 6 months after the 

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

16 (or the Secretary’s delegate) shall modify the regulations 

17 under section 404 of the Employee Retirement Income Se18 curity Act of 1974 (29 U.S.C. 1104) to provide that, in 

19 the case of a designated investment alternative which con20 tains a mix of asset classes, a plan administrator may, 

21 but is not required to, use a benchmark which is a blend 

22 of different broad-based securities market indices if— 

23 (1) the blend is reasonably representative of the 

24 asset class holdings of the designated investment al25 ternative; 


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1 (2) for purposes of determining the blend’s re2 turns for 1-, 5-, and 10-calendar-year periods (or for 

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

4 modified at least once per year to reflect changes in 

5 the asset class holdings of the designated investment 

6 alternative; 

7 (3) the blend is presented to participants and 

8 beneficiaries in a manner that is reasonably designed 

9 to be understandable and helpful; and 

10 (4) each securities market index which is used 

11 for an associated asset class would separately satisfy 

12 the requirements of such regulations for such asset 

13 class. 

14 (b) STUDY.—Not later than December 31, 2020, the 

15 Secretary of Labor (or the Secretary’s delegate) shall de16 liver a report to the Committees on Ways and Means and 

17 Education and Labor of the House of Representatives and 

18 the Committees on Finance and Health, Education, 

19 Labor, and Pensions of the Senate regarding the effective20 ness of the benchmarking requirements under section 

21 2550.404a–5 of title 29, Code of Federal Regulations. 

22 SEC. 304. PERMIT NONSPOUSAL BENEFICIARIES TO ROLL 

23 ASSETS TO PLANS. 

24 (a) IN GENERAL.—Section 402(c) is amended by 

25 adding at the end the following new paragraph: 


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1 ‘‘(12) DISTRIBUTIONS TO QUALIFIED PLAN OF

2 NONSPOUSE BENEFICIARY.—If, with respect to any 

3 portion of a distribution from an eligible retirement 

4 plan described in clause (iii), (iv), (v), or (vi) of 

5 paragraph (8)(B) of a deceased employee, a direct 

6 trustee-to-trustee transfer is made to another such 

7 plan of an individual who is a designated beneficiary 

8 (as defined by section 401(a)(9)(E)) of the employee 

9 and who is not the surviving spouse of the em10 ployee— 

11 ‘‘(A) the transfer shall be treated as an eli12 gible rollover distribution, and 

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

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

15 (b) CONFORMING AMENDMENTS.—– 

16 (1) 403(a) PLANS.—Subparagraph (B) of sec17 tion 403(a)(4) is amended by striking ‘‘and (11) and 

18 (9)’’ and inserting ‘‘, (9), (11), and (12)’’. 

19 (2) 403(b) PLANS.—Subparagraph (B) of sec20 tion 403(b)(8) is amended by striking ‘‘and (11)’’ 

21 and inserting ‘‘(11), and (12)’’. 

22 (3) 457 PLANS.—Subparagraph (B) of section 

23 457(e)(16) is amended by striking ‘‘and (11)’’ and 

24 inserting ‘‘(11), and (12)’’. 


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

2 this section shall apply to distributions made after the 

3 date of the enactment of this Act. 

4 SEC. 305. DEFERRAL AGREEMENTS. 

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

6 of the Internal Revenue Code of 1986 is amended by in7 serting ‘‘, or, in the case of a plan of an eligible employer 

8 described in subsection (e)(1)(A), before the date on which 

9 the compensation is (but for the deferral) available’’ before 

10 the comma at the end. 

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

12 this section shall apply to years beginning after December 

13 31, 2019. 

14 SEC. 306. SIMPLIFYING 402(f) NOTICES. 

15 Not later than December 31, 2020, the Secretary of 

16 the Treasury (or the Secretary’s delegate), in consultation 

17 with the Secretary of Labor and the Director of the Pen18 sion Benefit Guaranty Corporation (or their delegates), 

19 shall simplify the model notices issued under section 

20 402(f) of the Internal Revenue Code of 1986 so as to fa21 cilitate better understanding by recipients of different dis22 tribution options and corresponding tax consequences. 

23 Such model notices shall include an explanation of the ef24 fect of elections on spousal rights. 


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1 SEC. 307. TREATMENT OF CUSTODIAL ACCOUNTS ON TER2 MINATION OF SECTION 403(b) PLANS. 

3 (a) IN GENERAL.—Not later than 6 months after the 

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

5 Treasury (or the Secretary’s delegate) shall issue guidance 

6 to provide that, if an employer terminates the plan under 

7 which amounts are contributed to a custodial account 

8 under subparagraph (A) of section 403(b)(7) of the Inter9 nal Revenue Code of 1986— 

10 (1) the plan administrator or custodian may 

11 distribute an individual custodial account in kind to 

12 a participant or beneficiary of the plan, and 

13 (2) the distributed custodial account shall be 

14 maintained by the custodian on the same basis as a 

15 custodial account to which section 403(b)(7) of such 

16 Code applies, similar to the treatment of fully paid 

17 individual annuity contracts under Revenue Ruling 

18 2011–7, until amounts are actually paid to the par19 ticipant or beneficiary. 

20 (b) TREATMENT OF ACCOUNTS.—The guidance 

21 issued under subsection (a) shall also provide that— 

22 (1) the status of the distributed custodial ac23 count under section 403(b)(7) of the Internal Rev24 enue Code of 1986 is generally maintained if the 

25 custodial account thereafter adheres to the require26 ments of section 403(b) of such Code which are in 


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1 effect at the time of the distribution of the account, 

2 and 

3 (2) a custodial account will not be considered 

4 distributed to the participant or beneficiary if the 

5 employer has any material retained rights under the 

6 account. 

7 For purposes of paragraph (2), an employer shall not be 

8 treated as retaining material rights over a custodial ac9 count solely because the custodial account was originally 

10 opened under a group contract. 

11 (c) DISTRIBUTION UPON TERMINATION.— 

12 (1) IN GENERAL.—Paragraph (11) of section 

13 403(b) is amended by striking ‘‘or’’ at the end of 

14 subparagraph (B), by striking the period at the end 

15 of subparagraph (C) and inserting ‘‘, or’’, and by in16 serting after subparagraph (C) the following new 

17 subparagraph: 

18 ‘‘(D) in the case of a termination of the 

19 plan under which contributions were made, 

20 without the establishment or maintenance of 

21 another plan under this subsection.’’. 

22 (2) CUSTODIAL ACCOUNTS.—Section 

23 403(b)(7)(A)(ii) is amended by striking ‘‘before the 

24 employee dies’’ and inserting ‘‘before the termination 

25 of the plan under which contributions were made to 


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1 the custodial account (without the establishment or 

2 maintenance of another plan under this subsection), 

3 or before the employee dies’’. 

4 (d) EFFECTIVE DATE.—The guidance issued under 

5 subsections (a) and (b), and the amendments made by 

6 subsection (c), shall apply to taxable years beginning after 

7 December 31, 2008. 

8 SEC. 308. PERMIT PLANS TO USE BASE PAY OR RATE OF 

9 PAY CALCULATION. 

10 (a) IN GENERAL.—Not later than December 31, 

11 2020, the Secretary of the Treasury (or the Secretary’s 

12 delegate) shall modify Treasury Regulation section 

13 1.414(s)–1(d)(3) to facilitate the use of the safe harbors 

14 in sections 401(k)(12), 401(k)(13), 401(k)(15), 

15 401(m)(11), 401(m)(12), and 401(m)(13) of the Internal 

16 Revenue Code of 1986, and in Treasury Regulation sec17 tion 1.401(a)(4)–3(b), by plans which use base pay or rate 

18 of pay in determining contributions or benefits. Such fa19 cilitation shall include increased flexibility in meeting the 

20 definition in section 414(s) of such Code in situations 

21 where the amount of overtime compensation payable in a 

22 year can vary significantly. 

23 (b) EXCEPTION.—The Secretary of the Treasury (or 

24 the Secretary’s delegate) may make any modification 

25 under subsection (a) inapplicable to plans with respect to 


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1 which, on a consistent basis, overtime is a major compo2 nent of a substantial portion of the employees eligible to 

3 participate in the plan who are not highly compensated 

4 employees (as defined in section 414(q) of the Internal 

5 Revenue Code of 1986). 

6 SEC. 309. ROTH SIMPLE IRAS. 

7 (a) IN GENERAL.—Section 408A(f) is amended— 

8 (1) by striking ‘‘or a simple retirement ac9 count’’ in paragraph (1); and 

10 (2) by striking ‘‘or account’’ in paragraph (2). 

11 (b) CONFORMING AMENDMENTS.—Section 

12 408A(c)(2) is amended by adding at the end the following 

13 flush sentence: 

14 ‘‘In applying this paragraph to an individual on 

15 whose behalf elective employer contributions are 

16 made to a simple retirement account, the amount 

17 described in subparagraph (A) shall be increased by 

18 the amount of elective employer contributions made 

19 on behalf of the individual to such account, except 

20 to the extent that such contributions exceed the ap21 plicable dollar amount (as defined in subsection 

22 (p)(2)(E)) or cause the elective deferrals (as defined 

23 in section 402(g)(3)) on behalf of such individual to 

24 exceed the limitation under section 402(g)(1) (tak25 ing into account subparagraph (C) thereof).’’. 


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

2 this section shall apply to taxable years beginning after 

3 December 31, 2019. 

4 SEC. 310. REDUCTION IN EXCISE TAX ON CERTAIN ACCU5 MULATIONS IN QUALIFIED RETIREMENT 

6 PLANS. 

7 (a) IN GENERAL.—Subsection (a) of section 4974 is 

8 amended by striking ‘‘50 percent’’ and inserting ‘‘25 per9 cent’’. 

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

11 this section shall apply to taxable years beginning after 

12 December 31, 2019. 

13 SEC. 311. CLARIFICATION OF CATCH-UP CONTRIBUTIONS 

14 WITH RESPECT TO SEPARATE LINES OF BUSI15 NESS. 

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

17 414(v)(4) is amended— 

18 (1) by striking ‘‘except that a plan’’ and insert19 ing ‘‘except that— 

20 ‘‘(i) a plan’’; 

21 (2) by striking the period at the end and insert22 ing ‘‘, and’’; and 

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

24 clause: 


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1 ‘‘(ii) for any year in which an em2 ployer complies with section 410(b) on the 

3 basis of separate lines of business pursuant 

4 to section 410(b)(5), the employer may 

5 apply subparagraph (A) for such year sep6 arately with respect to employees in each 

7 separate line of business.’’. 

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

9 this section shall apply to taxable years beginning after 

10 December 31, 2019. 

11 SEC. 312. CLARIFICATION OF SUBSTANTIALLY EQUAL PERI12 ODIC PAYMENT RULE. 

13 (a) IN GENERAL.—Paragraph (4) of section 72(t) is 

14 amended by inserting at the end the following new sub15 paragraph: 

16 ‘‘(C) ROLLOVERS TO SUBSEQUENT

17 PLAN.—If— 

18 ‘‘(i) payments described in paragraph 

19 (2)(A)(iv) are being made from a qualified 

20 retirement plan, 

21 ‘‘(ii) a transfer or a rollover from such 

22 qualified retirement plan of all or a portion 

23 of the taxpayer’s benefit under the plan is 

24 made to another qualified retirement plan, 

25 and 


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1 ‘‘(iii) distributions from the transferor 

2 and transferee plans would in combination 

3 continue to satisfy the requirements of 

4 paragraph (2)(A)(iv) if they had been 

5 made only from the transferor plan, 

6 such transfer or rollover shall not be treated as 

7 a modification under subparagraph (A)(ii), and 

8 compliance with paragraph (2)(A)(iv) shall be 

9 determined on the basis of the combined dis10 tributions described in clause (iii).’’. 

11 (b) NONQUALIFIED ANNUITY CONTRACTS.—Para12 graph (3) of section 72(q) is amended— 

13 (1) by redesignating clauses (i) and (ii) of sub14 paragraph (B) as subclauses (I) and (II), and by 

15 moving such subclauses 2 ems to the right; 

16 (2) by redesignating subparagraphs (A) and 

17 (B) as clauses (i) and (ii), by moving such clauses 

18 2 ems to the right, and by adjusting the flush lan19 guage at the end accordingly; 

20 (3) by striking ‘‘PAYMENTS.—If’’ and inserting 

21 ‘‘PAYMENTS.— 

22 ‘‘(A) IN GENERAL.—If—’’; and 

23 (4) by adding at the end the following new sub24 paragraph: 


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1 ‘‘(B) EXCHANGES TO SUBSEQUENT CON2 TRACTS.—If— 

3 ‘‘(i) payments described in paragraph 

4 (2)(D) are being made from an annuity 

5 contract, 

6 ‘‘(ii) an exchange of all or a portion of 

7 such contract for another contract is made 

8 under section 1035, and 

9 ‘‘(iii) the aggregate distributions from 

10 the contracts involved in the exchange con11 tinue to satisfy the requirements of para12 graph (2)(D) as if the exchange had not 

13 taken place, 

14 such exchange shall not be treated as a modi15 fication under subparagraph (A)(ii), and com16 pliance with paragraph (2)(D) shall be deter17 mined on the basis of the combined distribu18 tions described in clause (iii).’’. 

19 (c) INFORMATION REPORTING.—Section 6724 is 

20 amended by inserting at the end the following new sub21 section: 

22 ‘‘(g) SPECIAL RULE FOR REPORTING CERTAIN ADDI23 TIONAL TAXES.—No penalty shall be imposed under sec24 tion 6721 or 6722 if— 


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1 ‘‘(1) a person makes a return or report under 

2 section 6047(d) or 408(i) with respect to any dis3 tribution, 

4 ‘‘(2) such distribution is made following a roll5 over, transfer, or exchange described in section 

6 72(t)(4)(C) or section 72(q)(3)(C), 

7 ‘‘(3) in making such return or report the person 

8 relies upon a certification provided by the taxpayer 

9 that the distributions satisfy the requirements of 

10 section 72(t)(4)(C)(iii) or section 72(q)(3)(B)(iii), as 

11 applicable, and 

12 ‘‘(4) such person does not have actual knowl13 edge that the distributions do not satisfy such re14 quirements.’’. 

15 (d) SAFE HARBOR FOR ANNUITY PAYMENTS.— 

16 (1) QUALIFIED RETIREMENT PLANS.—Subpara17 graph (A) of section 72(t)(2) is amended by adding 

18 at the end the following flush sentence: 

19 ‘‘For purposes of clause (iv), periodic payments 

20 shall not fail to be treated as substantially 

21 equal merely because they are amounts received 

22 as an annuity, and such periodic payments shall 

23 be deemed to be substantially equal if they are 

24 payable over a period described in clause (iv) 


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1 and satisfy the requirements applicable to an2 nuity payments under section 401(a)(9).’’. 

3 (2) OTHER ANNUITY CONTRACTS.—Paragraph 

4 (2) of section 72(q) is amended by adding at the end 

5 the following flush sentence: 

6 ‘‘For purposes of subparagraph (D), periodic pay7 ments shall not fail to be treated as substantially 

8 equal merely because they are amounts received as 

9 an annuity, and such periodic payments shall be 

10 deemed to be substantially equal if they are payable 

11 over a period described in subparagraph (D) and 

12 would satisfy the requirements applicable to annuity 

13 payments under section 401(a)(9) if such require14 ments applied.’’. 

15 (e) EFFECTIVE DATES.— 

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

17 subsections (a), (b), and (c) shall apply to transfers, 

18 rollovers, and exchanges occurring on or after the 

19 date of the enactment of this Act. 

20 (2) ANNUITY PAYMENTS.—The amendment 

21 made by subsection (d) shall apply to distributions 

22 commencing on or after the date of the enactment 

23 of this Act. 

24 (3) NO INFERENCE.—Nothing in the amend25 ments made by this section shall be construed to 


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•S 1431 IS

1 create an inference with respect to the law in effect 

2 prior to the effective date of such amendments. 

3 SEC. 313. CLARIFICATION OF TREATMENT OF DISTRIBU4 TIONS OF ANNUITY CONTRACTS. 

5 (a) IN GENERAL.—Clause (i) of section 402(e)(4)(D) 

6 is amended by inserting after ‘‘section 401(c)(1).’’ at the 

7 end of the second sentence the following: ‘‘A distribution 

8 of an annuity contract from a trust or annuity plan re9 ferred to in the first sentence of this clause may be treated 

10 as a part of a lump sum distribution.’’. 

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

12 this section shall take effect as if included in section 

13 1401(b)(1) of the Small Business Job Protection Act of 

14 1996. 

15 SEC. 314. CLARIFICATION REGARDING ELECTIVE DEFER16 RALS. 

17 (a) IN GENERAL.—Not later than 6 months after the 

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

19 Treasury (or the Secretary’s delegate) shall amend Treas. 

20 Reg. section 1.415(c)–2(e), and make any necessary con21 forming amendments to other Treasury Regulations, to 

22 provide that plans may allow employees who have had a 

23 severance from employment to make deferrals or contribu24 tions described in subsection (b) with respect to payments 

25 of severance or back pay. The Secretary of the Treasury 


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•S 1431 IS

1 (or delegate) may provide for such other conditions on 

2 such deferrals or contributions as are necessary to carry 

3 out the purposes of this section. 

4 (b) DEFERRALS AND CONTRIBUTIONS DESCRIBED.— 

5 The deferrals or contributions described in this subsection 

6 are— 

7 (1) elective deferrals described in subparagraph 

8 (A), (B), or (C) of section 402(g)(3) of the Internal 

9 Revenue Code of 1986 (other than elective deferrals 

10 under section 401(k)(11) of such Code); 

11 (2) elective contributions under an eligible de12 ferred compensation plan described in section 457(b) 

13 of such Code; and 

14 (3) to the extent provided by such Secretary (or 

15 delegate), elective deferrals described in section 

16 402(g)(3)(D) or 401(k)(11) of such Code. 

17 (c) TREATMENT OF DEFERRALS.—Except as other18 wise determined by the Secretary of the Treasury (or the 

19 Secretary’s delegate) to be necessary to carry out the pur20 poses of this section, the rules described in subsection (a) 

21 shall provide that the contributions or deferrals shall, for 

22 purposes of section 457 and subchapter D of chapter 1 

23 of subtitle A of the Internal Revenue Code of 1986, be 

24 treated as contributions or deferrals made on behalf of ac25 tive employees, not on behalf of former employees. 


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•S 1431 IS

1 SEC. 315. TAX TREATMENT OF CERTAIN NONTRADE OR 

2 BUSINESS SEP CONTRIBUTIONS. 

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

4 4972(c)(6) is amended— 

5 (1) by striking ‘‘408(p)) or’’ and inserting 

6 ‘‘408(p)),’’; and 

7 (2) by inserting ‘‘, or a simplified employee pen8 sion (within the meaning of section 408(k))’’ after 

9 ‘‘401(k)(11))’’. 

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

11 this section shall apply to taxable years beginning after 

12 December 31, 2019. 

13 SEC. 316. ALLOW CERTAIN PLAN TRANSFERS AND MERG14 ERS. 

15 (a) AMENDMENTS TO THE INTERNAL REVENUE

16 CODE OF 1986.— 

17 (1) IN GENERAL.—Section 414 is amended by 

18 adding at the end the following new subsection: 

19 ‘‘(aa) CERTAIN PLAN TRANSFERS AND MERGERS.— 

20 ‘‘(1) IN GENERAL.—Under rules prescribed by 

21 the Secretary, no amount shall be includible in gross 

22 income by reason of— 

23 ‘‘(A) a transfer of all or a portion of the 

24 account balance of a participant or beneficiary, 

25 whether or not vested, from a defined contribu26 tion plan described in section 401(a) or section 


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•S 1431 IS

1 403(a) of an employer to an annuity contract 

2 described in section 403(b) of the same em3 ployer, 

4 ‘‘(B) a transfer of all or a portion of the 

5 account balance of a participant or beneficiary, 

6 whether or not vested, from an annuity contract 

7 described in section 403(b) of an employer to a 

8 defined contribution plan described in section 

9 401(a) or section 403(a) of the same employer, 

10 or 

11 ‘‘(C) a merger of a defined contribution 

12 plan described in section 401(a) or section 

13 403(a) of an employer with an annuity contract 

14 described in section 403(b) of the same em15 ployer, 

16 so long as the transfer or merger does not cause a 

17 reduction in the vested benefit or total benefit (in18 cluding non-vested benefit) of any participant or 

19 beneficiary. A plan or contract shall not fail to be 

20 considered to be described in section 401(a), 403(a), 

21 or 403(b) (as applicable) merely because such plan 

22 or contract engages in a transfer or merger de23 scribed in this paragraph. 

24 ‘‘(2) DISTRIBUTIONS.—Amounts transferred or 

25 merged pursuant to paragraph (1) shall be subject 


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•S 1431 IS

1 to the requirements of paragraphs (3) and (4) and 

2 to the distribution requirements under section 

3 401(a), 403(a), or 403(b) applicable to the trans4 feree or merged plan. 

5 ‘‘(3) SPOUSAL CONSENT AND ANTI-CUTBACK

6 PROTECTION.—In the case of a transfer or merger 

7 described in paragraph (1), amounts in the trans8 feree or merged plan that are attributable to the 

9 transferor or predecessor plan shall— 

10 ‘‘(A)(i) be subject to section 401(a)(11) 

11 and section 205 of the Employee Retirement 

12 Income Security Act of 1974 to the extent that 

13 such sections applied to such amounts in the 

14 transferor or predecessor plan, or 

15 ‘‘(ii) be required to satisfy the require16 ments of section 401(a)(11)(B)(iii)(I) and sec17 tion 205(b)(1)(C)(i) of the Employee Retire18 ment Income Security Act of 1974 to the extent 

19 that such sections applied to such amounts in 

20 the transferor or predecessor plan, and 

21 ‘‘(B) be treated as subject to section 

22 411(d)(6) and section 204(g) of the Employee 

23 Retirement Income Security Act of 1974 to the 

24 extent that such amounts were subject to such 

25 sections in the transferor or predecessor plan. 


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1 ‘‘(4) SPECIAL RULES.—Under rules prescribed 

2 by the Secretary, to the extent amounts transferred 

3 or merged pursuant to paragraph (1) were otherwise 

4 entitled to grandfather treatment under the trans5 feror or predecessor plan, such amounts (and income 

6 or loss attributable thereto) shall remain entitled to 

7 such treatment under the transferee or merged plan. 

8 The rules prescribed by the Secretary shall require 

9 that such amounts be separately accounted for by 

10 the transferee or merged plan. For purposes of this 

11 paragraph, the term ‘grandfather treatment’ means 

12 any special treatment under this title that is pro13 vided for prior benefits, prior periods of time, or cer14 tain individuals in connection with a change in the 

15 applicable law. 

16 ‘‘(5) CONSENT.—In the case of a qualified trust 

17 described in section 401(a) or 403(a) and an annu18 ity contract described in section 403(b) with respect 

19 to which transfers may be made only with the con20 sent of a participant or beneficiary pursuant to the 

21 terms of such trust or contract or pursuant to appli22 cable law, such consent requirement shall apply 

23 without regard to this subsection. Nothing in this 

24 subsection shall affect the application of contract or 


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•S 1431 IS

1 plan terms otherwise applicable in the case of a 

2 withdrawal from the contract or plan.’’. 

3 (2) AGGREGATION.—Paragraph (2) of section 

4 414(t) is amended by inserting ‘‘414(aa),’’ after 

5 ‘‘274(j),’’. 

6 (3) TECHNICAL AMENDMENT.—The heading of 

7 subsection (z) of section 414 is amended by striking 

8 ‘‘PLAN’’ and inserting ‘‘CHURCH PLAN’’. 

9 (b) AMENDMENT TO THE EMPLOYEE RETIREMENT

10 INCOME SECURITY ACT OF 1974.—Section 4 of the Em11 ployee Retirement Income Security Act of 1974 (29 

12 U.S.C. 1003) is amended by adding at the end the fol13 lowing new subsection: 

14 ‘‘(d) This title shall apply to any plan or contract de15 scribed in section 414(aa) of the Internal Revenue Code 

16 of 1986 to the extent necessary to comply with the re17 quirements of such section.’’. 

18 (c) EFFECTIVE DATE.— 

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

20 this section shall apply to transfers or mergers in 

21 years beginning after the Secretary of the Treasury 

22 (or the Secretary’s delegate) prescribes rules under 

23 section 414(aa) of the Internal Revenue Code of 

24 1986, as added by this section. 


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•S 1431 IS

1 (2) RULES.—The Secretary of the Treasury (or 

2 the Secretary’s delegate) shall issue rules under sec3 tion 414(aa) of the Internal Code of 1986, as so 

4 added, within 1 year after the date of the enactment 

5 of this Act. 

6 SEC. 317. EXCEPTION FROM REQUIRED DISTRIBUTIONS 

7 WHERE AGGREGATE RETIREMENT SAVINGS 

8 DO NOT EXCEED $100,000. 

9 (a) IN GENERAL.—Section 401(a)(9), as amended by 

10 this Act, is further amended by adding at the end the fol11 lowing new subparagraph: 

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

15 NOT EXCEED $100,000.— 

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

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

20 exceed $100,000, then, with respect to any 

21 applicable eligible retirement plan of the 

22 employee, during any succeeding calendar 

23 year beginning before the next measure24 ment date the requirements of subpara25 graph (A) shall not apply to the employee. 


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•S 1431 IS

1 ‘‘(ii) APPLICABLE ELIGIBLE RETIRE2 MENT PLAN.—For purposes of this sub3 paragraph, the term ‘applicable eligible re4 tirement plan’ means an eligible retirement 

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

6 and any other plan, contract, or arrange7 ment to which the requirements of this 

8 paragraph apply, but does not include any 

9 defined benefit plan. 

10 ‘‘(iii) MEASUREMENT DATE.— 

11 ‘‘(I) INITIAL MEASUREMENT

12 DATES.—The initial measurement 

13 date for an employee is the last day of 

14 the calendar year preceding the earlier 

15 of— 

16 ‘‘(aa) the calendar year in 

17 which the employee attains the 

18 applicable age, or 

19 ‘‘(bb) the calendar year in 

20 which the employee dies. 

21 ‘‘(II) SUBSEQUENT MEASURE22 MENT DATES.—If, in a calendar year, 

23 an employee to whom subparagraph 

24 (A) does not apply by reason of clause 

25 (i) receives contributions, rollovers, or 


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•S 1431 IS

1 transfers of amounts which were not 

2 previously taken into account in ap3 plying this subparagraph, then the 

4 last day of that calendar year shall be 

5 a new measurement date and a new 

6 determination shall be made as to 

7 whether clause (i) applies to such em8 ployee. 

9 ‘‘(III) SPECIAL RULE.—In the 

10 case of an employee who receives ac11 count statements at least annually 

12 with respect to a plan, the value of 

13 the employee’s interest in such plan 

14 as shown on the last account state15 ment provided to such employee for 

16 such calendar year may (at the elec17 tion of the employee) be treated as the 

18 value of the employee’s interest in 

19 such plan on the measurement date. 

20 If such last account statement does 

21 not include all amounts described in 

22 subclause (II) for such calendar year, 

23 the last day of the next calendar year 

24 shall be a new measurement date in 

25 accordance with subclause (II) and a 


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•S 1431 IS

1 new determination shall be made as to 

2 whether clause (i) applies to such em3 ployee. 

4 ‘‘(iv) DETERMINATION OF VALUE.— 

5 For purposes of this subparagraph, the 

6 value of an employee’s interest in a plan is 

7 the account balance of such plan. 

8 ‘‘(v) PHASE-OUT OF EXCEPTION.—In 

9 the case of an employee whose aggregate 

10 balance described in clause (i) as of a 

11 measurement date exceeds the dollar 

12 amount in effect under such clause by less 

13 than $10,000, the required distributions 

14 under this paragraph for calendar years 

15 beginning after such measurement date 

16 and before the next measurement date 

17 shall be equal to the amount which bears 

18 the same ratio to the required distributions 

19 otherwise determined under this paragraph 

20 as— 

21 ‘‘(I) the amount by which such 

22 aggregate balance exceeds such dollar 

23 amount so in effect, bears to 

24 ‘‘(II) $10,000. 


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1 ‘‘(vi) COST-OF-LIVING ADJUST2 MENTS.—The Secretary shall adjust annu3 ally the $100,000 amount specified in 

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

5 at the same time and in the same manner 

6 as adjustments under section 415(d); ex7 cept that the base period shall be the cal8 endar quarter beginning July 1, 2019, and 

9 any increase which is not a multiple of 

10 $5,000 shall be rounded to the next lowest 

11 multiple of $5,000. 

12 ‘‘(vii) PLAN RELIANCE.—The plan ad13 ministrator of an applicable eligible retire14 ment plan shall be entitled to rely on a cer15 tification provided by an employee that 

16 such employee’s interest in other applicable 

17 eligible retirement plans does not prevent 

18 such employee from being described in 

19 clause (i). Any such certification shall 

20 apply to all future years in the absence of 

21 a contrary certification from the employee, 

22 and shall apply to the current year if re23 ceived not later than March 1 of such cur24 rent year. If no such certification is re25 ceived by the plan administrator by March 


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•S 1431 IS

1 1 of a year for which a required distribu2 tion is to be made under subparagraph 

3 (A), the plan administrator shall be treated 

4 as required to make the distribution re5 quired under subparagraph (A) for such 

6 year.’’. 

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

8 this section shall apply to initial measurement dates occur9 ring on or after December 31, 2019. 

10 SEC. 318. HARDSHIP RULES FOR 403(b) PLANS. 

11 (a) IN GENERAL.—Section 403(b) is amended by 

12 adding at the end the following new paragraph: 

13 ‘‘(15) SPECIAL RULES RELATING TO HARDSHIP

14 WITHDRAWALS.—For purposes of paragraphs (7) 

15 and (11)— 

16 ‘‘(A) AMOUNTS WHICH MAY BE WITH17 DRAWN.—The following amounts may be dis18 tributed upon hardship of the employee: 

19 ‘‘(i) Contributions made pursuant to a 

20 salary reduction agreement (within the 

21 meaning of section 3121(a)(5)(D)). 

22 ‘‘(ii) Qualified nonelective contribu23 tions (as defined in section 401(m)(4)(C)). 

24 ‘‘(iii) Qualified matching contributions 

25 described in section 401(k)(3)(D)(ii)(I). 


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1 ‘‘(iv) Earnings on any contributions 

2 described in clause (i), (ii), or (iii). 

3 ‘‘(B) NO REQUIREMENT TO TAKE AVAIL4 ABLE LOAN.—A distribution shall not be treat5 ed as failing to be made upon the hardship of 

6 an employee solely because the employee does 

7 not take any available loan under the plan.’’. 

8 (b) CONFORMING AMENDMENTS.— 

9 (1) Section 403(b)(7)(A)(ii) is amended by 

10 striking ‘‘in the case of contributions made pursuant 

11 to a salary reduction agreement (within the meaning 

12 of section 3121(a)(5)(D))’’ and inserting ‘‘subject to 

13 the provisions of paragraph (15)’’. 

14 (2) Paragraph (11) of section 403(b), as 

15 amended by this Act, is further amended— 

16 (A) by striking ‘‘in’’ in subparagraph (B) 

17 and inserting ‘‘subject to the provisions of para18 graph (15), in’’; and 

19 (B) by striking the last sentence. 

20 (c) 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. 319. IRA PRESERVATION. 

2 (a) INFORMATION MADE AVAILABLE.—The Sec3 retary of the Treasury (or the Secretary’s delegate) shall 

4 make available to the public the following information: 

5 (1) An overview of the laws and regulations re6 lated to individual retirement plans (as defined in 

7 section 7701(a)(37) of the Internal Revenue Code of 

8 1986), including— 

9 (A) limits on contributions; 

10 (B) limits on deductions for contributions; 

11 (C) rollovers; 

12 (D) minimum required distributions; 

13 (E) non-exempt prohibited transactions; 

14 and 

15 (F) tax consequences for early distribu16 tions. 

17 (2) Examples of common errors by taxpayers 

18 with respect to the laws and regulations described in 

19 paragraph (1) and instructions on how to avoid such 

20 errors. 

21 (b) REDUCTION IN EXCISE TAX ON EXCESS CON22 TRIBUTIONS.—Section 4973 is amended by adding at the 

23 end the following new subsection: 

24 ‘‘(i) REDUCTION OF TAX IN CERTAIN CASES.— 

25 ‘‘(1) REDUCTION.—In the case of a taxpayer 

26 who— 


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•S 1431 IS

1 ‘‘(A) corrects, during the correction win2 dow, an excess contribution which was made to 

3 an individual retirement plan and which re4 sulted in imposition of a tax under paragraph 

5 (1) or (3) of subsection (a), and 

6 ‘‘(B) submits a return, during the correc7 tion window, reflecting such tax (as modified by 

8 this subsection), 

9 the first and second sentences of subsection (a) shall 

10 be applied by substituting ‘3 percent’ for ‘6 percent’ 

11 each place it appears. 

12 ‘‘(2) CORRECTION WINDOW.—For purposes of 

13 this subsection, the term ‘correction window’ means 

14 the period beginning on the date on which the tax 

15 under subsection (a) is imposed with respect to an 

16 excess contribution, and ending on the earlier of— 

17 ‘‘(A) the date on which the Secretary initi18 ates an audit, or otherwise demands payment, 

19 with respect to the excess contribution, or 

20 ‘‘(B) the last day of the second taxable 

21 year that begins after the end of the taxable 

22 year in which the tax under subsection (a) is 

23 imposed.’’. 

24 (c) REDUCTION IN EXCISE TAX ON FAILURES TO

25 TAKE REQUIRED MINIMUM DISTRIBUTIONS.—Section 


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1 4974, as amended by this Act, is further amended by add2 ing at the end the following new subsection: 

3 ‘‘(e) REDUCTION OF TAX IN CERTAIN CASES.— 

4 ‘‘(1) REDUCTION.—In the case of a taxpayer 

5 who— 

6 ‘‘(A) corrects, during the correction win7 dow, a shortfall of distributions from an indi8 vidual retirement plan which resulted in imposi9 tion of a tax under subsection (a), and 

10 ‘‘(B) submits a return, during the correc11 tion window, reflecting such tax (as modified by 

12 this subsection), 

13 the first sentence of subsection (a) shall be applied 

14 by substituting ‘10 percent’ for ‘25 percent’. 

15 ‘‘(2) CORRECTION WINDOW.—For purposes of 

16 this subsection, the term ‘correction window’ means 

17 the period of time beginning on the date on which 

18 the tax under subsection (a) is imposed with respect 

19 to a shortfall of distributions from an individual re20 tirement plan, and ending on the earlier of— 

21 ‘‘(A) the date on which the Secretary initi22 ates an audit, or otherwise demands payment, 

23 with respect to the shortfall of distributions, or 

24 ‘‘(B) the last day of the second taxable 

25 year that begins after the end of the taxable 


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•S 1431 IS

1 year in which the tax under subsection (a) is 

2 imposed.’’. 

3 (d) REPEAL OF TAX DISQUALIFICATION PENALTY.— 

4 (1) IN GENERAL.—Paragraph (2) of subsection 

5 (e) of section 408 is repealed. 

6 (2) CONFORMING AMENDMENTS.— 

7 (A) Section 408(e)(1) is amended by strik8 ing ‘‘(2) or’’. 

9 (B) Sections 220(e)(2), 223(e)(2), and 

10 530(e) are each amended by striking ‘‘para11 graphs (2) and (4) of section 408(e)’’ and in12 serting ‘‘section 408(e)(4)’’. 

13 (C) Section 4975(c)(3) is amended by 

14 striking ‘‘the account ceases to be an individual 

15 retirement account by reason of the application 

16 of section 408(e)(2)(A) or if’’. 

17 (e) STATUTE OF LIMITATIONS.—Subsection (l) of 

18 section 6501 of the Internal Revenue Code of 1986 is 

19 amended— 

20 (1) in paragraph (1), by inserting ‘‘(other than 

21 with respect to an individual retirement plan)’’ after 

22 ‘‘section 4975’’; and 

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

24 paragraph: 


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1 ‘‘(4) INDIVIDUAL RETIREMENT PLANS.—For 

2 purposes of any tax imposed by section 4973, 4974, 

3 or 4975 in connection with an individual retirement 

4 plan, the return referred to in this section shall be 

5 the income tax return filed by the person on whom 

6 the tax under such section is imposed for the year 

7 in which the act (or failure to act) giving rise to the 

8 liability for such tax occurred. In the case of a per9 son who is not required to file an income tax return 

10 for such year— 

11 ‘‘(A) the return referred to in this section 

12 shall be the income tax return that such person 

13 would have been required to file but for the fact 

14 that such person was not required to file such 

15 return, and 

16 ‘‘(B) the 3-year period referred to in sub17 section (a) with respect to the return shall be 

18 deemed to begin on the date by which the re19 turn would have been required to be filed (ex20 cluding any extension thereof).’’. 

21 (f) EFFECTIVE DATE.— 

22 (1) IN GENERAL.—Subject to paragraphs (2) 

23 and (3), this section and the amendments made by 

24 this section shall take effect on the date of the en25 actment of this Act. 


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1 (2) TRANSITION PROVISIONS.— 

2 (A) IN GENERAL.—The amendments made 

3 by this section shall apply to any determination 

4 of or affecting liability for taxes, interest, or 

5 penalties which is made on or after the date of 

6 the enactment of this Act, without regard to 

7 whether the conduct upon which the determina8 tion is based occurred before such date of en9 actment. 

10 (B) CALCULATION OF CORRECTION WIN11 DOW IN CERTAIN CASES.—In the case of an 

12 error that would have been eligible for correc13 tion under section 4973(i) or 4974(e) of the In14 ternal Revenue Code of 1986 if tax had not 

15 been imposed under section 4973(a) or 4974(a), 

16 as the case may be, of such Code before the 

17 date of the enactment of this Act, the correc18 tion window referred to in sections 4973(i) and 

19 4974(e) of such Code (as added by this section) 

20 shall be the period beginning on the date on 

21 which such tax was imposed and ending on the 

22 earlier of— 

23 (i) the date on which the Secretary of 

24 the Treasury (or the Secretary’s delegate) 

25 initiates an audit or otherwise demands 


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•S 1431 IS

1 payment with respect to the conduct de2 scribed in section 4973(a) or 4974(a), as 

3 the case may be, of such Code; or 

4 (ii) the last day of the second taxable 

5 year that begins after the taxable year in 

6 which the date of the enactment of this 

7 Act occurs. 

8 (3) IMPLEMENTATION.—Subsection (a) shall be 

9 implemented as soon as reasonably practicable after 

10 the enactment of this Act but in no case later than 

11 the date that is 1 year after such date of enactment. 

12 SEC. 320. ELIMINATION OF ADDITIONAL TAX ON CERTAIN 

13 DISTRIBUTIONS. 

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

15 72(t)(2), as amended by this Act, is further amended— 

16 (1) by striking ‘‘or’’ at the end of clause (vii); 

17 (2) by striking the period at the end of clause 

18 (viii) and inserting ‘‘, or’’; and 

19 (3) by inserting after clause (viii) the following 

20 new clause: 

21 ‘‘(ix) attributable to withdrawal of in22 terest or other income earned on excess 

23 contributions (as defined in section 

24 4973(b) (without regard to the second to 


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•S 1431 IS

1 last sentence thereof)) to an individual re2 tirement plan.’’. 

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

4 this section shall apply to any determination of, or affect5 ing, liability for taxes, interest, or penalties which is made 

6 on or after the date of the enactment of this Act, without 

7 regard to whether the act (or failure to act) upon which 

8 the determination is based occurred before such date of 

9 enactment. Notwithstanding the preceding sentence, noth10 ing in the amendments made by this section shall be con11 strued to create an inference with respect to the law in 

12 effect prior to the effective date of such amendments. 

13 SEC. 321. DISTRIBUTIONS TO FIREFIGHTERS. 

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

15 72(t)(10) is amended by striking ‘‘414(d))’’ and inserting 

16 ‘‘414(d)) or a distribution from a plan described in clause 

17 (iii), (iv), or (vi) of section 402(c)(8)(B) to an employee 

18 who provides firefighting services’’. 

19 (b) CONFORMING AMENDMENT.—The heading of 

20 paragraph (10) of section 72(t) is amended— 

21 (1) by striking ‘‘PUBLIC’’, and 

22 (2) by striking ‘‘IN GOVERNMENTAL PLANS’’. 

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

24 this section shall apply to distributions made after Decem25 ber 31, 2019. 


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1 SEC. 322. ELIMINATING UNNECESSARY PLAN REQUIRE2 MENTS RELATED TO UNENROLLED PARTICI3 PANTS. 

4 (a) AMENDMENT OF EMPLOYEE RETIREMENT IN5 COME SECURITY ACT OF 1974.— 

6 (1) IN GENERAL.—Part 1 of subtitle B of sub7 chapter I of the Employee Retirement Income Secu8 rity Act of 1974 is amended by redesignating section 

9 111 as section 112 and by inserting after section 

10 110 the following new section: 

11 ‘‘SEC. 111. ELIMINATING UNNECESSARY PLAN REQUIRE12 MENTS RELATED TO UNENROLLED PARTICI13 PANTS. 

14 ‘‘(a) IN GENERAL.—Notwithstanding any other pro15 vision of this title, with respect to any individual account 

16 plan, no disclosure, notice, or other plan document (other 

17 than the notices and documents described in paragraphs 

18 (1) and (2)) shall be required to be furnished under this 

19 title to any unenrolled participant if the unenrolled partici20 pant receives— 

21 ‘‘(1) in connection with the annual open season 

22 election period with respect to the plan or, if there 

23 is no such period, within a reasonable period prior 

24 to the beginning of each plan year, an annual re25 minder notice of such participant’s eligibility to parVerDate Sep 11 2014 03:59 May 22, 2019 Jkt 089200 PO 00000 Frm 00111 Fmt 6652 Sfmt 6201 E:\BILLS\S1431.IS S1431

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•S 1431 IS

1 ticipate in such plan and any applicable election 

2 deadlines under the plan; and 

3 ‘‘(2) any document requested by such partici4 pant which the participant would be entitled to re5 ceive without regard to this section. 

6 ‘‘(b) UNENROLLED PARTICIPANT.—For purposes of 

7 this section, the term ‘unenrolled participant’ means an 

8 employee who— 

9 ‘‘(1) is eligible to participate in an individual 

10 account plan; 

11 ‘‘(2) has received all required notices, disclo12 sures, and other plan documents, including the sum13 mary plan description, required to be furnished 

14 under this title in connection with such participant’s 

15 initial eligibility to participate in such plan; 

16 ‘‘(3) is not participating in such plan; and 

17 ‘‘(4) does not have a balance in the plan. 

18 For purposes of this section, any eligibility to participate 

19 in the plan following any period for which such employee 

20 was not eligible to participate shall be treated as initial 

21 eligibility. 

22 ‘‘(c) ANNUAL REMINDER NOTICE.—For purposes of 

23 this section, the term ‘annual reminder notice’ means a 

24 notice provided in accordance with section 2520.104b–1 


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1 of title 29, Code of Federal Regulations (or any successor 

2 regulation), which— 

3 ‘‘(1) is furnished in connection with the annual 

4 open season election period with respect to the plan 

5 or, if there is no such period, is furnished within a 

6 reasonable period prior to the beginning of each plan 

7 year; 

8 ‘‘(2) notifies the unenrolled participant of— 

9 ‘‘(A) the unenrolled participant’s eligibility 

10 to participate in the plan; and 

11 ‘‘(B) the key benefits under the plan and 

12 the key rights and features under the plan af13 fecting such benefits; and 

14 ‘‘(3) provides such information in a prominent 

15 manner calculated to be understood by the average 

16 participant.’’. 

17 (2) CLERICAL AMENDMENT.—The table of con18 tents in section 1 of the Employee Retirement In19 come Security Act of 1974 is amended by striking 

20 the item relating to section 111 and by inserting 

21 after the item relating to section 110 the following 

22 new items: 

‘‘Sec. 111. Eliminating unnecessary plan requirements related to unenrolled 

participants. 

‘‘Sec. 112. Repeal and effective date.’’. 

23 (b) AMENDMENT OF INTERNAL REVENUE CODE OF

24 1986.—Section 414, as amended by this Act, is further 


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•S 1431 IS

1 amended by adding at the end the following new sub2 section: 

3 ‘‘(bb) ELIMINATING UNNECESSARY PLAN REQUIRE4 MENTS RELATED TO UNENROLLED PARTICIPANTS.— 

5 ‘‘(1) IN GENERAL.—Notwithstanding any other 

6 provision of this title, with respect to any defined 

7 contribution plan, no disclosure, notice, or other plan 

8 document (other than the notices and documents de9 scribed in subparagraphs (A) and (B)) shall be re10 quired to be furnished under this title to any 

11 unenrolled participant if the unenrolled participant 

12 receives— 

13 ‘‘(A) in connection with the annual open 

14 season election period with respect to the plan 

15 or, if there is no such period, within a reason16 able period prior to the beginning of each plan 

17 year, an annual reminder notice of such partici18 pant’s eligibility to participate in such plan and 

19 any applicable election deadlines under the 

20 plan, and 

21 ‘‘(B) any document requested by such par22 ticipant which the participant would be entitled 

23 to receive without regard to this subsection. 


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1 ‘‘(2) UNENROLLED PARTICIPANT.—For pur2 poses of this subsection, the term ‘unenrolled partici3 pant’ means an employee who— 

4 ‘‘(A) is eligible to participate in a defined 

5 contribution plan, 

6 ‘‘(B) has received all required notices, dis7 closures, and other plan documents required to 

8 be furnished under this title and the summary 

9 plan description as provided in section 104(b) 

10 of the Employee Retirement Income Security 

11 Act of 1974 in connection with such partici12 pant’s initial eligibility to participate in such 

13 plan, 

14 ‘‘(C) is not participating in such plan, and 

15 ‘‘(D) does not have a balance in the plan. 

16 For purposes of this subsection, any eligibility to 

17 participate in the plan following any period for 

18 which such employee was not eligible to participate 

19 shall be treated as initial eligibility. 

20 ‘‘(3) ANNUAL REMINDER NOTICE.—For pur21 poses of this subsection, the term ‘annual reminder 

22 notice’ means the notice described in section 111(c) 

23 of the Employee Retirement Income Security Act of 

24 1974.’’. 


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

2 this section shall apply to plan years beginning after De3 cember 31, 2019. 

4 TITLE IV—DEFINED BENEFIT 

5 PLAN REFORMS 

6 SEC. 401. CASH BALANCE. 

7 (a) IN GENERAL.—Section 414, as amended by this 

8 Act, is further amended by adding at the end the following 

9 new subsection: 

10 ‘‘(cc) PROJECTED INTEREST CREDITING RATE.— 

11 For purposes of this part, in the case of an applicable de12 fined benefit plan which provides variable interest cred13 iting rates, the interest crediting rate which is treated as 

14 in effect and as the projected interest crediting rate shall 

15 be a reasonable projection of such variable interest cred16 iting rate, not to exceed 6 percent.’’. 

17 (b) AMENDMENT OF EMPLOYEE RETIREMENT IN18 COME SECURITY ACT OF 1974.—Section 210 of the Em19 ployee Retirement Income Security Act of 1974 (29 

20 U.S.C. 1060) is amended by adding at the end the fol21 lowing new subsection: 

22 ‘‘(g) PROJECTED INTEREST CREDITING RATE.—For 

23 purposes of this title, in the case of an applicable defined 

24 benefit plan (within the meaning of section 203(f)(3)) 

25 which provides variable interest crediting rates, the interVerDate Sep 11 2014 03:59 May 22, 2019 Jkt 089200 PO 00000 Frm 00116 Fmt 6652 Sfmt 6201 E:\BILLS\S1431.IS S1431

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1 est crediting rate which is treated as in effect and as the 

2 projected interest crediting rate shall be a reasonable pro3 jection of such variable interest crediting rate, not to ex4 ceed 6 percent.’’. 

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

6 this section shall apply with respect to years beginning 

7 after the date of the enactment of this Act. 

8 SEC. 402. ALIGNING USE OF LOOKBACK MONTHS TO DE9 TERMINE INTEREST RATES. 

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

11 the Secretary’s delegate) shall modify Treasury Regula12 tion section 1.417(e)–1(d)(10)(ii) (or any successor provi13 sion) to provide that the same rule applicable to modifica14 tions of the time for determining the applicable interest 

15 rate shall apply to modifications of the time for deter16 mining any interest rate used by a plan to the extent that 

17 the use of such interest rate is permissible under section 

18 417(e)(3) of the Internal Revenue Code of 1986. Such 

19 modified regulations shall require that after any such 

20 modification of such time under a plan pursuant to this 

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

22 permitted for 5 years with respect to such plan without 

23 the consent of the Secretary of the Treasury (or delegate). 

24 (b) EFFECTIVE DATE.—The modifications and 

25 amendments required under subsection (a) shall be 


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•S 1431 IS

1 deemed to have been made as of the date of the enactment 

2 of this Act, and as of such date all applicable laws shall 

3 be applied in all respects as though the actions which the 

4 Secretary of the Treasury (or the Secretary’s delegate) is 

5 required to take under such subsection had been taken. 

6 SEC. 403. CORRECTIONS OF MORTALITY TABLES. 

7 (a) IN GENERAL.—Not later than 6 months after the 

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

9 Treasury (or the Secretary’s delegate) shall amend the 

10 regulation relating to ‘‘Mortality Tables for Determining 

11 Present Value Under Defined Benefit Pension Plans’’ (82 

12 Fed. Reg. 46388 (October 5, 2017)). Under such amend13 ment— 

14 (1) except as provided in paragraphs (2) and 

15 (3), the mortality improvement rates for valuation 

16 dates occurring during 2018 shall be based on the 

17 mortality improvement rates in the Mortality Im18 provement Scale MP–2017 Report issued by the Re19 tirement Plans Experience Committee of the Society 

20 of Actuaries; 

21 (2) for valuation dates occurring during or after 

22 2018, such mortality improvement rates shall not as23 sume future mortality improvements at any age 

24 which are greater than .78 percent; and 


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•S 1431 IS

1 (3) plan sponsors shall be permitted to elect for 

2 the modifications under paragraphs (1) and (2) not 

3 to apply to a plan for valuation dates occurring dur4 ing 2018. 

5 The Secretary of the Treasury (or delegate) shall by regu6 lation modify the .78 percent figure in paragraph (2) as 

7 necessary to reflect material changes in the overall rate 

8 of improvement projected by the Social Security Adminis9 tration. 

10 (b) PRESERVATION OF CURRENT LAW OPTION.— 

11 Notwithstanding the modifications made under subsection 

12 (a), with respect to a plan for which substitute mortality 

13 tables are not used pursuant to Treas. Reg. section 

14 1.430(h)(3)–2 for a plan year beginning during 2018, 

15 mortality tables determined in accordance with Treas. 

16 Reg. section 1.430(h)(3)–1 as in effect on December 31, 

17 2017, may be used for purposes of applying the rules of 

18 section 430 of the Internal Revenue Code of 1986 for a 

19 valuation date occurring during 2018 if the plan spon20 sor— 

21 (1) concludes that the use of mortality tables 

22 determined in accordance with Treas. Reg. section 

23 1.430(h)(3)–1 (without regard to any modification 

24 under this section) for the plan year would be ad25 ministratively impracticable or would result in an 


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•S 1431 IS

1 adverse business impact that is greater than de 

2 minimis; and 

3 (2) informs the plan actuary of the intent to 

4 apply the option under this subsection. 

5 (c) EFFECTIVE DATE.—The modifications and 

6 amendments required under subsections (a) and (b) shall 

7 be deemed to have been made as of the date of the enact8 ment of this Act, and as of such date all applicable laws 

9 shall be applied in all respects as though the actions which 

10 the Secretary of the Treasury (or the Secretary’s delegate) 

11 is required to take under such subsections had been taken. 

12 SEC. 404. CEASE DOUBLE-INDEXING THE VARIABLE RATE 

13 PREMIUM. 

14 (a) IN GENERAL.—Clause (ii) of section 

15 4006(a)(3)(E) of the Employee Retirement Income Secu16 rity Act of 1974 (29 U.S.C. 1306(a)(3)(E)(ii)) is amended 

17 by striking ‘‘the applicable dollar amount under paragraph 

18 (8)’’ and inserting ‘‘$38’’. 

19 (b) CONFORMING AMENDMENT.—Subsection (a) of 

20 section 4006 of the Employee Retirement Income Security 

21 Act of 1974 (29 U.S.C. 1306(a)) is amended by striking 

22 paragraph (8). 

23 (c) TECHNICAL AMENDMENT.—Clause (i) of section 

24 4006(a)(3)(E) of the Employee Retirement Income Secu25 rity Act of 1974 (29 U.S.C. 1306(a)(3)(E)) is amended 


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•S 1431 IS

1 by striking ‘‘subparagraph (H)’’ and inserting ‘‘subpara2 graph (I)’’. 

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

4 this section shall apply to plan years beginning after De5 cember 31, 2019. 

6 SEC. 405. ENHANCING RETIREE HEALTH BENEFITS IN PEN7 SION PLANS. 

8 (a) EXTENSION OF TRANSFERS OF EXCESS PENSION

9 ASSETS TO RETIREE HEALTH ACCOUNTS.—Paragraph 

10 (4) of section 420(b) is amended by striking ‘‘December 

11 31, 2025’’ and inserting ‘‘December 31, 2029’’. 

12 (b) DE MINIMIS TRANSFER RULE.— 

13 (1) IN GENERAL.—Subsection (e) of section 

14 420 is amended by adding at the end the following 

15 new paragraph: 

16 ‘‘(7) SPECIAL RULE FOR DE MINIMIS TRANS17 FERS.— 

18 ‘‘(A) IN GENERAL.—In the case of a trans19 fer of an amount which is not more than 1.75 

20 percent of the amount determined under para21 graph (2)(A) by a plan which meets the re22 quirements of subparagraph (B), paragraph 

23 (2)(B) shall be applied by substituting ‘110 

24 percent’ for ‘125 percent’. 


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1 ‘‘(B) TWO-YEAR LOOKBACK REQUIRE2 MENT.—A plan is described in this subpara3 graph if, as of any valuation date in each of the 

4 2 plan years immediately preceding the plan 

5 year in which the transfer occurs, the amount 

6 determined under paragraph (2)(A) with re7 spect to such plan exceeded 110 percent of the 

8 sum of the funding target and the target nor9 mal cost determined under section 430 for such 

10 plan year.’’. 

11 (2) COST MAINTENANCE PERIOD.—Subpara12 graph (D) of section 420(c)(3) is amended by strik13 ing ‘‘5 taxable years’’ and inserting ‘‘5 taxable years 

14 (7 taxable years in the case of a transfer to which 

15 subsection (e)(7) applies)’’. 

16 (3) CONFORMING AMENDMENTS.— 

17 (A) EXCESS PENSION ASSETS.—Clause (i) 

18 of section 420(f)(2)(B) is amended— 

19 (i) by striking ‘‘IN GENERAL.—In’’ 

20 and inserting ‘‘IN GENERAL.— 

21 ‘‘(I) DETERMINATION.—In’’, 

22 (ii) by striking ‘‘subsection (e)(2)’’ 

23 and inserting ‘‘subsection (e)(2)(B)’’, and 

24 (iii) by adding at the end the fol25 lowing new subclause: 


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1 ‘‘(II) SPECIAL RULE FOR COL2 LECTIVELY BARGAINED TRANS3 FERS.—In determining excess pension 

4 assets for purposes of a collectively 

5 bargained transfer, subsection (e)(7) 

6 shall not apply.’’. 

7 (B) MINIMUM COST.—Subclause (I) of sec8 tion 420(f)(2)(D)(i) is amended by striking 

9 ‘‘4th year’’ and inserting ‘‘4th year (the 6th 

10 year in the case of a transfer to which sub11 section (e)(7) applies)’’. 

12 (c) AMENDMENT OF EMPLOYEE RETIREMENT IN13 COME SECURITY ACT OF 1974.— 

14 (1) DEFINITIONS.—Section 101(e)(3) of the 

15 Employee Retirement Income Security Act of 1974 

16 (29 U.S.C. 1021(e)(3)) is amended by striking ‘‘(as 

17 in effect on the date of the enactment of the Surface 

18 Transportation and Veterans Health Care Choice 

19 Improvement Act of 2015)’’ and inserting ‘‘(as in ef20 fect on the date of the enactment of the Retirement 

21 Security and Savings Act of 2019)’’. 

22 (2) USE OF ASSETS.—Section 403(c)(1) of such 

23 Act (29 U.S.C. 1103(c)(1)) is amended by striking 

24 ‘‘(as in effect on the date of the enactment of the 

25 Surface Transportation and Veterans Health Care 


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•S 1431 IS

1 Choice Improvement Act of 2015)’’ and inserting 

2 ‘‘(as in effect on the date of the enactment of the 

3 Retirement Security and Savings Act of 2019)’’. 

4 (3) EXEMPTION.—Section 408(b)(13) of such 

5 Act (29 U.S.C. 1108(b)(13)) is amended— 

6 (A) by striking ‘‘January 1, 2026’’ and in7 serting ‘‘January 1, 2030’’; and 

8 (B) by striking ‘‘(as in effect on the date 

9 of the enactment of the Surface Transportation 

10 and Veterans Health Care Choice Improvement 

11 Act of 2015)’’ and inserting ‘‘(as in effect on 

12 the date of the enactment of the Retirement Se13 curity and Savings Act of 2019)’’. 

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

15 this section shall apply to transfers made after the date 

16 of the enactment of this Act. 

17 TITLE V—REFORMING PLAN 

18 RULES TO HARMONIZE WITH 

19 IRA RULES 

20 SEC. 501. ROTH PLAN DISTRIBUTION RULES. 

21 (a) IN GENERAL.—Subsection (d) of section 402A is 

22 amended by adding at the end the following new para23 graph: 

24 ‘‘(5) MANDATORY DISTRIBUTION RULES NOT

25 TO APPLY BEFORE DEATH.—Notwithstanding secVerDate Sep 11 2014 03:59 May 22, 2019 Jkt 089200 PO 00000 Frm 00124 Fmt 6652 Sfmt 6201 E:\BILLS\S1431.IS S1431

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•S 1431 IS

1 tions 403(b)(10) and 457(d)(2), the following provi2 sions shall not apply to any designated Roth ac3 count: 

4 ‘‘(A) Section 401(a)(9)(A). 

5 ‘‘(B) The incidental death benefit require6 ments of section 401(a).’’. 

7 (b) EFFECTIVE DATE.— 

8 (1) IN GENERAL.—Except as provided in para9 graph (2), the amendment made by this section shall 

10 apply to taxable years beginning after December 31, 

11 2019. 

12 (2) SPECIAL RULE.—The amendment made by 

13 this section shall not apply to distributions which are 

14 required with respect to years beginning before Jan15 uary 1, 2020, but are permitted to be paid on or 

16 after such date. 

17 SEC. 502. DISTRIBUTIONS FOR CHARITABLE PURPOSES. 

18 (a) IN GENERAL.—Section 402 is amended by adding 

19 at the end the following new subsection: 

20 ‘‘(m) DISTRIBUTIONS FOR CHARITABLE PUR21 POSES.— 

22 ‘‘(1) IN GENERAL.—Gross income for any tax23 able year shall not include so much of the aggregate 

24 amount of qualified charitable distributions made 


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•S 1431 IS

1 with respect to a taxpayer during such taxable year 

2 which does not exceed the applicable amount. 

3 ‘‘(2) QUALIFIED CHARITABLE DISTRIBUTION.— 

4 For purposes of this subsection, the term ‘qualified 

5 charitable distribution’ means any distribution from 

6 an eligible retirement plan described in clause (iii), 

7 (iv), (v), or (vi) of section 402(c)(8)(B)— 

8 ‘‘(A) which is made directly by the plan to 

9 an organization described in section 

10 170(b)(1)(A) (other than any organization de11 scribed in section 509(a)(3) or any fund or ac12 count described in section 4966(d)(2)), and 

13 ‘‘(B) which is made on or after the date 

14 that the individual on whose behalf the distribution is made has attained age 701 15 ⁄2. 

16 A distribution shall be treated as a qualified chari17 table distribution only to the extent that the dis18 tribution would be includible in gross income without 

19 regard to paragraph (1). 

20 ‘‘(3) SPECIAL RULES.— 

21 ‘‘(A) IN GENERAL.—Rules similar to the 

22 rules of subparagraphs (C) and (E) of section 

23 408(d)(8) shall apply for purposes of this sub24 section. 


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1 ‘‘(B) APPLICATION OF 72.—Rules similar 

2 to the rules of section 408(d)(8)(D) shall apply 

3 for purposes of this subsection, by taking into 

4 account all amounts in the eligible retirement 

5 plan to which the taxpayer has a nonforfeitable 

6 right in lieu of all amounts in all individual re7 tirement plans of the individual. 

8 ‘‘(4) APPLICABLE AMOUNT.—For purposes of 

9 this subsection, the term ‘applicable amount’ means 

10 the excess of— 

11 ‘‘(A) $100,000, over 

12 ‘‘(B) the total amount of any distributions 

13 not includible in gross income of the taxpayer 

14 for the taxable year by reason of sections 

15 403(b)(16), 408(d)(8), and 457(e)(19).’’. 

16 (b) SEPS AND SIMPLES.—Subparagraph (B) of 

17 section 408(d)(8) is amended by striking ‘‘(other than a 

18 plan described in subsection (k) or (p))’’. 

19 (c) 403(b) PLANS.—Section 403(b), as amended by 

20 this Act, is further amended by adding at the end the fol21 lowing new paragraph: 

22 ‘‘(16) DISTRIBUTIONS FOR CHARITABLE PUR23 POSES.—The rules of section 402(m) shall apply to 

24 distributions under an annuity contract described in 

25 this subsection.’’. 


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1 (d) 457(b) PLANS.—Subsection (e) of section 457 is 

2 amended by adding at the end the following new para3 graph: 

4 ‘‘(19) DISTRIBUTIONS FOR CHARITABLE PUR5 POSES.—The rules of section 402(m) shall apply to 

6 distributions under an eligible deferred compensation 

7 plan established and maintained by an employer de8 scribed in subsection (e)(1)(A).’’. 

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

10 this section shall apply to distributions made after Decem11 ber 31, 2019. 

12 SEC. 503. SURVIVING SPOUSE ELECTION TO BE TREATED 

13 AS EMPLOYEE. 

14 (a) IN GENERAL.—Clause (iv) of section 

15 401(a)(9)(B) is amended— 

16 (1) by inserting ‘‘or at the election of the sur17 viving spouse,’’ after ‘‘begin,’’ in subclause (II); and 

18 (2) by adding at the end the following flush 

19 sentence: 

20 ‘‘An election described in subclause (II) 

21 shall be made at such time and in such 

22 manner as prescribed by the Secretary, 

23 shall include a timely notice to the plan ad24 ministrator, and once made may not be reVerDate Sep 11 2014 03:59 May 22, 2019 Jkt 089200 PO 00000 Frm 00128 Fmt 6652 Sfmt 6201 E:\BILLS\S1431.IS S1431

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•S 1431 IS

1 voked except with the consent of the Sec2 retary.’’. 

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

4 this section shall apply to distributions with respect to em5 ployees who die after December 31, 2019. 

6 SEC. 504. ROLLOVERS FROM ROTH IRAS TO PLANS. 

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

8 402A(c)(3) is amended by striking ‘‘shall not’’ and insert9 ing ‘‘or, in the case of a rollover from a Roth IRA, under 

10 section 408 shall not’’. 

11 (b) REGULATIONS.—The Secretary of the Treasury 

12 (or the Secretary’s delegate) shall amend the regulations 

13 with respect to rollovers from Roth IRAs to permit such 

14 rollovers to be made to an applicable retirement plan (as 

15 defined in section 402A(e)(1) of the Internal Revenue 

16 Code of 1986) in accordance with the amendment made 

17 by subsection (a). 

18 (c) EFFECTIVE DATE.— 

19 (1) IN GENERAL.—The amendment made by 

20 subsection (a) shall apply to distributions made after 

21 December 31, 2019. 

22 (2) EFFECTIVE DATE.—The modifications and 

23 amendments required under subsection (b) shall be 

24 deemed to have been made as of January 1, 2020, 

25 and as of such date all applicable laws shall be apVerDate Sep 11 2014 03:59 May 22, 2019 Jkt 089200 PO 00000 Frm 00129 Fmt 6652 Sfmt 6201 E:\BILLS\S1431.IS S1431

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1 plied in all respects as though the actions which the 

2 Secretary of the Treasury (or the Secretary’s dele3 gate) is required to take under such subsection had 

4 been taken. 

5 TITLE VI—ADMINISTRATIVE 

6 PROVISIONS 

7 SEC. 601. PROVISIONS RELATING TO PLAN AMENDMENTS. 

8 (a) IN GENERAL.—If this section applies to any re9 tirement plan or contract amendment— 

10 (1) such retirement plan or contract shall be 

11 treated as being operated in accordance with the 

12 terms of the plan during the period described in sub13 section (b)(2)(A); and 

14 (2) except as provided by the Secretary of the 

15 Treasury (or the Secretary’s delegate), such retire16 ment plan shall not fail to meet the requirements of 

17 section 411(d)(6) of the Internal Revenue Code of 

18 1986 and section 204(g) of the Employee Retire19 ment Income Security Act of 1974 by reason of such 

20 amendment. 

21 (b) AMENDMENTS TO WHICH SECTION APPLIES.— 

22 (1) IN GENERAL.—This section shall apply to 

23 any amendment to any retirement plan or annuity 

24 contract which is made— 


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1 (A) pursuant to any amendment made by 

2 this Act or pursuant to any regulation issued by 

3 the Secretary of the Treasury or the Secretary 

4 of Labor (or a delegate of either such Sec5 retary) under this Act; and 

6 (B) on or before the last day of the first 

7 plan year beginning on or after January 1, 

8 2022. 

9 In the case of a governmental plan (as defined in 

10 section 414(d) of the Internal Revenue Code of 

11 1986), this paragraph shall be applied by sub12 stituting ‘‘2024’’ for ‘‘2022’’. 

13 (2) CONDITIONS.—This section shall not apply 

14 to any amendment unless— 

15 (A) during the period— 

16 (i) beginning on the date the legisla17 tive or regulatory amendment described in 

18 paragraph (1)(A) takes effect (or in the 

19 case of a plan or contract amendment not 

20 required by such legislative or regulatory 

21 amendment, the effective date specified by 

22 the plan); and 

23 (ii) ending on the date described in 

24 paragraph (1)(B) (as modified by the sec25 ond sentence of paragraph (1)) (or, if earVerDate Sep 11 2014 03:59 May 22, 2019 Jkt 089200 PO 00000 Frm 00131 Fmt 6652 Sfmt 6201 E:\BILLS\S1431.IS S1431

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1 lier, the date the plan or contract amend2 ment is adopted), 

3 the plan or contract is operated as if such plan 

4 or contract amendment were in effect; and 

5 (B) such plan or contract amendment ap6 plies retroactively for such period. 

Æ 


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