II 

117TH CONGRESS 

2D SESSION S. 3955 

To amend the Internal Revenue Code of 1986 to provide for starter 401(k)s 

for employers with no retirement plans, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

MARCH 30, 2022 

Mr. BARRASSO (for himself and Mr. CARPER) 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 provide 

for starter 401(k)s for employers with no retirement 

plans, and for other purposes. 

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

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Starter-K Act of 

5 2022’’. 

6 SEC. 2. STARTER 401(k) PLANS FOR EMPLOYERS WITH NO 

7 RETIREMENT PLAN. 

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

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

10 the following new paragraph: 


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1 ‘‘(16) STARTER 401(k) DEFERRAL-ONLY PLANS

2 FOR EMPLOYERS WITH NO RETIREMENT PLAN.— 

3 ‘‘(A) IN GENERAL.—A starter 401(k) de4 ferral-only arrangement maintained by an eligi5 ble employer shall be treated as meeting the re6 quirements of paragraph (3)(A)(ii). 

7 ‘‘(B) STARTER 401(k) DEFERRAL-ONLY

8 ARRANGEMENT.—For purposes of this para9 graph, the term ‘starter 401(k) deferral-only 

10 arrangement’ means any cash or deferred ar11 rangement which meets— 

12 ‘‘(i) the automatic deferral require13 ments of subparagraph (C), 

14 ‘‘(ii) the contribution limitations of 

15 subparagraph (D), and 

16 ‘‘(iii) the requirements of subpara17 graph (E) of paragraph (13). 

18 ‘‘(C) AUTOMATIC DEFERRAL.— 

19 ‘‘(i) IN GENERAL.—The requirements 

20 of this subparagraph are met if, under the 

21 arrangement, each employee eligible to 

22 participate in the arrangement is treated 

23 as having elected to have the employer 

24 make elective contributions in an amount 


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1 equal to a qualified percentage of com2 pensation. 

3 ‘‘(ii) ELECTION OUT.—The election 

4 treated as having been made under clause 

5 (i) shall cease to apply with respect to any 

6 employee if such employee makes an af7 firmative election— 

8 ‘‘(I) to not have such contribu9 tions made, or 

10 ‘‘(II) to make elective contribu11 tions at a level specified in such af12 firmative election. 

13 ‘‘(iii) QUALIFIED PERCENTAGE.—For 

14 purposes of this subparagraph, the term 

15 ‘qualified percentage’ means, with respect 

16 to any employee, any percentage deter17 mined under the arrangement if such per18 centage is applied uniformly and is not less 

19 than 3 or more than 15 percent. 

20 ‘‘(D) CONTRIBUTION LIMITATIONS.— 

21 ‘‘(i) IN GENERAL.—The requirements 

22 of this subparagraph are met if, under the 

23 arrangement— 

24 ‘‘(I) the only contributions which 

25 may be made are elective contribuVerDate Sep 11 2014 03:59 Apr 01, 2022 Jkt 029200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S3955.IS S3955

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1 tions of employees described in sub2 paragraph (C), and 

3 ‘‘(II) the aggregate amount of 

4 such elective contributions which may 

5 be made with respect to any employee 

6 for any calendar year shall not exceed 

7 $6,000. 

8 ‘‘(ii) COST-OF-LIVING ADJUSTMENT.— 

9 In the case of any calendar year beginning 

10 after December 31, 2023, the $6,000 

11 amount under clause (i) shall be adjusted 

12 in the same manner as under section 

13 402(g)(4), except that ‘2022’ shall be sub14 stituted for ‘2005’. 

15 ‘‘(iii) CROSS REFERENCE.—For catch16 up contributions for individuals age 50 or 

17 over, see section 414(v)(2)(B)(ii). 

18 ‘‘(E) ELIGIBLE EMPLOYER.—For purposes 

19 of this paragraph— 

20 ‘‘(i) IN GENERAL.—The term ‘eligible 

21 employer’ means any employer which, dur22 ing the first plan year of the cash or de23 ferred arrangement described in subpara24 graph (B), does not maintain any other 

25 qualified plan. An employer treated as an 


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1 eligible employer under the preceding sen2 tence shall be treated as an eligible em3 ployer with respect to the arrangement for 

4 any subsequent plan year without regard 

5 to whether it maintains another qualified 

6 plan. 

7 ‘‘(ii) QUALIFIED PLAN.—The term 

8 ‘qualified plan’ means a plan, contract, 

9 pension, account, or trust described in sub10 paragraph (A) or (B) of paragraph (5) of 

11 section 219(g) (determined without regard 

12 to the last sentence of such paragraph 

13 (5)).’’. 

14 (b) CERTAIN ANNUITY CONTRACTS.—Subsection (b) 

15 of section 403 of the Internal Revenue Code of 1986 is 

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

18 ‘‘(15) SAFE HARBOR DEFERRAL-ONLY PLANS

19 FOR EMPLOYERS WITH NO RETIREMENT PLAN.— 

20 ‘‘(A) IN GENERAL.—A safe harbor defer21 ral-only plan maintained by an eligible employer 

22 shall be treated as meeting the requirements of 

23 paragraph (12). 

24 ‘‘(B) SAFE HARBOR DEFERRAL-ONLY

25 PLAN.—For purposes of this paragraph, the 


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1 term ‘safe harbor deferral-only plan’ means any 

2 plan which meets— 

3 ‘‘(i) the automatic deferral require4 ments of subparagraph (C), 

5 ‘‘(ii) the contribution limitations of 

6 subparagraph (D), and 

7 ‘‘(iii) the requirements of subpara8 graph (E) of section 401(k)(13). 

9 ‘‘(C) AUTOMATIC DEFERRAL.— 

10 ‘‘(i) IN GENERAL.—The requirements 

11 of this subparagraph are met if, under the 

12 plan, each eligible employee is treated as 

13 having elected to have the employer make 

14 elective contributions in an amount equal 

15 to a qualified percentage of compensation. 

16 ‘‘(ii) ELECTION OUT.—The election 

17 treated as having been made under clause 

18 (i) shall cease to apply with respect to any 

19 eligible employee if such eligible employee 

20 makes an affirmative election— 

21 ‘‘(I) to not have such contribu22 tions made, or 

23 ‘‘(II) to make elective contribu24 tions at a level specified in such af25 firmative election. 


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1 ‘‘(iii) QUALIFIED PERCENTAGE.—For 

2 purposes of this subparagraph, the term 

3 ‘qualified percentage’ means, with respect 

4 to any employee, any percentage deter5 mined under the plan if such percentage is 

6 applied uniformly and is not less than 3 or 

7 more than 15 percent. 

8 ‘‘(D) CONTRIBUTION LIMITATIONS.— 

9 ‘‘(i) IN GENERAL.—The requirements 

10 of this subparagraph are met if, under the 

11 plan— 

12 ‘‘(I) the only contributions which 

13 may be made are elective contribu14 tions of eligible employees, and 

15 ‘‘(II) the aggregate amount of 

16 such elective contributions which may 

17 be made with respect to any employee 

18 for any calendar year shall not exceed 

19 $6,000. 

20 ‘‘(ii) COST-OF-LIVING ADJUSTMENT.— 

21 In the case of any calendar year beginning 

22 after December 31, 2023, the $6,000 

23 amount under clause (i) shall be adjusted 

24 in the same manner as under section 


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1 402(g)(4), except that ‘2022’ shall be sub2 stituted for ‘2005’. 

3 ‘‘(iii) CROSS REFERENCE.—For catch4 up contributions for individuals age 50 or 

5 over, see section 414(v)(2)(B)(ii). 

6 ‘‘(E) ELIGIBLE EMPLOYER.—For purposes 

7 of this paragraph— 

8 ‘‘(i) IN GENERAL.—The term ‘eligible 

9 employer’ means any employer which, dur10 ing the first plan year of the plan de11 scribed in subparagraph (B), does not 

12 maintain any other qualified plan. An em13 ployer treated as an eligible employer 

14 under the preceding sentence shall be 

15 treated as an eligible employer with respect 

16 to the plan for any subsequent plan year 

17 without regard to whether it maintains an18 other qualified plan. 

19 ‘‘(ii) QUALIFIED PLAN.—The term 

20 ‘qualified plan’ means a plan, contract, 

21 pension, account, or trust described in sub22 paragraph (A) or (B) of paragraph (5) of 

23 section 219(g) (determined without regard 

24 to the last sentence of such paragraph 

25 (5)). 


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1 ‘‘(F) ELIGIBLE EMPLOYEE.—For purposes 

2 of this paragraph, the term ‘eligible employee’ 

3 means any employee of the employer other than 

4 an employee who is permitted to be excluded 

5 under paragraph (12)(A).’’. 

6 (c) CATCH-UP CONTRIBUTIONS FOR INDIVIDUALS

7 AGE 50 AND OVER.— 

8 (1) Section 414(v)(2)(B) of the Internal Rev9 enue Code of 1986 is amended by inserting ‘‘, 

10 401(k)(16), 403(b)(15),’’ after ‘‘401(k)(11)’’ each 

11 place it appears. 

12 (2) Section 414(v)(3)(B) of such Code is 

13 amended— 

14 (A) by inserting ‘‘, 401(k)(16)’’ after 

15 ‘‘401(k)(11)’’, and 

16 (B) by inserting ‘‘, 403(b)(15)’’ after 

17 ‘‘403(b)(12)’’. 

18 (d) SIMPLIFIED REPORTING.—Section 104(a)(2)(A) 

19 of the Employee Retirement Income Security Act of 1974 

20 (29 U.S.C. 1024(a)(2)) is amended by striking ‘‘or’’ at 

21 the end of clause (i), by redesignating clause (ii) as clause 

22 (iii), and by inserting after clause (i) the following new 

23 clause: 

24 ‘‘(ii) is a starter 401(k) deferral-only 

25 arrangement described in section 


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1 401(k)(16)(B) of the Internal Revenue 

2 Code of 1986 or a safe harbor deferral3 only plan described in section 403(b)(15) 

4 of such Code; or’’. 

5 (e) STARTER AND SAFE HARBOR PLANS NOT

6 TREATED AS TOP-HEAVY PLANS.—Subparagraph (H) of 

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

8 is amended— 

9 (1) by striking ‘‘ARRANGEMENTS’’ in the head10 ing and inserting ‘‘ARRANGEMENTS OR PLANS’’, 

11 (2) by striking ‘‘, and’’ at the end of clause (i) 

12 and inserting ‘‘and matching contributions with re13 spect to which the requirements of section 

14 401(m)(11) or 401(m)(12) are met, or’’, and 

15 (3) by striking clause (ii) and inserting after 

16 clause (i) the following new clause: 

17 ‘‘(ii) a starter 401(k) deferral-only ar18 rangement described in section 

19 401(k)(16)(B) or a safe harbor deferral20 only plan described in section 

21 403(b)(15).’’. 

22 (f) PLANS NOT SUBJECT TO EMPLOYEE RETIRE23 MENT INCOME SECURITY ACT OF 1974.—Applicable to 

24 plan years beginning after December 31, 2022, the Sec25 retary of Labor shall update Field Assistance Bulletin No. 


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1 2010–01 to specify that the hiring of a new plan adminis2 trator or third-party administrator by a plan which is not 

3 previously subject to title I of the Employee Retirement 

4 Income Security Act of 1974 shall not cause such plan 

5 to be subject to such title. 

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

7 this section shall apply to plan years beginning after De8 cember 31, 2022. 

Æ 


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