Securing a Strong Retirement Act of 2020

To increase retirement savings, simplify and clarify retirement plan rules, and for other purposes. 1. Short title; table of contents (a) Short title This Act may be cited as the Securing a Strong Retirement Act of 2020 (b) Table of contents The table of contents for this Act is as follows: Sec. 1. Short title; table of contents. Title I—Expanding Coverage and Increasing Retirement Savings Sec. 101. Expanding automatic enrollment in retirement plans. Sec. 102. Modification of credit for small employer pension plan startup costs. Sec. 103. Simplification and increase in Saver’s Credit. Sec. 104. Enhancement of 403 (b) Sec. 105. Increase in age for required beginning date for mandatory distributions. Sec. 106. Deferral of tax for certain sales of employer stock to employee stock ownership plan sponsored by S corporation. Sec. 107. Indexing IRA catch-up limit. Sec. 108. Higher catch-up limit to apply at age 60. Sec. 109. Multiple employer 403 (b) Sec. 110. Treatment of student loan payments as elective deferrals for purposes of matching contributions. Sec. 111. Application of credit for small employer pension plan startup costs to employers which join an existing plan. Sec. 112. Military spouse retirement plan eligibility credit for small employers. Sec. 113. Small immediate financial incentives for contributing to a plan. Sec. 114. Safe harbor for corrections of employee elective deferral failures. Sec. 115. One-year reduction in period of service requirement for long-term, part-time workers. Sec. 116. Governmental pension plans may include certain firefighters, emergency medical technicians, and paramedics. Title II—Preservation of Income Sec. 201. Remove required minimum distribution barriers for life annuities. Sec. 202. Qualifying longevity annuity contracts. Sec. 203. Insurance-dedicated exchange-traded funds. Title III—Simplification and Clarification of Retirement Plan Rules Sec. 301. Recovery of retirement plan overpayments. Sec. 302. Reduction in excise tax on certain accumulations in qualified retirement plans. Sec. 303. Performance benchmarks for asset allocation funds. Sec. 304. Review and report to the Congress relating to reporting and disclosure requirements. Sec. 305. Eliminating unnecessary plan requirements related to unenrolled participants. Sec. 306. Retirement savings lost and found. Sec. 307. Exemption from required minimum distribution rules for individuals with certain account balances. Sec. 308. Expansion of Employee Plans Compliance Resolution System. Sec. 309. Eliminate the first day of the month Sec. 310. One-time election for qualified charitable distribution to split-interest entity; increase in qualified charitable distribution limitation. Sec. 311. Retirement plan distributions for charitable purpose. Sec. 312. Distributions to firefighters. Sec. 313. Exclusion of certain disability-related first responder retirement payments. Sec. 314. Individual retirement plan statute of limitations for excise tax on excess contributions, certain accumulations, and prohibited transactions. Sec. 315. Requirement to provide paper statements in certain cases. Title IV—Technical Amendments Sec. 401. Amendments relating to Setting Every Community Up for Retirement Enhancement Act of 2019 Title V—Administrative Provisions Sec. 501. Provisions relating to plan amendments. I Expanding Coverage and Increasing Retirement Savings 101. Expanding automatic enrollment in retirement plans (a) In general Subpart B of part I of subchapter D of chapter 1 414A. Requirements related to automatic enrollment (a) In general Except as otherwise provided in this section— (1) an arrangement shall not be treated as a qualified cash or deferred arrangement described in section 401(k) or as a qualified salary reduction arrangement described in section 408(p) unless such arrangement meets the automatic enrollment requirements of subsection (b), and (2) an annuity contract otherwise described in section 403(b)(1) which is purchased under a salary reduction agreement shall not be treated as described in such section unless such agreement meets the automatic enrollment requirements of subsection (b). (b) Automatic enrollment requirements (1) In general An arrangement or agreement meets the requirements of this subsection if such arrangement or agreement is an eligible automatic contribution arrangement (as defined in section 414(w)(3)) which meets the requirements of paragraphs (2) through (4). (2) Allowance of permissible withdrawals An eligible automatic contribution arrangement meets the requirements of this paragraph if such arrangement allows employees to make permissible withdrawals (as defined in section 414(w)(2)). (3) Minimum contribution percentage An eligible automatic contribution arrangement meets the requirements of this paragraph if— (A) the uniform percentage of compensation contributed by the participant under such arrangement during the first year of participation is not less than 3 percent and not more than 10 percent (unless the participant specifically elects not to have such contributions made or to have such contributions made at a different percentage), and (B) such uniform percentage is increased by 1 percentage point for each year of participation under such arrangement (but not above 10 percent) unless the participant specifically elects not to have such contributions made or to have such contributions made at a different percentage. (4) Investment requirements An eligible automatic contribution arrangement meets the requirements of this paragraph if amounts contributed pursuant to such arrangement, and for which no investment is elected by the participant, are invested consistent with the requirements of section 2550.404c–5 of title 29, Code of Federal Regulations (or any successor regulations). (c) Exceptions For purposes of this section— (1) Exception for plans or arrangements established before enactment of section Subsection (a) shall not apply to— (A) any qualified cash or deferred arrangement or qualified salary reduction arrangement established before the date of the enactment of this section, or (B) any annuity contract purchased under a plan established before the date of the enactment of this section. (2) Exception for governmental and church plans Subsection (a) shall not apply to any governmental plan (within the meaning of section 414(d)) or any church plan (within the meaning of section 414(e)). (3) Exception for new businesses Subsection (a) shall not apply to— (A) any qualified cash or deferred arrangement or qualified salary reduction arrangement established while all employers maintaining the plan (and any predecessor employers) have been in existence for less than 3 years, or (B) any annuity contract purchased under a plan established while all employers maintaining such plan have been in existence for less than 3 years. (4) Exception for small businesses Subsection (a) shall not apply to— (A) any qualified cash or deferred arrangement or qualified salary reduction arrangement if such arrangement is established not later than 1 year after the close of the last taxable year with respect to which all employers maintaining the plan normally employed 10 or fewer employees on a typical business day, or (B) any annuity contract purchased under a plan established not later than 1 year after the close of the last taxable year with respect to which all employers maintaining such plan normally employed 10 or fewer employees on a typical business day. . (b) Clerical amendment The table of sections for subpart B of part I of subchapter D of chapter 1 Sec. 414A. Requirements related to automatic enrollment. . (c) Effective date The amendments made by this section shall apply to plan years beginning after December 31, 2021. 102. Modification of credit for small employer pension plan startup costs (a) Increase in credit percentage for smaller employers Section 45E(e) (4) Increased credit for certain small employers In the case of an employer which would be an eligible employer under subsection (c) if section 408(p)(2)(C)(i) was applied by substituting 50 employees 100 employees 100 percent 50 percent . (b) Additional credit for employer contributions by certain small employers Section 45E of such Code is amended by adding at the end the following new subsection: (f) Additional credit for employer contributions by certain eligible employers (1) In general In the case of an eligible employer, the credit allowed for the taxable year under subsection (a) (determined without regard to this subsection) shall be increased by an amount equal to the applicable percentage of employer contributions (other than any elective deferrals (as defined in section 402(g)(3))) by the employer to an eligible employer plan (other than a defined benefit plan (as defined in section 414(j))). (2) Limitations (A) Dollar limitation The amount determined under paragraph (1) (before the application of subparagraph (B)) with respect to any employee of the employer shall not exceed $1,000. (B) Credit phase-in In the case of any eligible employer which had for the preceding taxable year more than 50 employees, the amount determined under paragraph (1) (without regard to this subparagraph) shall be reduced by an amount equal to the product of— (i) the amount otherwise so determined under paragraph (1), multiplied by (ii) a percentage equal to 2 percentage points for each employee of the employer for the preceding taxable year in excess of 50 employees. (3) Applicable percentage For purposes of this section, the applicable percentage for the taxable year during which the eligible employer plan is established shall be 100 percent, and for taxable years thereafter shall be determined under the following table: In the case of the following taxable year beginning after the taxable year during which plan is established: The applicable percentage shall be: 1st 100% 2nd 75% 3rd 50% 4th 25% Any taxable year thereafter 0% (4) Determination of eligible employer; number of employees For purposes of this subsection, whether an employer is an eligible employer and the number of employees of an employer shall be determined under the rules of subsection (c), except that paragraph (2) thereof shall only apply to the taxable year during which the eligible employer plan to which this section applies is established. . (c) Disallowance of deduction Section 45E(e)(2) of such Code is amended to read as follows: (2) Disallowance of deduction No deduction shall be allowed— (A) for that portion of the qualified startup costs paid or incurred for the taxable year which is equal to so much of the portion of the credit determined under subsection (a) as is properly allocable to such costs, and (B) for that portion of the employer contributions by the employer for the taxable year which is equal to so much of the credit increase determined under subsection (f) as is properly allocable to such contributions. . (d) Effective date The amendments made by this section shall apply to taxable years beginning after December 31, 2020. 103. Simplification and increase in Saver’s Credit (a) In general Section 25B(a) the applicable percentage $2,000 50 percent of so much of the qualified retirement savings contributions of the eligible individual for the taxable year as does not exceed $3,000 (b) Income limitation Section 25B(b) of such Code is amended to read as follows: (b) Income limitation (1) In general The amount allowable as a credit under subsection (a) for any taxable year (determined without regard to this subsection) shall be reduced (but not below zero) by an amount which bears the same ratio to the amount so allowable (as so determined) as— (A) the amount by which the taxpayer’s adjusted gross income exceeds the applicable threshold, bears to (B) $20,000. (2) Applicable threshold For purposes of this subsection, the applicable threshold is— (A) except as provided in subparagraph (B) or (C), $40,000, (B) in the case of a joint return, 200 percent of the amount in effect for the taxable year under subparagraph (A), or (C) in the case of a head of household, 150 percent of the amount in effect for the taxable year under subparagraph (A). (3) Inflation adjustment In the case of any taxable year beginning in a calendar year after 2021, the $40,000 dollar amount in paragraph (2) shall be increased by an amount equal to— (A) such dollar amount, multiplied by (B) the cost-of-living adjustment determined under section 1(f)(3) for the calendar year in which the taxable year begins, determined by substituting calendar year 2020 calendar year 2016 Any increase determined under the preceding sentence shall be rounded to the nearest multiple of $500. . (c) Saver’s credit The heading for section 25B of such Code is amended to read as follows: Saver’s credit (d) Saver’s credit promotion (1) In general The Secretary of the Treasury (or the Secretary’s delegate) shall take such steps as the Secretary (or delegate) determines are necessary and appropriate to increase public awareness of the credit provided under section 25B of such Code (as amended by this section). (2) Report Not later than 1 year after the date of the enactment of this Act, the Secretary (or delegate) shall submit to Congress a report detailing the steps taken under paragraph (1). (e) Clerical amendment The table of sections for subpart A of part IV of subchapter A of chapter 1 of such Code is amended by striking the item relating to section 25B and inserting the following new item: Sec. 25B. Saver’s credit. . (f) Effective date The amendments made by this section shall apply to taxable years beginning after the date of the enactment of this Act. 104. Enhancement of 403 (b) (a) In general (1) Permitted investments Section 403(b)(7)(A) if the amounts are to be invested in regulated investment company stock to be held in that custodial account if the amounts are to be held in that custodial account and invested in regulated investment company stock or a group trust intended to satisfy the requirements of Internal Revenue Service Revenue Ruling 81–100 (or any successor guidance) (2) Conforming amendment The heading of paragraph (7) of section 403(b) of such Code is amended by striking for regulated investment company stock (3) Effective date The amendments made by this subsection shall apply to amounts invested after December 31, 2020. (b) Amendments to the Investment Company Act of 1940 Section 3(c)(11) of the Investment Company Act of 1940 ( 15 U.S.C. 80a–3(c)(11) (11) Any— (A) employee’s stock bonus, pension, or profit-sharing trust which meets the requirements for qualification under section 401 (B) custodial account meeting the requirements of section 403(b)(7) of such Code; (C) governmental plan described in section 3(a)(2)(C) of the Securities Act of 1933; (D) collective trust fund maintained by a bank consisting solely of assets of one or more— (i) trusts described in subparagraph (A); (ii) government plans described in subparagraph (C); (iii) church plans, companies, or accounts that are excluded from the definition of an investment company under paragraph (14) of this subsection; or (iv) plans which meet the requirements of section 403(b) (I) such plan is subject to title I of the Employee Retirement Income Security Act of 1974 ( 29 U.S.C. 1001 (II) any employer making such plan available agrees to serve as a fiduciary for the plan with respect to the selection of the plan’s investments among which participants can choose; or (III) such plan is a governmental plan (as defined in section 414(d) of such Code); or (E) separate account the assets of which are derived solely from— (i) contributions under pension or profit-sharing plans which meet the requirements of section 401 (ii) contributions under governmental plans in connection with which interests, participations, or securities are exempted from the registration provisions of section 5 of the Securities Act of 1933 by section 3(a)(2)(C) of such Act; (iii) advances made by an insurance company in connection with the operation of such separate account; and (iv) contributions to a plan described in subparagraph (D)(iv). . (c) Amendments to the Securities Act of 1933 Section 3(a)(2) of the Securities Act of 1933 ( 15 U.S.C. 77c(a)(2) (1) by striking or (D) (D) a plan which meets the requirements of section 403(b) of such Code if (i) such plan is subject to title I of the Employee Retirement Income Security Act of 1974 ( 29 U.S.C. 1001 (2) by striking (C), or (D) (C), (D), or (E) (3) by striking (iii) which is a plan funded (iii) in the case of a plan not described in subparagraph (D), which is a plan funded (d) Amendments to the Securities Exchange Act of 1934 Section 3(a)(12)(C) of the Securities Exchange Act of 1934 ( 15 U.S.C. 78c(a)(12)(C) (1) by striking or (iv) (iv) a plan which meets the requirements of section 403(b) of such Code if (I) such plan is subject to title I of the Employee Retirement Income Security Act of 1974 ( 29 U.S.C. 1001 (2) by striking (ii), or (iii) (ii), (iii), or (iv) (3) by striking (II) is a plan funded (II) in the case of a plan not described in clause (iv), is a plan funded 105. Increase in age for required beginning date for mandatory distributions (a) In general Section 401(a)(9)(C)(i)(I) age 72 age 75 (b) Spouse beneficiaries; special rule for owners Subparagraphs (B)(iv)(I) and (C)(ii)(I) of section 401(a)(9) of such Code are each amended by striking age 72 age 75 (c) Conforming amendments The last sentence of section 408(b) of such Code is amended by striking age 72 age 75 (d) Effective date The amendments made by this section shall apply to distributions required to be made after December 31, 2020, with respect to individuals who attain age 72 after such date. 106. Deferral of tax for certain sales of employer stock to employee stock ownership plan sponsored by S corporation (a) In general Section 1042(c)(1)(A) domestic C corporation domestic corporation (b) Effective date The amendment made by this section shall apply to sales after the date of the enactment of this Act. 107. Indexing IRA catch-up limit (a) In general Subparagraph (C) of section 219(b)(5) (iii) Indexing of catch-up limitation In the case of any taxable year beginning in a calendar year after 2021, the $1,000 amount under subparagraph (B)(ii) shall be increased by an amount equal to— (I) such dollar amount, multiplied by (II) the cost-of-living adjustment determined under section 1(f)(3) for the calendar year in which the taxable year begins, determined by substituting calendar year 2020 calendar year 2016 If any amount after adjustment under the preceding sentence is not a multiple of $100, such amount shall be rounded to the next lower multiple of $100. . (b) Effective date The amendments made by this section shall apply to taxable years beginning after December 31, 2021. 108. Higher catch-up limit to apply at age 60 (a) In general (1) Plans other than simple plans Section 414(v)(2)(B)(i) ($10,000, in the case of an eligible participant who has attained age 60 before the close of the taxable year) (2) Simple plans Section 414(v)(2)(B)(ii) of such Code is amended by inserting the following before the period: ($5,000, in the case of an eligible participant who has attained age 60 before the close of the taxable year) (b) Cost-of-Living adjustments Subparagraph (C) of section 414(v)(2) of such Code is amended by adding at the end the following: In the case of a year beginning after December 31, 2021, the Secretary shall adjust annually the $10,000 amount in subparagraph (B)(i) and the $5,000 amount in subparagraph (B)(ii) for increases in the cost-of-living at the same time and in the same manner as adjustments under the preceding sentence; except that the base period taken into account shall be the calendar quarter beginning July 1, 2020. (c) Effective date The amendments made by this section shall apply to years beginning after December 31, 2020. 109. Multiple employer 403 (b) (a) In general Section 403(b) (15) Multiple employer plans (A) In general Except in the case of a church plan, this subsection shall not be treated as failing to apply to an annuity contract solely by reason of such contract being purchased under a plan maintained by more than 1 employer. (B) Treatment of employers failing to meet requirements of plan (i) In general In the case of a plan maintained by more than 1 employer, this subsection shall not be treated as failing to apply to an annuity contract held under such plan merely because of one or more employers failing to meet the requirements of this subsection if such plan satisfies rules similar to the rules of section 413(e)(2) with respect to any such employer failure. (ii) Additional requirements in case of non-governmental plans A plan shall not be treated as meeting the requirements of this subparagraph unless the plan meets the requirements of subparagraph (A) or (B) of section 413(e)(1), except in the case of a multiple employer plan maintained solely by any of the following: A State, a political subdivision of a State, or an agency or instrumentality of any one or more of the foregoing. . (b) Annual registration for 403 (b) Section 6057 of such Code is amended by redesignating subsection (g) as subsection (h) and by inserting after subsection (f) the following new subsection: (g) 403 (b) In the case of annuity contracts to which this section applies and to which section 403(b) applies by reason of the plan under which such contracts are purchased meeting the requirements of paragraph (15) thereof, such plan shall be treated as a single plan for purposes of this section. . (c) Annual information returns for 403 (b) Section 6058 (f) 403 (b) In the case of annuity contracts to which this section applies and to which section 403(b) applies by reason of the plan under which such contracts are purchased meeting the requirements of paragraph (15) thereof, such plan shall be treated as a single plan for purposes of this section. . (d) Amendments to Employee Retirement Income Security Act of 1974 (1) Treated as pooled employer plan (A) In general Section 3(43)(A) of the Employee Retirement Income Security Act of 1974 is amended— (i) in clause (ii), by striking section 501(a) of such Code or 501(a) of such Code, a plan that consists of contracts described in section 403(b) of such Code, or (ii) in the flush text at the end, by striking the plan. the plan, but such term shall include any program (other than a governmental plan) maintained for the benefit of the employees of more than 1 employer that consists of contracts described in section 403(b) of such Code and that meets the requirements of subparagraph (A) or (B) of section 413(e)(1) of such Code. (B) Conforming amendments Sections 3(43)(B)(v)(II) and 3(44)(A)(i)(I) of such Act are each amended by striking section 401(a) of such Code or 401(a) of such Code, a plan that consists of contracts described in section 403(b) of such Code, or (2) Fiduciaries Section 3(43)(B)(ii) of such Act is amended— (A) by striking trustees meeting the requirements of section 408(a)(2) trustees (or other fiduciaries in the case of a plan that consists of contracts described in section 403(b) (B) by striking holding holding (or causing to be held under the terms of a plan consisting of such contracts) (e) Regulations relating to plan termination The Secretary of the Treasury (or the Secretary’s designee) shall prescribe such regulations as may be necessary to clarify the treatment of a plan termination by an employer in the case of plans to which section 403(b)(15) of such Code applies. (f) Modification of model plan language (1) Plan notifications The Secretary of the Treasury (or the Secretary’s designee) shall modify the model plan language published under section 413(e)(5) (2) Model plans for multiple employer 403(b) For plans to which section 403(b)(15)(A) (g) No inference with respect to church plans Regarding any application of section 403(b) (h) Effective date (1) In general The amendments made by this section shall apply to plan years beginning after December 31, 2020. (2) Rule of construction Nothing in the amendments made by subsection (a) shall be construed as limiting the authority of the Secretary of the Treasury or the Secretary’s delegate (determined without regard to such amendment) to provide for the proper treatment of a failure to meet any requirement applicable under such Code with respect to one employer (and its employees) in the case of a plan to which section 403(b)(15) applies. 110. Treatment of student loan payments as elective deferrals for purposes of matching contributions (a) In general Subparagraph (A) of section 401(m)(4) and , and (iii) subject to the requirements of paragraph (13), any employer contribution made to a defined contribution plan on behalf of an employee on account of a qualified student loan payment. . (b) Qualified student loan payment Paragraph (4) of section 401(m) of such Code is amended by adding at the end the following new subparagraph: (D) Qualified student loan payment The term qualified student loan payment (i) to the extent such payments in the aggregate for the year do not exceed an amount equal to— (I) the limitation applicable under section 402(g) for the year (or, if lesser, the employee's compensation (as defined in section 415(c)(3)) for the year), reduced by (II) the elective deferrals made by the employee for such year, and (ii) if the employee certifies to the employer making the matching contribution under this paragraph that such payment has been made on such loan. For purposes of this subparagraph, the term qualified higher education expenses . (c) Matching contributions for qualified student loan payments Subsection (m) of section 401 of such Code is amended by redesignating paragraph (13) as paragraph (14), and by inserting after paragraph (12) the following new paragraph: (13) Matching contributions for qualified student loan payments (A) In general For purposes of paragraph (4)(A)(iii), an employer contribution made to a defined contribution plan on account of a qualified student loan payment shall be treated as a matching contribution for purposes of this title if— (i) the plan provides matching contributions on account of elective deferrals at the same rate as contributions on account of qualified student loan payments, (ii) the plan provides matching contributions on account of qualified student loan payments only on behalf of employees otherwise eligible to receive matching contributions on account of elective deferrals, (iii) under the plan, all employees eligible to receive matching contributions on account of elective deferrals are eligible to receive matching contributions on account of qualified student loan payments, and (iv) the plan provides that matching contributions on account of qualified student loan payments vest in the same manner as matching contributions on account of elective deferrals. (B) Treatment for purposes of nondiscrimination rules, etc (i) Nondiscrimination rules For purposes of subparagraph (A)(iii), subsection (a)(4), and section 410(b), matching contributions described in paragraph (4)(A)(iii) shall not fail to be treated as available to an employee solely because such employee does not have debt incurred under a qualified education loan (as defined in section 221(d)(1)). (ii) Student loan payments not treated as plan contribution Except as provided in clause (iii), a qualified student loan payment shall not be treated as a contribution to a plan under this title. (iii) Matching contribution rules Solely for purposes of meeting the requirements of paragraph (11)(B) or (12) of this subsection, or paragraph (11)(B)(i)(II), (12)(B), or (13)(D) of subsection (k), a plan may treat a qualified student loan payment as an elective deferral or an elective contribution, whichever is applicable. . (d) Simple retirement accounts Paragraph (2) of section 408(p) of such Code is amended by adding at the end the following new subparagraph: (F) Matching contributions for qualified student loan payments (i) In general Subject to the rules of clause (iii), an arrangement shall not fail to be treated as meeting the requirements of subparagraph (A)(iii) solely because under the arrangement, solely for purposes of such subparagraph, qualified student loan payments are treated as amounts elected by the employee under subparagraph (A)(i)(I) to the extent such payments do not exceed— (I) the applicable dollar amount under subparagraph (E) (after application of section 414(v)) for the year (or, if lesser, the employee's compensation (as defined in section 415(c)(3)) for the year), reduced by (II) any other amounts elected by the employee under subparagraph (A)(i)(I) for the year. (ii) Qualified student loan payment For purposes of this subparagraph— (I) In general The term qualified student loan payment (II) Qualified higher education expenses The term qualified higher education expenses (iii) Applicable rules Clause (i) shall apply to an arrangement only if, under the arrangement— (I) matching contributions on account of qualified student loan payments are provided only on behalf of employees otherwise eligible to elect contributions under subparagraph (A)(i)(I), and (II) all employees otherwise eligible to participate in the arrangement are eligible to receive matching contributions on account of qualified student loan payments. . (e) 403 (b) Subparagraph (A) of section 403(b)(12) of such Code is amended by adding at the end the following: The fact that the employer offers matching contributions on account of qualified student loan payments as described in section 401(m)(13) shall not be taken into account in determining whether the arrangement satisfies the requirements of clause (ii) (and any regulation thereunder). (f) 457 (b) Subsection (b) of section 457 of such Code is amended by adding at the end the following: A plan which is established and maintained by an employer which is described in subsection (e)(1)(A) shall not be treated as failing to meet the requirements of this subsection solely because the plan, or another plan maintained by the employer which meets the requirements of section 401(a), provides for matching contributions on account of qualified student loan payments as described in section 401(m)(13). (g) Regulatory authority The Secretary shall prescribe regulations for purposes of implementing the amendments made by this section, including regulations— (1) permitting a plan to make matching contributions for qualified student loan payments, as defined in sections 401(m)(4)(D) and 408(p)(2)(F) of the Internal Revenue Code of 1986, as added by this section, at a different frequency than matching contributions are otherwise made under the plan, provided that the frequency is not less than annually; (2) permitting employers to establish reasonable procedures to claim matching contributions for such qualified student loan payments under the plan, including an annual deadline (not earlier than 3 months after the close of each plan year) by which a claim must be made; and (3) promulgating model amendments which plans may adopt to implement matching contributions on such qualified student loan payments for purposes of sections 401(m), 408(p), 403(b), and 457(b) of the Internal Revenue Code of 1986. (h) Effective date The amendments made by this section shall apply to contributions made for years beginning after December 31, 2020. 111. Application of credit for small employer pension plan startup costs to employers which join an existing plan (a) In general Section 45E(d)(3)(A) effective effective with respect to the eligible employer (b) Effective date The amendment made by this section shall apply to eligible employer plans which become effective with respect to the eligible employer after the date of the enactment of this Act. 112. Military spouse retirement plan eligibility credit for small employers (a) In general Subpart D of part IV of subchapter A of chapter 1 45U. Military spouse retirement plan eligibility credit for small employers (a) In general For purposes of section 38, in the case of any eligible small employer, the military spouse retirement plan eligibility credit determined under this section for any taxable year is an amount equal to the sum of— (1) $250 with respect to each military spouse who is an employee of such employer and who is eligible to participate in an eligible defined contribution plan of such employer at any time during such taxable year, plus (2) so much of the contributions made by such employer to all such plans with respect to such employee during such taxable year as do not exceed $250. (b) Limitation An individual shall only be taken into account as a military spouse under subsection (a) for the taxable year which includes the date on which such individual began participating in the eligible defined contribution plan of the employer and the 2 succeeding taxable years. (c) Eligible small employer For purposes of this section— (1) In general The term eligible small employer (2) Application of 2-year grace period A rule similar to the rule of section 408(p)(2)(C)(i)(II) shall apply for purposes of this section. (d) Military spouse For purposes of this section— (1) In general The term military spouse (2) Exclusion of highly compensated employees With respect to any employer, the term military spouse (e) Eligible defined contribution plan For purposes of this section, the term eligible defined contribution plan (1) military spouses employed by such employer are eligible to participate in such plan not later than the date which is 2 months after the date on which such individual begins employment with such employer, and (2) military spouses who are eligible to participate in such plan— (A) are immediately eligible to receive an amount of employer contributions under such plan which is not less the amount of such contributions that a similarly situated participant who is not a military spouse would be eligible to receive under such plan after 2 years of service, and (B) immediately have a nonforfeitable right to the employee’s accrued benefit derived from employer contributions under such plan. (f) Aggregation rule All persons treated as a single employer under subsection (b), (c), (m), or (o) of section 414 shall be treated as one employer for purposes of this section. . (b) Credit allowed as part of general business credit Section 38(b) of such Code is amended by striking plus , plus (34) in the case of an eligible small employer (as defined in section 45U(c)), the military spouse retirement plan eligibility credit determined under section 45U(a). . (c) Clerical amendment The table of sections for subpart D of part IV of subchapter A of chapter 1 of such Code is amended by adding at the end the following new item: Sec. 45U. Military spouse retirement plan eligibility credit for small employers. . (d) Effective date The amendments made by this section shall apply to taxable years beginning after the date of the enactment of this Act. 113. Small immediate financial incentives for contributing to a plan (a) In general Subparagraph (A) of section 401(k)(4) (other than a de minimis financial incentive) any other benefit (b) Section 403 (b) Subparagraph (A) of section 403(b)(12) of such Code, as amended by the preceding provisions of this Act, is further amended by adding at the end the following: A plan shall not fail to satisfy clause (ii) solely by reason of offering a de minimis financial incentive to employees to elect to have the employer make contributions pursuant to a salary reduction agreement. (c) Exemption from prohibited transaction rules Subsection (d) of section 4975 of such Code is amended by striking or , or (24) the provision of a de minimis financial incentive described in section 401(k)(4)(A) or 403(b)(12)(A). . (d) Amendment of Employee Retirement Income Security Act of 1974 Subsection (b) of section 408 of the Employee Retirement Income Security Act of 1974 ( 29 U.S.C. 1108(b) (21) The provision of a de minimis financial incentive described in section 401(k)(4)(A) or 403(b)(12)(A) of the Internal Revenue Code of 1986. . (e) Effective date The amendments made by this section shall apply with respect to plan years beginning after the date of enactment of this Act. 114. Safe harbor for corrections of employee elective deferral failures (a) In general Section 414 (aa) Correcting automatic contribution errors (1) In general Any plan or arrangement shall not fail to be treated as a plan described in sections 401(a), 403(b), 408, or 457(b), as applicable, solely by reason of a corrected error. (2) Corrected error defined For purposes of this subsection, the term corrected error (A) is corrected by the date that is 9½ months after the end of the plan year during which the failure occurred, (B) is corrected in a manner that is favorable to the participant, and (C) is of a type which is so corrected for all similarly situated participants in a nondiscriminatory manner. Such correction may occur before or after the participant has terminated employment and may occur without regard to whether the error is identified by the Secretary. (3) Regulations and guidance for favorable correction methods The Secretary shall, by regulations or other guidance of general applicability, specify the correction methods that are in a manner favorable to the participant for purposes of paragraph (2)(B). . (b) Effective date The amendment made by this section shall apply with respect to any errors with respect to which the date referred to in section 414(aa) (as added by this section) is after the date of enactment of this Act. 115. One-year reduction in period of service requirement for long-term, part-time workers (a) In general Section 401(k)(2)(D)(ii) 3 2 (b) Effective date The amendment made by this section shall take effect as if included in the addition of section 401(k)(2)(D)(ii) of such Code by section 112 of the Setting Every Community Up for Retirement Enhancement Act of 2019. 116. Governmental pension plans may include certain firefighters, emergency medical technicians, and paramedics (a) Internal Revenue Code of 1986 Section 414(d) The term governmental plan 6 U.S.C. 101 (b) Employee Retirement Income Security Act of 1974 (1) In general Section 3(32) of the Employee Retirement Income Security Act of 1974 ( 29 U.S.C. 1002(32) . The term governmental plan section 501(c) 6 U.S.C. 101 (2) PBGC exception Section 4021(b)(2) of such Act ( 29 U.S.C. 1321(b)(2) described in the last sentence of section 3(32) described in either of the last two sentences of section 3(32). (c) Conforming amendments (1) Section 414(h)(2) described in the last sentence of section 414(d) (relating to plans of Indian tribal governments) described in either of the last two sentences of subsection (d) (2) Section 415(b)(2)(H)(i) of such Code is amended by adding at the end the following: or a public safety agency described in the last sentence of section 414(d), (3) Section 415(b)(2)(H)(ii)(I) of such Code is amended by striking or any political subdivision any political subdivision, or a public safety agency described in the last sentence of section 414(d) (4) Section 415(b)(10)(A) of such Code is amended by striking described in the last sentence of section 414(d) (relating to plans of Indian tribal governments) described in either of the last two sentences of section 414(d) (d) Effective date The amendment made by this section shall apply to plan years beginning after the date of the enactment of this Act. II Preservation of Income 201. Remove required minimum distribution barriers for life annuities (a) In general Paragraph (9) of section 401(a) (J) Certain increases in payments under a commercial annuity Nothing in this section shall prohibit a commercial annuity (within the meaning of section 3405(e)(6)) that is issued in connection with any eligible retirement plan (within the meaning of section 402(c)(8)(B), other than a defined benefit plan) from providing one or more of the following types of payments on or after the annuity starting date: (i) annuity payments that increase by a constant percentage, applied not less frequently than annually, at a rate that is less than 5 percent per year, (ii) a lump sum payment that— (I) results in a shortening of the payment period with respect to an annuity or a full or partial commutation of the future annuity payments, provided that such lump sum is determined using reasonable actuarial methods and assumptions, as determined in good faith by the issuer of the contract, or (II) accelerates the receipt of annuity payments that are scheduled to be received within the ensuing 12 months, regardless of whether such acceleration shortens the payment period with respect to the annuity, reduces the dollar amount of benefits to be paid under the contract, or results in a suspension of annuity payments during the period being accelerated, (iii) an amount which is in the nature of a dividend or similar distribution, provided that the issuer of the contract determines such amount based on a reasonable comparison of the actuarial factors assumed when calculating the initial annuity payments and the issuer’s experience with respect to those factors, or (iv) a final payment upon death that does not exceed the excess of the total amount of the consideration paid for the annuity payments, less the aggregate amount of prior distributions or payments from or under the contract. . (b) Regulations and enforcement (1) Regulations By the date that is one year after the date of enactment of this Act, the Secretary of the Treasury shall amend the regulation issued by the Department of the Treasury relating to Required Distributions from Retirement Plans (A) conform such regulations to subsection (a), including by eliminating the types of payments described in subsection (a) from the scope of the requirement in Q&A–14(c) of Treasury Regulation section 1.401(a)(9)–6 that the total future expected payments must exceed the total value being annuitized; (B) amend Q&A–14(c) of Treasury Regulation section 1.401(a)(9)–6 to provide that a commercial annuity that provides an initial payment that is at least equal to the initial payment that would be required from an individual account pursuant to Treasury Regulation section 1.401(a)(9)–5 will be deemed to satisfy the requirement in Q&A–14(c) of Treasury Regulation section 1.401(a)(9)–6 that the total future expected payments must exceed the total value being annuitized; and (C) amend Q&A–14(e)(3) of Treasury Regulation section 1.401(a)(9)–6 to provide that the total future expected payments under a commercial annuity are determined using the tables or other actuarial assumptions that the issuer of the contract actually uses in pricing the premiums and benefits with respect to the contract, provided that such tables or other actuarial assumptions are reasonable. (2) Enforcement As of the date of enactment of this Act, the Secretary of the Treasury shall administer and enforce the law in accordance with subsections (a) and (b). (c) Effective date This section shall take effect on the date of the enactment of this Act. 202. Qualifying longevity annuity contracts (a) In general Not later than the date which is 1 year after the date of the enactment of this Act, the Secretary of the Treasury or the Secretary’s delegate (hereafter in this section referred to as the Secretary Longevity Annuity Contracts (1) Repeal 25-percent premium limit The Secretary shall amend Q&A–17(b)(3) of Treasury Regulation section 1.401(a)(9)–6 and Q&A–12(b)(3) of Treasury Regulation section 1.408–8 to eliminate the requirement that premiums for qualifying longevity annuity contracts be limited to a percentage of an individual’s account balance, and to make such corresponding changes to the regulations and related forms as are necessary to reflect the elimination of this requirement. (2) Increase dollar limitation (A) In general The Secretary shall amend Q&A–17(b)(2)(i) of Treasury Regulation section 1.401(a)(9)–6 and Q&A–12(b)(2)(i) of Treasury Regulation section 1.408–8 to increase the dollar limitation on premiums for qualifying longevity annuity contracts from $125,000 to $200,000, and to make such corresponding changes to the regulations and related forms as are necessary to reflect this increase in the dollar limitation. (B) Adjustments for inflation The Secretary shall amend Q&A–17(d)(2)(i) of Treasury Regulation section 1.401(a)(9)–6 to provide that, in the case of calendar years beginning on or after January 1 of the second year following the year of enactment of this Act, the $200,000 dollar limitation (as increased by subparagraph (A)) will be adjusted at the same time and in the same manner as the limits are adjusted under section 415(d) (3) Facilitate joint and survivor benefits The Secretary shall amend Q&A–17(c) of Treasury Regulation section 1.401(a)(9)–6, and make such corresponding changes to the regulations and related forms as are necessary, to provide that, in the case of a qualifying longevity annuity contract which was purchased with joint and survivor annuity benefits for the individual and the individual's spouse which were permissible under the regulations at the time the contract was originally purchased, a divorce occurring after the original purchase and before the annuity payments commence under the contract will not affect the permissibility of the joint and survivor annuity benefits or other benefits under the contract, or require any adjustment to the amount or duration of benefits payable under the contract, provided that any qualified domestic relations order (within the meaning of section 414(p) (A) provides that the former spouse is entitled to the survivor benefits under the contract; (B) does not modify the treatment of the former spouse as the beneficiary under the contract who is entitled to the survivor benefits; or (C) does not modify the treatment of the former spouse as the measuring life for the survivor benefits under the contract. (4) Permit short free look period The Secretary shall amend Q&A–17(a)(4) of Treasury Regulation section 1.401(a)(9)–6 to ensure that such Q&A does not preclude a contract from including a provision under which an employee may rescind the purchase of the contract within a period not exceeding 90 days from the date of purchase. (b) Divorce or separation instrument For purposes of subsection (a)(3), the term divorce or separation instrument (1) a decree of divorce or separate maintenance or a written instrument incident to such a decree, (2) a written separation agreement, or (3) a decree (not described in paragraph (1)) requiring a spouse to make payments for the support or maintenance of the other spouse. (c) Effective dates, enforcement, and interpretations (1) Effective dates (A) Paragraphs (1) and (2) of subsection (a) shall be effective with respect to contracts purchased or received in an exchange on or after the date of the enactment of this Act. (B) Paragraphs (3) and (4) of subsection (a) shall be effective with respect to contracts purchased or received in an exchange on or after July 2, 2014. (2) Enforcement and interpretations Prior to the date on which the Secretary issues final regulations pursuant to subsection (a)— (A) the Secretary (or delegate) shall administer and enforce the law in accordance with subsection (a) and the effective dates in paragraph (1) of this subsection; and (B) taxpayers may rely upon their reasonable good faith interpretations of subsection (a). 203. Insurance-dedicated exchange-traded funds (a) In general Not later than the date which is 1 year after the date of the enactment of this Act, the Secretary of the Treasury (or the Secretary’s delegate) shall amend the regulation issued by the Department of the Treasury relating to Income Tax; Diversification Requirements for Variable Annuity, Endowment, and Life Insurance Contracts section 817(d) (b) Designate certain authorized participants and market makers as eligible investors The Secretary of the Treasury (or the Secretary’s delegate) shall amend Treas. Reg. section 1.817–5(f)(3) to provide that satisfaction of the requirements in Treas. Reg. section 1.817–5(f)(2)(i) with respect to an exchange-traded fund shall not be prevented by reason of beneficial interests in such a fund being held by 1 or more authorized participants or market makers. (c) Confirm that similarities to other funds are irrelevant The Secretary of the Treasury (or the Secretary’s delegate) shall amend Treas. Reg. section 1.817–5(f) to confirm that, for Federal income tax purposes, a regulated investment company, partnership, or trust (including an exchange-traded fund) that satisfies the requirements of Treas. Reg. section 1.817–5(f) (2) and (3) shall not be treated as owned by the holder of a variable contract pursuant to the principles of Rev. Rul. 81–225, 1981–2 C.B. 12, merely because another regulated investment company, partnership, trust, or similar investment vehicle follows the same investment strategy, has the same investment manager, or holds the same investments. (d) Define relevant terms In amending Treas. Reg. section 1.817–5(f)(3) in accordance with subsections (b) and (c) of this section, the Secretary of the Treasury (or the Secretary’s delegate) shall provide definitions consistent with the following: (1) Exchange-traded fund The term exchange-traded fund (A) that is registered with the Securities and Exchange Commission as an open-end investment company or a unit investment trust; (B) the shares of which can be purchased or redeemed directly from the fund only by an authorized participant; and (C) the shares of which are traded throughout the day on a national stock exchange at market prices that may or may not be the same as the net asset value of the shares. (2) Authorized participant The term authorized participant (A) purchasing the shares for its own investment purposes rather than for the exclusive purpose of creating and redeeming such shares on behalf of third parties; and (B) selling the shares to third parties who are not market makers or otherwise described in Treas. Reg. section 1.817–5(f) (1) and (3). (3) Market maker The term market maker (e) Effective dates, enforcement, and interpretations (1) Effective dates (A) Subsection (b) Subsection (b), and the definitions under subsection (d), shall apply to segregated asset account investments made on or after the earlier of— (i) the date that is 18 months after the date of the of enactment of this Act, or (ii) the date on which the amendments to regulations under subsection (b) are made. (B) Subsection (c) Subsection (c) shall apply to taxable years beginning after the date of the enactment of this Act. (2) Enforcement and interpretations Prior to the date that the Secretary of the Treasury (or the Secretary’s delegate) issues final regulations pursuant to this section— (A) the Secretary (or delegate) shall administer and enforce the law in accordance with this section and the effective dates under paragraph (1), and (B) taxpayers may rely upon their reasonable good faith interpretations of the preceding subsections of this section. (3) No inference Nothing contained in the amendments to regulations pursuant to subsection (c), or the administration and enforcement of such subsection under paragraph (2), shall be construed to create any inference as to a change in law or guidance in effect prior to enactment of this section. III Simplification and Clarification of Retirement Plan Rules 301. Recovery of retirement plan overpayments (a) Overpayments under Internal Revenue Code of 1986 (1) Qualification requirements Section 414 (bb) Special rules applicable to benefit overpayments (1) In general A plan shall not fail to be treated as described in clause (i), (ii), (iii), or (iv) of section 219(g)(5)(A) (and shall not fail to be treated as satisfying the requirements of section 401(a) or 403) merely because— (A) the plan fails to obtain payment from any participant, beneficiary, employer, plan sponsor, fiduciary, or other party on account of any inadvertent benefit overpayment made by the plan, or (B) the plan sponsor amends the plan to increase past or future benefit payments to affected participants and beneficiaries in order to adjust for prior inadvertent benefit overpayments. (2) Reduction in future benefit payments and recovery from responsible party Paragraph (1) shall not fail to apply to a plan merely because, after discovering a benefit overpayment, such plan— (A) reduces future benefit payments to the correct amount provided for under the terms of the plan, or (B) seeks recovery from the person or persons responsible for such overpayment. (3) Employer funding obligations Nothing in this subsection shall relieve an employer of any obligation imposed on it to make contributions to a plan to meet the minimum funding standards under section 412 or to prevent or restore an impermissible forfeiture in accordance with section 411. (4) Observance of benefit limitations Notwithstanding paragraph (1), a plan to which paragraph (1) applies shall observe any limitations imposed on it by section 401(a)(17) or 415. The plan may enforce such limitations using any method approved by the Secretary for recouping benefits previously paid or allocations previously made in excess of such limitations. (5) Coordination with other qualification requirements The Secretary may issue regulations or other guidance of general applicability specifying how benefit overpayments and their recoupment or non-recoupment from a participant or beneficiary shall be taken into account for purposes of satisfying any requirement applicable to a plan to which paragraph (1) applies. . (2) Rollovers Section 402(c) of such Code is amended by adding at the end the following new paragraph: (13) In the case of an inadvertent benefit overpayment from a plan to which section 414(bb)(1) applies which is transferred to an eligible retirement plan by or on behalf of a participant or beneficiary— (A) the portion of such overpayment with respect to which recoupment is not sought on behalf of the plan shall be treated as having been paid in an eligible rollover distribution if the payment would have been an eligible rollover distribution but for being an overpayment, and (B) the portion of such overpayment with respect to which recoupment is sought on behalf of the plan shall be permitted to be returned to such plan and in such case shall be treated as an eligible rollover distribution transferred to such plan by the participant or beneficiary who received such overpayment (and the plans making and receiving such transfer shall be treated as permitting such transfer). In any case in which recoupment is sought on behalf of the plan but is disputed by the participant or beneficiary who received such overpayment, such dispute shall be subject to the claims and appeals procedures of the plan that made such overpayment, such plan shall notify the plan receiving the rollover of such dispute, and the plan receiving the rollover shall retain such overpayment on behalf of the participant or beneficiary (and shall be entitled to treat such overpayment as plan assets) pending the outcome of such procedures. . (b) Overpayments under ERISA Section 206 of the Employee Retirement Income Security Act of 1974 ( 29 U.S.C. 1056 (h) Special rules applicable to benefit overpayments (1) General rule In the case of an inadvertent benefit overpayment by any pension plan, the responsible plan fiduciary shall not be considered to have failed to comply with the requirements of this title merely because such fiduciary determines, in the exercise of its fiduciary discretion, not to seek recovery of all or part of such overpayment from— (A) any participant or beneficiary, (B) any plan sponsor of, or contributing employer to— (i) an individual account plan, provided that the amount needed to prevent or restore any impermissible forfeiture from any participant’s or beneficiary’s account arising in connection with the overpayment is, separately from and independently of the overpayment, allocated to such account pursuant to the nonforfeitability requirements of section 203 (for example, out of the plan’s forfeiture account, additional employer contributions, or recoveries from those responsible for the overpayment), or (ii) a defined benefit pension plan subject to the funding rules in part 3 of this subtitle B, unless the responsible plan fiduciary determines, in the exercise of its fiduciary discretion, that failure to recover all or part of the overpayment faster than required under such funding rules would materially affect the plan’s ability to pay benefits due to other participants and beneficiaries, or (C) any fiduciary of the plan, other than a fiduciary (including a plan sponsor or contributing employer acting in a fiduciary capacity) whose breach of its fiduciary duties resulted in such overpayment, provided that if the plan has established prudent procedures to prevent and minimize overpayment of benefits and the relevant plan fiduciaries have followed such procedures, an inadvertent benefit overpayment will not give rise to a breach of fiduciary duty. (2) Reduction in future benefit payments and recovery from responsible party Paragraph (1) shall not fail to apply with respect to any inadvertent benefit overpayment merely because, after discovering such overpayment, the responsible plan fiduciary— (A) reduces future benefit payments to the correct amount provided for under the terms of the plan, or (B) seeks recovery from the person or persons responsible for the overpayment. (3) Employer funding obligations Nothing in this subsection shall relieve an employer of any obligation imposed on it to make contributions to a plan to meet the minimum funding standards under part 3 of this subtitle B or to prevent or restore an impermissible forfeiture in accordance with section 203. (4) Recoupment from participants and beneficiaries If the responsible plan fiduciary, in the exercise of its fiduciary discretion, decides to seek recoupment from a participant or beneficiary of all or part of an inadvertent benefit overpayment made by the plan to such participant or beneficiary, it may do so, subject to the following conditions: (A) No interest or other additional amounts (such as collection costs or fees) are sought on overpaid amounts. (B) If the plan seeks to recoup past overpayments of a non-decreasing periodic benefit by reducing future benefit payments— (i) the reduction ceases after the plan has recovered the full dollar amount of the overpayment, (ii) the amount recouped each calendar year does not exceed 10 percent of the full dollar amount of the overpayment, and (iii) future benefit payments are not reduced to below 90 percent of the periodic amount otherwise payable under the terms of the plan. Alternatively, if the plan seeks to recoup past overpayments of a non-decreasing periodic benefit through one or more installment payments, the sum of such installment payments in any calendar year does not exceed the sum of the reductions that would be permitted in such year under the preceding sentence. (C) If the plan seeks to recoup past overpayments of a benefit other than a non-decreasing periodic benefit, the plan satisfies requirements developed by the Secretary of the Treasury for purposes of this subparagraph. (D) Efforts to recoup overpayments are not made through a collection agency or similar third party and such efforts are not accompanied by threats of litigation, unless the responsible plan fiduciary reasonably believes it could prevail in a civil action brought in Federal or State court to recoup the overpayments. (E) Recoupment of past overpayments to a participant is not sought from any beneficiary of the participant, including a spouse, surviving spouse, former spouse, or other beneficiary. (F) Recoupment may not be sought if the first overpayment occurred more than 3 years before the participant or beneficiary is first notified in writing of the error. (G) A participant or beneficiary from whom recoupment is sought is entitled to contest all or part of the recoupment pursuant to the plan’s claims and appeals procedures. (H) In determining the amount of recoupment to seek, the responsible plan fiduciary may take into account the hardship that recoupment likely would impose on the participant or beneficiary. (5) Effect of culpability Subparagraphs (A) through (F) of paragraph (4) shall not apply to protect a participant or beneficiary who is culpable. For purposes of this paragraph, a participant or beneficiary is culpable if the individual bears responsibility for the overpayment (such as through misrepresentations or omissions that led to the overpayment), or if the individual knew, or had good reason to know under the circumstances, that the benefit payment or payments were materially in excess of the correct amount. Notwithstanding the preceding sentence, an individual is not culpable merely because the individual believed the benefit payment or payments were or might be in excess of the correct amount, if the individual raised that question with an authorized plan representative and was told the payment or payments were not in excess of the correct amount. With respect to a culpable participant or beneficiary, efforts to recoup overpayments shall not be made through threats of litigation, unless a lawyer for the plan could make the representations required under Rule 11 of the Federal Rules of Civil Procedure if the litigation were brought in Federal court. . (c) Effective date The amendments made by this section shall apply as of the date of the enactment of this Act. (d) Certain actions before date of enactment Plans, fiduciaries, employers, and plan sponsors are entitled to rely on— (1) a good faith interpretation of then existing administrative guidance for inadvertent benefit overpayment recoupments and recoveries that commenced before the date of enactment of this Act, and (2) determinations made before such date of enactment by the responsible plan fiduciary, in the exercise of its fiduciary discretion, not to seek recoupment or recovery of all or part of an inadvertent benefit overpayment. In the case of a benefit overpayment that occurred prior to the date of enactment of this Act, any installment payments by the participant or beneficiary to the plan or any reduction in periodic benefit payments to the participant or beneficiary, which were made in recoupment of such overpayment and which commenced prior to such date, may continue after such date. Nothing in this subsection shall relieve a fiduciary from responsibility for an overpayment that resulted from a breach of its fiduciary duties. 302. Reduction in excise tax on certain accumulations in qualified retirement plans (a) In general Subsection (a) of section 4974 50 percent 25 percent (b) Reduction in excise tax on failures To take required minimum distributions Section 4974 of such Code is amended by adding at the end the following new subsection: (e) Reduction of tax in certain cases (1) Reduction In the case of a taxpayer who— (A) corrects, during the correction window, a shortfall of distributions from an individual retirement plan which resulted in imposition of a tax under subsection (a), and (B) submits a return, during the correction window, reflecting such tax (as modified by this subsection), the first sentence of subsection (a) shall be applied by substituting 10 percent 25 percent (2) Correction window For purposes of this subsection, the term correction window (A) the date on which the Secretary initiates an audit, or otherwise demands payment, with respect to the shortfall of distributions, or (B) the last day of the second taxable year that begins after the end of the taxable year in which the tax under subsection (a) is imposed. . (c) Effective date The amendments made by this section shall apply to taxable years beginning after December 31, 2020. 303. Performance benchmarks for asset allocation funds (a) In general Not later than 6 months after the date of the enactment of this Act, the Secretary of Labor (or the Secretary’s delegate) shall modify the regulations under section 404 of the Employee Retirement Income Security Act of 1974 ( 29 U.S.C. 1104 (1) the blend is reasonably representative of the asset class holdings of the designated investment alternative; (2) for purposes of determining the blend’s returns for 1-, 5-, and 10-calendar-year periods (or for the life of the alternative, if shorter), the blend is modified at least once per year to reflect changes in the asset class holdings of the designated investment alternative; (3) the blend is furnished to participants and beneficiaries in a manner that is reasonably designed to be understandable and helpful; and (4) each securities market index which is used for an associated asset class would separately satisfy the requirements of such regulations for such asset class. (b) Study Not later than December 31, 2021, the Secretary of Labor (or the Secretary’s delegate) shall deliver a report to the Committees on Ways and Means and Education and Labor of the House of Representatives and the Committees on Finance and Health, Education, Labor, and Pensions of the Senate regarding the effectiveness of the benchmarking requirements under section 2550.404a–5 of title 29, Code of Federal Regulations. 304. Review and report to the Congress relating to reporting and disclosure requirements (a) Study As soon as practicable after the date of the enactment of this Act, the Secretary of Labor, the Secretary of the Treasury, and the Pension Benefit Guaranty Corporation shall review the reporting and disclosure requirements of— (1) title I of the Employee Retirement Income Security Act of 1974 applicable to pension plans (as defined in section 3(2) of such Act); and (2) the Internal Revenue Code of 1986 applicable to qualified retirement plans (as defined in section 4974(c) of such Code without regard to paragraphs (4) and (5) thereof). (b) Report Not later than 18 months after the date of the enactment of this Act, the Secretary of Labor, the Secretary of the Treasury, and the Pension Benefit Guaranty Corporation, jointly, and after consultation with a balanced group of participant and employer representatives, shall with respect to plans referenced in subsection (a) report on the effectiveness of the applicable reporting and disclosure requirements and make such recommendations as may be appropriate to the appropriate committees of the Congress to consolidate, simplify, standardize, and improve such requirements so as to simplify reporting for such plans and ensure that plans can simply furnish and participants and beneficiaries timely receive and better understand the information they need to monitor their plans, plan for retirement, and obtain the benefits they have earned. Such report shall assess the extent to which retirement plans are retaining disclosures, work records, and plan documents that are needed to ensure accurate calculation of future benefits. To assess the effectiveness of the applicable reporting and disclosure requirements, the report shall include an analysis, based on plan data, of how participants and beneficiaries are providing preferred contact information, the methods by which plan sponsors and plans are furnishing disclosures, and the rate at which participants and beneficiaries (grouped by key demographics) are receiving, accessing, and retaining disclosures. The agencies shall conduct appropriate surveys and data collection to obtain any needed information. 305. Eliminating unnecessary plan requirements related to unenrolled participants (a) Amendment of Internal Revenue Code of 1986 Section 414 (cc) Eliminating unnecessary plan requirements related to unenrolled participants (1) In general Notwithstanding any other provision of this title, with respect to any defined contribution plan, no disclosure, notice, or other plan document (other than the notices and documents described in subparagraphs (A) and (B)) shall be required to be furnished under this title to any unenrolled participant if the unenrolled participant receives— (A) in connection with the annual open season election period with respect to the plan or, if there is no such period, within a reasonable period prior to the beginning of each plan year, an annual reminder notice (in paper format, or in any electronic format consented to by the participant) of such participant’s eligibility to participate in such plan and any applicable election deadlines under the plan, and (B) any document requested by such participant which the participant would be entitled to receive without regard to this subsection. (2) Unenrolled participant For purposes of this subsection, the term unenrolled participant (A) is eligible to participate in a defined contribution plan, (B) has been furnished all required notices, disclosures, and other plan documents required to be furnished under this title and the summary plan description as provided in section 104(b) of the Employee Retirement Income Security Act of 1974 in connection with such participant’s initial eligibility to participate in such plan, (C) is not participating in such plan, and (D) does not have a balance in the plan. For purposes of this subsection, any eligibility to participate in the plan following any period for which such employee was not eligible to participate shall be treated as initial eligibility. (3) Annual reminder notice For purposes of this subsection, the term annual reminder notice . (b) Amendment of Employee Retirement Income Security Act of 1974 (1) In general Part 1 of subtitle B of subchapter I of the Employee Retirement Income Security Act of 1974 is amended by redesignating section 111 as section 112 and by inserting after section 110 the following new section: 111. Eliminating unnecessary plan requirements related to unenrolled participants (a) In general Notwithstanding any other provision of this title, with respect to any individual account plan, no disclosure, notice, or other plan document (other than the notices and documents described in paragraphs (1) and (2)) shall be required to be furnished under this title to any unenrolled participant if the unenrolled participant receives— (1) in connection with the annual open season election period with respect to the plan or, if there is no such period, within a reasonable period prior to the beginning of each plan year, an annual reminder notice of such participant’s eligibility to participate in such plan and any applicable election deadlines under the plan; and (2) any document requested by such participant which the participant would be entitled to receive without regard to this section. (b) Unenrolled participant For purposes of this section, the term unenrolled participant (1) is eligible to participate in an individual account plan; (2) has received all required notices, disclosures, and other plan documents, including the summary plan description, required to be furnished under this title in connection with such participant’s initial eligibility to participate in such plan; (3) is not participating in such plan; and (4) does not have a balance in the plan. For purposes of this section, any eligibility to participate in the plan following any period for which such employee was not eligible to participate shall be treated as initial eligibility. (c) Annual reminder notice For purposes of this section, the term annual reminder notice (1) is furnished in connection with the annual open season election period with respect to the plan or, if there is no such period, is furnished within a reasonable period prior to the beginning of each plan year; (2) notifies the unenrolled participant of— (A) the unenrolled participant’s eligibility to participate in the plan; and (B) the key benefits under the plan and the key rights and features under the plan affecting such benefits; and (3) provides such information in a prominent manner calculated to be understood by the average participant. . (2) Clerical amendment The table of contents in section 1 of the Employee Retirement Income Security Act of 1974 is amended by striking the item relating to section 111 and by inserting after the item relating to section 110 the following new items: Sec. 111. Eliminating unnecessary plan requirements related to unenrolled participants. Sec. 112. Repeal and effective date. . (c) Effective date The amendments made by this section shall apply to plan years beginning after December 31, 2020. 306. Retirement savings lost and found (a) Retirement Savings Lost and Found (1) Establishment (A) In general Not later than 2 years after the date of the enactment of this Act, the Secretary of Labor, the Secretary of the Treasury, and the Secretary of Commerce, in cooperation, shall establish an Office of the Retirement Savings Lost and Found, which shall develop and maintain an online searchable database (to be managed by the Pension Benefit Guaranty Corporation) of unclaimed vested benefits of participants and beneficiaries in plans— (i) to allow an individual to search for information that enables the individual to locate the plan administrator of any plans with respect to which the individual is a participant or beneficiary, and to provide contact information for the plan administrator of any plan described in subparagraph (B) with respect to which the individual may be entitled to a benefit; (ii) to allow the corporation to assist such an individual in locating any plan of the individual; and (iii) to allow the corporation to make any necessary changes to contact information on record for the plan administrator based on any changes to the plan due to merger or consolidation of the plan with any other plan, division of the plan into two or more plans, bankruptcy, termination, change in name of the plan, change in name or address of the plan administrator, or other causes. The Retirement Savings Lost and Found established under this paragraph shall contain the information obtained by the corporation from the Internal Revenue Service regarding deferred vested benefits of separated participants and beneficiaries in plans as reported under section 6057(d) (B) Plans described A plan described in this subparagraph is a plan to which the vesting standards of section 203 of part 2 of subtitle B of title I of the Employee Retirement Income Security Act of 1974 apply. (2) Administration The Retirement Savings Lost and Found established under paragraph (1) shall provide individuals described in paragraph (1)(A) only with the ability to view contact information for the plan administrator of any plan with respect to which the individual is a participant or beneficiary, sufficient to allow the individual to locate the individual’s plan in order to recover any benefit owing to the individual under the plan. (3) Current information (A) In general Paragraph (2) of section 6057(a) (i) in subparagraph (C)— (I) by striking during such plan year during the plan year immediately preceding such plan year (II) by adding and (III) by striking clause (iii); (ii) by redesignating subparagraph (E) as subparagraph (G); (iii) by striking and (iv) by inserting after subparagraph (D) the following new subparagraphs: (E) the name and taxpayer identifying number of each participant or former participant in the plan— (i) who, during any previous plan year, was reported under subparagraph (C), and with respect to whom the benefits described in subparagraph (C)(ii) were fully paid during the plan year, (ii) with respect to whom any amount was distributed under section 401(a)(31)(B) during the plan year, or (iii) with respect to whom a deferred annuity contract was distributed during the plan year, (F) in the case of a participant or former participant to whom subparagraph (E) applies— (i) in the case of a participant described in clause (ii) thereof, the name and address of the designated trustee or issuer described in section 401(a)(31)(B)(i) and the account number of the individual retirement plan to which the amount was distributed, and (ii) in the case of a participant described in clause (iii) thereof, the name and address of the issuer of such annuity contract and the contract or certificate number, and . (B) Rules relating to direct trustee-to-trustee transfers (i) In general Paragraph (6) of section 402(e) of such Code is amended— (I) by striking transfers transfers (A) In general Any ; and (II) by adding at the end the following new subparagraph: (B) Notification of trustee In the case of a distribution under section 401(a)(31)(B), the plan administrator shall notify the designated trustee or issuer described in clause (i) thereof that the transfer is a mandatory distribution required by such section. . (ii) Penalty Subsection (i) of section 6652 of such Code is amended— (I) by striking to recipients or notification (II) by striking 402(f), 402(f) or a notification as required by section 402(e)(6)(B), (III) by striking such written explanation such written explanation or notification (iii) Reports Subsection (i) of section 408 of such Code is amended— (I) by redesignating subparagraphs (A) and (B) of paragraph (2) as clauses (i) and (ii), respectively, and by moving such clauses 2 ems to the right; (II) by redesignating paragraphs (1) and (2) as subparagraphs (A) and (B), respectively, and by moving such subparagraphs 2 ems to the right; and (III) by striking as the Secretary prescribes a simple retirement account (3) Simple retirement accounts In the case of a simple retirement account ; (IV) by striking Reports Reports.— (1) In general The trustee of ; (V) by striking under paragraph (2) under paragraph (1)(B) (VI) by inserting after paragraph (1)(B)(ii), as redesignated by the preceding clauses, the following new paragraph: (2) Mandatory distributions In the case of an account, contract, or annuity to which a transfer under section 401(a)(31)(B) is made (including a transfer from the individual retirement plan to which the original transfer under such section was made to another individual retirement plan), the report required by this subsection for the year of the transfer shall— (A) identify such transfer as a mandatory distribution required by such section, (B) include the name, address, and taxpayer identifying number of the trustee or issuer of the individual retirement plan to which the amount is transferred, and (C) be filed with the Pension Benefit Guaranty Corporation as well as with the Secretary. . (C) Notification of participants upon separation Subsection (e) of section 6057 of such Code is amended by inserting , and a notice of the availability of, and the contact information for, the Retirement Savings Lost and Found established under section 306(a)(1) of the Securing a Strong Retirement Act of 2020 (D) Effective date The amendments made by this paragraph shall apply to distributions made in, and returns and reports relating to, years beginning after the second December 31 occurring after the date of the enactment of this Act. (4) Coordination with distribution requirements, fiduciary duties, etc (A) Amendment of Internal Revenue Code of 1986 Paragraph (9) of section 401(a) (K) Coordination with Retirement Savings Lost and Found (i) In general With respect to any lost or missing participant of a plan, the plan shall not be treated as failing to satisfy the requirements of this paragraph or any other requirement of this title which cannot be satisfied due to the plan’s inability to locate the participant. (ii) Lost or missing participant For purposes of subclause (i), the term lost or missing participant . (B) Amendment of Employee Retirement Income Security Act of 1974 (i) In general Section 404 of the Employee Retirement Income Security Act of 1974 ( 29 U.S.C. 1104 (e) Coordination with Retirement Savings Lost and Found (1) In general With respect to any lost or missing participant of a plan, a fiduciary of the plan shall not be treated as failing to satisfy any requirement to search for or attempt to locate, or to provide any document or information to, such individual, or any other requirement of this title which cannot be satisfied due to the plan's inability to locate the participant. (2) Lost or missing participant For purposes of paragraph (1), the term lost or missing participant . (ii) Conforming amendments Section 4050(a)(1) of the Employee Retirement Income Security Act of 1974 ( 29 U.S.C. 1350(a)(1) (I) by striking provides either— (i) provides ; (II) by striking the period at the end and inserting ; or (III) by adding at the end the following new clause: (ii) satisfies the requirements of section 6057(a) . (5) Requirement of electronic filing (A) In general Paragraph (2) of section 6011(e) (i) by redesignating subparagraphs (A) and (B) as clauses (i) and (ii), respectively, and by moving such clauses 2 ems to the right; (ii) by striking the requirements of such regulations the Secretary shall require (B) Certain partnerships Notwithstanding subparagraph (A), the Secretary shall require ; (iii) by striking regulations regulations (A) In general In prescribing ; and (iv) by adding at the end the following new subparagraph: (C) Exceptions Notwithstanding subparagraph (A), the Secretary shall require returns or reports required under— (i) sections 6057, 6058, and 6059, and (ii) sections 408(i), 6041, and 6047 to the extent such return or report relates to the tax treatment of a distribution from a plan, account, contract, or annuity, to be filed on magnetic media, but only with respect to persons who are required to file at least 50 returns during the calendar year which includes the first day of the plan year to which such returns or reports relate. . (B) Effective date The amendments made by this paragraph shall apply to returns and reports relating to years beginning after the second December 31 occurring after the date of the enactment of this Act. (6) Safeguarding participant privacy and security In establishing the Retirement Savings Lost and Found under paragraph (1), the Secretary of Labor, the Secretary of Treasury, and the Secretary of Commerce shall take all necessary and proper precautions to ensure that individuals’ plan information maintained by the Retirement Savings Lost and Found is protected and that persons other than the individual cannot fraudulently claim the benefits to which any individual is entitled, and to allow any individual to opt out of inclusion in the Retirement Savings Lost and Found at the election of the individual. (7) Authorization of appropriations There are authorized to be appropriated such sums as may be necessary to carry out the purposes of this subsection. (b) Mandatory transfers of rollover distributions (1) Investment options (A) In general Subparagraph (B) of section 404(c)(3) of the Employee Retirement Income Security Act of 1974 ( 29 U.S.C. 1104(c)(3) Securing a Strong Retirement Act of 2020 (i) a target date or life cycle fund held under such account; (ii) as described in section 2550.404a–2 of title 29, Code of Federal Regulations, an investment product held under such account designed to preserve principal and provide a reasonable rate of return; (iii) the Pension Benefit Guaranty Corporation in accordance with section 401(a)(31)(B)(iv) (iv) such other option as the Secretary may so provide. . (B) Regulations Not later than 270 days after the date of the enactment of this Act, the Secretary of Labor shall promulgate regulations identifying the target date or life cycle funds, or specifying the characteristics of such a fund, that will be deemed to meet the requirements of section 404(c)(3)(B)(i) of the Employee Retirement Income Security Act of 1974 ( 29 U.S.C. 1104(c)(3)(B) (2) Expansion of cap; authority to transfer lesser amounts (A) Cap Sections 401(a)(31)(B)(ii) 411(a)(11)(A) $5,000 $6,000 (B) Distribution of larger amounts to individual retirement plans only Section 401(a)(31)(B)(i) of such Code is amended by adding at the end the following: The Office of the Retirement Savings Lost and Found established by Section 306 of the Securing a Strong Retirement Act shall not be treated as a trustee or issuer that is eligible to receive such distributions. (C) Lesser amounts Section 401(a)(31)(B) of such Code is amended by adding at the end the following new clauses: (iii) Treatment of lesser amounts In the case of a trust which is part of an eligible plan, such trust shall not be a qualified trust under this section unless such plan provides that, if a participant in the plan separates from the service covered by the plan and the nonforfeitable accrued benefit described in clause (ii) is not in excess of $1,000, the plan administrator shall (either separately or as part of the notice under section 402(f)) notify the participant that the participant is entitled to such benefit or attempt to pay the benefit directly to the participant. (iv) Transfers to Retirement Savings Lost and Found If, after a plan administrator takes the action required under clause (iii), the participant does not— (I) within 6 months of the notification under such clause, make an election under subparagraph (A) or elect to receive a distribution of the benefit directly, or (II) accept any direct payment made under such clause within 6 months of the attempted payment, the plan administrator shall transfer the amount of such benefit to the Office of the Retirement Savings Lost and Found in accordance with section 306(c)(2)(a)(ii) of the Securing a Strong Retirement Act of 2020 (v) Income tax treatment of transfers to Retirement Savings Lost and Found For purposes of determining the income tax treatment of transfers to the Office of the Retirement Savings Lost and Found under clause (iv)— (I) such a transfer shall be treated as a transfer to an individual retirement plan under clause (i), and (II) the distribution of such amounts by the Office of the Retirement Savings Lost and Found shall be treated as a distribution from an individual retirement plan. . (D) Effective date The amendments made by this paragraph shall apply to vested benefits with respect to participants who separate from service connected to the plan in plan years beginning after the second December 31 occurring after the date of the enactment of this Act. (c) Office of the Retirement Savings Lost and Found (1) In general Not later than one year after the date of the enactment of this Act, the Secretary of Labor, the Secretary of Treasury, and the Secretary of Commerce shall establish within the Pension Benefit Guaranty Corporation an Office of the Retirement Savings Lost and Found to operate in conjunction with section 4050 of the Employee Retirement Income Security Act of 1974 ( 29 U.S.C. 1350 (2) Responsibilities of Office (A) In general In addition to administering the Retirement Savings Lost and Found under subsection (a) and carrying out the duties described in clauses (ii) and (iii) of subsection (a)(1)(A), the Office of the Retirement Savings Lost and Found established under this section shall— (i) perform an annual audit of plan information contained in the Retirement Savings Lost and Found and ensure that such information is current and accurate; (ii) invest any amount transferred under section 401(a)(31)(B)(iv) (iii) upon application filed by the participant or beneficiary in such form and manner as may be prescribed in regulations, pay to the participant or beneficiary the amount transferred (or the appropriate survivor benefit) either— (I) in a single sum (plus interest); or (II) in such other form as is specified in regulations; and (iv) identify such amount as eligible to be paid into an eligible retirement plan described in section 402(c)(8)(B) (B) Option to contract The Office of the Retirement Savings Lost and Found shall conduct an analysis of the cost effectiveness of contracting with a third party to carry out the responsibilities under subparagraph (A) and, if the Pension Benefit Guaranty Corporation determines that it would be more cost effective to do so than to carry out such responsibilities within the Office of the Retirement Savings Lost and Found, the Director shall report to the Committees on Finance and Health, Education, Labor, and Pensions of the Senate and the Committees on Ways and Means and Education and Labor of the House of Representatives the intention to so contract. (C) Option to prescribe protocols The Pension Benefit Guaranty Corporation may establish protocols to assist participants originally treated as lost or missing in claiming their benefits under a plan. (D) Coordination The Office of the Retirement Savings Lost and Found shall coordinate with the Social Security Administration, the Employee Benefits Security Administration, and other applicable agencies to integrate information and databases on lost, missing, and inactive participants. (d) Transmission of information to Pension Benefit Guaranty Corporation Section 6057 (h) Transmission of information to Director of Pension Benefit Guaranty Corporation The Secretary shall transmit copies of any statements, notifications, reports, or other information obtained by him under this section to the Director of the Pension Benefit Guaranty Corporation. . 307. Exemption from required minimum distribution rules for individuals with certain account balances (a) In general Section 401(a)(9) (L) Exception from required minimum distributions during life of employee where assets do not exceed $100,000 (i) In general If, as of a measurement date, the aggregate value of an employee’s entire interest under all defined contribution plans does not exceed $100,000, then, during any succeeding calendar year beginning before the next measurement date, the requirements of subparagraph (A) shall not apply with respect to such employee. (ii) Defined contribution plan For purposes of this subparagraph, the term defined contribution plan (iii) Limit on required minimum distribution The required minimum distribution determined under subparagraph (A) for an employee under all defined contribution plans shall not exceed an amount equal to the excess of— (I) the aggregate value of an employee’s entire interest under such plans on the last day of the calendar year to which such distribution relates, over (II) the dollar amount in effect under clause (i) for such calendar year. The Secretary in regulations or other guidance may provide how such amount shall be distributed in the case of an individual with more than one defined contribution plan. (iv) Measurement date For purposes of this subparagraph, the term measurement date (I) the last day of the calendar year preceding the calendar year in which the employee attains age 75, and (II) in the case of any employee who (after a measurement date determined under subclause (I) with respect to such employee) receives contributions, rollovers, or transfers of amounts that were not previously taken into account in applying this subparagraph, the last day of the calendar year in which such contribution, rollover, or transfer was so received. (v) Inflation adjustment In the case of any calendar year beginning after 2020, the $100,000 amount in clause (i) shall be increased by an amount equal to— (I) such dollar amount, multiplied by (II) the cost of living adjustment determined under section 1(f)(3) for the calendar year, determined by substituting calendar year 2019 calendar year 2016 Any increase determined under this clause shall be rounded to the next lowest multiple of $5,000. (vi) Plan administrator reliance on employee certification A defined contribution plan described in clause (iii), (iv), (v), or (vi) of section 402(c)(8)(B) shall not be treated as failing to meet the requirements of this paragraph in the case of any failure to make a required minimum distribution for a calendar year if— (I) the aggregate value of an employee’s entire interest under all defined contribution plans of the employer on the last day of the calendar year to which such distribution relates does not exceed the dollar amount in effect for such year under clause (i), and (II) the employee certifies that the aggregate value of the employee’s entire interest under all defined contribution plans on the most recent measurement date with respect to the employee (as determined by the employee based on guidance provided by the Secretary) did not exceed the dollar amount in effect for such year under clause (i). (vii) Aggregation rule All employers treated as a single employer under subsection (b), (c), (m), or (o) of section 414 shall be treated as a single employer for purposes of clause (v). . (b) Plan administrator reporting Section 6047 of such Code is amended by redesignating subsection (h) as subsection (i) and by inserting after subsection (g) the following new subsection: (h) Account balance for participants who have attained age 74 (1) In general Not later than January 31 of each year, the plan administrator (as defined in section 414(g)) of each defined contribution plan (as defined in section 401(a)(9)(L)) shall make a return to the Secretary with respect to each participant of such plan who has attained age 74 as of the end of the preceding calendar year which states— (A) the name and plan number of the plan, (B) the name and address of the plan administrator, (C) the name, address, and taxpayer identification number of the participant, and (D) the account balance of such participant as of the end of the preceding calendar year. (2) Statement furnished to participant Every person required to make a return under paragraph (1) with respect to a participant shall furnish a copy of such return to such participant. (3) Application to individual retirement plans and annuities In the case of an defined contribution plan described in clause (i) or (ii) of section 402(c)(8)(B)— (A) any reference in this subsection to the plan administrator shall be treated as a reference to the trustee or issuer, as the case may be, and (B) any reference in this subsection to the participant shall be treated as a reference to the individual for whom such account or annuity is maintained. . (c) Effective date The amendments made by this section shall apply to distributions required to be made in calendar years beginning more than 120 days after the date of the enactment of this Act. 308. Expansion of Employee Plans Compliance Resolution System (a) In general Except as otherwise provided in the Internal Revenue Code of 1986 or regulations prescribed by the Secretary of the Treasury or the Secretary’s delegate (referred to in this section as the Secretary EPCRS (b) Loan errors In the case of an eligible inadvertent failure relating to a loan from a plan to a participant— (1) such failure may be self-corrected under subsection (a) according to the rules of section 6.07 of Revenue Procedure 2019–19 (or any successor guidance), including the provisions related to whether a deemed distribution must be reported on Form 1099–R, and (2) the Secretary of Labor shall treat any such failure which is so self-corrected under subsection (a) as meeting the requirements of the Voluntary Fiduciary Correction Program of the Department of Labor if, with respect to the violation of the fiduciary standards of the Employee Retirement Income Security Act of 1974, there is a similar loan error eligible for correction under EPCRS and the loan error is corrected in such manner. (c) EPCRS for IRAs The Secretary shall expand the EPCRS to allow custodians of individual retirement plans (as defined in section 7701(a)(37) (1) waivers of the excise tax which would otherwise apply under section 4974 (2) under the self-correction component of the EPCRS, waivers of the 60-day deadline for a rollover where the deadline is missed for reasons beyond the reasonable control of the account owner, and (3) rules permitting a nonspouse beneficiary to return distributions to an inherited individual retirement plan described in section 408(d)(3)(C) (d) Required minimum distribution corrections The Secretary shall expand the EPCRS to allow plans to which such system applies and custodians and owners of individual retirement plans to self-correct, without an excise tax, any eligible inadvertent failures pursuant to which a distribution is made no more than 180 days after it was required to be made. (e) Additional safe harbors The Secretary shall expand the EPCRS to provide additional safe harbor means of correcting eligible inadvertent failures described in subsection (a), including safe harbor means of calculating the earnings which must be restored to a plan in cases where plan assets have been depleted by reason of an eligible inadvertent failure. (f) Eligible inadvertent failure For purposes of this section— (1) In general Except as provided in paragraph (2), the term eligible inadvertent failure (A) satisfy the standards set forth in section 4.04 of Revenue Procedure 2019–19 (or any successor guidance), or (B) satisfy similar standards in the case of an individual retirement plan. (2) Exception The term eligible inadvertent failure (g) Application of certain requirements for correcting errors This section shall not apply to any failure unless the correction of such failure under this section is made in conformity with the general principles that apply to corrections of such failures under the Internal Revenue Code of 1986, including regulations or other guidance issued thereunder and including those principles and corrections set forth in Revenue Procedure 2019–19 (or any successor guidance).” 309. Eliminate the first day of the month (a) In general Paragraph (4) of section 457(b) (4) which provides that compensation— (A) in the case of an eligible employer described in subsection (e)(1)(A), will be deferred only if an agreement providing for such deferral has been entered into before the compensation is currently available to the individual, and (B) in any other case, will be deferred for any calendar month only if an agreement providing for such deferral has been entered into before the beginning of such month, . (b) Effective date The amendment made by this section shall apply to taxable years beginning after the date of the enactment of this Act. 310. One-time election for qualified charitable distribution to split-interest entity; increase in qualified charitable distribution limitation (a) Increase in limitation Section 408(d)(8)(A) $100,000 $130,000 (b) One-Time election for qualified charitable distribution to split-Interest entity Section 408(d)(8) of such Code is amended by adding at the end the following new subparagraph: (F) One-time election for qualified charitable distribution to split-interest entity (i) In general A taxpayer may for a taxable year elect under this subparagraph to treat as meeting the requirement of subparagraph (B)(i) any distribution from an individual retirement account which is made directly by the trustee to a split-interest entity, but only if— (I) an election is not in effect under this subparagraph for a preceding taxable year, and (II) such distribution meets the requirements of clauses (iii) and (iv). (ii) Split-interest entity For purposes of this subparagraph, the term split-interest entity (I) a charitable remainder annuity trust (as defined in section 664(d)(1)), but only if such trust is funded exclusively by qualified charitable distributions, (II) a charitable remainder unitrust (as defined in section 664(d)(2)), but only if such unitrust is funded exclusively by qualified charitable distributions, or (III) a charitable gift annuity (as defined in section 501(m)(5)), but only if such annuity is funded exclusively by qualified charitable distributions and commences fixed payments of 5 percent or greater not later than 1 year from the date of funding. (iii) Contributions must be otherwise deductible A distribution meets the requirement of this clause only if— (I) in the case of a distribution to a charitable remainder annuity trust or a charitable remainder uni­trust, a deduction for the entire value of the remainder interest in the distribution for the benefit of a specified charitable organization would be allowable under section 170 (determined without regard to subsection (b) thereof and this paragraph), and (II) in the case of a charitable gift annuity, a deduction in an amount equal to the amount of the distribution reduced by the value of the annuity described in section 501(m)(5)(B) would be allowable under section 170 (determined without regard to subsection (b) thereof and this paragraph). (iv) Limitation on income interests A distribution meets the requirements of this clause only if— (I) no person holds an income interest in the split-interest entity other than the individual for whose benefit such account is maintained, the spouse of such individual, or both, and (II) the income interest in the split-interest entity is nonassignable. (v) Special rules (I) Charitable remainder trusts Notwithstanding section 664(b), distributions made from a trust described in subclause (I) or (II) of clause (ii) shall be treated as ordinary income in the hands of the beneficiary to whom the annuity described in section 664(d)(1)(A) or the payment described in section 664(d)(2)(A) is paid. (II) Charitable gift annuities Qualified charitable distributions made to fund a charitable gift annuity shall not be treated as an investment in the contract for purposes of section 72(c). . (c) Effective date The amendment made by this section shall apply to distributions made in taxable years ending after the date of the enactment of this Act. 311. Retirement plan distributions for charitable purpose (a) In general Section 402 (m) Distributions for charitable purposes (1) In general Gross income for any taxable year shall not include so much of the aggregate amount of qualified charitable distributions made with respect to a taxpayer during such taxable year which does not exceed the applicable amount. (2) Qualified charitable distribution For purposes of this subsection, the term qualified charitable distribution (A) which is made directly by the plan to an organization described in section 170(b)(1)(A) (other than any organization described in section 509(a)(3) or any fund or account described in section 4966(d)(2)), and (B) which is made on or after the date that the individual on whose behalf the distribution is made has attained age 70½. A distribution shall be treated as a qualified charitable distribution only to the extent that the distribution would be includible in gross income without regard to paragraph (1). (3) Special rules (A) In general Rules similar to the rules of subparagraphs (C), (E), and (F) of section 408(d)(8) shall apply for purposes of this subsection. (B) Application of section 72 Rules similar to the rules of section 408(d)(8)(D) shall apply for purposes of this subsection, by taking into account all amounts in the eligible retirement plan to which the taxpayer has a nonforfeitable right in lieu of all amounts in all individual retirement plans of the individual. (4) Applicable amount For purposes of this subsection, the term applicable amount (A) $130,000, over (B) the total amount of any distributions not includible in gross income of the taxpayer for the taxable year by reason of sections 403(d), 408(d)(8), and 457(e)(19). . (b) SEPs SIMPLEs Section 408(d)(8)(B) of such Code is amended by striking (other than a plan described in subsection (k) or (p)) (c) Certain annuity plans Section 403 of such Code is amended by adding at the end the following new subsection: (d) Distributions for charitable purposes The rules of section 402(m) shall apply to distributions under an annuity plan described in subsection (a) or an annuity contract described in subsection (b). . (d) 457 (b) Subsection (e) of section 457 of such Code is amended by adding at the end the following new paragraph: (19) Distributions for charitable purposes The rules of section 402(m) shall apply to distributions under an eligible deferred compensation plan established and maintained by an employer described in subsection (e)(1)(A). . (e) Effective date The amendments made by this section shall apply to distributions made in taxable years ending after the date of the enactment of this Act. 312. Distributions to firefighters (a) In general Subparagraph (A) of section 72(t)(10) 414(d)) 414(d)) or a distribution from a plan described in clause (iii), (iv), or (vi) of section 402(c)(8)(B) to an employee who provides firefighting services (b) Conforming amendment The heading of paragraph (10) of section 72(t) of such Code is amended— (1) by striking qualified (2) by striking in governmental plans (c) Effective date The amendments made by this section shall apply to distributions made after December 31, 2020. 313. Exclusion of certain disability-related first responder retirement payments (a) In general Part III of subchapter B of chapter 1 139C. Certain disability-related first responder retirement payments (a) In general In the case of an individual who receives qualified first responder retirement payments for any taxable year, gross income shall not include so much of such payments as do not exceed the annualized excludable disability amount with respect to such individual. (b) Qualified first responder retirement payments For purposes of this section, the term qualified first responder retirement payments (1) from a plan described in clause (iii), (iv), (v), or (vi) of section 402(c)(8)(B), and (2) in connection with such individual’s qualified first responder service. (c) Annualized excludable disability amount For purposes of this section— (1) In general The term annualized excludable disability amount (2) Service-connected excludable disability amount The term service-connected excludable disability amount (A) are not includible in such individual’s gross income under section 104(a)(1), (B) are received in connection with such individual’s qualified first responder service, and (C) terminate when such individual attains retirement age. (3) Special rule for partial-year payments In the case of an individual who only receives service-connected excludable disability amounts properly attributable to a portion of the 12-month period described in paragraph (1), such paragraph shall be applied by multiplying such amounts by the ratio of 365 to the number of days in such period to which such amounts were properly attributable. (d) Qualified first responder service For purposes of this section, the term qualified first responder service . (b) Clerical amendment The table of sections for part III of subchapter B of chapter 1 of such Code is amended by inserting after the item relating to section 139B the following new item: Sec. 139C. Certain disability-related first responder retirement payments. . (c) Effective date The amendments made by this section shall apply to amounts received with respect to taxable years beginning after the date of the enactment of this Act. 314. Individual retirement plan statute of limitations for excise tax on excess contributions, certain accumulations, and prohibited transactions Section 6501(l) (1) in paragraph (1), by inserting (other than with respect to an individual retirement plan)” after “section 4975 (2) by adding at the end the following new paragraph: (4) Individual retirement plans (A) In general For purposes of any tax imposed by section 4973, 4974, or 4975 in connection with an individual retirement plan, the return referred to in this section shall be the income tax return filed by the person on whom the tax under such section is imposed for the year in which the act (or failure to act) giving rise to the liability for such tax occurred. (B) Rule in case of individuals not required to file return In the case of a person who is not required to file an income tax return for such year— (i) the return referred to in this section shall be the income tax return that such person would have been required to file but for the fact that such person was not required to file such return, and (ii) the 3-year period referred to in subsection (a) with respect to the return shall be deemed to begin on the date by which the return would have been required to be filed (excluding any extension thereof). . 315. Requirement to provide paper statements in certain cases (a) In general Section 105(a)(2) of the Employee Retirement Income Security Act of 1974 ( 29 U.S.C. 1025(a)(2) (1) in subparagraph (A)(iv), by inserting subject to subparagraph (E), may be delivered (2) by adding at the end the following: (E) Provision of paper statements With respect to at least 1 pension benefit statement furnished for a calendar year with respect to an individual account plan under paragraph (1)(A), and with respect to at least 1 pension benefit statement furnished every 3 calendar years with respect to a defined benefit plan under paragraph (1)(B), such statement shall be furnished on paper in written form except— (i) in the case of a plan that furnishes such statement in accordance with section 2520.104b–1(c) of title 29, Code of Federal Regulations; or (ii) in the case of a plan that permits a participant or beneficiary to request that the statements referred to in the matter preceding clause (i) be furnished by electronic delivery, if the participant or beneficiary requests that such statements be delivered electronically and the statements are so delivered. . (b) Implementation (1) In general The Secretary of Labor shall, not later than July 1, 2021, update section 2520.104b–1(c) of title 29, Code of Federal Regulations, to provide that a plan may furnish the statements referred to in subparagraph (E) of section 105(a)(2) by electronic delivery only if, in addition to meeting the other requirements under the regulations— (A) such plan furnishes each participant, including participants described in subparagraph (B), a one-time initial notice on paper in written form, prior to the electronic delivery of any pension benefit statement, of their right to request that all documents required to be disclosed under title I of the Employee Retirement Income Security Act of 1974 be furnished on paper in written form; and (B) such plan furnishes each participant who is separated from service with at least 1 pension benefit statement on paper in written form for each calendar year. (2) Other guidance In implementing the amendment made by subsection (a) with respect to a plan that discloses required documents or statements electronically, in accordance with applicable guidance governing electronic disclosure by the Department of Labor (with the exception of section 2520.104b–1(c) of title 29, Code of Federal Regulations), the Secretary of Labor shall, not later than July 1, 2021, update such guidance to the extent necessary to ensure that— (A) a participant or beneficiary under such a plan is permitted the opportunity to request that any disclosure required to be delivered on paper under applicable guidance by the Department of Labor shall be furnished by electronic delivery; (B) each paper statement furnished under such a plan pursuant to the amendment shall include— (i) an explanation of how to request that all such statements, and any other document required to be disclosed under title I of the Employee Retirement Income Security Act of 1974, be furnished by electronic delivery; and (ii) contact information for the plan sponsor, including a telephone number; (C) the plan may not charge any fee to a participant or beneficiary for the delivery of paper statements; (D) each paper pension benefit statement shall identify each plan document required to be disclosed and shall include information about how a participant or beneficiary may access each such document; (E) each document required to be disclosed that is furnished by electronic delivery under such a plan shall include an explanation of how to request that all such documents be furnished on paper in written form; (F) a plan is permitted to furnish a duplicate electronic statement in any case in which the plan furnishes a paper statement; and (G) furnishment of such a paper pension benefit statement may be combined, in one document, with a notice explaining electronic delivery of other disclosure documents as a default selection and the right to opt out of such electronic delivery, but only if such paper statement is furnished prior to the electronic delivery of any such statement. (c) Effective date The amendment made by subsection (a) shall apply with respect to plan years beginning after December 31, 2021. IV Technical Amendments 401. Amendments relating to Setting Every Community Up for Retirement Enhancement Act of 2019 (a) Technical amendments (1) Amendment relating to section 114 Section 401(a)(9)(C)(iii) employee to whom clause (i)(II) applies employee (other than an employee to whom clause (i)(II) does not apply by reason of clause (ii)) (2) Amendment relating to section 116 Section 4973(b) Such term shall not include any designated nondeductible contribution (as defined in subparagraph (C) of section 408(o)(2)) which does not exceed the nondeductible limit under subparagraph (B) thereof by reason of an election under section 408(o)(5). (3) Effective date The amendments made by this section shall take effect as if included in section of the Setting Every Community Up for Retirement Enhancement Act of 2019 to which the amendment relates. (b) Clerical amendment Section 72(t)(2)(H)(vi)(IV) 403(b)(7)(A)(ii) 403(b)(7)(A)(i) V Administrative Provisions 501. Provisions relating to plan amendments (a) In general If this section applies to any retirement plan or contract amendment— (1) such retirement plan or contract shall be treated as being operated in accordance with the terms of the plan during the period described in subsection (b)(2)(A); and (2) except as provided by the Secretary of the Treasury (or the Secretary’s delegate), such retirement plan shall not fail to meet the requirements of section 411(d)(6) (b) Amendments to which section applies (1) In general This section shall apply to any amendment to any retirement plan or annuity contract which is made— (A) pursuant to any amendment made by this Act or pursuant to any regulation issued by the Secretary of the Treasury or the Secretary of Labor (or a delegate of either such Secretary) under this Act; and (B) on or before the last day of the first plan year beginning on or after January 1, 2022. In the case of a governmental plan (as defined in section 414(d) 2024 2022 (2) Conditions This section shall not apply to any amendment unless— (A) during the period— (i) beginning on the date the legislative or regulatory amendment described in paragraph (1)(A) takes effect (or in the case of a plan or contract amendment not required by such legislative or regulatory amendment, the effective date specified by the plan); and (ii) ending on the date described in paragraph (1)(B) (as modified by the second sentence of paragraph (1)) (or, if earlier, the date the plan or contract amendment is adopted), the plan or contract is operated as if such plan or contract amendment were in effect; and (B) such plan or contract amendment applies retroactively for such period.

Summary: Securing a Strong Retirement Act of 2020 This bill makes various changes with respect to employer-sponsored retirement plans, including providing for the automatic enrollment of employees in certain plans and increasing the age at which participants are required to begin receiving mandatory distributions.