Auto Reenroll Act of 2023

To amend the Internal Revenue Code of 1986 and the Employee Retirement Income Security Act of 1974 to allow for periodic automatic reenrollment under qualified automatic contribution arrangements, and for other purposes. 1. Short title This Act may be cited as the Auto Reenroll Act of 2023 2. Automatic reenrollment under qualified automatic contribution arrangements and eligible automatic contribution arrangements (a) Qualified automatic contribution arrangements (1) In general Section 401(k)(13)(C) (v) Periodic automatic deferral permitted A qualified automatic contribution arrangement shall not fail to be treated as meeting the requirements of this subparagraph solely by reason of the fact that, under the arrangement— (I) an election by an employee under clause (ii)(I) terminates after not more than 3 years (but not less than 1 year), and (II) such employee is treated as having made an election under clause (i) after such termination unless such employee makes a new affirmative election under clause (ii). A termination described in subclause (I) may be made at one time for a plan year for all employees who have made an election described in such subclause. . (2) Coordination with rule for current employees (A) In general Clause (iv) of section 401(k)(13)(C) of such Code is amended by striking either to participate in the arrangement or not to participate in the arrangement to participate in the arrangement (B) Special rule for previously disregarded employees (i) In general For purposes of applying section 401(k)(13)(C)(v) (ii) Previously disregarded employee For purposes of this subparagraph, the term previously disregarded employee section 401(k)(13)(C)(i) (b) Eligible automatic contribution arrangements Section 414(w)(3) (1) by redesignating subparagraphs (A) through (C) as clauses (i) through (iii), respectively, and moving the margins of such clauses 2 ems to the right; (2) by striking arrangement arrangement (A) In general For purposes of ; and (3) by adding at the end the following new subparagraph: (B) Periodic automatic deferral permitted An arrangement shall not fail to be treated as an eligible automatic contribution arrangement under this subsection solely by reason of the fact that, under the arrangement— (i) an election by an employee under subparagraph (A)(ii) not to have contributions made terminates after not more than 3 years (but not less than 1 year), and (ii) such employee is treated as having made an election under subparagraph (A)(ii) to make contributions at the uniform percentage level described in such subparagraph after such termination unless such employee makes a new election not to so make such contributions. A termination described in clause (i) may be made at one time for a plan year for all employees who have made an election described in such clause. . (c) Conforming amendment Section 514(e)(2) of the Employee Retirement Income Security Act of 1974 ( 29 U.S.C. 1144(e)(2) (1) by redesignating subparagraphs (A) through (C) as clauses (i) through (iii), respectively; (2) by striking (2) For purposes of (2)(A) For purposes of (3) by adding at the end the following: (B) An arrangement shall not fail to be treated as an automatic contribution arrangement under this subsection solely by reason of the fact that under the arrangement— (i) an election by an employee under subparagraph (A)(ii) not to have contributions made terminates after not more than 3 years (but not less than 1 year), and (ii) such employee is treated as having made an election under subparagraph (A)(ii) to make contributions at the uniform percentage level described in such subparagraph after such termination unless such employee makes a new election not to so make such contributions. A termination described in clause (i) may be made at one time for a plan year for all employees who have made an election described in such clause, regardless of individual employee dates of enrollment. . (d) Effective date The amendments made by this section shall apply to plan years beginning after the date of the enactment of this Act. (e) No inference The amendments made by this section shall not be construed to create any inference with respect to— (1) the application of section 401(k)(13)(C) (2) the application of section 401(k)(13)(C)(v)

Summary: Auto Reenroll Act of 2023 This bill allows sponsors of automatic contribution arrangements to reenroll their employees in such arrangements at least once every three years. The purpose of the bill is to increase employee participation in tax-exempt pension plans and other retirement arrangements.