Improving Access to Retirement Savings Act

To amend the Internal Revenue Code of 1986 to increase retirement savings, to improve retirement plan administration, and for other purposes. 1. Short title This Act may be cited as the Improving Access to Retirement Savings Act 2. 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 1 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 subsection 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 a State, a political subdivision of a State, or an agency or instrumentality thereof. . (b) Annual registration for 403 (b) Section 6057 (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 ( 29 U.S.C. 1002(43)(A) (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 Paragraphs (43)(B)(v)(II) and (44)(A)(i)(I) of section 3 of such Act ( 29 U.S.C. 1002 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 ( 29 U.S.C. 1002(43)(B)(ii) (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 (1) 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) (2) Educational outreach to employers exempt from tax The Secretary of the Treasury (or the Secretary's designee), in consultation with the Secretary of Labor, shall provide education and outreach to increase awareness among employers which are exempt from tax under section 501(a) of such Code that— (A) multiple employer plans are subject to the Employee Retirement Income Security Act of 1974, and (B) each employer is a plan sponsor with respect to its employees participating in the multiple employer plan and, as such, has certain fiduciary duties with respect to the plan and to its employees. (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, 2022. (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 the Internal Revenue Code of 1986 with respect to one employer (and its employees) in the case of a plan to which section 403(b)(15) applies. 3. 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 section 401(a), 403(b), 408, or 457(b), as applicable, solely by reason of a corrected error. (2) Corrected error For purposes of this subsection, the term corrected error (A) is corrected by the date which is 9½ months after the end of the plan year during which the failure occurred, (B) is corrected in a manner which 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 which 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 to the correction of any error with respect to which the date described in section 414(aa)(2)(A) 4. 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. 5. Amendments to increase benefit accruals under plan for previous plan year allowed until employer tax return due date (a) In general Section 401(b) (3) Retroactive plan amendments that increase benefit accruals If— (A) an employer amends a stock bonus, pension, profit-sharing, or annuity plan to increase benefits accrued under the plan effective for the preceding plan year (other than increasing the amount of matching contributions (as defined in subsection (m)(4)(A))), (B) such amendment would not otherwise cause the plan to fail to meet any of the requirements of this subchapter, and (C) such amendment is adopted before the time prescribed by law for filing the return of the employer for a taxable year (including extensions thereof) during which such amendment is effective, the employer may elect to treat such amendment as having been adopted as of the last day of the plan year in which the amendment is effective. . (b) Effective date The amendments made by this section shall apply to plan years beginning after December 31, 2022.

Summary: Improving Access to Retirement Savings Act This bill allows employers who establish a tax-exempt 403(b) pension plan to participate in a multiple employer plan (MEP) and to take the small employer pension plan start-up tax credit for their first three years of participation in a MEP. The bill also establishes a safe harbor to allow certain pension plans to correct errors in administering automatic enrollment and escalation features for plans enrolling in a MEP, if such errors are corrected within a specified time period in a manner favorable to plan participants. It also permits employers that amend a stock bonus, pension, profit sharing, or annuity plan for a previous plan year to increase benefits accruals to elect to treat such amendment as having been adopted at the end of the current plan year.