‘‘(1) an annual reminder notice of such partici-
pant’s eligibility to participate in such plan and any 
applicable election deadlines under the plan; and 
‘‘(2) any document requested by such partici-
pant that the participant would be entitled to receive 
notwithstanding this section. 
‘‘(b) UNENROLLED PARTICIPANT.—For purposes of 
this section, the term ‘unenrolled participant’ means an 
employee who— 
‘‘(1) is eligible to participate in an individual 
account plan; 
‘‘(2) has received the summary plan description 
pursuant to section 104(b) and any other eligibility 
notices 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; 
‘‘(4) does not have a balance in the plan; and 
‘‘(5) satisfies such other criteria as the Sec-
retary of Labor may determine appropriate, as pre-
scribed in guidance issued in consultation with the 
Secretary of the Treasury. 
For purposes of this section, any eligibility to participate 
in the plan following any period for which such employee 
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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’ means a 
notice provided in accordance with section 2520.104b–1 
of title 29, Code of Federal Regulations (or any successor 
regulation), which— 
‘‘(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 and rights under the 
plan, with a focus on employer contributions 
and vesting provisions; and 
‘‘(3) provides such information in a prominent 
manner calculated to be understood by the average 
participant.’’. 
(2) CLERICAL AMENDMENT.—The table of con-
tents in section 1 of the Employee Retirement In-
come Security Act of 1974 is amended by striking 
the item relating to section 111 and by inserting 
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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.’’. 
(b) AMENDMENT OF INTERNAL REVENUE CODE OF 
1986.—Section 414 of the Internal Revenue Code of 1986 
is amended by adding at the end the following new sub-
section: 
‘‘(aa) ELIMINATING UNNECESSARY PLAN REQUIRE-
MENTS 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 de-
scribed in subparagraphs (A) and (B)) shall be re-
quired to be furnished under this title to any 
unenrolled participant if the unenrolled participant 
receives— 
‘‘(A) an annual reminder notice 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 par-
ticipant that the participant would be entitled 
to receive notwithstanding this subsection. 
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‘‘(2) UNENROLLED
PARTICIPANT.—For pur-
poses of this subsection, the term ‘unenrolled partici-
pant’ means an employee who— 
‘‘(A) is eligible to participate in a defined 
contribution plan, 
‘‘(B) has received the summary plan de-
scription pursuant to section 104(b) of the Em-
ployee Retirement Income Security Act of 1974 
and any other eligibility notices in connection 
with such participant’s initial eligibility to par-
ticipate in such plan, 
‘‘(C) is not participating in such plan, 
‘‘(D) does not have a balance in the plan, 
and 
‘‘(E) satisfies such other criteria as the 
Secretary of the Treasury may determine ap-
propriate, as prescribed in guidance issued in 
consultation with the Secretary of Labor. 
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 pur-
poses of this subsection, the term ‘annual reminder 
notice’ means the notice described in section 111(c) 
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of the Employee Retirement Income Security Act of 
1974.’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to plan years beginning after De-
cember 31, 2021. 
SEC. 11. RECOVERY OF RETIREMENT PLAN OVERPAY-
MENTS. 
(a) OVERPAYMENTS UNDER ERISA.—Section 206 of 
the Employee Retirement Income Security Act of 1974 
(29 U.S.C. 1056) is amended by adding at the end the 
following new subsection: 
‘‘(h) SPECIAL RULES APPLICABLE
TO BENEFIT 
OVERPAYMENTS.— 
‘‘(1) GENERAL RULE.—In the case of an inad-
vertent 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, pro-
vided that the amount needed to prevent or 
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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 require-
ments 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 contrib-
uting employer acting in a fiduciary capacity) 
whose breach of its fiduciary duties resulted in 
such overpayment, provided that if the plan has 
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established prudent procedures to prevent and 
minimize overpayment of benefits and the rel-
evant plan fiduciaries have followed such proce-
dures, an inadvertent benefit overpayment will 
not give rise to a breach of fiduciary duty. 
‘‘(2) REDUCTION
IN
FUTURE
BENEFIT
PAY-
MENTS
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 contribu-
tions to a plan to meet the minimum funding stand-
ards 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, 
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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 for any period be-
fore or after the date of correction of such over-
payment. 
‘‘(B) If the plan seeks to recoup past over-
payments 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 cal-
endar 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. 
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Alternatively, if the plan seeks to recoup past 
overpayments of a non-decreasing periodic ben-
efit 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 over-
payments of a benefit other than a non-decreas-
ing periodic benefit, the plan satisfies require-
ments developed by the Secretary for purposes 
of this subparagraph. 
‘‘(D) Efforts to recoup overpayments are— 
‘‘(i) not accompanied by threats of 
litigation, unless the responsible plan fidu-
ciary reasonably believes it could prevail in 
a civil action brought in Federal or State 
court to recoup the overpayments, and 
‘‘(ii) not made through a collection 
agency or similar third party, unless the 
participant or beneficiary ignores or rejects 
efforts to recoup the overpayment following 
either a final judgment in Federal or State 
court or a settlement between the partici-
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pant or beneficiary and the plan, in either 
case authorizing such recoupment. 
‘‘(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 no-
tified in writing of the error. 
‘‘(G) A participant or beneficiary from 
whom recoupment is sought is entitled to con-
test all or part of the recoupment pursuant to 
the plan’s claims procedures. 
‘‘(H) In determining the amount of 
recoupment to seek, the responsible plan fidu-
ciary may take into account the hardship that 
recoupment likely would impose on the partici-
pant or beneficiary. 
‘‘(5) 
EFFECT
OF
CULPABILITY.—Subpara-
graphs (A) through (F) of paragraph (4) shall not 
apply to protect a participant or beneficiary who is 
culpable. For purposes of this paragraph, a partici-
pant or beneficiary is culpable if the individual bears 
responsibility for the overpayment (such as through 
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misrepresentations or omissions that led to the over-
payment), or if the individual knew, or had good 
reason to know under the circumstances, that the 
benefit payment or payments were materially in ex-
cess of the correct amount. Notwithstanding the pre-
ceding sentence, an individual is not culpable merely 
because the individual believed the benefit payment 
or payments were or might be in excess of the cor-
rect 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 partici-
pant or beneficiary, efforts to recoup overpayments 
shall not be made through threats of litigation, un-
less a lawyer for the plan could make the representa-
tions required under Rule 11 of the Federal Rules 
of Civil Procedure if the litigation were brought in 
Federal court.’’. 
(b) OVERPAYMENTS UNDER INTERNAL REVENUE 
CODE OF 1986.— 
(1) QUALIFICATION
REQUIREMENTS.—Section 
414 of the Internal Revenue Code of 1986, is fur-
ther amended by adding at the end the following 
new subsection: 
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‘‘(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 
reduce past or future benefit payments to af-
fected participants and beneficiaries in order to 
adjust for prior inadvertent benefit overpay-
ments. 
‘‘(2) REDUCTION
IN
FUTURE
BENEFIT
PAY-
MENTS
AND
RECOVERY
FROM
RESPONSIBLE 
PARTY.—Paragraph (1) shall not fail to apply to a 
plan merely because, after discovering a benefit over-
payment, such plan— 
‘‘(A) reduces future benefit payments to 
the correct amount provided for under the 
terms of the plan, or 
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‘‘(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 contribu-
tions to a plan to meet the minimum funding stand-
ards under sections 412 and 430 or to prevent or re-
store 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 of the Treasury for re-
couping benefits previously paid or allocations pre-
viously made in excess of such limitations. 
‘‘(5) COORDINATION WITH OTHER QUALIFICA-
TION REQUIREMENTS.—The Secretary of the Treas-
ury may issue regulations or other guidance of gen-
eral applicability specifying how benefit overpay-
ments and their recoupment or non-recoupment 
from a participant or beneficiary shall be taken into 
account for purposes of satisfying any requirement 
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applicable to a plan to which paragraph (1) ap-
plies.’’. 
(2) ROLLOVERS.—Section 402(c) of such Code 
is amended by adding at the end the following new 
paragraph: 
‘‘(12) In the case of an inadvertent benefit 
overpayment 
from 
a 
plan 
to 
which 
section 
414(bb)(1) applies that 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 roll-
over 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 mak-
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ing 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 ben-
eficiary who received such overpayment, such dispute 
shall be subject to the claims 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 over-
payment on behalf of the participant or beneficiary 
(and shall be entitled to treat such overpayment as 
plan assets) pending the outcome of such proce-
dures.’’. 
(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 ENACT-
MENT.—Plans, fiduciaries, employers, and plan sponsors 
are entitled to rely on— 
(1) a good faith interpretation of then existing 
administrative guidance for inadvertent benefit over-
payment recoupments and recoveries that com-
menced before the date of enactment of this Act, 
and 
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(2) determinations made before the date of en-
actment of this Act by the responsible plan fidu-
ciary, 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 pay-
ments 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 overpay-
ment that resulted from a breach of its fiduciary duties. 
SEC. 12. IMPROVING COVERAGE FOR PART-TIME WORKERS. 
(a) AMENDMENT OF EMPLOYEE RETIREMENT IN-
COME SECURITY ACT OF 1974.— 
(1) IN GENERAL.—Section 202 of the Employee 
Retirement Income Security Act of 1974 (29 U.S.C. 
1052) is amended by adding at the end the following 
new subsection: 
‘‘(c) SPECIAL RULE FOR CERTAIN PART-TIME EM-
PLOYEES.— 
‘‘(1) IN
GENERAL.—A pension plan that in-
cludes either a qualified cash or deferred arrange-
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pamtmann on DSKBC07HB2PROD with BILLS
ment (as defined in section 401(k) of the Internal 
Revenue Code of 1986) or a salary reduction agree-
ment (as described in section 403(b) of such Code) 
shall not require, as a condition of participation in 
the arrangement or agreement, that an employee 
complete a period of service with the employer (or 
employers) maintaining the plan extending beyond 
the close of the earlier of— 
‘‘(A) the period permitted under subsection 
(a)(1) (determined without regard to subpara-
graph (B)(i) thereof); or 
‘‘(B) the first 24-month period— 
‘‘(i) consisting of 2 consecutive 12- 
month periods during each of which the 
employee has at least 500 hours of service; 
and 
‘‘(ii) by the close of which the em-
ployee has attained the age of 21. 
‘‘(2) EXCEPTION.—Paragraph (1)(B) shall not 
apply to any employee described in section 410(b)(3) 
of the Internal Revenue Code of 1986. 
‘‘(3) COORDINATION WITH OTHER RULES.— 
‘‘(A) IN GENERAL.—In the case of employ-
ees who are eligible to participate in the ar-
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pamtmann on DSKBC07HB2PROD with BILLS
rangement or agreement solely by reason of 
paragraph (1)(B): 
‘‘(i) EXCLUSIONS.—An employer may 
elect to exclude such employees from the 
application of subsections (a)(4), (k)(3), 
(k)(12), 
(k)(13), 
(k)(15)(B)(i)(I), 
and 
(m)(2) of section 401 of the Internal Rev-
enue Code of 1986 and section 410(b) of 
such Code. 
‘‘(ii) TIME OF PARTICIPATION.—The 
rules of subsection (a)(4) shall apply to 
such employees. 
‘‘(B) TOP-HEAVY
RULES.—An employer 
may elect to exclude all employees who are eligi-
ble to participate in a plan maintained by the 
employer solely by reason of paragraph (1)(B) 
from the application of the vesting and benefit 
requirements under subsections (b) and (c) of 
section 416 of the Internal Revenue Code of 
1986. 
‘‘(4) 12-MONTH PERIOD.—For purposes of this 
subsection, 12-month periods shall be determined in 
the same manner as under the last sentence of sub-
section (a)(3)(A), except that 12-month periods be-
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ginning before January 1, 2021, shall not be taken 
into account.’’. 
(2) VESTING.—Section 203(b) of the Employee 
Retirement Income Security Act of 1974 (29 U.S.C. 
1053(a)) is amended by redesignating paragraph (4) 
as paragraph (5) and by inserting after paragraph 
(3) the following new paragraph: 
‘‘(4) PART-TIME EMPLOYEES.—For purposes of 
determining whether an employee who is eligible to 
participate in a qualified cash or deferred arrange-
ment or a salary reduction agreement under a plan 
solely by reason of section 202(c)(1)(B) has a non-
forfeitable right to employer contributions— 
‘‘(A) except as provided in subparagraph 
(B), each 12-month period for which the em-
ployee has at least 500 hours of service shall be 
treated as a year of service; 
‘‘(B) paragraph (3) shall be applied by 
substituting ‘at least 500 hours of service’ for 
‘more than 500 hours of service’ in subpara-
graph (A) thereof; and 
‘‘(C) 12-month periods occurring before 
the 24-month period described in section 
202(c)(1)(B) shall not be treated as years of 
service. 
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For purposes of this paragraph, 12-month periods 
shall be determined in the same manner as under 
the last sentence of section 202(a)(3)(A), except that 
12-month periods beginning before January 1, 2021, 
shall not be taken into account.’’. 
(3) PRE-2021 SERVICE.—Section 112(b) of the 
Setting Every Community Up for Retirement En-
hancement Act of 2019 (26 U.S.C. 401 note) is 
amended by striking ‘‘section 401(k)(2)(D)(ii)’’ and 
inserting ‘‘paragraphs (2)(D)(ii) and (15)(B)(iii) of 
section 401(k)’’. 
(b) CONFORMING AMENDMENTS TO INTERNAL REV-
ENUE CODE OF 1986.— 
(1) IN GENERAL.—Section 410(a) of the Inter-
nal Revenue Code of 1986 is amended by adding at 
the end the following new paragraphs: 
‘‘(6) SPECIAL RULE FOR CERTAIN PART-TIME 
EMPLOYEES.— 
‘‘(A) IN GENERAL.—In the case of a plan 
that includes either a qualified cash or deferred 
arrangement (as defined in section 401(k)), a 
trust of which such plan is a part shall not con-
stitute a qualified trust under section 401(a) if 
the plan requires, as a condition of participa-
tion in the plan or arrangement, that an em-
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ployee complete a period of service with the em-
ployer (or employers) maintaining the plan ex-
tending beyond the close of the earlier of— 
‘‘(i) the period permitted under para-
graph (1) (determined without regard to 
subparagraph (B)(i) thereof), or 
‘‘(ii) the first 24-month period— 
‘‘(I) consisting of 2 consecutive 
12-month periods during each of 
which the employee has at least 500 
hours of service, and 
‘‘(II) by the close of which the 
employee has attained the age of 21. 
‘‘(B) EXCEPTION.—Subparagraph (A)(ii) 
shall not apply to any employee described in 
section 410(b)(3). 
‘‘(C) 
COORDINATION
WITH
OTHER 
RULES.— 
‘‘(i) IN GENERAL.—In the case of em-
ployees who are eligible to participate in 
the arrangement or agreement solely by 
reason of subparagraph (A)(ii)— 
‘‘(I) EXCLUSIONS.—An employer 
may elect to exclude such employees 
from the application of subsection (b) 
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and of subsections (a)(4), (k)(3), 
(k)(12), (k)(13), (k)(15)(B)(i)(I), and 
(m)(2) of section 401. 
‘‘(II) TIME OF PARTICIPATION.— 
The rules of paragraph (4) shall apply 
to such employees. 
‘‘(ii) TOP-HEAVY
RULES.—An em-
ployer may elect to exclude all employees 
who are eligible to participate in a plan 
maintained by the employer solely by rea-
son of subparagraph (A)(ii) from the appli-
cation of the vesting and benefit require-
ments under subsections (b) and (c) of sec-
tion 416. 
‘‘(D) 12-MONTH PERIOD.—For purposes of 
this paragraph, 12-month periods shall be de-
termined in the same manner as under the last 
sentence of paragraph (3)(A), except that 12- 
month periods beginning before January 1, 
2021, shall not be taken into account.’’. 
(2) VESTING.—Section 410(a) of the Internal 
Revenue Code of 1986 is amended by adding at the 
end the following: 
‘‘(6) PART-TIME EMPLOYEES.—For purposes of 
determining whether an employee who is eligible to 
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participate in a qualified cash or deferred arrange-
ment or a salary reduction agreement under a plan 
solely by reason of paragraph (6)(A)(ii) has a non-
forfeitable right to employer contributions— 
‘‘(A) except as provided in subparagraph 
(B), each 12-month period for which the em-
ployee has at least 500 hours of service shall be 
treated as a year of service, 
‘‘(B) section 411(a)(6) shall be applied by 
substituting ‘at least 500 hours of service’ for 
‘more than 500 hours of service’ in subpara-
graph (A) thereof, and 
‘‘(C) 12-month periods occurring before 
the 24-month period described in paragraph 
(6)(A)(ii) shall not be treated as years of serv-
ice. 
For purposes of this paragraph, 12-month periods 
shall be determined in the same manner as under 
paragraph (6)(D).’’. 
Æ 
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