I 
115TH CONGRESS 
1ST SESSION H. R. 4637 
To amend the Internal Revenue Code of 1986 to encourage retirement savings 
by modifying requirements with respect to employer-established IRAs, 
and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
DECEMBER 13, 2017 
Mr. KIND (for himself and Mr. REICHERT) introduced the following bill; which 
was referred to the Committee on Ways and Means, and in addition to 
the Committee on Education and the Workforce, for a period to be subse-
quently determined by the Speaker, in each case for consideration of such 
provisions as fall within the jurisdiction of the committee concerned 
A BILL 
To amend the Internal Revenue Code of 1986 to encourage 
retirement savings by modifying requirements with re-
spect to employer-established IRAs, and for other pur-
poses. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 
(a) SHORT TITLE.—This Act may be cited as the 
‘‘Small businesses Add Value for Employees Act of 2017’’ 
or the ‘‘SAVE Act of 2017’’. 
VerDate Sep 11 2014 
20:52 Dec 19, 2017
Jkt 079200
PO 00000
Frm 00001
Fmt 6652
Sfmt 6201
E:\BILLS\H4637.IH
H4637
sradovich on DSK3GMQ082PROD with BILLS
(b) TABLE OF CONTENTS.—The table of contents for 
this Act is as follows: 
Sec. 1. Short title; table of contents. 
Sec. 2. Elimination of restriction on SIMPLE IRA rollovers. 
Sec. 3. Allowing mid-year SIMPLE IRA plan termination. 
Sec. 4. Elimination of higher penalty on early SIMPLE IRA distributions. 
Sec. 5. Increase in contributions allowed for SIMPLE IRA. 
Sec. 6. SIMPLE 401(k) parity for additional nonelective employer contribu-
tions. 
Sec. 7. Automatic deferral IRAs. 
Sec. 8. Modification of automatic enrollment safe harbor. 
Sec. 9. Secure deferral arrangements. 
Sec. 10. Credit for employers with respect to modified safe harbor require-
ments. 
Sec. 11. Modification of regulations. 
Sec. 12. Limited transfer of unused balance in flexible spending arrangement. 
Sec. 13. Prior years compensation taken into account in determining maximum 
retirement savings deduction. 
Sec. 14. Expanding small employer pension plan startup cost credit. 
Sec. 15. Financial education. 
Sec. 16. Small employer plans. 
Sec. 17. Modification of ERISA rules relating to multiple employer defined con-
tribution plans. 
Sec. 18. Clarification of treatment of individual retirement plans with payroll 
deduction. 
Sec. 19. Disclosure regarding lifetime income. 
Sec. 20. Lifetime income safe harbor. 
SEC. 2. ELIMINATION OF RESTRICTION ON SIMPLE IRA 
ROLLOVERS. 
(a) IN GENERAL.—Section 408(d)(3) of the Internal 
Revenue Code of 1986 is amended by striking subpara-
graph (G). 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to distributions in taxable years 
beginning after the date of the enactment of this Act. 
VerDate Sep 11 2014 
21:40 Dec 15, 2017
Jkt 079200
PO 00000
Frm 00002
Fmt 6652
Sfmt 6201
E:\BILLS\H4637.IH
H4637
sradovich on DSK3GMQ082PROD with BILLS
SEC. 3. ALLOWING MID-YEAR SIMPLE IRA PLAN TERMI-
NATION. 
(a) IN GENERAL.—Section 408(p) of the Internal 
Revenue Code of 1986 is amended by adding at the end 
the following new paragraph: 
‘‘(11) SPECIAL RULES RELATING TO MID-YEAR 
TERMINATION.— 
‘‘(A) IN
GENERAL.—An employer may 
elect to terminate (in such form and manner as 
the Secretary may provide) the qualified salary 
reduction arrangement of the employer at any 
time during the year. 
‘‘(B) PRORATION
AND
APPLICATION
OF 
QUALIFIED PLAN LIMITATION.—In the case of a 
year during which an employer terminates a 
qualified salary reduction arrangement before 
the end of such year— 
‘‘(i) the applicable dollar amount de-
termined under paragraph (2)(E) for such 
year and the applicable dollar amount de-
termined under section 414(v)(2)(B)(ii) for 
such year shall both be prorated to the 
date of such termination, 
‘‘(ii) for purposes of determining the 
compensation of an employee for such ar-
rangement for such year, the year of such 
VerDate Sep 11 2014 
03:34 Dec 15, 2017
Jkt 079200
PO 00000
Frm 00003
Fmt 6652
Sfmt 6201
E:\BILLS\H4637.IH
H4637
sradovich on DSK3GMQ082PROD with BILLS
termination shall be treated as ending on 
the date of such termination, and 
‘‘(iii) subparagraph (D) of paragraph 
(2) shall not apply with respect to a quali-
fied plan maintained in such year only 
after the date of such termination. 
‘‘(C) MATCHING
CONTRIBUTION.—Termi-
nation of an arrangement under subparagraph 
(A) shall not be construed to modify the re-
quirement of subparagraph (A)(iii) (with re-
spect to any elective employer contributions) or 
(B) (with respect to nonelective contributions) 
of paragraph (2) made by the employer on be-
half of an employee during the portion of such 
year the qualified salary reduction arrangement 
is in effect.’’. 
(b) EFFECTIVE DATE.—The amendments made by 
this section shall apply to years beginning after the date 
of the enactment of this Act. 
SEC. 4. ELIMINATION OF HIGHER PENALTY ON EARLY SIM-
PLE IRA DISTRIBUTIONS. 
(a) IN GENERAL.—Section 72(t) of the Internal Rev-
enue Code of 1986 is amended by striking paragraph (6). 
VerDate Sep 11 2014 
03:34 Dec 15, 2017
Jkt 079200
PO 00000
Frm 00004
Fmt 6652
Sfmt 6201
E:\BILLS\H4637.IH
H4637
sradovich on DSK3GMQ082PROD with BILLS
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to distributions in taxable years 
beginning after the date of the enactment of this Act. 
SEC. 5. INCREASE IN CONTRIBUTIONS ALLOWED FOR SIM-
PLE IRA. 
(a) ADDITIONAL NONELECTIVE EMPLOYER CON-
TRIBUTIONS ALLOWED.— 
(1) IN GENERAL.—Section 408(p)(2)(A) of the 
Internal Revenue Code of 1986 is amended by strik-
ing ‘‘and’’ at the end of clause (iii), by redesignating 
clause (iv) as clause (v), and by inserting after 
clause (iii) the following new clause: 
‘‘(iv) the employer may make, in addi-
tion to any other contribution under this 
paragraph, nonelective contributions which 
meet the requirements of subparagraph 
(F), and’’. 
(2) REQUIREMENTS RELATING TO ADDITIONAL 
NONELECTIVE CONTRIBUTIONS.—Section 408(p)(2) 
of such Code is amended by adding at the end the 
following new subparagraph: 
‘‘(F) REQUIREMENTS RELATING TO ADDI-
TIONAL NONELECTIVE CONTRIBUTIONS UNDER 
SUBPARAGRAPH (A)(iv).— 
VerDate Sep 11 2014 
03:34 Dec 15, 2017
Jkt 079200
PO 00000
Frm 00005
Fmt 6652
Sfmt 6201
E:\BILLS\H4637.IH
H4637
sradovich on DSK3GMQ082PROD with BILLS
‘‘(i) IN
GENERAL.—Nonelective con-
tributions meet the requirements of this 
subparagraph if— 
‘‘(I) such contributions do not ex-
ceed more than 10 percent of com-
pensation (subject to the limitation 
described in subparagraph (B)(ii)) for 
each employee who is eligible to par-
ticipate in the arrangement and who 
has at least $5,000 of compensation 
from the employer for the year, and 
‘‘(II) 
such 
contributions 
are 
made either as a uniform percentage 
of compensation or a uniform dollar 
amount for all participants. 
‘‘(ii) PERMITTED
DISPARITY
RULES 
NOT
APPLICABLE.—Section 401(l) shall 
not apply for purposes of determining 
whether the requirements of clause (i) are 
met.’’. 
(3) 
CONFORMING
AMENDMENT.—Section 
408(p)(2)(A)(v) of such Code, as redesignated by 
this section, is amended by striking ‘‘clause (i) or 
(iii)’’ and inserting ‘‘clause (i), (iii), or (iv)’’. 
VerDate Sep 11 2014 
03:34 Dec 15, 2017
Jkt 079200
PO 00000
Frm 00006
Fmt 6652
Sfmt 6201
E:\BILLS\H4637.IH
H4637
sradovich on DSK3GMQ082PROD with BILLS
(b) INCREASE IN ELECTIVE CONTRIBUTION LIMITA-
TION.—Section 408(p)(2)(E) is amended to read as fol-
lows: 
‘‘(E) APPLICABLE DOLLAR AMOUNT.—For 
purposes of subparagraph (A)(ii), the applicable 
dollar amount shall be the applicable dollar 
amount in effect under section 402(g)(1).’’. 
(c) SIMPLE IRA SUBJECT TO DEFINED CONTRIBU-
TION PLAN LIMITATION.—Section 408(p) of such Code, 
as amended by section 3, is amended by adding at the 
end the following new paragraph: 
‘‘(12) SUBJECT
TO
DEFINED
CONTRIBUTION 
PLAN
LIMITATION.—An arrangement shall not be 
treated as a qualified salary reduction arrangement 
for any year if contributions with respect to any em-
ployee for the year exceed the limitation of para-
graph (1) of section 415(c) (relating to limitation for 
defined contribution plans).’’. 
(d) EFFECTIVE DATE.—The amendments made by 
this section shall apply to contributions for taxable years 
beginning after December 31, 2017. 
VerDate Sep 11 2014 
03:34 Dec 15, 2017
Jkt 079200
PO 00000
Frm 00007
Fmt 6652
Sfmt 6201
E:\BILLS\H4637.IH
H4637
sradovich on DSK3GMQ082PROD with BILLS
SEC. 6. SIMPLE 401(k) PARITY FOR ADDITIONAL NONELEC-
TIVE EMPLOYER CONTRIBUTIONS. 
(a) IN GENERAL.—Section 401(k)(11)(B) of such 
Code is amended by adding at the end the following new 
clause: 
‘‘(iv) SPECIAL RULE FOR ADDITIONAL 
NONELECTIVE
EMPLOYER
CONTRIBU-
TIONS.—An arrangement shall not be 
treated as failing to meet the requirements 
of this subparagraph merely because under 
such arrangement the employer makes, in 
addition to any other contribution under 
this subparagraph, nonelective contribu-
tions of not more than 10 percent of com-
pensation for each employee who is eligible 
to participate in the arrangement and who 
has at least $5,000 of compensation from 
the employer for the year.’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to plan years beginning after De-
cember 31, 2017. 
SEC. 7. AUTOMATIC DEFERRAL IRAS. 
(a) IN GENERAL.—Subpart A of part I of subchapter 
D of chapter 1 of the Internal Revenue Code of 1986 is 
amended by inserting after section 408A the following new 
section: 
VerDate Sep 11 2014 
03:34 Dec 15, 2017
Jkt 079200
PO 00000
Frm 00008
Fmt 6652
Sfmt 6201
E:\BILLS\H4637.IH
H4637
sradovich on DSK3GMQ082PROD with BILLS
‘‘SEC. 408B. AUTOMATIC DEFERRAL IRAS. 
‘‘(a) IN GENERAL.—An automatic deferral IRA shall 
be treated for purposes of this title in the same manner 
as an individual retirement plan. An automatic deferral 
IRA may also be treated as a Roth IRA for purposes of 
this title if it meets the requirements of section 408A. 
‘‘(b) AUTOMATIC DEFERRAL IRA.—For purposes of 
this section, the term ‘automatic deferral IRA’ means an 
individual retirement plan (as defined in section 
7701(a)(37)) with respect to which contributions are made 
under an arrangement which satisfies the requirements of 
paragraphs (1) through (4) of subsection (c). 
‘‘(c) AUTOMATIC DEFERRAL IRA ARRANGEMENTS.— 
‘‘(1) ENROLLMENT.— 
‘‘(A) IN GENERAL.—The requirements of 
this paragraph are met if each employee eligible 
to participate in the arrangement is treated as 
having elected to have the employer make pay-
ments as elective contributions to an automatic 
deferral IRA on behalf of such employee (which 
would have otherwise been made to the em-
ployee directly in cash) in an amount equal to 
so much of a qualified percentage of compensa-
tion of such employee as does not exceed the 
deductible amount for such year (within the 
meaning of section 219(b)). 
VerDate Sep 11 2014 
03:34 Dec 15, 2017
Jkt 079200
PO 00000
Frm 00009
Fmt 6652
Sfmt 6201
E:\BILLS\H4637.IH
H4637
sradovich on DSK3GMQ082PROD with BILLS
‘‘(B) ELIGIBILITY.—For purposes of sub-
paragraph (A), an employee is eligible to par-
ticipate if such employee has at least $5,000 of 
compensation from the employer for the pre-
ceding year. 
‘‘(C) ELECTION OUT.—The election treat-
ed as having been made under subparagraph 
(A) shall cease to apply with respect to any em-
ployee who makes an affirmative election— 
‘‘(i) to not have such elective contribu-
tions made, or 
‘‘(ii) not later than the close of the 
30-day period beginning on the date of the 
first contribution with respect to such em-
ployee, to make elective contributions at a 
level specified in such affirmative election. 
‘‘(D) QUALIFIED PERCENTAGE.—For pur-
poses of this paragraph, the term ‘qualified per-
centage’ means, with respect to any employee, 
any percentage determined under the arrange-
ment if such percentage is applied uniformly, 
does not exceed 15 percent, and is at least— 
‘‘(i) 3 percent during the period end-
ing on the last day of the first plan year 
which begins after the date on which the 
VerDate Sep 11 2014 
03:34 Dec 15, 2017
Jkt 079200
PO 00000
Frm 00010
Fmt 6652
Sfmt 6201
E:\BILLS\H4637.IH
H4637
sradovich on DSK3GMQ082PROD with BILLS
first elective contribution described in sub-
paragraph (A) is made with respect to 
such employee, and 
‘‘(ii) during any subsequent plan year, 
a percentage equal to— 
‘‘(I) 3 percent, plus 
‘‘(II) 1 percent multiplied by the 
number of plan years (but not more 
than 12) beginning after the plan year 
described in clause (i). 
‘‘(2) NOTICE.— 
‘‘(A) IN GENERAL.—The requirements of 
this paragraph are met if, within a reasonable 
period before the first day an employee is eligi-
ble to participate in the arrangement, the em-
ployee receives written notice of the employee’s 
rights and obligations under the arrangement 
which— 
‘‘(i) is sufficiently accurate and com-
prehensive to apprise the employee of such 
rights, and 
‘‘(ii) is written in a manner calculated 
to be understood by the average employee 
to whom the arrangement applies. 
VerDate Sep 11 2014 
03:34 Dec 15, 2017
Jkt 079200
PO 00000
Frm 00011
Fmt 6652
Sfmt 6201
E:\BILLS\H4637.IH
H4637
sradovich on DSK3GMQ082PROD with BILLS
‘‘(B) TIMING
AND
CONTENT.—A notice 
shall not be treated as meeting the require-
ments of subparagraph (A) with respect to an 
employee unless— 
‘‘(i) the notice explains the employee’s 
right to elect not to have elective contribu-
tions made on the employee’s behalf (or to 
elect to have such contributions made at a 
different percentage), 
‘‘(ii) the notice explains how contribu-
tions made under the arrangement will be 
invested in the absence of any investment 
election by the employee, and 
‘‘(iii) the employee has a reasonable 
period of time after receipt of the notice 
described in clauses (i) and (ii) and before 
the first elective contribution is made to 
make either such election. 
‘‘(3) DEFAULT INVESTMENT ARRANGEMENT.— 
The requirements of this paragraph are met if— 
‘‘(A) in the absence of an investment elec-
tion by the employee with respect to the em-
ployee’s interest in the trust, such interest is in-
vested as provided in regulations prescribed 
pursuant to subparagraph (A) of section 
VerDate Sep 11 2014 
03:34 Dec 15, 2017
Jkt 079200
PO 00000
Frm 00012
Fmt 6652
Sfmt 6201
E:\BILLS\H4637.IH
H4637
sradovich on DSK3GMQ082PROD with BILLS
404(c)(5) of the Employee Retirement Income 
Security Act of 1974, and 
‘‘(B) the employer provides each employee 
who has an interest in the trust, notice which 
meets the requirements of subparagraph (B) of 
such section. 
‘‘(4) ADMINISTRATIVE
REQUIREMENTS.—The 
requirements of this paragraph are met if— 
‘‘(A) an employer must make— 
‘‘(i) the elective contributions under 
paragraph (1)(A) not later than the close 
of the 30-day period following the last day 
of the month with respect to which the 
contributions are to be made, and 
‘‘(ii) a payment of interest at the 
overpayment rate (as determined under 
section 6621(a)) on any such elective con-
tribution made after the end of the period 
specified in clause (i), 
‘‘(B) an employee may elect to terminate 
participation in the arrangement at any time 
during the year, except that if the employee so 
terminates, the arrangement may provide that 
the employee may not elect to resume participa-
tion until the beginning of the next year, and 
VerDate Sep 11 2014 
03:34 Dec 15, 2017
Jkt 079200
PO 00000
Frm 00013
Fmt 6652
Sfmt 6201
E:\BILLS\H4637.IH
H4637
sradovich on DSK3GMQ082PROD with BILLS
‘‘(C) each employee eligible to participate 
may elect, during the 30-day period before the 
beginning of any year, or to modify the amount 
subject to such arrangement, for such year.’’. 
(b) FAILURE TO MAKE TIMELY CONTRIBUTIONS.— 
Chapter 43 of such Code is amended by adding at the 
end the following: 
‘‘SEC. 4980J. FAILURE TO MAKE TIMELY CONTRIBUTIONS 
UNDER AUTOMATIC DEFERRAL IRAS. 
‘‘(a) INITIAL TAX.—If at any time during any taxable 
year an employer maintains an automatic deferral IRA 
which is part of a plan to which section 408B applies, 
there is hereby imposed on the employer for the taxable 
year a tax equal to 10 percent of the aggregate required 
contributions to such automatic deferral IRA for all plan 
years that are not paid by the date specified in section 
408B(c)(4)(A)(i) and that remain unpaid as of the end 
of any plan year ending with or within the taxable year. 
‘‘(b) ADDITIONAL TAX.—If a tax is imposed under 
subsection (a) on any unpaid required contribution and 
such amount remains unpaid as of the close of the taxable 
period, there is hereby imposed a tax equal to 100 percent 
of the unpaid required contribution to the extent not so 
paid or corrected. 
‘‘(c) LIMITATIONS ON AMOUNT OF TAX.— 
VerDate Sep 11 2014 
03:34 Dec 15, 2017
Jkt 079200
PO 00000
Frm 00014
Fmt 6652
Sfmt 6201
E:\BILLS\H4637.IH
H4637
sradovich on DSK3GMQ082PROD with BILLS
(c) PREEMPTION OF CONFLICTING STATE LAWS.— 
Any law of a State shall be superseded if it would directly 
or indirectly prohibit or restrict an employer from creating 
or maintaining an automatic deferral IRA (as defined in 
section 408B of the Internal Revenue Code of 1986). 
(d) CLERICAL AMENDMENT.— 
(1) The table of sections for subpart A of part 
I of subchapter D of chapter 1 of the Internal Rev-
enue Code of 1986 is amended by inserting after the 
item relating to 408A the following new item: 
‘‘Sec. 408B. Automatic deferral IRAs.’’. 
(2) The table of sections for chapter 43 of such 
Code is amended by adding at the end the following 
new item: 
‘‘Sec. 4980J. Failure to make timely contributions under automatic deferral 
IRAs.’’. 
(e) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2017. 
SEC. 8. MODIFICATION OF AUTOMATIC ENROLLMENT SAFE 
HARBOR. 
(a) IN GENERAL.— 
(1) REMOVAL
OF
PERCENT
CAP.—Section 
401(k)(13)(C)(iii) of the Internal Revenue Code of 
1986 is amended by striking ‘‘, does not exceed 10 
percent, and is at least’’ and inserting ‘‘and is’’. 
VerDate Sep 11 2014 
20:52 Dec 19, 2017
Jkt 079200
PO 00000
Frm 00016
Fmt 6652
Sfmt 6201
E:\BILLS\H4637.IH
H4637
sradovich on DSK3GMQ082PROD with BILLS
(2) CONFORMING AMENDMENTS.— 
(A) Section 401(k)(13)(C)(iii)(I) of such 
Code is amended by striking ‘‘3 percent’’ and 
inserting ‘‘at least 3 percent, but not greater 
than 10 percent,’’. 
(B) Section 401(k)(13)(C)(iii)(II) of such 
Code is amended by striking ‘‘4 percent’’ and 
inserting ‘‘at least 4 percent, but not greater 
than 15 percent,’’. 
(C) Section 401(k)(13)(C)(iii)(III) of such 
Code is amended by striking ‘‘5 percent’’ and 
inserting ‘‘at least 5 percent’’. 
(D) Section 401(k)(13)(C)(iii)(IV) of such 
Code is amended by striking ‘‘6 percent’’ and 
inserting ‘‘at least 6 percent’’. 
(b) EFFECTIVE DATE.—The amendments made by 
this section shall apply to plan years beginning after the 
date of enactment of this Act. 
SEC. 9. SECURE DEFERRAL ARRANGEMENTS. 
(a) IN GENERAL.—Section 401(k) of the Internal 
Revenue Code of 1986 is amended by adding at the end 
the following new paragraph: 
‘‘(14) ALTERNATIVE METHOD FOR SECURE DE-
FERRAL ARRANGEMENTS TO MEET NONDISCRIMINA-
TION REQUIREMENTS.— 
VerDate Sep 11 2014 
03:34 Dec 15, 2017
Jkt 079200
PO 00000
Frm 00017
Fmt 6652
Sfmt 6201
E:\BILLS\H4637.IH
H4637
sradovich on DSK3GMQ082PROD with BILLS
‘‘(A) IN GENERAL.—A secure deferral ar-
rangement shall be treated as meeting the re-
quirements of paragraph (3)(A)(ii). 
‘‘(B) 
SECURE
DEFERRAL
ARRANGE-
MENT.—For purposes of this paragraph, the 
term ‘secure deferral arrangement’ means any 
cash or deferred arrangement which meets the 
requirements of subparagraphs (C), (D), and 
(E) of paragraph (13), except as modified by 
this paragraph. 
‘‘(C) QUALIFIED PERCENTAGE.—For pur-
poses of this paragraph, with respect to any 
employee, 
the 
term 
‘qualified 
percentage’ 
means, in lieu of the meaning given such term 
in paragraph (13)(C)(iii), any percentage deter-
mined under the arrangement if such percent-
age is applied uniformly and is— 
‘‘(i) at least 6 percent, but not greater 
than 10 percent, during the period ending 
on the last day of the first plan year which 
begins after the date on which the first 
elective contribution described in para-
graph (13)(C)(i) is made with respect to 
such employee, 
VerDate Sep 11 2014 
03:34 Dec 15, 2017
Jkt 079200
PO 00000
Frm 00018
Fmt 6652
Sfmt 6201
E:\BILLS\H4637.IH
H4637
sradovich on DSK3GMQ082PROD with BILLS
‘‘(ii) at least 8 percent during the 
first plan year following the plan year de-
scribed in clause (i), and 
‘‘(iii) at least 10 percent during any 
subsequent plan year. 
‘‘(D) MATCHING CONTRIBUTIONS.— 
‘‘(i) IN
GENERAL.—For purposes of 
this paragraph, an arrangement shall be 
treated as having met the requirements of 
paragraph (13)(D)(i) if and only if the em-
ployer makes matching contributions on 
behalf of each employee who is not a highly 
compensated employee in an amount equal 
to the sum of— 
‘‘(I) 100 percent of the elective 
contributions of the employee to the 
extent that such contributions do not 
exceed 1 percent of compensation, 
‘‘(II) 50 percent of so much of 
such contributions as exceed 1 percent 
but do not exceed 6 percent of com-
pensation, plus 
‘‘(III) 25 percent of so much of 
such contributions as exceed 6 percent 
VerDate Sep 11 2014 
03:34 Dec 15, 2017
Jkt 079200
PO 00000
Frm 00019
Fmt 6652
Sfmt 6201
E:\BILLS\H4637.IH
H4637
sradovich on DSK3GMQ082PROD with BILLS
but do not exceed 10 percent of com-
pensation. 
‘‘(ii) APPLICATION
OF
RULES
FOR 
MATCHING CONTRIBUTIONS.—The rules of 
clause (ii) of paragraph (12)(B) and 
clauses (iii) and (iv) of paragraph (13)(D) 
shall apply for purposes of clause (i) but 
the rule of clause (iii) of paragraph 
(12)(B) shall not apply for such purposes. 
The rate of matching contribution for each 
incremental deferral must be at least as 
high as the rate specified in clause (i), and 
may be higher, so long as such rate does 
not increase as an employee’s rate of elec-
tive contributions increases.’’. 
(b) MATCHING CONTRIBUTIONS
AND EMPLOYEE 
CONTRIBUTIONS.—Section 401(m) of the Internal Rev-
enue Code of 1986 is amended by redesignating paragraph 
(13) as paragraph (14) and by inserting after paragraph 
(12) the following new paragraph: 
‘‘(13) ALTERNATIVE METHOD FOR SECURE DE-
FERRAL
ARRANGEMENTS.—A defined contribution 
plan shall be treated as meeting the requirements of 
paragraph (2) with respect to matching contribu-
tions and employee contributions if the plan— 
VerDate Sep 11 2014 
03:34 Dec 15, 2017
Jkt 079200
PO 00000
Frm 00020
Fmt 6652
Sfmt 6201
E:\BILLS\H4637.IH
H4637
sradovich on DSK3GMQ082PROD with BILLS
‘‘(A) is a secure deferral arrangement (as 
defined in subsection (k)(14)), 
‘‘(B) meets the requirements of clauses (ii) 
and (iii) of paragraph (11)(B), and 
‘‘(C) provides that matching contributions 
on behalf of any employee may not be made 
with respect to an employee’s contributions or 
elective deferrals in excess of 10 percent of the 
employee’s compensation.’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to plan years beginning after De-
cember 31, 2017. 
SEC. 10. CREDIT FOR EMPLOYERS WITH RESPECT TO MODI-
FIED SAFE HARBOR REQUIREMENTS. 
(a) IN GENERAL.—Subpart D of part IV of sub-
chapter A of chapter 1 of the Internal Revenue Code of 
1986 is amended by adding at the end the following new 
section: 
‘‘SEC. 45S. CREDIT FOR SMALL EMPLOYERS WITH RESPECT 
TO MODIFIED SAFE HARBOR REQUIREMENTS 
FOR AUTOMATIC CONTRIBUTION ARRANGE-
MENTS. 
‘‘(a) GENERAL RULE.—For purposes of section 38, 
in the case of a small employer, the safe harbor adoption 
credit determined under this section for any taxable year 
VerDate Sep 11 2014 
03:34 Dec 15, 2017
Jkt 079200
PO 00000
Frm 00021
Fmt 6652
Sfmt 6201
E:\BILLS\H4637.IH
H4637
sradovich on DSK3GMQ082PROD with BILLS
‘‘(2) SMALL EMPLOYER.—The term ‘small em-
ployer’ means an eligible employer (as defined in 
section 408(p)(2)(C)(i)). 
‘‘(d) DENIAL OF DOUBLE BENEFIT.—No deduction 
shall be allowable under this title for any contribution with 
respect to which a credit is allowed under this section.’’. 
(b) CREDIT TO BE PART OF GENERAL BUSINESS 
CREDIT.—Section 38(b) of the Internal Revenue Code of 
1986 is amended— 
(1) by striking ‘‘plus’’ at the end of paragraph 
(35); 
(2) by striking the period at the end of para-
graph (36) and inserting ‘‘, plus’’; and 
(3) by adding at the end the following new 
paragraph: 
‘‘(37) the safe harbor adoption credit deter-
mined under section 45S.’’. 
(c) CLERICAL AMENDMENT.—The table of sections 
for subpart D of part IV of subchapter A of chapter 1 
of the Internal Revenue Code of 1986 is amended by add-
ing after the item relating to section 45R the following 
new item: 
‘‘Sec. 45S. Credit for small employers with respect to modified safe harbor re-
quirements for automatic contribution arrangements.’’. 
VerDate Sep 11 2014 
03:34 Dec 15, 2017
Jkt 079200
PO 00000
Frm 00023
Fmt 6652
Sfmt 6211
E:\BILLS\H4637.IH
H4637
sradovich on DSK3GMQ082PROD with BILLS
(d) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years that include any 
portion of a plan year beginning after December 31, 2017. 
SEC. 11. MODIFICATION OF REGULATIONS. 
The Secretary of the Treasury shall promulgate regu-
lations or other guidance that— 
(1) simplify and clarify the rules regarding the 
timing of participant notices required under section 
401(k)(13)(E) of the Internal Revenue Code of 
1986, with specific application to— 
(A) plans that allow employees to be eligi-
ble for participation immediately upon begin-
ning employment; and 
(B) employers with multiple payroll and 
administrative systems; and 
(2) simplify and clarify the automatic escalation 
rules 
under 
sections 
401(k)(13)(C)(iii) 
and 
401(k)(14)(C) of the Internal Revenue Code of 1986 
in the context of employers with multiple payroll and 
administrative systems. 
Such regulations or guidance shall address the particular 
case of employees within the same plan who are subject 
to different notice timing and different percentage require-
ments, and provide assistance for plan sponsors in man-
aging such cases. 
VerDate Sep 11 2014 
03:34 Dec 15, 2017
Jkt 079200
PO 00000
Frm 00024
Fmt 6652
Sfmt 6201
E:\BILLS\H4637.IH
H4637
sradovich on DSK3GMQ082PROD with BILLS
SEC. 12. LIMITED TRANSFER OF UNUSED BALANCE IN 
FLEXIBLE SPENDING ARRANGEMENT. 
(a) IN GENERAL.—Section 125 of the Internal Rev-
enue Code of 1986 is amended by redesignating sub-
sections (k) and (l) as subsections (l) and (m), respec-
tively, and by inserting after subsection (h) the following 
new subsection: 
‘‘(k) SPECIAL RULE
FOR UNUSED BENEFITS
IN 
FLEXIBLE SPENDING ARRANGEMENTS.— 
‘‘(1) IN GENERAL.—For purposes of this title, 
a plan or other arrangement shall not fail to be 
treated as a cafeteria plan or flexible spending ar-
rangement merely because such arrangement pro-
vides for qualified retirement distributions. 
‘‘(2) QUALIFIED RETIREMENT DISTRIBUTION.— 
‘‘(A) IN GENERAL.—For purposes of this 
section, the term ‘qualified retirement distribu-
tion’ means any distribution to an individual of 
all or a portion of the employee’s account under 
such arrangement, but only to the extent— 
‘‘(i) the amount does not exceed the 
lesser of— 
‘‘(I) $250, or 
‘‘(II) the unused benefits with re-
spect to the arrangement, and 
VerDate Sep 11 2014 
03:34 Dec 15, 2017
Jkt 079200
PO 00000
Frm 00025
Fmt 6652
Sfmt 6201
E:\BILLS\H4637.IH
H4637
sradovich on DSK3GMQ082PROD with BILLS
‘‘(ii) the amount received is paid in 
the form of a direct trustee-to-trustee 
transfer to a qualified retirement plan (as 
defined in section 4974(c)), or an eligible 
deferred compensation plan (as defined in 
section 457(b)) of an eligible employer de-
scribed in section 457(e)(1)(A), maintained 
by the same employer as the employer 
maintaining the cafeteria plan or flexible 
spending arrangement of the individual. 
‘‘(B) UNUSED
BENEFITS.—For purposes 
of this paragraph, the term ‘unused benefits’ 
means, with respect to an employee, the excess 
of— 
‘‘(i) the maximum amount of reim-
bursement allowable to the employee dur-
ing a plan year under a flexible spending 
arrangement, over 
‘‘(ii) the actual amount of reimburse-
ment during such year under such ar-
rangement. 
‘‘(C) SPECIAL RULES FOR TREATMENT OF 
CONTRIBUTIONS TO RETIREMENT PLANS.—For 
purposes of this title, qualified retirement dis-
tributions— 
VerDate Sep 11 2014 
03:34 Dec 15, 2017
Jkt 079200
PO 00000
Frm 00026
Fmt 6652
Sfmt 6201
E:\BILLS\H4637.IH
H4637
sradovich on DSK3GMQ082PROD with BILLS
‘‘(i) shall be treated as elective defer-
rals (as defined in section 402(g)(3)) 
under an annuity contract described in sec-
tion 403(b), 
‘‘(ii) shall be treated as elective defer-
rals (as so defined) in the case of contribu-
tions to a qualified cash or deferred ar-
rangement (as defined in section 401(k)) 
under a plan which is described in section 
401(a) which includes a trust which is ex-
empt from tax under section 501(a), 
‘‘(iii) shall be treated as deferred com-
pensation in the case of contributions to an 
eligible deferred compensation plan (as de-
fined in section 457(b)) maintained by an 
employer described in section 457(e)(1)(A), 
and 
‘‘(iv) shall be treated in the manner 
designated for purposes of section 408 or 
408A in the case of contributions to an in-
dividual retirement plan.’’. 
(b) EFFECTIVE DATE.—The amendments made by 
this section shall apply to plan years ending after the date 
of the enactment of this Act. 
VerDate Sep 11 2014 
03:34 Dec 15, 2017
Jkt 079200
PO 00000
Frm 00027
Fmt 6652
Sfmt 6201
E:\BILLS\H4637.IH
H4637
sradovich on DSK3GMQ082PROD with BILLS
SEC. 13. PRIOR YEARS COMPENSATION TAKEN INTO AC-
COUNT IN DETERMINING MAXIMUM RETIRE-
MENT SAVINGS DEDUCTION. 
(a) IN GENERAL.—Section 219(b)(1)(B) of the Inter-
nal Revenue Code of 1986 is amended by inserting ‘‘or 
the preceding taxable year’’ after ‘‘such taxable year’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to taxable years beginning after 
the date of the enactment of this Act. 
SEC. 14. EXPANDING SMALL EMPLOYER PENSION PLAN 
STARTUP COST CREDIT. 
(a) IN GENERAL.— 
(1) INCLUDING
STARTUP
COSTS
FOR
EM-
PLOYER-ESTABLISHED IRAS.—Section 45E(d)(2) of 
the Internal Revenue Code of 1986 is amended by 
striking ‘‘means a qualified employer plan’’ and all 
that follows and inserting: ‘‘means— 
‘‘(A) a qualified employer plan within the 
meaning of section 4972(d), and 
‘‘(B) a plan of which an automatic deferral 
IRA described in section 408B is a part.’’. 
(2) ADDITIONAL CREDIT AMOUNT.— 
(A) IN GENERAL.—Section 45E(a) of such 
Code is amended by striking ‘‘50 percent of’’ 
and all that follows and inserting ‘‘the sum of— 
VerDate Sep 11 2014 
03:34 Dec 15, 2017
Jkt 079200
PO 00000
Frm 00028
Fmt 6652
Sfmt 6201
E:\BILLS\H4637.IH
H4637
sradovich on DSK3GMQ082PROD with BILLS
‘‘(1) the applicable percentage of the qualified 
startup costs paid or incurred by the taxpayer dur-
ing the taxable year, plus 
‘‘(2) $25 multiplied by the number of employees 
of the employer who participate in any eligible em-
ployer plan of the employer for the first time in such 
taxable year.’’. 
(B) APPLICABLE
PERCENTAGE.—Section 
45E(d) of such Code is amended by adding at 
the end the following new paragraph: 
‘‘(4) APPLICABLE PERCENTAGE.—The applica-
ble percentage is— 
‘‘(A) in the case of a plan described in sub-
section (d)(2)(A), 75 percent, or 
‘‘(B) in the case of a plan described in 
subsection (d)(2)(B), 50 percent.’’. 
(C) CONFORMING
AMENDMENT.—Section 
45E(c)(2) of such Code is amended— 
(i) by striking ‘‘qualified employer 
plan’’ in each place it appears and insert-
ing ‘‘eligible employer plan’’; and 
(ii) by striking ‘‘QUALIFIED’’ in the 
heading thereof and inserting ‘‘ELIGIBLE’’. 
(3) 
INCREASED
LIMITATION.—Section 
45E(b)(1) of such Code is amended by striking 
VerDate Sep 11 2014 
03:34 Dec 15, 2017
Jkt 079200
PO 00000
Frm 00029
Fmt 6652
Sfmt 6201
E:\BILLS\H4637.IH
H4637
sradovich on DSK3GMQ082PROD with BILLS
‘‘$500’’ and inserting ‘‘$750 ($2,000 in the case of 
qualified startup costs attributable to a plan de-
scribed in subsection (d)(2)(A))’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to costs paid or incurred in taxable 
years beginning after the date of the enactment of this 
Act. 
SEC. 15. FINANCIAL EDUCATION. 
(a) RETIREMENT PLAN EDUCATION
FOR SMALL 
BUSINESSES.—Not later than 6 months after the date of 
the enactment of this Act— 
(1) the Department of the Treasury Office of 
Financial Education, in consultation with the De-
partment of Labor, shall develop and implement an 
outreach plan to educate small businesses on the 
types of retirement plans available and the benefits 
and requirements of such plans; and 
(2) the Secretary of the Treasury and the Sec-
retary of Labor shall develop recommendations for 
small businesses in order to improve retirement out-
comes. Such recommendations shall take into ac-
count established behavioral trends of employee in-
vestment and the effect of default design features 
such as auto escalation, expansion of auto rollovers, 
VerDate Sep 11 2014 
03:34 Dec 15, 2017
Jkt 079200
PO 00000
Frm 00030
Fmt 6652
Sfmt 6201
E:\BILLS\H4637.IH
H4637
sradovich on DSK3GMQ082PROD with BILLS
auto diversification for near retirees, and automatic 
forms of distribution. 
(b) FINANCIAL LITERACY.— 
(1) IN GENERAL.—Not later than 1 year after 
the date of the enactment of this Act, the Secretary 
of the Treasury, in consultation with the Secretary 
of Education, shall develop sample age-appropriate 
curricula to be made available for financial literacy 
education in elementary and secondary schools. 
(2) CONTENT OF CURRICULA.—Such curricula 
shall include the following: 
(A) How to balance a checkbook, read a 
credit card statement, and calculate interest 
rates. 
(B) What a pay stub is and why Federal 
and State income taxes and Social Security and 
Medicare taxes are withheld from wages. 
(C) The differences between various types 
of bank accounts. 
(D) The significance of a credit score and 
how to read credit reports. 
(E) The marketing techniques frequently 
used by individuals and businesses to attract 
patrons. 
VerDate Sep 11 2014 
03:34 Dec 15, 2017
Jkt 079200
PO 00000
Frm 00031
Fmt 6652
Sfmt 6201
E:\BILLS\H4637.IH
H4637
sradovich on DSK3GMQ082PROD with BILLS
(F) The importance of saving for college 
and retirement, including the various methods 
for saving such as traditional pensions, 401(k)s, 
and IRAs. 
SEC. 16. SMALL EMPLOYER PLANS. 
(a) IN GENERAL.—Section 401(k)(11) of the Inter-
nal Revenue Code of 1986 is amended by adding at the 
end the following new subparagraph: 
‘‘(E) DEFERRAL ONLY SMALL EMPLOYER 
PLAN.— 
‘‘(i) IN GENERAL.—In the case of a 
plan described in clause (ii)— 
‘‘(I) the amount described in sub-
paragraph (B)(i)(I) shall be $10,000, 
in lieu of the amount in effect under 
section 408(p)(2)(A)(ii), 
‘‘(II) such $10,000 amount shall, 
in the case years beginning after De-
cember 31, 2018, be adjusted as de-
scribed in section 408(p)(2)(E)(ii) ex-
cept that the base period taken into 
account shall be the calendar quarter 
beginning July 1, 2017, 
VerDate Sep 11 2014 
03:34 Dec 15, 2017
Jkt 079200
PO 00000
Frm 00032
Fmt 6652
Sfmt 6201
E:\BILLS\H4637.IH
H4637
sradovich on DSK3GMQ082PROD with BILLS
‘‘(III) subclause (II) of subpara-
graph (B)(i) and clause (ii) of sub-
paragraph (B) shall not apply, and 
‘‘(IV) section 414(v) shall not 
apply. 
‘‘(ii) PLAN DESCRIBED.—A plan is de-
scribed in this clause if the plan satisfies 
the following requirements: 
‘‘(I) Such plan satisfies the re-
quirements of this paragraph, as 
modified by clause (i). 
‘‘(II) The plan includes a quali-
fied automatic contribution arrange-
ment, as defined in paragraph (13), 
except that subparagraph (D) of para-
graph (13) shall not apply and the 
qualified percentage shall be deter-
mined by reference to subclauses (I), 
(II), (III), and (IV) of paragraph 
(13)(C)(iii). 
‘‘(III) The plan does not permit 
any participant or beneficiary to re-
ceive or maintain a loan from the 
plan. 
VerDate Sep 11 2014 
03:34 Dec 15, 2017
Jkt 079200
PO 00000
Frm 00033
Fmt 6652
Sfmt 6201
E:\BILLS\H4637.IH
H4637
sradovich on DSK3GMQ082PROD with BILLS
‘‘(IV) The plan does not permit 
hardship distributions described in 
paragraph (2)(B)(i)(IV) except to the 
extent 
any 
such 
distribution 
is 
deemed, under regulations prescribed 
by the Secretary, to be on account of 
an immediate and heavy financial 
need of the employee and necessary to 
satisfy an immediate and heavy finan-
cial need of the employee. 
‘‘(V) The plan is maintained pur-
suant to a model plan document pub-
lished by the Secretary.’’. 
(b) SIMPLIFICATION.— 
(1) MODEL PLAN.—Within one year after the 
date of the enactment of this Act, the Secretary of 
the Treasury shall publish a model plan that may be 
used 
to 
satisfy 
the 
requirement 
of 
section 
401(k)(11)(E)(ii)(V) of the Internal Revenue Code 
of 1986. 
(2) PROTECTION AGAINST LOSS.—Within 120 
days after the date of the enactment of this Act, the 
Secretary of Labor shall amend Department of 
Labor Regulation section 2550.404c–5(e)(4)(iv)(B) 
so that, in the case of a plan described in section 
VerDate Sep 11 2014 
03:34 Dec 15, 2017
Jkt 079200
PO 00000
Frm 00034
Fmt 6652
Sfmt 6201
E:\BILLS\H4637.IH
H4637
sradovich on DSK3GMQ082PROD with BILLS
401(k)(11)(E) of such Code, ‘‘four years’’ shall be 
substituted for ‘‘120 days’’. 
(3) CLARIFYING DUTIES AND REDUCING BUR-
DENS
FOR
MULTIPLE
EMPLOYER
PLANS.—Within 
one year after the date of the enactment of this Act, 
the Secretary of Labor shall— 
(A) publish rules clarifying the extent to 
which the fiduciary duties, if any, of a partici-
pating employer fiduciary with respect to a plan 
that consists of individual retirement accounts 
described in section 413(c) of employees covered 
by the plan fail to take such Code are limited 
to— 
(i) the selection and monitoring of 
such employers for the named fiduciary; 
and 
(ii) the investment and management 
of the portion of employers failing to take 
the plan’s assets of the plan attributable to 
employees of the employer will be trans-
ferred to a plan maintained only by the ex-
tent not otherwise delegated to another fi-
duciary; and 
(B) prescribe interim final regulations pro-
viding simplified means by which plans de-
VerDate Sep 11 2014 
03:34 Dec 15, 2017
Jkt 079200
PO 00000
Frm 00035
Fmt 6652
Sfmt 6201
E:\BILLS\H4637.IH
H4637
sradovich on DSK3GMQ082PROD with BILLS
scribed in section 413(c) of such Code may sat-
isfy the requirements of sections 102, 103, and 
105 of the Employee Retirement Income Secu-
rity Act of 1974. 
For purposes of this paragraph, the term ‘‘partici-
pating employer fiduciary’’ means the participating 
employer, any employee of such participating em-
ployer that serves as fiduciary, any committee of 
such employees, and any other person whose fidu-
ciaries duties with respect to the plan relate solely 
to the participating employer and not to the oper-
ation of the plan with respect to all participating 
employers. 
(4) ELIMINATION OF DISINCENTIVE TO POOL-
ING.—Not later than one year after the date of the 
enactment of this Act, the Secretary of the Treasury 
shall prescribe final regulations under which a plan 
or to allow a plan to meet requirements described in 
section 413(c) of such Code may be treated as satis-
fying the qualification requirements of section 
401(a) of such Code despite the violation of such re-
quirements with respect to one or more participating 
employers without regard to whether such violation 
continues. Solely for this purpose, a plan shall be 
treated as violating the qualification requirements of 
VerDate Sep 11 2014 
03:34 Dec 15, 2017
Jkt 079200
PO 00000
Frm 00036
Fmt 6652
Sfmt 6201
E:\BILLS\H4637.IH
H4637
sradovich on DSK3GMQ082PROD with BILLS
section 401(a) of such Code with respect to a par-
ticipating employer if such employer has failed to 
provide the plan sponsor with the information need-
ed to comply with such requirements and such fail-
ure has continued over a period of time that clearly 
demonstrates a lack of commitment to compliance. 
Such rules may require that the portion of the plan 
attributable to such participating employers be spun 
off to plans maintained by such employers. 
(c) EFFECTIVE DATE.— 
(1) IN GENERAL.—Except as provided in para-
graph (2), the amendments made by this section 
shall apply to years beginning after December 31, 
2017. 
(2) EXCEPTION.—Subsection (b) shall apply as 
of the date of the enactment of this Act. 
SEC. 17. MODIFICATION OF ERISA RULES RELATING TO 
MULTIPLE EMPLOYER DEFINED CONTRIBU-
TION PLANS. 
(a) IN GENERAL.— 
(1) REQUIREMENT
OF
COMMON
INTEREST.— 
Section 3(2) of the Employee Retirement Income Se-
curity Act of 1974 (29 U.S.C. 1002(2)) is amended 
by adding at the end the following: 
VerDate Sep 11 2014 
03:34 Dec 15, 2017
Jkt 079200
PO 00000
Frm 00037
Fmt 6652
Sfmt 6201
E:\BILLS\H4637.IH
H4637
sradovich on DSK3GMQ082PROD with BILLS
‘‘(C)(i) A qualified multiple employer plan shall 
not fail to be treated as an employee pension benefit 
plan or pension plan solely because the employers 
maintaining the plan share no common interest. 
‘‘(ii) For purposes of this subparagraph, the 
term ‘qualified multiple employer plan’ means a plan 
described in section 413(c) of the Internal Revenue 
Code of 1986 which— 
‘‘(I) is an individual account plan with re-
spect to which the requirements of clauses (iii), 
(iv), and (v) are met, and 
‘‘(II) includes in its annual report required 
to be filed under section 104(a) the name and 
identifying information of each employer main-
taining the plan. 
‘‘(iii) The requirements of this clause are met 
if, under the plan, each employer maintaining the 
plan retains fiduciary responsibility for— 
‘‘(I) the selection and monitoring of the 
named fiduciary, and 
‘‘(II) the investment and management of 
the portion of the plan’s assets attributable to 
the employees of the employer to the extent not 
otherwise delegated to another fiduciary. 
VerDate Sep 11 2014 
03:34 Dec 15, 2017
Jkt 079200
PO 00000
Frm 00038
Fmt 6652
Sfmt 6201
E:\BILLS\H4637.IH
H4637
sradovich on DSK3GMQ082PROD with BILLS
‘‘(iv) The requirements of this clause are met if, 
under the plan, an employer maintaining the plan is 
not subject to unreasonable restrictions, fees, or pen-
alties by reason of ceasing to maintain, or otherwise 
transferring assets from, the plan. 
‘‘(v) The requirements of this clause are met if 
each employer maintaining the plan is an eligible 
employer as defined in section 408(p)(2)(C)(i) of the 
Internal Revenue Code of 1986, applied— 
‘‘(I) by substituting ‘500’ for ‘100’ in sub-
clause (I) thereof, 
‘‘(II) by substituting ‘5’ for ‘2’ each place 
it appears in subclause (II) thereof, and 
‘‘(III) without regard to the last sentence 
of subclause (II) thereof.’’. 
(2) SIMPLIFIED REPORTING FOR SMALL MUL-
TIPLE EMPLOYER PLANS.—Section 104(a) of such 
Act (29 U.S.C. 1024(a)) is amended by adding at 
the end the following: 
‘‘(7)(A) In the case of any eligible small multiple em-
ployer plan, the Secretary may by regulation waive the re-
quirement under section 103(a)(3) to engage an inde-
pendent qualified public accountant in cases where the 
Secretary determines it appropriate. 
VerDate Sep 11 2014 
03:34 Dec 15, 2017
Jkt 079200
PO 00000
Frm 00039
Fmt 6652
Sfmt 6201
E:\BILLS\H4637.IH
H4637
sradovich on DSK3GMQ082PROD with BILLS
‘‘(B) For purposes of this paragraph, the term ‘eligi-
ble small multiple employer plan’ means, with respect to 
any plan year— 
‘‘(i) a qualified multiple employer plan, as de-
fined in section 3(2)(C)(ii), or 
‘‘(ii) any other plan described in section 413(c) 
of the Internal Revenue Code of 1986 that satisfies 
the requirements of clause (v) of section 3(2)(C).’’. 
(b) CONFORMING AMENDMENT.—Section 3(2)(A) of 
such Act (29 U.S.C. 1002(2)(A)) is amended by striking 
‘‘Except as provided in subparagraph (B)’’ and inserting 
‘‘Except as provided in subparagraphs (B) and (C)’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to years beginning after December 
31, 2017. 
SEC. 18. CLARIFICATION OF TREATMENT OF INDIVIDUAL 
RETIREMENT PLANS WITH PAYROLL DEDUC-
TION. 
(a) IN GENERAL.—Section 3(2) of the Employee Re-
tirement Income Security Act of 1974 (29 U.S.C. 
1002(2)), as amended by this Act, is amended by adding 
at the end the following new subparagraph: 
‘‘(E) Neither an individual retirement plan (as de-
fined in section 7701(a)(37) of the Internal Revenue Code 
of 1986) nor an automatic deferral IRA arrangement (as 
VerDate Sep 11 2014 
03:34 Dec 15, 2017
Jkt 079200
PO 00000
Frm 00040
Fmt 6652
Sfmt 6201
E:\BILLS\H4637.IH
H4637
sradovich on DSK3GMQ082PROD with BILLS
described in section 408B of such Code) maintained in 
connection with any such individual retirement plan shall 
be considered a single employee pension benefit plan mere-
ly because an employer establishes a payroll deduction pro-
gram for the purpose of enabling employees to make vol-
untary contributions to such account or annuity.’’. 
(b) EFFECTIVE DATE.—The amendments made by 
this section shall take effect on the date of the enactment 
of this Act. 
SEC. 19. DISCLOSURE REGARDING LIFETIME INCOME. 
(a) IN GENERAL.—Section 105(a)(2)(B) of the Em-
ployee Retirement Income Security Act of 1974 (29 
U.S.C. 1025(a)(2)) is amended— 
(1) in clause (i), by striking ‘‘and’’ at the end; 
(2) in clause (ii), by striking ‘‘diversification.’’ 
and inserting ‘‘diversification, and’’; and 
(3) by inserting at the end the following: 
‘‘(iii) the lifetime income disclosure 
described in subparagraph (D)(i). 
In the case of pension benefit statements de-
scribed in clause (i) of paragraph (1)(A), a life-
time income disclosure under clause (iii) of this 
subparagraph shall only be required to be in-
cluded in one pension benefit statement during 
any one 12-month period.’’. 
VerDate Sep 11 2014 
03:34 Dec 15, 2017
Jkt 079200
PO 00000
Frm 00041
Fmt 6652
Sfmt 6201
E:\BILLS\H4637.IH
H4637
sradovich on DSK3GMQ082PROD with BILLS
(b) LIFETIME INCOME.—Section 105(a)(2) of such 
Act (29 U.S.C. 1025(a)) is amended by adding at the end 
the following new subparagraph: 
‘‘(D) LIFETIME INCOME DISCLOSURE.— 
‘‘(i) IN GENERAL.— 
‘‘(I) DISCLOSURE.—A lifetime in-
come disclosure shall set forth the life-
time income stream equivalent of the 
total benefits accrued with respect to 
the participant or beneficiary. 
‘‘(II) LIFETIME INCOME STREAM 
EQUIVALENT
OF
THE
TOTAL
BENE-
FITS ACCRUED.—For purposes of this 
subparagraph, the term ‘lifetime in-
come stream equivalent of the total 
benefits accrued’ means the amount of 
monthly payments the participant or 
beneficiary would receive if the total 
accrued benefits of such participant or 
beneficiary were used to provide life-
time income streams described in sub-
clause (III), based on assumptions 
specified in rules prescribed by the 
Secretary. 
VerDate Sep 11 2014 
03:34 Dec 15, 2017
Jkt 079200
PO 00000
Frm 00042
Fmt 6652
Sfmt 6201
E:\BILLS\H4637.IH
H4637
sradovich on DSK3GMQ082PROD with BILLS
‘‘(III) 
LIFETIME
INCOME 
STREAMS.—The 
lifetime 
income 
streams described in this subclause 
are a qualified joint and survivor an-
nuity (as defined in section 205(d)), 
based on assumptions specified in 
rules prescribed by the Secretary, in-
cluding the assumption that the par-
ticipant or beneficiary has a spouse of 
equal age, and a single life annuity. 
Such lifetime income streams may 
have a term certain or other features 
to the extent permitted under rules 
prescribed by the Secretary. 
‘‘(ii) MODEL DISCLOSURE.—Not later 
than 1 year after the date of the enact-
ment of the Lifetime Income Disclosure 
Act, the Secretary shall issue a model life-
time income disclosure, written in a man-
ner so as to be understood by the average 
plan participant, that— 
‘‘(I) explains that the lifetime in-
come stream equivalent is only pro-
vided as an illustration; 
VerDate Sep 11 2014 
03:34 Dec 15, 2017
Jkt 079200
PO 00000
Frm 00043
Fmt 6652
Sfmt 6201
E:\BILLS\H4637.IH
H4637
sradovich on DSK3GMQ082PROD with BILLS
‘‘(II) explains that the actual 
payments under the lifetime income 
stream described in clause (i)(III) 
that may be purchased with the total 
benefits accrued will depend on nu-
merous factors and may vary substan-
tially from the lifetime income stream 
equivalent in the disclosures; 
‘‘(III) explains the assumptions 
upon which the lifetime income stream 
equivalent was determined; and 
‘‘(IV) provides such other similar 
explanations as the Secretary con-
siders appropriate. 
‘‘(iii) ASSUMPTIONS
AND
RULES.— 
Not later than 1 year after the date of the 
enactment of the Lifetime Income Disclo-
sure Act, the Secretary shall— 
‘‘(I) prescribe assumptions that 
administrators of individual account 
plans may use in converting total ac-
crued benefits into lifetime income 
stream equivalents for purposes of 
this subparagraph; and 
VerDate Sep 11 2014 
03:34 Dec 15, 2017
Jkt 079200
PO 00000
Frm 00044
Fmt 6652
Sfmt 6201
E:\BILLS\H4637.IH
H4637
sradovich on DSK3GMQ082PROD with BILLS
‘‘(II) issue interim final rules 
under clause (i). 
In prescribing assumptions under sub-
clause (I), the Secretary may prescribe a 
single set of specific assumptions (in which 
case the Secretary may issue tables or fac-
tors that facilitate such conversions), or 
ranges of permissible assumptions. To the 
extent that an accrued benefit is or may be 
invested in a lifetime income stream de-
scribed in clause (i)(III), the assumptions 
prescribed under subclause (I) shall, to the 
extent appropriate, permit administrators 
of individual account plans to use the 
amounts payable under such lifetime in-
come stream as a lifetime income stream 
equivalent. 
‘‘(iv) LIMITATION ON LIABILITY.—No 
plan fiduciary, plan sponsor, or other per-
son shall have any liability under this title 
solely by reason of the provision of lifetime 
income stream equivalents which are de-
rived in accordance with the assumptions 
and rules described in clause (iii) and 
which include the explanations contained in 
VerDate Sep 11 2014 
03:34 Dec 15, 2017
Jkt 079200
PO 00000
Frm 00045
Fmt 6652
Sfmt 6201
E:\BILLS\H4637.IH
H4637
sradovich on DSK3GMQ082PROD with BILLS
the model lifetime income disclosure de-
scribed in clause (ii). This clause shall 
apply without regard to whether the provi-
sion of such lifetime income stream equiva-
lent is required by subparagraph (B)(iii). 
‘‘(v) EFFECTIVE DATE.—The require-
ment in subparagraph (B)(iii) shall apply 
to pension benefit statements furnished 
more than 12 months after the latest of 
the issuance by the Secretary of— 
‘‘(I) interim final rules under 
clause (i); 
‘‘(II) the model disclosure under 
clause (ii); or 
‘‘(III) the assumptions under 
clause (iii).’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall take effect on the date of the enactment 
of this Act. 
SEC. 20. LIFETIME INCOME SAFE HARBOR. 
Section 404 of the Employee Retirement Income Se-
curity Act of 1974 (29 U.S.C. 1104) is amended by adding 
at the end the following: 
‘‘(e) SAFE HARBOR FOR ANNUITY SELECTION.— 
VerDate Sep 11 2014 
03:34 Dec 15, 2017
Jkt 079200
PO 00000
Frm 00046
Fmt 6652
Sfmt 6201
E:\BILLS\H4637.IH
H4637
sradovich on DSK3GMQ082PROD with BILLS
‘‘(1) IN GENERAL.—With respect to the selec-
tion of an insurer and a guaranteed retirement in-
come contract, the requirements of subsection 
(a)(1)(B) will be deemed to be satisfied if a fidu-
ciary— 
‘‘(A) engages in an objective, thorough, 
and analytical search for the purpose of identi-
fying insurers from which to purchase such con-
tracts; 
‘‘(B) with respect to each insurer identified 
under subparagraph (A)— 
‘‘(i) considers the financial capability 
of such insurer to satisfy its obligations 
under the guaranteed retirement income 
contract; and 
‘‘(ii) considers the cost (including fees 
and commissions) of the guaranteed retire-
ment income contract offered by the in-
surer in relation to the benefits and prod-
uct features of the contract and adminis-
trative services to be provided under such 
contract; and 
‘‘(C) on the basis of such consideration, 
concludes that— 
VerDate Sep 11 2014 
03:34 Dec 15, 2017
Jkt 079200
PO 00000
Frm 00047
Fmt 6652
Sfmt 6201
E:\BILLS\H4637.IH
H4637
sradovich on DSK3GMQ082PROD with BILLS
‘‘(i) at the time of the selection, the 
insurer is financially capable of satisfying 
its obligations under the guaranteed retire-
ment income contract; and 
‘‘(ii) the relative cost of the selected 
guaranteed retirement income contract as 
described in subparagraph (B)(ii) is rea-
sonable. 
‘‘(2) FINANCIAL
CAPABILITY
OF
THE
IN-
SURER.—A fiduciary will be deemed to satisfy the 
requirements of paragraphs (1)(B)(i) and (1)(C)(i) 
if— 
‘‘(A) the fiduciary obtains written rep-
resentations from the insurer that— 
‘‘(i) the insurer is licensed to offer 
guaranteed retirement income contracts; 
‘‘(ii) the insurer, at the time of selec-
tion and for each of the immediately pre-
ceding 7 plan years— 
‘‘(I) operates under a certificate 
of authority from the insurance com-
missioner of its domiciliary State 
which has not been revoked or sus-
pended; 
VerDate Sep 11 2014 
03:34 Dec 15, 2017
Jkt 079200
PO 00000
Frm 00048
Fmt 6652
Sfmt 6201
E:\BILLS\H4637.IH
H4637
sradovich on DSK3GMQ082PROD with BILLS
‘‘(II) has filed audited financial 
statements in accordance with the 
laws of its domiciliary State under ap-
plicable statutory accounting prin-
ciples; 
‘‘(III) maintains (and has main-
tained) reserves which satisfies all the 
statutory requirements of all States 
where the insurer does business; and 
‘‘(IV) is not operating under an 
order of supervision, rehabilitation, or 
liquidation; 
‘‘(iii) the insurer undergoes, at least 
every 5 years, a financial examination 
(within the meaning of the law of its domi-
ciliary State) by the insurance commis-
sioner of the domiciliary State (or rep-
resentative, designee, or other party ap-
proved by such commissioner); and 
‘‘(iv) the insurer will notify the fidu-
ciary of any change in circumstances oc-
curring after the provision of the represen-
tations in clauses (i), (ii), and (iii) which 
would preclude the insurer from making 
such representations at the time of 
VerDate Sep 11 2014 
03:34 Dec 15, 2017
Jkt 079200
PO 00000
Frm 00049
Fmt 6652
Sfmt 6201
E:\BILLS\H4637.IH
H4637
sradovich on DSK3GMQ082PROD with BILLS
issuance of the guaranteed retirement in-
come contract, the insurer shall notify the 
fiduciary, in advance of the issuance of any 
guaranteed retirement income contract; 
and 
‘‘(B) after receiving such representations 
and as of the time of selection, the fiduciary 
has not received any notice described in sub-
paragraph (A)(iv) and is in possession of no 
other information which would cause the fidu-
ciary to question the representations provided. 
‘‘(3) NO
REQUIREMENT
TO
SELECT
LOWEST 
COST.—Nothing in this subsection shall be construed 
to require a fiduciary to select the lowest cost con-
tract. A fiduciary may consider the value of a con-
tract, including features and benefits of the contract 
and attributes of the insurer (including, without lim-
itation, the issuer’s financial strength) in conjunc-
tion with the cost of the contract. 
‘‘(4) TIME OF SELECTION.— 
‘‘(A) IN GENERAL.—For purposes of this 
subsection, the ‘time of selection’ is— 
‘‘(i) the time that the insurer and the 
contract are selected for distribution of 
VerDate Sep 11 2014 
03:34 Dec 15, 2017
Jkt 079200
PO 00000
Frm 00050
Fmt 6652
Sfmt 6201
E:\BILLS\H4637.IH
H4637
sradovich on DSK3GMQ082PROD with BILLS
benefits to a specific participant or bene-
ficiary; or 
‘‘(ii) if the fiduciary periodically re-
views the continuing appropriateness of the 
conclusion described in paragraph (1)(C) 
with respect to a selected insurer, taking 
into account the considerations described 
in such paragraph, the time that the in-
surer and the contract are selected to pro-
vide benefits at future dates to participants 
or beneficiaries under the plan. 
Nothing in the preceding sentence shall be con-
strued to require the fiduciary to review the ap-
propriateness of a selection after the purchase 
of a contract for a participant or beneficiary. 
‘‘(B) PERIODIC REVIEW.—A fiduciary will 
be deemed to have conducted the periodic re-
view described in subparagraph (A)(ii) if the fi-
duciary obtains the written representations de-
scribed in clauses (i), (ii), and (iii) of paragraph 
(2)(A) from the insurer on an annual basis, un-
less the fiduciary receives any notice described 
in paragraph (2)(A)(iv) or otherwise becomes 
aware of facts that would cause the fiduciary to 
question such representations. 
VerDate Sep 11 2014 
03:34 Dec 15, 2017
Jkt 079200
PO 00000
Frm 00051
Fmt 6652
Sfmt 6201
E:\BILLS\H4637.IH
H4637
sradovich on DSK3GMQ082PROD with BILLS
‘‘(5) LIMITED
LIABILITY.—A fiduciary which 
satisfies the requirements of this subsection shall not 
be liable following the distribution of any benefit or 
the investment by or on behalf of a participant or 
beneficiary pursuant to the selected guaranteed re-
tirement income contract for any losses that may re-
sult to the participant or beneficiary due to an in-
surer’s inability to satisfy its financial obligations 
under the terms of such contract. 
‘‘(6) DEFINITIONS.—For purposes of this sub-
section— 
‘‘(A) INSURER.—The term ‘insurer’ means 
an insurance company, insurance service, or in-
surance organization, including affiliates of 
such companies. 
‘‘(B) GUARANTEED RETIREMENT INCOME 
CONTRACT.—The term ‘guaranteed retirement 
income contract’ means an annuity contract for 
a fixed term or a contract (or provision or fea-
ture thereof) which provides guaranteed bene-
fits annually (or more frequently) for at least 
the remainder of the life of the participant or 
the joint lives of the participant and the partici-
VerDate Sep 11 2014 
03:34 Dec 15, 2017
Jkt 079200
PO 00000
Frm 00052
Fmt 6652
Sfmt 6201
E:\BILLS\H4637.IH
H4637
sradovich on DSK3GMQ082PROD with BILLS