described in subparagraph (B)(iii) (which-
ever is applicable). 
‘‘(D) DETERMINATION
OF
SUBSTANTIAL 
INCREASE FOR BENEFITS, RIGHTS, AND FEA-
TURES.—In applying subparagraph (C)(ii) for 
purposes of subparagraph (A)(iii), a plan shall 
be treated as having had a substantial increase 
in coverage or value of the benefits, rights, or 
features described in subparagraph (A) during 
the applicable 5-year period only if, during such 
period— 
‘‘(i) the number of participants cov-
ered by such benefits, rights, or features 
on the date such period ends is more than 
50 percent greater than the number of 
such participants on the first day of the 
plan year in which such period began, or 
‘‘(ii) such benefits, rights, and fea-
tures have been modified by 1 or more 
plan amendments in such a way that, as of 
the date the class is closed, the value of 
such benefits, rights, and features to the 
closed class as a whole is substantially 
greater than the value as of the first day
of such 5-year period, solely as a result of 
such amendments. 
‘‘(E) DETERMINATION
OF
SUBSTANTIAL 
INCREASE FOR AGGREGATE TESTING ON BENE-
FITS BASIS.—In applying subparagraph (C)(ii) 
for purposes of subparagraph (B)(iii)(IV), a 
plan shall be treated as having had a substan-
tial increase in coverage or benefits during the 
applicable 5-year period only if, during such pe-
riod— 
‘‘(i) the number of participants bene-
fitting under the plan on the date such pe-
riod ends is more than 50 percent greater 
than the number of such participants on 
the first day of the plan year in which such 
period began, or 
‘‘(ii) the average benefit provided to 
such participants on the date such period 
ends is more than 50 percent greater than 
the average benefit provided on the first 
day of the plan year in which such period 
began. 
‘‘(F) 
CERTAIN
EMPLOYEES
DIS-
REGARDED.—For purposes of subparagraphs 
(D) and (E), any increase in coverage or value
or in coverage or benefits, whichever is applica-
ble, which is attributable to such coverage and 
value or coverage and benefits provided to em-
ployees— 
‘‘(i) who became participants as a re-
sult of a merger, acquisition, or similar 
event which occurred during the 7-year pe-
riod preceding the date the class is closed, 
or 
‘‘(ii) who became participants by rea-
son of a merger of the plan with another 
plan which had been in effect for at least 
5 years as of the date of the merger, 
shall be disregarded, except that clause (ii) 
shall apply for purposes of subparagraph (D) 
only if, under the merger, the benefits, rights, 
or features under 1 plan are conformed to the 
benefits, rights, or features of the other plan 
prospectively. 
‘‘(G) RULES RELATING TO AVERAGE BEN-
EFIT.—For purposes of subparagraph (E)— 
‘‘(i) the average benefit provided to 
participants under the plan will be treated 
as having remained the same between the 
2 dates described in subparagraph (E)(ii)
if the benefit formula applicable to such 
participants has not changed between such 
dates, and 
‘‘(ii) if the benefit formula applicable 
to 1 or more participants under the plan 
has changed between such 2 dates, then 
the average benefit under the plan shall be 
considered to have increased by more than 
50 percent only if— 
‘‘(I) the total amount determined 
under section 430(b)(1)(A)(i) for all 
participants benefitting under the 
plan for the plan year in which the 5- 
year period described in subparagraph 
(E) ends, exceeds 
‘‘(II) the total amount deter-
mined under section 430(b)(1)(A)(i) 
for all such participants for such plan 
year, by using the benefit formula in 
effect for each such participant for 
the first plan year in such 5-year pe-
riod, by more than 50 percent. 
In the case of a CSEC plan (as defined in 
section 414(y)), the normal cost of the 
plan 
(as 
determined 
under 
section
the treatment under subparagraph (A) or (B) 
of the spun-off plan shall continue with respect 
to such other employer. 
‘‘(2) TESTING
OF
DEFINED
CONTRIBUTION 
PLANS.— 
‘‘(A) TESTING ON A BENEFITS BASIS.—A 
defined contribution plan shall be permitted to 
be tested on a benefits basis if— 
‘‘(i) such defined contribution plan 
provides make-whole contributions to a 
closed class of participants whose accruals 
under a defined benefit plan have been re-
duced or eliminated, 
‘‘(ii) for the plan year of the defined 
contribution plan as of which the class eli-
gible to receive such make-whole contribu-
tions closes and the 2 succeeding plan 
years, such closed class of participants sat-
isfies 
the 
requirements 
of 
section 
410(b)(2)(A)(i) (determined by applying 
the rules of paragraph (1)(I)), 
‘‘(iii) after the date as of which the 
class was closed, any plan amendment to 
the defined contribution plan which modi-
fies the closed class or the allocations, ben-
efits, rights, and features provided to such 
closed class does not discriminate signifi-
cantly in favor of highly compensated em-
ployees, and 
‘‘(iv) the class was closed before April 
5, 2017, or the defined benefit plan under 
clause (i) is described in paragraph (1)(C) 
(as applied for purposes of paragraph 
(1)(B)(iii)(IV)). 
‘‘(B) AGGREGATION WITH PLANS INCLUD-
ING MATCHING CONTRIBUTIONS.— 
‘‘(i) IN GENERAL.—With respect to 1 
or more defined contribution plans de-
scribed in subparagraph (A), for purposes 
of determining compliance with subsection 
(a)(4) and section 410(b), the portion of 
such plans which provides make-whole con-
tributions or other nonelective contribu-
tions may be aggregated and tested on a 
benefits basis with the portion of 1 or 
more other defined contribution plans 
which— 
‘‘(I) provides matching contribu-
tions 
(as 
defined 
in 
subsection 
(m)(4)(A)),
‘‘(II) provides annuity contracts 
described in section 403(b) which are 
purchased with matching contribu-
tions or nonelective contributions, or 
‘‘(III) consists of an employee 
stock ownership plan (within the 
meaning of section 4975(e)(7)) or a 
tax credit employee stock ownership 
plan (within the meaning of section 
409(a)). 
‘‘(ii) SPECIAL RULES FOR MATCHING 
CONTRIBUTIONS.—Rules similar to the 
rules of paragraph (1)(B)(ii) shall apply 
for purposes of clause (i). 
‘‘(C) SPECIAL
RULES
FOR
TESTING
DE-
FINED
CONTRIBUTION
PLAN
FEATURES
PRO-
VIDING MATCHING CONTRIBUTIONS TO CERTAIN 
OLDER, LONGER
SERVICE
PARTICIPANTS.—In 
the case of a defined contribution plan which 
provides benefits, rights, or features to a closed 
class of participants whose accruals under a de-
fined benefit plan have been reduced or elimi-
nated, the plan shall not fail to satisfy the re-
quirements of subsection (a)(4) solely by reason 
of the composition of the closed class or the
benefits, rights, or features provided to such 
closed class if the defined contribution plan and 
defined benefit plan otherwise meet the require-
ments of subparagraph (A) but for the fact that 
the make-whole contributions under the defined 
contribution plan are made in whole or in part 
through matching contributions. 
‘‘(D) SPUN-OFF PLANS.—For purposes of 
this paragraph, if a portion of a defined con-
tribution plan described in subparagraph (A) or 
(C) is spun off to another employer, the treat-
ment under subparagraph (A) or (C) of the 
spun-off plan shall continue with respect to the 
other employer if such plan continues to comply 
with the requirements of clauses (ii) (if the 
original plan was still within the 3-year period 
described in such clause at the time of the spin 
off) and (iii) of subparagraph (A), as deter-
mined for purposes of subparagraph (A) or (C), 
whichever is applicable. 
‘‘(3) DEFINITIONS.—For purposes of this sub-
section— 
‘‘(A) MAKE-WHOLE CONTRIBUTIONS.—Ex-
cept as otherwise provided in paragraph (2)(C), 
the term ‘make-whole contributions’ means non-
elective allocations for each employee in the 
class which are reasonably calculated, in a con-
sistent manner, to replace some or all of the re-
tirement benefits which the employee would 
have received under the defined benefit plan 
and any other plan or qualified cash or deferred 
arrangement under subsection (k)(2) if no 
change had been made to such defined benefit 
plan and such other plan or arrangement. For 
purposes of the preceding sentence, consistency 
shall not be required with respect to employees 
who were subject to different benefit formulas 
under the defined benefit plan. 
‘‘(B) REFERENCES TO CLOSED CLASS OF 
PARTICIPANTS.—References to a closed class of 
participants and similar references to a closed 
class shall include arrangements under which 1 
or more classes of participants are closed, ex-
cept that 1 or more classes of participants 
closed on different dates shall not be aggre-
gated for purposes of determining the date any 
such class was closed. 
‘‘(C) HIGHLY COMPENSATED EMPLOYEE.— 
The term ‘highly compensated employee’ has
the meaning given such term in section 
414(q).’’. 
(b) 
PARTICIPATION
REQUIREMENTS.—Section 
401(a)(26) of such Code is amended by adding at the end 
the following new subparagraph: 
‘‘(I) PROTECTED PARTICIPANTS.— 
‘‘(i) IN
GENERAL.—A plan shall be 
deemed to satisfy the requirements of sub-
paragraph (A) if— 
‘‘(I) the plan is amended— 
‘‘(aa) to cease all benefit ac-
cruals, or 
‘‘(bb) to provide future ben-
efit accruals only to a closed 
class of participants, 
‘‘(II) the plan satisfies subpara-
graph (A) (without regard to this sub-
paragraph) as of the effective date of 
the amendment, and 
‘‘(III) the amendment was adopt-
ed before April 5, 2017, or the plan is 
described in clause (ii). 
‘‘(ii) PLANS DESCRIBED.—A plan is 
described in this clause if the plan would 
be described in subsection (o)(1)(C), as ap-
(A) ELECTION
OF
EARLIER
APPLICA-
TION.—At the election of the plan sponsor, the 
amendments made by this section shall apply to 
plan years beginning after December 31, 2013. 
(B) CLOSED CLASSES OF PARTICIPANTS.— 
For 
purposes 
of 
paragraphs 
(1)(A)(iii), 
(1)(B)(iii)(IV), and (2)(A)(iv) of section 401(o) 
of the Internal Revenue Code of 1986 (as added 
by this section), a closed class of participants 
shall be treated as being closed before April 5, 
2017, if the plan sponsor’s intention to create 
such closed class is reflected in formal written 
documents and communicated to participants 
before such date. 
(C) 
CERTAIN
POST-ENACTMENT
PLAN 
AMENDMENTS.—A plan shall not be treated as 
failing to be eligible for the application of sec-
tion 
401(o)(1)(A), 
401(o)(1)(B)(iii), 
or 
401(a)(26) of such Code (as added by this sec-
tion) to such plan solely because in the case 
of— 
(i) such section 401(o)(1)(A), the plan 
was amended before the date of the enact-
ment of this Act to eliminate 1 or more 
benefits, rights, or features, and is further
amended after such date of enactment to 
provide such previously eliminated benefits, 
rights, or features to a closed class of par-
ticipants, or 
(ii) such section 401(o)(1)(B)(iii) or 
section 401(a)(26), the plan was amended 
before the date of the enactment of this 
Act to cease all benefit accruals, and is 
further amended after such date of enact-
ment to provide benefit accruals to a closed 
class of participants. Any such section 
shall only apply if the plan otherwise meets 
the requirements of such section and in ap-
plying such section, the date the class of 
participants is closed shall be the effective 
date of the later amendment. 
SEC. 203. FIDUCIARY SAFE HARBOR FOR SELECTION OF 
LIFETIME INCOME PROVIDER. 
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.— 
‘‘(1) IN GENERAL.—With respect to the selec-
tion of an insurer for 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— 
‘‘(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; 
‘‘(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 
issuance of the guaranteed retirement in-
come 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 insurer’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 
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. 
‘‘(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 
result 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-
pant’s designated beneficiary as part of an indi-
vidual account plan.’’. 
TITLE III—OTHER SAVINGS 
PROVISIONS 
SEC. 301. UNIVERSAL SAVINGS ACCOUNTS. 
(a) IN GENERAL.—Subchapter F of chapter 1 of the 
Internal Revenue Code of 1986 is amended by adding at 
the end the following new part: 
‘‘PART IX—UNIVERSAL SAVINGS ACCOUNTS 
‘‘Sec. 530U. Universal Savings Accounts.
‘‘SEC. 530U. UNIVERSAL SAVINGS ACCOUNTS. 
‘‘(a) GENERAL RULE.—A Universal Savings Account 
shall be exempt from taxation under this subtitle. Not-
withstanding the preceding sentence, such account shall 
be subject to the taxes imposed by section 511 (relating 
to imposition of tax on unrelated business income of chari-
table organizations). 
‘‘(b) UNIVERSAL SAVINGS ACCOUNT.—For purposes 
of this section, the term ‘Universal Savings Account’ 
means a trust created or organized in the United States 
by an individual for the exclusive benefit of such individual 
and which is designated (in such manner as the Secretary 
may prescribe) at the time of the establishment of the 
trust as a Universal Savings Account, but only if the writ-
ten governing instrument creating the trust meets the fol-
lowing requirements: 
‘‘(1) Except in the case of a qualified rollover 
contribution described in subsection (d)— 
‘‘(A) no contribution will be accepted un-
less it is in cash, and 
‘‘(B) contributions will not be accepted for 
the taxable year in excess of the contribution 
limit specified in subsection (c)(2). 
‘‘(2) No distribution will be made unless it is— 
‘‘(A) cash, or 
‘‘(B) property that—
‘‘(i) has a readily ascertainable fair 
market value, and 
‘‘(ii) is identified by the Secretary in 
regulations or other guidance as property 
to which this subparagraph applies. 
‘‘(3) The trustee is a bank (as defined in sec-
tion 408(n)) or another person who demonstrates to 
the satisfaction of the Secretary that the manner in 
which that person will administer the trust will be 
consistent with the requirements of this section. 
‘‘(4) No part of the trust assets will be invested 
in life insurance contracts or collectibles (as defined 
in section 408(m)). 
‘‘(5) The interest of an individual in the bal-
ance of his account is nonforfeitable. 
‘‘(6) The assets of the trust shall not be com-
mingled with other property except in a common 
trust fund or common investment fund. 
‘‘(c) TREATMENT
OF DISTRIBUTIONS
AND CON-
TRIBUTIONS.— 
‘‘(1) DISTRIBUTIONS.— 
‘‘(A) IN GENERAL.—Except as provided in 
subparagraph (B), any distribution from a Uni-
versal Savings Account shall not be includible in 
gross income.
‘‘(B) NET INCOME ATTRIBUTABLE TO EX-
CESS CONTRIBUTIONS.—Any distribution of net 
income described in section 4973(i)(2) shall be 
includible in the gross income of the account 
holder in the taxable year in which the con-
tribution to which such net income relates was 
made. 
‘‘(2) CONTRIBUTION LIMIT.— 
‘‘(A) 
IN
GENERAL.—The 
aggregate 
amount of contributions (other than qualified 
rollover contributions described in subsection 
(d)) for any taxable year to all Universal Sav-
ings Accounts maintained for the benefit of an 
individual shall not exceed the lesser of— 
‘‘(i) $2,500, or 
‘‘(ii) an amount equal to the com-
pensation (within the meaning of section 
219) includible in such individual’s gross 
income for such taxable year. 
‘‘(B) NO
CONTRIBUTIONS
FOR
DEPEND-
ENTS.—In the case of an individual who is a 
dependent of another taxpayer for a taxable 
year beginning in the calendar year in which 
such individual’s taxable year begins, the dollar
amount under subparagraph (A) for such indi-
vidual’s taxable year shall be zero. 
‘‘(C) SPECIAL RULE IN CASE OF JOINT RE-
TURN.— 
‘‘(i) IN GENERAL.—In the case of an 
individual to whom this clause applies, the 
amount determined under subparagraph 
(A)(ii) with respect to such individual for 
the taxable year shall not be less than an 
amount equal to the sum of— 
‘‘(I) the compensation of such in-
dividual includible in gross income for 
the taxable year, plus 
‘‘(II) the compensation of such 
individual’s spouse includible in gross 
income for the taxable year reduced 
(but not below zero) by the amount 
contributed for the taxable year to all 
Universal Savings Accounts main-
tained for the benefit of such spouse. 
‘‘(ii) INDIVIDUAL TO WHOM CLAUSE 
(i) APPLIES.—Clause (i) shall apply to any 
individual— 
‘‘(I) who files a joint return for 
the taxable year, and
‘‘(II) whose compensation includ-
ible in gross income for the taxable 
year is less than the compensation of 
such individual’s spouse includible in 
gross income for the taxable year. 
‘‘(D) COST-OF-LIVING
ADJUSTMENT.—In 
the case of any taxable year beginning in a cal-
endar year after 2019, the $2,500 amount 
under subparagraph (A)(i) shall be increased by 
an amount equal to— 
‘‘(i) such dollar amount, multiplied by 
‘‘(ii) the cost-of-living adjustment de-
termined under section 1(f)(3) for the cal-
endar year, determined by substituting 
‘calendar year 2018’ for ‘calendar year 
2016’ in subparagraph (A)(ii) thereof. 
If any amount after adjustment under the pre-
ceding sentence is not a multiple of $100, such 
amount shall be rounded to the next lower mul-
tiple of $100. 
‘‘(d) QUALIFIED ROLLOVER CONTRIBUTION.—For 
purposes of this section, the term ‘qualified rollover con-
tribution’ means a contribution to a Universal Savings Ac-
count from another such account of the same individual,
but only if such amount is contributed not later than the 
60th day after the distribution from such other account. 
‘‘(e) TREATMENT
OF ACCOUNT UPON DEATH.— 
Upon death of any account holder of a Universal Savings 
Account— 
‘‘(1) SPOUSE.—In the case of the account hold-
er’s surviving spouse acquiring such account holder’s 
interest in such account by reason of the death of 
the account holder, such account shall be treated as 
if the spouse were the account holder. 
‘‘(2) OTHER CASES.—In any other case— 
‘‘(A) all amounts in such account shall be 
treated as distributed on the date of such indi-
vidual’s death, and 
‘‘(B) such account shall cease to be treated 
as a Universal Savings Account. 
‘‘(f) OTHER SPECIAL RULES.— 
‘‘(1) COMMUNITY PROPERTY LAWS.—This sec-
tion shall be applied without regard to any commu-
nity property laws. 
‘‘(2) LOSS OF TAXATION EXEMPTION OF AC-
COUNT
WHERE
INDIVIDUAL
ENGAGES
IN
PROHIB-
ITED TRANSACTION; EFFECT OF PLEDGING ACCOUNT 
AS SECURITY.—Rules similar to the rules of para-
graphs (2) and (4) of section 408(e) shall apply to 
any Universal Savings Account. 
‘‘(g) REPORTS.—The trustee of a Universal Savings 
Account shall make such reports regarding such account 
to the Secretary and to the account holder with respect 
to contributions, distributions, and such other matters as 
the Secretary may require. Such reports shall be— 
‘‘(1) filed at such time and in such manner as 
the Secretary provides, and 
‘‘(2) furnished to account holders— 
‘‘(A) not later than January 31 of the cal-
endar year following the calendar year to which 
such reports relate, and 
‘‘(B) in such manner as the Secretary pro-
vides.’’. 
(b) TAX ON EXCESS CONTRIBUTIONS.— 
(1) IN
GENERAL.—Section 4973(a) of such 
Code is amended by striking ‘‘or’’ at the end of 
paragraph (5), by inserting ‘‘or’’ at the end of para-
graph (6), and by inserting after paragraph (6) the 
following new paragraph: 
‘‘(7) a Universal Savings Account (as defined in 
section 530U),’’.
(2) EXCESS CONTRIBUTION.—Section 4973 of 
such Code is amended by adding at the end the fol-
lowing new subsection: 
‘‘(i) EXCESS CONTRIBUTIONS TO UNIVERSAL SAV-
INGS ACCOUNTS.—For purposes of this section— 
‘‘(1) IN GENERAL.—In the case of Universal 
Savings Accounts (within the meaning of section 
530U), the term ‘excess contributions’ means the 
sum of— 
‘‘(A) the amount (if any) by which the 
amount contributed for the taxable year to such 
accounts (other than qualified rollover contribu-
tions (as defined in section 530U(d))) exceeds 
the contribution limit under section 530U(c)(2) 
for such taxable year, and 
‘‘(B) the amount determined under this 
subsection for the preceding taxable year, re-
duced by the sum of— 
‘‘(i) the distributions out of the ac-
count for the taxable year, and 
‘‘(ii) the amount (if any) by which the 
maximum amount allowable as a contribu-
tion under section 530U(c)(2) for the tax-
able year exceeds the amount contributed 
to the accounts for the taxable year.
(f) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2018. 
SEC. 302. EXPANSION OF SECTION 529 PLANS. 
(a) DISTRIBUTIONS FOR CERTAIN EXPENSES ASSO-
CIATED
WITH
REGISTERED
APPRENTICESHIP
PRO-
GRAMS.—Section 529(c) of the Internal Revenue Code of 
1986 is amended by adding at the end the following new 
paragraph: 
‘‘(8) TREATMENT OF CERTAIN EXPENSES ASSO-
CIATED
WITH
REGISTERED
APPRENTICESHIP
PRO-
GRAMS.—Any reference in this subsection to the 
term ‘qualified higher education expense’ shall in-
clude a reference to expenses for fees, books, sup-
plies, and equipment required for the participation 
of a designated beneficiary in an apprenticeship pro-
gram registered and certified with the Secretary of 
Labor under section 1 of the National Apprentice-
ship Act (29 U.S.C. 50).’’. 
(b) DISTRIBUTIONS FOR CERTAIN HOMESCHOOLING 
EXPENSES.—Section 529(c)(7) of such Code is amended 
by striking ‘‘include a reference to’’ and all that follows 
and inserting ‘‘include a reference to— 
‘‘(A) expenses for tuition in connection 
with enrollment or attendance of a designated
beneficiary at an elementary or secondary pub-
lic, private, or religious school, and 
‘‘(B) expenses, with respect to a des-
ignated beneficiary, for— 
‘‘(i) curriculum and curricular mate-
rials, 
‘‘(ii) books or other instructional ma-
terials, 
‘‘(iii) online educational materials, 
‘‘(iv) tuition for tutoring or edu-
cational classes outside of the home (but 
only if the tutor or class instructor is not 
related (within the meaning of section 
152(d)(2)) to the student), 
‘‘(v) dual enrollment in an institution 
of higher education, and 
‘‘(vi) educational therapies for stu-
dents with disabilities, 
in connection with a homeschool (whether treat-
ed as a homeschool or a private school for pur-
poses of applicable State law).’’. 
(c) DISTRIBUTIONS
FOR QUALIFIED EDUCATION 
LOAN REPAYMENTS.—
(1) IN GENERAL.—Section 529(c) of such Code, 
as amended by subsection (a), is amended by adding 
at the end the following new paragraph: 
‘‘(9) TREATMENT
OF
QUALIFIED
EDUCATION 
LOAN REPAYMENTS.— 
‘‘(A) IN GENERAL.—Any reference in this 
subsection to the term ‘qualified higher edu-
cation expense’ shall include a reference to 
amounts paid as principal or interest on any 
qualified education loan (as defined in section 
221(d)) of the designated beneficiary or a sib-
ling of the designated beneficiary. 
‘‘(B) LIMITATION.—The amount of dis-
tributions treated as a qualified higher edu-
cation expense under this paragraph with re-
spect to the loans of any individual shall not ex-
ceed $10,000 (reduced by the amount of dis-
tributions so treated for all prior taxable years). 
‘‘(C) SPECIAL
RULES
FOR
SIBLINGS
OF 
THE DESIGNATED BENEFICIARY.— 
‘‘(i) SEPARATE
ACCOUNTING.—For 
purposes of subparagraph (B) and sub-
section (d), amounts treated as a qualified 
higher education expense with respect to 
the loans of a sibling of the designated
beneficiary shall be taken into account 
with respect to such sibling and not with 
respect to such designated beneficiary. 
‘‘(ii) SIBLING
DEFINED.—For pur-
poses of this paragraph, the term ‘sibling’ 
means an individual who bears a relation-
ship to the designated beneficiary which is 
described in section 152(d)(2)(B).’’. 
(2) COORDINATION WITH DEDUCTION FOR STU-
DENT LOAN INTEREST.—Section 221(e)(1) of such 
Code is amended by adding at the end the following: 
‘‘The deduction otherwise allowable under subsection 
(a) (prior to the application of subsection (b)) to the 
taxpayer for any taxable year shall be reduced (but 
not below zero) by so much of the distributions 
treated as a qualified higher education expense 
under section 529(c)(9) with respect to loans of the 
taxpayer as would be includible in gross income 
under section 529(c)(3)(A) for such taxable year but 
for such treatment.’’. 
(d) DISTRIBUTIONS FOR CERTAIN ELEMENTARY AND 
SECONDARY SCHOOL EXPENSES IN ADDITION TO TUI-
TION.—Section 529(c)(7)(A), as amended by subsection 
(b), is amended to read as follows:
‘‘(A) 
expenses 
described 
in 
section 
530(b)(3)(A)(i) in connection with enrollment 
or attendance of a designated beneficiary at an 
elementary or secondary public, private, or reli-
gious school, and’’. 
(e) UNBORN CHILDREN ALLOWED
AS ACCOUNT 
BENEFICIARIES.—Section 529(e) is amended by adding at 
the end the following new paragraph: 
‘‘(6) TREATMENT OF UNBORN CHILDREN.— 
‘‘(A) IN GENERAL.—Nothing shall prevent 
an unborn child from being treated as a des-
ignated beneficiary or an individual under this 
section. 
‘‘(B) UNBORN
CHILD.—For purposes of 
this paragraph— 
‘‘(i) IN GENERAL.—The term ‘unborn 
child’ means a child in utero. 
‘‘(ii) CHILD
IN
UTERO.—The term 
‘child in utero’ means a member of the 
species homo sapiens, at any stage of de-
velopment, who is carried in the womb.’’. 
(f) EFFECTIVE DATES.— 
(1) IN
GENERAL.—Except as otherwise pro-
vided in this subsection, the amendments made by
this section shall apply to distributions made after 
December 31, 2018. 
(2) UNBORN CHILDREN ALLOWED AS ACCOUNT 
BENEFICIARIES.—The amendment made by sub-
section (e) shall apply to contributions made after 
December 31, 2018. 
SEC. 303. PENALTY-FREE WITHDRAWALS FROM RETIRE-
MENT PLANS FOR INDIVIDUALS IN CASE OF 
BIRTH OF CHILD OR ADOPTION. 
(a) IN GENERAL.—Section 72(t)(2) of the Internal 
Revenue Code of 1986 is amended by adding at the end 
the following new subparagraph: 
‘‘(H) DISTRIBUTIONS FROM RETIREMENT 
PLANS IN CASE OF BIRTH OF CHILD OR ADOP-
TION.— 
‘‘(i) 
IN
GENERAL.—Any 
qualified 
birth or adoption distribution. 
‘‘(ii) 
LIMITATION.—The 
aggregate 
amount which may be treated as qualified 
birth or adoption distributions by any indi-
vidual with respect to any birth or adop-
tion shall not exceed $7,500. 
‘‘(iii) QUALIFIED BIRTH OR ADOPTION 
DISTRIBUTION.—For purposes of this sub-
paragraph—
‘‘(I) IN
GENERAL.—The term 
‘qualified birth or adoption distribu-
tion’ means any distribution from an 
applicable eligible retirement plan to 
an individual if made during the 1- 
year period beginning on the date on 
which a child of the individual is born 
or on which the legal adoption by the 
individual of an eligible child is final-
ized. 
‘‘(II) 
ELIGIBLE
CHILD.—The 
term ‘eligible child’ means any indi-
vidual (other than a child of the tax-
payer’s spouse) who has not attained 
age 18 or is physically or mentally in-
capable of self-support. 
‘‘(iv) TREATMENT OF PLAN DISTRIBU-
TIONS.— 
‘‘(I) IN GENERAL.—If a distribu-
tion to an individual would (without 
regard to clause (ii)) be a qualified 
birth or adoption distribution, a plan 
shall not be treated as failing to meet 
any requirement of this title merely 
because the plan treats the distribu-
tion as a qualified birth or adoption 
distribution, unless the aggregate 
amount of such distributions from all 
plans maintained by the employer 
(and any member of any controlled 
group which includes the employer) to 
such individual exceeds $7,500. 
‘‘(II) CONTROLLED GROUP.—For 
purposes of subclause (I), the term 
‘controlled group’ means any group 
treated as a single employer under 
subsection (b), (c), (m), or (o) of sec-
tion 414. 
‘‘(v) AMOUNT DISTRIBUTED MAY BE 
REPAID.— 
‘‘(I) IN
GENERAL.—Any indi-
vidual who receives a qualified birth 
or adoption distribution may make 
one or more contributions in an ag-
gregate amount not to exceed the 
amount of such distribution to an ap-
plicable eligible retirement plan of 
which such individual is a beneficiary 
and to which a rollover contribution of 
such distribution could be made under
section 402(c), 403(a)(4), 403(b)(8), 
408(d)(3), or 457(e)(16), as the case 
may be. 
‘‘(II) LIMITATION ON CONTRIBU-
TIONS TO APPLICABLE ELIGIBLE RE-
TIREMENT
PLANS
OTHER
THAN 
IRAS.—The aggregate amount of con-
tributions made by an individual 
under subclause (I) to any applicable 
eligible retirement plan which is not 
an individual retirement plan shall not 
exceed the aggregate amount of quali-
fied birth or adoption distributions 
which are made from such plan to 
such individual. Subclause (I) shall 
not apply to contributions to any ap-
plicable eligible retirement plan which 
is not an individual retirement plan 
unless the individual is eligible to 
make contributions (other than those 
described in subclause (I)) to such ap-
plicable eligible retirement plan. 
‘‘(III) TREATMENT
OF
REPAY-
MENTS OF DISTRIBUTIONS FROM AP-
PLICABLE
ELIGIBLE
RETIREMENT
PLANS OTHER THAN IRAS.—If a con-
tribution is made under subclause (I) 
with respect to a qualified birth or 
adoption distribution from an applica-
ble eligible retirement plan other than 
an individual retirement plan, then 
the taxpayer shall, to the extent of the 
amount of the contribution, be treated 
as having received such distribution in 
an eligible rollover distribution (as de-
fined in section 402(c)(4)) and as 
having transferred the amount to the 
applicable eligible retirement plan in a 
direct trustee to trustee transfer with-
in 60 days of the distribution. 
‘‘(IV) TREATMENT
OF
REPAY-
MENTS
FOR
DISTRIBUTIONS
FROM 
IRAS.—If a contribution is made 
under subclause (I) with respect to a 
qualified birth or adoption distribution 
from an individual retirement plan, 
then, to the extent of the amount of 
the contribution, such distribution 
shall be treated as a distribution de-
scribed in section 408(d)(3) and as
having been transferred to the appli-
cable eligible retirement plan in a di-
rect trustee to trustee transfer within 
60 days of the distribution. 
‘‘(vi) 
DEFINITION
AND
SPECIAL 
RULES.—For purposes of this subpara-
graph— 
‘‘(I) APPLICABLE ELIGIBLE RE-
TIREMENT PLAN.—The term ‘applica-
ble eligible retirement plan’ means an 
eligible retirement plan (as defined in 
section 402(c)(8)(B)) other than a de-
fined benefit plan. 
‘‘(II) EXEMPTION OF DISTRIBU-
TIONS
FROM
TRUSTEE
TO
TRUSTEE 
TRANSFER
AND
WITHHOLDING 
RULES.—For purposes of sections 
401(a)(31), 402(f), and 3405, a quali-
fied birth or adoption distribution 
shall not be treated as an eligible roll-
over distribution. 
‘‘(III) TAXPAYER MUST INCLUDE 
TIN.—A distribution shall not be 
treated as a qualified birth or adop-
tion distribution with respect to any
child or eligible child unless the tax-
payer includes the name, age, and 
TIN of such child or eligible child on 
the taxpayer’s return of tax for the 
taxable year. 
‘‘(IV) DISTRIBUTIONS
TREATED 
AS MEETING PLAN DISTRIBUTION RE-
QUIREMENTS.—Any qualified birth or 
adoption distribution shall be treated 
as meeting the requirements of sec-
tions 
401(k)(2)(B)(i), 
403(b)(7)(A)(ii), 
403(b)(11), 
and 
457(d)(1)(A).’’. 
(b) EFFECTIVE DATE.—The amendments made by 
this section shall apply to distributions made after Decem-
ber 31, 2018. 
TITLE IV—BUDGETARY EFFECTS 
SEC. 401. BUDGETARY EFFECTS. 
(a) STATUTORY PAYGO SCORECARDS.—The budg-
etary effects of this Act shall not be entered on either 
PAYGO scorecard maintained pursuant to section 4(d) of 
the Statutory Pay-As-You-Go Act of 2010. 
(b) SENATE PAYGO SCORECARDS.—The budgetary 
effects of this Act shall not be entered on any PAYGO
scorecard maintained for purposes of section 4106 of H. 
Con. Res. 71 (115th Congress). 
Passed the House of Representatives September 27, 
2018. 
Attest: 
Clerk.