H. R. 2617—838 
(d) AMENDMENT OF EMPLOYEE RETIREMENT INCOME SECURITY 
ACT OF 1974.—Subsection (b) of section 408 of the Employee Retire-
ment Income Security Act of 1974 (29 U.S.C. 1108(b)) is amended 
by adding at the end the following new paragraph: 
‘‘(21) The provision of a de minimis financial incentive 
described in section 401(k)(4)(A) or section 403(b)(12)(A) of the 
Internal Revenue Code of 1986.’’. 
(e) EFFECTIVE DATE.—The amendments made by this section 
shall apply with respect to plan years beginning after the date 
of enactment of this Act. 
SEC. 114. DEFERRAL OF TAX FOR CERTAIN SALES OF EMPLOYER 
STOCK TO EMPLOYEE STOCK OWNERSHIP PLAN SPON-
SORED BY S CORPORATION. 
(a) IN GENERAL.—Section 1042(c)(1)(A) is amended by striking 
‘‘domestic C corporation’’ and inserting ‘‘domestic corporation’’. 
(b) 10 PERCENT LIMITATION ON APPLICATION OF GAIN ON SALE 
OF S CORPORATION STOCK.—Section 1042 is amended by adding 
at the end the following new subsection: 
‘‘(h) APPLICATION OF SECTION TO SALE OF STOCK IN S CORPORA-
TION.—In the case of the sale of qualified securities of an S corpora-
tion, the election under subsection (a) may be made with respect 
to not more than 10 percent of the amount realized on such sale 
for purposes of determining the amount of gain not recognized 
and the extent to which (if at all) the amount realized on such 
sale exceeds the cost of qualified replacement property. The portion 
of adjusted basis that is properly allocable to the portion of the 
amount realized with respect to which the election is made under 
this subsection shall be taken into account for purposes of the 
preceding sentence.’’. 
(c) EFFECTIVE DATE.—The amendments made by this section 
shall apply to sales after December 31, 2027. 
SEC. 115. WITHDRAWALS FOR CERTAIN EMERGENCY EXPENSES. 
(a) IN GENERAL.—Paragraph (2) of section 72(t) is amended 
by adding at the end the following new subparagraph: 
‘‘(I) 
DISTRIBUTIONS
FOR
CERTAIN
EMERGENCY 
EXPENSES.— 
‘‘(i) IN GENERAL.—Any emergency personal expense 
distribution. 
‘‘(ii) ANNUAL LIMITATION.—Not more than 1 dis-
tribution per calendar year may be treated as an emer-
gency personal expense distribution by any individual. 
‘‘(iii) DOLLAR LIMITATION.—The amount which may 
be treated as an emergency personal expense distribu-
tion by any individual in any calendar year shall not 
exceed the lesser of $1,000 or an amount equal to 
the excess of— 
‘‘(I) 
the 
individual’s 
total 
nonforfeitable 
accrued benefit under the plan (the individual’s 
total interest in the plan in the case of an indi-
vidual retirement plan), determined as of the date 
of each such distribution, over 
‘‘(II) $1,000. 
‘‘(iv) EMERGENCY
PERSONAL
EXPENSE
DISTRIBU-
TION.—For purposes of this subparagraph, the term 
‘emergency personal expense distribution’ means any 
distribution from an applicable eligible retirement plan
H. R. 2617—839 
(as defined in subparagraph (H)(vi)(I)) to an individual 
for purposes of meeting unforeseeable or immediate 
financial needs relating to necessary personal or family 
emergency 
expenses. 
The 
administrator 
of 
an 
applicable eligible retirement plan may rely on an 
employee’s written certification that the employee 
satisfies the conditions of the preceding sentence in 
determining whether any distribution is an emergency 
personal expense distribution. The Secretary may pro-
vide by regulations for exceptions to the rule of the 
preceding sentence in cases where the plan adminis-
trator has actual knowledge to the contrary of the 
employee’s 
certification, 
and 
for 
procedures 
for 
addressing cases of employee misrepresentation. 
‘‘(v) TREATMENT OF PLAN DISTRIBUTIONS.—If a dis-
tribution to an individual would (without regard to 
clause (ii) or (iii)) be an emergency personal expense 
distribution, a plan shall not be treated as failing 
to meet any requirement of this title merely because 
the plan treats the distribution as an emergency per-
sonal expense distribution, unless the number or the 
aggregate amount of such distributions from all plans 
maintained by the employer (and any member of any 
controlled group which includes the employer, deter-
mined as provided in subparagraph (H)(iv)(II)) to such 
individual exceeds the limitation determined under 
clause (ii) or (iii). 
‘‘(vi) AMOUNT DISTRIBUTED MAY BE REPAID.—Rules 
similar to the rules of subparagraph (H)(v) shall apply 
with respect to an individual who receives a distribu-
tion to which clause (i) applies. 
‘‘(vii) 
LIMITATION
ON
SUBSEQUENT
DISTRIBU-
TIONS.—If a distribution is treated as an emergency 
personal expense distribution in any calendar year 
with respect to a plan of the employee, no amount 
may be treated as such a distribution during the imme-
diately following 3 calendar years with respect to such 
plan unless— 
‘‘(I) such previous distribution is fully repaid 
to such plan pursuant to clause (vi), or 
‘‘(II) the aggregate of the elective deferrals 
and employee contributions to the plan (the total 
amounts contributed to the plan in the case of 
an individual retirement plan) subsequent to such 
previous distribution is at least equal to the 
amount of such previous distribution which has 
not been so repaid. 
‘‘(viii) SPECIAL RULES.—Rules similar to the rules 
of subclauses (II) and (IV) of subparagraph (H)(vi) shall 
apply to any emergency personal expense distribu-
tion.’’. 
(b) CROSS-REFERENCE.—See section 311 of this Act for amend-
ment to section 72(t)(2)(H)(v)(I) of the Internal Revenue Code of 
1986 limiting repayment of distribution to 3 years. 
(c) EFFECTIVE DATE.—The amendments made by this section 
shall apply to distributions made after December 31, 2023.
H. R. 2617—840 
SEC. 116. ALLOW ADDITIONAL NONELECTIVE CONTRIBUTIONS TO 
SIMPLE PLANS. 
(a) IN GENERAL.— 
(1) MODIFICATION TO DEFINITION.—Subparagraph (A) of sec-
tion 408(p)(2) is amended by striking ‘‘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 nonelective contribu-
tions of a uniform percentage (up to 10 percent) of 
compensation 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, 
but such contributions with respect to any employee 
shall not exceed $5,000 for the year, and’’. 
(2) LIMITATION.—Subparagraph (A) of section 408(p)(2) is 
amended by adding at the end the following: ‘‘The compensation 
taken into account under clause (iv) for any year shall not 
exceed the limitation in effect for such year under section 
401(a)(17).’’. 
(3) OVERALL DOLLAR LIMIT ON CONTRIBUTIONS.—Paragraph 
(8) of section 408(p) is amended to read as follows: 
‘‘(8) COORDINATION WITH MAXIMUM LIMITATION.—In the case 
of any simple retirement account— 
‘‘(A) subsection (a)(1) shall be applied by substituting 
for ‘the amount in effect for such taxable year under section 
219(b)(1)(A)’ the following: ‘the sum of the dollar amount 
in effect under subsection (p)(2)(A)(ii), the employer con-
tribution 
required 
under 
subsection 
(p)(2)(A)(iii) 
or 
(p)(2)(B)(i), whichever is applicable, and a contribution 
which meets the requirement of subsection (p)(2)(A)(iv) 
with respect to the employee’, and 
‘‘(B) subsection (b)(2)(B) shall be applied by sub-
stituting for ‘the dollar amount in effect under section 
219(b)(1)(A)’ the following: ‘the sum of the dollar amount 
in effect under subsection (p)(2)(A)(ii), the employer con-
tribution 
required 
under 
subsection 
(p)(2)(A)(iii) 
or 
(p)(2)(B)(i), whichever is applicable, and a contribution 
which meets the requirement of subsection (p)(2)(A)(iv) 
with respect to the employee’.’’. 
(4) ADJUSTMENT FOR INFLATION.—Paragraph (2) of section 
408(p), as amended by this Act, is further amended by adding 
at the end the following new subparagraph: 
‘‘(G) ADJUSTMENT FOR INFLATION.—In the case of tax-
able years beginning after December 31, 2024, the $5,000 
amount in subparagraph (A)(iv)(II) shall be increased by 
an amount equal to— 
‘‘(i) such amount, multiplied by 
‘‘(ii) the cost-of-living adjustment determined 
under section 1(f)(3) for the calendar year in which 
the taxable year begins, determined by substituting 
‘2023’ for ‘2016’ in subparagraph (A)(ii) thereof. 
If any amount as adjusted under the preceding sentence 
is not a multiple of $100, such amount shall be rounded 
to the nearest multiple of $100.’’. 
(b) CONFORMING AMENDMENTS.—
H. R. 2617—841 
(1) Section 408(p)(2)(A)(v), as redesignated by subsection 
(a), is amended by striking ‘‘or (iii)’’ and inserting ‘‘, (iii), or 
(iv)’’. 
(2) Section 401(k)(11)(B)(i) is amended by striking ‘‘and’’ 
at the end of subclause (II), by redesignating subclause (III) 
as subclause (IV), and by inserting after subclause (II) the 
following new subclause: 
‘‘(III) the employer may make nonelective con-
tributions of a uniform percentage (up to 10 per-
cent) of compensation, but not to exceed the 
amount in effect under section 408(p)(2)(A)(iv) in 
any year, 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, and’’. 
(3) Section 401(k)(11)(B)(i)(IV), as redesignated by para-
graph (2), is amended by striking ‘‘or (II)’’ and inserting ‘‘, 
(II), or (III)’’. 
(c) EFFECTIVE DATE.—The amendments made by this section 
shall apply to taxable years beginning after December 31, 2023. 
SEC. 117. CONTRIBUTION LIMIT FOR SIMPLE PLANS. 
(a) IN GENERAL.—Subparagraph (E) of section 408(p)(2) is 
amended— 
(1) by striking ‘‘amount is’’ and all that follows in clause 
(i) and inserting the following: ‘‘dollar amount is— 
‘‘(I) the adjusted dollar amount in the case 
of an eligible employer described in clause (iii) 
which had not more than 25 employees who 
received at least $5,000 of compensation from the 
employer for the preceding year, 
‘‘(II) the adjusted dollar amount in the case 
of an eligible employer described in clause (iii) 
which is not described in subclause (I) and which 
elects, at such time and in such manner as pre-
scribed by the Secretary, the application of this 
subclause for the year, and 
‘‘(III) $10,000 in any other case.’’, 
(2) by redesignating clause (ii) as clause (iii) and by 
inserting after clause (i) the following new clause: 
‘‘(ii) ADJUSTED DOLLAR AMOUNT.—For purposes of 
clause (i), the adjusted dollar amount is an amount 
equal to 110 percent of the dollar amount in effect 
under clause (i)(III) for calendar year 2024.’’, 
(3) by striking ‘‘ADJUSTMENT.—In the case of’’ in clause 
(iii), as so redesignated, and inserting ‘‘ADJUSTMENT.— 
‘‘(I) CERTAIN LARGE EMPLOYERS.—In the case 
of’’, 
(4) by striking ‘‘clause (i)’’ in such clause (iii) and inserting 
‘‘clause (i)(III)’’, and 
(5) by adding at the end of such clause (iii) the following 
new subclause: 
‘‘(II) OTHER EMPLOYERS.—In the case of a year 
beginning after December 31, 2024, the Secretary 
shall adjust annually the adjusted dollar amount 
under clause (ii) in the manner provided under 
subclause (I) of this clause, except that the base
H. R. 2617—842 
period taken into account shall be the calendar 
quarter beginning July 1, 2023.’’. 
(b) CATCH-UP CONTRIBUTIONS.—Paragraph (2) of section 414(v) 
is amended— 
(1) in subparagraph (B)— 
(A) by striking ‘‘the applicable’’ in clause (ii), as 
amended by this Act, and inserting ‘‘except as provided 
in clause (iii), the applicable’’; and 
(B) by adding at the end the following new clause: 
‘‘(iii) In the case of an applicable employer plan— 
‘‘(I) which is maintained by an eligible 
employer described in section 408(p)(2)(E)(i)(I), or 
‘‘(II) to which an election under section 
408(p)(2)(E)(i)(II) applies for the year (including 
a plan described in section 401(k)(11) which is 
maintained by an eligible employer described in 
section 408(p)(2)(E)(i)(II) and to which such elec-
tion applies by reason of subparagraphs (B)(i)(I) 
and (E) of section 401(k)(11)), 
the applicable dollar amount is an amount equal to 
110 percent of the dollar amount in effect under clause 
(ii) for calendar year 2024.’’, and 
(2) in subparagraph (C), as amended by this Act— 
(A) by striking ‘‘ADJUSTMENT.—In the case of’’ and 
inserting the following: ‘‘ADJUSTMENT.— 
‘‘(i) CERTAIN LARGE EMPLOYERS.—In the case of’’, 
and 
(B) by adding at the end the following new clause: 
‘‘(ii) OTHER
EMPLOYERS.—In the case of a year 
beginning after December 31, 2024, the Secretary shall 
adjust annually the dollar amount described in 
subparagraph (B)(iii) in the manner provided under 
clause (i) of this subparagraph, except that the base 
period taken into account shall be the calendar quarter 
beginning July 1, 2023.’’. 
(c) EMPLOYER MATCH.—Clause (ii) of section 408(p)(2)(C) is 
amended— 
(1) by striking ‘‘The term’’ in subclause (I) and inserting 
‘‘Except as provided in subclause (IV), the term’’, 
(2) by adding at the end the following new subclause: 
‘‘(IV) SPECIAL
RULE
FOR
ELECTING
LARGER 
EMPLOYERS.—In the case of an employer which 
had more than 25 employees who received at least 
$5,000 of compensation from the employer for the 
preceding year, and which makes the election 
under subparagraph (E)(i)(II) for any year, sub-
clause (I) shall be applied for such year by sub-
stituting ‘4 percent’ for ‘3 percent’.’’, and 
(3) by striking ‘‘3 percent’’ each place it appears in sub-
clauses (II) and (III) and inserting ‘‘the applicable percentage’’. 
(d) INCREASE IN NONELECTIVE EMPLOYER CONTRIBUTION FOR 
ELECTING
LARGER
EMPLOYERS.—Subparagraph (B) of section 
408(p)(2) is amended by adding at the end the following new clause: 
‘‘(iii) 
SPECIAL
RULE
FOR
ELECTING
LARGER 
EMPLOYERS.—In the case of an employer which had 
more than 25 employees who received at least $5,000 
of compensation from the employer for the preceding
H. R. 2617—843 
year, and which makes the election under subpara-
graph (E)(i)(II) for any year, clause (i) shall be applied 
for such year by substituting ‘3 percent’ for ‘2 percent’.’’. 
(e) TRANSITION RULE.—Paragraph (2) of section 408(p), as 
amended by this Act, is further amended by adding at the end 
the following new subparagraph: 
‘‘(H) 2-YEAR
GRACE
PERIOD.—An eligible employer 
which had not more than 25 employees who received at 
least $5,000 of compensation from the employer for 1 or 
more years, and which has more than 25 such employees 
for any subsequent year, shall be treated for purposes 
of subparagraph (E)(i) as having 25 such employees for 
the 2 years following the last year the employer had not 
more than 25 such employees, and not as having made 
the election under subparagraph (E)(i)(II) for such 2 years. 
Rules similar to the second sentence of subparagraph 
(C)(i)(II) shall apply for purposes of this subparagraph.’’. 
(f) AMENDMENTS APPLY ONLY
IF EMPLOYER HAS NOT HAD 
ANOTHER PLAN WITHIN 3 YEARS.—Subparagraph (E) of section 
408(p)(2), as amended by subsection (a), is further amended by 
adding at the end the following new clause: 
‘‘(iv) EMPLOYER
HAS
NOT
HAD
ANOTHER
PLAN 
WITHIN
YEARS.—An eligible employer is described 
in this clause only if, during the 3-taxable-year period 
immediately preceding the 1st year the employer main-
tains the qualified salary reduction arrangement under 
this paragraph, neither the employer nor any member 
of any controlled group including the employer (or any 
predecessor of either) established or maintained any 
plan described in clause (i), (ii), or (iv) of section 
219(g)(5)(A) with respect to which contributions were 
made, or benefits were accrued, for substantially the 
same employees as are eligible to participate in such 
qualified salary reduction arrangement.’’. 
(g) CONFORMING AMENDMENTS RELATING TO SIMPLE 401(k)S.— 
(1) Subclause (I) of section 401(k)(11)(B)(i) is amended by 
inserting ‘‘(after the application of any election under section 
408(p)(2)(E)(i)(II))’’ before the comma. 
(2) Paragraph (11) of section 401(k) is amended by adding 
at the end the following new subparagraph: 
‘‘(E) 
EMPLOYERS
ELECTING
INCREASED
CONTRIBU-
TIONS.—In the case of an employer which applies an elec-
tion under section 408(p)(2)(E)(i)(II) for purposes of the 
contribution 
requirements 
of 
this 
paragraph 
under 
subparagraph (B)(i)(I), rules similar to the rules of subpara-
graphs (B)(iii), (C)(ii)(IV), and (G) of section 408(p)(2) shall 
apply for purposes of subparagraphs (B)(i)(II) and (B)(ii) 
of this paragraph.’’. 
(h) EFFECTIVE DATE.—The amendments made by this section 
shall apply to taxable years beginning after December 31, 2023. 
(i) REPORTS BY SECRETARY.— 
(1) IN GENERAL.—The Secretary of the Treasury shall, not 
later than December 31, 2024, and annually thereafter, report 
to the Committees on Finance and Health, Education, Labor, 
and Pensions of the Senate and the Committees on Ways and
H. R. 2617—844 
Means and Education and Labor of the House of Representa-
tives on the data described in paragraph (2), together with 
any recommendations the Secretary deems appropriate. 
(2) DATA DESCRIBED.—For purposes of the report required 
under paragraph (1), the Secretary of the Treasury shall collect 
data and information on— 
(A) the number of plans described in section 408(p) 
or 401(k)(11) of the Internal Revenue Code of 1986 that 
are maintained or established during a year; 
(B) the number of participants eligible to participate 
in such plans for such year; 
(C) median contribution amounts for the participants 
described in subparagraph (B); 
(D) the types of investments that are most common 
under such plans; and 
(E) the fee levels charged in connection with the 
maintenance of accounts under such plans. 
Such data and information shall be collected separately for 
each type of plan. For purposes of collecting such data, the 
Secretary of the Treasury may use such data as is otherwise 
available to the Secretary for publication and may use such 
approaches as are appropriate under the circumstances, 
including the use of voluntary surveys and collaboration on 
studies. 
SEC. 118. TAX TREATMENT OF CERTAIN NONTRADE OR BUSINESS SEP 
CONTRIBUTIONS. 
(a) IN GENERAL.—Subparagraph (B) of section 4972(c)(6) is 
amended— 
(1) by striking ‘‘408(p)) or’’ and inserting ‘‘408(p)),’’; and 
(2) by inserting ‘‘, or a simplified employee pension (within 
the meaning of section 408(k))’’ after ‘‘401(k)(11))’’. 
(b) EFFECTIVE DATE.— 
(1) IN GENERAL.—The amendments made by this section 
shall apply to taxable years beginning after the date of the 
enactment of this Act. 
(2) NO INFERENCE.—Nothing in the amendments made by 
this section shall be construed to infer the proper treatment 
under section 4972(c)(6) of the Internal Revenue Code of 1986 
of nondeductible contributions to which the amendments made 
by this section do not apply. 
SEC. 119. APPLICATION OF SECTION 415 LIMIT FOR CERTAIN 
EMPLOYEES OF RURAL ELECTRIC COOPERATIVES. 
(a) IN GENERAL.—Section 415(b) is amended by adding at the 
end the following new paragraph: 
‘‘(12) SPECIAL
RULE
FOR
CERTAIN
EMPLOYEES
OF
RURAL 
ELECTRIC COOPERATIVES.— 
‘‘(A) IN GENERAL.—Subparagraph (B) of paragraph (1) 
shall not apply to a participant in an eligible rural electric 
cooperative plan, except in the case of a participant who 
was a highly compensated employee (as defined in section 
414(q)) of an employer maintaining such plan for the earlier 
of— 
‘‘(i) the plan year in which the participant termi-
nated employment with such employer, or 
‘‘(ii) the plan year in which distributions commence 
under the plan with respect to the participant, or
H. R. 2617—845 
for any of the 5 plan years immediately preceding such 
earlier plan year. 
‘‘(B) ELIGIBLE RURAL ELECTRIC COOPERATIVE PLAN.— 
For purposes of this paragraph— 
‘‘(i) IN GENERAL.—The term ‘eligible rural electric 
cooperative plan’ means a plan maintained by more 
than 1 employer, with respect to which at least 85 
percent of the employers maintaining the plan are 
rural cooperatives described in clause (i) or (ii) of sec-
tion 401(k)(7)(B) or are a national association of such 
a rural cooperative. 
‘‘(ii) ELECTION.—An employer maintaining an 
eligible rural cooperative plan may elect not to have 
subparagraph (A) apply to its employees. 
‘‘(C) REGULATIONS.—The Secretary shall prescribe such 
regulations and other guidance as are necessary to limit 
the application of subparagraph (A) such that it does not 
result in increased benefits for highly compensated 
employees.’’. 
(b) EFFECTIVE DATE.—The amendment made by this section 
shall apply to limitation years ending after the date of the enact-
ment of this Act. 
SEC. 120. EXEMPTION FOR CERTAIN AUTOMATIC PORTABILITY TRANS-
ACTIONS. 
(a) IN GENERAL.—Section 4975(d), as amended by the preceding 
provisions of this Act, is further amended by striking ‘‘or’’ at the 
end of paragraph (23), by striking the period at the end of paragraph 
(24) and inserting ‘‘, or’’, and by adding at the end the following 
new paragraph: 
‘‘(25) the receipt of fees and compensation by the automatic 
portability provider for services provided in connection with 
an automatic portability transaction.’’. 
(b) OTHER DEFINITIONS AND SPECIAL RULES.—Section 4975(f) 
is amended by adding at the end the following new paragraph: 
‘‘(12) RULES RELATING TO AUTOMATIC PORTABILITY TRANS-
ACTIONS.— 
‘‘(A) IN GENERAL.—For purposes of subsection (d)(25)— 
‘‘(i) AUTOMATIC
PORTABILITY
TRANSACTION.—An 
automatic portability transaction is a transfer of assets 
made— 
‘‘(I) from an individual retirement plan which 
is established on behalf of an individual and to 
which amounts were transferred under section 
401(a)(31)(B)(i), 
‘‘(II) to an employer-sponsored retirement plan 
described in clause (iii), (iv), (v), or (vi) of section 
402(c)(8)(B) (other than a defined benefit plan) 
in which such individual is an active participant, 
and 
‘‘(III) after such individual has been given 
advance notice of the transfer and has not affirma-
tively opted out of such transfer. 
‘‘(ii) AUTOMATIC PORTABILITY PROVIDER.—An auto-
matic portability provider is a person, other than an 
individual, who executes transfers described in clause 
(i).
H. R. 2617—846 
‘‘(B) CONDITIONS FOR AUTOMATIC PORTABILITY TRANS-
ACTIONS.—Subsection (d)(25) shall not apply to an auto-
matic portability transaction unless the following require-
ments are satisfied: 
‘‘(i) ACKNOWLEDGMENT OF FIDUCIARY STATUS.—An 
automatic portability provider shall acknowledge in 
writing, at such time and format as specified by the 
Secretary of Labor, that the provider is a fiduciary 
with respect to the individual retirement plan 
described in subparagraph (A)(i)(I). 
‘‘(ii) FEES.—The fees and compensation received, 
directly or indirectly, by the automatic portability pro-
vider for services provided in connection with the auto-
matic portability transaction (including any increase 
in such fees or compensation and any fees or compensa-
tion in connection with, but received before, the trans-
action)— 
‘‘(I) shall not exceed reasonable compensation, 
and 
‘‘(II) shall be fully disclosed to and approved 
in writing in advance of the transaction by a plan 
fiduciary of the plan described in subparagraph 
(A)(i)(II) which is independent of the automatic 
portability provider. 
An automatic portability provider shall not receive any 
fees or compensation in connection with an automatic 
portability transaction involving a plan which is spon-
sored or maintained by the automatic portability pro-
vider. 
‘‘(iii) DATA USAGE.—The automatic portability pro-
vider shall not market or sell data relating to the 
individual retirement plan described in subparagraph 
(A)(i)(I) or to the participants of the plan described 
in subparagraph (A)(i)(II). 
‘‘(iv) OPEN
PARTICIPATION.—The automatic port-
ability provider shall offer automatic portability trans-
actions on the same terms to any plan described in 
subparagraph (A)(i)(II). 
‘‘(v) PRE-TRANSACTION NOTICE.—At least 60 days 
in advance of an automatic portability transaction, the 
automatic portability provider shall provide notice to 
the individual on whose behalf the individual retire-
ment plan described in subparagraph (A)(i)(I) is estab-
lished which includes— 
‘‘(I) a description of the automatic portability 
transaction and a complete and accurate statement 
of all fees which will be charged and all compensa-
tion which will be received in connection with the 
transaction, 
‘‘(II) a clear and prominent description of the 
individual’s right to affirmatively elect not to 
participate in the transaction as well as the other 
available distribution options, the deadline by 
which the individual must make an election, the 
procedures for such an election, and a telephone 
number for the automatic portability provider that 
the individual may call to make such election,
H. R. 2617—847 
‘‘(III) a description of the individual’s right 
to designate a beneficiary and the procedures to 
do so, and 
‘‘(IV) such other disclosures as the Secretary 
of Labor may require by regulation. 
‘‘(vi) POST-TRANSACTION NOTICE.—Not later than 
3 business days after an automatic portability trans-
action, the automatic portability provider shall provide 
notice to the individual on whose behalf the individual 
retirement plan described in subparagraph (A)(i)(I) is 
established of— 
‘‘(I) the actions taken by the automatic port-
ability provider with respect to the individual’s 
account, 
‘‘(II) all relevant information regarding the 
location and amount of any transferred assets, 
‘‘(III) a statement of fees charged against the 
account by the automatic portability provider or 
its affiliates in connection with the transfer, 
‘‘(IV) a telephone number at which the indi-
vidual can contact the automatic portability pro-
vider, and 
‘‘(V) such other disclosures as the Secretary 
of Labor may require by regulation. 
‘‘(vii) 
NOTICE
REQUIREMENTS.—The 
notices 
required under clauses (v) and (vi) shall be written 
in a manner calculated to be understood by the average 
person and shall not include inaccurate or misleading 
statements. 
‘‘(viii) FREQUENCY OF SEARCHES.—The automatic 
portability provider shall query on at least a monthly 
basis whether any individual with an individual retire-
ment plan described in subparagraph (A)(i)(I) has an 
account in a plan described in subparagraph (A)(i)(II). 
‘‘(ix) TIMELINESS OF EXECUTION.—After liquidating 
the assets of an individual retirement plan described 
in subparagraph (A)(i)(I) to cash, an automatic port-
ability provider shall transfer the account balance of 
such plan as soon as practicable to the plan described 
in subparagraph (A)(i)(II). 
‘‘(x) LIMITATION ON EXERCISE OF DISCRETION.—The 
automatic portability provider shall neither have nor 
exercise discretion to affect the timing or amount of 
the transfer pursuant to an automatic portability 
transaction other than to deduct the appropriate fees 
as described in clause (ii). 
‘‘(xi) RECORD RETENTION AND AUDITS.— 
‘‘(I) IN
GENERAL.—An automatic portability 
provider shall, for not less than 6 years after the 
automatic portability transaction has occurred, 
maintain the records sufficient to demonstrate the 
terms of this subparagraph have been met. The 
automatic portability provider shall make such 
records available to any authorized employee of 
the Department of the Treasury or the Department 
of Labor within 30 calendar days of the date of 
a written request for such records.
H. R. 2617—848 
‘‘(II) AUDITS.—An automatic portability pro-
vider shall conduct an annual audit, in accordance 
with regulations promulgated by the Secretary of 
Labor, of automatic portability transactions occur-
ring during the calendar year to demonstrate 
compliance with this paragraph and any regula-
tions thereunder and identify any instances of non-
compliance therewith, and shall submit such audit 
annually to the Secretary of Labor, in such form 
and manner as specified by such Secretary. 
‘‘(xii) WEBSITE.—The automatic portability pro-
vider shall maintain a website which contains— 
‘‘(I) a list of recordkeepers for each plan 
described in subparagraph (A)(i)(II) with respect 
to which the provider carries out automatic port-
ability transactions, and 
‘‘(II) a list of all fees described in clause (ii)(II) 
paid to the provider.’’. 
(c) REGULATORY AUTHORITY.—Not later than 12 months after 
the date of the enactment of this Act, the Secretary of Labor 
shall issue such guidance as may be necessary to carry out the 
purposes of the amendments made by this section, including regula-
tions or other guidance which— 
(1) require an automatic portability provider to provide 
a notice to individuals on whose behalf the individual retire-
ment plan described in paragraph (12)(A)(i)(I) of section 4975(f) 
of the Internal Revenue Code of 1986, as added by this section, 
is established in advance of the notices specified in paragraph 
(12)(B)(v) of such section, as so added, 
(2) require an automatic portability provider to disclose 
to plans described in paragraph (12)(A)(i)(II) of section 4975(f) 
of the Internal Revenue Code of 1986, as added by this section, 
information required to be provided by a covered service pro-
vider pursuant to section 2550.408b–2(c) of title 29, Code of 
Federal Regulations, 
(3) require a plan described in such paragraph (12)(A)(i)(II), 
as so added, to fully disclose fees related to an automatic 
portability transaction in its summary plan description or sum-
mary of material modifications, as relevant, 
(4) require a plan described in such paragraph, as so added, 
to invest amounts received on behalf of a participant pursuant 
to an automatic portability transaction in the participant’s cur-
rent investment election under the plan or, if no election is 
made or permitted, in the plan’s qualified default investment 
alternative (within the meaning of section 2550.404c–5 of title 
29, Code of Federal Regulations) or another investment selected 
by a fiduciary with respect to such plan, 
(5) prohibit or restrict the receipt or payment of third 
party compensation (other than a direct fee paid by a plan 
sponsor which is in lieu of a fee imposed on an individual 
retirement plan owner) by an automatic portability provider 
in connection with an automatic portability transaction, 
(6) prohibit exculpatory provisions in an automatic port-
ability provider’s contracts or communications with individuals 
disclaiming or limiting its liability in the event that an auto-
matic portability transaction results in an improper transfer,
H. R. 2617—849 
(7) require an automatic portability provider to take actions 
necessary to reasonably ensure that participant and beneficiary 
data is current and accurate, 
(8) limit the use of data related to automatic portability 
transactions for any purpose other than the execution of such 
transactions or locating missing participants, except as per-
mitted by the Secretary of Labor, 
(9) provide for corrections procedures in the event an 
auditor determines the automatic portability provider was not 
in compliance with this provision and related regulations as 
specified in paragraph (12)(B)(ix)(II) of section 4975(f) of such 
Code, as so added, including deadlines, supplemental audits, 
and corrective actions which may include a temporary prohibi-
tion from relying on the exemption provided by paragraph 
(25) of section 4975(d) of such Code, as added by this section, 
(10) ensure that the appropriate participants and bene-
ficiaries, in fact, receive all the required notices and disclosures, 
and 
(11) make clear that the exemption provided by paragraph 
(25) of section 4975(d) of such Code, as added by this section, 
applies solely to the automatic portability transactions 
described therein, and, to the extent the Secretary deems nec-
essary or advisable, specify how the application of the exemp-
tion relates to or coordinates with the application of other 
statutory provisions, regulations, administrative guidance, or 
exemptions. 
Any term used in this subsection which is used in paragraph 
(12) of section 4975(f) of such Code, as added by this section, 
has the same meaning as when used in such paragraph. 
(d) REPORT TO CONGRESS.— 
(1) IN GENERAL.—Not later than 2 years after the date 
of the first audit report received by the Secretary of Labor 
from any automatic portability provider, and every 3 years 
thereafter, the Secretary of Labor shall report to the Commit-
tees on Health, Education, Labor and Pensions and Finance 
of the Senate and the Committees on Education and Labor 
and Ways and Means of the House of Representatives on— 
(A) the effectiveness of automatic portability trans-
actions under the exemption provided by paragraph (25) 
of section 4975(d) of the Internal Revenue Code of 1986, 
as added by this section, detailing— 
(i) the number of automatic cash outs from quali-
fied plans to individual retirement plans described in 
section 4975(f)(12)(A)(i)(I) of such Code, 
(ii) the number of completed automatic portability 
transactions to employer-sponsored retirement plans 
described in section 4975(f)(12)(A)(i)(II) of such Code, 
(iii) the number of individual retirement plans 
described in section 4975(f)(12)(A)(i)(I) of such Code 
which have been transferred to designated bene-
ficiaries, 
(iv) the number of individual retirement plans 
described in section 4975(f)(12)(A)(i)(I) of such Code 
for which the automatic portability provider is 
searching for next of kin due to a deceased account 
holder without a designated beneficiary, and
H. R. 2617—850 
(v) the number of accounts that were reduced to 
a zero balance while in the automatic portability pro-
vider’s custody; 
(B) a summary of any consumer complaints submitted 
to 
the 
Employee 
Benefits 
Security 
Administration 
regarding automatic portability transactions; 
(C) a summary of compliance issues found in the 
annual audit described in section 4975(f)(12)(B)(xiii)(II) of 
such Code, if any, and their corrections; 
(D) a summary of the fees individuals are charged 
in connection with automatic portability transactions, 
including whether those fees have increased since the last 
report; 
(E) recommendations of any necessary statutory 
changes to this exemption to improve the effectiveness 
of automatic portability transactions, including repeal of 
this provision in the event of a pattern of noncompliance; 
and 
(F) any other information the Secretary of Labor deems 
important. 
The report required by this subsection shall be made publicly 
available. 
(2) REPORT ON NOTICES RELATING TO AUTOMATIC TRANS-
FERS.—Not later than 2 years after the date of the enactment 
of this Act, the Secretary of Treasury shall report to the Com-
mittee on Finance of the Senate and the Committee on Ways 
and Means on the adequacy of the notices relating to transfers 
under section 401(a)(31)(B)(i) of the Internal Revenue Code 
of 1986. 
(e) EFFECTIVE DATE.—The amendments made by this section 
shall apply to transactions occurring on or after the date which 
is 12 months after the date of the enactment of this Act. 
SEC. 121. STARTER 401(k) PLANS FOR EMPLOYERS WITH NO RETIRE-
MENT PLAN. 
(a) IN GENERAL.—Section 401(k) is amended by adding at the 
end the following new paragraph: 
‘‘(16) 
STARTER
401(k) 
DEFERRAL-ONLY
PLANS
FOR 
EMPLOYERS WITH NO RETIREMENT PLAN.— 
‘‘(A) IN
GENERAL.—A starter 401(k) deferral-only 
arrangement maintained by an eligible employer shall be 
treated as meeting the requirements of paragraph (3)(A)(ii). 
‘‘(B) STARTER 401(k) DEFERRAL-ONLY ARRANGEMENT.— 
For purposes of this paragraph, the term ‘starter 401(k) 
deferral-only arrangement’ means any cash or deferred 
arrangement which meets— 
‘‘(i) 
the 
automatic 
deferral 
requirements 
of 
subparagraph (C), 
‘‘(ii) the contribution limitations of subparagraph 
(D), and 
‘‘(iii) the requirements of subparagraph (E) of para-
graph (13). 
‘‘(C) AUTOMATIC DEFERRAL.— 
‘‘(i) IN
GENERAL.—The requirements of this 
subparagraph are met if, under the arrangement, each 
eligible employee is treated as having elected to have
H. R. 2617—851 
the employer make elective contributions in an amount 
equal to a qualified percentage of compensation. 
‘‘(ii) ELECTION
OUT.—The election treated as 
having been made under clause (i) shall cease to apply 
with respect to any employee if such employee makes 
an affirmative election— 
‘‘(I) to not have such contributions made, or 
‘‘(II) to make elective contributions at a level 
specified in such affirmative election. 
‘‘(iii) QUALIFIED PERCENTAGE.—For purposes of this 
subparagraph, the term ‘qualified percentage’ means, 
with respect to any employee, any percentage deter-
mined under the arrangement if such percentage is 
applied uniformly and is not less than 3 or more than 
15 percent. 
‘‘(D) CONTRIBUTION LIMITATIONS.— 
‘‘(i) IN
GENERAL.—The requirements of this 
subparagraph are met if, under the arrangement— 
‘‘(I) the only contributions which may be made 
are elective contributions of employees described 
in subparagraph (C), and 
‘‘(II) the aggregate amount of such elective 
contributions which may be made with respect 
to any employee for any calendar year shall not 
exceed $6,000. 
‘‘(ii) COST-OF-LIVING ADJUSTMENT.—In the case of 
any calendar year beginning after December 31, 2024, 
the $6,000 amount under clause (i) shall be adjusted 
in the same manner as under section 402(g)(4), except 
that ‘2023’ shall be substituted for ‘2005’. 
‘‘(iii) CATCH-UP
CONTRIBUTIONS
FOR
INDIVIDUALS 
AGE 50 OR OVER.—In the case of an individual who 
has attained the age of 50 before the close of the 
taxable year, the limitation under clause (i)(II) shall 
be increased by the applicable amount determined 
under section 219(b)(5)(B)(ii) (after the application of 
section 219(b)(5)(C)(iii)). 
‘‘(E) ELIGIBLE EMPLOYER.—For purposes of this para-
graph— 
‘‘(i) IN
GENERAL.—The term ‘eligible employer’ 
means any employer if the employer does not maintain 
a qualified plan with respect to which contributions 
are made, or benefits are accrued, for service in the 
year for which the determination is being made. If 
only individuals other than employees described in 
subparagraph (A) of section 410(b)(3) are eligible to 
participate in such arrangement, then the preceding 
sentence shall be applied without regard to any quali-
fied plan in which only employees described in such 
subparagraph are eligible to participate. 
‘‘(ii) RELIEF FOR ACQUISITIONS, ETC.—Rules similar 
to the rules of section 408(p)(10) shall apply for pur-
poses of clause (i). 
‘‘(iii) QUALIFIED PLAN.—The term ‘qualified plan’ 
means a plan, contract, pension, account, or trust 
described in subparagraph (A) or (B) of paragraph
H. R. 2617—852 
(5) of section 219(g) (determined without regard to 
the last sentence of such paragraph (5)). 
‘‘(F) ELIGIBLE EMPLOYEE.—For purposes of this para-
graph— 
‘‘(i) IN
GENERAL.—The term ‘eligible employee’ 
means any employee of the employer who meets the 
minimum age and service conditions described in sec-
tion 410(a)(1). 
‘‘(ii) EXCLUSIONS.—The employer may elect to 
exclude from such definition any employee described 
in paragraph (3) or (4) of section 410(b).’’. 
(b) CERTAIN ANNUITY CONTRACTS.—Section 403(b), as amended 
by the preceding provision of this Act, is further amended by adding 
at the end the following new paragraph: 
‘‘(16) SAFE HARBOR DEFERRAL-ONLY PLANS FOR EMPLOYERS 
WITH NO RETIREMENT PLAN.— 
‘‘(A) IN
GENERAL.—A safe harbor deferral-only plan 
maintained by an eligible employer shall be treated as 
meeting the requirements of paragraph (12). 
‘‘(B) SAFE HARBOR DEFERRAL-ONLY PLAN.—For purposes 
of this paragraph, the term ‘safe harbor deferral-only plan’ 
means any plan which meets— 
‘‘(i) 
the 
automatic 
deferral 
requirements 
of 
subparagraph (C), 
‘‘(ii) the contribution limitations of subparagraph 
(D), and 
‘‘(iii) the requirements of subparagraph (E) of sec-
tion 401(k)(13). 
‘‘(C) AUTOMATIC DEFERRAL.— 
‘‘(i) IN
GENERAL.—The requirements of this 
subparagraph are met if, under the plan, each eligible 
employee is treated as having elected to have the 
employer make elective contributions in an amount 
equal to a qualified percentage of compensation. 
‘‘(ii) ELECTION
OUT.—The election treated as 
having been made under clause (i) shall cease to apply 
with respect to any eligible employee if such eligible 
employee makes an affirmative election— 
‘‘(I) to not have such contributions made, or 
‘‘(II) to make elective contributions at a level 
specified in such affirmative election. 
‘‘(iii) QUALIFIED PERCENTAGE.—For purposes of this 
subparagraph, the term ‘qualified percentage’ means, 
with respect to any employee, any percentage deter-
mined under the plan if such percentage is applied 
uniformly and is not less than 3 or more than 15 
percent. 
‘‘(D) CONTRIBUTION LIMITATIONS.— 
‘‘(i) IN
GENERAL.—The requirements of this 
subparagraph are met if, under the plan— 
‘‘(I) the only contributions which may be made 
are elective contributions of eligible employees, and 
‘‘(II) the aggregate amount of such elective 
contributions which may be made with respect 
to any employee for any calendar year shall not 
exceed $6,000.
H. R. 2617—853 
‘‘(ii) COST-OF-LIVING ADJUSTMENT.—In the case of 
any calendar year beginning after December 31, 2024, 
the $6,000 amount under clause (i) shall be adjusted 
in the same manner as under section 402(g)(4), except 
that ‘2023’ shall be substituted for ‘2005’. 
‘‘(iii) CATCH-UP
CONTRIBUTIONS
FOR
INDIVIDUALS 
AGE 50 OR OVER.—In the case of an individual who 
has attained the age of 50 before the close of the 
taxable year, the limitation under clause (i)(II) shall 
be increased by the applicable amount determined 
under section 219(b)(5)(B)(ii) (after the application of 
section 219(b)(5)(C)(iii)). 
‘‘(E) ELIGIBLE EMPLOYER.—For purposes of this para-
graph— 
‘‘(i) IN
GENERAL.—The term ‘eligible employer’ 
means any employer if the employer does not maintain 
a qualified plan with respect to which contributions 
are made, or benefits are accrued, for service in the 
year for which the determination is being made. If 
only individuals other than employees described in 
subparagraph (A) of section 410(b)(3) are eligible to 
participate in such arrangement, then the preceding 
sentence shall be applied without regard to any quali-
fied plan in which only employees described in such 
subparagraph are eligible to participate. 
‘‘(ii) RELIEF FOR ACQUISITIONS, ETC.—Rules similar 
to the rules of section 408(p)(10) shall apply for pur-
poses of clause (i). 
‘‘(iii) QUALIFIED PLAN.—The term ‘qualified plan’ 
means a plan, contract, pension, account, or trust 
described in subparagraph (A) or (B) of paragraph 
(5) of section 219(g) (determined without regard to 
the last sentence of such paragraph (5)). 
‘‘(F) ELIGIBLE EMPLOYEE.—For purposes of this para-
graph, the term ‘eligible employee’ means any employee 
of the employer other than an employee who is permitted 
to be excluded under paragraph (12)(A).’’. 
(c) STARTER AND SAFE HARBOR PLANS NOT TREATED AS TOP- 
HEAVY PLANS.—Subparagraph (H) of section 416(g)(4) is amended— 
(1) by striking ‘‘ARRANGEMENTS’’ in the heading and 
inserting ‘‘ARRANGEMENTS OR PLANS’’, 
(2) by striking ‘‘, and’’ at the end of clause (i) and inserting 
‘‘and matching contributions with respect to which the require-
ments of paragraph (11), (12), or (13) of section 401(m) are 
met, or’’, and 
(3) by striking clause (ii) and inserting after clause (i) 
the following new clause: 
‘‘(ii) a starter 401(k) deferral-only arrangement 
described in section 401(k)(16)(B) or a safe harbor 
deferral-only plan described in section 403(b)(16).’’. 
(d) EFFECTIVE DATE.—The amendments made by this section 
shall apply to plan years beginning after December 31, 2023. 
SEC. 122. ASSIST STATES IN LOCATING OWNERS OF APPLICABLE 
SAVINGS BONDS. 
(a) IN GENERAL.—Section 3105 of title 31, United States Code, 
is amended by adding at the end the following:
H. R. 2617—854 
‘‘(f)(1)(A) The Secretary shall provide each State, in digital 
or other electronic form, with information describing any applicable 
savings bond which has an applicable address that is within such 
State, including— 
‘‘(i) the name and applicable address of the registered 
owner; and 
‘‘(ii) the name and applicable address of any registered 
co-owner or beneficiary. 
‘‘(B) The information provided under subparagraph (A) may 
include the serial number of any applicable savings bond. 
‘‘(C)(i) For purposes of this paragraph, the term ‘applicable 
address’ means, with respect to any applicable savings bond— 
‘‘(I) the registered address for the registered owner, co- 
owner, or beneficiary (as applicable) of such bond; or 
‘‘(II) if such information is available to the Secretary, the 
last known address for the registered owner, co-owner, or bene-
ficiary (as applicable) of such bond. 
‘‘(ii) For purposes of clause (i), if the information described 
in subclause (II) of clause (i) with respect to any individual is 
available to the Secretary, subclause (I) of such clause shall not 
apply. 
‘‘(2)(A) Not later than 12 months after the date of enactment 
of this subsection, the Secretary shall prescribe such regulations 
or other guidance as may be necessary to carry out the purposes 
of this subsection, including rules to— 
‘‘(i) protect the privacy of the owners of applicable savings 
bonds; 
‘‘(ii) prevent fraud; and 
‘‘(iii) ensure that any information provided to a State under 
this subsection shall be used solely to carry out the purposes 
of this subsection. 
‘‘(B) Except as deemed necessary to protect privacy or prevent 
fraud or misuse of savings bond information, any regulations or 
guidance prescribed by the Secretary pursuant to subparagraph 
(A) shall not have the effect of prohibiting, restricting, or otherwise 
preventing a State from obtaining all information described in 
paragraph (1)(A). 
‘‘(3) Not later than 12 months after the date of enactment 
of this subsection, and annually thereafter for each year during 
the 5-year period beginning after the date of enactment of this 
subsection, the Secretary shall submit to the Committees on Appro-
priations of the House of Representatives and the Senate, the 
Committee on Ways and Means of the House of Representatives, 
and the Committee on Finance of the Senate a report assessing 
all efforts to satisfy the requirement under paragraph (1)(A). 
‘‘(4) Any State that receives information described in paragraph 
(1)(A) with respect to an applicable savings bond may use such 
information to locate the owner of such bond pursuant to the 
same standards and requirements as are applicable under— 
‘‘(A) the abandoned property rules and regulations of such 
State; and 
‘‘(B) any regulations or guidance promulgated under this 
subsection. 
‘‘(5) For purposes of this subsection, the Secretary may disclose 
to the public any information with respect to any applicable savings 
bond which a State may disclose to the public pursuant to paragraph 
(4).
H. R. 2617—855 
‘‘(6) For purposes of this subsection, the term ‘applicable savings 
bond’ means a savings bond which— 
‘‘(A) is more than 3 years past its date of final maturity; 
‘‘(B)(i) is in paper form; or 
‘‘(ii) is in paperless or electronic form and for which— 
‘‘(I) there is no designated bank account or routing 
information; or 
‘‘(II) the designated bank account or routing informa-
tion is incorrect; and 
‘‘(C) has not been redeemed.’’. 
(b) EFFECTIVE DATE.—The amendment made by this section 
shall take effect on the date of enactment of this Act. 
SEC. 123. CERTAIN SECURITIES TREATED AS PUBLICLY TRADED IN 
CASE OF EMPLOYEE STOCK OWNERSHIP PLANS. 
(a) IN GENERAL.—Section 401(a)(35) is amended by adding at 
the end the following new subparagraph: 
‘‘(I) ESOP RULES RELATING TO PUBLICLY TRADED SECU-
RITIES.—In the case of an applicable defined contribution 
plan which is an employee stock ownership plan, an 
employer security shall be treated as described in subpara-
graph (G)(v) if— 
‘‘(i) the security is the subject of priced quotations 
by at least 4 dealers, published and made continuously 
available on an interdealer quotation system (as such 
term is used in section 13 of the Securities Exchange 
Act of 1934) which has made the request described 
in section 6(j) of such Act to be treated as an alternative 
trading system, 
‘‘(ii) the security is not a penny stock (as defined 
by section 3(a)(51) of such Act), 
‘‘(iii) the security is issued by a corporation which 
is not a shell company (as such term is used in section 
4(d)(6) of the Securities Act of 1933), a blank check 
company (as defined in section 7(b)(3) of such Act), 
or subject to bankruptcy proceedings, 
‘‘(iv) the security has a public float (as such term 
is used in section 240.12b-2 of title 17, Code of Federal 
Regulations) which has a fair market value of at least 
$1,000,000 and constitutes at least 10 percent of the 
total shares issued and outstanding. 
‘‘(v) in the case of a security issued by a domestic 
corporation, the issuer publishes, not less frequently 
than annually, financial statements audited by an inde-
pendent auditor registered with the Public Company 
Accounting Oversight Board established under the Sar-
banes-Oxley Act of 2002, and 
‘‘(vi) in the case of a security issued by a foreign 
corporation, the security is represented by a depositary 
share (as defined under section 240.12b-2 of title 17, 
Code of Federal Regulations), or is issued by a foreign 
corporation incorporated in Canada and readily 
tradeable on an established securities market in 
Canada, and the issuer— 
‘‘(I) is subject to, and in compliance with, the 
reporting requirements of section 13 or 15(d) of
H. R. 2617—856 
the Securities Exchange Act of 1934 (15 U.S.C. 
78m or 78o(d)), 
‘‘(II) is subject to, and in compliance with, 
the reporting requirements of section 230.257 of 
title 17, Code of Federal Regulations, or 
‘‘(III) is exempt from such requirements under 
section 240.12g3–2(b) of title 17, Code of Federal 
Regulations.’’. 
(b) EFFECTIVE DATE.—The amendments made by this section 
shall apply to plan years beginning after December 31, 2027. 
SEC. 124. MODIFICATION OF AGE REQUIREMENT FOR QUALIFIED ABLE 
PROGRAMS. 
(a) IN GENERAL.—Section 529A(e) is amended by striking ‘‘age 
26’’ each place it appears in paragraphs (1)(A) and (2)(A)(i)(II) 
and inserting ‘‘age 46’’. 
(b) EFFECTIVE DATE.—The amendments made by this section 
shall apply to taxable years beginning after December 31, 2025. 
SEC. 125. IMPROVING COVERAGE FOR PART-TIME WORKERS. 
(a) IN GENERAL.— 
(1) EMPLOYEE
RETIREMENT
INCOME
SECURITY
ACT
OF 
1974.—Section 202 of the Employee Retirement Income Secu-
rity Act of 1974 (29 U.S.C. 1052) is amended by adding at 
the end the following new subsection: 
‘‘(c) SPECIAL RULE FOR CERTAIN PART-TIME EMPLOYEES.— 
‘‘(1) IN GENERAL.—A pension plan that includes either a 
qualified cash or deferred arrangement (as defined in section 
401(k) of the Internal Revenue Code of 1986) or a salary reduc-
tion agreement (as described in section 403(b) of such Code) 
shall not require, as a condition of participation in the arrange-
ment or agreement, that an employee complete a period of 
service with the employer (or employers) maintaining the plan 
extending beyond the close of the earlier of— 
‘‘(A) the period permitted under subsection (a)(1) 
(determined without regard to subparagraph (B)(i) thereof); 
or 
‘‘(B) the first 24-month period— 
‘‘(i) consisting of 2 consecutive 12-month periods 
during each of which the employee has at least 500 
hours of service; and 
‘‘(ii) by the close of which the employee has met 
the requirement of subsection (a)(1)(A)(i). 
‘‘(2) EXCEPTION.—Paragraph (1)(B) shall not apply to any 
employee described in section 410(b)(3) of the Internal Revenue 
Code of 1986. 
‘‘(3) COORDINATION WITH TIME OF PARTICIPATION RULES.— 
In the case of employees who are eligible to participate in 
the arrangement or agreement solely by reason of paragraph 
(1)(B), 
or 
by 
reason 
of 
such 
paragraph 
and 
section 
401(k)(2)(D)(ii) of such Code, the rules of subsection (a)(4) shall 
apply to such employees. 
‘‘(4) 12-MONTH PERIOD.—For purposes of this subsection, 
12-month periods shall be determined in the same manner 
as under the last sentence of subsection (a)(3)(A), except that 
12-month periods beginning before January 1, 2023, shall not 
be taken into account.’’. 
(2) INTERNAL REVENUE CODE OF 1986.—
H. R. 2617—857 
(A) IN
GENERAL.—Section 403(b)(12) is amended by 
adding at the end the following new subparagraph: 
‘‘(D) 
RULES
RELATING
TO
CERTAIN
PART-TIME 
EMPLOYEES.— 
‘‘(i) IN GENERAL.—In the case of employees who 
are eligible to participate in the agreement solely by 
reason of section 202(c)(1)(B) of the Employee Retire-
ment Income Security Act of 1974— 
‘‘(I) notwithstanding section 401(a)(4), an 
employer shall not be required to make nonelective 
or matching contributions on behalf of such 
employees even if such contributions are made 
on behalf of other employees eligible to participate 
in the plan, and 
‘‘(II) the employer may elect to exclude such 
employees from the application of subsections 
(a)(4), (k)(3), (k)(12), (k)(13), and (m)(2) of section 
401 and section 410(b).’’. 
(B) CONFORMING AMENDMENT.— 
(i) The last sentence of section 403(b)(12)(A), as 
amended by this Act, is further amended by inserting 
‘‘and section 202(c) of the Employee Retirement Income 
Security Act of 1974’’ after ‘‘under section 410(b)(4)’’. 
(ii) Section 401(k)(15)(B)(i) is amended by inserting 
‘‘, or by reason of such paragraph and section 
202(c)(1)(B) of the Employee Retirement Income Secu-
rity Act of 1974’’ after ‘‘paragraph (2)(D)(ii)’’. 
(b) VESTING.—Section 203(b) of the Employee Retirement 
Income Security Act of 1974 (29 U.S.C. 1053(b)) is amended by 
redesignating paragraph (4) as paragraph (5) and by inserting 
after paragraph (3) the following new paragraph: 
‘‘(4) PART-TIME EMPLOYEES.—For purposes of determining 
whether an employee who became eligible to participate in 
a qualified cash or deferred arrangement or a salary reduction 
agreement under a plan solely by reason of section 202(c)(1)(B) 
has a nonforfeitable right to employer contributions— 
‘‘(A) except as provided in subparagraph (B), each 12- 
month period for which the employee has at least 500 
hours of service shall be treated as a year of service; 
and 
‘‘(B) paragraph (3) shall be applied by substituting 
‘at least 500 hours of service’ for ‘more than 500 hours 
of service’ in subparagraph (A) thereof. 
For purposes of this paragraph, 12-month periods shall be 
determined in the same manner as under the last sentence 
of section 202(a)(3)(A), except that 12-month periods beginning 
before January 1, 2023, shall not be taken into account.’’. 
(c) REDUCTION IN PERIOD SERVICE REQUIREMENT FOR QUALIFIED 
CASH AND DEFERRED ARRANGEMENTS.—Section 401(k)(2)(D)(ii) is 
amended by striking ‘‘3’’ and inserting ‘‘2’’. 
(d) PRE-2021 SERVICE.—Section 112(b) of the Setting Every 
Community Up for Retirement Enhancement Act of 2019 (26 U.S.C. 
401 note) is amended by striking ‘‘section 401(k)(2)(D)(ii)’’ and 
inserting ‘‘paragraphs (2)(D)(ii) and (15)(B)(iii) of section 401(k)’’. 
(e) COORDINATION
WITH
RULES
FOR
TOP-HEAVY
PLANS.— 
Subparagraph (H) of section 416(g)(4), as amended by this Act, 
is further amended by inserting before ‘‘If, but’’ the following: ‘‘Such
H. R. 2617—858 
term shall not include a plan solely because such plan does not 
provide nonelective or matching contributions to employees 
described in section 401(k)(15)(B)(i).’’. 
(f) EFFECTIVE DATES.— 
(1) IN GENERAL.—Except as provided in paragraph (2), the 
amendments made by this section shall apply to plan years 
beginning after December 31, 2024. 
(2) SUBSECTION (d) AND (e).—The amendments made by 
subsections (d) and (e) shall take effect as if included in the 
enactment of section 112 of the Setting Every Community Up 
for Retirement Enhancement Act of 2019. 
SEC. 126. SPECIAL RULES FOR CERTAIN DISTRIBUTIONS FROM LONG- 
TERM QUALIFIED TUITION PROGRAMS TO ROTH IRAS. 
(a) IN GENERAL.—Paragraph (3) of section 529(c) is amended 
by adding at the end the following new subparagraph: 
‘‘(E) SPECIAL ROLLOVER TO ROTH IRAS FROM LONG-TERM 
QUALIFIED TUITION PROGRAMS.— 
‘‘(i) IN
GENERAL.—In the case of a distribution 
from a qualified tuition program of a designated bene-
ficiary which has been maintained for the 15-year 
period ending on the date of such distribution, subpara-
graph (A) shall not apply to so much the portion of 
such distribution which— 
‘‘(I) does not exceed the aggregate amount 
contributed to the program (and earnings attrib-
utable thereto) before the 5-year period ending 
on the date of the distribution, and 
‘‘(II) is paid in a direct trustee-to-trustee 
transfer to a Roth IRA maintained for the benefit 
of such designated beneficiary. 
‘‘(ii) LIMITATIONS.— 
‘‘(I) ANNUAL LIMITATION.—Clause (i) shall only 
apply to so much of any distribution as does not 
exceed the amount applicable to the designated 
beneficiary under section 408A(c)(2) for the taxable 
year (reduced by the amount of aggregate contribu-
tions made during the taxable year to all indi-
vidual retirement plans maintained for the benefit 
of the designated beneficiary). 
‘‘(II) AGGREGATE LIMITATION.—This subpara-
graph shall not apply to any distribution described 
in clause (i) to the extent that the aggregate 
amount of such distributions with respect to the 
designated beneficiary for such taxable year and 
all prior taxable years exceeds $35,000.’’. 
(b) TREATMENT UNDER ROTH IRA RULES.— 
(1) IN
GENERAL.—Paragraph (1) of section 408A(e) is 
amended— 
(A) by striking the period at the end of subparagraph 
(B) and inserting ‘‘, and’’, 
(B) by inserting after subparagraph (B) the following 
new subparagraph: 
‘‘(C) from a qualified tuition program to the extent 
provided in section 529(c)(3)(E).’’, and 
(C) by adding at the end the following new sentence: 
‘‘The earnings and contributions of any qualified tuition
H. R. 2617—859 
program from which a qualified rollover contribution is 
made under subparagraph (C) shall be treated in the same 
manner as the earnings and contributions of a Roth IRA 
from which a qualified rollover contribution is made under 
subparagraph (A).’’. 
(2) APPLICATION OF CONTRIBUTION LIMITATIONS.— 
(A) IN GENERAL.—Section 408A(c)(5)(B) is amended— 
(i) by striking ‘‘A qualified rollover contribution’’ 
and inserting the following: 
‘‘(i) IN
GENERAL.—A qualified rollover contribu-
tion’’, and 
(ii) by adding at the end the following: 
‘‘(ii) EXCEPTION FOR ROLLOVERS FROM QUALIFIED 
TUITION PROGRAMS.—Clause (i) shall not apply to any 
qualified rollover contribution described in subsection 
(e)(1)(C).’’. 
(B) WAIVER OF ROTH IRA INCOME LIMITATION.—Section 
408A(c)(3) is amended by adding at the end the following 
new subparagraph: 
‘‘(E) SPECIAL
RULE
FOR
CERTAIN
TRANSFERS
FROM 
QUALIFIED
TUITION
PROGRAMS.—The amount determined 
under subparagraph (A) shall be increased by the lesser 
of— 
‘‘(i) the amount of contributions described in sec-
tion 529(c)(3)(E) for the taxable year, or 
‘‘(ii) the amount of the reduction determined under 
such subparagraph (determined without regard to this 
subparagraph).’’. 
(c) REPORTING.—Section 529(d) is amended— 
(1) by striking ‘‘Each officer’’ and inserting the following: 
‘‘(1) IN GENERAL.—Each officer’’, 
(2) by striking ‘‘by this subsection’’ and inserting ‘‘by this 
paragraph’’, and 
(3) by adding at the end the following new paragraph: 
‘‘(2) ROLLOVER DISTRIBUTIONS.—In the case of any distribu-
tion described in subsection (c)(3)(E), the officer or employee 
having control of the qualified tuition program (or their des-
ignee) shall provide a report to the trustee of the Roth IRA 
to which the distribution is made. Such report shall be filed 
at such time and in such manner as the Secretary may require 
and shall include information with respect to the contributions, 
distributions, and earnings of the qualified tuition program 
as of the date of the distribution described in subsection 
(c)(3)(A), together with such other matters as the Secretary 
may require.’’. 
(d) EFFECTIVE DATE.—The amendments made by this section 
shall apply with respect to distributions after December 31, 2023. 
SEC. 127. EMERGENCY SAVINGS ACCOUNTS LINKED TO INDIVIDUAL 
ACCOUNT PLANS. 
(a) EMPLOYEE PENSION BENEFIT PLANS.—Section 3 of the 
Employee Retirement Income Security Act of 1974 (29 U.S.C. 1002) 
is amended by adding at the end the following: 
‘‘(45) PENSION-LINKED EMERGENCY SAVINGS ACCOUNT.—The 
term ‘pension-linked emergency savings account’ means a short- 
term savings account established and maintained as part of 
an individual account plan, in accordance with section 801,
H. R. 2617—860 
on behalf of an eligible participant (as such term is defined 
in section 801(b)) that— 
‘‘(A) is a designated Roth account (within the meaning 
of section 402A of the Internal Revenue Code of 1986) 
and accepts only participant contributions, as described 
in section 801(d)(1)(A), which are designated Roth contribu-
tions subject to the rules of section 402A(e) of such Code; 
and 
‘‘(B) meets the requirements of part 8 of subtitle B.’’. 
(b) PENSION-LINKED EMERGENCY SAVINGS ACCOUNTS.— 
(1) IN
GENERAL.—Subtitle B of title I of the Employee 
Retirement Income Security Act of 1974 (29 U.S.C. 1021 et 
seq.) is amended by adding at the end the following: 
‘‘PART 8—PENSION-LINKED EMERGENCY 
SAVINGS ACCOUNTS 
‘‘SEC. 801. PENSION-LINKED EMERGENCY SAVINGS ACCOUNTS. 
‘‘(a) IN GENERAL.—A plan sponsor of an individual account 
plan may— 
‘‘(1) include in such individual account plan a pension- 
linked emergency savings account meeting the requirements 
of subsection (c); and 
‘‘(2)(A) offer to enroll an eligible participant in such pen-
sion-linked emergency savings account; or 
‘‘(B) automatically enroll an eligible participant in such 
account pursuant to an automatic contribution arrangement 
described in paragraph (2) of subsection (c). 
‘‘(b) ELIGIBLE PARTICIPANT.— 
‘‘(1) IN
GENERAL.—For purposes of this part, the term 
‘eligible participant’, with regard to an individual account plan, 
means an individual who— 
‘‘(A) meets any age, service, and other eligibility 
requirements of the plan; and 
‘‘(B) is not a highly compensated employee. 
‘‘(2) ELIGIBLE PARTICIPANT WHO BECOMES A HIGHLY COM-
PENSATED EMPLOYEE.—Notwithstanding paragraph (1)(B), an 
individual who is enrolled in a pension-linked emergency 
savings account and thereafter becomes a highly compensated 
employee may not make further contributions to such account, 
but retains the right to withdraw any account balance of such 
account in accordance with subsection (c)(1)(A)(ii). 
‘‘(3) DEFINITION.—For purposes of this subsection, the term 
‘highly compensated employee’ has the meaning given the term 
in section 414(q) of the Internal Revenue Code of 1986. 
‘‘(c) ACCOUNT REQUIREMENTS.— 
‘‘(1) IN
GENERAL.—A pension-linked emergency savings 
account— 
‘‘(A) shall— 
‘‘(i) not have a minimum contribution or account 
balance requirement; 
‘‘(ii) allow for withdrawal by the participant of 
the account balance, in whole or in part at the discre-
tion of the participant, at least once per calendar month 
and for distribution of such withdrawal to the partici-
pant as soon as practicable from the date on which 
the participant elects to make such withdrawal; and
H. R. 2617—861 
‘‘(iii) be, as selected by the plan sponsor, held 
as cash, in an interest-bearing deposit account, or in 
an investment product— 
‘‘(I) designed to— 
‘‘(aa) maintain over the term of the invest-
ment, the dollar value that is equal to the 
amount invested in the product; and 
‘‘(bb) preserve principal and provide a 
reasonable rate of return, whether or not such 
return is guaranteed, consistent with the need 
for liquidity; and 
‘‘(II) offered by a State- or federally-regulated 
financial institution; 
‘‘(B) may be subject to, as permitted by the Secretary, 
reasonable restrictions; and 
‘‘(C)(i) may not, for not less than the first 4 withdrawals 
of funds from the account in a plan year, be subject to 
any fees or charges solely on the basis of such a withdrawal; 
and 
‘‘(ii) may, for any subsequent withdrawal in a plan 
year, be subject to reasonable fees or charges in connection 
with such a withdrawal, including reasonable reimburse-
ment fees imposed for the incidental costs of handling 
of paper checks. 
‘‘(2) ESTABLISHMENT AND TERMINATION OF ACCOUNT.— 
‘‘(A) ESTABLISHMENT OF ACCOUNT.—The pension-linked 
emergency savings account feature shall be included in 
the plan document of the individual account plan. Such 
individual account plan shall— 
‘‘(i) separately account for contributions to the pen-
sion-linked emergency savings account of the indi-
vidual account plan and any earnings properly allo-
cable to the contributions; 
‘‘(ii) maintain separate recordkeeping with respect 
to 
each 
such 
pension-linked 
emergency 
savings 
account; and 
‘‘(iii) allow withdrawals from such account in 
accordance with section 402A(e)(7) of the Internal Rev-
enue Code of 1986. 
‘‘(B) TERMINATION OF ACCOUNT.—A plan sponsor may 
terminate the pension-linked emergency savings account 
feature of an individual account plan at any time. 
‘‘(d) ACCOUNT CONTRIBUTIONS.— 
‘‘(1) LIMITATION.— 
‘‘(A) IN GENERAL.—Subject to subparagraph (B), no con-
tribution shall be accepted to a pension-linked emergency 
savings account to the extent such contribution would cause 
the portion of the account balance attributable to partici-
pant contributions to exceed the lesser of— 
‘‘(i) $2,500; or 
‘‘(ii) an amount determined by the plan sponsor 
of the pension-linked emergency savings account. 
In the case of contributions made in taxable years begin-
ning after December 31, 2024, the Secretary shall adjust 
the amount under clause (i) at the same time and in 
the same manner as the adjustment made by the Secretary
H. R. 2617—862 
of the Treasury under section 415(d) of the Internal Rev-
enue Code of 1986, except that the base period shall be 
the calendar quarter beginning July 1, 2023. Any increase 
under the preceding sentence which is not a multiple of 
$100 shall be rounded to the next lowest multiple of $100. 
‘‘(B) EXCESS CONTRIBUTIONS.—To the extent any con-
tribution to the pension-linked emergency savings account 
of a participant for a taxable year would exceed the limita-
tion of subparagraph (A)— 
‘‘(i) in the case of a participant with another des-
ignated Roth account under the individual account 
plan, such plan may provide that— 
‘‘(I) the participant may elect to increase the 
participant’s contribution to such other account; 
and 
‘‘(II) in the absence of such a participant elec-
tion, the participant is deemed to have elected 
to increase the participant’s contributions to such 
other account at the rate at which contributions 
were being made to the pension-linked emergency 
savings account; and 
‘‘(ii) in any other case, such plan shall provide 
that such excess contributions will not be accepted. 
‘‘(2) AUTOMATIC
CONTRIBUTION
ARRANGEMENT.—For pur-
poses of this section— 
‘‘(A) IN GENERAL.—An automatic contribution arrange-
ment described in this paragraph is an arrangement under 
which an eligible participant is treated as having elected 
to have the plan sponsor make elective contributions to 
a pension-linked emergency savings account at a partici-
pant contribution rate that is not more than 3 percent 
of the compensation of the eligible participant, unless the 
eligible participant, at any time (subject to such reasonable 
advance notice as is required by the plan administrator), 
affirmatively elects to— 
‘‘(i) make contributions at a different rate or 
amount; or 
‘‘(ii) opt out of such contributions. 
‘‘(B) PARTICIPANT CONTRIBUTION RATE.—For purposes 
of an automatic contribution arrangement described in 
subparagraph (A), the plan sponsor— 
‘‘(i) shall select a participant contribution rate 
under such automatic contribution arrangement that 
meets the requirements of subparagraph (A); and 
‘‘(ii) may amend (prior to the plan year in which 
an amendment would take effect) such rate not more 
than once annually. 
‘‘(3) DISCLOSURE
BY
PLAN
ADMINISTRATOR
OF
CONTRIBU-
TIONS.— 
‘‘(A) IN
GENERAL.—With respect to an individual 
account plan with a pension-linked emergency savings 
account feature, the administrator of the plan shall, not 
less than 30 days and not more than 90 days prior to 
date of the first contribution to the pension-linked emer-
gency savings account, including any contribution under
H. R. 2617—865 
described in section 402A(e)(4) of the Internal Revenue 
Code of 1986. 
‘‘(2) REGULATIONS OR OTHER GUIDANCE.—The Secretary of 
the Treasury, in consultation with the Secretary of Labor, shall 
issue regulations or other guidance not later than 12 months 
after the date of the enactment of the SECURE 2.0 Act of 
2022 with respect to the anti-abuse rules described in para-
graph (1). 
‘‘SEC. 802. PREEMPTION OF STATE ANTI-GARNISHMENT LAWS. 
‘‘Notwithstanding any other provision of law, this part shall 
supersede any law of a State which would directly or indirectly 
prohibit or restrict the use of an automatic contribution arrange-
ment, described in section 801(d)(2), for a pension-linked emergency 
savings account. The Secretary may promulgate regulations to 
establish minimum standards that such an arrangement would 
be required to satisfy in order for this subsection to apply with 
respect to such an account. 
‘‘SEC. 803. REPORTING AND DISCLOSURE REQUIREMENTS. 
‘‘The Secretary shall— 
‘‘(1) prescribe such regulations as may be necessary to 
address reporting and disclosure requirements for pension- 
linked emergency savings accounts; and 
‘‘(2) seek to prevent unnecessary reporting and disclosure 
for such accounts under this Act, including for purposes of 
any reporting or disclosure related to pension plans required 
by this title or under the Internal Revenue Code of 1986. 
‘‘SEC. 
804. 
REPORT 
TO 
CONGRESS 
ON 
EMERGENCY 
SAVINGS 
ACCOUNTS. 
‘‘The Secretary of Labor and the Secretary of the Treasury 
shall— 
‘‘(1) conduct a study on the use of emergency savings from 
individual account plan accounts, including emergency savings 
from a pension-linked emergency savings account regarding— 
‘‘(A) whether the amount of the dollar limitation under 
section 801(d)(1)(A) is sufficient; 
‘‘(B) whether the limitation on the contribution rate 
under section 801(d)(2)(A) is appropriate; and 
‘‘(C) the extent to which plan sponsors offer such 
accounts and participants participate in such accounts and 
the resulting impact on participant retirement savings, 
including the impact on retirement savings leakage and 
the effect of such accounts on retirement plan participation 
by low- and moderate-income households; and 
‘‘(2) not later than 7 years after the date of enactment 
of the SECURE 2.0 Act of 2022, submit to Congress a report 
on the findings of the study under paragraph (1).’’. 
(2) CLERICAL AMENDMENT.—The table of contents in section 
1 of the Employee Retirement Income Security Act of 1974 
(29 U.S.C. 1001 note) is amended by inserting after the item 
relating to section 734 the following new items: 
‘‘PART 8. PENSION-LINKED EMERGENCY SAVINGS ACCOUNTS 
‘‘801. Pension-linked emergency savings accounts. 
‘‘802. Preemption of State anti-garnishment laws. 
‘‘803. Reporting and disclosure requirements. 
‘‘804. Report to Congress on emergency savings accounts.’’.
H. R. 2617—866 
(c) REPORTING
FOR
A PENSION-LINKED EMERGENCY SAVINGS 
ACCOUNT.— 
(1) ALTERNATIVE METHODS OF COMPLIANCE.—Section 110(a) 
of the Employee Retirement Income Security Act of 1974 (29 
U.S.C. 1030(a)) is amended by inserting ‘‘(including pension- 
linked emergency savings account features within a pension 
plan)’’ after ‘‘class of pension plans’’. 
(2) MINIMIZED
REPORTING
BURDEN
FOR
PENSION-LINKED 
EMERGENCY SAVINGS ACCOUNTS.—Section 101 of such Act (29 
U.S.C. 1021) is amended— 
(A) by redesignating subsection (n) as subsection (o); 
and 
(B) by inserting after subsection (m) the following: 
‘‘(n) 
PENSION-LINKED
EMERGENCY
SAVINGS
ACCOUNTS.— 
Nothing in this section shall preclude the Secretary from providing, 
by regulations or otherwise, simplified reporting procedures or 
requirements regarding such a pension-linked emergency savings 
account.’’. 
(d) FIDUCIARY DUTY.—Section 404(c) of the Employee Retire-
ment Income Security Act of 1974 (29 U.S.C. 1104(c)) is amended 
by adding at the end the following: 
‘‘(6) DEFAULT INVESTMENT ARRANGEMENTS FOR A PENSION- 
LINKED EMERGENCY SAVINGS ACCOUNT.—For purposes of para-
graph (1), a participant in a pension-linked emergency savings 
account shall be treated as exercising control over the assets 
in the account with respect to the amount of contributions 
and earnings which are invested in accordance with section 
801(c)(1)(A)(iii).’’. 
(e) TAX TREATMENT OF PENSION-LINKED EMERGENCY SAVINGS 
ACCOUNTS.— 
(1) IN GENERAL.—Section 402A is amended by redesignating 
subsection (e) as subsection (f) and by inserting after subsection 
(d) the following new subsection: 
‘‘(e) PENSION-LINKED EMERGENCY SAVINGS ACCOUNTS.— 
‘‘(1) IN GENERAL.—An applicable retirement plan— 
‘‘(A) may— 
‘‘(i) include a pension-linked emergency savings 
account established pursuant to section 801 of the 
Employee Retirement Income Security Act of 1974, 
which, except as otherwise provided in this subsection, 
shall be treated for purposes of this title as a des-
ignated Roth account, and 
‘‘(ii) either— 
‘‘(I) offer to enroll an eligible participant in 
such pension-linked emergency savings account, 
or 
‘‘(II) automatically enroll an eligible partici-
pant in such account pursuant to an automatic 
contribution arrangement described in paragraph 
(4), and 
‘‘(B) shall— 
‘‘(i) separately account for contributions to such 
account and any earnings properly allocable to the 
contributions, 
‘‘(ii) maintain separate recordkeeping with respect 
to each such account, and
H. R. 2617—867 
‘‘(iii) allow withdrawals from such account in 
accordance with paragraph (7). 
‘‘(2) ELIGIBLE PARTICIPANT.— 
‘‘(A) IN GENERAL.—For purposes of this subsection, the 
term ‘eligible participant’, with regard to a defined con-
tribution plan, means an individual, without regard to 
whether the individual is otherwise a participant in such 
plan, who— 
‘‘(i) meets any age, service, and other eligibility 
requirements of the plan, and 
‘‘(ii) is not a highly compensated employee (as 
defined in section 414(q)). 
‘‘(B) ELIGIBLE
PARTICIPANT
WHO
BECOMES
A
HIGHLY 
COMPENSATED EMPLOYEE.—Notwithstanding subparagraph 
(A)(ii), an individual on whose behalf a pension-linked 
emergency savings account is established who thereafter 
becomes a highly compensated employee (as so defined) 
may not make further contributions to such account, but 
retains the right to withdraw any account balance of such 
account in accordance with paragraphs (7) and (8). 
‘‘(3) CONTRIBUTION LIMITATION.— 
‘‘(A) IN GENERAL.—Subject to subparagraph (B), no con-
tribution shall be accepted to a pension-linked emergency 
savings account to the extent such contribution would cause 
the portion of the account balance attributable to partici-
pant contributions to exceed the lesser of— 
‘‘(i) $2,500; or 
‘‘(ii) an amount determined by the plan sponsor 
of the pension-linked emergency savings account. 
In the case of contributions made in taxable years begin-
ning after December 31, 2024, the Secretary shall adjust 
the amount under clause (i) at the same time and in 
the same manner as the adjustment made under section 
415(d), except that the base period shall be the calendar 
quarter beginning July 1, 2023. Any increase under the 
preceding sentence which is not a multiple of $100 shall 
be rounded to the next lowest multiple of $100. 
‘‘(B) EXCESS CONTRIBUTIONS.—To the extent any con-
tribution to the pension-linked emergency savings account 
of a participant for a taxable year would exceed the limita-
tion of subparagraph (A)— 
‘‘(i) in the case of an eligible participant with 
another designated Roth account under the defined 
contribution plan, the plan may provide that— 
‘‘(I) the participant may elect to increase the 
participant’s contribution to such other account, 
and 
‘‘(II) in the absence of such a participant elec-
tion, the participant is deemed to have elected 
to increase the participant’s contributions to such 
account at the rate at which contributions were 
being made to the pension-linked emergency 
savings account, and 
‘‘(ii) in any other case, such plan shall provide 
that such excess contributions will not be accepted. 
‘‘(4) AUTOMATIC
CONTRIBUTION
ARRANGEMENT.—For pur-
poses of this section—
H. R. 2617—868 
‘‘(A) IN GENERAL.—An automatic contribution arrange-
ment described in this paragraph is an arrangement under 
which an eligible participant is treated as having elected 
to have the plan sponsor make elective contributions to 
a pension-linked emergency savings account at a partici-
pant contribution rate that is not more than 3 percent 
of the compensation of the eligible participant, unless the 
eligible participant, at any time (subject to such reasonable 
advance notice as is required by the plan administrator), 
affirmatively elects to— 
‘‘(i) make contributions at a different rate, or 
‘‘(ii) opt out of such contributions. 
‘‘(B) PARTICIPANT CONTRIBUTION RATE.—For purposes 
of an automatic contribution arrangement described in 
subparagraph (A), the plan sponsor— 
‘‘(i) shall select a participant contribution rate 
under such automatic contribution arrangement which 
meets the requirements of subparagraph (A), and 
‘‘(ii) may amend such rate (prior to the plan year 
for which such amendment would take effect) not more 
than once annually. 
‘‘(5) DISCLOSURE BY PLAN SPONSOR.— 
‘‘(A) IN GENERAL.—With respect to a defined contribu-
tion plan which includes a pension-linked emergency 
savings account, the administrator of the plan shall, not 
less than 30 days and not more than 90 days prior to 
the date of the first contribution to the pension-linked 
emergency savings account, including any contribution 
under an automatic contribution arrangement described 
in section 801(d)(2) of the Employee Retirement Income 
Security Act of 1974, or the date of any adjustment to 
the 
participant 
contribution 
rate 
under 
section 
801(d)(2)(B)(ii) of such Act, and not less than annually 
thereafter, shall furnish to the participant a notice 
describing— 
‘‘(i) the purpose of the account, which is for short- 
term, emergency savings; 
‘‘(ii) the limits on, and tax treatment of, contribu-
tions to the pension-linked emergency savings account 
of the participant; 
‘‘(iii) any fees, expenses, restrictions, or charges 
associated with such pension-linked emergency savings 
account; 
‘‘(iv) procedures for electing to make contributions 
or opting out of the pension-linked emergency savings 
account, changing participant contribution rates for 
such account, and making participant withdrawals 
from such pension-linked emergency savings account, 
including any limits on frequency; 
‘‘(v) the amount of the intended contribution or 
the change in the percentage of the compensation of 
the participant of such contribution, if applicable; 
‘‘(vi) the amount in the pension-linked emergency 
savings account and the amount or percentage of com-
pensation that a participant has contributed to such 
account;
H. R. 2617—869 
‘‘(vii) the designated investment option under sec-
tion 801(c)(1)(A)(iii) of the Employee Retirement 
Income Security Act of 1974 for amounts contributed 
to the pension-linked emergency savings account; 
‘‘(viii) the options under section 801(e) of such Act 
for the account balance of the pension-linked emer-
gency savings account after termination of the employ-
ment of the participant; and 
‘‘(ix) the ability of a participant who becomes a 
highly compensated employee (as such term is defined 
in section 414(q)) to, as described in section 801(b)(2) 
of the Employee Retirement Income Security Act of 
1974, withdraw any account balance from a pension- 
linked emergency savings account and the restriction 
on the ability of such a participant to make further 
contributions to the pension-linked emergency savings 
account. 
‘‘(B) NOTICE REQUIREMENTS.—A notice furnished to a 
participant under subparagraph (A) shall be— 
‘‘(i) sufficiently accurate and comprehensive to 
apprise the participant of the rights and obligations 
of the participant with regard to the pension-linked 
emergency savings account of the participant; and 
‘‘(ii) written in a manner calculated to be under-
stood by the average participant. 
‘‘(C) CONSOLIDATED
NOTICES.—The required notices 
under subparagraph (A) may be included with any other 
notice under the Employee Retirement Income Security 
Act of 1974, including under section 404(c)(5)(B) or 514(e)(3) 
of such Act, or under section 401(k)(13)(E) or 414(w)(4), 
if such other notice is provided to the participant at the 
time required for such notice. 
‘‘(6) EMPLOYER
MATCHING
CONTRIBUTIONS
TO
A
DEFINED 
CONTRIBUTION PLAN FOR EMPLOYEE CONTRIBUTIONS TO A PEN-
SION-LINKED EMERGENCY SAVINGS ACCOUNT.— 
‘‘(A) IN GENERAL.—If an employer makes any matching 
contributions to a defined contribution plan of which a 
pension-linked emergency savings account is part, subject 
to the limitations of paragraph (3), the employer shall 
make matching contributions on behalf of an eligible 
participant on account of the participant’s contributions 
to the pension-linked emergency savings account at the 
same rate as any other matching contribution on account 
of an elective contribution by such participant. The 
matching contributions shall be made to the participant’s 
account under the defined contribution plan which is not 
the pension-linked emergency savings account. Such 
matching contributions on account of contributions to the 
pension-linked emergency savings account shall not exceed 
the maximum account balance under paragraph (3)(A) for 
such plan year. 
‘‘(B) COORDINATION
RULE.—For purposes of any 
applicable limitation on matching contributions, any 
matching contributions made under the plan shall be 
treated first as attributable to the elective deferrals of 
the participant other than contributions to a pension-linked 
emergency savings account.
H. R. 2617—871 
sponsor of the pension-linked emergency savings account, 
except for purposes of 401(a)(31)(B), a distribution from 
a pension-linked emergency savings account which is 
contributed as provided in paragraph (8)(A)(i) shall be 
treated as an eligible rollover distribution. 
‘‘(11) EXCEPTION TO PLAN AMENDMENT RULES.—Notwith-
standing section 411(d)(6), a plan which includes a pension- 
linked emergency savings account may cease to offer such 
accounts at any time. 
‘‘(12) ANTI-ABUSE RULES.—A plan of which a pension-linked 
emergency savings account is part— 
‘‘(A) may employ reasonable procedures to limit the 
frequency or amount of matching contributions with respect 
to contributions to such account, solely to the extent nec-
essary to prevent manipulation of the rules of the plan 
to cause matching contributions to exceed the intended 
amounts or frequency, and 
‘‘(B) shall not be required to suspend matching con-
tributions following any participant withdrawal of contribu-
tions, including elective deferrals and employee contribu-
tions, whether or not matched and whether or not made 
pursuant to an automatic contribution arrangement 
described in paragraph (4). 
The Secretary, in consultation with the Secretary of Labor, 
shall issue regulations or other guidance not later than 12 
months after the date of the enactment of the SECURE 2.0 
Act of 2022 with respect to the anti-abuse rules described 
in the preceding sentence.’’. 
(2) TREATMENT FOR PURPOSES OF ADDITIONAL TAX ON EARLY 
DISTRIBUTIONS.—Section 72(t)(2), as amended by the preceding 
provisions of this Act, is further amended by adding at the 
end the following new subparagraph: 
‘‘(J) DISTRIBUTIONS FROM PENSION-LINKED EMERGENCY 
SAVINGS
ACCOUNT.—Distributions from a pension-linked 
emergency savings account pursuant to section 402A(e).’’. 
(3) BASIS RECOVERY.—Section 72(d) is amended by adding 
at the end the following new paragraph: 
‘‘(3) TREATMENT OF CONTRIBUTIONS TO A PENSION-LINKED 
EMERGENCY SAVINGS ACCOUNT.—For purposes of this section, 
contributions to a pension-linked emergency savings account 
to which section 402A(e) applies (and any income allocable 
thereto) may be treated as a separate contract.’’. 
(f) REGULATORY AUTHORITY.—The Secretary of Labor and the 
Secretary of the Treasury (or a delegate of either such Secretary) 
shall have authority to issue regulations or other guidance, and 
to coordinate in developing regulations or other guidance, to carry 
out the purposes of this Act, including— 
(1) adjustment of the limitation under section 801(d)(1) 
of the Employee Retirement Income Security Act of 1974 and 
section 402A(e)(3) of the Internal Revenue Code of 1986, as 
added by this Act, to account for inflation; 
(2) expansion of corrections programs, if necessary; 
(3) model plan language and notices relating to pension- 
linked emergency savings accounts; and 
(4) with regard to interactions with section 401(k)(13) of 
the Internal Revenue Code of 1986.
H. R. 2617—872 
(g) EFFECTIVE DATE.—The amendments made by this section 
shall apply to plan years beginning after December 31, 2023. 
SEC. 128. ENHANCEMENT OF 403(b) PLANS. 
(a) IN GENERAL.—Subparagraph (A) of section 403(b)(7) is 
amended by striking ‘‘if the amounts are to be invested in regulated 
investment company stock to be held in that custodial account’’ 
and inserting ‘‘if the amounts are to be held in that custodial 
account and are invested in regulated investment company stock 
or a group trust intended to satisfy the requirements of Internal 
Revenue Service Revenue Ruling 81–100 (or any successor guid-
ance)’’. 
(b) CONFORMING AMENDMENT.—The heading of paragraph (7) 
of section 403(b) is amended by striking ‘‘FOR REGULATED INVEST-
MENT COMPANY STOCK’’. 
(c) EFFECTIVE DATE.—The amendments made by this section 
shall apply to amounts invested after the date of the enactment 
of this Act. 
TITLE II—PRESERVATION OF INCOME 
SEC. 201. REMOVE REQUIRED MINIMUM DISTRIBUTION BARRIERS FOR 
LIFE ANNUITIES. 
(a) IN GENERAL.—Section 401(a)(9) is amended by adding at 
the end the following new subparagraph: 
‘‘(J) CERTAIN
INCREASES
IN
PAYMENTS
UNDER
A 
COMMERCIAL ANNUITY.—Nothing in this section shall pro-
hibit a commercial annuity (within the meaning of section 
3405(e)(6)) that is issued in connection with any eligible 
retirement plan (within the meaning of section 402(c)(8)(B), 
other than a defined benefit plan) from providing one or 
more of the following types of payments on or after the 
annuity starting date: 
‘‘(i) annuity payments that increase by a constant 
percentage, applied not less frequently than annually, 
at a rate that is less than 5 percent per year, 
‘‘(ii) a lump sum payment that— 
‘‘(I) results in a shortening of the payment 
period with respect to an annuity or a full or 
partial commutation of the future annuity pay-
ments, provided that such lump sum is determined 
using reasonable actuarial methods and assump-
tions, as determined in good faith by the issuer 
of the contract, or 
‘‘(II) accelerates the receipt of annuity pay-
ments that are scheduled to be received within 
the ensuing 12 months, regardless of whether such 
acceleration shortens the payment period with 
respect to the annuity, reduces the dollar amount 
of benefits to be paid under the contract, or results 
in a suspension of annuity payments during the 
period being accelerated, 
‘‘(iii) an amount which is in the nature of a divi-
dend or similar distribution, provided that the issuer
H. R. 2617—873 
of the contract determines such amount using reason-
able actuarial methods and assumptions, as deter-
mined in good faith by the issuer of the contract, 
when calculating the initial annuity payments and the 
issuer’s experience with respect to those factors, or 
‘‘(iv) a final payment upon death that does not 
exceed the excess of the total amount of the consider-
ation paid for the annuity payments, less the aggregate 
amount of prior distributions or payments from or 
under the contract.’’. 
(b) EFFECTIVE DATE.—This section shall apply to calendar years 
ending after the date of the enactment of this Act. 
SEC. 202. QUALIFYING LONGEVITY ANNUITY CONTRACTS. 
(a) IN GENERAL.—Not later than the date which is 18 months 
after the date of the enactment of this Act, the Secretary of the 
Treasury (or the Secretary’s delegate) shall amend the regulation 
issued by the Department of the Treasury relating to ‘‘Longevity 
Annuity Contracts’’ (79 Fed. Reg. 37633 (July 2, 2014)), as follows: 
(1) REPEAL 25-PERCENT PREMIUM LIMIT.—The Secretary (or 
delegate) shall amend Q&A–17(b)(3) of Treas. Reg. section 
1.401(a)(9)–6 and Q&A–12(b)(3) of Treas. Reg. section 1.408– 
8 to eliminate the requirement that premiums for qualifying 
longevity annuity contracts be limited to 25 percent of an 
individual’s account balance, and to make such corresponding 
changes to the regulations and related forms as are necessary 
to reflect the elimination of this requirement. 
(2) INCREASE DOLLAR LIMITATION.— 
(A) IN
GENERAL.—The Secretary (or delegate) shall 
amend Q&A–17(b)(2)(i) of Treas. Reg. section 1.401(a)(9)– 
6 and Q&A–12(b)(2)(i) of Treas. Reg. section 1.408–8 to 
increase the dollar limitation on premiums for qualifying 
longevity annuity contracts from $125,000 to $200,000, and 
to make such corresponding changes to the regulations 
and related forms as are necessary to reflect this increase 
in the dollar limitation. 
(B) ADJUSTMENTS FOR INFLATION.—The Secretary (or 
delegate) shall amend Q&A–17(d)(2)(i) of Treas. Reg. sec-
tion 1.401(a)(9)–6 to provide that, in the case of calendar 
years beginning on or after January 1 of the second year 
following the year of enactment of this Act, the $200,000 
dollar limitation (as increased by subparagraph (A)) will 
be adjusted at the same time and in the same manner 
as the limits are adjusted under section 415(d) of the 
Internal Revenue Code of 1986, except that the base period 
shall be the calendar quarter beginning July 1 of the year 
of enactment of this Act, and any increase to such dollar 
limitation which is not a multiple of $10,000 will be 
rounded to the next lowest multiple of $10,000. 
(3) FACILITATE JOINT AND SURVIVOR BENEFITS.—The Sec-
retary (or delegate) shall amend Q&A–17(c) of Treas. Reg. 
section 1.401(a)(9)–6, and make such corresponding changes 
to the regulations and related forms as are necessary, to provide 
that, in the case of a qualifying longevity annuity contract 
which was purchased with joint and survivor annuity benefits 
for the individual and the individual’s spouse which were 
permissible under the regulations at the time the contract
H. R. 2617—874 
was originally purchased, a divorce occurring after the original 
purchase and before the annuity payments commence under 
the contract will not affect the permissibility of the joint and 
survivor annuity benefits or other benefits under the contract, 
or require any adjustment to the amount or duration of benefits 
payable under the contract, provided that any qualified 
domestic relations order (within the meaning of section 414(p) 
of the Internal Revenue Code of 1986) or, in the case of an 
arrangement not subject to section 414(p) of such Code or 
section 206(d) of the Employee Retirement Income Security 
Act of 1974, any divorce or separation instrument (as defined 
in subsection (b))— 
(A) provides that the former spouse is entitled to the 
survivor benefits under the contract; 
(B) provides that the former spouse is treated as a 
surviving spouse for purposes of the contract; 
(C) does not modify the treatment of the former spouse 
as the beneficiary under the contract who is entitled to 
the survivor benefits; or 
(D) does not modify the treatment of the former spouse 
as the measuring life for the survivor benefits under the 
contract. 
(4) PERMIT SHORT FREE LOOK PERIOD.—The Secretary (or 
delegate) shall amend Q&A–17(a)(4) of Treas. Reg. section 
1.401(a)(9)–6 to ensure that such Q&A does not preclude a 
contract from including a provision under which an employee 
may rescind the purchase of the contract within a period not 
exceeding 90 days from the date of purchase. 
(b) DIVORCE OR SEPARATION INSTRUMENT.—For purposes of sub-
section (a)(3), the term ‘‘divorce or separation instrument’’ means— 
(1) a decree of divorce or separate maintenance or a written 
instrument incident to such a decree; 
(2) a written separation agreement; or 
(3) a decree (not described in paragraph (1)) requiring 
a spouse to make payments for the support or maintenance 
of the other spouse. 
(c) EFFECTIVE DATES, ENFORCEMENT, AND INTERPRETATIONS.— 
(1) EFFECTIVE DATES.— 
(A) Paragraphs (1) and (2) of subsection (a) shall be 
effective with respect to contracts purchased or received 
in an exchange on or after the date of the enactment 
of this Act. 
(B) Paragraphs (3) and (4) of subsection (a) shall be 
effective with respect to contracts purchased or received 
in an exchange on or after July 2, 2014. 
(2) ENFORCEMENT AND INTERPRETATIONS.—Prior to the date 
on which the Secretary of the Treasury issues final regulations 
pursuant to subsection (a)— 
(A) the Secretary (or delegate) shall administer and 
enforce the law in accordance with subsection (a) and the 
effective dates in paragraph (1) of this subsection; and 
(B) taxpayers may rely upon their reasonable good 
faith interpretations of subsection (a). 
(d) REGULATORY SUCCESSOR PROVISION.—Any reference to a 
regulation under this section shall be treated as including a ref-
erence to any successor regulation thereto.