I 
117TH CONGRESS 
2D SESSION 
H. R. 9252 
To amend the Internal Revenue Code of 1986 to provide incentives for 
the use of automatic portability arrangements under defined contribution 
plans, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
OCTOBER 28, 2022 
Mr. SCHNEIDER (for himself and Mr. ESTES) introduced the following bill; 
which was referred to the Committee on Ways and Means 
A BILL 
To amend the Internal Revenue Code of 1986 to provide 
incentives for the use of automatic portability arrange-
ments under defined contribution plans, and for other 
purposes. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Advancing Auto-Port-
ability Act of 2022’’. 
SEC. 2. FINDINGS. 
Congress finds as follows: 
VerDate Sep 11 2014 
01:23 Oct 29, 2022
Jkt 039200
PO 00000
Frm 00001
Fmt 6652
Sfmt 6201
E:\BILLS\H9252.IH
H9252
kjohnson on DSK79L0C42PROD with BILLS
(1) Up to $105,000,000,000 of retirement sav-
ings leaves the defined contribution pension plan 
system annually because employees cash out their 
savings after a job change. 
(2) Federal law should encourage the private 
sector to reduce such cash-outs by developing auto-
mated solutions to improve defined contribution plan 
portability. 
SEC. 3. PROHIBITED TRANSACTION EXEMPTION. 
(a) IN GENERAL.—Section 4975(d) of the Internal 
Revenue Code of 1986 is amended— 
(1) by striking ‘‘or’’ at the end of paragraph 
(22)(I), 
(2) by striking the period at the end of para-
graph (23) and inserting ‘‘, or’’, and 
(3) by adding at the end the following new 
paragraph: 
‘‘(24) any transaction described in subpara-
graph (D) or (E) of subsection (c)(1) which consists 
of the receipt of fees by an automatic portability 
provider in connection with such provider’s exercise 
of discretion with respect to an automatic portability 
transaction.’’. 
VerDate Sep 11 2014 
01:23 Oct 29, 2022
Jkt 039200
PO 00000
Frm 00002
Fmt 6652
Sfmt 6201
E:\BILLS\H9252.IH
H9252
kjohnson on DSK79L0C42PROD with BILLS
(b) DEFINITIONS.—Section 4975(f) of the Internal 
Revenue Code of 1986 is amended by adding at the end 
the following new paragraph: 
‘‘(12) RULES RELATING TO AUTOMATIC PORT-
ABILITY TRANSACTIONS.— 
‘‘(A) IN GENERAL.—For purposes of sub-
section (d)(24)— 
‘‘(i) AUTOMATIC PORTABILITY TRANS-
ACTION.—An automatic portability trans-
action is a transfer of assets made— 
‘‘(I) from an individual retire-
ment plan which is established on be-
half of an individual and to which 
amounts were transferred under sec-
tion 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 affirmatively 
opted out of such transfer. 
VerDate Sep 11 2014 
01:23 Oct 29, 2022
Jkt 039200
PO 00000
Frm 00003
Fmt 6652
Sfmt 6201
E:\BILLS\H9252.IH
H9252
kjohnson on DSK79L0C42PROD with BILLS
‘‘(ii) AUTOMATIC
PORTABILITY
PRO-
VIDER.—An automatic portability provider 
is a person that executes transfers de-
scribed in clause (i). 
‘‘(B) CONDITIONS FOR AUTOMATIC PORT-
ABILITY
TRANSACTIONS.—Subsection (d)(24) 
shall not apply to an automatic portability 
transaction unless the following requirements 
are satisfied: 
‘‘(i) ACKNOWLEDGMENT
OF
FIDU-
CIARY STATUS.—An automatic portability 
provider shall acknowledge in writing, at 
such time and format as specified by the 
Secretary, that the provider is a fiduciary 
with respect to the individual on whose be-
half the individual retirement plan de-
scribed in subparagraph (A)(i)(I) is estab-
lished. 
‘‘(ii) FEES.—The fees and compensa-
tion received by the automatic portability 
provider in connection with the automatic 
portability transaction shall not exceed rea-
sonable compensation and must be ap-
proved in writing by the plan fiduciary for 
VerDate Sep 11 2014 
01:23 Oct 29, 2022
Jkt 039200
PO 00000
Frm 00004
Fmt 6652
Sfmt 6201
E:\BILLS\H9252.IH
H9252
kjohnson on DSK79L0C42PROD with BILLS
the 
plan 
described 
in 
subparagraph 
(A)(i)(II). 
‘‘(iii) DATA
USAGE.—The automatic 
portability provider shall not market or sell 
data relating to the individual retirement 
plan described in subparagraph (A)(i)(I). 
‘‘(iv) 
OPEN
PARTICIPATION.—The 
automatic portability provider shall offer 
automatic portability transactions on the 
same terms to any plan described in sub-
paragraph (A)(i)(II) regardless of whether 
the provider provides other services for 
such plan. 
‘‘(v) PRE-TRANSACTION
NOTICE.—At 
least 30 days in advance of an automatic 
portability transaction, the automatic port-
ability provider shall provide notice to the 
individual on whose behalf the individual 
retirement plan described in subparagraph 
(A)(i)(I) is established which includes— 
‘‘(I) a description of the auto-
matic portability transaction and the 
fees which will be charged in connec-
tion with the transaction, 
VerDate Sep 11 2014 
01:23 Oct 29, 2022
Jkt 039200
PO 00000
Frm 00005
Fmt 6652
Sfmt 6201
E:\BILLS\H9252.IH
H9252
kjohnson on DSK79L0C42PROD with BILLS
‘‘(II) a description of the individ-
ual’s right to affirmatively elect not to 
participate in the transaction, the pro-
cedures for such an election, and a 
telephone number at which the indi-
vidual can contact the automatic port-
ability provider, and 
‘‘(III) such other disclosures as 
the Secretary may require by regula-
tion. 
‘‘(vi) POST-TRANSACTION
NOTICE.— 
Not later than 3 business days after an 
automatic portability transaction, the auto-
matic portability provider shall provide no-
tice 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 portability provider with re-
spect to the individual’s account, 
‘‘(II) all relevant information re-
garding the location and amount of 
any transferred assets, 
‘‘(III) 
a 
statement 
of 
fees 
charged against the account by the 
VerDate Sep 11 2014 
01:23 Oct 29, 2022
Jkt 039200
PO 00000
Frm 00006
Fmt 6652
Sfmt 6201
E:\BILLS\H9252.IH
H9252
kjohnson on DSK79L0C42PROD with BILLS