I 
112TH CONGRESS 
1ST SESSION H. R. 1534 
To amend the Internal Revenue Code of 1986 to encourage retirement savings 
by modifying requirements with respect to employer-established IRAs, 
and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
APRIL 14, 2011 
Mr. KIND (for himself and Mr. REICHERT) introduced the following bill; which 
was referred to the Committee on Ways and Means, and in addition to 
the Committee on Education and the Workforce, for a period to be subse-
quently determined by the Speaker, in each case for consideration of such 
provisions as fall within the jurisdiction of the committee concerned 
A BILL 
To amend the Internal Revenue Code of 1986 to encourage 
retirement savings by modifying requirements with re-
spect to employer-established IRAs, and for other pur-
poses. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 
(a) SHORT TITLE.—This Act may be cited as the 
‘‘Small Businesses Add Value for Employees Act of 2011’’ 
or the ‘‘SAVE Act of 2011’’. 
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(b) TABLE OF CONTENTS.—The table of contents for 
this Act is as follows: 
Sec. 1. Short title; table of contents. 
Sec. 2. Elimination of restriction on SIMPLE IRA rollovers. 
Sec. 3. Allowing mid-year SIMPLE IRA plan termination. 
Sec. 4. Elimination of higher penalty on early SIMPLE IRA distributions. 
Sec. 5. Increase in contributions allowed for SIMPLE IRA. 
Sec. 6. SIMPLE 401(k) parity for additional nonelective employer contribu-
tions. 
Sec. 7. Automatic deferral IRAs. 
Sec. 8. 401(k) automatic deferral percentage parity. 
Sec. 9. Limited transfer of unused balance in flexible spending arrangement. 
Sec. 10. Prior years compensation taken into account in determining maximum 
retirement savings deduction. 
Sec. 11. Expanding small employer pension plan startup cost credit. 
Sec. 12. Financial education. 
Sec. 13. Multiple small employer plan. 
Sec. 14. Clarification of treatment of multiple employer defined contribution 
plans. 
Sec. 15. Clarification of treatment of individual retirement plans with payroll 
deduction. 
Sec. 16. Disclosure regarding lifetime income. 
SEC. 2. ELIMINATION OF RESTRICTION ON SIMPLE IRA 
ROLLOVERS. 
(a) IN GENERAL.—Paragraph (3) of section 408(d) 
of the Internal Revenue Code of 1986 (relating to rollover 
contribution) is amended by striking subparagraph (G). 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to distributions in taxable years 
beginning after the date of the enactment of this Act. 
SEC. 3. ALLOWING MID-YEAR SIMPLE IRA PLAN TERMI-
NATION. 
(a) IN GENERAL.—Subsection (p) of section 408 of 
the Internal Revenue Code of 1986 is amended by adding 
at the end the following new paragraph: 
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‘‘(11) SPECIAL RULES RELATING TO MID-YEAR 
TERMINATION.— 
‘‘(A) IN
GENERAL.—An employer may 
elect to terminate (in such form and manner as 
the Secretary may provide) the qualified salary 
reduction arrangement of the employer at any 
time during the year. 
‘‘(B) PRORATION
AND
APPLICATION
OF 
QUALIFIED PLAN LIMITATION.—In the case of a 
year during which an employer terminates a 
qualified salary reduction arrangement before 
the end of such year— 
‘‘(i) the applicable dollar amount in 
effect for such year shall be prorated to 
the date of such termination, 
‘‘(ii) for purposes of determining the 
compensation of an employee for such ar-
rangement for such year, the year of such 
termination shall be treated as ending on 
the date of such termination, and 
‘‘(iii) subparagraph (D) of paragraph 
(2) shall not apply with respect to a quali-
fied plan maintained in such year only 
after the date of such termination.’’. 
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(b) EFFECTIVE DATE.—The amendments made by 
this section shall apply to years beginning after the date 
of the enactment of this Act. 
SEC. 4. ELIMINATION OF HIGHER PENALTY ON EARLY SIM-
PLE IRA DISTRIBUTIONS. 
(a) IN GENERAL.—Subsection (t) of section 72 of the 
Internal Revenue Code of 1986 (relating to 10-percent ad-
ditional tax on early distributions from qualified retire-
ment plans) is amended by striking paragraph (6). 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to distributions in taxable years 
beginning after the date of the enactment of this Act. 
SEC. 5. INCREASE IN CONTRIBUTIONS ALLOWED FOR SIM-
PLE IRA. 
(a) ADDITIONAL NONELECTIVE EMPLOYER CON-
TRIBUTIONS ALLOWED.— 
(1) IN GENERAL.—Subparagraph (A) of section 
408(p)(2) of the Internal Revenue Code of 1986 (re-
lating to qualified salary reduction arrangement) is 
amended by striking ‘‘and’’ at the end of clause (iii), 
by redesignating clause (iv) as clause (v), and by in-
serting after clause (iii) the following new clause: 
‘‘(iv) the employer may make, in addi-
tion to any other contribution under this 
paragraph, nonelective contributions of not 
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more than 10 percent of compensation 
(subject to the limitation described in sub-
paragraph (B)(ii)) for each employee who 
is eligible to participate in the arrangement 
and who has at least $5,000 of compensa-
tion from the employer for the year, and’’. 
(2) CONFORMING AMENDMENT.—Clause (v) of 
section 408(p)(2)(A) of such Code, as redesignated 
by this section, is amended by striking ‘‘clause (i) or 
(iii)’’ and inserting ‘‘clause (i), (iii), or (iv)’’. 
(b) INCREASE IN ELECTIVE CONTRIBUTION LIMITA-
TION.—Subparagraph (E) of section 408(p)(2) is amend-
ed to read as follows: 
‘‘(E) APPLICABLE DOLLAR AMOUNT.—For 
purposes of subparagraph (A)(ii), the applicable 
dollar amount shall be the applicable dollar 
amount in effect under subparagraph (B) of 
section 402(g)(1).’’. 
(c) SIMPLE IRA SUBJECT TO DEFINED CONTRIBU-
TION PLAN LIMITATION.—Subsection (p) of section 408 
of such Code is amended by adding at the end the fol-
lowing new paragraph: 
‘‘(11) SUBJECT
TO
DEFINED
CONTRIBUTION 
PLAN
LIMITATION.—An arrangement shall not be 
treated as a qualified salary reduction arrangement 
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for any year if contributions with respect to any em-
ployee for the year exceed the limitation of para-
graph (1) of section 415(c) (relating to limitation for 
defined contribution plans).’’. 
(d) EFFECTIVE DATE.—The amendments made by 
this section shall apply to contributions for taxable years 
beginning after December 31, 2011. 
SEC. 6. SIMPLE 401(k) PARITY FOR ADDITIONAL NONELEC-
TIVE EMPLOYER CONTRIBUTIONS. 
(a) IN GENERAL.—Subparagraph (B) of section 
401(k)(11) of such Code (relating to contribution require-
ments) is amended by adding at the end the following new 
clause: 
‘‘(iv) SPECIAL RULE FOR ADDITIONAL 
NONELECTIVE
EMPLOYER
CONTRIBU-
TIONS.—An arrangement shall not be 
treated as failing to meet the requirements 
of this subparagraph merely because under 
such arrangement the employer makes, in 
addition to any other contribution under 
this subparagraph, nonelective contribu-
tions of not more than 10 percent of com-
pensation for each employee who is eligible 
to participate in the arrangement and who 
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has at least $5,000 of compensation from 
the employer for the year.’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to plan years beginning after De-
cember 31, 2011. 
SEC. 7. AUTOMATIC DEFERRAL IRAS. 
(a) IN GENERAL.—Subpart A of part I of subchapter 
D of chapter 1 of the Internal Revenue Code of 1986 (re-
lating to pension, profit-sharing, stock bonus plans, etc.) 
is amended by inserting after section 408A the following 
new section: 
‘‘SEC. 408B. AUTOMATIC DEFERRAL IRAS. 
‘‘(a) IN GENERAL.—An automatic deferral IRA shall 
be treated for purposes of this title in the same manner 
as an individual retirement plan. An automatic deferral 
IRA may also be treated as a Roth IRA for purposes of 
this title if it meets the requirements of section 408A. 
‘‘(b) AUTOMATIC DEFERRAL IRA.—For purposes of 
this section, the term ‘automatic deferral IRA’ means an 
individual retirement plan (as defined in section 
7701(a)(37)) with respect to which contributions are made 
under an arrangement which satisfies the requirements of 
paragraphs (1) through (4) of subsection (c). 
‘‘(c) AUTOMATIC DEFERRAL IRA ARRANGEMENTS.— 
‘‘(1) ENROLLMENT.— 
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‘‘(A) IN GENERAL.—The requirements of 
this paragraph are met if each employee eligible 
to participate in the arrangement is treated as 
having elected to have the employer make pay-
ments as elective contributions to an automatic 
deferral IRA on behalf of such employee (which 
would have otherwise been made to the em-
ployee directly in cash) in an amount equal to 
so much of a qualified percentage of compensa-
tion of such employee as does not exceed the 
deductible amount for such year (within the 
meaning of section 219(b)). 
‘‘(B) ELIGIBILITY.—An employee is eligi-
ble to participate if such employee is described 
in paragraph (2) of section 408(k), except that 
for purposes of determining whether an em-
ployee is described in such paragraph, subpara-
graph (C) thereof shall be applied by sub-
stituting ‘$5,000’ for ‘$450’. 
‘‘(C) ELECTION OUT.—The election treat-
ed as having been made under subparagraph 
(A) shall cease to apply with respect to any em-
ployee who makes an affirmative election— 
‘‘(i) to not have such elective contribu-
tions made, or 
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‘‘(ii) not later than the close of the 
30-day period beginning on the date of the 
first contribution with respect to such em-
ployee, to make elective contributions at a 
level specified in such affirmative election. 
‘‘(D) QUALIFIED PERCENTAGE.—For pur-
poses of this paragraph, the term ‘qualified per-
centage’ means, with respect to any employee, 
any percentage determined under the trust 
agreement if such percentage is applied uni-
formly, does not exceed 15 percent, and is at 
least— 
‘‘(i) 3 percent during the period end-
ing on the last day of the first plan year 
which begins after the date on which the 
first elective contribution described in sub-
paragraph (A) is made with respect to 
such employee, and 
‘‘(ii) during any subsequent plan year, 
a percentage equal to— 
‘‘(I) 3 percent, plus 
‘‘(II) 1 percent multiplied by the 
number of plan years (but not more 
than 12) beginning after the plan year 
described in clause (i). 
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‘‘(2) NOTICE.— 
‘‘(A) IN GENERAL.—The requirements of 
this paragraph are met if, within a reasonable 
period before the first day an employee is eligi-
ble to participate in the arrangement, the em-
ployee receives written notice of the employee’s 
rights and obligations under the arrangement 
which— 
‘‘(i) is sufficiently accurate and com-
prehensive to apprise the employee of such 
rights, and 
‘‘(ii) is written in a manner calculated 
to be understood by the average employee 
to whom the arrangement applies. 
‘‘(B) TIMING
AND
CONTENT.—A notice 
shall not be treated as meeting the require-
ments of subparagraph (A) with respect to an 
employee unless— 
‘‘(i) the notice explains the employee’s 
right to elect not to have elective contribu-
tions made on the employee’s behalf (or to 
elect to have such contributions made at a 
different percentage), 
‘‘(ii) the notice explains how contribu-
tions made under the arrangement will be 
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invested in the absence of any investment 
election by the employee, and 
‘‘(iii) the employee has a reasonable 
period of time after receipt of the notice 
described in clauses (i) and (ii) and before 
the first elective contribution is made to 
make either such election. 
‘‘(3) DEFAULT INVESTMENT ARRANGEMENT.— 
The requirements of this paragraph are met if— 
‘‘(A) in the absence of an investment elec-
tion by the employee with respect to the em-
ployee’s interest in the trust, such interest is in-
vested as provided in regulations prescribed 
pursuant to subparagraph (A) of section 
404(c)(5) of the Employee Retirement Income 
Security Act of 1974, and 
‘‘(B) the employer provides each employee 
who has an interest in the trust, notice which 
meets the requirements of subparagraph (B) of 
such section. 
‘‘(4) ADMINISTRATIVE
REQUIREMENTS.—The 
requirements of this paragraph are met if— 
‘‘(A) an employer must make the elective 
employer contributions under paragraph (1)(A) 
not later than the close of the 30-day period 
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following the last day of the month with respect 
to which the contributions are to be made, 
‘‘(B) an employee may elect to terminate 
participation in the arrangement at any time 
during the year, except that if the employee so 
terminates, the arrangement may provide that 
the employee may elect to resume participation 
until the beginning of the next year, and 
‘‘(C) each employee eligible to participate 
may elect, during the 30-day period before the 
beginning of any year, or to modify the amount 
subject to such arrangement, for such year.’’. 
(b) PREEMPTION OF CONFLICTING STATE LAWS.— 
Any law of a State shall be superseded if it would directly 
or indirectly prohibit or restrict an employer from creating 
or organizing an automatic deferral IRA (as defined in 
section 408B of the Internal Revenue Service of 1986). 
(c) CLERICAL AMENDMENT.—The table of sections 
for subpart A of part I of subchapter D of chapter 1 of 
the Internal Revenue Code of 1986 is amended by insert-
ing after the item relating to 408A the following new item: 
‘‘408B. Automatic deferral IRAs.’’. 
(d) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2011. 
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SEC. 8. 401(k) AUTOMATIC DEFERRAL PERCENTAGE PAR-
ITY. 
(a) 
IN
GENERAL.—Clause 
(iii) 
of 
section 
401(k)(13)(C) of the Internal Revenue Code of 1986 is 
amended by striking ‘‘10 percent’’ and inserting ‘‘15 per-
cent’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to plan years beginning after De-
cember 31, 2011. 
SEC. 9. LIMITED TRANSFER OF UNUSED BALANCE IN 
FLEXIBLE SPENDING ARRANGEMENT. 
(a) IN GENERAL.—Section 125 of the Internal Rev-
enue Code of 1986 is amended by redesignating sub-
sections (i) and (j) as subsections (j) and (k), respectively, 
and by inserting after subsection (h) the following new 
subsection: 
‘‘(i) SPECIAL RULE
FOR UNUSED BENEFITS
IN 
FLEXIBLE SPENDING ARRANGEMENTS.— 
‘‘(1) IN GENERAL.—For purposes of this title, 
a plan or other arrangement shall not fail to be 
treated as a cafeteria plan or flexible spending ar-
rangement merely because such arrangement pro-
vides for qualified retirement distributions. 
‘‘(2) QUALIFIED RETIREMENT DISTRIBUTION.— 
‘‘(A) IN GENERAL.—For purposes of this 
section, the term ‘qualified retirement distribu-
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tion’ means any distribution to an individual of 
all or a portion of the employee’s account under 
such arrangement, but only to the extent— 
‘‘(i) the amount does not exceed the 
lesser of— 
‘‘(I) $250, or 
‘‘(II) the unused benefits with re-
spect to the arrangement, and 
‘‘(ii) the amount received is paid into 
a qualified retirement plan (as defined in 
section 4974(c)), or an eligible deferred 
compensation plan (as defined in section 
457(b)) of an eligible employer described in 
section 457(e)(1)(A), of the individual not 
later than the 60th day after the day on 
which the individual receives the payment 
or distribution. 
‘‘(B) UNUSED
BENEFITS.—For purposes 
of this paragraph, the term ‘unused benefits’ 
means, with respect to an employee, the excess 
of— 
‘‘(i) the maximum amount of reim-
bursement allowable to the employee dur-
ing a plan year under a flexible spending 
arrangement, over 
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‘‘(ii) the actual amount of reimburse-
ment during such year under such ar-
rangement. 
‘‘(C) SPECIAL RULES FOR TREATMENT OF 
CONTRIBUTIONS TO RETIREMENT PLANS.—For 
purposes of this title, qualified retirement dis-
tributions— 
‘‘(i) shall be treated as elective defer-
rals (as defined in section 402(g)(3)) in 
the case of contributions to a qualified 
cash or deferred arrangement (as defined 
in section 401(k)) or to an annuity con-
tract described in section 403(b), 
‘‘(ii) shall be treated as employer con-
tributions to which the employee has a 
nonforfeitable right in the case of a plan 
which is described in section 401(a) which 
includes a trust exempt from tax under 
section 501(a), 
‘‘(iii) shall be treated as deferred com-
pensation in the case of contributions to an 
eligible deferred compensation plan (as de-
fined in section 457(b)), and 
‘‘(iv) shall be treated in the manner 
designated for purposes of section 408 or 
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408A in the case of contributions to an in-
dividual retirement plan.’’. 
(b) EFFECTIVE DATE.—The amendments made by 
this section shall apply to plan years ending after the date 
of the enactment of this Act. 
SEC. 10. PRIOR YEARS COMPENSATION TAKEN INTO AC-
COUNT IN DETERMINING MAXIMUM RETIRE-
MENT SAVINGS DEDUCTION. 
(a) IN GENERAL.—Subparagraph (B) of section 
219(b)(1) of the Internal Revenue Code of 1986 is amend-
ed by striking ‘‘for such taxable year’’ and inserting ‘‘for 
the preceding taxable year’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to taxable years beginning after 
the date of the enactment of this Act. 
SEC. 11. EXPANDING SMALL EMPLOYER PENSION PLAN 
STARTUP COST CREDIT. 
(a) IN GENERAL.— 
(1) INCLUDING
STARTUP
COSTS
FOR
EM-
PLOYER-ESTABLISHED IRAS.—Paragraph (2) of sec-
tion 45E(d) of the Internal Revenue Code of 1986 
(defining eligible employer plan) is amended by 
striking ‘‘means a qualified employer plan’’ and all 
that follows and inserting: ‘‘means— 
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‘‘(A) a qualified employer plan within the 
meaning of section 4972(d), or 
‘‘(B) a plan of which a trust described in 
section 408(c) is a part.’’. 
(2) ADDITIONAL CREDIT AMOUNT.— 
(A) IN GENERAL.—Subsection (a) of sec-
tion 45E of such Code is amended by striking 
‘‘50 percent of’’ and all that follows and insert-
ing ‘‘the sum of— 
‘‘(1) the applicable percentage of the qualified 
startup costs paid or incurred by the taxpayer dur-
ing the taxable year, plus 
‘‘(2) $25 multiplied by the number of employees 
of the employer who participate in any eligible em-
ployer plan of the employer for the first time in such 
taxable year.’’. 
(B) 
APPLICABLE
PERCENTAGE.—Sub-
section (d) of section 45E of such Code is 
amended by adding at the end the following 
new paragraph: 
‘‘(4) APPLICABLE PERCENTAGE.—The applica-
ble percentage is— 
‘‘(A) in the case of a plan described in sub-
section (d)(2)(A), 75 percent, or 
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‘‘(B) in the case of a plan described in 
subsection (d)(2)(B), 50 percent.’’. 
(C) 
CONFORMING
AMENDMENT.—Para-
graph (2) of section 45E(c) of such Code (de-
fining eligible employer) is amended— 
(i) by striking ‘‘qualified employer 
plan’’ in each place it appears and insert-
ing ‘‘eligible employer plan’’, and 
(ii) by striking ‘‘QUALIFIED’’ in the 
heading thereof and inserting ‘‘ELIGIBLE’’. 
(3) INCREASED LIMITATION.—Paragraph (1) of 
section 45E(b) of such Code is amended by striking 
‘‘$500’’ and inserting ‘‘$750 ($2,000 in the case of 
qualified startup costs attributable to a plan de-
scribed in subsection (d)(2)(A))’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to costs paid or incurred in taxable 
years beginning after the date of the enactment of this 
Act. 
SEC. 12. FINANCIAL EDUCATION. 
(a) RETIREMENT PLAN EDUCATION
FOR SMALL 
BUSINESSES.—Not later than 6 months after the date of 
the enactment of this Act— 
(1) the Department of the Treasury Office of 
Financial Education, in consultation with the De-
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partment of Labor, shall develop and implement an 
outreach plan to educate small businesses on the 
types of retirement plans available and the benefits 
and requirements of such plans, and 
(2) the Secretary of the Treasury and the Sec-
retary of Labor shall develop recommendations for 
small businesses in order to improve retirement out-
comes. Such recommendations shall take into ac-
count established behavioral trends of employee in-
vestment and the effect of default design features 
such as auto escalation, expansion of auto rollovers, 
auto diversification for near retirees, and automatic 
forms of distribution. 
(b) FINANCIAL LITERACY.— 
(1) IN GENERAL.—Not later than 1 year after 
the date of the enactment of this Act, the Secretary 
of the Treasury, in consultation with the Secretary 
of Education, shall develop sample age-appropriate 
curricula to be made available for financial literacy 
education in elementary and secondary schools. 
(2) CONTENT OF CURRICULA.—Such curricula 
shall include the following: 
(A) How to balance a checkbook, read a 
credit card statement, and calculate interest 
rates. 
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(B) What a pay stub is and why Federal 
and State income taxes and Social Security and 
Medicare taxes are withheld from wages. 
(C) The differences between various types 
of bank accounts. 
(D) The significance of a credit score and 
how to read credit reports. 
(E) The marketing techniques frequently 
used by individuals and businesses to attract 
patrons. 
(F) The importance of saving for college 
and retirement, including the various methods 
for saving such as traditional pensions, 401(k)s, 
and IRAs. 
SEC. 13. MULTIPLE SMALL EMPLOYER PLAN. 
(a) IN GENERAL.—Paragraph (11) of section 401(k) 
of the Internal Revenue Code of 1986 is amended by add-
ing the following at the end thereof: 
‘‘(E) 
MULTIPLE
SMALL
EMPLOYER 
PLAN.— 
‘‘(i) IN GENERAL.—In the case of a 
plan described in clause (ii)— 
‘‘(I) the amount described in sub-
paragraph (B)(i)(I) shall be $10,000, 
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in lieu of the amount in effect under 
section 408(p)(2)(A)(ii), 
‘‘(II) such $10,000 amount shall 
be adjusted as described in section 
408(p)(2)(E)(ii) except that the base 
period taken into account shall be the 
calendar quarter beginning July 1, 
2011, 
‘‘(III) subclause (II) of subpara-
graph (B)(i) and clause (ii) of sub-
paragraph (B) shall not apply, and 
‘‘(IV) section 414(v) shall not 
apply. 
‘‘(ii) PLAN DESCRIBED.—A plan is de-
scribed in this clause if the plan satisfies 
the following requirements: 
‘‘(I) Such plan satisfies the re-
quirements of this paragraph, as 
modified by clause (i). 
‘‘(II) The plan is described in 
section 413(c). 
‘‘(III) The plan includes a quali-
fied automatic contribution arrange-
ment, as defined in paragraph (13), 
except that subparagraph (D) of para-
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graph (13) shall not apply and the 
qualified percentage shall be deter-
mined by reference to subclauses (I), 
(II), (III), and (IV) of paragraph 
(13)(C)(iii). 
‘‘(IV) The plan does not permit 
any participant or beneficiary to re-
ceive or maintain a loan from the 
plan. 
‘‘(V) The plan does not permit 
hardship distributions described in 
paragraph (2)(B)(i)(IV) except to the 
extent 
any 
such 
distribution 
is 
deemed, under regulations prescribed 
by the Secretary, to be on account of 
an immediate and heavy financial 
need of the employee and necessary to 
satisfy an immediate and heavy finan-
cial need of the employee. 
‘‘(VI) The plan is maintained 
pursuant to a model plan document 
published by the Secretary.’’. 
(b) SIMPLIFICATION.— 
(1) MODEL PLAN.—Within one year of the date 
of the enactment of this Act, the Secretary of the 
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Treasury shall publish a model plan that may be 
used to satisfy the requirement of subclause (VI) of 
section 401(k)(11)(E)(ii) of the Internal Revenue 
Code of 1986. 
(2) PROTECTION AGAINST LOSS.—Within 120 
days of the date of the enactment of this Act, the 
Secretary of Labor shall amend Department of 
Labor Regulation section 2550.404c–5(e)(4)(iv)(B) 
so that, in the case of a plan described in section 
401(k)(11)(E) of such Code ‘‘four years’’ shall be 
substituted for ‘‘120 days’’. 
(3) CLARIFYING DUTIES AND REDUCING BUR-
DENS.—Within one year of the date of the enact-
ment of this Act, the Secretary of Labor shall— 
(A) publish rules clarifying the extent to 
which the fiduciary duties of a participating 
employer and of a named fiduciary with respect 
to a plan described in section 401(k)(11)(E) of 
such Code are limited to prudently selecting 
and monitoring the provider of such plan and 
the services, fees, and investment options avail-
able from such provider, and 
(B) prescribe interim final regulations pro-
viding simplified means by which plans de-
scribed in section 401(k)(11)(E) of such Code 
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may satisfy the requirements of sections 102, 
103, and 105 of the Employee Retirement In-
come Security Act of 1974. 
(4) ELIMINATION OF DISINCENTIVE TO POOL-
ING.—Not later than one year after the date of the 
enactment of this Act, the Secretary of the Treasury 
shall prescribe final regulations under which a plan 
described in section 413(c) of such Code may be 
treated as satisfying the qualification requirements 
of section 401(a) of such Code despite the violation 
of such requirements with respect to one or more 
participating employers. Such rules may require that 
the portion of the plan attributable to such partici-
pating employers be spun off to plans maintained by 
such employers. 
(c) EFFECTIVE DATE.— 
(1) IN GENERAL.—Except as provided in para-
graph (2), the amendments made by this section 
shall apply to years beginning after December 31, 
2011. 
(2) EXCEPTION.—Subsection (b) shall apply as 
of the date of the enactment of this Act. 
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SEC. 14. CLARIFICATION OF TREATMENT OF MULTIPLE EM-
PLOYER DEFINED CONTRIBUTION PLANS. 
(a) IN GENERAL.—Section 3(2) of the Employee Re-
tirement Income Security Act of 1974 (29 U.S.C. 
1002(2)) is amended by adding at the end thereof the fol-
lowing new subparagraph: 
‘‘(C) A plan, fund, or program shall not fail to be 
treated as an employee pension benefit plan solely by rea-
son of the plan, fund, or program being established or 
maintained by two or more employers whose only relation-
ship is participation in the same plan, fund, or program. 
This subparagraph shall only apply to a plan, fund, or 
program that provides for an individual account for each 
participant and for benefits based solely upon the amount 
contributed to the participant’s account, and any income, 
expenses, gains and losses, and any forfeitures of accounts 
of other participants which may be allocated to such par-
ticipant’s account.’’. 
(b) CONFORMING AMENDMENT.—Section 3(2)(A) of 
such Act is amended by striking ‘‘Except as provided in 
subparagraph (B)’’ and inserting ‘‘Except as provided in 
subparagraphs (B) and (C)’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall take effect on the date of enactment of 
this Act. 
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SEC. 15. CLARIFICATION OF TREATMENT OF INDIVIDUAL 
RETIREMENT PLANS WITH PAYROLL DEDUC-
TION. 
(a) IN GENERAL.—Section 3(2) of the Employee Re-
tirement Income Security Act of 1974 (29 U.S.C. 
1002(2)), as amended by this Act, is amended by adding 
at the end the following new subparagraph: 
‘‘(D) An individual retirement plan (as defined in sec-
tion 7701(a)(37) of the Internal Revenue Code of 1986) 
shall not be considered a pension plan merely because an 
employer establishes a payroll deduction program for the 
purpose of enabling employees to make voluntary con-
tributions to such account or annuity.’’. 
(b) EFFECTIVE DATE.—The amendments made by 
this section shall take effect on the date of the enactment 
of this Act. 
SEC. 16. DISCLOSURE REGARDING LIFETIME INCOME. 
(a) IN GENERAL.—Subparagraph (B) of section 
105(a)(2) of the Employee Retirement Income Security 
Act of 1974 (29 U.S.C. 1025(a)(2)) is amended— 
(1) in clause (i), by striking ‘‘and’’ at the end; 
(2) in clause (ii), by striking ‘‘diversification.’’ 
and inserting ‘‘diversification, and’’; and 
(3) by inserting at the end the following: 
‘‘(iii) the lifetime income disclosure 
described in subparagraph (D)(i). 
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In the case of pension benefit statements de-
scribed in clause (i) of paragraph (1)(A), a life-
time income disclosure under clause (iii) of this 
subparagraph shall only be required to be in-
cluded in one pension benefit statement during 
any one 12-month period.’’. 
(b) LIFETIME INCOME.—Paragraph (2) of section 
105(a) of such Act (29 U.S.C. 1025(a)) is amended by 
adding at the end the following new subparagraph: 
‘‘(D) LIFETIME INCOME DISCLOSURE.— 
‘‘(i) IN GENERAL.— 
‘‘(I) DISCLOSURE.—A lifetime in-
come disclosure shall set forth the life-
time income stream equivalent of the 
total benefits accrued with respect to 
the participant or beneficiary. 
‘‘(II) LIFETIME INCOME STREAM 
EQUIVALENT
OF
THE
TOTAL
BENE-
FITS ACCRUED.—For purposes of this 
subparagraph, the term ‘lifetime in-
come stream equivalent of the total 
benefits accrued’ means the amount of 
monthly payments the participant or 
beneficiary would receive if the total 
accrued benefits of such participant or 
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beneficiary were used to provide life-
time income streams described in sub-
clause (III), based on assumptions 
specified in rules prescribed by the 
Secretary. 
‘‘(III) 
LIFETIME
INCOME 
STREAMS.—The 
lifetime 
income 
streams described in this subclause 
are a qualified joint and survivor an-
nuity (as defined in section 205(d)), 
based on assumptions specified in 
rules prescribed by the Secretary, in-
cluding the assumption that the par-
ticipant or beneficiary has a spouse of 
equal age, and a single life annuity. 
Such lifetime income streams may 
have a term certain or other features 
to the extent permitted under rules 
prescribed by the Secretary. 
‘‘(ii) MODEL DISCLOSURE.—Not later 
than 1 year after the date of the enact-
ment of the Lifetime Income Disclosure 
Act, the Secretary shall issue a model life-
time income disclosure, written in a man-
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ner so as to be understood by the average 
plan participant, that— 
‘‘(I) explains that the lifetime in-
come stream equivalent is only pro-
vided as an illustration; 
‘‘(II) explains that the actual 
payments under the lifetime income 
stream described in clause (i)(III) 
that may be purchased with the total 
benefits accrued will depend on nu-
merous factors and may vary substan-
tially from the lifetime income stream 
equivalent in the disclosures; 
‘‘(III) explains the assumptions 
upon which the lifetime income stream 
equivalent was determined; and 
‘‘(IV) provides such other similar 
explanations as the Secretary con-
siders appropriate. 
‘‘(iii) ASSUMPTIONS
AND
RULES.— 
Not later than 1 year after the date of the 
enactment of the Lifetime Income Disclo-
sure Act, the Secretary shall— 
‘‘(I) prescribe assumptions that 
administrators of individual account 
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plans may use in converting total ac-
crued benefits into lifetime income 
stream equivalents for purposes of 
this subparagraph; and 
‘‘(II) issue interim final rules 
under clause (i). 
In prescribing assumptions under sub-
clause (I), the Secretary may prescribe a 
single set of specific assumptions (in which 
case the Secretary may issue tables or fac-
tors that facilitate such conversions), or 
ranges of permissible assumptions. To the 
extent that an accrued benefit is or may be 
invested in a lifetime income stream de-
scribed in clause (i)(III), the assumptions 
prescribed under subclause (I) shall, to the 
extent appropriate, permit administrators 
of individual account plans to use the 
amounts payable under such lifetime in-
come stream as a lifetime income stream 
equivalent. 
‘‘(iv) LIMITATION ON LIABILITY.—No 
plan fiduciary, plan sponsor, or other per-
son shall have any liability under this title 
solely by reason of the provision of lifetime 
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income stream equivalents which are de-
rived in accordance with the assumptions 
and rules described in clause (iii) and 
which include the explanations contained in 
the model lifetime income disclosure de-
scribed in clause (ii). This clause shall 
apply without regard to whether the provi-
sion of such lifetime income stream equiva-
lent is required by subparagraph (B)(iii). 
‘‘(v) EFFECTIVE DATE.—The require-
ment in subparagraph (B)(iii) shall apply 
to pension benefit statements furnished 
more than 12 months after the latest of 
the issuance by the Secretary of— 
‘‘(I) interim final rules under 
clause (i); 
‘‘(II) the model disclosure under 
clause (ii); or 
‘‘(III) the assumptions under 
clause (iii).’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall take effect on the date of the enactment 
of this Act. 
Æ 
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