(d) COORDINATION WITH EMPLOYEE RETIREMENT 
INCOME SECURITY ACT OF 1974.— 
(1) EXEMPTION.— 
(A) IN
GENERAL.—Section 3(2) of the 
Employee Retirement Income Security Act of 
1974 (29 U.S.C. 1002(2)) is amended— 
(i) by inserting ‘‘or (C)’’ after ‘‘sub-
paragraph (B)’’ in subparagraph (A), and 
(ii) by adding at the end the following 
new subparagraph: 
‘‘(C) An automatic IRA arrangement de-
scribed in section 408B(d) of the Internal Rev-
enue Code of 1986 shall not be treated as an 
employee pension benefit plan or pension plan 
if, under the arrangement, contributions are to 
be made to an automatic IRA the provider of 
which is included in the website list established 
under section 408B(h)(3) of such Code, are to 
be made to an individual retirement plan des-
ignated by the employee, or are to be invested 
in retirement bonds (whether to the Secretary 
of the Treasury or to a designated trustee or 
other agent for that purpose).’’. 
(B) 
CUSTOMER
IDENTIFICATION
PRO-
GRAM.—Notwithstanding the amendment made 
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by subparagraph (A), an individual retirement 
plan established pursuant to an automatic IRA 
arrangement described in section 408B(d) of 
the Internal Revenue Code of 1986 shall, for 
purposes of any customer identification pro-
gram established under section 5318(l) of title 
31, United States Code, be treated as an ac-
count opened for the purpose of participating in 
an employee benefit plan established under the 
Employee Retirement Income Security Act of 
1974. 
(2) FIDUCIARY DUTIES.—Section 404(c)(2) of 
such Act is amended— 
(A) by inserting the following sentence be-
fore the last sentence: ‘‘In the case of an auto-
matic IRA under section 408B of such Code 
that is not exempt under section 3(2)(C), a par-
ticipant or beneficiary shall, for purposes of 
paragraph (1), be treated as exercising control 
over the assets in the account on and after the 
7th day after notice has been given to an em-
ployee that such automatic IRA has been estab-
lished on behalf of the employee.’’, and 
(B) by inserting ‘‘or with respect to an 
automatic IRA under section 408B of such 
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Code’’ after ‘‘arrangement’’ in the last sen-
tence. 
(e) NOTICE
OF
AVAILABILITY
OF
INVESTMENT 
GUIDELINES.— 
(1) IN GENERAL.—Section 408(i) (relating to 
reports) is amended by adding at the end the fol-
lowing new sentences: ‘‘Any report furnished under 
paragraph (2) to an individual shall include notice of 
the internet website of the Department of Labor for 
sources of information on individual investing and 
diversification.’’. 
(2) UPDATE INFORMATION.—Such information 
shall be modified (or updated) by the Secretary of 
Labor in consultation with the Secretary of the 
Treasury and the Chairman of the Securities and 
Exchange Commission to address needed changes 
due to the creation of automatic IRAs. 
(f) FAILURE TO PROVIDE ACCESS TO PAYROLL SAV-
INGS ARRANGEMENTS.—Chapter 43 (relating to qualified 
pension, etc., plans) is amended by adding at the end the 
following new section: 
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‘‘SEC. 4980J. REQUIREMENTS FOR COVERED EMPLOYERS 
TO PROVIDE EMPLOYEES ACCESS TO AUTO-
MATIC IRA ARRANGEMENTS. 
‘‘(a) GENERAL RULE.—There is hereby imposed a 
tax on any failure by a covered employer (as defined in 
section 408B) to meet the requirements of subsection (d) 
for a calendar year. 
‘‘(b) AMOUNT.— 
‘‘(1) IN GENERAL.—The amount of the tax im-
posed by subsection (a) on any failure for any cal-
endar year shall be $100 with respect to each em-
ployee to whom such failure relates. 
‘‘(2) TAX NOT TO APPLY WHERE FAILURE NOT 
DISCOVERED
AND
REASONABLE
DILIGENCE
EXER-
CISED.—No tax shall be imposed by subsection (a) 
on any failure during any period for which it is es-
tablished to the satisfaction of the Secretary that the 
employer subject to liability for the tax did not know 
that the failure existed and exercised reasonable dili-
gence to meet the requirements of subsection (d). 
‘‘(3) TAX NOT TO APPLY TO FAILURES COR-
RECTED WITHIN 90 DAYS.—No tax shall be imposed 
by subsection (a) on any failure if— 
‘‘(A) the employer subject to liability for 
the tax under subsection (a) exercised reason-
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able diligence to meet the requirements of sub-
section (d), and 
‘‘(B) the employer provides the automatic 
IRA arrangement described in section 408B to 
each employee eligible to participate in the ar-
rangement by the end of the 90-day period be-
ginning on the first date the employer knew, or 
exercising reasonable diligence would have 
known, that such failure existed. 
‘‘(4) WAIVER BY SECRETARY.—In the case of a 
failure which is due to reasonable cause and not to 
willful neglect, the Secretary may waive part or all 
of the tax imposed by subsection (a) to the extent 
that the payment of such tax would be excessive or 
otherwise inequitable relative to the failure involved. 
‘‘(c) PROCEDURES FOR NOTICE.—The Secretary may 
prescribe and implement procedures for obtaining con-
firmation that employers are in compliance with the re-
quirements of subsection (d). The Secretary, in the Sec-
retary’s discretion, may prescribe that the confirmation 
shall be obtained on an annual or less frequent basis, and 
may use for this purpose the annual report or quarterly 
report for employment taxes, or such other means as the 
Secretary may deem advisable. 
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‘‘(d) REQUIREMENT TO PROVIDE EMPLOYEE ACCESS 
TO AUTOMATIC IRA ARRANGEMENTS.—The requirements 
of this subsection are met if the employer meets the re-
quirements of section 408B.’’. 
(g) WAIVER OF EARLY WITHDRAWAL PENALTY FOR 
CERTAIN DISTRIBUTIONS FOLLOWING INITIAL ELECTION 
TO PARTICIPATE IN AUTOMATIC IRA ARRANGEMENT.— 
Section 72(t) is amended by adding at the end the fol-
lowing new paragraph: 
‘‘(11) 
DISTRIBUTION
FOLLOWING
INITIAL 
ELECTION TO PARTICIPATE IN AUTOMATIC IRA AR-
RANGEMENT.—Paragraph (1) shall not apply in the 
case of a distribution to a qualifying employee made 
not later than 90 days after the initial election 
under section 408B(d)(1)(B)(ii).’’. 
(h) BANKRUPTCY.—Section 522 of title 11, United 
States Code, is amended— 
(1) in subsection (d)(12) by inserting ‘‘408B,’’ 
after ‘‘408A,’’, and 
(2) in subsection (n) by inserting ‘‘, or in an 
automatic IRA arrangement described in section 
408B,’’. 
(i) AUTOMATIC IRA ADVISORY GROUP.— 
(1) IN GENERAL.—Not later than 60 days after 
the date of the enactment of this Act, the Secretary 
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of the Treasury and the Secretary of Labor shall 
jointly establish an Automatic IRA Advisory Group 
(in this subsection referred to as the ‘‘Advisory 
Group’’). The purpose of the Advisory Group shall 
be to make recommendations regarding the auto-
matic IRA investment options described in section 
408B(d)(5) of the Internal Revenue Code of 1986 
and the website described in section 408B(h)(3) of 
such Code, including, with respect to automatic IRA 
arrangements, the disclosure of information regard-
ing fees and expenses, the use of low-cost investment 
options, the appropriate use of electronic methods to 
provide notice and disclosure, and such other related 
matters as may be determined by the Secretaries. 
(2) MEMBERSHIP.—The Advisory Group shall 
consist of not more than 15 members and shall be 
composed of— 
(A) such persons as the Secretaries of the 
Treasury and Labor may consider appropriate 
to provide expertise regarding investments for 
retirement, including providers of individual re-
tirement accounts and individual retirement an-
nuities described in section 408 or 408A of 
such Code, and 
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(B) one or more representatives of the De-
partment of Labor and of the Department of 
the Treasury. 
(3) COMPENSATION.—The members of the Ad-
visory Group shall serve without compensation. 
(4) ADMINISTRATIVE
SUPPORT.—The Depart-
ment of the Treasury and the Department of Labor 
shall jointly provide appropriate administrative sup-
port to the Advisory Group, including technical as-
sistance. The Advisory Group may use the services 
and facilities of such Departments, with or without 
reimbursement, as jointly determined by such De-
partments. 
(5) REPORT BY ADVISORY GROUP.—Not later 
than 12 months after the date of the enactment of 
this Act, the Advisory Group shall submit to the 
Secretary of Labor and the Secretary of the Treas-
ury a report containing its recommendations. The 
Secretaries may request that the Advisory Group 
submit subsequent reports. 
(j) CONFORMING AMENDMENTS.— 
(1) The table of sections for subpart A of part 
I of subchapter D of chapter 1 is amended by insert-
ing after the item relating to section 408A the fol-
lowing new item: 
‘‘Sec. 408B. Right to automatic IRA arrangements at work.’’. 
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(2) The table of sections for chapter 43 is 
amended by adding at the end the following new 
item: 
‘‘Sec. 4980J. Requirements for employers to provide employees access to auto-
matic IRA arrangements.’’. 
(k) PREEMPTION OF CONFLICTING STATE LAWS.— 
The amendments made by this section shall supersede any 
law of a State that would directly or indirectly prohibit 
or restrict the establishment or operation of an automatic 
IRA arrangement meeting the requirements of section 
408B of the Internal Revenue Code of 1986. Nothing in 
such amendments shall be construed to impair or super-
sede any State law to the extent it provides a remedy for 
the failure to make payroll deposit payments under any 
such automatic IRA arrangement within the period re-
quired under such section 408B. 
(l) EFFECTIVE DATE.—The amendments made by 
this section shall apply to calendar years beginning after 
December 31, 2018. 
SEC. 3. CREDIT FOR SMALL EMPLOYERS MAINTAINING 
AUTOMATIC IRA ARRANGEMENTS. 
(a) IN GENERAL.—Subpart D of part IV of sub-
chapter A of chapter 1 (relating to business related cred-
its) is amended by adding at the end the following new 
section: 
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‘‘SEC. 45S. SMALL EMPLOYER AUTOMATIC IRA ARRANGE-
MENT. 
‘‘(a) GENERAL RULE.—For purposes of section 38, 
in the case of an eligible employer maintaining an auto-
matic IRA arrangement meeting the requirements of sec-
tion 408B (without regard to whether the employer is re-
quired to maintain the arrangement), the small employer 
automatic IRA arrangement credit determined under this 
section for any taxable year is the amount determined 
under subsection (b). 
‘‘(b) AMOUNT OF CREDIT.— 
‘‘(1) IN GENERAL.—The amount of the credit 
determined under this section for any taxable year 
with respect to an eligible employer shall be the sum 
of— 
‘‘(A) $25 multiplied by the number of 
qualifying employees (within the meaning of 
section 408B(c)) for whom contributions are 
made under the automatic IRA arrangement re-
ferred to in subsection (a) for the calendar year 
in which the taxable year begins, plus 
‘‘(B) $500 for the taxable year which be-
gins in the first calendar year, and $250 for the 
taxable year which begins in the second cal-
endar year, in which the eligible employer main-
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tains an automatic IRA arrangement meeting 
the requirements of section 408B. 
‘‘(2) LIMITATION.—No more than 10 qualifying 
employees may be taken into account under para-
graph (1)(A) for a taxable year. 
‘‘(3) DURATION
OF
CREDIT.—The credit de-
scribed in paragraph (1)(A) shall apply only for a 
taxable year which begins in the first 6 calendar 
years in which the eligible employer maintains an 
automatic IRA arrangement meeting the require-
ments of section 408B. 
‘‘(4) COORDINATION
WITH
SMALL
EMPLOYER 
STARTUP CREDIT.— 
‘‘(A) No credit shall be allowed under this 
section to the employer for any taxable year if 
a credit is determined under section 45E with 
respect to the employer for the taxable year. 
‘‘(B) If the eligible employer maintains an 
automatic IRA arrangement meeting the re-
quirements of section 408B with respect to any 
of the first three calendar years for which the 
employer could adopt such an arrangement and 
subsequently adopts an eligible employer plan 
for its employees for any of those years which 
it maintains for such third taxable year, then 
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section 45E(b)(1) shall be applied with respect 
to the eligible employer by replacing ‘2 taxable 
years’ with ‘3 taxable years’. 
‘‘(c) ELIGIBLE EMPLOYER.—For purposes of this 
section, the term ‘eligible employer’ means, with respect 
to any calendar year in which the taxable year begins, an 
employer which— 
‘‘(1) maintains an automatic IRA arrangement 
meeting the requirements of section 408B, 
‘‘(2) on each day during the preceding calendar 
year, had no more than 100 employees, and 
‘‘(3) did not maintain a qualifying plan or ar-
rangement (described in section 408B(b)) during the 
portion of the calendar year preceding the adoption 
of the automatic IRA arrangement and the 2 pre-
ceding calendar years. 
‘‘(d) OTHER RULES.—For purposes of this section, 
the rules of section 45E(e) shall apply.’’. 
(b) CREDIT ALLOWED AS PART OF GENERAL BUSI-
NESS CREDIT.—Section 38(b) is amended by striking 
‘‘plus’’ at the end of paragraph (35), by striking the period 
at the end of paragraph (36) and inserting ‘‘, plus’’, and 
by adding at the end the following new paragraph: 
‘‘(37) in the case of an eligible employer (as de-
fined in section 45S(c)) maintaining an automatic 
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IRA arrangement meeting the requirements of sec-
tion 408B, the small employer automatic IRA ar-
rangement credit determined under section 45S(a).’’. 
(c) CLERICAL AMENDMENT.—The table of sections 
for subpart D of part IV of subchapter A of chapter 1 
is amended by adding at the end the following new item: 
‘‘Sec. 45S. Small employer automatic IRA arrangement.’’. 
(d) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2018. 
SEC. 4. STUDIES. 
(a) IN GENERAL.—The Secretary of the Treasury 
and the Secretary of Labor shall jointly conduct a separate 
study of the feasibility and desirability of each of the fol-
lowing: 
(1) Extending to automatic IRA arrangements 
spousal consent requirements similar to, or based 
on, those that apply under the Federal Employees’ 
Thrift Savings Plan, including consideration of 
whether modifications of such requirements are nec-
essary to apply them to automatic IRA arrange-
ments. 
(2) 
Establishing 
procedures 
under 
which 
amounts saved by employees in retirement bonds 
would be automatically transferred into alternative 
diversified investments provided by the private sector 
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when employees’ automatic IRA balances reach a 
certain dollar level as well as procedures facilitating 
employees’ ability to transfer into such private sector 
investments. 
(b) STUDY OF CONSOLIDATION OF INDIVIDUAL RE-
TIREMENT PLANS.—The Secretary of the Treasury and 
the Secretary of Labor shall jointly conduct a separate 
study of the feasibility and desirability of— 
(1) using data submitted on investments in in-
dividual retirement accounts and annuities to enable 
individuals with multiple such accounts and annu-
ities that include very small amounts to receive peri-
odic notices informing them about the location of 
these accounts and how such accounts and annuities 
might be consolidated, and 
(2) using investment arrangements associated 
with automatic IRAs to assist in addressing the 
problem of abandoned accounts. 
(c) REPORT.—Not later than 18 months after the 
date of the enactment of this Act, the Secretaries shall 
report the results of each study conducted under this sec-
tion, together with any recommendations for legislative 
changes, to the Committees on Finance and Health, Edu-
cation, Labor, and Pensions of the Senate and the Com-
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mittees on Ways and Means and Education and the Work-
force of the House of Representatives. 
SEC. 5. ELIMINATING BARRIERS TO USE OF MULTIPLE EM-
PLOYER PLANS. 
By December 31, 2018, the Secretaries of the Treas-
ury and Labor shall— 
(1) prescribe administrative guidance estab-
lishing conditions under which an employer partici-
pating in a plan described in section 413(c) of the 
Internal Revenue Code of 1986 shall not have any 
liability under title I of the Employee Retirement In-
come Security Act of 1974 with respect to the acts 
or omissions of one or more other participating em-
ployers, which regulations may require that the por-
tion of the plan attributable to such participating 
employers be spun off to plans maintained by such 
employers, 
(2) prescribe administrative guidance estab-
lishing conditions under which a plan described in 
section 413(c) of such Code may be treated as satis-
fying the qualification requirements of sections 
401(a) and 413(c) of such Code despite the violation 
of such requirements by one or more participating 
employers, including requiring, if appropriate, that 
the portion of the plan attributable to such partici-
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pating employers be spun off to plans maintained by 
such employers, and 
(3) prescribe administrative guidance providing 
simplified means by which plans described in section 
413(c) of such Code may satisfy the requirements of 
section 103 of the Employee Retirement Income Se-
curity Act of 1974. 
SEC. 6. INCREASE IN CREDIT LIMITATION FOR SMALL EM-
PLOYER PENSION PLAN STARTUP COSTS. 
(a) IN GENERAL.—Section 45E(b)(1) is amended to 
read as follows: 
‘‘(1) for the first credit year and each of the 2 
taxable years immediately following the first credit 
year, the greater of— 
‘‘(A) $500, or 
‘‘(B) the lesser of— 
‘‘(i) $250 for each employee of the eli-
gible employer who is not a highly com-
pensated employee (as defined in section 
415(q)) and who is eligible to participate 
in the eligible employer plan maintained by 
the eligible employer, or 
‘‘(ii) $5,000, and’’. 
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(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to taxable years beginning after 
December 31, 2017. 
Æ 
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