IIB 
115TH CONGRESS 
2D SESSION 
H. R. 6757 
IN THE SENATE OF THE UNITED STATES 
SEPTEMBER 28, 2018 
Received; read twice and referred to the Committee on Finance 
AN ACT 
To amend the Internal Revenue Code of 1986 to encourage 
retirement and family savings, and for other purposes. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
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SECTION 1. SHORT TITLE; ETC. 
(a) SHORT TITLE.—This Act may be cited as the 
‘‘Family Savings Act of 2018’’. 
(b) TABLE OF CONTENTS.—The table of contents for 
this Act is as follows: 
Sec. 1. Short title; etc. 
TITLE I—EXPANDING AND PRESERVING RETIREMENT SAVINGS 
Sec. 101. Multiple employer plans; pooled employer plans. 
Sec. 102. Rules relating to election of safe harbor 401(k) status. 
Sec. 103. Certain taxable non-tuition fellowship and stipend payments treated 
as compensation for IRA purposes. 
Sec. 104. Repeal of maximum age for traditional IRA contributions. 
Sec. 105. Qualified employer plans prohibited from making loans through credit 
cards and other similar arrangements. 
Sec. 106. Portability of lifetime income investments. 
Sec. 107. Treatment of custodial accounts on termination of section 403(b) 
plans. 
Sec. 108. Clarification of retirement income account rules relating to church- 
controlled organizations. 
Sec. 109. Exemption from required minimum distribution rules for individuals 
with certain account balances. 
Sec. 110. Clarification of treatment of certain retirement plan contributions 
picked up by governmental employers for new or existing em-
ployees. 
Sec. 111. Elective deferrals by members of the Ready Reserve of a reserve com-
ponent of the Armed Forces. 
TITLE II—ADMINISTRATIVE IMPROVEMENTS 
Sec. 201. Plan adopted by filing due date for year may be treated as in effect 
as of close of year. 
Sec. 202. Modification of nondiscrimination rules to protect older, longer serv-
ice participants. 
Sec. 203. Fiduciary safe harbor for selection of lifetime income provider. 
TITLE III—OTHER SAVINGS PROVISIONS 
Sec. 301. Universal Savings Accounts. 
Sec. 302. Expansion of section 529 plans. 
Sec. 303. Penalty-free withdrawals from retirement plans for individuals in case 
of birth of child or adoption. 
TITLE IV—BUDGETARY EFFECTS 
Sec. 401. Budgetary effects. 
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TITLE I—EXPANDING AND PRE-
SERVING RETIREMENT SAV-
INGS 
SEC. 101. MULTIPLE EMPLOYER PLANS; POOLED EM-
PLOYER PLANS. 
(a) QUALIFICATION REQUIREMENTS.— 
(1) IN GENERAL.—Section 413 of the Internal 
Revenue Code of 1986 is amended by adding at the 
end the following new subsection: 
‘‘(e) APPLICATION
OF QUALIFICATION REQUIRE-
MENTS FOR CERTAIN MULTIPLE EMPLOYER PLANS WITH 
POOLED PLAN PROVIDERS.— 
‘‘(1) IN GENERAL.—Except as provided in para-
graph (2), if a defined contribution plan to which 
subsection (c) applies— 
‘‘(A) is maintained by employers which 
have a common interest other than having 
adopted the plan, or 
‘‘(B) in the case of a plan not described in 
subparagraph (A), has a pooled plan provider, 
then the plan shall not be treated as failing to meet 
the requirements under this title applicable to a plan 
described in section 401(a) or to a plan that consists 
of individual retirement accounts described in sec-
tion 408 (including by reason of subsection (c) 
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thereof), whichever is applicable, merely because one 
or more employers of employees covered by the plan 
fail to take such actions as are required of such em-
ployers for the plan to meet such requirements. 
‘‘(2) LIMITATIONS.— 
‘‘(A) IN
GENERAL.—Paragraph (1) shall 
not apply to any plan unless the terms of the 
plan provide that in the case of any employer 
in the plan failing to take the actions described 
in paragraph (1)— 
‘‘(i) the assets of the plan attributable 
to employees of such employer (or bene-
ficiaries of such employees) will be trans-
ferred to a plan maintained only by such 
employer (or its successor), to an eligible 
retirement plan as defined in section 
402(c)(8)(B) for each individual whose ac-
count is transferred, or to any other ar-
rangement that the Secretary determines is 
appropriate, unless the Secretary deter-
mines it is in the best interests of the em-
ployees of such employer (and the bene-
ficiaries of such employees) to retain the 
assets in the plan, and 
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‘‘(A) IN GENERAL.—For purposes of this 
subsection, the term ‘pooled plan provider’ 
means, with respect to any plan, a person 
who— 
‘‘(i) is designated by the terms of the 
plan as a named fiduciary (within the 
meaning of section 402(a)(2) of the Em-
ployee Retirement Income Security Act of 
1974), as the plan administrator, and as 
the person responsible to perform all ad-
ministrative duties (including conducting 
proper testing with respect to the plan and 
the employees of each employer in the 
plan) which are reasonably necessary to 
ensure that— 
‘‘(I) the plan meets any require-
ment applicable under the Employee 
Retirement Income Security Act of 
1974 or this title to a plan described 
in section 401(a) or to a plan that 
consists of individual retirement ac-
counts described in section 408 (in-
cluding by reason of subsection (c) 
thereof), whichever is applicable, and 
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‘‘(II) each employer in the plan 
takes such actions as the Secretary or 
such person determines are necessary 
for the plan to meet the requirements 
described in subclause (I), including 
providing to such person any disclo-
sures or other information which the 
Secretary may require or which such 
person otherwise determines are nec-
essary to administer the plan or to 
allow the plan to meet such require-
ments, 
‘‘(ii) registers as a pooled plan pro-
vider with the Secretary, and provides such 
other information to the Secretary as the 
Secretary may require, before beginning 
operations as a pooled plan provider, 
‘‘(iii) acknowledges in writing that 
such person is a named fiduciary (within 
the meaning of section 402(a)(2) of the 
Employee Retirement Income Security Act 
of 1974), and the plan administrator, with 
respect to the plan, and 
‘‘(iv) is responsible for ensuring that 
all persons who handle assets of, or who 
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are fiduciaries of, the plan are bonded in 
accordance with section 412 of the Em-
ployee Retirement Income Security Act of 
1974. 
‘‘(B) AUDITS, EXAMINATIONS AND INVES-
TIGATIONS.—The Secretary may perform au-
dits, examinations, and investigations of pooled 
plan providers as may be necessary to enforce 
and carry out the purposes of this subsection. 
‘‘(C) AGGREGATION RULES.—For purposes 
of this paragraph, in determining whether a 
person meets the requirements of this para-
graph to be a pooled plan provider with respect 
to any plan, all persons who perform services 
for the plan and who are treated as a single 
employer under subsection (b), (c), (m), or (o) 
of section 414 shall be treated as one person. 
‘‘(D) TREATMENT OF EMPLOYERS AS PLAN 
SPONSORS.—Except with respect to the admin-
istrative duties of the pooled plan provider de-
scribed in subparagraph (A)(i), each employer 
in a plan which has a pooled plan provider shall 
be treated as the plan sponsor with respect to 
the portion of the plan attributable to employ-
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ees of such employer (or beneficiaries of such 
employees). 
‘‘(4) GUIDANCE.—The Secretary shall issue 
such guidance as the Secretary determines appro-
priate to carry out this subsection, including guid-
ance— 
‘‘(A) to identify the administrative duties 
and other actions required to be performed by 
a pooled plan provider under this subsection, 
‘‘(B) which describes the procedures to be 
taken to terminate a plan which fails to meet 
the requirements to be a plan described in para-
graph (1), including the proper treatment of, 
and actions needed to be taken by, any em-
ployer in the plan and the assets and liabilities 
of the plan attributable to employees of such 
employer (or beneficiaries of such employees), 
and 
‘‘(C) identifying appropriate cases to which 
the rules of paragraph (2)(A) will apply to em-
ployers in the plan failing to take the actions 
described in paragraph (1). 
The Secretary shall take into account under sub-
paragraph (C) whether the failure of an employer or 
pooled plan provider to provide any disclosures or 
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other information, or to take any other action, nec-
essary to administer a plan or to allow a plan to 
meet requirements applicable to the plan under sec-
tion 401(a) or 408, whichever is applicable, has con-
tinued over a period of time that demonstrates a 
lack of commitment to compliance. 
‘‘(5) MODEL PLAN.—The Secretary shall pub-
lish model plan language which meets the require-
ments of this subsection and of paragraphs (43) and 
(44) of section 3 of the Employee Retirement In-
come Security Act of 1974 and which may be adopt-
ed in order for a plan to be treated as a plan de-
scribed in paragraph (1)(B).’’. 
(2) 
CONFORMING
AMENDMENT.—Section 
413(c)(2) of such Code is amended by striking ‘‘sec-
tion 401(a)’’ and inserting ‘‘sections 401(a) and 
408(c)’’. 
(3) TECHNICAL AMENDMENT.—Section 408(c) 
of such Code is amended by inserting after para-
graph (2) the following new paragraph: 
‘‘(3) There is a separate accounting for any in-
terest of an employee or member (or spouse of an 
employee or member) in a Roth IRA.’’. 
(b) NO COMMON INTEREST REQUIRED FOR POOLED 
EMPLOYER PLANS.—Section 3(2) of the Employee Retire-
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ment Income Security Act of 1974 (29 U.S.C. 1002(2)) 
is amended by adding at the end the following: 
‘‘(C) A pooled employer plan shall be treat-
ed as— 
‘‘(i) a single employee pension benefit 
plan or single pension plan; and 
‘‘(ii) a plan to which section 210(a) 
applies.’’. 
(c) POOLED EMPLOYER PLAN AND PROVIDER DE-
FINED.— 
(1) IN GENERAL.—Section 3 of the Employee 
Retirement Income Security Act of 1974 (29 U.S.C. 
1002) is amended by adding at the end the fol-
lowing: 
‘‘(43) POOLED EMPLOYER PLAN.— 
‘‘(A) IN GENERAL.—The term ‘pooled em-
ployer plan’ means a plan— 
‘‘(i) which is an individual account 
plan established or maintained for the pur-
pose of providing benefits to the employees 
of 2 or more employers; 
‘‘(ii) which is a plan described in sec-
tion 401(a) of the Internal Revenue Code 
of 1986 which includes a trust exempt 
from tax under section 501(a) of such 
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Code or a plan that consists of individual 
retirement accounts described in section 
408 of such Code (including by reason of 
subsection (c) thereof); and 
‘‘(iii) the terms of which meet the re-
quirements of subparagraph (B). 
Such term shall not include a plan maintained 
by employers which have a common interest 
other than having adopted the plan. 
‘‘(B) REQUIREMENTS FOR PLAN TERMS.— 
The requirements of this subparagraph are met 
with respect to any plan if the terms of the 
plan— 
‘‘(i) designate a pooled plan provider 
and provide that the pooled plan provider 
is a named fiduciary of the plan; 
‘‘(ii) designate one or more trustees 
meeting 
the 
requirements 
of 
section 
408(a)(2) of the Internal Revenue Code of 
1986 (other than an employer in the plan) 
to be responsible for collecting contribu-
tions to, and holding the assets of, the 
plan and require such trustees to imple-
ment written contribution collection proce-
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dures that are reasonable, diligent, and 
systematic; 
‘‘(iii) provide that each employer in 
the plan retains fiduciary responsibility 
for— 
‘‘(I) the selection and monitoring 
in accordance with section 404(a) of 
the person designated as the pooled 
plan provider and any other person 
who, in addition to the pooled plan 
provider, is designated as a named fi-
duciary of the plan; and 
‘‘(II) to the extent not otherwise 
delegated to another fiduciary by the 
pooled plan provider and subject to 
the provisions of section 404(c), the 
investment and management of the 
portion of the plan’s assets attrib-
utable to the employees of the em-
ployer (or beneficiaries of such em-
ployees); 
‘‘(iv) provide that employers in the 
plan, and participants and beneficiaries, 
are not subject to unreasonable restric-
tions, fees, or penalties with regard to 
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ceasing participation, receipt of distribu-
tions, or otherwise transferring assets of 
the plan in accordance with section 208 or 
paragraph (44)(C)(i)(II); 
‘‘(v) require— 
‘‘(I) the pooled plan provider to 
provide to employers in the plan any 
disclosures or other information which 
the Secretary may require, including 
any disclosures or other information 
to facilitate the selection or any moni-
toring of the pooled plan provider by 
employers in the plan; and 
‘‘(II) each employer in the plan 
to take such actions as the Secretary 
or the pooled plan provider determines 
are necessary to administer the plan 
or for the plan to meet any require-
ment applicable under this Act or the 
Internal Revenue Code of 1986 to a 
plan described in section 401(a) of 
such Code or to a plan that consists 
of individual retirement accounts de-
scribed in section 408 of such Code 
(including by reason of subsection (c) 
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thereof), whichever is applicable, in-
cluding providing any disclosures or 
other information which the Secretary 
may require or which the pooled plan 
provider otherwise determines are nec-
essary to administer the plan or to 
allow the plan to meet such require-
ments; and 
‘‘(vi) provide that any disclosure or 
other information required to be provided 
under clause (v) may be provided in elec-
tronic form and will be designed to ensure 
only reasonable costs are imposed on 
pooled plan providers and employers in the 
plan. 
‘‘(C) EXCEPTIONS.—The term ‘pooled em-
ployer plan’ does not include— 
‘‘(i) a multiemployer plan; or 
‘‘(ii) a plan established before the 
date of the enactment of the Family Sav-
ings Act of 2018 unless the plan adminis-
trator elects that the plan will be treated 
as a pooled employer plan and the plan 
meets the requirements of this title appli-
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cable to a pooled employer plan established 
on or after such date. 
‘‘(D) TREATMENT OF EMPLOYERS AS PLAN 
SPONSORS.—Except with respect to the admin-
istrative duties of the pooled plan provider de-
scribed in paragraph (44)(A)(i), each employer 
in a pooled employer plan shall be treated as 
the plan sponsor with respect to the portion of 
the plan attributable to employees of such em-
ployer (or beneficiaries of such employees). 
‘‘(44) POOLED PLAN PROVIDER.— 
‘‘(A) IN GENERAL.—The term ‘pooled plan 
provider’ means a person who— 
‘‘(i) is designated by the terms of a 
pooled employer plan as a named fiduciary, 
as the plan administrator, and as the per-
son responsible for the performance of all 
administrative duties (including conducting 
proper testing with respect to the plan and 
the employees of each employer in the 
plan) which are reasonably necessary to 
ensure that— 
‘‘(I) the plan meets any require-
ment applicable under this Act or the 
Internal Revenue Code of 1986 to a 
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plan described in section 401(a) of 
such Code or to a plan that consists 
of individual retirement accounts de-
scribed in section 408 of such Code 
(including by reason of subsection (c) 
thereof), whichever is applicable; and 
‘‘(II) each employer in the plan 
takes such actions as the Secretary or 
pooled plan provider determines are 
necessary for the plan to meet the re-
quirements described in subclause (I), 
including providing the disclosures 
and information described in para-
graph (43)(B)(v)(II); 
‘‘(ii) registers as a pooled plan pro-
vider with the Secretary, and provides to 
the Secretary such other information as 
the Secretary may require, before begin-
ning operations as a pooled plan provider; 
‘‘(iii) acknowledges in writing that 
such person is a named fiduciary, and the 
plan administrator, with respect to the 
pooled employer plan; and 
‘‘(iv) is responsible for ensuring that 
all persons who handle assets of, or who 
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are fiduciaries of, the pooled employer plan 
are bonded in accordance with section 412. 
‘‘(B) AUDITS, EXAMINATIONS AND INVES-
TIGATIONS.—The Secretary may perform au-
dits, examinations, and investigations of pooled 
plan providers as may be necessary to enforce 
and carry out the purposes of this paragraph 
and paragraph (43). 
‘‘(C) GUIDANCE.—The Secretary shall 
issue such guidance as the Secretary determines 
appropriate to carry out this paragraph and 
paragraph (43), including guidance— 
‘‘(i) to identify the administrative du-
ties and other actions required to be per-
formed by a pooled plan provider under ei-
ther such paragraph; and 
‘‘(ii) which requires in appropriate 
cases that if an employer in the plan fails 
to take the actions required under sub-
paragraph (A)(i)(II)— 
‘‘(I) the assets of the plan attrib-
utable to employees of such employer 
(or beneficiaries of such employees) 
are transferred to a plan maintained 
only by such employer (or its suc-
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cessor), to an eligible retirement plan 
as defined in section 402(c)(8)(B) of 
the Internal Revenue Code of 1986 
for each individual whose account is 
transferred, or to any other arrange-
ment that the Secretary determines is 
appropriate in such guidance; and 
‘‘(II) such employer (and not the 
plan with respect to which the failure 
occurred or any other employer in 
such plan) shall, except to the extent 
provided in such guidance, be liable 
for any liabilities with respect to such 
plan attributable to employees of such 
employer (or beneficiaries of such em-
ployees). 
The Secretary shall take into account under 
clause (ii) whether the failure of an employer or 
pooled plan provider to provide any disclosures 
or other information, or to take any other ac-
tion, necessary to administer a plan or to allow 
a plan to meet requirements described in sub-
paragraph (A)(i)(II) has continued over a pe-
riod of time that demonstrates a lack of com-
mitment to compliance. The Secretary may 
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waive the requirements of subclause (ii)(I) in 
appropriate circumstances if the Secretary de-
termines it is in the best interests of the em-
ployees of the employer referred to in such 
clause (and the beneficiaries of such employees) 
to retain the assets in the plan with respect to 
which the employer’s failure occurred. 
‘‘(D) AGGREGATION RULES.—For purposes 
of this paragraph, in determining whether a 
person meets the requirements of this para-
graph to be a pooled plan provider with respect 
to any plan, all persons who perform services 
for the plan and who are treated as a single 
employer under subsection (b), (c), (m), or (o) 
of section 414 of the Internal Revenue Code of 
1986 shall be treated as one person.’’. 
(2) BONDING REQUIREMENTS FOR POOLED EM-
PLOYER PLANS.—The last sentence of section 412(a) 
of the Employee Retirement Income Security Act of 
1974 (29 U.S.C. 1112(a)) is amended by inserting 
‘‘or in the case of a pooled employer plan (as defined 
in section 3(43))’’ after ‘‘section 407(d)(1))’’. 
(3) CONFORMING
AND
TECHNICAL
AMEND-
MENTS.—Section 3 of the Employee Retirement In-
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come Security Act of 1974 (29 U.S.C. 1002) is 
amended— 
(A) in paragraph (16)(B)— 
(i) by striking ‘‘or’’ at the end of 
clause (ii); and 
(ii) by striking the period at the end 
and inserting ‘‘, or (iv) in the case of a 
pooled employer plan, the pooled plan pro-
vider.’’; and 
(B) by striking the second paragraph (41). 
(d) POOLED EMPLOYER AND MULTIPLE EMPLOYER 
PLAN REPORTING.— 
(1) ADDITIONAL
INFORMATION.—Section 103 
of the Employee Retirement Income Security Act of 
1974 (29 U.S.C. 1023) is amended— 
(A) in subsection (a)(1)(B), by striking 
‘‘applicable subsections (d), (e), and (f)’’ and 
inserting ‘‘applicable subsections (d), (e), (f), 
and (g)’’; and 
(B) by amending subsection (g) to read as 
follows: 
‘‘(g) ADDITIONAL INFORMATION WITH RESPECT TO 
POOLED
EMPLOYER
AND
MULTIPLE
EMPLOYER 
PLANS.—An annual report under this section for a plan 
year shall include— 
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‘‘(1) with respect to any plan to which section 
210(a) applies (including a pooled employer plan), a 
list of employers in the plan, a good faith estimate 
of the percentage of total contributions made by 
such employers during the plan year, and the aggre-
gate account balances attributable to each employer 
in the plan (determined as the sum of the account 
balances of the employees of such employer (and the 
beneficiaries of such employees)); and 
‘‘(2) with respect to a pooled employer plan, the 
identifying information for the person designated 
under the terms of the plan as the pooled plan pro-
vider.’’. 
(2) SIMPLIFIED
ANNUAL
REPORTS.—Section 
104(a) of the Employee Retirement Income Security 
Act of 1974 (29 U.S.C. 1024(a)) is amended by 
striking paragraph (2)(A) and inserting the fol-
lowing: 
‘‘(2)(A) With respect to annual reports required 
to be filed with the Secretary under this part, the 
Secretary may by regulation prescribe simplified an-
nual reports for any pension plan that— 
‘‘(i) covers fewer than 100 participants; or 
‘‘(ii) is a plan described in section 210(a) 
that covers fewer than 1,000 participants, but 
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only if no single employer in the plan has 100 
or more participants covered by the plan.’’. 
(e) EFFECTIVE DATE.— 
(1) IN GENERAL.—The amendments made by 
this section shall apply to plan years beginning after 
December 31, 2019. 
(2) RULE OF CONSTRUCTION.—Nothing in the 
amendments made by subsection (a) shall be con-
strued as limiting the authority of the Secretary of 
the Treasury or the Secretary’s delegate (determined 
without regard to such amendments) to provide for 
the proper treatment of a failure to meet any re-
quirement applicable under the Internal Revenue 
Code of 1986 with respect to one employer (and its 
employees) in a multiple employer plan. 
SEC. 102. RULES RELATING TO ELECTION OF SAFE HARBOR 
401(k) STATUS. 
(a) LIMITATION OF ANNUAL SAFE HARBOR NOTICE 
TO MATCHING CONTRIBUTION PLANS.— 
(1) IN GENERAL.—Section 401(k)(12)(A) of the 
Internal Revenue Code of 1986 is amended by strik-
ing ‘‘if such arrangement’’ and all that follows and 
inserting ‘‘if such arrangement— 
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‘‘(i) meets the contribution require-
ments of subparagraph (B) and the notice 
requirements of subparagraph (D), or 
‘‘(ii) meets the contribution require-
ments of subparagraph (C).’’. 
(2) 
AUTOMATIC
CONTRIBUTION
ARRANGE-
MENTS.—Section 401(k)(13)(B) of such Code is 
amended by striking ‘‘means’’ and all that follows 
and inserting ‘‘means a cash or deferred arrange-
ment— 
‘‘(i) which is described in subpara-
graph (D)(i)(I) and meets the applicable 
requirements 
of 
subparagraphs 
(C) 
through (E), or 
‘‘(ii) which is described in subpara-
graph (D)(i)(II) and meets the applicable 
requirements of subparagraphs (C) and 
(D).’’. 
(b) 
NONELECTIVE
CONTRIBUTIONS.—Section 
401(k)(12) of such Code is amended by redesignating sub-
paragraph (F) as subparagraph (G), and by inserting 
after subparagraph (E) the following new subparagraph: 
‘‘(F) TIMING OF PLAN AMENDMENT FOR 
EMPLOYER
MAKING
NONELECTIVE
CONTRIBU-
TIONS.— 
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‘‘(i) IN
GENERAL.—Except as pro-
vided in clause (ii), a plan may be amend-
ed after the beginning of a plan year to 
provide that the requirements of subpara-
graph (C) shall apply to the arrangement 
for the plan year, but only if the amend-
ment is adopted— 
‘‘(I) at any time before the 30th 
day before the close of the plan year, 
or 
‘‘(II) at any time before the last 
day under paragraph (8)(A) for dis-
tributing excess contributions for the 
plan year. 
‘‘(ii) EXCEPTION WHERE PLAN PRO-
VIDED FOR MATCHING CONTRIBUTIONS.— 
Clause (i) shall not apply to any plan year 
if the plan provided at any time during the 
plan year that the requirements of sub-
paragraph (B) or paragraph (13)(D)(i)(I) 
applied to the plan year. 
‘‘(iii) 4-PERCENT CONTRIBUTION RE-
QUIREMENT.—Clause 
(i)(II) 
shall 
not 
apply to an arrangement unless the 
amount of the contributions described in 
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subparagraph (C) which the employer is 
required to make under the arrangement 
for the plan year with respect to any em-
ployee is an amount equal to at least 4 
percent of the employee’s compensation.’’. 
(c) AUTOMATIC CONTRIBUTION ARRANGEMENTS.— 
Section 401(k)(13) of such Code is amended by adding 
at the end the following: 
‘‘(F) TIMING OF PLAN AMENDMENT FOR 
EMPLOYER
MAKING
NONELECTIVE
CONTRIBU-
TIONS.— 
‘‘(i) IN
GENERAL.—Except as pro-
vided in clause (ii), a plan may be amend-
ed after the beginning of a plan year to 
provide that the requirements of subpara-
graph (D)(i)(II) shall apply to the arrange-
ment for the plan year, but only if the 
amendment is adopted— 
‘‘(I) at any time before the 30th 
day before the close of the plan year, 
or 
‘‘(II) at any time before the last 
day under paragraph (8)(A) for dis-
tributing excess contributions for the 
plan year. 
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‘‘(ii) EXCEPTION WHERE PLAN PRO-
VIDED FOR MATCHING CONTRIBUTIONS.— 
Clause (i) shall not apply to any plan year 
if the plan provided at any time during the 
plan year that the requirements of sub-
paragraph (D)(i)(I) or paragraph (12)(B) 
applied to the plan year. 
‘‘(iii) 4-PERCENT CONTRIBUTION RE-
QUIREMENT.—Clause 
(i)(II) 
shall 
not 
apply to an arrangement unless the 
amount of the contributions described in 
subparagraph (D)(i)(II) which the em-
ployer is required to make under the ar-
rangement for the plan year with respect 
to any employee is an amount equal to at 
least 4 percent of the employee’s com-
pensation.’’. 
(d) EFFECTIVE DATE.—The amendments made by 
this section shall apply to plan years beginning after De-
cember 31, 2018. 
SEC. 103. CERTAIN TAXABLE NON-TUITION FELLOWSHIP 
AND STIPEND PAYMENTS TREATED AS COM-
PENSATION FOR IRA PURPOSES. 
(a) IN GENERAL.—Section 219(f)(1) of the Internal 
Revenue Code of 1986 is amended by adding at the end 
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the following: ‘‘The term ‘compensation’ shall include any 
amount included in gross income and paid to an individual 
to aid the individual in the pursuit of graduate or 
postdoctoral study.’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to taxable years beginning after 
December 31, 2018. 
SEC. 104. REPEAL OF MAXIMUM AGE FOR TRADITIONAL IRA 
CONTRIBUTIONS. 
(a) IN GENERAL.—Section 219(d) of the Internal 
Revenue Code of 1986 is amended by striking paragraph 
(1). 
(b) CONFORMING AMENDMENT.—Section 408A(c) of 
the Internal Revenue Code of 1986 is amended by striking 
paragraph (4) and by redesignating paragraphs (5), (6), 
and (7) as paragraphs (4), (5), and (6), respectively. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to contributions made for taxable 
years beginning after December 31, 2018. 
SEC. 105. QUALIFIED EMPLOYER PLANS PROHIBITED FROM 
MAKING LOANS THROUGH CREDIT CARDS 
AND OTHER SIMILAR ARRANGEMENTS. 
(a) IN GENERAL.—Section 72(p)(2) of the Internal 
Revenue Code of 1986 is amended by redesignating sub-
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paragraph (D) as subparagraph (E) and by inserting after 
subparagraph (C) the following new subparagraph: 
‘‘(D) PROHIBITION
OF
LOANS
THROUGH 
CREDIT CARDS AND OTHER SIMILAR ARRANGE-
MENTS.—Notwithstanding subparagraph (A), 
paragraph (1) shall apply to any loan which is 
made through the use of any credit card or any 
other similar arrangement.’’. 
(b) EFFECTIVE DATE.—The amendments made by 
subsection (a) shall apply to loans made after the date 
of the enactment of this Act. 
SEC. 106. PORTABILITY OF LIFETIME INCOME INVEST-
MENTS. 
(a) IN GENERAL.—Section 401(a) of the Internal 
Revenue Code of 1986 is amended by inserting after para-
graph (37) the following new paragraph: 
‘‘(38) PORTABILITY OF LIFETIME INCOME IN-
VESTMENTS.— 
‘‘(A) IN GENERAL.—Except as may be oth-
erwise provided by regulations, a trust forming 
part of a defined contribution plan shall not be 
treated as failing to constitute a qualified trust 
under this section solely by reason of allowing— 
‘‘(i) qualified distributions of a life-
time income investment, or 
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‘‘(ii) distributions of a lifetime income 
investment in the form of a qualified plan 
distribution annuity contract, 
on or after the date that is 90 days prior to the 
date on which such lifetime income investment 
is no longer authorized to be held as an invest-
ment option under the plan. 
‘‘(B) DEFINITIONS.—For purposes of this 
subsection— 
‘‘(i) the term ‘qualified distribution’ 
means a direct trustee-to-trustee transfer 
described in paragraph (31)(A) to an eligi-
ble retirement plan (as defined in section 
402(c)(8)(B)), 
‘‘(ii) the term ‘lifetime income invest-
ment’ means an investment option which is 
designed to provide an employee with elec-
tion rights— 
‘‘(I) which are not uniformly 
available with respect to other invest-
ment options under the plan, and 
‘‘(II) which are to a lifetime in-
come feature available through a con-
tract or other arrangement offered 
under the plan (or under another eli-
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gible retirement plan (as so defined), 
if paid by means of a direct trustee- 
to-trustee transfer described in para-
graph (31)(A) to such other eligible 
retirement plan), 
‘‘(iii) the term ‘lifetime income fea-
ture’ means— 
‘‘(I) a feature which guarantees a 
minimum level of income annually (or 
more frequently) for at least the re-
mainder of the life of the employee or 
the joint lives of the employee and the 
employee’s designated beneficiary, or 
‘‘(II) an annuity payable on be-
half of the employee under which pay-
ments are made in substantially equal 
periodic payments (not less frequently 
than annually) over the life of the em-
ployee or the joint lives of the em-
ployee and the employee’s designated 
beneficiary, and 
‘‘(iv) the term ‘qualified plan distribu-
tion annuity contract’ means an annuity 
contract purchased for a participant and 
distributed to the participant by a plan or 
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contract described in subparagraph (B) of 
section 
402(c)(8) 
(without 
regard 
to 
clauses (i) and (ii) thereof).’’. 
(b) CASH OR DEFERRED ARRANGEMENT.— 
(1) IN GENERAL.—Section 401(k)(2)(B)(i) of 
such Code is amended by striking ‘‘or’’ at the end 
of subclause (IV), by striking ‘‘and’’ at the end of 
subclause (V) and inserting ‘‘or’’, and by adding at 
the end the following new subclause: 
‘‘(VI) except as may be otherwise 
provided by regulations, with respect 
to amounts invested in a lifetime in-
come investment (as defined in sub-
section (a)(38)(B)(ii)), the date that 
is 90 days prior to the date that such 
lifetime income investment may no 
longer be held as an investment option 
under the arrangement, and’’. 
(2) 
DISTRIBUTION
REQUIREMENT.—Section 
401(k)(2)(B) of such Code, as amended by para-
graph (1), is amended by striking ‘‘and’’ at the end 
of clause (i), by striking the semicolon at the end of 
clause (ii) and inserting ‘‘, and’’, and by adding at 
the end the following new clause: 
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‘‘(iii) except as may be otherwise pro-
vided by regulations, in the case of 
amounts described in clause (i)(VI), will be 
distributed only in the form of a qualified 
distribution (as defined in subsection 
(a)(38)(B)(i)) or a qualified plan distribu-
tion annuity contract (as defined in sub-
section (a)(38)(B)(iv)),’’. 
(c) SECTION 403(b) PLANS.— 
(1) ANNUITY CONTRACTS.—Section 403(b)(11) 
of such Code is amended by striking ‘‘or’’ at the end 
of subparagraph (B), by striking the period at the 
end of subparagraph (C) and inserting ‘‘, or’’, and 
by inserting after subparagraph (C) the following 
new subparagraph: 
‘‘(D) except as may be otherwise provided 
by regulations, with respect to amounts invested 
in a lifetime income investment (as defined in 
section 401(a)(38)(B)(ii))— 
‘‘(i) on or after the date that is 90 
days prior to the date that such lifetime 
income investment may no longer be held 
as an investment option under the con-
tract, and 
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‘‘(ii) in the form of a qualified dis-
tribution 
(as 
defined 
in 
section 
401(a)(38)(B)(i)) or a qualified plan dis-
tribution annuity contract (as defined in 
section 401(a)(38)(B)(iv)).’’. 
(2) 
CUSTODIAL
ACCOUNTS.—Section 
403(b)(7)(A) of such Code is amended by striking 
‘‘if—’’ and all that follows and inserting ‘‘if the 
amounts are to be invested in regulated investment 
company stock to be held in that custodial account, 
and under the custodial account— 
‘‘(i) no such amounts may be paid or 
made available to any distributee (unless 
such amount is a distribution to which sec-
tion 72(t)(2)(G) applies) before— 
‘‘(I) the employee dies, 
‘‘(II) the employee attains age 
591⁄2, 
‘‘(III) the employee has a sever-
ance from employment, 
‘‘(IV) the employee becomes dis-
abled (within the meaning of section 
72(m)(7)), 
‘‘(V) in the case of contributions 
made pursuant to a salary reduction 
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agreement (within the meaning of sec-
tion 3121(a)(5)(D)), the employee en-
counters financial hardship, or 
‘‘(VI) except as may be otherwise 
provided by regulations, with respect 
to amounts invested in a lifetime in-
come investment (as defined in section 
401(a)(38)(B)(ii)), the date that is 90 
days prior to the date that such life-
time income investment may no longer 
be held as an investment option under 
the contract, and 
‘‘(ii) in the case of amounts described 
in clause (i)(VI), such amounts will be dis-
tributed only in the form of a qualified dis-
tribution 
(as 
defined 
in 
section 
401(a)(38)(B)(i)) or a qualified plan dis-
tribution annuity contract (as defined in 
section 401(a)(38)(B)(iv)).’’. 
(d) ELIGIBLE DEFERRED COMPENSATION PLANS.— 
(1) IN
GENERAL.—Section 457(d)(1)(A) of 
such Code is amended by striking ‘‘or’’ at the end 
of clause (ii), by inserting ‘‘or’’ at the end of clause 
(iii), and by adding after clause (iii) the following: 
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‘‘(iv) except as may be otherwise pro-
vided by regulations, in the case of a plan 
maintained by an employer described in 
subsection 
(e)(1)(A), 
with 
respect 
to 
amounts invested in a lifetime income in-
vestment 
(as 
defined 
in 
section 
401(a)(38)(B)(ii)), the date that is 90 
days prior to the date that such lifetime 
income investment may no longer be held 
as an investment option under the plan,’’. 
(2) 
DISTRIBUTION
REQUIREMENT.—Section 
457(d)(1) of such Code is amended by striking 
‘‘and’’ at the end of subparagraph (B), by striking 
the period at the end of subparagraph (C) and in-
serting ‘‘, and’’, and by inserting after subparagraph 
(C) the following new subparagraph: 
‘‘(D) except as may be otherwise provided 
by regulations, in the case of amounts described 
in subparagraph (A)(iv), such amounts will be 
distributed only in the form of a qualified dis-
tribution 
(as 
defined 
in 
section 
401(a)(38)(B)(i)) or a qualified plan distribu-
tion annuity contract (as defined in section 
401(a)(38)(B)(iv)).’’. 
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(e) EFFECTIVE DATE.—The amendments made by 
this section shall apply to plan years beginning after De-
cember 31, 2018. 
SEC. 107. TREATMENT OF CUSTODIAL ACCOUNTS ON TER-
MINATION OF SECTION 403(b) PLANS. 
(a) IN GENERAL.—Section 403(b)(7) of the Internal 
Revenue Code of 1986 is amended by adding at the end 
the following: 
‘‘(D) TREATMENT
OF
CUSTODIAL
AC-
COUNT UPON PLAN TERMINATION.— 
‘‘(i) IN GENERAL.—If— 
‘‘(I) an employer terminates the 
plan under which amounts are con-
tributed to a custodial account under 
subparagraph (A), and 
‘‘(II) the person holding the as-
sets of the account has demonstrated 
to the satisfaction of the Secretary 
under section 408(a)(2) that the per-
son is qualified to be a trustee of an 
individual retirement plan, 
then, as of the date of the termination, the 
custodial account shall be deemed to be an 
individual retirement plan for purposes of 
this title. 
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‘‘(ii) TREATMENT AS ROTH IRA.—Any 
custodial account treated as an individual 
retirement plan under clause (i) shall be 
treated as a Roth IRA only if the custodial 
account was a designated Roth account.’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to plan terminations occurring 
after December 31, 2018. 
SEC. 108. CLARIFICATION OF RETIREMENT INCOME AC-
COUNT RULES RELATING TO CHURCH-CON-
TROLLED ORGANIZATIONS. 
(a) IN GENERAL.—Section 403(b)(9)(B) of the Inter-
nal Revenue Code of 1986 is amended by inserting ‘‘(in-
cluding an employee described in section 414(e)(3)(B))’’ 
after ‘‘employee described in paragraph (1)’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to plan years beginning after De-
cember 31, 2008. 
SEC. 109. EXEMPTION FROM REQUIRED MINIMUM DIS-
TRIBUTION RULES FOR INDIVIDUALS WITH 
CERTAIN ACCOUNT BALANCES. 
(a) IN GENERAL.—Section 401(a)(9) of the Internal 
Revenue Code of 1986 is amended by adding at the end 
the following new subparagraph: 
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‘‘(H) EXCEPTION
FROM
REQUIRED
MIN-
IMUM
DISTRIBUTIONS
DURING
LIFE
OF
EM-
PLOYEE
WHERE
ASSETS
DO
NOT
EXCEED 
$50,000.— 
‘‘(i) IN GENERAL.—If on the last day 
of any calendar year the aggregate value of 
an employee’s entire interest under all ap-
plicable eligible retirement plans does not 
exceed $50,000, then the requirements of 
subparagraph (A) with respect to any dis-
tribution relating to such year shall not 
apply with respect to such employee. 
‘‘(ii) APPLICABLE ELIGIBLE RETIRE-
MENT PLAN.—For purposes of this sub-
paragraph, the term ‘applicable eligible re-
tirement plan’ means an eligible retirement 
plan (as defined in section 402(c)(8)(B)) 
other than a defined benefit plan. 
‘‘(iii) LIMIT ON REQUIRED MINIMUM 
DISTRIBUTION.—The required minimum 
distribution determined under subpara-
graph (A) for an employee under all appli-
cable eligible retirement plans shall not ex-
ceed an amount equal to the excess of— 
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‘‘(I) the aggregate value of an 
employee’s entire interest under such 
plans on the last day of the calendar 
year to which such distribution re-
lates, over 
‘‘(II) the dollar amount in effect 
under clause (i) for such calendar 
year. 
The Secretary in regulations or other guid-
ance may provide how such amount shall 
be distributed in the case of an individual 
with more than one applicable eligible re-
tirement plan. 
‘‘(iv) INFLATION
ADJUSTMENT.—In 
the case of any calendar year beginning 
after 2019, the $50,000 amount in clause 
(i) shall be increased by an amount equal 
to— 
‘‘(I) such dollar amount, multi-
plied by 
‘‘(II) the cost of living adjust-
ment determined under section 1(f)(3) 
for the calendar year, determined by 
substituting ‘calendar year 2018’ for 
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‘calendar year 2016’ in subparagraph 
(A)(ii) thereof. 
Any increase determined under this clause 
shall be rounded to the next lowest mul-
tiple of $5,000. 
‘‘(v) PLAN ADMINISTRATOR RELIANCE 
ON EMPLOYEE CERTIFICATION.—An appli-
cable eligible retirement plan described in 
clause (iii), (iv), (v), or (vi) of section 
402(c)(8)(B) shall not be treated as failing 
to meet the requirements of this paragraph 
in the case of any failure to make a re-
quired minimum distribution for a cal-
endar year if— 
‘‘(I) the aggregate value of an 
employee’s entire interest under all 
applicable eligible retirement plans of 
the employer on the last day of the 
calendar year to which such distribu-
tion relates does not exceed the dollar 
amount in effect for such year under 
clause (i), and 
‘‘(II) the employee certifies that 
the aggregate value of the employee’s 
entire interest under all applicable eli-
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gible retirement plans on the last day 
of the calendar year to which such 
distribution relates did not exceed the 
dollar amount in effect for such year 
under clause (i). 
‘‘(vi) AGGREGATION
RULE.—All em-
ployers treated as a single employer under 
subsection (b), (c), (m), or (o) of section 
414 shall be treated as a single employer 
for purposes of clause (v).’’. 
(b) PLAN
ADMINISTRATOR
REPORTING.—Section 
6047 of such Code is amended by redesignating subsection 
(h) as subsection (i) and by inserting after subsection (g) 
the following new subsection: 
‘‘(h) ACCOUNT BALANCE FOR PARTICIPANTS WHO 
HAVE ATTAINED AGE 69.— 
‘‘(1) IN GENERAL.—Not later than January 31 
of each year, the plan administrator (as defined in 
section 414(g)) of each applicable eligible retirement 
plan (as defined in section 401(a)(9)(H)) shall make 
a return to the Secretary with respect to each par-
ticipant of such plan who has attained age 69 as of 
the end of the preceding calendar year which 
states— 
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‘‘(A) the name and plan number of the 
plan, 
‘‘(B) the name and address of the plan ad-
ministrator, 
‘‘(C) the name, address, and taxpayer 
identification number of the participant, and 
‘‘(D) the account balance of such partici-
pant as of the end of the preceding calendar 
year. 
‘‘(2) STATEMENT
FURNISHED
TO
PARTICI-
PANT.—Every person required to make a return 
under paragraph (1) with respect to a participant 
shall furnish a copy of such return to such partici-
pant. 
‘‘(3) APPLICATION TO INDIVIDUAL RETIREMENT 
PLANS AND ANNUITIES.—In the case of an applica-
ble eligible retirement plan described in clause (i) or 
(ii) of section 402(c)(8)(B)— 
‘‘(A) any reference in this subsection to 
the plan administrator shall be treated as a ref-
erence to the trustee or issuer, as the case may 
be, and 
‘‘(B) any reference in this subsection to 
the participant shall be treated as a reference 
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to the individual for whom such account or an-
nuity is maintained.’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to distributions required to be 
made in calendar years beginning more than 120 days 
after the date of the enactment of this Act. 
SEC. 110. CLARIFICATION OF TREATMENT OF CERTAIN RE-
TIREMENT PLAN CONTRIBUTIONS PICKED UP 
BY GOVERNMENTAL EMPLOYERS FOR NEW 
OR EXISTING EMPLOYEES. 
(a) IN GENERAL.—Section 414(h)(2) of the Internal 
Revenue Code of 1986 is amended— 
(1) by striking ‘‘For purposes of paragraph 
(1)’’ and inserting the following: 
‘‘(A) IN GENERAL.—For purposes of para-
graph (1)’’, and 
(2) by adding at the end the following new sub-
paragraph: 
‘‘(B) TREATMENT
OF
ELECTIONS
BE-
TWEEN
ALTERNATIVE
BENEFIT
FORMULAS.— 
For purposes of subparagraph (A), a contribu-
tion shall not fail to be treated as picked up by 
an employing unit merely because the employee 
may make an irrevocable election between the 
application of two alternative benefit formulas 
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involving the same or different levels of em-
ployee contributions.’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to plan years beginning after the 
date of the enactment of this Act. 
SEC. 111. ELECTIVE DEFERRALS BY MEMBERS OF THE 
READY RESERVE OF A RESERVE COMPONENT 
OF THE ARMED FORCES. 
(a) IN GENERAL.—Section 402(g) of the Internal 
Revenue Code of 1986 is amended by adding at the end 
the following new paragraph: 
‘‘(9) ELECTIVE DEFERRALS BY MEMBERS OF 
READY RESERVE.— 
‘‘(A) IN GENERAL.—In the case of a quali-
fied ready reservist for any taxable year, the 
limitations of subparagraphs (A) and (C) of 
paragraph (1) shall be applied separately with 
respect to— 
‘‘(i) elective deferrals of such qualified 
ready reservist with respect to compensa-
tion described in subparagraph (B), and 
‘‘(ii) all other elective deferrals of 
such qualified ready reservist. 
‘‘(B) QUALIFIED READY RESERVIST.—For 
purposes of this paragraph, the term ‘qualified 
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ready reservist’ means any individual for any 
taxable year if such individual received com-
pensation for service as a member of the Ready 
Reserve of a reserve component (as defined in 
section 101 of title 37, United States Code) 
during such taxable year.’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to plan years beginning after De-
cember 31, 2018. 
TITLE II—ADMINISTRATIVE 
IMPROVEMENTS 
SEC. 201. PLAN ADOPTED BY FILING DUE DATE FOR YEAR 
MAY BE TREATED AS IN EFFECT AS OF CLOSE 
OF YEAR. 
(a) IN GENERAL.—Section 401(b) of the Internal 
Revenue Code of 1986 is amended— 
(1) by striking ‘‘RETROACTIVE CHANGES
IN 
PLAN.—A stock bonus’’ and inserting ‘‘PLAN 
AMENDMENTS.— 
‘‘(1) CERTAIN
RETROACTIVE
CHANGES
IN 
PLAN.—A stock bonus’’, and 
(2) by adding at the end the following new 
paragraph: 
‘‘(2) ADOPTION
OF
PLAN.—If an employer 
adopts a stock bonus, pension, profit-sharing, or an-
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nuity plan after the close of a taxable year but be-
fore the time prescribed by law for filing the employ-
er’s return of tax for the taxable year (including ex-
tensions thereof), the employer may elect to treat 
the plan as having been adopted as of the last day 
of the taxable year.’’. 
(b) EFFECTIVE DATE.—The amendments made by 
this section shall apply to plans adopted for taxable years 
beginning after December 31, 2018. 
SEC. 202. MODIFICATION OF NONDISCRIMINATION RULES 
TO PROTECT OLDER, LONGER SERVICE PAR-
TICIPANTS. 
(a) IN GENERAL.—Section 401 of the Internal Rev-
enue Code of 1986 is amended— 
(1) by redesignating subsection (o) as sub-
section (p), and 
(2) by inserting after subsection (n) the fol-
lowing new subsection: 
‘‘(o) 
SPECIAL
RULES
FOR
APPLYING
NON-
DISCRIMINATION RULES TO PROTECT OLDER, LONGER 
SERVICE AND GRANDFATHERED PARTICIPANTS.— 
‘‘(1) TESTING
OF
DEFINED
BENEFIT
PLANS 
WITH CLOSED CLASSES OF PARTICIPANTS.— 
‘‘(A) BENEFITS, RIGHTS, OR
FEATURES 
PROVIDED
TO
CLOSED
CLASSES.—A defined 
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benefit plan which provides benefits, rights, or 
features to a closed class of participants shall 
not fail to satisfy the requirements of sub-
section (a)(4) by reason of the composition of 
such closed class or the benefits, rights, or fea-
tures provided to such closed class, if— 
‘‘(i) for the plan year as of which the 
class closes and the 2 succeeding plan 
years, such benefits, rights, and features 
satisfy the requirements of subsection 
(a)(4) (without regard to this subpara-
graph but taking into account the rules of 
subparagraph (I)), 
‘‘(ii) after the date as of which the 
class was closed, any plan amendment 
which modifies the closed class or the ben-
efits, rights, and features provided to such 
closed class does not discriminate signifi-
cantly in favor of highly compensated em-
ployees, and 
‘‘(iii) the class was closed before April 
5, 2017, or the plan is described in sub-
paragraph (C). 
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‘‘(B) AGGREGATE TESTING WITH DEFINED 
CONTRIBUTION PLANS PERMITTED ON A BENE-
FITS BASIS.— 
‘‘(i) IN
GENERAL.—For purposes of 
determining compliance with subsection 
(a)(4) and section 410(b), a defined benefit 
plan described in clause (iii) may be aggre-
gated and tested on a benefits basis with 
1 or more defined contribution plans, in-
cluding with the portion of 1 or more de-
fined contribution plans which— 
‘‘(I) provides matching contribu-
tions 
(as 
defined 
in 
subsection 
(m)(4)(A)), 
‘‘(II) provides annuity contracts 
described in section 403(b) which are 
purchased with matching contribu-
tions or nonelective contributions, or 
‘‘(III) consists of an employee 
stock ownership plan (within the 
meaning of section 4975(e)(7)) or a 
tax credit employee stock ownership 
plan (within the meaning of section 
409(a)). 
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‘‘(ii) SPECIAL RULES FOR MATCHING 
CONTRIBUTIONS.—For purposes of clause 
(i), if a defined benefit plan is aggregated 
with a portion of a defined contribution 
plan providing matching contributions— 
‘‘(I) such defined benefit plan 
must also be aggregated with any por-
tion of such defined contribution plan 
which provides elective deferrals de-
scribed in subparagraph (A) or (C) of 
section 402(g)(3), and 
‘‘(II) such matching contribu-
tions shall be treated in the same 
manner as nonelective contributions, 
including for purposes of applying the 
rules of subsection (l). 
‘‘(iii) PLANS DESCRIBED.—A defined 
benefit plan is described in this clause if— 
‘‘(I) the plan provides benefits to 
a closed class of participants, 
‘‘(II) for the plan year as of 
which the class closes and the 2 suc-
ceeding plan years, the plan satisfies 
the requirements of section 410(b) 
and subsection (a)(4) (without regard 
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to this subparagraph but taking into 
account the rules of subparagraph 
(I)), 
‘‘(III) after the date as of which 
the class was closed, any plan amend-
ment which modifies the closed class 
or the benefits provided to such closed 
class does not discriminate signifi-
cantly in favor of highly compensated 
employees, and 
‘‘(IV) the class was closed before 
April 5, 2017, or the plan is described 
in subparagraph (C). 
‘‘(C) PLANS DESCRIBED.—A plan is de-
scribed in this subparagraph if, taking into ac-
count any predecessor plan— 
‘‘(i) such plan has been in effect for 
at least 5 years as of the date the class is 
closed, and 
‘‘(ii) during the 5-year period pre-
ceding the date the class is closed, there 
has not been a substantial increase in the 
coverage or value of the benefits, rights, or 
features described in subparagraph (A) or 
in the coverage or benefits under the plan 
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described in subparagraph (B)(iii) (which-
ever is applicable). 
‘‘(D) DETERMINATION
OF
SUBSTANTIAL 
INCREASE FOR BENEFITS, RIGHTS, AND FEA-
TURES.—In applying subparagraph (C)(ii) for 
purposes of subparagraph (A)(iii), a plan shall 
be treated as having had a substantial increase 
in coverage or value of the benefits, rights, or 
features described in subparagraph (A) during 
the applicable 5-year period only if, during such 
period— 
‘‘(i) the number of participants cov-
ered by such benefits, rights, or features 
on the date such period ends is more than 
50 percent greater than the number of 
such participants on the first day of the 
plan year in which such period began, or 
‘‘(ii) such benefits, rights, and fea-
tures have been modified by 1 or more 
plan amendments in such a way that, as of 
the date the class is closed, the value of 
such benefits, rights, and features to the 
closed class as a whole is substantially 
greater than the value as of the first day 
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of such 5-year period, solely as a result of 
such amendments. 
‘‘(E) DETERMINATION
OF
SUBSTANTIAL 
INCREASE FOR AGGREGATE TESTING ON BENE-
FITS BASIS.—In applying subparagraph (C)(ii) 
for purposes of subparagraph (B)(iii)(IV), a 
plan shall be treated as having had a substan-
tial increase in coverage or benefits during the 
applicable 5-year period only if, during such pe-
riod— 
‘‘(i) the number of participants bene-
fitting under the plan on the date such pe-
riod ends is more than 50 percent greater 
than the number of such participants on 
the first day of the plan year in which such 
period began, or 
‘‘(ii) the average benefit provided to 
such participants on the date such period 
ends is more than 50 percent greater than 
the average benefit provided on the first 
day of the plan year in which such period 
began. 
‘‘(F) 
CERTAIN
EMPLOYEES
DIS-
REGARDED.—For purposes of subparagraphs 
(D) and (E), any increase in coverage or value 
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or in coverage or benefits, whichever is applica-
ble, which is attributable to such coverage and 
value or coverage and benefits provided to em-
ployees— 
‘‘(i) who became participants as a re-
sult of a merger, acquisition, or similar 
event which occurred during the 7-year pe-
riod preceding the date the class is closed, 
or 
‘‘(ii) who became participants by rea-
son of a merger of the plan with another 
plan which had been in effect for at least 
5 years as of the date of the merger, 
shall be disregarded, except that clause (ii) 
shall apply for purposes of subparagraph (D) 
only if, under the merger, the benefits, rights, 
or features under 1 plan are conformed to the 
benefits, rights, or features of the other plan 
prospectively. 
‘‘(G) RULES RELATING TO AVERAGE BEN-
EFIT.—For purposes of subparagraph (E)— 
‘‘(i) the average benefit provided to 
participants under the plan will be treated 
as having remained the same between the 
2 dates described in subparagraph (E)(ii) 
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if the benefit formula applicable to such 
participants has not changed between such 
dates, and 
‘‘(ii) if the benefit formula applicable 
to 1 or more participants under the plan 
has changed between such 2 dates, then 
the average benefit under the plan shall be 
considered to have increased by more than 
50 percent only if— 
‘‘(I) the total amount determined 
under section 430(b)(1)(A)(i) for all 
participants benefitting under the 
plan for the plan year in which the 5- 
year period described in subparagraph 
(E) ends, exceeds 
‘‘(II) the total amount deter-
mined under section 430(b)(1)(A)(i) 
for all such participants for such plan 
year, by using the benefit formula in 
effect for each such participant for 
the first plan year in such 5-year pe-
riod, by more than 50 percent. 
In the case of a CSEC plan (as defined in 
section 414(y)), the normal cost of the 
plan 
(as 
determined 
under 
section 
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433(j)(1)(B)) shall be used in lieu of the 
amount 
determined 
under 
section 
430(b)(1)(A)(i). 
‘‘(H) TREATMENT AS SINGLE PLAN.—For 
purposes of subparagraphs (E) and (G), a plan 
described in section 413(c) shall be treated as 
a single plan rather than as separate plans 
maintained by each employer in the plan. 
‘‘(I) SPECIAL
RULES.—For purposes of 
subparagraphs (A)(i) and (B)(iii)(II), the fol-
lowing rules shall apply: 
‘‘(i) In applying section 410(b)(6)(C), 
the closing of the class of participants shall 
not be treated as a significant change in 
coverage under section 410(b)(6)(C)(i)(II). 
‘‘(ii) 2 or more plans shall not fail to 
be eligible to be aggregated and treated as 
a single plan solely by reason of having dif-
ferent plan years. 
‘‘(iii) Changes in the employee popu-
lation shall be disregarded to the extent at-
tributable to individuals who become em-
ployees or cease to be employees, after the 
date the class is closed, by reason of a 
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merger, acquisition, divestiture, or similar 
event. 
‘‘(iv) Aggregation and all other testing 
methodologies otherwise applicable under 
subsection (a)(4) and section 410(b) may 
be taken into account. 
The rule of clause (ii) shall also apply for pur-
poses of determining whether plans to which 
subparagraph (B)(i) applies may be aggregated 
and treated as 1 plan for purposes of deter-
mining whether such plans meet the require-
ments of subsection (a)(4) and section 410(b). 
‘‘(J) SPUN-OFF PLANS.—For purposes of 
this paragraph, if a portion of a defined benefit 
plan described in subparagraph (A) or (B)(iii) 
is spun off to another employer and the spun- 
off plan continues to satisfy the requirements 
of— 
‘‘(i) 
subparagraph 
(A)(i) 
or 
(B)(iii)(II), whichever is applicable, if the 
original plan was still within the 3-year pe-
riod described in such subparagraph at the 
time of the spin off, and 
‘‘(ii) 
subparagraph 
(A)(ii) 
or 
(B)(iii)(III), whichever is applicable, 
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the treatment under subparagraph (A) or (B) 
of the spun-off plan shall continue with respect 
to such other employer. 
‘‘(2) TESTING
OF
DEFINED
CONTRIBUTION 
PLANS.— 
‘‘(A) TESTING ON A BENEFITS BASIS.—A 
defined contribution plan shall be permitted to 
be tested on a benefits basis if— 
‘‘(i) such defined contribution plan 
provides make-whole contributions to a 
closed class of participants whose accruals 
under a defined benefit plan have been re-
duced or eliminated, 
‘‘(ii) for the plan year of the defined 
contribution plan as of which the class eli-
gible to receive such make-whole contribu-
tions closes and the 2 succeeding plan 
years, such closed class of participants sat-
isfies 
the 
requirements 
of 
section 
410(b)(2)(A)(i) (determined by applying 
the rules of paragraph (1)(I)), 
‘‘(iii) after the date as of which the 
class was closed, any plan amendment to 
the defined contribution plan which modi-
fies the closed class or the allocations, ben-
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efits, rights, and features provided to such 
closed class does not discriminate signifi-
cantly in favor of highly compensated em-
ployees, and 
‘‘(iv) the class was closed before April 
5, 2017, or the defined benefit plan under 
clause (i) is described in paragraph (1)(C) 
(as applied for purposes of paragraph 
(1)(B)(iii)(IV)). 
‘‘(B) AGGREGATION WITH PLANS INCLUD-
ING MATCHING CONTRIBUTIONS.— 
‘‘(i) IN GENERAL.—With respect to 1 
or more defined contribution plans de-
scribed in subparagraph (A), for purposes 
of determining compliance with subsection 
(a)(4) and section 410(b), the portion of 
such plans which provides make-whole con-
tributions or other nonelective contribu-
tions may be aggregated and tested on a 
benefits basis with the portion of 1 or 
more other defined contribution plans 
which— 
‘‘(I) provides matching contribu-
tions 
(as 
defined 
in 
subsection 
(m)(4)(A)), 
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‘‘(II) provides annuity contracts 
described in section 403(b) which are 
purchased with matching contribu-
tions or nonelective contributions, or 
‘‘(III) consists of an employee 
stock ownership plan (within the 
meaning of section 4975(e)(7)) or a 
tax credit employee stock ownership 
plan (within the meaning of section 
409(a)). 
‘‘(ii) SPECIAL RULES FOR MATCHING 
CONTRIBUTIONS.—Rules similar to the 
rules of paragraph (1)(B)(ii) shall apply 
for purposes of clause (i). 
‘‘(C) SPECIAL
RULES
FOR
TESTING
DE-
FINED
CONTRIBUTION
PLAN
FEATURES
PRO-
VIDING MATCHING CONTRIBUTIONS TO CERTAIN 
OLDER, LONGER
SERVICE
PARTICIPANTS.—In 
the case of a defined contribution plan which 
provides benefits, rights, or features to a closed 
class of participants whose accruals under a de-
fined benefit plan have been reduced or elimi-
nated, the plan shall not fail to satisfy the re-
quirements of subsection (a)(4) solely by reason 
of the composition of the closed class or the 
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benefits, rights, or features provided to such 
closed class if the defined contribution plan and 
defined benefit plan otherwise meet the require-
ments of subparagraph (A) but for the fact that 
the make-whole contributions under the defined 
contribution plan are made in whole or in part 
through matching contributions. 
‘‘(D) SPUN-OFF PLANS.—For purposes of 
this paragraph, if a portion of a defined con-
tribution plan described in subparagraph (A) or 
(C) is spun off to another employer, the treat-
ment under subparagraph (A) or (C) of the 
spun-off plan shall continue with respect to the 
other employer if such plan continues to comply 
with the requirements of clauses (ii) (if the 
original plan was still within the 3-year period 
described in such clause at the time of the spin 
off) and (iii) of subparagraph (A), as deter-
mined for purposes of subparagraph (A) or (C), 
whichever is applicable. 
‘‘(3) DEFINITIONS.—For purposes of this sub-
section— 
‘‘(A) MAKE-WHOLE CONTRIBUTIONS.—Ex-
cept as otherwise provided in paragraph (2)(C), 
the term ‘make-whole contributions’ means non-
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elective allocations for each employee in the 
class which are reasonably calculated, in a con-
sistent manner, to replace some or all of the re-
tirement benefits which the employee would 
have received under the defined benefit plan 
and any other plan or qualified cash or deferred 
arrangement under subsection (k)(2) if no 
change had been made to such defined benefit 
plan and such other plan or arrangement. For 
purposes of the preceding sentence, consistency 
shall not be required with respect to employees 
who were subject to different benefit formulas 
under the defined benefit plan. 
‘‘(B) REFERENCES TO CLOSED CLASS OF 
PARTICIPANTS.—References to a closed class of 
participants and similar references to a closed 
class shall include arrangements under which 1 
or more classes of participants are closed, ex-
cept that 1 or more classes of participants 
closed on different dates shall not be aggre-
gated for purposes of determining the date any 
such class was closed. 
‘‘(C) HIGHLY COMPENSATED EMPLOYEE.— 
The term ‘highly compensated employee’ has 
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the meaning given such term in section 
414(q).’’. 
(b) 
PARTICIPATION
REQUIREMENTS.—Section 
401(a)(26) of such Code is amended by adding at the end 
the following new subparagraph: 
‘‘(I) PROTECTED PARTICIPANTS.— 
‘‘(i) IN
GENERAL.—A plan shall be 
deemed to satisfy the requirements of sub-
paragraph (A) if— 
‘‘(I) the plan is amended— 
‘‘(aa) to cease all benefit ac-
cruals, or 
‘‘(bb) to provide future ben-
efit accruals only to a closed 
class of participants, 
‘‘(II) the plan satisfies subpara-
graph (A) (without regard to this sub-
paragraph) as of the effective date of 
the amendment, and 
‘‘(III) the amendment was adopt-
ed before April 5, 2017, or the plan is 
described in clause (ii). 
‘‘(ii) PLANS DESCRIBED.—A plan is 
described in this clause if the plan would 
be described in subsection (o)(1)(C), as ap-
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plied 
for 
purposes 
of 
subsection 
(o)(1)(B)(iii)(IV) and by treating the effec-
tive date of the amendment as the date the 
class was closed for purposes of subsection 
(o)(1)(C). 
‘‘(iii) SPECIAL RULES.—For purposes 
of clause (i)(II), in applying section 
410(b)(6)(C), the amendments described in 
clause (i) shall not be treated as a signifi-
cant change in coverage under section 
410(b)(6)(C)(i)(II). 
‘‘(iv) SPUN-OFF
PLANS.—For pur-
poses of this subparagraph, if a portion of 
a plan described in clause (i) is spun off to 
another employer, the treatment under 
clause (i) of the spun-off plan shall con-
tinue with respect to the other employer.’’. 
(c) EFFECTIVE DATE.— 
(1) IN GENERAL.—Except as provided in para-
graph (2), the amendments made by this section 
shall take effect on the date of the enactment of this 
Act, without regard to whether any plan modifica-
tions referred to in such amendments are adopted or 
effective before, on, or after such date of enactment. 
(2) SPECIAL RULES.— 
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(A) ELECTION
OF
EARLIER
APPLICA-
TION.—At the election of the plan sponsor, the 
amendments made by this section shall apply to 
plan years beginning after December 31, 2013. 
(B) CLOSED CLASSES OF PARTICIPANTS.— 
For 
purposes 
of 
paragraphs 
(1)(A)(iii), 
(1)(B)(iii)(IV), and (2)(A)(iv) of section 401(o) 
of the Internal Revenue Code of 1986 (as added 
by this section), a closed class of participants 
shall be treated as being closed before April 5, 
2017, if the plan sponsor’s intention to create 
such closed class is reflected in formal written 
documents and communicated to participants 
before such date. 
(C) 
CERTAIN
POST-ENACTMENT
PLAN 
AMENDMENTS.—A plan shall not be treated as 
failing to be eligible for the application of sec-
tion 
401(o)(1)(A), 
401(o)(1)(B)(iii), 
or 
401(a)(26) of such Code (as added by this sec-
tion) to such plan solely because in the case 
of— 
(i) such section 401(o)(1)(A), the plan 
was amended before the date of the enact-
ment of this Act to eliminate 1 or more 
benefits, rights, or features, and is further 
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amended after such date of enactment to 
provide such previously eliminated benefits, 
rights, or features to a closed class of par-
ticipants, or 
(ii) such section 401(o)(1)(B)(iii) or 
section 401(a)(26), the plan was amended 
before the date of the enactment of this 
Act to cease all benefit accruals, and is 
further amended after such date of enact-
ment to provide benefit accruals to a closed 
class of participants. Any such section 
shall only apply if the plan otherwise meets 
the requirements of such section and in ap-
plying such section, the date the class of 
participants is closed shall be the effective 
date of the later amendment. 
SEC. 203. FIDUCIARY SAFE HARBOR FOR SELECTION OF 
LIFETIME INCOME PROVIDER. 
Section 404 of the Employee Retirement Income Se-
curity Act of 1974 (29 U.S.C. 1104) is amended by adding 
at the end the following: 
‘‘(e) SAFE HARBOR FOR ANNUITY SELECTION.— 
‘‘(1) IN GENERAL.—With respect to the selec-
tion of an insurer for a guaranteed retirement in-
come contract, the requirements of subsection 
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(a)(1)(B) will be deemed to be satisfied if a fidu-
ciary— 
‘‘(A) engages in an objective, thorough, 
and analytical search for the purpose of identi-
fying insurers from which to purchase such con-
tracts; 
‘‘(B) with respect to each insurer identified 
under subparagraph (A)— 
‘‘(i) considers the financial capability 
of such insurer to satisfy its obligations 
under the guaranteed retirement income 
contract; and 
‘‘(ii) considers the cost (including fees 
and commissions) of the guaranteed retire-
ment income contract offered by the in-
surer in relation to the benefits and prod-
uct features of the contract and adminis-
trative services to be provided under such 
contract; and 
‘‘(C) on the basis of such consideration, 
concludes that— 
‘‘(i) at the time of the selection, the 
insurer is financially capable of satisfying 
its obligations under the guaranteed retire-
ment income contract; and 
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‘‘(ii) the relative cost of the selected 
guaranteed retirement income contract as 
described in subparagraph (B)(ii) is rea-
sonable. 
‘‘(2) FINANCIAL
CAPABILITY
OF
THE
IN-
SURER.—A fiduciary will be deemed to satisfy the 
requirements of paragraphs (1)(B)(i) and (1)(C)(i) 
if— 
‘‘(A) the fiduciary obtains written rep-
resentations from the insurer that— 
‘‘(i) the insurer is licensed to offer 
guaranteed retirement income contracts; 
‘‘(ii) the insurer, at the time of selec-
tion and for each of the immediately pre-
ceding 7 plan years— 
‘‘(I) operates under a certificate 
of authority from the insurance com-
missioner of its domiciliary State 
which has not been revoked or sus-
pended; 
‘‘(II) has filed audited financial 
statements in accordance with the 
laws of its domiciliary State under ap-
plicable statutory accounting prin-
ciples; 
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‘‘(III) maintains (and has main-
tained) reserves which satisfies all the 
statutory requirements of all States 
where the insurer does business; and 
‘‘(IV) is not operating under an 
order of supervision, rehabilitation, or 
liquidation; 
‘‘(iii) the insurer undergoes, at least 
every 5 years, a financial examination 
(within the meaning of the law of its domi-
ciliary State) by the insurance commis-
sioner of the domiciliary State (or rep-
resentative, designee, or other party ap-
proved by such commissioner); and 
‘‘(iv) the insurer will notify the fidu-
ciary of any change in circumstances oc-
curring after the provision of the represen-
tations in clauses (i), (ii), and (iii) which 
would preclude the insurer from making 
such representations at the time of 
issuance of the guaranteed retirement in-
come contract; and 
‘‘(B) after receiving such representations 
and as of the time of selection, the fiduciary 
has not received any notice described in sub-
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paragraph (A)(iv) and is in possession of no 
other information which would cause the fidu-
ciary to question the representations provided. 
‘‘(3) NO
REQUIREMENT
TO
SELECT
LOWEST 
COST.—Nothing in this subsection shall be construed 
to require a fiduciary to select the lowest cost con-
tract. A fiduciary may consider the value of a con-
tract, including features and benefits of the contract 
and attributes of the insurer (including, without lim-
itation, the insurer’s financial strength) in conjunc-
tion with the cost of the contract. 
‘‘(4) TIME OF SELECTION.— 
‘‘(A) IN GENERAL.—For purposes of this 
subsection, the time of selection is— 
‘‘(i) the time that the insurer and the 
contract are selected for distribution of 
benefits to a specific participant or bene-
ficiary; or 
‘‘(ii) if the fiduciary periodically re-
views the continuing appropriateness of the 
conclusion described in paragraph (1)(C) 
with respect to a selected insurer, taking 
into account the considerations described 
in such paragraph, the time that the in-
surer and the contract are selected to pro-
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vide benefits at future dates to participants 
or beneficiaries under the plan. 
Nothing in the preceding sentence shall be con-
strued to require the fiduciary to review the ap-
propriateness of a selection after the purchase 
of a contract for a participant or beneficiary. 
‘‘(B) PERIODIC REVIEW.—A fiduciary will 
be deemed to have conducted the periodic re-
view described in subparagraph (A)(ii) if the fi-
duciary obtains the written representations de-
scribed in clauses (i), (ii), and (iii) of paragraph 
(2)(A) from the insurer on an annual basis, un-
less the fiduciary receives any notice described 
in paragraph (2)(A)(iv) or otherwise becomes 
aware of facts that would cause the fiduciary to 
question such representations. 
‘‘(5) LIMITED
LIABILITY.—A fiduciary which 
satisfies the requirements of this subsection shall not 
be liable following the distribution of any benefit, or 
the investment by or on behalf of a participant or 
beneficiary pursuant to the selected guaranteed re-
tirement income contract, for any losses that may 
result to the participant or beneficiary due to an in-
surer’s inability to satisfy its financial obligations 
under the terms of such contract. 
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‘‘(6) DEFINITIONS.—For purposes of this sub-
section— 
‘‘(A) INSURER.—The term ‘insurer’ means 
an insurance company, insurance service, or in-
surance organization, including affiliates of 
such companies. 
‘‘(B) GUARANTEED RETIREMENT INCOME 
CONTRACT.—The term ‘guaranteed retirement 
income contract’ means an annuity contract for 
a fixed term or a contract (or provision or fea-
ture thereof) which provides guaranteed bene-
fits annually (or more frequently) for at least 
the remainder of the life of the participant or 
the joint lives of the participant and the partici-
pant’s designated beneficiary as part of an indi-
vidual account plan.’’. 
TITLE III—OTHER SAVINGS 
PROVISIONS 
SEC. 301. UNIVERSAL SAVINGS ACCOUNTS. 
(a) IN GENERAL.—Subchapter F of chapter 1 of the 
Internal Revenue Code of 1986 is amended by adding at 
the end the following new part: 
‘‘PART IX—UNIVERSAL SAVINGS ACCOUNTS 
‘‘Sec. 530U. Universal Savings Accounts. 
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‘‘SEC. 530U. UNIVERSAL SAVINGS ACCOUNTS. 
‘‘(a) GENERAL RULE.—A Universal Savings Account 
shall be exempt from taxation under this subtitle. Not-
withstanding the preceding sentence, such account shall 
be subject to the taxes imposed by section 511 (relating 
to imposition of tax on unrelated business income of chari-
table organizations). 
‘‘(b) UNIVERSAL SAVINGS ACCOUNT.—For purposes 
of this section, the term ‘Universal Savings Account’ 
means a trust created or organized in the United States 
by an individual for the exclusive benefit of such individual 
and which is designated (in such manner as the Secretary 
may prescribe) at the time of the establishment of the 
trust as a Universal Savings Account, but only if the writ-
ten governing instrument creating the trust meets the fol-
lowing requirements: 
‘‘(1) Except in the case of a qualified rollover 
contribution described in subsection (d)— 
‘‘(A) no contribution will be accepted un-
less it is in cash, and 
‘‘(B) contributions will not be accepted for 
the taxable year in excess of the contribution 
limit specified in subsection (c)(2). 
‘‘(2) No distribution will be made unless it is— 
‘‘(A) cash, or 
‘‘(B) property that— 
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‘‘(i) has a readily ascertainable fair 
market value, and 
‘‘(ii) is identified by the Secretary in 
regulations or other guidance as property 
to which this subparagraph applies. 
‘‘(3) The trustee is a bank (as defined in sec-
tion 408(n)) or another person who demonstrates to 
the satisfaction of the Secretary that the manner in 
which that person will administer the trust will be 
consistent with the requirements of this section. 
‘‘(4) No part of the trust assets will be invested 
in life insurance contracts or collectibles (as defined 
in section 408(m)). 
‘‘(5) The interest of an individual in the bal-
ance of his account is nonforfeitable. 
‘‘(6) The assets of the trust shall not be com-
mingled with other property except in a common 
trust fund or common investment fund. 
‘‘(c) TREATMENT
OF DISTRIBUTIONS
AND CON-
TRIBUTIONS.— 
‘‘(1) DISTRIBUTIONS.— 
‘‘(A) IN GENERAL.—Except as provided in 
subparagraph (B), any distribution from a Uni-
versal Savings Account shall not be includible in 
gross income. 
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‘‘(B) NET INCOME ATTRIBUTABLE TO EX-
CESS CONTRIBUTIONS.—Any distribution of net 
income described in section 4973(i)(2) shall be 
includible in the gross income of the account 
holder in the taxable year in which the con-
tribution to which such net income relates was 
made. 
‘‘(2) CONTRIBUTION LIMIT.— 
‘‘(A) 
IN
GENERAL.—The 
aggregate 
amount of contributions (other than qualified 
rollover contributions described in subsection 
(d)) for any taxable year to all Universal Sav-
ings Accounts maintained for the benefit of an 
individual shall not exceed the lesser of— 
‘‘(i) $2,500, or 
‘‘(ii) an amount equal to the com-
pensation (within the meaning of section 
219) includible in such individual’s gross 
income for such taxable year. 
‘‘(B) NO
CONTRIBUTIONS
FOR
DEPEND-
ENTS.—In the case of an individual who is a 
dependent of another taxpayer for a taxable 
year beginning in the calendar year in which 
such individual’s taxable year begins, the dollar 
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amount under subparagraph (A) for such indi-
vidual’s taxable year shall be zero. 
‘‘(C) SPECIAL RULE IN CASE OF JOINT RE-
TURN.— 
‘‘(i) IN GENERAL.—In the case of an 
individual to whom this clause applies, the 
amount determined under subparagraph 
(A)(ii) with respect to such individual for 
the taxable year shall not be less than an 
amount equal to the sum of— 
‘‘(I) the compensation of such in-
dividual includible in gross income for 
the taxable year, plus 
‘‘(II) the compensation of such 
individual’s spouse includible in gross 
income for the taxable year reduced 
(but not below zero) by the amount 
contributed for the taxable year to all 
Universal Savings Accounts main-
tained for the benefit of such spouse. 
‘‘(ii) INDIVIDUAL TO WHOM CLAUSE 
(i) APPLIES.—Clause (i) shall apply to any 
individual— 
‘‘(I) who files a joint return for 
the taxable year, and 
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‘‘(II) whose compensation includ-
ible in gross income for the taxable 
year is less than the compensation of 
such individual’s spouse includible in 
gross income for the taxable year. 
‘‘(D) COST-OF-LIVING
ADJUSTMENT.—In 
the case of any taxable year beginning in a cal-
endar year after 2019, the $2,500 amount 
under subparagraph (A)(i) shall be increased by 
an amount equal to— 
‘‘(i) such dollar amount, multiplied by 
‘‘(ii) the cost-of-living adjustment de-
termined under section 1(f)(3) for the cal-
endar year, determined by substituting 
‘calendar year 2018’ for ‘calendar year 
2016’ in subparagraph (A)(ii) thereof. 
If any amount after adjustment under the pre-
ceding sentence is not a multiple of $100, such 
amount shall be rounded to the next lower mul-
tiple of $100. 
‘‘(d) QUALIFIED ROLLOVER CONTRIBUTION.—For 
purposes of this section, the term ‘qualified rollover con-
tribution’ means a contribution to a Universal Savings Ac-
count from another such account of the same individual, 
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but only if such amount is contributed not later than the 
60th day after the distribution from such other account. 
‘‘(e) TREATMENT
OF ACCOUNT UPON DEATH.— 
Upon death of any account holder of a Universal Savings 
Account— 
‘‘(1) SPOUSE.—In the case of the account hold-
er’s surviving spouse acquiring such account holder’s 
interest in such account by reason of the death of 
the account holder, such account shall be treated as 
if the spouse were the account holder. 
‘‘(2) OTHER CASES.—In any other case— 
‘‘(A) all amounts in such account shall be 
treated as distributed on the date of such indi-
vidual’s death, and 
‘‘(B) such account shall cease to be treated 
as a Universal Savings Account. 
‘‘(f) OTHER SPECIAL RULES.— 
‘‘(1) COMMUNITY PROPERTY LAWS.—This sec-
tion shall be applied without regard to any commu-
nity property laws. 
‘‘(2) LOSS OF TAXATION EXEMPTION OF AC-
COUNT
WHERE
INDIVIDUAL
ENGAGES
IN
PROHIB-
ITED TRANSACTION; EFFECT OF PLEDGING ACCOUNT 
AS SECURITY.—Rules similar to the rules of para-
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graphs (2) and (4) of section 408(e) shall apply to 
any Universal Savings Account. 
‘‘(g) REPORTS.—The trustee of a Universal Savings 
Account shall make such reports regarding such account 
to the Secretary and to the account holder with respect 
to contributions, distributions, and such other matters as 
the Secretary may require. Such reports shall be— 
‘‘(1) filed at such time and in such manner as 
the Secretary provides, and 
‘‘(2) furnished to account holders— 
‘‘(A) not later than January 31 of the cal-
endar year following the calendar year to which 
such reports relate, and 
‘‘(B) in such manner as the Secretary pro-
vides.’’. 
(b) TAX ON EXCESS CONTRIBUTIONS.— 
(1) IN
GENERAL.—Section 4973(a) of such 
Code is amended by striking ‘‘or’’ at the end of 
paragraph (5), by inserting ‘‘or’’ at the end of para-
graph (6), and by inserting after paragraph (6) the 
following new paragraph: 
‘‘(7) a Universal Savings Account (as defined in 
section 530U),’’. 
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(2) EXCESS CONTRIBUTION.—Section 4973 of 
such Code is amended by adding at the end the fol-
lowing new subsection: 
‘‘(i) EXCESS CONTRIBUTIONS TO UNIVERSAL SAV-
INGS ACCOUNTS.—For purposes of this section— 
‘‘(1) IN GENERAL.—In the case of Universal 
Savings Accounts (within the meaning of section 
530U), the term ‘excess contributions’ means the 
sum of— 
‘‘(A) the amount (if any) by which the 
amount contributed for the taxable year to such 
accounts (other than qualified rollover contribu-
tions (as defined in section 530U(d))) exceeds 
the contribution limit under section 530U(c)(2) 
for such taxable year, and 
‘‘(B) the amount determined under this 
subsection for the preceding taxable year, re-
duced by the sum of— 
‘‘(i) the distributions out of the ac-
count for the taxable year, and 
‘‘(ii) the amount (if any) by which the 
maximum amount allowable as a contribu-
tion under section 530U(c)(2) for the tax-
able year exceeds the amount contributed 
to the accounts for the taxable year. 
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‘‘(2) SPECIAL RULE.—A contribution shall not 
be taken into account under paragraph (1) if such 
contribution (together with the amount of net in-
come attributable to such contribution) is distributed 
to the account holder on or before the due date of 
the account holder’s return of tax for such taxable 
year.’’. 
(c) TAX ON PROHIBITED TRANSACTIONS.—Section 
4975(e)(1) of such Code is amended by striking ‘‘or’’ at 
the end of subparagraph (F), by striking the period at 
the end of subparagraph (G) and inserting ‘‘, or’’, and 
by adding at the end the following new subparagraph: 
‘‘(H) a Universal Savings Account (as de-
fined in section 530U).’’. 
(d) FAILURE TO PROVIDE REPORTS ON UNIVERSAL 
SAVINGS ACCOUNTS.—Section 6693(a)(2) of such Code is 
amended by striking ‘‘and’’ at the end of subparagraph 
(E), by striking the period at the end of subparagraph 
(F) and inserting ‘‘, and’’, and by inserting after subpara-
graph (F) the following new subparagraph: 
‘‘(G) section 530U(g) (relating to Uni-
versal Savings Accounts).’’. 
(e) CONFORMING AMENDMENT.—The table of parts 
for subchapter F of chapter 1 of such Code is amended 
by adding at the end the following new item: 
‘‘PART IX. UNIVERSAL SAVINGS ACCOUNTS’’. 
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(f) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2018. 
SEC. 302. EXPANSION OF SECTION 529 PLANS. 
(a) DISTRIBUTIONS FOR CERTAIN EXPENSES ASSO-
CIATED
WITH
REGISTERED
APPRENTICESHIP
PRO-
GRAMS.—Section 529(c) of the Internal Revenue Code of 
1986 is amended by adding at the end the following new 
paragraph: 
‘‘(8) TREATMENT OF CERTAIN EXPENSES ASSO-
CIATED
WITH
REGISTERED
APPRENTICESHIP
PRO-
GRAMS.—Any reference in this subsection to the 
term ‘qualified higher education expense’ shall in-
clude a reference to expenses for fees, books, sup-
plies, and equipment required for the participation 
of a designated beneficiary in an apprenticeship pro-
gram registered and certified with the Secretary of 
Labor under section 1 of the National Apprentice-
ship Act (29 U.S.C. 50).’’. 
(b) DISTRIBUTIONS FOR CERTAIN HOMESCHOOLING 
EXPENSES.—Section 529(c)(7) of such Code is amended 
by striking ‘‘include a reference to’’ and all that follows 
and inserting ‘‘include a reference to— 
‘‘(A) expenses for tuition in connection 
with enrollment or attendance of a designated 
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beneficiary at an elementary or secondary pub-
lic, private, or religious school, and 
‘‘(B) expenses, with respect to a des-
ignated beneficiary, for— 
‘‘(i) curriculum and curricular mate-
rials, 
‘‘(ii) books or other instructional ma-
terials, 
‘‘(iii) online educational materials, 
‘‘(iv) tuition for tutoring or edu-
cational classes outside of the home (but 
only if the tutor or class instructor is not 
related (within the meaning of section 
152(d)(2)) to the student), 
‘‘(v) dual enrollment in an institution 
of higher education, and 
‘‘(vi) educational therapies for stu-
dents with disabilities, 
in connection with a homeschool (whether treat-
ed as a homeschool or a private school for pur-
poses of applicable State law).’’. 
(c) DISTRIBUTIONS
FOR QUALIFIED EDUCATION 
LOAN REPAYMENTS.— 
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(1) IN GENERAL.—Section 529(c) of such Code, 
as amended by subsection (a), is amended by adding 
at the end the following new paragraph: 
‘‘(9) TREATMENT
OF
QUALIFIED
EDUCATION 
LOAN REPAYMENTS.— 
‘‘(A) IN GENERAL.—Any reference in this 
subsection to the term ‘qualified higher edu-
cation expense’ shall include a reference to 
amounts paid as principal or interest on any 
qualified education loan (as defined in section 
221(d)) of the designated beneficiary or a sib-
ling of the designated beneficiary. 
‘‘(B) LIMITATION.—The amount of dis-
tributions treated as a qualified higher edu-
cation expense under this paragraph with re-
spect to the loans of any individual shall not ex-
ceed $10,000 (reduced by the amount of dis-
tributions so treated for all prior taxable years). 
‘‘(C) SPECIAL
RULES
FOR
SIBLINGS
OF 
THE DESIGNATED BENEFICIARY.— 
‘‘(i) SEPARATE
ACCOUNTING.—For 
purposes of subparagraph (B) and sub-
section (d), amounts treated as a qualified 
higher education expense with respect to 
the loans of a sibling of the designated 
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beneficiary shall be taken into account 
with respect to such sibling and not with 
respect to such designated beneficiary. 
‘‘(ii) SIBLING
DEFINED.—For pur-
poses of this paragraph, the term ‘sibling’ 
means an individual who bears a relation-
ship to the designated beneficiary which is 
described in section 152(d)(2)(B).’’. 
(2) COORDINATION WITH DEDUCTION FOR STU-
DENT LOAN INTEREST.—Section 221(e)(1) of such 
Code is amended by adding at the end the following: 
‘‘The deduction otherwise allowable under subsection 
(a) (prior to the application of subsection (b)) to the 
taxpayer for any taxable year shall be reduced (but 
not below zero) by so much of the distributions 
treated as a qualified higher education expense 
under section 529(c)(9) with respect to loans of the 
taxpayer as would be includible in gross income 
under section 529(c)(3)(A) for such taxable year but 
for such treatment.’’. 
(d) DISTRIBUTIONS FOR CERTAIN ELEMENTARY AND 
SECONDARY SCHOOL EXPENSES IN ADDITION TO TUI-
TION.—Section 529(c)(7)(A), as amended by subsection 
(b), is amended to read as follows: 
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‘‘(A) 
expenses 
described 
in 
section 
530(b)(3)(A)(i) in connection with enrollment 
or attendance of a designated beneficiary at an 
elementary or secondary public, private, or reli-
gious school, and’’. 
(e) UNBORN CHILDREN ALLOWED
AS ACCOUNT 
BENEFICIARIES.—Section 529(e) is amended by adding at 
the end the following new paragraph: 
‘‘(6) TREATMENT OF UNBORN CHILDREN.— 
‘‘(A) IN GENERAL.—Nothing shall prevent 
an unborn child from being treated as a des-
ignated beneficiary or an individual under this 
section. 
‘‘(B) UNBORN
CHILD.—For purposes of 
this paragraph— 
‘‘(i) IN GENERAL.—The term ‘unborn 
child’ means a child in utero. 
‘‘(ii) CHILD
IN
UTERO.—The term 
‘child in utero’ means a member of the 
species homo sapiens, at any stage of de-
velopment, who is carried in the womb.’’. 
(f) EFFECTIVE DATES.— 
(1) IN
GENERAL.—Except as otherwise pro-
vided in this subsection, the amendments made by 
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this section shall apply to distributions made after 
December 31, 2018. 
(2) UNBORN CHILDREN ALLOWED AS ACCOUNT 
BENEFICIARIES.—The amendment made by sub-
section (e) shall apply to contributions made after 
December 31, 2018. 
SEC. 303. PENALTY-FREE WITHDRAWALS FROM RETIRE-
MENT PLANS FOR INDIVIDUALS IN CASE OF 
BIRTH OF CHILD OR ADOPTION. 
(a) IN GENERAL.—Section 72(t)(2) of the Internal 
Revenue Code of 1986 is amended by adding at the end 
the following new subparagraph: 
‘‘(H) DISTRIBUTIONS FROM RETIREMENT 
PLANS IN CASE OF BIRTH OF CHILD OR ADOP-
TION.— 
‘‘(i) 
IN
GENERAL.—Any 
qualified 
birth or adoption distribution. 
‘‘(ii) 
LIMITATION.—The 
aggregate 
amount which may be treated as qualified 
birth or adoption distributions by any indi-
vidual with respect to any birth or adop-
tion shall not exceed $7,500. 
‘‘(iii) QUALIFIED BIRTH OR ADOPTION 
DISTRIBUTION.—For purposes of this sub-
paragraph— 
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‘‘(I) IN
GENERAL.—The term 
‘qualified birth or adoption distribu-
tion’ means any distribution from an 
applicable eligible retirement plan to 
an individual if made during the 1- 
year period beginning on the date on 
which a child of the individual is born 
or on which the legal adoption by the 
individual of an eligible child is final-
ized. 
‘‘(II) 
ELIGIBLE
CHILD.—The 
term ‘eligible child’ means any indi-
vidual (other than a child of the tax-
payer’s spouse) who has not attained 
age 18 or is physically or mentally in-
capable of self-support. 
‘‘(iv) TREATMENT OF PLAN DISTRIBU-
TIONS.— 
‘‘(I) IN GENERAL.—If a distribu-
tion to an individual would (without 
regard to clause (ii)) be a qualified 
birth or adoption distribution, a plan 
shall not be treated as failing to meet 
any requirement of this title merely 
because the plan treats the distribu-
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tion as a qualified birth or adoption 
distribution, unless the aggregate 
amount of such distributions from all 
plans maintained by the employer 
(and any member of any controlled 
group which includes the employer) to 
such individual exceeds $7,500. 
‘‘(II) CONTROLLED GROUP.—For 
purposes of subclause (I), the term 
‘controlled group’ means any group 
treated as a single employer under 
subsection (b), (c), (m), or (o) of sec-
tion 414. 
‘‘(v) AMOUNT DISTRIBUTED MAY BE 
REPAID.— 
‘‘(I) IN
GENERAL.—Any indi-
vidual who receives a qualified birth 
or adoption distribution may make 
one or more contributions in an ag-
gregate amount not to exceed the 
amount of such distribution to an ap-
plicable eligible retirement plan of 
which such individual is a beneficiary 
and to which a rollover contribution of 
such distribution could be made under 
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section 402(c), 403(a)(4), 403(b)(8), 
408(d)(3), or 457(e)(16), as the case 
may be. 
‘‘(II) LIMITATION ON CONTRIBU-
TIONS TO APPLICABLE ELIGIBLE RE-
TIREMENT
PLANS
OTHER
THAN 
IRAS.—The aggregate amount of con-
tributions made by an individual 
under subclause (I) to any applicable 
eligible retirement plan which is not 
an individual retirement plan shall not 
exceed the aggregate amount of quali-
fied birth or adoption distributions 
which are made from such plan to 
such individual. Subclause (I) shall 
not apply to contributions to any ap-
plicable eligible retirement plan which 
is not an individual retirement plan 
unless the individual is eligible to 
make contributions (other than those 
described in subclause (I)) to such ap-
plicable eligible retirement plan. 
‘‘(III) TREATMENT
OF
REPAY-
MENTS OF DISTRIBUTIONS FROM AP-
PLICABLE
ELIGIBLE
RETIREMENT 
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PLANS OTHER THAN IRAS.—If a con-
tribution is made under subclause (I) 
with respect to a qualified birth or 
adoption distribution from an applica-
ble eligible retirement plan other than 
an individual retirement plan, then 
the taxpayer shall, to the extent of the 
amount of the contribution, be treated 
as having received such distribution in 
an eligible rollover distribution (as de-
fined in section 402(c)(4)) and as 
having transferred the amount to the 
applicable eligible retirement plan in a 
direct trustee to trustee transfer with-
in 60 days of the distribution. 
‘‘(IV) TREATMENT
OF
REPAY-
MENTS
FOR
DISTRIBUTIONS
FROM 
IRAS.—If a contribution is made 
under subclause (I) with respect to a 
qualified birth or adoption distribution 
from an individual retirement plan, 
then, to the extent of the amount of 
the contribution, such distribution 
shall be treated as a distribution de-
scribed in section 408(d)(3) and as 
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