the pay of the individual under section 
805. 
‘‘(iii) Clause (ii) shall only apply if the 
special agent transitions to a position de-
scribed in clause (i)(I)(dd) without a break 
in service exceeding 3 days. 
‘‘(iv) The service of an affected em-
ployee shall no longer be eligible for treat-
ment under clause (ii) if such service oc-
curs after the employee is transferred to a 
supervisory or administrative position re-
lated to the activities of the former covered 
position of the employee. 
‘‘(v) In accordance with procedures 
established by the Secretary, an affected 
special agent may file an election to have 
any creditable service performed by the af-
fected special agent treated in accordance 
with this subchapter, without regard to 
clause (ii).’’. 
(e) IMPLEMENTATION.— 
(1) OFFICE
OF
PERSONNEL
MANAGEMENT.— 
Not later than 1 year after the date of enactment 
of this Act, the Director of the Office of Personnel 
Management shall promulgate regulations to carry 
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out the amendments made by subsections (a) and 
(b). 
(2) CIA EMPLOYEES.—The Director of the 
Central Intelligence Agency shall promulgate regula-
tions to carry out the amendment made by sub-
section (c). 
(3) FOREIGN SERVICE RETIREMENT AND DIS-
ABILITY SYSTEM.—The Secretary of State shall pro-
mulgate regulations to carry out the amendment 
made by subsection (d). 
(4) AGENCY CERTIFICATION.—The regulations 
promulgated to carry out the amendments made by 
this Act shall include a requirement that the head 
of the agency at which an affected employee or spe-
cial agent (as the case may be) incurred the applica-
ble illness or injury certifies that such illness or in-
jury— 
(A) was incurred in the course of the em-
ployee’s or special agent’s duties; and 
(B) permanently precludes the employee or 
special agent from rendering useful and effi-
cient service in the covered position but would 
not preclude the employee or special agent from 
continuing to serve in the Federal service. 
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(5) AGENCY
REAPPOINTMENT.—The regula-
tions promulgated to carry out the amendments 
made by this Act shall ensure that, to the greatest 
extent possible, the head of each agency appoints af-
fected employees or special agents to supervisory or 
administrative positions related to the activities of 
the former covered position of the employee or spe-
cial agent. 
(6) TREATMENT OF SERVICE.—The regulations 
promulgated to carry out the amendments made by 
this Act shall ensure that the creditable service of an 
affected employee or special agent (as the case may 
be) that is not in a covered position pursuant to an 
election made under such amendments shall be 
treated as the same type of service as the covered 
position in which the employee or agent suffered the 
qualifying illness or injury. 
(f) EFFECTIVE DATE; APPLICABILITY.—The amend-
ments made by this Act— 
(1) shall take effect on the date of enactment 
of this Act; and 
(2) shall apply to an individual who suffers an 
illness 
or 
injury 
described 
in 
section 
8336(c)(3)(A)(i)(II) or section 8412(d)(2)(A)(i)(II) 
of title 5, United States Code, as amended by this 
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section, section 302(d)(1)(A)(ii) of the Central Intel-
ligence Agency Retirement Act, as amended by this 
section, or section 806(a)(6)(D)(i)(I)(bb) of the For-
eign Service Act of 1980, as amended by this sec-
tion, on or after the date that is 2 years after the 
date of enactment of this Act. 
TITLE IV 
SEC. 401. EXPANDING AUTOMATIC ENROLLMENT IN RE-
TIREMENT PLANS. 
(a) IN GENERAL.—Subpart B of part I of subchapter 
D of chapter 1 of the Internal Revenue Code of 1986 is 
amended by inserting after section 414 the following new 
section: 
‘‘SEC. 414A. REQUIREMENTS RELATED TO AUTOMATIC EN-
ROLLMENT. 
‘‘(a) IN GENERAL.—Except as otherwise provided in 
this section— 
‘‘(1) an arrangement shall not be treated as a 
qualified cash or deferred arrangement described in 
section 401(k) unless such arrangement meets the 
automatic enrollment requirements of subsection (b), 
and 
‘‘(2) an annuity contract otherwise described in 
section 403(b)(1) which is purchased under a salary 
reduction agreement shall not be treated as de-
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scribed in such section unless such agreement meets 
the automatic enrollment requirements of subsection 
(b). 
‘‘(b) AUTOMATIC ENROLLMENT REQUIREMENTS.— 
‘‘(1) IN GENERAL.—An arrangement or agree-
ment meets the requirements of this subsection if 
such arrangement or agreement is an eligible auto-
matic contribution arrangement (as defined in sec-
tion 414(w)(3)) which meets the requirements of 
paragraphs (2) through (4). 
‘‘(2) ALLOWANCE
OF
PERMISSIBLE
WITH-
DRAWALS.—An eligible automatic contribution ar-
rangement meets the requirements of this paragraph 
if such arrangement allows employees to make per-
missible 
withdrawals 
(as 
defined 
in 
section 
414(w)(2)). 
‘‘(3) MINIMUM CONTRIBUTION PERCENTAGE.— 
‘‘(A) IN GENERAL.—An eligible automatic 
contribution arrangement meets the require-
ments of this paragraph if— 
‘‘(i) the uniform percentage of com-
pensation contributed by the participant 
under such arrangement during the first 
year of participation is not less than 3 per-
cent and not more than 10 percent (unless 
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the participant specifically elects not to 
have such contributions made or to have 
such contributions made at a different per-
centage), and 
‘‘(ii) effective for the first day of each 
plan year starting after each completed 
year of participation under such arrange-
ment such uniform percentage is increased 
by 1 percentage point (to at least 10 per-
cent, but not more than 15 percent) unless 
the participant specifically elects not to 
have such contributions made or to have 
such contributions made at a different per-
centage. 
‘‘(B) INITIAL REDUCED CEILING FOR CER-
TAIN PLANS.—In the case of any eligible auto-
matic contribution arrangement (other than an 
arrangement that meets the requirements of 
paragraph (12) or (13) of section 401(k)), for 
plan years ending before January 1, 2027, sub-
paragraph (A)(ii) shall be applied by sub-
stituting ‘10 percent’ for ‘15 percent’. 
‘‘(4) INVESTMENT REQUIREMENTS.—An eligible 
automatic contribution arrangement meets the re-
quirements of this paragraph if amounts contributed 
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pursuant to such arrangement, and for which no in-
vestment is elected by the participant, are invested 
in accordance with the requirements of section 
2550.404c-5 of title 29, Code of Federal Regulations 
(or any successor regulations). 
‘‘(c) EXCEPTIONS.—For purposes of this section— 
‘‘(1) SIMPLE PLANS.—Subsection (a) shall not 
apply to any simple plan (within the meaning of sec-
tion 401(k)(11)). 
‘‘(2) EXCEPTION
FOR
PLANS
OR
ARRANGE-
MENTS ESTABLISHED BEFORE ENACTMENT OF SEC-
TION.— 
‘‘(A) IN
GENERAL.—Subsection (a) shall 
not apply to— 
‘‘(i) any qualified cash or deferred ar-
rangement established before the date of 
the enactment of this section, or 
‘‘(ii) any annuity contract purchased 
under a plan established before the date of 
the enactment of this section. 
‘‘(B) 
POST-ENACTMENT
ADOPTION
OF 
MULTIPLE
EMPLOYER
PLAN.—Subparagraph 
(A) shall not apply in the case of an employer 
adopting after such date of enactment a plan 
maintained by more than one employer, and 
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subsection (a) shall apply with respect to such 
employer as if such plan were a single plan. 
‘‘(3) EXCEPTION
FOR
GOVERNMENTAL
AND 
CHURCH PLANS.—Subsection (a) shall not apply to 
any governmental plan (within the meaning of sec-
tion 414(d)) or any church plan (within the meaning 
of section 414(e)). 
‘‘(4) EXCEPTION FOR NEW AND SMALL BUSI-
NESSES.— 
‘‘(A) 
NEW
BUSINESS.—Subsection 
(a) 
shall not apply to any qualified cash or deferred 
arrangement, or any annuity contract pur-
chased under a plan, while the employer main-
taining such plan (and any predecessor em-
ployer) has been in existence for less than 3 
years. 
‘‘(B) SMALL BUSINESSES.—Subsection (a) 
shall not apply to any qualified cash or deferred 
arrangement, or any annuity contract pur-
chased under a plan, earlier than the date that 
is 1 year after the close of the first taxable year 
with respect to which the employer maintaining 
the plan normally employed more than 10 em-
ployees. 
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‘‘(C) TREATMENT
OF
MULTIPLE
EM-
PLOYER PLANS.—In the case of a plan main-
tained by more than 1 employer, subparagraphs 
(A) and (B) shall be applied separately with re-
spect to each such employer, and all such em-
ployers to which subsection (a) applies (after 
the application of this paragraph) shall be 
treated as maintaining a separate plan for pur-
poses of this section.’’. 
(b) CLERICAL AMENDMENT.—The table of sections 
for subpart B of part I of subchapter D of chapter 1 of 
such Code is amended by inserting after the item relating 
to section 414 the following new item: 
‘‘Sec. 414A. Requirements related to automatic enrollment.’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to plan years beginning after De-
cember 31, 2025. 
SEC. 402. MODIFICATION OF CREDIT FOR SMALL EM-
PLOYER PENSION PLAN STARTUP COSTS. 
(a) INCREASE IN CREDIT PERCENTAGE FOR SMALL-
ER EMPLOYERS.—Section 45E(e) of the Internal Revenue 
Code of 1986 is amended by adding at the end the fol-
lowing new paragraph: 
‘‘(4) INCREASED CREDIT FOR CERTAIN SMALL 
EMPLOYERS.—In the case of an employer which 
would be an eligible employer under subsection (c) if 
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section 408(p)(2)(C)(i) was applied by substituting 
‘50 employees’ for ‘100 employees’, subsection (a) 
shall be applied by substituting ‘100 percent’ for ‘50 
percent’.’’. 
(b) ADDITIONAL CREDIT FOR EMPLOYER CONTRIBU-
TIONS BY CERTAIN SMALL EMPLOYERS.—Section 45E of 
such Code, as amended by subsection (a), is amended by 
adding at the end the following new subsection: 
‘‘(f) ADDITIONAL CREDIT
FOR EMPLOYER CON-
TRIBUTIONS BY CERTAIN ELIGIBLE EMPLOYERS.— 
‘‘(1) IN GENERAL.—In the case of an eligible 
employer, the credit allowed for the taxable year 
under subsection (a) (determined without regard to 
this subsection) shall be increased by an amount 
equal to the applicable percentage of employer con-
tributions (other than any elective deferrals (as de-
fined in section 402(g)(3)) by the employer to an eli-
gible employer plan (other than a defined benefit 
plan (as defined in section 414(j))). 
‘‘(2) LIMITATIONS.— 
‘‘(A) DOLLAR
LIMITATION.—The amount 
determined under paragraph (1) (before the ap-
plication of subparagraph (B)) with respect to 
any employee of the employer shall not exceed 
$1,000. 
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‘‘(B) CREDIT PHASE-IN.—In the case of 
any eligible employer which had for the pre-
ceding taxable year more than 50 employees, 
the amount determined under paragraph (1) 
(without regard to this subparagraph) shall be 
reduced by an amount equal to the product 
of— 
‘‘(i) the amount otherwise so deter-
mined under paragraph (1), multiplied by 
‘‘(ii) a percentage equal to 2 percent-
age points for each employee of the em-
ployer for the preceding taxable year in ex-
cess of 50 employees. 
‘‘(3) APPLICABLE PERCENTAGE.—For purposes 
of this section, the applicable percentage for the tax-
able year during which the eligible employer plan is 
established with respect to the eligible employer shall 
be 100 percent, and for taxable years thereafter 
shall be determined under the following table: 
‘‘In the case of the following 
taxable 
year 
beginning 
after the taxable year 
during which plan is es-
tablished with respect to 
the eligible employer: 
The applicable percentage shall 
be: 
1st ................................................................................................
100% 
2nd ...............................................................................................
75% 
3rd ...............................................................................................
50% 
4th ................................................................................................
25% 
Any taxable year thereafter .........................................................
0% 
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‘‘(4) DETERMINATION OF ELIGIBLE EMPLOYER; 
NUMBER OF EMPLOYEES.—For purposes of this sub-
section, whether an employer is an eligible employer 
and the number of employees of an employer shall 
be determined under the rules of subsection (c), ex-
cept that paragraph (2) thereof shall only apply to 
the taxable year during which the eligible employer 
plan to which this section applies is established with 
respect to the eligible employer.’’. 
(c) 
DISALLOWANCE
OF
DEDUCTION.—Section 
45E(e)(2) of such Code is amended to read as follows: 
‘‘(2) DISALLOWANCE OF DEDUCTION.—No de-
duction shall be allowed— 
‘‘(A) for that portion of the qualified start-
up costs paid or incurred for the taxable year 
which is equal to so much of the portion of the 
credit determined under subsection (a) as is 
properly allocable to such costs, and 
‘‘(B) for that portion of the employer con-
tributions by the employer for the taxable year 
which is equal to so much of the credit increase 
determined under subsection (f) as is properly 
allocable to such contributions.’’. 
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(d) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2024. 
SEC. 403. PROMOTION OF SAVER’S CREDIT. 
(a) IN GENERAL.—The Secretary of the Treasury 
shall take such steps as the Secretary determines are nec-
essary and appropriate to increase public awareness of the 
credit provided under section 25B of the Internal Revenue 
Code of 1986. 
(b) REPORT TO CONGRESS.— 
(1) IN GENERAL.—Not later than 90 days after 
the date of the enactment of this Act, the Secretary 
shall provide a report to Congress to summarize the 
anticipated promotion efforts of the Treasury under 
subsection (a). 
(2) CONTENTS.—Such report shall include— 
(A) a description of plans for— 
(i) the development and distribution 
of digital and print materials, including the 
distribution of such materials to States for 
participants in State facilitated retirement 
savings programs; and 
(ii) the translation of such materials 
into the 10 most commonly spoken lan-
guages in the United States after English 
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(as determined by reference to the most re-
cent American Community Survey of the 
Bureau of the Census); and 
(B) such other information as the Sec-
retary determines is necessary 
SEC. 404. ENHANCEMENT OF SAVER’S CREDIT. 
(a) 50 PERCENT CREDIT RATE.—Section 25B(a) of 
the Internal Revenue Code of 1986 is amended by striking 
‘‘the applicable percentage’’ and inserting ‘‘50 percent’’. 
(b) ADJUSTED GROSS INCOME PHASEOUTS.—Section 
25B(b) of such Code is amended to read as follows: 
‘‘(b) LIMITATION.—For purposes of this section— 
‘‘(1) IN GENERAL.—The amount of credit al-
lowable under subsection (a) (determined without re-
gard to this subsection) shall be reduced (but not 
below zero) by an amount which bears the same 
ratio to the credit otherwise so allowable as— 
‘‘(A) the excess (if any) of— 
‘‘(i) adjusted gross income of the tax-
payer, over 
‘‘(ii) the threshold amount, bears to 
‘‘(B) the phaseout amount. 
‘‘(2) THRESHOLD AMOUNT.—The term ‘thresh-
old amount’ means— 
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‘‘(A) in the case of a joint return or a sur-
viving spouse (as defined in section 2(a)), 
$48,000, 
‘‘(B) in the case of a head of household, 75 
percent of the amount in effect for the taxable 
year under subparagraph (A), and 
‘‘(C) in the case of any other individual, 50 
percent of the amount in effect for the taxable 
year under subparagraph (A). 
‘‘(3) PHASEOUT AMOUNT.—The term ‘phaseout 
amount’ means— 
‘‘(A) in the case of a joint return or a sur-
viving spouse (as defined in 2(a)), $35,000, 
‘‘(B) in the case of a head of household (as 
defined in section 2(b)), 75 percent of the 
amount in effect for the taxable year under sub-
paragraph (A), and 
‘‘(C) in the case of any other individual, 50 
percent of the amount in effect for the taxable 
year under subparagraph (A). 
‘‘(4) INFLATION ADJUSTMENT.— 
‘‘(A) IN
GENERAL.—In the case of any 
taxable year beginning in a calendar year after 
2028, the $48,000 dollar amount in paragraph 
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(2) and the $35,000 in paragraph (3) shall 
each 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 in which the taxable year be-
gins, determined by substituting ‘calendar 
year 2024’ for ‘calendar year 2016’ in sub-
paragraph (A)(ii) thereof. 
‘‘(B) ROUNDING.—Any increase deter-
mined under subparagraph (A) that is not a 
multiple of $500 shall be rounded to the near-
est multiple of $500.’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2028. 
SEC. 405. ENHANCEMENT OF 403(B) PLANS. 
(a) IN GENERAL.—Section 403(b)(7)(A) of the Inter-
nal Revenue Code of 1986 is amended by striking ‘‘if the 
amounts are to be invested in regulated investment com-
pany stock to be held in that custodial account’’ and in-
serting ‘‘if the amounts are to be held in that custodial 
account and invested in regulated investment company 
stock or a group trust intended to satisfy the requirements 
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of Internal Revenue Service Revenue Ruling 81–100 (or 
any successor guidance)’’. 
(b) CONFORMING AMENDMENT.—The heading of 
paragraph (7) of section 403(b) of such Code is amended 
by striking ‘‘FOR
REGULATED
INVESTMENT
COMPANY 
STOCK’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to amounts invested after Decem-
ber 31, 2024. 
SEC. 406. INCREASE IN AGE FOR REQUIRED BEGINNING 
DATE FOR MANDATORY DISTRIBUTIONS. 
(a) IN GENERAL.—Section 401(a)(9)(C)(i)(I) of the 
Internal Revenue Code of 1986 is amended by striking 
‘‘age 72’’ and inserting ‘‘the applicable age’’. 
(b) SPOUSE BENEFICIARIES; SPECIAL RULE
FOR 
OWNERS.—Subparagraphs (B)(iv)(I) and (C)(ii)(I) of sec-
tion 401(a)(9) of such Code are each amended by striking 
‘‘age 72’’ and inserting ‘‘the applicable age’’. 
(c) APPLICABLE AGE.—Section 401(a)(9)(C) of such 
Code is amended by adding at the end the following new 
clause: 
‘‘(v) APPLICABLE AGE.— 
‘‘(I) In the case of an individual 
who attains age 72 after December 
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ginning in a calendar year after 2025, the 
$1,000 amount under subparagraph (B)(ii) 
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 in which the tax-
able year begins, determined by sub-
stituting ‘calendar year 2024’ for ‘cal-
endar year 2016’ in subparagraph 
(A)(ii) thereof. 
If any amount after adjustment under the 
preceding sentence is not a multiple of 
$100, such amount shall be rounded to the 
next lower multiple of $100.’’. 
(b) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2025. 
SEC. 408. HIGHER CATCH-UP LIMIT TO APPLY AT AGE 62, 63, 
AND 64. 
(a) IN GENERAL.— 
(1) PLANS OTHER THAN SIMPLE PLANS.—Sec-
tion 414(v)(2)(B)(i) of the Internal Revenue Code of 
1986 is amended by inserting the following before 
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the period: ‘‘($10,000, in the case of an eligible par-
ticipant who would attain age 62, but not age 65, 
before the close of the taxable year)’’. 
(2) SIMPLE PLANS.—Section 414(v)(2)(B)(ii) of 
such Code is amended by inserting the following be-
fore the period: ‘‘($5,000, in the case of an eligible 
participant who would attain age 62, but not age 65, 
before the close of the taxable year)’’. 
(b) COST-OF-LIVING ADJUSTMENTS.—Subparagraph 
(C) of section 414(v)(2) of such Code is amended by add-
ing at the end the following: ‘‘In the case of a year begin-
ning after December 31, 2023, the Secretary shall adjust 
annually the $10,000 amount in subparagraph (B)(i) and 
the $5,000 amount in subparagraph (B)(ii) for increases 
in the cost-of-living at the same time and in the same 
manner as adjustments under the preceding sentence; ex-
cept that the base period taken into account shall be the 
calendar quarter beginning July 1, 2022.’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2025. 
SEC. 409. POOLED EMPLOYER PLANS MODIFICATION. 
(a) IN GENERAL.—Section 3(43)(B)(ii) of the Em-
ployee Retirement Income Security Act of 1974 (29 
U.S.C. 1002(43)(B)(ii)) is amended to read as follows: 
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‘‘(ii) designate a named fiduciary 
(other than an employer in the plan) to be 
responsible for collecting contributions to 
the plan and require such fiduciary to im-
plement written contribution collection pro-
cedures that are reasonable, diligent, and 
systematic;’’. 
(b) EFFECTIVE DATE.—The amendments made by 
this section shall apply to plan years beginning after De-
cember 31, 2024. 
SEC. 410. MULTIPLE EMPLOYER 403(B) PLANS. 
(a) IN GENERAL.—Section 403(b) of the Internal 
Revenue Code of 1986 is amended by adding at the end 
the following new paragraph: 
‘‘(15) MULTIPLE EMPLOYER PLANS.— 
‘‘(A) IN GENERAL.—Except in the case of 
a church plan, this subsection shall not be 
treated as failing to apply to an annuity con-
tract solely by reason of such contract being 
purchased under a plan maintained by more 
than 1 employer. 
‘‘(B) TREATMENT OF EMPLOYERS FAILING 
TO MEET REQUIREMENTS OF PLAN.— 
‘‘(i) IN GENERAL.—In the case of a 
plan maintained by more than 1 employer, 
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this subsection shall not be treated as fail-
ing to apply to an annuity contract held 
under such plan merely because of one or 
more employers failing to meet the require-
ments of this subsection if such plan satis-
fies rules similar to the rules of section 
413(e)(2) with respect to any such em-
ployer failure. 
‘‘(ii) ADDITIONAL REQUIREMENTS IN 
CASE OF NON-GOVERNMENTAL PLANS.—A 
plan shall not be treated as meeting the re-
quirements of this subparagraph unless the 
plan satisfies rules similar to the rules of 
subparagraph (A) or (B) of section 
413(e)(1), except in the case of a multiple 
employer plan maintained solely by any of 
the following: A State, a political subdivi-
sion of a State, or an agency or instrumen-
tality of any one or more of the fore-
going.’’. 
(b) ANNUAL REGISTRATION FOR 403(b) MULTIPLE 
EMPLOYER PLAN.—Section 6057 of such Code is amend-
ed by redesignating subsection (g) as subsection (h) and 
by inserting after subsection (f) the following new sub-
section: 
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‘‘(g) 403(b) MULTIPLE EMPLOYER PLANS TREATED 
AS ONE PLAN.—In the case of annuity contracts to which 
this section applies and to which section 403(b) applies 
by reason of the plan under which such contracts are pur-
chased meeting the requirements of paragraph (15) there-
of, such plan shall be treated as a single plan for purposes 
of this section.’’. 
(c) ANNUAL INFORMATION RETURNS
FOR 403(b) 
MULTIPLE EMPLOYER PLAN.—Section 6058 of such Code 
is amended by redesignating subsection (f) as subsection 
(g) and by inserting after subsection (e) the following new 
subsection: 
‘‘(f) 403(b) MULTIPLE EMPLOYER PLANS TREATED 
AS ONE PLAN.—In the case of annuity contracts to which 
this section applies and to which section 403(b) applies 
by reason of the plan under which such contracts are pur-
chased meeting the requirements of paragraph (15) there-
of, such plan shall be treated as a single plan for purposes 
of this section.’’. 
(d) AMENDMENTS TO EMPLOYEE RETIREMENT IN-
COME SECURITY ACT OF 1974.— 
(1) IN GENERAL.—Section 3(43)(A) of the Em-
ployee Retirement Income Security Act of 1974 is 
amended— 
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(A) in clause (ii), by striking ‘‘section 
501(a) of such Code or’’ and inserting ‘‘section 
501(a) of such Code, a plan that consists of 
contracts described in section 403(b) of such 
Code, or’’; and 
(B) in the flush text at the end, by striking 
‘‘the plan.’’ and inserting ‘‘the plan, but such 
term shall include any program (other than a 
governmental plan) maintained for the benefit 
of the employees of more than 1 employer that 
consists of contracts described in section 403(b) 
of such Code and that meets the requirements 
of subparagraph (A) or (B) of section 413(e)(1) 
of such Code.’’. 
(2) 
CONFORMING
AMENDMENTS.—Sections 
3(43)(B)(v)(II) and 3(44)(A)(i)(I) of the Employee 
Retirement Income Security Act of 1974 are each 
amended by striking ‘‘section 401(a) of such Code 
or’’ and inserting ‘‘section 401(a) of such Code, a 
plan that consists of contracts described in section 
403(b) of such Code, or’’. 
(e) REGULATIONS RELATING TO EMPLOYER FAIL-
URE TO MEET MULTIPLE EMPLOYER PLAN REQUIRE-
MENTS.—The Secretary of the Treasury (or the Sec-
retary’s delegate) shall prescribe such regulations as may 
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be necessary to clarify, in the case of plans to which sec-
tion 403(b)(15) of the Internal Revenue Code of 1986 ap-
plies, the treatment of an employer departing such plan 
in connection with such employer’s failure to meet mul-
tiple employer plan requirements. 
(f) MODIFICATION
OF MODEL PLAN LANGUAGE, 
ETC.— 
(1) PLAN
NOTIFICATIONS.—The Secretary of 
the Treasury (or the Secretary’s delegate) shall mod-
ify the model plan language published under section 
413(e)(5) of the Internal Revenue Code of 1986 to 
include language that notifies participating employ-
ers described in section 501(c)(3), and which are ex-
empt from tax under section 501(a), that the plan 
is subject to the Employee Retirement Income Secu-
rity Act of 1974 and that such employer is a plan 
sponsor with respect to its employees participating 
in the multiple employer plan and, as such, has cer-
tain fiduciary duties with respect to the plan and to 
its employees. 
(2) MODEL PLANS FOR MULTIPLE EMPLOYER 
403(B) NON-GOVERNMENTAL PLANS.—For plans to 
which section 403(b)(15)(A) of the Internal Revenue 
Code of 1986 applies (other than a plan maintained 
for its employees by a State, a political subdivision 
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of a State, or an agency or instrumentality of any 
one or more of the foregoing), the Secretary of the 
Treasury shall publish model plan language similar 
to model plan language published under section 
413(e)(5) of such Code. 
(3) EDUCATIONAL OUTREACH TO EMPLOYERS 
EXEMPT FROM TAX.—The Secretary of the Treasury 
(or the Secretary’s delegate) shall provide education 
and outreach to increase awareness to employers de-
scribed in section 501(c)(3) of the Internal Revenue 
Code of 1986, and which are exempt from tax under 
section 501(a) of such Code, that multiple employer 
plans are subject to the Employee Retirement In-
come Security Act of 1974 and that such employer 
is a plan sponsor with respect to its employees par-
ticipating in the multiple employer plan and, as 
such, has certain fiduciary duties with respect to the 
plan and to its employees. 
(g) NO INFERENCE WITH RESPECT
TO CHURCH 
PLANS.—Regarding any application of section 403(b) of 
the Internal Revenue Code of 1986 to an annuity contract 
purchased under a church plan (as defined in section 
414(e) of such Code) maintained by more than 1 em-
ployer, or to any application of rules similar to section 
413(e) of such Code to such a plan, no inference shall 
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be made from section 403(b)(15)(A) of such Code (as 
added by this Act) not applying to such plans. 
(h) EFFECTIVE DATE.— 
(1) IN GENERAL.—The amendments made by 
this section shall apply to plan years beginning after 
December 31, 2024. 
(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 amendment) 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 the case of a plan to which section 
403(b)(15) of the Internal Revenue Code of 1986 
applies. 
SEC. 411. TREATMENT OF STUDENT LOAN PAYMENTS AS 
ELECTIVE DEFERRALS FOR PURPOSES OF 
MATCHING CONTRIBUTIONS. 
(a) IN GENERAL.—Section 401(m)(4)(A) of the In-
ternal Revenue Code of 1986 is amended by striking 
‘‘and’’ at the end of clause (i), by striking the period at 
the end of clause (ii) and inserting ‘‘, and’’, and by adding 
at the end the following new clause: 
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‘‘(iii) subject to the requirements of 
paragraph (13), any employer contribution 
made to a defined contribution plan on be-
half of an employee on account of a quali-
fied student loan payment.’’ 
(b) QUALIFIED STUDENT LOAN PAYMENT.—Section 
401(m)(4) of such Code is amended by adding at the end 
the following new subparagraph: 
‘‘(D) QUALIFIED
STUDENT
LOAN
PAY-
MENT.—The term ‘qualified student loan pay-
ment’ means a payment made by an employee 
in repayment of a qualified education loan (as 
defined section 221(d)(1)) incurred by the em-
ployee to pay qualified higher education ex-
penses, but only— 
‘‘(i) to the extent such payments in 
the aggregate for the year do not exceed 
an amount equal to— 
‘‘(I) the limitation applicable 
under section 402(g) for the year (or, 
if lesser, the employee’s compensation 
(as defined in section 415(c)(3)) for 
the year), reduced by 
‘‘(II) the elective deferrals made 
by the employee for such year, and 
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‘‘(ii) if the employee certifies to the 
employer making the matching contribu-
tion under this paragraph that such pay-
ment has been made on such loan. 
For purposes of this subparagraph, the term 
‘qualified higher education expenses’ means the 
cost of attendance (as defined in section 472 of 
the Higher Education Act of 1965, as in effect 
on the day before the date of the enactment of 
the Taxpayer Relief Act of 1997) at an eligible 
educational institution (as defined in section 
221(d)(2)).’’. 
(c) MATCHING
CONTRIBUTIONS
FOR
QUALIFIED 
STUDENT LOAN PAYMENTS.—Section 401(m) of such 
Code is amended by redesignating paragraph (13) as para-
graph (14), and by inserting after paragraph (12) the fol-
lowing new paragraph: 
‘‘(13) MATCHING CONTRIBUTIONS FOR QUALI-
FIED STUDENT LOAN PAYMENTS.— 
‘‘(A) IN GENERAL.—For purposes of para-
graph (4)(A)(iii), an employer contribution 
made to a defined contribution plan on account 
of a qualified student loan payment shall be 
treated as a matching contribution for purposes 
of this title if— 
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‘‘(i) the plan provides matching con-
tributions on account of elective deferrals 
at the same rate as contributions on ac-
count of qualified student loan payments, 
‘‘(ii) the plan provides matching con-
tributions on account of qualified student 
loan payments only on behalf of employees 
otherwise eligible to receive matching con-
tributions on account of elective deferrals, 
‘‘(iii) under the plan, all employees el-
igible to receive matching contributions on 
account of elective deferrals are eligible to 
receive matching contributions on account 
of qualified student loan payments, and 
‘‘(iv) the plan provides that matching 
contributions on account of qualified stu-
dent loan payments vest in the same man-
ner as matching contributions on account 
of elective deferrals. 
‘‘(B) TREATMENT FOR PURPOSES OF NON-
DISCRIMINATION RULES, ETC.— 
‘‘(i) NONDISCRIMINATION
RULES.— 
For purposes of subparagraph (A)(iii), 
subsection (a)(4), and section 410(b), 
matching contributions described in para-
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graph (4)(A)(iii) shall not fail to be treated 
as available to an employee solely because 
such employee does not have debt incurred 
under a qualified education loan (as de-
fined in section 221(d)(1)). 
‘‘(ii) STUDENT LOAN PAYMENTS NOT 
TREATED
AS
PLAN
CONTRIBUTION.—Ex-
cept as provided in clause (iii), a qualified 
student loan payment shall not be treated 
as a contribution to a plan under this title. 
‘‘(iii) 
MATCHING
CONTRIBUTION 
RULES.—Solely for purposes of meeting 
the requirements of paragraph (11)(B) or 
(12) of this subsection, or paragraph 
(11)(B)(i)(II), (12)(B), or (13)(D) of sub-
section (k), a plan may treat a qualified 
student loan payment as an elective defer-
ral or an elective contribution, whichever is 
applicable. 
‘‘(iv) ACTUAL
DEFERRAL
PERCENT-
AGE TESTING.—In determining whether a 
plan meets the requirements of subsection 
(k)(3)(A)(ii) for a plan year, the plan may 
apply the requirements of such subsection 
separately with respect to all employees 
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who receive matching contributions de-
scribed in paragraph (4)(A)(iii) for the 
plan year. 
‘‘(C) EMPLOYER MAY RELY ON EMPLOYEE 
CERTIFICATION.—The employer may rely on an 
employee certification of payment under para-
graph (4)(D)(ii).’’. 
(d) 
SIMPLE
RETIREMENT
ACCOUNTS.—Section 
408(p)(2) of such Code is amended by adding at the end 
the following new subparagraph: 
‘‘(F) 
MATCHING
CONTRIBUTIONS
FOR 
QUALIFIED STUDENT LOAN PAYMENTS.— 
‘‘(i) IN
GENERAL.—Subject to the 
rules of clause (iii), an arrangement shall 
not fail to be treated as meeting the re-
quirements of subparagraph (A)(iii) solely 
because under the arrangement, solely for 
purposes of such subparagraph, qualified 
student loan payments are treated as 
amounts elected by the employee under 
subparagraph (A)(i)(I) to the extent such 
payments do not exceed— 
‘‘(I) the applicable dollar amount 
under subparagraph (E) (after appli-
cation of section 414(v)) for the year 
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(or, if lesser, the employee’s com-
pensation 
(as 
defined 
in 
section 
415(c)(3)) for the year), reduced by 
‘‘(II) any other amounts elected 
by the employee under subparagraph 
(A)(i)(I) for the year. 
‘‘(ii) QUALIFIED STUDENT LOAN PAY-
MENT.—For purposes of this subpara-
graph— 
‘‘(I) IN
GENERAL.—The term 
‘qualified 
student 
loan 
payment’ 
means a payment made by an em-
ployee in repayment of a qualified 
education loan (as defined in section 
221(d)(1)) incurred by the employee 
to pay qualified higher education ex-
penses, but only if the employee cer-
tifies to the employer making the 
matching contribution that such pay-
ment has been made on such a loan. 
‘‘(II) QUALIFIED
HIGHER
EDU-
CATION EXPENSES.—The term ‘quali-
fied higher education expenses’ has 
the same meaning as when used in 
section 401(m)(4)(D). 
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‘‘(iii) APPLICABLE RULES.—Clause (i) 
shall apply to an arrangement only if, 
under the arrangement— 
‘‘(I) matching contributions on 
account of qualified student loan pay-
ments are provided only on behalf of 
employees otherwise eligible to elect 
contributions 
under 
subparagraph 
(A)(i)(I), and 
‘‘(II) all employees otherwise eli-
gible to participate in the arrange-
ment are eligible to receive matching 
contributions on account of qualified 
student loan payments.’’. 
(e) 403(b) PLANS.—Section 403(b)(12)(A) of such 
Code is amended by adding at the end the following: ‘‘The 
fact that the employer offers matching contributions on 
account of qualified student loan payments as described 
in section 401(m)(13) shall not be taken into account in 
determining whether the arrangement satisfies the re-
quirements of clause (ii) (and any regulation there-
under).’’. 
(f) 457(b) PLANS.—Section 457(b) of such Code is 
amended by adding at the end the following: ‘‘A plan 
which is established and maintained by an employer which 
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is described in subsection (e)(1)(A) shall not be treated 
as failing to meet the requirements of this subsection sole-
ly because the plan, or another plan maintained by the 
employer which meets the requirements of section 401(a) 
or 403(b), provides for matching contributions on account 
of qualified student loan payments as described in section 
401(m)(13).’’. 
(g) REGULATORY AUTHORITY.—The Secretary shall 
prescribe regulations for purposes of implementing the 
amendments made by this section, including regulations— 
(1) permitting a plan to make matching con-
tributions for qualified student loan payments, as 
defined in sections 401(m)(4)(D) and 408(p)(2)(F) 
of the Internal Revenue Code of 1986, as added by 
this section, at a different frequency than matching 
contributions are otherwise made under the plan, 
provided that the frequency is not less than annu-
ally; 
(2) permitting employers to establish reasonable 
procedures to claim matching contributions for such 
qualified student loan payments under the plan, in-
cluding an annual deadline (not earlier than 3 
months after the close of each plan year) by which 
a claim must be made; and 
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(3) promulgating model amendments which 
plans may adopt to implement matching contribu-
tions on such qualified student loan payments for 
purposes of sections 401(m), 408(p), 403(b), and 
457(b) of the Internal Revenue Code of 1986. 
(h) EFFECTIVE DATE.—The amendments made by 
this section shall apply to contributions made for plan 
years beginning after December 31, 2024. 
SEC. 412. APPLICATION OF CREDIT FOR SMALL EMPLOYER 
PENSION PLAN STARTUP COSTS TO EMPLOY-
ERS WHICH JOIN AN EXISTING PLAN. 
(a) IN GENERAL.—Section 45E(d)(3)(A) of the In-
ternal Revenue Code of 1986 is amended by striking ‘‘ef-
fective’’ and inserting ‘‘effective with respect to the eligible 
employer’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall take effect as if included in the enact-
ment of section 104 of the Setting Every Community Up 
for Retirement Enhancement Act of 2019. 
SEC. 413. MILITARY SPOUSE RETIREMENT PLAN ELIGI-
BILITY CREDIT FOR SMALL EMPLOYERS. 
(a) IN GENERAL.—Subpart D of part IV of sub-
chapter A of chapter 1 of the Internal Revenue Code of 
1986 is amended by adding at the end the following new 
section: 
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‘‘(1) IN
GENERAL.—The term ‘eligible small 
employer’ means an eligible employer (as defined in 
section 408(p)(2)(C)(i)(I)). 
‘‘(2) APPLICATION OF 2-YEAR GRACE PERIOD.— 
A 
rule 
similar 
to 
the 
rule 
of 
section 
408(p)(2)(C)(i)(II) shall apply for purposes of this 
section. 
‘‘(d) MILITARY SPOUSE.—For purposes of this sec-
tion— 
‘‘(1) IN GENERAL.—The term ‘military spouse’ 
means, with respect to any employer, any individual 
who is married (within the meaning of section 7703 
as of the first date that the employee is employed by 
the employer) to an individual who is a member of 
the uniformed services (as defined section 101(a)(5) 
of title 10, United States Code). For purposes of 
this section, an employer may rely on an employee’s 
certification that such employee’s spouse is a mem-
ber of the uniformed services if such certification 
provides the name, rank, and service branch of such 
spouse. 
‘‘(2) EXCLUSION
OF
HIGHLY
COMPENSATED 
EMPLOYEES.—With respect to any employer, the 
term ‘military spouse’ shall not include any indi-
vidual if such individual is a highly compensated em-
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‘‘(f) AGGREGATION RULE.—All persons treated as a 
single employer under subsection (b), (c), (m), or (o) of 
section 414 shall be treated as one employer for purposes 
of this section.’’. 
(b) CREDIT ALLOWED AS PART OF GENERAL BUSI-
NESS CREDIT.—Section 38(b) of such Code is amended 
by striking ‘‘plus’’ at the end of paragraph (32), by strik-
ing the period at the end of paragraph (33) and inserting 
‘‘, plus’’, and by adding at the end the following new para-
graph: 
‘‘(34) in the case of an eligible small employer 
(as defined in section 45U(c)), the military spouse 
retirement plan eligibility credit determined under 
section 45U(a).’’. 
(c) SPECIFIED CREDIT
FOR PURPOSES
OF CER-
TIFIED PROFESSIONAL EMPLOYER ORGANIZATIONS.— 
Section 3511(d)(2) of such Code is amended by redesig-
nating subparagraphs (F), (G), and (H) as subparagraphs 
(G), (H), and (I), respectively, and by inserting after sub-
paragraph (E) the following new subparagraph: 
‘‘(F) section 45U (military spouse retire-
ment plan eligibility credit),’’. 
(d) CLERICAL AMENDMENT.—The table of sections 
for subpart D of part IV of subchapter A of chapter 1 
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of such Code is amended by adding at the end the fol-
lowing new item: 
‘‘Sec. 45U. Military spouse retirement plan eligibility credit for small employ-
ers.’’. 
(e) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
the date of the enactment of this Act. 
SEC. 414. SMALL IMMEDIATE FINANCIAL INCENTIVES FOR 
CONTRIBUTING TO A PLAN. 
(a) IN GENERAL.—Subparagraph (A) of section 
401(k)(4) of the Internal Revenue Code of 1986 is amend-
ed by inserting ‘‘(other than a de minimis financial incen-
tive)’’ after ‘‘any other benefit’’. 
(b) SECTION 403(b) PLANS.—Subparagraph (A) of 
section 403(b)(12) of such Code, as amended by the pre-
ceding provisions of this Act, is amended by adding at the 
end the following: ‘‘A plan shall not fail to satisfy clause 
(ii) solely by reason of offering a de minimis financial in-
centive to employees to elect to have the employer make 
contributions pursuant to a salary reduction agreement.’’. 
(c) EXEMPTION FROM PROHIBITED TRANSACTION 
RULES.—Subsection (d) of section 4975 of such Code is 
amended by striking ‘‘or’’ at the end of paragraph (22), 
by striking the period at the end of paragraph (23) and 
inserting ‘‘, or’’, and by adding at the end the following 
new paragraph: 
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‘‘(24) the provision of a de minimis financial in-
centive described in section 401(k)(4)(A).’’. 
(d) AMENDMENT OF EMPLOYEE RETIREMENT IN-
COME SECURITY ACT OF 1974.—Subsection (b) of section 
408 of the Employee Retirement Income Security Act of 
1974 (29 U.S.C. 1108(b)) is amended by adding at the 
end the following new paragraph: 
‘‘(21) The provision of a de minimis financial 
incentive described in section 401(k)(4)(A) or sec-
tion 403(b)(12)(A) of the Internal Revenue Code of 
1986.’’. 
(e) EFFECTIVE DATE.—The amendments made by 
this section shall apply with respect to plan years begin-
ning after the date of enactment of this Act. 
SEC. 415. SAFE HARBOR FOR CORRECTIONS OF EMPLOYEE 
ELECTIVE DEFERRAL FAILURES. 
(a) IN GENERAL.—Section 414 of the Internal Rev-
enue Code of 1986 is amended by adding at the end the 
following new subsection: 
‘‘(aa) CORRECTING AUTOMATIC CONTRIBUTION ER-
RORS.— 
‘‘(1) IN GENERAL.—Any plan or arrangement 
shall not fail to be treated as a plan described in 
sections 401(a), 403(b), 408, or 457(b), as applica-
ble, solely by reason of a corrected error. 
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‘‘(2) CORRECTED ERROR DEFINED.—For pur-
poses of this subsection, the term ‘corrected error’ 
means a reasonable administrative error in imple-
menting an automatic enrollment or automatic esca-
lation feature in accordance with the terms of an eli-
gible automatic contribution arrangement (as de-
fined under subsection (w)(3)), provided that such 
implementation error— 
‘‘(A) is corrected by the date that is 91⁄2 
months after the end of the plan year during 
which the error occurred, 
‘‘(B) is corrected in a manner that is fa-
vorable to the participant, and 
‘‘(C) is of a type which is so corrected for 
all similarly situated participants in a non-
discriminatory manner. 
Such correction may occur before or after the partic-
ipant has terminated employment and may occur 
without regard to whether the error is identified by 
the Secretary. 
‘‘(3) REGULATIONS AND GUIDANCE FOR FAVOR-
ABLE CORRECTION METHODS.—The Secretary shall, 
by regulations or other guidance of general applica-
bility, specify the correction methods that are in a 
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manner favorable to the participant for purposes of 
paragraph (2)(B).’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply with respect to any errors with 
respect to which the date referred to in section 414(aa) 
(as added by this section) is after the date of enactment 
of this Act. 
SEC. 416. IMPROVING COVERAGE FOR PART-TIME WORK-
ERS. 
(a) IN GENERAL.—Section 202 of the Employee Re-
tirement Income Security Act of 1974 (29 U.S.C. 1052) 
is amended by adding at the end the following new sub-
section: 
‘‘(c) SPECIAL RULE FOR CERTAIN PART-TIME EM-
PLOYEES.— 
‘‘(1) IN
GENERAL.—A pension plan that in-
cludes either a qualified cash or deferred arrange-
ment (as defined in section 401(k) of the Internal 
Revenue Code of 1986) or a salary reduction agree-
ment (as described in section 403(b) of such Code) 
shall not require, as a condition of participation in 
the arrangement or agreement, that an employee 
complete a period of service with the employer (or 
employers) maintaining the plan extending beyond 
the close of the earlier of— 
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‘‘(A) the period permitted under subsection 
(a)(1) (determined without regard to subpara-
graph (B)(i) thereof); or 
‘‘(B) the first 24-month period— 
‘‘(i) consisting of 2 consecutive 12- 
month periods during each of which the 
employee has at least 500 hours of service; 
and 
‘‘(ii) by the close of which the em-
ployee has attained the age of 21. 
‘‘(2) EXCEPTION.—Paragraph (1)(B) shall not 
apply to any employee described in section 410(b)(3) 
of the Internal Revenue Code of 1986. 
‘‘(3) COORDINATION WITH OTHER RULES.— 
‘‘(A) IN GENERAL.—In the case of employ-
ees who are eligible to participate in the ar-
rangement or agreement solely by reason of 
paragraph (1)(B): 
‘‘(i) EXCLUSIONS.—An employer may 
elect to exclude such employees from the 
application of subsections (a)(4), (k)(3), 
(k)(12), (k)(13), and (m)(2) of section 401 
of the Internal Revenue Code of 1986 and 
section 410(b) of such Code. 
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‘‘(ii) NONDISCRIMINATION
RULES.— 
Notwithstanding paragraph (1), section 
401(k)(15)(B)(i)(I) of such Code shall 
apply. 
‘‘(iii) TIME OF PARTICIPATION.—The 
rules of subsection (a)(4) shall apply to 
such employees. 
‘‘(B) TOP-HEAVY
RULES.—An employer 
may elect to exclude all employees who are eligi-
ble to participate in a plan maintained by the 
employer solely by reason of paragraph (1)(B) 
from the application of the vesting and benefit 
requirements under subsections (b) and (c) of 
section 416 of the Internal Revenue Code of 
1986. 
‘‘(4) 12-MONTH PERIOD.—For purposes of this 
subsection, 12-month periods shall be determined in 
the same manner as under the last sentence of sub-
section (a)(3)(A), except that 12-month periods be-
ginning before January 1, 2023, shall not be taken 
into account.’’ 
(b) VESTING.—Section 203(b) of the Employee Re-
tirement Income Security Act of 1974 (29 U.S.C. 
1053(a)) is amended by redesignating paragraph (4) as 
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paragraph (5) and by inserting after paragraph (3) the 
following new paragraph: 
‘‘(4) PART-TIME EMPLOYEES.—For purposes of 
determining whether an employee who is eligible to 
participate in a qualified cash or deferred arrange-
ment or a salary reduction agreement under a plan 
solely by reason of section 202(c)(1)(B) has a non-
forfeitable right to employer contributions— 
‘‘(A) except as provided in subparagraph 
(B), each 12-month period for which the em-
ployee has at least 500 hours of service shall be 
treated as a year of service; and 
‘‘(B) paragraph (3) shall be applied by 
substituting ‘at least 500 hours of service’ for 
‘more than 500 hours of service’ in subpara-
graph (A) thereof. 
For purposes of this paragraph, 12-month periods 
shall be determined in the same manner as under 
the last sentence of section 202(a)(3)(A), except that 
12-month periods beginning before January 1, 2023, 
shall not be taken into account.’’. 
(c) REDUCTION IN PERIOD SERVICE REQUIREMENT 
FOR
QUALIFIED
CASH
AND
DEFERRED
ARRANGE-
MENTS.—Section 401(k)(2)(D)(ii) of the Internal Revenue 
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Code of 1986 is amended by striking ‘‘3’’ and inserting 
‘‘2’’. 
(d) PRE-2021 SERVICE.—Section 112(b) of the Set-
ting Every Community Up for Retirement Enhancement 
Act of 2019 (26 U.S.C. 401 note) is amended by striking 
‘‘section 401(k)(2)(D)(ii)’’ and inserting ‘‘paragraphs 
(2)(D)(ii) and (15)(B)(iii) of section 401(k)’’. 
(e) EFFECTIVE DATES.— 
(1) IN GENERAL.—Except as provided in para-
graph (2), the amendments made by this section 
shall apply to plan years beginning after December 
31, 2024. 
(2) SUBSECTION
(D).—The amendment made 
by subsection (d) shall take effect as if included in 
the enactment of section 112 of the Setting Every 
Community Up for Retirement Enhancement Act of 
2019. 
SEC. 417. DEFERRAL OF TAX FOR CERTAIN SALES OF EM-
PLOYER STOCK TO EMPLOYEE STOCK OWN-
ERSHIP PLAN SPONSORED BY S CORPORA-
TION. 
(a) IN GENERAL.—Section 1042(c)(1)(A) of the In-
ternal Revenue Code of 1986 is amended by striking ‘‘do-
mestic C corporation’’ and inserting ‘‘domestic corpora-
tion’’. 
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(b) 10 PERCENT LIMITATION ON APPLICATION OF 
GAIN
ON SALE
OF S CORPORATION STOCK.—Section 
1042 of such Code is amended by adding at the end the 
following new subsection: 
‘‘(h) APPLICATION OF SECTION TO SALE OF STOCK 
IN S CORPORATION.—In the case of the sale of qualified 
securities of an S corporation, the election under sub-
section (a) may be made with respect to not more than 
10 percent of the amount realized on such sale for pur-
poses of determining the amount of gain not recognized 
and the extent to which (if at all) the amount realized 
on such sale exceeds the cost of qualified replacement 
property. The portion of adjusted basis that is properly 
allocable to the portion of the amount realized with respect 
to which the election is made under this subsection shall 
be taken into account for purposes of the preceding sen-
tence.’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to sales after December 31, 2029. 
SEC. 418. CERTAIN SECURITIES TREATED AS PUBLICLY 
TRADED IN CASE OF EMPLOYEE STOCK OWN-
ERSHIP PLANS. 
(a) IN GENERAL.—Section 401(a)(35) of the Internal 
Revenue Code of 1986 is amended by adding at the end 
the following new subparagraph: 
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‘‘(I) ESOP RULES RELATING TO PUBLICLY 
TRADED SECURITIES.—In the case of an appli-
cable defined contribution plan which is an em-
ployee stock ownership plan, an employer secu-
rity shall be treated as described in subpara-
graph (G)(v) if— 
‘‘(i) the security is the subject of 
priced quotations by at least 4 dealers, 
published and made continuously available 
on an interdealer quotation system (as 
such term is used in section 13 of the Se-
curities Exchange Act of 1934) which has 
made the request described in section 6(j) 
of such Act to be treated as an alternative 
trading system, 
‘‘(ii) the security is not a penny stock 
(as defined by section 3(a)(51) of such 
Act), 
‘‘(iii) the security is issued by a cor-
poration which is not a shell company (as 
such term is used in section 4(d)(6) of the 
Securities Act of 1933), a blank check 
company (as defined in section 7(b)(3) of 
such Act), or subject to bankruptcy pro-
ceedings, 
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‘‘(iv) the security has a public float 
(as such term is used in section 240.12b- 
2 of title 17, Code of Federal Regulations) 
which has a fair market value of at least 
$1,000,000 and constitutes at least 10 per-
cent of the total shares issued and out-
standing. 
‘‘(v) in the case of a security issued 
by a domestic corporation, the issuer pub-
lishes, not less frequently than annually, fi-
nancial statements audited by an inde-
pendent auditor registered with the Public 
Company Accounting Oversight Board es-
tablished under the Sarbanes-Oxley Act of 
2002, and 
‘‘(vi) in the case of a security issued 
by a foreign corporation, the security is 
represented by a depositary share (as de-
fined under section 240.12b-2 of title 17, 
Code of Federal Regulations), or is issued 
by a foreign corporation incorporated in 
Canada and readily tradeable on an estab-
lished securities market in Canada, and 
the issuer— 
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‘‘(I) is subject to, and in compli-
ance with, the reporting requirements 
of section 13 or 15(d) of the Securi-
ties Exchange Act of 1934 (15 U.S.C. 
78m or 78o(d)), 
‘‘(II) is subject to, and in compli-
ance with, the reporting requirements 
of section 230.257 of title 17, Code of 
Federal Regulations, or 
‘‘(III) is exempt from such re-
quirements under section 240.12g3– 
2(b) of title 17, Code of Federal Reg-
ulations.’’. 
(b) EFFECTIVE DATE.—The amendments made by 
this section shall apply to plan years beginning after De-
cember 31, 2029. 
SEC. 419. REMOVE REQUIRED MINIMUM DISTRIBUTION 
BARRIERS FOR LIFE ANNUITIES. 
(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: 
‘‘(J) CERTAIN
INCREASES
IN
PAYMENTS 
UNDER A COMMERCIAL ANNUITY.—Nothing in 
this section shall prohibit a commercial annuity 
(within the meaning of section 3405(e)(6)) that 
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is issued in connection with any eligible retire-
ment plan (within the meaning of section 
402(c)(8)(B), other than a defined benefit plan) 
from providing one or more of the following 
types of payments on or after the annuity start-
ing date: 
‘‘(i) annuity payments that increase 
by a constant percentage, applied not less 
frequently than annually, at a rate that is 
less than 5 percent per year, 
‘‘(ii) a lump sum payment that— 
‘‘(I) results in a shortening of the 
payment period with respect to an an-
nuity or a full or partial commutation 
of the future annuity payments, pro-
vided that such lump sum is deter-
mined 
using 
reasonable 
actuarial 
methods and assumptions, as deter-
mined in good faith by the issuer of 
the contract, or 
‘‘(II) accelerates the receipt of 
annuity payments that are scheduled 
to be received within the ensuing 12 
months, regardless of whether such 
acceleration shortens the payment pe-
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riod with respect to the annuity, re-
duces the dollar amount of benefits to 
be paid under the contract, or results 
in a suspension of annuity payments 
during the period being accelerated, 
‘‘(iii) an amount which is in the na-
ture of a dividend or similar distribution, 
provided that the issuer of the contract de-
termines such amount based on a reason-
able comparison of the actuarial factors as-
sumed when calculating the initial annuity 
payments and the issuer’s experience with 
respect to those factors, or 
‘‘(iv) a final payment upon death that 
does not exceed the excess of the total 
amount of the consideration paid for the 
annuity payments, less the aggregate 
amount of prior distributions or payments 
from or under the contract.’’. 
(b) EFFECTIVE DATE.—This section shall apply to 
calendar years ending after the date of the enactment of 
this Act. 
SEC. 420. QUALIFYING LONGEVITY ANNUITY CONTRACTS. 
(a) IN GENERAL.—Not later than the date which is 
1 year after the date of the enactment of this Act, the 
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Secretary of the Treasury or the Secretary’s delegate 
(hereafter in this section referred to as the ‘‘Secretary’’) 
shall amend the regulation issued by the Department of 
the Treasury relating to ‘‘Longevity Annuity Contracts’’ 
(79 Fed. Reg. 37633 (July 2, 2014)), as follows: 
(1) REPEAL 25-PERCENT PREMIUM LIMIT.—The 
Secretary shall amend Q&A–17(b)(3) of Treasury 
Regulation section 1.401(a)(9)–6 and Q&A–12(b)(3) 
of Treasury Regulation section 1.408–8 to eliminate 
the requirement that premiums for qualifying lon-
gevity annuity contracts be limited to a percentage 
of an individual’s account balance, and to make such 
corresponding changes to the regulations and related 
forms as are necessary to reflect the elimination of 
this requirement. 
(2) FACILITATE JOINT AND SURVIVOR BENE-
FITS.—The Secretary shall amend Q&A–17(c) of 
Treasury Regulation section 1.401(a)(9)–6, and 
make such corresponding changes to the regulations 
and related forms as are necessary, to provide that, 
in the case of a qualifying longevity annuity contract 
which was purchased with joint and survivor annuity 
benefits for the individual and the individual’s 
spouse which were permissible under the regulations 
at the time the contract was originally purchased, a 
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divorce occurring after the original purchase and be-
fore the annuity payments commence under the con-
tract will not affect the permissibility of the joint 
and survivor annuity benefits or other benefits under 
the contract, or require any adjustment to the 
amount or duration of benefits payable under the 
contract, provided that any qualified domestic rela-
tions order (within the meaning of section 414(p) of 
the Internal Revenue Code of 1986) or, in the case 
of an arrangement not subject to section 414(p) of 
such Code or section 206(d) of the Employee Retire-
ment Income Security Act of 1974 (29 U.S.C. 
1056(d)), any divorce or separation instrument (as 
defined in subsection (b))— 
(A) provides that the former spouse is en-
titled to the survivor benefits under the con-
tract; 
(B) does not modify the treatment of the 
former spouse as the beneficiary under the con-
tract who is entitled to the survivor benefits; or 
(C) does not modify the treatment of the 
former spouse as the measuring life for the sur-
vivor benefits under the contract. 
(3) PERMIT SHORT FREE LOOK PERIOD.—The 
Secretary shall amend Q&A–17(a)(4) of Treasury 
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Regulation section 1.401(a)(9)–6 to ensure that 
such Q&A does not preclude a contract from includ-
ing a provision under which an employee may re-
scind the purchase of the contract within a period 
not exceeding 90 days from the date of purchase. 
(b) DIVORCE OR SEPARATION INSTRUMENT.—For 
purposes of subsection (a)(2), the term ‘‘divorce or separa-
tion instrument’’ means— 
(1) a decree of divorce or separate maintenance 
or a written instrument incident to such a decree, 
(2) a written separation agreement, or 
(3) a decree (not described in paragraph (1)) 
requiring a spouse to make payments for the sup-
port or maintenance of the other spouse. 
(c) EFFECTIVE DATES, ENFORCEMENT, AND INTER-
PRETATIONS.— 
(1) EFFECTIVE DATES.— 
(A) Paragraph (1) of subsection (a) shall 
be effective with respect to contracts purchased 
or received in an exchange on or after the date 
of the enactment of this Act. 
(B) Paragraphs (2) and (3) of subsection 
(a) shall be effective with respect to contracts 
purchased or received in an exchange on or 
after July 2, 2016. 
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(2) ENFORCEMENT AND INTERPRETATIONS.— 
Prior to the date on which the Secretary issues final 
regulations pursuant to subsection (a)— 
(A) the Secretary (or delegate) shall ad-
minister and enforce the law in accordance with 
subsection (a) and the effective dates in para-
graph (1) of this subsection; and 
(B) taxpayers may rely upon their reason-
able good faith interpretations of subsection (a). 
(d) REGULATORY SUCCESSOR PROVISION.—Any ref-
erence to a regulation under this section shall be treated 
as including a reference to any successor regulation there-
to. 
SEC. 
421. 
INSURANCE-DEDICATED 
EXCHANGE-TRADED 
FUNDS. 
(a) IN GENERAL.—Not later than the date which is 
7 years after the date of the enactment of this Act, the 
Secretary of the Treasury (or the Secretary’s delegate) 
shall amend the regulation issued by the Department of 
the Treasury relating to ‘‘Income Tax; Diversification Re-
quirements for Variable Annuity, Endowment, and Life 
Insurance Contracts’’, 54 Fed. Reg. 8728 (March 2, 
1989), and make any necessary corresponding amend-
ments to other regulations, in order to facilitate the use 
of exchange-traded funds as investment options under 
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variable contracts within the meaning of section 817(d) 
of the Internal Revenue Code of 1986, in accordance with 
subsections (b) and (c) of this section. 
(b) DESIGNATE CERTAIN AUTHORIZED PARTICI-
PANTS AND MARKET MAKERS AS ELIGIBLE INVESTORS.— 
The Secretary of the Treasury (or the Secretary’s dele-
gate) shall amend Treasury Regulation section 1.817– 
5(f)(3) to provide that satisfaction of the requirements in 
Treasury Regulation section 1.817–5(f)(2)(i) with respect 
to an exchange-traded fund shall not be prevented by rea-
son of beneficial interests in such a fund being held by 
1 or more authorized participants or market makers. 
(c) DEFINE
RELEVANT
TERMS.—In amending 
Treasury Regulation section 1.817–5(f)(3) in accordance 
with subsections (b) of this section, the Secretary of the 
Treasury (or the Secretary’s delegate) shall provide defini-
tions consistent with the following: 
(1) EXCHANGE-TRADED FUND.—The term ‘‘ex-
change-traded fund’’ means a regulated investment 
company, partnership, or trust— 
(A) that is registered with the Securities 
and Exchange Commission as an open-end in-
vestment company or a unit investment trust; 
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(B) the shares of which can be purchased 
or redeemed directly from the fund only by an 
authorized participant; and 
(C) the shares of which are traded 
throughout the day on a national stock ex-
change at market prices that may or may not 
be the same as the net asset value of the 
shares. 
(2) AUTHORIZED
PARTICIPANT.—The term 
‘‘authorized participant’’ means a financial institu-
tion that is a member or participant of a clearing 
agency registered under section 17A(b) of the Secu-
rities Exchange Act of 1934 that enters into a con-
tractual relationship with an exchange-traded fund 
pursuant to which the financial institution is per-
mitted to purchase and redeem shares directly from 
the fund and to sell such shares to third parties, but 
only if the contractual arrangement or applicable law 
precludes the financial institution from— 
(A) purchasing the shares for its own in-
vestment purposes rather than for the exclusive 
purpose of creating and redeeming such shares 
on behalf of third parties; and 
(B) selling the shares to third parties who 
are not market makers or otherwise described 
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in paragraphs (2) and (3) of Treasury Regula-
tion section 1.817–5(f). 
(3) MARKET
MAKER.—The term ‘‘market 
maker’’ means a financial institution that is a reg-
istered broker or dealer under section 15(b) of the 
Securities Exchange Act of 1934 that maintains li-
quidity for an exchange-traded fund on a national 
stock exchange by being always ready to buy and sell 
shares of such fund on the market, but only if the 
financial institution is contractually or legally pre-
cluded from selling or buying such shares to or from 
persons who are not authorized participants or oth-
erwise described in paragraphs (2) and (3) of Treas-
ury Regulations section 1.817–5(f). 
(d) EFFECTIVE DATE.—Subsections (b) and (c) shall 
apply to segregated asset account investments made on 
or after the date that is 7 years after the date of the enact-
ment of this Act. 
SEC. 422. RECOVERY OF RETIREMENT PLAN OVERPAY-
MENTS. 
(a) OVERPAYMENTS UNDER ERISA.—Section 206 of 
the Employee Retirement Income Security Act of 1974 
(29 U.S.C. 1056) is amended by adding at the end the 
following new subsection: 
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‘‘(h) SPECIAL RULES APPLICABLE
TO BENEFIT 
OVERPAYMENTS.— 
‘‘(1) GENERAL RULE.—In the case of an inad-
vertent benefit overpayment by any pension plan, the 
responsible plan fiduciary shall not be considered to 
have failed to comply with the requirements of this 
title merely because such fiduciary determines, in 
the exercise of its fiduciary discretion, not to seek 
recovery of all or part of such overpayment from— 
‘‘(A) any participant or beneficiary, 
‘‘(B) any plan sponsor of, or contributing 
employer to— 
‘‘(i) an individual account plan, pro-
vided that the amount needed to prevent or 
restore any impermissible forfeiture from 
any participant’s or beneficiary’s account 
arising in connection with the overpayment 
is, separately from and independently of 
the overpayment, allocated to such account 
pursuant to the nonforfeitability require-
ments of section 203 (for example, out of 
the plan’s forfeiture account, additional 
employer contributions, or recoveries from 
those responsible for the overpayment), or 
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‘‘(ii) a defined benefit pension plan 
subject to the funding rules in part 3 of 
this subtitle B, unless the responsible plan 
fiduciary determines, in the exercise of its 
fiduciary discretion, that failure to recover 
all or part of the overpayment faster than 
required under such funding rules would 
materially affect the plan’s ability to pay 
benefits due to other participants and 
beneficiaries, or 
‘‘(C) any fiduciary of the plan, other than 
a fiduciary (including a plan sponsor or contrib-
uting employer acting in a fiduciary capacity) 
whose breach of its fiduciary duties resulted in 
such overpayment, provided that if the plan has 
established prudent procedures to prevent and 
minimize overpayment of benefits and the rel-
evant plan fiduciaries have followed such proce-
dures, an inadvertent benefit overpayment will 
not give rise to a breach of fiduciary duty. 
‘‘(2) REDUCTION
IN
FUTURE
BENEFIT
PAY-
MENTS
AND
RECOVERY
FROM
RESPONSIBLE 
PARTY.—Paragraph (1) shall not fail to apply with 
respect to any inadvertent benefit overpayment 
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merely because, after discovering such overpayment, 
the responsible plan fiduciary— 
‘‘(A) reduces future benefit payments to 
the correct amount provided for under the 
terms of the plan, or 
‘‘(B) seeks recovery from the person or 
persons responsible for the overpayment. 
‘‘(3) EMPLOYER
FUNDING
OBLIGATIONS.— 
Nothing in this subsection shall relieve an employer 
of any obligation imposed on it to make contribu-
tions to a plan to meet the minimum funding stand-
ards under part 3 of this subtitle B or to prevent 
or restore an impermissible forfeiture in accordance 
with section 203. 
‘‘(4) RECOUPMENT
FROM
PARTICIPANTS
AND 
BENEFICIARIES.—If the responsible plan fiduciary, 
in the exercise of its fiduciary discretion, decides to 
seek recoupment from a participant or beneficiary of 
all or part of an inadvertent benefit overpayment 
made by the plan to such participant or beneficiary, 
it may do so, subject to the following conditions: 
‘‘(A) No interest or other additional 
amounts (such as collection costs or fees) are 
sought on overpaid amounts for any period. 
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‘‘(B) If the plan seeks to recoup past over-
payments of a non-decreasing periodic benefit 
by reducing future benefit payments— 
‘‘(i) the reduction ceases after the 
plan has recovered the full dollar amount 
of the overpayment, 
‘‘(ii) the amount recouped each cal-
endar year does not exceed 10 percent of 
the full dollar amount of the overpayment, 
and 
‘‘(iii) future benefit payments are not 
reduced to below 90 percent of the periodic 
amount otherwise payable under the terms 
of the plan. 
Alternatively, if the plan seeks to recoup past 
overpayments of a non-decreasing periodic ben-
efit through one or more installment payments, 
the sum of such installment payments in any 
calendar year does not exceed the sum of the 
reductions that would be permitted in such year 
under the preceding sentence. 
‘‘(C) If the plan seeks to recoup past over-
payments of a benefit other than a non-decreas-
ing periodic benefit, the plan satisfies require-
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ments developed by the Secretary for purposes 
of this subparagraph. 
‘‘(D) Efforts to recoup overpayments are— 
‘‘(i) not accompanied by threats of 
litigation, unless the responsible plan fidu-
ciary reasonably believes it could prevail in 
a civil action brought in Federal or State 
court to recoup the overpayments, and 
‘‘(ii) not made through a collection 
agency or similar third party, unless the 
participant or beneficiary ignores or rejects 
efforts to recoup the overpayment following 
either a final judgment in Federal or State 
court or a settlement between the partici-
pant or beneficiary and the plan, in either 
case authorizing such recoupment. 
‘‘(E) Recoupment of past overpayments to 
a participant is not sought from any beneficiary 
of the participant, including a spouse, surviving 
spouse, former spouse, or other beneficiary. 
‘‘(F) Recoupment may not be sought if the 
first overpayment occurred more than 3 years 
before the participant or beneficiary is first no-
tified in writing of the error. 
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‘‘(G) A participant or beneficiary from 
whom recoupment is sought is entitled to con-
test all or part of the recoupment pursuant to 
the plan’s claims procedures. 
‘‘(H) In determining the amount of 
recoupment to seek, the responsible plan fidu-
ciary may take into account the hardship that 
recoupment likely would impose on the partici-
pant or beneficiary. 
‘‘(5) 
EFFECT
OF
CULPABILITY.—Subpara-
graphs (A) through (F) of paragraph (4) shall not 
apply to protect a participant or beneficiary who is 
culpable. For purposes of this paragraph, a partici-
pant or beneficiary is culpable if the individual bears 
responsibility for the overpayment (such as through 
misrepresentations or omissions that led to the over-
payment), or if the individual knew, or had good 
reason to know under the circumstances, that the 
benefit payment or payments were materially in ex-
cess of the correct amount. Notwithstanding the pre-
ceding sentence, an individual is not culpable merely 
because the individual believed the benefit payment 
or payments were or might be in excess of the cor-
rect amount, if the individual raised that question 
with an authorized plan representative and was told 
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the payment or payments were not in excess of the 
correct amount. With respect to a culpable partici-
pant or beneficiary, efforts to recoup overpayments 
shall not be made through threats of litigation, un-
less a lawyer for the plan could make the representa-
tions required under Rule 11 of the Federal Rules 
of Civil Procedure if the litigation were brought in 
Federal court.’’. 
(b) OVERPAYMENTS UNDER INTERNAL REVENUE 
CODE OF 1986.— 
(1) QUALIFICATION
REQUIREMENTS.—Section 
414 of the Internal Revenue Code of 1986, as 
amended by this preceding provisions of this Act, is 
amended by adding at the end the following new 
subsection: 
‘‘(bb) SPECIAL RULES APPLICABLE
TO BENEFIT 
OVERPAYMENTS.— 
‘‘(1) IN GENERAL.—A plan shall not fail to be 
treated as described in clause (i), (ii), (iii), or (iv) 
of section 219(g)(5)(A) (and shall not fail to be 
treated as satisfying the requirements of section 
401(a) or 403) merely because— 
‘‘(A) the plan fails to obtain payment from 
any participant, beneficiary, employer, plan 
sponsor, fiduciary, or other party on account of 
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any inadvertent benefit overpayment made by 
the plan, or 
‘‘(B) the plan sponsor amends the plan to 
increase past or future benefit payments to af-
fected participants and beneficiaries in order to 
adjust for prior inadvertent benefit overpay-
ments. 
‘‘(2) REDUCTION
IN
FUTURE
BENEFIT
PAY-
MENTS
AND
RECOVERY
FROM
RESPONSIBLE 
PARTY.—Paragraph (1) shall not fail to apply to a 
plan merely because, after discovering a benefit over-
payment, such plan— 
‘‘(A) reduces future benefit payments to 
the correct amount provided for under the 
terms of the plan, or 
‘‘(B) seeks recovery from the person or 
persons responsible for such overpayment. 
‘‘(3) EMPLOYER
FUNDING
OBLIGATIONS.— 
Nothing in this subsection shall relieve an employer 
of any obligation imposed on it to make contribu-
tions to a plan to meet the minimum funding stand-
ards under sections 412 and 430 or to prevent or re-
store an impermissible forfeiture in accordance with 
section 411. 
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‘‘(4) OBSERVANCE OF BENEFIT LIMITATIONS.— 
Notwithstanding paragraph (1), a plan to which 
paragraph (1) applies shall observe any limitations 
imposed on it by section 401(a)(17) or 415. The 
plan may enforce such limitations using any method 
approved by the Secretary of the Treasury for re-
couping benefits previously paid or allocations pre-
viously made in excess of such limitations. 
‘‘(5) COORDINATION WITH OTHER QUALIFICA-
TION REQUIREMENTS.—The Secretary of the Treas-
ury may issue regulations or other guidance of gen-
eral applicability specifying how benefit overpay-
ments and their recoupment or non-recoupment 
from a participant or beneficiary shall be taken into 
account for purposes of satisfying any requirement 
applicable to a plan to which paragraph (1) applies.’’ 
(2) ROLLOVERS.—Section 402(c) of such Code 
is amended by adding at the end the following new 
paragraph: 
‘‘(12) In the case of an inadvertent benefit 
overpayment 
from 
a 
plan 
to 
which 
section 
414(bb)(1) applies that is transferred to an eligible 
retirement plan by or on behalf of a participant or 
beneficiary— 
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‘‘(A) the portion of such overpayment with 
respect to which recoupment is not sought on 
behalf of the plan shall be treated as having 
been paid in an eligible rollover distribution if 
the payment would have been an eligible roll-
over distribution but for being an overpayment, 
and 
‘‘(B) the portion of such overpayment with 
respect to which recoupment is sought on behalf 
of the plan shall be permitted to be returned to 
such plan and in such case shall be treated as 
an eligible rollover distribution transferred to 
such plan by the participant or beneficiary who 
received such overpayment (and the plans mak-
ing and receiving such transfer shall be treated 
as permitting such transfer). 
In any case in which recoupment is sought on behalf 
of the plan but is disputed by the participant or ben-
eficiary who received such overpayment, such dispute 
shall be subject to the claims procedures of the plan 
that made such overpayment, such plan shall notify 
the plan receiving the rollover of such dispute, and 
the plan receiving the rollover shall retain such over-
payment on behalf of the participant or beneficiary 
(and shall be entitled to treat such overpayment as 
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plan assets) pending the outcome of such proce-
dures.’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply as of the date of the enactment 
of this Act. 
(d) CERTAIN ACTIONS BEFORE DATE OF ENACT-
MENT.—Plans, fiduciaries, employers, and plan sponsors 
are entitled to rely on— 
(1) a good faith interpretation of then existing 
administrative guidance for inadvertent benefit over-
payment recoupments and recoveries that com-
menced before the date of enactment of this Act, 
and 
(2) determinations made before the date of en-
actment of this Act by the responsible plan fidu-
ciary, in the exercise of its fiduciary discretion, not 
to seek recoupment or recovery of all or part of an 
inadvertent benefit overpayment. 
In the case of a benefit overpayment that occurred prior 
to the date of enactment of this Act, any installment pay-
ments by the participant or beneficiary to the plan or any 
reduction in periodic benefit payments to the participant 
or beneficiary, which were made in recoupment of such 
overpayment and which commenced prior to such date, 
may continue after such date. Nothing in this subsection 
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shall relieve a fiduciary from responsibility for an overpay-
ment that resulted from a breach of its fiduciary duties. 
SEC. 423. REDUCTION IN EXCISE TAX ON CERTAIN ACCU-
MULATIONS 
IN 
QUALIFIED 
RETIREMENT 
PLANS. 
(a) IN GENERAL.—Section 4974(a) of the Internal 
Revenue Code of 1986 is amended by striking ‘‘50 per-
cent’’ and inserting ‘‘25 percent’’. 
(b) REDUCTION IN EXCISE TAX ON FAILURES TO 
TAKE
REQUIRED
MINIMUM
DISTRIBUTIONS.—Section 
4974 of such Code is amended by adding at the end the 
following new subsection: 
‘‘(e) REDUCTION OF TAX IN CERTAIN CASES.— 
‘‘(1) REDUCTION.—In the case of a taxpayer 
who— 
‘‘(A) corrects, during the correction win-
dow, a shortfall of distributions from an indi-
vidual retirement plan which resulted in imposi-
tion of a tax under subsection (a), and 
‘‘(B) submits a return, during the correc-
tion window, reflecting such tax (as modified by 
this subsection), 
the first sentence of subsection (a) shall be applied 
by substituting ‘10 percent’ for ‘25 percent’. 
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‘‘(2) CORRECTION WINDOW.—For purposes of 
this subsection, the term ‘correction window’ means 
the period of time beginning on the date on which 
the tax under subsection (a) is imposed with respect 
to a shortfall of distributions from an individual re-
tirement plan, and ending on the earlier of— 
‘‘(A) the date on which the Secretary initi-
ates an audit, or otherwise demands payment, 
with respect to the shortfall of distributions, or 
‘‘(B) the last day of the second taxable 
year that begins after the end of the taxable 
year in which the tax under subsection (a) is 
imposed.’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2024. 
SEC. 424. PERFORMANCE BENCHMARKS FOR ASSET ALLO-
CATION FUNDS. 
(a) IN GENERAL.—Not later than 1 year after the 
date of enactment of this Act, the Secretary of Labor shall 
provide that, in the case of a designated investment alter-
native that contains a mix of asset classes, the adminis-
trator of a plan may, but is not required to, use a bench-
mark that is a blend of different broad-based securities 
market indices if— 
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(1) the blend is reasonably representative of the 
asset class holdings of the designated investment al-
ternative; 
(2) for purposes of determining the blend’s re-
turns for 1-, 5-, and 10-calendar-year periods (or for 
the life of the alternative, if shorter), the blend is 
modified at least once per year to reflect changes in 
the asset class holdings of the designated investment 
alternative; 
(3) the blend is furnished to participants and 
beneficiaries in a manner that is reasonably designed 
to be understandable; and 
(4) each securities market index that is used for 
an associated asset class would separately satisfy the 
requirements of such regulation for such asset class. 
(b) STUDY.—Not later than 3 years after the date 
of enactment of this Act, the Secretary of Labor shall de-
liver a report to the Committees on Finance and Health, 
Education, Labor, and Pensions of the Senate and the 
Committees on Ways and Means and Education and 
Labor of the House of Representatives regarding the utili-
zation, effectiveness, and participants’ understanding of 
the benchmarking requirements under this section. 
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SEC. 425. REVIEW AND REPORT TO CONGRESS RELATING 
TO REPORTING AND DISCLOSURE REQUIRE-
MENTS. 
(a) STUDY.—As soon as practicable after the date of 
enactment of this Act, the Secretary of Labor, the Sec-
retary of the Treasury, and the Director of the Pension 
Benefit Guaranty Corporation shall review the reporting 
and disclosure requirements as applicable to each such 
agency head, of— 
(1) the Employee Retirement Income Security 
Act of 1974 applicable to pension plans (as defined 
in section 3(2) of such Act (29 U.S.C. 1002(2)); and 
(2) the Internal Revenue Code of 1986 applica-
ble to qualified retirement plans (as defined in sec-
tion 4974(c) of such Code, without regard to para-
graphs (4) and (5) of such section). 
(b) REPORT.— 
(1) IN GENERAL.—Not later than 2 years after 
the date of enactment of this Act, the Secretary of 
Labor, the Secretary of the Treasury, and the Direc-
tor of the Pension Benefit Guaranty Corporation, 
jointly, and after consultation with a balanced group 
of participant and employer representatives, shall 
with respect to plans referenced in subsection (a) re-
port on the effectiveness of the applicable reporting 
and disclosure requirements and make such rec-
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ommendations as may be appropriate to the Com-
mittee on Education and Labor and the Committee 
on Ways and Means of the House of Representatives 
and the Committee on Health, Education, Labor, 
and Pensions and the Committee on Finance of the 
Senate to consolidate, simplify, standardize, and im-
prove such requirements so as to simplify reporting 
for such plans and ensure that plans can furnish 
and participants and beneficiaries timely receive and 
better understand the information they need to mon-
itor their plans, plan for retirement, and obtain the 
benefits they have earned. 
(2) ANALYSIS OF EFFECTIVENESS.—To assess 
the effectiveness of the applicable reporting and dis-
closure requirements, the report shall include an 
analysis, based on plan data, of how participants 
and beneficiaries are providing preferred contact in-
formation, the methods by which plan sponsors and 
plans are furnishing disclosures, and the rate at 
which participants and beneficiaries (grouped by key 
demographics) are receiving, accessing, under-
standing, and retaining disclosures. 
(3) COLLECTION OF INFORMATION.—The agen-
cies shall conduct appropriate surveys and data col-
lection to obtain any needed information. 
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SEC. 426. ELIMINATING UNNECESSARY PLAN REQUIRE-
MENTS RELATED TO UNENROLLED PARTICI-
PANTS. 
(a) AMENDMENT OF EMPLOYEE RETIREMENT IN-
COME SECURITY ACT OF 1974.— 
(1) IN GENERAL.—Part 1 of subtitle B of sub-
chapter I of the Employee Retirement Income Secu-
rity Act of 1974 is amended by redesignating section 
111 as section 112 and by inserting after section 
110 the following new section: 
‘‘SEC. 111. ELIMINATING UNNECESSARY PLAN REQUIRE-
MENTS RELATED TO UNENROLLED PARTICI-
PANTS. 
‘‘(a) IN GENERAL.—Notwithstanding any other pro-
vision of this title, with respect to any individual account 
plan, no disclosure, notice, or other plan document (other 
than the notices and documents described in paragraphs 
(1) and (2)) shall be required to be furnished under this 
title to any unenrolled participant if the unenrolled partici-
pant receives— 
‘‘(1) an annual reminder notice of such partici-
pant’s eligibility to participate in such plan and any 
applicable election deadlines under the plan; and 
‘‘(2) any document requested by such partici-
pant that the participant would be entitled to receive 
notwithstanding this section. 
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