I 
113TH CONGRESS 
2D SESSION 
H. R. 4376 
To amend the Internal Revenue Code of 1986 to modify safe harbor require-
ments applicable to automatic contribution arrangements, and for other 
purposes. 
IN THE HOUSE OF REPRESENTATIVES 
APRIL 2, 2014 
Mr. BRALEY of Iowa introduced the following bill; which was referred to the 
Committee on Ways and Means, and in addition to the Committee on 
Education and the Workforce, for a period to be subsequently determined 
by the Speaker, in each case for consideration of such provisions as fall 
within the jurisdiction of the committee concerned 
A BILL 
To amend the Internal Revenue Code of 1986 to modify 
safe harbor requirements applicable to automatic con-
tribution arrangements, and for other purposes. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Retirement Security 
Act of 2014’’. 
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SEC. 2. ELIMINATION OF DISINCENTIVE TO POOLING FOR 
MULTIPLE EMPLOYER PLANS. 
(a) IN GENERAL.—Not later than one year after the 
date of the enactment of this Act, the Secretary of the 
Treasury shall prescribe final regulations under which a 
plan described in section 413(c) of the Internal Revenue 
Code of 1986 may be treated as satisfying the qualifica-
tion requirements of section 401(a) of such Code despite 
the violation of such requirements with respect to one or 
more participating employers. Such rules may require that 
the portion of the plan attributable to such participating 
employers be spun off to plans maintained by such em-
ployers. 
SEC. 3. MODIFICATION OF ERISA RULES RELATING TO 
MULTIPLE EMPLOYER DEFINED CONTRIBU-
TION PLANS. 
(a) IN GENERAL.— 
(1) REQUIREMENT
OF
COMMON
INTEREST.— 
Section 3(2) of the Employee Retirement Income Se-
curity Act of 1974 is amended by adding at the end 
the following: 
‘‘(C)(i) A qualified multiple employer plan shall 
not fail to be treated as an employee pension benefit 
plan or pension plan solely because the employers 
sponsoring the plan share no common interest. 
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‘‘(ii) For purposes of this subparagraph, the 
term ‘qualified multiple employer plan’ means a plan 
described in section 413(c) of the Internal Revenue 
Code of 1986 which— 
‘‘(I) is an individual account plan with re-
spect to which the requirements of clauses (iii), 
(iv), and (v) are met, and 
‘‘(II) includes in its annual report required 
to be filed under section 104(a) the name and 
identifying information of each participating 
employer. 
‘‘(iii) The requirements of this clause are met 
if, under the plan, each participating employer re-
tains fiduciary responsibility for— 
‘‘(I) the selection and monitoring of the 
named fiduciary, and 
‘‘(II) the investment and management of 
the portion of the plan’s assets attributable to 
employees of the employer to the extent not 
otherwise delegated to another fiduciary. 
‘‘(iv) The requirements of this clause are met if, 
under the plan, a participating employer is not sub-
ject to unreasonable restrictions, fees, or penalties 
by reason of ceasing participation in, or otherwise 
transferring assets from, the plan. 
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‘‘(v) The requirements of this clause are met if 
each participating employer in the plan is an eligible 
employer as defined in section 408(p)(2)(C)(i) of the 
Internal Revenue Code of 1986, applied— 
‘‘(I) by substituting ‘500’ for ‘100’ in sub-
clause (I) thereof, 
‘‘(II) by substituting ‘5’ for ‘2’ each place 
it appears in subclause (II) thereof, and 
‘‘(III) without regard to the last sentence 
of subclause (II) thereof.’’. 
(2) SIMPLIFIED REPORTING FOR SMALL MUL-
TIPLE EMPLOYER PLANS.—Section 104(a) of such 
Act (29 U.S.C. 1024(a)) is amended by adding at 
the end the following: 
‘‘(7)(A) In the case of any eligible small multiple em-
ployer plan, the Secretary may by regulation— 
‘‘(i) prescribe simplified summary plan descrip-
tions, annual reports, and pension benefit state-
ments for purposes of section 102, 103, or 105, re-
spectively, and 
‘‘(ii) waive the requirement under section 
103(a)(3) to engage an independent qualified public 
accountant in cases where the Secretary determines 
it appropriate. 
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‘‘(B) For purposes of this paragraph, the term ‘eligi-
ble small multiple employer plan’ means, with respect to 
any plan year— 
‘‘(i) a qualified multiple employer plan, as de-
fined in section 3(2)(C)(ii), or 
‘‘(ii) any other plan described in section 413(c) 
of the Internal Revenue Code of 1986 that satisfies 
the requirements of clause (v) of section 3(2)(C).’’. 
(b) EFFECTIVE DATE.—The amendments made by 
this section shall apply to years beginning after December 
31, 2014. 
SEC. 4. SECURE DEFERRAL ARRANGEMENTS. 
(a) IN GENERAL.—Subsection (k) of section 401 of 
the Internal Revenue Code of 1986 is amended by adding 
at the end the following new paragraph: 
‘‘(14) ALTERNATIVE METHOD FOR SECURE DE-
FERRAL ARRANGEMENTS TO MEET NONDISCRIMINA-
TION REQUIREMENTS.— 
‘‘(A) IN GENERAL.—A secure deferral ar-
rangement shall be treated as meeting the re-
quirements of paragraph (3)(A)(ii). 
‘‘(B) 
SECURE
DEFERRAL
ARRANGE-
MENT.—For purposes of this paragraph, the 
term ‘secure deferral arrangement’ means any 
cash or deferred arrangement which meets the 
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requirements of subparagraphs (C), (D), and 
(E) of paragraph (13), except as modified by 
this paragraph. 
‘‘(C) QUALIFIED PERCENTAGE.—For pur-
poses of this paragraph, with respect to any 
employee, 
the 
term 
‘qualified 
percentage’ 
means, in lieu of the meaning given such term 
in paragraph (13)(C)(iii), any percentage deter-
mined under the arrangement if such percent-
age is applied uniformly and is— 
‘‘(i) at least 6 percent, but not greater 
than 10 percent, during the period ending 
on the last day of the first plan year which 
begins after the date on which the first 
elective contribution described in para-
graph (13)(C)(i) is made with respect to 
such employee, 
‘‘(ii) at least 8 percent during the 
first plan year following the plan year de-
scribed in clause (i), and 
‘‘(iii) at least 10 percent during any 
subsequent plan year. 
‘‘(D) MATCHING CONTRIBUTIONS.— 
‘‘(i) IN
GENERAL.—For purposes of 
this paragraph, an arrangement shall be 
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The rate of matching contribution for each 
incremental deferral must be at least as 
high as the rate specified in clause (i), and 
may be higher, so long as such rate does 
not increase as an employee’s rate of elec-
tive contributions increases.’’. 
(b) MATCHING CONTRIBUTIONS
AND EMPLOYEE 
CONTRIBUTIONS.—Subsection (m) of section 401 of the 
Internal Revenue Code of 1986 is amended by redesig-
nating paragraph (13) as paragraph (14) and by inserting 
after paragraph (12) the following new paragraph: 
‘‘(13) ALTERNATIVE METHOD FOR SECURE DE-
FERRAL
ARRANGEMENTS.—A defined contribution 
plan shall be treated as meeting the requirements of 
paragraph (2) with respect to matching contribu-
tions and employee contributions if the plan— 
‘‘(A) is a secure deferral arrangement (as 
defined in subsection (k)(14)), 
‘‘(B) meets the requirements of clauses (ii) 
and (iii) of paragraph (11)(B), and 
‘‘(C) provides that matching contributions 
on behalf of any employee may not be made 
with respect to an employee’s contributions or 
elective deferrals in excess of 10 percent of the 
employee’s compensation.’’. 
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(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to plan years beginning after De-
cember 31, 2014. 
SEC. 5. CREDIT FOR EMPLOYERS WITH RESPECT TO MODI-
FIED SAFE HARBOR REQUIREMENTS. 
(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: 
‘‘SEC. 45S. CREDIT FOR SMALL EMPLOYERS WITH RESPECT 
TO MODIFIED SAFE HARBOR REQUIREMENTS 
FOR AUTOMATIC CONTRIBUTION ARRANGE-
MENTS. 
‘‘(a) GENERAL RULE.—For purposes of section 38, 
in the case of a small employer, the safe harbor adoption 
credit determined under this section for any taxable year 
is the amount equal to the total of the employer’s match-
ing contributions under section 401(k)(14)(D) during the 
taxable year on behalf of employees who are not highly 
compensated employees, subject to the limitations of sub-
section (b). 
‘‘(b) LIMITATIONS.— 
‘‘(1) LIMITATION
WITH
RESPECT
TO
COM-
PENSATION.—The credit determined under sub-
section (a) with respect to contributions made on be-
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half of an employee who is not a highly compensated 
employee shall not exceed 2 percent of the com-
pensation of such employee for the taxable year. 
‘‘(2) LIMITATION WITH RESPECT TO YEARS OF 
PARTICIPATION.—Credit shall be determined under 
subsection (a) with respect to contributions made on 
behalf of an employee who is not a highly com-
pensated employee only during the first 5 years such 
employee participates in the qualified automatic con-
tribution arrangement. 
‘‘(c) DEFINITIONS.— 
‘‘(1) IN GENERAL.—Any term used in this sec-
tion which is also used in section 401(k)(14) shall 
have the same meaning as when used in such sec-
tion. 
‘‘(2) SMALL EMPLOYER.—The term ‘small em-
ployer’ means an eligible employer (as defined in 
section 408(p)(2)(C)(i)). 
‘‘(d) DENIAL OF DOUBLE BENEFIT.—No deduction 
shall be allowable under this title for any contribution with 
respect to which a credit is allowed under this section.’’. 
(b) CREDIT TO BE PART OF GENERAL BUSINESS 
CREDIT.—Subsection (b) of section 38 of the Internal 
Revenue Code of 1986 is amended— 
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(1) by striking ‘‘plus’’ at the end of paragraph 
(35), 
(2) by striking the period at the end of para-
graph (36) and inserting ‘‘, plus’’, and 
(3) by adding at the end the following new 
paragraph: 
‘‘(37) the safe harbor adoption credit deter-
mined under section 45S.’’. 
(c) CLERICAL AMENDMENT.—The table of sections 
for subpart D of part IV of subchapter A of chapter 1 
of the Internal Revenue Code of 1986 is amended by add-
ing after the item relating to section 45R the following 
new item: 
‘‘Sec. 45S. Credit for small employers with respect to modified safe harbor re-
quirements for automatic contribution arrangements.’’. 
(d) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years that include any 
portion of a plan year beginning after December 31, 2014. 
SEC. 6. MODIFICATION OF REGULATIONS. 
The Secretary of the Treasury shall promulgate regu-
lations or other guidance that— 
(1) simplify and clarify the rules regarding the 
timing of participant notices required under section 
401(k)(13)(E) of the Internal Revenue Code of 
1986, with specific application to— 
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(A) plans that allow employees to be eligi-
ble for participation immediately upon begin-
ning employment, and 
(B) employers with multiple payroll and 
administrative systems, and 
(2) simplify and clarify the automatic escalation 
rules 
under 
sections 
401(k)(13)(C)(iii) 
and 
401(k)(14)(C) of the Internal Revenue Code of 1986 
in the context of employers with multiple payroll and 
administrative systems. 
Such regulations or guidance shall address the particular 
case of employees within the same plan who are subject 
to different notice timing and different percentage require-
ments, and provide assistance for plan sponsors in man-
aging such cases. 
SEC. 7. OPPORTUNITY TO CLAIM THE SAVER’S CREDIT ON 
FORM 1040EZ. 
The Secretary of the Treasury shall modify the forms 
for the return of tax of individuals in order to allow indi-
viduals claiming the credit under section 25B of the Inter-
nal Revenue Code of 1986 to file (and claim such credit 
on) Form 1040EZ. 
Æ 
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