SEC. 113. 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 further amended by add-
ing at the end the following: ‘‘A plan shall not fail to sat-
isfy clause (ii) solely by reason of offering a de minimis 
financial incentive to employees to elect to have the em-
ployer 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: 
‘‘(24) the provision of a de minimis financial in-
centive 
described 
in 
section 
401(k)(4)(A) 
or 
403(b)(12)(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 
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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 
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. 114. 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. 
‘‘(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-
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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 failure 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 
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) 
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(as added by this section) is after the date of enactment 
of this Act. 
SEC. 115. ONE-YEAR REDUCTION IN PERIOD OF SERVICE 
REQUIREMENT FOR LONG-TERM, PART-TIME 
WORKERS. 
(a) IN GENERAL.—Section 401(k)(2)(D)(ii) of the 
Internal Revenue Code of 1986 is amended by striking 
‘‘3’’ and inserting ‘‘2’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall take effect as if included in the addition 
of section 401(k)(2)(D)(ii) of such Code by section 112 
of the Setting Every Community Up for Retirement En-
hancement Act of 2019. 
SEC. 116. GOVERNMENTAL PENSION PLANS MAY INCLUDE 
CERTAIN FIREFIGHTERS, EMERGENCY MED-
ICAL TECHNICIANS, AND PARAMEDICS. 
(a) INTERNAL REVENUE CODE OF 1986.—Section 
414(d) of the Internal Revenue Code of 1986 (relating to 
governmental plans) is amended by adding at the end the 
following: ‘‘The term ‘governmental plan’ also includes a 
plan which is established by a State or political subdivision 
thereof and maintained by a public safety agency (de-
scribed in section 501(c) and exempt from taxation under 
section 501(a)), and all of the participants of which are 
employees of such agency who are emergency response 
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providers (defined in section 2 of the Homeland Security 
Act of 2002 (6 U.S.C. 101)), substantially all of whose 
services as emergency response providers are in the per-
formance of firefighting services or out-of-hospital emer-
gency medical services for a political subdivision of a State 
under a contract between such public safety agency and 
the political subdivision of a State.’’. 
(b) EMPLOYEE RETIREMENT INCOME SECURITY ACT 
OF 1974.— 
(1) IN GENERAL.—Section 3(32) of the Em-
ployee Retirement Income Security Act of 1974 (29 
U.S.C. 1002(32)) is amended by adding at the end 
the following: ‘‘. The term ‘governmental plan’ also 
includes a plan which is established by a State or 
political subdivision thereof and maintained by a 
public safety agency (described in section 501(c) of 
the Internal Revenue Code of 1986 and exempt from 
taxation under section 501(a) of such Code), and all 
of the participants of which are employees of such 
agency who are emergency response providers (de-
fined in section 2 of the Homeland Security Act of 
2002 (6 U.S.C. 101)), substantially all of whose 
services as emergency response providers are in the 
performance of firefighting services or out-of-hos-
pital emergency medical services for a political sub-
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division of a State under a contract between such 
public safety agency and the political subdivision of 
a State.’’. 
(2) PBGC EXCEPTION.—Section 4021(b)(2) of 
such Act (29 U.S.C. 1321(b)(2)) is amended by 
striking ‘‘described in the last sentence of section 
3(32)’’ and inserting ‘‘described in either of the last 
two sentences of section 3(32).’’. 
(c) CONFORMING AMENDMENTS.— 
(1) Section 414(h)(2) of the Internal Revenue 
Code of 1986 is amended by striking ‘‘described in 
the last sentence of section 414(d) (relating to plans 
of Indian tribal governments)’’ and inserting ‘‘de-
scribed in either of the last two sentences of sub-
section (d)’’. 
(2) Section 415(b)(2)(H)(i) of such Code is 
amended by adding at the end the following: ‘‘or a 
public safety agency described in the last sentence of 
section 414(d),’’. 
(3) Section 415(b)(2)(H)(ii)(I) of such Code is 
amended by striking ‘‘or any political subdivision’’ 
and inserting ‘‘any political subdivision, or a public 
safety agency described in the last sentence of sec-
tion 414(d)’’. 
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(4) Section 415(b)(10)(A) of such Code is 
amended by striking ‘‘described in the last sentence 
of section 414(d) (relating to plans of Indian tribal 
governments)’’ and inserting ‘‘described in either of 
the last two sentences of section 414(d)’’. 
(d) EFFECTIVE DATE.—The amendment made by 
this section shall apply to plan years beginning after the 
date of the enactment of this Act. 
TITLE II—PRESERVATION OF 
INCOME 
SEC. 201. REMOVE REQUIRED MINIMUM DISTRIBUTION 
BARRIERS FOR LIFE ANNUITIES. 
(a) IN GENERAL.—Paragraph (9) of section 401(a) 
of the Internal Revenue Code of 1986 is amended by add-
ing 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 
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: 
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‘‘(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-
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, 
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‘‘(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) REGULATIONS AND ENFORCEMENT.— 
(1) REGULATIONS.—By the date that is one 
year after the date of enactment of this Act, the 
Secretary of the Treasury shall amend the regula-
tion issued by the Department of the Treasury relat-
ing to ‘‘Required Distributions from Retirement 
Plans’’, 69 Fed. Reg. 33288 (June 15, 2004), and 
make any corresponding amendments to other regu-
lations, in order to— 
(A) conform such regulations to subsection 
(a), including by eliminating the types of pay-
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ments described in subsection (a) from the 
scope of the requirement in Q&A–14(c) of 
Treasury Regulation section 1.401(a)(9)–6 that 
the total future expected payments must exceed 
the total value being annuitized; 
(B) amend Q&A–14(c) of Treasury Regu-
lation section 1.401(a)(9)–6 to provide that a 
commercial annuity that provides an initial pay-
ment that is at least equal to the initial pay-
ment that would be required from an individual 
account pursuant to Treasury Regulation sec-
tion 1.401(a)(9)–5 will be deemed to satisfy the 
requirement in Q&A–14(c) of Treasury Regula-
tion section 1.401(a)(9)–6 that the total future 
expected payments must exceed the total value 
being annuitized; and 
(C) amend Q&A–14(e)(3) of Treasury Reg-
ulation section 1.401(a)(9)–6 to provide that 
the total future expected payments under a 
commercial annuity are determined using the 
tables or other actuarial assumptions that the 
issuer of the contract actually uses in pricing 
the premiums and benefits with respect to the 
contract, provided that such tables or other ac-
tuarial assumptions are reasonable. 
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(2) ENFORCEMENT.—As of the date of enact-
ment of this Act, the Secretary of the Treasury shall 
administer and enforce the law in accordance with 
subsections (a) and (b). 
(c) EFFECTIVE DATE.—This section shall take effect 
on the date of the enactment of this Act. 
SEC. 202. 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 
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) INCREASE DOLLAR LIMITATION.— 
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(A) IN
GENERAL.—The Secretary shall 
amend Q&A–17(b)(2)(i) of Treasury Regulation 
section 1.401(a)(9)–6 and Q&A–12(b)(2)(i) of 
Treasury Regulation section 1.408–8 to in-
crease the dollar limitation on premiums for 
qualifying longevity annuity contracts from 
$125,000 to $200,000, and to make such cor-
responding changes to the regulations and re-
lated forms as are necessary to reflect this in-
crease in the dollar limitation. 
(B) ADJUSTMENTS FOR INFLATION.—The 
Secretary shall amend Q&A–17(d)(2)(i) of 
Treasury Regulation section 1.401(a)(9)–6 to 
provide that, in the case of calendar years be-
ginning on or after January 1 of the second 
year following the year of enactment of this 
Act, the $200,000 dollar limitation (as in-
creased by subparagraph (A)) will be adjusted 
at the same time and in the same manner as 
the limits are adjusted under section 415(d) of 
the Internal Revenue Code of 1986, except that 
the base period shall be the calendar quarter 
beginning July 1 of the year of enactment of 
this Act, and any increase to such dollar limita-
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tion which is not a multiple of $10,000 will be 
rounded to the next lowest multiple of $10,000. 
(3) 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 
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 any divorce 
or separation instrument (as defined in subsection 
(b))— 
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(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. 
(4) PERMIT SHORT FREE LOOK PERIOD.—The 
Secretary shall amend Q&A–17(a)(4) of Treasury 
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)(3), 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. 
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(c) EFFECTIVE DATES, ENFORCEMENT, AND INTER-
PRETATIONS.— 
(1) EFFECTIVE DATES.— 
(A) Paragraphs (1) and (2) 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 (3) and (4) of subsection 
(a) shall be effective with respect to contracts 
purchased or received in an exchange on or 
after July 2, 2014. 
(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). 
SEC. 
203. 
INSURANCE-DEDICATED 
EXCHANGE-TRADED 
FUNDS. 
(a) IN GENERAL.—Not later than the date which is 
1 year after the date of the enactment of this Act, the 
Secretary of the Treasury (or the Secretary’s delegate) 
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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 
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 Treas. Reg. section 1.817–5(f)(3) to 
provide that satisfaction of the requirements in Treas. 
Reg. section 1.817–5(f)(2)(i) with respect to an exchange- 
traded fund shall not be prevented by reason of beneficial 
interests in such a fund being held by 1 or more author-
ized participants or market makers. 
(c) CONFIRM THAT SIMILARITIES TO OTHER FUNDS 
ARE IRRELEVANT.—The Secretary of the Treasury (or 
the Secretary’s delegate) shall amend Treas. Reg. section 
1.817–5(f) to confirm that, for Federal income tax pur-
poses, a regulated investment company, partnership, or 
trust (including an exchange-traded fund) that satisfies 
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the requirements of Treas. Reg. section 1.817–5(f) (2) 
and (3) shall not be treated as owned by the holder of 
a variable contract pursuant to the principles of Rev. Rul. 
81–225, 1981–2 C.B. 12, merely because another regu-
lated investment company, partnership, trust, or similar 
investment vehicle follows the same investment strategy, 
has the same investment manager, or holds the same in-
vestments. 
(d) DEFINE
RELEVANT
TERMS.—In amending 
Treas. Reg. section 1.817–5(f)(3) in accordance with sub-
sections (b) and (c) 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; 
(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 
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