I 
110TH CONGRESS 
2D SESSION 
H. R. 5543 
To amend the Internal Revenue Code of 1986 and the Employee Retirement 
Income Security Act of 1974 to increase the retirement security of 
women and small business owners, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
MARCH 6, 2008 
Mr. ALLEN (for himself, Mr. ENGLISH of Pennsylvania, and Ms. BERKLEY) 
introduced the following bill; which was referred to the Committee on 
Ways and Means, and in addition to the Committee on Education and 
Labor, for a period to be subsequently determined by the Speaker, in 
each case for consideration of such provisions as fall within the jurisdic-
tion of the committee concerned 
A BILL 
To amend the Internal Revenue Code of 1986 and the Em-
ployee Retirement Income Security Act of 1974 to in-
crease the retirement security of women and small busi-
ness owners, 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; AMENDMENT OF 1986 CODE; 
TABLE OF CONTENTS. 
(a) SHORT TITLE.—This Act may be cited as the 
‘‘Women’s Retirement Security Act of 2008’’. 
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(b) AMENDMENT OF 1986 CODE.—Except as other-
wise expressly provided, whenever in this Act an amend-
ment or repeal is expressed in terms of an amendment 
to, or repeal of, a section or other provision, the reference 
shall be considered to be made to a section or other provi-
sion of the Internal Revenue Code of 1986. 
(c) TABLE OF CONTENTS.—The table of contents for 
this Act is as follows: 
Sec. 1. Short title; amendment of 1986 Code; table of contents. 
TITLE I—PROVISIONS TO INCREASE RETIREMENT SAVINGS 
Subtitle A—Employee Access to Retirement Savings at Work 
Sec. 101. Employees not covered by qualified retirement plans or arrangements 
entitled to participate in payroll deposit IRA arrangements. 
Sec. 102. Credit for small employers maintaining payroll deposit IRA arrange-
ments. 
Sec. 103. Establishment of automatic IRAs. 
Sec. 104. Establishment of TSP II Board. 
Subtitle B—Other Provisions 
Sec. 111. Modifications to computation of saver’s credit; saver’s credit made re-
fundable. 
Sec. 112. Qualified cash or deferred arrangements must allow long-term em-
ployees working more than 500 but less than 1,000 hours per 
year to participate. 
Sec. 113. Transfers of unused benefits of health flexible spending arrangement 
to certain retirement plans. 
Sec. 114. Computation of limits on IRA and Roth IRA contributions. 
TITLE II—PROVISIONS PROVIDING FOR PRESERVATION OF 
INCOME 
Sec. 201. Exclusion of certain qualified annuity payments. 
Sec. 202. Exclusion for lifetime annuity payments. 
Sec. 203. Joint study of application of spousal consent rules to defined con-
tribution plans. 
Sec. 204. Facilitating longevity insurance. 
TITLE III—PROVISIONS ENSURING EQUITY IN DIVORCE 
Sec. 301. Special rules relating to treatment of qualified domestic relations or-
ders. 
Sec. 302. Elimination of current connection requirement under Railroad Retire-
ment Act for certain survivors. 
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Sec. 303. Permitting divorced spouses and widows and widowers to remarry 
after turning 60 without a penalty under Railroad Retirement 
Act. 
TITLE IV—PROVISIONS TO IMPROVE FINANCIAL LITERACY 
Sec. 401. Grants to community-based taxpayer clinics to provide retirement 
savings advice. 
Sec. 402. Treatment of qualified retirement planning services. 
Sec. 403. Retirement handbook and retirement readiness checklist. 
TITLE V—INCENTIVES FOR SMALL BUSINESSES TO ESTABLISH 
AND MAINTAIN RETIREMENT PLANS FOR EMPLOYEES 
Sec. 501. Credit for qualified pension plan contributions of small employers. 
Sec. 502. Deduction for pension contributions allowed in computing net earn-
ings from self-employment. 
Sec. 503. Exemption of deferral-only qualified cash or deferred arrangements 
from top-heavy plan rules. 
Sec. 504. Extension of time for small pension plans to adopt required plan 
qualification amendments. 
TITLE VI—PROVISIONS RELATING TO LONG-TERM CARE 
INSURANCE 
Sec. 601. Treatment of premiums on qualified long-term care insurance con-
tracts. 
Sec. 602. Credit for taxpayers with long-term care needs. 
Sec. 603. Additional consumer protections for long-term care insurance. 
Sec. 604. Treatment of exchanges of long-term care insurance contracts. 
TITLE 
I—PROVISIONS 
TO 
IN-
CREASE 
RETIREMENT 
SAV-
INGS 
Subtitle A—Employee Access to 
Retirement Savings at Work 
SEC. 101. EMPLOYEES NOT COVERED BY QUALIFIED RE-
TIREMENT PLANS OR ARRANGEMENTS ENTI-
TLED TO PARTICIPATE IN PAYROLL DEPOSIT 
IRA ARRANGEMENTS. 
(a) IN GENERAL.—Subpart A of part I of subchapter 
A of chapter 1 (relating to pension, profit-sharing, stock 
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bonus plans, etc.) is amended by inserting after section 
408A the following new section: 
‘‘SEC. 408B. RIGHT TO PAYROLL DEPOSIT IRA ARRANGE-
MENTS AT WORK. 
‘‘(a) REQUIREMENT TO PROVIDE PAYROLL DEPOSIT 
IRA ARRANGEMENT.—Each employer (other than an em-
ployer described in subsection (e)) shall provide to each 
applicable employee of the employer for any calendar year 
the opportunity to participate in a payroll deposit IRA ar-
rangement which meets the requirements of this section. 
‘‘(b) PAYROLL DEPOSIT IRA ARRANGEMENT.—For 
purposes of this section— 
‘‘(1) IN GENERAL.—The term ‘payroll deposit 
IRA arrangement’ means a written arrangement of 
an employer— 
‘‘(A) under which an applicable employee 
eligible to participate in the arrangement may 
elect to contribute to an individual retirement 
plan established by or on behalf of the employee 
by having the employer make periodic direct de-
posit or other payroll deposit payments (includ-
ing electronic payments) to the plan by payroll 
deduction, and 
‘‘(B) which meets the requirements of 
paragraph (2). 
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‘‘(2) ADMINISTRATIVE
REQUIREMENTS.—The 
requirements of this paragraph are met with respect 
to any payroll deposit IRA arrangement if— 
‘‘(A) the employer must make the pay-
ments elected under paragraph (1)(A) on or be-
fore the later of— 
‘‘(i) the due date for the deposit of 
tax required to be deducted and withheld 
under chapter 24 (relating to collection of 
income tax at source on wages) for the 
payroll period to which such payments re-
late, or 
‘‘(ii) the 30th day following the last 
day of the month with respect to which the 
payments are to be made, 
‘‘(B) subject to a requirement for reason-
able notice, an employee may elect to terminate 
participation in the arrangement at any time 
during a calendar year, except that if an em-
ployee so terminates, the arrangement may pro-
vide that the employee may not elect to resume 
participation until the beginning of the next cal-
endar year, 
‘‘(C) each employee eligible to participate 
may elect, during the 60-day period or other pe-
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‘‘(I) the plan or arrangement is 
frozen as of the first day of the pre-
ceding calendar year, or 
‘‘(II) in the case of a plan or ar-
rangement under which the only con-
tributions are discretionary on the 
part of the sponsor, there has not 
been an employer contribution made 
to the plan or arrangement for the 2- 
plan-year period ending with the last 
plan year ending in the second pre-
ceding calendar year and it is not rea-
sonable to assume that an employer 
contribution will be made for the plan 
year ending in the preceding calendar 
year. 
‘‘(2) EXCLUDABLE EMPLOYEES.—An employer 
may elect to exclude from treatment as applicable 
employees under paragraph (1)— 
‘‘(A) 
employees 
described 
in 
section 
410(b)(3), 
‘‘(B) employees who have not attained the 
age of 18 before the beginning of the calendar 
year, 
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‘‘(C) employees who have not completed at 
least 3 months of service with the employer, 
‘‘(D) in the case of an employer that main-
tains a qualified plan or arrangement which 
generally excludes employees who have not sat-
isfied the eligibility requirements described in 
section 410(a)(1)(A) (without regard to section 
410(a)(1)(B)), employees who have not yet sat-
isfied such requirements, 
‘‘(E) employees who are eligible to make 
salary reduction contributions under an ar-
rangement which meets the requirements of 
section 403(b), and 
‘‘(F) all employees of the employer if the 
employer maintains an arrangement described 
in section 408(p). 
‘‘(3) QUALIFIED
PLAN
OR
ARRANGEMENT.— 
The term ‘qualified plan or arrangement’ means a 
plan, contract, pension, or trust described in section 
219(g)(5). 
‘‘(4) EXCEPTION FOR EMPLOYEES OF GOVERN-
MENTS AND CHURCHES.—The term ‘applicable em-
ployee’ shall not include an employee of— 
‘‘(A) a government or entity described in 
section 414(d), or 
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‘‘(B) a church or a convention or associa-
tion of churches which is exempt from tax 
under section 501, including any employee de-
scribed in section 414(e)(3)(B). 
‘‘(5) DESIGNATION
OF
APPLICABLE
EMPLOY-
EES.—The Secretary shall issue guidelines for deter-
mining the class or classes of employees to be cov-
ered by a payroll deposit IRA arrangement. Such 
guidelines shall provide that if an employer elects 
under paragraph (2) to exclude employees from the 
arrangement, the employer shall specify the classi-
fication or categories of employees who are not so 
covered. 
‘‘(d) PAYROLL
DEPOSIT
IRA CONTRIBUTIONS 
TREATED LIKE OTHER CONTRIBUTIONS TO INDIVIDUAL 
RETIREMENT PLANS.— 
‘‘(1) TAX TREATMENT UNAFFECTED.—The fact 
that a contribution to an individual retirement plan 
is made on behalf of an employee under a payroll de-
posit IRA arrangement instead of being made di-
rectly by the employee shall not affect the deduct-
ibility or other tax treatment of the contribution or 
of other amounts under this title. 
‘‘(2) PAYROLL SAVINGS CONTRIBUTIONS TAKEN 
INTO ACCOUNT.—Any contribution made on behalf 
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of an employee under a payroll deposit IRA arrange-
ment shall be taken into account in applying the lim-
itations on contributions to individual retirement 
plans and the other provisions of this title applicable 
to individual retirement plans as if the contribution 
had been made directly by the employee. 
‘‘(e) EXCEPTION FOR CERTAIN SMALL AND NEW 
EMPLOYERS.— 
‘‘(1) IN GENERAL.—The requirements of this 
section shall not apply for any calendar year to an 
employer if— 
‘‘(A) the employer did not have more than 
10 employees who received at least $5,000 of 
compensation from the employer for the pre-
ceding calendar year, or 
‘‘(B) was not in existence at all times dur-
ing the 2 preceding calendar years and did not 
have more than 100 employees who received at 
least $5,000 of compensation from the employer 
on any day during either of the 2 preceding cal-
endar years. 
‘‘(2) OPERATING RULES.—In determining the 
number of employees for purposes of this sub-
section— 
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‘‘(A) any rule applicable in determining the 
number of employees for purposes of section 
408(p)(2)(C) shall be applicable under this sub-
section, 
‘‘(B) all members of the same family 
(within the meaning of section 318(a)(1)) shall 
be treated as 1 individual, and 
‘‘(C) any reference to an employer shall in-
clude a reference to any predecessor employer. 
‘‘(f) DEPOSITS TO INDIVIDUAL RETIREMENT PLANS 
OTHER THAN THOSE SELECTED BY EMPLOYEE.— 
‘‘(1) IN GENERAL.—An employer shall not be 
treated as failing to satisfy the requirements of this 
section or any other provision of this title merely be-
cause the employer makes all contributions (or all 
contributions on behalf of employees who do not 
specify an individual retirement plan, trustee, or 
issuer to receive the contributions) to individual re-
tirement plans specified in paragraph (2) or (4). 
‘‘(2) PLANS OF A DESIGNATED TRUSTEE OR 
ISSUER.—An employer may elect to have contribu-
tions for all applicable employees participating in a 
payroll deposit IRA arrangement made to individual 
retirement plans of a designated trustee or issuer 
under the arrangement. The preceding sentence 
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shall not apply unless each participant is notified in 
writing that the participant’s balance may be trans-
ferred without cost or penalty to another individual 
retirement plan established by or on behalf of the 
participant. 
‘‘(3) PAYROLL TAX DEPOSIT PROCEDURE.—The 
Secretary, in consultation with the TSP II Board, 
shall establish a procedure under which an em-
ployer— 
‘‘(A) may include with each deposit of tax 
required to be deducted and withheld under 
chapter 24 the aggregate amounts, for the pe-
riod covered by the deposit, which applicable 
employees have designated under subsection 
(b)(1)(A) (or are deemed to have designated 
under subsection (b)(2)(F)(ii) or under an auto-
matic enrollment arrangement described in sub-
section (g)) for contribution to individual retire-
ment plans, established on behalf of the employ-
ees under paragraph (4), and 
‘‘(B) specifies, in such manner as the Sec-
retary may prescribe, the following information 
for each applicable employee for whom a con-
tribution is to be made: 
‘‘(i) The employee’s name and TIN. 
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‘‘(ii) The amount of the contribution. 
‘‘(iii) The investment options selected 
by the employee (or deemed to have been 
selected by the employee under such auto-
matic enrollment arrangement) and the 
amount of the contribution allocated to 
each option. 
‘‘(4) ESTABLISHMENT AND MAINTENANCE OF 
ACCOUNTS UNDER PAYROLL TAX DEPOSIT PROCE-
DURE.— 
‘‘(A) IN GENERAL.—Subject to the provi-
sions of this section and section 408C, the TSP 
II Board shall provide for the establishment 
and maintenance of individual retirement plans 
(including automatic IRAs) into which contribu-
tions may be deposited under paragraph (3). To 
the maximum extent practicable, the TSP II 
Board shall— 
‘‘(i) enter into contracts with persons 
eligible to be trustees of individual retire-
ment plans under section 408 to establish 
such plans, to provide the investment 
funds and investment management, and to 
provide notice, record keeping, and other 
administrative services, and 
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‘‘(ii) ensure that the costs of invest-
ment management and administration are 
kept to a minimum, including through con-
sideration of the use of investments which 
involve passive management and which 
seek to replicate the performance of a por-
tion of the market. 
‘‘(B) PAYROLL DEPOSIT FEATURES.—The 
TSP II Board shall establish procedures so that 
contributions may be made to individual retire-
ment plans (including automatic IRAs) under 
paragraph (3) without undue administrative or 
paperwork requirements on participating em-
ployers. Such procedures shall ensure that only 
1 such plan may be established for each TIN. 
‘‘(C) LIMITATION ON ROLLOVERS.—If— 
‘‘(i) any amount is paid or distributed 
out of an individual retirement plan estab-
lished under this paragraph, and 
‘‘(ii) such amount is paid into an indi-
vidual retirement plan which was not es-
tablished under this paragraph, 
the payment described in clause (ii) shall be 
treated as a rollover contribution for purposes 
of section 408(d)(3) if and only if the balance 
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to the credit of the individual in such individual 
retirement plan or arrangement immediately be-
fore the payment described in clause (i) was at 
least $15,000. 
‘‘(g) COORDINATION WITH AUTOMATIC ENROLL-
MENT AND OTHER DEFAULT ELECTION PROVISIONS.— 
‘‘(1) IN GENERAL.—Contributions under a pay-
roll deposit IRA arrangement may be made pursuant 
to an automatic enrollment arrangement. 
‘‘(2) 
AUTOMATIC
ENROLLMENT
ARRANGE-
MENT.—The term ‘automatic enrollment arrange-
ment’ means an arrangement under a payroll deposit 
IRA arrangement and subject to rules prescribed by 
the Secretary— 
‘‘(A) under which an individual may elect 
to have the employer make payments as con-
tributions to an individual account plan on be-
half of the individual, or to the individual di-
rectly in cash, 
‘‘(B) under which the individual is treated 
as having elected to have the employer make 
such contributions in an amount equal to a 
specified percentage of compensation or dollar 
amount until the individual specifically elects 
not to have such contributions made (or specifi-
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cally elects to have such contributions made at 
a different percentage or in a different 
amount), and 
‘‘(C) which meets notice requirements sub-
stantially similar to those described in section 
414(w)(4). 
‘‘(3) DEFAULT INVESTMENTS.—If an employee 
is deemed under an automatic enrollment arrange-
ment to have made an election to participate in a 
payroll deposit IRA arrangement— 
‘‘(A) the employee shall be deemed to have 
made an election to make contributions in the 
amount specified in paragraph (4), 
‘‘(B) such contributions shall be trans-
ferred to— 
‘‘(i) an automatic IRA, or 
‘‘(ii) if the employer has made an elec-
tion under subsection (f)(2), to an indi-
vidual retirement plan of the designated 
trustee or issuer but only if the require-
ments of subparagraph (C) are met with 
respect to such individual retirement plan, 
and 
‘‘(C) such contributions shall be invested 
as provided in paragraph (5). 
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‘‘(4) AMOUNT OF CONTRIBUTIONS.— 
‘‘(A) IN GENERAL.—The amount specified 
in this paragraph is 3 percent of compensation. 
‘‘(B) AUTHORITY OF BOARD TO PROVIDE 
FOR ANNUAL INCREASES.—The TSP II Board 
may by regulation provide for annual increases 
in the percentage of compensation an employee 
is deemed to have elected under paragraph (2) 
but in no event shall the percentage of com-
pensation an employee is deemed to have elect-
ed exceed 8 percent. 
‘‘(C) CONTRIBUTION
LIMIT.—The con-
tributions under paragraph (2) on behalf of an 
employee for any calendar year shall not exceed 
the dollar limits applicable to the employee for 
the calendar year under section 219 or 408A. 
‘‘(5) INVESTMENT
IN
LIFE
CYCLE
FUND
OR 
OTHER INVESTMENTS SPECIFIED BY THE BOARD.— 
Amounts contributed under paragraph (3) shall be 
invested in— 
‘‘(A) a life cycle fund similar to the life 
cycle funds offered under the Thrift Savings 
Fund established under subchapter III of chap-
ter 84 of title 5, United States Code, or 
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‘‘(B) such other investment or investments 
as the TSP II Board specifies in regulations 
(which shall be promulgated after taking into 
account, but not necessarily conforming to, reg-
ulations prescribed by the Secretary of Labor 
under section 404(c)(5) of the Employee Retire-
ment Income Security Act of 1974) and which 
entails asset allocation and extensive diversifica-
tion. 
‘‘(6) COORDINATION
WITH
WITHHOLDING.— 
The Secretary shall modify the withholding exemp-
tion certificate under section 3402(f) so that any no-
tice and election requirements with respect to an 
automatic enrollment arrangement which is part of 
a payroll deposit IRA arrangement may be met 
through the use of such certificate. 
‘‘(h) MODEL NOTICE.—The Secretary, in consulta-
tion with the TSP II Board, shall— 
‘‘(1) provide a model notice, written in a man-
ner calculated to be understandable to the average 
worker, that is simple for employers to use— 
‘‘(A) to notify employees of the require-
ment under this section for the employer to pro-
vide certain employees with the opportunity to 
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participate in a payroll deposit IRA arrange-
ment, and 
‘‘(B) to satisfy the requirements of sub-
section (b)(2)(D), 
‘‘(2) provide uniform forms for enrollment, in-
cluding automatic enrollment, in a payroll deposit 
IRA arrangement, and 
‘‘(3) establish a web site or other electronic 
means for small employers to access and use to ob-
tain information on payroll deposit IRA arrange-
ments and to obtain required notices and forms. 
‘‘(i) CROSS REFERENCE.—For provision preempting 
conflicting State laws, see section 2(g) of the Women’s Re-
tirement Security Act of 2008.’’. 
(b) NOTICE
OF
AVAILABILITY
OF
INVESTMENT 
GUIDELINES.—Section 408(i) (relating to reports) is 
amended by adding at the end the following new sentence: 
‘‘Any report furnished under paragraph (2) to an indi-
vidual shall include notice of the availability of, and meth-
ods of acquiring, the basic investment guidelines prepared 
by the Secretary of Labor.’’. 
(c) DEVELOPMENT OF BASIC INVESTMENT GUIDE-
LINES.— 
(1) IN
GENERAL.—The Secretary of Labor 
shall, in consultation with the Secretary of Treasury, 
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develop and publish basic guidelines for investing for 
retirement. Except as otherwise provided by the Sec-
retary of Labor, such guidelines shall include— 
(A) information on the benefits of diver-
sification, 
(B) information on the essential dif-
ferences, in terms of risk and return, between 
various pension plan investments, including 
stocks, bonds, mutual funds, and money market 
investments, 
(C) information on how an individual’s 
pension plan investment allocations may differ 
depending on the individual’s age and years to 
retirement and on other factors determined by 
the Secretary of Labor, 
(D) sources of information where individ-
uals may learn more about pension rights, indi-
vidual investing, and investment advice, and 
(E) such other information related to indi-
vidual investing as the Secretary of Labor de-
termines appropriate. 
(2) CALCULATION INFORMATION.—The guide-
lines under paragraph (1) shall include addresses for 
Internet sites and worksheets which a participant or 
beneficiary in a pension plan may use to calculate— 
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(A) the retirement age value of the partici-
pant’s or beneficiary’s nonforfeitable pension 
benefits under the plan (expressed as an annu-
ity amount and determined by reference to var-
ied historical annual rates of return and annu-
ity interest rates), and 
(B) other important amounts relating to 
retirement savings, including the amount which 
a participant or beneficiary would be required 
to save annually to provide a retirement income 
equal to various percentages of their current 
salary (adjusted for expected growth prior to 
retirement). 
(3) PUBLIC
COMMENT.—The Secretary of 
Labor shall provide at least 90 days for public com-
ment on proposed guidelines before publishing the 
final guidelines. 
(4) RULES
RELATING
TO
GUIDELINES.—The 
guidelines under paragraph (1)— 
(A) shall be written in a manner calculated 
to be understood by the average plan partici-
pant, and 
(B) may be delivered in written, electronic, 
or other appropriate manner to the extent such 
manner would ensure that the guidelines are 
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reasonably accessible to participants and bene-
ficiaries. 
(d) PENALTY FOR FAILURE TO PROVIDE ACCESS TO 
PAYROLL SAVINGS ARRANGEMENTS.—Chapter 43 (relat-
ing to qualified pension, etc., plans) is amended by adding 
at the end the following new section: 
‘‘SEC. 4980H. REQUIREMENTS FOR EMPLOYERS TO PRO-
VIDE EMPLOYEES ACCESS TO PAYROLL DE-
POSIT IRA ARRANGEMENTS. 
‘‘(a) GENERAL RULE.—There is hereby imposed a 
tax on any failure by an employer to meet the require-
ments of subsection (d) for a calendar year. 
‘‘(b) AMOUNT.— 
‘‘(1) IN GENERAL.—The amount of the tax im-
posed by subsection (a) on any failure for any cal-
endar year shall be $100 with respect to each em-
ployee to whom such failure relates. 
‘‘(2) TAX NOT TO APPLY WHERE FAILURE NOT 
DISCOVERED
AND
REASONABLE
DILIGENCE
EXER-
CISED.—No tax shall be imposed by subsection (a) 
on any failure during any period for which it is es-
tablished to the satisfaction of the Secretary that the 
employer subject to liability for the tax did not know 
that the failure existed and exercised reasonable dili-
gence to meet the requirements of subsection (d). In 
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no event shall the tax be imposed with respect to 
any failure that ends before the expiration of 90 
days after the employer has responded or has had a 
reasonable opportunity to respond to a request for 
confirmation of compliance under subsection (c). 
‘‘(3) TAX NOT TO APPLY TO FAILURES COR-
RECTED WITHIN 30 DAYS.—No tax shall be imposed 
by subsection (a) on any failure if— 
‘‘(A) the employer subject to liability for 
the tax under subsection (a) exercised reason-
able diligence to meet the requirements of sub-
section (d), and 
‘‘(B) the employer provides the payroll de-
posit IRA arrangement described in section 
408B to each employee eligible to participate in 
the arrangement by the end of the 30-day pe-
riod beginning on the first date the employer 
knew, or exercising reasonable diligence would 
have known, that such failure existed. 
‘‘(4) WAIVER BY SECRETARY.—In the case of a 
failure which is due to reasonable cause and not to 
willful neglect, the Secretary may waive part or all 
of the tax imposed by subsection (a) to the extent 
that the payment of such tax would be excessive or 
otherwise inequitable relative to the failure involved. 
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