(c) PREEMPTION OF CONFLICTING STATE LAWS.— 
Any law of a State shall be superseded if it would directly 
or indirectly prohibit or restrict an employer from creating 
or maintaining an automatic deferral IRA (as defined in 
section 408B of the Internal Revenue Service of 1986). 
(d) CLERICAL AMENDMENT.— 
(1) The table of sections for subpart A of part 
I of subchapter D of chapter 1 of the Internal Rev-
enue Code of 1986 is amended by inserting after the 
item relating to 408A the following new item: 
‘‘Sec. 408B. Automatic deferral IRAs.’’. 
(2) The table of sections for chapter 43 of such 
Code is amended by adding at the end the following 
new item: 
‘‘Sec. 4980J. Failure to make timely contributions under automatic deferral 
IRAs.’’. 
(e) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2015. 
SEC. 8. MODIFICATION OF AUTOMATIC ENROLLMENT SAFE 
HARBOR. 
(a) IN GENERAL.— 
(1) REMOVAL
OF
PERCENT
CAP.—Section 
401(k)(13)(C)(iii) of the Internal Revenue Code of 
1986 is amended by striking ‘‘, does not exceed 10 
percent, and is at least’’ and inserting ‘‘and is’’. 
VerDate Sep 11 2014 
20:50 Nov 23, 2015
Jkt 059200
PO 00000
Frm 00016
Fmt 6652
Sfmt 6201
E:\BILLS\H4067.IH
H4067
tkelley on DSK3SPTVN1PROD with BILLS
(2) CONFORMING AMENDMENTS.— 
(A) Section 401(k)(13)(C)(iii)(I) of such 
Code is amended by striking ‘‘3 percent’’ and 
inserting ‘‘at least 3 percent, but not greater 
than 10 percent,’’. 
(B) Section 401(k)(13)(C)(iii)(II) of such 
Code is amended by striking ‘‘4 percent’’ and 
inserting ‘‘at least 4 percent, but not greater 
than 15 percent,’’. 
(C) Section 401(k)(13)(C)(iii)(III) of such 
Code is amended by striking ‘‘5 percent’’ and 
inserting ‘‘at least 5 percent’’. 
(D) Section 401(k)(13)(C)(iii)(IV) of such 
Code is amended by striking ‘‘6 percent’’ and 
inserting ‘‘at least 6 percent’’. 
(b) EFFECTIVE DATE.—The amendments made by 
this section shall apply to plan years beginning after the 
date of enactment of this Act. 
SEC. 9. SECURE DEFERRAL ARRANGEMENTS. 
(a) IN GENERAL.—Section 401(k) 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.— 
VerDate Sep 11 2014 
20:50 Nov 23, 2015
Jkt 059200
PO 00000
Frm 00017
Fmt 6652
Sfmt 6201
E:\BILLS\H4067.IH
H4067
tkelley on DSK3SPTVN1PROD with BILLS
‘‘(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 
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, 
VerDate Sep 11 2014 
20:50 Nov 23, 2015
Jkt 059200
PO 00000
Frm 00018
Fmt 6652
Sfmt 6201
E:\BILLS\H4067.IH
H4067
tkelley on DSK3SPTVN1PROD with BILLS
‘‘(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 
treated as having met the requirements of 
paragraph (13)(D)(i) if and only if the em-
ployer makes matching contributions on 
behalf of each employee who is not a highly 
compensated employee in an amount equal 
to the sum of— 
‘‘(I) 100 percent of the elective 
contributions of the employee to the 
extent that such contributions do not 
exceed 1 percent of compensation, 
‘‘(II) 50 percent of so much of 
such contributions as exceed 1 percent 
but do not exceed 6 percent of com-
pensation, plus 
‘‘(III) 25 percent of so much of 
such contributions as exceed 6 percent 
VerDate Sep 11 2014 
20:50 Nov 23, 2015
Jkt 059200
PO 00000
Frm 00019
Fmt 6652
Sfmt 6201
E:\BILLS\H4067.IH
H4067
tkelley on DSK3SPTVN1PROD with BILLS
but do not exceed 10 percent of com-
pensation. 
‘‘(ii) APPLICATION
OF
RULES
FOR 
MATCHING CONTRIBUTIONS.—The rules of 
clause (ii) of paragraph (12)(B) and 
clauses (iii) and (iv) of paragraph (13)(D) 
shall apply for purposes of clause (i) but 
the rule of clause (iii) of paragraph 
(12)(B) shall not apply for such purposes. 
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.—Section 401(m) of the Internal Rev-
enue Code of 1986 is amended by redesignating 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— 
VerDate Sep 11 2014 
20:50 Nov 23, 2015
Jkt 059200
PO 00000
Frm 00020
Fmt 6652
Sfmt 6201
E:\BILLS\H4067.IH
H4067
tkelley on DSK3SPTVN1PROD with BILLS
‘‘(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.’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to plan years beginning after De-
cember 31, 2015. 
SEC. 10. 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 
VerDate Sep 11 2014 
20:50 Nov 23, 2015
Jkt 059200
PO 00000
Frm 00021
Fmt 6652
Sfmt 6201
E:\BILLS\H4067.IH
H4067
tkelley on DSK3SPTVN1PROD with BILLS
‘‘(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.—Section 38(b) of the Internal Revenue Code of 
1986 is amended— 
(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.’’. 
VerDate Sep 11 2014 
20:50 Nov 23, 2015
Jkt 059200
PO 00000
Frm 00023
Fmt 6652
Sfmt 6211
E:\BILLS\H4067.IH
H4067
tkelley on DSK3SPTVN1PROD with BILLS
(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, 2015. 
SEC. 11. 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— 
(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. 
VerDate Sep 11 2014 
20:50 Nov 23, 2015
Jkt 059200
PO 00000
Frm 00024
Fmt 6652
Sfmt 6201
E:\BILLS\H4067.IH
H4067
tkelley on DSK3SPTVN1PROD with BILLS
SEC. 12. LIMITED TRANSFER OF UNUSED BALANCE IN 
FLEXIBLE SPENDING ARRANGEMENT. 
(a) IN GENERAL.—Section 125 of the Internal Rev-
enue Code of 1986 is amended by redesignating sub-
sections (k) and (l) as subsections (l) and (m), respec-
tively, and by inserting after subsection (h) the following 
new subsection: 
‘‘(k) SPECIAL RULE
FOR UNUSED BENEFITS
IN 
FLEXIBLE SPENDING ARRANGEMENTS.— 
‘‘(1) IN GENERAL.—For purposes of this title, 
a plan or other arrangement shall not fail to be 
treated as a cafeteria plan or flexible spending ar-
rangement merely because such arrangement pro-
vides for qualified retirement distributions. 
‘‘(2) QUALIFIED RETIREMENT DISTRIBUTION.— 
‘‘(A) IN GENERAL.—For purposes of this 
section, the term ‘qualified retirement distribu-
tion’ means any distribution to an individual of 
all or a portion of the employee’s account under 
such arrangement, but only to the extent— 
‘‘(i) the amount does not exceed the 
lesser of— 
‘‘(I) $250, or 
‘‘(II) the unused benefits with re-
spect to the arrangement, and 
VerDate Sep 11 2014 
20:50 Nov 23, 2015
Jkt 059200
PO 00000
Frm 00025
Fmt 6652
Sfmt 6201
E:\BILLS\H4067.IH
H4067
tkelley on DSK3SPTVN1PROD with BILLS
‘‘(ii) the amount received is paid in 
the form of a direct trustee-to-trustee 
transfer to a qualified retirement plan (as 
defined in section 4974(c)), or an eligible 
deferred compensation plan (as defined in 
section 457(b)) of an eligible employer de-
scribed in section 457(e)(1)(A), maintained 
by the same employer as the employer 
maintaining the cafeteria plan or flexible 
spending arrangement of the individual. 
‘‘(B) UNUSED
BENEFITS.—For purposes 
of this paragraph, the term ‘unused benefits’ 
means, with respect to an employee, the excess 
of— 
‘‘(i) the maximum amount of reim-
bursement allowable to the employee dur-
ing a plan year under a flexible spending 
arrangement, over 
‘‘(ii) the actual amount of reimburse-
ment during such year under such ar-
rangement. 
‘‘(C) SPECIAL RULES FOR TREATMENT OF 
CONTRIBUTIONS TO RETIREMENT PLANS.—For 
purposes of this title, qualified retirement dis-
tributions— 
VerDate Sep 11 2014 
20:50 Nov 23, 2015
Jkt 059200
PO 00000
Frm 00026
Fmt 6652
Sfmt 6201
E:\BILLS\H4067.IH
H4067
tkelley on DSK3SPTVN1PROD with BILLS
‘‘(i) shall be treated as elective defer-
rals (as defined in section 402(g)(3)) 
under an annuity contract described in sec-
tion 403(b), 
‘‘(ii) shall be treated as elective defer-
rals (as so defined) in the case of contribu-
tions to a qualified cash or deferred ar-
rangement (as defined in section 401(k)) 
under a plan which is described in section 
401(a) which includes a trust which is ex-
empt from tax under section 501(a), 
‘‘(iii) shall be treated as deferred com-
pensation in the case of contributions to an 
eligible deferred compensation plan (as de-
fined in section 457(b)) maintained by an 
employer described in section 457(e)(1)(A), 
and 
‘‘(iv) shall be treated in the manner 
designated for purposes of section 408 or 
408A in the case of contributions to an in-
dividual retirement plan.’’. 
(b) EFFECTIVE DATE.—The amendments made by 
this section shall apply to plan years ending after the date 
of the enactment of this Act. 
VerDate Sep 11 2014 
20:50 Nov 23, 2015
Jkt 059200
PO 00000
Frm 00027
Fmt 6652
Sfmt 6201
E:\BILLS\H4067.IH
H4067
tkelley on DSK3SPTVN1PROD with BILLS
SEC. 13. PRIOR YEARS COMPENSATION TAKEN INTO AC-
COUNT IN DETERMINING MAXIMUM RETIRE-
MENT SAVINGS DEDUCTION. 
(a) IN GENERAL.—Section 219(b)(1)(B) of the Inter-
nal Revenue Code of 1986 is amended by inserting ‘‘or 
the preceding taxable year’’ after ‘‘such taxable year’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to taxable years beginning after 
the date of the enactment of this Act. 
SEC. 14. EXPANDING SMALL EMPLOYER PENSION PLAN 
STARTUP COST CREDIT. 
(a) IN GENERAL.— 
(1) INCLUDING
STARTUP
COSTS
FOR
EM-
PLOYER-ESTABLISHED IRAS.—Section 45E(d)(2) of 
the Internal Revenue Code of 1986 is amended by 
striking ‘‘means a qualified employer plan’’ and all 
that follows and inserting: ‘‘means— 
‘‘(A) a qualified employer plan within the 
meaning of section 4972(d), and 
‘‘(B) a plan of which an automatic deferral 
IRA described in section 408B is a part.’’. 
(2) ADDITIONAL CREDIT AMOUNT.— 
(A) IN GENERAL.—Section 45E(a) of such 
Code is amended by striking ‘‘50 percent of’’ 
and all that follows and inserting ‘‘the sum of— 
VerDate Sep 11 2014 
20:50 Nov 23, 2015
Jkt 059200
PO 00000
Frm 00028
Fmt 6652
Sfmt 6201
E:\BILLS\H4067.IH
H4067
tkelley on DSK3SPTVN1PROD with BILLS
‘‘(1) the applicable percentage of the qualified 
startup costs paid or incurred by the taxpayer dur-
ing the taxable year, plus 
‘‘(2) $25 multiplied by the number of employees 
of the employer who participate in any eligible em-
ployer plan of the employer for the first time in such 
taxable year.’’. 
(B) APPLICABLE
PERCENTAGE.—Section 
45E(d) of such Code is amended by adding at 
the end the following new paragraph: 
‘‘(4) APPLICABLE PERCENTAGE.—The applica-
ble percentage is— 
‘‘(A) in the case of a plan described in sub-
section (d)(2)(A), 75 percent, or 
‘‘(B) in the case of a plan described in 
subsection (d)(2)(B), 50 percent.’’. 
(C) CONFORMING
AMENDMENT.—Section 
45E(c)(2) of such Code is amended— 
(i) by striking ‘‘qualified employer 
plan’’ in each place it appears and insert-
ing ‘‘eligible employer plan’’, and 
(ii) by striking ‘‘QUALIFIED’’ in the 
heading thereof and inserting ‘‘ELIGIBLE’’. 
(3) 
INCREASED
LIMITATION.—Section 
45E(b)(1) of such Code is amended by striking 
VerDate Sep 11 2014 
20:50 Nov 23, 2015
Jkt 059200
PO 00000
Frm 00029
Fmt 6652
Sfmt 6201
E:\BILLS\H4067.IH
H4067
tkelley on DSK3SPTVN1PROD with BILLS
‘‘$500’’ and inserting ‘‘$750 ($2,000 in the case of 
qualified startup costs attributable to a plan de-
scribed in subsection (d)(2)(A))’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to costs paid or incurred in taxable 
years beginning after the date of the enactment of this 
Act. 
SEC. 15. FINANCIAL EDUCATION. 
(a) RETIREMENT PLAN EDUCATION
FOR SMALL 
BUSINESSES.—Not later than 6 months after the date of 
the enactment of this Act— 
(1) the Department of the Treasury Office of 
Financial Education, in consultation with the De-
partment of Labor, shall develop and implement an 
outreach plan to educate small businesses on the 
types of retirement plans available and the benefits 
and requirements of such plans, and 
(2) the Secretary of the Treasury and the Sec-
retary of Labor shall develop recommendations for 
small businesses in order to improve retirement out-
comes. Such recommendations shall take into ac-
count established behavioral trends of employee in-
vestment and the effect of default design features 
such as auto escalation, expansion of auto rollovers, 
VerDate Sep 11 2014 
20:50 Nov 23, 2015
Jkt 059200
PO 00000
Frm 00030
Fmt 6652
Sfmt 6201
E:\BILLS\H4067.IH
H4067
tkelley on DSK3SPTVN1PROD with BILLS
auto diversification for near retirees, and automatic 
forms of distribution. 
(b) FINANCIAL LITERACY.— 
(1) IN GENERAL.—Not later than 1 year after 
the date of the enactment of this Act, the Secretary 
of the Treasury, in consultation with the Secretary 
of Education, shall develop sample age-appropriate 
curricula to be made available for financial literacy 
education in elementary and secondary schools. 
(2) CONTENT OF CURRICULA.—Such curricula 
shall include the following: 
(A) How to balance a checkbook, read a 
credit card statement, and calculate interest 
rates. 
(B) What a pay stub is and why Federal 
and State income taxes and Social Security and 
Medicare taxes are withheld from wages. 
(C) The differences between various types 
of bank accounts. 
(D) The significance of a credit score and 
how to read credit reports. 
(E) The marketing techniques frequently 
used by individuals and businesses to attract 
patrons. 
VerDate Sep 11 2014 
20:50 Nov 23, 2015
Jkt 059200
PO 00000
Frm 00031
Fmt 6652
Sfmt 6201
E:\BILLS\H4067.IH
H4067
tkelley on DSK3SPTVN1PROD with BILLS
(F) The importance of saving for college 
and retirement, including the various methods 
for saving such as traditional pensions, 401(k)s, 
and IRAs. 
SEC. 16. SMALL EMPLOYER PLANS. 
(a) IN GENERAL.—Section 401(k)(11) of the Inter-
nal Revenue Code of 1986 is amended by adding at the 
end the following new subparagraph: 
‘‘(E) DEFERRAL ONLY SMALL EMPLOYER 
PLAN.— 
‘‘(i) IN GENERAL.—In the case of a 
plan described in clause (ii)— 
‘‘(I) the amount described in sub-
paragraph (B)(i)(I) shall be $10,000, 
in lieu of the amount in effect under 
section 408(p)(2)(A)(ii), 
‘‘(II) such $10,000 amount shall, 
in the case years beginning after De-
cember 31, 2016, be adjusted as de-
scribed in section 408(p)(2)(E)(ii) ex-
cept that the base period taken into 
account shall be the calendar quarter 
beginning July 1, 2015, 
VerDate Sep 11 2014 
20:50 Nov 23, 2015
Jkt 059200
PO 00000
Frm 00032
Fmt 6652
Sfmt 6201
E:\BILLS\H4067.IH
H4067
tkelley on DSK3SPTVN1PROD with BILLS
‘‘(III) subclause (II) of subpara-
graph (B)(i) and clause (ii) of sub-
paragraph (B) shall not apply, and 
‘‘(IV) section 414(v) shall not 
apply. 
‘‘(ii) PLAN DESCRIBED.—A plan is de-
scribed in this clause if the plan satisfies 
the following requirements: 
‘‘(I) Such plan satisfies the re-
quirements of this paragraph, as 
modified by clause (i). 
‘‘(II) The plan includes a quali-
fied automatic contribution arrange-
ment, as defined in paragraph (13), 
except that subparagraph (D) of para-
graph (13) shall not apply and the 
qualified percentage shall be deter-
mined by reference to subclauses (I), 
(II), (III), and (IV) of paragraph 
(13)(C)(iii). 
‘‘(III) The plan does not permit 
any participant or beneficiary to re-
ceive or maintain a loan from the 
plan. 
VerDate Sep 11 2014 
20:50 Nov 23, 2015
Jkt 059200
PO 00000
Frm 00033
Fmt 6652
Sfmt 6201
E:\BILLS\H4067.IH
H4067
tkelley on DSK3SPTVN1PROD with BILLS
‘‘(IV) The plan does not permit 
hardship distributions described in 
paragraph (2)(B)(i)(IV) except to the 
extent 
any 
such 
distribution 
is 
deemed, under regulations prescribed 
by the Secretary, to be on account of 
an immediate and heavy financial 
need of the employee and necessary to 
satisfy an immediate and heavy finan-
cial need of the employee. 
‘‘(V) The plan is maintained pur-
suant to a model plan document pub-
lished by the Secretary.’’. 
(b) SIMPLIFICATION.— 
(1) MODEL PLAN.—Within one year of the date 
of the enactment of this Act, the Secretary of the 
Treasury shall publish a model plan that may be 
used 
to 
satisfy 
the 
requirement 
of 
section 
401(k)(11)(E)(ii)(V) of the Internal Revenue Code 
of 1986. 
(2) PROTECTION AGAINST LOSS.—Within 120 
days of the date of the enactment of this Act, the 
Secretary of Labor shall amend Department of 
Labor Regulation section 2550.404c–5(e)(4)(iv)(B) 
so that, in the case of a plan described in section 
VerDate Sep 11 2014 
20:50 Nov 23, 2015
Jkt 059200
PO 00000
Frm 00034
Fmt 6652
Sfmt 6201
E:\BILLS\H4067.IH
H4067
tkelley on DSK3SPTVN1PROD with BILLS
401(k)(11)(E) of such Code ‘‘four years’’ shall be 
substituted for ‘‘120 days’’. 
(3) CLARIFYING DUTIES AND REDUCING BUR-
DENS
FOR
MULTIPLE
EMPLOYER
PLANS.—Within 
one year of the date of the enactment of this Act, 
the Secretary of Labor shall— 
(A) publish rules clarifying the extent to 
which the fiduciary duties, if any, of a partici-
pating employer fiduciary with respect to a plan 
described in section 413(c) of such Code are 
limited to— 
(i) the selection and monitoring of the 
named fiduciary, and 
(ii) the investment and management 
of the portion of the plan’s assets attrib-
utable to employees of the employer to the 
extent not otherwise delegated to another 
fiduciary, and 
(B) prescribe interim final regulations pro-
viding simplified means by which plans de-
scribed in section 413(c) of such Code may sat-
isfy the requirements of sections 102, 103, and 
105 of the Employee Retirement Income Secu-
rity Act of 1974. 
VerDate Sep 11 2014 
20:50 Nov 23, 2015
Jkt 059200
PO 00000
Frm 00035
Fmt 6652
Sfmt 6201
E:\BILLS\H4067.IH
H4067
tkelley on DSK3SPTVN1PROD with BILLS
For purposes of this paragraph, the term ‘‘partici-
pating employer fiduciary’’ means the participating 
employer, any employee of such participating em-
ployer that serves as fiduciary, any committee of 
such employees, and any other person whose fidu-
ciaries duties with respect to the plan relate solely 
to the participating employer and not to the oper-
ation of the plan with respect to all participating 
employers. 
(4) ELIMINATION OF DISINCENTIVE TO POOL-
ING.—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 such Code may be 
treated as satisfying the qualification requirements 
of section 401(a) of such Code despite the violation 
of such requirements with respect to one or more 
participating employers without regard to whether 
such violation continues. Solely for this purpose, a 
plan shall be treated as violating the qualification re-
quirements of section 401(a) of such Code with re-
spect to a participating employer if such employer 
has failed to provide the plan sponsor with the infor-
mation needed to comply with such requirements 
and such failure has continued over a period of time 
VerDate Sep 11 2014 
20:50 Nov 23, 2015
Jkt 059200
PO 00000
Frm 00036
Fmt 6652
Sfmt 6201
E:\BILLS\H4067.IH
H4067
tkelley on DSK3SPTVN1PROD with BILLS
that clearly demonstrates a lack of commitment to 
compliance. Such rules may require that the portion 
of the plan attributable to such participating em-
ployers be spun off to plans maintained by such em-
ployers. 
(c) EFFECTIVE DATE.— 
(1) IN GENERAL.—Except as provided in para-
graph (2), the amendments made by this section 
shall apply to years beginning after December 31, 
2015. 
(2) EXCEPTION.—Subsection (b) shall apply as 
of the date of the enactment of this Act. 
SEC. 17. 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 
maintaining the plan share no common interest. 
VerDate Sep 11 2014 
20:50 Nov 23, 2015
Jkt 059200
PO 00000
Frm 00037
Fmt 6652
Sfmt 6201
E:\BILLS\H4067.IH
H4067
tkelley on DSK3SPTVN1PROD with BILLS
‘‘(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 employer main-
taining the plan. 
‘‘(iii) The requirements of this clause are met 
if, under the plan, each employer maintaining the 
plan retains 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, an employer maintaining the plan is 
not subject to unreasonable restrictions, fees, or pen-
alties by reason of ceasing to maintain, or otherwise 
transferring assets from, the plan. 
VerDate Sep 11 2014 
20:50 Nov 23, 2015
Jkt 059200
PO 00000
Frm 00038
Fmt 6652
Sfmt 6201
E:\BILLS\H4067.IH
H4067
tkelley on DSK3SPTVN1PROD with BILLS
‘‘(v) The requirements of this clause are met if 
each employer maintaining 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 waive the re-
quirement under section 103(a)(3) to engage an inde-
pendent qualified public accountant in cases where the 
Secretary determines it appropriate. 
‘‘(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 
VerDate Sep 11 2014 
20:50 Nov 23, 2015
Jkt 059200
PO 00000
Frm 00039
Fmt 6652
Sfmt 6201
E:\BILLS\H4067.IH
H4067
tkelley on DSK3SPTVN1PROD with BILLS
‘‘(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) CONFORMING AMENDMENT.—Section 3(2)(A) of 
such Act is amended by striking ‘‘Except as provided in 
subparagraph (B)’’ and inserting ‘‘Except as provided in 
subparagraphs (B) and (C)’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to years beginning after December 
31, 2015. 
SEC. 18. CLARIFICATION OF TREATMENT OF INDIVIDUAL 
RETIREMENT PLANS WITH PAYROLL DEDUC-
TION. 
(a) IN GENERAL.—Section 3(2) of the Employee Re-
tirement Income Security Act of 1974 (29 U.S.C. 
1002(2)), as amended by this Act, is amended by adding 
at the end the following new subparagraph: 
‘‘(E) Neither an individual retirement plan (as de-
fined in section 7701(a)(37) of the Internal Revenue Code 
of 1986) nor an automatic deferral IRA arrangement (as 
described in section 408B of such Code) maintained in 
connection with any such individual retirement plan shall 
be considered a pension plan merely because an employer 
establishes a payroll deduction program for the purpose 
VerDate Sep 11 2014 
20:50 Nov 23, 2015
Jkt 059200
PO 00000
Frm 00040
Fmt 6652
Sfmt 6201
E:\BILLS\H4067.IH
H4067
tkelley on DSK3SPTVN1PROD with BILLS
of enabling employees to make voluntary contributions to 
such account or annuity.’’. 
(b) EFFECTIVE DATE.—The amendments made by 
this section shall take effect on the date of the enactment 
of this Act. 
SEC. 19. DISCLOSURE REGARDING LIFETIME INCOME. 
(a) IN GENERAL.—Section 105(a)(2)(B) of the Em-
ployee Retirement Income Security Act of 1974 (29 
U.S.C. 1025(a)(2)) is amended— 
(1) in clause (i), by striking ‘‘and’’ at the end; 
(2) in clause (ii), by striking ‘‘diversification.’’ 
and inserting ‘‘diversification, and’’; and 
(3) by inserting at the end the following: 
‘‘(iii) the lifetime income disclosure 
described in subparagraph (D)(i). 
In the case of pension benefit statements de-
scribed in clause (i) of paragraph (1)(A), a life-
time income disclosure under clause (iii) of this 
subparagraph shall only be required to be in-
cluded in one pension benefit statement during 
any one 12-month period.’’. 
(b) LIFETIME INCOME.—Section 105(a)(2) of such 
Act (29 U.S.C. 1025(a)) is amended by adding at the end 
the following new subparagraph: 
‘‘(D) LIFETIME INCOME DISCLOSURE.— 
VerDate Sep 11 2014 
20:50 Nov 23, 2015
Jkt 059200
PO 00000
Frm 00041
Fmt 6652
Sfmt 6201
E:\BILLS\H4067.IH
H4067
tkelley on DSK3SPTVN1PROD with BILLS
‘‘(i) IN GENERAL.— 
‘‘(I) DISCLOSURE.—A lifetime in-
come disclosure shall set forth the life-
time income stream equivalent of the 
total benefits accrued with respect to 
the participant or beneficiary. 
‘‘(II) LIFETIME INCOME STREAM 
EQUIVALENT
OF
THE
TOTAL
BENE-
FITS ACCRUED.—For purposes of this 
subparagraph, the term ‘lifetime in-
come stream equivalent of the total 
benefits accrued’ means the amount of 
monthly payments the participant or 
beneficiary would receive if the total 
accrued benefits of such participant or 
beneficiary were used to provide life-
time income streams described in sub-
clause (III), based on assumptions 
specified in rules prescribed by the 
Secretary. 
‘‘(III) 
LIFETIME
INCOME 
STREAMS.—The 
lifetime 
income 
streams described in this subclause 
are a qualified joint and survivor an-
nuity (as defined in section 205(d)), 
VerDate Sep 11 2014 
20:50 Nov 23, 2015
Jkt 059200
PO 00000
Frm 00042
Fmt 6652
Sfmt 6201
E:\BILLS\H4067.IH
H4067
tkelley on DSK3SPTVN1PROD with BILLS
based on assumptions specified in 
rules prescribed by the Secretary, in-
cluding the assumption that the par-
ticipant or beneficiary has a spouse of 
equal age, and a single life annuity. 
Such lifetime income streams may 
have a term certain or other features 
to the extent permitted under rules 
prescribed by the Secretary. 
‘‘(ii) MODEL DISCLOSURE.—Not later 
than 1 year after the date of the enact-
ment of the Lifetime Income Disclosure 
Act, the Secretary shall issue a model life-
time income disclosure, written in a man-
ner so as to be understood by the average 
plan participant, that— 
‘‘(I) explains that the lifetime in-
come stream equivalent is only pro-
vided as an illustration; 
‘‘(II) explains that the actual 
payments under the lifetime income 
stream described in clause (i)(III) 
that may be purchased with the total 
benefits accrued will depend on nu-
merous factors and may vary substan-
VerDate Sep 11 2014 
20:50 Nov 23, 2015
Jkt 059200
PO 00000
Frm 00043
Fmt 6652
Sfmt 6201
E:\BILLS\H4067.IH
H4067
tkelley on DSK3SPTVN1PROD with BILLS
tially from the lifetime income stream 
equivalent in the disclosures; 
‘‘(III) explains the assumptions 
upon which the lifetime income stream 
equivalent was determined; and 
‘‘(IV) provides such other similar 
explanations as the Secretary con-
siders appropriate. 
‘‘(iii) ASSUMPTIONS
AND
RULES.— 
Not later than 1 year after the date of the 
enactment of the Lifetime Income Disclo-
sure Act, the Secretary shall— 
‘‘(I) prescribe assumptions that 
administrators of individual account 
plans may use in converting total ac-
crued benefits into lifetime income 
stream equivalents for purposes of 
this subparagraph; and 
‘‘(II) issue interim final rules 
under clause (i). 
In prescribing assumptions under sub-
clause (I), the Secretary may prescribe a 
single set of specific assumptions (in which 
case the Secretary may issue tables or fac-
tors that facilitate such conversions), or 
VerDate Sep 11 2014 
20:50 Nov 23, 2015
Jkt 059200
PO 00000
Frm 00044
Fmt 6652
Sfmt 6201
E:\BILLS\H4067.IH
H4067
tkelley on DSK3SPTVN1PROD with BILLS
ranges of permissible assumptions. To the 
extent that an accrued benefit is or may be 
invested in a lifetime income stream de-
scribed in clause (i)(III), the assumptions 
prescribed under subclause (I) shall, to the 
extent appropriate, permit administrators 
of individual account plans to use the 
amounts payable under such lifetime in-
come stream as a lifetime income stream 
equivalent. 
‘‘(iv) LIMITATION ON LIABILITY.—No 
plan fiduciary, plan sponsor, or other per-
son shall have any liability under this title 
solely by reason of the provision of lifetime 
income stream equivalents which are de-
rived in accordance with the assumptions 
and rules described in clause (iii) and 
which include the explanations contained in 
the model lifetime income disclosure de-
scribed in clause (ii). This clause shall 
apply without regard to whether the provi-
sion of such lifetime income stream equiva-
lent is required by subparagraph (B)(iii). 
‘‘(v) EFFECTIVE DATE.—The require-
ment in subparagraph (B)(iii) shall apply 
VerDate Sep 11 2014 
20:50 Nov 23, 2015
Jkt 059200
PO 00000
Frm 00045
Fmt 6652
Sfmt 6201
E:\BILLS\H4067.IH
H4067
tkelley on DSK3SPTVN1PROD with BILLS
to pension benefit statements furnished 
more than 12 months after the latest of 
the issuance by the Secretary of— 
‘‘(I) interim final rules under 
clause (i); 
‘‘(II) the model disclosure under 
clause (ii); or 
‘‘(III) the assumptions under 
clause (iii).’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall take effect on the date of the enactment 
of this Act. 
SEC. 20. LIFETIME INCOME SAFE HARBOR. 
Section 404 of the Employee Retirement Income Se-
curity Act of 1974 (29 U.S.C. 1104) is amended by adding 
at the end the following: 
‘‘(e) SAFE HARBOR FOR ANNUITY SELECTION.— 
‘‘(1) IN GENERAL.—With respect to the selec-
tion of an insurer and a guaranteed retirement in-
come contract, the requirements of subsection 
(a)(1)(B) will be deemed to be satisfied if a fidu-
ciary— 
‘‘(A) engages in an objective, thorough and 
analytical search for the purpose of identifying 
VerDate Sep 11 2014 
20:50 Nov 23, 2015
Jkt 059200
PO 00000
Frm 00046
Fmt 6652
Sfmt 6201
E:\BILLS\H4067.IH
H4067
tkelley on DSK3SPTVN1PROD with BILLS
the contract and the administrative serv-
ices to be provided under such contract. 
‘‘(2) FINANCIAL
CAPABILITY
OF
THE
IN-
SURER.—For purposes of this section, a fiduciary 
will be deemed to satisfy the requirements of para-
graphs (1)(B)(i) and (1)(C)(i) if— 
‘‘(A) the fiduciary obtains written rep-
resentations from the insurer that— 
‘‘(i) the insurer is licensed to offer 
guaranteed retirement income contracts; 
‘‘(ii) the insurer, at the time of selec-
tion and for each of the immediately pre-
ceding seven years— 
‘‘(I) operates under a certificate 
of authority from the Insurance Com-
missioner of its domiciliary State that 
has not been revoked or suspended; 
‘‘(II) has filed audited financial 
statements in accordance with the 
laws of its domiciliary State under ap-
plicable statutory accounting prin-
ciples; 
‘‘(III) maintains (and has main-
tained) reserves that satisfies all the 
VerDate Sep 11 2014 
20:50 Nov 23, 2015
Jkt 059200
PO 00000
Frm 00048
Fmt 6652
Sfmt 6201
E:\BILLS\H4067.IH
H4067
tkelley on DSK3SPTVN1PROD with BILLS
statutory requirements of all States 
where the insurer does business; and 
‘‘(IV) is not operating under an 
order of supervision, rehabilitation, or 
liquidation; and 
‘‘(iii) the insurer undergoes, at least 
every five years, a financial examination 
(within the meaning of the law of its domi-
ciliary State) by the Insurance Commis-
sioner of the domiciliary State (or rep-
resentative, designee, or other party ap-
proved thereby); 
‘‘(B) if, following the issuance of the rep-
resentations described in clauses (i) through 
(iii) of subparagraph (A), there is any change 
that would preclude the insurer from making 
the same representations at the time of 
issuance of the guaranteed retirement income 
contract, the insurer shall notify the fiduciary, 
in advance of the issuance of any guaranteed 
retirement income contract, that the fiduciary 
can no longer rely on one or more of the rep-
resentations; and 
‘‘(C) the fiduciary has not received the no-
tification described in subparagraph (B) and 
VerDate Sep 11 2014 
20:50 Nov 23, 2015
Jkt 059200
PO 00000
Frm 00049
Fmt 6652
Sfmt 6201
E:\BILLS\H4067.IH
H4067
tkelley on DSK3SPTVN1PROD with BILLS
has no other facts that would cause it to ques-
tion the representations described in clauses (i) 
through (iii) of subparagraph (A). 
‘‘(3) Nothing herein shall be construed to re-
quire a fiduciary to select the lowest cost contract. 
Accordingly, a fiduciary may consider the value, in-
cluding features and benefits of the contract and at-
tributes of the insurer in conjunction with the con-
tract’s cost. Attributes of the insurer that may be 
considered may include, without limitation, the 
issuer’s financial strength. 
‘‘(4) TIME OF SELECTION.— 
‘‘(A) For purposes of paragraph (1), the 
‘time of selection’ may be either— 
‘‘(i) the time that the insurer and con-
tract are selected for distribution of bene-
fits to a specific participant or beneficiary; 
or 
‘‘(ii) the time that the insurer and 
contract are selected to provide benefits at 
future dates to participants or bene-
ficiaries, provided that the selecting fidu-
ciary periodically reviews the continuing 
appropriateness of the conclusion described 
in paragraph (1)(C), taking into account 
VerDate Sep 11 2014 
20:50 Nov 23, 2015
Jkt 059200
PO 00000
Frm 00050
Fmt 6652
Sfmt 6201
E:\BILLS\H4067.IH
H4067
tkelley on DSK3SPTVN1PROD with BILLS
the considerations described in paragraph 
(1). 
For purposes of this paragraph, a fiduciary is 
not required to review the appropriateness of 
this conclusion following the purchase of any 
contract(s) for specific participants or bene-
ficiaries. 
‘‘(B) For purposes of paragraph (4)(A)(ii), 
a fiduciary will be deemed to have conducted a 
periodic review of the financial capability of the 
insurer if the fiduciary obtains the written rep-
resentations described in clauses (i) through 
(iii) of paragraph (2)(A) on an annual basis, 
unless, in the interim, the fiduciary has received 
the notice described in paragraph (2)(B) or oth-
erwise becomes aware of facts that would cause 
it to question the such representations. 
‘‘(5) LIMITED LIABILITY.—A fiduciary that is 
deemed to satisfy the requirements of this section 
shall not be liable following the distribution of any 
benefit or the investment by or on behalf of a partic-
ipant or beneficiary pursuant to the selected guaran-
teed retirement income contract for any losses that 
may result to the participant or beneficiary due to 
VerDate Sep 11 2014 
20:50 Nov 23, 2015
Jkt 059200
PO 00000
Frm 00051
Fmt 6652
Sfmt 6201
E:\BILLS\H4067.IH
H4067
tkelley on DSK3SPTVN1PROD with BILLS
an insurer’s inability to satisfy its financial obliga-
tions under the terms of such contract. 
‘‘(6) DEFINITIONS.—For purposes of this sec-
tion— 
‘‘(A) INSURER.—The term ‘insurer’ means 
an insurance company, insurance service or in-
surance organization qualified to do business in 
a State; and includes affiliates of such compa-
nies to the extent the affiliate is licensed to 
offer guaranteed retirement income contracts. 
‘‘(B) GUARANTEED RETIREMENT INCOME 
CONTRACT.—The term ‘guaranteed retirement 
income contract’ means an annuity contract for 
a fixed term or a contract (or provision or fea-
ture thereof) designed to provide a participant 
guaranteed benefits annually (or more fre-
quently) for at least the remainder of the life of 
the participant or joint lives of the participant 
or the participant’s designated beneficiary as 
part of an individual account plan. This section 
sets forth an optional means by which a plan fi-
duciary will be considered to satisfy the respon-
sibilities set forth in section 404(a)(1)(B) with 
respect to the selection of insurers and guaran-
teed retirement income contracts. This section 
VerDate Sep 11 2014 
20:50 Nov 23, 2015
Jkt 059200
PO 00000
Frm 00052
Fmt 6652
Sfmt 6201
E:\BILLS\H4067.IH
H4067
tkelley on DSK3SPTVN1PROD with BILLS
does not establish minimum requirements or 
the exclusive means for satisfying these respon-
sibilities.’’. 
Æ 
VerDate Sep 11 2014 
20:50 Nov 23, 2015
Jkt 059200
PO 00000
Frm 00053
Fmt 6652
Sfmt 6301
E:\BILLS\H4067.IH
H4067
tkelley on DSK3SPTVN1PROD with BILLS