contributions under this subsection on be-
half of a qualifying employee for any cal-
endar year in a manner reasonably de-
signed to avoid exceeding such deductible 
amount. 
‘‘(5) REQUIRED INVESTMENTS.— 
‘‘(A) IN GENERAL.—Amounts contributed 
under paragraph (3)(B)(i) shall be invested 
only in the class of assets or funds described in 
subparagraph (B) unless the employer elects a 
class of assets or funds described in subpara-
graph (C), (D), (E), or (F). 
‘‘(B) TARGET DATE/LIFECYCLE OPTION.— 
The class of assets or funds described in this 
subparagraph is the class of assets or funds 
that constitutes a qualified default investment 
alternative under Department of Labor regula-
tion section 2550.404c–5(e)(4)(i). 
‘‘(C) 
PRINCIPAL
PRESERVATION.—The 
class of assets or funds described in this sub-
paragraph is the class of assets or funds that 
is designed to protect the principal of the indi-
vidual on an ongoing basis, including passbook 
savings, certificates of deposit, insurance con-
tracts, mutual funds, United States savings 
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bonds (which may be indexed for inflation), and 
similar assets specified in regulations. 
‘‘(D) BALANCED
OPTION.—The class of 
assets or funds described in this subparagraph 
is the class of assets or funds that constitutes 
a qualified default investment alternative under 
Department 
of 
Labor 
regulation 
section 
2550.404c–5(e)(4)(ii). 
‘‘(E) GUARANTEED LIFETIME INCOME OP-
TION OR EQUIVALENT.—The class of assets or 
funds described in this subparagraph is the 
class of assets or funds that is designed to pro-
vide an employee with the right to elect to re-
ceive distributions as a defined level of income 
annually (or more frequently) for at least the 
remainder of the life of the employee or the 
joint lives of the employee and the employee’s 
designated beneficiary. No later than 12 
months after the date of enactment of this Act, 
the Secretary of Labor and the Secretary shall 
issue guidance defining a guaranteed lifetime 
income or equivalent. 
‘‘(F) OTHER.—Any other class of assets or 
funds determined by the Secretary to be a 
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qualified investment for purposes of this sec-
tion. 
‘‘(6) COORDINATION
WITH
WITHHOLDING.— 
The Secretary shall modify the withholding exemp-
tion certificate under section 3402(f) so that, in the 
case of any qualifying employee covered under an 
automatic IRA arrangement, any notice and election 
requirements with respect to the arrangement may 
be met through the use of an attachment to such 
certificate or other modifications of the withholding 
exemption procedures. 
‘‘(7) TREATMENT
AS
IRA.—A qualifying em-
ployee for whom an automatic IRA is established 
under paragraph (1) may elect, at such time and in 
such manner and form as the Secretary may pre-
scribe, whether to treat the individual retirement 
plan as described, or not described, in section 408A. 
If no such election is made, the plan shall be treated 
as described in section 408A and shall meet the re-
quirements of section 408A. 
‘‘(8) EMPLOYER’S OPTION TO OBTAIN AFFIRMA-
TIVE
ELECTIONS
FROM
EMPLOYEES
INSTEAD
OF 
AUTOMATIC
ENROLLMENT.—As an alternative to 
automatic enrollment, an employer may choose to 
comply with subsection (d)(1)(B)(ii) by notifying 
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employees that the employer wishes to obtain from 
each qualifying employee an affirmative election ei-
ther to contribute or not to contribute to an auto-
matic IRA, provided that any qualifying employee 
who fails to make such an election is treated in the 
manner provided under subsection (d)(1)(B)(ii). 
‘‘(e) AUTOMATIC IRA CONTRIBUTIONS AND RETIRE-
MENT BOND PURCHASES TREATED LIKE OTHER CON-
TRIBUTIONS TO INDIVIDUAL RETIREMENT PLANS.— 
‘‘(1) TAX TREATMENT UNAFFECTED.—The fact 
that a contribution to an individual retirement plan 
or purchase of a retirement bond is made on behalf 
of an employee under an automatic IRA arrange-
ment instead of being made directly by the employee 
shall not affect the deductibility or other tax treat-
ment of the contribution or of other amounts under 
this title. 
‘‘(2) PAYROLL SAVINGS CONTRIBUTIONS TAKEN 
INTO ACCOUNT.—Any contribution to an individual 
retirement plan or purchase of a retirement bond 
made on behalf of an employee under an automatic 
IRA arrangement shall be taken into account in ap-
plying the limitations on contributions to individual 
retirement plans and the other provisions of this 
title applicable to individual retirement plans as if 
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the contribution or purchase had been made directly 
by the employee. 
‘‘(f) DEPOSITS TO PLANS OF A DESIGNATED TRUST-
EE OR ISSUER AND FOR RETIREMENT BONDS.— 
‘‘(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 to the 
Secretary or his agent for the purchase of retirement 
bonds specified in paragraph (3). 
‘‘(2) INDIVIDUAL RETIREMENT PLANS OTHER 
THAN
THOSE
SELECTED
BY
EMPLOYEE.—An em-
ployer may elect to have contributions for all quali-
fying employees participating in an automatic IRA 
arrangement made to individual retirement plans of 
a trustee or issuer under the arrangement that has 
been designated by the employer. The preceding sen-
tence shall not apply unless each participant is noti-
fied in writing that the participant’s balance may be 
transferred without cost or penalty to another indi-
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vidual retirement plan established by or on behalf of 
the participant. 
‘‘(3) RETIREMENT BONDS.— 
‘‘(A) IN
GENERAL.—The Secretary shall 
provide that contributions deposited under sub-
paragraph (B) shall be applied to the purchase 
of a retirement bond in the name of each appli-
cable employee. 
‘‘(B) PAYROLL DEPOSIT FEATURES.—The 
Secretary shall establish procedures so that con-
tributions may be applied to the purchase of re-
tirement bonds without undue administrative or 
paperwork requirements on participating em-
ployers. Such procedures shall ensure that only 
1 such retirement bond of each type (traditional 
or Roth) is issued for each TIN. 
‘‘(4) PAYROLL TAX DEPOSIT PROCEDURE.—The 
procedures the Secretary shall establish may include 
a procedure under which an employer— 
‘‘(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 qualifying 
employees have designated under subsection 
clause (i)(I) of subsection (d)(1)(B) (or are 
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deemed to have designated under clause (ii) of 
such subsection) as contributions to purchase 
retirement bonds on behalf of the employees 
under paragraph (3), and 
‘‘(B) specifies, in such manner as the Sec-
retary may prescribe, information needed to 
purchase retirement bonds on behalf of each ap-
plicable employee for whom a contribution is to 
be made, including— 
‘‘(i) the employee’s name and TIN, 
and 
‘‘(ii) the amount of the contribution. 
‘‘(5) PURPOSES.—The purposes of the retire-
ment bond program established under this sub-
section and subsection (g) include— 
‘‘(A) providing new savers a convenient, 
low-cost investment option suitable for the ini-
tial accumulation of small automatic IRA con-
tributions, 
‘‘(B) to reflect the intent that the long- 
term investment of automatic IRA funds for 
most savers be in the private market rather 
than in retirement bonds, encouraging and as-
sisting 
individuals 
who 
accumulate 
larger 
amounts in retirement bonds to transfer those 
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funds to individual retirement plans in the pri-
vate market, while 
‘‘(C) permitting individuals to remain in-
vested in retirement bonds if they choose to do 
so. 
‘‘(6) REGULATIONS.—The Secretary may issue 
such regulations as are necessary to carry out the 
purposes of this subsection and subsection (g), in-
cluding— 
‘‘(A) establishment of procedures to com-
municate to individuals the importance of in-
vestment diversification and the transfer option 
described in subparagraph (B), 
‘‘(B) simplified procedures under which 
holders of retirement bonds may periodically 
choose to have the bonds or their proceeds 
transferred to available individual retirement 
plans, and 
‘‘(C) means by which individuals may elect 
(or be treated as electing) whether to have re-
tirement bonds or their proceeds so transferred. 
Any such transfer shall be treated as a rollover con-
tribution for purposes of section 408(d)(3) (other 
than subparagraph (B) thereof). 
‘‘(g) RETIREMENT BOND.— 
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‘‘(1) RETIREMENT
BOND.—The term ‘retire-
ment bond’ means a bond issued under chapter 31 
of title 31, which by its terms, or by regulations pre-
scribed by the Secretary under such chapter— 
‘‘(A) provides for interest to be credited at 
rates that take into account the expected dura-
tion of the funds invested in retirement bonds 
and at rates determined or adjusted in a man-
ner and with sufficient frequency to provide 
substantial protection from inflation, 
‘‘(B) is not transferable, and 
‘‘(C) is designed for investment for retire-
ment under automatic IRA arrangements or 
other savings vehicles. 
‘‘(2) INDIVIDUAL RETIREMENT PLAN RULES AP-
PLICABLE.—The provisions of this title applicable to 
an individual retirement plan (as defined in section 
7701(a)(37)), including provisions relating to con-
tributions, holding and distributions, shall apply to 
a retirement bond, except as determined by the Sec-
retary. 
‘‘(3) ANNUAL STATEMENT.—As soon as prac-
ticable after the close of the calendar year, the Sec-
retary shall make available an annual statement to 
each participant setting forth— 
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‘‘(A) payments made by or on behalf of the 
participant for the retirement bond, 
‘‘(B) amounts earned by the retirement 
bond, 
‘‘(C) the value of the account as of the 
close of such calendar year, 
‘‘(D) the importance of diversifying retire-
ment savings, 
‘‘(E) the benefits of a well-balanced and di-
versified investment portfolio, 
‘‘(F) a notice of the internet website of the 
Department of Labor for sources of information 
on individual investing and diversification, 
‘‘(G) the procedures for redeeming a re-
tirement bond and directly transferring the re-
deemed amount into an individual retirement 
plan, 
‘‘(H) other factors affecting retirement 
savings decisions, and 
‘‘(I) such other information as the Sec-
retary determines necessary or appropriate. 
‘‘(h) MODEL NOTICE.—The Secretary 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— 
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‘‘(A) to notify employees of the require-
ment under this section for the employer to pro-
vide certain employees with the opportunity to 
participate in an automatic IRA arrangement, 
and 
‘‘(B) to satisfy the requirements of sub-
section (d)(2)(C), 
‘‘(2) provide uniform forms for enrollment, in-
cluding automatic enrollment, in an automatic IRA 
arrangement, and 
‘‘(3) establish a website or other electronic 
means that small employers can access and use to 
obtain information on automatic IRA arrangements 
and to obtain required notices and forms. 
The information referred to in paragraph (3) shall 
be provided in a manner designed to assist employ-
ers and providers by facilitating the identification by 
employers of private-sector providers of individual 
retirement plans and associated investment options 
that are appropriate for use in automatic IRA ar-
rangements. 
‘‘(i) CROSS REFERENCE.—For provision preempting 
conflicting State laws, see section 2(k) of the Automatic 
IRA Act of 2013.’’. 
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(b) 
MANDATORY
TRANSFERS.—Section 
401(a)(31)(B) is amended— 
(1) by inserting ‘‘(including an automatic IRA 
arrangement)’’ after ‘‘individual retirement plan’’ 
each place it appears, and 
(2) by adding at the end the following new sen-
tence: ‘‘Any amount so transferred (and any earn-
ings thereon) shall be invested in a default invest-
ment described in section 408B(d)(5).’’. 
(c) PENALTY FOR FAILURE TO TIMELY REMIT CON-
TRIBUTIONS TO AUTOMATIC IRA ARRANGEMENTS.—Sec-
tion 4975(c) is amended by adding at the end the fol-
lowing new paragraph: 
‘‘(7) SPECIAL RULE FOR AUTOMATIC IRA AR-
RANGEMENTS.—For purposes of paragraph (1), if 
an employer is required under an automatic IRA ar-
rangement under section 408B to deposit amounts 
withheld from an employee’s compensation into an 
automatic IRA or toward the purchase of a retire-
ment bond but fails to do so within the time pre-
scribed under section 408B(d)(2)(A), such amounts 
shall be treated as assets of the automatic IRA.’’. 
(d) COORDINATION WITH EMPLOYEE RETIREMENT 
INCOME SECURITY ACT OF 1974.— 
(1) EXEMPTION.— 
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(A) IN
GENERAL.—Section 3(2) of the 
Employee Retirement Income Security Act of 
1974 (29 U.S.C. 1002(2)) is amended— 
(i) by inserting ‘‘or (C)’’ after ‘‘sub-
paragraph (B)’’ in subparagraph (A), and 
(ii) by adding at the end the following 
new subparagraph: 
‘‘(C) An automatic IRA arrangement de-
scribed in section 408B(d) of the Internal Rev-
enue Code of 1986 shall not be treated as an 
employee pension benefit plan or pension plan 
if, under the arrangement, contributions are to 
be made to an automatic IRA the provider of 
which is included in the website list established 
under section 408B(h)(3) of such Code, are to 
be made to an individual retirement plan des-
ignated by the employee, or are to be invested 
in retirement bonds (whether to the Secretary 
of the Treasury or to a designated trustee or 
other agent for that purpose).’’. 
(B) 
CUSTOMER
IDENTIFICATION
PRO-
GRAM.—Notwithstanding the amendment made 
by subparagraph (A), an individual retirement 
plan established pursuant to an automatic IRA 
arrangement described in section 408B(d) of 
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the Internal Revenue Code of 1986 shall, for 
purposes of any customer identification pro-
gram established under section 5318(l) of title 
31, United States Code, be treated as an ac-
count opened for the purpose of participating in 
an employee benefit plan established under the 
Employee Retirement Income Security Act of 
1974. 
(2) FIDUCIARY DUTIES.—Section 404(c)(2) of 
such Act is amended— 
(A) by inserting the following sentence be-
fore the last sentence: ‘‘In the case of an auto-
matic IRA under section 408B of such Code 
that is not exempt under section 3(2)(C), a par-
ticipant or beneficiary shall, for purposes of 
paragraph (1), be treated as exercising control 
over the assets in the account on and after the 
7th day after notice has been given to an em-
ployee that such automatic IRA has been estab-
lished on behalf of the employee.’’, and 
(B) by inserting ‘‘or with respect to an 
automatic IRA under section 408B of such 
Code’’ after ‘‘arrangement’’ in the last sen-
tence. 
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(e) NOTICE
OF
AVAILABILITY
OF
INVESTMENT 
GUIDELINES.— 
(1) IN GENERAL.—Section 408(i) (relating to 
reports) is amended by adding at the end the fol-
lowing new sentences: ‘‘Any report furnished under 
paragraph (2) to an individual shall include notice of 
the internet website of the Department of Labor for 
sources of information on individual investing and 
diversification.’’. 
(2) UPDATE INFORMATION.—Such information 
shall be modified (or updated) by the Secretary of 
Labor in consultation with the Secretary of the 
Treasury and the Chairman of the Securities and 
Exchange Commission to address needed changes 
due to the creation of automatic IRAs. 
(f) FAILURE TO PROVIDE ACCESS TO PAYROLL SAV-
INGS ARRANGEMENTS.—Chapter 43 (relating to qualified 
pension, etc., plans) is amended by adding at the end the 
following new section: 
‘‘SEC. 4980J. REQUIREMENTS FOR COVERED EMPLOYERS 
TO PROVIDE EMPLOYEES ACCESS TO AUTO-
MATIC IRA ARRANGEMENTS. 
‘‘(a) GENERAL RULE.—There is hereby imposed a 
tax on any failure by a covered employer (as defined in 
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section 408B) to meet the requirements 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). 
‘‘(3) TAX NOT TO APPLY TO FAILURES COR-
RECTED WITHIN 90 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 automatic 
IRA arrangement described in section 408B to 
each employee eligible to participate in the ar-
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rangement by the end of the 90-day period be-
ginning 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. 
‘‘(c) PROCEDURES FOR NOTICE.—The Secretary may 
prescribe and implement procedures for obtaining con-
firmation that employers are in compliance with the re-
quirements of subsection (d). The Secretary, in the Sec-
retary’s discretion, may prescribe that the confirmation 
shall be obtained on an annual or less frequent basis, and 
may use for this purpose the annual report or quarterly 
report for employment taxes, or such other means as the 
Secretary may deem advisable. 
‘‘(d) REQUIREMENT TO PROVIDE EMPLOYEE ACCESS 
TO AUTOMATIC IRA ARRANGEMENTS.—The requirements 
of this subsection are met if the employer meets the re-
quirements of section 408B.’’. 
(g) WAIVER OF EARLY WITHDRAWAL PENALTY FOR 
CERTAIN DISTRIBUTIONS FOLLOWING INITIAL ELECTION 
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TO PARTICIPATE IN AUTOMATIC IRA ARRANGEMENT.— 
Subsection (t) of section 72 is amended by adding at the 
end the following new paragraph: 
‘‘(11) 
DISTRIBUTION
FOLLOWING
INITIAL 
ELECTION TO PARTICIPATE IN AUTOMATIC IRA AR-
RANGEMENT.—Paragraph (1) shall not apply in the 
case of a distribution to a qualifying employee made 
not later than 90 days after the initial election 
under section 408B(d)(1)(B)(ii).’’. 
(h) BANKRUPTCY.—Section 522 of title 11, United 
States Code, is amended— 
(1) in subsection (d)(12) by inserting ‘‘408B,’’ 
after ‘‘408A,’’, and 
(2) in subsection (n) by inserting ‘‘, or in an 
automatic IRA arrangement described in section 
408B,’’. 
(i) AUTOMATIC IRA ADVISORY GROUP.— 
(1) IN GENERAL.—Not later than 60 days after 
the date of enactment of this Act, the Secretary of 
the Treasury and the Secretary of Labor shall joint-
ly establish an Automatic IRA Advisory Group (in 
this subsection referred to as the ‘‘Advisory 
Group’’). The purpose of the Advisory Group shall 
be to make recommendations regarding the auto-
matic IRA investment options described in section 
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408B(d)(5) of the Internal Revenue Code of 1986 
and the website described in section 408B(h)(3) of 
such Code, including, with respect to automatic IRA 
arrangements, the disclosure of information regard-
ing fees and expenses, the use of low-cost investment 
options, the appropriate use of electronic methods to 
provide notice and disclosure, and such other related 
matters as may be determined by the Secretaries. 
(2) MEMBERSHIP.—The Advisory Group shall 
consist of not more than 15 members and shall be 
composed of— 
(A) such persons as the Secretaries of the 
Treasury and Labor may consider appropriate 
to provide expertise regarding investments for 
retirement, including providers of individual re-
tirement accounts and individual retirement an-
nuities described in section 408 or 408A of 
such Code, and 
(B) one or more representatives of the De-
partment of Labor and of the Department of 
the Treasury. 
(3) COMPENSATION.—The members of the Ad-
visory Group shall serve without compensation. 
(4) ADMINISTRATIVE
SUPPORT.—The Depart-
ment of the Treasury and the Department of Labor 
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shall jointly provide appropriate administrative sup-
port to the Advisory Group, including technical as-
sistance. The Advisory Group may use the services 
and facilities of such Departments, with or without 
reimbursement, as jointly determined by such De-
partments. 
(5) REPORT BY ADVISORY GROUP.—Not later 
than 12 months after the date of the enactment of 
this Act, the Advisory Group shall submit to the 
Secretary of Labor and the Secretary of the Treas-
ury a report containing its recommendations. The 
Secretaries may request that the Advisory Group 
submit subsequent reports. 
(j) CONFORMING AMENDMENTS.— 
(1) The table of sections for subpart A of part 
I of subchapter D of chapter 1 is amended by insert-
ing after the item relating to section 408A the fol-
lowing new item: 
‘‘Sec. 408B. Right to automatic IRA arrangements at work.’’. 
(2) The table of sections for chapter 43 is 
amended by adding at the end the following new 
item: 
‘‘Sec. 4980J. Requirements for employers to provide employees access to auto-
matic IRA arrangements.’’. 
(k) PREEMPTION OF CONFLICTING STATE LAWS.— 
The amendments made by this section shall supersede any 
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law of a State that would directly or indirectly prohibit 
or restrict the establishment or operation of an automatic 
IRA arrangement meeting the requirements of section 
408B of the Internal Revenue Code of 1986. Nothing in 
such amendments shall be construed to impair or super-
sede any State law to the extent it provides a remedy for 
the failure to make payroll deposit payments under any 
such automatic IRA arrangement within the period re-
quired under such section 408B. 
(l) EFFECTIVE DATE.—The amendments made by 
this section shall apply to calendar years beginning after 
December 31, 2014. 
SEC. 3. CREDIT FOR SMALL EMPLOYERS MAINTAINING 
AUTOMATIC IRA ARRANGEMENTS. 
(a) IN GENERAL.—Subpart D of part IV of sub-
chapter A of chapter 1 (relating to business related cred-
its) is amended by adding at the end the following new 
section: 
‘‘SEC. 45S. SMALL EMPLOYER AUTOMATIC IRA ARRANGE-
MENT. 
‘‘(a) GENERAL RULE.—For purposes of section 38, 
in the case of an eligible employer maintaining an auto-
matic IRA arrangement meeting the requirements of sec-
tion 408B (without regard to whether the employer is re-
quired to maintain the arrangement), the small employer 
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automatic IRA arrangement credit determined under this 
section for any taxable year is the amount determined 
under subsection (b). 
‘‘(b) AMOUNT OF CREDIT.— 
‘‘(1) IN GENERAL.—The amount of the credit 
determined under this section for any taxable year 
with respect to an eligible employer shall be the sum 
of— 
‘‘(A) $25 multiplied by the number of 
qualifying employees (within the meaning of 
section 408B(c)) for whom contributions are 
made under the automatic IRA arrangement re-
ferred to in subsection (a) for the calendar year 
in which the taxable year begins, plus 
‘‘(B) $500 for the taxable year which be-
gins in the first calendar year, and $250 for the 
taxable year which begins in the second cal-
endar year, in which the eligible employer main-
tains an automatic IRA arrangement meeting 
the requirements of section 408B. 
‘‘(2) LIMITATION.—No more than 10 qualifying 
employees may be taken into account under para-
graph (1)(A) for a taxable year. 
‘‘(3) DURATION
OF
CREDIT.—The credit de-
scribed in paragraph (1)(A) shall apply only for a 
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taxable year which begins in the first 6 calendar 
years in which the eligible employer maintains an 
automatic IRA arrangement meeting the require-
ments of section 408B. 
‘‘(4) COORDINATION
WITH
SMALL
EMPLOYER 
STARTUP CREDIT.— 
‘‘(A) No credit shall be allowed under this 
section to the employer for any taxable year if 
a credit is determined under section 45E with 
respect to the employer for the taxable year. 
‘‘(B) If the eligible employer maintains an 
automatic IRA arrangement meeting the re-
quirements of section 408B with respect to any 
of the first three calendar years for which the 
employer could adopt such an arrangement and 
subsequently adopts an eligible employer plan 
for its employees for any of those years which 
it maintains for such third taxable year, then 
section 45E(b)(1) shall be applied with respect 
to the eligible employer by replacing ‘2 taxable 
years’ with ‘3 taxable years’. 
‘‘(c) ELIGIBLE EMPLOYER.—For purposes of this 
section, the term ‘eligible employer’ means, with respect 
to any calendar year in which the taxable year begins, an 
employer which— 
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‘‘(1) maintains an automatic IRA arrangement 
meeting the requirements of section 408B, 
‘‘(2) on each day during the preceding calendar 
year, had no more than 100 employees, and 
‘‘(3) did not maintain a qualifying plan or ar-
rangement (described in section 408B(b)) during the 
portion of the calendar year preceding the adoption 
of the automatic IRA arrangement and the 2 pre-
ceding calendar years. 
‘‘(d) OTHER RULES.—For purposes of this section, 
the rules of section 45E(e) shall apply.’’. 
(b) CREDIT ALLOWED AS PART OF GENERAL BUSI-
NESS CREDIT.—Section 38(b) (defining current year busi-
ness credit) is amended by striking ‘‘plus’’ at the end of 
paragraph (35), by striking the period at the end of para-
graph (36) and inserting ‘‘, plus’’, and by adding at the 
end the following new paragraph: 
‘‘(37) in the case of an eligible employer (as de-
fined in section 45S(c)) maintaining an automatic 
IRA arrangement meeting the requirements of sec-
tion 408B, the small employer automatic IRA ar-
rangement credit determined under section 45S(a).’’. 
(c) CLERICAL AMENDMENT.—The table of sections 
for subpart D of part IV of subchapter A of chapter 1 
is amended by adding at the end the following new item: 
‘‘Sec. 45S. Small employer automatic IRA arrangement.’’. 
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(d) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2014. 
SEC. 4. STUDIES. 
(a) IN GENERAL.—The Secretary of the Treasury 
and the Secretary of Labor shall jointly conduct a separate 
study of the feasibility and desirability of each of the fol-
lowing: 
(1) Extending to automatic IRA arrangements 
spousal consent requirements similar to, or based 
on, those that apply under the Federal Employees’ 
Thrift Savings Plan, including consideration of 
whether modifications of such requirements are nec-
essary to apply them to automatic IRA arrange-
ments. 
(2) 
Establishing 
procedures 
under 
which 
amounts saved by employees in retirement bonds 
would be automatically transferred into alternative 
diversified investments provided by the private sector 
when employees’ automatic IRA balances reach a 
certain dollar level as well as procedures facilitating 
employees’ ability to transfer into such private sector 
investments. 
(b) STUDY OF CONSOLIDATION OF INDIVIDUAL RE-
TIREMENT PLANS.—The Secretary of the Treasury and 
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the Secretary of Labor shall jointly conduct a separate 
study of the feasibility and desirability of— 
(1) using data submitted on investments in in-
dividual retirement accounts and annuities to enable 
individuals with multiple such accounts and annu-
ities that include very small amounts to receive peri-
odic notices informing them about the location of 
these accounts and how such accounts and annuities 
might be consolidated, and 
(2) using investment arrangements associated 
with automatic IRAs to assist in addressing the 
problem of abandoned accounts. 
(c) REPORT.—Not later than 18 months after the 
date of the enactment of this Act, the Secretaries shall 
report the results of each study conducted under this sec-
tion, together with any recommendations for legislative 
changes, to the Committees on Finance and Health, Edu-
cation, Labor, and Pensions of the Senate and the Com-
mittees on Ways and Means and Education and the Work-
force of the House of Representatives. 
SEC. 5. ELIMINATING BARRIERS TO USE OF MULTIPLE EM-
PLOYER PLANS. 
By December 31, 2013, the Secretaries of the Treas-
ury and Labor shall— 
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(1) prescribe administrative guidance estab-
lishing conditions under which an employer partici-
pating in a plan described in section 413(c) of the 
Internal Revenue Code of 1986 shall not have any 
liability under title I of the Employee Retirement In-
come Security Act of 1974 with respect to the acts 
or omissions of one or more other participating em-
ployers, which regulations may require that the por-
tion of the plan attributable to such participating 
employers be spun off to plans maintained by such 
employers, 
(2) prescribe administrative guidance estab-
lishing conditions under which a plan described in 
section 413(c) of such Code may be treated as satis-
fying the qualification requirements of sections 
401(a) and 413(c) of such Code despite the violation 
of such requirements by one or more participating 
employers, including requiring, if appropriate, that 
the portion of the plan attributable to such partici-
pating employers be spun off to plans maintained by 
such employers, and 
(3) prescribe administrative guidance providing 
simplified means by which plans described in section 
413(c) of such Code may satisfy the requirements of 
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section 103 of the Employee Retirement Income Se-
curity Act of 1974. 
SEC. 6. INCREASE IN CREDIT LIMITATION FOR SMALL EM-
PLOYER PENSION PLAN STARTUP COSTS. 
(a) IN GENERAL.—Paragraph (1) of section 45E(b) 
is amended to read as follows: 
‘‘(1) for the first credit year and each of the 2 
taxable years immediately following the first credit 
year, the greater of— 
‘‘(A) $500, or 
‘‘(B) the lesser of— 
‘‘(i) $250 for each employee of the eli-
gible employer who is not a highly com-
pensated employee (as defined in section 
415(q)) and who is eligible to participate 
in the eligible employer plan maintained by 
the eligible employer, or 
‘‘(ii) $5,000.’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to taxable years beginning after 
December 31, 2013. 
Æ 
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