I 
114TH CONGRESS 
1ST SESSION H. R. 4067 
To amend the Internal Revenue Code of 1986 to encourage retirement savings 
by modifying requirements with respect to employer-established IRAs, 
and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
NOVEMBER 18, 2015 
Mr. KIND (for himself and Mr. REICHERT) introduced the following bill; which 
was referred to the Committee on Ways and Means, and in addition to 
the Committee on Education and the Workforce, for a period to be subse-
quently determined by the Speaker, in each case for consideration of such 
provisions as fall within the jurisdiction of the committee concerned 
A BILL 
To amend the Internal Revenue Code of 1986 to encourage 
retirement savings by modifying requirements with re-
spect to employer-established IRAs, and for other pur-
poses. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 
(a) SHORT TITLE.—This Act may be cited as the 
‘‘Small Businesses Add Value for Employees Act of 2015’’ 
or the ‘‘SAVE Act of 2015’’. 
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(b) TABLE OF CONTENTS.—The table of contents for 
this Act is as follows: 
Sec. 1. Short title; table of contents. 
Sec. 2. Elimination of restriction on SIMPLE IRA rollovers. 
Sec. 3. Allowing mid-year SIMPLE IRA plan termination. 
Sec. 4. Elimination of higher penalty on early SIMPLE IRA distributions. 
Sec. 5. Increase in contributions allowed for SIMPLE IRA. 
Sec. 6. SIMPLE 401(k) parity for additional nonelective employer contribu-
tions. 
Sec. 7. Automatic deferral IRAs. 
Sec. 8. Modification of automatic enrollment safe harbor. 
Sec. 9. Secure deferral arrangements. 
Sec. 10. Credit for employers with respect to modified safe harbor require-
ments. 
Sec. 11. Modification of regulations. 
Sec. 12. Limited transfer of unused balance in flexible spending arrangement. 
Sec. 13. Prior years compensation taken into account in determining maximum 
retirement savings deduction. 
Sec. 14. Expanding small employer pension plan startup cost credit. 
Sec. 15. Financial education. 
Sec. 16. Small employer plans. 
Sec. 17. Modification of ERISA rules relating to multiple employer defined con-
tribution plans. 
Sec. 18. Clarification of treatment of individual retirement plans with payroll 
deduction. 
Sec. 19. Disclosure regarding lifetime income. 
Sec. 20. Lifetime income safe harbor. 
SEC. 2. ELIMINATION OF RESTRICTION ON SIMPLE IRA 
ROLLOVERS. 
(a) IN GENERAL.—Section 408(d)(3) of the Internal 
Revenue Code of 1986 is amended by striking subpara-
graph (G). 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to distributions in taxable years 
beginning after the date of the enactment of this Act. 
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SEC. 3. ALLOWING MID-YEAR SIMPLE IRA PLAN TERMI-
NATION. 
(a) IN GENERAL.—Section 408(p) of the Internal 
Revenue Code of 1986 is amended by adding at the end 
the following new paragraph: 
‘‘(11) SPECIAL RULES RELATING TO MID-YEAR 
TERMINATION.— 
‘‘(A) IN
GENERAL.—An employer may 
elect to terminate (in such form and manner as 
the Secretary may provide) the qualified salary 
reduction arrangement of the employer at any 
time during the year. 
‘‘(B) PRORATION
AND
APPLICATION
OF 
QUALIFIED PLAN LIMITATION.—In the case of a 
year during which an employer terminates a 
qualified salary reduction arrangement before 
the end of such year— 
‘‘(i) the applicable dollar amount de-
termined under paragraph (2)(E) for such 
year and the applicable dollar amount de-
termined under section 414(v)(2)(B)(ii) for 
such year shall both be prorated to the 
date of such termination, 
‘‘(ii) for purposes of determining the 
compensation of an employee for such ar-
rangement for such year, the year of such 
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termination shall be treated as ending on 
the date of such termination, and 
‘‘(iii) subparagraph (D) of paragraph 
(2) shall not apply with respect to a quali-
fied plan maintained in such year only 
after the date of such termination. 
‘‘(C) MATCHING
CONTRIBUTION.—Termi-
nation of an arrangement under subparagraph 
(A) shall not be construed to modify the re-
quirement of subparagraph (A)(iii) (with re-
spect to any elective employer contributions) or 
(B) (with respect to nonelective contributions) 
of paragraph (2) made by the employer on be-
half of an employee during the portion of such 
year the qualified salary reduction arrangement 
is in effect.’’. 
(b) EFFECTIVE DATE.—The amendments made by 
this section shall apply to years beginning after the date 
of the enactment of this Act. 
SEC. 4. ELIMINATION OF HIGHER PENALTY ON EARLY SIM-
PLE IRA DISTRIBUTIONS. 
(a) IN GENERAL.—Section 72(t) of the Internal Rev-
enue Code of 1986 is amended by striking paragraph (6). 
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(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to distributions in taxable years 
beginning after the date of the enactment of this Act. 
SEC. 5. INCREASE IN CONTRIBUTIONS ALLOWED FOR SIM-
PLE IRA. 
(a) ADDITIONAL NONELECTIVE EMPLOYER CON-
TRIBUTIONS ALLOWED.— 
(1) IN GENERAL.—Section 408(p)(2)(A) of the 
Internal Revenue Code of 1986 is amended by strik-
ing ‘‘and’’ at the end of clause (iii), by redesignating 
clause (iv) as clause (v), and by inserting after 
clause (iii) the following new clause: 
‘‘(iv) the employer may make, in addi-
tion to any other contribution under this 
paragraph, nonelective contributions which 
meet the requirements of subparagraph 
(F), and’’. 
(2) REQUIREMENTS RELATING TO ADDITIONAL 
NONELECTIVE CONTRIBUTIONS.—Section 408(p)(2) 
of such Code is amended by adding at the end the 
following new subparagraph: 
‘‘(F) REQUIREMENTS RELATING TO ADDI-
TIONAL NONELECTIVE CONTRIBUTIONS UNDER 
SUBPARAGRAPH (A)(iv).— 
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‘‘(i) IN
GENERAL.—Nonelective con-
tributions meet the requirements of this 
subparagraph if— 
‘‘(I) such contributions do not ex-
ceed more than 10 percent of com-
pensation (subject to the limitation 
described in subparagraph (B)(ii)) for 
each employee who is eligible to par-
ticipate in the arrangement and who 
has at least $5,000 of compensation 
from the employer for the year, and 
‘‘(II) 
such 
contributions 
are 
made either as a uniform percentage 
of compensation or a uniform dollar 
amount for all participants. 
‘‘(ii) PERMITTED
DISPARITY
RULES 
NOT
APPLICABLE.—Section 401(l) shall 
not apply for purposes of determining 
whether the requirements of clause (i) are 
met.’’. 
(3) 
CONFORMING
AMENDMENT.—Section 
408(p)(2)(A)(v) of such Code, as redesignated by 
this section, is amended by striking ‘‘clause (i) or 
(iii)’’ and inserting ‘‘clause (i), (iii), or (iv)’’. 
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(b) INCREASE IN ELECTIVE CONTRIBUTION LIMITA-
TION.—Section 408(p)(2)(E) is amended to read as fol-
lows: 
‘‘(E) APPLICABLE DOLLAR AMOUNT.—For 
purposes of subparagraph (A)(ii), the applicable 
dollar amount shall be the applicable dollar 
amount in effect under section 402(g)(1).’’. 
(c) SIMPLE IRA SUBJECT TO DEFINED CONTRIBU-
TION PLAN LIMITATION.—Section 408(p) of such Code, 
as amended by section 3, is amended by adding at the 
end the following new paragraph: 
‘‘(12) SUBJECT
TO
DEFINED
CONTRIBUTION 
PLAN
LIMITATION.—An arrangement shall not be 
treated as a qualified salary reduction arrangement 
for any year if contributions with respect to any em-
ployee for the year exceed the limitation of para-
graph (1) of section 415(c) (relating to limitation for 
defined contribution plans).’’. 
(d) EFFECTIVE DATE.—The amendments made by 
this section shall apply to contributions for taxable years 
beginning after December 31, 2015. 
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SEC. 6. SIMPLE 401(k) PARITY FOR ADDITIONAL NONELEC-
TIVE EMPLOYER CONTRIBUTIONS. 
(a) IN GENERAL.—Section 401(k)(11)(B) of such 
Code is amended by adding at the end the following new 
clause: 
‘‘(iv) SPECIAL RULE FOR ADDITIONAL 
NONELECTIVE
EMPLOYER
CONTRIBU-
TIONS.—An arrangement shall not be 
treated as failing to meet the requirements 
of this subparagraph merely because under 
such arrangement the employer makes, in 
addition to any other contribution under 
this subparagraph, nonelective contribu-
tions of not more than 10 percent of com-
pensation for each employee who is eligible 
to participate in the arrangement and who 
has at least $5,000 of compensation from 
the employer for the year.’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to plan years beginning after De-
cember 31, 2015. 
SEC. 7. AUTOMATIC DEFERRAL IRAS. 
(a) IN GENERAL.—Subpart A of part I of subchapter 
D of chapter 1 of the Internal Revenue Code of 1986 is 
amended by inserting after section 408A the following new 
section: 
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‘‘SEC. 408B. AUTOMATIC DEFERRAL IRAS. 
‘‘(a) IN GENERAL.—An automatic deferral IRA shall 
be treated for purposes of this title in the same manner 
as an individual retirement plan. An automatic deferral 
IRA may also be treated as a Roth IRA for purposes of 
this title if it meets the requirements of section 408A. 
‘‘(b) AUTOMATIC DEFERRAL IRA.—For purposes of 
this section, the term ‘automatic deferral IRA’ means an 
individual retirement plan (as defined in section 
7701(a)(37)) with respect to which contributions are made 
under an arrangement which satisfies the requirements of 
paragraphs (1) through (4) of subsection (c). 
‘‘(c) AUTOMATIC DEFERRAL IRA ARRANGEMENTS.— 
‘‘(1) ENROLLMENT.— 
‘‘(A) IN GENERAL.—The requirements of 
this paragraph are met if each employee eligible 
to participate in the arrangement is treated as 
having elected to have the employer make pay-
ments as elective contributions to an automatic 
deferral IRA on behalf of such employee (which 
would have otherwise been made to the em-
ployee directly in cash) in an amount equal to 
so much of a qualified percentage of compensa-
tion of such employee as does not exceed the 
deductible amount for such year (within the 
meaning of section 219(b)). 
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‘‘(B) ELIGIBILITY.—For purposes of sub-
paragraph (A), an employee is eligible to par-
ticipate if such employee has at least $5,000 of 
compensation from the employer for the pre-
ceding year. 
‘‘(C) ELECTION OUT.—The election treat-
ed as having been made under subparagraph 
(A) shall cease to apply with respect to any em-
ployee who makes an affirmative election— 
‘‘(i) to not have such elective contribu-
tions made, or 
‘‘(ii) not later than the close of the 
30-day period beginning on the date of the 
first contribution with respect to such em-
ployee, to make elective contributions at a 
level specified in such affirmative election. 
‘‘(D) QUALIFIED PERCENTAGE.—For pur-
poses of this paragraph, the term ‘qualified per-
centage’ means, with respect to any employee, 
any percentage determined under the arrange-
ment if such percentage is applied uniformly, 
does not exceed 15 percent, and is at least— 
‘‘(i) 3 percent during the period end-
ing on the last day of the first plan year 
which begins after the date on which the 
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first elective contribution described in sub-
paragraph (A) is made with respect to 
such employee, and 
‘‘(ii) during any subsequent plan year, 
a percentage equal to— 
‘‘(I) 3 percent, plus 
‘‘(II) 1 percent multiplied by the 
number of plan years (but not more 
than 12) beginning after the plan year 
described in clause (i). 
‘‘(2) NOTICE.— 
‘‘(A) IN GENERAL.—The requirements of 
this paragraph are met if, within a reasonable 
period before the first day an employee is eligi-
ble to participate in the arrangement, the em-
ployee receives written notice of the employee’s 
rights and obligations under the arrangement 
which— 
‘‘(i) is sufficiently accurate and com-
prehensive to apprise the employee of such 
rights, and 
‘‘(ii) is written in a manner calculated 
to be understood by the average employee 
to whom the arrangement applies. 
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‘‘(B) TIMING
AND
CONTENT.—A notice 
shall not be treated as meeting the require-
ments of subparagraph (A) with respect to an 
employee unless— 
‘‘(i) the notice explains the employee’s 
right to elect not to have elective contribu-
tions made on the employee’s behalf (or to 
elect to have such contributions made at a 
different percentage), 
‘‘(ii) the notice explains how contribu-
tions made under the arrangement will be 
invested in the absence of any investment 
election by the employee, and 
‘‘(iii) the employee has a reasonable 
period of time after receipt of the notice 
described in clauses (i) and (ii) and before 
the first elective contribution is made to 
make either such election. 
‘‘(3) DEFAULT INVESTMENT ARRANGEMENT.— 
The requirements of this paragraph are met if— 
‘‘(A) in the absence of an investment elec-
tion by the employee with respect to the em-
ployee’s interest in the trust, such interest is in-
vested as provided in regulations prescribed 
pursuant to subparagraph (A) of section 
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404(c)(5) of the Employee Retirement Income 
Security Act of 1974, and 
‘‘(B) the employer provides each employee 
who has an interest in the trust, notice which 
meets the requirements of subparagraph (B) of 
such section. 
‘‘(4) ADMINISTRATIVE
REQUIREMENTS.—The 
requirements of this paragraph are met if— 
‘‘(A) an employer must make— 
‘‘(i) the elective contributions under 
paragraph (1)(A) not later than the close 
of the 30-day period following the last day 
of the month with respect to which the 
contributions are to be made, and 
‘‘(ii) a payment of interest at the 
overpayment rate (as determined under 
section 6621(a)) on any such elective con-
tribution made after the end of the period 
specified in clause (i), 
‘‘(B) an employee may elect to terminate 
participation in the arrangement at any time 
during the year, except that if the employee so 
terminates, the arrangement may provide that 
the employee may not elect to resume participa-
tion until the beginning of the next year, and 
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‘‘(C) each employee eligible to participate 
may elect, during the 30-day period before the 
beginning of any year, or to modify the amount 
subject to such arrangement, for such year.’’. 
(b) FAILURE TO MAKE TIMELY CONTRIBUTIONS.— 
Chapter 43 of such Code is amended by adding at the 
end the following: 
‘‘SEC. 4980J. FAILURE TO MAKE TIMELY CONTRIBUTIONS 
UNDER AUTOMATIC DEFERRAL IRAS. 
‘‘(a) INITIAL TAX.—If at any time during any taxable 
year an employer maintains an automatic deferral IRA 
which is part of a plan to which section 408B applies, 
there is hereby imposed on the employer for the taxable 
year a tax equal to 10 percent of the aggregate required 
contributions to such automatic deferral IRA for all plan 
years that are not paid by the date specified in section 
408B(c)(4)(A)(i) and that remain unpaid as of the end 
of any plan year ending with or within the taxable year. 
‘‘(b) ADDITIONAL TAX.—If a tax is imposed under 
subsection (a) on any unpaid required contribution and 
such amount remains unpaid as of the close of the taxable 
period, there is hereby imposed a tax equal to 100 percent 
of the unpaid required contribution to the extent not so 
paid or corrected. 
‘‘(c) LIMITATIONS ON AMOUNT OF TAX.— 
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‘‘(1) TAX NOT TO APPLY WHERE FAILURE NOT 
DISCOVERED
EXERCISING
REASONABLE
DILI-
GENCE.—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 did not know, and exercising reasonable 
diligence would not have known, that such failure 
existed. 
‘‘(2) TAX NOT TO APPLY TO FAILURES COR-
RECTED WITHIN 30 DAYS.—No tax shall be imposed 
by subsection (a) on any failure if— 
‘‘(A) such failure was due to reasonable 
cause and not to willful neglect, and 
‘‘(B) such failure is corrected during the 
30-day period beginning on the 1st date the 
employer knew, or exercising reasonable dili-
gence would have known, that such failure ex-
isted. 
‘‘(3) 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 rel-
ative to the failure involved.’’. 
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is the amount equal to the total of the employer’s match-
ing contributions under section 401(k)(14)(D) during the 
taxable year on behalf of employees who are not highly 
compensated employees, subject to the limitations of sub-
section (b). 
‘‘(b) LIMITATIONS.— 
‘‘(1) LIMITATION
WITH
RESPECT
TO
COM-
PENSATION.—The credit determined under sub-
section (a) with respect to contributions made on be-
half of an employee who is not a highly compensated 
employee shall not exceed 2 percent of the com-
pensation of such employee for the taxable year. 
‘‘(2) LIMITATION WITH RESPECT TO YEARS OF 
PARTICIPATION.—Credit shall be determined under 
subsection (a) with respect to contributions made on 
behalf of an employee who is not a highly com-
pensated employee only during the first 5 years such 
employee participates in the qualified automatic con-
tribution arrangement. 
‘‘(c) DEFINITIONS.— 
‘‘(1) IN GENERAL.—Any term used in this sec-
tion which is also used in section 401(k)(14) shall 
have the same meaning as when used in such sec-
tion. 
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