Securing a Strong Retirement Act of 2021
Bill: H.R.2954 | Sponsor: Rep. Neal, Richard E. (D-MA)
Policy area: Labor and Employment

Summary:
Securing a Strong Retirement Act of 2022
This bill makes various changes with respect to employer-sponsored retirement plans, including providing for the automatic enrollment of employees in certain plans and increasing the age at which participants are required to begin receiving mandatory distributions.

To increase retirement savings, simplify and clarify retirement plan 
                     rules, and for other purposes.

    Be it enacted by the Senate and House of Representatives 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 ``Securing a Strong 
Retirement Act of 2022''.
    (b) Table of Contents.--The table of contents for this Act is as 
follows:

Sec. 1. Short title; table of contents.
     TITLE I--EXPANDING COVERAGE AND INCREASING RETIREMENT SAVINGS

Sec. 101. Expanding automatic enrollment in retirement plans.
Sec. 102. Modification of credit for small employer pension plan 
                            startup costs.
Sec. 103. Promotion of Saver's Credit.
Sec. 104. Enhancement of Saver's Credit.
Sec. 105. Enhancement of 403(b) plans.
Sec. 106. Increase in age for required beginning date for mandatory 
                            distributions.
Sec. 107. Indexing IRA catch-up limit.
Sec. 108. Higher catch-up limit to apply at age 62, 63, and 64.
Sec. 109. Pooled employer plans modification.
Sec. 110. Multiple employer 403(b) plans.
Sec. 111. Treatment of student loan payments as elective deferrals for 
                            purposes of matching contributions.
Sec. 112. Application of credit for small employer pension plan startup 
                            costs to employers which join an existing 
                            plan.
Sec. 113. Military spouse retirement plan eligibility credit for small 
                            employers.
Sec. 114. Small immediate financial incentives for contributing to a 
                            plan.
Sec. 115. Safe harbor for corrections of employee elective deferral 
                            failures.
Sec. 116. Improving coverage for part-time workers.
Sec. 117. Deferral of tax for certain sales of employer stock to 
                            employee stock ownership plan sponsored by 
                            S corporation.
Sec. 118. Certain securities treated as publicly traded in case of 
                            employee stock ownership plans.
                    TITLE II--PRESERVATION OF INCOME

Sec. 201. Remove required minimum distribution barriers for life 
                            annuities.
Sec. 202. Qualifying longevity annuity contracts.
Sec. 203. Insurance-dedicated exchange-traded funds.
  TITLE III--SIMPLIFICATION AND CLARIFICATION OF RETIREMENT PLAN RULES

Sec. 301. Recovery of retirement plan overpayments.
Sec. 302. Reduction in excise tax on certain accumulations in qualified 
                            retirement plans.
Sec. 303. Performance benchmarks for asset allocation funds.
Sec. 304. Review and report to Congress relating to reporting and 
                            disclosure requirements.
Sec. 305. Eliminating unnecessary plan requirements related to 
                            unenrolled participants.
Sec. 306. Retirement savings lost and found.
Sec. 307. Updating dollar limit for mandatory distributions.
Sec. 308. Expansion of Employee Plans Compliance Resolution System.
Sec. 309. Eliminate the ``first day of the month'' requirement for 
                            governmental section 457(b) plans.
Sec. 310. One-time election for qualified charitable distribution to 
                            split-interest entity; increase in 
                            qualified charitable distribution 
                            limitation.
Sec. 311. Distributions to firefighters.
Sec. 312. Exclusion of certain disability-related first responder 
                            retirement payments.
Sec. 313. Individual retirement plan statute of limitations for excise 
                            tax on excess contributions and certain 
                            accumulations.
Sec. 314. Requirement to provide paper statements in certain cases.
Sec. 315. Separate application of top heavy rules to defined 
                            contribution plans covering excludible 
                            employees.
Sec. 316. Repayment of qualified birth or adoption distribution limited 
                            to 3 years.
Sec. 317. Employer may rely on employee certifying that deemed hardship 
                            distribution conditions are met.
Sec. 318. Penalty-free withdrawals from retirement plans for 
                            individuals in case of domestic abuse.
Sec. 319. Reform of family attribution rules.
Sec. 320. Amendments to increase benefit accruals under plan for 
                            previous plan year allowed until employer 
                            tax return due date.
Sec. 321. Retroactive first year elective deferrals for sole 
                            proprietors.
Sec. 322. Limiting cessation of IRA treatment to portion of account 
                            involved in a prohibited transaction.
Sec. 323. Review of pension risk transfer interpretive bulletin.
                     TITLE IV--TECHNICAL AMENDMENTS

Sec. 401. Amendments relating to Setting Every Community Up for 
                            Retirement Enhancement Act of 2019.
                   TITLE V--ADMINISTRATIVE PROVISIONS

Sec. 501. Provisions relating to plan amendments.
                      TITLE VI--REVENUE PROVISIONS

Sec. 601. Simple and SEP Roth IRAs.
Sec. 602. Hardship withdrawal rules for 403(b) plans.
Sec. 603. Elective deferrals generally limited to regular contribution 
                            limit.
Sec. 604. Optional treatment of employer matching contributions as Roth 
                            contributions.
                      TITLE VII--BUDGETARY EFFECTS

Sec. 701. Determination of budgetary effects.

     TITLE I--EXPANDING COVERAGE AND INCREASING RETIREMENT SAVINGS

SEC. 101. EXPANDING AUTOMATIC ENROLLMENT IN RETIREMENT PLANS.

    (a) In General.--Subpart B of part I of subchapter D of chapter 1 
of the Internal Revenue Code of 1986 is amended by inserting after 
section 414 the following new section:

``SEC. 414A. REQUIREMENTS RELATED TO AUTOMATIC ENROLLMENT.

    ``(a) In General.--Except as otherwise provided in this section--
            ``(1) an arrangement shall not be treated as a qualified 
        cash or deferred arrangement described in section 401(k) unless 
        such arrangement meets the automatic enrollment requirements of 
        subsection (b), and
            ``(2) an annuity contract otherwise described in section 
        403(b)(1) which is purchased under a salary reduction agreement 
        shall not be treated as described in such section unless such 
        agreement meets the automatic enrollment requirements of 
        subsection (b).
    ``(b) Automatic Enrollment Requirements.--
            ``(1) In general.--An arrangement or agreement meets the 
        requirements of this subsection if such arrangement or 
        agreement is an eligible automatic contribution arrangement (as 
        defined in section 414(w)(3)) which meets the requirements of 
        paragraphs (2) through (4).
            ``(2) Allowance of permissible withdrawals.--An eligible 
        automatic contribution arrangement meets the requirements of 
        this paragraph if such arrangement allows employees to make 
        permissible withdrawals (as defined in section 414(w)(2)).
            ``(3) Minimum contribution percentage.--
                    ``(A) In general.--An eligible automatic 
                contribution arrangement meets the requirements of this 
                paragraph if--
                            ``(i) the uniform percentage of 
                        compensation contributed by the participant 
                        under such arrangement during the first year of 
                        participation is not less than 3 percent and 
                        not more than 10 percent (unless the 
                        participant specifically elects not to have 
                        such contributions made or to have such 
                        contributions made at a different percentage), 
                        and
                            ``(ii) effective for the first day of each 
                        plan year starting after each completed year of 
                        participation under such arrangement such 
                        uniform percentage is increased by 1 percentage 
                        point (to at least 10 percent, but not more 
                        than 15 percent) unless the participant 
                        specifically elects not to have such 
                        contributions made or to have such 
                        contributions made at a different percentage.
                    ``(B) Initial reduced ceiling for certain plans.--
                In the case of any eligible automatic contribution 
                arrangement (other than an arrangement that meets the 
                requirements of paragraph (12) or (13) of section 
                401(k)), for plan years ending before January 1, 2025, 
                subparagraph (A)(ii) shall be applied by substituting 
                `10 percent' for `15 percent'.
            ``(4) Investment requirements.--An eligible automatic 
        contribution arrangement meets the requirements of this 
        paragraph if amounts contributed pursuant to such arrangement, 
        and for which no investment is elected by the participant, are 
        invested in accordance with the requirements of section 
        2550.404c-5 of title 29, Code of Federal Regulations (or any 
        successor regulations).
    ``(c) Exceptions.--For purposes of this section--
            ``(1) Simple plans.--Subsection (a) shall not apply to any 
        simple plan (within the meaning of section 401(k)(11)).
            ``(2) Exception for plans or arrangements established 
        before enactment of section.--
                    ``(A) In general.--Subsection (a) shall not apply 
                to--
                            ``(i) any qualified cash or deferred 
                        arrangement established before the date of the 
                        enactment of this section, or
                            ``(ii) any annuity contract purchased under 
                        a plan established before the date of the 
                        enactment of this section.
                    ``(B) Post-enactment adoption of multiple employer 
                plan.--Subparagraph (A) shall not apply in the case of 
                an employer adopting after such date of enactment a 
                plan maintained by more than one employer, and 
                subsection (a) shall apply with respect to such 
                employer as if such plan were a single plan.
            ``(3) Exception for governmental and church plans.--
        Subsection (a) shall not apply to any governmental plan (within 
        the meaning of section 414(d)) or any church plan (within the 
        meaning of section 414(e)).
            ``(4) Exception for new and small businesses.--
                    ``(A) New business.--Subsection (a) shall not apply 
                to any qualified cash or deferred arrangement, or any 
                annuity contract purchased under a plan, while the 
                employer maintaining such plan (and any predecessor 
                employer) has been in existence for less than 3 years.
                    ``(B) Small businesses.--Subsection (a) shall not 
                apply to any qualified cash or deferred arrangement, or 
                any annuity contract purchased under a plan, earlier 
                than the date that is 1 year after the close of the 
                first taxable year with respect to which the employer 
                maintaining the plan normally employed more than 10 
                employees.
                    ``(C) Treatment of multiple employer plans.--In the 
                case of a plan maintained by more than 1 employer, 
                subparagraphs (A) and (B) shall be applied separately 
                with respect to each such employer, and all such 
                employers to which subsection (a) applies (after the 
                application of this paragraph) shall be treated as 
                maintaining a separate plan for purposes of this 
                section.''.
    (b) Clerical Amendment.--The table of sections for subpart B of 
part I of subchapter D of chapter 1 of such Code is amended by 
inserting after the item relating to section 414 the following new 
item:

``Sec. 414A. Requirements related to automatic enrollment.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to plan years beginning after December 31, 2023.

SEC. 102. MODIFICATION OF CREDIT FOR SMALL EMPLOYER PENSION PLAN 
              STARTUP COSTS.

    (a) Increase in Credit Percentage for Smaller Employers.--Section 
45E(e) of the Internal Revenue Code of 1986 is amended by adding at the 
end the following new paragraph:
            ``(4) Increased credit for certain small employers.--In the 
        case of an employer which would be an eligible employer under 
        subsection (c) if section 408(p)(2)(C)(i) was applied by 
        substituting `50 employees' for `100 employees', subsection (a) 
        shall be applied by substituting `100 percent' for `50 
        percent'.''.
    (b) Additional Credit for Employer Contributions by Certain Small 
Employers.--Section 45E of such Code, as amended by subsection (a), is 
amended by adding at the end the following new subsection:
    ``(f) Additional Credit for Employer Contributions by Certain 
Eligible Employers.--
            ``(1) In general.--In the case of an eligible employer, the 
        credit allowed for the taxable year under subsection (a) 
        (determined without regard to this subsection) shall be 
        increased by an amount equal to the applicable percentage of 
        employer contributions (other than any elective deferrals (as 
        defined in section 402(g)(3)) by the employer to an eligible 
        employer plan (other than a defined benefit plan (as defined in 
        section 414(j))).
            ``(2) Limitations.--
                    ``(A) Dollar limitation.--The amount determined 
                under paragraph (1) (before the application of 
                subparagraph (B)) with respect to any employee of the 
                employer shall not exceed $1,000.
                    ``(B) Credit phase-in.--In the case of any eligible 
                employer which had for the preceding taxable year more 
                than 50 employees, the amount determined under 
                paragraph (1) (without regard to this subparagraph) 
                shall be reduced by an amount equal to the product of--
                            ``(i) the amount otherwise so determined 
                        under paragraph (1), multiplied by
                            ``(ii) a percentage equal to 2 percentage 
                        points for each employee of the employer for 
                        the preceding taxable year in excess of 50 
                        employees.
            ``(3) Applicable percentage.--For purposes of this section, 
        the applicable percentage for the taxable year during which the 
        eligible employer plan is established with respect to the 
        eligible employer shall be 100 percent, and for taxable years 
        thereafter shall be determined under the following table:
``In the case of the following      The applicable percentage shall be: 
        taxable year beginning 
        after the taxable year 
        during which plan is 
        established with respect to 
        the eligible employer: 
        1st................................................        100%
        2nd................................................         75%
        3rd................................................         50%
        4th................................................         25%
        Any taxable year thereafter........................          0%

            ``(4) Determination of eligible employer; number of 
        employees.--For purposes of this subsection, whether an 
        employer is an eligible employer and the number of employees of 
        an employer shall be determined under the rules of subsection 
        (c), except that paragraph (2) thereof shall only apply to the 
        taxable year during which the eligible employer plan to which 
        this section applies is established with respect to the 
        eligible employer.''.
    (c) Disallowance of Deduction.--Section 45E(e)(2) of such Code is 
amended to read as follows:
            ``(2) Disallowance of deduction.--No deduction shall be 
        allowed--
                    ``(A) for that portion of the qualified startup 
                costs paid or incurred for the taxable year which is 
                equal to so much of the portion of the credit 
                determined under subsection (a) as is properly 
                allocable to such costs, and
                    ``(B) for that portion of the employer 
                contributions by the employer for the taxable year 
                which is equal to so much of the credit increase 
                determined under subsection (f) as is properly 
                allocable to such contributions.''.
    (d) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2022.

SEC. 103. PROMOTION OF SAVER'S CREDIT.

    (a) In General.--The Secretary of the Treasury shall take such 
steps as the Secretary determines are necessary and appropriate to 
increase public awareness of the credit provided under section 25B of 
the Internal Revenue Code of 1986.
    (b) Report to Congress.--
            (1) In general.--Not later than 90 days after the date of 
        the enactment of this Act, the Secretary shall provide a report 
        to Congress to summarize the anticipated promotion efforts of 
        the Treasury under subsection (a).
            (2) Contents.--Such report shall include--
                    (A) a description of plans for--
                            (i) the development and distribution of 
                        digital and print materials, including the 
                        distribution of such materials to States for 
                        participants in State facilitated retirement 
                        savings programs, and
                            (ii) the translation of such materials into 
                        the 10 most commonly spoken languages in the 
                        United States after English (as determined by 
                        reference to the most recent American Community 
                        Survey of the Bureau of the Census), and
                    (B) such other information as the Secretary 
                determines is necessary

SEC. 104. ENHANCEMENT OF SAVER'S CREDIT.

    (a) 50 Percent Credit Rate.--Section 25B(a) of the Internal Revenue 
Code of 1986 is amended by striking ``the applicable percentage'' and 
inserting ``50 percent''.
    (b) Adjusted Gross Income Phaseouts.--Section 25B(b) of such Code 
is amended to read as follows:
    ``(b) Limitation.--For purposes of this section--
            ``(1) In general.--The amount of credit allowable under 
        subsection (a) (determined without regard to this subsection) 
        shall be reduced (but not below zero) by an amount which bears 
        the same ratio to the credit otherwise so allowable as--
                    ``(A) the excess (if any) of--
                            ``(i) adjusted gross income of the 
                        taxpayer, over
                            ``(ii) the threshold amount, bears to
                    ``(B) the phaseout amount.
            ``(2) Threshold amount.--The term `threshold amount' 
        means--
                    ``(A) in the case of a joint return or a surviving 
                spouse (as defined in section 2(a)), $48,000,
                    ``(B) in the case of a head of household, 75 
                percent of the amount in effect for the taxable year 
                under subparagraph (A), and
                    ``(C) in the case of any other individual, 50 
                percent of the amount in effect for the taxable year 
                under subparagraph (A).
            ``(3) Phaseout amount.--The term `phaseout amount' means--
                    ``(A) in the case of a joint return or a surviving 
                spouse (as defined in 2(a)), $35,000,
                    ``(B) in the case of a head of household (as 
                defined in section 2(b)), 75 percent of the amount in 
                effect for the taxable year under subparagraph (A), and
                    ``(C) in the case of any other individual, 50 
                percent of the amount in effect for the taxable year 
                under subparagraph (A).
            ``(4) Inflation adjustment.--
                    ``(A) In general.--In the case of any taxable year 
                beginning in a calendar year after 2026, the $48,000 
                dollar amount in paragraph (2) and the $35,000 in 
                paragraph (3) shall each be increased by an amount 
                equal to--
                            ``(i) such dollar amount, multiplied by
                            ``(ii) the cost-of-living adjustment 
                        determined under section 1(f)(3) for the 
                        calendar year in which the taxable year begins, 
                        determined by substituting `calendar year 2022' 
                        for `calendar year 2016' in subparagraph 
                        (A)(ii) thereof.
                    ``(B) Rounding.--Any increase determined under 
                subparagraph (A) that is not a multiple of $500 shall 
                be rounded to the nearest multiple of $500.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2026.

SEC. 105. ENHANCEMENT OF 403(B) PLANS.

    (a) In General.--Section 403(b)(7)(A) of the Internal Revenue Code 
of 1986 is amended by striking ``if the amounts are to be invested in 
regulated investment company stock to be held in that custodial 
account'' and inserting ``if the amounts are to be held in that 
custodial account and invested in regulated investment company stock or 
a group trust intended to satisfy the requirements of Internal Revenue 
Service Revenue Ruling 81-100 (or any successor guidance)''.
    (b) Conforming Amendment.--The heading of paragraph (7) of section 
403(b) of such Code is amended by striking ``for regulated investment 
company stock''.
    (c) Effective Date.--The amendments made by this section shall 
apply to amounts invested after December 31, 2022.

SEC. 106. INCREASE IN AGE FOR REQUIRED BEGINNING DATE FOR MANDATORY 
              DISTRIBUTIONS.

    (a) In General.--Section 401(a)(9)(C)(i)(I) of the Internal Revenue 
Code of 1986 is amended by striking ``age 72'' and inserting ``the 
applicable age''.
    (b) Spouse Beneficiaries; Special Rule for Owners.--Subparagraphs 
(B)(iv)(I) and (C)(ii)(I) of section 401(a)(9) of such Code are each 
amended by striking ``age 72'' and inserting ``the applicable age''.
    (c) Applicable Age.--Section 401(a)(9)(C) of such Code is amended 
by adding at the end the following new clause:
                            ``(v) Applicable age.--
                                    ``(I) In the case of an individual 
                                who attains age 72 after December 31, 
                                2022, and age 73 before January 1, 
                                2030, the applicable age is 73.
                                    ``(II) In the case of an individual 
                                who attains age 73 after December 31, 
                                2029, and age 74 before January 1, 
                                2033, the applicable age is 74.
                                    ``(III) In the case of an 
                                individual who attains age 74 after 
                                December 31, 2032, the applicable age 
                                is 75.''.
    (d) Conforming Amendments.--The last sentence of section 408(b) of 
such Code is amended by striking ``age 72'' and inserting ``the 
applicable age (determined under section 401(a)(9)(C)(v) for the 
calendar year in which such taxable year begins)''.
    (e) Effective Date.--The amendments made by this section shall 
apply to distributions required to be made after December 31, 2022, 
with respect to individuals who attain age 72 after such date.

SEC. 107. INDEXING IRA CATCH-UP LIMIT.

    (a) In General.--Subparagraph (C) of section 219(b)(5) of the 
Internal Revenue Code of 1986 is amended by adding at the end the 
following new clause:
                            ``(iii) Indexing of catch-up limitation.--
                        In the case of any taxable year beginning in a 
                        calendar year after 2023, the $1,000 amount 
                        under subparagraph (B)(ii) shall be increased 
                        by an amount equal to--
                                    ``(I) such dollar amount, 
                                multiplied by
                                    ``(II) the cost-of-living 
                                adjustment determined under section 
                                1(f)(3) for the calendar year in which 
                                the taxable year begins, determined by 
                                substituting `calendar year 2022' for 
                                `calendar year 2016' in subparagraph 
                                (A)(ii) thereof.
                        If any amount after adjustment under the 
                        preceding sentence is not a multiple of $100, 
                        such amount shall be rounded to the next lower 
                        multiple of $100.''.
    (b) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2023.

SEC. 108. HIGHER CATCH-UP LIMIT TO APPLY AT AGE 62, 63, AND 64.

    (a) In General.--
            (1) Plans other than simple plans.--Section 414(v)(2)(B)(i) 
        of the Internal Revenue Code of 1986 is amended by inserting 
        the following before the period: ``($10,000, in the case of an 
        eligible participant who would attain age 62, but not age 65, 
        before the close of the taxable year)''.
            (2) Simple plans.--Section 414(v)(2)(B)(ii) of such Code is 
        amended by inserting the following before the period: 
        ``($5,000, in the case of an eligible participant who would 
        attain age 62, but not age 65, before the close of the taxable 
        year)''.
    (b) Cost-of-living Adjustments.--Subparagraph (C) of section 
414(v)(2) of such Code is amended by adding at the end the following: 
``In the case of a year beginning after December 31, 2023, the 
Secretary shall adjust annually the $10,000 amount in subparagraph 
(B)(i) and the $5,000 amount in subparagraph (B)(ii) for increases in 
the cost-of-living at the same time and in the same manner as 
adjustments under the preceding sentence; except that the base period 
taken into account shall be the calendar quarter beginning July 1, 
2022.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2023.

SEC. 109. POOLED EMPLOYER PLANS MODIFICATION.

    (a) In General.--Section 3(43)(B)(ii) of the Employee Retirement 
Income Security Act of 1974 (29 U.S.C. 1002(43)(B)(ii)) is amended to 
read as follows:
                            ``(ii) designate a named fiduciary (other 
                        than an employer in the plan) to be responsible 
                        for collecting contributions to the plan and 
                        require such fiduciary to implement written 
                        contribution collection procedures that are 
                        reasonable, diligent, and systematic;''.
    (b) Effective Date.--The amendments made by this section shall 
apply to plan years beginning after December 31, 2022.

SEC. 110. MULTIPLE EMPLOYER 403(B) PLANS.

    (a) In General.--Section 403(b) of the Internal Revenue Code of 
1986 is amended by adding at the end the following new paragraph:
            ``(15) Multiple employer plans.--
                    ``(A) In general.--Except in the case of a church 
                plan, this subsection shall not be treated as failing 
                to apply to an annuity contract solely by reason of 
                such contract being purchased under a plan maintained 
                by more than 1 employer.
                    ``(B) Treatment of employers failing to meet 
                requirements of plan.--
                            ``(i) In general.--In the case of a plan 
                        maintained by more than 1 employer, this 
                        subsection shall not be treated as failing to 
                        apply to an annuity contract held under such 
                        plan merely because of one or more employers 
                        failing to meet the requirements of this 
                        subsection if such plan satisfies rules similar 
                        to the rules of section 413(e)(2) with respect 
                        to any such employer failure.
                            ``(ii) Additional requirements in case of 
                        non-governmental plans.--A plan shall not be 
                        treated as meeting the requirements of this 
                        subparagraph unless the plan satisfies rules 
                        similar to the rules of subparagraph (A) or (B) 
                        of section 413(e)(1), except in the case of a 
                        multiple employer plan maintained solely by any 
                        of the following: A State, a political 
                        subdivision of a State, or an agency or 
                        instrumentality of any one or more of the 
                        foregoing.''.
    (b) Annual Registration for 403(b) Multiple Employer Plan.--Section 
6057 of such Code is amended by redesignating subsection (g) as 
subsection (h) and by inserting after subsection (f) the following new 
subsection:
    ``(g) 403(b) Multiple Employer Plans Treated as One Plan.--In the 
case of annuity contracts to which this section applies and to which 
section 403(b) applies by reason of the plan under which such contracts 
are purchased meeting the requirements of paragraph (15) thereof, such 
plan shall be treated as a single plan for purposes of this section.''.
    (c) Annual Information Returns for 403(b) Multiple Employer Plan.--
Section 6058 of such Code is amended by redesignating subsection (f) as 
subsection (g) and by inserting after subsection (e) the following new 
subsection:
    ``(f) 403(b) Multiple Employer Plans Treated as One Plan.--In the 
case of annuity contracts to which this section applies and to which 
section 403(b) applies by reason of the plan under which such contracts 
are purchased meeting the requirements of paragraph (15) thereof, such 
plan shall be treated as a single plan for purposes of this section.''.
    (d) Amendments to Employee Retirement Income Security Act of 
1974.--
            (1) In general.--Section 3(43)(A) of the Employee 
        Retirement Income Security Act of 1974 is amended--
                    (A) in clause (ii), by striking ``section 501(a) of 
                such Code or'' and inserting ``section 501(a) of such 
                Code, a plan that consists of contracts described in 
                section 403(b) of such Code, or''; and
                    (B) in the flush text at the end, by striking ``the 
                plan.'' and inserting ``the plan, but such term shall 
                include any program (other than a governmental plan) 
                maintained for the benefit of the employees of more 
                than 1 employer that consists of contracts described in 
                section 403(b) of such Code and that meets the 
                requirements of subparagraph (A) or (B) of section 
                413(e)(1) of such Code.''.
            (2) Conforming amendments.--Sections 3(43)(B)(v)(II) and 
        3(44)(A)(i)(I) of the Employee Retirement Income Security Act 
        of 1974 are each amended by striking ``section 401(a) of such 
        Code or'' and inserting ``section 401(a) of such Code, a plan 
        that consists of contracts described in section 403(b) of such 
        Code, or''.
    (e) Regulations Relating to Employer Failure to Meet Multiple 
Employer Plan Requirements.--The Secretary of the Treasury (or the 
Secretary's delegate) shall prescribe such regulations as may be 
necessary to clarify, in the case of plans to which section 403(b)(15) 
of the Internal Revenue Code of 1986 applies, the treatment of an 
employer departing such plan in connection with such employer's failure 
to meet multiple employer plan requirements.
    (f) Modification of Model Plan Language, etc.--
            (1) Plan notifications.--The Secretary of the Treasury (or 
        the Secretary's delegate) shall modify the model plan language 
        published under section 413(e)(5) of the Internal Revenue Code 
        of 1986 to include language that notifies participating 
        employers described in section 501(c)(3), and which are exempt 
        from tax under section 501(a), that the plan is subject to the 
        Employee Retirement Income Security Act of 1974 and that such 
        employer is a plan sponsor with respect to its employees 
        participating in the multiple employer plan and, as such, has 
        certain fiduciary duties with respect to the plan and to its 
        employees.
            (2) Model plans for multiple employer 403(b) non-
        governmental plans.--For plans to which section 403(b)(15)(A) 
        of the Internal Revenue Code of 1986 applies (other than a plan 
        maintained for its employees by a State, a political 
        subdivision of a State, or an agency or instrumentality of any 
        one or more of the foregoing), the Secretary of the Treasury 
        shall publish model plan language similar to model plan 
        language published under section 413(e)(5) of such Code.
            (3) Educational outreach to employers exempt from tax.--The 
        Secretary of the Treasury (or the Secretary's delegate) shall 
        provide education and outreach to increase awareness to 
        employers described in section 501(c)(3) of the Internal 
        Revenue Code of 1986, and which are exempt from tax under 
        section 501(a) of such Code, that multiple employer plans are 
        subject to the Employee Retirement Income Security Act of 1974 
        and that such employer is a plan sponsor with respect to its 
        employees participating in the multiple employer plan and, as 
        such, has certain fiduciary duties with respect to the plan and 
        to its employees.
    (g) No Inference With Respect to Church Plans.--Regarding any 
application of section 403(b) of the Internal Revenue Code of 1986 to 
an annuity contract purchased under a church plan (as defined in 
section 414(e) of such Code) maintained by more than 1 employer, or to 
any application of rules similar to section 413(e) of such Code to such 
a plan, no inference shall be made from section 403(b)(15)(A) of such 
Code (as added by this Act) not applying to such plans.
    (h) Effective Date.--
            (1) In general.--The amendments made by this section shall 
        apply to plan years beginning after December 31, 2022.
            (2) Rule of construction.--Nothing in the amendments made 
        by subsection (a) shall be construed as limiting the authority 
        of the Secretary of the Treasury or the Secretary's delegate 
        (determined without regard to such amendment) to provide for 
        the proper treatment of a failure to meet any requirement 
        applicable under the Internal Revenue Code of 1986 with respect 
        to one employer (and its employees) in the case of a plan to 
        which section 403(b)(15) of the Internal Revenue Code of 1986 
        applies.

SEC. 111. TREATMENT OF STUDENT LOAN PAYMENTS AS ELECTIVE DEFERRALS FOR 
              PURPOSES OF MATCHING CONTRIBUTIONS.

    (a) In General.--Section 401(m)(4)(A) of the Internal Revenue Code 
of 1986 is amended by striking ``and'' at the end of clause (i), by 
striking the period at the end of clause (ii) and inserting ``, and'', 
and by adding at the end the following new clause:
                            ``(iii) subject to the requirements of 
                        paragraph (13), any employer contribution made 
                        to a defined contribution plan on behalf of an 
                        employee on account of a qualified student loan 
                        payment.''.
    (b) Qualified Student Loan Payment.--Section 401(m)(4) of such Code 
is amended by adding at the end the following new subparagraph:
                    ``(D) Qualified student loan payment.--The term 
                `qualified student loan payment' means a payment made 
                by an employee in repayment of a qualified education 
                loan (as defined section 221(d)(1)) incurred by the 
                employee to pay qualified higher education expenses, 
                but only--
                            ``(i) to the extent such payments in the 
                        aggregate for the year do not exceed an amount 
                        equal to--
                                    ``(I) the limitation applicable 
                                under section 402(g) for the year (or, 
                                if lesser, the employee's compensation 
                                (as defined in section 415(c)(3)) for 
                                the year), reduced by
                                    ``(II) the elective deferrals made 
                                by the employee for such year, and
                            ``(ii) if the employee certifies to the 
                        employer making the matching contribution under 
                        this paragraph that such payment has been made 
                        on such loan.
                For purposes of this subparagraph, the term `qualified 
                higher education expenses' means the cost of attendance 
                (as defined in section 472 of the Higher Education Act 
                of 1965, as in effect on the day before the date of the 
                enactment of the Taxpayer Relief Act of 1997) at an 
                eligible educational institution (as defined in section 
                221(d)(2)).''.
    (c) Matching Contributions for Qualified Student Loan Payments.--
Section 401(m) of such Code is amended by redesignating paragraph (13) 
as paragraph (14), and by inserting after paragraph (12) the following 
new paragraph:
            ``(13) Matching contributions for qualified student loan 
        payments.--
                    ``(A) In general.--For purposes of paragraph 
                (4)(A)(iii), an employer contribution made to a defined 
                contribution plan on account of a qualified student 
                loan payment shall be treated as a matching 
                contribution for purposes of this title if--
                            ``(i) the plan provides matching 
                        contributions on account of elective deferrals 
                        at the same rate as contributions on account of 
                        qualified student loan payments,
                            ``(ii) the plan provides matching 
                        contributions on account of qualified student 
                        loan payments only on behalf of employees 
                        otherwise eligible to receive matching 
                        contributions on account of elective deferrals,
                            ``(iii) under the plan, all employees 
                        eligible to receive matching contributions on 
                        account of elective deferrals are eligible to 
                        receive matching contributions on account of 
                        qualified student loan payments, and
                            ``(iv) the plan provides that matching 
                        contributions on account of qualified student 
                        loan payments vest in the same manner as 
                        matching contributions on account of elective 
                        deferrals.
                    ``(B) Treatment for purposes of nondiscrimination 
                rules, etc.--
                            ``(i) Nondiscrimination rules.--For 
                        purposes of subparagraph (A)(iii), subsection 
                        (a)(4), and section 410(b), matching 
                        contributions described in paragraph 
                        (4)(A)(iii) shall not fail to be treated as 
                        available to an employee solely because such 
                        employee does not have debt incurred under a 
                        qualified education loan (as defined in section 
                        221(d)(1)).
                            ``(ii) Student loan payments not treated as 
                        plan contribution.--Except as provided in 
                        clause (iii), a qualified student loan payment 
                        shall not be treated as a contribution to a 
                        plan under this title.
                            ``(iii) Matching contribution rules.--
                        Solely for purposes of meeting the requirements 
                        of paragraph (11)(B) or (12) of this 
                        subsection, or paragraph (11)(B)(i)(II), 
                        (12)(B), or (13)(D) of subsection (k), a plan 
                        may treat a qualified student loan payment as 
                        an elective deferral or an elective 
                        contribution, whichever is applicable.
                            ``(iv) Actual deferral percentage 
                        testing.--In determining whether a plan meets 
                        the requirements of subsection (k)(3)(A)(ii) 
                        for a plan year, the plan may apply the 
                        requirements of such subsection separately with 
                        respect to all employees who receive matching 
                        contributions described in paragraph 
                        (4)(A)(iii) for the plan year.
                    ``(C) Employer may rely on employee 
                certification.--The employer may rely on an employee 
                certification of payment under paragraph (4)(D)(ii).''.
    (d) Simple Retirement Accounts.--Section 408(p)(2) of such Code is 
amended by adding at the end the following new subparagraph:
                    ``(F) Matching contributions for qualified student 
                loan payments.--
                            ``(i) In general.--Subject to the rules of 
                        clause (iii), an arrangement shall not fail to 
                        be treated as meeting the requirements of 
                        subparagraph (A)(iii) solely because under the 
                        arrangement, solely for purposes of such 
                        subparagraph, qualified student loan payments 
                        are treated as amounts elected by the employee 
                        under subparagraph (A)(i)(I) to the extent such 
                        payments do not exceed--
                                    ``(I) the applicable dollar amount 
                                under subparagraph (E) (after 
                                application of section 414(v)) for the 
                                year (or, if lesser, the employee's 
                                compensation (as defined in section 
                                415(c)(3)) for the year), reduced by
                                    ``(II) any other amounts elected by 
                                the employee under subparagraph 
                                (A)(i)(I) for the year.
                            ``(ii) Qualified student loan payment.--For 
                        purposes of this subparagraph--
                                    ``(I) In general.--The term 
                                `qualified student loan payment' means 
                                a payment made by an employee in 
                                repayment of a qualified education loan 
                                (as defined in section 221(d)(1)) 
                                incurred by the employee to pay 
                                qualified higher education expenses, 
                                but only if the employee certifies to 
                                the employer making the matching 
                                contribution that such payment has been 
                                made on such a loan.
                                    ``(II) Qualified higher education 
                                expenses.--The term `qualified higher 
                                education expenses' has the same 
                                meaning as when used in section 
                                401(m)(4)(D).
                            ``(iii) Applicable rules.--Clause (i) shall 
                        apply to an arrangement only if, under the 
                        arrangement--
                                    ``(I) matching contributions on 
                                account of qualified student loan 
                                payments are provided only on behalf of 
                                employees otherwise eligible to elect 
                                contributions under subparagraph 
                                (A)(i)(I), and
                                    ``(II) all employees otherwise 
                                eligible to participate in the 
                                arrangement are eligible to receive 
                                matching contributions on account of 
                                qualified student loan payments.''.
    (e) 403(b) Plans.--Section 403(b)(12)(A) of such Code is amended by 
adding at the end the following: ``The fact that the employer offers 
matching contributions on account of qualified student loan payments as 
described in section 401(m)(13) shall not be taken into account in 
determining whether the arrangement satisfies the requirements of 
clause (ii) (and any regulation thereunder).''.
    (f) 457(b) Plans.--Section 457(b) of such Code is amended by adding 
at the end the following: ``A plan which is established and maintained 
by an employer which is described in subsection (e)(1)(A) shall not be 
treated as failing to meet the requirements of this subsection solely 
because the plan, or another plan maintained by the employer which 
meets the requirements of section 401(a) or 403(b), provides for 
matching contributions on account of qualified student loan payments as 
described in section 401(m)(13).''.
    (g) Regulatory Authority.--The Secretary shall prescribe 
regulations for purposes of implementing the amendments made by this 
section, including regulations--
            (1) permitting a plan to make matching contributions for 
        qualified student loan payments, as defined in sections 
        401(m)(4)(D) and 408(p)(2)(F) of the Internal Revenue Code of 
        1986, as added by this section, at a different frequency than 
        matching contributions are otherwise made under the plan, 
        provided that the frequency is not less than annually;
            (2) permitting employers to establish reasonable procedures 
        to claim matching contributions for such qualified student loan 
        payments under the plan, including an annual deadline (not 
        earlier than 3 months after the close of each plan year) by 
        which a claim must be made; and
            (3) promulgating model amendments which plans may adopt to 
        implement matching contributions on such qualified student loan 
        payments for purposes of sections 401(m), 408(p), 403(b), and 
        457(b) of the Internal Revenue Code of 1986.
    (h) Effective Date.--The amendments made by this section shall 
apply to contributions made for plan years beginning after December 31, 
2022.

SEC. 112. APPLICATION OF CREDIT FOR SMALL EMPLOYER PENSION PLAN STARTUP 
              COSTS TO EMPLOYERS WHICH JOIN AN EXISTING PLAN.

    (a) In General.--Section 45E(d)(3)(A) of the Internal Revenue Code 
of 1986 is amended by striking ``effective'' and inserting ``effective 
with respect to the eligible employer''.
    (b) Effective Date.--The amendment made by this section shall take 
effect as if included in the enactment of section 104 of the Setting 
Every Community Up for Retirement Enhancement Act of 2019.

SEC. 113. MILITARY SPOUSE RETIREMENT PLAN ELIGIBILITY CREDIT FOR SMALL 
              EMPLOYERS.

    (a) In General.--Subpart D of part IV of subchapter A of chapter 1 
of the Internal Revenue Code of 1986 is amended by adding at the end 
the following new section:

``SEC. 45U. MILITARY SPOUSE RETIREMENT PLAN ELIGIBILITY CREDIT FOR 
              SMALL EMPLOYERS.

    ``(a) In General.--For purposes of section 38, in the case of any 
eligible small employer, the military spouse retirement plan 
eligibility credit determined under this section for any taxable year 
is an amount equal to the sum of--
            ``(1) $250 with respect to each military spouse who is an 
        employee of such employer and who is eligible to participate in 
        an eligible defined contribution plan of such employer at any 
        time during such taxable year, plus
            ``(2) so much of the contributions made by such employer to 
        all such plans with respect to such employee during such 
        taxable year as do not exceed $250.
    ``(b) Limitation.--An individual shall only be taken into account 
as a military spouse under subsection (a) for the taxable year which 
includes the date on which such individual began participating in the 
eligible defined contribution plan of the employer and the 2 succeeding 
taxable years.
    ``(c) Eligible Small Employer.--For purposes of this section--
            ``(1) In general.--The term `eligible small employer' means 
        an eligible employer (as defined in section 
        408(p)(2)(C)(i)(I)).
            ``(2) Application of 2-year grace period.--A rule similar 
        to the rule of section 408(p)(2)(C)(i)(II) shall apply for 
        purposes of this section.
    ``(d) Military Spouse.--For purposes of this section--
            ``(1) In general.--The term `military spouse' means, with 
        respect to any employer, any individual who is married (within 
        the meaning of section 7703 as of the first date that the 
        employee is employed by the employer) to an individual who is a 
        member of the uniformed services (as defined section 101(a)(5) 
        of title 10, United States Code). For purposes of this section, 
        an employer may rely on an employee's certification that such 
        employee's spouse is a member of the uniformed services if such 
        certification provides the name, rank, and service branch of 
        such spouse.
            ``(2) Exclusion of highly compensated employees.--With 
        respect to any employer, the term `military spouse' shall not 
        include any individual if such individual is a highly 
        compensated employee of such employer (within the meaning of 
        section 414(q)).
    ``(e) Eligible Defined Contribution Plan.--For purposes of this 
section, the term `eligible defined contribution plan' means, with 
respect to any eligible small employer, any defined contribution plan 
(as defined in section 414(i)) of such employer if, under the terms of 
such plan--
            ``(1) military spouses employed by such employer are 
        eligible to participate in such plan not later than the date 
        which is 2 months after the date on which such individual 
        begins employment with such employer, and
            ``(2) military spouses who are eligible to participate in 
        such plan--
                    ``(A) are immediately eligible to receive an amount 
                of employer contributions under such plan which is not 
                less the amount of such contributions that a similarly 
                situated participant who is not a military spouse would 
                be eligible to receive under such plan after 2 years of 
                service, and
                    ``(B) immediately have a nonforfeitable right to 
                the employee's accrued benefit derived from employer 
                contributions under such plan.
    ``(f) Aggregation Rule.--All persons treated as a single employer 
under subsection (b), (c), (m), or (o) of section 414 shall be treated 
as one employer for purposes of this section.''.
    (b) Credit Allowed as Part of General Business Credit.--Section 
38(b) of such Code is amended by striking ``plus'' at the end of 
paragraph (32), by striking the period at the end of paragraph (33) and 
inserting ``, plus'', and by adding at the end the following new 
paragraph:
            ``(34) in the case of an eligible small employer (as 
        defined in section 45U(c)), the military spouse retirement plan 
        eligibility credit determined under section 45U(a).''.
    (c) Specified Credit for Purposes of Certified Professional 
Employer Organizations.--Section 3511(d)(2) of such Code is amended by 
redesignating subparagraphs (F), (G), and (H) as subparagraphs (G), 
(H), and (I), respectively, and by inserting after subparagraph (E) the 
following new subparagraph:
                    ``(F) section 45U (military spouse retirement plan 
                eligibility credit),''.
    (d) Clerical Amendment.--The table of sections for subpart D of 
part IV of subchapter A of chapter 1 of such Code is amended by adding 
at the end the following new item:

``Sec. 45U. Military spouse retirement plan eligibility credit for 
                            small employers.''.
    (e) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after the date of the enactment of 
this Act.

SEC. 114. SMALL IMMEDIATE FINANCIAL INCENTIVES FOR CONTRIBUTING TO A 
              PLAN.

    (a) In General.--Subparagraph (A) of section 401(k)(4) of the 
Internal Revenue Code of 1986 is amended by inserting ``(other than a 
de minimis financial incentive)'' after ``any other benefit''.
    (b) Section 403(b) Plans.--Subparagraph (A) of section 403(b)(12) 
of such Code, as amended by the preceding provisions of this Act, is 
amended by adding at the end the following: ``A plan shall not fail to 
satisfy clause (ii) solely by reason of offering a de minimis financial 
incentive to employees to elect to have the employer make contributions 
pursuant to a salary reduction agreement.''.
    (c) Exemption From Prohibited Transaction Rules.--Subsection (d) of 
section 4975 of such Code is amended by striking ``or'' at the end of 
paragraph (22), by striking the period at the end of paragraph (23) and 
inserting ``, or'', and by adding at the end the following new 
paragraph:
            ``(24) the provision of a de minimis financial incentive 
        described in section 401(k)(4)(A).''.
    (d) Amendment of Employee Retirement Income Security Act of 1974.--
Subsection (b) of section 408 of the Employee Retirement Income 
Security Act of 1974 (29 U.S.C. 1108(b)) is amended by adding at the 
end the following new paragraph:
            ``(21) The provision of a de minimis financial incentive 
        described in section 401(k)(4)(A) or section 403(b)(12)(A) of 
        the Internal Revenue Code of 1986.''.
    (e) Effective Date.--The amendments made by this section shall 
apply with respect to plan years beginning after the date of enactment 
of this Act.

SEC. 115. SAFE HARBOR FOR CORRECTIONS OF EMPLOYEE ELECTIVE DEFERRAL 
              FAILURES.

    (a) In General.--Section 414 of the Internal Revenue Code of 1986 
is amended by adding at the end the following new subsection:
    ``(aa) Correcting Automatic Contribution Errors.--
            ``(1) In general.--Any plan or arrangement shall not fail 
        to be treated as a plan described in sections 401(a), 403(b), 
        408, or 457(b), as applicable, solely by reason of a corrected 
        error.
            ``(2) Corrected error defined.--For purposes of this 
        subsection, the term `corrected error' means a reasonable 
        administrative error in implementing an automatic enrollment or 
        automatic escalation feature in accordance with the terms of an 
        eligible automatic contribution arrangement (as defined under 
        subsection (w)(3)), provided that such implementation error--
                    ``(A) is corrected by the date that is 9\1/2\ 
                months after the end of the plan year during which the 
                error occurred,
                    ``(B) is corrected in a manner that is favorable to 
                the participant, and
                    ``(C) is of a type which is so corrected for all 
                similarly situated participants in a nondiscriminatory 
                manner.
        Such correction may occur before or after the participant has 
        terminated employment and may occur without regard to whether 
        the error is identified by the Secretary.
            ``(3) Regulations and guidance for favorable correction 
        methods.--The Secretary shall, by regulations or other guidance 
        of general applicability, specify the correction methods that 
        are in a manner favorable to the participant for purposes of 
        paragraph (2)(B).''.
    (b) Effective Date.--The amendment made by this section shall apply 
with respect to any errors with respect to which the date referred to 
in section 414(aa) (as added by this section) is after the date of 
enactment of this Act.

SEC. 116. IMPROVING COVERAGE FOR PART-TIME WORKERS.

    (a) In General.--Section 202 of the Employee Retirement Income 
Security Act of 1974 (29 U.S.C. 1052) is amended by adding at the end 
the following new subsection:
    ``(c) Special Rule for Certain Part-time Employees.--
            ``(1) In general.--A pension plan that includes either a 
        qualified cash or deferred arrangement (as defined in section 
        401(k) of the Internal Revenue Code of 1986) or a salary 
        reduction agreement (as described in section 403(b) of such 
        Code) shall not require, as a condition of participation in the 
        arrangement or agreement, that an employee complete a period of 
        service with the employer (or employers) maintaining the plan 
        extending beyond the close of the earlier of--
                    ``(A) the period permitted under subsection (a)(1) 
                (determined without regard to subparagraph (B)(i) 
                thereof); or
                    ``(B) the first 24-month period--
                            ``(i) consisting of 2 consecutive 12-month 
                        periods during each of which the employee has 
                        at least 500 hours of service; and
                            ``(ii) by the close of which the employee 
                        has attained the age of 21.
            ``(2) Exception.--Paragraph (1)(B) shall not apply to any 
        employee described in section 410(b)(3) of the Internal Revenue 
        Code of 1986.
            ``(3) Coordination with other rules.--
                    ``(A) In general.--In the case of employees who are 
                eligible to participate in the arrangement or agreement 
                solely by reason of paragraph (1)(B):
                            ``(i) Exclusions.--An employer may elect to 
                        exclude such employees from the application of 
                        subsections (a)(4), (k)(3), (k)(12), (k)(13), 
                        and (m)(2) of section 401 of the Internal 
                        Revenue Code of 1986 and section 410(b) of such 
                        Code.
                            ``(ii) Nondiscrimination rules.--
                        Notwithstanding paragraph (1), section 
                        401(k)(15)(B)(i)(I) of such Code shall apply.
                            ``(iii) Time of participation.--The rules 
                        of subsection (a)(4) shall apply to such 
                        employees.
                    ``(B) Top-heavy rules.--An employer may elect to 
                exclude all employees who are eligible to participate 
                in a plan maintained by the employer solely by reason 
                of paragraph (1)(B) from the application of the vesting 
                and benefit requirements under subsections (b) and (c) 
                of section 416 of the Internal Revenue Code of 1986.
            ``(4) 12-month period.--For purposes of this subsection, 
        12-month periods shall be determined in the same manner as 
        under the last sentence of subsection (a)(3)(A), except that 
        12-month periods beginning before January 1, 2021, shall not be 
        taken into account.''
    (b) Vesting.--Section 203(b) of the Employee Retirement Income 
Security Act of 1974 (29 U.S.C. 1053(a)) is amended by redesignating 
paragraph (4) as paragraph (5) and by inserting after paragraph (3) the 
following new paragraph:
            ``(4) Part-time employees.--For purposes of determining 
        whether an employee who is eligible to participate in a 
        qualified cash or deferred arrangement or a salary reduction 
        agreement under a plan solely by reason of section 202(c)(1)(B) 
        has a nonforfeitable right to employer contributions--
                    ``(A) except as provided in subparagraph (B), each 
                12-month period for which the employee has at least 500 
                hours of service shall be treated as a year of service; 
                and
                    ``(B) paragraph (3) shall be applied by 
                substituting `at least 500 hours of service' for `more 
                than 500 hours of service' in subparagraph (A) thereof.
        For purposes of this paragraph, 12-month periods shall be 
        determined in the same manner as under the last sentence of 
        section 202(a)(3)(A), except that 12-month periods beginning 
        before January 1, 2021, shall not be taken into account.''.
    (c) Reduction in Period Service Requirement for Qualified Cash and 
Deferred Arrangements.--Section 401(k)(2)(D)(ii) of the Internal 
Revenue Code of 1986 is amended by striking ``3'' and inserting ``2''.
    (d) Pre-2021 Service.--Section 112(b) of the Setting Every 
Community Up for Retirement Enhancement Act of 2019 (26 U.S.C. 401 
note) is amended by striking ``section 401(k)(2)(D)(ii)'' and inserting 
``paragraphs (2)(D)(ii) and (15)(B)(iii) of section 401(k)''.
    (e) Effective Dates.--
            (1) In general.--Except as provided in paragraph (2), the 
        amendments made by this section shall apply to plan years 
        beginning after December 31, 2022.
            (2) Subsection (d).--The amendment made by subsection (d) 
        shall take effect as if included in the enactment of section 
        112 of the Setting Every Community Up for Retirement 
        Enhancement Act of 2019.

SEC. 117. DEFERRAL OF TAX FOR CERTAIN SALES OF EMPLOYER STOCK TO 
              EMPLOYEE STOCK OWNERSHIP PLAN SPONSORED BY S CORPORATION.

    (a) In General.--Section 1042(c)(1)(A) of the Internal Revenue Code 
of 1986 is amended by striking ``domestic C corporation'' and inserting 
``domestic corporation''.
    (b) 10 Percent Limitation on Application of Gain on Sale of S 
Corporation Stock.--Section 1042 of such Code is amended by adding at 
the end the following new subsection:
    ``(h) Application of Section to Sale of Stock in S Corporation.--In 
the case of the sale of qualified securities of an S corporation, the 
election under subsection (a) may be made with respect to not more than 
10 percent of the amount realized on such sale for purposes of 
determining the amount of gain not recognized and the extent to which 
(if at all) the amount realized on such sale exceeds the cost of 
qualified replacement property. The portion of adjusted basis that is 
properly allocable to the portion of the amount realized with respect 
to which the election is made under this subsection shall be taken into 
account for purposes of the preceding sentence.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to sales after December 31, 2027.

SEC. 118. CERTAIN SECURITIES TREATED AS PUBLICLY TRADED IN CASE OF 
              EMPLOYEE STOCK OWNERSHIP PLANS.

    (a) In General.--Section 401(a)(35) of the Internal Revenue Code of 
1986 is amended by adding at the end the following new subparagraph:
                    ``(I) ESOP rules relating to publicly traded 
                securities.--In the case of an applicable defined 
                contribution plan which is an employee stock ownership 
                plan, an employer security shall be treated as 
                described in subparagraph (G)(v) if--
                            ``(i) the security is the subject of priced 
                        quotations by at least 4 dealers, published and 
                        made continuously available on an interdealer 
                        quotation system (as such term is used in 
                        section 13 of the Securities Exchange Act of 
                        1934) which has made the request described in 
                        section 6(j) of such Act to be treated as an 
                        alternative trading system,
                            ``(ii) the security is not a penny stock 
                        (as defined by section 3(a)(51) of such Act),
                            ``(iii) the security is issued by a 
                        corporation which is not a shell company (as 
                        such term is used in section 4(d)(6) of the 
                        Securities Act of 1933), a blank check company 
                        (as defined in section 7(b)(3) of such Act), or 
                        subject to bankruptcy proceedings,
                            ``(iv) the security has a public float (as 
                        such term is used in section 240.12b-2 of title 
                        17, Code of Federal Regulations) which has a 
                        fair market value of at least $1,000,000 and 
                        constitutes at least 10 percent of the total 
                        shares issued and outstanding.
                            ``(v) in the case of a security issued by a 
                        domestic corporation, the issuer publishes, not 
                        less frequently than annually, financial 
                        statements audited by an independent auditor 
                        registered with the Public Company Accounting 
                        Oversight Board established under the Sarbanes-
                        Oxley Act of 2002, and
                            ``(vi) in the case of a security issued by 
                        a foreign corporation, the security is 
                        represented by a depositary share (as defined 
                        under section 240.12b-2 of title 17, Code of 
                        Federal Regulations), or is issued by a foreign 
                        corporation incorporated in Canada and readily 
                        tradeable on an established securities market 
                        in Canada, and the issuer--
                                    ``(I) is subject to, and in 
                                compliance with, the reporting 
                                requirements of section 13 or 15(d) of 
                                the Securities Exchange Act of 1934 (15 
                                U.S.C. 78m or 78o(d)),
                                    ``(II) is subject to, and in 
                                compliance with, the reporting 
                                requirements of section 230.257 of 
                                title 17, Code of Federal Regulations, 
                                or
                                    ``(III) is exempt from such 
                                requirements under section 240.12g3-
                                2(b) of title 17, Code of Federal 
                                Regulations.''.
    (b) Effective Date.--The amendments made by this section shall 
apply to plan years beginning after December 31, 2027.

                    TITLE II--PRESERVATION OF INCOME

SEC. 201. REMOVE REQUIRED MINIMUM DISTRIBUTION BARRIERS FOR LIFE 
              ANNUITIES.

    (a) In General.--Section 401(a)(9) of the Internal Revenue Code of 
1986 is amended by adding at the end the following new subparagraph:
                    ``(J) Certain increases in payments under a 
                commercial annuity.--Nothing in this section shall 
                prohibit a commercial annuity (within the meaning of 
                section 3405(e)(6)) that is issued in connection with 
                any eligible retirement plan (within the meaning of 
                section 402(c)(8)(B), other than a defined benefit 
                plan) from providing one or more of the following types 
                of payments on or after the annuity starting date:
                            ``(i) annuity payments that increase by a 
                        constant percentage, applied not less 
                        frequently than annually, at a rate that is 
                        less than 5 percent per year,
                            ``(ii) a lump sum payment that--
                                    ``(I) results in a shortening of 
                                the payment period with respect to an 
                                annuity or a full or partial 
                                commutation of the future annuity 
                                payments, provided that such lump sum 
                                is determined using reasonable 
                                actuarial methods and assumptions, as 
                                determined in good faith by the issuer 
                                of the contract, or
                                    ``(II) accelerates the receipt of 
                                annuity payments that are scheduled to 
                                be received within the ensuing 12 
                                months, regardless of whether such 
                                acceleration shortens the payment 
                                period with respect to the annuity, 
                                reduces the dollar amount of benefits 
                                to be paid under the contract, or 
                                results in a suspension of annuity 
                                payments during the period being 
                                accelerated,
                            ``(iii) an amount which is in the nature of 
                        a dividend or similar distribution, provided 
                        that the issuer of the contract determines such 
                        amount based on a reasonable comparison of the 
                        actuarial factors assumed when calculating the 
                        initial annuity payments and the issuer's 
                        experience with respect to those factors, or
                            ``(iv) a final payment upon death that does 
                        not exceed the excess of the total amount of 
                        the consideration paid for the annuity 
                        payments, less the aggregate amount of prior 
                        distributions or payments from or under the 
                        contract.''.
    (b) Effective Date.--This section shall apply to calendar years 
ending after the date of the enactment of this Act.

SEC. 202. QUALIFYING LONGEVITY ANNUITY CONTRACTS.

    (a) In General.--Not later than the date which is 1 year after the 
date of the enactment of this Act, the Secretary of the Treasury or the 
Secretary's delegate (hereafter in this section referred to as the 
``Secretary'') shall amend the regulation issued by the Department of 
the Treasury relating to ``Longevity Annuity Contracts'' (79 Fed. Reg. 
37633 (July 2, 2014)), as follows:
            (1) Repeal 25-percent premium limit.--The Secretary shall 
        amend Q&A-17(b)(3) of Treasury Regulation section 1.401(a)(9)-6 
        and Q&A-12(b)(3) of Treasury Regulation section 1.408-8 to 
        eliminate the requirement that premiums for qualifying 
        longevity annuity contracts be limited to a percentage of an 
        individual's account balance, and to make such corresponding 
        changes to the regulations and related forms as are necessary 
        to reflect the elimination of this requirement.
            (2) Facilitate joint and survivor benefits.--The Secretary 
        shall amend Q&A-17(c) of Treasury Regulation section 
        1.401(a)(9)-6, and make such corresponding changes to the 
        regulations and related forms as are necessary, to provide 
        that, in the case of a qualifying longevity annuity contract 
        which was purchased with joint and survivor annuity benefits 
        for the individual and the individual's spouse which were 
        permissible under the regulations at the time the contract was 
        originally purchased, a divorce occurring after the original 
        purchase and before the annuity payments commence under the 
        contract will not affect the permissibility of the joint and 
        survivor annuity benefits or other benefits under the contract, 
        or require any adjustment to the amount or duration of benefits 
        payable under the contract, provided that any qualified 
        domestic relations order (within the meaning of section 414(p) 
        of the Internal Revenue Code of 1986) or, in the case of an 
        arrangement not subject to section 414(p) of such Code or 
        section 206(d) of the Employee Retirement Income Security Act 
        of 1974 (29 U.S.C. 1056(d)), any divorce or separation 
        instrument (as defined in subsection (b))--
                    (A) provides that the former spouse is entitled to 
                the survivor benefits under the contract;
                    (B) does not modify the treatment of the former 
                spouse as the beneficiary under the contract who is 
                entitled to the survivor benefits; or
                    (C) does not modify the treatment of the former 
                spouse as the measuring life for the survivor benefits 
                under the contract.
            (3) Permit short free look period.--The Secretary shall 
        amend Q&A-17(a)(4) of Treasury Regulation section 1.401(a)(9)-6 
        to ensure that such Q&A does not preclude a contract from 
        including a provision under which an employee may rescind the 
        purchase of the contract within a period not exceeding 90 days 
        from the date of purchase.
    (b) Divorce or Separation Instrument.--For purposes of subsection 
(a)(2), the term ``divorce or separation instrument'' means--
            (1) a decree of divorce or separate maintenance or a 
        written instrument incident to such a decree,
            (2) a written separation agreement, or
            (3) a decree (not described in paragraph (1)) requiring a 
        spouse to make payments for the support or maintenance of the 
        other spouse.
    (c) Effective Dates, Enforcement, and Interpretations.--
            (1) Effective dates.--
                    (A) Paragraph (1) of subsection (a) shall be 
                effective with respect to contracts purchased or 
                received in an exchange on or after the date of the 
                enactment of this Act.
                    (B) Paragraphs (2) and (3) of subsection (a) shall 
                be effective with respect to contracts purchased or 
                received in an exchange on or after July 2, 2014.
            (2) Enforcement and interpretations.--Prior to the date on 
        which the Secretary issues final regulations pursuant to 
        subsection (a)--
                    (A) the Secretary (or delegate) shall administer 
                and enforce the law in accordance with subsection (a) 
                and the effective dates in paragraph (1) of this 
                subsection; and
                    (B) taxpayers may rely upon their reasonable good 
                faith interpretations of subsection (a).
    (d) Regulatory Successor Provision.--Any reference to a regulation 
under this section shall be treated as including a reference to any 
successor regulation thereto.

SEC. 203. INSURANCE-DEDICATED EXCHANGE-TRADED FUNDS.

    (a) In General.--Not later than the date which is 7 years after the 
date of the enactment of this Act, the Secretary of the Treasury (or 
the Secretary's delegate) shall amend the regulation issued by the 
Department of the Treasury relating to ``Income Tax; Diversification 
Requirements for Variable Annuity, Endowment, and Life Insurance 
Contracts'', 54 Fed. Reg. 8728 (March 2, 1989), and make any necessary 
corresponding amendments to other regulations, in order to facilitate 
the use of exchange-traded funds as investment options under variable 
contracts within the meaning of section 817(d) of the Internal Revenue 
Code of 1986, in accordance with subsections (b) and (c) of this 
section.
    (b) Designate Certain Authorized Participants and Market Makers as 
Eligible Investors.--The Secretary of the Treasury (or the Secretary's 
delegate) shall amend Treasury Regulation section 1.817-5(f)(3) to 
provide that satisfaction of the requirements in Treasury Regulation 
section 1.817-5(f)(2)(i) with respect to an exchange-traded fund shall 
not be prevented by reason of beneficial interests in such a fund being 
held by 1 or more authorized participants or market makers.
    (c) Define Relevant Terms.--In amending Treasury Regulation section 
1.817-5(f)(3) in accordance with subsections (b) of this section, the 
Secretary of the Treasury (or the Secretary's delegate) shall provide 
definitions consistent with the following:
            (1) Exchange-traded fund.--The term ``exchange-traded 
        fund'' means a regulated investment company, partnership, or 
        trust--
                    (A) that is registered with the Securities and 
                Exchange Commission as an open-end investment company 
                or a unit investment trust;
                    (B) the shares of which can be purchased or 
                redeemed directly from the fund only by an authorized 
                participant; and
                    (C) the shares of which are traded throughout the 
                day on a national stock exchange at market prices that 
                may or may not be the same as the net asset value of 
                the shares.
            (2) Authorized participant.--The term ``authorized 
        participant'' means a financial institution that is a member or 
        participant of a clearing agency registered under section 
        17A(b) of the Securities Exchange Act of 1934 that enters into 
        a contractual relationship with an exchange-traded fund 
        pursuant to which the financial institution is permitted to 
        purchase and redeem shares directly from the fund and to sell 
        such shares to third parties, but only if the contractual 
        arrangement or applicable law precludes the financial 
        institution from--
                    (A) purchasing the shares for its own investment 
                purposes rather than for the exclusive purpose of 
                creating and redeeming such shares on behalf of third 
                parties; and
                    (B) selling the shares to third parties who are not 
                market makers or otherwise described in paragraphs (2) 
                and (3) of Treasury Regulation section 1.817-5(f).
            (3) Market maker.--The term ``market maker'' means a 
        financial institution that is a registered broker or dealer 
        under section 15(b) of the Securities Exchange Act of 1934 that 
        maintains liquidity for an exchange-traded fund on a national 
        stock exchange by being always ready to buy and sell shares of 
        such fund on the market, but only if the financial institution 
        is contractually or legally precluded from selling or buying 
        such shares to or from persons who are not authorized 
        participants or otherwise described in paragraphs (2) and (3) 
        of Treasury Regulations section 1.817-5(f).
    (d) Effective Date.--Subsections (b) and (c) shall apply to 
segregated asset account investments made on or after the date that is 
7 years after the date of the enactment of this Act.

  TITLE III--SIMPLIFICATION AND CLARIFICATION OF RETIREMENT PLAN RULES

SEC. 301. RECOVERY OF RETIREMENT PLAN OVERPAYMENTS.

    (a) Overpayments Under ERISA.--Section 206 of the Employee 
Retirement Income Security Act of 1974 (29 U.S.C. 1056) is amended by 
adding at the end the following new subsection:
    ``(h) Special Rules Applicable to Benefit Overpayments.--
            ``(1) General rule.--In the case of an inadvertent benefit 
        overpayment by any pension plan, the responsible plan fiduciary 
        shall not be considered to have failed to comply with the 
        requirements of this title merely because such fiduciary 
        determines, in the exercise of its fiduciary discretion, not to 
        seek recovery of all or part of such overpayment from--
                    ``(A) any participant or beneficiary,
                    ``(B) any plan sponsor of, or contributing employer 
                to--
                            ``(i) an individual account plan, provided 
                        that the amount needed to prevent or restore 
                        any impermissible forfeiture from any 
                        participant's or beneficiary's account arising 
                        in connection with the overpayment is, 
                        separately from and independently of the 
                        overpayment, allocated to such account pursuant 
                        to the nonforfeitability requirements of 
                        section 203 (for example, out of the plan's 
                        forfeiture account, additional employer 
                        contributions, or recoveries from those 
                        responsible for the overpayment), or
                            ``(ii) a defined benefit pension plan 
                        subject to the funding rules in part 3 of this 
                        subtitle B, unless the responsible plan 
                        fiduciary determines, in the exercise of its 
                        fiduciary discretion, that failure to recover 
                        all or part of the overpayment faster than 
                        required under such funding rules would 
                        materially affect the plan's ability to pay 
                        benefits due to other participants and 
                        beneficiaries, or
                    ``(C) any fiduciary of the plan, other than a 
                fiduciary (including a plan sponsor or contributing 
                employer acting in a fiduciary capacity) whose breach 
                of its fiduciary duties resulted in such overpayment, 
                provided that if the plan has established prudent 
                procedures to prevent and minimize overpayment of 
                benefits and the relevant plan fiduciaries have 
                followed such procedures, an inadvertent benefit 
                overpayment will not give rise to a breach of fiduciary 
                duty.
            ``(2) Reduction in future benefit payments and recovery 
        from responsible party.--Paragraph (1) shall not fail to apply 
        with respect to any inadvertent benefit overpayment merely 
        because, after discovering such overpayment, the responsible 
        plan fiduciary--
                    ``(A) reduces future benefit payments to the 
                correct amount provided for under the terms of the 
                plan, or
                    ``(B) seeks recovery from the person or persons 
                responsible for the overpayment.
            ``(3) Employer funding obligations.--Nothing in this 
        subsection shall relieve an employer of any obligation imposed 
        on it to make contributions to a plan to meet the minimum 
        funding standards under part 3 of this subtitle B or to prevent 
        or restore an impermissible forfeiture in accordance with 
        section 203.
            ``(4) Recoupment from participants and beneficiaries.--If 
        the responsible plan fiduciary, in the exercise of its 
        fiduciary discretion, decides to seek recoupment from a 
        participant or beneficiary of all or part of an inadvertent 
        benefit overpayment made by the plan to such participant or 
        beneficiary, it may do so, subject to the following conditions:
                    ``(A) No interest or other additional amounts (such 
                as collection costs or fees) are sought on overpaid 
                amounts for any period.
                    ``(B) If the plan seeks to recoup past overpayments 
                of a non-decreasing periodic benefit by reducing future 
                benefit payments--
                            ``(i) the reduction ceases after the plan 
                        has recovered the full dollar amount of the 
                        overpayment,
                            ``(ii) the amount recouped each calendar 
                        year does not exceed 10 percent of the full 
                        dollar amount of the overpayment, and
                            ``(iii) future benefit payments are not 
                        reduced to below 90 percent of the periodic 
                        amount otherwise payable under the terms of the 
                        plan.
                Alternatively, if the plan seeks to recoup past 
                overpayments of a non-decreasing periodic benefit 
                through one or more installment payments, the sum of 
                such installment payments in any calendar year does not 
                exceed the sum of the reductions that would be 
                permitted in such year under the preceding sentence.
                    ``(C) If the plan seeks to recoup past overpayments 
                of a benefit other than a non-decreasing periodic 
                benefit, the plan satisfies requirements developed by 
                the Secretary for purposes of this subparagraph.
                    ``(D) Efforts to recoup overpayments are--
                            ``(i) not accompanied by threats of 
                        litigation, unless the responsible plan 
                        fiduciary reasonably believes it could prevail 
                        in a civil action brought in Federal or State 
                        court to recoup the overpayments, and
                            ``(ii) not made through a collection agency 
                        or similar third party, unless the participant 
                        or beneficiary ignores or rejects efforts to 
                        recoup the overpayment following either a final 
                        judgment in Federal or State court or a 
                        settlement between the participant or 
                        beneficiary and the plan, in either case 
                        authorizing such recoupment.
                    ``(E) Recoupment of past overpayments to a 
                participant is not sought from any beneficiary of the 
                participant, including a spouse, surviving spouse, 
                former spouse, or other beneficiary.
                    ``(F) Recoupment may not be sought if the first 
                overpayment occurred more than 3 years before the 
                participant or beneficiary is first notified in writing 
                of the error.
                    ``(G) A participant or beneficiary from whom 
                recoupment is sought is entitled to contest all or part 
                of the recoupment pursuant to the plan's claims 
                procedures.
                    ``(H) In determining the amount of recoupment to 
                seek, the responsible plan fiduciary may take into 
                account the hardship that recoupment likely would 
                impose on the participant or beneficiary.
            ``(5) Effect of culpability.--Subparagraphs (A) through (F) 
        of paragraph (4) shall not apply to protect a participant or 
        beneficiary who is culpable. For purposes of this paragraph, a 
        participant or beneficiary is culpable if the individual bears 
        responsibility for the overpayment (such as through 
        misrepresentations or omissions that led to the overpayment), 
        or if the individual knew, or had good reason to know under the 
        circumstances, that the benefit payment or payments were 
        materially in excess of the correct amount. Notwithstanding the 
        preceding sentence, an individual is not culpable merely 
        because the individual believed the benefit payment or payments 
        were or might be in excess of the correct amount, if the 
        individual raised that question with an authorized plan 
        representative and was told the payment or payments were not in 
        excess of the correct amount. With respect to a culpable 
        participant or beneficiary, efforts to recoup overpayments 
        shall not be made through threats of litigation, unless a 
        lawyer for the plan could make the representations required 
        under Rule 11 of the Federal Rules of Civil Procedure if the 
        litigation were brought in Federal court.''.
    (b) Overpayments Under Internal Revenue Code of 1986.--
            (1) Qualification requirements.--Section 414 of the 
        Internal Revenue Code of 1986, as amended by this preceding 
        provisions of this Act, is amended by adding at the end the 
        following new subsection:
    ``(bb) Special Rules Applicable to Benefit Overpayments.--
            ``(1) In general.--A plan shall not fail to be treated as 
        described in clause (i), (ii), (iii), or (iv) of section 
        219(g)(5)(A) (and shall not fail to be treated as satisfying 
        the requirements of section 401(a) or 403) merely because--
                    ``(A) the plan fails to obtain payment from any 
                participant, beneficiary, employer, plan sponsor, 
                fiduciary, or other party on account of any inadvertent 
                benefit overpayment made by the plan, or
                    ``(B) the plan sponsor amends the plan to increase 
                past or future benefit payments to affected 
                participants and beneficiaries in order to adjust for 
                prior inadvertent benefit overpayments.
            ``(2) Reduction in future benefit payments and recovery 
        from responsible party.--Paragraph (1) shall not fail to apply 
        to a plan merely because, after discovering a benefit 
        overpayment, such plan--
                    ``(A) reduces future benefit payments to the 
                correct amount provided for under the terms of the 
                plan, or
                    ``(B) seeks recovery from the person or persons 
                responsible for such overpayment.
            ``(3) Employer funding obligations.--Nothing in this 
        subsection shall relieve an employer of any obligation imposed 
        on it to make contributions to a plan to meet the minimum 
        funding standards under sections 412 and 430 or to prevent or 
        restore an impermissible forfeiture in accordance with section 
        411.
            ``(4) Observance of benefit limitations.--Notwithstanding 
        paragraph (1), a plan to which paragraph (1) applies shall 
        observe any limitations imposed on it by section 401(a)(17) or 
        415. The plan may enforce such limitations using any method 
        approved by the Secretary of the Treasury for recouping 
        benefits previously paid or allocations previously made in 
        excess of such limitations.
            ``(5) Coordination with other qualification requirements.--
        The Secretary of the Treasury may issue regulations or other 
        guidance of general applicability specifying how benefit 
        overpayments and their recoupment or non-recoupment from a 
        participant or beneficiary shall be taken into account for 
        purposes of satisfying any requirement applicable to a plan to 
        which paragraph (1) applies.''.
            (2) Rollovers.--Section 402(c) of such Code is amended by 
        adding at the end the following new paragraph:
            ``(12) In the case of an inadvertent benefit overpayment 
        from a plan to which section 414(bb)(1) applies that is 
        transferred to an eligible retirement plan by or on behalf of a 
        participant or beneficiary--
                    ``(A) the portion of such overpayment with respect 
                to which recoupment is not sought on behalf of the plan 
                shall be treated as having been paid in an eligible 
                rollover distribution if the payment would have been an 
                eligible rollover distribution but for being an 
                overpayment, and
                    ``(B) the portion of such overpayment with respect 
                to which recoupment is sought on behalf of the plan 
                shall be permitted to be returned to such plan and in 
                such case shall be treated as an eligible rollover 
                distribution transferred to such plan by the 
                participant or beneficiary who received such 
                overpayment (and the plans making and receiving such 
                transfer shall be treated as permitting such transfer).
        In any case in which recoupment is sought on behalf of the plan 
        but is disputed by the participant or beneficiary who received 
        such overpayment, such dispute shall be subject to the claims 
        procedures of the plan that made such overpayment, such plan 
        shall notify the plan receiving the rollover of such dispute, 
        and the plan receiving the rollover shall retain such 
        overpayment on behalf of the participant or beneficiary (and 
        shall be entitled to treat such overpayment as plan assets) 
        pending the outcome of such procedures.''.
    (c) Effective Date.--The amendments made by this section shall 
apply as of the date of the enactment of this Act.
    (d) Certain Actions Before Date of Enactment.--Plans, fiduciaries, 
employers, and plan sponsors are entitled to rely on--
            (1) a good faith interpretation of then existing 
        administrative guidance for inadvertent benefit overpayment 
        recoupments and recoveries that commenced before the date of 
        enactment of this Act, and
            (2) determinations made before the date of enactment of 
        this Act by the responsible plan fiduciary, in the exercise of 
        its fiduciary discretion, not to seek recoupment or recovery of 
        all or part of an inadvertent benefit overpayment.
In the case of a benefit overpayment that occurred prior to the date of 
enactment of this Act, any installment payments by the participant or 
beneficiary to the plan or any reduction in periodic benefit payments 
to the participant or beneficiary, which were made in recoupment of 
such overpayment and which commenced prior to such date, may continue 
after such date. Nothing in this subsection shall relieve a fiduciary 
from responsibility for an overpayment that resulted from a breach of 
its fiduciary duties.

SEC. 302. REDUCTION IN EXCISE TAX ON CERTAIN ACCUMULATIONS IN QUALIFIED 
              RETIREMENT PLANS.

    (a) In General.--Section 4974(a) of the Internal Revenue Code of 
1986 is amended by striking ``50 percent'' and inserting ``25 
percent''.
    (b) Reduction in Excise Tax on Failures to Take Required Minimum 
Distributions.--Section 4974 of such Code is amended by adding at the 
end the following new subsection:
    ``(e) Reduction of Tax in Certain Cases.--
            ``(1) Reduction.--In the case of a taxpayer who--
                    ``(A) corrects, during the correction window, a 
                shortfall of distributions from an individual 
                retirement plan which resulted in imposition of a tax 
                under subsection (a), and
                    ``(B) submits a return, during the correction 
                window, reflecting such tax (as modified by this 
                subsection),
        the first sentence of subsection (a) shall be applied by 
        substituting `10 percent' for `25 percent'.
            ``(2) Correction window.--For purposes of this subsection, 
        the term `correction window' means the period of time beginning 
        on the date on which the tax under subsection (a) is imposed 
        with respect to a shortfall of distributions from an individual 
        retirement plan, and ending on the earlier of--
                    ``(A) the date on which the Secretary initiates an 
                audit, or otherwise demands payment, with respect to 
                the shortfall of distributions, or
                    ``(B) the last day of the second taxable year that 
                begins after the end of the taxable year in which the 
                tax under subsection (a) is imposed.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2022.

SEC. 303. PERFORMANCE BENCHMARKS FOR ASSET ALLOCATION FUNDS.

    (a) In General.--Not later than 1 year after the date of enactment 
of this Act, the Secretary of Labor shall provide that, in the case of 
a designated investment alternative that contains a mix of asset 
classes, the administrator of a plan may, but is not required to, use a 
benchmark that is a blend of different broad-based securities market 
indices if--
            (1) the blend is reasonably representative of the asset 
        class holdings of the designated investment alternative;
            (2) for purposes of determining the blend's returns for 1-, 
        5-, and 10-calendar-year periods (or for the life of the 
        alternative, if shorter), the blend is modified at least once 
        per year to reflect changes in the asset class holdings of the 
        designated investment alternative;
            (3) the blend is furnished to participants and 
        beneficiaries in a manner that is reasonably designed to be 
        understandable; and
            (4) each securities market index that is used for an 
        associated asset class would separately satisfy the 
        requirements of such regulation for such asset class.
    (b) Study.--Not later than 3 years after the date of enactment of 
this Act, the Secretary of Labor shall deliver a report to the 
Committees on Finance and Health, Education, Labor, and Pensions of the 
Senate and the Committees on Ways and Means and Education and Labor of 
the House of Representatives regarding the utilization, effectiveness, 
and participants' understanding of the benchmarking requirements under 
this section.

SEC. 304. REVIEW AND REPORT TO CONGRESS RELATING TO REPORTING AND 
              DISCLOSURE REQUIREMENTS.

    (a) Study.--As soon as practicable after the date of enactment of 
this Act, the Secretary of Labor, the Secretary of the Treasury, and 
the Director of the Pension Benefit Guaranty Corporation shall review 
the reporting and disclosure requirements as applicable to each such 
agency head, of--
            (1) the Employee Retirement Income Security Act of 1974 
        applicable to pension plans (as defined in section 3(2) of such 
        Act (29 U.S.C. 1002(2)); and
            (2) the Internal Revenue Code of 1986 applicable to 
        qualified retirement plans (as defined in section 4974(c) of 
        such Code, without regard to paragraphs (4) and (5) of such 
        section).
    (b) Report.--
            (1) In general.--Not later than 2 years after the date of 
        enactment of this Act, the Secretary of Labor, the Secretary of 
        the Treasury, and the Director of the Pension Benefit Guaranty 
        Corporation, jointly, and after consultation with a balanced 
        group of participant and employer representatives, shall with 
        respect to plans referenced in subsection (a) report on the 
        effectiveness of the applicable reporting and disclosure 
        requirements and make such recommendations as may be 
        appropriate to the Committee on Education and Labor and the 
        Committee on Ways and Means of the House of Representatives and 
        the Committee on Health, Education, Labor, and Pensions and the 
        Committee on Finance of the Senate to consolidate, simplify, 
        standardize, and improve such requirements so as to simplify 
        reporting for such plans and ensure that plans can furnish and 
        participants and beneficiaries timely receive and better 
        understand the information they need to monitor their plans, 
        plan for retirement, and obtain the benefits they have earned.
            (2) Analysis of effectiveness.--To assess the effectiveness 
        of the applicable reporting and disclosure requirements, the 
        report shall include an analysis, based on plan data, of how 
        participants and beneficiaries are providing preferred contact 
        information, the methods by which plan sponsors and plans are 
        furnishing disclosures, and the rate at which participants and 
        beneficiaries (grouped by key demographics) are receiving, 
        accessing, understanding, and retaining disclosures.
            (3) Collection of information.--The agencies shall conduct 
        appropriate surveys and data collection to obtain any needed 
        information.

SEC. 305. ELIMINATING UNNECESSARY PLAN REQUIREMENTS RELATED TO 
              UNENROLLED PARTICIPANTS.

    (a) Amendment of Employee Retirement Income Security Act of 1974.--
            (1) In general.--Part 1 of subtitle B of subchapter I of 
        the Employee Retirement Income Security Act of 1974 is amended 
        by redesignating section 111 as section 112 and by inserting 
        after section 110 the following new section:

``SEC. 111. ELIMINATING UNNECESSARY PLAN REQUIREMENTS RELATED TO 
              UNENROLLED PARTICIPANTS.

    ``(a) In General.--Notwithstanding any other provision of this 
title, with respect to any individual account plan, no disclosure, 
notice, or other plan document (other than the notices and documents 
described in paragraphs (1) and (2)) shall be required to be furnished 
under this title to any unenrolled participant if the unenrolled 
participant receives--
            ``(1) an annual reminder notice of such participant's 
        eligibility to participate in such plan and any applicable 
        election deadlines under the plan; and
            ``(2) any document requested by such participant that the 
        participant would be entitled to receive notwithstanding this 
        section.
    ``(b) Unenrolled Participant.--For purposes of this section, the 
term `unenrolled participant' means an employee who--
            ``(1) is eligible to participate in an individual account 
        plan;
            ``(2) has received--
                    ``(A) the summary plan description pursuant to 
                section 104(b), and
                    ``(B) any other notices related to eligibility 
                under the plan required to be furnished under this 
                title, or the Internal Revenue Code of 1986, in 
                connection with such participant's initial eligibility 
                to participate in such plan;
            ``(3) is not participating in such plan;
            ``(4) does not have an account balance in the plan; and
            ``(5) satisfies such other criteria as the Secretary of 
        Labor may determine appropriate, as prescribed in guidance 
        issued in consultation with the Secretary of Treasury.
For purposes of this section, any eligibility to participate in the 
plan following any period for which such employee was not eligible to 
participate shall be treated as initial eligibility.
    ``(c) Annual Reminder Notice.--For purposes of this section, the 
term `annual reminder notice' means a notice provided in accordance 
with section 2520.104b-1 of title 29, Code of Federal Regulations (or 
any successor regulation), which--
            ``(1) is furnished in connection with the annual open 
        season election period with respect to the plan or, if there is 
        no such period, is furnished within a reasonable period prior 
        to the beginning of each plan year;
            ``(2) notifies the unenrolled participant of--
                    ``(A) the unenrolled participant's eligibility to 
                participate in the plan; and
                    ``(B) the key benefits and rights under the plan, 
                with a focus on employer contributions and vesting 
                provisions; and
            ``(3) provides such information in a prominent manner 
        calculated to be understood by the average participant.''.
            (2) Clerical amendment.--The table of contents in section 1 
        of the Employee Retirement Income Security Act of 1974 is 
        amended by striking the item relating to section 111 and by 
        inserting after the item relating to section 110 the following 
        new items:

``Sec. 111. Eliminating unnecessary plan requirements related to 
                            unenrolled participants.
``Sec. 112. Repeal and effective date.''.
    (b) Amendment of Internal Revenue Code of 1986.--Section 414 of the 
Internal Revenue Code of 1986, as amended by the preceding provisions 
of this Act, is amended by adding at the end the following new 
subsection:
    ``(cc) Eliminating Unnecessary Plan Requirements Related to 
Unenrolled Participants.--
            ``(1) In general.--Notwithstanding any other provision of 
        this title, with respect to any defined contribution plan, no 
        disclosure, notice, or other plan document (other than the 
        notices and documents described in subparagraphs (A) and (B)) 
        shall be required to be furnished under this title to any 
        unenrolled participant if the unenrolled participant receives--
                    ``(A) an annual reminder notice of such 
                participant's eligibility to participate in such plan 
                and any applicable election deadlines under the plan, 
                and
                    ``(B) any document requested by such participant 
                that the participant would be entitled to receive 
                notwithstanding this subsection.
            ``(2) Unenrolled participant.--For purposes of this 
        subsection, the term `unenrolled participant' means an employee 
        who--
                    ``(A) is eligible to participate in a defined 
                contribution plan,
                    ``(B) has received--
                            ``(i) the summary plan description pursuant 
                        to section 104(b) of the Employee Retirement 
                        Income Security Act of 1974, and
                            ``(ii) any other notices related to 
                        eligibility under the plan and required to be 
                        furnished under this title, or the Employee 
                        Retirement Income Security Act of 1974, in 
                        connection with such participant's initial 
                        eligibility to participate in such plan,
                    ``(C) is not participating in such plan,
                    ``(D) does not have an account balance in the plan, 
                and
                    ``(E) satisfies such other criteria as the 
                Secretary of the Treasury may determine appropriate, as 
                prescribed in guidance issued in consultation with the 
                Secretary of Labor.
        For purposes of this subsection, any eligibility to participate 
        in the plan following any period for which such employee was 
        not eligible to participate shall be treated as initial 
        eligibility.
            ``(3) Annual reminder notice.--For purposes of this 
        subsection, the term `annual reminder notice' means the notice 
        described in section 111(c) of the Employee Retirement Income 
        Security Act of 1974.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to plan years beginning after December 31, 2022.

SEC. 306. RETIREMENT SAVINGS LOST AND FOUND.

    (a) In General.--
            (1) Establishment of retirement savings lost and found.--
        Part 5 of title I of the Employee Retirement Income Security 
        Act of 1974 (29 U.S.C. 1341 et seq.) is amended by adding at 
        the end the following:

``SEC. 523. RETIREMENT SAVINGS LOST AND FOUND.

    ``(a) Establishment.--
            ``(1) In general.--Not later than 2 years after the date of 
        the enactment of this section, the Secretary of Labor, in 
        consultation with the Secretary of the Treasury, shall 
        establish an online searchable database (to be managed by the 
        Department of Labor in accordance with this section) to be 
        known as the `Retirement Savings Lost and Found'. The 
        Retirement Savings Lost and Found shall--
                    ``(A) allow an individual to search for information 
                that enables the individual to locate the administrator 
                of any plan described in paragraph (2) with respect to 
                which the individual is or was a participant or 
                beneficiary, and provide contact information for the 
                administrator of any such plan;
                    ``(B) allow the Department of Labor to assist such 
                an individual in locating any such plan of the 
                individual; and
                    ``(C) allow the Department of Labor to make any 
                necessary changes to contact information on record for 
                the administrator based on any changes to the plan due 
                to merger or consolidation of the plan with any other 
                plan, division of the plan into two or more plans, 
                bankruptcy, termination, change in name of the plan, 
                change in name or address of the administrator, or 
                other causes.
        The Retirement Savings Lost and Found established under this 
        paragraph shall include information reported under this section 
        and other relevant information obtained by the Department of 
        Labor.
            ``(2) Plans described.--A plan described in this paragraph 
        is a plan to which the vesting standards of section 203 apply.
    ``(b) Administration.--The Retirement Savings Lost and Found 
established under subsection (a) shall provide individuals described in 
subsection (a)(1) only with the ability to search for information that 
enables the individual to locate the administrator and contact 
information for the administrator of any plan with respect to which the 
individual is or was a participant or beneficiary, sufficient to allow 
the individual to locate the individual's plan in order to recover any 
benefit owing to the individual under the plan.
    ``(c) Safeguarding Participant Privacy and Security.--In 
establishing the Retirement Savings Lost and Found under subsection 
(a), the Department of Labor shall take all necessary and proper 
precautions to ensure that individuals' plan information maintained by 
the Retirement Savings Lost and Found is protected.
    ``(d) Definition of Administrator.--For purposes of this section, 
the term `administrator' has the meaning given such term in section 
3(16)(A).
    ``(e) Information Collection From Plans.--Effective with respect to 
plan years beginning after the second December 31 occurring after the 
date of the enactment of this subsection, the administrator of a plan 
to which the vesting standards of section 203 apply shall submit to the 
Department of Labor, at such time and in such form and manner as is 
prescribed in regulations--
            ``(1) the information described in paragraphs (1) through 
        (4) of section 6057(b) of the Internal Revenue Code of 1986;
            ``(2) the information described in subparagraphs (A) and 
        (B) of section 6057(a)(2) of such Code;
            ``(3) the name and taxpayer identifying number of each 
        participant or former participant in the plan--
                    ``(A) who, during the current plan year or any 
                previous plan year, was reported under section 
                6057(a)(2)(C) of such Code, and with respect to whom 
                the benefits described in clause (ii) thereof were 
                fully paid during the plan year;
                    ``(B) with respect to whom any amount was 
                distributed under section 401(a)(31)(B) of such Code 
                during the plan year; or
                    ``(C) with respect to whom a deferred annuity 
                contract was distributed during the plan year;
            ``(4) in the case of a participant or former participant to 
        whom paragraph (3) applies--
                    ``(A) in the case of a participant described in 
                subparagraph (B) thereof, the name and address of the 
                designated trustee or issuer described in section 
                401(a)(31)(B)(i) of such Code and the account number of 
                the individual retirement plan to which the amount was 
                distributed; and
                    ``(B) in the case of a participant described in 
                subparagraph (C) thereof, the name and address of the 
                issuer of such annuity contract and the contract or 
                certificate number; and
            ``(5) such other information as the Secretary of Labor may 
        require.
    ``(f) Information Collection From Federal Agencies.--On request, 
the Secretary of Labor may access and receive such information 
collected by other Federal agencies as may be necessary and appropriate 
to perform work related to the Retirement Savings Lost and Found.
    ``(g) Program Integrity Audit.--On an annual basis for each of the 
first 5 years beginning one year after the establishment of the 
database in subsection (a)(1) and every 5 years thereafter, the 
Inspector General of the Department of Labor shall conduct an audit of 
the administration of the Retirement Savings Lost and Found.''.
            (3) Conforming amendment.--The table of contents for the 
        Employee Retirement Income Security Act of 1974 (29 U.S.C. 1001 
        et seq.) is amended by inserting after the item relating to 
        section 522 the following:

``Sec. 523.Retirement Savings Lost and Found.''.

SEC. 307. UPDATING DOLLAR LIMIT FOR MANDATORY DISTRIBUTIONS.

    (a) In General.--Section 203(e)(1) of the Employee Retirement 
Income Security Act of 1974 and sections 401(a)(31)(B)(ii) and 
411(a)(11)(A) of the Internal Revenue Code of 1986 are each amended by 
striking ``$5,000'' and inserting ``$7,000''.
    (b) Effective Date.--The amendments made by this section shall 
apply to distributions made after December 31, 2022.

SEC. 308. EXPANSION OF EMPLOYEE PLANS COMPLIANCE RESOLUTION SYSTEM.

    (a) In General.--Except as otherwise provided in the Internal 
Revenue Code of 1986 or regulations prescribed by the Secretary of the 
Treasury or the Secretary's delegate (referred to in this section as 
the ``Secretary''), any eligible inadvertent failure to comply with the 
rules applicable under section 401(a), 403(a), 403(b), 408(p), or 
408(k) of such Code may be self-corrected under the Employee Plans 
Compliance Resolution System (as described in Revenue Procedure 2021-
30, or any successor guidance, and hereafter in this section referred 
to as the ``EPCRS''), except to the extent that such failure was 
identified by the Secretary prior to any actions which demonstrate a 
commitment to implement a self-correction. Revenue Procedure 2021-30 is 
deemed amended as of the date of the enactment of this Act to provide 
that the correction period under section 9.02 of such Revenue Procedure 
(or any successor guidance) for an eligible inadvertent failure, except 
as otherwise provided under such Code or in regulations prescribed by 
the Secretary, is indefinite and has no last day, other than with 
respect to failures identified by the Secretary prior to any self-
correction as described in the preceding sentence.
    (b) Loan Errors.--In the case of an eligible inadvertent failure 
relating to a loan from a plan to a participant--
            (1) such failure may be self-corrected under subsection (a) 
        according to the rules of section 6.07 of Revenue Procedure 
        2021-30 (or any successor guidance), including the provisions 
        related to whether a deemed distribution must be reported on 
        Form 1099-R, and
            (2) the Secretary of Labor shall treat any such failure 
        which is so self-corrected under subsection (a) as meeting the 
        requirements of the Voluntary Fiduciary Correction Program of 
        the Department of Labor if, with respect to the violation of 
        the fiduciary standards of the Employee Retirement Income 
        Security Act of 1974, there is a similar loan error eligible 
        for correction under EPCRS and the loan error is corrected in 
        such manner.
    (c) EPCRS for IRAs.--The Secretary shall expand the EPCRS to allow 
custodians of individual retirement plans (as defined in section 
7701(a)(37) of the Internal Revenue Code of 1986) to address eligible 
inadvertent failures with respect to an individual retirement plan (as 
so defined), including (but not limited to)--
            (1) waivers of the excise tax which would otherwise apply 
        under section 4974 of the Internal Revenue Code of 1986,
            (2) under the self-correction component of the EPCRS, 
        waivers of the 60-day deadline for a rollover where the 
        deadline is missed for reasons beyond the reasonable control of 
        the account owner, and
            (3) rules permitting a nonspouse beneficiary to return 
        distributions to an inherited individual retirement plan 
        described in section 408(d)(3)(C) of the Internal Revenue Code 
        of 1986 in a case where, due to an inadvertent error by a 
        service provider, the beneficiary had reason to believe that 
        the distribution could be rolled over without inclusion in 
        income of any part of the distributed amount.
    (d) Additional Safe Harbors.--The Secretary shall expand the EPCRS 
to provide additional safe harbor means of correcting eligible 
inadvertent failures described in subsection (a), including safe harbor 
means of calculating the earnings which must be restored to a plan in 
cases where plan assets have been depleted by reason of an eligible 
inadvertent failure.
    (e) Eligible Inadvertent Failure.--For purposes of this section--
            (1) In general.--Except as provided in paragraph (2), the 
        term ``eligible inadvertent failure'' means a failure that 
        occurs despite the existence of practices and procedures 
        which--
                    (A) satisfy the standards set forth in section 4.04 
                of Revenue Procedure 2021-30 (or any successor 
                guidance), or
                    (B) satisfy similar standards in the case of an 
                individual retirement plan.
            (2) Exception.--The term ``eligible inadvertent failure'' 
        shall not include any failure which is egregious, relates to 
        the diversion or misuse of plan assets, or is directly or 
        indirectly related to an abusive tax avoidance transaction.
    (f) Application of Certain Requirements for Correcting Errors.--
This section shall not apply to any failure unless the correction of 
such failure under this section is made in conformity with the general 
principles that apply to corrections of such failures under the 
Internal Revenue Code of 1986, including regulations or other guidance 
issued thereunder and including those principles and corrections set 
forth in Revenue Procedure 2021-30 (or any successor guidance).''

SEC. 309. ELIMINATE THE ``FIRST DAY OF THE MONTH'' REQUIREMENT FOR 
              GOVERNMENTAL SECTION 457(B) PLANS.

    (a) In General.--Section 457(b)(4) of the Internal Revenue Code of 
1986 is amended to read as follows:
            ``(4) which provides that compensation--
                    ``(A) in the case of an eligible employer described 
                in subsection (e)(1)(A), will be deferred only if an 
                agreement providing for such deferral has been entered 
                into before the compensation is currently available to 
                the individual, and
                    ``(B) in any other case, will be deferred for any 
                calendar month only if an agreement providing for such 
                deferral has been entered into before the beginning of 
                such month,''.
    (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. 310. ONE-TIME ELECTION FOR QUALIFIED CHARITABLE DISTRIBUTION TO 
              SPLIT-INTEREST ENTITY; INCREASE IN QUALIFIED CHARITABLE 
              DISTRIBUTION LIMITATION.

    (a) One-time Election for Qualified Charitable Distribution to 
Split-interest Entity.--Section 408(d)(8) of the Internal Revenue Code 
of 1986 is amended by adding at the end the following new subparagraph:
                    ``(F) One-time election for qualified charitable 
                distribution to split-interest entity.--
                            ``(i) In general.--A taxpayer may for a 
                        taxable year elect under this subparagraph to 
                        treat as meeting the requirement of 
                        subparagraph (B)(i) any distribution from an 
                        individual retirement account which is made 
                        directly by the trustee to a split-interest 
                        entity, but only if--
                                    ``(I) an election is not in effect 
                                under this subparagraph for a preceding 
                                taxable year,
                                    ``(II) the aggregate amount of 
                                distributions of the taxpayer with 
                                respect to which an election under this 
                                subparagraph is made does not exceed 
                                $50,000, and
                                    ``(III) such distribution meets the 
                                requirements of clauses (iii) and (iv).
                            ``(ii) Split-interest entity.--For purposes 
                        of this subparagraph, the term `split-interest 
                        entity' means--
                                    ``(I) a charitable remainder 
                                annuity trust (as defined in section 
                                664(d)(1)), but only if such trust is 
                                funded exclusively by qualified 
                                charitable distributions,
                                    ``(II) a charitable remainder 
                                unitrust (as defined in section 
                                664(d)(2)), but only if such unitrust 
                                is funded exclusively by qualified 
                                charitable distributions, or
                                    ``(III) a charitable gift annuity 
                                (as defined in section 501(m)(5)), but 
                                only if such annuity is funded 
                                exclusively by qualified charitable 
                                distributions and commences fixed 
                                payments of 5 percent or greater not 
                                later than 1 year from the date of 
                                funding.
                            ``(iii) Contributions must be otherwise 
                        deductible.--A distribution meets the 
                        requirement of this clause only if--
                                    ``(I) in the case of a distribution 
                                to a charitable remainder annuity trust 
                                or a charitable remainder unitrust, a 
                                deduction for the entire value of the 
                                remainder interest in the distribution 
                                for the benefit of a specified 
                                charitable organization would be 
                                allowable under section 170 (determined 
                                without regard to subsection (b) 
                                thereof and this paragraph), and
                                    ``(II) in the case of a charitable 
                                gift annuity, a deduction in an amount 
                                equal to the amount of the distribution 
                                reduced by the value of the annuity 
                                described in section 501(m)(5)(B) would 
                                be allowable under section 170 
                                (determined without regard to 
                                subsection (b) thereof and this 
                                paragraph).
                            ``(iv) Limitation on income interests.--A 
                        distribution meets the requirements of this 
                        clause only if--
                                    ``(I) no person holds an income 
                                interest in the split-interest entity 
                                other than the individual for whose 
                                benefit such account is maintained, the 
                                spouse of such individual, or both, and
                                    ``(II) the income interest in the 
                                split-interest entity is nonassignable.
                            ``(v) Special rules.--
                                    ``(I) Charitable remainder 
                                trusts.--Notwithstanding section 
                                664(b), distributions made from a trust 
                                described in subclause (I) or (II) of 
                                clause (ii) shall be treated as 
                                ordinary income in the hands of the 
                                beneficiary to whom the annuity 
                                described in section 664(d)(1)(A) or 
                                the payment described in section 
                                664(d)(2)(A) is paid.
                                    ``(II) Charitable gift annuities.--
                                Qualified charitable distributions made 
                                to fund a charitable gift annuity shall 
                                not be treated as an investment in the 
                                contract for purposes of section 
                                72(c).''.
    (b) Inflation Adjustment.--Section 408(d)(8) of such Code, as 
amended by subsection (a), is amended by adding at the end the 
following new subparagraph:
                    ``(G) Inflation adjustment.--
                            ``(i) In general.--In the case of any 
                        taxable year beginning after 2022, each of the 
                        dollar amounts in subparagraphs (A) and (F) 
                        shall be increased by an amount equal to--
                                    ``(I) such dollar amount, 
                                multiplied by
                                    ``(II) the cost-of-living 
                                adjustment determined under section 
                                1(f)(3) for the calendar year in which 
                                the taxable year begins, determined by 
                                substituting `calendar year 2021' for 
                                `calendar year 2016' in subparagraph 
                                (A)(ii) thereof.
                            ``(ii) Rounding.--If any dollar amount 
                        increased under clause (i) is not a multiple of 
                        $1,000, such dollar amount shall be rounded to 
                        the nearest multiple of $1,000.''.
    (c) Effective Date.--The amendment made by this section shall apply 
to distributions made in taxable years ending after the date of the 
enactment of this Act.

SEC. 311. DISTRIBUTIONS TO FIREFIGHTERS.

    (a) In General.--Subparagraph (A) of section 72(t)(10) of the 
Internal Revenue Code of 1986 is amended by striking ``414(d))'' and 
inserting ``414(d)) or a distribution from a plan described in clause 
(iii), (iv), or (vi) of section 402(c)(8)(B) to an employee who 
provides firefighting services''.
    (b) Conforming Amendment.--The heading of paragraph (10) of section 
72(t) of such Code is amended by striking ``in governmental plans'' and 
inserting ``and private sector firefighters''
    (c) Effective Date.--The amendments made by this section shall 
apply to distributions made after December 31, 2022.

SEC. 312. EXCLUSION OF CERTAIN DISABILITY-RELATED FIRST RESPONDER 
              RETIREMENT PAYMENTS.

    (a) In General.--Part III of subchapter B of chapter 1 of the 
Internal Revenue Code of 1986 is amended by inserting after section 
139B the following new section:

``SEC. 139C. CERTAIN DISABILITY-RELATED FIRST RESPONDER RETIREMENT 
              PAYMENTS.

    ``(a) In General.--In the case of an individual who receives 
qualified first responder retirement payments for any taxable year, 
gross income shall not include so much of such payments as do not 
exceed the annualized excludable disability amount with respect to such 
individual.
    ``(b) Qualified First Responder Retirement Payments.--For purposes 
of this section, the term `qualified first responder retirement 
payments' means, with respect to any taxable year, any pension or 
annuity which but for this section would be includible in gross income 
for such taxable year and which is received--
            ``(1) from a plan described in clause (iii), (iv), (v), or 
        (vi) of section 402(c)(8)(B), and
            ``(2) in connection with such individual's qualified first 
        responder service.
    ``(c) Annualized Excludable Disability Amount.--For purposes of 
this section--
            ``(1) In general.--The term `annualized excludable 
        disability amount' means, with respect to any individual, the 
        service-connected excludable disability amounts which are 
        properly attributable to the 12-month period immediately 
        preceding the date on which such individual attains retirement 
        age.
            ``(2) Service-connected excludable disability amount.--The 
        term `service-connected excludable disability amount' means 
        periodic payments received by an individual which--
                    ``(A) are not includible in such individual's gross 
                income under section 104(a)(1),
                    ``(B) are received in connection with such 
                individual's qualified first responder service, and
                    ``(C) terminate when such individual attains 
                retirement age.
            ``(3) Special rule for partial-year payments.--In the case 
        of an individual who only receives service-connected excludable 
        disability amounts properly attributable to a portion of the 
        12-month period described in paragraph (1), such paragraph 
        shall be applied by multiplying such amounts by the ratio of 
        365 to the number of days in such period to which such amounts 
        were properly attributable.
    ``(d) Qualified First Responder Service.--For purposes of this 
section, the term `qualified first responder service' means service as 
a law enforcement officer, firefighter, paramedic, or emergency medical 
technician.''.
    (b) Clerical Amendment.--The table of sections for part III of 
subchapter B of chapter 1 of such Code is amended by inserting after 
the item relating to section 139B the following new item:

``Sec. 139C. Certain disability-related first responder retirement 
                            payments.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to amounts received with respect to taxable years beginning after 
December 31, 2027.

SEC. 313. INDIVIDUAL RETIREMENT PLAN STATUTE OF LIMITATIONS FOR EXCISE 
              TAX ON EXCESS CONTRIBUTIONS AND CERTAIN ACCUMULATIONS.

    Section 6501(l) of the Internal Revenue Code of 1986 is amended by 
adding at the end the following new paragraph:
            ``(4) Individual retirement plans.--
                    ``(A) In general.--For purposes of any tax imposed 
                by section 4973 or 4974 in connection with an 
                individual retirement plan, the return referred to in 
                this section shall be the income tax return filed by 
                the person on whom the tax under such section is 
                imposed for the year in which the act (or failure to 
                act) giving rise to the liability for such tax 
                occurred.
                    ``(B) Rule in case of individuals not required to 
                file return.--In the case of a person who is not 
                required to file an income tax return for such year--
                            ``(i) the return referred to in this 
                        section shall be the income tax return that 
                        such person would have been required to file 
                        but for the fact that such person was not 
                        required to file such return, and
                            ``(ii) the 3-year period referred to in 
                        subsection (a) with respect to the return shall 
                        be deemed to begin on the date by which the 
                        return would have been required to be filed 
                        (excluding any extension thereof).''.

SEC. 314. REQUIREMENT TO PROVIDE PAPER STATEMENTS IN CERTAIN CASES.

    (a) In General.--Section 105(a)(2) of the Employee Retirement 
Income Security Act of 1974 (29 U.S.C. 1025(a)(2)) is amended--
            (1) in subparagraph (A)(iv), by inserting ``subject to 
        subparagraph (E),'' before ``may be delivered''; and
            (2) by adding at the end the following:
                    ``(E) Provision of paper statements.--With respect 
                to at least 1 pension benefit statement furnished for a 
                calendar year with respect to an individual account 
                plan under paragraph (1)(A), and with respect to at 
                least 1 pension benefit statement furnished every 3 
                calendar years with respect to a defined benefit plan 
                under paragraph (1)(B), such statement shall be 
                furnished on paper in written form except--
                            ``(i) in the case of a plan that furnishes 
                        such statement in accordance with section 
                        2520.104b-1(c) of title 29, Code of Federal 
                        Regulations; or
                            ``(ii) in the case of a plan that permits a 
                        participant or beneficiary to request that the 
                        statements referred to in the matter preceding 
                        clause (i) be furnished by electronic delivery, 
                        if the participant or beneficiary requests that 
                        such statements be delivered electronically and 
                        the statements are so delivered.''.
    (b) Implementation.--
            (1) In general.--The Secretary of Labor shall, not later 
        than December 31, 2022, update section 2520.104b-1(c) of title 
        29, Code of Federal Regulations, to provide that a plan may 
        furnish the statements referred to in subparagraph (E) of 
        section 105(a)(2) by electronic delivery only if, in addition 
        to meeting the other requirements under the regulations--
                    (A) such plan furnishes each participant or 
                beneficiary, including participants described in 
                subparagraph (B), a one-time initial notice on paper in 
                written form, prior to the electronic delivery of any 
                pension benefit statement, of their right to request 
                that all documents required to be disclosed under title 
                I of the Employee Retirement Income Security Act of 
                1974 be furnished on paper in written form; and
                    (B) such plan furnishes each participant who is 
                separated from service with at least 1 pension benefit 
                statement on paper in written form for each calendar 
                year, unless, on election of the participant, the 
                participant receives such statements electronically.
            (2) Other guidance.--In implementing the amendment made by 
        subsection (a) with respect to a plan that discloses required 
        documents or statements electronically, in accordance with 
        applicable guidance governing electronic disclosure by the 
        Department of Labor (with the exception of section 2520.104b-
        1(c) of title 29, Code of Federal Regulations), the Secretary 
        of Labor shall, not later than December 31, 2022, update such 
        guidance to the extent necessary to ensure that--
                    (A) a participant or beneficiary under such a plan 
                is permitted the opportunity to request that any 
                disclosure required to be delivered on paper under 
                applicable guidance by the Department of Labor shall be 
                furnished by electronic delivery;
                    (B) each paper statement furnished under such a 
                plan pursuant to the amendment shall include--
                            (i) an explanation of how to request that 
                        all such statements, and any other document 
                        required to be disclosed under title I of the 
                        Employee Retirement Income Security Act of 
                        1974, be furnished by electronic delivery; and
                            (ii) contact information for the plan 
                        sponsor, including a telephone number;
                    (C) the plan may not charge any fee to a 
                participant or beneficiary for the delivery of any 
                paper statements;
                    (D) each paper pension benefit statement shall 
                identify each plan document required to be disclosed 
                and shall include information about how a participant 
                or beneficiary may access each such document;
                    (E) each document required to be disclosed that is 
                furnished by electronic delivery under such a plan 
                shall include an explanation of how to request that all 
                such documents be furnished on paper in written form; 
                and
                    (F) a plan is permitted to furnish a duplicate 
                electronic statement in any case in which the plan 
                furnishes a paper pension benefit statement.
    (c) Effective Date.--The amendment made by subsection (a) shall 
apply with respect to plan years beginning after December 31, 2023.

SEC. 315. SEPARATE APPLICATION OF TOP HEAVY RULES TO DEFINED 
              CONTRIBUTION PLANS COVERING EXCLUDIBLE EMPLOYEES.

    (a) In General.--Section 416(c)(2) of the Internal Revenue Code of 
1986 is amended by adding at the end the following:
                    ``(C) Separate application to employees not meeting 
                age and service requirements.--If employees not meeting 
                the age or service requirements of section 410(a)(1) 
                (without regard to subparagraph (B) thereof) are 
                covered under a plan of the employer which meets the 
                requirements of subparagraphs (A) and (B) separately 
                with respect to such employees, such employees may be 
                excluded from consideration in determining whether any 
                plan of the employer meets the requirements of 
                subparagraphs (A) and (B).''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply to plan years beginning after the date of the enactment of this 
Act.

SEC. 316. REPAYMENT OF QUALIFIED BIRTH OR ADOPTION DISTRIBUTION LIMITED 
              TO 3 YEARS.

    (a) In General.--Section 72(t)(2)(H)(v)(I) of the Internal Revenue 
Code of 1986 is amended by striking ``may make'' and inserting ``may, 
at any time during the 3-year period beginning on the day after the 
date on which such distribution was received, make''.
    (b) Effective Date.--The amendment made by this section shall take 
effect as if included in the enactment of section 113 of the Setting 
Every Community Up for Retirement Enhancement Act of 2019.

SEC. 317. EMPLOYER MAY RELY ON EMPLOYEE CERTIFYING THAT DEEMED HARDSHIP 
              DISTRIBUTION CONDITIONS ARE MET.

    (a) Cash or Deferred Arrangements.--Section 401(k)(14) of the 
Internal Revenue Code of 1986 is amended by adding at the end the 
following new subparagraph:
                    ``(C) Employee certification.--In determining 
                whether a distribution is upon the hardship of an 
                employee, the administrator of the plan may rely on a 
                certification by the employee that the distribution is 
                on account of a financial need of a type that is deemed 
                in regulations prescribed by the Secretary to be an 
                immediate and heavy financial need and that such 
                distribution is not in excess of the amount required to 
                satisfy such financial need.''.
    (b) 403(b) Plans.--
            (1) Custodial accounts.--Section 403(b)(7) of such Code is 
        amended by adding at the end the following new subparagraph:
                    ``(D) Employee certification.--In determining 
                whether a distribution is upon the financial hardship 
                of an employee, the administrator of the plan may rely 
                on a certification by the employee that the 
                distribution is on account of a financial need of a 
                type that is deemed in regulations prescribed by the 
                Secretary to be an immediate and heavy financial need 
                and that such distribution is not in excess of the 
                amount required to satisfy such financial need.''.
            (2) Annuity contracts.--Section 403(b)(11) of such Code is 
        amended by adding at the end the following: ``In determining 
        whether a distribution is upon hardship of an employee, the 
        administrator of the plan may rely on a certification by the 
        employee that the distribution is on account of a financial 
        need of a type that is deemed in regulations prescribed by the 
        Secretary to be an immediate and heavy financial need and that 
        such distribution is not in excess of the amount required to 
        satisfy such financial need.''.
    (c) 457(b) Plan.--Section 457(d) of such Code is amended by adding 
at the end the following new paragraph:
            ``(4) Participant certification.--In determining whether a 
        distribution to a participant is made when the participant is 
        faced with an unforeseeable emergency, the administrator of a 
        plan maintained by an eligible employer described in subsection 
        (e)(1)(A) may rely on a certification by the participant that 
        the distribution is made when the participant is faced with 
        unforeseeable emergency of a type that is described in 
        regulations prescribed by the Secretary as an unforeseeable 
        emergency and that the distribution is not in excess of the 
        amount reasonably necessary to satisfy the emergency need.''.
    (d) Effective Date.--The amendments made by this section shall 
apply to plan years beginning after December 31, 2022.

SEC. 318. PENALTY-FREE WITHDRAWALS FROM RETIREMENT PLANS FOR 
              INDIVIDUALS IN CASE OF DOMESTIC ABUSE.

    (a) In General.--Section 72(t)(2) of the Internal Revenue Code of 
1986 is amended by adding at the end the following new subparagraph:
                    ``(I) Distributions from retirement plans in case 
                of domestic abuse.--
                            ``(i) In general.--Any eligible 
                        distribution to a domestic abuse victim.
                            ``(ii) Limitation.--The aggregate amount 
                        which may be treated as an eligible 
                        distribution to a domestic abuse victim by any 
                        individual shall not exceed an amount equal to 
                        the lesser of--
                                    ``(I) $10,000, or
                                    ``(II) 50 percent of the present 
                                value of the nonforfeitable accrued 
                                benefit of the employee under the plan.
                            ``(iii) Eligible distribution to a domestic 
                        abuse victim.--For purposes of this 
                        subparagraph--
                                    ``(I) In general.--A distribution 
                                shall be treated as an eligible 
                                distribution to a domestic abuse victim 
                                if such distribution is from an 
                                applicable eligible retirement plan to 
                                an individual and made during the 1-
                                year period beginning on any date on 
                                which the individual is a victim of 
                                domestic abuse by a spouse or domestic 
                                partner.
                                    ``(II) Domestic abuse.--The term 
                                `domestic abuse' means physical, 
                                psychological, sexual, emotional, or 
                                economic abuse, including efforts to 
                                control, isolate, humiliate, or 
                                intimidate the victim, or to undermine 
                                the victim's ability to reason 
                                independently, including by means of 
                                abuse of the victim's child or another 
                                family member living in the household.
                            ``(iv) Treatment of plan distributions.--
                                    ``(I) In general.--If a 
                                distribution to an individual would 
                                (without regard to clause (ii)) be an 
                                eligible distribution to a domestic 
                                abuse victim , a plan shall not be 
                                treated as failing to meet any 
                                requirement of this title merely 
                                because the plan treats the 
                                distribution as an eligible 
                                distribution to a domestic abuse 
                                victim, unless the aggregate amount of 
                                such distributions from all plans 
                                maintained by the employer (and any 
                                member of any controlled group which 
                                includes the employer) to such 
                                individual exceeds the limitation under 
                                clause (ii).
                                    ``(II) Controlled group.--For 
                                purposes of subclause (I), the term 
                                `controlled group' means any group 
                                treated as a single employer under 
                                subsection (b), (c), (m), or (o) of 
                                section 414.
                            ``(v) Amount distributed may be repaid.--
                                    ``(I) In general.--Any individual 
                                who receives a distribution described 
                                in clause (i) may, at any time during 
                                the 3-year period beginning on the day 
                                after the date on which such 
                                distribution was received, make one or 
                                more contributions in an aggregate 
                                amount not to exceed the amount of such 
                                distribution to an applicable eligible 
                                retirement plan of which such 
                                individual is a beneficiary and to 
                                which a rollover contribution of such 
                                distribution could be made under 
                                section 402(c), 403(a)(4), 403(b)(8), 
                                408(d)(3), or 457(e)(16), as the case 
                                may be.
                                    ``(II) Limitation on contributions 
                                to applicable eligible retirement plans 
                                other than IRAs.--The aggregate amount 
                                of contributions made by an individual 
                                under subclause (I) to any applicable 
                                eligible retirement plan which is not 
                                an individual retirement plan shall not 
                                exceed the aggregate amount of eligible 
                                distributions to a domestic abuse 
                                victim which are made from such plan to 
                                such individual. Subclause (I) shall 
                                not apply to contributions to any 
                                applicable eligible retirement plan 
                                which is not an individual retirement 
                                plan unless the individual is eligible 
                                to make contributions (other than those 
                                described in subclause (I)) to such 
                                applicable eligible retirement plan.
                                    ``(III) Treatment of repayments of 
                                distributions from applicable eligible 
                                retirement plans other than iras.--If a 
                                contribution is made under subclause 
                                (I) with respect to an eligible 
                                distribution to a domestic abuse victim 
                                from an applicable eligible retirement 
                                plan other than an individual 
                                retirement plan, then the taxpayer 
                                shall, to the extent of the amount of 
                                the contribution, be treated as having 
                                received such distribution in an 
                                eligible rollover distribution (as 
                                defined in section 402(c)(4)) and as 
                                having transferred the amount to the 
                                applicable eligible retirement plan in 
                                a direct trustee to trustee transfer 
                                within 60 days of the distribution.
                                    ``(IV) Treatment of repayments for 
                                distributions from iras.--If a 
                                contribution is made under subclause 
                                (I) with respect to an eligible 
                                distribution to a domestic abuse victim 
                                from an individual retirement plan, 
                                then, to the extent of the amount of 
                                the contribution, such distribution 
                                shall be treated as a distribution 
                                described in section 408(d)(3) and as 
                                having been transferred to the 
                                applicable eligible retirement plan in 
                                a direct trustee to trustee transfer 
                                within 60 days of the distribution.
                            ``(vi) Definition and special rules.--For 
                        purposes of this subparagraph:
                                    ``(I) Applicable eligible 
                                retirement plan.--The term `applicable 
                                eligible retirement plan' means an 
                                eligible retirement plan (as defined in 
                                section 402(c)(8)(B)) other than a 
                                defined benefit plan.
                                    ``(II) Exemption of distributions 
                                from trustee to trustee transfer and 
                                withholding rules.--For purposes of 
                                sections 401(a)(31), 402(f), and 3405, 
                                an eligible distribution to a domestic 
                                abuse victim shall not be treated as an 
                                eligible rollover distribution.
                                    ``(III) Distributions treated as 
                                meeting plan distribution requirements; 
                                self-certification.--Any distribution 
                                which the employee or participant 
                                certifies as being an eligible 
                                distribution to a domestic abuse victim 
                                shall be treated as meeting the 
                                requirements of sections 
                                401(k)(2)(B)(i), 403(b)(7)(A)(i), 
                                403(b)(11), and 457(d)(1)(A).''.
    (b) Effective Date.--The amendments made by this section shall 
apply to distributions made after the date of the enactment of this 
Act.

SEC. 319. REFORM OF FAMILY ATTRIBUTION RULES.

    (a) Controlled Groups.--Section 414(b) of the Internal Revenue Code 
of 1986 is amended--
            (1) by striking ``For purposes of'' and inserting the 
        following:
            ``(1) In general.--For purposes of'', and
            (2) by adding at the end the following new paragraphs:
            ``(2) Special rules for applying family attribution.--For 
        purposes of applying the attribution rules under section 1563 
        with respect to paragraph (1), the following rules apply:
                    ``(A) Community property laws shall be disregarded 
                for purposes of determining ownership.
                    ``(B) Except as provided by the Secretary, stock of 
                an individual not attributed under section 1563(e)(5) 
                to such individual's spouse shall not be attributed to 
                such spouse by reason of section 1563(e)(6)(A).
                    ``(C) Except as provided by the Secretary, in the 
                case of stock in different corporations that is 
                attributed to a child under section 1563(e)(6)(A) from 
                each parent, and is not attributed to such parents as 
                spouses under section 1563(e)(5), such attribution to 
                the child shall not by itself result in such 
                corporations being members of the same controlled 
                group.
            ``(3) Plan shall not fail to be treated as satisfying this 
        section.--If the application of paragraph (2) causes two or 
        more entities to be a controlled group, or to no longer be in a 
        controlled group, such change shall be treated as a transaction 
        to which section 410(b)(6)(C) applies.''.
    (b) Affiliated Service Groups.--Section 414(m)(6)(B) of such Code 
is amended--
            (1) by striking ``Ownership.--In determining'' and 
        inserting the following: ``Ownership.--
                            ``(i) In general.--In determining'', and
            (2) by adding at the end the following new clauses:
                            ``(ii) Special rules for applying family 
                        attribution.--For purposes of applying the 
                        attribution rules under section 318 with 
                        respect to clause (i), the following rules 
                        apply:
                                    ``(I) Community property laws shall 
                                be disregarded for purposes of 
                                determining ownership.
                                    ``(II) Except as provided by the 
                                Secretary, stock of an individual not 
                                attributed under section 
                                318(a)(1)(A)(i) to such individual's 
                                spouse shall not be attributed by 
                                reason of section 318(a)(1)(A)(ii) to 
                                such spouse from a child who has not 
                                attained the age of 21 years.
                                    ``(III) Except as provided by the 
                                Secretary, in the case of stock in 
                                different corporations that is 
                                attributed under section 
                                318(a)(1)(A)(ii) to a child who has not 
                                attained the age of 21 years from each 
                                parent, and is not attributed to such 
                                parents as spouses under section 
                                318(a)(1)(A)(i), such attribution to 
                                the child shall not by itself result in 
                                such corporations being members of the 
                                same affiliated service group.
                            ``(iii) Plan shall not fail to be treated 
                        as satisfying this section.--If the application 
                        of clause (ii) causes two or more entities to 
                        be an affiliated service group, or to no longer 
                        be in an affiliated service group, such change 
                        shall be treated as a transaction to which 
                        section 410(b)(6)(C) applies.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to plan years beginning on or after the date of the enactment of 
this Act.

SEC. 320. AMENDMENTS TO INCREASE BENEFIT ACCRUALS UNDER PLAN FOR 
              PREVIOUS PLAN YEAR ALLOWED UNTIL EMPLOYER TAX RETURN DUE 
              DATE.

    (a) In General.--Section 401(b) of the Internal Revenue Code of 
1986 is amended by adding at the end the following new paragraph:
            ``(3) Retroactive plan amendments that increase benefit 
        accruals.--If--
                    ``(A) an employer amends a stock bonus, pension, 
                profit-sharing, or annuity plan to increase benefits 
                accrued under the plan effective for the preceding plan 
                year (other than increasing the amount of matching 
                contributions (as defined in subsection (m)(4)(A))),
                    ``(B) such amendment would not otherwise cause the 
                plan to fail to meet any of the requirements of this 
                subchapter, and
                    ``(C) such amendment is adopted before the time 
                prescribed by law for filing the return of the employer 
                for a taxable year (including extensions thereof) 
                during which such amendment is effective,
        the employer may elect to treat such amendment as having been 
        adopted as of the last day of the plan year in which the 
        amendment is effective.''.
    (b) Effective Date.--The amendments made by this section shall 
apply to plan years beginning after December 31, 2023.

SEC. 321. RETROACTIVE FIRST YEAR ELECTIVE DEFERRALS FOR SOLE 
              PROPRIETORS.

    (a) In General.--Section 401(b)(2) of the Internal Revenue Code of 
1986 is amended by adding at the end the following: ``In the case of an 
individual who owns the entire interest in an unincorporated trade or 
business, and who is the only employee of such trade or business, any 
elective deferrals (as defined in section 402(g)(3)) under a qualified 
cash or deferred arrangement to which the preceding sentence applies, 
which are made by such individual before the time for filing the return 
of such individual for the taxable year (determined without regard to 
any extensions) ending after or with the end of the plan's first plan 
year, shall be treated as having been made before the end of such first 
plan year.''.
    (b) Effective Date.--The amendment made by this section shall apply 
to plan years beginning after the date of the enactment of this Act.

SEC. 322. LIMITING CESSATION OF IRA TREATMENT TO PORTION OF ACCOUNT 
              INVOLVED IN A PROHIBITED TRANSACTION.

    (a) In General.--Section 408(e)(2)(A) of the Internal Revenue Code 
of 1986 is amended by striking ``such account ceases to be an 
individual retirement account'' and inserting the following: ``the 
amount involved (as defined in section 4975(f)(4)) in such transaction 
shall be treated as distributed to the individual''.
    (b) Conforming Amendments.--
            (1) Section 408(e)(2)(B) of such Code is amended to read as 
        follows:
                    ``(B) Account treated as distributing potion of 
                assets used in prohibited transaction.--In any case in 
                which a portion of an individual retirement account is 
                treated as distributed under subparagraph (A) as of the 
                first day of any taxable year, paragraph (1) of 
                subsection (d) applies as if there were a distribution 
                on such first day in an amount equal to the fair market 
                value of such portion, determined as of the date on 
                which the transaction prohibited by section 4975 
                occurs.''.
                    (A) by striking ``all its assets.--In any case'' 
                and all that follows through ``by reason of 
                subparagraph (A)'' and inserting the following: 
                ``portion of assets used in prohibited transaction.--In 
                any case in which a portion of an individual retirement 
                account is treated as distributed under subparagraph 
                (A)'', and
                    (B) by striking ``all assets in the account'' and 
                inserting ``such portion''.
            (2) Section 4975(c)(3) of such Code is amended by striking 
        ``the account ceases'' and all that follows and inserting the 
        following: ``the portion of the account used in the transaction 
        is treated as distributed under paragraph (2)(A) or (4) of 
        section 408(e).''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after the date of the enactment of 
this Act.

SEC. 323. REVIEW OF PENSION RISK TRANSFER INTERPRETIVE BULLETIN.

    Not later than 1 year after the date of enactment of this Act, the 
Secretary of Labor shall--
            (1) review section 2509.95-1 of title 29, Code of Federal 
        Regulations (relating to the fiduciary standards under the 
        Employee Retirement Income Security Act of 1974 when selecting 
        an annuity provider for a defined benefit pension plan) to 
        determine whether amendments to such section are warranted; and
            (2) report to Congress on the findings of such review, 
        including an assessment of any risk to participants.

                     TITLE IV--TECHNICAL AMENDMENTS

SEC. 401. AMENDMENTS RELATING TO SETTING EVERY COMMUNITY UP FOR 
              RETIREMENT ENHANCEMENT ACT OF 2019.

    (a) Technical Amendments.--
            (1) Amendments relating to section 103.--
                    (A) Section 401(k)(12)(G) of the Internal Revenue 
                Code of 1986 is amended by striking ``the requirements 
                under subparagraph (A)(i)'' and inserting ``the 
                contribution requirements under subparagraph (B) or 
                (C)''.
                    (B) Section 401(k)(13)(D)(iv) of such Code is 
                amended by striking ``and (F)'' and inserting ``and 
                (G)''.
                    (C) Section 401(m)(12) of such Code is amended by 
                striking ``and'' at the end of subparagraph (A), by 
                redesignating subparagraph (B) as subparagraph (C), and 
                by inserting after subparagraph (A) (as so amended) the 
                following new subparagraph:
                    ``(B) meets the notice requirements of subsection 
                (k)(13)(E), and''.
            (2) Amendment relating to section 112.--Section 
        401(k)(15)(B)(i)(II) of such Code is amended by striking 
        ``subsection (m)(2)'' and inserting ``paragraphs (2), (11), and 
        (12) of subsection (m)''.
            (3) Amendment relating to section 114.--Section 
        401(a)(9)(C)(iii) of such Code is amended by striking 
        ``employee to whom clause (i)(II) applies'' and inserting 
        ``employee (other than an employee to whom clause (i)(II) does 
        not apply by reason of clause (ii))''.
            (4) Amendment relating to section 116.--Section 4973(b) of 
        such Code is amended by adding at the end of the flush matter 
        the following: ``Such term shall not include any designated 
        nondeductible contribution (as defined in subparagraph (C) of 
        section 408(o)(2)) which does not exceed the nondeductible 
        limit under subparagraph (B) thereof by reason of an election 
        under section 408(o)(5).''.
            (5) Effective date.--The amendments made by this subsection 
        shall take effect as if included in the section of the Setting 
        Every Community Up for Retirement Enhancement Act of 2019 to 
        which the amendment relates.
    (b) Clerical Amendments.--
            (1) Section 408(o)(5)(A) of such Code is amended by 
        striking ``subsection (b)'' and inserting ``section 219(b)''.
            (2) Section 72(t)(2)(H)(vi)(IV) of such Code is amended by 
        striking ``403(b)(7)(A)(ii)'' and inserting `` 
        403(b)(7)(A)(i)''.

                   TITLE V--ADMINISTRATIVE PROVISIONS

SEC. 501. PROVISIONS RELATING TO PLAN AMENDMENTS.

    (a) In General.--If this section applies to any retirement plan or 
contract amendment--
            (1) such retirement plan or contract shall be treated as 
        being operated in accordance with the terms of the plan during 
        the period described in subsection (b)(2)(A); and
            (2) except as provided by the Secretary of the Treasury (or 
        the Secretary's delegate), such retirement plan shall not fail 
        to meet the requirements of section 411(d)(6) of the Internal 
        Revenue Code of 1986 and section 204(g) of the Employee 
        Retirement Income Security Act of 1974 by reason of such 
        amendment.
    (b) Amendments to Which Section Applies.--
            (1) In general.--This section shall apply to any amendment 
        to any retirement plan or annuity contract which is made--
                    (A) pursuant to any amendment made by this Act or 
                pursuant to any regulation issued by the Secretary of 
                the Treasury or the Secretary of Labor (or a delegate 
                of either such Secretary) under this Act; and
                    (B) on or before the last day of the first plan 
                year beginning on or after January 1, 2024, or such 
                later date as the Secretary of the Treasury may 
                prescribe.
        In the case of a governmental plan (as defined in section 
        414(d) of the Internal Revenue Code of 1986), or an applicable 
        collectively bargained plan, this paragraph shall be applied by 
        substituting ``2026'' for ``2024''. For purposes of the 
        preceding sentence, the term ``applicable collectively 
        bargained plan'' means a plan maintained pursuant to 1 or more 
        collective bargaining agreements between employee 
        representatives and 1 or more employers ratified before the 
        date of enactment of this Act.
            (2) Conditions.--This section shall not apply to any 
        amendment unless--
                    (A) during the period--
                            (i) beginning on the date the legislative 
                        or regulatory amendment described in paragraph 
                        (1)(A) takes effect (or in the case of a plan 
                        or contract amendment not required by such 
                        legislative or regulatory amendment, the 
                        effective date specified by the plan); and
                            (ii) ending on the date described in 
                        paragraph (1)(B) (as modified by the second 
                        sentence of paragraph (1)) (or, if earlier, the 
                        date the plan or contract amendment is 
                        adopted),
                the plan or contract is operated as if such plan or 
                contract amendment were in effect; and
                    (B) such plan or contract amendment applies 
                retroactively for such period.
    (c) Coordination With Other Provisions Relating to Plan 
Amendments.--
            (1) SECURE act.--Section 601(b)(1) of the Setting Every 
        Community Up for Retirement Enhancement Act of 2019 is 
        amended--
                    (A) by striking ``January 1, 2022'' in subparagraph 
                (B) and inserting ``January 1, 2024'', and
                    (B) by striking ``substituting `2024' for `2022'.'' 
                in the flush matter at the end and inserting 
                ``substituting `2026' for `2024'.''.
            (2) CARES act.--
                    (A) Special rules for use of retirement funds.--
                Section 2202(c)(2)(A) of the CARES Act is amended by 
                striking ``January 1, 2022'' in clause (ii) and 
                inserting ``January 1, 2024''.
                    (B) Temporary waiver of required minimum 
                distributions rules for certain retirement plans and 
                accounts.--Section 2203(c)(2)(B)(i) of the CARES Act is 
                amended--
                            (i) by striking ``January 1, 2022'' in 
                        subclause (II) and inserting ``January 1, 
                        2024'', and
                            (ii) by striking ``substituting `2024' for 
                        `2022'.'' in the flush matter at the end and 
                        inserting ``substituting `2026' for `2024'.''.
                    (C) Taxpayer certainty and disaster tax relief act 
                of 2020.--Section 302(d)(2)(A) of the Taxpayer 
                Certainty and Disaster Tax Relief Act of 2020 is 
                amended by striking ``January 1, 2022'' in clause (ii) 
                and inserting ``January 1, 2024''.

                      TITLE VI--REVENUE PROVISIONS

SEC. 601. SIMPLE AND SEP ROTH IRAS.

    (a) In General.--Section 408A of the Internal Revenue Code of 1986 
is amended by striking subsection (f).
    (b) Rules Relating to Simplified Employee Pensions.--
            (1) Contributions.--Section 402(h)(1) of such Code is 
        amended by striking ``and'' at the end of subparagraph (A), by 
        striking the period at the end of subparagraph (B) and 
        inserting ``, and'', and by adding at the end the following new 
        subparagraph:
                    ``(C) in the case of any contributions pursuant to 
                a simplified employer pension which are made to an 
                individual retirement plan designated as a Roth IRA, 
                such contribution shall not be excludable from gross 
                income.''.
            (2) Distributions.--Section 402(h)(3) of such Code is 
        amended by inserting ``, or section 408A(d) in the case of an 
        individual retirement plan designated as a Roth IRA'' before 
        the period at the end.
            (3) Election required.--Section 408(k) of such Code is 
        amended by redesignating paragraphs (7), (8), and (9) as 
        paragraphs (8), (9), and (10), respectively, and by inserting 
        the after paragraph (6) the following new paragraph:
            ``(7) Roth contribution election.--An individual retirement 
        plan which is designated as a Roth IRA shall not be treated as 
        a simplified employee pension under this subsection unless the 
        employee elects for such plan to be so treated (at such time 
        and in such manner as the Secretary may provide).''.
    (c) Rules Relating to Simple Retirement Accounts.--
            (1) Election required.--Section 408(p) of such Code is 
        amended by adding at the end the following new paragraph:
            ``(11) Roth contribution election.--An individual 
        retirement plan which is designated as a Roth IRA shall not be 
        treated as a simple retirement account under this subsection 
        unless the employee elects for such plan to be so treated (at 
        such time and in such manner as the Secretary may provide).''.
            (2) Rollovers.--Section 408A(e) of such Code is amended by 
        adding at the end the following new paragraph:
            ``(3) Simple retirement accounts.--In the case of any 
        payment or distribution out of a simple retirement account (as 
        defined in section 408(p)) with respect to which an election 
        has been made under section 408(p)(11) and to which 72(t)(6) 
        applies, the term `qualified rollover contribution' shall not 
        include any payment or distribution paid into an account other 
        than another simple retirement account (as so defined).''.
    (d) Coordination With Roth Contribution Limitation.--Section 
408A(c) of such Code is amended by adding at the end the following new 
paragraph:
            ``(7) Coordination with limitation for simple retirement 
        plans and SEPs.--In the case of an individual on whose behalf 
        contributions are made to a simple retirement account or a 
        simplified employee pension, the amount described in paragraph 
        (2)(A) shall be increased by an amount equal to the 
        contributions made on the individual's behalf to such account 
        or pension for the taxable year, but only to the extent such 
        contributions--
                    ``(A) in the case of a simplified retirement 
                account--
                            ``(i) do not exceed the sum of the dollar 
                        amount in effect for the taxable year under 
                        section 408(p)(2)(A)(ii) and the employer 
                        contribution required under subparagraph 
                        (A)(iii) or (B)(i), as the case may be, of 
                        section 408(p)(2), and
                            ``(ii) do not cause the elective deferrals 
                        (as defined in section 402(g)(3)) on behalf of 
                        such individual to exceed the limitation under 
                        section 402(g)(1) (taking into account any 
                        additional elective deferrals permitted under 
                        section 414(v)), or
                    ``(B) in the case of a simplified employee pension, 
                do not exceed the limitation in effect under section 
                408(j).''.
    (e) Conforming Amendment.--Section 408A(d)(2)(B) of such Code is 
amended by inserting ``, or employer in the case of a simple retirement 
account (as defined in section 408(p)) or simplified employee pension 
(as defined in section 408(k)),'' after ``individual's spouse''.
    (f) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2022.

SEC. 602. HARDSHIP WITHDRAWAL RULES FOR 403(B) PLANS.

    (a) In General.--Section 403(b) of the Internal Revenue Code of 
1986, as amended by the preceding provisions of this Act, is amended by 
adding at the end the following new paragraph:
            ``(16) Special rules relating to hardship withdrawals.--For 
        purposes of paragraphs (7) and (11)--
                    ``(A) Amounts which may be withdrawn.--The 
                following amounts may be distributed upon hardship of 
                the employee:
                            ``(i) Contributions made pursuant to a 
                        salary reduction agreement (within the meaning 
                        of section 3121(a)(5)(D)).
                            ``(ii) Qualified nonelective contributions 
                        (as defined in section 401(m)(4)(C)).
                            ``(iii) Qualified matching contributions 
                        described in section 401(k)(3)(D)(ii)(I).
                            ``(iv) Earnings on any contributions 
                        described in clause (i), (ii), or (iii).
                    ``(B) No requirement to take available loan.--A 
                distribution shall not be treated as failing to be made 
                upon the hardship of an employee solely because the 
                employee does not take any available loan under the 
                plan.''.
    (b) Conforming Amendments.--
            (1) Section 403(b)(7)(A)(i)(V) of such Code is amended by 
        striking ``in the case of contributions made pursuant to a 
        salary reduction agreement (within the meaning of section 
        3121(a)(5)(D))'' and inserting ``subject to the provisions of 
        paragraph (16)''.
            (2) Paragraph (11) of section 403(b) of such Code, as 
        amended by the preceding provisions of this Act, is amended--
                    (A) by striking ``in'' in subparagraph (B) and 
                inserting ``subject to the provisions of paragraph 
                (16), in'', and
                    (B) by striking the penultimate sentence.
    (c) Effective Date.--The amendments made by this section shall 
apply to plan years beginning after December 31, 2022.

SEC. 603. ELECTIVE DEFERRALS GENERALLY LIMITED TO REGULAR CONTRIBUTION 
              LIMIT.

    (a) Applicable Employer Plans.--Section 414(v)(1) of the Internal 
Revenue Code of 1986 is amended by adding at the end the following: 
``Except in the case of an applicable employer plan described in 
paragraph (6)(A)(iv), the preceding sentence shall only apply if 
contributions are designated Roth contributions (as defined in section 
402A(c)(1)).''.
    (b) Conforming Amendments.--
            (1) Section 402(g)(1) of such Code is amended by striking 
        subparagraph (C).
            (2) Section 457(e)(18)(A)(ii) of such Code is amended by 
        inserting ``the lesser of any designated Roth contributions 
        made by the participant to the plan or'' before ``the 
        applicable dollar amount''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2022.

SEC. 604. OPTIONAL TREATMENT OF EMPLOYER MATCHING CONTRIBUTIONS AS ROTH 
              CONTRIBUTIONS.

    (a) In General.--Section 402A(a) of the Internal Revenue Code of 
1986 is amended by redesignating paragraph (2) as paragraph (3), by 
striking ``and'' at the end of paragraph (1), and by inserting after 
paragraph (1) the following new paragraph:
            ``(2) any designated Roth contribution which is made by the 
        employer to the program on the employee's behalf, and on 
        account of the employee's contribution, elective deferral, or 
        (subject to the requirements of section 401(m)(13)) qualified 
        student loan payment, shall be treated as a matching 
        contribution for purposes of this chapter, except that such 
        contribution shall not be excludable from gross income, and''.
    (b) Matching Included in Qualified Roth Contribution Program.--
Section 402A(b)(1) of such Code is amended--
            (1) by inserting ``, or to have made on the employee's 
        behalf,'' after ``elect to make'', and
            (2) by inserting ``, or of matching contributions which may 
        otherwise be made on the employee's behalf,'' after ``otherwise 
        eligible to make''.
    (c) Designated Roth Matching Contributions.--Section 402A(c)(1) of 
such Code is amended by inserting ``or matching contribution'' after 
``elective deferral''.
    (d) Matching Contribution Defined.--Section 402A(e) of such Code is 
amended by adding at the end the following:
            ``(3) Matching contribution.--The term `matching 
        contribution' means--
                    ``(A) any matching contribution described in 
                section 401(m)(4)(A), and
                    ``(B) any contribution to an eligible deferred 
                compensation plan (as defined in section 457(b)) by an 
                eligible employer described in section 457(e)(1)(A) on 
                behalf of an employee and on account of such employee's 
                elective deferral under such plan.''.
    (e) Effective Date.--The amendments made by this section shall 
apply to contributions made after the date of the enactment of this 
Act.

                      TITLE VII--BUDGETARY EFFECTS

SEC. 701. DETERMINATION OF BUDGETARY EFFECTS.

    The budgetary effects of this Act, for the purpose of complying 
with the Statutory Pay-As-You-Go Act of 2010, shall be determined by 
reference to the latest statement titled ``Budgetary Effects of PAYGO 
Legislation'' for this Act, submitted for printing in the Congressional 
Record by the Chairman of the House Budget Committee, provided that 
such statement has been submitted prior to the vote on passage.

            Passed the House of Representatives March 29, 2022.

            Attest:

                                             CHERYL L. JOHNSON,

                                                                 Clerk.