Improving Access to Retirement Savings Act
Bill: S.1703 | Sponsor: Sen. Grassley, Chuck (R-IA)
Policy area: Taxation

Summary:
Improving Access to Retirement Savings Act
This bill allows employers who establish a tax-exempt 403(b) pension plan to participate in a multiple employer plan (MEP) and to take the small employer pension plan start-up tax credit for their first three years of participation in a MEP.
The bill also establishes a safe harbor to allow certain pension plans to correct errors in administering automatic enrollment and escalation features for plans enrolling in a MEP, if such errors are corrected within a specified time period in a manner favorable to plan participants. It also permits employers that amend a stock bonus, pension, profit sharing, or annuity plan for a previous plan year to increase benefits accruals to elect to treat such amendment as having been adopted at the end of the current plan year.

To amend the Internal Revenue Code of 1986 to increase retirement 
   savings, to improve retirement plan administration, 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.

    This Act may be cited as the ``Improving Access to Retirement 
Savings Act''.

SEC. 2. 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 1 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 
                        subsection unless the plan meets the 
                        requirements of subparagraph (A) or (B) of 
                        section 413(e)(1), except in the case of a 
                        multiple employer plan maintained solely by a 
                        State, a political subdivision of a State, or 
                        an agency or instrumentality thereof.''.
    (b) Annual Registration for 403(b) Multiple Employer Plan.--Section 
6057 of the Internal Revenue Code of 1986 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 1 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 the Internal Revenue Code of 1986 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 1 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) Treated as pooled employer plan.--
                    (A) In general.--Section 3(43)(A) of the Employee 
                Retirement Income Security Act of 1974 (29 U.S.C. 
                1002(43)(A)) is amended--
                            (i) in clause (ii), by striking ``section 
                        501(a) of such Code or'' and inserting ``501(a) 
                        of such Code, a plan that consists of contracts 
                        described in section 403(b) of such Code, or''; 
                        and
                            (ii) 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.''.
                    (B) Conforming amendments.--Paragraphs 
                (43)(B)(v)(II) and (44)(A)(i)(I) of section 3 of such 
                Act (29 U.S.C. 1002) are each amended by striking 
                ``section 401(a) of such Code or'' and inserting 
                ``401(a) of such Code, a plan that consists of 
                contracts described in section 403(b) of such Code, 
                or''.
            (2) Fiduciaries.--Section 3(43)(B)(ii) of such Act (29 
        U.S.C. 1002(43)(B)(ii)) is amended--
                    (A) by striking ``trustees meeting the requirements 
                of section 408(a)(2) of the Internal Revenue Code of 
                1986'' and inserting ``trustees (or other fiduciaries 
                in the case of a plan that consists of contracts 
                described in section 403(b) of the Internal Revenue 
                Code of 1986) meeting the requirements of section 
                408(a)(2) of such Code''; and
                    (B) by striking ``holding'' and inserting ``holding 
                (or causing to be held under the terms of a plan 
                consisting of such contracts)''.
    (e) Regulations.--
            (1) Plan termination.--The Secretary of the Treasury (or 
        the Secretary's designee) shall prescribe such regulations as 
        may be necessary to clarify the treatment of a plan termination 
        by an employer in the case of plans to which section 403(b)(15) 
        of the Internal Revenue Code of 1986 applies.
            (2) Educational outreach to employers exempt from tax.--The 
        Secretary of the Treasury (or the Secretary's designee), in 
        consultation with the Secretary of Labor, shall provide 
        education and outreach to increase awareness among employers 
        which are exempt from tax under section 501(a) of such Code 
        that--
                    (A) multiple employer plans are subject to the 
                Employee Retirement Income Security Act of 1974, and
                    (B) each 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.
    (f) Modification of Model Plan Language.--
            (1) Plan notifications.--The Secretary of the Treasury (or 
        the Secretary's designee) shall modify the model plan language 
        published under section 413(e)(5) of the Internal Revenue Code 
        of 1986 to include language which notifies participating 
        employers which are exempt from tax under section 501(a) of 
        such Code 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 
        thereof) the Secretary shall publish model plan language 
        similar to model plan language published under section 
        413(e)(5) of such Code.
    (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 drawn solely because section 
403(b)(15)(A) of such Code (as added by this Act) does not apply 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) applies.

SEC. 3. 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 section 401(a), 403(b), 
        408, or 457(b), as applicable, solely by reason of a corrected 
        error.
            ``(2) Corrected error.--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 which is 9\1/2\ 
                months after the end of the plan year during which the 
                failure occurred,
                    ``(B) is corrected in a manner which 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 which 
        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 
to the correction of any error with respect to which the date described 
in section 414(aa)(2)(A) of the Internal Revenue Code of 1986 (as added 
by this section) is after the date of enactment of this Act.

SEC. 4. 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 apply 
to eligible employer plans which become effective with respect to the 
eligible employer after the date of the enactment of this Act.

SEC. 5. 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, 2022.
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