Title: Retirement Security and Savings Act of 2021
Policy area: Taxation

Summary:
Retirement Security and Savings Act of 2021
This bill modifies various tax policies, credits, and requirements that apply to employer-provided retirement plans and Individual Retirement Accounts.

[Congressional Bills 117th Congress]
[From the U.S. Government Publishing Office]
[S. 1770 Introduced in Senate (IS)]

<DOC>






117th CONGRESS
  1st Session
                                S. 1770

    To amend the Internal Revenue Code of 1986 to reform retirement 
                  provisions, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                              May 20, 2021

Mr. Cardin (for himself and Mr. Portman) introduced the following bill; 
     which was read twice and referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL


 
    To amend the Internal Revenue Code of 1986 to reform retirement 
                  provisions, 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, ETC.

    (a) Short Title.--This Act may be cited as the ``Retirement 
Security and Savings Act of 2021''.
    (b) Amendment of 1986 Code.--Except as otherwise expressly 
provided, whenever in this Act an amendment or repeal is expressed in 
terms of an amendment to, or repeal of, a section or other provision, 
the reference shall be considered to be made to a section or other 
provision of the Internal Revenue Code of 1986.
    (c) Table of Contents.--The table of contents for this Act is as 
follows:

Sec. 1. Short title, etc.
     TITLE I--EXPANDING COVERAGE AND INCREASING RETIREMENT SAVINGS

Sec. 101. Secure deferral arrangements.
Sec. 102. Facilitating automatic enrollment.
Sec. 103. Credit for employers with respect to modified safe harbor 
                            requirements.
Sec. 104. Expansion of saver's credit.
Sec. 105. Modification of participation requirements for long-term, 
                            part-time workers.
Sec. 106. Separate application of top heavy rules to defined 
                            contribution plans covering excludible 
                            employees.
Sec. 107. 60-day rollover to inherited individual retirement plan of 
                            nonspouse beneficiary.
Sec. 108. Increase in age for required beginning date for mandatory 
                            distributions.
Sec. 109. Increase in credit limitation for small employer pension plan 
                            startup costs of certain employers.
Sec. 110. Credit for re-enrollment.
Sec. 111. Treatment of student loan payments as elective deferrals for 
                            purposes of matching contributions.
Sec. 112. Treatment of qualified retirement planning services.
Sec. 113. Allow additional nonelective contributions to simple plans.
Sec. 114. Reform of the minimum participation rule.
Sec. 115. Expansion of Employee Plans Compliance Resolution System.
Sec. 116. Enhancement of 403(b) plans.
Sec. 117. Eligibility for participation in retirement plans.
Sec. 118. Small immediate financial incentives for contributing to a 
                            plan.
Sec. 119. Indexing IRA catch-up limit.
Sec. 120. Higher catch-up limit to apply at age 60.
Sec. 121. Deferral of tax for certain sales of employer stock to 
                            employee stock ownership plan sponsored by 
                            S corporation.
Sec. 122. Credit for small employers providing retirement plans for 
                            military spouses.
                    TITLE II--PRESERVATION OF INCOME

Sec. 201. Qualifying longevity annuity contracts.
Sec. 202. Remove required minimum distribution barriers for life 
                            annuities.
Sec. 203. Eliminating a penalty on partial annuitization.
Sec. 204. Insurance-dedicated exchange-traded funds.
  TITLE III--SIMPLIFICATION AND CLARIFICATION OF RETIREMENT PLAN RULES

Sec. 301. Review and report to the Congress relating to reporting and 
                            disclosure requirements.
Sec. 302. Consolidation of defined contribution plan notices.
Sec. 303. Performance benchmarks for asset allocation funds.
Sec. 304. Permit nonspousal beneficiaries to roll assets to plans.
Sec. 305. Deferral agreements.
Sec. 306. Simplifying 402(f) notices.
Sec. 307. Permit plans to use base pay or rate of pay calculation.
Sec. 308. Roth SIMPLE IRAs.
Sec. 309. Reduction in excise tax on certain accumulations in qualified 
                            retirement plans.
Sec. 310. Clarification of catch-up contributions with respect to 
                            separate lines of business.
Sec. 311. Clarification of substantially equal periodic payment rule.
Sec. 312. Clarification of treatment of distributions of annuity 
                            contracts.
Sec. 313. Clarification regarding elective deferrals.
Sec. 314. Tax treatment of certain nontrade or business SEP 
                            contributions.
Sec. 315. Allow certain plan transfers and mergers.
Sec. 316. Exception from required distributions where aggregate 
                            retirement savings do not exceed $100,000.
Sec. 317. Hardship rules for 403(b) plans.
Sec. 318. IRA preservation.
Sec. 319. Elimination of additional tax on certain distributions.
Sec. 320. Distributions to firefighters.
Sec. 321. Eliminating unnecessary plan requirements related to 
                            unenrolled participants.
Sec. 322. Recovery of retirement plan overpayments.
Sec. 323. Retirement savings lost and found.
                 TITLE IV--DEFINED BENEFIT PLAN REFORMS

Sec. 401. Cash balance.
Sec. 402. Aligning use of lookback months to determine interest rates.
Sec. 403. Corrections of mortality tables.
Sec. 404. Cease double-indexing the variable rate premium.
Sec. 405. Enhancing retiree health benefits in pension plans.
       TITLE V--REFORMING PLAN RULES TO HARMONIZE WITH IRA RULES

Sec. 501. Roth plan distribution rules.
Sec. 502. Distributions for charitable purposes.
Sec. 503. Surviving spouse election to be treated as employee.
Sec. 504. Rollovers from Roth IRAs to plans.
                  TITLE VI--ADMINISTRATIVE PROVISIONS

Sec. 601. Provisions relating to plan amendments.

     TITLE I--EXPANDING COVERAGE AND INCREASING RETIREMENT SAVINGS

SEC. 101. SECURE DEFERRAL ARRANGEMENTS.

    (a) In General.--Subsection (k) of section 401 is amended by adding 
at the end the following new paragraph:
            ``(16) Alternative method for secure deferral arrangements 
        to meet nondiscrimination requirements.--
                    ``(A) In general.--A secure deferral arrangement 
                shall be treated as meeting the requirements of 
                paragraph (3)(A)(ii).
                    ``(B) Secure deferral arrangement.--For purposes of 
                this paragraph, the term `secure deferral arrangement' 
                means any cash or deferred arrangement which meets the 
                requirements of subparagraphs (C), (D), and (E) of 
                paragraph (13), except as modified by this paragraph.
                    ``(C) Qualified percentage.--For purposes of this 
                paragraph, with respect to any employee, the term 
                `qualified percentage' means, in lieu of the meaning 
                given such term in paragraph (13)(C)(iii), any 
                percentage determined under the arrangement if such 
                percentage is applied uniformly and is--
                            ``(i) at least 6 percent, but not greater 
                        than 10 percent, during the period ending on 
                        the last day of the first plan year which 
                        begins after the date on which the first 
                        elective contribution described in paragraph 
                        (13)(C)(i) is made with respect to such 
                        employee,
                            ``(ii) at least 7 percent during the first 
                        plan year following the plan year described in 
                        clause (i),
                            ``(iii) at least 8 percent during the 
                        second plan year following the plan year 
                        described in clause (i),
                            ``(iv) at least 9 percent during the third 
                        plan year following the plan year described in 
                        clause (i), and
                            ``(v) at least 10 percent during any 
                        subsequent plan year.
                    ``(D) Matching contributions.--
                            ``(i) In general.--For purposes of this 
                        paragraph, an arrangement shall be treated as 
                        having met the requirements of paragraph 
                        (13)(D)(i) if and only if the employer makes 
                        matching contributions on behalf of each 
                        employee who is not a highly compensated 
                        employee in an amount equal to the sum of--
                                    ``(I) 100 percent of the elective 
                                contributions of the employee to the 
                                extent such contributions do not exceed 
                                2 percent of compensation,
                                    ``(II) 50 percent of so much of 
                                such contributions as exceed 2 percent 
                                but do not exceed 6 percent of 
                                compensation, plus
                                    ``(III) 20 percent of so much of 
                                such contributions as exceed 6 percent 
                                but do not exceed 10 percent of 
                                compensation.
                            ``(ii) Application of rules for matching 
                        contributions.--The rules of clause (ii) of 
                        paragraph (12)(B) and clauses (iii) and (iv) of 
                        paragraph (13)(D) shall apply for purposes of 
                        clause (i), but the rule of clause (iii) of 
                        paragraph (12)(B) shall not apply for such 
                        purposes. The rate of matching contribution for 
                        each incremental deferral must be at least as 
                        high as the rate specified in clause (i), and 
                        may be higher, so long as such rate does not 
                        increase as an employee's rate of elective 
                        contributions increases.''.
    (b) Matching Contributions and Employee Contributions.--Subsection 
(m) of section 401 is amended by redesignating paragraph (13) as 
paragraph (14) and by inserting after paragraph (12) the following new 
paragraph:
            ``(13) Alternative method for secure deferral 
        arrangements.--A defined contribution plan shall be treated as 
        meeting the requirements of paragraph (2) with respect to 
        matching contributions and employee contributions if the plan--
                    ``(A) is a secure deferral arrangement (as defined 
                in subsection (k)(16)),
                    ``(B) meets the requirements of clauses (ii) and 
                (iii) of paragraph (11)(B), and
                    ``(C) provides that matching contributions on 
                behalf of any employee may not be made with respect to 
                an employee's contributions or elective deferrals in 
                excess of 10 percent of the employee's compensation.''.
    (c) Conforming Amendments.--Subparagraph (H) of section 416(g)(4) 
is amended--
            (1) in clause (i), by striking ``section 401(k)(12) or 
        401(k)(13)'' and inserting ``paragraph (12), (13), or (16) of 
        section 401(k)'', and
            (2) in clause (ii), by striking ``section 401(m)(11) or 
        401(m)(12)'' and inserting ``paragraph (11), (12), or (13) of 
        section 401(m)''.
    (d) Effective Date.--The amendments made by this section shall 
apply to plan years beginning after December 31, 2021.

SEC. 102. FACILITATING AUTOMATIC ENROLLMENT.

    The Secretary of the Treasury (or the Secretary's delegate) shall 
promulgate regulations or other guidance which--
            (1) simplifies and clarifies the rules regarding the timing 
        of participant notices required under the Internal Revenue Code 
        of 1986 with respect to an eligible automatic enrollment 
        contribution arrangement (within the meaning of section 
        414(w)(3) of the Internal Revenue Code of 1986) or required 
        under section 336(c)(3) of the Consolidated Appropriations Act, 
        2016 with respect to an automatic contribution arrangement 
        (within the meaning of section 336(c)(2) of such Act), with 
        specific application to--
                    (A) plans which allow employees to be eligible for 
                participation immediately upon beginning employment; 
                and
                    (B) employers with multiple payroll and 
                administrative systems; and
            (2) simplifies and clarifies the application of automatic 
        escalation features under arrangements described in paragraph 
        (1) in the context of employers with multiple payroll and 
        administrative systems.
Such regulations or guidance shall address the particular case of 
employees within the same plan who are subject to different notice 
timing and different percentage requirements, and provide assistance 
for plan sponsors in managing such cases.

SEC. 103. CREDIT FOR EMPLOYERS WITH RESPECT TO MODIFIED SAFE HARBOR 
              REQUIREMENTS.

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

``SEC. 45U. CREDIT FOR SMALL EMPLOYERS WITH RESPECT TO MODIFIED SAFE 
              HARBOR REQUIREMENTS FOR AUTOMATIC CONTRIBUTION 
              ARRANGEMENTS.

    ``(a) General Rule.--For purposes of section 38, in the case of a 
small employer, the safe harbor adoption credit determined under this 
section for any taxable year is the amount equal to the total of the 
employer's matching contributions under section 401(k)(16)(D) during 
the taxable year on behalf of employees who are not highly compensated 
employees.
    ``(b) Limitations.--
            ``(1) Limitation with respect to compensation.--The credit 
        determined under subsection (a) with respect to contributions 
        made on behalf of any employee shall not exceed 2 percent of 
        the compensation of such employee for the taxable year.
            ``(2) Limitation with respect to years of participation.--
        Credit shall be determined under subsection (a) with respect to 
        contributions made on behalf of any employee only during the 
        first 5 years such employee participates in the qualified 
        automatic contribution arrangement.
    ``(c) Definitions.--
            ``(1) In general.--Any term used in this section which is 
        also used in section 401(k)(16) shall have the same meaning as 
        when used in such section.
            ``(2) Small employer.--The term `small employer' means an 
        eligible employer (as defined in section 408(p)(2)(C)(i)).
    ``(d) Denial of Double Benefit.--No deduction shall be allowable 
under this title for any contribution with respect to which a credit is 
allowed under this section.''.
    (b) Credit To Be Part of General Business Credit.--Subsection (b) 
of section 38 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) the safe harbor adoption credit determined under 
        section 45U.''.
    (c) Conforming Amendment.--Paragraph (2) of section 3511(d) is 
amended--
            (1) by redesignating subparagraphs (F), (G), and (H) as 
        subparagraphs (G), (H), and (I), respectively, and
            (2) by inserting after subparagraph (E) the following new 
        subparagraph:
                    ``(F) section 45U (safe harbor adoption credit),''.
    (d) Clerical Amendment.--The table of sections for subpart D of 
part IV of subchapter A of chapter 1 is amended by adding after the 
item relating to section 45T the following new item:

``Sec. 45U. Credit for small employers with respect to modified safe 
                            harbor requirements for automatic 
                            contribution arrangements.''.
    (e) Effective Date.--The amendments made by this section shall 
apply to taxable years which include any portion of a plan year 
beginning after December 31, 2021.

SEC. 104. EXPANSION OF SAVER'S CREDIT.

    (a) Expansion.--Paragraph (1) of section 25B(b) is amended by 
striking ``$32,500'' both places it appears in subparagraphs (B) and 
(C) of paragraph (1) and inserting ``$40,000''.
    (b) Testing Period.--Subparagraph (B) of section 25B(d)(2) is 
amended to read as follows:
                    ``(B) Testing period.--For purposes of subparagraph 
                (A), the testing period, with respect to a taxable 
                year, is the period which includes--
                            ``(i) such taxable year, and
                            ``(ii) the 3 preceding taxable years.''.
    (c) Treatment as Refundable.--
            (1) Credit moved to subpart relating to refundable 
        credits.--
                    (A) In general.--The Internal Revenue Code of 1986 
                is amended--
                            (i) by redesignating section 25B, as 
                        amended by this Act, as section 36C; and
                            (ii) by moving such section, as so 
                        redesignated, from subpart A of part IV of 
                        subchapter A of chapter 1 to the location 
                        immediately before section 37 in subpart C of 
                        part IV of subchapter A of chapter 1.
                    (B) Technical amendments.--
                            (i) The table of sections for subpart A of 
                        part IV of subchapter A of chapter 1 is amended 
                        by striking the item relating to section 25B.
                            (ii) The table of sections for subpart C of 
                        part IV of subchapter A of chapter 1 is amended 
                        by inserting after the item relating to section 
                        36B the following new item:

``Sec. 36C. Elective deferrals and IRA contributions by certain 
                            individuals.''.
            (2) Mandatory deposit into qualified account.--
                    (A) No reduction of tax.--Subsection (a) of section 
                36C, as moved and redesignated by paragraph (1), is 
                amended by striking ``against the tax imposed by this 
                subtitle''.
                    (B) Deposit into qualified account.--Section 36C, 
                as so moved and redesignated, is amended by adding at 
                the end the following new subsection:
    ``(g) Deposit Into Qualified Account.--
            ``(1) In general.--Any amount allowed as a credit under 
        subsection (a) shall not be allowed as a credit against any tax 
        imposed by this subtitle but instead shall be treated as an 
        overpayment under section 6401(b) and--
                    ``(A) shall be paid on behalf of the individual 
                taxpayer to a Roth IRA or a designated Roth account 
                (within the meaning of section 402A) under an 
                applicable retirement plan designated by the individual 
                to be invested in a manner designated by the 
                individual, except that in the case of a joint return 
                each spouse shall be entitled to designate an 
                applicable retirement plan and investments with respect 
                to payments attributable to such spouse, or
                    ``(B) in the case of a taxpayer who does not 
                properly designate an applicable retirement plan in a 
                timely manner or who designates an applicable 
                retirement plan which does not accept such amount in a 
                timely manner, shall be paid or credited on behalf of 
                the individual taxpayer in a manner determined under 
                rules prescribed by the Secretary which provides 
                treatment comparable to the treatment under 
                subparagraph (A) and which--
                            ``(i) is designed to maintain fees and 
                        other charges at an appropriately low level 
                        taking into account the size of the account 
                        balance, and
                            ``(ii) utilizes, to the extent appropriate, 
                        private sector services.
            ``(2) Applicable retirement plan.--For purposes of this 
        subsection, the term `applicable retirement plan' means a plan 
        which elects to accept deposits under this subsection and which 
        is described in clause (iii), (iv), (v), or (vi) of section 
        402(c)(8)(B) or in section 408A(b).
            ``(3) Treatment of payments.--In the case of any payment 
        under this subsection--
                    ``(A) except as otherwise provided in this section 
                or by the Secretary under regulations, such payment 
                shall be treated in the same manner as a payment made 
                by the individual on whose behalf such payment was 
                made,
                    ``(B) such payment shall not be treated as income 
                to the taxpayer, and
                    ``(C) such payment shall not be taken into account 
                with respect to any applicable limitation under section 
                402(g)(1), 403(b), 408(a)(1), 408(b)(2)(B), 408A(c)(2), 
                414(v)(2), 415(c), or 457(b)(2).
            ``(4) Treatment of qualified plans, etc.--A plan or 
        arrangement to which a payment is made under this subsection 
        shall not be treated as violating any requirement under section 
        401, 403, 408, or 457 solely by reason of accepting such 
        payment.
            ``(5) Erroneous credits.--If any payment is erroneously 
        paid under this subsection, the amount of such erroneous 
        payment shall be treated as an underpayment of tax.''.
    (d) Regulation and Promotion.--The Secretary of the Treasury (or 
the Secretary's delegate) shall take such steps as the Secretary (or 
delegate) determines are necessary and appropriate to increase public 
awareness of the credit provided under section 36C of the Internal 
Revenue Code of 1986 (as amended and redesignated by this section).
    (e) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2021.

SEC. 105. MODIFICATION OF PARTICIPATION REQUIREMENTS FOR LONG-TERM, 
              PART-TIME WORKERS.

    (a) Participation Requirement.--Clause (ii) of section 401(k)(2)(D) 
is amended by striking ``3 consecutive'' and inserting ``2 
consecutive''.
    (b) Special Rules.--Subclause (II) of section 401(k)(15)(B)(i) is 
amended by striking ``subsection (a)(4), paragraphs (3), (12), and 
(13)'' and inserting ``paragraphs (3), (12), (13), and (16), subsection 
(a)(4)''.
    (c) Effective Date.--The amendments made by this section 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. 106. SEPARATE APPLICATION OF TOP HEAVY RULES TO DEFINED 
              CONTRIBUTION PLANS COVERING EXCLUDIBLE EMPLOYEES.

    (a) In General.--Paragraph (2) of section 416(c) is amended by 
adding at the end the following new subparagraph:
                    ``(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 paragraphs (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. 107. 60-DAY ROLLOVER TO INHERITED INDIVIDUAL RETIREMENT PLAN OF 
              NONSPOUSE BENEFICIARY.

    (a) In General.--Section 402(c)(11) is amended by redesignating 
subparagraph (B) as subparagraph (C) and by striking subparagraph (A) 
and inserting the following:
                    ``(A) In general.--If--
                            ``(i) any portion of a distribution 
                        attributable to an employee is paid after the 
                        death of the employee to an individual who is a 
                        designated beneficiary (as defined by section 
                        401(a)(9)(E)) of the employee and who is not 
                        the surviving spouse of the employee, and
                            ``(ii) such portion is transferred or paid 
                        to an individual retirement plan in a transfer 
                        or payment meeting the requirements of 
                        subparagraph (B),
                the preceding provisions of this subsection shall apply 
                to such distribution in the same manner as if the 
                designated beneficiary were the employee.
                    ``(B) Requirements for transfer of distribution.--
                The requirements of this subparagraph are met with 
                respect to the portion of any distribution if--
                            ``(i) such portion is transferred or paid 
                        to an individual retirement plan described in 
                        clause (i) or (ii) of paragraph (8)(B) 
                        established for the purposes of receiving the 
                        distribution on behalf of the designated 
                        beneficiary,
                            ``(ii) such individual retirement plan is 
                        established as an inherited individual 
                        retirement account or individual retirement 
                        annuity (within the meaning of section 
                        408(d)(3)(C)), whichever is applicable, and
                            ``(iii) notice is provided to the trustee, 
                        insurance company, or other provider of the 
                        individual retirement plan that such individual 
                        retirement plan is being established as an 
                        inherited individual retirement account or 
                        individual retirement annuity.
                Section 401(a)(9)(B) (other than clause (iv) thereof) 
                shall apply to such individual retirement plan.''.
    (b) Rollover Treatment for Inherited Accounts.--Section 
408(d)(3)(C) is amended by adding at the end the following:
                            ``(iii) Exception for qualified transfers 
                        to another inherited account.--Clause (i) shall 
                        not apply to any portion of a distribution from 
                        an inherited individual retirement account or 
                        inherited individual retirement annuity if such 
                        portion is paid to another such individual 
                        retirement plan or annuity, but only if the 
                        requirements of subparagraphs (A), (B), and (E) 
                        of this paragraph and the requirements of 
                        section 402(c)(11)(B) are met with respect to 
                        such transfer or payment.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to distributions made after December 31, 2021.

SEC. 108. INCREASE IN AGE FOR REQUIRED BEGINNING DATE FOR MANDATORY 
              DISTRIBUTIONS.

    (a) Increase in Age for Required Beginning Date.--
            (1) In general.--Subclause (I) of section 401(a)(9)(C)(i) 
        is amended to read as follows:
                                    ``(I) the first calendar year in 
                                which the employee attains the 
                                applicable age for such calendar year, 
                                or''.
            (2) Special rule for owners.--Subclause (I) of section 
        401(a)(9)(C)(ii) is amended by striking ``in which the employee 
        attains age 72'' and inserting ``described in clause (i)(I) 
        with respect to the employee''.
    (b) Mandatory Distribution Age.--Paragraph (9) of section 401(a) is 
amended by inserting at the end the following new subparagraph:
                    ``(J) Applicable age.--For purposes of this 
                paragraph--
                            ``(i) In general.--The applicable age is--
                                    ``(I) for calendar years before 
                                2032, age 72, and
                                    ``(II) for calendar years after 
                                2031, age 75.
                            ``(ii) Transition rule.--If, as of a 
                        calendar year, an employee has not attained the 
                        applicable age with respect to such year, such 
                        employee shall be treated as not having 
                        attained the applicable age under this 
                        paragraph for such year without regard to 
                        whether, in a previous calendar year, the 
                        employee had attained the applicable age with 
                        respect to such previous calendar year.''.
    (c) Spouse Beneficiaries.--Subclause (I) of section 
401(a)(9)(B)(iv) is amended by striking ``age 72'' and inserting ``the 
applicable age''.
    (d) Conforming Amendment.--Subsection (b) of section 408 is amended 
by striking ``age 72'' and inserting ``the applicable age determined 
under section 401(a)(9)(J) with respect to such individual''.
    (e) Effective Date.--The amendments made by this section shall 
apply to calendar years beginning after December 31, 2021.

SEC. 109. INCREASE IN CREDIT LIMITATION FOR SMALL EMPLOYER PENSION PLAN 
              STARTUP COSTS OF CERTAIN EMPLOYERS.

    (a) In General.--Subsection (a) of section 45E is amended by 
inserting before the period at the end the following: ``(75 percent of 
such costs in the case of an eligible employer, as determined by 
substituting `25' for `100' in section 408(p)(2)(C)(i))''.
    (b) Conforming Amendment.--Paragraph (2) of section 3511(d), as 
amended by this Act, is further amended--
            (1) by redesignating subparagraphs (E), (F), (G), (H), and 
        (I) as subparagraphs (F), (G), (H), (I), and (J), respectively, 
        and
            (2) by inserting after subparagraph (D) the following new 
        subparagraph:
                    ``(E) section 45E (small employer pension plan 
                startup cost credit),''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2021.

SEC. 110. CREDIT FOR RE-ENROLLMENT.

    (a) In General.--Subpart D of part IV of subchapter A of chapter 1, 
as amended by this Act, is further amended by adding at the end the 
following new section:

``SEC. 45V. CREDIT FOR RE-ENROLLMENT PROVISIONS IN PLANS PROVIDED BY 
              SMALL EMPLOYERS.

    ``(a) In General.--For purposes of section 38, in the case of an 
eligible employer, the retirement re-enrollment credit determined under 
this section for any taxable year is an amount equal to--
            ``(1) $500 for any taxable year occurring during the credit 
        period, and
            ``(2) zero for any other taxable year.
    ``(b) Credit Period.--For purposes of subsection (a)--
            ``(1) In general.--The credit period with respect to any 
        eligible employer is the 3-taxable-year period beginning with 
        the first taxable year for which the employer includes a re-
        enrollment provision in an eligible automatic contribution 
        arrangement (as defined in section 414(w)(3)) in a qualified 
        employer plan (as defined in section 4972(d)) maintained by the 
        employer.
            ``(2) Maintenance of arrangement.--No taxable year with 
        respect to an employer shall be treated as occurring within the 
        credit period unless the provision described in paragraph (1) 
        is included in the plan for such year.
    ``(c) Eligible Employer.--For purposes of this section, the term 
`eligible employer' has the meaning given such term in section 
408(p)(2)(C)(i).
    ``(d) Re-Enrollment Provision.--For purposes of this section, the 
term `re-enrollment provision' means a provision of an eligible 
automatic contribution arrangement under which--
            ``(1) In general.--Each employee eligible to participate in 
        the arrangement who is not contributing or is contributing less 
        than the percentage applicable to an eligible employee in the 
        first year of eligibility is treated as being in such first 
        year of eligibility in each applicable year with respect to the 
        employee.
            ``(2) Election out.--The election treated as having been 
        made under paragraph (1) shall cease to apply with respect to 
        any employee if such employee makes an affirmative election--
                    ``(A) to not have such contributions made, or
                    ``(B) to make elective contributions at a level 
                specified in such affirmative election.
            ``(3) Applicable year every third year.--
                    ``(A) In general.--For purposes of this section, 
                the term `applicable year' means, with respect to an 
                employee, such employee's first plan year of 
                eligibility under the arrangement, and all subsequent 
                plan years of eligibility.
                    ``(B) Exception.--Following any applicable year of 
                an employee (determined after the application of this 
                subparagraph), the plan may elect to treat the next 1 
                or 2 plan years as not being applicable years with 
                respect to such employee.''.
    (b) Credit To Be Part of General Business Credit.--Subsection (b) 
of section 38, as amended by this Act, is further amended by striking 
``plus'' at the end of paragraph (33), by striking the period at the 
end of paragraph (34) and inserting ``, plus'', and by adding at the 
end the following new paragraph:
            ``(35) in the case of an eligible employer (as defined in 
        section 45V(c)), the retirement re-enrollment credit determined 
        under section 45V(a).''.
    (c) Conforming Amendment.--Paragraph (2) of section 3511(d), as 
amended by this Act, is further amended--
            (1) by redesignating subparagraphs (H), (I), and (J) as 
        subparagraphs (I), (J), and (K), respectively, and
            (2) by inserting after subparagraph (G) the following new 
        subparagraph:
                    ``(H) section 45U (retirement re-enrollment 
                credit),''.
    (d) Clerical Amendment.--The table of sections for subpart D of 
part IV of subchapter A of chapter 1 is amended by inserting after the 
item relating to section 45U the following new item:

``Sec. 45V. Credit for re-enrollment provisions in plans provided by 
                            small employers.''.
    (e) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2021.

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

    (a) In General.--Subparagraph (A) of section 401(m)(4) 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.--Paragraph (4) of section 
401(m) 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 in 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.--
Subsection (m) of section 401, as amended by this Act, is further 
amended by redesignating paragraph (14) as paragraph (15), and by 
inserting after paragraph (13) the following new paragraph:
            ``(14) 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), (12), or (13) of this 
                        subsection, or paragraph (11)(B)(i)(II), 
                        (12)(B), (13)(D), or (15)(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.--Paragraph (2) of section 408(p) 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 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.--Subparagraph (A) of section 403(b)(12) 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)(14) 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.--Subsection (b) of section 457 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), provides for 
matching contributions on account of qualified student loan payments as 
described in section 401(m)(14).''.
    (g) Regulatory Authority.--The Secretary of the Treasury (or such 
Secretary's delegate) 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 years beginning after December 31, 
2021.

SEC. 112. TREATMENT OF QUALIFIED RETIREMENT PLANNING SERVICES.

    (a) In General.--Subsection (m) of section 132 is amended by adding 
at the end the following new paragraph:
            ``(4) No constructive receipt.--No amount shall be included 
        in the gross income of any employee solely because the employee 
        may choose between any qualified retirement planning services 
        and compensation which would otherwise be includible in the 
        gross income of such employee. The preceding sentence shall 
        apply to highly compensated employees only if the choice 
        described in such sentence is available on substantially the 
        same terms to each member of the group of employees normally 
        provided education and information regarding the employer's 
        qualified employer plan.''.
    (b) Definition.--Paragraph (1) of section 132(m) is amended by 
inserting before the period the following: ``, including--
                    ``(A) advice regarding investments in any 
                arrangement described in section 219(g)(5) (without 
                regard to the last sentence thereof), and
                    ``(B) retirement advice regarding investments held 
                outside such an arrangement.''.
    (c) Conforming Amendments.--
            (1) Section 403(b)(3)(B) is amended by inserting 
        ``132(m)(4),'' after ``132(f)(4),''.
            (2) Section 414(s)(2) is amended by inserting 
        ``132(m)(4),'' after ``132(f)(4),''.
            (3) Section 415(c)(3)(D)(ii) is amended by inserting 
        ``132(m)(4),'' after ``132(f)(4),''.
    (d) Effective Date.--The amendment made by this section shall apply 
to taxable years beginning after December 31, 2021.

SEC. 113. ALLOW ADDITIONAL NONELECTIVE CONTRIBUTIONS TO SIMPLE PLANS.

    (a) In General.--
            (1) Modification to definition.--Subparagraph (A) of 
        section 408(p)(2) is amended by striking ``and'' at the end of 
        clause (iii), by redesignating clause (iv) as clause (v), and 
        by inserting after clause (iii) the following new clause:
                            ``(iv) the employer may make nonelective 
                        contributions of a uniform percentage (up to 10 
                        percent) of compensation for each employee who 
                        is eligible to participate in the arrangement 
                        and who has at least $5,000 of compensation 
                        from the employer for the year, and''.
            (2) Limitation.--Subparagraph (A) of section 408(p)(2) is 
        amended by adding at the end the following: ``The compensation 
        taken into account under clause (iv) for any year shall not 
        exceed the limitation in effect for such year under section 
        401(a)(17).''.
            (3) Overall dollar limit on contributions.--Paragraph (8) 
        of section 408(p) is amended to read as follows:
            ``(8) Coordination with maximum limitation under subsection 
        (a).--In the case of any simple retirement account, subsections 
        (a)(1) and (b)(2) shall be applied by substituting for `the 
        dollar amount in effect under section 219(b)(1)(A)' the 
        following: `the sum (but not to exceed 50 percent of the amount 
        in effect under section 415(c)(1)(A) (except as provided in 
        section 414(v))) of the dollar amount in effect under paragraph 
        (2)(A)(ii) of this subsection; the employer contribution 
        required under paragraph (2)(A)(iii) or (2)(B)(i) of this 
        subsection, whichever is applicable; and the employer 
        contribution made on behalf of the employee under paragraph 
        (2)(A)(iv) of this subsection'.''.
    (b) Conforming Amendments.--
            (1) Section 408(p)(2)(A)(v), as redesignated by subsection 
        (a), is amended by striking ``or (iii)'' and inserting ``, 
        (iii), or (iv)''.
            (2) Paragraph (8) of section 408(p) is amended by inserting 
        ``, the employer contribution actually made under paragraph 
        (2)(A)(iv) of this subsection,'' after ``paragraph (2)(A)(ii) 
        of this subsection''.
            (3) Section 401(k)(11)(B)(i) is amended by striking ``and'' 
        at the end of subclause (II), by redesignating subclause (III) 
        as subclause (V), and by inserting after subclause (II) the 
        following new subclauses:
                                    ``(III) the employer may make 
                                nonelective contributions of a uniform 
                                percentage (up to 10 percent) of 
                                compensation for each employee who is 
                                eligible to participate in the 
                                arrangement and who has at least $5,000 
                                of compensation from the employer for 
                                the year,
                                    ``(IV) contributions on behalf of 
                                any employee for any year may not 
                                exceed 50 percent of the amount in 
                                effect under section 415(c)(1)(A) 
                                (except as provided in section 414(v)), 
                                and''.
            (4) Section 401(k)(11)(B)(i)(V), as redesignated by 
        paragraph (3), is amended by striking ``or (II)'' and inserting 
        ``, (II), or (III)''.
    (c) Effective Date.--The amendments made by this section shall 
apply to years beginning after December 31, 2021.

SEC. 114. REFORM OF THE MINIMUM PARTICIPATION RULE.

    (a) In General.--Subparagraph (H) of section 401(a)(26) is amended 
by adding at the end the following: ``Not later than December 31, 2022, 
the Secretary shall issue final regulations under which this paragraph 
may be applied separately to bona fide separate subsidiaries or 
divisions.''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
take effect on the date of enactment of this Act.

SEC. 115. EXPANSION OF EMPLOYEE PLANS COMPLIANCE RESOLUTION SYSTEM.

    (a) In General.--Except as otherwise provided in regulations 
prescribed by the Secretary of the Treasury or the Secretary's delegate 
(referred to in this section as the ``Secretary''), any inadvertent 
failure to comply with the rules applicable under section 401(a), 
403(a), 403(b), 408(p), or 408(k) of the Internal Revenue Code of 1986 
may be self-corrected under the Employee Plans Compliance Resolution 
System (as described in Revenue Procedure 2019-19 or any successor 
guidance), 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 2019-19 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 provision) for an inadvertent failure 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 Error.--The Secretary of Labor shall treat any loan error 
corrected pursuant to subsection (a) as meeting the requirements of the 
Voluntary Fiduciary Correction Program of the Department of Labor.
    (c) EPCRS for IRAs.--The Secretary shall expand the Employee Plans 
Compliance Resolution System to allow custodians of individual 
retirement plans to address inadvertent failures for which the owner of 
an individual retirement plan was not at fault, 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 Employee 
        Plans Compliance Resolution System, 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) Required Minimum Distribution Corrections.--The Secretary shall 
expand the Employee Plans Compliance Resolution System to allow plans 
to which such system applies and custodians and owners of individual 
retirement plans to self-correct, without an excise tax, any 
inadvertent failures pursuant to which a distribution is made no more 
than 180 days after it was required to be made.
    (e) Additional Safe Harbors.--The Secretary shall expand the 
Employee Plans Compliance Resolution System (as described in Revenue 
Procedure 2019-19 or any successor guidance) to provide additional safe 
harbor means of correcting 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 inadvertent failure.
    (f) Definitions and Special Rules.--
            (1) Inadvertent failure.--For purposes of this section--
                    (A) In general.--Except as provided in subparagraph 
                (B), the term ``inadvertent failure'' means a failure 
                that occurs despite the existence of practices and 
                procedures which--
                            (i) satisfy the standards set forth in 
                        section 4.04 of Revenue Procedure 2019-19 (or 
                        any successor provision); or
                            (ii) satisfy similar standards in the case 
                        of an individual retirement plan.
                    (B) Correction by owner of individual retirement 
                plan.--In the case of a correction by an owner of an 
                individual retirement plan under subsection (d), the 
                term ``inadvertent failure'' means a failure due to 
                reasonable cause.
            (2) Plan loan corrections.--In the case of an inadvertent 
        failure relating to a loan to a participant from a plan, such 
        failure may be self-corrected under subsection (a) according to 
        the rules of section 6.07 of Revenue Procedure 2019-19 (or any 
        successor provision), including the provisions related to 
        whether a deemed distribution must be reported on Form 1099-R.

SEC. 116. ENHANCEMENT OF 403(B) PLANS.

    (a) In General.--
            (1) Permitted investments.--Subparagraph (A) of section 
        403(b)(7) is amended by striking ``the amounts are to be 
        invested in regulated investment company stock to be held in 
        that custodial account'' and inserting ``the amounts to be held 
        in that custodial account are 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)''.
            (2) Conforming amendment.--The heading of paragraph (7) of 
        section 403(b) is amended by striking ``for regulated 
        investment company stock''.
            (3) Effective date.--The amendments made by this subsection 
        shall apply to amounts invested after December 31, 2021.
    (b) Amendments to the Investment Company Act of 1940.--Section 
3(c)(11) of the Investment Company Act of 1940 (15 U.S.C. 80a-3(c)(11)) 
is amended to read as follows:
            ``(11) Any--
                    ``(A) employee's stock bonus, pension, or profit-
                sharing trust which meets the requirements for 
                qualification under section 401 of the Internal Revenue 
                Code of 1986;
                    ``(B) custodial account meeting the requirements of 
                section 403(b)(7) of such Code;
                    ``(C) governmental plan described in section 
                3(a)(2)(C) of the Securities Act of 1933 (15 U.S.C. 
                77c(a)(2)(C));
                    ``(D) collective trust fund maintained by a bank 
                consisting solely of assets of one or more of such 
                trusts, government plans, or church plans, companies or 
                accounts that are excluded from the definition of an 
                investment company under paragraph (14) of this 
                subsection;
                    ``(E) plan which meets the requirements of section 
                403(b) of the Internal Revenue Code of 1986 if--
                            ``(i) such plan is subject to title I of 
                        the Employee Retirement Income Security Act of 
                        1974 (29 U.S.C. 1001 et seq.);
                            ``(ii) any employer making such plan 
                        available agrees to serve as a fiduciary for 
                        the plan with respect to the selection of the 
                        plan's investments among which participants can 
                        choose; or
                            ``(iii) such plan is a governmental plan 
                        (as defined in section 414(d) of such Code); or
                    ``(F) separate account the assets of which are 
                derived solely from--
                            ``(i) contributions under pension or 
                        profit-sharing plans which meet the 
                        requirements of section 401 of the Internal 
                        Revenue Code of 1986 or the requirements for 
                        deduction of the employer's contribution under 
                        section 404(a)(2) of such Code;
                            ``(ii) contributions under governmental 
                        plans in connection with which interests, 
                        participations, or securities are exempted from 
                        the registration provisions of section 5 of the 
                        Securities Act of 1933 (15 U.S.C. 77e) by 
                        section 3(a)(2)(C) of such Act (15 U.S.C. 
                        77c(a)(2)(C));
                            ``(iii) advances made by an insurance 
                        company in connection with the operation of 
                        such separate account; and
                            ``(iv) contributions to a plan described in 
                        subparagraph (E).''.
    (c) Amendments to the Securities Act of 1933.--Section 3(a)(2) of 
the Securities Act of 1933 (15 U.S.C. 77c(a)(2)) is amended--
            (1) by striking ``beneficiaries, or (D)'' and inserting 
        ``beneficiaries, (D) a plan which meets the requirements of 
        section 403(b) of such Code if (i) such plan is subject to 
        title I of the Employee Retirement Income Security Act of 1974 
        (29 U.S.C. 1001 et seq.), (ii) any employer making such plan 
        available agrees to serve as a fiduciary for the plan with 
        respect to the selection of the plan's investments among which 
        participants can choose, or (iii) such plan is a governmental 
        plan (as defined in section 414(d) of such Code), or (E)'';
            (2) by striking ``(C), or (D)'' and inserting ``(C), (D), 
        or (E)''; and
            (3) by striking ``(iii) which is a plan funded'' and 
        inserting ``(iii) in the case of a plan not described in 
        subparagraph (D), which is a plan funded''.
    (d) Amendments to the Securities Exchange Act of 1934.--Section 
3(a)(12)(C) of the Securities Exchange Act of 1934 (15 U.S.C. 
78c(a)(12)(C)) is amended--
            (1) by striking ``or (iv)'' and inserting ``(iv) a plan 
        which meets the requirements of section 403(b) of such Code if 
        (I) such plan is subject to title I of the Employee Retirement 
        Income Security Act of 1974 (29 U.S.C. 1001 et seq.), (II) any 
        employer making such plan available agrees to serve as a 
        fiduciary for the plan with respect to the selection of the 
        plan's investments among which participants can choose, or 
        (III) such plan is a governmental plan (as defined in section 
        414(d) of such Code), or (v)'';
            (2) by striking ``(ii), or (iii)'' and inserting ``(ii), 
        (iii), or (iv)''; and
            (3) by striking ``(II) is a plan funded'' and inserting 
        ``(II) in the case of a plan not described in clause (iv), is a 
        plan funded''.

SEC. 117. ELIGIBILITY FOR PARTICIPATION IN RETIREMENT PLANS.

    An individual shall not be precluded from participating in an 
eligible deferred compensation plan by reason of having received a 
distribution under section 457(e)(9) of the Internal Revenue Code of 
1986, as in effect prior to the enactment of the Small Business Job 
Protection Act of 1996.

SEC. 118. SMALL IMMEDIATE FINANCIAL INCENTIVES FOR CONTRIBUTING TO A 
              PLAN.

    (a) In General.--Subparagraph (A) of section 401(k)(4) 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), 
as amended by this Act, is further amended by adding at the end the 
following: ``A plan shall not fail to satisfy clause (ii) solely by 
reason of the offering of a de minimis financial incentive for 
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 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) or 403(b)(12)(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 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. 119. INDEXING IRA CATCH-UP LIMIT.

    (a) In General.--Subparagraph (C) of section 219(b)(5) 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 2022, 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 2021' for 
                                `calendar year 2016' in subparagraph 
                                (A)(ii) thereof.
                        If any amount after adjustment under the 
                        preceding sentence is not a multiple of $200, 
                        such amount shall be rounded to the next lower 
                        multiple of $200.''.
    (b) Effective Date.--The amendments made by this section shall 
apply to years beginning after December 31, 2022.

SEC. 120. HIGHER CATCH-UP LIMIT TO APPLY AT AGE 60.

    (a) In General.--
            (1) Plans other than simple plans.--Section 414(v)(2)(B)(i) 
        is amended by inserting the following before the period: 
        ``($10,000, in the case of an eligible participant who has 
        attained age 60 before the close of the taxable year)''.
            (2) Simple plans.--Section 414(v)(2)(B)(ii) is amended by 
        inserting the following before the period: ``($5,000, in the 
        case of an eligible participant who has attained age 60 before 
        the close of the taxable year)''.
    (b) Cost-of-Living Adjustments.--Subparagraph (C) of section 
414(v)(2) is amended by adding at the end the following: ``In the case 
of a year beginning after December 31, 2022, 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, 2021.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to years beginning after December 31, 2021.

SEC. 121. 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) is amended by striking 
``domestic C corporation'' and inserting ``domestic corporation''.
    (b) Effective Date.--The amendment made by this section shall apply 
to sales after the date of the enactment of this Act.

SEC. 122. CREDIT FOR SMALL EMPLOYERS PROVIDING RETIREMENT PLANS FOR 
              MILITARY SPOUSES.

    (a) In General.--Subpart D of part IV of subchapter A of chapter 1, 
as amended by this Act, is further amended by adding at the end the 
following new section:

``SEC. 45W. SMALL EMPLOYER PROVISION OF RETIREMENT SAVINGS FOR MILITARY 
              SPOUSES.

    ``(a) In General.--For purposes of section 38, in the case of a 
covered small employer, the military spouse employee retirement plan 
credit determined under this section for the taxable year is an amount 
equal to the sum of--
            ``(1) $200 for each eligible military spouse employee who 
        is eligible to participate in an eligible employer plan during 
        the plan year ending with or within such taxable year, plus
            ``(2) with respect to each eligible military spouse 
        employee participating in such plan, the lesser of--
                    ``(A) the amount of employer contributions (other 
                than any contribution described in subparagraph (B) or 
                (C) of section 25B(d)(1) made under all eligible 
                employer plans on behalf of such eligible military 
                spouse during the plan year ending with or within such 
                taxable year, or
                    ``(B) $300.
        In the case of a defined benefit plan, the amount treated as an 
        employer contribution under paragraph (2)(A) shall be the 
        increase in the participant's nonforfeitable accrued benefit 
        (determined by using the rules of section 417(e)(3)) reduced by 
        the amount of such increase attributable to employee 
        contributions.
    ``(b) Eligible Employer Plan.--For purposes of this section, the 
term `eligible employer plan' means a qualified employer plan (within 
the meaning of section 4972(d)) in which all eligible military spouse 
employees of the covered small employer--
            ``(1) are eligible to participate as of the later of the 
        first day of the first plan year of the plan or the date the 
        employee has been employed for at least 2 months,
            ``(2) are eligible to receive matching contributions (as 
        defined in section 401(m)) and nonelective contributions in the 
        same manner as an employee (other than a highly compensated 
        employee) with at least 2 years of service, and
            ``(3) are fully vested in their accrued benefit under the 
        plan upon commencement of participation.
    ``(c) Covered Small Employer.--For purposes of this section, the 
term `covered small employer' means an eligible employer (within the 
meaning of section 408(p)(2)(C)(i)).
    ``(d) Eligible Military Spouse Employee.--
            ``(1) In general.--The term `eligible military spouse 
        employee' means any employee of the covered small employer 
        who--
                    ``(A) has been employed by the employer for more 
                than 2 months,
                    ``(B) is not a highly compensated employee (within 
                the meaning of section 414(q)), and
                    ``(C) makes a certification to the small employer 
                that, as of the date such employee is hired by the 
                employer, such employee is married to an individual who 
                has performed service in the uniformed services (as 
                defined in chapter 43 of title 38, United States Code) 
                while on active duty for a period of more than 30 days 
                (including the date such employee is hired).
        Any certification under subparagraph (C) shall include the 
        servicemember's name, rank, and military branch and the 
        employee's uniformed services identification card number.
            ``(2) Limitation.--An individual may not be treated as an 
        eligible military spouse with respect to any covered small 
        employer for more than 3 taxable years.''.
    (b) Credit To Be Part of General Business Credit.--Section 38(b), 
as amended by this Act, is further amended by striking ``plus'' at the 
end of paragraph (34), by striking the period at the end of paragraph 
(35) and inserting ``, plus'', and by adding at the end the following 
new paragraph:
            ``(36) the military spouse employee retirement plan credit 
        determined under section 45W(a).''.
    (c) Clerical Amendment.--The table of sections for subpart D of 
part IV of subchapter A of chapter 1, as amended by this Act, is 
further amended by adding at the end the following new item:

``Sec. 45W. Small employer provision of retirement savings for military 
                            spouses.''.
    (d) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after the date of the enactment of 
this Act.

                    TITLE II--PRESERVATION OF INCOME

SEC. 201. 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) 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 (or 
        delegate) shall amend Q&A-17(b)(3) of Treas. Reg. section 
        1.401(a)(9)-6 and Q&A-12(b)(3) of Treas. Reg. section 1.408-8 
        to eliminate the requirement that premiums for qualifying 
        longevity annuity contracts be limited to 25 percent 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) Increase dollar limitation.--
                    (A) In general.--The Secretary (or delegate) shall 
                amend Q&A-17(b)(2)(i) of Treas. Reg. section 
                1.401(a)(9)-6 and Q&A-12(b)(2)(i) of Treas. Reg. 
                section 1.408-8 to increase the dollar limitation on 
                premiums for qualifying longevity annuity contracts 
                from $125,000 to $200,000, and to make such 
                corresponding changes to the regulations and related 
                forms as are necessary to reflect this increase in the 
                dollar limitation.
                    (B) Adjustments for inflation.--The Secretary (or 
                delegate) shall amend Q&A-17(d)(2)(i) of Treas. Reg. 
                section 1.401(a)(9)-6 to provide that, in the case of 
                calendar years beginning on or after January 1 of the 
                second year following the year of enactment of this 
                Act, the $200,000 dollar limitation (as increased by 
                subparagraph (A)) will be adjusted at the same time and 
                in the same manner as the limits are adjusted under 
                section 415(d) of the Internal Revenue Code of 1986, 
                except that the base period shall be the calendar 
                quarter beginning July 1 of the year of enactment of 
                this Act, and any increase to such dollar limitation 
                which is not a multiple of $10,000 will be rounded to 
                the next lowest multiple of $10,000.
            (3) Facilitate joint and survivor benefits.--The Secretary 
        (or delegate) shall amend Q&A-17(c) of Treas. Reg. 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 any divorce or 
        separation instrument (within the meaning of section 71(b)(2) 
        of the Internal Revenue Code of 1986)--
                    (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.
            (4) Permit short free look period.--The Secretary (or 
        delegate) shall amend Q&A-17(a)(4) of Treas. Reg. 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.
            (5) Facilitate indexed and variable contracts with 
        guaranteed benefits.--The Secretary (or delegate) shall amend 
        Q&A-17(d)(4) of Treas. Reg. section 1.401(a)(9)-6, and make 
        such corresponding changes to the regulations and related forms 
        as are necessary, to provide that an annuity contract is not 
        treated as a contract described in such Q&A-17(a)(7) to the 
        extent that the contract--
                    (A) either--
                            (i) is a variable contract under section 
                        817(d) of the Internal Revenue Code of 1986; or
                            (ii) is an indexed contract;
                    (B) provides for the possibility of annuity payment 
                increases (but not decreases) based on the investment 
                return and market value of 1 or more segregated asset 
                accounts (in the case of a variable contract) or based 
                on the performance of 1 or more specified indexes (in 
                the case of an indexed contract);
                    (C) provides for a guaranteed minimum level of 
                annuity payments irrespective of such investment 
                return, market value, or performance; and
                    (D) in the event of death before the annuity 
                starting date, provides that any death benefit that is 
                payable in a lump sum is equal to the premiums paid, 
                without reduction for investment return, market value, 
                index performance, surrender charges, market value 
                adjustments, or any other amounts.
        For purposes of the preceding sentence, a downward adjustment 
        to the dollar amount of annuity payments shall not be treated 
        as an impermissible reduction in such payments, provided that 
        the adjustment is made to reflect a change in annuitant that is 
        required or permitted under the Internal Revenue Code of 1986 
        or regulations and the adjustment is based on reasonable 
        actuarial assumptions.
    (b) Effective Dates, Enforcement, and Interpretations.--
            (1) Effective dates.--
                    (A) Paragraphs (1), (2), and (5) 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 (3) and (4) 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 of the Treasury 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).

SEC. 202. REMOVE REQUIRED MINIMUM DISTRIBUTION BARRIERS FOR LIFE 
              ANNUITIES.

    (a) In General.--Paragraph (9) of section 401(a), as amended by 
this Act, is further amended by adding at the end the following new 
subparagraph:
                    ``(K) 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)) which is issued in connection with 
                any eligible retirement plan (within the meaning of 
                section 402(c)(8)(B)) from providing 1 or more of the 
                following types of payments on or after the annuity 
                starting date:
                            ``(i) Annuity payments which increase by a 
                        constant percentage, applied not less 
                        frequently than annually, at a rate which is 
                        less than 5 percent per year.
                            ``(ii) A lump sum payment which--
                                    ``(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 which 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.
                            ``(iv) A final payment upon death which 
                        does not exceed the excess of--
                                    ``(I) the total amount of the 
                                consideration paid for the annuity 
                                payments, over
                                    ``(II) the aggregate amount of 
                                prior distributions or payments from or 
                                under the contract.''.
    (b) Regulations and Enforcement.--
            (1) Regulations.--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) shall amend the 
        regulation issued by the Department of the Treasury relating to 
        ``Required Distributions from Retirement Plans'' (69 Fed. Reg. 
        33288 (June 15, 2004)), and make any necessary corresponding 
        amendments to other regulations, in order to--
                    (A) conform such regulations to the amendments made 
                by subsection (a), including by eliminating the types 
                of payments described in section 401(a)(9)(K) of the 
                Internal Revenue Code of 1986, as added by subsection 
                (a), from the scope of the requirement in Q&A-14(c) of 
                Treas. Reg. section 1.401(a)(9)-6 that the total future 
                expected payments must exceed the total value being 
                annuitized;
                    (B) amend Q&A-14(c) of such section 1.401(a)(9)-6 
                to provide that a commercial annuity which provides an 
                initial payment which is at least equal to the initial 
                payment which would be required from an individual 
                account pursuant to Treas. Reg. section 1.401(a)(9)-5 
                will be deemed to satisfy the requirement in Q&A-14(c) 
                of such section 1.401(a)(9)-6 that the total future 
                expected payments must exceed the total value being 
                annuitized; and
                    (C) amend Q&A-14(e)(3) of Treas. Reg. section 
                1.401(a)(9)-6 to provide that the total future expected 
                payments under a commercial annuity are determined 
                using the tables or other actuarial assumptions which 
                the issuer of the contract actually uses in pricing the 
                premiums and benefits with respect to the contract, 
                provided that such tables or other actuarial 
                assumptions are reasonable.
            (2) Effective date.--The modifications and amendments 
        required under paragraph (1) shall be deemed to have been made 
        as of the date of the enactment of this Act, and as of such 
        date the Secretary of the Treasury (or the Secretary's 
        delegate) shall administer and enforce the law with respect to 
        plan years beginning before, on, or after the date of the 
        enactment of this Act in accordance with the amendments made by 
        subsection (a) and as though the actions which the Secretary is 
        required to take under paragraph (1) had been taken.

SEC. 203. ELIMINATING A PENALTY ON PARTIAL ANNUITIZATION.

    (a) Eliminating a Penalty on Partial Annuitization.--The Secretary 
of the Treasury (or the Secretary's delegate) shall amend the 
regulations under section 401(a)(9) of the Internal Revenue Code of 
1986 to provide that if an employee's benefit is in the form of an 
individual account under a defined contribution plan, the plan may 
allow the employee to elect to have the amount required to be 
distributed from such account under such section for a year to be 
calculated as the excess of the total required amount for such year 
over the annuity amount for such year.
    (b) Definitions.--For purposes of this section--
            (1) Total required amount.--The term ``total required 
        amount'', with respect to a year, means the amount which would 
        be required to be distributed under Treas. Reg. section 
        1.401(a)(9)-5 for the year, determined by treating the account 
        balance as of the last valuation date in the immediately 
        preceding calendar year as including the value on that date of 
        all annuity contracts which were purchased with a portion of 
        the account and from which payments are made in accordance with 
        Treas. Reg. section 1.401(a)(9)-6.
            (2) Annuity amount.--The term ``annuity amount'', with 
        respect to a year, is the total amount distributed in the year 
        from all annuity contracts described in paragraph (1).
    (c) Conforming Regulatory Amendments.--The Secretary of the 
Treasury (or the Secretary's delegate) shall amend the regulations 
under sections 403(b)(10), 408(a)(6), 408(b)(3), and 457(d)(2) of the 
Internal Revenue Code of 1986 to conform to the amendments described in 
subsection (a). Such conforming amendments shall treat all individual 
retirement plans (as defined in section 7701(a)(37) of such Code) which 
an individual holds as the owner, or which an individual holds as a 
beneficiary of the same decedent, as one such plan for purposes of the 
amendments described in subsection (a). Such conforming amendments 
shall also treat all contracts described in section 403(b) of such Code 
which an individual holds as an employee, or which an individual holds 
as a beneficiary of the same decedent, as one such contract for such 
purposes.
    (d) Effective Date.--The modifications and amendments required 
under subsections (a) and (c) shall be deemed to have been made as of 
the date of the enactment of this Act, and as of such date all 
applicable laws shall be applied in all respects as though the actions 
which the Secretary of the Treasury (or the Secretary's delegate) is 
required to take under such subsections had been taken.

SEC. 204. INSURANCE-DEDICATED EXCHANGE-TRADED FUNDS.

    (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) 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 Treas. Reg. section 1.817-5(f)(3) to provide that 
satisfaction of the requirements in Treas. Reg. 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) Confirm That Similarities to Other Funds Are Irrelevant.--The 
Secretary of the Treasury (or the Secretary's delegate) shall amend 
Treas. Reg. section 1.817-5(f) to confirm that, for Federal income tax 
purposes, a regulated investment company, partnership, or trust 
(including an exchange-traded fund) that satisfies the requirements of 
Treas. Reg. section 1.817-5(f) (2) and (3) shall not be treated as 
owned by the holder of a variable contract pursuant to the principles 
of Rev. Rul. 81-225, 1981-2 C.B. 12, merely because another regulated 
investment company, partnership, trust, or similar investment vehicle 
follows the same investment strategy, has the same investment manager, 
or holds the same investments.
    (d) Define Relevant Terms.--In amending Treas. Reg. section 1.817-
5(f)(3) in accordance with subsections (b) and (c) 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 Treas. Reg. 
                section 1.817-5(f) (1) and (3).
            (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 Treas. Reg. section 
        1.817-5(f) (2) and (3).
    (e) Effective Dates, Enforcement, and Interpretations.--
            (1) Effective dates.--
                    (A) Subsection (b), and the definitions under 
                subsection (d), shall apply to segregated asset account 
                investments made on or after the date of enactment of 
                this Act.
                    (B) Subsection (c) shall apply to taxable years 
                beginning after December 31, 1983.
            (2) Enforcement and interpretations.--Prior to the date 
        that the Secretary of the Treasury (or the Secretary's 
        delegate) issues final regulations pursuant to this section--
                    (A) the Secretary (or delegate) shall administer 
                and enforce the law in accordance with this section and 
                the effective dates in paragraph (1) of this 
                subsection; and
                    (B) taxpayers may rely upon their reasonable good 
                faith interpretations of the preceding subsections of 
                this section.

  TITLE III--SIMPLIFICATION AND CLARIFICATION OF RETIREMENT PLAN RULES

SEC. 301. REVIEW AND REPORT TO THE CONGRESS RELATING TO REPORTING AND 
              DISCLOSURE REQUIREMENTS.

    (a) Study.--As soon as practicable after the date of the enactment 
of this Act, the Secretary of Labor, the Secretary of the Treasury, and 
the Director of the Pension Benefit Guaranty Corporation (or their 
delegates) shall review the reporting and disclosure requirements of--
            (1) title I of the Employee Retirement Income Security Act 
        of 1974 applicable to pension plans (as defined in section 3(2) 
        of such Act); 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) thereof).
    (b) Report.--Not later than 18 months after the date of the 
enactment of this Act, the Secretary of Labor, the Secretary of the 
Treasury, and the Director of the Pension Benefit Guaranty Corporation 
(or their delegates), 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 appropriate committees of 
the Congress to consolidate, simplify, standardize, and improve such 
requirements so as to simplify reporting for such plans and ensure that 
plans can simply 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. Such report shall assess the extent to which retirement plans 
are retaining disclosures, work records, and plan documents that are 
needed to ensure accurate calculation of future benefits. 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, 
and retaining disclosures. The agencies shall conduct appropriate 
surveys and data collection to obtain any needed information.

SEC. 302. CONSOLIDATION OF DEFINED CONTRIBUTION PLAN NOTICES.

    Not later than 18 months after the date of the enactment of this 
Act, the Secretary of Labor and the Secretary of the Treasury (or such 
Secretaries' delegates) shall adopt regulations providing that a plan 
may, but is not required to, consolidate 2 or more of the notices 
required under sections 404(c)(5)(B) and 514(e)(3) of the Employee 
Retirement Income Security Act of 1974 (29 U.S.C. 1104(c)(5)(B) and 29 
U.S.C. 1144(e)(3)) and sections 401(k)(12)(D), 401(k)(13)(E), and 
414(w)(4) of the Internal Revenue Code of 1986 into a single notice so 
long as the combined notice includes the required content, clearly 
identifies the issues addressed therein, is provided at the time and 
with the frequency required for each such notice, and is presented in a 
manner that is understandable and does not obscure or fail to highlight 
important points for participants and beneficiaries.

SEC. 303. PERFORMANCE BENCHMARKS FOR ASSET ALLOCATION FUNDS.

    (a) In General.--Not later than 6 months after the date of the 
enactment of this Act, the Secretary of Labor (or the Secretary's 
delegate) shall modify the regulations under section 404 of the 
Employee Retirement Income Security Act of 1974 (29 U.S.C. 1104) to 
provide that, in the case of a designated investment alternative which 
contains a mix of asset classes, a plan administrator may, but is not 
required to, use a benchmark which 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 presented to participants and 
        beneficiaries in a manner that is reasonably designed to be 
        understandable and helpful; and
            (4) each securities market index which is used for an 
        associated asset class would separately satisfy the 
        requirements of such regulations for such asset class.
    (b) Study.--Not later than December 31, 2022, the Secretary of 
Labor (or the Secretary's delegate) shall deliver a report to the 
Committees on Ways and Means and Education and Labor of the House of 
Representatives and the Committees on Finance and Health, Education, 
Labor, and Pensions of the Senate regarding the effectiveness of the 
benchmarking requirements under section 2550.404a-5 of title 29, Code 
of Federal Regulations.

SEC. 304. PERMIT NONSPOUSAL BENEFICIARIES TO ROLL ASSETS TO PLANS.

    (a) In General.--Section 402(c) is amended by adding at the end the 
following new paragraph:
            ``(12) Distributions to qualified plan of nonspouse 
        beneficiary.--If, with respect to any portion of a distribution 
        from an eligible retirement plan described in clause (iii), 
        (iv), (v), or (vi) of paragraph (8)(B) of a deceased employee, 
        a direct trustee-to-trustee transfer is made to another such 
        plan of an individual who is a designated beneficiary (as 
        defined by section 401(a)(9)(E)) of the employee and who is not 
        the surviving spouse of the employee--
                    ``(A) the transfer shall be treated as an eligible 
                rollover distribution, and
                    ``(B) section 401(a)(9)(B) (other than clause (iv) 
                thereof) shall apply to such plan.''.
    (b) Conforming Amendments.---
            (1) 403(a) plans.--Subparagraph (B) of section 403(a)(4) is 
        amended by striking ``and (11) and (9)'' and inserting ``, (9), 
        (11), and (12)''.
            (2) 403(b) plans.--Subparagraph (B) of section 403(b)(8) is 
        amended by striking ``and (11)'' and inserting ``(11), and 
        (12)''.
            (3) 457 plans.--Subparagraph (B) of section 457(e)(16) is 
        amended by striking ``and (11)'' and inserting ``(11), and 
        (12)''.
    (c) Effective Date.--The amendments made by this section shall 
apply to distributions made after the date of the enactment of this 
Act.

SEC. 305. DEFERRAL AGREEMENTS.

    (a) In General.--Paragraph (4) of section 457(b) of the Internal 
Revenue Code of 1986 is amended by inserting ``, or, in the case of a 
plan of an eligible employer described in subsection (e)(1)(A), before 
the date on which the compensation is (but for the deferral) 
available'' before the comma at the end.
    (b) Effective Date.--The amendment made by this section shall apply 
to years beginning after December 31, 2021.

SEC. 306. SIMPLIFYING 402(F) NOTICES.

    Not later than December 31, 2022, the Secretary of the Treasury (or 
the Secretary's delegate), in consultation with the Secretary of Labor 
and the Director of the Pension Benefit Guaranty Corporation (or their 
delegates), shall simplify the model notices issued under section 
402(f) of the Internal Revenue Code of 1986 so as to facilitate better 
understanding by recipients of different distribution options and 
corresponding tax consequences. Such model notices shall include an 
explanation of the effect of elections on spousal rights.

SEC. 307. PERMIT PLANS TO USE BASE PAY OR RATE OF PAY CALCULATION.

    (a) In General.--Not later than December 31, 2022, the Secretary of 
the Treasury (or the Secretary's delegate) shall modify Treasury 
Regulation section 1.414(s)-1(d)(3) to facilitate the use of the safe 
harbors in sections 401(k)(12), 401(k)(13), 401(k)(16), 401(m)(11), 
401(m)(12), and 401(m)(13) of the Internal Revenue Code of 1986, and in 
Treasury Regulation section 1.401(a)(4)-3(b), by plans which use base 
pay or rate of pay in determining contributions or benefits. Such 
facilitation shall include increased flexibility in meeting the 
definition in section 414(s) of such Code in situations where the 
amount of overtime compensation payable in a year can vary 
significantly.
    (b) Exception.--The Secretary of the Treasury (or the Secretary's 
delegate) may make any modification under subsection (a) inapplicable 
to plans with respect to which, on a consistent basis, overtime is a 
major component of a substantial portion of the employees eligible to 
participate in the plan who are not highly compensated employees (as 
defined in section 414(q) of the Internal Revenue Code of 1986).

SEC. 308. ROTH SIMPLE IRAS.

    (a) In General.--Section 408A(f) is amended--
            (1) by striking ``or a simple retirement account'' in 
        paragraph (1); and
            (2) by striking ``or account'' in paragraph (2).
    (b) Conforming Amendments.--Section 408A(c)(2) is amended by adding 
at the end the following flush sentence:
        ``In applying this paragraph to an individual on whose behalf 
        elective employer contributions are made to a simple retirement 
        account, the amount described in subparagraph (A) shall be 
        increased by the amount of elective employer contributions made 
        on behalf of the individual to such account, except to the 
        extent that such contributions exceed the applicable dollar 
        amount (as defined in subsection (p)(2)(E)) or 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 subparagraph (C) thereof).''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2021.

SEC. 309. REDUCTION IN EXCISE TAX ON CERTAIN ACCUMULATIONS IN QUALIFIED 
              RETIREMENT PLANS.

    (a) In General.--Subsection (a) of section 4974 is amended by 
striking ``50 percent'' and inserting ``25 percent''.
    (b) Effective Date.--The amendment made by this section shall apply 
to taxable years beginning after December 31, 2021.

SEC. 310. CLARIFICATION OF CATCH-UP CONTRIBUTIONS WITH RESPECT TO 
              SEPARATE LINES OF BUSINESS.

    (a) In General.--Subparagraph (B) of section 414(v)(4) is amended--
            (1) by striking ``except that a plan'' and inserting 
        ``except that--
                            ``(i) a plan'';
            (2) by striking the period at the end and inserting ``, 
        and''; and
            (3) by adding at the end the following new clause:
                            ``(ii) for any year in which an employer 
                        complies with section 410(b) on the basis of 
                        separate lines of business pursuant to section 
                        410(b)(5), the employer may apply subparagraph 
                        (A) for such year separately with respect to 
                        employees in each separate line of business.''.
    (b) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2021.

SEC. 311. CLARIFICATION OF SUBSTANTIALLY EQUAL PERIODIC PAYMENT RULE.

    (a) In General.--Paragraph (4) of section 72(t) is amended by 
inserting at the end the following new subparagraph:
                    ``(C) Rollovers to subsequent plan.--If--
                            ``(i) payments described in paragraph 
                        (2)(A)(iv) are being made from a qualified 
                        retirement plan,
                            ``(ii) a transfer or a rollover from such 
                        qualified retirement plan of all or a portion 
                        of the taxpayer's benefit under the plan is 
                        made to another qualified retirement plan, and
                            ``(iii) distributions from the transferor 
                        and transferee plans would in combination 
                        continue to satisfy the requirements of 
                        paragraph (2)(A)(iv) if they had been made only 
                        from the transferor plan,
                such transfer or rollover shall not be treated as a 
                modification under subparagraph (A)(ii), and compliance 
                with paragraph (2)(A)(iv) shall be determined on the 
                basis of the combined distributions described in clause 
                (iii).''.
    (b) Nonqualified Annuity Contracts.--Paragraph (3) of section 72(q) 
is amended--
            (1) by redesignating clauses (i) and (ii) of subparagraph 
        (B) as subclauses (I) and (II), and by moving such subclauses 2 
        ems to the right;
            (2) by redesignating subparagraphs (A) and (B) as clauses 
        (i) and (ii), by moving such clauses 2 ems to the right, and by 
        adjusting the flush language at the end accordingly;
            (3) by striking ``payments.--If'' and inserting 
        ``payments.--
                    ``(A) In general.--If--''; and
            (4) by adding at the end the following new subparagraph:
                    ``(B) Exchanges to subsequent contracts.--If--
                            ``(i) payments described in paragraph 
                        (2)(D) are being made from an annuity contract,
                            ``(ii) an exchange of all or a portion of 
                        such contract for another contract is made 
                        under section 1035, and
                            ``(iii) the aggregate distributions from 
                        the contracts involved in the exchange continue 
                        to satisfy the requirements of paragraph (2)(D) 
                        as if the exchange had not taken place,
                such exchange shall not be treated as a modification 
                under subparagraph (A)(ii), and compliance with 
                paragraph (2)(D) shall be determined on the basis of 
                the combined distributions described in clause 
                (iii).''.
    (c) Information Reporting.--Section 6724 is amended by inserting at 
the end the following new subsection:
    ``(g) Special Rule for Reporting Certain Additional Taxes.--No 
penalty shall be imposed under section 6721 or 6722 if--
            ``(1) a person makes a return or report under section 
        6047(d) or 408(i) with respect to any distribution,
            ``(2) such distribution is made following a rollover, 
        transfer, or exchange described in section 72(t)(4)(C) or 
        section 72(q)(3)(C),
            ``(3) in making such return or report the person relies 
        upon a certification provided by the taxpayer that the 
        distributions satisfy the requirements of section 
        72(t)(4)(C)(iii) or section 72(q)(3)(B)(iii), as applicable, 
        and
            ``(4) such person does not have actual knowledge that the 
        distributions do not satisfy such requirements.''.
    (d) Safe Harbor for Annuity Payments.--
            (1) Qualified retirement plans.--Subparagraph (A) of 
        section 72(t)(2) is amended by adding at the end the following 
        flush sentence:
                ``For purposes of clause (iv), periodic payments shall 
                not fail to be treated as substantially equal merely 
                because they are amounts received as an annuity, and 
                such periodic payments shall be deemed to be 
                substantially equal if they are payable over a period 
                described in clause (iv) and satisfy the requirements 
                applicable to annuity payments under section 
                401(a)(9).''.
            (2) Other annuity contracts.--Paragraph (2) of section 
        72(q) is amended by adding at the end the following flush 
        sentence:
        ``For purposes of subparagraph (D), periodic payments shall not 
        fail to be treated as substantially equal merely because they 
        are amounts received as an annuity, and such periodic payments 
        shall be deemed to be substantially equal if they are payable 
        over a period described in subparagraph (D) and would satisfy 
        the requirements applicable to annuity payments under section 
        401(a)(9) if such requirements applied.''.
    (e) Effective Dates.--
            (1) In general.--The amendments made by subsections (a), 
        (b), and (c) shall apply to transfers, rollovers, and exchanges 
        occurring on or after the date of the enactment of this Act.
            (2) Annuity payments.--The amendment made by subsection (d) 
        shall apply to distributions commencing on or after the date of 
        the enactment of this Act.
            (3) No inference.--Nothing in the amendments made by this 
        section shall be construed to create an inference with respect 
        to the law in effect prior to the effective date of such 
        amendments.

SEC. 312. CLARIFICATION OF TREATMENT OF DISTRIBUTIONS OF ANNUITY 
              CONTRACTS.

    (a) In General.--Clause (i) of section 402(e)(4)(D) is amended by 
inserting after ``section 401(c)(1).'' at the end of the second 
sentence the following: ``A distribution of an annuity contract from a 
trust or annuity plan referred to in the first sentence of this clause 
may be treated as a part of a lump sum distribution.''.
    (b) Effective Date.--The amendment made by this section shall take 
effect as if included in section 1401(b)(1) of the Small Business Job 
Protection Act of 1996.

SEC. 313. CLARIFICATION REGARDING ELECTIVE DEFERRALS.

    (a) In General.--Not later than 6 months after the date of the 
enactment of this Act, the Secretary of the Treasury (or the 
Secretary's delegate) shall amend Treas. Reg. section 1.415(c)-2(e), 
and make any necessary conforming amendments to other Treasury 
Regulations, to provide that plans may allow employees who have had a 
severance from employment to make deferrals or contributions described 
in subsection (b) with respect to payments of severance or back pay. 
The Secretary of the Treasury (or delegate) may provide for such other 
conditions on such deferrals or contributions as are necessary to carry 
out the purposes of this section.
    (b) Deferrals and Contributions Described.--The deferrals or 
contributions described in this subsection are--
            (1) elective deferrals described in subparagraph (A), (B), 
        or (C) of section 402(g)(3) of the Internal Revenue Code of 
        1986 (other than elective deferrals under section 401(k)(11) of 
        such Code);
            (2) elective contributions under an eligible deferred 
        compensation plan described in section 457(b) of such Code; and
            (3) to the extent provided by such Secretary (or delegate), 
        elective deferrals described in section 402(g)(3)(D) or 
        401(k)(11) of such Code.
    (c) Treatment of Deferrals.--Except as otherwise determined by the 
Secretary of the Treasury (or the Secretary's delegate) to be necessary 
to carry out the purposes of this section, the rules described in 
subsection (a) shall provide that the contributions or deferrals shall, 
for purposes of section 457 and subchapter D of chapter 1 of subtitle A 
of the Internal Revenue Code of 1986, be treated as contributions or 
deferrals made on behalf of active employees, not on behalf of former 
employees.

SEC. 314. TAX TREATMENT OF CERTAIN NONTRADE OR BUSINESS SEP 
              CONTRIBUTIONS.

    (a) In General.--Subparagraph (B) of section 4972(c)(6) is 
amended--
            (1) by striking ``408(p)) or'' and inserting ``408(p)),''; 
        and
            (2) by inserting ``, or a simplified employee pension 
        (within the meaning of section 408(k))'' after ``401(k)(11))''.
    (b) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2019.

SEC. 315. ALLOW CERTAIN PLAN TRANSFERS AND MERGERS.

    (a) Amendments to the Internal Revenue Code of 1986.--
            (1) In general.--Section 414 is amended by adding at the 
        end the following new subsection:
    ``(aa) Certain Plan Transfers and Mergers.--
            ``(1) In general.--Under rules prescribed by the Secretary, 
        no amount shall be includible in gross income by reason of--
                    ``(A) a transfer of all or a portion of the account 
                balance of a participant or beneficiary, whether or not 
                vested, from a defined contribution plan described in 
                section 401(a) or section 403(a) of an employer to an 
                annuity contract described in section 403(b) of the 
                same employer,
                    ``(B) a transfer of all or a portion of the account 
                balance of a participant or beneficiary, whether or not 
                vested, from an annuity contract described in section 
                403(b) of an employer to a defined contribution plan 
                described in section 401(a) or section 403(a) of the 
                same employer, or
                    ``(C) a merger of a defined contribution plan 
                described in section 401(a) or section 403(a) of an 
                employer with an annuity contract described in section 
                403(b) of the same employer,
        so long as the transfer or merger does not cause a reduction in 
        the vested benefit or total benefit (including non-vested 
        benefit) of any participant or beneficiary. A plan or contract 
        shall not fail to be considered to be described in section 
        401(a), 403(a), or 403(b) (as applicable) merely because such 
        plan or contract engages in a transfer or merger described in 
        this paragraph.
            ``(2) Distributions.--Amounts transferred or merged 
        pursuant to paragraph (1) shall be subject to the requirements 
        of paragraphs (3) and (4) and to the distribution requirements 
        under section 401(a), 403(a), or 403(b) applicable to the 
        transferee or merged plan.
            ``(3) Spousal consent and anti-cutback protection.--In the 
        case of a transfer or merger described in paragraph (1), 
        amounts in the transferee or merged plan that are attributable 
        to the transferor or predecessor plan shall--
                    ``(A)(i) be subject to section 401(a)(11) and 
                section 205 of the Employee Retirement Income Security 
                Act of 1974 to the extent that such sections applied to 
                such amounts in the transferor or predecessor plan, or
                    ``(ii) be required to satisfy the requirements of 
                section 401(a)(11)(B)(iii)(I) and section 
                205(b)(1)(C)(i) of the Employee Retirement Income 
                Security Act of 1974 to the extent that such sections 
                applied to such amounts in the transferor or 
                predecessor plan, and
                    ``(B) be treated as subject to section 411(d)(6) 
                and section 204(g) of the Employee Retirement Income 
                Security Act of 1974 to the extent that such amounts 
                were subject to such sections in the transferor or 
                predecessor plan.
            ``(4) Special rules.--Under rules prescribed by the 
        Secretary, to the extent amounts transferred or merged pursuant 
        to paragraph (1) were otherwise entitled to grandfather 
        treatment under the transferor or predecessor plan, such 
        amounts (and income or loss attributable thereto) shall remain 
        entitled to such treatment under the transferee or merged plan. 
        The rules prescribed by the Secretary shall require that such 
        amounts be separately accounted for by the transferee or merged 
        plan. For purposes of this paragraph, the term `grandfather 
        treatment' means any special treatment under this title that is 
        provided for prior benefits, prior periods of time, or certain 
        individuals in connection with a change in the applicable law.
            ``(5) Consent.--In the case of a qualified trust described 
        in section 401(a) or 403(a) and an annuity contract described 
        in section 403(b) with respect to which transfers may be made 
        only with the consent of a participant or beneficiary pursuant 
        to the terms of such trust or contract or pursuant to 
        applicable law, such consent requirement shall apply without 
        regard to this subsection. Nothing in this subsection shall 
        affect the application of contract or plan terms otherwise 
        applicable in the case of a withdrawal from the contract or 
        plan.''.
            (2) Aggregation.--Paragraph (2) of section 414(t) is 
        amended by inserting ``414(aa),'' after ``274(j),''.
            (3) Technical amendment.--The heading of subsection (z) of 
        section 414 is amended by striking ``Plan'' and inserting 
        ``Church Plan''.
    (b) Amendment to the Employee Retirement Income Security Act of 
1974.--Section 4 of the Employee Retirement Income Security Act of 1974 
(29 U.S.C. 1003) is amended by adding at the end the following new 
subsection:
    ``(d) This title shall apply to any plan or contract described in 
section 414(aa) of the Internal Revenue Code of 1986 to the extent 
necessary to comply with the requirements of such section.''.
    (c) Effective Date.--
            (1) In general.--The amendments made by this section shall 
        apply to transfers or mergers in years beginning after the 
        Secretary of the Treasury (or the Secretary's delegate) 
        prescribes rules under section 414(aa) of the Internal Revenue 
        Code of 1986, as added by this section.
            (2) Rules.--The Secretary of the Treasury (or the 
        Secretary's delegate) shall issue rules under section 414(aa) 
        of the Internal Code of 1986, as so added, within 1 year after 
        the date of the enactment of this Act.

SEC. 316. EXCEPTION FROM REQUIRED DISTRIBUTIONS WHERE AGGREGATE 
              RETIREMENT SAVINGS DO NOT EXCEED $100,000.

    (a) In General.--Section 401(a)(9), as amended by this Act, is 
further amended by adding at the end the following new subparagraph:
                    ``(L) Exception from required minimum distributions 
                during life of employee or beneficiary where assets do 
                not exceed $100,000.--
                            ``(i) In general.--If, as of a measurement 
                        date, the aggregate value of the entire 
                        interest of an employee under all applicable 
                        eligible retirement plans does not exceed 
                        $100,000, then, with respect to any applicable 
                        eligible retirement plan of the employee, 
                        during any succeeding calendar year beginning 
                        before the next measurement date the 
                        requirements of subparagraph (A) shall not 
                        apply to the employee.
                            ``(ii) Applicable eligible retirement 
                        plan.--For purposes of this subparagraph, the 
                        term `applicable eligible retirement plan' 
                        means an eligible retirement plan (as defined 
                        in section 402(c)(8)(B)) and any other plan, 
                        contract, or arrangement to which the 
                        requirements of this paragraph apply, but does 
                        not include any defined benefit plan.
                            ``(iii) Measurement date.--
                                    ``(I) Initial measurement dates.--
                                The initial measurement date for an 
                                employee is the last day of the 
                                calendar year preceding the earlier 
                                of--
                                            ``(aa) the calendar year in 
                                        which the employee attains the 
                                        applicable age, or
                                            ``(bb) the calendar year in 
                                        which the employee dies.
                                    ``(II) Subsequent measurement 
                                dates.--If, in a calendar year, an 
                                employee to whom subparagraph (A) does 
                                not apply by reason of clause (i) 
                                receives contributions, rollovers, or 
                                transfers of amounts which were not 
                                previously taken into account in 
                                applying this subparagraph, then the 
                                last day of that calendar year shall be 
                                a new measurement date and a new 
                                determination shall be made as to 
                                whether clause (i) applies to such 
                                employee.
                                    ``(III) Special rule.--In the case 
                                of an employee who receives account 
                                statements at least annually with 
                                respect to a plan, the value of the 
                                employee's interest in such plan as 
                                shown on the last account statement 
                                provided to such employee for such 
                                calendar year may (at the election of 
                                the employee) be treated as the value 
                                of the employee's interest in such plan 
                                on the measurement date. If such last 
                                account statement does not include all 
                                amounts described in subclause (II) for 
                                such calendar year, the last day of the 
                                next calendar year shall be a new 
                                measurement date in accordance with 
                                subclause (II) and a new determination 
                                shall be made as to whether clause (i) 
                                applies to such employee.
                            ``(iv) Determination of value.--For 
                        purposes of this subparagraph, the value of an 
                        employee's interest in a plan is the account 
                        balance of such plan.
                            ``(v) Phase-out of exception.--In the case 
                        of an employee whose aggregate balance 
                        described in clause (i) as of a measurement 
                        date exceeds the dollar amount in effect under 
                        such clause by less than $10,000, the required 
                        distributions under this paragraph for calendar 
                        years beginning after such measurement date and 
                        before the next measurement date shall be equal 
                        to the amount which bears the same ratio to the 
                        required distributions otherwise determined 
                        under this paragraph as--
                                    ``(I) the amount by which such 
                                aggregate balance exceeds such dollar 
                                amount so in effect, bears to
                                    ``(II) $10,000.
                            ``(vi) Cost-of-living adjustments.--The 
                        Secretary shall adjust annually the $100,000 
                        amount specified in clause (i) for increases in 
                        the cost-of-living at the same time and in the 
                        same manner as adjustments under section 
                        415(d); except that the base period shall be 
                        the calendar quarter beginning July 1, 2021, 
                        and any increase which is not a multiple of 
                        $5,000 shall be rounded to the next lowest 
                        multiple of $5,000.
                            ``(vii) Plan reliance.--The plan 
                        administrator of an applicable eligible 
                        retirement plan shall be entitled to rely on a 
                        certification provided by an employee that such 
                        employee's interest in other applicable 
                        eligible retirement plans does not prevent such 
                        employee from being described in clause (i). 
                        Any such certification shall apply to all 
                        future years in the absence of a contrary 
                        certification from the employee, and shall 
                        apply to the current year if received not later 
                        than March 1 of such current year. If no such 
                        certification is received by the plan 
                        administrator by March 1 of a year for which a 
                        required distribution is to be made under 
                        subparagraph (A), the plan administrator shall 
                        be treated as required to make the distribution 
                        required under subparagraph (A) for such 
                        year.''.
    (b) Effective Date.--The amendment made by this section shall apply 
to initial measurement dates occurring on or after December 31, 2021.

SEC. 317. HARDSHIP RULES FOR 403(B) PLANS.

    (a) In General.--Section 403(b) is amended by adding at the end the 
following new paragraph:
            ``(15) 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) 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 (15)''.
            (2) Paragraph (11) of section 403(b), as amended by this 
        Act, is further amended--
                    (A) by striking ``in'' in subparagraph (B) and 
                inserting ``subject to the provisions of paragraph 
                (15), in''; and
                    (B) by striking the last sentence.
    (c) Effective Date.--The amendments made by this section shall 
apply to plan years beginning after December 31, 2021.

SEC. 318. IRA PRESERVATION.

    (a) Information Made Available.--The Secretary of the Treasury (or 
the Secretary's delegate) shall make available to the public the 
following information:
            (1) An overview of the laws and regulations related to 
        individual retirement plans (as defined in section 7701(a)(37) 
        of the Internal Revenue Code of 1986), including--
                    (A) limits on contributions;
                    (B) limits on deductions for contributions;
                    (C) rollovers;
                    (D) minimum required distributions;
                    (E) non-exempt prohibited transactions; and
                    (F) tax consequences for early distributions.
            (2) Examples of common errors by taxpayers with respect to 
        the laws and regulations described in paragraph (1) and 
        instructions on how to avoid such errors.
    (b) Reduction in Excise Tax on Excess Contributions.--Section 4973 
is amended by adding at the end the following new subsection:
    ``(i) Reduction of Tax in Certain Cases.--
            ``(1) Reduction.--In the case of a taxpayer who--
                    ``(A) corrects, during the correction window, an 
                excess contribution which was made to an individual 
                retirement plan and which resulted in imposition of a 
                tax under paragraph (1) or (3) of subsection (a), and
                    ``(B) submits a return, during the correction 
                window, reflecting such tax (as modified by this 
                subsection),
        the first and second sentences of subsection (a) shall be 
        applied by substituting `3 percent' for `6 percent' each place 
        it appears.
            ``(2) Correction window.--For purposes of this subsection, 
        the term `correction window' means the period beginning on the 
        date on which the tax under subsection (a) is imposed with 
        respect to an excess contribution, and ending on the earlier 
        of--
                    ``(A) the date on which the Secretary initiates an 
                audit, or otherwise demands payment, with respect to 
                the excess contribution, 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) Reduction in Excise Tax on Failures To Take Required Minimum 
Distributions.--Section 4974, as amended by this Act, is further 
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.''.
    (d) Repeal of Tax Disqualification Penalty.--
            (1) In general.--Paragraph (2) of subsection (e) of section 
        408 is repealed.
            (2) Conforming amendments.--
                    (A) Section 408(e)(1) is amended by striking ``(2) 
                or''.
                    (B) Sections 220(e)(2), 223(e)(2), and 530(e) are 
                each amended by striking ``paragraphs (2) and (4) of 
                section 408(e)'' and inserting ``section 408(e)(4)''.
                    (C) Section 4975(c)(3) is amended by striking ``the 
                account ceases to be an individual retirement account 
                by reason of the application of section 408(e)(2)(A) or 
                if''.
    (e) Statute of Limitations.--Subsection (l) of section 6501 of the 
Internal Revenue Code of 1986 is amended--
            (1) in paragraph (1), by inserting ``(other than with 
        respect to an individual retirement plan)'' after ``section 
        4975''; and
            (2) by adding at the end the following new paragraph:
            ``(4) Individual retirement plans.--For purposes of any tax 
        imposed by section 4973, 4974, or 4975 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. In the case of a person who is not 
        required to file an income tax return for such year--
                    ``(A) 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
                    ``(B) 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).''.
    (f) Effective Date.--
            (1) In general.--Subject to paragraphs (2) and (3), this 
        section and the amendments made by this section shall take 
        effect on the date of the enactment of this Act.
            (2) Transition provisions.--
                    (A) In general.--The amendments made by this 
                section shall apply to any determination of or 
                affecting liability for taxes, interest, or penalties 
                which is made on or after the date of the enactment of 
                this Act, without regard to whether the conduct upon 
                which the determination is based occurred before such 
                date of enactment.
                    (B) Calculation of correction window in certain 
                cases.--In the case of an error that would have been 
                eligible for correction under section 4973(i) or 
                4974(e) of the Internal Revenue Code of 1986 if tax had 
                not been imposed under section 4973(a) or 4974(a), as 
                the case may be, of such Code before the date of the 
                enactment of this Act, the correction window referred 
                to in sections 4973(i) and 4974(e) of such Code (as 
                added by this section) shall be the period beginning on 
                the date on which such tax was imposed and ending on 
                the earlier of--
                            (i) the date on which the Secretary of the 
                        Treasury (or the Secretary's delegate) 
                        initiates an audit or otherwise demands payment 
                        with respect to the conduct described in 
                        section 4973(a) or 4974(a), as the case may be, 
                        of such Code; or
                            (ii) the last day of the second taxable 
                        year that begins after the taxable year in 
                        which the date of the enactment of this Act 
                        occurs.
            (3) Implementation.--Subsection (a) shall be implemented as 
        soon as reasonably practicable after the enactment of this Act 
        but in no case later than the date that is 1 year after such 
        date of enactment.

SEC. 319. ELIMINATION OF ADDITIONAL TAX ON CERTAIN DISTRIBUTIONS.

    (a) In General.--Subparagraph (A) of section 72(t)(2), as amended 
by this Act, is further amended--
            (1) by striking ``or'' at the end of clause (vii);
            (2) by striking the period at the end of clause (viii) and 
        inserting ``, or''; and
            (3) by inserting after clause (viii) the following new 
        clause:
                            ``(ix) attributable to withdrawal of 
                        interest or other income earned on excess 
                        contributions (as defined in section 4973(b) 
                        (without regard to the second to last sentence 
                        thereof)) to an individual retirement plan.''.
    (b) Effective Date.--The amendments made by this section shall 
apply to any determination of, or affecting, liability for taxes, 
interest, or penalties which is made on or after the date of the 
enactment of this Act, without regard to whether the act (or failure to 
act) upon which the determination is based occurred before such date of 
enactment. Notwithstanding the preceding sentence, nothing in the 
amendments made by this section shall be construed to create an 
inference with respect to the law in effect prior to the effective date 
of such amendments.

SEC. 320. DISTRIBUTIONS TO FIREFIGHTERS.

    (a) In General.--Subparagraph (A) of section 72(t)(10) 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) is amended--
            (1) by striking ``public'', and
            (2) by striking ``in governmental plans''.
    (c) Effective Date.--The amendments made by this section shall 
apply to distributions made after December 31, 2021.

SEC. 321. 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) in connection with the annual open season election 
        period with respect to the plan or, if there is no such period, 
        within a reasonable period prior to the beginning of each plan 
        year, 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 which the 
        participant would be entitled to receive without regard to 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 all required notices, disclosures, and 
        other plan documents, including the summary plan description, 
        required to be furnished under this title in connection with 
        such participant's initial eligibility to participate in such 
        plan;
            ``(3) is not participating in such plan; and
            ``(4) does not have a balance in the plan.
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 under the plan and the key 
                rights and features under the plan affecting such 
                benefits; 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, as 
amended by this Act, is further amended by adding at the end the 
following new subsection:
    ``(bb) 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) in connection with the annual open season 
                election period with respect to the plan or, if there 
                is no such period, within a reasonable period prior to 
                the beginning of each plan year, 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 
                which the participant would be entitled to receive 
                without regard to 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 all required notices, 
                disclosures, and other plan documents required to be 
                furnished under this title and the summary plan 
                description as provided in section 104(b) of 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, and
                    ``(D) does not have a balance in the plan.
        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, 2021.

SEC. 322. RECOVERY OF RETIREMENT PLAN OVERPAYMENTS.

    (a) Overpayments Under Internal Revenue Code of 1986.--
            (1) Qualification requirements.--Section 414, as amended by 
        the preceding provisions of this Act, is further amended by 
        adding at the end the following new subsection:
    ``(cc) 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 for recouping benefits previously 
        paid or allocations previously made in excess of such 
        limitations.
            ``(5) Coordination with other qualification requirements.--
        The Secretary 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), as amended by this Act, is 
        further amended by adding at the end the following new 
        paragraph:
            ``(13) In the case of an inadvertent benefit overpayment 
        from a plan to which section 414(cc)(1) applies which 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 
        and appeals 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.''.
    (b) 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.
                    ``(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 of the Treasury for purposes of this 
                subparagraph.
                    ``(D) Efforts to recoup overpayments are not made 
                through a collection agency or similar third party and 
                such efforts are 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.
                    ``(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 and 
                appeals 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.''.
    (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 such date of enactment 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. 323. RETIREMENT SAVINGS LOST AND FOUND.

    (a) Retirement Savings Lost and Found.--
            (1) Establishment.--
                    (A) In general.--Not later than 3 years after the 
                date of the enactment of this Act, the Secretary of 
                Labor, the Secretary of the Treasury, and the Secretary 
                of Commerce, in cooperation, shall establish an online 
                searchable database (to be managed by the Pension 
                Benefit Guaranty Corporation in accordance with section 
                4051 of the Employee Retirement Income Security Act of 
                1974) to be known as the ``Retirement Savings Lost and 
                Found''. The Retirement Savings Lost and Found shall--
                            (i) allow an individual to search for 
                        information that enables the individual to 
                        locate the plan administrator of any plans with 
                        respect to which the individual is or was a 
                        participant or beneficiary, and to provide 
                        contact information for the plan administrator 
                        of any plan described in subparagraph (B);
                            (ii) allow the Pension Benefit Guaranty 
                        Corporation to assist such an individual in 
                        locating any plan of the individual; and
                            (iii) allow the Pension Benefit Guaranty 
                        Corporation to make any necessary changes to 
                        contact information on record for the plan 
                        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 plan administrator, or other causes.
                The Retirement Savings Lost and Found established under 
                this paragraph shall include information reported under 
                section 4051 of the Employee Retirement Income Security 
                Act of 1974 and other relevant information obtained by 
                the Pension Benefit Guaranty Corporation.
                    (B) Plans described.--A plan described in this 
                subparagraph is a plan to which the vesting standards 
                of section 203 of part 2 of subtitle B of title I of 
                the Employee Retirement Income Security Act of 1974 
                apply.
            (2) Administration.--The Retirement Savings Lost and Found 
        established under paragraph (1) shall provide individuals 
        described in paragraph (1)(A) only with the ability to view 
        contact information for the plan 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.
            (3) Safeguarding participant privacy and security.--In 
        establishing the Retirement Savings Lost and Found under 
        paragraph (1), the Pension Benefit Guaranty Corporation, in 
        consultation with the Secretary of Labor, the Secretary of the 
        Treasury, and the Secretary of Commerce, shall take all 
        necessary and proper precautions to ensure that individuals' 
        plan information maintained by the Retirement Savings Lost and 
        Found is protected and that persons other than the individual 
        cannot fraudulently claim the benefits to which any individual 
        is entitled, and to allow any individual to opt out of 
        inclusion in the Retirement Savings Lost and Found at the 
        election of the individual.
    (b) Office of the Retirement Savings Lost and Found.--
            (1) In general.--Subtitle C of title IV 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. 4051. OFFICE OF THE RETIREMENT SAVINGS LOST AND FOUND.

    ``(a) Establishment; Responsibilities of Office.--
            ``(1) In general.--Not later than 2 years after the date of 
        the enactment of this section, the Secretary of Labor, the 
        Secretary of the Treasury, and the Secretary of Commerce shall 
        establish within the corporation an Office of the Retirement 
        Savings Lost and Found (in this section referred to as the 
        `Office').
            ``(2) Responsibilities of office.--
                    ``(A) In general.--The Office shall--
                            ``(i) carry out subsection (b) of this 
                        section;
                            ``(ii) maintain the Retirement Savings Lost 
                        and Found established under section 323(a) of 
                        the Retirement Security and Savings Act of 
                        2021; and
                            ``(iii) perform an annual audit of plan 
                        information contained in the Retirement Savings 
                        Lost and Found and ensure that such information 
                        is current and accurate.
                    ``(B) Option to contract.--
                            ``(i) In general.--Not later than 2 years 
                        after the date of enactment of this section, 
                        the corporation shall conduct an analysis of 
                        the cost effectiveness of contracting with a 
                        third party to carry out the responsibilities 
                        under subparagraph (A)(iii) and, upon a 
                        determination that such contracting would be 
                        more cost effective than carrying out such 
                        responsibilities within the Office, the 
                        corporation may enter into such contracts as 
                        merited by such analysis.
                            ``(ii) Report.--The corporation shall 
                        report on the results of the analysis under 
                        clause (i) 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.
    ``(b) Certain Non-Responsive Participants Entitled to Small 
Benefits.--
            ``(1) General rule.--
                    ``(A) Transfer to the office of the retirement 
                savings lost and found.--The administrator of a plan 
                that is not terminated and to which section 
                401(a)(31)(B) of the Internal Revenue Code of 1986 
                applies shall transfer to the Office the amount 
                required to be transferred under section 
                401(a)(31)(B)(iv) of such Code for a non-responsive 
                participant.
                    ``(B) Information and payment to the office.--Upon 
                making a transfer under subparagraph (A), the plan 
                administrator shall provide such information and 
                certifications as the Office shall specify, including 
                with respect to the transferred amount and the non-
                responsive participant.
                    ``(C) Information requirements after transfer.--In 
                the event that, after a transfer is made under 
                subparagraph (A), the relevant non-responsive 
                participant contacts the plan administrator or the plan 
                administrator discovers information that may assist the 
                Office in locating the non-responsive participant, the 
                plan administrator shall notify and provide such 
                information as the Office shall specify to the Office.
                    ``(D) Search and payment by the office following 
                transfer.--The Office shall periodically, and upon 
                receiving information described in subparagraph (C), 
                conduct a search for the non-responsive participant for 
                whom the Office has received a transfer under 
                subparagraph (A). Upon location of a non-responsive 
                participant who claims benefits, the Office shall make 
                a single payment to the non-responsive participant in 
                an amount equal to the sum of--
                            ``(i) the amount transferred to the Office 
                        under subparagraph (A) for such participant; 
                        and
                            ``(ii) the return on the investment 
                        attributable to such amount under section 
                        4005(j)(3).
            ``(2) Definition.--For purposes of this subsection, the 
        term `non-responsive participant' means a participant or 
        beneficiary of a plan described in paragraph (1)(A)--
                    ``(A) who is entitled to a benefit subject to a 
                mandatory transfer under section 401(a)(31)(B)(iii) of 
                the Internal Revenue Code of 1986; and
                    ``(B) for whom the plan has satisfied the 
                conditions in section 401(a)(31)(B)(iv) of such Code.
            ``(3) Regulatory authority.--The Office shall prescribe 
        such regulations as are necessary to carry out the purposes of 
        this section, including rules relating to the amount payable to 
        the Office and the amount to be paid by the Office.
    ``(c) Information Collection.--Within such period after the end of 
a plan year as the Office may by regulations prescribe, the 
administrator of a plan to which the vesting standards of section 203 
apply shall submit the following information, and such other 
information as the corporation may require, to the corporation in such 
form as the corporation may require:
            ``(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), (B), 
        (E), and (F) of section 6057(a)(2) of the Internal Revenue Code 
        of 1986.
    ``(d) Effective Date.--The requirements of subsections (b) and (c) 
shall apply with respect to plan years beginning after the second 
December 31 occurring after the date of the enactment of this section.
    ``(e) Authorization of Appropriations.--There are authorized to be 
appropriated such sums as may be necessary to carry out this 
section.''.
            (2) Establishment of fund for transferred assets.--Section 
        4005 of the Employee Retirement Income Security Act of 1974 (29 
        U.S.C. 1305) is amended by adding at the end the following:
    ``(j)(1) A ninth fund shall be established for the payment of 
benefits under section 4051(b)(1)(D).
    ``(2) Such fund shall be credited with the appropriate--
            ``(A) amounts transferred to the Office of the Retirement 
        Savings Lost and Found under section 4051(b)(1)(A); and
            ``(B) earnings on investments of the fund or on assets 
        credited to the fund.
    ``(3) Whenever the corporation determines that the moneys of any 
fund are in excess of current needs, it may request the investment of 
such amounts as it determines advisable by the Secretary of the 
Treasury in obligations issued or guaranteed by the United States.''.
            (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 matter relating to 
        section 4050 the following:

``Sec. 4051. Certain non-responsive participants entitled to small 
                            benefits.''.
    (c) Mandatory Transfers of Rollover Distributions.--
            (1) Investment options.--
                    (A) In general.--Subparagraph (B) of section 
                404(c)(3) of the Employee Retirement Income Security 
                Act of 1974 (29 U.S.C. 1104(c)(3)) is amended by 
                striking the period at the end and inserting ``, and, 
                to the extent the Secretary provides in guidance or 
                regulations issued after the enactment of the 
                Retirement Security and Savings Act of 2021, is made 
                to--
                            ``(i) a target date or life cycle fund held 
                        under such account;
                            ``(ii) as described in section 2550.404a-2 
                        of title 29, Code of Federal Regulations, an 
                        investment product held under such account 
                        designed to preserve principal and provide a 
                        reasonable rate of return;
                            ``(iii) the Office of the Retirement 
                        Savings Lost and Found in accordance with 
                        section 401(a)(31)(B)(iv) of the Internal 
                        Revenue Code of 1986 and section 
                        323(c)(2)(A)(ii) of the Retirement Security and 
                        Savings Act of 2021; or
                            ``(iv) such other option as the Secretary 
                        may so provide.''.
                    (B) Regulations.--Not later than 270 days after the 
                date of the enactment of this Act, the Secretary of 
                Labor shall promulgate regulations identifying the 
                target date or life cycle funds, or specifying the 
                characteristics of such a fund, that will be deemed to 
                meet the requirements of section 404(c)(3)(B)(i) of the 
                Employee Retirement Income Security Act of 1974 (29 
                U.S.C. 1104(c)(3)(B)), as amended by subparagraph (A).
            (2) Expansion of cap; authority to transfer lesser 
        amounts.--
                    (A) Cap.--Sections 401(a)(31)(B)(ii) and 
                411(a)(11)(A) of the Internal Revenue Code of 1986 and 
                section 203(e)(1) of the Employee Retirement Income 
                Security Act of 1974 are each amended by striking 
                ``$5,000'' and inserting ``$6,000''.
                    (B) Distribution of larger amounts to individual 
                retirement plans only.--Section 401(a)(31)(B)(i) of 
                such Code is amended by adding at the end the 
                following: ``The Office of the Retirement Savings Lost 
                and Found established by section 323 of the Retirement 
                Security and Savings Act of 2021 shall not be treated 
                as a trustee or issuer that is eligible to receive such 
                distributions.''.
                    (C) Lesser amounts.--Section 401(a)(31)(B) of such 
                Code is amended by adding at the end the following new 
                clauses:
                            ``(iii) Treatment of lesser amounts.--In 
                        the case of a trust which is part of an 
                        eligible plan, such trust shall not be a 
                        qualified trust under this section unless such 
                        plan provides that, if a participant in the 
                        plan separates from the service covered by the 
                        plan and the nonforfeitable accrued benefit 
                        described in clause (ii) is not in excess of 
                        $1,000, the plan administrator shall (either 
                        separately or as part of the notice under 
                        section 402(f)) notify the participant that the 
                        participant is entitled to such benefit or 
                        attempt to pay the benefit directly to the 
                        participant.
                            ``(iv) Transfers to retirement savings lost 
                        and found.--If, after a plan administrator 
                        takes the action required under clause (iii), 
                        the participant does not--
                                    ``(I) within 6 months of the 
                                notification under such clause, make an 
                                election under subparagraph (A) or 
                                elect to receive a distribution of the 
                                benefit directly, or
                                    ``(II) accept any direct payment 
                                made under such clause within 6 months 
                                of the attempted payment,
                        the plan administrator shall transfer the 
                        amount of such benefit to the Office of the 
                        Retirement Savings Lost and Found in accordance 
                        with section 4051(b) of the Employee Retirement 
                        Income Security Act of 1974.
                            ``(v) Income tax treatment of transfers to 
                        retirement savings lost and found.--For 
                        purposes of determining the income tax 
                        treatment of transfers to the Office of the 
                        Retirement Savings Lost and Found under clause 
                        (iv)--
                                    ``(I) such a transfer shall be 
                                treated as a transfer to an individual 
                                retirement plan under clause (i), and
                                    ``(II) the distribution of such 
                                amounts by the Office of the Retirement 
                                Savings Lost and Found shall be treated 
                                as a distribution from an individual 
                                retirement plan.''.
                    (D) Effective date.--The amendments made by this 
                paragraph shall apply to vested benefits with respect 
                to participants who separate from service connected to 
                the plan in plan years beginning after the second 
                December 31 occurring after the date of the enactment 
                of this Act.
    (d) Better Reporting for Mandatory Transfers.--
            (1) In general.--Paragraph (2) of section 6057(a) of the 
        Internal Revenue Code of 1986 is amended--
                    (A) in subparagraph (C)--
                            (i) by striking ``during such plan year'' 
                        in clause (i) and inserting ``during the plan 
                        year immediately preceding such plan year'';
                            (ii) by adding ``and'' at the end of clause 
                        (i); and
                            (iii) by striking clause (iii);
                    (B) by redesignating subparagraph (E) as 
                subparagraph (G);
                    (C) by striking ``and'' at the end of subparagraph 
                (D); and
                    (D) by inserting after subparagraph (D) the 
                following new subparagraphs:
                    ``(E) the name and taxpayer identifying number of 
                each participant or former participant in the plan--
                            ``(i) who, during the current plan year or 
                        any previous plan year, was reported under 
                        subparagraph (C), and with respect to whom the 
                        benefits described in subparagraph (C)(ii) were 
                        fully paid during the plan year,
                            ``(ii) with respect to whom any amount was 
                        distributed under section 401(a)(31)(B) during 
                        the plan year, or
                            ``(iii) with respect to whom a deferred 
                        annuity contract was distributed during the 
                        plan year,
                    ``(F) in the case of a participant or former 
                participant to whom subparagraph (E) applies--
                            ``(i) in the case of a participant 
                        described in clause (ii) thereof, the name and 
                        address of the designated trustee or issuer 
                        described in section 401(a)(31)(B)(i) and the 
                        account number of the individual retirement 
                        plan to which the amount was distributed, and
                            ``(ii) in the case of a participant 
                        described in clause (iii) thereof, the name and 
                        address of the issuer of such annuity contract 
                        and the contract or certificate number, and''.
            (2) Rules relating to direct trustee-to-trustee 
        transfers.--
                    (A) In general.--Paragraph (6) of section 402(e) of 
                such Code is amended--
                            (i) by striking ``transfers.--Any'' and 
                        inserting ``transfers.--
                    ``(A) In general.--Any''; and
                            (ii) by adding at the end the following new 
                        subparagraph:
                    ``(B) Notification of trustee.--In the case of a 
                distribution under section 401(a)(31)(B), the plan 
                administrator shall notify the designated trustee or 
                issuer described in clause (i) thereof that the 
                transfer is a mandatory distribution required by such 
                section.''.
                    (B) Penalty.--Subsection (i) of section 6652 of 
                such Code is amended--
                            (i) by striking ``to Recipients'' in the 
                        heading and inserting ``or Notification'';
                            (ii) by striking ``402(f),'' and inserting 
                        ``402(f) or a notification as required by 
                        section 402(e)(6)(B),''; and
                            (iii) by striking ``such written 
                        explanation'' and inserting ``such written 
                        explanation or notification''.
                    (C) Reports.--Subsection (i) of section 408 of such 
                Code is amended--
                            (i) by redesignating subparagraphs (A) and 
                        (B) of paragraph (2) as clauses (i) and (ii), 
                        respectively, and by moving such clauses 2 ems 
                        to the right;
                            (ii) by redesignating paragraphs (1) and 
                        (2) as subparagraphs (A) and (B), respectively, 
                        and by moving such subparagraphs 2 ems to the 
                        right; and
                            (iii) by striking ``as the Secretary 
                        prescribes'' in subparagraph (B)(ii), as so 
                        redesignated, and all that follows through ``a 
                        simple retirement account'' and inserting ``as 
                        the Secretary prescribes.
            ``(3) Simple retirement accounts.--In the case of a simple 
        retirement account'';
                            (iv) by striking ``Reports.--The trustee 
                        of'' and inserting ``Reports.--
            ``(1) In general.--The trustee of'';
                            (v) by striking ``under paragraph (2)'' in 
                        paragraph (3), as redesignated by clause (iii), 
                        and inserting ``under paragraph (1)(B)''; and
                            (vi) by inserting after paragraph 
                        (1)(B)(ii), as redesignated by the preceding 
                        clauses, the following new paragraph:
            ``(2) Mandatory distributions.--In the case of an account, 
        contract, or annuity to which a transfer under section 
        401(a)(31)(B) is made (including a transfer from the individual 
        retirement plan to which the original transfer under such 
        section was made to another individual retirement plan), the 
        report required by this subsection for the year of the transfer 
        and any year in which the information previously reported in 
        subparagraph (B) changes shall--
                    ``(A) identify such transfer as a mandatory 
                distribution required by such section,
                    ``(B) include the name, address, and taxpayer 
                identifying number of the trustee or issuer of the 
                individual retirement plan to which the amount is 
                transferred, and
                    ``(C) be filed with the Pension Benefit Guaranty 
                Corporation as well as with the Secretary.''.
            (3) Notification of participants upon separation.--
        Subsection (e) of section 6057 of such Code is amended by 
        inserting ``, and, with respect to any benefit of the 
        individual subject to section 401(a)(31)(B), a notice of 
        availability of, and the contact information for, the 
        Retirement Savings Lost and Found established under section 
        323(a)(1) of the Retirement Security and Savings Act of 2021'' 
        before the period at the end of the second sentence.
            (4) Effective date.--The amendments made by this subsection 
        shall apply to distributions made in, and returns and reports 
        relating to, years beginning after the second December 31 
        occurring after the date of the enactment of this Act.
    (e) Requirement of Electronic Filing.--
            (1) In general.--Paragraph (2) of section 6011(e) of the 
        Internal Revenue Code of 1986 is amended--
                    (A) by redesignating subparagraphs (A) and (B) as 
                clauses (i) and (ii), respectively, and by moving such 
                clauses 2 ems to the right;
                    (B) by striking ``regulations.--In prescribing'' 
                and inserting ``regulations.--
                    ``(A) In general.--In prescribing''; and
                    (C) by adding at the end the following new 
                subparagraph:
                    ``(C) Exceptions.--Notwithstanding subparagraph 
                (A), the Secretary shall require returns or reports 
                required under--
                            ``(i) sections 6057, 6058, and 6059, and
                            ``(ii) sections 408(i), 6041, and 6047 to 
                        the extent such return or report relates to the 
                        tax treatment of a distribution from a plan, 
                        account, contract, or annuity,
                to be filed on magnetic media, but only with respect to 
                persons who are required to file at least 50 returns 
                during the calendar year which includes the first day 
                of the plan year to which such returns or reports 
                relate.''.
            (2) Effective date.--The amendments made by this subsection 
        shall apply to returns and reports relating to years beginning 
        after the second December 31 occurring after the date of the 
        enactment of this Act.
    (f) Rulemaking to Clarify Fiduciary Duties.--
            (1) Request for information.--Not later than 1 year after 
        the date of enactment of this Act, the Secretary of Labor, in 
        consultation with the Secretary of the Treasury, shall issue a 
        request for information relating to the rulemaking described in 
        paragraph (2).
            (2) Issuance of final rule.--Not later than 3 years after 
        such date, the Secretary of Labor, in consultation with the 
        Secretary of the Treasury, shall issue a final rule that 
        defines the following:
                    (A) The steps a plan sponsor must take to locate a 
                deferred vested participant in order to meet its 
                fiduciary duty under section 404 of the Employee 
                Retirement Income Security Act of 1974 with respect to 
                locating that participant.
                    (B) The ongoing practices and procedures a plan 
                sponsor must institute in order to meet such fiduciary 
                duty with respect to maintaining up-to-date contact 
                information on deferred vested participants.

                 TITLE IV--DEFINED BENEFIT PLAN REFORMS

SEC. 401. CASH BALANCE.

    (a) In General.--Section 414, as amended by this Act, is further 
amended by adding at the end the following new subsection:
    ``(cc) Projected Interest Crediting Rate.--For purposes of this 
part, in the case of an applicable defined benefit plan which provides 
variable interest crediting rates, the interest crediting rate which is 
treated as in effect and as the projected interest crediting rate shall 
be a reasonable projection of such variable interest crediting rate, 
not to exceed 6 percent.''.
    (b) Amendment of Employee Retirement Income Security Act of 1974.--
Section 210 of the Employee Retirement Income Security Act of 1974 (29 
U.S.C. 1060) is amended by adding at the end the following new 
subsection:
    ``(g) Projected Interest Crediting Rate.--For purposes of this 
title, in the case of an applicable defined benefit plan (within the 
meaning of section 203(f)(3)) which provides variable interest 
crediting rates, the interest crediting rate which is treated as in 
effect and as the projected interest crediting rate shall be a 
reasonable projection of such variable interest crediting rate, not to 
exceed 6 percent.''.
    (c) Effective Date.--The amendments made by this section shall 
apply with respect to years beginning after the date of the enactment 
of this Act.

SEC. 402. ALIGNING USE OF LOOKBACK MONTHS TO DETERMINE INTEREST RATES.

    (a) In General.--The Secretary of the Treasury (or the Secretary's 
delegate) shall modify Treasury Regulation section 1.417(e)-
1(d)(10)(ii) (or any successor provision) to provide that the same rule 
applicable to modifications of the time for determining the applicable 
interest rate shall apply to modifications of the time for determining 
any interest rate used by a plan to the extent that the use of such 
interest rate is permissible under section 417(e)(3) of the Internal 
Revenue Code of 1986. Such modified regulations shall require that 
after any such modification of such time under a plan pursuant to this 
section, no further modifications of such time are to be permitted for 
5 years with respect to such plan without the consent of the Secretary 
of the Treasury (or delegate).
    (b) Effective Date.--The modifications and amendments required 
under subsection (a) shall be deemed to have been made as of the date 
of the enactment of this Act, and as of such date all applicable laws 
shall be applied in all respects as though the actions which the 
Secretary of the Treasury (or the Secretary's delegate) is required to 
take under such subsection had been taken.

SEC. 403. CORRECTIONS OF MORTALITY TABLES.

    (a) In General.--Not later than 6 months after the date of the 
enactment of this Act, the Secretary of the Treasury (or the 
Secretary's delegate) shall amend the regulation relating to 
``Mortality Tables for Determining Present Value Under Defined Benefit 
Pension Plans'' (82 Fed. Reg. 46388 (October 5, 2017)). Under such 
amendment, for valuation dates occurring during or after 2022, such 
mortality improvement rates shall not assume future mortality 
improvements at any age which are greater than .78 percent. The 
Secretary of the Treasury (or delegate) shall by regulation modify the 
.78 percent figure in the preceding sentence as necessary to reflect 
material changes in the overall rate of improvement projected by the 
Social Security Administration.
    (b) Effective Date.--The amendments required under subsection (a) 
shall be deemed to have been made as of the date of the enactment of 
this Act, and as of such date all applicable laws shall be applied in 
all respects as though the actions which the Secretary of the Treasury 
(or the Secretary's delegate) is required to take under such 
subsections had been taken.

SEC. 404. CEASE DOUBLE-INDEXING THE VARIABLE RATE PREMIUM.

    (a) In General.--Clause (ii) of section 4006(a)(3)(E) of the 
Employee Retirement Income Security Act of 1974 (29 U.S.C. 
1306(a)(3)(E)(ii)) is amended by striking ``the applicable dollar 
amount under paragraph (8)'' and inserting ``$38''.
    (b) Conforming Amendment.--Subsection (a) of section 4006 of the 
Employee Retirement Income Security Act of 1974 (29 U.S.C. 1306(a)) is 
amended by striking paragraph (8).
    (c) Technical Amendment.--Clause (i) of section 4006(a)(3)(E) of 
the Employee Retirement Income Security Act of 1974 (29 U.S.C. 
1306(a)(3)(E)) is amended by striking ``subparagraph (H)'' and 
inserting ``subparagraph (I)''.
    (d) Effective Date.--The amendments made by this section shall 
apply to plan years beginning after December 31, 2021.

SEC. 405. ENHANCING RETIREE HEALTH BENEFITS IN PENSION PLANS.

    (a) Extension of Transfers of Excess Pension Assets to Retiree 
Health Accounts.--Paragraph (4) of section 420(b) is amended by 
striking ``December 31, 2025'' and inserting ``December 31, 2031''.
    (b) De Minimis Transfer Rule.--
            (1) In general.--Subsection (e) of section 420 is amended 
        by adding at the end the following new paragraph:
            ``(7) Special rule for de minimis transfers.--
                    ``(A) In general.--In the case of a transfer of an 
                amount which is not more than 1.75 percent of the 
                amount determined under paragraph (2)(A) by a plan 
                which meets the requirements of subparagraph (B), 
                paragraph (2)(B) shall be applied by substituting `110 
                percent' for `125 percent'.
                    ``(B) Two-year lookback requirement.--A plan is 
                described in this subparagraph if, as of any valuation 
                date in each of the 2 plan years immediately preceding 
                the plan year in which the transfer occurs, the amount 
                determined under paragraph (2)(A) with respect to such 
                plan exceeded 110 percent of the sum of the funding 
                target and the target normal cost determined under 
                section 430 for such plan year.''.
            (2) Cost maintenance period.--Subparagraph (D) of section 
        420(c)(3) is amended by striking ``5 taxable years'' and 
        inserting ``5 taxable years (7 taxable years in the case of a 
        transfer to which subsection (e)(7) applies)''.
            (3) Conforming amendments.--
                    (A) Excess pension assets.--Clause (i) of section 
                420(f)(2)(B) is amended--
                            (i) by striking ``In general.--In'' and 
                        inserting ``In general.--
                                    ``(I) Determination.--In'',
                            (ii) by striking ``subsection (e)(2)'' and 
                        inserting ``subsection (e)(2)(B)'', and
                            (iii) by adding at the end the following 
                        new subclause:
                                    ``(II) Special rule for 
                                collectively bargained transfers.--In 
                                determining excess pension assets for 
                                purposes of a collectively bargained 
                                transfer, subsection (e)(7) shall not 
                                apply.''.
                    (B) Minimum cost.--Subclause (I) of section 
                420(f)(2)(D)(i) is amended by striking ``4th year'' and 
                inserting ``4th year (the 6th year in the case of a 
                transfer to which subsection (e)(7) applies)''.
    (c) Amendment of Employee Retirement Income Security Act of 1974.--
            (1) Definitions.--Section 101(e)(3) of the Employee 
        Retirement Income Security Act of 1974 (29 U.S.C. 1021(e)(3)) 
        is amended by striking ``(as in effect on the date of the 
        enactment of the Surface Transportation and Veterans Health 
        Care Choice Improvement Act of 2015)'' and inserting ``(as in 
        effect on the date of the enactment of the Retirement Security 
        and Savings Act of 2021)''.
            (2) Use of assets.--Section 403(c)(1) of such Act (29 
        U.S.C. 1103(c)(1)) is amended by striking ``(as in effect on 
        the date of the enactment of the Surface Transportation and 
        Veterans Health Care Choice Improvement Act of 2015)'' and 
        inserting ``(as in effect on the date of the enactment of the 
        Retirement Security and Savings Act of 2021)''.
            (3) Exemption.--Section 408(b)(13) of such Act (29 U.S.C. 
        1108(b)(13)) is amended--
                    (A) by striking ``January 1, 2026'' and inserting 
                ``January 1, 2032''; and
                    (B) by striking ``(as in effect on the date of the 
                enactment of the Surface Transportation and Veterans 
                Health Care Choice Improvement Act of 2015)'' and 
                inserting ``(as in effect on the date of the enactment 
                of the Retirement Security and Savings Act of 2021)''.
    (d) Effective Date.--The amendments made by this section shall 
apply to transfers made after the date of the enactment of this Act.

       TITLE V--REFORMING PLAN RULES TO HARMONIZE WITH IRA RULES

SEC. 501. ROTH PLAN DISTRIBUTION RULES.

    (a) In General.--Subsection (d) of section 402A is amended by 
adding at the end the following new paragraph:
            ``(5) Mandatory distribution rules not to apply before 
        death.--Notwithstanding sections 403(b)(10) and 457(d)(2), the 
        following provisions shall not apply to any designated Roth 
        account:
                    ``(A) Section 401(a)(9)(A).
                    ``(B) The incidental death benefit requirements of 
                section 401(a).''.
    (b) Effective Date.--
            (1) In general.--Except as provided in paragraph (2), the 
        amendment made by this section shall apply to taxable years 
        beginning after December 31, 2021.
            (2) Special rule.--The amendment made by this section shall 
        not apply to distributions which are required with respect to 
        years beginning before January 1, 2022, but are permitted to be 
        paid on or after such date.

SEC. 502. DISTRIBUTIONS FOR CHARITABLE PURPOSES.

    (a) In General.--Section 402 is amended by adding at the end the 
following new subsection:
    ``(m) Distributions for Charitable Purposes.--
            ``(1) In general.--Gross income for any taxable year shall 
        not include so much of the aggregate amount of qualified 
        charitable distributions made with respect to a taxpayer during 
        such taxable year which does not exceed the applicable amount.
            ``(2) Qualified charitable distribution.--For purposes of 
        this subsection, the term `qualified charitable distribution' 
        means any distribution from an eligible retirement plan 
        described in clause (iii), (iv), (v), or (vi) of section 
        402(c)(8)(B)--
                    ``(A) which is made directly by the plan to an 
                organization described in section 170(b)(1)(A) (other 
                than any organization described in section 509(a)(3) or 
                any fund or account described in section 4966(d)(2)), 
                and
                    ``(B) which is made on or after the date that the 
                individual on whose behalf the distribution is made has 
                attained age 70\1/2\.
        A distribution shall be treated as a qualified charitable 
        distribution only to the extent that the distribution would be 
        includible in gross income without regard to paragraph (1).
            ``(3) Special rules.--
                    ``(A) In general.--Rules similar to the rules of 
                subparagraphs (C) and (E) of section 408(d)(8) shall 
                apply for purposes of this subsection.
                    ``(B) Application of 72.--Rules similar to the 
                rules of section 408(d)(8)(D) shall apply for purposes 
                of this subsection, by taking into account all amounts 
                in the eligible retirement plan to which the taxpayer 
                has a nonforfeitable right in lieu of all amounts in 
                all individual retirement plans of the individual.
            ``(4) Applicable amount.--For purposes of this subsection, 
        the term `applicable amount' means the excess of--
                    ``(A) $100,000, over
                    ``(B) the total amount of any distributions not 
                includible in gross income of the taxpayer for the 
                taxable year by reason of sections 403(b)(16), 
                408(d)(8), and 457(e)(19).''.
    (b) SEPs and SIMPLEs.--Subparagraph (B) of section 408(d)(8) is 
amended by striking ``(other than a plan described in subsection (k) or 
(p))''.
    (c) 403(b) Plans.--Section 403(b), as amended by this Act, is 
further amended by adding at the end the following new paragraph:
            ``(16) Distributions for charitable purposes.--The rules of 
        section 402(m) shall apply to distributions under an annuity 
        contract described in this subsection.''.
    (d) 457(b) Plans.--Subsection (e) of section 457 is amended by 
adding at the end the following new paragraph:
            ``(19) Distributions for charitable purposes.--The rules of 
        section 402(m) shall apply to distributions under an eligible 
        deferred compensation plan established and maintained by an 
        employer described in subsection (e)(1)(A).''.
    (e) Effective Date.--The amendments made by this section shall 
apply to distributions made after December 31, 2021.

SEC. 503. SURVIVING SPOUSE ELECTION TO BE TREATED AS EMPLOYEE.

    (a) In General.--Clause (iv) of section 401(a)(9)(B) is amended--
            (1) by inserting ``or at the election of the surviving 
        spouse,'' after ``begin,'' in subclause (II); and
            (2) by adding at the end the following flush sentence:
                        ``An election described in subclause (II) shall 
                        be made at such time and in such manner as 
                        prescribed by the Secretary, shall include a 
                        timely notice to the plan administrator, and 
                        once made may not be revoked except with the 
                        consent of the Secretary.''.
    (b) Effective Date.--The amendment made by this section shall apply 
to distributions with respect to employees who die after December 31, 
2021.

SEC. 504. ROLLOVERS FROM ROTH IRAS TO PLANS.

    (a) In General.--Subparagraph (B) of section 402A(c)(3) is amended 
by striking ``shall not'' and inserting ``or, in the case of a rollover 
from a Roth IRA, under section 408 shall not''.
    (b) Regulations.--The Secretary of the Treasury (or the Secretary's 
delegate) shall amend the regulations with respect to rollovers from 
Roth IRAs to permit such rollovers to be made to an applicable 
retirement plan (as defined in section 402A(e)(1) of the Internal 
Revenue Code of 1986) in accordance with the amendment made by 
subsection (a).
    (c) Effective Date.--
            (1) In general.--The amendment made by subsection (a) shall 
        apply to distributions made after December 31, 2021.
            (2) Effective date.--The modifications and amendments 
        required under subsection (b) shall be deemed to have been made 
        as of January 1, 2022, and as of such date all applicable laws 
        shall be applied in all respects as though the actions which 
        the Secretary of the Treasury (or the Secretary's delegate) is 
        required to take under such subsection had been taken.

                  TITLE VI--ADMINISTRATIVE PROVISIONS

SEC. 601. 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, 2023.
        In the case of a governmental plan (as defined in section 
        414(d) of the Internal Revenue Code of 1986), this paragraph 
        shall be applied by substituting ``2025'' for ``2023''.
            (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, 2023'', and
                    (B) by striking ``substituting `2024' for `2022'.'' 
                in the flush matter at the end and inserting 
                ``substituting `2025' for `2023'.''.
            (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, 2023''.
                    (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, 
                        2023'', and
                            (ii) by striking ``substituting `2024' for 
                        `2022'.'' in the flush matter at the end and 
                        inserting ``substituting `2025' for `2023'.''.
                    (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, 2023''.
                                 <all>