SAVE UP Act

Bill: 114-hr-5731
Sponsor: full_name: Rep. Crowley, Joseph [D-NY-14]
Introduced: 2016-07-12
Policy area: Taxation
Subjects: Business expenses

Employee benefits and pensions

Executive agency funding and structure

Financial services and investments

Government trust funds

Income tax credits

Income tax deductions

Income tax deferral

Small business

Wages and earnings
Latest action: action_date: 2016-07-12
text: Referred to the House Committee on Ways and Means.

Summaries:
action_date: 2016-07-12
action_desc: Introduced in House
text: <p><b>Secure, Accessible, Valuable, Efficient Universal Pension Accounts Act or the SAVE UP Act </b></p> <p>This bill amends the Internal Revenue Code to establish the SAVE UP Account program to provide tax-exempt retirement accounts to employees who are not otherwise eligible for certain retirement plans. </p> <p>The bill establishes: (1) a board of trustees to create and manage the accounts, (2) a board of governors to establish policies for the investment and management of fund assets, and (3) a trust fund and accounts in the Treasury for the program. </p> <p>An employer must establish an account contribution program if: (1) the employer's aggregate number of employee hours of service during the preceding year was at least 1,600; (2) the employer does not offer a retirement plan to all employees. Government entities and churches are exempt from this requirement. </p> <p>Under the contribution program, employers must: (1) contribute at least 50 cents per hour worked by the employee; and (2) make automatic contributions on behalf of employees who do not opt-out, beginning with 3% of wages and eventually increasing to 5%.</p> <p>The bill sets forth requirements for: (1) determining an employee's share of positive net investment returns, and (2) paying benefits from the accounts in the form of an annuity </p> <p>The bill allows a tax credit for certain small employers who elect to set up contribution programs for their employees. </p> <p>If an employer fails to maintain a required contribution program, the bill disallows the deduction for compensation for services performed by employees of the employer. </p>

tv_txt: I 114th CONGRESS 2d Session H. R. 5731 IN THE HOUSE OF REPRESENTATIVES July 12, 2016 Mr. Crowley introduced the following bill; which was referred to the Committee on Ways and Means A BILL To establish SAVE UP Accounts, and for other purposes.

1. Short title and table of contents (a) Short title This Act may be cited as the Secure, Accessible, Valuable, Efficient Universal Pension Accounts Act or the SAVE UP Act . (b) Table of contents The table of contents for this Act is as follows: Sec. 1. Short title and table of contents. Title I—SAVE UP Accounts Sec. 101. Secure, Accessible, Valuable, Efficient Universal Pension Accounts. Sec. 102. SAVE UP Account contribution programs. Sec. 103. SAVE UP Accounts Fund. Sec. 104. Investment of SAVE UP Account assets. Sec. 105. Benefits in the form of an annuity. Sec. 106. SAVE UP Accounts Governance. Sec. 107. Reporting and Disclosure. Sec. 108. Fiduciary duties under SAVE UP Account contribution programs and SAVE UP Accounts. Sec. 109. SAVE UP Accounts disregarded for purposes of means-tested programs. Title II—Tax treatment of SAVE UP Accounts Sec. 201. Tax treatment of SAVE UP Accounts. Sec. 202. SAVE UP Account credit. Sec. 203. Disallowance of deduction for compensation for certain employers failing to provide SAVE UP Account contribution program. I SAVE UP Accounts 101. Secure, Accessible, Valuable, Efficient Universal Pension Accounts (a) In general There is hereby established the SAVE UP Account program under which the SAVE UP Board of Trustees shall— (1) establish for each eligible employee of an applicable employer a SAVE UP Account, and (2) manage such accounts, and hold amounts in such account in trust, for the exclusive benefit of the individuals on whose behalf such accounts are established. (b) Eligible employee (1) In general For purposes of this section, the term eligible employee means, with respect to any applicable employer, any employee unless such employee is eligible to participate in a plan or arrangement described in section 219(g)(5)(A) of the Internal Revenue Code of 1986. (2) Exception for frozen plan Paragraph (1) shall not apply in the case of a defined benefit plan unless the participant is eligible to receive service-based accruals under such plan. (c) Applicable employer For purposes of this title— (1) In general The term applicable employer means, with respect to any year, any employer— (A) (i) the aggregate number of hours of service of employees of which for months during the preceding calendar year is 1,600 or more, and (ii) which does not make available to all employees a plan or arrangement described in section 219(g)(5) of the Internal Revenue Code of 1986, or (B) which elects the application of this title for any year. (2) Hours of service The SAVE UP Board of Governors, in consultation with the Secretary of Labor, shall prescribe such guidance as may be necessary to determine the hours of service of employees, including with respect to employees who are not compensated on an hourly basis. (3) Government entities and churches The term applicable employer shall not include— (A) a government or entity described in section 414(d) of the Internal Revenue Code of 1986; or (B) a church or a convention or association of churches that is exempt from tax under section 501 of such Code. (4) Aggregation rule All persons treated as a single employer under subsection (b), (c), (m), or (o) of section 414, of the Internal Revenue Code of 1986 shall be treated as a single employer. 102. SAVE UP Account contribution programs (a) In general Each applicable employer shall establish a SAVE UP Account contribution program. (b) SAVE UP Account contribution program (1) In general For purposes of this part, the term SAVE UP Account contribution program means, with respect to any applicable employer, a written arrangement that meets the requirements of paragraphs (2) through (5). (2) Automatic deferral (A) In general The requirements of this paragraph are met if the SAVE UP Account contribution program includes a SAVE UP Account cash or deferred arrangement under which each eligible employee is treated as having elected to have the employer make elective contributions on the employee’s behalf in an amount equal to the applicable percentage of wages (as defined in section 3121(a) without regard to the contribution and benefit base limitation in paragraph (1) thereof). (B) Election out The election treated as having been made under subparagraph (A) shall cease to apply with respect to any employee if such employee makes an affirmative election— (i) to not have such contributions made, or (ii) to make elective contributions under the SAVE UP Account cash or deferred arrangement at a level specified in such affirmative election. (C) SAVE UP Account cash or deferred arrangement For purposes of this subsection, the term SAVE UP Account cash or deferred arrangement means an arrangement under which the eligible employee may elect to have the employer make payments as contributions under the arrangement to the employee’s SAVE UP Account on behalf of the employee, or to the employee directly in cash. (D) Applicable percentage For purposes of this paragraph, the term applicable percentage means, with respect to any employee— (i) 3 percent during the period ending on the last day of the first calendar year which begins after the date on which the first elective contribution described in subparagraph (A) is made with respect to such employee; (ii) 3.5 percent during the first calendar year following the calendar year described in clause (i); (iii) 4 percent during the second calendar year following the calendar year described in clause (i); (iv) 4.5 percent during the third calendar year following the calendar year described in clause (i); and (v) 5 percent during any subsequent calendar year. (3) Nonelective employer contributions The requirements of this paragraph are met if, under the arrangement, the employer, without regard to any election by the employee under paragraph (2), is required to make a contribution to the plan on behalf of each qualifying employee in an amount equal to at least 50 cents per hour worked by the employee. Such contribution shall not be counted as partial payment of an hourly wage. An employer shall not fail to meet the requirements of this paragraph solely by reason of making contributions on behalf of employees at a rate greater than 50 cents per hour, but only if such contributions are made at the same rate for all qualifying employees of the employer. (4) Notices The requirements of this paragraph shall not be treated as met with respect to any year unless the employer notifies each employee eligible to participate, within a reasonable period of time before the 30th day before the beginning of such year (and, for the first year the employee is so eligible, the 30th day before the first day such employee is so eligible), of— (A) the elective contributions that may be elected or treated as elected under paragraph (2), and (B) the opportunity to elect under paragraph (2)(B)(i) to not make elective contributions. (5) Treatment of contributions All contributions with respect to an employee made under a SAVE UP Account contribution program shall be nonforfeitable and shall be paid over to the SAVE UP Accounts Fund for crediting to the employee’s SAVE UP Account under section 103. (6) Wage growth adjustment (A) In general In the case of calendar years beginning after 2016, the 50 cent amount in paragraph (3) shall be increased by the average annual wage growth adjustment. (B) Average annual wage growth adjustment For purposes of subparagraph (A), the average annual wage growth adjustment for any calendar year is the percentage (if any) by which— (i) the national average wage index (as defined in section 219(k)(1) of the Social Security Act) for the preceding calendar year, exceeds (ii) the national average wage index (as so defined) for 2015. (C) Rounding Adjustments under this paragraph shall be rounded to the nearest cent. 103. SAVE UP Accounts Fund (a) Establishment of Fund (1) Establishment There is established in the Treasury of the United States a trust fund to be known as the SAVE UP Accounts Fund . (2) Amounts in Fund The SAVE UP Accounts Fund shall consist of amounts paid to SAVE UP Accounts pursuant to a SAVE UP Account contribution programs, increased by the total net earnings from investments of sums in the Fund attributable to such deposited amounts, and reduced by the total net losses from investments of such sums. (3) Budget authority; appropriation This title constitutes budget authority in advance of appropriations Acts and represents the obligation of the SAVE UP Board of Trustees to provide for the payment of amounts provided under this title. The amounts held in the SAVE UP Accounts Fund are appropriated and shall remain available without fiscal year limitation. (b) Accumulation Account There is established in the SAVE UP Accounts Fund a separate account to be known as the Accumulations Account consisting of such amounts described in subsection (a)(2), less amounts credited to the Annuity Account. (c) Annuity Account There is established in the SAVE UP Accounts Fund a separate account to be known as the Annuity Account to which the aggregate amounts credited to a participant’s SAVE UP Account under section 105 shall be transferred at such time as the participant elects to start receiving benefit payments under section 106. (d) Reserve Account (1) In general There is established in the SAVE UP Accounts Fund a separate account to be known as the Reserve Account which shall represent the amounts described in subsection (a)(2), less amounts credited to SAVE UP Accounts under section 104(c). (2) Use of Reserve Account The Board of Governors shall— (A) use Reserve Account amounts that are allocable to the investment of amounts in the Accumulation Account to make up any shortfall in the crediting individuals accounts under section 104(c), and (B) use Reserve Account amounts that are allocable to the investment of amounts in the Annuity Account to make up any shortfall in the payment of annuity benefits under section 105. (e) Availability The sums in the SAVE UP Accounts Fund are appropriated and shall remain available without fiscal year limitation— (1) to invest under section 104; (2) to provide for the payment of benefits in accordance with section 105; and (3) to pay the administrative expenses incurred with respect to management of SAVE UP Accounts and such Funds. (f) Limitations on use of amounts in the Fund (1) In general Amounts in the SAVE UP Accounts Fund credited to an individual’s SAVE UP Account are nonforfeitable and may not be used for, or diverted to, purposes other than for the exclusive benefit of the individual or the individual’s beneficiaries under this title. (2) Assignments Amounts in the SAVE UP Accounts Fund credited to an individual’s SAVE UP Account may not be assigned or alienated and are not subject to execution, levy, attachment, garnishment, or other legal process. 104. Investment of SAVE UP Account assets (a) In general Amounts in the Accumulation Account of the SAVE UP Accounts Trust Fund shall be invested by each SAVE UP Board of Trustees under rules and guidance established by the SAVE UP Board of Governors. Each SAVE UP Board of Trustees shall be responsible for investing an amount (determined by the Board of Governors quarterly) that is proportional to the credited balances of SAVE UP Accounts within such Board’s jurisdiction. (b) Investment returns (1) Daily The SAVE UP Board of Governors shall determine daily the net investment return of the entire SAVE UP Accounts Trust Fund. (2) Annual audit Not less than annually, the SAVE UP Board of Governors shall, through an independent audit of each SAVE UP Board of Trustee’s investments, determine the net investment return of the entire SAVE UP Accounts Trust Fund. (c) Crediting of accounts and allocation of positive investment returns (1) In general Each SAVE UP Board of Trustees shall separately account for each individual’s SAVE UP Account within its jurisdiction and shall provide for crediting of— (A) amounts contributed with respect to the individual’s account under section 102, and (B) in the case of any period for which the SAVE UP Accounts Trust Fund is determined by the SAVE UP Board of Governors to have had an annualized positive net investment return, an amount equal to the individual’s allocable share of such investment return. (2) Allocation of investment return For purposes of paragraph (1), an individual’s allocable share of investment returns shall be an amount equal to the return such individual’s SAVE UP Account would have experienced had such return (annualized and expressed as a percentage) been equal to the lesser of— (A) 6 percent, or (B) the SAVE UP Accounts Trust Fund annualized investment return (expressed as a percentage) determined by the SAVE UP Board of Governors. 105. Benefits in the form of an annuity (a) In general A SAVE UP Account shall pay benefits in the form of an annuity in accordance with subsection (b). The amount of such benefits shall be based on the amounts credited to the individual’s SAVE UP Account and the form of distribution the individual elects. Notwithstanding the preceding sentence, the amount of an annuity may be adjusted to reflect the experience of the Fund as necessary to protect the financial integrity of the Fund, except that annuity payments for those in pay status shall not be reduced more than 5 percent per year unless the Fund is faced with a significant financial hardship and the SAVE UP Board of Governors has approved the reduction. (b) Annuity SAVE UP Accounts shall pay benefits in accordance with one of the following: (1) In the case of a participant who does not die before the annuity starting date, the benefit payable to such participant shall be provided in the form of a qualified joint and survivor annuity (as defined in section 205(d)(1) of the Employee Retirement Income Security Act of 1974 ( 29 U.S.C. 1055(d)(1) )). (2) In the case of a participant who dies before the annuity starting date and who has a surviving spouse, a qualified preretirement survivor annuity (as defined in section 205(d)(2) of the Employee Retirement Income Security Act of 1974 ( 29 U.S.C. 1055(d)(2) )) shall be provided to the surviving spouse of such participant. (3) In lieu of a qualified joint and survivor annuity form of benefit or the qualified preretirement survivor annuity form of benefit (or both), a participant may elect to receive a distribution described in subsection (f)(3) if one of the following conditions are met: (A) (i) The spouse of the participant consents in writing to the election. (ii) Such election designates a beneficiary (or form of benefits) which may not be changed without spousal consent (or the consent of the spouse expressly permits designations by the participant without any requirement of further consent by the spouse). (iii) The spouse’s consent acknowledges the effect of such election and is witnessed by a plan representative or a notary public. (B) It is established to the satisfaction of a Fund representative that the consent required under clause (i) cannot be obtained because there is no spouse, because the spouse cannot be located, or because of such other circumstances as the SAVE UP Board of Governors may by regulations prescribe. The consent of a spouse (or establishment that the consent of a spouse cannot be obtained) under this subparagraph shall be effective only with respect to such spouse. (c) Commencement of benefit payments A participant may elect the time to start receiving benefit payments under this section, except that a participant— (1) may not elect to receive benefit payments before reaching the age of 62; and (2) must begin receiving benefit payments before the age of 70. (d) Notice Each Fund shall provide to each participant, within a reasonable period of time before the annuity starting date, a written explanation substantially similar to that required by section 205(c)(3) of the Employee Retirement Income Security Act of 1974 ( 29 U.S.C. 1055(c)(3) ). (e) Assignment or alienation of fund benefits Benefits under a SAVE UP Account shall be subject to section 206(d) of the Employee Retirement Income Security Act of 1974 ( 29 U.S.C. 1056(d) ). (f) Methods for Providing Annuitized Benefit Payments (1) In general The SAVE UP Board of Trustees shall establish and maintain mechanisms for adequately securing the payment of annuity benefits under this section. The SAVE UP Board of Trustees shall include a written description of such mechanisms in the investment and lifetime income policy statements required to be disclosed to participants. (2) Specific goals The mechanisms described in paragraph (1) shall ensure that— (A) each participant receives a stream of income for life; (B) each participant and beneficiary has an opportunity to be protected against longevity risk; and (C) volatility in benefit levels is minimized for participants and beneficiaries in pay status and those approaching pay status. (3) Self-annuitization (A) In general Notwithstanding any other provision of law, a SAVE UP Account may self-annuitize if the SAVE UP Accounts Fund meets such requirements as the SAVE UP Board of Governors establishes as necessary to protect participants and beneficiaries. (B) Duty to address emerging issues The SAVE UP Board of Governors shall, periodically and in accordance with established procedures, update the funding requirements promulgated under this paragraph in response to changing economic and business conditions to the extent necessary to carry out the purposes of this Act. 106. SAVE UP Accounts Governance (a) SAVE UP Board of Governors (1) Establishment There is established in the executive branch of the Government a SAVE UP Accounts Board of Governors. (2) Duties The Board of Governors shall— (A) administer the provisions of this title, except with respect to matters relating to SAVE UP Account contribution programs maintained by employers pursuant to section 102 and any duties charged to the SAVE UP Boards of Trustees; (B) establish policies for the investment and management of SAVE UP Account assets, and for the management and operation of SAVE UP Account annuities under this title, which shall provide for— (i) prudent investments suitable for accumulating funds for payment of retirement income; (ii) investment targets; (iii) sound management practices; (iv) low administrative costs; (v) low investment costs; and (vi) investments in index funds; (C) review the performance of SAVE UP Account Fund investments; and (D) review the management and operation of annuities. (3) Composition The SAVE UP Board of Governors shall be composed of— (A) 5 members, each of whom must be a chairman of a regional SAVE UP Board of Trustees, and (B) 6 members appointed by the President, of whom the President shall appoint at least one resident from each of the 5 jurisdictions of the regional SAVE UP Board of Trustees. (4) Chairman The President shall appoint one of such members as chairman of the SAVE UP Board of Governors. Such appointment shall be made by and with the advice and consent of the Senate. (5) Length of appointments Each member appointed by the President under paragraph (3)(B) shall be appointed for a term of 6 years, except that of the first such members taking office— (A) the chairman member shall serve a term of 7 years, (B) 1 member shall serve a term of 2 years, (C) 1 member shall serve a term of 3 years, (D) 1 member shall serve a term of 4 years, (E) 1 member shall serve a term of 5 years, and (F) 1 member shall serve a term of 6 years. No individual may serve more than 2 terms as a member of the Board. (b) Regional SAVE UP Boards of Trustees (1) In general There is established in the executive branch of the Government 5 regional SAVE UP Boards of Trustees, the jurisdiction of which shall be, to the extent practicable, apportioned by the Secretary of the Treasury geographically and to approximate an equal distribution of the United States population. (2) Duties The SAVE UP Board of Trustees for each region shall oversee the management and administration of SAVE UP Accounts of the population within its respective jurisdiction, including— (A) with respect to such population, management and investment of SAVE UP Account Trust Fund assets, payment of annuities, and compliance with reporting and disclosure requirements, and (B) selection of the administrator, attorney, internal auditor, record keeper, investment consulting team, and such other staff as may be necessary to carry out the duties of the SAVE UP Board of Trustees. Any reference to a SAVE UP Board of Trustees in this title shall be construed to mean the regional SAVE UP Board of Trustees with respect to the SAVE UP Accounts within its jurisdiction, where such construction is necessary to carry out provisions of this title. (3) Composition Each SAVE UP Board of Trustees shall be composed of 7 members, of whom— (A) 2 shall be appointed by the Federal Reserve Board, (B) 1 shall be appointed by the Commissioner of the Securities and Exchange Commission, (C) 1 shall be appointed by the Speaker of the House of Representatives, (D) 1 shall be appointed by the Minority Leader of the House of Representatives, (E) 1 shall be appointed by the Majority Leader of the Senate, and (F) 1 shall be appointed by the Minority Leader of the Senate. (4) Chairman For each Board of Trustees, the President shall designate one of the trustees appointed under paragraph (3) as chairman, and, in the case of the first such trustees taking office, shall designate the term of such trustee pursuant to paragraph (5). (5) Vice chairman Each Board of Trustees shall designate one of the trustees appointed under paragraph (3) as vice chairman. (6) Length of appointments (A) In general Each trustee of the Board appointed under paragraph (3) shall be appointed for a term of 5 years, except that of the first such trustees taking office— (i) the chairman trustee shall be determined under subparagraph (B), (ii) 1 trustee shall serve a term of 5 years, (iii) 1 trustee shall serve a term of 4 years, (iv) 1 trustee shall serve a term of 3 years, (v) the vice chairman trustee shall serve a term of 2 years, (vi) 1 trustee shall serve for a term of 2 years, and (vii) 1 trustee shall serve for a term of 1 year. Other than the chairman and vice chairman trustee, the terms of the first trustees taking office shall correspond with the individual who appointed the trustee under paragraph (3) and shall be ordered from the longest term to the shortest term on the basis of the order in which the individuals are listed in such paragraph. (B) Chairman terms For purposes of subparagraph (A)(i), of the trustees appointed as chairman of a Board of Trustees— (i) 1 chairman shall serve a term of 6 years, (ii) 2 chairmen shall serve a term of 5 years, (iii) 1 chairman shall serve a term of 4 years, and (iv) 1 chairman shall serve a term of 3 years. (C) Term limits No individual may be appointed to more than 2 terms as a trustee of the SAVE UP Board of Trustees. (c) Vacancies (1) In general A vacancy on the Boards established under this section shall be filled in the manner in which the original appointment was made and shall be subject to any conditions that applied with respect to the original appointment. (2) Completion of term An individual chosen to fill a vacancy under subparagraph (A) shall be appointed for the unexpired term of the member replaced. (d) Membership requirements Members and trustees appointed under this section shall have substantial experience, training, and expertise in the management of financial investments and pension benefit plans. (e) Compensation (1) In general Each such member or trustee who is not an officer or employee of the Federal Government shall be compensated at the daily rate of basic pay for level II of the Executive Schedule for each day during which such member is engaged in performing a function of the Board. (2) Expenses Each such member or trustee shall be paid travel, per diem, and other necessary expenses under subchapter I of chapter 57 of title 5, United States Code, while traveling away from such member's home or regular place of business in the performance of the duties of the Board. (f) Discharge of responsibilities The members and trustees shall discharge their responsibilities solely in the interest of the participants in SAVE UP Accounts and their beneficiaries under this part. (g) Annual independent audit The SAVE UP Board of Governors shall annually engage an independent qualified public accountant to audit the activities of the Board of Governors and each Regional Board of Trustees. 107. Reporting and Disclosure (a) Annual statement The SAVE UP Board of Trustees shall provide each participant in the Fund an annual statement of— (1) the estimated amount of the monthly benefit which the participant or beneficiary is projected to receive from the Fund, in the form of the default benefit described in the plan in accordance with the bill; (2) an explanation, written in a manner calculated to be understood by the average plan participant, that includes interest and mortality assumptions used in calculating the estimate and a statement that actual benefits may be materially different from such estimate; (3) a disclosure of SAVE UP Accounts Fund fees and performance that is substantially similar to the disclosures required of individual account plans under the Employee Retirement Income Security Act of 1974; (4) any other disclosures, including projected benefit estimates, that the SAVE UP Board of Trustees determines appropriate; and (5) such other disclosures as may be required by the Board of Governors. (b) Summary plan description The SAVE UP Board of Trustees shall provide participants a summary plan description (as described in section 102 of the Employee Retirement Income Security Act ( 29 U.S.C. 1022 )) as required by section 104(b) of the Employee Retirement Income Security Act ( 29 U.S.C. 1024(b) ). (c) Annual reports The SAVE UP Board of Trustees shall file with the Secretary of Labor periodic reports in accordance with regulations promulgated by the SAVE UP Board of Governors. (d) Additional requirements The SAVE UP Board of Trustees shall be subject to sections 106 and 107 of the Employee Retirement Income Security Act of 1974 ( 29 U.S.C. 1026 , 1027). 108. Fiduciary duties under SAVE UP Account contribution programs and SAVE UP Accounts (a) Limitation on fiduciary duties under the SAVE UP Account contribution programs of an employer (1) Timely payment of contributions For purposes of the Employee Retirement Income Security Act of 1974, the employer’s fiduciary duties under a SAVE UP Account contribution program established under section 102 shall be limited to those duties related to the timely payment in full to the individual’s SAVE UP Account of elective contributions made on behalf of employees as required under section 102(b)(2) and such employer contributions as may be provided for under the program pursuant to section 102(b)(3). (2) Rule of construction Nothing in this Act shall be construed to impose on any employer with respect to any employee who is a participant in the employer’s SAVE UP Account contribution program any fiduciary duty with respect to the investment or distribution of assets held under the employee’s SAVE UP Account. (b) Fiduciary duties of Board of Governors and Trustees For purposes of the provisions of part 4 of subtitle B of title I of the Employee Retirement Income Security Act of 1974, and the provisions of part 5 of such subtitle as they relate to the enforcement of the provisions of such part 4, each member of the SAVE UP Board of Governors, each trustee of a SAVE UP Board of Trustees, and any person who has or exercises discretionary authority or discretionary control over the management or disposition of the SAVE UP Accounts Fund, and amounts held to the credit of SAVE UP Accounts, or the crediting of assets to SAVE UP Accounts, shall be included within the meaning of fiduciary under section 3(21)(A) of such Act. 109. SAVE UP Accounts disregarded for purposes of means-tested programs Notwithstanding any other provision of Federal law, any amount contributed by or on behalf of an individual pursuant to a SAVE UP Account contribution program, or credited to an individual’s SAVE UP Account under this title, shall not be taken into account in determining any individual’s or household’s financial eligibility for, or amount of, any benefit or service, paid for in whole or in part with Federal funds. II Tax treatment of SAVE UP Accounts 201. Tax treatment of SAVE UP Accounts (a) In general Subpart A of part I of subchapter D of chapter 1 of the Internal Revenue Code of 1986 is amended by inserting after section 408A the following new section: 408B. Tax treatment of SAVE UP Accounts (a) In general For purposes of this title, except as otherwise provided in this section— (1) the SAVE UP Accounts Fund shall be treated as a trust described in section 401(a) which is exempt from taxation under section 501(a) and a SAVE UP Account shall be treated as a defined contribution plan which includes such a trust, (2) any contribution to, or distribution from, the SAVE UP Accounts Fund under a SAVE UP Account contribution program shall be treated in the same manner as contributions to or distributions from such a trust, and (3) contributions to a SAVE UP Account under a SAVE UP Account contribution program shall not be treated as distributed or made available to the employee or as contributions made by the employee merely because the employee has, under such program, an election whether the contribution will be made to the trust or received by the employee in cash. (b) Nondiscrimination requirements A SAVE UP Account contribution program is not subject to the participation and nondiscrimination requirements applicable to arrangements described in section 401(k) or to matching contributions (as described in section 401(m)). (c) Rollover from SAVE UP Account prohibited An eligible rollover distribution (as defined in section 402(c)(4)) shall not include any amount distributed from a SAVE UP Account. (d) SAVE UP Account loans (1) Limitations Section 72(p)(2)(A) shall only apply with respect to a SAVE UP Account to the extent that any loan (when added to the outstanding balance of all other loans from such plan) does not exceed the lesser of— (A) $2,500, or (B) the total nonforfeitable amounts credited to the individual’s SAVE UP Account. (2) Repayment A loan from a SAVE UP Account shall not fail to be treated as a loan described in section 72(p)(2)(B) (relating to requirement that loan be repayable in 5 years) solely because the loan terms allow additional time (not to exceed an aggregate of 1 year) for repayment to account for any periods of unemployment. (e) Definitions For purposes of this section, the terms SAVE UP Accounts Fund , SAVE UP Account , and SAVE UP Account contribution program shall have the respective meanings as when used in title I of the SAVE UP Act . . (b) Limitation on exclusion for elective deferrals Paragraph (3) of section 402(g) of such Code is amended by striking and at the end of subparagraph (C), by striking the period at the end of subparagraph (D) and inserting , and , and by adding at the end the following new subparagraph: (E) any elective employer contribution under a SAVE UP Account contribution program (as defined in section 408B). . (c) Clerical amendment The table of sections for subpart A of part I of subchapter D of chapter 1 of such Code is amended by inserting after the item relating to section 409A the following new section: 408C. Tax treatment of SAVE UP Accounts. . (d) Effective date The amendments made by this section shall apply to taxable years beginning after the date of the enactment of this Act. 202. SAVE UP Account credit (a) In general Subpart D of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 is amended by adding at the end the following new section: 45S. SAVE UP Account credit (a) In general For purposes of section 38, in the case of an eligible small employer that elects the application of this section, the SAVE UP Account credit determined under this section for any taxable year is an amount equal to the lesser of— (1) the amount of nonelective employer contributions made by the employer for the taxable year with respect to employees under section 102(b)(3) of the Secure, Accessible, Valuable, Efficient Universal Pension Accounts Act , or (2) $10,400. (b) Eligible small employer For purposes of this section, the term eligible small employer means any person the gross receipts of which for the preceding taxable year did not exceed $5,000,000. (c) Limitation A taxpayer may elect the application of the section with respect to not more than 5 taxable years. (d) Special rules (1) Controlled groups All members of the same controlled group of corporations (within the meaning of section 52(a)) and all persons under common control (within the meaning of section 52(b)) shall be treated as 1 person for purposes of this section. (2) Disallowance of deduction No deduction shall be allowed for that portion of the nonelective employer contributions made for the taxable year which is equal to the credit determined under subsection (a). . (b) Credit made part of general business credit Section 38(b) of such Code is amended by striking plus at the end of paragraph (35), by striking the period at the end of paragraph (36) and inserting , plus , and by adding at the end the following new paragraph: (37) the SAVE UP Account credit determined under section 45S(a). . (c) Clerical amendment The table of sections for subpart D of part IV of subchapter A of chapter 1 of such Code is amended by adding at the end the following new section: Sec. 45S. SAVE UP Account credit. . (d) Effective date The amendments made by this section shall apply to taxable years beginning after December 31, 2015. 203. Disallowance of deduction for compensation for certain employers failing to provide SAVE UP Account contribution program (a) In general Section 162 of the Internal Revenue Code of 1986 is amended by redesignating subsection (q) as subsection (r) and by inserting after subsection (p) the following new subsection: (q) Failure To provide SAVE UP Account contribution program (1) In general In the case of an applicable employer who fails to maintain a SAVE UP Account contribution program for any calendar year beginning during the taxable year, no deduction shall be allowed under this chapter for any remuneration made by the employer for services performed by employees of the employer. (2) Applicable employer (A) In general For purposes of this subsection, the term applicable employer means, with respect to any calendar year, any employer which is an applicable employer described in section 101(c)(1)(A) of the Secure, Accessible, Valuable, Efficient Universal Pension Accounts Act . (B) Aggregation rule All persons treated as a single employer under subsection (a) or (b) of section 52, or subsection (m) or (o) of section 414, of the Internal Revenue Code of 1986 shall be treated as a single employer for purposes of this paragraph. (3) Waiver The Secretary may waive the application of paragraph (1) with respect to a taxpayer on a showing by the taxpayer that there was reasonable cause for the failure and that the taxpayer acted in good faith. . (b) Effective date The amendments made by this section shall apply to taxable years beginning after December 31, 2015.