,i  #aac? ,,congress  #b;d ,session  ,h4
 ,r4 #ehge  ,,9 ,,! ,,h\se ,,(          
,,repres5tatives  ,decemb] #aa1 #bjad   
,mr4 ,k9d 7= himself & ,mr4 ,rei*]t7    
introduc$ ! foll[+ bill2 :i* 0 ref]r$ to
 ! ,committee on ,ways & ,means1 & 9    
addition to ! ,committee on ,education &
 ! ,work=ce1 = a p]iod to be subsequ5tly
 det]m9$ by ! ,speak]1 9 ea* case =     
consid]ation ( su* provisions z fall )9 
! jurisdiction ( ! committee conc]n$  ,a
 ,,bill  ,to am5d ! ,int]nal ,rev5ue    
,code ( #aihf to enc\rage retirem5t     
sav+s by modify+ requirem5ts ) respect  
to employ]-e/abli%$ ,i,r,as1 & = o!r    
purposes4  #a4 ,%ort title2 table (     
cont5ts  7a7 ,%ort title ,?is ,act may  
be cit$ z ! ,small ,bus9esses ,add      
,value = ,employees ,act ( #bjad or !   
,,save ,act ( #bjad4  7b7 ,table (      
cont5ts ,! table ( cont5ts = ?is ,act is
 z foll[s3  ,sec4 #a4 ,%ort title2 table
 ( cont5ts4 ,sec4 #b4 ,elim9ation (     
re/riction on ,,simple ,,ira rollov]s4  
,sec4 #c4 ,all[+ mid-ye> ,,simple ,,ira 

plan t]m9ation4 ,sec4 #d4 ,elim9ation ( 
high] p5alty on e>ly ,,simple ,,ira     
di/ributions4 ,sec4 #e4 ,increase 9     
contributions all[$ = ,,simple ,,ira4   
,sec4 #f4 ,,simple #dja7k7 p>ity =      
additional nonelective employ]          
contributions4 ,sec4 #g4 ,automatic     
def]ral ,i,r,as4 ,sec4 #h4 ,modification
 ( automatic enrollm5t safe h>bor4 ,sec4
 #i4 ,secure def]ral arrangem5ts4 ,sec4 
#aj4 ,cr$it = employ]s ) respect to     
modifi$ safe h>bor requirem5ts4 ,sec4   
#aa4 ,modification ( regulations4 ,sec4 
#ab4 ,limit$ transf] ( unus$ balance 9  
flexible sp5d+ arrangem5t4 ,sec4 #ac4   
,prior ye>s comp5sation tak5 into acc\nt
 9 det]m9+ maximum retirem5t sav+s      
d$uction4 ,sec4 #ad4 ,exp&+ small       
employ] p5sion plan />tup co/ cr$it4    
,sec4 #ae4 ,f9ancial education4 ,sec4   
#af4 ,small employ] plans4 ,sec4 #ag4   
,modification ( ,,erisa rules relat+ to 
multiple employ] def9$ contribution     
plans4 ,sec4 #ah4 ,cl>ification (       
treatm5t ( individual retirem5t plans ) 

payroll d$uction4 ,sec4 #ai4 ,disclosure
 reg>d+ lifetime income4 ,sec4 #bj4     
,lifetime income safe h>bor4  #b4       
,elim9ation ( re/riction on ,,simple    
,,ira rollov]s  7a7 ,9 g5]al ,p>agraph  
7#c7 ( section #djh7;d7 ( ! ,int]nal    
,rev5ue ,code ( #aihf 7relat+ to rollov]
 contribution7 is am5d$ by /rik+        
subp>agraph 7,g74  7b7 ,effective date  
,! am5dm5t made by ?is section %all     
apply to di/ributions 9 taxable ye>s    
beg9n+ aft] ! date ( ! enactm5t ( ?is   
,act4  #c4 ,all[+ mid-ye> ,,simple ,,ira
 plan t]m9ation  7a7 ,9 g5]al           
,subsection 7p7 ( section #djh ( !      
,int]nal ,rev5ue ,code ( #aihf is am5d$ 
by add+ at ! end ! foll[+ new p>agraph3 
7#aa7 ,special rules relat+ to mid-ye>  
t]m9ation  7,a7 ,9 g5]al ,an employ] may
 elect to t]m9ate 79 su* =m & mann] z ! 
,secret>y may provide7 ! qualifi$ sal>y 
r$uction arrangem5t ( ! employ] at any  
"t dur+ ! ye>4  7,b7 ,proration &       
application ( qualifi$ plan limitation  
,9 ! case ( a ye> dur+ :i* an employ]   

t]m9ates a qualifi$ sal>y r$uction      
arrangem5t be=e ! end ( su* ye>--  7i7 !
 applicable doll> am\nt det]m9$ "u      
p>agraph 7#b77;,e7 = su* ye> & !        
applicable doll> am\nt det]m9$ "u       
section #dad7v77#b77;,b77ii7 = su* ye>  
%all bo? be prorat$ to ! date ( su*     
t]m9ation1  7ii7 = purposes ( det]m9+ ! 
comp5sation ( an employee = su*         
arrangem5t = su* ye>1 ! ye> ( su*       
t]m9ation %all be treat$ z end+ on !    
date ( su* t]m9ation1 &  7iii7          
subp>agraph 7,d7 ( p>agraph 7#b7 %all n 
apply ) respect to a qualifi$ plan      
ma9ta9$ 9 su* ye> only aft] ! date ( su*
 t]m9ation4  7,c7 ,mat*+ contribution   
,t]m9ation ( an arrangem5t "u           
subp>agraph 7,a7 %all n be con/ru$ to   
modify ! requirem5t ( subp>agraph       
7,a77iii7 7) respect to any elective    
employ] contributions7 or 7,b7 7)       
respect to nonelective contributions7 ( 
p>agraph 7#b7 made by ! employ] on      
behalf ( an employee dur+ ! portion (   
su* ye> ! qualifi$ sal>y r$uction       

arrangem5t is 9 effect4  4  7b7         
,effective date ,! am5dm5ts made by ?is 
section %all apply to ye>s beg9n+ aft] !
 date ( ! enactm5t ( ?is ,act4  #d4     
,elim9ation ( high] p5alty on e>ly      
,,simple ,,ira di/ributions  7a7 ,9     
g5]al ,subsection 7t7 ( section #gb ( ! 
,int]nal ,rev5ue ,code ( #aihf 7relat+  
to #aj-p]c5t additional tax on e>ly     
di/ributions f qualifi$ retirem5t plans7
 is am5d$ by /rik+ p>agraph 7#f74  7b7  
,effective date ,! am5dm5t made by ?is  
section %all apply to di/ributions 9    
taxable ye>s beg9n+ aft] ! date ( !     
enactm5t ( ?is ,act4  #e4 ,increase 9   
contributions all[$ = ,,simple ,,ira    
7a7 ,additional nonelective employ]     
contributions all[$  7#a7 ,9 g5]al      
,subp>agraph 7,a7 ( section #djh7p77#b7 
( ! ,int]nal ,rev5ue ,code ( #aihf      
7relat+ to qualifi$ sal>y r$uction      
arrangem5t7 is am5d$ by /rik+ & at ! end
 ( clause 7iii71 by r$esignat+ clause   
7iv7 z clause 7v71 & by ins]t+ aft]     
clause 7iii7 ! foll[+ new clause3  7iv7 

! employ] may make1 9 addition to any   
o!r contribution "u ?is p>agraph1       
nonelective contributions :i* meet !    
requirem5ts ( subp>agraph 7,f71 &  4    
7#b7 ,requirem5ts relat+ to additional  
nonelective contributions ,p>agraph 7#b7
 ( section #djh7p7 ( su* ,code is am5d$ 
by add+ at ! end ! foll[+ new           
subp>agraph3  7,f7 ,requirem5ts relat+  
to additional nonelective contributions 
"u subp>agraph 7,a77iv7  7i7 ,9 g5]al   
,nonelective contributions meet !       
requirem5ts ( ?is subp>agraph if--  7,i7
 su* contributions d n exce$ m ?an #aj  
p]c5t ( comp5sation 7subject to !       
limitation describ$ 9 subp>agraph       
7,b77ii77 = ea* employee :o is eligible 
to p>ticipate 9 ! arrangem5t & :o has at
 lea/ #e1jjj ( comp5sation f ! employ] =
 ! ye>1 &  7,,ii7 su* contributions are 
made ei!r z a uni=m p]c5tage (          
comp5sation or a uni=m doll> am\nt = all
 p>ticipants4  7ii7 ,p]mitt$ disp>ity   
rules n applicable ,section #dja7l7 %all
 n apply = purposes ( det]m9+ :e!r !    

requirem5ts ( clause 7i7 are met4  4    
7#c7 ,con=m+ am5dm5t ,clause 7v7 (      
section #djh7p77#b77;,a7 ( su* ,code1 z 
r$esignat$ by ?is section1 is am5d$ by  
/rik+ clause 7i7 or 7iii7 & ins]t+      
clause 7i71 7iii71 or 7iv74  7b7        
,increase 9 elective contribution       
limitation ,subp>agraph 7,e7 ( section  
#djh7p77#b7 is am5d$ to read z foll[s3  
7,e7 ,applicable doll> am\nt ,= purposes
 ( subp>agraph 7,a77ii71 ! applicable   
doll> am\nt %all be ! applicable doll>  
am\nt 9 effect "u section #djb7;g77#a74 
4  7c7 ,,simple ,,ira subject to def9$  
contribution plan limitation ,subsection
 7p7 ( section #djh ( su* ,code1 z am5d$
 by section #c1 is am5d$ by add+ at !   
end ! foll[+ new p>agraph3  7#ab7       
,subject to def9$ contribution plan     
limitation ,an arrangem5t %all n be     
treat$ z a qualifi$ sal>y r$uction      
arrangem5t = any ye> if contributions ) 
respect to any employee = ! ye> exce$ ! 
limitation ( p>agraph 7#a7 ( section    
#dae7;c7 7relat+ to limitation = def9$  

contribution plans74  4  7d7 ,effective 
date ,! am5dm5ts made by ?is section    
%all apply to contributions = taxable   
ye>s beg9n+ aft] ,decemb] #ca1 #bjae4   
#f4 ,,simple #dja7k7 p>ity = additional 
nonelective employ] contributions  7a7  
,9 g5]al ,subp>agraph 7,b7 ( section    
#dja7k77#aa7 ( su* ,code 7relat+ to     
contribution requirem5ts7 is am5d$ by   
add+ at ! end ! foll[+ new clause3  7iv7
 ,special rule = additional nonelective 
employ] contributions ,an arrangem5t    
%all n be treat$ z fail+ to meet !      
requirem5ts ( ?is subp>agraph m]ely     
because "u su* arrangem5t ! employ]     
makes1 9 addition to any o!r            
contribution "u ?is subp>agraph1        
nonelective contributions ( n m ?an #aj 
p]c5t ( comp5sation = ea* employee :o is
 eligible to p>ticipate 9 ! arrangem5t &
 :o has at lea/ #e1jjj ( comp5sation f !
 employ] = ! ye>4  4  7b7 ,effective    
date ,! am5dm5t made by ?is section %all
 apply to plan ye>s beg9n+ aft] ,decemb]
 #ca1 #bjae4  #g4 ,automatic def]ral    

,i,r,as  7a7 ,9 g5]al ,subp>t ,a ( "p ,i
 ( sub*apt] ,d ( *apt] #a ( ! ,int]nal  
,rev5ue ,code ( #aihf 7relat+ to p5sion1
 pr(it-%>+1 /ock bonus plans1 etc47 is  
am5d$ by ins]t+ aft] section #djh;,a !  
foll[+ new section3  #djh;,b4 ,automatic
 def]ral ,i,r,as  7a7 ,9 g5]al ,an      
automatic def]ral ,,ira %all be treat$ =
 purposes ( ?is title 9 ! same mann] z  
an individual retirem5t plan4 ,an       
automatic def]ral ,,ira may also be     
treat$ z a ,ro? ,,ira = purposes ( ?is  
title if x meets ! requirem5ts ( section
 #djh;,a4  7b7 ,automatic def]ral ,,ira 
,= purposes ( ?is section1 ! t]m        
automatic def]ral ,,ira means an        
individual retirem5t plan 7z def9$ 9    
section #ggja7;a77#cg77 ) respect to :i*
 contributions are made "u an arrangem5t
 :i* satisfies ! requirem5ts ( p>agraphs
 7#a7 ?r\gh 7#d7 ( subsection 7c74  7c7 
,automatic def]ral ,,ira arrangem5ts    
7#a7 ,enrollm5t  7,a7 ,9 g5]al ,!       
requirem5ts ( ?is p>agraph are met if   
ea* employee eligible to p>ticipate 9 ! 

arrangem5t is treat$ z hav+ elect$ to h 
! employ] make paym5ts z elective       
contributions to an automatic def]ral   
,,ira on behalf ( su* employee 7:i* w\ld
 h o!rwise be5 made to ! employee       
directly 9 ca%7 9 an am\nt equal to s   
mu* ( a qualifi$ p]c5tage ( comp5sation 
( su* employee z does n exce$ !         
d$uctible am\nt = su* ye> 7)9 ! mean+ ( 
section #bai7;b774  7,b7 ,eligibility ,=
 purposes ( subp>agraph 7,a71 an        
employee is eligible to p>ticipate if   
su* employee has at lea/ #e1jjj (       
comp5sation f ! employ] = ! prec$+ ye>4 
7,c7 ,election out ,! election treat$ z 
hav+ be5 made "u subp>agraph 7,a7 %all  
cease to apply ) respect to any employee
 :o makes an affirmative election--  7i7
 to n h su* elective contributions made1
 or  7ii7 n lat] ?an ! close ( !        
#cj-;day p]iod beg9n+ on ! date ( ! fir/
 contribution ) respect to su* employee1
 to make elective contributions at a    
level specifi$ 9 su* affirmative        
election4  7,d7 ,qualifi$ p]c5tage ,=   

purposes ( ?is p>agraph1 ! t]m qualifi$ 
p]c5tage means1 ) respect to any        
employee1 any p]c5tage det]m9$ "u !     
arrangem5t if su* p]c5tage is appli$    
uni=mly1 does n exce$ #ae p]c5t1 & is at
 lea/--  7i7 #c p]c5t dur+ ! p]iod end+ 
on ! la/ day ( ! fir/ plan ye> :i* beg9s
 aft] ! date on :i* ! fir/ elective     
contribution describ$ 9 subp>agraph 7,a7
 is made ) respect to su* employee1 &   
7ii7 dur+ any subsequ5t plan ye>1 a     
p]c5tage equal to--  7,i7 #c p]c5t1 plus
  7,,ii7 #a p]c5t multipli$ by ! numb] (
 plan ye>s 7b n m ?an #ab7 beg9n+ aft] !
 plan ye> describ$ 9 clause 7i74  7#b7  
,notice  7,a7 ,9 g5]al ,! requirem5ts ( 
?is p>agraph are met if1 )9 a reasonable
 p]iod be=e ! fir/ day an employee is   
eligible to p>ticipate 9 ! arrangem5t1 !
 employee receives writt5 notice ( !    
employee's rights & obligations "u !    
arrangem5t :i*--  7i7 is suffici5tly    
accurate & compreh5sive to apprise !    
employee ( su* rights1 &  7ii7 is writt5
 9 a mann] calculat$ to be und]/ood by !

 av]age employee to :om ! arrangem5t    
applies4  7,b7 ,tim+ & cont5t ,a notice 
%all n be treat$ z meet+ ! requirem5ts (
 subp>agraph 7,a7 ) respect to an       
employee unless--  7i7 ! notice expla9s 
! employee's "r to elect n to h elective
 contributions made on ! employee's     
behalf 7or to elect to h su*            
contributions made at a diff]5t         
p]c5tage71  7ii7 ! notice expla9s h[    
contributions made "u ! arrangem5t w be 
inve/$ 9 ! abs5ce ( any inve/m5t        
election by ! employee1 &  7iii7 !      
employee has a reasonable p]iod ( "t    
aft] receipt ( ! notice describ$ 9      
clauses 7i7 & 7ii7 & be=e ! fir/        
elective contribution is made to make   
ei!r su* election4  7#c7 ,default       
inve/m5t arrangem5t ,! requirem5ts ( ?is
 p>agraph are met if--  7,a7 9 ! abs5ce 
( an inve/m5t election by ! employee )  
respect to ! employee's int]e/ 9 ! tru/1
 su* int]e/ is inve/$ z provid$ 9       
regulations prescrib$ pursuant to       
subp>agraph 7,a7 ( section #djd7;c77#e7 

( ! ,employee ,retirem5t ,income        
,security ,act ( #aigd1 &  7,b7 !       
employ] provides ea* employee :o has an 
int]e/ 9 ! tru/1 notice :i* meets !     
requirem5ts ( subp>agraph 7,b7 ( su*    
section4  7#d7 ,adm9i/rative requirem5ts
 ,! requirem5ts ( ?is p>agraph are met  
if--  7,a7 an employ] mu/ make--  7i7 ! 
elective contributions "u p>agraph      
7#a77;,a7 n lat] ?an ! close ( !        
#cj-;day p]iod foll[+ ! la/ day ( ! mon?
 ) respect to :i* ! contributions are to
 be made1 &  7ii7 a paym5t ( int]e/ at !
 ov]paym5t rate 7z det]m9$ "u section   
#ffba7;a77 on any su* elective          
contribution made aft] ! end ( ! p]iod  
specifi$ 9 clause 7i71  7,b7 an employee
 may elect to t]m9ate p>ticipation 9 !  
arrangem5t at any "t dur+ ! ye>1 except 
t if ! employee s t]m9ates1 ! arrangem5t
 may provide t ! employee may n elect to
 resume p>ticipation until ! beg9n+ ( ! 
next ye>1 &  7,c7 ea* employee eligible 
to p>ticipate may elect1 dur+ ! #cj-;day
 p]iod be=e ! beg9n+ ( any ye>1 or to   

modify ! am\nt subject to su*           
arrangem5t1 = su* ye>4  4  7b7 ,failure 
,to ,make ,timely ,contributions ,*apt] 
#dc ( su* ,code is am5d$ by add+ at !   
end ! foll[+3  #dihj;,j4 ,failure to    
make timely contributions "u ,automatic 
def]ral ,i,r,as  7a7 ,initial tax ,if at
 any "t dur+ any taxable ye> an employ] 
ma9ta9s an automatic def]ral ,,ira :i*  
is "p ( a plan to :i* section #djh;,b   
applies1 !re is h]eby impos$ on !       
employ] = ! taxable ye> a tax equal to  
#aj p]c5t ( ! aggregate requir$         
contributions to su* automatic def]ral  
,,ira = all plan ye>s t are n paid by ! 
date specifi$ 9 section                 
#djh;,b7c77#d77;,a77i7 & t rema9 unpaid 
z ( ! end ( any plan ye> end+ ) or )9 ! 
taxable ye>4  7b7 ,additional tax ,if a 
tax is impos$ "u subsection 7a7 on any  
unpaid requir$ contribution & su* am\nt 
rema9s unpaid z ( ! close ( ! taxable   
p]iod1 !re is h]eby impos$ a tax equal  
to #ajj p]c5t ( ! unpaid requir$        
contribution to ! ext5t n s paid or     

correct$4  7c7 ,limitations on am\nt (  
tax  7#a7 ,tax n to apply :]e failure n 
discov]$ ex]cis+ reasonable dilig5ce ,no
 tax %all be impos$ by subsection 7a7 on
 any failure dur+ any p]iod = :i* x is  
e/abli%$ to ! satisfaction ( ! ,secret>y
 t ! employ] did n "k1 & ex]cis+        
reasonable dilig5ce w\ld n h kn[n1 t su*
 failure exi/$4  7#b7 ,tax n to apply to
 failures correct$ )9 #cj days ,no tax  
%all be impos$ by subsection 7a7 on any 
failure if--  7,a7 su* failure 0 due to 
reasonable cause & n to willful neglect1
 &  7,b7 su* failure is correct$ dur+ ! 
#cj-;day p]iod beg9n+ on ! #a/ date !   
employ] knew1 or ex]cis+ reasonable     
dilig5ce w\ld h kn[n1 t su* failure     
exi/$4  7#c7 ,waiv] by ,secret>y ,9 !   
case ( a failure :i* is due to          
reasonable cause & n to willful neglect1
 ! ,secret>y may waive "p or all ( ! tax
 impos$ by subsection 7a7 to ! ext5t t !
 paym5t ( su* tax w\ld be excessive     
relative to ! failure involv$4  4  7c7  
,preemption ( conflict+ ,/ate laws ,any 

law ( a ,/ate %all be sup]s$$ if x w\ld 
directly or indirectly prohibit or      
re/rict an employ] f creat+ or ma9ta9+  
an automatic def]ral ,,ira 7z def9$ 9   
section #djh;,b ( ! ,int]nal ,rev5ue    
,s]vice ( #aihf74  7d7 ,cl]ical am5dm5t 
,! table ( sections = subp>t ,a ( "p ,i 
( sub*apt] ,d ( *apt] #a ( ! ,int]nal   
,rev5ue ,code ( #aihf is am5d$ by ins]t+
 aft] ! item relat+ to #djh;,a ! foll[+ 
new item3  #djh;,b4 ,automatic def]ral  
,i,r,as4  4  7e7 ,effective date ,!     
am5dm5ts made by ?is section %all apply 
to taxable ye>s beg9n+ aft] ,decemb]    
#ca1 #bjae4  #h4 ,modification (        
automatic enrollm5t safe h>bor  7a7 ,9  
g5]al  7#a7 ,removal ( #aj p]c5t cap    
,clause 7iii7 ( section                 
#dja7k77#ac77;,c7 ( ! ,int]nal ,rev5ue  
,code ( #aihf is am5d$ by /rik+ 1 does n
 exce$ #aj p]c5t1 & is at lea/ & ins]t+ 
& is4  7#b7 ,con=m+ am5dm5ts  7,a7      
,subclause 7,i7 ( section               
#dja7k77#ac77;,c77iii7 ( su* ,code is   
am5d$ by /rik+ #c p]c5t & ins]t+ at lea/

 #c p]c5t1 b n great] ?an #aj p]c5t14   
7,b7 ,subclause 7,,ii7 ( section        
#dja7k77#ac77;,c77iii7 ( su* ,code is   
am5d$ by /rik+ #d p]c5t & ins]t+ at lea/
 #d p]c5t1 b n great] ?an #ae p]c5t14   
7,c7 ,subclause 7,,iii7 ( section       
#dja7k77#ac77;,c77iii7 ( su* ,code is   
am5d$ by /rik+ #e p]c5t & ins]t+ at lea/
 #e p]c5t4  7,d7 ,subclause 7,,iv7 (    
section #dja7k77#ac77;,c77iii7 ( su*    
,code is am5d$ by /rik+ #f p]c5t &      
ins]t+ at lea/ #f p]c5t4  7b7 ,effective
 date ,! am5dm5ts made by ?is section   
%all apply to plan ye>s beg9n+ aft] !   
date ( enactm5t ( ?is ,act4  #i4 ,secure
 def]ral arrangem5ts  7a7 ,9 g5]al      
,subsection 7k7 ( section #dja ( !      
,int]nal ,rev5ue ,code ( #aihf is am5d$ 
by add+ at ! end ! foll[+ new p>agraph3 
7#ad7 ,alt]native me?od = secure def]ral
 arrangem5ts to meet nondiscrim9ation   
requirem5ts  7,a7 ,9 g5]al ,a secure    
def]ral arrangem5t %all be treat$ z     
meet+ ! requirem5ts ( p>agraph          
7#c77;,a77ii74  7,b7 ,secure def]ral    

arrangem5t ,= purposes ( ?is p>agraph1 !
 t]m secure def]ral arrangem5t means any
 ca% or def]r$ arrangem5t :i* meets !   
requirem5ts ( subp>agraphs 7,c71 7,d71 &
 7,e7 ( p>agraph 7#ac71 except z modifi$
 by ?is p>agraph4  7,c7 ,qualifi$       
p]c5tage ,= purposes ( ?is p>agraph1 )  
respect to any employee1 ! t]m qualifi$ 
p]c5tage means1 9 lieu ( ! mean+ giv5   
su* t]m 9 p>agraph 7#ac77;,c77iii71 any 
p]c5tage det]m9$ "u ! arrangem5t if su* 
p]c5tage is appli$ uni=mly & is--  7i7  
at lea/ #f p]c5t1 b n great] ?an #aj    
p]c5t1 dur+ ! p]iod end+ on ! la/ day ( 
! fir/ plan ye> :i* beg9s aft] ! date on
 :i* ! fir/ elective contribution       
describ$ 9 p>agraph 7#ac77;,c77i7 is    
made ) respect to su* employee1  7ii7 at
 lea/ #h p]c5t dur+ ! fir/ plan ye>     
foll[+ ! plan ye> describ$ 9 clause 7i71
 &  7iii7 at lea/ #aj p]c5t dur+ any    
subsequ5t plan ye>4  7,d7 ,mat*+        
contributions  7i7 ,9 g5]al ,= purposes 
( ?is p>agraph1 an arrangem5t %all be   
treat$ z hav+ met ! requirem5ts (       

p>agraph 7#ac77;,d77i7 if & only if !   
employ] makes mat*+ contributions on    
behalf ( ea* employee :o is n a highly  
comp5sat$ employee 9 an am\nt equal to !
 sum (--  7,i7 #ajj p]c5t ( ! elective  
contributions ( ! employee to ! ext5t t 
su* contributions d n exce$ #a p]c5t (  
comp5sation1  7,,ii7 #ej p]c5t ( s mu* (
 su* contributions z exce$ #a p]c5t b d 
n exce$ #f p]c5t ( comp5sation1 plus    
7,,iii7 #be p]c5t ( s mu* ( su*         
contributions z exce$ #f p]c5t b d n    
exce$ #aj p]c5t ( comp5sation4  7ii7    
,application ( rules = mat*+            
contributions ,! rules ( clause 7ii7 (  
p>agraph 7#ab77;,b7 & clauses 7iii7 &   
7iv7 ( p>agraph 7#ac77;,d7 %all apply = 
purposes ( clause 7i7 b ! rule ( clause 
7iii7 ( p>agraph 7#ab77;,b7 %all n apply
 = su* purposes4 ,! rate ( mat*+        
contribution = ea* increm5tal def]ral   
mu/ be at lea/ z high z ! rate specifi$ 
9 clause 7i71 & may be high]1 s long z  
su* rate does n increase z an employee's
 rate ( elective contributions          

increases4  4  7b7 ,mat*+ contributions 
& employee contributions ,subsection 7m7
 ( section #dja ( ! ,int]nal ,rev5ue    
,code ( #aihf is am5d$ by r$esignat+    
p>agraph 7#ac7 z p>agraph 7#ad7 & by    
ins]t+ aft] p>agraph 7#ab7 ! foll[+ new 
p>agraph3  7#ac7 ,alt]native me?od =    
secure def]ral arrangem5ts ,a def9$     
contribution plan %all be treat$ z meet+
 ! requirem5ts ( p>agraph 7#b7 ) respect
 to mat*+ contributions & employee      
contributions if ! plan--  7,a7 is a    
secure def]ral arrangem5t 7z def9$ 9    
subsection 7k77#ad771  7,b7 meets !     
requirem5ts ( clauses 7ii7 & 7iii7 (    
p>agraph 7#aa77;,b71 &  7,c7 provides t 
mat*+ contributions on behalf ( any     
employee may n be made ) respect to an  
employee's contributions or elective    
def]rals 9 excess ( #aj p]c5t ( !       
employee's comp5sation4  4  7c7         
,effective date ,! am5dm5ts made by ?is 
section %all apply to plan ye>s beg9n+  
aft] ,decemb] #ca1 #bjae4  #aj4 ,cr$it =
 employ]s ) respect to modifi$ safe     

h>bor requirem5ts  7a7 ,9 g5]al ,subp>t 
,d ( "p ,,iv ( sub*apt] ,a ( *apt] #a ( 
! ,int]nal ,rev5ue ,code ( #aihf is     
am5d$ by add+ at ! end ! foll[+ new     
section3  #de,s4 ,cr$it = small employ]s
 ) respect to modifi$ safe h>bor        
requirem5ts = automatic contribution    
arrangem5ts  7a7 ,g5]al rule ,= purposes
 ( section #ch1 9 ! case ( a small      
employ]1 ! safe h>bor adoption cr$it    
det]m9$ "u ?is section = any taxable ye>
 is ! am\nt equal to ! total ( !        
employ]'s mat*+ contributions "u section
 #dja7k77#ad77;,d7 dur+ ! taxable ye> on
 behalf ( employees :o are n highly     
comp5sat$ employees1 subject to !       
limitations ( subsection 7b74  7b7      
,limitations  7#a7 ,limitation ) respect
 to comp5sation ,! cr$it det]m9$ "u     
subsection 7a7 ) respect to             
contributions made on behalf ( an       
employee :o is n a highly comp5sat$     
employee %all n exce$ #b p]c5t ( !      
comp5sation ( su* employee = ! taxable  
ye>4  7#b7 ,limitation ) respect to ye>s

 ( p>ticipation ,cr$it %all be det]m9$  
"u subsection 7a7 ) respect to          
contributions made on behalf ( an       
employee :o is n a highly comp5sat$     
employee only dur+ ! fir/ #e ye>s su*   
employee p>ticipates 9 ! qualifi$       
automatic contribution arrangem5t4  7c7 
,def9itions  7#a7 ,9 g5]al ,any t]m us$ 
9 ?is section :i* is also us$ 9 section 
#dja7k77#ad7 %all h ! same mean+ z :5   
us$ 9 su* section4  7#b7 ,small employ] 
,! t]m small employ] means an eligible  
employ] 7z def9$ 9 section              
#djh7p77#b77;,c77i774  7d7 ,d5ial (     
d\ble b5efit ,no d$uction %all be       
all[able "u ?is title = any contribution
 ) respect to :i* a cr$it is all[$ "u   
?is section4  4  7b7 ,cr$it ,to be "p ( 
g5]al bus9ess cr$it ,subsection 7b7 (   
section #ch ( ! ,int]nal ,rev5ue ,code (
 #aihf is am5d$--  7#a7 by /rik+ plus at
 ! end ( p>agraph 7#ce71  7#b7 by /rik+ 
! p]iod at ! end ( p>agraph 7#cf7 &     
ins]t+ 1 plus1 &  7#c7 by add+ at ! end 
! foll[+ new p>agraph3  7#cg7 ! safe    

h>bor adoption cr$it det]m9$ "u section 
#de,s4  4  7c7 ,cl]ical am5dm5t ,! table
 ( sections = subp>t ,d ( "p ,,iv (     
sub*apt] ,a ( *apt] #a ( ! ,int]nal     
,rev5ue ,code ( #aihf is am5d$ by add+  
aft] ! item relat+ to section #de,r !   
foll[+ new item3  ,sec4 #de,s4 ,cr$it = 
small employ]s ) respect to modifi$ safe
 h>bor requirem5ts = automatic          
contribution arrangem5ts4  4  7d7       
,effective date ,! am5dm5ts made by ?is 
section %all apply to taxable ye>s t    
include any portion ( a plan ye> beg9n+ 
aft] ,decemb] #ca1 #bjae4  #aa4         
,modification ( regulations ,! ,secret>y
 ( ! ,treasury %all promulgate          
regulations or o!r guidance t--  7#a7   
simplify & cl>ify ! rules reg>d+ ! tim+ 
( p>ticipant notices requir$ "u section 
#dja7k77#ac77;,e7 ( ! ,int]nal ,rev5ue  
,code ( #aihf1 ) specific application   
to--  7,a7 plans t all[ employees to be 
eligible = p>ticipation imm$iately ^u   
beg9n+ employm5t1 &  7,b7 employ]s )    
multiple payroll & adm9i/rative sy/ems1 

&  7#b7 simplify & cl>ify ! automatic   
escalation rules "u sections            
#dja7k77#ac77;,c77iii7 &                
#dja7k77#ad77;,c7 ( ! ,int]nal ,rev5ue  
,code ( #aihf 9 ! context ( employ]s )  
multiple payroll & adm9i/rative sy/ems4 
,su* regulations or guidance %all       
address ! p>ticul> case ( employees )9 !
 same plan :o are subject to diff]5t    
notice tim+ & diff]5t p]c5tage          
requirem5ts1 & provide assi/ance = plan 
sponsors 9 manag+ su* cases4  #ab4      
,limit$ transf] ( unus$ balance 9       
flexible sp5d+ arrangem5t  7a7 ,9 g5]al 
,section #abe ( ! ,int]nal ,rev5ue ,code
 ( #aihf is am5d$ by r$esignat+         
subsections 7k7 & 7l7 z subsections 7l7 
& 7m71 respectively1 & by ins]t+ aft]   
subsection 7h7 ! foll[+ new subsection3 
7k7 ,special rule = unus$ b5efits 9     
flexible sp5d+ arrangem5ts  7#a7 ,9     
g5]al ,= purposes ( ?is title1 a plan or
 o!r arrangem5t %all n fail to be treat$
 z a cafet]ia plan or flexible sp5d+    
arrangem5t m]ely because su* arrangem5t 

provides = qualifi$ retirem5t           
di/ributions4  7#b7 ,qualifi$ retirem5t 
di/ribution  7,a7 ,9 g5]al ,= purposes (
 ?is section1 ! t]m qualifi$ retirem5t  
di/ribution means any di/ribution to an 
individual ( all or a portion ( !       
employee's acc\nt "u su* arrangem5t1 b  
only to ! ext5t--  7i7 ! am\nt does n   
exce$ ! less] (--  7,i7 #bej1 or  7,,ii7
 ! unus$ b5efits ) respect to !         
arrangem5t1 &  7ii7 ! am\nt receiv$ is  
paid 9 ! =m ( a direct tru/ee-to-tru/ee 
transf] to a qualifi$ retirem5t plan 7z 
def9$ 9 section #digd7;c771 or an       
eligible def]r$ comp5sation plan 7z     
def9$ 9 section #deg7;b77 ( an eligible 
employ] describ$ 9 section              
#deg7;e77#a77;,a71 ma9ta9$ by ! same    
employ] z ! employ] ma9ta9+ ! cafet]ia  
plan or flexible sp5d+ arrangem5t ( !   
individual4  7,b7 ,unus$ b5efits ,=     
purposes ( ?is p>agraph1 ! t]m unus$    
b5efits means1 ) respect to an employee1
 ! excess (--  7i7 ! maximum am\nt (    
reimbursem5t all[able to ! employee dur+

 a plan ye> "u a flexible sp5d+         
arrangem5t1 ov]  7ii7 ! actual am\nt (  
reimbursem5t dur+ su* ye> "u su*        
arrangem5t4  7,c7 ,special rules =      
treatm5t ( contributions to retirem5t   
plans ,= purposes ( ?is title1 qualifi$ 
retirem5t di/ributions--  7i7 %all be   
treat$ z elective def]rals 7z def9$ 9   
section #djb7;g77#c77 "u an annuity     
contract describ$ 9 section #djc7;b71   
7ii7 %all be treat$ z elective def]rals 
7z s def9$7 9 ! case ( contributions to 
a qualifi$ ca% or def]r$ arrangem5t 7z  
def9$ 9 section #dja7k77 "u a plan :i*  
is describ$ 9 section #dja7;a7 :i*      
includes a tru/ :i* is exempt f tax "u  
section #eja7;a71  7iii7 %all be treat$ 
z def]r$ comp5sation 9 ! case (         
contributions to an eligible def]r$     
comp5sation plan 7z def9$ 9 section     
#deg7;b77 ma9ta9$ by an employ] describ$
 9 section #deg7;e77#a77;,a71 &  7iv7   
%all be treat$ 9 ! mann] designat$ =    
purposes ( section #djh or #djh;,a 9 !  
case ( contributions to an individual   

retirem5t plan4  4  7b7 ,effective date 
,! am5dm5ts made by ?is section %all    
apply to plan ye>s end+ aft] ! date ( ! 
enactm5t ( ?is ,act4  #ac4 ,prior ye>s  
comp5sation tak5 into acc\nt 9 det]m9+  
maximum retirem5t sav+s d$uction  7a7 ,9
 g5]al ,subp>agraph 7,b7 ( section      
#bai7;b77#a7 ( ! ,int]nal ,rev5ue ,code 
( #aihf is am5d$ by ins]t+ or ! prec$+  
taxable ye> aft] su* taxable ye>4  7b7  
,effective date ,! am5dm5t made by ?is  
section %all apply to taxable ye>s      
beg9n+ aft] ! date ( ! enactm5t ( ?is   
,act4  #ad4 ,exp&+ small employ] p5sion 
plan />tup co/ cr$it  7a7 ,9 g5]al  7#a7
 ,includ+ />tup co/s = employ]-e/abli%$ 
,i,r,as ,p>agraph 7#b7 ( section        
#de;,e7d7 ( ! ,int]nal ,rev5ue ,code (  
#aihf 7def9+ eligible employ] plan7 is  
am5d$ by /rik+ means a qualifi$ employ] 
plan & all t foll[s & ins]t+3  means--  
7,a7 a qualifi$ employ] plan )9 ! mean+ 
( section #digb7;d71 &  7,b7 a plan (   
:i* an automatic def]ral ,,ira describ$ 
9 section #djh;,b is a "p4  4  7#b7     

,additional cr$it am\nt  7,a7 ,9 g5]al  
,subsection 7a7 ( section #de;,e ( su*  
,code is am5d$ by /rik+ #ej p]c5t ( &   
all t foll[s & ins]t+  ! sum (-- 7#a7 ! 
applicable p]c5tage ( ! qualifi$ />tup  
co/s paid or incurr$ by ! taxpay] dur+ !
 taxable ye>1 plus  7#b7 #be multipli$  
by ! numb] ( employees ( ! employ] :o   
p>ticipate 9 any eligible employ] plan (
 ! employ] = ! fir/ "t 9 su* taxable    
ye>4  4  7,b7 ,applicable p]c5tage      
,subsection 7d7 ( section #de;,e ( su*  
,code is am5d$ by add+ at ! end ! foll[+
 new p>agraph3  7#d7 ,applicable        
p]c5tage ,! applicable p]c5tage is--    
7,a7 9 ! case ( a plan describ$ 9       
subsection 7d77#b77;,a71 #ge p]c5t1 or  
7,b7 9 ! case ( a plan describ$ 9       
subsection 7d77#b77;,b71 #ej p]c5t4  4  
7,c7 ,con=m+ am5dm5t ,p>agraph 7#b7 (   
section #de;,e7c7 ( su* ,code 7def9+    
eligible employ]7 is am5d$--  7i7 by    
/rik+ qualifi$ employ] plan 9 ea* place 
x appe>s & ins]t+ eligible employ] plan1
 &  7ii7 by /rik+ qualifi$ 9 ! head+    

!re( & ins]t+ eligible4  7#c7 ,increas$ 
limitation ,p>agraph 7#a7 ( section     
#de;,e7b7 ( su* ,code is am5d$ by /rik+ 
#ejj & ins]t+ #gej 7#b1jjj 9 ! case (   
qualifi$ />tup co/s attributable to a   
plan describ$ 9 subsection              
7d77#b77;,a774  7b7 ,effective date ,!  
am5dm5t made by ?is section %all apply  
to co/s paid or incurr$ 9 taxable ye>s  
beg9n+ aft] ! date ( ! enactm5t ( ?is   
,act4  #ae4 ,f9ancial education  7a7    
,retirem5t plan education = small       
bus9esses ,n lat] ?an #f mon?s aft] !   
date ( ! enactm5t ( ?is ,act--  7#a7 !  
,dep>tm5t ( ! ,treasury ,(fice (        
,f9ancial ,education1 9 consultation ) !
 ,dep>tm5t ( ,labor1 %all develop &     
implem5t an outrea* plan to educate     
small bus9esses on ! types ( retirem5t  
plans available & ! b5efits &           
requirem5ts ( su* plans1 &  7#b7 !      
,secret>y ( ! ,treasury & ! ,secret>y ( 
,labor %all develop recomm5dations =    
small bus9esses 9 ord] to improve       
retirem5t outcomes4 ,su* recomm5dations 

%all take into acc\nt e/abli%$          
behavioral tr5ds ( employee inve/m5t & !
 effect ( default design features su* z 
auto escalation1 expansion ( auto       
rollov]s1 auto div]sification = ne>     
retirees1 & automatic =ms ( di/ribution4
  7b7 ,f9ancial lit]acy  7#a7 ,9 g5]al  
,n lat] ?an #a ye> aft] ! date ( !      
enactm5t ( ?is ,act1 ! ,secret>y ( !    
,treasury1 9 consultation ) ! ,secret>y 
( ,education1 %all develop sample       
age-appropriate curricula to be made    
available = f9ancial lit]acy education 9
 elem5t>y & second>y s*ools4  7#b7      
,cont5t ( curricula ,su* curricula %all 
include ! foll[+3  7,a7 ,h[ to balance a
 *eckbook1 read a cr$it c>d /atem5t1 &  
calculate int]e/ rates4  7,b7 ,:at a pay
 /ub is & :y ,f$]al & ,/ate income taxes
 & ,social ,security & ,m$ic>e taxes are
 )held f wages4  7,c7 ,! diff]5ces      
betwe5 v>i\s types ( bank acc\nts4  7,d7
 ,! significance ( a cr$it score & h[ to
 read cr$it reports4  7,e7 ,! m>ket+    
te*niques frequ5tly us$ by individuals &

 bus9esses to attract patrons4  7,f7 ,! 
importance ( sav+ = college & retirem5t1
 includ+ ! v>i\s me?ods = sav+ su* z    
traditional p5sions1 #dja7k7s1 &        
,i,r,as4  #af4 ,small employ] plans  7a7
 ,9 g5]al ,p>agraph 7#aa7 ( section     
#dja7k7 ( ! ,int]nal ,rev5ue ,code (    
#aihf is am5d$ by add+ ! foll[+ at ! end
 !re(3  7,e7 ,def]ral only small employ]
 plan  7i7 ,9 g5]al ,9 ! case ( a plan  
describ$ 9 clause 7ii7--  7,i7 ! am\nt  
describ$ 9 subp>agraph 7,b77i77,i7 %all 
be #aj1jjj1 9 lieu ( ! am\nt 9 effect "u
 section #djh7p77#b77;,a77ii71  7,,ii7  
su* #aj1jjj am\nt %all1 9 ! case ye>s   
beg9n+ aft] ,decemb] #ca1 #bjaf1 be     
adju/$ z describ$ 9 section             
#djh7p77#b77;,e77ii7 except t ! base    
p]iod tak5 into acc\nt %all be ! cal5d> 
qu>t] beg9n+ ,july #a1 #bjae1  7,,iii7  
subclause 7,,ii7 ( subp>agraph 7,b77i7 &
 clause 7ii7 ( subp>agraph 7,b7 %all n  
apply1 &  7,,iv7 section #dad7v7 %all n 
apply4  7ii7 ,plan describ$ ,a plan is  
describ$ 9 ?is clause if ! plan         

satisfies ! foll[+ requirem5ts3  7,i7   
,su* plan satisfies ! requirem5ts ( ?is 
p>agraph1 z modifi$ by clause 7i74      
7,,ii7 ,! plan includes a qualifi$      
automatic contribution arrangem5t1 z    
def9$ 9 p>agraph 7#ac71 except t        
subp>agraph 7,d7 ( p>agraph 7#ac7 %all n
 apply & ! qualifi$ p]c5tage %all be    
det]m9$ by ref]5ce to subclauses 7,i71  
7,,ii71 7,,iii71 & 7,,iv7 ( p>agraph    
7#ac77;,c77iii74  7,,iii7 ,! plan does n
 p]mit any p>ticipant or b5efici>y to   
receive or ma9ta9 a loan f ! plan4      
7,,iv7 ,! plan does n p]mit h>d%ip      
di/ributions describ$ 9 p>agraph        
7#b77;,b77i77,,iv7 except to ! ext5t any
 su* di/ribution is deem$1 "u           
regulations prescrib$ by ! ,secret>y1 to
 be on acc\nt ( an imm$iate & heavy     
f9ancial ne$ ( ! employee & necess>y to 
satisfy an imm$iate & heavy f9ancial ne$
 ( ! employee4  7,v7 ,! plan is ma9ta9$ 
pursuant to a model plan docum5t publi%$
 by ! ,secret>y4  4  7b7 ,simplification
  7#a7 ,model plan ,)9 "o ye> ( ! date (

 ! enactm5t ( ?is ,act1 ! ,secret>y ( ! 
,treasury %all publi% a model plan t may
 be us$ to satisfy ! requirem5t (       
subclause 7,v7 ( section                
#dja7k77#aa77;,e77ii7 ( ! ,int]nal      
,rev5ue ,code ( #aihf4  7#b7 ,protection
 aga9/ loss ,)9 #abj days ( ! date ( !  
enactm5t ( ?is ,act1 ! ,secret>y (      
,labor %all am5d ,dep>tm5t ( ,labor     
,regulation section                     
#beej4djd;c-#e7;e77#d77;iv77,b7 s t1 9 !
 case ( a plan describ$ 9 section       
#dja7k77#aa77;,e7 ( su* ,code f\r ye>s  
%all be sub/itut$ = #abj days4  7#c7    
,cl>ify+ duties & r$uc+ burd5s =        
multiple employ] plans ,)9 "o ye> ( !   
date ( ! enactm5t ( ?is ,act1 !         
,secret>y ( ,labor %all--  7,a7 publi%  
rules cl>ify+ ! ext5t to :i* ! fiduci>y 
duties1 if any1 ( a p>ticipat+ employ]  
fiduci>y ) respect to a plan describ$ 9 
section #dac7;c7 ( su* ,code are limit$ 
to--  7i7 ! selection & monitor+ ( !    
nam$ fiduci>y1 &  7ii7 ! inve/m5t &     
managem5t ( ! portion ( ! plan's assets 

attributable to employees ( ! employ] to
 ! ext5t n o!rwise delegat$ to ano!r    
fiduci>y1 &  7,b7 prescribe int]im f9al 
regulations provid+ simplifi$ means by  
:i* plans describ$ 9 section #dac7;c7 ( 
su* ,code may satisfy ! requirem5ts (   
sections #ajb1 #ajc1 & #aje ( !         
,employee ,retirem5t ,income ,security  
,act ( #aigd4  ,= purposes ( ?is        
p>agraph1 ! t]m p>ticipat+ employ]      
fiduci>y means ! p>ticipat+ employ]1 any
 employee ( su* p>ticipat+ employ] t    
s]ves z fiduci>y1 any committee ( su*   
employees1 & any o!r p]son ^: fiduci>ies
 duties ) respect to ! plan relate      
solely to ! p>ticipat+ employ] & n to ! 
op]ation ( ! plan ) respect to all      
p>ticipat+ employ]s4  7#d7 ,elim9ation (
 dis9c5tive to pool+ ,n lat] ?an "o ye> 
aft] ! date ( ! enactm5t ( ?is ,act1 !  
,secret>y ( ! ,treasury %all prescribe  
f9al regulations "u :i* a plan describ$ 
9 section #dac7;c7 ( su* ,code may be   
treat$ z satisfy+ ! qualification       
requirem5ts ( section #dja7;a7 ( su*    

,code despite ! violation ( su*         
requirem5ts ) respect to "o or m        
p>ticipat+ employ]s )\t reg>d to :e!r   
su* violation cont9ues4 ,solely = ?is   
purpose1 a plan %all be treat$ z violat+
 ! qualification requirem5ts ( section  
#dja7;a7 ( su* ,code ) respect to a     
p>ticipat+ employ] if su* employ] has   
fail$ to provide ! plan sponsor ) !     
in=mation ne$$ to comply ) su*          
requirem5ts & su* failure has cont9u$   
ov] a p]iod ( "t t cle>ly demon/rates a 
lack ( commitm5t to compliance4 ,su*    
rules may require t ! portion ( ! plan  
attributable to su* p>ticipat+ employ]s 
be spun (f to plans ma9ta9$ by su*      
employ]s4  7c7 ,effective date  7#a7 ,9 
g5]al ,except z provid$ 9 p>agraph 7#b71
 ! am5dm5ts made by ?is section %all    
apply to ye>s beg9n+ aft] ,decemb] #ca1 
#bjae4  7#b7 ,exception ,subsection 7b7 
%all apply z ( ! date ( ! enactm5t ( ?is
 ,act4  #ag4 ,modification ( ,,erisa    
rules relat+ to multiple employ] def9$  
contribution plans  7a7 ,9 g5]al  7#a7  

,requirem5t ( common int]e/ ,section    
#c7b7 ( ! ,employee ,retirem5t ,income  
,security ,act ( #aigd is am5d$ by add+ 
at ! end ! foll[+3  7,c7  7i7 ,a        
qualifi$ multiple employ] plan %all n   
fail to be treat$ z an employee p5sion  
b5efit plan or p5sion plan solely       
because ! employ]s ma9ta9+ ! plan %>e no
 common int]e/4  7ii7 ,= purposes ( ?is 
subp>agraph1 ! t]m qualifi$ multiple    
employ] plan means a plan describ$ 9    
section #dac7;c7 ( ! ,int]nal ,rev5ue   
,code ( #aihf :i*--  7,i7 is an         
individual acc\nt plan ) respect to :i* 
! requirem5ts ( clauses 7iii71 7iv71 &  
7v7 are met1 &  7,,ii7 includes 9 its   
annual report requir$ to be fil$ "u     
section #ajd7;a7 ! "n & id5tify+        
in=mation ( ea* employ] ma9ta9+ ! plan4 
7iii7 ,! requirem5ts ( ?is clause are   
met if1 "u ! plan1 ea* employ] ma9ta9+ !
 plan reta9s fiduci>y responsibility =--
  7,i7 ! selection & monitor+ ( ! nam$  
fiduci>y1 &  7,,ii7 ! inve/m5t &        
managem5t ( ! portion ( ! plan's assets 

attributable to employees ( ! employ] to
 ! ext5t n o!rwise delegat$ to ano!r    
fiduci>y4  7iv7 ,! requirem5ts ( ?is    
clause are met if1 "u ! plan1 an employ]
 ma9ta9+ ! plan is n subject to         
unreasonable re/rictions1 fees1 or      
p5alties by reason ( ceas+ to ma9ta91 or
 o!rwise transf]r+ assets f1 ! plan4    
7v7 ,! requirem5ts ( ?is clause are met 
if ea* employ] ma9ta9+ ! plan is an     
eligible employ] z def9$ 9 section      
#djh7p77#b77;,c77i7 ( ! ,int]nal ,rev5ue
 ,code ( #aihf1 appli$--  7,i7 by       
sub/itut+ #ejj = #ajj 9 subclause 7,i7  
!re(1  7,,ii7 by sub/itut+ #e = #b ea*  
place x appe>s 9 subclause 7,,ii7 !re(1 
&  7,,iii7 )\t reg>d to ! la/ s5t5ce (  
subclause 7,,ii7 !re(4  4  7#b7         
,simplifi$ report+ = small multiple     
employ] plans ,section #ajd7;a7 ( su*   
,act 7#bi ,u4,s4,c4 #ajbd7;a77 is am5d$ 
by add+ at ! end ! foll[+3  7#g7  7,a7  
,9 ! case ( any eligible small multiple 
employ] plan1 ! ,secret>y may by        
regulation waive ! requirem5t "u section

 #ajc7;a77#c7 to engage an indep5d5t    
qualifi$ public acc\ntant 9 cases :]e ! 
,secret>y det]m9es x appropriate4  7,b7 
,= purposes ( ?is p>agraph1 ! t]m       
eligible small multiple employ] plan    
means1 ) respect to any plan ye>--  7i7 
a qualifi$ multiple employ] plan1 z     
def9$ 9 section #c7b77;,c77ii71 or  7ii7
 any o!r plan describ$ 9 section        
#dac7;c7 ( ! ,int]nal ,rev5ue ,code (   
#aihf t satisfies ! requirem5ts ( clause
 7v7 ( section #c7b77;,c74  4  7b7      
,con=m+ am5dm5t ,section #c7b77;,a7 (   
su* ,act is am5d$ by /rik+ ,except z    
provid$ 9 subp>agraph 7,b7 & ins]t+     
,except z provid$ 9 subp>agraphs 7,b7 & 
7,c74  7c7 ,effective date ,! am5dm5ts  
made by ?is section %all apply to ye>s  
beg9n+ aft] ,decemb] #ca1 #bjae4  #ah4  
,cl>ification ( treatm5t ( individual   
retirem5t plans ) payroll d$uction  7a7 
,9 g5]al ,section #c7b7 ( ! ,employee   
,retirem5t ,income ,security ,act (     
#aigd 7#bi ,u4,s4,c4 #ajjb7b771 z am5d$ 
by ?is ,act1 is am5d$ by add+ at ! end !

 foll[+ new subp>agraph3  7,e7 ,nei!r an
 individual retirem5t plan 7z def9$ 9   
section #ggja7;a77#cg7 ( ! ,int]nal     
,rev5ue ,code ( #aihf7 nor an automatic 
def]ral ,,ira arrangem5t 7z describ$ 9  
section #djh;,b ( su* ,code7 ma9ta9$ 9  
connection ) any su* individual         
retirem5t plan %all be consid]$ a p5sion
 plan m]ely because an employ] e/abli%es
 a payroll d$uction program = ! purpose 
( enabl+ employees to make volunt>y     
contributions to su* acc\nt or annuity4 
4  7b7 ,effective date ,! am5dm5ts made 
by ?is section %all take effect on !    
date ( ! enactm5t ( ?is ,act4  #ai4     
,disclosure reg>d+ lifetime income  7a7 
,9 g5]al ,subp>agraph 7,b7 ( section    
#aje7;a77#b7 ( ! ,employee ,retirem5t   
,income ,security ,act ( #aigd 7#bi     
,u4,s4,c4 #ajbe7;a77#b77 is am5d$--     
7#a7 9 clause 7i71 by /rik+ & at ! end2 
7#b7 9 clause 7ii71 by /rik+            
div]sification4 & ins]t+ div]sification1
 &2 &  7#c7 by ins]t+ at ! end ! foll[+3
  7iii7 ! lifetime income disclosure    

describ$ 9 subp>agraph 7,d77i74  ,9 !   
case ( p5sion b5efit /atem5ts describ$ 9
 clause 7i7 ( p>agraph 7#a77;,a71 a     
lifetime income disclosure "u clause    
7iii7 ( ?is subp>agraph %all only be    
requir$ to be includ$ 9 "o p5sion b5efit
 /atem5t dur+ any "o #ab-mon? p]iod4 4  
7b7 ,lifetime income ,p>agraph 7#b7 (   
section #aje7;a7 ( su* ,act 7#bi        
,u4,s4,c4 #ajbe7;a77 is am5d$ by add+ at
 ! end ! foll[+ new subp>agraph3  7,d7  
,lifetime income disclosure  7i7 ,9     
g5]al  7,i7 ,disclosure ,a lifetime     
income disclosure %all set =? ! lifetime
 income /ream equival5t ( ! total       
b5efits accru$ ) respect to ! p>ticipant
 or b5efici>y4  7,,ii7 ,lifetime income 
/ream equival5t ( ! total b5efits accru$
 ,= purposes ( ?is subp>agraph1 ! t]m   
lifetime income /ream equival5t ( !     
total b5efits accru$ means ! am\nt (    
mon?ly paym5ts ! p>ticipant or b5efici>y
 w\ld receive if ! total accru$ b5efits 
( su* p>ticipant or b5efici>y 7 us$ to  
provide lifetime income /reams describ$ 

9 subclause 7,,iii71 bas$ on assumptions
 specifi$ 9 rules prescrib$ by !        
,secret>y4  7,,iii7 ,lifetime income    
/reams ,! lifetime income /reams        
describ$ 9 ?is subclause are a qualifi$ 
jo9t & survivor annuity 7z def9$ 9      
section #bje7;d771 bas$ on assumptions  
specifi$ 9 rules prescrib$ by !         
,secret>y1 includ+ ! assumption t !     
p>ticipant or b5efici>y has a sp\se (   
equal age1 & a s+le life annuity4 ,su*  
lifetime income /reams may h a t]m c]ta9
 or o!r features to ! ext5t p]mitt$ "u  
rules prescrib$ by ! ,secret>y4  7ii7   
,model disclosure ,n lat] ?an #a ye>    
aft] ! date ( ! enactm5t ( ! ,lifetime  
,income ,disclosure ,act1 ! ,secret>y   
%all issue a model lifetime income      
disclosure1 writt5 9 a mann] s z to be  
und]/ood by ! av]age plan p>ticipant1   
t--  7,i7 expla9s t ! lifetime income   
/ream equival5t is only provid$ z an    
illu/ration2  7,,ii7 expla9s t ! actual 
paym5ts "u ! lifetime income /ream      
describ$ 9 clause 7i77,,iii7 t may be   

pur*as$ ) ! total b5efits accru$ w dep5d
 on num]\s factors & may v>y            
sub/antially f ! lifetime income /ream  
equival5t 9 ! disclosures2  7,,iii7     
expla9s ! assumptions ^u :i* ! lifetime 
income /ream equival5t 0 det]m9$2 &     
7,,iv7 provides su* o!r simil>          
explanations z ! ,secret>y consid]s     
appropriate4  7iii7 ,assumptions & rules
 ,n lat] ?an #a ye> aft] ! date ( !     
enactm5t ( ! ,lifetime ,income          
,disclosure ,act1 ! ,secret>y %all--    
7,i7 prescribe assumptions t            
adm9i/rators ( individual acc\nt plans  
may use 9 conv]t+ total accru$ b5efits  
into lifetime income /ream equival5ts = 
purposes ( ?is subp>agraph2 &  7,,ii7   
issue int]im f9al rules "u clause 7i74  
,9 prescrib+ assumptions "u subclause   
7,i71 ! ,secret>y may prescribe a s+le  
set ( specific assumptions 79 :i* case !
 ,secret>y may issue tables or factors t
 facilitate su* conv]sions71 or ranges (
 p]missible assumptions4 ,to ! ext5t t  
an accru$ b5efit is or may be inve/$ 9 a

 lifetime income /ream describ$ 9 clause
 7i77,,iii71 ! assumptions prescrib$ "u 
subclause 7,i7 %all1 to ! ext5t         
appropriate1 p]mit adm9i/rators (       
individual acc\nt plans to use ! am\nts 
payable "u su* lifetime income /ream z a
 lifetime income /ream equival5t4  7iv7 
,limitation on liability ,no plan       
fiduci>y1 plan sponsor1 or o!r p]son    
%all h any liability "u ?is title solely
 by reason ( ! provision ( lifetime     
income /ream equival5ts :i* are d]iv$ 9 
accordance ) ! assumptions & rules      
describ$ 9 clause 7iii7 & :i* include ! 
explanations conta9$ 9 ! model lifetime 
income disclosure describ$ 9 clause     
7ii74 ,?is clause %all apply )\t reg>d  
to :e!r ! provision ( su* lifetime      
income /ream equival5t is requir$ by    
subp>agraph 7,b77iii74  7v7 ,effective  
date ,! requirem5t 9 subp>agraph        
7,b77iii7 %all apply to p5sion b5efit   
/atem5ts furni%$ m ?an #ab mon?s aft] ! 
late/ ( ! issuance by ! ,secret>y (--   
7,i7 int]im f9al rules "u clause 7i72   

7,,ii7 ! model disclosure "u clause     
7ii72 or  7,,iii7 ! assumptions "u      
clause 7iii74  4  7c7 ,effective date ,!
 am5dm5ts made by ?is section %all take 
effect on ! date ( ! enactm5t ( ?is     
,act4  #bj4 ,lifetime income safe h>bor 
,section #djd ( ! ,employee ,retirem5t  
,income ,security ,act ( #aigd 7#bi     
,u4,s4,c4 #aajd7 is am5d$ by add+ at !  
end ! foll[+3  7e7 ,safe h>bor = annuity
 selection  7#a7 ,9 g5]al ,) respect to 
! selection ( an insur] & a gu>ante$    
retirem5t income contract1 ! requirem5ts
 ( subsection 7a77#a77;,b7 w be deem$ to
 be satisfi$ if a fiduci>y--  7,a7      
engages 9 an objective1 ?or\gh &        
analytical se>* = ! purpose ( id5tify+  
insur]s f :i* to pur*ase gu>ante$       
retirem5t income contracts2  7,b7 )     
respect to ea* insur] id5tifi$ by !     
fiduci>y "u subp>agraph 7,a7--  7i7     
consid]s ! f9ancial capability ( su*    
insur] to satisfy its obligations "u !  
gu>ante$ retirem5t income contract2 &   
7ii7 consid]s ! co/ 7includ+ fees &     

commissions7 ( ! gu>ante$ retirem5t     
income contract (f]$ by ! insur] 9      
relation to ! b5efits & product features
 ( ! contract & adm9i/rative s]vices to 
be provid$ "u su* contract2 &  7,c7 on !
 basis ( ! =ego+1 concludes t--  7i7 at 
! "t ( ! selection1 ! insur] is         
f9ancially capable ( satisfy+ its       
obligations "u ! gu>ante$ retirem5t     
income contract2 &  7ii7 ! co/ 7includ+ 
fees & commissions7 ( ! select$ gu>ante$
 retirem5t income contract is reasonable
 9 relation to ! b5efits & product      
features ( ! contract & ! adm9i/rative  
s]vices to be provid$ "u su* contract4  
7#b7 ,f9ancial capability ( ! insur] ,= 
purposes ( ?is section1 a fiduci>y w be 
deem$ to satisfy ! requirem5ts (        
p>agraphs 7#a77;,b77i7 & 7#a77;,c77i7   
if--  7,a7 ! fiduci>y obta9s writt5     
repres5tations f ! insur] t--  7i7 !    
insur] is lic5s$ to (f] gu>ante$        
retirem5t income contracts2  7ii7 !     
insur]1 at ! "t ( selection & = ea* ( ! 
imm$iately prec$+ sev5 ye>s--  7,i7     

op]ates "u a c]tificate ( au?ority f !  
,insurance ,commission] ( its domicili>y
 ,/ate t has n be5 revok$ or susp5d$2   
7,,ii7 has fil$ audit$ f9ancial /atem5ts
 9 accordance ) ! laws ( its domicili>y 
,/ate "u applicable /atutory acc\nt+    
pr9ciples2  7,,iii7 ma9ta9s 7& has      
ma9ta9$7 res]ves t satisfies all !      
/atutory requirem5ts ( all ,/ates :]e ! 
insur] does bus9ess2 &  7,,iv7 is n     
op]at+ "u an ord] ( sup]vision1         
rehabilitation1 or liquidation2 &  7iii7
 ! insur] und]goes1 at lea/ e five ye>s1
 a f9ancial exam9ation 7)9 ! mean+ ( !  
law ( its domicili>y ,/ate7 by !        
,insurance ,commission] ( ! domicili>y  
,/ate 7or repres5tative1 designee1 or   
o!r p>ty approv$ !reby72  7,b7 if1      
foll[+ ! issuance ( ! repres5tations    
describ$ 9 clauses 7i7 ?r\gh 7iii7 (    
subp>agraph 7,a71 !re is any *ange t    
w\ld preclude ! insur] f mak+ ! same    
repres5tations at ! "t ( issuance ( !   
gu>ante$ retirem5t income contract1 !   
insur] %all notify ! fiduci>y1 9 advance

 ( ! issuance ( any gu>ante$ retirem5t  
income contract1 t ! fiduci>y c no long]
 rely on "o or m ( ! repres5tations2 &  
7,c7 ! fiduci>y has n receiv$ !         
notification describ$ 9 subp>agraph 7,b7
 & has no o!r facts t w\ld cause x to "q
 ! repres5tations describ$ 9 clauses 7i7
 ?r\gh 7iii7 ( subp>agraph 7,a74  7#c7  
,! f9al regulation describ$ 9 7a7 %all  
cl>ify t ! /&>d ( c>e is n con/ru$ to   
require a fiduci>y to select ! l[e/ co/ 
contract4 ,accord+ly1 a fiduci>y may    
consid] ! value1 includ+ features &     
b5efits ( ! contract & attributes ( !   
insur] 9 conjunction ) ! contract's co/4
 ,attributes ( ! insur] t may be        
consid]$ may include1 )\t limitation1 ! 
issu]'s f9ancial /r5g?4  7#d7 ,"t (     
selection  7,a7 ,= purposes ( p>agraph  
7#a71 ! "t ( selection may be ei!r--    
7i7 ! "t t ! insur] & contract are      
select$ = di/ribution ( b5efits to a    
specific p>ticipant or b5efici>y2 or    
7ii7 ! "t t ! insur] & contract are     
select$ to provide b5efits at future    

dates to p>ticipants or b5efici>ies1    
provid$ t ! select+ fiduci>y p]iodically
 reviews ! cont9u+ appropriat5ess ( !   
conclusion describ$ 9 p>agraph          
7#a77;,c71 tak+ into acc\nt !           
consid]ations describ$ 9 p>agraph 7#a74 
,= purposes ( ?is p>agraph1 a fiduci>y  
is n requir$ to review ! appropriat5ess 
( ?is conclusion foll[+ ! pur*ase ( any 
contract7s7 = specific p>ticipants or   
b5efici>ies4  7,b7 ,= purposes (        
p>agraph 7#d77;,a77ii71 a fiduci>y w be 
deem$ to h conduct$ a p]iodic review ( !
 f9ancial capability ( ! insur] if !    
fiduci>y obta9s ! writt5 repres5tations 
describ$ 9 clauses 7i7 ?r\gh 7iii7 (    
p>agraph 7#b77;,a7 on an annual basis1  
unless1 9 ! int]im1 ! fiduci>y has      
receiv$ ! notice describ$ 9 p>agraph    
7#b77;,b7 or o!rwise becomes aw>e (     
facts t w\ld cause x to "q ! su*        
repres5tations4  7#e7 ,limit$ liability 
,a fiduci>y t is deem$ to satisfy !     
requirem5ts ( ?is section %all n be     
liable foll[+ ! di/ribution ( any b5efit

 or ! inve/m5t by or on behalf ( a      
p>ticipant or b5efici>y pursuant to !   
select$ gu>ante$ retirem5t income       
contract = any losses t may result to ! 
p>ticipant or b5efici>y due to an       
insur]'s inability to satisfy its       
f9ancial obligations "u ! t]ms ( su*    
contract4  7#f7 ,def9itions ,= purposes 
( ?is section--  7,a7 ,insur] ,! t]m    
insur] means an insurance company1      
insurance s]vice or insurance           
organization qualifi$ to d bus9ess 9 a  
,/ate2 & includes affiliates ( su*      
companies to ! ext5t ! affiliate is     
lic5s$ to (f] gu>ante$ retirem5t income 
contracts4  7,b7 ,gu>ante$ retirem5t    
income contract ,! t]m gu>ante$         
retirem5t income contract means an      
annuity contract = a fix$ t]m or a      
contract 7or provision or feature !re(7 
design$ to provide a p>ticipant gu>ante$
 b5efits annually 7or m frequ5tly7 = at 
lea/ ! rema9d] ( ! life ( ! p>ticipant  
or jo9t lives ( ! p>ticipant or !       
p>ticipant's designat$ b5efici>y z "p ( 

an individual acc\nt plan4 ,?is section 
sets =? an optional means by :i* a plan 
fiduci>y w be consid]$ to satisfy !     
responsibilities set =? 9 section       
#djd7;a77#a77;,b7 ) respect to !        
selection ( insur]s & gu>ante$ retirem5t
 income contracts4 ,?is section does n  
e/abli% m9imum requirem5ts or !         
exclusive means = satisfy+ ^!           
responsibilities4  4