,i #aaeth ,,congress #ast ,session ,h4 ,r4 #debc ,,in ,,the ,,house ,,of ,,representatives ,december #a1 #bjag,mr4 ,neal introduced the following bill2 which was referred to the ,committee on ,ways and ,means1 and in addition to the ,committee on ,education and the ,workforce1 for a period to be subsequently determined by the ,speaker1 in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned ,a ,,bill ,to amend the ,internal ,revenue ,code of #aihf to expand retirement plan coverage1 increase retirement security1 and for other purposes4 #a4 ,short title2 table of contents 7a7 ,short title ,this ,act may be cited as the ,automatic ,retirement ,plan ,act of #bjag4 7b7 ,table of contents ,the table of contents of this ,act is as follows3 ,sec4 #a4 ,short title2 table of contents4 ,sec4 #b4 ,employers required to maintain automatic contribution plan4 ,sec4 #c4 ,deferral-only arrangements4 ,sec4 #d4 ,nondiscrimination testing changes to facilitate higher contributions4 ,sec4 #e4 ,multiple employer plans4 ,sec4 #f4 ,limitation on employer liability4 ,sec4 #g4 ,portability of lifetime income options4 ,sec4 #h4 ,increase in credit limitation for small employer pension plan startup costs4 ,sec4 #i4 ,small employer automatic enrollment credit4 ,sec4 #aj4 ,treatment of automatic contribution plans under ,state law4 ,sec4 #aa4 ,matching payments for elective deferral and ,,ira contributions by certain individuals4 ,sec4 #ab4 ,authority to require reporting4 #b4 ,employers required to maintain automatic contribution plan 7a7 ,automatic contribution plan ,section #dad of the ,internal ,revenue ,code of #aihf is amended by adding at the end the following3 7aa7 ,automatic contribution plan ,for purposes of this title-- 7#a7 ,in general ,the term automatic contribution plan means a defined contribution plan that-- 7,a7 is described in clause 7i71 7ii71 or 7iv7 of section #bai7;g77#e77;,a71 7,b7 is described in paragraph 7#b71 and 7,c7 meets the eligibility1 investment1 lifetime income1 and fee requirements described in paragraphs 7#c71 7#d71 7#e71 and 7#f71 respectively1 of this subsection4 7#b7 ,plan described ,a plan is described in this paragraph if the plan is one of the following3 7,a7 ,deferral only ,a deferral only arrangement that meets the requirements of section #dja7k77#ad74 7,b7 #djc7;b7 plan ,a #djc7;b7 plan that-- 7i7 meets the requirements of section #dja7k77#ad71 or 7ii7 would be described in subparagraph 7,c7 without regard to the references to section #daf4 7,c7 ,testing automatic contribution plan ,a plan that-- 7i7 would qualify as a plan described in subparagraph 7,a71 except that such plan allows employer contributions1 and 7ii7 satisfies sections #dja7k77#c77;,a77ii71 #dja7m77#b71 and #daf taking into account all applicable rules1 including-- 7,i7 paragraphs 7#aa71 7#ab71 and 7#ac7 of section #dja7k71 7,,ii7 paragraphs 7#aj71 7#aa71 and 7#ab7 of section #dja7m71 and 7,,iii7 section #daf7;g77#d77;,h74 7,d7 ,grandfathered automatic contribution plan ,a plan described in clause 7i71 7ii71 7iv71 7v71 or 7vi7 of section #bai7;g77#e77;,a7 that-- 7i7 is maintained by an employer as of the date of enactment of the ,automatic ,retirement ,plan ,act of #bjag1 7ii7 has been maintained by such employer 7or a predecessor employer7 for at least #a year before such date of enactment1 and 7iii7 except as provided by the ,secretary1 has not had its coverage or benefits substantially decreased for any plan year beginning after such date of enactment4 7#c7 ,eligibility requirements 7,a7 ,in general ,subject to subparagraph 7,b71 the eligibility requirements described in this paragraph are that all employees of the employer are eligible to participate in an automatic contribution plan maintained by the employer4 7,b7 ,certain exclusions ,subparagraph 7,a7 shall not apply to the following3 7i7 ,individuals less than #ba years old ,the employer may1 but need not1 include an employee who has not attained age #ba in an automatic contribution plan maintained by the employer4 7ii7 ,certain other employees ,the employer may1 but need not1 include an employee described in section #daj7;b77#c7 in an automatic contribution plan maintained by the employer4 7iii7 ,part time employees1 etc ,no employee may be treated as ineligible in an automatic contribution plan maintained by the employer solely by reason of working on a part-time1 temporary1 or seasonal basis1 except as otherwise provided in this subparagraph4 7iv7 ,new employee ,the employer may1 but need not1 exclude an employee from an automatic contribution plan maintained by the employer until the first day of the second calendar month beginning on or after the day the individual begins work for the employer4 7v7 ,seasonal or temporary employees ,the employer may1 but need not1 exclude an employee from an automatic contribution plan maintained by the employer to the extent that such employee is not expected to work during more than three months during the #ab-month period starting when such employee would otherwise be required to be eligible under such plan4 7,c7 ,special rules for controlled groups ,eligible employees within an employer need not be eligible to participate in the same automatic contribution plan4 ,for purposes of this subsection1 the term employer shall include all employers treated as a single employer under subsection 7b71 7c71 7m71 or 7o7 of section #dad4 7,d7 ,special rules for grandfathered plans ,this paragraph shall not apply to a plan described in paragraph 7#b77;,d7 until the sixth plan year beginning on or after the date of enactment of the ,automatic ,retirement ,plan ,act of #bjag4 ,in the case of an eligible employer 7as defined in section #djh7p77#b77;,c77i771 eighth shall be substituted for sixth in the preceding sentence4 7#d7 ,investment requirements ,except in the case of a plan that is an automatic contribution plan by reason of paragraph 7#b77;,d71 any investment made in the absence of an investment election by a participant or beneficiary shall be invested in accordance with regulations prescribed by the ,secretary of ,labor under section #djd7;c77#e7 of the ,employee ,retirement ,income ,security ,act of #aigd4 7#e7 ,lifetime income requirements ,except in the case of a plan that is an automatic contribution plan by reason of paragraph 7#b77;,d71 the lifetime income requirements described in this paragraph are-- 7,a7 ,guaranteed income for life available ,a plan shall not be treated as an automatic contribution plan unless the plan permits participants to elect to receive at least #ej percent of their vested account balance in a form of distribution described in section #dja7;a77#ch77;,b77iii74 7,b7 ,exceptions ,this paragraph shall not apply with respect to any participant whose vested account balance is #e1jjj or less at the time of distribution4 7#f7 ,fee requirements ,under the fee requirements of this paragraph1 no participant may be charged unreasonable fees solely on the basis that the participant's balance in an automatic contribution plan is small or solely on the basis that adoption of such a plan by the employee's employer is mandatory4 4 7b7 ,excise tax for failure ,to maintain automatic contribution plan ,chapter #dc of such ,code is amended by adding at the end the following new section3 #dihj;,j4 ,failure to maintain automatic contribution plan 7a7 ,general rule 7#a7 ,in general ,there is hereby imposed a tax on the failure of an employer to make eligible to participate in an automatic contribution plan maintained by the employer any employee of the employer who1 under the terms of section #dad7;aa71 would be required to be eligible to participate in an automatic contribution plan maintained by the employer4 7#b7 ,exceptions 7,a7 ,paragraph 7#a7 shall not apply to an employer to the extent such employer participates in an arrangement under a qualified ,state law under section #ead7;f77#b7 of the ,employee ,retirement ,income ,security ,act of #aigd4 7,b7 ,paragraph 7#a7 shall not apply to an employer with respect to any employee who is eligible to participate in a different automatic contribution plan than one or more other employees of the employer4 7b7 ,amount of tax 7#a7 ,in general ,the amount of the tax imposed by subsection 7a7 on any failure with respect to an employee shall be #aj for each day in the noncompliance period with respect to such failure4 7#b7 ,noncompliance period ,for purposes of this section1 the term noncompliance period means1 with respect to any failure1 the period-- 7,a7 beginning on the date such failure first occurs1 and 7,b7 ending on the earlier of-- 7i7 the date such failure is corrected1 or 7ii7 with respect to any employer1 the date that is #c months after the last date on which the employee is required to be eligible to participate in an automatic contribution plan maintained by such employer4 7c7 ,limitations on amount of tax 7#a7 ,tax not to apply where failure not discovered exercising reasonable diligence ,no tax shall be imposed by subsection 7a7 on any failure during any period for which it is established to the satisfaction of the ,secretary that none of the persons referred to in subsection 7e7 knew that such failure existed4 7#b7 ,tax not to apply to failures corrected within #i months ,no tax shall be imposed by subsection 7a7 on any failure if-- 7,a7 such failure was due to reasonable cause and not to willful neglect1 and 7,b7 such failure is corrected during the #i-month period beginning on the first date any of the persons referred to in subsection 7e7 knew that such failure existed4 7#c7 ,overall limitation for unintentional failures ,in the case of failures which are due to reasonable cause and not to willful neglect-- 7,a7 ,general rule ,the tax imposed by subsection 7a7 for failures during the taxable year of the employer shall not exceed #ejj1jjj4 7,b7 ,taxable years in the case of certain controlled groups ,for purposes of this subparagraph1 if not all persons who are treated as a single employer for purposes of this section have the same taxable year1 the taxable years taken into account shall be determined under principles similar to the principles of section #aefa4 7#d7 ,waiver by ,secretary ,in the case of a failure which is due to reasonable cause and not to willful neglect1 the ,secretary may waive part or all of the tax imposed by subsection 7a7 to the extent that the payment of such tax would be excessive relative to the failure involved4 7d7 ,tax not ,to apply in certain cases ,this section shall not apply in the case of-- 7#a7 any failure of an employer to meet the requirements of subsection 7a7 with respect to any employee if the failure with respect to such employee occurred during the calendar year immediately following a calendar year during which all employers maintaining such plan normally employed #aj or fewer employees on a typical business day1 7#b7 any governmental plan 7within the meaning of section #dad7;d771 7#c7 any church plan 7within the meaning of section #dad7;e771 or 7#d7 employers that have not been in existence for three years1 taking into account all predecessor employers4 7e7 ,liability for tax ,the employer shall be liable for the tax imposed by subsection 7a7 on a failure4 ,all employers1 determined without regard to subsection 7f77#b71 shall be jointly and severally liable for the liability of any other employer with which they are aggregated under subsection 7f77#b74 7f7 ,definitions ,for purposes of this section-- 7#a7 the term automatic contribution plan has the meaning given such term under section #dad7;aa71 and 7#b7 the term employer includes all employers treated as a single employer under subsection 7b71 7c71 7m71 or 7o7 of section #dad4 4 7c7 ,clerical amendment ,the table of sections for chapter #dc of the ,internal ,revenue ,code of #aihf is amended by adding at the end the following new item3 ,sec4 #dihj;,j4 ,failure to maintain automatic contribution plan4 4 7d7 ,effective date 7#a7 ,in general ,the amendments made by subsection 7a7 shall apply to years beginning after ,december #ca1 #bjag4 7#b7 ,delayed effective date 7,a7 ,large employers ,except as provided in subparagraph 7,b71 the amendments made by subsections 7b7 and 7c7 shall apply to years beginning after ,december #ca1 #bjai4 7,b7 ,small employers ,in the case of an eligible employer 7as defined in section #djh7p77#b77;,c77i7 of the ,internal ,revenue ,code of #aihf71 the amendments made by subsections 7b7 and 7c7 shall apply to years beginning after ,december #ca1 #bjba4 #c4 ,deferral-only arrangements 7a7 ,in general ,subsection 7k7 of section #dja of the ,internal ,revenue ,code of #aihf is amended by adding at the end the following new paragraph3 7#ad7 ,deferral-only arrangement 7,a7 ,in general ,a deferral-only arrangement shall be treated as meeting the requirements of paragraph 7#c77;,a77ii74 7,b7 ,deferral-only arrangement ,for purposes of this paragraph1 the term deferral-only arrangement means any cash or deferred arrangement which meets-- 7i7 the automatic deferral requirements of subparagraph 7,c71 7ii7 the elective contribution requirement of subparagraph 7,d71 and 7iii7 the requirements of subparagraph 7,e7 of paragraph 7#ac74 7,c7 ,automatic deferral 7i7 ,in general ,the requirements of this subparagraph are met if1 under the arrangement1 each employee eligible to participate in the arrangement who is not contributing or is contributing less than the qualified percentage applicable to an eligible employee in the first year of eligibility is treated as having elected in applicable years to have the employer make elective contributions in an amount equal to the qualified percentage of compensation applicable under clause 7iii74 ,in the absence of an election out as described in clause 7ii71 such election shall1 as adjusted under clause 7iii71 remain in effect for all subsequent years1 regardless of whether such years are applicable years4 7ii7 ,election out ,the election treated as having been made under clause 7i7 shall cease to apply with respect to any employee if such employee makes an affirmative election-- 7,i7 to not have such contributions made1 or 7,,ii7 to make elective contributions at a level specified in such affirmative election4 7iii7 ,qualified percentage ,for purposes of this subparagraph1 with respect to any employee1 the term qualified percentage means1 in lieu of the meaning given such term in paragraph 7#ac77;,c77iii71 any percentage determined under the arrangement if such percentage is applied uniformly and is-- 7,i7 at least #f percent1 but not greater than #aj percent1 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 clause 7i7 is made with respect to such employee 7disregarding any elective contribution made for any preceding year that preceded a year in which the employee made an affirmative election described in clause 7ii771 7,,ii7 at least #g percent during the first plan year following the plan year described in subclause 7,i71 7,,iii7 at least #h percent during the first plan year following the plan year described in subclause 7,,ii71 7,,iv7 at least #i percent during the first plan year following the plan year described in subclause 7,,iii71 and 7,v7 ,at least #aj percent during any subsequent plan year4 7iv7 ,applicable year every third year 7,i7 ,in general ,for purposes of this subparagraph1 the term applicable year means1 with respect to an employee1 such employee's first plan year of eligibility under the arrangement1 and all subsequent plan years of eligibility4 7,,ii7 ,exception ,following any applicable year of the employee 7determined after the application of this subclause71 the plan may elect to treat the next one or two plan years as not being applicable years with respect to such employee4 7,d7 ,elective contributions 7i7 ,in general ,the requirements of this subparagraph are met if under the plan containing the arrangement-- 7,i7 the only contributions which may be made are elective contributions of employees who are eligible to participate in the arrangement1 and 7,,ii7 the aggregate amount of such elective contributions which may be made with respect to any employee for any calendar year shall not exceed #h1jjj4 7ii7 ,cost of living adjustment ,in the case of any calendar year beginning after ,december #ca1 #bjah1 the #h1jjj amount under clause 7i7 shall be adjusted in the same manner as cost of living adjustments are made under section #djb7;g77#d71 except that #bjag shall be substituted for #bjje4 7iii7 ,cross reference ,for catch-up contributions for individuals age #ej or over1 see section #dad7v74 4 7b7 ,catch-,up contributions for individuals age #ej and over 7#a7 ,clause 7i7 of section #dad7v77#b77;,b7 of such ,code is amended by inserting 1 #dja7k77#ad71 after #dja7k77#aa74 7#b7 ,section #dad7v77#b77;,b7 of such ,code is amended by adding at the end thereof the following clause3 7iii7 in the case of an applicable employer plan described in section #dja7k77#ad71 the applicable dollar amount is #a1jjj4 4 7#c7 ,section #dad7v77#b77;,c7 of such ,code is amended by-- 7,a7 by striking 7,b77i7 and and inserting 7,b77i71 and by inserting after subparagraph 7,b77ii7 the following3 1 and the #a1jjj amount described in subparagraph 7,b77iii71 and 7,b7 inserting after #bjje the following3 7the calendar quarter beginning ,july #a1 #bjag1 in the case of the #a1jjj amount described in subparagraph 7,b77iii774 7c7 ,simplified reporting ,section #ajd7;a77#b77;,a7 of the ,employee ,retirement ,income ,security ,act of #aigd 7#bi ,u4,s4,c4 #ajbd7;a77#b77 is amended by inserting or for any pension plan which is a deferral-only arrangement described in section #dja7k77#ad77;,b7 of the ,internal ,revenue ,code of #aihf before the period at the end4 7d7 ,plans not treated as top-,heavy plans ,clause 7i7 of section #daf7;g77#d77;,h7 of such ,code is amended by striking or #dja7k77#ac7 and inserting #dja7k77#ac71 or #dja7k77#ad74 7e7 ,effective date ,the amendments made by this section shall apply to plan years beginning after ,december #ca1 #bjag4 #d4 ,nondiscrimination testing changes to facilitate higher contributions 7a7 ,in general ,clause 7iii7 of section #dja7k77#ac77;,c7 of the ,internal ,revenue ,code of #aihf is amended by striking 1 does not exceed #aj percent1 and is at least and inserting and is4 7b7 ,conforming amendments 7#a7 ,subclause 7,i7 of section #dja7k77#ac77;,c77iii7 of such ,code is amended by striking #c percent and inserting at least #c percent1 but not greater than #aj percent14 7#b7 ,subclause 7,,ii7 of section #dja7k77#ac77;,c77iii7 of such ,code is amended by striking #d percent and inserting at least #d percent4 7#c7 ,subclause 7,,iii7 of section #dja7k77#ac77;,c77iii7 of such ,code is amended by striking #e percent and inserting at least #e percent4 7#d7 ,subclause 7,,iv7 of section #dja7k77#ac77;,c77iii7 of such ,code is amended by striking #f percent and inserting at least #f percent4 7c7 ,matching contributions ,clause 7i7 of section #dja7m77#aa77;,b7 of such ,code is amended by striking #f and inserting #aj4 7d7 ,effective date ,the amendments made by this section shall apply to plan years beginning after ,december #ca1 #bjag4 #e4 ,multiple employer plans 7a7 ,qualification requirements 7#a7 ,in general ,section #dac of the ,internal ,revenue ,code of #aihf1 as amended by this ,act1 is amended by adding at the end the following new subsection3 7g7 ,application of qualification requirements for certain multiple employer plans with pooled plan providers 7#a7 ,in general ,except as provided in paragraph 7#b71 a defined contribution plan to which subsection 7c7 applies shall not be treated as failing to meet the requirements under this title applicable to a plan described in section #dja7;a7 or to a plan that consists of individual retirement accounts described in section #djh 7including by reason of subsection 7c7 thereof71 whichever is applicable1 merely because one or more employers of employees covered by the plan fail to take such actions as are required of such employers for the plan to meet such requirements if the plan-- 7,a7 is sponsored by employers all of which have both a common interest other than having adopted the plan and control of the plan1 or 7,b7 in the case of a plan not described in subparagraph 7,a71 has a pooled plan provider4 7#b7 ,limitations 7,a7 ,in general ,paragraph 7#a7 shall not apply to any plan unless the terms of the plan provide that in cases of employers failing to take the actions described in paragraph 7#a7-- 7i7 the assets of the plan attributable to employees of the employer will be transferred to a plan maintained only by the employer 7or its successor71 to an eligible retirement plan as defined in section #djb7;c77#h77;,b7 for each individual whose account is transferred1 or to any other arrangement that the ,secretary determines is appropriate1 unless the ,secretary determines it is in the best interests of such employees to retain the assets in the plan1 and 7ii7 the employer described in clause 7i7 7and not the plan with respect to which the failure occurred or any other participating employer in such plan7 shall1 except to the extent provided by the ,secretary1 be liable for any liabilities with respect to such plan attributable to employees of the employer4 7,b7 ,failures by pooled plan providers ,if the pooled plan provider of a plan described in paragraph 7#a77;,b7 does not perform substantially all of the administrative duties which are required of the provider under paragraph 7#c77;,a77i7 for any plan year1 the ,secretary1 in the ,secretary's own discretion1 may provide that the determination as to whether the plan meets the requirements under this title applicable to a plan described in section #dja7;a7 or to a plan that consists of individual retirement accounts described in section #djh 7including by reason of subsection 7c7 thereof71 whichever is applicable1 shall be made in the same manner as would be made without regard to paragraph 7#a74 7#c7 ,pooled plan provider ,for purposes of this subsection-- 7,a7 ,in general ,the term pooled plan provider means1 with respect to any plan1 a person who-- 7i7 is designated by the terms of the plan as a named fiduciary 7as defined in section #djb7;a77#b7 of the ,employee ,retirement ,income ,security ,act of #aigd71 as the plan administrator1 and as the person responsible to perform all administrative duties 7including conducting proper testing with respect to the plan and employees of each participating employer7 which are reasonably necessary to ensure that-- 7,i7 the plan meets any requirement applicable under the ,employee ,retirement ,income ,security ,act of #aigd or this title to a plan described in section #dja7;a7 or to a plan that consists of individual retirement accounts described in section #djh 7including by reason of subsection 7c7 thereof71 whichever is applicable1 and 7,,ii7 each participating employer takes such actions as the ,secretary or such person determines are necessary for the plan to meet the requirements described in subclause 7,i71 including providing to such person any disclosures or other information which the ,secretary may require or which such person otherwise determines is necessary to administer the plan or to allow the plan to meet such requirements1 7ii7 registers as a pooled plan provider with the ,secretary1 and provides such other information to the ,secretary as the ,secretary may require1 before beginning operations as a pooled plan provider1 7iii7 acknowledges in writing that such person is a named fiduciary 7within the meaning of section #djb7;a77#b7 of the ,employee ,retirement ,income ,security ,act of #aigd71 and the plan administrator1 with respect to the plan1 and 7iv7 is responsible for ensuring that all persons who handle assets of1 or who are fiduciaries of1 the plan are bonded in accordance with section #dab of the ,employee ,retirement ,income ,security ,act of #aigd4 7,b7 ,audits1 examinations1 and investigations ,the ,secretary may perform audits1 examinations1 and investigations of pooled plan providers as may be necessary to enforce and carry out the purposes of this subsection4 7#d7 ,guidance 7,a7 ,in general ,the ,secretary shall issue such guidance as the ,secretary determines appropriate to carry out this subsection1 including guidance-- 7i7 to identify the administrative duties and other actions required to be performed by a pooled plan provider under this subsection1 7ii7 which describes the procedures to be taken to terminate a plan which fails to meet the requirements to be a plan described in paragraph 7#a71 including the proper treatment of1 and actions needed to be taken by1 any participating employer of the plan and the assets and liabilities of the plan with respect to employees of that employer1 and 7iii7 identifying appropriate cases to which the rules of paragraph 7#b77;,a7 will apply to employers failing to take the actions described in paragraph 7#a74 ,the ,secretary shall take into account under clause 7iii7 whether the failure of an employer or pooled plan provider to provide any disclosures or other information1 or to take any other action1 necessary to administer a plan or to allow a plan to meet requirements applicable to the plan under section #dja7;a7 or #djh1 whichever is applicable1 has continued over a period of time that clearly demonstrates a lack of commitment to compliance4 7,b7 ,prospective application ,any guidance issued by the ,secretary under this paragraph shall not apply to any action or failure occurring before the issuance of such guidance4 7#e7 ,model plan ,no later than ,june #cj1 #bjah1 the ,secretary shall1 in consultation with the ,secretary of ,labor when appropriate1 publish model plan language which meets the requirements of this subsection and of paragraphs 7#dc7 and 7#dd7 of section #c of the ,employee ,retirement ,income ,security ,act of #aigd and which may be adopted in order for a plan to be treated as a plan described in paragraph 7#a77;,b74 ,such model plans shall also include options under which they can be used by plans that are not pooled employer plans4 4 7#b7 ,conforming amendment ,paragraph 7#c7 of section #dac7;b7 of such ,code is amended by striking section #dja7;a7 and inserting sections #dja7;a7 and #djh7;c74 7#c7 ,technical amendment ,subsection 7c7 of section #djh of such ,code is amended by inserting after paragraph 7#b7 the following new paragraph3 7#c7 ,there is a separate accounting for any interest of an employee or member 7or spouse of an employee or member7 in a ,roth ,,ira4 4 7b7 ,no common interest required for pooled employer plans ,section #c7b7 of the ,employee ,retirement ,income ,security ,act of #aigd 7#bi ,u4,s4,c4 #ajjb7b77 is amended by adding at the end the following3 7,c7 ,a pooled employer plan shall be treated as-- 7i7 a single employee pension benefit plan or single pension plan1 and 7ii7 a plan to which section #baj7;a7 applies4 4 7c7 ,pooled employer plan and provider defined 7#a7 ,in general ,section #c of the ,employee ,retirement ,income ,security ,act of #aigd 7#bi ,u4,s4,c4 #ajjb7 is amended by adding at the end the following3 7#dc7 ,pooled employer plan 7,a7 ,in general ,the term pooled employer plan means a plan-- 7i7 which is an individual account plan established or maintained for the purpose of providing benefits to the employees of two or more employers2 7ii7 which is a plan described in section #dja7;a7 of the ,internal ,revenue ,code of #aihf which includes a trust exempt from tax under section #eja7;a7 of such ,code or a plan that consists of individual retirement accounts described in section #djh of such ,code 7including by reason of subsection 7c7 thereof72 and 7iii7 the terms of which meet the requirements of subparagraph 7,b74 ,such term shall not include a plan with respect to which all of the participating employers have both a common interest other than having adopted the plan and control of the plan4 7,b7 ,requirements for plan terms ,the requirements of this subparagraph are met with respect to any plan if the terms of the plan-- 7i7 designate a pooled plan provider and provide that the pooled plan provider is a named fiduciary of the plan2 7ii7 designate one or more trustees meeting the requirements of section #djh7;a77#b7 of the ,internal ,revenue ,code of #aihf 7other than a participating employer7 to be responsible for collecting contributions to1 and holding the assets of1 the plan and require such trustees to implement written contribution collection procedures that are reasonable1 diligent1 and systematic2 7iii7 except as provided in section #djd7;e71 provide that each participating employer retains fiduciary responsibility for-- 7,i7 the selection and monitoring in accordance with section #djd7;a7 of the person designated as the pooled plan provider and any other person who1 in addition to the pooled plan provider1 is designated as a named fiduciary of the plan2 and 7,,ii7 to the extent not otherwise delegated to another fiduciary by the pooled plan provider and subject to the provisions of section #djd7;c71 the investment and management of that portion of the plan's assets attributable to the employees of that participating employer2 7iv7 provide that a participating employer1 or a participant or beneficiary1 is not subject to unreasonable restrictions1 fees1 or penalties with regard to ceasing participation1 receipt of distributions1 or otherwise transferring assets of the plan in accordance with section #bjh or paragraph 7#dd77;,c77i77,,ii72 7v7 require-- 7,i7 the pooled plan provider to provide to participating employers any disclosures or other information which the ,secretary may require1 including1 as applicable1 any disclosures or other information to facilitate the selection or any monitoring of the pooled plan provider by participating employers2 and 7,,ii7 each participating employer to take such actions as the ,secretary or the pooled plan provider determines are necessary to administer the plan or for the plan to meet any requirement applicable under this ,act or the ,internal ,revenue ,code of #aihf to a plan described in section #dja7;a7 of such ,code or to a plan that consists of individual retirement accounts described in section #djh of such ,code 7including by reason of subsection 7c7 thereof71 whichever is applicable1 including providing any disclosures or other information which the ,secretary may require or which the pooled plan provider otherwise determines is necessary to administer the plan or to allow the plan to meet such requirements2 and 7vi7 provide that any disclosure or other information required to be provided under clause 7v7 may be provided in electronic form and will be designed to ensure only reasonable costs are imposed on pooled plan providers and participating employers4 7,c7 ,exceptions ,the term pooled employer plan does not include-- 7i7 a multiemployer plan2 7ii7 a plan established before ,january #a1 #bjaf1 unless the plan administrator elects that the plan will be treated as a pooled employer plan and the plan meets the requirements of this title applicable to a pooled employer plan established on or after such date2 and 7iii7 a plan with respect to which all of the participating employers have both a common interest other than having adopted the plan and control of the plan4 7#dd7 ,pooled plan provider 7,a7 ,in general ,the term pooled plan provider means a person who-- 7i7 is designated by the terms of a pooled employer plan as a named fiduciary1 as the plan administrator1 and as the person responsible for the performance of all administrative duties 7including conducting proper testing with respect to the plan and employees of each participating employer7 which are reasonably necessary to ensure that-- 7,i7 the plan meets any requirement applicable under this ,act or the ,internal ,revenue ,code of #aihf to a plan described in section #dja7;a7 of such ,code or to a plan that consists of individual retirement accounts described in section #djh of such ,code 7including by reason of subsection 7c7 thereof71 whichever is applicable2 and 7,,ii7 each participating employer takes such actions as the ,secretary or pooled plan provider determines are necessary for the plan to meet the requirements described in subclause 7,i71 including providing the disclosures and information described in paragraph 7#dc77;,b77v77,,ii72 7ii7 registers as a pooled plan provider with the ,secretary1 and provides to the ,secretary such other information as the ,secretary may require1 before beginning operations as a pooled plan provider2 7iii7 acknowledges in writing that such person is a named fiduciary1 and the plan administrator1 with respect to the pooled employer plan2 and 7iv7 is responsible for ensuring that all persons who handle assets of1 or who are fiduciaries of1 the pooled employer plan are bonded in accordance with section #dab4 7,b7 ,audits1 examinations1 and investigations ,the ,secretary may perform audits1 examinations1 and investigations of pooled plan providers as may be necessary to enforce and carry out the purposes of this paragraph and paragraph 7#dc74 7,c7 ,guidance 7i7 ,in general ,the ,secretary shall issue such guidance as the ,secretary determines appropriate to carry out this paragraph and paragraph 7#dc71 including guidance-- 7,i7 to identify the administrative duties and other actions required to be performed by a pooled plan provider under either such paragraph2 and 7,,ii7 which requires in appropriate cases that if a participating employer fails to take the actions required under subparagraph 7,a77i77,,ii7-- 7aa7 the assets of the plan attributable to employees of the participating employer are transferred to a plan maintained only by the participating employer 7or its successor71 to an eligible retirement plan as defined in section #djb7;c77#h77;,b7 of the ,internal ,revenue ,code of #aihf for each individual whose account is transferred1 or to any other arrangement that the ,secretary determines is appropriate in such guidance2 and 7bb7 the participating employer described in item 7aa7 7and not the plan with respect to which the failure occurred or any other participating employer in such plan7 shall1 except to the extent provided in such guidance1 be liable for any liabilities with respect to such plan attributable to employees of the participating employer4 ,the ,secretary shall take into account under subclause 7,,ii7 whether the failure of an employer or pooled plan provider to provide any disclosures or other information1 or to take any other action1 necessary to administer a plan or to allow a plan to meet requirements described in subparagraph 7,a77i77,,ii7 has continued over a period of time that clearly demonstrates a lack of commitment to compliance4 ,the ,secretary may waive the requirements of subclause 7,,ii77aa7 in appropriate circumstances if the ,secretary determines it is in the best interests of the employees of the participating employer described in such clause to retain the assets in the plan with respect to which the employer's failure occurred4 7ii7 ,prospective application ,any guidance issued by the ,secretary under this subparagraph shall not apply to any action or failure occurring before the issuance of such guidance4 7,d7 ,aggregation rules ,for purposes of this paragraph-- 7i7 ,in general ,in determining whether a person meets the requirements of this paragraph to be a pooled plan provider with respect to any plan1 all persons who are members of the same controlled group and who perform services for the plan shall be treated as one person4 7ii7 ,members of common group ,persons shall be treated as members of the same controlled group if such persons are treated as a single employer under subsection 7c7 or 7d7 of section #baj4 4 7#b7 ,bonding requirements for pooled employer plans ,the last sentence of section #dab7;a7 of the ,employee ,retirement ,income ,security ,act of #aigd 7#bi ,u4,s4,c4 #aaab7;a77 is amended by inserting or in the case of a pooled employer plan 7as defined in section #c7dc7 after section #djg7;d77#a774 7#c7 ,conforming and technical amendments ,section #c of the ,employee ,retirement ,income ,security ,act of #aigd 7#bi ,u4,s4,c4 #ajjb7 is amended-- 7,a7 in paragraph 7#af77;,b7-- 7i7 by striking or at the end of clause 7ii72 and 7ii7 by striking the period at the end and inserting 1 or 7iv7 in the case of a pooled employer plan1 the pooled plan provider42 and 7,b7 by striking the second paragraph 7#da74 7d7 ,effective date 7#a7 ,in general ,the amendments made by this section shall apply to years beginning after ,december #ca1 #bjai4 7#b7 ,rule of construction ,nothing in the amendments made by subsection 7a7 shall be construed as limiting the authority of the ,secretary of the ,treasury or the ,secretary's delegate 7determined without regard to such amendment7 to provide for the proper treatment of a failure to meet any requirement applicable under the ,internal ,revenue ,code of #aihf with respect to one employer 7and its employees7 in a multiple employer plan4 #f4 ,limitation on employer liability ,section #djd of the ,employee ,retirement ,income ,security ,act of #aigd 7#bi ,u4,s4,c4 #ajba et seq47 is amended by adding at the end the following3 7e7 7#a7 ,an eligible employer 7as defined in section #djh7p77#b77;,c77i7 of the ,internal ,revenue ,code of #aihf7 shall not be a fiduciary in any respect with respect to a pooled employer plan1 including with respect to the selection or monitoring of any plan service provider or any investment under the plan1 if the pooled plan provider-- 7,a7 receives no more than reasonable compensation for its services1 as agreed to by the eligible employer1 and 7,b7 agrees in the plan document to-- 7i7 comply with all requirements applicable to a pooled plan provider under this title1 and 7ii7 assume1 with respect to such eligible employer as agreed to by the eligible employer1 all fiduciary responsibility with respect to the plan not retained by the eligible employer1 and 7,c7 notifies the eligible employer of its obligations under the pooled employer plan4 7#b7 ,notwithstanding paragraph 7#a71 eligible employers participating in such a pooled employer plan shall be responsible for-- 7,a7 meeting the enrollment requirements applicable to such employer under the plan1 7,b7 transmitting contributions to the plan in accordance with the terms of the plan1 7,c7 providing such information and assistance as is within the sole control of the eligible employer and is needed by the plan to operate in accordance with the plan document1 and 7,d7 providing such other information or assistance in accordance with regulations prescribed by the ,secretary4 4 #g4 ,portability of lifetime income options 7a7 ,in general ,subsection 7a7 of section #dja of the ,internal ,revenue ,code of #aihf is amended by inserting after paragraph 7#cg7 the following new paragraph3 7#ch7 ,portability of lifetime income and managed account options 7,a7 ,in general ,a trust forming part of a defined contribution plan shall not be treated as failing to constitute a qualified trust under this section solely by reason of allowing-- 7i7 qualified distributions of a lifetime income investment or a managed account investment1 or 7ii7 distributions of a lifetime income investment in the form of a qualified plan distribution annuity contract1 on or after the date that is #ij days prior to the date on which such lifetime income investment or such managed account investment is no longer authorized to be held as an investment option under the plan except as may otherwise be provided by regulations4 7,b7 ,definitions ,for purposes of this subsection-- 7i7 the term qualified distribution means a direct trustee-to-trustee transfer to an eligible retirement plan 7as defined in section #djb7;c77#h77;,b771 as described in section #dja7;a77#ca77;,a71 and in the case of a managed account investment1 the eligible retirement plan must be maintained by the account manager of such managed account investment1 7ii7 the term lifetime income investment means an investment option that is designed to provide an employee with election rights-- 7,i7 that are not uniformly available with respect to other investment options under the plan1 and 7,,ii7 that are to a lifetime income feature available through a contract or other arrangement offered under the plan or under another eligible retirement plan 7as defined in section #djb7;c77#h77;,b77 through a direct trustee-to-trustee transfer to such other eligible retirement plan under section #dja7;a77#ca77;,a71 7iii7 the term lifetime income feature means-- 7,i7 a feature that guarantees a minimum level of income annually 7or more frequently7 for at least the remainder of the life of the employee or the joint lives of the employee and the employee's designated beneficiary1 or 7,,ii7 an annuity payable on behalf of the employee under which payments are made in substantially equal periodic payments 7not less frequently than annually7 over the life of the employee or the joint lives of the employee and the employee's designated beneficiary1 7iv7 the term qualified plan distribution annuity contract means an annuity contract purchased for a participant and distributed to the participant by a plan described in subparagraph 7,b7 of section #djb7;c77#h7 7without regard to clauses 7i7 and 7ii7 thereof71 7v7 the term managed account investment means an investment option under which the assets of the employee's individual account are managed by an account manager1 applying generally accepted investment theories1 to achieve varying degrees of long-term appreciation and capital preservation based on the employee's age1 target retirement date or life expectancy1 7vi7 the term account manager means an investment manager 7within the meaning of section #c7ch7 of the ,employee ,retirement ,income ,security ,act71 and 7vii7 a lifetime income investment or managed account investment is treated as no longer authorized to be held as an investment under the plan if such treatment applies to all plan participants or to a class of such participants1 as determined in any reasonable manner4 4 7b7 ,cash or deferred arrangement ,clause 7i7 of section #dja7k77#b77;,b7 of such ,code is amended by striking or at the end of subclause 7,,iv71 by striking and at the end of subclause 7,v7 and inserting or1 and by adding at the end of clause 7i7 the following3 7,,vi7 with respect to amounts invested in a lifetime income investment 7as defined in section #dja7;a77#ch77;,b77ii77 or a managed account investment 7as defined in section #dja7;a77#ch77;,b77v771 the date that is #ij days prior to the date that such lifetime income investment or such managed account investment may no longer be held as an investment option under the plan 7within the meaning of section #dja7;a77#ch77;,b77vii771 provided that any distribution under this subclause must be in the form of a qualified distribution 7as defined in section #dja7;a77#ch77;,b77i77 or1 in the case of a lifetime income investment1 a qualified plan distribution annuity contract 7as defined in section #dja7;a77#ch77;,b77iv771 and 4 7c7 ,section #djc7;b7 plans 7#a7 ,annuity contracts ,paragraph 7#aa7 of section #djc7;b7 of such ,code is amended by striking or at the end of subparagraph 7,b71 by striking the period at the end of subparagraph 7,c71 and by inserting 1 or1 and by adding at the end the following3 7,d7 with respect to amounts invested in a lifetime income investment 7as defined in section #dja7;a77#ch77;,b77ii77 or a managed account investment 7as defined in section #dja7;a77#ch77;,b77v771 the date that is #ij days prior to the date that such lifetime income investment or such managed account investment may no longer be held as an investment option under the plan 7within the meaning of section #dja7;a77#ch77;,b77vii771 provided that any distribution under this subparagraph must be in the form of a qualified distribution 7as defined in section #dja7;a77#ch77;,b77i77 or1 in the case of a lifetime income investment1 a qualified plan distribution annuity contract 7as defined in section #dja7;a77#ch77;,b77iv774 4 7#b7 ,custodial accounts ,clause 7ii7 of section #djc7;b77#g77;,a7 of such ,code is amended to read as follows3 7ii7 under the custodial account1 no such amounts may be paid or made available to any distributee 7unless such amount is a distribution to which section #gb7t77#b77;,g7 applies7 before-- 7,i7 the employee dies1 7,,ii7 the employee attains age #ei1 7,,iii7 the employee has a severance from employment1 7,,iv7 the employee becomes disabled 7within the meaning of section #gb7m77#g771 7,v7 in the case of contributions made pursuant to a salary reduction agreement 7within the meaning of section #caba7;a77#e77;,d771 the employee encounters financial hardship1 or 7,,vi7 with respect to amounts invested in a lifetime income investment 7as defined in section #dja7;a77#ch77;,b77ii77 or a managed account investment 7as defined in section #dja7;a77#ch77;,b77v771 the date that is #ij days prior to the date that such lifetime income investment or such managed account investment may no longer be held as an investment option under the plan 7within the meaning of section #dja7;a77#ch77;,b77vii771 provided that any distribution under this subparagraph must be in the form of a qualified distribution 7as defined in section #dja7;a77#ch77;,b77i77 or1 in the case of a lifetime income investment1 a qualified plan distribution annuity contract 7as defined in section #dja7;a77#ch77;,b77iv774 4 7d7 ,eligible deferred compensation plans ,subparagraph 7,a7 of section #deg7;d77#a7 of such ,code is amended by striking or at the end of clause 7ii71 by inserting or at the end of clause 7iii71 and by adding after clause 7iii7 the following3 7iv7 with respect to amounts invested in a lifetime income investment 7as defined in section #dja7;a77#ch77;,b77ii77 or a managed account investment 7as defined in section #dja7;a77#ch77;,b77v771 the date that is #ij days prior to the date that such lifetime income investment or such managed account investment may no longer be held as an investment option under the plan 7within the meaning of section #dja7;a77#ch77;,b77vii771 provided that any distribution under this subparagraph must be in the form of a qualified distribution 7as defined in section #dja7;a77#ch77;,b77i77 or1 in the case of a lifetime income investment1 a qualified plan distribution annuity contract 7as defined in section #dja7;a77#ch77;,b77iv771 4 7e7 ,effective date ,the amendments made by this section shall apply to plan years beginning after ,december #ca1 #bjag4 #h4 ,increase in credit limitation for small employer pension plan startup costs 7a7 ,in general ,paragraph 7#a7 of section #de;,e7b7 of the ,internal ,revenue ,code of #aihf is amended to read as follows3 7#a7 for the first credit year and each of the #d taxable years immediately following the first credit year1 the greater of-- 7,a7 #ejj1 or 7,b7 the lesser of-- 7i7 #bej for each employee of the eligible employer who is not a highly compensated employee 7as defined in section #dad7q77 and who is eligible to participate in the eligible employer plan maintained by the eligible employer1 or 7ii7 #e1jjj1 and 4 7b7 ,special rule for employers with #be or fewer employees ,subsection 7a7 of section #de;,e of such ,code is amended by inserting before the period at the end the following3 7#ajj percent of such costs in the case of an eligible employer with #be or fewer employees1 as determined by substituting #be for #ajj in section #djh7p77#b77;,c77i774 7c7 ,automatic contribution plan ,paragraph 7#b7 of section #de;,e7d7 of such ,code is amended by striking a qualified employer plan within the meaning of section #digb7;d7 and inserting an automatic contribution plan within the meaning of section #dad7;aa74 7d7 ,conforming change ,paragraph 7#b7 of section #de;,e7d7 of such ,code is amended by adding at the end thereof the following3 ,for purposes of this section1 the term qualified employer plan has the meaning given such term under section #digb7;d744 7e7 ,effective date ,the amendment made by this section shall apply to taxable years beginning after ,december #ca1 #bjag4 #i4 ,small employer automatic enrollment credit 7a7 ,in general ,subpart ,d of part ,,iv of subchapter ,a of chapter #a of the ,internal ,revenue ,code of #aihf is amended by adding at the end the following new section3 #de,s4 ,auto-enrollment credit for retirement savings options provided by small employers 7a7 ,in general ,for purposes of section #ch1 in the case of an eligible employer1 the retirement auto-enrollment credit determined under this section for any taxable year is an amount equal to-- 7#a7 #ejj for any taxable year occurring during the credit period1 and 7#b7 zero for any other taxable year4 7b7 ,credit period ,for purposes of subsection 7a7-- 7#a7 ,in general ,the credit period with respect to any eligible employer is the #e-taxable-year period beginning with the first taxable year for which the employer adopts an automatic contribution plan 7as defined in section #dad7;aa771 determined without regard to a plan described in section #dad7;aa77#b77;,d7 7relating to a grandfathered automatic contribution plan74 7#b7 ,maintenance of arrangement ,no taxable year with respect to an employer shall be treated as occurring within the credit period unless the arrangement described in section #dja7k77#ad77;,c7 is included in the plan for such year4 7c7 ,eligible employer ,for purposes of this section1 the term eligible employer has the meaning given such term in section #djh7p77#b77;,c77i74 4 7b7 ,credit ,to be part of general business credit ,subsection 7b7 of section #ch of the ,internal ,revenue ,code of #aihf is amended by striking plus at the end of paragraph 7#ce71 by striking the period at the end of paragraph 7#cf7 and inserting 1 plus1 and by adding at the end the following new paragraph3 7#cg7 in the case of an eligible employer 7as defined in section #de,s7c771 the retirement auto-enrollment credit determined under section #de,s7a74 4 7c7 ,clerical amendment ,the table of sections for subpart ,d of part ,,iv of subchapter ,a of chapter #a of the ,internal ,revenue ,code of #aihf is amended by inserting after the item relating to section #de,r the following new item3 ,sec4 #de,s4 ,auto-enrollment credit for retirement savings options provided by small employers4 4 7d7 ,effective date ,the amendments made by this section shall apply to taxable years beginning after ,december #ca1 #bjag4 #aj4 ,treatment of automatic contribution plans under ,state law 7a7 ,in general ,section #ead of the ,employee ,retirement ,income ,security ,act of #aigd 7#bi ,u4,s4,c4 #aadd7 is amended by adding at the end the following3 7f7 ,automatic contribution plans 7#a7 ,in general ,if an employer maintains an automatic contribution plan 7as defined in section #dad7;aa7 of the ,internal ,revenue ,code of #aihf7 that satisfies the requirements of section #dad7;aa77#c7 7without regard to subparagraph 7,d7 thereof71 the employer-- 7,a7 shall not be subject to any requirement imposed by a ,state or political subdivision thereof to contribute to an individual retirement plan 7as defined in section #ggja7;a77#cg7 of the ,internal ,revenue ,code of #aihf7 established and maintained pursuant to a payroll deduction savings program of a ,state or political subdivision thereof1 and 7,b7 shall not be required to participate in any manner in such a payroll deduction savings program4 7#b7 ,qualified ,state law exception ,this subsection shall not apply with respect to any employer to the extent that such employer participates in an arrangement under a qualified ,state law4 7#c7 ,qualified ,state law ,for purposes of this subsection-- 7,a7 ,in general ,the term qualified ,state law means a ,state law that-- 7i7 was enacted before the date of enactment of the ,automatic ,retirement ,plan ,act of #bjag1 7ii7 7,i7 requires certain employers to contribute to1 or participate in1 an individual retirement plan 7as defined in section #ggja7;a77#cg7 of such ,code7 established and maintained pursuant to a payroll deduction savings program of the ,state1 or 7,,ii7 allows certain employers to contribute to1 or participate in1 a plan described in section #dac7;c7 of such ,code established and maintained by the ,state1 and 7iii7 is not superseded by this title 7determined without regard to this subsection74 7,b7 ,exception ,if a ,state law described in subparagraph 7,a77ii7 is amended after the date of enactment of the ,automatic ,retirement ,plan ,act of #bjag to materially expand the scope of the requirement described in subparagraph 7,a77ii77,i7 or the availability of a plan described in subparagraph 7,a77ii77,,ii71 the ,state law shall1 as of the effective date of such amendment1 cease to treated as a qualified ,state law4 4 7b7 ,effective date ,the amendments made by this section shall apply to plan years beginning after ,december #ca1 #bjag4 #aa4 ,matching payments for elective deferral and ,,ira contributions by certain individuals 7a7 ,in general ,subchapter ,b of chapter #fe of the ,internal ,revenue ,code of #aihf is amended by adding at the end the following new section3 #fdcc4 ,matching payments for elective deferral and ,,ira contributions by certain individuals 7a7 ,in general 7#a7 ,allowance of credit ,any eligible individual who makes qualified retirement savings contributions for the taxable year shall be allowed a credit for such taxable year in an amount equal to the applicable percentage of so much of the qualified retirement savings contributions made by such eligible individual for the taxable year as does not exceed #a1jjj4 7#b7 ,payment of credit ,the credit under this section shall be paid by the ,secretary as a contribution 7as soon as practicable after the eligible individual has filed a tax return for the taxable year7 to the applicable retirement vehicle of the eligible individual4 7b7 ,applicable percentage ,for purposes of this section-- 7#a7 ,in general ,except as provided in paragraph 7#b71 the applicable percentage is #ej percent4 7#b7 ,phaseout ,the percentage under paragraph 7#a7 shall be reduced 7but not below zero7 by the number of percentage points which bears the same ratio to #ej percentage points as-- 7,a7 the excess of-- 7i7 the taxpayer's modified adjusted gross income for such taxable year1 over 7ii7 the applicable dollar amount1 bears to 7,b7 the phaseout range4 ,if any reduction determined under this paragraph is not a whole percentage point1 such reduction shall be rounded to the next lowest whole percentage point4 7#c7 ,applicable dollar amount2 phaseout range 7,a7 ,joint returns ,except as provided in subparagraph 7,b7-- 7i7 the applicable dollar amount is #fe1jjj1 and 7ii7 the phaseout range is #bj1jjj4 7,b7 ,other returns ,in the case of-- 7i7 a head of a household 7as defined in section #b7;b771 the applicable dollar amount and the phaseout range shall be of the amounts applicable under subparagraph 7,a7 7as adjusted under subsection 7g771 and 7ii7 any taxpayer who is not filing a joint return and who is not a head of a household 7as so defined71 the applicable dollar amount and the phaseout range shall be of the amounts applicable under subparagraph 7,a7 7as so adjusted74 7c7 ,eligible individual ,for purposes of this section-- 7#a7 ,in general ,the term eligible individual means any individual if such individual has attained the age of #ah as of the close of the taxable year4 7#b7 ,dependents and full-time students not eligible ,the term eligible individual shall not include-- 7,a7 any individual with respect to whom a deduction under section #aea is allowed to another taxpayer for a taxable year beginning in the calendar year in which such individual's taxable year begins1 and 7,b7 any individual who is a student 7as defined in section #aeb7;f77#b774 7d7 ,qualified retirement savings contributions ,for purposes of this section-- 7#a7 ,in general ,the term qualified retirement savings contributions means1 with respect to any taxable year1 the sum of-- 7,a7 the amount of the qualified retirement contributions 7as defined in section #bai7;e77 made by the eligible individual1 7,b7 the amount of-- 7i7 any elective deferrals 7as defined in section #djb7;g77#c77 of such individual1 and 7ii7 any elective deferral of compensation by such individual under an eligible deferred compensation plan 7as defined in section #deg7;b77 of an eligible employer described in section #deg7;e77#a77;,a71 and 7,c7 the amount of voluntary employee contributions by such individual to any qualified retirement plan 7as defined in section #digd7;c774 ,such term shall not include any amount attributable to a payment under subsection 7a74 7#b7 ,reduction for certain distributions 7,a7 ,in general ,the qualified retirement savings contributions determined under paragraph 7#a7 for a taxable year shall be reduced 7but not below zero7 by the aggregate distributions received by the individual during the testing period from any entity of a type to which contributions under paragraph 7#a7 may be made4 7,b7 ,testing period ,for purposes of subparagraph 7,a71 the testing period1 with respect to a taxable year1 is the period which includes-- 7i7 such taxable year1 7ii7 the #b preceding taxable years1 and 7iii7 the period after such taxable year and before the due date 7including extensions7 for filing the return of tax for such taxable year4 7,c7 ,excepted distributions ,there shall not be taken into account under subparagraph 7,a7-- 7i7 any distribution referred to in section #gb7p71 #dja7k77#h71 #dja7m77#f71 #djb7;g77#b71 #djd7k71 or #djh7;d77#d71 7ii7 any distribution to which section #djh7;d77#c7 or #djh;,a7d77#c7 applies1 and 7iii7 any portion of a distribution if such portion is transferred or paid in a rollover contribution 7as defined in section #djb7;c71 #djc7;a77#d71 #djc7;b77#h71 #djh;,a7e71 or #deg7;e77#af77 to an account or plan to which qualified retirement contributions can be made4 7,d7 ,treatment of distributions received by spouse of individual ,for purposes of determining distributions received by an individual under subparagraph 7,a7 for any taxable year1 any distribution received by the spouse of such individual shall be treated as received by such individual if such individual and spouse file a joint return for such taxable year and for the taxable year during which the spouse receives the distribution4 7e7 ,applicable retirement savings vehicle 7#a7 ,in general ,the term applicable retirement savings vehicle means-- 7,a7 an account or plan elected by the eligible individual under paragraph 7#b71 or 7,b7 if no such election is made1 a retirement bond purchased by the ,secretary for the benefit of the eligible individual4 7#b7 ,other retirement vehicles ,an eligible individual may elect to have the amount determined under subsection 7a7 contributed to an account or plan which-- 7,a7 is a ,roth ,,ira 7as defined in section #djh;,a71 or a designated ,roth account 7within the meaning of section #djb;,a7 of an applicable retirement plan 7as defined in section #djb;,a7e77#a771 7,b7 is for the benefit of the eligible individual1 7,c7 accepts contributions made under this section1 and 7,d7 is designated by such individual 7in such form and manner as the ,secretary may provide7 on the return of tax for the taxable year4 7#c7 ,retirement bond 7,a7 ,in general ,for purposes of this section1 the term retirement bond means a bond issued under chapter #ca of title #ca1 ,united ,states ,code1 which by its terms1 or by regulations prescribed by the ,secretary under such chapter-- 7i7 provides for interest to be credited at rates that take into account the expected duration of the funds invested in retirement bonds and at rates determined or adjusted in a manner and with sufficient frequency to provide substantial protection from inflation1 7ii7 is not transferable1 and 7iii7 is designed for investment for retirement4 7,b7 ,roth ,,ira rules applicable ,the provisions of this title applicable to a ,roth ,,ira1 including provisions relating to contributions1 holding and distributions1 shall apply to a retirement bond1 except as determined by the ,secretary4 7,c7 ,regulations ,the ,secretary may issue such regulations as are necessary to carry out the purposes of this section1 including-- 7i7 establishment of procedures to communicate to individuals the importance of investment diversification and the transfer option described in clause 7ii71 7ii7 simplified procedures under which holders of retirement bonds may periodically choose to have the bonds or their proceeds transferred to available ,roth ,i,r,as1 and 7iii7 means by which individuals may elect 7or be treated as electing7 whether to have retirement bonds or their proceeds so transferred4 ,any such transfer shall be treated as a rollover contribution for purposes of section #djh7;d77#c7 7other than subparagraph 7,b7 thereof74 7f7 ,other definitions and special rules 7#a7 ,modified adjusted gross income ,for purposes of this section1 the term modified adjusted gross income means adjusted gross income-- 7,a7 determined without regard to sections #iaa1 #ica1 and #icc1 and 7,b7 determined without regard to any exclusion or deduction allowed for any qualified retirement savings contribution made during the taxable year4 7#b7 ,treatment of contributions ,in the case of any contribution under subsection 7a77#b7-- 7,a7 except as otherwise provided in this section or by the ,secretary under regulations1 such contribution shall be treated in the same manner as a contribution made by the individual on whose behalf such contribution was made1 7,b7 such contribution shall not be treated as income to the taxpayer1 and 7,c7 such contribution shall not be taken into account with respect to any applicable limitation under sections #djb7;g77#a71 #djc7;b71 #djh7;a77#a71 #djh7;b77#b77;,b71 #djh;,a7c77#b71 #dad7v77#b71 #dae7;c71 or #deg7;b77#b74 7#c7 ,treatment of qualified plans1 etc ,a plan or arrangement to which a contribution is made under this section shall not be treated as violating any requirement under section #dja1 #djc1 #djh1 or #deg solely by reason of accepting such contribution4 7#d7 ,erroneous credits ,if any contribution is erroneously paid under subsection 7a77#b71 the amount of such erroneous payment shall be treated as an underpayment of tax4 7g7 ,inflation adjustments 7#a7 ,in general ,in the case of any taxable year beginning in a calendar year after #bjah1 each of the dollar amounts in subsections 7a77#b7 and 7b77#c77;,a77i7 shall be increased by an amount equal to-- 7,a7 such dollar amount1 multiplied by 7,b7 the cost-of-living adjustment determined under section #a7;f77#c7 for the calendar year in which the taxable year begins1 determined by substituting calendar year #bjag for calendar year #aiib in subparagraph 7,b7 thereof4 7#b7 ,rounding ,any increase determined under paragraph 7#a7 shall be rounded to the nearest multiple of-- 7,a7 #ajj in the case of an adjustment of the amount in subsection 7a77#b71 and 7,b7 #a1jjj in the case of an adjustment of the amount in subsection 7b77#c77;,a77i74 4 7b7 ,promotion and guidance 7#a7 ,promotion ,the ,secretary of the ,treasury 7or the ,secretary's delegate7 shall educate taxpayers on the benefits provided under section #fdcc of the ,internal ,revenue ,code of #aihf4 7#b7 ,guidance ,not later than ,december #ca1 #bjag1 the ,secretary of the ,treasury 7or the ,secretary's delegate7 shall issue guidance on the implementation and administration of the amendments made by this section4 7c7 ,payment authority ,section #acbd7;b77#b7 of title #ca1 ,united ,states ,code1 is amended by striking or #fdca and inserting #fdca1 or #fdcc4 7d7 ,deficiencies ,section #fbaa7;b77#d7 is amended by striking and #fdca and inserting #fdca1 and #fdcc4 7e7 ,conforming amendments 7#a7 ,section #be;,b of the ,internal ,revenue ,code of #aihf is amended by striking subsections 7a7 through 7f7 and inserting the following3 ,for payment of credit related to qualified retirement savings contributions1 see section #fdcc4 4 7#b7 ,the table of sections for subchapter ,b of chapter #fe of such ,code is amended by adding at the end the following new item3 ,sec4 #fdcc4 ,matching payments for elective deferral and ,,ira contributions by certain individuals4 4 7f7 ,effective date ,the amendments made by this section shall apply to taxable years beginning after ,december #ca1 #bjag4 #ab4 ,authority to require reporting 7a7 ,reporting under ,internal ,revenue ,code ,subsection 7a7 of section #fjeh of the ,internal ,revenue ,code of #aihf is amended by adding at the end thereof the following3 ,the ,secretary may by regulation require the inclusion in such annual return of such information as may be necessary or appropriate to determine the effects of the alternative methods of satisfying applicable nondiscrimination requirements1 which are described in subsections 7k77#ac71 7k77#ad71 7m77#aa71 and 7m77#ab7 of section #dja1 on the contribution levels of employees who are not highly compensated employees 7as defined in section #dad7q7744 7b7 ,reporting under employee retirement income security act of #aigd ,section #ajd7;a77#b77;,a7 of the ,employee ,retirement ,income ,security ,act of #aigd 7#bi ,u4,s4,c4 #ajdb7;a77#b771 as amended by section #c7;c71 is further amended by inserting before the period at the end thereof the following3 1 except that in the case of such a deferral-only arrangement contained in a pension plan with at least #ajj participants1 the ,secretary may require such reporting as is necessary or appropriate with respect to service providers1 investment options1 and fees1 but not in excess of any reporting applicable to other arrangements44