,i #aaeth ,,congress #ast ,session ,h4 ,r4 #debd ,,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 expand retirement coverage1 preserve retirement income1 simplify rules related to retirement plans1 and for other purposes4 #a4 ,short title2 table of contents 7a7 ,short title ,this ,act may be cited as the ,retirement ,plan ,simplification and ,enhancement ,act of #bjag4 7b7 ,table of contents ,the table of contents for this ,act is as follows3 ,sec4 #a4 ,short title2 table of contents4 ,title ,i--,expanding ,coverage and ,increasing ,retirement ,savings ,sec4 #aja4 ,modification of automatic enrollment safe harbor4 ,sec4 #ajb4 ,secure deferral arrangements4 ,sec4 #ajc4 ,facilitating automatic enrollment4 ,sec4 #ajd4 ,credit for employers with respect to modified safe harbor requirements4 ,sec4 #aje4 ,qualified cash or deferred arrangements must allow long-term employees working more than #ejj but less than #a1jjj hours per year to participate4 ,sec4 #ajf4 ,separate application of top heavy rules to defined contribution plans covering part-time employees4 ,sec4 #ajg4 ,opportunity to claim the saver's credit on form #ajdj;,,ez4 ,sec4 #ajh4 ,additional time to adopt a qualified plan4 ,sec4 #aji4 ,repeal of maximum age for traditional ,,ira contributions4 ,sec4 #aaj4 #fj-;day rollover to inherited individual retirement plan of nonspouse beneficiary4 ,sec4 #aaa4 ,increase in age for required beginning date for mandatory distributions4 ,sec4 #aab4 ,increase in credit limitation for small employer pension plan startup costs4 ,sec4 #aac4 ,safe harbor for corrections of employee elective deferral failures4 ,sec4 #aad4 ,economically targeted investments4 ,sec4 #aae4 ,small immediate financial incentives for contributing to a plan4 ,title ,,ii--,preservation of ,income ,sec4 #bja4 ,availability of distribution options4 ,sec4 #bjb4 ,portability of lifetime income and managed account options4 ,sec4 #bjc4 ,qualifying longevity annuity contracts4 ,sec4 #bjd4 ,remove required minimum distribution barriers for life annuities4 ,title ,,iii--,simplification and ,clarification of ,qualified ,retirement ,plan ,rules ,sec4 #cja4 ,exception from required distributions where aggregate retirement savings do not exceed #bej1jjj4 ,sec4 #cjb4 ,expansion of employee plans compliance resolution system4 ,sec4 #cjc4 ,review and report to the congress relating to reporting and disclosure requirements4 ,sec4 #cjd4 ,consolidation of defined contribution plan notices4 ,sec4 #cje4 ,performance benchmarks for asset allocation funds4 ,sec4 #cjf4 ,permit nonspousal beneficiaries to roll assets to plans4 ,sec4 #cjg4 ,eliminate the first day of the month requirement4 ,sec4 #cjh4 ,office of participant and plan sponsor advocate4 ,sec4 #cji4 ,simplifying #djb7;f7 notices4 ,sec4 #caj4 ,guidance related to certain overpayment recoupment practices4 ,sec4 #caa4 ,rules relating to election of safe harbor #dja7k7 status4 ,sec4 #cab4 ,use of forfeitures to fund safe harbor contributions4 ,sec4 #cac4 ,treatment of custodial accounts on termination of section #djc7;b7 plans4 ,title ,,iv--,defined benefit plan reforms ,sec4 #dja4 ,cash balance4 ,sec4 #djb4 ,aligning use of lookback months to determine interest rates4 ,sec4 #djc4 ,aligning employer pension contribution due date with corporate return due date4 ,sec4 #djd4 ,clarification of the role of the ,participant and ,plan ,sponsor ,advocate4 ,i ,expanding ,coverage and ,increasing ,retirement ,savings #aja4 ,modification of automatic enrollment safe harbor 7a7 ,in general 7#a7 ,removal of #aj-percent cap ,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 7#b7 ,conforming amendments 7,a7 ,subclause 7,i7 of section #dja7k77#ac77;,c77iii7 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 is amended by striking #d percent and inserting at least #d percent4 7,c7 ,subclause 7,,iii7 of section #dja7k77#ac77;,c77iii7 is amended by striking #e percent and inserting at least #e percent4 7,d7 ,subclause 7,,iv7 of section #dja7k77#ac77;,c77iii7 is amended by striking #f percent and inserting at least #f percent4 7b7 ,effective date ,the amendments made by this section shall apply to plan years beginning after the date of enactment of this ,act4 #ajb4 ,secure deferral 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 ,alternative method for secure deferral arrangements to meet nondiscrimination requirements 7,a7 ,in general ,a secure deferral arrangement shall be treated as meeting the requirements of paragraph 7#c77;,a77ii74 7,b7 ,secure deferral arrangement ,for purposes of this paragraph1 the term secure deferral arrangement means any cash or deferred arrangement which meets the requirements of subparagraphs 7,c71 7,d71 and 7,e7 of paragraph 7#ac71 except as modified by this paragraph4 7,c7 ,qualified percentage ,for purposes of this paragraph1 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-- 7i7 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 paragraph 7#ac77;,c77i7 is made with respect to such employee1 7ii7 at least #g percent during the first plan year following the plan year described in clause 7i71 7iii7 at least #h percent during the second plan year following the plan year described in clause 7i71 7iv7 at least #i percent during the thirds plan year following the plan year described in clause 7i71 and 7v7 at least #aj percent during any subsequent plan year4 7,d7 ,matching contributions 7i7 ,in general ,for purposes of this paragraph1 an arrangement shall be treated as having met the requirements of paragraph 7#ac77;,d77i7 if and only if the employer makes matching contributions on behalf of each employee who is not a highly compensated employee in an amount equal to the sum of-- 7,i7 #ajj percent of the elective contributions of the employee to the extent that such contributions do not exceed #a percent of compensation1 7,,ii7 #ej percent of so much of such contributions as exceed #a percent but do not exceed #f percent of compensation1 plus 7,,iii7 #be percent of so much of such contributions as exceed #f percent but do not exceed #aj percent of compensation4 7ii7 ,application of rules for matching contributions ,the rules of clause 7ii7 of paragraph 7#ab77;,b7 and clauses 7iii7 and 7iv7 of paragraph 7#ac77;,d7 shall apply for purposes of clause 7i7 but the rule of clause 7iii7 of paragraph 7#ab77;,b7 shall not apply for such purposes4 ,the rate of matching contribution for each incremental deferral must be at least as high as the rate specified in clause 7i71 and may be higher1 so long as such rate does not increase as an employee's rate of elective contributions increases4 4 7b7 ,matching contributions and employee contributions ,subsection 7m7 of section #dja of the ,internal ,revenue ,code of #aihf is amended by redesignating paragraph 7#ac7 as paragraph 7#ad7 and by inserting after paragraph 7#ab7 the following new paragraph3 7#ac7 ,alternative method for secure deferral arrangements ,a defined contribution plan shall be treated as meeting the requirements of paragraph 7#b7 with respect to matching contributions and employee contributions if the plan-- 7,a7 is a secure deferral arrangement 7as defined in subsection 7k77#ad771 7,b7 meets the requirements of clauses 7ii7 and 7iii7 of paragraph 7#aa77;,b71 and 7,c7 provides that matching contributions on behalf of any employee may not be made with respect to an employee's contributions or elective deferrals in excess of #aj percent of the employee's compensation4 4 7c7 ,conforming amendment ,subparagraph 7,h7 of section #daf7;g77#d7 of the ,internal ,revenue ,code of #aihf is amended-- 7#a7 in clause 7i71 by striking section #dja7k77#ab7 or #dja7k77#ac7 and inserting paragraph 7#ab71 7#ac71 or 7#ad7 of section #dja7k71 and 7#b7 in clause 7ii71 by striking section #dja7m77#aa7 or #dja7m77#ab7 and inserting paragraph 7#aa71 7#ab71 or 7#ac7 of section #dja7m74 7d7 ,effective date ,the amendments made by this section shall apply to plan years beginning after ,december #ca1 #bjag4 #ajc4 ,facilitating automatic enrollment ,the ,secretary of the ,treasury shall promulgate regulations or other guidance that-- 7#a7 simplify and clarify the rules regarding the timing of participant notices required under section #dja7k77#ac77;,e7 of the ,internal ,revenue ,code of #aihf1 with specific application to-- 7,a7 plans that allow employees to be eligible for participation immediately upon beginning employment2 and 7,b7 employers with multiple payroll and administrative systems2 and 7#b7 simplify and clarify the automatic escalation rules under sections #dja7k77#ac77;,c77iii7 and #dja7k77#ad77;,c7 of the ,internal ,revenue ,code of #aihf in the context of employers with multiple payroll and administrative systems4 ,such regulations or guidance shall address the particular case of employees within the same plan who are subject to different notice timing and different percentage requirements1 and provide assistance for plan sponsors in managing such cases4 #ajd4 ,credit for employers with respect to modified safe harbor requirements 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 ,credit for small employers with respect to modified safe harbor requirements for automatic contribution arrangements 7a7 ,general rule ,for purposes of section #ch1 in the case of a small employer1 the safe harbor adoption credit determined under this section for any taxable year is the amount equal to the total of the employer's matching contributions under section #dja7k77#ad77;,d7 during the taxable year on behalf of employees who are not highly compensated employees1 subject to the limitations of subsection 7b74 7b7 ,limitations 7#a7 ,limitation with respect to compensation ,the credit determined under subsection 7a7 with respect to contributions made on behalf of an employee who is not a highly compensated employee shall not exceed #b percent of the compensation of such employee for the taxable year4 7#b7 ,limitation with respect to years of participation ,credit shall be determined under subsection 7a7 with respect to contributions made on behalf of an employee who is not a highly compensated employee only during the first #e years such employee participates in the qualified automatic contribution arrangement4 7c7 ,definitions 7#a7 ,in general ,any term used in this section which is also used in section #dja7k77#ad7 shall have the same meaning as when used in such section4 7#b7 ,small employer ,the term small employer means an eligible employer 7as defined in section #djh7p77#b77;,c77i774 7d7 ,denial of double benefit ,no deduction shall be allowable under this title for any contribution with respect to which a credit is allowed under this section4 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 the safe harbor adoption credit determined under section #de,s4 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 adding after the item relating to section #de,r the following new item3 ,sec4 #de,s4 ,credit for small employers with respect to modified safe harbor requirements for automatic contribution arrangements4 4 7d7 ,effective date ,the amendments made by this section shall apply to taxable years that include any portion of a plan year beginning after ,december #ca1 #bjag4 #aje4 ,qualified cash or deferred arrangements must allow long-term employees working more than #ejj but less than #a1jjj hours per year to participate 7a7 ,participation requirement 7#a7 ,in general ,subparagraph 7,d7 of section #dja7k77#b7 of the ,internal ,revenue ,code of #aihf is amended to read as follows3 7,d7 which does not require1 as a condition of participation in the arrangement1 that an employee complete a period of service with the employer 7or employers7 maintaining the plan extending beyond the close of the earlier of-- 7i7 the period permitted under section #daj7;a77#a7 7determined without regard to subparagraph 7,b77i7 thereof71 or 7ii7 subject to the provisions of paragraph 7#ad71 the first period of #c consecutive #ab-month periods during each of which the employee has at least #ejj hours of service4 4 7#b7 ,special rules ,section #dja7k7 of the ,internal ,revenue ,code of #aihf is amended by adding at the end the following new paragraph3 7#ae7 ,special rules for participation requirement for long-term1 part-time workers ,for purposes of paragraph 7#b77;,d77ii7-- 7,a7 ,age requirement must be met ,paragraph 7#b77;,d77ii7 shall not apply to an employee unless the employee has met the requirement of section #daj7;a77#a77;,a77i7 by the close of the last of the #ab-month periods described in such paragraph4 7,b7 ,nondiscrimination and top-heavy rules not to apply 7i7 ,nondiscrimination rules ,in the case of employees who are eligible to participate in the arrangement solely by reason of paragraph 7#b77;,d77ii7-- 7,i7 notwithstanding subsection 7a77#d71 an employer shall not be required to make nonelective or matching contributions on behalf of such employees even if such contributions are made on behalf of other employees eligible to participate in the arrangement1 and 7,,ii7 an employer may elect to exclude such employees from the application of subsection 7a77#d71 paragraph 7#c71 subsection 7m77#b71 and section #daj7;b74 7ii7 ,top-heavy rules ,an employer may elect to exclude all employees who are eligible to participate in a plan maintained by the employer solely by reason of paragraph 7#b77;,d77ii7 from the application of the vesting and benefit requirements under subsections 7b7 and 7c7 of section #daf4 7iii7 ,vesting ,for purposes of determining whether an employee described in clause 7i7 has a nonforfeitable right to employer contributions 7other than contributions described in paragraph 7#c77;,d77i77 under the arrangement1 each #ab-month period for which the employee has at least #ejj hours of service shall be treated as a year of service4 7iv7 ,employees who become full-time employees ,this subparagraph shall cease to apply to any employee as of the first plan year beginning after the plan year in which the employee meets the requirements of section #daj7;a77#a77;,a77ii7 without regard to paragraph 7#b77;,d77ii74 7,c7 ,exception for employees under collectively bargained plans1 etc ,paragraph 7#b77;,d77ii7 shall not apply to employees described in section #daj7;b77#c74 7,d7 ,special rules 7i7 ,time of participation ,the rules of section #daj7;a77#d7 shall apply to an employee eligible to participate in an arrangement solely by reason of paragraph 7#b77;,d77ii74 7ii7 #ab-month periods #ab-month periods shall be determined in the same manner as under the last sentence of section #daj7;a77#c77;,a74 4 7b7 ,effective date ,the amendments made by this section shall apply to plan years beginning after ,december #ca1 #bjag1 except that1 for purposes of section #dja7k77#b77;,d77ii7 of the ,internal ,revenue ,code of #aihf 7as added by such amendments71 #ab-month periods beginning before ,january #a1 #bjah1 shall not be taken into account4 #ajf4 ,separate application of top heavy rules to defined contribution plans covering part-time employees 7a7 ,in general ,paragraph 7#b7 of section #daf7;c7 of the ,internal ,revenue ,code of #aihf is amended by adding at the end the following3 7,c7 ,separate application to employees not meeting age and service requirements ,if employees not meeting the age or service requirements of section #daj7;a77#a7 7without regard to subparagraph 7,b7 thereof7 are covered under a plan of the employer which meets the requirements of paragraphs 7,a7 and 7,b7 separately with respect to such employees1 such employees may be excluded from consideration in determining whether any plan of the employer meets the requirements of subparagraphs 7,a7 and 7,b74 4 7b7 ,effective date ,the amendment made by subsection 7a7 shall apply to plan years beginning after the date of the enactment of this ,act4 #ajg4 ,opportunity to claim the saver's credit on form #ajdj;,,ez ,the ,secretary of the ,treasury shall modify the forms for the return of tax of individuals in order to allow individuals claiming the credit under section #be;,b of the ,internal ,revenue ,code of #aihf to file 7and claim such credit on7 ,form #ajdj;,,ez4 #ajh4 ,additional time to adopt a qualified plan 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 ,the adoption of a plan by the applicable date shall not cause a plan to fail to meet the requirements of this section for a plan year4 ,for purposes of the preceding sentence1 the term applicable date means the due date 7including extensions7 for filing the ,federal income tax return for the employer's taxable year in which ends the plan year for which the plan is effective4 ,an employer may elect to have a plan adopted in accordance with this paragraph be treated as established by the end of the employer's taxable year for purposes of applying section #djd7;a74 4 7b7 ,effective date ,the amendment made by subsection 7a7 shall apply to years beginning after ,december #ca1 #bjag4 #aji4 ,repeal of maximum age for traditional ,,ira contributions 7a7 ,in general ,paragraph 7#a7 of section #bai7;d7 of the ,internal ,revenue ,code of #aihf is repealed4 7b7 ,conforming amendment ,subsection 7c7 of section #djh;,a of the ,internal ,revenue ,code of #aihf is amended by striking paragraph 7#d7 and by redesignating paragraphs 7#e71 7#f71 and 7#g7 as paragraphs 7#d71 7#e71 and 7#f71 respectively4 7c7 ,effective date ,the amendments made by this section shall apply to contributions made for taxable years beginning after ,december #ca1 #bjag4 #aaj4 #fj-;day rollover to inherited individual retirement plan of nonspouse beneficiary 7a7 ,in general ,section #djb7;c77#aa7 of the ,internal ,revenue ,code of #aihf is amended by redesignating subparagraph 7,b7 as subparagraph 7,c7 and by striking subparagraph 7,a7 and inserting the following3 7,a7 ,in general ,if-- 7i7 any portion of a distribution attributable to an employee is paid after the death of the employee to an individual who is a designated beneficiary 7as defined by section #dja7;a77#i77;,e77 of the employee and who is not the surviving spouse of the employee1 and 7ii7 such portion is transferred or paid to an individual retirement plan in a transfer or payment meeting the requirements of subparagraph 7,b71 the preceding provisions of this subsection shall apply to such distribution in the same manner as if the designated beneficiary were the employee4 7,b7 ,requirements for transfer of distribution ,the requirements of this subparagraph are met with respect to the portion of any distribution if-- 7i7 such portion is transferred or paid to an individual retirement plan described in clause 7i7 or 7ii7 of paragraph 7#h77;,b7 established for the purposes of receiving the distribution on behalf of the designated beneficiary1 7ii7 such individual retirement plan is established as an inherited individual retirement account or individual retirement annuity 7within the meaning of section #djh7;d77#c77;,c771 whichever is applicable1 and 7iii7 notice is provided to the trustee1 insurance company1 or other provider of the individual retirement plan that such individual retirement plan is being established as an inherited individual retirement account or individual retirement annuity4 ,section #dja7;a77#i77;,b7 7other than clause 7iv7 thereof7 shall apply to such individual retirement plan4 4 7b7 ,rollover treatment for inherited accounts ,section #djh7;d77#c77;,c7 of the ,internal ,revenue ,code of #aihf is amended by adding at the end the following3 7iii7 ,exception for qualified transfers to another inherited account ,clause 7i7 shall not apply to any portion of a distribution out of an inherited individual retirement account or inherited individual retirement annuity if such portion is paid to another such individual retirement plan or annuity but only if the requirements of subparagraphs 7,a71 7,b71 and 7,e7 of this paragraph1 and the requirements of section #djb7;c77#aa77;,b71 are met with respect to such transfer or payment4 4 7c7 ,effective date ,the amendments made by this section shall apply to distributions made after ,december #ca1 #bjag4 #aaa4 ,increase in age for required beginning date for mandatory distributions 7a7 ,increase in age for required beginning date 7#a7 ,in general ,subclause 7,i7 of section #dja7;a77#i77;,c77i7 of the ,internal ,revenue ,code of #aihf is amended to read as follows3 7,i7 the first calendar year in which the employee attains the applicable age for such calendar year1 or 4 7#b7 ,special rule for owners ,subclause 7,i7 of section #dja7;a77#i77;,c77ii7 of such ,code is amended by striking in which the employee attains age #gja_/b and inserting described in clause 7i77,i7 with respect to the employee4 7b7 ,mandatory distribution age ,paragraph 7#i7 of section #dja7;a7 of the ,internal ,revenue ,code of #aihf is amended by inserting at the end the following new subparagraph3 7,h7 ,applicable age ,for purposes of this paragraph-- 7i7 ,in general ,the applicable age is-- 7,i7 for calendar years before #bjai1 age #gja_/b1 7,,ii7 for calendar years #bjai1 #bjbj1 #bjba1 #bjbb1 and #bjbc1 age #ga1 7,,iii7 for calendar years #bjbd1 #bjbe1 #bjbf1 #bjbg1 and #bjbh1 age #gb1 7,,iv7 for calendar year #bjbi1 age #gc1 and 7,v7 for calendar years after #bjbi1 the age as adjusted under clause 7ii74 7ii7 ,adjustment ,the ,secretary shall adjust the age under clause 7i77,,iv7 for calendar year #bjcj and each succeeding calendar year in a manner proportional to increases in the life expectancy of an individual who attained age #gc in the calendar year preceding the calendar year for which the adjustment is being made as compared to the life expectancy of an individual who attained age #gc in #bjbh4 ,the applicable age for any calendar year as adjusted under this clause-- 7,i7 shall be applicable only with respect to employees whose required beginning date has not occurred as of ,december #ca of the year preceding such year1 and 7,,ii7 shall be rounded to the next lowest whole number4 7iii7 ,life expectancies ,the life expectancies under clause 7ii7 shall be determined on a unisex basis in accordance with life expectancies underlying the tables described in section #dcj7;h77#c77;,a74 4 7c7 ,spouse beneficiaries ,subclause 7,i7 of section #dja7;a77#i77;,b77iv7 of the ,internal ,revenue ,code of #aihf is amended by striking age #gja_/b and inserting the applicable age4 7d7 ,conforming amendment ,subsection 7b7 of section #djh of such ,code is amended by striking age #gja_/b and inserting the applicable age determined under section #dja7;a77#i77;,h7 with respect to such individual4 7e7 ,effective date ,the amendments made by this section shall apply to calendar years beginning after ,december #ca1 #bjag4 #aab4 ,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 #dae7q77 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 ,effective date ,the amendments made by this section shall apply to taxable years beginning after ,december #ca1 #bjag4 #aac4 ,safe harbor for corrections of employee elective deferral failures 7a7 ,in general ,section #dad of the ,internal ,revenue ,code of #aihf is amended by adding at the end the following new subsection3 7aa7 ,correcting automatic contribution errors 7#a7 ,in general ,any plan or arrangement shall not fail to satisfy any requirement of this subchapter or section #deg solely by reason of a corrected error4 7#b7 ,corrected error defined ,for purposes of this subsection1 the term corrected error means a reasonable administrative error in implementing an automatic enrollment or automatic escalation feature in accordance with the terms of an eligible automatic contribution arrangement 7as defined under subsection 7w77#c771 provided that the implementation failure is corrected by the date that is #i months after the end of the plan year during which the failure occurred4 ,such correction may occur before or after the participant has terminated employment and may occur without regard to whether the error is identified by the ,secretary4 4 7b7 ,effective date ,the amendment made by this ,act shall apply with respect to any errors with respect to which the date referred to in section #dad7;aa7 7as added by this section7 is after the date of enactment of this ,act4 #aad4 ,economically targeted investments ,subsection 7a7 of section #djd of the ,employee ,retirement ,income ,security ,act of #aigd 7#bi ,u4,s4,c4 #aajd7 is amended by adding at the end the following new paragraph3 7#c7 ,a fiduciary shall not fail to satisfy the requirements of this subsection solely by reason of taking into account economic1 social1 and governance factors in connection with an investment or investment strategy1 but only if the fiduciary prudently determines the investment is appropriate based solely on economic considerations1 including those derived from such factors4 4 #aae4 ,small immediate financial incentives for contributing to a plan 7a7 ,in general ,subparagraph 7,a7 of section #dja7k77#d7 of the ,internal ,revenue ,code of #aihf is amended by inserting 7other than a de minimus financial incentive7 after any other benefit4 7b7 ,effective date ,the amendments made by this section shall apply with respect to taxable years beginning after the date of enactment of this ,act4 ,,ii ,preservation of ,income #bja4 ,availability of distribution options 7a7 ,lifetime income investments ,by the date that is one year after the date of enactment of this ,act1 the ,secretary of the ,treasury shall issue final regulations under which it is clarified that any specified age or service condition 7or combination of age and service conditions7 with respect to a lifetime income investment 7as defined in section #dja7;a77#ch77;,b77ii77 under a defined contribution plan shall be disregarded in determining whether such lifetime income investment is currently available to an employee for purposes of ,treasury ,regulation section #a4dja7;a77#d7-d7;b7 7or any successor provision74 7b7 ,enforcement ,as of the date of enactment of this ,act1 the ,secretary of the ,treasury shall administer and enforce the law in accordance with subsection 7a7 with respect to plan years beginning before1 on1 or after the date of enactment of this ,act4 7c7 ,effective date ,this section shall take effect as of the date of enactment of this ,act4 #bjb4 ,portability of lifetime income and managed account 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 #bjc4 ,qualifying longevity annuity contracts 7a7 ,in general ,by the date that is one year after the date of enactment of this ,act1 the ,secretary of the ,treasury shall amend the regulation issued by the ,department of the ,treasury relating to ,longevity ,annuity ,contracts #gi ,fed4 ,reg4 #cgfcc 7,july #b1 #bjad71 as follows3 7#a7 ,repeal #be-percent premium limit ,the ,secretary shall amend ,q,a-#ag7;b77#c7 of #bf ,c4,f4,r4 section #a4dja7;a77#i7-f and ,q,a-#ab7;b77#c7 of #bf ,c4,f4,r4 section #a4djh-h to eliminate the requirement that premiums for qualifying longevity annuity contracts be limited to #be percent of an individual's account balance1 and to make such corresponding changes to the regulations and related forms as necessary to reflect the elimination of this requirement4 7#b7 ,increase dollar limitation 7,a7 ,the ,secretary shall amend ,q,a-#ag7;b77#b77;i7 of #bf ,c4,f4,r4 section #a4dja7;a77#i7-f and ,q,a-#ab7;b77#b77;i7 of #bf ,c4,f4,r4 section #a4djh-h to increase the dollar limitation on premiums for qualifying longevity annuity contracts from #abe1jjj to #bjj1jjj1 and to make such corresponding changes to the regulations and related forms as necessary to reflect this increase in the dollar limitation4 7,b7 ,the ,secretary shall amend ,q,a-#ag7;d77#b77;i7 of #bf ,c4,f4,r4 section #a4dja7;a77#i7-f to provide that1 in the case of calendar years beginning on or after ,january #a of the second year following the year of enactment of this ,act1 the #bjj1jjj dollar limitation 7as increased by subparagraph 7,a77 will be adjusted at the same time and in the same manner as the limits are adjusted under section #dae7;d7 of the ,internal ,revenue ,code of #aihf1 except that the base period shall be the calendar quarter beginning ,july #a of the year of enactment of this ,act1 and any increase to such dollar limitation that is not a multiple of #aj1jjj will be rounded to the next lowest multiple of #aj1jjj4 7#c7 ,facilitate joint and survivor benefits ,the ,secretary shall amend ,q,a-#ag7;c7 of #bf ,c4,f4,r4 section #a4dja7;a77#i7-f1 and make such corresponding changes to the regulations and related forms as necessary1 to provide that in the case of a qualifying longevity annuity contract that was purchased with joint and survivor annuity benefits for the individual and his or her spouse that were permissible under the regulations at the time the contract was originally purchased1 a divorce occurring after the original purchase and before the annuity payments commence under the contract will not affect the permissibility of the joint and survivor annuity benefits or other benefits under the contract1 or require any adjustment to the amount or duration of benefits payable under the contract1 provided that a qualified domestic relations order 7within the meaning of section #dad7p7 of the ,internal ,revenue ,code of #aihf7 or a divorce or separation instrument 7within the meaning of section #ga7;b77#b7 of the ,internal ,revenue ,code of #aihf7-- 7,a7 provides that the former spouse is entitled to the survivor benefits under the contract2 7,b7 does not modify the treatment of the former spouse as the beneficiary under the contract who is entitled to the survivor benefits2 or 7,c7 does not modify the treatment of the former spouse as the measuring life for the survivor benefits under the contract4 7b7 ,effective dates1 enforcement1 and interpretations 7#a7 ,effective dates 7,a7 ,paragraphs 7#a7 and 7#b7 of subsection 7a7 shall be effective with respect to contracts purchased or received in an exchange on or after the date of enactment of this ,act4 7,b7 ,paragraph 7#c7 of subsection 7a7 shall be effective with respect to contracts purchased or received in an exchange on or after ,july #b1 #bjad4 7#b7 ,enforcement and interpretations ,prior to the date that the ,secretary of the ,treasury issues final regulations pursuant to subsection 7a7-- 7,a7 the ,secretary shall administer and enforce the law in accordance with subsection 7a7 and the effective dates in paragraph 7#a7 of this subsection2 and 7,b7 taxpayers may rely upon their reasonable good faith interpretations of subsection 7a74 #bjd4 ,remove required minimum distribution barriers for life annuities 7a7 ,in general ,paragraph 7#i7 of section #dja7;a7 of the ,internal ,revenue ,code of #aihf1 as amended by section #aaa of this ,act1 is further amended by adding at the end the following new subparagraph3 7,i7 ,certain increases in payments under a commercial annuity ,nothing in this section shall prohibit a commercial annuity 7within the meaning of section #cdje7;e77#f77 that is issued in connection with any eligible retirement plan 7within the meaning of section #djb7;c77#h77;,b77 from providing one or more of the following types of payments on or after the annuity starting date3 7i7 annuity payments that increase by a constant percentage1 applied not less frequently than annually1 at a rate that is less than #e percent per year1 7ii7 a lump sum payment that-- 7,i7 results in a shortening of the payment period with respect to an annuity or a full or partial commutation of the future annuity payments1 provided that such lump sum is determined using reasonable actuarial methods and assumptions1 as determined in good faith by the issuer of the contract1 or 7,,ii7 accelerates the receipt of annuity payments that are scheduled to be received within the ensuing #ab months1 regardless of whether such acceleration shortens the payment period with respect to the annuity1 reduces the dollar amount of benefits to be paid under the contract1 or results in a suspension of annuity payments during the period being accelerated1 7iii7 an amount which is in the nature of a dividend or similar distribution1 provided that the issuer of the contract determines such amount based on a reasonable comparison of the actuarial factors assumed when calculating the initial annuity payments and the issuer's experience with respect to those factors1 or 7iv7 a final payment upon death that does not exceed the excess of the total amount of the consideration paid for the annuity payments1 less the aggregate amount of prior distributions or payments from or under the contract4 4 7b7 ,regulations and enforcement 7#a7 ,regulations ,by the date that is one year after the date of enactment of this ,act1 the ,secretary of the ,treasury shall amend the regulation issued by the ,department of the ,treasury relating to ,required ,distributions from ,retirement ,plans1 #fi ,fed4 ,reg4 #ccbhh 7,june #ae1 #bjjd71 and make any corresponding amendments to other regulations1 in order to-- 7,a7 conform such regulations to subsection 7a71 including by eliminating the types of payments described in subsection 7a7 from the scope of the requirement in ,q,a-#ad7;c7 of #bf ,c4,f4,r4 section #a4dja7;a77#i7-f that the total future expected payments must exceed the total value being annuitized2 7,b7 amend ,q,a-#ad7;c7 of #bf ,c4,f4,r4 section #a4dja7;a77#i7-f to provide that a commercial annuity that provides an initial payment that is at least equal to the initial payment that would be required from an individual account pursuant to #bf ,c4,f4,r4 section #a4dja7;a77#i7-e will be deemed to satisfy the requirement in ,q,a-#ad7;c7 of #bf ,c4,f4,r4 section #a4dja7;a77#i7-f that the total future expected payments must exceed the total value being annuitized2 and 7,c7 amend ,q,a-#ad7;e77#c7 of #bf ,c4,f4,r4 section #a4dja7;a77#i7-f to provide that the total future expected payments under a commercial annuity are determined using the tables or other actuarial assumptions that the issuer of the contract actually uses in pricing the premiums and benefits with respect to the contract1 provided that such tables or other actuarial assumptions are reasonable4 7#b7 ,enforcement ,as of the date of enactment of this ,act1 the ,secretary of the ,treasury shall administer and enforce the law in accordance with subsections 7a7 and 7b7 with respect to taxable years beginning before1 on1 or after the date of enactment of this ,act4 7c7 ,effective date ,this section shall take effect as of the date of enactment of this ,act4 ,,iii ,simplification and ,clarification of ,qualified ,retirement ,plan ,rules #cja4 ,exception from required distributions where aggregate retirement savings do not exceed #bej1jjj 7a7 ,in general ,section #dja7;a77#i7 of the ,internal ,revenue ,code of #aihf1 as amedended by sections #aaa and #bjd1 is further amended by adding at the end the following new subparagraph3 7,j7 ,exception from required minimum distributions during life of employee or beneficiary where assets do not exceed #bej1jjj 7i7 ,in general ,if1 as of a measurement date1 the aggregate value of the entire interest of an employee under all applicable eligible retirement plans does not exceed #bej1jjj1 then1 during any succeeding calendar year beginning before the next measurement date-- 7,i7 the requirements of subparagraph 7,a7 shall not apply to the employee1 and 7,,ii7 the requirements of subparagraph 7,b7 shall not apply to the employee's designated beneficiary with respect to the designated beneficiary's interest in the interest of the deceased employee4 7ii7 ,applicable eligible retirement plan ,for purposes of this subparagraph1 the term applicable eligible retirement plan means an eligible retirement plan 7as defined in section #djb7;c77#h77;,b77 and any other plan1 contract1 or arrangement to which the requirements of this paragraph apply4 7iii7 ,special rule for benefits paid as a life annuity from defined benefit plan ,in determining the aggregate value under clause 7i71 there shall not be taken into account the value of any benefits under a defined benefit plan that1 on the measurement date1 are being paid as a life annuity4 7iv7 ,measurement date 7,i7 ,initial measurement dates ,the initial measurement date for an employee is the last day of the calendar year preceding the earlier of-- 7aa7 the calendar year in which the employee attains the applicable age1 or 7bb7 the calendar year in which the employee dies4 7,,ii7 ,subsequent measurement dates ,if1 in a calendar year1 an employee to whom subparagraph 7,a7 or 7,b7 does not apply by reason of clause 7i7 receives contributions1 rollovers1 or transfers of amounts1 or accrues additional benefits under a defined benefit plan1 that were not previously taken into account in applying this subparagraph1 then the last day of that calendar year shall be a new measurement date and a new determination shall be made as to whether clause 7i7 applies to such employee4 7v7 ,determination of value ,for purposes of this subparagraph-- 7,i7 ,in general ,except as provided in subclause 7,,ii71 the value of an employee's interest in a plan is the account balance of such plan4 7,,ii7 ,defined benefit plans ,the value of defined benefit plan benefits shall be determined in accordance with the applicable interest rate and applicable mortality rate assumptions under section #dag7;e71 except that the value shall be equal to the amount of the single sum payment payable to the extent available under the plan4 7vi7 ,phase-out of exception ,in the case of an employee whose aggregate balance described in clause 7i7 as of a measurement date exceeds the dollar amount in effect under such clause by less than #aj1jjj1 the required distributions under this paragraph for calendar years beginning after such measurement date and before the next measurement date shall be equal to the amount which bears the same ratio to the required distributions otherwise determined under this paragraph as-- 7,i7 the amount by which such aggregate balance exceeds such dollar amount so in effect1 bears to 7,,ii7 #aj1jjj4 7vii7 ,cost of living adjustments ,the ,secretary shall adjust annually the #bej1jjj amount specified in clause 7i7 for increases in the cost-of-living at the same time and in the same manner as adjustments under section #dae7;d72 except that the base period shall be the calendar quarter beginning ,july #a1 #bjag1 and any increase which is not a multiple of #e1jjj shall be rounded to the next lowest multiple of #e1jjj4 4 7b7 ,effective date ,the amendment made by this section shall apply to initial measurement dates occurring on or after ,december #ca1 #bjag4 #cjb4 ,expansion of employee plans compliance resolution system 7a7 ,in general ,not later than one year after the date of the enactment of this ,act1 the ,secretary of the ,treasury shall modify the ,employee ,plans ,compliance ,resolution ,system 7as described in ,revenue ,procedure #bjaf-ea or any successor guidance7 to achieve the results specified in the succeeding subsections of this section and to further facilitate corrections and compliance in such other means as the ,secretary deems appropriate4 7b7 ,loan error 7#a7 ,in the case of plan loan errors for which corrections are specified under the voluntary compliance program1 self-correction shall be made available by methods applicable to such loans through the voluntary compliance program4 7#b7 ,the ,secretary of ,labor shall treat any loan error corrected pursuant to paragraph 7#a7 as meeting the requirements of the ,voluntary ,fiduciary ,correction ,program of the ,department of ,labor4 7c7 ,,epcrs for ,i,r,as ,the ,secretary of the ,treasury shall expand the ,employee ,plans ,compliance ,resolution ,system to allow custodians of individual retirement plans to address inadvertent errors for which the owner of an individual retirement plan was not at fault1 including 7but not limited to7-- 7#a7 waivers of the excise tax that would otherwise apply under section #digd of the ,internal ,revenue ,code of #aihf2 7#b7 under the self-correction component of the ,employee ,plans ,compliance ,resolution ,system1 waivers of the #fj-;day deadline for a rollover where the deadline is missed for reasons beyond the reasonable control of the account owner2 and 7#c7 rules permitting a nonspouse beneficiary to return distributions to an inherited individual retirement plan described in section #djh7;d77#c77;,c7 of the ,internal ,revenue ,code of #aihf in a case where1 due to an inadvertent error by a service provider1 the beneficiary had reason to believe that the distribution could be rolled over without inclusion in income of any part of the distributed amount4 7d7 ,required minimum distribution corrections ,the ,secretary of the ,treasury shall expand the ,employee ,plans ,compliance ,resolution ,system to allow plans to which such system applies and custodians of individual retirement plans to self-correct1 without an excise tax1 any inadvertent errors pursuant to which a distribution is made no more than #ahj days after it was required to be made4 #cjc4 ,review and report to the congress relating to reporting and disclosure requirements 7a7 ,study ,as soon as practicable after the date of the enactment of this ,act1 the ,secretary of ,labor1 the ,secretary of the ,treasury1 and the ,pension ,benefit ,guaranty ,corporation shall review the reporting and disclosure requirements of-- 7#a7 title ,i of the ,employee ,retirement ,income ,security ,act of #aigd applicable to pension plans 7as defined in section #c7b7 of such ,act72 and 7#b7 the ,internal ,revenue ,code of #aihf applicable to qualified retirement plans 7as defined in section #digd7;c7 of such ,code without regard to paragraphs 7#d7 and 7#e7 thereof74 7b7 ,report ,not later than #ah months after the date of the enactment of this ,act1 the ,secretary of ,labor1 the ,secretary of the ,treasury1 and the ,pension ,benefit ,guaranty ,corporation1 jointly1 shall make such recommendations as may be appropriate to the appropriate committees of the ,congress to consolidate1 simplify1 standardize1 and improve the applicable reporting and disclosure requirements so as to simplify reporting for plans referenced to in subsection 7a7 and ensure that needed understandable information is provided to participants and beneficiaries of such plans4 #cjd4 ,consolidation of defined contribution plan notices 7a7 ,in general 7#a7 ,not later than #ah months after the date of the enactment of this ,act1 the ,secretary of ,labor and the ,secretary of the ,treasury shall adopt final regulations providing that a plan may1 but is not required to1 consolidate two or more of the notices required under sections #djd7;c77#e77;,b7 and #ead7;e77#c7 of the ,employee ,retirement ,income ,security ,act of #aigd 7#bi ,u4,s4,c4 #aadd7;e77#c771 sections #dja7k77#ab77;,d71 #dja7k77#ac77;,e71 and #dad7w77#d7 of the ,internal ,revenue ,code of #aihf1 and section #beej4djd;a-#e of title #bi1 ,code of ,federal ,regulations 7#bi ,c4,f4,r4 #beej4djd;a-#e7 into a single notice or1 to the extent provided by such regulations1 consolidate such notices with the summary plan description or summary of material modifications described in section #ajd7;b7 of the ,employee ,retirement ,income ,security ,act of #aigd 7#bi ,u4,s4,c4 #ajbd7;b771 so long as the combined notice1 summary plan description or summary of material modifications includes the required content1 clearly identifies the issues addressed therein1 and is provided at the time and with the frequency required for each such notice4 7#b7 ,the ,secretary of ,labor and the ,secretary of the ,treasury may include in such regulations rules to ensure that1 to the extent such notices are consolidated with the summary plan description or summary of material modifications1 the presentation1 placement1 or prominence of the information in such notices shall not have the effect of failing to inform participants and beneficiaries regarding the information in such notices4 7b7 ,provision of annual notices without regard to plan year 7#a7 ,clause 7i7 of section #djd7;c77#e77;,b7 of the ,employee ,retirement ,income ,security ,act of #aigd 7#bi ,u4,s4,c4 #aajd7;c77#e77;,b77 is amended-- 7,a7 in subclause 7,i7 by striking within a reasonable period of time before each plan year1 and inserting within a reasonable period before the arrangement described in subparagraph 7,a7 applies to such participant or beneficiary1 and thereafter at least once within any #ab-month period 7without regard to the plan year7 during which such arrangement applies12 and 7,b7 in subclause 7,,ii7 by striking and before the beginning of the plan year4 7#b7 ,subparagraph 7,a7 of section #ead7;e77#c7 of the ,employee ,retirement ,income ,security ,act of #aigd 7#bi ,u4,s4,c4 #aadd7;e77#c77;,a77 is amended by striking 1 within a reasonable period before such plan year1 provide to each participant to whom the arrangement applies for such plan year and inserting 1 within a reasonable period before the arrangement applies to a participant or beneficiary1 and thereafter at least once within any #ab-month period 7without regard to the plan year7 during which such arrangement applies1 provide4 7#c7 ,clause 7i7 of section #dja7k77#ac77;,e7 of the ,internal ,revenue ,code of #aihf is amended by striking 1 within a reasonable period before each plan year1 each employee eligible to participate in the arrangement for such year receives and inserting each employee eligible to participate in the arrangement receives1 within a reasonable period before the employee becomes eligible1 and thereafter within a reasonable period before each plan year during which such arrangement applies14 7#d7 ,subparagraph 7,d7 of section #dja7k77#ab7 of the ,internal ,revenue ,code of #aihf is amended by striking 1 within a reasonable period before any year1 given written notice and inserting given written notice1 within a reasonable period before the employee becomes eligible1 and thereafter within a reasonable period before each plan year during which such arrangement applies14 7#e7 ,subparagraph 7,a7 of section #dad7w77#d7 of the ,internal ,revenue ,code of #aihf is amended by striking 1 within a reasonable period before each plan year1 give to each employee to whom an arrangement described in paragraph 7#c7 applies for such plan year and inserting 1 within a reasonable period before an arrangement described in paragraph 7#c7 applies to an employee1 and thereafter at least once within any #ab-month period 7without regard to the plan year7 during which such arrangement applies1 give to each such employee4 #cje4 ,performance benchmarks for asset allocation funds 7a7 ,in general ,not later than six months after the date of enactment of this ,act1 the ,secretary of ,labor shall modify the regulations under section #djd of the ,employee ,retirement ,income ,security ,act of #aigd to provide that1 in the case of a designated investment alternative that contains a mix of asset classes1 a plan administrator may1 but is not required to1 use a benchmark that is a blend of different broad-based securities market indices if-- 7#a7 the blend is reasonably representative of the asset class holdings of the designated investment alternative2 7#b7 for purposes of determining the blend's returns for #a-1 #e-1 and #aj-;calendar year periods 7or for the life of the alternative1 if shorter71 the blend is modified at least once per year to reflect changes in the asset class holdings of the designated investment alternative2 and 7#c7 each securities market index that is used for an associated asset class would separately satisfy the requirements of such regulations for such asset class4 7b7 ,study ,not later than ,december #ca1 #bjah1 the ,secretary of ,labor shall deliver a report to the ,house ,committee on ,ways and ,means1 the ,house ,committee on ,education and the ,workforce1 the ,senate ,committee on ,finance1 and the ,senate ,committee on ,health1 ,education1 ,labor and ,pensions regarding the effectiveness of the benchmarking requirements under #bi ,c4,f4,r4 section #beej4djd;a-#e4 #cjf4 ,permit nonspousal beneficiaries to roll assets to plans 7a7 ,in general ,section #djb7;c7 of the ,internal ,revenue ,code of #aihf is amended by adding at the end the following new paragraph3 7#ab7 ,distributions to qualified plan of nonspouse beneficiary ,if1 with respect to any portion of a distribution from an eligible retirement plan described in paragraph 7#h77;,b77iii7 of a deceased employee1 a direct trustee-to-trustee transfer is made to a plan or annuity described in clause 7iii71 7iv71 7v71 or 7vi7 of paragraph 7#h77;,b7 of an individual who is a designated beneficiary 7as defined by section #dja7;a77#i77;,e77 of the employee and who is not the surviving spouse of the employee-- 7,a7 the transfer shall be treated as an eligible rollover distribution1 and 7,b7 section #dja7;a77#i77;,b7 7other than clause 7iv7 thereof7 shall apply to such plan4 4 7b7 ,effective date ,the amendment made by subsection 7a7 shall apply to distributions made after the date of the enactment of this ,act4 #cjg4 ,eliminate the first day of the month requirement 7a7 ,in general ,paragraph 7#d7 of section #deg7;b7 of the ,internal ,revenue ,code of #aihf is amended to read as follows3 7#d7 which provides that compensation will be deferred only if an agreement providing for such deferral has been entered into before the compensation is currently available to the individual1 4 7b7 ,effective date ,the amendment made by this section shall apply to years beginning after the date of the enactment of this ,act4 #cjh4 ,office of participant and plan sponsor advocate 7a7 ,in general ,section #ghjc of the ,internal ,revenue ,code of #aihf is amended by adding at the end the following3 7e7 ,participant and plan sponsor advocate 7#a7 ,in general ,there is established in the ,internal ,revenue ,service an office to be known as the ,office of the ,participant and ,plan ,sponsor ,advocate4 7#b7 ,participant and plan sponsor advocate 7,a7 ,in general ,the ,office of the ,participant and ,plan ,sponsor ,advocate shall be under the supervision and direction of an official to be known as the ,participant and ,plan ,sponsor ,advocate4 ,the ,commissioner shall select the ,participant and ,plan ,sponsor ,advocate without regard to the provisions of title #e1 ,united ,states ,code1 relating to appointments in the competitive service or ,senior ,executive ,service4 7,b7 ,duties ,the ,participant and ,plan ,sponsor ,advocate shall-- 7i7 act as a liaison between the ,internal ,revenue ,service1 sponsors of qualified retirement plans 7as defined in section #digd7;c771 and participants in such plans1 7ii7 advocate for the full attainment of the rights of such plan sponsors and participants1 7iii7 assist pension plan sponsors and participants in resolving disputes with the ,internal ,revenue ,service1 7iv7 identify areas in which participants and plan sponsors have persistent problems in dealings with the ,internal ,revenue ,service1 7v7 to the extent possible1 propose changes in the administrative practices of the ,internal ,revenue ,service to mitigate problems1 7vi7 identify potential legislative changes which may be appropriate to mitigate problems1 and 7vii7 refer instances of fraud1 waste1 and abuse1 and violations of law to the ,office of the ,treasury ,inspector ,general for ,tax ,administration4 7,c7 ,removal ,the ,participant and ,plan ,sponsor ,advocate can only be removed from office or transferred to another position or location within the ,internal ,revenue ,service by the ,secretary of the ,treasury4 ,if the ,participant and ,plan ,sponsor ,advocate is removed from office or is transferred to another position or location within the ,internal ,revenue ,service1 the ,secretary shall communicate in writing the reasons for any such removal or transfer to ,congress not less than #cj days before the removal or transfer4 ,nothing in this paragraph shall prohibit a personnel action otherwise authorized by law1 other than transfer or removal4 7,d7 ,compensation ,the annual rate of basic pay for the ,participant and ,plan ,sponsor ,advocate shall be the same rate as the highest rate of basic pay established for the ,senior ,executive ,service under section #echb of title #e1 ,united ,states ,code1 or1 if the ,commissioner so determines1 at a rate fixed under section #iejc of such title4 7#c7 ,annual report 7,a7 ,in general ,not later than ,december #ca of each calendar year1 the ,participant and ,plan ,sponsor ,advocate shall report to the ,health1 ,education1 ,labor1 and ,pensions ,committee of the ,senate1 the ,committee on ,finance of the ,senate1 the ,committee on ,education and the ,workforce of the ,house of ,representatives1 and the ,committee on ,ways and ,means of the ,house of ,representatives on the activities of the ,office of the ,participant and ,plan ,sponsor ,advocate during the fiscal year ending during such calendar year4 7,b7 ,content ,each report submitted under subparagraph 7,a7 shall-- 7i7 summarize the assistance requests received from participants and plan sponsors and describe the activities1 and evaluate the effectiveness1 of the ,participant and ,plan ,sponsor ,advocate during the preceding year1 7ii7 identify significant problems the ,participant and ,plan ,sponsor ,advocate has identified1 7iii7 include specific legislative and regulatory changes to address the problems1 and 7iv7 identify any actions taken to correct problems identified in any previous report4 7,c7 ,concurrent submission ,the ,participant and ,plan ,sponsor ,advocate shall submit a copy of each report to the ,secretary of the ,treasury1 the ,commissioner of ,internal ,revenue1 and any other appropriate official at the same time such report is submitted to the committees of ,congress under subparagraph 7,a74 4 7b7 ,effective date ,the amendment made by this section shall take effect on ,january #a1 #bjah4 #cji4 ,simplifying #djb7;f7 notices ,not later than ,december #ca1 #bjah1 the ,secretary of the ,treasury1 in consultation with the ,secretary of ,labor and the ,director of the ,pension ,benefit ,guaranty ,corporation1 shall simplify the model notices issued under section #djb7;f7 of the ,internal ,revenue ,code of #aihf so as to facilitate better understanding by recipients of different distribution options and corresponding tax consequences4 ,such model notices shall include an explanation of the effect of elections on spousal rights4 #caj4 ,guidance related to certain overpayment recoupment practices 7a7 ,overpayments under internal revenue code ,not later than ,december #ca1 #bjah1 the ,secretary of the ,treasury shall modify the ,employee ,plans ,compliance ,resolution ,system 7as described in ,revenue ,procedure #bjaf-ea or any successor guidance7-- 7#a7 to clarify that in no case shall any person be required to seek recoupment of an inadvertent overpayment 7as defined in such ,system7 from a participant or beneficiary2 and 7#b7 in the case of an inadvertent overpayment1 except as otherwise provided by such ,secretary based on the size of the overpayment1 a contribution of such overpayment that would qualify as a rollover under section #djb7;c71 #djc7;a77#d71 #djc7;b77#h71 or #deg7;e77#af7 of the ,internal ,revenue ,code of #aihf but for the fact that it is an overpayment1 shall be treated as a rollover contribution for all purposes under such ,code4 7b7 ,overpayments under ,,erisa ,not later than ,december #ca1 #bjah1 the ,secretary of ,labor shall prescribe rules under which no fiduciary of a plan shall have a duty under part #d of title ,i of the ,employee ,retirement ,income ,security ,act of #aigd to seek recoupment from a participant or beneficiary of an inadvertent overpayment 7as defined in the ,employee ,plans ,compliance ,resolution ,system issued by the ,secretary of the ,treasury1 as described in ,revenue ,procedure #bjaf-ea or any successor guidance71 provided that such overpayment is paid back by the plan sponsor or other person4 7c7 ,overpayments by ,,pbgc ,effective for overpayments made to a participant or beneficiary after ,december #ca1 #bjah1 the ,pension ,benefit ,guaranty ,corporations shall not recoup any such overpayment by reducing any future payments with respect to the same participant or beneficiary by more than #aj percent4 #caa4 ,rules relating to election of safe harbor #dja7k7 status 7a7 ,limitation of annual safe harbor notice to matching contribution plans 7#a7 ,in general ,subparagraph 7,a7 of section #dja7k77#ab7 of the ,internal ,revenue ,code of #aihf is amended by striking if such arrangement and all that follows and inserting if such arrangement-- 7i7 meets the contribution requirements of subparagraph 7,b7 and the notice requirements of subparagraph 7,d71 or 7ii7 meets the contribution requirements of subparagraph 7,c74 4 7#b7 ,automatic contribution arrangements ,subparagraph 7,b7 of section #dja7k77#ac7 of such ,code is amended by striking means and all that follows and inserting means a cash or deferred arrangement-- 7,a7 which is described in subparagraph 7,d77i77,i7 and meets the applicable requirements of subparagraphs 7,c7 through 7,e71 or 7,b7 which is described in subparagraph 7,d77i77,,ii7 and meets the applicable requirements of subparagraphs 7,c7 and 7,d74 4 7b7 ,nonelective contributions ,section #dja7k77#ab7 of the ,internal ,revenue ,code of #aihf is amended by redesignating subparagraph 7,f7 as subparagraph 7,g71 and by inserting after subparagraph 7,e7 the following new subparagraph3 7,f7 ,timing of plan amendment for employer making nonelective contributions 7i7 ,in general ,except as provided in clause 7ii71 a plan may be amended after the beginning of a plan year to provide that the requirements of subparagraph 7,c7 shall apply to the arrangement for the plan year1 but only if the amendment is adopted-- 7,i7 at any time before the #cjth day before the close of the plan year1 or 7,,ii7 at any time before the last day under paragraph 7#h77;,a7 for distributing excess contributions for the plan year4 7ii7 ,exception where plan provided for matching contributions ,clause 7i7 shall not apply to any plan year if the plan provided at any time during the plan year that the requirements of subparagraph 7,b7 or paragraph 7#ac77;,d77i77,i7 applied to the plan year4 7iii7 #d-percent contribution requirement ,clause 7i77,,ii7 shall not apply to an arrangement unless the amount of the contributions described in subparagraph 7,c7 which the employer is required to make under the arrangement for the plan year with respect to any employee is an amount equal to at least #d percent of the employee's compensation4 4 7c7 ,automatic contribution arrangements ,section #dja7k77#ac7 of the ,internal ,revenue ,code of #aihf is amended by adding at the end the following 3 7,f7 ,timing of plan amendment for employer making nonelective contributions 7i7 ,in general ,except as provided in clause 7ii71 a plan may be amended after the beginning of a plan year to provide that the requirements of subparagraph 7,d77i77,,ii7 shall apply to the arrangement for the plan year1 but only if the amendment is adopted-- 7,i7 at any time before the #cjth day before the close of the plan year1 or 7,,ii7 at any time before the last day under paragraph 7#h77;,a7 for distributing excess contributions for the plan year4 7ii7 ,exception where plan provided for matching contributions ,clause 7i7 shall not apply to any plan year if the plan provided at any time during the plan year that the requirements of subparagraph 7,d77i77,i7 or paragraph 7#ab77;,b7 applied to the plan year4 7iii7 #d-percent contribution requirement ,clause 7i77,,ii7 shall not apply to an arrangement unless the amount of the contributions described in subparagraph 7,d77i77,,ii7 which the employer is required to make under the arrangement for the plan year with respect to any employee is an amount equal to at least #d percent of the employee's compensation4 4 7d7 ,effective date ,the amendments made by this section shall apply to plan years beginning after ,december #ca1 #bjag4 #cab4 ,use of forfeitures to fund safe harbor contributions 7a7 ,in general ,section #dja7k7 7as amended by this ,act7 is amended by adding at the end the following new paragraph3 7#af7 ,a matching contribution or nonelective contribution described in paragraph 7#c77;,d77ii71 subparagraph 7,b7 or 7,c7 of paragraph 7#ab71 or paragraph 7#ac77;,d7 shall not fail to satisfy the definition under such paragraph merely because the contribution is funded in whole or in part by forfeitures4 4 7b7 ,effective date ,the amendment made by subsection 7a7 shall apply to forfeitures allocated in accordance with section #dja7k77#af7 of the ,internal ,revenue ,code of #aihf 7as added by subsection 7a77 before1 on or after the date of enactment of this ,act4 #cac4 ,treatment of custodial accounts on termination of section #djc7;b7 plans ,not later than six months after the date of enactment of this ,act1 the ,secretary of the ,treasury shall issue guidance to provide that1 if an employer terminates the plan under which amounts are contributed to a custodial account under subparagraph 7,a7 of section #djc7;b77#g71 the plan administrator or custodian may distribute an individual custodial account in kind to a participant or beneficiary of the plan and the distributed custodial account shall be maintained by the custodian on a tax-deferred basis as a section #djc7;b77#g7 custodial account1 similar to the treatment of fully-paid individual annuity contracts under ,revenue ,ruling #bjaa-g1 until amounts are actually paid to the participant or beneficiary4 ,the guidance shall provide further 7i7 that the section #djc7;b77#g7 status of the distributed custodial account is generally maintained if the custodial account thereafter adheres to the requirements of section #djc7;b7 that are in effect at the time of the distribution of the account and 7ii7 that a custodial account would not be considered distributed to the participant or beneficiary if the employer has any material retained rights under the account 7but the employer would not be treated as retaining material rights simply because the custodial account was originally opened under a group contract74 ,such guidance shall be retroactively effective for taxable years beginning after ,december #ca1 #bjjh4 ,,iv ,defined benefit plan reforms #dja4 ,cash balance 7a7 ,in general ,section #dad of the ,internal ,revenue ,code of #aihf1 as amended by this ,act1 is amended by adding at the end the following new subsection3 7bb7 ,projected interest crediting rate ,for purposes of this part1 in the case of an applicable defined benefit plan that provides variable interest crediting rates1 the interest crediting rate that is treated as in effect and as the projected interest crediting rate shall be a reasonable projection of such variable interest crediting rate1 subject to a maximum of #f percent4 4 7b7 ,effective date ,the amendments made by this section shall apply with respect to years beginning after the date of enactment of this ,act4 #djb4 ,aligning use of lookback months to determine interest rates ,the ,secretary of the ,treasury shall modify ,treasury ,regulation section #a4dag7;e7-#a7;d77#aj77;ii7 7or any successor provision7 to provide that the same rule applicable to modifications of the time for determining the applicable interest rate shall apply to modifications of the time for determining any interest rate used by a plan to the extent that the use of such interest rate is permissible under section #dag7;e77#c7 of the ,internal ,revenue ,code of #aihf1 provided that the regulations shall require that after any such modification of such time under a plan pursuant to this section1 no further modifications of such time are to be permitted for five years with respect to such plan without the consent of the ,secretary of the ,treasury4 ,as of the date of enactment of this ,act1 such regulation 7or any successor provision7 shall be deemed to be amended in such manner1 so that this change in the regulations is deemed to have occurred4 #djc4 ,aligning employer pension contribution due date with corporate return due date 7a7 ,in general ,paragraph 7#a7 of section #dcj7;j7 of the ,internal ,revenue ,code of #aihf is amended by striking #h #a_/b and inserting #ia_/b4 7b7 ,effective date ,the amendment made by this section shall apply to payments made after the date of enactment of this ,act4 #djd4 ,clarification of the role of the ,participant and ,plan ,sponsor ,advocate ,section #djjd of the ,employee ,retirement ,income ,security ,act of #aigd 7#bi ,u4,s4,c4 #acjd7 is amended-- 7#a7 in subsection 7b7-- 7,a7 in paragraph 7#a71 by striking a liaison and inserting an independent liaison2 and 7,b7 in paragraph 7#c71 by striking assist and inserting advocate for2 7#b7 by redesignating subsections 7c7 through 7e7 as subsections 7d7 through 7f71 respectively2 and 7#c7 by inserting after subsection 7b7 the following3 7c7 ,requests for information ,the corporation shall1 upon request1 provide information to the ,participant and ,plan ,sponsor ,advocate to the extent necessary to enable the ,participant and ,plan ,sponsor ,advocate to perform the responsibilities described under this section4 4