,,ii #aaf? ,,congress #a/ ,session ,s4 #bcgj ,,9 ,,! ,,s5ate ,,( ,,! ,,unit$ ,,/ates ,july #ca1 #bjai,mr4 ,:iteh\se introduc$ ! foll[+ bill2 :i* 0 read twice & ref]r$ to ! ,committee on ,f9ance ,a ,,bill ,to am5d ! ,int]nal ,rev5ue ,code ( #aihf to exp& p]sonal sav+ & retirem5t sav+s cov]age by enabl+ employees n cov]$ by qualify+ retirem5t plans to save = retirem5t ?r\gh automatic ,,ira arrangem5ts1 & = o!r purposes4 #a4 ,%ort title2 ref]5ce 7a7 ,%ort title ,?is ,act may be cit$ z ! ,automatic ,,ira ,act ( #bjai4 7b7 ,am5dm5t ( #aihf ,code ,except z o!rwise expressly provid$1 :5ev] 9 ?is ,act an am5dm5t or repeal is express$ 9 t]ms ( an am5dm5t to1 or repeal (1 a section or o!r provision1 ! ref]5ce %all be consid]$ to be made to a section or o!r provision ( ! ,int]nal ,rev5ue ,code ( #aihf4 #b4 ,qualify+ automatic ,,ira arrangem5ts 7a7 ,9 g5]al ,subp>t ,a ( "p ,i ( sub*apt] ,d ( *apt] #a ( ! ,int]nal ,rev5ue ,code ( #aihf is am5d$ by ins]t+ aft] section #djh;,a ! foll[+ new section3 #djh;,b4 ,qualify+ automatic ,,ira arrangem5ts 7a7 ,9 g5]al ,= purposes ( ?is section1 a qualify+ automatic ,,ira arrangem5t is an automatic ,,ira arrangem5t :i* is (f]$ by a cov]$ employ] to ea* qualify+ employee ( ! employ]4 7b7 ,cov]$ employ] ,= purposes ( ?is section-- 7#a7 ,9 g5]al ,except z o!rwise provid$ 9 ?is subsection or subsection 7c77#b71 ! t]m cov]$ employ] means1 ) respect to any ye>1 an employ] :i* does n ma9ta9 a qualify+ plan or arrangem5t describ$ 9 section #bai7;g77#e7 = ! cal5d> ye>4 7#b7 ,exclud$ plans ,a qualify+ plan or arrangem5t %all n be tak5 into acc\nt = purposes ( p>agraph 7#a7 if-- 7,a7 ! plan or arrangem5t is froz5 z ( ! fir/ day ( ! prec$+ cal5d> ye>1 or 7,b7 9 ! case ( a plan or arrangem5t "u :i* ! only contributions are discretion>y on ! "p ( ! employ] or o!r plan sponsor-- 7i7 no employ] contribution has be5 made to ! plan or arrangem5t = ! #c-plan-ye> p]iod end+ ) ! la/ plan ye> end+ 9 ! prec$+ cal5d> ye>1 & 7ii7 x is n reasonable to assume t an employ] contribution w be made = ! la/ plan ye> end+ 9 ! prec$+ cal5d> ye>4 7#c7 ,exception = c]ta9 small & new employ]s 7,a7 ,9 g5]al ,! t]m cov]$ employ] does n include an employ] = a cal5d> ye> if ! employ]-- 7i7 did n employ m ?an #aj employees :o receiv$ at lea/ #e1jjj ( comp5sation 7z def9$ 9 section #cdja7;a77 f ! employ] = ! prec$+ cal5d> ye>1 7ii7 did n normally employ m ?an #aj employees on a typical bus9ess day ( ! prec$+ cal5d> ye>1 or 7iii7 0 n 9 exi/5ce at all times dur+ ! cal5d> ye> & ! prec$+ cal5d> ye>4 7,b7 ,op]at+ rules ,9 det]m9+ ! numb] ( employees = purposes ( subp>agraph 7,a7-- 7i7 rules consi/5t ) any rules applicable 9 det]m9+ ! numb] ( employees = purposes ( section #djh7p77#b77;,c7 & section #dihj;,b7d7 %all apply1 7ii7 all memb]s ( ! same family 7)9 ! mean+ ( section #cah7;a77#a77 %all be treat$ z #a individual1 & 7iii7 any ref]5ce to an employ] %all include a ref]5ce to any pr$ecessor employ]4 7#d7 ,exception = gov]nm5ts & *ur*es ,! t]m cov]$ employ] does n include-- 7,a7 a gov]nm5t or entity describ$ 9 section #dad7;d71 or 7,b7 a *ur* or a conv5tion or association ( *ur*es :i* is exempt f tax "u section #eja4 7#e7 ,coord9ation ) qualify+ ,/ate-facilitat$ automatic ,,ira programs 7,a7 ,9 g5]al ,9 ! case ( an employ] all ( ! employees ( :i* are employ$ 9 a s+le ,/ate1 if su* ,/ate ma9ta9s or facilitates a qualify+ ,/ate-facilitat$ automatic ,,ira program1 any employ] :i* is requir$ to p>ticipate 9 su* ,/ate program is n a cov]$ employ] = purposes ( ?is section4 7,b7 ,employ]s ) employees 9 multiple ,/ates ,9 ! case ( an employ] :i* employs employees 9 m ?an #a ,/ate-- 7i7 if ea* su* ,/ate ma9ta9s or facilitates a qualify+ ,/ate-facilitat$ automatic ,,ira program1 ! employ] p>ticipation rules ( ea* su* program 7& ( subp>agraph 7,a77 apply1 respectively1 to employees employ$ 9 su* ,/ate1 & 7ii7 if "o or m ( su* ,/ates1 b n all1 ma9ta9 or facilitate a qualify+ ,/ate-facilitat$ automatic ,,ira program-- 7,i7 ! employ] p>ticipation rules ( ea* su* program 7& ( subp>agraph 7,a77 apply1 respectively1 to employees employ$ 9 su* ,/ate1 & 7,,ii7 ! employ] is a cov]$ employ] = purposes ( ?is section ) respect to qualify+ employees employ$ 9 ,/ates :i* d n ma9ta9 or facilitate su* a program 7unless o!rwise exclud$ "u p>agraph 7#c77;,a771 unless ! employ] makes an irrevocable election to be treat$ z a cov]$ employ] = purposes ( ?is section ) respect to all qualify+ employees 9 all ,/ates4 7#f7 ,aggregation rule ,all p]sons treat$ z a s+le employ] "u subsection 7a7 or 7b7 ( section #eb or subsection 7m7 or 7o7 ( section #dad %all be treat$ z a s+le employ]4 7c7 ,qualify+ employee ,= purposes ( ?is section-- 7#a7 ,9 g5]al ,! t]m qualify+ employee means any employee ( ! employ] o!r ?an-- 7,a7 an exclud$ employee1 & 7,b7 an employee :o p>ticipates 9 7or is eligible to1 & has elect$ n to1 p>ticipate 97 a qualify+ ,/ate-facilitat$ automatic ,,ira4 7#b7 ,plan sponsor's employees ,if-- 7,a7 an employ] ma9ta9s "o or m qualify+ plans or arrangem5ts describ$ 9 section #bai7;g77#e71 7,b7 ! employees ( any subsidi>y1 division1 or o!r major bus9ess unit ( ! employ] are g5]ally n eligible to p>ticipate 9 any su* qualify+ plan or arrangem5t1 & 7,c7 ! numb] ( employees ( ! employ] describ$ 9 subp>agraph 7,b7 = a cal5d> ye> is-- 7i7 at lea/ #ej1 & 7ii7 at lea/ #aj p]c5t ( ! employees ( ! employ] 7o!r ?an excludable employees71 !n1 = purposes ( ?is section1 ! employ] %all be treat$ z a cov]$ employ] ) respect to su* employees 7o!r ?an exclud$ employees7 = ! cal5d> ye>1 & su* employees 7o!r ?an exclud$ employees7 %all be treat$ z qualify+ employees4 7#c7 ,exclud$ employees 7,a7 ,9 g5]al ,! t]m exclud$ employee means an employee ( ! employ] :o is an excludable employee & :o is 9 a class or category t ! employ] elects to exclude f treatm5t z qualify+ employees4 7,b7 ,excludable employee ,! t]m excludable employee means-- 7i7 any employee describ$ 9 section #daj7;b77#c71 7ii7 any employee :o has n atta9$ ! age ( #ah be=e ! fir/ day ( ! cal5d> ye>1 7iii7 any employee :o has n complet$ at lea/ #c mon?s ( s]vice ) ! employ]1 7iv7 9 ! case ( an employ] t ma9ta9s a qualify+ plan or arrangem5t :i* excludes employees :o h n satisfi$ ! m9imum age & s]vice requirem5ts = p>ticipation 9 ! plan1 any employee :o has n satisfi$ su* requirem5ts1 7v7 9 ! case ( an employ] t ma9ta9s a section #djc7;b7 annuity contract 7includ+ a cu/odial acc\nt or retirem5t income acc\nt71 any employee :o is p]mitt$ to be exclud$ f any sal>y r$uction arrangem5t "u ! contract pursuant to section #djc7;b77#ab71 7vi7 9 ! case ( an employ] t ma9ta9s an arrangem5t describ$ 9 section #djh7p71 any employee :o is n requir$ to be eligible to p>ticipate 9 ! arrangem5t "u section #djh7p77#d71 & 7vii7 9 ! case ( an employ] t ma9ta9s a simplifi$ employee p5sion describ$ 9 section #djh7k71 any employee :o is p]mitt$ to be exclud$ f p>ticipation "u section #djh7k77#b74 7#d7 ,guidance ,! ,secret>y %all issue regulations or o!r guidance to c>ry out ?is subsection1 includ+-- 7,a7 guidel9es = det]m9+ ! classes or categories ( employees to be cov]$ by an automatic ,,ira arrangem5t1 7,b7 if an employ] excludes employees f ! automatic ,,ira arrangem5t1 guidel9es provid+ t ! employ] %all specify ! classification or categories ( employees :o are s exclud$1 & 7,c7 rules to prev5t avoidance ( ! requirem5ts ( ?is section4 7d7 ,automatic ,,ira arrangem5t ,= purposes ( ?is section-- 7#a7 ,9 g5]al ,! t]m automatic ,,ira arrangem5t means an arrangem5t ( an employ] 7det]m9$ )\t reg>d to :e!r ! employ] is requir$ to ma9ta9 ! arrangem5t7-- 7,a7 "u :i* a qualify+ employee-- 7i7 may elect-- 7,i7 to contribute to an individual retirem5t plan1 or to pur*ase a qualify+ retirem5t bond1 by hav+ ! employ] deposit payroll d$uction am\nts or make o!r p]iodic direct deposits 7includ+ electronic paym5ts7 to ! plan or inve/ su* am\nts 9 su* qualify+ retirem5t bonds1 or 7,,ii7 to h su* paym5ts paid to ! employee directly 9 ca%1 7ii7 is treat$ z hav+ made ! election "u clause 7i77,i7 9 ! am\nt specifi$ 9 p>agraph 7#e7 until ! individual specifically elects n to h su* contributions or pur*ases made 7or specifically elects to h su* contributions or pur*ases made at a diff]5t p]c5tage or 9 a diff]5t am\nt71 & 7iii7 may elect to modify ! mann] 9 :i* su* am\nts are inve/$ = su* ye>1 7,b7 :i* meets ! adm9i/rative requirem5ts ( p>agraph 7#c71 includ+ ! notice requirem5t ( p>agraph 7#c77;,c71 & 7,c7 :i* does n *>ge unreasonable additional fees solely on ! basis t ! balance 9 an automatic ,,ira is small4 7#b7 ,employ]'s ,option to ,obta9 ,affirmative ,elections f ,employees ,in/ead ( ,automatic ,enrollm5t ,z an alt]native to automatic enrollm5t1 an employ] may *oose to comply ) p>agraph 7#a77;,a77ii7 by notify+ employees t ! employ] wi%es to obta9 f ea* qualify+ employee an affirmative election ei!r to contribute or n to contribute to an automatic ,,ira1 provid$ t any qualify+ employee :o fails to make su* an election is treat$ 9 ! mann] provid$ "u p>agraph 7#a77;,a77ii74 7#c7 ,adm9i/rative requirem5ts 7,a7 ,paym5ts ,! requirem5ts ( ?is p>agraph are met ) respect to any automatic ,,ira arrangem5t if ! employ] makes ! paym5ts elect$ or treat$ z elect$ "u p>agraph 7#a77;,a7-- 7i7 on or be=e ! la/ day ( ! mon? foll[+ ! mon? 9 :i* ! comp5sation o!rwise w\ld h be5 payable to ! employee 9 ca%1 7ii7 be=e su* lat] deadl9e prescrib$ by ! ,secret>y = mak+ su* paym5ts1 b n lat] ?an ! due date = ! deposit ( tax requir$ to be d$uct$ & )held "u *apt] #bd 7relat+ to collection ( income tax at s\rce on wages7 = ! payroll p]iod to :i* su* paym5ts relate1 or 7iii7 z e>ly z adm9i/ratively practicable4 7,b7 ,t]m9ation ( employee p>ticipation ,subject to a requirem5t = reasonable notice1 an employee may elect to t]m9ate p>ticipation 9 ! arrangem5t at any "t dur+ a cal5d> ye>1 except t if an employee s t]m9ates1 ! arrangem5t may provide t ! employee may n elect to resume p>ticipation until ! beg9n+ ( ! next cal5d> ye>4 7,c7 ,notice ( election p]iod ,! requirem5ts ( ?is p>agraph %all n be treat$ z met ) respect to any ye> unless ! employ] notifies ea* employee eligible to p>ticipate1 )9 a reasonable p]iod ( "t be=e ! #cj? day be=e ! beg9n+ ( su* ye> 7&1 = ! fir/ ye> ! employee is s eligible1 ! #cj? day be=e ! fir/ day su* employee is s eligible71 (-- 7i7 ! paym5ts t may be elect$ or treat$ z elect$ "u p>agraph 7#a77;,a71 7ii7 ! opportunity to make ! election to t]m9ate p>ticipation 9 ! arrangem5t "u subp>agraph 7,b71 7iii7 ! opportunity to make ! election "u p>agraph 7#a77;,a77ii7 to h contributions or pur*ases made at a diff]5t p]c5tage or 9 a diff]5t am\nt1 & 7iv7 ! opportunity "u p>agraph 7#a77;,a77iii7 to modify ! mann] 9 :i* su* am\nts are inve/$ = su* ye>4 7,d7 ,inve/m5t options ,! requirem5ts ( ?is p>agraph %all n be treat$ z met ) respect to any ye> unless an employee elect+ to h contributions made to an individual retirem5t plan is provid$ ) ! option to *oose among all inve/m5t options describ$ 9 subp>agraphs 7,b71 7,c71 7,d71 & 7,e7 ( p>agraph 7#f74 7#d7 ,default inve/m5ts ,if an employee is treat$ "u clause 7ii7 ( p>agraph 7#a77;,a7 z hav+ made an election to p>ticipate 9 an automatic ,,ira arrangem5t-- 7,a7 ! employee %all be deem$ to h made an election to make contributions & paym5ts 9 ! am\nt det]m9$ "u su* clause1 & 7,b7 su* contributions %all-- 7i7 be transf]r$ to an individual retirem5t plan ( ! designat$ tru/ee or issu]1 b only if ! contributions are inve/$ z provid$ 9 p>agraph 7#f71 or 7ii7 be appli$ t[>d ! pur*ase ( a qualify+ retirem5t bond4 7#e7 ,am\nt ( contributions & paym5ts 7,a7 ,9 g5]al ,! am\nt specifi$ 9 ?is p>agraph ) respect to any employee is-- 7i7 #c p]c5t ( ! comp5sation ( ! employee1 or 7ii7 su* o!r p]c5tage ( comp5sation z is specifi$ 9 regulations prescrib$ by ! ,secret>y :i* is n less ?an #b p]c5t or m ?an #f p]c5t4 7,b7 ,au?ority to provide = p]iodic increases ,9 ! case ( qualify+ employees "u an automatic ,,ira arrangem5t = #b or m consecutive ye>s1 ! ,secret>y may by regulation provide = p]iodic 7n m frequ5t ?an annual7 increases 9 ! p]c5tage ( comp5sation an employee is deem$ to h elect$ "u subp>agraph 7,a74 ,! consid]ations ! ,secret>y %all take into acc\nt 9 issu+ any regulations "u ?is subp>agraph & subp>agraph 7,a7 %all include ! pot5tial effects on l[]-income employees z well z on adequacy ( sav+s4 7,c7 ,p]mitt$ additional proc$ures to limit contributions ,an employ]-- 7i7 %all h no responsibility = any cal5d> ye> = det]m9+ :e!r1 or ensur+ t1 ! contributions ) respect to any employee d n exce$ ! d$uctible am\nt 9 effect = taxable ye>s beg9n+ 9 ! cal5d> ye> "u section #bai7;b77#e7 7det]m9$ )\t reg>d to subp>agraph 7,b7 !re(71 & 7ii7 %all n be treat$ z fail+ to satisfy ! requirem5ts ( ?is section or any o!r provision ( ?is title m]ely because ! employ] *ooses to limit ! contributions "u ?is subsection on behalf ( a qualify+ employee = any cal5d> ye> 9 a mann] reasonably design$ to avoid exce$+ su* d$uctible am\nt4 7#f7 ,requir$ inve/m5ts 7,a7 ,9 g5]al ,am\nts contribut$ "u p>agraph 7#d77;,b77i7 %all be inve/$ only 9 ! class ( assets or funds describ$ 9 subp>agraph 7,b7 unless ! employee elects a class ( assets or funds describ$ 9 subp>agraph 7,c71 7,d71 or 7,e74 7,b7 ,t>get date or lifecycle option ,! class ( assets or funds describ$ 9 ?is subp>agraph is ! class ( assets or funds t con/itutes a qualifi$ default inve/m5t alt]native "u section #beej4djd;c-#e7;e77#d77;i7 ( title #bi1 ,code ( ,f$]al ,regulations4 7,c7 ,pr9cipal pres]vation ,! class ( assets or funds describ$ 9 ?is subp>agraph is ! class ( assets or funds t is design$ to protect ! pr9cipal ( ! individual on an ongo+ basis1 includ+ passbook sav+s1 c]tificates ( deposit1 insurance contracts1 mutual funds1 ,unit$ ,/ates sav+s bonds 7:i* may be index$ = inflation71 & simil> assets specifi$ 9 regulations4 7,d7 ,gu>ante$ lifetime income option or equival5t ,! class ( assets or funds describ$ 9 ?is subp>agraph is ! class ( assets or funds t is design$ to provide an employee ) ! "r to elect to receive di/ributions z a def9$ level ( income annually 7or m frequ5tly7 = at lea/ ! rema9d] ( ! life ( ! employee or ! jo9t lives ( ! employee & ! employee's designat$ b5efici>y4 7,e7 ,o!r ,any o!r class ( assets or funds det]m9$ by ! ,secret>y to be a qualifi$ inve/m5t = purposes ( ?is section4 7#g7 ,qualify+ retirem5t bond ,= purposes ( ?is section-- 7,a7 ,9 g5]al ,! t]m qualify+ retirem5t bond means a bond issu$ "u *apt] #ca ( title #ca1 ,unit$ ,/ates ,code1 :i* by its t]ms1 or by regulations prescrib$ by ! ,secret>y "u su* *apt]-- 7i7 provides = int]e/ to be cr$it$ at rates t take into acc\nt ! expect$ duration ( ! funds inve/$ 9 su* bonds & at rates det]m9$ or adju/$ 9 a mann] & ) suffici5t frequ5cy to provide sub/antial protection f inflation1 7ii7 is n transf]able1 & 7iii7 is design$ = inve/m5t = retirem5t "u automatic ,,ira arrangem5ts or o!r sav+s vehicles4 7,b7 ,individual retirem5t plan rules applicable ,! provisions ( ?is title applicable to an individual retirem5t plan 7z def9$ 9 section #ggja7;a77#cg771 includ+ provisions relat+ to contributions1 hold+ & di/ributions1 %all apply to a qualify+ retirem5t bond1 except z det]m9$ by ! ,secret>y4 7,c7 ,annual /atem5t ,z soon z practicable aft] ! close ( ea* cal5d> ye>1 ! ,secret>y %all make available an annual /atem5t to ea* p>ticipant on behalf ( :om qualify+ retirem5t bonds h be5 pur*as$1 sett+ =?-- 7i7 paym5ts made by or on behalf ( ! p>ticipant = su* bonds dur+ su* cal5d> ye>1 7ii7 am\nts e>n$ by any su* bonds1 :e!r pur*as$ dur+ su* ye> or dur+ a prior ye>1 dur+ su* cal5d> ye>1 7iii7 ! value ( ! p>ticipant's acc\nt ) respect to su* bonds z ( ! close ( su* cal5d> ye>1 7iv7 ! importance ( div]sify+ retirem5t sav+s1 7v7 ! b5efits ( a well-balanc$ & div]sifi$ inve/m5t portfolio1 7vi7 a notice ( ! int]net website ( ! ,dep>tm5t ( ,labor = s\rces ( in=mation on individual inve/+ & div]sification1 7vii7 ! proc$ures = r$eem+ a qualify+ retirem5t bond & directly transf]r+ ! r$eem$ am\nt into an individual retirem5t plan1 7viii7 o!r factors affect+ retirem5t sav+s decisions1 & 7ix7 su* o!r in=mation z ! ,secret>y det]m9es necess>y or appropriate4 7#h7 ,treatm5t z ,ro? ,,ira ,a qualify+ employee = :om an automatic ,,ira is e/abli%$ "u p>agraph 7#a7 may elect1 at su* "t & 9 su* mann] & =m z ! ,secret>y may prescribe b n lat] ?an ! due date ( ! return = ! taxable ye> 9 :i* su* automatic ,,ira is e/abli%$1 :e!r to treat ! individual retirem5t plan z describ$1 or n describ$1 9 section #djh;,a4 ,if no su* election is made1 ! plan %all be treat$ z describ$ 9 section #djh;,a & %all meet ! requirem5ts ( section #djh;,a 7includ+ any appropriate adju/m5t or conv]sion z may be provid$ by ! ,secret>y74 7e7 ,treatm5t ( contributions 7#a7 ,9 g5]al ,a contribution to an individual retirem5t plan or pur*ase ( a retirem5t bond on behalf ( an employee "u a qualify+ automatic ,,ira arrangem5t %all be treat$ = purposes ( ?is title z if x _h be5 made directly by ! employee1 includ+ = purposes ( limitations on contributions to individual retirem5t plans4 7#b7 ,coord9ation ) )hold+ ,! ,secret>y %all modify ! )hold+ exemption c]tificate "u section #cdjb7;f7 s t1 9 ! case ( any qualify+ employee cov]$ "u an automatic ,,ira arrangem5t1 any notice & election requirem5ts ) respect to ! arrangem5t may be met ?r\gh ! use ( an atta*m5t to su* c]tificate or o!r modifications ( ! )hold+ exemption proc$ures4 7#c7 ,individual retirem5t plan rules applicable ,! provisions ( ?is title applicable to an individual retirem5t plan 7z def9$ 9 section #ggja7;a77#cg771 includ+ provisions relat+ to contributions1 hold+ & di/ributions1 %all apply to a qualify+ retirem5t bond1 except z det]m9$ by ! ,secret>y4 7#d7 ,rollov] f bonds to ,,ira ,! ,secret>y %all provide = proc$ures by :i* an individual may p]iodically elect to transf] qualify+ retirem5t bonds 7) _! proce$s7 held by ! individual to an individual retirem5t acc\nt4 ,any su* transf] %all be treat$ z a rollov] contribution = purposes ( section #djh7;d77#c7 7o!r ?an subp>agraph 7,b7 !re(74 7f7 ,model notice ,! ,secret>y1 9 coord9ation ) ! ,director ( ! ,consum] ,f9ancial ,protection ,bureau1 %all-- 7#a7 provide a model notice1 writt5 9 a mann] calculat$ to be und]/&able to ! av]age work]1 t is simple = employ]s to use-- 7,a7 to notify employees ( ! requirem5t "u section #dihj;,j = ! employ] to provide c]ta9 employees ) ! opportunity to p>ticipate 9 a qualify+ automatic ,,ira arrangem5t1 & 7,b7 to satisfy ! requirem5ts ( subsection 7d77#c77;,c71 7#b7 provide uni=m =ms = enrollm5t1 includ+ automatic enrollm5t1 9 an automatic ,,ira arrangem5t1 & 7#c7 e/abli% a website or o!r electronic means t small employ]s c access & use to obta9 in=mation on automatic ,,ira arrangem5ts & to obta9 requir$ notices & =ms4 ,! in=mation ref]r$ to 9 p>agraph 7#c7 %all be provid$ 9 a mann] design$ to assi/ employ]s & provid]s by facilitat+ ! id5tification by employ]s ( private-sector provid]s ( individual retirem5t plans & associat$ inve/m5t options t are appropriate = use 9 automatic ,,ira arrangem5ts4 7g7 ,qualify+ ,/ate-,facilitat$ automatic ,,ira ,= purposes ( ?is section-- 7#a7 ,9 g5]al ,! t]m qualify+ ,/ate-facilitat$ automatic ,,ira means an arrangem5t ( an employ] 7det]m9$ )\t reg>d to :e!r ! employ] is requir$ to ma9ta9 ! arrangem5t7 :i* op]ates z "p ( a program ma9ta9$ or facilitat$ by any ,/ate1 if-- 7,a7 su* program is e/abli%$ & ma9ta9$ z a ,/ate-sponsor$ or ,/ate-facilitat$ payroll d$uction sav+s program us+ automatic enrollm5t & is expressly e/abli%$ pursuant to ,/ate law provid+ specifically = su* program1 7,b7 su* program is implem5t$ & adm9i/]$ by ! ,/ate e/abli%+ ! program1 :i* is responsible = inve/+ ! employee sav+s or = select+ inve/m5t alt]natives = employees to *oose1 7,c7 su* program treats employees z hav+ automatically elect$ payroll d$uctions 9 an am\nt or p]c5tage ( comp5sation1 includ+ any automatic increases 9 su* am\nt or p]c5tage1 unless ! employee specifically elects n to h su* d$uctions made 7or specifically elects to h ! d$uctions made 9 a diff]5t am\nt or p]c5tage ( comp5sation all[$ by ! program71 & provides t employees are giv5 adequate advance notice ( _! "r to make su* elections1 7,d7 contributions "u su* program are inve/$ 9 individual retirem5t plans or qualify+ retirem5t bonds1 7,e7 su* program g5]ally requires p>ticipation by c]ta9 employ]s 9 ! ,/ate :i* d n (f] _! employees c]ta9 types ( tax-favor$ retirem5t plans or arrangem5ts specifi$ 9 ! t]ms ( ! program1 7,f7 "u su* program1 employ]s d n make employ] contributions1 b are requir$ to p>ticipate 9 activities includ+ collection ( employee contributions ?r\gh payroll d$uction & remittance ( contributions to ! program1 ma9t5ance ( records reg>d+ su* collections & remittances1 provision ( notice to employees1 & provision ( in=mation to ! ,/ate necess>y to facilitate ! op]ation & adm9i/ration ( ! program1 7,g7 employ]s p>ticipat+ 9 ! program receive no direct or indirect consid]ation = p>ticipation 9 ! =m ( ca% or o!rwise1 o!r ?an consid]ation 7includ+ tax cr$its or o!r tax or f9ancial inc5tives7 receiv$ directly f ! ,/ate or f ! ,f$]al gov]nm5t1 7,h7 "u su* program1 ! ,/ate assumes responsibility = ! security ( payroll d$uctions & employee sav+s1 & 7,i7 "u su* program1 ! ,/ate adopts measures to ensure t employees are notifi$ ( _! rights "u ! program & creates a me*anism = en=cem5t ( ^? rights4 ,= purposes ( subp>agraph 7,b71 ! ,/ate adm9i/]+ a program may delegate to & utilize "o or m s]vice or inve/m5t provid]s1 or o!r private- or public-sector entities1 to op]ate & adm9i/] ! program1 if ! ,/ate reta9s full responsibility = ! op]ation & adm9i/ration ( ! program4 7#b7 ,p>ticipation available to non-employees ,a program ( a ,/ate describ$ 9 p>agraph 7#a7 may p]mit p>ticipation by individuals :o are n employees1 includ+ self-employ$ individuals1 indep5d5t contractors1 sole proprietors1 & p>tn]s4 7#c7 ,program may be ma9ta9$ by multiple ,/ates ,! program describ$ 9 p>agraph 7#a7 may be "p ( a multi-,/ate program1 plan1 compact1 alliance1 p>tn]%ip1 or o!r multi-,/ate or regional arrangem5t4 7#d7 ,/ate ,= purposes ( ?is section1 ! t]m ,/ate has ! mean+ giv5 su* t]m 9 section #c7aj7 ( ! ,employee ,retirem5t ,income ,security ,act ( #aigd1 except t su* t]m also includes any gov]nm5tal ag5cy or in/rum5tality ( a ,/ate4 7h7 ,cross ref]5ce ,= provision preempt+ conflict+ ,/ate laws1 see section #b7;j7 ( ! ,automatic ,,ira ,act ( #bjai4 4 7b7 ,m&atory transf]s ,section #dja7;a77#ca77;,b77i7 ( ! ,int]nal ,rev5ue ,code ( #aihf is am5d$-- 7#a7 by ins]t+ 7includ+ a plan e/abli%$ ?r\gh a qualify+ automatic ,,ira arrangem5t 7z def9$ 9 section #djh;,b77 aft] individual retirem5t plan ea* place x appe>s1 & 7#b7 by add+ at ! end ! foll[+ new s5t5ce3 ,any am\nt s transf]r$ 7& any e>n+s !reon7 %all be inve/$ only 9 inve/m5ts describ$ 9 section #djh;,b7d77#f744 7c7 ,p5alty = failure ,to timely remit contributions to automatic ,,ira arrangem5ts ,section #dige7;c7 ( ! ,int]nal ,rev5ue ,code ( #aihf is am5d$ by add+ at ! end ! foll[+ new p>agraph3 7#g7 ,special rule = qualify+ automatic ,,ira arrangem5ts ,= purposes ( p>agraph 7#a71 if an employ] is requir$ "u a qualify+ automatic ,,ira arrangem5t "u section #djh;,b to deposit am\nts )held f an employee's comp5sation into an individual retirem5t acc\nt or t[>d ! pur*ase ( a qualify+ retirem5t bond 7z def9$ 9 section #djh;,b7d77#g77 b fails to d s )9 ! "t prescrib$ "u section #djh;,b7d77#c77;,a71 su* am\nts %all be treat$ z assets ( ! individual retirem5t acc\nt4 4 7d7 ,coord9ation ) ,employee ,retirem5t ,income ,security ,act ( #aigd 7#a7 ,exemption 7,a7 ,9 g5]al ,section #c7b7 ( ! ,employee ,retirem5t ,income ,security ,act ( #aigd 7#bi ,u4,s4,c4 #ajjb7b77 is am5d$-- 7i7 by ins]t+ or 7,c7 aft] subp>agraph 7,b7 9 subp>agraph 7,a71 & 7ii7 by add+ at ! end ! foll[+ new subp>agraph3 7,c7 ,a qualify+ automatic ,,ira arrangem5t describ$ 9 section #djh;,b ( ! ,int]nal ,rev5ue ,code ( #aihf %all n be treat$ z an employee p5sion b5efit plan or p5sion plan if1 "u ! arrangem5t1 contributions are to be made to an individual retirem5t acc\nt ! provid] ( :i* is includ$ 9 ! website li/ e/abli%$ "u section #djh;,b7f77#c7 ( su* ,code1 are to be made to an individual retirem5t plan designat$ by ! employee1 or are to be inve/$ 9 qualify+ retirem5t bonds 7z def9$ 9 section #djh;,b7d77#g774 4 7,b7 ,cu/om] id5tification program ,not)/&+ ! am5dm5t made by subp>agraph 7,a71 an individual retirem5t plan e/abli%$ pursuant to an automatic ,,ira arrangem5t describ$ 9 section #djh;,b7d7 ( ! ,int]nal ,rev5ue ,code ( #aihf %all1 = purposes ( any cu/om] id5tification program e/abli%$ "u section #ecah7l7 ( title #ca1 ,unit$ ,/ates ,code1 be treat$ z an acc\nt op5$ = ! purpose ( p>ticipat+ 9 an employee b5efit plan e/abli%$ "u ! ,employee ,retirem5t ,income ,security ,act ( #aigd4 7#b7 ,fiduci>y duties ,section #djd7;c7 ( su* ,act is am5d$ by add+ at ! end ! foll[+ new p>agraph3 7#f7 ,9 ! case ( an individual retirem5t acc\nt op5$ "u a qualify+ automatic ,,ira arrangem5t "u section #djh;,b ( su* ,code t is n exempt "u section #c7b77;,c71 a p>ticipant or b5efici>y %all1 = purposes ( p>agraph 7#a71 be treat$ z ex]cis+ control ov] ! assets 9 ! acc\nt on & aft] ! #g? day aft] notice has be5 giv5 to an employee t su* acc\nt has be5 e/abli%$ on behalf ( ! employee4 ,no reports1 o!r ?an ^? requir$ "u section #aja7;g71 %all be requir$ ) respect to an acc\nt op5$ "u a qualify+ automatic ,,ira arrangem5t "u section #djh;,b ( su* ,code4 4 7e7 ,notice ( availability ( inve/m5t guidel9es 7#a7 ,9 g5]al ,section #djh7;i7 ( ! ,int]nal ,rev5ue ,code ( #aihf is am5d$ by add+ at ! end ! foll[+ new s5t5ce3 ,any report furni%$ "u p>agraph 7#b7 to an individual %all include notice ( ! ,int]net website ( ! ,dep>tm5t ( ,labor = s\rces ( in=mation on individual inve/+ & div]sification44 7#b7 ,updat$ in=mation ,su* in=mation %all be modifi$ 7or updat$7 by ! ,secret>y ( ,labor 9 consultation ) ! ,secret>y ( ! ,treasury & ! ,*airman ( ! ,securities & ,ex*ange ,commission to address ne$$ *anges due to ! creation ( automatic ,i,r,as4 7f7 ,failure ,to provide qualify+ automatic ,,ira arrangem5ts ,*apt] #dc ( ! ,int]nal ,rev5ue ,code ( #aihf is am5d$ by add+ at ! end ! foll[+ new section3 #dihj;,j4 ,requirem5ts = cov]$ employ]s to provide qualify+ automatic ,,ira arrangem5ts 7a7 ,g5]al rule ,!re is h]eby impos$ a tax on any failure by a cov]$ employ] 7z def9$ 9 section #djh;,b7 to ma9ta9 a qualify+ ,,ira arrangem5t 7z def9$ 9 su* section71 & to meet ! requirem5ts "u su* arrangem5t1 = a cal5d> ye>4 7b7 ,am\nt 7#a7 ,9 g5]al ,! am\nt ( ! tax impos$ by subsection 7a7 on any failure = any cal5d> ye> %all be #ajj ) respect to ea* qualify+ employee 7z def9$ 9 section #djh;,b7c77 to :om su* failure relates4 7#b7 ,tax n to apply :]e failure n discov]$ & reasonable dilig5ce ex]cis$ ,no tax %all be impos$ by subsection 7a7 on any failure dur+ any p]iod = :i* x is e/abli%$ to ! satisfaction ( ! ,secret>y t ! employ] subject to liability = ! tax did n "k t ! failure exi/$ & ex]cis$ reasonable dilig5ce to ma9ta9 a qualify+ ,,ira arrangem5t & to meet ! requirem5ts "u su* arrangem5t4 7#c7 ,tax n to apply to failures correct$ )9 #ij days ,no tax %all be impos$ by subsection 7a7 on any failure if-- 7,a7 ! employ] subject to liability = ! tax "u subsection 7a7 ex]cis$ reasonable dilig5ce to ma9ta9 a qualify+ ,,ira arrangem5t & to meet ! requirem5ts "u su* arrangem5t1 & 7,b7 ! employ] provides a qualify+ automatic ,,ira arrangem5t describ$ 9 section #djh;,b to ea* qualify+ employee 7z def9$ 9 section #djh;,b7 by ! end ( ! #ij-;day p]iod beg9n+ on ! fir/ date ! employ] knew1 or ex]cis+ reasonable dilig5ce w\ld h kn[n1 t su* failure exi/$4 7#d7 ,waiv] by ,secret>y ,9 ! case ( a failure :i* is due to reasonable cause & n to willful neglect1 ! ,secret>y may waive "p or all ( ! tax impos$ by subsection 7a7 to ! ext5t t ! paym5t ( su* tax w\ld be excessive or o!rwise inequitable relative to ! failure involv$4 7c7 ,proc$ures = notice ,! ,secret>y may prescribe & implem5t proc$ures = obta9+ confirmation ( :e!r employ]s are subject to ! tax impos$ by subsection 7a74 ,! ,secret>y1 9 ! ,secret>y's discretion1 may prescribe t ! confirmation %all be obta9$ on an annual or less frequ5t basis1 & may use = ?is purpose ! annual report or qu>t]ly report = employm5t taxes1 or su* o!r means z ! ,secret>y may deem advisable4 4 7g7 ,waiv] ( e>ly )drawal p5alty = c]ta9 di/ributions foll[+ initial election ,to p>ticipate 9 automatic ,,ira arrangem5t ,section #gb7t7 ( ! ,int]nal ,rev5ue ,code ( #aihf is am5d$ by add+ at ! end ! foll[+ new p>agraph3 7#aa7 ,di/ribution foll[+ initial election to p>ticipate 9 automatic ,,ira arrangem5t ,p>agraph 7#a7 %all n apply 9 ! case ( a di/ribution to a qualify+ employee made n lat] ?an #ij days aft] ! initial election "u section #djh;,b7d77#a77;,a77ii74 4 7h7 ,bankruptcy ,section #ebb ( title #aa1 ,unit$ ,/ates ,code1 is am5d$-- 7#a7 9 subsection 7d77#ab71 by ins]t+ 1 #djh;,b aft] #djh;,a1 & 7#b7 9 subsection 7n71 by ins]t+ 1 or 9 a qualify+ automatic ,,ira arrangem5t describ$ 9 section #djh;,b aft] section #djh7p7 ( su* ,code4 7i7 ,con=m+ am5dm5ts 7#a7 ,! table ( sections = subp>t ,a ( "p ,i ( sub*apt] ,d ( *apt] #a ( ! ,int]nal ,rev5ue ,code ( #aihf is am5d$ by ins]t+ aft] ! item relat+ to section #djh;,a ! foll[+ new item3 ,sec4 #djh;,b4 ,qualify+ automatic ,,ira arrangem5ts4 4 7#b7 ,! table ( sections = *apt] #dc ( su* ,act is am5d$ by add+ at ! end ! foll[+ new item3 ,sec4 #dihj;,j4 ,requirem5ts = cov]$ employ]s to provide qualify+ automatic ,,ira arrangem5ts4 4 7j7 ,preemption ( conflict+ ,/ate laws ,! am5dm5ts made by ?is section %all sup]s$e any law ( a ,/ate t w\ld directly or indirectly prohibit or re/rict ! e/abli%m5t or op]ation ( a qualify+ automatic ,,ira arrangem5t meet+ ! requirem5ts ( section #djh;,b ( ! ,int]nal ,rev5ue ,code ( #aihf4 ,no?+ 9 su* am5dm5ts %all be con/ru$ to impair or sup]s$e any ,/ate law to ! ext5t x provides a rem$y = ! failure to make payroll deposit paym5ts "u any su* automatic ,,ira arrangem5t )9 ! p]iod requir$ "u su* section #djh;,b4 7k7 ,effective date ,! am5dm5ts made by ?is section %all apply to cal5d> ye>s beg9n+ aft] ,decemb] #ca1 #bjbj4 7l7 ,regulations ,n lat] ?an #ab mon?s aft] ! date ( ! enactm5t ( ?is ,act1 ! ,secret>y ( ! ,treasury1 9 coord9ation ) ! ,secret>y ( ,labor1 %all issue guidance def9+ ! class ( gu>ante$ lifetime income or equival5t arrangem5ts :i* meet ! requirem5ts ( section #djh;,b7d77#e77;,e7 ( ! ,int]nal ,rev5ue ,code ( #aihf1 z add$ by ?is section4 #c4 ,cr$it = small employ]s ma9ta9+ qualify+ automatic ,,ira arrangem5ts 7a7 ,9 g5]al ,subp>t ,d ( "p ,,iv ( sub*apt] ,a ( *apt] #a ( ! ,int]nal ,rev5ue ,code ( #aihf is am5d$ by add+ at ! end ! foll[+ new section3 #de,t4 ,small employ] automatic ,,ira arrangem5t 7a7 ,g5]al rule ,= purposes ( section #ch1 9 ! case ( an eligible employ] ma9ta9+ a qualify+ automatic ,,ira arrangem5t meet+ ! requirem5ts ( section #djh;,b 7)\t reg>d to :e!r ! employ] is a cov]$ employ]71 ! small employ] automatic ,,ira arrangem5t cr$it det]m9$ "u ?is section = any taxable ye> 9 ! cr$it p]iod is ! am\nt det]m9$ "u subsection 7b74 7b7 ,am\nt ( cr$it 7#a7 ,9 g5]al ,! am\nt ( ! cr$it det]m9$ "u ?is section = any taxable ye> ) respect to an eligible employ] %all be ! sum (-- 7,a7 #be multipli$ by ! numb] ( qualify+ employees 7)9 ! mean+ ( section #djh;,b7c77 = :om contributions are made "u ! qualify+ automatic ,,ira arrangem5t ref]r$ to 9 subsection 7a7 = ! cal5d> ye> 9 :i* ! taxable ye> beg9s1 plus 7,b7 ! am\nt det]m9$ "u p>agraph 7#b7 ) respect to ! taxable ye>4 7#b7 ,am\nt det]m9$ ,! am\nt det]m9$ "u ?is p>agraph is-- 7,a7 #ejj 9 ! case ( ! taxable ye> :i* beg9s 9 ! fir/ cal5d> ye> 9 :i* ! eligible employ] ma9ta9s ! qualify+ automatic ,,ira arrangem5t1 7,b7 #bej 9 ! case ( ! taxable ye> :i* beg9s 9 ! second cal5d> ye> 9 :i* ! eligible employ] ma9ta9s su* arrangem5t1 & 7,c7 #j !reaft]4 7#c7 ,limitation ,! am\nt det]m9$ "u p>agraph 7#a77;,a7 = any taxable ye> %all n exce$ #bej4 7#d7 ,coord9ation ) small employ] />tup cr$it 7,a7 ,9 g5]al ,no cr$it %all be all[$ "u ?is section to ! employ] = any taxable ye> if a cr$it is det]m9$ "u section #de;,e ) respect to ! employ] = ! taxable ye>4 7,b7 ,ext5sion ( cr$it ,if ! eligible employ] ma9ta9s a qualify+ automatic ,,ira arrangem5t meet+ ! requirem5ts ( section #djh;,b 7)\t reg>d to :e!r ! employ] is a cov]$ employ]7 ) respect to any ( ! fir/ #c cal5d> ye>s = :i* ! employ] c\ld adopt su* an arrangem5t1 & subsequ5tly adopts an eligible employ] plan = its employees = any ( ^? ye>s :i* x ma9ta9s ?r\gh\t su* #c-;cal5d>-ye> p]iod1 !n section #de;,e7b77#a7 %all be appli$ ) respect to ! eligible employ] by sub/itut+ #c taxable ye>s = #b taxable ye>s4 7c7 ,def9itions ,= purposes ( ?is section-- 7#a7 ,eligible employ] ,! t]m eligible employ] means1 ) respect to ! cal5d> ye> 9 :i* ! taxable ye> beg9s1 an employ] :i*-- 7,a7 ma9ta9s a qualify+ automatic ,,ira arrangem5t meet+ ! requirem5ts ( section #djh;,b 7)\t reg>d to :e!r ! employ] is a cov]$ employ]71 7,b7 on ea* day dur+ ! prec$+ cal5d> ye>1 _h no m ?an #ajj employees1 & 7,c7 did n ma9ta9 a qualify+ plan or arrangem5t 7describ$ 9 section #djh;,b7b77 dur+ ! portion ( ! cal5d> ye> prec$+ ! adoption ( ! qualify+ automatic ,,ira arrangem5t & ! #b prec$+ cal5d> ye>s4 7#b7 ,cr$it p]iod ,! t]m cr$it p]iod means ! fir/ #f cal5d> ye>s 9 :i* ! eligible employ] ma9ta9s ! qualify+ automatic ,,ira arrangem5t4 7d7 ,o!r rules ,= purposes ( ?is section1 ! rules ( section #de;,e7e7 %all apply4 4 7b7 ,cr$it all[$ z "p ( g5]al bus9ess cr$it ,section #ch7;b7 ( ! ,int]nal ,rev5ue ,code ( #aihf is am5d$ by /rik+ plus at ! end ( p>agraph 7#ca71 by /rik+ ! p]iod at ! end ( p>agraph 7#cb7 & ins]t+ 1 plus1 & by add+ at ! end ! foll[+ new p>agraph3 7#cc7 ! small employ] automatic ,,ira arrangem5t cr$it det]m9$ "u section #de,t7a74 4 7c7 ,cl]ical am5dm5t ,! table ( sections = subp>t ,d ( "p ,,iv ( sub*apt] ,a ( *apt] #a ( ! ,int]nal ,rev5ue ,code ( #aihf is am5d$ by add+ at ! end ! foll[+ new item3 ,sec4 #de,t4 ,small employ] automatic ,,ira arrangem5t4 4 7d7 ,effective date ,! am5dm5ts made by ?is section %all apply to taxable ye>s beg9n+ aft] ,decemb] #ca1 #bjbj4 #d4 ,increase 9 cr$it limitation = small employ] p5sion plan />tup co/s 7a7 ,9 g5]al ,section #de;,e7b77#a7 ( ! ,int]nal ,rev5ue ,code ( #aihf is am5d$ to read z foll[s3 7#a7 = ! fir/ cr$it ye> & ea* ( ! #b taxable ye>s imm$iately foll[+ ! fir/ cr$it ye>1 ! great] (-- 7,a7 #ejj1 or 7,b7 ! less] (-- 7i7 #bej = ea* employee ( ! eligible employ] :o is n a highly comp5sat$ employee 7z def9$ 9 section #dae7q77 & :o is eligible to p>ticipate 9 ! eligible employ] plan ma9ta9$ by ! eligible employ]1 or 7ii7 #e1jjj1 & 4 7b7 ,effective date ,! am5dm5t made by ?is section %all apply to taxable ye>s beg9n+ aft] ,decemb] #ca1 #bjai4