,,ii #aagth ,,congress #b;d ,session ,s4 #dcaj ,,in ,,the ,,senate ,,of ,,the ,,united ,,states ,may #be1 #bjbb,mr4 ,booker 7for himself and ,mr4 ,young7 introduced the following bill2 which was read twice and referred to the ,committee on ,finance ,a ,,bill ,to allow employers to offer pension-linked emergency savings accounts for financial emergencies1 and for other purposes4 #a4 ,short title ,this ,act may be cited as the ,emergency ,savings ,act of #bjbb4 #b4 ,emergency savings accounts linked to defined contribution plans 7a7 ,employee pension benefit plans ,section #c of the ,employee ,retirement ,income ,security ,act 7#bi ,u4,s4,c4 #ajjb7 is amended-- 7#a7 in paragraph 7#b77;,a71 by inserting after the first sentence the following3 ,a pension plan may include a pension-linked emergency savings account42 and 7#b7 by adding at the end the following3 7#de7 ,pension-linked emergency savings account ,the term pension-linked emergency savings account means an account established or maintained by a sponsor of a defined contribution plan for purposes of offering or providing a participant of such plan the opportunity to maintain a short-term savings account that-- 7,a7 is offered as part of such defined contribution plan2 7,b7 accepts only-- 7i7 participant contributions which are treated in the same manner as ,roth contributions for purposes of inclusion in gross income2 and 7ii7 employer contributions which are includible in gross income of the participant for purposes of the ,internal ,revenue ,code of #aihf2 and 7,c7 meets the requirements of part #h of subtitle ,b4 4 7b7 ,pension-,linked emergency savings accounts 7#a7 ,in general ,subtitle ,b of title ,i of the ,employee ,retirement ,income ,security ,act 7#bi ,u4,s4,c4 #ajba et seq47 is amended by adding at the end the following3 #h ,pension-linked emergency savings accounts #hja4 ,pension-linked emergency savings accounts 7a7 ,in general ,a plan sponsor of a defined contribution plan may make available to participants of such pension plan a pension-linked emergency savings account4 ,a plan sponsor that offers participants a pension-linked emergency savings account may deduct amounts from each participating employee's compensation in accordance with subsection 7c7 and deposit such amounts1 and any employer contributions under such subsection1 to an account that meets the requirements of subsection 7b74 7b7 ,account requirements 7#a7 ,in general ,a pension-linked emergency savings account offered in accordance with subsection 7a7 shall-- 7,a7 not have a minimum account balance requirement2 7,b7 allow for withdrawal by the participant of the account balance1 in whole or in part at the discretion of the participant1 at least once per calendar month and for distribution of such withdrawal to the participant as soon as practicable but1 other than in exceptional circumstances1 not later than #a week from the date on which the participant elects to make such withdrawal2 7,c7 be held as cash1 in an interest-bearing deposit account1 or in an investment or insurance product designed to preserve principal and provide a reasonable rate of return1 whether or not such return is guaranteed1 consistent with liquidity2 and 7,d7 not be subject to-- 7i7 any unreasonable fees1 restrictions1 expenses1 or charges in connection with such pension-linked emergency savings account2 and 7ii7 any fees in connection with the withdrawal of funds from such pension-linked emergency savings account other than reasonable reimbursement fees imposed for paper mailings and the handling of paper checks related to such pension-linked emergency savings account4 7#b7 ,establishment and termination of account 7,a7 ,establishment of account ,the establishment of a pension-linked emergency savings account shall be included in the defined contribution plan document of the associated defined contribution plan4 7,b7 ,termination of account ,a plan sponsor may terminate the pension-linked emergency savings account feature of an associated defined contribution plan at any time4 ,such termination shall be treated as if a termination of employment had occurred in accordance with subsection 7d71 except the reasonable time described in such subsection shall be as soon as practicable not later than #fj days after the date of such termination of the pension-linked emergency savings account feature of such associated defined contribution plan4 7c7 ,account contributions 7#a7 ,employer contributions 7,a7 ,in general ,subject to the maximum account balance under paragraph 7#c71 a plan sponsor may1 without regard to any election otherwise by a participant1 deposit to the pension-linked emergency savings account of the participant an amount in addition to the amount contributed by the participant under paragraph 7#b74 7,b7 ,employer contributions ,employer contributions shall be included in the gross income of a participant for purposes of the ,internal ,revenue ,code of #aihf4 7#b7 ,participant contributions 7,a7 ,in general ,subject to the maximum account balance under paragraph 7#c7-- 7i7 a plan sponsor may automatically enroll a participant in the pension-linked emergency savings account at a participant contribution rate selected by the plan sponsor1 which1 unless the participant affirmatively elects a different percentage of the compensation of the participant to be contributed to the pension-linked emergency savings account1 may not exceed #c percent of the compensation of the participant2 or 7ii7 a participant may enroll in the pension-linked emergency savings account at a participant contribution rate selected by the participant4 7,b7 ,control of transfer ,a participant1 at any time 7subject to such reasonable advance notice as is required by the plan administrator71 may-- 7i7 adjust the participant contribution rate under subparagraph 7,a7 to the pension-linked emergency savings account of the participant2 or 7ii7 opt out of or pause for a specified period of time such contributions4 7,c7 ,adjustment of participant contribution rate by plan sponsor ,a plan sponsor may adjust the participant contribution rate selected by such plan sponsor described in subparagraph 7,a77i7 not more than once annually4 7#c7 ,account limits 7,a7 ,in general ,subject to subparagraph 7,b71 no contributions under paragraphs 7#a7 and 7#b7 shall be accepted to the extent such contributions would cause the balance of the pension-linked emergency savings account to exceed the lesser of-- 7i7 #b1ejj2 or 7ii7 an amount determined by the plan sponsor of the pension-linked emergency savings account4 ,in the case of contributions made in taxable years beginning after ,december #a1 #bjbc1 the ,secretary shall adjust the amount under clause 7i7 at the same time and in the same manner as the adjustment made by the ,secretary of the ,treasury under section #dae7;d7 of the ,internal ,revenue ,code of #aihf1 except that the base period shall be the calendar quarter beginning ,july #a1 #bjbb4 ,any increase under the preceding sentence which is not a multiple of #ajj shall be rounded to the next lowest multiple of #ajj4 7,b7 ,excess contributions directed to plan ,to the extent any elected contributions under paragraphs 7#a7 and 7#b7 to the pension-linked emergency savings account of a participant for a taxable year would cause the balance of the pension-linked emergency savings account to exceed the maximum account balance described in subparagraph 7,a7-- 7i7 the participant may be treated as having elected to increase the participant's contributions to the associated defined contribution plan by an amount not more than the rate at which contributions were being made to the pension-linked emergency savings account2 and 7ii7 any such contributions shall be treated as elective deferrals 7as such term is defined in section #djb7;g77#c7 of the ,internal ,revenue ,code of #aihf7 under such plan and shall be contributed to the plan on behalf of the participant instead of to the pension-linked emergency savings account4 7#d7 ,disclosure by plan sponsor of transfer 7,a7 ,in general ,not less than #ae days prior to the date on which the first transfer under this subsection occurs1 the percentage of compensation and amount of the participant's compensation transferred under paragraph 7#a7 is adjusted1 or the plan sponsor adjusts the percentage of compensation of the automatic participant contribution under paragraph 7#b77;,a77i71 the plan sponsor shall provide to the participant notice of-- 7i7 the purpose of the account being for short-term1 emergency savings2 7ii7 the amount of the intended contribution or the change in the percentage of the compensation of the participant of such contribution2 7iii7 in accordance with paragraph 7#b77;,b71 the instructions on how to-- 7,i7 adjust the participant contribution rate under paragraph 7#b77;,a7 to the pension-linked emergency savings account of the participant2 or 7,,ii7 opt out of or pause for a specified period of time such contributions2 7iv7 how such contributions will be invested2 7v7 the limits on1 and tax treatment of1 such contributions2 7vi7 any fees1 expenses1 or charges associated with such pension-linked emergency savings account2 and 7vii7 procedures for participant withdrawals from such pension-linked emergency savings account1 including any limits on frequency4 7,b7 ,consolidated notices ,the required notices under subparagraph 7,a7 may be included with any other notice under this ,act1 including under section #djd7;c77#e77;,b7 or #ead7;e77#c71 or under section #dja7k77#ac77;,e7 or #dad7w77#d7 of the ,internal ,revenue ,code of #aihf1 if such other notice is provided to the participant not less than #ae days prior to the date described in such subparagraph and not more than #fj days prior to the date on which the first transfer under this subsection occurs4 7#e7 ,employer matching contributions to a defined contribution plan for employee contributions to a pension-linked emergency savings account 7,a7 ,in general ,if an employer makes any matching contributions to a defined contribution plan of which a pension-linked emergency savings account is part-- 7i7 any contribution under paragraph 7#b7 to a pension-linked emergency savings account of the participant shall be treated as an elective deferral for purposes of matching contributions by such employer to such defined contribution plan2 and 7ii7 such employer shall make matching contributions on behalf of such participant to the associated defined contribution plan on account of such contributions under paragraph 7#b7 at the same rate as any other matching contribution on account of an elective deferral by such participant4 ,to the extent any such matching contribution exceeds the maximum account balance under paragraph 7#c77;,a71 such contributions shall be contributed to the plan as provided in paragraph 7#c77;,b74 7,b7 ,definitions ,for purposes of subparagraph 7,a71 the terms matching contribution and elective deferral shall have the meanings given such terms in section #dja7m77#d7 of the ,internal ,revenue ,code of #aihf4 7d7 ,account balance after termination of employment ,upon termination of employment of the participant1 the pension-linked emergency savings account of such participant shall-- 7#a7 allow1 as relevant1 for transfer by the participant of the account balance of such account1 in whole or in part1 into the designated ,roth account 7within the meaning of section #djb;,a of the ,internal ,revenue ,code of #aihf7 of the participant under the associated defined contribution plan2 and 7#b7 for any amounts in such account not transferred under paragraph 7#a71 make such amounts available within a reasonable time not later than the earlier of the date on which the employer contributing to the plan makes the final compensation payment related to such employment or #fj days after the date of such termination-- 7,a7 to the participant or the beneficiary2 or 7,b7 as a direct rollover to a ,roth ,,ira 7as defined in section #djh;,a7b7 of the ,internal ,revenue ,code of #aihf7 of such participant4 7e7 ,coordination with plan hardship rules ,under the terms of the plan of which a pension-linked emergency savings account is a part1 a participant shall be required to withdraw all amounts in a pension-linked emergency savings account of the participant before receiving any plan distribution which is based on financial hardship or any loan from the plan4 #hjb4 ,annual notice for pension-linked emergency savings account 7a7 ,in general ,at least annually1 the plan sponsor of a pension-linked emergency savings account shall provide to the pension-linked emergency savings account participant a notice containing such information as the ,secretary may require1 including a description of-- 7#a7 the purpose and tax treatment of the pension-linked emergency savings account and contributions2 7#b7 procedures for opting out of the pension-linked emergency savings account1 changing participant contribution rates for such account1 and making withdrawals from such account1 and limits on contributions and withdrawals2 7#c7 designated investment options for amounts contributed to the pension-linked emergency savings account2 7#d7 the options under section #hja7;d7 for the account balance of the pension-linked emergency savings account after termination of the employment of the participant2 7#e7 any fees1 expenses1 or charges associated with such pension-linked emergency savings account2 and 7#f7 the amount that a participant has contributed to the pension-linked emergency savings account and the amount the plan sponsor has contributed to such pension-linked emergency savings account for the plan year1 and the account balance4 7b7 ,consolidated notices ,the required notice under subparagraph 7,a7 may be included with any other notice under this ,act if such other notice is provided to the participant at least annually4 #hjc4 ,preemption of ,state anti-garnishment laws ,notwithstanding any other provision of law1 this part shall supersede any law of a ,state which would directly or indirectly prohibit or restrict the use of an automatic contribution arrangement1 in accordance with section #hja7;c77#b71 for a pension-linked emergency savings account4 ,the ,secretary may promulgate regulations to establish minimum standards that such an arrangement would be required to satisfy in order for this subsection to apply with respect to such an account4 #hjd4 ,reporting and disclosure requirements ,the ,secretary shall prescribe such regulations as may be necessary to address reporting and disclosure requirements for pension-linked emergency savings accounts in order to prevent unnecessary reporting and disclosure for such accounts under this ,act1 including for purposes of any reporting or disclosure related to pension plans required by this title or title ,,iv or under the ,internal ,revenue ,code of #aihf4 #hje4 ,report to ,congress on maximum account balance limits ,the ,secretary of ,labor and the ,secretary of the ,treasury shall-- 7#a7 conduct a study on the use of emergency savings from a pension-linked emergency savings account regarding-- 7,a7 whether the maximum account balance under section #hja7;c77#c7 is sufficient2 7,b7 whether the limitation on contributions under sections #hja7;c77#b77;,a77i7 are appropriate2 and 7,c7 the participation rate of such accounts by plan sponsors and participants and the resulting impact on participant retirement savings1 including the impact on retirement savings leakage and the effect of such accounts on retirement plan participation by low- and moderate-income households2 and 7#b7 not later than #g years after the date of enactment of the ,emergency ,savings ,act of #bjbb1 submit to ,congress a report on the findings of the study under paragraph 7#a74 4 7#b7 ,clerical amendment ,the table of contents in section #a of the ,employee ,retirement ,income ,security ,act of #aigd 7#bi ,u4,s4,c4 #ajja note7 is amended by inserting after the item relating to section #gcd the following new items3 ,part #h4 ,pension-,linked emergency savings accounts#hja4 ,pension-linked emergency savings accounts4#hjb4 ,annual notice for pension-linked emergency savings account4#hjc4 ,preemption of ,state anti-garnishment laws4#hjd4 ,reporting and disclosure requirements4#hje4 ,report to ,congress on maximum account balance limits4 4 7c7 ,reporting for a pension-,linked emergency savings account 7#a7 ,alternative methods of compliance ,section #aaj7;a7 of the ,employee ,retirement ,income ,security ,act 7#bi ,u4,s4,c4 #ajcj7;a77 is amended by inserting 7including pension-linked emergency savings accounts offered in conjunction with a pension plan7 after class of pension plans4 7#b7 ,minimized reporting burden for pension-linked emergency savings accounts ,section #aja of such ,act 7#bi ,u4,s4,c4 #ajba7 is amended-- 7,a7 by redesignating subsection 7n7 as subsection 7o72 and 7,b7 by inserting after subsection 7m7 the following3 7n7 ,pension-,linked emergency savings accounts 7#a7 ,in general ,the requirements of subsection 7a7 shall not apply to a pension-linked emergency savings account made available under section #hja4 7#b7 ,simplified reporting ,nothing in this subsection shall preclude the ,secretary from providing1 by regulations or otherwise1 simplified reporting procedures or requirements for such a pension-linked emergency savings account4 4 7d7 ,fiduciary duty ,section #djd7;c7 of the ,employee ,retirement ,income ,security ,act 7#bi ,u4,s4,c4 #aajd7;c77 is amended by adding at the end the following3 7#f7 ,default investment arrangements for a pension-linked emergency savings account ,for purposes of paragraph 7#a71 a participant in a pension-linked emergency savings account shall be treated as exercising control over the assets in the account with respect to the amount of contributions and earnings which are invested in accordance with section #hja7;b77#a77;,c74 4 7e7 ,tax treatment of pension-,linked emergency savings accounts 7#a7 ,in general ,subpart ,a of part ,i of subchapter ,d of chapter #a of the ,internal ,revenue ,code of #aihf is amended by inserting after section #dji;,a the following new section3 #dji;,b4 ,pension-linked emergency savings accounts 7a7 ,in general ,any pension-linked emergency savings account established pursuant to section #hja of the ,employee ,retirement ,income ,security ,act of #aigd shall be treated for purposes of this title as provided in this section4 7b7 ,treatment as after-,tax contributions ,any contribution to a pension-linked emergency savings account shall be-- 7#a7 an employee contribution1 or 7#b7 if made by an employer1 shall be includible in gross income of the employee4 7c7 ,plan qualifications ,any plan of which a pension-linked emergency savings account is a part shall not be treated as failing to meet any requirement of this chapter solely by reason of including such account1 or solely by reason of allowing distributions from such account in a manner consistent with section #hja7;b77#a77;,b7 of the ,employee ,retirement ,income ,security ,act of #aigd4 7d7 ,coordination with plan 7#a7 ,in general ,no distribution of amounts from a pension-linked emergency savings account shall be contributed or rolled over to any eligible retirement plan 7as defined in section #djb7;c77#h77;,b77 except as provided in paragraph 7#b74 7#b7 ,rollover on termination of employment ,upon termination of employment of the participant with the employer sponsoring the plan of which a pension-linked emergency savings account is part1 the account balance of such account may be contributed to-- 7,a7 a designated ,roth account 7within the meaning of section #djb;,a7 of the participant1 or 7,b7 a ,roth ,,ira of the participant1 in accordance with section #hja7;d7 of the ,employee ,retirement ,income ,security ,act of #aigd4 ,such contribution shall be treated in the same manner as a rollover contribution to which section #djb;,a7c77#d7 applies or as a qualified rollover contribution within the meaning of section #djh;,a7e71 whichever is applicable1 except that subparagraph 7,f7 of section #djh;,a7d77#c7 shall not apply to such contribution 7including by reason of section #djb;,a7c77#d77;,d774 7e7 ,coordination with nondiscrimination requirements and contribution limitations ,for purposes of paragraphs 7#d7 and 7#cj7 of section #dja7;a71 paragraphs 7#c71 7#ab71 and 7#ac7 of section #dja7k71 section #dja7m71 section #djc7;b77#a77;,e71 and section #dae1 contributions to a pension-linked emergency savings account-- 7#a7 shall be treated as elective deferrals1 and 7#b7 shall be aggregated with contributions to the plan of which such account is a part4 7f7 ,hardship rules ,a plan of which a pension-linked emergency savings account is a part shall not be treated as failing to meet any requirement of this chapter solely because under the terms of the plan a participant is required to withdraw all amounts in a pension-linked emergency savings account of the participant before receiving any distribution which is based on financial hardship or any loan from the plan4 7g7 ,exemption from additional tax on early distributions ,a pension-linked emergency savings account shall not be treated as a qualified retirement plan for purposes of section #gb7t74 7h7 ,treatment of earnings ,any earnings on contributions to a pension-linked emergency savings account shall not be included in gross income1 and distributions from such account shall not be subject to withholding4 4 7#b7 ,basis recovery ,section #gb7;d7 of such ,code is amended by adding at the end the following new paragraph3 7#c7 ,treatment of contributions to a pension-linked emergency savings account ,for purposes of this section1 contributions to a pension-linked emergency savings account to which section #dji;,b applies 7and any income allocable thereto7 may be treated as a separate contract4 4 7#c7 ,clerical amendment ,the table of sections for subpart ,a of part ,i of subchapter ,d of chapter #a of such ,code is amended by inserting after the item relating to section #dji;,a the following new item3 ,sec4 #dji;,b4 ,pension-linked emergency savings accounts4 4 7f7 ,joint regulatory authority ,the ,secretary of ,labor and the ,secretary of the ,treasury 7or a delegate of either such ,secretary7 shall have authority to issue joint regulations or other guidance1 or to coordinate in developing regulations or other guidance1 to carry out the purposes of this ,act1 including adjustment of the maximum benefit under section #hja7;c77#c7 of the ,employee ,retirement ,income ,security ,act1 as added by this ,act1 to account for inflation1 as well as expansion of corrections programs1 if necessary4