S. 2512 — Introduced in Senate

II 118th CONGRESS 1st Session S. 2512 IN THE SENATE OF THE UNITED STATES July 26, 2023 Mr. Cassidy (for himself and Mr. Kaine) introduced the following bill; which was read twice and referred to the Committee on Finance A BILL To amend the Internal Revenue Code of 1986 to provide a credit for re-enrollment provisions in retirement plans of small employers. 1. Retirement plan re-enrollment credit for small employers (a) In general Subpart D of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 is amended by adding at the end the following new section: 45BB. Credit for re-enrollment provisions in plans provided by small employers (a) In general For purposes of section 38, in the case of an eligible employer, the retirement re-enrollment credit determined under this section for any taxable year is an amount equal to— (1) $500 for any taxable year occurring during the credit period, and (2) zero for any other taxable year. (b) Credit period For purposes of subsection (a)— (1) In general The credit period with respect to any eligible employer is the 3-taxable-year period beginning with the first taxable year for which the employer includes a re-enrollment provision in an eligible automatic contribution arrangement under a qualified employer plan (as defined in section 4972(d)) maintained by the employer. (2) Maintenance of arrangement No taxable year with respect to an employer shall be treated as occurring within the credit period unless the provision described in paragraph (1) is included in the plan for such year. (c) Re-Enrollment provision For purposes of this section— (1) In general The term re-enrollment provision means a provision of an eligible automatic contribution arrangement under which each employee eligible to participate in the arrangement who is not contributing or is contributing less than the percentage applicable to an eligible employee in the first year of eligibility is treated as being in such first year of eligibility in each applicable year with respect to the employee. (2) Election out The election treated as having been made under paragraph (1) shall cease to apply with respect to any employee if such employee makes an affirmative election— (A) not to have such contributions made, or (B) to make elective contributions at a level specified in such affirmative election. (3) Applicable year every third year (A) In general The term applicable year means, with respect to an employee, such employee’s first plan year of eligibility under the arrangement and all subsequent plan years of eligibility. (B) Exception Following any applicable year of an employee (determined after the application of this subparagraph), the plan may elect to treat the next 1 or 2 plan years as not being applicable years with respect to such employee. (d) Definitions For purposes of this section— (1) Eligible employer The term eligible employer has the meaning given such term in section 408(p)(2)(C)(i). (2) Eligible automatic contribution arrangement The term eligible automatic contribution arrangement has the meaning given such term in section 414(w)(3). . (b) Credit To be part of general business credit Subsection (b) of section 38 of the Internal Revenue Code of 1986 is amended by striking plus at the end of paragraph (40), by striking the period at the end of paragraph (41) and inserting , plus, and by adding at the end the following new paragraph: (42) in the case of an eligible employer (as defined in section 45BB(d)(1)), the retirement re-enrollment credit determined under section 45BB(a). . (c) Treatment of credit for certified professional employer organizations Paragraph (2) of section 3511(d) of the Internal Revenue Code of 1986 is amended— (1) by redesignating subparagraphs (G), (H), and (I) as subparagraphs (H), (I), and (J) respectively, and (2) by inserting after subparagraph (F) the following new subparagraph: (G) section 45BB (retirement re-enrollment credit), . (d) Clerical amendment The table of sections for subpart D of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 is amended by inserting after the item relating to section 45AA the following new item: Sec. 45BB. Credit for re-enrollment provisions in plans provided by small employers. . (e) Effective date The amendments made by this section shall apply to taxable years beginning after December 31, 2023.