Retirement Enhancement and Savings Act of 2019

I 116TH CONGRESS 1ST SESSION H. R. 1007 To amend the Internal Revenue Code of 1986 to encourage retirement savings, and for other purposes. IN THE HOUSE OF REPRESENTATIVES FEBRUARY 6, 2019 Mr. KIND (for himself, Mr. KELLY of Pennsylvania, Mr. BLUMENAUER, Ms. SA´NCHEZ, Mr. BEYER, Ms. JUDY CHU of California, Mr. HIGGINS of New York, Mr. HOLDING, Mr. KILDEE, Mr. PASCRELL, and Mr. LARSON of Connecticut) introduced the following bill; which was referred to the Committee on Ways and Means, and in addition to the Committee on Education and Labor, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned A BILL To amend the Internal Revenue Code of 1986 to encourage retirement savings, and for other purposes. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE, ETC. 3 (a) SHORT TITLE.—This Act may be cited as the 4 ‘‘Retirement Enhancement and Savings Act of 2019’’. 5 (b) TABLE OF CONTENTS.—The table of contents of 6 this Act is as follows: 7 VerDate Sep 11 2014 01:39 Feb 16, 2019 Jkt 089200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H1007.IH H1007 pamtmann on DSKBFK8HB2PROD with BILLS 2 •HR 1007 IH Sec. 1. Short title, etc. TITLE I—EXPANDING AND PRESERVING RETIREMENT SAVINGS Sec. 101. Multiple employer plans. Sec. 102. Pooled employer and multiple employer plan reporting. Sec. 103. Removal of 10 percent cap from automatic enrollment safe harbor after 1st plan year. Sec. 104. Rules relating to election of safe harbor 401(k) status. Sec. 105. Increase in credit limitation for small employer pension plan startup costs. Sec. 106. Small employer automatic enrollment credit. Sec. 107. Certain taxable non-tuition fellowship and stipend payments treated as compensation for IRA purposes. Sec. 108. Repeal of maximum age for traditional IRA contributions. Sec. 109. Expansion of IRA ownership of S corporation bank stock. Sec. 110. Qualified employer plans prohibited from making loans through credit cards and other similar arrangements. Sec. 111. Portability of lifetime income options. Sec. 112. Treatment of custodial accounts on termination of section 403(b) plans. Sec. 113. Clarification of retirement income account rules relating to church- controlled organizations. TITLE II—ADMINISTRATIVE IMPROVEMENTS Sec. 201. Plan adopted by filing due date for year may be treated as in effect as of close of year. Sec. 202. Combined annual report for group of plans. Sec. 203. Disclosure regarding lifetime income. Sec. 204. Fiduciary safe harbor for selection of lifetime income provider. Sec. 205. Modification of nondiscrimination rules to protect older, longer serv- ice participants. Sec. 206. Modification of PBGC premiums for CSEC plans. TITLE III—BENEFITS RELATING TO UNITED STATES TAX COURT Sec. 301. Thrift Savings Plan contributions for judges in the Federal Employ- ees Retirement System. Sec. 302. Change in vesting period for survivor annuities and waiver of vesting period in the event of assassination. Sec. 303. Coordination of retirement and survivor annuity with the Federal Employees Retirement System. Sec. 304. Limit on teaching compensation of retired judges. Sec. 305. General provisions relating to magistrate judges of the Tax Court. Sec. 306. Life insurance for magistrate judges of the Tax Court age 65 or older. Sec. 307. Retirement and annuity program. Sec. 308. Provisions for recall. TITLE IV—OTHER BENEFITS Sec. 401. Benefits provided to volunteer firefighters and emergency medical re- sponders. TITLE V—REVENUE PROVISIONS VerDate Sep 11 2014 01:39 Feb 16, 2019 Jkt 089200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6211 E:\BILLS\H1007.IH H1007 pamtmann on DSKBFK8HB2PROD with BILLS 3 •HR 1007 IH Sec. 501. Modifications of required distribution rules for pension plans. Sec. 502. Increase in penalty for failure to file. Sec. 503. Increased penalties for failure to file retirement plan returns. Sec. 504. Increase information sharing to administer excise taxes. Sec. 505. Pension variable rate premium payment acceleration. TITLE I—EXPANDING AND PRE- 1 SERVING RETIREMENT SAV- 2 INGS 3 SEC. 101. MULTIPLE EMPLOYER PLANS. 4 (a) QUALIFICATION REQUIREMENTS.— 5 (1) IN GENERAL.—Section 413 of the Internal 6 Revenue Code of 1986 is amended by adding at the 7 end the following new subsection: 8 ‘‘(e) APPLICATION OF QUALIFICATION REQUIRE- 9 MENTS FOR CERTAIN MULTIPLE EMPLOYER PLANS WITH 10 POOLED PLAN PROVIDERS.— 11 ‘‘(1) IN GENERAL.—Except as provided in para- 12 graph (2), if a defined contribution plan to which 13 subsection (c) applies— 14 ‘‘(A) is sponsored by employers all of 15 which have both a common interest other than 16 having adopted the plan and control of the 17 plan, or 18 ‘‘(B) in the case of a plan not described in 19 subparagraph (A), has a pooled plan provider, 20 then the plan shall not be treated as failing to meet 21 the requirements under this title applicable to a plan 22 described in section 401(a) or to a plan that consists 23 VerDate Sep 11 2014 01:39 Feb 16, 2019 Jkt 089200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H1007.IH H1007 pamtmann on DSKBFK8HB2PROD with BILLS 4 •HR 1007 IH of individual retirement accounts described in sec- 1 tion 408 (including by reason of subsection (c) 2 thereof), whichever is applicable, merely because one 3 or more employers of employees covered by the plan 4 fail to take such actions as are required of such em- 5 ployers for the plan to meet such requirements. 6 ‘‘(2) LIMITATIONS.— 7 ‘‘(A) IN GENERAL.—Paragraph (1) shall 8 not apply to any plan unless the terms of the 9 plan provide that in cases of employers failing 10 to take the actions described in paragraph 11 (1)— 12 ‘‘(i) the assets of the plan attributable 13 to employees of the employer will be trans- 14 ferred to a plan maintained only by the 15 employer (or its successor), to an eligible 16 retirement plan as defined in section 17 402(c)(8)(B) for each individual whose ac- 18 count is transferred, or to any other ar- 19 rangement that the Secretary determines is 20 appropriate, unless the Secretary deter- 21 mines it is in the best interests of such em- 22 ployees to retain the assets in the plan, 23 and 24 VerDate Sep 11 2014 01:39 Feb 16, 2019 Jkt 089200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H1007.IH H1007 pamtmann on DSKBFK8HB2PROD with BILLS 5 •HR 1007 IH ‘‘(ii) the employer described in clause 1 (i) (and not the plan with respect to which 2 the failure occurred or any other partici- 3 pating employer in such plan) shall, except 4 to the extent provided by the Secretary, be 5 liable for any liabilities with respect to 6 such plan attributable to employees of the 7 employer. 8 ‘‘(B) FAILURES BY POOLED PLAN PRO- 9 VIDERS.—If the pooled plan provider of a plan 10 described in paragraph (1)(B) does not perform 11 substantially all of the administrative duties 12 which are required of the provider under para- 13 graph (3)(A)(i) for any plan year, the Sec- 14 retary, in the Secretary’s own discretion, may 15 provide that the determination as to whether 16 the plan meets the requirements under this title 17 applicable to a plan described in section 401(a) 18 or to a plan that consists of individual retire- 19 ment accounts described in section 408 (includ- 20 ing by reason of subsection (c) thereof), which- 21 ever is applicable, shall be made in the same 22 manner as would be made without regard to 23 paragraph (1). 24 VerDate Sep 11 2014 01:39 Feb 16, 2019 Jkt 089200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H1007.IH H1007 pamtmann on DSKBFK8HB2PROD with BILLS 6 •HR 1007 IH ‘‘(3) POOLED PLAN PROVIDER.—For purposes 1 of this subsection— 2 ‘‘(A) IN GENERAL.—The term ‘pooled plan 3 provider’ means, with respect to any plan, a 4 person who— 5 ‘‘(i) is designated by the terms of the 6 plan as a named fiduciary (within the 7 meaning of section 402(a)(2) of the Em- 8 ployee Retirement Income Security Act of 9 1974), as the plan administrator, and as 10 the person responsible to perform all ad- 11 ministrative duties (including conducting 12 proper testing with respect to the plan and 13 employees of each participating employer) 14 which are reasonably necessary to ensure 15 that— 16 ‘‘(I) the plan meets any require- 17 ment applicable under the Employee 18 Retirement Income Security Act of 19 1974 or this title to a plan described 20 in section 401(a) or to a plan that 21 consists of individual retirement ac- 22 counts described in section 408 (in- 23 cluding by reason of subsection (c) 24 thereof), whichever is applicable, and 25 VerDate Sep 11 2014 01:39 Feb 16, 2019 Jkt 089200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H1007.IH H1007 pamtmann on DSKBFK8HB2PROD with BILLS 7 •HR 1007 IH ‘‘(II) each participating employer 1 takes such actions as the Secretary or 2 such person determines are necessary 3 for the plan to meet the requirements 4 described in subclause (I), including 5 providing to such person any disclo- 6 sures or other information which the 7 Secretary may require or which such 8 person otherwise determines is nec- 9 essary to administer the plan or to 10 allow the plan to meet such require- 11 ments, 12 ‘‘(ii) registers as a pooled plan pro- 13 vider with the Secretary, and provides such 14 other information to the Secretary as the 15 Secretary may require, before beginning 16 operations as a pooled plan provider, 17 ‘‘(iii) acknowledges in writing that 18 such person is a named fiduciary (within 19 the meaning of section 402(a)(2) of the 20 Employee Retirement Income Security Act 21 of 1974), and the plan administrator, with 22 respect to the plan, and 23 ‘‘(iv) is responsible for ensuring that 24 all persons who handle assets of, or who 25 VerDate Sep 11 2014 01:39 Feb 16, 2019 Jkt 089200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H1007.IH H1007 pamtmann on DSKBFK8HB2PROD with BILLS 8 •HR 1007 IH are fiduciaries of, the plan are bonded in 1 accordance with section 412 of the Em- 2 ployee Retirement Income Security Act of 3 1974. 4 ‘‘(B) AUDITS, EXAMINATIONS AND INVES- 5 TIGATIONS.—The Secretary may perform au- 6 dits, examinations, and investigations of pooled 7 plan providers as may be necessary to enforce 8 and carry out the purposes of this subsection. 9 ‘‘(4) GUIDANCE.— 10 ‘‘(A) IN GENERAL.—The Secretary shall 11 issue such guidance as the Secretary determines 12 appropriate to carry out this subsection, includ- 13 ing guidance— 14 ‘‘(i) to identify the administrative du- 15 ties and other actions required to be per- 16 formed by a pooled plan provider under 17 this subsection, 18 ‘‘(ii) which describes the procedures to 19 be taken to terminate a plan which fails to 20 meet the requirements to be a plan de- 21 scribed in paragraph (1), including the 22 proper treatment of, and actions needed to 23 be taken by, any participating employer of 24 the plan and the assets and liabilities of 25 VerDate Sep 11 2014 01:39 Feb 16, 2019 Jkt 089200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\H1007.IH H1007 pamtmann on DSKBFK8HB2PROD with BILLS 9 •HR 1007 IH the plan with respect to employees of that 1 employer, and 2 ‘‘(iii) identifying appropriate cases to 3 which the rules of paragraph (2)(A) will 4 apply to employers failing to take the ac- 5 tions described in paragraph (1). 6 The Secretary shall take into account under 7 clause (iii) whether the failure of an employer 8 or pooled plan provider to provide any disclo- 9 sures or other information, or to take any other 10 action, necessary to administer a plan or to 11 allow a plan to meet requirements applicable to 12 the plan under section 401(a) or 408, whichever 13 is applicable, has continued over a period of 14 time that clearly demonstrates a lack of com- 15 mitment to compliance. 16 ‘‘(B) PROSPECTIVE APPLICATION.—Any 17 guidance issued by the Secretary under this 18 paragraph shall not apply to any action or fail- 19 ure occurring before the issuance of such guid- 20 ance. 21 ‘‘(5) MODEL PLAN.—The Secretary shall, in 22 consultation with the Secretary of Labor when ap- 23 propriate, publish model plan language which meets 24 the requirements of this subsection and of para- 25 VerDate Sep 11 2014 01:39 Feb 16, 2019 Jkt 089200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\H1007.IH H1007 pamtmann on DSKBFK8HB2PROD with BILLS 10 •HR 1007 IH graphs (43) and (44) of section 3 of the Employee 1 Retirement Income Security Act of 1974 and which 2 may be adopted in order for a plan to be treated as 3 a plan described in paragraph (1)(B).’’. 4 (2) CONFORMING AMENDMENT.—Paragraph (3) 5 of section 413(b) of such Code is amended by strik- 6 ing ‘‘section 401(a)’’ and inserting ‘‘sections 401(a) 7 and 408(c)’’. 8 (3) TECHNICAL AMENDMENT.—Subsection (c) 9 of section 408 of such Code is amended by inserting 10 after paragraph (2) the following new paragraph: 11 ‘‘(3) There is a separate accounting for any in- 12 terest of an employee or member (or spouse of an 13 employee or member) in a Roth IRA.’’. 14 (b) NO COMMON INTEREST REQUIRED FOR POOLED 15 EMPLOYER PLANS.—Section 3(2) of the Employee Retire- 16 ment Income Security Act of 1974 (29 U.S.C. 1002(2)) 17 is amended by adding at the end the following: 18 ‘‘(C) A pooled employer plan shall be treat- 19 ed as— 20 ‘‘(i) a single employee pension benefit 21 plan or single pension plan; and 22 ‘‘(ii) a plan to which section 210(a) 23 applies.’’. 24 VerDate Sep 11 2014 01:39 Feb 16, 2019 Jkt 089200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\H1007.IH H1007 pamtmann on DSKBFK8HB2PROD with BILLS 11 •HR 1007 IH (c) POOLED EMPLOYER PLAN AND PROVIDER DE- 1 FINED.— 2 (1) IN GENERAL.—Section 3 of the Employee 3 Retirement Income Security Act of 1974 (29 U.S.C. 4 1002) is amended by adding at the end the fol- 5 lowing: 6 ‘‘(43) POOLED EMPLOYER PLAN.— 7 ‘‘(A) IN GENERAL.—The term ‘pooled em- 8 ployer plan’ means a plan— 9 ‘‘(i) which is an individual account 10 plan established or maintained for the pur- 11 pose of providing benefits to the employees 12 of 2 or more employers; 13 ‘‘(ii) which is a plan described in sec- 14 tion 401(a) of the Internal Revenue Code 15 of 1986 which includes a trust exempt 16 from tax under section 501(a) of such 17 Code or a plan that consists of individual 18 retirement accounts described in section 19 408 of such Code (including by reason of 20 subsection (c) thereof); and 21 ‘‘(iii) the terms of which meet the re- 22 quirements of subparagraph (B). 23 Such term shall not include a plan with respect 24 to which all of the participating employers have 25 VerDate Sep 11 2014 01:39 Feb 16, 2019 Jkt 089200 PO 00000 Frm 00011 Fmt 665 [Text truncated for display. 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