[Congressional Bills 117th Congress]
[From the U.S. Government Publishing Office]
[S. 1703 Introduced in Senate (IS)]
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117th CONGRESS
1st Session
S. 1703
To amend the Internal Revenue Code of 1986 to increase retirement
savings, to improve retirement plan administration, and for other
purposes.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
May 19, 2021
Mr. Grassley (for himself, Ms. Hassan, and Mr. Lankford) 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 increase retirement
savings, to improve retirement plan administration, and for other
purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Improving Access to Retirement
Savings Act''.
SEC. 2. MULTIPLE EMPLOYER 403(B) PLANS.
(a) In General.--Section 403(b) of the Internal Revenue Code of
1986 is amended by adding at the end the following new paragraph:
``(15) Multiple employer plans.--
``(A) In general.--Except in the case of a church
plan, this subsection shall not be treated as failing
to apply to an annuity contract solely by reason of
such contract being purchased under a plan maintained
by more than 1 employer.
``(B) Treatment of employers failing to meet
requirements of plan.--
``(i) In general.--In the case of a plan
maintained by more than 1 employer, this
subsection shall not be treated as failing to
apply to an annuity contract held under such
plan merely because of 1 or more employers
failing to meet the requirements of this
subsection, if such plan satisfies rules
similar to the rules of section 413(e)(2) with
respect to any such employer failure.
``(ii) Additional requirements in case of
non-governmental plans.--A plan shall not be
treated as meeting the requirements of this
subsection unless the plan meets the
requirements of subparagraph (A) or (B) of
section 413(e)(1), except in the case of a
multiple employer plan maintained solely by a
State, a political subdivision of a State, or
an agency or instrumentality thereof.''.
(b) Annual Registration for 403(b) Multiple Employer Plan.--Section
6057 of the Internal Revenue Code of 1986 is amended by redesignating
subsection (g) as subsection (h) and by inserting after subsection (f)
the following new subsection:
``(g) 403(b) Multiple Employer Plans Treated as 1 Plan.--In the
case of annuity contracts to which this section applies and to which
section 403(b) applies by reason of the plan under which such contracts
are purchased meeting the requirements of paragraph (15) thereof, such
plan shall be treated as a single plan for purposes of this section.''.
(c) Annual Information Returns for 403(b) Multiple Employer Plan.--
Section 6058 of the Internal Revenue Code of 1986 is amended by
redesignating subsection (f) as subsection (g) and by inserting after
subsection (e) the following new subsection:
``(f) 403(b) Multiple Employer Plans Treated as 1 Plan.--In the
case of annuity contracts to which this section applies and to which
section 403(b) applies by reason of the plan under which such contracts
are purchased meeting the requirements of paragraph (15) thereof, such
plan shall be treated as a single plan for purposes of this section.''.
(d) Amendments to Employee Retirement Income Security Act of
1974.--
(1) Treated as pooled employer plan.--
(A) In general.--Section 3(43)(A) of the Employee
Retirement Income Security Act of 1974 (29 U.S.C.
1002(43)(A)) is amended--
(i) in clause (ii), by striking ``section
501(a) of such Code or'' and inserting ``501(a)
of such Code, a plan that consists of contracts
described in section 403(b) of such Code, or'';
and
(ii) in the flush text at the end, by
striking ``the plan.'' and inserting ``the
plan, but such term shall include any program
(other than a governmental plan) maintained for
the benefit of the employees of more than 1
employer that consists of contracts described
in section 403(b) of such Code and that meets
the requirements of subparagraph (A) or (B) of
section 413(e)(1) of such Code.''.
(B) Conforming amendments.--Paragraphs
(43)(B)(v)(II) and (44)(A)(i)(I) of section 3 of such
Act (29 U.S.C. 1002) are each amended by striking
``section 401(a) of such Code or'' and inserting
``401(a) of such Code, a plan that consists of
contracts described in section 403(b) of such Code,
or''.
(2) Fiduciaries.--Section 3(43)(B)(ii) of such Act (29
U.S.C. 1002(43)(B)(ii)) is amended--
(A) by striking ``trustees meeting the requirements
of section 408(a)(2) of the Internal Revenue Code of
1986'' and inserting ``trustees (or other fiduciaries
in the case of a plan that consists of contracts
described in section 403(b) of the Internal Revenue
Code of 1986) meeting the requirements of section
408(a)(2) of such Code''; and
(B) by striking ``holding'' and inserting ``holding
(or causing to be held under the terms of a plan
consisting of such contracts)''.
(e) Regulations.--
(1) Plan termination.--The Secretary of the Treasury (or
the Secretary's designee) shall prescribe such regulations as
may be necessary to clarify the treatment of a plan termination
by an employer in the case of plans to which section 403(b)(15)
of the Internal Revenue Code of 1986 applies.
(2) Educational outreach to employers exempt from tax.--The
Secretary of the Treasury (or the Secretary's designee), in
consultation with the Secretary of Labor, shall provide
education and outreach to increase awareness among employers
which are exempt from tax under section 501(a) of such Code
that--
(A) multiple employer plans are subject to the
Employee Retirement Income Security Act of 1974, and
(B) each employer is a plan sponsor with respect to
its employees participating in the multiple employer
plan and, as such, has certain fiduciary duties with
respect to the plan and to its employees.
(f) Modification of Model Plan Language.--
(1) Plan notifications.--The Secretary of the Treasury (or
the Secretary's designee) shall modify the model plan language
published under section 413(e)(5) of the Internal Revenue Code
of 1986 to include language which notifies participating
employers which are exempt from tax under section 501(a) of
such Code that the plan is subject to the Employee Retirement
Income Security Act of 1974 and that such employer is a plan
sponsor with respect to its employees participating in the
multiple employer plan and, as such, has certain fiduciary
duties with respect to the plan and to its employees.
(2) Model plans for multiple employer 403(b) non-
governmental plans.--For plans to which section 403(b)(15)(A)
of the Internal Revenue Code of 1986 applies (other than a plan
maintained for its employees by a State, a political
subdivision of a State, or an agency or instrumentality
thereof) the Secretary shall publish model plan language
similar to model plan language published under section
413(e)(5) of such Code.
(g) No Inference With Respect to Church Plans.--Regarding any
application of section 403(b) of the Internal Revenue Code of 1986 to
an annuity contract purchased under a church plan (as defined in
section 414(e) of such Code) maintained by more than 1 employer, or to
any application of rules similar to section 413(e) of such Code to such
a plan, no inference shall be drawn solely because section
403(b)(15)(A) of such Code (as added by this Act) does not apply to
such plans.
(h) Effective Date.--
(1) In general.--The amendments made by this section shall
apply to plan years beginning after December 31, 2022.
(2) Rule of construction.--Nothing in the amendments made
by subsection (a) shall be construed as limiting the authority
of the Secretary of the Treasury or the Secretary's delegate
(determined without regard to such amendment) to provide for
the proper treatment of a failure to meet any requirement
applicable under the Internal Revenue Code of 1986 with respect
to one employer (and its employees) in the case of a plan to
which section 403(b)(15) applies.
SEC. 3. SAFE HARBOR FOR CORRECTIONS OF EMPLOYEE ELECTIVE DEFERRAL
FAILURES.
(a) In General.--Section 414 of the Internal Revenue Code of 1986
is amended by adding at the end the following new subsection:
``(aa) Correcting Automatic Contribution Errors.--
``(1) In general.--Any plan or arrangement shall not fail
to be treated as a plan described in section 401(a), 403(b),
408, or 457(b), as applicable, solely by reason of a corrected
error.
``(2) Corrected error.--For purposes of this subsection,
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 (as defined under subsection
(w)(3)), provided that such implementation error--
``(A) is corrected by the date which is 9\1/2\
months after the end of the plan year during which the
failure occurred,
``(B) is corrected in a manner which is favorable
to the participant, and
``(C) is of a type which is so corrected for all
similarly situated participants in a nondiscriminatory
manner.
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 Secretary.
``(3) Regulations and guidance for favorable correction
methods.--The Secretary shall, by regulations or other guidance
of general applicability, specify the correction methods which
are in a manner favorable to the participant for purposes of
paragraph (2)(B).''.
(b) Effective Date.--The amendment made by this section shall apply
to the correction of any error with respect to which the date described
in section 414(aa)(2)(A) of the Internal Revenue Code of 1986 (as added
by this section) is after the date of enactment of this Act.
SEC. 4. APPLICATION OF CREDIT FOR SMALL EMPLOYER PENSION PLAN STARTUP
COSTS TO EMPLOYERS WHICH JOIN AN EXISTING PLAN.
(a) In General.--Section 45E(d)(3)(A) of the Internal Revenue Code
of 1986 is amended by striking ``effective'' and inserting ``effective
with respect to the eligible employer''.
(b) Effective Date.--The amendment made by this section shall apply
to eligible employer plans which become effective with respect to the
eligible employer after the date of the enactment of this Act.
SEC. 5. AMENDMENTS TO INCREASE BENEFIT ACCRUALS UNDER PLAN FOR PREVIOUS
PLAN YEAR ALLOWED UNTIL EMPLOYER TAX RETURN DUE DATE.
(a) In General.--Section 401(b) of the Internal Revenue Code of
1986 is amended by adding at the end the following new paragraph:
``(3) Retroactive plan amendments that increase benefit
accruals.--If--
``(A) an employer amends a stock bonus, pension,
profit-sharing, or annuity plan to increase benefits
accrued under the plan effective for the preceding plan
year (other than increasing the amount of matching
contributions (as defined in subsection (m)(4)(A))),
``(B) such amendment would not otherwise cause the
plan to fail to meet any of the requirements of this
subchapter, and
``(C) such amendment is adopted before the time
prescribed by law for filing the return of the employer
for a taxable year (including extensions thereof)
during which such amendment is effective,
the employer may elect to treat such amendment as having been
adopted as of the last day of the plan year in which the
amendment is effective.''.
(b) Effective Date.--The amendments made by this section shall
apply to plan years beginning after December 31, 2022.
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