[Congressional Bills 117th Congress]
[From the U.S. Government Publishing Office]
[S. 4353 Reported in Senate (RS)]
<DOC>
Calendar No. 426
117th CONGRESS
2d Session
S. 4353
To amend the Employee Retirement Income Security Act of 1974 and the
Internal Revenue Code of 1986 to improve retirement plan provisions,
and for other purposes.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
June 7, 2022
Mrs. Murray (for herself and Mr. Burr) introduced the following bill;
which was read twice and referred to the Committee on Health,
Education, Labor, and Pensions
June 21, 2022
Reported by Mrs. Murray, with amendments
[Omit the part struck through and insert the part printed in italic]
_______________________________________________________________________
A BILL
To amend the Employee Retirement Income Security Act of 1974 and the
Internal Revenue Code of 1986 to improve retirement plan provisions,
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; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``Retirement
Improvement and Savings Enhancement to Supplement Healthy Investments
for the Nest Egg Act'' or the ``RISE & SHINE Act''.
(b) Table of Contents.--The table of contents for this Act is as
follows:
Sec. 1. Short title; table of contents.
TITLE I--RETIREMENT IMPROVEMENT AND SAVINGS ENHANCEMENT (RISE)
Sec. 101. Updating dollar limit for mandatory distributions.
Sec. 102. Multiple employer 403(b) plans.
Sec. 103. Performance benchmarks for asset allocation funds.
Sec. 104. Pooled employer plans modification.
Sec. 105. Review of pension risk transfer interpretive bulletin.
Sec. 106. Review and report to congress relating to reporting and
disclosure requirements.
Sec. 107. Eliminating unnecessary plan requirements related to
unenrolled participants.
Sec. 108. Recovery of retirement plan overpayments.
Sec. 109. Improving coverage for part-time workers.
Sec. 110. Recognition of tribal government domestic relations orders.
TITLE II--EMERGENCY SAVINGS ACT OF 2022
Sec. 201. Short title.
Sec. 202. Emergency savings accounts linked to defined contribution
plans.
TITLE III--NOTICE AND DISCLOSURE
Sec. 301. Defined contribution plan fee disclosure improvements.
Sec. 302. Consolidation of defined contribution plan notices.
Sec. 303. Information needed for financial options risk mitigation act.
Sec. 304. Defined benefit annual funding notices.
TITLE IV--MODERNIZATION
Sec. 401. Automatic reenrollment under qualified automatic contribution
arrangements and eligible automatic
contribution arrangements.
Sec. 402. Incidental plan expenses.
TITLE V--AMENDMENTS TO PLANS OFFERED BY MULTIPLE EMPLOYERS
Sec. 501. Report on pooled employer plans.
Sec. 502. Annual audits for group of plans.
TITLE VI--DEFINED BENEFIT PLAN PROVISIONS
Sec. 601. Cash balance.
Sec. 602. Termination of variable rate premium indexing.
Sec. 603. Enhancing retiree health benefits in pension plans.
TITLE VII--ADDITIONAL RETIREMENT ENHANCEMENTS
Sec. 701. Provisions relating to plan amendments.
Sec. 702. Worker Ownership, Readiness, and Knowledge (WORK) Act.
Sec. 703. Report by the Secretary of Labor on the impact of inflation
on retirement savings.
TITLE I--RETIREMENT IMPROVEMENT AND SAVINGS ENHANCEMENT (RISE)
SEC. 101. UPDATING DOLLAR LIMIT FOR MANDATORY DISTRIBUTIONS.
(a) In General.--Section 203(e)(1) of the Employee Retirement
Income Security Act of 1974 (29 U.S.C. 1053(e)(1)) and sections
401(a)(31)(B)(ii) and 411(a)(11)(A) of the Internal Revenue Code of
1986 are each amended by striking ``$5,000'' and inserting ``$7,000''.
(b) Effective Date.--The amendments made by this section shall
apply to distributions made after December 31, 2023.
SEC. 102. MULTIPLE EMPLOYER 403(B) PLANS.
(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--
(1) in clause (ii), by striking ``section 501(a) of such
Code or'' and inserting ``section 501(a) of such Code, a plan
that consists of contracts described in section 403(b) of such
Code, or''; and
(2) 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.--Sections 3(43)(B)(v)(II) and
3(44)(A)(i)(I) of the Employee Retirement Income Security Act of 1974
(29 U.S.C. 1002(43)(B)(v)(II) and 1002(44)(A)(i)(I)) are each amended
by striking ``section 401(a) of such Code or'' and inserting ``section
401(a) of such Code, a plan that consists of contracts described in
section 403(b) of such Code, or''.
(c) Effective Date.--The amendments made by this section shall
apply to plan years beginning after December 31, 2022.
SEC. 103. PERFORMANCE BENCHMARKS FOR ASSET ALLOCATION FUNDS.
(a) In General.--Not later than 2 years after the date of enactment
of this Act, the Secretary of Labor shall promulgate regulations
providing that, in the case of a designated investment alternative that
contains a mix of asset classes, the administrator of a plan may, but
is not required to, use a benchmark that is a blend of different broad-
based securities market indices if--
(1) the blend is reasonably representative of the asset
class holdings of the designated investment alternative;
(2) for purposes of determining the blend's returns for 1-,
5-, and 10-calendar-year periods (or for the life of the
alternative, if shorter), the blend is modified at least once
per year to reflect changes in the asset class holdings of the
designated investment alternative;
(3) the blend is furnished to participants and
beneficiaries in a manner that is reasonably designed to be
understandable; and
(4) each securities market index that is used for an
associated asset class would separately satisfy the
requirements of such regulation for such asset class.
(b) Study.--Not later than 3 years after the date of enactment of
this Act, the Secretary of Labor shall deliver a report to the
Committees on Finance and Health, Education, Labor, and Pensions of the
Senate and the Committees on Ways and Means and Education and Labor of
the House of Representatives regarding the utilization, effectiveness,
and participants' understanding of the benchmarking requirements under
this section.
SEC. 104. POOLED EMPLOYER PLANS MODIFICATION.
(a) In General.--Section 3(43)(B)(ii) of the Employee Retirement
Income Security Act of 1974 (29 U.S.C. 1002(43)(B)(ii)) is amended to
read as follows:
``(ii) designate a named fiduciary (other
than an employer in the plan) to be responsible
for collecting contributions to the plan and
require such fiduciary to implement written
contribution collection procedures that are
reasonable, diligent, and systematic;''.
(b) Effective Date.--The amendments made by this section shall
apply to plan years beginning after December 31, 2022.
SEC. 105. REVIEW OF PENSION RISK TRANSFER INTERPRETIVE BULLETIN.
Not later than 1 year after the date of enactment of this Act, the
Secretary of Labor shall--
(1) review section 2509.95-1 of title 29, Code of Federal
Regulations (relating to the fiduciary standards under the
Employee Retirement Income Security Act of 1974 when selecting
an annuity provider for a defined benefit pension plan) and
consult with the Advisory Council on Employee Welfare and
Pension Benefit Plans (established under section 512 of the
Employee Retirement Income Security Act of 1974 (29 U.S.C.
1142)), to determine whether amendments to section 2509.95-1 of
title 29, Code of Federal Regulations are warranted; and
(2) report to Congress on the findings of such review and
consultation, including an assessment of any risk to
participants.
SEC. 106. REVIEW AND REPORT TO CONGRESS RELATING TO REPORTING AND
DISCLOSURE REQUIREMENTS.
(a) Study.--As soon as practicable after the date of enactment of
this Act, the Secretary of Labor, the Secretary of the Treasury, and
the Director of the Pension Benefit Guaranty Corporation shall review
the reporting and disclosure requirements, as applicable to each such
agency head, of the Employee Retirement Income Security Act of 1974
applicable to pension plans (as defined in section 3(2) of such Act (29
U.S.C. 1002(2)).
(b) Report.--
(1) In general.--Not later than 3 years after the date of
enactment of this Act, the Secretary of Labor, the Secretary of
the Treasury, and the Director of the Pension Benefit Guaranty
Corporation, jointly, and after consultation with a balanced
group of participant and employer representatives, shall with
respect to plans referenced in subsection (a) report on the
effectiveness of the applicable reporting and disclosure
requirements and make such recommendations as may be
appropriate to the Committee on Education and Labor and the
Committee on Ways and Means of the House of Representatives and
the Committee on Health, Education, Labor, and Pensions and the
Committee on Finance of the Senate to consolidate, simplify,
standardize, and improve such requirements so as to simplify
reporting for such plans and ensure that plans can furnish and
participants and beneficiaries timely receive and better
understand the information they need to monitor their plans,
plan for retirement, and obtain the benefits they have earned.
(2) Analysis of effectiveness.--To assess the effectiveness
of the applicable reporting and disclosure requirements, the
report shall include an analysis, based on plan data, of how
participants and beneficiaries are providing preferred contact
information, the methods by which plan sponsors and plans are
furnishing disclosures, and the rate at which participants and
beneficiaries (grouped by key demographics) are receiving,
accessing, understanding, and retaining disclosures.
(3) Collection of information.--The agencies shall conduct
appropriate surveys and data collection to obtain any needed
information.
SEC. 107. ELIMINATING UNNECESSARY PLAN REQUIREMENTS RELATED TO
UNENROLLED PARTICIPANTS.
(a) Amendment of Employee Retirement Income Security Act of 1974.--
(1) In general.--Part 1 of subtitle B of title I of the
Employee Retirement Income Security Act of 1974 (29 U.S.C. 1021
et seq.) is amended by redesignating section 111 as section 112
and by inserting after section 110 the following new section:
``SEC. 111. ELIMINATING UNNECESSARY PLAN REQUIREMENTS RELATED TO
UNENROLLED PARTICIPANTS.
``(a) In General.--Notwithstanding any other provision of this
title, with respect to any individual account plan, no disclosure,
notice, or other plan document (other than the notices and documents
described in paragraphs (1) and (2)) shall be required to be furnished
under this title to any unenrolled participant if the unenrolled
participant is furnished--
``(1) an annual reminder notice of such participant's
eligibility to participate in such plan and any applicable
election deadlines under the plan; and
``(2) any document requested by such participant that the
participant would be entitled to receive notwithstanding this
section.
``(b) Unenrolled Participant.--For purposes of this section, the
term `unenrolled participant' means an employee who--
``(1) is eligible to participate in an individual account
plan;
``(2) has been furnished--
``(A) the summary plan description pursuant to
section 104(b), and
``(B) any other notices related to eligibility
under the plan required to be furnished under this
title, or the Internal Revenue Code of 1986, in
connection with such participant's initial eligibility
to participate in such plan;
``(3) does not have an account balance in the plan; and
``(4) satisfies such other criteria as the Secretary of
Labor may determine appropriate, as prescribed in guidance
issued in consultation with the Secretary of Treasury.
For purposes of this section, any eligibility to participate in the
plan following any period for which such employee was not eligible to
participate shall be treated as initial eligibility.
``(c) Annual Reminder Notice.--For purposes of this section, the
term `annual reminder notice' means a notice provided in accordance
with section 2520.104b-1 of title 29, Code of Federal Regulations (or
any successor regulation), which--
``(1) is furnished in connection with the annual open
season election period with respect to the plan or, if there is
no such period, is furnished within a reasonable period prior
to the beginning of each plan year;
``(2) notifies the unenrolled participant of--
``(A) the unenrolled participant's eligibility to
participate in the plan; and
``(B) the key benefits and rights under the plan,
with a focus on employer contributions and vesting
provisions; and
``(3) provides such information in a prominent manner and
calculated to be understood by the average participant.''.
(2) Clerical amendment.--The table of contents in section 1
of the Employee Retirement Income Security Act of 1974 is
amended by striking the item relating to section 111 and by
inserting after the item relating to section 110 the following
new items:
``Sec. 111. Eliminating unnecessary plan requirements related to
unenrolled participants.
``Sec. 112. Repeal and effective date.''.
(b) Amendment of Internal Revenue Code of 1986.--Section 414 of the
Internal Revenue Code of 1986 is amended by adding at the end the
following new subsection:
``(aa) Eliminating Unnecessary Plan Requirements Related to
Unenrolled Participants.--
``(1) In general.--Notwithstanding any other provision of
this title, with respect to any defined contribution plan, no
disclosure, notice, or other plan document (other than the
notices and documents described in subparagraphs (A) and (B))
shall be required to be furnished under this title to any
unenrolled participant if the unenrolled participant is
furnished--
``(A) an annual reminder notice of such
participant's eligibility to participate in such plan
and any applicable election deadlines under the plan,
and
``(B) any document requested by such participant
that the participant would be entitled to receive
notwithstanding this subsection.
``(2) Unenrolled participant.--For purposes of this
subsection, the term `unenrolled participant' means an employee
who--
``(A) is eligible to participate in a defined
contribution plan,
``(B) has been furnished--
``(i) the summary plan description pursuant
to section 104(b) of the Employee Retirement
Income Security Act of 1974, and
``(ii) any other notices related to
eligibility under the plan and required to be
furnished under this title, or the Employee
Retirement Income Security Act of 1974, in
connection with such participant's initial
eligibility to participate in such plan,
``(C) does not have an account balance in the plan,
and
``(D) satisfies such other criteria as the
Secretary of the Treasury may determine appropriate, as
prescribed in guidance issued in consultation with the
Secretary of Labor.
For purposes of this subsection, any eligibility to participate
in the plan following any period for which such employee was
not eligible to participate shall be treated as initial
eligibility.
``(3) Annual reminder notice.--For purposes of this
subsection, the term `annual reminder notice' means the notice
described in section 111(c) of the Employee Retirement Income
Security Act of 1974.''.
(c) Effective Date.--The amendments made by this section shall
apply to plan years beginning after December 31, 2022.
SEC. 108. RECOVERY OF RETIREMENT PLAN OVERPAYMENTS.
(a) Overpayments Under ERISA.--Section 206 of the Employee
Retirement Income Security Act of 1974 (29 U.S.C. 1056) is amended by
adding at the end the following new subsection:
``(h) Special Rules Applicable to Benefit Overpayments.--
``(1) General rule.--In the case of an inadvertent benefit
overpayment by any pension plan, the responsible plan fiduciary
shall not be considered to have failed to comply with the
requirements of this title merely because such fiduciary
determines, in the exercise of its fiduciary discretion, not to
seek recovery of all or part of such overpayment from--
``(A) any participant or beneficiary,
``(B) any plan sponsor of, or contributing employer
to--
``(i) an individual account plan, provided
that the amount needed to prevent or restore
any impermissible forfeiture from any
participant's or beneficiary's account arising
in connection with the overpayment is,
separately from and independently of the
overpayment, allocated to such account pursuant
to the nonforfeitability requirements of
section 203 (for example, out of the plan's
forfeiture account, additional employer
contributions, or recoveries from those
responsible for the overpayment), or
``(ii) a defined benefit pension plan
subject to the funding rules in part 3 of this
subtitle B, unless the responsible plan
fiduciary determines, in the exercise of its
fiduciary discretion, that failure to recover
all or part of the overpayment faster than
required under such funding rules would
materially affect the plan's ability to pay
benefits due to other participants and
beneficiaries, or
``(C) any fiduciary of the plan, other than a
fiduciary (including a plan sponsor or contributing
employer acting in a fiduciary capacity) whose breach
of its fiduciary duties resulted in such overpayment,
provided that if the plan has established prudent
procedures to prevent and minimize overpayment of
benefits and the relevant plan fiduciaries have
followed such procedures, an inadvertent benefit
overpayment will not give rise to a breach of fiduciary
duty.
``(2) Reduction in future benefit payments and recovery
from responsible party.--Paragraph (1) shall not fail to apply
with respect to any inadvertent benefit overpayment merely
because, after discovering such overpayment, the responsible
plan fiduciary--
``(A) reduces future benefit payments to the
correct amount provided for under the terms of the
plan, or
``(B) seeks recovery from the person or persons
responsible for the overpayment.
``(3) Employer funding obligations.--Nothing in this
subsection shall relieve an employer of any obligation imposed
on it to make contributions to a plan to meet the minimum
funding standards under part 3 of this subtitle B or to prevent
or restore an impermissible forfeiture in accordance with
section 203.
``(4) Recoupment from participants and beneficiaries.--If
the responsible plan fiduciary, in the exercise of its
fiduciary discretion, decides to seek recoupment from a
participant or beneficiary of all or part of an inadvertent
benefit overpayment made by the plan to such participant or
beneficiary, it may do so, subject to the following conditions:
``(A) No interest or other additional amounts (such
as collection costs or fees) are sought on overpaid
amounts for any period.
``(B) If the plan seeks to recoup past overpayments
of a non-decreasing periodic benefit by reducing future
benefit payments--
``(i) the reduction ceases after the plan
has recovered the full dollar amount of the
overpayment,
``(ii) the amount recouped each calendar
year does not exceed 10 percent of the full
dollar amount of the overpayment, and
``(iii) future benefit payments are not
reduced to below 90 percent of the periodic
amount otherwise payable under the terms of the
plan.
Alternatively, if the plan seeks to recoup past
overpayments of a non-decreasing periodic benefit
through one or more installment payments, the sum of
such installment payments in any calendar year does not
exceed the sum of the reductions that would be
permitted in such year under the preceding sentence.
``(C) If the plan seeks to recoup past overpayments
of a benefit other than a non-decreasing periodic
benefit, the plan satisfies requirements developed by
the Secretary for purposes of this subparagraph.
``(D) Efforts to recoup overpayments are--
``(i) not accompanied by threats of
litigation, unless the responsible plan
fiduciary reasonably believes it could prevail
in a civil action brought in Federal or State
court to recoup the overpayments, and
``(ii) not made through a collection agency
or similar third party, unless the participant
or beneficiary ignores or rejects efforts to
recoup the overpayment following either a final
judgment in Federal or State court or a
settlement between the participant or
beneficiary and the plan, in either case
authorizing such recoupment.
``(E) Recoupment of past overpayments to a
participant is not sought from any beneficiary of the
participant, including a spouse, surviving spouse,
former spouse, or other beneficiary.
``(F) Recoupment may not be sought if the first
overpayment occurred more than 3 years before the
participant or beneficiary is first notified in writing
of the error.
``(G) A participant or beneficiary from whom
recoupment is sought is entitled to contest all or part
of the recoupment pursuant to the plan's claims
procedures.
``(H) In determining the amount of recoupment to
seek, the responsible plan fiduciary shall take into
account the hardship that recoupment likely would
impose on the participant or beneficiary.
``(5) Effect of culpability.--Subparagraphs (A) through (F)
of paragraph (4) shall not apply to protect a participant or
beneficiary who is culpable. For purposes of this paragraph, a
participant or beneficiary is culpable if the individual bears
responsibility for the overpayment (such as through
misrepresentations or omissions that led to the overpayment),
or if the individual knew, or had good reason to know under the
circumstances, that the benefit payment or payments were
materially in excess of the correct amount. Notwithstanding the
preceding sentence, an individual is not culpable merely
because the individual believed the benefit payment or payments
were or might be in excess of the correct amount, if the
individual raised that question with an authorized plan
representative and was told the payment or payments were not in
excess of the correct amount. With respect to a culpable
participant or beneficiary, efforts to recoup overpayments
shall not be made through threats of litigation, unless a
lawyer for the plan makes a determination that there is a
reasonable likelihood of success to recover an amount that
would be greater than the cost of recovery.''.
(b) Effective Date.--The amendments made by this section shall
apply as of the date of enactment of this Act.
(c) Certain Actions Before Date of Enactment.--Plans, fiduciaries,
employers, and plan sponsors are entitled to rely on--
(1) a good faith interpretation of then existing
administrative guidance for inadvertent benefit overpayment
recoupments and recoveries that commenced before the date of
enactment of this Act, and
(2) determinations made before the date of enactment of
this Act by the responsible plan fiduciary, in the exercise of
its fiduciary discretion, not to seek recoupment or recovery of
all or part of an inadvertent benefit overpayment.
In the case of a benefit overpayment that occurred prior to the date of
enactment of this Act, any installment payments by the participant or
beneficiary to the plan or any reduction in periodic benefit payments
to the participant or beneficiary, which were made in recoupment of
such overpayment and which commenced prior to such date, may continue
after such date. Nothing in this subsection shall relieve a fiduciary
from responsibility for an overpayment that resulted from a breach of
its fiduciary duties.
SEC. 109. IMPROVING COVERAGE FOR PART-TIME WORKERS.
(a) In General.--Section 202 of the Employee Retirement Income
Security Act of 1974 (29 U.S.C. 1052) is amended by adding at the end
the following new subsection:
``(c) Special Rule for Certain Part-time Employees.--
``(1) In general.--A pension plan that includes either a
qualified cash or deferred arrangement (as defined in section
401(k) of the Internal Revenue Code of 1986) or a salary
reduction agreement (as described in section 403(b) of such
Code) shall not require, as a condition of participation in the
arrangement or agreement, that an employee complete a period of
service with the employer (or employers) maintaining the plan
extending beyond the close of the earlier of--
``(A) the period permitted under subsection (a)(1)
(determined without regard to subparagraph (B)(i)
thereof); or
``(B) the first 24-month period--
``(i) consisting of 2 consecutive 12-month
periods during each of which the employee has
at least 500 hours of service; and
``(ii) by the close of which the employee
has attained the age of 21.
``(2) Exception.--Paragraph (1)(B) shall not apply to any
employee described in section 410(b)(3) of the Internal Revenue
Code of 1986.
``(3) Coordination with other rules.--
``(A) In general.--In the case of employees who are
eligible to participate in the arrangement or agreement
solely by reason of paragraph (1)(B):
``(i) Exclusions.--An employer may elect to
exclude such employees from the application of
subsections (a)(4), (k)(3), (k)(12), (k)(13),
and (m)(2) of section 401 of the Internal
Revenue Code of 1986 and section 410(b) of such
Code.
``(ii) Nondiscrimination rules.--
Notwithstanding paragraph (1), section
401(k)(15)(B)(i)(I) of such Code shall apply.
``(iii) Time of participation.--The rules
of subsection (a)(4) shall apply to such
employees.
``(B) Top-heavy rules.--An employer may elect to
exclude all employees who are eligible to participate
in a plan maintained by the employer solely by reason
of paragraph (1)(B) from the application of the vesting
and benefit requirements under subsections (b) and (c)
of section 416 of the Internal Revenue Code of 1986.
``(4) 12-month period.--For purposes of this subsection,
12-month periods shall be determined in the same manner as
under the last sentence of subsection (a)(3)(A), except that
12-month periods beginning before January 1, 2022, shall not be
taken into account.''.
(b) Vesting.--Section 203(b) of the Employee Retirement Income
Security Act of 1974 (29 U.S.C. 1053(b)) is amended by redesignating
paragraph (4) as paragraph (5) and by inserting after paragraph (3) the
following new paragraph:
``(4) Part-time employees.--For purposes of determining
whether an employee who is eligible to participate in a
qualified cash or deferred arrangement or a salary reduction
agreement under a plan solely by reason of section 202(c)(1)(B)
has a nonforfeitable right to employer contributions--
``(A) except as provided in subparagraph (B), each
12-month period for which the employee has at least 500
hours of service shall be treated as a year of service;
and
``(B) paragraph (3) shall be applied by
substituting `at least 500 hours of service' for `more
than 500 hours of service' in subparagraph (A) thereof.
For purposes of this paragraph, 12-month periods shall be
determined in the same manner as under the last sentence of
section 202(a)(3)(A), except that 12-month periods beginning
before January 1, 2022, shall not be taken into account.''.
(c) Effective Dates.--Except as provided in paragraph (2), the
amendments made by this section shall apply to plan years beginning at
least 1 year after final regulations implementing this section are
promulgated.
SEC. 110. RECOGNITION OF TRIBAL GOVERNMENT DOMESTIC RELATIONS ORDERS.
(a) Amendment of Internal Revenue Code of 1986.--
(1) In general.--Clause (ii) of section 414(p)(1)(B) of the
Internal Revenue Code of 1986 is amended by inserting ``or
Tribal'' after ``State''.
(2) Conforming amendment.--Subparagraph (B) of section
414(p)(1) of such Code is amended by adding at the end the
following flush sentence:
``For purposes of clause (ii), the term `Tribal' with
respect to a domestic relations law means such a law
which is issued by or under the laws of an Indian
tribal government.''.
(b) Amendment of Employee Retirement Income Security Act of 1974.--
(1) In general.--Section 206(d)(3)(B)(ii)(II) of the
Employee Retirement Income Security Act of 1974 (29 U.S.C.
1056(d)(3)(B)(ii)(II)) is amended by inserting ``or Tribal''
after ``State''.
(2) Conforming amendment.--Section 206(d)(3)(B) of such Act
is amended by adding at the end the following flush sentence:
``For purposes of clause (ii)(II), the term `Tribal'
with respect to a domestic relations law means such a
law which is issued by or under the laws of an Indian
tribal government (as defined in section 7701(a)(40) of
the Internal Revenue Code of 1986).''.
(c) Effective Date.--The amendments made by this section shall
apply to domestic relations orders received by plan administrators
after December 31, 2022, including any such order which is submitted
for reconsideration after such date.
TITLE II--EMERGENCY SAVINGS ACT OF 2022
SEC. 201. SHORT TITLE.
This title may be cited as the ``Emergency Savings Act of 2022''.
SEC. 202. EMERGENCY SAVINGS ACCOUNTS LINKED TO DEFINED CONTRIBUTION
PLANS.
(a) Employee Pension Benefit Plans.--Section 3 of the Employee
Retirement Income Security Act (29 U.S.C. 1002) is amended--
(1) in paragraph (2)(A), by inserting after the first
sentence the following: ``A pension plan may include a pension-
linked emergency savings account.'' and
(2) by adding at the end the following:
``(45) 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--
``(A) is offered as part of such defined
contribution plan;
``(B) accepts only--
``(i) participant contributions which are
treated in the same manner as Roth
contributions for purposes of inclusion in
gross income; and
``(ii) employer contributions which are
includible in gross income of the participant
for purposes of the Internal Revenue Code of
1986; and
``(C) meets the requirements of part 8 of subtitle
B.''.
(b) Pension-linked Emergency Savings Accounts.--
(1) In general.--Subtitle B of title I of the Employee
Retirement Income Security Act (29 U.S.C. 1021 et seq.) is
amended by adding at the end the following:
``PART 8--PENSION-LINKED EMERGENCY SAVINGS ACCOUNTS
``SEC. 801. PENSION-LINKED EMERGENCY SAVINGS ACCOUNTS.
``(a) In General.--A plan sponsor of a defined contribution plan
may make available to participants of such pension plan a pension-
linked emergency savings account. 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 (c) and deposit such amounts, and any employer
contributions under such subsection, to an account that meets the
requirements of subsection (b).
``(b) Account Requirements.--
``(1) In general.--A pension-linked emergency savings
account offered in accordance with subsection (a) shall--
``(A) not have a minimum account balance
requirement;
``(B) allow for withdrawal by the participant of
the account balance, in whole or in part at the
discretion of the participant, at least once per
calendar month and for distribution of such withdrawal
to the participant as soon as practicable but, other
than in exceptional circumstances, not later than 1
week from the date on which the participant elects to
make such withdrawal;
``(C) be held as cash, in an interest-bearing
deposit account, or in an investment or insurance
product designed to preserve principal and provide a
reasonable rate of return, whether or not such return
is guaranteed, consistent with liquidity; and
``(D) not be subject to--
``(i) any unreasonable fees, restrictions,
expenses, or charges in connection with such
pension-linked emergency savings account; and
``(ii) 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 account.
``(2) Establishment and termination of account.--
``(A) 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 plan.
``(B) Termination of account.--A plan sponsor may
terminate the pension-linked emergency savings account
feature of an associated defined contribution plan at
any time. Such termination shall be treated as if a
termination of employment had occurred in accordance
with subsection (d), except the reasonable time
described in such subsection shall be as soon as
practicable not later than 60 days after the date of
such termination of the pension-linked emergency
savings account feature of such associated defined
contribution plan.
``(c) Account Contributions.--
``(1) Employer contributions.--
``(A) In general.--Subject to the maximum account
balance under paragraph (3), a plan sponsor may,
without regard to any election otherwise by a
participant, deposit to the pension-linked emergency
savings account of the participant an amount in
addition to the amount contributed by the participant
under paragraph (2).
``(B) Employer contributions.--Employer
contributions shall be included in the gross income of
a participant for purposes of the Internal Revenue Code
of 1986.
``(2) Participant contributions.--
``(A) In general.--Subject to the maximum account
balance under paragraph (3)--
``(i) a plan sponsor may automatically
enroll a participant in the pension-linked
emergency savings account at a participant
contribution rate selected by the plan sponsor,
which, unless the participant affirmatively
elects a different percentage of the
compensation of the participant to be
contributed to the pension-linked emergency
savings account, may not exceed 3 percent of
the compensation of the participant; or
``(ii) a participant may enroll in the
pension-linked emergency savings account at a
participant contribution rate selected by the
participant.
``(B) Control of transfer.--A participant, at any
time (subject to such reasonable advance notice as is
required by the plan administrator), may--
``(i) adjust the participant contribution
rate under subparagraph (A) to the pension-
linked emergency savings account of the
participant; or
``(ii) opt out of or pause for a specified
period of time such contributions.
``(C) 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 (A)(i) not more than
once annually.
``(3) Account limits.--
``(A) In general.--Subject to subparagraph (B), no
contributions under paragraphs (1) and (2) shall be
accepted to the extent such contributions would cause
the balance of the pension-linked emergency savings
account to exceed the lesser of--
``(i) $2,500; or
``(ii) an amount determined by the plan
sponsor of the pension-linked emergency savings
account.
In the case of contributions made in taxable years
beginning after December 1, 2023, the Secretary shall
adjust the amount under clause (i) at the same time and
in the same manner as the adjustment made by the
Secretary of the Treasury under section 415(d) of the
Internal Revenue Code of 1986, except that the base
period shall be the calendar quarter beginning July 1,
2022. Any increase under the preceding sentence which
is not a multiple of $100 shall be rounded to the next
lowest multiple of $100.
``(B) Excess contributions directed to plan.--To
the extent any elected contributions under paragraphs
(1) and (2) 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 (A)--
``(i) 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
account, and
``(ii) any such contributions shall be
treated as elective deferrals (as such term is
defined in section 402(g)(3) of the Internal
Revenue Code of 1986) under such plan and shall
be contributed to the plan on behalf of the
participant instead of to the pension-linked
emergency savings account.
``(4) Disclosure by plan sponsor of transfer.--
``(A) In general.--Not less than 15 days prior to
the date on which the first transfer under this
subsection occurs, the percentage of compensation and
amount of the participant's compensation transferred
under paragraph (1) is adjusted, or the plan sponsor
adjusts the percentage of compensation of the automatic
participant contribution under paragraph (2)(A)(i), the
plan sponsor shall provide to the participant notice
of--
``(i) the purpose of the account being for
short-term, emergency savings;
``(ii) the amount of the intended
contribution or the change in the percentage of
the compensation of the participant of such
contribution;
``(iii) in accordance with paragraph
(2)(B), the instructions on how to--
``(I) adjust the participant
contribution rate under paragraph
(2)(A) to the pension-linked emergency
savings account of the participant; or
``(II) opt out of or pause for a
specified period of time such
contributions;
``(iv) how such contributions will be
invested;
``(v) the limits on, and tax treatment of,
such contributions;
``(vi) any fees, expenses, or charges
associated with such pension-linked emergency
savings account;
``(vii) procedures for participant
withdrawals from such pension-linked emergency
savings account, including any limits on
frequency.
``(B) Consolidated notices.--The required notices
under subparagraph (A) may be included with any other
notice under this Act, including under section
404(c)(5)(B) or 514(e)(3), or under section
401(k)(13)(E) or 414(w)(4) of the Internal Revenue Code
of 1986, if such other notice is provided to the
participant not less than 15 days prior to the date
described in such subparagraph and not more than 60
days prior to the date on which the first transfer
under this subsection occurs.
``(5) Employer matching contributions to a defined
contribution plan for employee contributions to a pension-
linked emergency savings account.--
``(A) In general.--If an employer makes any
matching contributions to a defined contribution plan
of which a pension-linked emergency savings account is
part--
``(i) any contribution under paragraph (2)
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 plan; and
``(ii) such employer shall make matching
contributions on behalf of such participant to
the associated defined contribution plan on
account of such contributions under paragraph
(2) at the same rate as any other matching
contribution on account of an elective deferral
by such participant.
To the extent any such matching contribution exceeds
the maximum account balance under paragraph (3)(A),
such contributions shall be contributed to the plan as
provided in paragraph (3)(B).
``(B) Definitions.--For purposes of subparagraph
(A), the terms `matching contribution' and `elective
deferral' shall have the meanings given such terms in
section 401(m)(4) of the Internal Revenue Code of 1986.
``(d) Account Balance After Termination of Employment.--Upon
termination of employment of the participant, the pension-linked
emergency savings account of such participant shall--
``(1) allow, as relevant, for transfer by the participant
of the account balance of such account, in whole or in part,
into the designated Roth account (within the meaning of section
402A of the Internal Revenue Code of 1986) of the participant
under the associated defined contribution plan; and
``(2) for any amounts in such account not transferred under
paragraph (1), 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 60 days after the date of
such termination--
``(A) to the participant or the beneficiary; or
``(B) as a direct rollover to a Roth IRA (as
defined in section 408A(b) of the Internal Revenue Code
of 1986) of such participant.
``(e) Coordination With Plan Hardship Rules.--Under the terms of
the plan of which a pension-linked emergency savings account is a part,
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 plan.
``SEC. 802. ANNUAL NOTICE FOR PENSION-LINKED EMERGENCY SAVINGS ACCOUNT.
``(a) In General.--At least annually, 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 require, including a description of--
``(1) the purpose and tax treatment of the pension-linked
emergency savings account and contributions;
``(2) procedures for opting out of the pension-linked
emergency savings account, changing participant contribution
rates for such account, and making withdrawals from such
account, and limits on contributions and withdrawals;
``(3) designated investment options for amounts contributed
to the pension-linked emergency savings account;
``(4) the options under section 801(d) for the account
balance of the pension-linked emergency savings account after
termination of the employment of the participant;
``(5) any fees, expenses, or charges associated with such
pension-linked emergency savings account; and
``(6) 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 year, and the account balance.
``(b) Consolidated Notices.--The required notice under subparagraph
(A) may be included with any other notice under this Act if such other
notice is provided to the participant at least annually.
``SEC. 803. PREEMPTION OF STATE ANTI-GARNISHMENT LAWS.
``Notwithstanding any other provision of law, this part shall
supersede any law of a State which would directly or indirectly
prohibit or restrict the use of an automatic contribution arrangement,
in accordance with section 801(c)(2), for a pension-linked emergency
savings account. 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 account.
``SEC. 804. 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 Act, 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 1986.
``SEC. 805. REPORT TO CONGRESS ON MAXIMUM ACCOUNT BALANCE LIMITS.
``The Secretary of Labor and the Secretary of the Treasury shall--
``(1) conduct a study on the use of emergency savings from
a pension-linked emergency savings account regarding--
``(A) whether the maximum account balance under
section 801(c)(3) is sufficient;
``(B) whether the limitation on contributions under
sections 801(c)(2)(A)(i) are appropriate; and
``(C) the participation rate of such accounts by
plan sponsors and participants and the resulting impact
on participant retirement savings, including the impact
on retirement savings leakage and the effect of such
accounts on retirement plan participation by low- and
moderate-income households; and
``(2) not later than 7 years after the date of enactment of
the RISE & SHINE Act, submit to Congress a report on the
findings of the study under paragraph (1).''.
(2) Clerical amendment.--The table of contents in section 1
of the Employee Retirement Income Security Act of 1974 (29
U.S.C. 1001 note) is amended by inserting after the item
relating to section 734 the following new items:
``Part 8. Pension-linked Emergency Savings Accounts
``801. Pension-linked emergency savings accounts.
``802. Annual notice for pension-linked emergency savings account.
``803. Preemption of State anti-garnishment laws.
``804. Reporting and disclosure requirements.
``805. Report to Congress on maximum account balance limits.''.
(c) Reporting for a Pension-linked Emergency Savings Account.--
(1) Alternative methods of compliance.--Section 110(a) of
the Employee Retirement Income Security Act (29 U.S.C. 1030(a))
is amended by inserting ``(including pension-linked emergency
savings accounts offered in conjunction with a pension plan)''
after ``class of pension plans''.
(2) Minimized reporting burden for pension-linked emergency
savings accounts.--Section 101 of such Act (29 U.S.C. 1021) is
amended--
(A) by redesignating subsection (n) as subsection
(o); and
(B) by inserting after subsection (m) the
following:
``(n) Pension-linked Emergency Savings Accounts.--
``(1) In general.--The requirements of subsection (a) shall
not apply to a pension-linked emergency savings account made
available under section 801.
``(2) Simplified reporting.--Nothing in this subsection
shall preclude the Secretary from providing, by regulations or
otherwise, simplified reporting procedures or requirements for
such a pension-linked emergency savings account.''.
(d) Fiduciary Duty.--Section 404(c) of the Employee Retirement
Income Security Act (29 U.S.C. 1104(c)) is amended by adding at the end
the following:
``(6) Default investment arrangements for a pension-linked
emergency savings account.--For purposes of paragraph (1), 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 801(b)(1)(C).''.
(e) Joint Regulatory Authority.--The Secretary of Labor and the
Secretary of the Treasury (or a delegate of either such Secretary)
shall have authority to issue joint regulations or other guidance, or
to coordinate in developing regulations or other guidance, to carry out
the purposes of this title, including adjustment of the maximum benefit
under section 801(c)(3) of the Employee Retirement Income Security Act,
as added by this title, to account for inflation, as well as expansion
of corrections programs, if necessary.
TITLE III--NOTICE AND DISCLOSURE
SEC. 301. DEFINED CONTRIBUTION PLAN FEE DISCLOSURE IMPROVEMENTS.
Not later than 3 years after the date of enactment of this Act, the
Secretary of Labor shall--
(1) review section 2550.404a-5 of title 29, Code of Federal
Regulations (relating to fiduciary requirements for disclosure
in participant-directed individual account plans);
(2) explore, through a public request for information or
otherwise, how the contents and design of the disclosures
described in such section may be improved to enhance
participants' understanding of fees and expenses related to a
defined contribution plan (as defined in section 3 of the
Employee Retirement Income Security Act of 1974 (29 U.S.C.
1002)) as well as the cumulative effect of such fees and
expenses on retirement savings over time; and
(3) report to the Committee on Health, Education, Labor,
and Pensions of the Senate and the Committee on Education and
Labor of the House of Representatives on the findings of the
exploration described in paragraph (2), including beneficial
education for consumers on financial literacy concepts as
related to retirement plan fees and recommendations for
legislative changes needed to address such findings.
SEC. 302. CONSOLIDATION OF DEFINED CONTRIBUTION PLAN NOTICES.
Not later than 2 years after the date of enactment of this Act, the
Secretary of Labor and the Secretary of the Treasury (or such
Secretaries' delegates) shall adopt regulations providing that a plan
(as defined in section 3 of the Employee Retirement Income Security Act
of 1974 (29 U.S.C. 1002)) may, but is not required to, consolidate 2 or
more of the notices required under sections 404(c)(5)(B) and 514(e)(3)
of the Employee Retirement Income Security Act of 1974 (29 U.S.C.
1104(c)(5)(B) and 29 U.S.C. 1144(e)(3)) and sections 401(k)(12)(D),
401(k)(13)(E), and 414(w)(4) of the Internal Revenue Code of 1986 into
a single notice so long as the combined notice--
(1) includes the required content;
(2) clearly identifies the issues addressed therein;
(3) is furnished at the time and with the frequency
required for each such notice; and
(4) is presented in a manner that is reasonably calculated
to be understood by the average plan participant and that does
not obscure or fail to highlight the primary information
required for each notice.
SEC. 303. INFORMATION NEEDED FOR FINANCIAL OPTIONS RISK MITIGATION ACT.
(a) Short Title.--This section may be cited as the ``Information
Needed for Financial Options Risk Mitigation Act'' or the ``INFORM
Act''.
(b) In General.--Part 1 of subtitle B of title I of the Employee
Retirement Income Security Act of 1974 (29 U.S.C. 1021 et seq.), as
amended by section 107, is amended by adding at the end the following:
``SEC. 113. NOTICE AND DISCLOSURE REQUIREMENTS WITH RESPECT TO LUMP SUM
WINDOWS.
``(a) In General.--A plan administrator of a pension plan that
amends the plan to provide a period of time during which a participant
or beneficiary may elect to receive a lump sum under clause (i) of
section 401(a)(9)(A) of the Internal Revenue Code of 1986, instead of
future monthly payments under clause (ii) of such section, shall
furnish notice--
``(1) to each participant or beneficiary offered such lump
sum amount, in the manner in which the participant and
beneficiary receives the lump sum offer from the plan sponsor,
not later than 90 days prior to the first day on which the
participant or beneficiary may make an election with respect to
such lump sum; and
``(2) to the Secretary and the Pension Benefit Guaranty
Corporation, not later than 30 days prior to the first day on
which participants and beneficiaries may make an election with
respect to such lump sum.
``(b) Notice to Participants and Beneficiaries.--
``(1) Content.--The notice required under subsection (a)(1)
shall include the following:
``(A) Available benefit options, including the
estimated monthly benefit that the participant or
beneficiary would receive at normal retirement age (if
not already in pay status), whether there is a
subsidized early retirement option or qualified joint
and survivor annuity that is fully subsidized (in
accordance with section 417(a)(5) of the Internal
Revenue Code of 1986, the monthly benefit amount if
payments begin immediately, and the lump sum amount
available if the participant or beneficiary takes the
option.
``(B) An explanation of how the lump sum was
calculated, including the interest rate, mortality
assumptions, and whether any additional plan benefits
were included in the lump sum, such as early retirement
subsidies.
``(C) In a manner consistent with the manner in
which a written explanation is required to be given
under 417(a)(3) of the Internal Revenue Code of 1986,
the relative value of the lump sum option for a
terminated vested participant compared to the value
of--
``(i) the single life annuity, (or other
standard form of benefit); and
``(ii) the qualified joint and survivor
annuity (as defined in section 205(d)(1));
``(D) Whether it would be reasonably likely to
replicate the plan's stream of payments by purchasing a
comparable retail annuity using the lump sum.
``(E) The potential ramifications of accepting the
lump sum, including longevity risks, loss of
protections guaranteed by the Pension Benefit Guaranty
Corporation (with an explanation of the monthly benefit
amount that would be protected by the Pension Benefit
Guaranty Corporation if the plan is terminated with
insufficient assets to pay benefits), loss of
protection from creditors, loss of spousal protections,
and other protections under this Act that would be
lost.
``(F) General tax rules related to accepting a lump
sum, including rollover options and early distribution
penalties with a disclaimer that the plan does not
provide tax, legal, or accounting advice, and a
suggestion that participants and beneficiaries consult
with their own tax, legal, and accounting advisors
before determining whether to accept the offer.
``(G) How to accept or reject the offer, the
deadline for response, and whether a spouse is required
to consent to the election.
``(H) Contact information for the point of contact
at the plan administrator for participants and
beneficiaries to get more information or ask questions
about the options.
``(2) Plain language.--The notice under this subsection
shall be written in a manner calculated to be understood by the
average plan participant.
``(3) Model notice.--The Secretary shall issue a model
notice for purposes of the notice under subsection (a)(1),
including for information required under subparagraphs (C)
through (F) of paragraph (1).
``(c) Notice to the Secretary and Pension Benefit Guaranty
Corporation.--The notice required under subsection (a)(2) shall include
the following:
``(1) The total number of participants and beneficiaries
eligible for such lump sum option.
``(2) The length of the limited period during which the
lump sum is offered.
``(3) An explanation of how the lump sum was calculated,
including the interest rate, mortality assumptions, and whether
any additional plan benefits were included in the lump sum,
such as early retirement subsidies.
``(4) A sample of the notice provided to participants and
beneficiaries under subsection (a)(1).
``(d) Post-Offer Report to the Secretary and Pension Benefit
Guaranty Corporation.--Not later than 90 days after the conclusion of
the limited period during which participants and beneficiaries in a
plan may accept a plan's offer to convert their annuity into a lump sum
as generally permitted under section 401(a)(9) of the Internal Revenue
Code of 1986, a plan sponsor shall submit a report to the Secretary and
the Director of the Pension Benefit Guaranty Corporation that includes
the number of participants and beneficiaries who accepted the lump sum
offer and such other information as the Secretary may require.
``(e) Public Availability.--The Secretary shall make the
information provided in the notice to the Secretary required under
subsection (a)(2) and in the post-offer reports submitted under
subsection (d) publicly available in a form that protects the
confidentiality of the information provided.
``(f) Biannual Report.--Not later than 6 months after the date of
enactment of this section and every 6 months thereafter, so long as the
Secretary has received notices and post-offer reports under subsections
(c) and (d), the Secretary shall submit to Congress a report that
summarizes such notices and post-offer reports during the applicable
reporting period.''.
(c) Clerical Amendment.--The table of contents in section 1 of the
Employee Retirement Income Security Act of 1974, as amended by section
107(a)(2), is further amended by inserting after the item relating to
section 112 the following new item:
Sec. 113. Notice and disclosure requirements with respect to lump sum
windows.
(d) Enforcement.--Section 502 of the Employee Retirement Income
Security Act of 1974 (29 U.S.C. 1132) is amended--
(1) in subsection (c)(1), by striking ``or section 105(a)''
and inserting ``, section 105(a), or section 112(a)''; and
(2) in subsection (a)(4), by striking ``105(c)'' and
inserting ``section 105(c) or 112(a)''.
(e) Application.--The requirements of section 113 of the ERISA, as
added by subsection (b), shall apply beginning on the applicable
effective date specified in the final regulations promulgated pursuant
to subsection (f).
(f) Regulatory Authority.--Not earlier than 1 year after the date
of enactment of this Act, the Secretary of Labor and the Secretary of
the Treasury shall jointly issue regulations to implement section 113
of the Employee Retirement Income Security Act of 1974, as added by
subsection (a). Such regulations shall require plan sponsors to comply
in good faith with the regulations beginning not later than 1 year
after issuance of a final rule with respect to subsections (a)(1) and
(b) of such section 113, and beginning not later than 6 months after
issuance of a final rule with respect to subsections (a)(2), (c), (d),
and (e) of such section 113.
SEC. 304. DEFINED BENEFIT ANNUAL FUNDING NOTICES.
(a) In General.--Section 101(f)(2)(B) of the Employee Retirement
Income Security Act of 1974 (29 U.S.C. 1021(f)(2)(B)) is amended--
(1) in clause (i)(I), by striking ``funding target
attainment percentage (as defined in section 303(d)(2))'' and
inserting ``percentage of plan liabilities funded (as described
in clause (ii)(I)(bb))'';
(2) in clause (ii)(I)--
(A) by striking ``, a statement of'';
(B) by striking item (aa);
(C) by redesignating item (bb) as item (aa);
(D) in item (aa), as so redesignated--
(i) by inserting ``a statement of'' before
``the value'' and
(ii) by striking ``and'' at the end; and
(E) by adding at the end the following:
``(bb) a statement of the
percentage of plan liabilities
funded, calculated as the ratio
between the value of the plan's
assets and liabilities, as
determined under item (aa), for
the plan year to which the
notice relates and for the 2
preceding plan years, and
``(cc) if the information
in (aa) and (bb) is presented
in tabular form, a statement
that describes that in the
event of a plan termination the
corporation's calculation of
plan liabilities may be greater
and that references the section
of the notice with the
information required under
clause (x), and'';
(3) in clause (iii), in the matter preceding subclause (I),
by inserting ``for the plan year to which the notice relates as
of the last day of such plan year and the preceding 2 plan
years, in tabular format,'' after ``participants'';
(4) in clause (iv)--
(A) by striking ``plan and the asset'' and
inserting ``plan, the asset''; and
(B) by inserting ``, and the average return on
assets for the plan year,'' after ``assets)'';
(5) by redesignating clauses (ix) through (xi) as clause
(x) through (xii), respectively;
(6) by inserting after clause (viii) the following:
``(ix) in the case of a single-employer
plan, a statement as to whether the plan's
funded status, based on the plan's liabilities
described under subclause (II) for the plan
year to which the notice relates, and for the 2
preceding plan years, is at least 100 percent
(and, if not, the actual percentages), that
includes--
``(I) the plan's assets, as of the
last day of the plan year and for the 2
preceding plan years, as determined
under clause (ii)(I)(aa),
``(II) the plan's liabilities, as
of the last day of the plan year and
for the 2 preceding plan years, as
determined under clause (ii)(1)(aa),
and
``(III) the funded status of the
plan, determined as the ratio of the
plan's assets and liabilities
calculated under subclauses (I) and
(II), for the plan year to which the
notice relates, and for the 2 preceding
plan years,''; and
(7) in clause (x), as so redesignated, by striking the
comma at the end and inserting the following: ``and a statement
that, in the case of a single-employer plan--
``(I) if plan assets are sufficient
to pay vested benefits that are not
guaranteed by the Pension Benefit
Guaranty Corporation, participants and
beneficiaries may receive benefits in
excess of the guaranteed amount, and
``(II) in determining valuation of
guaranteed benefits, the Pension
Benefit Guaranty Corporation uses, as
of the date of enactment of the RISE &
SHINE Act, a valuation methodology
that--
``(aa) places a higher
value on the future cost of
benefits than any valuation
methodology required under
Federal statute, and
``(bb) makes it less likely
that participants and
beneficiaries will receive
amounts in excess of the
guaranteed amount under Federal
law,''.
(b) Effective Date.--The amendments made by subsection (a) shall
apply with respect to plan years beginning after December 31, 2023.
TITLE IV--MODERNIZATION
SEC. 401. AUTOMATIC REENROLLMENT UNDER QUALIFIED AUTOMATIC CONTRIBUTION
ARRANGEMENTS AND ELIGIBLE AUTOMATIC CONTRIBUTION
ARRANGEMENTS.
(a) Eligible Automatic Contribution Arrangements.--Section
514(e)(2) of the Employee Retirement Income Security Act of 1974 (29
U.S.C. 1144(e)(2)) is amended--
(1) by redesignating subparagraphs (A) through (C) as
clauses (i) through (iii), respectively, and by moving such
clauses 2 ems to the right;
(2) by striking ``(2) For purposes of'' and inserting
``(2)(A) For purposes of''; and
(3) by adding at the end the following:
``(B) In the case of an automatic contribution arrangement
taking effect after December 31, 2024, the requirements of
subparagraph (A)(ii) shall be treated as met only if, under the
arrangement, at least every 3 plan years but not more than once
annually each employee--
``(i) who is eligible to participate in the
arrangement; and
``(ii) who, at the time of the determination, has
in effect an affirmative election pursuant to
subparagraph (A)(ii) not to have any contributions
described in such subparagraph made;
is treated as having made the election at the uniform
percentage of compensation described in subparagraph (A)(ii)
unless the employee makes a new election under such
subparagraph. Such determination may be made at one time for
all employees described in the preceding sentence for a plan
year, regardless of individual employee dates of enrollment.''.
(b) Effective Date.--The amendments made by this section shall
apply to arrangements taking effect after December 31, 2024.
SEC. 402. INCIDENTAL PLAN EXPENSES.
(a) Findings.--Congress finds the following:
(1) Retirement plan sponsors engage advisors to assist in
administering their retirement plans. Such advisors and other
service providers are paid via monthly or annual retainers to
advise on plan administration or the investment fund lineup.
Such retainers are charged to the retirement plan.
(2) Other, incidental expenses incurred related to plan
design, may not be charged to the plan because they are deemed
settlor functions. For example, if a plan sponsor were to
inquire about a beneficial plan design feature, such as
automatic enrollment and reenrollment or automatic escalation,
the advisor or other service provider would bill the employer a
separate amount that could not be charged back to the plan.
Because these inquiries result in additional costs, many
employers, especially small employers, choose to forego these
incidental plan design features, even when they might generate
tremendous benefits for their employees.
(3) According to the 2021 Plan Sponsor Council of America's
Annual Survey of Profit Sharing and 401(k) Plans, only 30.5
percent of employers with fewer than 50 workers have an
automatic enrollment feature in their retirement plan, compared
to over 77 percent of employers with more than 1,000 workers.
Small employers need additional resources to improve their
retirement plan design.
(b) Facilitating the Implementation of Beneficial Plan Features.--
(1) Plan assets.--Section 403(c)(1) of the Employee
Retirement Income Security Act of 1974 (29 U.S.C. 1103(c)(1))
is amended by inserting ``(including incidental expenses solely
for the benefit of the participants and their beneficiaries)''
before the period.
(2) Fiduciary standard of care.--Section 404(a)(1)(A)(ii)
of the Employee Retirement Income Security Act of 1974 (29
U.S.C. 1104(a)(1)(A)(ii)) is amended by inserting ``(including
incidental expenses solely for the benefit of the participants
and their beneficiaries)'' before the semicolon.
TITLE V--AMENDMENTS TO PLANS OFFERED BY MULTIPLE EMPLOYERS
SEC. 501. REPORT ON POOLED EMPLOYER PLANS.
The Secretary of Labor shall--
(1) conduct a study on the pooled employer plan (as such
term is defined in section 3(43) of the Employee Retirement
Income Security Act of 1974 (29 U.S.C. 1002(43))) industry,
including on--
(A) the legal name and number of pooled employer
plans;
(B) the number of participants in such plans;
(C) the range of investment options provided in
such plans;
(D) the fees assessed in such plans;
(E) the manner in which employers select and
monitor such plans;
(F) the disclosures provided to participants in
such plans;
(G) the number and nature of any enforcement
actions by the Secretary of Labor on such plans;
(H) the extent to which such plans have increased
retirement savings coverage in the United States; and
(I) any additional information as the Secretary
determines is necessary; and
(2) not later than 5 years after the date of enactment of
this Act, and every 5 years thereafter, submit to Congress and
make available on a publicly accessible website of the
Department of Labor, a report on the findings of the study
under paragraph (1), including recommendations on how pooled
employer plans can be improved, through legislation, to serve
and protect retirement plan participants.
SEC. 502. ANNUAL AUDITS FOR GROUP OF PLANS.
Section 202(a) of the Setting Every Community Up for Retirement
Enhancement Act of 2019 (Public Law 116-94; 26 U.S.C. 6058 note) is
amended--
(1) by striking ``so that all members'' and inserting the
following: ``so that--
``(1) all members'';
(2) by striking the period and inserting ``; and''; and
(3) by adding at the end the following:
``(2) any opinions required by section 103(a)(3) of the
Employee Retirement Income Security Act of 1974 (29 U.S.C.
1023(a)(3)) shall relate only to each individual plan which
would otherwise be subject to the requirements of such section
103(a)(3).''.
TITLE VI--DEFINED BENEFIT PLAN PROVISIONS
SEC. 601. CASH BALANCE.
(a) Amendment of Internal Revenue Code of 1986.--Section 414 of the
Internal Revenue Code of 1986, as amended by the preceding sections of
this Act, is further amended by adding at the end the following new
subsection:
``(bb) Projected Interest Crediting Rate.--For purposes of this
part, in the case of an applicable defined benefit plan (as defined in
section 411(a)(13)(B)) which provides variable interest crediting
rates, the interest crediting rate which is treated as in effect and as
the projected interest crediting rate shall be a reasonable projection
of such variable interest crediting rate, not to exceed 6 percent.''.
(b) Amendment of Employee Retirement Income Security Act of 1974.--
Section 210 of the Employee Retirement Income Security Act of 1974 (29
U.S.C. 1060) is amended by adding at the end the following new
subsection:
``(g) Projected Interest Crediting Rate.--For purposes of this
title, in the case of an applicable defined benefit plan (within the
meaning of section 203(f)(3)) which provides variable interest
crediting rates, the interest crediting rate which is treated as in
effect and as the projected interest crediting rate shall be a
reasonable projection of such variable interest crediting rate, not to
exceed 6 percent.''.
(c) Effective Date.--The amendments made by this section shall
apply with respect to years beginning after the date of enactment of
this Act.
SEC. 602. TERMINATION OF VARIABLE RATE PREMIUM INDEXING.
(a) In General.--Paragraph (8) of 4006(a) of the Employee
Retirement Income Security Act of 1974 (29 U.S.C. 1306(a)) is amended
by--
(1) in subparagraph (A)--
(A) in clause (vi), by striking ``and'';
(B) in clause (vii), by striking the period at the
end and inserting ``; and''; and
(C) by adding at the end the following:
``(viii) for plan years beginning after
calendar year 2022, $48.'';
(2) in subparagraph (B), in the matter preceding clause
(i), by inserting ``and before 2023'' after ``2012'' ; and
(3) in subparagraph (D)(vii), by inserting ``and before
2023'' after ``2019''.
(b) Technical Amendment.--Clause (i) of section 4006(a)(3)(E) of
the Employee Retirement Income Security Act of 1974 (29 U.S.C.
1306(a)(3)(E)) is amended by striking ``subparagraph (H)'' and
inserting ``subparagraph (I)''.
SEC. 603. ENHANCING RETIREE HEALTH BENEFITS IN PENSION PLANS.
(a) Extension of Transfers of Excess Pension Assets to Retiree
Health Accounts Under the Internal Revenue Code of 1986.--Paragraph (4)
of section 420(b) of the Internal Revenue Code of 1986 is amended by
striking ``December 31, 2025'' and inserting ``December 31, 2032''.
(b) Extension of Transfers of Excess Pension Assets to Retiree
Health Accounts Under the Employee Retirement Income Security Act of
1974.--
(1) Definitions.--Section 101(e)(3) of the Employee
Retirement Income Security Act of 1974 (29 U.S.C. 1021(e)(3))
is amended by striking ``(as in effect on the date of the
enactment of the Surface Transportation and Veterans Health
Care Choice Improvement Act of 2015)'' and inserting ``(as in
effect on the date of enactment of the RISE & SHINE Act)''.
(2) Use of assets.--Section 403(c)(1) of the Employee
Retirement Income Security Act of 1974 (29 U.S.C. 1103(c)(1))
is amended by striking ``(as in effect on the date of the
enactment of the Surface Transportation and Veterans Health
Care Choice Improvement Act of 2015)'' and inserting ``(as in
effect on the date of enactment of the RISE & SHINE Act)''.
(3) Exemption.--Section 408(b)(13) of the Employee
Retirement Income Security Act of 1974 (29 U.S.C. 1108(b)(13))
is amended--
(A) by striking ``January 1, 2026'' and inserting
``January 1, 2033''; and
(B) by striking ``(as in effect on the date of the
enactment of the Surface Transportation and Veterans
Health Care Choice Improvement Act of 2015)'' and
inserting ``(as in effect on the date of enactment of
the RISE & SHINE Act)''.
(c) Effective Date.--The amendments made by this section shall
apply to transfers made after the date of enactment of this Act.
TITLE VII--ADDITIONAL RETIREMENT ENHANCEMENTS
SEC. 701. PROVISIONS RELATING TO PLAN AMENDMENTS.
(a) In General.--Part 2 of subtitle B of title I of the Employee
Retirement Income Security Act of 1974 (29 U.S.C. 1021 et seq.) is
amended--
(1) by redesignating section 211 as section 212; and
(2) by inserting after section 210 the following new
section:
``SEC. 211. PLAN AMENDMENTS DUE TO THE RISE & SHINE ACT.
``(a) In General.--If this section applies to any retirement plan
or contract amendment--
``(1) such retirement plan or contract shall be treated as
being operated in accordance with the terms of the plan during
the period described in subsection (b)(2)(A); and
``(2) except as provided by the Secretary of the Treasury
(or the Secretary's delegate) and the Secretary of Labor (or
the Secretary's delegate), such retirement plan shall not fail
to meet the requirements of section 411(d)(6) of the Internal
Revenue Code of 1986 and section 204(g) of this Act by reason
of such amendment.
``(b) Amendments to Which Section Applies.--
``(1) In general.--This section shall apply to any
amendment to any retirement plan or annuity contract which is
made--
``(A) pursuant to any amendment made by the RISE &
SHINE Act or pursuant to any regulation issued by the
Secretary of the Treasury or the Secretary of Labor (or
a delegate of either such Secretary) under the RISE &
SHINE Act; and
``(B) on or before the last day of the first plan
year beginning on or after January 1, 2025.
``(2) Conditions.--This section shall not apply to any
amendment unless--
``(A) during the period--
``(i) beginning on the date the legislative
or regulatory amendment described in paragraph
(1)(A) takes effect (or in the case of a plan
or contract amendment not required by such
legislative or regulatory amendment, the
effective date specified by the plan); and
``(ii) ending on the date described in
paragraph (1)(B) (or, if earlier, the date the
plan or contract amendment is adopted),
the plan or contract is operated as if such plan or
contract amendment were in effect; and
``(B) such plan or contract amendment applies
retroactively for such period.''.
(b) Clerical Amendment.--The table of contents in section 1 of the
Employee Retirement Income Security Act of 1974 is amended by striking
the item relating to section 211 and by inserting after the item
relating to section 210 the following new items:
``Sec. 211. Plan amendments due to the RISE & SHINE Act.
``Sec. 212. Effective dates.''.
SEC. 702. WORKER OWNERSHIP, READINESS, AND KNOWLEDGE (WORK) ACT.
(a) Short Title.--This section may be cited as the ``Worker
Ownership, Readiness, and Knowledge Act'' or the ``WORK Act''.
(b) Definitions.--In this section:
(1) Existing program.--The term ``existing program'' means
a program, designed to promote employee ownership, that exists
on the date on which the Secretary is carrying out a
responsibility authorized under this section.
(2) Initiative.--The term ``Initiative'' means the Employee
Ownership Initiative established under subsection (c).
(3) New program.--The term ``new program'' means a program,
designed to promote employee ownership, that does not exist on
the date on which the Secretary is carrying out a
responsibility authorized under this section.
(4) Secretary.--The term ``Secretary'' means the Secretary
of Labor.
(5) State.--The term ``State'' has the meaning given the
term under section 3 of the Workforce Innovation and
Opportunity Act (29 U.S.C. 3102).
(c) Employee Ownership Initiative.--
(1) Establishment.--The Secretary shall establish within
the Department of Labor an Employee Ownership Initiative to
promote employee ownership.
(2) Functions.--In carrying out the Initiative, the
Secretary shall--
(A) support within the States existing programs
designed to promote employee ownership; and
(B) facilitate within the States the formation of
new programs designed to promote employee ownership.
(3) Duties.--To carry out the functions enumerated in
paragraph (2), the Secretary shall--
(A) support new programs and existing programs by--
(i) making Federal grants authorized under
subsection (e); and
(ii)(I) acting as a clearinghouse on
techniques employed by new programs and
existing programs within the States, and
disseminating information relating to those
techniques to the programs; or
(II) funding projects for information
gathering on those techniques, and
dissemination of that information to the
programs, by groups outside the Department of
Labor; and
(B) facilitate the formation of new programs, in
ways that include holding or funding an annual
conference of representatives from States with existing
programs, representatives from States developing new
programs, and representatives from States without
existing programs.
(d) Programs Regarding Employee Ownership.--
(1) Establishment of program.--Not later than 180 days
after the date of enactment of this Act, the Secretary shall
establish a program to encourage new programs and existing
programs within the States to foster employee ownership
throughout the United States.
(2) Purpose of program.--The purpose of the program
established under paragraph (1) is to encourage new and
existing programs within the States that focus on--
(A) providing education and outreach to inform
employees and employers about the possibilities and
benefits of employee ownership and business ownership
succession planning, including providing information
about financial education, employee teams, open-book
management, and other tools that enable employees to
share ideas and information about how their businesses
can succeed;
(B) providing technical assistance to assist
employee efforts to become business owners, to enable
employers and employees to explore and assess the
feasibility of transferring full or partial ownership
to employees, and to encourage employees and employers
to start new employee-owned businesses;
(C) training employees and employers with respect
to methods of employee participation in open-book
management, work teams, committees, and other
approaches for seeking greater employee input; and
(D) training other entities to apply for funding
under this subsection, to establish new programs, and
to carry out program activities.
(3) Program details.--The Secretary may include, in the
program established under paragraph (1), provisions that--
(A) in the case of activities described in
paragraph (2)(A)--
(i) target key groups, such as retiring
business owners, senior managers, labor
organizations, trade associations, community
organizations, and economic development
organizations;
(ii) encourage cooperation in the
organization of workshops and conferences; and
(iii) prepare and distribute materials
concerning employee ownership, and business
ownership succession planning;
(B) in the case of activities described in
paragraph (2)(B)--
(i) provide preliminary technical
assistance to employee groups, managers, and
retiring owners exploring the possibility of
employee ownership;
(ii) provide for the performance of
preliminary feasibility assessments;
(iii) assist in the funding of objective
third-party feasibility studies and preliminary
business valuations, and in selecting and
monitoring professionals qualified to conduct
such studies; and
(iv) provide a data bank to help employees
find legal, financial, and technical advice in
connection with business ownership;
(C) in the case of activities described in
paragraph (2)(C)--
(i) provide for courses on employee
participation; and
(ii) provide for the development and
fostering of networks of employee-owned
companies to spread the use of successful
participation techniques; and
(D) in the case of training described in paragraph
(2)(D)--
(i) provide for visits to existing programs
by staff from new programs receiving funding
under this section; and
(ii) provide materials to be used for such
training.
(4) Guidance.--The Secretary shall issue formal guidance,
for--
(A) recipients of grants awarded under subsection
(e) and one-stop partners (as defined in section 3 of
the Workforce Innovation and Opportunity Act (29 U.S.C.
3102)) affiliated with the workforce development
systems (as so defined) of the States, proposing that
programs and other activities funded under this section
be--
(i) proactive in encouraging actions and
activities that promote employee ownership of
businesses; and
(ii) comprehensive in emphasizing both
employee ownership of businesses so as to
increase productivity and broaden capital
ownership; and
(B) acceptable standards and procedures to
establish good faith fair market value for shares of a
business to be acquired by an employee stock ownership
plan (as defined in section 407(d)(6) of the Employee
Retirement Income Security Act of 1974 (29 U.S.C.
1107(d)(6))).
(e) Grants.--
(1) In general.--In carrying out the program established
under subsection (d), the Secretary may make grants for use in
connection with new programs and existing programs within a
State for any of the following activities:
(A) Education and outreach as provided in
subsection (d)(2)(A).
(B) Technical assistance as provided in subsection
(d)(2)(B).
(C) Training activities for employees and employers
as provided in subsection (d)(2)(C).
(D) Activities facilitating cooperation among
employee-owned firms.
(E) Training as provided in subsection (d)(2)(D)
for new programs provided by participants in existing
programs dedicated to the objectives of this section,
except that, for each fiscal year, the amount of the
grants made for such training shall not exceed 10
percent of the total amount of the grants made under
this section.
(2) Amounts and conditions.--The Secretary shall determine
the amount and any conditions for a grant made under this
subsection. The amount of the grant shall be subject to
paragraph (6), and shall reflect the capacity of the applicant
for the grant.
(3) Applications.--Each entity desiring a grant under this
subsection shall submit an application to the Secretary at such
time, in such manner, and accompanied by such information as
the Secretary may reasonably require.
(4) State applications.--Each State may sponsor and submit
an application under paragraph (3) on behalf of any local
entity consisting of a unit of State or local government,
State-supported institution of higher education, or nonprofit
organization, meeting the requirements of this section.
(5) Applications by entities.--
(A) Entity applications.--If a State fails to
support or establish a program pursuant to this section
during any fiscal year, the Secretary shall, in the
subsequent fiscal years, allow local entities described
in paragraph (4) from that State to make applications
for grants under paragraph (3) on their own initiative.
(B) Application screening.--Any State failing to
support or establish a program pursuant to this section
during any fiscal year may submit applications under
paragraph (3) in the subsequent fiscal years but may
not screen applications by local entities described in
paragraph (4) before submitting the applications to the
Secretary.
(6) Limitations.--A recipient of a grant made under this
subsection shall not receive, during a fiscal year, in the
aggregate, more than the following amounts:
(A) For fiscal year 2024, $300,000.
(B) For fiscal year 2025, $330,000.
(C) For fiscal year 2026, $363,000.
(D) For fiscal year 2027, $399,300.
(E) For fiscal year 2028, $439,200.
(7) Annual report.--For each year, each recipient of a
grant under this subsection shall submit to the Secretary a
report describing how grant funds allocated pursuant to this
subsection were expended during the 12-month period preceding
the date of the submission of the report.
(f) Evaluations.--The Secretary is authorized to reserve not more
than 10 percent of the funds appropriated for a fiscal year to carry
out this section, for the purposes of conducting evaluations of the
grant programs identified in subsection (e) and to provide related
technical assistance.
(g) Reporting.--Not later than the expiration of the 36-month
period following the date of enactment of this Act, the Secretary shall
prepare and submit to Congress a report--
(1) on progress related to employee ownership in businesses
in the United States; and
(2) containing an analysis of critical costs and benefits
of activities carried out under this section.
(h) Authorizations of Appropriations.--
(1) In general.--There are authorized to be appropriated
for the purpose of making grants pursuant to subsection (e) the
following:
(A) For fiscal year 2024, $4,000,000.
(B) For fiscal year 2025, $7,000,000.
(C) For fiscal year 2026, $10,000,000.
(D) For fiscal year 2027, $13,000,000.
(E) For fiscal year 2028, $16,000,000.
(2) Administrative expenses.--There are authorized to be
appropriated for the purpose of funding the administrative
expenses related to the Initiative, for each of fiscal years
2022 through 2026, an amount not in excess of the lesser of--
(A) $350,000; or
(B) 5.0 percent of the maximum amount available
under paragraph (1) for that fiscal year.
SEC. 703. REPORT BY THE SECRETARY OF LABOR ON THE IMPACT OF INFLATION
ON RETIREMENT SAVINGS.
The Secretary of Labor, in consultation with the Secretary of the
Treasury, shall--
(1) conduct a study on the impact of inflation on
retirement savings; and
(2) not later than 90 days after the date of enactment of
this Act, submit to Congress a report on the findings of the
study.
Calendar No. 426
117th CONGRESS
2d Session
S. 4353
_______________________________________________________________________
A BILL
To amend the Employee Retirement Income Security Act of 1974 and the
Internal Revenue Code of 1986 to improve retirement plan provisions,
and for other purposes.
_______________________________________________________________________
June 21, 2022
Reported with amendments