[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2696 Introduced in House (IH)]
<DOC>
119th CONGRESS
1st Session
H. R. 2696
To establish the American Worker Retirement Plan, improve the financial
security of working Americans by facilitating the accumulation of
wealth, and for other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
April 7, 2025
Mr. Smucker (for himself, Ms. Sewell, Ms. Malliotakis, Ms. Tenney, Mr.
Fitzpatrick, Mrs. Miller of West Virginia, and Mr. Smith of Nebraska)
introduced the following bill; which was referred to the Committee on
Education and Workforce, and in addition to the Committee on Ways and
Means, for a period to be subsequently determined by the Speaker, in
each case for consideration of such provisions as fall within the
jurisdiction of the committee concerned
_______________________________________________________________________
A BILL
To establish the American Worker Retirement Plan, improve the financial
security of working Americans by facilitating the accumulation of
wealth, 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 Savings
for Americans Act of 2025''.
(b) Table of Contents.--The table of contents for this Act is as
follows:
Sec. 1. Short title; table of contents.
Sec. 2. Definitions.
Sec. 3. Relationship to Social Security.
Sec. 4. Government benefits.
TITLE I--THE AMERICAN WORKER RETIREMENT PLAN
Sec. 101. The American Worker Retirement Fund.
Sec. 102. Investment of American Worker Retirement Fund.
Sec. 103. Eligibility.
Sec. 104. Enrollment.
Sec. 105. Contributions.
Sec. 106. Distributions.
Sec. 107. Accounts.
Sec. 108. Tax treatment.
Sec. 109. Spousal protections; survivor rights.
TITLE II--THE AMERICAN WORKER RETIREMENT PLAN INVESTMENT MANAGEMENT
SYSTEM
Sec. 201. The American Worker Retirement Investment Board.
Sec. 202. The American Worker Retirement Plan Advisory Council.
Sec. 203. Executive Director.
Sec. 204. Investment policies and selection of asset managers.
Sec. 205. Administrative provisions.
Sec. 206. Fiduciary responsibilities; liability and penalties.
Sec. 207. Bonding.
Sec. 208. Investigative authority.
Sec. 209. Exculpatory provisions; insurance.
Sec. 210. Subpoena authority.
TITLE III--GOVERNMENT MATCH TAX CREDIT
Sec. 301. Government Match Tax Credit.
SEC. 2. DEFINITIONS.
As used in this Act, except as otherwise provided:
(1) Account.--The term ``account'' means an account
established and maintained under section 107.
(2) Board.--The term ``Board'' means the American Worker
Retirement Investment Board established under section 201.
(3) Business.--The term ``business'' means any entity,
including any sole proprietor, partnership, limited liability
company, or corporation, that engages in interstate commerce.
(4) Earnings.--The term ``earnings'', when used with
respect to the Fund, means the amount of the gain realized or
yield received from the investment of sums in such Fund.
(5) Executive director.--The term ``Executive Director''
means the Executive Director appointed under section 203.
(6) Existing retirement plan.--The term ``existing
retirement plan'' means--
(A) an eligible retirement plan, as defined in
section 402(c)(8)(B) of the Internal Revenue Code of
1986, including any defined benefit plan;
(B) the Thrift Savings Plan established under
subchapter III of chapter 84 of title 5, United States
Code; and
(C) any other tax deferred employee retirement plan
determined by the Secretary of the Treasury to be
consistent with the purposes of this Act.
(7) Former participant.--
(A) In general.--The term ``former participant''
means a participant who has an account with the Fund
and is no longer a qualifying worker.
(B) Individuals becoming qualifying workers
again.--Such term shall not include an individual who
(without regard to this subparagraph) is a former
participant but who subsequently becomes a qualifying
worker and enrolls again under section 104(a) to
participate in the Fund. This subparagraph shall apply
until such individual is no longer a qualifying worker.
(8) Fund.--The term ``Fund'' means the American Worker
Retirement Fund established under section 101(a).
(9) Investment advisory council.--The term ``Investment
Advisory Council'' means the council established under section
202.
(10) Loss.--The term ``loss'', as used with respect to the
Fund, includes the amount of any loss resulting from the
investment of sums in such Fund, or from the breach of any
responsibility, duty, or obligation under section 206.
(11) Net earnings.--The term ``net earnings'' means the
excess of earnings over losses.
(12) Net losses.--The term ``net losses'' means the excess
of losses over earnings.
(13) Participant.--The term ``participant'' means any
qualifying worker who is enrolled to participate in the Fund
under section 104(a) and has not opted out of participation
under section 104(b)(3).
(14) Participating employer.--The term ``participating
employer'' means any business that--
(A) employs a qualifying worker; or
(B) contracts with an independent contractor who is
a qualifying worker and opts to enroll such independent
contractor to participate in the Fund under section
104(a)(2).
(15) Qualifying worker.--The term ``qualifying worker''
means--
(A) an employee who--
(i) is employed by a business that has not
established an existing retirement plan and
does not provide an individual retirement plan
(as defined in section 7701(a)(37) of the
Internal Revenue Code of 1986) with an
automatic enrollment payroll deduction
arrangement; or
(ii) is not eligible to participate in any
such plan or arrangement established by the
business that employs the employee; or
(B) an independent contractor who--
(i) is self-employed; and
(ii) has not established an existing
retirement plan, and does not have an
individual retirement plan (as defined in
section 7701(a)(37) of the Internal Revenue
Code of 1986) with an automatic enrollment
payroll deduction arrangement.
SEC. 3. RELATIONSHIP TO SOCIAL SECURITY.
Except as otherwise provided in this Act, the funds payable under
the Fund to participants and former participants are in addition to the
benefits payable under the Social Security Act (42 U.S.C. 301 et seq.).
SEC. 4. GOVERNMENT BENEFITS.
In the case of an individual who has not attained age 65, the funds
owned by such individual in an account and any contribution made to
such funds by a participant or the Secretary of the Treasury shall not
be taken into consideration when determining such individual's
eligibility for any Federal public assistance benefit.
TITLE I--THE AMERICAN WORKER RETIREMENT PLAN
SEC. 101. THE AMERICAN WORKER RETIREMENT FUND.
(a) Establishment.--There is established in the Treasury of the
United States the American Worker Retirement Fund.
(b) Purposes.--The Fund shall consist of the sum of all amounts
contributed under section 105 of this Act and section 25F of the
Internal Revenue Code of 1986, as added by this Act, increased by the
total net earnings from investments of the sums in the Fund or reduced
by the total net losses from investments of the Fund, and reduced by
the total amount of payments made from the Fund (including payments for
administrative expenses under subsection (e)).
(c) Investment.--The sums in the Fund shall remain available
without fiscal year limitation--
(1) to invest pursuant to section 102;
(2) to pay the administrative expenses of the Fund under
subsection (e);
(3) to make distributions as provided in section 106;
(4) to make loans as authorized under section 106(h); and
(5) to purchase insurance as provided in section 209.
(d) Accounts.--Each participant shall have an account with the
Fund. Amounts contributed by a participant under section 105 and by the
Secretary of the Treasury under section 25F of the Internal Revenue
Code of 1986 shall be deposited in the Fund and credited to the
participant's account in accordance with such procedures as the
Secretary of the Treasury may, in consultation with the Executive
Director, prescribe in regulation.
(e) Administrative Expenses.--Administrative expenses (including
expenses related to financial literacy requirements under section
201(f)(5)) incurred to carry out this Act shall be paid out of the net
earnings of the Fund, including earnings attributed to returned credit
amounts under section 25F(h) of the Internal Revenue Code of 1986.
(f) Exclusive Benefit.--
(1) In general.--Subject to paragraphs (2) and (3) and
subsection (e), sums in the Fund credited to the accounts of a
participant or former participant may not be used for, or
diverted to, purposes other than for the exclusive benefit of
the participant or former participant, or a beneficiary
thereof, except as otherwise provided by law.
(2) Assignment.--Except as provided in paragraph (3), sums
in the Fund may not be assigned or alienated and are not
subject to execution, levy, attachment, garnishment, or other
legal process. For purposes of this paragraph, a loan made from
the Fund to a participant shall not be considered to be an
assignment or alienation.
(3) Legal obligations.--Moneys due or payable from the Fund
to any individual and, in the case of an individual who is a
participant or former participant, the balance in the account
of the participant or former participant shall be subject to--
(A) legal process for the enforcement of the
individual's legal obligation to provide child support
or make alimony payments as provided in section 459 of
the Social Security Act (42 U.S.C. 659);
(B) an obligation of the Executive Director to make
a payment to another person under section 109; and
(C) any Federal tax levy under section 6331 of the
Internal Revenue Code of 1986.
For the purposes of this paragraph, an amount contributed for
the benefit of a participant or former participant under
section 25F of the Internal Revenue Code of 1986 (including any
earnings attributable thereto) shall be considered part of the
balance in such participant or former participant's account.
(g) Non-Appropriated Funds.--The sums in the Fund shall not be
appropriated for any purpose other than the purposes specified in this
section and may not be used for any other purpose.
(h) Benefit to Participants.--All sums contributed to the Fund by a
participant or the Secretary of the Treasury for the benefit of such
participant and all net earnings in such Fund in trust for such
participant shall be the exclusive property of the participant.
(i) Nonforfeitable.--All the contributions made under section 105
and section 25F of the Internal Revenue Code of 1986 shall be fully
nonforfeitable when made, except as provided in section 25F(h) of such
Code.
SEC. 102. INVESTMENT OF AMERICAN WORKER RETIREMENT FUND.
(a) In General.--The Board shall establish the investment policies
of the Fund and select the investment funds, indexes, and other
investment products that the amounts in the Fund shall be invested in
subject to the following conditions:
(1) The Board shall provide for the following investment
options for participants:
(A) A Government Securities Investment Fund under
which sums in the Fund are invested in--
(i) bonds issued or guaranteed by the
United States Government; and
(ii) bonds issued by Government-sponsored
enterprises or Government corporations.
(B) A Fixed-Income Investment Fund under which sums
are in the Fund are invested in--
(i) insurance contracts;
(ii) certificates of deposit; and
(iii) other instruments or obligations
selected by qualified professional asset
managers (as defined in section 8438(a)(8) of
title 5, United States Code),
which return the amount invested and pay interest, at a
specific rate or rates, on that amount during a
specific period of time.
(C) A Common Stock Index Investment Fund, as
described in section 8438(b)(2) of title 5, United
States Code.
(D) A Small Capitalization Stock Index Investment
Fund, as described in section 8438(b)(3) of title 5,
United States Code.
(E) An International Stock Index Investment Fund,
as described in section 8438(b)(4) of title 5, United
States Code.
(F) A Life-Cycle Investment Fund consisting of
target date asset allocation portfolios.
(2) The Board may, in its discretion, provide for other
investment options for participants consistent with the Board's
fiduciary duty set forth in sections 201 and 206.
(3) The Board shall consult with the Investment Advisory
Council before authorizing additional investment options for
participants.
(b) Investments.--
(1) Investment selection.--The Executive Director shall
invest the sums available in the Fund for investment as
provided in the selection made under subsection (c).
(2) Default option.--If a selection has not been made with
respect to any sums available for investment in the Fund, the
Executive Director shall invest such sums in an age-appropriate
Life-Cycle Investment Fund, as determined by the Executive
Director.
(c) Investment Selection.--As often as is practical, but not less
than twice per year, a participant may select the investment funds and
options referred to in subsection (a) into which the amounts in the
Fund credited to the participant's accounts are to be invested or
reinvested. A selection may be made under this subsection only in
accordance with regulations prescribed by the Executive Director and
within such period as the Executive Director shall provide in such
regulations, but in no event less frequently than twice a year.
(d) Voting Rights.--Participants, former participants, the Board,
and the Executive Director may not exercise voting rights associated
with the ownership of securities by the Fund.
(e) Reports.--The Board shall issue regular reports (not less
frequently than quarterly) to participants and former participants on
the performance of each investment option selected under subsection
(a), which shall include personalized estimates of assets and income at
retirement, the additional assets and income at retirement a
participant would have if the participant makes sufficient
contributions to receive the maximum amount of the Government match tax
credit under section 25F of the Internal Revenue Code of 1986, and any
other information the Board determines may help participants make sound
financial decisions. The Board shall provide the reports required under
this subsection by electronic delivery, except that upon the request of
a participant or former participant, reports shall be provided by mail
to such individual.
SEC. 103. ELIGIBILITY.
(a) Eligibility.--A qualifying worker shall be eligible to
participate in the Fund upon completion of the enrollment process set
forth in section 104.
(b) Cessation of Eligibility.--A former participant shall not be
eligible to contribute to the Fund under section 105(a) but shall
remain the owner of the funds in the former participant's account with
the Fund (and any net earnings attributable to such funds) subject to
the withdrawal conditions established under section 106, and may
exercise investment decisions with respect to such account on the same
basis as a participant.
SEC. 104. ENROLLMENT.
(a) Enrollment.--
(1) In general.--The Secretary of the Treasury and the
Executive Director shall jointly establish an enrollment
process for participating employers to enroll qualifying
workers to participate in the Fund that incorporates, to the
extent practicable, such enrollment and participant
contributions under section 105(a) into Federal tax withholding
forms and payments. Such process shall provide that a business
operating on the date of the establishment of the Fund shall
complete such enrollment process for any qualifying worker as
of such time no later than the date that is 1 year from such
date.
(2) Independent contractors.--
(A) In general.--In the case of independent
contractors who are qualifying workers, the enrollment
process shall allow businesses who have contracts with
such qualifying workers to elect to enroll such
qualifying workers to participate in the Fund.
(B) Classification.--An election (or failure to
make an election) by a business under subparagraph (A)
with respect to any independent contractor who is a
qualifying worker shall not be relevant to the
classification of such worker as an independent
contractor under any Federal, State, or local law.
(b) Auto-Enrollment; Opt-Out.--
(1) In general.--Each participating employer shall enroll
each of its qualifying workers to participate in the Fund under
subsection (a) unless such qualifying worker elects to opt out
of participating pursuant to paragraph (3). A qualifying worker
who is a sole proprietor or independent contractor shall enroll
or elect to opt out of participating pursuant to paragraph (3).
(2) Automatic contribution rates.--Each qualifying worker
enrolled under paragraph (1) shall be automatically enrolled to
make contributions under section 105(a) at the default
percentage of 3 percent of the qualifying worker's compensation
from the employer for such period as shall be established by
regulation under section 105(a)(3).
(3) Opt-out.--A qualifying worker may elect to opt out of
participating in the Fund pursuant to procedures established
jointly by the Secretary of the Treasury and the Executive
Director as part of the regulations governing the enrollment
process set forth in subsection (a). If a qualifying worker
elects to opt out of participating in the Fund, such qualifying
worker shall not be enrolled in subsequent years unless the
qualifying worker elects to participate in the Fund. The
Secretary of the Treasury and the Executive Director shall
determine procedures to establish accounts for qualifying
workers who elect to opt out of participating in the Fund who
are determined to be eligible for automatic contributions or
who would make contributions otherwise allowable by law outside
the withholding process.
(c) Penalties.--
(1) Penalty.--A participating employer who fails to enroll
a qualifying worker pursuant to subsection (b) or fails to
deposit in the Fund the amount of a participant's contributions
under section 105(a) shall be subject to a penalty equal to the
applicable penalty percentage of the amount of the
contributions by the qualifying worker or participant, as the
case may be, that the participating employer fails to deposit
due to failure to enroll the qualifying worker or otherwise
deposit such funds. The Secretary of the Treasury and the
Executive Director shall jointly prescribe regulations under
which a participating employer shall be required to pay to the
Fund amounts representing lost earnings resulting from errors
made by such participating employer in carrying out this
section.
(2) Applicable penalty percentage.--The term ``applicable
penalty percentage'' means--
(A) 2 percent if the failure is for not more than 5
days;
(B) 5 percent if the failure is for more than 5
days but not more than 15 days; and
(C) 10 percent if the failure is for more than 15
days.
(3) Funds.--The Secretary of the Treasury shall credit to
the Fund, out of any sums in the Treasury not otherwise
appropriated, the amount determined by the Executive Director
to be necessary to carry out this section and section 105(d).
SEC. 105. CONTRIBUTIONS.
(a) Contributions by Participants.--
(1) In general.--Pursuant to the regulations established
under paragraph (3) and subsection (e), a participant may make
contributions to the participant's account with the Fund in any
pay period in an amount not to exceed the participant's
compensation for such period.
(2) Other participant contributions.--
(A) Catch-up contributions.--Notwithstanding the
limitation under paragraph (1) or subsection (c), a
participant may make such additional contributions to
the participant's account with the Fund as are
permitted by section 414(v) of the Internal Revenue
Code of 1986, and the regulations established under
subsection (e) consistent therewith.
(B) Contributions of tax refunds.--
(i) In general.--Subject to the limits of
subsection (c), a participant may elect, at
such time and in such manner as the Secretary
of the Treasury may prescribe, to contribute to
the participant's account any portion of such
participant's overpayment of tax which is to be
refunded to such participant under section 6402
of the Internal Revenue Code of 1986.
(ii) Special rules.--For purposes of clause
(i)--
(I) the amount of the overpayment
which may be contributed under clause
(i) shall be determined without regard
to any overpayment attributable to the
amount contributed to the account by
the Secretary of the Treasury under
section 25F of the Internal Revenue
Code of 1986, and
(II) any contribution described in
clause (i) shall be treated as made for
the taxable year of the overpayment and
shall be taken into account in
determining the amount of the credit
under section 25F for such taxable
year.
(3) Contributions.--The Secretary of the Treasury and the
Executive Director shall jointly prescribe regulations that
establish a program of regular contribution under which
participants may--
(A) make contributions to their accounts with the
Fund under paragraph (1);
(B) modify the amount contributed under such
paragraph; or
(C) terminate such contributions.
(4) Election.--An election to make contributions under this
subsection--
(A) may be made at any time;
(B) shall take effect on the earliest date after
the election that is administratively feasible; and
(C) shall remain in effect until modified or
terminated.
Any such election shall be subject to the contribution limits
under this section.
(b) Contribution of Government Match Tax Credit.--A participant's
account shall receive contributions in the form of the Government Match
Tax Credit contributed by the Secretary of the Treasury under section
25F of the Internal Revenue Code of 1986.
(c) Contribution Limits.--Notwithstanding any other provision of
this section, no contribution may be made under this section for any
year to the extent that such contribution, when added to prior
contributions for such year, exceeds any limitation under section
219(b)(5) of the Internal Revenue Code of 1986. Any contribution made
under section 25F of the Internal Revenue Code of 1986 shall not be
taken into account for purposes of the preceding sentence.
(d) Treatment as Roth Contributions.--Contributions under
subsection (a) shall not be excludable from gross income and no
deduction shall be allowed with respect to such contributions under
section 219 of the Internal Revenue Code of 1986.
(e) Regulations.--The amounts contributed to the Fund by a
participant under section 105(a) and on behalf of a participant by the
Secretary of the Treasury under section 25F of the Internal Revenue
Code of 1986 shall be deposited in the Fund and credited to the
participant's account with the Fund pursuant to regulations jointly
prescribed by the Secretary of the Treasury and the Executive Director.
SEC. 106. DISTRIBUTIONS.
(a) Former Participants.--A former participant is entitled to
access the amounts in the former participant's account as provided in
this section. Amounts in the account of a former participant shall
remain in the Fund until distributed in accordance with subsection (b).
(b) Former Participant Withdrawal Options.--Subject to section 109,
a former participant is entitled to and may elect to withdraw from the
Fund the balance of the former participant's account as--
(1) an annuity;
(2) a single payment;
(3) 2 or more substantially equal payments to be made not
less frequently than annually; or
(4) any combination of payments described in paragraphs (1)
through (3) as the Executive Director may prescribe by
regulation.
(c) Additional Former Participant Withdrawal Options.--
(1) In general.--In addition to the right provided under
subsection (b) to withdraw the balance of the account, a former
participant may make 1 or more withdrawals of any amount in the
same manner as a single payment is made in accordance with
subsection (b)(2) from the former participant's account.
(2) Transfers to retirement plans.--
(A) In general.--A former participant may request
that the amount withdrawn from the Fund under paragraph
(1) be transferred to an existing retirement plan.
(B) Transfers.--The Executive Director shall make
each transfer directly to an existing retirement plan
identified by the former participant for whom the
transfer is made. A transfer shall not be made under
the preceding sentence until the Executive Director
receives from the former participant the information
required by the Executive Director specifically to
identify the existing retirement plan to which the
transfer is to be made.
(3) Limitations.--Withdrawals under this subsection shall
be subject to such other limitations or conditions as the
Executive Director may prescribe by regulation.
(d) Payment of Annuities.--The Board shall prescribe methods of
payment of annuities under this Act substantially similar to those
provided for under section 8434 of title 5, United States Code.
(e) Former Participant Changes to Elections.--
(1) In general.--Subject to section 109, a former
participant may change an election previously made under this
section, except that in the case of an election to receive an
annuity, a former participant may not change an election under
this section on or after the date on which an annuity contract
is purchased to provide for the annuity elected by the former
participant.
(2) Distributions made.--A former participant may not
return a distribution once made pursuant to an election under
this section.
(f) Survivor Rights.--
(1) In general.--If a participant or a former participant
dies without having made an election under subsection (b) or
after having elected an annuity under subsection (b) but before
making an election for payments to a survivor rights under
section 8434 of title 5, United States Code, an amount equal to
the value of that individual's account (as of death) shall,
subject to any decree, order, or agreement referred to in
section 109, be paid in a manner consistent with the
requirements of section 109.
(2) Maintenance of account.--Notwithstanding section 109,
if a participant or former participant dies and has designated
as sole or partial beneficiary the spouse of the participant or
former participant at the time of death, or, if a participant
or former participant dies with no designated beneficiary and
is survived by a spouse, the spouse may maintain the portion of
the participant or former participant's account to which the
spouse is entitled in accordance with the following terms:
(A) Subject to the limitations of subparagraph (B),
the spouse shall have the same withdrawal options under
subsection (b) as a former participant.
(B) The spouse may not make withdrawals under
subsection (h) or (i).
(C) The spouse may not make contributions or
transfers to the account.
(D) The account shall be disbursed upon the death
of the surviving spouse of the participant or former
participant and shall not be maintained by a
beneficiary or surviving spouse of the surviving spouse
who inherited the account.
(3) Regulations.--The Executive Director shall prescribe
regulations to carry out this subsection.
(g) Small Balance Accounts.--Notwithstanding subsection (b), if a
former participant's account balance is less than an amount that the
Executive Director prescribes by regulation, the Executive Director
shall pay the nonforfeitable account balance to the participant in a
single payment. The Executive Director may prescribe more than 1
balance amount for payment under this subsection based on age of the
former participant.
(h) Loans.--
(1) In general.--A participant or former participant may
apply to the Board for permission to borrow from the
participant or former participant's account an amount not
exceeding the value of that portion of such account which is
attributable to contributions made by the participant or former
participant. Before a loan is issued, the Executive Director
shall provide to the participant or former participant in
writing with appropriate information concerning the cost of the
loan relative to other sources of financing, as well as the
lifetime cost of the loan, including the difference in interest
rates between the funds offered by the Fund and any other
effect of such loan on the participant or former participant's
final account balance.
(2) Special rules.--
(A) In general.--Loans under this subsection shall
be available to all participants and former
participants on a reasonably equivalent basis, and
shall be subject to such other conditions as the Board
may prescribe by regulation, which shall be as
equivalent as practically possible to those provided
for under the Thrift Savings Plan. The restrictions of
section 206(c)(1) shall not apply to loans made under
this subsection.
(B) Limitation based on tax treatment.--A loan may
not be made under this subsection to the extent that
the loan would be treated as a taxable distribution
under section 72(p) of the Internal Revenue Code of
1986.
(C) Spousal protections.--A loan may not be made
under this subsection unless the requirements of
section 109 are satisfied.
(i) Voluntary Distributions.--
(1) In general.--A participant may apply, before becoming a
former participant, to the Board for permission to withdraw an
amount from the participant's account based upon--
(A) the participant having attained age 59\1/2\; or
(B) financial hardship.
(2) Limitations.--A withdrawal under paragraph (1)(B) shall
be available only for an amount not exceeding the value of that
portion of such account which is attributable to contributions
made by the participant. Withdrawals under paragraph (1) shall
be subject to such other limitations or conditions as the
Executive Director may prescribe by regulation, which shall be
as equivalent as practically possible to those provided for
under the Thrift Savings Plan.
(3) Spousal protections.--A withdrawal may not be made
under this subsection unless the requirements of section 109
are satisfied.
(j) Involuntary Distributions.--
(1) In general.--A participant shall receive a distribution
from the Fund if the participant's gross income for a taxable
year exceeds the dollar threshold (as adjusted by the Secretary
of the Treasury) established under section 414(q)(1)(B) of the
Internal Revenue Code of 1986.
(2) Amount of distribution.--The amount of a distribution
under paragraph (1) shall be equal to the sum of such
participant's contributions to the Fund for the taxable year
for which such distribution is required under paragraph (1),
increased by any gains attributable to such contributions, and
decreased by any losses attributable to such contributions, any
early withdrawal penalties, and any expenses associated with
making such distribution.
(3) Process for distribution.--
(A) Notice to participant.--The Executive Director
shall provide notice to a participant subject to a
distribution under paragraph (1) not later than 7 days
after the Executive Director determines that such
participant is subject to such distribution, based on
information regarding participants' gross income
provided by the Secretary of the Treasury.
(B) Method of distribution.--Not later than 30 days
after receiving notice under subparagraph (A), a
participant may elect to direct that a distribution
under paragraph (1) be made--
(i) in the case of an eligible rollover
distribution (as defined in section 402(c) of
the Internal Revenue Code of 1986), to an
eligible retirement plan (as defined in such
section of such code); or
(ii) directly to such participant.
(C) Default election.--In the case of a participant
who fails to make an election within the period
described in subparagraph (B), the Executive Director
shall make the distribution directly to such
participant.
(4) Tax treatment of involuntary distribution.--A
distribution made under paragraph (1) directly to the
participant under subparagraph (B)(ii) or (C) shall be treated
as an early distribution from a qualified retirement plan
pursuant to section 72(t) of the Internal Revenue Code of 1986
to the extent such distribution does not consist of participant
contributions to the Fund.
(k) Treatment as Roth Distributions.--The rules of sections 408(d)
and 408A(d) of the Internal Revenue Code of 1986 shall apply to
distributions from the Fund in the same manner as if such Fund were a
Roth IRA. For purposes of the preceding sentence, contributions made
under section 25F of such Code shall be treated as employer
contributions which were not includible in gross income.
SEC. 107. ACCOUNTS.
(a) In General.--The Executive Director shall establish and
maintain an account for each participant who makes contributions under
section 105(a), or for whom contributions are made under section 25F of
the Internal Revenue Code of 1986, to the Fund.
(b) Account Balances.--The balance in a participant's account is
the excess of--
(1) the sum of--
(A) all contributions made to the Fund by the
participant under section 105(a);
(B) all contributions made to the Fund for the
benefit of the participant by the Secretary of the
Treasury under section 25F of the Internal Revenue Code
of 1986; and
(C) the total amount of the allocations made to and
reduction made in the account pursuant to subsection
(c); over
(2) the amounts paid out of the Fund with respect to such
participant under this title.
(c) Allocation of Earnings and Losses.--Pursuant to regulation
prescribed by the Executive Director, the Executive Director shall
allocate to each account an amount equal to a pro rata share of the net
earnings and net losses from each investment of sums in the Fund
attributed to sums credited to such account, reduced by the appropriate
share of the administrative expenses paid out of the net earnings under
section 101(e) as determined by the Executive Director.
SEC. 108. TAX TREATMENT.
Except as otherwise provided in this Act, for purposes of the
Internal Revenue Code of 1986, rules similar to the rules that apply
with respect to the Thrift Savings Fund (including the rules of section
8440 of title 5, United States Code) shall apply with respect to the
American Worker Retirement Fund.
SEC. 109. SPOUSAL PROTECTIONS; SURVIVOR RIGHTS.
The provisions for spousal protections and court orders under
section 8435 and 8467 of title 5, United States Code, respectively,
shall apply in the same manner to governance of the Fund and to
accounts of participants and former participants as such sections are
applied with respect to the Thrift Savings Plan and its accounts. The
Executive Director shall issue regulations that establish spousal
protections and survivor rights with respect to participants and former
participants that are as equivalent as practically possible to those
provided for under the Thrift Savings Plan pursuant to chapter 84 of
title 5, United States Code.
TITLE II--THE AMERICAN WORKER RETIREMENT PLAN INVESTMENT MANAGEMENT
SYSTEM
SEC. 201. THE AMERICAN WORKER RETIREMENT INVESTMENT BOARD.
(a) Establishment.--There is established in the executive branch of
the Government the American Worker Retirement Investment Board.
(b) Composition.--The Board shall be composed of--
(1) 3 members appointed by the President, of whom 1 shall
be designated by the President as Chair;
(2) 1 member appointed by the President after taking into
consideration the recommendation made by the majority leader of
the Senate in consultation with the minority leader of the
Senate; and
(3) 1 member appointed by the President after taking into
consideration the recommendation made by the Speaker of the
House of Representatives in consultation with the minority
leader of the House of Representatives.
(c) Senate Confirmation.--Appointments under subsection (b) shall
be made with the advice and consent of the Senate.
(d) Qualifications.--
(1) In general.--Members of the Board shall have
substantial experience, training, and expertise in the
management of financial investments and pension benefit plans.
(2) Disqualification.--No member of the Board may be an
officer or employee of the Federal Government.
(e) Terms; Vacancies.--
(1) Terms.--A member of the Board shall be appointed for a
term of 4 years, except that of the members first appointed
under subsection (b)--
(A) the Chair shall be appointed for a term of 4
years;
(B) the members appointed under paragraphs (2) and
(3) of subsection (b) shall be appointed for terms of 3
years; and
(C) the remaining members shall be appointed for
terms of 2 years.
(2) Vacancies.--
(A) In general.--A vacancy on the Board shall be
filled in the manner in which the original appointment
was made and shall be subject to any conditions which
applied with respect to the original appointment.
(B) Term.--An individual chosen to fill a vacancy
shall be appointed for the unexpired term of the member
replaced.
(C) Expiration.--The term of any member shall not
expire before the date on which the member's successor
takes office.
(f) Board Duties.--The Board shall--
(1) establish policies for--
(A) the investment and management of the Fund; and
(B) the administration of title I of this Act;
(2) hire and set the compensation for the Executive
Director;
(3) review the performance of investments made for the
Fund;
(4) review and approve the budget of the Board; and
(5) develop evidence-based financial literacy requirements
for participants in the Fund, including requirements for
financial literacy interventions to occur prior to a
participant--
(A) taking an early withdrawal from their account
at the Fund pursuant to section 106(i); and
(B) taking a loan from such account pursuant to
section 106(h).
(g) Board Authorities; Investment Limitations.--
(1) In general.--The Board may--
(A) adopt, alter, and use a seal;
(B) except as provided in paragraph (2), direct the
Executive Director to take such action as the Board
considers appropriate to carry out the provisions of
this Act and the policies of the Board;
(C) upon the concurring votes of 4 members, remove
the Executive Director from office for good cause
shown; and
(D) take such other action as may be necessary to
carry out the functions of the Board.
(2) Exception.--Except in the case of investments under
section 102(b)(2), the Board may not direct the Executive
Director to invest or to cause to be invested any sums in the
Fund in a specific asset or to dispose of or cause to be
disposed of any specific asset of such Fund.
(h) Board Responsibilities.--The members of the Board shall
discharge their responsibilities under this Act solely in the interest
of participants and beneficiaries.
(i) Budget.--The Board shall prepare and submit to the President,
and, at the same time, to the appropriate committees of Congress, an
annual budget of the expenses and other items relating to the Board
which shall be included as a separate item in the budget required to be
transmitted to the Congress under section 1105 of title 31, United
States Code.
(j) Legislative Recommendations.--The Board may submit to the
President, and, at the same time, shall submit to each House of the
Congress, any legislative recommendations of the Board relating to any
of its functions under this title.
SEC. 202. THE AMERICAN WORKER RETIREMENT PLAN ADVISORY COUNCIL.
(a) Establishment.--The Board shall establish an American Worker
Retirement Plan Advisory Council. The Council shall be composed of 7
members appointed by the Chair of the Board in accordance with
subsection (b).
(b) Appointment.--The Chair shall appoint 7 members of the Council,
of whom--
(1) 3 shall be appointed who have experience managing
investment funds;
(2) 2 shall be appointed who have experience operating
small businesses; and
(3) 2 shall be appointed who have experience providing
investment advice to small businesses and low-income workers.
(c) Head of Council; Terms; Vacancies.--
(1) In general.--The Chair of the Board shall designate 1
member of the Council to serve as head of the Council.
(2) Term.--A member of the Council shall be appointed for a
term of 4 years.
(3) Vacancies.--
(A) In general.--A vacancy in the Council shall be
filled in the manner in which the original appointment
was made and shall be subject to any conditions which
applied with respect to the original appointment.
(B) Term.--An individual chosen to fill a vacancy
shall be appointed for the unexpired term of the member
replaced.
(C) Expiration.--The term of any member shall not
expire before the date on which the member's successor
takes office.
(d) Majority Approval.--The Council shall act by resolution of a
majority of the members.
(e) Duties.--The Council shall--
(1) advise the Board and the Executive Director on matters
relating to--
(A) investment policies for the Fund; and
(B) the administration of title I of this Act; and
(2) perform such other duties as the Board may direct with
respect to investment funds established in accordance with
title I.
SEC. 203. EXECUTIVE DIRECTOR.
(a) In General.--
(1) Appointment.--The Board shall appoint, without regard
to the provisions of law governing appointments in the
competitive service, an Executive Director by action agreed to
by a majority of the members of the Board.
(2) Qualifications.--The Executive Director shall have
substantial experience, training, and expertise in the
management of financial investments and pension benefit plans.
(b) Duties.--The Executive Director shall--
(1) carry out the policies established by the Board;
(2) invest and manage the Fund in accordance with
investment policies and other policies established by the
Board;
(3) administer the provisions of this Act;
(4) prescribe such regulations (other than regulations
relating to fiduciary responsibilities) as may be necessary for
the administration of this Act;
(5) meet from time to time with the Council upon the
request of the Council; and
(6) enforce the financial literary requirements established
by the Board pursuant to 201(f)(5).
(c) Authorities.--The Executive Director may--
(1) prescribe such regulations as may be necessary to carry
out the responsibilities of the Executive Director under this
section, other than regulations relating to fiduciary
responsibilities;
(2) appoint such personnel as may be necessary to carry out
the provisions of this Act;
(3) subject to approval by the Board, procure the services
of experts and consultants under section 3109 of title 5,
United States Code;
(4) make such payments out of sums in the Fund as the
Executive Director determines are necessary to carry out the
provisions of this Act and the policies of the Board;
(5) pay the compensation, per diem, and travel expenses of
individuals appointed under paragraphs (2), (3), and (7) of
this subsection from the Fund;
(6) except as otherwise expressly prohibited by law or the
policies of the Board, delegate any of the Executive Director's
functions to such employees under the Board as the Executive
Director may designate and authorize such successive
redelegations of such functions to such employees under the
Board as the Executive Director may consider to be necessary or
appropriate; and
(7) take such other actions as are appropriate to carry out
the functions of the Executive Director.
SEC. 204. INVESTMENT POLICIES AND SELECTION OF ASSET MANAGERS.
(a) Investment Policies.--The Board shall develop investment
policies under section 201(f)(1) which provide for--
(1) prudent investments suitable for accumulating funds for
payment of retirement income; and
(2) low administrative costs.
(b) Asset Managers.--The Board shall select asset managers to
manage the Fund, subject to the following conditions:
(1) The Board shall select a number of asset managers
necessary to ensure that no asset manager shall be responsible
for managing the greater of--
(A) $500,000,000,000; or
(B) 10 percent of the Fund's assets.
(2) The Board shall limit any contract with an asset
manager to a maximum of 5 years.
SEC. 205. ADMINISTRATIVE PROVISIONS.
(a) Board Meetings.--The Board shall meet--
(1) not less than once during each month; and
(2) at additional times at the call of the Chair.
(b) Board Governance.--
(1) In general.--Except as provided in section
201(g)(1)(C), the Board shall perform the functions and
exercise the powers of the Board on a majority vote of a quorum
of the Board.
(2) Quorum.--3 members of the Board shall constitute a
quorum for the transaction of business.
(3) Effect of vacancy.--A vacancy on the Board shall not
impair the authority of a quorum of the Board to perform the
functions and exercise the power of the Board.
(c) Board Compensation.--
(1) In general.--Each member of the Board shall be
compensated at the daily rate of basic pay for level IV of the
Executive Schedule for each day during which such member is
engaged in performing a function of the Board.
(2) Per diem, etc.--A member of the Board shall be paid
travel, per diem, and other necessary expenses while traveling
away from such member's home or regular place of business in
the performance of the duties of the Board.
(3) Payment from fund.--Payments authorized under this
subsection shall be paid from the Fund as administrative
expenses permitted under section 101(e).
SEC. 206. FIDUCIARY RESPONSIBILITIES; LIABILITY AND PENALTIES.
(a) Definitions.--For the purposes of this section:
(1) Account.--The term ``account'' is not limited by the
definition provided in section 2.
(2) Adequate consideration.--The term ``adequate
consideration'' means--
(A) in the case of a security for which there is a
generally recognized market--
(i) the price of the security prevailing on
a national securities exchange which is
registered under section 6 of the Securities
Exchange Act of 1934 (15 U.S.C. 78f); or
(ii) if the security is not traded on such
a national securities exchange, a price not
less favorable to the Fund than the offering
price for the security as established by the
current bid and asked prices quoted by persons
independent of the issuer and of any party in
interest; and
(B) in the case of an asset other than a security
for which there is a generally recognized market, the
fair market value of the asset as determined in good
faith by a fiduciary or fiduciaries in accordance with
regulations prescribed by the Secretary of Labor.
(3) Fiduciary.--The term ``fiduciary'' means--
(A) a member of the Board;
(B) the Executive Director;
(C) any person who has or exercises discretionary
authority or discretionary control over the management
or disposition of the assets of the Fund; and
(D) any person who, with respect to the Fund, is
described in section 3(21)(A) of the Employee
Retirement Income Security Act of 1974 (29 U.S.C.
1002(21)(A)).
(4) Party in interest.--The term ``party in interest''
includes--
(A) any fiduciary;
(B) any counsel to a person who is a fiduciary,
with respect to the actions of such person as a
fiduciary;
(C) any participant;
(D) any person providing services to the Board and,
with respect to the actions of the Executive Director
as a fiduciary, any person providing services to the
Executive Director;
(E) a labor organization, the members of which are
participants;
(F) a spouse, sibling, ancestor, lineal descendant,
or spouse of a lineal descendant of a person described
in subparagraph (A), (B), or (D);
(G) a corporation, partnership, or trust or estate
of which, or in which, at least 50 percent of--
(i) the combined voting power of all
classes of stock entitled to vote or the total
value of shares of all classes of stock of such
corporation,
(ii) the capital interest or profits
interest of such partnership, or
(iii) the beneficial interest of such trust
or estate,
is owned directly or indirectly or held by a person
described in subparagraph (A), (B), (D), or (E);
(H) an official (including a director) of, or an
individual employed by, a person described in
subparagraph (A), (B), (D), (E), or (G), or an
individual having powers or responsibilities similar to
those of such an official;
(I) a holder (directly or indirectly) of at least
10 percent of the shares in a person described in any
subparagraph referred to in subparagraph (H); and
(J) a person who, directly or indirectly, is at
least a 10 percent partner or joint venturer (measured
in capital or profits) in a person described in any
subparagraph referred to in subparagraph (H).
(b) Duties.--To the extent not inconsistent with the provisions of
this Act and the policies prescribed by the Board, a fiduciary shall
discharge the fiduciary's responsibilities with respect to the Fund or
applicable portion thereof solely in the interest of the participants
and beneficiaries and--
(1) for the exclusive purpose of--
(A) providing benefits to participants and their
beneficiaries; and
(B) defraying reasonable expenses of administering
the Fund or applicable portions thereof;
(2) with the care, skill, prudence, and diligence under the
circumstances then prevailing that a prudent individual acting
in a like capacity and familiar with such matters would use in
the conduct of an enterprise of a like character and with like
objectives; and
(3) to the extent permitted by section 102, by diversifying
the investments of the Fund or applicable portions thereof so
as to minimize the risk of large losses, unless under the
circumstances it is clearly prudent not to do so.
(c) Ownership Jurisdictions.--No fiduciary may maintain the indicia
of ownership of any assets of the Fund outside the jurisdiction of the
district courts of the United States.
(d) Transactions.--
(1) Prohibited transactions.--A fiduciary shall not permit
the Fund to engage in any of the following transactions, except
in exchange for adequate consideration:
(A) A transfer of any assets of the Fund to any
person the fiduciary knows or should know to be a party
in interest or the use of such assets by any such
persons.
(B) An acquisition of any property from or sale of
any property to the Fund by any person the fiduciary
knows or should know to be a party in interest.
(C) A transfer or exchange of services between the
Fund and any person the fiduciary knows or should know
to be a party in interest.
(2) Prohibited actions.--Notwithstanding paragraph (1), a
fiduciary with respect to the Fund shall not--
(A) deal with any assets of the Fund in the
fiduciary's own interest or for the fiduciary's own
account;
(B) act, in an individual capacity or any other
capacity, in any transaction involving the Fund on
behalf of a party, or representing a party, whose
interests are adverse to the interests of the Fund or
the interests of its participants or beneficiaries; or
(C) receive any consideration of the fiduciary's
own personal account from any party dealing with sums
credited to the Fund in connection with a transaction
involving assets of the Fund.
(3) Secretary of labor.--
(A) In general.--The Secretary of Labor may, in
accordance with procedures which the Secretary of Labor
shall by regulation prescribe, grant a conditional or
unconditional exemption of any fiduciary or
transaction, or class of fiduciaries or transactions,
from all or any of the restrictions imposed by
paragraph (2). An exemption granted under this
subparagraph shall not relieve a fiduciary from any
other applicable provision of this Act.
(B) Conditions.--The Secretary of Labor may not
grant an exemption under subparagraph (A) unless the
Secretary of Labor finds that such exemption is--
(i) administratively feasible;
(ii) in the interests of the Fund and its
participants; and
(iii) protective of the rights of
participants and beneficiaries of such Fund.
(C) Notice.--An exemption under subparagraph (A)
may not be granted unless--
(i) notice of the proposed exemption is
published in the Federal Register;
(ii) interested persons are given an
opportunity to present views; and
(iii) the Secretary of Labor affords an
opportunity for a hearing and makes a
determination on the record with respect to the
respective requirements of clauses (i), (ii),
and (iii) of subparagraph (B).
(D) Application of erisa fiduciary exemptions.--
Notwithstanding subparagraph (C), the Secretary of
Labor may determine that an exemption granted for any
class of fiduciaries or transactions under section
408(a) of the Employee Retirement Income Security Act
of 1974 (29 U.S.C. 1108(a)) shall, upon publication of
notice in the Federal Register under this subparagraph,
constitute an exemption from the application of
paragraph (2).
(e) Nonapplication.--This section does not prohibit any fiduciary
from--
(1) receiving any benefit which the fiduciary is entitled
to receive under this Act as a participant, former participant,
or beneficiary;
(2) receiving any reasonable compensation authorized by
this Act for services rendered, or for reimbursement of
expenses properly and actually incurred, in the performance of
the fiduciary's duties under this Act; or
(3) serving as a fiduciary in addition to being an officer,
employee, agent, or other representative of a party in
interest.
(f) Liability.--
(1) In general.--Any fiduciary that breaches the
responsibilities, duties, and obligations set out in subsection
(b) or violates subsection (c) shall be personally liable to
the Fund for any losses to such Fund resulting from each such
breach or violation and to restore to such Fund any profits
made by the fiduciary through use of assets of such Fund by the
fiduciary, and, except as provided in paragraphs (3) and (4),
shall be subject to such other equitable or remedial relief as
a court considers appropriate. A fiduciary may be removed for a
breach referred to in the preceding sentence.
(2) Civil penalties.--The Secretary of Labor may assess a
civil penalty against a party in interest with respect to each
transaction prohibited by subsection (d) which is engaged in by
the party in interest. The amount of such penalty shall be
equal to 5 percent of the amount involved in each such
transaction (as defined in section 4975(f)(4) of the Internal
Revenue Code of 1986) for each year or part thereof during
which the prohibited transaction continues, except that, if the
transaction is not corrected (in such manner as the Secretary
of Labor shall prescribe by regulation consistent with section
4975(f)(5) of such Code) within 90 days after the date the
Secretary of Labor transmits notice to the party in interest
(or such longer period as the Secretary of Labor may permit),
such penalty may be in the amount of not more than 100 percent
of the amount involved.
(3) Special rules.--
(A) In general.--A fiduciary shall not be liable
under paragraph (1)--
(i) with respect to a breach of fiduciary
duty under subsection (b) committed before
becoming a fiduciary or after ceasing to be a
fiduciary;
(ii) for providing for the automatic
enrollment of a participant in accordance with
section 104;
(iii) for enrolling a participant or
beneficiary in a default investment fund or
option in accordance with section 104; or
(iv) for allowing a participant or
beneficiary to invest through the mutual fund
window or for establishing restrictions
applicable to participants' or beneficiaries'
ability to invest through the mutual fund
window.
(B) Joint and several liability.--A fiduciary shall
be jointly and severally liable under paragraph (1) for
a breach of fiduciary duty under subsection (b) by
another fiduciary only if--
(i) the fiduciary participates knowingly
in, or knowingly undertakes to conceal, an act
or omission of such other fiduciary, knowing
such act or omission is such a breach;
(ii) by the fiduciary's failure to comply
with subsection (b) in the administration of
the fiduciary's specific responsibilities which
give rise to the fiduciary status, the
fiduciary has enabled such other fiduciary to
commit such a breach; or
(iii) the fiduciary has knowledge of a
breach by such other fiduciary, unless the
fiduciary makes reasonable efforts under the
circumstances to remedy the breach.
(4) Allocation of duties.--The Secretary of Labor shall
prescribe, in regulations, procedures for allocating fiduciary
responsibilities among fiduciaries, including asset managers.
Any fiduciary who, pursuant to such procedures, allocates to
any person any fiduciary responsibility shall not be liable for
an act or omission of such person unless such fiduciary
violated subsection (b) with respect to the allocation, with
respect to the implementation of the procedures prescribed by
the Secretary of Labor.
(5) Other civil actions.--
(A) In general.--No civil action may be maintained
against any fiduciary with respect to the
responsibilities, liabilities, and penalties authorized
or provided for in this section except in accordance
with subparagraphs (B) and (C).
(B) Actions permitted.--A civil action may be
brought in the district courts of the United States--
(i) by the Secretary of Labor against any
fiduciary other than a member of the Board or
the Executive Director of the Board--
(I) to determine and enforce a
liability under paragraph (1);
(II) to collect any civil penalty
under paragraph (2);
(III) to enjoin any act or practice
which violates any provision of
subsection (b) or (c);
(IV) to obtain any appropriate
equitable relief to redress a violation
of any such provision; or
(V) to enjoin any act or practice
which violates subsection (g)(2) or (h)
of section 201;
(ii) by any participant, beneficiary, or
fiduciary--
(I) to enjoin any act or practice
which violates any provision of
subsection (b) or (c);
(II) to obtain any other
appropriate equitable relief to redress
a violation of any such provision; or
(III) to enjoin any act or practice
which violates subsection (g)(2) or (h)
of section 201; or
(iii) by any participant or beneficiary--
(I) to recover benefits of such
participant or beneficiary under the
provisions of title I, to enforce any
right of such participant or
beneficiary under such provisions, or
to clarify any such right to future
benefits under such provisions; or
(II) to enforce a claim otherwise
cognizable under sections 1346(b) and
2671 through 2680 of title 28, United
States Code, except that the remedy
against the United States provided by
sections 1346(b) and 2672 of such title
28 for damages for injury or loss of
property caused by the negligent or
wrongful act or omission of any
fiduciary while acting within the scope
of the fiduciary's duties or employment
shall be exclusive of any other civil
action or proceeding by the participant
or beneficiary for recovery of money by
reason of the same subject matter
against the fiduciary (or the estate of
such fiduciary) whose act or omission
gave rise to such action or proceeding,
whether or not such action or
proceeding is based on an alleged
violation of subsection (b) or (c).
(C) Representation.--
(i) In general.--In all civil actions under
subparagraph (B)(i), attorneys appointed by the
Secretary may represent the Secretary (except
as provided in section 518(a) of title 28,
United States Code), however, all such
litigation shall be subject to the direction
and control of the Attorney General.
(ii) Attorney general.--The Attorney
General shall defend any civil action or
proceeding brought in any court against any
fiduciary referred to in subparagraph
(B)(iii)(II) (or the estate of such fiduciary)
for any such injury. Any fiduciary against whom
such a civil action or proceeding is brought
shall deliver, within such time after date of
service or knowledge of service as determined
by the Attorney General, all process served
upon such fiduciary (or an attested copy
thereof) to the Executive Director, who shall
promptly furnish copies of the pleading and
process to the Attorney General and the United
States Attorney for the district wherein the
action or proceeding is brought.
(iii) Certification of scope of duty.--Upon
certification by the Attorney General that a
fiduciary described in subparagraph
(B)(iii)(II) was acting in the scope of such
fiduciary's duties or employment as a fiduciary
at the time of the occurrence or omission out
of which the action arose, any such civil
action or proceeding commenced in the State
court shall be--
(I) removed without bond at any
time before trial by the Attorney
General to the district court of the
United States for the district and
division in which it is pending; and
(II) deemed a tort action brought
against the United States under the
provisions of title 28, United States
Code, and all references thereto.
(iv) Compromise or settlement.--The
Attorney General may compromise or settle any
claim asserted in such civil action or
proceeding in the manner provided in section
2677 of title 28, United States Code, and with
the same effect. To the extent section 2672 of
title 28, United States Code, provides that
persons other than the Attorney General or the
Attorney General's designee may compromise and
settle claims, and that payments of such claims
may be made from agency appropriations, such
provisions shall not apply to claims based upon
an alleged violation of subsection (b) or (c).
(v) Certain claims.--For the purposes of
subparagraph (B)(iii)(II), the provisions of
section 2680(h) of title 28, United States Code
shall not apply to any claim based upon an
alleged violation of subsection (b) or (c).
(vi) Payment of awards.--Notwithstanding
sections 1346(b) and 2671 through 2680 of title
28, United States Code, whenever an award,
compromise, or settlement is made under such
section upon any claim based upon an alleged
violation of subsection (b) or (c), payment of
such award, compromise, or settlement shall be
made to the appropriate account within the
Fund, or where there is no such appropriate
account, to the participant or beneficiary
bringing the claim.
(vii) Definition.--For purposes of
subparagraph (B)(iii)(II), the term
``fiduciary'' includes only the members of the
Board and the Board's Executive Director.
(D) Limitation on monetary relief.--Any relief
awarded against a member of the Board or the Board's
Executive Director in a civil action authorized by
subparagraph (B) may not include any monetary damages
or any other recovery of money.
(E) Time for commencement of action.--An action may
not be commenced under clause (i) or (ii) of
subparagraph (B) with respect to a fiduciary's breach
of any responsibility, duty, or obligation under
subsection (b) or a violation of subsection (c) after
the earlier of--
(i) 6 years after--
(I) the date of the last action
which constituted a part of the breach
or violation; or
(II) in the case of an omission,
the latest date on which the fiduciary
could have cured the breach or
violation; or
(ii) 3 years after the earliest date on
which the plaintiff had actual knowledge of the
breach or violation, except that, in the case
of fraud or concealment, such action may be
commenced not later than 6 years after the date
of discovery of such breach or violation.
(F) Jurisdiction.--
(i) In general.--The district courts of the
United States shall have exclusive jurisdiction
of civil actions under this subsection.
(ii) Venue.--An action under this
subsection may be brought in the District Court
of the United States for the District of
Columbia or a district court of the United
States in the district where the breach alleged
in the complaint or petition filed in the
action took place or in the district where a
defendant resides or may be found. Process may
be served in any other district where a
defendant resides or may be found.
(G) Other rules.--
(i) In general.--A copy of the complaint or
petition filed in any action brought under this
subsection (other than by the Secretary of
Labor) shall be served on the Executive
Director, the Secretary of Labor, and the
Secretary of the Treasury by certified mail.
(ii) Intervention.--Any officer referred to
in clause (i) shall have the right in the
officer's discretion to intervene in any
action. If the Secretary of Labor brings an
action under subparagraph (B)(i) on behalf of a
participant or beneficiary, the Secretary of
Labor shall notify the Executive Director and
the Secretary of the Treasury.
(g) Regulations.--The Secretary of Labor may prescribe regulations
to carry out this section.
(h) Audits.--
(1) In general.--The Secretary of Labor shall establish a
program to carry out audits to determine the level of
compliance with the requirements of this section relating to
fiduciary responsibilities and prohibited activities of
fiduciaries.
(2) Delegation.--An audit under this subsection may be
conducted by the Secretary of Labor, by contract with a
qualified non-governmental organization, or in cooperation with
the Comptroller General of the United States, as the Secretary
of Labor considers appropriate.
SEC. 207. BONDING.
(a) Requirements.--
(1) In general.--Except as provided in paragraph (2), each
fiduciary and each person who handles funds or property of the
Fund shall be bonded as provided in this section.
(2) Exceptions.--
(A) In general.--Bond shall not be required of a
fiduciary (or of any officer or employee of such
fiduciary) if such fiduciary--
(i) is a corporation organized and doing
business under the laws of the United States or
of any State;
(ii) is authorized under such laws to
exercise trust powers or to conduct an
insurance business;
(iii) is subject to supervision or
examination by Federal or State authority; and
(iv) has at all times a combined capital
and surplus in excess of such minimum amount
(not less than $1,000,000) as the Secretary of
Labor prescribes in regulations.
(B) Limitation.--If--
(i) a bank or other financial institution
would, but for this subparagraph, not be
required to be bonded under this section by
reason of the application of the exception
provided in subparagraph (A),
(ii) the bank or financial institution is
authorized to exercise trust powers, and
(iii) the deposits of the bank or financial
institution are not insured by the Federal
Deposit Insurance Corporation,
such exception shall apply to such bank or financial
institution only if the bank or institution meets
bonding requirements under State law which the
Secretary of Labor determines are at least equivalent
to those imposed on banks by Federal law.
(b) Regulations.--
(1) In general.--The Secretary of Labor shall prescribe the
amount of a bond under this section at the beginning of each
fiscal year. Such amount shall not be less than 10 percent of
the amount of funds handled, except that in no case shall such
bond be less than $1,000 or more than $500,000, or such higher
amount as the Secretary of Labor, after due notice and
opportunity for hearing to all interested parties, and other
consideration of the record, may prescribe.
(2) Amount of funds handled.--For the purpose of
prescribing the amount of a bond under paragraph (1), the
amount of funds handled shall be determined by reference to the
amount of the funds handled by the person, group, or class to
be covered by such bond or by their predecessor or
predecessors, if any, during the preceding fiscal year, or to
the amount of funds to be handled during the current fiscal
year by such person, group, or class, estimated as provided in
regulations prescribed by the Secretary of Labor.
(c) Terms.--A bond required by subsection (a)--
(1) shall include such terms and conditions as the
Secretary of Labor considers necessary to protect the Fund
against loss by reason of acts of fraud or dishonesty on the
part of the bonded person directly or through connivance with
others;
(2) shall have as surety thereon a corporate surety company
which is an acceptable surety on Federal bonds under authority
granted by the Secretary of the Treasury pursuant to sections
9304 through 9308 of title 31, United States Code; and
(3) shall be in a form or of a type approved by the
Secretary of Labor, including individual bonds or schedule or
blanket forms of bonds which cover a group or class.
(d) Custody of Funds.--
(1) In general.--It shall be unlawful for any person to
whom subsection (a) applies, to receive, handle, disburse, or
otherwise exercise custody or control of any of the funds or
other property of the Fund without being bonded as required by
this section.
(2) Fiduciaries.--It shall be unlawful for any fiduciary,
or any other person having authority to direct the performance
of functions described in paragraph (1), to permit any such
function to be performed by any person to whom subsection (a)
applies unless such person has met the requirements of such
subsection.
(e) Exemption.--Notwithstanding any other provision of law, any
person who is required to be bonded as provided in subsection (a) shall
be exempt from any other provision of law which would, but for this
subsection, require such person to be bonded for the handling of the
funds or other property of the Fund.
(f) Regulations.--The Secretary of Labor shall prescribe such
regulations as may be necessary to carry out the provisions of this
section, including exempting a person or class of persons from the
requirements of this section.
SEC. 208. INVESTIGATIVE AUTHORITY.
Any authority available to the Secretary of Labor under section 504
of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1134)
is hereby made available to the Secretary of Labor, and any officer
designated by the Secretary of Labor, to determine whether any person
has violated, or is about to violate, any provision of section 206 or
207.
SEC. 209. EXCULPATORY PROVISIONS; INSURANCE.
(a) Exculpatory Provisions Void.--Any provision in an agreement or
instrument which purports to relieve a fiduciary from responsibility or
liability for any responsibility, obligation, or duty under this title
shall be void.
(b) Insurance.--In accordance with section 101(e), the sums
credited to the Fund shall be available to pay administrative expenses
which may include, at the discretion of the Executive Director, the
purchase of insurance to cover potential liability of persons who serve
in a fiduciary capacity with respect to the Fund, without regard to
whether a policy of insurance permits recourse by the insurer against
the fiduciary in the case of a breach of a fiduciary obligation.
SEC. 210. SUBPOENA AUTHORITY.
(a) Subpoena Authority.--In order to carry out the responsibilities
specified in this Act, the Executive Director may issue subpoenas
commanding each person to whom the subpoena is directed to produce
designated books, documents, records, electronically stored
information, or tangible materials in the possession or control of that
individual.
(b) Liability.--Notwithstanding any Federal, State, or local law,
any person, including officers, agents, and employees, receiving a
subpoena under this section, who complies in good faith with the
subpoena and thus produces the materials sought, shall not be liable in
any court of any State or the United States to any individual, domestic
or foreign corporation or upon a partnership or other unincorporated
association for such production.
(c) Enforcement.--When a person fails to obey a subpoena issued
under this section, the district court of the United States for the
district in which the investigation is conducted or in which the person
failing to obey is found, shall on proper application issue an order
directing that person to comply with the subpoena. The court may punish
as contempt any disobedience of its order.
(d) Regulations.--The Executive Director shall prescribe
regulations to carry out subsection (a).
TITLE III--GOVERNMENT MATCH TAX CREDIT
SEC. 301. GOVERNMENT MATCH TAX CREDIT.
(a) Credit.--Subpart A of part IV of subchapter A of chapter 1 of
the Internal Revenue Code of 1986 is amended by inserting after section
25E the following new section:
``SEC. 25F. GOVERNMENT MATCH TAX CREDIT.
``(a) Allowance of Credit.--In the case of an eligible individual,
there shall be allowed as a credit for the taxable year an amount equal
to the sum of--
``(1) 1 percent of the eligible individual's gross income,
plus
``(2) the applicable percentage of the participant's
contributions to the American Worker Retirement Fund during the
taxable year.
``(b) Applicable Percentage.--For purposes of this section, the
applicable percentage is--
``(1) 100 percent of so much of the contributions to the
American Worker Retirement Fund as do not exceed 3 percent of
gross income,
``(2) 50 percent of so much of such contributions as
exceeds 3 percent but does not exceed 5 percent of gross
income, and
``(3) 0 percent of so much of such contributions as exceeds
5 percent of gross income.
``(c) Limitation on Amount of Credit.--
``(1) In general.--The credit allowed under subsection (a)
with respect to any eligible individual for a taxable year
shall not exceed 5 percent of the phaseout amount with respect
to such individual for such taxable year.
``(2) Phaseout of credit limit.--The limit determined under
paragraph (1) for a taxable year shall be reduced by $75 for
each $1,000 or portion thereof by which the eligible
individual's gross income exceeds the phaseout amount.
``(3) Phaseout amount.--For purposes of this subsection,
the phaseout amount is--
``(A) in the case of a joint return, an amount
equal to 200 percent of the applicable median income
for the taxable year,
``(B) in the case of a head of household (as
defined in section 2(b)), \3/4\ of the amount
determined under subparagraph (A), and
``(C) in any other case, \1/2\ of the amount
determined under subparagraph (A).
``(4) Applicable median income.--For purposes of this
subsection, the term `applicable median income' means, with
respect to any taxable year, an amount equal to the most recent
Median Personal Income for the population 15 and over in the
United States, as published in the United States Census
Bureau's Current Population Survey Tables for Personal Income
before the beginning of the calendar year in which such taxable
year begins.
``(d) Eligible Individual.--For purposes of this section, the term
`eligible individual' has the meaning given the term `participant' by
section 2(13) of the Retirement Savings for Americans Act of 2025.
``(e) American Worker Retirement Fund.--For purposes of this
section, the American Worker Retirement Fund is the Fund created under
section 101(a) of the Retirement Savings for Americans Act of 2025.
``(f) Deposit Into Participant's Account.--
``(1) In general.--Any amount allowed as a credit under
subsection (a)--
``(A) shall not be allowed as a credit against any
tax imposed by this subtitle, and
``(B) shall be treated as an overpayment under
section 6401(b).
``(2) Payment.--The Secretary shall contribute the amount
treated as an overpayment under paragraph (1) to the eligible
individual's account with the American Worker Retirement Fund.
``(3) Exception from reduction or offset.--The rules of
section 6433(f)(5) shall apply to any payment to which this
subsection applies.
``(g) Advance Payment.--
``(1) Regulations.--The Secretary shall prescribe
regulations to provide that the payments made under subsection
(f) are made as concurrently as is reasonably possible with
contributions by a taxpayer to the American Worker Retirement
Fund. Such regulations shall provide that, for purposes of such
payments, the credit under subsection (a) may be determined on
the basis of the eligible individual's gross income for the
preceding taxable year.
``(2) Excess payments.--If the aggregate amount of payments
under subsection (f) with respect to an eligible individual for
any taxable year exceeds the amount of the credit allowed under
subsection (a) to such individual for such taxable year, the
tax imposed by this chapter for such taxable year shall be
increased by the amount of such excess. Any failure to so
increase the tax shall be treated as arising out of a
mathematical or clerical error and assessed according to
section 6213(b)(1).
``(h) Forfeit of Amounts.--
``(1) In general.--If any contribution described in
subsection (a) does not remain in the American Worker
Retirement Fund for at least 6 months after such contribution
is made, the amount of the credit under this section
attributable to such contribution shall be forfeited as
provided in paragraph (2).
``(2) Treatment of forfeited amounts.--In the case of any
contribution to which paragraph (1) applies--
``(A) the Executive Director of the American Worker
Retirement Fund, as appointed under section 203 of the
Retirement Savings for Americans Act of 2025, shall
make a distribution from the individual's account in an
amount equal to such contribution to the Secretary for
deposit into the general fund of the Treasury, and
``(B) in the case of any earnings on such
contribution, such earnings shall be distributed by
such Executive Director from the individual's account
and shall be available to the Executive Director,
without need of further appropriation, for
administrative expenses described in section 101(e) of
such Act.
``(3) Forfeited amounts not includible in gross income.--
Any distribution made under paragraph (2) shall not be
includible in the gross income of the individual.
``(i) Coordination With Savers' Credit.--Any contribution by an
individual to the American Worker Retirement Fund for a taxable year
shall not be treated as a qualified retirement savings contribution of
such individual for purposes of section 25B.''.
(b) Clerical Amendments.--The table of sections for subpart A of
part IV of subchapter A of chapter 1 of the Internal Revenue Code of
1986 is amended by inserting after the item relating to section 26E the
following new item:
``Sec. 25F. Government Match Tax Credit.''.
(c) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2024.
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