[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[S. 2335 Introduced in Senate (IS)]
<DOC>
119th CONGRESS
1st Session
S. 2335
To require every employer to provide to their employees a retirement
program with benefits equivalent to the Federal Employees Retirement
System or to elect for their employees to participate in the Federal
Employees Retirement System, and for other purposes.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
July 17, 2025
Mr. Sanders introduced the following bill; which was read twice and
referred to the Committee on Finance
_______________________________________________________________________
A BILL
To require every employer to provide to their employees a retirement
program with benefits equivalent to the Federal Employees Retirement
System or to elect for their employees to participate in the Federal
Employees Retirement System, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Pensions for All Act''.
SEC. 2. DEFINITIONS.
In this Act:
(1) Covered retirement program.--The term ``covered
retirement program'' means a retirement program other than FERS
that the Secretary determines provides benefits that are
comparable to the benefits available under FERS to an employee
(as that term is defined under section 8401 of title 5, United
States Code, on the day before the date of enactment of this
Act).
(2) Employee; employer.--The terms ``employer'' and
``employee'' have the meanings given such terms in section 3 of
the Employee Retirement Income Security Act of 1974 (29 U.S.C.
1002).
(3) FERS.--The term ``FERS'' means the Federal Employees
Retirement System under chapter 84 of title 5, United States
Code.
(4) Secretary.--The term ``Secretary'' means the Secretary
of Labor.
SEC. 3. REQUIREMENT TO PROVIDE A RETIREMENT PLAN EQUIVALENT TO FERS OR
TO PARTICIPATE IN FERS.
(a) Initial Coverage.--
(1) Employers.--Each employer shall--
(A) make available to each employee employed by the
employer a covered retirement program; or
(B) notify the Secretary that the employees of the
employer will participate in FERS.
(2) Self-employed enrollment.--Each self-employed
individual shall--
(A) be enrolled in a covered retirement program; or
(B) notify the Secretary that the self-employed
individual will participate in FERS.
(b) Subsequent Coverage Election.--
(1) Options for employers.--At a frequency determined by
the Secretary, in coordination with the Director of the Office
of Personnel Management, that is not less than annually, an
employer that has in effect a covered retirement program for
the employees of the employer or with respect to whom the
employees of the employer are participating in FERS may elect
to--
(A) in the case of an employer that has in effect a
covered retirement program--
(i) cease making contributions to the
covered retirement program for such employees;
and
(ii) have each employee employed by the
employer participate in FERS; or
(B) in the case of an employer with respect to whom
the employees of the employer are participating in
FERS--
(i) have the employees cease participating
in FERS; and
(ii) make available to each employee
employed by the employer a covered retirement
program.
(2) Options for self-employed individuals.--At a frequency
determined by the Secretary, in coordination with the Director
of the Office of Personnel Management, that is not less than
annually, a self-employed individual who is enrolled in a
covered retirement program or is participating in FERS may
elect to--
(A) in the case of a self-employed individual who
is enrolled in a covered retirement program--
(i) cease making contributions to the
covered retirement program; and
(ii) participate in FERS; or
(B) in the case of a self-employed individual who
is participating in FERS--
(i) cease participating in FERS; and
(ii) enroll in a covered retirement
program.
SEC. 4. PARTICIPATION OF NON-FEDERAL EMPLOYEES AND SELF-EMPLOYED
INDIVIDUALS IN FERS.
(a) Definitions.--Section 8401 of title 5, United States Code, is
amended--
(1) by striking paragraph (2) and inserting the following:
``(2) the term `basic pay'--
``(A) except as provided in subparagraph (B), has
the meaning given such term by section 8331(3); and
``(B) with respect to a covered self-employed
individual, means the annual income of the covered
self-employed individual that is attributable to the
activities of the individual as a covered self-employed
individual;'';
(2) in paragraph (11)--
(A) in subparagraph (B), by striking ``and'' at the
end;
(B) in subparagraph (C), by adding ``and'' at the
end;
(C) by inserting after subparagraph (C) the
following:
``(D) an individual who is--
``(i) an covered non-Federal employee; or
``(ii) a covered self-employed
individual;''; and
(D) in the matter following subparagraph (C), by
striking ``civilian service'' and inserting ``service
in a position described in subparagraph (A), (B), (C),
or (D)'';
(3) in paragraph (12), by striking ``civilian'';
(4) in paragraph (31), in the matter following subparagraph
(C), by striking ``civilian service'' and inserting ``service
as an employee or Member'';
(5) in paragraph (38)(B), by striking ``and'' at the end;
(6) in paragraph (39), by striking the period at the end
and inserting a semicolon; and
(7) by adding at the end the following:
``(40) the term `covered non-Federal employer' means an
employer that is not a department, agency, or other
instrumentality of the Federal Government and does not have in
effect for all employees of the employer a retirement plan that
the Secretary of Labor has determined provides benefits that
are comparable to the benefits provided under the retirement
program under this chapter;
``(41) the term `covered non-Federal employee' means an
individual employed by a covered non-Federal employer; and
``(42) the term `covered self-employed individual' means a
self-employed individual who is not enrolled in a retirement
plan other than the Federal Employees Retirement System that
the Secretary of Labor has determined provides benefits that
are comparable to the benefits provided under the retirement
program under this chapter.''.
(b) Eligibility for Annuity.--Section 8410 of title 5, United
States Code, is amended by striking ``civilian service'' and inserting
``service as an employee or a Member''.
(c) Creditable Service.--Section 8411(b) of title 5, United States
Code, is amended--
(1) in paragraph (1), by inserting ``subject to paragraphs
(7) and (8),'' before ``employment'';
(2) in paragraph (5), by striking ``and'' at the end;
(3) in paragraph (6), by striking the period at the end and
inserting a semicolon; and
(4) by inserting after paragraph (6) the following:
``(7) a period of service as a covered non-Federal employee
performed after the date of enactment of this paragraph; and
``(8) a period during which an individual is a covered
self-employed individual that occurs after the date of
enactment of this paragraph.'';
(d) Phased Retirement.--Section 8412a(c)(5)(A) of title 5, United
States Code, is amended by striking ``creditable civilian service'' and
inserting ``other service that is creditable under this chapter''.
(e) Employee Contributions.--Section 8422 of title 5, United States
Code, is amended--
(1) in subsection (a)--
(A) in paragraph (1), by striking ``The employing
agency'' and inserting ``Subject to paragraph (4), the
employing agency'';
(B) in paragraph (3), by striking ``civilian'' each
place it appears; and
(C) by adding at the end the following:
``(4)(A) A covered non-Federal employer shall deduct and withhold
from the basic pay of each covered non-Federal employee of the covered
non-Federal employer the percentage of basic pay that would be deducted
and withheld from basic pay if the covered non-Federal employee were an
employee of the Federal Government, as determined in accordance with
paragraphs (2) and (3).
``(B) For a covered self-employed individual, an amount equal to
the percentage of basic pay of the covered self-employed individual
that would be deducted and withheld from basic pay if the covered non-
Federal employee were an employee of the Federal Government, as
determined in accordance with paragraphs (2) and (3), shall be deemed
to be deducted and withheld from the basic pay of the covered self-
employed individual for purposes of subsection (c), and the covered
self-employed individual shall deposit such amount in the Treasury of
the United States in accordance with such subsection.''; and
(2) in subsection (e)(1)(B), by striking ``civilian'' each
place it appears.
(f) Employer Contributions.--Section 8423(a) of title 5, United
States Code, is amended--
(1) in paragraph (1), in the matter preceding subparagraph
(A), by inserting ``, and, subject to paragraph (4), each
covered non-Federal employer and each covered self-employed
individual,'' after ``section 8422(a)'';
(2) by redesignating paragraph (4) as paragraph (5); and
(3) by inserting after paragraph (3) the following:
``(4)(A) In this paragraph--
``(i) the term `additional employer percentage', with
respect to a covered non-Federal employer, means 50 percent of
the percentage obtained by dividing--
``(I) the amount of the annual revenue of the
covered non-Federal employer that is in excess of
$25,000,000; by
``(II) $75,000,000; and
``(ii) the term `additional self-employed percentage', with
respect to a covered self-employed individual, means 50 percent
of the percentage obtained by dividing--
``(I) the amount of the basic pay of the covered
self-employed individual that is in excess of $75,000;
by
``(II) $50,000.
``(B) Subject to subparagraphs (D) and (E), the amount contributed
to the Fund under paragraph (1) by a covered non-Federal employer shall
be reduced as follows:
``(i) For a covered non-Federal employer with annual
revenue of not more than $25,000,000, the amount required to be
contributed shall be the amount equal to 50 percent of the
otherwise applicable amount.
``(ii) For a covered non-Federal employer with annual
revenue of more than $25,000,000 and not more than
$100,000,000, the amount required to be contributed shall be
the sum of--
``(I) the amount equal to 50 percent of the
otherwise applicable amount; and
``(II) the amount equal to the additional employer
percentage of the otherwise applicable amount.
``(C) Subject to subparagraph (E), the amount contributed to the
Fund under paragraph (1) by a covered self-employed individual shall be
reduced as follows:
``(i) For a covered self-employed individual with basic pay
of not more than $75,000, the amount required to be contributed
shall be the amount equal to 50 percent of the otherwise
applicable amount.
``(ii) For a covered self-employed individual with basic
pay of more than $75,000 and not more than $125,000, the amount
required to be contributed shall be the sum of--
``(I) the amount equal to 50 percent of the
otherwise applicable amount; and
``(II) the amount equal to the additional self-
employed percentage of the otherwise applicable amount.
``(D) The amount of the reduction under subparagraph (B) with
respect to a covered non-Federal employer shall be reduced or
eliminated based on the proportion of highly compensated employees of
the covered non-Federal employer, in accordance with regulations
promulgated by the Secretary of Labor.
``(E)(i) A covered non-Federal employer may elect to have both the
reduction under subparagraph (B) of this paragraph and the reduction
under section 8432(c)(2)(B) not apply for any year.
``(ii) A covered self-employed individual may elect to have the
reduction under subparagraph (C) of this paragraph and the reduction
under section 8432(c)(2)(C) not apply for any year.''.
(g) Thrift Savings Plan.--
(1) Transfers treated as a separation.--Section 8431(a) of
title 5, United States Code, is amended by inserting ``or
employment at a covered non-Federal employer'' after
``Government employment''.
(2) Contributions.--Section 8432 of title 5, United States
Code, is amended--
(A) in subsection (a)--
(i) in paragraph (1), by striking ``An
employee or Member'' and inserting ``Subject to
paragraph (4), an employee or Member''; and
(ii) by adding at the end the following:
``(4) For a covered self-employed individual, the covered self-
employed individual may contribute to the Thrift Savings Fund in such
manner, and at such frequency, as the Secretary of Labor shall
establish.'';
(B) in subsection (c)--
(i) in paragraph (1)--
(I) in subparagraph (A), by
inserting ``and each covered non-
Federal employer'' after ``the
employing agency'';
(II) in subparagraph (C)(iii), by
striking ``civilian''; and
(III) by adding at the end the
following:
``(D)(i) A covered self-employed individual shall make
contributions to the Thrift Savings Fund for the benefit of the self-
employed individual in the same amount as would be contributed by a
covered non-Federal employer if the self-employed individual were an
employee of the covered non-Federal employer.
``(ii) The Secretary of Labor shall establish the manner and
frequency with which a covered self-employed individual shall make
contributions to the Thrift Savings Fund under this subparagraph.'';
(ii) in paragraph (2)--
(I) in subparagraph (A)--
(aa) by inserting ``, and,
subject to paragraph (4), each
covered non-Federal employer
and covered self-employed
individual,'' after ``the
employing agency''; and
(bb) by striking
``employing agency's
contribution'' and inserting
``contribution of the employing
agency, covered non-Federal
employer''; and
(II) in subparagraph (B), in the
matter preceding clause (i), by
inserting ``or, subject to paragraph
(4), covered non-Federal employer, or
covered self-employed individual''
after ``employing agency''; and
(iii) by adding at the end the following:
``(4)(A) In this paragraph--
``(i) the term `additional employer percentage', with
respect to a covered non-Federal employer, means 50 percent of
the percentage obtained by dividing--
``(I) the amount of the annual revenue of the
covered non-Federal employer that is in excess of
$25,000,000; by
``(II) $75,000,000; and
``(ii) the term `additional self-employed percentage', with
respect to a covered self-employed individual, means 50 percent
of the percentage obtained by dividing--
``(I) the amount of the basic pay of the covered
self-employed individual that is in excess of $75,000;
by
``(II) $50,000.
``(B) Subject to subparagraphs (D) and (E), the amount contributed
to the Thrift Savings Fund under paragraphs (1) and (2) by a covered
non-Federal employer shall be reduced as follows:
``(i) For a covered non-Federal employer with annual
revenue of not more than $25,000,000, the amount required to be
contributed shall be the amount equal to 50 percent of the
otherwise applicable amount.
``(ii) For a covered non-Federal employer with annual
revenue of more than $25,000,000 and not more than
$100,000,000, the amount required to be contributed shall be
the sum of--
``(I) the amount equal to 50 percent of the
otherwise applicable amount; and
``(II) the amount equal to the additional employer
percentage of the otherwise applicable amount.
``(C) Subject to subparagraph (E), the amount contributed to the
Thrift Savings Fund under paragraphs (1) and (2) by a covered self-
employed individual shall be reduced as follows:
``(i) For a covered self-employed individual with basic pay
of not more than $75,000, the amount required to be contributed
shall be the amount equal to 50 percent of the otherwise
applicable amount.
``(ii) For a covered self-employed individual with basic
pay of more than $75,000 and not more than $125,000, the amount
required to be contributed shall be the sum of--
``(I) the amount equal to 50 percent of the
otherwise applicable amount; and
``(II) the amount equal to the additional self-
employed percentage of the otherwise applicable amount.
``(D) The amount of the reduction under subparagraph (B) with
respect to a covered non-Federal employer shall be reduced or
eliminated based on the proportion of highly compensated employees of
the covered non-Federal employer, in accordance with regulations
promulgated by the Secretary of Labor.
``(E)(i) A covered non-Federal employer may elect to have both the
reduction under subparagraph (B) of this paragraph and the reduction
under section 8423(a)(4)(B) not apply for any year.
``(ii) A covered self-employed individual may elect to have the
reduction under subparagraph (C) of this subparagraph and the reduction
under section 8423(a)(4)(C) not apply for any year.''.
``(5)(A) The Secretary of Labor shall, at the frequency determined
appropriate by the Secretary, compute the amount of the reduction in
contributions by--
``(i) a covered non-Federal employer under paragraph (4)
with respect to each covered non-Federal employee of the
covered non-Federal employer; and
``(ii) a covered self-employed individual under paragraph
(4) with respect to the covered self-employed individual.
``(B) The Secretary of the Treasury shall, in such installments as
the Secretary determines appropriate, credit to the Thrift Savings
Fund--
``(i) for the benefit of each covered non-Federal employee
for whom the contributions by the covered non-Federal employer
employing the covered non-Federal employee are reduced under
paragraph (4) an amount equal to the amount of the reduction;
and
``(ii) for the benefit of each covered self-employed
individual for whom the contributions by the covered self-
employed individual are reduced under paragraph (4) an amount
equal to the amount of the reduction.'';
(C) in subsection (e)--
(i) by inserting ``(1)'' before ``The sums
required''; and
(ii) by adding at the end the following:
``(2) The sums required to be contributed to the Thrift Savings
Fund by a covered non-Federal employer or covered self-employed
individual under subsection (c) for the benefit of a covered non-
Federal employee or covered self-employed individual, respectively,
shall be paid by the covered non-Federal employer or covered self-
employed individual, respectively, in accordance with such procedures
as the Secretary of the Treasury may, in consultation with the
Executive Director, prescribe in regulations.'';
(D) in subsection (g)--
(i) by inserting ``or employment at a
covered non-Federal employer'' after
``Government employment'' each place it
appears;
(ii) by striking ``civilian service'' each
place it appears and inserting ``creditable
service as an employee or Member''; and
(iii) in paragraph (5), by inserting ``or
by a covered non-Federal employer'' after ``the
Government''; and
(E) in subsection (i)(1)(B), by striking ``civilian
service'' and inserting ``service as an employee''.
(3) Payment of lost earnings.--Section 8432a of title 5,
United States Code, is amended--
(A) by inserting ``or covered non-Federal
employer'' after ``employing agency'' each place it
appears, except the second place it appears in
subsection (c);
(B) in subsection (a)--
(i) in paragraph (1), by inserting ``or
covered non-Federal employer'' after ``such
agency''; and
(ii) in paragraph (2)--
(I) in the matter preceding
subparagraph (A), by striking ``an
employing agency's failure'' and
inserting ``a failure by an employing
agency or covered non-Federal
employer''; and
(II) in subparagraph (A), by
inserting ``or covered non-Federal
employer'' after ``the agency'';
(C) in subsection (b)(3), by inserting ``,
respectively,'' before ``errors''; and
(D) in subsection (c), in the first sentence, by
inserting ``or paid by the covered non-Federal employer
in accordance with such procedures as the Secretary of
the Treasury may, in consultation with the Executive
Director, prescribe in regulations'' after
``establishment''.
(4) Contributions of persons who perform military
service.--Section 8432b of title 5, United States Code, is
amended--
(A) by inserting ``or covered non-Federal
employer'' after ``employing agency'' each place it
appears;
(B) in subsection (g)(1), by inserting ``or covered
non-Federal employer'' after ``the agency''; and
(C) in subsection (h)(1), by striking ``civilian
service'' each place it appears and inserting ``service
as an employee''.
(5) Contributions of certain persons reemployed after
service with international organizations.--Section 8432c of
title 5, United States Code, is amended--
(A) in subsection (c), by inserting ``or covered
non-Federal employer'' after ``the agency''; and
(B) in subsection (e), by striking ``civilian''.
(6) Benefits and election of benefits.--Section 8433 of
title 5, United States Code, is amended--
(A) by striking ``Government employment'' each
place it appears and inserting ``service that is
creditable under this chapter''; and
(B) in subsection (c)(1), by striking ``Government
service'' and inserting ``service that is creditable
under this chapter''.
(h) Rights of a Widow or Widower.--Section 8442(b)(1) of title 5,
United States Code, is amended, in the matter preceding subparagraph
(A), by striking ``civilian service'' and inserting ``service as an
employee''.
(i) Rights of a Child.--Section 8443(a)(1) of title 5, United
States Code, is amended, in the matter preceding subparagraph (A), by
striking ``civilian service'' and inserting ``service as an employee''.
(j) Disability Retirement.--Section 8451(a) of title 5, United
States Code, is amended--
(1) by striking ``employee's agency'' each place it appears
and inserting ``agency or covered non-Federal employer
employing the employee''; and
(2) in paragraph (1)(A), by striking ``civilian service''
and inserting ``service as an employee''.
(k) Recovery; Restoration of Earning Capacity.--Section 8455(a)(1)
of title 5, United States Code, is amended by inserting ``or a covered
non-Federal employer or on becoming a covered self-employed
individual'' after ``reemployment by the Government''.
(l) Authority of the Office of Personnel Management.--Section
8461(h)(1) of title 5, United States Code, is amended by inserting ``,
covered non-Federal employer, and covered self-employed individual''
after ``Each Government agency''.
(m) Annuities and Pay on Reemployment.--Section 8468 of title 5,
United States Code, is amended by adding at the end the following:
``(k) This section shall not apply to an individual serving in a
position as a covered non-Federal employee or who is a covered self-
employed individual.''.
SEC. 5. CREDIT FOR SMALL EMPLOYER AND SELF-EMPLOYED PENSION
CONTRIBUTIONS.
(a) In General.--Subpart C of part IV of subchapter A of chapter 1
of the Internal Revenue Code of 1986 is amended by inserting after
section 36 the following new section:
``SEC. 36A. CREDIT FOR SMALL EMPLOYER AND SELF-EMPLOYED PENSION
CONTRIBUTIONS.
``(a) In General.--In the case of an eligible taxpayer, there shall
be allowed as a credit against the tax imposed by subtitle A an amount
equal to the contribution assistance amount with respect to such
taxpayer for the taxable year.
``(b) Contribution Assistance Amount.--In the case of an eligible
taxpayer, for purposes of this section--
``(1) In general.--The contribution assistance amount is an
amount equal to the applicable percentage of the qualified
pension contributions paid by the eligible taxpayer during the
taxable year.
``(2) Applicable percentage.--For purposes of paragraph
(1), the applicable percentage is 50 percent, reduced (but not
below zero) by the number of percentage points which--
``(A) in the case of an employer, bears the same
ratio to 50 as the excess of--
``(i) the gross receipts of the employer
for the taxable year, over
``(ii) $25,000,000, bears to
$75,000,000, and
``(B) in the case of a self-employed individual,
bears the same ratio to 50 as the excess of--
``(i) the income of the individual for the
taxable year, over
``(ii) $75,000, bears to
$50,000.
``(3) Qualified pension contributions.--The term `qualified
pension contributions' means--
``(A) in the case of a covered non-Federal employer
or covered self-employed individual, the contributions
made by such employer or individual under sections
8423(a) and 8432(c) of title 5, United States Code,
``(B) in the case of any other employer, the
nonelective contributions made by such employer to a
covered retirement program (as defined in section 2 of
the Pensions for All Act) on behalf of the employees of
the employer, and
``(C) in the case of any other self-employed
individual, the contributions made by such individual
to a covered retirement program (as so defined) of the
individual.
``(c) Eligible Taxpayers, etc.--For purposes of this section--
``(1) In general.--The term `eligible taxpayer' means--
``(A) any covered non-Federal employer making an
election under both sections 8423(a)(4)(E)(i) and
8432(c)(4)(E)(i) of title 5, United States Code not to
receive a reduction in employer contributions,
``(B) any employer which is not a covered non-
Federal employer,
``(C) any covered self-employed individual making
an election under both sections 8423(a)(4)(E)(ii) and
8432(c)(4)(E)(ii) of title 5, United States Code not to
receive a reduction in contributions, and
``(D) any self-employed individual who is not a
covered self-employed individual.
``(2) Covered non-federal employer; covered self-employed
individual.--The terms `covered non-Federal employer' and
`covered self-employed individual' have the respective meanings
given such terms by section 8401 of title 5, United States
Code.
``(d) Coordination With Other Credits.--
``(1) Business credit treated as part of general business
credit.--In the case of an employer, the credit which (but for
this paragraph) would otherwise be allowed under subsection (a)
for any taxable year shall be treated as a credit listed in
section 38(b) for such taxable year (and not allowed under
subsection (a)).
``(2) Denial of double benefit.--No deduction or credit
shall be allowed under any other section of this title with
respect to contributions to a plan (including the Federal
Employees Retirement System under chapter 84 of title 5, United
States Code) if credit is allowable with respect to such
contributions under subsection (a) (determined without regard
to this subsection).''.
(b) Employer Credit To Be Part of General Business Credit.--
Subsection (b) of section 38 of the Internal Revenue Code of 1986 is
amended by striking ``plus'' at the end of paragraph (40), by striking
the period at the end of paragraph (41) and inserting ``, plus'', and
by adding at the end the following new paragraph:
``(42) in the case of an eligible taxpayer (as defined in
section 36A(c)), the portion of the credit for small employer
and self-employed pension contributions to which section
36A(d)(1) applies.''.
(c) Conforming Amendment.--Section 6211(b)(4)(A) of the Internal
Revenue Code of 1986 is amended by inserting ``, 36A'' after ``36''.
(d) Clerical Amendment.--The table of sections for subpart C 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 36 the
following new item:
``Sec. 36A. Credit for small employer and self-employed pension
contributions.''.
(e) Effective Date.--The amendments made by this section shall
apply to contributions made after the date of the enactment of this
Act.
SEC. 6. FAILURE TO PROVIDE COVERED RETIREMENT PROGRAM.
(a) In General.--Chapter 43 of the Internal Revenue Code of 1986 is
amended by adding at the end the following new section:
``SEC. 4980J. FAILURE TO MAINTAIN REQUIRED RETIREMENT PROGRAM.
``(a) General Rule.--
``(1) Employers.--There is hereby imposed a tax on the
failure of an employer either--
``(A) to make available a covered retirement
program to all employees of the employer, or
``(B) in the case of a covered employer, to make
required contributions under sections 8423(a) and
8432(c) of title 5, United States Code with respect to
the employees of the employer.
``(2) Self-employed individuals.--There is hereby imposed a
tax on the failure of a self-employed individual either--
``(A) to participate in a covered retirement
program, or
``(B) in the case of a covered self-employed
individual, to make required contributions under
sections 8423(a) and 8432(c) of title 5, United States
Code with respect to the individual.
``(b) Amount of Tax.--
``(1) In general.--The amount of the tax imposed by
subsection (a) on any failure with respect to an employee or
self-employed individual shall be $10 for each day in the
noncompliance period with respect to such failure.
``(2) Noncompliance period.--For purposes of this section,
the term `noncompliance period' means, with respect to any
failure, the period--
``(A) beginning on the date such failure first
occurs, and
``(B) ending on the earlier of--
``(i) the date such failure is corrected,
or
``(ii) with respect to any employer, the
date that is 3 months after the last date on
which the employee is employed by the employer.
``(3) Adjustment for inflation.--
``(A) In general.--In the case of any failure
occurring in a calendar year beginning after 2026, the
$10 amount under paragraph (1) shall be increased by an
amount equal to such dollar amount multiplied by the
cost-of-living adjustment determined under section
1(f)(3) for the calendar year determined by
substituting `calendar year 2025' for `calendar year
2016' in subparagraph (A)(ii) thereof.
``(B) Rounding.--If any amount adjusted under
subparagraph (A) is not a whole dollar amount, such
amount shall be rounded to the nearest whole dollar
amount.
``(c) Limitations on Amount of Tax.--
``(1) Tax not to apply where failure not discovered
exercising reasonable diligence.--No tax shall be imposed by
subsection (a) on any failure during any period for which it is
established to the satisfaction of the Secretary that none of
the persons referred to in subsection (d) knew, nor exercising
reasonable diligence would have known, that such failure
existed.
``(2) Overall limitation for unintentional failures.--In
the case of failures which are due to reasonable cause and not
to willful neglect--
``(A) General rule.--The tax imposed by subsection
(a) for failures during the taxable year of the
employer or self-employed individual shall not exceed
$500,000.
``(B) Taxable years in the case of certain
controlled groups.--For purposes of this subparagraph,
if not all persons who are treated as a single employer
for purposes of this section have the same taxable
year, the taxable years taken into account shall be
determined under principles similar to the principles
of section 1561.
``(3) Waiver by secretary.--In the case of a failure which
is due to reasonable cause and not to willful neglect, the
Secretary may waive part or all of the tax imposed by
subsection (a) to the extent that the payment of such tax would
be excessive relative to the failure involved.
``(d) Employer Liability for Tax.--The employer shall be liable for
the tax imposed by subsection (a)(1) on a failure. All employers,
determined without regard to subsection (e)(2), shall be jointly and
severally liable for the liability of any other employer with which
they are aggregated under subsection (e)(2).
``(e) Definitions.--For purposes of this section--
``(1) Terms relating to covered retirement programs, etc.--
Any term used in this section which is defined in section 2 of
the Pensions for All Act has the meaning given such term by
such section.
``(2) Employer.--All employers treated as a single employer
under subsection (b), (c), (m), or (o) of section 414 shall be
treated as 1 employer.''.
(b) Clerical Amendment.--The table of sections for chapter 43 of
the Internal Revenue Code of 1986 is amended by adding at the end the
following new item:
``Sec. 4980J. Failure to maintain required retirement program.''.
(c) Effective Date.--The amendments made by this section shall
apply to plan years beginning after December 31, 2025.
SEC. 7. PROHIBITION ON THE REDUCTION OF COMPENSATION.
An employer that employs an employee on or before the date of
enactment of this Act may not reduce any form of compensation provided
to the employee due to the requirement imposed by this Act that the
employee be enrolled in a covered retirement program or FERS.
<all>