Text of SECURE Act

This is a plain text version of the SECURE Act as passed into law December 20, 2019. Color highlights and annotations may be added as indicated. Some words are incorrectly hyphenated; this is just a technical error of the document reproduction technology.

DIVISION O—SETTING EVERY COMMUNITY UP FOR RETIREMENT ENHANCEMENT
SEC. 1. SHORT TITLE, ETC.
(a) SHORT TITLE.—This Act may be cited as the ‘‘Setting Every Community Up for Retirement Enhancement Act of 2019’’.
(b) TABLE OF CONTENTS.—The table of contents of this Act is as follows:

Sec. 1. Short title, etc.
TITLE I—EXPANDING AND PRESERVING RETIREMENT SAVINGS
Sec. 101. Multiple employer plans; pooled employer plans.
Sec. 102. Increase in 10 percent cap for automatic enrollment safe harbor after 1st plan year.
Sec. 103. Rules relating to election of safe harbor 401(k) status.
Sec. 104. Increase in credit limitation for small employer pension plan startup costs.
Sec. 105. Small employer automatic enrollment credit.
Sec. 106. Certain taxable non-tuition fellowship and stipend payments treated as compensation for IRA purposes.
Sec. 107. Repeal of maximum age for traditional IRA contributions.
Sec. 108. Qualified employer plans prohibited from making loans through credit cards and other similar arrangements.
Sec. 109. Portability of lifetime income options.
Sec. 110. Treatment of custodial accounts on termination of section 403(b) plans. Sec. 111. Clarification of retirement income account rules relating to church-controlled organizations.
Sec. 112. Qualified cash or deferred arrangements must allow long-term employees working more than 500 but less than 1,000 hours per year to participate.
Sec. 113. Penalty-free withdrawals from retirement plans for individuals in case of birth of child or adoption.
Sec. 114. Increase in age for required beginning date for mandatory distributions.
Sec. 115. Special rules for minimum funding standards for community newspaper plans.
Sec. 116. Treating excluded difficulty of care payments as compensation for deter- mining retirement contribution limitations.
TITLE II—ADMINISTRATIVE IMPROVEMENTS
Sec. 201. Plan adopted by filing due date for year may be treated as in effect as of close of year.
Sec. 202. Combined annual report for group of plans. Sec. 203. Disclosure regarding lifetime income.

Sec. 204. Fiduciary safe harbor for selection of lifetime income provider.
Sec. 205. Modification of nondiscrimination rules to protect older, longer service participants.
Sec. 206. Modification of PBGC premiums for CSEC plans.
TITLE III—OTHER BENEFITS
Sec. 301. Benefits provided to volunteer firefighters and emergency medical responders.
Sec. 302. Expansion of section 529 plans.
TITLE IV—REVENUE PROVISIONS
Sec. 401. Modification of required distribution rules for designated beneficiaries. Sec. 402. Increase in penalty for failure to file.
Sec. 403. Increased penalties for failure to file retirement plan returns. Sec. 404. Increase information sharing to administer excise taxes.
TITLE V—TAX RELIEF FOR CERTAIN CHILDREN
Sec. 501. Modification of rules relating to the taxation of unearned income of certain children.
TITLE VI—ADMINISTRATIVE PROVISIONS
Sec. 601. Provisions relating to plan amendments.

TITLE I—EXPANDING AND PRESERVING RETIREMENT SAVINGS
SEC. 101. MULTIPLE EMPLOYER PLANS; POOLED EMPLOYER PLANS.
(a) QUALIFICATION REQUIREMENTS.—
(1) IN GENERAL.—Section 413 of the Internal Revenue Code of 1986 is amended by adding at the end the following new subsection:
‘‘(e) APPLICATION OF QUALIFICATION REQUIREMENTS FOR CER-
TAIN MULTIPLE EMPLOYER PLANS WITH POOLED PLAN PROVIDERS.—
‘‘(1) IN GENERAL.—Except as provided in paragraph (2), if a defined contribution plan to which subsection (c) applies— ‘‘(A) is maintained by employers which have a common
interest other than having adopted the plan, or
‘‘(B) in the case of a plan not described in subparagraph (A), has a pooled plan provider,
then the plan shall not be treated as failing to meet the requirements under this title applicable to a plan described in section 401(a) or to a plan that consists of individual retirement accounts described in section 408 (including by reason of sub- section (c) thereof), whichever is applicable, merely because one or more employers of employees covered by the plan fail to take such actions as are required of such employers for the plan to meet such requirements.
‘‘(2) LIMITATIONS.—
‘‘(A) IN GENERAL.—Paragraph (1) shall not apply to any plan unless the terms of the plan provide that in the case of any employer in the plan failing to take the actions described in paragraph (1)—
‘‘(i) the assets of the plan attributable to employees of such employer (or beneficiaries of such employees) will be transferred to a plan maintained only by such employer (or its successor), to an eligible retirement plan as defined in section 402(c)(8)(B) for each individual whose account is transferred, or to any other arrangement that the Secretary determines is appropriate, unless the Secretary determines it is in the

best interests of the employees of such employer (and the beneficiaries of such employees) to retain the assets in the plan, and
‘‘(ii) such employer (and not the plan with respect to which the failure occurred or any other employer in such plan) shall, except to the extent provided by the Secretary, be liable for any liabilities with respect to such plan attributable to employees of such employer (or beneficiaries of such employees).
‘‘(B) FAILURES BY POOLED PLAN PROVIDERS.—If the
pooled plan provider of a plan described in paragraph (1)(B) does not perform substantially all of the administrative duties which are required of the provider under paragraph (3)(A)(i) for any plan year, the Secretary may provide that the determination as to whether the plan meets the requirements under this title applicable to a plan described in section 401(a) or to a plan that consists of individual retirement accounts described in section 408 (including by reason of subsection (c) thereof), whichever is applicable, shall be made in the same manner as would be made without regard to paragraph (1).
‘‘(3) POOLED PLAN PROVIDER.—
‘‘(A) IN GENERAL.—For purposes of this subsection, the term ‘pooled plan provider’ means, with respect to any plan, a person who—
‘‘(i) is designated by the terms of the plan as a named fiduciary (within the meaning of section 402(a)(2) of the Employee Retirement Income Security Act of 1974), as the plan administrator, and as the person responsible to perform all administrative duties (including conducting proper testing with respect to the plan and the employees of each employer in the plan) which are reasonably necessary to ensure that— ‘‘(I) the plan meets any requirement applicable
under the Employee Retirement Income Security Act of 1974 or this title to a plan described in section 401(a) or to a plan that consists of individual retirement accounts described in section 408 (including by reason of subsection (c) thereof), whichever is applicable, and
‘‘(II) each employer in the plan takes such actions as the Secretary or such person determines are necessary for the plan to meet the requirements described in subclause (I), including providing to such person any disclosures or other information which the Secretary may require or which such person otherwise determines are necessary to administer the plan or to allow the plan to meet such requirements,
‘‘(ii) registers as a pooled plan provider with the Secretary, and provides such other information to the Secretary as the Secretary may require, before beginning operations as a pooled plan provider,
‘‘(iii) acknowledges in writing that such person is a named fiduciary (within the meaning of section 402(a)(2) of the Employee Retirement Income Security

Act of 1974), and the plan administrator, with respect to the plan, and
‘‘(iv) is responsible for ensuring that all persons who handle assets of, or who are fiduciaries of, the plan are bonded in accordance with section 412 of the Employee Retirement Income Security Act of 1974. ‘‘(B) AUDITS, EXAMINATIONS AND INVESTIGATIONS.—The
Secretary may perform audits, examinations, and investigations of pooled plan providers as may be necessary to enforce and carry out the purposes of this subsection.
‘‘(C) AGGREGATION RULES.—For purposes of this para- graph, in determining whether a person meets the requirements of this paragraph to be a pooled plan provider with respect to any plan, all persons who perform services for the plan and who are treated as a single employer under subsection (b), (c), (m), or (o) of section 414 shall be treated as one person.
‘‘(D) TREATMENT OF EMPLOYERS AS PLAN SPONSORS.—
Except with respect to the administrative duties of the pooled plan provider described in subparagraph (A)(i), each employer in a plan which has a pooled plan provider shall be treated as the plan sponsor with respect to the portion of the plan attributable to employees of such employer (or beneficiaries of such employees).
‘‘(4) GUIDANCE.—
‘‘(A) IN GENERAL.—The Secretary shall issue such guid- ance as the Secretary determines appropriate to carry out this subsection, including guidance—
‘‘(i) to identify the administrative duties and other actions required to be performed by a pooled plan provider under this subsection,
‘‘(ii) which describes the procedures to be taken to terminate a plan which fails to meet the require- ments to be a plan described in paragraph (1), including the proper treatment of, and actions needed to be taken by, any employer in the plan and the assets and liabilities of the plan attributable to employees of such employer (or beneficiaries of such employees), and
‘‘(iii) identifying appropriate cases to which the rules of paragraph (2)(A) will apply to employers in the plan failing to take the actions described in para- graph (1).
The Secretary shall take into account under clause (iii) whether the failure of an employer or pooled plan provider to provide any disclosures or other information, or to take any other action, necessary to administer a plan or to allow a plan to meet requirements applicable to the plan under section 401(a) or 408, whichever is applicable, has continued over a period of time that demonstrates a lack of commitment to compliance.
‘‘(B) GOOD FAITH COMPLIANCE WITH LAW BEFORE GUID-
ANCE.—An employer or pooled plan provider shall not be treated as failing to meet a requirement of guidance issued by the Secretary under this paragraph if, before the issuance of such guidance, the employer or pooled plan provider complies in good faith with a reasonable

interpretation of the provisions of this subsection to which such guidance relates.
‘‘(5) MODEL PLAN.—The Secretary shall publish model plan language which meets the requirements of this subsection and of paragraphs (43) and (44) of section 3 of the Employee Retirement Income Security Act of 1974 and which may be adopted in order for a plan to be treated as a plan described in para- graph (1)(B).’’.
(2) CONFORMING AMENDMENT.—Section 413(c)(2) of such Code is amended by striking ‘‘section 401(a)’’ and inserting ‘‘sections 401(a) and 408(c)’’.
(3) TECHNICAL AMENDMENT.—Section 408(c) of such Code is amended by inserting after paragraph (2) the following new paragraph:
‘‘(3) There is a separate accounting for any interest of an employee or member (or spouse of an employee or member) in a Roth IRA.’’.
(b) NO COMMON INTEREST REQUIRED FOR POOLED EMPLOYER PLANS.—Section 3(2) of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1002(2)) is amended by adding at the end the following:
‘‘(C) A pooled employer plan shall be treated as—
‘‘(i) a single employee pension benefit plan or single pension plan; and
‘‘(ii) a plan to which section 210(a) applies.’’.
(c) POOLED EMPLOYER PLAN AND PROVIDER DEFINED.—
(1) IN GENERAL.—Section 3 of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1002) is amended by adding at the end the following:
‘‘(43) POOLED EMPLOYER PLAN.—
‘‘(A) IN GENERAL.—The term ‘pooled employer plan’ means a plan—
‘‘(i) which is an individual account plan established or maintained for the purpose of providing benefits to the employees of 2 or more employers;
‘‘(ii) which is a plan described in section 401(a) of the Internal Revenue Code of 1986 which includes a trust exempt from tax under section 501(a) of such Code or a plan that consists of individual retirement accounts described in section 408 of such Code (including by reason of subsection (c) thereof); and ‘‘(iii) the terms of which meet the requirements
of subparagraph (B).
Such term shall not include a plan maintained by employers which have a common interest other than having adopted the plan.
‘‘(B) REQUIREMENTS FOR PLAN TERMS.—The require-
ments of this subparagraph are met with respect to any plan if the terms of the plan—
‘‘(i) designate a pooled plan provider and provide that the pooled plan provider is a named fiduciary of the plan;
‘‘(ii) designate one or more trustees meeting the requirements of section 408(a)(2) of the Internal Rev- enue Code of 1986 (other than an employer in the plan) to be responsible for collecting contributions to, and holding the assets of, the plan and require such

trustees to implement written contribution collection procedures that are reasonable, diligent, and systematic;
‘‘(iii) provide that each employer in the plan retains fiduciary responsibility for—
‘‘(I) the selection and monitoring in accordance with section 404(a) of the person designated as the pooled plan provider and any other person who, in addition to the pooled plan provider, is designated as a named fiduciary of the plan; and ‘‘(II) to the extent not otherwise delegated to another fiduciary by the pooled plan provider and subject to the provisions of section 404(c), the investment and management of the portion of the plan’s assets attributable to the employees of the
employer (or beneficiaries of such employees);
‘‘(iv) provide that employers in the plan, and participants and beneficiaries, are not subject to unreasonable restrictions, fees, or penalties with regard to ceasing participation, receipt of distributions, or otherwise transferring assets of the plan in accordance with section 208 or paragraph (44)(C)(i)(II);
‘‘(v) require—
‘‘(I) the pooled plan provider to provide to employers in the plan any disclosures or other information which the Secretary may require, including any disclosures or other information to facilitate the selection or any monitoring of the pooled plan provider by employers in the plan; and
‘‘(II) each employer in the plan to take such actions as the Secretary or the pooled plan provider determines are necessary to administer the plan or for the plan to meet any requirement applicable under this Act or the Internal Revenue Code of 1986 to a plan described in section 401(a) of such Code or to a plan that consists of individual retirement accounts described in section 408 of such Code (including by reason of subsection (c) thereof), whichever is applicable, including providing any disclosures or other information which the Secretary may require or which the pooled plan pro- vider otherwise determines are necessary to administer the plan or to allow the plan to meet such requirements; and
‘‘(vi) provide that any disclosure or other information required to be provided under clause (v) may be provided in electronic form and will be designed to ensure only reasonable costs are imposed on pooled plan providers and employers in the plan.
‘‘(C) EXCEPTIONS.—The term ‘pooled employer plan’ does not include—
‘‘(i) a multiemployer plan; or
‘‘(ii) a plan established before the date of the enactment of the Setting Every Community Up for Retirement Enhancement Act of 2019 unless the plan administrator elects that the plan will be treated as

a pooled employer plan and the plan meets the requirements of this title applicable to a pooled employer plan established on or after such date.
‘‘(D) TREATMENT OF EMPLOYERS AS PLAN SPONSORS.—
Except with respect to the administrative duties of the pooled plan provider described in paragraph (44)(A)(i), each employer in a pooled employer plan shall be treated as the plan sponsor with respect to the portion of the plan attributable to employees of such employer (or beneficiaries of such employees).
‘‘(44) POOLED PLAN PROVIDER.—
‘‘(A) IN GENERAL.—The term ‘pooled plan provider’ means a person who—
‘‘(i) is designated by the terms of a pooled employer plan as a named fiduciary, as the plan administrator, and as the person responsible for the performance of all administrative duties (including conducting proper testing with respect to the plan and the employees of each employer in the plan) which are reasonably necessary to ensure that—
‘‘(I) the plan meets any requirement applicable under this Act or the Internal Revenue Code of 1986 to a plan described in section 401(a) of such Code or to a plan that consists of individual retirement accounts described in section 408 of such Code (including by reason of subsection (c) thereof), whichever is applicable; and
‘‘(II) each employer in the plan takes such actions as the Secretary or pooled plan provider determines are necessary for the plan to meet the requirements described in subclause (I), including providing the disclosures and information described in paragraph (43)(B)(v)(II);
‘‘(ii) registers as a pooled plan provider with the Secretary, and provides to the Secretary such other information as the Secretary may require, before beginning operations as a pooled plan provider;
‘‘(iii) acknowledges in writing that such person is a named fiduciary, and the plan administrator, with respect to the pooled employer plan; and
‘‘(iv) is responsible for ensuring that all persons who handle assets of, or who are fiduciaries of, the pooled employer plan are bonded in accordance with section 412.
‘‘(B) AUDITS, EXAMINATIONS AND INVESTIGATIONS.—The
Secretary may perform audits, examinations, and investigations of pooled plan providers as may be necessary to enforce and carry out the purposes of this paragraph and paragraph (43).
‘‘(C) GUIDANCE.—The Secretary shall issue such guidance as the Secretary determines appropriate to carry out this paragraph and paragraph (43), including guidance— ‘‘(i) to identify the administrative duties and other
actions required to be performed by a pooled plan provider under either such paragraph; and

‘‘(ii) which requires in appropriate cases that if an employer in the plan fails to take the actions required under subparagraph (A)(i)(II)—
‘‘(I) the assets of the plan attributable to employees of such employer (or beneficiaries of such employees) are transferred to a plan main- tained only by such employer (or its successor), to an eligible retirement plan as defined in section 402(c)(8)(B) of the Internal Revenue Code of 1986 for each individual whose account is transferred, or to any other arrangement that the Secretary determines is appropriate in such guidance; and ‘‘(II) such employer (and not the plan with respect to which the failure occurred or any other employer in such plan) shall, except to the extent provided in such guidance, be liable for any liabilities with respect to such plan attributable to employees of such employer (or beneficiaries of
such employees).
The Secretary shall take into account under clause
(ii) whether the failure of an employer or pooled plan provider to provide any disclosures or other information, or to take any other action, necessary to admin- ister a plan or to allow a plan to meet requirements described in subparagraph (A)(i)(II) has continued over a period of time that demonstrates a lack of commitment to compliance. The Secretary may waive the requirements of subclause (ii)(I) in appropriate cir- cumstances if the Secretary determines it is in the best interests of the employees of the employer referred to in such clause (and the beneficiaries of such employees) to retain the assets in the plan with respect to which the employer’s failure occurred.
‘‘(D) GOOD FAITH COMPLIANCE WITH LAW BEFORE GUID-
ANCE.—An employer or pooled plan provider shall not be treated as failing to meet a requirement of guidance issued by the Secretary under subparagraph (C) if, before the issuance of such guidance, the employer or pooled plan provider complies in good faith with a reasonable interpretation of the provisions of this paragraph, or para- graph (43), to which such guidance relates.
‘‘(E) AGGREGATION RULES.—For purposes of this para- graph, in determining whether a person meets the require- ments of this paragraph to be a pooled plan provider with respect to any plan, all persons who perform services for the plan and who are treated as a single employer under subsection (b), (c), (m), or (o) of section 414 of the Internal Revenue Code of 1986 shall be treated as one person.’’.
(2) BONDING REQUIREMENTS FOR POOLED EMPLOYER PLANS.—The last sentence of section 412(a) of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1112(a)) is amended by inserting ‘‘or in the case of a pooled employer plan (as defined in section 3(43))’’ after ‘‘section 407(d)(1))’’.
(3) CONFORMING AND TECHNICAL AMENDMENTS.—Section 3 of the Employee Retirement Income Security Act of 1974 (29
U.S.C. 1002) is amended—
(A) in paragraph (16)(B)—

(i) by striking ‘‘or’’ at the end of clause (ii); and
(ii) by striking the period at the end and inserting ‘‘, or (iv) in the case of a pooled employer plan, the pooled plan provider.’’; and
(B) by striking the second paragraph (41).
(d) POOLED EMPLOYER AND MULTIPLE EMPLOYER PLAN REPORTING.—
(1) ADDITIONAL INFORMATION.—Section 103 of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1023) is amended—
(A) in subsection (a)(1)(B), by striking ‘‘applicable sub- sections (d), (e), and (f)’’ and inserting ‘‘applicable sub- sections (d), (e), (f), and (g)’’; and
(B) by amending subsection (g) to read as follows: ‘‘(g) ADDITIONAL INFORMATION WITH RESPECT TO POOLED EMPLOYER AND MULTIPLE EMPLOYER PLANS.—An annual report
under this section for a plan year shall include—
‘‘(1) with respect to any plan to which section 210(a) applies (including a pooled employer plan), a list of employers in the plan and a good faith estimate of the percentage of total con- tributions made by such employers during the plan year and the aggregate account balances attributable to each employer in the plan (determined as the sum of the account balances of the employees of such employer (and the beneficiaries of such employees)); and
‘‘(2) with respect to a pooled employer plan, the identifying information for the person designated under the terms of the plan as the pooled plan provider.’’.
(2) SIMPLIFIED ANNUAL REPORTS.—Section 104(a) of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1024(a)) is amended by striking paragraph (2)(A) and inserting the following:
‘‘(2)(A) With respect to annual reports required to be filed with the Secretary under this part, the Secretary may by regulation prescribe simplified annual reports for any pension plan that—
‘‘(i) covers fewer than 100 participants; or
‘‘(ii) is a plan described in section 210(a) that covers fewer than 1,000 participants, but only if no single employer in the plan has 100 or more participants covered by the plan.’’.
(e) EFFECTIVE DATE.—
(1) IN GENERAL.—The amendments made by this section shall apply to plan years beginning after December 31, 2020.
(2) RULE OF CONSTRUCTION.—Nothing in the amendments made by subsection (a) shall be construed as limiting the authority of the Secretary of the Treasury or the Secretary’s delegate (determined without regard to such amendment) to provide for the proper treatment of a failure to meet any requirement applicable under the Internal Revenue Code of 1986 with respect to one employer (and its employees) in a multiple employer plan.
SEC. 102. INCREASE IN 10 PERCENT CAP FOR AUTOMATIC ENROLL- MENT SAFE HARBOR AFTER 1ST PLAN YEAR.
(a) IN GENERAL.—Section 401(k)(13)(C)(iii) of the Internal Rev- enue Code of 1986 is amended by striking ‘‘does not exceed 10 percent’’ and inserting ‘‘does not exceed 15 percent (10 percent during the period described in subclause (I))’’.

(b) EFFECTIVE DATE.—The amendments made by this section shall apply to plan years beginning after December 31, 2019.
SEC. 103. RULES RELATING TO ELECTION OF SAFE HARBOR 401(k) STATUS.
(a) LIMITATION OF ANNUAL SAFE HARBOR NOTICE TO MATCHING CONTRIBUTION PLANS.—
(1) IN GENERAL.—Subparagraph (A) of section 401(k)(12) of the Internal Revenue Code of 1986 is amended by striking ‘‘if such arrangement’’ and all that follows and inserting ‘‘if such arrangement—
‘‘(i) meets the contribution requirements of subparagraph (B) and the notice requirements of subparagraph (D), or
‘‘(ii) meets the contribution requirements of subparagraph (C).’’.
(2) AUTOMATIC CONTRIBUTION ARRANGEMENTS.—Subpara- graph (B) of section 401(k)(13) of such Code is amended by striking ‘‘means’’ and all that follows and inserting ‘‘means a cash or deferred arrangement—
‘‘(i) which is described in subparagraph (D)(i)(I) and meets the applicable requirements of subparagraphs (C) through (E), or
‘‘(ii) which is described in subparagraph (D)(i)(II) and meets the applicable requirements of subparagraphs (C) and (D).’’.
(b) NONELECTIVE CONTRIBUTIONS.—Section 401(k)(12) of the Internal Revenue Code of 1986 is amended by redesignating subparagraph (F) as subparagraph (G), and by inserting after subparagraph (E) the following new subparagraph:
‘‘(F) TIMING OF PLAN AMENDMENT FOR EMPLOYER MAKING NONELECTIVE CONTRIBUTIONS.—
‘‘(i) IN GENERAL.—Except as provided in clause (ii), a plan may be amended after the beginning of a plan year to provide that the requirements of subparagraph (C) shall apply to the arrangement for the plan year, but only if the amendment is adopted— ‘‘(I) at any time before the 30th day before
the close of the plan year, or
‘‘(II) at any time before the last day under paragraph (8)(A) for distributing excess contributions for the plan year.
‘‘(ii) EXCEPTION WHERE PLAN PROVIDED FOR
MATCHING CONTRIBUTIONS.—Clause (i) shall not apply to any plan year if the plan provided at any time during the plan year that the requirements of subparagraph (B) or paragraph (13)(D)(i)(I) applied to the plan year.
‘‘(iii) 4-PERCENT CONTRIBUTION REQUIREMENT.—
Clause (i)(II) shall not apply to an arrangement unless the amount of the contributions described in subpara- graph (C) which the employer is required to make under the arrangement for the plan year with respect to any employee is an amount equal to at least 4 percent of the employee’s compensation.’’.

(c) AUTOMATIC CONTRIBUTION ARRANGEMENTS.—Section 401(k)(13) of the Internal Revenue Code of 1986 is amended by adding at the end the following:
‘‘(F) TIMING OF PLAN AMENDMENT FOR EMPLOYER MAKING NONELECTIVE CONTRIBUTIONS.—
‘‘(i) IN GENERAL.—Except as provided in clause (ii), a plan may be amended after the beginning of a plan year to provide that the requirements of subparagraph (D)(i)(II) shall apply to the arrangement for the plan year, but only if the amendment is adopted—
‘‘(I) at any time before the 30th day before the close of the plan year, or
‘‘(II) at any time before the last day under paragraph (8)(A) for distributing excess contributions for the plan year.
‘‘(ii) EXCEPTION WHERE PLAN PROVIDED FOR
MATCHING CONTRIBUTIONS.—Clause (i) shall not apply to any plan year if the plan provided at any time during the plan year that the requirements of subparagraph (D)(i)(I) or paragraph (12)(B) applied to the plan year.
‘‘(iii) 4-PERCENT CONTRIBUTION REQUIREMENT.—
Clause (i)(II) shall not apply to an arrangement unless the amount of the contributions described in subpara- graph (D)(i)(II) which the employer is required to make under the arrangement for the plan year with respect to any employee is an amount equal to at least 4 percent of the employee’s compensation.’’.
(d) EFFECTIVE DATE.—The amendments made by this section shall apply to plan years beginning after December 31, 2019.
SEC. 104. INCREASE IN CREDIT LIMITATION FOR SMALL EMPLOYER PENSION PLAN STARTUP COSTS.
(a) IN GENERAL.—Paragraph (1) of section 45E(b) of the Internal Revenue Code of 1986 is amended to read as follows:
‘‘(1) for the first credit year and each of the 2 taxable years immediately following the first credit year, the greater of—
‘‘(A) $500, or
‘‘(B) the lesser of—
‘‘(i) $250 for each employee of the eligible employer who is not a highly compensated employee (as defined in section 414(q)) and who is eligible to participate in the eligible employer plan maintained by the eligible employer, or
‘‘(ii) $5,000, and’’.
(b) EFFECTIVE DATE.—The amendment made by this section shall apply to taxable years beginning after December 31, 2019.
SEC. 105. SMALL EMPLOYER AUTOMATIC ENROLLMENT CREDIT.
(a) IN GENERAL.—Subpart D of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 is amended by adding at the end the following new section:

‘‘SEC. 45T. AUTO-ENROLLMENT OPTION FOR RETIREMENT SAVINGS OPTIONS PROVIDED BY SMALL EMPLOYERS.
‘‘(a) IN GENERAL.—For purposes of section 38, in the case of an eligible employer, the retirement auto-enrollment credit determined under this section for any taxable year is an amount equal to—
‘‘(1) $500 for any taxable year occurring during the credit period, and
‘‘(2) zero for any other taxable year.
‘‘(b) CREDIT PERIOD.—For purposes of subsection (a)—
‘‘(1) IN GENERAL.—The credit period with respect to any eligible employer is the 3-taxable-year period beginning with the first taxable year for which the employer includes an eligible automatic contribution arrangement (as defined in section 414(w)(3)) in a qualified employer plan (as defined in section 4972(d)) sponsored by the employer.
‘‘(2) MAINTENANCE OF ARRANGEMENT.—No taxable year
with respect to an employer shall be treated as occurring within the credit period unless the arrangement described in para- graph (1) is included in the plan for such year.
‘‘(c) ELIGIBLE EMPLOYER.—For purposes of this section, the term ‘eligible employer’ has the meaning given such term in section 408(p)(2)(C)(i).’’.
(b) CREDIT TO BE PART OF GENERAL BUSINESS CREDIT.—Sub- section (b) of section 38 of the Internal Revenue Code of 1986 is amended by striking ‘‘plus’’ at the end of paragraph (31), by striking the period at the end of paragraph (32) and inserting ‘‘, plus’’, and by adding at the end the following new paragraph: ‘‘(33) in the case of an eligible employer (as defined in
section 45T(c)), the retirement auto-enrollment credit determined under section 45T(a).’’.
(c) CLERICAL AMENDMENT.—The table of sections for subpart D 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 45S the following new item:

‘‘Sec. 45T. Auto-enrollment option for retirement savings options provided by small employers.’’.
(d) EFFECTIVE DATE.—The amendments made by this section shall apply to taxable years beginning after December 31, 2019.
SEC. 106. CERTAIN TAXABLE NON-TUITION FELLOWSHIP AND STIPEND PAYMENTS TREATED AS COMPENSATION FOR IRA PURPOSES.
(a) IN GENERAL.—Paragraph (1) of section 219(f) of the Internal Revenue Code of 1986 is amended by adding at the end the fol- lowing: ‘‘The term ‘compensation’ shall include any amount which is included in the individual’s gross income and paid to the individual to aid the individual in the pursuit of graduate or postdoctoral study.’’.
(b) EFFECTIVE DATE.—The amendment made by this section shall apply to taxable years beginning after December 31, 2019.
SEC. 107. REPEAL OF MAXIMUM AGE FOR TRADITIONAL IRA CONTRIBUTIONS.
(a) IN GENERAL.—Paragraph (1) of section 219(d) of the Internal Revenue Code of 1986 is repealed.

(b) COORDINATION WITH QUALIFIED CHARITABLE DISTRIBUTIONS.—Add at the end of section 408(d)(8)(A) of such Code the following: ‘‘The amount of distributions not includible in gross income by reason of the preceding sentence for a taxable year (determined without regard to this sentence) shall be reduced (but not below zero) by an amount equal to the excess of—
‘‘(i) the aggregate amount of deductions allowed to the taxpayer under section 219 for all taxable years ending on or after the date the taxpayer attains age 701?2, over
‘‘(ii) the aggregate amount of reductions under this sentence for all taxable years preceding the current taxable year.’’.
(c) CONFORMING AMENDMENT.—Subsection (c) of section 408A of the Internal Revenue Code of 1986 is amended by striking paragraph (4) and by redesignating paragraphs (5), (6), and (7) as paragraphs (4), (5), and (6), respectively.
(d) EFFECTIVE DATE.—
(1) IN GENERAL.—Except as provided in paragraph (2), the amendments made by this section shall apply to contributions made for taxable years beginning after December 31, 2019.
(2) SUBSECTION (b).—The amendment made by subsection
(b) shall apply to distributions made for taxable years beginning after December 31, 2019.
SEC. 108. QUALIFIED EMPLOYER PLANS PROHIBITED FROM MAKING LOANS THROUGH CREDIT CARDS AND OTHER SIMILAR ARRANGEMENTS.
(a) IN GENERAL.—Paragraph (2) of section 72(p) of the Internal Revenue Code of 1986 is amended by redesignating subparagraph
(D) as subparagraph (E) and by inserting after subparagraph (C) the following new subparagraph:
‘‘(D) PROHIBITION OF LOANS THROUGH CREDIT CARDS AND OTHER SIMILAR ARRANGEMENTS.—Subparagraph (A)
shall not apply to any loan which is made through the use of any credit card or any other similar arrangement.’’.
(b) EFFECTIVE DATE.—The amendments made by subsection
(a) shall apply to loans made after the date of the enactment of this Act.
SEC. 109. PORTABILITY OF LIFETIME INCOME OPTIONS.
(a) IN GENERAL.—Subsection (a) of section 401 of the Internal Revenue Code of 1986 is amended by inserting after paragraph
(37) the following new paragraph:
‘‘(38) PORTABILITY OF LIFETIME INCOME.—
‘‘(A) IN GENERAL.—Except as may be otherwise provided by regulations, a trust forming part of a defined contribution plan shall not be treated as failing to constitute a qualified trust under this section solely by reason of allowing—
‘‘(i) qualified distributions of a lifetime income investment, or
‘‘(ii) distributions of a lifetime income investment in the form of a qualified plan distribution annuity contract,
on or after the date that is 90 days prior to the date on which such lifetime income investment is no longer

authorized to be held as an investment option under the plan.
‘‘(B) DEFINITIONS.—For purposes of this subsection— ‘‘(i) the term ‘qualified distribution’ means a direct trustee-to-trustee transfer described in paragraph (31)(A) to an eligible retirement plan (as defined in
section 402(c)(8)(B)),
‘‘(ii) the term ‘lifetime income investment’ means an investment option which is designed to provide an employee with election rights—
‘‘(I) which are not uniformly available with respect to other investment options under the plan, and
‘‘(II) which are to a lifetime income feature available through a contract or other arrangement offered under the plan (or under another eligible retirement plan (as so defined), if paid by means of a direct trustee-to-trustee transfer described in paragraph (31)(A) to such other eligible retirement plan),
‘‘(iii) the term ‘lifetime income feature’ means— ‘‘(I) a feature which guarantees a minimum level of income annually (or more frequently) for at least the remainder of the life of the employee or the joint lives of the employee and the
employee’s designated beneficiary, or
‘‘(II) an annuity payable on behalf of the employee under which payments are made in substantially equal periodic payments (not less frequently than annually) over the life of the employee or the joint lives of the employee and the employee’s designated beneficiary, and
‘‘(iv) the term ‘qualified plan distribution annuity contract’ means an annuity contract purchased for a participant and distributed to the participant by a plan or contract described in subparagraph (B) of section 402(c)(8) (without regard to clauses (i) and (ii) thereof).’’.
(b) CASH OR DEFERRED ARRANGEMENT.—
(1) IN GENERAL.—Clause (i) of section 401(k)(2)(B) of the Internal Revenue Code of 1986 is amended by striking ‘‘or’’ at the end of subclause (IV), by striking ‘‘and’’ at the end of subclause (V) and inserting ‘‘or’’, and by adding at the end the following new subclause:
‘‘(VI) except as may be otherwise provided by regulations, with respect to amounts invested in a lifetime income investment (as defined in sub- section (a)(38)(B)(ii)), the date that is 90 days prior to the date that such lifetime income investment may no longer be held as an investment option under the arrangement, and’’.
(2) DISTRIBUTION REQUIREMENT.—Subparagraph (B) of section 401(k)(2) of such Code, as amended by paragraph (1), is amended by striking ‘‘and’’ at the end of clause (i), by striking the semicolon at the end of clause (ii) and inserting ‘‘, and’’, and by adding at the end the following new clause:

‘‘(iii) except as may be otherwise provided by regulations, in the case of amounts described in clause (i)(VI), will be distributed only in the form of a qualified distribution (as defined in subsection (a)(38)(B)(i)) or a qualified plan distribution annuity contract (as defined in subsection (a)(38)(B)(iv)),’’.
(c) SECTION 403(b) PLANS.—
(1) ANNUITY CONTRACTS.—Paragraph (11) of section 403(b) of the Internal Revenue Code of 1986 is amended by striking ‘‘or’’ at the end of subparagraph (B), by striking the period at the end of subparagraph (C) and inserting ‘‘, or’’, and by inserting after subparagraph (C) the following new subparagraph:
‘‘(D) except as may be otherwise provided by regula- tions, with respect to amounts invested in a lifetime income investment (as defined in section 401(a)(38)(B)(ii))—
‘‘(i) on or after the date that is 90 days prior to the date that such lifetime income investment may no longer be held as an investment option under the contract, and
‘‘(ii) in the form of a qualified distribution (as defined in section 401(a)(38)(B)(i)) or a qualified plan distribution annuity contract (as defined in section 401(a)(38)(B)(iv)).’’.
(2) CUSTODIAL ACCOUNTS.—Subparagraph (A) of section 403(b)(7) of such Code is amended by striking ‘‘if—’’ and all that follows and inserting ‘‘if the amounts are to be invested in regulated investment company stock to be held in that custodial account, and under the custodial account—
‘‘(i) no such amounts may be paid or made available to any distributee (unless such amount is a distribution to which section 72(t)(2)(G) applies) before—
‘‘(I) the employee dies,
‘‘(II) the employee attains age 59 1/2,
‘‘(III) the employee has a severance from employment,
‘‘(IV) the employee becomes disabled (within the meaning of section 72(m)(7)),
‘‘(V) in the case of contributions made pursuant to a salary reduction agreement (within the meaning of section 3121(a)(5)(D)), the employee encounters financial hardship, or
‘‘(VI) except as may be otherwise provided by regulations, with respect to amounts invested in a lifetime income investment (as defined in section 401(a)(38)(B)(ii)), the date that is 90 days prior to the date that such lifetime income investment may no longer be held as an investment option under the contract, and
‘‘(ii) in the case of amounts described in clause (i)(VI), such amounts will be distributed only in the form of a qualified distribution (as defined in section 401(a)(38)(B)(i)) or a qualified plan distribution annuity contract (as defined in section 401(a)(38)(B)(iv)).’’.
(d) ELIGIBLE DEFERRED COMPENSATION PLANS.—
(1) IN GENERAL.—Subparagraph (A) of section 457(d)(1) of the Internal Revenue Code of 1986 is amended by striking

‘‘or’’ at the end of clause (ii), by inserting ‘‘or’’ at the end of clause (iii), and by adding after clause (iii) the following: ‘‘(iv) except as may be otherwise provided by regu-
lations, in the case of a plan maintained by an employer described in subsection (e)(1)(A), with respect to amounts invested in a lifetime income investment (as defined in section 401(a)(38)(B)(ii)), the date that is 90 days prior to the date that such lifetime income investment may no longer be held as an investment option under the plan,’’.
(2) DISTRIBUTION REQUIREMENT.—Paragraph (1) of section 457(d) of such Code is amended by striking ‘‘and’’ at the end of subparagraph (B), by striking the period at the end of subparagraph (C) and inserting ‘‘, and’’, and by inserting after subparagraph (C) the following new subparagraph:
‘‘(D) except as may be otherwise provided by regulations, in the case of amounts described in subparagraph (A)(iv), such amounts will be distributed only in the form of a qualified distribution (as defined in section 401(a)(38)(B)(i)) or a qualified plan distribution annuity contract (as defined in section 401(a)(38)(B)(iv)).’’.
(e) EFFECTIVE DATE.—The amendments made by this section shall apply to plan years beginning after December 31, 2019.
SEC. 110. TREATMENT OF CUSTODIAL ACCOUNTS ON TERMINATION OF SECTION 403(b) PLANS.
Not later than six months after the date of enactment of this Act, the Secretary of the Treasury shall issue guidance to provide that, if an employer terminates the plan under which amounts are contributed to a custodial account under subparagraph (A) of section 403(b)(7), the plan administrator or custodian may dis- tribute an individual custodial account in kind to a participant or beneficiary of the plan and the distributed custodial account shall be maintained by the custodian on a tax-deferred basis as a section 403(b)(7) custodial account, similar to the treatment of fully-paid individual annuity contracts under Revenue Ruling 2011– 7, until amounts are actually paid to the participant or beneficiary. The guidance shall provide further (i) that the section 403(b)(7) status of the distributed custodial account is generally maintained if the custodial account thereafter adheres to the requirements of section 403(b) that are in effect at the time of the distribution of the account and (ii) that a custodial account would not be consid- ered distributed to the participant or beneficiary if the employer has any material retained rights under the account (but the employer would not be treated as retaining material rights simply because the custodial account was originally opened under a group contract). Such guidance shall be retroactively effective for taxable years beginning after December 31, 2008.
SEC. 111. CLARIFICATION OF RETIREMENT INCOME ACCOUNT RULES RELATING TO CHURCH-CONTROLLED ORGANIZATIONS.
(a) IN GENERAL.—Subparagraph (B) of section 403(b)(9) of the Internal Revenue Code of 1986 is amended by inserting ‘‘(including an employee described in section 414(e)(3)(B))’’ after ‘‘employee described in paragraph (1)’’.
(b) EFFECTIVE DATE.—The amendment made by this section shall apply to years beginning before, on, or after the date of the enactment of this Act.

SEC. 112. QUALIFIED CASH OR DEFERRED ARRANGEMENTS MUST ALLOW LONG-TERM EMPLOYEES WORKING MORE THAN 500 BUT LESS THAN 1,000 HOURS PER YEAR TO PARTICIPATE.
(a) PARTICIPATION REQUIREMENT.—
(1) IN GENERAL.—Section 401(k)(2)(D) of the Internal Rev- enue Code of 1986 is amended to read as follows:
‘‘(D) which does not require, as a condition of participation in the arrangement, that an employee complete a period of service with the employer (or employers) maintaining the plan extending beyond the close of the earlier of—
‘‘(i) the period permitted under section 410(a)(1) (determined without regard to subparagraph (B)(i) thereof), or
‘‘(ii) subject to the provisions of paragraph (15), the first period of 3 consecutive 12-month periods during each of which the employee has at least 500 hours of service.’’.
(2) SPECIAL RULES.—Section 401(k) of such Code is amended by adding at the end the following new paragraph: ‘‘(15) SPECIAL RULES FOR PARTICIPATION REQUIREMENT FOR LONG-TERM, PART-TIME WORKERS.—For purposes of paragraph
(2)(D)(ii)—
‘‘(A) AGE REQUIREMENT MUST BE MET.—Paragraph
(2)(D)(ii) shall not apply to an employee unless the employee has met the requirement of section 410(a)(1)(A)(i) by the close of the last of the 12-month periods described in such paragraph.
‘‘(B) NONDISCRIMINATION AND TOP-HEAVY RULES NOT TO APPLY.—
‘‘(i) NONDISCRIMINATION RULES.—In the case of
employees who are eligible to participate in the arrangement solely by reason of paragraph (2)(D)(ii)— ‘‘(I) notwithstanding subsection (a)(4), an employer shall not be required to make nonelective
or matching contributions on behalf of such employees even if such contributions are made on behalf of other employees eligible to participate in the arrangement, and
‘‘(II) an employer may elect to exclude such employees from the application of subsection (a)(4), paragraphs (3), (12), and (13), subsection (m)(2), and section 410(b).
‘‘(ii) TOP-HEAVY RULES.—An employer may elect to exclude all employees who are eligible to participate in a plan maintained by the employer solely by reason of paragraph (2)(D)(ii) from the application of the vesting and benefit requirements under subsections
(b) and (c) of section 416.
‘‘(iii) VESTING.—For purposes of determining whether an employee described in clause (i) has a nonforfeitable right to employer contributions (other than contributions described in paragraph (3)(D)(i)) under the arrangement, each 12-month period for which the employee has at least 500 hours of service shall be treated as a year of service, and section

411(a)(6) shall be applied by substituting ‘at least 500 hours of service’ for ‘more than 500 hours of service’ in subparagraph (A) thereof.
‘‘(iv) EMPLOYEES WHO BECOME FULL-TIME
EMPLOYEES.—This subparagraph (other than clause (iii)) shall cease to apply to any employee as of the first plan year beginning after the plan year in which the employee meets the requirements of section 410(a)(1)(A)(ii) without regard to paragraph (2)(D)(ii). ‘‘(C) EXCEPTION FOR EMPLOYEES UNDER COLLECTIVELY
BARGAINED PLANS, ETC.—Paragraph (2)(D)(ii) shall not apply to employees described in section 410(b)(3).
‘‘(D) SPECIAL RULES.—
‘‘(i) TIME OF PARTICIPATION.—The rules of section 410(a)(4) shall apply to an employee eligible to partici- pate in an arrangement solely by reason of paragraph (2)(D)(ii).
‘‘(ii) 12-MONTH PERIODS.—12-month periods shall be determined in the same manner as under the last sentence of section 410(a)(3)(A).’’.
(b) EFFECTIVE DATE.—The amendments made by this section shall apply to plan years beginning after December 31, 2020, except that, for purposes of section 401(k)(2)(D)(ii) of the Internal Revenue Code of 1986 (as added by such amendments), 12-month periods beginning before January 1, 2021, shall not be taken into account.
SEC. 113. PENALTY-FREE WITHDRAWALS FROM RETIREMENT PLANS FOR INDIVIDUALS IN CASE OF BIRTH OF CHILD OR ADOP- TION.
(a) IN GENERAL.—Section 72(t)(2) of the Internal Revenue Code of 1986 is amended by adding at the end the following new subpara- graph:
‘‘(H) DISTRIBUTIONS FROM RETIREMENT PLANS IN CASE OF BIRTH OF CHILD OR ADOPTION.—
‘‘(i) IN GENERAL.—Any qualified birth or adoption distribution.
‘‘(ii) LIMITATION.—The aggregate amount which may be treated as qualified birth or adoption distribu- tions by any individual with respect to any birth or adoption shall not exceed $5,000.
‘‘(iii) QUALIFIED BIRTH OR ADOPTION DISTRIBU-
TION.—For purposes of this subparagraph—
‘‘(I) IN GENERAL.—The term ‘qualified birth or adoption distribution’ means any distribution from an applicable eligible retirement plan to an individual if made during the 1-year period begin- ning on the date on which a child of the individual is born or on which the legal adoption by the individual of an eligible adoptee is finalized.
‘‘(II) ELIGIBLE ADOPTEE.—The term ‘eligible adoptee’ means any individual (other than a child of the taxpayer’s spouse) who has not attained age 18 or is physically or mentally incapable of self-support.
‘‘(iv) TREATMENT OF PLAN DISTRIBUTIONS.—
‘‘(I) IN GENERAL.—If a distribution to an indi- vidual would (without regard to clause (ii)) be a

qualified birth or adoption distribution, a plan shall not be treated as failing to meet any require- ment of this title merely because the plan treats the distribution as a qualified birth or adoption distribution, unless the aggregate amount of such distributions from all plans maintained by the employer (and any member of any controlled group which includes the employer) to such individual exceeds $5,000.
‘‘(II) CONTROLLED GROUP.—For purposes of subclause (I), the term ‘controlled group’ means any group treated as a single employer under sub- section (b), (c), (m), or (o) of section 414.
‘‘(v) AMOUNT DISTRIBUTED MAY BE REPAID.—
‘‘(I) IN GENERAL.—Any individual who receives a qualified birth or adoption distribution may make one or more contributions in an aggregate amount not to exceed the amount of such distribu- tion to an applicable eligible retirement plan of which such individual is a beneficiary and to which a rollover contribution of such distribution could be made under section 402(c), 403(a)(4), 403(b)(8), 408(d)(3), or 457(e)(16), as the case may be.
‘‘(II) LIMITATION ON CONTRIBUTIONS TO APPLICABLE ELIGIBLE RETIREMENT PLANS OTHER
THAN IRAS.—The aggregate amount of contribu- tions made by an individual under subclause (I) to any applicable eligible retirement plan which is not an individual retirement plan shall not exceed the aggregate amount of qualified birth or adoption distributions which are made from such plan to such individual. Subclause (I) shall not apply to contributions to any applicable eligible retirement plan which is not an individual retire- ment plan unless the individual is eligible to make contributions (other than those described in sub- clause (I)) to such applicable eligible retirement plan.
‘‘(III) TREATMENT OF REPAYMENTS OF DISTRIBU- TIONS FROM APPLICABLE ELIGIBLE RETIREMENT
PLANS OTHER THAN IRAs.—If a contribution is made under subclause (I) with respect to a quali- fied birth or adoption distribution from an applicable eligible retirement plan other than an individual retirement plan, then the taxpayer shall, to the extent of the amount of the contribu- tion, be treated as having received such distribu- tion in an eligible rollover distribution (as defined in section 402(c)(4)) and as having transferred the amount to the applicable eligible retirement plan in a direct trustee to trustee transfer within 60 days of the distribution.
‘‘(IV) TREATMENT OF REPAYMENTS FOR DIS-
TRIBUTIONS FROM IRAS.—If a contribution is made under subclause (I) with respect to a qualified birth or adoption distribution from an individual retirement plan, then, to the extent of the amount

of the contribution, such distribution shall be treated as a distribution described in section 408(d)(3) and as having been transferred to the applicable eligible retirement plan in a direct trustee to trustee transfer within 60 days of the distribution.
‘‘(vi) DEFINITION AND SPECIAL RULES.—For pur-
poses of this subparagraph—
‘‘(I) APPLICABLE ELIGIBLE RETIREMENT PLAN.—
The term ‘applicable eligible retirement plan’ means an eligible retirement plan (as defined in section 402(c)(8)(B)) other than a defined benefit plan.
‘‘(II) EXEMPTION OF DISTRIBUTIONS FROM TRUSTEE TO TRUSTEE TRANSFER AND WITHHOLDING
RULES.—For purposes of sections 401(a)(31), 402(f), and 3405, a qualified birth or adoption distribution shall not be treated as an eligible rollover distribu- tion.
‘‘(III) TAXPAYER MUST INCLUDE TIN.—A dis-
tribution shall not be treated as a qualified birth or adoption distribution with respect to any child or eligible adoptee unless the taxpayer includes the name, age, and TIN of such child or eligible adoptee on the taxpayer’s return of tax for the taxable year.
‘‘(IV) DISTRIBUTIONS TREATED AS MEETING PLAN DISTRIBUTION REQUIREMENTS.—Any qualified
birth or adoption distribution shall be treated as meeting the requirements of sections 401(k)(2)(B)(i), 403(b)(7)(A)(ii), 403(b)(11), and
457(d)(1)(A).’’.
(b) EFFECTIVE DATE.—The amendments made by this section shall apply to distributions made after December 31, 2019.
SEC. 114. INCREASE IN AGE FOR REQUIRED BEGINNING DATE FOR MANDATORY DISTRIBUTIONS.
(a) IN GENERAL.—Section 401(a)(9)(C)(i)(I) of the Internal Rev- enue Code of 1986 is amended by striking ‘‘age 701?2’’ and inserting ‘‘age 72’’.
(b) SPOUSE BENEFICIARIES; SPECIAL RULE FOR OWNERS.—Sub- paragraphs (B)(iv)(I) and (C)(ii)(I) of section 401(a)(9) of such Code are each amended by striking ‘‘age 701?2’’ and inserting ‘‘age 72’’.
(c) CONFORMING AMENDMENTS.—The last sentence of section 408(b) of such Code is amended by striking ‘‘age 701?2’’ and inserting ‘‘age 72’’.
(d) EFFECTIVE DATE.—The amendments made by this section shall apply to distributions required to be made after December 31, 2019, with respect to individuals who attain age 701?2 after such date.
SEC. 115. SPECIAL RULES FOR MINIMUM FUNDING STANDARDS FOR COMMUNITY NEWSPAPER PLANS.
(a) AMENDMENT TO INTERNAL REVENUE CODE OF 1986.—Section 430 of the Internal Revenue Code of 1986 is amended by adding at the end the following new subsection:
‘‘(m) SPECIAL RULES FOR COMMUNITY NEWSPAPER PLANS.—

‘‘(1) IN GENERAL.—The plan sponsor of a community news- paper plan under which no participant has had the participant’s accrued benefit increased (whether because of service or com- pensation) after December 31, 2017, may elect to have the alternative standards described in paragraph (3) apply to such plan, and any plan sponsored by any member of the same controlled group.
‘‘(2) ELECTION.—An election under paragraph (1) shall be made at such time and in such manner as prescribed by the Secretary. Such election, once made with respect to a plan year, shall apply to all subsequent plan years unless revoked with the consent of the Secretary.
‘‘(3) ALTERNATIVE MINIMUM FUNDING STANDARDS.—The
alternative standards described in this paragraph are the fol- lowing:
‘‘(A) INTEREST RATES.—
‘‘(i) IN GENERAL.—Notwithstanding subsection (h)(2)(C) and except as provided in clause (ii), the first, second, and third segment rates in effect for any month for purposes of this section shall be 8 percent.
‘‘(ii) NEW BENEFIT ACCRUALS.—Notwithstanding subsection (h)(2), for purposes of determining the funding target and normal cost of a plan for any plan year, the present value of any benefits accrued or earned under the plan for a plan year with respect to which an election under paragraph (1) is in effect shall be determined on the basis of the United States Treasury obligation yield curve for the day that is the valuation date of such plan for such plan year. ‘‘(iii) UNITED STATES TREASURY OBLIGATION YIELD
CURVE.—For purposes of this subsection, the term ‘United States Treasury obligation yield curve’ means, with respect to any day, a yield curve which shall be prescribed by the Secretary for such day on interest- bearing obligations of the United States.
‘‘(B) SHORTFALL AMORTIZATION BASE.—
‘‘(i) PREVIOUS SHORTFALL AMORTIZATION BASES.—
The shortfall amortization bases determined under subsection (c)(3) for all plan years preceding the first plan year to which the election under paragraph (1) applies (and all shortfall amortization installments determined with respect to such bases) shall be reduced to zero under rules similar to the rules of subsection (c)(6).
‘‘(ii) NEW SHORTFALL AMORTIZATION BASE.—Not-
withstanding subsection (c)(3), the shortfall amortiza- tion base for the first plan year to which the election under paragraph (1) applies shall be the funding short- fall of such plan for such plan year (determined using the interest rates as modified under subparagraph (A)). ‘‘(C) DETERMINATION OF SHORTFALL AMORTIZATION
INSTALLMENTS.—
‘‘(i) 30-YEAR PERIOD.—Subparagraphs (A) and (B) of subsection (c)(2) shall be applied by substituting ‘30-plan-year’ for ‘7-plan-year’ each place it appears. ‘‘(ii) NO SPECIAL ELECTION.—The election under subparagraph (D) of subsection (c)(2) shall not apply

to any plan year to which the election under paragraph
(1) applies.
‘‘(D) EXEMPTION FROM AT-RISK TREATMENT.—Sub-
section (i) shall not apply.
‘‘(4) COMMUNITY NEWSPAPER PLAN.—For purposes of this subsection—
‘‘(A) IN GENERAL.—The term ‘community newspaper plan’ means a plan to which this section applies maintained by an employer which, as of December 31, 2017—
‘‘(i) publishes and distributes daily, either elec- tronically or in printed form, 1 or more community newspapers in a single State,
‘‘(ii) is not a company the stock of which is publicly traded (on a stock exchange or in an over-the-counter market), and is not controlled, directly or indirectly, by such a company,
‘‘(iii) is controlled, directly or indirectly—
‘‘(I) by 1 or more persons residing primarily in the State in which the community newspaper is published,
‘‘(II) for not less than 30 years by individuals who are members of the same family,
‘‘(III) by a trust created or organized in the State in which the community newspaper is pub- lished, the sole trustees of which are persons described in subclause (I) or (II),
‘‘(IV) by an entity which is described in section 501(c)(3) and exempt from taxation under section 501(a), which is organized and operated in the State in which the community newspaper is pub- lished, and the primary purpose of which is to benefit communities in such State, or
‘‘(V) by a combination of persons described in subclause (I), (III), or (IV), and
‘‘(iv) does not control, directly or indirectly, any newspaper in any other State.
‘‘(B) COMMUNITY NEWSPAPER.—The term ‘community newspaper’ means a newspaper which primarily serves a metropolitan statistical area, as determined by the Office of Management and Budget, with a population of not less than 100,000.
‘‘(C) CONTROL.—A person shall be treated as controlled by another person if such other person possesses, directly or indirectly, the power to direct or cause the direction and management of such person (including the power to elect a majority of the members of the board of directors of such person) through the ownership of voting securities. ‘‘(5) CONTROLLED GROUP.—For purposes of this subsection,
the term ‘controlled group’ means all persons treated as a single employer under subsection (b), (c), (m), or (o) of section 414 as of the date of the enactment of this subsection.’’.
(b) AMENDMENT TO EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974.—Section 303 of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1083) is amended by adding at the end the following new subsection:
‘‘(m) SPECIAL RULES FOR COMMUNITY NEWSPAPER PLANS.—

‘‘(1) IN GENERAL.—The plan sponsor of a community news- paper plan under which no participant has had the participant’s accrued benefit increased (whether because of service or com- pensation) after December 31, 2017, may elect to have the alternative standards described in paragraph (3) apply to such plan, and any plan sponsored by any member of the same controlled group.
‘‘(2) ELECTION.—An election under paragraph (1) shall be made at such time and in such manner as prescribed by the Secretary of the Treasury. Such election, once made with respect to a plan year, shall apply to all subsequent plan years unless revoked with the consent of the Secretary of the Treasury.
‘‘(3) ALTERNATIVE MINIMUM FUNDING STANDARDS.—The
alternative standards described in this paragraph are the fol- lowing:
‘‘(A) INTEREST RATES.—
‘‘(i) IN GENERAL.—Notwithstanding subsection (h)(2)(C) and except as provided in clause (ii), the first, second, and third segment rates in effect for any month for purposes of this section shall be 8 percent.
‘‘(ii) NEW BENEFIT ACCRUALS.—Notwithstanding subsection (h)(2), for purposes of determining the funding target and normal cost of a plan for any plan year, the present value of any benefits accrued or earned under the plan for a plan year with respect to which an election under paragraph (1) is in effect shall be determined on the basis of the United States Treasury obligation yield curve for the day that is the valuation date of such plan for such plan year. ‘‘(iii) UNITED STATES TREASURY OBLIGATION YIELD
CURVE.—For purposes of this subsection, the term ‘United States Treasury obligation yield curve’ means, with respect to any day, a yield curve which shall be prescribed by the Secretary of the Treasury for such day on interest-bearing obligations of the United States.
‘‘(B) SHORTFALL AMORTIZATION BASE.—
‘‘(i) PREVIOUS SHORTFALL AMORTIZATION BASES.—
The shortfall amortization bases determined under subsection (c)(3) for all plan years preceding the first plan year to which the election under paragraph (1) applies (and all shortfall amortization installments determined with respect to such bases) shall be reduced to zero under rules similar to the rules of subsection (c)(6).
‘‘(ii) NEW SHORTFALL AMORTIZATION BASE.—Not-
withstanding subsection (c)(3), the shortfall amortiza- tion base for the first plan year to which the election under paragraph (1) applies shall be the funding short- fall of such plan for such plan year (determined using the interest rates as modified under subparagraph (A)). ‘‘(C) DETERMINATION OF SHORTFALL AMORTIZATION
INSTALLMENTS.—
‘‘(i) 30-YEAR PERIOD.—Subparagraphs (A) and (B) of subsection (c)(2) shall be applied by substituting ‘30-plan-year’ for ‘7-plan-year’ each place it appears.

‘‘(ii) NO SPECIAL ELECTION.—The election under subparagraph (D) of subsection (c)(2) shall not apply to any plan year to which the election under paragraph
(1) applies.
‘‘(D) EXEMPTION FROM AT-RISK TREATMENT.—Sub-
section (i) shall not apply.
‘‘(4) COMMUNITY NEWSPAPER PLAN.—For purposes of this subsection—
‘‘(A) IN GENERAL.—The term ‘community newspaper plan’ means a plan to which this section applies maintained by an employer which, as of December 31, 2017—
‘‘(i) publishes and distributes daily, either elec- tronically or in printed form—
‘‘(I) a community newspaper, or
‘‘(II) 1 or more community newspapers in the same State,
‘‘(ii) is not a company the stock of which is publicly traded (on a stock exchange or in an over-the-counter market), and is not controlled, directly or indirectly, by such a company,
‘‘(iii) is controlled, directly or indirectly—
‘‘(I) by 1 or more persons residing primarily in the State in which the community newspaper is published,
‘‘(II) for not less than 30 years by individuals who are members of the same family,
‘‘(III) by a trust created or organized in the State in which the community newspaper is pub- lished, the sole trustees of which are persons described in subclause (I) or (II),
‘‘(IV) by an entity which is described in section 501(c)(3) of the Internal Revenue Code of 1986 and exempt from taxation under section 501(a) of such Code, which is organized and operated in the State in which the community newspaper is published, and the primary purpose of which is to benefit communities in such State, or
‘‘(V) by a combination of persons described in subclause (I), (III), or (IV), and
‘‘(iv) does not control, directly or indirectly, any newspaper in any other State.
‘‘(B) COMMUNITY NEWSPAPER.—The term ‘community newspaper’ means a newspaper which primarily serves a metropolitan statistical area, as determined by the Office of Management and Budget, with a population of not less than 100,000.
‘‘(C) CONTROL.—A person shall be treated as controlled by another person if such other person possesses, directly or indirectly, the power to direct or cause the direction and management of such person (including the power to elect a majority of the members of the board of directors of such person) through the ownership of voting securities. ‘‘(5) CONTROLLED GROUP.—For purposes of this subsection,
the term ‘controlled group’ means all persons treated as a single employer under subsection (b), (c), (m), or (o) of section
414 of the Internal Revenue Code of 1986 as of the date of the enactment of this subsection.

‘‘(6) EFFECT ON PREMIUM RATE CALCULATION.—Notwith-
standing any other provision of law or any regulation issued by the Pension Benefit Guaranty Corporation, in the case of a plan for which an election is made to apply the alternative standards described in paragraph (3), the additional premium under section 4006(a)(3)(E) shall be determined as if such elec- tion had not been made.’’.
(c) EFFECTIVE DATE.—The amendments made by this section shall apply to plan years ending after December 31, 2017.
SEC. 116. TREATING EXCLUDED DIFFICULTY OF CARE PAYMENTS AS COMPENSATION FOR DETERMINING RETIREMENT CON- TRIBUTION LIMITATIONS.
(a) INDIVIDUAL RETIREMENT ACCOUNTS.—
(1) IN GENERAL.—Section 408(o) of the Internal Revenue Code of 1986 is amended by adding at the end the following new paragraph:
‘‘(5) SPECIAL RULE FOR DIFFICULTY OF CARE PAYMENTS
EXCLUDED FROM GROSS INCOME.—In the case of an individual who for a taxable year excludes from gross income under section
131 a qualified foster care payment which is a difficulty of care payment, if—
‘‘(A) the deductible amount in effect for the taxable year under subsection (b), exceeds
‘‘(B) the amount of compensation includible in the individual’s gross income for the taxable year,
the individual may elect to increase the nondeductible limit under paragraph (2) for the taxable year by an amount equal to the lesser of such excess or the amount so excluded.’’.
(2) EFFECTIVE DATE.—The amendments made by this sub- section shall apply to contributions after the date of the enact- ment of this Act.
(b) DEFINED CONTRIBUTION PLANS.—
(1) IN GENERAL.—Section 415(c) of such Code is amended by adding at the end the following new paragraph:
‘‘(8) SPECIAL RULE FOR DIFFICULTY OF CARE PAYMENTS EXCLUDED FROM GROSS INCOME.—
‘‘(A) IN GENERAL.—For purposes of paragraph (1)(B), in the case of an individual who for a taxable year excludes from gross income under section 131 a qualified foster care payment which is a difficulty of care payment, the participant’s compensation, or earned income, as the case may be, shall be increased by the amount so excluded. ‘‘(B) CONTRIBUTIONS ALLOCABLE TO DIFFICULTY OF CARE
PAYMENTS TREATED AS AFTER-TAX.—Any contribution by the participant which is allowable due to such increase— ‘‘(i) shall be treated for purposes of this title as
investment in the contract, and
‘‘(ii) shall not cause a plan (and any arrangement which is part of such plan) to be treated as failing to meet any requirements of this chapter solely by reason of allowing any such contributions.’’.
(2) EFFECTIVE DATE.—The amendment made by this sub- section shall apply to plan years beginning after December 31, 2015.

TITLE II—ADMINISTRATIVE IMPROVEMENTS
SEC. 201. PLAN ADOPTED BY FILING DUE DATE FOR YEAR MAY BE TREATED AS IN EFFECT AS OF CLOSE OF YEAR.
(a) IN GENERAL.—Subsection (b) of section 401 of the Internal Revenue Code of 1986 is amended—
(1) by striking ‘‘RETROACTIVE CHANGES IN PLAN.—A stock bonus’’ and inserting ‘‘PLAN AMENDMENTS.—
‘‘(1) CERTAIN RETROACTIVE CHANGES IN PLAN.—A stock
bonus’’; and
(2) by adding at the end the following new paragraph: ‘‘(2) ADOPTION OF PLAN.—If an employer adopts a stock bonus, pension, profit-sharing, or annuity plan after the close of a taxable year but before the time prescribed by law for filing the return of the employer for the taxable year (including extensions thereof), the employer may elect to treat the plan as having been adopted as of the last day of the taxable year.’’.
(b) EFFECTIVE DATE.—The amendments made by this section shall apply to plans adopted for taxable years beginning after December 31, 2019.
SEC. 202. COMBINED ANNUAL REPORT FOR GROUP OF PLANS.
(a) IN GENERAL.—The Secretary of the Treasury and the Sec- retary of Labor shall, in cooperation, modify the returns required under section 6058 of the Internal Revenue Code of 1986 and the reports required by section 104 of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1024) so that all members of a group of plans described in subsection (c) may file a single aggregated annual return or report satisfying the requirements of both such sections.
(b) ADMINISTRATIVE REQUIREMENTS.—In developing the consoli- dated return or report under subsection (a), the Secretary of the Treasury and the Secretary of Labor may require such return or report to include any information regarding each plan in the group as such Secretaries determine is necessary or appropriate for the enforcement and administration of the Internal Revenue Code of 1986 and the Employee Retirement Income Security Act of 1974 and shall require such information as will enable a partici- pant in a plan to identify any aggregated return or report filed with respect to the plan.
(c) PLANS DESCRIBED.—A group of plans is described in this subsection if all plans in the group—
(1) are individual account plans or defined contribution plans (as defined in section 3(34) of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1002(34)) or in section 414(i) of the Internal Revenue Code of 1986);
(2) have—
(A) the same trustee (as described in section 403(a) of such Act (29 U.S.C. 1103(a)));
(B) the same one or more named fiduciaries (as described in section 402(a) of such Act (29 U.S.C. 1102(a)));
(C) the same administrator (as defined in section 3(16)(A) of such Act (29 U.S.C. 1002(16)(A))) and plan administrator (as defined in section 414(g) of the Internal Revenue Code of 1986); and

(D) plan years beginning on the same date; and
(3) provide the same investments or investment options to participants and beneficiaries.
A plan not subject to title I of the Employee Retirement Income Security Act of 1974 shall be treated as meeting the requirements of paragraph (2) as part of a group of plans if the same person that performs each of the functions described in such paragraph, as applicable, for all other plans in such group performs each of such functions for such plan.
(d) CLARIFICATION RELATING TO ELECTRONIC FILING OF
RETURNS FOR DEFERRED COMPENSATION PLANS.—
(1) IN GENERAL.—Section 6011(e) of the Internal Revenue Code of 1986 is amended by adding at the end the following new paragraph:
‘‘(6) APPLICATION OF NUMERICAL LIMITATION TO RETURNS RELATING TO DEFERRED COMPENSATION PLANS.—For purposes
of applying the numerical limitation under paragraph (2)(A) to any return required under section 6058, information regarding each plan for which information is provided on such return shall be treated as a separate return.’’.
(2) EFFECTIVE DATE.—The amendment made by paragraph
(1) shall apply to returns required to be filed with respect to plan years beginning after December 31, 2019.
(e) EFFECTIVE DATE.—The modification required by subsection
(a) shall be implemented not later than January 1, 2022, and shall apply to returns and reports for plan years beginning after December 31, 2021.
SEC. 203. DISCLOSURE REGARDING LIFETIME INCOME.
(a) IN GENERAL.—Subparagraph (B) of section 105(a)(2) of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1025(a)(2)) is amended—
(1) in clause (i), by striking ‘‘and’’ at the end;
(2) in clause (ii), by striking ‘‘diversification.’’ and inserting ‘‘diversification, and’’; and
(3) by inserting at the end the following:
‘‘(iii) the lifetime income disclosure described in subparagraph (D)(i).
In the case of pension benefit statements described in clause (i) of paragraph (1)(A), a lifetime income disclosure under clause (iii) of this subparagraph shall be required to be included in only one pension benefit statement during any one 12-month period.’’.
(b) LIFETIME INCOME.—Paragraph (2) of section 105(a) of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1025(a)) is amended by adding at the end the following new subparagraph:
‘‘(D) LIFETIME INCOME DISCLOSURE.— ‘‘(i) IN GENERAL.—
‘‘(I) DISCLOSURE.—A lifetime income disclosure shall set forth the lifetime income stream equiva- lent of the total benefits accrued with respect to the participant or beneficiary.
‘‘(II) LIFETIME INCOME STREAM EQUIVALENT OF
THE TOTAL BENEFITS ACCRUED.—For purposes of this subparagraph, the term ‘lifetime income stream equivalent of the total benefits accrued’

means the amount of monthly payments the participant or beneficiary would receive if the total accrued benefits of such participant or beneficiary were used to provide lifetime income streams described in subclause (III), based on assumptions specified in rules prescribed by the Secretary.
‘‘(III) LIFETIME INCOME STREAMS.—The life-
time income streams described in this subclause are a qualified joint and survivor annuity (as defined in section 205(d)), based on assumptions specified in rules prescribed by the Secretary, including the assumption that the participant or beneficiary has a spouse of equal age, and a single life annuity. Such lifetime income streams may have a term certain or other features to the extent permitted under rules prescribed by the Secretary. ‘‘(ii) MODEL DISCLOSURE.—Not later than 1 year
after the date of the enactment of the Setting Every Community Up for Retirement Enhancement Act of 2019, the Secretary shall issue a model lifetime income disclosure, written in a manner so as to be understood by the average plan participant, which—
‘‘(I) explains that the lifetime income stream equivalent is only provided as an illustration;
‘‘(II) explains that the actual payments under the lifetime income stream described in clause (i)(III) which may be purchased with the total benefits accrued will depend on numerous factors and may vary substantially from the lifetime income stream equivalent in the disclosures;
‘‘(III) explains the assumptions upon which the lifetime income stream equivalent was deter- mined; and
‘‘(IV) provides such other similar explanations as the Secretary considers appropriate.
‘‘(iii) ASSUMPTIONS AND RULES.—Not later than 1 year after the date of the enactment of the Setting Every Community Up for Retirement Enhancement Act of 2019, the Secretary shall—
‘‘(I) prescribe assumptions which administra- tors of individual account plans may use in con- verting total accrued benefits into lifetime income stream equivalents for purposes of this subpara- graph; and
‘‘(II) issue interim final rules under clause (i). In prescribing assumptions under subclause (I), the Secretary may prescribe a single set of specific assump- tions (in which case the Secretary may issue tables or factors which facilitate such conversions), or ranges of permissible assumptions. To the extent that an accrued benefit is or may be invested in a lifetime income stream described in clause (i)(III), the assump- tions prescribed under subclause (I) shall, to the extent appropriate, permit administrators of individual account plans to use the amounts payable under such lifetime income stream as a lifetime income stream equivalent.

‘‘(iv) LIMITATION ON LIABILITY.—No plan fiduciary, plan sponsor, or other person shall have any liability under this title solely by reason of the provision of lifetime income stream equivalents which are derived in accordance with the assumptions and rules described in clause (iii) and which include the explanations con- tained in the model lifetime income disclosure described in clause (ii). This clause shall apply without regard to whether the provision of such lifetime income stream equivalent is required by subparagraph (B)(iii). ‘‘(v) EFFECTIVE DATE.—The requirement in subparagraph (B)(iii) shall apply to pension benefit statements furnished more than 12 months after the
latest of the issuance by the Secretary of—
‘‘(I) interim final rules under clause (i);
‘‘(II) the model disclosure under clause (ii);
or
‘‘(III) the assumptions under clause (iii).’’.
SEC. 204. FIDUCIARY SAFE HARBOR FOR SELECTION OF LIFETIME INCOME PROVIDER.
Section 404 of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1104) is amended by adding at the end the following:
‘‘(e) SAFE HARBOR FOR ANNUITY SELECTION.—
‘‘(1) IN GENERAL.—With respect to the selection of an insurer for a guaranteed retirement income contract, the requirements of subsection (a)(1)(B) will be deemed to be satis- fied if a fiduciary—
‘‘(A) engages in an objective, thorough, and analytical search for the purpose of identifying insurers from which to purchase such contracts;
‘‘(B) with respect to each insurer identified under subparagraph (A)—
‘‘(i) considers the financial capability of such insurer to satisfy its obligations under the guaranteed retirement income contract; and
‘‘(ii) considers the cost (including fees and commis- sions) of the guaranteed retirement income contract offered by the insurer in relation to the benefits and product features of the contract and administrative services to be provided under such contract; and
‘‘(C) on the basis of such consideration, concludes that—
‘‘(i) at the time of the selection, the insurer is financially capable of satisfying its obligations under the guaranteed retirement income contract; and
‘‘(ii) the relative cost of the selected guaranteed retirement income contract as described in subpara- graph (B)(ii) is reasonable.
‘‘(2) FINANCIAL CAPABILITY OF THE INSURER.—A fiduciary
will be deemed to satisfy the requirements of paragraphs (1)(B)(i) and (1)(C)(i) if—
‘‘(A) the fiduciary obtains written representations from the insurer that—
‘‘(i) the insurer is licensed to offer guaranteed retirement income contracts;

‘‘(ii) the insurer, at the time of selection and for each of the immediately preceding 7 plan years—
‘‘(I) operates under a certificate of authority from the insurance commissioner of its domiciliary State which has not been revoked or suspended; ‘‘(II) has filed audited financial statements in accordance with the laws of its domiciliary State under applicable statutory accounting principles; ‘‘(III) maintains (and has maintained) reserves which satisfies all the statutory requirements of all States where the insurer does business; and ‘‘(IV) is not operating under an order of super-
vision, rehabilitation, or liquidation;
‘‘(iii) the insurer undergoes, at least every 5 years, a financial examination (within the meaning of the law of its domiciliary State) by the insurance commis- sioner of the domiciliary State (or representative, des- ignee, or other party approved by such commissioner); and
‘‘(iv) the insurer will notify the fiduciary of any change in circumstances occurring after the provision of the representations in clauses (i), (ii), and (iii) which would preclude the insurer from making such represen- tations at the time of issuance of the guaranteed retire- ment income contract; and
‘‘(B) after receiving such representations and as of the time of selection, the fiduciary has not received any notice described in subparagraph (A)(iv) and is in posses- sion of no other information which would cause the fidu- ciary to question the representations provided.
‘‘(3) NO REQUIREMENT TO SELECT LOWEST COST.—Nothing
in this subsection shall be construed to require a fiduciary to select the lowest cost contract. A fiduciary may consider the value of a contract, including features and benefits of the contract and attributes of the insurer (including, without limita- tion, the insurer’s financial strength) in conjunction with the cost of the contract.
‘‘(4) TIME OF SELECTION.—
‘‘(A) IN GENERAL.—For purposes of this subsection, the time of selection is—
‘‘(i) the time that the insurer and the contract are selected for distribution of benefits to a specific participant or beneficiary; or
‘‘(ii) if the fiduciary periodically reviews the con- tinuing appropriateness of the conclusion described in paragraph (1)(C) with respect to a selected insurer, taking into account the considerations described in such paragraph, the time that the insurer and the contract are selected to provide benefits at future dates to participants or beneficiaries under the plan.
Nothing in the preceding sentence shall be construed to require the fiduciary to review the appropriateness of a selection after the purchase of a contract for a participant or beneficiary.

‘‘(B) PERIODIC REVIEW.—A fiduciary will be deemed to have conducted the periodic review described in subpara- graph (A)(ii) if the fiduciary obtains the written representa- tions described in clauses (i), (ii), and (iii) of paragraph (2)(A) from the insurer on an annual basis, unless the fiduciary receives any notice described in paragraph (2)(A)(iv) or otherwise becomes aware of facts that would cause the fiduciary to question such representations.
‘‘(5) LIMITED LIABILITY.—A fiduciary which satisfies the requirements of this subsection shall not be liable following the distribution of any benefit, or the investment by or on behalf of a participant or beneficiary pursuant to the selected guaranteed retirement income contract, for any losses that may result to the participant or beneficiary due to an insurer’s inability to satisfy its financial obligations under the terms of such contract.
‘‘(6) DEFINITIONS.—For purposes of this subsection—
‘‘(A) INSURER.—The term ‘insurer’ means an insurance company, insurance service, or insurance organization, including affiliates of such companies.
‘‘(B) GUARANTEED RETIREMENT INCOME CONTRACT.—
The term ‘guaranteed retirement income contract’ means an annuity contract for a fixed term or a contract (or provision or feature thereof) which provides guaranteed benefits annually (or more frequently) for at least the remainder of the life of the participant or the joint lives of the participant and the participant’s designated bene- ficiary as part of an individual account plan.’’.
SEC. 205. MODIFICATION OF NONDISCRIMINATION RULES TO PROTECT OLDER, LONGER SERVICE PARTICIPANTS.
(a) IN GENERAL.—Section 401 of the Internal Revenue Code of 1986 is amended—
(1) by redesignating subsection (o) as subsection (p); and
(2) by inserting after subsection (n) the following new sub- section:
‘‘(o) SPECIAL RULES FOR APPLYING NONDISCRIMINATION RULES TO PROTECT OLDER, LONGER SERVICE AND GRANDFATHERED PARTICI- PANTS.—
‘‘(1) TESTING OF DEFINED BENEFIT PLANS WITH CLOSED CLASSES OF PARTICIPANTS.—
‘‘(A) BENEFITS, RIGHTS, OR FEATURES PROVIDED TO
CLOSED CLASSES.—A defined benefit plan which provides benefits, rights, or features to a closed class of participants shall not fail to satisfy the requirements of subsection (a)(4) by reason of the composition of such closed class or the benefits, rights, or features provided to such closed class, if—
‘‘(i) for the plan year as of which the class closes and the 2 succeeding plan years, such benefits, rights, and features satisfy the requirements of subsection (a)(4) (without regard to this subparagraph but taking into account the rules of subparagraph (I)),
‘‘(ii) after the date as of which the class was closed, any plan amendment which modifies the closed class or the benefits, rights, and features provided to such

closed class does not discriminate significantly in favor of highly compensated employees, and
‘‘(iii) the class was closed before April 5, 2017, or the plan is described in subparagraph (C).
‘‘(B) AGGREGATE TESTING WITH DEFINED CONTRIBUTION PLANS PERMITTED ON A BENEFITS BASIS.—
‘‘(i) IN GENERAL.—For purposes of determining compliance with subsection (a)(4) and section 410(b), a defined benefit plan described in clause (iii) may be aggregated and tested on a benefits basis with 1 or more defined contribution plans, including with the portion of 1 or more defined contribution plans which— ‘‘(I) provides matching contributions (as
defined in subsection (m)(4)(A)),
‘‘(II) provides annuity contracts described in section 403(b) which are purchased with matching contributions or nonelective contributions, or
‘‘(III) consists of an employee stock ownership plan (within the meaning of section 4975(e)(7)) or a tax credit employee stock ownership plan (within the meaning of section 409(a)).
‘‘(ii) SPECIAL RULES FOR MATCHING CONTRIBU-
TIONS.—For purposes of clause (i), if a defined benefit plan is aggregated with a portion of a defined contribu- tion plan providing matching contributions—
‘‘(I) such defined benefit plan must also be aggregated with any portion of such defined con- tribution plan which provides elective deferrals described in subparagraph (A) or (C) of section 402(g)(3), and
‘‘(II) such matching contributions shall be treated in the same manner as nonelective con- tributions, including for purposes of applying the rules of subsection (l).
‘‘(iii) PLANS DESCRIBED.—A defined benefit plan is described in this clause if—
‘‘(I) the plan provides benefits to a closed class of participants,
‘‘(II) for the plan year as of which the class closes and the 2 succeeding plan years, the plan satisfies the requirements of section 410(b) and subsection (a)(4) (without regard to this subpara- graph but taking into account the rules of subpara- graph (I)),
‘‘(III) after the date as of which the class was closed, any plan amendment which modifies the closed class or the benefits provided to such closed class does not discriminate significantly in favor of highly compensated employees, and
‘‘(IV) the class was closed before April 5, 2017, or the plan is described in subparagraph (C).
‘‘(C) PLANS DESCRIBED.—A plan is described in this subparagraph if, taking into account any predecessor plan—
‘‘(i) such plan has been in effect for at least 5 years as of the date the class is closed, and

‘‘(ii) during the 5-year period preceding the date the class is closed, there has not been a substantial increase in the coverage or value of the benefits, rights, or features described in subparagraph (A) or in the coverage or benefits under the plan described in subparagraph (B)(iii) (whichever is applicable).
‘‘(D) DETERMINATION OF SUBSTANTIAL INCREASE FOR
BENEFITS, RIGHTS, AND FEATURES.—In applying subpara- graph (C)(ii) for purposes of subparagraph (A)(iii), a plan shall be treated as having had a substantial increase in coverage or value of the benefits, rights, or features described in subparagraph (A) during the applicable 5- year period only if, during such period—
‘‘(i) the number of participants covered by such benefits, rights, or features on the date such period ends is more than 50 percent greater than the number of such participants on the first day of the plan year in which such period began, or
‘‘(ii) such benefits, rights, and features have been modified by 1 or more plan amendments in such a way that, as of the date the class is closed, the value of such benefits, rights, and features to the closed class as a whole is substantially greater than the value as of the first day of such 5-year period, solely as a result of such amendments.
‘‘(E) DETERMINATION OF SUBSTANTIAL INCREASE FOR AGGREGATE TESTING ON BENEFITS BASIS.—In applying
subparagraph (C)(ii) for purposes of subparagraph (B)(iii)(IV), a plan shall be treated as having had a substan- tial increase in coverage or benefits during the applicable 5-year period only if, during such period—
‘‘(i) the number of participants benefitting under the plan on the date such period ends is more than
50 percent greater than the number of such partici- pants on the first day of the plan year in which such period began, or
‘‘(ii) the average benefit provided to such partici- pants on the date such period ends is more than 50 percent greater than the average benefit provided on the first day of the plan year in which such period began.
‘‘(F) CERTAIN EMPLOYEES DISREGARDED.—For purposes
of subparagraphs (D) and (E), any increase in coverage or value or in coverage or benefits, whichever is applicable, which is attributable to such coverage and value or cov- erage and benefits provided to employees—
‘‘(i) who became participants as a result of a merger, acquisition, or similar event which occurred during the 7-year period preceding the date the class is closed, or
‘‘(ii) who became participants by reason of a merger of the plan with another plan which had been in effect for at least 5 years as of the date of the merger,
shall be disregarded, except that clause (ii) shall apply for purposes of subparagraph (D) only if, under the merger, the benefits, rights, or features under 1 plan are conformed

to the benefits, rights, or features of the other plan prospec- tively.
‘‘(G) RULES RELATING TO AVERAGE BENEFIT.—For pur-
poses of subparagraph (E)—
‘‘(i) the average benefit provided to participants under the plan will be treated as having remained the same between the 2 dates described in subpara- graph (E)(ii) if the benefit formula applicable to such participants has not changed between such dates, and ‘‘(ii) if the benefit formula applicable to 1 or more participants under the plan has changed between such 2 dates, then the average benefit under the plan shall be considered to have increased by more than 50 per-
cent only if—
‘‘(I) the total amount determined under section 430(b)(1)(A)(i) for all participants benefitting under the plan for the plan year in which the 5-year period described in subparagraph (E) ends, exceeds ‘‘(II) the total amount determined under sec- tion 430(b)(1)(A)(i) for all such participants for such plan year, by using the benefit formula in effect for each such participant for the first plan
year in such 5-year period,
by more than 50 percent. In the case of a CSEC plan (as defined in section 414(y)), the normal cost of the plan (as determined under section 433(j)(1)(B)) shall be used in lieu of the amount determined under section 430(b)(1)(A)(i).
‘‘(H) TREATMENT AS SINGLE PLAN.—For purposes of sub- paragraphs (E) and (G), a plan described in section 413(c) shall be treated as a single plan rather than as separate plans maintained by each employer in the plan.
‘‘(I) SPECIAL RULES.—For purposes of subparagraphs (A)(i) and (B)(iii)(II), the following rules shall apply:
‘‘(i) In applying section 410(b)(6)(C), the closing of the class of participants shall not be treated as a significant change in coverage under section 410(b)(6)(C)(i)(II).
‘‘(ii) 2 or more plans shall not fail to be eligible to be aggregated and treated as a single plan solely by reason of having different plan years.
‘‘(iii) Changes in the employee population shall be disregarded to the extent attributable to individuals who become employees or cease to be employees, after the date the class is closed, by reason of a merger, acquisition, divestiture, or similar event.
‘‘(iv) Aggregation and all other testing methodolo- gies otherwise applicable under subsection (a)(4) and section 410(b) may be taken into account.
The rule of clause (ii) shall also apply for purposes of determining whether plans to which subparagraph (B)(i) applies may be aggregated and treated as 1 plan for pur- poses of determining whether such plans meet the require- ments of subsection (a)(4) and section 410(b).
‘‘(J) SPUN-OFF PLANS.—For purposes of this paragraph, if a portion of a defined benefit plan described in subpara- graph (A) or (B)(iii) is spun off to another employer and

the spun-off plan continues to satisfy the requirements of—
‘‘(i) subparagraph (A)(i) or (B)(iii)(II), whichever is applicable, if the original plan was still within the 3-year period described in such subparagraph at the time of the spin off, and
‘‘(ii) subparagraph (A)(ii) or (B)(iii)(III), whichever is applicable,
the treatment under subparagraph (A) or (B) of the spun- off plan shall continue with respect to such other employer. ‘‘(2) TESTING OF DEFINED CONTRIBUTION PLANS.—
‘‘(A) TESTING ON A BENEFITS BASIS.—A defined con-
tribution plan shall be permitted to be tested on a benefits basis if—
‘‘(i) such defined contribution plan provides make- whole contributions to a closed class of participants whose accruals under a defined benefit plan have been reduced or eliminated,
‘‘(ii) for the plan year of the defined contribution plan as of which the class eligible to receive such make-whole contributions closes and the 2 succeeding plan years, such closed class of participants satisfies the requirements of section 410(b)(2)(A)(i) (determined by applying the rules of paragraph (1)(I)),
‘‘(iii) after the date as of which the class was closed, any plan amendment to the defined contribution plan which modifies the closed class or the allocations, benefits, rights, and features provided to such closed class does not discriminate significantly in favor of highly compensated employees, and
‘‘(iv) the class was closed before April 5, 2017, or the defined benefit plan under clause (i) is described in paragraph (1)(C) (as applied for purposes of para- graph (1)(B)(iii)(IV)).
‘‘(B) AGGREGATION WITH PLANS INCLUDING MATCHING CONTRIBUTIONS.—
‘‘(i) IN GENERAL.—With respect to 1 or more defined contribution plans described in subparagraph (A), for purposes of determining compliance with subsection (a)(4) and section 410(b), the portion of such plans which provides make-whole contributions or other non- elective contributions may be aggregated and tested on a benefits basis with the portion of 1 or more other defined contribution plans which—
‘‘(I) provides matching contributions (as defined in subsection (m)(4)(A)),
‘‘(II) provides annuity contracts described in section 403(b) which are purchased with matching contributions or nonelective contributions, or
‘‘(III) consists of an employee stock ownership plan (within the meaning of section 4975(e)(7)) or a tax credit employee stock ownership plan (within the meaning of section 409(a)).
‘‘(ii) SPECIAL RULES FOR MATCHING CONTRIBU-
TIONS.—Rules similar to the rules of paragraph (1)(B)(ii) shall apply for purposes of clause (i).

‘‘(C) SPECIAL RULES FOR TESTING DEFINED CONTRIBU- TION PLAN FEATURES PROVIDING MATCHING CONTRIBUTIONS TO CERTAIN OLDER, LONGER SERVICE PARTICIPANTS.—In the
case of a defined contribution plan which provides benefits, rights, or features to a closed class of participants whose accruals under a defined benefit plan have been reduced or eliminated, the plan shall not fail to satisfy the require- ments of subsection (a)(4) solely by reason of the composi- tion of the closed class or the benefits, rights, or features provided to such closed class if the defined contribution plan and defined benefit plan otherwise meet the require- ments of subparagraph (A) but for the fact that the make- whole contributions under the defined contribution plan are made in whole or in part through matching contribu- tions.
‘‘(D) SPUN-OFF PLANS.—For purposes of this paragraph, if a portion of a defined contribution plan described in subparagraph (A) or (C) is spun off to another employer, the treatment under subparagraph (A) or (C) of the spun- off plan shall continue with respect to the other employer if such plan continues to comply with the requirements of clauses (ii) (if the original plan was still within the 3-year period described in such clause at the time of the spin off) and (iii) of subparagraph (A), as determined for purposes of subparagraph (A) or (C), whichever is applicable.
‘‘(3) DEFINITIONS AND SPECIAL RULE.—For purposes of this subsection—
‘‘(A) MAKE-WHOLE CONTRIBUTIONS.—Except as other-
wise provided in paragraph (2)(C), the term ‘make-whole contributions’ means nonelective allocations for each employee in the class which are reasonably calculated, in a consistent manner, to replace some or all of the retire- ment benefits which the employee would have received under the defined benefit plan and any other plan or quali- fied cash or deferred arrangement under subsection (k)(2) if no change had been made to such defined benefit plan and such other plan or arrangement. For purposes of the preceding sentence, consistency shall not be required with respect to employees who were subject to different benefit formulas under the defined benefit plan.
‘‘(B) REFERENCES TO CLOSED CLASS OF PARTICIPANTS.—
References to a closed class of participants and similar references to a closed class shall include arrangements under which 1 or more classes of participants are closed, except that 1 or more classes of participants closed on different dates shall not be aggregated for purposes of determining the date any such class was closed.
‘‘(C) HIGHLY COMPENSATED EMPLOYEE.—The term
‘highly compensated employee’ has the meaning given such term in section 414(q).’’.
(b) PARTICIPATION REQUIREMENTS.—Paragraph (26) of section 401(a) of the Internal Revenue Code of 1986 is amended by adding at the end the following new subparagraph:
‘‘(I) PROTECTED PARTICIPANTS.—
‘‘(i) IN GENERAL.—A plan shall be deemed to satisfy the requirements of subparagraph (A) if—

‘‘(I) the plan is amended—
‘‘(aa) to cease all benefit accruals, or
‘‘(bb) to provide future benefit accruals only to a closed class of participants,
‘‘(II) the plan satisfies subparagraph (A) (with- out regard to this subparagraph) as of the effective date of the amendment, and
‘‘(III) the amendment was adopted before April 5, 2017, or the plan is described in clause (ii). ‘‘(ii) PLANS DESCRIBED.—A plan is described in this
clause if the plan would be described in subsection (o)(1)(C), as applied for purposes of subsection (o)(1)(B)(iii)(IV) and by treating the effective date of the amendment as the date the class was closed for purposes of subsection (o)(1)(C).
‘‘(iii) SPECIAL RULES.—For purposes of clause (i)(II), in applying section 410(b)(6)(C), the amendments described in clause (i) shall not be treated as a signifi- cant change in coverage under section 410(b)(6)(C)(i)(II).
‘‘(iv) SPUN-OFF PLANS.—For purposes of this subparagraph, if a portion of a plan described in clause
(i) is spun off to another employer, the treatment under clause (i) of the spun-off plan shall continue with respect to the other employer.’’.
(c) EFFECTIVE DATE.—
(1) IN GENERAL.—Except as provided in paragraph (2), the amendments made by this section shall take effect on the date of the enactment of this Act, without regard to whether any plan modifications referred to in such amendments are adopted or effective before, on, or after such date of enactment.
(2) SPECIAL RULES.—
(A) ELECTION OF EARLIER APPLICATION.—At the election of the plan sponsor, the amendments made by this section shall apply to plan years beginning after December 31, 2013.
(B) CLOSED CLASSES OF PARTICIPANTS.—For purposes of paragraphs (1)(A)(iii), (1)(B)(iii)(IV), and (2)(A)(iv) of sec- tion 401(o) of the Internal Revenue Code of 1986 (as added by this section), a closed class of participants shall be treated as being closed before April 5, 2017, if the plan sponsor’s intention to create such closed class is reflected in formal written documents and communicated to partici- pants before such date.
(C) CERTAIN POST-ENACTMENT PLAN AMENDMENTS.—A plan shall not be treated as failing to be eligible for the application of section 401(o)(1)(A), 401(o)(1)(B)(iii), or 401(a)(26) of such Code (as added by this section) to such plan solely because in the case of—
(i) such section 401(o)(1)(A), the plan was amended before the date of the enactment of this Act to eliminate 1 or more benefits, rights, or features, and is further amended after such date of enactment to provide such previously eliminated benefits, rights, or features to a closed class of participants, or
(ii) such section 401(o)(1)(B)(iii) or section 401(a)(26), the plan was amended before the date of

the enactment of this Act to cease all benefit accruals, and is further amended after such date of enactment to provide benefit accruals to a closed class of partici- pants.
Any such section shall only apply if the plan otherwise meets the requirements of such section and in applying such section, the date the class of participants is closed shall be the effective date of the later amendment.
SEC. 206. MODIFICATION OF PBGC PREMIUMS FOR CSEC PLANS.
(a) FLAT RATE PREMIUM.—Subparagraph (A) of section 4006(a)(3) of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1306(a)(3)) is amended—
(1) in clause (i), by striking ‘‘plan,’’ and inserting ‘‘plan other than a CSEC plan (as defined in section 210(f)(1))’’;
(2) in clause (v), by striking ‘‘or’’ at the end;
(3) in clause (vi), by striking the period at the end and inserting ‘‘, or’’; and
(4) by adding at the end the following new clause:
‘‘(vii) in the case of a CSEC plan (as defined in section 210(f)(1)), for plan years beginning after December 31, 2018, for each individual who is a partici- pant in such plan during the plan year an amount equal to the sum of—
‘‘(I) the additional premium (if any) deter- mined under subparagraph (E), and
‘‘(II) $19.’’.
(b) VARIABLE RATE PREMIUM.—
(1) UNFUNDED VESTED BENEFITS.—
(A) IN GENERAL.—Subparagraph (E) of section 4006(a)(3) of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1306(a)(3)) is amended by adding at the end the following new clause:
‘‘(v) For purposes of clause (ii), in the case of a CSEC plan (as defined in section 210(f)(1)), the term ‘unfunded vested benefits’ means, for plan years beginning after December 31, 2018, the excess (if any) of—
‘‘(I) the funding liability of the plan as determined under section 306(j)(5)(C) for the plan year by only taking into account vested benefits, over
‘‘(II) the fair market value of plan assets for the plan year which are held by the plan on the valuation date.’’.
(B) CONFORMING AMENDMENT.—Clause (iii) of section 4006(a)(3)(E) of such Act (29 U.S.C. 1306(a)(3)(E)) is amended by striking ‘‘For purposes’’ and inserting ‘‘Except as provided in clause (v), for purposes’’.
(2) APPLICABLE DOLLAR AMOUNT.—
(A) IN GENERAL.—Paragraph (8) of section 4006(a) of such Act (29 U.S.C. 1306(a)) is amended by adding at the end the following new subparagraph:
‘‘(E) CSEC PLANS.—In the case of a CSEC plan (as defined in section 210(f)(1)), the applicable dollar amount shall be $9.’’.
(B) CONFORMING AMENDMENT.—Subparagraph (A) of section 4006(a)(8) of such Act (29 U.S.C. 1306(a)(8)) is

amended by striking ‘‘(B) and (C)’’ and inserting ‘‘(B), (C), and (E)’’.

TITLE III—OTHER BENEFITS
SEC. 301. BENEFITS PROVIDED TO VOLUNTEER FIREFIGHTERS AND EMERGENCY MEDICAL RESPONDERS.
(a) INCREASE IN DOLLAR LIMITATION ON QUALIFIED PAY- MENTS.—Subparagraph (B) of section 139B(c)(2) of the Internal Revenue Code of 1986 is amended by striking ‘‘$30’’ and inserting ‘‘$50’’.
(b) EXTENSION.—Section 139B(d) of the Internal Revenue Code of 1986 is amended by striking ‘‘beginning after December 31, 2010.’’ and inserting ‘‘beginning—
‘‘(1) after December 31, 2010, and before January 1, 2020,
or
‘‘(2) after December 31, 2020.’’.
(c) TECHNICAL CORRECTION.—Section 3121(a)(23) of such Code is amended by striking ‘‘139B(b)’’ and inserting ‘‘section 139B(a)’’.
(d) EFFECTIVE DATE.—The amendments made by this section shall apply to taxable years beginning after December 31, 2019.
SEC. 302. EXPANSION OF SECTION 529 PLANS.
(a) DISTRIBUTIONS FOR CERTAIN EXPENSES ASSOCIATED WITH REGISTERED APPRENTICESHIP PROGRAMS.—Section 529(c) of the Internal Revenue Code of 1986 is amended by adding at the end the following new paragraph:
‘‘(8) TREATMENT OF CERTAIN EXPENSES ASSOCIATED WITH
REGISTERED APPRENTICESHIP PROGRAMS.—Any reference in this subsection to the term ‘qualified higher education expense’ shall include a reference to expenses for fees, books, supplies, and equipment required for the participation of a designated bene- ficiary in an apprenticeship program registered and certified with the Secretary of Labor under section 1 of the National Apprenticeship Act (29 U.S.C. 50).’’.
(b) DISTRIBUTIONS FOR QUALIFIED EDUCATION LOAN REPAY-
MENTS.—
(1) IN GENERAL.—Section 529(c) of such Code, as amended by subsection (a), is amended by adding at the end the following new paragraph:
‘‘(9) TREATMENT OF QUALIFIED EDUCATION LOAN REPAY- MENTS.—
‘‘(A) IN GENERAL.—Any reference in this subsection to the term ‘qualified higher education expense’ shall include a reference to amounts paid as principal or interest on any qualified education loan (as defined in section 221(d)) of the designated beneficiary or a sibling of the designated beneficiary.
‘‘(B) LIMITATION.—The amount of distributions treated as a qualified higher education expense under this para- graph with respect to the loans of any individual shall not exceed $10,000 (reduced by the amount of distributions so treated for all prior taxable years).
‘‘(C) SPECIAL RULES FOR SIBLINGS OF THE DESIGNATED BENEFICIARY.—

‘‘(i) SEPARATE ACCOUNTING.—For purposes of subparagraph (B) and subsection (d), amounts treated as a qualified higher education expense with respect to the loans of a sibling of the designated beneficiary shall be taken into account with respect to such sibling and not with respect to such designated beneficiary. ‘‘(ii) SIBLING DEFINED.—For purposes of this para- graph, the term ‘sibling’ means an individual who bears a relationship to the designated beneficiary which is
described in section 152(d)(2)(B).’’.
(2) COORDINATION WITH DEDUCTION FOR STUDENT LOAN INTEREST.—Section 221(e)(1) of such Code is amended by adding at the end the following: ‘‘The deduction otherwise allowable under subsection (a) (prior to the application of subsection (b)) to the taxpayer for any taxable year shall be reduced (but not below zero) by so much of the distributions treated as a qualified higher education expense under section 529(c)(9) with respect to loans of the taxpayer as would be includible in gross income under section 529(c)(3)(A) for such taxable year but for such treatment.’’.
(c) EFFECTIVE DATE.—The amendments made by this section shall apply to distributions made after December 31, 2018.
TITLE IV—REVENUE PROVISIONS
SEC. 401. MODIFICATION OF REQUIRED DISTRIBUTION RULES FOR DESIGNATED BENEFICIARIES.
(a) MODIFICATION OF RULES WHERE EMPLOYEE DIES BEFORE ENTIRE DISTRIBUTION.—
(1) IN GENERAL.—Section 401(a)(9) of the Internal Revenue Code of 1986 is amended by adding at the end the following new subparagraph:
‘‘(H) SPECIAL RULES FOR CERTAIN DEFINED CONTRIBU-
TION PLANS.—In the case of a defined contribution plan, if an employee dies before the distribution of the employee’s entire interest—
‘‘(i) IN GENERAL.—Except in the case of a bene- ficiary who is not a designated beneficiary, subpara- graph (B)(ii)—
‘‘(I) shall be applied by substituting ‘10 years’ for ‘5 years’, and
‘‘(II) shall apply whether or not distributions of the employee’s interests have begun in accord- ance with subparagraph (A).
‘‘(ii) EXCEPTION FOR ELIGIBLE DESIGNATED BENE-
FICIARIES.—Subparagraph (B)(iii) shall apply only in the case of an eligible designated beneficiary.
‘‘(iii) RULES UPON DEATH OF ELIGIBLE DESIGNATED
BENEFICIARY.—If an eligible designated beneficiary dies before the portion of the employee’s interest to which this subparagraph applies is entirely distributed, the exception under clause (ii) shall not apply to any bene- ficiary of such eligible designated beneficiary and the remainder of such portion shall be distributed within
10 years after the death of such eligible designated beneficiary.

‘‘(iv) SPECIAL RULE IN CASE OF CERTAIN TRUSTS FOR DISABLED OR CHRONICALLY ILL BENEFICIARIES.—
In the case of an applicable multi-beneficiary trust, if under the terms of the trust—
‘‘(I) it is to be divided immediately upon the death of the employee into separate trusts for each beneficiary, or
‘‘(II) no individual (other than a eligible des- ignated beneficiary described in subclause (III) or
(IV) of subparagraph (E)(ii)) has any right to the employee’s interest in the plan until the death of all such eligible designated beneficiaries with respect to the trust,
for purposes of a trust described in subclause (I), clause
(ii) shall be applied separately with respect to the portion of the employee’s interest that is payable to any eligible designated beneficiary described in sub- clause (III) or (IV) of subparagraph (E)(ii); and, for purposes of a trust described in subclause (II), subpara- graph (B)(iii) shall apply to the distribution of the employee’s interest and any beneficiary who is not such an eligible designated beneficiary shall be treated as a beneficiary of the eligible designated beneficiary upon the death of such eligible designated beneficiary. ‘‘(v) APPLICABLE MULTI-BENEFICIARY TRUST.—For purposes of this subparagraph, the term ‘applicable
multi-beneficiary trust’ means a trust—
‘‘(I) which has more than one beneficiary,
‘‘(II) all of the beneficiaries of which are treated as designated beneficiaries for purposes of determining the distribution period pursuant to this paragraph, and
‘‘(III) at least one of the beneficiaries of which is an eligible designated beneficiary described in subclause (III) or (IV) of subparagraph (E)(ii).
‘‘(vi) APPLICATION TO CERTAIN ELIGIBLE RETIRE-
MENT PLANS.—For purposes of applying the provisions of this subparagraph in determining amounts required to be distributed pursuant to this paragraph, all eligible retirement plans (as defined in section 402(c)(8)(B), other than a defined benefit plan described in clause (iv) or (v) thereof or a qualified trust which is a part of a defined benefit plan) shall be treated as a defined contribution plan.’’.
(2) DEFINITION OF ELIGIBLE DESIGNATED BENEFICIARY.— Section 401(a)(9)(E) of such Code is amended to read as follows: ‘‘(E) DEFINITIONS AND RULES RELATING TO DESIGNATED
BENEFICIARIES.—For purposes of this paragraph—
‘‘(i) DESIGNATED BENEFICIARY.—The term ‘des-
ignated beneficiary’ means any individual designated as a beneficiary by the employee.
‘‘(ii) ELIGIBLE DESIGNATED BENEFICIARY.—The term
‘eligible designated beneficiary’ means, with respect to any employee, any designated beneficiary who is—
‘‘(I) the surviving spouse of the employee,

‘‘(II) subject to clause (iii), a child of the employee who has not reached majority (within the meaning of subparagraph (F)),
‘‘(III) disabled (within the meaning of section 72(m)(7)),
‘‘(IV) a chronically ill individual (within the meaning of section 7702B(c)(2), except that the requirements of subparagraph (A)(i) thereof shall only be treated as met if there is a certification that, as of such date, the period of inability described in such subparagraph with respect to the individual is an indefinite one which is reason- ably expected to be lengthy in nature), or
‘‘(V) an individual not described in any of the preceding subclauses who is not more than 10 years younger than the employee.
The determination of whether a designated beneficiary is an eligible designated beneficiary shall be made as of the date of death of the employee.
‘‘(iii) SPECIAL RULE FOR CHILDREN.—Subject to
subparagraph (F), an individual described in clause (ii)(II) shall cease to be an eligible designated bene- ficiary as of the date the individual reaches majority and any remainder of the portion of the individual’s interest to which subparagraph (H)(ii) applies shall be distributed within 10 years after such date.’’.
(b) EFFECTIVE DATES.—
(1) IN GENERAL.—Except as provided in this subsection, the amendments made by this section shall apply to distribu- tions with respect to employees who die after December 31, 2019.
(2) COLLECTIVE BARGAINING EXCEPTION.—In the case of a plan maintained pursuant to 1 or more collective bargaining agreements between employee representatives and 1 or more employers ratified before the date of enactment of this Act, the amendments made by this section shall apply to distribu- tions with respect to employees who die in calendar years beginning after the earlier of—
(A) the later of—
(i) the date on which the last of such collective bargaining agreements terminates (determined without regard to any extension thereof agreed to on or after the date of the enactment of this Act), or
(ii) December 31, 2019, or
(B) December 31, 2021.
For purposes of subparagraph (A)(i), any plan amendment made pursuant to a collective bargaining agreement relating to the plan which amends the plan solely to conform to any require- ment added by this section shall not be treated as a termination of such collective bargaining agreement.
(3) GOVERNMENTAL PLANS.—In the case of a governmental plan (as defined in section 414(d) of the Internal Revenue Code of 1986), paragraph (1) shall be applied by substituting ‘‘December 31, 2021’’ for ‘‘December 31, 2019’’.
(4) EXCEPTION FOR CERTAIN EXISTING ANNUITY CON- TRACTS.—

(A) IN GENERAL.—The amendments made by this sec- tion shall not apply to a qualified annuity which is a binding annuity contract in effect on the date of enactment of this Act and at all times thereafter.
(B) QUALIFIED ANNUITY.—For purposes of this para- graph, the term ‘‘qualified annuity’’ means, with respect to an employee, an annuity—
(i) which is a commercial annuity (as defined in section 3405(e)(6) of the Internal Revenue Code of 1986);
(ii) under which the annuity payments are made over the life of the employee or over the joint lives of such employee and a designated beneficiary (or over a period not extending beyond the life expectancy of such employee or the joint life expectancy of such employee and a designated beneficiary) in accordance with the regulations described in section 401(a)(9)(A)(ii) of such Code (as in effect before such amendments) and which meets the other requirements of section 401(a)(9) of such Code (as so in effect) with respect to such payments; and
(iii) with respect to which—
(I) annuity payments to the employee have begun before the date of enactment of this Act, and the employee has made an irrevocable election before such date as to the method and amount of the annuity payments to the employee or any designated beneficiaries; or
(II) if subclause (I) does not apply, the employee has made an irrevocable election before the date of enactment of this Act as to the method and amount of the annuity payments to the employee or any designated beneficiaries.
(5) EXCEPTION FOR CERTAIN BENEFICIARIES.—
(A) IN GENERAL.—If an employee dies before the effec- tive date, then, in applying the amendments made by this section to such employee’s designated beneficiary who dies after such date—
(i) such amendments shall apply to any beneficiary of such designated beneficiary; and
(ii) the designated beneficiary shall be treated as an eligible designated beneficiary for purposes of applying section 401(a)(9)(H)(ii) of the Internal Rev- enue Code of 1986 (as in effect after such amendments).
(B) EFFECTIVE DATE.—For purposes of this paragraph, the term ‘‘effective date’’ means the first day of the first calendar year to which the amendments made by this section apply to a plan with respect to employees dying on or after such date.
SEC. 402. INCREASE IN PENALTY FOR FAILURE TO FILE.
(a) IN GENERAL.—The second sentence of subsection (a) of sec- tion 6651 of the Internal Revenue Code of 1986 is amended by striking ‘‘$330’’ and inserting ‘‘$435’’.
(b) INFLATION ADJUSTMENT.—Section 6651(j)(1) of such Code is amended by striking ‘‘$330’’ and inserting ‘‘$435’’.

(c) EFFECTIVE DATE.—The amendments made by this section shall apply to returns the due date for which (including extensions) is after December 31, 2019.
SEC. 403. INCREASED PENALTIES FOR FAILURE TO FILE RETIREMENT PLAN RETURNS.
(a) IN GENERAL.—Subsection (e) of section 6652 of the Internal Revenue Code of 1986 is amended—
(1) by striking ‘‘$25’’ and inserting ‘‘$250’’; and
(2) by striking ‘‘$15,000’’ and inserting ‘‘$150,000’’.
(b) ANNUAL REGISTRATION STATEMENT AND NOTIFICATION OF CHANGES.—Subsection (d) of section 6652 of the Internal Revenue Code of 1986 is amended—
(1) by striking ‘‘$1’’ both places it appears in paragraphs
(1) and (2) and inserting ‘‘$10’’;
(2) by striking ‘‘$5,000’’ in paragraph (1) and inserting ‘‘$50,000’’; and
(3) by striking ‘‘$1,000’’ in paragraph (2) and inserting ‘‘$10,000’’.
(c) FAILURE TO PROVIDE NOTICE.—Subsection (h) of section 6652 of the Internal Revenue Code of 1986 is amended—
(1) by striking ‘‘$10’’ and inserting ‘‘$100’’; and
(2) by striking ‘‘$5,000’’ and inserting ‘‘$50,000’’.
(d) EFFECTIVE DATE.—The amendments made by this section shall apply to returns, statements, and notifications required to be filed, and notices required to be provided, after December 31, 2019.
SEC. 404. INCREASE INFORMATION SHARING TO ADMINISTER EXCISE TAXES.
(a) IN GENERAL.—Section 6103(o) of the Internal Revenue Code of 1986 is amended by adding at the end the following new para- graph:
‘‘(3) TAXES IMPOSED BY SECTION 4481.—Returns and return information with respect to taxes imposed by section 4481 shall be open to inspection by or disclosure to officers and employees of United States Customs and Border Protection of the Department of Homeland Security whose official duties require such inspection or disclosure for purposes of admin- istering such section.’’.
(b) CONFORMING AMENDMENTS.—Paragraph (4) of section 6103(p) of the Internal Revenue Code of 1986 is amended by striking ‘‘or (o)(1)(A)’’ each place it appears and inserting ‘‘, (o)(1)(A), or (o)(3)’’.

TITLE V—TAX RELIEF FOR CERTAIN CHILDREN
SEC. 501. MODIFICATION OF RULES RELATING TO THE TAXATION OF UNEARNED INCOME OF CERTAIN CHILDREN.
(a) IN GENERAL.—Section 1(j) of the Internal Revenue Code of 1986 is amended by striking paragraph (4).
(b) COORDINATION WITH ALTERNATIVE MINIMUM TAX.—Section 55(d)(4)(A) of the Internal Revenue Code of 1986 is amended by striking ‘‘and’’ at the end of clause (i)(II), by striking the period

at the end of clause (ii)(III) and inserting ‘‘, and’’, and by adding at the end the following new clause:
‘‘(iii) subsection (j) of section 59 shall not apply.’’.
(c) EFFECTIVE DATE.—
(1) IN GENERAL.—Except as otherwise provided in this sub- section, the amendment made by subsection (a) shall apply to taxable years beginning after December 31, 2019.
(2) COORDINATION WITH ALTERNATIVE MINIMUM TAX.—The amendment made by subsection (b) shall apply to taxable years beginning after December 31, 2017.
(3) ELECTIVE RETROACTIVE APPLICATION.—A taxpayer may elect (at such time and in such manner as the Secretary of the Treasury (or the Secretary’s designee) may provide) for the amendment made by subsection (a) to also apply to taxable years of the taxpayer which begin in 2018, 2019, or both (as specified by the taxpayer in such election).
TITLE VI—ADMINISTRATIVE PROVISIONS
SEC. 601. PROVISIONS RELATING TO PLAN AMENDMENTS.
(a) IN GENERAL.—If this section applies to any retirement plan or contract amendment—
(1) such retirement plan or contract shall be treated as being operated in accordance with the terms of the plan during the period described in subsection (b)(2)(A); and
(2) except as provided by the Secretary of the Treasury (or the Secretary’s delegate), such retirement plan shall not fail to meet the requirements of section 411(d)(6) of the Internal Revenue Code of 1986 and section 204(g) of the Employee Retirement Income Security Act of 1974 by reason of such amendment.
(b) AMENDMENTS TO WHICH SECTION APPLIES.—
(1) IN GENERAL.—This section shall apply to any amend- ment to any retirement plan or annuity contract which is made—
(A) pursuant to any amendment made by this Act or pursuant to any regulation issued by the Secretary of the Treasury or the Secretary of Labor (or a delegate of either such Secretary) under this Act; and
(B) on or before the last day of the first plan year beginning on or after January 1, 2022, or such later date as the Secretary of the Treasury may prescribe.
In the case of a governmental plan (as defined in section 414(d) of the Internal Revenue Code of 1986), or an applicable collectively bargained plan in the case of section 401 (and the amendments made thereby), this paragraph shall be applied by substituting ‘‘2024’’ for ‘‘2022’’. For purposes of the preceding sentence, the term ‘‘applicable collectively bargained plan’’ means a plan maintained pursuant to 1 or more collective bargaining agreements between employee representatives and
1 or more employers ratified before the date of enactment of this Act.
(2) CONDITIONS.—This section shall not apply to any amendment unless—
(A) during the period—

(i) beginning on the date the legislative or regu- latory amendment described in paragraph (1)(A) takes effect (or in the case of a plan or contract amendment not required by such legislative or regulatory amend- ment, the effective date specified by the plan); and
(ii) ending on the date described in paragraph (1)(B) (as modified by the second sentence of paragraph (1)) (or, if earlier, the date the plan or contract amend- ment is adopted),
the plan or contract is operated as if such plan or contract amendment were in effect; and
(B) such plan or contract amendment applies retro- actively for such period.

Setting Every Community Up for Retirement (SECURE) Act: First Impression

“The SECURE Act was passed into law yesterday. Many features benefit the financial services industry. Some features potentially benefit small businesses, but affirmative action is required to take advantage”.

– Tony Novak CPA

Forbes retirement planning reporter Elizabeth Bauer wrote: “passage of the SECURE Act is great. But the process by which this occurred is appalling”. I certainly agree. This is no way to pass legislation that affects so many. The law is good for the financial services industry, but is it good for workers? The answer, of course, lies in whether employers elect to use the new provisions of the law. Since retirement plans are still purely voluntary for most employers, no retirement plan legislation is effective without a voluntary choice to participate.

Under the range of retirement planning changes under SECURE, a tax-free 529 college savings plan distributions can be used to pay for registered apprenticeship programs and up to $10,000 in student loan payments. The law also includes provisions to expand the eligibility of 401(k)s to include part-time workers that complete between 500 and 1,000 hours of service for multiple years, and to increase the age for required minimum distributions from age 70 1/2 to age 72 in 2020. Small employers may group together to offer 401(k)s.

The real bottleneck in small business retirement plans is lack of easy access to personal local professional service. We know that not all business support can be delivered effectively through a remote call center. On site support and an understanding of the business really helps. Under the current system employers complain that service outside of core investment management is lacking. Employees say that retirement plans are not their top priority, and they have a range of intersecting questions about taxes, banking and cash flow. They simply do not have access to the resources required – financial and otherwise – in order to make a commitment to retirement savings.

Freedom Benefits addresses this issue by offering small business employees direct access to professional help on demand, at short notice and in small increments, as an employee benefit without the worry of the cost of this support. We find that this type of financial help is far more valuable than other types of employee benefits to many employees.

Small business employers who set up a successful retirement plan for the first time may be eligible for a $500 tax credit. Call or email to plan an initial conversation about retirement plan incentives that will work best for your firm.

Three simple steps to improve 401(k) results

Are you concerned about the fees in your 401(k) plan? How do you get the best value for your money and is your 401(k) on target to deliver the benefits you expect?

401(k) plan participants are expected to pay much more attention to the fees and performance of their retirement accounts after August 2012 when new federal regulations require additional disclosures to all 401(k) plan participants. We believe that the only logical approach to improve 401(k) plan results is through independent advice – separate from the firms that provide retirement plan and investment services. A simple three step analysis, review and planning exercise will address these concerns and put your retirement plan back on the right track.

Ask questions

The Department of Labor prepared this ten point checklist to help 401(k) plan participants gain an understanding of these fees and potential areas for improvement:

  1. What investment options are offered under your company’s 401(k) plan?
  2. Do you have all available documentation about the investment choices under your plan and the fees charged to your plan?
  3. What types of investment education are available under your plan?
  4. What arrangement is used to provide services under your plan (i.e., are any or all of the services or investment alternatives provided by a single provider)?
  5. Do you and other participants use most or all of the optional services offered under your 401(k) plan, such as a participant loan program and insurance coverage?
  6. If administrative services are paid separately from investment management fees, are they paid for by the plan, your employer or are they shared?
  7. Are the investment options tracking an established market index or is there a higher level of investment management services being provided?
  8. Do any of the investment options under your plan include sales charges (such as loads or commissions)?
  9. Do any of the investment options under your plan include any fees related to specific investments, such as 12b-1 fees, insurance charges, or surrender fees, and what do they cover?
  10. Does your plan offer any special funds or special classes of stock (generally sold to larger group investors)?

Get independent advice

Plan participants should have access to independent 401(k) plan advice (an adviser not affiliated with the company that provides services to the 401(k) plan or its investments). An independent adviser typically compares the fees and services of your plan in comparison to similar fees and services on comparable plans in order to arrive at any  recommendations designed to lower fees and boost performance for the participants. More importantly, an independent adviser helps plan participants focus on a “big picture” assessment of whether the current accounts are on target to meet the participant’s overall expectations of a secure retirement.

Measure your progress

It is important to periodically re-evaluate your retirement planning in light of overall life changes. Freedom Benefits offers individual consultations to delve into these issues in more detail. A simple but highly effective interactive software program called “Taking the mystery out of retirement planning” is incorporated into our one-on-one discussions and group workshops for 401(k) plan participants. This “mini-planning” process takes only about an hour but delivers big results.

By taking these three simple steps:

  1. question 401(k) fees and performance
  2. access an independent advisor
  3. participate in a retirement planning evaluation

it is possible to significantly improve performance and satisfaction with you 401(k) plan.

Planning a small business 401(k)

The majority of content on this Web page was originally produced by IRS and the U.S. Department of Labor in December 2011 and is edited and adapted here as part of Freedom Benefits financial education and consulting programs. 

Contents:

  1. Why 401(k) plans?
  2. Establishing a 401(k)
  3. Automatic enrollment
  4. Arrange a trust fund
  5. Develop a recordkeeping system
  6. Provide plan information to employees
  7. Operating a 401(k)
  8. Participation
  9. Contributions
  10. Vesting
  11. Nondiscrimination
  12. Investing
  13. Fiduciary responsibilities
  14. Disclosing plan information to employees
  15. Reporting to government agencies
  16. Terminating a 401(k) plan
  17. Compliance
  18. 401(k) plan checklist
  19. Resources

WHY 401(k) PLANS?

401(k) plans can be a powerful tool in promoting financial security in retirement. They are a valuable option for businesses considering a retirement plan, providing benefits to employees and their employers.

Employers start a 401(k) plan for a host of reasons:

  • A well-designed 401(k) plan can help attract and keep talented employees.
  • It allows participants to decide how much to contribute to their accounts.
  • Employers are entitled to a tax deduction for contributions to employees’ accounts.
  • A 401(k) plan benefits a mix of rank-and file employees and owners/managers.
  • The money contributed may grow through investments in stocks, bonds, mutual funds, money market funds, savings accounts, and other investment vehicles.
  • Contributions and earnings generally are not taxed by the Federal Government or by most State governments until they are distributed.
  • A 401(k) plan may allow participants to take their benefits with them when they leave the company, easing administrative responsibilities.

This booklet highlights some of a 401(k) plan’s advantages, some of your options and responsibilities as an employer operating a 401(k) plan, and the differences among the types of 401(k) plans. For more information, a list of resources for you and for 401(k) plan participants is included at the end of this booklet.

ESTABLISHING A 401(k) PLAN

When you establish a 401(k) plan, you must take certain basic actions. One of your first decisions will be whether to set up the plan yourself or to consult a professional or financial institution — such as a bank, mutual fund provider, or insurance company — to help with establishing and maintaining the plan. In addition, there are four initial steps for setting up a 401(k) plan:

  • Adopt a written plan document,
  • Arrange a trust fund for the plan’s assets,
  • Develop a recordkeeping system, and
  • Provide plan information to employees eligible to participate.

Adopt a written plan document — Plans begin with a written document that serves as the foundation for day-to-day plan operations. If you have hired someone to help with your plan, that person likely will provide the document. If not, consider obtaining assistance from a financial institution or retirement plan professional. In either case, you will be bound by the terms of the plan document.

Once you have decided on a 401(k) plan, you will need to choose the type of 401(k) plan that is best for you — a traditional 401(k) plan, a safe harbor 401(k) plan, or an automatic enrollment 401(k) plan. In all of these plans, participants can make contributions through salary deductions.

A traditional 401(k) plan offers the maximum flexibility among the three types of plans. Employers have discretion over whether to make contributions for all participants, to match employees’ deferrals, to do both, or to do neither. These contributions can be subject to a vesting schedule (which provides that an employee’s right to employer contributions becomes nonforfeitable only after a period of time). Annual testing ensures that benefits for rank-and-file employees are proportional to benefits for owners/managers.

There are several kinds of 401(k) plans that aren’t subject to the annual contributions testing required with traditional 401(k) plans. These are known as safe harbor 401(k) plans and, in exchange for avoiding the annual testing, employees in these plans must receive a certain level of employer contributions. Under the most popular safe harbor 401(k) plan (discussed in this publication), mandatory employer contributions must be fully vested when made.

An automatic enrollment 401(k) plan allows you to automatically enroll employees and place deductions from their salaries in certain default investments, unless the employee elects otherwise. This is an effective way for many employers to increase participation in their 401(k) plans.

The traditional, safe harbor, and automatic enrollment plans are for employers of any size.

This booklet addresses traditional and safe harbor 401(k) plans. For more information on automatic enrollment 401(k) plans, see

Automatic Enrollment 401(k) Plans for Small Businesses

Once you have decided on the type of plan for your company, you will have flexibility in choosing some of the plan’s features — such as which employees can contribute to the plan and how much. Other features written into the plan are required by law. For instance, the plan document must describe how certain key functions are carried out, such as how contributions are deposited in the plan. See IRS Publication 4674 for more information.

Arrange a trust fund for the plan’s assets

A plan’s assets must be held in trust to assure that assets are used solely to benefit the participants and their beneficiaries. The trust must have at least one trustee to handle contributions, plan investments, and distributions. Since the financial integrity of the plan depends on the trustee, selecting a trustee is one of the most important decisions you will make in establishing a 401(k) plan. If you set up your plan through insurance contracts, the contracts do not need to be held in trust.

Develop a recordkeeping system

An accurate recordkeeping system will track and properly attribute contributions, earnings and losses, plan investments, expenses, and benefit distributions. If a contract administrator or financial institution assists in managing the plan, that entity typically will help keep the required records. In addition, a recordkeeping system will help you, your plan administrator, or financial provider prepare the plan’s annual return/report that must be filed with the Federal Government.

Provide plan information to employees eligible to participate

You must notify employees who are eligible to participate in the plan about certain benefits, rights, and features. In addition, a summary plan description (SPD) must be provided to all participants. The SPD is the primary vehicle to inform participants and beneficiaries about the plan and how it operates. The SPD typically is created with the plan document. (For more information on the required contents of the SPD, see Disclosing Plan Information to Participants.)

You also may want to provide your employees with information that discusses the advantages of your 401(k) plan. The benefits to employees — such as pretax contributions to a 401(k) plan (or tax-free distributions in the case of Roth contributions), employer contributions (if you choose to make them), and compounded tax-deferred earnings — help highlight the advantages of participating in the plan.

OPERATING A 401(k) PLAN

Once you have established a 401(k) plan, you assume certain responsibilities in operating the plan. If you hired someone to help in setting up your plan, that arrangement also may have included help in operating the plan. If not, another important decision will be whether to manage the plan yourself or to hire a professional or financial institution — such as a bank, mutual fund provider, or insurance company — to take care of some or most aspects of operating the plan.

Elements of operating 401(k) plans include the following:

  • Participation
  • Contributions
  • Vesting
  • Nondiscrimination
  • Investing 401(k) plan monies
  • Fiduciary responsibilities
  • Disclosing plan information to participants
  • Reporting to government agencies
  • Distributing plan benefits

Participation

Typically, a plan includes a mix of rank and-file employees and owners/managers. However, some employees may be excluded from a 401(k) plan if they:

  • Have not attained age 21;
  • Have not completed a year of service; or
  • Are covered by a collective bargaining agreement that does not provide for participation in the plan, if retirement benefits were the subject of good faith bargaining.

Employees cannot be excluded from a plan merely because they are older workers.

Contributions

In all 401(k) plans, participants can make contributions through salary deductions. You can decide on your business’s contribution to participants’ accounts in the plan.

Contributions in a traditional 401(k) Plan

If you decide to contribute to your 401(k) plan, you have further options. You can contribute a percentage of each employee’s compensation for allocation to the employee’s account (called a nonelective contribution), or you can match the amount your employees decide to contribute, or you can do both (within the limits of the tax law).

For example, you may decide to add a percentage — say, 50 percent — to an employee’s contribution, which results in a 50-cent increase for every dollar the employee sets aside. Using a matching contribution formula will provide employer contributions only to employees who make deferrals to the 401(k) plan. If you choose to make nonelective contributions, the employer contribution goes to each eligible participant, whether or not the participant decides to make a salary deferral to his or her 401(k) plan account.

Under a traditional 401(k) plan, you have the flexibility of changing the amount of employer contributions each year, according to business conditions.

Contributions in a Safe Harbor 401(k) Plan

Under a safe harbor plan, you can match each eligible employee’s contribution, dollar for dollar, up to 3 percent of the employee’s compensation, and 50 cents on the dollar for the employee’s contribution that exceeds 3 percent, but not 5 percent, of the employee’s compensation. Alternatively, you can make a nonelective contribution equal to 3 percent of compensation to each eligible employee’s account. Each year you must make either the matching contributions or the nonelective contributions. The plan document will specify which contributions will be made and this information must be provided to employees before the beginning of each year.

Contributions in a Roth 401(k)

401(k) plans may permit employees to make after-tax contributions through salary deduction. These designated Roth contributions, as well as gains and losses, are accounted for separately from pretax contributions. However, designated Roth contributions are treated the same as pretax contributions for most aspects of plan operations, such as contribution limits.

A 401(k) plan may allow participants to transfer certain amounts in the plan to their designated Roth account in the plan.

Contribution Limits

Employer and employee contributions and forfeitures (nonvested employer contributions of terminated participants) are subject to a per-employee overall annual limitation. This limit is the lesser of:

  • 100 percent of the employee’s compensation, or
  • $49,000 for 2011 and $50,000 for 2012.

In addition, the amount employees can contribute under any 401(k) plan is limited to $16,500 for 2011 and $17,000 for 2012.

All 401(k) plans may allow catch-up contributions of $5,500 for 2011 and 2012 for employees age 50 and over.

Vesting

Employee salary deferrals are immediately 100 percent vested — that is, the money that an employee has contributed to the plan cannot be forfeited. When an employee leaves employment, he or she is entitled to those deferrals, plus any investment gains (or minus losses) on his or her deferrals.

In safe harbor 401(k) plans, all required employer contributions are always 100 percent vested. In traditional 401(k) plans, you can design your plan so that employer contributions become vested over time, according to a vesting schedule.

Nondiscrimination

To preserve the tax benefits of a 401(k) plan, the plan must provide substantive benefits for rank-and-file employees, not just business owners and managers. These requirements are called nondiscrimination rules and compare both plan participation and contributions of rank-and-file employees to those of owners/ managers.

Traditional 401(k) plans are subject to annual testing to assure that the amount of contributions made for rank-and-file employees is proportional to contributions made for owners and managers. In most cases, safe harbor 401(k) plans are not subject to annual nondiscrimination testing.

Investing 401(k) Plan Monies

After you decide on the type of 401(k) plan, you can consider the variety of investment options. One decision you will need to make in designing a plan is whether to permit your employees to direct the investment of their accounts or to manage the monies on their behalf. If you choose the former, you also need to decide what investment options to make available to the participants. Depending on the plan design you choose, you may want to hire someone either to determine the investment options to make available or to manage the plan’s investments. Continually monitoring the investment options ensures that your selections remain in the best interests of your plan and its participants.

Fiduciary Responsibilities

Many of the actions needed to operate a 401(k) plan involve fiduciary decisions. This is true whether or not you hire someone to manage the plan for you or do some or all of the plan management yourself. Controlling the assets of the plan or using discretion in administering and managing the plan makes you and the entity you hire a plan fiduciary to the extent of that discretion or control. Hiring someone to perform fiduciary functions is itself a fiduciary act. Thus, fiduciary status is based on the functions performed for the plan, not a title.

Some decisions with respect to a plan are business decisions, rather than fiduciary decisions. For instance, the decisions to establish a plan, to include certain features in a plan, to amend a plan, and to terminate a plan are business decisions. When making these decisions, you are acting on behalf of your business, not the plan, and therefore, you would not be a fiduciary. However, when you take steps to implement these decisions, you (or those you hire) are acting on behalf of the plan and thus, in making decisions, may be acting as fiduciaries.

Basic Responsibilities

Those persons or entities that are fiduciaries are in a position of trust with respect to the participants and beneficiaries in the plan. The fiduciary’s responsibilities include:

  • Acting solely in the interest of the participants and their beneficiaries;
  • Acting for the exclusive purpose of providing benefits to workers participating in the plan and their beneficiaries, and defraying reasonable expenses of the plan;
  • Carrying out duties with the care, skill, prudence, and diligence of a prudent person familiar with such matters;
  • Following the plan documents; and
  • Diversifying plan investments.

These are the responsibilities that fiduciaries need to keep in mind as they carry out their duties. The responsibility to be prudent covers a wide range of functions needed to operate a plan. And, since all these functions must be carried out in the same manner as a prudent person would, it may be in your best interest to consult experts in various fields, such as investments and accounting.

In addition, for some functions, there are specific rules that help guide the fiduciary. For example, the deductions from employees’ paychecks for contribution to the plan must be deposited with the plan as soon as reasonably possible, but no later than the 15th business day of the month following the payday. If you can reasonably make the deposits in a shorter time frame, you need to make the deposits at that time.

For plans with fewer than 100 participants, salary reduction contributions deposited with the plan no later than the 7th business day following withholding by the employer will be considered contributed in compliance with the law.

For all contributions, employee and employer (if any), the plan must designate a fiduciary, typically the trustee, to make sure that contributions due to the plan are transmitted. If the plan and other documents are silent or ambiguous, the trustee generally has this responsibility. As part of following the plan documents in operating your plan, the plan document will need to be updated from time to time for changes in the law.

Limiting Liability

With these responsibilities, there is also some potential liability. However, there are actions you can take to demonstrate that you carried out your responsibilities properly as well as ways to limit your liability.

The fiduciary responsibilities cover the process used to carry out the plan functions rather than simply the end results. For example, if you or someone you hire makes the investment decisions for the plan, an investment does not have to be a “winner” if it was part of a prudent overall diversified investment portfolio for the plan. Since a fiduciary needs to carry out activities through a prudent process, you should document the decision-making process to demonstrate the rationale behind the decision at the time it was made.

In addition to the steps above, there are other ways to limit potential liability. The plan can be set up to give participants control of the investments in their accounts. For participants to have control, they must have sufficient information on the specifics of their investment options. If properly executed, this type of plan limits your liability for the investment decisions made by participants. You can also hire a service provider or providers to handle some or most of the fiduciary functions, setting up the agreement so that the person or entity then assumes liability.

Hiring a Service Provider

Even if you do hire a financial institution or retirement plan professional to manage the whole plan, you retain some fiduciary responsibility for the decision to select and keep that person or entity as the plan’s service provider. Thus, you should document your selection process and monitor the services provided to determine if a change needs to be made.

For a service contract or arrangement to be reasonable, service providers must provide certain information to you about the services they will provide to your plan and all of the compensation they will receive. This information will assist you in understanding the services, assessing the reasonableness of the compensation (direct and indirect), and determining any conflicts of interest that may impact the service provider’s performance.

Some additional items to consider in selecting a plan service provider:

Information about the firm itself: affiliations, financial condition, experience with 401(k) plans, and assets under their control;

  • A description of business practices: how plan assets will be invested if the firm will manage plan investments or how participant investment directions will be handled; and
  • Information about the quality of prospective providers: the identity, experience, and qualifications of the professionals who will be handling the plan’s account; any recent litigation or enforcement action that has been taken against the firm; the firm’s experience or performance record; if the firm plans to work with any of its affiliates in handling the plan’s account; and whether the firm has fiduciary liability insurance.
  • Once hired, these are additional actions to take when monitoring a service provider:
  • Evaluate any notices received from the service provider about possible changes to their compensation and the other information they provided when hired (or when the contract or arrangement was renewed);
  • Review the service provider’s performance;
  • Read any reports they provide;
  • Check actual fees charged;
  • Ask about policies and practices (such as trading, investment turnover, and proxy voting); and
  • Follow up on participant complaints.

(For more information, see Understanding Retirement Plan Fees and Expenses at www. dol.gov/ebsa. Click on “Fiduciary Education” under “Compliance Assistance” to access the publication.)

Providing Information in Participant-Directed Plans

When plans allow participants to direct their investments, fiduciaries need to take steps to regularly make participants aware of their rights and responsibilities under the plan related to directing their investments. This includes providing plan and investment-related information, including information about fees and expenses, that participants need to make informed decisions about the management of their individual accounts. Participants must receive the information before they can first direct their investment in the plan and annually thereafter. The investment-related information needs to be presented in a format, such as a chart, that allows for a comparison among the plan’s investment options. A model chart is available on www.dol.gov/ ebsa. If you use information provided by a service provider that you rely on reasonably and in good faith, you will be protected from liability for the completeness and accuracy of the information.

Prohibited Transactions and Exemptions

There are certain transactions that are prohibited under the law to prevent dealings with parties that have certain connections to the plan, self-dealing, or conflicts of interest that could harm the plan. However, there are a number of exceptions under the law, and additional exemptions may be granted by the U.S. Department of Labor, where protections for the plan are in place in conducting the transactions.

One exemption allows the provision of investment advice to participants who direct the investments in their accounts. This applies to the buying, selling, or holding of an investment related to the advice as well as to the receipt of related fees and other compensation by a fiduciary adviser.

Another exemption in the law permits you to offer loans to participants through your plan. If you do, the loan program must be carried out in such a way that the plan and all other participants are protected. Thus, the decision with respect to each loan request is treated as a plan investment and considered accordingly.

Bonding

Persons handling plan funds or other plan property generally must be covered by a fidelity bond to protect the plan against loss resulting from fraud and dishonesty by those covered by the bond.

Disclosing Plan Information to Participants

Plan disclosure documents keep participants informed about the basics of plan operation, alert them to changes in the plan’s structure and operations, and provide them a chance to make decisions and take timely action with respect to their accounts.

The summary plan description (SPD) — the basic descriptive document — is a plain-language explanation of the plan and must be comprehensive enough to apprise participants of their rights and responsibilities under the plan. It also informs participants about the plan features and what to expect of the plan.

Among other things, the SPD must include information about:

  • When and how employees become eligible to participate in the 401(k) plan;
  • The contributions to the plan;
  • How long it takes to become vested;
  • When employees are eligible to receive their benefits;
  • How to file a claim for those benefits; and
  • Basic rights and responsibilities participants have under the Federal retirement law, the Employee Retirement Income Security Act (ERISA).

The SPD should include an explanation about the administrative expenses that will be paid by the plan. This document must be given to participants when they join the plan and to beneficiaries when they first receive benefits. SPDs must also be redistributed periodically during the life of the plan.

A summary of material modification (SMM) apprises participants of changes made to the plan or to the information required to be in the SPD. The SMM or an updated SPD must be automatically furnished to participants within a specified number of days after the change.

An individual benefit statement (IBS) shows the total plan benefits earned by a participant, vested benefits, the value of each investment in the account, information describing the ability to direct investments, and (for plans with participant direction) an explanation of the importance of a diversified portfolio. Plans that provide for participant-directed accounts must furnish individual account statements on a quarterly basis. Plans that do not provide for participant direction must furnish statements annually.

As noted above, for plans that allow participants to direct the investments in their accounts, plan and investment information, including information about fees and expenses, must be provided to participants before they can first direct investments and periodically thereafter – primarily on an annual basis with information on the fees and expenses actually paid provided at least quarterly. The initial plan-related information may be distributed as part of the SPD provided when a participant joins the plan as long as it is provided before the participant can first direct investments. The information provided quarterly may be included with the IBS.

A summary annual report (SAR) is a narrative of the plan’s annual return/ report, the Form 5500, filed with the Federal Government (see Reporting to Government Agencies for more information). It must be furnished annually to participants.

A blackout period notice gives employees advance notice when a blackout period occurs, typically when plans change record-keepers or investment options, or when plans add participants due to corporate mergers or acquisitions. During a blackout period, participants’ rights to direct investments, take loans, or obtain distributions are suspended.

Reporting to Government Agencies

In addition to the disclosure documents that provide information to participants, plans must also report certain information to government entities.

Form 5500 Annual Return/Report of Employee Benefit Plans

Plans are required to file an annual return/ report with the Federal Government, in which information about the plan and its operation is disclosed to the IRS and the U.S. Department of Labor. Plans that must file the Form 5500 must do so electronically. These returns/reports are made available to the public.

Depending on the number and type of participants covered, most 401(k) plans must file one of the following forms:

  • Form 5500, Annual Return/Report of Employee Benefit Plan,
  • Form 5500-SF, Short Form Annual Return/Report of Small Employee Benefit Plan, or
  • Form 5500-EZ, Annual Return of One-Participant (Owners and Their Spouses) Retirement Plan.

Most one-participant plans (sole proprietor/ spouse and certain partnership plans) with total assets of $250,000 or less are exempt from the annual filing requirement. However, regardless of the value of the plan’s assets, a final return/report must be filed when a plan is terminated.

Form 1099-R

Form 1099-R, Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc. is given to both the IRS and recipients of distributions from the plan during the year. It is used to report distributions (including rollovers) from a retirement plan.

Distributing Plan Benefits

Benefits in a 401(k) plan are dependent on a participant’s account balance at the time of distribution.

When participants are eligible to receive a distribution, they typically can elect to:

  • Take a lump sum distribution of their account,
  • Roll over their account to an IRA or another employer’s retirement plan, or
  • Purchase an annuity.

TERMINATING A 401(k) PLAN

401(k) plans must be established with the intention of being continued indefinitely. However, business needs may require that employers terminate their 401(k) plans. For example, you may want to establish another type of retirement plan in lieu of the 401(k) plan.

Typically, the process of terminating a 401(k) plan includes amending the plan document, distributing all assets, and filing a final Form 5500. You must also notify your employees that the 401(k) plan will be discontinued. Check with your plan’s financial institution or a retirement plan professional to see what further action is necessary to terminate your 401(k) plan.

COMPLIANCE

Even with the best intentions, mistakes in plan operation can still happen. The U.S. Department of Labor and IRS have correction programs to help 401(k) plan sponsors correct plan errors, protect participants, and keep the plan’s tax benefits. These programs are structured to encourage early correction of the errors. Having an ongoing review program makes it easier to spot and correct mistakes in plan operations. See the Resources section for further information.

401(k) PLAN CHECKLIST

1. Have you determined which type of 401(k) plan best suits your business?

2. Have you decided to hire a financial

institution or retirement plan professional to help with setting up and running the plan?

3. Have you decided whether to make contributions to the plan, and, if so, whether to make nonelective and/or matching contributions? (Remember, you may design your plan so that you may change your contributions if necessary due to business conditions.)

4. Have you adopted a written plan that includes the features you want to offer, such as whether participants will direct the investment of their accounts?

5. Have you notified eligible employees and provided them with information to help in their decision making?

6. Have you arranged a trust fund for the plan assets or will you set up the plan solely with insurance contracts?

7. Have you developed a recordkeeping system?

8. Are you familiar with the fiduciary responsibilities?

9. Are you prepared to monitor the plan’s service providers?

10. Are you familiar with the reporting and disclosure requirements of a 401(k) plan?

For help in establishing and operating a 401(k) plan, you may want to talk to a retirement plan professional or a representative of a financial institution offering retirement plans—and take advantage of the help available in the following Resources section. Freedom Benefits.org offers a free consultation to discuss small business 401(k) planning. Call Tony Novak at (800) 609-0683.

RESOURCES

The U.S. Department of Labor’s (DOL’s) Employee Benefits Security Administration and the IRS feature this booklet and additional information on retirement plans on their websites:

www.dol.gov/ebsa — Go to “Compliance Assistance for Small Employers” or “Publications and Reports” for additional information to help you understand and operate your 401(k) plan. This website also has information to help your employees understand the importance of saving for retirement through an employer-sponsored plan.

www.irs.gov/retirement — Go to “Plan Sponsor/Employer.” This website is filled with plain-language information that will help you maintain your 401(k) plan properly. All the IRS forms and publications mentioned in this booklet are available here.

In addition, the following jointly developed publications are available on the DOL and IRS websites and can be ordered through the toll-free numbers listed below:

Choosing a Retirement Solution for Your Small Business, Publication 3998, provides an overview of retirement plans available to small businesses.

Adding Automatic Enrollment to Your 401(k) Plan, Publication 4721, explains how to add automatic enrollment to your existing 401(k) plan.

Automatic Enrollment 401(k) Plans for Small Businesses, Publication 4674, explains a type of retirement plan that allows small businesses to increase plan participation.

Payroll Deduction IRAs for Small Businesses,

Publication 4587, describes an arrangement that is an easy way for businesses to give employees an opportunity to save for retirement.

Profit Sharing Plans for Small Businesses,

Publication 4806, describes a flexible way for businesses to help employees save for retirement.

SEP Retirement Plans for Small Businesses, Publication 4333, describes a low-cost retirement savings option for small businesses.

SIMPLE IRA Plans for Small Businesses, Publication 4334, describes a type of retirement plan designed especially for small businesses.

And for business owners with a plan:

Retirement Plan Correction Programs, Publication 4224, provides a brief description of the IRS and DOL voluntary correction programs.

Order From:

DOL: Electronically at www.askebsa.dol.gov or by calling 866-444-3272 IRS: 800-TAX-FORM (829-3676)

Related materials available from DOL:

For small businesses:

Understanding Retirement Plan Fees and Expenses

Meeting Your Fiduciary Responsibilities

Selecting an Auditor for Your Employee Benefit Plan

Reporting and Disclosure Guide for Employee Benefit Plans

To view these publications, go to www.dol.gov/ebsa and click on “Publications and Reports.”

In addition, DOL sponsors two interactive websites – the Small Business Retirement Savings Advisor, available at www.dol.gov/elaws/pwbaplan.htm , and, along with the American Institute of Certified Public Accountants (AICPA), www.choosingaretirementsolution.org . These encourage small business owners to choose the appropriate retirement plan for their business and provide resources on maintaining plans and correcting plan errors.

For employees:

A Look at 401(k) Plan Fees

What You Should Know about Your Retirement Plan (also in Spanish)

Savings Fitness…A Guide To Your Money and Your Financial Future (also in Spanish)

Taking the Mystery Out of Retirement Planning (also in Spanish)

Top 10 Ways to Prepare for Retirement (also in Spanish)

Women and Retirement Savings (also in Spanish)

To view these publications, go to www.dol.gov/ebsa and click on “Publications and Reports.”

Related materials available from the IRS:

The Retirement Plan Products Navigator, Publication 4460.

Lots of Benefits, Publication 4118, discusses the benefits of sponsoring a retirement plan and the stages involved in the life cycle of a retirement plan.

Have you had your Check-up this year? for Retirement Plans, Publication 3066, encourages employers to perform a periodic “check-up” of their retirement plans through the use of a checklist, and how to initiate corrective action if necessary.

401(k) Plan Checklist, Publication 4531, a tool to help you keep your plan in compliance with many of the important tax rules.

Designated Roth Accounts under a 401(k) or 403(b) Plan, Publication 4530, discusses this popular feature found in many 401(k) and 403(b) plans.

Retirement Plans for Small Business (SEP, SIMPLE, and Qualified Plans), Publication 560.

To view these related publications, go to the Retirement Plans Community Web page at www.irs.gov/retirement and click on “Forms/ Pubs/Products” in the left pane.

The IRS Retirement Plans Navigator, www.retirementplans.irs.gov , a Web guide for choosing a retirement plan, maintaining it and correcting plan errors.

401(k) Plans for Small Businesses is a joint project of the U.S. Department of Labor’s Employee Benefits Security Administration (EBSA) and the Internal Revenue Service. Its publication does not constitute legal, accounting, or other professional advice.

To view this and other EBSA publications, visit the agency’s website at: www.dol.gov/ebsa. To order publications, contact us electronically at:

www.askebsa.dol.gov. Or call toll free: 866-444-3272.

For assistance from a benefits advisor, visit EBSA’s website at www.dol.gov/ebsa and click on “Request Assistance.” Or call toll free: 866-444-3272.

401(k) Plans for Small Businesses (IRS Publication 4222) is also available from the Internal Revenue Service at: 1-800-TAX-FORM (829-3676). (Please indicate publication number when ordering.) This publication will be made available in alternative format to persons with disabilities upon request: Voice phone: (202) 693-8664 TDD: (202) 501-3911. Publication 4222 (Rev. 12-2011) Catalog Number 37055P Department of the Treasury Internal Revenue Service www.irs.gov and U.S. Department of Labor

401(k) fees checklist

Many 401(k) plan participants are concerned about the fees in the plan as a result of increased media and governmental focus on this issue. How do you get the best value for your money and is your 401(k) on target to deliver the benefits you expect?

401(k) plan participants began paying more attention to the fees and performance of their retirement accounts after August 2012 when new federal regulations required additional disclosures to all 401(k) plan participants. We believe that the only logical approach to improve 401(k) plan results is through independent advice – separate from the firms that provide retirement plan and investment services. A simple three step analysis, review and planning exercise will address these concerns and put your retirement plan back on the right track.

Ask questions

The Department of Labor prepared this ten point checklist to help 401(k) plan participants gain an understanding of these fees and potential areas for improvement:

  1. What investment options are offered under your company’s 401(k) plan?
  2. Do you have all available documentation about the investment choices under your plan and the fees charged to your plan?
  3. What types of investment education are available under your plan?
  4. What arrangement is used to provide services under your plan (i.e., are any or all of the services or investment alternatives provided by a single provider)?
  5. Do you and other participants use most or all of the optional services offered under your 401(k) plan, such as a participant loan program and insurance coverage?
  6. If administrative services are paid separately from investment management fees, are they paid for by the plan, your employer or are they shared?
  7. Are the investment options tracking an established market index or is there a higher level of investment management services being provided?
  8. Do any of the investment options under your plan include sales charges (such as loads or commissions)?
  9. Do any of the investment options under your plan include any fees related to specific investments, such as 12b-1 fees, insurance charges, or surrender fees, and what do they cover?
  10. Does your plan offer any special funds or special classes of stock (generally sold to larger group investors)?

Get independent advice

Plan participants should have access to independent 401(k) plan advice (an adviser not affiliated with the company that provides services to the 401(k) plan or its investments). An independent adviser typically compares the fees and services of your plan in comparison to similar fees and services on comparable plans in order to arrive at any  recommendations designed to lower fees and boost performance for the participants. More importantly, an independent adviser helps plan participants focus on a “big picture” assessment of whether the current accounts are on target to meet the participant’s overall expectations of a secure retirement.

Measure your progress

It is important to periodically re-evaluate your retirement planning in light of overall life changes. Freedom Benefits offers individual consultations to delve into these issues in more detail. A simple but highly effective interactive software program called “Taking the mystery out of retirement planning” is incorporated into our one-on-one discussions and group workshops for 401(k) plan participants. This “mini-planning” process takes only about an hour but delivers big results.

By taking these three simple steps –

  1. question 401(k) fees and performance
  2. access an independent advisor
  3. participate in a retirement planning evaluation

– it is possible to significantly improve performance and satisfaction with you 401(k) plan.