S.266 - Retirement Security Act Of 2015

[congressional bills 114th congress]
[from the u.s. government printing office]
[s. 266 introduced in senate (is)]

114th congress
  1st session
                                 s. 266

   to amend the internal revenue code of 1986 to modify safe harbor 
requirements applicable to automatic contribution arrangements, and for 
                            other purposes.


_______________________________________________________________________


                   in the senate of the united states

                            january 27, 2015

ms. collins (for herself and mr. nelson) introduced the following bill; 
     which was read twice and referred to the committee on finance

_______________________________________________________________________

                                 a bill


 
   to amend the internal revenue code of 1986 to modify safe harbor 
requirements applicable to automatic contribution arrangements, and for 
                            other purposes.

    be it enacted by the senate and house of representatives of the 
united states of america in congress assembled,

section 1. short title.

    this act may be cited as the ``retirement security act of 2015''.

sec. 2. elimination of disincentive to pooling for multiple employer 
              plans.

    (a) in general.--not later than one year after the date of the 
enactment of this act, the secretary of the treasury shall prescribe 
final regulations under which a plan described in section 413(c) of the 
internal revenue code of 1986 may be treated as satisfying the 
qualification requirements of section 401(a) of such code despite the 
violation of such requirements with respect to one or more 
participating employers. such rules may require that the portion of the 
plan attributable to such participating employers be spun off to plans 
maintained by such employers.

sec. 3. modification of erisa rules relating to multiple employer 
              defined contribution plans.

    (a) in general.--
            (1) requirement of common interest.--section 3(2) of the 
        employee retirement income security act of 1974 is amended by 
        adding at the end the following:
            ``(c)(i) a qualified multiple employer plan shall not fail 
        to be treated as an employee pension benefit plan or pension 
        plan solely because the employers sponsoring the plan share no 
        common interest.
            ``(ii) for purposes of this subparagraph, the term 
        `qualified multiple employer plan' means a plan described in 
        section 413(c) of the internal revenue code of 1986 which--
                    ``(i) is an individual account plan with respect to 
                which the requirements of clauses (iii), (iv), and (v) 
                are met, and
                    ``(ii) includes in its annual report required to be 
                filed under section 104(a) the name and identifying 
                information of each participating employer.
            ``(iii) the requirements of this clause are met if, under 
        the plan, each participating employer retains fiduciary 
        responsibility for--
                    ``(i) the selection and monitoring of the named 
                fiduciary, and
                    ``(ii) the investment and management of the portion 
                of the plan's assets attributable to employees of the 
                employer to the extent not otherwise delegated to 
                another fiduciary.
            ``(iv) the requirements of this clause are met if, under 
        the plan, a participating employer is not subject to 
        unreasonable restrictions, fees, or penalties by reason of 
        ceasing participation in, or otherwise transferring assets 
        from, the plan.
            ``(v) the requirements of this clause are met if each 
        participating employer in the plan is an eligible employer as 
        defined in section 408(p)(2)(c)(i) of the internal revenue code 
        of 1986, applied--
                    ``(i) by substituting `500' for `100' in subclause 
                (i) thereof,
                    ``(ii) by substituting `5' for `2' each place it 
                appears in subclause (ii) thereof, and
                    ``(iii) without regard to the last sentence of 
                subclause (ii) thereof.''.
            (2) simplified reporting for small multiple employer 
        plans.--section 104(a) of such act (29 u.s.c. 1024(a)) is 
        amended by adding at the end the following:
    ``(7)(a) in the case of any eligible small multiple employer plan, 
the secretary may by regulation--
            ``(i) prescribe simplified summary plan descriptions, 
        annual reports, and pension benefit statements for purposes of 
        section 102, 103, or 105, respectively, and
            ``(ii) waive the requirement under section 103(a)(3) to 
        engage an independent qualified public accountant in cases 
        where the secretary determines it appropriate.
    ``(b) for purposes of this paragraph, the term `eligible small 
multiple employer plan' means, with respect to any plan year--
            ``(i) a qualified multiple employer plan, as defined in 
        section 3(2)(c)(ii), or
            ``(ii) any other plan described in section 413(c) of the 
        internal revenue code of 1986 that satisfies the requirements 
        of clause (v) of section 3(2)(c).''.
    (b) effective date.--the amendments made by this section shall 
apply to years beginning after december 31, 2015.

sec. 4. secure deferral arrangements.

    (a) in general.--subsection (k) of section 401 of the internal 
revenue code of 1986 is amended by adding at the end the following new 
paragraph:
            ``(14) alternative method for secure deferral arrangements 
        to meet nondiscrimination requirements.--
                    ``(a) in general.--a secure deferral arrangement 
                shall be treated as meeting the requirements of 
                paragraph (3)(a)(ii).
                    ``(b) secure deferral arrangement.--for purposes of 
                this paragraph, the term `secure deferral arrangement' 
                means any cash or deferred arrangement which meets the 
                requirements of subparagraphs (c), (d), and (e) of 
                paragraph (13), except as modified by this paragraph.
                    ``(c) qualified percentage.--for purposes of this 
                paragraph, with respect to any employee, the term 
                `qualified percentage' means, in lieu of the meaning 
                given such term in paragraph (13)(c)(iii), any 
                percentage determined under the arrangement if such 
                percentage is applied uniformly and is--
                            ``(i) at least 6 percent, but not greater 
                        than 10 percent, during the period ending on 
                        the last day of the first plan year which 
                        begins after the date on which the first 
                        elective contribution described in paragraph 
                        (13)(c)(i) is made with respect to such 
                        employee,
                            ``(ii) at least 8 percent during the first 
                        plan year following the plan year described in 
                        clause (i), and
                            ``(iii) at least 10 percent during any 
                        subsequent plan year.
                    ``(d) matching contributions.--
                            ``(i) in general.--for purposes of this 
                        paragraph, an arrangement shall be treated as 
                        having met the requirements of paragraph 
                        (13)(d)(i) if and only if the employer makes 
                        matching contributions on behalf of each 
                        employee who is not a highly compensated 
                        employee in an amount equal to the sum of--
                                    ``(i) 100 percent of the elective 
                                contributions of the employee to the 
                                extent that such contributions do not 
                                exceed 1 percent of compensation,
                                    ``(ii) 50 percent of so much of 
                                such contributions as exceed 1 percent 
                                but do not exceed 6 percent of 
                                compensation, plus
                                    ``(iii) 25 percent of so much of 
                                such contributions as exceed 6 percent 
                                but do not exceed 10 percent of 
                                compensation.
                            ``(ii) application of rules for matching 
                        contributions.--the rules of clause (ii) of 
                        paragraph (12)(b) and clauses (iii) and (iv) of 
                        paragraph (13)(d) shall apply for purposes of 
                        clause (i) but the rule of clause (iii) of 
                        paragraph (12)(b) shall not apply for such 
                        purposes. the rate of matching contribution for 
                        each incremental deferral must be at least as 
                        high as the rate specified in clause (i), and 
                        may be higher, so long as such rate does not 
                        increase as an employee's rate of elective 
                        contributions increases.''.
    (b) matching contributions and employee contributions.--subsection 
(m) of section 401 of the internal revenue code of 1986 is amended by 
redesignating paragraph (13) as paragraph (14) and by inserting after 
paragraph (12) the following new paragraph:
            ``(13) alternative method for secure deferral 
        arrangements.--a defined contribution plan shall be treated as 
        meeting the requirements of paragraph (2) with respect to 
        matching contributions and employee contributions if the plan--
                    ``(a) is a secure deferral arrangement (as defined 
                in subsection (k)(14)),
                    ``(b) meets the requirements of clauses (ii) and 
                (iii) of paragraph (11)(b), and
                    ``(c) provides that matching contributions on 
                behalf of any employee may not be made with respect to 
                an employee's contributions or elective deferrals in 
                excess of 10 percent of the employee's compensation.''.
    (c) effective date.--the amendments made by this section shall 
apply to plan years beginning after december 31, 2015.

sec. 5. credit for employers with respect to modified safe harbor 
              requirements.

    (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. 45s. credit for small employers with respect to modified safe 
              harbor requirements for automatic contribution 
              arrangements.

    ``(a) general rule.--for purposes of section 38, in the case of a 
small employer, the safe harbor adoption credit determined under this 
section for any taxable year is the amount equal to the total of the 
employer's matching contributions under section 401(k)(14)(d) during 
the taxable year on behalf of employees who are not highly compensated 
employees, subject to the limitations of subsection (b).
    ``(b) limitations.--
            ``(1) limitation with respect to compensation.--the credit 
        determined under subsection (a) with respect to contributions 
        made on behalf of an employee who is not a highly compensated 
        employee shall not exceed 2 percent of the compensation of such 
        employee for the taxable year.
            ``(2) limitation with respect to years of participation.--
        credit shall be determined under subsection (a) with respect to 
        contributions made on behalf of an employee who is not a highly 
        compensated employee only during the first 5 years such 
        employee participates in the qualified automatic contribution 
        arrangement.
    ``(c) definitions.--
            ``(1) in general.--any term used in this section which is 
        also used in section 401(k)(14) shall have the same meaning as 
        when used in such section.
            ``(2) small employer.--the term `small employer' means an 
        eligible employer (as defined in section 408(p)(2)(c)(i)).
    ``(d) denial of double benefit.--no deduction shall be allowable 
under this title for any contribution with respect to which a credit is 
allowed under this section.''.
    (b) credit to be part of general business credit.--subsection (b) 
of section 38 of the internal revenue code of 1986 is amended--
            (1) by striking ``plus'' at the end of paragraph (35),
            (2) by striking the period at the end of paragraph (36) and 
        inserting ``, plus'', and
            (3) by adding at the end the following new paragraph:
            ``(37) the safe harbor adoption credit determined under 
        section 45s.''.
    (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 adding after the item relating to section 45r the 
following new item:

``sec. 45s. credit for small employers with respect to modified safe 
                            harbor requirements for automatic 
                            contribution arrangements.''.
    (d) effective date.--the amendments made by this section shall 
apply to taxable years that include any portion of a plan year 
beginning after december 31, 2015.

sec. 6. modification of regulations.

    the secretary of the treasury shall promulgate regulations or other 
guidance that--
            (1) simplify and clarify the rules regarding the timing of 
        participant notices required under section 401(k)(13)(e) of the 
        internal revenue code of 1986, with specific application to--
                    (a) plans that allow employees to be eligible for 
                participation immediately upon beginning employment, 
                and
                    (b) employers with multiple payroll and 
                administrative systems, and
            (2) simplify and clarify the automatic escalation rules 
        under sections 401(k)(13)(c)(iii) and 401(k)(14)(c) of the 
        internal revenue code of 1986 in the context of employers with 
        multiple payroll and administrative systems.
such regulations or guidance shall address the particular case of 
employees within the same plan who are subject to different notice 
timing and different percentage requirements, and provide assistance 
for plan sponsors in managing such cases.

sec. 7. opportunity to claim the saver's credit on form 1040ez.

    the secretary of the treasury shall modify the forms for the return 
of tax of individuals in order to allow individuals claiming the credit 
under section 25b of the internal revenue code of 1986 to file (and 
claim such credit on) form 1040ez.
                                 
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