113th Congress

USA Retirement Funds Act

Introduced as joint bills S 1979 by Senator Thomas Harkin (D-IA) and HR 5828 by Representative Matthew Cartwright (D-PA) in the 113th Congress on Jan 30, 2014.

The bill requires each employer (except certain small employers, governments, and churches) that does not maintain a qualifying plan or arrangement meeting specified criteria for any part of a calendar year to make available to each qualifying employee for the calendar year an automatic USA Retirement Fund arrangement.

It defines an “automatic USA Retirement Fund arrangement” as one that covers each qualifying employee of the covered employer for the calendar year and under which a qualifying employee: (1) may elect to contribute to an automatic USA Retirement Fund through payroll deductions or other periodic direct deposits (including electronic payments), or to have such payments made to the employee directly in cash; (2) is treated as having made such an election in a certain amount unless the individual specifically elects not to have such contributions made or to have them made at a different percentage or in a different amount; and (3) may elect annually to modify the selection of the USA Retirement Fund to which contributions are made for such year.

Specifies requirements for the establishment of each USA Retirement Fund and its board of trustees.

Limits an employer’s contribution to a Fund on behalf of each employee to $5,000. Requires a Fund to pay benefits in the form of an annuity meeting certain criteria. Directs the Secretary of Labor (Secretary, unless otherwise provided) to recognize an independent, private Commission for USA Retirement Funds Funding to make recommendations on the funding of Funds. Amends the Employee Retirement Income Security Act of 1974 (ERISA) to declare that an employer shall not be a fiduciary with respect to the selection, management, or administration of a USA Retirement Fund solely because it makes the Fund available through an automatic USA Retirement Fund arrangement. Affirms a participating employer’s responsibility, however, for meeting enrollment requirements and transmitting contributions. Prescribes civil monetary penalties and enforcement measures for employer failure to remit timely contributions to Automatic USA Retirement Fund arrangements, and criminal penalties for false statements.

Source: Congress.gov. Bill summary authored by the Congressional Research Service.


Retirement Security Act of 2014

Introduced as S 1970 by Senator Susan Collins (R-ME) and Senator Bill Nelson (D-FL) in the 113th Congress on Jan 29, 2014.

Directs the Secretary of the Treasury to: (1) prescribe final regulations to permit employers to participate in multiple employer pension benefit plans, (2) promulgate regulations or other guidance to simplify and clarify rules relating to the timing of participant notices required under tax-preferred pension plans and the automatic escalation rules, and (3) modify the 1040EZ tax return form to allow taxpayers to claim the tax credit for retirement savings (saver’s credit) on such form.

Amends the Employee Retirement Income Security Act of 1974 (ERISA) and the Internal Revenue Code, with respect to employer pension benefit plans, to: (1) allow employers to maintain a tax-exempt multiple employer pension benefit plan even if the employers sponsoring the plan share no common interest, (2) modify requirements for secure deferral arrangements with respect to nondiscrimination and employer matching contributions, and (3) allow employers with not more than 100 employees a business-related tax credit to cover increased matching contributions required by this Act.

Source: Congress.gov. Bill summary authored by the Congressional Research Service.

Secure Annuities for Employee (SAFE) Retirement Act of 2013

Introduced as S 1270 by Senator Orrin Hatch (R-UT) in the 113th Congress on July 9, 2013.

Creates a Starter 401(k) retirement plan for businesses that do not offer a retirement plan. Annual contributions would be limited to $8,000 and employer contributions are not allowed to reduce administrative burden and the traditional expense of 401(k) plans. The tax credit for pension start-up costs for small businesses would be increased from $500 to $5,000. The 10 percent contribution cap to automatic 401(k)s would be eliminated. Auto-escalation contribution levels will be permitted beyond the current cap of 10 percent.

Allows for 25 percent of the account to be used to purchase a deferred joint and survivor life annuity.

Allow qualifying businesses to share the administrative costs by joining multiple employer plans (MEPs) despite sharing “no common interest” (i.e. a union or type of company). A MEP would not be disqualified if one participating business were in violation of plan rules. Small MEPs would have simplified reporting requirements.

IRA prohibited transaction rules jurisdiction (ERISA oversight) would be shifted from the Department of Labor to the Department of the Treasury.

Source: Congress.gov. Bill summary authored by the Congressional Research Service.

Retirement Plan Simplification and Enhancement Act of 2013

Introduced as HR 2117 by Representative Richard Neal (D-MA) in the 113th Congress. This bill was introduced on May 22, 2013.

Amends the Internal Revenue Code (IRC) to repeal the 10% cap on the qualified percentage of an employee’s compensation as the standard for an employer’s contribution to an automatic cash or deferred contribution arrangement under the alternative method for meeting nondiscrimination requirements. Prescribes criteria for an alternative method for qualified secure deferral arrangements (under a qualified profit-sharing or stock bonus plan, a rural cooperative plan, or a “pre-ERISA” money purchase plan established before enactment of the Employee Retirement Income Security Act of 1974 [ERISA]) to meet the nondiscrimination requirement that the actual deferral percentage for eligible highly compensated employees for the plan year bears a relationship, meeting specified criteria, to the actual deferral percentage for all other eligible employees for the preceding plan year.

Allows an eligible employer a secure deferral arrangement credit against the income tax of 10% of all contributions under a secure deferral arrangement made during the plan year by or on behalf of employees other than highly compensated employees.

Revises the period of service requirements for a qualified cash or deferred arrangement to cover long-term part-time employees working at least 3 consecutive 12-month periods during each of which the employee has at least 500 hours of service.

Directs the Secretaries of the Treasury and of Labor to prescribe administrative guidance establishing conditions allowing the use of a multiple employer plan. Directs the Government Accountability Office (GAO) to study the feasibility and desirability of extending the application of spousal consent requirements to defined contribution plans to which they do not currently apply. Amends ERISA to authorize an employee benefit plan to allow a named fiduciary, or a fiduciary designated by a named fiduciary, to appoint an annuity administrator for an individual account plan. Directs the Secretary of the Treasury to issue final regulations stating that any specified age or service condition (or combination of such conditions) with respect to a lifetime income investment under a defined contribution plan shall be disregarded in determining whether the lifetime income investment is currently available for distribution to the employee.

Amends the IRC to allow an Individual Retirement Account (IRA) to be invested in a life insurance contract rolled over to an IRA from a qualified retirement plan if the contract provides only incidental death benefits. Declares that a trust forming part of a defined contribution plan shall not be treated as failing to constitute a qualified trust solely by reason of allowing after a certain date as portable lifetime income options: (1) qualified distributions of a lifetime income investment, or (2) distributions of a lifetime income investment in the form of a qualified plan distribution annuity contract.

Source: Congress.gov. Bill summary authored by the Congressional Research Service.

 

Shrinking Emergency Account Losses (SEAL) Act

Introduced as S 606 by Senator Bill Nelson (D-FL) in the 113th Congress on March 19, 2013.

Amends the Internal Revenue Code, with respect to loans made from a qualified employer plan, to: (1) extend the period for repayment of loans if a plan terminates or a plan participant becomes unemployed, and (2) prohibit plans from allowing the use of credit cards or similar arrangements to access loan amounts.

Requires the Secretary of the Treasury to modify regulations governing hardship distributions from qualified employer plans to allow participants to make additional contributions to a plan during the six month period following a hardship distribution.

Source: Congress.gov. Bill summary authored by the Congressional Research Service.