114th Congress, 2nd Session

Retirement Security for American Workers Act

Introduced as H.R. 6396 by Representative Vern Buchanan (R-FL) on November 29, 2016.

This bill amends the Internal Revenue Code of 1986 to modify the qualification requirements with respect to certain multiple employer plans with pooled plan providers, and for other purposes. Amendments in this bill include, among others: qualification requirements for certain multiple employer plans with pooled plan providers, including duties as plan administrators. This bill also amends the Employee Retirement Income Security Act of 1974 to: not require a common interest requirement for pooled employer plans by treating a pooled employer plan as a single employee pension benefit plan; to define a pooled employer plan as an individual account plan established or maintained for the purpose of providing benefits to the employees of two or more employers; and to lay out specifications requirements for plan terms, including designating a pooled plan provider to be named fiduciary of the plan and other plan specifications.

Source: Congress.gov; CRI summary of bill text.

Retirement Enhancement and Savings Act of 2016

Introduced as S. 3471 by Senator Orrin G. Hatch (R-UT) on November 16, 2016.

This bill reported out of the Senate Finance Committee on September 21, 2016. It is a package of retirement savings reforms that include: making multiple employer plans (MEPS) more attractive by eliminating barriers and improving the quality of MEP service providers; removing the 10 percent automatic enrollment safe harbor cap; simplification of safe harbor 401(k) rules; increasing the credit for small employer pension plan start-up costs; creating a new tax credit of up to $500 per year to employers to defray startup costs for new section 401(k) plans and SIMPLE IRA plans that include automatic enrollment; repealing the maximum age for traditional IRA contributions; and allowing for portability of lifetime income options, among other reforms.

This bill has been placed on the Senate Legislative Calendar under General Orders (Calendar No. 670).

Source: Congress.gov; Bill summary authored by the Senate Finance Committee’s summary document.

State Retirement Savings Act of 2016

Introduced as S. 3389 by Senator Martin Heinrich (D-NM) on September 22, 2016.

This bill would authorize state-sponsored multiple employer plans and state payroll deduction savings programs. It also amends Title I of the Employee Retirement Income Security Act (ERISA) of 1974 to allow states to establish state-sponsored multiple employer plans with voluntary participation from employers with an option to opt-out for employees of any participating employer if the plan provides for auto-enrollment. Individuals may enroll directly into a state MEP if the employer chooses not to participate and employer contributions cannot be required in such case.

This bill provides for states to establish state payroll deduction savings programs which would not be considered to be preempted under ERISA provided that: the program is established pursuant to state law; the program is implemented and administered by the state; the state assumes responsibility for the security of payroll deductions and employee savings; employees are notified of their rights under the program; employee participation is voluntary; employer’s participation is required by state law; and the employer has no discretionary authority, control, or responsibility under the program. The state will be the plan sponsor, named fiduciary, and plan administrator. The state retains full responsibility for the operation and administration of the program.

The bill would authorize state programs to permit employers to contribute to an employee’s account and permit an employer to provide bonuses or other monetary incentive to employees to participate in the program. The program also may be offered to employees who are already eligible for some other workplace savings arrangements.

The bill has been read twice and referred to the Senate Committee on Finance.

Source: Congress.gov; CRI summary of bill text.

USA Retirement Funds Act

Introduced as H.R. 6136 by Representative Matt Cartwright (D-PA) on September 22, 2016.

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 (defined as an employer who does not maintain a qualified retirement plan or arrangement for any part of the year) 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; (3) may elect annually to modify the selection of the USA Retirement Fund to which contributions are made for such year not more than once per calendar year; and (4) may elect to terminate participation in the arrangement at any time.

Contributions would begin at 3 percent of compensation beginning on January 1, 2017, and rise 1 percent per year until it reaches 6 percent beginning after December 31, 2019.  The bill would limit an employer’s contribution to a Fund on behalf of each employee to $5,000 and the employee’s contribution to $15,000.

The bill specifies requirements for the establishment of each USA Retirement Fund and its board of trustees, which shall consist of at least 3 individuals who are independent of services providers to the fund and are collectively able to adequately represent the interests of active participants, retirees, and contributing employers. The Secretary of Labor shall establish a process to review plans determined to be a USA Retirement Fund.

A Fund must 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.

Any law of state that directly or indirectly prohibits or restricts the establishment or operation of an auto-USA Retirement Fund arrangement would be preempted.

The bill has been referred to the House Committee on Education and the Workforce and to the House Committee on Ways and Means.

Source: Congress.gov; CRI summary of bill text.

Small Business Employee Retirement Savings Act

Introduced as S. 3338 by Senator Richard Burr (R-NC) and Senator Michael Bennet (D-CO) on September 15, 2016.

The bill would amend the Internal revenue Code of 1986 to encourage small businesses to enroll their employees in retirement savings options. The bill includes three key provisions that would make it easier for employees of small businesses to prepare for retirement: it would increase the retirement plan start up tax credit to $5,000 from the current $500; it would create a $500 per year tax credit (for up to three years) for new plans that offer auto enrollment, or existing plans that add auto enrollment features; and it would eliminate the 10% auto enrollment limit, allowing employees to make larger contributions to retirement saving.

The bill has been read twice and referred to the Senate Committee on Finance.

Source: Congress.gov; Bill summary authored by Senator Burr’s press release.

Reducing IRS and ERISA Reporting Burden for Small Businesses

Introduced as S. 3307 by Senator Mark R. Warner (D-VA) and Senator Susan M. Collins (R-ME) in the 114th Congress on September 8, 2016.

The bill would reduce duplicative filing costs for small businesses looking to offer retirement plans to their employees and sole-proprietors. It directs the Department of Labor (DOL) and the Treasury Department to allow employers and sole-proprietors participating in retirement plans administered the same way to file a single aggregated Form 5500, a required annual return that provides important compliance information to DOL and Treasury. Under current law, despite sharing a common administrative framework, each individual plan is still required to file a separate Form 5500 to satisfy reporting requirements under ERISA and the Internal Revenue Code. This bill would eliminate duplicative reporting by plan administrators, which will reduce costs for small businesses that maintain retirement plans. To provide DOL and Treasury time to implement this change, the proposal has an effective date of no later than January 1, 2020.

The bill has been read twice and referred to the Senate Committee on Health, Education, Labor, and Pensions.

Source: Congress.gov; Bill summary authored by Senator Warner’s press release.

SAVE UPs Act

Introduced as H.R. 5731 by Representative Joseph Crowley (D-NY), on July 12, 2016.

The Secure, Accessible, Valuable, Efficient Universal Pension Accounts (SAVE UPs) Act would establish universal pension accounts for every American worker. The bill would direct employers with 10 or more employees who do not already offer a retirement plan, to open individualized retirement accounts for every employee and contribute to those plans 50 cents per hour worked, per employee. If an employer has an existing retirement plan that qualifies, they can keep contributing to that plan for their employees. In addition to the employer contribution, once enrolled, employees will automatically begin contributing 3% of their pre-tax income, which increases gradually over time, unless they opt-out. The bill would help with the cost of contributing to these plans by offering smaller employer a tax credit worth the value of contributions to 10 employee accounts. For small businesses with fewer than 10 employees that are not required to contribute, this tax credit would also make it financially possible to do so voluntarily.  Similar to the Thrift Savings Plan currently offered to federal employees, SAVE UP accounts will enjoy government oversight, private management, and a limited number of low-fee index fund options.

This bill has been referred to the House Committee on Ways and Means.

Source: Congress.gov; Bill summary authored by Congressman Crowley’s press release.

Retirement Savings Lost and Found Act of 2016

SENATE BILL 

Introduced as S. 3078 by Senator Elizabeth Warren (D-MA) in the 114th Congress on June 21, 2016.

This bill would create a national online database of abandoned retirement plans constructed from data that employers already must report, enabling any worker to locate all of their former employer-sponsored retirement accounts. The act would ensure that the lost and found is always up-to-date by requiring plan administrators to electronically notify the lost and found whenever a plan participant’s savings are moved out of their plan. The act would also make it easier for plan sponsors to move small accounts into age-appropriate target-date funds so that workers can maximize their investment returns. Lastly, the act requires plan sponsors to send lost, uncashed checks of less than $1,000 to the Treasury so that individuals can locate this money and continue to save for their retirement.

Source: Congress.gov; Bill summary authored by Senator Warren’s press release and fact sheet.

HOUSE BILL

Introduced as H.R. 5805 by Representative Luke Messer (R-IN) in the 114th Congress on July 14, 2016.

This bill would use data that employers are already required to report to the Treasury Department to create a national, online, lost and found for Americans’ retirement accounts, enabling any worker to locate all of their former employer-sponsored retirement accounts. The lost and found would be kept up-to-date by requiring plan administrators to notify it whenever a plan participant’s savings are moved out of their plan. The bill would also make it easier for plan sponsors to move small accounts into age-appropriate target-date funds so that workers can maximize their investment returns. Lastly, it would also require plan sponsors to send lost, uncashed checks of less than $1,000 to the Treasury so that individuals can locate this money and continue to save for their retirement.

This bill has been referred to the House Committee on Ways and Means, as well as the House Committee on Education and the Workforce. On September 19, 2016, it was referred to the Subcommittee on Health, Employment, Labor, and Pensions for committee consideration.

Source: Congress.gov; Bill Summary authored by Representative Messer’s press release and fact sheet.

MyRA Act

Introduced as H.R. 4491 by Representative Joseph Crowley (D-NY) in the 114th Congress on February 8, 2016.

This bill amends the Internal Revenue Code to establish an employee retirement option known as a MyRA account. A MyRA account functions as a Roth Individual Retirement Account. An employee who elects to establish a MyRA account may contribute any portion of a tax refund or make automatic payroll contributions to the account.

The funding of MyRA accounts is limited to retirement savings bonds issued by the Department of the Treasury with a specified interest rate and maturity date.

The bill imposes a tax on any employer who fails to comply with the requirement for making direct deposits to a MyRA account of wages designated by an employee.

This bill has been referred to House Committee on Ways and Means.

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

Encouraging Americans to Save Act

Introduced as S. 2492 by Senator Ron Wyden (D-OR) in the 114th Congress on February 3, 2016.

This bill amends the Internal Revenue Code to expand the tax credit for retirement savings contributions to: (1) make such credit refundable; (2) allow individual taxpayers (excluding dependents and full-time students) who have attained age 18 as of the close of the taxable year a credit for 50% of their retirement savings contributions up to $1,000; (3) increase the maximum income threshold for determining eligibility for the credit; and (4) allow direct deposit of credit amounts into the taxpayer’s retirement savings vehicle (e.g., MyRA or Roth IRA account).

The Department of the Treasury shall educate taxpayers on the benefits of the credit for retirement savings contributions.

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

American Savings Account Act of 2016

SENATE BILL

Introduced as S.2472 by Senator Jeff Merkley (D-OR) in the 114th Congress on Jan 28, 2016.

This bill amends the Employee Retirement Income Security Act of 1974 (ERISA) to establish a new retirement option for all employees and self-employed individuals to be known as the American Savings Account Fund (Fund). The Fund operates in a manner similar to the Thrift Savings Fund, which is available to federal employees.

The legislation would enable employees without access to a workplace plan to automatically enroll at a 3% contribution rate. Employees could opt out or alter their contribution rate as they see fit, up to a maximum $18,000 per year (the 401(k) deferral limit under tax rules). The bill allows for pre-tax and Roth contributions and the accounts would be portable. Contributions would be defaulted into a low-fee, lifecycle fund that automatically adjusts investments based on a worker’s age. At retirement, savings would be converted into a stream of income that could not be outlived. The plan could be used for rollovers from myRAs, the federal government’s new starter retirement savings account.

The bill establishes an American Savings Account Board of Directors to establish policies for the investment and management of the Fund. The Board shall select or establish a list of investment funds and options similar to those in the Thrift Savings Fund, among which participants in the Fund may chose.

The Board shall establish an American Savings Account Fund Advisory Council to advise the Board on matters relating to investment policies for the Fund.

The Fund is tax-exempt and any contribution to, or distribution from, the Fund are excludible from gross income.

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

HOUSE BILL 

Introduced as H.R. 5450 by Representative Jared Huffman (D-CA) in the 114th Congress on June 10, 2016.

This bill amends the Employee Retirement Income Security Act of 1974 (ERISA) to establish a new retirement option for all private sector workers, including full-time, part-time, and contract, to be known as the American Savings Account Fund. This fund operates in a manner similar to the Thrift Savings Fund, which is available to federal employees. Employees could opt out or change their contribution level, between two to ten percent, and employers would be able to make tax-advantaged matching or non-matching contributions to employees’ ASAs. The bill would also allow, but not require, self-employed individuals and 1099 independents to enroll in an ASA. The American Savings Account Fund is tax-exempt and contributions to, or distributions from, it are excludible from gross income.

The bill establishes an American Savings Account Board of Directors to establish policies for fund investment and management. The board shall select or establish a list of investment funds and options similar to those in the Thrift Savings Fund, among which participants may choose.

The board shall establish an American Savings Account Fund Advisory Council to advise the board on matters relating to investment policies.

This bill has been referred to the House Committee on Ways and Means.

Source: Congress.gov; Bill summary authored by the Congressional Research Service and Representative Huffman’s press release.