H.R. 5891 — what changed
Retirement Improvement and Savings Enhancement Act of 2021
From Introduced in House to Reported in House. 6 sections amended between Introduced in House and Reported in House.
Section 1 Short title; table of contents
changed
Short title— This Act may be cited as the “Retirement Improvement and Savings Enhancement Act” Act of 2021” or the “RISE Act”.
Table of contents— The table of contents for this Act is as follows:
Sec. 2 Retirement savings lost and found
removed
In general—
renumbered
was (2)(2)
Establishment of retirement savings lost and found— Part 5 of title I of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1341 et seq.) is amended by adding at the end the following:
added “523. Retirement Savings Lost and Found
removed
“522. Retirement Savings Lost and Found
“(a) Establishment
“(1) In general—Not later than 2 years after the date of the enactment of this section, the Secretary of Labor, in consultation with the Secretary of the Treasury, shall establish an online searchable database (to be managed by the Department of Labor in accordance with this section) to be known as the “Retirement Savings Lost and Found”. The Retirement Savings Lost and Found shall—
“(A) allow an individual to search for information that enables the individual to locate the administrator of any plan described in paragraph (2) with respect to which the individual is or was a participant or beneficiary, and provide contact information for the administrator of any such plan;
“(B) allow the Department of Labor to assist such an individual in locating any such plan of the individual; and
“(C) allow the Department of Labor to make any necessary changes to contact information on record for the administrator based on any changes to the plan due to merger or consolidation of the plan with any other plan, division of the plan into two or more plans, bankruptcy, termination, change in name of the plan, change in name or address of the administrator, or other causes.
“(2) Plans described—A plan described in this paragraph is a plan to which the vesting standards of section 203 apply.
“(b) Administration—The Retirement Savings Lost and Found established under subsection (a) shall provide individuals described in subsection (a)(1) only with the ability to search for information that enables the individual to locate the administrator and contact information for the administrator of any plan with respect to which the individual is or was a participant or beneficiary, sufficient to allow the individual to locate the individual’s plan in order to recover any benefit owing to the individual under the plan.
“(c) Safeguarding participant privacy and security—In establishing the Retirement Savings Lost and Found under subsection (a), the Department of Labor shall take all necessary and proper precautions to ensure that individuals’ plan information maintained by the Retirement Savings Lost and Found is protected.
“(d) Definition of administrator—For purposes of this section and section 523, the term “administrator” has the meaning given such term in section 3(16)(A).
“(e) Information collection from plans—Effective with respect to plan years beginning after the second December 31 occurring after the date of the enactment of this subsection, the administrator of a plan to which the vesting standards of section 203 apply shall submit to the Department of Labor, at such time and in such form and manner as is prescribed in regulations—
“(1) the information described in paragraphs (1) through (4) of section 6057(b) of the Internal Revenue Code of 1986;
“(2) the information described in subparagraphs (A), (B), (E), and (F) of section 6057(a)(2) of the Internal Revenue Code of 1986; and
“(3) such other information as the Secretary of Labor may require.
“(f) Information collection from federal agencies—The Secretary of Labor is authorized to access and receive information collected by other Federal agencies that may be necessary to perform work related to the Retirement Savings Lost and Found. Such necessary and appropriate information, which shall be furnished to the Secretary of Labor on request, includes information covered by section 6103 of the Internal Revenue Code of 1986 and section 205(r) of the Social Security Act.
“(g) Program integrity audit—On an annual basis for each of the first 5 years beginning one year after the establishment of the database in subsection (a)(1) and every 5 years thereafter, the Inspector General of the Department of Labor shall conduct an audit of the administration of the Retirement Savings Lost and Found.”
renumbered
was (2)(3)
Conforming amendment— The table of contents for the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1001 et seq.) is amended by inserting after the matter relating to section 521 the following:
Sec. 4 Multiple employer 403(b) plans
In general— Section 403(b) of the Internal Revenue Code of 1986 is amended by adding at the end the following new paragraph:
“(15) Multiple employer plans
“(A) In general—Except in the case of a church plan, this subsection shall not be treated as failing to apply to an annuity contract solely by reason of such contract being purchased under a plan maintained by more than 1 employer.
“(B) Treatment of employers failing to meet requirements of plan
“(i) In general—In the case of a plan maintained by more than 1 employer, this subsection shall not be treated as failing to apply to an annuity contract held under such plan merely because of one or more employers failing to meet the requirements of this subsection if such plan satisfies rules similar to the rules of section 413(e)(2) with respect to any such employer failure.
“(ii) Additional requirements in case of non-governmental plans—A plan shall not be treated as meeting the requirements of this subparagraph unless the plan meets the requirements of subparagraph (A) or (B) of section 413(e)(1), except in the case of a multiple employer plan maintained solely by any of the following: A State, a political subdivision of a State, or an agency or instrumentality of any one or more of the foregoing.”
Annual registration for 403(b) multiple employer plan— Section 6057 of the Internal Revenue Code of 1986 is amended by redesignating subsection (g) as subsection (h) and by inserting after subsection (f) the following new subsection:
“(g) 403(b) multiple employer plans treated as one plan—In the case of annuity contracts to which this section applies and to which section 403(b) applies by reason of the plan under which such contracts are purchased meeting the requirements of paragraph (15) thereof, such plan shall be treated as a single plan for purposes of this section.”
Annual information returns for 403(b) multiple employer plan— Section 6058 of the Internal Revenue Code of 1986 is amended by redesignating subsection (f) as subsection (g) and by inserting after subsection (e) the following new subsection:
“(f) 403(b) multiple employer plans treated as one plan—In the case of annuity contracts to which this section applies and to which section 403(b) applies by reason of the plan under which such contracts are purchased meeting the requirements of paragraph (15) thereof, such plan shall be treated as a single plan for purposes of this section.”
Amendments to Employee Retirement Income Security Act of 1974—
removed
Treated as pooled employer plan—
renumbered
was (5)(2)(2)
In general— Section 3(43)(A) of the Employee Retirement Income Security Act of 1974 is amended—
renumbered
was (5)(2)(2)(3)
in clause (ii), by striking “section 501(a) of such Code or” and inserting “section 501(a) of such Code, a plan that consists of contracts described in section 403(b) of such Code, or”; and
renumbered
was (5)(2)(2)(4)
in the flush text at the end, by striking “the plan.” and inserting “the plan, but such term shall include any program (other than a governmental plan) maintained for the benefit of the employees of more than 1 employer that consists of contracts described in section 403(b) of such Code and that meets the requirements of subparagraph (A) or (B) of section 413(e)(1) of such Code.”.
removed
Conforming amendments— Sections 3(43)(B)(v)(II) and 3(44)(A)(i)(I) of the Employee Retirement Income Security Act of 1974 are each amended by striking “section 401(a) of such Code or” and inserting “401(a) of such Code, a plan that consists of contracts described in section 403(b) of such Code, or”.
changed
Fiduciaries—Conforming amendments— Section 3(43)(B)(ii) Sections 3(43)(B)(v)(II) and 3(44)(A)(i)(I) of the Employee Retirement Income Security Act of 1974 is amended—are each amended by striking “section 401(a) of such Code or” and inserting “section 401(a) of such Code, a plan that consists of contracts described in section 403(b) of such Code, or”.
removed
by striking “trustees meeting the requirements of section 408(a)(2) of the Internal Revenue Code of 1986” and inserting “trustees (or other fiduciaries in the case of a plan that consists of contracts described in section 403(b) of the Internal Revenue Code of 1986) meeting the requirements of section 408(a)(2) of such Code”; and
removed
by striking “holding” and inserting “holding (or causing to be held under the terms of a plan consisting of such contracts)”.
Regulations relating to plan termination— The Secretary of the Treasury (or the Secretary’s designee) shall prescribe such regulations as may be necessary to clarify the treatment of a plan termination by an employer in the case of plans to which section 403(b)(15) of the Internal Revenue Code of 1986 applies.
Modification of model plan language, etc—
Plan notifications— The Secretary of the Treasury (or the Secretary’s designee) shall modify the model plan language published under section 413(e)(5) of the Internal Revenue Code of 1986 to include language that notifies participating employers described in section 501(c)(3), and which are exempt from tax under section 501(a), that the plan is subject to the Employee Retirement Income Security Act of 1974 and that such employer is a plan sponsor with respect to its employees participating in the multiple employer plan and, as such, has certain fiduciary duties with respect to the plan and to its employees.
Model plans for multiple employer 403(b) non-governmental plans— For plans to which section 403(b)(15)(A) of the Internal Revenue Code of 1986 applies (other than a plan maintained for its employees by a State, a political subdivision of a State, or an agency or instrumentality of any one or more of the foregoing), the Secretary of the Treasury shall publish model plan language similar to model plan language published under section 413(e)(5) of such Code.
Educational outreach to employers exempt from tax— The Secretary of the Treasury shall provide education and outreach to increase awareness to employers described in section 501(c)(3) of the Internal Revenue Code of 1986, and which are exempt from tax under section 501(a) of such Code, that multiple employer plans are subject to the Employee Retirement Income Security Act of 1974 and that such employer is a plan sponsor with respect to its employees participating in the multiple employer plan and, as such, has certain fiduciary duties with respect to the plan and to its employees.
No inference with respect to church plans— Regarding any application of section 403(b) of the Internal Revenue Code of 1986 to an annuity contract purchased under a church plan (as defined in section 414(e) of such Code) maintained by more than 1 employer, or to any application of rules similar to section 413(e) of such Code to such a plan, no inference shall be made from section 403(b)(15)(A) of such Code (as added by this Act) not applying to such plans.
Effective date—
In general— The amendments made by this section shall apply to plan years beginning after December 31, 2021.
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 the case of a plan to which section 403(b)(15) of the Internal Revenue Code of 1986 applies.
Sec. 9 Review and report to congress relating to reporting and disclosure requirements
Study— As soon as practicable after the date of enactment of this Act, the Secretary of Labor, the Secretary of the Treasury, and the Director of the Pension Benefit Guaranty Corporation shall review the reporting and disclosure requirements as applicable to each such agency head, of—
changed
the Employee Retirement Income Security Act of 1974 applicable to pension plans (as defined in section 3(2) of such Act (29 U.S.C. 1002(2))); 1002(2)); and
the Internal Revenue Code of 1986 applicable to qualified retirement plans (as defined in section 4974(c) of such Code, without regard to paragraphs (4) and (5) of such section).
Report—
In general— Not later than 2 years after the date of enactment of this Act, the Secretary of Labor, the Secretary of the Treasury, and the Director of the Pension Benefit Guaranty Corporation, jointly, and after consultation with a balanced group of participant and employer representatives, shall with respect to plans referenced in subsection (a) report on the effectiveness of the applicable reporting and disclosure requirements and make such recommendations as may be appropriate to the Committee on Education and Labor and the Committee on Ways and Means of the House of Representatives and the Committee on Health, Education, Labor, and Pensions and the Committee on Finance of the Senate to consolidate, simplify, standardize, and improve such requirements so as to simplify reporting for such plans and ensure that plans can furnish and participants and beneficiaries timely receive and better understand the information they need to monitor their plans, plan for retirement, and obtain the benefits they have earned.
Analysis of effectiveness— To assess the effectiveness of the applicable reporting and disclosure requirements, the report shall include an analysis, based on plan data, of how participants and beneficiaries are providing preferred contact information, the methods by which plan sponsors and plans are furnishing disclosures, and the rate at which participants and beneficiaries (grouped by key demographics) are receiving, accessing, understanding, and retaining disclosures.
Collection of information— The agencies shall conduct appropriate surveys and data collection to obtain any needed information.
Sec. 10 Eliminating unnecessary plan requirements related to unenrolled participants
Amendment of Employee Retirement Income Security Act of 1974—
In general— Part 1 of subtitle B of subchapter I of the Employee Retirement Income Security Act of 1974 is amended by redesignating section 111 as section 112 and by inserting after section 110 the following new section:
“111. Eliminating unnecessary plan requirements related to unenrolled participants
“(a) In general—Notwithstanding any other provision of this title, with respect to any individual account plan, no disclosure, notice, or other plan document (other than the notices and documents described in paragraphs (1) and (2)) shall be required to be furnished under this title to any unenrolled participant if the unenrolled participant receives—
“(1) an annual reminder notice of such participant’s eligibility to participate in such plan and any applicable election deadlines under the plan; and
“(2) any document requested by such participant that the participant would be entitled to receive notwithstanding this section.
“(b) Unenrolled participant—For purposes of this section, the term “unenrolled participant” means an employee who—
“(1) is eligible to participate in an individual account plan;
“(2) has received the summary plan description pursuant to section 104(b) and any other eligibility notices required to be furnished under this title in connection with such participant’s initial eligibility to participate in such plan;
“(3) is not participating in such plan;
“(4) does not have a balance in the plan; and
changed
“(5) satisfies such other criteria as the Secretary of Labor may determine appropriate, as prescribed in guidance issued in consultation with the Secretary of the Treasury.
“(c) Annual reminder notice—For purposes of this section, the term “annual reminder notice” means a notice provided in accordance with section 2520.104b–1 of title 29, Code of Federal Regulations (or any successor regulation), which—
“(1) is furnished in connection with the annual open season election period with respect to the plan or, if there is no such period, is furnished within a reasonable period prior to the beginning of each plan year;
“(2) notifies the unenrolled participant of—
“(A) the unenrolled participant’s eligibility to participate in the plan; and
“(B) the key benefits and rights under the plan, with a focus on employer contributions and vesting provisions; and
“(3) provides such information in a prominent manner calculated to be understood by the average participant.”
Clerical amendment— The table of contents in section 1 of the Employee Retirement Income Security Act of 1974 is amended by striking the item relating to section 111 and by inserting after the item relating to section 110 the following new items:
Amendment of Internal Revenue Code of 1986— Section 414 of the Internal Revenue Code of 1986 is amended by adding at the end the following new subsection:
“(aa) Eliminating unnecessary plan requirements related to unenrolled participants
“(1) In general—Notwithstanding any other provision of this title, with respect to any defined contribution plan, no disclosure, notice, or other plan document (other than the notices and documents described in subparagraphs (A) and (B)) shall be required to be furnished under this title to any unenrolled participant if the unenrolled participant receives—
“(A) an annual reminder notice of such participant’s eligibility to participate in such plan and any applicable election deadlines under the plan, and
“(B) any document requested by such participant that the participant would be entitled to receive notwithstanding this subsection.
“(2) Unenrolled participant—For purposes of this subsection, the term “unenrolled participant” means an employee who—
“(A) is eligible to participate in a defined contribution plan,
“(B) has received the summary plan description pursuant to section 104(b) of the Employee Retirement Income Security Act of 1974 and any other eligibility notices in connection with such participant’s initial eligibility to participate in such plan,
“(C) is not participating in such plan,
“(D) does not have a balance in the plan, and
“(E) satisfies such other criteria as the Secretary of the Treasury may determine appropriate, as prescribed in guidance issued in consultation with the Secretary of Labor.
“(3) Annual reminder notice—For purposes of this subsection, the term “annual reminder notice” means the notice described in section 111(c) of the Employee Retirement Income Security Act of 1974.”
Effective date— The amendments made by this section shall apply to plan years beginning after December 31, 2021.
Sec. 12 Improving coverage for part-time workers
Amendment of Employee Retirement Income Security Act of 1974—
In general— Section 202 of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1052) is amended by adding at the end the following new subsection:
changed
“(c) Special rule for certain part-Time part-time employees
“(1) In general—A pension plan that includes either a qualified cash or deferred arrangement (as defined in section 401(k) of the Internal Revenue Code of 1986) or a salary reduction agreement (as described in section 403(b) of such Code) shall not require, as a condition of participation in the arrangement or agreement, that an employee complete a period of service with the employer (or employers) maintaining the plan extending beyond the close of the earlier of—
“(A) the period permitted under subsection (a)(1) (determined without regard to subparagraph (B)(i) thereof); or
“(B) the first 24-month period—
“(i) consisting of 2 consecutive 12-month periods during each of which the employee has at least 500 hours of service; and
“(ii) by the close of which the employee has attained the age of 21.
“(2) Exception—Paragraph (1)(B) shall not apply to any employee described in section 410(b)(3) of the Internal Revenue Code of 1986.
“(3) Coordination with other rules
“(A) In general—In the case of employees who are eligible to participate in the arrangement or agreement solely by reason of paragraph (1)(B):
“(i) Exclusions—An employer may elect to exclude such employees from the application of subsections (a)(4), (k)(3), (k)(12), (k)(13), (k)(15)(B)(i)(I), and (m)(2) of section 401 of the Internal Revenue Code of 1986 and section 410(b) of such Code.
“(ii) Time of participation—The rules of subsection (a)(4) shall apply to such employees.
“(B) 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 (1)(B) from the application of the vesting and benefit requirements under subsections (b) and (c) of section 416 of the Internal Revenue Code of 1986.
“(4) 12-month period—For purposes of this subsection, 12-month periods shall be determined in the same manner as under the last sentence of subsection (a)(3)(A), except that 12-month periods beginning before January 1, 2021, shall not be taken into account.”
Vesting— Section 203(b) of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1053(a)) is amended by redesignating paragraph (4) as paragraph (5) and by inserting after paragraph (3) the following new paragraph:
“(4) Part-time employees—For purposes of determining whether an employee who is eligible to participate in a qualified cash or deferred arrangement or a salary reduction agreement under a plan solely by reason of section 202(c)(1)(B) has a nonforfeitable right to employer contributions—
“(A) except as provided in subparagraph (B), each 12-month period for which the employee has at least 500 hours of service shall be treated as a year of service;
“(B) paragraph (3) shall be applied by substituting “at least 500 hours of service” for “more than 500 hours of service” in subparagraph (A) thereof; and
“(C) 12-month periods occurring before the 24-month period described in section 202(c)(1)(B) shall not be treated as years of service.”
Pre-2021 service— Section 112(b) of the Setting Every Community Up for Retirement Enhancement Act of 2019 (26 U.S.C. 401 note) is amended by striking “section 401(k)(2)(D)(ii)” and inserting “paragraphs (2)(D)(ii) and (15)(B)(iii) of section 401(k)”.
Conforming amendments to Internal Revenue Code of 1986—
changed
In general— Section 410(a) of the Internal Revenue Code of 1986 is amended by adding at the end the following new paragraphs:paragraph:
“(6) Special rule for certain part-time employees
“(A) In general—In the case of a plan that includes either a qualified cash or deferred arrangement (as defined in section 401(k)), a trust of which such plan is a part shall not constitute a qualified trust under section 401(a) if the plan requires, as a condition of participation in the plan or 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 paragraph (1) (determined without regard to subparagraph (B)(i) thereof), or
“(ii) the first 24-month period—
“(I) consisting of 2 consecutive 12-month periods during each of which the employee has at least 500 hours of service, and
“(II) by the close of which the employee has attained the age of 21.
“(B) Exception—Subparagraph (A)(ii) shall not apply to any employee described in section 410(b)(3).
“(C) Coordination with other rules
“(i) In general—In the case of employees who are eligible to participate in the arrangement or agreement solely by reason of subparagraph (A)(ii)—
“(I) Exclusions—An employer may elect to exclude such employees from the application of subsection (b) and of subsections (a)(4), (k)(3), (k)(12), (k)(13), (k)(15)(B)(i)(I), and (m)(2) of section 401.
“(II) Time of participation—The rules of paragraph (4) shall apply to such employees.
“(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 subparagraph (A)(ii) from the application of the vesting and benefit requirements under subsections (b) and (c) of section 416.
“(D) 12-month period—For purposes of this paragraph, 12-month periods shall be determined in the same manner as under the last sentence of paragraph (3)(A), except that 12-month periods beginning before January 1, 2021, shall not be taken into account.”
Vesting— Section 410(a) of the Internal Revenue Code of 1986 is amended by adding at the end the following:
changed
“(6) “(7) Part-time employees—For purposes of determining whether an employee who is eligible to participate in a qualified cash or deferred arrangement or a salary reduction agreement under a plan solely by reason of paragraph (6)(A)(ii) has a nonforfeitable right to employer contributions—
“(A) except as provided in subparagraph (B), each 12-month period for which the employee has at least 500 hours of service shall be treated as a year of service,
“(B) 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, and
“(C) 12-month periods occurring before the 24-month period described in paragraph (6)(A)(ii) shall not be treated as years of service.”