H.R. 7310 — what changed
Protecting America’s Retirement Security Act of 2022
From Introduced in House to Reported in House. 3 sections amended between Introduced in House and Reported in House.
Section 1 Short title; table of contents
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Short title— This Act may be cited as the “Protecting America’s Retirement Security Act”.Act of 2022”.
Table of contents— The table of contents for this Act is as follows:
Sec. 2 Defined contribution plan fee disclosure improvements
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Not later than 2 years after the date of enactment of this Act, the Secretary of Labor shall review section 2550.404a–5 2550.404a-5 of title 29, Code of Federal Regulations, and explore how the content and design of the covered disclosures may be improved to enhance participants’ understanding of fees and expenses as well as the cumulative effect of fees and expenses on retirement savings over time. As part of such review, the Secretary shall conduct outreach to stakeholders, including those representing plan sponsors and retirement plan participants.
Sec. 7 Refund to Rainy Day Savings Program
Establishment—
In general— Not later than December 31, 2024, the Secretary of the Treasury or the Secretary’s delegate (referred to in this subsection as the “Secretary”) shall establish and implement a program (referred to in this subsection as the “Refund to Rainy Day Savings Program”) to allow participating taxpayers, pursuant to the requirements established under this section, to defer payment on 20 percent of the amount which would otherwise be refunded to such taxpayer as an overpayment (as described in section 6401 of the Internal Revenue Code of 1986).
Period of deferral— Except as provided under paragraph (3)(E), a participating taxpayer may elect to defer payment of the amount described in paragraph (1) and have such amount deposited in the Rainy Day Fund (as described in paragraph (3)).
Rainy day fund—
In general— The Secretary shall establish in the Treasury a fund, in such manner as the Secretary determines to be appropriate, to be known as the “Rainy Day Fund”, consisting of any amounts described in paragraph (1) on which payment has been deferred by participating taxpayers.
Investment— Any amounts deposited in the Rainy Day Fund shall be invested by the Secretary, in United States Treasury securities issued under chapter 31 of title 31, United States Code, that are suitable for the needs of the Rainy Day Fund.
Disbursements from fund—
In general— On the date that is 180 days after the date of deposit in the Rainy Day Fund of an amount deferred by such taxpayer under paragraph (1), the amounts in the Rainy Day Fund shall be made available to the Secretary to distribute to such taxpayer in an amount equal to such amount plus any interest accrued on such amount (as determined under subparagraph (D)).
Distributed to taxpayers— The amounts described in clause (i) shall be distributed to the account identified by the participating taxpayer under paragraph (4)(B).
Interest accrued— The amount of interest accrued on the amount deferred by a participating taxpayer under subsection (a) shall be determined by the Secretary based upon the return on the investment of such amounts under subparagraph (B).
Early withdrawal—
In general— As soon as possible after receipt by the Secretary of the individual income tax return of the participating taxpayer and October 15 of the applicable year, such taxpayer may elect to terminate the deferral of the amount described under paragraph (1) and receive a distribution from the Rainy Day Fund equal to such amount and any interest which has accrued on such amount up to that date.
Complete withdrawal— A participating taxpayer making an election under clause (i) must terminate deferral of the full amount described under paragraph (1), and such amount shall be distributed to the bank account identified by the participating taxpayer under paragraph (4)(B).
Participating taxpayer— For purposes of this section, the term “participating taxpayer” means a taxpayer who—
prior to the due date for filing the return of tax for such taxable year, elects to participate in the Refund to Rainy Day Savings Program, in accordance with regulations to be issued by the Secretary; and
provides the Secretary with an account and routing number or any other financial information deemed necessary by the Secretary for purposes of subparagraphs (C)(ii) and (E)(ii) of paragraph (3).
Forms— The Secretary shall ensure that the election to defer payment of the amount described in paragraph (1) may be claimed on appropriate tax forms.
Implementation—
Educational materials and outreach— The Secretary shall—
design educational materials for taxpayers regarding financial savings and the Refund to Rainy Day Savings Program,
publicly disseminate and distribute such materials during the first calendar quarter of each calendar year and following disbursement of amounts described in paragraph (3)(C), and
engage in outreach regarding the Refund to Rainy Day Savings Program to the Volunteer Income Tax Assistance program and paid tax preparers.
Information for participating taxpayers— The Secretary shall ensure that a participating taxpayer is able to electronically verify the status of the amount deferred by such taxpayer under paragraph (1), including any interest accrued on such amount and the status of any distribution.
Federally funded benefits— Any amounts described in paragraph (1) that are distributed to a participating taxpayer, including any interest accrued on such amount, shall be treated in the same manner as any refund made to such taxpayer under section 32 of the Internal Revenue Code of 1986 for purposes of determining the eligibility of such taxpayer for benefits or assistance, or the amount or extent of benefits or assistance, under any Federal program or under any State or local program financed in whole or in part with Federal funds.
Assets for independence innovation demonstration projects—
Reauthorization— The Assets for Independence Act (42 U.S.C. 604 note) is amended—
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in section 416, by inserting “, and, subject to section 417, $25,000,000 for each of fiscal years 2024, 2025, 2026, 2027, and 2028, to remain available until expended.”; expended”at the end before the period; and
by adding at the end the following new section:
“417. Reservation of funds
“(a) In general—Subject to subsections (b) and (c), from the funds appropriated for each of fiscal years 2024, 2025, 2026, 2027, and 2028 under section 416, the Secretary shall reserve—
“(1) $3,000,000 for general research and evaluation; and
“(2) any amounts remaining after application of paragraph (1) to fund Assets for Independence innovation projects under section 418.
“(b) Pilot program funding—From the amounts reserved under subsection (a) for each of fiscal years 2024, 2025, and 2026, the Secretary shall make available for operating the pilot program established under section 7(c) of the Protecting America’s Retirement Security Act of 2022—
“(1) 50 percent of the amount reserved for the relevant fiscal year under paragraph (1) of subsection (a) (after any adjustment under subsection (c)); and
“(2) 25 percent of the amount reserved for the relevant fiscal year under paragraph (2) of subsection (a) (after any adjustment under subsection (c)).
“(c) Proportional adjustment—In any of fiscal years 2024, 2025, 2026, 2027, and 2028, if the amount appropriated for such fiscal year is greater or less than the amount authorized for such fiscal year under section 416, the amounts reserved under subsection (a) shall be increased or decreased for such fiscal year so that each such amount bears the same proportion to the amount appropriated as each of the amounts reserved under such subsection bears to the amount authorized.”
Establishment of innovation program— The Assets for Independence Act (42 U.S.C. 604 note), as amended by paragraph (1), is further amended by adding at the end the following new section:
“418. Assets for Independence innovation projects
“(a) In general—The Secretary is authorized to make grants to qualified entities to conduct Assets for Independence innovation projects under this section.
“(b) Definitions—For purposes of this section:
“(1) Assets for Independence innovation project—The term “Assets for Independence innovation project” means a demonstration project carried out by a qualified entity under this section.
“(2) Innovation development account—The term “innovation development account” means an account that is established in a federally insured financial institution or a State insured financial institution and meets such other requirements as are established by the Secretary.
“(c) Application
“(1) Criteria and preferences
“(A) In general—Subject to subparagraph (B), in considering an application to conduct an Assets for Independence innovation project, the Secretary shall apply subsections (c) and (d) of section 405 to the application in the same manner that such subsections apply to an application to conduct a demonstration project under section 405.
“(B) Modification—For purposes of this paragraph, paragraph (1) of section 405(c) shall be applied without regard to the phrase “through activities requiring one or more qualified expenses”.
“(2) Approval of Assets for Independence innovation projects—Not later than 12 months after the date of the enactment of this section, the Secretary shall, on a competitive basis, approve such applications to conduct Assets for Independence innovation projects as the Secretary considers to be appropriate, taking into account the considerations required by paragraph (1). The Secretary shall ensure, to the maximum extent practicable, that the applications that are approved involve a range of communities (spread out both geographically and in rural and urban areas) and diverse populations.
“(d) Project duration and grant amount
“(1) Duration—The Secretary shall award grants under this section for a period not to exceed 5 project years.
“(2) Grant amount—For each project year of an Assets for Independence innovation project approved under this section, the Secretary may make a grant to the qualified entity authorized to conduct the project. In making such a grant, the Secretary shall make the grant on the first day of the project year in an amount not to exceed the lesser of—
“(A) the aggregate amount of funds committed as matching contributions from non-Federal public or private sector sources; or
“(B) $1,000,000.
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“(e) Eligibility and selection of individuals To to participate in an Assets for Independence innovation project
“(1) Eligibility criteria—Subject to the approval of the Secretary, each qualified entity conducting an Assets for Independence innovation project shall establish eligibility requirements for participants in the project. Such requirements shall—
“(A) be more expansive than the requirements established under section 408; and
“(B) ensure that eligibility is limited to low-income individuals.
“(2) Selection of individuals to participate—Each qualified entity conducting an Assets for Independence innovation project shall select, from among the individuals that meet the eligibility requirements established by the entity under paragraph (1), the individuals—
“(A) that the qualified entity determines to be most appropriate to participate; and
“(B) to whom the qualified entity will make disbursements or deposits in accordance with subsection (f).
“(f) Disbursements by qualified entities
“(1) In general—Each qualified entity conducting an Assets for Independence innovation project shall, in a manner consistent with the program requirements established by such entity, disburse to a third-party or deposit into the innovation development account of each individual participating in the project from the funds described in subsection (d)(2), a matching contribution of not less than $0.50 and not more than $8 for every $1 deposited in the account by a project participant, except that the rate of matching shall be equal for all individuals participating in the project conducted by such qualified entity.
“(2) Limitation on disbursements for an individual—Not more than $5,000 from a grant made under subsection (d)(1) shall be provided to any one individual over the course of the Assets for Independence innovation project.
“(3) Limitation on disbursements for a household—Not more than $10,000 from a grant made under subsection (d)(1) shall be provided to any one household over the course of the Assets for Independence innovation project.
“(4) Adjustment for inflation
“(A) In general—For each calendar year after 2023, the dollar amounts in paragraphs (2) and (3) shall be increased by an amount equal to the product of—
“(i) such dollar amount, and
“(ii) the cost-of-living adjustment determined under section 1(f)(3) of the Internal Revenue Code of 1986 for the calendar year, determined by substituting “2022” for “2016” in subparagraph (A)(ii) thereof.
“(B) Rounding—If any increase determined under subparagraph (A) is not a multiple of $50, such increase shall be rounded up to the next lowest multiple of $50.”
Conforming amendments— The Assets for Independence Act (42 U.S.C. 604 note), as amended by paragraphs (1) and (2), is further amended—
in section 404(2), by inserting “or section 418” before the period;
in section 406—
in subsection (a), by striking “to conduct a demonstration project under this title” and inserting “under section 405”; and
in subsection (b), by striking “conducted under this title” and inserting “approved under section 405”;
in section 407—
in subsection (c)—
in paragraph (1)—
in subparagraph (A), by inserting “or, in the case of a participant in a project conducted under section 418, other permitted expenses” after “qualified expenses”; and
in subparagraph (B), by inserting “or subsection (f) of section 418” after “section 410”; and
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in paragraph (3), by inserting “or section 418(d)(1)”; 418(d)(1)”after “ section 406(b)”; and
in subsection (d)(2)(A), by inserting “or section 418(d)(1)” after “section 406(b)”;
in section 408, by striking “conducted under this title” each place it appears and inserting “approved under section 405”;
in section 409, by striking “conducted under this title” and inserting “approved under section 405”;
in section 410, by striking “under this title” and inserting “conducting a demonstration project approved under section 405”;
in section 413(a), by inserting “or section 418(c)” after “under section 405”; and
in section 415, by inserting “or innovation development account” after “individual development account”.
Matched refund to rainy day savings pilot program—
In general— Not later than 6 months after the date of the enactment of this Act and using the funds made available pursuant to section 417(b) of the Assets for Independence Act, the Secretary of Health and Human Services, acting through the Director of Community Services (in this section referred to as “the Secretary”), shall establish under this subsection a matched savings account pilot program to encourage saving by eligible individuals. Under the pilot program, a qualified entity may apply to the Secretary for a grant to conduct a pilot project described in paragraph (2) (in this section referred to as a “pilot project”). The pilot program shall operate for a period of 3 years.
Pilot project described—
In general— A pilot project is a project in which a qualified entity establishes a matched savings program that meets the requirements of subparagraph (B) for eligible individuals who are selected by the entity to participate in the program.
Requirements—
Deposits into direct deposit accounts—
In general— A matched savings program established as part of a pilot project shall match amounts saved by each eligible individual participating in the pilot project—
with the amount matched to be equal to or less than the amount of any payment deferred by such individual under the Refund to Rainy Day Savings Program established in subsection (a)(1); and
with the rate of matching to be equal for all eligible individuals participating in the program.
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Timing— Any amount described in subclause (I) shall not be distributed to an eligible individual until the amounts described in subparagraph subparagraphs (C)(ii) or (E)(ii) of subsection (a)(1) have been distributed to the bank account identified by such individual.
Evaluation of program by independent research organization—
In general— From amounts made available under section 417(b)(2) of the Assets for Independence Act, as added by subsection (b)(1)(B), the Secretary shall enter into a contract with an independent research organization for purposes of evaluating pilot projects conducted under this section.
Coordination— Each qualified entity that establishes a matched savings program as part of a pilot project shall collaborate with the independent research organization described in subclause (I) to evaluate the outcomes and impact of the project.
Impact— The evaluation described in subclause (I) shall include an examination of the demographic characteristics of the individuals participating in the pilot project, such as gender, race, age, geographic location, and family makeup, and how the impacts of the project vary among different demographic groups and the effects of the pilot program on retirement savings for eligible individuals.
Program features— The program features to be evaluated through the pilot projects conducted under this section may include—
different levels of matching contributions by qualified entities;
lock-out periods during which an eligible individual may not make withdrawals from their account; and
educational materials intended to promote savings.
Safeguarding privacy— Any contract entered into under this clause shall require the selected independent research organization to take all necessary and proper precautions to protect eligible individuals’ privacy and personally identifiable information when conducting the evaluation.
Duration— A pilot project shall be for a duration of not more than 3 years.
Federally funded benefits— Any amounts described in subparagraph (B)(i) which are distributed to an eligible individual shall be treated in the same manner as any refund made to such taxpayer under section 32 of the Internal Revenue Code of 1986 for purposes of determining the eligibility of such taxpayer for benefits or assistance, or the amount or extent of benefits or assistance, under any Federal program or under any State or local program financed in whole or in part with Federal funds.
Strategic communications plan— The Secretary shall devise a strategic communications plan to ensure a successful pilot program.
Annual report to congress— The Secretary shall submit an annual report to Congress on the progress and outcomes of the pilot program established under this section.
Definitions— In this subsection:
Eligible individual— The term “eligible individual” means an individual who—
has deferred payment of the amount described in subsection (a)(1) under the Refund to Rainy Day Savings Program established in such subsection, and
meets the eligibility requirements under section 408 of the Assets for Independence Act, except that subsection (a)(2) of such section shall not apply.
Qualified entity—
In general— The term “qualified entity” means—
one or more not-for-profit organizations described in section 501(c)(3) of the Internal Revenue Code of 1986 and exempt from taxation under section 501(a) of such Code;
a State or local government agency, or a tribal government, submitting an application to conduct a pilot project jointly with an organization described in subclause (I);
a site that offers free tax help to individuals who qualify through the Internal Revenue Service’s Voluntary Income Tax Assistance or Tax Counseling for the Elderly programs; or
an entity that—
is—
a credit union designated as a low-income credit union by the National Credit Union Administration; or
an organization designated as a community development financial institution by the Secretary of the Treasury (or the Community Development Financial Institutions Fund); and
can demonstrate a collaborative relationship with a local community-based organization whose activities are designed to address poverty in the community and the needs of community members for economic independence and stability.
Rule of construction— Nothing in this paragraph shall be construed as preventing an organization described in clause (i)(I) from collaborating with a financial institution or for-profit community development corporation to carry out the purposes of this section.