Division T — Secure 2.0 Act of 2022

“SEC. 414A. REQUIREMENTS RELATED TO AUTOMATIC ENROLLMENT.

“(a) In General.—Except as otherwise provided in this section—

“(1) an arrangement shall not be treated as a qualified cash or deferred arrangement described in section 401(k) unless such arrangement meets the automatic enrollment requirements of subsection (b), and

“(2) an annuity contract otherwise described in section 403(b) which is purchased under a salary reduction agreement shall not be treated as described in such section unless such agreement meets the automatic enrollment requirements of subsection (b).

“(b) Automatic Enrollment Requirements.—

“(1) In general.—An arrangement or agreement meets the requirements of this subsection if such arrangement or agreement is an eligible automatic contribution arrangement (as defined in section 414(w)(3)) which meets the requirements of paragraphs (2) through (4).

“(2) Allowance of permissible withdrawals.—An eligible automatic contribution arrangement meets the requirements of this paragraph if such arrangement allows employees to make permissible withdrawals (as defined in section 414(w)(2)).

“(3) Minimum contribution percentage.—

“(A) In general.—An eligible automatic contribution arrangement meets the requirements of this paragraph if—

“(i) the uniform percentage of compensation contributed by the participant under such arrangement during the first year of participation is not less than 3 percent and not more than 10 percent (unless the participant specifically elects not to have such contributions made or to have such contributions made at a different percentage), and

“(ii) effective for the first day of each plan year starting after each completed year of participation under such arrangement such uniform percentage is increased by 1 percentage point (to at least 10 percent, but not more than 15 percent) unless the participant specifically elects not to have such contributions made or to have such contributions made at a different percentage.

“(B) Initial reduced ceiling for certain plans.—In the case of any eligible automatic contribution arrangement (other than an arrangement that meets the requirements of paragraph (12) or (13) of section 401(k)), for plan years ending before January 1, 2025, subparagraph (A)(ii) shall be applied by substituting ‘10 percent’ for ‘15 percent’.

“(4) Investment requirements.—An eligible automatic contribution arrangement meets the requirements of this paragraph if amounts contributed pursuant to such arrangement, and for which no investment is elected by the participant, are invested in accordance with the requirements of section 2550.404c-5 of title 29, Code of Federal Regulations (or any successor regulations).

“(c) Exceptions.—For purposes of this section—

“(1) Simple plans.—Subsection (a) shall not apply to any simple plan (within the meaning of section 401(k)(11)).

“(2) Exception for plans or arrangements established before enactment of section.—

“(A) In general.—Subsection (a) shall not apply to—

“(i) any qualified cash or deferred arrangement established before the date of the enactment of this section, or

“(ii) any annuity contract purchased under a plan established before the date of the enactment of this section.

“(B) Post-enactment adoption of multiple employer plan.—Subparagraph (A) shall not apply in the case of an employer adopting after such date of enactment a plan maintained by more than one employer, and subsection (a) shall apply with respect to such employer as if such plan were a single plan.

“(3) Exception for governmental and church plans.—Subsection (a) shall not apply to any governmental plan (within the meaning of section 414(d)) or any church plan (within the meaning of section 414(e)).

“(4) Exception for new and small businesses.—

“(A) New business.—Subsection (a) shall not apply to any qualified cash or deferred arrangement, or any annuity contract purchased under a plan, while the employer maintaining such plan (and any predecessor employer) has been in existence for less than 3 years.

“(B) Small businesses.—Subsection (a) shall not apply to any qualified cash or deferred arrangement, or any annuity contract purchased under a plan, earlier than the date that is 1 year after the close of the first taxable year with respect to which the employer maintaining the plan normally employed more than 10 employees.

“(C) Treatment of multiple employer plans.—In the case of a plan maintained by more than 1 employer, subparagraphs (A) and (B) shall be applied separately with respect to each such employer, and all such employers to which subsection (a) applies (after the application of this paragraph) shall be treated as maintaining a separate plan for purposes of this section.”

“Sec. 414A. Requirements related to automatic enrollment.”.

“(4) Increased credit for certain small employers.—In the case of an employer which would be an eligible employer under subsection (c) if section 408(p)(2)(C)(i) was applied by substituting ‘50 employees’ for ‘100 employees’, subsection (a) shall be applied by substituting ‘100 percent’ for ‘50 percent’.”

“(f) Additional Credit for Employer Contributions by Certain Eligible Employers.—

“(1) In general.—In the case of an eligible employer, the credit allowed for the taxable year under subsection (a) (determined without regard to this subsection) shall be increased by an amount equal to the applicable percentage of employer contributions (other than any elective deferrals (as defined in section 402(g)(3)) by the employer to an eligible employer plan (other than a defined benefit plan (as defined in section 414(j))).

“(2) Limitations.—

“(A) Dollar limitation.—The amount determined under paragraph (1) (before the application of subparagraph (B)) with respect to any employee of the employer shall not exceed $1,000.

“(B) Credit phase-in.—In the case of any eligible employer which had for the preceding taxable year more than 50 employees, the amount determined under paragraph (1) (without regard to this subparagraph) shall be reduced by an amount equal to the product of—

“(i) the amount otherwise so determined under paragraph (1), multiplied by

“(ii) a percentage equal to 2 percentage points for each employee of the employer for the preceding taxable year in excess of 50 employees.

“(C) Wage limitation.—

“(i) In general.—No contributions with respect to any employee who receives wages from the employer for the taxable year in excess of $100,000 may be taken into account for such taxable year under subparagraph (A).

“(ii) Wages.—For purposes of the preceding sentence, the term ‘wages’ has the meaning given such term by section 3121(a).

“(iii) Inflation adjustment.—In the case of any taxable year beginning in a calendar year after 2023, the $100,000 amount under clause (i) shall be increased by an amount equal to—

“(I) such dollar amount, multiplied by

“(II) the cost-of-living adjustment determined under section 1(f)(3) for the calendar year in which the taxable year begins, determined by substituting ‘calendar year 2007’ for ‘calendar year 2016’ in subparagraph (A)(ii) thereof.

“(3) Applicable percentage.—For purposes of this section, the applicable percentage for the taxable year during which the eligible employer plan is established with respect to the eligible employer shall be 100 percent, and for taxable years thereafter shall be determined under the following table:“In the case of the following taxable year beginning after the taxable year during which plan is established with respect to the eligible employer:

The applicable percentage shall be:

1st 100%

2nd 75%

3rd 50%

4th 25%

Any taxable year thereafter 0%

“(4) Determination of eligible employer; number of employees.—For purposes of this subsection, whether an employer is an eligible employer and the number of employees of an employer shall be determined under the rules of subsection (c), except that paragraph (2) thereof shall only apply to the taxable year during which the eligible employer plan to which this section applies is established with respect to the eligible employer.”

“(2) Disallowance of deduction.—No deduction shall be allowed—

“(A) for that portion of the qualified startup costs paid or incurred for the taxable year which is equal to so much of the portion of the credit determined under subsection (a) as is properly allocable to such costs, and

“(B) for that portion of the employer contributions by the employer for the taxable year which is equal to so much of the credit increase determined under subsection (f) as is properly allocable to such contributions.”

“SEC. 6433. SAVER’S MATCH.

“(a) In General.—

“(1) Allowance of match.—Any eligible individual who makes qualified retirement savings contributions for the taxable year shall be allowed a matching contribution for such taxable year in an amount equal to the applicable percentage of so much of the qualified retirement savings contributions made by such eligible individual for the taxable year as does not exceed $2,000.

“(2) Payment of match.—

“(A) In general.—Except as provided in subparagraph (B), the matching contribution under this section shall be allowed as a credit which shall be payable by the Secretary as a contribution (as soon as practicable after the eligible individual has filed a tax return making a claim for such matching contribution for the taxable year) to the applicable retirement savings vehicle of the eligible individual.

“(B) Exception.—In the case of an eligible individual who elects the application of this subparagraph and with respect to whom the matching contribution determined under paragraph (1) is greater than zero but less than $100 for the taxable year, subparagraph (A) shall not apply and such matching contribution shall be treated as a credit allowed by subpart C of part IV of subchapter A of chapter 1.

“(b) Applicable Percentage.—For purposes of this section—

“(1) In general.—Except as provided in paragraph (2), the applicable percentage is 50 percent.

“(2) Phaseout.—The percentage under paragraph (1) shall be reduced (but not below zero) by the number of percentage points which bears the same ratio to 50 percentage points as—

“(A) the excess of—

“(i) the taxpayer’s modified adjusted gross income for such taxable year, over

“(ii) the applicable dollar amount, bears to

“(B) the phaseout range.

“(3) Applicable dollar amount; phaseout range.—

“(A) Joint returns and surviving spouses.—Except as provided in subparagraph (B)—

“(i) the applicable dollar amount is $41,000, and

“(ii) the phaseout range is $30,000.

“(B) Other returns.—In the case of—

“(i) a head of a household (as defined in section 2(b)), the applicable dollar amount and the phaseout range shall be ¾ of the amounts applicable under subparagraph (A) (as adjusted under subsection (h)), and

“(ii) any taxpayer who is not filing a joint return, who is not a head of a household (as so defined), and who is not a surviving spouse (as defined in section 2(a)), the applicable dollar amount and the phaseout range shall be ½ of the amounts applicable under subparagraph (A) (as so adjusted).

“(c) Eligible Individual.—For purposes of this section—

“(1) In general.—The term ‘eligible individual’ means any individual if such individual has attained the age of 18 as of the close of the taxable year.

“(2) Dependents and full-time students not eligible.—The term ‘eligible individual’ shall not include—

“(A) any individual with respect to whom a deduction under section 151 is allowed to another taxpayer for a taxable year beginning in the calendar year in which such individual’s taxable year begins, and

“(B) any individual who is a student (as defined in section 152(f)(2)).

“(3) Nonresident aliens not eligible.—The term ‘eligible individual’ shall not include any individual who is a nonresident alien individual for any portion of the taxable year unless such individual is treated for such taxable year as a resident of the United States for purposes of chapter 1 by reason of an election under subsection (g) or (h) of section 6013.

“(d) Qualified Retirement Savings Contributions.—For purposes of this section—

“(1) In general.—The term ‘qualified retirement savings contributions’ means, with respect to any taxable year, the sum of—

“(A) the amount of the qualified retirement contributions (as defined in section 219(e)) made by the eligible individual,

“(B) the amount of—

“(i) any elective deferrals (as defined in section 402(g)(3)) of such individual, and

“(ii) any elective deferral of compensation by such individual under an eligible deferred compensation plan (as defined in section 457(b)) of an eligible employer described in section 457(e)(1)(A), and

“(C) the amount of voluntary employee contributions by such individual to any qualified retirement plan (as defined in section 4974(c)).

“(2) Reduction for certain distributions.—

“(A) In general.—The qualified retirement savings contributions determined under paragraph (1) for a taxable year shall be reduced (but not below zero) by the aggregate distributions received by the individual during the testing period from any entity of a type to which contributions under paragraph (1) may be made.

“(B) Testing period.—For purposes of subparagraph (A), the testing period, with respect to a taxable year, is the period which includes—

“(i) such taxable year,

“(ii) the 2 preceding taxable years, and

“(iii) the period after such taxable year and before the due date (including extensions) for filing the return of tax for such taxable year.

“(C) Excepted distributions.—There shall not be taken into account under subparagraph (A)—

“(i) any distribution referred to in section 72(p), 401(k)(8), 401(m)(6), 402(g)(2), 404(k), or 408(d)(4),

“(ii) any distribution to which section 408(d)(3) or 408A(d)(3) applies, and

“(iii) any portion of a distribution if such portion is transferred or paid in a rollover contribution (as defined in section 402(c), 403(a)(4), 403(b)(8), 408A(e), or 457(e)(16)) to an account or plan to which qualified retirement savings contributions can be made.

“(D) Treatment of distributions received by spouse of individual.—For purposes of determining distributions received by an individual under subparagraph (A) for any taxable year, any distribution received by the spouse of such individual shall be treated as received by such individual if such individual and spouse file a joint return for such taxable year and for the taxable year during which the spouse receives the distribution.

“(e) Applicable Retirement Savings Vehicle.—

“(1) In general.—The term ‘applicable retirement savings vehicle’ means an account or plan elected by the eligible individual under paragraph (2).

“(2) Election.—Any such election to have contributed the amount determined under subsection (a) shall be to an account or plan which—

“(A) is—

“(i) the portion of a plan which—

“(I) is described in clause (v) of section 402(c)(8)(B), is a qualified cash or deferred arrangement (within the meaning of section 401(k)), or is an annuity contract described in section 403(b) which is purchased under a salary reduction agreement, and

“(II) does not consist of a qualified Roth contribution program (as defined in section 402A(b)), or

“(ii) an individual retirement plan which is not a Roth IRA,

“(B) is for the benefit of the eligible individual,

“(C) accepts contributions made under this section, and

“(D) is designated by such individual (in such form and manner as the Secretary may provide).

“(f) Other Definitions and Special Rules.—

“(1) Modified adjusted gross income.—For purposes of this section, the term ‘modified adjusted gross income’ means adjusted gross income—

“(A) determined without regard to sections 911, 931, and 933, and

“(B) determined without regard to any exclusion or deduction allowed for any qualified retirement savings contribution made during the taxable year.

“(2) Treatment of contributions.—In the case of any contribution under subsection (a)(2)—

“(A) except as otherwise provided in this section or by the Secretary under regulations, such contribution shall be treated as—

“(i) an elective deferral made by the individual, if contributed to an applicable retirement savings vehicle described in subsection (e)(2)(A)(i), or

“(ii) as an individual retirement plan contribution made by such individual, if contributed to such a plan,

“(B) such contribution shall not be taken into account with respect to any applicable limitation under sections 402(g)(1), 403(b), 408(a)(1), 408(b)(2)(B), 408A(c)(2), 414(v)(2), 415(c), or 457(b)(2), and shall be disregarded for purposes of sections 401(a)(4), 401(k)(3), 401(k)(11)(B)(i)(III), and 416, and

“(C) such contribution shall not be treated as an amount that may be paid, made available, or distributable to the participant under section 401(k)(2)(B)(i)(IV), 403(b)(7)(A)(i)(V), or 457(d)(1)(A)(iii).

“(3) Treatment of qualified plans, etc.—A plan or arrangement to which a contribution is made under this section shall not be treated as violating any requirement under section 401, 403, 408, or 457 solely by reason of accepting such contribution.

“(4) Erroneous matching contributions.—

“(A) In general.—If any contribution is erroneously paid under subsection (a)(2), including a payment that is not made to an applicable retirement savings vehicle, the amount of such erroneous payment shall be treated as an underpayment of tax (other than for purposes of part II of subchapter A of chapter 68) for the taxable year in which the Secretary determines the payment is erroneous.

“(B) Distribution of erroneous matching contributions.—In the case of a contribution to which subparagraph (A) applies—

“(i) section 402(a), 403(a)(1), 403(b)(1), 408(d)(1), or 457(a)(1), whichever is applicable, shall not apply to any distribution of such contribution, and section 72(t) shall not apply to the distribution of such contribution or any income attributable thereto, if such distribution is received not later than the day prescribed by law (including extensions of time) for filing the individual’s return for such taxable year, and

“(ii) any plan or arrangement from which such a distribution is made under this subparagraph shall not be treated as violating any requirement under section 401, 403, or 457 solely by reason of making such distribution.

“(5) Exception from reduction or offset.—Any payment made to any individual under this section shall not be—

“(A) subject to reduction or offset pursuant to subsection (c), (d), (e), or (f) of section 6402 or any similar authority permitting offset, or

“(B) reduced or offset by other assessed Federal taxes that would otherwise be subject to levy or collection.

“(6) Saver’s match recovery payments.—

“(A) In general.—In the case of an applicable retirement savings vehicle to which contributions have been made under subsection (a)(2), and from which a specified early distribution has been made during the taxable year, if the aggregate amount of such contributions exceeds the account balance of such savings vehicle at the end of the such taxable year, the tax imposed by chapter 1 shall be increased by an amount equal to such excess (reduced by the amount by which the tax under such chapter was increased under section 72(t)(1) with respect to such distribution).

“(B) Specified early distribution.—For purposes of this paragraph, the term ‘specified early distribution’ means any portion of a distribution—

“(i) which is from such applicable retirement savings vehicle to which a contribution has been made under subsection (a)(2),

“(ii) which is includible in gross income, and

“(iii) to which 72(t)(1) applies.

“(C) Excess may be repaid.—

“(i) In general.—The increase in tax for any taxable year under subparagraph (A) shall be reduced (but not below zero) by so much of such specified early distribution as the individual elects to contribute to an applicable retirement savings vehicle not later than the day prescribed by law (including extensions of time) for filing such individual’s return for such taxable year.

“(ii) Contribution of excess.—Any individual who elects to contribute an amount under clause (i) may make one or more contributions in an aggregate amount not to exceed the amount of the specified early distribution to which the election relates to an applicable retirement savings vehicle and to which a rollover contribution of such distribution could be made under section 402(c), 403(b)(8), 408(d)(3), or 457(e)(16), as the case may be.

“(iii) Limitation on contributions to applicable retirement savings vehicle other than iras.—The aggregate amount of contributions made by an individual under clause (ii) to any applicable savings retirement vehicle which is not an individual retirement plan shall not exceed the aggregate amount of specified early retirement distributions which are made from such savings retirement vehicle to such individual. Clause (ii) shall not apply to contributions to any applicable retirement savings vehicle which is not an individual retirement plan unless the individual is eligible to make contributions (other than those described in clause (ii)) to such retirement savings vehicle.

“(iv) Treatment of repayments of distributions from applicable eligible retirement plans other than iras.—If a contribution is made under clause (ii) with respect to a specified early distribution from an applicable savings retirement vehicle other than an individual retirement plan, then the taxpayer shall, to the extent of the amount of the contribution, be treated as having received such distribution in an eligible rollover distribution (as defined in section 402(c)(4)) and as having transferred the amount to the savings retirement vehicle in a direct trustee to trustee transfer within 60 days of the distribution.

“(v) Treatment of repayments for distributions from iras.—If a contribution is made under clause (ii) with respect to a specified early distribution from an individual retirement plan, then, to the extent of the amount of the contribution, such distribution shall be treated as a distribution described in section 408(d)(3) and as having been transferred to the applicable retirement savings vehicle in a direct trustee to trustee transfer within 60 days of the distribution.

“(D) Rules to account for investment loss.—The Secretary shall prescribe such rules as may be appropriate to reduce any increase in tax otherwise made under subparagraph (A) to properly account for the extent to which any portion of the excess described in such subparagraph is allocable to investment loss in the retirement savings vehicle.

“(g) Provision by Secretary of Information Relating to Contributions.—In the case of an amount elected by an eligible individual to be contributed to an account or plan under subsection (e)(2), the Secretary shall provide general guidance applicable to the custodian of the account or the plan sponsor, as the case may be, detailing the treatment of such contribution under subsection (f)(2) and the reporting requirements with respect to such contribution under section 6058, particularly as such requirements are modified pursuant to section 102(c)(2) of the SECURE 2.0 Act of 2022.

“(h) Inflation Adjustments.—

“(1) In general.—In the case of any taxable year beginning in a calendar year after 2027, the $41,000 amount in subsection (b)(3)(A)(i) shall be increased by an amount equal to—

“(A) such dollar amount, multiplied by

“(B) the cost-of-living adjustment determined under section 1(f)(3) for the calendar year in which the taxable year begins, determined by substituting ‘calendar year 2026’ for ‘calendar year 2016’ in subparagraph (A)(ii) thereof.

“(2) Rounding.—Any increase determined under paragraph (1) shall be rounded to the nearest multiple of $1,000.”

“(ii) designate a named fiduciary (other than an employer in the plan) to be responsible for collecting contributions to the plan and require such fiduciary to implement written contribution collection procedures that are reasonable, diligent, and systematic;”

“(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 satisfies rules similar to the rules 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.”

“(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.”

“(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.”

“(v) Applicable age.—

“(I) In the case of an individual who attains age 72 after December 31, 2022, and age 73 before January 1, 2033, the applicable age is 73.

“(II) In the case of an individual who attains age 74 after December 31, 2032, the applicable age is 75.”

“(iii) Indexing of catch-up limitation.—In the case of any taxable year beginning in a calendar year after 2023, the $1,000 amount under subparagraph (B)(ii) shall be increased by an amount equal to—

“(I) such dollar amount, multiplied by

“(II) the cost-of-living adjustment determined under section 1(f)(3) for the calendar year in which the taxable year begins, determined by substituting ‘calendar year 2022’ for ‘calendar year 2016’ in subparagraph (A)(ii) thereof.

“(E) Adjusted dollar amount.—For purposes of subparagraph (B), the adjusted dollar amount is—

“(i) in the case of clause (i) of subparagraph (B), the greater of—

“(I) $10,000, or

“(II) an amount equal to 150 percent of the dollar amount which would be in effect under such clause for 2024 for eligible participants not described in the parenthetical in such clause, or

“(ii) in the case of clause (ii) of subparagraph (B), the greater of—

“(I) $5,000, or

“(II) an amount equal to equal to 150 percent of the dollar amount which would be in effect under such clause for 2025 for eligible participants not described in the parenthetical in such clause.”

“(iii) subject to the requirements of paragraph (14), any employer contribution made to a defined contribution plan on behalf of an employee on account of a qualified student loan payment.”

“(D) Qualified student loan payment.—The term ‘qualified student loan payment’ means a payment made by an employee in repayment of a qualified education loan (as defined in section 221(d)(1)) incurred by the employee to pay qualified higher education expenses, but only—

“(i) to the extent such payments in the aggregate for the year do not exceed an amount equal to—

“(I) the limitation applicable under section 402(g) for the year (or, if lesser, the employee’s compensation (as defined in section 415(c)(3)) for the year), reduced by

“(II) the elective deferrals made by the employee for such year, and

“(ii) if the employee certifies annually to the employer making the matching contribution under this paragraph that such payment has been made on such loan.

“(13) Matching contributions for qualified student loan payments.—

“(A) In general.—For purposes of paragraph (4)(A)(iii), an employer contribution made to a defined contribution plan on account of a qualified student loan payment shall be treated as a matching contribution for purposes of this title if—

“(i) the plan provides matching contributions on account of elective deferrals at the same rate as contributions on account of qualified student loan payments,

“(ii) the plan provides matching contributions on account of qualified student loan payments only on behalf of employees otherwise eligible to receive matching contributions on account of elective deferrals,

“(iii) under the plan, all employees eligible to receive matching contributions on account of elective deferrals are eligible to receive matching contributions on account of qualified student loan payments, and

“(iv) the plan provides that matching contributions on account of qualified student loan payments vest in the same manner as matching contributions on account of elective deferrals.

“(B) Treatment for purposes of nondiscrimination rules, etc.—

“(i) Nondiscrimination rules.—For purposes of subparagraph (A)(iii), subsection (a)(4), and section 410(b), matching contributions described in paragraph (4)(A)(iii) shall not fail to be treated as available to an employee solely because such employee does not have debt incurred under a qualified education loan (as defined in section 221(d)(1)).

“(ii) Student loan payments not treated as plan contribution.—Except as provided in clause (iii), a qualified student loan payment shall not be treated as a contribution to a plan under this title.

“(iii) Matching contribution rules.—Solely for purposes of meeting the requirements of paragraph (11)(B), (12), or (13) of this subsection, or paragraph (11)(B)(i)(II), (12)(B), (13)(D), or (16)(D) of subsection (k), a plan may treat a qualified student loan payment as an elective deferral or an elective contribution, whichever is applicable.

“(iv) Actual deferral percentage testing.—In determining whether a plan meets the requirements of subsection (k)(3)(A)(ii) for a plan year, the plan may apply the requirements of such subsection separately with respect to all employees who receive matching contributions described in paragraph (4)(A)(iii) for the plan year.

“(C) Employer may rely on employee certification.—The employer may rely on an employee certification of payment under paragraph (4)(D)(ii).”

“(F) Matching contributions for qualified student loan payments.—

“(i) In general.—Subject to the rules of clause (iii), an arrangement shall not fail to be treated as meeting the requirements of subparagraph (A)(iii) solely because under the arrangement, solely for purposes of such subparagraph, qualified student loan payments are treated as amounts elected by the employee under subparagraph (A)(i)(I) to the extent such payments do not exceed—

“(I) the applicable dollar amount under subparagraph (E) (after application of section 414(v)) for the year (or, if lesser, the employee’s compensation (as defined in section 415(c)(3)) for the year), reduced by

“(II) any other amounts elected by the employee under subparagraph (A)(i)(I) for the year.

“(ii) Qualified student loan payment.—For purposes of this subparagraph—

“(I) In general.—The term ‘qualified student loan payment’ means a payment made by an employee in repayment of a qualified education loan (as defined in section 221(d)(1)) incurred by the employee to pay qualified higher education expenses, but only if the employee certifies to the employer making the matching contribution that such payment has been made on such a loan.

“(II) Qualified higher education expenses.—The term ‘qualified higher education expenses’ has the same meaning as when used in section 401(m)(4)(D).

“(iii) Applicable rules.—Clause (i) shall apply to an arrangement only if, under the arrangement—

“(I) matching contributions on account of qualified student loan payments are provided only on behalf of employees otherwise eligible to elect contributions under subparagraph (A)(i)(I), and

“(II) all employees otherwise eligible to participate in the arrangement are eligible to receive matching contributions on account of qualified student loan payments.”

“SEC. 45AA. MILITARY SPOUSE RETIREMENT PLAN ELIGIBILITY CREDIT FOR SMALL EMPLOYERS.

“(a) In General.—For purposes of section 38, in the case of any eligible small employer, the military spouse retirement plan eligibility credit determined under this section for any taxable year is an amount equal to the sum of—

“(1) $200 with respect to each military spouse who is an employee of such employer and who participates in an eligible defined contribution plan of such employer at any time during such taxable year, plus

“(2) so much of the contributions made by such employer (other than an elective deferral (as defined in section 402(g)(3)) to all such plans with respect to such employee during such taxable year as do not exceed $300.

“(b) Limitation.—An individual shall only be taken into account as a military spouse under subsection (a) for the taxable year which includes the date on which such individual began participating in the eligible defined contribution plan of the employer and the 2 succeeding taxable years.

“(c) Eligible Small Employer.—For purposes of this section, the term ‘eligible small employer’ means an eligible employer (as defined in section 408(p)(2)(C)(i)(I).

“(d) Military Spouse.—For purposes of this section—

“(1) In general.—The term ‘military spouse’ means, with respect to any employer, any individual who is married (within the meaning of section 7703 as of the first date that the employee is employed by the employer) to an individual who is a member of the uniformed services (as defined section 101(a)(5) of title 10, United States Code) serving on active duty. For purposes of this section, an employer may rely on an employee’s certification that such employee’s spouse is a member of the uniformed services if such certification provides the name, rank, and service branch of such spouse.

“(2) Exclusion of highly compensated employees.—With respect to any employer, the term ‘military spouse’ shall not include any individual if such individual is a highly compensated employee of such employer (within the meaning of section 414(q)).

“(e) Eligible Defined Contribution Plan.—For purposes of this section, the term ‘eligible defined contribution plan’ means, with respect to any eligible small employer, any defined contribution plan (as defined in section 414(i)) of such employer if, under the terms of such plan—

“(1) military spouses employed by such employer are eligible to participate in such plan not later than the date which is 2 months after the date on which such individual begins employment with such employer, and

“(2) military spouses who are eligible to participate in such plan—

“(A) are immediately eligible to receive an amount of employer contributions under such plan which is not less the amount of such contributions that a similarly situated participant who is not a military spouse would be eligible to receive under such plan after 2 years of service, and

“(B) immediately have a nonforfeitable right to the employee’s accrued benefit derived from employer contributions under such plan.

“(f) Aggregation Rule.—All persons treated as a single employer under subsection (b), (c), (m), or (o) of section 414 shall be treated as one employer for purposes of this section.”

“(41) in the case of an eligible small employer (as defined in section 45AA(c)), the military spouse retirement plan eligibility credit determined under section 45AA(a).”

“(F) section 45AA (military spouse retirement plan eligibility credit),”

“Sec. 45AA. Military spouse retirement plan eligibility credit for small employers.”.

“(24) the provision of a de minimis financial incentive described in section 401(k)(4)(A).”

“(21) The provision of a de minimis financial incentive described in section 401(k)(4)(A) or section 403(b)(12)(A) of the Internal Revenue Code of 1986.”

“(h) Application of Section to Sale of Stock in S Corporation.—In the case of the sale of qualified securities of an S corporation, the election under subsection (a) may be made with respect to not more than 10 percent of the amount realized on such sale for purposes of determining the amount of gain not recognized and the extent to which (if at all) the amount realized on such sale exceeds the cost of qualified replacement property. The portion of adjusted basis that is properly allocable to the portion of the amount realized with respect to which the election is made under this subsection shall be taken into account for purposes of the preceding sentence.”

“(I) Distributions for certain emergency expenses.—

“(i) In general.—Any emergency personal expense distribution.

“(ii) Annual limitation.—Not more than 1 distribution per calendar year may be treated as an emergency personal expense distribution by any individual.

“(iii) Dollar limitation.—The amount which may be treated as an emergency personal expense distribution by any individual in any calendar year shall not exceed the lesser of $1,000 or an amount equal to the excess of—

“(I) the individual’s total nonforfeitable accrued benefit under the plan (the individual’s total interest in the plan in the case of an individual retirement plan), determined as of the date of each such distribution, over

“(II) $1,000.

“(iv) Emergency personal expense distribution.—For purposes of this subparagraph, the term ‘emergency personal expense distribution’ means any distribution from an applicable eligible retirement plan (as defined in subparagraph (H)(vi)(I)) to an individual for purposes of meeting unforeseeable or immediate financial needs relating to necessary personal or family emergency expenses. The administrator of an applicable eligible retirement plan may rely on an employee’s written certification that the employee satisfies the conditions of the preceding sentence in determining whether any distribution is an emergency personal expense distribution. The Secretary may provide by regulations for exceptions to the rule of the preceding sentence in cases where the plan administrator has actual knowledge to the contrary of the employee’s certification, and for procedures for addressing cases of employee misrepresentation.

“(v) Treatment of plan distributions.—If a distribution to an individual would (without regard to clause (ii) or (iii)) be an emergency personal expense distribution, a plan shall not be treated as failing to meet any requirement of this title merely because the plan treats the distribution as an emergency personal expense distribution, unless the number or the aggregate amount of such distributions from all plans maintained by the employer (and any member of any controlled group which includes the employer, determined as provided in subparagraph (H)(iv)(II)) to such individual exceeds the limitation determined under clause (ii) or (iii).

“(vi) Amount distributed may be repaid.—Rules similar to the rules of subparagraph (H)(v) shall apply with respect to an individual who receives a distribution to which clause (i) applies.

“(vii) Limitation on subsequent distributions.—If a distribution is treated as an emergency personal expense distribution in any calendar year with respect to a plan of the employee, no amount may be treated as such a distribution during the immediately following 3 calendar years with respect to such plan unless—

“(I) such previous distribution is fully repaid to such plan pursuant to clause (vi), or

“(II) the aggregate of the elective deferrals and employee contributions to the plan (the total amounts contributed to the plan in the case of an individual retirement plan) subsequent to such previous distribution is at least equal to the amount of such previous distribution which has not been so repaid.

“(viii) Special rules.—Rules similar to the rules of subclauses (II) and (IV) of subparagraph (H)(vi) shall apply to any emergency personal expense distribution.”

“(iii) Special rule for electing larger employers.—In the case of an employer which had more than 25 employees who received at least $5,000 of compensation from the employer for the preceding year, and which makes the election under subparagraph (E)(i)(II) for any year, clause (i) shall be applied for such year by substituting ‘3 percent’ for ‘2 percent’.”

“(H) 2-year grace period.—An eligible employer which had not more than 25 employees who received at least $5,000 of compensation from the employer for 1 or more years, and which has more than 25 such employees for any subsequent year, shall be treated for purposes of subparagraph (E)(i) as having 25 such employees for the 2 years following the last year the employer had not more than 25 such employees, and not as having made the election under subparagraph (E)(i)(II) for such 2 years. Rules similar to the second sentence of subparagraph (C)(i)(II) shall apply for purposes of this subparagraph.”

“(iv) Employer has not had another plan within 3 years.—An eligible employer is described in this clause only if, during the 3-taxable-year period immediately preceding the 1st year the employer maintains the qualified salary reduction arrangement under this paragraph, neither the employer nor any member of any controlled group including the employer (or any predecessor of either) established or maintained any plan described in clause (i), (ii), or (iv) of section 219(g)(5)(A) with respect to which contributions were made, or benefits were accrued, for substantially the same employees as are eligible to participate in such qualified salary reduction arrangement.”

“(12) Special rule for certain employees of rural electric cooperatives.—

“(A) In general.—Subparagraph (B) of paragraph (1) shall not apply to a participant in an eligible rural electric cooperative plan, except in the case of a participant who was a highly compensated employee (as defined in section 414(q)) of an employer maintaining such plan for the earlier of—

“(i) the plan year in which the participant terminated employment with such employer, or

“(ii) the plan year in which distributions commence under the plan with respect to the participant, or for any of the 5 plan years immediately preceding such earlier plan year.

“(B) Eligible rural electric cooperative plan.—For purposes of this paragraph—

“(i) In general.—The term ‘eligible rural electric cooperative plan’ means a plan maintained by more than 1 employer, with respect to which at least 85 percent of the employers maintaining the plan are rural cooperatives described in clause (i) or (ii) of section 401(k)(7)(B) or are a national association of such a rural cooperative.

“(ii) Election.—An employer maintaining an eligible rural cooperative plan may elect not to have subparagraph (A) apply to its employees.

“(C) Regulations.—The Secretary shall prescribe such regulations and other guidance as are necessary to limit the application of subparagraph (A) such that it does not result in increased benefits for highly compensated employees.”

“(25) the receipt of fees and compensation by the automatic portability provider for services provided in connection with an automatic portability transaction.”

“(12) Rules relating to automatic portability transactions.—

“(A) In general.—For purposes of subsection (d)(25)—

“(i) Automatic portability transaction.—An automatic portability transaction is a transfer of assets made—

“(I) from an individual retirement plan which is established on behalf of an individual and to which amounts were transferred under section 401(a)(31)(B)(i),

“(II) to an employer-sponsored retirement plan described in clause (iii), (iv), (v), or (vi) of section 402(c)(8)(B) (other than a defined benefit plan) in which such individual is an active participant, and

“(III) after such individual has been given advance notice of the transfer and has not affirmatively opted out of such transfer.

“(ii) Automatic portability provider.—An automatic portability provider is a person, other than an individual, who executes transfers described in clause (i).

“(B) Conditions for automatic portability transactions.—Subsection (d)(25) shall not apply to an automatic portability transaction unless the following requirements are satisfied:

“(i) Acknowledgment of fiduciary status.—An automatic portability provider shall acknowledge in writing, at such time and format as specified by the Secretary of Labor, that the provider is a fiduciary with respect to the individual retirement plan described in subparagraph (A)(i)(I).

“(ii) Fees.—The fees and compensation received, directly or indirectly, by the automatic portability provider for services provided in connection with the automatic portability transaction (including any increase in such fees or compensation and any fees or compensation in connection with, but received before, the transaction)—

“(I) shall not exceed reasonable compensation, and

“(II) shall be fully disclosed to and approved in writing in advance of the transaction by a plan fiduciary of the plan described in subparagraph (A)(i)(II) which is independent of the automatic portability provider.

“(iii) Data usage.—The automatic portability provider shall not market or sell data relating to the individual retirement plan described in subparagraph (A)(i)(I) or to the participants of the plan described in subparagraph (A)(i)(II).

“(iv) Open participation.—The automatic portability provider shall offer automatic portability transactions on the same terms to any plan described in subparagraph (A)(i)(II).

“(v) Pre-transaction notice.—At least 60 days in advance of an automatic portability transaction, the automatic portability provider shall provide notice to the individual on whose behalf the individual retirement plan described in subparagraph (A)(i)(I) is established which includes—

“(I) a description of the automatic portability transaction and a complete and accurate statement of all fees which will be charged and all compensation which will be received in connection with the transaction,

“(II) a clear and prominent description of the individual’s right to affirmatively elect not to participate in the transaction as well as the other available distribution options, the deadline by which the individual must make an election, the procedures for such an election, and a telephone number for the automatic portability provider that the individual may call to make such election,

“(III) a description of the individual’s right to designate a beneficiary and the procedures to do so, and

“(IV) such other disclosures as the Secretary of Labor may require by regulation.

“(vi) Post-transaction notice.—Not later than 3 business days after an automatic portability transaction, the automatic portability provider shall provide notice to the individual on whose behalf the individual retirement plan described in subparagraph (A)(i)(I) is established of—

“(I) the actions taken by the automatic portability provider with respect to the individual’s account,

“(II) all relevant information regarding the location and amount of any transferred assets,

“(III) a statement of fees charged against the account by the automatic portability provider or its affiliates in connection with the transfer,

“(IV) a telephone number at which the individual can contact the automatic portability provider, and

“(V) such other disclosures as the Secretary of Labor may require by regulation.

“(vii) Notice requirements.—The notices required under clauses (v) and (vi) shall be written in a manner calculated to be understood by the average person and shall not include inaccurate or misleading statements.

“(viii) Frequency of searches.—The automatic portability provider shall query on at least a monthly basis whether any individual with an individual retirement plan described in subparagraph (A)(i)(I) has an account in a plan described in subparagraph (A)(i)(II).

“(ix) Timeliness of execution.—After liquidating the assets of an individual retirement plan described in subparagraph (A)(i)(I) to cash, an automatic portability provider shall transfer the account balance of such plan as soon as practicable to the plan described in subparagraph (A)(i)(II).

“(x) Limitation on exercise of discretion.—The automatic portability provider shall neither have nor exercise discretion to affect the timing or amount of the transfer pursuant to an automatic portability transaction other than to deduct the appropriate fees as described in clause (ii).

“(xi) Record retention and audits.—

“(I) In general.—An automatic portability provider shall, for not less than 6 years after the automatic portability transaction has occurred, maintain the records sufficient to demonstrate the terms of this subparagraph have been met. The automatic portability provider shall make such records available to any authorized employee of the Department of the Treasury or the Department of Labor within 30 calendar days of the date of a written request for such records.

“(II) Audits.—An automatic portability provider shall conduct an annual audit, in accordance with regulations promulgated by the Secretary of Labor, of automatic portability transactions occurring during the calendar year to demonstrate compliance with this paragraph and any regulations thereunder and identify any instances of noncompliance therewith, and shall submit such audit annually to the Secretary of Labor, in such form and manner as specified by such Secretary.

“(xii) Website.—The automatic portability provider shall maintain a website which contains—

“(I) a list of recordkeepers for each plan described in subparagraph (A)(i)(II) with respect to which the provider carries out automatic portability transactions, and

“(II) a list of all fees described in clause (ii)(II) paid to the provider.”

Any term used in this subsection which is used in paragraph (12) of section 4975(f) of such Code, as added by this section, has the same meaning as when used in such paragraph.

“(16) Starter 401(k) deferral-only plans for employers with no retirement plan.—

“(A) In general.—A starter 401(k) deferral-only arrangement maintained by an eligible employer shall be treated as meeting the requirements of paragraph (3)(A)(ii).

“(B) Starter 401(k) deferral-only arrangement.—For purposes of this paragraph, the term ‘starter 401(k) deferral-only arrangement’ means any cash or deferred arrangement which meets—

“(i) the automatic deferral requirements of subparagraph (C),

“(ii) the contribution limitations of subparagraph (D), and

“(iii) the requirements of subparagraph (E) of paragraph (13).

“(C) Automatic deferral.—

“(i) In general.—The requirements of this subparagraph are met if, under the arrangement, each eligible employee is treated as having elected to have the employer make elective contributions in an amount equal to a qualified percentage of compensation.

“(ii) Election out.—The election treated as having been made under clause (i) shall cease to apply with respect to any employee if such employee makes an affirmative election—

“(I) to not have such contributions made, or

“(II) to make elective contributions at a level specified in such affirmative election.

“(iii) Qualified percentage.—For purposes of this subparagraph, the term ‘qualified percentage’ means, with respect to any employee, any percentage determined under the arrangement if such percentage is applied uniformly and is not less than 3 or more than 15 percent.

“(D) Contribution limitations.—

“(i) In general.—The requirements of this subparagraph are met if, under the arrangement—

“(I) the only contributions which may be made are elective contributions of employees described in subparagraph (C), and

“(II) the aggregate amount of such elective contributions which may be made with respect to any employee for any calendar year shall not exceed $6,000.

“(ii) Cost-of-living adjustment.—In the case of any calendar year beginning after December 31, 2024, the $6,000 amount under clause (i) shall be adjusted in the same manner as under section 402(g)(4), except that ‘2023’ shall be substituted for ‘2005’.

“(iii) Catch-up contributions for individuals age 50 or over.—In the case of an individual who has attained the age of 50 before the close of the taxable year, the limitation under clause (i)(II) shall be increased by the applicable amount determined under section 219(b)(5)(B)(ii) (after the application of section 219(b)(5)(C)(iii)).

“(E) Eligible employer.—For purposes of this paragraph—

“(i) In general.—The term ‘eligible employer’ means any employer if the employer does not maintain a qualified plan with respect to which contributions are made, or benefits are accrued, for service in the year for which the determination is being made. If only individuals other than employees described in subparagraph (A) of section 410(b)(3) are eligible to participate in such arrangement, then the preceding sentence shall be applied without regard to any qualified plan in which only employees described in such subparagraph are eligible to participate.

“(ii) Relief for acquisitions, etc.—Rules similar to the rules of section 408(p)(10) shall apply for purposes of clause (i).

“(iii) Qualified plan.—The term ‘qualified plan’ means a plan, contract, pension, account, or trust described in subparagraph (A) or (B) of paragraph (5) of section 219(g) (determined without regard to the last sentence of such paragraph (5)).

“(F) Eligible employee.—For purposes of this paragraph—

“(i) In general.—The term ‘eligible employee’ means any employee of the employer who meets the minimum age and service conditions described in section 410(a)(1).

“(ii) Exclusions.—The employer may elect to exclude from such definition any employee described in paragraph (3) or (4) of section 410(b).”

“(16) Safe harbor deferral-only plans for employers with no retirement plan.—

“(A) In general.—A safe harbor deferral-only plan maintained by an eligible employer shall be treated as meeting the requirements of paragraph (12).

“(B) Safe harbor deferral-only plan.—For purposes of this paragraph, the term ‘safe harbor deferral-only plan’ means any plan which meets—

“(i) the automatic deferral requirements of subparagraph (C),

“(ii) the contribution limitations of subparagraph (D), and

“(iii) the requirements of subparagraph (E) of section 401(k)(13).

“(C) Automatic deferral.—

“(i) In general.—The requirements of this subparagraph are met if, under the plan, each eligible employee is treated as having elected to have the employer make elective contributions in an amount equal to a qualified percentage of compensation.

“(ii) Election out.—The election treated as having been made under clause (i) shall cease to apply with respect to any eligible employee if such eligible employee makes an affirmative election—

“(I) to not have such contributions made, or

“(II) to make elective contributions at a level specified in such affirmative election.

“(iii) Qualified percentage.—For purposes of this subparagraph, the term ‘qualified percentage’ means, with respect to any employee, any percentage determined under the plan if such percentage is applied uniformly and is not less than 3 or more than 15 percent.

“(D) Contribution limitations.—

“(i) In general.—The requirements of this subparagraph are met if, under the plan—

“(I) the only contributions which may be made are elective contributions of eligible employees, and

“(II) the aggregate amount of such elective contributions which may be made with respect to any employee for any calendar year shall not exceed $6,000.

“(ii) Cost-of-living adjustment.—In the case of any calendar year beginning after December 31, 2024, the $6,000 amount under clause (i) shall be adjusted in the same manner as under section 402(g)(4), except that ‘2023’ shall be substituted for ‘2005’.

“(iii) Catch-up contributions for individuals age 50 or over.—In the case of an individual who has attained the age of 50 before the close of the taxable year, the limitation under clause (i)(II) shall be increased by the applicable amount determined under section 219(b)(5)(B)(ii) (after the application of section 219(b)(5)(C)(iii)).

“(E) Eligible employer.—For purposes of this paragraph—

“(i) In general.—The term ‘eligible employer’ means any employer if the employer does not maintain a qualified plan with respect to which contributions are made, or benefits are accrued, for service in the year for which the determination is being made. If only individuals other than employees described in subparagraph (A) of section 410(b)(3) are eligible to participate in such arrangement, then the preceding sentence shall be applied without regard to any qualified plan in which only employees described in such subparagraph are eligible to participate.

“(ii) Relief for acquisitions, etc.—Rules similar to the rules of section 408(p)(10) shall apply for purposes of clause (i).

“(iii) Qualified plan.—The term ‘qualified plan’ means a plan, contract, pension, account, or trust described in subparagraph (A) or (B) of paragraph (5) of section 219(g) (determined without regard to the last sentence of such paragraph (5)).

“(F) Eligible employee.—For purposes of this paragraph, the term ‘eligible employee’ means any employee of the employer other than an employee who is permitted to be excluded under paragraph (12)(A).”

“(f)

(1)

(A) The Secretary shall provide each State, in digital or other electronic form, with information describing any applicable savings bond which has an applicable address that is within such State, including—

“(i) the name and applicable address of the registered owner; and

“(ii) the name and applicable address of any registered co-owner or beneficiary.

“(B) The information provided under subparagraph (A) may include the serial number of any applicable savings bond.

“(C)

(i) For purposes of this paragraph, the term ‘applicable address’ means, with respect to any applicable savings bond—

“(I) the registered address for the registered owner, co-owner, or beneficiary (as applicable) of such bond; or

“(II) if such information is available to the Secretary, the last known address for the registered owner, co-owner, or beneficiary (as applicable) of such bond.

“(ii) For purposes of clause (i), if the information described in subclause (II) of clause (i) with respect to any individual is available to the Secretary, subclause (I) of such clause shall not apply.

“(2)

(A) Not later than 12 months after the date of enactment of this subsection, the Secretary shall prescribe such regulations or other guidance as may be necessary to carry out the purposes of this subsection, including rules to—

“(i) protect the privacy of the owners of applicable savings bonds;

“(ii) prevent fraud; and

“(iii) ensure that any information provided to a State under this subsection shall be used solely to carry out the purposes of this subsection.

“(B) Except as deemed necessary to protect privacy or prevent fraud or misuse of savings bond information, any regulations or guidance prescribed by the Secretary pursuant to subparagraph (A) shall not have the effect of prohibiting, restricting, or otherwise preventing a State from obtaining all information described in paragraph (1)(A).

“(3) Not later than 12 months after the date of enactment of this subsection, and annually thereafter for each year during the 5-year period beginning after the date of enactment of this subsection, the Secretary shall submit to the Committees on Appropriations of the House of Representatives and the Senate, the Committee on Ways and Means of the House of Representatives, and the Committee on Finance of the Senate a report assessing all efforts to satisfy the requirement under paragraph (1)(A).

“(4) Any State that receives information described in paragraph (1)(A) with respect to an applicable savings bond may use such information to locate the owner of such bond pursuant to the same standards and requirements as are applicable under—

“(A) the abandoned property rules and regulations of such State; and

“(B) any regulations or guidance promulgated under this subsection.

“(5) For purposes of this subsection, the Secretary may disclose to the public any information with respect to any applicable savings bond which a State may disclose to the public pursuant to paragraph (4).

“(6) For purposes of this subsection, the term ‘applicable savings bond’ means a savings bond which—

“(A) is more than 3 years past its date of final maturity;

“(B)

(i) is in paper form; or

“(ii) is in paperless or electronic form and for which—

“(I) there is no designated bank account or routing information; or

“(II) the designated bank account or routing information is incorrect; and

“(C) has not been redeemed.”

“(I) ESOP rules relating to publicly traded securities.—In the case of an applicable defined contribution plan which is an employee stock ownership plan, an employer security shall be treated as described in subparagraph (G)(v) if—

“(i) the security is the subject of priced quotations by at least 4 dealers, published and made continuously available on an interdealer quotation system (as such term is used in section 13 of the Securities Exchange Act of 1934) which has made the request described in section 6(j) of such Act to be treated as an alternative trading system,

“(ii) the security is not a penny stock (as defined by section 3(a)(51) of such Act),

“(iii) the security is issued by a corporation which is not a shell company (as such term is used in section 4(d)(6) of the Securities Act of 1933), a blank check company (as defined in section 7(b)(3) of such Act), or subject to bankruptcy proceedings,

“(iv) the security has a public float (as such term is used in section 240.12b-2 of title 17, Code of Federal Regulations) which has a fair market value of at least $1,000,000 and constitutes at least 10 percent of the total shares issued and outstanding.

“(v) in the case of a security issued by a domestic corporation, the issuer publishes, not less frequently than annually, financial statements audited by an independent auditor registered with the Public Company Accounting Oversight Board established under the Sarbanes-Oxley Act of 2002, and

“(vi) in the case of a security issued by a foreign corporation, the security is represented by a depositary share (as defined under section 240.12b-2 of title 17, Code of Federal Regulations), or is issued by a foreign corporation incorporated in Canada and readily tradeable on an established securities market in Canada, and the issuer—

“(I) is subject to, and in compliance with, the reporting requirements of section 13 or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)),

“(II) is subject to, and in compliance with, the reporting requirements of section 230.257 of title 17, Code of Federal Regulations, or

“(III) is exempt from such requirements under section 240.12g3–2(b) of title 17, Code of Federal Regulations.”

“(4) Part-time employees.—For purposes of determining whether an employee who became 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; and

“(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.

“(E) Special rollover to roth iras from long-term qualified tuition programs.—

“(i) In general.—In the case of a distribution from a qualified tuition program of a designated beneficiary which has been maintained for the 15-year period ending on the date of such distribution, subparagraph (A) shall not apply to so much the portion of such distribution which—

“(I) does not exceed the aggregate amount contributed to the program (and earnings attributable thereto) before the 5-year period ending on the date of the distribution, and

“(II) is paid in a direct trustee-to-trustee transfer to a Roth IRA maintained for the benefit of such designated beneficiary.

“(ii) Limitations.—

“(I) Annual limitation.—Clause (i) shall only apply to so much of any distribution as does not exceed the amount applicable to the designated beneficiary under section 408A(c)(2) for the taxable year (reduced by the amount of aggregate contributions made during the taxable year to all individual retirement plans maintained for the benefit of the designated beneficiary).

“(II) Aggregate limitation.—This subparagraph shall not apply to any distribution described in clause (i) to the extent that the aggregate amount of such distributions with respect to the designated beneficiary for such taxable year and all prior taxable years exceeds $35,000.”

“(45) Pension-linked emergency savings account.—The term ‘pension-linked emergency savings account’ means a short-term savings account established and maintained as part of an individual account plan, in accordance with section 801, on behalf of an eligible participant (as such term is defined in section 801(b)) that—

“(A) is a designated Roth account (within the meaning of section 402A of the Internal Revenue Code of 1986) and accepts only participant contributions, as described in section 801(d)(1)(A), which are designated Roth contributions subject to the rules of section 402A(e) of such Code; and

“(B) meets the requirements of part 8 of subtitle B.”

“(6) Default investment arrangements for a pension-linked emergency savings account.—For purposes of paragraph (1), a participant in a pension-linked emergency savings account shall be treated as exercising control over the assets in the account with respect to the amount of contributions and earnings which are invested in accordance with section 801(c)(1)(A)(iii).”

“(J) Certain increases in payments under a commercial annuity.—Nothing in this section shall prohibit a commercial annuity (within the meaning of section 3405(e)(6)) that is issued in connection with any eligible retirement plan (within the meaning of section 402(c)(8)(B), other than a defined benefit plan) from providing one or more of the following types of payments on or after the annuity starting date:

“(i) annuity payments that increase by a constant percentage, applied not less frequently than annually, at a rate that is less than 5 percent per year,

“(ii) a lump sum payment that—

“(I) results in a shortening of the payment period with respect to an annuity or a full or partial commutation of the future annuity payments, provided that such lump sum is determined using reasonable actuarial methods and assumptions, as determined in good faith by the issuer of the contract, or

“(II) accelerates the receipt of annuity payments that are scheduled to be received within the ensuing 12 months, regardless of whether such acceleration shortens the payment period with respect to the annuity, reduces the dollar amount of benefits to be paid under the contract, or results in a suspension of annuity payments during the period being accelerated,

“(iii) an amount which is in the nature of a dividend or similar distribution, provided that the issuer of the contract determines such amount using reasonable actuarial methods and assumptions, as determined in good faith by the issuer of the contract, when calculating the initial annuity payments and the issuer’s experience with respect to those factors, or

“(iv) a final payment upon death that does not exceed the excess of the total amount of the consideration paid for the annuity payments, less the aggregate amount of prior distributions or payments from or under the contract.”

“(h) Special Rules Applicable to Benefit Overpayments.—

“(1) General rule.—In the case of an inadvertent benefit overpayment by any pension plan, the responsible plan fiduciary shall not be considered to have failed to comply with the requirements of this title merely because such fiduciary determines, in the exercise of its discretion, not to seek recovery of all or part of such overpayment from—

“(A) any participant or beneficiary,

“(B) any plan sponsor of, or contributing employer to—

“(i) an individual account plan, provided that the amount needed to prevent or restore any impermissible forfeiture from any participant’s or beneficiary’s account arising in connection with the overpayment is, separately from and independently of the overpayment, allocated to such account pursuant to the nonforfeitability requirements of section 203 (for example, out of the plan’s forfeiture account, additional employer contributions, or recoveries from those responsible for the overpayment), or

“(ii) a defined benefit pension plan subject to the funding rules in part 3 of this subtitle B, unless the responsible plan fiduciary determines, in the exercise of its fiduciary discretion, that failure to recover all or part of the overpayment faster than required under such funding rules would materially affect the plan’s ability to pay benefits due to other participants and beneficiaries, or

“(C) any fiduciary of the plan, other than a fiduciary (including a plan sponsor or contributing employer acting in a fiduciary capacity) whose breach of its fiduciary duties resulted in such overpayment, provided that if the plan has established prudent procedures to prevent and minimize overpayment of benefits and the relevant plan fiduciaries have followed such procedures, an inadvertent benefit overpayment will not give rise to a breach of fiduciary duty.

“(2) Reduction in future benefit payments and recovery from responsible party.—Paragraph (1) shall not fail to apply with respect to any inadvertent benefit overpayment merely because, after discovering such overpayment, the responsible plan fiduciary—

“(A) reduces future benefit payments to the correct amount provided for under the terms of the plan, or

“(B) seeks recovery from the person or persons responsible for the overpayment.

“(3) Employer funding obligations.—Nothing in this subsection shall relieve an employer of any obligation imposed on it to make contributions to a plan to meet the minimum funding standards under part 3 of this subtitle B or to prevent or restore an impermissible forfeiture in accordance with section 203.

“(4) Recoupment from participants and beneficiaries.—If the responsible plan fiduciary, in the exercise of its fiduciary discretion, decides to seek recoupment from a participant or beneficiary of all or part of an inadvertent benefit overpayment made by the plan to such participant or beneficiary, it may do so, subject to the following conditions:

“(A) No interest or other additional amounts (such as collection costs or fees) are sought on overpaid amounts for any period.

“(B) If the plan seeks to recoup past overpayments of a non-decreasing annuity by reducing future benefit payments—

“(i) the reduction ceases after the plan has recovered the full dollar amount of the overpayment,

“(ii) the amount recouped each calendar year does not exceed 10 percent of the full dollar amount of the overpayment, and

“(iii) future benefit payments are not reduced to below 90 percent of the periodic amount otherwise payable under the terms of the plan.

“(C) If the plan seeks to recoup past overpayments of a benefit other than a non-decreasing annuity, the plan satisfies requirements developed by the Secretary of Labor for purposes of this subparagraph.

“(D) Efforts to recoup overpayments are—

“(i) not accompanied by threats of litigation, unless the responsible plan fiduciary makes a determination that there is a reasonable likelihood of success to recover an amount greater than the cost of recovery, and

“(ii) not made through a collection agency or similar third party, unless the participant or beneficiary ignores or rejects efforts to recoup the overpayment following either a final judgment in Federal or State court or a settlement between the participant or beneficiary and the plan, in either case authorizing such recoupment.

“(E) Recoupment of past overpayments to a participant is not sought from any beneficiary of the participant, including a spouse, surviving spouse, former spouse, or other beneficiary.

“(F) Recoupment may not be sought if the first overpayment occurred more than 3 years before the participant or beneficiary is first notified in writing of the error, except in the case of fraud or misrepresentation by the participant.

“(G) A participant or beneficiary from whom recoupment is sought is entitled to contest all or part of the recoupment pursuant to the claims procedures of the plan that made the overpayment to the extent such procedures are consistent with section 503 of this title and in the case of an inadvertent benefit overpayment from a plan to which paragraph (1) applies that is transferred to an eligible retirement plan (as defined in section 402(c)(8)(B) of the Internal Revenue Code of 1986) by or on behalf of a participant or beneficiary—

“(i) such plan shall notify the plan receiving the rollover of such dispute,

“(ii) the plan receiving the rollover shall retain such overpayment on behalf of the participant or beneficiary (and shall be entitled to treat such overpayment as plan assets) pending the outcome of such procedures, and

“(iii) the portion of such overpayment with respect to which recoupment is sought on behalf of the plan shall be permitted to be returned to such plan if it is determined to be an overpayment (and the plans making and receiving such transfer shall be treated as permitting such transfer).

“(H) In determining the amount of recoupment to seek, the responsible plan fiduciary may take into account the hardship that recoupment likely would impose on the participant or beneficiary.

“(5) Effect of culpability.—Subparagraphs (A) through (F) of paragraph (4) shall not apply to protect a participant or beneficiary who is culpable. For purposes of this paragraph, a participant or beneficiary is culpable if the individual bears responsibility for the overpayment (such as through misrepresentations or omissions that led to the overpayment), or if the individual knew that the benefit payment or payments were materially in excess of the correct amount. Notwithstanding the preceding sentence, an individual is not culpable merely because the individual believed the benefit payment or payments were or might be in excess of the correct amount, if the individual raised that question with an authorized plan representative and was told the payment or payments were not in excess of the correct amount.”

In the case of a benefit overpayment that occurred prior to the date of enactment of this Act, any installment payments by the participant or beneficiary to the plan or any reduction in periodic benefit payments to the participant or beneficiary, which were made in recoupment of such overpayment and which commenced prior to such date, may continue after such date. Nothing in this subsection shall relieve a fiduciary from responsibility for an overpayment that resulted from a breach of its fiduciary duties.

“(e) Reduction of Tax in Certain Cases.—

“(1) Reduction.—In the case of a taxpayer who—

“(A) receives a distribution, during the correction window, of the amount which resulted in imposition of a tax under subsection (a) from the same plan to which such tax relates, and

“(B) submits a return, during the correction window, reflecting such tax (as modified by this subsection),

“(2) Correction window.—For purposes of this subsection, the term ‘correction window’ means the period of time beginning on the date on which the tax under subsection (a) is imposed with respect to a shortfall of distributions from a plan described in subsection (a), and ending on the earliest of—

“(A) the date of mailing a notice of deficiency with respect to the tax imposed by subsection (a) under section 6212,

“(B) the date on which the tax imposed by subsection (a) is assessed, or

“(C) the last day of the second taxable year that begins after the end of the taxable year in which the tax under subsection (a) is imposed.”

“SEC. 523. 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, in consultation with the Secretary of the Treasury, shall establish an online searchable database (to be managed by the Secretary 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 Secretary to assist such an individual in locating any such plan of the individual; and

“(C) allow the Secretary 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 make a claim for benefits 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 Secretary, in consultation with the Secretary of the Treasury, shall take all necessary and proper precautions to—

“(1) ensure that individuals’ plan and personal information maintained by the Retirement Savings Lost and Found is protected; and

“(2) allow any individual to contact the Secretary to opt out of inclusion in the Retirement Savings Lost and Found.

“(d) Definition of Administrator.—For purposes of this section, 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 Secretary, 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) and (B) of section 6057(a)(2) of such Code;

“(3) the name and taxpayer identifying number of each participant or former participant in the plan—

“(A) who, during the current plan year or any previous plan year, was reported under section 6057(a)(2)(C) of such Code, and with respect to whom the benefits described in clause (ii) thereof were fully paid during the plan year;

“(B) with respect to whom any amount was distributed under section 401(a)(31)(B) of such Code during the plan year; or

“(C) with respect to whom a deferred annuity contract was distributed during the plan year; and

“(4) in the case of a participant or former participant to whom paragraph (3) applies—

“(A) in the case of a participant described in subparagraph (B) thereof, the name and address of the designated trustee or issuer described in section 401(a)(31)(B)(i) of such Code and the account number of the individual retirement plan to which the amount was distributed; and

“(B) in the case of a participant described in subparagraph (C) thereof, the name and address of the issuer of such annuity contract and the contract or certificate number.

“(f) Use of Information Collected.—The Secretary—

“(1) may use or disclose information collected under this section only for the purpose described in subsection (a)(1)(B), and

“(2) may disclose such information only to such employees of the Department of Labor whose official duties relate to the purpose described in such subsection.

“(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—

“(1) conduct an audit of the administration of the Retirement Savings Lost and Found; and

“(2) submit a report on such audit to the Committee on Health, Education, Labor, and Pensions and the Committee on Finance of the Senate and the Committee on Ways and Means and the Committee on Education and Labor of the House of Representatives.”

“Sec. 523. Retirement Savings Lost and Found.”.

“(4) which provides that compensation—

“(A) in the case of an eligible employer described in subsection (e)(1)(A), will be deferred only if an agreement providing for such deferral has been entered into before the compensation is currently available to the individual, and

“(B) in any other case, will be deferred for any calendar month only if an agreement providing for such deferral has been entered into before the beginning of such month,”

“(F) One-time election for qualified charitable distribution to split-interest entity.—

“(i) In general.—A taxpayer may for a taxable year elect under this subparagraph to treat as meeting the requirement of subparagraph (B)(i) any distribution from an individual retirement account which is made directly by the trustee to a split-interest entity, but only if—

“(I) an election is not in effect under this subparagraph for a preceding taxable year,

“(II) the aggregate amount of distributions of the taxpayer with respect to which an election under this subparagraph is made does not exceed $50,000, and

“(III) such distribution meets the requirements of clauses (iii) and (iv).

“(ii) Split-interest entity.—For purposes of this subparagraph, the term ‘split-interest entity’ means—

“(I) a charitable remainder annuity trust (as defined in section 664(d)(1)), but only if such trust is funded exclusively by qualified charitable distributions,

“(II) a charitable remainder unitrust (as defined in section 664(d)(2)), but only if such unitrust is funded exclusively by qualified charitable distributions, or

“(III) a charitable gift annuity (as defined in section 501(m)(5)), but only if such annuity is funded exclusively by qualified charitable distributions and commences fixed payments of 5 percent or greater not later than 1 year from the date of funding.

“(iii) Contributions must be otherwise deductible.—A distribution meets the requirements of this clause only if—

“(I) in the case of a distribution to a charitable remainder annuity trust or a charitable remainder unitrust, a deduction for the entire value of the remainder interest in the distribution for the benefit of a specified charitable organization would be allowable under section 170 (determined without regard to subsection (b) thereof and this paragraph), and

“(II) in the case of a charitable gift annuity, a deduction in an amount equal to the amount of the distribution reduced by the value of the annuity described in section 501(m)(5)(B) would be allowable under section 170 (determined without regard to subsection (b) thereof and this paragraph).

“(iv) Limitation on income interests.—A distribution meets the requirements of this clause only if—

“(I) no person holds an income interest in the split-interest entity other than the individual for whose benefit such account is maintained, the spouse of such individual, or both, and

“(II) the income interest in the split-interest entity is nonassignable.

“(v) Special rules.—

“(I) Charitable remainder trusts.—Notwithstanding section 664(b), distributions made from a trust described in subclause (I) or (II) of clause (ii) shall be treated as ordinary income in the hands of the beneficiary to whom the annuity described in section 664(d)(1)(A) or the payment described in section 664(d)(2)(A) is paid.

“(II) Charitable gift annuities.—Qualified charitable distributions made to fund a charitable gift annuity shall not be treated as an investment in the contract for purposes of section 72(c).”

“(G) Inflation adjustment.—

“(i) In general.—In the case of any taxable year beginning after 2023, each of the dollar amounts in subparagraphs (A) and (F) shall be increased by an amount equal to—

“(I) such dollar amount, multiplied by

“(II) the cost-of-living adjustment determined under section 1(f)(3) for the calendar year in which the taxable year begins, determined by substituting ‘calendar year 2022’ for ‘calendar year 2016’ in subparagraph (A)(ii) thereof.

“(ii) Rounding.—If any dollar amount increased under clause (i) is not a multiple of $1,000, such dollar amount shall be rounded to the nearest multiple of $1,000.”

“SEC. 139C. CERTAIN DISABILITY-RELATED FIRST RESPONDER RETIREMENT PAYMENTS.

“(a) In General.—In the case of an individual who receives qualified first responder retirement payments for any taxable year, gross income shall not include so much of such payments as do not exceed the annualized excludable disability amount with respect to such individual.

“(b) Qualified First Responder Retirement Payments.—For purposes of this section, the term ‘qualified first responder retirement payments’ means, with respect to any taxable year, any pension or annuity which but for this section would be includible in gross income for such taxable year and which is received—

“(1) from a plan described in clause (iii), (iv), (v), or (vi) of section 402(c)(8)(B), and

“(2) in connection with such individual’s qualified first responder service.

“(c) Annualized Excludable Disability Amount.—For purposes of this section—

“(1) In general.—The term ‘annualized excludable disability amount’ means, with respect to any individual, the service-connected excludable disability amounts which are properly attributable to the 12-month period immediately preceding the date on which such individual attains retirement age.

“(2) Service-connected excludable disability amount.—The term ‘service-connected excludable disability amount’ means periodic payments received by an individual which—

“(A) are not includible in such individual’s gross income under section 104(a)(1),

“(B) are received in connection with such individual’s qualified first responder service, and

“(C) terminate when such individual attains retirement age.

“(3) Special rule for partial-year payments.—In the case of an individual who only receives service-connected excludable disability amounts properly attributable to a portion of the 12-month period described in paragraph (1), such paragraph shall be applied by multiplying such amounts by the ratio of 365 to the number of days in such period to which such amounts were properly attributable.

“(d) Qualified First Responder Service.—For purposes of this section, the term ‘qualified first responder service’ means service as a law enforcement officer, firefighter, paramedic, or emergency medical technician.”

“Sec. 139C. Certain disability-related first responder retirement payments.”.

“(C) Application to employees not meeting age and service requirements.—Any employees not meeting the age or service requirements of section 410(a)(1) (without regard to subparagraph (B) thereof) may be excluded from consideration in determining whether any plan of the employer meets the requirements of subparagraphs (A) and (B).”

“(C) Employee certification.—In determining whether a distribution is upon the hardship of an employee, the administrator of the plan may rely on a written certification by the employee that the distribution is—

“(i) on account of a financial need of a type which is deemed in regulations prescribed by the Secretary to be an immediate and heavy financial need, and

“(ii) not in excess of the amount required to satisfy such financial need, and

“(4) Participant certification.—In determining whether a distribution to a participant is made when the participant is faced with an unforeseeable emergency, the administrator of a plan maintained by an eligible employer described in subsection (e)(1)(A) may rely on a written certification by the participant that the distribution is—

“(A) made when the participant is faced with an unforeseeable emergency of a type which is described in regulations prescribed by the Secretary as an unforeseeable emergency, and

“(B) not in excess of the amount required to satisfy the emergency need, and

“(4) Individual retirement plans.—

“(A) In general.—For purposes of any tax imposed by section 4973 or 4974 in connection with an individual retirement plan, the return referred to in this section shall include the income tax return filed by the person on whom the tax under such section is imposed for the year in which the act (or failure to act) giving rise to the liability for such tax occurred.

“(B) Rule in case of individuals not required to file return.—In the case of a person who is not required to file an income tax return for such year—

“(i) the return referred to in this section shall be the income tax return that such person would have been required to file but for the fact that such person was not required to file such return, and

“(ii) the 3-year period referred to in subsection (a) with respect to the return shall be deemed to begin on the date by which the return would have been required to be filed (excluding any extension thereof).

“(C) Period for assessment in case of income tax return.—In any case in which the return with respect to a tax imposed by section 4973 is the individual’s income tax return for purposes of this section, subsection (a) shall be applied by substituting a 6-year period in lieu of the 3-year period otherwise referred to in such subsection.

“(D) Exception for certain acquisitions of property.—In the case of any tax imposed by section 4973 that is attributable to acquiring property for less than fair market value, subparagraph (A) shall not apply.”

“(K) Distribution from retirement plan in case of domestic abuse.—

“(i) In general.—Any eligible distribution to a domestic abuse victim.

“(ii) Limitation.—The aggregate amount which may be treated as an eligible distribution to a domestic abuse victim by any individual shall not exceed an amount equal to the lesser of—

“(I) $10,000, or

“(II) 50 percent of the present value of the nonforfeitable accrued benefit of the employee under the plan.

“(iii) Eligible distribution to a domestic abuse victim.—For purposes of this subparagraph—

“(I) In general.—A distribution shall be treated as an eligible distribution to a domestic abuse victim if such distribution is from an applicable eligible retirement plan and is made to an individual during the 1-year period beginning on any date on which the individual is a victim of domestic abuse by a spouse or domestic partner.

“(II) Domestic abuse.—The term ‘domestic abuse’ means physical, psychological, sexual, emotional, or economic abuse, including efforts to control, isolate, humiliate, or intimidate the victim, or to undermine the victim’s ability to reason independently, including by means of abuse of the victim’s child or another family member living in the household.

“(iv) Treatment of plan distributions.—If a distribution to an individual would (without regard to clause (ii)) be an eligible distribution to a domestic abuse victim, a plan shall not be treated as failing to meet any requirement of this title merely because the plan treats the distribution as an eligible distribution to a domestic abuse victim, unless the aggregate amount of such distributions from all plans maintained by the employer (and any member of any controlled group which includes the employer, determined as provided in subparagraph (H)(iv)(II)) to such individual exceeds the limitation under clause (ii).

“(v) Amount distributed may be repaid.—Rules similar to the rules of subparagraph (H)(v) shall apply with respect to an individual who receives a distribution to which clause (i) applies.

“(vi) Definition and special rules.—For purposes of this subparagraph:

“(I) Applicable eligible retirement plan.—The term ‘applicable eligible retirement plan’ means an eligible retirement plan (as defined in section 402(c)(8)(B)) other than a defined benefit plan or a plan to which sections 401(a)(11) and 417 apply.

“(II) Exemption of distributions from trustee to trustee transfer and withholding rules.—For purposes of sections 401(a)(31), 402(f), and 3405, an eligible distribution to a domestic abuse victim shall not be treated as an eligible rollover distribution.

“(III) Distributions treated as meeting plan distribution requirements; self-certification.—Any distribution which the employee or participant certifies as being an eligible distribution to a domestic abuse victim shall be treated as meeting the requirements of sections 401(k)(2)(B)(i), 403(b)(7)(A)(i), 403(b)(11), and 457(d)(1)(A).

“(vii) Inflation adjustment.—In the case of a taxable year beginning in a calendar year after 2024, the $10,000 amount in clause (ii)(I) shall be increased by an amount equal to—

“(I) such dollar amount, multiplied by

“(II) the cost-of-living adjustment determined under section 1(f)(3) for the calendar year in which the taxable year begins, determined by substituting ‘calendar year 2023’ for ‘calendar year 2016’ in subparagraph (A)(ii) thereof.

“(3) Retroactive plan amendments that increase benefit accruals.—If—

“(A) an employer amends a stock bonus, pension, profit-sharing, or annuity plan to increase benefits accrued under the plan effective as of any date during the immediately preceding plan year (other than increasing the amount of matching contributions (as defined in subsection (m)(4)(A))),

“(B) such amendment would not otherwise cause the plan to fail to meet any of the requirements of this subchapter, and

“(C) such amendment is adopted before the time prescribed by law for filing the return of the employer for the taxable year (including extensions thereof) which includes the date described in subparagraph (A),

“(bb) 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 is furnished—

“(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 been furnished—

“(i) the summary plan description pursuant to section 104(b) of the Employee Retirement Income Security Act of 1974, and

“(ii) any other notices related to eligibility under the plan and required to be furnished under this title, or the Employee Retirement Income Security Act of 1974, in connection with such participant’s initial eligibility to participate in such plan,

“(C) is not participating in such plan, and

“(D) 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.”

“(iii) each individual retirement plan of the individual shall be treated as a separate contract.”

“(C) Rollovers to subsequent plan.—If—

“(i) payments described in paragraph (2)(A)(iv) are being made from a qualified retirement plan,

“(ii) a transfer or a rollover from such qualified retirement plan of all or a portion of the taxpayer’s benefit under the plan is made to another qualified retirement plan, and

“(iii) distributions from the transferor and transferee plans would in combination continue to satisfy the requirements of paragraph (2)(A)(iv) if they had been made only from the transferor plan,

“(g) Special Rule for Reporting Certain Additional Taxes.—No penalty shall be imposed under section 6721 or 6722 if—

“(1) a person makes a return or report under section 6047(d) or 408(i) with respect to any distribution,

“(2) such distribution is made following a rollover, transfer, or exchange described in section 72(t)(4)(C) or section 72(q)(3)(C),

“(3) in making such return or report the person relies upon a certification provided by the taxpayer that the distributions satisfy the requirements of section 72(t)(4)(C)(iii) or section 72(q)(3)(B)(iii), as applicable, and

“(4) such person does not have actual knowledge that the distributions do not satisfy such requirements.”

“(5) Mandatory distribution rules not to apply before death.—Notwithstanding sections 403(b)(10) and 457(d)(2), the following provisions shall not apply to any designated Roth account:

“(A) Section 401(a)(9)(A).

“(B) The incidental death benefit requirements of section 401(a).”

“(L) Terminal illness.—

“(i) In general.—Distributions which are made to the employee who is a terminally ill individual on or after the date on which such employee has been certified by a physician as having a terminal illness.

“(ii) Definition.—For purposes of this subparagraph, the term ‘terminally ill individual’ has the same meaning given such term under section 101(g)(4)(A), except that ‘84 months’ shall be substituted for ‘24 months’.

“(iii) Documentation.—For purposes of this subparagraph, an employee shall not be considered to be a terminally ill individual unless such employee furnishes sufficient evidence to the plan administrator in such form and manner as the Secretary may require.

“(iv) Amount distributed may be repaid.—Rules similar to the rules of subparagraph (H)(v) shall apply with respect to an individual who receives a distribution to which clause (i) applies.”

“(iv) Special rule for surviving spouse of employee.—If the designated beneficiary referred to in clause (iii)(I) is the surviving spouse of the employee and the surviving spouse elects the treatment in this clause—

“(I) the regulations referred to in clause (iii)(II) shall treat the surviving spouse as if the surviving spouse were the employee,

“(II) the date on which the distributions are required to begin under clause (iii)(III) shall not be earlier than the date on which the employee would have attained the applicable age, and

“(III) if the surviving spouse dies before the distributions to such spouse begin, this subparagraph shall be applied as if the surviving spouse is the employee.

“(A) Direct payment to insurer permitted.—

“(i) In general.—Paragraph (1) shall apply to a distribution without regard to whether payment of the premiums is made directly to the provider of the accident or health plan or qualified long-term care insurance contract by deduction from a distribution from the eligible retirement plan, or is made to the employee.

“(ii) Reporting.—In the case of a payment made to the employee as described in clause (i), the employee shall include with the return of tax for the taxable year in which the distribution is made an attestation that the distribution does not exceed the amount paid by the employee for qualified health insurance premiums for such taxable year.”

“(11) Replacement of simple retirement accounts with safe harbor plans during plan year.—

“(A) In general.—Subject to the requirements of this paragraph, an employer may elect (in such form and manner as the Secretary may prescribe) at any time during a year to terminate the qualified salary reduction arrangement under paragraph (2), but only if the employer establishes and maintains (as of the day after the termination date) a safe harbor plan to replace the terminated arrangement.

“(B) Combined limits on contributions.—The terminated arrangement and safe harbor plan shall both be treated as violating the requirements of paragraph (2)(A)(ii) or section 401(a)(30) (whichever is applicable) if the aggregate elective contributions of the employee under the terminated arrangement during its last plan year and under the safe harbor plan during its transition year exceed the sum of—

“(i) the applicable dollar amount for such arrangement (determined on a full-year basis) under this subsection (after the application of section 414(v)) with respect to the employee for such last plan year multiplied by a fraction equal to the number of days in such plan year divided by 365, and

“(ii) the applicable dollar amount (as so determined) under section 402(g)(1) for such safe harbor plan on such elective contributions during the transition year multiplied by a fraction equal to the number of days in such transition year divided by 365.

“(C) Transition year.—For purposes of this paragraph, the transition year is the period beginning after the termination date and ending on the last day of the calendar year during which the termination occurs.

“(D) Safe harbor plan.—For purposes of this paragraph, the term ‘safe harbor plan’ means a qualified cash or deferred arrangement which meets the requirements of paragraph (11), (12), (13), or (16) of section 401(k).”

“(39) Qualified long-term care distributions.—

“(A) In general.—A trust forming part of a defined contribution plan shall not be treated as failing to constitute a qualified trust under this section solely by reason of allowing qualified long-term care distributions.

“(B) Qualified long-term care distribution.—For purposes of this paragraph—

“(i) In general.—The term ‘qualified long-term care distribution’ means so much of the distributions made during the taxable year as does not exceed, in the aggregate, the least of the following:

“(I) The amount paid by or assessed to the employee during the taxable year for or with respect to certified long-term care insurance for the employee or the employee’s spouse (or other family member of the employee as provided by the Secretary by regulation).

“(II) An amount equal to 10 percent of the present value of the nonforfeitable accrued benefit of the employee under the plan.

“(III) $2,500.

“(ii) Adjustment for inflation.—In the case of taxable years beginning after December 31, 2024, the $2,500 amount in clause (i)(II) shall be increased by an amount equal to—

“(I) such dollar amount, multiplied by

“(II) the cost-of-living adjustment determined under section 1(f)(3) for the calendar year in which the taxable year begins, determined by substituting ‘calendar year 2023’ for ‘calendar year 2016’ in subparagraph (A)(ii) thereof.

“(C) Certified long-term care insurance.—The term ‘certified long-term care insurance’ means—

“(i) a qualified long-term care insurance contract (as defined in section 7702B(b)) covering qualified long-term care services (as defined in section 7702B(c)),

“(ii) coverage of the risk that an insured individual would become a chronically ill individual (within the meaning of section 101(g)(4)(B)) under a rider or other provision of a life insurance contract which satisfies the requirements of section 101(g)(3) (determined without regard to subparagraph (D) thereof), or

“(iii) coverage of qualified long-term care services (as so defined) under a rider or other provision of an insurance or annuity contract which is treated as a separate contract under section 7702B(e) and satisfies the requirements of section 7702B(g),

“(D) Distributions must otherwise be includible.—Rules similar to the rules of section 402(l)(3) shall apply for purposes of this paragraph.

“(E) Long-term care premium statement.—

“(i) In general.—No distribution shall be treated as a qualified long-term care distribution unless a long-term care premium statement with respect to the employee has been filed with the plan.

“(ii) Long-term care premium statement.—For purposes of this paragraph, a long-term care premium statement is a statement provided by the issuer of long-term care coverage, upon request by the owner of such coverage, which includes—

“(I) the name and taxpayer identification number of such issuer,

“(II) a statement that the coverage is certified long-term care insurance,

“(III) identification of the employee as the owner of such coverage,

“(IV) identification of the individual covered and such individual’s relationship to the employee,

“(V) the premiums owed for the coverage for the calendar year, and

“(VI) such other information as the Secretary may require.

“(iii) Filing with secretary.—A long-term care premium statement will be accepted only if the issuer has completed a disclosure to the Secretary for the specific coverage product to which the statement relates. Such disclosure shall identify the issuer, type of coverage, and such other information as the Secretary may require which is included in the filing of the product with the applicable State authority.”

“(N) Qualified long-term care distributions.—

“(i) In general.—Any qualified long-term care distribution to which section 401(a)(39) applies.

“(ii) Exception.—If, with respect to the plan, the individual covered by the long-term care coverage to which such distribution relates is the spouse of the employee, clause (i) shall apply only if the employee and the employee’s spouse file a joint return.

“(iii) Exemption of distributions from trustee to trustee transfer and withholding rules.—For purposes of sections 401(a)(31), 402(f), and 3405, any qualified long-term care distribution described in clause (i) shall not be treated as an eligible rollover distribution.”

“SEC. 113. NOTICE AND DISCLOSURE REQUIREMENTS WITH RESPECT TO LUMP SUMS.

“(a) In General.—A plan administrator of a pension plan that amends the plan to provide a period of time during which a participant or beneficiary may elect to receive a lump sum, instead of future monthly payments, shall furnish notice—

“(1) to each participant or beneficiary offered such lump sum amount, in the manner in which the participant and beneficiary receives the lump sum offer from the plan sponsor, not later than 90 days prior to the first day on which the participant or beneficiary may make an election with respect to such lump sum; and

“(2) to the Secretary and the Pension Benefit Guaranty Corporation, not later than 30 days prior to the first day on which participants and beneficiaries may make an election with respect to such lump sum.

“(b) Notice to Participants and Beneficiaries.—

“(1) Content.—The notice required under subsection (a)(1) shall include the following:

“(A) Available benefit options, including the estimated monthly benefit that the participant or beneficiary would receive at normal retirement age, whether there is a subsidized early retirement option or qualified joint and survivor annuity that is fully subsidized (in accordance with section 417(a)(5) of the Internal Revenue Code of 1986, the monthly benefit amount if payments begin immediately, and the lump sum amount available if the participant or beneficiary takes the option.

“(B) An explanation of how the lump sum was calculated, including the interest rate, mortality assumptions, and whether any additional plan benefits were included in the lump sum, such as early retirement subsidies.

“(C) In a manner consistent with the manner in which a written explanation is required to be given under 417(a)(3) of the Internal Revenue Code of 1986, the relative value of the lump sum option for a terminated vested participant compared to the value of—

“(i) the single life annuity, (or other standard form of benefit); and

“(ii) the qualified joint and survivor annuity (as defined in section 205(d)(1));

“(D) A statement that—

“(i) a commercial annuity comparable to the annuity available from the plan may cost more than the amount of the lump sum amount, and

“(ii) it may be advisable to consult an advisor regarding this point if the participant or beneficiary is considering purchasing a commercial annuity.

“(E) The potential ramifications of accepting the lump sum, including longevity risks, loss of protections guaranteed by the Pension Benefit Guaranty Corporation (with an explanation of the monthly benefit amount that would be protected by the Pension Benefit Guaranty Corporation if the plan is terminated with insufficient assets to pay benefits), loss of protection from creditors, loss of spousal protections, and other protections under this Act that would be lost.

“(F) General tax rules related to accepting a lump sum, including rollover options and early distribution penalties with a disclaimer that the plan does not provide tax, legal, or accounting advice, and a suggestion that participants and beneficiaries consult with their own tax, legal, and accounting advisors before determining whether to accept the offer.

“(G) How to accept or reject the offer, the deadline for response, and whether a spouse is required to consent to the election.

“(H) Contact information for the point of contact at the plan administrator for participants and beneficiaries to get more information or ask questions about the options.

“(2) Plain language.—The notice under this subsection shall be written in a manner calculated to be understood by the average plan participant.

“(3) Model notice.—The Secretary shall issue a model notice for purposes of the notice under subsection (a)(1), including for information required under subparagraphs (C) through (F) of paragraph (1).

“(c) Notice to the Secretary and Pension Benefit Guaranty Corporation.—The notice required under subsection (a)(2) shall include the following:

“(1) The total number of participants and beneficiaries eligible for such lump sum option.

“(2) The length of the limited period during which the lump sum is offered.

“(3) An explanation of how the lump sum was calculated, including the interest rate, mortality assumptions, and whether any additional plan benefits were included in the lump sum, such as early retirement subsidies.

“(4) A sample of the notice provided to participants and beneficiaries under subsection (a)(1), if otherwise required.

“(d) Post-Offer Report to the Secretary and Pension Benefit Guaranty Corporation.—Not later than 90 days after the conclusion of the limited period during which participants and beneficiaries in a plan may accept a plan’s offer of a lump sum, a plan sponsor shall submit a report to the Secretary and the Director of the Pension Benefit Guaranty Corporation that includes the number of participants and beneficiaries who accepted the lump sum offer and such other information as the Secretary may require.

“(e) Public Availability.—The Secretary shall make the information provided in the notice to the Secretary required under subsection (a)(2) and in the post-offer reports submitted under subsection (d) publicly available in a form that protects the confidentiality of the information provided.

“(f) Biennial Report.—Not later than the last day of the second calendar year after the calendar year including the applicability date of the final rules under section 342(e) of the SECURE 2.0 Act of 2022, and every 2 years thereafter, so long as the Secretary has received notices and post-offer reports under subsections (c) and (d) of this section, the Secretary shall submit to Congress a report that summarizes such notices and post-offer reports during the applicable reporting period. The applicable reporting period begins on the first day of the second calendar year preceding the calendar year that the report is submitted to Congress and ends on the last day of the calendar year preceding the calendar year the report is due.”

Sec. 113. Notice and disclosure requirements with respect to lump sum windows.

“(6) Projected interest crediting rate.—For purposes of subparagraphs (A), (B), and (C) of paragraph (1), in the case of an applicable defined benefit plan (as defined in subsection (a)(13)(C)) which provides variable interest crediting rates, the interest crediting rate which is treated as in effect and as the projected interest crediting rate shall be a reasonable projection of such variable interest crediting rate, not to exceed 6 percent.”

“(6) Projected interest crediting rate.—For purposes of subparagraphs (A), (B), and (C) of paragraph (1), in the case of an applicable defined benefit plan (within the meaning of section 203(f)(3)) which provides variable interest crediting rates, the interest crediting rate which is treated as in effect and as the projected interest crediting rate shall be a reasonable projection of such variable interest crediting rate, not to exceed 6 percent.”

“(cc) Correcting Automatic Contribution Errors.—

“(1) In general.—Any plan or arrangement shall not fail to be treated as a plan described in sections 401(a), 403(b), 408, or 457(b), as applicable, solely by reason of a corrected error.

“(2) Corrected error defined.—For purposes of this subsection, the term ‘corrected error’ means a reasonable administrative error—

“(A)

(i) made in implementing an automatic enrollment or automatic escalation feature with respect to an eligible employee (or an affirmative election made by an eligible employee covered by such feature), or

“(ii) made by failing to afford an eligible employee the opportunity to make an affirmative election because such employee was improperly excluded from the plan], and

“(B) that is corrected prospectively by implementing an automatic enrollment or automatic escalation feature with respect to an eligible employee (or an affirmative election made by an eligible employee) determined in accordance with the terms of an eligible automatic contribution arrangement (as defined under subsection (w)(3)), provided that—

“(i) such implementation error is corrected not later than—

“(I) the date of the first payment of compensation made by the employer to the employee on or after the last day of the 9½ month-period after the end of the plan year during which such error with respect to the employee first occurred, or

“(II) if earlier in the case of an employee who notifies the plan sponsor of such error, the date of the first payment of compensation made by the employer to the employee on or after the last day of the month following the month in which such notification was made,

“(ii) in the case of an employee who would have been entitled to additional matching contributions had any missed elective deferral been made, the plan sponsor makes a corrective allocation, not later than the deadline specified by the Secretary in regulations or other guidance prescribed under paragraph (3), of matching contributions on behalf of the employee in an amount equal to the additional matching contributions to which the employee would have been so entitled (adjusted to account for earnings had the missed elective deferrals been made).

“(iii) such implementation error is of a type which is so corrected for all similarly situated participants in a nondiscriminatory manner,

“(iv) notice of such error is given to the employee not later than 45 days after the date on which correct deferrals begin, and

“(v) the notice under clause (iv) satisfies such regulations or other guidance as the Secretary prescribes under paragraph (4).

“(3) No obligation for employer to restore missed elective deferrals.—If the requirements of paragraph (2)(B) are satisfied, the employer will not be required to provide eligible employees with the missed amount of elective deferrals resulting from a reasonable administrative error described in paragraph (2)(A)(i) or (ii) through a qualified nonelective contribution, or otherwise.

“(4) Regulations and guidance for favorable correction methods.—The Secretary shall by regulations or other guidance of general applicability prescribe—

“(A) the deadline for making a corrective allocation of matching contributions required by paragraph (2)(B)(ii),

“(B) the content of the notice required by paragraph (2)(B)(iv),

“(C) the manner in which the amount of the corrective allocation under paragraph (2)(B)(ii) is determined,

“(D) the manner of adjustment to account for earnings on matching contributions under paragraph (2)(B)(ii), and

“(E) such other rules as are necessary to carry out the purposes of the subsection.”

“(17) Special rules relating to hardship withdrawals.—For purposes of paragraphs (7) and (11)—

“(A) Amounts which may be withdrawn.—The following amounts may be distributed upon hardship of the employee:

“(i) Contributions made pursuant to a salary reduction agreement (within the meaning of section 3121(a)(5)(D)).

“(ii) Qualified nonelective contributions (as defined in section 401(m)(4)(C)).

“(iii) Qualified matching contributions described in section 401(k)(3)(D)(ii)(I).

“(iv) Earnings on any contributions described in clause (i), (ii), or (iii).

“(B) No requirement to take available loan.—A distribution shall not be treated as failing to be made upon the hardship of an employee solely because the employee does not take any available loan under the plan.”

“(7) Certain deferrals must be roth contributions.—

“(A) In general.—Except as provided in subparagraph (C), in the case of an eligible participant whose wages (as defined in section 3121(a)) for the preceding calendar year from the employer sponsoring the plan exceed $145,000, paragraph (1) shall apply only if any additional elective deferrals are designated Roth contributions (as defined in section 402A(c)(1)) made pursuant to an employee election.

“(B) Roth option.—In the case of an applicable employer plan with respect to which subparagraph (A) applies to any participant for a plan year, paragraph (1) shall not apply to the plan unless the plan provides that any eligible participant may make the participant’s additional elective deferrals as designated Roth contributions.

“(C) Exception.—Subparagraph (A) shall not apply in the case of an applicable employer plan described in paragraph (6)(A)(iv).

“(D) Election to change deferrals.—The Secretary may provide by regulations that an eligible participant may elect to change the participant’s election to make additional elective deferrals if the participant’s compensation is determined to exceed the limitation under subparagraph (A) after the election is made.

“(E) Cost of living adjustment.—In the case of a year beginning after December 31, 2024, the Secretary shall adjust annually the $145,000 amount in subparagraph (A) for increases in the cost-of-living at the same time and in the same manner as adjustments under 415(d); except that the base period taken into account shall be the calendar quarter beginning July 1, 2023, and any increase under this subparagraph which is not a multiple of $5,000 shall be rounded to the next lower multiple of $5,000.”

“(2) any designated Roth contribution which pursuant to the program is made by the employer on the employee’s behalf on account of the employee’s contribution, elective deferral, or (subject to the requirements of section 401(m)(13)) qualified student loan payment shall be treated as a matching contribution for purposes of this chapter, except that such contribution shall not be excludable from gross income,

“(3) any designated Roth contribution which pursuant to the program is made by the employer on the employee’s behalf and which is a nonelective contribution shall be nonforfeitable and shall not be excludable from gross income, and”

“(3) Matching contribution.—The term ‘matching contribution’ means—

“(A) any matching contribution described in section 401(m)(4)(A), and

“(B) any contribution to an eligible deferred compensation plan (as defined in section 457(b)) by an eligible employer described in section 457(e)(1)(A) on behalf of an employee and on account of such employee’s elective deferral under such plan,

“(19) Certain qualified conservation contributions.—

“(A) In general.—In the case of a qualified conservation contribution to which this paragraph applies, no deduction shall be allowed under subsection (a) for such contribution unless the partnership making such contribution—

“(i) includes on its return for the taxable year in which the contribution is made a statement that the partnership made such a contribution, and

“(ii) provides such information about the contribution as the Secretary may require.

“(B) Contributions to which this paragraph applies.—This paragraph shall apply to any qualified conservation contribution—

“(i) the conservation purpose of which is the preservation of any building which is a certified historic structure (as defined in subsection (h)(4)(C)),

“(ii) which is made by a partnership (whether directly or as a distributive share of a contribution of another partnership), and

“(iii) the amount of which exceeds 2.5 times the sum of each partner’s relevant basis (as defined in subsection (h)(7)) in the partnership making the contribution.

“(C) Application to other pass-through entities.—Except as may be otherwise provided by the Secretary, the rules of this paragraph shall apply to S corporations and other pass-through entities in the same manner as such rules apply to partnerships.”