S 321 — Retirement Security Act of 2019

Summary

Retirement Security Act of 2019 This bill modifies various requirements and tax credits for employer-provided retirement plans. The bill modifies the qualification requirements for certain multiple employer plans with pooled providers. The bill applies to defined contribution plans that (1) are maintained by employers that have a common interest other than having adopted the plan, or (2) have a pooled plan provider. Such a plan that meets specified requirements may not be disqualified or otherwise lose its tax-favored status because a participating employer fails to take actions required with respect to the plan. The bill also (1) permits pooled employer plans that meet certain requirements to be treated under the Employee Retirement Income Security Act of 1974 (ERISA) as a single employee pension benefit plan or single pension plan that is a multiple employer plan, and (2) modifies reporting requirements for pooled employer and multiple employer plans. With respect to 401(k) retirement plans, the bill (1) modifies requirements related to default rates for elective deferrals under automatic enrollment plans, the election of safe harbor 401(k) status, and nondiscrimination rules; (2) allows a business-related safe harbor adoption tax credit for small employers, and (3) requires the Department of the Treasury to simplify regulations regarding the timing of participant notices. The bill also (1) increases the limit on the amount of the tax credit for small employer pension plan startup costs, and (2) allows a business-related tax credit for small employers who include and maintain an automatic contribution arrangement in an employer-sponsored retirement plan.

Bill Text

• Introduced Introduced in Senate Current html February 04, 2019

Compared against current U.S. Code AI-generated reading aid — verify against the official bill.

The bill amends ERISA to clarify the treatment and requirements of pooled employer plans and pooled plan providers.

• 29 U.S.C. 1002(2)

  "(C)" → "(C) A pooled employer plan shall be treated as--\n\n"

  This change establishes a definition for pooled employer plans under ERISA.

• 29 U.S.C. 1002

  "(43) Pooled employer plan.--\n(A) In general.--The term 'pooled employer plan' means a plan--\n(i) which is an individual account plan established or maintained for the purpose of providing benefits to the employees of 2 or more employers;\n(ii) which is a plan described in section 401(a) of the Internal Revenue Code of 1986 which includes a trust exempt from tax under section 501(a) of such Code or a plan that consists of individual retirement accounts described in section 408 of such Code (including by reason of subsection (c) thereof); and\n(iii) the terms of which meet the requirements of subparagraph (B).\nSuch term shall not include a plan maintained by employers which have a common interest other than having adopted the plan.\n(B) Requirements for plan terms.--The requirements of this subparagraph are met with respect to any plan if the terms of the plan--\n(i) designate a pooled plan provider and provide that the pooled plan provider is a named fiduciary of the plan;\n(ii) designate one or more trustees meeting the requirements of section 408(a)(2) of the Internal Revenue Code of 1986 (other than an employer in the plan) to be responsible for collecting contributions to, and holding the assets of, the plan and require such trustees to implement written contribution collection procedures that are reasonable, diligent, and systematic;\n(iii) provide that each employer in the plan retains fiduciary responsibility for--\n(I) the selection and monitoring in accordance with section 404(a) of the person designated as the pooled plan provider and any other person who, in addition to the pooled plan provider, is designated as a named fiduciary of the plan; and\n(II) to the extent not otherwise delegated to another fiduciary by the pooled plan provider and subject to the provisions of section 404(c), the investment and management of the portion of the plan's assets attributable to the employees of the employer (or beneficiaries of such employees);\n(iv) provide that employers in the plan, and participants and beneficiaries, are not subject to unreasonable restrictions, fees, or penalties with regard to ceasing participation, receipt of distributions, or otherwise transferring assets of the plan in accordance with

  This addition establishes criteria for pooled employer plans, enhancing clarity around their operation and fiduciary responsibilities.

• 29 U.S.C. 1002

  "(1) In general.--Except as provided in paragraph (2), if a defined contribution plan to which subsection (c) applies--\n(A) is maintained by employers which have a common interest other than having adopted the plan, or\n(B) in the case of a plan not described in subparagraph (A), has a pooled plan provider, then the plan shall not be treated as failing to meet the requirements under this title applicable to a plan described in section 401(a) or to a plan that consists of individual retirement accounts described in section 408 (including by reason of subsection (c) thereof), whichever is applicable, merely because one or more employers of employees covered by the plan fail to take such actions as are required of such employers for the plan to meet such requirements."

  This defines the qualification requirements for certain multiple employer plans with pooled plan providers.

• 29 U.S.C. 1002

  "(A) In general.--For purposes of this subsection, the term 'pooled plan provider' means, with respect to any plan, a person who--\n(i) is designated by the terms of the plan as a named fiduciary (within the meaning of section 402(a)(2) of the Employee Retirement Income Security Act of 1974), as the plan administrator, and as the person responsible to perform all administrative duties (including conducting proper testing with respect to the plan and the employees of each employer in the plan) which are reasonably necessary to ensure that--\n(I) the plan meets any requirement applicable under the Employee Retirement Income Security Act of 1974 or this title to a plan described in section 401(a) or to a plan that consists of individual retirement accounts described in section 408 (including by reason of subsection (c) thereof), whichever is applicable, and\n(II) each employer in the plan takes such actions as the Secretary or such person determines are necessary for the plan to meet the requirements described in subclause (I), including providing to such person any disclosures or other information which the Secretary may require or which such person otherwise determines are necessary to administer the plan or to allow the plan to meet such requirements."

  This provides a definition of a pooled plan provider and outlines their responsibilities.

Action History

1. February 04, 2019

   Introduced in Senate

2. February 04, 2019

   Read twice and referred to the Committee on Finance. (Sponsor introductory remarks on measure: CR S834-835)

Sponsors

• Susan M. Collins · Primary
• Margaret Wood Hassan · Cosponsor

Subjects