The Chairman and the top Democrat on the Senate Finance Committee today reintroduced legislation that aims to encourage more people to save more money for retirement and authorizes more flexible multiple employer plans. The "Retirement Enhancement and Savings Act" (RESA) incorporates a wide variety of changes to the Employee Retirement Income Security Act (ERISA) and the Internal Revenue Code.

The 131-page bill, enrolled as S. 2526, is sponsored by Sens. Orrin Hatch (R-UT) and Ron Wyden (D-OR), and would generally be effective for years beginning after December 31, 2018. It differs in some ways from the original version introduced in November 2016. A summary issued by the Finance Committee explains that the new bill includes certain technical changes, including the following:

Technical modification to ERISA fiduciary safe harbor for selection of lifetime income provider (section 204): The first sentence of the safe harbor is modified by replacing "selection of an insurer and a guaranteed retirement income contract" with "selection of an insurer for a guaranteed retirement income contract." This one-word change clarifies that the safe harbor is solely for the selection of the insurer and the possibility that the insurer may not be able to make payments due under the contract.

The updated bill also omits several provisions because of previously enacted legislation. These deletions include: the lengthened rollover period for plan loan offsets; modified 401(k) hardship withdrawal rules; tax treatment of "qualified equity grants"; and repeal of partnership technical terminations.

Aside from the changes noted above, the bill includes the following 34 major provisions, as excerpted from the Finance Committee section-by-section summary:

• Sections 101 and 102. Increase Access for Workers in Small Companies to Retirement Plans by Authorizing Multiple Employer Defined Contribution Plans. (sec. 413 of the Code and secs. 3 and 103-104 of ERISA)
• Section 103. Expand Retirement Savings by Removing Auto Enrollment Safe Harbor Cap (sec. 401(k) of the Code)
• Section 104. Simplification of Safe Harbor 401(k) Rules (sec. 401(k) of the Code)
• Section 105. Increase Credit Limitation for Small Employer Pension Plan Start-Up Costs (sec. 45E of the Code)
• Section 106. Small Employer Automatic Enrollment Credit (new sec. 45S of the Code)
• Section 107. Treat Certain Taxable Non-Tuition Fellowship and Stipend Payments as Compensation for IRA Purposes (sec. 219 of the Code)
• Section 108. Repeal of Maximum Age for Traditional IRA Contributions (sec. 219 of the Code)
• Section 109. Expansion of IRA Ownership of S Corporation Bank Stock (secs. 1361 and 4975 of the Code)
• Section 110. Qualified Employer Plans Prohibited from Making Loans through Credit Cards and Other Similar Arrangements (sec. 72(p) of the Code)
• Section 111. Portability of Lifetime Income Options (secs. 401(a), 403(b) and 457(d) of the Code)
• Section 112. Treatment of Custodial Accounts on Termination of Section 403(b) Plans (sec. 403(b) of the Code)
• Section 113. Clarification of Retirement Income Account Rules Relating to Church-Controlled Organizations (sec. 403(b)(9) of the Code)
• Section 201. Plans Adopted by Filing Due Date for Year May Be Treated as in Effect as of Close of Year (sec. 401(b) of the Code)
• Section 202. Combined Annual Reports for Group of Plans (sec. 6058 of the Code and sec. 104 of ERISA)
• Section 203. Disclosure Regarding Lifetime Income (sec. 105 of ERISA)
• Section 204. Fiduciary Safe Harbor for Selection of Lifetime Income Provider (sec. 404 of ERISA)
• Section 205. Modification of Nondiscrimination Rules to Protect Older, Longer Service Participation (sec. 401(a)(4) of the Code)
• Section 206. Modification of PBGC Premiums for CSEC Plans (sec. 4006 of ERISA)
• Sections 301 – 308. Benefits Relating to United States Tax Court
• Section 401. Benefits for Volunteer Firefighters and Emergency Medical Responders (sec. 139B of the Code)
• Section 501. Modifications to Required Minimum Distribution Rules (sec. 401(a)(9) of the Code)
• Section 502. Increase in Penalty for Failure to File (sec. 6651(a) of the Code)
• Section 503. Increased Penalties for Failure to File Retirement Plan Returns (sec. 6652(d), (e), and (h) of the Code)
• Section 504. Modification of User Fee Requirements for Installment Agreements (sec. 6159 of the Code)
• Section 505. Increase Information Sharing to Administer Excise Taxes (sec. 6103(o) of the Code)
• Section 506. Pension Plan Acceleration of PBGC Premium Payment (sec. 4007 of ERISA)

​The full text of the bill summary is posted here. The bill's legislative text is posted here.

In November 2016, the Senate Finance Committee reported the RESA legislation to the Senate floor unanimously. However, no further action occurred on the bill (then introduced as S. 3471), which lapsed at the close of the 114th Congress.

Chairman Hatch has not yet indicated when the Finance Committee may consider this new version of the bill.

The information contained in this communication is not intended as legal advice or as an opinion on specific facts. This information is not intended to create, and receipt of it does not constitute, a lawyer-client relationship. For more information, please contact one of the senders or your existing Miller & Chevalier lawyer contact. The invitation to contact the firm and its lawyers is not to be construed as a solicitation for legal work. Any new lawyer-client relationship will be confirmed in writing.

This, and related communications, are protected by copyright laws and treaties. You may make a single copy for personal use. You may make copies for others, but not for commercial purposes. If you give a copy to anyone else, it must be in its original, unmodified form, and must include all attributions of authorship, copyright notices, and republication notices. Except as described above, it is unlawful to copy, republish, redistribute, and/or alter this presentation without prior written consent of the copyright holder.