[Congressional Bills 114th Congress]
[From the U.S. Government Publishing Office]
[H.R. 5805 Introduced in House (IH)]
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114th CONGRESS
2d Session
H. R. 5805
To increase portability of and access to retirement savings, and for
other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
July 14, 2016
Mr. Messer (for himself, Ms. Bonamici, and Mr. Neal) introduced the
following bill; which was referred to the Committee on Ways and Means,
and in addition to the Committee on Education and the Workforce, for a
period to be subsequently determined by the Speaker, in each case for
consideration of such provisions as fall within the jurisdiction of the
committee concerned
_______________________________________________________________________
A BILL
To increase portability of and access to retirement savings, and for
other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Retirement Savings Lost and Found
Act of 2016''.
SEC. 2. RETIREMENT SAVINGS LOST AND FOUND.
(a) Establishment.--
(1) In general.--Not later than 2 years after the date of
the enactment of this Act, the Commissioner of Social Security
and the Secretary of the Treasury in cooperation shall
establish an online mechanism to be known as the ``Retirement
Savings Lost and Found'', to be managed by the Director of the
Retirement Savings Lost and Found established under section
3(c) of this Act--
(A) to allow an individual to search for
information that enables the individual to locate the
plan administrator of any plans with respect to which
the individual is a participant or beneficiary, and to
provide contact information for the plan administrator
of any plan described in paragraph (2) with respect to
which the individual may be entitled to a benefit,
(B) to allow such Director to assist such an
individual in locating any plan of the individual, and
(C) to allow such Director to make any necessary
changes to contact information on record for the plan
administrator based on any changes to the plan due to
merger, bankruptcy, termination, or other causes.
(2) Plans described.--A plan described in this paragraph is
a plan to which the vesting standards of section 203 of part 2
of subtitle B of title I of the Employee Retirement Income
Security Act of 1974 apply with respect to any plan year to
which the amendments made by subsection (c)(2)(C) 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 view contact information for
the plan administrator of any plan with respect to which the individual
is a participant or beneficiary, sufficient to allow the individual to
locate the individual's account.
(c) Current Information.--
(1) In general.--Paragraph (2) of section 6057(a) of the
Internal Revenue Code of 1986 is amended--
(A) by redesignating subparagraph (E) as
subparagraph (G),
(B) by striking ``and'' at the end of subparagraph
(D), and
(C) by inserting after subparagraph (D) the
following new subparagraphs:
``(E) the name and taxpayer identifying number of
each participant or former participant in the plan--
``(i) who, during any previous plan year,
was reported under subparagraph (C), and with
respect to whom the benefits described in
subparagraph (C)(ii) were fully paid during the
plan year,
``(ii) with respect to whom any amount was
distributed under section 401(a)(31)(B) during
the plan year, or
``(iii) with respect to whom an annuity
contract was distributed during the plan year,
``(F) in the case of a participant or former
participant to whom subparagraph (E) applies--
``(i) the amount distributed,
``(ii) in the case of a participant
described in clause (ii) thereof, the name and
address of the designated trustee or issuer
described in section 401(a)(31)(B)(i) and the
account number of the individual retirement
plan to which the amount was distributed, and
``(iii) in the case of a participant
described in clause (iii) thereof, the name and
address of the issuer of such annuity contract
and the contract or certificate number, and''.
(2) Rules relating to direct trustee-to-trustee
transfers.--
(A) In general.--Paragraph (6) of section 402(e) of
such Code is amended--
(i) by striking ``transfers.--Any'' and
inserting ``transfers.--
``(A) In general.--Any'', and
(ii) by adding at the end the following new
subparagraph:
``(B) Notification of trustee.--In the case of a
distribution under section 401(a)(31)(B), the plan
administrator shall notify the designated trustee or
issuer described in clause (i) thereof that the
transfer is a mandatory distribution required by such
section.''.
(B) Penalty.--Subsection (i) of section 6652 of
such Code is amended--
(i) by striking ``to Recipients'' in the
heading and inserting ``or Notification'',
(ii) by striking ``402(f),'' and inserting
``402(f) or a notification as required by
section 402(e)(6)(B),'', and
(iii) by striking ``such written
explanation'' and inserting ``such written
explanation or notification''.
(C) Reports.--Subsection (i) of section 408 of such
Code is amended--
(i) by redesignating subparagraphs (A) and
(B) of paragraph (2) as clauses (i) and (ii),
respectively, and by moving such clauses 2 ems
to the right,
(ii) by redesignating paragraphs (1) and
(2) as subparagraphs (A) and (B), respectively,
and by moving such subparagraphs 2 ems to the
right,
(iii) by striking ``as the Secretary
prescribes'' in subparagraph (B)(ii), as so
redesignated, and all that follows through ``a
simple retirement account'' and inserting ``as
the Secretary prescribes.
``(3) Simple retirement accounts.--In the case of a simple
retirement account'',
(iv) by striking ``Reports.--The trustee
of'' and inserting ``Reports.--
``(1) In general.--The trustee of'',
(v) by striking ``under paragraph (2)'' in
paragraph (3), as redesignated by clause (iii),
and inserting ``under paragraph (1)(B)'', and
(vi) by inserting after paragraph
(1)(B)(ii), as redesignated by the preceding
clauses, the following new paragraph:
``(2) Mandatory distributions.--In the case of an account,
contract, or annuity to which a transfer of a distribution
under section 401(a)(31)(B) is made (including a transfer of
such an amount from the individual retirement plan to which the
amount was originally transferred to another individual
retirement plan), the report required by this subsection
shall--
``(A) identify the distribution of such amount as a
mandatory distribution required by such section,
``(B) include the name, address, and taxpayer
identifying number of the trustee or issuer of the
individual retirement plan to which the amount is
transferred, and
``(C) be filed with the Director of the Retirement
Savings Lost and Found established under section 2(a)
of the Retirement Savings Lost and Found Act of 2016 as
well as with the Secretary.''.
(3) Effective date.--The amendments made by this subsection
shall apply to distributions made, and returns and reports the
due date for which is, after the date that is one year after
the date of the enactment of this Act.
(d) Requirement of Electronic Filing.--
(1) In general.--Paragraph (2) of section 6011(e) of the
Internal Revenue Code of 1986 is amended--
(A) by redesignating subparagraphs (A) and (B) as
clauses (i) and (ii), respectively, and by moving such
clauses 2 ems to the right,
(B) by striking ``the requirements of such
regulations'' and all that follows through ``the
Secretary shall require'' and inserting ``the
requirements of such regulations.
``(B) Certain partnerships.--Notwithstanding
subparagraph (A), the Secretary shall require'',
(C) by striking ``regulations.--In prescribing''
and inserting ``regulations.--
``(A) In general.--In prescribing'', and
(D) by adding at the end the following new
subparagraph:
``(C) Exceptions.--Notwithstanding subparagraph
(A), the Secretary shall require returns or reports
required under--
``(i) sections 6057, 6058, and 6059, and
``(ii) sections 408(i), 6041, and 6047 to
the extent such return or report relates to the
tax treatment of a distribution from a plan,
account, contract, or annuity,
to be filed on magnetic media, but only with respect to
persons who are required to file at least 50 returns
during the calendar year that includes the first day of
the plan year to which such returns or reports
relate.''.
(2) Effective date.--The amendments made by this subsection
shall apply to returns and reports the due date for which is
after the date of the enactment of this Act.
(e) Safeguarding Participant Privacy and Security.--In establishing
the Retirement Savings Lost and Found under subsection (a), the
Commissioner of Social Security and the Secretary of the Treasury shall
take all necessary and proper precautions, including consulting with
the Secretary of Health and Human Services, to ensure that
participants' plan information maintained by the Retirement Savings
Lost and Found is protected and that persons other than the participant
cannot fraudulently claim the benefits to which any participant is
entitled, and to allow any participant to opt out of inclusion in the
Lost and Found at the election of the participant.
SEC. 3. MANDATORY TRANSFERS OF ROLLOVER DISTRIBUTIONS.
(a) Investment Options.--
(1) In general.--Subparagraph (B) of section 404(c)(3) of
the Employee Retirement Income Security Act of 1974 (29 U.S.C.
1104(c)(3)) is amended by inserting ``, and, to the extent the
Secretary provides in guidance or regulations issued after the
enactment of the Retirement Savings Lost and Found Act of 2016,
is made to a target date or life cycle fund or to such other
option as the Secretary may so provide'' before the period.
(2) Regulations.--Not later than 180 days after the date of
the enactment of this Act, the Secretary of Labor shall
promulgate regulations identifying the target date or life
cycle funds, or specifying the characteristics of a target date
or life cycle fund, that will be deemed to meet the
requirements of section 404(c)(3)(B) of the Employee Retirement
Income Security Act of 1974 (29 U.S.C. 1104(c)(3)(B)), as
amended by paragraph (1).
(b) Expansion of Cap; Authority To Transfer Lesser Amounts.--
(1) In general.--Clause (ii) of section 401(a)(31)(B) of
the Internal Revenue Code of 1986 is amended by striking
``$5,000'' and inserting ``$6,000''.
(2) Lesser amounts.--Subparagraph (B) of section 401(a)(31)
of such Code is amended by adding at the end the following new
clauses:
``(iii) Transfers of lesser amounts to
retirement savings lost and found or
treasury.--In the case of a trust which is part
of an eligible plan, such trust shall not be a
qualified trust under this section unless such
plan provides that if--
``(I) a participant in the plan
separates from the service covered by
the plan and the deferred vested
benefit to which such participant is
entitled is not in excess of $1,000,
and
``(II) the participant does not
make an election under subparagraph (A)
and does not elect to receive the
distribution directly,
the plan administrator shall, after notifying
the participant that the participant is
entitled to such benefit, transfer the amount
of such benefit to the Director of the
Retirement Savings Lost and Found in accordance
with section 3(c)(2) of the Retirement Savings
Lost and Found Act of 2016, or to an individual
retirement account (as defined in section
408(a)) established by the Secretary. Such
transfer shall not be made before the later of
the date that is 6 months after the date on
which the participant receives the notification
required under the preceding sentence, or, if
the plan administrator attempts to pay the
distribution to the participant directly but
the participant has not claimed the
distribution, the date that is 6 months after
the date on which the attempted payment was
sent to the participant.
``(iv) Income tax treatment of transfers to
retirement savings lost and found.--For
purposes of determining the income tax
treatment of transfers to the Director of the
Retirement Savings Lost and Found under clause
(iii)--
``(I) such a transfer shall be
treated as a transfer to an individual
retirement plan under clause (i), and
``(II) the distribution of such
amounts by the Director of the
Retirement Savings Lost and Found shall
be treated as a distribution from an
individual retirement plan.
``(v) Notification to retirement savings
lost and found.--In the case of a trust which
is part of an eligible plan, if a participant
in the plan separates from the service covered
by the plan, the plan administrator shall
report--
``(I) the total amount of the
deferred vested benefit to which the
participant is entitled, and
``(II) the amount of any
distribution of such benefit made to
and claimed by the participant,
to the Director of the Retirement Savings Lost
and Found for purposes of the Retirement
Savings Lost and Found established under
section 2(a) of the Retirement Savings Lost and
Found Act of 2016.''.
(c) Office of the Retirement Savings Lost and Found.--
(1) In general.--Not later than one year after the date of
the enactment of this Act, the Commissioner of Social Security
and the Secretary of the Treasury shall establish within the
appropriate agency or subdivision thereof an Office of the
Retirement Savings Lost and Found, to be administered by a
Director of the Retirement Savings Lost and Found who (without
regard to the agency or subdivision where such Office is
established) shall report to both such Commissioner and such
Secretary.
(2) Responsibilities of director.--
(A) In general.--In addition to administering the
Retirement Savings Lost and Found under section 2, the
Director of the Retirement Savings Lost and Found
established under this subsection shall--
(i) invest any amount transferred under
section 401(a)(31)(B)(iii) of the Internal
Revenue Code of 1986 in United States Treasury
securities; and
(ii) upon application filed by the
participant or beneficiary in such form and
manner as may be prescribed in regulations, pay
to the participant or beneficiary the amount
transferred (or the appropriate survivor
benefit) either--
(I) in a single sum (plus
interest), or
(II) in such other form as is
specified in regulations; and
(iii) identify such amount as eligible to
be paid into an eligible retirement plan
described in section 402(c)(8)(B) of the
Internal Revenue Code of 1986.
(B) Option to contract.--The Director of the
Retirement Savings Lost and Found may contract with a
third party to carry out the responsibilities under
subparagraph (A).
(d) Effective Dates.--
(1) In general.--Except as provided in paragraph (2), the
amendments made by this section shall apply to distributions
made after the date that is 2 years after the date of the
enactment of this Act.
(2) Mandatory transfer of vested benefits.--The amendments
made by subsection (b) shall apply to vested benefits with
respect to participants who separate from service connected to
the plan before, on, or after the date that is 2 years after
the date of the enactment of this Act.
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