05 Oct 2021
Auto-Savings: Legislative Recommendations Aim to Automate Retirement Plans for Employees
Among the social infrastructure changes proposed by the Ways & Means Committee for the “Build Back Better Agenda” relating to retirement are reforms imposing an excise tax on employers for failing to maintain or facilitate automatic contribution plans or arrangements that enroll workers in IRAs, SIMPLE retirement accounts, or 401(k) retirement plans. The proposal would start employee elective contributions at 6% (adding Sections 414(aa) and 4980J to the Internal Revenue Code). Budget Reconciliation Legislative Recommendations Relating to Retirement, Section 131001. A contemplated excise tax would apply to deter offenders, equal to $10/day/employee during a noncompliance period. The retirement provisions are part of the social infrastructure additions to the budget reconciliation bill, which may include historic changes to both paid family medical leave, the private retirement savings system, and the refundable saver’s credit. See Ways & Means Committee, Markup of the Build Back Better Act, Subtitle B. While the initiative would cost the Fed, a number of tax increases would help pay for the savings initiative and other Build Back Better Agenda social initiatives.
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- Employee Benefits & Executive Compensation Key Legal Developments Tracker
Stay informed on new developments.- Retirement Plans
The DOL, PBGC, and IRS released proposed regulations modifying Form 5500 filing procedures and forms for retirement plans to, among other things: adopt special consolidated reporting rules for SECURE Act pooled employer plans and other filers responsible for multiple-employer plans or closely related plans; enhance plan asset and expense-related disclosures for DC plans and funding disclosures for DB plans; and increase eligibility for small-plan simplified filing rules. 86 Fed. Reg. 51,284 (Sept. 15, 2021) (reporting and disclosure); 86 Fed. Reg. 51,488 (Sept. 15, 2021) (forms revision); see also DOL Fact Sheet. - Health and Welfare Plans
The DOL, PBGC, and IRS released proposed regulations modifying Form M-1 forms and procedures for multiple-employer welfare arrangements (MEWAs) in connection with changes to Form 5500 filing rules. 86 Fed. Reg. 51,284 (Sept. 15, 2021) (reporting and disclosure); 86 Fed. Reg. 51,488 (Sept. 15, 2021) (forms revision); see also DOL Fact Sheet.
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