HR5887-119

2. Findings Congress finds as follows: 3 out of 10 private-sector workers lack access to any workplace retirement plan, according to a Bureau of Labor Statistics report from a 2023 report. A retirement study conducted by the Government Accountability Office found that 48 percent of households age 55 and older have no retirement savings in a defined contribution plan or individual retirement account, and nearly 30 percent of households age 55 and older have no retirement savings and no defined benefit plan. A 2022 report on the economic well-being of United States households conducted by the Federal Reserve found that 28 percent of non-retirees reportedly did not have any retirement savings, and that 60 percent of non-retirees with self-directed retirement accounts expressed low levels of confidence in their ability to make the right investment decisions when investing in such accounts.

3. Universal personal savings Subtitle B of title I of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1021 et seq.) is amended by adding at the end the following: For purposes of this part: The term applicable employer means an employer— with at least 10 full-time equivalent employees; and that has employed at least 10 full-time equivalent employees for not less than 2 years. The term Board means the Federal Universal Personal Savings Investment Board established under section 803. The term employee, unless specified otherwise, includes full-time and part-time employees of an applicable employer. The term Executive Director means the Executive Director of the UP Account Board appointed under section 803. The term full time, with respect to employment, means 40 hours per week. The term full-time equivalent employee means the sum of— the number of employees working full time; and the full-time equivalent of the number of employees working part-time, as defined and calculated in the manner determined most appropriate by the Secretary. Beginning in the first full taxable year following the date of enactment of the Saving for the Future Act, each applicable employer shall contribute to a qualifying plan, on behalf of each employee that is not enrolled in an active, defined benefit pension plan sponsored by such employer, the applicable minimum amount described in paragraph (2). For the first year in which the requirements of paragraph (1) apply, and the 1 year immediately following such first year, the minimum amount an applicable employer is required to contribute for each full-time employee is $0.50 per hour worked by the employee. For the 2 years immediately following the period during which subparagraph (A) applies, the minimum amount an applicable employer is required to contribute for each full-time employee is $.60 per hour worked by the employee. The Secretary shall increase the amounts described in subparagraph (B) for the year immediately following the period during which subparagraph (B) applies, and every 3 years thereafter, by an amount proportional to growth in average nonsupervisory wages. In the case of an applicable employer that is found to be in violation of the requirement under paragraph (1), such employer shall be required to make the contributions required under paragraph (1), plus interest, at an interest rate set by the Secretary through rulemaking. Each applicable employer shall provide a pension plan for all employees. The pension plan required under paragraph (1)— in the case of an applicable employer with 100 or more full-time equivalent employees, shall be an employer plan, which may be a plan described in section 401(k) of the Internal Revenue Code of 1986, defined benefit pension plan, or any other plan described in section 219(g)(5) of the Internal Revenue Code of 1986; and in the case of an applicable employer with fewer than 100 full-time equivalent employees, shall be a plan described in subparagraph (A), a simple retirement account under section 408(p) of the Internal Revenue Code of 1986 or an automatic payroll deduction individual retirement account or multiple employer plan, including any current or prospective State-established and-facilitated payroll deduction or automatic individual retirement account, or an UP Account described in section 804; or in the case of an applicable employer who does not provide an employer contribution but offers a State-established or-facilitated program described in subparagraph (A)(ii), such employer shall provide an UP Retirement Account to which the employer makes contributions, and any employee contributions shall be directed to the State plan. In the case of an applicable employer that offers a UP Retirement Account plan and any other type of plan described in subparagraph (A)(i), (A)(ii), or (B), as applicable, of paragraph (2), to employees, with respect to employees for whom the employer is not required under this Act to offer participation in such other type of plan, the requirements of this part may be met by allowing such employees to participate in such other plan. The board shall develop a standard notice that employers with fewer than 10 workers electing not to make contributions are required to provide to each employee upon hire, and annually thereafter. Such notice shall provide instructions on how to set up an account, make contributions, and claim the individual credit under section 25BB of the Internal Revenue Code of 1986. There is established a Federal Universal Personal Savings Investment Board, an independent government agency for the purpose of overseeing UP Accounts. The President shall appoint, by and with the consent of the Senate, 5 members to serve on the Board. Such members shall have substantial experience, training, and expertise in the management of financial investments and pension benefit plans. The Board shall hire an Executive Director of the Board. Each member shall serve a term of 5 years, except that, of the members first appointed, one shall serve a term of 1 year, one shall serve a term of 2 years, one shall serve a term of 3 years, one shall serve a term of 4 years, and one shall serve a term of 5 years. Each member of the Board may serve up to 2 consecutive terms. Administrative expenses incurred to carry out this part shall be paid first out net earnings in the UP Account Fund. There is established in the Treasury of the United States a UP Account Fund. The UP Account Fund shall consist of all amounts contributed by participants, and employees on behalf of participants, into UP Retirement Accounts and UP Savings Accounts, increased by the total net earnings from investments of sums in the UP Account Fund or reduced by the total net losses from investments of the UP Account Fund, and reduced by the total amount of payments made from the UP Account Fund (including payments for administrative expenses). The sums in the UP Account Fund are appropriated and shall remain available without fiscal year limitation— to invest in accordance with section 805(h); to pay benefits or purchase annuity contracts under this subchapter; and to pay administrative expenses. The Board shall establish UP Retirement Accounts that are portable, defined contribution pension plans. For purposes of this subsection— the term eligible rollover distribution has the meaning given such term by section 402(c)(4) of the Internal Revenue Code of 1986; and the term qualified trust has the meaning given such term by section 402(c)(8) of the Internal Revenue Code of 1986. A participant may contribute to the UP Retirement Account an eligible rollover that a qualified trust could accept under the Internal Revenue Code of 1986. A contribution made under this subsection shall be made in the form described in section 401(a)(31) of the Internal Revenue Code of 1986. In the case of an eligible rollover distribution, the maximum amount transferred to the UP Account Fund shall not exceed the amount which would otherwise have been included in the participant's gross income for Federal income tax purposes. The Executive Director shall prescribe regulations to carry out this subsection. The Board shall contract with one or more private investment firms to administer the UP Accounts. The Board shall contract with multiple private investment firms, as necessary to ensure that no single firm administers more than $500,000,000,000 in UP Account assets. An employee is eligible to participate in a UP Retirement Account if— the employee's employer establishes a UP Retirement Account on the employee's behalf; or the employee demonstrates to the Board that the employee works for a employer that is not an applicable employer. An individual who becomes a participant in a UP Retirement Account as described in paragraph (1) may maintain such account and may continue to make individual contributions to such account, regardless of such individual's subsequent employment status, provided that the individual is not a participant in another plan described in section 802(b)(2). The Board shall provide participants with a quarterly statement explaining each participant's projected income in retirement under different distribution scenarios and identifying the total dollar amount paid in fees for the year. Applicable employers making contributions required under section 802 to a UP Retirement Account shall auto-enroll all employees in such an account with an employee contribution that is equal to 4 percent of the employee's wages, with the option for any such employee to elect a different employee contribution level or to opt out of such account at any time. Employees making contributions to a UP Retirement Account shall have their contributions automatically escalated by half a percentage point at the conclusion of each full year during which such employer is so enrolled, until reaching the level of a 10 percent employee contribution. Any employee may opt out of such automatic escalation. In the case of an employee who was enrolled in a UP Retirement Account through one employer and subsequently ceases to work for such employer, if the employee subsequently is employed by another applicable employer, the employee's default contribution level under this paragraph shall be the same level that it was on the last day of employment with the previous employer. Applicable employers may contribute more to an employee's UP Retirement Account than is required under section 802, but may not contribute more than 1/2 the amount in effect under section 402(g)(1)(B) of the Internal Revenue Code of 1986 for the taxable year. Any employer matching requirements under this part shall apply to any employer contributions that are in addition to the minimum employer contribution. An applicable employer’s fiduciary duties with respect to an employee's UP Retirement Account extend only to the full and timely payment of contributions to their employees’ UP Retirement Accounts. For all other purposes, the members of the Board are the fiduciaries of such accounts. The Executive Director shall establish and maintain an account for each individual who makes contributions or for whom contributions are made under this section. The balance in a participant's account at any time is the excess of— the sum of— all contributions made to the UP Retirement Account by the participant; all contributions made to such Account for the benefit of the participant; and the total amount of the allocations made to and reductions made in the account pursuant to paragraph (3), over the amounts paid out of the UP Retirement Account with respect to such participant. Pursuant to regulations prescribed by the Executive Director, the Executive Director shall allocate to each account an amount equal to a pro rata share of the net earnings and net losses from each investment of sums in the UP Account Fund attributable to sums credited to such account, reduced by an appropriate share of the administrative expenses paid out of the net earnings, as determined by the Executive Director. The following investment rules shall apply with respect to a UP Retirement Account: The Board shall make available a reasonable menu of investment products, including low-fee index funds, sufficient to provide participants with the opportunity to diversify their UP Retirement Accounts in order to minimize the risk of large losses. The default investment option for participants shall minimize fees, be diversified, and automatically reduce risk to the participant as the participant approaches retirement age. UP Retirement Accounts shall allow participants to change or customize investment allocation. The board shall select investments solely in the interests of participants and beneficiaries and for the exclusive purpose of providing benefits and deferring reasonable expenses with the prevailing care, skill, prudence, and diligence that a prudent individual acting in a like capacity and familiar with such matters would use. The Board shall ensure that investors are offered forms of distribution that include— monthly income for life for the participant or surviving spouse, if applicable; monthly income until the normal or maximum Social Security retirement age for the participant or surviving spouse, if applicable; and automatic, regular withdrawals, under which a set percentage of initial capital is withdrawn each year, on a monthly basis. In case of death of a participant, a lump sum shall be paid to designated beneficiary. In addition to a standard UP Retirement Account under section 805, a participant may maintain a UP Savings Account, established by the Board, and designed as safe, short-to medium-term savings vehicles. Participants may make contributions to their UP Savings Account until the account reaches the maximum balance amount described in paragraph (1). Any contributions a participant wishes to make after the participant's account reaches such maximum balance amount shall be credited to the participant's UP Retirement Account established under section 805. A UP Savings Account may grow past the maximum balance amount due to accumulation without penalty. The Board shall establish the maximum balance amount for purposes of paragraph (1) as follows: For the first fiscal year that begins after the date of enactment of the Saving for the Future Act, the maximum balance amount shall be $2,500. For fiscal year immediately following the fiscal year described in subparagraph (A), and each fiscal year thereafter, the Board shall increase the maximum balance amount from the previous year, in increments of $100 that most closely reflects the average wage growth during the applicable 12-month period. Any contributions a participant makes pursuant to accounts established under this part shall be credited to the participant's UP Savings Account, until such has reached the maximum balance amount, unless the participant specifies otherwise. Once the maximum balance is reached, additional contributions will go to a participant's UP Retirement Account. The Board may invest contributions to UP Savings Accounts only in cash, money market funds, certificates of deposit, or government bonds. Participants may withdraw amounts from their UP Savings Account when experiencing a specific financial situation that requires a non-routine use of money, as determined by the Board (in rules similar to the rules governing hardship distributions from a trust described in section 401(a) of the Internal Revenue Code of 1986 which is exempt from taxation under section 501(a) of such Code). Such situations may include a major reduction in earnings, an on-the-job injury, disability, family or medical leave, a large medical bill, the down payment for a home, and the beginning of a training or educational experience. The Board shall determine the rules regarding such withdrawals, including allowable needs, and demonstration of the need, but shall not impose a withdrawal penalty or impose a repayment requirement. Loans to investors shall not be permitted. Any pension plan may offer a safe, short-to medium-term savings account with terms similar to the terms that apply to UP Savings Accounts described in this section. For purposes of this Act, any such account shall be considered part of the pension plan. For purposes of the Internal Revenue Code of 1986— the UP Account Fund shall be treated as a trust described in section 401(a) of such Code which is exempt from taxation under section 501(a) of such Code; any contribution to, or distribution from, the UP Account Fund shall be treated in the same manner as contributions to or distributions from such a trust; and subject to section 401(k)(4)(B) of such Code and any dollar limitation on the application of section 402(a)(8) of such Code, contributions to the UP Account Fund shall not be treated as distributed or made available to an employee or Member nor as a contribution made to the Fund by an employee or Member merely because the employee or Member has, under the provisions of this part, an election whether the contribution will be made to the UP Account Fund or received by the employee or Member in cash. Notwithstanding any other provision of law, the UP Account Fund is not subject to the nondiscrimination requirements applicable to arrangements described in section 401(k) of the Internal Revenue Code of 1986, or to matching contributions (as described in section 401(m) of such Code), so long as it meets the requirements of this section. Subsection (a) shall not be construed to provide that any amount of the employee's or Member's basic pay which is contributed to the UP Account Fund shall not be included in the term wages for the purposes of section 209 of the Social Security Act or section 3121(a) of the Internal Revenue Code of 1986. For purposes of this section— the term qualified Roth contribution program means a program described in paragraph (1) of section 402A(b) of the Internal Revenue Code of 1986 which meets the requirements of paragraph (2) of such section; and the terms designated Roth contribution and elective deferral have the meanings given such terms in section 402A of the Internal Revenue Code of 1986. The Executive Director shall by regulation provide for the inclusion in the UP Accounts of a qualified Roth contribution program, under such terms and conditions as the Board may prescribe. The regulations under subsection (b) shall include— provisions under which an election to make designated Roth contributions may be made by any individual who is eligible to make contributions to a UP Account under section 805(d); and any other provisions which may be necessary to carry out this section. The rules on survivor annuities under subchapter IV of chapter 84 of title 5, United States Code, that are applicable to the Thrift Savings Plan, shall apply to UP Accounts. The Executive Director shall promulgate regulations to provide for the application of such rules to UP Accounts, as appropriate. The table of contents in section 1 of the Employee Retirement Income Security Act of 1974 is amended by inserting after the item relating to section 734 the following new items: 8Universal Personal Savings801.DefinitionsFor purposes of this part:(1)Applicable employerThe term applicable employer means an employer—(A)with at least 10 full-time equivalent employees; and(B)that has employed at least 10 full-time equivalent employees for not less than 2 years.(2)BoardThe term Board means the Federal Universal Personal Savings Investment Board established under section 803.(3)EmployeeThe term employee, unless specified otherwise, includes full-time and part-time employees of an applicable employer.(4)Executive DirectorThe term Executive Director means the Executive Director of the UP Account Board appointed under section 803.(5)Full timeThe term full time, with respect to employment, means 40 hours per week.(6)Full-time equivalent employeeThe term full-time equivalent employee means the sum of—(A)the number of employees working full time; and(B)the full-time equivalent of the number of employees working part-time, as defined and calculated in the manner determined most appropriate by the Secretary.802.Employer contribution requirements(a)Minimum employer contribution(1)In generalBeginning in the first full taxable year following the date of enactment of the Saving for the Future Act, each applicable employer shall contribute to a qualifying plan, on behalf of each employee that is not enrolled in an active, defined benefit pension plan sponsored by such employer, the applicable minimum amount described in paragraph (2).(2)Minimum employer contribution(A)Initial amountsFor the first year in which the requirements of paragraph (1) apply, and the 1 year immediately following such first year, the minimum amount an applicable employer is required to contribute for each full-time employee is $0.50 per hour worked by the employee.(B)Third and fourth yearsFor the 2 years immediately following the period during which subparagraph (A) applies, the minimum amount an applicable employer is required to contribute for each full-time employee is $.60 per hour worked by the employee.(C)Subsequent yearsThe Secretary shall increase the amounts described in subparagraph (B) for the year immediately following the period during which subparagraph (B) applies, and every 3 years thereafter, by an amount proportional to growth in average nonsupervisory wages.(3)NoncomplianceIn the case of an applicable employer that is found to be in violation of the requirement under paragraph (1), such employer shall be required to make the contributions required under paragraph (1), plus interest, at an interest rate set by the Secretary through rulemaking.(b)Qualifying plans(1)In generalEach applicable employer shall provide a pension plan for all employees.(2)Types of plansThe pension plan required under paragraph (1)—(A)(i)in the case of an applicable employer with 100 or more full-time equivalent employees, shall be an employer plan, which may be a plan described in section 401(k) of the Internal Revenue Code of 1986, defined benefit pension plan, or any other plan described in section 219(g)(5) of the Internal Revenue Code of 1986; and(ii)in the case of an applicable employer with fewer than 100 full-time equivalent employees, shall be a plan described in subparagraph (A), a simple retirement account under section 408(p) of the Internal Revenue Code of 1986 or an automatic payroll deduction individual retirement account or multiple employer plan, including any current or prospective State-established and-facilitated payroll deduction or automatic individual retirement account, or an UP Account described in section 804; or(B)in the case of an applicable employer who does not provide an employer contribution but offers a State-established or-facilitated program described in subparagraph (A)(ii), such employer shall provide an UP Retirement Account to which the employer makes contributions, and any employee contributions shall be directed to the State plan.(3)Clarification of employer obligations with respect to certain employeesIn the case of an applicable employer that offers a UP Retirement Account plan and any other type of plan described in subparagraph (A)(i), (A)(ii), or (B), as applicable, of paragraph (2), to employees, with respect to employees for whom the employer is not required under this Act to offer participation in such other type of plan, the requirements of this part may be met by allowing such employees to participate in such other plan.(c)Standard noticeThe board shall develop a standard notice that employers with fewer than 10 workers electing not to make contributions are required to provide to each employee upon hire, and annually thereafter. Such notice shall provide instructions on how to set up an account, make contributions, and claim the individual credit under section 25BB of the Internal Revenue Code of 1986.803.UP Account Board(a)Establishment of BoardThere is established a Federal Universal Personal Savings Investment Board, an independent government agency for the purpose of overseeing UP Accounts.(b)Membership(1)Appointment of membersThe President shall appoint, by and with the consent of the Senate, 5 members to serve on the Board. Such members shall have substantial experience, training, and expertise in the management of financial investments and pension benefit plans.(2)Executive directorThe Board shall hire an Executive Director of the Board.(3)TermsEach member shall serve a term of 5 years, except that, of the members first appointed, one shall serve a term of 1 year, one shall serve a term of 2 years, one shall serve a term of 3 years, one shall serve a term of 4 years, and one shall serve a term of 5 years. Each member of the Board may serve up to 2 consecutive terms.(c)FundingAdministrative expenses incurred to carry out this part shall be paid first out net earnings in the UP Account Fund.804.UP Account Fund(a)In generalThere is established in the Treasury of the United States a UP Account Fund.(b)FundsThe UP Account Fund shall consist of all amounts contributed by participants, and employees on behalf of participants, into UP Retirement Accounts and UP Savings Accounts, increased by the total net earnings from investments of sums in the UP Account Fund or reduced by the total net losses from investments of the UP Account Fund, and reduced by the total amount of payments made from the UP Account Fund (including payments for administrative expenses).(c)Permissible uses of fundsThe sums in the UP Account Fund are appropriated and shall remain available without fiscal year limitation—(1)to invest in accordance with section 805(h);(2)to pay benefits or purchase annuity contracts under this subchapter; and(3)to pay administrative expenses.805.UP Retirement Accounts(a)In generalThe Board shall establish UP Retirement Accounts that are portable, defined contribution pension plans.(b)Rollovers(1)DefinitionsFor purposes of this subsection—(A)the term eligible rollover distribution has the meaning given such term by section 402(c)(4) of the Internal Revenue Code of 1986; and(B)the term qualified trust has the meaning given such term by section 402(c)(8) of the Internal Revenue Code of 1986.(2)RolloversA participant may contribute to the UP Retirement Account an eligible rollover that a qualified trust could accept under the Internal Revenue Code of 1986. A contribution made under this subsection shall be made in the form described in section 401(a)(31) of the Internal Revenue Code of 1986. In the case of an eligible rollover distribution, the maximum amount transferred to the UP Account Fund shall not exceed the amount which would otherwise have been included in the participant's gross income for Federal income tax purposes.(3)RegulationsThe Executive Director shall prescribe regulations to carry out this subsection.(c)AdministrationThe Board shall contract with one or more private investment firms to administer the UP Accounts. The Board shall contract with multiple private investment firms, as necessary to ensure that no single firm administers more than $500,000,000,000 in UP Account assets.(d)Individual eligibility(1)In generalAn employee is eligible to participate in a UP Retirement Account if—(A)the employee's employer establishes a UP Retirement Account on the employee's behalf; or(B)the employee demonstrates to the Board that the employee works for a employer that is not an applicable employer.(2)Maintenance of accountAn individual who becomes a participant in a UP Retirement Account as described in paragraph (1) may maintain such account and may continue to make individual contributions to such account, regardless of such individual's subsequent employment status, provided that the individual is not a participant in another plan described in section 802(b)(2).(e)Quarterly statementsThe Board shall provide participants with a quarterly statement explaining each participant's projected income in retirement under different distribution scenarios and identifying the total dollar amount paid in fees for the year.(f)Employee and employer contributions(1)Employee contributions(A)In generalApplicable employers making contributions required under section 802 to a UP Retirement Account shall auto-enroll all employees in such an account with an employee contribution that is equal to 4 percent of the employee's wages, with the option for any such employee to elect a different employee contribution level or to opt out of such account at any time.(B)Auto-escalationEmployees making contributions to a UP Retirement Account shall have their contributions automatically escalated by half a percentage point at the conclusion of each full year during which such employer is so enrolled, until reaching the level of a 10 percent employee contribution. Any employee may opt out of such automatic escalation.(C)Default elections in the case of changes in employmentIn the case of an employee who was enrolled in a UP Retirement Account through one employer and subsequently ceases to work for such employer, if the employee subsequently is employed by another applicable employer, the employee's default contribution level under this paragraph shall be the same level that it was on the last day of employment with the previous employer.(2)Employer contributions(A)In generalApplicable employers may contribute more to an employee's UP Retirement Account than is required under section 802, but may not contribute more than 1/2 the amount in effect under section 402(g)(1)(B) of the Internal Revenue Code of 1986 for the taxable year.(B)Default rulesAny employer matching requirements under this part shall apply to any employer contributions that are in addition to the minimum employer contribution.(C)Fiduciary dutiesAn applicable employer’s fiduciary duties with respect to an employee's UP Retirement Account extend only to the full and timely payment of contributions to their employees’ UP Retirement Accounts. For all other purposes, the members of the Board are the fiduciaries of such accounts.(g)Participant accounts(1)In generalThe Executive Director shall establish and maintain an account for each individual who makes contributions or for whom contributions are made under this section.(2)BalancesThe balance in a participant's account at any time is the excess of—(A)the sum of—(i)all contributions made to the UP Retirement Account by the participant;(ii)all contributions made to such Account for the benefit of the participant; and(iii)the total amount of the allocations made to and reductions made in the account pursuant to paragraph (3), over(B)the amounts paid out of the UP Retirement Account with respect to such participant.(3)AdjustmentsPursuant to regulations prescribed by the Executive Director, the Executive Director shall allocate to each account an amount equal to a pro rata share of the net earnings and net losses from each investment of sums in the UP Account Fund attributable to sums credited to such account, reduced by an appropriate share of the administrative expenses paid out of the net earnings, as determined by the Executive Director.(h)InvestmentsThe following investment rules shall apply with respect to a UP Retirement Account:(1)The Board shall make available a reasonable menu of investment products, including low-fee index funds, sufficient to provide participants with the opportunity to diversify their UP Retirement Accounts in order to minimize the risk of large losses.(2)The default investment option for participants shall minimize fees, be diversified, and automatically reduce risk to the participant as the participant approaches retirement age.(3)UP Retirement Accounts shall allow participants to change or customize investment allocation.(4)The board shall select investments solely in the interests of participants and beneficiaries and for the exclusive purpose of providing benefits and deferring reasonable expenses with the prevailing care, skill, prudence, and diligence that a prudent individual acting in a like capacity and familiar with such matters would use.(i)Distributions(1)In generalThe Board shall ensure that investors are offered forms of distribution that include—(A)monthly income for life for the participant or surviving spouse, if applicable;(B)monthly income until the normal or maximum Social Security retirement age for the participant or surviving spouse, if applicable; and(C)automatic, regular withdrawals, under which a set percentage of initial capital is withdrawn each year, on a monthly basis.(2)Death of participantIn case of death of a participant, a lump sum shall be paid to designated beneficiary.806.UP Savings Accounts(a)In generalIn addition to a standard UP Retirement Account under section 805, a participant may maintain a UP Savings Account, established by the Board, and designed as safe, short-to medium-term savings vehicles.(b)Contributions; maximum balance(1)In generalParticipants may make contributions to their UP Savings Account until the account reaches the maximum balance amount described in paragraph (1). Any contributions a participant wishes to make after the participant's account reaches such maximum balance amount shall be credited to the participant's UP Retirement Account established under section 805. A UP Savings Account may grow past the maximum balance amount due to accumulation without penalty.(2)Increased amountsThe Board shall establish the maximum balance amount for purposes of paragraph (1) as follows:(A)For the first fiscal year that begins after the date of enactment of the Saving for the Future Act, the maximum balance amount shall be $2,500.(B)For fiscal year immediately following the fiscal year described in subparagraph (A), and each fiscal year thereafter, the Board shall increase the maximum balance amount from the previous year, in increments of $100 that most closely reflects the average wage growth during the applicable 12-month period.(3)Default ruleAny contributions a participant makes pursuant to accounts established under this part shall be credited to the participant's UP Savings Account, until such has reached the maximum balance amount, unless the participant specifies otherwise. Once the maximum balance is reached, additional contributions will go to a participant's UP Retirement Account.(c)InvestmentThe Board may invest contributions to UP Savings Accounts only in cash, money market funds, certificates of deposit, or government bonds.(d)WithdrawalsParticipants may withdraw amounts from their UP Savings Account when experiencing a specific financial situation that requires a non-routine use of money, as determined by the Board (in rules similar to the rules governing hardship distributions from a trust described in section 401(a) of the Internal Revenue Code of 1986 which is exempt from taxation under section 501(a) of such Code). Such situations may include a major reduction in earnings, an on-the-job injury, disability, family or medical leave, a large medical bill, the down payment for a home, and the beginning of a training or educational experience. The Board shall determine the rules regarding such withdrawals, including allowable needs, and demonstration of the need, but shall not impose a withdrawal penalty or impose a repayment requirement. Loans to investors shall not be permitted.(e)Other pension plansAny pension plan may offer a safe, short-to medium-term savings account with terms similar to the terms that apply to UP Savings Accounts described in this section. For purposes of this Act, any such account shall be considered part of the pension plan.807.Tax treatment of UP Accounts(a)In generalFor purposes of the Internal Revenue Code of 1986—(1)the UP Account Fund shall be treated as a trust described in section 401(a) of such Code which is exempt from taxation under section 501(a) of such Code;(2)any contribution to, or distribution from, the UP Account Fund shall be treated in the same manner as contributions to or distributions from such a trust; and(3)subject to section 401(k)(4)(B) of such Code and any dollar limitation on the application of section 402(a)(8) of such Code, contributions to the UP Account Fund shall not be treated as distributed or made available to an employee or Member nor as a contribution made to the Fund by an employee or Member merely because the employee or Member has, under the provisions of this part, an election whether the contribution will be made to the UP Account Fund or received by the employee or Member in cash.(b)Nondiscrimination requirementsNotwithstanding any other provision of law, the UP Account Fund is not subject to the nondiscrimination requirements applicable to arrangements described in section 401(k) of the Internal Revenue Code of 1986, or to matching contributions (as described in section 401(m) of such Code), so long as it meets the requirements of this section.(c)Rule of constructionSubsection (a) shall not be construed to provide that any amount of the employee's or Member's basic pay which is contributed to the UP Account Fund shall not be included in the term wages for the purposes of section 209 of the Social Security Act or section 3121(a) of the Internal Revenue Code of 1986.808.Qualified Roth contribution program(a)DefinitionsFor purposes of this section—(1)the term qualified Roth contribution program means a program described in paragraph (1) of section 402A(b) of the Internal Revenue Code of 1986 which meets the requirements of paragraph (2) of such section; and(2)the terms designated Roth contribution and elective deferral have the meanings given such terms in section 402A of the Internal Revenue Code of 1986.(b)Authority To establishThe Executive Director shall by regulation provide for the inclusion in the UP Accounts of a qualified Roth contribution program, under such terms and conditions as the Board may prescribe.(c)Required provisionsThe regulations under subsection (b) shall include—(1)provisions under which an election to make designated Roth contributions may be made by any individual who is eligible to make contributions to a UP Account under section 805(d); and(2)any other provisions which may be necessary to carry out this section.809.Survivor annuitiesThe rules on survivor annuities under subchapter IV of chapter 84 of title 5, United States Code, that are applicable to the Thrift Savings Plan, shall apply to UP Accounts. The Executive Director shall promulgate regulations to provide for the application of such rules to UP Accounts, as appropriate.. Part 8—Universal Personal SavingsSec. 801. Definitions.Sec. 802. Employer contribution requirements.Sec. 803. UP Account Board.Sec. 804. UP Account Fund.Sec. 805. UP Retirement Accounts.Sec. 806. UP Savings Accounts.Sec. 807. Tax treatment of UP Accounts.Sec. 808. Qualified Roth contribution program.Sec. 809. Survivor annuities..

801. Definitions For purposes of this part: The term applicable employer means an employer— with at least 10 full-time equivalent employees; and that has employed at least 10 full-time equivalent employees for not less than 2 years. The term Board means the Federal Universal Personal Savings Investment Board established under section 803. The term employee, unless specified otherwise, includes full-time and part-time employees of an applicable employer. The term Executive Director means the Executive Director of the UP Account Board appointed under section 803. The term full time, with respect to employment, means 40 hours per week. The term full-time equivalent employee means the sum of— the number of employees working full time; and the full-time equivalent of the number of employees working part-time, as defined and calculated in the manner determined most appropriate by the Secretary.

802. Employer contribution requirements Beginning in the first full taxable year following the date of enactment of the Saving for the Future Act, each applicable employer shall contribute to a qualifying plan, on behalf of each employee that is not enrolled in an active, defined benefit pension plan sponsored by such employer, the applicable minimum amount described in paragraph (2). For the first year in which the requirements of paragraph (1) apply, and the 1 year immediately following such first year, the minimum amount an applicable employer is required to contribute for each full-time employee is $0.50 per hour worked by the employee. For the 2 years immediately following the period during which subparagraph (A) applies, the minimum amount an applicable employer is required to contribute for each full-time employee is $.60 per hour worked by the employee. The Secretary shall increase the amounts described in subparagraph (B) for the year immediately following the period during which subparagraph (B) applies, and every 3 years thereafter, by an amount proportional to growth in average nonsupervisory wages. In the case of an applicable employer that is found to be in violation of the requirement under paragraph (1), such employer shall be required to make the contributions required under paragraph (1), plus interest, at an interest rate set by the Secretary through rulemaking. Each applicable employer shall provide a pension plan for all employees. The pension plan required under paragraph (1)— in the case of an applicable employer with 100 or more full-time equivalent employees, shall be an employer plan, which may be a plan described in section 401(k) of the Internal Revenue Code of 1986, defined benefit pension plan, or any other plan described in section 219(g)(5) of the Internal Revenue Code of 1986; and in the case of an applicable employer with fewer than 100 full-time equivalent employees, shall be a plan described in subparagraph (A), a simple retirement account under section 408(p) of the Internal Revenue Code of 1986 or an automatic payroll deduction individual retirement account or multiple employer plan, including any current or prospective State-established and-facilitated payroll deduction or automatic individual retirement account, or an UP Account described in section 804; or in the case of an applicable employer who does not provide an employer contribution but offers a State-established or-facilitated program described in subparagraph (A)(ii), such employer shall provide an UP Retirement Account to which the employer makes contributions, and any employee contributions shall be directed to the State plan. In the case of an applicable employer that offers a UP Retirement Account plan and any other type of plan described in subparagraph (A)(i), (A)(ii), or (B), as applicable, of paragraph (2), to employees, with respect to employees for whom the employer is not required under this Act to offer participation in such other type of plan, the requirements of this part may be met by allowing such employees to participate in such other plan. The board shall develop a standard notice that employers with fewer than 10 workers electing not to make contributions are required to provide to each employee upon hire, and annually thereafter. Such notice shall provide instructions on how to set up an account, make contributions, and claim the individual credit under section 25BB of the Internal Revenue Code of 1986.

803. UP Account Board There is established a Federal Universal Personal Savings Investment Board, an independent government agency for the purpose of overseeing UP Accounts. The President shall appoint, by and with the consent of the Senate, 5 members to serve on the Board. Such members shall have substantial experience, training, and expertise in the management of financial investments and pension benefit plans. The Board shall hire an Executive Director of the Board. Each member shall serve a term of 5 years, except that, of the members first appointed, one shall serve a term of 1 year, one shall serve a term of 2 years, one shall serve a term of 3 years, one shall serve a term of 4 years, and one shall serve a term of 5 years. Each member of the Board may serve up to 2 consecutive terms. Administrative expenses incurred to carry out this part shall be paid first out net earnings in the UP Account Fund.

804. UP Account Fund There is established in the Treasury of the United States a UP Account Fund. The UP Account Fund shall consist of all amounts contributed by participants, and employees on behalf of participants, into UP Retirement Accounts and UP Savings Accounts, increased by the total net earnings from investments of sums in the UP Account Fund or reduced by the total net losses from investments of the UP Account Fund, and reduced by the total amount of payments made from the UP Account Fund (including payments for administrative expenses). The sums in the UP Account Fund are appropriated and shall remain available without fiscal year limitation— to invest in accordance with section 805(h); to pay benefits or purchase annuity contracts under this subchapter; and to pay administrative expenses.

805. UP Retirement Accounts The Board shall establish UP Retirement Accounts that are portable, defined contribution pension plans. For purposes of this subsection— the term eligible rollover distribution has the meaning given such term by section 402(c)(4) of the Internal Revenue Code of 1986; and the term qualified trust has the meaning given such term by section 402(c)(8) of the Internal Revenue Code of 1986. A participant may contribute to the UP Retirement Account an eligible rollover that a qualified trust could accept under the Internal Revenue Code of 1986. A contribution made under this subsection shall be made in the form described in section 401(a)(31) of the Internal Revenue Code of 1986. In the case of an eligible rollover distribution, the maximum amount transferred to the UP Account Fund shall not exceed the amount which would otherwise have been included in the participant's gross income for Federal income tax purposes. The Executive Director shall prescribe regulations to carry out this subsection. The Board shall contract with one or more private investment firms to administer the UP Accounts. The Board shall contract with multiple private investment firms, as necessary to ensure that no single firm administers more than $500,000,000,000 in UP Account assets. An employee is eligible to participate in a UP Retirement Account if— the employee's employer establishes a UP Retirement Account on the employee's behalf; or the employee demonstrates to the Board that the employee works for a employer that is not an applicable employer. An individual who becomes a participant in a UP Retirement Account as described in paragraph (1) may maintain such account and may continue to make individual contributions to such account, regardless of such individual's subsequent employment status, provided that the individual is not a participant in another plan described in section 802(b)(2). The Board shall provide participants with a quarterly statement explaining each participant's projected income in retirement under different distribution scenarios and identifying the total dollar amount paid in fees for the year. Applicable employers making contributions required under section 802 to a UP Retirement Account shall auto-enroll all employees in such an account with an employee contribution that is equal to 4 percent of the employee's wages, with the option for any such employee to elect a different employee contribution level or to opt out of such account at any time. Employees making contributions to a UP Retirement Account shall have their contributions automatically escalated by half a percentage point at the conclusion of each full year during which such employer is so enrolled, until reaching the level of a 10 percent employee contribution. Any employee may opt out of such automatic escalation. In the case of an employee who was enrolled in a UP Retirement Account through one employer and subsequently ceases to work for such employer, if the employee subsequently is employed by another applicable employer, the employee's default contribution level under this paragraph shall be the same level that it was on the last day of employment with the previous employer. Applicable employers may contribute more to an employee's UP Retirement Account than is required under section 802, but may not contribute more than 1/2 the amount in effect under section 402(g)(1)(B) of the Internal Revenue Code of 1986 for the taxable year. Any employer matching requirements under this part shall apply to any employer contributions that are in addition to the minimum employer contribution. An applicable employer’s fiduciary duties with respect to an employee's UP Retirement Account extend only to the full and timely payment of contributions to their employees’ UP Retirement Accounts. For all other purposes, the members of the Board are the fiduciaries of such accounts. The Executive Director shall establish and maintain an account for each individual who makes contributions or for whom contributions are made under this section. The balance in a participant's account at any time is the excess of— the sum of— all contributions made to the UP Retirement Account by the participant; all contributions made to such Account for the benefit of the participant; and the total amount of the allocations made to and reductions made in the account pursuant to paragraph (3), over the amounts paid out of the UP Retirement Account with respect to such participant. Pursuant to regulations prescribed by the Executive Director, the Executive Director shall allocate to each account an amount equal to a pro rata share of the net earnings and net losses from each investment of sums in the UP Account Fund attributable to sums credited to such account, reduced by an appropriate share of the administrative expenses paid out of the net earnings, as determined by the Executive Director. The following investment rules shall apply with respect to a UP Retirement Account: The Board shall make available a reasonable menu of investment products, including low-fee index funds, sufficient to provide participants with the opportunity to diversify their UP Retirement Accounts in order to minimize the risk of large losses. The default investment option for participants shall minimize fees, be diversified, and automatically reduce risk to the participant as the participant approaches retirement age. UP Retirement Accounts shall allow participants to change or customize investment allocation. The board shall select investments solely in the interests of participants and beneficiaries and for the exclusive purpose of providing benefits and deferring reasonable expenses with the prevailing care, skill, prudence, and diligence that a prudent individual acting in a like capacity and familiar with such matters would use. The Board shall ensure that investors are offered forms of distribution that include— monthly income for life for the participant or surviving spouse, if applicable; monthly income until the normal or maximum Social Security retirement age for the participant or surviving spouse, if applicable; and automatic, regular withdrawals, under which a set percentage of initial capital is withdrawn each year, on a monthly basis. In case of death of a participant, a lump sum shall be paid to designated beneficiary.

806. UP Savings Accounts In addition to a standard UP Retirement Account under section 805, a participant may maintain a UP Savings Account, established by the Board, and designed as safe, short-to medium-term savings vehicles. Participants may make contributions to their UP Savings Account until the account reaches the maximum balance amount described in paragraph (1). Any contributions a participant wishes to make after the participant's account reaches such maximum balance amount shall be credited to the participant's UP Retirement Account established under section 805. A UP Savings Account may grow past the maximum balance amount due to accumulation without penalty. The Board shall establish the maximum balance amount for purposes of paragraph (1) as follows: For the first fiscal year that begins after the date of enactment of the Saving for the Future Act, the maximum balance amount shall be $2,500. For fiscal year immediately following the fiscal year described in subparagraph (A), and each fiscal year thereafter, the Board shall increase the maximum balance amount from the previous year, in increments of $100 that most closely reflects the average wage growth during the applicable 12-month period. Any contributions a participant makes pursuant to accounts established under this part shall be credited to the participant's UP Savings Account, until such has reached the maximum balance amount, unless the participant specifies otherwise. Once the maximum balance is reached, additional contributions will go to a participant's UP Retirement Account. The Board may invest contributions to UP Savings Accounts only in cash, money market funds, certificates of deposit, or government bonds. Participants may withdraw amounts from their UP Savings Account when experiencing a specific financial situation that requires a non-routine use of money, as determined by the Board (in rules similar to the rules governing hardship distributions from a trust described in section 401(a) of the Internal Revenue Code of 1986 which is exempt from taxation under section 501(a) of such Code). Such situations may include a major reduction in earnings, an on-the-job injury, disability, family or medical leave, a large medical bill, the down payment for a home, and the beginning of a training or educational experience. The Board shall determine the rules regarding such withdrawals, including allowable needs, and demonstration of the need, but shall not impose a withdrawal penalty or impose a repayment requirement. Loans to investors shall not be permitted. Any pension plan may offer a safe, short-to medium-term savings account with terms similar to the terms that apply to UP Savings Accounts described in this section. For purposes of this Act, any such account shall be considered part of the pension plan.

807. Tax treatment of UP Accounts For purposes of the Internal Revenue Code of 1986— the UP Account Fund shall be treated as a trust described in section 401(a) of such Code which is exempt from taxation under section 501(a) of such Code; any contribution to, or distribution from, the UP Account Fund shall be treated in the same manner as contributions to or distributions from such a trust; and subject to section 401(k)(4)(B) of such Code and any dollar limitation on the application of section 402(a)(8) of such Code, contributions to the UP Account Fund shall not be treated as distributed or made available to an employee or Member nor as a contribution made to the Fund by an employee or Member merely because the employee or Member has, under the provisions of this part, an election whether the contribution will be made to the UP Account Fund or received by the employee or Member in cash. Notwithstanding any other provision of law, the UP Account Fund is not subject to the nondiscrimination requirements applicable to arrangements described in section 401(k) of the Internal Revenue Code of 1986, or to matching contributions (as described in section 401(m) of such Code), so long as it meets the requirements of this section. Subsection (a) shall not be construed to provide that any amount of the employee's or Member's basic pay which is contributed to the UP Account Fund shall not be included in the term wages for the purposes of section 209 of the Social Security Act or section 3121(a) of the Internal Revenue Code of 1986.

808. Qualified Roth contribution program For purposes of this section— the term qualified Roth contribution program means a program described in paragraph (1) of section 402A(b) of the Internal Revenue Code of 1986 which meets the requirements of paragraph (2) of such section; and the terms designated Roth contribution and elective deferral have the meanings given such terms in section 402A of the Internal Revenue Code of 1986. The Executive Director shall by regulation provide for the inclusion in the UP Accounts of a qualified Roth contribution program, under such terms and conditions as the Board may prescribe. The regulations under subsection (b) shall include— provisions under which an election to make designated Roth contributions may be made by any individual who is eligible to make contributions to a UP Account under section 805(d); and any other provisions which may be necessary to carry out this section.

809. Survivor annuities The rules on survivor annuities under subchapter IV of chapter 84 of title 5, United States Code, that are applicable to the Thrift Savings Plan, shall apply to UP Accounts. The Executive Director shall promulgate regulations to provide for the application of such rules to UP Accounts, as appropriate.

4. Increase in credit for small employer pension plan startup costs Paragraph (1) of section 45E(b) of the Internal Revenue Code of 1986 is amended by striking $500 and inserting $2,000. Paragraph (1) of section 45E(c) of the Internal Revenue Code of 1986 is amended by inserting , applied by substituting 250 for 100 after 408(p)(2)(C)(i). Subsection (c) of section 45E of the Internal Revenue Code of 1986 is amended by adding at the end the following new paragraph: Such term shall not include an employer subject to the requirement of section 802(a)(1) of the Employee Retirement Income Security Act of 1974 that fails, within the time prescribed by the Secretary, to make any required contribution under such section 802 for the taxable year or any of the 4 taxable years preceding such year. The amendments made by this section shall apply to taxable years beginning after the date of the enactment of this Act. (3)Employers failing to make required contributionsSuch term shall not include an employer subject to the requirement of section 802(a)(1) of the Employee Retirement Income Security Act of 1974 that fails, within the time prescribed by the Secretary, to make any required contribution under such section 802 for the taxable year or any of the 4 taxable years preceding such year..

5. Credit for minimum employer contributions Subpart D of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 is amended by adding at the end the following new section: For purposes of section 38, the minimum employer contribution credit determined under this section for any taxable year is an amount equal to the applicable percentage of the qualified retirement contributions paid or incurred by the taxpayer during the taxable year. For purposes of subsection (a), the applicable percentage is— 50 percent, in the case of contributions made with respect to not more than 15 employees of the employer (or the number of employees of the employer which is the equivalent of 15 full-time employees), and 25 percent, in the case of contributions made with respect to so many of the employees of the employer (or the equivalent of so many full-time employees) as exceeds 15 but does not exceed 30. For purposes of this section— The term qualified retirement contributions means— contributions made by an employer as required under section 802 of the Employee Retirement Income Security Act of 1974, and contributions to a plan described in section 802(b)(2) of such Act made by an employer which is not subject to the requirement of section 802(a)(1) of such Act. The term qualified retirement contributions does not include any amount in excess of— the amount determined under section 802(a)(2) of the Employee Retirement Income Security Act with respect to each employee of the employer, or the amount which would be so determined if the employer were subject to the requirement of section 802(a)(1) of such Act. Subsection (a) shall not apply to any employer which fails, within the time prescribed by the Secretary, to make any contribution required to be made by such employer under section 802 of the Employee Retirement Income Security Act of 1974 for the taxable year or any of the 4 taxable years preceding such year. For purposes of this section— Rules similar to the rules of section 45E(e) shall apply. No credit shall be allowed under this section for any taxable year in which the credit under section 45E is allowed with respect to the taxpayer. In the case of a tax-exempt eligible employer, there shall be treated as a credit allowable under subpart C (and not allowable under this subpart) the lesser of— the amount of the credit determined under this section with respect to such employer, or the amount of the payroll taxes of the employer during the calendar year in which the taxable year begins. For purposes of this section, the term tax-exempt eligible employer means an eligible employer which is any organization described in section 501(c) which is exempt from taxation under section 501(a). For purposes of this subsection— The term payroll taxes means— amounts required to be withheld from the employees of the tax-exempt eligible employer under section 3401(a), amounts required to be withheld from such employees under section 3101(b), and amounts of the taxes imposed on the tax-exempt eligible employer under section 3111(b). A rule similar to the rule of section 24(d)(2)(C) shall apply for purposes of subparagraph (A). Subsection (b) of section 38 of the Internal Revenue Code of 1986 is amended by striking plus at the end of paragraph (40), by striking the period at the end of paragraph (41) and inserting , plus, and by adding at the end the following new paragraph: in the case of an eligible employer, the minimum employer contribution credit determined under section 45BB(a). The table of sections for subpart D of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 is amended by adding at the end the following new item: There are hereby appropriated to the Federal Old-Age and Survivors Trust Fund and the Federal Disability Insurance Trust Fund established under section 201 of the Social Security Act (42 U.S.C. 401) amounts equal to the reduction in revenues to the Treasury by reason of the enactment of section 45AA(f) of the Internal Revenue Code of 1986. Amounts appropriated by the preceding sentence shall be transferred from the general fund at such times and in such manner as to replicate to the extent possible the transfers which would have occurred to such Trust Fund had such amendments not been enacted. The amendments made by this section shall apply to taxable years beginning after the date of the enactment of this Act. 45BB.Credit for minimum employer contributions(a)General ruleFor purposes of section 38, the minimum employer contribution credit determined under this section for any taxable year is an amount equal to the applicable percentage of the qualified retirement contributions paid or incurred by the taxpayer during the taxable year.(b)Applicable percentageFor purposes of subsection (a), the applicable percentage is—(1)50 percent, in the case of contributions made with respect to not more than 15 employees of the employer (or the number of employees of the employer which is the equivalent of 15 full-time employees), and(2)25 percent, in the case of contributions made with respect to so many of the employees of the employer (or the equivalent of so many full-time employees) as exceeds 15 but does not exceed 30.(c)Qualified retirement contributionsFor purposes of this section—(1)In generalThe term qualified retirement contributions means—(A)contributions made by an employer as required under section 802 of the Employee Retirement Income Security Act of 1974, and(B)contributions to a plan described in section 802(b)(2) of such Act made by an employer which is not subject to the requirement of section 802(a)(1) of such Act.(2)Only required contribution amount taken into accountThe term qualified retirement contributions does not include any amount in excess of—(A)the amount determined under section 802(a)(2) of the Employee Retirement Income Security Act with respect to each employee of the employer, or(B)the amount which would be so determined if the employer were subject to the requirement of section 802(a)(1) of such Act.(d)Employers excluded for failure To make contributionsSubsection (a) shall not apply to any employer which fails, within the time prescribed by the Secretary, to make any contribution required to be made by such employer under section 802 of the Employee Retirement Income Security Act of 1974 for the taxable year or any of the 4 taxable years preceding such year.(e)Special rulesFor purposes of this section—(1)Aggregation rules, etcRules similar to the rules of section 45E(e) shall apply.(2)Denial of double benefitNo credit shall be allowed under this section for any taxable year in which the credit under section 45E is allowed with respect to the taxpayer.(f)Credit made available to tax-Exempt eligible employers(1)In generalIn the case of a tax-exempt eligible employer, there shall be treated as a credit allowable under subpart C (and not allowable under this subpart) the lesser of—(A)the amount of the credit determined under this section with respect to such employer, or(B)the amount of the payroll taxes of the employer during the calendar year in which the taxable year begins.(2)Tax-exempt eligible employerFor purposes of this section, the term tax-exempt eligible employer means an eligible employer which is any organization described in section 501(c) which is exempt from taxation under section 501(a).(3)Payroll taxesFor purposes of this subsection—(A)In generalThe term payroll taxes means—(i)amounts required to be withheld from the employees of the tax-exempt eligible employer under section 3401(a),(ii)amounts required to be withheld from such employees under section 3101(b), and(iii)amounts of the taxes imposed on the tax-exempt eligible employer under section 3111(b).(B)Special ruleA rule similar to the rule of section 24(d)(2)(C) shall apply for purposes of subparagraph (A).. (42)in the case of an eligible employer, the minimum employer contribution credit determined under section 45BB(a).. Sec. 45BB. Credit for minimum employer contributions..

45BB. Credit for minimum employer contributions For purposes of section 38, the minimum employer contribution credit determined under this section for any taxable year is an amount equal to the applicable percentage of the qualified retirement contributions paid or incurred by the taxpayer during the taxable year. For purposes of subsection (a), the applicable percentage is— 50 percent, in the case of contributions made with respect to not more than 15 employees of the employer (or the number of employees of the employer which is the equivalent of 15 full-time employees), and 25 percent, in the case of contributions made with respect to so many of the employees of the employer (or the equivalent of so many full-time employees) as exceeds 15 but does not exceed 30. For purposes of this section— The term qualified retirement contributions means— contributions made by an employer as required under section 802 of the Employee Retirement Income Security Act of 1974, and contributions to a plan described in section 802(b)(2) of such Act made by an employer which is not subject to the requirement of section 802(a)(1) of such Act. The term qualified retirement contributions does not include any amount in excess of— the amount determined under section 802(a)(2) of the Employee Retirement Income Security Act with respect to each employee of the employer, or the amount which would be so determined if the employer were subject to the requirement of section 802(a)(1) of such Act. Subsection (a) shall not apply to any employer which fails, within the time prescribed by the Secretary, to make any contribution required to be made by such employer under section 802 of the Employee Retirement Income Security Act of 1974 for the taxable year or any of the 4 taxable years preceding such year. For purposes of this section— Rules similar to the rules of section 45E(e) shall apply. No credit shall be allowed under this section for any taxable year in which the credit under section 45E is allowed with respect to the taxpayer. In the case of a tax-exempt eligible employer, there shall be treated as a credit allowable under subpart C (and not allowable under this subpart) the lesser of— the amount of the credit determined under this section with respect to such employer, or the amount of the payroll taxes of the employer during the calendar year in which the taxable year begins. For purposes of this section, the term tax-exempt eligible employer means an eligible employer which is any organization described in section 501(c) which is exempt from taxation under section 501(a). For purposes of this subsection— The term payroll taxes means— amounts required to be withheld from the employees of the tax-exempt eligible employer under section 3401(a), amounts required to be withheld from such employees under section 3101(b), and amounts of the taxes imposed on the tax-exempt eligible employer under section 3111(b). A rule similar to the rule of section 24(d)(2)(C) shall apply for purposes of subparagraph (A).

6. Additional credit for individuals making retirement contributions Subpart A of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 is amended by inserting after section 25B the following new section: In the case of an eligible individual, there shall be allowed as a credit against the tax imposed by this subtitle for the taxable year an amount equal to 50 percent of so much of the qualified retirement contributions of the individual for the taxable year as do not exceed the base amount. For purposes of this section, the term eligible individual means an individual whose employer does not provide a defined benefit plan (as defined in section 414(j)), defined contribution plan (as defined in section 414(i)), or participation in a UP Account under section 805 of the Employee Retirement Income Security Act of 1974, or who is not employed, at the time the qualified retirement contributions are made. For purposes of this section— The term qualified retirement contributions means, with respect to any taxable year, any amounts paid in cash by an individual to— an individual retirement plan, or a UP Account established under section 805 of the Employee Retirement Income Security Act of 1974, The base amount for any taxable year is an amount equal to the amount in effect under section 802(a)(3)(i) of the Employee Retirement Income Security Act of 1974 for such year. Rules similar to the rules of section 25B(f) shall apply for purposes of this section. The credit under this section and the credit under section 25B shall each be determined without regard to the other. The table of sections for subpart A of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 is amended by inserting after the item relating to section 25B the following new item: The amendments made by this section shall apply to taxable years beginning after the date of the enactment of this Act. 25BB.Additional credit for certain individuals making retirement contributions(a)Allowance of creditIn the case of an eligible individual, there shall be allowed as a credit against the tax imposed by this subtitle for the taxable year an amount equal to 50 percent of so much of the qualified retirement contributions of the individual for the taxable year as do not exceed the base amount.(b)Eligible individualFor purposes of this section, the term eligible individual means an individual whose employer does not provide a defined benefit plan (as defined in section 414(j)), defined contribution plan (as defined in section 414(i)), or participation in a UP Account under section 805 of the Employee Retirement Income Security Act of 1974, or who is not employed, at the time the qualified retirement contributions are made.(c)Qualified retirement contributions, EtcFor purposes of this section—(1)In generalThe term qualified retirement contributions means, with respect to any taxable year, any amounts paid in cash by an individual to—(A)an individual retirement plan, or(B)a UP Account established under section 805 of the Employee Retirement Income Security Act of 1974,for the benefit of the individual.(2)Base amountThe base amount for any taxable year is an amount equal to the amount in effect under section 802(a)(3)(i) of the Employee Retirement Income Security Act of 1974 for such year.(d)Special rules(1)Investment in the contractRules similar to the rules of section 25B(f) shall apply for purposes of this section.(2)Coordination with saver's creditThe credit under this section and the credit under section 25B shall each be determined without regard to the other.. Sec. 25BB. Additional credit for certain individuals making retirement contributions..

25BB. Additional credit for certain individuals making retirement contributions In the case of an eligible individual, there shall be allowed as a credit against the tax imposed by this subtitle for the taxable year an amount equal to 50 percent of so much of the qualified retirement contributions of the individual for the taxable year as do not exceed the base amount. For purposes of this section, the term eligible individual means an individual whose employer does not provide a defined benefit plan (as defined in section 414(j)), defined contribution plan (as defined in section 414(i)), or participation in a UP Account under section 805 of the Employee Retirement Income Security Act of 1974, or who is not employed, at the time the qualified retirement contributions are made. For purposes of this section— The term qualified retirement contributions means, with respect to any taxable year, any amounts paid in cash by an individual to— an individual retirement plan, or a UP Account established under section 805 of the Employee Retirement Income Security Act of 1974, The base amount for any taxable year is an amount equal to the amount in effect under section 802(a)(3)(i) of the Employee Retirement Income Security Act of 1974 for such year. Rules similar to the rules of section 25B(f) shall apply for purposes of this section. The credit under this section and the credit under section 25B shall each be determined without regard to the other.

7. Increase in highest individual income tax rate Each of the tables contained in subparagraphs (A), (B), (C), (D), and (E) of section 1(j)(2) of the Internal Revenue Code of 1986 is amended by striking 37% in the last line and inserting 39.6%. The amendments made by this section shall apply to taxable years beginning after December 31, 2024.

8. Increase in corporate income tax rate Subsection (b) of section 11 of the Internal Revenue Code of 1986 is amended by striking 21 percent and inserting 23 percent. The amendment made by this section shall apply to taxable years beginning after December 31, 2024.