Responsible Legislating Act
Sponsored By: Representative McGovern
In Committee
Summary
Modernizes and expands retirement savings rules while adding protections for federal employees injured on duty and improving veteran access to registered apprenticeship programs. It bundles automatic enrollment, saver-credit and catch-up changes, IRA and 403(b) updates, and other technical retirement fixes across many titles.
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- Adds apprenticeship programs to pre-separation education and directs the Department of Labor, working with the VA, to create a public, searchable site showing program descriptions, veteran costs, contact details, veteran endorsements, hiring preferences, and certifications.
- Creates a cross-system framework that treats certain post-injury supervisory or administrative service as creditable service for annuity calculations and urges agencies to reappoint injured employees when feasible; allows a 3-day break in service and applies to qualifying injuries occurring on or after 2 years from enactment.
- Requires automatic enrollment for many 401(k) and 403(b) plans with default contributions starting at 3% and escalating by 1 percentage point each year until at least 10%, plus a range of other saver-friendly changes such as higher catch-up limits and updates to RMD and IRA rules.
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Bill Overview
Analyzed Economic Effects
53 provisions identified: 44 benefits, 1 costs, 8 mixed.
Bigger Saver's Credit for savers
If enacted, the Saver's Credit rate would be 50%. For married filing jointly, it would start phasing out over $35,000 and be gone by $48,000. Heads of household use 75% of those amounts, and single filers use 50%. Amounts would be indexed for inflation after 2028. The change would apply to tax years beginning after December 31, 2028.
Higher catch-up limits at ages 62–64
If enacted, people turning 62 but not 65 in the tax year could contribute extra. The added catch‑up would be $10,000 for most plans and $5,000 for SIMPLE plans, with inflation adjustments. This would apply to tax years starting after December 31, 2025.
Lower penalty for missed IRA withdrawals
If enacted, the excise tax for missed required IRA distributions would drop from 50% to 25%. If you fix the shortfall and file during the correction window, the rate could be 10%. The correction window lasts until an IRS audit/demand or the end of the second taxable year after the year the tax was imposed. This would apply to tax years beginning after December 31, 2024.
One-time $50K IRA gift to charities
If enacted, you could make a one‑time election to send up to $50,000 (indexed) from your IRA to certain split‑interest charities as a qualified charitable distribution. Payments must go directly from the IRA trustee, and the charity interest must meet strict rules. For gift annuities, payments of at least 5% must start within a year. This would apply to distributions in tax years ending after enactment.
Tax break for disabled first responders
If enacted, qualified first responders could exclude some retirement payments from income. The exclusion would apply up to your annualized excludable disability amount. It would cover certain pensions or annuities tied to your first responder service. It would apply to payments in tax years beginning after December 31, 2029.
Bigger credits to start small-business plans
If enacted, small employers could get larger tax credits to start plans and a new per‑employee contribution credit up to $1,000. The contribution credit would be 100% in year 1, then 75%, 50%, and 25% in years 2–4. For employers with more than 50 employees, the percentage would drop by 2 points per employee over 50. This would apply to tax years starting after December 31, 2024.
Credit to speed spouses’ plan access
Small employers could get a tax credit for making military spouses eligible for retirement plans within two months. The credit would be $250 per eligible spouse plus up to $250 for employer contributions, for the year the spouse joins and the next two years. Employer contributions for these spouses must be immediate and fully vested.
More investment options in 403(b) and annuities
If enacted, 403(b) custodial accounts could invest in regulated investment company stock or certain group trusts for amounts invested after December 31, 2024. Treasury would also change rules within seven years so insurers can offer ETFs in variable annuities and life contracts. Those ETF changes would apply to investments made seven years after enactment.
Easier fixes and clearer plan info
Plans could fix auto‑enroll or auto‑escalation mistakes within 9½ months after the plan year ends without losing tax status, if fixes favor participants. Employers could offer small cash perks to encourage sign‑ups. Plans could use blended investment benchmarks and rely on a worker’s written hardship statement. Plans could stop most mailings to eligible workers who are not enrolled and have no balance, but must send a yearly reminder and any requested documents. Plans that adopt required changes by the deadline (generally end of the first plan year starting on or after Jan 1, 2026; 2028 for government/union plans) would be treated as operated accordingly.
Easier fixes for retirement account mistakes
If enacted, many retirement plan and IRA mistakes could be self-corrected with no deadline, unless the IRS already found the issue. Some IRA penalties and the 60‑day rollover deadline could be waived for reasonable cause. The Labor Department would coordinate on loan fixes. The bill would also clarify that the 3‑year clock to assess certain excise taxes starts from the due date of your income tax return for the error year.
Faster plan access for part-time workers
If enacted, part‑time workers could join plans sooner. Two 12‑month periods with at least 500 hours, plus age 21 by the end, would meet participation. Each 12‑month period with at least 500 hours would count for vesting. A related rule would drop a service test from 3 years to 2. These changes would apply to plan years after December 31, 2024.
Keep pension credit after duty injury
If enacted, some injured federal workers could count future service in certain non‑covered jobs as creditable toward their prior covered position. The agency must certify the duty‑related injury and that you cannot continue in the old job. The switch must have no more than a 3‑day break. This would apply to injuries on or after two years after enactment.
Limits on pension overpayment clawbacks
If a pension accidentally overpays you, the plan could not add interest or fees. For steady monthly payments, it could recoup at most 10% of the overpayment each year and could not cut your check below 90% of its normal amount. The plan could not seek repayment if it first told you more than three years after the first overpayment. You could contest the recoupment, and hardship must be considered. These protections would not apply if you caused or knowingly accepted the error.
Match on student loan payments
Employers could treat your student loan payments like salary deferrals for getting a 401(k) or similar plan match. The plan’s normal match rate and vesting would apply. The match would count only up to the yearly deferral limit minus any deferrals you make, and you would need to certify your payments. This would start for plan years beginning after December 31, 2024.
Penalty-free retirement withdrawals after abuse
If enacted, victims of domestic abuse could take early retirement withdrawals without the 10% penalty. You could withdraw the lesser of $10,000 or 50% of your vested benefit during the one-year period you are a victim. You could repay the amount within three years.
Penalty‑free early withdrawals for firefighters
Employees who provide firefighting services could take certain early plan distributions without the 10% extra tax. This would apply to specified plan types and to distributions made after December 31, 2024.
Raise RMD starting age in steps
The age to start required minimum distributions would rise: age 73 for people reaching 72 after 2024 and before 2032; age 74 for those reaching 73 after 2031 and before 2035; and age 75 for those reaching 74 after 2034. This would affect distributions required after December 31, 2024.
Roth option for SIMPLE and SEP
SIMPLE IRAs and SEPs could allow Roth contributions starting in 2025 tax years. You would pay tax now, and qualified withdrawals later could be tax‑free. Rollovers and limits would follow Roth rules.
Smaller penalty for IRA rule mistakes
If an IRA has a prohibited transaction, only the portion involved would be treated as distributed, not the whole account. Conforming changes would apply. This would take effect for tax years after enactment.
Higher penalties for crimes near schools
If enacted, sex trafficking and coercion or enticement crimes near schools could carry up to five extra years in prison. The added penalties would apply in school zones, within 1,000 feet of school‑sponsored activities, or near college premises, with defined terms. One rule excludes cases where a minor’s presence is unrelated to the school setting.
Standard review for FEMA grant gear
FEMA would use one process to review grant requests to buy equipment not on the Authorized Equipment List or outside standards. Reviews would consider federal use, available standards, capability gaps, and other factors. The DHS Inspector General would report on the process within three years.
Study foreign control at big ports
The Federal Maritime Commission would hire a research center to study foreign ownership at the 15 largest U.S. container ports. The study would review changes over the last 10 years and planned changes for 2025–2026, track grants to foreign‑owned ports, and make policy recommendations within one year of starting.
Find lost retirement accounts online
Labor would set up a national "Retirement Savings Lost and Found" within two years. Plans would start reporting data after the second December 31 after enactment. People could search for plan administrators, and the Inspector General would audit the program on a set schedule.
Boots to Business training for veterans
If enacted, the Boots to Business program would run through September 30, 2028. It would offer classes and online training to service members, veterans, and their spouses or dependents. Grants to partners would depend on available funding. The SBA would post funding notices and report on results.
Attract chip investment: state input
SelectUSA would seek state comments within 180 days on bringing foreign semiconductor investment to the U.S. It would report to Congress within two years on barriers, opportunities, and ways to avoid aiding foreign adversaries.
Cap ESOP sale tax deferral at 10%
Sellers to ESOPs could defer tax under section 1042 on no more than 10% of the sale amount. The cap would apply to sales after December 31, 2029. Basis would be allocated to match the deferred portion.
Automatic enrollment in workplace plans
This bill would require many 401(k) and 403(b) plans to auto-enroll workers at 3%–10% of pay in year one. The default would rise by 1 point each year until at least 10% (up to 15% after 2027). Workers could change or opt out at any time. New businesses, small employers under 10 employees, government and church plans, and existing plans would be exempt. The rule would start for plan years beginning after December 31, 2025.
Let employer matches be Roth
Plans could let employer matches be Roth. If you choose this, the match would be taxed now but could be tax‑free later if rules are met. This option would also apply to matches linked to student loan payments. It would apply to contributions made after enactment.
Easier retirement plan setup for small firms
If enacted, sole proprietors who are the only employee could make elective deferrals by their tax filing date and count them for the first plan year. Employers could adopt amendments by their tax return deadline to raise prior‑year benefits (not matching), if the plan stays qualified. Pooled employer plans would need a named fiduciary to collect contributions with written, diligent procedures. Some employees who do not meet age/service rules could be left out of top‑heavy testing if covered under another compliant plan. Effective dates vary starting after enactment, with some items applying to plan years after December 31, 2024 or December 31, 2025.
New rules for ESOP public trading status
If enacted, the bill would set criteria for when employer stock in ESOPs counts as publicly traded. It would require, among other things, dealer quotes, no penny stock treatment, a public float of at least $1,000,000 and 10% of shares, and audited financials for domestic issuers. These rules would apply to plan years starting after December 31, 2029.
Shared 403(b) plans for employers
Multiple employers (not church plans) could run a 403(b) as one plan for filings. Treasury would provide model language and rules for leaving the plan and fiduciary duties. Special rules would apply for non‑governmental and governmental plans.
Update family‑ownership rules for companies
Family attribution rules would change for controlled‑group and affiliated‑service‑group tests. Community property would generally be ignored, spousal attribution would be limited in some cases, and a child’s stock attributed to parents would not alone group companies. If this change shifts group status, it would be treated as a transition event for plan testing.
More flexible longevity annuity rules
If enacted, Treasury would drop the 25% premium cap for qualifying longevity annuity contracts bought or exchanged after enactment. It would allow a rescission period up to 90 days and protect joint‑and‑survivor rights after divorce if the order preserves them. These latter changes would apply to contracts bought or exchanged on or after July 2, 2016.
Apprenticeship search help for veterans
A public website would list registered apprenticeship programs approved for VA education benefits. It would be searchable by job and location and show costs, contacts, endorsements, veteran hiring preference, and credentials. The same info would be on apprenticeship.gov. DoD pre‑separation classes would include these programs.
At least one paper benefit statement
If enacted, plans would send at least one paper statement each year for account plans, and once every three years for pensions, unless you choose e‑delivery. The Labor Department would update rules by December 31, 2024. No fees could be charged for paper statements. This would apply to plan years starting after December 31, 2025.
Easier 403(b) hardship withdrawals
403(b) plans could let more types of money be withdrawn for hardship, including salary reduction, employer nonelective, matching, and earnings. You would not have to take a plan loan first. This would apply to plan years starting after December 31, 2024.
More flexible 457(b) deferral timing
If enacted, workers could set 457(b) deferrals under two timing rules. For some employers, you must sign before pay is currently available. For others, you must sign before the month begins. This would apply to tax years beginning after the law is enacted.
Index IRA catch‑up after 2025
The $1,000 IRA catch‑up would adjust for inflation starting in 2026. Increases would be rounded down to the nearest $100.
More flexible payouts from annuities
Commercial annuities in retirement plans could add options like annual increases under 5%, certain lump‑sums, dividend‑like payments, and a limited final death payment. These rules would apply to calendar years ending after enactment.
More protection for small retirement balances
If enacted, plans could not force a cash‑out until your balance is above $7,000. The old limit was $5,000. This would apply to distributions made after December 31, 2024.
More time to repay birth withdrawals
You would have three years from the day after you received a qualified birth or adoption distribution to repay it. This would apply as if it were part of the original 2019 law.
Treasury to promote Saver’s Credit
Treasury would boost outreach on the Saver’s Credit and report to Congress within 90 days. Plans include new materials, sharing info with states, and translations into the 10 most common non‑English languages.
Army operations get $1M in 2026
The bill would provide $1 million for Army operation and maintenance for fiscal year 2026.
Commission to study APA museum
A commission would study creating a National Museum of Asian Pacific American History and Culture. Eight members would be appointed within 90 days. The commission could accept private gifts, members would serve without pay, and no federal funds could be used. It would prepare required reports and a fundraising plan.
House rule to protect whistleblowers’ identities
If enacted, House Members and staff could not publicly reveal a whistleblower’s identity. Exceptions include written consent, the person naming themself, or a two‑thirds committee vote that disclosure is in the public interest. Safeguards and notice would be required when possible. Investigations and public reports could still proceed without personal details.
More telehealth help for rural nursing
The bill would provide $1 million to HRSA’s Telehealth Resource Center to help rural nursing homes with telehealth technology and rules. The funds would be available through September 30, 2025.
DHS management gets $1M in 2026
The DHS Management Directorate would receive $1 million for operations and support in fiscal year 2026.
Energy data agency gets $1M
The Energy Information Administration would receive $1 million for fiscal year 2026, available until spent.
Livestock market reporting extended to 2025
If enacted, the livestock mandatory reporting program would be extended by one year where the date appears, from 2024 to 2025. This keeps market reporting requirements and data flowing for another year.
State Department capital fund $1M
The State Department’s Capital Investment Fund would receive $1 million for fiscal year 2026, available until spent.
USDA budget office gets $1M
The USDA Office of Budget and Program Analysis would receive $1 million for fiscal year 2026 for its operations.
Roth‑only rule for some deferral limits
The limit on certain elective deferrals would apply only if the contributions are Roth, with exceptions for some plans. Related code sections would be updated. This would apply to tax years beginning after December 31, 2024.
More frequent federal credit union meetings
If enacted, boards of federal credit unions would meet more often. New credit unions would meet monthly for five years. Top‑rated unions would meet at least six times a year (one each quarter). Lower‑rated unions would meet monthly. This would start on enactment.
Sponsors & CoSponsors
Sponsor
McGovern
MA • D
Cosponsors
There are no cosponsors for this bill.
Roll Call Votes
No roll call votes available for this bill.
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