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HR7314119th CongressWALLET

Advancing Commonsense Policies Act

Sponsored By: Representative Magaziner, Seth [D-RI-2]

In Committee

Summary

Major retirement law overhaul to boost savings. This bill would remake retirement rules to push wider automatic enrollment, expand employer matching options, and change required distributions and catch-up limits for older workers.

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Bill Overview

Analyzed Economic Effects

37 provisions identified: 26 benefits, 3 costs, 8 mixed.

Keep Retirement Credit for Injured Workers

If enacted, certain federal employees who are injured on duty and moved without a break to a different job in the same agency would have that later service counted as creditable for their original covered-position retirement. The transition must happen with no more than a three-day break, agency certification is required, and affected employees can opt out. The rule would take effect on enactment but apply only to injuries occurring two years after enactment.

Automatic enrollment and enrollment incentives

If enacted, many employer retirement plans would have default automatic contributions. Plans would set a first‑year default between 3% and 10% of pay, increase it by 1 percentage point each year until at least 10% (up to 15% in most cases), and use qualified default investments. Small, de minimis financial incentives to start payroll contributions would be allowed. A safe harbor would protect plans that fix automatic enrollment errors promptly and in a way that benefits participants.

Bigger Saver's Credit for Filers

If enacted, this bill would raise the Saver's Credit rate to 50%. For joint filers the credit would start to phase out above $48,000 of AGI with a $35,000 phaseout range. These dollar thresholds would be indexed for inflation after 2028. The credit would apply to tax years beginning after December 31, 2028.

Easier IRA fixes and QCD updates

If enacted, IRA owners and plan sponsors would get more ways to fix inadvertent errors without penalties. The IRS correction program (EPCRS) would be expanded so many plan and IRA mistakes can be self-corrected indefinitely. Only the part of an IRA involved in a prohibited transaction would be treated as a distribution, valued as of the transaction date. Qualified charitable distribution (QCD) limits would be indexed for inflation and taxpayers could make a one-time election to treat up to $50,000 of certain trustee-to-split-entity IRA distributions as QCDs under strict rules.

Higher Catch-Up Limits for Near-Retirees

If enacted, people who will be age 62 but not 65 in a tax year would be able to make larger catch-up contributions. Non-SIMPLE plans would allow an extra $10,000 and SIMPLE plans an extra $5,000, with those amounts indexed for cost-of-living. The IRA $1,000 catch-up amount would also be indexed starting for tax years after December 31, 2025. These rules would apply to tax years beginning after December 31, 2025.

Big small‑business retirement credits

If enacted, eligible small employers could claim a refundable credit for hiring military spouses equal to $250 per eligible spouse plus up to $250 of employer contributions per year. The bill would also add a larger startup credit tied to employer contributions with a $1,000 per‑employee cap and an applicable percentage of 100% in year 1, then 75%, 50%, and 25% in later years (phasing to 0%). These credits apply to taxable years beginning after enactment and include rules about who counts and how long an employee may be claimed.

Easier Hardship Withdrawals and Benchmarks

If enacted, plan administrators could accept an employee's certification that a withdrawal is for an immediate and heavy financial need, which could let workers get emergency retirement funds faster. The Labor Secretary would also be required to allow plan administrators to use an optional blended benchmark for mixed-asset funds and report on use and participant understanding within three years. The hardship rule would apply for plan years beginning after December 31, 2024, and the blended benchmark rule would be issued within one year of enactment.

More hardship and domestic-abuse withdrawals

If enacted, 403(b) plans could allow hardship distributions from elective deferrals, qualified nonelective contributions, qualified matching contributions, and earnings on those amounts, and not require taking a loan first. The bill would also create a one‑year penalty‑free distribution window for domestic abuse victims, limited to the lesser of $10,000 or 50% of the present value of the nonforfeitable accrued benefit, with a three‑year window to repay by rollover.

More retirement access for part‑time workers

If enacted, some long‑term part‑time workers would be able to join employer plans sooner. Two consecutive 12‑month periods each with at least 500 hours (and age 21) would meet entry rules and those 12‑month periods would count for vesting. The bill also allows multi‑employer 403(b) plans to be treated as a single plan for filing, requires pooled employer plans to name a non‑employer fiduciary to collect contributions, and lets certain employees be excluded when testing top‑heavy rules.

Delaying RMDs and annuity flexibility

If enacted, required minimum distribution (RMD) ages would rise by cohort: some people would start RMDs at 73, later cohorts at 74, and still later cohorts at 75. The bill would also let commercial annuities used in plans rise modestly (under 5% yearly), allow reasonable lump-sum accelerations and dividend-like payments, and remove the QLAC 25% premium cap for new contracts bought on or after enactment. Treasury would update related guidance and some earlier QLAC rules would be applied retrospectively to contracts on or after July 2, 2016.

Lower Penalty for Missed RMDs

If enacted, the penalty for missing a required minimum distribution would drop from 50% to 25% of the shortfall. If you correct the shortfall during a defined correction window and file a return reporting the reduced tax, the penalty could be 10%. These changes would apply to tax years beginning after December 31, 2024.

Tax relief for firefighters and first responders

If enacted, firefighters would be able to avoid the additional 10% early‑distribution tax for more types of plans for distributions after December 31, 2024. The bill would also let qualifying first responders exclude part of certain disability retirement payments from gross income, up to the annual excludable disability amount, with partial-year prorating. The first-responder exclusion would apply to tax years starting after December 31, 2029.

Retroactive Deferrals for Sole Proprietors

If enacted, a sole proprietor who is the only employee could treat elective deferrals made before filing their tax return as if made before the end of the plan's first year. This would let qualifying sole proprietors make retroactive first-year deferrals. The rule applies to plan years beginning after enactment.

Limit tax deferral on S‑corp sales

If enacted, sellers of qualified S‑corporation stock could use the section 1042 nonrecognition election, but for S‑corp sales the seller could defer gain on at most 10% of the amount realized. The change would apply to sales after December 31, 2029.

Stronger Penalties Near Schools

If enacted, the bill would add up to five more years in prison for certain coercion and trafficking crimes when those crimes occur in a school zone or within 1,000 feet of school-sponsored activities or on/near college-owned grounds. The bill defines terms like 'school zone' and contains an exception when a minor's presence is unrelated to the activity or enrollment.

National Retirement 'Lost and Found' Database

If enacted, the Department of Labor would create an online 'Retirement Savings Lost and Found' within two years to help people find plan administrators and recover lost retirement accounts. Plans subject to certain vesting rules would have to submit administrator and participant data for plan years starting after the second December 31 after enactment. The Inspector General would audit the system regularly in the early years.

Narrower family ownership attribution rules

If enacted, family attribution rules used for controlled group and affiliated-service-group tests would be narrowed. Community property laws would be disregarded for attribution, stock generally would not be attributed to a spouse in many cases, and child‑attribution rules would be limited so separate companies are less likely to be linked. The changes apply to plan years beginning on or after enactment.

Higher Forced Retirement Cashouts

If enacted, the bill would let retirement plans force mandatory cash-out distributions for small accounts up to $7,000 instead of $5,000. The change would apply to distributions made after December 31, 2024. More participants with small balances could receive immediate distributions rather than keeping money in the plan.

Protections for plan fixes and overpayments

If enacted, plans that amend benefits under this Act and operate as if the amendment were already in effect would be protected from certain anti‑cut rules for a set period. The bill would let employers elect to make benefit‑increasing amendments effective for the prior year if they meet qualification limits and file by the tax deadline. It would also limit recoupment of inadvertent pension overpayments: no interest or collection fees, annual recoupment caps (generally 10% when reducing a non‑decreasing periodic benefit), and a rule that future payments not be cut below 90% of the otherwise payable amount.

More Roth options and student loan matches

If enacted, employers and employees would get more Roth-style choices. SEP and SIMPLE contributions could be made into a Roth IRA (and would be taxable when made). Employers could designate matching contributions as Roth for plan rules, but those matches would be includible in income. Plans that match elective deferrals would also have to match qualified student loan payments at the same rate and vesting, subject to annual limits.

One‑year livestock reporting extension

If enacted, the statutory expiration for livestock mandatory reporting would change from 2024 to 2025, extending the reporting requirement by one year. The amendment updates the expiration year in two related statutes to preserve mandatory market reporting for another year.

Allow ETFs Inside Variable Contracts

If enacted, the Treasury would be required to change regulations within seven years so that exchange-traded funds (ETFs) can be used as investment options inside variable annuities and variable life insurance contracts. The rules would clarify how ETF diversification is measured and define terms like 'authorized participant' and 'market maker.' These changes would apply to segregated account investments made seven years after enactment.

Credit Union Board Meeting Rules

If enacted, federal credit unions would follow tiered minimum board meeting rules. New (de novo) credit unions would have to meet at least monthly for their first five years. Highly rated credit unions could meet as few as six times per year, with at least one meeting each fiscal quarter. Lower-rated credit unions would still be required to meet monthly. These changes would take effect upon enactment.

More 403(b) investment choices

If enacted, amounts in 403(b) custodial accounts could be invested in regulated investment company stock or in group trusts intended to meet IRS revenue‑ruling guidance. The rule applies to amounts invested after December 31, 2024 and expands investment options for participants.

More ESOP shares treated public

If enacted, some employer shares held in ESOPs could be treated as publicly traded if they meet tests such as at least four dealer price quotes, not being a penny stock, audited financials, and a public float of at least $1,000,000 that is at least 10% of shares. The rule applies for plan years beginning after December 31, 2029.

More paper statements; fewer notices

If enacted, defined contribution plans would have to provide at least one paper pension statement each year, and defined benefit plans at least one every three years, unless a participant chooses electronic delivery. Plans could not charge for paper statements and must include contact and plan identification information. At the same time, most routine plan notices may be limited for eligible employees who are unenrolled and have no account balance, who would still get one annual reminder of eligibility.

Veterans apprenticeship program website

If enacted, the Department of Labor and VA would build a public website listing registered apprenticeship programs for veterans. The site would be searchable by job and location and show program cost to a veteran, contact details, endorsements, hiring preference, and any certificates or degrees.

More outreach for Saver's Credit

If enacted, Treasury would have to increase public awareness of the Saver's Credit and send Congress a report within 90 days describing plans. The report must cover digital and print materials, sharing with states, and translating outreach into the ten most common U.S. languages after English.

Boots to Business Training for Veterans

If enacted, the bill would fund a 'Boots to Business' entrepreneurship program through September 30, 2028. The program would provide training and courses to service members, veterans, TAP participants, and eligible family members. Grants and specific services would depend on available appropriations and require coordination with existing veteran business centers.

One-year NASA lease extension

If enacted, NASA's authority to lease non‑excess real property would be extended by one year, moving the expiration from December 31, 2032 to December 31, 2033. This preserves NASA's ability to enter such leases through the later date.

Protect House whistleblower identities

If enacted, House members and staff would be barred from knowingly and willfully publicly disclosing the identity or personally identifiable information of someone who reported alleged wrongdoing to Congress. Exceptions include the person's written consent, that the person already publicly disclosed their identity, or a two‑thirds committee vote that disclosure is in the public interest, with safeguards and notice.

Study on Foreign Ownership of Ports

If enacted, the Federal Maritime Commission Chair would arrange a study within 90 days to evaluate foreign ownership at the 15 largest U.S. container ports and submit recommendations within one year. The study must review ownership changes, instances of foreign control, federal grants to foreign-owned terminals, and offer policy recommendations to prevent excessive foreign ownership and protect supply chains.

New timing for government 457(b)

If enacted, elections to defer pay under governmental 457(b) plans would be more time‑limited. For eligible employers described in the statute, deferral agreements must be entered before the compensation is currently available; in other cases deferral for a calendar month must be agreed before that month begins. The change applies for taxable years beginning after enactment.

Three-year birth and adoption recontributions

If enacted, you would have three years from the day after a qualified birth or adoption distribution to repay that distribution. The bill treats this rule as if it had been included in the original SECURE Act change. This narrows the repayment timing to a clear three‑year window.

House Committees Must Hold Hearings

If enacted, each standing House committee would be required to hold a hearing on how this Act is being implemented within one year of enactment. The requirement would be made part of House rules, subject to the House's right to change its rules later. This creates a formal congressional check on implementation.

New DHS review for nonstandard grants

If enacted, DHS grant applicants who want to buy equipment that does not meet national voluntary consensus standards must include explanations. DHS would use a uniform review process considering factors like capability gaps, international standards, and Federal use. The DHS Inspector General must report within three years on requests evaluated, granted, or denied and on processing times.

Six One‑Million Dollar Appropriations

If enacted, the bill would provide six separate $1,000,000 appropriations for specified agency activities for the fiscal year ending September 30, 2026. Two of the awards (Energy Information Administration and State Capital Investment Fund) would remain available until expended. HRSA telehealth funds would remain available through September 30, 2025.

Sponsors & CoSponsors

Sponsor

Magaziner, Seth [D-RI-2]

RI • D

Cosponsors

There are no cosponsors for this bill.

Roll Call Votes

No roll call votes available for this bill.

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