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S2217119th CongressWALLET

Independent Retirement Fairness Act

Sponsored By: Senator Cassidy, Bill [R-LA]

Introduced

Summary

Expands retirement access for independent workers. It would let gig and contract workers join pooled employer plans and Simplified Employee Pensions while adding pilot tools and audit changes to make plans easier to run.

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  • Independent workers would be able to enroll in pooled employer plans and be treated like employees for SEP purposes when an employer elects that option. Pilot programs would allow round-up contributions or automatic periodic deductions into a pooled employer plan, a solo 401(k), or a "suspension account".
  • Trade associations and an independent worker's employer could enroll workers and share the data needed to establish and maintain pooled plans. The bill clarifies that participation or contributions alone do not create an employer–employee relationship under federal, state, or local law.
  • Plan sponsors and auditors get simpler rules. SEP rules are adjusted so employers can apply special participation and bonus-contribution treatments for independent workers and audits would focus only on each employer's portion and on limits tied to separate trusts in groups of plans.

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Bill Overview

Analyzed Economic Effects

3 provisions identified: 3 benefits, 0 costs, 0 mixed.

More SEP and savings options for independent workers

This bill would let an employer elect to treat an independent worker like an employee for certain SEP rules for taxable years after enactment. Employers could exclude or separately treat independent workers for some participation and size tests. Independent workers could ask to have a cash bonus put into their SEP account instead of paid in cash. The bill would create a defined "suspension account" where round-down or automatic pilot deposits could sit, let workers move money from that account into a pooled plan or a SEP, and require any amounts left at year end to be returned in a lump sum. Treasury and Labor would also run pilots to let independent workers round down pay or set up automatic regular contributions into pooled plans, solo 401(k)s, or suspension accounts.

Pooled retirement plans for independent workers

This bill would let independent workers join pooled employer retirement plans and be treated like plan participants. It would let trade associations enroll independent workers as if the association were an employer. Employers or trade groups could share data needed to set up and run the plan. If enacted, joining a pooled plan or getting contributions would not by itself make an independent worker an employee under federal, state, or local law.

New audit rules for pooled employer plans

This bill would change audit rules for pooled employer plans and groups of plans. Auditors would use the same accounting approach as for pooled employer plan opinions and would only cover the portions tied to a participating employer as if that portion were a single-employer plan. Auditors would also have to account for limits on using plan assets for each plan and note if plans keep separate trusts. The opinion rule for pooled plans would apply to plan years starting after enactment.

Sponsors & CoSponsors

Sponsor

Cassidy, Bill [R-LA]

LA • R

Cosponsors

There are no cosponsors for this bill.

Roll Call Votes

No roll call votes available for this bill.

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