H.R. 4637

Small businesses Add Value for Employees Act of 2017 or the SAVE Act of 2017

This bill amends the Internal Revenue Code to modify the requirements for employer-established individual retirement accounts (IRAs) and pension plans.

With respect to SIMPLE (Savings Incentive Match Plan for Employees) IRAs, the bill:

• repeals restrictions on rollovers to retirement plans,
• allows employers to terminate the plan at any time during the year,
• repeals the increased penalty on early distributions, and
• allows additional contributions.

The bill also:

• establishes automatic deferral IRAs to permit the automatic enrollment of employees earning at least $5,000 for the preceding year,
• establishes secure deferral arrangements for automatically enrolling employees at a rate of at least 6% of pay with annual increases and specified matching contributions,
• allows small employers a tax credit for the cost of adopting safe harbor requirements for automatic contribution arrangements,
• allows unused benefits in a flexible spending arrangement to be transferred to a retirement or deferred compensation plan,
• increases the tax credit for small employer pension plan startup costs, and
• establishes multiple small employer retirement plans that provide for automatic employee contributions.

The Department of the Treasury must: (1) modify requirements for the timing of notices to participants in automatic contribution pension plans, and (2) develop specified financial educational materials.

The bill amends the Employee Retirement Income Security Act of 1974 (ERISA) to: (1) exempt IRAs that permit payroll deductions from additional pension plan requirements, (2) require disclosures relating to lifetime income from pension plans and annuities, and (3) set forth safe harbor criteria for the selection of an annuity contract and an insurer.