Sec. 201. Starter 401(k) plans for employers with no retirement plan
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401(k) plans for employers with no retirement plan Section 401(k) is amended by adding at the end the following new paragraph: 401(k) deferral-only plans for employers with no retirement plan A starter 401(k) deferral-only arrangement maintained by an eligible employer shall be treated as meeting the requirements of paragraph (3)(A)(ii). 401(k) deferral-only arrangement For purposes of this paragraph, the term starter 401(k) deferral-only arrangement means any cash or deferred arrangement which meets— the automatic deferral requirements of subparagraph (C), the contribution limitations of subparagraph (D), and the requirements of subparagraph
(E)of paragraph (13). The requirements of this subparagraph are met if, under the arrangement, each employee eligible to participate in the arrangement is treated as having elected to have the employer make elective contributions in an amount equal to a qualified percentage of compensation. The election treated as having been made under clause
(i)shall cease to apply with respect to any employee if such employee makes an affirmative election— to not have such contributions made, or to make elective contributions at a level specified in such affirmative election. For purposes of this subparagraph, the term qualified percentage means, with respect to any employee, any percentage determined under the arrangement if such percentage is applied uniformly and is not less than 3 or more than 15 percent. The requirements of this subparagraph are met if, under the arrangement— the only contributions which may be made are elective contributions of employees described in subparagraph (C), and the aggregate amount of such elective contributions which may be made with respect to any employee for any calendar year shall not exceed $8,000. In the case of any calendar year beginning after December 31, 2014, the $8,000 amount under clause
(i)shall be adjusted in the same manner as under section 402(g)(4), except that 2013 shall be substituted for 2005 . For catch-up contributions for individuals age 50 or over, see section 414(v)(2)(B)(ii). For purposes of this paragraph— The term eligible employer means any employer which, during the first plan year of the cash or deferred arrangement described in subparagraph (B), does not maintain any other qualified plan. An employer treated as an eligible employer under the preceding sentence shall be treated as an eligible employer with respect to the arrangement for any subsequent plan year without regard to whether it maintains another qualified plan. The term qualified plan means a plan, contract, pension, account, or trust described in subparagraph
(A)or
(B)of paragraph
(5)of section 219(g) (determined without regard to the last sentence of such paragraph (5)). . Section 414(v)(2)(B) is amended by inserting , 401(k)(14), after 401(k)(11) each place it appears. Section 414(v)(3)(B) is amended by inserting 401(k)(14), after 401(k)(11), . Section 104(a)(2)(A) of the Employee Retirement Income Security Act of 1974 ( 29 U.S.C. 1024(a)(2) ) is amended by inserting or for any pension plan which is a starter 401(k) deferral-only arrangement described in before the period at the end. section 401(k)(14)(B) of the Internal Revenue Code of 1986 Clause
(i)of section 416(g)(4)(H) is amended by striking or 401(k)(13) and inserting 401(k)(13), or 401(k)(14) . The amendments made by this section shall apply to plan years beginning after December 31, 2013.
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Sec. 201
Starter 401(k) plans for employers with no retirement plan
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