Sec. 3. Mandatory transfers of rollover distributions
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Subparagraph
(B)of section 404(c)(3) of the Employee Retirement Income Security Act of 1974 ( 29 U.S.C. 1104(c)(3) ) is amended by striking the period at the end and inserting “, and, to the extent the Secretary provides in guidance or regulations issued after the enactment of the Retirement Savings Lost and Found Act of 2020 , is made to— a target date or life cycle fund held under such account; as described in section 2550.404a–2 of title 29, Code of Federal Regulations, an investment product held under such account designed to preserve principal and provide a reasonable rate of return; the Director of the Retirement Savings Lost and Found for investment in accordance with section 4(b)(1)(B) of the Retirement Savings Lost and Found Act of 2020 , or an individual retirement account (as defined in section 408(a) of such Code) established by the Secretary of the Treasury on behalf of the participant or beneficiary, but only if all applicable reporting requirements are met with respect to such transfer; or such other option as the Secretary may so provide. . Not later than 270 days after the date of the enactment of this Act, the Secretary of Labor shall promulgate regulations identifying the target date or life cycle funds, or specifying the characteristics of such a fund, that will be deemed to meet the requirements of section 404(c)(3)(B)(i) of the Employee Retirement Income Security Act of 1974 ( 29 U.S.C. 1104(c)(3)(B) ), as amended by paragraph (1). Sections 401(a)(31)(B)(ii) and 411(a)(11)(A) of the Internal Revenue Code of 1986 and section 203(e)(1) of the Employee Retirement Income Security Act of 1974 are each amended by striking $5,000 and inserting $6,000 . Subparagraph
(B)of section 401(a)(31) of such Code is amended by adding at the end the following new clauses: In the case of a trust which is part of an eligible plan, such trust shall not be a qualified trust under this section unless such plan provides that, if a participant in the plan separates from the service covered by the plan and the nonforfeitable accrued benefit described in clause
(ii)is not in excess of $1,000, the plan administrator shall (either separately or as part of the notice under section 402(f)) notify the participant that the participant is entitled to such benefit or attempt to pay the benefit directly to the participant. If, after a plan administrator takes the action required under clause (iii), the participant does not— within 6 months of the notification under such clause, make an election under subparagraph
(A)or elect to receive a distribution of the benefit directly, or accept any direct payment made under such clause within 6 months of the attempted payment, the plan administrator shall transfer the amount of such benefit to the Director of the Retirement Savings Lost and Found established under section 4 of the Retirement Savings Lost and Found Act of 2020 or to an individual retirement account (as defined in section 408(a)) established by the Secretary on behalf of the individual. For purposes of determining the income tax treatment of transfers to the Director of the Retirement Savings Lost and Found under clause (iv)— such a transfer shall be treated as a transfer to an individual retirement plan under clause (i), and the distribution of such amounts by the Director of the Retirement Savings Lost and Found shall be treated as a distribution from an individual retirement plan. . The amendments made by this subsection shall apply to vested benefits with respect to participants who separate from service connected to the plan in plan years beginning after the second December 31 occurring after the date of the enactment of this Act. Nothing in this Act shall be interpreted to prohibit a plan administrator from transferring the accounts of missing participants to the Pension Benefit Guaranty Corporation pursuant to section 4050 of the Employee Retirement Income Security Act of 1974.
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Sec. 3
Mandatory transfers of rollover distributions
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