H.R. 2696

119th CONGRESS 1st Session

To establish the American Worker Retirement Plan, improve the financial security of working Americans by facilitating the accumulation of wealth, and for other purposes.

IN THE HOUSE OF REPRESENTATIVES · April 7, 2025 · Sponsor: Mr. Smucker

Sec. 1. Short title; table of contents.

(a) Short title
- This Act may be cited as the Retirement Savings for Americans Act of 2025.
(b) Table of contents

Sec. 2. Definitions.

As used in this Act, except as otherwise provided:

The term means an account established and maintained under section 107.
The term means the American Worker Retirement Investment Board established under section 201.
The term means any entity, including any sole proprietor, partnership, limited liability company, or corporation, that engages in interstate commerce. business
The term , when used with respect to the Fund, means the amount of the gain realized or yield received from the investment of sums in such Fund. earnings
The term means the Executive Director appointed under section 203.
The term means— existing retirement plan
The term means the American Worker Retirement Fund established under section 101(a).
The term means the council established under section 202. Investment Advisory Council
The term , as used with respect to the Fund, includes the amount of any loss resulting from the investment of sums in such Fund, or from the breach of any responsibility, duty, or obligation under section 206.
The term means the excess of earnings over losses. net earnings
The term means the excess of losses over earnings. net losses
The term means any qualifying worker who is enrolled to participate in the Fund under section 104(a) and has not opted out of participation under section 104(b)(3). participant
The term means any business that— participating employer
The term means— qualifying worker

Except as otherwise provided in this Act, the funds payable under the Fund to participants and former participants are in addition to the benefits payable under the Social Security Act (). 42 U.S.C. 301 et seq.

Sec. 4. Government benefits.

In the case of an individual who has not attained age 65, the funds owned by such individual in an account and any contribution made to such funds by a participant or the Secretary of the Treasury shall not be taken into consideration when determining such individual’s eligibility for any Federal public assistance benefit.

Title I—The American Worker Retirement Plan

Sec. 101. The American Worker Retirement Fund.

(a) Establishment
- There is established in the Treasury of the United States the American Worker Retirement Fund.
(b) Purposes
- The Fund shall consist of the sum of all amounts contributed under section 105 of this Act and of the Internal Revenue Code of 1986, as added by this Act, increased by the total net earnings from investments of the sums in the Fund or reduced by the total net losses from investments of the Fund, and reduced by the total amount of payments made from the Fund (including payments for administrative expenses under subsection (e)). section 25F
(c) Investment
- The sums in the Fund shall remain available without fiscal year limitation—
  - to invest pursuant to section 102;
  - to pay the administrative expenses of the Fund under subsection (e);
  - to make distributions as provided in section 106;
  - to make loans as authorized under section 106(h); and
  - to purchase insurance as provided in section 209.
(d) Accounts
- Each participant shall have an account with the Fund. Amounts contributed by a participant under section 105 and by the Secretary of the Treasury under of the Internal Revenue Code of 1986 shall be deposited in the Fund and credited to the participant’s account in accordance with such procedures as the Secretary of the Treasury may, in consultation with the Executive Director, prescribe in regulation. section 25F
(e) Administrative expenses
- Administrative expenses (including expenses related to financial literacy requirements under section 201(f)(5)) incurred to carry out this Act shall be paid out of the net earnings of the Fund, including earnings attributed to returned credit amounts under of the Internal Revenue Code of 1986. section 25F(h)
(f) Exclusive benefit
- (1) In general
  - Subject to paragraphs (2) and (3) and subsection (e), sums in the Fund credited to the accounts of a participant or former participant may not be used for, or diverted to, purposes other than for the exclusive benefit of the participant or former participant, or a beneficiary thereof, except as otherwise provided by law.
- (2) Assignment
  - Except as provided in paragraph (3), sums in the Fund may not be assigned or alienated and are not subject to execution, levy, attachment, garnishment, or other legal process. For purposes of this paragraph, a loan made from the Fund to a participant shall not be considered to be an assignment or alienation.
- (3) Legal obligations
  - Moneys due or payable from the Fund to any individual and, in the case of an individual who is a participant or former participant, the balance in the account of the participant or former participant shall be subject to—
    - legal process for the enforcement of the individual’s legal obligation to provide child support or make alimony payments as provided in section 459 of the Social Security Act (); 42 U.S.C. 659
    - an obligation of the Executive Director to make a payment to another person under section 109; and
    - any Federal tax levy under of the Internal Revenue Code of 1986. section 6331
  - For the purposes of this paragraph, an amount contributed for the benefit of a participant or former participant under of the Internal Revenue Code of 1986 (including any earnings attributable thereto) shall be considered part of the balance in such participant or former participant’s account. section 25F
(g) Non-Appropriated funds
- The sums in the Fund shall not be appropriated for any purpose other than the purposes specified in this section and may not be used for any other purpose.
(h) Benefit to participants
- All sums contributed to the Fund by a participant or the Secretary of the Treasury for the benefit of such participant and all net earnings in such Fund in trust for such participant shall be the exclusive property of the participant.
(i) Nonforfeitable
- All the contributions made under section 105 and of the Internal Revenue Code of 1986 shall be fully nonforfeitable when made, except as provided in section 25F(h) of such Code. section 25F

Sec. 102. Investment of American Worker Retirement Fund.

(a) In general
- The Board shall establish the investment policies of the Fund and select the investment funds, indexes, and other investment products that the amounts in the Fund shall be invested in subject to the following conditions:
  - The Board shall provide for the following investment options for participants:
    - A Government Securities Investment Fund under which sums in the Fund are invested in—
      - (i) bonds issued or guaranteed by the United States Government; and
      - (ii) bonds issued by Government-sponsored enterprises or Government corporations.
    - A Fixed-Income Investment Fund under which sums are in the Fund are invested in—
      - (i) insurance contracts;
      - (ii) certificates of deposit; and
      - (iii) other instruments or obligations selected by qualified professional asset managers (as defined in section 8438(a)(8) of title 5, United States Code),
    - which return the amount invested and pay interest, at a specific rate or rates, on that amount during a specific period of time.
    - A Common Stock Index Investment Fund, as described in section 8438(b)(2) of title 5, United States Code.
    - A Small Capitalization Stock Index Investment Fund, as described in section 8438(b)(3) of title 5, United States Code.
    - An International Stock Index Investment Fund, as described in section 8438(b)(4) of title 5, United States Code.
    - A Life-Cycle Investment Fund consisting of target date asset allocation portfolios.
  - The Board may, in its discretion, provide for other investment options for participants consistent with the Board’s fiduciary duty set forth in sections 201 and 206.
  - The Board shall consult with the Investment Advisory Council before authorizing additional investment options for participants.
(b) Investments
- (1) Investment selection
  - The Executive Director shall invest the sums available in the Fund for investment as provided in the selection made under subsection (c).
- (2) Default option
  - If a selection has not been made with respect to any sums available for investment in the Fund, the Executive Director shall invest such sums in an age-appropriate Life-Cycle Investment Fund, as determined by the Executive Director.
(c) Investment selection
- As often as is practical, but not less than twice per year, a participant may select the investment funds and options referred to in subsection (a) into which the amounts in the Fund credited to the participant’s accounts are to be invested or reinvested. A selection may be made under this subsection only in accordance with regulations prescribed by the Executive Director and within such period as the Executive Director shall provide in such regulations, but in no event less frequently than twice a year.
(d) Voting rights
- Participants, former participants, the Board, and the Executive Director may not exercise voting rights associated with the ownership of securities by the Fund.
(e) Reports
- The Board shall issue regular reports (not less frequently than quarterly) to participants and former participants on the performance of each investment option selected under subsection (a), which shall include personalized estimates of assets and income at retirement, the additional assets and income at retirement a participant would have if the participant makes sufficient contributions to receive the maximum amount of the Government match tax credit under of the Internal Revenue Code of 1986, and any other information the Board determines may help participants make sound financial decisions. The Board shall provide the reports required under this subsection by electronic delivery, except that upon the request of a participant or former participant, reports shall be provided by mail to such individual. section 25F

Sec. 103. Eligibility.

(a) Eligibility
- A qualifying worker shall be eligible to participate in the Fund upon completion of the enrollment process set forth in section 104.
(b) Cessation of eligibility
- A former participant shall not be eligible to contribute to the Fund under section 105(a) but shall remain the owner of the funds in the former participant’s account with the Fund (and any net earnings attributable to such funds) subject to the withdrawal conditions established under section 106, and may exercise investment decisions with respect to such account on the same basis as a participant.

Sec. 104. Enrollment.

(a) Enrollment
- (1) In general
  - The Secretary of the Treasury and the Executive Director shall jointly establish an enrollment process for participating employers to enroll qualifying workers to participate in the Fund that incorporates, to the extent practicable, such enrollment and participant contributions under section 105(a) into Federal tax withholding forms and payments. Such process shall provide that a business operating on the date of the establishment of the Fund shall complete such enrollment process for any qualifying worker as of such time no later than the date that is 1 year from such date.
- (2) Independent contractors
  - (A) In general
    - In the case of independent contractors who are qualifying workers, the enrollment process shall allow businesses who have contracts with such qualifying workers to elect to enroll such qualifying workers to participate in the Fund.
  - (B) Classification
    - An election (or failure to make an election) by a business under subparagraph (A) with respect to any independent contractor who is a qualifying worker shall not be relevant to the classification of such worker as an independent contractor under any Federal, State, or local law.
(b) Auto-Enrollment; opt-Out
- (1) In general
  - Each participating employer shall enroll each of its qualifying workers to participate in the Fund under subsection (a) unless such qualifying worker elects to opt out of participating pursuant to paragraph (3). A qualifying worker who is a sole proprietor or independent contractor shall enroll or elect to opt out of participating pursuant to paragraph (3).
- (2) Automatic contribution rates
  - Each qualifying worker enrolled under paragraph (1) shall be automatically enrolled to make contributions under section 105(a) at the default percentage of 3 percent of the qualifying worker’s compensation from the employer for such period as shall be established by regulation under section 105(a)(3).
- (3) Opt-out
  - A qualifying worker may elect to opt out of participating in the Fund pursuant to procedures established jointly by the Secretary of the Treasury and the Executive Director as part of the regulations governing the enrollment process set forth in subsection (a). If a qualifying worker elects to opt out of participating in the Fund, such qualifying worker shall not be enrolled in subsequent years unless the qualifying worker elects to participate in the Fund. The Secretary of the Treasury and the Executive Director shall determine procedures to establish accounts for qualifying workers who elect to opt out of participating in the Fund who are determined to be eligible for automatic contributions or who would make contributions otherwise allowable by law outside the withholding process.
(c) Penalties
- (1) Penalty
  - A participating employer who fails to enroll a qualifying worker pursuant to subsection (b) or fails to deposit in the Fund the amount of a participant’s contributions under section 105(a) shall be subject to a penalty equal to the applicable penalty percentage of the amount of the contributions by the qualifying worker or participant, as the case may be, that the participating employer fails to deposit due to failure to enroll the qualifying worker or otherwise deposit such funds. The Secretary of the Treasury and the Executive Director shall jointly prescribe regulations under which a participating employer shall be required to pay to the Fund amounts representing lost earnings resulting from errors made by such participating employer in carrying out this section.
- (2) Applicable penalty percentage
  - The term means— applicable penalty percentage
    - 2 percent if the failure is for not more than 5 days;
    - 5 percent if the failure is for more than 5 days but not more than 15 days; and
    - 10 percent if the failure is for more than 15 days.
- (3) Funds
  - The Secretary of the Treasury shall credit to the Fund, out of any sums in the Treasury not otherwise appropriated, the amount determined by the Executive Director to be necessary to carry out this section and section 105(d).

Sec. 105. Contributions.

(a) Contributions by participants
- (1) In general
  - Pursuant to the regulations established under paragraph (3) and subsection (e), a participant may make contributions to the participant’s account with the Fund in any pay period in an amount not to exceed the participant’s compensation for such period.
- (2) Other participant contributions
  - (A) Catch-up contributions
    - Notwithstanding the limitation under paragraph (1) or subsection (c), a participant may make such additional contributions to the participant’s account with the Fund as are permitted by of the Internal Revenue Code of 1986, and the regulations established under subsection (e) consistent therewith. section 414(v)
  - (B) Contributions of tax refunds
    - (i) Subject to the limits of subsection (c), a participant may elect, at such time and in such manner as the Secretary of the Treasury may prescribe, to contribute to the participant's account any portion of such participant's overpayment of tax which is to be refunded to such participant under of the Internal Revenue Code of 1986. section 6402
    - In general
    - (ii) For purposes of clause (i)—
    - the amount of the overpayment which may be contributed under clause (i) shall be determined without regard to any overpayment attributable to the amount contributed to the account by the Secretary of the Treasury under of the Internal Revenue Code of 1986, and section 25F
    - any contribution described in clause (i) shall be treated as made for the taxable year of the overpayment and shall be taken into account in determining the amount of the credit under section 25F for such taxable year.
- (3) Contributions
  - The Secretary of the Treasury and the Executive Director shall jointly prescribe regulations that establish a program of regular contribution under which participants may—
    - make contributions to their accounts with the Fund under paragraph (1);
    - modify the amount contributed under such paragraph; or
    - terminate such contributions.
- (4) Election
  - An election to make contributions under this subsection—
    - may be made at any time;
    - shall take effect on the earliest date after the election that is administratively feasible; and
    - shall remain in effect until modified or terminated.
  - Any such election shall be subject to the contribution limits under this section.
(b) Contribution of Government Match Tax Credit
- A participant’s account shall receive contributions in the form of the Government Match Tax Credit contributed by the Secretary of the Treasury under of the Internal Revenue Code of 1986. section 25F
(c) Contribution limits
- Notwithstanding any other provision of this section, no contribution may be made under this section for any year to the extent that such contribution, when added to prior contributions for such year, exceeds any limitation under of the Internal Revenue Code of 1986. Any contribution made under of the Internal Revenue Code of 1986 shall not be taken into account for purposes of the preceding sentence. section 219(b)(5); section 25F
(d) Treatment as Roth contributions
- Contributions under subsection (a) shall not be excludable from gross income and no deduction shall be allowed with respect to such contributions under of the Internal Revenue Code of 1986. section 219
(e) Regulations
- The amounts contributed to the Fund by a participant under section 105(a) and on behalf of a participant by the Secretary of the Treasury under of the Internal Revenue Code of 1986 shall be deposited in the Fund and credited to the participant’s account with the Fund pursuant to regulations jointly prescribed by the Secretary of the Treasury and the Executive Director. section 25F

Sec. 106. Distributions.

(a) Former participants
- A former participant is entitled to access the amounts in the former participant’s account as provided in this section. Amounts in the account of a former participant shall remain in the Fund until distributed in accordance with subsection (b).
(b) Former participant withdrawal options
- Subject to section 109, a former participant is entitled to and may elect to withdraw from the Fund the balance of the former participant’s account as—
  - an annuity;
  - a single payment;
  - 2 or more substantially equal payments to be made not less frequently than annually; or
  - any combination of payments described in paragraphs (1) through (3) as the Executive Director may prescribe by regulation.
(c) Additional former participant withdrawal options
- (1) In general
  - In addition to the right provided under subsection (b) to withdraw the balance of the account, a former participant may make 1 or more withdrawals of any amount in the same manner as a single payment is made in accordance with subsection (b)(2) from the former participant’s account.
- (2) Transfers to retirement plans
  - (A) In general
    - A former participant may request that the amount withdrawn from the Fund under paragraph (1) be transferred to an existing retirement plan.
  - (B) Transfers
    - The Executive Director shall make each transfer directly to an existing retirement plan identified by the former participant for whom the transfer is made. A transfer shall not be made under the preceding sentence until the Executive Director receives from the former participant the information required by the Executive Director specifically to identify the existing retirement plan to which the transfer is to be made.
- (3) Limitations
  - Withdrawals under this subsection shall be subject to such other limitations or conditions as the Executive Director may prescribe by regulation.
(d) Payment of annuities
- The Board shall prescribe methods of payment of annuities under this Act substantially similar to those provided for under section 8434 of title 5, United States Code.
(e) Former participant changes to elections
- (1) In general
  - Subject to section 109, a former participant may change an election previously made under this section, except that in the case of an election to receive an annuity, a former participant may not change an election under this section on or after the date on which an annuity contract is purchased to provide for the annuity elected by the former participant.
- (2) Distributions made
  - A former participant may not return a distribution once made pursuant to an election under this section.
(f) Survivor rights
- (1) In general
  - If a participant or a former participant dies without having made an election under subsection (b) or after having elected an annuity under subsection (b) but before making an election for payments to a survivor rights under section 8434 of title 5, United States Code, an amount equal to the value of that individual’s account (as of death) shall, subject to any decree, order, or agreement referred to in section 109, be paid in a manner consistent with the requirements of section 109.
- (2) Maintenance of account
  - Notwithstanding section 109, if a participant or former participant dies and has designated as sole or partial beneficiary the spouse of the participant or former participant at the time of death, or, if a participant or former participant dies with no designated beneficiary and is survived by a spouse, the spouse may maintain the portion of the participant or former participant’s account to which the spouse is entitled in accordance with the following terms:
    - Subject to the limitations of subparagraph (B), the spouse shall have the same withdrawal options under subsection (b) as a former participant.
    - The spouse may not make withdrawals under subsection (h) or (i).
    - The spouse may not make contributions or transfers to the account.
    - The account shall be disbursed upon the death of the surviving spouse of the participant or former participant and shall not be maintained by a beneficiary or surviving spouse of the surviving spouse who inherited the account.
- (3) Regulations
  - The Executive Director shall prescribe regulations to carry out this subsection.
(g) Small Balance Accounts
- Notwithstanding subsection (b), if a former participant’s account balance is less than an amount that the Executive Director prescribes by regulation, the Executive Director shall pay the nonforfeitable account balance to the participant in a single payment. The Executive Director may prescribe more than 1 balance amount for payment under this subsection based on age of the former participant.
(h) Loans
- (1) In general
  - A participant or former participant may apply to the Board for permission to borrow from the participant or former participant’s account an amount not exceeding the value of that portion of such account which is attributable to contributions made by the participant or former participant. Before a loan is issued, the Executive Director shall provide to the participant or former participant in writing with appropriate information concerning the cost of the loan relative to other sources of financing, as well as the lifetime cost of the loan, including the difference in interest rates between the funds offered by the Fund and any other effect of such loan on the participant or former participant’s final account balance.
- (2) Special rules
  - (A) In general
    - Loans under this subsection shall be available to all participants and former participants on a reasonably equivalent basis, and shall be subject to such other conditions as the Board may prescribe by regulation, which shall be as equivalent as practically possible to those provided for under the Thrift Savings Plan. The restrictions of section 206(c)(1) shall not apply to loans made under this subsection.
  - (B) Limitation based on tax treatment
    - A loan may not be made under this subsection to the extent that the loan would be treated as a taxable distribution under of the Internal Revenue Code of 1986. section 72(p)
  - (C) Spousal protections
    - A loan may not be made under this subsection unless the requirements of section 109 are satisfied.
(i) Voluntary distributions
- (1) In general
  - A participant may apply, before becoming a former participant, to the Board for permission to withdraw an amount from the participant’s account based upon—
    - the participant having attained age 59; or
    - financial hardship.
- (2) Limitations
  - A withdrawal under paragraph (1)(B) shall be available only for an amount not exceeding the value of that portion of such account which is attributable to contributions made by the participant. Withdrawals under paragraph (1) shall be subject to such other limitations or conditions as the Executive Director may prescribe by regulation, which shall be as equivalent as practically possible to those provided for under the Thrift Savings Plan.
- (3) Spousal protections
  - A withdrawal may not be made under this subsection unless the requirements of section 109 are satisfied.
(j) Involuntary distributions
- (1) In general
  - A participant shall receive a distribution from the Fund if the participant’s gross income for a taxable year exceeds the dollar threshold (as adjusted by the Secretary of the Treasury) established under of the Internal Revenue Code of 1986. section 414(q)(1)(B)
- (2) Amount of distribution
  - The amount of a distribution under paragraph (1) shall be equal to the sum of such participant’s contributions to the Fund for the taxable year for which such distribution is required under paragraph (1), increased by any gains attributable to such contributions, and decreased by any losses attributable to such contributions, any early withdrawal penalties, and any expenses associated with making such distribution.
- (3) Process for distribution
  - (A) Notice to participant
    - The Executive Director shall provide notice to a participant subject to a distribution under paragraph (1) not later than 7 days after the Executive Director determines that such participant is subject to such distribution, based on information regarding participants' gross income provided by the Secretary of the Treasury.
  - (B) Method of distribution
    - Not later than 30 days after receiving notice under subparagraph (A), a participant may elect to direct that a distribution under paragraph (1) be made—
      - (i) in the case of an eligible rollover distribution (as defined in of the Internal Revenue Code of 1986), to an eligible retirement plan (as defined in such section of such code); or section 402(c)
      - (ii) directly to such participant.
  - (C) Default election
    - In the case of a participant who fails to make an election within the period described in subparagraph (B), the Executive Director shall make the distribution directly to such participant.
- (4) Tax treatment of involuntary distribution
  - A distribution made under paragraph (1) directly to the participant under subparagraph (B)(ii) or (C) shall be treated as an early distribution from a qualified retirement plan pursuant to of the Internal Revenue Code of 1986 to the extent such distribution does not consist of participant contributions to the Fund. section 72(t)
(k) Treatment as Roth distributions
- The rules of sections 408(d) and 408A(d) of the Internal Revenue Code of 1986 shall apply to distributions from the Fund in the same manner as if such Fund were a Roth IRA. For purposes of the preceding sentence, contributions made under section 25F of such Code shall be treated as employer contributions which were not includible in gross income.

Sec. 107. Accounts.

(a) In general
- The Executive Director shall establish and maintain an account for each participant who makes contributions under section 105(a), or for whom contributions are made under of the Internal Revenue Code of 1986, to the Fund. section 25F
(b) Account balances
- The balance in a participant’s account is the excess of—
  - the sum of—
    - all contributions made to the Fund by the participant under section 105(a);
    - all contributions made to the Fund for the benefit of the participant by the Secretary of the Treasury under of the Internal Revenue Code of 1986; and section 25F
    - the total amount of the allocations made to and reduction made in the account pursuant to subsection (c); over
  - the amounts paid out of the Fund with respect to such participant under this title.
(c) Allocation of earnings and losses
- Pursuant to regulation prescribed by the Executive Director, the Executive Director shall allocate to each account an amount equal to a pro rata share of the net earnings and net losses from each investment of sums in the Fund attributed to sums credited to such account, reduced by the appropriate share of the administrative expenses paid out of the net earnings under section 101(e) as determined by the Executive Director.

Sec. 108. Tax treatment.

Except as otherwise provided in this Act, for purposes of the Internal Revenue Code of 1986, rules similar to the rules that apply with respect to the Thrift Savings Fund (including the rules of section 8440 of title 5, United States Code) shall apply with respect to the American Worker Retirement Fund.

Sec. 109. Spousal protections; survivor rights.

The provisions for spousal protections and court orders under section 8435 and 8467 of title 5, United States Code, respectively, shall apply in the same manner to governance of the Fund and to accounts of participants and former participants as such sections are applied with respect to the Thrift Savings Plan and its accounts. The Executive Director shall issue regulations that establish spousal protections and survivor rights with respect to participants and former participants that are as equivalent as practically possible to those provided for under the Thrift Savings Plan pursuant to of title 5, United States Code. chapter 84

Title II—The American Worker Retirement Plan Investment Management System

Sec. 201. The American Worker Retirement Investment Board.

(a) Establishment
- There is established in the executive branch of the Government the American Worker Retirement Investment Board.
(b) Composition
- The Board shall be composed of—
  - 3 members appointed by the President, of whom 1 shall be designated by the President as Chair;
  - 1 member appointed by the President after taking into consideration the recommendation made by the majority leader of the Senate in consultation with the minority leader of the Senate; and
  - 1 member appointed by the President after taking into consideration the recommendation made by the Speaker of the House of Representatives in consultation with the minority leader of the House of Representatives.
(c) Senate confirmation
- Appointments under subsection (b) shall be made with the advice and consent of the Senate.
(d) Qualifications
- (1) In general
  - Members of the Board shall have substantial experience, training, and expertise in the management of financial investments and pension benefit plans.
- (2) Disqualification
  - No member of the Board may be an officer or employee of the Federal Government.
(e) Terms; vacancies
- (1) Terms
  - A member of the Board shall be appointed for a term of 4 years, except that of the members first appointed under subsection (b)—
    - the Chair shall be appointed for a term of 4 years;
    - the members appointed under paragraphs (2) and (3) of subsection (b) shall be appointed for terms of 3 years; and
    - the remaining members shall be appointed for terms of 2 years.
- (2) Vacancies
  - (A) In general
    - A vacancy on the Board shall be filled in the manner in which the original appointment was made and shall be subject to any conditions which applied with respect to the original appointment.
  - (B) Term
    - An individual chosen to fill a vacancy shall be appointed for the unexpired term of the member replaced.
  - (C) Expiration
    - The term of any member shall not expire before the date on which the member’s successor takes office.
(f) Board duties
- The Board shall—
  - establish policies for—
    - the investment and management of the Fund; and
    - the administration of title I of this Act;
  - hire and set the compensation for the Executive Director;
  - review the performance of investments made for the Fund;
  - review and approve the budget of the Board; and
  - develop evidence-based financial literacy requirements for participants in the Fund, including requirements for financial literacy interventions to occur prior to a participant—
    - taking an early withdrawal from their account at the Fund pursuant to section 106(i); and
    - taking a loan from such account pursuant to section 106(h).
(g) Board authorities; investment limitations
- (1) In general
  - The Board may—
    - adopt, alter, and use a seal;
    - except as provided in paragraph (2), direct the Executive Director to take such action as the Board considers appropriate to carry out the provisions of this Act and the policies of the Board;
    - upon the concurring votes of 4 members, remove the Executive Director from office for good cause shown; and
    - take such other action as may be necessary to carry out the functions of the Board.
- (2) Exception
  - Except in the case of investments under section 102(b)(2), the Board may not direct the Executive Director to invest or to cause to be invested any sums in the Fund in a specific asset or to dispose of or cause to be disposed of any specific asset of such Fund.
(h) Board responsibilities
- The members of the Board shall discharge their responsibilities under this Act solely in the interest of participants and beneficiaries.
(i) Budget
- The Board shall prepare and submit to the President, and, at the same time, to the appropriate committees of Congress, an annual budget of the expenses and other items relating to the Board which shall be included as a separate item in the budget required to be transmitted to the Congress under section 1105 of title 31, United States Code.
(j) Legislative recommendations
- The Board may submit to the President, and, at the same time, shall submit to each House of the Congress, any legislative recommendations of the Board relating to any of its functions under this title.

Sec. 202. The American Worker Retirement Plan Advisory Council.

(a) Establishment
- The Board shall establish an American Worker Retirement Plan Advisory Council. The Council shall be composed of 7 members appointed by the Chair of the Board in accordance with subsection (b).
(b) Appointment
- The Chair shall appoint 7 members of the Council, of whom—
  - 3 shall be appointed who have experience managing investment funds;
  - 2 shall be appointed who have experience operating small businesses; and
  - 2 shall be appointed who have experience providing investment advice to small businesses and low-income workers.
(c) Head of council; terms; vacancies
- (1) In general
  - The Chair of the Board shall designate 1 member of the Council to serve as head of the Council.
- (2) Term
  - A member of the Council shall be appointed for a term of 4 years.
- (3) Vacancies
  - (A) In general
    - A vacancy in the Council shall be filled in the manner in which the original appointment was made and shall be subject to any conditions which applied with respect to the original appointment.
  - (B) Term
    - An individual chosen to fill a vacancy shall be appointed for the unexpired term of the member replaced.
  - (C) Expiration
    - The term of any member shall not expire before the date on which the member’s successor takes office.
(d) Majority approval
- The Council shall act by resolution of a majority of the members.
(e) Duties
- The Council shall—
  - advise the Board and the Executive Director on matters relating to—
    - investment policies for the Fund; and
    - the administration of title I of this Act; and
  - perform such other duties as the Board may direct with respect to investment funds established in accordance with title I.

Sec. 203. Executive Director.

(a) In general
- (1) Appointment
  - The Board shall appoint, without regard to the provisions of law governing appointments in the competitive service, an Executive Director by action agreed to by a majority of the members of the Board.
- (2) Qualifications
  - The Executive Director shall have substantial experience, training, and expertise in the management of financial investments and pension benefit plans.
(b) Duties
- The Executive Director shall—
  - carry out the policies established by the Board;
  - invest and manage the Fund in accordance with investment policies and other policies established by the Board;
  - administer the provisions of this Act;
  - prescribe such regulations (other than regulations relating to fiduciary responsibilities) as may be necessary for the administration of this Act;
  - meet from time to time with the Council upon the request of the Council; and
  - enforce the financial literary requirements established by the Board pursuant to 201(f)(5).
(c) Authorities
- The Executive Director may—
  - prescribe such regulations as may be necessary to carry out the responsibilities of the Executive Director under this section, other than regulations relating to fiduciary responsibilities;
  - appoint such personnel as may be necessary to carry out the provisions of this Act;
  - subject to approval by the Board, procure the services of experts and consultants under section 3109 of title 5, United States Code;
  - make such payments out of sums in the Fund as the Executive Director determines are necessary to carry out the provisions of this Act and the policies of the Board;
  - pay the compensation, per diem, and travel expenses of individuals appointed under paragraphs (2), (3), and (7) of this subsection from the Fund;
  - except as otherwise expressly prohibited by law or the policies of the Board, delegate any of the Executive Director’s functions to such employees under the Board as the Executive Director may designate and authorize such successive redelegations of such functions to such employees under the Board as the Executive Director may consider to be necessary or appropriate; and
  - take such other actions as are appropriate to carry out the functions of the Executive Director.

Sec. 204. Investment policies and selection of asset managers.

(a) Investment Policies
- The Board shall develop investment policies under section 201(f)(1) which provide for—
  - prudent investments suitable for accumulating funds for payment of retirement income; and
  - low administrative costs.
(b) Asset managers
- The Board shall select asset managers to manage the Fund, subject to the following conditions:
  - The Board shall select a number of asset managers necessary to ensure that no asset manager shall be responsible for managing the greater of—
    - $500,000,000,000; or
    - 10 percent of the Fund’s assets.
  - The Board shall limit any contract with an asset manager to a maximum of 5 years.

Sec. 205. Administrative provisions.

(a) Board meetings
- The Board shall meet—
  - not less than once during each month; and
  - at additional times at the call of the Chair.
(b) Board governance
- (1) In general
  - Except as provided in section 201(g)(1)(C), the Board shall perform the functions and exercise the powers of the Board on a majority vote of a quorum of the Board.
- (2) Quorum
  - 3 members of the Board shall constitute a quorum for the transaction of business.
- (3) Effect of vacancy
  - A vacancy on the Board shall not impair the authority of a quorum of the Board to perform the functions and exercise the power of the Board.
(c) Board compensation
- (1) In general
  - Each member of the Board shall be compensated at the daily rate of basic pay for level IV of the Executive Schedule for each day during which such member is engaged in performing a function of the Board.
- (2) Per diem, etc
  - A member of the Board shall be paid travel, per diem, and other necessary expenses while traveling away from such member’s home or regular place of business in the performance of the duties of the Board.
- (3) Payment from fund
  - Payments authorized under this subsection shall be paid from the Fund as administrative expenses permitted under section 101(e).

Sec. 206. Fiduciary responsibilities; liability and penalties.

(a) Definitions
- For the purposes of this section:
  - The term is not limited by the definition provided in section 2. account
  - The term means— adequate consideration
  - The term means— fiduciary
  - The term includes— party in interest
(b) Duties
- To the extent not inconsistent with the provisions of this Act and the policies prescribed by the Board, a fiduciary shall discharge the fiduciary’s responsibilities with respect to the Fund or applicable portion thereof solely in the interest of the participants and beneficiaries and—
  - for the exclusive purpose of—
    - providing benefits to participants and their beneficiaries; and
    - defraying reasonable expenses of administering the Fund or applicable portions thereof;
  - with the care, skill, prudence, and diligence under the circumstances then prevailing that a prudent individual acting in a like capacity and familiar with such matters would use in the conduct of an enterprise of a like character and with like objectives; and
  - to the extent permitted by section 102, by diversifying the investments of the Fund or applicable portions thereof so as to minimize the risk of large losses, unless under the circumstances it is clearly prudent not to do so.
(c) Ownership jurisdictions
- No fiduciary may maintain the indicia of ownership of any assets of the Fund outside the jurisdiction of the district courts of the United States.
(d) Transactions
- (1) Prohibited transactions
  - A fiduciary shall not permit the Fund to engage in any of the following transactions, except in exchange for adequate consideration:
    - A transfer of any assets of the Fund to any person the fiduciary knows or should know to be a party in interest or the use of such assets by any such persons.
    - An acquisition of any property from or sale of any property to the Fund by any person the fiduciary knows or should know to be a party in interest.
    - A transfer or exchange of services between the Fund and any person the fiduciary knows or should know to be a party in interest.
- (2) Prohibited actions
  - Notwithstanding paragraph (1), a fiduciary with respect to the Fund shall not—
    - deal with any assets of the Fund in the fiduciary’s own interest or for the fiduciary’s own account;
    - act, in an individual capacity or any other capacity, in any transaction involving the Fund on behalf of a party, or representing a party, whose interests are adverse to the interests of the Fund or the interests of its participants or beneficiaries; or
    - receive any consideration of the fiduciary’s own personal account from any party dealing with sums credited to the Fund in connection with a transaction involving assets of the Fund.
- (3) Secretary of Labor
  - (A) In general
    - The Secretary of Labor may, in accordance with procedures which the Secretary of Labor shall by regulation prescribe, grant a conditional or unconditional exemption of any fiduciary or transaction, or class of fiduciaries or transactions, from all or any of the restrictions imposed by paragraph (2). An exemption granted under this subparagraph shall not relieve a fiduciary from any other applicable provision of this Act.
  - (B) Conditions
    - The Secretary of Labor may not grant an exemption under subparagraph (A) unless the Secretary of Labor finds that such exemption is—
      - (i) administratively feasible;
      - (ii) in the interests of the Fund and its participants; and
      - (iii) protective of the rights of participants and beneficiaries of such Fund.
  - (C) Notice
    - An exemption under subparagraph (A) may not be granted unless—
      - (i) notice of the proposed exemption is published in the Federal Register;
      - (ii) interested persons are given an opportunity to present views; and
      - (iii) the Secretary of Labor affords an opportunity for a hearing and makes a determination on the record with respect to the respective requirements of clauses (i), (ii), and (iii) of subparagraph (B).
  - (D) Application of ERISA fiduciary exemptions
    - Notwithstanding subparagraph (C), the Secretary of Labor may determine that an exemption granted for any class of fiduciaries or transactions under section 408(a) of the Employee Retirement Income Security Act of 1974 () shall, upon publication of notice in the Federal Register under this subparagraph, constitute an exemption from the application of paragraph (2). 29 U.S.C. 1108(a)
(e) Nonapplication
- This section does not prohibit any fiduciary from—
  - receiving any benefit which the fiduciary is entitled to receive under this Act as a participant, former participant, or beneficiary;
  - receiving any reasonable compensation authorized by this Act for services rendered, or for reimbursement of expenses properly and actually incurred, in the performance of the fiduciary’s duties under this Act; or
  - serving as a fiduciary in addition to being an officer, employee, agent, or other representative of a party in interest.
(f) Liability
- (1) In general
  - Any fiduciary that breaches the responsibilities, duties, and obligations set out in subsection (b) or violates subsection (c) shall be personally liable to the Fund for any losses to such Fund resulting from each such breach or violation and to restore to such Fund any profits made by the fiduciary through use of assets of such Fund by the fiduciary, and, except as provided in paragraphs (3) and (4), shall be subject to such other equitable or remedial relief as a court considers appropriate. A fiduciary may be removed for a breach referred to in the preceding sentence.
- (2) Civil penalties
  - The Secretary of Labor may assess a civil penalty against a party in interest with respect to each transaction prohibited by subsection (d) which is engaged in by the party in interest. The amount of such penalty shall be equal to 5 percent of the amount involved in each such transaction (as defined in of the Internal Revenue Code of 1986) for each year or part thereof during which the prohibited transaction continues, except that, if the transaction is not corrected (in such manner as the Secretary of Labor shall prescribe by regulation consistent with section 4975(f)(5) of such Code) within 90 days after the date the Secretary of Labor transmits notice to the party in interest (or such longer period as the Secretary of Labor may permit), such penalty may be in the amount of not more than 100 percent of the amount involved. section 4975(f)(4)
- (3) Special rules
  - (A) In general
    - A fiduciary shall not be liable under paragraph (1)—
      - (i) with respect to a breach of fiduciary duty under subsection (b) committed before becoming a fiduciary or after ceasing to be a fiduciary;
      - (ii) for providing for the automatic enrollment of a participant in accordance with section 104;
      - (iii) for enrolling a participant or beneficiary in a default investment fund or option in accordance with section 104; or
      - (iv) for allowing a participant or beneficiary to invest through the mutual fund window or for establishing restrictions applicable to participants’ or beneficiaries’ ability to invest through the mutual fund window.
  - (B) Joint and several liability
    - A fiduciary shall be jointly and severally liable under paragraph (1) for a breach of fiduciary duty under subsection (b) by another fiduciary only if—
      - (i) the fiduciary participates knowingly in, or knowingly undertakes to conceal, an act or omission of such other fiduciary, knowing such act or omission is such a breach;
      - (ii) by the fiduciary’s failure to comply with subsection (b) in the administration of the fiduciary’s specific responsibilities which give rise to the fiduciary status, the fiduciary has enabled such other fiduciary to commit such a breach; or
      - (iii) the fiduciary has knowledge of a breach by such other fiduciary, unless the fiduciary makes reasonable efforts under the circumstances to remedy the breach.
- (4) Allocation of duties
  - The Secretary of Labor shall prescribe, in regulations, procedures for allocating fiduciary responsibilities among fiduciaries, including asset managers. Any fiduciary who, pursuant to such procedures, allocates to any person any fiduciary responsibility shall not be liable for an act or omission of such person unless such fiduciary violated subsection (b) with respect to the allocation, with respect to the implementation of the procedures prescribed by the Secretary of Labor.
- (5) Other civil actions
  - (A) In general
    - No civil action may be maintained against any fiduciary with respect to the responsibilities, liabilities, and penalties authorized or provided for in this section except in accordance with subparagraphs (B) and (C).
  - (B) Actions permitted
    - A civil action may be brought in the district courts of the United States—
      - (i) by the Secretary of Labor against any fiduciary other than a member of the Board or the Executive Director of the Board—
      - to determine and enforce a liability under paragraph (1);
      - to collect any civil penalty under paragraph (2);
      - to enjoin any act or practice which violates any provision of subsection (b) or (c);
      - to obtain any appropriate equitable relief to redress a violation of any such provision; or
      - to enjoin any act or practice which violates subsection (g)(2) or (h) of section 201;
      - (ii) by any participant, beneficiary, or fiduciary—
      - to enjoin any act or practice which violates any provision of subsection (b) or (c);
      - to obtain any other appropriate equitable relief to redress a violation of any such provision; or
      - to enjoin any act or practice which violates subsection (g)(2) or (h) of section 201; or
      - (iii) by any participant or beneficiary—
      - to recover benefits of such participant or beneficiary under the provisions of title I, to enforce any right of such participant or beneficiary under such provisions, or to clarify any such right to future benefits under such provisions; or
      - to enforce a claim otherwise cognizable under sections 1346(b) and 2671 through 2680 of title 28, United States Code, except that the remedy against the United States provided by sections 1346(b) and 2672 of such title 28 for damages for injury or loss of property caused by the negligent or wrongful act or omission of any fiduciary while acting within the scope of the fiduciary’s duties or employment shall be exclusive of any other civil action or proceeding by the participant or beneficiary for recovery of money by reason of the same subject matter against the fiduciary (or the estate of such fiduciary) whose act or omission gave rise to such action or proceeding, whether or not such action or proceeding is based on an alleged violation of subsection (b) or (c).
  - (C) Representation
    - (i) In all civil actions under subparagraph (B)(i), attorneys appointed by the Secretary may represent the Secretary (except as provided in section 518(a) of title 28, United States Code), however, all such litigation shall be subject to the direction and control of the Attorney General.
    - (ii) The Attorney General shall defend any civil action or proceeding brought in any court against any fiduciary referred to in subparagraph (B)(iii)(II) (or the estate of such fiduciary) for any such injury. Any fiduciary against whom such a civil action or proceeding is brought shall deliver, within such time after date of service or knowledge of service as determined by the Attorney General, all process served upon such fiduciary (or an attested copy thereof) to the Executive Director, who shall promptly furnish copies of the pleading and process to the Attorney General and the United States Attorney for the district wherein the action or proceeding is brought.
(g) Regulations
- The Secretary of Labor may prescribe regulations to carry out this section.
(h) Audits
- (1) In general
  - The Secretary of Labor shall establish a program to carry out audits to determine the level of compliance with the requirements of this section relating to fiduciary responsibilities and prohibited activities of fiduciaries.
- (2) Delegation
  - An audit under this subsection may be conducted by the Secretary of Labor, by contract with a qualified non-governmental organization, or in cooperation with the Comptroller General of the United States, as the Secretary of Labor considers appropriate.

Sec. 207. Bonding.

(a) Requirements
- (1) In general
  - Except as provided in paragraph (2), each fiduciary and each person who handles funds or property of the Fund shall be bonded as provided in this section.
- (2) Exceptions
  - (A) In general
    - Bond shall not be required of a fiduciary (or of any officer or employee of such fiduciary) if such fiduciary—
      - (i) is a corporation organized and doing business under the laws of the United States or of any State;
      - (ii) is authorized under such laws to exercise trust powers or to conduct an insurance business;
      - (iii) is subject to supervision or examination by Federal or State authority; and
      - (iv) has at all times a combined capital and surplus in excess of such minimum amount (not less than $1,000,000) as the Secretary of Labor prescribes in regulations.
  - (B) Limitation
    - If—
      - (i) a bank or other financial institution would, but for this subparagraph, not be required to be bonded under this section by reason of the application of the exception provided in subparagraph (A),
      - (ii) the bank or financial institution is authorized to exercise trust powers, and
      - (iii) the deposits of the bank or financial institution are not insured by the Federal Deposit Insurance Corporation,
    - such exception shall apply to such bank or financial institution only if the bank or institution meets bonding requirements under State law which the Secretary of Labor determines are at least equivalent to those imposed on banks by Federal law.
(b) Regulations
- (1) In general
  - The Secretary of Labor shall prescribe the amount of a bond under this section at the beginning of each fiscal year. Such amount shall not be less than 10 percent of the amount of funds handled, except that in no case shall such bond be less than $1,000 or more than $500,000, or such higher amount as the Secretary of Labor, after due notice and opportunity for hearing to all interested parties, and other consideration of the record, may prescribe.
- (2) Amount of funds handled
  - For the purpose of prescribing the amount of a bond under paragraph (1), the amount of funds handled shall be determined by reference to the amount of the funds handled by the person, group, or class to be covered by such bond or by their predecessor or predecessors, if any, during the preceding fiscal year, or to the amount of funds to be handled during the current fiscal year by such person, group, or class, estimated as provided in regulations prescribed by the Secretary of Labor.
(c) Terms
- A bond required by subsection (a)—
  - shall include such terms and conditions as the Secretary of Labor considers necessary to protect the Fund against loss by reason of acts of fraud or dishonesty on the part of the bonded person directly or through connivance with others;
  - shall have as surety thereon a corporate surety company which is an acceptable surety on Federal bonds under authority granted by the Secretary of the Treasury pursuant to sections 9304 through 9308 of title 31, United States Code; and
  - shall be in a form or of a type approved by the Secretary of Labor, including individual bonds or schedule or blanket forms of bonds which cover a group or class.
(d) Custody of funds
- (1) In general
  - It shall be unlawful for any person to whom subsection (a) applies, to receive, handle, disburse, or otherwise exercise custody or control of any of the funds or other property of the Fund without being bonded as required by this section.
- (2) Fiduciaries
  - It shall be unlawful for any fiduciary, or any other person having authority to direct the performance of functions described in paragraph (1), to permit any such function to be performed by any person to whom subsection (a) applies unless such person has met the requirements of such subsection.
(e) Exemption
- Notwithstanding any other provision of law, any person who is required to be bonded as provided in subsection (a) shall be exempt from any other provision of law which would, but for this subsection, require such person to be bonded for the handling of the funds or other property of the Fund.
(f) Regulations
- The Secretary of Labor shall prescribe such regulations as may be necessary to carry out the provisions of this section, including exempting a person or class of persons from the requirements of this section.

Sec. 208. Investigative authority.

Any authority available to the Secretary of Labor under section 504 of the Employee Retirement Income Security Act of 1974 () is hereby made available to the Secretary of Labor, and any officer designated by the Secretary of Labor, to determine whether any person has violated, or is about to violate, any provision of section 206 or 207. 29 U.S.C. 1134

Sec. 209. Exculpatory provisions; insurance.

(a) Exculpatory provisions void
- Any provision in an agreement or instrument which purports to relieve a fiduciary from responsibility or liability for any responsibility, obligation, or duty under this title shall be void.
(b) Insurance
- In accordance with section 101(e), the sums credited to the Fund shall be available to pay administrative expenses which may include, at the discretion of the Executive Director, the purchase of insurance to cover potential liability of persons who serve in a fiduciary capacity with respect to the Fund, without regard to whether a policy of insurance permits recourse by the insurer against the fiduciary in the case of a breach of a fiduciary obligation.

Sec. 210. Subpoena authority.

(a) Subpoena authority
- In order to carry out the responsibilities specified in this Act, the Executive Director may issue subpoenas commanding each person to whom the subpoena is directed to produce designated books, documents, records, electronically stored information, or tangible materials in the possession or control of that individual.
(b) Liability
- Notwithstanding any Federal, State, or local law, any person, including officers, agents, and employees, receiving a subpoena under this section, who complies in good faith with the subpoena and thus produces the materials sought, shall not be liable in any court of any State or the United States to any individual, domestic or foreign corporation or upon a partnership or other unincorporated association for such production.
(c) Enforcement
- When a person fails to obey a subpoena issued under this section, the district court of the United States for the district in which the investigation is conducted or in which the person failing to obey is found, shall on proper application issue an order directing that person to comply with the subpoena. The court may punish as contempt any disobedience of its order.
(d) Regulations
- The Executive Director shall prescribe regulations to carry out subsection (a).

Title III—Government Match Tax Credit

Sec. 301. Government Match Tax Credit.

(a) Credit
- Subpart A of part IV of subchapter A of of the Internal Revenue Code of 1986 is amended by inserting after section 25E the following new section: chapter 1
  - (a) Allowance of credit
    - In the case of an eligible individual, there shall be allowed as a credit for the taxable year an amount equal to the sum of—
      - 1 percent of the eligible individual’s gross income, plus
      - the applicable percentage of the participant’s contributions to the American Worker Retirement Fund during the taxable year.
  - (b) Applicable percentage
    - For purposes of this section, the applicable percentage is—
      - 100 percent of so much of the contributions to the American Worker Retirement Fund as do not exceed 3 percent of gross income,
      - 50 percent of so much of such contributions as exceeds 3 percent but does not exceed 5 percent of gross income, and
      - 0 percent of so much of such contributions as exceeds 5 percent of gross income.
  - (c) Limitation on amount of credit
    - (1) In general
      - The credit allowed under subsection (a) with respect to any eligible individual for a taxable year shall not exceed 5 percent of the phaseout amount with respect to such individual for such taxable year.
      - In general
    - (2) Phaseout of credit limit
      - The limit determined under paragraph (1) for a taxable year shall be reduced by $75 for each $1,000 or portion thereof by which the eligible individual’s gross income exceeds the phaseout amount.
    - (3) Phaseout amount
      - For purposes of this subsection, the phaseout amount is—
        
        in the case of a joint return, an amount equal to 200 percent of the applicable median income for the taxable year,
        
        in the case of a head of household (as defined in section 2(b)), of the amount determined under subparagraph (A), and
        
        in any other case, of the amount determined under subparagraph (A).
    - (4) Applicable median income
      - For purposes of this subsection, the term applicable median income means, with respect to any taxable year, an amount equal to the most recent Median Personal Income for the population 15 and over in the United States, as published in the United States Census Bureau's Current Population Survey Tables for Personal Income before the beginning of the calendar year in which such taxable year begins.
  - (d) Eligible individual
    - For purposes of this section, the term has the meaning given the term by section 2(13) of the . eligible individual participant
  - (e) American Worker Retirement Fund
    - For purposes of this section, the American Worker Retirement Fund is the Fund created under section 101(a) of the .
  - (f) Deposit into participant’s account
    - (1) In general
      - Any amount allowed as a credit under subsection (a)—
        
        shall not be allowed as a credit against any tax imposed by this subtitle, and
        
        shall be treated as an overpayment under section 6401(b).
    - (2) Payment
      - The Secretary shall contribute the amount treated as an overpayment under paragraph (1) to the eligible individual’s account with the American Worker Retirement Fund.
    - (3) Exception from reduction or offset
      - The rules of section 6433(f)(5) shall apply to any payment to which this subsection applies.
  - (g) Advance payment
    - (1) Regulations
      - The Secretary shall prescribe regulations to provide that the payments made under subsection (f) are made as concurrently as is reasonably possible with contributions by a taxpayer to the American Worker Retirement Fund. Such regulations shall provide that, for purposes of such payments, the credit under subsection (a) may be determined on the basis of the eligible individual’s gross income for the preceding taxable year.
    - (2) Excess payments
      - If the aggregate amount of payments under subsection (f) with respect to an eligible individual for any taxable year exceeds the amount of the credit allowed under subsection (a) to such individual for such taxable year, the tax imposed by this chapter for such taxable year shall be increased by the amount of such excess. Any failure to so increase the tax shall be treated as arising out of a mathematical or clerical error and assessed according to section 6213(b)(1).
  - (h) Forfeit of amounts
    - (1) In general
      - If any contribution described in subsection (a) does not remain in the American Worker Retirement Fund for at least 6 months after such contribution is made, the amount of the credit under this section attributable to such contribution shall be forfeited as provided in paragraph (2).
    - (2) Treatment of forfeited amounts
      - In the case of any contribution to which paragraph (1) applies—
        
        the Executive Director of the American Worker Retirement Fund, as appointed under section 203 of the , shall make a distribution from the individual’s account in an amount equal to such contribution to the Secretary for deposit into the general fund of the Treasury, and
        
        in the case of any earnings on such contribution, such earnings shall be distributed by such Executive Director from the individual’s account and shall be available to the Executive Director, without need of further appropriation, for administrative expenses described in section 101(e) of such Act.
    - (3) Forfeited amounts not includible in gross income
      - Any distribution made under paragraph (2) shall not be includible in the gross income of the individual.
  - (i) Coordination with Savers' Credit
    - Any contribution by an individual to the American Worker Retirement Fund for a taxable year shall not be treated as a qualified retirement savings contribution of such individual for purposes of section 25B.
(b) Clerical amendments
- The table of sections for subpart A of part IV of subchapter A of of the Internal Revenue Code of 1986 is amended by inserting after the item relating to section 26E the following new item: chapter 1
  - Sec. 25F. Government Match Tax Credit.
  - Sec. 25F. Government Match Tax Credit.
(c) Effective date
- The amendments made by this section shall apply to taxable years beginning after December 31, 2024.