S. 2217 — Independent Retirement Fairness Act

This section amends the definition of pooled employer plan under ERISA §3(43) (29 U.S.C. 1002(43)) by adding subparagraph (E) to permit (1) enrollment of independent workers—individuals performing work for remuneration who are not employees—as if they were employees of a participating employer, (2) participation by trade associations—broadly defined to include labor organizations, worker cooperatives, and associations of workers or companies—as if they were employers enrolling such workers, and (3) data sharing by employers or trade associations regarding independent workers as necessary for plan establishment and maintenance. Such participation and employer contributions on behalf of independent workers do not alter the workers' non-employee status under federal, state, or local law. (Pooled employer plans are multiple employer defined contribution retirement plans available to unrelated employers.)

This section establishes special rules under simplified employee pensions (SEPs)—employer-sponsored retirement plans involving contributions to employees' individual retirement accounts or annuities—to permit employers to elect treatment of independent workers (as defined in ERISA §3(43)(E)) as employees. Such rules (1) allow exclusion of independent workers from certain participation requirements; (2) exempt them from employee-counting rules for employer size and nondiscrimination testing; (3) permit separate treatment for contribution limits and testing; (4) authorize contribution of cash bonuses to their SEP accounts without counting toward the uniform contribution percentage; and (5) allow employer deposits into a suspension account (as defined in the Independent Retirement Fairness Act), with subsequent rollover to the SEP or cash return to the worker in the same taxable year. The amendments apply to taxable years beginning after enactment.

This section revises auditor opinion requirements for groups of plans under SECURE Act §202 (29 U.S.C. 6058 et seq.) to require that such opinions (A) relate only to specified financial statements and (B) be based on the same accounting principles applicable to pooled employer plans (as defined in ERISA §3(43) (29 U.S.C. 1002(43))), except that the opinion must take into account (1) limitations on the use of a plan's assets to pay benefits and expenses only with respect to such plan and (2) that plans in the group described in subsection (c) may have separate trusts. (Thus, this aligns auditing standards for certain multiple employer plans with those for pooled employer plans while respecting plan-specific asset restrictions.)

This section limits the scope of the audit opinion required under ERISA §103(a)(3) for pooled employer plans to only those portions attributable to a participating employer for which such an opinion would be required if that portion were maintained as a separate single-employer plan. (Pooled employer plans enable multiple unrelated employers to join in a single ERISA-covered retirement plan.) The amendment applies to plan years beginning after the date of enactment.

This section directs the Secretaries of the Treasury and Labor, after reviewing academic literature and consulting relevant companies, to establish pilot programs encouraging independent workers (i.e., gig economy participants as defined in ERISA §3(43)(E)) to save for retirement. The programs are (1) allowing an independent worker to round down compensation to the nearest whole dollar and automatically contribute the excess amount (e.g., cents) as an elective deferral to a pooled employer plan (as defined in ERISA §3(43)), solo 401(k), or suspension account; and (2) allowing automatic deductions of a designated amount from compensation—per pay period or monthly, quarterly, semi-annually, or annually—for contribution as an elective deferral to the same options. The programs may use safe harbor plans under IRC §401(k) (paragraphs (11), (12), (13), or (16)), with such plans deemed compliant despite participation; a solo 401(k) covers only a single participant (or spouse), and a suspension account holds deposits temporarily, permits withdrawals for transfer to a pooled employer plan or simplified employee pension (IRC §408(k)(10)), and returns any remaining balance to the worker annually in a lump sum.