CONTRIBUTION LIMIT FOR SIMPLE PLANS.

SEC. 117. CONTRIBUTION LIMIT FOR SIMPLE PLANS.(a) In General.—Subparagraph (E) of section 408(p)(2) is amended—(1) by striking “amount is” and all that follows in clause (i) and inserting the following: “dollar amount is—“(I) the adjusted dollar amount in the case of an eligible employer described in clause (iii) which had not more than 25 employees who received at least $5,000 of compensation from the employer for the preceding year, “(II) the adjusted dollar amount in the case of an eligible employer described in clause (iii) which is not described in subclause (I) and which elects, at such time and in such manner as prescribed by the Secretary, the application of this subclause for the year, and “(III) $10,000 in any other case.” , (2) by redesignating clause (ii) as clause (iii) and by inserting after clause (i) the following new clause:“(ii) Adjusted dollar amount.—For purposes of clause (i), the adjusted dollar amount is an amount equal to 110 percent of the dollar amount in effect under clause (i)(III) for calendar year 2024.” , (3) by striking “adjustment.—In the case of” in clause (iii), as so redesignated, and inserting “adjustment.—“(I) Certain large employers.—In the case of” , (4) by striking “clause (i)” in such clause (iii) and inserting “clause (i)(III)”, and (5) by adding at the end of such clause (iii) the following new subclause:“(II) Other employers.—In the case of a year beginning after December 31, 2024, the Secretary shall adjust annually the adjusted dollar amount under clause (ii) in the manner provided under subclause (I) of this clause, except that the base 136 STAT. 5300 period taken into account shall be the calendar quarter beginning July 1, 2023.” . (b) Catch-up Contributions.—Paragraph (2) of section 414(v) is amended—(1) in subparagraph (B)—(A) by striking “the applicable” in clause (ii), as amended by this Act, and inserting “except as provided in clause (iii), the applicable”; and (B) by adding at the end the following new clause:“(iii) In the case of an applicable employer plan—“(I) which is maintained by an eligible employer described in section 408(p)(2)(E)(i)(I), or “(II) to which an election under section 408(p)(2)(E)(i)(II) applies for the year (including a plan described in section 401(k)(11) which is maintained by an eligible employer described in section 408(p)(2)(E)(i)(II) and to which such election applies by reason of subparagraphs (B)(i)(I) and (E) of section 401(k)(11)), the applicable dollar amount is an amount equal to 110 percent of the dollar amount in effect under clause (ii) for calendar year 2024.”, and (2) in subparagraph (C), as amended by this Act—(A) by striking “adjustment.—In the case of” and inserting the following: “adjustment.—“(i) Certain large employers.—In the case of” , and (B) by adding at the end the following new clause:“(ii) Other employers.—In the case of a year beginning after December 31, 2024, the Secretary shall adjust annually the dollar amount described in subparagraph (B)(iii) in the manner provided under clause (i) of this subparagraph, except that the base period taken into account shall be the calendar quarter beginning July 1, 2023.” . (c) Employer Match.—Clause (ii) of section 408(p)(2)(C) is amended—(1) by striking “The term” in subclause (I) and inserting “Except as provided in subclause (IV), the term”, (2) by adding at the end the following new subclause:“(IV) Special rule for electing larger employers.—In the case of an employer which had more than 25 employees who received at least $5,000 of compensation from the employer for the preceding year, and which makes the election under subparagraph (E)(i)(II) for any year, subclause (I) shall be applied for such year by substituting ‘4 percent’ for ‘3 percent’.” , and (3) by striking “3 percent” each place it appears in subclauses (II) and (III) and inserting “the applicable percentage”. (d) Increase in Nonelective Employer Contribution for Electing Larger Employers.—Subparagraph (B) of section 408(p)(2) is amended by adding at the end the following new clause:“(iii) Special rule for electing larger employers.—In the case of an employer which had more than 25 employees who received at least $5,000 of compensation from the employer for the preceding 136 STAT. 5301 year, and which makes the election under subparagraph (E)(i)(II) for any year, clause (i) shall be applied for such year by substituting ‘3 percent’ for ‘2 percent’.” . (e) Transition Rule.—Paragraph (2) of section 408(p), as amended by this Act, is further amended by adding at the end the following new subparagraph:“(H) 2-year grace period.—An eligible employer which had not more than 25 employees who received at least $5,000 of compensation from the employer for 1 or more years, and which has more than 25 such employees for any subsequent year, shall be treated for purposes of subparagraph (E)(i) as having 25 such employees for the 2 years following the last year the employer had not more than 25 such employees, and not as having made the election under subparagraph (E)(i)(II) for such 2 years. Rules similar to the second sentence of subparagraph (C)(i)(II) shall apply for purposes of this subparagraph.” . (f) Amendments Apply Only if Employer Has Not Had Another Plan Within 3 Years.—Subparagraph (E) of section 408(p)(2), as amended by subsection (a), is further amended by adding at the end the following new clause:“(iv) Employer has not had another plan within 3 years.—An eligible employer is described in this clause only if, during the 3-taxable-year period immediately preceding the 1st year the employer maintains the qualified salary reduction arrangement under this paragraph, neither the employer nor any member of any controlled group including the employer (or any predecessor of either) established or maintained any plan described in clause (i), (ii), or (iv) of section 219(g)(5)(A) with respect to which contributions were made, or benefits were accrued, for substantially the same employees as are eligible to participate in such qualified salary reduction arrangement.” . (g) Conforming Amendments Relating to Simple 401(k)s.—(1) Subclause (I) of section 401(k)(11)(B)(i) is amended by inserting “(after the application of any election under section 408(p)(2)(E)(i)(II))” before the comma. (2) Paragraph (11) of section 401(k) is amended by adding at the end the following new subparagraph:“(E) Employers electing increased contributions.—In the case of an employer which applies an election under section 408(p)(2)(E)(i)(II) for purposes of the contribution requirements of this paragraph under subparagraph (B)(i)(I), rules similar to the rules of subparagraphs (B)(iii), (C)(ii)(IV), and (G) of section 408(p)(2) shall apply for purposes of subparagraphs (B)(i)(II) and (B)(ii) of this paragraph.” . (h) Effective Date.—The amendments made by this section shall apply to taxable years beginning after December 31, 2023. (i) Reports by Secretary.—(1) In general.—The Secretary of the Treasury shall, not later than December 31, 2024, and annually thereafter, report to the Committees on Finance and Health, Education, Labor, and Pensions of the Senate and the Committees on Ways and 136 STAT. 5302 Means and Education and Labor of the House of Representatives on the data described in paragraph (2), together with any recommendations the Secretary deems appropriate. (2) Data described.—For purposes of the report required under paragraph (1), the Secretary of the Treasury shall collect data and information on—(A) the number of plans described in section 408(p) or 401(k)(11) of the Internal Revenue Code of 1986 that are maintained or established during a year; (B) the number of participants eligible to participate in such plans for such year; (C) median contribution amounts for the participants described in subparagraph (B); (D) the types of investments that are most common under such plans; and (E) the fee levels charged in connection with the maintenance of accounts under such plans. Such data and information shall be collected separately for each type of plan. For purposes of collecting such data, the Secretary of the Treasury may use such data as is otherwise available to the Secretary for publication and may use such approaches as are appropriate under the circumstances, including the use of voluntary surveys and collaboration on studies.