To amend the Internal Revenue Code of 1986 to establish an exception for multiemployer plan participants to the requirements for automatic enrollment.
- Sponsor
- Rep. Finstad, Brad [R-MN-1]
- Committees
- Ways and Means Committee (primary)
- Last action
- Dec 12, 2025
Bottom line
H.R. 6685 exempts multiemployer retirement plans from federal automatic enrollment mandates, shifting the burden of enrollment from employers to employees in these specific plans.
What it actually does
This bill amends the Internal Revenue Code of 1986 to exempt multiemployer plans from the requirements for automatic enrollment in retirement plans. Currently, certain plans, like church plans, are already exempt from these rules. This legislation extends that exemption to multiemployer plans, meaning participants in these plans would not be automatically enrolled and would instead need to affirmatively opt-in.
Proponents argue
Supporters argue that multiemployer plans, often established through collective bargaining, have unique administrative structures that make automatic enrollment burdensome or impractical. They contend that existing union-led communication and enrollment processes are sufficient and that this exemption reduces unnecessary regulatory complexity for these plans, allowing them to operate more efficiently without compromising participant access.
Opponents contend
Critics might argue that automatic enrollment has proven effective in increasing retirement savings rates, especially among workers who might otherwise not take the initiative to enroll. They could contend that exempting multiemployer plans could lead to lower participation rates and reduced retirement security for their participants, undermining broader efforts to encourage savings.
The bill text is very short and can be read quickly. The analysis provides sufficient context to understand its implications.
Section 1(a)
Exemption for Multiemployer Plans from Automatic Enrollment
This provision modifies Section 414A(c)(3) of the Internal Revenue Code of 1986. It adds 'multiemployer plans' to the list of plans that are exempt from federal automatic enrollment requirements for retirement plans. This means that multiemployer plans, which are typically collectively bargained plans involving multiple employers and often unions, will not be required to automatically enroll their eligible employees into retirement savings programs. Instead, employees in these plans would need to actively choose to participate.
Supporters argue
Supporters argue that multiemployer plans have unique characteristics, including collective bargaining agreements and often robust union-led communication efforts, which make automatic enrollment less necessary or more difficult to implement effectively. They contend that this exemption allows these plans to maintain their established enrollment procedures without incurring additional, potentially redundant, administrative costs.
Critics contend
Opponents would argue that automatic enrollment is a proven method for increasing retirement plan participation, especially among those who might not otherwise take the initiative to enroll. They might contend that removing this requirement for multiemployer plans could inadvertently reduce retirement savings rates for a significant segment of the workforce, potentially harming long-term financial security.
Tradeoffs
The provision balances the desire to reduce administrative burdens for a specific type of retirement plan against the goal of maximizing retirement savings participation through default mechanisms. It highlights a tension between regulatory flexibility for unique plan structures and universal application of policies designed to boost savings.
The bill defines 'multiemployer plan' by reference to section 414(f) of the Internal Revenue Code. This external reference is crucial for understanding which plans are affected by the exemption.
Section 1(a)(2) and Section 414(f) of the Internal Revenue Code
Why it matters:This is standard legislative drafting practice to avoid redundancy and ensure consistency with existing legal definitions. It's not intended to be evasive but requires external knowledge of the tax code.
Case for: Referencing existing code sections ensures legal precision and avoids creating conflicting definitions. It streamlines the legislative text.
Case against: For readers unfamiliar with the Internal Revenue Code, understanding the full scope of 'multiemployer plan' requires looking up an external definition, which can make the bill less accessible.
Estimated impact: The precise impact depends entirely on the definition of 'multiemployer plan' as outlined in 26 U.S.C. 414(f), which generally refers to a plan maintained pursuant to one or more collective bargaining agreements between employee organizations and more than one employer.