ABLE Employment Flexibility Act

The ABLE Employment Flexibility Act would let employers of workers who are eligible ABLE account holders redirect some retirement-plan funding to the employee’s qualified ABLE program (under 529A) instead of contributing to a defined contribution retirement plan (like a 401(k) or 403(b)). An employee could elect, for a plan year, that employer contributions that would normally go to the retirement plan be contributed to the employee’s ABLE account on their behalf. The bill sets rules for how these contributions are treated for tax and plan-testing purposes, requires “universal availability” (the option must be available to all eligible ABLE individuals in the plan), and allows employers to match employee ABLE contributions. It also directs Treasury to issue guidance and model amendments for plans to implement these changes. The overall aim is to provide flexibility for workers with disabilities and their employers, while preserving plan requirements and nondiscrimination rules.