Home > 106th Congressional Bills > H.R. 1000 (rfs) To amend title 49, United States Code, to reauthorize programs of the Federal Aviation Administration, and for other purposes. [Referred in Senate] ...H.R. 1000 (rfs) To amend title 49, United States Code, to reauthorize programs of the Federal Aviation Administration, and for other purposes. [Referred in Senate] ...
108th CONGRESS
1st Session
H. R. 1000
To amend title I of the Employee Retirement Income Security Act of 1974
and the Internal Revenue Code of 1986 to provide additional protections
to participants and beneficiaries in individual account plans from
excessive investment in employer securities and to promote the
provision of retirement investment advice to workers managing their
retirement income assets.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
February 27, 2003
Mr. Boehner (for himself, Mr. Sam Johnson of Texas, Mr. Greenwood, Mr.
Gibbons, Mr. Keller, Mr. Wilson of South Carolina, Mr. Norwood, Mr.
Platts, Mr. Tiberi, Mr. Shays, Mr. Simmons, Mr. McKeon, Mrs. Biggert,
Mr. Frelinghuysen, Mr. Isakson, Ms. Ginny Brown-Waite of Florida, Mr.
LaTourette, Ms. Norton, Mr. Souder, Mr. Sensenbrenner, Mr. English, Mr.
Green of Wisconsin, Mr. Herger, Mr. Weldon of Pennsylvania, Mr.
Beauprez, Mr. Feeney, Mr. Ney, Mr. Ballenger, Mr. Sweeney, Mr. Brady of
Texas, Mr. Burr, Mrs. Musgrave, Mr. DeMint, Mr. Crane, Ms. Hart, Mr.
Oxley, Mr. Upton, Mrs. Blackburn, Mr. Kline, Mr. Cole, Mr. Castle, Mr.
Peterson of Pennsylvania, Mr. Tancredo, Mr. Rogers of Michigan, Mr.
Kolbe, Mr. Janklow, Mr. Reynolds, Mr. Rehberg, Mr. Hill, Mr. Fossella,
Mr. Boozman, Mr. Culberson, and Mr. Walsh) introduced the following
bill; which was referred to the Committee on Education and the
Workforce, and in addition to the Committee on Ways and Means, for a
period to be subsequently determined by the Speaker, in each case for
consideration of such provisions as fall within the jurisdiction of the
committee concerned
_______________________________________________________________________
A BILL
To amend title I of the Employee Retirement Income Security Act of 1974
and the Internal Revenue Code of 1986 to provide additional protections
to participants and beneficiaries in individual account plans from
excessive investment in employer securities and to promote the
provision of retirement investment advice to workers managing their
retirement income assets.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE AND TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``Pension Security
Act of 2003''.
(b) Table of Contents.--The table of contents is as follows:
Sec. 1. Short title and table of contents.
TITLE I--IMPROVEMENTS IN PENSION SECURITY
Sec. 101. Periodic pension benefits statements.
Sec. 102. Inapplicability of relief from fiduciary liability during
blackout periods.
Sec. 103. Informational and educational support for pension plan
fiduciaries.
Sec. 104. Diversification requirements for defined contribution plans
that hold employer securities.
Sec. 105. Prohibited transaction exemption for the provision of
investment advice.
Sec. 106. Study regarding impact on retirement savings of participants
and beneficiaries by requiring consultants
to advise plan fiduciaries of individual
account plans.
Sec. 107. Treatment of qualified retirement planning services.
Sec. 108. Effective dates and related rules.
TITLE II--OTHER PROVISIONS RELATING TO PENSIONS
Sec. 201. Amendments to Retirement Protection Act of 1994.
Sec. 202. Reporting simplification.
Sec. 203. Improvement of employee plans compliance resolution system.
Sec. 204. Flexibility in nondiscrimination, coverage, and line of
business rules.
Sec. 205. Extension to all governmental plans of moratorium on
application of certain nondiscrimination
rules applicable to State and local plans.
Sec. 206. Notice and consent period regarding distributions.
Sec. 207. Annual report dissemination.
Sec. 208. Technical corrections to Saver Act.
Sec. 209. Missing participants.
Sec. 210. Reduced PBGC premium for new plans of small employers.
Sec. 211. Reduction of additional PBGC premium for new and small plans.
Sec. 212. Authorization for PBGC to pay interest on premium overpayment
refunds.
Sec. 213. Substantial owner benefits in terminated plans.
Sec. 214. Benefit suspension notice.
Sec. 215. Studies.
Sec. 216. Interest rate range for additional funding requirements.
TITLE III--GENERAL PROVISIONS
Sec. 301. Provisions relating to plan amendments.
TITLE I--IMPROVEMENTS IN PENSION SECURITY
SEC. 101. PERIODIC PENSION BENEFITS STATEMENTS.
(a) Amendments to the Employee Retirement Income Security Act of
1974.--
(1) Requirements.--
(A) In general.--Section 105(a) of the Employee
Retirement Income Security Act of 1974 (29 U.S.C.
1025(a)) is amended to read as follows:
``(a)(1)(A) The administrator of an individual account plan shall
furnish a pension benefit statement--
``(i) to each plan participant at least annually,
``(ii) to each plan beneficiary upon written request, and
``(iii) in the case of an applicable individual account
plan, to each individual who is a plan participant or
beneficiary and who has a right to direct investments, at least
quarterly.
``(B) The administrator of a defined benefit plan shall furnish a
pension benefit statement--
``(i) at least once every 3 years to each participant with
a nonforfeitable accrued benefit who is employed by the
employer maintaining the plan at the time the statement is
furnished to participants, and
``(ii) to a plan participant or plan beneficiary of the
plan upon written request.
``(2) A pension benefit statement under paragraph (1)--
``(A) shall indicate, on the basis of the latest available
information--
``(i) the total benefits accrued, and
``(ii) the nonforfeitable pension benefits, if any,
which have accrued, or the earliest date on which
benefits will become nonforfeitable,
``(B) shall be written in a manner calculated to be
understood by the average plan participant, and
``(C) may be provided in written form or in electronic or
other appropriate form to the extent that such form is
reasonably accessible to the recipient.
``(3)(A) In the case of a defined benefit plan, the requirements of
paragraph (1)(B)(i) shall be treated as met with respect to a
participant if the administrator, at least once each year, provides the
participant with notice, at the participant's last known address, of
the availability of the pension benefit statement and the ways in which
the participant may obtain such statement. Such notice shall be
provided in written, electronic, or other appropriate form, and may be
included with other communications to the participant if done in a
manner reasonably designed to attract the attention of the participant.
``(B) The Secretary may provide that years in which no employee or
former employee benefits (within the meaning of section 410(b) of the
Internal Revenue Code of 1986) under the plan need not be taken into
account in determining the 3-year period under paragraph (1)(B)(i).''.
(B) Conforming amendments.--
(i) Section 105 of the Employee Retirement
Income Security Act of 1974 (29 U.S.C. 1025) is
amended by striking subsection (d).
(ii) Section 105(b) of such Act (29 U.S.C.
1025(b)) is amended to read as follows:
``(b) In no case shall a participant or beneficiary of a plan be
entitled to more than one statement described in clause (i) or (ii) of
subsection (a)(1)(A) or clause (i) or (ii) of subsection (a)(1)(B),
whichever is applicable, in any 12-month period. If such report is
required under subsection (a) to be furnished at least quarterly, the
requirements of the preceding sentence shall be applied with respect to
each quarter in lieu of the 12-month period.''.
(2) Information required from applicable individual account
plans.--Section 105 of such Act (as amended by paragraph (1))
is amended further by adding at the end the following new
subsection:
``(d)(1) The statements required to be provided at least quarterly
under subsection (a)(1)(A)(iii) in the case of applicable individual
account plans shall include (together with the information required in
subsection (a)) the following:
``(A) the value of each investment to which assets in the
individual account have been allocated, determined as of the
most recent valuation date under the plan, including the value
of any assets held in the form of employer securities, without
regard to whether such securities were contributed by the plan
sponsor or acquired at the direction of the plan or of the
participant or beneficiary,
``(B) an explanation, written in a manner calculated to be
understood by the average plan participant, of any limitations
or restrictions on the right of the participant or beneficiary
to direct an investment, and
``(C) an explanation, written in a manner calculated to be
understood by the average plan participant, of the importance,
for the long-term retirement security of participants and
beneficiaries, of a well-balanced and diversified investment
portfolio, including a discussion of the risk of holding more
than 25 percent of a portfolio in the security of any one
entity, such as employer securities.
``(2) The Secretary shall issue guidance and model notices which
meet the requirements of this subsection.''.
(3) Definition of applicable individual account plan.--
Section 3 of such Act (29 U.S.C. 1002) is amended by adding at
the end the following new paragraph:
``(42)(A) The term `applicable individual account plan' means any
individual account plan, except that such term does not include an
employee stock ownership plan (within the meaning of section 4975(e)(7)
of the Internal Revenue Code of 1986) unless there are any
contributions to such plan (or earnings thereunder) held within such
plan that are subject to subsection (k)(3) or (m)(2) of section 401 of
the Internal Revenue Code of 1986. Such term shall not include a one-
participant retirement plan.
``(B) The term `one-participant retirement plan' means a pension
plan with respect to which the following requirements are met:
``(i) on the first day of the plan year--
``(I) the plan covered only one individual (or the
individual and the individual's spouse) and the
individual owned 100 percent of the plan sponsor
(whether or not incorporated), or
``(II) the plan covered only one or more partners
(or partners and their spouses) in the plan sponsor;
``(ii) the plan meets the minimum coverage requirements of
410(b) of the Internal Revenue Code of 1986 (as in effect on
the date of the enactment of this paragraph) without being
combined with any other plan of the business that covers the
employees of the business;
``(iii) the plan does not provide benefits to anyone except
the individual (and the individual's spouse) or the partners
(and their spouses);
``(iv) the plan does not cover a business that is a member
of an affiliated service group, a controlled group of
corporations, or a group of businesses under common control;
and
``(v) the plan does not cover a business that leases
employees.''.
(4) Civil penalties for failure to provide quarterly
benefit statements.--Section 502 of such Act (29 U.S.C. 1132)
is amended--
(A) in subsection (a)(6), by striking ``(6), or
(7)'' and inserting ``(6), (7), or (8)'';
(B) by redesignating paragraph (8) of subsection
(c) as paragraph (9); and
(C) by inserting after paragraph (7) of subsection
(c) the following new paragraph:
``(8) The Secretary may assess a civil penalty against any plan
administrator of up to $1,000 a day from the date of such plan
administrator's failure or refusal to provide participants or
beneficiaries with a benefit statement on at least a quarterly basis in
accordance with section 105(a)(1)(A)(iii).''.
(5) Model statements.--The Secretary of Labor shall, not
later than 180 days after the date of the enactment of this
Act, issue initial guidance and a model benefit statement,
written in a manner calculated to be understood by the average
plan participant, that may be used by plan administrators in
complying with the requirements of section 105 of the Employee
Retirement Income Security Act of 1974. Not later than 75 days
after the date of the enactment of this Act, the Secretary shall
promulgate interim final rules necessary to carry out the amendments
made by this subsection.
(b) Amendments to the Internal Revenue Code of 1986.--
(1) Provision of investment education notices to
participants in certain plans.--Section 414 of the Internal
Revenue Code of 1986 (relating to definitions and special
rules) is amended by adding at the end the following:
``(w) Provision of Investment Education Notices to Participants in
Certain Plans.--
``(1) In general.--The plan administrator of an applicable
pension plan shall provide to each applicable individual an
investment education notice described in paragraph (2) at the
time of the enrollment of the applicable individual in the plan
and not less often than annually thereafter.
``(2) Investment education notice.--An investment education
notice is described in this paragraph if such notice contains--
``(A) an explanation, for the long-term retirement
security of participants and beneficiaries, of
generally accepted investment principles, including
principles of risk management and diversification, and
``(B) a discussion of the risk of holding
substantial portions of a portfolio in the security of
any one entity, such as employer securities.
``(3) Understandability.--Each notice required by paragraph
(1) shall be written in a manner calculated to be understood by
the average plan participant and shall provide sufficient
information (as determined in accordance with guidance provided
by the Secretary) to allow recipients to understand such
notice.
``(4) Form and manner of notices.--The notices required by
this subsection shall be in writing, except that such notices
may be in electronic or other form (or electronically posted on
the plan's website) to the extent that such form is reasonably
accessible to the applicable individual.
``(5) Definitions.--For purposes of this subsection--
``(A) Applicable individual.--The term `applicable
individual' means--
``(i) any participant in the applicable
pension plan,
``(ii) any beneficiary who is an alternate
payee (within the meaning of section 414(p)(8))
under a qualified domestic relations order
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