| Home > 107th Congressional Bills > H.R. 1000 (rh) To adjust the boundary of the William Howard Taft National Historic Site in the State of Ohio, to authorize an exchange of land in connection with the historic site, and for other purposes. [Reported in House] ...
H.R. 1000 (rh) To adjust the boundary of the William Howard Taft National Historic Site in the State of Ohio, to authorize an exchange of land in connection with the historic site, and for other purposes. [Reported in House] ...
108th CONGRESS 1st Session H. R. 1000 _______________________________________________________________________ IN THE SENATE OF THE UNITED STATES May 15, 2003 Received; read twice and referred to the Committee on Health, Education, Labor, and Pensions _______________________________________________________________________ AN ACT 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 and beneficiaries. 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. Information furnished under clause (i) to a participant may be based on reasonable estimates determined under regulations prescribed by the Secretary, in consultation with the Pension Benefit Guaranty Corporation. ``(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 section 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 for each day on which the plan administrator has failed to comply with the requirements of clause (iii) of section 105(a)(1)(A) and has not corrected such failure by providing the required pension benefit statements to the affected participants and beneficiaries.''. (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 (within the meaning of section 414(p)(1)(A)), and ``(iii) any beneficiary of a deceased participant or alternate payee. ``(B) Applicable pension plan.--The term `applicable pension plan' means-- ``(i) a plan described in clause (i), (ii), or (iv) of section 219(g)(5)(A), and ``(ii) an eligible deferred compensation plan (as defined in section 457(b)) of an eligible employer described in section 457(e)(1)(A), which permits any participant to direct the investment of some or all of his account in the plan or under which the accrued benefit of any participant depends in whole or in part on hypothetical investments directed by the participant. Such term shall not include a one- participant retirement plan or a plan to which section 105 of the Employee Retirement Income Security Act of 1974 applies. ``(C) One-participant retirement plan defined.--The term `one-participant retirement plan' means a retirement plan with respect to which the following
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