II 

113TH CONGRESS 

2D SESSION S. 1979 

To provide for USA Retirement Funds, to reform the pension system, and 

for other purposes. 

IN THE SENATE OF THE UNITED STATES 

JANUARY 30, 2014 

Mr. HARKIN (for himself and Mr. BROWN) introduced the following bill; which 

was read twice and referred to the Committee on Health, Education, 

Labor, and Pensions 

A BILL 

To provide for USA Retirement Funds, to reform the pension 

system, and for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 

4 (a) SHORT TITLE.—This Act may be cited as the 

5 ‘‘USA Retirement Funds Act’’. 

6 (b) TABLE OF CONTENTS.—The table of contents for 

7 this Act is as follows: 

Sec. 1. Short title; table of contents. 

TITLE I—USA RETIREMENT FUNDS 

Sec. 101. Automatic USA Retirement Fund arrangements. 

Sec. 102. Establishment of USA Retirement Funds. 


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Sec. 103. Commission on USA Retirement Funds. 

Sec. 104. Limitation on employer liability. 

Sec. 105. Enforcement and fraud prevention. 

TITLE II—DEFINED CONTRIBUTION PLAN REFORMS 

Subtitle A—Savings Enhancements 

Sec. 201. Pooled employer plans. 

Sec. 202. Pooled employer and multiple employer plan reporting. 

Subtitle B—Participant Protections 

Sec. 211. Alternative fiduciary arrangements to protect plan participants. 

Sec. 212. Rollover protections. 

Subtitle C—Lifetime Income 

Sec. 221. Lifetime income disclosure. 

Sec. 222. Lifetime income safe harbor. 

Sec. 223. Default investment safe harbor clarification. 

Sec. 224. Administration of joint and survivor annuity requirements. 

TITLE III—DEFINED BENEFIT SYSTEM REFORMS 

Subtitle A—Defined Benefit Pension Plan Reforms 

Sec. 301. Hybrid plans. 

Sec. 302. Clarification of the normal retirement age. 

Sec. 303. Moratorium on imposition of shutdown liability. 

Sec. 304. Alternative funding target attainment percentage determined without 

regard to reduction for credit balances. 

Sec. 305. Method for determining changes for quarterly contributions. 

Sec. 306. Election to discount contributions from final due date. 

Sec. 307. Simplification of elections and notices. 

Sec. 308. Improved multiemployer plan disclosure. 

Subtitle B—Improvements to the Pension Insurance Program 

Sec. 311. Modifications of technical changes made by the Pension Protection 

Act of 2006 to termination liability. 

Sec. 312. Payment of lump sum distributions in bankruptcy. 

Sec. 313. Trusteeship clarifications. 

Sec. 314. Recordkeeping for terminating plans. 

Sec. 315. Termination date in bankruptcy. 

TITLE IV—OTHER SYSTEMIC REFORMS 

Sec. 401. Plan audit quality improvement. 

Sec. 402. Special rules relating to treatment of qualified domestic relations orders. 

Sec. 403. Correction to bonding requirement. 

Sec. 404. Retaliation protections. 


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1 TITLE I—USA RETIREMENT 

2 FUNDS 

3 SEC. 101. AUTOMATIC USA RETIREMENT FUND ARRANGE4 MENTS. 

5 (a) REQUIREMENT TO PROVIDE ACCESS.—Each cov6 ered employer shall make available to each qualifying em7 ployee for the calendar year an automatic USA Retire8 ment Fund arrangement. 

9 (b) COVERED EMPLOYER.—For purposes of this 

10 title— 

11 (1) IN GENERAL.—Except as otherwise pro12 vided in this subsection and subsection (c)(2), the 

13 term ‘‘covered employer’’ means, with respect to any 

14 calendar year, an employer who does not maintain a 

15 qualifying plan or arrangement for any part of such 

16 year. 

17 (2) QUALIFYING PLAN OR ARRANGEMENT.— 

18 (A) IN GENERAL.—The term ‘‘qualifying 

19 plan or arrangement’’ means a plan or arrange20 ment described in section 219(g)(5) of the In21 ternal Revenue Code of 1986. 

22 (B) EXCEPTIONS.—Such term shall not in23 clude the following: 

24 (i) FROZEN DEFINED BENEFIT

25 PLAN.—A defined benefit plan that had no 


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1 ongoing accruals as of the first day of the 

2 preceding calendar year, unless the plan 

3 failed to have accruals only because of the 

4 application of section 206 of the Employee 

5 Retirement Income Security Act (29 

6 U.S.C. 1056) and section 436 of the Inter7 nal Revenue Code of 1986. 

8 (ii) DEFINED CONTRIBUTION PLAN

9 WITHOUT LIFETIME INCOME OPTIONS.—A 

10 defined contribution plan that does not 

11 provide participants with a distribution op12 tion that provides lifetime income. 

13 (iii) PLANS NOT MEETING CONTRIBU14 TION REQUIREMENTS.—A plan— 

15 (I) which consists of a cash or 

16 deferred arrangement (as defined in 

17 section 401(k) of such Code) with re18 spect to which the employer does not 

19 automatically enroll all eligible em20 ployees at contribution rates at or 

21 above those specified in subsection 

22 (d)(4); or 

23 (II) for which the only contribu24 tions are nonelective employer con25 tributions and with respect to which 


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1 the employer’s annual contribution 

2 rate is not at or above the rates speci3 fied in subsection (d)(4). 

4 (3) EXCEPTION FOR CERTAIN SMALL AND NEW

5 EMPLOYERS.— 

6 (A) IN GENERAL.—The term ‘‘covered em7 ployer’’ shall not include an employer for a cal8 endar year if the employer— 

9 (i) did not employ during the pre10 ceding calendar year more than 10 employ11 ees who each received at least $5,000 of 

12 compensation (as defined in section 

13 3401(a) of the Internal Revenue Code of 

14 1986) from the employer for such pre15 ceding calendar year; 

16 (ii) did not normally employ more 

17 than 10 employees on a typical business 

18 day during the preceding calendar year; or 

19 (iii) was not in existence at all times 

20 during the calendar year and the preceding 

21 calendar year. 

22 (B) OPERATING RULES.—In determining 

23 the number of employees for purposes of sub24 paragraph (A)— 


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1 (i) rules consistent with any rules ap2 plicable in determining the number of em3 ployees for purposes of section 

4 408(p)(2)(C) and section 4980B(d) of the 

5 Internal Revenue Code of 1986 shall apply; 

6 (ii) all members of the same family 

7 (within the meaning of section 318(a)(1) 

8 of the Internal Revenue Code of 1986) 

9 shall be treated as 1 individual; and 

10 (iii) any reference to an employer 

11 shall include a reference to any predecessor 

12 employer. 

13 (4) EXCEPTION FOR GOVERNMENTS AND

14 CHURCHES.—The term ‘‘covered employer’’ shall not 

15 include— 

16 (A) a government or entity described in 

17 section 414(d) of the Internal Revenue Code of 

18 1986; or 

19 (B) a church or a convention or association 

20 of churches that is exempt from tax under sec21 tion 501 of such Code. 

22 (5) AGGREGATION RULE.—A person treated as 

23 a single employer under subsection (a) or (b) of sec24 tion 52 of the Internal Revenue Code of 1986 or 


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1 subsection (m) or (o) of section 414 of such Code 

2 shall be treated as a single employer. 

3 (c) QUALIFYING EMPLOYEE.—For purposes of this 

4 title— 

5 (1) IN GENERAL.—The term ‘‘qualifying em6 ployee’’ means any employee who is not an excluded 

7 employee. 

8 (2) PLAN SPONSOR’S EMPLOYEES.—If— 

9 (A) an employer maintains one or more 

10 qualifying plans or arrangements described in 

11 section 219(g)(5) of the Internal Revenue Code 

12 of 1986; and 

13 (B) the employees of a subsidiary, division, 

14 or other business unit are generally not eligible 

15 to participate in any such qualifying plan or ar16 rangement, 

17 for purposes of this section, the employer shall be 

18 treated as a covered employer with respect to such 

19 employees (other than excluded employees), and 

20 such employees (other than excluded employees) 

21 shall be treated as qualifying employees for the cal22 endar year. 

23 (3) EXCLUDED EMPLOYEES.— 

24 (A) IN GENERAL.—The term ‘‘excluded 

25 employee’’ means an employee who is an excludVerDate Mar 15 2010 00:36 Feb 01, 2014 Jkt 039200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\S1979.IS S1979

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1 able employee and who is in a class or category 

2 that the employer excludes from treatment as 

3 qualifying employees. 

4 (B) EXCLUDABLE EMPLOYEE.—The term 

5 ‘‘excludable employee’’ means— 

6 (i) an employee described in section 

7 410(b)(3) of the Internal Revenue Code of 

8 1986; 

9 (ii) an employee who has not attained 

10 the age of 21 before the beginning of the 

11 calendar year; 

12 (iii) an employee who has not com13 pleted at least 3 months of service with the 

14 employer; 

15 (iv) in the case of an employer that 

16 maintains a qualifying plan or arrange17 ment which excludes employees who have 

18 not satisfied the minimum age and service 

19 requirements for participation in the plan, 

20 an employee who has not satisfied such re21 quirements; 

22 (v) in the case of an employer that 

23 maintains an annuity contract (including a 

24 custodial account or retirement income ac25 count) under section 403(b) of the Internal 


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1 Revenue Code of 1986, an employee who is 

2 permitted to be excluded from any salary 

3 reduction arrangement under the contract 

4 pursuant to paragraph (12) of such section 

5 403(b); 

6 (vi) in the case of an employer that 

7 maintains an arrangement described in 

8 section 408(p) of such Code, an employee 

9 who is not required to be eligible to partici10 pate in the arrangement under paragraph 

11 (4) of such section 408(p); and 

12 (vii) in the case of an employer that 

13 maintains a simplified employee pension 

14 described in section 408(k) of such Code, 

15 an employee who is permitted to be ex16 cluded from participation under paragraph 

17 (2) of such section 408(k). 

18 (4) GUIDANCE.—The Secretary of Labor (in 

19 this title referred to as the ‘‘Secretary’’) shall issue 

20 regulations or other guidance to carry out this sub21 section, including— 

22 (A) guidelines for determining the classes 

23 or categories of employees to be covered by a 

24 USA Retirement Fund; 


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1 (B) guidelines requiring employers to 

2 specify the classification or categories of em3 ployees (if any) who are excluded from the USA 

4 Retirement Fund; and 

5 (C) rules to prevent avoidance of the re6 quirements of this section. 

7 (d) AUTOMATIC USA RETIREMENT FUND ARRANGE8 MENT.—For purposes of this title— 

9 (1) IN GENERAL.—The term ‘‘automatic USA 

10 Retirement Fund arrangement’’ means an arrange11 ment of an employer (determined without regard to 

12 whether the employer is required to maintain the ar13 rangement)— 

14 (A) that covers each qualifying employee of 

15 the covered employer for the calendar year; 

16 (B) under which a qualifying employee— 

17 (i) may elect— 

18 (I) to contribute to an automatic 

19 USA Retirement Fund by having the 

20 employer deposit payroll deduction 

21 amounts or make other periodic direct 

22 deposits (including electronic pay23 ments) to the Fund; or 

24 (II) to have such payments paid 

25 to the employee directly in cash; 


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1 (ii) is treated as having made the elec2 tion under clause (i)(I) in the amount 

3 specified in paragraph (4) unless the indi4 vidual specifically elects not to have such 

5 contributions made (or specifically elects to 

6 have such contributions made at a dif7 ferent percentage or in a different 

8 amount); and 

9 (iii) not more than once per calendar 

10 year, may elect to modify the selection of 

11 the USA Retirement Fund to which con12 tributions are made for such year; and 

13 (C) that meets the administrative require14 ments of paragraph (3), including the notice re15 quirement of paragraph (3)(C). 

16 (2) AUTOMATIC RE-ENROLLMENT.—An employ17 ee’s election not to contribute to a USA Retirement 

18 Fund (or to have such contributions made at a dif19 ferent percentage or in a different amount from 

20 those specified in paragraph (4)) shall expire after 

21 2 years. After such 2-year period and absent a new 

22 election, the employee shall be treated as having 

23 made the election under paragraph (1)(B)(i)(I) in 

24 the amount specified in paragraph (4). 

25 (3) ADMINISTRATIVE REQUIREMENTS.— 


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1 (A) PAYMENTS.—An employer shall make 

2 the payments elected or treated as elected 

3 under paragraph (1)(B) on or before— 

4 (i) the last day of the month following 

5 the month in which the compensation oth6 erwise would have been payable to the em7 ployee in cash; or 

8 (ii) such later date as the Secretary 

9 may prescribe. 

10 (B) TERMINATION OF EMPLOYEE PARTICI11 PATION.—Subject to a requirement for reason12 able notice, an employee may elect to terminate 

13 participation in the arrangement at any time 

14 during a calendar year. The arrangement may 

15 provide that, if an employee so terminates par16 ticipation, the employee may not elect to re17 sume participation until the beginning of the 

18 next calendar year. 

19 (C) NOTICE OF ELECTION PERIOD.—The 

20 employer shall notify each employee eligible to 

21 participate for a year in a USA Retirement 

22 Fund arrangement, within a reasonable period 

23 of time before the 30th day before the begin24 ning of such year (and, for the first year the 


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1 employee is so eligible, the 30th day before the 

2 first day such employee is so eligible), of— 

3 (i) the payments that may be elected 

4 or treated as elected under paragraph 

5 (1)(B); 

6 (ii) the opportunity to make the elec7 tion to terminate participation in the ar8 rangement under subparagraph (B); 

9 (iii) the opportunity to make the elec10 tion under paragraph (1)(B)(ii) to have 

11 contributions or purchases made at a dif12 ferent percentage or in a different amount; 

13 and 

14 (iv) the opportunity under paragraph 

15 (1)(B)(iii) to modify the manner in which 

16 such amounts are invested for such year. 

17 (D) EMPLOYEES MAY CHOOSE USA RE18 TIREMENT FUND.—The arrangement shall pro19 vide that a qualified employee may elect to have 

20 contributions made to any USA Retirement 

21 Fund available to the employee. 

22 (4) AMOUNT OF CONTRIBUTIONS AND PAY23 MENTS.—The amount specified in this paragraph 

24 is— 


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1 (A) 3 percent of compensation for the cal2 endar year beginning on January 1, 2015; 

3 (B) 4 percent of compensation for the cal4 endar year beginning on January 1, 2016; 

5 (C) 5 percent of compensation for the cal6 endar year beginning on January 1, 2017; and 

7 (D) 6 percent of compensation for calendar 

8 years beginning after December 31, 2017. 

9 (5) COORDINATION WITH WITHHOLDING.—The 

10 Secretary of the Treasury shall modify the with11 holding exemption certificate under section 3402(f) 

12 of the Internal Revenue Code of 1986 so that, in the 

13 case of any qualifying employee covered by a USA 

14 Retirement Fund arrangement, any notice and elec15 tion requirements with respect to the arrangement 

16 may be met through the use of an attachment to 

17 such certificate or other modifications of the with18 holding exemption procedures. 

19 (e) DEPOSITS TO USA RETIREMENT FUNDS.— 

20 (1) IN GENERAL.—Except as provided in para21 graph (2), an employer shall make all contributions 

22 on behalf of employees to the USA Retirement Fund 

23 specified by the employee. 

24 (2) USA RETIREMENT FUNDS OTHER THAN

25 THOSE SELECTED BY EMPLOYEE.—In the absence of 


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1 an affirmative selection of a USA Retirement Fund 

2 by the employee, contributions on behalf of the em3 ployee shall be made to the USA Retirement Fund 

4 designated by the employer. 

5 (3) REGULATIONS.—The Secretary may issue 

6 such regulations as are necessary to carry out this 

7 subsection. 

8 (f) PREEMPTION OF CONFLICTING STATE LAWS.— 

9 The requirements under this section preempt any law of 

10 a State that directly or indirectly prohibits or restricts the 

11 establishment or operation of an automatic USA Retire12 ment Fund arrangement. Nothing in this section shall be 

13 construed to impair or preempt any State law to the extent 

14 such State law provides a remedy for the failure to make 

15 payroll deposit payments under any such automatic USA 

16 Retirement Fund arrangement within the period required. 

17 SEC. 102. ESTABLISHMENT OF USA RETIREMENT FUNDS. 

18 (a) QUALIFICATION AS A USA RETIREMENT

19 FUND.—For purposes of this title— 

20 (1) IN GENERAL.—The term ‘‘USA Retirement 

21 Fund’’ means a fund for which the Secretary has de22 termined the requirements under this title are met. 

23 (2) REQUEST FOR DETERMINATION.—The 

24 board of trustees of a program established for pur25 poses of being treated as a USA Retirement Fund 


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1 under this section shall, prior to beginning oper2 ations, submit to the Secretary (at such time and in 

3 such manner as the Secretary may prescribe) a re4 quest for the Secretary to make a determination as 

5 to whether the plan meets the requirements of this 

6 title for such treatment. Such request shall include 

7 copies of the written documents establishing the plan 

8 and such other materials as the Secretary may re9 quest. The Secretary shall make such determination 

10 within 180 days of receiving such request. 

11 (3) PERIODIC REVIEW.—The Secretary shall es12 tablish a process to periodically review each plan de13 termined to be a USA Retirement Fund under para14 graph (1) to ensure that the plan continues to meet 

15 the requirements of this title. 

16 (4) PUBLIC LIST OF PLANS.—The Secretary 

17 shall maintain a public list of plans determined by 

18 the Secretary to qualify as USA Retirement Funds. 

19 Such list shall be posted to a publicly available 

20 Internet website. 

21 (b) PARTICIPATION.— 

22 (1) ELIGIBILITY.—An individual may partici23 pate in any USA Retirement Fund for which such 

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1 ually or through an arrangement established by an 

2 employer. 

3 (2) PARTICIPATION IN OTHER PLANS.—An indi4 vidual who participates in a USA Retirement Fund 

5 shall not be precluded from participating in a plan 

6 or arrangement described in section 219(g)(5) of the 

7 Internal Revenue Code of 1986. 

8 (c) GOVERNANCE.— 

9 (1) ASSETS HELD IN TRUST; BOARD OF TRUST10 EES.—For purposes of this title— 

11 (A) the assets of each USA Retirement 

12 Fund shall be held in trust, and 

13 (B) the Fund shall be governed by a board 

14 of trustees which shall consist of at least 3 indi15 viduals who— 

16 (i) are independent of service pro17 viders to the Fund; 

18 (ii) meet the qualification require19 ments established under this section; and 

20 (iii) are collectively able to adequately 

21 represent the interests of active partici22 pants, retirees, and contributing employ23 ers. 

24 (2) INDEPENDENCE REQUIREMENT.—An indi25 vidual is not independent of Fund service providers 


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1 for purposes of paragraph (1)(B)(i) if such indi2 vidual— 

3 (A) is an employee of any Fund service 

4 provider; 

5 (B) is a current or former officer or direc6 tor of a significant Fund service provider, or is 

7 otherwise affiliated with such a provider; 

8 (C) is a member of the immediate family 

9 of any person who is affiliated with a signifi10 cant Fund service provider; 

11 (D) derives more than 1 percent of the in12 dividual’s annual income from a significant 

13 Fund service provider; 

14 (E) derives more than 5 percent of the in15 dividual’s annual income from any Fund service 

16 provider; or 

17 (F) fails to meet meets such other criteria 

18 as are specified by the Secretary to ensure the 

19 independence of the board of directors. 

20 (3) MULTIPLE TRUSTEESHIPS.—No individual 

21 may serve on the board of trustees of more than 1 

22 USA Retirement Fund unless the Secretary receives 

23 attestation from the board of trustees of each appli24 cable USA Retirement Fund and the individual that, 

25 at the time of appointment, there is no reasonably 


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1 foreseeable conflict between the duties of such indi2 vidual to the participants in each applicable USA 

3 Retirement Fund. In no case may an individual 

4 serve on the boards of trustees of more than 3 USA 

5 Retirement Funds. 

6 (4) TRUSTEE QUALIFICATIONS.—Each trustee 

7 of a USA Retirement Fund shall attest that the 

8 trustee is knowledgeable of the trustee’s duties and 

9 responsibilities as a fiduciary of a USA Retirement 

10 Fund. The Secretary may require by regulation such 

11 other qualifications and documentation as may be 

12 necessary to ensure that trustees are suitable and 

13 qualified. Such requirements may include those re14 lated to education, training, and minimum com15 petency standards. 

16 (5) TRUSTEE SELECTION AND REMOVAL.— 

17 (A) IN GENERAL.—Each board of trustees 

18 of a USA Retirement Fund shall establish writ19 ten procedures regarding the appointment, re20 moval, and replacement of trustees on the 

21 board. Such procedures shall— 

22 (i) take effect after adoption by the 

23 majority of the board of trustees; 

24 (ii) be readily available to partici25 pants; 


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1 (iii) provide participants with a rea2 sonable opportunity to comment on, or 

3 participate in, the trustee selection process; 

4 and 

5 (iv) provide for periodic election of 

6 trustees. 

7 (B) REMOVAL BY THE SECRETARY.—The 

8 Secretary may require removal or suspension of 

9 a trustee if the conduct of the trustee is fraudu10 lent or is causing, or can be reasonably ex11 pected to cause, significant, imminent, and ir12 reparable harm to the participants or bene13 ficiaries of a USA Retirement Fund. 

14 (C) FUNDS WITHOUT QUALIFIED TRUST15 EES.—If a board of trustees of a USA Retire16 ment Fund has no members meeting the cri17 teria under this subsection, the Secretary shall 

18 appoint replacement trustees. 

19 (6) TRUSTEE COMPENSATION.—Trustees of the 

20 Fund may be compensated at reasonable rates from 

21 the Fund, but only if such compensation is paid in 

22 accordance with the written board compensation pol23 icy adopted under paragraph (7)(A)(iv). 

24 (7) TRANSPARENCY AND PARTICIPANT DEMOC25 RACY.— 


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1 (A) PUBLICLY AVAILABLE POLICIES.—The 

2 board of trustees of a USA Retirement Fund 

3 shall adopt and make available to participants 

4 and beneficiaries of, and employers contributing 

5 to, the USA Retirement Fund— 

6 (i) a written investment policy state7 ment; 

8 (ii) a written lifetime income policy 

9 statement; 

10 (iii) an annual performance assess11 ment of the board of trustees, including an 

12 evaluation of weaknesses of the board and 

13 a plan to address such weaknesses; 

14 (iv) a written board compensation pol15 icy that includes current compensation lev16 els and provides a reasonable opportunity 

17 for comment from participants, bene18 ficiaries, and employers; and 

19 (v) a written policy addressing con20 flicts of interests with respect to trustees. 

21 (B) PARTICIPANT INPUT REGARDING

22 BOARD OF TRUSTEES.— 

23 (i) IN GENERAL.—The board of trust24 ees of a USA Retirement Fund shall estab25 lish procedures whereby a participant or 


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1 beneficiary of such USA Retirement Fund 

2 may— 

3 (I) petition the board of trustees 

4 to remove a trustee or service pro5 vider; 

6 (II) comment on the management 

7 and administration of the USA Re8 tirement Fund; and 

9 (III) with respect to a USA Re10 tirement Fund with more than 

11 $250,000,000 of assets, vote to ap12 prove or disapprove the compensation 

13 of the trustees at least once every 3 

14 years. 

15 (ii) EFFECT OF VOTE.—If partici16 pants and beneficiaries of a USA Retire17 ment Fund vote to disapprove the com18 pensation of trustees under clause 

19 (i)(III)— 

20 (I) the results of such vote shall 

21 not be binding on the board of trust22 ees; and 

23 (II) the board of trustees shall 

24 notify the Secretary of the results of 

25 such vote and provide an explanation 


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1 of why the compensation is reasonable 

2 or anticipated changes to the com3 pensation. 

4 (8) LIABILITY INSURANCE FOR TRUSTEES.— 

5 The trustees of each USA Retirement Fund shall 

6 have fiduciary liability insurance with a per-claim 

7 limit equal to no less than the greater of— 

8 (A) 5 percent of plan assets; or 

9 (B) $1,000,000. 

10 (9) TRUSTEE DUTIES.— 

11 (A) IN GENERAL.—The trustees of a USA 

12 Retirement Fund shall manage the Fund with 

13 the intention of providing each participant with 

14 a cost-effective stream of income in retirement 

15 and reducing benefit level volatility (particularly 

16 for those approaching retirement). 

17 (B) APPLICABILITY OF OTHER REQUIRE18 MENTS.—Each trustee of a USA Retirement 

19 Fund shall be a fiduciary subject to sections 

20 404(a), 404(b), 405, 406, and 408 through 413 

21 of the Employee Retirement Income Security 

22 Act of 1974 with respect to the Fund and par23 ticipants and beneficiaries of the Fund. Each 

24 such trustee shall be subject to the standards 

25 and remedies of such sections and section 502 


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1 of such Act, as if the Fund were an employee 

2 benefit plan. 

3 (d) EMPLOYER CONTRIBUTION LIMITATION.— 

4 (1) IN GENERAL.—Subject to paragraph (2), 

5 employers may, in addition to contributions an em6 ployee elects (or is treated as having elected) to have 

7 made, make a contribution of up to $5,000 per year 

8 to a USA Retirement Fund on behalf of each em9 ployee eligible to participate in a USA Retirement 

10 Fund, provided such contributions are made in a 

11 uniform manner (as the same dollar amount for 

12 each such employee or the same percentage of pay 

13 for each such employee) and are not intended to 

14 benefit solely highly compensated employees. 

15 (2) ANNUAL INDEXING OF AMOUNT.—The dol16 lar amount under paragraph (1) shall be indexed an17 nually for inflation. 

18 (e) BENEFITS IN THE FORM OF AN ANNUITY.— 

19 (1) IN GENERAL.—A USA Retirement Fund 

20 shall pay benefits in the form of an annuity in ac21 cordance with paragraph (2). The amount of such 

22 benefits shall be dependent on the amount of con23 tributions made by the participant, the experience of 

24 the Fund, and the form of distribution elected by 

25 the participant. The amount of an annuity may be 


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1 adjusted to reflect the experience of the Fund as 

2 necessary to protect the financial integrity of the 

3 Fund, except that annuity payments for those in pay 

4 status shall not be reduced more than 5 percent per 

5 year unless the Fund is faced with a significant fi6 nancial hardship and the Secretary has approved the 

7 reduction. 

8 (2) ANNUITY.—A USA Retirement Fund shall 

9 pay benefits in accordance with one of the following: 

10 (A) In the case of a participant who does 

11 not die before the annuity starting date, the 

12 benefit payable to such participant shall be pro13 vided in the form of a qualified joint and sur14 vivor annuity (as defined in section 205(d)(1) 

15 of the Employee Retirement Income Security 

16 Act of 1974 (29 U.S.C. 1055(d)(1))). 

17 (B) In the case of a participant who dies 

18 before the annuity starting date and who has a 

19 surviving spouse, a qualified preretirement sur20 vivor annuity (as defined in section 205(d)(2) 

21 of the Employee Retirement Income Security 

22 Act of 1974 (29 U.S.C. 1055(d)(2))) shall be 

23 provided to the surviving spouse of such partici24 pant. 


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1 (C) In lieu of a qualified joint and survivor 

2 annuity form of benefit or the qualified pre3 retirement survivor annuity form of benefit (or 

4 both), a participant may elect to receive a dis5 tribution described in subsection (f)(2) if one of 

6 the following conditions are met: 

7 (i)(I) The spouse of the participant 

8 consents in writing to the election. 

9 (II) Such election designates a bene10 ficiary (or form of benefits) which may not 

11 be changed without spousal consent (or the 

12 consent of the spouse expressly permits 

13 designations by the participant without 

14 any requirement of further consent by the 

15 spouse). 

16 (III) The spouse’s consent acknowl17 edges the effect of such election and is wit18 nessed by a plan representative or a notary 

19 public. 

20 (ii) It is established to the satisfaction 

21 of a Fund representative that the consent 

22 required under subclause (I) cannot be ob23 tained because there is no spouse, because 

24 the spouse cannot be located, or because of 


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1 such other circumstances as the Secretary 

2 may by regulations prescribe. 

3 The consent of a spouse (or establishment that 

4 the consent of a spouse cannot be obtained) 

5 under this subparagraph shall be effective only 

6 with respect to such spouse. 

7 (3) COMMENCEMENT OF BENEFIT PAY8 MENTS.—A participant may elect the time to start 

9 receiving benefit payments from the USA Retire10 ment Fund, except that a participant— 

11 (A) except as provided in subsection 

12 (f)(2)(B), may not elect to receive benefit pay13 ments before reaching the age of 60; and 

14 (B) must begin receiving benefit payments 

15 before the age of 72. 

16 (4) NOTICE.—Each Fund shall provide to each 

17 participant, within a reasonable period of time be18 fore the annuity starting date, a written explanation 

19 substantially similar to that required by section 

20 205(c)(3) of the Employee Retirement Income Secu21 rity Act of 1974 (29 U.S.C. 1055(c)(3)). 

22 (5) ASSIGNMENT OR ALIENATION OF FUND

23 BENEFITS.—Benefits under a USA Retirement 

24 Fund shall be subject to section 206(d) of the EmVerDate Mar 15 2010 00:36 Feb 01, 2014 Jkt 039200 PO 00000 Frm 00027 Fmt 6652 Sfmt 6201 E:\BILLS\S1979.IS S1979

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1 ployee Retirement Income Security Act of 1974 (29 

2 U.S.C. 1056(d)). 

3 (f) LIMITS ON WITHDRAWALS AND TRANSFERS.— 

4 (1) TRANSFERS.—A participant may, not more 

5 frequently than once per year, transfer such partici6 pant’s benefit to another USA Retirement Fund. 

7 (2) LIMITS ON DISTRIBUTIONS.— 

8 (A) IN GENERAL.—Except as provided in 

9 subparagraphs (B) and (C), a participant may 

10 not take a distribution other than one described 

11 in subsection (e)(2). 

12 (B) PARTICIPANTS AGED 59 AND YOUNG13 ER.—A participant may before age 60 take a 

14 distribution of a portion of the participant’s 

15 benefit if such distribution does not to exceed 

16 $5,500 and is rolled over to a qualifying plan 

17 or arrangement described in section 219(g)(5) 

18 of the Internal Revenue Code of 1986 or an in19 dividual retirement plan. 

20 (C) PARTICIPANTS AGED 60 AND OLDER.— 

21 A participant who is 60 or older but who has 

22 not entered pay status may elect one time to 

23 take a distribution of the greater of $10,000 or 

24 50 percent of the participant’s benefit if the 

25 participant demonstrates to the satisfaction of 


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1 the trustees of the Fund that the participant 

2 has sufficient retirement income apart from the 

3 Fund or is facing a substantial hardship. 

4 (g) METHODS FOR PROVIDING ANNUITIZED BEN5 EFIT PAYMENTS.— 

6 (1) IN GENERAL.—A USA Retirement Fund 

7 shall establish and maintain mechanisms for ade8 quately securing the payment of annuity benefits 

9 from the Fund. The Fund shall include a written de10 scription of such mechanisms in the investment and 

11 lifetime income policy statements required to be dis12 closed to participants. 

13 (2) SPECIFIC GOALS.—The mechanisms de14 scribed in paragraph (1) shall ensure that— 

15 (A) each participant receives a stream of 

16 income for life; 

17 (B) each participant and beneficiary has 

18 an opportunity to be protected against longevity 

19 risk; and 

20 (C) volatility in benefit levels is minimized 

21 for participants and beneficiaries in pay status 

22 and those approaching pay status. 

23 (3) SELF-ANNUITIZATION.— 

24 (A) IN GENERAL.—Notwithstanding any 

25 other provision of law, a USA retirement Fund 


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1 may self-annuitize if the Fund meets such re2 quirements as the Secretary establishes as nec3 essary to protect participants and beneficiaries 

4 in consideration of the recommendations of the 

5 Commission under section 103. 

6 (B) DUTY TO ADDRESS EMERGING

7 ISSUES.—The Secretary shall, periodically and 

8 in accordance with established procedures, up9 date the funding requirements promulgated 

10 under this paragraph in response to changing 

11 economic and business conditions to the extent 

12 necessary to carry out the purposes of this Act, 

13 taking into consideration the recommendations 

14 of the Commission. 

15 (h) REPORTING AND DISCLOSURE.— 

16 (1) ANNUAL STATEMENT.—The trustees of a 

17 USA Retirement Fund shall provide each participant 

18 in the Fund an annual statement of— 

19 (A) the estimated amount of the monthly 

20 benefit which the participant or beneficiary is 

21 projected to receive from the USA Retirement 

22 Fund, in the form of the default benefit de23 scribed in the plan in accordance with sub24 section (e)(2); 


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1 (B) an explanation, written in a manner 

2 calculated to be understood by the average plan 

3 participant, that includes interest and mortality 

4 assumptions used in calculating the estimate 

5 and a statement that actual benefits may be 

6 materially different from such estimate; 

7 (C) a disclosure of Fund fees and perform8 ance that is substantially similar to the disclo9 sures required of individual account plans under 

10 the Employee Retirement Income Security Act 

11 of 1974; 

12 (D) any other disclosures, including pro13 jected benefit estimates, that the board of trust14 ees of the USA Retirement Fund determines 

15 appropriate; and 

16 (E) such other disclosures as may be re17 quired by the Secretary. 

18 (2) SUMMARY PLAN DESCRIPTION.—The trust19 ees of a USA Retirement Fund shall provide partici20 pants a summary plan description (as described in 

21 section 102 of the Employee Retirement Income Se22 curity Act (29 U.S.C. 1022)) as required by section 

23 104(b) of the Employee Retirement Income Security 

24 Act (29 U.S.C. 1024(b)). 


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1 (3) ANNUAL REPORTS.—The trustees of a USA 

2 Retirement Fund shall file with the Secretary of 

3 Labor periodic reports in accordance with regula4 tions promulgated by the Secretary. 

5 (4) ADDITIONAL REQUIREMENTS.—Each USA 

6 Retirement Fund shall be subject to sections 106 

7 and 107 of the Employee Retirement Income Secu8 rity Act of 1974 (29 U.S.C. 1026, 1027). 

9 SEC. 103. COMMISSION ON USA RETIREMENT FUNDS. 

10 (a) RECOGNITION OF PRIVATE COMMISSION.—The 

11 Secretary shall— 

12 (1) recognize an independent, private commis13 sion, to be known as the ‘‘Commission for USA Re14 tirement Funds Funding’’ (referred to in this title 

15 as the ‘‘Commission’’), and 

16 (2) in carrying out the Secretary’s duties under 

17 this title, consider the recommendations of such 

18 Commission. 

19 (b) COMMISSION.—The Commission recognized under 

20 subsection (a) shall meet the following requirements: 

21 (1) MEMBERSHIP.— 

22 (A) COMPOSITION.—The Commission shall 

23 be composed of 9 members selected by the Sec24 retary, in consultation with the Secretary of the 

25 Treasury, of whom no more than 5 may be 


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1 from one political party. The Secretary shall 

2 designate one member of the Commission as the 

3 Chairman. No person may be appointed to the 

4 Commission if, during the 2-year period pre5 ceding the date of appointment, such person 

6 was a trustee of a USA Retirement Fund. 

7 (B) DATE.—The appointments of the 

8 members of the Commission shall be made not 

9 later than 90 days after the date of enactment 

10 of this Act. 

11 (C) PERIOD OF APPOINTMENT; VACAN12 CIES.—Members shall be appointed for terms of 

13 2 years and may be appointed for consecutive 

14 terms. Any vacancy in the Commission shall not 

15 affect its powers, and shall be filled in the same 

16 manner as the original appointment. 

17 (2) MAJORITY VOTE.—The Commission may 

18 act by majority vote of its members, provided that 

19 at least 7 members are present. 

20 (3) COMMISSION PERSONNEL MATTERS.— 

21 (A) COMPENSATION OF MEMBERS.—Each 

22 member of the Commission who is not an offi23 cer or employee of the Federal Government 

24 shall be compensated at a rate equal to the 

25 daily equivalent of the annual rate of basic pay 


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1 prescribed for level IV of the Executive Sched2 ule under section 5315 of title 5, United States 

3 Code, for each day (including travel time) dur4 ing which such member is engaged in the per5 formance of the duties of the Commission. All 

6 members of the Commission who are officers or 

7 employees of the United States shall serve with8 out compensation in addition to that received 

9 for their services as officers or employees of the 

10 United States. 

11 (B) TRAVEL EXPENSES.—The members of 

12 the Commission shall be allowed travel ex13 penses, including per diem in lieu of subsist14 ence, at rates authorized for employees of agen15 cies under subchapter I of chapter 57 of title 5, 

16 United States Code, while away from their 

17 homes or regular places of business in the per18 formance of services for the Commission. 

19 (C) STAFF.— 

20 (i) IN GENERAL.—The Chairman of 

21 the Commission may, without regard to 

22 the civil service laws and regulations, ap23 point and terminate an executive director 

24 and such other additional personnel as 

25 may be necessary to enable the CommisVerDate Mar 15 2010 00:36 Feb 01, 2014 Jkt 039200 PO 00000 Frm 00034 Fmt 6652 Sfmt 6201 E:\BILLS\S1979.IS S1979

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1 sion to perform its duties. The employment 

2 of an executive director shall be subject to 

3 confirmation by the Commission. 

4 (ii) COMPENSATION.—The Chairman 

5 of the Commission may fix the compensa6 tion of the executive director and other 

7 personnel without regard to chapter 51 

8 and subchapter III of chapter 53 of title 5, 

9 United States Code, relating to classifica10 tion of positions and General Schedule pay 

11 rates, except that the rate of pay for the 

12 executive director and other personnel may 

13 not exceed the rate payable for level V of 

14 the Executive Schedule under section 5316 

15 of such title. 

16 (iii) DETAIL OF GOVERNMENT EM17 PLOYEES.—Any Federal Government em18 ployee may be detailed to the Commission 

19 without reimbursement, and such detail 

20 shall be without interruption or loss of civil 

21 service status or privilege. 

22 (iv) PROCUREMENT OF TEMPORARY

23 AND INTERMITTENT SERVICES.—The 

24 Chairman of the Commission may procure 

25 temporary and intermittent services under 


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1 section 3109(b) of title 5, United States 

2 Code, at rates for individuals which do not 

3 exceed the daily equivalent of the annual 

4 rate of basic pay prescribed for level V of 

5 the Executive Schedule under section 5316 

6 of such title. 

7 (4) RECOMMENDATIONS AND REGULATIONS ON

8 FUNDING AND DISTRIBUTION REQUIREMENTS.— 

9 (A) IN GENERAL.—After taking into con10 sideration the recommendations of the Commis11 sion and providing the public notice and an op12 portunity for comment, the Secretary shall pro13 mulgate regulations with respect to funding and 

14 distribution requirements for USA Retirement 

15 Funds, as necessary or appropriate in the pub16 lic interest and for the protection of partici17 pants and beneficiaries, including regulations 

18 described in subparagraphs (B) and (C). 

19 (B) REQUIREMENTS RELATING TO ANNU20 ITY PAYMENTS MADE DIRECTLY BY A FUND.— 

21 The regulations under subparagraph (A) shall 

22 provide that in the case of annuity payments 

23 made directly by the Fund— 

24 (i) the maximum annuity payment for 

25 a participant or beneficiary shall be deterVerDate Mar 15 2010 00:36 Feb 01, 2014 Jkt 039200 PO 00000 Frm 00036 Fmt 6652 Sfmt 6201 E:\BILLS\S1979.IS S1979

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1 mined using the mortality tables and inter2 est rates prescribed by the Secretary under 

3 subparagraph (C) at the time benefits 

4 commence; and 

5 (ii) the level of benefits paid may be 

6 adjusted periodically in order to reflect the 

7 mortality experience and the investment 

8 experience of the Fund, but only after the 

9 Fund has obtained a certification from a 

10 member of the American Academy of Actu11 aries that the adjustment is sustainable for 

12 the remaining lifetime of participants then 

13 receiving benefits, based on the mortality 

14 tables and interest rates prescribed under 

15 subparagraph (C) by the Secretary for that 

16 time. 

17 (C) MORTALITY TABLES AND INTEREST

18 RATES USED REQUIREMENTS.—The regulations 

19 promulgated under subparagraph (A) shall in20 clude the following: 

21 (i) MORTALITY TABLES.— 

22 (I) IN GENERAL.—The Secretary 

23 shall prescribe mortality tables to be 

24 used in determining annuity payments 

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1 bles shall be based on the actual expe2 rience of insurance companies that 

3 issue group annuities and projected 

4 trends in such experience. In pre5 scribing such tables, the Secretary 

6 shall take into account results of 

7 available independent studies of the 

8 mortality of individuals receiving an9 nuities under group annuity contracts. 

10 (II) PERIODIC REVISIONS OF

11 MORTALITY TABLES.—The Secretary 

12 shall make revisions, to become effec13 tive as soon as practicable, in any 

14 mortality table in effect to reflect 

15 more recent actual experience of in16 surance companies that issue group 

17 annuities and projected trends in such 

18 experience. In revising such tables, 

19 the Secretary shall take into account 

20 the results of more recent available 

21 independent studies of the mortality 

22 and projected trends of individuals re23 ceiving annuities under group annuity 

24 contracts. 


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1 (ii) INTEREST RATES.—The Secretary 

2 shall prescribe interest rates to be used in 

3 determining annuity payments made di4 rectly by the Fund. Such rates shall be 

5 based on the yields on investment grade 

6 corporate bonds with varying maturities 

7 and that are in the top 3 quality levels 

8 available. Interest rates shall be prescribed 

9 quarterly or more frequently, as deter10 mined by the Secretary. 

11 (5) DUTY TO ADDRESS BEST PRACTICES.—The 

12 Commission shall prepare, and periodically update, a 

13 report that describes the best practices for the gov14 ernance of boards of trustees of USA Retirement 

15 Funds, including board of trustee composition, ap16 pointment procedures, term length, term staggering, 

17 trustee qualifications, delegation of duties, and per18 formance assessment procedures. 

19 SEC. 104. LIMITATION ON EMPLOYER LIABILITY. 

20 Section 404 of the Employee Retirement Income Se21 curity Act of 1974 (29 U.S.C. 1021 et seq.) is amended 

22 by adding at the end the following: 

23 ‘‘(e) An employer shall not be a fiduciary with respect 

24 to the selection, management or administration of a USA 

25 Retirement Fund solely because such employer makes 


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1 available such Fund through an automatic USA Retire2 ment Fund arrangement. Notwithstanding the preceding 

3 sentence, employers participating in a USA Retirement 

4 Fund shall be responsible for meeting the enrollment re5 quirements and transmitting contributions, as required 

6 under the USA Retirement Funds Act.’’. 

7 SEC. 105. ENFORCEMENT AND FRAUD PREVENTION. 

8 (a) PENALTY FOR FAILURE TO TIMELY REMIT CON9 TRIBUTIONS TO AUTOMATIC USA RETIREMENT FUND

10 ARRANGEMENTS.— 

11 (1) IN GENERAL.—If an employer is required 

12 under an automatic USA Retirement Fund arrange13 ment to deposit amounts withheld from an employ14 ee’s compensation into a USA Retirement Fund but 

15 fails to do so within the time prescribed under sec16 tion 101(d)(3), such amounts shall be treated as as17 sets of a USA Retirement Fund. 

18 (2) FAILURE TO PROVIDE ACCESS TO PAYROLL

19 SAVINGS ARRANGEMENTS.— 

20 (A) GENERAL RULE.—A covered employer 

21 who fails to meet the requirements of section 

22 101(a) for a calendar year shall be subject to 

23 a civil money penalty of $100 per calendar year 

24 for each employee to whom such failure relates. 


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1 (B) EXCEPTIONS.—No civil money penalty 

2 shall be imposed under this paragraph for a 

3 failure to meet the requirements under section 

4 101(a)— 

5 (i) during a period for which the Sec6 retary determines that the employer sub7 ject to liability for the civil money penalty 

8 did not know that the failure existed and 

9 exercised reasonable diligence to meet the 

10 requirements of section 101(a); or 

11 (ii)(I) the employer subject to liability 

12 for the civil money penalty exercised rea13 sonable diligence to meet the requirements 

14 of section 101(a); and 

15 (II) the employer provides the auto16 matic USA Retirement Fund arrangement 

17 described to each employee eligible to par18 ticipate in the arrangement by the end of 

19 the 90-day period beginning on the first 

20 date the employer knew, or exercising rea21 sonable diligence should have known, that 

22 such failure existed. 

23 (C) WAIVER BY THE SECRETARY.—In the 

24 case of a failure to meet the requirements of 

25 section 101(a) that is due to reasonable cause 


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1 and not to willful neglect, the Secretary may, in 

2 the sole discretion of the Secretary, waive part 

3 or all of the civil money penalty imposed under 

4 this paragraph to the extent that the payment 

5 of such civil money penalty would be excessive 

6 or otherwise inequitable relative to the failure 

7 involved. 

8 (D) PROCEDURES FOR NOTICE.—The Sec9 retary may prescribe and implement procedures 

10 for obtaining confirmation that employers are 

11 in compliance with subsection (a). The Sec12 retary, in the discretion of such Secretary, may 

13 prescribe that the confirmation shall be ob14 tained on an annual or less frequent basis, and 

15 may use for this purpose the annual report or 

16 quarterly report for employment taxes, or such 

17 other means as the Secretary may deem advis18 able. 

19 (b) CIVIL ACTIONS AND ENFORCEMENT.— 

20 (1) ADMINISTRATION AND ENFORCEMENT.— 

21 Part 5 of title I of the Employee Retirement Income 

22 Security Act of 1974 (29 U.S.C. 1132 et seq.) shall 

23 apply to a USA Retirement Fund as if a USA Re24 tirement Fund were an employee benefit plan. 


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1 (2) AMENDMENT.—Section 502(a) of the Em2 ployee Retirement Income Security Act of 1974 (29 

3 U.S.C. 1132 et seq.) is amended— 

4 (A) in paragraph (9), by striking ‘‘; or’’ 

5 and inserting ‘‘;’’; 

6 (B) in paragraph (10), by striking the pe7 riod at the end and inserting ‘‘; or’’; and 

8 (C) by adding at the end the following: 

9 ‘‘(11) in the event that an employer fails to 

10 make timely contributions or payments to a USA 

11 Retirement Fund established under title I of the 

12 USA Retirement Funds Act, by the Secretary, a 

13 participant, a beneficiary, or a fiduciary, to compel 

14 an employer to make such contributions or payments 

15 as if such contributions or payments were delinquent 

16 contributions or payments under section 515 or sub17 section (g)(2).’’. 

18 (3) NON-PREEMPTION OF CERTAIN STATE

19 LAW.—Nothing in this section shall preempt State 

20 law insofar as State law relates to the enforcement 

21 of an obligation to contribute to a USA Retirement 

22 Fund. 

23 (c) FALSE STATEMENTS.— 

24 (1) IN GENERAL.—No person, in connection 

25 with a plan or other arrangement that is or purports 


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1 to be a USA Retirement Fund, shall make a false 

2 statement or false representation of fact, knowing it 

3 to be false, in connection with the marketing or sale 

4 of such plan or arrangement, to any employee, any 

5 member of an employee organization, any bene6 ficiary, any employer, any employee organization, 

7 the Secretary, or any State, or the representative or 

8 agent of any such person, State, or the Secretary, 

9 concerning— 

10 (A) the financial condition or solvency of 

11 such fund or arrangement; 

12 (B) the benefits provided by such fund or 

13 arrangement; 

14 (C) the regulatory status of such fund or 

15 other arrangement under any Federal or State 

16 law governing collective bargaining, labor man17 agement relations, or intern union affairs; or 

18 (D) the regulatory status of such fund or 

19 other arrangement. 

20 (2) PENALTY.—Any person who violates this 

21 subsection shall, upon conviction, be imprisoned not 

22 more than 10 years or fined under title 18, United 

23 States Code, or both. 

24 (d) CEASE AND DESIST ORDERS.— 


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1 (1) ISSUANCE OF ORDER.—The Secretary may 

2 issue a cease and desist (ex parte) order under this 

3 title if the Secretary determines that the alleged con4 duct of a fund purporting to be a USA Retirement 

5 Fund is fraudulent, or creates an immediate danger 

6 to the public safety or welfare, or is causing or can 

7 be reasonably expected to cause significant, immi8 nent, and irreparable public injury. 

9 (2) HEARINGS.— 

10 (A) IN GENERAL.—A person who is ad11 versely affected by the issuance of a cease and 

12 desist order under paragraph (1) may request a 

13 hearing by the Secretary regarding such order. 

14 The Secretary may require that a hearing 

15 under this paragraph, including all related in16 formation and evidence, be conducted in a con17 fidential manner. 

18 (B) BURDEN OF PROOF.—The burden of 

19 proof in any hearing conducted under subpara20 graph (A) shall be on the party requesting the 

21 hearing to show cause why the cease and desist 

22 order should be set aside. 

23 (C) DETERMINATION.—Based upon the 

24 evidence presented at a hearing under subpara25 graph (A), the Secretary may affirm, modify, or 


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1 set aside the cease and desist order at issue, in 

2 whole or in part. 

3 (3) REGULATIONS.—The Secretary may pro4 mulgate such regulations or other guidance as may 

5 be necessary or appropriate to carry out this sub6 section. 

7 TITLE II—DEFINED 

8 CONTRIBUTION PLAN REFORMS 

9 Subtitle A—Savings Enhancements 

10 SEC. 201. POOLED EMPLOYER PLANS. 

11 (a) NO COMMON INTEREST REQUIRED FOR POOLED

12 EMPLOYER PLANS.—Section 3(2) of the Employee Retire13 ment Income Security Act of 1974 (29 U.S.C. 1002(2)) 

14 is amended by adding at the end the following: 

15 ‘‘(C) A pooled employer plan shall be treat16 ed as a single employee pension benefit plan or 

17 single pension plan without regard to whether 

18 the participating employers share a common in19 terest other than participation in the plan.’’. 

20 (b) POOLED EMPLOYER PLAN AND PROVIDER DE21 FINED.—Section 3 of the Employee Retirement Income 

22 Security Act of 1974 (29 U.S.C. 1002) is amended by 

23 adding at the end the following: 

24 ‘‘(43)(A) The term ‘pooled employer plan’ 

25 means a pension plan (without regard to whether 


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1 any participating employers share a common interest 

2 other than participation in the plan) that is a single 

3 individual account plan established or maintained for 

4 the purpose of providing benefits to the employees of 

5 2 or more employers but only if— 

6 ‘‘(i) the terms of the plan designate a 

7 pooled plan provider, 

8 ‘‘(ii) under the plan each participating em9 ployer retains fiduciary responsibility for— 

10 ‘‘(I) the prudent selection and moni11 toring of the person designated as the 

12 pooled employer plan provider and, if dif13 ferent from the provider, the person des14 ignated as the plan’s named fiduciary, and 

15 ‘‘(II) to the extent not otherwise dele16 gated to another fiduciary, the investment 

17 and management of that portion of the 

18 plan’s assets attributable to the employees 

19 of that participating employer, 

20 ‘‘(iii) under the plan a participating em21 ployer is not subject to unreasonable restric22 tions, fees, or penalties with regard to ceasing 

23 participation or otherwise transferring assets of 

24 the plan in accordance with section 414(l) of 

25 the Internal Revenue Code of 1986, and 


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1 ‘‘(iv) the pooled employer plan provider 

2 provides to participating employers any disclo3 sures or other information as the Secretary may 

4 require. 

5 ‘‘(B) The term ‘pooled employer plan’ does not 

6 include— 

7 ‘‘(i) a multiemployer plan, or 

8 ‘‘(ii) a plan established before January 1, 

9 2014, or any successor thereof. 

10 ‘‘(44)(A) The term ‘pooled plan provider’ means 

11 a person who— 

12 ‘‘(i) is designated by the terms of a pooled 

13 employer plan as a pooled plan provider; 

14 ‘‘(ii) registers as a pooled plan provider 

15 with the Secretary and provides such other 

16 identifying information to the Secretary as the 

17 Secretary may require; and 

18 ‘‘(iii) has such educational or professional 

19 qualifications as the Secretary may require. 

20 ‘‘(B) The Secretary may perform examinations 

21 and investigations of pooled plan providers as may 

22 be necessary to enforce and carry out the purposes 

23 of the Act. 

24 ‘‘(C) For purposes of this section, the following 

25 shall be treated as a single pooled plan provider: 


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1 ‘‘(i) All corporations that provide services 

2 to a plan and are members of a controlled 

3 group of corporations within the meaning of 

4 section 1563(a) of the Internal Revenue Code 

5 of 1986 (determined without regard to sub6 section (a)(4) of such section 1563). 

7 ‘‘(ii) All persons treated as a single em8 ployer under section 210(d).’’. 

9 (c) TECHNICAL AMENDMENT.—Section 3 of such Act 

10 is amended by striking the second paragraph (41). 

11 SEC. 202. POOLED EMPLOYER AND MULTIPLE EMPLOYER 

12 PLAN REPORTING. 

13 (a) ADDITIONAL INFORMATION.—Section 103 of the 

14 Employee Retirement Income Security Act of 1974 (29 

15 U.S.C. 1023) is amended— 

16 (1) in subsection (a)(1)(B), by striking ‘‘appli17 cable subsections (d), (e), and (f)’’ and inserting 

18 ‘‘applicable subsections (d), (e), (f), and (g)’’; and 

19 (2) by adding at the end the following: 

20 ‘‘(g) ADDITIONAL INFORMATION WITH RESPECT TO

21 POOLED EMPLOYER AND MULTIPLE EMPLOYER

22 PLANS.—An annual report under this section for a plan 

23 year shall include— 

24 ‘‘(1) with respect to any pooled employer plan 

25 or other pension plan maintained by more than one 


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1 employer (other than a multiemployer plan), a list of 

2 participating employers and a good faith estimate of 

3 the percentage of the total contributions made, or 

4 expected to be made, by each such participating em5 ployer for the plan year, and 

6 ‘‘(2) with respect to a pooled employer plan, the 

7 identifying information for the person designated 

8 under the terms of the plan as the pooled plan pro9 vider.’’. 

10 (b) SIMPLIFIED ANNUAL REPORTS.—Section 104(a) 

11 of the Employee Retirement Income Security Act of 1974 

12 (29 U.S.C. 1024(a)) is amended by striking paragraph 

13 (2)(A) and inserting the following: 

14 ‘‘(2)(A) With respect to annual reports required 

15 to be filed with the Secretary under this part, the 

16 Secretary may by regulation prescribe simplified an17 nual reports for any pension plan that— 

18 ‘‘(i) covers fewer than 100 participants, or 

19 ‘‘(ii) is a pooled employer plan (as defined 

20 in section 3(43)) that covers fewer than 1,000 

21 participants but only if no single participating 

22 employer has more than 100 participants cov23 ered by the plan.’’. 


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1 (c) EFFECTIVE DATE.—The amendments made by 

2 this section shall apply to annual reports for plan years 

3 beginning after December 31, 2014. 

4 Subtitle B—Participant Protections 

5 SEC. 211. ALTERNATIVE FIDUCIARY ARRANGEMENTS TO 

6 PROTECT PLAN PARTICIPANTS. 

7 Section 405 of the Employee Retirement Income Se8 curity Act of 1974 (29 U.S.C. 1105) is amended by adding 

9 at the end the following: 

10 ‘‘(e) SMALL EMPLOYER PLAN ALTERNATIVE FIDU11 CIARY ARRANGEMENTS.— 

12 ‘‘(1) IN GENERAL.—A small employer that is a 

13 plan sponsor of an employee pension benefit plan 

14 shall not be liable for a breach of fiduciary responsi15 bility of a small employer plan service provider with 

16 respect to the same plan if the requirements of the 

17 following subparagraphs are met: 

18 ‘‘(A) SMALL EMPLOYER PLAN SPONSOR

19 REQUIREMENTS.—The requirements of this 

20 subparagraph are met if the small employer 

21 prudently selects and monitors the small em22 ployer plan named fiduciary. 

23 ‘‘(B) SMALL EMPLOYER PLAN NAMED FI24 DUCIARY REQUIREMENTS.—The requirements 


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1 of this subparagraph are met if the small em2 ployer plan named fiduciary— 

3 ‘‘(i) engages a small employer plan 

4 service provider with respect to the em5 ployee pension benefit plan; 

6 ‘‘(ii) registers as a small employer 

7 plan named fiduciary with the Secretary in 

8 accordance with paragraph (2)(A); 

9 ‘‘(iii) has such educational or profes10 sional qualifications as the Secretary may 

11 require; 

12 ‘‘(iv) provides to employers disclosures 

13 or other information as may be required by 

14 the Secretary by regulations to facilitate 

15 monitoring of the named fiduciary; 

16 ‘‘(v) is bonded in accordance with sec17 tion 412; and 

18 ‘‘(vi) meets the financial responsibility 

19 requirements of paragraph (2)(B). 

20 ‘‘(2) RULES RELATING TO NAMED FIDUCIARY

21 REQUIREMENTS.— 

22 ‘‘(A) REPORTING BY SMALL EMPLOYER

23 PLAN NAMED FIDUCIARY.—For purposes of 

24 paragraph (1)(B)(ii), the small employer plan 


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1 named fiduciary shall file the required registra2 tion with the Secretary— 

3 ‘‘(i) before the date upon which the 

4 safe harbor provided in this subsection 

5 first applies to a small employer plan spon6 sor and at such other times as the Sec7 retary may prescribe by regulations, and 

8 ‘‘(ii) in such form and manner, and 

9 containing such information, as the Sec10 retary determines necessary or appropriate 

11 to carry out the purposes of this Act. 

12 ‘‘(B) FINANCIAL RESPONSIBILITY RE13 QUIREMENTS.—For purposes of paragraph 

14 (1)(B)(vi), a small employer plan named fidu15 ciary shall meet the requirements of this sub16 paragraph if the fiduciary either— 

17 ‘‘(i) has fiduciary liability insurance 

18 with a per-claim limit equal to no less 

19 than— 

20 ‘‘(I) the greater of 5 percent of 

21 plan assets or $1,000,000; or 

22 ‘‘(II) such other amount as is de23 termined by the Secretary by regula24 tion; or 

25 ‘‘(ii) is— 


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1 ‘‘(I) a bank, as defined in section 

2 202(a)(2) of the Investment Advisers 

3 Act of 1940, that has the power to 

4 manage, acquire, or dispose of assets 

5 of a plan, and that has, as of the last 

6 day of its most recent fiscal year, eq7 uity capital in excess of $1,000,000; 

8 ‘‘(II) a savings and loan associa9 tion, the accounts of which are in10 sured by the Federal Savings and 

11 Loan Insurance Corporation, that has 

12 made application for and been granted 

13 trust powers to manage, acquire, or 

14 dispose of assets of a plan by a State 

15 or Federal authority having super16 vision over savings and loan associa17 tions, and that has, as of the last day 

18 of its most recent fiscal year, equity 

19 capital or net worth in excess of 

20 $1,000,000; 

21 ‘‘(III) an insurance company that 

22 is subject to supervision and examina23 tion by a State authority having su24 pervision over insurance companies, 

25 that is qualified under the laws of 


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1 more than one State to manage, ac2 quire, or dispose of assets of a plan, 

3 and that has, as of the last day of its 

4 most recent fiscal year, net worth in 

5 excess of $1,000,000; or 

6 ‘‘(IV) an investment adviser reg7 istered under the Investment Advisers 

8 Act of 1940 that, as of the last day 

9 of its most recent fiscal year, has total 

10 client assets under its management 

11 and control in excess of $85,000,000 

12 and shareholders’ or partners’ equity 

13 in excess of $1,000,000. 

14 ‘‘(C) ADJUSTMENT OF AMOUNTS.—The 

15 Secretary may by regulation adjust the dollar 

16 amounts under subparagraph (B)(ii). 

17 ‘‘(3) ADMINISTRATIVE SUMMARY CEASE AND

18 DESIST ORDERS AND SUMMARY SEIZURE ORDERS

19 AGAINST SMALL EMPLOYER PLAN NAMED FIDU20 CIARY.— 

21 ‘‘(A) IN GENERAL.—The Secretary may 

22 issue an ex parte cease and desist order under 

23 this title if the Secretary— 

24 ‘‘(i) determines that a small plan 

25 named fiduciary or small employer plan 


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1 service provider has not met the require2 ments under paragraph (1) or (2); or 

3 ‘‘(ii) has reasonable cause to believe 

4 that the named fiduciary or service pro5 vider has engaged in or is about to engage 

6 in conduct that is a violation of this title 

7 or that the Secretary determines to be con8 trary to accepted standards of plan oper9 ations that might result in abnormal risk 

10 to the plan or participants and bene11 ficiaries of the plan. 

12 ‘‘(B) HEARINGS.— 

13 ‘‘(i) IN GENERAL.—A person that is 

14 adversely affected by the issuance of a 

15 cease and desist order under subparagraph 

16 (A) may request a hearing by the Sec17 retary regarding such order. 

18 ‘‘(ii) CONFIDENTIALITY.—The Sec19 retary may require that a hearing under 

20 this subparagraph, including all related in21 formation and evidence, be conducted in a 

22 confidential manner. 

23 ‘‘(iii) BURDEN OF PROOF.—The bur24 den of proof in any hearing conducted 

25 under this subparagraph shall be on the 


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1 party requesting the hearing to show cause 

2 why the cease and desist order should be 

3 set aside. 

4 ‘‘(iv) DETERMINATION.—Based upon 

5 the evidence presented at a hearing under 

6 this subparagraph, the Secretary may af7 firm, modify, or set aside the cease and de8 sist order, in whole or in part. 

9 ‘‘(C) SEIZURE.—The Secretary may issue 

10 a summary seizure order under this subtitle if 

11 the Secretary determines that a small employer 

12 plan named fiduciary or small employer plan 

13 service provider is in a financially hazardous 

14 condition. 

15 ‘‘(D) REGULATIONS.—The Secretary may 

16 promulgate such regulations or other guidance 

17 as may be necessary or appropriate to carry out 

18 this paragraph. 

19 ‘‘(E) EXCEPTION.—This paragraph shall 

20 not apply to any named fiduciary that is not a 

21 named fiduciary under paragraph (1)(A) or 

22 small employer plan service provider under 

23 paragraph (1)(B)(i). 

24 ‘‘(F) SAVINGS CLAUSE.—The Secretary’s 

25 authority under this paragraph shall not be 


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1 construed to limit the Secretary’s ability to ex2 ercise enforcement or investigatory authority 

3 under any other provision of this title. The Sec4 retary may, in the sole discretion of the Sec5 retary, initiate court proceedings without using 

6 the procedures in this paragraph. 

7 ‘‘(4) DEFINITIONS.—For purposes of this sub8 section— 

9 ‘‘(A) SMALL EMPLOYER.— 

10 ‘‘(i) IN GENERAL.—The term ‘small 

11 employer’ means, with respect to any year, 

12 an employer that did not have more than 

13 50 employees on any day during the pre14 ceding year. 

15 ‘‘(ii) 2-YEAR GRACE PERIOD.—A small 

16 employer that establishes and maintains an 

17 employee pension benefit plan for 1 or 

18 more years and that is not a small em19 ployer for any subsequent year shall be 

20 treated as a small employer for the 2 years 

21 following the last year the employer was a 

22 small employer. If such employer is not a 

23 small employer as described in the pre24 ceding sentence on account of an acquisi25 tion, disposition, or similar transaction inVerDate Mar 15 2010 00:36 Feb 01, 2014 Jkt 039200 PO 00000 Frm 00058 Fmt 6652 Sfmt 6201 E:\BILLS\S1979.IS S1979

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1 volving a small employer, the preceding 

2 sentence shall not apply. 

3 ‘‘(B) SMALL EMPLOYER PLAN NAMED FI4 DUCIARY.—The term ‘small employer plan 

5 named fiduciary’ means the fiduciary that is 

6 designated as the small employer plan named 

7 fiduciary in the instrument under which an em8 ployee pension benefit plan is maintained. 

9 ‘‘(C) SMALL EMPLOYER PLAN SERVICE

10 PROVIDER.—The term ‘small employer plan 

11 service provider’ means— 

12 ‘‘(i) an administrator (as defined in 

13 section 3(16)(A)); 

14 ‘‘(ii) a fiduciary (as defined in section 

15 3(21)(A)); or 

16 ‘‘(iii) an investment manager (as de17 fined in section 3(38)), 

18 that is independent from the small employer 

19 plan named fiduciary.’’. 

20 SEC. 212. ROLLOVER PROTECTIONS. 

21 (a) SENSE OF CONGRESS.—It is the sense of Con22 gress that a person may be providing investment advice 

23 within the meaning of section 3(21) of the Employee Re24 tirement Income Security Act of 1974 (29 U.S.C. 

25 1002(21)) when such person advises a plan participant to 


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1 take a permissible plan distribution and such distribution 

2 advice is combined with a recommendation as to how the 

3 distribution should be invested. 

4 (b) GUIDANCE.—Not later than 90 days after the 

5 date of enactment of this Act, the Secretary of Labor shall 

6 issue guidance consistent with subsection (a) clarifying the 

7 applicability of section 3(21) of the Employee Retirement 

8 Income Security Act of 1974 to investment advice pro9 vided in connection with distribution recommendations. 

10 (c) FIDUCIARY AND PROHIBITED TRANSACTION

11 AWARENESS.—The Comptroller General of the United 

12 States shall study the extent to which advisors, broker13 dealers, and other financial professionals dealing with in14 dividual and employer-provided retirement plans are aware 

15 of, and receive ongoing training regarding, the require16 ments of part 4 of subtitle B of title I of the Employee 

17 Retirement Income Security Act (29 U.S.C. 1101 et seq.) 

18 and section 4975 of the Internal Revenue Code of 1986. 

19 The Comptroller General shall submit a report to the 

20 Committee on Health, Education, Labor, and Pensions of 

21 the Senate and the Committee on Education and the 

22 Workforce of the House of Representatives summarizing 

23 its findings and including recommendations regarding 

24 ways to improve awareness of and compliance with the fi25 duciary and prohibited transaction rules. 


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1 Subtitle C—Lifetime Income 

2 SEC. 221. LIFETIME INCOME DISCLOSURE. 

3 (a) REQUIREMENTS TO PROVIDE PENSION BENEFIT

4 STATEMENTS.—Section 105(a)(2)(B) of the Employee 

5 Retirement Income Security Act of 1974 (29 U.S.C. 

6 1025(a)(2)(B)) is amended— 

7 (1) in clause (i), by striking ‘‘and’’ at the end; 

8 (2) in clause (ii), by striking the period at the 

9 end and inserting ‘‘, and’’; and 

10 (3) by adding at the end the following: 

11 ‘‘(iii) an illustration of the partici12 pant’s benefit as an estimated lifetime in13 come stream beginning at retirement de14 termined in accordance with assumptions 

15 and requirements established by regula16 tion.’’. 

17 (b) LIMITATION ON LIABILITY.—Section 404 of the 

18 Employee Retirement Income Security Act of 1974 (29 

19 U.S.C. 1104), as amended by section 105, is amended by 

20 adding at the end the following: 

21 ‘‘(f) LIMITATION ON LIABILITY.—No plan fiduciary, 

22 plan sponsor, or other person shall have any liability under 

23 this title solely by reason of providing an illustration as 

24 required under section 105(a)(2)(B)(iii).’’. 


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1 (c) REGULATIONS.—Not later than 1 year after the 

2 date of the enactment of this Act, the Secretary of Labor 

3 shall issue regulations implementing the amendments 

4 made by subsections (a) and (b). 

5 (d) CLARIFICATION.—The requirement under section 

6 105(a)(2)(B)(iii) of the Employee Retirement Income Se7 curity Act of 1974, as added by subsection (a)(3), shall 

8 apply to pension benefit statements furnished more than 

9 1 year after the issuance of the final rules implementing 

10 section 105(a)(2)(B)(iii) of such Act. 

11 SEC. 222. LIFETIME INCOME SAFE HARBOR. 

12 Section 404 of the Employee Retirement Income Se13 curity Act of 1974 (29 U.S.C. 1104), as amended by sec14 tions 105 and 221(b), is amended by adding at the end 

15 the following: 

16 ‘‘(g) SAFE HARBOR FOR ANNUITY SELECTION.— 

17 ‘‘(1) IN GENERAL.—With respect to the selec18 tion of a lifetime retirement income contract as part 

19 of an individual account plan, a fiduciary will be 

20 deemed to satisfy the requirements of subsection 

21 (a)(1)(B) with respect to the selection of an insurer 

22 and lifetime retirement income contract if the fidu23 ciary engages in an objective, thorough, and analyt24 ical search for the purpose of identifying insurers 


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1 from which to purchase lifetime retirement income 

2 contracts and appropriately concludes that— 

3 ‘‘(A) at the time of the selection, the in4 surer is financially capable of satisfying its obli5 gations under the lifetime income contract; and 

6 ‘‘(B) the cost (including fees, surrender 

7 penalties, and commissions) of the selected life8 time retirement income contract is reasonable 

9 in relation to the benefits and product features 

10 of the contract and the administrative services 

11 to be provided under such contract. 

12 ‘‘(2) FIDUCIARIES.—A fiduciary meets the re13 quirements of paragraph (1)(A) if the fiduciary 

14 meets all of the following conditions: 

15 ‘‘(A) The fiduciary obtains written rep16 resentations from the insurer that— 

17 ‘‘(i) the insurer is licensed to offer 

18 lifetime retirement income contracts; 

19 ‘‘(ii) the insurer, at the time of selec20 tion and for each of the immediately pre21 ceding 10 years— 

22 ‘‘(I) operates under a certificate 

23 of authority from the Insurance Com24 missioner of its domiciliary state that 

25 has not been revoked or suspended; 


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1 ‘‘(II) has filed financial state2 ments in accordance with the laws of 

3 its domiciliary state under applicable 

4 statutory accounting principles; 

5 ‘‘(III) maintains reserves that 

6 satisfy all the statutory requirements 

7 of all States where the insurer does 

8 business; and 

9 ‘‘(IV) is not operating under an 

10 order of supervision, rehabilitation, or 

11 liquidation; 

12 ‘‘(iii) the insurer undergoes, at least 

13 every 5 years, a financial examination 

14 (within the meaning of the law of the State 

15 in which the insurer is domiciled) by the 

16 insurance commissioner of the domiciliary 

17 State (or any representative, designee, or 

18 other party approved thereby); 

19 ‘‘(iv) if, following the issuance of the 

20 representations described in clauses (i) 

21 through (iii), there is any change that 

22 would preclude the insurer from making 

23 such representations at the time of 

24 issuance of the lifetime retirement income 

25 contract, the insurer will inform the fiduVerDate Mar 15 2010 00:36 Feb 01, 2014 Jkt 039200 PO 00000 Frm 00064 Fmt 6652 Sfmt 6201 E:\BILLS\S1979.IS S1979

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1 ciary that the fiduciary can no longer rely 

2 on one or more of the representations; and 

3 ‘‘(v) meet such other requirements 

4 specified by the Secretary by regulation. 

5 ‘‘(B) The fiduciary has not received the 

6 notification described in clause (iv) of subpara7 graph (A) and has no other facts that would 

8 cause the fiduciary to question the representa9 tions described in clauses (i) through (iii) of 

10 subparagraph (A). 

11 ‘‘(C) The fiduciary inquires about addi12 tional protections that might be available 

13 through a State guaranty association for the 

14 lifetime retirement income contract. 

15 ‘‘(D) The fiduciary obtains evidence from 

16 the insurer that, not more than 1 year prior to 

17 the time of selection, the insurer has obtained 

18 written confirmation from the insurance com19 missioner of the domiciliary State of such in20 surer that, at the time the confirmation is 

21 issued, the insurer met the conditions of clauses 

22 (i) and (ii) of subparagraph (A). 

23 ‘‘(3) TIME OF SELECTION.—For purposes of 

24 this subsection, the ‘time of selection’ is— 


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1 ‘‘(A) the time that the insurer and con2 tract are selected for distribution of benefits to 

3 a specific participant or beneficiary; or 

4 ‘‘(B) the time that the insurer and con5 tract are selected to provide benefits at future 

6 dates to participants or beneficiaries, but only 

7 if the selecting fiduciary periodically reviews the 

8 continuing appropriateness of the conclusion de9 scribed in paragraph (1)(A). 

10 ‘‘(4) PERIODIC REVIEW.—For purposes of para11 graph (3)(B), a fiduciary is not required to review 

12 the appropriateness of the conclusion under para13 graph (1)(A) before or after the purchase of any 

14 contract for specific participants or beneficiaries. A 

15 fiduciary will be deemed to have conducted a peri16 odic review of the financial capability of the insurer 

17 if the fiduciary obtains the written representations 

18 described in clauses (i) through (iii) of paragraph 

19 (2)(A) on an annual basis, unless, in the interim, the 

20 fiduciary becomes aware of facts that would cause 

21 the fiduciary to question such representations. 

22 ‘‘(5) DEFINITIONS.—For purposes of this sub23 section— 

24 ‘‘(A) the term ‘insurer’ means an insur25 ance company, insurance service, or insurance 


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1 organization qualified to do business in a State 

2 and includes affiliates of such companies to the 

3 extent the affiliate is licensed to offer lifetime 

4 retirement income contracts; and 

5 ‘‘(B) the term ‘lifetime retirement income 

6 contract’ means an annuity contract or a con7 tract (or provision or feature thereof) that pro8 vides a participant fixed or variable benefits for 

9 a fixed term or the remainder of the life of the 

10 participant or the joint lives of the participant 

11 and the designated beneficiary of the partici12 pant. 

13 ‘‘(6) SAVINGS CLAUSE.—Nothing in this sub14 section shall be construed to establish minimum re15 quirements or the exclusive means for a fiduciary to 

16 satisfy the fiduciary duties under subsection 

17 (a)(1)(B). Nothing in this subsection shall be con18 strued to require a fiduciary to select the lowest cost 

19 contract. A fiduciary may consider the value, includ20 ing features and benefits of the contract and at21 tributes of the insurer, in conjunction with the con22 tract’s cost. Attributes of the insurer that may be 

23 considered may include, without limitation, the 

24 issuer’s financial strength.’’. 


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1 SEC. 223. DEFAULT INVESTMENT SAFE HARBOR CLARI2 FICATION. 

3 (a) IN GENERAL.—Section 404(c)(5) of the Em4 ployee Retirement Income Security Act of 1974 (29 

5 U.S.C. 1104(c)(5)) is amended by adding at the end the 

6 following: 

7 ‘‘(C) AVAILABILITY OF OPTIONS.—The 

8 availability of annuity purchase rights, death 

9 benefit guarantees, investment guarantees, or 

10 other features in insurance contracts will not, in 

11 and of themselves, affect the status of a fund, 

12 product, or portfolio as a default investment 

13 under this paragraph.’’. 

14 (b) RULES OF CONSTRUCTION.—The amendment 

15 made by subsection (a) shall be construed to codify exist16 ing law and shall not be construed as modifying the regu17 lations promulgated by the Secretary of Labor under sec18 tion 404(c)(5) of Employee Retirement Income Security 

19 Act of 1974 (29 U.S.C. 1104(c)(5)), as in effect before 

20 the amendment made by this section. 

21 SEC. 224. ADMINISTRATION OF JOINT AND SURVIVOR AN22 NUITY REQUIREMENTS. 

23 (a) OPTION TO APPOINT ANNUITY ADMINISTRA24 TORS.—Section 402(c) of the Employee Retirement In25 come Security Act of 1974 (29 U.S.C. 1102(c)) is amend26 ed— 


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1 (1) in paragraph (2), by striking ‘‘or’’ at the 

2 end, 

3 (2) in paragraph (3), by striking the period at 

4 the end and inserting ‘‘; or’’, and 

5 (3) by adding at the end the following new 

6 paragraph: 

7 ‘‘(4) that a named fiduciary, or a fiduciary des8 ignated by a named fiduciary pursuant to a plan 

9 procedure described in section 405(c)(1), may ap10 point an annuity administrator or administrators 

11 with responsibility for administration of an indi12 vidual account plan in accordance with the require13 ments of section 205 and payment of any annuity 

14 required thereunder.’’. 

15 (b) LIABILITY OF ANNUITY ADMINISTRATOR.—Sec16 tion 405 of the Employee Retirement Income Security Act 

17 of 1974 (29 U.S.C. 1105), as amended by section 211(a), 

18 is amended by adding at the end the following: 

19 ‘‘(f) ANNUITY ADMINISTRATOR.—If 1 or more per20 sons has been appointed under section 402(c)(4) as an an21 nuity administrator or administrators of an individual ac22 count plan, and each such person acknowledges in writing 

23 that such person is the annuity administrator and a fidu24 ciary under the plan with respect to appointed duties, nei25 ther the named fiduciary nor any appointing fiduciary 


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1 shall be liable for any act or omission of the annuity ad2 ministrator except to the extent that— 

3 ‘‘(1) the named fiduciary or appointing fidu4 ciary violated section 404(a)(1)— 

5 ‘‘(A) with respect to such appointment; or 

6 ‘‘(B) in continuing the appointment; 

7 ‘‘(2) the named fiduciary or appointing fidu8 ciary would otherwise be liable in accordance with 

9 subsection (a); or 

10 ‘‘(3) the entity appointed to be the annuity ad11 ministrator is not an insurance company or ap12 proved to be an annuity administrator by the Sec13 retary.’’. 

14 TITLE III—DEFINED BENEFIT 

15 SYSTEM REFORMS 

16 Subtitle A—Defined Benefit 

17 Pension Plan Reforms 

18 SEC. 301. HYBRID PLANS. 

19 (a) AMENDMENTS TO ERISA.— 

20 (1) REASONABLE MINIMUM RATES DIS21 REGARDED.—Section 204(b)(5)(B)(i) of the Em22 ployee Retirement Income Security Act of 1974 (29 

23 U.S.C. 1054(b)(5)(B)(i)) is amended— 

24 (A) in subclause (I), by adding at the end 

25 the following new sentence: ‘‘Any rate described 


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1 in subclause (IV) or (V) shall be disregarded in 

2 determining whether a plan is treated as satis3 fying the requirements of the first sentence of 

4 this subclause.’’; and 

5 (B) by adding at the end the following: 

6 ‘‘(IV) REASONABLE MINIMUM

7 GUARANTEED RATES FOR INVEST8 MENT-BASED INTEREST CREDITS.—In 

9 the case of an interest credit (or 

10 equivalent amount) that is based on 

11 an actual investment (or on an index 

12 that is structured to have effects simi13 lar to the effects of an actual invest14 ment), a fixed annual crediting rate 

15 equal to 3 percent (or a lower rate not 

16 less than zero that is specified in the 

17 plan) with respect to all contribution 

18 credits credited to a participant’s ac19 count balance or similar amount dur20 ing the guarantee period shall be 

21 treated as a reasonable minimum 

22 guaranteed rate of return. For pur23 poses of this subclause, the guarantee 

24 period begins on the prospective date 

25 that such reasonable minimum guarVerDate Mar 15 2010 00:36 Feb 01, 2014 Jkt 039200 PO 00000 Frm 00071 Fmt 6652 Sfmt 6201 E:\BILLS\S1979.IS S1979

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1 anteed rate applies to the partici2 pant’s benefit under the plan and 

3 ends on the date that such reasonable 

4 minimum guaranteed rate ceases to 

5 apply to the participant’s benefit. 

6 ‘‘(V) REASONABLE MINIMUM

7 RATES FOR OTHER INTEREST CRED8 ITING BASES.—In the case of an in9 terest credit (or equivalent amount) 

10 that is not described in subclause 

11 (IV), an annual interest rate equal to 

12 the lowest interest rate permitted with 

13 respect to any plan under section 

14 415(b)(2)(E)(i) of the Internal Rev15 enue Code of 1986 (without regard to 

16 section 415(b)(2)(E)(ii) of such Code) 

17 shall be treated as a reasonable min18 imum guaranteed rate of return de19 scribed in such subclause.’’. 

20 (2) PERMITTED FIXED RATES.—Section 

21 204(b)(5)(B)(i) of such Act (29 U.S.C. 

22 1054(b)(5)(B)(i)), as amended by paragraph (1)(B), 

23 is amended by adding at the end the following: 

24 ‘‘(VI) PERMITTED FIXED RATE

25 OF RETURN.—An annual interest 


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1 crediting rate that is a fixed annual 

2 crediting rate and that does not ex3 ceed the rate described in subclause 

4 (V) plus one percentage point shall be 

5 deemed to satisfy the requirements of 

6 subclause (I).’’. 

7 (3) PROTECTING PLAN PARTICIPANTS FROM

8 LOSING ACCESS TO MARKET RATES.— 

9 (A) IN GENERAL.—Section 204(b)(5)(B) 

10 of such Act (29 U.S.C. 1054(b)(5)(B)(i)(III)) is 

11 amended by adding at the end the following 

12 new clause: 

13 ‘‘(iii) SPECIAL RULES RELATING TO

14 MARKET RATE OF RETURN.—For purposes 

15 of clause (i)(III)— 

16 ‘‘(I) IN GENERAL.—Except as 

17 provided in this subclause, any rate of 

18 return available in the market, shall, 

19 under the regulation under clause 

20 (i)(III), be permitted as a market rate 

21 of return under clause (i)(I). 

22 ‘‘(II) SECRETARIAL AUTHOR23 ITY.—Except as provided in subclause 

24 (III), the Secretary of the Treasury 

25 may prescribe by regulation that a 


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1 rate of return available in the market 

2 is not permitted under clause (i)(I) if 

3 such rate is designed to evade the 

4 purposes of clause (i)(I) and is not 

5 consistent with the purposes of a de6 fined benefit plan. Such authority 

7 shall apply only to a rate of return 

8 based exclusively or primarily on the 

9 returns on employer securities (as de10 fined in section 407(d)(1)), on alter11 native investments generally not ap12 propriate as an exclusive or primary 

13 investment for retirement, or on other 

14 similar investments. 

15 ‘‘(III) SPECIFIED SAFE HARBOR

16 RATES.—The following rates of return 

17 and any combination of such rates 

18 shall be deemed to be market rates of 

19 return that satisfy clause (i)(I): 

20 ‘‘(aa) The first, second, or 

21 third segment rate (as defined in 

22 section 430(h)(2)(C) of the Inter23 nal Revenue Code of 1986 (with24 out regard to clause (iv) thereof)) 

25 or any combination of such rates. 


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1 ‘‘(bb) The discount rate on 

2 3-month, 6-month, and 12-month 

3 Treasury bills with appropriate 

4 margins determined under regu5 lations prescribed by the Sec6 retary of the Treasury. 

7 ‘‘(cc) The yield on 1-year, 2- 

8 year, 3-year, 5-year, 7-year, 10- 

9 year, and 30-year Treasury Con10 stant Maturities with appropriate 

11 margins determined under regu12 lations prescribed by the Sec13 retary of the Treasury. 

14 ‘‘(dd) The actual return on 

15 all or a diversified portion of the 

16 assets of the plan. 

17 ‘‘(ee) Any total return index 

18 or price index commonly used as 

19 an investment benchmark, as de20 termined under regulations pre21 scribed by the Secretary of the 

22 Treasury. 

23 ‘‘(ff) The rate of return on 

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1 pany licensed under the laws of a 

2 State. 

3 ‘‘(gg) A cost of living index 

4 with appropriate margin, as de5 termined under regulations pro6 mulgated by the Secretary of the 

7 Treasury. 

8 ‘‘(hh) The rate of return on 

9 a broad-based regulated invest10 ment company, as determined 

11 under regulations promulgated by 

12 the Secretary of the Treasury. 

13 ‘‘(ii) Any investment in 

14 which participants may elect to 

15 invest under a defined contribu16 tion plan maintained by the spon17 sor of the plan other than an in18 vestment with a rate of return 

19 prohibited under clause (i), a sta20 ble value fund, or an investment 

21 available only through a broker22 age account (or similar arrange23 ment).’’. 

24 (b) AMENDMENTS TO 1986 CODE.— 


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1 (1) REASONABLE MINIMUM RATES DIS2 REGARDED.—Section 411(b)(5)(B)(i) of the Internal 

3 Revenue Code of 1986 is amended— 

4 (A) in subclause (I), by adding at the end 

5 the following new sentence: ‘‘Any rate described 

6 in subclause (IV) or (V) shall be disregarded in 

7 determining whether a plan is treated as satis8 fying the requirements of the first sentence of 

9 this subclause.’’; and 

10 (B) by adding at the end the following: 

11 ‘‘(IV) REASONABLE MINIMUM

12 GUARANTEED RATES FOR INVEST13 MENT-BASED INTEREST CREDITS.—In 

14 the case of an interest credit (or 

15 equivalent amount) that is based on 

16 an actual investment (or on an index 

17 that is structured to have effects simi18 lar to the effects of an actual invest19 ment), a fixed annual crediting rate 

20 equal to 3 percent (or a lower rate not 

21 less than zero that is specified in the 

22 plan) with respect to all contribution 

23 credits credited to a participant’s ac24 count balance or similar amount dur25 ing the guarantee period shall be 


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1 treated as a reasonable minimum 

2 guaranteed rate of return. For pur3 poses of this subclause, the guarantee 

4 period begins on the prospective date 

5 that such reasonable minimum guar6 anteed rate applies to the partici7 pant’s benefit under the plan and 

8 ends on the date that such reasonable 

9 minimum guaranteed rate ceases to 

10 apply to the participant’s benefit. 

11 ‘‘(V) REASONABLE MINIMUM

12 RATES FOR OTHER INTEREST CRED13 ITING BASES.—In the case of an in14 terest credit (or equivalent amount) 

15 that is not described in subclause 

16 (IV), an annual interest rate equal to 

17 the lowest interest rate permitted with 

18 respect to any plan under section 

19 415(b)(2)(E)(i) (without regard to 

20 section 415(b)(2)(E)(ii)) shall be 

21 treated as a reasonable minimum 

22 guaranteed rate of return described in 

23 such subclause.’’. 

24 (2) PERMITTED FIXED RATES.—Section 

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1 graph (1)(B), is further amended by adding at the 

2 end the following: 

3 ‘‘(VI) PERMITTED FIXED RATE

4 OF RETURN.—An annual interest 

5 crediting rate that is a fixed annual 

6 crediting rate and that does not ex7 ceed the rate described in subclause 

8 (V) plus one percentage point shall be 

9 deemed to satisfy the requirements of 

10 subclause (I).’’. 

11 (3) PROTECTING PLAN PARTICIPANTS FROM

12 LOSING ACCESS TO MARKET RATES.— 

13 (A) IN GENERAL.—Section 411(b)(5)(B) 

14 of such Code is amended by adding at the end 

15 the following: 

16 ‘‘(iii) SPECIAL RULES RELATING TO

17 MARKET RATE OF RETURN.—For purposes 

18 of clause (i)(III)— 

19 ‘‘(I) IN GENERAL.—Except as 

20 provided in this subclause, any rate of 

21 return available in the market, shall, 

22 under the regulation under clause 

23 (i)(III), be permitted as a market rate 

24 of return under clause (i)(I). 


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1 ‘‘(II) SECRETARIAL AUTHOR2 ITY.—Except as provided in subclause 

3 (III), the Secretary may prescribe by 

4 regulation that a rate of return avail5 able in the market is not permitted 

6 under clause (i)(I) if such rate is de7 signed to evade the purposes of clause 

8 (i)(I) and is not consistent with the 

9 purposes of a defined benefit plan. 

10 Such authority shall apply only to a 

11 rate of return based exclusively or pri12 marily on the returns on employer se13 curities (as defined in section 

14 407(d)(1)), on alternative investments 

15 generally not appropriate as an exclu16 sive or primary investment for retire17 ment, or on other similar investments. 

18 ‘‘(III) SPECIFIED SAFE HARBOR

19 RATES.—The following rates of return 

20 and any combination of such rates 

21 shall be deemed to be market rates of 

22 return that satisfy clause (i)(I): 

23 ‘‘(aa) The first, second, or 

24 third segment rate (as defined in 

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1 gard to clause (iv) thereof)) or 

2 any combination of such rates. 

3 ‘‘(bb) The discount rate on 

4 3-month, 6-month, and 12-month 

5 Treasury bills with appropriate 

6 margins determined under regu7 lations prescribed by the Sec8 retary. 

9 ‘‘(cc) The yield on 1-year, 2- 

10 year, 3-year, 5-year, 7-year, 10- 

11 year, and 30-year Treasury Con12 stant Maturities with appropriate 

13 margins determined under regu14 lations prescribed by the Sec15 retary. 

16 ‘‘(dd) The actual return on 

17 all or a diversified portion of the 

18 assets of the plan. 

19 ‘‘(ee) Any total return index 

20 or price index commonly used as 

21 an investment benchmark, as de22 termined under regulations pre23 scribed by the Secretary. 

24 ‘‘(ff) The rate of return on 

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1 pant issued by an insurance com2 pany licensed under the laws of a 

3 State. 

4 ‘‘(gg) A cost of living index 

5 with appropriate margin, as de6 termined under regulations pro7 mulgated by the Secretary. 

8 ‘‘(hh) The rate of return on 

9 a broad-based regulated invest10 ment company, as determined 

11 under regulations promulgated by 

12 the Secretary. 

13 ‘‘(ii) Any investment in 

14 which participants may elect to 

15 invest under a defined contribu16 tion plan maintained by the spon17 sor of the plan other than an in18 vestment with a rate of return 

19 prohibited under clause (i), a sta20 ble value fund, or an investment 

21 available only through a broker22 age account (or similar arrange23 ment).’’. 

24 (c) PROTECTING PLAN PARTICIPANTS FROM RETRO25 ACTIVE BENEFIT DECREASES.— 


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1 (1) IN GENERAL.—If an interest credit (or 

2 equivalent amount) under a plan subject to section 

3 411(b)(5)(B)(i)(I) of the Internal Revenue Code of 

4 1986 or section 204(b)(5)(B)(i)(I) of the Employee 

5 Retirement Income Security Act of 1974 (29 U.S.C. 

6 1054(b)(5)(B)(i)(I)) was reasonable in relation to 

7 market rates in existence when such interest credit 

8 (or equivalent amount) was established (disregarding 

9 any minimum rates of return that were reasonable 

10 when established), such interest credit (or equivalent 

11 amount) shall be treated as satisfying the require12 ments of section 411(b)(5)(B)(i)(I) of such Code 

13 and section 204(b)(5)(B)(i)(I) of such Act for the 

14 transition period. 

15 (2) TRANSITION PERIOD.—For purposes of 

16 paragraph (1), the transition period, with respect to 

17 any plan, begins on the date that section 

18 411(b)(5)(B)(i)(I) of such Code or section 

19 204(b)(5)(B)(i)(I) of such Act first applied to such 

20 plan and ends on the effective date of comprehensive 

21 final regulations under such sections prescribed by 

22 the Secretary of the Treasury. 

23 (d) ENSURING FAIRNESS WHEN INTEREST CREDITS

24 ARE REQUIRED TO BE DECREASED.— 


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1 (1) IN GENERAL.—In the case of an interest 

2 credit (or equivalent amount) under a plan subject 

3 to section 411(b)(5)(B)(i)(I) of the Internal Revenue 

4 Code of 1986 or section 204(b)(5)(B)(i)(I) of the 

5 Employee Retirement Income Security Act of 1974 

6 that is in effect for the last plan year prior to the 

7 effective date of comprehensive final regulations 

8 under such section of such Code but does not comply 

9 with such regulations determined after application of 

10 subsection (c), the Secretary of the Treasury shall 

11 provide an exception from the requirements of sec12 tion 411(d)(6) of such Code and section 204(g) of 

13 such Act for a reduction in such interest credit (or 

14 equivalent amendment) that is made pursuant to 

15 such comprehensive final regulations. 

16 (2) EXCEPTION.—The exception under para17 graph (1) from section 204(g) of such Act and sec18 tion 411(d)(6) of such Code shall be issued through 

19 regulations to ensure the opportunity of interested 

20 persons to make comments through a public notice 

21 and comment process. Such exception shall permit 

22 any interest credit (or equivalent amount) to which 

23 this subsection applies to be modified to be the max24 imum fixed rate of return permitted under section 

25 204(b)(5)(B)(i)(VI) of such Act or section 


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1 411(b)(5)(B)(i)(VI) of such Code or to be the max2 imum rate permitted under any rate of return 

3 deemed to be a market rate of return pursuant to 

4 section 204(b)(5)(B)(i)(III) of such Act or section 

5 411(b)(5)(B)(i)(III) of such Code. The Secretary of 

6 the Treasury shall further structure the exception to 

7 ensure that there are clear and simple methods for 

8 plans to comply with the requirements of section 

9 204(b)(5)(B)(i)(I) of such Act and section 

10 411(b)(5)(B)(i)(I) of such Code. 

11 (e) PROTECTING PARTICIPANTS FROM PLAN

12 FREEZES THROUGH APPROPRIATE TRANSITION

13 RULES.— 

14 (1) IN GENERAL.—In the case of any defined 

15 benefit plan to which this subsection applies, com16 prehensive regulations under sections 203(f)(1) and 

17 204(b)(5)(B)(i) of the Employee Retirement Income 

18 Security Act of 1974 or sections 411(a)(13)(A) and 

19 411(b)(5)(B)(i) of the Internal Revenue Code of 

20 1986 shall not take effect before the first plan year 

21 beginning at least 1 year after the later of— 

22 (A) the date of publication of such regula23 tions; or 

24 (B) the date of publication of the regula25 tions described in subsection (d). 


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1 (2) PENSION EQUITY PLANS.—This subsection 

2 applies to any defined benefit plan that— 

3 (A) is subject to section 204(b)(5) of the 

4 Employee Retirement Income Security Act of 

5 1974 or section 411(b)(5) of the Internal Rev6 enue Code of 1986; 

7 (B) expresses any portion of any partici8 pant’s benefit as a current value equal to an ac9 cumulated percentage of the employee’s final 

10 average compensation; and 

11 (C) in the absence of guidance from the 

12 Secretary of the Treasury or the Secretary of 

13 Labor, has been structured in a reasonable, 

14 good faith manner to comply with the require15 ments of such Code and such Act with respect 

16 to benefits described in subparagraph (B). 

17 (3) PERIOD PRIOR TO EFFECTIVE DATE OF

18 REGULATIONS.—In the case of a plan to which this 

19 subsection applies, no rule shall be issued and no ad20 verse enforcement action shall be taken by the Sec21 retary of the Treasury or the Secretary of Labor 

22 with respect to a plan described in paragraph (2) re23 garding the structure of the benefits described in 

24 paragraph (2)(B) for any period prior to the effec25 tive date of comprehensive final regulations issued 


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1 by the Secretary of the Treasury with respect to 

2 such benefits. Such final regulations shall not be ef3 fective before the first plan year beginning at least 

4 1 year after publication of such regulations. 

5 (f) EFFECTIVE DATE.— 

6 (1) IN GENERAL.—Except as otherwise pro7 vided, the amendments and other provisions of this 

8 section shall take effect as if included in section 701 

9 of the Pension Protection Act of 2006 (Public Law 

10 109–280; 120 Stat. 981). 

11 (2) HOLD HARMLESS.—With respect to any pe12 riod prior to the effective date of the comprehensive 

13 regulations described in subsection (e), no plan shall 

14 fail to comply with any requirement of the Employee 

15 Retirement Income Security Act of 1974 or of the 

16 Internal Revenue Code of 1986 by reason of com17 plying with the law in effect without regard to the 

18 amendments made by subsections (a) and (b). 

19 SEC. 302. CLARIFICATION OF THE NORMAL RETIREMENT 

20 AGE. 

21 (a) AMENDMENTS TO ERISA.—Section 204 of the 

22 Employee Retirement Income Security Act of 1974 is 

23 amended by redesignating subsection (k) as subsection (l) 

24 and by inserting after subsection (j) the following new sub25 section: 


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1 ‘‘(k) SPECIAL RULE FOR DETERMINING NORMAL

2 RETIREMENT AGE FOR CERTAIN EXISTING DEFINED

3 BENEFIT PLANS.— 

4 ‘‘(1) IN GENERAL.—For purposes of section 

5 3(24), an applicable plan shall not be treated as fail6 ing to meet any requirement of this title, or as fail7 ing to have a uniform normal retirement age for 

8 purposes of this title, solely because the plan has 

9 adopted the normal retirement age described in 

10 paragraph (2). 

11 ‘‘(2) APPLICABLE PLAN.—For purposes of this 

12 subsection— 

13 ‘‘(A) IN GENERAL.—The term ‘applicable 

14 plan’ means a defined benefit plan that, on the 

15 date of the introduction of this subsection, has 

16 adopted a normal retirement age which is the 

17 earlier of— 

18 ‘‘(i) an age otherwise permitted under 

19 section 2(24), or 

20 ‘‘(ii) the age at which a participant 

21 completes the number of years (not less 

22 than 30 years) of benefit accrual service 

23 specified by the plan. 

24 A plan shall not fail to be treated as an applica25 ble plan solely because, as of such date, the 


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1 normal retirement age described in the pre2 ceding sentence only applied to certain partici3 pants or to certain employers participating in 

4 the plan. 

5 ‘‘(B) EXPANDED APPLICATION.—If, after 

6 the date described in subparagraph (A), an ap7 plicable plan expands the application of the nor8 mal retirement age described in subparagraph 

9 (A) to additional participants or participating 

10 employers, such plan shall also be treated as an 

11 applicable plan with respect to such partici12 pants or participating employers.’’. 

13 (b) AMENDMENT TO 1986 CODE.—Section 411 of the 

14 Internal Revenue Code of 1986 is amended by adding at 

15 the end the following new subsection: 

16 ‘‘(f) SPECIAL RULE FOR DETERMINING NORMAL RE17 TIREMENT AGE FOR CERTAIN EXISTING DEFINED BEN18 EFIT PLANS.— 

19 ‘‘(1) IN GENERAL.—For purposes of subsection 

20 (a)(8)(A), an applicable plan shall not be treated as 

21 failing to meet any requirement of this subchapter, 

22 or as failing to have a uniform normal retirement 

23 age for purposes of this subchapter, solely because 

24 the plan has adopted the normal retirement age de25 scribed in paragraph (2). 


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1 ‘‘(2) APPLICABLE PLAN.—For purposes of this 

2 subsection— 

3 ‘‘(A) IN GENERAL.—The term ‘applicable 

4 plan’ means a defined benefit plan that, on the 

5 date of the introduction of this subsection, has 

6 adopted a normal retirement age which is the 

7 earlier of— 

8 ‘‘(i) an age otherwise permitted under 

9 subsection (a)(8)(A), or 

10 ‘‘(ii) the age at which a participant 

11 completes the number of years (not less 

12 than 30 years) of benefit accrual service 

13 specified by the plan. 

14 A plan shall not fail to be treated as an applica15 ble plan solely because, as of such date, the 

16 normal retirement age described in the pre17 ceding sentence only applied to certain partici18 pants or to certain employers participating in 

19 the plan. 

20 ‘‘(B) EXPANDED APPLICATION.—If, after 

21 the date described in subparagraph (A), an ap22 plicable plan expands the application of the nor23 mal retirement age described in subparagraph 

24 (A) to additional participants or participating 

25 employers, such plan shall also be treated as an 


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1 applicable plan with respect to such partici2 pants or participating employers.’’. 

3 SEC. 303. MORATORIUM ON IMPOSITION OF SHUTDOWN LI4 ABILITY. 

5 (a) IN GENERAL.—The Pension Benefit Guaranty 

6 Corporation shall not bring any new action against a plan 

7 sponsor to enforce subsection (e) of section 4062 of the 

8 Employee Retirement Income Security Act of 1974 (29 

9 U.S.C. 1362) before January 30, 2016. 

10 (b) STUDY.—The Comptroller General of the United 

11 States shall study the effectiveness, fairness, and utility 

12 of section 4062(e) of the Employee Retirement Income Se13 curity Act (29 U.S.C. 1101 et seq.). No later than Janu14 ary 30, 2015, the Comptroller General shall submit a re15 port to the Committee on Health, Education, Labor, and 

16 Pensions of the Senate and the Committee on Education 

17 and the Workforce of the House of Representatives sum18 marizing its findings and including recommendations for 

19 alternative ways to protect retirees and the Pension Ben20 efit Guaranty Corporation from cessations of operations 

21 while encouraging employers to both continue to offer de22 fined benefit pension plans and to restructure as may be 

23 necessary to ensure the ongoing viability of the business. 


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1 SEC. 304. ALTERNATIVE FUNDING TARGET ATTAINMENT 

2 PERCENTAGE DETERMINED WITHOUT RE3 GARD TO REDUCTION FOR CREDIT BAL4 ANCES. 

5 (a) AMENDMENTS TO ERISA.—Section 206(g) of 

6 Employee Retirement Income Security Act of 1974 (29 

7 U.S.C. 1056(g)) is amended— 

8 (1) in paragraph (5), by striking subparagraph 

9 (C); and 

10 (2) in paragraph (9)— 

11 (A) in subparagraph (B)— 

12 (i) by striking the period at the end 

13 and inserting ‘‘; and’’; 

14 (ii) by striking ‘‘under subparagraph 

15 (A) by increasing’’ and inserting the fol16 lowing: ‘‘under subparagraph (A)— 

17 ‘‘(i) by increasing’’; and 

18 (iii) by adding at the end the fol19 lowing: 

20 ‘‘(ii) without regard to the reduction 

21 under section 303(f)(4)(B).’’; and 

22 (B) by striking subparagraphs (C) and 

23 (D). 

24 (b) AMENDMENTS TO 1986 CODE.—Section 436 of 

25 the Internal Revenue Code of 1986 is amended— 


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1 (1) in subsection (f), by striking paragraph (3); 

2 and 

3 (2) in subsection (j)— 

4 (A) in paragraph (2)— 

5 (i) by striking the period at the end 

6 and inserting ‘‘, and’’; and 

7 (ii) by striking ‘‘under paragraph (1) 

8 by increasing’’ and inserting the following: 

9 ‘‘under subparagraph (A)— 

10 ‘‘(A) by increasing’’; and 

11 (iii) by adding at the end the fol12 lowing: 

13 ‘‘(B) without regard to the reduction under 

14 section 430(f)(4)(B).’’; and 

15 (B) by striking the first and second para16 graph (3). 

17 (c) EFFECTIVE DATE.—The amendments made by 

18 this section shall apply to plan years beginning after De19 cember 31, 2014. 

20 SEC. 305. METHOD FOR DETERMINING CHANGES FOR 

21 QUARTERLY CONTRIBUTIONS. 

22 (a) AMENDMENT TO ERISA.—Section 303(j)(3)(A) 

23 of the Employee Retirement Income Security Act of 1974 

24 (29 U.S.C. 1083(j)(3)(A)) is amended by inserting ‘‘(deVerDate Mar 15 2010 00:36 Feb 01, 2014 Jkt 039200 PO 00000 Frm 00093 Fmt 6652 Sfmt 6201 E:\BILLS\S1979.IS S1979

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1 termined without regard to the reduction under subsection 

2 (f)(4)(B))’’ after ‘‘preceding plan year’’. 

3 (b) AMENDMENT TO 1986 CODE.—Section 430(j)(3) 

4 of the Internal Revenue Code of 1986 is amended by in5 serting ‘‘(determined without regard to the reduction 

6 under subsection (f)(4)(B))’’ after ‘‘preceding plan year’’. 

7 (c) EFFECTIVE DATE.—The amendments made by 

8 this section shall apply to plan years beginning after De9 cember 31, 2014. 

10 SEC. 306. ELECTION TO DISCOUNT CONTRIBUTIONS FROM 

11 FINAL DUE DATE. 

12 (a) AMENDMENT TO ERISA.—Section 303(j)(2) of 

13 the Employee Retirement Income Security Act of 1974 

14 (29 U.S.C. 1083(j)(2)) is amended by adding at the end 

15 the following: ‘‘For purposes of this paragraph, a plan 

16 sponsor may elect to treat all payments made after the 

17 valuation date as having been made on the last day per18 missible under paragraph (1).’’. 

19 (b) AMENDMENT TO 1986 CODE.—Section 430(j)(2) 

20 of the Internal Revenue Code of 1986 is amended by add21 ing at the end the following: ‘‘For purposes of this para22 graph, a plan sponsor may elect to treat all payments 

23 made after the valuation date as having been made on the 

24 last day permissible under paragraph (1).’’. 


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1 (c) EFFECTIVE DATE.—The amendments made by 

2 this section shall apply to plan years beginning after De3 cember 31, 2014. 

4 SEC. 307. SIMPLIFICATION OF ELECTIONS AND NOTICES. 

5 (a) AMENDMENTS TO ERISA.— 

6 (1) TIMELINESS OF ELECTIONS.—Section 303 

7 of the Employee Retirement Income Security Act of 

8 1974 (29 U.S.C. 1083) is amended by adding at the 

9 end the following: 

10 ‘‘(m) TIMELINESS OF ELECTIONS.—An election re11 quired to be made by the plan sponsor under this section, 

12 including an election made under rules prescribed by the 

13 Secretary of the Treasury to implement this section, shall 

14 be deemed to have been timely made if the election is made 

15 on or before the due date specified in subsection (j)(1) 

16 or, if later, the due date of the actuarial report required 

17 under section 103(d).’’. 

18 (2) TIME FOR PROVIDING NOTICE.—Section 

19 101(f)(3)(B) of the Employee Retirement Income 

20 Security Act of 1974 (29 U.S.C. 1021(f)(3)(B)) is 

21 amended— 

22 (A) in the heading, by striking ‘‘FOR

23 SMALL PLANS’’; 

24 (B) by inserting ‘‘a plan with an adjusted 

25 funding target attainment percentage of more 


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1 than 80 percent for the prior year or’’ after ‘‘In 

2 the case of’’; 

3 (C) by striking ‘‘(as such term is used 

4 under section 303(g)(2)(B))’’; and 

5 (D) by striking ‘‘upon’’ and inserting ‘‘not 

6 later than 2 months after’’. 

7 (b) AMENDMENT TO 1986 CODE.—Section 430 of the 

8 Internal Revenue Code of 1986 is amended by adding at 

9 the end the following: 

10 ‘‘(m) TIMELINESS OF ELECTIONS.—An election re11 quired to be made by the plan sponsor under this section, 

12 including an election made under rules prescribed by the 

13 Secretary to implement this section, shall be deemed to 

14 have been timely made if the election is made on or before 

15 the due date specified in subsection (j)(1) or, if later, the 

16 due date of the actuarial report required under section 

17 6059.’’. 

18 (c) EFFECTIVE DATE.—The amendments made by 

19 this section shall apply to plan years beginning after De20 cember 31, 2014. 

21 SEC. 308. IMPROVED MULTIEMPLOYER PLAN DISCLOSURE. 

22 (a) DISCLOSURE AND REPORTING BY MULTIEM23 PLOYER PLANS.— 


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1 (1) PLAN FUNDING NOTICES.—Section 101(f) 

2 of the Employee Retirement Income Security Act of 

3 1974 (29 U.S.C. 1021(f)) is amended— 

4 (A) in paragraph (2)(B)— 

5 (i) by striking clause (v); 

6 (ii) by redesignating clauses (vi) 

7 through (x) as clauses (v) through (ix), re8 spectively; 

9 (iii) in clause (vi), as so redesig10 nated— 

11 (I) by striking ‘‘(I) in the case 

12 of’’ and inserting ‘‘in the case of’’; 

13 (II) by striking ‘‘, or’’ and insert14 ing a comma; and 

15 (III) by striking subclause (II); 

16 and 

17 (iv) by amending clause (vii), as so re18 designated, to read as follows: 

19 ‘‘(vii)(I) in the case of a single-em20 ployer plan, a general description of the 

21 benefits under the plan which are eligible 

22 to be guaranteed by the Pension Benefit 

23 Guaranty Corporation, and an explanation 

24 of the limitations on the guarantee and the 


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1 circumstances under which such limitations 

2 apply, and 

3 ‘‘(II) in the case of a multiemployer 

4 plan, a statement that eligible benefits are 

5 guaranteed by the Pension Benefit Guar6 anty Corporation, and a statement of how 

7 to obtain both a general description of the 

8 benefits under the plan which are eligible 

9 to be guaranteed by the Pension Benefit 

10 Guaranty Corporation and an explanation 

11 of the limitations on the guarantee and the 

12 circumstances under which such limitations 

13 apply,’’; and 

14 (B) in paragraph (4)(C)— 

15 (i) by striking ‘‘(C) may be provided’’ 

16 and inserting ‘‘(C)(i) subject to clause (ii), 

17 may be provided’’; and 

18 (ii) by striking the period and insert19 ing the following: 

20 ‘‘(ii) in the case of such a notice provided 

21 to the Pension Benefit Guaranty Corporation, 

22 shall be in an electronic format in such manner 

23 prescribed in regulations of such Corporation.’’. 

24 (2) DISCLOSURES BY PLANS REGARDING STA25 TUS.— 


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1 (A) AMENDMENTS TO ERISA.—Section 

2 305(b)(3) of the Employee Retirement Income 

3 Security Act of 1974 (29 U.S.C. 1085(b)(3)) is 

4 amended— 

5 (i) in the paragraph heading, by strik6 ing ‘‘BY PLAN ACTUARY’’ and inserting 

7 ‘‘AND REPORT’’; 

8 (ii) by amending subparagraph (A) to 

9 read as follows: 

10 ‘‘(A) IN GENERAL.—Not later than the 

11 90th day of each plan year of a multiemployer 

12 plan, the plan sponsor shall file, in accordance 

13 with regulations prescribed by the ERISA agen14 cies, a report that contains— 

15 ‘‘(i) documentation from the plan ac16 tuary certifying to the ERISA agencies 

17 and to the plan sponsor— 

18 ‘‘(I) whether or not the plan is in 

19 endangered status for such plan year 

20 and whether or not the plan is or will 

21 be in critical status for such plan year 

22 or any of the 5 succeeding plan years, 

23 ‘‘(II) in the case of a plan which 

24 is in a funding improvement or reha25 bilitation period, whether or not the 


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1 plan is making the scheduled progress 

2 in meeting the requirements of its 

3 funding improvement or rehabilitation 

4 plan and, if not, a summary of the 

5 primary reasons the plan is not mak6 ing the scheduled progress, 

7 ‘‘(III) the funded percentage of 

8 the plan determined as of the first 

9 day of the current plan year and the 

10 value of assets and liabilities used to 

11 calculate such funded percentage, 

12 ‘‘(IV) a projection of the funding 

13 standard account on a year-by-year 

14 basis for the current plan year and 

15 the nine succeeding plan years and a 

16 statement of the actuarial assump17 tions for such projections, and 

18 ‘‘(V)(aa) subject to item (bb), a 

19 projection of the cash flow of the plan 

20 and actuarial assumptions for the cur21 rent plan year and six succeeding plan 

22 years, and 

23 ‘‘(bb) in the case in which it is 

24 certified that a multiemployer plan is 

25 or will be in endangered or critical 


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1 status for a plan year, the projection 

2 of the cash flow of the plan and actu3 arial assumptions for the current year 

4 and ten succeeding plan years, 

5 ‘‘(ii) as of the last day of the prior 

6 plan year, a good faith determination of— 

7 ‘‘(I) the fair market value of the 

8 assets of the plan, 

9 ‘‘(II) the number of participants 

10 who are— 

11 ‘‘(aa) retired or separated 

12 from service and are receiving 

13 benefits, 

14 ‘‘(bb) retired or separated 

15 participants entitled to future 

16 benefits, and 

17 ‘‘(cc) active participants 

18 under the plan, 

19 ‘‘(III) the total value of all bene20 fits paid during the prior plan year, 

21 ‘‘(IV) the total value of all con22 tributions made to the plan during the 

23 prior plan year, and 


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1 ‘‘(V) the total value of all invest2 ment gains or losses during the prior 

3 plan year, 

4 ‘‘(iii) a description of any material 

5 changes during the previous plan year to 

6 the rates at which participants accrue ben7 efits or the rate at which employers con8 tribute, 

9 ‘‘(iv) a copy of any funding improve10 ment plan, rehabilitation plan, and any up11 date thereto or modification thereof, that 

12 was adopted under this section prior to the 

13 filing of the report for the current plan 

14 year in accordance with this subparagraph 

15 and, if applicable, after the filing of the re16 port required by this subparagraph for the 

17 prior plan year, 

18 ‘‘(v) in the case of any plan amend19 ment, scheduled benefit increase or reduc20 tion, or other known event taking effect in 

21 the current plan year and having a mate22 rial effect on plan liabilities or assets for 

23 the year (as defined in regulations by the 

24 ERISA agencies), an explanation of the 

25 amendment, scheduled increase or reducVerDate Mar 15 2010 00:36 Feb 01, 2014 Jkt 039200 PO 00000 Frm 00102 Fmt 6652 Sfmt 6201 E:\BILLS\S1979.IS S1979

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1 tion, or event, and a projection to the end 

2 of such plan year of the effect of the 

3 amendment, scheduled increase or reduc4 tion, or event on plan liabilities, 

5 ‘‘(vi) in the case of a multiemployer 

6 plan certified to be in critical status for 

7 which the plan sponsor has determined 

8 that, based on reasonable actuarial as9 sumptions and upon exhaustion of all rea10 sonable measures, the plan cannot reason11 ably be expected to emerge from critical 

12 status by the end of the rehabilitation pe13 riod, a description of all reasonable meas14 ures, whether or not such measures were 

15 implemented, and a summary of the con16 sideration of such measures, 

17 ‘‘(vii) a good faith statement describ18 ing— 

19 ‘‘(I) the withdrawal of any em20 ployer during the prior plan year and 

21 the percentage of total contributions 

22 made by that employer during the 

23 prior plan year, 

24 ‘‘(II) any material reduction in 

25 total contributions or withdrawal liVerDate Mar 15 2010 00:36 Feb 01, 2014 Jkt 039200 PO 00000 Frm 00103 Fmt 6652 Sfmt 6201 E:\BILLS\S1979.IS S1979

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1 ability payments of any employers and 

2 the reason for such reduction, 

3 ‘‘(III) any significant reduction 

4 in the number of active plan partici5 pants and the reason for such reduc6 tion, and 

7 ‘‘(IV) the annual withdrawal li8 ability payment each employer is obli9 gated to pay to the plan for the plan 

10 year, whether that amount was col11 lected by the plan (and if not, the 

12 amount that was collected), and the 

13 remaining years on the employer’s ob14 ligation to make withdrawal liability 

15 payments, and 

16 ‘‘(viii) such other information as may 

17 be required by the ERISA agencies by reg18 ulation.’’; 

19 (iii) by striking subparagraph (C) and 

20 inserting the following: 

21 ‘‘(C) FORM AND MANNER.—The report re22 quired by subparagraph (A) shall be filed elec23 tronically in accordance with regulations pre24 scribed by the ERISA agencies.’’; and 

25 (iv) in subparagraph (D)— 


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1 (I) by redesignating clauses (ii) 

2 and (iii) as clauses (iii) and (iv), re3 spectively; 

4 (II) by inserting after clause (i) 

5 the following: 

6 ‘‘(ii) PLANS IN ENDANGERED OR

7 CRITICAL STATUS.—If it is certified under 

8 subparagraph (A) that a multiemployer 

9 plan is or will be in endangered or critical 

10 status, the plan sponsor shall include in 

11 the notice under clause (i)— 

12 ‘‘(I) a statement describing how 

13 a person may obtain a copy of the 

14 plan’s funding improvement or reha15 bilitation plan, as appropriate, adopt16 ed under this section and the actu17 arial and financial data that dem18 onstrate any action taken by the plan 

19 toward fiscal improvement, 

20 ‘‘(II) a summary of any funding 

21 improvement plan, rehabilitation plan, 

22 and any update thereto or modifica23 tion thereof, adopted under this sec24 tion prior to the furnishing of such 

25 notice, 


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1 ‘‘(III) a summary of the rules 

2 governing reorganization or insol3 vency, including the limitations on 

4 benefit payments, and 

5 ‘‘(IV) a general description of the 

6 benefits under the plan which are eli7 gible to be guaranteed by the Pension 

8 Benefit Guaranty Corporation and an 

9 explanation of the limitations on the 

10 guarantee and the circumstances 

11 under which such limitations apply.’’; 

12 (III) in clause (iv), as so redesig13 nated— 

14 (aa) by striking ‘‘The Sec15 retary of the Treasury, in con16 sultation with the Secretary’’ and 

17 inserting ‘‘The ERISA agencies’’; 

18 and 

19 (bb) by striking ‘‘clause (ii)’’ 

20 and inserting ‘‘clauses (ii) and 

21 (iii)’’; and 

22 (IV) by adding at the end the fol23 lowing: 

24 ‘‘(E) DESIGNATION AND COORDINATION.— 

25 The ERISA agencies shall— 


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1 ‘‘(i) designate one ERISA agency to 

2 receive the report described in subpara3 graph (A) on behalf of all the ERISA 

4 agencies, which shall each have full access 

5 to such report; and 

6 ‘‘(ii) consult with each other and de7 velop rules, regulations, practices, and 

8 forms, which to the extent appropriate for 

9 the efficient administration of the provi10 sions of this paragraph are designed to re11 place duplication of effort, duplication of 

12 reporting, conflicting or overlapping re13 quirements, and the burden of compliance 

14 with such provisions by plan administra15 tors and plan sponsors. 

16 ‘‘(F) ERISA AGENCIES.—In this para17 graph, the term ‘ERISA agencies’ means the 

18 Secretary of Labor, the Secretary of the Treas19 ury, and the Pension Benefit Guaranty Cor20 poration.’’. 

21 (B) AMENDMENTS TO 1986 CODE.—Section 

22 432(b)(3) of the Internal Revenue Code of 

23 1986 is amended— 


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1 (i) in the paragraph heading, by strik2 ing ‘‘BY PLAN ACTUARY’’ and inserting 

3 ‘‘AND REPORT’’; 

4 (ii) by amending subparagraph (A) to 

5 read as follows: 

6 ‘‘(A) IN GENERAL.—Not later than the 

7 90th day of each plan year of a multiemployer 

8 plan, the plan sponsor shall file, in accordance 

9 with regulations prescribed by the ERISA agen10 cies, a report that contains— 

11 ‘‘(i) documentation from the plan ac12 tuary certifying to the ERISA agencies 

13 and to the plan sponsor— 

14 ‘‘(I) whether or not the plan is in 

15 endangered status for such plan year 

16 and whether or not the plan is or will 

17 be in critical status for such plan year 

18 or any of the 5 succeeding plan years, 

19 ‘‘(II) in the case of a plan which 

20 is in a funding improvement or reha21 bilitation period, whether or not the 

22 plan is making the scheduled progress 

23 in meeting the requirements of its 

24 funding improvement or rehabilitation 

25 plan and, if not, a summary of the 


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1 primary reasons the plan is not mak2 ing the scheduled progress, 

3 ‘‘(III) the funded percentage of 

4 the plan determined as of the first 

5 day of the current plan year and the 

6 value of assets and liabilities used to 

7 calculate such funded percentage, 

8 ‘‘(IV) a projection of the funding 

9 standard account on a year-by-year 

10 basis for the current plan year and 

11 the nine succeeding plan years and a 

12 statement of the actuarial assump13 tions for such projections, and 

14 ‘‘(V)(aa) subject to item (bb), a 

15 projection of the cash flow of the plan 

16 and actuarial assumptions for the cur17 rent plan year and six succeeding plan 

18 years, and 

19 ‘‘(bb) in the case in which it is 

20 certified that a multiemployer plan is 

21 or will be in endangered or critical 

22 status for a plan year, the projection 

23 of the cash flow of the plan and actu24 arial assumptions for the current year 

25 and ten succeeding plan years, 


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1 ‘‘(ii) as of the last day of the prior 

2 plan year, a good faith determination of— 

3 ‘‘(I) the fair market value of the 

4 assets of the plan, 

5 ‘‘(II) the number of participants 

6 who are— 

7 ‘‘(aa) retired or separated 

8 from service and are receiving 

9 benefits, 

10 ‘‘(bb) retired or separated 

11 participants entitled to future 

12 benefits, and 

13 ‘‘(cc) active participants 

14 under the plan, 

15 ‘‘(III) the total value of all bene16 fits paid during the prior plan year, 

17 ‘‘(IV) the total value of all con18 tributions made to the plan during the 

19 prior plan year, and 

20 ‘‘(V) the total value of all invest21 ment gains or losses during the prior 

22 plan year, 

23 ‘‘(iii) a description of any material 

24 changes during the previous plan year to 

25 the rates at which participants accrue benVerDate Mar 15 2010 00:36 Feb 01, 2014 Jkt 039200 PO 00000 Frm 00110 Fmt 6652 Sfmt 6201 E:\BILLS\S1979.IS S1979

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1 efits or the rate at which employers con2 tribute, 

3 ‘‘(iv) a copy of any funding improve4 ment plan, rehabilitation plan, and any up5 date thereto or modification thereof, that 

6 was adopted under this section prior to the 

7 filing of the report for the current plan 

8 year in accordance with this subparagraph 

9 and, if applicable, after the filing of the re10 port required by this subparagraph for the 

11 prior plan year, 

12 ‘‘(v) in the case of any plan amend13 ment, scheduled benefit increase or reduc14 tion, or other known event taking effect in 

15 the current plan year and having a mate16 rial effect on plan liabilities or assets for 

17 the year (as defined in regulations by the 

18 ERISA agencies), an explanation of the 

19 amendment, scheduled increase or reduc20 tion, or event, and a projection to the end 

21 of such plan year of the effect of the 

22 amendment, scheduled increase or reduc23 tion, or event on plan liabilities, 

24 ‘‘(vi) in the case of a multiemployer 

25 plan certified to be in critical status for 


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1 which the plan sponsor has determined 

2 that, based on reasonable actuarial as3 sumptions and upon exhaustion of all rea4 sonable measures, the plan cannot reason5 ably be expected to emerge from critical 

6 status by the end of the rehabilitation pe7 riod, a description of all reasonable meas8 ures, whether or not such measures were 

9 implemented, and a summary of the con10 sideration of such measures, 

11 ‘‘(vii) a good faith statement describ12 ing— 

13 ‘‘(I) the withdrawal of any em14 ployer during the prior plan year and 

15 the percentage of total contributions 

16 made by that employer during the 

17 prior plan year, 

18 ‘‘(II) any material reduction in 

19 total contributions or withdrawal li20 ability payments of any employers and 

21 the reason for such reduction, 

22 ‘‘(III) any significant reduction 

23 in the number of active plan partici24 pants and the reason for such reduc25 tion, and 


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1 ‘‘(IV) the annual withdrawal li2 ability payment each employer is obli3 gated to pay to the plan for the plan 

4 year, whether that amount was col5 lected by the plan (and if not, the 

6 amount that was collected), and the 

7 remaining years on the employer’s ob8 ligation to make withdrawal liability 

9 payments, and 

10 ‘‘(viii) such other information as may 

11 be required by the ERISA agencies by reg12 ulation.’’; 

13 (iii) by striking subparagraph (C) and 

14 inserting the following: 

15 ‘‘(C) FORM AND MANNER.—The report re16 quired by subparagraph (A) shall be filed elec17 tronically in accordance with regulations pre18 scribed by the ERISA agencies.’’; 

19 (iv) in subparagraph (D)— 

20 (I) by redesignating clauses (ii) 

21 and (iii) as clauses (iii) and (iv), re22 spectively; 

23 (II) by inserting after clause (i) 

24 the following: 


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1 ‘‘(ii) PLANS IN ENDANGERED OR

2 CRITICAL STATUS.—If it is certified under 

3 subparagraph (A) that a multiemployer 

4 plan is or will be in endangered or critical 

5 status, the plan sponsor shall include in 

6 the notice under clause (i)— 

7 ‘‘(I) a statement describing how 

8 a person may obtain a copy of the 

9 plan’s funding improvement or reha10 bilitation plan, as appropriate, adopt11 ed under this section and the actu12 arial and financial data that dem13 onstrate any action taken by the plan 

14 toward fiscal improvement, 

15 ‘‘(II) a summary of any funding 

16 improvement plan, rehabilitation plan, 

17 and any update thereto or modifica18 tion thereof, adopted under this sec19 tion prior to the furnishing of such 

20 notice, 

21 ‘‘(III) a summary of the rules 

22 governing reorganization or insol23 vency, including the limitations on 

24 benefit payments, and 


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1 ‘‘(IV) a general description of the 

2 benefits under the plan which are eli3 gible to be guaranteed by the Pension 

4 Benefit Guaranty Corporation and an 

5 explanation of the limitations on the 

6 guarantee and the circumstances 

7 under which such limitations apply.’’; 

8 and 

9 (III) in clause (iv), as so redesig10 nated— 

11 (aa) by striking ‘‘The Sec12 retary, in consultation with the 

13 Secretary of Labor’’ and insert14 ing ‘‘The ERISA agencies’’; and 

15 (bb) by striking ‘‘clause (ii)’’ 

16 and inserting ‘‘clauses (ii) and 

17 (iii)’’; and 

18 (v) by adding at the end the following: 

19 ‘‘(E) DESIGNATION AND COORDINATION.— 

20 The ERISA agencies shall— 

21 ‘‘(i) designate one ERISA agency to 

22 receive the report described in subpara23 graph (A) on behalf of all the ERISA 

24 agencies, which shall each have full access 

25 to such report; and 


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1 ‘‘(ii) consult with each other and de2 velop rules, regulations, practices, and 

3 forms, which to the extent appropriate for 

4 the efficient administration of the provi5 sions of this paragraph are designed to re6 place duplication of effort, duplication of 

7 reporting, conflicting or overlapping re8 quirements, and the burden of compliance 

9 with such provisions by plan administra10 tors and plan sponsors. 

11 ‘‘(F) ERISA AGENCIES.—In this para12 graph, the term ‘ERISA agencies’ means the 

13 Secretary of Labor, the Secretary of the Treas14 ury, and the Pension Benefit Guaranty Cor15 poration.’’. 

16 (C) DISCLOSURES BY PLANS REGARDING

17 STATUS.—Section 4003 of the Employee Retire18 ment Income Security Act of 1974 (29 U.S.C. 

19 1303) is amended— 

20 (i) in the section heading, by inserting 

21 ‘‘; MULTIEMPLOYER PLAN INFORMA22 TION’’ after ‘‘ACTIONS’’; and 

23 (ii) by adding at the end the fol24 lowing: 


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1 ‘‘(g) The corporation is authorized to require such in2 formation as it deems necessary to investigate or review 

3 any facts, conditions, or other matters related to the actu4 arial certification and report by multiemployer plans under 

5 section 305(b)(3)(A), or to obtain such information as any 

6 duly authorized committee or subcommittee of the Con7 gress may request with respect to such plans. The pre8 ceding sentence shall be considered a statute described in 

9 section 552(b)(3) of title 5, United States Code, and the 

10 information received pursuant to such sentence shall be 

11 exempt from disclosure under such section 552(b).’’. 

12 (3) CIVIL ENFORCEMENT.— 

13 (A) IN GENERAL.—Section 502(c) of the 

14 Employee Retirement Income Security Act of 

15 1974 (29 U.S.C. 1132) is amended— 

16 (i) in paragraph (7)— 

17 (I) by striking ‘‘(7) The Sec18 retary’’ and inserting ‘‘(7)(A) The 

19 Secretary’’; and 

20 (II) by adding at the end the fol21 lowing: 

22 ‘‘(B) The Secretary may assess a civil penalty against 

23 a plan administrator (or plan sponsor with respect to the 

24 notice of endangered or critical status) of up to $110 per 

25 day from the date of the plan administrator’s or sponsor’s 


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1 failure or refusal to provide the relevant notices under sec2 tion 101(f) or section 305(b)(3)(D) to a recipient other 

3 than the Secretary or the Pension Benefit Guaranty Cor4 poration. For purposes of this paragraph, each violation 

5 with respect to any single recipient shall be treated as a 

6 separate violation.’’; 

7 (ii) by redesignating the second para8 graph (10) (regarding coordinating en9 forcement under section 502(c) of such Act 

10 with enforcement under section 1144(c)(8) 

11 of the Social Security Act) as paragraph 

12 (12); and 

13 (iii) by inserting after paragraph (10) 

14 (regarding enforcement authority relating 

15 to use of genetic information) the fol16 lowing: 

17 ‘‘(11)(A) The Secretary may assess a civil pen18 alty against any plan sponsor of up to $1,100 per 

19 day from the date of the plan sponsor’s failure to 

20 file with the Secretary the notice required under sec21 tion 305(b)(3)(D) or with the Pension Benefit Guar22 anty Corporation the notice required under section 

23 101(f). 

24 ‘‘(B) The Secretary may assess a civil penalty 

25 against any plan sponsor of up to $1,100 per day 


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1 from the date of the plan sponsor’s failure to file 

2 with the ERISA agency designated in accordance 

3 with subparagraph (E) of section 305(b)(3) the re4 port under subparagraph (A) of such section.’’. 

5 (B) CONFORMING AMENDMENT.—Section 

6 502(a)(6) of such Act is amended by striking 

7 ‘‘or (9)’’ and inserting ‘‘(9), (10), or (11)’’. 

8 (b) COORDINATION WITH RESPECT TO MULTIEM9 PLOYER PLANS.— 

10 (1) IN GENERAL.—Subtitle A of title III of the 

11 Employee Retirement Income Security Act of 1974 

12 (29 U.S.C. 1201 et seq.) is amended by adding at 

13 the end the following: 

14 ‘‘SEC. 3005. DATABASE OF MULTIEMPLOYER PLAN INFOR15 MATION. 

16 ‘‘(a) IN GENERAL.—The Secretary of Labor, the Sec17 retary of the Treasury, and the Pension Benefit Guaranty 

18 Corporation shall jointly establish an electronic database 

19 that contains the following information: 

20 ‘‘(1) Each defined benefit plan funding notice 

21 submitted to the Pension Benefit Guaranty Corpora22 tion by a multiemployer plan under section 101(f). 

23 ‘‘(2) Each report submitted by a multiemployer 

24 plan under section 305(b)(3)(A). 


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1 ‘‘(3) Each notice submitted to the Secretary of 

2 Labor and the Pension Benefit Guaranty Corpora3 tion by a multiemployer plan under section 

4 305(b)(3)(D). 

5 ‘‘(b) SHARED ACCESS TO DATABASE.—Subject to the 

6 agreement described in subsection (c), the Secretary of 

7 Labor, the Secretary of the Treasury, and the Pension 

8 Benefit Guaranty Corporation shall have full access to the 

9 data in the database established under subsection (a). To 

10 avoid unnecessary expense and duplication of functions 

11 among the agencies, the Secretary of Labor, the Secretary 

12 of the Treasury, and the Pension Benefit Guaranty Cor13 poration may make such arrangements and agreements 

14 for cooperation or mutual assistance with respect to access 

15 to and utilization of the data in the database. 

16 ‘‘(c) SHARED COST OF DATABASE.—The Secretary 

17 of Labor, the Secretary of the Treasury, and the Pension 

18 Benefit Guaranty Corporation shall execute a cost sharing 

19 agreement to equitably allocate the design, implementa20 tion, and maintenance costs of the database established 

21 under subsection (a). 

22 ‘‘(d) EXEMPTION.—The information contained in the 

23 report described under subsection (a)(2) shall be exempt 

24 from disclosure under section 552(b) of title 5, United 

25 States Code. For purposes of such section 552 of title 5, 


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1 United States Code, this subsection shall be considered a 

2 statute described in subsection (b)(3) of such section 

3 552.’’. 

4 (2) CLERICAL AMENDMENT.—The table of sec5 tions for subtitle A of title III of the Employee Re6 tirement Income Security Act of 1974 is amended by 

7 adding at the end the following new item: 

‘‘3005. Database of multiemployer plan information.’’. 

8 (c) APPLICABILITY.—This section (and the amend9 ments made by this section) shall apply to plan years be10 ginning after the date that is 1 year after the date of en11 actment of this Act. 

12 Subtitle B—Improvements to the 

13 Pension Insurance Program 

14 SEC. 311. MODIFICATIONS OF TECHNICAL CHANGES MADE 

15 BY THE PENSION PROTECTION ACT OF 2006 

16 TO TERMINATION LIABILITY. 

17 (a) IN GENERAL.—Section 4062(c) of the Employee 

18 Retirement Income Security Act of 1974 (29 U.S.C. 

19 1362(c)) is amended by striking paragraphs (1) and (2) 

20 and inserting the following: 

21 ‘‘(1) the aggregate unpaid minimum required 

22 contributions (within the meaning of section 

23 4971(c)(4) of the Internal Revenue Code of 1986) of 

24 the plan (if any) for the plan year in which the ter25 mination date occurs and for all preceding plan 


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1 years, including, for purposes of this paragraph, the 

2 amount of any increase in such aggregate unpaid 

3 minimum required contributions that would result 

4 if— 

5 ‘‘(A) all pending applications for waivers of 

6 the minimum funding standard under section 

7 302(c) of this Act and section 412(c) of such 

8 Code with respect to such plan were denied, 

9 and 

10 ‘‘(B) no additional contributions (other 

11 than those already made by the termination 

12 date) were made for the plan year in which the 

13 termination date occurs or for any previous 

14 plan year, and 

15 ‘‘(2) the unamortized portion (if any) of any 

16 amounts waived for the plan under section 302(c) of 

17 this Act and section 412(c) of such Code for— 

18 ‘‘(A) the plan year in which the termi19 nation date occurs, and 

20 ‘‘(B) all preceding plan years,’’. 

21 (b) EFFECTIVE DATE.—The amendments made by 

22 this section shall take effect as if included in section 107 

23 of the Pension Protection Act of 2006 (Public Law 109– 

24 280; 120 Stat. 816). 


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1 SEC. 312. PAYMENT OF LUMP SUM DISTRIBUTIONS IN 

2 BANKRUPTCY. 

3 (a) AMENDMENTS TO ERISA.—The second sentence 

4 of section 206(g)(3)(B) of the Employee Retirement In5 come Security Act of 1974 (29 U.S.C. 1056(g)(3)) is 

6 amended to read as follows: ‘‘The preceding sentence shall 

7 not apply on or after the date on which the enrolled actu8 ary of the plan certifies that the adjusted funding target 

9 attainment percentage of such plan (determined by not 

10 taking into account any adjustment of segment rates 

11 under section 303(h)(2)(C)(iv)) is not less than 100 per12 cent.’’. 

13 (b) AMENDMENTS TO 1986 CODE.—The second sen14 tence of section 436(d)(2) of the Internal Revenue Code 

15 of 1986 is amended to read as follows: ‘‘The preceding 

16 sentence shall not apply on or after the date on which the 

17 enrolled actuary of the plan certifies that the adjusted 

18 funding target attainment percentage of such plan (deter19 mined by not taking into account any adjustment of seg20 ment rates under section 430(h)(2)(C)(iv)) is not less than 

21 100 percent.’’. 

22 (c) EFFECTIVE DATE.—The amendments made by 

23 this section shall take effect as of July 6, 2012. 

24 SEC. 313. TRUSTEESHIP CLARIFICATIONS. 

25 (a) APPOINTMENT OF TRUSTEES IN PLAN TERMI26 NATION INSTITUTED BY PBGC.— 


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1 (1) IN GENERAL.—Subsections (a) and (b) of 

2 section 4002 (29 U.S.C. 1342) are amended to read 

3 as follows: 

4 ‘‘(a) AUTHORITY TO INSTITUTE PROCEEDINGS TO

5 TERMINATE A PLAN.— 

6 ‘‘(1) IN GENERAL.—The corporation may insti7 tute proceedings under this section to terminate a 

8 plan whenever it determines that the plan must be 

9 terminated in order to protect the interests of the 

10 participants or to avoid any unreasonable deteriora11 tion of the financial condition of the plan or any un12 reasonable increase in the liability of the corpora13 tion, as shown by one or more of the following condi14 tions: 

15 ‘‘(A) The plan has not met the minimum 

16 funding standard required under section 412 of 

17 the Internal Revenue Code of 1986, or has been 

18 notified by the Secretary of the Treasury that 

19 a notice of deficiency under section 6212 of 

20 such Code has been mailed with respect to the 

21 tax imposed under section 4971(a) of such 

22 Code. 

23 ‘‘(B) The plan will be unable to pay bene24 fits when due. 


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1 ‘‘(C) The reportable event described in sec2 tion 4043(c)(7) has occurred. 

3 ‘‘(D) The possible long-run loss of the cor4 poration with respect to the plan may reason5 ably be expected to increase unreasonably if the 

6 plan is not terminated. 

7 ‘‘(2) REQUIREMENT.—The corporation shall, as 

8 soon as practicable, institute proceedings under this 

9 section to terminate a single-employer plan whenever 

10 the corporation determines that the plan does not 

11 have assets available to pay benefits which are cur12 rently due under the terms of the plan. Notwith13 standing any other provision of this subchapter, the 

14 corporation shall, to the extent practicable, pool as15 sets of terminated plans for purposes of administra16 tion, investment, payment of liabilities of all such 

17 terminated plans, and such other purposes as the 

18 corporation determines to be appropriate in the ad19 ministration of this title. 

20 ‘‘(b) APPOINTMENT OF THE CORPORATION TO AD21 MINISTER PLAN.— 

22 ‘‘(1) IN GENERAL.—Whenever the corporation 

23 makes a determination under subsection (a) with re24 spect to a plan or is required under subsection (a) 

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1 poration may, upon notice to the plan, apply to the 

2 appropriate United States district court to appoint 

3 the corporation as the person to administer the plan 

4 with respect to which the determination is made 

5 pending the issuance of a decree under subsection 

6 (c) ordering the termination of the plan. If, within 

7 3 business days after the filing of an application 

8 under this subsection (or such other period as the 

9 court may order), the administrator of the plan con10 sents to the appointment of the corporation to ad11 minister the plan, or fails to show why the corpora12 tion should not be so appointed, the court may grant 

13 the application and appoint the corporation to ad14 minister the plan in accordance with its terms until 

15 the corporation determines that the plan should be 

16 terminated or that termination is unnecessary. 

17 ‘‘(2) APPOINTMENT.—Notwithstanding any 

18 other provision of this title— 

19 ‘‘(A) upon the petition of a plan adminis20 trator or the corporation, the appropriate 

21 United States district court may appoint the 

22 corporation to administer the plan in accord23 ance with the provisions of this section if the 

24 interests of the plan participants would be bet25 ter served by such appointment, and 


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1 ‘‘(B) upon the petition of the corporation, 

2 the appropriate United States district court 

3 shall appoint a trustee proposed by the corpora4 tion for a multiemployer plan which is in reor5 ganization to which section 4041A(d) applies, 

6 unless such appointment would be adverse to 

7 the interests of the plan participants and bene8 ficiaries in the aggregate. 

9 ‘‘(3) AGREEMENT TO APPOINTMENT.—The cor10 poration and plan administrator may agree to the 

11 appointment of the corporation to administer the 

12 plan without proceeding in accordance with the re13 quirements of paragraphs (1) and (2).’’. 

14 (2) CONFORMING AMENDMENTS.— 

15 (A) Subsection (c) of such section 4042 is 

16 amended— 

17 (i) by striking ‘‘(c)(1)’’ and all that 

18 follows through the end of paragraph (1) 

19 and inserting the following: 

20 ‘‘(c) DECREE ENFORCING DETERMINATION THAT

21 PLAN MUST BE TERMINATED.— 

22 ‘‘(1) COURT DECREE.— 

23 ‘‘(A) APPLICATION.—If the corporation is 

24 required under subsection (a) to commence pro25 ceedings under this section with respect to a 


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1 plan or, after issuing a notice under this section 

2 to a plan administrator, has determined that 

3 the plan should be terminated, the corporation 

4 may, upon notice to the plan administrator, 

5 apply to the appropriate United States district 

6 court for a decree enforcing the corporation’s 

7 determination that the plan be terminated. 

8 ‘‘(B) DECREE.— 

9 ‘‘(i) IN GENERAL.—The district court 

10 shall issue the decree under subparagraph 

11 (A) unless such court finds, upon review of 

12 the administrative record of the corpora13 tion’s determination under subsection (a), 

14 that such determination was arbitrary, ca15 pricious, an abuse of discretion, or other16 wise not in accordance with law. 

17 ‘‘(ii) EFFECT OF DECREE.—Upon 

18 granting a decree for which the corpora19 tion has applied under this subsection, the 

20 court shall authorize the corporation if ap21 pointed under subsection (b) (or appoint 

22 the corporation if such corporation has not 

23 been appointed under such subsection and 

24 authorize the corporation) to terminate the 


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1 plan in accordance with the provisions of 

2 this subtitle. 

3 ‘‘(C) WAIVER OF APPLICATION.—If the 

4 corporation and the plan administrator agree 

5 that a plan should be terminated and agree to 

6 the appointment of the corporation to carry out 

7 the termination of the plan without proceeding 

8 in accordance with the requirements of this 

9 subsection (other than this subparagraph), the 

10 corporation shall have the power described in 

11 subsection (d)(1) and shall be subject to the du12 ties described in subsection (d)(3) and any 

13 other duties imposed on the corporation under 

14 any other provision of law or by agreement be15 tween the corporation and the plan adminis16 trator.’’; and 

17 (ii) in paragraph (2), by striking ‘‘(2) 

18 In the case of’’ and inserting ‘‘(2) PRO19 VIDING OF INFORMATION.—In the case 

20 of’’. 

21 (B) Subsection (d) of such section 4042 is 

22 amended— 

23 (i) in paragraph (1)(A)— 

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1 serting ‘‘If the corporation is ap2 pointed to administer a plan under 

3 subsection (b), the corporation’’; 

4 (II) in clause (ii), by striking 

5 ‘‘himself as trustee’’ and inserting 

6 ‘‘the corporation’’; 

7 (III) in clause (iii), by striking 

8 ‘‘he’’ and inserting ‘‘the corporation’’; 

9 (IV) in clause (iv), by striking 

10 ‘‘his appointment’’ and inserting ‘‘the 

11 appointment of the corporation’’; 

12 (V) in clause (vi), by striking 

13 ‘‘he’’ and inserting ‘‘the corporation’’; 

14 (VI) in clause (vii), by striking 

15 ‘‘trustee’’ and inserting ‘‘corporation’’; 

16 and 

17 (VII) by striking the flush lan18 guage after clause (vii) and inserting 

19 the following: 

20 ‘‘If the court to which application is made 

21 under subsection (c) dismisses the application 

22 with prejudice, or if the corporation fails to 

23 apply for a decree under subsection (c), within 

24 30 days after the date on which the corporation 

25 is appointed under subsection (b), the corporaVerDate Mar 15 2010 00:36 Feb 01, 2014 Jkt 039200 PO 00000 Frm 00130 Fmt 6652 Sfmt 6201 E:\BILLS\S1979.IS S1979

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1 tion shall transfer all assets and records of the 

2 plan held by such corporation to the plan ad3 ministrator not later than 3 business days after 

4 such dismissal or the expiration of such 30-day 

5 period, and shall not be liable to the plan or 

6 any other person for the acts of the corporation 

7 in administering the plan except for willful mis8 conduct or gross negligence. The 30-day period 

9 described in the preceding sentence may be ex10 tended as provided by agreement between the 

11 plan administrator and the corporation or by 

12 court order.’’; 

13 (ii) in paragraph (1)(B)— 

14 (I) in the matter preceding clause 

15 (i), by striking ‘‘trustee’’ and insert16 ing ‘‘corporation’’; 

17 (II) by striking clauses (iii) and 

18 (v); 

19 (III) by redesignating clause (iv) 

20 as clause (iii); and 

21 (IV) by redesignating clauses (vi) 

22 through (viii) as clauses (iv) through 

23 (vi), respectively; 

24 (iii) in paragraph (2)— 


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1 (I) in the matter preceding sub2 paragraph (A) by striking ‘‘his ap3 pointment, the trustee’’ and inserting 

4 ‘‘the appointment of the corporation 

5 to administer the plan, the corpora6 tion’’; and 

7 (II) in subparagraph (D) by 

8 striking ‘‘section’’; and 

9 (iv) by striking paragraph (3) and in10 serting the following: 

11 ‘‘(3) Except to the extent inconsistent with the 

12 provisions of this Act, the corporation, as appointed 

13 under this section, shall be subject to the same du14 ties as those of a trustee under section 704 of title 

15 11, United States Code, and shall be, with respect 

16 to the plan, a fiduciary within the meaning of sec17 tion 3(21) (except to the extent that the provisions 

18 of this title are inconsistent with the requirements 

19 applicable under part 4 of subtitle B of title I). Not20 withstanding any references in this section to admin21 istering a plan, the corporation shall not be consid22 ered a plan administrator within the meaning of sec23 tion 3 and shall not be subject to the duties of a 

24 plan administrator under title I, including the duty 

25 to file reports on behalf of the plan. 


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1 ‘‘(4) When appointed under subsection (b) to 

2 administer a plan or granted a decree to terminate 

3 a plan under subsection (c), the corporation shall, 

4 within 30 days of the receipt of a written request 

5 from any participant or beneficiary of the plan (or 

6 as soon as practicable thereafter), furnish a copy of 

7 the plan document, summary plan description, and 

8 other instruments under which the plan is estab9 lished or operated that relate to the participant’s or 

10 beneficiary’s benefit under the plan. The corporation 

11 may charge a reasonable fee to cover the cost of fur12 nishing complete copies.’’. 

13 (C) Subsection (f) of such section 4042 is 

14 amended to read as follows: 

15 ‘‘(f) Upon the filing of an application for the appoint16 ment of the corporation to administer a plan or the 

17 issuance of a decree under this section, the court to which 

18 an application is made shall have exclusive jurisdiction of 

19 the plan involved and property of the plan, wherever lo20 cated, with the powers, to the extent consistent with the 

21 purposes of this section, of a court of the United States 

22 having jurisdiction over cases under chapter 11 of title 11, 

23 United States Code. Pending an adjudication under sub24 section (c), such court shall stay, and upon appointment 

25 of the corporation to carry out the termination of the plan 


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1 under this section, such court shall continue the stay of 

2 any pending mortgage foreclosure, equity receivership, or 

3 other proceeding to reorganize, conserve, or liquidate the 

4 plan or the property of the plan and any other suit against 

5 any receiver, conservator, or trustee of the plan or prop6 erty of the plan. Pending such adjudication and upon the 

7 appointment of the corporation to carry out the termi8 nation of the plan, the court may stay any proceeding to 

9 enforce a lien against property of the plan or any other 

10 suit against the plan.’’. 

11 (D) Such section 4042 is amended by 

12 striking subsection (h). 

13 (b) OTHER CONFORMING AND TECHNICAL AMEND14 MENTS.— 

15 (1) Section 4002(h)(1) of such Act (29 U.S.C. 

16 1302(h)(1)) is amended— 

17 (A) in the first sentence— 

18 (i) in subparagraph (A), by striking 

19 ‘‘the appointment of trustees in termi20 nation proceedings’’ and inserting ‘‘the ap21 pointment of the corporation to administer 

22 or carry out a termination of a plan under 

23 section 4042’’; and 


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1 (ii) in subparagraph (C), by striking 

2 ‘‘under a trustee’’ and inserting ‘‘under the 

3 corporation’’; and 

4 (B) in the second sentence— 

5 (i) by striking ‘‘recommend persons 

6 for appointment as trustees in termination 

7 proceedings,’’; 

8 (ii) by striking the comma after 

9 ‘‘funds’’; and 

10 (iii) by striking ‘‘under a trustee’’ and 

11 inserting ‘‘under the corporation’’. 

12 (2) Section 4003 of such Act (29 U.S.C. 1303) 

13 is amended— 

14 (A) in subsection (e)(6)(B), by amending 

15 clause (ii) to read as follows: 

16 ‘‘(ii) If the corporation brings the action on be17 half of a plan that the corporation was appointed to 

18 administer or terminate under section 4042, the ap19 plicable date specified in this subparagraph is the 

20 date on which the corporation was so appointed if 

21 such date is later than the date described in clause 

22 (i).’’; and 

23 (B) in subsection (f)(4), by striking ‘‘the 

24 corporation in its capacity as a trustee under 

25 section 4042 or 4049’’ and inserting ‘‘the corVerDate Mar 15 2010 00:36 Feb 01, 2014 Jkt 039200 PO 00000 Frm 00135 Fmt 6652 Sfmt 6201 E:\BILLS\S1979.IS S1979

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1 poration in its capacity as a trustee under sec2 tion 4049 or in its capacity in administering a 

3 plan pursuant to its appointment under section 

4 4042(b) or carrying out the termination of a 

5 plan pursuant to its appointment under section 

6 4042(c)’’. 

7 (3) Section 4004(b) of such Act (29 U.S.C. 

8 1304(b)) is amended— 

9 (A) in paragraph (1), by striking ‘‘pension 

10 plans trusteed by the corporation’’ and insert11 ing ‘‘pension plans for which the corporation 

12 has been appointed under section 4042 to carry 

13 out their termination’’; and 

14 (B) in paragraph (2), by striking ‘‘plans 

15 trusteed by the corporation’’ and inserting 

16 ‘‘plans for which the corporation has been ap17 pointed under section 4042 to carry out their 

18 termination’’. 

19 (4) Section 4005(b)(1)(B) of such Act (29 

20 U.S.C. 1305(b)(1)(B)) is amended by striking ‘‘a 

21 plan administered under section 4042 by a trustee’’ 

22 and inserting ‘‘a plan that the corporation has been 

23 appointed to terminate under section 4042’’. 


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1 (5) Section 4007(a) of such Act (29 U.S.C. 

2 1307(a)) is amended by striking ‘‘a trustee’’ and in3 serting ‘‘the corporation’’. 

4 (6) Section 4044 of such Act (29 U.S.C. 1344) 

5 is amended— 

6 (A) in subsection (c), by striking ‘‘the date 

7 a trustee is appointed under section 4042(b)’’ 

8 and inserting ‘‘the date the corporation is ap9 pointed under section 4042(b) to administer the 

10 plan’’; and 

11 (B) in subsection (f)— 

12 (i) in paragraph (2)(C)(ii), by striking 

13 ‘‘the trustee appointed under section 

14 4042(b) or (c)’’ and inserting ‘‘the cor15 poration, for the account of the plan’’; and 

16 (ii) in paragraph (3), by amending 

17 subparagraph (B) to read as follows: 

18 ‘‘(B) the amount of any liability to the cor19 poration under section 4062(b) or (c).’’. 

20 (7) Section 4045 of such Act (29 U.S.C. 1345) 

21 is amended by striking ‘‘trustee’’ each place such 

22 term appears in subsections (a) and (c) and insert23 ing ‘‘corporation’’. 

24 (8)(A) Section 4046 of such Act (29 U.S.C. 

25 1346) is repealed. 


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1 (B) The table of sections for subtitle C of title 

2 IV of such Act is amended by striking the item re3 lating to section 4046. 

4 (9) Section 4048 of such Act (29 U.S.C. 1348) 

5 is amended— 

6 (A) in subsection (a)(4), by striking ‘‘(or 

7 the trustee)’’; and 

8 (B) in subsection (b)(2), by striking ‘‘(or 

9 the trustee appointed under section 4042(b)(2), 

10 if any)’’. 

11 (10) Section 4050(a)(2) of such Act (29 U.S.C. 

12 1350(a)(2)) is amended by striking ‘‘to the corpora13 tion as trustee, and shall be held with assets of ter14 minated plans for which the corporation is trustee 

15 under section 4042’’ and inserting ‘‘to the corpora16 tion, as appointed under section 4042 to carry out 

17 the termination of a plan, and shall be held with as18 sets of terminated plans that the corporation has 

19 been appointed to terminate under section 4042’’. 

20 (11) Section 4062 of such Act (29 U.S.C. 

21 1362), as amended by sections 303 and 321, is 

22 amended— 

23 (A) in subsection (a), by striking para24 graphs (1) and (2) and inserting the following: 


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1 ‘‘(1) liability to the corporation, for the account 

2 of the corporation, to the extent provided in sub3 section (b), and 

4 ‘‘(2) liability to the corporation, for the account 

5 of the plan, to the extent provided in subsection 

6 (c).’’; 

7 (B) in the heading of subsection (b), by in8 serting ‘‘FOR ITS OWN ACCOUNT’’ after ‘‘COR9 PORATION’’; and 

10 (C) in subsection (c)— 

11 (i) in the heading, by striking ‘‘SEC12 TION 4042 TRUSTEE’’ and inserting ‘‘THE

13 CORPORATION FOR THE ACCOUNT OF THE

14 PLAN’’; and 

15 (ii) in the matter preceding paragraph 

16 (1), by striking ‘‘the trustee appointed 

17 under subsection (b) or (c) of section 

18 4042’’ and inserting ‘‘the corporation, for 

19 the account of the plan, as appointed 

20 under section 4042 to carry out the termi21 nation of the plan’’. 

22 SEC. 314. RECORDKEEPING FOR TERMINATING PLANS. 

23 (a) SINGLE-EMPLOYER PLAN BENEFITS GUARAN24 TEED.—Section 4022 of the Employee Retirement Income 


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1 Security Act of 1974 (29 U.S.C. 1322) is amended by 

2 adding at the end the following: 

3 ‘‘(i) RECORDKEEPING.—The Corporation may issue 

4 regulations to require plan sponsors or plan administra5 tors to maintain records necessary to enable the to deter6 mine benefits as of the termination date. Such regulations 

7 may require plan sponsors or plan administrators to cer8 tify to the corporation that such records are being main9 tained.’’. 

10 (b) ALLOCATION OF ASSETS.—Section 4044 of the 

11 Employee Retirement Income Security Act of 1974 (29 

12 U.S.C. 1344) is amended by adding at the end the fol13 lowing: 

14 ‘‘(g) RECORDKEEPING.—The Corporation may issue 

15 regulations to require plan sponsors or plan administra16 tors to maintain records necessary to enable the Corpora17 tion to determine benefits as of the termination date. Such 

18 regulations may require plan sponsors or plan administra19 tors to certify to the corporation that such records are 

20 being maintained.’’. 

21 SEC. 315. TERMINATION DATE IN BANKRUPTCY. 

22 Sections 4022(g) and 4044(e) of the Employee Re23 tirement Income Security Act of 1974, as added by section 

24 404 of the Pension Protection Act of 2006 (Public Law 

25 109–280; 120 Stat. 928), are repealed as of December 31, 


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1 2014, and shall not apply with respect to proceedings initi2 ated under title 11, United States Code, or under any 

3 similar Federal law or law of a State or political subdivi4 sion, on or after such date. 

5 TITLE IV—OTHER SYSTEMIC 

6 REFORMS 

7 SEC. 401. PLAN AUDIT QUALITY IMPROVEMENT. 

8 (a) ANNUAL REPORTS.—Section 103(a)(3) of the 

9 Employee Retirement Income Security Act of 1974 (29 

10 U.S.C. 1023(a)(3)) is amended— 

11 (1) in subparagraph (A), by striking ‘‘in con12 formity with generally accepted accounting principles 

13 applied on a basis consistent with that of the pre14 ceding year. Such examination shall be conducted in 

15 accordance with generally accepted auditing stand16 ards, and shall involve such tests of the books and 

17 records of the plan as are considered necessary by 

18 the independent qualified public accountant.’’ and 

19 inserting ‘‘in conformity with generally accepted ac20 counting principles, as superseded or modified by the 

21 Secretary in regulations, applied on a basis con22 sistent with that of the preceding year. Such exam23 ination shall be conducted in accordance with gen24 erally accepted auditing standards, except as super25 seded or modified by the Secretary in regulations, 


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1 and shall involve such tests of the books and records 

2 of the plan as are considered necessary by the inde3 pendent qualified public accountant.’’; and 

4 (2) by adding at the end the following: 

5 ‘‘(E) Persons described in subparagraphs 

6 (i) through (iii) of subparagraph (D) shall be 

7 subject to such additional standards regarding 

8 conflicts of interest, qualifications, and direct 

9 reporting of certain events such as fraud and 

10 other irregularities as the Secretary may pre11 scribe in regulations.’’. 

12 (b) CIVIL ENFORCEMENT.—Section 502(c)(2) of the 

13 Employee Retirement Income Security Act of 1974 (29 

14 U.S.C. 1132(c)(2)) is amended by adding at the end the 

15 following new sentence: ‘‘If the Secretary rejects an an16 nual report in whole or in part due to the failure to comply 

17 with a requirement of section 103 imposed on an account18 ant, actuary, or other person, the Secretary may assess 

19 all or part of the civil penalty against such person. The 

20 Secretary may require remediation in place of assessing 

21 all or part of a penalty.’’. 

22 (c) DEBARMENT FOR DEFICIENT AUDITS OR FOR

23 FAILING TO MEET QUALIFICATION STANDARDS.— 

24 (1) IN GENERAL.—Part 5 of subtitle B of title 

25 I of the Employee Retirement Income Security Act 


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1 of 1974 (29 U.S.C. 1131 et seq.) is amended by 

2 adding at the end the following: 

3 ‘‘SEC. 522. DEBARMENT FOR DEFICIENT AUDITS OR FOR 

4 FAILING TO MEET QUALIFICATION STAND5 ARDS. 

6 ‘‘(a) IN GENERAL.—If the Secretary finds, after no7 tice and opportunity for a hearing, that an accountant or 

8 accounting firm has engaged in any act or practice, or 

9 failed to act, in violation of section 103 relating to the 

10 preparation and issuance of audit reports, or with profes11 sional standards, the Secretary may issue an order to bar 

12 an accountant or accounting firm (or division or compo13 nent of such firm), on a temporary or permanent basis, 

14 from directly or indirectly engaging in specified activities 

15 relating to performing or supervising plan audits required 

16 under section 103. 

17 ‘‘(b) HEARINGS.—The subject of a debarment order 

18 may request a hearing and file an answer not later than 

19 30 days after the date of service of the notice of the debar20 ment order, in accordance with regulations prescribed by 

21 the Secretary. Failure to request a hearing within such 

22 30-day period shall constitute a waiver of the right to ap23 pear and contest the facts alleged in the debarment order 

24 and an admission of the facts alleged in the order for pur25 poses of any related proceedings under this part. Such 


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1 order shall then become a final agency action under sec2 tion 704 of title 5, United States Code. 

3 ‘‘(c) MODIFICATION OR TERMINATION OF ORDERS.— 

4 The Secretary may modify or terminate an order issued 

5 under this section, upon the request of the subject of the 

6 order and pursuant to procedures established by the Sec7 retary, if the Secretary determines that such modification 

8 or termination is in the interest of plan participants and 

9 beneficiaries. 

10 ‘‘(d) PUBLICITY OF ORDERS.—The Secretary shall 

11 make all final orders under this section (including modi12 fied orders) public and shall notify applicable State regu13 latory organizations upon the issuance of such final orders 

14 (including modified orders). 

15 ‘‘(e) JURISDICTION.—Lawsuits by the subject of an 

16 order to review the final order of the Secretary may be 

17 brought only in the district court of the United States for 

18 the district where the subject of the order has its principal 

19 office or in the United States District Court for the Dis20 trict of Columbia. 

21 ‘‘(f) REGULATIONS.—The Secretary may promulgate 

22 such regulations or other guidance as may be necessary 

23 or appropriate to carry out this section.’’. 

24 (2) CLERICAL AMENDMENT.—The table of sec25 tions for part 5 of subtitle B of title I of the EmVerDate Mar 15 2010 00:36 Feb 01, 2014 Jkt 039200 PO 00000 Frm 00144 Fmt 6652 Sfmt 6201 E:\BILLS\S1979.IS S1979

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1 ployee Retirement Income Security Act of 1974 is 

2 amended by adding at the end the following new 

3 item: 

‘‘522. Debarment for deficient audits or for failing to meet qualification standards.’’. 

4 (d) EXCEPTION.— 

5 (1) IN GENERAL.—Section 103(a)(3)(C) of the 

6 Employee Retirement Income Security Act of 1974 

7 (29 U.S.C. 1023(a)(3)(C)) is amended by striking 

8 ‘‘if such statements are certified by the bank, similar 

9 institution, or insurance carrier as accurate and are 

10 made part of the annual report.’’ and inserting ‘‘ex11 cept to the extent required under regulations pro12 mulgated by the Secretary.’’. 

13 (2) EFFECTIVE DATE.—The amendment made 

14 by paragraph (1) shall not become effective until the 

15 Secretary has promulgated final regulations with re16 spect to such amendment. 

17 SEC. 402. SPECIAL RULES RELATING TO TREATMENT OF 

18 QUALIFIED DOMESTIC RELATIONS ORDERS. 

19 (a) PRESERVATION OF ASSETS.— 

20 (1) AMENDMENTS TO ERISA.—Section 

21 206(d)(3) of the Employee Retirement Income Secu22 rity Act of 1974 (29 U.S.C. 1056(d)(3)) is amend23 ed— 


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1 (A) by redesignating subparagraph (N) as 

2 subparagraph (O); and 

3 (B) by inserting after subparagraph (M) 

4 the following: 

5 ‘‘(N) PRESERVATION OF ASSETS.— 

6 ‘‘(i) IN GENERAL.—If a spouse or 

7 former spouse of a participant— 

8 ‘‘(I) notifies a plan in writing 

9 that— 

10 ‘‘(aa) an action is pending 

11 pursuant to a State domestic re12 lations law (including a commu13 nity property law), and 

14 ‘‘(bb) all or a portion of the 

15 benefits payable with respect to 

16 the participant under the plan 

17 are a subject of such action, and 

18 ‘‘(II) includes with the notice evi19 dence of the pendency of the action, 

20 the plan administrator shall, during the 

21 segregation period, separately account for 

22 50 percent of such benefits. Any amounts 

23 so separately accounted for may not be dis24 tributed by the plan during the segregation 

25 period. 


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1 ‘‘(ii) SEGREGATION PERIOD.— 

2 ‘‘(I) IN GENERAL.—For purposes 

3 of clause (i), the term ‘segregation pe4 riod’ means the period— 

5 ‘‘(aa) beginning on the date 

6 of receipt by the plan of the no7 tice under clause (i), and 

8 ‘‘(bb) ending on the earlier 

9 of— 

10 ‘‘(AA) 90 days after the 

11 date of receipt of such no12 tice, or 

13 ‘‘(BB) the date of re14 ceipt of a domestic relations 

15 order with respect to the 

16 participant and the prospec17 tive alternate payee or the 

18 date on which the action is 

19 no longer pending. 

20 ‘‘(II) EXTENSION OF SEGREGA21 TION PERIOD.—The segregation pe22 riod shall be extended for 1 or more 

23 additional periods described in sub24 clause (I) upon notice by the spouse 

25 or former spouse that the action deVerDate Mar 15 2010 00:36 Feb 01, 2014 Jkt 039200 PO 00000 Frm 00147 Fmt 6652 Sfmt 6201 E:\BILLS\S1979.IS S1979

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1 scribed in clause (i)(I)(aa) is still 

2 pending as of the close of any prior 

3 segregation period.’’. 

4 (2) AMENDMENTS TO 1986 CODE.—Section 

5 414(p) of the Internal Revenue Code of 1986 is 

6 amended— 

7 (A) by redesignating paragraph (13) as 

8 paragraph (14); and 

9 (B) by inserting after paragraph (12) the 

10 following: 

11 ‘‘(13) PRESERVATION OF ASSETS.— 

12 ‘‘(A) IN GENERAL.—If a spouse or former 

13 spouse of a participant— 

14 ‘‘(i) notifies a plan in writing that— 

15 ‘‘(I) an action is pending pursu16 ant to a State domestic relations law 

17 (including a community property law), 

18 and 

19 ‘‘(II) all or a portion of the bene20 fits payable with respect to the partic21 ipant under the plan are a subject of 

22 such action, and 

23 ‘‘(ii) includes with the notice evidence 

24 of the pendency of the action, 


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1 the plan administrator shall, during the seg2 regation period, separately account for 50 per3 cent of such benefits. Any amounts so sepa4 rately accounted for may not be distributed by 

5 the plan during the segregation period.’’. 

6 ‘‘(B) SEGREGATION PERIOD.— 

7 ‘‘(i) IN GENERAL.—For purposes of 

8 subparagraph (A), the term ‘segregation 

9 period’ means the period— 

10 ‘‘(I) beginning on the date of re11 ceipt by the plan of the notice under 

12 clause (i), and 

13 ‘‘(II) ending on the earlier of— 

14 ‘‘(aa) 90 days after the date 

15 of receipt of such notice, or 

16 ‘‘(bb) the date of receipt of 

17 a domestic relations order with 

18 respect to the participant and the 

19 prospective alternate payee or the 

20 date on which the action is no 

21 longer pending. 

22 ‘‘(ii) EXTENSION OF SEGREGATION

23 PERIOD.—The segregation period shall be 

24 extended for 1 or more additional periods 

25 described in clause (i) upon notice by the 


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1 spouse or former spouse that the action de2 scribed in subparagraph (A)(i)(I) is still 

3 pending as of the close of any prior seg4 regation period.’’. 

5 (b) PENALTY FOR FAILURE TO PROVIDE INFORMA6 TION REGARDING ALTERNATE PAYEES.— 

7 (1) IN GENERAL.—Section 502(c), as amended 

8 by section 312, of the Employee Retirement Income 

9 Security Act of 1974 (29 U.S.C. 1132(c)) is amend10 ed— 

11 (A) by redesignating paragraphs (8), (9), 

12 (10), (11), and (12) as paragraphs (9), (10), 

13 (11), (12), and (13) respectively; and 

14 (B) by inserting after paragraph (7) the 

15 following: 

16 ‘‘(8) FAILURE TO PROVIDE INFORMATION RE17 GARDING ALTERNATE PAYEES.—The plan adminis18 trator shall provide information regarding the ben19 efit to prospective alternative payees under a domes20 tic relations order under section 206(d)(3) or any 

21 representative of a prospective alternative payee in 

22 connection with such an order. The Secretary may 

23 assess a civil penalty against any plan administrator 

24 of up to $100 a day from the date of the plan adVerDate Mar 15 2010 00:36 Feb 01, 2014 Jkt 039200 PO 00000 Frm 00150 Fmt 6652 Sfmt 6201 E:\BILLS\S1979.IS S1979

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1 ministrator’s failure or refusal to provide such infor2 mation.’’. 

3 (2) CONFORMING AMENDMENT.—Section 

4 502(a)(6) of such Act (29 U.S.C. 1132(a)(6)), as so 

5 amended, is amended by striking ‘‘or (11)’’ and in6 serting ‘‘(11), or (12)’’. 

7 (c) EFFECTIVE DATE.—The amendments made by 

8 this section shall apply to plan years beginning after De9 cember 31, 2014. 

10 SEC. 403. CORRECTION TO BONDING REQUIREMENT. 

11 Section 412(a)(3)(D) of the Employee Retirement In12 come Security Act of 1974 (29 U.S.C. 1112(a)(3)(D)) is 

13 amended by striking ‘‘Paragraph (2)’’ and inserting ‘‘This 

14 paragraph’’. 

15 SEC. 404. RETALIATION PROTECTIONS. 

16 Section 510 of the Employee Retirement Income Se17 curity Act of 1974 (29 U.S.C. 1140) is amended by insert18 ing ‘‘, has filed or made any oral or written complaint (in19 cluding to a fiduciary, an employer, or the Secretary),’’ 

20 after ‘‘given information’’. 

Æ 


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