I

103D CONGRESS

1ST SESSION H. R. 3481

To provide participants in private pension plans which were terminated before

September 1, 1974, the nonforfeitable pension benefits which were lost

by reason of the termination, and for other purposes.

IN THE HOUSE OF REPRESENTATIVES

NOVEMBER 9, 1993

Mr. ROEMER (for himself, Mr. SAWYER, and Mr. OBERSTAR) introduced the

following bill; which was referred to the Committee on Education and Labor

A BILL

To provide participants in private pension plans which were

terminated before September 1, 1974, the nonforfeitable

pension benefits which were lost by reason of the termination, 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.

4 This Act may be cited as the ‘‘Pension Restoration

5 Act of 1993’’.

6 SEC. 2. DEFINITIONS.

7 For purposes of this Act—
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1 (1) STATE; UNITED STATES.—The terms

2 ‘‘State’’ and ‘‘United States’’ have the meanings set

3 forth in paragraph (10) of section 3 of the Employee

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

5 1002).

6 (2) EMPLOYER; PARTICIPANT; BENEFICIARY;

7 NONFORFEITABLE; DEFINED BENEFIT PLAN.—The

8 terms ‘‘employer’’, ‘‘participant’’, ‘‘beneficiary’’,

9 ‘‘nonforfeitable’’, and ‘‘defined benefit plan’’ have

10 the meanings set forth in paragraphs (5), (7), (8),

11 (19), and (35), respectively, of section 3 of the Em12 ployee Retirement Income Security Act of 1974 (29

13 U.S.C. 1002).

14 (3) EARLY TERMINATED PLAN.—The term

15 ‘‘early terminated plan’’ means a defined benefit

16 plan—

17 (A) which is described in subsection (a) of

18 section 4 of the Employee Retirement Income

19 Security Act of 1974 (29 U.S.C. 1003) and is

20 not described in subsection (b) of that section,

21 and

22 (B) the termination date of which (as de23 termined by the Corporation) was before

24 September 1, 1974.
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1 (4) QUALIFIED PARTICIPANT.—The term

2 ‘‘qualified participant’’ means an individual who—

3 (A) was a participant in an early termi4 nated plan maintained by an employer of such

5 individual, and

6 (B) as of immediately before the termi7 nation of the plan had a nonforfeitable right to

8 benefits under the plan.

9 (5) QUALIFIED SPOUSE.—The term ‘‘qualified

10 spouse’’ means an individual who is the widow (with11 in the meaning of section 216(c) of the Social Secu12 rity Act (42 U.S.C. 416(c)) or the widower (within

13 the meaning of section 216(g) of such Act (42

14 U.S.C. 416(g)) of a qualified participant.

15 (6) CORPORATION.—The term ‘‘Corporation’’

16 means the Pension Benefit Guaranty Corporation.

17 SEC. 3. ENTITLEMENT TO ANNUITY.

18 (a) ENTITLEMENT OF QUALIFIED PARTICIPANT.—

19 (1) IN GENERAL.—A qualified participant is en20 titled, upon approval by the Corporation under this

21 Act of an application therefor, to an annuity payable

22 by the Corporation and computed under section

23 4(a).
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1 (2) COMMENCEMENT.—The annuity of a quali2 fied participant commences on the day after the

3 later of—

4 (A) the effective date set forth in section

5 12, or

6 (B) the date on which the qualified partici7 pant attains 65 years of age.

8 (3) TERMINATION.—The annuity of a qualified

9 participant and the right thereto terminate at the

10 end of the last calendar month preceding the date of

11 the qualified participant’s death.

12 (b) ENTITLEMENT OF QUALIFIED SPOUSE.—

13 (1) IN GENERAL.—A qualified spouse is enti14 tled, upon approval by the Corporation under this

15 Act of an application therefor, to an annuity payable

16 by the Corporation and computed under section

17 4(b).

18 (2) COMMENCEMENT.—The annuity of a quali19 fied spouse of a qualified participant commences on

20 the latest of—

21 (A) the effective date set forth in section

22 12,

23 (B) the first day of the month in which the

24 qualified participant dies, or
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1 (C) if the qualified participant dies before

2 attaining 65 years of age, the first day of the

3 month in which the qualified participant would

4 have attained such age but for the qualified

5 participant’s death.

6 (3) TERMINATION.—The annuity of a qualified

7 spouse and the right thereto terminate at the end of

8 the last calendar month preceding the date of the

9 qualified spouse’s death.

10 SEC. 4. COMPUTATION OF ANNUITY.

11 (a) QUALIFIED PARTICIPANT’S ANNUITY.—The an12 nuity computed under this subsection (relating to a quali13 fied participant) in connection with any early terminated

14 plan is equal to the excess (if any) of—

15 (1) the product derived by multiplying $75 by

16 the number of years of service of the qualified par17 ticipant under the plan, over

18 (2) the annual amount which would be nec19 essary to amortize in level amounts over 10 years

20 the sum of—

21 (A) any lump sums paid to the qualified

22 participant from the plan in connection with the

23 termination, and

24 (B) the actuarial present value (deter25 mined, as of the effective date set forth in sec-
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1 tion 12, under the assumptions used by the

2 Corporation for purposes of section 4044 of the

3 Employee Retirement Income Security Act of

4 1974 (29 U.S.C. 1344)) of pension benefits

5 under the plan (if any) to which the qualified

6 participant retains a nonforfeitable right under

7 the plan.

8 (b) QUALIFIED SPOUSE’S ANNUITY.—The annuity

9 computed under this subsection (relating to the qualified

10 spouse of a qualified participant) in connection with an

11 early terminated plan is equal to the excess (if any) of—

12 (1) 50 percent of the amount determined under

13 paragraph (1) of subsection (a) in connection with

14 such qualified participant, over

15 (2) the annual amount which would be nec16 essary to amortize in level amounts over 10 years

17 the sum of—

18 (A) any lump sums paid to the qualified

19 spouse from the plan in connection with the ter20 mination, and

21 (B) the actuarial present value (deter22 mined, as of the effective date set forth in sec23 tion 12, under the assumptions used by the

24 Corporation for purposes of section 4044 of the

25 Employee Retirement Income Security Act of
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1 1974 (29 U.S.C. 1344)) of pension benefits

2 under the plan (if any) to which the qualified

3 spouse retains a nonforfeitable right under the

4 plan.

5 SEC. 5. APPLICATIONS.

6 (a) REQUIREMENTS.—An application for an annuity

7 under this Act in connection with an early terminated plan

8 shall be approved if—

9 (1) the application includes evidence sufficient

10 to establish that the applicant is a qualified partici11 pant or qualified spouse in connection with such

12 plan, or

13 (2) the evidence included in the application, to14 gether with such evidence as the applicant may re15 quest the Corporation to consider pursuant to sub16 section (c), establishes that the applicant is a quali17 fied participant or a qualified spouse in connection

18 with such plan.

19 (b) APPLICATION FORMS.—The Corporation may by

20 regulation prescribe application forms which may be used

21 by applicants for purposes of subsection (a). Any such

22 forms prescribed by the Corporation shall be made avail23 able to the public by the Corporation.

24 (c) SPECIFIC MATTERS.—In considering applications

25 for annuities under this Act, the Corporation shall con-
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1 sider, on the request of an applicant or the applicant’s

2 representative, in addition to any other relevant evi3 dence—

4 (1) a comparison of employment and payroll

5 records which were maintained under chapter 21 of

6 the Internal Revenue Code of 1986 (relating to Fed7 eral Insurance Contributions Act) or under title II

8 of the Social Security Act (42 U.S.C. 401 et seq.)

9 with records maintained by the Internal Revenue

10 Service relating to the qualification status of trusts

11 forming part of a stock bonus, pension, or profit12 sharing plan under part I of subchapter D of chap13 ter 1 of the Internal Revenue Code of 1986 (relating

14 to pension, profit sharing, stock bonus plans, etc.),

15 and

16 (2) records maintained under the Welfare and

17 Pension Plans Disclosure Act of 1958.

18 (d) PROCEDURES FOR INITIAL DETERMINATIONS.—

19 (1) IN GENERAL.—Except as otherwise pro20 vided in this subsection, in making initial determina21 tions regarding applications for annuities under this

22 Act, the Corporation shall follow the procedures pre23 scribed by the Corporation for—

24 (A) initial determinations of benefit entitle25 ment of participants and beneficiaries under
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1 plans to which section 4021 of the Employee

2 Retirement Income Security Act of 1974 (29

3 U.S.C. 1321) applies, and

4 (B) determinations of the amount of guar5 anteed benefits of such participants and bene6 ficiaries under title IV of such Act (29 U.S.C.

7 1301 et seq.).

8 (2) NOTICES OF DENIAL.—The Corporation

9 shall send any individual whose application under

10 this Act is denied by the Corporation pursuant to an

11 initial determination a written notice of the denial.

12 Such notice shall include the reason for the denial

13 and shall set forth the procedures required to be fol14 lowed in order to obtain review under this Act.

15 SEC. 6. ADMINISTRATIVE APPEALS.

16 (a) IN GENERAL.—Any individual whose application

17 for an annuity under this Act is denied pursuant to an

18 initial determination by the Corporation is entitled to—

19 (1) a reasonable time, but not less than 60 days

20 after receipt of the written notice of denial described

21 in section 5(d)(2), to request a review by the Cor22 poration and to furnish affidavits and other docu23 mentary evidence in support of the request, and

24 (2) a written decision and the specific reasons

25 therefor at the earliest practicable date.
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1 (b) PROCEDURES.—Except as otherwise provided in

2 subsection (a), in reviewing initial determinations regard3 ing applications for annuities under this Act, the Corpora4 tion shall follow the procedures prescribed by the Corpora5 tion for requesting and obtaining administrative review by

6 the Corporation of determinations described in subpara7 graphs (A) and (B) of section 5(d)(1).

8 SEC. 7. JUDICIAL REVIEW.

9 (a) IN GENERAL.—Any individual, after any final de10 cision made under section 6, irrespective of the amount

11 in controversy, may obtain judicial review of the decision

12 by a civil action commenced under this section within 180

13 days after the mailing to the individual of notice of such

14 decision or within such further time as the Corporation

15 may allow.

16 (b) VENUE.—Any action commenced under this sec17 tion shall be brought in the district court of the United

18 States for the judicial district in which the plaintiff resides

19 or in the United States District Court for the District of

20 Columbia.

21 (c) RECORD.—As part of any answer by the Corpora22 tion, the Corporation shall file a certified copy of the tran23 script of the record, including the evidence upon which the

24 findings and decision complained of are based.
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1 (d) JUDGMENT.—The court shall enter, upon the

2 pleadings and transcript of the record a judgment affirm3 ing, modifying, or reversing the decision, with or without

4 remanding the case for a rehearing.

5 (e) REMANDED CASES.—

6 (1) AUTHORITY TO REMAND TO THE CORPORA7 TION.—The court shall, on the motion of the Cor8 poration made before the Corporation files its an9 swer, remand the case to the Corporation for further

10 action by the Corporation. The court may, at any

11 time, on good cause shown, order additional evidence

12 to be taken before the Corporation.

13 (2) RECONSIDERATION ON REMAND.—The Cor14 poration shall, after the case is remanded, and after

15 hearing such additional evidence if so ordered—

16 (A) modify or affirm the earlier findings of

17 fact or decision, or both, under section 6, and

18 (B) file with the court any such additional

19 and modified findings of fact and decision, and

20 a transcript of the additional record and testi21 mony upon which the Corporation’s action in

22 modifying or affirming was based.

23 (f) FINAL JUDGMENT.—The judgment of the court

24 shall be final except that it shall be subject to review in

25 the same manner as a judgment in other civil actions.
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1 SEC. 8. PAYMENT OF ANNUITIES.

2 (a) FORMS OF PAYMENT.—

3 (1) YEARLY PAYMENTS.—Each annuity payable

4 under this Act shall be payable as an annual

5 amount.

6 (2) RETROACTIVE LUMP-SUM PAYMENTS.—Any

7 individual whose claim for an annuity under this Act

8 is approved after the date on which the annuity com9 mences under subsection (a)(2) or (b)(2) of section

10 3 shall be paid the total amount of the annuity pay11 ments for periods before the date on which the claim

12 is approved in the form of a lump-sum payment.

13 (b) CASES OF INCOMPETENCY.—Payment due an in14 dividual mentally incompetent or under other legal disabil15 ity may be made to the person who is constituted guardian

16 or other fiduciary by the law of the State of residence of

17 the claimant or is otherwise legally vested with the care

18 of the claimant or the claimant’s estate. If a guardian or

19 other fiduciary of the individual under legal disability has

20 not been appointed under the law of the State of residence

21 of the claimant, payment may be made to any person who

22 is responsible for the care of the claimant, and the pay23 ment bars recovery by any other person.

24 (c) DIVORCES, ETC.—

25 (1) ALTERNATIVE PAYEES.—Payments under

26 this Act which would otherwise be made to a person
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1 under this Act shall be made (in whole or in part)

2 to another person if and to the extent expressly pro3 vided for in the terms of any court decree of divorce,

4 annulment, or legal separation, or the terms of any

5 court order or court-approved property settlement

6 agreement incident to any court decree of divorce,

7 annulment, or legal separation. Any payment under

8 this paragraph to a person bars recovery by any

9 other person.

10 (2) NOTIFICATION REQUIREMENTS.—Para11 graph (1) shall only apply to payments made by the

12 Corporation under this Act after the date of receipt

13 by the Corporation of written notification of such de14 cree, order, or agreement, and such additional infor15 mation and documentation as the Corporation may

16 prescribe.

17 (3) COURT.—As used in this subsection, the

18 term ‘‘court’’ means any court of any State.

19 (d) INALIENABILITY.—Amounts payable under this

20 Act are not assignable, either in law or equity, or subject

21 to execution, levy, attachment, garnishment, or other legal

22 process, except as otherwise may be provided by Federal

23 law.

24 (e) FORGIVENESS.—Recovery of payments under this

25 Act may not be made from an individual in any case in
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1 which the Corporation determines that the individual is

2 without fault and recovery would be against equity and

3 good conscience.

4 SEC. 9. INTERAGENCY COORDINATION AND COOPERATION.

5 (a) IN GENERAL.—The Corporation may make such

6 arrangements or agreements with other departments,

7 agencies, or establishments of the United States for co8 operation or mutual assistance in the performance of their

9 respective functions under this Act as are necessary and

10 appropriate to avoid unnecessary expense and duplication

11 of functions.

12 (b) USE OF FACILITIES.—The Corporation may use,

13 as appropriate, on a reimbursable or other basis, the facili14 ties or services of any department, agency, or establish15 ment of the United States or of any State or political sub16 division thereof, including the services of any of its em17 ployees, with the lawful consent of such department, agen18 cy, or establishment.

19 (c) COOPERATION.—

20 (1) IN GENERAL.—Each department, agency, or

21 establishment of the United States shall cooperate

22 with the Corporation and, to the extent necessary

23 and appropriate, provide such information and facili24 ties as the Corporation may request for its assist-
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1 ance in the performance of the Corporation’s func2 tions under this Act.

3 (2) AVAILABILITY OF RECORDS FROM THE SEC4 RETARY OF HEALTH AND HUMAN SERVICES.—The

5 Secretary of Health and Human Services shall pro6 vide the Corporation with such records, determined

7 by the Corporation to be necessary to carry out the

8 purposes of this Act, as the Corporation may re9 quest.

10 (3) AVAILABILITY OF CONFIDENTIAL TAX RE11 TURNS AND RETURN INFORMATION.—Section

12 6103(l) of the Internal Revenue Code of 1986 (relat13 ing to use of returns and return information for pur14 poses other than tax administration) is amended by

15 adding at the end of paragraph (2) the following

16 new sentence: ‘‘Returns and return information shall

17 be open to inspection by or disclosure to officers and

18 employees of the Corporation whose official duties

19 require such inspection or disclosure for the purpose

20 of, but only to the extent necessary in, considering

21 such returns and return information pursuant to

22 section 5(c)(1) of the Pension Restoration Act of

23 1993, except that such inspection or disclosure shall

24 be permitted only upon written request which sets

25 forth the specific reason or reasons why such inspec-
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1 tion or disclosure is necessary and which is signed

2 by the head of the bureau or office of the Corpora3 tion requesting the inspection or disclosure.’’.

4 SEC. 10. REGULATIONS.

5 The Corporation shall, before the effective date set

6 forth in section 12, prescribe the initial regulations nec7 essary to carry out the provisions of this Act. Regulations

8 under this Act shall be prescribed by the Corporation in

9 consultation, as appropriate, with the Secretary of the

10 Treasury and the Secretary of Health and Human

11 Services.

12 SEC. 11. PROGRAM FUNDING.

13 (a) PAYMENT.—The Corporation shall use moneys

14 from the appropriate revolving funds established under

15 section 4005 of the Employee Retirement Income Security

16 Act of 1974 (29 U.S.C. 1305) to carry out its functions

17 under this Act.

18 (b) TRANSFERS FROM TRUST FUNDS.—The Cor19 poration shall transfer to the revolving funds described in

20 subsection (a) from the trust funds consisting of assets

21 of terminated plans and employer liability payments

22 amounts equal to the amounts needed to carry out its

23 functions under this Act.
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1 SEC. 12. EFFECTIVE DATE.

2 (a) GENERAL RULE.—Except as provided in sub3 section (b), the provisions of this Act shall take effect 60

4 days after the date of the enactment of this Act.

5 (b) SPECIAL RULE.—The provisions of sections 10

6 and 11 shall take effect on the date of the enactment of

7 this Act.

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