I 

113TH CONGRESS 

2D SESSION H. R. 5828 

To provide for USA Retirement Funds, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

DECEMBER 10, 2014 

Mr. CARTWRIGHT (for himself and Mr. ELLISON) introduced the following bill; 

which was referred to the Committee on Education and the Workforce, 

and in addition to the Committee on Ways and Means, for a period to 

be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee 

concerned 

A BILL 

To provide for USA Retirement Funds, 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 ‘‘USA Retirement 

5 Funds Act’’. 

6 SEC. 2. AUTOMATIC USA RETIREMENT FUND ARRANGE7 MENTS. 

8 (a) REQUIREMENT TO PROVIDE ACCESS.—Each cov9 ered employer shall make available to each qualifying emVerDate Sep 11 2014 04:55 Dec 18, 2014 Jkt 049200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H5828.IH H5828

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1 ployee for the calendar year an automatic USA Retire2 ment Fund arrangement. 

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

4 title— 

5 (1) IN GENERAL.—Except as otherwise pro6 vided in this subsection and subsection (c)(2), the 

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

8 calendar year, an employer who does not maintain a 

9 qualifying plan or arrangement for any part of such 

10 year. 

11 (2) QUALIFYING PLAN OR ARRANGEMENT.— 

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

13 plan or arrangement’’ means a plan or arrange14 ment described in section 219(g)(5) of the In15 ternal Revenue Code of 1986. 

16 (B) EXCEPTIONS.—Such term shall not in17 clude the following: 

18 (i) FROZEN DEFINED BENEFIT

19 PLAN.—A defined benefit plan that had no 

20 ongoing accruals as of the first day of the 

21 preceding calendar year, unless the plan 

22 failed to have accruals only because of the 

23 application of section 206 of the Employee 

24 Retirement Income Security Act (29 


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1 U.S.C. 1056) and section 436 of the Inter2 nal Revenue Code of 1986. 

3 (ii) DEFINED CONTRIBUTION PLAN

4 WITHOUT LIFETIME INCOME OPTIONS.—A 

5 defined contribution plan that does not 

6 provide participants with a distribution op7 tion that provides lifetime income. 

8 (iii) PLANS NOT MEETING CONTRIBU9 TION REQUIREMENTS.—A plan— 

10 (I) which consists of a cash or 

11 deferred arrangement (as defined in 

12 section 401(k) of such Code) with re13 spect to which the employer does not 

14 automatically enroll all eligible em15 ployees at contribution rates at or 

16 above those specified in subsection 

17 (d)(4); or 

18 (II) for which the only contribu19 tions are nonelective employer con20 tributions and with respect to which 

21 the employer’s annual contribution 

22 rate is not at or above the rates speci23 fied in subsection (d)(4). 

24 (3) EXCEPTION FOR CERTAIN SMALL AND NEW

25 EMPLOYERS.— 


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1 (A) IN GENERAL.—The term ‘‘covered em2 ployer’’ shall not include an employer for a cal3 endar year if the employer— 

4 (i) did not employ during the pre5 ceding calendar year more than 10 employ6 ees who each received at least $5,000 of 

7 compensation (as defined in section 

8 3401(a) of the Internal Revenue Code of 

9 1986) from the employer for such pre10 ceding calendar year; 

11 (ii) did not normally employ more 

12 than 10 employees on a typical business 

13 day during the preceding calendar year; or 

14 (iii) was not in existence at all times 

15 during the calendar year and the preceding 

16 calendar year. 

17 (B) OPERATING RULES.—In determining 

18 the number of employees for purposes of sub19 paragraph (A)— 

20 (i) rules consistent with any rules ap21 plicable in determining the number of em22 ployees for purposes of section 

23 408(p)(2)(C) and section 4980B(d) of the 

24 Internal Revenue Code of 1986 shall apply; 


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1 (ii) all members of the same family 

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

3 of the Internal Revenue Code of 1986) 

4 shall be treated as 1 individual; and 

5 (iii) any reference to an employer 

6 shall include a reference to any predecessor 

7 employer. 

8 (4) EXCEPTION FOR GOVERNMENTS AND

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

10 include— 

11 (A) a government or entity described in 

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

13 1986; or 

14 (B) a church or a convention or association 

15 of churches that is exempt from tax under sec16 tion 501 of such Code. 

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

18 a single employer under subsection (a) or (b) of sec19 tion 52 of the Internal Revenue Code of 1986 or 

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

21 shall be treated as a single employer. 

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

23 title— 


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1 (1) IN GENERAL.—The term ‘‘qualifying em2 ployee’’ means any employee who is not an excluded 

3 employee. 

4 (2) PLAN SPONSOR’S EMPLOYEES.—If— 

5 (A) an employer maintains one or more 

6 qualifying plans or arrangements described in 

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

8 of 1986; and 

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

10 or other business unit are generally not eligible 

11 to participate in any such qualifying plan or ar12 rangement, 

13 for purposes of this section, the employer shall be 

14 treated as a covered employer with respect to such 

15 employees (other than excluded employees), and 

16 such employees (other than excluded employees) 

17 shall be treated as qualifying employees for the cal18 endar year. 

19 (3) EXCLUDED EMPLOYEES.— 

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

21 employee’’ means an employee who is an exclud22 able employee and who is in a class or category 

23 that the employer excludes from treatment as 

24 qualifying employees. 


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1 (B) EXCLUDABLE EMPLOYEE.—The term 

2 ‘‘excludable employee’’ means— 

3 (i) an employee described in section 

4 410(b)(3) of the Internal Revenue Code of 

5 1986; 

6 (ii) an employee who has not attained 

7 the age of 21 before the beginning of the 

8 calendar year; 

9 (iii) an employee who has not com10 pleted at least 3 months of service with the 

11 employer; 

12 (iv) in the case of an employer that 

13 maintains a qualifying plan or arrange14 ment which excludes employees who have 

15 not satisfied the minimum age and service 

16 requirements for participation in the plan, 

17 an employee who has not satisfied such re18 quirements; 

19 (v) in the case of an employer that 

20 maintains an annuity contract (including a 

21 custodial account or retirement income ac22 count) under section 403(b) of the Internal 

23 Revenue Code of 1986, an employee who is 

24 permitted to be excluded from any salary 

25 reduction arrangement under the contract 


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1 pursuant to paragraph (12) of such section 

2 403(b); 

3 (vi) in the case of an employer that 

4 maintains an arrangement described in 

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

6 who is not required to be eligible to partici7 pate in the arrangement under paragraph 

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

9 (vii) in the case of an employer that 

10 maintains a simplified employee pension 

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

12 an employee who is permitted to be ex13 cluded from participation under paragraph 

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

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

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

17 regulations or other guidance to carry out this sub18 section, including— 

19 (A) guidelines for determining the classes 

20 or categories of employees to be covered by a 

21 USA Retirement Fund; 

22 (B) guidelines requiring employers to 

23 specify the classification or categories of em24 ployees (if any) who are excluded from the USA 

25 Retirement Fund; and 


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1 (C) rules to prevent avoidance of the re2 quirements of this section. 

3 (d) AUTOMATIC USA RETIREMENT FUND ARRANGE4 MENT.—For purposes of this title— 

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

6 Retirement Fund arrangement’’ means an arrange7 ment of an employer (determined without regard to 

8 whether the employer is required to maintain the ar9 rangement)— 

10 (A) that covers each qualifying employee of 

11 the covered employer for the calendar year; 

12 (B) under which a qualifying employee— 

13 (i) may elect— 

14 (I) to contribute to an automatic 

15 USA Retirement Fund by having the 

16 employer deposit payroll deduction 

17 amounts or make other periodic direct 

18 deposits (including electronic pay19 ments) to the Fund; or 

20 (II) to have such payments paid 

21 to the employee directly in cash; 

22 (ii) is treated as having made the elec23 tion under clause (i)(I) in the amount 

24 specified in paragraph (4) unless the indi25 vidual specifically elects not to have such 


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1 contributions made (or specifically elects to 

2 have such contributions made at a dif3 ferent percentage or in a different 

4 amount); and 

5 (iii) not more than once per calendar 

6 year, may elect to modify the selection of 

7 the USA Retirement Fund to which con8 tributions are made for such year; and 

9 (C) that meets the administrative require10 ments of paragraph (3), including the notice re11 quirement of paragraph (3)(C). 

12 (2) AUTOMATIC RE-ENROLLMENT.—An employ13 ee’s election not to contribute to a USA Retirement 

14 Fund (or to have such contributions made at a dif15 ferent percentage or in a different amount from 

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

17 2 years. After such 2-year period and absent a new 

18 election, the employee shall be treated as having 

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

20 the amount specified in paragraph (4). 

21 (3) ADMINISTRATIVE REQUIREMENTS.— 

22 (A) PAYMENTS.—An employer shall make 

23 the payments elected or treated as elected 

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


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1 (i) the last day of the month following 

2 the month in which the compensation oth3 erwise would have been payable to the em4 ployee in cash; or 

5 (ii) such later date as the Secretary 

6 may prescribe. 

7 (B) TERMINATION OF EMPLOYEE PARTICI8 PATION.—Subject to a requirement for reason9 able notice, an employee may elect to terminate 

10 participation in the arrangement at any time 

11 during a calendar year. The arrangement may 

12 provide that, if an employee so terminates par13 ticipation, the employee may not elect to re14 sume participation until the beginning of the 

15 next calendar year. 

16 (C) NOTICE OF ELECTION PERIOD.—The 

17 employer shall notify each employee eligible to 

18 participate for a year in a USA Retirement 

19 Fund arrangement, within a reasonable period 

20 of time before the 30th day before the begin21 ning of such year (and, for the first year the 

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

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


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1 (i) the payments that may be elected 

2 or treated as elected under paragraph 

3 (1)(B); 

4 (ii) the opportunity to make the elec5 tion to terminate participation in the ar6 rangement under subparagraph (B); 

7 (iii) the opportunity to make the elec8 tion under paragraph (1)(B)(ii) to have 

9 contributions or purchases made at a dif10 ferent percentage or in a different amount; 

11 and 

12 (iv) the opportunity under paragraph 

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

14 such amounts are invested for such year. 

15 (D) EMPLOYEES MAY CHOOSE USA RE16 TIREMENT FUND.—The arrangement shall pro17 vide that a qualified employee may elect to have 

18 contributions made to any USA Retirement 

19 Fund available to the employee. 

20 (4) AMOUNT OF CONTRIBUTIONS AND PAY21 MENTS.—The amount specified in this paragraph 

22 is— 

23 (A) 3 percent of compensation for the cal24 endar year beginning on January 1, 2015; 


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1 (B) 4 percent of compensation for the cal2 endar year beginning on January 1, 2016; 

3 (C) 5 percent of compensation for the cal4 endar year beginning on January 1, 2017; and 

5 (D) 6 percent of compensation for calendar 

6 years beginning after December 31, 2017. 

7 (5) COORDINATION WITH WITHHOLDING.—The 

8 Secretary of the Treasury shall modify the with9 holding exemption certificate under section 3402(f) 

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

11 case of any qualifying employee covered by a USA 

12 Retirement Fund arrangement, any notice and elec13 tion requirements with respect to the arrangement 

14 may be met through the use of an attachment to 

15 such certificate or other modifications of the with16 holding exemption procedures. 

17 (e) DEPOSITS TO USA RETIREMENT FUNDS.— 

18 (1) IN GENERAL.—Except as provided in para19 graph (2), an employer shall make all contributions 

20 on behalf of employees to the USA Retirement Fund 

21 specified by the employee. 

22 (2) USA RETIREMENT FUNDS OTHER THAN

23 THOSE SELECTED BY EMPLOYEE.—In the absence of 

24 an affirmative selection of a USA Retirement Fund 

25 by the employee, contributions on behalf of the emVerDate Sep 11 2014 04:55 Dec 18, 2014 Jkt 049200 PO 00000 Frm 00013 Fmt 6652 Sfmt 6201 E:\BILLS\H5828.IH H5828

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1 ployee shall be made to the USA Retirement Fund 

2 designated by the employer. 

3 (3) REGULATIONS.—The Secretary may issue 

4 such regulations as are necessary to carry out this 

5 subsection. 

6 (f) PREEMPTION OF CONFLICTING STATE LAWS.— 

7 The requirements under this section preempt any law of 

8 a State that directly or indirectly prohibits or restricts the 

9 establishment or operation of an automatic USA Retire10 ment Fund arrangement. Nothing in this section shall be 

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

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

13 payroll deposit payments under any such automatic USA 

14 Retirement Fund arrangement within the period required. 

15 SEC. 3. ESTABLISHMENT OF USA RETIREMENT FUNDS. 

16 (a) QUALIFICATION AS A USA RETIREMENT

17 FUND.—For purposes of this title— 

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

19 Fund’’ means a fund for which the Secretary has de20 termined the requirements under this title are met. 

21 (2) REQUEST FOR DETERMINATION.—The 

22 board of trustees of a program established for pur23 poses of being treated as a USA Retirement Fund 

24 under this section shall, prior to beginning oper25 ations, submit to the Secretary (at such time and in 


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1 such manner as the Secretary may prescribe) a re2 quest for the Secretary to make a determination as 

3 to whether the plan meets the requirements of this 

4 title for such treatment. Such request shall include 

5 copies of the written documents establishing the plan 

6 and such other materials as the Secretary may re7 quest. The Secretary shall make such determination 

8 within 180 days of receiving such request. 

9 (3) PERIODIC REVIEW.—The Secretary shall es10 tablish a process to periodically review each plan de11 termined to be a USA Retirement Fund under para12 graph (1) to ensure that the plan continues to meet 

13 the requirements of this title. 

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

15 shall maintain a public list of plans determined by 

16 the Secretary to qualify as USA Retirement Funds. 

17 Such list shall be posted to a publicly available 

18 Internet website. 

19 (b) PARTICIPATION.— 

20 (1) ELIGIBILITY.—An individual may partici21 pate in any USA Retirement Fund for which such 

22 individual meets the eligibility requirements, individ23 ually or through an arrangement established by an 

24 employer. 


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1 (2) PARTICIPATION IN OTHER PLANS.—An indi2 vidual who participates in a USA Retirement Fund 

3 shall not be precluded from participating in a plan 

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

5 Internal Revenue Code of 1986. 

6 (c) GOVERNANCE.— 

7 (1) ASSETS HELD IN TRUST; BOARD OF TRUST8 EES.—For purposes of this title— 

9 (A) the assets of each USA Retirement 

10 Fund shall be held in trust, and 

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

12 of trustees which shall consist of at least 3 indi13 viduals who— 

14 (i) are independent of service pro15 viders to the Fund; 

16 (ii) meet the qualification require17 ments established under this section; and 

18 (iii) are collectively able to adequately 

19 represent the interests of active partici20 pants, retirees, and contributing employ21 ers. 

22 (2) INDEPENDENCE REQUIREMENT.—An indi23 vidual is not independent of Fund service providers 

24 for purposes of paragraph (1)(B)(i) if such indi25 vidual— 


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1 (A) is an employee of any Fund service 

2 provider; 

3 (B) is a current or former officer or direc4 tor of a significant Fund service provider, or is 

5 otherwise affiliated with such a provider; 

6 (C) is a member of the immediate family 

7 of any person who is affiliated with a signifi8 cant Fund service provider; 

9 (D) derives more than 1 percent of the in10 dividual’s annual income from a significant 

11 Fund service provider; 

12 (E) derives more than 5 percent of the in13 dividual’s annual income from any Fund service 

14 provider; or 

15 (F) fails to meet meets such other criteria 

16 as are specified by the Secretary to ensure the 

17 independence of the board of directors. 

18 (3) MULTIPLE TRUSTEESHIPS.—No individual 

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

20 USA Retirement Fund unless the Secretary receives 

21 attestation from the board of trustees of each appli22 cable USA Retirement Fund and the individual that, 

23 at the time of appointment, there is no reasonably 

24 foreseeable conflict between the duties of such indi25 vidual to the participants in each applicable USA 


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1 Retirement Fund. In no case may an individual 

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

3 Retirement Funds. 

4 (4) TRUSTEE QUALIFICATIONS.—Each trustee 

5 of a USA Retirement Fund shall attest that the 

6 trustee is knowledgeable of the trustee’s duties and 

7 responsibilities as a fiduciary of a USA Retirement 

8 Fund. The Secretary may require by regulation such 

9 other qualifications and documentation as may be 

10 necessary to ensure that trustees are suitable and 

11 qualified. Such requirements may include those re12 lated to education, training, and minimum com13 petency standards. 

14 (5) TRUSTEE SELECTION AND REMOVAL.— 

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

16 of a USA Retirement Fund shall establish writ17 ten procedures regarding the appointment, re18 moval, and replacement of trustees on the 

19 board. Such procedures shall— 

20 (i) take effect after adoption by the 

21 majority of the board of trustees; 

22 (ii) be readily available to partici23 pants; 

24 (iii) provide participants with a rea25 sonable opportunity to comment on, or 


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1 participate in, the trustee selection process; 

2 and 

3 (iv) provide for periodic election of 

4 trustees. 

5 (B) REMOVAL BY THE SECRETARY.—The 

6 Secretary may require removal or suspension of 

7 a trustee if the conduct of the trustee is fraudu8 lent or is causing, or can be reasonably ex9 pected to cause, significant, imminent, and ir10 reparable harm to the participants or bene11 ficiaries of a USA Retirement Fund. 

12 (C) FUNDS WITHOUT QUALIFIED TRUST13 EES.—If a board of trustees of a USA Retire14 ment Fund has no members meeting the cri15 teria under this subsection, the Secretary shall 

16 appoint replacement trustees. 

17 (6) TRUSTEE COMPENSATION.—Trustees of the 

18 Fund may be compensated at reasonable rates from 

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

20 accordance with the written board compensation pol21 icy adopted under paragraph (7)(A)(iv). 

22 (7) TRANSPARENCY AND PARTICIPANT DEMOC23 RACY.— 

24 (A) PUBLICLY AVAILABLE POLICIES.—The 

25 board of trustees of a USA Retirement Fund 


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1 shall adopt and make available to participants 

2 and beneficiaries of, and employers contributing 

3 to, the USA Retirement Fund— 

4 (i) a written investment policy state5 ment; 

6 (ii) a written lifetime income policy 

7 statement; 

8 (iii) an annual performance assess9 ment of the board of trustees, including an 

10 evaluation of weaknesses of the board and 

11 a plan to address such weaknesses; 

12 (iv) a written board compensation pol13 icy that includes current compensation lev14 els and provides a reasonable opportunity 

15 for comment from participants, bene16 ficiaries, and employers; and 

17 (v) a written policy addressing con18 flicts of interests with respect to trustees. 

19 (B) PARTICIPANT INPUT REGARDING

20 BOARD OF TRUSTEES.— 

21 (i) IN GENERAL.—The board of trust22 ees of a USA Retirement Fund shall estab23 lish procedures whereby a participant or 

24 beneficiary of such USA Retirement Fund 

25 may— 


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1 (I) petition the board of trustees 

2 to remove a trustee or service pro3 vider; 

4 (II) comment on the management 

5 and administration of the USA Re6 tirement Fund; and 

7 (III) with respect to a USA Re8 tirement Fund with more than 

9 $250,000,000 of assets, vote to ap10 prove or disapprove the compensation 

11 of the trustees at least once every 3 

12 years. 

13 (ii) EFFECT OF VOTE.—If partici14 pants and beneficiaries of a USA Retire15 ment Fund vote to disapprove the com16 pensation of trustees under clause 

17 (i)(III)— 

18 (I) the results of such vote shall 

19 not be binding on the board of trust20 ees; and 

21 (II) the board of trustees shall 

22 notify the Secretary of the results of 

23 such vote and provide an explanation 

24 of why the compensation is reasonable 


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1 or anticipated changes to the com2 pensation. 

3 (8) LIABILITY INSURANCE FOR TRUSTEES.— 

4 The trustees of each USA Retirement Fund shall 

5 have fiduciary liability insurance with a per-claim 

6 limit equal to no less than the greater of— 

7 (A) 5 percent of plan assets; or 

8 (B) $1,000,000. 

9 (9) TRUSTEE DUTIES.— 

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

11 Retirement Fund shall manage the Fund with 

12 the intention of providing each participant with 

13 a cost-effective stream of income in retirement 

14 and reducing benefit level volatility (particularly 

15 for those approaching retirement). 

16 (B) APPLICABILITY OF OTHER REQUIRE17 MENTS.—Each trustee of a USA Retirement 

18 Fund shall be a fiduciary subject to sections 

19 404(a), 404(b), 405, 406, and 408 through 413 

20 of the Employee Retirement Income Security 

21 Act of 1974 with respect to the Fund and par22 ticipants and beneficiaries of the Fund. Each 

23 such trustee shall be subject to the standards 

24 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) CONTRIBUTION LIMITATIONS.— 

4 (1) EMPLOYER.—Subject to paragraph (3), em5 ployers 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) EMPLOYEE.—An employee may not elect 

16 (or shall not be treated as having as elected) to con17 tribute more than $15,000 per year to a USA Re18 tirement Fund. 

19 (3) ANNUAL INDEXING OF AMOUNT.—The dol20 lar amounts under paragraphs (1) and (2) shall be 

21 indexed annually for inflation. 

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

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

24 shall pay benefits in the form of an annuity in ac25 cordance with paragraph (2). The amount of such 


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1 benefits shall be dependent on the amount of con2 tributions made by the participant, the experience of 

3 the Fund, and the form of distribution elected by 

4 the participant. The amount of an annuity may be 

5 adjusted to reflect the experience of the Fund as 

6 necessary to protect the financial integrity of the 

7 Fund, except that annuity payments for those in pay 

8 status shall not be reduced more than 5 percent per 

9 year unless the Fund is faced with a significant fi10 nancial hardship and the Secretary has approved the 

11 reduction. 

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

13 pay benefits in accordance with one of the following: 

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

15 not die before the annuity starting date, the 

16 benefit payable to such participant shall be pro17 vided in the form of a qualified joint and sur18 vivor annuity (as defined in section 205(d)(1) 

19 of the Employee Retirement Income Security 

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

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

22 before the annuity starting date and who has a 

23 surviving spouse, a qualified preretirement sur24 vivor annuity (as defined in section 205(d)(2) 

25 of the Employee Retirement Income Security 


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

2 provided to the surviving spouse of such partici3 pant. 

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

5 annuity form of benefit or the qualified pre6 retirement survivor annuity form of benefit (or 

7 both), a participant may elect to receive a dis8 tribution described in subsection (f)(2) if one of 

9 the following conditions are met: 

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

11 consents in writing to the election. 

12 (II) Such election designates a bene13 ficiary (or form of benefits) which may not 

14 be changed without spousal consent (or the 

15 consent of the spouse expressly permits 

16 designations by the participant without 

17 any requirement of further consent by the 

18 spouse). 

19 (III) The spouse’s consent acknowl20 edges the effect of such election and is wit21 nessed by a plan representative or a notary 

22 public. 

23 (ii) It is established to the satisfaction 

24 of a Fund representative that the consent 

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1 tained because there is no spouse, because 

2 the spouse cannot be located, or because of 

3 such other circumstances as the Secretary 

4 may by regulations prescribe. 

5 The consent of a spouse (or establishment that 

6 the consent of a spouse cannot be obtained) 

7 under this subparagraph shall be effective only 

8 with respect to such spouse. 

9 (3) COMMENCEMENT OF BENEFIT PAY10 MENTS.—A participant may elect the time to start 

11 receiving benefit payments from the USA Retire12 ment Fund, except that a participant— 

13 (A) except as provided in subsection 

14 (f)(2)(B), may not elect to receive benefit pay15 ments before reaching the age of 60; and 

16 (B) must begin receiving benefit payments 

17 before the age of 72. 

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

19 participant, within a reasonable period of time be20 fore the annuity starting date, a written explanation 

21 substantially similar to that required by section 

22 205(c)(3) of the Employee Retirement Income Secu23 rity Act of 1974 (29 U.S.C. 1055(c)(3)). 

24 (5) ASSIGNMENT OR ALIENATION OF FUND

25 BENEFITS.—Benefits under a USA Retirement 


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1 Fund shall be subject to section 206(d) of the Em2 ployee Retirement Income Security Act of 1974 (29 

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

4 (f) LIMITS ON WITHDRAWALS AND TRANSFERS.— 

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

6 frequently than once per year, transfer such partici7 pant’s benefit to another USA Retirement Fund. 

8 (2) LIMITS ON DISTRIBUTIONS.— 

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

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

11 not take a distribution other than one described 

12 in subsection (e)(2). 

13 (B) PARTICIPANTS AGED 59 AND YOUNG14 ER.—A participant may before age 60 take a 

15 distribution of a portion of the participant’s 

16 benefit if such distribution does not to exceed 

17 $5,500 and is rolled over to a qualifying plan 

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

19 of the Internal Revenue Code of 1986 or an in20 dividual retirement plan. 

21 (C) PARTICIPANTS AGED 60 AND OLDER.— 

22 A participant who is 60 or older but who has 

23 not entered pay status may elect one time to 

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

25 50 percent of the participant’s benefit if the 


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1 participant demonstrates to the satisfaction of 

2 the trustees of the Fund that the participant 

3 has sufficient retirement income apart from the 

4 Fund or is facing a substantial hardship. 

5 (g) METHODS FOR PROVIDING ANNUITIZED BEN6 EFIT PAYMENTS.— 

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

8 shall establish and maintain mechanisms for ade9 quately securing the payment of annuity benefits 

10 from the Fund. The Fund shall include a written de11 scription of such mechanisms in the investment and 

12 lifetime income policy statements required to be dis13 closed to participants. 

14 (2) SPECIFIC GOALS.—The mechanisms de15 scribed in paragraph (1) shall ensure that— 

16 (A) each participant receives a stream of 

17 income for life; 

18 (B) each participant and beneficiary has 

19 an opportunity to be protected against longevity 

20 risk; and 

21 (C) volatility in benefit levels is minimized 

22 for participants and beneficiaries in pay status 

23 and those approaching pay status. 

24 (3) SELF-ANNUITIZATION.— 


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1 (A) IN GENERAL.—Notwithstanding any 

2 other provision of law, a USA Retirement Fund 

3 may self-annuitize if the Fund meets such re4 quirements as the Secretary establishes as nec5 essary to protect participants and beneficiaries 

6 in consideration of the recommendations of the 

7 Commission under section 103. 

8 (B) DUTY TO ADDRESS EMERGING

9 ISSUES.—The Secretary shall, periodically and 

10 in accordance with established procedures, up11 date the funding requirements promulgated 

12 under this paragraph in response to changing 

13 economic and business conditions to the extent 

14 necessary to carry out the purposes of this Act, 

15 taking into consideration the recommendations 

16 of the Commission. 

17 (h) REPORTING AND DISCLOSURE.— 

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

19 USA Retirement Fund shall provide each participant 

20 in the Fund an annual statement of— 

21 (A) the estimated amount of the monthly 

22 benefit which the participant or beneficiary is 

23 projected to receive from the USA Retirement 

24 Fund, in the form of the default benefit deVerDate Sep 11 2014 04:55 Dec 18, 2014 Jkt 049200 PO 00000 Frm 00029 Fmt 6652 Sfmt 6201 E:\BILLS\H5828.IH H5828

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1 scribed in the plan in accordance with sub2 section (e)(2); 

3 (B) an explanation, written in a manner 

4 calculated to be understood by the average plan 

5 participant, that includes interest and mortality 

6 assumptions used in calculating the estimate 

7 and a statement that actual benefits may be 

8 materially different from such estimate; 

9 (C) a disclosure of Fund fees and perform10 ance that is substantially similar to the disclo11 sures required of individual account plans under 

12 the Employee Retirement Income Security Act 

13 of 1974; 

14 (D) any other disclosures, including pro15 jected benefit estimates, that the board of trust16 ees of the USA Retirement Fund determines 

17 appropriate; and 

18 (E) such other disclosures as may be re19 quired by the Secretary. 

20 (2) SUMMARY PLAN DESCRIPTION.—The trust21 ees of a USA Retirement Fund shall provide partici22 pants a summary plan description (as described in 

23 section 102 of the Employee Retirement Income Se24 curity Act (29 U.S.C. 1022)) as required by section 


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1 104(b) of the Employee Retirement Income Security 

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

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

4 Retirement Fund shall file with the Secretary of 

5 Labor periodic reports in accordance with regula6 tions promulgated by the Secretary. 

7 (4) ADDITIONAL REQUIREMENTS.—Each USA 

8 Retirement Fund shall be subject to sections 106 

9 and 107 of the Employee Retirement Income Secu10 rity Act of 1974 (29 U.S.C. 1026, 1027). 

11 (i) TAX TREATMENT.— 

12 (1) USA RETIREMENT FUND.—A USA Retire13 ment Fund is exempt from taxation under subtitle 

14 A of the Internal Revenue Code of 1986. Notwith15 standing the preceding sentence, a USA Retirement 

16 Fund is subject to the taxes imposed by section 511 

17 of such Code (relating to imposition of tax on unre18 lated business income of charitable, etc. organiza19 tions). 

20 (2) CONTRIBUTIONS.—In the case of an indi21 vidual, there shall be allowed as a deduction for the 

22 taxable year an amount equal to the amount of con23 tributions to a USA Retirement Fund made by or on 

24 behalf of the individual under an automatic USA 

25 Retirement Fund arrangement under section 2(d). 


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1 (3) ROLLOVER CONTRIBUTIONS.—For purposes 

2 of this Act, rules similar to the rules of subpara3 graphs (A) and (D) of section 408(d)(3) of the In4 ternal Revenue Code of 1986 shall apply. 

5 (4) DISTRIBUTIONS.—Any distribution from a 

6 USA Retirement Fund shall be includible in the 

7 gross income of the distributee in the manner as 

8 provided in section 72 of the Internal Revenue Code 

9 of 1986. 

10 (5) PROHIBITED TRANSACTIONS, ETC.—For 

11 purposes of this Act, rules similar to the rules of 

12 paragraphs (2), (3), and (4) of section 408(e)(2) of 

13 the Internal Revenue Code of 1986 shall apply. 

14 (6) REPORTS.—The trustees of a USA Retire15 ment Fund shall make such reports regarding such 

16 Fund to the Secretary of the Treasury and to des17 ignated beneficiaries with respect to contributions, 

18 distributions, and such other matters as the Sec19 retary of the Treasury may require. The reports re20 quired by this paragraph shall be filed at such time 

21 and in such manner and furnished to such individ22 uals at such time and in such manner as may be re23 quired by the Secretary of the Treasury. 


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1 SEC. 4. COMMISSION ON USA RETIREMENT FUNDS. 

2 (a) RECOGNITION OF PRIVATE COMMISSION.—The 

3 Secretary shall— 

4 (1) recognize an independent, private commis5 sion, to be known as the ‘‘Commission for USA Re6 tirement Funds Funding’’ (referred to in this title 

7 as the ‘‘Commission’’), and 

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

9 this title, consider the recommendations of such 

10 Commission. 

11 (b) COMMISSION.—The Commission recognized under 

12 subsection (a) shall meet the following requirements: 

13 (1) MEMBERSHIP.— 

14 (A) COMPOSITION.—The Commission shall 

15 be composed of 9 members selected by the Sec16 retary, in consultation with the Secretary of the 

17 Treasury, of whom no more than 5 may be 

18 from one political party. The Secretary shall 

19 designate one member of the Commission as the 

20 Chairman. No person may be appointed to the 

21 Commission if, during the 2-year period pre22 ceding the date of appointment, such person 

23 was a trustee of a USA Retirement Fund. 

24 (B) DATE.—The appointments of the 

25 members of the Commission shall be made not 


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1 later than 90 days after the date of enactment 

2 of this Act. 

3 (C) PERIOD OF APPOINTMENT; VACAN4 CIES.—Members shall be appointed for terms of 

5 2 years and may be appointed for consecutive 

6 terms. Any vacancy in the Commission shall not 

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

8 manner as the original appointment. 

9 (2) MAJORITY VOTE.—The Commission may 

10 act by majority vote of its members, provided that 

11 at least 7 members are present. 

12 (3) COMMISSION PERSONNEL MATTERS.— 

13 (A) COMPENSATION OF MEMBERS.—Each 

14 member of the Commission who is not an offi15 cer or employee of the Federal Government 

16 shall be compensated at a rate equal to the 

17 daily equivalent of the annual rate of basic pay 

18 prescribed for level IV of the Executive Sched19 ule under section 5315 of title 5, United States 

20 Code, for each day (including travel time) dur21 ing which such member is engaged in the per22 formance of the duties of the Commission. All 

23 members of the Commission who are officers or 

24 employees of the United States shall serve with25 out compensation in addition to that received 


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1 for their services as officers or employees of the 

2 United States. 

3 (B) TRAVEL EXPENSES.—The members of 

4 the Commission shall be allowed travel ex5 penses, including per diem in lieu of subsist6 ence, at rates authorized for employees of agen7 cies under subchapter I of chapter 57 of title 5, 

8 United States Code, while away from their 

9 homes or regular places of business in the per10 formance of services for the Commission. 

11 (C) STAFF.— 

12 (i) IN GENERAL.—The Chairman of 

13 the Commission may, without regard to 

14 the civil service laws and regulations, ap15 point and terminate an executive director 

16 and such other additional personnel as 

17 may be necessary to enable the Commis18 sion to perform its duties. The employment 

19 of an executive director shall be subject to 

20 confirmation by the Commission. 

21 (ii) COMPENSATION.—The Chairman 

22 of the Commission may fix the compensa23 tion of the executive director and other 

24 personnel without regard to chapter 51 

25 and subchapter III of chapter 53 of title 5, 


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1 United States Code, relating to classifica2 tion of positions and General Schedule pay 

3 rates, except that the rate of pay for the 

4 executive director and other personnel may 

5 not exceed the rate payable for level V of 

6 the Executive Schedule under section 5316 

7 of such title. 

8 (iii) DETAIL OF GOVERNMENT EM9 PLOYEES.—Any Federal Government em10 ployee may be detailed to the Commission 

11 without reimbursement, and such detail 

12 shall be without interruption or loss of civil 

13 service status or privilege. 

14 (iv) PROCUREMENT OF TEMPORARY

15 AND INTERMITTENT SERVICES.—The 

16 Chairman of the Commission may procure 

17 temporary and intermittent services under 

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

19 Code, at rates for individuals which do not 

20 exceed the daily equivalent of the annual 

21 rate of basic pay prescribed for level V of 

22 the Executive Schedule under section 5316 

23 of such title. 

24 (4) RECOMMENDATIONS AND REGULATIONS ON

25 FUNDING AND DISTRIBUTION REQUIREMENTS.— 


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1 (A) IN GENERAL.—After taking into con2 sideration the recommendations of the Commis3 sion and providing the public notice and an op4 portunity for comment, the Secretary shall pro5 mulgate regulations with respect to funding and 

6 distribution requirements for USA Retirement 

7 Funds, as necessary or appropriate in the pub8 lic interest and for the protection of partici9 pants and beneficiaries, including regulations 

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

11 (B) REQUIREMENTS RELATING TO ANNU12 ITY PAYMENTS MADE DIRECTLY BY A FUND.— 

13 The regulations under subparagraph (A) shall 

14 provide that in the case of annuity payments 

15 made directly by the Fund— 

16 (i) the maximum annuity payment for 

17 a participant or beneficiary shall be deter18 mined using the mortality tables and inter19 est rates prescribed by the Secretary under 

20 subparagraph (C) at the time benefits 

21 commence; and 

22 (ii) the level of benefits paid may be 

23 adjusted periodically in order to reflect the 

24 mortality experience and the investment 

25 experience of the Fund, but only after the 


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1 Fund has obtained a certification from a 

2 member of the American Academy of Actu3 aries that the adjustment is sustainable for 

4 the remaining lifetime of participants then 

5 receiving benefits, based on the mortality 

6 tables and interest rates prescribed under 

7 subparagraph (C) by the Secretary for that 

8 time. 

9 (C) MORTALITY TABLES AND INTEREST

10 RATES USED REQUIREMENTS.—The regulations 

11 promulgated under subparagraph (A) shall in12 clude the following: 

13 (i) MORTALITY TABLES.— 

14 (I) IN GENERAL.—The Secretary 

15 shall prescribe mortality tables to be 

16 used in determining annuity payments 

17 made directly by the Fund. Such ta18 bles shall be based on the actual expe19 rience of insurance companies that 

20 issue group annuities and projected 

21 trends in such experience. In pre22 scribing such tables, the Secretary 

23 shall take into account results of 

24 available independent studies of the 


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1 mortality of individuals receiving an2 nuities under group annuity contracts. 

3 (II) PERIODIC REVISIONS OF

4 MORTALITY TABLES.—The Secretary 

5 shall make revisions, to become effec6 tive as soon as practicable, in any 

7 mortality table in effect to reflect 

8 more recent actual experience of in9 surance companies that issue group 

10 annuities and projected trends in such 

11 experience. In revising such tables, 

12 the Secretary shall take into account 

13 the results of more recent available 

14 independent studies of the mortality 

15 and projected trends of individuals re16 ceiving annuities under group annuity 

17 contracts. 

18 (ii) INTEREST RATES.—The Secretary 

19 shall prescribe interest rates to be used in 

20 determining annuity payments made di21 rectly by the Fund. Such rates shall be 

22 based on the yields on investment grade 

23 corporate bonds with varying maturities 

24 and that are in the top 3 quality levels 

25 available. Interest rates shall be prescribed 


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1 quarterly or more frequently, as deter2 mined by the Secretary. 

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

4 Commission shall prepare, and periodically update, a 

5 report that describes the best practices for the gov6 ernance of boards of trustees of USA Retirement 

7 Funds, including board of trustee composition, ap8 pointment procedures, term length, term staggering, 

9 trustee qualifications, delegation of duties, and per10 formance assessment procedures. 

11 SEC. 5. LIMITATION ON EMPLOYER LIABILITY. 

12 Section 404 of the Employee Retirement Income Se13 curity Act of 1974 (29 U.S.C. 1021 et seq.) is amended 

14 by adding at the end the following: 

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

16 to the selection, management or administration of a USA 

17 Retirement Fund solely because such employer makes 

18 available such Fund through an automatic USA Retire19 ment Fund arrangement. Notwithstanding the preceding 

20 sentence, employers participating in a USA Retirement 

21 Fund shall be responsible for meeting the enrollment re22 quirements and transmitting contributions, as required 

23 under the USA Retirement Funds Act.’’. 


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1 SEC. 6. ENFORCEMENT AND FRAUD PREVENTION. 

2 (a) PENALTY FOR FAILURE TO TIMELY REMIT CON3 TRIBUTIONS TO AUTOMATIC USA RETIREMENT FUND

4 ARRANGEMENTS.— 

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

6 under an automatic USA Retirement Fund arrange7 ment to deposit amounts withheld from an employ8 ee’s compensation into a USA Retirement Fund but 

9 fails to do so within the time prescribed under sec10 tion 2(d)(3), such amounts shall be treated as assets 

11 of a USA Retirement Fund. 

12 (2) FAILURE TO PROVIDE ACCESS TO PAYROLL

13 SAVINGS ARRANGEMENTS.— 

14 (A) GENERAL RULE.—A covered employer 

15 who fails to meet the requirements of section 

16 2(a) for a calendar year shall be subject to a 

17 civil money penalty of $100 per calendar year 

18 for each employee to whom such failure relates. 

19 (B) EXCEPTIONS.—No civil money penalty 

20 shall be imposed under this paragraph for a 

21 failure to meet the requirements under section 

22 2(a)— 

23 (i) during a period for which the Sec24 retary determines that the employer sub25 ject to liability for the civil money penalty 

26 did not know that the failure existed and 


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1 exercised reasonable diligence to meet the 

2 requirements of section 2(a); or 

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

4 for the civil money penalty exercised rea5 sonable diligence to meet the requirements 

6 of section 2(a); and 

7 (II) the employer provides the auto8 matic USA Retirement Fund arrangement 

9 described to each employee eligible to par10 ticipate in the arrangement by the end of 

11 the 90-day period beginning on the first 

12 date the employer knew, or exercising rea13 sonable diligence should have known, that 

14 such failure existed. 

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

16 case of a failure to meet the requirements of 

17 section 2(a) that is due to reasonable cause and 

18 not to willful neglect, the Secretary may, in the 

19 sole discretion of the Secretary, waive part or 

20 all of the civil money penalty imposed under 

21 this paragraph to the extent that the payment 

22 of such civil money penalty would be excessive 

23 or otherwise inequitable relative to the failure 

24 involved. 


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1 (D) PROCEDURES FOR NOTICE.—The Sec2 retary may prescribe and implement procedures 

3 for obtaining confirmation that employers are 

4 in compliance with subsection (a). The Sec5 retary, in the discretion of such Secretary, may 

6 prescribe that the confirmation shall be ob7 tained on an annual or less frequent basis, and 

8 may use for this purpose the annual report or 

9 quarterly report for employment taxes, or such 

10 other means as the Secretary may deem advis11 able. 

12 (b) CIVIL ACTIONS AND ENFORCEMENT.— 

13 (1) ADMINISTRATION AND ENFORCEMENT.— 

14 Part 5 of title I of the Employee Retirement Income 

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

16 apply to a USA Retirement Fund as if a USA Re17 tirement Fund were an employee benefit plan. 

18 (2) AMENDMENT.—Section 502(a) of the Em19 ployee Retirement Income Security Act of 1974 (29 

20 U.S.C. 1132 et seq.) is amended— 

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

22 and inserting ‘‘;’’; 

23 (B) in paragraph (10), by striking the pe24 riod at the end and inserting ‘‘; or’’; and 

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


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

2 make timely contributions or payments to a USA 

3 Retirement Fund established under title I of the 

4 USA Retirement Funds Act, by the Secretary, a 

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

6 an employer to make such contributions or payments 

7 as if such contributions or payments were delinquent 

8 contributions or payments under section 515 or sub9 section (g)(2).’’. 

10 (3) NON-PREEMPTION OF CERTAIN STATE

11 LAW.—Nothing in this section shall preempt State 

12 law insofar as State law relates to the enforcement 

13 of an obligation to contribute to a USA Retirement 

14 Fund. 

15 (c) FALSE STATEMENTS.— 

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

17 with a plan or other arrangement that is or purports 

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

19 statement or false representation of fact, knowing it 

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

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

22 member of an employee organization, any bene23 ficiary, any employer, any employee organization, 

24 the Secretary, or any State, or the representative or 


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

2 concerning— 

3 (A) the financial condition or solvency of 

4 such fund or arrangement; 

5 (B) the benefits provided by such fund or 

6 arrangement; 

7 (C) the regulatory status of such fund or 

8 other arrangement under any Federal or State 

9 law governing collective bargaining, labor man10 agement relations, or intern union affairs; or 

11 (D) the regulatory status of such fund or 

12 other arrangement. 

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

14 subsection shall, upon conviction, be imprisoned not 

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

16 States Code, or both. 

17 (d) CEASE AND DESIST ORDERS.— 

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

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

20 title if the Secretary determines that the alleged con21 duct of a fund purporting to be a USA Retirement 

22 Fund is fraudulent, or creates an immediate danger 

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

24 be reasonably expected to cause significant, immi25 nent, and irreparable public injury. 


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1 (2) HEARINGS.— 

2 (A) IN GENERAL.—A person who is ad3 versely affected by the issuance of a cease and 

4 desist order under paragraph (1) may request a 

5 hearing by the Secretary regarding such order. 

6 The Secretary may require that a hearing 

7 under this paragraph, including all related in8 formation and evidence, be conducted in a con9 fidential manner. 

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

11 proof in any hearing conducted under subpara12 graph (A) shall be on the party requesting the 

13 hearing to show cause why the cease and desist 

14 order should be set aside. 

15 (C) DETERMINATION.—Based upon the 

16 evidence presented at a hearing under subpara17 graph (A), the Secretary may affirm, modify, or 

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

19 whole or in part. 

20 (3) REGULATIONS.—The Secretary may pro21 mulgate such regulations or other guidance as may 

22 be necessary or appropriate to carry out this sub23 section. 

Æ 


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