II

105TH CONGRESS

1ST SESSION S. 1185

To provide employees with more access to information concerning their pension plans and with additional mechanisms to enforce their rights under

such plans.

IN THE SENATE OF THE UNITED STATES

SEPTEMBER 17, 1997

Mr. GRASSLEY (for himself and Mr. BREAUX) introduced the following bill;

which was read twice and referred to the Committee on Labor and

Human Resources

A BILL

To provide employees with more access to information concerning their pension plans and with additional mechanisms to enforce their rights under such plans.

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

3 SECTION 1. PERIODIC PENSION BENEFITS STATEMENTS.

4 (a) IN GENERAL.—Section 105(a) of the Employee

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

6 1025(a)) is amended by striking ‘‘shall furnish’’ and all

7 that follows through the period and inserting ‘‘shall—

8 ‘‘(1) in the case of a plan other than a defined

9 benefit plan, furnish to each plan participant at
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1 least once each year, and, in the case of any plan,

2 furnish to a plan participant or beneficiary upon

3 their written request, a statement in written or elec4 tronic form indicating, on the basis of the latest

5 available information—

6 ‘‘(A) the total benefits accrued, and

7 ‘‘(B) the nonforfeitable pension benefits, if

8 any, which have accrued, or the earliest date on

9 which benefits will become nonforfeitable, and

10 ‘‘(2) in the case of a defined benefit plan, fur11 nish to each plan participant at least once every 3

12 years, a statement in written or electronic form indi13 cating the plan’s approximate benefit levels at var14 ious levels of pay and service, including information

15 as to whether such benefit levels are affected by

16 breaks in service, family leave, or otherwise.’’.

17 (b) RULE FOR MULTIEMPLOYER PLANS.—Section

18 105(d) of the Employee Retirement Income Security Act

19 of 1974 (29 U.S.C. 1025(d)) is amended to read as fol20 lows:

21 ‘‘(d) Notwithstanding subsection (a), in the case of

22 a plan to which more than 1 unaffiliated employer is re23 quired to contribute and to which subsection (a)(1) ap24 plies, a statement described in subsection (a)(1) shall be
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1 required upon the written request of a participant or bene2 ficiary.’’.

3 (c) PENALTY FOR FAILURE TO DISCLOSE.—Section

4 502(c)(1)(A) of the Employee Retirement Income Security

5 Act of 1974 (29 U.S.C. 1132(c)(1)(A)) is amended by

6 striking ‘‘or section 101(e)(1)’’ and inserting ‘‘, section

7 101(e)(1), or section 105(a)’’.

8 (d) CONFORMING AMENDMENTS.—

9 (1) Section 101(a)(2) of the Employee Retire10 ment Income Security Act of 1974 (29 U.S.C.

11 1021(a)(2)) is amended by striking ‘‘105(a) and

12 (c)’’ and inserting ‘‘105(a), (c), and (d)’’.

13 (2) Section 106(b) of such Act (29 U.S.C.

14 1026(b)) is amended by striking ‘‘and 105(c)’’ and

15 inserting ‘‘, 105(c), and 105(d)’’.

16 (e) EFFECTIVE DATE.—The amendments made by

17 this section shall apply to plan years beginning after the

18 earlier of—

19 (1) the date of issuance by the Secretary of

20 Labor of regulations—

21 (A) providing guidance for simplifying de22 fined benefit plan calculations with respect to

23 the information required under section 105 of

24 the Employee Retirement Income Security Act

25 of 1974 (29 U.S.C. 1025), and
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1 (B) requiring that the statements required

2 under the amendments made by this section are

3 written in a form calculated to be understood

4 by an average plan participant and specifying

5 model language for such statements, or

6 (2) December 31, 1998.

7 SEC. 2. DISCLOSURE OF BENEFIT CALCULATIONS.

8 (a) IN GENERAL.—Section 105 of the Employee Re9 tirement Income Security Act of 1974 (29 U.S.C. 1025)

10 is amended by adding at the end the following:

11 ‘‘(e)(1) In the case of a participant or beneficiary who

12 is entitled to a distribution of a benefit under an employee

13 pension benefit plan, the administrator of such plan shall

14 provide to the participant or beneficiary the information

15 described in paragraph (2) upon the written request of

16 the participant or beneficiary.

17 ‘‘(2) The information described in this paragraph in18 cludes—

19 ‘‘(A) a worksheet explaining how the amount of

20 the distribution was calculated and stating the as21 sumptions used for such calculation,

22 ‘‘(B) upon written request of the participant or

23 beneficiary, any documents relating to the calcula24 tion (if available), and
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1 ‘‘(C) such other information as the Secretary

2 may prescribe.

3 Any information provided under this paragraph shall be

4 in a form calculated to be understood by the average plan

5 participant.’’.

6 (b) CONFORMING AMENDMENTS.—

7 (1) Section 101(a)(2) of the Employee Retire8 ment Income Security Act of 1974 (29 U.S.C.

9 1021(a)(2)), as amended by section 1(d)(1), is

10 amended by striking ‘‘105(a), (c), and (d)’’ and in11 serting ‘‘105(a), (c), (d), and (e)’’.

12 (2) Section 106(b) of such Act (29 U.S.C.

13 1026(b)), as amended by section 1(d)(2), is amend14 ed by striking ‘‘and 105(d)’’ and inserting ‘‘105(d),

15 and 105(e)’’.

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

17 this section shall apply to distributions made after the

18 date of enactment of this Act.

19 SEC. 3. DISCRETIONARY SECRETARIAL IMPOSITION OF

20 PENALTIES FOR FAILURE TO DISCLOSE TO

21 PARTICIPANTS AND BENEFICIARIES.

22 (a) IN GENERAL.—Section 501(c) of the Employee

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

24 1132(c)) is amended by adding at the end the following:
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1 ‘‘(7) The Secretary may assess a civil penalty of not

2 more than $100 a day for each violation by any adminis3 trator of section 104(b) or 105. For purposes of this para4 graph, each violation with respect to any single participant

5 or beneficiary shall be treated as a separate violation.’’.

6 (b) EFFECTIVE DATE.—The amendment made by

7 this section shall apply to violations occurring after the

8 date of enactment of this Act.

9 SEC. 4. CLARIFICATION OF DEFINITION OF PARTICIPANT.

10 Section 3(7) of the Employee Retirement Income Se11 curity Act of 1974 (29 U.S.C. 1002(7)) is amended by

12 striking ‘‘who is or may become’’ and inserting ‘‘who was,

13 is, or may become’’.

14 SEC. 5. REVIEW OF DENIAL OF BENEFIT CLAIMS.

15 (a) MODEL ALTERNATIVE DISPUTE RESOLUTION

16 PROCEDURE.—Section 503 (29 U.S.C. 1133) is amend17 ed—

18 (1) by inserting ‘‘(a) IN GENERAL.—’’ after

19 ‘‘SEC. 503.’’; and

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

21 ‘‘(b) MODEL ALTERNATIVE DISPUTE RESOLUTION

22 PROCEDURES.—

23 ‘‘(1) IN GENERAL.—The Secretary shall estab24 lish a model alternative dispute resolution procedure

25 to be adopted by any plan at its discretion for ap-
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1 peals of plan benefits claims denials to which sub2 section (a) applies.

3 ‘‘(2) EXPERTS AND FEES.—The Secretary—

4 ‘‘(A) shall maintain a roster of employee

5 benefit experts who may be called upon to serve

6 as neutral experts in the procedure under para7 graph (1), and

8 ‘‘(B) may assess fees as necessary from

9 each party to cover the costs of experts called.

10 The Secretary may reduce or waive a fee under sub11 paragraph (B) on the basis of inability to pay.

12 ‘‘(3) NOTICE.—The Secretary shall—

13 ‘‘(A) notify individuals of the procedure es14 tablished under paragraph (1) or other sources

15 of assistance in resolving benefits claim dis16 putes, and

17 ‘‘(B) provide model information with re18 spect to the procedure to be included in all

19 summary plan descriptions and benefit deter20 minations.’’

21 (b) EFFECTIVE DATE.—The amendments made by

22 this section shall apply to claims made after the date of

23 enactment of this Act.

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