Expanding Access to Retirement Act of 2019

To amend the Employee Retirement Income Security Act of 1974 with respect to association retirement plans and other multiple employer pension benefit plans. 1. Short title This Act may be cited as the Expanding Access to Retirement Act of 2019 2. Definition of employer (a) Definition of employer Section 3(5) of the Employee Retirement Income Security Act of 1974 ( 29 U.S.C. 1002(5) (which, with respect to a defined contribution pension plan, includes only a bona fide group or association of employers or a bona fide professional employer organization, as defined in paragraphs (43) and (44), respectively). (b) Bona fide group or association of employers Section 3 of the Employee Retirement Income Security Act of 1974 ( 29 U.S.C. 1002 (43) (A) The term bona fide group or association of employers (i) The primary purpose of the group or association may be to offer and provide multiple employer pension plan coverage to employer members and their employees, provided that the group or association has at least one substantial business purpose unrelated to offering and providing multiple employer pension plan coverage or other employee benefits. (ii) Each employer member of the group or association participating in the plan is a person acting directly as an employer of at least one employee who is a participant covered under the plan. (iii) The group or association has a formal organizational structure with a governing body and has by-laws or other similar indications of formality. (iv) The functions and activities of the group or association are controlled, in form and in substance, by its employer members and the group's or association's employer members that participate in the pension plan. (v) The employer members have a commonality of interest as described in subparagraph (C). (vi) The group or association does not make plan participation through the association available other than to employees and former employees of employer members, and their beneficiaries. (vii) The group or association is not a bank or trust company, insurance issuer, broker-dealer, or other similar financial services firm (including pension record keepers and third-party administrators), or owned or controlled by such an entity or any subsidiary or affiliate of such an entity, other than to the extent such an entity, subsidiary, or affiliate participates in the group or association in its capacity as an employer member of the group or association. (B) For purposes of subparagraph (A)(i)— (i) a substantial business purpose (ii) a business purpose (C) (i) For purposes of subparagraph (A)(5)— (I) Employer members of a group or association shall be considered to have a commonality of interest if— (aa) the employers are in the same trade, industry, line of business, or profession; or (bb) each employer has a principal place of business in the same region that does not exceed the boundaries of a single State or a metropolitan area (even if the metropolitan area includes more than one State). (ii) In the case of a group or association that is sponsoring a multiple employer plan and that is an employer member of the group or association, the group or association will be deemed for purposes of paragraph (b)(2)(i)(A) to be in the same trade, industry, line of business, or profession, as applicable, as the other employer members of the group or association. (D) (i) For purposes of subparagraph (A), a working owner of a trade or business without common law employees may qualify as both an employer and as an employee of the trade or business. (ii) For purposes of clause (i), the term working owner (I) who has an ownership right of any nature in a trade or business, whether incorporated or unincorporated, including a partner or other self-employed individual; (II) who is earning wages or self-employment income from the trade or business for providing personal services to the trade or business; and (III) who— (aa) works on average at least 20 hours per week or at least 80 hours per month providing personal services to the working owner's trade or business; or (bb) has wages or self-employment income from such trade or business that at least equals the working owner's cost of coverage for participation by the working owner and any covered beneficiaries in any group health plan sponsored by the group or association in which the individual is participating or is eligible to participate. (iii) The determination of whether an individual qualifies as a working owner shall be made when the individual first becomes eligible for participation in the defined contribution multiple employer pension plan and continued eligibility pursuant to this subparagraph shall be periodically confirmed pursuant to reasonable monitoring procedures. . (c) Bona fide professional employer organization Section 3 of the Employee Retirement Income Security Act of 1974 ( 29 U.S.C. 1002 (44) (A) The term bona fide professional employer organization client employers (i) The organization performs substantial employment functions, as described in subparagraph (B), on behalf of client employers, and maintains adequate records relating to such functions. (ii) The organization has substantial control over the functions and activities of the multiple employer plan, as the plan sponsor (within the meaning of section 3(16)(B)), the plan administrator (within the meaning of section 3(16)(A)), and a named fiduciary (within the meaning of section 402). (iii) The organization ensures that each client employer that adopts the multiple employer pension plan acts directly as an employer of at least one employee who is a participant covered under the defined contribution multiple employer plan. (iv) The organization ensures that participation in the multiple employer pension plan is available only to employees and former employees of the organization and client employers, and their beneficiaries. (v) The organization establishes a multiple employer pension plan. (B) (i) The Secretary shall determine whether an organization is considered to perform substantial employment functions on behalf of client employers, within the meaning of subparagraph (A)(i), based on the criteria under clause (ii). (ii) An organization performs substantial employment functions if either of the following applies: (I) The organization is a certified professional employer organization (as defined in section 7705(a) (II) The organization meets 5 or more of the following criteria with respect to employees of client employers participating in the multiple employer pension plan: (aa) The organization is responsible for payment of wages to employees of its client employers that adopt the plan without regard to the receipt or adequacy of payment from such client employers. (bb) The organization is responsible for reporting, withholding, and paying any applicable Federal employment taxes for its client employers that adopt the plan, without regard to the receipt or adequacy of payment from those client employers. (cc) The organization is responsible for recruiting, hiring, and firing workers of its client employers that adopt the plan in addition to the client employer's responsibility for recruiting, hiring, and firing workers. (dd) The organization is responsible for establishing employment policies, establishing conditions of employment, and supervising employees of its client employers that adopt the plan in addition to the client employer's responsibility to perform such functions. (ee) The organization is responsible for determining employee compensation, including method and amount, of employees of its client employers that adopt the plan in addition to the client employers' responsibility to determine employee compensation. (ff) The organization is responsible for providing workers' compensation coverage in satisfaction of applicable State law to employees of its client employers that adopt the plan, without regard to the receipt or adequacy of payment from those client employers. (gg) The organization is responsible for integral human-resource functions of its client employers that adopt the plan, such as job-description development, background screening, drug testing, employee-handbook preparation, performance review, paid time-off tracking, employee grievances, or exit interviews, in addition to the client employer's responsibility to perform such functions. (hh) The organization is responsible for regulatory compliance of its client employers participating in the plan in the areas of workplace discrimination, family and medical leave, citizenship or immigration status, workplace safety and health, or Program Electronic Review Management labor certification, in addition to the client employer's responsibility for regulatory compliance. (ii) The organization continues to have employee-benefit-plan obligations to multiple employer pension plan participants after the client employer no longer contracts with the organization. (iii) The Secretary may determine that an organization performs substantial employment functions based upon finding that such organization meets as few as a single criterion under subclause (I) or (II) of clause (ii). .

Summary: Expanding Access to Retirement Act of 2019 This bill establishes limitations on defined contribution pension plans, such as 401(k) plans, offered by associations or groups of multiple employers. Specifically, the bill (1) specifies that these plans may be offered only by a bona fide group or association of employers or by a bona fide professional employer organization, and (2) establishes various requirements for each of these types of entities.