I
107TH CONGRESS
1ST SESSION
H. R. 3509
To amend title I of the Employee Retirement Income Security Act of 1974
to provide additional fiduciary protections for participants and bene-
ficiaries under employee stock ownership plans with respect to lockdowns
placed on plan assets.
IN THE HOUSE OF REPRESENTATIVES
DECEMBER 18, 2001
Mr. BENTSEN introduced the following bill; which was referred to the
Committee on Education and the Workforce
A BILL
To amend title I of the Employee Retirement Income Secu-
rity Act of 1974 to provide additional fiduciary protec-
tions for participants and beneficiaries under employee
stock ownership plans with respect to lockdowns placed
on plan assets.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Retirement Account
Protection Act of 2001’’.
such exemption unless the Secretary finds that such ex-
emption is—
‘‘(I) administratively feasible,
‘‘(II) in the interests of the plan and of its par-
ticipants and beneficiaires, and
‘‘(III) protective of the rights of participants
and beneficiaries of the plan.
Before granting such an exemption, the Secretary shall
publish notice in the Federal Register of the pendency of
the exemption, shall require that adequate notice be given
to interested persons, and shall afford interested persons
opportunity to present views.
‘‘(iii) Subparagraph (A) shall not apply in connection
with any plan unless the plan provides for compliance with
the requirements of clause (i).
‘‘(iv) For purposes of this subparagraph, the term
‘lockdown’ means any lockdown, blackout, or freeze with
respect to, suspension of, or similar limitation on the abil-
ity of a participant or beneficiary (who has met minimum
participation requirements applicable in accordance with
section 202) to transfer some or all of the nonforfeitable
accrued benefit of the participant or benefiary from invest-
ment in the form of qualifying employer securities (as de-
fined in section 407(d)(5)) to another investment vehicle
otherwise available under the terms of the plan. Such term
does not include—
‘‘(I) any permanent limitation which applies
only to benefits attributable to employer contribu-
tions, or
‘‘(II) any reasonable restriction on the fre-
quency of transfers between investment vehicles,
subject to such regulations as the Secretary may
prescribe.’’.
SEC. 3. STUDY RELATING TO CAPS ON INVESTMENT OF IN-
DIVIDUAL ACCOUNT PLAN ASSETS IN EM-
PLOYER SECURITIES.
(a) IN GENERAL.—As soon as practicable after the
date of the enactment of this Act, the Secretary of Labor,
in consultation with the Secretary of the Treasury and the
Securities and Exchange Commission, shall undertake a
study relating to investment of plan assets of individual
account plans in stock or other securities issued by the
employer.
(b) MATTERS TO BE STUDIED.—In conducting the
study pursuant to subsection (a), the Secretary shall—
(1) consider the feasibility of statutory limits on
the extent to which plan assets under individual ac-
count plans may be invested in stock or other securi-
ties issued by the employer, and
(2) analyze such feasibility with respect to a
range of possible statutory limits.
(c) REPORT.—Not later than 180 days after the date
of the enactment of this Act, the Secretary shall submit
a report to each House of the Congress setting forth the
results of the study required under subsection (a). Such
report shall include such recommendations for statutory
or administrative changes as the Secretary of Labor, in
consultation with the Secretary of the Treasury and the
Securities and Exchange Commission, has determined to
be appropriate.
SEC. 4. EFFECTIVE DATE AND RELATED RULES.
(a) IN GENERAL.—Subject to subsection (b), the
amendments made by this Act shall apply with respect to
plan years beginning on or after January 1, 2002.
(b) SPECIAL RULE FOR COLLECTIVELY BARGAINED
PLANS.—In the case of a plan maintained pursuant to 1
or more collective bargaining agreements between em-
ployee representatives and 1 or more employers ratified
on or before the date of the enactment of this Act, sub-
section (a) shall be applied to benefits pursuant to, and
individuals covered by, any such agreement by substituting
for ‘‘January 1, 2002’’ the date of the commencement of
the first plan year beginning on or after the earlier of—
(1) the later of—
(A) January 1, 2003, or
(B) the date on which the last of such col-
lective bargaining agreements terminates (de-
termined without regard to any extension there-
of after the date of the enactment of this Act),
or
(2) January 1, 2004.
(c) PLAN AMENDMENTS.—If the amendments made
by this Act require an amendment to any plan, such plan
amendment shall not be required to be made before the
first plan year beginning on or after January 1, 2004, if—
(1) during the period after such amendments
made by this Act take effect and before such first
plan year, the plan is operated in accordance with
the requirements of such amendments made by this
Act, and
(2) such plan amendment applies retroactively
to the period after such amendments made by this
Act take effect and before such first plan year.
Æ