Title: USA Retirement Funds Act
Policy area: Labor and Employment

Summary:
USA Retirement Funds Act
This bill amends the Employee Retirement Income Security Act of 1974 (ERISA) to require employers who do not already offer specified retirement plans to provide tax-exempt retirement funds (USA Retirement Fund arrangements) to their employees. The bill includes exemptions for certain small or new employers, governments, and churches.
Employees may elect to contribute to the funds using payroll deductions (or other periodic direct deposits) or to receive payments directly in cash. Unless employees opt out of a fund or elect a different contribution amount, they are automatically enrolled to make contributions that begin with 3% of annual compensation in 2019 and eventually increase to 6% after 2021.
The Department of Labor must review and select retirement plans that qualify for the funds. The bill establishes a board of trustees to administer the funds and a commission to advise Labor regarding the funds.
An employee may not contribute more than $15,000 per year to a fund. Employers may contribute up to $5,000 per year on behalf of an employee. The limits must be adjusted annually for inflation.
The funds must pay benefits to employees in the form of an annuity, in accordance with specified requirements.
The bill establishes limits on withdrawals and transfers from the funds. It also establishes civil and criminal penalties to enforce the requirements for the funds and prevent fraud.
The funds are tax-exempt, and the bill specifies requirements for the tax treatment of contributions, rollover contributions, and distributions. The bill also specifies reporting and disclosure requirements for the funds.

[Congressional Bills 115th Congress]
[From the U.S. Government Publishing Office]
[H.R. 7148 Introduced in House (IH)]

<DOC>






115th CONGRESS
  2d Session
                                H. R. 7148

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


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                           November 16, 2018

Mr. Cartwright 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.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``USA Retirement Funds Act''.

SEC. 2. AUTOMATIC USA RETIREMENT FUND ARRANGEMENTS.

    (a) Requirement To Provide Access.--Each covered employer shall 
make available to each qualifying employee for the calendar year an 
automatic USA Retirement Fund arrangement.
    (b) Covered Employer.--For purposes of this title--
            (1) In general.--Except as otherwise provided in this 
        subsection and subsection (c)(2), the term ``covered employer'' 
        means, with respect to any calendar year, an employer who does 
        not maintain a qualifying plan or arrangement for any part of 
        such year.
            (2) Qualifying plan or arrangement.--
                    (A) In general.--The term ``qualifying plan or 
                arrangement'' means a plan or arrangement described in 
                section 219(g)(5) of the Internal Revenue Code of 1986.
                    (B) Exceptions.--Such term shall not include the 
                following:
                            (i) Frozen defined benefit plan.--A defined 
                        benefit plan that had no ongoing accruals as of 
                        the first day of the preceding calendar year, 
                        unless the plan failed to have accruals only 
                        because of the application of section 206 of 
                        the Employee Retirement Income Security Act (29 
                        U.S.C. 1056) and section 436 of the Internal 
                        Revenue Code of 1986.
                            (ii) Defined contribution plan without 
                        lifetime income options.--A defined 
                        contribution plan that does not provide 
                        participants with a distribution option that 
                        provides lifetime income.
                            (iii) Plans not meeting contribution 
                        requirements.--A plan--
                                    (I) which consists of a cash or 
                                deferred arrangement (as defined in 
                                section 401(k) of such Code) with 
                                respect to which the employer does not 
                                automatically enroll all eligible 
                                employees at contribution rates at or 
                                above those specified in subsection 
                                (d)(4); or
                                    (II) for which the only 
                                contributions are nonelective employer 
                                contributions and with respect to which 
                                the employer's annual contribution rate 
                                is not at or above the rates specified 
                                in subsection (d)(4).
            (3) Exception for certain small and new employers.--
                    (A) In general.--The term ``covered employer'' 
                shall not include an employer for a calendar year if 
                the employer--
                            (i) did not employ during the preceding 
                        calendar year more than 10 employees who each 
                        received at least $5,000 of compensation (as 
                        defined in section 3401(a) of the Internal 
                        Revenue Code of 1986) from the employer for 
                        such preceding calendar year;
                            (ii) did not normally employ more than 10 
                        employees on a typical business day during the 
                        preceding calendar year; or
                            (iii) was not in existence at all times 
                        during the calendar year and the preceding 
                        calendar year.
                    (B) Operating rules.--In determining the number of 
                employees for purposes of subparagraph (A)--
                            (i) rules consistent with any rules 
                        applicable in determining the number of 
                        employees for purposes of section 408(p)(2)(C) 
                        and section 4980B(d) of the Internal Revenue 
                        Code of 1986 shall apply;
                            (ii) all members of the same family (within 
                        the meaning of section 318(a)(1) of the 
                        Internal Revenue Code of 1986) shall be treated 
                        as 1 individual; and
                            (iii) any reference to an employer shall 
                        include a reference to any predecessor 
                        employer.
            (4) Exception for governments and churches.--The term 
        ``covered employer'' shall not include--
                    (A) a government or entity described in section 
                414(d) of the Internal Revenue Code of 1986; or
                    (B) a church or a convention or association of 
                churches that is exempt from tax under section 501 of 
                such Code.
            (5) Aggregation rule.--A person treated as a single 
        employer under subsection (a) or (b) of section 52 of the 
        Internal Revenue Code of 1986 or subsection (m) or (o) of 
        section 414 of such Code shall be treated as a single employer.
    (c) Qualifying Employee.--For purposes of this title--
            (1) In general.--The term ``qualifying employee'' means any 
        employee who is not an excluded employee.
            (2) Plan sponsor's employees.--If--
                    (A) an employer maintains one or more qualifying 
                plans or arrangements described in section 219(g)(5) of 
                the Internal Revenue Code of 1986; and
                    (B) the employees of a subsidiary, division, or 
                other business unit are generally not eligible to 
                participate in any such qualifying plan or arrangement,
        for purposes of this section, the employer shall be treated as 
        a covered employer with respect to such employees (other than 
        excluded employees), and such employees (other than excluded 
        employees) shall be treated as qualifying employees for the 
        calendar year.
            (3) Excluded employees.--
                    (A) In general.--The term ``excluded employee'' 
                means an employee who is an excludable employee and who 
                is in a class or category that the employer excludes 
                from treatment as qualifying employees.
                    (B) Excludable employee.--The term ``excludable 
                employee'' means--
                            (i) an employee described in section 
                        410(b)(3) of the Internal Revenue Code of 1986;
                            (ii) an employee who has not attained the 
                        age of 21 before the beginning of the calendar 
                        year;
                            (iii) an employee who has not completed at 
                        least 3 months of service with the employer;
                            (iv) in the case of an employer that 
                        maintains a qualifying plan or arrangement 
                        which excludes employees who have not satisfied 
                        the minimum age and service requirements for 
                        participation in the plan, an employee who has 
                        not satisfied such requirements;
                            (v) in the case of an employer that 
                        maintains an annuity contract (including a 
                        custodial account or retirement income account) 
                        under section 403(b) of the Internal Revenue 
                        Code of 1986, an employee who is permitted to 
                        be excluded from any salary reduction 
                        arrangement under the contract pursuant to 
                        paragraph (12) of such section 403(b);
                            (vi) in the case of an employer that 
                        maintains an arrangement described in section 
                        408(p) of such Code, an employee who is not 
                        required to be eligible to participate in the 
                        arrangement under paragraph (4) of such section 
                        408(p); and
                            (vii) in the case of an employer that 
                        maintains a simplified employee pension 
                        described in section 408(k) of such Code, an 
                        employee who is permitted to be excluded from 
                        participation under paragraph (2) of such 
                        section 408(k).
            (4) Guidance.--The Secretary of Labor (in this title 
        referred to as the ``Secretary'') shall issue regulations or 
        other guidance to carry out this subsection, including--
                    (A) guidelines for determining the classes or 
                categories of employees to be covered by a USA 
                Retirement Fund;
                    (B) guidelines requiring employers to specify the 
                classification or categories of employees (if any) who 
                are excluded from the USA Retirement Fund; and
                    (C) rules to prevent avoidance of the requirements 
                of this section.
    (d) Automatic USA Retirement Fund Arrangement.--For purposes of 
this title--
            (1) In general.--The term ``automatic USA Retirement Fund 
        arrangement'' means an arrangement of an employer (determined 
        without regard to whether the employer is required to maintain 
        the arrangement)--
                    (A) that covers each qualifying employee of the 
                covered employer for the calendar year;
                    (B) under which a qualifying employee--
                            (i) may elect--
                                    (I) to contribute to an automatic 
                                USA Retirement Fund by having the 
                                employer deposit payroll deduction 
                                amounts or make other periodic direct 
                                deposits (including electronic 
                                payments) to the Fund; or
                                    (II) to have such payments paid to 
                                the employee directly in cash;
                            (ii) is treated as having made the election 
                        under clause (i)(I) in the amount specified in 
                        paragraph (4) unless the individual 
                        specifically elects not to have such 
                        contributions made (or specifically elects to 
                        have such contributions made at a different 
                        percentage or in a different amount); and
                            (iii) not more than once per calendar year, 
                        may elect to modify the selection of the USA 
                        Retirement Fund to which contributions are made 
                        for such year; and
                    (C) that meets the administrative requirements of 
                paragraph (3), including the notice requirement of 
                paragraph (3)(C).
            (2) Automatic re-enrollment.--An employee's election not to 
        contribute to a USA Retirement Fund (or to have such 
        contributions made at a different percentage or in a different 
        amount from those specified in paragraph (4)) shall expire 
        after 2 years. After such 2-year period and absent a new 
        election, the employee shall be treated as having made the 
        election under paragraph (1)(B)(i)(I) in the amount specified 
        in paragraph (4).
            (3) Administrative requirements.--
                    (A) Payments.--An employer shall make the payments 
                elected or treated as elected under paragraph (1)(B) on 
                or before--
                            (i) the last day of the month following the 
                        month in which the compensation otherwise would 
                        have been payable to the employee in cash; or
                            (ii) such later date as the Secretary may 
                        prescribe.
                    (B) Termination of employee participation.--Subject 
                to a requirement for reasonable notice, an employee may 
                elect to terminate participation in the arrangement at 
                any time during a calendar year. The arrangement may 
                provide that, if an employee so terminates 
                participation, the employee may not elect to resume 
                participation until the beginning of the next calendar 
                year.
                    (C) Notice of election period.--The employer shall 
                notify each employee eligible to participate for a year 
                in a USA Retirement Fund arrangement, within a 
                reasonable period of time before the 30th day before 
                the beginning of such year (and, for the first year the 
                employee is so eligible, the 30th day before the first 
                day such employee is so eligible), of--
                            (i) the payments that may be elected or 
                        treated as elected under paragraph (1)(B);
                            (ii) the opportunity to make the election 
                        to terminate participation in the arrangement 
                        under subparagraph (B);
                            (iii) the opportunity to make the election 
                        under paragraph (1)(B)(ii) to have 
                        contributions or purchases made at a different 
                        percentage or in a different amount; and
                            (iv) the opportunity under paragraph 
                        (1)(B)(iii) to modify the manner in which such 
                        amounts are invested for such year.
                    (D) Employees may choose usa retirement fund.--The 
                arrangement shall provide that a qualified employee may 
                elect to have contributions made to any USA Retirement 
                Fund available to the employee.
            (4) Amount of contributions and payments.--The amount 
        specified in this paragraph is--
                    (A) 3 percent of compensation for the calendar year 
                beginning on January 1, 2019;
                    (B) 4 percent of compensation for the calendar year 
                beginning on January 1, 2020;
                    (C) 5 percent of compensation for the calendar year 
                beginning on January 1, 2021; and
                    (D) 6 percent of compensation for calendar years 
                beginning after December 31, 2021.
            (5) Coordination with withholding.--The Secretary of the 
        Treasury shall modify the withholding exemption certificate 
        under section 3402(f) of the Internal Revenue Code of 1986 so 
        that, in the case of any qualifying employee covered by a USA 
        Retirement Fund arrangement, any notice and election 
        requirements with respect to the arrangement may be met through 
        the use of an attachment to such certificate or other 
        modifications of the withholding exemption procedures.
    (e) Deposits to USA Retirement Funds.--
            (1) In general.--Except as provided in paragraph (2), an 
        employer shall make all contributions on behalf of employees to 
        the USA Retirement Fund specified by the employee.
            (2) USA retirement funds other than those selected by 
        employee.--In the absence of an affirmative selection of a USA 
        Retirement Fund by the employee, contributions on behalf of the 
        employee shall be made to the USA Retirement Fund designated by 
        the employer.
            (3) Regulations.--The Secretary may issue such regulations 
        as are necessary to carry out this subsection.
    (f) Preemption of Conflicting State Laws.--The requirements under 
this section preempt any law of a State that directly or indirectly 
prohibits or restricts the establishment or operation of an automatic 
USA Retirement Fund arrangement. Nothing in this section shall be 
construed to impair or preempt any State law to the extent such State 
law provides a remedy for the failure to make payroll deposit payments 
under any such automatic USA Retirement Fund arrangement within the 
period required.

SEC. 3. ESTABLISHMENT OF USA RETIREMENT FUNDS.

    (a) Qualification as a USA Retirement Fund.--For purposes of this 
title--
            (1) In general.--The term ``USA Retirement Fund'' means a 
        fund for which the Secretary has determined the requirements 
        under this title are met.
            (2) Request for determination.--The board of trustees of a 
        program established for purposes of being treated as a USA 
        Retirement Fund under this section shall, prior to beginning 
        operations, submit to the Secretary (at such time and in such 
        manner as the Secretary may prescribe) a request for the 
        Secretary to make a determination as to whether the plan meets 
        the requirements of this title for such treatment. Such request 
        shall include copies of the written documents establishing the 
        plan and such other materials as the Secretary may request. The 
        Secretary shall make such determination within 180 days of 
        receiving such request.
            (3) Periodic review.--The Secretary shall establish a 
        process to periodically review each plan determined to be a USA 
        Retirement Fund under paragraph (1) to ensure that the plan 
        continues to meet the requirements of this title.
            (4) Public list of plans.--The Secretary shall maintain a 
        public list of plans determined by the Secretary to qualify as 
        USA Retirement Funds. Such list shall be posted to a publicly 
        available Internet website.
    (b) Participation.--
            (1) Eligibility.--An individual may participate in any USA 
        Retirement Fund for which such individual meets the eligibility 
        requirements, individually or through an arrangement 
        established by an employer.
            (2) Participation in other plans.--An individual who 
        participates in a USA Retirement Fund shall not be precluded 
        from participating in a plan or arrangement described in 
        section 219(g)(5) of the Internal Revenue Code of 1986.
    (c) Governance.--
            (1) Assets held in trust; board of trustees.--For purposes 
        of this title--
                    (A) the assets of each USA Retirement Fund shall be 
                held in trust; and
                    (B) the Fund shall be governed by a board of 
                trustees which shall consist of at least 3 individuals 
                who--
                            (i) are independent of service providers to 
                        the Fund;
                            (ii) meet the qualification requirements 
                        established under this section; and
                            (iii) are collectively able to adequately 
                        represent the interests of active participants, 
                        retirees, and contributing employers.
            (2) Independence requirement.--An individual is not 
        independent of Fund service providers for purposes of paragraph 
        (1)(B)(i) if such individual--
                    (A) is an employee of any Fund service provider;
                    (B) is a current or former officer or director of a 
                significant Fund service provider, or is otherwise 
                affiliated with such a provider;
                    (C) is a member of the immediate family of any 
                person who is affiliated with a significant Fund 
                service provider;
                    (D) derives more than 1 percent of the individual's 
                annual income from a significant Fund service provider;
                    (E) derives more than 5 percent of the individual's 
                annual income from any Fund service provider; or
                    (F) fails to meet such other criteria as are 
                specified by the Secretary to ensure the independence 
                of the board of directors.
            (3) Multiple trusteeships.--No individual may serve on the 
        board of trustees of more than 1 USA Retirement Fund unless the 
        Secretary receives attestation from the board of trustees of 
        each applicable USA Retirement Fund and the individual that, at 
        the time of appointment, there is no reasonably foreseeable 
        conflict between the duties of such individual to the 
        participants in each applicable USA Retirement Fund. In no case 
        may an individual serve on the boards of trustees of more than 
        3 USA Retirement Funds.
            (4) Trustee qualifications.--Each trustee of a USA 
        Retirement Fund shall attest that the trustee is knowledgeable 
        of the trustee's duties and responsibilities as a fiduciary of 
        a USA Retirement Fund. The Secretary may require by regulation 
        such other qualifications and documentation as may be necessary 
        to ensure that trustees are suitable and qualified. Such 
        requirements may include those related to education, training, 
        and minimum competency standards.
            (5) Trustee selection and removal.--
                    (A) In general.--Each board of trustees of a USA 
                Retirement Fund shall establish written procedures 
                regarding the appointment, removal, and replacement of 
                trustees on the board. Such procedures shall--
                            (i) take effect after adoption by the 
                        majority of the board of trustees;
                            (ii) be readily available to participants;
                            (iii) provide participants with a 
                        reasonable opportunity to comment on, or 
                        participate in, the trustee selection process; 
                        and
                            (iv) provide for periodic election of 
                        trustees.
                    (B) Removal by the secretary.--The Secretary may 
                require removal or suspension of a trustee if the 
                conduct of the trustee is fraudulent or is causing, or 
                can be reasonably expected to cause, significant, 
                imminent, and irreparable harm to the participants or 
                beneficiaries of a USA Retirement Fund.
                    (C) Funds without qualified trustees.--If a board 
                of trustees of a USA Retirement Fund has no members 
                meeting the criteria under this subsection, the 
                Secretary shall appoint replacement trustees.
            (6) Trustee compensation.--Trustees of the Fund may be 
        compensated at reasonable rates from the Fund, but only if such 
        compensation is paid in accordance with the written board 
        compensation policy adopted under paragraph (7)(A)(iv).
            (7) Transparency and participant democracy.--
                    (A) Publicly available policies.--The board of 
                trustees of a USA Retirement Fund shall adopt and make 
                available to participants and beneficiaries of, and 
                employers contributing to, the USA Retirement Fund--
                            (i) a written investment policy statement;
                            (ii) a written lifetime income policy 
                        statement;
                            (iii) an annual performance assessment of 
                        the board of trustees, including an evaluation 
                        of weaknesses of the board and a plan to 
                        address such weaknesses;
                            (iv) a written board compensation policy 
                        that includes current compensation levels and 
                        provides a reasonable opportunity for comment 
                        from participants, beneficiaries, and 
                        employers; and
                            (v) a written policy addressing conflicts 
                        of interests with respect to trustees.
                    (B) Participant input regarding board of 
                trustees.--
                            (i) In general.--The board of trustees of a 
                        USA Retirement Fund shall establish procedures 
                        whereby a participant or beneficiary of such 
                        USA Retirement Fund may--
                                    (I) petition the board of trustees 
                                to remove a trustee or service 
                                provider;
                                    (II) comment on the management and 
                                administration of the USA Retirement 
                                Fund; and
                                    (III) with respect to a USA 
                                Retirement Fund with more than 
                                $250,000,000 of assets, vote to approve 
                                or disapprove the compensation of the 
                                trustees at least once every 3 years.
                            (ii) Effect of vote.--If participants and 
                        beneficiaries of a USA Retirement Fund vote to 
                        disapprove the compensation of trustees under 
                        clause (i)(III)--
                                    (I) the results of such vote shall 
                                not be binding on the board of 
                                trustees; and
                                    (II) the board of trustees shall 
                                notify the Secretary of the results of 
                                such vote and provide an explanation of 
                                why the compensation is reasonable or 
                                anticipated changes to the 
                                compensation.
            (8) Liability insurance for trustees.--The trustees of each 
        USA Retirement Fund shall have fiduciary liability insurance 
        with a per-claim limit equal to no less than the greater of--
                    (A) 5 percent of plan assets; or
                    (B) $1,000,000.
            (9) Trustee duties.--
                    (A) In general.--The trustees of a USA Retirement 
                Fund shall manage the Fund with the intention of 
                providing each participant with a cost-effective stream 
                of income in retirement and reducing benefit level 
                volatility (particularly for those approaching 
                retirement).
                    (B) Applicability of other requirements.--Each 
                trustee of a USA Retirement Fund shall be a fiduciary 
                subject to sections 404(a), 404(b), 405, 406, and 408 
                through 413 of the Employee Retirement Income Security 
                Act of 1974 with respect to the Fund and participants 
                and beneficiaries of the Fund. Each such trustee shall 
                be subject to the standards and remedies of such 
                sections and section 502 of such Act, as if the Fund 
                were an employee benefit plan.
    (d) Contribution Limitations.--
            (1) Employer.--Subject to paragraph (3), employers may, in 
        addition to contributions an employee elects (or is treated as 
        having elected) to have made, make a contribution of up to 
        $5,000 per year to a USA Retirement Fund on behalf of each 
        employee eligible to participate in a USA Retirement Fund, 
        provided such contributions are made in a uniform manner (as 
        the same dollar amount for each such employee or the same 
        percentage of pay for each such employee) and are not intended 
        to benefit solely highly compensated employees.
            (2) Employee.--An employee may not elect (or shall not be 
        treated as having as elected) to contribute more than $15,000 
        per year to a USA Retirement Fund.
            (3) Annual indexing of amount.--The dollar amounts under 
        paragraphs (1) and (2) shall be indexed annually for inflation.
    (e) Benefits in the Form of an Annuity.--
            (1) In general.--A USA Retirement Fund shall pay benefits 
        in the form of an annuity in accordance with paragraph (2). The 
        amount of such benefits shall be dependent on the amount of 
        contributions made by the participant, the experience of the 
        Fund, and the form of distribution elected by the participant. 
        The amount of an annuity may be adjusted to reflect the 
        experience of the Fund as necessary to protect the financial 
        integrity of the Fund, except that annuity payments for those 
        in pay status shall not be reduced more than 5 percent per year 
        unless the Fund is faced with a significant financial hardship 
        and the Secretary has approved the reduction.
            (2) Annuity.--A USA Retirement Fund shall pay benefits in 
        accordance with one of the following:
                    (A) In the case of a participant who does not die 
                before the annuity starting date, the benefit payable 
                to such participant shall be provided in the form of a 
                qualified joint and survivor annuity (as defined in 
                section 205(d)(1) of the Employee Retirement Income 
                Security Act of 1974 (29 U.S.C. 1055(d)(1))).
                    (B) In the case of a participant who dies before 
                the annuity starting date and who has a surviving 
                spouse, a qualified preretirement survivor annuity (as 
                defined in section 205(d)(2) of the Employee Retirement 
                Income Security Act of 1974 (29 U.S.C. 1055(d)(2))) 
                shall be provided to the surviving spouse of such 
                participant.
                    (C) In lieu of a qualified joint and survivor 
                annuity form of benefit or the qualified preretirement 
                survivor annuity form of benefit (or both), a 
                participant may elect to receive a distribution 
                described in subsection (f)(2) if one of the following 
                conditions are met:
                            (i)(I) The spouse of the participant 
                        consents in writing to the election.
                            (II) Such election designates a beneficiary 
                        (or form of benefits) which may not be changed 
                        without spousal consent (or the consent of the 
                        spouse expressly permits designations by the 
                        participant without any requirement of further 
                        consent by the spouse).
                            (III) The spouse's consent acknowledges the 
                        effect of such election and is witnessed by a 
                        plan representative or a notary public.
                            (ii) It is established to the satisfaction 
                        of a Fund representative that the consent 
                        required under subclause (I) cannot be obtained 
                        because there is no spouse, because the spouse 
                        cannot be located, or because of such other 
                        circumstances as the Secretary may by 
                        regulations prescribe.
                The consent of a spouse (or establishment that the 
                consent of a spouse cannot be obtained) under this 
                subparagraph shall be effective only with respect to 
                such spouse.
            (3) Commencement of benefit payments.--A participant may 
        elect the time to start receiving benefit payments from the USA 
        Retirement Fund, except that a participant--
                    (A) except as provided in subsection (f)(2)(B), may 
                not elect to receive benefit payments before reaching 
                the age of 60; and
                    (B) must begin receiving benefit payments before 
                the age of 72.
            (4) Notice.--Each Fund shall provide to each participant, 
        within a reasonable period of time before the annuity starting 
        date, a written explanation substantially similar to that 
        required by section 205(c)(3) of the Employee Retirement Income 
        Security Act of 1974 (29 U.S.C. 1055(c)(3)).
            (5) Assignment or alienation of fund benefits.--Benefits 
        under a USA Retirement Fund shall be subject to section 206(d) 
        of the Employee Retirement Income Security Act of 1974 (29 
        U.S.C. 1056(d)).
    (f) Limits on Withdrawals and Transfers.--
            (1) Transfers.--A participant may, not more frequently than 
        once per year, transfer such participant's benefit to another 
        USA Retirement Fund.
            (2) Limits on distributions.--
                    (A) In general.--Except as provided in 
                subparagraphs (B) and (C), a participant may not take a 
                distribution other than one described in subsection 
                (e)(2).
                    (B) Participants aged 59 and younger.--A 
                participant may before age 60 take a distribution of a 
                portion of the participant's benefit if such 
                distribution does not to exceed $5,500 and is rolled 
                over to a qualifying plan or arrangement described in 
                section 219(g)(5) of the Internal Revenue Code of 1986 
                or an individual retirement plan.
                    (C) Participants aged 60 and older.--A participant 
                who is 60 or older but who has not entered pay status 
                may elect one time to take a distribution of the 
                greater of $10,000 or 50 percent of the participant's 
                benefit if the participant demonstrates to the 
                satisfaction of the trustees of the Fund that the 
                participant has sufficient retirement income apart from 
                the Fund or is facing a substantial hardship.
    (g) Methods for Providing Annuitized Benefit Payments.--
            (1) In general.--A USA Retirement Fund shall establish and 
        maintain mechanisms for adequately securing the payment of 
        annuity benefits from the Fund. The Fund shall include a 
        written description of such mechanisms in the investment and 
        lifetime income policy statements required to be disclosed to 
        participants.
            (2) Specific goals.--The mechanisms described in paragraph 
        (1) shall ensure that--
                    (A) each participant receives a stream of income 
                for life;
                    (B) each participant and beneficiary has an 
                opportunity to be protected against longevity risk; and
                    (C) volatility in benefit levels is minimized for 
                participants and beneficiaries in pay status and those 
                approaching pay status.
            (3) Self-annuitization.--
                    (A) In general.--Notwithstanding any other 
                provision of law, a USA Retirement Fund may self-
                annuitize if the Fund meets such requirements as the 
                Secretary establishes as necessary to protect 
                participants and beneficiaries in consideration of the 
                recommendations of the Commission under section 103.
                    (B) Duty to address emerging issues.--The Secretary 
                shall, periodically and in accordance with established 
                procedures, update the funding requirements promulgated 
                under this paragraph in response to changing economic 
                and business conditions to the extent necessary to 
                carry out the purposes of this Act, taking into 
                consideration the recommendations of the Commission.
    (h) Reporting and Disclosure.--
            (1) Annual statement.--The trustees of a USA Retirement 
        Fund shall provide each participant in the Fund an annual 
        statement of--
                    (A) the estimated amount of the monthly benefit 
                which the participant or beneficiary is projected to 
                receive from the USA Retirement Fund, in the form of 
                the default benefit described in the plan in accordance 
                with subsection (e)(2);
                    (B) an explanation, written in a manner calculated 
                to be understood by the average plan participant, that 
                includes interest and mortality assumptions used in 
                calculating the estimate and a statement that actual 
                benefits may be materially different from such 
                estimate;
                    (C) a disclosure of Fund fees and performance that 
                is substantially similar to the disclosures required of 
                individual account plans under the Employee Retirement 
                Income Security Act of 1974;
                    (D) any other disclosures, including projected 
                benefit estimates, that the board of trustees of the 
                USA Retirement Fund determines appropriate; and
                    (E) such other disclosures as may be required by 
                the Secretary.
            (2) Summary plan description.--The trustees of a USA 
        Retirement Fund shall provide participants a summary plan 
        description (as described in section 102 of the Employee 
        Retirement Income Security Act (29 U.S.C. 1022)) as required by 
        section 104(b) of the Employee Retirement Income Security Act 
        (29 U.S.C. 1024(b)).
            (3) Annual reports.--The trustees of a USA Retirement Fund 
        shall file with the Secretary of Labor periodic reports in 
        accordance with regulations promulgated by the Secretary.
            (4) Additional requirements.--Each USA Retirement Fund 
        shall be subject to sections 106 and 107 of the Employee 
        Retirement Income Security Act of 1974 (29 U.S.C. 1026, 1027).
    (i) Tax Treatment.--
            (1) USA retirement fund.--A USA Retirement Fund is exempt 
        from taxation under subtitle A of the Internal Revenue Code of 
        1986. Notwithstanding the preceding sentence, a USA Retirement 
        Fund is subject to the taxes imposed by section 511 of such 
        Code (relating to imposition of tax on unrelated business 
        income of charitable, etc. organizations).
            (2) Contributions.--In the case of an individual, there 
        shall be allowed as a deduction for the taxable year an amount 
        equal to the amount of contributions to a USA Retirement Fund 
        made by or on behalf of the individual under an automatic USA 
        Retirement Fund arrangement under section 2(d).
            (3) Rollover contributions.--For purposes of this Act, 
        rules similar to the rules of subparagraphs (A) and (D) of 
        section 408(d)(3) of the Internal Revenue Code of 1986 shall 
        apply.
            (4) Distributions.--Any distribution from a USA Retirement 
        Fund shall be includible in the gross income of the distributee 
        in the manner as provided in section 72 of the Internal Revenue 
        Code of 1986.
            (5) Prohibited transactions, etc.--For purposes of this 
        Act, rules similar to the rules of paragraphs (2), (3), and (4) 
        of section 408(e)(2) of the Internal Revenue Code of 1986 shall 
        apply.
            (6) Reports.--The trustees of a USA Retirement Fund shall 
        make such reports regarding such Fund to the Secretary of the 
        Treasury and to designated beneficiaries with respect to 
        contributions, distributions, and such other matters as the 
        Secretary of the Treasury may require. The reports required by 
        this paragraph shall be filed at such time and in such manner 
        and furnished to such individuals at such time and in such 
        manner as may be required by the Secretary of the Treasury.

SEC. 4. COMMISSION ON USA RETIREMENT FUNDS.

    (a) Recognition of Private Commission.--The Secretary shall--
            (1) recognize an independent, private commission, to be 
        known as the ``Commission for USA Retirement Funds Funding'' 
        (referred to in this title as the ``Commission''); and
            (2) in carrying out the Secretary's duties under this 
        title, consider the recommendations of such Commission.
    (b) Commission.--The Commission recognized under subsection (a) 
shall meet the following requirements:
            (1) Membership.--
                    (A) Composition.--The Commission shall be composed 
                of 9 members selected by the Secretary, in consultation 
                with the Secretary of the Treasury, of whom no more 
                than 5 may be from one political party. The Secretary 
                shall designate one member of the Commission as the 
                Chairman. No person may be appointed to the Commission 
                if, during the 2-year period preceding the date of 
                appointment, such person was a trustee of a USA 
                Retirement Fund.
                    (B) Date.--The appointments of the members of the 
                Commission shall be made not later than 90 days after 
                the date of enactment of this Act.
                    (C) Period of appointment; vacancies.--Members 
                shall be appointed for terms of 2 years and may be 
                appointed for consecutive terms. Any vacancy in the 
                Commission shall not affect its powers, and shall be 
                filled in the same manner as the original appointment.
            (2) Majority vote.--The Commission may act by majority vote 
        of its members, provided that at least 7 members are present.
            (3) Commission personnel matters.--
                    (A) Compensation of members.--Each member of the 
                Commission who is not an officer or employee of the 
                Federal Government shall be compensated at a rate equal 
                to the daily equivalent of the annual rate of basic pay 
                prescribed for level IV of the Executive Schedule under 
                section 5315 of title 5, United States Code, for each 
                day (including travel time) during which such member is 
                engaged in the performance of the duties of the 
                Commission. All members of the Commission who are 
                officers or employees of the United States shall serve 
                without compensation in addition to that received for 
                their services as officers or employees of the United 
                States.
                    (B) Travel expenses.--The members of the Commission 
                shall be allowed travel expenses, including per diem in 
                lieu of subsistence, at rates authorized for employees 
                of agencies under subchapter I of chapter 57 of title 
                5, United States Code, while away from their homes or 
                regular places of business in the performance of 
                services for the Commission.
                    (C) Staff.--
                            (i) In general.--The Chairman of the 
                        Commission may, without regard to the civil 
                        service laws and regulations, appoint and 
                        terminate an executive director and such other 
                        additional personnel as may be necessary to 
                        enable the Commission to perform its duties. 
                        The employment of an executive director shall 
                        be subject to confirmation by the Commission.
                            (ii) Compensation.--The Chairman of the 
                        Commission may fix the compensation of the 
                        executive director and other personnel without 
                        regard to chapter 51 and subchapter III of 
                        chapter 53 of title 5, United States Code, 
                        relating to classification of positions and 
                        General Schedule pay rates, except that the 
                        rate of pay for the executive director and 
                        other personnel may not exceed the rate payable 
                        for level V of the Executive Schedule under 
                        section 5316 of such title.
                            (iii) Detail of government employees.--Any 
                        Federal Government employee may be detailed to 
                        the Commission without reimbursement, and such 
                        detail shall be without interruption or loss of 
                        civil service status or privilege.
                            (iv) Procurement of temporary and 
                        intermittent services.--The Chairman of the 
                        Commission may procure temporary and 
                        intermittent services under section 3109(b) of 
                        title 5, United States Code, at rates for 
                        individuals which do not exceed the daily 
                        equivalent of the annual rate of basic pay 
                        prescribed for level V of the Executive 
                        Schedule under section 5316 of such title.
            (4) Recommendations and regulations on funding and 
        distribution requirements.--
                    (A) In general.--After taking into consideration 
                the recommendations of the Commission and providing the 
                public notice and an opportunity for comment, the 
                Secretary shall promulgate regulations with respect to 
                funding and distribution requirements for USA 
                Retirement Funds, as necessary or appropriate in the 
                public interest and for the protection of participants 
                and beneficiaries, including regulations described in 
                subparagraphs (B) and (C).
                    (B) Requirements relating to annuity payments made 
                directly by a fund.--The regulations under subparagraph 
                (A) shall provide that in the case of annuity payments 
                made directly by the Fund--
                            (i) the maximum annuity payment for a 
                        participant or beneficiary shall be determined 
                        using the mortality tables and interest rates 
                        prescribed by the Secretary under subparagraph 
                        (C) at the time benefits commence; and
                            (ii) the level of benefits paid may be 
                        adjusted periodically in order to reflect the 
                        mortality experience and the investment 
                        experience of the Fund, but only after the Fund 
                        has obtained a certification from a member of 
                        the American Academy of Actuaries that the 
                        adjustment is sustainable for the remaining 
                        lifetime of participants then receiving 
                        benefits, based on the mortality tables and 
                        interest rates prescribed under subparagraph 
                        (C) by the Secretary for that time.
                    (C) Mortality tables and interest rates used 
                requirements.--The regulations promulgated under 
                subparagraph (A) shall include the following:
                            (i) Mortality tables.--
                                    (I) In general.--The Secretary 
                                shall prescribe mortality tables to be 
                                used in determining annuity payments 
                                made directly by the Fund. Such tables 
                                shall be based on the actual experience 
                                of insurance companies that issue group 
                                annuities and projected trends in such 
                                experience. In prescribing such tables, 
                                the Secretary shall take into account 
                                results of available independent 
                                studies of the mortality of individuals 
                                receiving annuities under group annuity 
                                contracts.
                                    (II) Periodic revisions of 
                                mortality tables.--The Secretary shall 
                                make revisions, to become effective as 
                                soon as practicable, in any mortality 
                                table in effect to reflect more recent 
                                actual experience of insurance 
                                companies that issue group annuities 
                                and projected trends in such 
                                experience. In revising such tables, 
                                the Secretary shall take into account 
                                the results of more recent available 
                                independent studies of the mortality 
                                and projected trends of individuals 
                                receiving annuities under group annuity 
                                contracts.
                            (ii) Interest rates.--The Secretary shall 
                        prescribe interest rates to be used in 
                        determining annuity payments made directly by 
                        the Fund. Such rates shall be based on the 
                        yields on investment grade corporate bonds with 
                        varying maturities and that are in the top 3 
                        quality levels available. Interest rates shall 
                        be prescribed quarterly or more frequently, as 
                        determined by the Secretary.
            (5) Duty to address best practices.--The Commission shall 
        prepare, and periodically update, a report that describes the 
        best practices for the governance of boards of trustees of USA 
        Retirement Funds, including board of trustee composition, 
        appointment procedures, term length, term staggering, trustee 
        qualifications, delegation of duties, and performance 
        assessment procedures.

SEC. 5. LIMITATION ON EMPLOYER LIABILITY.

    Section 404 of the Employee Retirement Income Security Act of 1974 
(29 U.S.C. 1021 et seq.) is amended by adding at the end the following:
    ``(e) An employer shall not be a fiduciary with respect to the 
selection, management or administration of a USA Retirement Fund solely 
because such employer makes available such Fund through an automatic 
USA Retirement Fund arrangement. Notwithstanding the preceding 
sentence, employers participating in a USA Retirement Fund shall be 
responsible for meeting the enrollment requirements and transmitting 
contributions, as required under the USA Retirement Funds Act.''.

SEC. 6. ENFORCEMENT AND FRAUD PREVENTION.

    (a) Penalty for Failure To Timely Remit Contributions to Automatic 
USA Retirement Fund Arrangements.--
            (1) In general.--If an employer is required under an 
        automatic USA Retirement Fund arrangement to deposit amounts 
        withheld from an employee's compensation into a USA Retirement 
        Fund but fails to do so within the time prescribed under 
        section 2(d)(3), such amounts shall be treated as assets of a 
        USA Retirement Fund.
            (2) Failure to provide access to payroll savings 
        arrangements.--
                    (A) General rule.--A covered employer who fails to 
                meet the requirements of section 2(a) for a calendar 
                year shall be subject to a civil money penalty of $100 
                per calendar year for each employee to whom such 
                failure relates.
                    (B) Exceptions.--No civil money penalty shall be 
                imposed under this paragraph for a failure to meet the 
                requirements under section 2(a)--
                            (i) during a period for which the Secretary 
                        determines that the employer subject to 
                        liability for the civil money penalty did not 
                        know that the failure existed and exercised 
                        reasonable diligence to meet the requirements 
                        of section 2(a); or
                            (ii)(I) the employer subject to liability 
                        for the civil money penalty exercised 
                        reasonable diligence to meet the requirements 
                        of section 2(a); and
                            (II) the employer provides the automatic 
                        USA Retirement Fund arrangement described to 
                        each employee eligible to participate in the 
                        arrangement by the end of the 90-day period 
                        beginning on the first date the employer knew, 
                        or exercising reasonable diligence should have 
                        known, that such failure existed.
                    (C) Waiver by the secretary.--In the case of a 
                failure to meet the requirements of section 2(a) that 
                is due to reasonable cause and not to willful neglect, 
                the Secretary may, in the sole discretion of the 
                Secretary, waive part or all of the civil money penalty 
                imposed under this paragraph to the extent that the 
                payment of such civil money penalty would be excessive 
                or otherwise inequitable relative to the failure 
                involved.
                    (D) Procedures for notice.--The Secretary may 
                prescribe and implement procedures for obtaining 
                confirmation that employers are in compliance with 
                subsection (a). The Secretary, in the discretion of 
                such Secretary, may prescribe that the confirmation 
                shall be obtained on an annual or less frequent basis, 
                and may use for this purpose the annual report or 
                quarterly report for employment taxes, or such other 
                means as the Secretary may deem advisable.
    (b) Civil Actions and Enforcement.--
            (1) Administration and enforcement.--Part 5 of title I of 
        the Employee Retirement Income Security Act of 1974 (29 U.S.C. 
        1132 et seq.) shall apply to a USA Retirement Fund as if a USA 
        Retirement Fund were an employee benefit plan.
            (2) Amendment.--Section 502(a) of the Employee Retirement 
        Income Security Act of 1974 (29 U.S.C. 1132 et seq.) is 
        amended--
                    (A) in paragraph (10), by striking ``; or'' and 
                inserting ``;'';
                    (B) in paragraph (11), by striking the period at 
                the end and inserting ``; or''; and
                    (C) by adding at the end the following:
            ``(12) in the event that an employer fails to make timely 
        contributions or payments to a USA Retirement Fund established 
        under title I of the USA Retirement Funds Act, by the 
        Secretary, a participant, a beneficiary, or a fiduciary, to 
        compel an employer to make such contributions or payments as if 
        such contributions or payments were delinquent contributions or 
        payments under section 515 or subsection (g)(2).''.
            (3) Non-preemption of certain state law.--Nothing in this 
        section shall preempt State law insofar as State law relates to 
        the enforcement of an obligation to contribute to a USA 
        Retirement Fund.
    (c) False Statements.--
            (1) In general.--No person, in connection with a plan or 
        other arrangement that is or purports to be a USA Retirement 
        Fund, shall make a false statement or false representation of 
        fact, knowing it to be false, in connection with the marketing 
        or sale of such plan or arrangement, to any employee, any 
        member of an employee organization, any beneficiary, any 
        employer, any employee organization, the Secretary, or any 
        State, or the representative or agent of any such person, 
        State, or the Secretary, concerning--
                    (A) the financial condition or solvency of such 
                fund or arrangement;
                    (B) the benefits provided by such fund or 
                arrangement;
                    (C) the regulatory status of such fund or other 
                arrangement under any Federal or State law governing 
                collective bargaining, labor management relations, or 
                intern union affairs; or
                    (D) the regulatory status of such fund or other 
                arrangement.
            (2) Penalty.--Any person who violates this subsection 
        shall, upon conviction, be imprisoned not more than 10 years or 
        fined under title 18, United States Code, or both.
    (d) Cease and Desist Orders.--
            (1) Issuance of order.--The Secretary may issue a cease and 
        desist (ex parte) order under this title if the Secretary 
        determines that the alleged conduct of a fund purporting to be 
        a USA Retirement Fund is fraudulent, or creates an immediate 
        danger to the public safety or welfare, or is causing or can be 
        reasonably expected to cause significant, imminent, and 
        irreparable public injury.
            (2) Hearings.--
                    (A) In general.--A person who is adversely affected 
                by the issuance of a cease and desist order under 
                paragraph (1) may request a hearing by the Secretary 
                regarding such order. The Secretary may require that a 
                hearing under this paragraph, including all related 
                information and evidence, be conducted in a 
                confidential manner.
                    (B) Burden of proof.--The burden of proof in any 
                hearing conducted under subparagraph (A) shall be on 
                the party requesting the hearing to show cause why the 
                cease and desist order should be set aside.
                    (C) Determination.--Based upon the evidence 
                presented at a hearing under subparagraph (A), the 
                Secretary may affirm, modify, or set aside the cease 
                and desist order at issue, in whole or in part.
            (3) Regulations.--The Secretary may promulgate such 
        regulations or other guidance as may be necessary or 
        appropriate to carry out this subsection.
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