Title: Expanding Access to Retirement Act of 2019
Policy area: Labor and Employment

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.

[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[S. 1927 Introduced in Senate (IS)]

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116th CONGRESS
  1st Session
                                S. 1927

   To amend the Employee Retirement Income Security Act of 1974 with 
  respect to association retirement plans and other multiple employer 
                         pension benefit plans.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             June 20, 2019

  Mr. Kennedy introduced the following bill; which was read twice and 
  referred to the Committee on Health, Education, Labor, and Pensions

_______________________________________________________________________

                                 A BILL


 
   To amend the Employee Retirement Income Security Act of 1974 with 
  respect to association retirement plans and other multiple employer 
                         pension benefit plans.

    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 ``Expanding Access to Retirement Act 
of 2019''.

SEC. 2. DEFINITION OF ``EMPLOYER'' FOR PURPOSES OF ASSOCIATION 
              RETIREMENT PLANS AND OTHER MULTIPLE EMPLOYER PENSION 
              BENEFIT PLANS.

    (a) Definition of Employer.--Section 3(5) of the Employee 
Retirement Income Security Act of 1974 (29 U.S.C. 1002(5)) is amended 
by striking the period and inserting ``(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) is 
amended by adding at the end the following:
            ``(43)(A) The term `bona fide group or association of 
        employers' means a group or association of employers that meets 
        all of the following requirements:
                    ``(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' is 
                        considered to exist if the group or association 
                        would be a viable entity in the absence of 
                        sponsoring an employee benefit plan; and
                            ``(ii) a `business purpose' includes 
                        promoting common business interests of the 
                        group's or association's members or the common 
                        economic interests in a given trade or employer 
                        community and is not required to be a for-
                        profit activity.
                    ``(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' means any person who a responsible plan 
                fiduciary reasonably determines is an individual--
                            ``(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), as 
amended by subsection (b), is further amended by adding at the end the 
following:
            ``(44)(A) The term `bona fide professional employer 
        organization' means a human resource company that contractually 
        assumes certain employer responsibilities of employers who are 
        clients of the organization (referred to in this paragraph as 
        `client employers') and that meets all of the following 
        requirements:
                    ``(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) of the Internal Revenue Code 
                        of 1986), has entered into a service contract 
                        (within the meaning of section 7705(e)(2) of 
                        such Code) with respect to its clients that 
                        adopt the defined contribution multiple 
                        employer pension plan.
                            ``(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).''.
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