Pension Security Act of 2003

Bill: 108-hr-1000
Sponsor: Rep. Boehner, John A. [R-OH-8]
Introduced: 2003-02-27 in the House
Policy area: Labor and Employment
Subjects: Administrative procedure
Affiliated corporations
Auditing
Brokers
Business records
Civil Rights and Liberties, Minority Issues
Civil service retirement
Collective bargaining
Commerce
Conflict of interests
Congress
Congressional reporting requirements
Consultants
Corporations
Cost effectiveness
Defined benefit pension plans
Defined contribution plans
Department of Labor
Department of the Treasury
Discrimination
Electronic data interchange
Employee ownership
Employee rights
Excise tax
Executives
Fees
Finance and Financial Sector
Financial institutions
Financial planning
Financial services
Financial statements
Fines (Penalties)
Government Operations and Politics
Government corporations
Government paperwork
Governmental investigations
Income tax
Information disclosure (Securities law)
Insurance companies
Insurance premiums
Interest
Interest rates
Investment advisers
Investments
Labor contracts
Law
Legislation
Liability (Law)
Partnerships
Pension Benefit Guaranty Corporation
Pension funds
Pension portability
Pension trust guaranty insurance
Saving and investment
Science, Technology, Communications
Securities
Securities regulation
Small business
Stocks
Tax exclusion
Tax penalties
Tax returns
Tax-deferred compensation plans
Taxation
Trusts and trustees
Valuation

Summary:
action_date: 2003-02-27
text: Pension Security Act of 2003 - Amends the Employee Retirement Income Security Act of 1974 (ERISA) to require individual account plans (IAPs), including those with cash or deferred arrangements under Internal Revenue Code (IRC) section 401(k), to furnish quarterly pension benefit statements to plan participants and beneficiaries with rights to direct investments.
Provides that employers are not exempt from liability for failing in fiduciary duty with respect to IAP investments during blackout periods if such a period's imposition suspends, limits, or restricts participants' and beneficiaries' ability to direct or diversify their assets.
Directs the Secretary of Labor to establish a program to provide informational and educational support for pension plan fiduciaries.
Amends ERISA and IRC to set forth diversification requirements for IAPs that hold employer securities readily tradable on an established market.
Allows ERISA and IRC prohibited transaction exemptions under specified conditions.
Directs the Secretary of Labor to study, and report to specified congressional committees on, the costs and benefits to participants and beneficiaries of requiring independent fiduciary consultants to advise plan fiduciaries in connection with IAPs.
Amends the IRC to provide that no amount shall be included in the gross income of any employee solely because the employee may choose between any qualified retirement planning services provided by a qualified investment advisor, and compensation which would otherwise be includible in the gross income of such employee.
Amends the Securities Exchange Act of 1934 to prohibit certain insider trading during pension plan transaction suspension periods.
Amends the Retirement Protection Act of 1994 to make permanent an exemption from certain funding rules under the General Agreement on Tariffs and Trade (GATT) for retirement plans sponsored by companies in the interstate bus transportation industry (thereby having ERISA funding rules apply instead).
Directs the Secretaries of the Treasury and of Labor to allow: (1) one-participant retirement plans which meet certain requirements and have assets of $250,000 or less as of the close of the plan year to not file an annual return for that year; and (2) the filing of a simplified annual return for any retirement plan which covers fewer than 25 employees on the first day of a plan year and meets certain other requirements.
Directs the Secretary of the Treasury to continue to update and improve the Employee Plans Compliance Resolution System (or any successor program) giving special attention to specified factors.
Amends IRC and the Taxpayer Relief Act of 1997 to extend to all governmental plans a moratorium on the application of certain nondiscrimination rules applicable to State and local plans.
Amends ERISA to direct the Secretary of the Treasury to modify specified regulations.
Directs the Pension Benefit Guaranty Corporation (PBGC) to issue missing participant rules for multiemployer plans.
Reduces PBGC premiums for new plans of small employers.
Reduces PBGC additional premiums for new and small plans.
Authorizes the PBGC to pay interest on premium overpayment refunds.
Revises rules for substantial owner benefits in terminated plans.
Directs the Secretary of Labor to study and report on model small employer group plans.
action_date: 2003-03-18
text: Pension Security Act of 2003 - 
Title I: Improvements in Pension Security
 - (Sec. 101) Amends the Employee Retirement Income Security Act of 1974 (ERISA) to require individual account plans (IAPs), including those with cash or deferred arrangements under Internal Revenue Code (IRC) section 401(k), to furnish quarterly pension benefit statements to plan participants and beneficiaries with rights to direct investments.
(Sec. 102) Provides that employers are not exempt from liability for failing in fiduciary duty with respect to IAP investments during blackout periods if such a period's imposition suspends, limits, or restricts participants' and beneficiaries' ability to direct or diversify their assets. Exempts an employer from liability for losses during a blackout period that result from participant or beneficiary control of assets prior to the period, if certain requirements are met, including considering the reasonableness of the period, providing notice, and acting solely in the interests of participants and beneficiaries in determining to enter it. Deems a participant or beneficiary to have exercised such prior control if, after reasonable notice of the change in investment options is given before the blackout period, their assets are transferred to plan investment options by their affirmative election or in the manner set forth in the notice. Treats as not imposed as a blackout period any limitations or restrictions on employee ability to divest or diversify assets, if such limitations or restrictions are disclosed to participants and beneficiaries through summary plan descriptions or materials describing specific investment alternatives under the plan.
(Sec. 103) Directs the Secretary of Labor to establish a program to provide informational and educational support for pension plan fiduciaries.
(Sec. 104) Amends ERISA and IRC to set forth diversification requirements for IAPs that hold employer securities readily tradable on an established market. (Exempts from such requirements employee stock ownership plans unless they hold employer stock attributable to employee elective deferrals or employer matching contributions.) Allows participants and beneficiaries, if employer securities are held in an IAP through employee contributions and elective deferrals, to divest such employer securities and reinvest the amounts in other options. Requires employers, if employer securities are held in an IAP through employer contributions, to allow participants and beneficiaries to divest such securities and reinvest in other options; but permits employers to opt to do so in either of the following ways under the plan: (1) after the benefit is based on three years of service as an employee; or (2) with respect to an allocation during a plan year, not more than three years after the end of that plan year. Requires such plans to offer at least: (1) three investment options other than employer securities; and (2) quarterly opportunities to choose among such options. Makes such requirements applicable to assets acquired on or after the effective date of this Act. Requires plans to provide participants and beneficiaries an opportunity to divest assets acquired before such effective date in 20 percent increments over a five-year transition period beginning in 2003, with all of such assets eligible for divestiture beginning in 2007.
(Sec. 105) Allows ERISA and IRC prohibited transaction exemptions under specified conditions, including certain notifications and disclosures, to: (1) a fiduciary adviser's providing certain investment advice to an employee benefit plan or to a participant or beneficiary of such plan; (2) sale, acquisition, or holding of securities or other property (including any lending of money or other extension of credit associated with these) pursuant to such advice; and (3) direct or indirect receipt of fees or other compensation by the fiduciary adviser or an affiliate in connection with providing such advice.
(Sec. 106) Directs the Secretary of Labor to study, and report to specified congressional committees on, the costs and benefits to participants and beneficiaries of requiring independent fiduciary consultants to advise plan fiduciaries in connection with IAPs.
(Sec. 107) Amends the IRC to provide that no amount shall be included in the gross income of any employee solely because the employee may choose between any qualified retirement planning services provided by a qualified investment advisor, and compensation which would otherwise be includible in the gross income of such employee. Applies such provision to highly compensated employees only if such choice is available on substantially the same terms to each member of the group of employees normally provided education and information regarding the employer's qualified employer plan.
(Sec. 108) Amends the Securities Exchange Act of 1934 to prohibit certain insider trading during pension plan transaction suspension periods.

Title II: Additional Provisions
 - (Sec. 201) Amends the Retirement Protection Act of 1994 to make permanent an exemption from certain funding rules under the General Agreement on Tariffs and Trade (GATT) for retirement plans sponsored by companies in the interstate bus transportation industry (thereby having ERISA funding rules apply instead).
(Sec. 202) Directs the Secretaries of the Treasury and of Labor to allow: (1) one-participant retirement plans which meet certain requirements and have assets of $250,000 or less as of the close of the plan year to not file an annual return for that year; and (2) the filing of a simplified annual return for any retirement plan which covers fewer than 25 employees on the first day of a plan year and meets certain other requirements.
(Sec. 203) Directs the Secretary of the Treasury to continue to update and improve the Employee Plans Compliance Resolution System (or any successor program) giving special attention to specified factors. Authorizes the Secretary of the Treasury to effectuate these and any other employee plans correction policies, including waiving income, excise, or other taxes to ensure that any tax, penalty, or sanction is not excessive and bears a reasonable relationship to the nature, extent, and severity of the failure.
(Sec. 204) Directs the Secretary of the Treasury to modify specified IRC rules relating to pension plan nondiscrimination, coverage, and line of business requirements to make them more flexible in certain respects, to the extent the Secretary deems appropriate.
(Sec. 205) Amends IRC and the Taxpayer Relief Act of 1997 to extend to all governmental plans a moratorium on the application of certain nondiscrimination rules applicable to State and local plans.
(Sec. 206) Amends ERISA to direct the Secretary of the Treasury to modify specified regulations to require: (1) that the applicable distribution notice period be not more than 180 (currently 90) and not less than 30 days before the date distribution commences; and (2) the description of a participant's right, if any, to defer receipt of a distribution include a description of the consequences of failing to defer such receipt.
(Sec. 207) Allows summary annual reports on employee benefit plans to be disseminated through electronic means or other new technologies.
(Sec. 208) Revises ERISA with respect to the National Summit on Retirement Savings.
(Sec. 209) Directs the Pension Benefit Guaranty Corporation (PBGC) to issue missing participant rules for multiemployer plans. Allows the transfer of missing participants' benefits to the PBGC upon plan termination in the case of certain plans not subject to the PBGC termination insurance program.
(Sec. 210) Reduces PBGC premiums for new plans of small employers. Sets the flat-rate premium at five dollars per plan participant for the first five years of a new single-employer plan of an employer with 100 or fewer employees.
(Sec. 211) Reduces PBGC additional premiums for new and small plans. Phases in, over a five-year period, the variable-rate premium for a new defined benefit plan. Limits, for a plan maintained by an employer with 25 or fewer employees, the variable-rate premium to no more than five dollars times the number of plan participants at the end of the preceding year.
(Sec. 212) Authorizes the PBGC to pay interest on premium overpayment refunds.
(Sec. 213) Revises rules for substantial owner benefits in terminated plans. Reduces the phase-in periods for guaranteed benefits for a ten-percent or more owner (substantial owner) in the case of plan termination. Applies the allocation of asset rules to a substantial owner with less than 50 percent ownership in the same manner as other participants.
(Sec. 214) Requires the Secretary of Labor to revise specified regulations to require more timely notification of suspension of pension benefits to recipients who return to work for an employer from whose pension plan they are receiving a retirement annuity.
(Sec. 215) Directs the Secretary of Labor to study and report on: (1) model small employer group plans; and (2) the effect of this Act on pension plan coverage.
(Sec. 216) Revises the formula for determining the interest rate range for additional funding requirements for pension plans by the PBGC.

Title III: General Provisions - 
(Sec. 301) Sets forth provisions relating to certain amendments to pension plans or annuity contracts.


action_date: 2003-05-14
text: 
(This measure has not been amended since it was reported to the House on March 18, 2003. The summary of that version is repeated here.)

Pension Security Act of 2003 - 
Title I: Improvements in Pension Security
 - (Sec. 101) Amends the Employee Retirement Income Security Act of 1974 (ERISA) to require individual account plans (IAPs), including those with cash or deferred arrangements under Internal Revenue Code (IRC) section 401(k), to furnish quarterly pension benefit statements to plan participants and beneficiaries with rights to direct investments.
(Sec. 102) Provides that employers are not exempt from liability for failing in fiduciary duty with respect to IAP investments during blackout periods if such a period's imposition suspends, limits, or restricts participants' and beneficiaries' ability to direct or diversify their assets. Exempts an employer from liability for losses during a blackout period that result from participant or beneficiary control of assets prior to the period, if certain requirements are met, including considering the reasonableness of the period, providing notice, and acting solely in the interests of participants and beneficiaries in determining to enter it. Deems a participant or beneficiary to have exercised such prior control if, after reasonable notice of the change in investment options is given before the blackout period, their assets are transferred to plan investment options by their affirmative election or in the manner set forth in the notice. Treats as not imposed as a blackout period any limitations or restrictions on employee ability to divest or diversify assets, if such limitations or restrictions are disclosed to participants and beneficiaries through summary plan descriptions or materials describing specific investment alternatives under the plan.
(Sec. 103) Directs the Secretary of Labor to establish a program to provide informational and educational support for pension plan fiduciaries.
(Sec. 104) Amends ERISA and IRC to set forth diversification requirements for IAPs that hold employer securities readily tradable on an established market. (Exempts from such requirements employee stock ownership plans unless they hold employer stock attributable to employee elective deferrals or employer matching contributions.) Allows participants and beneficiaries, if employer securities are held in an IAP through employee contributions and elective deferrals, to divest such employer securities and reinvest the amounts in other options. Requires employers, if employer securities are held in an IAP through employer contributions, to allow participants and beneficiaries to divest such securities and reinvest in other options; but permits employers to opt to do so in either of the following ways under the plan: (1) after the benefit is based on three years of service as an employee; or (2) with respect to an allocation during a plan year, not more than three years after the end of that plan year. Requires such plans to offer at least: (1) three investment options other than employer securities; and (2) quarterly opportunities to choose among such options. Makes such requirements applicable to assets acquired on or after the effective date of this Act. Requires plans to provide participants and beneficiaries an opportunity to divest assets acquired before such effective date in 20 percent increments over a five-year transition period beginning in 2003, with all of such assets eligible for divestiture beginning in 2007.
(Sec. 105) Allows ERISA and IRC prohibited transaction exemptions under specified conditions, including certain notifications and disclosures, to: (1) a fiduciary adviser's providing certain investment advice to an employee benefit plan or to a participant or beneficiary of such plan; (2) sale, acquisition, or holding of securities or other property (including any lending of money or other extension of credit associated with these) pursuant to such advice; and (3) direct or indirect receipt of fees or other compensation by the fiduciary adviser or an affiliate in connection with providing such advice.
(Sec. 106) Directs the Secretary of Labor to study, and report to specified congressional committees on, the costs and benefits to participants and beneficiaries of requiring independent fiduciary consultants to advise plan fiduciaries in connection with IAPs.
(Sec. 107) Amends the IRC to provide that no amount shall be included in the gross income of any employee solely because the employee may choose between any qualified retirement planning services provided by a qualified investment advisor, and compensation which would otherwise be includible in the gross income of such employee. Applies such provision to highly compensated employees only if such choice is available on substantially the same terms to each member of the group of employees normally provided education and information regarding the employer's qualified employer plan.
(Sec. 108) Amends the Securities Exchange Act of 1934 to prohibit certain insider trading during pension plan transaction suspension periods.

Title II: Additional Provisions
 - (Sec. 201) Amends the Retirement Protection Act of 1994 to make permanent an exemption from certain funding rules under the General Agreement on Tariffs and Trade (GATT) for retirement plans sponsored by companies in the interstate bus transportation industry (thereby having ERISA funding rules apply instead).
(Sec. 202) Directs the Secretaries of the Treasury and of Labor to allow: (1) one-participant retirement plans which meet certain requirements and have assets of $250,000 or less as of the close of the plan year to not file an annual return for that year; and (2) the filing of a simplified annual return for any retirement plan which covers fewer than 25 employees on the first day of a plan year and meets certain other requirements.
(Sec. 203) Directs the Secretary of the Treasury to continue to update and improve the Employee Plans Compliance Resolution System (or any successor program) giving special attention to specified factors. Authorizes the Secretary of the Treasury to effectuate these and any other employee plans correction policies, including waiving income, excise, or other taxes to ensure that any tax, penalty, or sanction is not excessive and bears a reasonable relationship to the nature, extent, and severity of the failure.
(Sec. 204) Directs the Secretary of the Treasury to modify specified IRC rules relating to pension plan nondiscrimination, coverage, and line of business requirements to make them more flexible in certain respects, to the extent the Secretary deems appropriate.
(Sec. 205) Amends IRC and the Taxpayer Relief Act of 1997 to extend to all governmental plans a moratorium on the application of certain nondiscrimination rules applicable to State and local plans.
(Sec. 206) Amends ERISA to direct the Secretary of the Treasury to modify specified regulations to require: (1) that the applicable distribution notice period be not more than 180 (currently 90) and not less than 30 days before the date distribution commences; and (2) the description of a participant's right, if any, to defer receipt of a distribution include a description of the consequences of failing to defer such receipt.
(Sec. 207) Allows summary annual reports on employee benefit plans to be disseminated through electronic means or other new technologies.
(Sec. 208) Revises ERISA with respect to the National Summit on Retirement Savings.
(Sec. 209) Directs the Pension Benefit Guaranty Corporation (PBGC) to issue missing participant rules for multiemployer plans. Allows the transfer of missing participants' benefits to the PBGC upon plan termination in the case of certain plans not subject to the PBGC termination insurance program.
(Sec. 210) Reduces PBGC premiums for new plans of small employers. Sets the flat-rate premium at five dollars per plan participant for the first five years of a new single-employer plan of an employer with 100 or fewer employees.
(Sec. 211) Reduces PBGC additional premiums for new and small plans. Phases in, over a five-year period, the variable-rate premium for a new defined benefit plan. Limits, for a plan maintained by an employer with 25 or fewer employees, the variable-rate premium to no more than five dollars times the number of plan participants at the end of the preceding year.
(Sec. 212) Authorizes the PBGC to pay interest on premium overpayment refunds.
(Sec. 213) Revises rules for substantial owner benefits in terminated plans. Reduces the phase-in periods for guaranteed benefits for a ten-percent or more owner (substantial owner) in the case of plan termination. Applies the allocation of asset rules to a substantial owner with less than 50 percent ownership in the same manner as other participants.
(Sec. 214) Requires the Secretary of Labor to revise specified regulations to require more timely notification of suspension of pension benefits to recipients who return to work for an employer from whose pension plan they are receiving a retirement annuity.
(Sec. 215) Directs the Secretary of Labor to study and report on: (1) model small employer group plans; and (2) the effect of this Act on pension plan coverage.
(Sec. 216) Revises the formula for determining the interest rate range for additional funding requirements for pension plans by the PBGC.

Title III: General Provisions - 
(Sec. 301) Sets forth provisions relating to certain amendments to pension plans or annuity contracts.

Legislative actions:
action_date: 2003-05-15
text: Received in the Senate and Read twice and referred to the Committee on Health, Education, Labor, and Pensions.
action_date: 2003-05-14
text: Motion to reconsider laid on the table Agreed to without objection.
action_date: 2003-05-14
text: On passage Passed by the Yeas and Nays: 271 - 157 (Roll no. 189). (text: CR H4050-4059)
action_date: 2003-05-14
text: Passed/agreed to in House: On passage Passed by the Yeas and Nays: 271 - 157 (Roll no. 189).(text: CR H4050-4059)
action_date: 2003-05-14
text: On motion to recommit with instructions Failed by the Yeas and Nays: 202 - 226 (Roll no. 188).
action_date: 2003-05-14
text: The previous question on the motion to recommit with instructions was ordered without objection.
action_date: 2003-05-14
text: Mr. Miller, George moved to recommit with instructions to Education and the Workforce. (consideration: CR H4089-4092; text: CR H4089-4090)
action_date: 2003-05-14
text: The previous question was ordered on the amendment and the bill as amended pursuant to the rule.
action_date: 2003-05-14
text: DEBATE - Pursuant to H. Res. 230 the House proceeded with 60 minutes of debate on the Andrews substitute amendment.
action_date: 2003-05-14
text: DEBATE - The House proceeded with one hour and 20 minutes of debate on H.R. 1000, as amended by the rule.
action_date: 2003-05-14
text: Rule provides for consideration of H.R. 1000 with 1 hour and 20 minutes of general debate. Previous question shall be considered as ordered without intervening motions except motion to recommit with or without instructions. The amendment recommended by the Committee on Education and the Workforce now printed in the bill shall be considered as adopted. All points of order against the bill, as amended, are waived. Measure will be considered read. A specified amendment is in order.
action_date: 2003-05-14
text: Considered under the provisions of rule H. Res. 230. (consideration: CR H4040-4092)
action_date: 2003-05-14
text: Rule H. Res. 230 passed House.
action_date: 2003-05-13
text: Rules Committee Resolution H. Res. 230 Reported to House. Rule provides for consideration of H.R. 1000 with 1 hour and 20 minutes of general debate. Previous question shall be considered as ordered without intervening motions except motion to recommit with or without instructions. The amendment recommended by the Committee on Education and the Workforce now printed in the bill shall be considered as adopted. All points of order against the bill, as amended, are waived. Measure will be considered read. A specified amendment is in order.
action_date: 2003-05-09
text: Placed on the Union Calendar, Calendar No. 50.
action_date: 2003-05-09
text: Committee on Ways and Means discharged.
action_date: 2003-05-09
text: Committee on Ways and Means discharged.
action_date: 2003-03-28
text: House Committee on Ways and Means Granted an extension for further consideration ending not later than May 9, 2003.
action_date: 2003-03-28
text: House Committee on Ways and Means Granted an Extention for Further Consideration Ending not Later Than May 9, 2003..
action_date: 2003-03-18
text: House Committee on Ways and Means Granted an extension for further consideration ending not later than March 28, 2003.
action_date: 2003-03-18
text: Reported (Amended) by the Committee on Education and the Workforce. H. Rept. 108-43, Part I. (text: CR 5/14/2003 H4040-4050)
action_date: 2003-03-18
text: Reported (Amended) by the Committee on Education and the Workforce. H. Rept. 108-43, Part I.(text: CR 5/14/2003 H4040-4050)
action_date: 2003-03-18
text: House Committee on Ways and Means Granted Extention for Further Consideration Ending no Later Than March 28, 2003..
action_date: 2003-03-06
text: Ordered to be Reported (Amended) by the Yeas and Nays: 29 - 19.
action_date: 2003-03-06
text: Committee Consideration and Mark-up Session Held.
action_date: 2003-02-27
text: 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.
action_date: 2003-02-27
text: 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.
action_date: 2003-02-27
text: 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.
action_date: 2003-02-27
text: Introduced in House
action_date: 2003-02-27
text: Introduced in House