Pension Fairness Act of 2003

Bill: 108-hr-2101
Sponsor: Rep. Miller, George [D-CA-7]
Introduced: 2003-05-14 in the House
Policy area: Labor and Employment
Subjects: Accounting
Administrative procedure
Agriculture and Food
Aircraft
Annuities
Bankruptcy
Civil actions and liability
Collective bargaining
Commerce
Conflict of interests
Congress
Congressional reporting requirements
Corporate divestiture
Corporate mergers
Corporation directors
Corporation taxes
Debtor and creditor
Defined benefit pension plans
Defined contribution plans
Department of Labor
Department of the Treasury
Dividends
Early retirement
Employee ownership
Employee rights
Employee stock options
Estates (Law)
Evidence (Law)
Excise tax
Executive compensation
Executive reorganization
Executives
Families
Finance and Financial Sector
Financial planning
Financial statements
Fines (Penalties)
Fringe benefits
Golden parachutes
Government Operations and Politics
Government paperwork
Governmental investigations
Housing and Community Development
Income tax
Individual retirement accounts
Industrial relations
Information disclosure (Securities law)
Injunctions
Insider trading in securities
Interest
Interest rates
Investment advisers
Investments
Labor contracts
Labor unions
Law
Liability (Law)
Loans
Motor vehicles
Pension funds
Pension trust guaranty insurance
Performance measurement
Public-private partnerships
Recreation
Salaries
Saving and investment
Securities
Securities regulation
Severance pay
Sports and Recreation
Stockholders
Stocks
Surety and fidelity
Survivors' benefits
Tax credits
Tax deductions
Tax exclusion
Tax penalties
Tax-deferred compensation plans
Taxation
Transportation and Public Works
Travel costs
Trusts and trustees
Valuation
Wages

Summary:
action_date: 2003-05-14
text: 
Pension Fairness Act of 2003 - Amends the Employee Retirement Income Security Act of 1974 (ERISA) and the Internal Revenue Code (Code) to revise and add protections for participants and beneficiaries under employee pension plans (plans).
 
Revises information disclosure provisions to require both defined benefit plans and defined contribution (401(k) and related) plans to give participants periodic statements on earned benefits. Requires notice of excessive stock holdings (more than ten percent in employer stock) and the risks of such excess. Requires a corporate insider or plan fiduciary who sells a specified minimum amount of employer stock holdings to report such sale to participants. Revises enforcement requirements. Requires the accounting standard for an issuer of a single-employer defined benefit plan to be modified to prevent the plan's investment gains from being treated as income to such issuer (and prohibits the Security and Exchange Commission from recognizing such standard before such modification).
 
Requires that participants and their beneficiaries be allowed to diversify their plan investments (by divesting employer stock and reinvesting elsewhere) after three years of the participant's service as an employee. Directs the Secretaries of Labor and of the Treasury to report to specified congressional committees their recommendations relating to treatment of non-publicly traded stock for purposes of such participants control over assets in their plan accounts.
 
Requires that employees and employers have equal representation and voting rights in the joint trusteeship of individual account plans under which some or all of the assets are derived from employee contributions.
 
Sets forth increased accountability requirements, including bonding or insurance adequate to protect interest of participants and beneficiaries, liability for breach of fiduciary duty, and preservation of rights or claims.
 
Establishes an Office of Pension Participant Advocacy, with a Pension Participation Advocate, in the Department of Labor.
 
Directs the Pension Benefit Guaranty Corporation to contract to study and report on the insurance system for individual account plans.
 
Establishes an excise tax on failure of pension plans to provide notice of transaction restriction periods.
 
Requires plan investment advisors to meet certain standards of independence or provide access to independent advice for employees. Provides that employers are not liable for such advice if they prudently select and monitor such advisors. Provides for expanded tax-deferred treatment of qualified retirement planning services for employees.
 
Sets forth requirements for parity in employee benefits. Requires inclusion in gross income of the funded executive deferred compensation (protected in bankruptcy) if a corporation funds its defined contribution plan with employer stock (not protected in bankruptcy). Makes inapplicable, in the case of pension surpluses and assets, the executive performance-based compensation exception to the limitation on deductible compensation.
 
Provides protection for long-service employees during conversions to hybrid defined benefit plans. Requires that employees with ten years of service be allowed to choose whether to receive benefits promised under a traditional plan or under a new cash balance plan.
 
Provides for treatment of corporate insiders, including special rules for executive perks and retirement benefits. Applies the golden parachute excise tax to deferred compensation which is paid by a corporation after a major decline in stock value or when the corporation declares bankruptcy. Requires adequate disclosure regarding executive compensation packages to employees and to unions during collective bargaining.
 
Revises Federal bankruptcy law to provide additional protections for employees of bankrupt employers. Provides for avoidance of certain transfers, and for alternate prosecution of action. Limits retention bonuses, severance pay, and certain other payments. Revises priorities for payment of claims to raise from $4,000 to $10,000 the maximum individual limit on allowed unsecured claims for wages, salaries, or commissions, including leave pay, or certain sales commissions, earned within 90 days before petition filing or business cessation.
 
Subjects to deductible limits the corporate tax deduction for reinvested dividends of employee stock ownership plans (ESOPs).
 
Makes permanent the Saver's Tax Credit, which is a tax credit for elective deferrals and individual retirement account (IRA) contributions by certain individuals.


Legislative actions:
action_date: 2003-06-25
text: Referred to the Subcommittee on Commercial and Administrative Law.
action_date: 2003-06-20
text: Referred to the Subcommittee on Employer-Employee Relations.
action_date: 2003-05-23
text: Referred to the Subcommittee on Capital Markets, Insurance and Government Sponsored Enterprises.
action_date: 2003-05-14
text: Referred to the Committee on Education and the Workforce, and in addition to the Committees on Ways and Means, the Judiciary, and Financial Services, 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: 2003-05-14
text: Referred to the Committee on Education and the Workforce, and in addition to the Committees on Ways and Means, the Judiciary, and Financial Services, 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: 2003-05-14
text: Referred to the Committee on Education and the Workforce, and in addition to the Committees on Ways and Means, the Judiciary, and Financial Services, 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: 2003-05-14
text: Referred to the Committee on Education and the Workforce, and in addition to the Committees on Ways and Means, the Judiciary, and Financial Services, 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: 2003-05-14
text: Referred to the Committee on Education and the Workforce, and in addition to the Committees on Ways and Means, the Judiciary, and Financial Services, 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: 2003-05-14
text: Introduced in House
action_date: 2003-05-14
text: Introduced in House