I 116th CONGRESS 1st Session H. R. 1993 IN THE HOUSE OF REPRESENTATIVES March 29, 2019 Mr. Kind (for himself and Mr. Kelly of Pennsylvania ) introduced the following bill; which was referred to the Committee on Education and Labor , 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 amend the Internal Revenue Code of 1986 and the Employee Retirement Income Security Act of 1974 to modify the rules relating to multiple employer plans and pooled employer plans and to modify PBGC premiums for CSEC plans.

1. Short title This Act may be cited as the Providing Retirement Security to Workers in Small Businesses, Cooperatives, and Service Organizations Act of 2019 . 2. Multiple employer plans; pooled employer plans (a) Qualification requirements (1) In general Section 413 of the Internal Code of 1986 is amended by adding at the end the following new subsection: (e) Application of qualification requirements for certain multiple employer plans with pooled plan providers (1) In general Except as provided in paragraph (2), if a defined contribution plan to which subsection (c) applies— (A) is maintained by employers which have a common interest other than having adopted the plan, or (B) in the case of a plan not described in subparagraph (A), has a pooled plan provider, then the plan shall not be treated as failing to meet the requirements under this title applicable to a plan described in section 401(a) or to a plan that consists of individual retirement accounts described in section 408 (including by reason of subsection (c) thereof), whichever is applicable, merely because one or more employers of employees covered by the plan fail to take such actions as are required of such employers for the plan to meet such requirements. (2) Limitations (A) In general Paragraph (1) shall not apply to any plan unless the terms of the plan provide that in the case of any employer in the plan failing to take the actions described in paragraph (1)— (i) the assets of the plan attributable to employees of such employer (or beneficiaries of such employees) will be transferred to a plan maintained only by such employer (or its successor), to an eligible retirement plan as defined in section 402(c)(8)(B) for each individual whose account is transferred, or to any other arrangement that the Secretary determines is appropriate, unless the Secretary determines it is in the best interests of the employees of such employer (and the beneficiaries of such employees) to retain the assets in the plan, and (ii) such employer (and not the plan with respect to which the failure occurred or any other employer in such plan) shall, except to the extent provided by the Secretary, be liable for any liabilities with respect to such plan attributable to employees of such employer (or beneficiaries of such employees). (B) Failures by pooled plan providers If the pooled plan provider of a plan described in paragraph (1)(B) does not perform substantially all of the administrative duties which are required of the provider under paragraph (3)(A)(i) for any plan year, the Secretary may provide that the determination as to whether the plan meets the requirements under this title applicable to a plan described in section 401(a) or to a plan that consists of individual retirement accounts described in section 408 (including by reason of subsection (c) thereof), whichever is applicable, shall be made in the same manner as would be made without regard to paragraph (1). (3) Pooled plan provider (A) In general For purposes of this subsection, the term pooled plan provider means, with respect to any plan, a person who— (i) is designated by the terms of the plan as a named fiduciary (within the meaning of section 402(a)(2) of the Employee Retirement Income Security Act of 1974), as the plan administrator, and as the person responsible to perform all administrative duties (including conducting proper testing with respect to the plan and the employees of each employer in the plan) which are reasonably necessary to ensure that— (I) the plan meets any requirement applicable under the Employee Retirement Income Security Act of 1974 or this title to a plan described in section 401(a) or to a plan that consists of individual retirement accounts described in section 408 (including by reason of subsection (c) thereof), whichever is applicable, and (II) each employer in the plan takes such actions as the Secretary or such person determines are necessary for the plan to meet the requirements described in subclause (I), including providing to such person any disclosures or other information which the Secretary may require or which such person otherwise determines are necessary to administer the plan or to allow the plan to meet such requirements, (ii) registers as a pooled plan provider with the Secretary, and provides such other information to the Secretary as the Secretary may require, before beginning operations as a pooled plan provider, (iii) acknowledges in writing that such person is a named fiduciary (within the meaning of section 402(a)(2) of the Employee Retirement Income Security Act of 1974), and the plan administrator, with respect to the plan, and (iv) is responsible for ensuring that all persons who handle assets of, or who are fiduciaries of, the plan are bonded in accordance with section 412 of the Employee Retirement Income Security Act of 1974. (B) Audits, examinations and investigations The Secretary may perform audits, examinations, and investigations of pooled plan providers as may be necessary to enforce and carry out the purposes of this subsection. (C) Aggregation rules For purposes of this paragraph, in determining whether a person meets the requirements of this paragraph to be a pooled plan provider with respect to any plan, all persons who perform services for the plan and who are treated as a single employer under subsection (b), (c), (m), or (o) of section 414 shall be treated as one person. (D) Treatment of employers as plan sponsors Except with respect to the administrative duties of the pooled plan provider described in subparagraph (A)(i), each employer in a plan which has a pooled plan provider shall be treated as the plan sponsor with respect to the portion of the plan attributable to employees of such employer (or beneficiaries of such employees). (4) Guidance (A) In general The Secretary shall issue such guidance as the Secretary determines appropriate to carry out this subsection, including guidance— (i) to identify the administrative duties and other actions required to be performed by a pooled plan provider under this subsection, (ii) which describes the procedures to be taken to terminate a plan which fails to meet the requirements to be a plan described in paragraph (1), including the proper treatment of, and actions needed to be taken by, any employer in the plan and the assets and liabilities of the plan attributable to employees of such employer (or beneficiaries of such employees), and (iii) identifying appropriate cases to which the rules of paragraph (2)(A) will apply to employers in the plan failing to take the actions described in paragraph (1). The Secretary shall take into account under clause (iii) whether the failure of an employer or pooled plan provider to provide any disclosures or other information, or to take any other action, necessary to administer a plan or to allow a plan to meet requirements applicable to the plan under section 401(a) or 408, whichever is applicable, has continued over a period of time that demonstrates a lack of commitment to compliance. (B) Good faith compliance with law before guidance An employer or pooled plan provider shall not be treated as failing to meet a requirement of guidance issued by the Secretary under this paragraph if, before the issuance of such guidance, the employer or pooled plan provider complies in good faith with a reasonable interpretation of the provisions of this subsection to which such guidance relates. (5) Model plan The Secretary shall publish model plan language which meets the requirements of this subsection and of paragraphs (43) and (44) of section 3 of the Employee Retirement Income Security Act of 1974 and which may be adopted in order for a plan to be treated as a plan described in paragraph (1)(B). . (2) Conforming amendment Section 413(c)(2) of such Code is amended by striking section 401(a) and inserting sections 401(a) and 408(c) . (3) Technical amendment Section 408(c) of such Code is amended by inserting after paragraph (2) the following new paragraph: (3) There is a separate accounting for any interest of an employee or member (or spouse of an employee or member) in a Roth IRA. . (b) No common interest required for pooled employer plans Section 3(2) of the Employee Retirement Income Security Act of 1974 ( 29 U.S.C. 1002(2) ) is amended by adding at the end the following: (C) A pooled employer plan shall be treated as— (i) a single employee pension benefit plan or single pension plan; and (ii) a plan to which section 210(a) applies. . (c) Pooled employer plan and provider defined (1) In general 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) Pooled employer plan (A) In general The term pooled employer plan means a plan— (i) which is an individual account plan established or maintained for the purpose of providing benefits to the employees of 2 or more employers; (ii) which is a plan described in section 401(a) of the Internal Revenue Code of 1986 which includes a trust exempt from tax under section 501(a) of such Code or a plan that consists of individual retirement accounts described in section 408 of such Code (including by reason of subsection (c) thereof); and (iii) the terms of which meet the requirements of subparagraph (B). Such term shall not include a plan maintained by employers which have a common interest other than having adopted the plan. (B) Requirements for plan terms The requirements of this subparagraph are met with respect to any plan if the terms of the plan— (i) designate a pooled plan provider and provide that the pooled plan provider is a named fiduciary of the plan; (ii) designate one or more trustees meeting the requirements of section 408(a)(2) of the Internal Revenue Code of 1986 (other than an employer in the plan) to be responsible for collecting contributions to, and holding the assets of, the plan and require such trustees to implement written contribution collection procedures that are reasonable, diligent, and systematic; (iii) provide that each employer in the plan retains fiduciary responsibility for— (I) the selection and monitoring in accordance with section 404(a) of the person designated as the pooled plan provider and any other person who, in addition to the pooled plan provider, is designated as a named fiduciary of the plan; and (II) to the extent not otherwise delegated to another fiduciary by the pooled plan provider and subject to the provisions of section 404(c), the investment and management of the portion of the plan’s assets attributable to the employees of the employer (or beneficiaries of such employees); (iv) provide that employers in the plan, and participants and beneficiaries, are not subject to unreasonable restrictions, fees, or penalties with regard to ceasing participation, receipt of distributions, or otherwise transferring assets of the plan in accordance with section 208 or paragraph (44)(C)(i)(II); (v) require— (I) the pooled plan provider to provide to employers in the plan any disclosures or other information which the Secretary may require, including any disclosures or other information to facilitate the selection or any monitoring of the pooled plan provider by employers in the plan; and (II) each employer in the plan to take such actions as the Secretary or the pooled plan provider determines are necessary to administer the plan or for the plan to meet any requirement applicable under this Act or the Internal Revenue Code of 1986 to a plan described in section 401(a) of such Code or to a plan that consists of individual retirement accounts described in section 408 of such Code (including by reason of subsection (c) thereof), whichever is applicable, including providing any disclosures or other information which the Secretary may require or which the pooled plan provider otherwise determines are necessary to administer the plan or to allow the plan to meet such requirements; and (vi) provide that any disclosure or other information required to be provided under clause (v) may be provided in electronic form and will be designed to ensure only reasonable costs are imposed on pooled plan providers and employers in the plan. (C) Exceptions The term pooled employer plan does not include— (i) a multiemployer plan; or (ii) a plan established before the date of the enactment of the Setting Every Community Up for Retirement Enhancement Act of 2019 unless the plan administrator elects that the plan will be treated as a pooled employer plan and the plan meets the requirements of this title applicable to a pooled employer plan established on or after such date. (D) Treatment of employers as plan sponsors Except with respect to the administrative duties of the pooled plan provider described in paragraph (44)(A)(i), each employer in a pooled employer plan shall be treated as the plan sponsor with respect to the portion of the plan attributable to employees of such employer (or beneficiaries of such employees). (44) Pooled plan provider (A) In general The term pooled plan provider means a person who— (i) is designated by the terms of a pooled employer plan as a named fiduciary, as the plan administrator, and as the person responsible for the performance of all administrative duties (including conducting proper testing with respect to the plan and the employees of each employer in the plan) which are reasonably necessary to ensure that— (I) the plan meets any requirement applicable under this Act or the Internal Revenue Code of 1986 to a plan described in section 401(a) of such Code or to a plan that consists of individual retirement accounts described in section 408 of such Code (including by reason of subsection (c) thereof), whichever is applicable; and (II) each employer in the plan takes such actions as the Secretary or pooled plan provider determines are necessary for the plan to meet the requirements described in subclause (I), including providing the disclosures and information described in paragraph (43)(B)(v)(II); (ii) registers as a pooled plan provider with the Secretary, and provides to the Secretary such other information as the Secretary may require, before beginning operations as a pooled plan provider; (iii) acknowledges in writing that such person is a named fiduciary, and the plan administrator, with respect to the pooled employer plan; and (iv) is responsible for ensuring that all persons who handle assets of, or who are fiduciaries of, the pooled employer plan are bonded in accordance with section 412. (B) Audits, examinations and investigations The Secretary may perform audits, examinations, and investigations of pooled plan providers as may be necessary to enforce and carry out the purposes of this paragraph and paragraph (43). (C) Guidance The Secretary shall issue such guidance as the Secretary determines appropriate to carry out this paragraph and paragraph (43), including guidance— (i) to identify the administrative duties and other actions required to be performed by a pooled plan provider under either such paragraph; and (ii) which requires in appropriate cases that if an employer in the plan fails to take the actions required under subparagraph (A)(i)(II)— (I) the assets of the plan attributable to employees of such employer (or beneficiaries of such employees) are transferred to a plan maintained only by such employer (or its successor), to an eligible retirement plan as defined in section 402(c)(8)(B) of the Internal Revenue Code of 1986 for each individual whose account is transferred, or to any other arrangement that the Secretary determines is appropriate in such guidance; and (II) such employer (and not the plan with respect to which the failure occurred or any other employer in such plan) shall, except to the extent provided in such guidance, be liable for any liabilities with respect to such plan attributable to employees of such employer (or beneficiaries of such employees). The Secretary shall take into account under clause (ii) whether the failure of an employer or pooled plan provider to provide any disclosures or other information, or to take any other action, necessary to administer a plan or to allow a plan to meet requirements described in subparagraph (A)(i)(II) has continued over a period of time that demonstrates a lack of commitment to compliance. The Secretary may waive the requirements of subclause (ii)(I) in appropriate circumstances if the Secretary determines it is in the best interests of the employees of the employer referred to in such clause (and the beneficiaries of such employees) to retain the assets in the plan with respect to which the employer’s failure occurred. (D) Good faith compliance with law before guidance An employer or pooled plan provider shall not be treated as failing to meet a requirement of guidance issued by the Secretary under subparagraph (C) if, before the issuance of such guidance, the employer or pooled plan provider complies in good faith with a reasonable interpretation of the provisions of this paragraph, or paragraph (43), to which such guidance relates. (E) Aggregation rules For purposes of this paragraph, in determining whether a person meets the requirements of this paragraph to be a pooled plan provider with respect to any plan, all persons who perform services for the plan and who are treated as a single employer under subsection (b), (c), (m), or (o) of section 414 of the Internal Revenue Code of 1986 shall be treated as one person. . (2) Bonding requirements for pooled employer plans The last sentence of section 412(a) of the Employee Retirement Income Security Act of 1974 ( 29 U.S.C. 1112(a) ) is amended by inserting or in the case of a pooled employer plan (as defined in section 3(43)) after section 407(d)(1)) . (3) Conforming and technical amendments Section 3 of the Employee Retirement Income Security Act of 1974 ( 29 U.S.C. 1002 ) is amended— (A) in paragraph (16)(B)— (i) by striking or at the end of clause (ii); and (ii) by striking the period at the end and inserting , or (iv) in the case of a pooled employer plan, the pooled plan provider. ; and (B) by striking the second paragraph (41). (d) Pooled employer and multiple employer plan reporting (1) Additional information Section 103 of the Employee Retirement Income Security Act of 1974 ( 29 U.S.C. 1023 ) is amended— (A) in subsection (a)(1)(B), by striking applicable subsections (d), (e), and (f) and inserting applicable subsections (d), (e), (f), and (g) ; and (B) by amending subsection (g) to read as follows: (g) Additional information with respect to pooled employer and multiple employer plans An annual report under this section for a plan year shall include— (1) with respect to any plan to which section 210(a) applies (including a pooled employer plan), a list of employers in the plan and a good faith estimate of the percentage of total contributions made by such employers during the plan year and the aggregate account balances attributable to each employer in the plan (determined as the sum of the account balances of the employees of such employer (and the beneficiaries of such employees)); and (2) with respect to a pooled employer plan, the identifying information for the person designated under the terms of the plan as the pooled plan provider. . (2) Simplified annual reports Section 104(a) of the Employee Retirement Income Security Act of 1974 ( 29 U.S.C. 1024(a) ) is amended by striking paragraph (2)(A) and inserting the following: (2) (A) With respect to annual reports required to be filed with the Secretary under this part, the Secretary may by regulation prescribe simplified annual reports for any pension plan that— (i) covers fewer than 100 participants; or (ii) is a plan described in section 210(a) that covers fewer than 1,000 participants, but only if no single employer in the plan has 100 or more participants covered by the plan. . (e) Effective date (1) In general The amendments made by this section shall apply to plan years beginning after December 31, 2020. (2) Rule of construction Nothing in the amendments made by subsection (a) shall be construed as limiting the authority of the Secretary of the Treasury or the Secretary's delegate (determined without regard to such amendment) to provide for the proper treatment of a failure to meet any requirement applicable under the Internal Revenue Code of 1986 with respect to one employer (and its employees) in a multiple employer plan. 3. Modification of PBGC premiums for CSEC plans (a) Flat rate premium Subparagraph (A) of section 4006(a)(3) of the Employee Retirement Income Security Act of 1974 ( 29 U.S.C. 1306(a)(3) ) is amended— (1) in clause (i), by striking plan, and inserting plan other than a CSEC plan (as defined in section 210(f)(1)) ; (2) in clause (v), by striking or at the end; (3) in clause (vi), by striking the period at the end and inserting , or ; and (4) by adding at the end the following new clause: (vii) in the case of a CSEC plan (as defined in section 210(f)(1)), for plan years beginning after December 31, 2018, for each individual who is a participant in such plan during the plan year an amount equal to the sum of— (I) the additional premium (if any) determined under subparagraph (E), and (II) $19. . (b) Variable rate premium (1) Unfunded vested benefits (A) In general Subparagraph (E) of section 4006(a)(3) of the Employee Retirement Income Security Act of 1974 ( 29 U.S.C. 1306(a)(3) ) is amended by adding at the end the following new clause: (v) For purposes of clause (ii), in the case of a CSEC plan (as defined in section 210(f)(1)), the term unfunded vested benefits means, for plan years beginning after December 31, 2018, the excess (if any) of— (I) the funding liability of the plan as determined under section 306(j)(5)(C) for the plan year by only taking into account vested benefits, over (II) the fair market value of plan assets for the plan year which are held by the plan on the valuation date. . (B) Conforming amendment Clause (iii) of section 4006(a)(3)(E) of such Act ( 29 U.S.C. 1306(a)(3)(E) ) is amended by striking For purposes and inserting Except as provided in clause (v), for purposes . (2) Applicable dollar amount (A) In general Paragraph (8) of section 4006(a) of such Act ( 29 U.S.C. 1306(a) ) is amended by adding at the end the following new subparagraph: (E) CSEC plans In the case of a CSEC plan (as defined in section 210(f)(1)), the applicable dollar amount shall be $9. . (B) Conforming amendment Subparagraph (A) of section 4006(a)(8) of such Act ( 29 U.S.C. 1306(a)(8) ) is amended by striking (B) and (C) and inserting (B), (C), and (E) .