[Congressional Bills 103th Congress]
[From the U.S. Government Publishing Office]
[S. 2531 Introduced in Senate (IS)]

103d CONGRESS
  2d Session
                                S. 2531

To amend the Employee Retirement Income Security Act of 1974 to improve 
  the pension and welfare benefits of working men and women, and for 
                            other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

            October 6 (legislative day, September 12), 1994

Mr. Metzenbaum introduced the following bill; which was read twice and 
         referred to the Committee on Labor and Human Resources

_______________________________________________________________________

                                 A BILL


 
To amend the Employee Retirement Income Security Act of 1974 to improve 
  the pension and welfare benefits of working men and women, 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; AMENDMENT OF ERISA.

    (a) Short Title.--This Act may be cited as the ``Pension Bill of 
Rights Act of 1994''.
    (b) ERISA.--Except as otherwise expressly provided, whenever in 
this Act an amendment or repeal is expressed in terms of an amendment 
to, or repeal of, a section or other provision, the reference shall be 
considered to be made to a section or other provision of the Employee 
Retirement Income Security Act of 1974.

SEC. 2. FINDINGS AND PURPOSE.

    (a) Findings.--The Congress finds that--
            (1) 1994 celebrates the twentieth anniversary of the 
        Employee Retirement Income Security Act of 1974, and
            (2) the pension and welfare benefit rights of workers and 
        retirees established by that Act need to be clearly set forth 
        and strengthened.
    (b) Purpose.--It is the purpose of this Act to set forth and to 
implement the Pension Bill of Rights.

SEC. 3. PENSION BILL OF RIGHTS.

    The Pension Bill of Rights is as follows:
            (1) Employees have the right to be included in a pension 
        plan sponsored by their employer.
            (2) Employees have the right to fair treatment in earning 
        retirement benefits.
            (3) Employees have the right to timely, accurate, and 
        understandable information about their pension and welfare 
        benefits.
            (4) Employees have the right to receive information and to 
        provide advice on the investment of pension plan assets.
            (5) Employees have the right to have their pension plans 
        adequately funded and invested to promote long-term economic 
        security.
            (6) Employees have the right to Department of Labor 
        assistance in protecting their pension and welfare benefit 
        rights.
            (7) Employees have the right to effective court enforcement 
        of their legal rights.
            (8) Spouses of employees have the right to equitable 
        treatment.
            (9) Employees have the right to pension portability.
            (10) Employees have the right to have their pension money 
        protected against fraud and abuse.

       TITLE I--PROVISIONS RELATING TO EMPLOYEES' PENSION RIGHTS

             Subtitle A--Right of Inclusion in Pension Plan

SEC. 101. MINIMUM COVERAGE REQUIREMENTS.

    (a) In General.--Part 2 of subtitle B of title I (29 U.S.C. 201 et 
seq.) is amended by inserting after section 201 the following new 
section:

                    ``minimum coverage requirements

    ``Sec. 201A. (a) General Rule.--Each pension plan maintained by an 
employer shall benefit all employees of the employer.
    ``(b) Exclusion of Certain Employees.--For purposes of this 
section, there shall be excluded from consideration--
            ``(1) employees who are included in a unit of employees 
        covered by an agreement which, as determined in accordance with 
        regulations issued by the Secretary, constitutes a collective 
        bargaining agreement between employee representatives and one 
        or more employers, if there is evidence that retirement 
        benefits were the subject of good faith bargaining between such 
        employee representatives and such employer or employers,
            ``(2) in the case of a trust established or maintained 
        pursuant to an agreement which, as determined in accordance 
        with regulations issued by the Secretary, constitutes a 
        collective bargaining agreement between airline pilots 
        represented in accordance with title II of the Railway Labor 
        Act and one or more employers, all employees not covered by 
        such agreement, and
            ``(3) employees who are nonresident aliens and who receive 
        no earned income (within the meaning of section 911(d)(2) of 
        the Internal Revenue Code of 1986) from the employer which 
        constitutes income from sources within the United States 
        (within the meaning of section 861(a)(3) of such Code).
Paragraph (1) shall not apply with respect to coverage of employees 
under a plan pursuant to an agreement under such paragraph. Paragraph 
(2) shall not apply in the case of a plan which provides contributions 
or benefits for employees whose principal duties are not customarily 
performed aboard aircraft in flight.
    ``(c) Exclusion of Employees Not Meeting Age and Service 
Requirements.--
            ``(1) In general.--If a plan--
                    ``(A) prescribes, consistent with section 202(a), 
                minimum age and service requirements as a condition of 
                participation, and
                    ``(B) excludes all employees not meeting such 
                requirements from participation,
        then such employees shall be excluded from consideration for 
        purposes of this section.
            ``(2) Requirements may be met separately with respect to 
        excluded group.--If employees not meeting the minimum age or 
        service requirements of section 202(a)(1) (without regard to 
        subparagraph (B) thereof) are covered under a plan of the 
        employer which meets the requirements of subsection (a) 
        separately with respect to such employees, such employees may 
        be excluded from consideration in determining whether any plan 
        of the employer meets the requirements of subsection (a).
            ``(3) Requirements not treated as being met before entry 
        date.--An employee shall not be treated as meeting the age and 
        service requirements described in this subsection until the 
        first date on which, under the plan, any employee with the same 
        age and service would be eligible to commence participation in 
        the plan.
    ``(d) Line of Business Exception.--
            ``(1) In general.--If, under section 414(r) of the Internal 
        Revenue Code of 1986, an employer is treated as operating 
        separate lines of business for a year, the employer may apply 
        the requirements of this section for such year separately with 
        respect to employees in each separate line of business.
            ``(2) Plan must be nondiscriminatory.--Paragraph (1) shall 
        not apply with respect to any plan maintained by an employer 
        unless such plan benefits such employees as qualify under a 
        classification set up by the employer and found by the 
        Secretary of the Treasury not to be discriminatory in favor of 
        highly compensated employees.
    ``(e) Definitions and Special Rules.--For purposes of this 
section--
            ``(1) Highly compensated employee.--The term `highly 
        compensated employee' has the meaning given such term by 
        section 414(q) of the Internal Revenue Code of 1986.
            ``(2) Aggregation rules.--An employer may elect to 
        designate--
                    ``(A) 2 or more trusts,
                    ``(B) 1 or more trusts and 1 or more annuity plans, 
                or
                    ``(C) 2 or more annuity plans,
        as part of 1 plan to determine whether the requirements of this 
        section are met with respect to such plan. If an employer 
        elects to treat any trusts or annuity plans as 1 plan under 
        this paragraph, such trusts or annuity plans shall be treated 
        as 1 plan for purposes of section 401(a)(4) of such Code.
            ``(3) Special rules for certain dispositions or 
        acquisitions.--
                    ``(A) In general.--If a person becomes, or ceases 
                to be, a member of a group described in subsection (b), 
                (c), (m), or (o) of section 414 of such Code, then the 
                requirements of this section shall be treated as having 
                been met during the transition period with respect to 
                any plan covering employees of such person or any other 
                member of such group if--
                            ``(i) such requirements were met 
                        immediately before each such change, and
                            ``(ii) the coverage under such plan is not 
                        significantly changed during the transition 
                        period (other than by reason of the change in 
                        members of a group) or such plan meets such 
                        other requirements as the Secretary may 
                        prescribe by regulation.
                    ``(B) Transition period.--For purposes of 
                subparagraph (A), the term `transition period' means 
                the period--
                            ``(i) beginning on the date of the change 
                        in members of a group, and
                            ``(ii) ending on the last day of the 1st 
                        plan year beginning after the date of such 
                        change.
            ``(4) Regulations.--The Secretary shall prescribe such 
        regulations as may be necessary or appropriate to carry out the 
        purposes of this section.''
    (b) Conforming Amendment.--The table of sections for part 2 of 
subtitle B of title I is amended by inserting after the item relating 
to section 201 the following new item:

``Sec. 201A. Minimum coverage requirements.''

SEC. 102. MINIMUM PARTICIPATION REQUIREMENTS.

    (a) Hours Required for Year of Service.--
            (1) In general.--Sections 202(a)(3), 203(b)(2), and 
        204(b)(4) (29 U.S.C. 1052(a)(3), 1053(b)(2), and 1054(b)(4)) 
        are each amended by striking ``1,000 hours'' each place it 
        appears and inserting ``750 hours''.
            (2) Conforming amendments.--
                    (A) Sections 202(a)(3)(D), 203(b)(2)(D), and 
                204(b)(4)(E) (29 U.S.C. 1052(a)(3)(D), 1053(b)(2)(D), 
                and 1054(b)(4)(E)) are each amended by striking ``125 
                days'' and inserting ``94 days''.
                    (B) Sections 202(b)(5)(B) and 203(b)(3)(E)(ii) (29 
                U.S.C. 1052(b)(5)(B) and 1053(b)(3)(E)(ii)) are each 
                amended by striking ``501 hours'' and inserting ``376 
                hours''.
                    (C) Section 203(b)(3)(A) (29 U.S.C. 1053(b)(3)(A)) 
                is amended by striking ``500 hours'' and inserting 
                ``375 hours''.
    (b) Credit for Part-Time, Seasonal, and Temporary Employees.--
            (1) Minimum participation.--Section 202(a)(3) (29 U.S.C. 
        1052(a)(3)) is amended by adding at the end the following new 
        subparagraph:
                    ``(E) For purposes of this section, if an employee 
                has 500 or more but less than 750 hours of service 
                during each of 2 consecutive 12-month periods described 
                in subparagraph (A), the employee shall be treated as 
                having 1 year of service with respect to those hours of 
                service. No 12-month period shall be taken into account 
                if previously taken into account under this 
                subparagraph.''
            (2) Vesting requirements.--Section 203(b)(2) (29 U.S.C. 
        1053(b)(2)) is amended by adding at the end the following new 
        subparagraph:
                    ``(E) For purposes of this section, if an employee 
                has 500 or more but less than 750 hours of service 
                during each of 2 consecutive 12-month periods described 
                in subparagraph (A), the employee shall be treated as 
                having 1 year of service with respect to those hours of 
                service. No 12-month period shall be taken into account 
                if previously taken into account under this 
                subparagraph.''
            (3) Accrual.--
                    (A) In general.--Section 204(b)(4) (29 U.S.C. 
                1054(b)(4)) is amended by inserting at the end the 
                following new subparagraph:
                    ``(F) For purposes of this section, if an employee 
                has 500 or more but less than 750 hours of service 
                during each of 2 consecutive 12-month periods described 
                in subparagraph (A), the employee shall be treated as 
                having 1 year of participation with respect to those 
                hours of service. No 12-month period shall be taken 
                into account if previously taken into account under 
                this subparagraph.''
                    (B) Conforming amendments.--Section 204(b)(4) (29 
                U.S.C. 1054(b)(4)), as amended by subparagraph (A), is 
                amended--
                            (i) by striking ``, except as provided in 
                        subparagraph (C),'' in subparagraph (B), and
                            (ii) by striking subparagraph (C) and by 
                        redesignating subparagraphs (D), (E), and (F) 
                        as subparagraphs (C), (D), and (E), 
                        respectively.
    (c) Treatment of Leased Employees.--Paragraph (6) of section 3 (29 
U.S.C. 3(6)) is amended to read as follows:
            ``(6)(A) The term `employee' means any individual employed 
        by an employer.
            ``(B)(i) Except as provided by regulations, in the case of 
        any recipient of services performed by a leased employee--
                    ``(I) the leased employee shall be treated as an 
                employee of the recipient, except that
                    ``(II) contributions and benefits provided under a 
                plan sponsored by the leasing organization which are 
                attributable to services performed by the leased 
                employee for the recipient shall be treated as provided 
                by the recipient.
            ``(ii) For purposes of this subparagraph, the term `leased 
        employee' means any person who is not an employee of the 
        recipient and who provides services to the recipient if--
                    ``(I) such services are provided pursuant to an 
                agreement between the recipient and the leasing 
                organization, and
                    ``(II) such person has performed services for the 
                recipient (and any related persons) for at least 750 
                hours during any consecutive 12-month period described 
                in section 202(a)(3) (without regard to employment 
                status).
            ``(iii) For purposes of this subparagraph, a leased 
        employee shall be treated as an employee for periods after the 
        close of the first 12-month period the person is described in 
        clause (ii)(II).''
    (d) Employer May Not Request Employee To Waive Rights.--Section 203 
(29 U.S.C. 1053) is amended by adding at the end the following new 
subsection:
    ``(f) An employer may not request an employee to waive any right of 
coverage under, or participation in, any pension plan which is granted 
by this title.''

SEC. 103. MODEL SIMPLIFIED PENSION PLANS.

    (a) Establishment of Model Plan.--The Secretary of Labor, in 
consultation with the Secretary of the Treasury, shall prescribe by 
regulations one or more model simplified pension plans which would--
            (1) provide simplicity to employers and provide adequate 
        retirement benefits to employees upon adoption by an employer, 
        and
            (2) constitute a plan meeting the requirements of the 
        Employee Retirement Income Security Act of 1974, the Internal 
        Revenue Code of 1986, and this Act, in devising a model pension 
        plan, the Secretary shall consider the adequacy of existing 
        simplified employee pension plan alternatives and may make 
        recommendations to adopt such plans as model simplified plans.
    (b) Time for Establishment.--Regulations under subsection (a) for 
the first of such plans shall be issued within 12 months of the date of 
the enactment of this Act.

SEC. 104. PENSION COVERAGE AND ADEQUACY TASK FORCE.

    (a) Establishment.--As soon as possible after the date of the 
enactment of this Act, the Secretary of Labor shall establish a task 
force to study the problems relating to coverage and adequacy of 
benefits of employees under pension plans and the needs of employees 
under pension plans. The task force shall include balanced 
representation of employers, employees, experts in retirement policy, 
and such other individuals as the Secretary of Labor deems appropriate.
    (b) Report.--The Secretary of Labor shall, no later than 18 months 
after the date of the enactment of this Act, report the results of the 
study to Congress under subsection (a), including recommendations for 
enhancing coverage and adequacy of benefits of employees under pension 
plans.

        Subtitle B--Right to Fair Treatment in Earning Benefits

SEC. 111. RIGHT TO VESTING.

    (a) Elimination of Special Vesting Rule for Multiemployer Plans.--
Paragraph (2) of section 203(a) (29 U.S.C. 1053(a)(2)) is amended--
            (1) by striking ``subparagraph (A), (B), or (C)'' and 
        inserting ``subparagraph (A) or (B)'', and
            (2) by striking subparagraph (C).
    (b) Immediate Vesting of Employer Contributions to Defined 
Contribution Plan.--Paragraph (1) of section 203(a) (29 U.S.C. 
1053(a)(1)) is amended to read as follows:
            ``(1) A plan satisfies the requirements of this paragraph 
        if--
                    ``(A) an employee's rights in the employee's 
                accrued benefit derived from the employee's own 
                contributions are nonforfeitable, and
                    ``(B) in the case of an individual account plan, an 
                employee's rights in the employee's accrued benefit 
                derived from employer contributions are nonforfeitable.

SEC. 112. ACCRUAL OF BENEFITS.

    (a) Integration With Social Security and Similar Benefits.--Section 
204 (29 U.S.C. 1054) is amended by redesignating subsection (i) as 
subsection (j) and by inserting after subsection (h) the following new 
subsection:
    ``(i) Integration With Social Security and Similar Benefits.--
            ``(1) In general.--Notwithstanding any other provision of 
        law, a pension plan shall not be treated as meeting the 
        requirements of this section or section 203, for contributions 
        made after January 1, 1995, unless the plan meets such 
        requirements without taking into account contributions or 
        benefits under chapter 2 or 21 of the Internal Revenue Code of 
        1986, title II of the Social Security Act, or any other Federal 
        or State law.
            ``(2) Exception for defined benefit plans.--
                    ``(A) In general.--A defined benefit plan shall not 
                be treated as failing to meet the requirement of 
                paragraph (1) merely because the plan provides that the 
                employer-derived accrued retirement benefit for any 
                participant under the plan may not exceed the excess 
                (if any) of--
                            ``(i) the participant's final pay with the 
                        employer, over
                            ``(ii) the employer-derived retirement 
                        benefit created under Federal or State law 
                        attributable to service by the participant with 
                        the employer.
                For purposes of this clause, the employer-derived 
                retirement benefit created under Federal or State law 
                shall be treated as accruing ratably over 35 years.
                    ``(B) Final pay.--For purposes of this paragraph, 
                the participant's final pay is the compensation (as 
                defined in section 414(q)(7) of the Internal Revenue 
                Code of 1986) paid to the participant by the employer 
                for any year--
                            ``(i) which ends during the 5-year period 
                        ending with the year in which the participant 
                        separated from service for the employer, and
                            ``(ii) for which the participant's total 
                        compensation from the employer was highest.''
    (b) Limitation on Conditioning of Employer Contributions on 
Employee Contributions.--Section 204 (29 U.S.C. 1054), as amended by 
subsection (a), is amended by redesignating subsection (j) as 
subsection (k) and by inserting after subsection (i) the following new 
subsection:
    ``(j) No Mandatory Contributions for Employees Below Social 
Security Wage Base.--Notwithstanding any other provision of law, a 
pension plan shall not be treated as meeting the requirements of this 
Act if the plan requires an employee whose compensation for a plan year 
does not exceed the contribution and benefit base under section 230 of 
the Social Security Act for the calendar year in which the plan year 
begins to make a contribution for purposes of employer contributions. 
Nothing in this subsection shall be construed as preventing an employer 
from permitting an employee to match the amount of employer 
contributions.''
    (c) Years of Service for Subsidized Early Retirement Benefits.--
Section 204(b)(4) (29 U.S.C. 1054(b)(4)), as amended by section 
102(b)(3)(B), is amended by adding at the end the following new 
subparagraph:
                    ``(F)(i) For purposes of this subparagraph, in 
                computing the amount of the nonforfeitable accrued 
                benefit of an employee with respect to a subsidized 
                early retirement benefit provided by a plan, there 
                shall be taken into account all years of service with 
                the employer maintaining the plan if the participant 
                subsequently satisfies the conditions for the 
                subsidized early retirement benefit while working for a 
                successor employer.''
    (d) Uniform Rate of Accrual.--Section 204 (29 U.S.C. 1054), as 
amended by subsections (a) and (b), is amended by redesignating 
subsection (k) as subsection (l) and by inserting after subsection (j) 
the following new subsection:
    ``(k) Uniform Rate of Accrual.--Except as provided in subsection 
(b)(1)(H), all employees shall, regardless of age or length of service, 
accrue benefits, and receive allocations including employer 
contributions, at the same rate for each year of service subject to 
existing permitted limits for maximum benefits or years of service.''
    (e) Guidelines for Rates of Accrual.--The Secretary of Labor shall 
issue guidelines which recommend rates of accrual under pension plans 
which will result in the accrual of a level of benefits at normal 
retirement age which is sufficient to maintain the average 
participant's preretirement standard of living. Such guidelines shall 
also recommend methods by which such benefits should be adjusted to 
protect the participant from increases in the cost-of-living upon 
retirement.

                 Subtitle C--Right to Adequate Funding

SEC. 121. FUNDING REQUIREMENTS.

    (a) 15-Year Amortization of Benefit Increases.--Clause (iii) of 
section 302(b)(2)(B) (29 U.S.C. 1082(b)(2)(B)(iii)) is amended by 
striking ``30 plan years (20 plan years in the case of a multiemployer 
plan)'' and inserting ``15 plan years''.
    (b) Actuarial Assumptions.--
            (1) In general.--Subparagraph (A) of section 302(c)(3) (29 
        U.S.C. 1082(c)(3)(A)) is amended to read as follows:
                    ``(A) each of which is reasonable (taking into 
                account the experience of the plan and reasonable 
                expectations), and''.
            (2) Secretary may establish ranges.--Section 302(c)(3) (29 
        U.S.C. 1092(c)(3)) is amended by adding at the end the 
        following new sentence: ``Notwithstanding any other provision 
        of law, the Secretary, in consultation with the Secretary of 
        the Treasury, shall establish for each calendar quarter a range 
        of recommended actuarial assumptions for plans for the quarter. 
        An actuary of a plan may deviate from the range if the actuary 
        is able to demonstrate that such deviation is reasonable for 
        the plan.''

SEC. 122. SAFEGUARDS FOR ANNUITIES PURCHASED UPON PLAN TERMINATIONS.

    (a) Fiduciary Responsibility.--Section 404 is amended by adding at 
the end the following new subsection:
    ``(d) A fiduciary shall ensure that the benefits of participants 
and beneficiaries are fully protected under Federal or State law upon 
the purchase of any irrevocable insurance annuity contract.''
    (b) Certification of Insurers.--
            (1) In general.--Section 4041(b)(3) of such Act (29 U.S.C. 
        1341(b)(3)) is amended--
                    (A) in subparagraph (A)(i), by inserting ``, with 
                respect to which all required insurance certificates 
                have been received by the corporation in accordance 
                with subparagraph (B),'' after ``insurer'',
                    (B) by redesignating subparagraph (B) as 
                subparagraph (C), and
                    (C) by inserting after subparagraph (A) the 
                following new subparagraph:
                    ``(B) Prior insurance certification.--
                            ``(i) In general.--For purposes of 
                        subparagraph (A), the assets of the plan which 
                        are distributed by means of the purchase of 
                        irrevocable commitments from an insurer shall 
                        not be treated as distributed in accordance 
                        with section 4044 unless, prior to the 
                        distribution date, the corporation receives 
                        from the plan an insurance certificate as 
                        described in clause (ii).
                            ``(ii) Insurance certificate.--An insurance 
                        certificate referred to in clause (i) shall 
                        consist of a written document, certified by the 
                        Insurance Commissioner (or similar official) of 
                        the State in which the insurer is domiciled not 
                        earlier than 30 days before the commencement of 
                        the final distribution of assets, certifying 
                        that--
                                    ``(I) the insurer is licensed by 
                                the State involved to do business in 
                                such State,
                                    ``(II) the law of the State 
                                involved provides for the maintenance 
                                by the State of a fund which is 
                                responsible, on the failure of an 
                                insurer licensed to do business within 
                                the State on the termination date, to 
                                pay, as the second payor, all promised 
                                benefits described in clause (i) to 
                                participants or beneficiaries who, on 
                                the termination date, were residents of 
                                the State and maintains reciprocity 
                                agreements providing equivalent 
                                guarantees with States covering 
                                participants and beneficiaries who are 
                                residents of other States, and
                                    ``(III) such fund has reserves 
                                sufficient to meet (or legal authority 
                                to collect sufficient funds to meet on 
                                a timely basis) all reasonably 
                                foreseeable obligations of such fund.''
            (2) Conforming amendment.--Section 4041(b)(4) of such Act 
        (29 U.S.C. 1341(b)(4)) is amended by striking ``paragraph 
        (3)(B)'' and inserting ``paragraph (3)(C)''.
    (c) Premium Requirements on Insurers.--
            (1) In general.--Subtitle A of title IV is amended by 
        adding at the end the following new part:

                      ``Part 2--Annuity Insurance

                         ``payment of premiums

    ``Sec. 4011. (a) In General.--The corporation may establish a 
separate premium system to fund the guaranteed payment of retirement 
benefits to participants and beneficiaries covered by annuity 
contracts. Such system may include--
            ``(1) a premium for participants or beneficiaries who had 
        been annuitized before the effective date of this section, and
            ``(2) may provide for a one-time premium rather than annual 
        premiums.
    ``(b) Use of Funds.--The corporation may allocate premiums received 
under this section to any of the funds established under section 4005 
or may establish a separate fund which is used only to pay amounts 
guaranteed by reason of section 4011.''
            (2) Conforming amendments.--
                    (A) Section 4001(a)(5) is amended by inserting ``or 
                4011(c)'' after ``4005''.
                    (B) Subtitle B of title IV is amended by inserting 
                immediately after the heading:

                    ``Part 1--General Provisions''.

                    (C) The table of contents for subtitle B of title 
                IV is amended--
                            (i) by inserting after the item relating to 
                        subtitle B the following new item:

                    ``Part 1--General Provisions'',

                        and
                            (ii) by inserting at the end the following 
                        new items:

                      ``Part 2--Annuity Insurance

``Sec. 4011. Payment of premiums.''

SEC. 123. PROHIBITION ON RETROACTIVE TERMINATION OF PLANS.

    Paragraph (1) of section 4041(a) (29 U.S.C. 1341(a)(1)) is amended 
by adding at the end the following new sentence: ``Any such termination 
may occur only after approval by the corporation.''

SEC. 124. INVESTMENT OF PLAN ASSETS.

    Subparagraph (B) of section 404(a)(1) (29 U.S.C. 1104(a)(1)(B)) is 
amended to read as follows:
                            ``(i) with the care, skill, prudence, and 
                        diligence under the circumstances then 
                        prevailing that a prudent person acting in a 
                        like capacity and familiar with such matters 
                        would use in the conduct of an enterprise of a 
                        like character and with like aims; and
                            ``(ii) by investing the assets of the plan 
                        so as to ensure the economic security and long-
                        term interests of the participants and 
                        beneficiaries;''.

                    Subtitle D--Pension Portability

SEC. 131. REQUIREMENT OF PORTABLE PENSION ACCOUNTS.

    (a) In General.--Part 2 of subtitle B of title I (29 U.S.C. 1051 et 
seq.) is amended by inserting after section 205 the following new 
section:

       ``portability requirements for defined contribution plans

    ``Sec. 205A. (a) Direct Transfers.--
            ``(1) In general.--Each defined contribution plan shall, at 
        the election of an employee upon separation from service, make 
        a direct trustee-to-trustee transfer of the portion of the 
        employee's eligible amount specified in the election to a 
        portable pension account specified in the election which--
                    ``(A) is maintained by a qualified pension plan 
                which voluntarily agrees to accept the transfer, or
                    ``(B) is established by the individual on the 
                individual's own behalf.
            ``(2) Time for transfer.--The transfer under paragraph (1) 
        shall be made no later than 60 days after the date of the 
        employee's separation from service unless the parties agree to 
        a transfer at a later date.
    ``(b) Portable Pension Accounts.--For purposes of this section--
            ``(1) In general.--The term `portable pension account' 
        means--
                    ``(A) in the case of a qualified pension plan, an 
                individual account plan, an individual account within 
                the plan, or simplified employee pension under section 
                408(k) of the Internal Revenue Code of 1986 meeting the 
                requirements of the following paragraphs of this 
                subsection, and
                    ``(B) in the case of an individual, an individual 
                retirement plan meeting such requirements.
            ``(2) Distribution requirements.--
                    ``(A) In general.--The requirements of this 
                paragraph are met if distributions from the account--
                            ``(i) may only be made in a permitted 
                        retirement income form, and
                            ``(ii) may only be made with the consent of 
                        the participant.
                    ``(B) Permitted retirement income form.--For 
                purposes of subparagraph (A), a permitted retirement 
                income form is as follows:
                            ``(i) A qualified joint and survivor 
                        annuity (within the meaning of section 205(d)).
                            ``(ii) Any other joint life annuity 
                        (including a cash refund annuity).
                            ``(iii) A single life annuity (including a 
                        cash refund annuity).
                            ``(iv) Any series of substantially equal 
                        periodic payments described in section 
                        72(t)(2)(A)(iv) of the Internal Revenue Code of 
                        1986 which are not part of an annuity described 
                        in the preceding clauses.
            ``(3) Spousal consent.--The requirements of this paragraph 
        shall not be met unless the account provides that any election 
        as to form of benefit must meet spousal consent requirements 
        which are identical to the requirements of section 205(c)(2).
    ``(c) Eligible Amount.--For purposes of this section the term 
`eligible amount' means, with respect to any participant, the balance 
to the credit of the participant as of the date of the distribution, 
including interest on such balance through the date of the 
distribution.
    ``(d) Other Definitions and Rules.--For purposes of this section--
            ``(1) Qualified plan.--The term `qualified plan' means--
                    ``(A) a plan described in section 401(a) of the 
                Internal Revenue Code of 1986 which includes a trust 
                which is exempt from tax under section 501(a) of such 
                Code,
                    ``(B) an annuity plan described in section 403(a) 
                of such Code, and
                    ``(C) an annuity contract described in section 
                403(b) of such Code.
            ``(2) Individual retirement plan.--The term `individual 
        retirement plan' means--
                    ``(A) an individual retirement account described in 
                section 408(a) of such Code, and
                    ``(B) an individual retirement annuity described in 
                section 408(b) of such Code.
            ``(3) Beneficiaries or alternate payees.--In the case of an 
        individual who is a beneficiary of the participant or an 
        alternate payee (within the meaning of section 206(d)(3)(K)) 
        under a plan, such individual shall be treated in the same 
        manner as if a participant in the plan.''
    (b) Conforming Amendments.--
            (1) Section 204(g)(2) of such Act (29 U.S.C. 1054(g)(2)) is 
        amended by adding at the end the following new sentence: 
        ``Except as otherwise provided in regulations of the Secretary 
        of Labor and the Secretary of the Treasury, the requirements of 
        subparagraph (B) shall not be treated as violated in the case 
        of a direct trustee-to-trustee transfer described in section 
        205A.''
            (2) Section 204(d) of such Act (29 U.S.C. 1054(d)) is 
        amended--
                    (A) in paragraph (1), by striking ``or'',
                    (B) in paragraph (2), by striking the period and 
                inserting ``, or'', and
                    (C) by inserting after paragraph (2) the following 
                new paragraph:
            ``(3) a direct trustee-to-trustee transfer described in 
        section 205A.''
            (3) The table of contents for part 2 of subtitle B of title 
        I of such Act is amended by inserting after the item relating 
        to section 205 the following new item:

``Sec. 205A. Portability requirements for defined contribution plans.''

SEC. 132. RECIPROCITY AGREEMENTS BETWEEN INDUSTRY AND LABOR FUNDS.

    (a) Establishment.--The Secretary of Labor shall establish 
guidelines for plans maintained pursuant to collective bargaining 
agreements between employers and employee representatives in order to 
assist and encourage 2 or more plans to enter into agreements under 
which--
            (1) the plans would maintain portable pension accounts 
        described in section 205A of the Employee Retirement Income 
        Security Act of 1974 (as added by section 121) for employees 
        who terminate employment covered by 1 plan and begin employment 
        covered by another, or
            (2) the plans would make arrangements for employees to 
        transfer accrued benefits and vesting rights from one plan to 
        another.

SEC. 133. INFLATION ADJUSTMENT FOR DEFERRED VESTED BENEFITS.

    (a) In General.--Section 203 (29 U.S.C. 1053) is amended by adding 
at the end the following new subsection:
    ``(f) Deferred Nonforfeitable Benefits.--If an employee's 
participation in a defined benefit plan is terminated before the date 
the employee is eligible for payment of an immediate annuity under the 
plan--
            ``(1) subsection (e) shall not apply, and
            ``(2) the plan shall provide that the employee may elect--
                    ``(A) to have the plan immediately distribute, 
                subject to section 205 of this Act, the present value 
                (using the interest rate specified by the Secretary) of 
                the employee's nonforfeitable benefit, or
                    ``(B) to have the plan provide inflation 
                adjustments (at the rates specified by the Secretary) 
                to such benefit during the period beginning with the 
                date of separation and ending with the date the 
                earliest benefit is received under the plan.''
    (b) Accrued Benefit.--Section 204(d) (29 U.S.C. 1054(d)) is amended 
by adding at the end the following new sentence: ``An employee's 
accrued benefit under a plan shall be increased by any inflation 
adjustment under section 203(f)(2)(B).''

                       Subtitle E--Spousal Rights

SEC. 141. DIVISION OF PENSION BENEFITS UPON DIVORCE.

    (a) In General.--Section 206 (29 U.S.C. 1056) is amended by adding 
at the end the following new subsection:
    ``(e)(1) In the case of a divorce of a participant in a pension 
plan from a spouse who is, immediately before the divorce, a 
beneficiary under the plan, the plan shall provide that at least 50 
percent of the marital share of the accrued benefit (as of the date of 
the divorce) of the participant under the plan ceases to be an accrued 
benefit of such participant and becomes an accrued benefit of such 
divorced spouse. Such accrued benefit shall be determined and payable 
upon the earliest of the retirement of the participant, the 
participant's normal retirement age under the plan, the participant's 
death, or the termination of the plan. This paragraph shall not apply 
to the extent that a qualified domestic relations order in connection 
with such divorce provides otherwise.
    ``(2) Paragraph (1) shall not be construed--
            ``(A) to require a plan to provide any type or form of 
        benefit, or any option, not otherwise provided under the plan,
            ``(B) to require the plan to provide increased benefits 
        (determined on the basis of actuarial value),
            ``(C) to require the payment of benefits to the divorced 
        spouse which are required to be paid to another individual in 
        accordance with this subsection or pursuant to a domestic 
        relations order previously determined to be a qualified 
        domestic relations order, or
            ``(D) to require payment of benefits to the divorced spouse 
        in the form of a joint and survivor annuity with respect to the 
        divorced spouse and the divorced spouse's subsequent spouse.
    ``(3) For purposes of this subsection--
            ``(A) The terms `domestic relations order' and `qualified 
        domestic relations order' have the meanings given such terms by 
        subsection (d)(3)(B).
            ``(B) The term `marital share' means, in connection with an 
        accrued benefit under a pension plan, the product derived by 
        multiplying--
                    ``(i) the actuarial present value of the accrued 
                benefit, by
                    ``(ii) a fraction--
                            ``(I) the numerator of which is the period 
                        of time, starting with the date of marriage and 
                        ending with the date of divorce between the 
                        spouse and the participant in the plan, which 
                        constitutes creditable service by the 
                        participant under the plan, and
                            ``(II) the denominator of which is the 
                        total period of time which constitutes the 
                        years of participation by the participant under 
                        the plan.
            ``(C) The term `qualified joint and survivor annuity' has 
        the meaning given such term by section 205(d).
    ``(4) In prescribing regulations under this subsection, the 
Secretary shall consult with the Secretary of the Treasury.''
    (b) Conforming Amendments.--Section 206(d) (29 U.S.C. 1056(d)) is 
amended--
            (1) in the first sentence of paragraph (3), by inserting 
        ``or if such creation, assignment, or recognition pursuant to 
        such order is necessary for compliance with the requirements of 
        subsection (e)'' before the period,
            (2) in paragraph (3)(D)(iii), by inserting ``or to a 
        divorced spouse of the participant in connection with a 
        previously occurring divorce as required under subsection (e)'' 
        before the period, and
            (3) in paragraph (3)(H)(iii), by striking ``if there had 
        been no order'' and inserting ``in accordance with subsection 
        (e) as if there had been no qualified domestic relations 
        order''.

SEC. 142. EXTENSION OF APPLICATION OF JOINT AND SURVIVOR ANNUITY RULES.

    (a) In General.--Section 205(a) (29 U.S.C. 1055(a)) is amended by 
inserting ``and each plan described in subsection (l)'' after 
``applies''.
    (b) Plans Affected.--Section 205 (29 U.S.C. 1055) is amended by 
redesignating subsection (l) as subsection (m) and by inserting after 
subsection (k) the following new subsection:
    ``(l)(1) A plan is described in this subsection if it is--
            ``(A) a qualified cash or deferred arrangement described in 
        section 401(k) of the Internal Revenue Code of 1986,
            ``(B) an annuity contract described in section 403(b) of 
        such Code,
            ``(C) a simplified employee pension described in section 
        408(k) of such Code, or
            ``(D) an individual retirement plan (as defined in section 
        7701(a)(37)) of such Code.
    ``(2) For purposes of this section, an individual for whom an 
arrangement, contract, pension, or plan was purchased or established 
shall be treated as the participant.
    ``(3) If a plan described in this subsection is administered by a 
person which is not authorized by law to make payments in a form 
required by this section, such person shall make such payments as a 
stream of payments determined on the basis of the joint life 
expectancies of the participant and the participant's spouse or may 
purchase an annuity contract providing benefits in a joint and survivor 
form.''

SEC. 143. MODIFICATIONS OF JOINT AND SURVIVOR AND PRERETIREMENT 
              SURVIVOR ANNUITY REQUIREMENTS.

    (a) Consent Form.--Section 205(c) (29 U.S.C. 1055(c)) is amended by 
adding at the end the following new paragraph:
            ``(8) The Secretary, in consultation with the Secretary of 
        Treasury, shall develop a form for the spousal consent required 
        under paragraph (2) which--
                    ``(A) is written in a manner calculated to be 
                understood by the average person, and
                    ``(B) discloses in plain form whether--
                            ``(i) the waiver is irrevocable, and
                            ``(ii) the waiver may be changed by a 
                        qualified domestic relations order in the event 
                        of a legal separation or divorce.''
    (b) Preretirement Annuity Available to Former Spouses.--
            (1) In general.--Paragraph (2) of section 205(a) (29 U.S.C. 
        1055(a)(2)) is amended--
                    (A) by inserting ``or an eligible surviving former 
                spouse'' after ``a surviving spouse'', and
                    (B) by inserting ``or to the eligible surviving 
                former spouse'' after ``the surviving spouse''.
            (2) Eligible surviving former spouse.--Section 205(h) (29 
        U.S.C. 1055(h)) is amended by adding at the end the following 
        new paragraph:
            ``(4) The term `eligible surviving former spouse' means, 
        with respect to any participant in a pension plan, a former 
        spouse of the participant who survives the participant but only 
        if--
                    ``(A) there is no qualified domestic relations 
                order providing for a payment other than a qualified 
                preretirement survivor annuity to the former spouse,
                    ``(B) the participant did not choose any other 
                beneficiary under the plan after the divorce, and
                    ``(C) under the plan there is no surviving spouse 
                eligible for a qualified preretirement survivor 
                annuity.''
    (c) Amount of Annuity.--
            (1) Joint and survivor annuity.--Paragraph (1) of section 
        205(d) (29 U.S.C. 1055(d)(1)) is amended by striking ``50 
        percent'' and inserting ``66 2/3 percent''.
            (2) Preretirement annuity.--Paragraph (2) of section 205(e) 
        (29 U.S.C. (e)(2)) is amended by striking ``50 percent'' and 
        inserting ``66 2/3 percent''.

           TITLE II--PROTECTION OF EMPLOYEES' PENSION RIGHTS

                    Subtitle A--Benefit Information

SEC. 201. PLAN OR EMPLOYER REPRESENTATIONS.

    (a) In General.--Part 5 of subtitle B of title I (29 U.S.C. 1131 et 
seq.) is amended by adding at the end the following new section:

             ``reliance on employer or plan representations

    ``Sec. 516. (a) Prohibition on Misrepresentation.--No employer, 
plan administrator, or fiduciary shall misrepresent to employees, 
participants, or beneficiaries their rights under an employee benefit 
plan.
    ``(b) Reliance.--In any action brought under this title to enforce 
any right of a participant or beneficiary under an employee benefit 
plan, the participant or beneficiary shall have a right to reasonably 
rely on all written documents provided by the plan administrator or 
employer maintaining the plan.
    ``(c) Corrections.--Nothing in the section shall preclude a plan 
administrator, fiduciary, or employer from correcting any mistake 
within a reasonable period of time. The Secretary may issue regulations 
to define a reasonable period of time.''
    (b) Conforming Amendment.--The table of contents for part 5 of 
subtitle B of title I is amended by inserting at the end the following 
new item:

``Sec. 516. Reliance on employer or plan representations.''

SEC. 202. NOTICE OF RIGHTS.

    (a) Time for Filing Annual Report.--Section 104(a)(1)(A) (29 U.S.C. 
1024(a)(1)(A)) is amended by striking ``210 days'' and inserting ``105 
days''.
    (b) Advance Notice of Material Changes.--Section 104(b) (29 U.S.C. 
1024(b)) is amended by adding at the end the following new paragraph:
            ``(5) The administrator shall furnish to each participant, 
        and to each beneficiary receiving benefits under the plan, 
        notice of any material modification to the plan referred to in 
        section 102(a)(2) at least 60 days before the modification is 
        to take effect.''
    (c) Notice of Retirement Benefit Earnings.--
            (1) Application to multiemployer plans.--Section 105 (29 
        U.S.C. 1025) is amended by striking subsection (d).
            (2) Model statements.--The Secretary of Labor shall develop 
        a model benefit statement to be used by plan administrators in 
        complying with the requirements of section 105 of the Employee 
        Retirement Income Security Act of 1974. Such statement shall 
        include--
                    (A) the amount of nonforfeitable accrued benefits 
                as of the statement date which is payable at normal 
                retirement age under the plan,
                    (B) the amount of accrued benefits which are 
                forfeitable but which may become nonforfeitable under 
                the terms of the plan,
                    (C) the amount or percentage of any reduction due 
                to integration of the benefit with the participant's 
                Social Security benefits or similar governmental 
                benefits,
                    (D) information on how to contact the Social 
                Security Administration to obtain a participant's 
                personal earnings and benefit estimate statement, and
                    (E) information on early retirement benefit and 
                joint and survivor annuity reductions.
    (d) Department of Labor Assistance.--Section 104 (29 U.S.C. 1024) 
is amended by redesignating subsection (d) as subsection (e) and by 
inserting after subsection (c) the following new subsection:
    ``(d) The Secretary of Labor shall establish a program to assist 
participants and beneficiaries in receiving in a timely manner any 
information they are entitled to receive under this Act.''
    (e) Penalties.--Section 502(c) (29 U.S.C. 1132(c)) is amended by 
adding at the end the following new paragraph:
            ``(5) The Secretary may assess a civil penalty against any 
        person failing to file any report, or to make any disclosure, 
        required by this title of up to $1,000 per day from the initial 
        date of the failure. The Secretary may waive or reduce any 
        penalty if the Secretary determines that the plan administrator 
        or fiduciary acted reasonably and in good faith or the 
        responsible party will not be able to comply without severe 
        financial hardship. This paragraph shall not apply to any 
        failure covered by any other paragraph of this subsection.''

             Subtitle B--Investment Information and Advice

SEC. 211. AUDITS.

    (a) Full Scope Audits.--Subparagraph (C) of section 103(a)(3) (29 
U.S.C. 1023(a)(3)(C)) is amended by adding at the end the following new 
sentence: ``This subparagraph shall not apply to any plan with 100 or 
more participants and in the case of a plan with fewer than 100 
participants, shall only apply to the first 2 years of each successive 
3-fiscal year period.''
    (b) Material Irregularities.--Section 103(a)(3) (29 U.S.C. 
1023(a)(3)) is amended by adding at the end the following new 
subparagraph:
                    ``(E)(i) If an independent qualified public 
                accountant discovers any material irregularities in the 
                examination conducted under this paragraph for any 
                year, the accountant shall report such errors to the 
                plan administrator.
                    ``(ii) If the errors described in clause (i) are 
                not corrected within 60 days, the independent qualified 
                public accountant shall report the uncorrected errors 
                to the Secretary in such form and manner as the 
                Secretary prescribes.''

SEC. 212. SPECIFIC INFORMATION ON PLAN ASSETS AND TRANSACTIONS.

    (a) Administrative Expenses; Returns.--
            (1) In general.--Subparagraph (B) of section 103(b)(3) (29 
        U.S.C. 1023(b)(3)(B)) is amended by inserting ``, including a 
        separate, specific listing of the administrative costs of the 
        plan, such as broker fees and other transaction fees'' after 
        ``applications''.
            (2) Rates of return.--Subparagraph (C) of section 103(b)(3) 
        (29 U.S.C. 1023(b)(3)(C)) is amended by inserting ``, including 
        the rate of return on the assets for the year'' after 
        ``value''.
    (b) Proxy Votes.--Section 104(b) (29 U.S.C. 1024(b)), as amended by 
section 202(b), is amended by adding at the end the following new 
paragraph:
            ``(6)(A) Participants shall have the right to 
        confidentially vote any pension assets within their 
        discretionary control.
            ``(B) The administrator shall provide participants and 
        beneficiaries with copies of plan investment and proxy voting 
        policies and, within 60 days of a written request of any 
        participant or beneficiary regarding a proxy vote, notify the 
        participant or beneficiary of the status and plan action on the 
        requested proxy votes.
            ``(C) A plan administrator may request the Secretary to 
        waive the requirements of subparagraph (B) if the administrator 
        believes the request was made for the purpose of harassment. 
        The Secretary shall make a determination under this 
        subparagraph within 45 days of the administrator's request.''
    (c) Transactions Involving Parties in Interest.--Subparagraph (D) 
of section 103(b)(3) (29 U.S.C. 1023(b)(3)(D)) is amended--
            (1) by inserting ``(including transactions involving assets 
        disposed of before the end of the year and transactions exempt 
        under section 408)'' after ``party in interest'' the first 
        place it appears, and
            (2) by inserting ``in the case of an exempt transaction, 
        the reasons why the transaction is exempt under section 408'' 
        before ``the cost of''.

SEC. 213. PENSION ADVISORY COMMITTEES.

    (a) Establishment.--Participants and beneficiaries covered by a 
pension plan may request that the plan establish a pension advisory 
committee to provide participant advice and involvement in plan 
investment decisions. The committee shall be open to all interested 
participants and beneficiaries.
    (b) Rights.--
            (1) Information.--Each pension advisory committee under 
        subsection (a) shall have the right to receive, upon written 
        request, information with respect to plan investment and proxy 
        voting decisions.
            (2) Meetings.--Each pension advisory committee under 
        subsection (a) may select a board of directors and may conduct 
        such meetings as deemed necessary to provide advice on plan 
        decisions. The plan administrator or the board of trustees of a 
        pension plan shall meet annually with the board of directors to 
        hear its views on pension plan investment decisions.

SEC. 214. STUDY OF EMPLOYEE REPRESENTATION ON PENSION BOARDS.

    The Secretary of Labor shall, within 18 months after the date of 
the enactment of this Act, conduct a study and report to the Congress 
on the feasibility of requiring representation of employees, 
independent trustees, or both, on the board of trustees of pension 
plans.

   Subtitle C--Assistance of Department of Labor in Enforcing Rights

SEC. 221. DEPARTMENT OF LABOR REQUIRED TO PROVIDE ASSISTANCE.

    (a) In General.--The Secretary of Labor shall--
            (1) establish a program to assist participants and 
        beneficiaries in understanding their rights to benefits under 
        employee benefit plans, and
            (2) to the extent feasible, assist participants in 
        obtaining such benefits, including through civil actions under 
        section 502 of the Employee Retirement Income Security Act of 
        1974.
    (b) Interagency Program.--The Secretary of Labor shall establish a 
program with the Secretary of the Treasury and the heads of other 
appropriate Federal agencies which shall--
            (1) coordinate assistance to participants and beneficiaries 
        in obtaining documents and pursuing benefit claims,
            (2) provide for the issuance of opinions and advice on 
        applicable Federal law and regulations, and
            (3) provide for the referral of benefit claims to the 
        appropriate Internal Revenue Service district office to 
        determine compliance with applicable Federal law and 
        regulations and to the regional office of the Department of 
        Labor to protect individual benefit rights.
The secretary of labor shall designate an employee to serve as the 
ombuds officer to coordinate and supervise the program.
    (c) Voluntary Assistance Fund.--
            (1) In general.--The Secretary of Labor may establish a 
        voluntary assistance fund which shall consist of voluntary 
        contributions from employers, employee benefit plans, and other 
        individuals to supplement departmental assistance to 
        participants, beneficiaries, and plans.
            (2) Use of funds.--Amounts received shall be held in a 
        separate trust fund and are appropriated to supplement 
        assistance in the programs described in subsections (a) and 
        (b).
            (3) Report.--The Secretary of Labor shall report to the 
        Congress each year on the receipts and disbursements of the 
        fund for the preceding year. The report shall include the 
        Secretary's recommendations on requiring mandatory 
        contributions to the fund.

SEC. 222. IMPROVEMENTS IN CLAIMS PROCEDURE.

    (a) Claims Review Requirements.--Section 503 (29 U.S.C. 1133) is 
amended--
            (1) by inserting ``(a) In General.--'' after ``Sec. 503.''; 
        and
            (2) by adding at the end the following new subsection:
    ``(b) Claims Review Requirements for Employee Benefit Plans.--
            ``(1) In general.--An employee benefit plan shall be 
        treated as complying with the requirements of subsection (a) 
        only if such plan complies with the following requirements:
                    ``(A) Time limit for consideration of completed 
                claims.--An employee benefit plan shall provide to any 
                participant or beneficiary claiming benefits under the 
                plan a written notice of the plan's approval or denial 
                of the claim within 60 days after submission of the 
                claim under reasonable procedures established by the 
                plan. In any case in which the claim is denied, the 
                plan shall, within 5 days after the date of the 
                determination to deny the claim, provide the claimant 
                with a written notice setting forth the reasons for the 
                denial, together with notice of the right to and 
                procedures to appeal the denial under subparagraph (B).
                    ``(B) Plan's duty to review denials upon timely 
                request.--The plan shall review its denial of the claim 
                if the claimant submits to the plan a written request 
                for reconsideration of the claim before 60 days after 
                receipt of written notice from the plan of the denial. 
                The plan shall waive the 60-day limit if the 
                participant or beneficiary demonstrates a reasonable 
                basis for not being able to comply with such 
                requirement.
                    ``(C) Time limit for review.--The plan shall 
                complete any review required under subparagraph (B), 
                and shall provide written notice of the plan's decision 
                pursuant to such review, before 60 days after receipt 
                of the request for reconsideration.
                    ``(D) De novo reviews.--Any review required under 
                subparagraph (B)--
                            ``(i) shall be de novo,
                            ``(ii) shall be conducted by an individual 
                        who did not make the initial decision denying 
                        the claim and who is authorized to approve 
                        payment of the claim, and
                            ``(iii) shall include review by a qualified 
                        physician if the resolution of any issues 
                        involved requires medical expertise.
            ``(2) Emergency request for preauthorization.--
                    ``(A) In general.--This paragraph applies in the 
                case of any request by or on behalf of a participant or 
                beneficiary for preauthorization of services which is 
                submitted to a group health plan prior to receipt of 
                such services and which involves urgent treatment for a 
                life-threatening illness.
                    ``(B) Shortened time limit for consideration of 
                requests for preauthorization.--Notwithstanding 
                paragraph (1)(A), a group health plan shall approve or 
                deny any request described in subparagraph (A) before 
                24 hours after submission of the request to the plan.
                    ``(C) Expedited review.--The plan shall review, 
                upon request of a participant or beneficiary, any 
                determination to deny a request for preauthorization 
                described in subparagraph (A) before 5 days after the 
                date of the request. Any such review shall be conducted 
                in accordance with the requirements of paragraph (1)(D) 
                as if the request were a claim to which such paragraph 
                applies.
                    ``(D) Expedited exhaustion of plan remedies.--Upon 
                completion of the review required under subparagraph 
                (C), the request for preauthorization shall be treated 
                as a claim with respect to which all remedies under the 
                plan provided pursuant to this section are exhausted 
                for purposes of further action under this part.
                    ``(E) Denial of previously authorized claims not 
                permitted.--In any case in which a group health plan 
                approves the request of any person for preauthorization 
                described in subparagraph (A)--
                            ``(i) the plan may not subsequently deny 
                        any claim by such person for such services, 
                        unless the plan makes a showing of intentional 
                        misrepresentation of a material fact by such 
                        person, and
                            ``(ii) if the claim is denied by the plan 
                        in violation of clause (i), all remedies under 
                        the plan provided pursuant to this section with 
                        respect to such claim shall be treated as 
                        exhausted for purposes of further action on the 
                        claim under this part.
                    ``(F) Group health plan.--For purposes of this 
                paragraph, the term `group health plan' means any 
                employee welfare benefit plan that provides health care 
                benefits to participants or beneficiaries directly or 
                through insurance, reimbursement, or otherwise.''
    (b) Alternative Dispute Resolution Procedure.--Section 503 (29 
U.S.C. 1133), as amended by subsection (a), is amended by adding at the 
end the following new subsection:
    ``(c) Alternative Dispute Resolution Procedures.--
            ``(1) In general.--The Secretary shall establish an 
        alternative dispute resolution procedure for appeals of plan 
        benefits claims denials to which subsection (a) applies. Such 
        procedure shall be nonbinding.
            ``(2) Experts and fees.--The Secretary shall--
                    ``(A) maintain a roster of employee benefit experts 
                to serve as neutral experts in the procedure under 
                paragraph (1), and
                    ``(B) assess fees as necessary from each party to 
                cover the costs of the procedure.
        The Secretary may reduce or waive a fee under subparagraph (B) 
        on the basis of inability to pay.
            ``(3) Notice.--The Secretary shall--
                    ``(A) notify individuals of the procedure 
                established under paragraph (1) or other sources of 
                assistance in resolving benefits claim disputes, and
                    ``(B) provide model information with respect to the 
                procedure to be included in all summary plan 
                descriptions and benefit determinations.''

                     Subtitle D--Court Enforcement

SEC. 231. EFFECTIVE COURT ENFORCEMENT OF EMPLOYEE RIGHTS.

    (a) Attorneys' Fees and Court Costs.--Section 502(g) (29 U.S.C. 
1132(g)) is amended by adding at the end the following new paragraph:
            ``(3) For purposes of paragraph (1)--
                    ``(A) the court may allow a reasonable attorney's 
                fee and costs of action, including prejudgment interest 
                and expert witness fees, to a participant or 
                beneficiary who substantially prevails in an action 
                described in such paragraph (without a showing of bad 
                faith, involvement of a substantial issue of law, or 
                involvement of a large number of participants), unless 
                the court determines that the interests of justice 
                would not be served by allowing such a fee and costs; 
                and
                    ``(B) the court may allow a reasonable attorney's 
                fee and costs of action to an employer, plan, or 
                fiduciary who substantially prevails in an action 
                described in such paragraph, only if the court 
                determines that the action was frivolous.''
    (b) Awards of Damages.--Section 502 (29 U.S.C. 1132) is amended by 
adding at the end the following new subsection:
    ``(m) In any action brought under this title by a participant or 
beneficiary, a court may award reasonably foreseeable economic damages 
and noneconomic damages (not exceeding the amount of economic damages 
awarded).''
    (c) Review of Benefit Claim Denials.--Section 502(k) (29 U.S.C. 
1132(k)) is amended by adding at the end the following new sentence: 
``Any action brought under subsection (a)(1)(b), (a)(3), or after any 
final decision by the plan, shall be subject to de novo review by the 
court and the court may review all evidence presented.''
    (d) Standing.--Section 502 (29 U.S.C. 1132), as amended by 
subsection (b), is amended by adding at the end the following new 
subsection:
    ``(n) Any former participant or beneficiary, and any individual 
with a colorable claim to be a participant or beneficiary, shall be 
treated in the same manner as a participant or beneficiary for purposes 
of standing to bring a civil action under subsection (a).''
    (e) Exhaustion of Administrative Remedies With Respect To Benefit 
Claim Denials.--Section 502 (29 U.S.C. 1132), as amended by subsections 
(b) and (d), is amended by adding at the end the following new 
subsection:
    ``(o)(1) exhaustion of plan claims procedure shall only be required 
for benefit claims denials. Failure to exhaust shall be grounds for 
remand by a court.''
    (f) Ambiguous Terms in Plan.--Section 516, as added by section 201, 
is amended by redesignating subsection (c) as subsection (d) and by 
inserting after subsection (b) the following new subsection:
    ``(c) Construction of Ambiguous Terms.--For purposes of applying 
any provision of this title in an action brought under this title, the 
Secretary and any court shall construe any ambiguous term or provision 
of the documents and instruments governing the plan in favor of 
participants and beneficiaries of the plan.''
    (g) Actions Under State Law.--Section 514 (29 U.S.C. 1144) is 
amended by adding at the end the following new subsection:
    ``(e) Nothing in this section shall preclude an action from being 
brought under State law against individuals not treated as fiduciaries 
under this Act, including State malpractice actions.''

             Subtitle E--Protection Against Fraud and Abuse

SEC. 241. CRIMINAL PENALTIES.

    (a) In General.--Section 501 (29 U.S.C. 1131) is amended by adding 
at the end the following new subsection:
    ``(b) Embezzlement, Theft, or Mail Fraud.--In the case of any 
violation described in subsection (a) which involves embezzlement, 
theft, or mail fraud, a person shall, upon conviction--
            ``(1) be fined not more than the greater of $10,000, or the 
        amount involved, or
            ``(2) be imprisoned for not more than 10 years, or
            ``(3) both.''
    (b) Conforming Amendment.--Section 501 is amended by striking ``Any 
person'' and inserting ``(a) In General.--Any person''.
    (c) Effective Date.--The amendments made by this section shall 
apply to violations occurring on and after the date of the enactment of 
this Act.

SEC. 242. FIDUCIARY REQUIREMENTS.

    (a) Minimum Bond Requirement.--Section 412(a) (29 U.S.C. 1112(a)) 
is amended by inserting ``($100,000 in the case of a fiduciary)'' after 
``$1,000''.
    (b) Insurance.--Section 410 (29 U.S.C. 1110) is amended by adding 
at the end the following new subsection:
    ``(c) In addition to any bond required under section 412, the 
Secretary may by regulation require fiduciaries to purchase insurance 
to cover liability under this part from and for their own account up to 
the limits specified in the regulations.''
    (c) Waiver Prohibition.--Section 410(a) (29 U.S.C. 1110(a)) is 
amended by adding at the end the following new sentence: ``A plan may 
not waive any recourse the plan has against a fiduciary for any 
responsibility, obligation, or duty of the fiduciary under this part.''
    (d) Effective Date.--
            (1) Bonding and insurance.--The amendments made by 
        subsections (a) and (b) shall apply to plan years beginning 
        after December 31, 1994.
            (2) Waiver.--The amendment made by subsection (c) shall 
        apply on and after the date of the enactment of this Act.

SEC. 243. DISCRETIONARY AWARD FOR PERSONS PROVIDING SECRETARY WITH 
              INFORMATION LEADING TO COLLECTION.

    (a) In General.--Section 502 (29 U.S.C. 1132), as amended by 
section 231, is amended by adding at the end the following new 
subsection:
    ``(p)(1) Notwithstanding any other provision of law, the Secretary 
may pay, from amounts collected under this section, an award to the 
person or persons who provide information leading the Secretary to 
initiate an investigation, or to bring an action, which resulted in the 
collection of the amount under this section. Such award shall be 
determined by the Secretary but may not exceed 10 percent of the amount 
collected.
    ``(2) Any determinations under this subsection, including whether, 
to whom, or in what amount to make payments, shall be in the sole 
discretion of the Secretary, except that no such payment shall be made 
to any person for information gained in the course of their duties as 
an officer or employee of any Federal, State, or local government 
agency, nor shall any relative of such person receive any payment for 
such information. Any such determination shall be final and not subject 
to judicial review.''
    (b) Toll-Free Number.--The Secretary of Labor shall establish a 
toll-free number for persons to provide information described in 
section 502(p) of the Employee Retirement Income Security Act of 1974 
(as added by subsection (a)).

SEC. 244. AUDIT REQUIREMENT.

    Section 504 (29 U.S.C. 1134) is amended by adding at the end the 
following new subsection:
    ``(d) The Secretary shall audit each year a representative sample 
of plans with fewer than 100 participants.''

                       TITLE III--EFFECTIVE DATES

SEC. 301. EFFECTIVE DATES.

    (a) In General.--Except as otherwise provided in this Act, the 
amendments made by this Act shall apply to plan years beginning after 
December 31, 1994.
    (b) Special Rule for Collectively Bargained Plans.--In the case of 
a plan maintained pursuant to 1 or more collective bargaining 
agreements between employee representatives and 1 or more employers 
ratified on or before the date of the enactment of this Act, the 
amendments made by this Act shall apply to the first plan year 
beginning on or after the earlier of--
            (1) the later of--
                    (A) January 1, 1995, or
                    (B) the date on which the last of such collective 
                bargaining agreements terminates (determined without 
                regard to any extension thereof after the date of the 
                enactment of this Act), or
            (2) January 1, 1997.
    (c) Plan Amendments.--If any amendment made by this Act requires an 
amendment to any plan, such plan amendment shall not be required to be 
made before the first plan year beginning on or after January 1, 1995, 
if--
            (1) during the period after such amendment made by this Act 
        takes effect and before such first plan year, the plan is 
        operated in accordance with the requirements of such amendment 
        made by this Act, and
            (2) such plan amendment applies retroactively to the period 
        after such amendment made by this Act takes effect and such 
        first plan year.
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