[Congressional Bills 105th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4238 Introduced in House (IH)]







105th CONGRESS
  2d Session
                                H. R. 4238

To amend title I of the Employee Retirement Income Security Act of 1974 
 to establish requirements in the case of pension plans covering less 
 than 100 participants relating to entities that hold plan assets and 
             annual asset statements regarding such assets.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             July 16, 1998

Mr. Gejdenson (for himself, Ms. DeLauro, Mrs. Kennelly of Connecticut, 
Mrs. Johnson of Connecticut, Mr. Shays, and Mr. Maloney of Connecticut) 
 introduced the following bill; which was referred to the Committee on 
                        Education and Workforce

_______________________________________________________________________

                                 A BILL


 
To amend title I of the Employee Retirement Income Security Act of 1974 
 to establish requirements in the case of pension plans covering less 
 than 100 participants relating to entities that hold plan assets and 
             annual asset statements regarding such assets.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Small Business Employee Retirement 
Protection Act of 1998''.

SEC. 2. FINDINGS AND PURPOSES.

    (a) Findings.--The Congress finds that--
            (1) over 51 million American workers, representing about 
        half of the private-sector workforce, do not have an employer-
        provided pension;
            (2) 600,000 private pension plans are sponsored by firms 
        with less than 100 employees;
            (3) 32 million Americans working for small businesses do 
        not have employer-provided pensions;
            (4) over $3,500,000,000,000 is invested in the private 
        pension system;
            (5) approximately $400,000,000,000 is invested in pension 
        plans serving companies with less than 100 employees;
            (6) billions of dollars in small pension plans are 
        potentially at risk because they are held by unregulated 
        persons;
            (7) public confidence in the private pension system is 
        eroded when workers and their families lose their retirement 
        assets due to fraud, embezzlement, or mismanagement;
            (8) it is a goal of the Congress to improve private pension 
        security for employees of small businesses;
            (9) it is a goal and the responsibility of the Congress to 
        protect the assets of small plans, not only for the benefit of 
        workers and their families, but also to increase public 
        confidence in the private pension system, thereby encouraging 
        greater participation in the system; and
            (10) protection of the assets of small pension plans must 
        be balanced against regulatory burdens which can discourage 
        small businesses from offering pension plans.
    (b) Purposes.--The purposes of this Act are--
            (1) to provide an enhanced level of protection for the 
        assets of small pension plans;
            (2) to give the employees and owners of small businesses 
        the tools to ensure that their retirement assets are being 
        handled in a secure fashion;
            (3) to increase public confidence in the private pension 
        system;
            (4) to ensure that the employees of small businesses know 
        how to obtain accurate information about their pension plan 
        assets; and
            (5) to provide clear, enforceable standards governing 
        disclosure of financial information by custodians of small 
        pension plans to workers and their families.

SEC. 3. REQUIREMENTS FOR SMALL PENSION PLANS RELATING TO HOLDERS OF 
              PLAN ASSETS AND ANNUAL ASSET STATEMENTS.

    (a) In General.--Paragraph (2) of section 104(a) of the Employee 
Retirement Income Security Act of 1974 (29 U.S.C. 1024(a)(2)) is 
amended--
            (1) by redesignating subparagraph (B) as subparagraph (C); 
        and
            (2) by inserting after subparagraph (A) the following new 
        subparagraph:
    ``(B) Subparagraph (A) shall apply in connection with any annual 
report otherwise required to be filed by the administrator of any such 
plan only if--
            ``(i) the assets of the plan are held by an entity--
                    ``(I) in a manner permitted in section 403(b), or
                    ``(II) which is a bank or other person who is 
                approved by the Secretary of the Treasury pursuant to 
                section 408(a)(2) of the Internal Revenue Code of 1986, 
                and
            ``(ii) under the terms of the plan, such entity is required 
        to provide to each participant and beneficiary, upon request, a 
        written statement setting forth a listing of the assets of the 
        plan held by such entity and the value of such assets as of the 
        most recent valuation date.
Any such entity shall also provide to the Secretary, upon request, a 
written statement described in clause (ii). Such entity shall certify 
as to the authenticity and accuracy of the information contained in any 
statement provided pursuant to this subparagraph. The Secretary may 
prescribe regulations setting forth the form and manner in which any 
such statement is to be provided.''.
    (b) Notification of Right To Asset Statement.--Subsection (b) of 
section 104 of such Act (29 U.S.C. 1024(b)) is amended--
            (1) by redesignating paragraph (4) as paragraph (5); and
            (2) by inserting after paragraph (3) the following new 
        paragraph:
    ``(4) The administrator of each pension plan for which simplified 
annual reports are prescribed pursuant to subsection (a)(2)(A) shall 
notify its participants and beneficiaries of their right under 
subsection (a)(2)(B)(ii) to request an asset statement from an entity 
holding the assets of the plan. Such notification shall also inform 
them of their right to request that the Secretary of Labor make such 
requests on their behalf. Such notification shall be included as part 
of the materials necessary to fairly summarize the latest annual 
report.''.
    (c) Liability of Administrator for Failure To Ensure Prompt 
Distribution of Requested Statements.--Subsection (c) of section 502 of 
such Act (29 U.S.C. 1132(c)) is amended--
            (1) by redesignating paragraph (7) as paragraph (8); and
            (2) by inserting after paragraph (6) the following new 
        paragraph:
    ``(7)(A)(i) In any case in which an entity described in section 
104(a)(2)(B)(i) holding the assets of a pension plan fails or refuses 
to comply with a request, by a participant or beneficiary under the 
plan, for any statement which such entity is required by the plan, 
pursuant to section 104(a)(2)(B)(ii), to provide to such participant or 
beneficiary by mailing the material requested to the last known address 
of the requesting participant or beneficiary within 30 days after the 
date of the receipt of such request, the administrator of such plan may 
in the court's discretion be personally liable to such participant or 
beneficiary in the amount of up to $100 a day from the date of such 
failure or refusal, and the court may in its discretion order such 
other relief as it deems proper. The Secretary may prescribe, by 
regulation, alternate means of satisfying the requirements of this 
clause.
    ``(ii) For purposes of this subparagraph, each violation described 
in clause (i) with respect to any single participant or beneficiary 
shall be treated as a separate violation.
    ``(iii) No liability shall arise under this subparagraph for any 
failure resulting from matters reasonably beyond the control of the 
entity or the plan administrator.
    ``(B)(i) If, within 30 days after a request by the Secretary to an 
entity described in section 104(a)(2)(B)(i) holding the assets of a 
pension plan, the entity fails to provide the asset statement requested 
to the Secretary, the Secretary may assess a civil penalty against the 
plan administrator of up to $100 a day from the date of such failure.
    ``(ii) No penalty shall be imposed under this subparagraph for any 
failure resulting from matters reasonably beyond the control of the 
entity or the plan administrator, as determined by the Secretary in the 
Secretary's sole discretion.
    ``(C) For purposes of this paragraph, the inclusion of materially 
incorrect or incomplete information in any statement provided in 
response to a request made pursuant to section 104(a)(2) shall be 
treated as a failure to comply with such request.''.

SEC. 4. EFFECTIVE DATE.

    The amendments made by this Act shall apply with respect to plan 
years beginning after 180 days after the date of the enactment of this 
Act.
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