[Congressional Bills 105th Congress]
[From the U.S. Government Publishing Office]
[H.R. 510 Introduced in House (IH)]







105th CONGRESS
  1st Session
                                H. R. 510

 To establish a Federal cause of action for failure of State and local 
public employee pension plans to meet the terms of such plans, subject 
to differing burdens of proof depending on whether changes in the plan 
 relating to employer contributions are subject, under the law of the 
         principal State involved, to qualified review boards.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                            February 4, 1997

 Mr. Andrews introduced the following bill; which was referred to the 
    Committee on the Judiciary, and in addition to the Committee on 
Education and the Workforce, 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 establish a Federal cause of action for failure of State and local 
public employee pension plans to meet the terms of such plans, subject 
to differing burdens of proof depending on whether changes in the plan 
 relating to employer contributions are subject, under the law of the 
         principal State involved, to qualified review boards.

    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 ``Public Employee Pension Plan 
Liability Act of 1997''.

SEC. 2. CIVIL ENFORCEMENT OF PUBLIC EMPLOYEE PENSION PLAN TERMS.

    (a) In General.--A civil action may be brought, by a participant or 
beneficiary under a public employee pension plan, against the plan--
            (1) to recover benefits due to him or her under the terms 
        of the plan, to enforce his or her rights under the terms of 
        the plan, or to clarify his or her rights to future benefits 
        under the terms of the plan;
            (2) to enjoin any act or practice which violates the terms 
        of the plan, or
            (3) to obtain other appropriate equitable relief (A) to 
        redress violations of the terms of the plan or (B) to enforce 
        the terms of the plan.
    (b) Burden of Proof.--
            (1) In general.--Except as provided in paragraph (2), in 
        any action brought under this section, the plaintiff may 
        prevail if the plaintiff proves his or her case by a 
        preponderance of the evidence.
            (2) Special rule for plans subject to review by qualified 
        review boards.--In the case of a public employee pension plan 
        which meets the requirements of section 3, in any action 
        brought under this section, the plaintiff may prevail only if 
        the plaintiff proves his or her case by clear and convincing 
        evidence.
    (c) Plans Treated as Persons.--A public employee pension plan may 
sue or be sued under this Act as a person. Service of summons, 
subpoena, or other legal process of a court upon a trustee or an 
administrator of a public employee pension plan in the trustee's or 
administrator's capacity as such shall constitute service upon the 
plan.
    (d) Jurisdiction and Venue.--
            (1) In general.--State courts of competent jurisdiction and 
        district court of the United States shall have concurrent 
        jurisdiction of actions brought under this section. The 
        district courts of the United States shall have jurisdiction 
        without regard to the amount in controversy or the citizenship 
        of the parties, to grant the relief provided for in subsection 
        (a).
            (2) Venue.--Notwithstanding section 94 of the National 
        Banking Act (12 U.S.C. 94), in any case in which an action 
        under this Act is brought in a district court of the United 
        States, it may be brought in any district of the State where 
        the plan is administered, where the breach took place, or where 
        a defendant resides or may be found, and process may be served 
        in any other district where a defendant resides or may be 
        found.
    (e) Attorney's Fees.--In any action brought under this section, the 
court may in its discretion award a reasonable attorney's fee and costs 
of action to any party who prevails or substantially prevails in such 
action.

SEC. 3. REVIEW BY QUALIFIED REVIEW BOARDS OF CHANGES IN EMPLOYER 
              CONTRIBUTIONS.

    (a) In General.--A public employee pension plan meets the 
requirements of this section if, under the plan, changes in employer 
contributions are subject to review by a qualified review board 
established for the plan as provided in this section. For purposes of 
this section, the term ``qualified review board'' means a board--
            (1) whose membership is determined under the law of the 
        principal State in accordance with subsection (b), and
            (2) whose powers are determined under the law of the 
        principal State in accordance with subsection (c).
    (b) Membership.--
            (1) In general.--The membership of a qualified review board 
        established for a plan shall consist of 3 members selected from 
        among individuals who, by means of their education and 
        experience, have demonstrated expertise in the area of pension 
        fund management, as follows:
                    (A) one member is appointed by the Governor of the 
                State,
                    (B) one member is selected by the participants in 
                the plan, by means of an election held in such form and 
                manner as shall be prescribed in regulations of the 
                Secretary of Labor, and
                    (C) one member is selected jointly by the Governor 
                and by a representative of participants in the plan 
                (from a certified list of pension experts established 
                in accordance with paragraph (2)).
        Each member of the board shall have 1 vote. Members of the 
        board shall serve for such equivalent terms as shall be 
        prescribed under the law of the principal State.
            (2) Certified list of experts.--The Governor of the State 
        shall, for purposes of paragraph (1)(C), establish and maintain 
        with respect to each public employee pension plan (for which 
        such State is the principal State) a certified list of pension 
        experts meeting the requirements for membership on the 
        qualified review board. Individuals may be included on such 
        list only by agreement between the Governor of the State and a 
        representative elected by participants in the plan, entered 
        into by means of collective bargaining in such form and manner 
        as shall be prescribed in regulations of the Secretary of 
        Labor.
    (c) Powers.--The board shall be treated as a qualified review board 
for purposes of this section with respect to any public employee 
pension plan (for which such State is the principal State) only if the 
powers of such board under the law of the principal State include 
review by the board, for approval or disapproval by the board, of any 
change in the terms of such plan, as a necessary prerequisite for such 
change to take effect, if--
            (1) such change would have the effect of changing levels of 
        employer contributions to the plan, and
            (2) such review is requested, in such form and manner as 
        shall be prescribed in regulations of the Secretary of Labor, 
        by--
                    (A) at least one-third of the total number of 
                trustees of any trust fund forming a part of the plan, 
                or
                    (B) the head of any employee organization 
                representing at least 20 percent of the total number of 
                active participants in the plan.
The board may be treated as a qualified review board for purposes of 
this section only if, under the law of the principal State, any such 
change submitted to such review by the board may take effect only upon 
approval of the change by the board.

SEC. 4. EFFECT ON OTHER LAWS.

    (a) In General.--Nothing in this Act shall be construed to alter, 
amend, modify, invalidate, impair, or supersede any law of a State or 
any rule or regulation issued under any such law, except to the extent 
that such law--
            (1) may now or hereafter relate to the subject matter of 
        the provisions of this Act as they apply to any public employee 
        pension plan described in section 4(b)(1) and not exempt under 
        section 4(b)(2), and
            (2) prevents the application of such provisions.
    (b) State Causes of Action Preserved.--Nothing in this Act shall be 
construed to apply with respect to State causes of action available in 
State courts.

SEC. 5. DEFINITIONS AND COVERAGE.

    (a) Definitions.--For purposes of this Act--
            (1) Administrator.--The term ``administrator'' means--
                    (A) the board of trustees, retirement board, or 
                similar person with administrative responsibilities in 
                connection with a plan, or any other person 
                specifically so designated in connection with any 
                requirement of this Act by the terms of the instrument 
or instruments under which the plan is operated, including but not 
limited to the law of any State or of any political subdivision of any 
State, or
                    (B) in any case in which there is no person 
                described in subparagraph (A) in connection with the 
                plan, the plan sponsor.
            (2) Beneficiary.--The term ``beneficiary'' means a person 
        designated by a participant, or by the terms of a public 
        employee pension plan, who is or may become entitled to a 
        benefit thereunder.
            (3) Employee.--The term ``employee'' means any individual 
        employed by an employer, employer representative, or other 
        person required to make employer contributions under the plan.
            (4) Employee organization.--The term ``employee 
        organization'' means any labor union or any organization of any 
        kind, or any agency or employee representation committee, 
        association, group, or plan, in which employees participate and 
        which exists for the purpose, in whole or in part, of dealing 
        with employers or employer representatives concerning a public 
        employee pension plan or other matters incidental to employment 
        relationships; or any employees' beneficiary association 
        organized for the purpose, in whole or in part, of establishing 
        such a plan.
            (5) Employer.--The term ``employer'' means--
                    (A) the government of any State or of any political 
                subdivision of a State,
                    (B) any agency or instrumentality of a government 
                referred to in subparagraph (A), or
                    (C) any agency or instrumentality of two or more 
                governments referred to in subparagraph (A).
            (6) Employer contribution.--The term ``employer 
        contribution'' means any contribution to a public employee 
        pension plan other than a contribution made by a participant in 
        the plan.
            (7) Employer representative.--The term ``employer 
        representative'' means--
                    (A) any group or association consisting, in whole 
                or in part, of employers acting, in connection with a 
                public employee pension plan, for an employer, or
                    (B) any person acting, in connection with a public 
                employee pension plan, indirectly in the interest of an 
                employer or of a group or association described in 
                subparagraph (A).
            (8) Public employee pension plan.--The term ``public 
        employee pension plan'' and ``plan'' mean any plan, fund, or 
        program which was heretofore or is hereafter established or 
        maintained, in whole or in part, by an employer, an employer 
        representative, or an employee organization, or by a 
        combination thereof, to the extent that by its express terms or 
        as a result of surrounding circumstances such plan, fund, or 
        program--
                    (A) provides retirement income to employees, or
                    (B) results in a deferral of income by employees 
                for periods extending to the termination of covered 
                employment or beyond,
        regardless of the method of calculating the contributions made 
        to the plan, the method of calculating the benefits under the 
        plan, or the method of distributing benefits from the plan.
            (9) Principal state.--The term ``principal State'' means, 
        for any plan year with respect to a public employee pension 
        plan, the State in which, as of the beginning of such plan 
        year, the largest percentage of the participants of the plan 
        employed in any single State is employed.
            (10) Governor.--The term ``Governor'' means, in connection 
        with a public employee pension plan, the Governor (or 
        equivalent official) of the principal State.
            (11) Participant.--The term ``participant'' means any 
        individual who is or may become eligible to receive a benefit 
        of any type from a public employee pension plan or whose 
        beneficiaries may be eligible to receive any such benefit.
            (12) Person.--The term ``person'' means a State, a 
        political subdivision of a State, any agency or instrumentality 
        of a State or a political subdivision of a State, an 
        individual, a partnership, a joint venture, a corporation, a 
        mutual company, a joint-stock company, a trust, an estate, an 
        unincorporated organization, an association, or an employee 
        organization.
            (13) Plan sponsor.--The term ``plan sponsor'' means--
                    (A) in the case of a plan established or maintained 
                solely for employees of a single employer, such 
                employer,
                    (B) in the case of a plan established or maintained 
                by an employee organization, the employee organization, 
                or
                    (C) in the case of a plan established or maintained 
                by two or more employers or jointly by one or more 
                employers and one or more employee organizations, the 
                association, committee, board of trustees, or other 
                similar group of representatives of the parties who 
                establish or maintain the plan.
            (14) Plan year.--The term ``plan year'' means, with respect 
        to a plan, the calendar, policy, or fiscal year on which the 
        records of the plan are kept.
            (15) State.--The term ``State'' means any State of the 
        United States, the District of Columbia, the Commonwealth of 
        Puerto Rico, the Virgin Islands, American Samoa, and Guam.
    (b) Coverage.--
            (1) In general.--Except as provided in paragraph (2), this 
        Act shall apply to any public employee pension plan.
            (2) Exceptions from coverage.--The provisions of this Act 
        shall not apply to--
                    (A) any employee benefit plan described in section 
                4(a) of the Employee Retirement Income Security Act of 
                1974 (29 U.S.C. 1003(a)), which is not exempt under 
                section 4(b)(1) of such Act (29 U.S.C. 1003(b)(1));
                    (B) any plan which is unfunded and is maintained by 
                an employer or employer representative primarily for 
                the purpose of providing deferred compensation for a 
                select group of management or highly compensated 
                employees;
                    (C) any arrangement which would be a severance pay 
                arrangement, as defined in regulations of the Secretary 
                of Labor under section 3(2)(B)(i) of the Employee 
                Retirement Income Security Act of 1974 (29 U.S.C. 
                1002(2)(B)(i)), if the employer were an employer within 
                the meaning of section 3(5) of such Act (29 U.S.C. 
                1002(5));
                    (D) any agreement to the extent it is a coverage 
                agreement entered into pursuant to section 218 of the 
                Social Security Act (42 U.S.C. 418);
                    (E) any individual retirement account or any 
                individual retirement annuity within the meaning of 
                section 408 of the Internal Revenue Code of 1986, or a 
                retirement bond within the meaning of section 409 of 
                such Code;
                    (F) any plan described in section 401(d) of such 
                Code;
                    (G) any individual account plan consisting of an 
                annuity contract described in section 403(b) of such 
                Code;
                    (H) any eligible State deferred compensation plan, 
                as defined in section 457(b) of such Code; or
                    (I) any plan maintained solely for the purpose of 
                complying with applicable workers' compensation laws or 
                disability insurance laws.

SEC. 5. EFFECTIVE DATE.

    The preceding provisions of this Act shall apply with respect to 
plan years beginning on or after January 1, 1998.
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