[Congressional Bills 105th Congress]
[From the U.S. Government Publishing Office]
[H.R. 818 Introduced in House (IH)]







105th CONGRESS
  1st Session
                                H. R. 818

     To require that employees who participate in cash or deferred 
 arrangements are free to determine whether to be invested in employer 
  real property and employer securities, and if not, to protect such 
employees by applying the same prohibited transaction rules that apply 
 to traditional defined benefit pension plans, and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                           February 25, 1997

 Mr. Condit (for himself, Mr. McDermott, and Mr. Foglietta) introduced 
 the following bill; which was referred to the Committee on Education 
                           and the Workforce

_______________________________________________________________________

                                 A BILL


 
     To require that employees who participate in cash or deferred 
 arrangements are free to determine whether to be invested in employer 
  real property and employer securities, and if not, to protect such 
employees by applying the same prohibited transaction rules that apply 
 to traditional defined benefit pension plans, 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.

    This Act may be cited as the ``401(k) Pension Protection Act of 
1997''.

SEC. 2. SECTION 401(k) INVESTMENT PROTECTION.

    (a) Limitations on Investment in Employer Securities and Employer 
Real Property by Cash or Deferred Arrangements.--Paragraph (3) of 
section 407(d) of the Employee Retirement Income Security Act of 1974 
(29 U.S.C. 1107(d)) is amended by adding at the end the following new 
subparagraph:
            ``(D) The term `eligible individual account plan' does not 
        include that portion of an individual account plan that 
        consists of elective deferrals (as defined in section 402(g)(3) 
        of the Internal Revenue Code of 1986) pursuant to a qualified 
        cash or deferred arrangement as defined in section 401(k) of 
        the Internal Revenue Code of 1986 (and earnings thereon), if 
        such elective deferrals (or earnings thereon) are required to 
        be invested in qualifying employer securities or qualifying 
        employer real property or both pursuant to the documents and 
        instruments governing the plan or at the direction of a person 
        other than the participant (or the participant's beneficiary) 
        on whose behalf such elective deferrals are made to the plan. 
        For the purposes of subsection (a), such portion shall be 
        treated as a separate plan. This subparagraph shall not apply 
        to an individual account plan if the fair market value of the 
        assets of all individual account plans maintained by the 
        employer equals not more than 10 percent of the fair market 
        value of the assets of all pension plans maintained by the 
        employer.''.
    (b) Effective Date.--
            (1) In general.--The amendments made by this section shall 
        take effect on the date of the enactment of this Act.
            (2) Transition rule for plans holding excess securities or 
        property.--
                    (A) In general.--In the case of a plan which on the 
                date of the enactment of this Act, has holdings of 
                employer securities and employer real property (as 
                defined in section 407(d) of the Employee Retirement 
                Income Security Act of 1974 (29 U.S.C. 1107(d)) in 
                excess of the amount specified in such section 407, the 
                amendment made by this section applies to any 
                acquisition of such securities and property on or after 
                such date, but does not apply to the specific holdings 
                which constitute such excess during the period of such 
                excess.
                    (B) Special rule for certain acquisitions.--
                Employer securities and employer real property acquired 
                pursuant to a binding written contract to acquire such 
                securities and real property entered into and in effect 
                on the date of the enactment of this Act, shall be 
                treated as acquired immediately before such date.
                                 <all>