[Congressional Bills 107th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3509 Introduced in House (IH)]
107th CONGRESS
1st Session
H. R. 3509
To amend title I of the Employee Retirement Income Security Act of 1974
to provide additional fiduciary protections for participants and
beneficiaries under employee stock ownership plans with respect to
lockdowns placed on plan assets.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
December 18, 2001
Mr. Bentsen introduced the following bill; which was referred to the
Committee on Education and the Workforce
_______________________________________________________________________
A BILL
To amend title I of the Employee Retirement Income Security Act of 1974
to provide additional fiduciary protections for participants and
beneficiaries under employee stock ownership plans with respect to
lockdowns placed on plan 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 ``Retirement Account Protection Act of
2001''.
SEC. 2. ADDITIONAL FIDUCIARY PROTECTIONS RELATING LOCKDOWNS UNDER
EMPLOYEE STOCK OWNERSHIP PLANS.
(a) In General.--Section 402(a)(2) of the Employee Retirement
Income Security Act of 1974 (29 U.S.C. 1104(a)(2)) is amended--
(1) by striking ``In the case'' and inserting ``Subject to
subparagraph (B), in the case''; and
(2) by adding at the end the following new subparagraph:
``(B)(i) In the case of any eligible individual account plan (as
defined in section 407(d)(3))--
``(I) unless an exemption is obtained from the Secretary
under clause (ii), no lockdown may be imposed by the plan
sponsor, administrator, or any other fiduciary in connection
with the nonforfeitable accrued benefit of a participant or
beneficiary, and
``(II) no lockdown may take effect until at least 90 days
after written notice (which may include notice by means of
electronic communication) of such a waiver is provided by the
plan administrator to such participant or beneficiary.
``(ii) The Secretary shall establish a procedure under which a plan
administrator may apply for an exemption for purposes of clause (i).
The Secretary may not grant such exemption unless the Secretary finds
that such exemption is--
``(I) administratively feasible,
``(II) in the interests of the plan and of its participants
and beneficiaires, and
``(III) protective of the rights of participants and
beneficiaries of the plan.
Before granting such an exemption, the Secretary shall publish notice
in the Federal Register of the pendency of the exemption, shall require
that adequate notice be given to interested persons, and shall afford
interested persons opportunity to present views.
``(iii) Subparagraph (A) shall not apply in connection with any
plan unless the plan provides for compliance with the requirements of
clause (i).
``(iv) For purposes of this subparagraph, the term `lockdown' means
any lockdown, blackout, or freeze with respect to, suspension of, or
similar limitation on the ability of a participant or beneficiary (who
has met minimum participation requirements applicable in accordance
with section 202) to transfer some or all of the nonforfeitable accrued
benefit of the participant or benefiary from investment in the form of
qualifying employer securities (as defined in section 407(d)(5)) to
another investment vehicle otherwise available under the terms of the
plan. Such term does not include--
``(I) any permanent limitation which applies only to
benefits attributable to employer contributions, or
``(II) any reasonable restriction on the frequency of
transfers between investment vehicles, subject to such
regulations as the Secretary may prescribe.''.
SEC. 3. STUDY RELATING TO CAPS ON INVESTMENT OF INDIVIDUAL ACCOUNT PLAN
ASSETS IN EMPLOYER SECURITIES.
(a) In General.--As soon as practicable after the date of the
enactment of this Act, the Secretary of Labor, in consultation with the
Secretary of the Treasury and the Securities and Exchange Commission,
shall undertake a study relating to investment of plan assets of
individual account plans in stock or other securities issued by the
employer.
(b) Matters To Be Studied.--In conducting the study pursuant to
subsection (a), the Secretary shall--
(1) consider the feasibility of statutory limits on the
extent to which plan assets under individual account plans may
be invested in stock or other securities issued by the
employer, and
(2) analyze such feasibility with respect to a range of
possible statutory limits.
(c) Report.--Not later than 180 days after the date of the
enactment of this Act, the Secretary shall submit a report to each
House of the Congress setting forth the results of the study required
under subsection (a). Such report shall include such recommendations
for statutory or administrative changes as the Secretary of Labor, in
consultation with the Secretary of the Treasury and the Securities and
Exchange Commission, has determined to be appropriate.
SEC. 4. EFFECTIVE DATE AND RELATED RULES.
(a) In General.--Subject to subsection (b), the amendments made by
this Act shall apply with respect to plan years beginning on or after
January 1, 2002.
(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, subsection
(a) shall be applied to benefits pursuant to, and individuals covered
by, any such agreement by substituting for ``January 1, 2002'' the date
of the commencement of the first plan year beginning on or after the
earlier of--
(1) the later of--
(A) January 1, 2003, 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, 2004.
(c) Plan Amendments.--If the amendments made by this Act require 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, 2004,
if--
(1) during the period after such amendments made by this
Act take effect and before such first plan year, the plan is
operated in accordance with the requirements of such amendments
made by this Act, and
(2) such plan amendment applies retroactively to the period
after such amendments made by this Act take effect and before
such first plan year.
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