[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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