[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4055 Introduced in House (IH)]







109th CONGRESS
  1st Session
                                H. R. 4055

To amend the Employee Retirement Income Security Act of 1974 and title 
   11, United State Code, to provide necessary reforms for employee 
                         pension benefit plans.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                            October 7, 2005

Mr. Visclosky introduced the following bill; which was referred to the 
   Committee on Education and the Workforce, and in addition to the 
Committee on the Judiciary, 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 amend the Employee Retirement Income Security Act of 1974 and title 
   11, United State Code, to provide necessary reforms for employee 
                         pension benefit plans.

    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 ``Employees' Pension Security Act of 
2005''.

             TITLE I--TRUSTEESHIP OF SINGLE-EMPLOYER PLANS

SEC. 101 REQUIREMENTS RELATING TO TRUSTEESHIP OF SINGLE-EMPLOYER PLANS.

    (a) In General.--Section 403(a) of the Employee Retirement Income 
Security Act of 1974 (29 U.S.C. 1103(a)) is amended--
            (1) by redesignating paragraphs (1) and (2) as 
        subparagraphs (A) and (B), respectively;
            (2) by inserting ``(1)'' after ``(a)''; and
            (3) by adding at the end the following new paragraph:
    ``(2)(A) The assets of a pension plan which is a single-employer 
plan shall be held in trust by a joint board of trustees, which shall 
consist of two or more trustees representing on an equal basis the 
interests of the employer or employers maintaining the plan and the 
interests of the participants and their beneficiaries.
    ``(B)(i) Except as provided in clause (ii), in any case in which 
the plan is maintained pursuant to one or more collective bargaining 
agreements between one or more employee organizations and one or more 
employers, the trustees representing the interests of the participants 
and their beneficiaries pursuant to subparagraph (A) shall be 
designated by such employee organizations.
    ``(ii) Clause (i) shall not apply with respect to a plan described 
in such clause if the employee organization (or all employee 
organizations, if more than one) referred to in such clause file with 
the Secretary, in such form and manner as shall be prescribed in 
regulations of the Secretary, a written waiver of their rights under 
clause (i).
    ``(iii) In any case in which clause (i) does not apply with respect 
to a pension plan which is a single-employer plan because the plan is 
not described in clause (i) or because of a waiver filed pursuant to 
clause (ii), the trustee or trustees representing the interests of the 
participants and their beneficiaries shall consist of one or more 
participants under the plan elected to serve as such in accordance with 
this clause. The Secretary shall provide by regulation for a secret 
ballot of the participants under the plan for purposes of such 
election, and for certification of the results thereof to the 
participants (and any employee organization referred to in clause (ii)) 
and to the employer.''.
    (b) Conforming Amendments.--Section 403(a)(1) of such Act (as 
redesignated under subsection (a)) is amended--
            (1) by striking ``Such trustee or trustees'' and inserting 
        ``Except as provided in paragraph (2), such trustee or 
        trustees'';
            (2) by striking ``fiduciary, and upon acceptance'' and 
        inserting ``fiduciary. Upon acceptance''; and
            (3) in subparagraph (A) (as so redesignated), by striking 
        ``the plan'' the first place it appears and inserting ``in the 
        case of a plan other than a pension plan which is a single-
        employer plan, the plan''.

SEC. 102. EFFECTIVE DATE.

    The amendments made by this title shall apply with respect to plan 
years beginning after 180 days after the date of the enactment of this 
Act. The Secretary of Labor shall prescribe the initial regulations 
necessary to carry out the provisions of such amendments not later than 
90 days after the date of the enactment of this Act.

           TITLE II--DISCLOSURE OF PENSION PLAN FISCAL HEALTH

SEC. 201. PENSION BENEFIT INFORMATION.

    (a) Pension Benefit Statements Required on Periodic Basis.--
            (1) In general.--Subsection (a) of section 105 of the 
        Employee Retirement Income Security Act of 1974 (29 U.S.C. 
        1025) is amended--
                    (A) by striking ``shall furnish to any plan 
                participant or beneficiary who so requests in 
                writing,'' and inserting ``shall furnish at least once 
                every 3 years, in the case of a participant in a 
                defined benefit plan who has attained age 35, and 
                annually, in the case of an individual account plan, to 
                each plan participant, and shall furnish to any plan 
                participant or beneficiary who so requests,'', and
                    (B) by adding at the end the following flush 
                sentence:
``Information furnished under the preceding sentence to a participant 
in a defined benefit plan (other than at the request of the 
participant) may be based on reasonable estimates determined under 
regulations prescribed by the Secretary.''.
            (2) Model statement.--Section 105 of such Act (29 U.S.C. 
        1025) is amended by adding at the end the following new 
        subsection:
    ``(e) The Secretary of Labor shall develop a model benefit 
statement which shall be used by plan administrators in complying with 
the requirements of subsection (a). Such statement shall include--
            ``(1) the amount of nonforfeitable accrued benefits as of 
        the statement date which is payable at normal retirement age 
        under the plan,
            ``(2) the amount of accrued benefits which are forfeitable 
        but which may become nonforfeitable under the terms of the 
        plan,
            ``(3) the amount or percentage of any reduction due to 
        integration of the benefit with the participant's Social 
        Security benefits or similar governmental benefits,
            ``(4) the percentage of the net return on investment of 
        plan assets for the preceding plan year (or, with respect to 
        investments directed by the participant, the net return on 
        investment of plan assets for such year so directed), and, 
        stated separately, the administrative and transaction fees 
        incurred in connection with such investment,
            ``(5) in the case of an individual account plan, the 
        percentage of assets in the individual account that consists of 
        employer securities and employer real property (as defined in 
        paragraphs (1) and (2), respectively, of section 407(d)), as 
        determined as of the most recent valuation date of the plan,
            ``(6) information on how to contact the Social Security 
        Administration to obtain a participant's personal earnings and 
        benefit estimate statement,
            ``(7) information on early retirement benefit and joint and 
        survivor annuity reductions, and
            ``(8) a notice advising participants and beneficiaries of 
        the importance of diversifying the investment of the assets in 
        their accounts.''.
            (3) Rule for multiemployer plans.--Subsection (d) of 
        section 105 of such Act (29 U.S.C. 1025) is amended to read as 
        follows:
    ``(d) Each administrator of a plan to which more than 1 
unaffiliated employer is required to contribute shall furnish a 
statement described in subsection (a) to any plan participant or 
beneficiary who so requests in writing.''.
    (b) Disclosure of Benefit Calculations.--
            (1) In general.--Section 105 of such Act (as amended by 
        subsection (a)) is amended further--
                    (A) by redesignating subsections (b), (c), (d), and 
                (e) as subsections (c), (d), (e), and (f), 
                respectively; and
                    (B) by inserting after subsection (a) the following 
                new subsection:
    ``(b)(1) In the case of a participant or beneficiary who is 
entitled to a distribution of a benefit under an employee pension 
benefit plan, the administrator of such plan shall provide to the 
participant or beneficiary the information described in paragraph (2) 
upon the written request of the participant or beneficiary.
    ``(2) The information described in this paragraph includes--
            ``(A) a worksheet explaining how the amount of the 
        distribution was calculated and stating the assumptions used 
        for such calculation,
            ``(B) upon written request of the participant or 
        beneficiary, any documents relating to the calculation (if 
        available), and
            ``(C) such other information as the Secretary may 
        prescribe.
 Any information provided under this paragraph shall be in a form 
calculated to be understood by the average plan participant.''.
            (2) Conforming amendments.--
                    (A) Section 101(a)(2) of such Act (29 U.S.C. 
                1021(a)(2)) is amended by striking ``105(a) and (c)'' 
                and inserting ``105(a), (b), and (d)''.
                    (B) Section 105(c) of such Act (as redesignated by 
                paragraph (1)(A) of this subsection) is amended by 
                inserting ``or (b)'' after ``subsection (a)''.
                    (C) Section 106(b) of such Act (29 U.S.C. 1026(b)) 
                is amended by striking ``sections 105(a) and 105(c)'' 
                and inserting ``subsections (a), (b), and (d) of 
                section 105''.
    (c) Effective Date.--The amendments made by this section shall 
apply with respect to requests for statements received on or after 
January 1, 2006.

SEC. 202. PROVISION TO PARTICIPANTS AND BENEFICIARIES OF MATERIAL 
              INVESTMENT INFORMATION IN ACCURATE FORM.

    (a) In General.--Section 404(c) of the Employee Retirement Income 
Security Act of 1974 (29 U.S.C. 1104(c)) is amended by adding at the 
end the following new paragraph:
    ``(4) The plan sponsor and plan administrator of a pension plan 
described in paragraph (1) shall have a fiduciary duty to ensure that 
each participant and beneficiary under the plan, in connection with the 
investment by the participant or beneficiary of plan assets in the 
exercise of his or her control over assets in his account, is provided 
with all material investment information regarding investment of such 
assets to the extent that the provision of such information is 
generally required to be disclosed by the plan sponsor to investors in 
connection with such an investment under applicable securities laws. 
The provision by the plan sponsor or plan administrator of any 
misleading investment information shall be treated as a violation of 
this paragraph.''.
    (b) Enforcement.--
            (1) In general.--Section 502(c) of such Act (29 U.S.C. 
        1132(c)) is amended--
                    (A) by redesignating paragraph (8) as paragraph 
                (9); and
                    (B) by inserting after paragraph (7) the following 
                new paragraph:
    ``(8) The Secretary may assess a civil penalty against any person 
of up to $1,000 a day from the date of the person's failure or refusal 
to comply with the requirements of section 404(c)(4) until such failure 
or refusal is corrected.''.
            (2) Conforming amendment.--Section 502(a)(6) of such Act 
        (29 U.S.C. 1132(a)(6)) is amended by striking ``(6), or (7)'' 
        and inserting ``(6), (7), or (8)''.
    (c) Effective Date.--The amendments made by this section shall 
apply with respect to investments made on or after the date of the 
enactment of this Act.

TITLE III--STRENGTHENED PROTECTIONS AGAINST ABUSE OF THE BANKRUPTCY AND 
                          TERMINATION PROCESS

SEC. 301. ADDITIONAL REQUIREMENTS FOR TERMINATION.

    (a) Additional Requirements for Distress Termination.--Section 
4041(c)(2)(B) of the Employee Retirement Income Security Act of 1974 
(29 U.S.C. 1341(c)(2)(B)) is amended by adding at the end the 
following:
                            ``(iv) Additional requirements.--
                        Notwithstanding any other provision of this 
                        section, unless the corporation or the court, 
                        in the case of a distress termination pursuant 
                        to clause (ii), has determined that reasonable 
                        efforts to consider available alternatives to 
                        termination (including, but not limited to, 
                        alternatives described in section 4042(c)(4)) 
                        have been undertaken by such person (and, in 
                        the case of a plan maintained pursuant to a 
                        collective bargaining agreement, have been 
                        undertaken by the bargaining parties in good 
                        faith bargaining), the plan may not be 
                        terminated. A participant or beneficiary of the 
                        plan or an employee organization representing 
                        such participants or beneficiaries may bring an 
                        action in the appropriate court to challenge 
                        such determination by the corporation and seek 
                        equitable relief or must be afforded an 
                        opportunity to be heard by the appropriate 
                        court if a court is making such 
                        determination.''.
    (b) Additional Requirements for Court Decrees.--Section 4042(c) of 
such Act (29 U.S.C. 1342(c)) is amended--
            (1) by inserting after the first sentence the following new 
        sentences: ``The court may not enter such a decree unless that 
        court has found that reasonable efforts to consider available 
        alternatives to termination (including, but not limited to, 
        alternatives described in paragraph (4) have been undertaken by 
        the plan sponsor (and, in the case of a plan maintained 
        pursuant to a collective bargaining agreement, have been 
        undertaken by the bargaining parties in good faith bargaining). 
        There is a presumption that a plan need not be terminated if 
        the plan sponsor can continue in business outside a case under 
        title 11, United States Code (or under any similar law of a 
        State or a political subdivision of a State), in which 
        reorganization is sought without terminating the plan.''; and
            (2) in the sentence following the sentences inserted by 
        paragraph (1), by striking ``the preceding sentence'' and 
        inserting ``the first sentence of this subsection,''.
    (c) Right to Intervene to Challenge Court Decree.--Section 4042(c) 
of such Act (as amended by subsection (b)) is further amended by 
inserting after the fourth sentence the following new sentence: ``If 
any party consisting of the plan sponsor, a plan participant, or (in 
the case of a plan maintained pursuant to a collective bargaining 
agreement) the employee organization representing plan participants for 
purposes of collective bargaining disagrees with any such determination 
by the corporation, such party may intervene in the proceeding to 
challenge the determinations of the corporation.''.
    (d) Consideration of Alternatives by Corporation and Plan 
Sponsor.--Section 4042(c) of such Act (as amended by the preceding 
provisions of this section) is further amended by adding after the 
seventh sentence the following: ``The corporation and the plan 
administrator may proceed with such an agreement only if they have made 
reasonable efforts to consider available alternatives to termination 
(including, but not limited to, alternatives described in paragraph (4) 
of this subsection) and the plan participants and beneficiaries have 
been provided with at least 60 days notice before such agreement is 
given effect. During such 60-day period, a participant or beneficiary 
of the plan or an employee organization representing such participants 
or beneficiaries may bring an action in the appropriate court to seek 
appropriate equitable relief if such reasonable efforts have not been 
made.''.
    (e) Efforts by the Corporation at Consultation With Parties.--
Section 4042(c) of such Act is amended by adding at the end the 
following new paragraph:
    ``(4)(A) Prior to making any determination referred to in the 
preceding provisions of this subsection, the corporation shall consult 
with the plan participants and (in the case of a plan maintained 
pursuant to a collective bargaining agreement) the employee 
organization representing plan participants for purposes of collective 
bargaining to determine whether there are any reasonable available 
alternatives to termination (including, but not limited to, 
alternatives described subparagraph (B).
    ``(B) The reasonable alternatives to termination referred to in 
subparagraph (A) consist of measures which are in the best interest of 
plan participants and which include (but are not limited to) the 
following:--
            ``(i) Financing or loans sought by any member of the plan 
        sponsor's controlled group, with or without assistance from the 
        corporation, in order to obtain plan financing, including back-
        up guarantees to any such financing which the corporation is 
        hereby authorized to provide for such purpose.
            ``(ii) New plan structures agreed to by the parties, such 
        as transfer of plan liabilities to multiemployer plans, new 
        benefit formulas for new hires or non-vested participants, or 
        other plan restructuring alternatives agreed to by the parties.
            ``(iii) Reinsurance which the corporation is hereby 
        authorized to obtain for the plan.
            ``(iv) An agreement by the parties authorizing alternative 
        funding schedules, approved by the corporation, which would 
        modify plan funding, subject to the minimum funding 
        requirements for the plan under part 3 of subtitle B of title 
        I.
            ``(v) Purchase by the plan sponsor of an annuity contract 
        to cover liabilities of the plan, which the corporation is 
        hereby authorized to guarantee as necessary to secure such a 
        contract.''.
    (f) Notice of Right to Challenge Determinations Relating to Plan 
Termination.--
            (1) Procedure for standard terminations.--Section 
        4041(a)(2)(B) of such Act (29 U.S.C. 1341(a)(2)(B)) is amended 
        in clause (i) by striking ``and'' at the end, in clause (ii)(V) 
        by striking ``require.'' and inserting ``require, and'', and by 
        inserting after clause (ii) the following new clause:
                            ``(iii) the right of participants and 
                        beneficiaries to challenge determinations under 
                        this section.''.
            (2) Termination proceedings for distress terminations and 
        terminations commenced by the pbgc.--Section 4042(a) of such 
        Act (29 U.S.C. 1342(a)) is amended by adding at the end the 
        following new sentence: ``Prior to commencing proceedings under 
        this section with respect to any plan, the corporation shall 
        provide notice to plan participants and beneficiaries of the 
        right to challenge determinations under this section, written 
        in a manner likely to be understood by the participant or 
        beneficiary.''.

SEC. 302. EFFECTIVE DATE OF TITLE.

    The amendments made by this title shall apply with respect to any 
plans undergoing termination proceedings pursuant to section 4041 or 
4042 of the Employee Retirement Income Security Act of 1974 which are 
pending on or after June 29, 2005.

   TITLE IV--RECOVERY OF BENEFIT LIABILITIES WHICH ARE NOT GUARANTEED

SEC. 401. AMENDMENT TO TITLE 11 OF THE UNITED STATES CODE.

    Section 507(a)(1) of title 11, United States Code, is amended by 
adding at the end the following:
                    ``(D) Subject to subparagraphs (A), (B), and (C), 
                allowed unsecured claims for benefit liabilities to 
                participants and beneficiaries under a single-employer 
                plan (as defined in section 4001(a)(15) of the Employee 
                Retirement Income Security Act of 1974) in connection 
                with the termination of the plan, in excess of the 
                benefits payable to the participants and beneficiaries 
                by the Pension Benefit Guaranty Corporation under 
                section 4022 of the Employee Retirement Income Security 
                Act of 1974 in connection with such termination.''.

SEC. 402. EFFECTIVE DATE; APPLICATION OF AMENDMENT.

    (a) Effective Date.--Except as provided in subsection (b), section 
401 and the amendment made by such section shall take effect on October 
18, 2005, or the date of the enactment of this Act, whichever date is 
later.
    (b) Application of Amendment.--The amendment made by section 401 
shall not apply with respect to cases commenced under title 11 of the 
United States Code before the effective date of this section.
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