110 HR 5754 IH: Employees’ Pension Security Act of 2008
U.S. House of Representatives
2008-04-09
text/xml
EN
Pursuant to Title 17 Section 105 of the United States Code, this file is not subject to copyright protection and is in the public domain.
1.This Act may be cited as the Employees’ Pension Security Act of 2008
.
<enum>I</enum><header>Trusteeship of single-employer plans</header>
<section id="H06B983972788418491AA3E35C331BB93"><enum>101.</enum><header>Requirements relating to trusteeship of single-employer plans</header>
<subsection id="H331E61166F9F48E9B5AD21478EC20687"><enum>(a)</enum><header>In general</header><text display-inline="yes-display-inline">Section 403(a) of the Employee Retirement Income Security Act of 1974 (<external-xref legal-doc="usc" parsable-cite="usc/29/1103">29 U.S.C. 1103(a)</external-xref>) is amended—</text>
<paragraph id="HD04D6C233D0D40E8A557C15144AFFE2D"><enum>(1)</enum><text display-inline="yes-display-inline">by redesignating paragraphs (1) and (2) as subparagraphs (A) and (B), respectively;</text> </paragraph>
<paragraph id="H7DFEE90F603A4C1AAA00A0891802CF53"><enum>(2)</enum><text display-inline="yes-display-inline">by inserting ‘‘(1)’’ after ‘‘(a)’’; and</text> </paragraph>
<paragraph id="H7BC705079A4846248DB06AB55BBF2F8"><enum>(3)</enum><text>by adding at the end the following new paragraph:</text>
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<paragraph id="H602C470AD2CB488AA0510024E52F59A6" indent="up1"><enum>(2)</enum>
<subparagraph commented="no" display-inline="yes-display-inline" id="H7A5526A05BAB47C6A482AA2F0248273B"><enum>(A)</enum><text>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.</text> </subparagraph>
<subparagraph id="H995FE54F73FE4A0000B9FDDA5628E4C" indent="up1"><enum>(B)</enum>
<clause commented="no" display-inline="yes-display-inline" id="H7501A55D6EA04F4690004D8CF158B3AA"><enum>(i)</enum><text display-inline="yes-display-inline">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.</text> </clause>
<clause id="H5D49B6A858964593AFBE7822D7FB4309" indent="up1"><enum>(ii)</enum><text display-inline="yes-display-inline">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).</text> </clause>
<clause id="HFA74B2166C88485E98005C74D5A1F88" indent="up1"><enum>(iii)</enum><text display-inline="yes-display-inline">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.</text> </clause></subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block> </paragraph></subsection>
<subsection id="H65958C8728354FB0B02BCACBA2D3F3FF"><enum>(b)</enum><header>Conforming amendments</header><text display-inline="yes-display-inline">Section 403(a)(1) of such Act (as redesignated under subsection (a)) is amended—</text>
<paragraph id="H21BA0F50AD9A4A4A9099C44188C29168"><enum>(1)</enum><text display-inline="yes-display-inline">by striking ‘‘Such trustee or trustees’’ and inserting ‘‘Except as provided in paragraph (2), such trustee or trustees’’;</text> </paragraph>
<paragraph id="H7E18856A6BBF4E1591B8BE68462FF907"><enum>(2)</enum><text>by striking ‘‘fiduciary, and upon acceptance’’ and inserting ‘‘fiduciary. Upon acceptance’’; and</text> </paragraph>
<paragraph id="H0246A429BAF9405DAF51CC9CBF468103"><enum>(3)</enum><text>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’’.</text> </paragraph></subsection></section>
<section id="HCBB637EE647E46AE947E4D405EAE27F9"><enum>102.</enum><header>Effective date</header><text display-inline="no-display-inline">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.</text> </section>
<enum>II</enum><header>Investment Information</header>
<section id="H7A0C50AE5DF44EEFAACF9B87D07C6C1E"><enum>201.</enum><header>Provision to participants and beneficiaries of material investment information in accurate form</header>
<subsection id="H51876D2B9BBD4F91BBC838FD7086B4E3"><enum>(a)</enum><header>In general</header><text>Section 404(c) of the Employee Retirement Income Security Act of 1974 (<external-xref legal-doc="usc" parsable-cite="usc/29/1104">29 U.S.C. 1104(c)</external-xref>) is amended by adding at the end the following new paragraph:</text>
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<paragraph id="H04BC52E666CB4394A9E35015BBF702A3"><enum>(6)</enum><header>Provision of accurate material investment advice</header><text>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.</text> </paragraph><after-quoted-block>.</after-quoted-block></quoted-block> </subsection>
<subsection id="HE27CCE3ACBC0413EB1EB89753DE2F634"><enum>(b)</enum><header>Enforcement</header>
<paragraph id="H08C29260C46148B0A51D839DFD90B936"><enum>(1)</enum><header>In general</header><text>Section 502(c) of such Act (<external-xref legal-doc="usc" parsable-cite="usc/29/1132">29 U.S.C. 1132(c)</external-xref>) is amended—</text>
<subparagraph id="H01A1F44DD89E41D9AC2F70B27BD6B9B"><enum>(A)</enum><text>by redesignating paragraph (9) as paragraph (10); and</text> </subparagraph>
<subparagraph id="H77B6BB26688A4CE0BA32E162E9028F44"><enum>(B)</enum><text>by inserting after paragraph (8) the following new paragraph:</text>
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<paragraph id="H7FA21B6D3F464E708CDC811C765230BD" indent="up1"><enum>(9)</enum><text>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)(6) until such failure or refusal is corrected.</text> </paragraph><after-quoted-block>.</after-quoted-block></quoted-block> </subparagraph></paragraph>
<paragraph id="H492200D24C6241CDA9490099D466F7A1"><enum>(2)</enum><header>Conforming amendment</header><text>Section 502(a)(6) of such Act (<external-xref legal-doc="usc" parsable-cite="usc/29/1132">29 U.S.C. 1132(a)(6)</external-xref>) is amended by striking <quote>(7), or (8)</quote> and inserting <quote>(7), (8), or (9)</quote>.</text> </paragraph></subsection></section>
<section id="HB89C9F9B583B4C35A8F30017D5FF00B0"><enum>202.</enum><header>Effective date of title</header><text display-inline="no-display-inline">The amendments made by this title shall apply with respect to investments made on or after the date of the enactment of this Act.</text> </section>
<enum>III</enum><header>Strengthened protections against abuse of the bankruptcy and termination process</header>
<section id="H3AF37688C1D440D486FA00ED5200B221"><enum>301.</enum><header>Additional requirements for termination</header>
<subsection id="H1A1F18E32C8C47FA95CD509CCC4B81A5"><enum>(a)</enum><header>Additional requirements for distress termination</header><text display-inline="yes-display-inline">Section 4041(c)(2) of the Employee Retirement Income Security Act of 1974 (<external-xref legal-doc="usc" parsable-cite="usc/29/1341">29 U.S.C. 1341(c)(2)</external-xref>) is amended by adding at the end the following:</text>
<quoted-block display-inline="no-display-inline" id="H6C11259C94AE4F01B63B280581DD3930" style="OLC">
<subparagraph id="H2D93E9CD20A34FF89E6C7375DB01B1BE"><enum>(E)</enum><header>Additional requirements</header><text display-inline="yes-display-inline">Notwithstanding any other provision of this section, unless the corporation or the court, in the case of a distress termination pursuant to subparagraph (B)(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.</text> </subparagraph><after-quoted-block>.</after-quoted-block></quoted-block> </subsection>
<subsection id="H61B02587AC7242C6BB34121CB3565339"><enum>(b)</enum><header>Additional requirements for court decrees</header><text display-inline="yes-display-inline">Section 4042(c)(1) of such Act (<external-xref legal-doc="usc" parsable-cite="usc/29/1342">29 U.S.C. 1342(c)(1)</external-xref>) is amended—</text>
<paragraph id="H17016065488E4F3B9B84085B6657DA3F"><enum>(1)</enum><text>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</text> </paragraph>
<paragraph id="H5E216CBDB3564F8ABB80556300006C94"><enum>(2)</enum><text>in the sentence following the sentences inserted by paragraph (1), by striking <quote>the preceding sentence</quote> and inserting <quote>the first sentence of this paragraph,</quote>.</text> </paragraph></subsection>
<subsection id="H9AC2FFEA55744C14B38CD5386D00A1F"><enum>(c)</enum><header>Right To intervene To challenge court decree</header><text display-inline="yes-display-inline">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.’’.</text> </subsection>
<subsection id="HF47E9FAC78214E56A46E9D0077A8F524"><enum>(d)</enum><header>Consideration of alternatives by corporation and plan sponsor</header><text display-inline="yes-display-inline">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.’’.</text> </subsection>
<subsection id="HFDD90C82CF2146AA005D59ED72EC83CE"><enum>(e)</enum><header>Efforts by the corporation at consultation with parties</header><text display-inline="yes-display-inline">Section 4042(c) of such Act is amended by adding at the end the following new paragraph:</text>
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<paragraph id="HC5058A13205749DE8BB317BD878D007D"><enum>(4)</enum><header>Consultation regarding reasonable available alternatives to termination</header>
<subparagraph display-inline="no-display-inline" id="H970F495D7E7640BB8F1EFABFD830EFBA"><enum>(A)</enum><header>In general</header><text display-inline="yes-display-inline">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).</text> </subparagraph>
<subparagraph id="HA52AA87780954355B9702E240031E36C"><enum>(B)</enum><header>Reasonable alternatives to termination</header><text display-inline="yes-display-inline">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:</text>
<clause id="H25EED1E43AE14CB89958E1C21235F83"><enum>(i)</enum><text display-inline="yes-display-inline">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.</text> </clause>
<clause id="HB296E314CE7648D5948DCB07BB20002D"><enum>(ii)</enum><text display-inline="yes-display-inline">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.</text> </clause>
<clause id="HA40BB5FC12AE45D19F75906C8DC47F45"><enum>(iii)</enum><text display-inline="yes-display-inline">Reinsurance which the corporation is hereby authorized to obtain for the plan.</text> </clause>
<clause id="H30A94FA5AACD4FF8889BD0FB520585B"><enum>(iv)</enum><text display-inline="yes-display-inline">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.</text> </clause>
<clause id="H5F63516D94F6401B8344011BB9F5634"><enum>(v)</enum><text display-inline="yes-display-inline">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.</text> </clause></subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block> </subsection>
<subsection id="H2304005CDAE94097A7CB5C94791CAD79"><enum>(f)</enum><header>Notice of right To challenge determinations relating to plan termination</header>
<paragraph id="HE89994739C4C47A89388B03BDAAA912D"><enum>(1)</enum><header>Procedure for standard terminations</header><text display-inline="yes-display-inline">Section 4041(b)(2)(B) of such Act (<external-xref legal-doc="usc" parsable-cite="usc/29/1341">29 U.S.C. 1341(b)(2)(B)</external-xref>) 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:</text>
<quoted-block display-inline="no-display-inline" id="HE97D86C94DE34DC3A352DE8FC147B58B" style="OLC">
<clause id="H58F4535233584DF09180C489AA1CBBA0"><enum>(iii)</enum><text display-inline="yes-display-inline">the right of participants and beneficiaries to challenge determinations under this section.</text> </clause><after-quoted-block>.</after-quoted-block></quoted-block> </paragraph>
<paragraph id="HF91315A3EE2542D08B0012CA3D67FC20"><enum>(2)</enum><header>Termination proceedings for distress terminations and terminations commenced by the PBGC</header><text display-inline="yes-display-inline">Section 4042(a) of such Act (<external-xref legal-doc="usc" parsable-cite="usc/29/1342">29 U.S.C. 1342(a)</external-xref>) 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.’’.</text> </paragraph></subsection></section>
<section id="H5FD49EBC021D49878743F59C2C2124D1"><enum>302.</enum><header>Effective date of title</header><text display-inline="no-display-inline">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 the date of the enactment of this Act.</text> </section>
<enum>IV</enum><header>Recovery of benefit liabilities which are not guaranteed</header>
<section display-inline="no-display-inline" id="H8D47E1D5F063467A92789D4F20953249" section-type="subsequent-section"><enum>401.</enum><header>Amendment to title 11 of the United States Code</header><text display-inline="no-display-inline"><external-xref legal-doc="usc" parsable-cite="usc/11/507">Section 507(a)(1)</external-xref> of title 11, United States Code, is amended by adding at the end the following:</text>
<quoted-block display-inline="no-display-inline" id="H5AE5DD34C36C4F258153E87F9645F574" style="OLC">
<subparagraph id="HAA5BBC0EC7F6448ABC7EE752ADAB13C3"><enum>(D)</enum><text display-inline="yes-display-inline">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.</text> </subparagraph><after-quoted-block>.</after-quoted-block></quoted-block> </section>
<section id="H95446D5405A046E8A592C1CC3668E4FE"><enum>402.</enum><header>Effective date; application of amendment</header>
<subsection id="H7D7047CFBBEB4D6C8720218852C0BABF"><enum>(a)</enum><header>Effective date</header><text>Except as provided in subsection (b), section 401 and the amendment made by such section shall take effect on the date of the enactment of this Act.</text> </subsection>
<subsection id="H5F860E5E958D4659A483F9B0F893A733"><enum>(b)</enum><header>Application of amendment</header><text>The amendment made by section 401 shall not apply with respect to cases commenced under title 11 of the United States Code before the date of the enactment of this Act.</text> </subsection></section>