[Congressional Bills 114th Congress]
[From the U.S. Government Publishing Office]
[H.R. 6396 Introduced in House (IH)]

<DOC>






114th CONGRESS
  2d Session
                                H. R. 6396

To amend the Internal Revenue Code of 1986 to modify the qualification 
   requirements with respect to certain multiple employer plans with 
             pooled plan providers, and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                           November 29, 2016

    Mr. Buchanan (for himself, Mr. Renacci, Mr. Kind, and Mr. Neal) 
 introduced the following bill; which was referred to the Committee on 
 Education and the Workforce, and in addition to the Committee on Ways 
 and Means, 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 Internal Revenue Code of 1986 to modify the qualification 
   requirements with respect to certain multiple employer plans with 
             pooled plan providers, 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 ``Retirement Security for American 
Workers Act''.

SEC. 2. MULTIPLE EMPLOYER PLANS WITH POOLED PLAN PROVIDERS.

    (a) Qualification Requirements.--Section 413 of the Internal 
Revenue Code of 1986 is amended by adding at the end the following new 
subsection:
    ``(e) Application of Qualification Requirements for Certain 
Multiple Employer Plans With Pooled Plan Providers.--
            ``(1) In general.--Except as provided in paragraph (2), if 
        a defined contribution plan to which subsection (c) applies--
                    ``(A) is sponsored by employers that both have a 
                common interest other than having adopted the plan and 
                control the plan, or
                    ``(B) in the case of a plan not described in 
                subparagraph (A), has a pooled plan provider,
        then the plan shall not be treated as failing to meet the 
        requirements under this title applicable to a plan described in 
        section 401(a) or to a plan that consists of individual 
        retirement accounts described in section 408 of such Code 
        (including by reason of subsection (c) thereof), whichever is 
        applicable, merely because one or more employers of employees 
        covered by the plan fail to take such actions as are required 
        of such employers for the plan to meet such requirements.
            ``(2) Limitations.--
                    ``(A) In general.--Paragraph (1) shall not apply to 
                any plan unless the terms of the plan provide that in 
                cases of employers failing to take the actions 
                described in paragraph (1)--
                            ``(i) the assets of the plan attributable 
                        to employees of the employer will be 
                        transferred to a plan maintained only by the 
                        employer (or its successor), to an eligible 
                        retirement plan as defined in section 
                        402(c)(8)(B) for each individual whose account 
                        is transferred, or to any other arrangement 
                        that the Secretary determines is appropriate, 
                        unless the Secretary determines it is in the 
                        best interests of such employees to retain the 
                        assets in the plan, and
                            ``(ii) the employer described in clause (i) 
                        (and not the plan with respect to which the 
                        failure occurred or any other participating 
                        employer in such plan) shall, except to the 
                        extent provided by the Secretary, be liable for 
                        any liabilities with respect to such plan 
                        attributable to employees of the employer.
                    ``(B) Failures by pooled plan providers.--If the 
                pooled plan provider of a plan described in paragraph 
                (1)(B) does not perform substantially all of the 
                administrative duties which are required of the 
                provider under paragraph (3)(A)(i) for any plan year, 
                the Secretary, in the Secretary's own discretion, may 
                provide that the determination as to whether the plan 
                meets the requirements under this title applicable to a 
                plan described in section 401(a) or to a plan that 
                consists of individual retirement accounts described in 
                section 408 of such Code (including by reason of 
                subsection (c) thereof), whichever is applicable, shall 
                be made in the same manner as would be made without 
                regard to paragraph (1).
            ``(3) Pooled plan provider.--For purposes of this 
        subsection--
                    ``(A) In general.--The term `pooled plan provider' 
                means, with respect to any plan, a person who--
                            ``(i) is designated by the terms of the 
                        plan as a named fiduciary (as defined in 
                        section 402(a)(2) of the Employee Retirement 
                        Income Security Act of 1974), as the plan 
                        administrator, and as the person responsible to 
                        perform all administrative duties (including 
                        conducting proper testing with respect to the 
                        plan and employees of each participating 
                        employer) which are reasonably necessary to 
                        ensure that--
                                    ``(I) the plan meets the 
                                requirements of the Employee Retirement 
                                Income Security Act of 1974 and any 
                                requirement applicable under this title 
                                to a plan described in section 401(a) 
                                or to a plan that consists of 
                                individual retirement accounts 
                                described in section 408 of such Code 
                                (including by reason of subsection (c) 
                                thereof), whichever is applicable, and
                                    ``(II) each participating employer 
                                takes such actions as the Secretary or 
                                such person determines necessary for 
                                the plan to meet the requirements 
                                described in subclause (I), including 
                                providing to such person any 
                                disclosures or other information which 
                                the Secretary may require or which such 
                                person otherwise determines is 
                                necessary to administer the plan or to 
                                allow the plan to meet such 
                                requirements,
                            ``(ii) registers as a pooled plan provider 
                        with the Secretary, and provides such other 
                        information to the Secretary as the Secretary 
                        may require, before beginning operations as a 
                        pooled plan provider,
                            ``(iii) acknowledges in writing that such 
                        person is a named fiduciary (within the meaning 
                        of section 402(a)(2) of the Employee Retirement 
                        Income Security Act of 1974), and the plan 
                        administrator, with respect to the plan, and
                            ``(iv) is responsible for ensuring that all 
                        persons who handle assets of, or who are 
                        fiduciaries of, the plan are bonded in 
                        accordance with section 412 of the Employee 
                        Retirement Income Security Act of 1974.
                    ``(B) Audits, examinations and investigations.--The 
                Secretary may perform audits, examinations, and 
                investigations of pooled plan providers as may be 
                necessary to enforce and carry out the purposes of this 
                subsection.
            ``(4) Guidance.--
                    ``(A) In general.--The Secretary shall issue such 
                guidance as the Secretary determines appropriate to 
                carry out this subsection, including guidance--
                            ``(i) to identify the administrative duties 
                        and other actions required to be performed by a 
                        pooled plan provider under this subsection,
                            ``(ii) which describes the procedures to be 
                        taken to terminate a plan which fails to meet 
                        the requirements to be a plan described in 
                        paragraph (1), including the proper treatment 
                        of, and actions needed to be taken by, any 
                        participating employer of the plan and the 
                        assets and liabilities of the plan with respect 
                        to employees of that employer, and
                            ``(iii) identifying appropriate cases to 
                        which the rules of paragraph (2)(A) will apply 
                        to employers failing to take the actions 
                        described in paragraph (1).
                The Secretary shall take into account under 
                subparagraph (C) whether the failure of an employer or 
                pooled plan provider to provide any disclosures or 
                other information, or to take any other action, 
                necessary to administer a plan or to allow a plan to 
                meet requirements applicable to the plan under section 
                401(a) has continued over a period of time that clearly 
                demonstrates a lack of commitment to compliance.
                    ``(B) Prospective application.--Any guidance issued 
                by the Secretary under this paragraph shall not apply 
                to any action or failure occurring before the issuance 
                of such guidance.
            ``(5) Model plan.--The Secretary shall, in consultation 
        with the Secretary of Labor when appropriate, publish model 
        plan language which meets the requirements of this subsection 
        and of paragraphs (43) and (44) of section 3 of the Employee 
        Retirement Income Security Act of 1974 and which may be adopted 
        to be treated as a pooled employer plan.''.
    (b) No Common Interest Required for Pooled Employer Plans.--Section 
3(2) of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 
1002(2)) is amended by adding at the end the following:
                    ``(C) A pooled employer plan shall be treated as--
                            ``(i) a single employee pension benefit 
                        plan or single pension plan; and
                            ``(ii) a plan to which section 210(a) 
                        applies.''.
    (c) Pooled Employer Plan and Provider Defined.--
            (1) In general.--Section 3 of the Employee Retirement 
        Income Security Act of 1974 (29 U.S.C. 1002) is amended by 
        adding at the end the following:
            ``(43) Pooled employer plan.--
                    ``(A) In general.--The term `pooled employer plan' 
                means a plan--
                            ``(i) which is an individual account plan 
                        established or maintained for the purpose of 
                        providing benefits to the employees of two or 
                        more employers;
                            ``(ii) which is a plan described in section 
                        401(a) of the Internal Revenue Code of 1986 
                        which includes a trust exempt from tax under 
                        section 501(a) of such Code or a plan that 
                        consists of individual retirement accounts 
                        described in section 408 of such Code 
                        (including by reason of subsection (c) 
                        thereof); and
                            ``(iii) the terms of which meet the 
                        requirements of subparagraph (B).
                Such term shall not include a plan with respect to 
                which the participating employers both share a common 
                interest other than participation in the plan and 
                control the plan.
                    ``(B) Requirements for plan terms.--The 
                requirements of this subparagraph are met with respect 
                to any plan if the terms of the plan--
                            ``(i) designate a pooled plan provider and 
                        provide that the pooled plan provider is a 
                        named fiduciary of the plan;
                            ``(ii) designate one or more trustees 
                        meeting the requirements of section 408(a)(2) 
                        of the Internal Revenue Code of 1986 (other 
                        than a participating employer) to be 
                        responsible for collecting contributions to, 
                        and holding the assets of, the plan and require 
                        such trustees to implement written contribution 
                        collection procedures that are reasonable, 
                        diligent, and systematic;
                            ``(iii) provide that each participating 
                        employer retains fiduciary responsibility for--
                                    ``(I) the selection and monitoring 
                                in accordance with section 404(a) of 
                                the person designated as the pooled 
                                plan provider and any other person who, 
                                in addition to the pooled plan 
                                provider, is designated as a named 
                                fiduciary of the plan; and
                                    ``(II) to the extent not otherwise 
                                delegated to another fiduciary by the 
                                pooled plan provider and subject to the 
                                provisions of section 404(c), the 
                                investment and management of that 
                                portion of the plan's assets 
                                attributable to the employees of that 
                                participating employer;
                            ``(iv) provide that a participating 
                        employer, or a participant or beneficiary, is 
                        not subject to unreasonable restrictions, fees, 
                        or penalties with regard to ceasing 
                        participation, receipt of distributions, or 
                        otherwise transferring assets of the plan in 
                        accordance with section 208;
                            ``(v) require--
                                    ``(I) the pooled plan provider to 
                                provide to participating employers any 
                                disclosures or other information which 
                                the Secretary may require, including 
                                any disclosures or other information to 
                                facilitate the selection or any 
                                monitoring of the pooled plan provider 
                                by participating employers; and
                                    ``(II) each participating employer 
                                to take such actions as the Secretary 
                                or the pooled plan provider determines 
                                necessary to administer the plan or for 
                                the plan to meet the requirements of 
                                this Act or any requirement applicable 
                                under the Internal Revenue Code of 1986 
                                to a plan described in section 401(a) 
                                of such Code or to a plan that consists 
                                of individual retirement accounts 
                                described in section 408 of such Code 
                                (including by reason of subsection (c) 
                                thereof), whichever is applicable, 
                                including providing any disclosures or 
                                other information which the Secretary 
                                may require or which the pooled plan 
                                provider otherwise determines is 
                                necessary to administer the plan or to 
                                allow the plan to meet such 
                                requirements; and
                            ``(vi) provide that any disclosure or other 
                        information required to be provided under 
                        clause (v) may be provided in electronic form 
                        and will be designed to ensure only reasonable 
                        costs are imposed on pooled plan providers and 
                        participating employers.
                    ``(C) Exceptions.--The term `pooled employer plan' 
                does not include--
                            ``(i) a multiemployer plan; or
                            ``(ii) a plan established before January 1, 
                        2016, unless the plan administrator elects that 
                        the plan will be treated as a pooled employer 
                        plan and the plan meets the requirements of 
                        this title applicable to a pooled employer plan 
                        established on or after such date.
            ``(44) Pooled plan provider.--
                    ``(A) In general.--The term `pooled plan provider' 
                means a person who--
                            ``(i) is designated by the terms of a 
                        pooled employer plan as the plan administrator 
                        and as the person responsible for the 
                        performance of all administrative duties 
                        (including conducting proper testing with 
                        respect to the plan and employees of each 
                        participating employer) which are reasonably 
                        necessary to ensure that--
                                    ``(I) the plan meets the 
                                requirements of this Act and any 
                                requirement applicable under the 
                                Internal Revenue Code of 1986 to a plan 
                                described in section 401(a) of such 
                                Code or to a plan that consists of 
                                individual retirement accounts 
                                described in section 408 of such Code 
                                (including by reason of subsection (c) 
                                thereof), whichever is applicable; and
                                    ``(II) each participating employer 
                                takes such actions as the Secretary or 
                                pooled plan provider determines 
                                necessary for the plan to meet the 
                                requirements described in subclause 
                                (I), including providing the 
                                disclosures and information described 
                                in paragraph (43)(B)(v)(II);
                            ``(ii) registers as a pooled plan provider 
                        with the Secretary, and provides to the 
                        Secretary such other information as the 
                        Secretary may require, before beginning 
                        operations as a pooled plan provider;
                            ``(iii) acknowledges in writing that such 
                        person is a named fiduciary, and the plan 
                        administrator, with respect to the pooled 
                        employer plan; and
                            ``(iv) is responsible for ensuring that all 
                        persons who handle assets of, or who are 
                        fiduciaries of, the pooled employer plan are 
                        bonded in accordance with section 412.
                    ``(B) Audits, examinations and investigations.--The 
                Secretary may perform audits, examinations, and 
                investigations of pooled plan providers as may be 
                necessary to enforce and carry out the purposes of this 
                paragraph and paragraph (43).
                    ``(C) Guidance.--The Secretary shall issue such 
                guidance as the Secretary determines appropriate to 
                carry out this paragraph and paragraph (43), including 
                guidance--
                            ``(i) to identify the administrative duties 
                        and other actions required to be performed by a 
                        pooled plan provider under either such 
                        paragraph; and
                            ``(ii) which requires in appropriate cases 
                        that if a participating employer fails to take 
                        the actions required under subparagraph 
                        (A)(i)(II)--
                                    ``(I) the assets of the plan 
                                attributable to employees of the 
                                participating employer are transferred 
                                to a plan maintained only by the 
                                participating employer (or its 
                                successor), to an eligible retirement 
                                plan as defined in section 402(c)(8)(B) 
                                of the Internal Revenue Code of 1986 
                                for each individual whose account is 
                                transferred, or to any other 
                                arrangement that the Secretary 
                                determines is appropriate in such 
                                guidance; and
                                    ``(II) the participating employer 
                                described in subclause (I) (and not the 
                                plan with respect to which the failure 
                                occurred or any other participating 
                                employer in such plan) shall, except to 
                                the extent provided in such guidance, 
                                be liable for any liabilities with 
                                respect to such plan attributable to 
                                employees of the participating 
                                employer.
                The Secretary shall take into account under clause (ii) 
                whether the failure of an employer or pooled plan 
                provider to provide any disclosures or other 
                information, or to take any other action, necessary to 
                administer a plan or to allow a plan to meet 
                requirements described in subparagraph (A)(i)(II) has 
                continued over a period of time that clearly 
                demonstrates a lack of commitment to compliance. The 
                Secretary may waive the requirements of clause (ii)(I) 
                in appropriate circumstances if the Secretary 
                determines it is in the best interests of the employees 
                of the participating employer described in such clause 
                to retain the assets in the plan with respect to which 
                the employer's failure occurred.
                    ``(D) Aggregation rules.--For purposes of this 
                paragraph--
                            ``(i) In general.--In determining whether a 
                        person meets the requirements of this paragraph 
                        to be a pooled plan provider with respect to 
                        any plan, all persons who are members of the 
                        same controlled group and who perform services 
                        for the plan shall be treated as one person.
                            ``(ii) Members of common group.--Persons 
                        shall be treated as members of the same 
                        controlled group if such persons are treated as 
                        a single employer under subsection (c) or (d) 
                        of section 210.''.
            (2) Employee treated as exercising control over assets.--
        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:
            ``(6) In the case of a pooled employer plan that consists 
        of individual retirement accounts described in section 408 of 
        the Internal Revenue Code of 1986 (including by reason of 
        subsection (c) thereof) and that includes an automatic 
        contribution arrangement meeting the requirements of section 
        514(e) (determined without regard to paragraph (2)(C) thereof), 
        a participant or beneficiary shall, for purposes of paragraph 
        (1), be treated as exercising control over the assets in the 
        account upon the earliest of--
                    ``(A) an affirmative election among investment 
                options with respect to the initial investment of any 
                contribution,
                    ``(B) a rollover to any other individual retirement 
                account, or
                    ``(C) one year after the individual retirement 
                account is established.''.
            (3) Bonding requirements for pooled employer plans.--The 
        last sentence of section 412(a) of the Employee Retirement 
        Income Security Act of 1974 (29 U.S.C. 1112(a)) is amended by 
        inserting ``or in the case of a pooled employer plan'' after 
        ``section 407(d)(1))''.
            (4) Conforming and technical amendments.--Section 3 of the 
        Employee Retirement Income Security Act of 1974 (29 U.S.C. 
        1002) is amended--
                    (A) in paragraph (16)(B)--
                            (i) by striking ``or'' at the end of clause 
                        (ii), and
                            (ii) by striking the period at the end and 
                        inserting ``, or (iv) in the case of a pooled 
                        employer plan, the pooled plan provider.''; and
                    (B) by striking the second paragraph (41).
    (d) Effective Date.--
            (1) In general.--The amendments made by this section shall 
        apply to years beginning after December 31, 2016.
            (2) Rule of construction.--Nothing in the amendment made by 
        subsection (c) shall be construed as limiting the authority of 
        the Secretary of the Treasury or the Secretary's delegate 
        (determined without regard to such amendment) to provide for 
        the proper treatment of a failure to meet any requirement 
        applicable under the Internal Revenue Code of 1986 with respect 
        to one employer (and its employees) in a multiple employer 
        plan.

SEC. 3. POOLED EMPLOYER AND MULTIPLE EMPLOYER PLAN REPORTING.

    (a) Additional Information.--Section 103 of the Employee Retirement 
Income Security Act of 1974 (29 U.S.C. 1023) is amended--
            (1) in subsection (a)(1)(B), by striking ``applicable 
        subsections (d), (e), and (f)'' and inserting ``applicable 
        subsections (d), (e), (f), and (g)''; and
            (2) by amending subsection (g) to read as follows:
    ``(g) Additional Information With Respect to Pooled Employer and 
Multiple Employer Plans.--An annual report under this section for a 
plan year shall include--
            ``(1) with respect to any plan to which section 210(a) 
        applies (including a pooled employer plan), a list of 
        participating employers and a good faith estimate of the 
        percentage of total contributions made by such participating 
        employers during the plan year; and
            ``(2) with respect to a pooled employer plan, the 
        identifying information for the person designated under the 
        terms of the plan as the pooled plan provider.''.
    (b) Simplified Annual Reports.--Section 104(a) of the Employee 
Retirement Income Security Act of 1974 (29 U.S.C. 1024(a)) is amended 
by striking paragraph (2)(A) and inserting the following:
            ``(2)(A) With respect to annual reports required to be 
        filed with the Secretary under this part, the Secretary may by 
        regulation prescribe simplified annual reports for any pension 
        plan that--
                    ``(i) covers fewer than 100 participants; or
                    ``(ii) is a plan described in section 210(a) that 
                covers fewer than 1,000 participants, but only if no 
                single participating employer has more than 100 
                participants covered by the plan.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to annual reports for plan years beginning after December 31, 
2016.
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