[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1993 Introduced in House (IH)]

<DOC>






116th CONGRESS
  1st Session
                                H. R. 1993

To amend the Internal Revenue Code of 1986 and the Employee Retirement 
 Income Security Act of 1974 to modify the rules relating to multiple 
 employer plans and pooled employer plans and to modify PBGC premiums 
                            for CSEC plans.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             March 29, 2019

  Mr. Kind (for himself and Mr. Kelly of Pennsylvania) introduced the 
 following bill; which was referred to the Committee on Education and 
Labor, 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 and the Employee Retirement 
 Income Security Act of 1974 to modify the rules relating to multiple 
 employer plans and pooled employer plans and to modify PBGC premiums 
                            for CSEC 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 ``Providing Retirement Security to 
Workers in Small Businesses, Cooperatives, and Service Organizations 
Act of 2019''.

SEC. 2. MULTIPLE EMPLOYER PLANS; POOLED EMPLOYER PLANS.

    (a) Qualification Requirements.--
            (1) In general.--Section 413 of the Internal 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 maintained by employers which have a 
                common interest other than having adopted 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 (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 
                the case of any employer in the plan failing to take 
                the actions described in paragraph (1)--
                            ``(i) the assets of the plan attributable 
                        to employees of such employer (or beneficiaries 
                        of such employees) will be transferred to a 
                        plan maintained only by such 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 the 
                        employees of such employer (and the 
                        beneficiaries of such employees) to retain the 
                        assets in the plan, and
                            ``(ii) such employer (and not the plan with 
                        respect to which the failure occurred or any 
                        other 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 such employer (or 
                        beneficiaries of such employees).
                    ``(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 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 (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.--
                    ``(A) In general.--For purposes of this subsection, 
                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 (within the meaning 
                        of 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 the employees of each employer in the 
                        plan) which are reasonably necessary to ensure 
                        that--
                                    ``(I) the plan meets any 
                                requirement applicable under the 
                                Employee Retirement Income Security Act 
                                of 1974 or this title to a plan 
                                described in section 401(a) or to a 
                                plan that consists of individual 
                                retirement accounts described in 
                                section 408 (including by reason of 
                                subsection (c) thereof), whichever is 
                                applicable, and
                                    ``(II) each employer in the plan 
                                takes such actions as the Secretary or 
                                such person determines are 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 are 
                                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.
                    ``(C) Aggregation rules.--For purposes of this 
                paragraph, 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 
                perform services for the plan and who are treated as a 
                single employer under subsection (b), (c), (m), or (o) 
                of section 414 shall be treated as one person.
                    ``(D) Treatment of employers as plan sponsors.--
                Except with respect to the administrative duties of the 
                pooled plan provider described in subparagraph (A)(i), 
                each employer in a plan which has a pooled plan 
                provider shall be treated as the plan sponsor with 
                respect to the portion of the plan attributable to 
                employees of such employer (or beneficiaries of such 
                employees).
            ``(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 
                        employer in the plan and the assets and 
                        liabilities of the plan attributable to 
                        employees of such employer (or beneficiaries of 
                        such employees), and
                            ``(iii) identifying appropriate cases to 
                        which the rules of paragraph (2)(A) will apply 
                        to employers in the plan failing to take the 
                        actions described in paragraph (1).
                The Secretary shall take into account under clause 
                (iii) 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) or 408, whichever is applicable, has continued 
                over a period of time that demonstrates a lack of 
                commitment to compliance.
                    ``(B) Good faith compliance with law before 
                guidance.--An employer or pooled plan provider shall 
                not be treated as failing to meet a requirement of 
                guidance issued by the Secretary under this paragraph 
                if, before the issuance of such guidance, the employer 
                or pooled plan provider complies in good faith with a 
                reasonable interpretation of the provisions of this 
                subsection to which such guidance relates.
            ``(5) Model plan.--The Secretary shall 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 
        in order for a plan to be treated as a plan described in 
        paragraph (1)(B).''.
            (2) Conforming amendment.--Section 413(c)(2) of such Code 
        is amended by striking ``section 401(a)'' and inserting 
        ``sections 401(a) and 408(c)''.
            (3) Technical amendment.--Section 408(c) of such Code is 
        amended by inserting after paragraph (2) the following new 
        paragraph:
            ``(3) There is a separate accounting for any interest of an 
        employee or member (or spouse of an employee or member) in a 
        Roth IRA.''.
    (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 2 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 maintained by 
                employers which have a common interest other than 
                having adopted 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 an employer in the plan) 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 employer in the 
                        plan 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 the 
                                portion of the plan's assets 
                                attributable to the employees of the 
                                employer (or beneficiaries of such 
                                employees);
                            ``(iv) provide that employers in the plan, 
                        and participants and beneficiaries, are 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 or paragraph (44)(C)(i)(II);
                            ``(v) require--
                                    ``(I) the pooled plan provider to 
                                provide to employers in the plan 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 employers in the plan; and
                                    ``(II) each employer in the plan to 
                                take such actions as the Secretary or 
                                the pooled plan provider determines are 
                                necessary to administer the plan or for 
                                the plan to meet any requirement 
                                applicable under this Act or 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 are 
                                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 
                        employers in the plan.
                    ``(C) Exceptions.--The term `pooled employer plan' 
                does not include--
                            ``(i) a multiemployer plan; or
                            ``(ii) a plan established before the date 
                        of the enactment of the Setting Every Community 
                        Up for Retirement Enhancement Act of 2019 
                        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.
                    ``(D) Treatment of employers as plan sponsors.--
                Except with respect to the administrative duties of the 
                pooled plan provider described in paragraph (44)(A)(i), 
                each employer in a pooled employer plan shall be 
                treated as the plan sponsor with respect to the portion 
                of the plan attributable to employees of such employer 
                (or beneficiaries of such employees).
            ``(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 a named fiduciary, 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 the 
                        employees of each employer in the plan) which 
                        are reasonably necessary to ensure that--
                                    ``(I) the plan meets any 
                                requirement applicable under this Act 
                                or 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 employer in the plan 
                                takes such actions as the Secretary or 
                                pooled plan provider determines are 
                                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 an employer in the plan fails to take 
                        the actions required under subparagraph 
                        (A)(i)(II)--
                                    ``(I) the assets of the plan 
                                attributable to employees of such 
                                employer (or beneficiaries of such 
                                employees) are transferred to a plan 
                                maintained only by such 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) such employer (and not the 
                                plan with respect to which the failure 
                                occurred or any other 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 
                                such employer (or beneficiaries of such 
                                employees).
                        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 
                        demonstrates a lack of commitment to 
                        compliance. The Secretary may waive the 
                        requirements of subclause (ii)(I) in 
                        appropriate circumstances if the Secretary 
                        determines it is in the best interests of the 
                        employees of the employer referred to in such 
                        clause (and the beneficiaries of such 
                        employees) to retain the assets in the plan 
                        with respect to which the employer's failure 
                        occurred.
                    ``(D) Good faith compliance with law before 
                guidance.--An employer or pooled plan provider shall 
                not be treated as failing to meet a requirement of 
                guidance issued by the Secretary under subparagraph (C) 
                if, before the issuance of such guidance, the employer 
                or pooled plan provider complies in good faith with a 
                reasonable interpretation of the provisions of this 
                paragraph, or paragraph (43), to which such guidance 
                relates.
                    ``(E) Aggregation rules.--For purposes of this 
                paragraph, 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 
                perform services for the plan and who are treated as a 
                single employer under subsection (b), (c), (m), or (o) 
                of section 414 of the Internal Revenue Code of 1986 
                shall be treated as one person.''.
            (2) 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 (as 
        defined in section 3(43))'' after ``section 407(d)(1))''.
            (3) 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) Pooled Employer and Multiple Employer Plan Reporting.--
            (1) Additional information.--Section 103 of the Employee 
        Retirement Income Security Act of 1974 (29 U.S.C. 1023) is 
        amended--
                    (A) in subsection (a)(1)(B), by striking 
                ``applicable subsections (d), (e), and (f)'' and 
                inserting ``applicable subsections (d), (e), (f), and 
                (g)''; and
                    (B) 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 employers 
        in the plan and a good faith estimate of the percentage of 
        total contributions made by such employers during the plan year 
        and the aggregate account balances attributable to each 
        employer in the plan (determined as the sum of the account 
        balances of the employees of such employer (and the 
        beneficiaries of such employees)); 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.''.
            (2) 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 employer in the plan has 100 or more 
                participants covered by the plan.''.
    (e) Effective Date.--
            (1) In general.--The amendments made by this section shall 
        apply to plan years beginning after December 31, 2020.
            (2) Rule of construction.--Nothing in the amendments made 
        by subsection (a) 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. MODIFICATION OF PBGC PREMIUMS FOR CSEC PLANS.

    (a) Flat Rate Premium.--Subparagraph (A) of section 4006(a)(3) of 
the Employee Retirement Income Security Act of 1974 (29 U.S.C. 
1306(a)(3)) is amended--
            (1) in clause (i), by striking ``plan,'' and inserting 
        ``plan other than a CSEC plan (as defined in section 
        210(f)(1))'';
            (2) in clause (v), by striking ``or'' at the end;
            (3) in clause (vi), by striking the period at the end and 
        inserting ``, or''; and
            (4) by adding at the end the following new clause:
                            ``(vii) in the case of a CSEC plan (as 
                        defined in section 210(f)(1)), for plan years 
                        beginning after December 31, 2018, for each 
                        individual who is a participant in such plan 
                        during the plan year an amount equal to the sum 
                        of--
                                    ``(I) the additional premium (if 
                                any) determined under subparagraph (E), 
                                and
                                    ``(II) $19.''.
    (b) Variable Rate Premium.--
            (1) Unfunded vested benefits.--
                    (A) In general.--Subparagraph (E) of section 
                4006(a)(3) of the Employee Retirement Income Security 
                Act of 1974 (29 U.S.C. 1306(a)(3)) is amended by adding 
                at the end the following new clause:
                            ``(v) For purposes of clause (ii), in the 
                        case of a CSEC plan (as defined in section 
                        210(f)(1)), the term `unfunded vested benefits' 
                        means, for plan years beginning after December 
                        31, 2018, the excess (if any) of--
                                    ``(I) the funding liability of the 
                                plan as determined under section 
                                306(j)(5)(C) for the plan year by only 
                                taking into account vested benefits, 
                                over
                                    ``(II) the fair market value of 
                                plan assets for the plan year which are 
                                held by the plan on the valuation 
                                date.''.
                    (B) Conforming amendment.--Clause (iii) of section 
                4006(a)(3)(E) of such Act (29 U.S.C. 1306(a)(3)(E)) is 
                amended by striking ``For purposes'' and inserting 
                ``Except as provided in clause (v), for purposes''.
            (2) Applicable dollar amount.--
                    (A) In general.--Paragraph (8) of section 4006(a) 
                of such Act (29 U.S.C. 1306(a)) is amended by adding at 
                the end the following new subparagraph:
                    ``(E) CSEC plans.--In the case of a CSEC plan (as 
                defined in section 210(f)(1)), the applicable dollar 
                amount shall be $9.''.
                    (B) Conforming amendment.--Subparagraph (A) of 
                section 4006(a)(8) of such Act (29 U.S.C. 1306(a)(8)) 
                is amended by striking ``(B) and (C)'' and inserting 
                ``(B), (C), and (E)''.
                                 <all>