[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[S. 975 Introduced in Senate (IS)]

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116th CONGRESS
  1st Session
                                 S. 975

To amend the Employee Retirement Income Security Act of 1974 to provide 
 for greater spousal protection under defined contribution plans, and 
                          for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             April 1, 2019

   Mrs. Murray (for herself, Ms. Warren, Ms. Smith, Ms. Baldwin, Ms. 
 Stabenow, Mrs. Shaheen, Ms. Klobuchar, Mr. Sanders, Mrs. Gillibrand, 
Mr. Kaine, Mrs. Feinstein, Ms. Cantwell, Ms. Cortez Masto, Ms. Hirono, 
 Ms. Duckworth, Ms. Hassan, Ms. Harris, Mr. Merkley, Mr. Menendez, Mr. 
   Bennet, Ms. Rosen, Mr. Blumenthal, and Mr. Wyden) introduced the 
 following bill; which was read twice and referred to the Committee on 
                 Health, Education, Labor, and Pensions

_______________________________________________________________________

                                 A BILL


 
To amend the Employee Retirement Income Security Act of 1974 to provide 
 for greater spousal protection under defined contribution plans, 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 ``Women's Retirement Protection Act''.

SEC. 2. FINDINGS.

    Congress finds the following:
            (1) Approximately 29 percent of households headed by 
        individuals aged 55 through 74 have no defined benefit plan or 
        retirement savings, according to 2016 data from the Survey of 
        Consumer Finances.
            (2) Just over one-third of the private sector workforce 
        does not have access to a retirement plan at the workplace, and 
        only half of the workforce actually participates in a 
        retirement plan.
            (3) Women's retirement preparedness often lags 
        significantly behind their male counterparts', resulting in the 
        median retirement income for women in 2016 being just 58 
        percent of men's retirement income.
            (4) Women are 1.5 times as likely as men to live in poverty 
        after age 65.
            (5) Women make up \2/3\ of low-wage workers, even though 
        they comprise less than half of all workers, and low-wage 
        workers are less likely than other workers to participate in a 
        retirement plan at work.
            (6) Because of the pay gap, women working full-time, year-
        round typically lose $403,440 over a 40-year career thereby 
        requiring the average woman to work almost a decade longer than 
        her male counterpart to make up that career wage gap.
            (7) Due to the lower lifetime wages stemming from unequal 
        pay and caregiving duties, the average Social Security benefit 
        for a woman age 65 or older is $14,044 a year, while men of the 
        same age receive $18,173 a year, on average.
            (8) Just 1 in 5 part-time workers who work a full year are 
        eligible for a retirement plan, and women are almost twice as 
        likely to work part-time as men.
            (9) While traditional defined benefit retirement plans have 
        spousal protections, defined contribution retirement plans, 
        which have become increasingly common, currently provide no 
        similar spousal protections.
            (10) Every year, more than 1,200,000 couples get divorced 
        in the United States. After the family home, retirement savings 
        tends to be the largest asset to be divided in a divorce.
            (11) While fees and expenses associated with retirement 
        plans have been in decline, participants have seen direct 
        charges for processing qualified domestic relations orders 
        increase significantly.

SEC. 3. INCREASING SPOUSAL PROTECTION UNDER DEFINED CONTRIBUTION PLANS.

    (a) In General.--Part 2 of subtitle B of title I of the Employee 
Retirement Income Security Act of 1974 (29 U.S.C. 1051 et seq.) is 
amended by inserting after section 205 the following new section:

``SEC. 205A. ADDITIONAL SPOUSAL CONSENT REQUIREMENTS.

    ``(a) In General.--Each individual account plan to which section 
205 does not apply shall provide that, except as provided in 
subsections (c) and (d), no distribution may be made under the plan 
unless the spousal consent requirements of subsection (e) are met.
    ``(b) Coordination With Section 205.--Nothing in this section shall 
be construed to exempt an individual account plan from the requirements 
of paragraph (1)(C) or (2) of section 205(b) with respect to any 
participant.
    ``(c) Exceptions for Certain Distributions.--Subsection (a) shall 
not apply to--
            ``(1) any distribution that is--
                    ``(A) a minimum required distribution described in 
                section 4974(b) of the Internal Revenue Code of 1986;
                    ``(B) a result of the use of the participant's 
                accrued benefit as security for a loan, including any 
                distribution required by reason of a failure to comply 
                with the terms of such loan;
                    ``(C) made upon hardship of the participant; or
                    ``(D) permitted under section 203(e)(1) to be made 
                without the consent of the participant;
            ``(2) any distribution in the form of a qualified joint and 
        survivor annuity (as defined in section 205(d)(1)), a qualified 
        optional survivor annuity (as defined in section 205(d)(2)), a 
        qualified preretirement survivor annuity (as defined in section 
        205(e)), or a series of substantially equal periodic payments 
        (not less frequently than annually) made for the joint lives 
        (or life expectancies) of the participant and the participant's 
        spouse; or
            ``(3) in the case of a participant who does not elect a 
        form of benefit described in paragraph (2) under the plan or 
        who is participating in a plan that does not provide such a 
        form of benefit, any distribution of the participant's entire 
        nonforfeitable accrued benefit if 50 percent of such accrued 
        benefit is transferred to an individual retirement plan (as 
        defined in section 7701(a)(37) of the Internal Revenue Code of 
        1986) of the spouse of the participant.
A transfer described in paragraph (3) to an individual retirement plan 
shall be treated in the same manner as a transfer under section 
408(d)(6) of the Internal Revenue Code of 1986.
    ``(d) Exceptions for Certain Rollover Contributions.--Subsection 
(a) shall not apply to any distribution that is an eligible rollover 
distribution (as defined in section 402(f)(2)(A) of the Internal 
Revenue Code of 1986) made in the form of a direct trustee-to-trustee 
transfer within the meaning of section 401(a)(31) of the Internal 
Revenue Code of 1986--
            ``(1) to a plan to which this section or section 205 
        applies; or
            ``(2) to an individual retirement plan (as defined in 
        section 7701(a)(37) of the Internal Revenue Code of 1986) if--
                    ``(A) the beneficiary of such plan is the spouse of 
                the participant, or the spousal consent requirements of 
                subsection (e) are met with respect to any designation 
                of 1 or more other beneficiaries; and
                    ``(B) the beneficiary of such plan (whether the 
                spouse or other beneficiary designated under paragraph 
                (1)) may not be changed unless--
                            ``(i) the spousal consent requirements of 
                        subsection (e) are met with respect to any such 
                        change, or
                            ``(ii) the spousal consent under 
                        subparagraph (A) to the designation of a 
                        beneficiary other than the spouse expressly 
                        permits such designation to be changed without 
                        the further consent of the spouse.
    ``(e) Spousal Consent Requirements.--
            ``(1) In general.--For purposes of this section, except as 
        provided in paragraph (2), the spousal consent requirements of 
        this subsection are met with respect to any distribution or any 
        designation or change of beneficiary if--
                    ``(A) the plan provides to each participant, within 
                a reasonable period of time before such distribution or 
                designation or change of beneficiary is made and 
                consistent with such regulations as the Secretary of 
                the Treasury may prescribe, a written explanation of 
                the rights of the participant and the participant's 
                spouse under this section;
                    ``(B) the spouse of the participant consents in 
                writing to the distribution or designation or change of 
                beneficiary;
                    ``(C) in the case of a distribution, the written 
                consent under subparagraph (B) is made during the 
                consent period; and
                    ``(D) the written consent under subparagraph (B)--
                            ``(i) acknowledges the effect of such 
                        distribution or designation or change of 
                        beneficiary; and
                            ``(ii) is witnessed by a plan 
                        representative or a notary public.
            ``(2) Exceptions under section 205(c)(2)(b) to apply.--The 
        requirements of paragraph (1) (other than subparagraph (A) 
        thereof) shall not apply with respect to any distribution or 
        designation or change of beneficiary if a participant 
        establishes to the satisfaction of the plan administrator 
        that--
                    ``(A) there is no spouse;
                    ``(B) the participant and the participant's spouse 
                have not been married throughout the 1-year period 
                ending on the date of the distribution or designation 
                or change of beneficiary; or
                    ``(C) such consent cannot be obtained because--
                            ``(i) the spouse cannot be located;
                            ``(ii) due to exceptional circumstances, 
                        requiring the participant to seek the spouse's 
                        consent would be inappropriate; or
                            ``(iii) of such other circumstances as the 
                        Secretary of the Treasury may by regulations 
                        prescribe.
            ``(3) Consent limited to spouse and event.--Any written 
        consent by a spouse under paragraph (1), or the establishment 
        by a participant that an exception under paragraph (2) applies 
        with respect to a spouse, shall be effective only with respect 
        to that spouse and to the distribution or designation or change 
        of beneficiary to which it relates.
            ``(4) Consent period.--For purposes of this subsection, the 
        term `consent period' means, with respect to any distribution--
                    ``(A) the 90-day period immediately preceding the 
                date of such distribution; or
                    ``(B) such other period as the Secretary of the 
                Treasury may provide.
    ``(f) Discharge of Plan From Liability.--Rules similar to the rules 
of section 205(c)(6) shall apply for purposes of this section.''.
    (b) Clerical Amendment.--The table of sections of part 2 of 
subtitle B of title I of the Employee Retirement Income Security Act of 
1974 is amended by inserting after the item relating to section 205 the 
following new item:

``Sec. 205A. Additional spousal consent requirements.''.
    (c) Right of Action.--Section 502(a) of the Employee Retirement 
Income Security Act of 1974 (29 U.S.C. 1132) is amended by striking 
``or'' at the end of paragraph (10), by striking the period at the end 
of paragraph (11) and inserting ``; or'', and by adding at the end the 
following new paragraph:
            ``(12) by an individual for appropriate relief in the case 
        of a violation of the individual's rights under section 
        205A.''.
    (d) Parallel Amendment to Section 205.--Section 205(c)(2)(B) of the 
Employee Retirement Income Security Act of 1974 (29 U.S.C. 
1055(c)(2)(B)) is amended by inserting ``, because due to exceptional 
circumstances requiring the participant to seek the spouse's consent 
would be inappropriate'' after ``located''.

SEC. 4. IMPROVING COVERAGE FOR LONG-TERM PART-TIME WORKERS.

    (a) In General.--Section 202 of the Employee Retirement Income 
Security Act of 1974 (29 U.S.C. 1052) is amended by adding at the end 
the following new subsection:
    ``(c) Special Rule for Certain Part-Time Employees.--
            ``(1) In general.--A pension plan that includes either a 
        qualified cash or deferred arrangement (as defined in section 
        401(k) of the Internal Revenue Code of 1986) or a salary 
        reduction agreement (as described in section 403(b) of such 
        Code) shall not require, as a condition of participation in the 
        arrangement or agreement, that an employee complete a period of 
        service with the employer (or employers) maintaining the plan 
        extending beyond the close of the earlier of--
                    ``(A) the period permitted under subsection (a)(1) 
                (determined without regard to subparagraph (B)(i) 
                thereof) and section 410(a)(1) of such Code (determined 
                without regard to subparagraph (B)(i) thereof); or
                    ``(B) the first 24-month period--
                            ``(i) consisting of 2 consecutive 12-month 
                        periods during each of which the employee has 
                        at least 500 hours of service; and
                            ``(ii) by the close of which the employee 
                        has attained the age of 21.
            ``(2) Exception.--Paragraph (1)(B) shall not apply to 
        employees who are included in a unit of employees covered by an 
        agreement which the Secretary finds to be a collective 
        bargaining agreement between employee representatives and 1 or 
        more employers, if there is evidence that retirement benefits 
        were the subject of good faith bargaining between such employee 
        representatives and such employer or employers.
            ``(3) Coordination with other rules.--In the case of 
        employees who are not highly compensated employees (within the 
        meaning of section 414(q) of the Internal Revenue Code of 1986) 
        and who are eligible to participate in the arrangement or 
        agreement solely by reason of paragraph (1)(B):
                    ``(A) Exclusions.--An employer may elect to exclude 
                such employees from the determination of whether the 
                plan that includes the arrangement or agreement 
                satisfies the requirements of subsections (a)(4), 
                (k)(3), (k)(12), (k)(13), (m)(2), (m)(11), and (m)(12) 
                of section 401 of such Code, section 410(b) of such 
                Code, and section 416 of such Code. If the employer so 
                excludes such employees with respect to the 
                requirements of any such provision, such employees 
                shall be excluded with respect to the requirements of 
                all such provisions. This subparagraph shall cease to 
                apply to any employee as of the first plan year 
                beginning after the plan year in which the employee 
                completes 1 year of service (without regard to 
                paragraph (1)(B) of this subsection).
                    ``(B) Time of participation.--The rules of 
                subsection (a)(4) and section 410(a)(4) of the Internal 
                Revenue Code of 1986 shall apply to such employees.
            ``(4) 12-month period.--For purposes of this subsection, 
        12-month periods shall be determined in the same manner as 
        under the last sentence of subsection (a)(3)(A), except that 
        12-month periods beginning before January 1, 2019, shall not be 
        taken into account.''.
    (b) Vesting.--Section 203(b) of the Employee Retirement Income 
Security Act of 1974 (29 U.S.C. 1053(a)) is amended by redesignating 
paragraph (4) as paragraph (5) and by inserting after paragraph (3) the 
following new paragraph:
    ``(4) Part-Time Employees.--For purposes of determining whether an 
employee who is eligible to participate in a qualified cash or deferred 
arrangement or a salary reduction agreement under a plan solely by 
reason of section 202(c)(1)(B) has a nonforfeitable right to employer 
contributions--
            ``(A) except as provided in subparagraph (B), each 12-month 
        period for which the employee has at least 500 hours of service 
        shall be treated as a year of service; and
            ``(B) 12-month periods occurring before the 24-month period 
        described in section 202(c)(1)(B) shall not be treated as years 
        of service.
For purposes of this paragraph, 12-month periods shall be determined in 
the same manner as under the last sentence of section 202(a)(3)(A), 
except that 12-month periods beginning before January 1, 2019, shall 
not be taken into account.''.
    (c) Penalty.--Section 502 of the Employee Retirement Income 
Security Act of 1974 (29 U.S.C. 1132) is amended by adding at the end 
the following new subsection:
    ``(n) Requirements Relating to Part-Time Employees.--In the case of 
a plan that fails to permit participation as required by section 
202(c), the Secretary may assess a civil penalty against the plan 
sponsor in an amount equal to $10,000 per year per employee to whom 
such failure relates. The Secretary may, in the Secretary's sole 
discretion, waive or reduce the penalty under this subsection if the 
Secretary determines that the plan sponsor acted reasonably and in good 
faith.''.

SEC. 5. EFFECTIVE DATES.

    (a) Increasing Spousal Protection Under Defined Contribution 
Plans.--Except as provided in subsections (c) and (d), the amendments 
made by section 2 shall apply to distributions and rollover 
contributions made in plan years beginning after the date that is 6 
months after the date of the enactment of this Act.
    (b) Ensuring Coverage for Long-Term Part-Time Workers.--Except as 
provided in subsections (c) and (d), the amendments made by section 3 
shall apply to plan years beginning after December 31, 2019.
    (c) Collective Bargaining Agreements.--In the case of a plan 
maintained pursuant to one or more collective bargaining agreements 
between employee representatives and one or more employers ratified 
before the date of the enactment of this Act, the amendments made by 
sections 2 and 3 shall not apply to distributions or rollover 
contributions on behalf of employees covered by any such agreement for 
plan years beginning before the earlier of--
            (1) the later of--
                    (A) the date on which the last of such collective 
                bargaining agreements terminates (determined without 
                regard to any extension thereof on or after such date 
                of the enactment); or
                    (B) the day after the date specified in subsection 
                (a) or (b), whichever is applicable; or
            (2) the date that is 3 years after the applicable day 
        described in paragraph (1)(B).
    (d) Provisions Relating To Plan Amendments.--
            (1) In general.--If this paragraph applies to any plan or 
        contract amendment, such plan or contract shall be treated as 
        being operated in accordance with the terms of the plan during 
        the period described in paragraph (2)(C).
            (2) Amendments to which paragraph (1) applies.--
                    (A) In general.--Paragraph (1) shall apply to any 
                amendment to any plan or annuity contract which is 
                made--
                            (i) pursuant to the amendments made by 
                        section 2 or 3 or pursuant to any regulation 
                        issued under either such section; and
                            (ii) on or before the last day of the first 
                        plan year beginning on or after the date that 
                        is 3 years after the applicable day described 
                        in subsection (c)(1)(B).
                In the case of a governmental plan (as defined in 
                section 414(d) of the Internal Revenue Code of 1986), 
                this subparagraph shall be applied by substituting ``5 
                years'' for ``3 years'' in clause (ii).
                    (B) Conditions.--Subparagraph (A) shall not apply 
                to any amendment unless--
                            (i) the plan or contract is operated as if 
                        such plan or contract amendment were in effect 
                        for the period described in subparagraph (C); 
                        and
                            (ii) such plan or contract amendment 
                        applies retroactively for such period.
                    (C) Period described.--The period described in this 
                subparagraph is the period--
                            (i) beginning on the effective date 
                        specified by the plan; and
                            (ii) ending on the date described in 
                        subparagraph (A)(ii) (or, if earlier, the date 
                        the plan or contract amendment is adopted).

SEC. 6. ACCESS TO INDEPENDENT CONSUMER INFORMATION AND UNDERSTANDING.

    (a) Definitions.--As used in this section--
            (1) the term ``consumer'' means any person who purchases or 
        acquires any goods, products, services, or credit related to 
        the retirement or later life economic security of the consumer; 
        and
            (2) the term ``financial product or service provider'' 
        means any person who engages in the business of providing any 
        retirement financial product or service to any consumer.
    (b) Required Link to Consumer Awareness Information.--In any offer 
for the sale, exchange, or other transfer of a retirement financial 
product or service to a consumer carried out by a financial product or 
service provider, such provider shall provide, in a manner consistent 
with subsection (c), an easily accessible link to the website of the 
Bureau of Consumer Financial Protection (CFPB) at which the consumer 
may access information, literature, guides, programs, tools, 
strategies, or any other resource produced by the CFPB or other Federal 
agency relating to retirement planning or later life economic security.
    (c) Determination.--In order to ensure that the requirement under 
subsection (b) is effectively carried out, the Financial Literacy and 
Education Commission (FLEC) shall determine and publish on its website 
the appropriate link to the CFPB's website for access to the CFPB's and 
other Federal agencies' consumer education materials, the preferred 
format of such link, and any accompanying description of the CFPB and 
the consumer education materials associated with such link.

SEC. 7. GRANTS TO PROMOTE FINANCIAL LITERACY FOR WOMEN.

    (a) Authorization of Grant Awards.--The Secretary of Labor, acting 
through the Director of the Women's Bureau, shall award grants on a 
competitive basis to eligible entities to enable such entities to 
improve the financial literacy of women who are working age or in 
retirement, to increase the likelihood of the women realizing a secure 
and stable retirement.
    (b) Definition of Eligible Entity.--In this section, the term 
``eligible entity'' means a community-based organization with proven 
experience and expertise in serving working-age or retired women.
    (c) Application.--An eligible entity that desires to receive a 
grant under this section shall submit an application to the Secretary 
of Labor at such time, in such manner, and accompanied by such 
information as such Secretary may require.
    (d) Minimum Grant Amount.--The Secretary of Labor shall award 
grants under this section in amounts of not less than $250,000.
    (e) Use of Funds.--An eligible entity that receives a grant under 
this section shall use the grant funds to develop and implement 
financial literacy education, and related activities including 
outreach, awareness building, and counseling to increase women's 
knowledge of retirement planning and consumer, economic, and personal 
financial concepts.
    (f) Authorization of Appropriations.--There is authorized to be 
appropriated to carry out this section $100,000,000 for fiscal year 
2020 and each succeeding fiscal year.

SEC. 8. GRANTS TO ASSIST LOW-INCOME WOMEN AND SURVIVORS OF DOMESTIC 
              VIOLENCE IN OBTAINING QUALIFIED DOMESTIC RELATIONS 
              ORDERS.

    (a) Authorization of Grant Awards.--The Secretary of Labor, acting 
through the Director of the Women's Bureau in conjunction with the 
Assistant Secretary of the Employee Benefits Security Administration, 
shall award grants, on a competitive basis, to eligible entities to 
enable such entities to assist low-income women and survivors of 
domestic violence in obtaining qualified domestic relations orders and 
ensuring that those women actually obtain the benefits to which they 
are entitled through those orders.
    (b) Definition of Eligible Entity.--In this section, the term 
``eligible entity'' means a community-based organization with proven 
experience and expertise in serving women and the financial and 
retirement needs of women.
    (c) Application.--An eligible entity that desires to receive a 
grant under this section shall submit an application to the Secretary 
of Labor at such time, in such manner, and accompanied by such 
information as the Secretary of Labor may require.
    (d) Minimum Grant Amount.--The Secretary of Labor shall award 
grants under this section in amounts of not less than $250,000.
    (e) Use of Funds.--An eligible entity that receives a grant under 
this section shall use the grant funds to develop programs to offer 
help to low-income women or survivors of domestic violence who need 
assistance in preparing, obtaining, and effectuating a qualified 
domestic relations order.
    (f) Authorization of Appropriations.--There is authorized to be 
appropriated to carry out this section $100,000,000 for fiscal year 
2020 and each succeeding fiscal year.
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