Portable Pension Accounts
Amends the Employee Retirement Income Security Act of 1974 (ERISA) to establish portability requirements for qualified pension plans.
Requires qualified plans to:
(1) maintain portable pension accounts to receive transfers from other such plans or accounts; and
(2) make transfers of an employee's eligible amounts to another portable pension account, at the election of the employee upon separation from service.
Allows individuals to establish portable pension accounts on their own behalf for receiving and making transfers to other such accounts of their own or of qualified plans.
Sets forth standards for portable pension accounts, including distribution requirements for permitted retirement income forms, participant's consent, spousal consent, asset control, and notice.
Defines eligible amount with respect to any participant, for defined benefit plans and for defined contribution plans, to include employee contributions.
Sets forth a formula for determining the present value of accrued benefits of a participant.
Directs the Secretary of Labor to prescribe by regulations one or more prototype portable pension accounts which would, upon adoption by any plan sponsor, constitute a portable pension account meeting such portability requirements.
Requires that a plan sponsor of a portable pension account be at least one of the following:
(1) an employer adopting such an account;
(2) an employee association or organization sponsoring such an account on behalf of its members;
(3) a registered investment advisor;
(4) a bank;
(5) an insurance company qualified to do so, but only if participants are fully covered under a State guaranty fund; or
(6) a savings and loan association empowered by law to do so.
Title II: Minimum Benefit Pension System- Amends ERISA to establish a minimum benefit pension system.
Requires employers to establish and maintain minimum benefit pension plans which cover all employees who have completed one year of service (of at least 500 hours of service per employee).
Establishes standards for minimum benefit pension plans.
Requires employers who offer defined contribution plans to contribute to the minimum benefit not less than three percent (the applicable percentage) of the employee's compensation in the plan year.
Requires that, in the case of a defined benefit plan, the minimum benefit be the greater of:
(1) the present value of the participant's accrued benefit; or
(2) the amount such benefit would have been if the employer had made the minimum three-percent-of-compensation contribution.
Sets forth a special rule for contribution and benefit for part-time employees.
Requires that each participant have a nonforfeitable (or vested) right to such minimum accrued benefits.
Prohibits integrating (i.e.
reducing or offsetting) the minimum benefit with any other benefits under pension plans maintained by the employer or with the participant's benefits under the Social Security Act. Directs the Secretary of Labor to appoint a National Retirement Board consisting of one representative of employers, one representative of employees, and one expert in the field of pension benefits.
Authorizes the Board to make recommendations to increase the applicable percentage (three percent) if this is necessary to provide an adequate retirement income for plan participants.
Makes such recommendations effective for plan years beginning after the recommendation or the date specified there, whichever is later, until a subsequent recommendation takes effect.
Provides for a phase-in with lower applicable percentages for the first two plan years.
Sets forth special rules for aggregation, transition (with an exception for large employees), and maintenance of effort.
Imposes a civil penalty on the failure of an employer to maintain a minimum benefit pension plan with respect to any employee.
Makes such penalty inapplicable if such failure was due to reasonable cause and not to willful neglect, and is corrected within 30 days.
Make such minimum benefit plan requirements applicable to plan years beginning two years or more after the enactment of this Act. Directs the Secretaries of Labor and of the Treasury to issue regulations.