H.R. 3509 (107th): Retirement Account Protection Act of 2001

107th Congress, 2001–2002. Text as of Dec 18, 2001 (Introduced).

Status & Summary | PDF | Source: GPO

HR 3509 IH

107th CONGRESS

1st Session

H. R. 3509

To amend title I of the Employee Retirement Income Security Act of 1974 to provide additional fiduciary protections for participants and beneficiaries under employee stock ownership plans with respect to lockdowns placed on plan assets.

IN THE HOUSE OF REPRESENTATIVES

December 18, 2001

Mr. BENTSEN introduced the following bill; which was referred to the Committee on Education and the Workforce


A BILL

To amend title I of the Employee Retirement Income Security Act of 1974 to provide additional fiduciary protections for participants and beneficiaries under employee stock ownership plans with respect to lockdowns placed on plan assets.

    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 Account Protection Act of 2001’.

SEC. 2. ADDITIONAL FIDUCIARY PROTECTIONS RELATING LOCKDOWNS UNDER EMPLOYEE STOCK OWNERSHIP PLANS.

    (a) IN GENERAL- Section 402(a)(2) of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1104(a)(2)) is amended--

      (1) by striking ‘In the case’ and inserting ‘Subject to subparagraph (B), in the case’; and

      (2) by adding at the end the following new subparagraph:

    ‘(B)(i) In the case of any eligible individual account plan (as defined in section 407(d)(3))--

      ‘(I) unless an exemption is obtained from the Secretary under clause (ii), no lockdown may be imposed by the plan sponsor, administrator, or any other fiduciary in connection with the nonforfeitable accrued benefit of a participant or beneficiary, and

      ‘(II) no lockdown may take effect until at least 90 days after written notice (which may include notice by means of electronic communication) of such a waiver is provided by the plan administrator to such participant or beneficiary.

    ‘(ii) The Secretary shall establish a procedure under which a plan administrator may apply for an exemption for purposes of clause (i). The Secretary may not grant such exemption unless the Secretary finds that such exemption is--

      ‘(I) administratively feasible,

      ‘(II) in the interests of the plan and of its participants and beneficiaires, and

      ‘(III) protective of the rights of participants and beneficiaries of the plan.

    Before granting such an exemption, the Secretary shall publish notice in the Federal Register of the pendency of the exemption, shall require that adequate notice be given to interested persons, and shall afford interested persons opportunity to present views.

    ‘(iii) Subparagraph (A) shall not apply in connection with any plan unless the plan provides for compliance with the requirements of clause (i).

    ‘(iv) For purposes of this subparagraph, the term ‘lockdown’ means any lockdown, blackout, or freeze with respect to, suspension of, or similar limitation on the ability of a participant or beneficiary (who has met minimum participation requirements applicable in accordance with section 202) to transfer some or all of the nonforfeitable accrued benefit of the participant or benefiary from investment in the form of qualifying employer securities (as defined in section 407(d)(5)) to another investment vehicle otherwise available under the terms of the plan. Such term does not include--

      ‘(I) any permanent limitation which applies only to benefits attributable to employer contributions, or

      ‘(II) any reasonable restriction on the frequency of transfers between investment vehicles, subject to such regulations as the Secretary may prescribe.’.

SEC. 3. STUDY RELATING TO CAPS ON INVESTMENT OF INDIVIDUAL ACCOUNT PLAN ASSETS IN EMPLOYER SECURITIES.

    (a) IN GENERAL- As soon as practicable after the date of the enactment of this Act, the Secretary of Labor, in consultation with the Secretary of the Treasury and the Securities and Exchange Commission, shall undertake a study relating to investment of plan assets of individual account plans in stock or other securities issued by the employer.

    (b) MATTERS TO BE STUDIED- In conducting the study pursuant to subsection (a), the Secretary shall--

      (1) consider the feasibility of statutory limits on the extent to which plan assets under individual account plans may be invested in stock or other securities issued by the employer, and

      (2) analyze such feasibility with respect to a range of possible statutory limits.

    (c) REPORT- Not later than 180 days after the date of the enactment of this Act, the Secretary shall submit a report to each House of the Congress setting forth the results of the study required under subsection (a). Such report shall include such recommendations for statutory or administrative changes as the Secretary of Labor, in consultation with the Secretary of the Treasury and the Securities and Exchange Commission, has determined to be appropriate.

SEC. 4. EFFECTIVE DATE AND RELATED RULES.

    (a) IN GENERAL- Subject to subsection (b), the amendments made by this Act shall apply with respect to plan years beginning on or after January 1, 2002.

    (b) SPECIAL RULE FOR COLLECTIVELY BARGAINED PLANS- In the case of a plan maintained pursuant to 1 or more collective bargaining agreements between employee representatives and 1 or more employers ratified on or before the date of the enactment of this Act, subsection (a) shall be applied to benefits pursuant to, and individuals covered by, any such agreement by substituting for ‘January 1, 2002’ the date of the commencement of the first plan year beginning on or after the earlier of--

      (1) the later of--

        (A) January 1, 2003, or

        (B) the date on which the last of such collective bargaining agreements terminates (determined without regard to any extension thereof after the date of the enactment of this Act), or

      (2) January 1, 2004.

    (c) PLAN AMENDMENTS- If the amendments made by this Act require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after January 1, 2004, if--

      (1) during the period after such amendments made by this Act take effect and before such first plan year, the plan is operated in accordance with the requirements of such amendments made by this Act, and

      (2) such plan amendment applies retroactively to the period after such amendments made by this Act take effect and before such first plan year.