H.R. 3642 (107th): 401(k) Pension Right to Know Act of 2002

107th Congress, 2001–2002. Text as of Jan 29, 2002 (Introduced).

Status & Summary | PDF | Source: GPO

HR 3642 IH

107th CONGRESS

2d Session

H. R. 3642

To amend title I of the Employee Retirement Income Security Act of 1974 to require plan administrators of 401(k) plans to provide semiannual reports to participants and beneficiaries fully and accurately disclosing the financial health of the plan sponsor and promoting diversification of investment of their plan assets.

IN THE HOUSE OF REPRESENTATIVES

January 29, 2002

Mr. BONIOR 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 require plan administrators of 401(k) plans to provide semiannual reports to participants and beneficiaries fully and accurately disclosing the financial health of the plan sponsor and promoting diversification of investment of their 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 ‘401(k) Pension Right to Know Act of 2002’.

SEC. 2. SEMIANNUAL REPORTS PROMOTING DIVERSIFICATION AND DISCLOSING PLAN SPONSOR’S FINANCIAL HEALTH.

    Section 404 of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1104) is amended by adding at the end the following new subsection:

    ‘(e)(1) The plan sponsor of an individual account plan that includes a cash or deferred arrangement (as defined in section 401(k)(2) of the Internal Revenue Code of 1986) shall provide semiannually a written notice to each participant or beneficiary--

      ‘(A) setting forth a full and complete disclosure of the financial health of the plan sponsor, and

      ‘(B) advising participants and beneficiaries of the importance of diversifying the investment of the assets in their accounts and of the risk of holding in their portfolios securities of any one entity, including employer securities.

    ‘(2) The written notice required under paragraph (1) shall be in such form as may be prescribed in regulations of the Secretary.

    ‘(3) Any failure by a plan administrator to carry out the requirements of paragraph (1) shall be treated as a failure by the plan administrator to carry out the plan administrator’s fiduciary duties under subsection (a)(1). Subsection (c)(1)(B) shall not apply with respect to liability of the plan administrator in connection with any loss resulting from a participant’s or beneficiary’s exercise of control of the assets in his or her account in the absence of full and complete disclosure by the plan administrator as required under paragraph (1).’.

SEC. 3 EFFECTIVE DATE.

    The first written notice issued by a plan administrator in connection with any plan pursuant to the amendment made by this Act shall be issued not later than 30 days after the first day of the first plan year beginning after 60 days after the date of the enactment of this Act.