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H.R. 2935 (93rd): Employee Benefit Security Act


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The summary below was written by the Congressional Research Service, which is a nonpartisan division of the Library of Congress.


1/24/1973--Introduced. Employee Benefit Security Act - Declares it to be the policy of this Act to protect interstate commerce and the interests of participants in employee benefit plans and their beneficiaries, by requiring the disclosure and reporting to participants and beneficiaries of financial and other information with respect thereto, by establishing standards of fiduciary conduct, responsibility, and obligation upon all persons who exercise any powers of control, management, or disposition with respect to employee benefit funds or have authority or responsibility to do so, or have authority or responsibility in the administration of employee benefit plans, and by providing for appropriate remedies, sanctions, and ready access to the Federal courts. Title I: Fiduciary Responsibility and Disclosure - Provides that this title shall apply to any employee benefit plan if it is established or maintained by any employer engaged in commerce or in any industry or activity affecting commerce, or by any industry or activity affecting commerce. participate, or both. Provides that the administrator of an employee benefit plan shall cause to be published in accordance with this Act to each participant or beneficiary covered thereunder a description of the plan and an annual financial report. States that such description shall be published within ninety days after such plan is established and shall be written in a manner calculated to be understood by the average plan participant. Provides that an annual report shall be published with respect to any employee benefit plan to which this title applies. Sets forth the information that shall be contained in such report. Provides that the administrator of any employee benefit plan subject to this Act shall file with the Secretary of Labor a copy of the plan description and each annual report. States that the Secretary may reject any such filing after notice, hearing, and determination by the Secretary that such filing is incomplete for the purpose of this title. Sets forth criminal penalties for intentional violations of this title. Provides that civil actions may be brought under this title by a participant or beneficiary: (1) for personal liability to such participant or beneficiary for failure to provide information required under this Act; or (2) to recover benefits due him under the terms of his plan or to clarify his rights to future benefits. Authorizes such actions by: (1) the Secretary, or by a participant, beneficiary or fiduciary, for appropriate relief under the fiduciary responsibility provisions of this Act; or (2) by the Secretary to enjoin any act or practice which appears to him to violate any provision of this title. Provides that the contents of the descriptions and regular annual reports filed with the Secretary pursuant to this title shall be public information. Provides for the bonding of persons who have fiduciary responsibilities under this title and of persons who handle funds or other property of an employee benefit plan. Sets forth the fiduciary responsibilities of the administrators of plans covered by this Act. Establishes an Advisory Council on Employee Welfare and Pension Benefit Plans to advise the Secretary with respect to the carrying out of his functions under this title. Title II: Vesting - Provides that this title shall apply to any employee pension benefit plan if it is established or maintained by an employer engaged in commerce or in any industry or activity affecting commerce or by such employer together with any employee organization representing employees engaged in commerce or in any industry or activity affecting commerce; or if such plan is established or maintained by any employer or by any employer together with any employee organization and if, in the course of its activities, such plan, directly or indirectly, uses any means or instruments of transportation or communication in interstate commerce or the mails. Excludes from the coverage of this title any employee pension benefit plan if: it is administered by the Federal Government or by an agency or instrumentality of the Federal Government; it is established and maintained outside the United States primarily for the benefit of persons who are not citizens of the United States; or it provides contributions or benefits for a sole proprietor or, in the case of a partnership, a partner who owns more than 10 percent of either the capital interest or the profits interest in such partnership. Specifies that no pension plan subject to this title may provide as a condition of eligibility a period of service longer than 2 years or age higher than 30 years. Establishes certain nonforfeitable rights on the part of employees to receive benefits. Stipulates that in computing the period of service under a plan, the employee's entire service with the contributing employer must be considered, except in specified instances. Allows the Secretary to require a certificate of approval with respect to the vesting provisions of any pension plan. Title III: Funding - Provides that this title applies to the same employee benefit pension plans as does title II and excludes from coverage, in addition to those plans excluded under title II, any plan which has a fixed contribution rate and does not provide an amount expected to be paid as a fixed benefit and any plan which is a profit-sharing plan providing benefits at or after retirement. Requires pension plans subject to this title to provide for contributions to the plan in amounts necessary to meet an amount equal to the normal cost since inception of the plan plus interest on any unfunded past service costs and to maintain a minimum ratio of assets to vested liabilities according to a certain schedule. Requires the administrator of a plan to, at certain intervals, file with the Secretary a statement containing the following information: (1) the amount of normal cost since inception of the plan plus interest on any unfunded past service costs; (2) the total amount of the plan's vested liabilities at the close of its preceding fiscal year; (3) the assets held by the plan as of the close of its preceding fiscal year valued at market value or by any other method approved by the Secretary pursuant to regulation; (4) the number of years the plan has been in effect; (5) a statement of the amount, if any, by which the assets held by the plan either exceed or fall below the amount of assets required in order for the plan to meet the required funding ratio; and (6) such other information determined by the Secretary by regulation to be necessary for adequate disclosure of a plan's funding status. Provides that when the contributions to a pension plan fall below amounts necessary to meet the normal cost of the plan plus interest on past costs, the Secretary shall require by order, after notice and opportunity for hearing, that the administrator take necessary steps to guarantee that the rights of each participant to benefits or to the amounts credited to his account are nonforfeitable in the event of the participant's termination. Provides that when a plan's ratio of assets to vested liabilities falls below the funding ratio required, the plan's vested liabilities shall not be increased by an amendment until the plan's required ratio is attained. Specifies that when a plan's ratio of assets to vested liabilities falls below the required ratio for 5 consecutive years, the Secretary shall require that the administrator take steps to suspend further accumulation of vested liabilities.