Retirement Security for American Workers Act

I 116TH CONGRESS 1ST SESSION H. R. 1907 To amend the Internal Revenue Code of 1986 to modify the qualification requirements with respect to certain multiple employer plans with pooled plan providers, and for other purposes. IN THE HOUSE OF REPRESENTATIVES MARCH 27, 2019 Mr. BUCHANAN (for himself and Mr. KIND) introduced the following bill; which was referred to the Committee on Education and Labor, and in addition to the Committee on Ways and Means, for a period to be subse- quently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned A BILL To amend the Internal Revenue Code of 1986 to modify the qualification requirements with respect to certain multiple employer plans with pooled plan providers, and for other purposes. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘Retirement Security 4 for American Workers Act’’. 5 VerDate Sep 11 2014 00:11 Apr 09, 2019 Jkt 089200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H1907.IH H1907 pamtmann on DSKBFK8HB2PROD with BILLS 2 •HR 1907 IH SEC. 2. MULTIPLE EMPLOYER PLANS WITH POOLED PLAN 1 PROVIDERS. 2 (a) QUALIFICATION REQUIREMENTS.—Section 413 3 of the Internal Revenue Code of 1986 is amended by add- 4 ing at the end the following new subsection: 5 ‘‘(e) APPLICATION OF QUALIFICATION REQUIRE- 6 MENTS FOR CERTAIN MULTIPLE EMPLOYER PLANS WITH 7 POOLED PLAN PROVIDERS.— 8 ‘‘(1) IN GENERAL.—Except as provided in para- 9 graph (2), if a defined contribution plan to which 10 subsection (c) applies— 11 ‘‘(A) is sponsored by employers that both 12 have a common interest other than having 13 adopted the plan and control the plan, or 14 ‘‘(B) in the case of a plan not described in 15 subparagraph (A), has a pooled plan provider, 16 then the plan shall not be treated as failing to meet 17 the requirements under this title applicable to a plan 18 described in section 401(a) or to a plan that consists 19 of individual retirement accounts described in sec- 20 tion 408 of such Code (including by reason of sub- 21 section (c) thereof), whichever is applicable, merely 22 because one or more employers of employees covered 23 by the plan fail to take such actions as are required 24 of such employers for the plan to meet such require- 25 ments. 26 VerDate Sep 11 2014 00:11 Apr 09, 2019 Jkt 089200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H1907.IH H1907 pamtmann on DSKBFK8HB2PROD with BILLS 3 •HR 1907 IH ‘‘(2) LIMITATIONS.— 1 ‘‘(A) IN GENERAL.—Paragraph (1) shall 2 not apply to any plan unless the terms of the 3 plan provide that in cases of employers failing 4 to take the actions described in paragraph 5 (1)— 6 ‘‘(i) the assets of the plan attributable 7 to employees of the employer will be trans- 8 ferred to a plan maintained only by the 9 employer (or its successor), to an eligible 10 retirement plan as defined in section 11 402(c)(8)(B) for each individual whose ac- 12 count is transferred, or to any other ar- 13 rangement that the Secretary determines is 14 appropriate, unless the Secretary deter- 15 mines it is in the best interests of such em- 16 ployees to retain the assets in the plan, 17 and 18 ‘‘(ii) the employer described in clause 19 (i) (and not the plan with respect to which 20 the failure occurred or any other partici- 21 pating employer in such plan) shall, except 22 to the extent provided by the Secretary, be 23 liable for any liabilities with respect to 24 VerDate Sep 11 2014 00:11 Apr 09, 2019 Jkt 089200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H1907.IH H1907 pamtmann on DSKBFK8HB2PROD with BILLS 4 •HR 1907 IH such plan attributable to employees of the 1 employer. 2 ‘‘(B) FAILURES BY POOLED PLAN PRO- 3 VIDERS.—If the pooled plan provider of a plan 4 described in paragraph (1)(B) does not perform 5 substantially all of the administrative duties 6 which are required of the provider under para- 7 graph (3)(A)(i) for any plan year, the Sec- 8 retary, in the Secretary’s own discretion, may 9 provide that the determination as to whether 10 the plan meets the requirements under this title 11 applicable to a plan described in section 401(a) 12 or to a plan that consists of individual retire- 13 ment accounts described in section 408 of such 14 Code (including by reason of subsection (c) 15 thereof), whichever is applicable, shall be made 16 in the same manner as would be made without 17 regard to paragraph (1). 18 ‘‘(3) POOLED PLAN PROVIDER.—For purposes 19 of this subsection— 20 ‘‘(A) IN GENERAL.—The term ‘pooled plan 21 provider’ means, with respect to any plan, a 22 person who— 23 ‘‘(i) is designated by the terms of the 24 plan as a named fiduciary (as defined in 25 VerDate Sep 11 2014 00:11 Apr 09, 2019 Jkt 089200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H1907.IH H1907 pamtmann on DSKBFK8HB2PROD with BILLS 5 •HR 1907 IH section 402(a)(2) of the Employee Retire- 1 ment Income Security Act of 1974), as the 2 plan administrator, and as the person re- 3 sponsible to perform all administrative du- 4 ties (including conducting proper testing 5 with respect to the plan and employees of 6 each participating employer) which are 7 reasonably necessary to ensure that— 8 ‘‘(I) the plan meets the require- 9 ments of the Employee Retirement In- 10 come Security Act of 1974 and any 11 requirement applicable under this title 12 to a plan described in section 401(a) 13 or to a plan that consists of individual 14 retirement accounts described in sec- 15 tion 408 of such Code (including by 16 reason of subsection (c) thereof), 17 whichever is applicable, and 18 ‘‘(II) each participating employer 19 takes such actions as the Secretary or 20 such person determines necessary for 21 the plan to meet the requirements de- 22 scribed in subclause (I), including pro- 23 viding to such person any disclosures 24 or other information which the Sec- 25 VerDate Sep 11 2014 00:11 Apr 09, 2019 Jkt 089200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H1907.IH H1907 pamtmann on DSKBFK8HB2PROD with BILLS 6 •HR 1907 IH retary may require or which such per- 1 son otherwise determines is necessary 2 to administer the plan or to allow the 3 plan to meet such requirements, 4 ‘‘(ii) registers as a pooled plan pro- 5 vider with the Secretary, and provides such 6 other information to the Secretary as the 7 Secretary may require, before beginning 8 operations as a pooled plan provider, 9 ‘‘(iii) acknowledges in writing that 10 such person is a named fiduciary (within 11 the meaning of section 402(a)(2) of the 12 Employee Retirement Income Security Act 13 of 1974), and the plan administrator, with 14 respect to the plan, and 15 ‘‘(iv) is responsible for ensuring that 16 all persons who handle assets of, or who 17 are fiduciaries of, the plan are bonded in 18 accordance with section 412 of the Em- 19 ployee Retirement Income Security Act of 20 1974. 21 ‘‘(B) AUDITS, EXAMINATIONS AND INVES- 22 TIGATIONS.—The Secretary may perform au- 23 dits, examinations, and investigations of pooled 24 VerDate Sep 11 2014 00:11 Apr 09, 2019 Jkt 089200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H1907.IH H1907 pamtmann on DSKBFK8HB2PROD with BILLS 7 •HR 1907 IH plan providers as may be necessary to enforce 1 and carry out the purposes of this subsection. 2 ‘‘(4) GUIDANCE.— 3 ‘‘(A) IN GENERAL.—The Secretary shall 4 issue such guidance as the Secretary determines 5 appropriate to carry out this subsection, includ- 6 ing guidance— 7 ‘‘(i) to identify the administrative du- 8 ties and other actions required to be per- 9 formed by a pooled plan provider under 10 this subsection, 11 ‘‘(ii) which describes the procedures to 12 be taken to terminate a plan which fails to 13 meet the requirements to be a plan de- 14 scribed in paragraph (1), including the 15 proper treatment of, and actions needed to 16 be taken by, any participating employer of 17 the plan and the assets and liabilities of 18 the plan with respect to employees of that 19 employer, and 20 ‘‘(iii) identifying appropriate cases to 21 which the rules of paragraph (2)(A) will 22 apply to employers failing to take the ac- 23 tions described in paragraph (1). 24 VerDate Sep 11 2014 00:11 Apr 09, 2019 Jkt 089200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H1907.IH H1907 pamtmann on DSKBFK8HB2PROD with BILLS 8 •HR 1907 IH The Secretary shall take into account under 1 subparagraph (C) whether the failure of an em- 2 ployer or pooled plan provider to provide any 3 disclosures or other information, or to take any 4 other action, necessary to administer a plan or 5 to allow a plan to meet requirements applicable 6 to the plan under section 401(a) has continued 7 over a period of time that clearly demonstrates 8 a lack of commitment to compliance. 9 ‘‘(B) PROSPECTIVE APPLICATION.—Any 10 guidance issued by the Secretary under this 11 paragraph shall not apply to any action or fail- 12 ure occurring before the issuance of such guid- 13 ance. 14 ‘‘(5) MODEL PLAN.—The Secretary shall, in 15 consultation with the Secretary of Labor when ap- 16 propriate, publish model plan language which meets 17 the requirements of this subsection and of para- 18 graphs (43) and (44) of section 3 of the Employee 19 Retirement Income Security Act of 1974 and which 20 may be adopted to be treated as a pooled employer 21 plan.’’. 22 (b) NO COMMON INTEREST REQUIRED FOR POOLED 23 EMPLOYER PLANS.—Section 3(2) of the Employee Retire- 24 VerDate Sep 11 2014 00:11 Apr 09, 2019 Jkt 089200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\H1907.IH H1907 pamtmann on DSKBFK8HB2PROD with BILLS 9 •HR 1907 IH ment Income Security Act of 1974 (29 U.S.C. 1002(2)) 1 is amended by adding at the end the following: 2 ‘‘(C) A pooled employer plan shall be treat- 3 ed as— 4 ‘‘(i) a single employee pension benefit 5 plan or single pension plan; and 6 ‘‘(ii) a plan to which section 210(a) 7 applies.’’. 8 (c) POOLED EMPLOYER PLAN AND PROVIDER DE- 9 FINED.— 10 (1) IN GENERAL.—Section 3 of the Employee 11 Retirement Income Security Act of 1974 (29 U.S.C. 12 1002) is amended by adding at the end the fol- 13 lowing: 14 ‘‘(43) POOLED EMPLOYER PLAN.— 15 ‘‘(A) IN GENERAL.—The term ‘pooled em- 16 ployer plan’ means a plan— 17 ‘‘(i) which is an individual account 18 plan established or maintained for the pur- 19 pose of providing benefits to the employees 20 of two or more employers; 21 ‘‘(ii) which is a plan described in sec- 22 tion 401(a) of the Internal Revenue Code 23 of 1986 which includes a trust exempt 24 from tax under section 501(a) of such 25 VerDate Sep 11 2014 00:11 Apr 09, 2019 Jkt 089200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\H1907.IH H1907 pamtmann on DSKBFK8HB2PROD with BILLS 10 •HR 1907 IH Code or a plan that consists of individual 1 retirement accounts described in section 2 408 of such Code (including by reason of 3 subsection (c) thereof); and 4 ‘‘(iii) the terms of which meet the re- 5 quirements of subparagraph (B). 6 Such term shall not include a plan with respect 7 to which the participating employers both share 8 a common interest other than participation in 9 the plan and control the plan. 10 ‘‘(B) REQUIREMENTS FOR PLAN TERMS.— 11 The requirements of this subparagraph are met 12 with respect to any plan if the terms of the 13 plan— 14 ‘‘(i) designate a pooled plan provider 15 and provide that the pooled plan provider 16 is a named fiduciary of the plan; 17 ‘‘(ii) designate one or more trustees 18 meeting the requirements of section 19 408(a)(2) of the Internal Revenue Code of 20 1986 (other than a participating employer) 21 to be responsible for collecting contribu- 22 tions to, and holding the assets of, the 23 plan and require such trustees to imple- 24 ment written contribution collection proce- 25 VerDate Sep 11 2014 00:11 Apr 09, 2019 Jkt 089200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\H1907.IH H1907 pamtmann on DSKBFK8HB2PROD with BILLS 11 •HR 1907 IH dures that are reasonable, diligent, and 1 systematic; 2 ‘‘(iii) provide that each participating 3 employer retains fiduciary responsibility 4 for— 5 ‘‘(I) the selection and monitoring 6 in accordance with section 404(a) of 7 the person designated as the pooled 8 plan provider and any other person 9 who, in addition to the pooled plan 10 provider, is designated as a named fi- 11 duciary of the plan; and 12 ‘‘(II) to the extent not otherwise 13 delegated to another fiduciary by the 14 pooled plan provider and subject to 15 the provisions of section 404(c), the 16 investment and management of that 17 portion of the plan’s assets attrib- 18 utable to the employees of that par- 19 ticipating employer; 20 ‘‘(iv) provide that a participating em- 21 ployer, or a participant or beneficiary, is 22 not subject to unreasonable restrictions, 23 fees, or penalties with regard to ceasing 24 participation, receipt of distributions, or 25 VerDate Sep 11 2014 00:11 Apr 09, 2019 Jkt 089200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\H1907.IH H1907 pamtmann on DSKBFK8HB2PROD with BILLS 12 •HR 1907 IH otherwise transferring assets of the plan in 1 accordance with section 208; 2 ‘‘(v) require— 3 ‘‘(I) the pooled plan provider to 4 provide to participating employers any 5 disclosures or other information which 6 the Secretary may require, including 7 any disclosures or other information 8 to facilitate the selection or any moni- 9 toring of the pooled plan provider by 10 participating employers; and 11 ‘‘(II) each participating employer 12 to take such actions as the Secretary 13 or the pooled plan provider determines 14 necessary to administer the plan or 15 for the plan to meet the requirements 16 of this Act or any requirement appli- 17 cable under the Internal Revenue 18 Code of 1986 to a plan described in 19 section 401(a) of such Code or to a 20 plan that consists of individual retire- 21 ment accounts described in section 22 408 of such Code (including by reason 23 of subsection (c) thereof), whichever is 24 applicable, including providing any 25 VerDate Sep 11 2014 00:11 Apr 09, 2019 Jkt 089200 PO 00000 Frm 00012 Fmt 6652 Sfmt 6201 E:\BILLS\H1907.IH H1907 pamtmann on DSKBFK8HB2PROD with BILLS 13 •HR 1907 IH disclosures or other information which 1 the Secretary may require or which 2 the pooled plan provider otherwise de- 3 termines is necessary to administer 4 the plan or to allow the plan to meet 5 such requirements; and 6 ‘‘(vi) provide that any disclosure or 7 other information required to be provided 8 under clause (v) may be provided in elec- 9 tronic form and will be designed to ensure 10 only reasonable costs are imposed on 11 pooled plan providers and participating [Text truncated for display. 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