Lifetime Income For Employees Act

I 116TH CONGRESS 2D SESSION H. R. 8990 To amend the Employee Retirement Income Security Act of 1974 to permit default investment arrangements in annuities, and for other purposes. IN THE HOUSE OF REPRESENTATIVES DECEMBER 16, 2020 Mr. NORCROSS (for himself and Mr. WALBERG) introduced the following bill; which was referred to the Committee on Education and Labor A BILL To amend the Employee Retirement Income Security Act of 1974 to permit default investment arrangements in annuities, 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 ‘‘Lifetime Income For 4 Employees Act’’. 5 SEC. 2. DEFAULT INVESTMENT IN ANNUITY CONTRACTS. 6 Section 404(c)(5) of the Employee Retirement In- 7 come Security Act of 1974 (29 U.S.C. 1104(c)(5)) is 8 amended— 9 VerDate Sep 11 2014 16:30 Dec 31, 2020 Jkt 019200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H8990.IH H8990 pamtmann on DSKBC07HB2PROD with BILLS 2 •HR 8990 IH (1) in subparagraph (A), by adding at the end 1 the following: ‘‘Default investments made under this 2 subparagraph may include a covered annuity con- 3 tract.’’; and 4 (2) by adding at the end the following: 5 ‘‘(C) COVERED ANNUITY CONTRACT.— 6 ‘‘(i) IN GENERAL.—The term ‘covered 7 annuity contract’ means an investment in 8 an annuity contract that meets the fol- 9 lowing requirements: 10 ‘‘(I) The annuity contract does 11 not impose a liquidity restriction on 12 the transfer of invested amounts dur- 13 ing the 180-day period beginning on 14 the date of the initial investment in 15 such contract by the participant or 16 beneficiary. 17 ‘‘(II) The fiduciary ensures that 18 each participant or beneficiary is pro- 19 vided not later than 30 days before 20 the date of the imposition of a liquid- 21 ity restriction described in subclause 22 (I) written notice in a manner that is 23 reasonably designed to be understood 24 VerDate Sep 11 2014 16:30 Dec 31, 2020 Jkt 019200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H8990.IH H8990 pamtmann on DSKBC07HB2PROD with BILLS 3 •HR 8990 IH by the average plan participant, that 1 includes— 2 ‘‘(aa) an explanation of the 3 circumstances under which assets 4 in the account may be invested 5 on behalf of the participant or 6 beneficiary in the annuity con- 7 tract, including an explanation of 8 the targeted range and maximum 9 amount or percentage of such as- 10 sets to be invested; 11 ‘‘(bb) an explanation of the 12 rights, and any limitations or re- 13 strictions thereon, of a partici- 14 pant or beneficiary to direct or 15 transfer amounts invested, or to 16 be invested, in an annuity con- 17 tract to other investment alter- 18 natives available under the plan; 19 ‘‘(cc) a general description 20 of the annuity contract, including 21 the duration of guaranteed pay- 22 ments and identification of the 23 insurer; 24 VerDate Sep 11 2014 16:30 Dec 31, 2020 Jkt 019200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H8990.IH H8990 pamtmann on DSKBC07HB2PROD with BILLS 4 •HR 8990 IH ‘‘(dd) an explanation of how 1 a participant or beneficiary may 2 obtain additional information, in 3 writing or electronically, about 4 their investment alternatives; and 5 ‘‘(ee) a copy of the annuity 6 contract. 7 ‘‘(III) The fiduciary allocates not 8 more than 50 percent of any periodic 9 contribution or, immediately after a 10 rebalancing of account investments, 11 50 percent of the value of the assets 12 of the account, to the annuity con- 13 tract (or, as applicable, to the portion 14 thereof to which a liquidity restriction 15 applies after the 180-day period in 16 subclause (I)). 17 ‘‘(ii) DEFINITION OF ANNUITY CON- 18 TRACT.—For purposes of this paragraph, 19 the term ‘annuity contract’ means a con- 20 tract (or provision or feature thereof) 21 that— 22 ‘‘(I) is issued by an insurer quali- 23 fied to do business in a State; and 24 VerDate Sep 11 2014 16:30 Dec 31, 2020 Jkt 019200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H8990.IH H8990 pamtmann on DSKBC07HB2PROD with BILLS 5 •HR 8990 IH ‘‘(II) provides for the payment of 1 guaranteed benefits annually (or more 2 frequently) for a fixed term or for the 3 remainder of the life of the partici- 4 pant or beneficiary or the joint lives 5 of the participant and the partici- 6 pant’s designated beneficiary. 7 ‘‘(D) EFFECTIVE DATE.—The amendments 8 made by subsection (a) shall take effect on the 9 date of the enactment of the Lifetime Income 10 For Employees Act.’’. 11 Æ VerDate Sep 11 2014 16:30 Dec 31, 2020 Jkt 019200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6301 E:\BILLS\H8990.IH H8990 pamtmann on DSKBC07HB2PROD with BILLS