H.R.1130 - Retirement Security Act of 1997105th Congress (1997-1998)
Summary: H.R.1130 — 105th Congress (1997-1998)
Introduced in House (03/19/1997)
TABLE OF CONTENTS:
Title I: Pension Access and Coverage
Subtitle A: Improved Access to Individual Retirement
Subtitle B: Improved Fairness in Retirement Plan
Subtitle C: Improving Retirement Plan Coverage
Subtitle D: Simplifying Plan Requirements
Title II: Security
Subtitle A: General Provisions
Subtitle B: ERISA Enforcement
Title III: Portability
Title IV: Comprehensive Women's Pension Protection
Subtitle A: Pension Reform
Subtitle B: Protection of Rights of Former Spouses to
Pension Benefits Under Certain Government and
Government-Sponsored Retirement Programs
Subtitle C: Modifications of Joint and Survivor Annuity
Subtitle D: Spousal Consent Required for Distributions
From Section 401(k) Plans
Subtitle E: Women's Pension Toll-Free Phone Number
Title V: Date for Adoption of Plan Amendments
Retirement Security Act of 1997 - Title I: Pension Access and Coverage - Subtitle A: Improved Access to Individual Retirement Savings - Chapter 1: Contributions To Individual Retirement Plans Through Payroll Deductions - Amends the Internal Revenue Code (IRC) to require a private contractor with the Secretary of Labor to establish a system under which: (1) eligible employees, through employer payroll deductions, may make contributions to individual retirement plans; and (2) amounts in the individual retirement plans are invested according to certain requirements.
(Sec. 103) Provides for: (1) contributions to individual retirement plans; (2) investment options; (3) accounting and information; (4) administrative costs; (5) fiduciary responsibilities, liability and penalties, bonding, and investigative authority; and (6) selection of contractor.
(Sec. 108) Authorizes appropriations for: (1) the Secretary of Labor to design and award the contract for such system; and (2) the contractor to begin operations.
Chapter 2: Nonrefundable Tax Credit for Contributions to Individual Retirement Accounts - Amends IRC to allow a nonrefundable tax credit for a portion of contributions to individual retirement plans, calculated according to a specified scale.
Chapter 3: Expanded Individual Retirement Accounts to Increase Coverage and Portability - Subchapter A: IRA Deduction - Raises the income limitations for the individual retirement account (IRA) tax deduction, with a corresponding adjustment to the formula for the phaseout of such limitations.
(Sec. 122) Prescribes an inflation adjustment for the IRA deductible amount and income limitations.
Subchapter B: Distributions and Investments - Allows the use of distributions from individual retirement plans, without additional tax, to: (1) purchase first homes; (2) pay higher education expenses; or (3) pay financially devastating medical expenses.
(Sec. 132) Allows the use without penalty of distributions from certain plans during periods of unemployment.
(Sec. 133) Requires that contributions to individual retirement plans (other than special individual retirement accounts) be held for at least five years in certain cases before they may be distributed without specified tax consequences.
Chapter 4: Periodic Pension Benefits Statements - Amends the Employee Retirement Income Security Act of 1974 (ERISA) with respect to periodic pension benefits statements in cases of defined benefit plans, defined contribution plans, and multiemployer plans.
Subtitle B: Improved Fairness in Retirement Plan Benefits - Amends IRC to require a specified minimum employer contribution to simple retirement accounts. Provides for an employer option to suspend contributions with 30-days' notice. Amends ERISA with respect to fiduciary duties in the case of such accounts.
(Sec. 152) Amends IRC to set forth various nondiscrimination rules for qualified cash or deferred arrangements and matching contributions.
(Sec. 153) Increases from $75,000 to $80,000 per year specified compensation criteria for a highly compensated employee. Excludes specified categories of employees with respect to age, short length of service, and part-time service from the meaning of highly compensated employee.
Subtitle C: Improving Retirement Plan Coverage - Allows a tax credit for up to a maximum $500 of the qualified start-up costs of eligible small employers in establishing a qualified pension plan or qualified employer payroll deduction system.
(Sec. 162) Limits annual benefits under governmental and multiemployer plans to $90,000, eliminating the alternative 100 percent of high three-year average compensation limitation. Exempts from the $7,500 or one third of includible compensation limit for annual benefits certain excess benefit arrangements under deferred compensation plans of State and local governments and tax-exempt organizations. Prohibits such arrangements from being taken into account in determining whether any other plan is an eligible deferred compensation plan.
(Sec. 163) Declares that compensation deferred under a mirror plan shall not be taken into account in applying certain limits (with respect to deferred compensation plans of State and local governments and tax-exempt organizations) to compensation deferred under any other deferred compensation plan.
(Sec. 164) Sets forth special rules to treat contributions by self-employed individuals as matching contributions.
(Sec. 165) Amends specified Federal law relating to Federal employees to allow immediate participation in the Thrift Savings Plan for Federal employees by eliminating certain waiting periods.
(Sec. 166) Amends the IRC to revise the limits on contributions excluded from the calculation of non-deductible contributions for purposes of the tax on non-deductible contributions to a qualified employer plan.
(Sec. 167) Excludes from gross income any workers' compensation received by former police officers or fire fighters for heart disease or hypertension.
Subtitle D: Simplifying Plan Requirements - Amends IRC and ERISA to set a full funding limitation for multiemployer plans.
(Sec. 172) Eliminates IRC partial termination rules for multiemployer plans.
(Sec. 173) Revises IRC nondiscrimination and minimum participation rules with respect to governmental plans.
(Sec. 174) Eliminates specified ERISA requirements for plan descriptions and for filing of summary plan descriptions and descriptions of material modifications to a plan.
(Sec. 175) Replaces the 150 percent of current liability factor in the calculation of the full-funding limit with an incremental scale from 155 percent in 1998 to 170 percent in 2001, followed by zero in 2002 and succeeding years.
(Sec. 176) Directs the Secretaries of the Treasury and of Labor to expand their efforts to examine existing guidance regarding notice, recordkeeping, and operational requirements for retirement plans, in order to permit the use of new technologies by plan sponsors and administrators in ways which maintain the protection of the rights of participants and beneficiaries.
Title II: Security - Subtitle A: General Provisions - Amends ERISA to provide investment protection for specified plans that include qualified cash or deferred arrangements under IRC ("401(k) plans") by setting limitations on investment in employer securities and employer real property by cash or deferred arrangements. Provides a transition rule for plans holding excess securities or property.
(Sec. 202) Applies an ERISA requirement for annual, detailed investment reports to certain IRC 401(k) plans. Directs the Secretary of Labor, in prescribing regulations for required information in such reports, to consider including specified types of information.
(Sec. 203) Directs the Secretary of Labor to study and report to the Congress on: (1) the extent to which pension plans invest in collectibles; and (2) whether such investments present a risk to the pension security of the participants and beneficiaries of such plans.
(Sec. 204) Amends IRC to prohibit qualified employer plans from making loans through credit cards and other intermediaries.
(Sec. 205) Increases the amounts of multiemployer plan benefits guaranteed under ERISA.
(Sec. 206) Increases the maximum amount of the civil penalty which may be assessed administratively for certain prohibited transactions.
(Sec. 207) Amends ERISA with respect to substantial owner benefits to revise the phase-in of guarantee and the allocation of assets.
(Sec. 208) Directs the Secretary of Labor to report annually to the President and the Congress on plans from which residual assets were distributed to employers (reversion report).
(Sec. 209) Expresses the sense of the Congress that the Secretary of the Treasury should: (1) review existing correction mechanisms to determine whether modifications might facilitate additional utilization by sponsors, improve voluntary compliance, and hasten the correction of pension plans; (2) consider whether additional means of addressing nonegregious violations should be explored; and (3) make appropriate legislative recommendations.
Subtitle B: ERISA Enforcement - Amends ERISA enforcement provisions to repeal a limited scope audit requirement for employee pension benefit plans. Requires an accountant, in offering an opinion in the case of an employee pension benefit plan, to rely, to the extent consistent with generally accepted auditing standards, on the work of any independent public accountant of any bank or similar institution or insurance carrier that holds assets or processes transactions of the employee pension benefit plan, provided that such bank, institution, or insurance carrier is regulated, supervised, and subject to periodic examination by a State or Federal agency.
(Sec. 212) Sets forth additional ERISA requirements for qualified public accountants.
(Sec. 213) Amends ERISA and the IRC to exempt from the prohibition against assignment or alienation of an accrued pension benefit offsets for certain civil and criminal judgments against fiduciaries. Changes from mandatory to discretionary the imposition and amount of civil penalties for breach of fiduciary responsibilities.
Title III: Portability - Amends ERISA and the IRC to provide for faster vesting of employer matching contributions.
(Sec. 302) Revises certain restrictions on distributions from IRC 401(k) plans.
(Sec. 303) Amends ERISA and IRC with respect to an accrued benefit not to be decreased by plan amendment to revise the treatment of transfers between defined contribution plans.
(Sec. 304) Amends ERISA rules requiring transfer of benefits of missing participants to direct the Pension Benefit Guaranty Corporation (PBGC) to prescribe similar rules for multiemployer plans that terminate. Requires transfer of missing participants' plan benefits to the PBGC by certain plans not otherwise subject to ERISA enforcement provisions.
Title IV: Comprehensive Women's Pension Protection - Subtitle A: Pension Reform - Makes certain new rules for pension integration under the Tax Reform Act of 1986 applicable to all existing accrued benefits.
(Sec. 401) Amends IRC to: (1) disallow integration for simplified employee pensions; and (2) provide for eventual repeal of certain pension integration rules.
(Sec. 402) Sets forth rules regarding the application of minimum coverage requirements with respect to separate lines of business.
(Sec. 403) Amends IRC and ERISA with respect to division of pension benefits upon divorce, at the former spouse's election, to deem any State divorce decree to be a domestic relations order specifying that half of the marital share of the participant's accrued benefit is to be provided to such former spouse.
(Sec. 404) Amends the Railroad Retirement Act of 1974 (RRA) to entitle divorced spouses to railroad retirement annuities independent of the employee's actual entitlement.
Subtitle B: Protection of Rights of Former Spouses to Pension Benefits Under Certain Government and Government-Sponsored Retirement Programs - Amends RRA to extend Tier II railroad retirement benefits to surviving former spouses pursuant to divorce agreements.
(Sec. 412) Amends Federal civil service law with respect to survivor annuities for widows, widowers, and former spouses of Federal employees who die before attaining the age for deferred annuity under the Civil Service Retirement System (CSRS).
(Sec. 413) Amends Federal law relating to the armed forces to terminate a two-tier annuity computation and social security offset under the military survivor benefit plan.
(Sec. 414) Amends Federal civil service law with respect to payment of lump-sum benefits to former spouses of Federal employees under CSRS and the Federal Employees' Retirement System (FERS).
Subtitle C: Modifications of Joint and Survivor Annuity Requirements - Modifies ERISA and IRC requirements for joint and survivor annuities to provide for an alternative joint and two-thirds survivor annuity payable while both the participant and the spouse are alive.
Subtitle D: Spousal Consent Required for Distributions From Section 401(k) Plans - Amends IRC to require spousal consent for distributions from section 401(k) plans.
Subtitle E: Women's Pension Toll-Free Phone Number - Directs the Secretary of Labor to contract with an independent organization to create a women's pension toll-free phone number and contact. Authorizes appropriations.
Title V: Date for Adoption of Plan Amendments - Sets forth dates for adoption of plan amendments.