1 See Memorandum to Pension Members No. 31-99, Tax Committee No. 21-99, Transfer Agent Advisory
Committee No. 53-99, Operations Committee No. 32-99 and Investment Advisers Committee No. 10-99, dated
August 13, 1999.
2 See Memorandum to Pension Committee No. 50-99 and Pension Operations Advisory Committee No. 38-99,
dated August 2, 1999, describing the Senate version of H.R. 2488, the “Taxpayer Refund Act of 1999” (herein,
“the Senate tax bill”).
[11315]
October 19, 1999
TO: PENSION COMMITTEE No. 60-99
PENSION OPERATIONS ADVISORY COMMITTEE No. 47-99
RE: PENSION REFORM MEASURES INCLUDED IN MINIMUM WAGE BILL
______________________________________________________________________________
Representative Lazio (R-NY) has introduced H.R. 3081, “The Wage and Employment Growth
Act of 1999,” which includes all of the pension reform measures previously included in Title XII of H.R.
2488, the tax bill vetoed by the President in September. For details on these provisions, please refer to
the Institute's memorandum on the tax bill.1 H.R. 3081 does not include the IRA expansion or
education-related provisions that were in the tax bill.
The bill does, however, include a number of additional provisions that originally appeared in
either the House or Senate versions of the tax bill (prior to changes made at conference), H.R. 1102 (the
“Portman-Cardin bill”), or other previously introduced legislation such as S. 741 (the “Graham-Grassley
bill”), but did not appear in the final version of the tax bill. These include the following:
1. Periodic Pension Benefits Statements. The bill would require the plan administrator of a defined
contribution plan to furnish a benefit statement to each participant at least once annually and to
a beneficiary upon written request. Defined benefit plan administrators would be required to
furnish benefit statements annually upon request, as under current law, and additionally, at least
once every 3 years to each participant who is currently employed by the employer.
Alternatively, in the case of a defined benefit plan, the plan administrator may annually furnish
written or electronic notice to each participant of the availability of such statements. In either
case, the statement must indicate total benefits accrued, the amount vested, the earliest date on
which benefits will become vested, and must be written in a manner calculated to be understood
by participants. The statement may be furnished in written, electronic, telephonic or other
appropriate form. Section 344; see section 351 of the Senate tax bill.2
3 See Memorandum to Pension Committee No. 14-99 and Pension Operations Advisory Committee No. 14-99,
dated March 16, 1999.
4 See Memorandum to Pension Committee No. 23-99 and Pension Operations Advisory Committee No. 23-99,
dated April 5, 1999.
5 See Memorandum to Pension Committee No. 46-99 and Pension Operations Advisory Committee No. 36-99,
dated July 28, 1999, describing H.R. 2488, the “Financial Freedom Act of 1999” (herein, “the House tax bill”).
2. Civil Penalties For Breach of Fiduciary Responsibility. The bill would modify ERISA section
502(l) to provide the Department of Labor discretionary authority with respect to the imposition
of civil penalty amounts. Section 345; see section 404 of the Portman-Cardin bill.3
3. Technical Corrections to the Saver Act. The bill would amend section 517 of ERISA to specify
the manner in which delegates are to be appointed to the quadrennial National Summit on
Retirement Income Savings (the “SAVER Summit”). Section 350; see section 1406 of the
Senate tax bill.
4. Model Spousal Consent Language and QDRO. The bill would amend ERISA sections 205(c)
and 206(d)(3) to direct the Secretary of Labor to develop model language for spousal consents
required under the Act and for qualified domestic relations orders. Section 351.
5. Elimination of ERISA Double Jeopardy. The bill would amend ERISA section 502(h) to bar the
Labor and Treasury Departments from instituting litigation in cases where a private action had
been brought and settled and the Department had been served a copy of the proposed
settlement 90 days before the court approved the settlement. Section 352; see section 408 of the
Graham-Grassley bill.4
6. Notice and Consent Period Regarding Distributions. The bill would extend to 180 days the 90-
day notice period under ERISA sections 203(e) and 205 and direct the Secretary of the Treasury
to modify its regulations to provide that the description of a participant’s right, if any, to defer
receipt of a distribution also shall describe the consequences of failing to defer receipt. Section
373; see section 1255 of the House tax bill.5
7. Annual Report Dissemination. The bill would require the summary annual report, which is
presently required to be furnished under ERISA section 104(b)(3), only be made available for
examination and be furnished only upon request. Section 374; see section 369 of the Senate tax
bill.
8. Excess Benefit Plans. The bill would amend section 3(36) of ERISA to expand the meaning of
the term “excess benefit plan” to include a plan maintained solely for the purposed of providing
employees benefits in excess of the Internal Revenue Code section 401(a)(17) or 415 limits “or
any other limitation on contribution or benefits” under the Code. Section 375; see section 522
of the Portman-Cardin bill.
9. Benefit Suspension Notice. The bill would direct the Secretary of Labor to modify the
regulation under ERISA section 203(a)(3)(b) to provide that the notification required to suspend
benefit payments may be included in the summary plan description rather than provided in a
separate notice. Section 376; see section 523 of the Portman-Cardin bill.
In addition to a provision that would increase the minimum wage, the bill also includes
provisions, that among other things, would provide estate tax relief and provide a 100 percent deduction
for health care costs of self-employed individuals.
We have attached the Table of Contents to the bill. For the relevant bill language and a full
description of the pension provisions that previously had been included in prior bills and reappear here,
please refer to our memoranda on the relevant bills, which are identified in the footnotes.
Russell G. Galer
Senior Counsel
Attachment