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Code · BILL · 113th Congress · H.R. 5828 (Introduced in House) — To provide for USA Retirement Funds, and for other purposes. · Sec. 3

Sec. 3. Establishment of USA Retirement Funds

2,631 words·~12 min read·/bill/113/hr/5828/ih/section-3

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For purposes of this title— The term USA Retirement Fund means a fund for which the Secretary has determined the requirements under this title are met. The board of trustees of a program established for purposes of being treated as a USA Retirement Fund under this section shall, prior to beginning operations, submit to the Secretary (at such time and in such manner as the Secretary may prescribe) a request for the Secretary to make a determination as to whether the plan meets the requirements of this title for such treatment.
Such request shall include copies of the written documents establishing the plan and such other materials as the Secretary may request. The Secretary shall make such determination within 180 days of receiving such request. The Secretary shall establish a process to periodically review each plan determined to be a USA Retirement Fund under paragraph
(1)to ensure that the plan continues to meet the requirements of this title. The Secretary shall maintain a public list of plans determined by the Secretary to qualify as USA Retirement Funds. Such list shall be posted to a publicly available Internet website. An individual may participate in any USA Retirement Fund for which such individual meets the eligibility requirements, individually or through an arrangement established by an employer. An individual who participates in a USA Retirement Fund shall not be precluded from participating in a plan or arrangement described in section 219(g)(5) of the Internal Revenue Code of 1986. For purposes of this title— the assets of each USA Retirement Fund shall be held in trust, and the Fund shall be governed by a board of trustees which shall consist of at least 3 individuals who— are independent of service providers to the Fund; meet the qualification requirements established under this section; and are collectively able to adequately represent the interests of active participants, retirees, and contributing employers. An individual is not independent of Fund service providers for purposes of paragraph (1)(B)(i) if such individual— is an employee of any Fund service provider; is a current or former officer or director of a significant Fund service provider, or is otherwise affiliated with such a provider; is a member of the immediate family of any person who is affiliated with a significant Fund service provider; derives more than 1 percent of the individual's annual income from a significant Fund service provider; derives more than 5 percent of the individual's annual income from any Fund service provider; or fails to meet meets such other criteria as are specified by the Secretary to ensure the independence of the board of directors. No individual may serve on the board of trustees of more than 1 USA Retirement Fund unless the Secretary receives attestation from the board of trustees of each applicable USA Retirement Fund and the individual that, at the time of appointment, there is no reasonably foreseeable conflict between the duties of such individual to the participants in each applicable USA Retirement Fund. In no case may an individual serve on the boards of trustees of more than 3 USA Retirement Funds. Each trustee of a USA Retirement Fund shall attest that the trustee is knowledgeable of the trustee's duties and responsibilities as a fiduciary of a USA Retirement Fund. The Secretary may require by regulation such other qualifications and documentation as may be necessary to ensure that trustees are suitable and qualified. Such requirements may include those related to education, training, and minimum competency standards. Each board of trustees of a USA Retirement Fund shall establish written procedures regarding the appointment, removal, and replacement of trustees on the board. Such procedures shall— take effect after adoption by the majority of the board of trustees; be readily available to participants; provide participants with a reasonable opportunity to comment on, or participate in, the trustee selection process; and provide for periodic election of trustees. The Secretary may require removal or suspension of a trustee if the conduct of the trustee is fraudulent or is causing, or can be reasonably expected to cause, significant, imminent, and irreparable harm to the participants or beneficiaries of a USA Retirement Fund. If a board of trustees of a USA Retirement Fund has no members meeting the criteria under this subsection, the Secretary shall appoint replacement trustees. Trustees of the Fund may be compensated at reasonable rates from the Fund, but only if such compensation is paid in accordance with the written board compensation policy adopted under paragraph (7)(A)(iv). The board of trustees of a USA Retirement Fund shall adopt and make available to participants and beneficiaries of, and employers contributing to, the USA Retirement Fund— a written investment policy statement; a written lifetime income policy statement; an annual performance assessment of the board of trustees, including an evaluation of weaknesses of the board and a plan to address such weaknesses; a written board compensation policy that includes current compensation levels and provides a reasonable opportunity for comment from participants, beneficiaries, and employers; and a written policy addressing conflicts of interests with respect to trustees. The board of trustees of a USA Retirement Fund shall establish procedures whereby a participant or beneficiary of such USA Retirement Fund may— petition the board of trustees to remove a trustee or service provider; comment on the management and administration of the USA Retirement Fund; and with respect to a USA Retirement Fund with more than $250,000,000 of assets, vote to approve or disapprove the compensation of the trustees at least once every 3 years. If participants and beneficiaries of a USA Retirement Fund vote to disapprove the compensation of trustees under clause (i)(III)— the results of such vote shall not be binding on the board of trustees; and the board of trustees shall notify the Secretary of the results of such vote and provide an explanation of why the compensation is reasonable or anticipated changes to the compensation. The trustees of each USA Retirement Fund shall have fiduciary liability insurance with a per-claim limit equal to no less than the greater of— 5 percent of plan assets; or $1,000,000. The trustees of a USA Retirement Fund shall manage the Fund with the intention of providing each participant with a cost-effective stream of income in retirement and reducing benefit level volatility (particularly for those approaching retirement). Each trustee of a USA Retirement Fund shall be a fiduciary subject to sections 404(a), 404(b), 405, 406, and 408 through 413 of the Employee Retirement Income Security Act of 1974 with respect to the Fund and participants and beneficiaries of the Fund. Each such trustee shall be subject to the standards and remedies of such sections and section 502 of such Act, as if the Fund were an employee benefit plan. Subject to paragraph (3), employers may, in addition to contributions an employee elects (or is treated as having elected) to have made, make a contribution of up to $5,000 per year to a USA Retirement Fund on behalf of each employee eligible to participate in a USA Retirement Fund, provided such contributions are made in a uniform manner (as the same dollar amount for each such employee or the same percentage of pay for each such employee) and are not intended to benefit solely highly compensated employees. An employee may not elect (or shall not be treated as having as elected) to contribute more than $15,000 per year to a USA Retirement Fund. The dollar amounts under paragraphs
(1)and
(2)shall be indexed annually for inflation. A USA Retirement Fund shall pay benefits in the form of an annuity in accordance with paragraph (2). The amount of such benefits shall be dependent on the amount of contributions made by the participant, the experience of the Fund, and the form of distribution elected by the participant. The amount of an annuity may be adjusted to reflect the experience of the Fund as necessary to protect the financial integrity of the Fund, except that annuity payments for those in pay status shall not be reduced more than 5 percent per year unless the Fund is faced with a significant financial hardship and the Secretary has approved the reduction. A USA Retirement Fund shall pay benefits in accordance with one of the following: In the case of a participant who does not die before the annuity starting date, the benefit payable to such participant shall be provided in the form of a qualified joint and survivor annuity (as defined in section 205(d)(1) of the Employee Retirement Income Security Act of 1974 ( 29 U.S.C. 1055(d)(1) )). In the case of a participant who dies before the annuity starting date and who has a surviving spouse, a qualified preretirement survivor annuity (as defined in section 205(d)(2) of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1055(d)(2))) shall be provided to the surviving spouse of such participant. In lieu of a qualified joint and survivor annuity form of benefit or the qualified preretirement survivor annuity form of benefit (or both), a participant may elect to receive a distribution described in subsection (f)(2) if one of the following conditions are met: The spouse of the participant consents in writing to the election. Such election designates a beneficiary (or form of benefits) which may not be changed without spousal consent (or the consent of the spouse expressly permits designations by the participant without any requirement of further consent by the spouse). The spouse’s consent acknowledges the effect of such election and is witnessed by a plan representative or a notary public. It is established to the satisfaction of a Fund representative that the consent required under subclause
(I)cannot be obtained because there is no spouse, because the spouse cannot be located, or because of such other circumstances as the Secretary may by regulations prescribe. The consent of a spouse (or establishment that the consent of a spouse cannot be obtained) under this subparagraph shall be effective only with respect to such spouse. A participant may elect the time to start receiving benefit payments from the USA Retirement Fund, except that a participant— except as provided in subsection (f)(2)(B), may not elect to receive benefit payments before reaching the age of 60; and must begin receiving benefit payments before the age of 72. Each Fund shall provide to each participant, within a reasonable period of time before the annuity starting date, a written explanation substantially similar to that required by section 205(c)(3) of the Employee Retirement Income Security Act of 1974 ( 29 U.S.C. 1055(c)(3) ). Benefits under a USA Retirement Fund shall be subject to section 206(d) of the Employee Retirement Income Security Act of 1974 ( 29 U.S.C. 1056(d) ). A participant may, not more frequently than once per year, transfer such participant's benefit to another USA Retirement Fund. Except as provided in subparagraphs
(B)and (C), a participant may not take a distribution other than one described in subsection (e)(2). A participant may before age 60 take a distribution of a portion of the participant's benefit if such distribution does not to exceed $5,500 and is rolled over to a qualifying plan or arrangement described in section 219(g)(5) of the Internal Revenue Code of 1986 or an individual retirement plan. A participant who is 60 or older but who has not entered pay status may elect one time to take a distribution of the greater of $10,000 or 50 percent of the participant's benefit if the participant demonstrates to the satisfaction of the trustees of the Fund that the participant has sufficient retirement income apart from the Fund or is facing a substantial hardship. A USA Retirement Fund shall establish and maintain mechanisms for adequately securing the payment of annuity benefits from the Fund. The Fund shall include a written description of such mechanisms in the investment and lifetime income policy statements required to be disclosed to participants. The mechanisms described in paragraph
(1)shall ensure that— each participant receives a stream of income for life; each participant and beneficiary has an opportunity to be protected against longevity risk; and volatility in benefit levels is minimized for participants and beneficiaries in pay status and those approaching pay status. Notwithstanding any other provision of law, a USA Retirement Fund may self-annuitize if the Fund meets such requirements as the Secretary establishes as necessary to protect participants and beneficiaries in consideration of the recommendations of the Commission under section 103. The Secretary shall, periodically and in accordance with established procedures, update the funding requirements promulgated under this paragraph in response to changing economic and business conditions to the extent necessary to carry out the purposes of this Act, taking into consideration the recommendations of the Commission. The trustees of a USA Retirement Fund shall provide each participant in the Fund an annual statement of— the estimated amount of the monthly benefit which the participant or beneficiary is projected to receive from the USA Retirement Fund, in the form of the default benefit described in the plan in accordance with subsection (e)(2); an explanation, written in a manner calculated to be understood by the average plan participant, that includes interest and mortality assumptions used in calculating the estimate and a statement that actual benefits may be materially different from such estimate; a disclosure of Fund fees and performance that is substantially similar to the disclosures required of individual account plans under the Employee Retirement Income Security Act of 1974; any other disclosures, including projected benefit estimates, that the board of trustees of the USA Retirement Fund determines appropriate; and such other disclosures as may be required by the Secretary. The trustees of a USA Retirement Fund shall provide participants a summary plan description (as described in section 102 of the Employee Retirement Income Security Act ( 29 U.S.C. 1022 )) as required by section 104(b) of the Employee Retirement Income Security Act ( 29 U.S.C. 1024(b) ). The trustees of a USA Retirement Fund shall file with the Secretary of Labor periodic reports in accordance with regulations promulgated by the Secretary. Each USA Retirement Fund shall be subject to sections 106 and 107 of the Employee Retirement Income Security Act of 1974 ( 29 U.S.C. 1026 , 1027). A USA Retirement Fund is exempt from taxation under subtitle A of the Internal Revenue Code of 1986. Notwithstanding the preceding sentence, a USA Retirement Fund is subject to the taxes imposed by section 511 of such Code (relating to imposition of tax on unrelated business income of charitable, etc. organizations). In the case of an individual, there shall be allowed as a deduction for the taxable year an amount equal to the amount of contributions to a USA Retirement Fund made by or on behalf of the individual under an automatic USA Retirement Fund arrangement under section 2(d). For purposes of this Act, rules similar to the rules of subparagraphs
(A)and
(D)of section 408(d)(3) of the Internal Revenue Code of 1986 shall apply. Any distribution from a USA Retirement Fund shall be includible in the gross income of the distributee in the manner as provided in section 72 of the Internal Revenue Code of 1986. For purposes of this Act, rules similar to the rules of paragraphs (2), (3), and
(4)of section 408(e)(2) of the Internal Revenue Code of 1986 shall apply. The trustees of a USA Retirement Fund shall make such reports regarding such Fund to the Secretary of the Treasury and to designated beneficiaries with respect to contributions, distributions, and such other matters as the Secretary of the Treasury may require. The reports required by this paragraph shall be filed at such time and in such manner and furnished to such individuals at such time and in such manner as may be required by the Secretary of the Treasury.
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Sec. 3
Establishment of USA Retirement Funds
U.S.C.§ 1055
U.S.C.§ 1056
U.S.C.§ 1022
U.S.C.§ 1024
U.S.C.§ 1026
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