Sec. 3. Department of Labor oversight of top hat plans
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Not later than December 31, 2020, the Secretary of Labor shall issue guidance defining the term select group of management or highly compensated employees for purposes of the Employee Retirement Income Security Act of 1974 ( 29 U.S.C. 1001 et seq.). Such guidance shall address the participation rate and plan language with respect to a plan which is unfunded and is maintained by an employer primarily for the purpose of providing deferred compensation for a select group of management or highly compensated employees, and the compensation and description of job duties of employees eligible to participate in such plans.
Not later than December 31, 2020, the Secretary of Labor shall issue final regulations requiring the sponsors of plans that are unfunded and maintained by employers primarily for the purpose of providing deferred compensation for a select group of management or highly compensated employees to align eligibility requirements for participation in such plans with the guidance issued under subsection (a). Part 1 of title I of the Employee Retirement Income Security Act of 1974 ( 29 U.S.C. 1021 et seq.) is amended by adding at the end the following:
Beginning January 1, 2021, the plan sponsor of a plan which is unfunded and is maintained by an employer primarily for the purpose of providing deferred compensation for a select group of management or highly compensated employees shall report to the Secretary annually on, with respect to the previous plan year— the job title and salary of each employee participating in the plan; the percentage of the employer’s workforce that is eligible to participate in such plan; the percentage of employees who actually participated in the plan; a comparison of the annual compensation of employees eligible to participate in such plan with the annual compensation of employees not eligible to participate in the plan; and any other information, as the Secretary determines appropriate. .
The Secretary of the Treasury, in consultation with the Secretary of Labor, shall issue such regulations or guidance as are necessary— to assist plans in taking appropriate corrective actions when employees that are not part of a select group of management or highly compensated employees (as defined in the guidance issued pursuant to section 3(a)) are found to be participating in such plans; and to clarify the treatment of the consequences for purposes of the Internal Revenue Code of 1986 of the Secretary of Labor's guidance on plan corrective actions so that employees who are not part of the select group described in paragraph
(1)are not adversely affected, including guidance on actions which plan sponsors should take with respect to participants in such plans who have already made the maximum permissible contributions under qualified plans.
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