1 Welfare and Pension Plans Disclosure Act or upon the termi2 nation thereof or from asserting jurisdiction in any action 3 by a fiduciary requesting instructions from the court or seek4 ing an interpretation of the trust instrument or other docu5 ment governing the fund. In any such action

(1) the provisions of this Act and the Welfare and Pension Plans Disclosure Act shall supersede any and all laws of the State and of political subdivisions thereof, insofar as they may now or hereafter relate to the fiduciary, reporting, and disclosure responsibilities

of persons acting on behalf of employee benefit plans, an employee benefit fund subject to the Welfare and Pension Plans Disclosure Act except insofar as they may

relate to the amount of benefits due beneficiaries under

the terms of the plan;

(2) notwithstanding any other law, the Secretary or, in the absence of action by the Secretary, a participant or beneficiary of the employee benefit plan or fund affected by this subsection, shall have the right to remove such action from a State court to a district court of the United States if the action involves an interpretation of

the fiduciary, or reporting, and disclosure responsibilities

of persons acting on behalf of employee benefit plans subject to the Welfare and Pension Plans Disclosure Act;

(3) the jurisdiction of the State court shall be con

ditioned upon

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(A) written notification, sent to the Secretary by registered mail at the time such action is filed, identifying the parties to the action, the nature of the action, and the plan involved; and satisfactory evidence presented to the court that the participants and beneficiaries have been adequately notified with

respect to the action; and

(B) the right of the Secretary or of a partici

pant or beneficiary to intervene in the action as an interested party.

TITLE VII-EFFECTIVE DATES

SEC. 701. (a) Sections 101, 102, 103, and 104, title V,

13 and title VI of this Act shall become effective upon the date 14 of enactment of this Act.

15 (b) Titles II, III, and IV of this Act shall become 16 effective one year after the date of enactment of this Act, 17 except that, with respect to any plan the terms of which 18 have been agreed upon pursuant to a collective-bargaining 19 agreement which is in effect on the date of enactment of this 20 Act but which expires after the effective date of titles II, 21 III, and IV, such titles shall become applicable to such plan. 22 on the date of expiration of such collective-bargaining

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agreement, but in no event later than three years after the 24 date of enactment of this Act.

Summary of Major Provisions of the Williams-Javits Pension Reform Bill-Retirement Income Security for Employees Act

PURPOSES

The purposes of the "Retirement Income Security for Employees Act" are:

1. To confer upon the Secretary of Labor the duty and responsibility to implement and administer the programs and provisions of this Act designed to improve and coordinate the establishment, administration, and operations of private employee pension and welfare plans, and provide for the enforcement of its provisions through administrative and judicial remedies.

2. To improve employee benefit plans by creating standards which will promote and adequately protect the interests of workers covered by such plans by making provisions for:

(a) Prescribed minimum vested benefits to employees after they have worked reasonable periods of time with an employer;

(b) The protection of the worker's earned rights to benefits in his or her pension plan by a combination of minimum and required standards of funding, and a Federal program of insurance to prevent losses of unfunded vested benefits where the plan terminates;

(c) A voluntary system of portability and reciprocity of credits to enable workers to transfer their earned retirement credits among different employers;

(d) Minimum standards and safeguards against abuses in the administration and management of employee benefit funds, and requirement of more comprehensive disclosure and detailed reporting of the plan, including full financial disclosure of the plan's operations, and also sufficient explanation to workers of their rights, obligations, and benefits.

(e) Effective judicial enforcement of the Act's provisions by the government and the workers affected.

TITLE I-ORGANIZATION, POWERS, AND DUTIES OF THE SECRETARY OF LABOR

Sec. 101. The Secretary would have the responsibility to promote programs and plans for the establishment, administration, and operations of employee benefit plans. It would require the registration of such plans with the Secretary upon compliance with requirements set forth in the statute. The Secretary would also direct, administer, and enforce a pension insurance program and others relating to portability, vesting, funding, and fiduciary and disclosure requirements. The Secretary is empowered to conduct inquiries reasonably necessary to ascertain violations of the Act and use subpoena powers if necessary, and bring authorized actions to enforce the Act, prescribe rules governing actuarial standards, certify actuaries as qualified to furnish reports required under the Act, and furnish Congress with annual reports and studies.

OFFICE OF ADMINISTRATION

Sec. 103. Within the Department of Labor, there shall be an Office of Pension and Welfare Plan Administration to be headed by an Assistant Secretary of Labor, appointed by the President, with Senate advice and consent, to exercise power and authority delegated the Secretary of Labor for the administration and enforcement of the Act.

COVERAGE AND EXEMPTIONS

Sec. 104. Unless exempt, the provisions of the Act apply to any pension or profit-sharing-retirement plan established or maintained by an employer, a union, or both together in any industry or activity affecting interstate commerce. The fiduciary provisions of the Act apply to all employee benefit plans unless exempt.

The Act does not apply to plans administered by federal or state governments, plans administered by religious organizations, plans for the self-employed, plans covering not more than 25 participants, plans established outside the territorial jurisdiction of the United States for citizens of other countries, certain plans for key executives and plans for members of labor organizations which are financed exclusively from the members' dues.

The funding and plan termination insurance requirements are not applicable to profit-sharing or money purchase plans, because of the nature of these plans.

REGISTRATION OF PLANS

Sec. 105. Requires covered pension and profit-sharing-retirement plans to file and register with the Secretary and upon a finding that the plan is qualified for registration, the plan is issued a certificate of registration by the Secretary. The criterion for granting a certificate of registration is compliance with the requirements of the Act. Every plan must apply for plan termination insurance as a condition for registration.

CERTIFICATE OF RIGHTS

SEC. 108. The Secretary shall require by regulation that each plan furnish a vested participant, upon his termination of service with the plan, with a certificate reciting the benefits due the participant and the location of the entity responsible for payment and the date when payment shall begin.

TITLE II-VESTING AND FUNDING REQUIREMENTS PART A-VESTING

ELIGIBILITY

SEC. 201. No pension or profit-sharing-retirement plan may require as a condition for eligibility in the plan a period of service longer than six months or an age greater than 21, whichever occurs later.

VESTING SCHEDULE

SEC. 202. All pension and profit-sharing-retirement plans are required to vest rights in participants with respect to service on or after the effective date of the title at the rate of a 30 percent vested interest commencing with eight years of service, and increasing by 10 percent each year thereafter in order that 100 percent vesting is attained after 15 years of service.

It further provides that no more than three of the eight years required to qualify for a 30 percent vested right need be continuous years of service, but that service prior to the age of 21 may be ignored in determining eligibility for a vested right unless the participant or his employer has made contributions to the plan with respect to service prior to age 21.

Any plan may allow more liberal vesting than required by the Act.

PART B-FUNDING

SEC. 210. Every employer is required to provide contributions for funding of his pension plan in a manner adequate to liquidate all pension benefit liabilities which may accrue under the terms of the plan. Employers must fund all normal service costs annually and must fund initial unfunded liabilities existing on the effective date of this Title, or in any plan established after the effective date of the Title, within 40 years from the applicable date. If any amendment to the plan results in substantial increase to the plan's unfunded liabilities, the increase shall be funded separately as if it were a new plan and shall be regarded as a new plan for purposes of the plan termination insurance program established under this Act.

If a plan has an experience deficiency (resulting from actuarial error) for any particular year, the deficiency must be liquidated in no more than a five-year period.

Within six months after the effective date of the Title or within six months after the date of plan establishment, whichever is later, the plan is required to submit a report by an actuary who has been certified by the Secretary, stating information necessary to determine the appropriate application of the funding requirements to the plan. Plans are also required to be reviewed every five years by certified actuaries who are to report the funding obligations that must be met and any surplus or experience deficiencies. The Secretary is authorized to exempt certain plans from these filing requirements.

DISCONTINUANCE OF PLANS

SEC. 211. The Act requires all funds of terminated pension plans to be distributed according to the following priorities:

First, to retirees or persons eligible to retire on date of plan termination; second, to participants who have vested rights under the plan but who have not reached retirement age; and, third, to other participants. In addition, employers are held liable for contributions owing to the plan that were required to be made by virtue of the funding requirements of the Act, but which were not made as of the date of plan termination.