US Codex
Bill
Notes

Title IV — Other systemic reforms

S. 1979 · 113th Congress · Jan 30, 2014 · Lineage

IV Other systemic reforms

Sec. 401 Plan audit quality improvement

(a)
Annual reports— Section 103(a)(3) of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1023(a)(3)) is amended—
(1)
in subparagraph (A), by striking “in conformity with generally accepted accounting principles applied on a basis consistent with that of the preceding year. Such examination shall be conducted in accordance with generally accepted auditing standards, and shall involve such tests of the books and records of the plan as are considered necessary by the independent qualified public accountant.” and inserting “in conformity with generally accepted accounting principles, as superseded or modified by the Secretary in regulations, applied on a basis consistent with that of the preceding year. Such examination shall be conducted in accordance with generally accepted auditing standards, except as superseded or modified by the Secretary in regulations, and shall involve such tests of the books and records of the plan as are considered necessary by the independent qualified public accountant.”; and
(2)
by adding at the end the following:

“(E) Persons described in subparagraphs (i) through (iii) of subparagraph (D) shall be subject to such additional standards regarding conflicts of interest, qualifications, and direct reporting of certain events such as fraud and other irregularities as the Secretary may prescribe in regulations.”

(b)
Civil enforcement— Section 502(c)(2) of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1132(c)(2)) is amended by adding at the end the following new sentence: “If the Secretary rejects an annual report in whole or in part due to the failure to comply with a requirement of section 103 imposed on an accountant, actuary, or other person, the Secretary may assess all or part of the civil penalty against such person. The Secretary may require remediation in place of assessing all or part of a penalty.”.
(c)
Debarment for deficient audits or for failing To meet qualification standards—
(1)
In general— Part 5 of subtitle B of title I of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1131 et seq.) is amended by adding at the end the following:

“522. Debarment for deficient audits or for failing to meet qualification standards

“(a) In general—If the Secretary finds, after notice and opportunity for a hearing, that an accountant or accounting firm has engaged in any act or practice, or failed to act, in violation of section 103 relating to the preparation and issuance of audit reports, or with professional standards, the Secretary may issue an order to bar an accountant or accounting firm (or division or component of such firm), on a temporary or permanent basis, from directly or indirectly engaging in specified activities relating to performing or supervising plan audits required under section 103.

“(b) Hearings—The subject of a debarment order may request a hearing and file an answer not later than 30 days after the date of service of the notice of the debarment order, in accordance with regulations prescribed by the Secretary. Failure to request a hearing within such 30-day period shall constitute a waiver of the right to appear and contest the facts alleged in the debarment order and an admission of the facts alleged in the order for purposes of any related proceedings under this part. Such order shall then become a final agency action under section 704 of title 5, United States Code.

“(c) Modification or termination of orders—The Secretary may modify or terminate an order issued under this section, upon the request of the subject of the order and pursuant to procedures established by the Secretary, if the Secretary determines that such modification or termination is in the interest of plan participants and beneficiaries.

“(d) Publicity of orders—The Secretary shall make all final orders under this section (including modified orders) public and shall notify applicable State regulatory organizations upon the issuance of such final orders (including modified orders).

“(e) Jurisdiction—Lawsuits by the subject of an order to review the final order of the Secretary may be brought only in the district court of the United States for the district where the subject of the order has its principal office or in the United States District Court for the District of Columbia.

“(f) Regulations—The Secretary may promulgate such regulations or other guidance as may be necessary or appropriate to carry out this section.”

(2)
Clerical amendment— The table of sections for part 5 of subtitle B of title I of the Employee Retirement Income Security Act of 1974 is amended by adding at the end the following new item:
(d)
Exception—
(1)
In general— Section 103(a)(3)(C) of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1023(a)(3)(C)) is amended by striking “if such statements are certified by the bank, similar institution, or insurance carrier as accurate and are made part of the annual report.” and inserting “except to the extent required under regulations promulgated by the Secretary.”.
(2)
Effective date— The amendment made by paragraph (1) shall not become effective until the Secretary has promulgated final regulations with respect to such amendment.

Sec. 402 Special rules relating to treatment of qualified domestic relations orders

(a)
Preservation of Assets—
(1)
Amendments to ERISA— Section 206(d)(3) of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1056(d)(3)) is amended—
(A)
by redesignating subparagraph (N) as subparagraph (O); and
(B)
by inserting after subparagraph (M) the following:

“(N) Preservation of assets

“(i) In general—If a spouse or former spouse of a participant—

“(I) notifies a plan in writing that—

“(aa) an action is pending pursuant to a State domestic relations law (including a community property law), and

“(bb) all or a portion of the benefits payable with respect to the participant under the plan are a subject of such action, and

“(II) includes with the notice evidence of the pendency of the action,

“(ii) Segregation period

“(I) In general—For purposes of clause (i), the term segregation period means the period—

“(aa) beginning on the date of receipt by the plan of the notice under clause (i), and

“(bb) ending on the earlier of—

“(AA) 90 days after the date of receipt of such notice, or

“(BB) the date of receipt of a domestic relations order with respect to the participant and the prospective alternate payee or the date on which the action is no longer pending.

“(II) Extension of segregation period—The segregation period shall be extended for 1 or more additional periods described in subclause (I) upon notice by the spouse or former spouse that the action described in clause (i)(I)(aa) is still pending as of the close of any prior segregation period.”

(2)
Amendments to 1986 code— Section 414(p) of the Internal Revenue Code of 1986 is amended—
(A)
by redesignating paragraph (13) as paragraph (14); and
(B)
by inserting after paragraph (12) the following:

“(13) Preservation of assets

“(A) In general—If a spouse or former spouse of a participant—

“(i) notifies a plan in writing that—

“(I) an action is pending pursuant to a State domestic relations law (including a community property law), and

“(II) all or a portion of the benefits payable with respect to the participant under the plan are a subject of such action, and

“(ii) includes with the notice evidence of the pendency of the action,”

“(B) Segregation period

“(i) In general—For purposes of subparagraph (A), the term segregation period means the period—

“(I) beginning on the date of receipt by the plan of the notice under clause (i), and

“(II) ending on the earlier of—

“(aa) 90 days after the date of receipt of such notice, or

“(bb) the date of receipt of a domestic relations order with respect to the participant and the prospective alternate payee or the date on which the action is no longer pending.

“(ii) Extension of segregation period—The segregation period shall be extended for 1 or more additional periods described in clause (i) upon notice by the spouse or former spouse that the action described in subparagraph (A)(i)(I) is still pending as of the close of any prior segregation period.”

(b)
Penalty for failure To provide information regarding alternate payees—
(1)
In general— Section 502(c), as amended by section 312, of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1132(c)) is amended—
(A)
by redesignating paragraphs (8), (9), (10), (11), and (12) as paragraphs (9), (10), (11), (12), and (13) respectively; and
(B)
by inserting after paragraph (7) the following:

“(8) Failure to provide information regarding alternate payees—The plan administrator shall provide information regarding the benefit to prospective alternative payees under a domestic relations order under section 206(d)(3) or any representative of a prospective alternative payee in connection with such an order. The Secretary may assess a civil penalty against any plan administrator of up to $100 a day from the date of the plan administrator's failure or refusal to provide such information.”

(2)
Conforming amendment— Section 502(a)(6) of such Act (29 U.S.C. 1132(a)(6)), as so amended, is amended by striking “or (11)” and inserting “(11), or (12)”.
(c)
Effective date— The amendments made by this section shall apply to plan years beginning after December 31, 2014.

Sec. 403 Correction to bonding requirement

Section 412(a)(3)(D) of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1112(a)(3)(D)) is amended by striking “Paragraph (2)” and inserting “This paragraph”.

Sec. 404 Retaliation protections

Section 510 of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1140) is amended by inserting “, has filed or made any oral or written complaint (including to a fiduciary, an employer, or the Secretary),” after “given information”.