Lifetime Income For Employees Act
This bill allows fiduciaries of pension plans to make default investment arrangements in annuity contracts upon providing certain notice to plan participants or beneficiaries and complying with certain prohibitions on liquidity restrictions.
[Congressional Bills 117th Congress]
[From the U.S. Government Publishing Office]
[H.R. 6746 Introduced in House (IH)]
<DOC>
117th CONGRESS
2d Session
H. R. 6746
To amend the Employee Retirement Income Security Act of 1974 to permit
default investment arrangements in annuities, and for other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
February 15, 2022
Mr. Norcross (for himself and Mr. Walberg) introduced the following
bill; which was referred to the Committee on Education and Labor
_______________________________________________________________________
A BILL
To amend the Employee Retirement Income Security Act of 1974 to permit
default investment arrangements in annuities, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Lifetime Income For Employees Act''.
SEC. 2. DEFAULT INVESTMENT IN ANNUITY CONTRACTS.
(a) In General.--Section 404(c)(5) of the Employee Retirement
Income Security Act of 1974 (29 U.S.C. 1104(c)(5)) is amended--
(1) in subparagraph (A)--
(A) by inserting ``or subparagraph (C), as
appropriate,'' after ``subparagraph (B)''; and
(B) by inserting ``or in a covered annuity
contract.'' after ``by the Secretary''; and
(2) by adding at the end the following:
``(C) Covered annuity contract.--
``(i) In general.--For purposes of this
paragraph, the term `covered annuity contract'
means an investment in an annuity contract that
meets the following requirements:
``(I) The annuity contract does not
impose a liquidity restriction on the
transfer of invested amounts during the
180-day period beginning on the date of
the initial investment in such contract
by the participant or beneficiary.
``(II) The fiduciary ensures that
each participant or beneficiary is
provided notice in writing in
accordance with clause (ii).
``(III) The fiduciary allocates not
more than 50 percent of any periodic
contribution or, immediately after a
rebalancing of account investments, 50
percent of the value of the assets of
the account, to the annuity contract
(or, as applicable, to the portion
thereof to which a liquidity
restriction applies after the 180-day
period in subclause (I)).
``(ii) Notice requirement.--For the
purposes of this subparagraph, each participant
or beneficiary shall be provided notice in
writing in a manner that is reasonably designed
to be understood by the average plan
participant, as follows:
``(I) Not later than 30 days in
advance of the initial investment, a
notice that includes--
``(aa) an explanation of
the circumstances under which
assets in the account may be
invested on behalf of the
participant or beneficiary in
the annuity contract, including
an explanation of the targeted
range and maximum amount or
percentage of such assets to be
invested;
``(bb) an explanation of
the rights, and any limitations
or restrictions thereon, of a
participant or beneficiary to
direct or transfer amounts
invested, or to be invested, in
an annuity contract to other
investment alternatives
available under the plan;
``(cc) a general
description of the annuity
contract, including the
duration of guaranteed payments
and identification of the
insurer;
``(dd) an explanation of
how a participant or
beneficiary may obtain
additional information in
writing about their investment
alternatives; and
``(ee) a description of how
to obtain a copy of the annuity
contract.
``(II) Not later than 30 days
before the date of the imposition of a
liquidity restriction described in
subclause (i)(I), that includes--
``(aa) a statement
explaining that the
participant's or beneficiaries'
contributions will shortly
become subject to liquidity
restrictions;
``(bb) an explanation of
the rights of the participant
or beneficiary to direct or
transfer amounts to be invested
in alternatives under the plan;
and
``(cc) an explanation of
how a participant or
beneficiary may obtain
additional information about
their investment alternatives.
``(iii) Definition of annuity contract.--
For purposes of this subparagraph, the term
`annuity contract' means a contract (or
provision or feature thereof) that--
``(I) is issued by an insurer
qualified to do business in a State;
and
``(II) provides for the payment of
guaranteed benefits annually (or more
frequently) for a fixed term or for the
remainder of the life of the
participant or beneficiary or the joint
lives of the participant and the
participant's designated
beneficiary.''.
(b) Effective Date.--The amendments made by subsection (a) shall
apply with respect to investments made on or after the date of
enactment of this Act.
<all>
Introduced in House
Introduced in House
Referred to the House Committee on Education and Labor.
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