HR 2958 — Balance the Scales Act

changes in existing law made by 
the bill, as reported, are shown as follows (new matter is 
printed in italics and existing law in which no change is 
proposed is shown in roman):

 EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974

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 TITLE I--PROTECTION OF EMPLOYEE BENEFIT RIGHTS

 Subtitle A--General Provisions

 FINDINGS AND DECLARATION OF POLICY

 Sec. 2. (a) The Congress finds that the growth in size, 
scope, and numbers of employee benefit plans in recent years 
has been rapid and substantial; that the operational scope and 
economic impact of such plans is increasingly interstate; that 
the continued well-being and security of millions of employees 
and their dependents are directly affected by these plans; that 
they are affected with a national public interest; that they 
have become an important factor affecting the stability of 
employment and the successful development of industrial 
relations; that they have become an important factor in 
commerce because of the interstate character of their 
activities, and of the activities of their participants, and 
the employers, employee organizations, and other entities by 
which they are established or maintained; that a large volume 
of the activities of such plans is carried on by means of the 
mails and instrumentalities of interstate commerce; that owing 
to the lack of employee information and adequate safeguards 
concerning their operation, it is desirable in the interests of 
employees and their beneficiaries, and to provide for the 
general welfare and the free flow of commerce, that disclosure 
be made and safeguards be provided with respect to the 
establishment, operation, and administration of such plans; 
that they substantially affect the revenues of the United 
States because they are afforded preferential Federal tax 
treatment; that despite the enormous growth in such plans many 
employees with long years of employment are losing anticipated 
retirement benefits owing to the lack of vesting provisions in 
such plans; that owing to the inadequacy of current minimum 
standards, the soundness and stability of plans with respect to 
adequate funds to pay promised benefits may be endangered; that 
owing to the termination of plans before requisite funds have 
been accumulated, employees and their beneficiaries have been 
deprived of anticipated benefits; and that it is therefore 
desirable in the interests of employees and their 
beneficiaries, for the protection of the revenue of the United 
States, and to provide for the free flow of commerce, that 
minimum standards be provided assuring the equitable character 
of such plans and their financial soundness.
 (b) It is hereby declared to be the policy of this Act to 
protect interstate commerce and the interests of participants 
in employee benefit plans and their beneficiaries, by requiring 
the disclosure and reporting to participants and beneficiaries 
of financial and other information with respect thereto, by 
establishing standards of conduct, responsibility, and 
obligation for fiduciaries of employee benefit plans, and by 
providing for appropriate remedies, sanctions, and ready access 
to the Federal courts.
 (c) It is hereby further declared to be the policy of this 
Act to protect interstate commerce, the Federal taxing power, 
and the interests of participants in private pension plans and 
their beneficiaries by improving the equitable character and 
the soundness of such plans by requiring them to vest the 
accrued benefits of employees with significant periods of 
service, to meet minimum standards of funding, and by requiring 
plan termination insurance.
 (d) Congress finds that the retirement security of millions 
of employees and their dependents is directly impacted by the 
voluntary sponsorship and maintenance of pension plans. It is 
hereby declared to be a policy of this Act to promote, 
encourage, and facilitate the voluntary establishment and 
maintenance of, and contribution to, such plans.

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Subtitle B--Regulatory Provisions

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Part 5--Administration and Enforcement

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 INVESTIGATIVE AUTHORITY

 Sec. 504. (a) The Secretary shall have the power, in order to 
determine whether any person has violated or is about to 
violate any provision of this title or any regulation or order 
thereunder--
 (1) to make an investigation, and in connection 
 therewith to require the submission of reports, books, 
 and records, and the filing of data in support of any 
 information required to be filed with the Secretary 
 under this title, and
 (2) to enter such places, inspect such books and 
 records and question such persons as he may deem 
 necessary to enable him to determine the facts relative 
 to such investigation, if he has reasonable cause to 
 believe there may exist a violation of this title or 
 any rule or regulation issued thereunder or if the 
 entry is pursuant to an agreement with the plan.
The Secretary may make available to any person actually 
affected by any matter which is the subject of an investigation 
under this section, and to any department or agency of the 
United States, information concerning any matter which may be 
the subject of such investigation; except that any information 
obtained by the Secretary pursuant to section 6103(g) of the 
Internal Revenue Code of 1986 shall be made available only in 
accordance with regulations prescribed by the Secretary of the 
Treasury.
 (b) The Secretary may not under the authority of this section 
require any plan to submit to the Secretary any books or 
records of the plan more than once in any 12 month period, 
unless the Secretary has reasonable cause to believe there may 
exist a violation of this title or any regulation or order 
thereunder.
 (c) For the purposes of any investigation provided for in 
this title, the provisions of sections 9 and 10 (relating to 
the attendance of witnesses and the production of books, 
records, and documents) of the Federal Trade Commission Act (15 
U.S.C. 49, 50) are hereby made applicable (without regard to 
any limitation in such sections respecting persons, 
partnerships, banks, or common carriers) to the jurisdiction, 
powers, and duties of the Secretary or any officers designated 
by him. To the extent he considers appropriate, the Secretary 
may delegate his investigative functions under this section 
with respect to insured banks acting as fiduciaries of employee 
benefit plans to the appropriate Federal banking agency (as 
defined in section 3(q) of the Federal Deposit Insurance Act 
(12 U.S.C. 1813(q)).
 (d) The Secretary may promulgate a regulation that provides 
an evidentiary privilege for, and provides for the 
confidentiality of communications between or among, any of the 
following entities or their agents, consultants, or employees:
 (1) A State insurance department.
 (2) A State attorney general.
 (3) The National Association of Insurance 
 Commissioners.
 (4) The Department of Labor.
 (5) The Department of the Treasury.
 (6) The Department of Justice.
 (7) The Department of Health and Human Services.
 (8) Any other Federal or State authority that the 
 Secretary determines is appropriate for the purposes of 
 enforcing the provisions of this title.
 (e) The privilege established under subsection (d) shall 
apply to communications related to any investigation, audit, 
examination, or inquiry conducted or coordinated by any of the 
agencies. A communication that is privileged under subsection 
(d) shall not waive any privilege otherwise available to the 
communicating agency or to any person who provided the 
information that is communicated.
 (f) Collaboration With Plaintiff Attorneys.--
 (1) In general.--In the event that the Secretary 
 provides adverse assistance to an individual, prior to 
 providing the adverse assistance, the Secretary shall--
 (A) enter into a written agreement with the 
 individual that details the nature and scope of 
 such assistance, and
 (B) provide a copy of such agreement to any 
 employer, plan sponsor, or fiduciary that may 
 be directly and adversely impacted by such 
 assistance.
 (2) Adverse assistance defined.--For purposes of this 
 subsection, the term ``adverse assistance'' means 
 assistance or advice, including the disclosure of 
 information as described in subsection (a), that is 
 directed specifically toward an attorney for potential 
 use in a civil action under section 502(a).
 (3) Report.--
 (A) In general.--Not later than 60 days after 
 the date of enactment of this subsection, and 
 by December 31 of each year that begins after 
 such date, the Secretary shall submit to 
 Congress a report containing information on all 
 agreements to provide adverse assistance in 
 effect for the preceding fiscal year, 
 including, in relation to each such agreement--
 (i) a copy of the agreement, with any 
 information described in subparagraph 
 (B)(ii) redacted;
 (ii) the date the agreement was 
 entered into;
 (iii) a detailed description of the 
 nature and scope of the assistance 
 provided during the fiscal year, 
 including--
 (I) the information shared, 
 including the source, type, and 
 amount of the information, and 
 the date on which such 
 information was shared;
 (II) a log of verbal 
 communications, including--
 (aa) the date of each 
 communication;
 (bb) the parties 
 engaged in such 
 communication;
 (cc) the mode of 
 communication; and
 (dd) the nature of 
 any information shared; 
 and
 (III) a log of meetings, 
 including--
 (aa) the date of each 
 meeting;
 (bb) the parties 
 present at the meeting;
 (cc) mode of the 
 meeting; and
 (dd) the purpose of 
 such meeting and the 
 nature of any 
 information shared; and
 (iv) an explanation of how such 
 agreement is consistent with the public 
 policy of promoting the voluntary 
 sponsorship of employee benefit plans 
 subject to this Act.
 (B) Identifying information.--The report 
 described under subparagraph (A)--
 (i) shall identify the parties to 
 each agreement; and
 (ii) may not include any information 
 that may be used to identify any other 
 person (including an employer, plan 
 sponsor, plan fiduciary, service 
 provider, or any other potential 
 defendant).

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