text: SECTION 1. SHORT TITLE.
  
      This Act may be cited as the ``Pension Plan Participant Protection 
  Act of 1998''.
  
  SEC. 2. DUTIES OF THE PENSION BENEFIT GUARANTY CORPORATION WHILE 
                SERVING AS TRUSTEE OF TERMINATED PLAN.
  
      (a) In General.--Section 4042(d)(3) of the Employee Retirement 
  Income Security Act of 1974 (29 U.S.C. 1342(d)(3)) is amended--
              (1) by inserting ``(A)'' after ``(3)''; and
              (2) by adding at the end the following new subparagraphs:
      ``(B) The corporation is subject to the same requirements of 
  reporting and disclosure in connection with a pension plan for which 
  the corporation is serving as trustee pursuant to this section as those 
  of any plan administrator of an employee pension benefit plan under 
  part 1 of subtitle B of title I.
      ``(C) The corporation is subject to the same fiduciary duties in 
  connection with a pension plan for which the corporation is serving as 
  trustee pursuant to this section, including the determination and 
  payment of plan benefits, as those of any fiduciary of an employee 
  pension benefit plan under part 1 of subtitle B of title I. The 
  corporation shall maintain such separate books and records and retain 
  such separate counsel on its behalf as may be necessary for carrying 
  out such duties.
      ``(D) For purposes of applying part 5 of subtitle B of title I in 
  the enforcement of subparagraphs (B) and (C)--
              ``(i) any civil monetary penalty which may be assessed by 
          the Secretary of Labor against the corporation under any 
          provision of section 502(c) shall be assessed in the full 
          amount specified in such provision,
              ``(ii) a civil action against the corporation as fiduciary 
          under section 502(a)(2) for relief under section 409 may be 
          brought by any affected party, and, in any such action by an 
          affected party in which the corporation is removed as trustee, 
          the replacement trustee shall be selected by the court from any 
          list of qualified candidates which may be provided by such 
          affected party, and
              ``(iii) any review under section 502 by a district court of 
          the United States of a benefit determination by the corporation 
          shall be de novo.
      ``(E) In any case in which the corporation serves as trustee for a 
  terminated pension plan pursuant to this section, the corporation shall 
  issue its final determination regarding any benefit payable under the 
  plan not later than one year after the date of the corporation's 
  appointment as trustee. Any failure by the corporation to comply with 
  the requirements of this subparagraph shall be deemed an action of the 
  corporation upon which a cause of action may be brought against the 
  corporation under section 4003(f)(1).''.
      (b) Conforming Amendment.--Section 4023 of such Act (29 U.S.C. 
  1323) is amended--
              (1) by inserting ``(a)'' after ``Sec. 4023.''; and
              (2) by adding at the end the following new subsection:
      ``(b) Subsection (a) shall not apply with respect to the 
  corporation while the corporation is serving in its fiduciary capacity 
  in accordance with section 4042(d)(3)(B).''.
  
  SEC. 3. PARTICIPANTS' COMMITTEES.
  
      (a) In General.--Subtitle C of title IV of the Employee Retirement 
  Income Security Act of 1974 is amended by inserting after section 4048 
  (29 U.S.C. 1348) the following new section:
  
                         ``participants' committees
  
      ``Sec. 4049. (a) In General.--
              ``(1) Appointment of committee.--Except as provided in 
          paragraph (3), as soon as practicable after the appointment of 
          a trustee under section 4042, the trustee shall appoint a 
          committee of participants under the plan.
              ``(2) Requests for adequate representation.--On request of 
          an affected party, the court may order the appointment of 
  additional committees of participants if necessary to assure adequate 
  representation of participants. The trustee shall appoint any such 
  committee.
              ``(3) Small businesses.--On request of an affected party in 
          a case in which the plan sponsor is a small business and for 
          cause, the court may order that a committee of participants not 
          be appointed.
      ``(b) Membership.--A committee of participants appointed under 
  subsection (a) shall ordinarily consist of the persons, willing to 
  serve, that were in pay status under the plan as of the date of the 
  termination of the plan and have the seven largest nonforfeitable 
  benefits under the plan, or of the members of a committee organized by 
  participants before such date, if such committee was fairly chosen and 
  is representative of the participants of the plan.
      ``(c) Powers and Duties of Committees.--
              ``(1) Appointment of attorneys, accountants, etc.--At a 
          scheduled meeting of a committee appointed under subsection 
          (a), at which a majority of the members of such committee are 
          present, and with the court's approval, such committee may 
          select and authorize the employment by such committee of one or 
  more attorneys, accountants, or other agents to represent or perform 
  services for such committee.
              ``(2) Preclusion of conflicts of interest.--An attorney or 
          accountant employed to represent a committee appointed under 
          subsection (a) may not, while employed by such committee, 
          represent any other entity having an adverse interest in 
          connection with the case. Representation of one or more 
          participants of the same class as represented by the committee 
          shall not per se constitute the representation of an adverse 
          interest.
              ``(3) Specific powers.--A committee appointed under 
          subsection (a) may--
                      ``(A) consult with the trustee concerning the 
                  administration of the case,
                      ``(B) investigate the acts, conduct, assets, 
                  liabilities, and financial condition of the plan, the 
                  operation of the plan sponsor's financial operations, 
                  and the desirability of the continuance of the plan, 
                  and any other matter relevant to the case,
                      ``(C) participate in the formulation of the plan 
                  for distribution of plan assets, advise those 
                  represented by such committee of such committee's 
                  determinations as to any plan for distribution of the 
                  plan's assets, and collect and file with the court 
                  acceptances or rejections of the plan for distribution 
                  of plan assets,
                      ``(D) request the court for the appointment of the 
                  committee or any other person as an alternative 
                  trustee, and
                      ``(E) perform such other services as are in the 
                  interest of plan participants and beneficiaries.
              ``(4) Meeting with trustee.--As soon as practicable after 
          the appointment of a committee under subsection (a), the 
          trustee shall meet with such committee to transact such 
          business as may be necessary and proper.''.
      (b) Conforming Amendment.--The table of contents in section 1 of 
  such Act is amended by inserting after the item relating to section 
  4048 the following new item:
  
  ``Sec. 4049. Participants' committees.''.
  
  SEC. 4. TRUSTEESHIP OF TERMINATED PLANS.
  
      (a) In General.--Section 4042(c) of the Employee Retirement Income 
  Security Act of 1974 (29 U.S.C. 1342(c)) is amended--
              (1) by inserting ``(1)'' after ``(c)''; and
              (2) by inserting before paragraph (3) the following new 
          paragraph:
      ``(2) The court may appoint the corporation, a participants' 
  committee, or any other person to serve as trustee under paragraph (1). 
  Upon the application of any two or more of the foregoing to serve as 
  trustee, the determination of the court of which to appoint shall be 
  based on its determination of which applicant is most qualified to 
  carry out the fiduciary duties of the trustee with respect to 
  participants and beneficiaries without conflicts of interest.''.
      (b) Payment or Reimbursement of Reasonable Fees and Expenses.--
  Section 4042(h) of such Act (29 U.S.C. 1342(h)) is amended by adding at 
  the end the following new paragraph:
      ``(3) The reasonable fees and expenses of a trustee appointed under 
  this section (other than the corporation), of any participants' 
  committee, and of any counsel, accountants, actuaries, and other 
  professional service personnel shall be paid, directly or by means of 
  reimbursement, from the assets of the terminated plan.''.
  
  SEC. 5. PARTICIPANT'S ADVOCATE.
  
      (a) In General.--Subtitle D of title IV of the Employee Retirement 
  Income Security Act of 1974 is amended by adding after section 4071 (29 
  U.S.C. 1371) the following new section:
  
                     ``office of participant's advocate
  
      ``(a) In General.--The Secretary of Labor shall establish in the 
  Department of Labor an Office of Participant's Advocate, to be headed 
  by a Participant's Advocate.
      ``(b) Functions.--The Participant's Advocate shall, upon request of 
  participants of terminated pension plans--
              ``(1) counsel participants and beneficiaries of such plans 
          in connection with their rights to benefits thereunder, and
              ``(2) provide legal representation before the corporation 
          and in court to such participants who have been denied benefits 
          by the corporation.
      ``(c) Fees.--The Office shall require only such fees for its 
  services as may be prescribed in regulations of the Secretary of Labor.
      ``(d) Staff.--The Participant's Advocate shall appoint such 
  attorneys, actuaries, and accountants as may be necessary to assist the 
  Participant's Advocate in carrying out the functions of the Office, and 
  may appoint such additional personnel as may be necessary to provide 
  adequate support for the Office.
      ``(e) Notice.--Each notice of a benefit determination issued by the 
  corporation to a participant or beneficiary under a terminated pension 
  plan shall include a notice (in such form as shall be prescribed in 
  regulations of the Secretary of Labor) describing the services of the 
  Participant's Advocate's Office.''.
      (b) Conforming Amendment.--The table of contents in section 1 of 
  such Act is amended by inserting after the item relating to section 
  4071 the following new item:
  
  ``Sec. 4071. Office of Participant's Advocate.''.
      (c) Effective Date.--The Secretary of Labor shall establish the 
  Office of Participant's Advocate pursuant to the amendments made by 
  this section not later than one year after the date of the enactment of 
  this Act.
  
  SEC. 6. RULES GOVERNING TRUSTEESHIP BY THE CORPORATION.
  
      (a) In General.--Section 4042 of the Employee Retirement Income 
  Security Act of 1974 (29 U.S.C. 1342) is amended by adding at the end 
  the following new subsection:
      ``(i) In any case in which the corporation serves as trustee of a 
  terminated pension plan under this section--
              ``(1) the corporation shall segregate assets of the 
          terminated plan from the assets of any other plan or any other 
          assets held by the corporation,
              ``(2) the corporation may not use any assets of the plan 
          for any purpose other than payment of benefits or reasonable 
          administrative expenses directly attributable to the 
          termination and administration of the plan, excluding any 
          generally applicable overhead expenses of the corporation, and
              ``(3) the corporation shall obtain the services of 
          independent contractors in connection with the termination or 
          administration of the plan only through a competitive bidding 
          process.''.
  
  SEC. 7. EFFECTIVE DATE.
  
      The amendments made by this Act shall apply with respect to plan 
  terminations--
              (1) the termination date for which occurs on or after 
          January 1, 1990, and
              (2) for which the final distribution of assets occurs on or 
          after the date of the enactment of this Act.
target: Pension Plan Participant Protection Act of 1998 - Amends the Employee Retirement Income Security Act of 1974 to set forth certain protections for participants and beneficiaries of terminated pension plans. 
  (Sec. 2) Subjects the Pension Benefit Guaranty Corporation (PBGC) to specified fiduciary duties and to reporting, disclosure, and other requirements while it serves as trustee of a terminated pension plan. 
  Provides for assessment of civil penalties against the PBGC for violation of such requirements and duties. 
  Allows any affected party to bring a civil action for relief against the PBGC as fiduciary.  Requires the court, in any such action in which the PBGC is removed as trustee, to select the replacement trustee from a list of qualified candidates provided by the affected party. 
  Requires the PBGC to issue its final determination regarding any benefit payable under a terminated pension plan within one year after the date of its appointment as plan trustee.  Requires any review of such a PBGC benefit determination by a Federal district court to be de novo. 
  (Sec. 3) Requires the plan trustee to appoint a committee of participants.  Authorizes the court, on request of an affected party, to order:  (1) the trustee to appoint additional participants' committees if necessary to assure adequate representation; and (2) that a committee of participants not be appointed in a case in which the plan sponsor is a small business. 
  (Sec. 4) Authorizes the appropriate Federal district court to appoint as the trustee of a terminated pension plan the PBGC, a participants' committee, or any other person.  Requires the court, if two or more entities apply to serve as trustee, to base the appointment on its determination of which applicant is most qualified to carry out the fiduciary duties of the trustee without conflicts of interest.  Requires payment or reimbursement of reasonable fees or expenses of any trustee other than the PBGC. 
  (Sec. 5) Directs the Secretary of Labor to establish in the Department of Labor an Office of Participant's Advocate, headed by a Participant's Advocate, which shall:  (1) counsel participants and beneficiaries in connection with their benefits rights; and (2) provide legal representation before the PBGC and in court to participants denied benefits by the PBGC. 
  (Sec. 6) Requires the PBGC, as a trustee of a terminated plan, to: (1) segregate the plan's assets from those of any other plan or any other assets held by the PBGC; (2) use the plan's assets only for payment of benefits or reasonable administrative expenses directly attributable to the plan's termination and administration (excluding any generally applicable overhead expenses of the PBGC); and (3) obtain the services of independent contractors in connection with the termination or administration of the plan only through a competitive bidding process.
feat_title: Pension Plan Participant Protection Act of 1998