I 

114TH CONGRESS 

1ST SESSION H. R. 4294 

To amend the Internal Revenue Code of 1986 to ensure that retirement 

investors receive advice in their best interests, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

DECEMBER 18, 2015 

Mr. ROSKAM (for himself, Mr. NEAL, Mr. ROE of Tennessee, Mr. LARSON of 

Connecticut, Mr. REED, and Ms. MICHELLE LUJAN GRISHAM of New 

Mexico) introduced the following bill; which was referred to the Committee on Ways and Means, and in addition to the Committee on Education and the Workforce, for a period to be subsequently determined by 

the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned 

A BILL 

To amend the Internal Revenue Code of 1986 to ensure 

that retirement investors receive advice in their best interests, and for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Strengthening Access 

5 to Valuable Education and Retirement Support Act of 

6 2015’’ or the ‘‘SAVERS Act of 2015’’. 


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1 SEC. 2. PURPOSE. 

2 The purpose of this Act is to provide that advisors 

3 who— 

4 (1) provide advice that is impermissible under 

5 the prohibited transaction provisions under section 

6 4975 of the Internal Revenue Code of 1986, or 

7 (2) breach the best interest standard for the 

8 provision of investment advice, 

9 are subject to liability under the Internal Revenue Code 

10 of 1986. 

11 SEC. 3. RULES RELATING TO THE PROVISION OF INVEST12 MENT ADVICE. 

13 (a) AMENDMENTS TO THE INTERNAL REVENUE

14 CODE OF 1986.— 

15 (1) EXEMPTION FOR INVESTMENT ADVICE

16 WHICH IS BEST INTEREST RECOMMENDATION.—Sec17 tion 4975(d) of the Internal Revenue Code of 1986 

18 is amended by striking ‘‘or’’ at the end of paragraph 

19 (22), by striking the period at the end of paragraph 

20 (23) and inserting ‘‘, or’’, and by inserting after 

21 paragraph (23) the following: 

22 ‘‘(24) provision of investment advice by a fidu23 ciary to a plan, plan participant, or beneficiary with 

24 respect to the plan, which is a best interest rec25 ommendation.’’. 


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1 (2) INVESTMENT ADVICE; BEST INTEREST REC2 OMMENDATION.—Section 4975(e) of such Code is 

3 amended by adding at the end the following: 

4 ‘‘(10) INVESTMENT ADVICE.— 

5 ‘‘(A) IN GENERAL.—For purposes of this 

6 section, the term ‘investment advice’ means a 

7 recommendation that— 

8 ‘‘(i) relates to— 

9 ‘‘(I) the advisability of acquiring, 

10 holding, disposing, or exchanging any 

11 moneys or other property of a plan by 

12 the plan, plan participants, or plan 

13 beneficiaries, including any rec14 ommendation whether to take a dis15 tribution of benefits from such plan or 

16 any recommendation relating to the 

17 investment of any moneys or other 

18 property of such plan to be rolled over 

19 or otherwise distributed from such 

20 plan; 

21 ‘‘(II) the management of moneys 

22 or other property of such plan, includ23 ing recommendations relating to the 

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1 erty to be rolled over or otherwise dis2 tributed from such plan; or 

3 ‘‘(III) the advisability of retain4 ing or ceasing to retain a person who 

5 would receive a fee or other com6 pensation for providing any of the 

7 types of advice described in this sub8 clause; and 

9 ‘‘(ii) is rendered pursuant to— 

10 ‘‘(I) a written acknowledgment 

11 that the person is a fiduciary with re12 spect to the provision of such rec13 ommendation; or 

14 ‘‘(II) a mutual agreement, ar15 rangement, or understanding which 

16 may include limitations on scope, tim17 ing, and responsibility to provide on18 going monitoring or advice services, 

19 between the person making such rec20 ommendation and the plan, plan par21 ticipant, or beneficiary that such rec22 ommendation is individualized to the 

23 plan, plan participant, or beneficiary 

24 and such plan, plan participant, or 

25 beneficiary intends to materially rely 


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1 on such recommendation in making 

2 investment or management decisions 

3 with respect to any moneys or other 

4 property of such plan. 

5 ‘‘(B) DISCLAIMER OF A MUTUAL AGREE6 MENT, ARRANGEMENT, OR UNDERSTANDING.— 

7 For purposes of subparagraph (A)(ii)(II), any 

8 disclaimer of a mutual agreement, arrangement, 

9 or understanding shall only state the following: 

10 ‘This information is not individualized to you, 

11 and there is no intent for you to materially rely 

12 on this information in making investment or 

13 management decisions.’. Such disclaimer shall 

14 not be effective unless such disclaimer is in 

15 writing and is communicated in a clear and 

16 prominent manner and an objective person 

17 would reasonably conclude that, based on all 

18 the facts and circumstances, there was not a 

19 mutual agreement, arrangement, or under20 standing. 

21 ‘‘(C) WHEN RECOMMENDATION TREATED

22 AS MADE PURSUANT TO A MUTUAL AGREE23 MENT, ARRANGEMENT, OR UNDERSTANDING.— 

24 For purposes of subparagraph (A)(ii)(II), infor25 mation shall not be treated as a recommendaVerDate Sep 11 2014 03:59 Dec 24, 2015 Jkt 059200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H4294.IH H4294

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1 tion made pursuant to a mutual agreement, ar2 rangement, or understanding, and such infor3 mation shall contain the disclaimer required by 

4 subparagraph (B), if— 

5 ‘‘(i) SELLER’S EXCEPTION.—The in6 formation is provided in conjunction with 

7 full and fair disclosure in writing to a plan, 

8 plan participant, or beneficiary that the 

9 person providing the information is doing 

10 so in its marketing or sales capacity, in11 cluding any information regarding the 

12 terms and conditions of the engagement of 

13 the person providing the information, and 

14 that the person is not intending to provide 

15 investment advice within the meaning of 

16 this subparagraph or to otherwise act as a 

17 fiduciary to the plan or under the obliga18 tions of a best interest recommendation. 

19 ‘‘(ii) SWAP AND SECURITY-BASED

20 SWAP TRANSACTION.—The person pro21 viding the information is a counterparty or 

22 service provider to the plan in connection 

23 with any transaction based on the informa24 tion (including a service arrangement, sale, 

25 purchase, loan, bilateral contract, swap (as 


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1 defined in section 1a of the Commodity 

2 Exchange Act (7 U.S.C. 1a)), or security3 based swap (as defined in section 3(a) of 

4 the Securities Exchange Act (15 U.S.C. 

5 78c(a)))), but only if— 

6 ‘‘(I) the plan is represented, in 

7 connection with such transaction, by a 

8 plan fiduciary who is independent of 

9 the person providing the information, 

10 and, except in the case of a swap or 

11 security-based swap, independent of 

12 the plan sponsor; and 

13 ‘‘(II) prior to entering into such 

14 transaction, the independent plan fi15 duciary represents in writing to the 

16 person providing the information that 

17 it is aware that the person has a fi18 nancial interest in the transaction and 

19 that it has determined that the person 

20 is not intending to provide investment 

21 advice within the meaning of this sub22 paragraph or to otherwise act as a fi23 duciary to the plan, plan participants, 

24 or plan beneficiaries. 


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1 ‘‘(iii) EMPLOYEES OF A PLAN SPON2 SOR.—The person providing the informa3 tion is an employee of any sponsoring em4 ployer or employee organization who pro5 vides the information to the plan for no fee 

6 or other compensation other than the em7 ployee’s normal compensation. 

8 ‘‘(iv) PLATFORM PROVIDERS SELEC9 TION AND MONITORING ASSISTANCE.—The 

10 person providing the information discloses 

11 in writing to the plan fiduciary that the 

12 person is not undertaking to provide in13 vestment advice as a fiduciary (within the 

14 meaning of this paragraph) or under the 

15 obligations of a best interest recommenda16 tion and the information consists solely 

17 of— 

18 ‘‘(I) making available to the plan, 

19 plan participants, or plan bene20 ficiaries, without regard to the indi21 vidualized needs of the plan, plan par22 ticipants, or plan beneficiaries, securi23 ties or other property through a plat24 form or similar mechanism from 

25 which a plan fiduciary may select or 


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1 monitor investment alternatives, in2 cluding qualified default investment 

3 alternatives, into which plan partici4 pants or beneficiaries may direct the 

5 investment of assets held in, or con6 tributed to, their individual accounts, 

7 or 

8 ‘‘(II) in connection with a plat9 form or similar mechanism described 

10 in subclause (I)— 

11 ‘‘(aa) identifying investment 

12 alternatives that meet objective 

13 criteria specified by the plan, 

14 such as criteria concerning ex15 pense ratios, fund sizes, types of 

16 asset, or credit quality, or 

17 ‘‘(bb) providing objective fi18 nancial data and comparisons 

19 with independent benchmarks to 

20 the plan. 

21 ‘‘(v) VALUATION.—The information 

22 consists solely of valuation information. 

23 ‘‘(vi) FINANCIAL EDUCATION.—The 

24 information consists solely of— 


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1 ‘‘(I) information described in De2 partment of Labor Interpretive Bul3 letin 96–1 (29 C.F.R. 2509.96–1, as 

4 in effect on January 1, 2015), regard5 less of whether such education is pro6 vided to a plan or plan fiduciary or a 

7 participant or beneficiary, 

8 ‘‘(II) information provided to 

9 participants or beneficiaries regarding 

10 the factors to consider in deciding 

11 whether to elect to receive a distribu12 tion from a plan and whether to roll 

13 over such distribution to a plan, so 

14 long as any examples of different dis15 tribution and rollover alternatives are 

16 accompanied by all material facts and 

17 assumptions on which the examples 

18 are based, or 

19 ‘‘(III) any additional information 

20 treated as education by the Secretary. 

21 ‘‘(11) BEST INTEREST RECOMMENDATION.— 

22 For purposes of this subsection— 

23 ‘‘(A) IN GENERAL.—The term ‘best inter24 est recommendation’ means a recommenda25 tion— 


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1 ‘‘(i) for which no more than reason2 able compensation is paid (as determined 

3 under subsection (d)(2)), 

4 ‘‘(ii) provided by a person acting with 

5 the care, skill, prudence, and diligence 

6 under the circumstances then prevailing 

7 that a prudent person would exercise based 

8 on— 

9 ‘‘(I) the information obtained 

10 through the reasonable diligence of 

11 the person regarding factors such as 

12 the advice recipient’s age, and 

13 ‘‘(II) any other information that 

14 the advice recipient discloses to the 

15 person in connection with receiving 

16 such recommendation, and 

17 ‘‘(iii) where the person places the in18 terests of the plan or advice recipient 

19 above its own. 

20 ‘‘(B) INVESTMENT OPTIONS; VARIABLE

21 COMPENSATION.—A best interest recommenda22 tion may include a recommendation that— 

23 ‘‘(i) is based on a limited range of in24 vestment options (which may consist, in 

25 whole or in part, of proprietary products), 


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1 but only if any such limitations, including 

2 a clearly-stated notice that the same or 

3 similar investments may be available at a 

4 different cost (greater or lesser) from other 

5 sources, are clearly disclosed to the advice 

6 recipient prior to any transaction based on 

7 the recommendation, or 

8 ‘‘(ii) may result in variable compensa9 tion to the person providing the rec10 ommendation (or any affiliate of such per11 son), but only if the receipt of such com12 pensation, including a clearly-stated notice 

13 that the same or similar investments may 

14 be available at a different cost (greater or 

15 lesser) from other sources, is clearly dis16 closed to the advice recipient prior to any 

17 transaction based on the recommendation. 

18 The notices provided pursuant to clauses (i) 

19 and (ii) shall only state the following: ‘The 

20 same or similar investments may be available at 

21 a different cost (greater or lesser) from other 

22 sources.’. 

23 ‘‘(C) CLEAR DISCLOSURE OF VARIABLE

24 COMPENSATION.—For purposes of subpara25 graph (B)(ii), variable compensation is clearly 


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1 disclosed if notification is provided at any time 

2 prior to a transaction based on the person’s rec3 ommendation, in a manner calculated to be un4 derstood by the average individual, of the fol5 lowing: 

6 ‘‘(i) A notice in writing, including a 

7 clearly-stated notice that the same or simi8 lar investments may be available at a dif9 ferent cost (greater or lesser) from other 

10 sources, that the person providing the rec11 ommendation (or its affiliate) may receive 

12 varying amounts of fees or other com13 pensation with respect to such transaction. 

14 ‘‘(ii) A description of any fee or other 

15 compensation that is directly payable to 

16 the person (or its affiliate) from the advice 

17 recipient with respect to such transaction 

18 (expressed as an amount, formula, percent19 age of assets, per capita charge, or esti20 mate or range of such compensation). 

21 ‘‘(iii) A description of the types and 

22 ranges of any indirect compensation that 

23 may be paid to the person (or its affiliate) 

24 by any third party in connection with such 

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1 mula, percentage of assets, per capita 

2 charge, or estimate of such ranges of com3 pensation). 

4 ‘‘(iv) Upon request of the advice re5 cipient, a disclosure of the specific 

6 amounts of compensation described in 

7 clause (iii) that the person will receive in 

8 connection with the particular transaction 

9 (expressed as an amount, formula, percent10 age of assets, per capita charge, or esti11 mate of such compensation). 

12 ‘‘(D) DEFINITION OF AFFILIATE.—For 

13 purposes of this paragraph, the term ‘affiliate’ 

14 has the meaning given in subsection 

15 (f)(8)(J)(ii). 

16 ‘‘(E) CORRECTION OF CERTAIN ERRORS

17 AND OMISSIONS.—A recommendation shall not 

18 fail to be a best interest recommendation solely 

19 because a person who, acting in good faith and 

20 with reasonable diligence, makes an error or 

21 omission in disclosing the information specified 

22 in subparagraph (B), if the person discloses the 

23 correct information to the advice recipient as 

24 soon as practicable but not later than 30 days 


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1 from the date on which the person knows of 

2 such error or omission.’’. 

3 (3) FAILURES RELATING TO BEST INTEREST

4 RECOMMENDATION.— 

5 (A) CORRECTION.—Section 4975(f)(5) of 

6 such Code is amended— 

7 (i) by striking ‘‘(5) CORRECTION.— 

8 The terms’’ and inserting: 

9 ‘‘(5) CORRECTION.— 

10 ‘‘(A) IN GENERAL.—Except as provided in 

11 subparagraph (B), the terms’’, and 

12 (ii) by adding at the end the fol13 lowing: 

14 ‘‘(B) DETERMINATION OF ‘CORRECTION’ 

15 AND ‘CORRECT’ WITH RESPECT TO BEST INTER16 EST ADVICE RECOMMENDATIONS.—In the case 

17 of a prohibited advice transaction arising by the 

18 failure of investment advice to be a best interest 

19 recommendation, the terms ‘correction’ and 

20 ‘correct’ mean the payment to, or reimburse21 ment of, actual damages of the plan, plan par22 ticipants, or plan beneficiaries resulting directly 

23 from the plan’s, plan participant’s, or plan 

24 beneficiary’s reliance on such investment advice, 

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1 imbursed to the plan, plan participants, or plan 

2 beneficiaries, including payments and reim3 bursements made pursuant to subparagraph 

4 (A).’’. 

5 (B) AMOUNT INVOLVED FOR PURPOSES OF

6 EXCISE TAX.—The first sentence of section 

7 4975(f)(4) of such Code is amended by striking 

8 ‘‘excess compensation.’’ and inserting ‘‘excess 

9 compensation, and in the case of a prohibited 

10 transaction arising by the failure of investment 

11 advice to be a best interest recommendation, 

12 the amount involved shall be the amount paid 

13 to the person providing the advice (or its affil14 iate, as defined in paragraph (8)(J)(ii)) that 

15 has not been paid or reimbursed to the plan, 

16 plan participants, or plan beneficiaries, includ17 ing payments and reimbursements made pursu18 ant to paragraph (5).’’. 

19 (4) EXEMPTION RELATING TO INVESTMENT AD20 VICE WITH RESPECT TO CERTAIN FEE ARRANGE21 MENTS.—Section 4975(d) of such Code (as amended 

22 by paragraph (1)) is amended by striking ‘‘or’’ at 

23 the end of paragraph (23), by striking the period at 

24 the end of paragraph (24) and inserting ‘‘, or’’, and 

25 by adding after paragraph (24) the following: 


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1 ‘‘(25) any transaction, including a contract for 

2 service, between a person providing investment ad3 vice described in subsection (e)(3)(B) and the advice 

4 recipient in connection with such investment advice, 

5 if— 

6 ‘‘(A) no more than reasonable compensa7 tion is paid (as determined under section 

8 4975(d)(2)) for such investment advice, 

9 ‘‘(B) in a case in which the investment ad10 vice is based on a limited range of investment 

11 options (which may consist, in whole or in part, 

12 of proprietary products), such limitations, in13 cluding a clearly-stated notice that the same or 

14 similar investments may be available at a dif15 ferent cost (greater or lesser) from other 

16 sources), shall be clearly disclosed to the advice 

17 recipient prior to any transaction based on the 

18 investment advice, 

19 ‘‘(C) in a case in which the investment ad20 vice may result in variable compensation to the 

21 person providing the investment advice (or any 

22 affiliate of such person), the receipt of such 

23 compensation, including a clearly-stated notice 

24 that the same or similar investments may be 

25 available at a different cost (greater or lesser) 


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1 from other sources, shall be clearly disclosed to 

2 the advice recipient (within the meaning of sub3 section (e)(11)(C)), and 

4 ‘‘(D) in any case in which a person who, 

5 acting in good faith and with reasonable dili6 gence, makes an error or omission in disclosing 

7 the information specified in subparagraphs (B) 

8 or (C), the person discloses the correct informa9 tion to the advice recipient as soon as prac10 ticable but not later than 30 days from the date 

11 on which the person knows of such error or 

12 omission.’’. 

13 (b) EFFECTIVE DATE.— 

14 (1) MODIFICATION OF CERTAIN RULES, AND

15 RULES AND ADMINISTRATIVE POSITIONS PROMUL16 GATED BEFORE ENACTMENT BUT NOT EFFECTIVE

17 ON JANUARY 1, 2015, PROHIBITED.—The Depart18 ment of Labor is prohibited from amending any 

19 rules or administrative positions promulgated under 

20 section 3(21) of the Employee Retirement Security 

21 Act of 1974 and section 4975(e)(3) of the Internal 

22 Revenue Code of 1986 (including Department of 

23 Labor Interpretive Bulletin 96–1 (29 C.F.R. 

24 2509.96–1) and Department of Labor Advisory 

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1 tive position promulgated by the Department of 

2 Labor prior to the date of the enactment of this Act 

3 but not effective on January 1, 2015, may become 

4 effective unless a bill or joint resolution referred to 

5 in paragraph (3) is enacted as described in such 

6 paragraph not later than 60 days after the date of 

7 the enactment of this Act. 

8 (2) GENERAL EFFECTIVE DATE OF AMEND9 MENTS.—Except as provided in paragraph (3), the 

10 amendments made by subsection (a) of this section 

11 shall take effect on the 61st day after the date of 

12 the enactment of this Act and shall apply with re13 spect to information provided or recommendations 

14 made on or after 2 years after the date of the enact15 ment of this Act. 

16 (3) EXCEPTION.—If a bill or joint resolution is 

17 enacted prior to the 61st day after the date of the 

18 enactment of this Act that specifically approves any 

19 rules or administrative positions promulgated under 

20 section 3(21) of the Employee Retirement Security 

21 Act of 1974 and section 4975(e)(3) of the Internal 

22 Revenue Code of 1986 that is not in effect on Janu23 ary 1, 2015, the amendments made by subsection 

24 (a) of this section shall not take effect. 


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1 (c) GRANDFATHERED TRANSACTIONS AND SERV2 ICES.—The amendments made by subsection (a) shall not 

3 apply to any service or transaction rendered, entered into, 

4 or for which a person has been compensated prior to the 

5 date on which the amendments made by subsection (a) 

6 of this Act become effective under subsection (b)(2). 

7 (d) TRANSITION.—If the amendments made by sub8 section (a) of this section take effect, then nothing in this 

9 section shall be construed to prohibit the issuance of guid10 ance to carry out such amendments so long as such guid11 ance is necessary to implement such amendments. Until 

12 such time as regulations or other guidance are issued to 

13 carry out such amendments, a plan and a fiduciary shall 

14 be treated as meeting the requirements of such amend15 ments if the plan or fiduciary, as the case may be, makes 

16 a good faith effort to comply with such requirements. 

Æ 


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