II 

108TH CONGRESS 

1ST SESSION S. 1892

To provide information and advice to pension plan participants to assist 

them in making decisions regarding the investment of their pension 

plan assets, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

NOVEMBER 19, 2003

Mr. BAYH introduced the following bill; which was read twice and referred to 

the Committee on Finance 

A BILL

To provide information and advice to pension plan participants to assist them in making decisions regarding the 

investment of their pension plan assets, 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. NOTICE OF HIGH CONCENTRATION OF PEN4 SION ASSETS IN EMPLOYER SECURITIES. 

5 (a) IN GENERAL.—Section 105 of the Employee Re6 tirement Income Security Act of 1974 (29 U.S.C. 1025) 

7 is amended by adding at the end of the following new sub8 section: 
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1 ‘‘(e) NOTICE OF HIGH CONCENTRATION OF PLAN

2 ASSETS IN EMPLOYER SECURITIES.—

3 ‘‘(1) IN GENERAL.—In the case of an individual 

4 account plan to which this subsection applies, if the 

5 percentage of assets in the individual account that 

6 consists of employer securities and employer real 

7 property exceeds 50 percent of the total account, the 

8 plan administrator shall include with the account 

9 statement a notice that the account may be over10 invested in employer securities and employer real 

11 property. Any determination under this paragraph 

12 shall be made as of the most recent valuation date 

13 under the plan. 

14 ‘‘(2) EXCLUSION OF ASSETS HELD THROUGH

15 POOLED INVESTMENT VEHICLES.—Employer securi16 ties and employer real property held through an in17 vestment option of the plan which is not designed to 

18 invest primarily in employer securities or employer 

19 real property shall not be taken under paragraph (1) 

20 in determining the percentage of assets that consist 

21 of employer securities and employer real property. 

22 ‘‘(3) APPLICATION.—

23 ‘‘(A) IN GENERAL.—This subsection shall 

24 apply to any individual account plan which—
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1 ‘‘(i) holds employer securities which 

2 are readily tradable on an established secu3 rities market, and 

4 ‘‘(ii) permits a participant or bene5 ficiary to exercise control over assets in the 

6 individual’s account. 

7 ‘‘(B) EXCEPTION FOR ESOPS.—This sub8 section shall not apply to an employee stock 

9 ownership plan (as defined in section 

10 4795(e)(7)) of the Internal Revenue Code of 

11 1986) if the plan has no contributions which 

12 are subject to section 401 (k) or (m) of such 

13 Code. 

14 ‘‘(4) EMPLOYER SECURITIES AND REAL PROP15 ERTY.—For purposes of this subsection, the terms 

16 ‘employer securities’ and ‘employer real property’ 

17 have the meanings given such terms by paragraphs 

18 (1) and (2) of section 407(d), respectively.’’

19 (b) PENALTY.—Section 502 of the Employee Retire20 ment Income Security Act of 1974 (29 U.S.C. 1132) is 

21 amended—

22 (1) in subsection (a)(6), by striking ‘‘(6), or 

23 (7)’’ and inserting ‘‘(6), (7), or (8)’’, 

24 (2) by redesignating paragraph (8) of sub25 section (c) as paragraph (9), and 
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1 (3) by inserting after paragraph (7) the fol2 lowing new paragraph: 

3 ‘‘(8) The Secretary may assess a civil penalty 

4 against a plan administrator of up to $100 a day 

5 from the date of the plan administrator’s failure or 

6 refusal to provide notice to participants and bene7 ficiaries in accordance with section 105(e). For pur8 poses of this paragraph, each violation with respect 

9 to any single participant or beneficiary shall be 

10 treated as a separate violation.’’

11 (c) EFFECTIVE DATE.—The amendments made by 

12 this section shall apply to plan years beginning after De13 cember 31, 2003. 

14 SEC. 2. TREATMENT OF QUALIFIED RETIREMENT PLAN15 NING SERVICES. 

16 (a) IN GENERAL.—Subsection (m) of section 132 of 

17 the Internal Revenue Code of 1986 (defining qualified re18 tirement services) is amended by redesignating paragraphs 

19 (2) and (3) as paragraphs (5) and (6), respectively, and 

20 by inserting after paragraph (1) the following: 

21 ‘‘(2) LIMITATIONS.—

22 ‘‘(A) DOLLAR LIMITATION.—The aggre23 gate amount which may be excluded with re24 spect to qualified retirement planning services 
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1 provided to any individual during a taxable year 

2 shall not exceed $1,500. 

3 ‘‘(B) ADJUSTED GROSS INCOME.—No 

4 amount may be excluded with respect to quali5 fied retirement planning services provided dur6 ing a taxable year if the modified adjusted 

7 gross income of the taxpayer for such taxable 

8 year exceeds $100,000 ($200,000 in the case of 

9 married individuals filing a joint return). For 

10 purposes of this subparagraph, the term ‘modi11 fied adjusted gross income’ means adjusted 

12 gross income, determined without regard to this 

13 section and sections 911, 931, and 933. 

14 ‘‘(3) CASH REIMBURSEMENTS.—For purposes 

15 of this subsection, the term ‘qualified retirement 

16 planning services’ includes a cash reimbursement by 

17 an employer to an employee for a benefit described 

18 in paragraph (1). 

19 ‘‘(4) NO CONSTRUCTIVE RECEIPT.—No amount 

20 shall be included in the gross income of any em21 ployee solely because the employee may choose be22 tween any qualified retirement planning services pro23 vided by a qualified investment advisor and com24 pensation which would otherwise be includible in the 

25 gross income of such employee. The preceding sen-
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1 tence shall apply to highly compensated employees 

2 only if the choice described in such sentence is avail3 able on substantially the same terms to each mem4 ber of the group of employees normally provided 

5 education and information regarding the employer’s 

6 qualified employer plan.’’

7 (b) CONFORMING AMENDMENTS.—

8 (1) Section 403(b)(3)(B) of such Code is 

9 amended by inserting ‘‘132(m)(4),’’ after 

10 ‘‘132(f)(4),’’. 

11 (2) Section 414(s)(2) of such Code is amended 

12 by inserting ‘‘132(m)(4),’’ after ‘‘132(f)(4),’’. 

13 (3) Section 415(c)(3)(D)(ii) of such Code is 

14 amended by inserting ‘‘132(m)(4),’’ after 

15 ‘‘132(f)(4),’’. 

16 (c) EFFECTIVE DATE.—The amendment made by 

17 this section shall apply to taxable years beginning after 

18 December 31, 2003.

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