solely by reason of the provision of investment 
advice referred to in subsection (e)(3)(B) (or 
solely by reason of contracting for or otherwise 
arranging for the provision of the advice), if—
‘‘(i) the advice is provided by a fidu-
ciary adviser pursuant to an arrangement 
between the plan sponsor or other fidu-
ciary and the fiduciary adviser for the pro-
vision by the fiduciary adviser of invest-
ment advice referred to in such section, 
‘‘(ii) the terms of the arrangement re-
quire compliance by the fiduciary adviser 
with the requirements of this paragraph, 
‘‘(iii) the terms of the arrangement 
include a written acknowledgment by the 
fiduciary adviser that the fiduciary adviser 
is a fiduciary of the plan with respect to 
the provision of the advice, and 
‘‘(iv) the requirements of part 4 of 
subtitle B of title I of the Employee Re-
tirement Income Security Act of 1974 are 
met in connection with the provision of 
such advice. 
‘‘(G) DEFINITIONS.—For purposes of this 
paragraph and subsection (d)(16)—
‘‘(i) FIDUCIARY ADVISER.—The term 
‘fiduciary adviser’ means, with respect to a 
plan, a person who is a fiduciary of the 
plan by reason of the provision of invest-
ment advice by the person to the plan or 
to a participant or beneficiary and who 
is—
‘‘(I) registered as an investment 
adviser under the Investment Advisers 
Act of 1940 (15 U.S.C. 80b–1 et seq.) 
or under the laws of the State in 
which the fiduciary maintains its prin-
cipal office and place of business, 
‘‘(II) a bank or similar financial 
institution referred to in subsection 
(d)(4) or a savings association (as de-
fined in section 3(b)(1) of the Federal 
Deposit Insurance Act (12 U.S.C. 
1813(b)(1))), but only if the advice is 
provided through a trust department 
of the bank or similar financial insti-
tution or savings association which is 
subject to periodic examination and 
review by Federal or State banking 
authorities,
‘‘(III) an insurance company 
qualified to do business under the 
laws of a State, 
‘‘(IV) a person registered as a 
broker or dealer under the Securities 
Exchange Act of 1934 (15 U.S.C. 78a 
et seq.), 
‘‘(V) an affiliate of a person de-
scribed in any of subclauses (I) 
through (IV), or 
‘‘(VI) an employee, agent, or reg-
istered representative of a person de-
scribed in any of subclauses (I) 
through (V) who satisfies the require-
ments of applicable insurance, bank-
ing, and securities laws relating to the 
provision of the advice. 
‘‘(ii) AFFILIATE.—The term ‘affiliate’ 
of another entity means an affiliated per-
son of the entity (as defined in section 
2(a)(3) of the Investment Company Act of 
1940 (15 U.S.C. 80a–2(a)(3))). 
‘‘(iii) 
REGISTERED
REPRESENTA-
TIVE.—The term ‘registered representa-
tive’ of another entity means a person de-
scribed in section 3(a)(18) of the Securi-
ties Exchange Act of 1934 (15 U.S.C. 
78c(a)(18)) (substituting the entity for the 
broker or dealer referred to in such sec-
tion) or a person described in section 
202(a)(17) of the Investment Advisers Act 
of 1940 (15 U.S.C. 80b–2(a)(17)) (sub-
stituting the entity for the investment ad-
viser referred to in such section).’’. 
SEC. 106. STUDY REGARDING IMPACT ON RETIREMENT 
SAVINGS 
OF 
PARTICIPANTS 
AND 
BENE-
FICIARIES BY REQUIRING CONSULTANTS TO 
ADVISE PLAN FIDUCIARIES OF INDIVIDUAL 
ACCOUNT PLANS. 
(a) STUDY.—As soon as practicable after the date of 
the enactment of this Act, the Secretary of Labor shall 
undertake a study of the costs and benefits to participants 
and beneficiaries of requiring independent consultants to 
advise plan fiduciaries in connection with individual ac-
count plans. In conducting such study, the Secretary shall 
consider—
(1) the benefits to plan participants and bene-
ficiaries of engaging independent advisers to provide 
investment and other advice regarding the assets of 
the plan to persons who have fiduciary duties with
respect to the management or disposition of such as-
sets, 
(2) the extent to which independent advisers 
are currently retained by plan fiduciaries, 
(3) the availability of assistance to fiduciaries 
from appropriate Federal agencies, 
(4) the availability of qualified independent con-
sultants to serve the needs of individual account 
plan fiduciaries in the United States, 
(5) the impact of the additional fiduciary duty 
of an independent advisor on the strict fiduciary ob-
ligations of plan fiduciaries, 
(6) the impact of new requirements (consulting 
fees, reporting requirements, and new plan duties to 
prudently identify and contract with qualified inde-
pendent consultants) on the availability of individual 
account plans, and 
(7) the impact of a new requirement on the 
plan administration costs per participant for small 
and mid-size employers and the pension plans they 
sponsor. 
(b) REPORT.—Not later than 1 year after the date 
of the enactment of this Act, the Secretary of Labor shall 
report the results of the study undertaken pursuant to this 
section, together with any recommendations for legislative
changes, to the Committee on Education and the Work-
force of the House of Representatives and the Committee 
on Health, Education, Labor, and Pensions of the Senate. 
SEC. 107. TREATMENT OF QUALIFIED RETIREMENT PLAN-
NING SERVICES. 
(a) IN GENERAL.—Subsection (m) of section 132 of 
the Internal Revenue Code of 1986 (defining qualified re-
tirement services) is amended by adding at the end the 
following new paragraph: 
‘‘(4) NO CONSTRUCTIVE RECEIPT.—No amount 
shall be included in the gross income of any em-
ployee solely because the employee may choose be-
tween any qualified retirement planning services pro-
vided by a qualified investment advisor and com-
pensation which would otherwise be includible in the 
gross income of such employee. The preceding sen-
tence shall apply to highly compensated employees 
only if the choice described in such sentence is avail-
able on substantially the same terms to each mem-
ber of the group of employees normally provided 
education and information regarding the employer’s 
qualified employer plan.’’. 
(b) CONFORMING AMENDMENTS.—
(1) Section 403(b)(3)(B) of such Code is 
amended 
by 
inserting 
‘‘132(m)(4),’’ 
after 
‘‘132(f)(4),’’. 
(2) Section 414(s)(2) of such Code is amended 
by inserting ‘‘132(m)(4),’’ after ‘‘132(f)(4),’’. 
(3) Section 415(c)(3)(D)(ii) of such Code is 
amended 
by 
inserting 
‘‘132(m)(4),’’ 
after 
‘‘132(f)(4),’’. 
(c) EFFECTIVE DATE.—The amendment made by 
this section shall apply to taxable years beginning after 
December 31, 2003. 
SEC. 108. EFFECTIVE DATES AND RELATED RULES. 
(a) IN GENERAL.—Except as otherwise provided in 
this title or in subsection (b), the amendments made by 
this Act shall apply with respect to plan years beginning 
on or after the general effective date. 
(b) GENERAL EFFECTIVE DATE.—For purposes of 
this section, the term ‘‘general effective date’’ means the 
date which is 1 year after the date of the enactment of 
this Act. 
(c) SPECIAL RULE FOR COLLECTIVELY BARGAINED 
PLANS.—In the case of a plan maintained pursuant to 1 
or more collective bargaining agreements between em-
ployee representatives and 1 or more employers ratified 
on or before the date of the enactment of this Act, sub-
section (a) shall be applied to benefits pursuant to, and 
individuals covered by, any such agreement by substituting 
for ‘‘the general effective date’’ the date of the commence-
ment of the first plan year beginning on or after the ear-
lier of—
(1) the later of—
(A) the date which is 1 year after the gen-
eral effective date, or 
(B) the date on which the last of such col-
lective bargaining agreements terminates (de-
termined without regard to any extension there-
of after the date of the enactment of this Act), 
or 
(2) the date which is 2 years after the general 
effective date. 
(d) AMENDMENTS RELATING TO INVESTMENT AD-
VICE.—The amendments made by section 105 shall apply 
with respect to advice referred to in section 3(21)(A)(ii) 
of the Employee Retirement Income Security Act of 1974 
or section 4975(c)(3)(B) of the Internal Revenue Code of 
1986 provided on or after January 1, 2005.
TITLE II—OTHER PROVISIONS 
RELATING TO PENSIONS 
SEC. 201. AMENDMENTS TO RETIREMENT PROTECTION ACT 
OF 1994. 
(a) TRANSITION RULE MADE PERMANENT.—Para-
graph (1) of section 769(c) of the Retirement Protection 
Act of 1994 is amended—
(1) by striking ‘‘transition’’ each place it ap-
pears in the heading and the text, and 
(2) by striking ‘‘for any plan year beginning 
after 1996 and before 2010’’. 
(b) SPECIAL RULES.—Paragraph (2) of section 
769(c) of the Retirement Protection Act of 1994 is amend-
ed to read as follows: 
‘‘(2) SPECIAL RULES.—The rules described in 
this paragraph are as follows: 
‘‘(A) For purposes of section 412(l)(9)(A) 
of the Internal Revenue Code of 1986 and sec-
tion 302(d)(9)(A) of the Employee Retirement 
Income Security Act of 1974, the funded cur-
rent liability percentage for any plan year shall 
be treated as not less than 90 percent. 
‘‘(B) For purposes of section 412(m) of 
the Internal Revenue Code of 1986 and section 
302(e) of the Employee Retirement Income Se-
curity Act of 1974, the funded current liability 
percentage for any plan year shall be treated as 
not less than 100 percent. 
‘‘(C) For purposes of determining un-
funded 
vested 
benefits 
under 
section 
4006(a)(3)(E)(iii) of the Employee Retirement 
Income Security Act of 1974, the mortality 
table shall be the mortality table used by the 
plan.’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to plan years beginning after De-
cember 31, 2002. 
SEC. 202. REPORTING SIMPLIFICATION. 
(a) SIMPLIFIED ANNUAL FILING REQUIREMENT FOR 
OWNERS AND THEIR SPOUSES.—
(1) IN GENERAL.—The Secretary of the Treas-
ury and the Secretary of Labor shall modify the re-
quirements for filing annual returns with respect to 
one-participant retirement plans to ensure that such 
plans with assets of $250,000 or less as of the close 
of the plan year need not file a return for that year. 
(2) ONE-PARTICIPANT RETIREMENT PLAN DE-
FINED.—For purposes of this subsection, the term 
‘‘one-participant retirement plan’’ means a retire-
ment plan with respect to which the following re-
quirements are met: 
(A) on the first day of the plan year—
(i) the plan covered only one indi-
vidual (or the individual and the individ-
ual’s spouse) and the individual owned 100 
percent of the plan sponsor (whether or 
not incorporated), or 
(ii) the plan covered only one or more 
partners (or partners and their spouses) in 
the plan sponsor; 
(B) the plan meets the minimum coverage 
requirements of 410(b) of the Internal Revenue 
Code of 1986 without being combined with any 
other plan of the business that covers the em-
ployees of the business; 
(C) the plan does not provide benefits to 
anyone except the individual (and the individ-
ual’s spouse) or the partners (and their 
spouses); 
(D) the plan does not cover a business that 
is a member of an affiliated service group, a 
controlled group of corporations, or a group of 
businesses under common control; and
(E) the plan does not cover a business that 
leases employees. 
(3) OTHER DEFINITIONS.—Terms used in para-
graph (2) which are also used in section 414 of the 
Internal Revenue Code of 1986 shall have the re-
spective meanings given such terms by such section. 
(4) EFFECTIVE DATE.—The provisions of this 
subsection shall apply to plan years beginning on or 
after January 1, 2003. 
(b) SIMPLIFIED ANNUAL FILING REQUIREMENT FOR 
PLANS WITH FEWER THAN 25 EMPLOYEES.—In the case 
of plan years beginning after December 31, 2004, the Sec-
retary of the Treasury and the Secretary of Labor shall 
provide for the filing of a simplified annual return for any 
retirement plan which covers less than 25 employees on 
the first day of a plan year and which meets the require-
ments described in subparagraphs (B), (D), and (E) of 
subsection (a)(2). 
SEC. 203. IMPROVEMENT OF EMPLOYEE PLANS COMPLI-
ANCE RESOLUTION SYSTEM. 
The Secretary of the Treasury shall continue to up-
date and improve the Employee Plans Compliance Resolu-
tion System (or any successor program) giving special at-
tention to—