545 
ing which the ability of such participant or ben-
eficiary to direct the investment of the assets in 
his or her account is suspended by a plan spon-
sor or fiduciary’’, and 
(C) by adding at the end the following new 
subparagraphs: 
‘‘(B) If a person referred to in subparagraph (A)(ii) 
meets the requirements of this title in connection with au-
thorizing and implementing the blackout period, any per-
son who is otherwise a fiduciary shall not be liable under 
this title for any loss occurring during such period. 
‘‘(C) For purposes of this paragraph, the term ‘black-
out period’ has the meaning given such term by section 
101(i)(7).’’; and 
(2) by adding at the end the following: 
‘‘(4)(A) In any case in which a qualified change 
in investment options occurs in connection with an 
individual account plan, a participant or beneficiary 
shall not be treated for purposes of paragraph (1) 
as not exercising control over the assets in his ac-
count in connection with such change if the require-
ments of subparagraph (C) are met in connection 
with such change. 
‘‘(B) For purposes of subparagraph (A), the 
term ‘qualified change in investment options’ means, 
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in connection with an individual account plan, a 
change in the investment options offered to the par-
ticipant or beneficiary under the terms of the plan, 
under which— 
‘‘(i) the account of the participant or bene-
ficiary is reallocated among one or more re-
maining or new investment options which are 
offered in lieu of one or more investment op-
tions offered immediately prior to the effective 
date of the change, and 
‘‘(ii) the stated characteristics of the re-
maining or new investment options provided 
under clause (i), including characteristics relat-
ing to risk and rate of return, are, as of imme-
diately after the change, reasonably similar to 
those of the existing investment options as of 
immediately before the change. 
‘‘(C) The requirements of this subparagraph 
are met in connection with a qualified change in in-
vestment options if— 
‘‘(i) at least 30 days and no more than 60 
days prior to the effective date of the change, 
the plan administrator furnishes written notice 
of the change to the participants and bene-
ficiaries, including information comparing the 
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existing and new investment options and an ex-
planation that, in the absence of affirmative in-
vestment instructions from the participant or 
beneficiary to the contrary, the account of the 
participant or beneficiary will be invested in the 
manner described in subparagraph (B), 
‘‘(ii) the participant or beneficiary has not 
provided to the plan administrator, in advance 
of the effective date of the change, affirmative 
investment instructions contrary to the change, 
and 
‘‘(iii) the investments under the plan of the 
participant or beneficiary as in effect imme-
diately prior to the effective date of the change 
were the product of the exercise by such partici-
pant or beneficiary of control over the assets of 
the account within the meaning of paragraph 
(1).’’. 
(b) EFFECTIVE DATE.— 
(1) IN GENERAL.—The amendments made by 
this section shall apply to plan years beginning after 
December 31, 2007. 
(2) SPECIAL
RULE
FOR
COLLECTIVELY
BAR-
GAINED AGREEMENTS.—In the case of a plan main-
tained pursuant to 1 or more collective bargaining 
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548 
agreements between employee representatives and 1 
or more employers ratified on or before the date of 
the enactment of this Act, paragraph (1) shall be 
applied to benefits pursuant to, and individuals cov-
ered by, any such agreement by substituting for 
‘‘December 31, 2007’’ the earlier of— 
(A) the later of— 
(i) December 31, 2008, or 
(ii) the date on which the last of such 
collective bargaining agreements termi-
nates (determined without regard to any 
extension thereof after such date of enact-
ment), or 
(B) December 31, 2009. 
SEC. 622. INCREASE IN MAXIMUM BOND AMOUNT. 
(a) IN GENERAL.—Section 412(a) of the Employee 
Retirement Income Security Act of 1974 (29 U.S.C. 
1112), as amended by section 611(b), is amended by add-
ing at the end the following: ‘‘In the case of a plan that 
holds employer securities (within the meaning of section 
407(d)(1)), this subsection shall be applied by substituting 
‘$1,000,000’ for ‘$500,000’ each place it appears.’’ 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to plan years beginning after De-
cember 31, 2007. 
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SEC. 623. INCREASE IN PENALTIES FOR COERCIVE INTER-
FERENCE WITH EXERCISE OF ERISA RIGHTS. 
(a) IN GENERAL.—Section 511 of the Employment 
Retirement Income Security Act of 1974 (29 U.S.C. 1141) 
is amended— 
(1) by striking ‘‘$10,000’’ and inserting 
‘‘$100,000’’, and 
(2) by striking ‘‘one year’’ and inserting ‘‘10 
years’’. 
(b) EFFECTIVE DATE.—The amendments made by 
this section shall apply to violations occurring on and after 
the date of the enactment of this Act. 
SEC. 624. TREATMENT OF INVESTMENT OF ASSETS BY PLAN 
WHERE PARTICIPANT FAILS TO EXERCISE IN-
VESTMENT ELECTION. 
(a) IN GENERAL.—Section 404(c) of the Employee 
Retirement Income Security Act of 1974 (29 U.S.C. 
1104(c)), as amended by section 622, is amended by add-
ing at the end the following new paragraph: 
‘‘(5) 
DEFAULT
INVESTMENT
ARRANGE-
MENTS.— 
‘‘(A) IN GENERAL.—For purposes of para-
graph (1), a participant in an individual ac-
count plan meeting the notice requirements of 
subparagraph (B) shall be treated as exercising 
control over the assets in the account with re-
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spect to the amount of contributions and earn-
ings which, in the absence of an investment 
election by the participant, are invested by the 
plan in accordance with regulations prescribed 
by the Secretary. The regulations under this 
subparagraph shall provide guidance on the ap-
propriateness of designating default investments 
that include a mix of asset classes consistent 
with capital preservation or long-term capital 
appreciation, or a blend of both. 
‘‘(B) NOTICE REQUIREMENTS.— 
‘‘(i) IN GENERAL.—The requirements 
of this subparagraph are met if each par-
ticipant— 
‘‘(I) receives, within a reasonable 
period of time before each plan year, 
a notice explaining the employee’s 
right under the plan to designate how 
contributions and earnings will be in-
vested and explaining how, in the ab-
sence of any investment election by 
the participant, such contributions 
and earnings will be invested, and 
‘‘(II) has a reasonable period of 
time after receipt of such notice and 
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