I 
111TH CONGRESS 
1ST SESSION H. R. 4146 
To amend title I of the Employee Retirement Income Security Act of 1974 
to provide for disclosure regarding compensation for services to pension plans. 
IN THE HOUSE OF REPRESENTATIVES 
NOVEMBER 19, 2009 
Mr. KLINE of Minnesota introduced the following bill; which was referred to 
the Committee on Education and Labor 
A BILL 
To amend title I of the Employee Retirement Income Secu-
rity Act of 1974 to provide for disclosure regarding com-
pensation for services to pension plans. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Sensible Transparency 
for Retirement Plans Act of 2009’’. 
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SEC. 2. DISCLOSURE TO PLAN ADMINISTRATORS OF DE-
FINED BENEFIT AND DEFINED CONTRIBU-
TION 
PENSION 
PLANS 
REGARDING 
COM-
PENSATION FOR SERVICES. 
Section 408(b)(2) of the Employee Retirement In-
come Security Act of 1974 (29 U.S.C. 1108(b)(2)) is 
amended— 
(1) by inserting ‘‘(A)’’ after ‘‘(2)’’; and 
(2) by adding at the end the following new sub-
paragraph: 
‘‘(B) DISCLOSURE TO PLAN ADMINISTRATOR OF 
PENSION
PLAN
REGARDING
COMPENSATION
FOR 
SERVICES TO PLAN.— 
‘‘(i) IN GENERAL.—A contract or arrange-
ment with a service provider for services de-
scribed in subparagraph (A) shall not be treat-
ed as reasonable for purposes of subparagraph 
(A) unless, under such arrangement, the service 
provider is required to disclose to the plan ad-
ministrator (or any other plan official with con-
tracting authority under the terms of the plan) 
the services to be provided and the total com-
pensation to be received by the service provider 
in connection with the arrangement to provide 
services to the plan. The disclosure of total 
compensation shall include a disclosure of the 
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direct compensation received by the service pro-
vider from the plan or plan sponsor and a dis-
closure of any indirect compensation received, 
in connection with the arrangement to provide 
services to the plan, by the service provider 
from a person who is not an affiliate. 
‘‘(ii) DISCLOSURE
OF
TOTAL
COMPENSA-
TION.—In any case in which a service provider 
and its affiliates provide multiple services to a 
plan, or make available plan investment options, 
under a single arrangement, the service pro-
vider that has entered into the arrangement to 
provide services to the plan shall disclose to the 
plan administrator the total compensation pay-
able by the plan or plan sponsor in connection 
with such arrangement (including, for each in-
vestment option made available under the ar-
rangement, the total expense ratio or similar 
measure of the total fees of the investment op-
tion). 
‘‘(iii) RELIANCE
BY
SERVICE
PROVIDERS 
AND FIDUCIARIES.— 
‘‘(I) 
RELIANCE
ON
INFORMATION 
PROVIDED BY REGULATED ENTITIES.—To 
the extent any of the information required 
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to be disclosed by a service provider under 
this subparagraph is given to the service 
provider by a person that is not an affiliate 
and that is regulated by the Federal Gov-
ernment or a State, the service provider 
may rely on the completeness and accuracy 
of such information unless the service pro-
vider knows or has reason to know that the 
information is inaccurate or incomplete. 
‘‘(II) RELIANCE ON DISCLOSURES.—A 
fiduciary may rely on disclosures made 
pursuant to the requirements of this sub-
section, with respect to a plan service to 
which the disclosures relate, for purposes 
of satisfying the fiduciary’s obligations 
under section 404(a)(1)(B) as they relate 
to 
the 
requirements 
of 
section 
404(a)(1)(A)(ii), and for purposes of deter-
mining whether the compensation paid for 
services rendered to a plan are reasonable 
for purposes of subparagraph (A) and may 
treat such disclosures as sufficient for such 
purposes. Nothing in this subclause shall 
be construed to exempt a fiduciary from 
taking proper notice of any other disclo-
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sures that may be made by the service pro-
vider. 
‘‘(III) CONTINUED
APPLICATION
OF 
FIDUCIARY STANDARDS.—Nothing in this 
subparagraph shall be construed to— 
‘‘(aa) alter, amend, or limit the 
ability of a fiduciary to satisfy the re-
quirements of section 404(a) by con-
sidering the aggregate or total cost of 
a group of services for the administra-
tion of a plan, or 
‘‘(bb) subject to subclause (II), 
otherwise limit the obligations of plan 
sponsors and fiduciaries under this 
part. 
‘‘(iv) TIMING OF DISCLOSURE.—The serv-
ice provider shall provide the disclosure re-
quired by this subparagraph prior to or at the 
time the arrangement is entered into and within 
60 days after the end of each plan year or cal-
endar year thereafter while such arrangement 
remains in effect. The disclosure may be pro-
vided electronically, but only if the adminis-
trator may obtain a paper copy upon request. 
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‘‘(v) FORM
OF
DISCLOSURE.—A service 
provider may provide the disclosure required 
under this subparagraph, regarding any matter 
in connection with the amount of fees or com-
pensation received for any service, in the form 
of a reasonable and representative estimate, if 
the service provider indicates any such estimate 
as being such an estimate and discloses the 
basis for such estimate. For purposes of disclo-
sure under this subparagraph, fees and ex-
penses may be expressed as a dollar amount, a 
percentage of assets, a formula, or other meth-
od sufficient to allow the fiduciary to evaluate 
the total compensation paid under the arrange-
ment. 
‘‘(vi) REGULATORY AUTHORITY.—The Sec-
retary shall issue regulations implementing this 
subparagraph. Such regulations shall require 
the disclosure to be concise, written in a man-
ner designed to be understood by the typical 
plan administrator, and calculated to assist the 
plan administrator in comparing the aggregate 
compensation received by different service pro-
viders for providing similar services and deter-
mining what compensation is paid directly or 
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indirectly by the plan. Such regulations may 
provide for categories of service providers who 
shall not be subject to this subparagraph if the 
Secretary determines that such service pro-
viders do not provide significant services mer-
iting the disclosure required by this subpara-
graph. 
‘‘(vii) AFFILIATE.—For purposes of this 
subparagraph, the term ‘affiliate’ of another en-
tity means an affiliated person 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))).’’. 
SEC. 
3. 
DISCLOSURE 
TO 
PARTICIPANTS 
AND 
BENE-
FICIARIES OF INDIVIDUAL ACCOUNT PLANS 
REGARDING INVESTMENTS AND FEES. 
(a) IN GENERAL.—Part 1 of subtitle B of title I of 
the Employee Retirement Income Security Act of 1974 is 
amended— 
(1) by redesignating section 111 (29 U.S.C. 
1031) as section 112; and 
(2) by inserting after section 110 (29 U.S.C. 
1030) the following new section: 
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‘‘SEC. 111. DISCLOSURES TO PARTICIPANTS AND BENE-
FICIARIES OF INDIVIDUAL ACCOUNT PLANS. 
‘‘(a) DISCLOSURE REQUIREMENTS.— 
‘‘(1) ADVANCE NOTICE OF FEES AND AVAIL-
ABLE
INVESTMENT
OPTIONS.—The plan adminis-
trator of an individual account plan which permits 
a participant or beneficiary to exercise control over 
the assets in the account of the participant or bene-
ficiary shall provide to the participant or bene-
ficiary— 
‘‘(A) a description of the direct fees and 
expenses that may be charged against the par-
ticipant or beneficiary’s account, and 
‘‘(B) a description of the investment op-
tions available for election under the plan. 
The notice shall be provided at least 10 business 
days prior to the earliest date provided for under the 
plan for the participant’s initial investment of any 
contribution made on behalf of such participant and 
at least 10 business days prior to the effective date 
of any material change in the information. In the 
case of a plan that provides for immediate eligibility 
or that contains an automatic contribution arrange-
ment (as defined in subparagraphs (A) and (B) of 
section 514(e)(2)), the initial notice may be provided 
within any reasonable period prior to such initial in-
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vestment. With respect to the notice required under 
this paragraph, the Secretary shall prescribe regula-
tions creating exceptions to the 10-day notice re-
quirement in circumstances similar to those de-
scribed in section 101(i)(2)(C), and such notice may 
be combined with any similar notice that may be re-
quired under section 404(c)(5) or under this section. 
‘‘(2) DESCRIPTION
OF
ACCOUNT
FEES.—The 
notice required under paragraph (1)(A) shall— 
‘‘(A) include an explanation of any fees 
and expenses for plan administrative services 
that will be charged against the individual ac-
count of the participant or beneficiary, 
‘‘(B) include an explanation of any fees 
and expenses that may be charged against the 
individual account of a participant or bene-
ficiary for services provided on an individual 
basis, rather than plan basis, including fees and 
expenses for using plan features or services, 
and 
‘‘(C) if fees of investment options are used 
to defray costs of plan administration or other 
plan costs, include a statement describing the 
fact that fees of investments defray other plan 
costs. 
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‘‘(3) DESCRIPTION OF INVESTMENT OPTIONS.— 
The notice required under paragraph (1)(B) shall— 
‘‘(A) set forth, with respect to each avail-
able investment option— 
‘‘(i) the name of the investment op-
tion, 
‘‘(ii) the investment objectives and 
principal investment strategies of the in-
vestment option, 
‘‘(iii) the principal risks associated 
with the investment option, 
‘‘(iv) the fees associated with the in-
vestment option, including fees for pur-
chase and sale of the option and the total 
annual operating expenses of the option ex-
pressed as percentage, 
‘‘(v) the historical return of the in-
vestment option derived net of fees and ex-
penses for the previous year, 5 years, and 
10 years (or since inception if later), 
‘‘(vi) whether the investment option is 
diversified among various classes of assets 
so as to minimize the risk of large losses 
or should be combined with other invest-
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ment options so as to obtain such diver-
sification, 
‘‘(vii) whether the investment option 
is actively managed or passively managed 
in relation to an index and the difference 
between active management and passive 
management, and 
‘‘(viii) where, and the manner in 
which, additional information regarding 
the investment option may be obtained, 
‘‘(B) include a statement explaining that 
investment options should not be evaluated sole-
ly on the basis of the charges for each option 
but should also be based on careful consider-
ation of other key factors, including the risk 
level of the option, the investment objectives of 
the option, the principal investment strategies 
of the option, and historical returns derived by 
the option, 
‘‘(C) be presented in a manner which is de-
signed to be understood by the typical partici-
pant and include such information as the Sec-
retary determines necessary to permit partici-
pants and beneficiaries to assess the services 
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for which charges will or could be assessed 
against the account, and 
‘‘(D) include, for each investment option, 
under regulations issued by the Secretary, an il-
lustrative example showing the estimated an-
nual dollar fees and expenses expressed as a 
percentage of assets for each $1,000 invested. 
‘‘(4) MODEL NOTICE.—The Secretary shall pre-
scribe a model notice that may be used for purposes 
of satisfying the requirements of this subsection. 
‘‘(5) ESTIMATIONS.—For purposes of providing 
the notice required under this subsection, the plan 
administrator may provide a reasonable and rep-
resentative estimate of fees and charges, if the plan 
administrator indicates any such estimate as being 
an estimate and discloses the basis for the estimate. 
‘‘(b) ELECTRONIC MEDIA.—The disclosure required 
under this section may be provided electronically, but only 
if the plan administrator discloses that the participant or 
beneficiary may obtain a paper copy upon request at no 
charge and provides a paper copy upon request at no 
charge. 
‘‘(c) REGULATIONS REGARDING CERTAIN PROD-
UCTS.—The Secretary shall prescribe regulations address-
ing the disclosure of fees for any investment options that 
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provide a contracted guaranteed rate of return and that 
do not identify specific fees. Such regulations shall ensure 
that participants and beneficiaries receive sufficient infor-
mation to allow them to make informed comparisons 
among the investment options available in the plan.’’. 
(b) QUARTERLY BENEFIT STATEMENTS.—Section 
105 of such Act (29 U.S.C. 1025) is amended— 
(1) in subsection (a)(2)— 
(A) by redesignating subparagraph (C) as 
subparagraph (G); 
(B) in subparagraph (B)(ii)— 
(i) in subclause (II), by striking ‘‘di-
versified, and’’ and inserting ‘‘diversified,’’; 
(ii) in subclause (III), by striking the 
period and inserting ‘‘, and’’; and 
(iii) by adding after subclause (III) 
the following new subclause: 
‘‘(IV) with respect to the portion 
of a participant’s account for which 
the participant has the right to direct 
the investment of assets, the informa-
tion described in subparagraph (C).’’; 
and 
(C) by inserting after subparagraph (B) 
the following new subparagraphs: 
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‘‘(C) PERIODIC
ACCOUNT
INFORMATION 
FOR PARTICIPANTS AND BENEFICIARIES.—For 
purposes of subparagraph (B)(ii)(IV), the infor-
mation described in this subparagraph consists 
of the following, indicating the portion of each 
amount described in clauses (i) though (vii) at-
tributable to each investment option elected in 
connection with the participant’s account: 
‘‘(i) the starting balance of the par-
ticipant’s account, 
‘‘(ii) contributions made during the 
quarter, itemizing separately totals for em-
ployer and totals for employee contribu-
tions, 
‘‘(iii) investment earnings or losses on 
the account balance during the quarter (if 
any), 
‘‘(iv) any direct charges to the partici-
pant or beneficiary’s account during the 
quarter, 
‘‘(v) the ending balance of the ac-
count, 
‘‘(vi) the participant’s asset allocation 
to each investment option as of the end of 
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the quarter, expressed as an amount and 
as a percentage, and 
‘‘(vii) a copy of the most recently up-
dated information described in subpara-
graphs (A)(iv), (A)(v), and (D) of section 
111(a)(3). 
‘‘(D) ESTIMATIONS.—For purposes of pro-
viding the notice required under this subsection, 
the plan administrator may provide a reason-
able and representative estimate of fees and 
charges, but only if the plan administrator indi-
cates any estimate as being an estimate and 
discloses the basis for the estimate. 
‘‘(E) MODEL STATEMENT.—The Secretary 
shall prescribe a model pension benefit state-
ment that may be used for purposes of satis-
fying the requirements of this subparagraph 
and subparagraph (B)(ii). 
‘‘(F) ANNUAL
COMPLIANCE
FOR
SMALL 
PLANS AND WITH RESPECT TO CERTAIN INFOR-
MATION.—In the case of a plan providing for 
investment 
as 
described 
in 
paragraph 
(1)(A)(i)— 
‘‘(i) if the plan has 100 or fewer par-
ticipants and beneficiaries, the plan may 
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provide the pension benefit statement 
under paragraph (1) on an annual rather 
than a quarterly basis, and 
‘‘(ii) the plan may comply with the re-
quirements of subparagraph (B)(ii)(IV) on 
an annual rather than a quarterly basis.’’; 
and 
(2) by adding at the end the following new sub-
sections: 
‘‘(d) ASSISTANCE TO EMPLOYERS AND PLAN PAR-
TICIPANTS
AND BENEFICIARIES.—The Secretary shall 
make available to employers educational and compliance 
materials designed to assist such employers in complying 
with the requirements of this section and make available 
to participants and beneficiaries educational materials de-
signed to assist participants and beneficiaries in under-
standing the disclosures provided by this section. 
‘‘(e) ELECTRONIC MEDIA.—The disclosure required 
under this section may be provided electronically, but only 
if the plan administrator discloses that the participant or 
beneficiary may obtain a paper copy upon request at no 
charge and provides a paper copy upon request at no 
charge.’’. 
(c) ENFORCEMENT.—Section 502(c)(7) of such Act 
(29 U.S.C. 1132(c)(7)) is amended— 
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(1) by inserting ‘‘(A)’’ after ‘‘(7)’’; and 
(2) adding at the end the following new sub-
paragraph: 
‘‘(B)(i) Any plan administrator or other person who 
fails or refuses to provide a statement to participants and 
beneficiaries in accordance with section 105(a)(2)(B)(ii) 
or 111(b) shall be assessed by the Secretary a civil penalty 
of up to $100 a day from the date of the failure or refusal 
to the date on which such statement or notice is so pro-
vided. 
‘‘(ii) For purposes of this subparagraph, each viola-
tion with respect to any single participant, beneficiary, or 
plan administrator shall be treated as a separate violation. 
The Secretary may compromise, modify, or remit any civil 
penalty imposed on any person under this subparagraph 
if the Secretary determines— 
‘‘(I) that the person acted reasonably and in 
good faith or that severe financial hardship would 
otherwise occur to the plan sponsor, and 
‘‘(II) that such compromise, modification, or re-
mission is in the interests of participants and bene-
ficiaries. 
‘‘(iii) No penalty shall be assessed under this sub-
paragraph against any person solely because the person 
relied upon information provided to such person by an un-
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affiliated person which is regulated by the Federal Govern-
ment or a State, unless the person knows or has reason 
to know that the information is inaccurate or incom-
plete.’’. 
(d) CLERICAL AMENDMENT.—The table of contents 
in section 1 of such Act is amended by striking the item 
relating to section 111 and inserting the following new 
items: 
‘‘Sec. 111. Disclosures to participants and beneficiaries of individual account 
plans. 
‘‘Sec. 112. Repeal and effective date.’’. 
SEC. 4. EFFECTIVE DATE. 
The Secretary shall issue proposed and then final reg-
ulations under sections 2 and 3 within one year after the 
date of the enactment of this Act. The amendments made 
by section 2 shall apply to contracts entered into in plan 
years beginning at least one year after the date of the 
issuance of the final regulations. The amendments made 
by section 3 shall apply to plan years beginning at least 
one year after the date of the issuance of the final regula-
tions. 
Æ 
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