(A) IN
GENERAL.—Section 3(2) of the 
Employee Retirement Income Security Act of 
1974 (29 U.S.C. 1002(2)) is amended— 
(i) by inserting ‘‘or (C)’’ after ‘‘sub-
paragraph (B)’’ in subparagraph (A), and 
(ii) by adding at the end the following 
new subparagraph: 
‘‘(C) An automatic IRA arrangement de-
scribed in section 408B(d) of the Internal Rev-
enue Code of 1986 shall not be treated as an 
employee pension benefit plan or pension plan 
if, under the arrangement, contributions are to 
be made to an automatic IRA the provider of 
which is included in the website list established 
under section 408B(h)(3) of such Code, are to 
be made to an individual retirement plan des-
ignated by the employee, or are to be invested 
in retirement bonds (whether to the Secretary 
of the Treasury or to a designated trustee or 
other agent for that purpose).’’. 
(B) 
CUSTOMER
IDENTIFICATION
PRO-
GRAM.—Notwithstanding the amendment made 
by subparagraph (A), an individual retirement 
plan established pursuant to an automatic IRA 
arrangement described in section 408B(d) of 
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the Internal Revenue Code of 1986 shall, for 
purposes of any customer identification pro-
gram established under section 5318(l) of title 
31, United States Code, be treated as an ac-
count opened for the purpose of participating in 
an employee benefit plan established under the 
Employee Retirement Income Security Act of 
1974. 
(2) FIDUCIARY DUTIES.—Section 404(c)(2) of 
such Act is amended— 
(A) by inserting the following sentence be-
fore the last sentence: ‘‘In the case of an auto-
matic IRA under section 408B of such Code 
that is not exempt under section 3(2)(C), a par-
ticipant or beneficiary shall, for purposes of 
paragraph (1), be treated as exercising control 
over the assets in the account on and after the 
7th day after notice has been given to an em-
ployee that such automatic IRA has been estab-
lished on behalf of the employee.’’, and 
(B) by inserting ‘‘or with respect to an 
automatic IRA under section 408B of such 
Code’’ after ‘‘arrangement’’ in the last sen-
tence. 
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(e) NOTICE
OF
AVAILABILITY
OF
INVESTMENT 
GUIDELINES.— 
(1) IN GENERAL.—Section 408(i) (relating to 
reports) is amended by adding at the end the fol-
lowing new sentences: ‘‘Any report furnished under 
paragraph (2) to an individual shall include notice of 
the internet website of the Department of Labor for 
sources of information on individual investing and 
diversification.’’. 
(2) UPDATE INFORMATION.—Such information 
shall be modified (or updated) by the Secretary of 
Labor in consultation with the Secretary of the 
Treasury and the Chairman of the Securities and 
Exchange Commission to address needed changes 
due to the creation of automatic IRAs. 
(f) FAILURE TO PROVIDE ACCESS TO PAYROLL SAV-
INGS ARRANGEMENTS.—Chapter 43 (relating to qualified 
pension, etc., plans) is amended by adding at the end the 
following new section: 
‘‘SEC. 4980J. REQUIREMENTS FOR COVERED EMPLOYERS 
TO PROVIDE EMPLOYEES ACCESS TO AUTO-
MATIC IRA ARRANGEMENTS. 
‘‘(a) GENERAL RULE.—There is hereby imposed a 
tax on any failure by a covered employer (as defined in 
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section 408B) to meet the requirements of subsection (d) 
for a calendar year. 
‘‘(b) AMOUNT.— 
‘‘(1) IN GENERAL.—The amount of the tax im-
posed by subsection (a) on any failure for any cal-
endar year shall be $100 with respect to each em-
ployee to whom such failure relates. 
‘‘(2) TAX NOT TO APPLY WHERE FAILURE NOT 
DISCOVERED
AND
REASONABLE
DILIGENCE
EXER-
CISED.—No tax shall be imposed by subsection (a) 
on any failure during any period for which it is es-
tablished to the satisfaction of the Secretary that the 
employer subject to liability for the tax did not know 
that the failure existed and exercised reasonable dili-
gence to meet the requirements of subsection (d). 
‘‘(3) TAX NOT TO APPLY TO FAILURES COR-
RECTED WITHIN 90 DAYS.—No tax shall be imposed 
by subsection (a) on any failure if— 
‘‘(A) the employer subject to liability for 
the tax under subsection (a) exercised reason-
able diligence to meet the requirements of sub-
section (d), and 
‘‘(B) the employer provides the automatic 
IRA arrangement described in section 408B to 
each employee eligible to participate in the ar-
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rangement by the end of the 90-day period be-
ginning on the first date the employer knew, or 
exercising reasonable diligence would have 
known, that such failure existed. 
‘‘(4) WAIVER BY SECRETARY.—In the case of a 
failure which is due to reasonable cause and not to 
willful neglect, the Secretary may waive part or all 
of the tax imposed by subsection (a) to the extent 
that the payment of such tax would be excessive or 
otherwise inequitable relative to the failure involved. 
‘‘(c) PROCEDURES FOR NOTICE.—The Secretary may 
prescribe and implement procedures for obtaining con-
firmation that employers are in compliance with the re-
quirements of subsection (d). The Secretary, in the Sec-
retary’s discretion, may prescribe that the confirmation 
shall be obtained on an annual or less frequent basis, and 
may use for this purpose the annual report or quarterly 
report for employment taxes, or such other means as the 
Secretary may deem advisable. 
‘‘(d) REQUIREMENT TO PROVIDE EMPLOYEE ACCESS 
TO AUTOMATIC IRA ARRANGEMENTS.—The requirements 
of this subsection are met if the employer meets the re-
quirements of section 408B.’’. 
(g) WAIVER OF EARLY WITHDRAWAL PENALTY FOR 
CERTAIN DISTRIBUTIONS FOLLOWING INITIAL ELECTION 
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