‘‘(3) NONFORFEITABILITY.—The interest of an 
individual in the balance of his account is nonforfeit-
able. 
‘‘(4) DIVERSIFICATION.—The investment op-
tions made available to participants by the trustee 
include reasonably diversified options of equities, 
fixed income instruments, or a combination of both. 
‘‘(5) SEPARATION OF ASSETS.—The assets of 
the trust will not be commingled with other property 
except in a common trust fund or common invest-
ment fund. 
‘‘(c) INVESTMENT STANDARDS.—The trustee of a 
Tier III investment account shall invest amounts credited 
to the part B totalization account of a participant which 
are held in such account in accordance with standards 
which shall be prescribed by the Board by regulation. Such 
standards shall ensure that investments made available to 
participants by the trustee are reasonably diversified, that 
assets held in a Tier III investment account are nonforfeit-
able, and that the trustee complies with applicable fidu-
ciary requirements. 
‘‘(d) PERIODIC REPORTS BY ACCOUNT TRUSTEE.—
‘‘(1) IN GENERAL.—The trustee of a partici-
pant’s Tier III investment account shall, in accord-
ance with regulations of the Board, make periodic
reports concerning the status of the account which 
shall meet the requirements of this section. Each 
periodic report shall be furnished to the participant 
on at least a semiannual basis on or before the 60th 
day following the period for which the report is re-
quired. 
‘‘(2) INFORMATION
REQUIRED
TO
BE
IN-
CLUDED.—The periodic report shall contain the fol-
lowing information for transactions occurring during 
the period for which the report is provided: 
‘‘(A) The balance in the Tier III invest-
ment account. 
‘‘(B) The rate of return for the period cov-
ered. 
‘‘(C) The amount of authorized account 
contributions. 
‘‘(D) The name and address of the trustee. 
‘‘(E) Commission fees and fees for admin-
istrative expenses charged in connection with 
the account. 
‘‘(F) Other information which may be re-
quired from time to time by the Board. 
The language of the report shall be written in a 
form so as to be understood by the average partici-
pant.
‘‘(3) REPORTS TO BOARD.—The Board may re-
quire the periodic report to be filed with the Board 
at such time as the Board may specify in regulations 
under this section, except that at least 1 periodic re-
port filed annually with Board shall provide informa-
tion with respect to the account as of December 31 
preceding the date of the issuance of the report. 
‘‘(4) FAILURE BY TRUSTEE TO MAKE TIMELY 
PERIODIC REPORTS.—
‘‘(A) IN GENERAL.—The trustee of a Tier 
III investment account shall be subject to a civil 
penalty of not to exceed $100 a day from the 
date of such trustee’s failure or refusal to fur-
nish the periodic report required to be furnished 
by the trustee under this subsection until the 
date on which such report is furnished. 
‘‘(B) PENALTIES ASSESSED BY BOARD.—
Any civil penalty assessed by this paragraph 
shall be imposed by the Board and collected in 
a civil action. The Board may compromise the 
amount of any civil penalty imposed by this 
paragraph. The Board may waive the applica-
tion of this paragraph with respect to any fail-
ure if the Board determines that such failure is
due to reasonable cause and not to intentional 
disregard of rules and regulations. 
‘‘(e) LUMP SUM PAYMENT TO ESTATE UPON DEATH 
OF ACCOUNT HOLDER.—Upon the death of a participant 
who has an amount credited to such participant’s part B 
totalization account invested in a Tier III investment ac-
count, such amount shall be distributed in a lump sum 
distribution, under rules established by the Board—
‘‘(1) in any case in which one or more bene-
ficiaries have been designated in advance, in accord-
ance with regulations which shall be prescribed by 
the Board, to such beneficiaries in accordance with 
such designation as provided in such regulations, 
and 
‘‘(2) in the case of any amount not distributed 
as described in paragraph (1), to the participant’s 
estate. 
‘‘SEC. 256. RETIREMENT DISTRIBUTIONS. 
‘‘(a) IN GENERAL.—Except as provided in this sec-
tion, amounts credited to a participant’s part B total-
ization account may be distributed to the participant only 
on and after the participant’s retirement date. Such dis-
tribution shall be in the form of—
‘‘(1) an individual social security annuity meet-
ing the requirements of subsection (b),
‘‘(2) a programmed withdrawal meeting the re-
quirements of subsection (c), or 
‘‘(3) a combination, meeting the requirements 
of subsection (d), of an individual social security an-
nuity (meeting the requirements of paragraph (2)) 
and a lump sum distribution. 
Not later than the date on which the participant attains 
age 62, and at any other time upon the request of the 
participant, the Board shall notify the participant of the 
most recent listing of forms of distribution approved under 
this section and the entitlement (if any) of the participant 
to such a distribution. 
‘‘(b) RETIREMENT DATE.—For purposes of this sec-
tion, the term ‘retirement date’, in connection with a par-
ticipant, means the earlier of—
‘‘(1) any date as of which the participant has 
attained retirement age (as defined in section 
216(l)(1)), or 
‘‘(2) the date designated for distribution of the 
balance in the participant’s part B totalization ac-
count pursuant to section 260. 
‘‘(c) PURCHASE OF ANNUITIES.—
‘‘(1) IN GENERAL.—
‘‘(A) SELECTION
OF
ANNUITY.—On the 
participant’s retirement date, the participant