be the same as the net asset value of the 
shares. 
(2) AUTHORIZED
PARTICIPANT.—The term 
‘‘authorized participant’’ means a financial institu-
tion that is a member or participant of a clearing 
agency registered under section 17A(b) of the Secu-
rities Exchange Act of 1934 that enters into a con-
tractual relationship with an exchange-traded fund 
pursuant to which the financial institution is per-
mitted to purchase and redeem shares directly from 
the fund and to sell such shares to third parties, but 
only if the contractual arrangement or applicable law 
precludes the financial institution from— 
(A) purchasing the shares for its own in-
vestment purposes rather than for the exclusive 
purpose of creating and redeeming such shares 
on behalf of third parties; and 
(B) selling the shares to third parties who 
are not market makers or otherwise described 
in Treas. Reg. section 1.817–5(f) (1) and (3). 
(3) MARKET
MAKER.—The term ‘‘market 
maker’’ means a financial institution that is a reg-
istered broker or dealer under section 15(b) of the 
Securities Exchange Act of 1934 that maintains li-
quidity for an exchange-traded fund on a national 
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stock exchange by being always ready to buy and sell 
shares of such fund on the market, but only if the 
financial institution is contractually or legally pre-
cluded from selling or buying such shares to or from 
persons who are not authorized participants or oth-
erwise described in Treas. Reg. section 1.817–5(f) 
(2) and (3). 
(e) EFFECTIVE DATES, ENFORCEMENT, AND INTER-
PRETATIONS.— 
(1) EFFECTIVE DATES.— 
(A) SUBSECTION (b).—Subsection (b), and 
the definitions under subsection (d), shall apply 
to segregated asset account investments made 
on or after the earlier of— 
(i) the date that is 18 months after 
the date of the of enactment of this Act, 
or 
(ii) the date on which the amend-
ments to regulations under subsection (b) 
are made. 
(B) SUBSECTION (c).—Subsection (c) shall 
apply to taxable years beginning after the date 
of the enactment of this Act. 
(2) ENFORCEMENT AND INTERPRETATIONS.— 
Prior to the date that the Secretary of the Treasury 
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(or the Secretary’s delegate) issues final regulations 
pursuant to this section— 
(A) the Secretary (or delegate) shall ad-
minister and enforce the law in accordance with 
this section and the effective dates under para-
graph (1), and 
(B) taxpayers may rely upon their reason-
able good faith interpretations of the preceding 
subsections of this section. 
(3) NO INFERENCE.—Nothing contained in the 
amendments to regulations pursuant to subsection 
(c), or the administration and enforcement of such 
subsection under paragraph (2), shall be construed 
to create any inference as to a change in law or 
guidance in effect prior to enactment of this section. 
TITLE III—SIMPLIFICATION AND 
CLARIFICATION OF RETIRE-
MENT PLAN RULES 
SEC. 301. RECOVERY OF RETIREMENT PLAN OVERPAY-
MENTS. 
(a) OVERPAYMENTS UNDER INTERNAL REVENUE 
CODE OF 1986.— 
(1) QUALIFICATION
REQUIREMENTS.—Section 
414 of the Internal Revenue Code of 1986, as 
amended by the preceding provisions of this Act, is 
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further amended by adding at the end the following 
new subsection: 
‘‘(bb) SPECIAL RULES APPLICABLE
TO BENEFIT 
OVERPAYMENTS.— 
‘‘(1) IN GENERAL.—A plan shall not fail to be 
treated as described in clause (i), (ii), (iii), or (iv) 
of section 219(g)(5)(A) (and shall not fail to be 
treated as satisfying the requirements of section 
401(a) or 403) merely because— 
‘‘(A) the plan fails to obtain payment from 
any participant, beneficiary, employer, plan 
sponsor, fiduciary, or other party on account of 
any inadvertent benefit overpayment made by 
the plan, or 
‘‘(B) the plan sponsor amends the plan to 
increase past or future benefit payments to af-
fected participants and beneficiaries in order to 
adjust for prior inadvertent benefit overpay-
ments. 
‘‘(2) REDUCTION
IN
FUTURE
BENEFIT
PAY-
MENTS
AND
RECOVERY
FROM
RESPONSIBLE 
PARTY.—Paragraph (1) shall not fail to apply to a 
plan merely because, after discovering a benefit over-
payment, such plan— 
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‘‘(A) reduces future benefit payments to 
the correct amount provided for under the 
terms of the plan, or 
‘‘(B) seeks recovery from the person or 
persons responsible for such overpayment. 
‘‘(3) EMPLOYER
FUNDING
OBLIGATIONS.— 
Nothing in this subsection shall relieve an employer 
of any obligation imposed on it to make contribu-
tions to a plan to meet the minimum funding stand-
ards under section 412 or to prevent or restore an 
impermissible forfeiture in accordance with section 
411. 
‘‘(4) OBSERVANCE OF BENEFIT LIMITATIONS.— 
Notwithstanding paragraph (1), a plan to which 
paragraph (1) applies shall observe any limitations 
imposed on it by section 401(a)(17) or 415. The 
plan may enforce such limitations using any method 
approved by the Secretary for recouping benefits 
previously paid or allocations previously made in ex-
cess of such limitations. 
‘‘(5) COORDINATION WITH OTHER QUALIFICA-
TION
REQUIREMENTS.—The Secretary may issue 
regulations or other guidance of general applicability 
specifying how benefit overpayments and their 
recoupment or non-recoupment from a participant or 
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beneficiary shall be taken into account for purposes 
of satisfying any requirement applicable to a plan to 
which paragraph (1) applies.’’. 
(2) ROLLOVERS.—Section 402(c) of such Code 
is amended by adding at the end the following new 
paragraph: 
‘‘(13) In the case of an inadvertent benefit 
overpayment 
from 
a 
plan 
to 
which 
section 
414(bb)(1) applies which is transferred to an eligible 
retirement plan by or on behalf of a participant or 
beneficiary— 
‘‘(A) the portion of such overpayment with 
respect to which recoupment is not sought on 
behalf of the plan shall be treated as having 
been paid in an eligible rollover distribution if 
the payment would have been an eligible roll-
over distribution but for being an overpayment, 
and 
‘‘(B) the portion of such overpayment with 
respect to which recoupment is sought on behalf 
of the plan shall be permitted to be returned to 
such plan and in such case shall be treated as 
an eligible rollover distribution transferred to 
such plan by the participant or beneficiary who 
received such overpayment (and the plans mak-
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benefits due to other participants and 
beneficiaries, or 
‘‘(C) any fiduciary of the plan, other than 
a fiduciary (including a plan sponsor or contrib-
uting employer acting in a fiduciary capacity) 
whose breach of its fiduciary duties resulted in 
such overpayment, provided that if the plan has 
established prudent procedures to prevent and 
minimize overpayment of benefits and the rel-
evant plan fiduciaries have followed such proce-
dures, an inadvertent benefit overpayment will 
not give rise to a breach of fiduciary duty. 
‘‘(2) REDUCTION
IN
FUTURE
BENEFIT
PAY-
MENTS
AND
RECOVERY
FROM
RESPONSIBLE 
PARTY.—Paragraph (1) shall not fail to apply with 
respect to any inadvertent benefit overpayment 
merely because, after discovering such overpayment, 
the responsible plan fiduciary— 
‘‘(A) reduces future benefit payments to 
the correct amount provided for under the 
terms of the plan, or 
‘‘(B) seeks recovery from the person or 
persons responsible for the overpayment. 
‘‘(3) EMPLOYER
FUNDING
OBLIGATIONS.— 
Nothing in this subsection shall relieve an employer 
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of any obligation imposed on it to make contribu-
tions to a plan to meet the minimum funding stand-
ards under part 3 of this subtitle B or to prevent 
or restore an impermissible forfeiture in accordance 
with section 203. 
‘‘(4) RECOUPMENT
FROM
PARTICIPANTS
AND 
BENEFICIARIES.—If the responsible plan fiduciary, 
in the exercise of its fiduciary discretion, decides to 
seek recoupment from a participant or beneficiary of 
all or part of an inadvertent benefit overpayment 
made by the plan to such participant or beneficiary, 
it may do so, subject to the following conditions: 
‘‘(A) No interest or other additional 
amounts (such as collection costs or fees) are 
sought on overpaid amounts. 
‘‘(B) If the plan seeks to recoup past over-
payments of a non-decreasing periodic benefit 
by reducing future benefit payments— 
‘‘(i) the reduction ceases after the 
plan has recovered the full dollar amount 
of the overpayment, 
‘‘(ii) the amount recouped each cal-
endar year does not exceed 10 percent of 
the full dollar amount of the overpayment, 
and 
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‘‘(iii) future benefit payments are not 
reduced to below 90 percent of the periodic 
amount otherwise payable under the terms 
of the plan. 
Alternatively, if the plan seeks to recoup past 
overpayments of a non-decreasing periodic ben-
efit through one or more installment payments, 
the sum of such installment payments in any 
calendar year does not exceed the sum of the 
reductions that would be permitted in such year 
under the preceding sentence. 
‘‘(C) If the plan seeks to recoup past over-
payments of a benefit other than a non-decreas-
ing periodic benefit, the plan satisfies require-
ments developed by the Secretary of the Treas-
ury for purposes of this subparagraph. 
‘‘(D) Efforts to recoup overpayments are 
not made through a collection agency or similar 
third party and such efforts are not accom-
panied by threats of litigation, unless the re-
sponsible plan fiduciary reasonably believes it 
could prevail in a civil action brought in Fed-
eral or State court to recoup the overpayments. 
‘‘(E) Recoupment of past overpayments to 
a participant is not sought from any beneficiary 
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of the participant, including a spouse, surviving 
spouse, former spouse, or other beneficiary. 
‘‘(F) Recoupment may not be sought if the 
first overpayment occurred more than 3 years 
before the participant or beneficiary is first no-
tified in writing of the error. 
‘‘(G) A participant or beneficiary from 
whom recoupment is sought is entitled to con-
test all or part of the recoupment pursuant to 
the plan’s claims and appeals procedures. 
‘‘(H) In determining the amount of 
recoupment to seek, the responsible plan fidu-
ciary may take into account the hardship that 
recoupment likely would impose on the partici-
pant or beneficiary. 
‘‘(5) 
EFFECT
OF
CULPABILITY.—Subpara-
graphs (A) through (F) of paragraph (4) shall not 
apply to protect a participant or beneficiary who is 
culpable. For purposes of this paragraph, a partici-
pant or beneficiary is culpable if the individual bears 
responsibility for the overpayment (such as through 
misrepresentations or omissions that led to the over-
payment), or if the individual knew, or had good 
reason to know under the circumstances, that the 
benefit payment or payments were materially in ex-
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cess of the correct amount. Notwithstanding the pre-
ceding sentence, an individual is not culpable merely 
because the individual believed the benefit payment 
or payments were or might be in excess of the cor-
rect amount, if the individual raised that question 
with an authorized plan representative and was told 
the payment or payments were not in excess of the 
correct amount. With respect to a culpable partici-
pant or beneficiary, efforts to recoup overpayments 
shall not be made through threats of litigation, un-
less a lawyer for the plan could make the representa-
tions required under Rule 11 of the Federal Rules 
of Civil Procedure if the litigation were brought in 
Federal court.’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply as of the date of the enactment 
of this Act. 
(d) CERTAIN ACTIONS BEFORE DATE OF ENACT-
MENT.—Plans, fiduciaries, employers, and plan sponsors 
are entitled to rely on— 
(1) a good faith interpretation of then existing 
administrative guidance for inadvertent benefit over-
payment recoupments and recoveries that com-
menced before the date of enactment of this Act, 
and 
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(2) determinations made before such date of en-
actment by the responsible plan fiduciary, in the ex-
ercise of its fiduciary discretion, not to seek 
recoupment or recovery of all or part of an inad-
vertent benefit overpayment. 
In the case of a benefit overpayment that occurred prior 
to the date of enactment of this Act, any installment pay-
ments by the participant or beneficiary to the plan or any 
reduction in periodic benefit payments to the participant 
or beneficiary, which were made in recoupment of such 
overpayment and which commenced prior to such date, 
may continue after such date. Nothing in this subsection 
shall relieve a fiduciary from responsibility for an overpay-
ment that resulted from a breach of its fiduciary duties. 
SEC. 302. REDUCTION IN EXCISE TAX ON CERTAIN ACCU-
MULATIONS 
IN 
QUALIFIED 
RETIREMENT 
PLANS. 
(a) IN GENERAL.—Subsection (a) of section 4974 of 
the Internal Revenue Code of 1986 is amended by striking 
‘‘50 percent’’ and inserting ‘‘25 percent’’. 
(b) REDUCTION IN EXCISE TAX ON FAILURES TO 
TAKE
REQUIRED
MINIMUM
DISTRIBUTIONS.—Section 
4974 of such Code is amended by adding at the end the 
following new subsection: 
‘‘(e) REDUCTION OF TAX IN CERTAIN CASES.— 
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‘‘(1) REDUCTION.—In the case of a taxpayer 
who— 
‘‘(A) corrects, during the correction win-
dow, a shortfall of distributions from an indi-
vidual retirement plan which resulted in imposi-
tion of a tax under subsection (a), and 
‘‘(B) submits a return, during the correc-
tion window, reflecting such tax (as modified by 
this subsection), 
the first sentence of subsection (a) shall be applied 
by substituting ‘10 percent’ for ‘25 percent’. 
‘‘(2) CORRECTION WINDOW.—For purposes of 
this subsection, the term ‘correction window’ means 
the period of time beginning on the date on which 
the tax under subsection (a) is imposed with respect 
to a shortfall of distributions from an individual re-
tirement plan, and ending on the earlier of— 
‘‘(A) the date on which the Secretary initi-
ates an audit, or otherwise demands payment, 
with respect to the shortfall of distributions, or 
‘‘(B) the last day of the second taxable 
year that begins after the end of the taxable 
year in which the tax under subsection (a) is 
imposed.’’. 
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(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2020. 
SEC. 303. PERFORMANCE BENCHMARKS FOR ASSET ALLO-
CATION FUNDS. 
(a) IN GENERAL.—Not later than 6 months after the 
date of the enactment of this Act, the Secretary of Labor 
(or the Secretary’s delegate) shall modify the regulations 
under section 404 of the Employee Retirement Income Se-
curity Act of 1974 (29 U.S.C. 1104) to provide that, in 
the case of a designated investment alternative which con-
tains a mix of asset classes, a plan administrator may, 
but is not required to, use a benchmark which is a blend 
of different broad-based securities market indices if— 
(1) the blend is reasonably representative of the 
asset class holdings of the designated investment al-
ternative; 
(2) for purposes of determining the blend’s re-
turns for 1-, 5-, and 10-calendar-year periods (or for 
the life of the alternative, if shorter), the blend is 
modified at least once per year to reflect changes in 
the asset class holdings of the designated investment 
alternative; 
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(3) the blend is furnished to participants and 
beneficiaries in a manner that is reasonably designed 
to be understandable and helpful; and 
(4) each securities market index which is used 
for an associated asset class would separately satisfy 
the requirements of such regulations for such asset 
class. 
(b) STUDY.—Not later than December 31, 2021, the 
Secretary of Labor (or the Secretary’s delegate) shall de-
liver a report to the Committees on Ways and Means and 
Education and Labor of the House of Representatives and 
the Committees on Finance and Health, Education, 
Labor, and Pensions of the Senate regarding the effective-
ness of the benchmarking requirements under section 
2550.404a–5 of title 29, Code of Federal Regulations. 
SEC. 304. REVIEW AND REPORT TO THE CONGRESS RELAT-
ING TO REPORTING AND DISCLOSURE RE-
QUIREMENTS. 
(a) STUDY.—As soon as practicable after the date of 
the enactment of this Act, the Secretary of Labor, the Sec-
retary of the Treasury, and the Pension Benefit Guaranty 
Corporation shall review the reporting and disclosure re-
quirements of— 
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(1) title I of the Employee Retirement Income 
Security Act of 1974 applicable to pension plans (as 
defined in section 3(2) of such Act); and 
(2) the Internal Revenue Code of 1986 applica-
ble to qualified retirement plans (as defined in sec-
tion 4974(c) of such Code without regard to para-
graphs (4) and (5) thereof). 
(b) REPORT.—Not later than 18 months after the 
date of the enactment of this Act, the Secretary of Labor, 
the Secretary of the Treasury, and the Pension Benefit 
Guaranty Corporation, jointly, and after consultation with 
a balanced group of participant and employer representa-
tives, shall with respect to plans referenced in subsection 
(a) report on the effectiveness of the applicable reporting 
and disclosure requirements and make such recommenda-
tions as may be appropriate to the appropriate committees 
of the Congress to consolidate, simplify, standardize, and 
improve such requirements so as to simplify reporting for 
such plans and ensure that plans can simply furnish and 
participants and beneficiaries timely receive and better un-
derstand the information they need to monitor their plans, 
plan for retirement, and obtain the benefits they have 
earned. Such report shall assess the extent to which retire-
ment plans are retaining disclosures, work records, and 
plan documents that are needed to ensure accurate cal-
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