461 
corporation relating to a previous request 
by an affected party. 
‘‘(C) CONFIDENTIALITY.— 
‘‘(i) IN GENERAL.—The plan adminis-
trator and plan sponsor shall not provide 
information under subparagraph (A)(i) in 
a form which includes any information that 
may directly or indirectly be associated 
with, or otherwise identify, an individual 
participant or beneficiary. 
‘‘(ii) LIMITATION.—A court may limit 
disclosure under this paragraph of con-
fidential information described in section 
552(b) of title 5, United States Code, to 
authorized 
representatives 
(within 
the 
meaning of section 4041(c)(2)(D)(iv)) of 
the participants or beneficiaries that agree 
to ensure the confidentiality of such infor-
mation. 
‘‘(D) FORM
AND
MANNER
OF
INFORMA-
TION; CHARGES.— 
‘‘(i) FORM AND MANNER.—The cor-
poration may prescribe the form and man-
ner of the provision of information under 
this paragraph, which shall include delivery 
VerDate Aug 31 2005 
00:22 Aug 01, 2006
Jkt 049200
PO 00000
Frm 00461
Fmt 6652
Sfmt 6201
E:\BILLS\H4.PCS
H4
ccoleman on PROD1PC71 with BILLS
462 
in written, electronic, or other appropriate 
form to the extent that such form is rea-
sonably accessible to individuals to whom 
the information is required to be provided. 
‘‘(ii) REASONABLE CHARGES.—A plan 
sponsor may charge a reasonable fee for 
any information provided under this para-
graph in other than electronic form.’’. 
(c) EFFECTIVE DATE.— 
(1) IN GENERAL.—The amendments made by 
this section shall apply to any plan termination 
under title IV of the Employee Retirement Income 
Security Act of 1974 (29 U.S.C. 1301 et seq.) with 
respect to which the notice of intent to terminate (or 
in the case of a termination by the Pension Benefit 
Guaranty Corporation, a notice of determination 
under section 4042 of such Act (29 U.S.C. 1342)) 
occurs after the date of enactment of this Act. 
(2) TRANSITION RULE.—If notice under section 
4041(c)(2)(D) or 4042(c)(3) of the Employee Re-
tirement Income Security Act of 1974 (as added by 
this section) would otherwise be required to be pro-
vided before the 90th day after the date of the en-
actment of this Act, such notice shall not be re-
quired to be provided until such 90th day. 
VerDate Aug 31 2005 
00:22 Aug 01, 2006
Jkt 049200
PO 00000
Frm 00462
Fmt 6652
Sfmt 6201
E:\BILLS\H4.PCS
H4
ccoleman on PROD1PC71 with BILLS
463 
SEC. 507. NOTICE OF FREEDOM TO DIVEST EMPLOYER SE-
CURITIES. 
(a) IN GENERAL.—Section 101 of the Employee Re-
tirement Income Security Act of 1974 (29 U.S.C. 1021), 
as amended by this Act, is amended by redesignating sub-
section (m) as subsection (n) and by inserting after sub-
section (l) the following: 
‘‘(m) NOTICE OF RIGHT TO DIVEST.—Not later than 
30 days before the first date on which an applicable indi-
vidual of an applicable individual account plan is eligible 
to exercise the right under section 204(j) to direct the pro-
ceeds from the divestment of employer securities with re-
spect to any type of contribution, the administrator shall 
provide to such individual a notice— 
‘‘(1) setting forth such right under such sec-
tion, and 
‘‘(2) describing the importance of diversifying 
the investment of retirement account assets. 
The notice required by this subsection shall be written in 
a manner calculated to be understood by the average plan 
participant and may be delivered in written, electronic, or 
other appropriate form to the extent that such form is rea-
sonably accessible to the recipient.’’ 
(b) PENALTIES.—Section 502(c)(7) of the Employee 
Retirement Income Security Act of 1974 (29 U.S.C. 
VerDate Aug 31 2005 
00:22 Aug 01, 2006
Jkt 049200
PO 00000
Frm 00463
Fmt 6652
Sfmt 6201
E:\BILLS\H4.PCS
H4
ccoleman on PROD1PC71 with BILLS
464 
1132(c)(7)) is amended by striking ‘‘section 101(i)’’ and 
inserting ‘‘subsection (i) or (m) of section 101’’. 
(c) MODEL NOTICE.—The Secretary of the Treasury 
shall, within 180 days after the date of the enactment of 
this subsection, prescribe a model notice for purposes of 
satisfying the requirements of the amendments made by 
this section. 
(d) EFFECTIVE DATES.— 
(1) IN GENERAL.—The amendments made by 
this section shall apply to plan years beginning after 
December 31, 2006. 
(2) TRANSITION RULE.—If notice under section 
101(m) of the Employee Retirement Income Secu-
rity Act of 1974 (as added by this section) would 
otherwise be required to be provided before the 90th 
day after the date of the enactment of this Act, such 
notice shall not be required to be provided until such 
90th day. 
SEC. 508. PERIODIC PENSION BENEFIT STATEMENTS. 
(a) AMENDMENTS OF ERISA.— 
(1) IN GENERAL.—Section 105(a) of the Em-
ployee Retirement Income Security Act of 1974 (29 
U.S.C. 1025(a)) is amended to read as follows: 
‘‘(a) REQUIREMENTS TO PROVIDE PENSION BEN-
EFIT STATEMENTS.— 
VerDate Aug 31 2005 
00:22 Aug 01, 2006
Jkt 049200
PO 00000
Frm 00464
Fmt 6652
Sfmt 6201
E:\BILLS\H4.PCS
H4
ccoleman on PROD1PC71 with BILLS
465 
‘‘(1) REQUIREMENTS.— 
‘‘(A) INDIVIDUAL
ACCOUNT
PLAN.—The 
administrator of an individual account plan 
(other than a one-participant retirement plan 
described in section 101(i)(8)(B)) shall furnish 
a pension benefit statement— 
‘‘(i) at least once each calendar quar-
ter to a participant or beneficiary who has 
the right to direct the investment of assets 
in his or her account under the plan, 
‘‘(ii) at least once each calendar year 
to a participant or beneficiary who has his 
or her own account under the plan but 
does not have the right to direct the invest-
ment of assets in that account, and 
‘‘(iii) upon written request to a plan 
beneficiary not described in clause (i) or 
(ii). 
‘‘(B) DEFINED BENEFIT PLAN.—The ad-
ministrator of a defined benefit plan (other 
than a one-participant retirement plan de-
scribed in section 101(i)(8)(B)) shall furnish a 
pension benefit statement— 
‘‘(i) at least once every 3 years to 
each participant with a nonforfeitable ac-
VerDate Aug 31 2005 
00:22 Aug 01, 2006
Jkt 049200
PO 00000
Frm 00465
Fmt 6652
Sfmt 6201
E:\BILLS\H4.PCS
H4
ccoleman on PROD1PC71 with BILLS
466 
crued benefit and who is employed by the 
employer maintaining the plan at the time 
the statement is to be furnished, and 
‘‘(ii) to a participant or beneficiary of 
the plan upon written request. 
Information furnished under clause (i) to a par-
ticipant may be based on reasonable estimates 
determined under regulations prescribed by the 
Secretary, in consultation with the Pension 
Benefit Guaranty Corporation. 
‘‘(2) STATEMENTS.— 
‘‘(A) IN
GENERAL.—A pension benefit 
statement under paragraph (1)— 
‘‘(i) shall indicate, on the basis of the 
latest available information— 
‘‘(I) the total benefits accrued, 
and 
‘‘(II) the nonforfeitable pension 
benefits, if any, which have accrued, 
or the earliest date on which benefits 
will become nonforfeitable, 
‘‘(ii) shall include an explanation of 
any permitted disparity under section 
401(l) of the Internal Revenue Code of 
1986 or any floor-offset arrangement that 
VerDate Aug 31 2005 
00:22 Aug 01, 2006
Jkt 049200
PO 00000
Frm 00466
Fmt 6652
Sfmt 6201
E:\BILLS\H4.PCS
H4
ccoleman on PROD1PC71 with BILLS
467 
may be applied in determining any accrued 
benefits described in clause (i), 
‘‘(iii) shall be written in a manner cal-
culated to be understood by the average 
plan participant, and 
‘‘(iv) may be delivered in written, elec-
tronic, or other appropriate form to the ex-
tent such form is reasonably accessible to 
the participant or beneficiary. 
‘‘(B) ADDITIONAL INFORMATION.—In the 
case of an individual account plan, any pension 
benefit statement under clause (i) or (ii) of 
paragraph (1)(A) shall include— 
‘‘(i) the value of each investment to 
which assets in the individual account have 
been allocated, determined as of the most 
recent valuation date under the plan, in-
cluding the value of any assets held in the 
form of employer securities, without regard 
to whether such securities were contributed 
by the plan sponsor or acquired at the di-
rection of the plan or of the participant or 
beneficiary, and 
‘‘(ii) in the case of a pension benefit 
statement under paragraph (1)(A)(i)— 
VerDate Aug 31 2005 
00:22 Aug 01, 2006
Jkt 049200
PO 00000
Frm 00467
Fmt 6652
Sfmt 6201
E:\BILLS\H4.PCS
H4
ccoleman on PROD1PC71 with BILLS
468 
‘‘(I) an explanation of any limita-
tions or restrictions on any right of 
the participant or beneficiary under 
the plan to direct an investment, 
‘‘(II) an explanation, written in a 
manner calculated to be understood 
by the average plan participant, of the 
importance, for the long-term retire-
ment security of participants and 
beneficiaries, of a well-balanced and 
diversified investment portfolio, in-
cluding a statement of the risk that 
holding more than 20 percent of a 
portfolio in the security of one entity 
(such as employer securities) may not 
be adequately diversified, and 
‘‘(III) a notice directing the par-
ticipant or beneficiary to the Internet 
website of the Department of Labor 
for sources of information on indi-
vidual investing and diversification. 
‘‘(C) ALTERNATIVE NOTICE.—The require-
ments of subparagraph (A)(i)(II) are met if, at 
least annually and in accordance with require-
ments of the Secretary, the plan— 
VerDate Aug 31 2005 
00:22 Aug 01, 2006
Jkt 049200
PO 00000
Frm 00468
Fmt 6652
Sfmt 6201
E:\BILLS\H4.PCS
H4
ccoleman on PROD1PC71 with BILLS
469 
‘‘(i) updates the information described 
in such paragraph which is provided in the 
pension benefit statement, or 
‘‘(ii) provides in a separate statement 
such information as is necessary to enable 
a participant or beneficiary to determine 
their nonforfeitable vested benefits. 
‘‘(3) DEFINED BENEFIT PLANS.— 
‘‘(A) ALTERNATIVE NOTICE.—In the case 
of a defined benefit plan, the requirements of 
paragraph (1)(B)(i) shall be treated as met 
with respect to a participant if at least once 
each year the administrator provides to the par-
ticipant notice of the availability of the pension 
benefit statement and the ways in which the 
participant may obtain such statement. Such 
notice may be delivered in written, electronic, or 
other appropriate form to the extent such form 
is reasonably accessible to the participant. 
‘‘(B) YEARS IN WHICH NO BENEFITS AC-
CRUE.—The Secretary may provide that years 
in which no employee or former employee bene-
fits (within the meaning of section 410(b) of 
the Internal Revenue Code of 1986) under the 
plan need not be taken into account in deter-
VerDate Aug 31 2005 
00:22 Aug 01, 2006
Jkt 049200
PO 00000
Frm 00469
Fmt 6652
Sfmt 6201
E:\BILLS\H4.PCS
H4
ccoleman on PROD1PC71 with BILLS
470 
mining the 3-year period under paragraph 
(1)(B)(i).’’ 
(2) CONFORMING AMENDMENTS.— 
(A) Section 105 of the Employee Retire-
ment Income Security Act of 1974 (29 U.S.C. 
1025) is amended by striking subsection (d). 
(B) Section 105(b) of such Act (29 U.S.C. 
1025(b)) is amended to read as follows: 
‘‘(b) LIMITATION ON NUMBER OF STATEMENTS.—In 
no case shall a participant or beneficiary of a plan be enti-
tled to more than 1 statement described in subparagraph 
(A)(iii) or (B)(ii) of subsection (a)(1), whichever is appli-
cable, in any 12-month period.’’ 
(C) Section 502(c)(1) of such Act (29 
U.S.C. 1132(c)(1)) is amended by striking ‘‘or 
section 101(f)’’ and inserting ‘‘section 101(f), 
or section 105(a)’’. 
(b) MODEL STATEMENTS.— 
(1) IN
GENERAL.—The Secretary of Labor 
shall, within 1 year after the date of the enactment 
of this section, develop 1 or more model benefit 
statements that are written in a manner calculated 
to be understood by the average plan participant and 
that may be used by plan administrators in com-
VerDate Aug 31 2005 
00:22 Aug 01, 2006
Jkt 049200
PO 00000
Frm 00470
Fmt 6652
Sfmt 6201
E:\BILLS\H4.PCS
H4
ccoleman on PROD1PC71 with BILLS
471 
plying with the requirements of section 105 of the 
Employee Retirement Income Security Act of 1974. 
(2) INTERIM FINAL RULES.—The Secretary of 
Labor may promulgate any interim final rules as the 
Secretary determines appropriate to carry out the 
provisions of this subsection. 
(c) EFFECTIVE DATE.— 
(1) IN GENERAL.—The amendments made by 
this section shall apply to plan years beginning after 
December 31, 2006. 
(2) SPECIAL
RULE
FOR
COLLECTIVELY
BAR-
GAINED AGREEMENTS.—In the case of a plan main-
tained pursuant to 1 or more collective bargaining 
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, 2006’’ the earlier of— 
(A) the later of— 
(i) December 31, 2007, or 
(ii) the date on which the last of such 
collective bargaining agreements termi-
nates (determined without regard to any 
VerDate Aug 31 2005 
00:22 Aug 01, 2006
Jkt 049200
PO 00000
Frm 00471
Fmt 6652
Sfmt 6201
E:\BILLS\H4.PCS
H4
ccoleman on PROD1PC71 with BILLS
472 
extension thereof after such date of enact-
ment), or 
(B) December 31, 2008. 
SEC. 509. NOTICE TO PARTICIPANTS OR BENEFICIARIES OF 
BLACKOUT PERIODS. 
(a) IN GENERAL.—Section 101(i)(8)(B) of the Em-
ployee Retirement Income Security Act of 1974 (29 
U.S.C. 1021(i)(8)(B)) is amended by striking clauses (i) 
through (iv), by redesignating clause (v) as clause (ii), and 
by inserting before clause (ii), as so redesignated, the fol-
lowing new clause: 
‘‘(i) on the first day of the plan 
year— 
‘‘(I) covered only one individual 
(or the individual and the individual’s 
spouse) and the individual (or the in-
dividual and the individual’s spouse) 
owned 100 percent of the plan spon-
sor (whether or not incorporated), or 
‘‘(II) covered only one or more 
partners 
(or 
partners 
and 
their 
spouses) in the plan sponsor, and’’. 
(b) EFFECTIVE DATE.—The amendments made by 
this subsection shall take effect as if included in the provi-
VerDate Aug 31 2005 
00:22 Aug 01, 2006
Jkt 049200
PO 00000
Frm 00472
Fmt 6652
Sfmt 6201
E:\BILLS\H4.PCS
H4
ccoleman on PROD1PC71 with BILLS
473 
sions of section 306 of Public Law 107–204 (116 Stat. 
745 et seq.). 
TITLE VI—INVESTMENT ADVICE, 
PROHIBITED TRANSACTIONS, 
AND FIDUCIARY RULES 
Subtitle A—Investment Advice 
SEC. 601. PROHIBITED TRANSACTION EXEMPTION FOR 
PROVISION OF INVESTMENT ADVICE. 
(a) AMENDMENTS TO THE EMPLOYEE RETIREMENT 
INCOME SECURITY ACT OF 1974.— 
(1) EXEMPTION
FROM
PROHIBITED
TRANS-
ACTIONS.—Section 408(b) of the Employee Retire-
ment Income Security Act of 1974 (29 U.S.C. 
1108(b)) is amended by adding at the end the fol-
lowing new paragraph: 
‘‘(14) Any transaction in connection with the 
provision of investment advice described in section 
3(21)(A)(ii) to a participant or beneficiary of an in-
dividual account plan that permits such participant 
or beneficiary to direct the investment of assets in 
their individual account, if— 
‘‘(A) the transaction is— 
‘‘(i) the provision of the investment 
advice to the participant or beneficiary of 
the plan with respect to a security or other 
VerDate Aug 31 2005 
00:22 Aug 01, 2006
Jkt 049200
PO 00000
Frm 00473
Fmt 6652
Sfmt 6201
E:\BILLS\H4.PCS
H4
ccoleman on PROD1PC71 with BILLS
474 
property available as an investment under 
the plan, 
‘‘(ii) the acquisition, holding, or sale 
of a security or other property available as 
an investment under the plan pursuant to 
the investment advice, or 
‘‘(iii) the direct or indirect receipt of 
fees or other compensation by the fiduciary 
adviser or an affiliate thereof (or any em-
ployee, agent, or registered representative 
of the fiduciary adviser or affiliate) in con-
nection with the provision of the advice or 
in connection with an acquisition, holding, 
or sale of a security or other property 
available as an investment under the plan 
pursuant to the investment advice; and 
‘‘(B) the requirements of subsection (g) 
are met.’’. 
(2) REQUIREMENTS.—Section 408 of such Act 
is amended further by adding at the end the fol-
lowing new subsection: 
‘‘(g) PROVISION OF INVESTMENT ADVICE TO PARTIC-
IPANT AND BENEFICIARIES.— 
‘‘(1) IN GENERAL.—The prohibitions provided 
in section 406 shall not apply to transactions de-
VerDate Aug 31 2005 
00:22 Aug 01, 2006
Jkt 049200
PO 00000
Frm 00474
Fmt 6652
Sfmt 6201
E:\BILLS\H4.PCS
H4
ccoleman on PROD1PC71 with BILLS
475 
scribed in subsection (b)(14) if the investment advice 
provided by a fiduciary adviser is provided under an 
eligible investment advice arrangement. 
‘‘(2) ELIGIBLE INVESTMENT ADVICE ARRANGE-
MENT.—For purposes of this subsection, the term 
‘eligible investment advice arrangement’ means an 
arrangement— 
‘‘(A) which either— 
‘‘(i) provides that any fees (including 
any commission or other compensation) re-
ceived by the fiduciary adviser for invest-
ment advice or with respect to the sale, 
holding, or acquisition of any security or 
other property for purposes of investment 
of plan assets do not vary depending on 
the basis of any investment option selected, 
or 
‘‘(ii) uses a computer model under an 
investment advice program meeting the re-
quirements of paragraph (3) in connection 
with the provision of investment advice by 
a fiduciary adviser to a participant or ben-
eficiary, and 
VerDate Aug 31 2005 
00:22 Aug 01, 2006
Jkt 049200
PO 00000
Frm 00475
Fmt 6652
Sfmt 6201
E:\BILLS\H4.PCS
H4
ccoleman on PROD1PC71 with BILLS
476 
‘‘(B) with respect to which the require-
ments of paragraph (4), (5), (6), (7), (8), and 
(9) are met. 
‘‘(3) INVESTMENT
ADVICE
PROGRAM
USING 
COMPUTER MODEL.— 
‘‘(A) IN GENERAL.—An investment advice 
program meets the requirements of this para-
graph if the requirements of subparagraphs 
(B), (C), and (D) are met. 
‘‘(B) COMPUTER
MODEL.—The require-
ments of this subparagraph are met if the in-
vestment advice provided under the investment 
advice program is provided pursuant to a com-
puter model that— 
‘‘(i) applies generally accepted invest-
ment theories that take into account the 
historic returns of different asset classes 
over defined periods of time, 
‘‘(ii) 
utilizes 
relevant 
information 
about the participant, which may include 
age, life expectancy, retirement age, risk 
tolerance, other assets or sources of in-
come, and preferences as to certain types 
of investments, 
VerDate Aug 31 2005 
00:22 Aug 01, 2006
Jkt 049200
PO 00000
Frm 00476
Fmt 6652
Sfmt 6201
E:\BILLS\H4.PCS
H4
ccoleman on PROD1PC71 with BILLS
477 
‘‘(iii) utilizes prescribed objective cri-
teria to provide asset allocation portfolios 
comprised of investment options available 
under the plan, 
‘‘(iv) operates in a manner that is not 
biased in favor of investments offered by 
the fiduciary adviser or a person with a 
material affiliation or contractual relation-
ship with the fiduciary adviser, and 
‘‘(v) takes into account all investment 
options under the plan in specifying how a 
participant’s account balance should be in-
vested and is not inappropriately weighted 
with respect to any investment option. 
‘‘(C) CERTIFICATION.— 
‘‘(i) IN GENERAL.—The requirements 
of this subparagraph are met with respect 
to any investment advice program if an eli-
gible investment expert certifies, prior to 
the utilization of the computer model and 
in accordance with rules prescribed by the 
Secretary, that the computer model meets 
the requirements of subparagraph (B). 
‘‘(ii) 
RENEWAL
OF
CERTIFI-
CATIONS.—If, as determined under regula-
VerDate Aug 31 2005 
00:22 Aug 01, 2006
Jkt 049200
PO 00000
Frm 00477
Fmt 6652
Sfmt 6201
E:\BILLS\H4.PCS
H4
ccoleman on PROD1PC71 with BILLS
478 
tions prescribed by the Secretary, there are 
material modifications to a computer 
model, the requirements of this subpara-
graph are met only if a certification de-
scribed in clause (i) is obtained with re-
spect to the computer model as so modi-
fied. 
‘‘(iii) ELIGIBLE
INVESTMENT
EX-
PERT.—The term ‘eligible investment ex-
pert’ means any person— 
‘‘(I) which meets such require-
ments as the Secretary may provide, 
and 
‘‘(II) does not bear any material 
affiliation or contractual relationship 
with any investment adviser or a re-
lated person thereof (or any employee, 
agent, or registered representative of 
the investment adviser or related per-
son). 
‘‘(D) 
EXCLUSIVITY
OF
RECOMMENDA-
TION.—The requirements of this subparagraph 
are met with respect to any investment advice 
program if— 
VerDate Aug 31 2005 
00:22 Aug 01, 2006
Jkt 049200
PO 00000
Frm 00478
Fmt 6652
Sfmt 6201
E:\BILLS\H4.PCS
H4
ccoleman on PROD1PC71 with BILLS
479 
‘‘(i) the only investment advice pro-
vided under the program is the advice gen-
erated by the computer model described in 
subparagraph (B), and 
‘‘(ii) any transaction described in sub-
section (b)(14)(B)(ii) occurs solely at the 
direction of the participant or beneficiary. 
Nothing in the preceding sentence shall pre-
clude the participant or beneficiary from re-
questing investment advice other than that de-
scribed in subparagraph (A), but only if such 
request has not been solicited by any person 
connected with carrying out the arrangement. 
‘‘(4) EXPRESS AUTHORIZATION BY SEPARATE 
FIDUCIARY.—The requirements of this paragraph 
are met with respect to an arrangement if the ar-
rangement is expressly authorized by a plan fidu-
ciary other than the person offering the investment 
advice program, any person providing investment op-
tions under the plan, or any affiliate of either. 
‘‘(5) ANNUAL AUDIT.—The requirements of this 
paragraph are met if an independent auditor, who 
has appropriate technical training or experience and 
proficiency and so represents in writing— 
VerDate Aug 31 2005 
00:22 Aug 01, 2006
Jkt 049200
PO 00000
Frm 00479
Fmt 6652
Sfmt 6201
E:\BILLS\H4.PCS
H4
ccoleman on PROD1PC71 with BILLS
480 
‘‘(A) conducts an annual audit of the ar-
rangement for compliance with the require-
ments of this subsection, and 
‘‘(B) following completion of the annual 
audit, issues a written report to the fiduciary 
who authorized use of the arrangement which 
presents its specific findings regarding compli-
ance of the arrangement with the requirements 
of this subsection. 
For purposes of this paragraph, an auditor is con-
sidered independent if it is not related to the person 
offering the arrangement to the plan and is not re-
lated to any person providing investment options 
under the plan. 
‘‘(6) DISCLOSURE.—The requirements of this 
paragraph are met if— 
‘‘(A) the fiduciary adviser provides to a 
participant or a beneficiary before the initial 
provision of the investment advice with regard 
to any security or other property offered as an 
investment option, a written notification (which 
may consist of notification by means of elec-
tronic communication)— 
‘‘(i) of the role of any party that has 
a material affiliation or contractual rela-
VerDate Aug 31 2005 
00:22 Aug 01, 2006
Jkt 049200
PO 00000
Frm 00480
Fmt 6652
Sfmt 6201
E:\BILLS\H4.PCS
H4
ccoleman on PROD1PC71 with BILLS
481 
tionship with the financial adviser in the 
development of the investment advice pro-
gram and in the selection of investment 
options available under the plan, 
‘‘(ii) of the past performance and his-
torical rates of return of the investment 
options available under the plan, 
‘‘(iii) of all fees or other compensation 
relating to the advice that the fiduciary ad-
viser or any affiliate thereof is to receive 
(including compensation provided by any 
third party) in connection with the provi-
sion of the advice or in connection with the 
sale, acquisition, or holding of the security 
or other property, 
‘‘(iv) of any material affiliation or 
contractual relationship of the fiduciary 
adviser or affiliates thereof in the security 
or other property, 
‘‘(v) the manner, and under what cir-
cumstances, any participant or beneficiary 
information provided under the arrange-
ment will be used or disclosed, 
‘‘(vi) of the types of services provided 
by the fiduciary adviser in connection with 
VerDate Aug 31 2005 
00:22 Aug 01, 2006
Jkt 049200
PO 00000
Frm 00481
Fmt 6652
Sfmt 6201
E:\BILLS\H4.PCS
H4
ccoleman on PROD1PC71 with BILLS
482 
the provision of investment advice by the 
fiduciary adviser, 
‘‘(vii) that the adviser is acting as a 
fiduciary of the plan in connection with the 
provision of the advice, and 
‘‘(viii) that a recipient of the advice 
may separately arrange for the provision of 
advice by another adviser, that could have 
no material affiliation with and receive no 
fees or other compensation in connection 
with the security or other property, and 
‘‘(B) at all times during the provision of 
advisory services to the participant or bene-
ficiary, the fiduciary adviser— 
‘‘(i) maintains the information de-
scribed in subparagraph (A) in accurate 
form and in the manner described in para-
graph (8), 
‘‘(ii) provides, without charge, accu-
rate information to the recipient of the ad-
vice no less frequently than annually, 
‘‘(iii) provides, without charge, accu-
rate information to the recipient of the ad-
vice upon request of the recipient, and 
VerDate Aug 31 2005 
00:22 Aug 01, 2006
Jkt 049200
PO 00000
Frm 00482
Fmt 6652
Sfmt 6201
E:\BILLS\H4.PCS
H4
ccoleman on PROD1PC71 with BILLS
483 
‘‘(iv) provides, without charge, accu-
rate information to the recipient of the ad-
vice concerning any material change to the 
information required to be provided to the 
recipient of the advice at a time reasonably 
contemporaneous to the change in informa-
tion. 
‘‘(7) OTHER
CONDITIONS.—The requirements 
of this paragraph are met if— 
‘‘(A) the fiduciary adviser provides appro-
priate disclosure, in connection with the sale, 
acquisition, or holding of the security or other 
property, in accordance with all applicable secu-
rities laws, 
‘‘(B) the sale, acquisition, or holding oc-
curs solely at the direction of the recipient of 
the advice, 
‘‘(C) the compensation received by the fi-
duciary adviser and affiliates thereof in connec-
tion with the sale, acquisition, or holding of the 
security or other property is reasonable, and 
‘‘(D) the terms of the sale, acquisition, or 
holding of the security or other property are at 
least as favorable to the plan as an arm’s 
length transaction would be. 
VerDate Aug 31 2005 
00:22 Aug 01, 2006
Jkt 049200
PO 00000
Frm 00483
Fmt 6652
Sfmt 6201
E:\BILLS\H4.PCS
H4
ccoleman on PROD1PC71 with BILLS
484 
‘‘(8) STANDARDS FOR PRESENTATION OF IN-
FORMATION.— 
‘‘(A) IN GENERAL.—The requirements of 
this paragraph are met if the notification re-
quired to be provided to participants and bene-
ficiaries under paragraph (6)(A) is written in a 
clear and conspicuous manner and in a manner 
calculated to be understood by the average plan 
participant and is sufficiently accurate and 
comprehensive to reasonably apprise such par-
ticipants and beneficiaries of the information 
required to be provided in the notification. 
‘‘(B) MODEL FORM FOR DISCLOSURE OF 
FEES AND OTHER COMPENSATION.—The Sec-
retary shall issue a model form for the disclo-
sure of fees and other compensation required in 
paragraph (6)(A)(iii) which meets the require-
ments of subparagraph (A). 
‘‘(9) MAINTENANCE FOR 6 YEARS OF EVIDENCE 
OF COMPLIANCE.—The requirements of this para-
graph are met if a fiduciary adviser who has pro-
vided advice referred to in paragraph (1) maintains, 
for a period of not less than 6 years after the provi-
sion of the advice, any records necessary for deter-
mining whether the requirements of the preceding 
VerDate Aug 31 2005 
00:22 Aug 01, 2006
Jkt 049200
PO 00000
Frm 00484
Fmt 6652
Sfmt 6201
E:\BILLS\H4.PCS
H4
ccoleman on PROD1PC71 with BILLS