of subsection (d) and ending on the date such re-
quirements to which the failure relates are met or 
the failure is otherwise corrected. 
‘‘(3) SEPARATE TREATMENT OF VIOLATIONS.— 
For purposes of paragraph (1), each violation with 
respect to any applicable defined contribution plan 
shall be treated as a separate violation. 
‘‘(c) LIMITATIONS ON AMOUNT OF TAX.— 
‘‘(1) 
AGGREGATE
LIMITATION.—The 
total 
amount of tax imposed by subsection (a) with re-
spect to any service provider for any calendar year 
shall not exceed $1,000,000. 
‘‘(2) 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 service provider subject to liability 
for the tax under subsection (a) exercised rea-
sonable diligence to meet the requirements of 
subsection (d), and 
‘‘(B) such service provider provides the no-
tice described in subsection (d) during the 90- 
day period beginning on the date such person 
knew, or exercising reasonable diligence would 
have known, that such failure existed. 
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‘‘(3) 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. 
‘‘(d) NOTICE OF FEES AND EXPENSES.— 
‘‘(1) IN GENERAL.—The requirements of this 
subsection are met if the service provider meets the 
requirements of paragraphs (2), (3), (4), and (5). 
‘‘(2) INITIAL DISCLOSURE.—A service provider 
meets the requirements of this paragraph if the serv-
ice provider, prior to entering into (or materially 
modifying) a contract with a plan for the provision 
of plan services, provides the plan administrator 
with the following, in writing: 
‘‘(A) An estimate of— 
‘‘(i) the total fees and expenses ex-
pected to be paid by the plan under the 
contract, including itemization of the fol-
lowing components in the case of a con-
tract that provides for both investment 
management and administration and rec-
ordkeeping; 
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‘‘(ii) annual fees and expenses for in-
vestment management; and 
‘‘(iii) annual fees and expenses for ad-
ministration and recordkeeping. 
‘‘(B) A detailed and itemized list of the 
services to be provided by the service provider 
under the contract. 
‘‘(C) A statement of whether the service 
provider reasonably expects to remit fees and 
expenses expected to be paid by the plan under 
the contract to one or more third-party service 
providers or intermediaries and, if so, a state-
ment of the amount expected to be paid to each 
such third-party and the identity of each such 
third-party. 
‘‘(D) A statement of whether the service 
provider expects to receive compensation from a 
source other than the plan or plan sponsor in 
connection with the services provided to the 
plan and, if so, a statement of the amount ex-
pected to be received from each such source and 
the identity of each such source. 
‘‘(3) PERIODIC
DISCLOSURE.—A service pro-
vider meets the requirements of this paragraph if 
the service provider, within 90 days following the 
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end of each plan year, provides a written statement 
of the following: 
‘‘(A) Fees and expenses paid by the plan 
to the service provider under the arrangement 
during the plan year, including itemization of 
the components described in subparagraphs (A) 
and (C) of paragraph (2). 
‘‘(B) The amount of any compensation re-
ceived by the service provider during the plan 
year from each source other than the plan or 
plan sponsor in connection with the services 
provided to the plan by the service provider and 
the identity of each such source. 
‘‘(4) FORM OF FEE DISCLOSURE.—Fees and ex-
penses may be expressed as a dollar amount or as 
a percentage of assets (or a combination thereof). 
‘‘(5) REASONABLE ESTIMATES PERMITTED.—A 
service provider shall not be treated as failing to sat-
isfy the requirements of this subsection solely be-
cause— 
‘‘(A) the service provider that does not 
separately price services attributable to the 
components described in subparagraph (A) of 
paragraph (2) reasonably allocates fees and ex-
penses among such components; 
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‘‘(B) the service provider uses reasonable 
estimates of expenses, fees and compensation if 
the service provider discloses the basis for such 
estimates; or 
‘‘(C) the service provider discloses amounts 
under subparagraphs (C) and (D) of paragraph 
(2) only to the extent that such amounts are 
expected to exceed $5,000. 
‘‘(6) 
ALTERNATIVE
METHOD
OF
COMPLI-
ANCE.—A service provider shall not be treated as 
failing to satisfy the requirements of paragraph (2) 
if disclosure is made on the basis of calendar years, 
as the plan administrator specifies. 
‘‘(7) REGULATORY AUTHORITY.—The Secretary 
shall issue regulations to carry out this subsection, 
including regulations addressing the appropriate 
classification of fees and expenses under subpara-
graph (A) of paragraph (2). 
‘‘(e) DEFINITIONS.—For purposes of this section— 
‘‘(1) APPLICABLE
DEFINED
CONTRIBUTION 
PLAN.—The term ‘applicable defined contribution 
plan’ means any defined contribution plan described 
in clauses (iii) through (vi) of section 402(c)(8)(B). 
‘‘(2) SERVICE
PROVIDER.—The term ‘service 
provider’ means any person providing services to a 
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plan under a contract. For this purpose, all corpora-
tions that provide services to a plan and are mem-
bers of a controlled group of corporations within the 
meaning of section 1563(a) (determined without re-
gard to subsections (a)(4) and (e)(3)(C) thereof) 
shall be treated as a single service provider.’’. 
(b) CLERICAL AMENDMENT.—The table of sections 
for chapter 43 of such Code, as so amended, is amended 
by adding at the end the following new item: 
‘‘Sec. 4980I. Failure to provide notice of plan fee information to plan adminis-
trators.’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to arrangements entered into (or 
materially modified) on or after the 90th day after the 
date of the enactment of this Act. 
Æ 
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