IB
Union Calendar No. 233
107TH CONGRESS
2D SESSION
H. R. 3762
[Report No. 107–383, Part I]
To amend title I of the Employee Retirement Income Security Act of 1974
and the Internal Revenue Code of 1986 to provide additional protections
to participants and beneficiaries in individual account plans from exces-
sive investment in employer securities and to promote the provision
of retirement investment advice to workers managing their retirement
income assets, and to amend the Securities Exchange Act of 1934 to
prohibit insider trades during any suspension of the ability of plan
participants or beneficiaries to direct investment away from equity securi-
ties of the plan sponsor.
IN THE HOUSE OF REPRESENTATIVES
FEBRUARY 14, 2002
Mr. BOEHNER (for himself, Mr. SAM JOHNSON of Texas, Mr. OXLEY, Mr.
FLETCHER, Mr. PETRI, Mrs. ROUKEMA, Mr. MCKEON, Mr. CASTLE, Mr.
UPTON, Mr. TANCREDO, Mrs. BIGGERT, Mr. KELLER, Mr. CULBERSON,
Mr. CALVERT, Mr. KING, Mr. LATOURETTE, Mr. HILL, Mr. REHBERG,
Mr. BOOZMAN, and Mr. WILSON of South Carolina) introduced the fol-
lowing bill; which was referred to the Committee on Education and the
Workforce, and in addition to the Committees on Ways and Means, and
Financial Services, for a period to be subsequently determined by the
Speaker, in each case for consideration of such provisions as fall within
the jurisdiction of the committee concerned
APRIL 4, 2002
Reported from the Committee on Education and the Workforce with an
amendment
[Strike out all after the enacting clause and insert the part printed in italic]
APRIL 4, 2002
Referral to the Committees on Ways and Means and Financial Services
extended until April 9, 2002
APRIL 9, 2002
Additional sponsors: Mrs. CAPITO, Mr. BARTLETT of Maryland, Mr. LATHAM,
Mr. TIBERI, Mr. GIBBONS, Mr. GREENWOOD, Mr. REYNOLDS, Mr.
ISAKSON, Ms. HART, Mr. SENSENBRENNER, Mr. GREEN of Wisconsin,
Mr. WALSH, Mr. KOLBE, and Mr. SHAYS
APRIL 9, 2002
The Committees on Ways and Means and Financial Services discharged; com-
mitted to the Committee of the Whole House on the State of the Union
and ordered to be printed
[For text of introduced bill, see copy of bill as introduced on February 14, 2002]
A BILL
To amend title I of the Employee Retirement Income Secu-
rity Act of 1974 and the Internal Revenue Code of
1986 to provide additional protections to participants
and beneficiaries in individual account plans from exces-
sive investment in employer securities and to promote
the provision of retirement investment advice to workers
managing their retirement income assets, and to amend
the Securities Exchange Act of 1934 to prohibit insider
trades during any suspension of the ability of plan par-
ticipants or beneficiaries to direct investment away from
equity securities of the plan sponsor.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE AND TABLE OF CONTENTS.
(a) SHORT TITLE.—This Act may be cited as the
‘‘Pension Security Act of 2002’’.
(b) TABLE OF CONTENTS.—The table of contents is as
follows:
Sec. 1. Short title.
TITLE I—IMPROVEMENTS IN PENSION SECURITY
Sec. 101. Periodic pension benefits statements.
Sec. 102. Protection from suspensions, limitations, or restrictions on ability of
participant or beneficiary to direct or diversify plan assets.
Sec. 103. Informational and educational support for pension plan fiduciaries.
Sec. 104. Limitations on restrictions of investments in employer securities.
Sec. 105. Prohibited transaction exemption for the provision of investment advice.
Sec. 106. Study regarding impact on retirement savings of participants and
beneficiaries by requiring fiduciary consultants for individual
account plans.
Sec. 107. Insider trades during pension plan suspension periods prohibited.
Sec. 108. Effective dates of title and related rules.
TITLE II—ADDITIONAL PROVISIONS
Sec. 201. Amendments to Retirement Protection Act of 1994.
Sec. 202. Notice and consent period regarding distributions.
Sec. 203. Annual report dissemination.
Sec. 204. Technical corrections to Saver Act.
Sec. 205. Missing participants.
Sec. 206. Reduced pbgc premium for new plans of small employers.
Sec. 207. Reduction of additional pbgc premium for new and small plans.
Sec. 208. Authorization for PBGC to pay interest on premium overpayment re-
funds.
Sec. 209. Substantial owner benefits in terminated plans.
Sec. 210. Benefit suspension notice.
Sec. 211. Studies.
Sec. 212. Interest rate range for additional funding requirements.
Sec. 213. Provisions relating to plan amendments.
TITLE I—IMPROVEMENTS IN
PENSION SECURITY
SEC. 101. PERIODIC PENSION BENEFITS STATEMENTS.
(a) REQUIREMENTS.—
(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)(1)(A) The administrator of an individual account
plan shall furnish a pension benefit statement—
‘‘(i) to each plan participant at least annually,
‘‘(ii) to each plan beneficiary upon written re-
quest, and
‘‘(iii) in the case of an applicable individual ac-
count plan, to each plan participant (and to each
beneficiary with a right to direct investments) at least
quarterly.
‘‘(B) The administrator of a defined benefit plan shall
furnish a pension benefit statement—
‘‘(i) at least once every 3 years to each partici-
pant with a nonforfeitable accrued benefit who is em-
ployed by the employer maintaining the plan at the
time the statement is furnished to participants, and
‘‘(ii) to a plan participant or plan beneficiary
of the plan upon written request.
‘‘(2) A pension benefit statement under paragraph
(1)—
‘‘(A) 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,
‘‘(B) shall be written in a manner calculated to
be understood by the average plan participant, and
‘‘(C) may be provided in written form or in elec-
tronic or other appropriate form to the extent that
such form is reasonably accessible to the recipient.
‘‘(3)(A) In the case of a defined benefit plan, the re-
quirements of paragraph (1)(B)(i) shall be treated as met
with respect to a participant if the administrator provides
the participant at least once each year with notice of the
availability of the pension benefit statement and the ways
in which the participant may obtain such statement. Such
notice shall be provided in written, electronic, or other ap-
propriate form, and may be included with other commu-
nications to the participant if done in a manner reasonably
designed to attract the attention of the participant.
‘‘(B) The Secretary may provide that years in which
no employee or former employee benefits (within the mean-
ing of section 410(b) of the Internal Revenue Code of 1986)
under the plan need not be taken into account in deter-
mining the 3-year period under paragraph (1)(B)(i).’’.
(2) CONFORMING AMENDMENTS.—
(A) Section 105 of the Employee Retirement
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) In no case shall a participant or beneficiary of
a plan be entitled to more than one statement described in
clause (i) or (ii) of subsection (a)(1)(A) or clause (i) or (ii)
of subsection (a)(1)(B), whichever is applicable, in any 12-
month period. If such report is required under subsection
(a) to be furnished at least quarterly, the requirements of
the preceding sentence shall be applied with respect to each
quarter in lieu of the 12-month period.’’.
(3) EFFECTIVE
DATE
OF
SUBSECTION.—The
amendments made by this subsection shall take effect
for plan years beginning on or after January 1, 2003.
(b) INFORMATION REQUIRED FROM APPLICABLE INDI-
VIDUAL ACCOUNT PLANS.—Section 105 of such Act (as
amended by subsection (a)) is amended further by adding
at the end the following new subsection:
‘‘(d)(1) The statements required to be provided at least
quarterly under subsection (a) shall include (together with
the information required in subsection (a)) the following:
‘‘(A) the value of investments allocated to the in-
dividual account, including the value of any assets
held in the form of employer securities, without re-
gard to whether such securities were contributed by
the plan sponsor or acquired at the direction of the
plan or of the participant or beneficiary, and an ex-
planation of any limitations or restrictions on the
right of the participant or beneficiary to direct an in-
vestment; and
‘‘(B) an explanation, written in a manner cal-
culated to be understood by the average plan partici-
pant, of the importance, for the long-term retirement
security of participants and beneficiaries, of a well-
balanced and diversified investment portfolio, includ-
ing a discussion of the risk of holding substantial por-
tions of a portfolio in the security of any one entity,
such as employer securities.
‘‘(2) The value of any employer securities that are not
readily tradable on an established securities market that is
required to be reported under paragraph (1)(A) may be de-
termined by using the most recent valuation of the employer
securities.
‘‘(3) The Secretary shall issue guidance and model no-
tices which meet the requirements of this subsection.’’.
(c) DEFINITION OF APPLICABLE INDIVIDUAL ACCOUNT
PLAN.—Section 3 of such Act (29 U.S.C. 1002) is amended
by adding at the end the following new subsection:
‘‘(42) The term ‘applicable individual account plan’
means any individual account plan, except that such term
does not include an employee stock ownership plan (within
the meaning of section 4975(e)(7) of the Internal Revenue
Code of 1986) unless there are any contributions to such
plan (or earnings thereunder) held within such plan that
are subject to subsection (k)(3) or (m)(2) of section 401 of
the Internal Revenue Code of 1986.’’.
(d) CIVIL PENALTIES
FOR FAILURE TO PROVIDE
QUARTERLY BENEFIT STATEMENTS.—Section 502 of such
Act (29 U.S.C. 1132) is amended—
(1) in subsection (a)(6), by striking ‘‘(5), or (6)’’
and inserting ‘‘(5), (6), or (7)’’;
(2) by redesignating paragraph (7) of subsection
(c) as paragraph (8); and
(3) by inserting after paragraph (6) of sub-
section (c) the following new paragraph:
‘‘(7) The Secretary may assess a civil penalty against
any plan administrator of up to $1,000 a day from the
date of such plan administrator’s failure or refusal to pro-
vide participants or beneficiaries with a benefit statement
on at least a quarterly basis in accordance with section
105(a)(1)(A)(iii).’’.
(e) MODEL STATEMENTS.—The Secretary of Labor
shall, not later than January 1, 2003, issue initial guidance
and a model benefit statement, written in a manner cal-
culated to be understood by the average plan participant,
that may be used by plan administrators in complying with
the requirements of section 105 of the Employee Retirement
Income Security Act of 1974. The Secretary may promul-
gate such interim final rules as the Secretary determines
are appropriate to carry out the amendments made by this
section.
SEC. 102. PROTECTION FROM SUSPENSIONS, LIMITATIONS,
OR RESTRICTIONS ON ABILITY OF PARTICI-
PANT OR BENEFICIARY TO DIRECT OR DIVER-
SIFY PLAN ASSETS.
(a) NOTICE REQUIREMENTS.—
(1) IN GENERAL.—Section 101 of the Employee
Retirement Income Security Act of 1974 (29 U.S.C.
1021) is amended—
(A) by redesignating the second subsection
(h) as subsection (j); and
(B) by inserting after the first subsection
(h) the following new subsection:
‘‘(i) NOTICE OF SUSPENSION, LIMITATION, OR RE-
STRICTION ON ABILITY OF PARTICIPANT OR BENEFICIARY
TO
DIRECT
INVESTMENTS
IN
INDIVIDUAL
ACCOUNT
PLAN.—
‘‘(1) IN GENERAL.—In the case of any action
having the effect of temporarily suspending, limiting,
or restricting any ability of participants or bene-
ficiaries under an applicable individual account
plan, which is otherwise available under the terms of
such plan, to direct or diversify assets credited to
their accounts, if such suspension, limitation, or re-
striction is for any period of more than 3 consecutive
calendar days, the plan administrator shall—
‘‘(A) in advance of taking such action, de-
termine, in accordance with the requirements of
part 4, that the expected period of suspension,
limitation, or restriction is reasonable, and
‘‘(B) after making the determination under
subparagraph (A) and in advance of taking such
action, notify the plan participants and bene-
ficiaries of such action in accordance with this
subsection.
‘‘(2) NOTICE REQUIREMENTS.—
‘‘(A) IN GENERAL.—The notices described in
paragraph (1) shall be written in a manner cal-
culated to be understood by the average plan
participant and shall include—
‘‘(i) the reasons for the suspension,
limitation, or restriction,
‘‘(ii) an identification of the invest-
ments affected,
‘‘(iii) the expected period of the suspen-
sion, limitation, or restriction,
‘‘(iv) a statement that the plan admin-
istrator has evaluated the reasonableness of
the expected period of suspension, limita-
tion, or restriction,
‘‘(v) a statement that the participant
or beneficiary should evaluate the appro-
priateness of their current investment deci-
sions in light of their inability to direct or
diversify assets credited to their accounts
during the expected period of suspension,
limitation, or restriction, and
‘‘(vi) such other matters as the Sec-
retary may include in the model notices
issued under subparagraph (E).
‘‘(B) PROVISION
OF
NOTICE.—Except as
otherwise provided in this subsection, notices de-
scribed in paragraph (1) shall be furnished to all
participants and beneficiaries under the plan at
least 30 days in advance of the action sus-
pending, limiting, or restricting the ability of
the participants or beneficiaries to direct or di-
versify assets.
‘‘(C) EXCEPTION
TO
30-DAY
NOTICE
RE-
QUIREMENT.—In any case in which—
‘‘(i) a fiduciary of the plan determines,
in writing, that a deferral of the suspension,
limitation, or restriction would violate the
requirements of subparagraph (A) or (B) of
section 404(a)(1), or
‘‘(ii) the inability to provide the 30-
day advance notice is due to events that
were unforeseeable or circumstances beyond
the reasonable control of the plan adminis-
trator,
subparagraph (B) shall not apply, and the notice
shall be furnished to all participants and bene-
ficiaries under the plan as soon as reasonably
possible under the circumstances.
‘‘(D) WRITTEN
NOTICE.—The notice re-
quired to be provided under this subsection shall
be in writing, except that such notice may be in
electronic or other form to the extent that such
form is reasonably accessible to the recipient.
‘‘(E) MODEL NOTICES.—The Secretary shall
issue model notices which meet the requirements
of this paragraph.
‘‘(3) EXCEPTION
FOR
SUSPENSIONS, LIMITA-
TIONS, OR
RESTRICTIONS
WITH
LIMITED
APPLICA-
BILITY.—In any case in which the suspension, limita-
tion, or restriction described in paragraph (1)—
‘‘(A) applies only to 1 or more individuals,
each of whom is the participant, an alternate
payee (as defined in section 206(d)(3)(K)), or
any other beneficiary pursuant to a qualified do-
mestic relations order (as defined in section
206(d)(3)(B)(i)), or
‘‘(B) applies only to 1 or more participants
or beneficiaries in connection with a merger, ac-
quisition, divestiture, or similar transaction in-
volving the plan or plan sponsor and occurs sole-
ly in connection with becoming or ceasing to be
a participant or beneficiary under the plan by
reason of such merger, acquisition, divestiture, or
transaction,
the requirement of this subsection that the notice be
provided to all participants and beneficiaries shall be
treated as met if the notice required under paragraph
(1) is provided to all the individuals referred to in
subparagraph (A) or (B) to whom the suspension,
limitation, or restriction applies as soon as reason-
ably practicable in advance of the suspension, limita-
tion, or restriction.
‘‘(4) CHANGES IN EXPECTED PERIOD OF SUSPEN-
SION, LIMITATION, OR RESTRICTION.—If, following the
furnishing of the notice pursuant to this subsection,
there is a change in the expected period of the suspen-
sion, limitation, or restriction on the right of a par-
ticipant or beneficiary to direct or diversify assets,
the administrator shall provide affected participants
and beneficiaries notice of the change as soon as rea-
sonably practicable in advance of the change. Such
notice shall meet the requirements of subparagraphs
(A) and (D) of paragraph (2) in relation to the ex-
tended suspension, limitation, or restriction.
‘‘(5) REGULATORY EXCEPTIONS.—The Secretary
may provide by regulation for additional exceptions
to the requirements of this subsection which the Sec-
retary determines are in the interests of participants
and beneficiaries.
‘‘(6) GUIDANCE AND MODEL NOTICES.—The Sec-
retary shall issue guidance and model notices which
meet the requirements of this subsection.’’.
(2) ISSUANCE OF INITIAL GUIDANCE AND MODEL
NOTICE.—The Secretary of Labor shall issue initial
guidance and a model notice pursuant to section
101(i)(6) of the Employee Retirement Income Secu-
rity Act of 1974 (as added by this subsection) not
later than January 1, 2003. The Secretary may pro-
mulgate such interim final rules as the Secretary de-
termines are appropriate to carry out the amend-
ments made by this section.
(b) CIVIL PENALTIES FOR FAILURE TO PROVIDE NO-
TICE.—Section 502 of such Act (as amended by section
2(b)) is amended further—
(1) in subsection (a)(6), by striking ‘‘(6), or (7)’’
and inserting ‘‘(6), (7), or (8)’’;
(2) by redesignating paragraph (8) of subsection
(c) as paragraph (9); and
(3) by inserting after paragraph (7) of sub-
section (c) the following new paragraph:
‘‘(8) The Secretary may assess a civil penalty against
a plan administrator of up to $100 a day from the date
of the plan administrator’s failure or refusal to provide no-
tice to participants and beneficiaries in accordance with
section 101(i). For purposes of this paragraph, each viola-
tion with respect to any single participant or beneficiary,
shall be treated as a separate violation.’’.
(c) INAPPLICABILITY OF RELIEF FROM FIDUCIARY LI-
ABILITY DURING SUSPENSION OF ABILITY OF PARTICIPANT
OR
BENEFICIARY
TO
DIRECT
INVESTMENTS.—Section
404(c)(1) of such Act (29 U.S.C. 1104(c)(1)) is amended—
(1) by redesignating subparagraphs (A) and (B)
as clauses (i) and (ii), respectively, and by inserting
‘‘(A)’’ after ‘‘(c)(1)’’;
(2) in subparagraph (A)(ii) (as redesignated by
paragraph (1)), by inserting before the period the fol-
lowing: ‘‘, except that this clause shall not apply in
connection with such participant or beneficiary for
any period during which the ability of such partici-
(A)(ii) to the extent such limitation or restriction is dis-
closed to participants or beneficiaries through the summary
plan description or materials describing specific investment
alternatives under the plan.’’.
SEC. 103. INFORMATIONAL AND EDUCATIONAL SUPPORT
FOR PENSION PLAN FIDUCIARIES.
Section 404 of the Employee Retirement Income Secu-
rity Act of 1974 (29 U.S.C. 1104) is amended by adding
at the end the following new subsection:
‘‘(e) The Secretary shall establish a program under
which information and educational resources shall be made
available on an ongoing basis to persons serving as fidu-
ciaries under employee pension benefit plans so as to assist
such persons in diligently and effectively carrying out their
fiduciary duties in accordance with this part.’’.
SEC. 104. LIMITATIONS ON RESTRICTIONS OF INVEST-
MENTS IN EMPLOYER SECURITIES.
(a) AMENDMENTS TO THE EMPLOYEE RETIREMENT
INCOME SECURITY ACT OF 1974.—
(1) IN GENERAL.—Section 407 of the Employee
Retirement Income Security Act of 1974 (29 U.S.C.
1107) is amended by adding at the end the following
new subsection:
‘‘(g)(1) An applicable individual account plan which
holds employer securities that are readily tradable on an
established securities market may not acquire or hold any
employer securities with respect to which there is any re-
striction on divestment by a participant or beneficiary, un-
less the plan provides that the restriction—
‘‘(A) is not applicable on or after a date which
is not later than the date on which the participant
has completed 3 years of service (as defined in section
203(b)(2)) with the employer or (if the plan so pro-
vides) 3 years of participation (as defined in section
204(b)(4)) in the plan, or
‘‘(B) is not applicable, with respect to any em-
ployer security allocated to the individual account
during any calendar quarter, after a date which is
not later than 3 years after the end of such quarter.
‘‘(2)(A) For purposes of paragraph (1), the term ‘re-
striction on divestment’ includes—
‘‘(i) any failure to offer a broad range of invest-
ment alternatives (as may be determined by the Sec-
retary) to which a participant or beneficiary may di-
rect the proceeds from the divestment of employer se-
curities, and
‘‘(ii) any restriction on the ability of a partici-
pant or beneficiary to choose from a broad range of
otherwise available investment options (as may be de-
termined by the Secretary) to which such proceeds
may be so directed, other than a restriction limiting
such ability to so choose to a periodic, reasonable op-
portunity to so choose occurring no less frequently
than on a quarterly basis.’’.
(2) CLERICAL AMENDMENTS.—The heading for
section 407 of such Act is amended by striking ‘‘10
PERCENT’’ and the item relating to such section in the
table of contents in section 1 of such Act is amended
by striking ‘‘10 percent’’.
(3) TRANSITION RULE.—
(A) IN GENERAL.—The amendments made
by this subsection shall apply only with respect
to assets acquired on or after the effective date of
such amendments. In the case of any applicable
individual account plan which, on such effective
date, holds assets acquired before such date on
which there is any restriction on divestment by
a participant or beneficiary, such plan shall, be-
fore the applicable effective date, provide for the
removal of all such restrictions on the applicable
percentage of such assets held on such date.
(B) APPLICABLE
PERCENTAGE.—For pur-
poses of subparagraph (A), the applicable per-
centage shall be as follows:
Plan years beginning in:
Applicable percentage:
2003 ................................................................................................
20 percent
2004 ................................................................................................
40 percent
2005 ................................................................................................
60 percent
2006 ................................................................................................
80 percent
2007 or thereafter ..........................................................................
100 percent.
(b) AMENDMENTS TO THE INTERNAL REVENUE CODE
OF 1986.—
(1) IN GENERAL.—Subsection (a) of section 401
of the Internal Revenue Code of 1986 (relating to re-
quirements for qualification) is amended by inserting
after paragraph (34) the following new paragraph:
‘‘(35) LIMITATIONS ON RESTRICTIONS UNDER AP-
PLICABLE DEFINED CONTRIBUTION PLANS ON INVEST-
MENTS IN EMPLOYER SECURITIES.—
‘‘(A) IN GENERAL.—A trust forming a part
of an applicable defined contribution plan shall
not constitute a qualified trust under this sub-
section if the plan acquires or holds any em-
ployer securities with respect to which there is
any restriction on divestment by a participant
or beneficiary on or after the date on which the
participant has completed 3 years of participa-
tion (as defined in section 411(b)(4)) under the
plan or (if the plan so provides) 3 years of serv-
ice (as defined in section 411(a)(5)) with the em-
ployer.
‘‘(B) DEFINITIONS.—For purposes of sub-
paragraph (A)—
‘‘(i) APPLICABLE DEFINED CONTRIBU-
TION PLAN.—The term ‘applicable defined
contribution plan’ means any defined con-
tribution plan, except that such term does
not include an employee stock ownership
plan (as defined in section 4975(e)(7)) un-
less there are any contributions to such plan
(or earnings thereunder) held within such
plan that are subject to subsections (k)(3) or
(m)(2).
‘‘(ii) RESTRICTION ON DIVESTMENT.—
The 
term 
‘restriction 
on 
divestment’
includes—
‘‘(I) any failure to offer at least 3
diversified investment options in which
a participant or beneficiary may di-
rect the proceeds from the divestment of
employer securities, and
‘‘(II) any restriction on the abil-
ity of a participant or beneficiary to
choose from all otherwise available in-
vestment options in which such pro-
ceeds may be so directed.’’.
(2) 
CONFORMING
AMENDMENT.—Section
401(a)(28)(B) of such Code (relating to diversification
of investments) is amended by adding at the end the
following new clause:
‘‘(v) EXCEPTION.—This subparagraph
shall not apply to an applicable defined
contribution plan (as defined in paragraph
(35)(B)(i)).’’.
SEC. 105. PROHIBITED TRANSACTION EXEMPTION FOR THE
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 Retirement
Income Security Act of 1974 (29 U.S.C. 1108(b)) is
amended by adding at the end the following new
paragraph:
‘‘(14)(A) Any transaction described in subpara-
graph (B) in connection with the provision of invest-
ment advice described in section 3(21)(A)(ii), in any
case in which—
‘‘(i) the investment of assets of the plan is
subject to the direction of plan participants or
beneficiaries,
‘‘(ii) the advice is provided to the plan or
a participant or beneficiary of the plan by a fi-
duciary adviser in connection with any sale, ac-
quisition, or holding of a security or other prop-
erty for purposes of investment of plan assets,
and
‘‘(iii) the requirements of subsection (g) are
met in connection with the provision of the ad-
vice.
‘‘(B) The transactions described in this subpara-
graph are the following:
‘‘(i) the provision of the advice to the plan,
participant, or beneficiary;
‘‘(ii) the sale, acquisition, or holding of a
security or other property (including any lend-
ing of money or other extension of credit associ-
ated with the sale, acquisition, or holding of a
security or other property) pursuant to the ad-
vice; and
‘‘(iii) the direct or indirect receipt of fees or
other compensation by the fiduciary adviser or
an affiliate thereof (or any employee, agent, or
registered representative of the fiduciary adviser
or affiliate) in connection with the provision of
the advice or in connection with a sale, acquisi-
tion, or holding of a security or other property
pursuant to the advice.’’.
(2) REQUIREMENTS.—Section 408 of such Act is
amended further by adding at the end the following
new subsection:
‘‘(g) REQUIREMENTS RELATING TO PROVISION OF IN-
VESTMENT ADVICE BY FIDUCIARY ADVISERS.—
‘‘(1) IN GENERAL.—The requirements of this sub-
section are met in connection with the provision of
investment advice referred to in section 3(21)(A)(ii),
provided to an employee benefit plan or a participant
or beneficiary of an employee benefit plan by a fidu-
ciary adviser with respect to the plan in connection
with any sale, acquisition, or holding of a security or
other property for purposes of investment of amounts
held by the plan, if—
‘‘(A) in the case of the initial provision of
the advice with regard to the security or other
property by the fiduciary adviser to the plan,
participant, or beneficiary, the fiduciary adviser
provides to the recipient of the advice, at a time
reasonably contemporaneous with the initial pro-
vision of the advice, a written notification
(which may consist of notification by means of
electronic communication)—
‘‘(i) 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,
‘‘(ii) of any material affiliation or
contractual relationship of the fiduciary ad-
viser or affiliates thereof in the security or
other property,
‘‘(iii) of any limitation placed on the
scope of the investment advice to be pro-
vided by the fiduciary adviser with respect
to any such sale, acquisition, or holding of
a security or other property,
‘‘(iv) of the types of services provided
by the fiduciary adviser in connection with
the provision of investment advice by the fi-
duciary adviser,
‘‘(v) that the adviser is acting as a fi-
duciary of the plan in connection with the
provision of the advice, and
‘‘(vi) 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.
‘‘(B) the fiduciary adviser provides appro-
priate disclosure, in connection with the sale, ac-
quisition, or holding of the security or other
property, in accordance with all applicable secu-
rities laws,
‘‘(C) the sale, acquisition, or holding occurs
solely at the direction of the recipient of the ad-
vice,
‘‘(D) the compensation received by the fidu-
ciary adviser and affiliates thereof in connection
with the sale, acquisition, or holding of the secu-
rity or other property is reasonable, and
‘‘(E) 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.
‘‘(2) STANDARDS FOR PRESENTATION OF INFOR-
MATION.—
‘‘(A) IN
GENERAL.—The notification re-
quired to be provided to participants and bene-
ficiaries under paragraph (1)(A) shall be written
in a clear and conspicuous manner and in a
manner calculated to be understood by the aver-
age plan participant and shall be sufficiently ac-
curate and comprehensive to reasonably apprise
such participants and beneficiaries of the infor-
mation required to be provided in the notifica-
tion.
‘‘(B) MODEL
FORM
FOR
DISCLOSURE
OF
FEES
AND
OTHER
COMPENSATION.—The Sec-
retary shall issue a model form for the disclosure
of fees and other compensation required in para-
graph (1)(A)(i) which meets the requirements of
subparagraph (A).
‘‘(3) EXEMPTION CONDITIONED ON CONTINUED
AVAILABILITY
OF
REQUIRED
INFORMATION
ON
RE-
QUEST FOR 1 YEAR.—The requirements of paragraph
(1)(A) shall be deemed not to have been met in con-
nection with the initial or any subsequent provision
of advice described in paragraph (1) to the plan, par-
ticipant, or beneficiary if, at any time during the
provision of advisory services to the plan, partici-
pant, or beneficiary, the fiduciary adviser fails to
maintain the information described in clauses (i)
through (iv) of subparagraph (A) in currently accu-
rate form and in the manner described in paragraph
(2) or fails—
‘‘(A) to provide, without charge, such cur-
rently accurate information to the recipient of
the advice no less than annually,
‘‘(B) to make such currently accurate infor-
mation available, upon request and without
charge, to the recipient of the advice, or
‘‘(C) in the event of a material change to
the information described in clauses (i) through
(iv) of paragraph (1)(A), to provide, without
charge, such currently accurate information to
the recipient of the advice at a time reasonably
contemporaneous to the material change in in-
formation.
‘‘(4) MAINTENANCE FOR 6 YEARS OF EVIDENCE
OF COMPLIANCE.—A fiduciary adviser referred to in
paragraph (1) who has provided advice referred to in
such paragraph shall, for a period of not less than 6
years after the provision of the advice, maintain any
records necessary for determining whether the require-
ments of the preceding provisions of this subsection
and of subsection (b)(14) have been met. A trans-
action prohibited under section 406 shall not be con-
sidered to have occurred solely because the records are
lost or destroyed prior to the end of the 6-year period
due to circumstances beyond the control of the fidu-
ciary adviser.
‘‘(5) EXEMPTION FOR PLAN SPONSOR AND CER-
TAIN OTHER FIDUCIARIES.—
‘‘(A) IN
GENERAL.—Subject to subpara-
graph (B), a plan sponsor or other person who
is a fiduciary (other than a fiduciary adviser)
shall not be treated as failing to meet the re-
quirements of this part solely by reason of the
provision of investment advice referred to in sec-
tion 3(21)(A)(ii) (or solely by reason of con-
tracting for or otherwise arranging for the provi-
sion of the advice), if—
‘‘(i) the advice is provided by a fidu-
ciary adviser pursuant to an arrangement
between the plan sponsor or other fiduciary
and the fiduciary adviser for the provision
by the fiduciary adviser of investment ad-
vice referred to in such section,
‘‘(ii) the terms of the arrangement re-
quire compliance by the fiduciary adviser
with the requirements of this subsection,
and
‘‘(iii) the terms of the arrangement in-
clude a written acknowledgment by the fidu-
ciary adviser that the fiduciary adviser is a
fiduciary of the plan with respect to the
provision of the advice.
‘‘(B) CONTINUED DUTY OF PRUDENT SELEC-
TION OF ADVISER AND PERIODIC REVIEW.—Noth-
ing in subparagraph (A) shall be construed to
exempt a plan sponsor or other person who is a
fiduciary from any requirement of this part for
the prudent selection and periodic review of a fi-
duciary adviser with whom the plan sponsor or
other person enters into an arrangement for the
provision of advice referred to in section
3(21)(A)(ii). The plan sponsor or other person
who is a fiduciary has no duty under this part
to monitor the specific investment advice given
by the fiduciary adviser to any particular re-
cipient of the advice.
‘‘(C) AVAILABILITY OF PLAN ASSETS FOR
PAYMENT
FOR
ADVICE.—Nothing in this part
shall be construed to preclude the use of plan as-
sets to pay for reasonable expenses in providing
investment 
advice 
referred 
to 
in 
section
3(21)(A)(ii).
‘‘(6) DEFINITIONS.—For purposes of this sub-
section and subsection (b)(14)—
‘‘(A) FIDUCIARY ADVISER.—The term ‘fidu-
ciary adviser’ means, with respect to a plan, a
person who is a fiduciary of the plan by reason
of the provision of investment advice by the per-
son to the plan or to a participant or beneficiary
and who is—
‘‘(i) registered as an investment ad-
viser under the Investment Advisers Act of
1940 (15 U.S.C. 80b–1 et seq.) or under the
laws of the State in which the fiduciary
maintains its principal office and place of
business,
‘‘(ii) a bank or similar financial insti-
tution referred to in section 408(b)(4), but
only if the advice is provided through a
trust department of the bank or similar fi-
nancial institution which is subject to peri-
odic examination and review by Federal or
State banking authorities,
‘‘(iii) an insurance company qualified
to do business under the laws of a State,
‘‘(iv) a person registered as a broker or
dealer under the Securities Exchange Act of
1934 (15 U.S.C. 78a et seq.),
‘‘(v) an affiliate of a person described
in any of clauses (i) through (iv), or
‘‘(vi) an employee, agent, or registered
representative of a person described in any
of clauses (i) through (v) who satisfies the
requirements of applicable insurance, bank-
ing, and securities laws relating to the pro-
vision of the advice.
‘‘(B) AFFILIATE.—The term ‘affiliate’ of
another entity means an affiliated person of the
entity (as defined in section 2(a)(3) of the In-
vestment Company Act of 1940 (15 U.S.C. 80a–
2(a)(3))).
‘‘(C) REGISTERED REPRESENTATIVE.—The
term ‘registered representative’ of another entity
means a person described in section 3(a)(18) of
the Securities Exchange Act of 1934 (15 U.S.C.
78c(a)(18)) (substituting the entity for the broker
or dealer referred to in such section) or a person
described in section 202(a)(17) of the Investment
Advisers Act of 1940 (15 U.S.C. 80b–2(a)(17))
(substituting the entity for the investment ad-
viser referred to in such section).’’.
(b) AMENDMENTS TO THE INTERNAL REVENUE CODE
OF 1986.—
(1) EXEMPTION
FROM
PROHIBITED
TRANS-
ACTIONS.—Subsection (d) of section 4975 of the Inter-
nal Revenue Code of 1986 (relating to exemptions
from tax on prohibited transactions) is amended—
(A) in paragraph (14), by striking ‘‘or’’ at
the end;
(B) in paragraph (15), by striking the pe-
riod at the end and inserting ‘‘; or’’; and
(C) by adding at the end the following new
paragraph:
‘‘(16) any transaction described in subsection
(f)(7)(A) in connection with the provision of invest-
ment advice described in subsection (e)(3)(B), in any
case in which—
‘‘(A) the investment of assets of the plan is
subject to the direction of plan participants or
beneficiaries,
‘‘(B) the advice is provided to the plan or
a participant or beneficiary of the plan by a fi-
duciary adviser in connection with any sale, ac-
quisition, or holding of a security or other prop-
erty for purposes of investment of plan assets,
and
‘‘(C) the requirements of subsection (f)(7)(B)
are met in connection with the provision of the
advice.’’.
(2) ALLOWED
TRANSACTIONS
AND
REQUIRE-
MENTS.—Subsection (f) of such section 4975 (relating
to other definitions and special rules) is amended by
adding at the end the following new paragraph:
‘‘(7) PROVISIONS RELATING TO INVESTMENT AD-
VICE PROVIDED BY FIDUCIARY ADVISERS.—
‘‘(A) TRANSACTIONS
ALLOWABLE
IN
CON-
NECTION WITH INVESTMENT ADVICE PROVIDED
BY FIDUCIARY ADVISERS.—The transactions re-
ferred to in subsection (d)(16), in connection
with the provision of investment advice by a fi-
duciary adviser, are the following:
‘‘(i) the provision of the advice to the
plan, participant, or beneficiary;
‘‘(ii) the sale, acquisition, or holding of
a security or other property (including any
lending of money or other extension of cred-
it associated with the sale, acquisition, or
holding of a security or other property)
pursuant to the advice; and
‘‘(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 connec-
tion with the provision of the advice or in
connection with a sale, acquisition, or hold-
ing of a security or other property pursuant
to the advice.
‘‘(B) REQUIREMENTS RELATING TO PROVI-
SION OF INVESTMENT ADVICE BY FIDUCIARY AD-
VISERS.—The requirements of this subparagraph
(referred to in subsection (d)(16)(C)) are met in
connection with the provision of investment ad-
vice referred to in subsection (e)(3)(B), provided
to a plan or a participant or beneficiary of a
plan by a fiduciary adviser with respect to the
plan in connection with any sale, acquisition, or
holding of a security or other property for pur-
poses of investment of amounts held by the plan,
if—
‘‘(i) in the case of the initial provision
of the advice with regard to the security or
other property by the fiduciary adviser to
the plan, participant, or beneficiary, the fi-
duciary adviser provides to the recipient of
the advice, at a time reasonably contem-
poraneous with the initial provision of the
advice, a written notification (which may
consist of notification by means of electronic
communication)—
‘‘(I) of all fees or other compensa-
tion relating to the advice that the fi-
duciary adviser or any affiliate thereof
is to receive (including compensation
provided by any third party) in con-
nection with the provision of the advice
or in connection with the sale, acquisi-
tion, or holding of the security or other
property,
‘‘(II) of any material affiliation
or contractual relationship of the fidu-
ciary adviser or affiliates thereof in the
security or other property,
‘‘(III) of any limitation placed on
the scope of the investment advice to be
provided by the fiduciary adviser with
respect to any such sale, acquisition, or
holding of a security or other property,
‘‘(IV) of the types of services pro-
vided by the fiduciary advisor in con-
nection with the provision of invest-
ment advice by the fiduciary adviser,
and
‘‘(V) that the adviser is acting as
a fiduciary of the plan in connection
with the provision of the advice,
‘‘(ii) the fiduciary adviser provides ap-
propriate disclosure, in connection with the
sale, acquisition, or holding of the security
or other property, in accordance with all
applicable securities laws,
‘‘(iii) the sale, acquisition, or holding
occurs solely at the direction of the recipient
of the advice,
‘‘(iv) the compensation received by the
fiduciary adviser and affiliates thereof in
connection with the sale, acquisition, or
holding of the security or other property is
reasonable, and
‘‘(v) 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.
‘‘(C) STANDARDS FOR PRESENTATION OF IN-
FORMATION.—The notification required to be
provided to participants and beneficiaries under
subparagraph (B)(i) shall be written in a clear
and conspicuous manner and in a manner cal-
culated to be understood by the average plan
participant and shall be sufficiently accurate
and comprehensive to reasonably apprise such
participants and beneficiaries of the information
required to be provided in the notification.
‘‘(D) EXEMPTION CONDITIONED ON MAKING
REQUIRED INFORMATION AVAILABLE ANNUALLY,
ON REQUEST, AND IN THE EVENT OF MATERIAL
CHANGE.—The requirements of subparagraph
(B)(i) shall be deemed not to have been met in
connection with the initial or any subsequent
provision of advice described in subparagraph
(B) to the plan, participant, or beneficiary if,
at any time during the provision of advisory
services to the plan, participant, or beneficiary,
the fiduciary adviser fails to maintain the infor-
mation described in subclauses (I) through (IV)
of subparagraph (B)(i) in currently accurate
form and in the manner required by subpara-
graph (C), or fails—
‘‘(i) to provide, without charge, such
currently accurate information to the re-
cipient of the advice no less than annually,
‘‘(ii) to make such currently accurate
information available, upon request and
without charge, to the recipient of the ad-
vice, or
‘‘(iii) in the event of a material change
to the information described in subclauses
(I) through (IV) of subparagraph (B)(i), to
provide, without charge, such currently ac-
curate information to the recipient of the
advice at a time reasonably contempora-
neous to the material change in informa-
tion.
‘‘(E) MAINTENANCE FOR 6 YEARS OF EVI-
DENCE OF COMPLIANCE.—A fiduciary adviser re-
ferred to in subparagraph (B) who has provided
advice referred to in such subparagraph shall, for
a period of not less than 6 years after the provi-
sion of the advice, maintain any records nec-
essary for determining whether the requirements
of the preceding provisions of this paragraph
and of subsection (d)(16) have been met. A trans-
action prohibited under subsection (c)(1) shall
not be considered to have occurred solely because
the records are lost or destroyed prior to the end
of the 6-year period due to circumstances beyond
the control of the fiduciary adviser.
‘‘(F) EXEMPTION FOR PLAN SPONSOR AND
CERTAIN OTHER FIDUCIARIES.—A plan sponsor
or other person who is a fiduciary (other than a
fiduciary adviser) shall not be treated as failing
to meet the requirements of this section solely by
reason of the provision of investment advice re-
ferred to in subsection (e)(3)(B) (or solely by
reason of contracting for or otherwise arranging
for the provision of the advice), if—
‘‘(i) the advice is provided by a fidu-
ciary adviser pursuant to an arrangement
between the plan sponsor or other fiduciary
and the fiduciary adviser for the provision
by the fiduciary adviser of investment ad-
vice referred to in such section,
‘‘(ii) the terms of the arrangement re-
quire compliance by the fiduciary adviser
with the requirements of this paragraph,
‘‘(iii) the terms of the arrangement in-
clude a written acknowledgment by the fidu-
ciary adviser that the fiduciary adviser is a
fiduciary of the plan with respect to the
provision of the advice, and
‘‘(iv) the requirements of part 4 of sub-
title B of title I of the Employee Retirement
Income Security Act of 1974 are met in
connection with the provision of such ad-
vice.
‘‘(G) DEFINITIONS.—For purposes of this
paragraph and subsection (d)(16)—
‘‘(i) FIDUCIARY
ADVISER.—The term
‘fiduciary adviser’ means, with respect to a
plan, a person who is a fiduciary of the
plan by reason of the provision of invest-
ment advice by the person to the plan or to
a participant or beneficiary and who is—
‘‘(I) registered as an investment
adviser under the Investment Advisers
Act of 1940 (15 U.S.C. 80b–1 et seq.)
or under the laws of the State in which
the fiduciary maintains its principal
office and place of business,
‘‘(II) a bank or similar financial
institution referred to in subsection
(d)(4),
‘‘(III) an insurance company
qualified to do business under the laws
of a State,
‘‘(IV) a person registered as a
broker or dealer under the Securities
Exchange Act of 1934 (15 U.S.C. 78a
et seq.),
‘‘(V) an affiliate of a person de-
scribed in any of subclauses (I)
through (IV), or
‘‘(VI) an employee, agent, or reg-
istered representative of a person de-
scribed in any of subclauses (I)
through (V) who satisfies the require-
ments of applicable insurance, bank-
ing, and securities laws relating to the
provision of the advice.
‘‘(ii) AFFILIATE.—The term ‘affiliate’
of another entity means an affiliated person
of the entity (as defined in section 2(a)(3)
of the Investment Company Act of 1940 (15
U.S.C. 80a–2(a)(3))).
‘‘(iii) 
REGISTERED
REPRESENTA-
TIVE.—The term ‘registered representative’
of another entity means a person described
in section 3(a)(18) of the Securities Ex-
change Act of 1934 (15 U.S.C. 78c(a)(18))
(substituting the entity for the broker or
dealer referred to in such section) or a per-
son described in section 202(a)(17) of the
Investment Advisers Act of 1940 (15 U.S.C.
80b–2(a)(17)) (substituting the entity for
the investment adviser referred to in such
section).’’.
SEC. 106. STUDY REGARDING IMPACT ON RETIREMENT SAV-
INGS OF PARTICIPANTS AND BENEFICIARIES
BY 
REQUIRING 
FIDUCIARY 
CONSULTANTS
FOR INDIVIDUAL ACCOUNT PLANS.
(a) STUDY.—As soon as practicable after the date of
the enactment of this Act, the Secretary of Labor shall un-
dertake a study of the costs and benefits to participants and
beneficiaries of requiring independent fiduciary consultants
to advise plan fiduciaries in connection with individual ac-
count plans. In conducting such study, the Secretary shall
consider—
(1) the benefits to plan participants and bene-
ficiaries of engaging independent fiduciary advisers
to provide investment advice regarding the assets of
the plan to persons who have fiduciary duties with re-
spect to the management or disposition of such assets,
(2) the extent to which independent advisers are
currently retained by plan fiduciaries,
(3) the availability of assistance to fiduciaries
from appropriate Federal agencies,
(4) the availability of qualified independent fi-
duciary consultants to serve the needs of individual
account plans in the United States,
(5) the impact of the additional fiduciary duty
of an independent advisor on the strict fiduciary obli-
gations of plan fiduciaries,
(6) the impact of new requirements (consulting
fees, reporting requirements, and new plan duties to
prudently identify and contract with qualified inde-
pendent fiduciary consultants) on the availability of
individual account plans, and
(7) the impact of a new requirement on the plan
administration costs per participant for small and
mid-size employers and the pension plans they spon-
sor.
(b) REPORT.—Not later than 1 year after the date of
the enactment of this Act, the Secretary of Labor shall re-
port the results of the study undertaken pursuant to this
section, together with any recommendations for legislative
changes, to the Committee on Education and the Workforce
of the House of Representatives and the Committee on
Health, Education, Labor, and Pensions of the Senate.
SEC. 107. INSIDER TRADES DURING PENSION PLAN SUS-
PENSION PERIODS PROHIBITED.
Section 16 of the Securities Exchange Act of 1934 (15
U.S.C. 78p) is amended by adding at the end the following
new subsection:
‘‘(h) INSIDER TRADES DURING PENSION PLAN SUS-
PENSION PERIODS PROHIBITED.—
‘‘(1) PROHIBITION.—It shall be unlawful for any
such beneficial owner, director, or officer of an issuer,
directly or indirectly, to purchase (or otherwise ac-
quire) or sell (or otherwise transfer) any equity secu-
rity of such issuer (other than an exempted security),
during any pension plan suspension period with re-
spect to such equity security.
‘‘(2) REMEDY.—Any profit realized by such ben-
eficial owner, director, or officer from any purchase
(or other acquisition) or sale (or other transfer) in
violation of this subsection shall inure to and be re-
coverable by the issuer irrespective of any intention
on the part of such beneficial owner, director, or offi-
cer in entering into the transaction.
‘‘(3) RULEMAKING
PERMITTED.—The Commis-
sion may issue rules to clarify the application of this
subsection, to ensure adequate notice to all persons af-
fected by this subsection, and to prevent evasion there-
of.
‘‘(4) 
DEFINITIONS.—For 
purposes 
of 
this
subsection—
‘‘(A) PENSION PLAN SUSPENSION PERIOD.—
The term ‘pension plan suspension period’
means, with respect to an equity security, any
period during which the ability of a participant
or beneficiary under an applicable individual
account plan maintained by the issuer to direct
the investment of assets in his or her individual
account away from such equity security is sus-
pended by the issuer or a fiduciary of the plan.
Such term does not include any limitation or re-
striction that may govern the frequency of trans-
fers between investment vehicles to the extent
such limitation and restriction is disclosed to
participants and beneficiaries through the sum-
mary plan description or materials describing
specific investment alternatives under the plan.
‘‘(B) APPLICABLE
INDIVIDUAL
ACCOUNT
PLAN.—The term ‘applicable individual account
plan’ has the meaning provided such term in
section 3(42) of the Employee Retirement Income
Security Act of 1974.’’.
SEC. 108. EFFECTIVE DATES OF TITLE AND RELATED
RULES.
(a) IN GENERAL.—Except as provided in subsection
(b), the amendments made by sections 101, 102, 103, 104,
and 107 shall apply with respect to plan years beginning
on or after January 1, 2003.
(b) SPECIAL RULE FOR COLLECTIVELY BARGAINED
PLANS.—In the case of a plan maintained pursuant to 1
or more collective bargaining agreements between employee
representatives and 1 or more employers ratified on or be-
fore the date of the enactment of this Act, subsection (a)
shall be applied to benefits pursuant to, and individuals
covered by, any such agreement by substituting for ‘‘Janu-
ary 1, 2003’’ the date of the commencement of the first plan
year beginning on or after the earlier of—
(1) the later of—
(A) January 1, 2004, or
(B) the date on which the last of such collec-
tive bargaining agreements terminates (deter-
mined without regard to any extension thereof
after the date of the enactment of this Act), or
(2) January 1, 2005.
(c) PLAN AMENDMENTS.—If the amendments made by
sections 101, 102, 103, and 104 of this Act require an
amendment to any plan, such plan amendment shall not
be required to be made before the first plan year beginning
on or after January 1, 2005, if—
(1) during the period after such amendments
made by such sections take effect and before such first
plan year, the plan is operated in accordance with
the requirements of such amendments made by such
sections, and
(2) such plan amendment applies retroactively to
the period after such amendments made by such sec-
tions take effect and before such first plan year.
(d) AMENDMENTS RELATING
TO INVESTMENT AD-
VICE.—The amendments made by section 104 shall apply
with respect to advice referred to in section 3(21)(A)(ii) of
the Employee Retirement Income Security Act of 1974 or
section 4975(c)(3)(B) of the Internal Revenue Code of 1986
provided on or after January 1, 2003.
TITLE II—ADDITIONAL
PROVISIONS
SEC. 201. AMENDMENTS TO RETIREMENT PROTECTION ACT
OF 1994.
(a) TRANSITION RULE MADE PERMANENT.—Para-
graph (1) of section 769(c) of the Retirement Protection Act
of 1994 is amended—
(1) by striking ‘‘transition’’ each place it ap-
pears in the heading and the text, and
(2) by striking ‘‘for any plan year beginning
after 1996 and before 2010’’.
(b) SPECIAL RULES.—Paragraph (2) of section 769(c)
of the Retirement Protection Act of 1994 is amended to read
as follows:
‘‘(2) SPECIAL
RULES.—The rules described in
this paragraph are as follows:
‘‘(A) For purposes of section 302(d)(9)(A) of
the Employee Retirement Income Security Act of
1974, the funded current liability percentage for
any plan year shall be treated as not less than
90 percent.
‘‘(B) For purposes of section 302(e) of the
Employee Retirement Income Security Act of
1974, the funded current liability percentage for
any plan year shall be treated as not less than
100 percent.
‘‘(C) For purposes of determining unfunded
vested benefits under section 4006(a)(3)(E)(iii)
of the Employee Retirement Income Security Act
of 1974, the mortality table shall be the mor-
tality table used by the plan.’’.
(c) EFFECTIVE DATE.—The amendments made by this
section shall apply to plan years beginning after December
31, 2001.
SEC. 202. NOTICE AND CONSENT PERIOD REGARDING DIS-
TRIBUTIONS.
(a) EXPANSION OF PERIOD.—
(1) AMENDMENT OF ERISA.—
(A) IN GENERAL.—Section 205(c)(7)(A) of
the Employee Retirement Income Security Act of
1974 (29 U.S.C. 1055(c)(7)(A)) is amended by
striking ‘‘90-day’’ and inserting ‘‘180-day’’.
(B) MODIFICATION OF REGULATIONS.—The
Secretary of the Treasury shall modify the regu-
lations under part 2 of subtitle B of title I of the
Employee Retirement Income Security Act of
1974 to the extent that they relate to sections
203(e) and 205 of such Act to substitute ‘‘180
days’’ for ‘‘90 days’’ each place it appears.
(2) EFFECTIVE DATE.—The amendment made by
paragraph (1)(A) and the modification required by
paragraph (1)(B) shall apply to years beginning after
December 31, 2002.
(b) CONSENT REGULATION INAPPLICABLE TO CERTAIN
DISTRIBUTIONS.—
(1) IN GENERAL.—The Secretary of the Treasury
shall modify the regulations under section 205 of the
Employee Retirement Income Security Act of 1974 to
provide that the description of a participant’s right,
if any, to defer receipt of a distribution shall also
describe the consequences of failing to defer such re-
ceipt.
(2) EFFECTIVE DATE.—
(A) IN
GENERAL.—The modifications re-
quired by paragraph (1) shall apply to years be-
ginning after December 31, 2002.
(B) REASONABLE NOTICE.—In the case of
any description of such consequences made before
the date that is 90 days after the date on which
the Secretary of the Treasury issues a safe har-
bor description under paragraph (1), a plan
shall not be treated as failing to satisfy the re-
quirements of section 205 of such Act by reason
of the failure to provide the information required
by the modifications made under paragraph (1)
if the Administrator of such plan makes a rea-
sonable attempt to comply with such require-
ments.
SEC. 203. ANNUAL REPORT DISSEMINATION.
(a) REPORT
AVAILABLE
THROUGH
ELECTRONIC
MEANS.—Section 104(b)(3) of the Employee Retirement In-
come Security Act of 1974 (29 U.S.C. 1024(b)(3)) is amend-
ed by adding at the end the following new sentence: ‘‘The
requirement to furnish information under the previous sen-
tence with respect to an employee pension benefit plan shall
be satisfied if the administrator makes such information
reasonably available through electronic means or other new
technology.’’.
(b) EFFECTIVE DATE.—The amendment made by this
section shall apply to reports for years beginning after De-
cember 31, 2002.
SEC. 204. TECHNICAL CORRECTIONS TO SAVER ACT.
Section 517 of the Employee Retirement Income Secu-
rity Act of 1974 (29 U.S.C. 1147) is amended—
(1) in subsection (a), by striking ‘‘2001 and
2005 on or after September 1 of each year involved’’
and inserting ‘‘2002, 2006, and 2010’’;
(2) in subsection (b), by adding at the end the
following new sentence: ‘‘To effectuate the purposes of