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.
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
485
provisions of this subsection and of subsection 
(b)(14) have been met. A transaction prohibited 
under section 406 shall not be considered to have oc-
curred solely because the records are lost or de-
stroyed prior to the end of the 6-year period due to 
circumstances beyond the control of the fiduciary 
adviser. 
‘‘(10) EXEMPTION
FOR
PLAN
SPONSOR
AND 
CERTAIN 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 
section 3(21)(A)(ii) (or solely by reason of con-
tracting for or otherwise arranging for the pro-
vision of the advice), if—
‘‘(i) the advice is provided by a fidu-
ciary adviser pursuant to an eligible invest-
ment advice arrangement between the plan 
sponsor or other fiduciary and the fidu-
ciary adviser for the provision by the fidu-
ciary adviser of investment advice referred 
to in such section,
486
‘‘(ii) the terms of the eligible invest-
ment advice arrangement require compli-
ance by the fiduciary adviser with the re-
quirements of this subsection, and 
‘‘(iii) the terms of the eligible invest-
ment advice arrangement include a written 
acknowledgment by the fiduciary adviser 
that the fiduciary adviser is a fiduciary of 
the plan with respect to the provision of 
the advice. 
‘‘(B) CONTINUED DUTY OF PRUDENT SE-
LECTION OF ADVISER AND PERIODIC REVIEW.—
Nothing 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 fiduciary adviser with whom the plan sponsor 
or other person enters into an eligible invest-
ment advice arrangement for the provision of 
investment 
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 recipi-
ent of the advice.
487
‘‘(C) AVAILABILITY OF PLAN ASSETS FOR 
PAYMENT FOR ADVICE.—Nothing in this part 
shall be construed to preclude the use of plan 
assets to pay for reasonable expenses in pro-
viding investment advice referred to in section 
3(21)(A)(ii). 
‘‘(11) DEFINITIONS.—For purposes of this sub-
section and subsection (b)(14)—
‘‘(A) FIDUCIARY ADVISER.—The term ‘fi-
duciary adviser’ means, with respect to a plan, 
a person who is a fiduciary of the plan by rea-
son of the provision of investment advice re-
ferred to in section 3(21)(A)(ii) by the person 
to the participant or beneficiary of the plan 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) or a 
savings association (as defined in section 
3(b)(1) of the Federal Deposit Insurance
488
Act (12 U.S.C. 1813(b)(1)), but only if the 
advice is provided through a trust depart-
ment of the bank or similar financial insti-
tution or savings association which is sub-
ject to periodic 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 
clauses (i) through (v) who satisfies the re-
quirements of applicable insurance, bank-
ing, and securities laws relating to the pro-
vision of the advice. 
For purposes of this part, a person who devel-
ops the computer model described in paragraph 
(3)(B) or markets the investment advice pro-
gram or computer model shall be treated as a 
person who is a fiduciary of the plan by reason 
of the provision of investment advice referred to
489
in section 3(21)(A)(ii) to the participant or ben-
eficiary and shall be treated as a fiduciary ad-
viser for purposes of this subsection and sub-
section (b)(14), except that the Secretary may 
prescribe rules under which only 1 fiduciary ad-
viser may elect to be treated as a fiduciary with 
respect to the plan. 
‘‘(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 adviser referred to 
in such section).’’. 
(3) EFFECTIVE DATE.—The amendments made 
by this subsection shall apply with respect to advice
490
referred to in section 3(21)(A)(ii) of the Employee 
Retirement Income Security Act of 1974 provided 
after December 31, 2006. 
(b) AMENDMENTS TO INTERNAL REVENUE CODE OF 
1986.—
(1) EXEMPTION
FROM
PROHIBITED
TRANS-
ACTIONS.—Subsection (d) of section 4975 of the In-
ternal Revenue Code of 1986 (relating to exemption 
from tax on prohibited transactions) is amended—
(A) in paragraph (15), by striking ‘‘or’’ at 
the end; 
(B) in paragraph (16), by striking the pe-
riod at the end and inserting ‘‘;or’’; and 
(C) by adding at the end the following new 
paragraph: 
‘‘(17) Any transaction in connection with the 
provision of investment advice described in sub-
section (e)(3)(B) to a participant or beneficiary in a 
plan and that permits such participant or bene-
ficiary to direct the investment of plan assets in an 
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
491
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 (f)(8) 
are met.’’. 
(2) REQUIREMENTS.—Subsection (f) of such 
section 4975 (relating to other definitions and spe-
cial rules) is amended by adding at the end the fol-
lowing new paragraph: 
‘‘(8) PROVISION
OF
INVESTMENT
ADVICE
TO 
PARTICIPANT AND BENEFICIARIES.—
492
‘‘(A) IN GENERAL.—The prohibitions pro-
vided in subsection (c) shall not apply to trans-
actions described in subsection (b)(14) if the in-
vestment advice provided by a fiduciary adviser 
is provided under an eligible investment advice 
arrangement. 
‘‘(B) ELIGIBLE INVESTMENT ADVICE AR-
RANGEMENT.—For purposes of this paragraph, 
the term ‘eligible investment advice arrange-
ment’ means an arrangement—
‘‘(i) which either—
‘‘(I) provides that any fees (in-
cluding any commission or other com-
pensation) received by the fiduciary 
adviser for investment advice or with 
respect to the sale, holding, or acqui-
sition of any security or other prop-
erty for purposes of investment of 
plan assets do not vary depending on 
the basis of any investment option se-
lected, or 
‘‘(II) uses a computer model 
under an investment advice program 
meeting the requirements of subpara-
graph (C) in connection with the pro-
493
vision of investment advice by a fidu-
ciary adviser to a participant or bene-
ficiary, and 
‘‘(ii) with respect to which the re-
quirements of subparagraphs (D), (E), 
(F), (G), (H), and (I) are met. 
‘‘(C) 
INVESTMENT
ADVICE
PROGRAM 
USING COMPUTER MODEL.—
‘‘(i) IN GENERAL.—An investment ad-
vice program meets the requirements of 
this subparagraph if the requirements of 
clauses (ii), (iii), and (iv) are met. 
‘‘(ii) COMPUTER
MODEL.—The re-
quirements of this clause are met if the in-
vestment advice provided under the invest-
ment advice program is provided pursuant 
to a computer model that—
‘‘(I) applies generally accepted 
investment theories that take into ac-
count the historic returns of different 
asset classes over defined periods of 
time, 
‘‘(II) utilizes relevant information 
about the participant, which may in-
clude age, life expectancy, retirement
494
age, risk tolerance, other assets or 
sources of income, and preferences as 
to certain types of investments, 
‘‘(III) utilizes prescribed objective 
criteria to provide asset allocation 
portfolios comprised of investment op-
tions 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 relationship with the fidu-
ciary adviser, and 
‘‘(V) takes into account all in-
vestment options under the plan in 
specifying how a participant’s account 
balance should be invested and is not 
inappropriately weighted with respect 
to any investment option. 
‘‘(iii) CERTIFICATION.—
‘‘(I) IN GENERAL.—The require-
ments of this clause are met with re-
spect to any investment advice pro-
gram if an eligible investment expert 
certifies, prior to the utilization of the
495
computer model and in accordance 
with rules prescribed by the Secretary 
of Labor, that the computer model 
meets the requirements of clause (ii). 
‘‘(II) RENEWAL
OF
CERTIFI-
CATIONS.—If, as determined under 
regulations prescribed by the Sec-
retary of Labor, there are material 
modifications to a computer model, 
the requirements of this clause are 
met only if a certification described in 
subclause (I) is obtained with respect 
to the computer model as so modified. 
‘‘(III) 
ELIGIBLE
INVESTMENT 
EXPERT.—The term ‘eligible invest-
ment expert’ means any person which 
meets such requirements as the Sec-
retary of Labor may provide and 
which does not bear any material af-
filiation 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).
496
‘‘(iv) EXCLUSIVITY OF RECOMMENDA-
TION.—The requirements of this clause are 
met with respect to any investment advice 
program if—
‘‘(I) the only investment advice 
provided under the program is the ad-
vice generated by the computer model 
described in clause (ii), and 
‘‘(II) any transaction described in 
subsection (b)(14)(B)(ii) occurs solely 
at the direction of the participant or 
beneficiary. 
Nothing in the preceding sentence shall 
preclude the participant or beneficiary 
from requesting investment advice other 
than that described in clause (i), but only 
if such request has not been solicited by 
any person connected with carrying out the 
arrangement. 
‘‘(D) EXPRESS AUTHORIZATION BY SEPA-
RATE
FIDUCIARY.—The requirements of this 
subparagraph are met with respect to an ar-
rangement if the arrangement is expressly au-
thorized by a plan fiduciary other than the per-
son offering the investment advice program, any
497
person providing investment options under the 
plan, or any affiliate of either. 
‘‘(E) AUDITS.—
‘‘(i) IN GENERAL.—The requirements 
of this subparagraph are met if an inde-
pendent auditor, who has appropriate tech-
nical training or experience and proficiency 
and so represents in writing—
‘‘(I) conducts an annual audit of 
the arrangement for compliance with 
the requirements of this paragraph, 
and 
‘‘(II) 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 compliance 
of the arrangement with the require-
ments of this paragraph. 
‘‘(ii) SPECIAL RULE FOR INDIVIDUAL 
RETIREMENT AND SIMILAR PLANS.—In the 
case of a plan described in subparagraphs 
(B) through (F) (and so much of subpara-
graph (G) as relates to such subpara-
graphs) of subsection (e)(1), in lieu of the
498
requirements of clause (i), audits of the ar-
rangement shall be conducted at such 
times and in such manner as the Secretary 
of Labor may prescribe. 
‘‘(iii) INDEPENDENT
AUDITOR.—For 
purposes of this subparagraph, an auditor 
is considered independent if it is not re-
lated to the person offering the arrange-
ment to the plan and is not related to any 
person providing investment options under 
the plan. 
‘‘(F) DISCLOSURE.—The requirements of 
this subparagraph are met if—
‘‘(i) the fiduciary adviser provides to a 
participant or a beneficiary before the ini-
tial provision of the investment advice with 
regard to any security or other property of-
fered as an investment option, a written 
notification (which may consist of notifica-
tion by means of electronic communica-
tion)—
‘‘(I) of the role of any party that 
has a material affiliation or contrac-
tual relationship with the financial ad-
viser in the development of the invest-
499
ment advice program and in the selec-
tion of investment options available 
under the plan, 
‘‘(II) of the past performance 
and historical rates of return of the 
investment options available under the 
plan, 
‘‘(III) of all fees or other com-
pensation relating to the advice that 
the fiduciary adviser or any affiliate 
thereof is to receive (including com-
pensation 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 fidu-
ciary adviser or affiliates thereof in 
the security or other property, 
‘‘(V) the manner, and under 
what circumstances, any participant 
or beneficiary information provided 
under the arrangement will be used or 
disclosed,
500
‘‘(VI) of the types of services 
provided by the fiduciary adviser in 
connection with the provision of in-
vestment advice by the fiduciary ad-
viser, 
‘‘(VII) that the adviser is acting 
as a fiduciary of the plan in connec-
tion 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 com-
pensation in connection with the secu-
rity or other property, and 
‘‘(ii) at all times during the provision 
of advisory services to the participant or 
beneficiary, the fiduciary adviser—
‘‘(I) maintains the information 
described in clause (i) in accurate 
form and in the manner described in 
subparagraph (H), 
‘‘(II) provides, without charge, 
accurate information to the recipient
501
of the advice no less frequently than 
annually, 
‘‘(III) provides, without charge, 
accurate information to the recipient 
of the advice upon request of the re-
cipient, and 
‘‘(IV) provides, without charge, 
accurate information to the recipient 
of the advice concerning any material 
change to the information required to 
be provided to the recipient of the ad-
vice at a time reasonably contempora-
neous to the change in information. 
‘‘(G) OTHER
CONDITIONS.—The require-
ments of this subparagraph are met if—
‘‘(i) 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, 
‘‘(ii) the sale, acquisition, or holding 
occurs solely at the direction of the recipi-
ent of the advice, 
‘‘(iii) the compensation received by the 
fiduciary adviser and affiliates thereof in
502
connection with the sale, acquisition, or 
holding of the security or other property is 
reasonable, and 
‘‘(iv) the terms of the sale, acquisi-
tion, or holding of the security or other 
property are at least as favorable to the 
plan as an arm’s length transaction would 
be. 
‘‘(H) STANDARDS FOR PRESENTATION OF 
INFORMATION.—
‘‘(i) IN GENERAL.—The requirements 
of this subparagraph are met if the notifi-
cation required to be provided to partici-
pants and beneficiaries under subpara-
graph (F)(i) is written in a clear and con-
spicuous manner and in a manner cal-
culated to be understood by the average 
plan participant and is sufficiently accu-
rate and comprehensive to reasonably ap-
prise such participants and beneficiaries of 
the information required to be provided in 
the notification. 
‘‘(ii) MODEL FORM FOR DISCLOSURE 
OF
FEES
AND
OTHER
COMPENSATION.—
The Secretary of Labor shall issue a model
503
form for the disclosure of fees and other 
compensation required in subparagraph 
(F)(i)(III) which meets the requirements 
of clause (i). 
‘‘(I) MAINTENANCE FOR 6 YEARS OF EVI-
DENCE OF COMPLIANCE.—The requirements of 
this subparagraph are met if a fiduciary adviser 
who has provided advice referred to in subpara-
graph (A) maintains, for a period of not less 
than 6 years after the provision of the advice, 
any records necessary for determining whether 
the requirements of the preceding provisions of 
this paragraph and of subsection (d)(17) have 
been met. A transaction prohibited under sec-
tion 406 shall not be considered to have oc-
curred solely because the records are lost or de-
stroyed prior to the end of the 6-year period 
due to circumstances beyond the control of the 
fiduciary adviser. 
‘‘(J) DEFINITIONS.—For purposes of this 
paragraph and subsection (d)(17)—
‘‘(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-
504
ment advice by the person to the partici-
pant or beneficiary of the plan 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 prin-
cipal office and place of business, 
‘‘(II) a bank or similar financial 
institution referred to in section 
408(b)(4) or a savings association (as 
defined in section 3(b)(1) of the Fed-
eral Deposit Insurance Act (12 U.S.C. 
1813(b)(1)), but only if the advice is 
provided through a trust department 
of the bank or similar financial insti-
tution or savings association which is 
subject to periodic examination and 
review by Federal or State banking 
authorities, 
‘‘(III) an insurance company 
qualified to do business under the 
laws of a State,
505
‘‘(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 subclauses (I) through (V) 
who satisfies the requirements of ap-
plicable insurance, banking, and secu-
rities laws relating to the provision of 
the advice. 
For purposes of this title, a person who de-
velops the computer model described in 
subparagraph (C)(ii) or markets the in-
vestment advice program or computer 
model shall be treated as a person who is 
a fiduciary of the plan by reason of the 
provision of investment advice referred to 
in subsection (e)(3)(B) to the participant 
or beneficiary and shall be treated as a fi-
duciary adviser for purposes of this para-
graph and subsection (d)(17), except that
506
the Secretary of Labor may prescribe rules 
under which only 1 fiduciary adviser may 
elect to be treated as a fiduciary with re-
spect to the plan. 
‘‘(ii) AFFILIATE.—The term ‘affiliate’ 
of another entity means an affiliated per-
son 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 representa-
tive’ of another entity means a person de-
scribed in section 3(a)(18) of the Securi-
ties Exchange Act of 1934 (15 U.S.C. 
78c(a)(18)) (substituting the entity for the 
broker or dealer referred to in such sec-
tion) or a person described in section 
202(a)(17) of the Investment Advisers Act 
of 1940 (15 U.S.C. 80b-2(a)(17)) (sub-
stituting the entity for the investment ad-
viser referred to in such section).’’. 
(3) DETERMINATION OF FEASIBILITY OF APPLI-
CATION OF COMPUTER MODEL INVESTMENT ADVICE 
PROGRAMS FOR INDIVIDUAL RETIREMENT AND SIMI-
LAR PLANS.—
507
(A) SOLICITATION OF INFORMATION.—As 
soon as practicable after the date of the enact-
ment of this Act, the Secretary of Labor, in 
consultation with the Secretary of the Treasury, 
shall—
(i) solicit information as to the feasi-
bility of the application of computer model 
investment advice programs for plans de-
scribed in subparagraphs (B) through (F) 
(and so much of subparagraph (G) as re-
lates to such subparagraphs) of section 
4975(e)(1) of the Internal Revenue Code 
of 1986, including soliciting information 
from—
(I) at least the top 50 trustees of 
such plans, determined on the basis of 
assets held by such trustees, and 
(II) other persons offering com-
puter model investment advice pro-
grams based on nonproprietary prod-
ucts, and 
(ii) shall on the basis of such informa-
tion make the determination under sub-
paragraph (B).
508
The information solicited by the Secretary of 
Labor under clause (i) from persons described 
in subclauses (I) and (II) of clause (i) shall in-
clude information on computer modeling capa-
bilities of such persons with respect to the cur-
rent year and preceding year, including such ca-
pabilities for investment accounts maintained 
by such persons. 
(B) DETERMINATION
OF
FEASIBILITY.—
The Secretary of Labor, in consultation with 
the Secretary of the Treasury, shall, on the 
basis of information received under subpara-
graph (A), determine whether there is any com-
puter model investment advice program which 
may be utilized by a plan described in subpara-
graph (A)(i) to provide investment advice to the 
account beneficiary of the plan which—
(i) utilizes relevant information about 
the account beneficiary, 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, 
(ii) takes into account the full range 
of investments, including equities and
509
bonds, in determining the options for the 
investment portfolio of the account bene-
ficiary, and 
(iii) allows the account beneficiary, in 
directing the investment of assets, suffi-
cient flexibility in obtaining advice to 
evaluate and select investment options. 
The Secretary of Labor shall report the results 
of such determination to the committees of 
Congress referred to in subparagraph (D)(ii) 
not later than December 31, 2007. 
(C) APPLICATION
OF
COMPUTER
MODEL 
INVESTMENT ADVICE PROGRAM.—
(i) CERTIFICATION
REQUIRED
FOR 
USE OF COMPUTER MODEL.—
(I) RESTRICTION ON USE.—Sub-
clause (II) of section 4975(f)(8)(B)(i) 
of the Internal Revenue Code of 1986 
shall not apply to a plan described in 
subparagraph (A)(i). 
(II) RESTRICTION
LIFTED
IF 
MODEL CERTIFIED.—If the Secretary 
of Labor determines under subpara-
graph (B) or (D) that there is a com-
puter model investment advice pro-
510
gram described in subparagraph (B), 
subclause (I) shall cease to apply as of 
the date of such determination. 
(ii) CLASS EXEMPTION IF NO INITIAL 
CERTIFICATION
BY
SECRETARY.—If the 
Secretary of Labor determines under sub-
paragraph (B) that there is no computer 
model investment advice program described 
in subparagraph (B), the Secretary of 
Labor shall grant a class exemption from 
treatment as a prohibited transaction 
under section 4975(c) of the Internal Rev-
enue Code of 1986 to any transaction de-
scribed in section 4975(d)(17)(A) of such 
Code with respect to plans described in 
subparagraph (A)(i), subject to such condi-
tions as set forth in such exemption as are 
in the interests of the plan and its account 
beneficiary and protective of the rights of 
the account beneficiary and as are nec-
essary to—
(I) ensure the requirements of 
sections 4975(d)(17) and 4975(f)(8) 
(other than subparagraph (C) thereof)
511
of the Internal Revenue Code of 1986 
are met, and 
(II) ensure the investment advice 
provided under the investment advice 
program utilizes prescribed objective 
criteria to provide asset allocation 
portfolios comprised of securities or 
other property available as invest-
ments under the plan. 
If the Secretary of Labor solicits any infor-
mation under subparagraph (A) from a 
person and such person does not provide 
such information within 60 days after the 
solicitation, then, unless such failure was 
due to reasonable cause and not wilful ne-
glect, such person shall not be entitled to 
utilize the class exemption under this 
clause. 
(D) SUBSEQUENT DETERMINATION.—
(i) IN GENERAL.—If the Secretary of 
Labor initially makes a determination de-
scribed in subparagraph (C)(ii), the Sec-
retary may subsequently determine that 
there is a computer model investment ad-
vice program described in subparagraph