159
pothetical investments directed by the partici-
pant. Such term shall not include a one-partici-
pant retirement plan or a plan to which section 
105 of the Employee Retirement Income Secu-
rity Act of 1974 applies. 
‘‘(C) 
ONE-PARTICIPANT
RETIREMENT 
PLAN DEFINED.—The term ‘one-participant re-
tirement plan’ means a retirement plan with re-
spect to which the following requirements are 
met: 
‘‘(i) on the first day of the plan 
year—
‘‘(I) the plan covered only one in-
dividual (or the individual and the in-
dividual’s spouse) and the individual 
owned 100 percent of the plan spon-
sor (whether or not incorporated), or 
‘‘(II) the plan covered only one 
or more partners (or partners and 
their spouses) in the plan sponsor; 
‘‘(ii) the plan meets the minimum cov-
erage requirements of 410(b) without 
being combined with any other plan of the 
business that covers the employees of the 
business;
160
‘‘(iii) the plan does not provide bene-
fits to anyone except the individual (and 
the individual’s spouse) or the partners 
(and their spouses); 
‘‘(iv) the plan does not cover a busi-
ness that is a member of an affiliated serv-
ice group, a controlled group of corpora-
tions, or a group of businesses under com-
mon control; and 
‘‘(v) the plan does not cover a busi-
ness that leases employees. 
‘‘(6) CROSS REFERENCE.—For provisions relat-
ing to penalty for failure to provide the notice re-
quired by this section, see section 6652(m).’’. 
(2) PENALTY FOR FAILURE TO PROVIDE NO-
TICE.—Section 6652 of such Code (relating to fail-
ure to file certain information returns, registration 
statements, etc.) is amended by redesignating sub-
section (m) as subsection (n) and by inserting after 
subsection (l) the following new subsection: 
‘‘(m) FAILURE
TO PROVIDE INVESTMENT EDU-
CATION
NOTICES
TO
PARTICIPANTS
IN
CERTAIN 
PLANS.—In the case of each failure to provide a written 
explanation as required by section 414(aa) with respect 
to an applicable individual (as defined in such section),
161
at the time prescribed therefor, unless it is shown that 
such failure is due to reasonable cause and not to willful 
neglect, there shall be paid, on notice and demand of the 
Secretary and in the same manner as tax, by the person 
failing to provide such notice, an amount equal to $100 
for each such failure, but the total amount imposed on 
such person for all such failures during any calendar year 
shall not exceed $50,000.’’. 
SEC. 602. INAPPLICABILITY OF RELIEF FROM FIDUCIARY 
LIABILITY DURING BLACKOUT PERIODS. 
(a) IN GENERAL.—Section 404(c) of the Employee 
Retirement Income Security Act of 1974 (29 U.S.C. 
1104(c)) is amended by adding at the end the following 
new paragraph: 
‘‘(4)(A) Paragraph (1)(B) shall not apply in connec-
tion with the direction or diversification of assets credited 
to the account of any participant or beneficiary during a 
blackout period if, by reason of the imposition of such 
blackout period, the ability of such participant or bene-
ficiary to direct or diversify such assets is suspended, lim-
ited, or restricted. 
‘‘(B) If the fiduciary authorizing a blackout period 
meets the requirements of this title in connection with au-
thorizing such blackout period, no person who is a fidu-
ciary shall be liable under this title for any loss occurring
162
during the blackout period as a result of any exercise by 
the participant or beneficiary of control over assets in his 
or her account prior to the blackout period. Matters to 
be considered in determining whether a fiduciary has met 
the requirements of this title include whether such fidu-
ciary—
‘‘(i) has considered the reasonableness of the 
expected length of the blackout period, 
‘‘(ii) has provided the notice required under sec-
tion 101(i)(2), and 
‘‘(iii) has acted in accordance with the require-
ments of subsection (a) in determining whether to 
enter into the blackout period. 
‘‘(C) If a blackout period arises in connection with 
a change in the investment options offered under the plan, 
a participant or beneficiary shall be deemed to have exer-
cised control over the assets in his or her account prior 
to the blackout period, if, after reasonable notice of the 
change in investment options is given to such participant 
or beneficiary before such blackout period, assets in the 
account of the participant or beneficiary are transferred—
‘‘(i) to plan investment options in accordance 
with the affirmative election of the participant or 
beneficiary, or