I 
109TH CONGRESS 
2D SESSION 
H. R. 6210 
To amend the Internal Revenue Code of 1986 to allow employees not covered 
by qualified retirement plans to save for retirement through automatic 
payroll deposit IRAs, to facilitate similar saving by the self-employed, 
and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
SEPTEMBER 27, 2006 
Mr. ENGLISH of Pennsylvania introduced the following bill; which was referred 
to the Committee on Ways and Means, and in addition to the Committee 
on Education and the Workforce, for a period to be subsequently deter-
mined by the Speaker, in each case for consideration of such provisions 
as fall within the jurisdiction of the committee concerned 
A BILL 
To amend the Internal Revenue Code of 1986 to allow em-
ployees not covered by qualified retirement plans to save 
for retirement through automatic payroll deposit IRAs, 
to facilitate similar saving by the self-employed, and for 
other purposes. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Automatic IRA Act 
of 2006’’. 
VerDate Aug 31 2005 
18:00 Oct 10, 2006
Jkt 059200
PO 00000
Frm 00001
Fmt 6652
Sfmt 6201
E:\BILLS\H6210.IH
H6210
hsrobinson on PROD1PC76 with BILLS
SEC. 2. EMPLOYEES NOT COVERED BY QUALIFIED RETIRE-
MENT PLANS OR ARRANGEMENTS ENTITLED 
TO PARTICIPATE IN PAYROLL DEPOSIT IRA 
ARRANGEMENTS. 
(a) IN GENERAL.—Subpart A of part I of subchapter 
A of chapter 1 (relating to pension, profit-sharing, stock 
bonus plans, etc.) is amended by inserting after section 
408A the following new section: 
‘‘SEC. 408B. RIGHT TO PAYROLL DEPOSIT IRA ARRANGE-
MENTS AT WORK. 
‘‘(a) REQUIREMENT TO PROVIDE PAYROLL DEPOSIT 
IRA ARRANGEMENT.—Each employer (other than an em-
ployer described in subsection (e)) shall provide to each 
applicable employee of the employer for any calendar year 
the opportunity to participate in a payroll deposit IRA ar-
rangement which meets the requirements of this section. 
‘‘(b) PAYROLL DEPOSIT IRA ARRANGEMENT.—For 
purposes of this section— 
‘‘(1) IN GENERAL.—The term ‘payroll deposit 
IRA arrangement’ means a written arrangement of 
an employer— 
‘‘(A) under which an applicable employee 
eligible to participate in the arrangement may 
elect to contribute to an individual retirement 
plan established by or on behalf of the employee 
by having the employer make periodic direct de-
VerDate Aug 31 2005 
18:00 Oct 10, 2006
Jkt 059200
PO 00000
Frm 00002
Fmt 6652
Sfmt 6201
E:\BILLS\H6210.IH
H6210
hsrobinson on PROD1PC76 with BILLS
posit or other payroll deposit payments (includ-
ing electronic payments) to the plan by payroll 
deduction, and 
‘‘(B) which meets the requirements of 
paragraph (2). 
‘‘(2) ADMINISTRATIVE
REQUIREMENTS.—The 
requirements of this paragraph are met with respect 
to any payroll deposit IRA arrangement if— 
‘‘(A) the employer must make the pay-
ments elected under paragraph (1)(A) on or be-
fore the later of— 
‘‘(i) the due date for the deposit of 
tax required to be deducted and withheld 
under chapter 24 (relating to collection of 
income tax at source on wages) for the 
payroll period to which such payments re-
late, or 
‘‘(ii) the 30th day following the last 
day of the month with respect to which the 
payments are to be made, 
‘‘(B) subject to a requirement for reason-
able notice, an employee may elect to terminate 
participation in the arrangement at any time 
during a calendar year, except that if an em-
ployee so terminates, the arrangement may pro-
VerDate Aug 31 2005 
18:00 Oct 10, 2006
Jkt 059200
PO 00000
Frm 00003
Fmt 6652
Sfmt 6201
E:\BILLS\H6210.IH
H6210
hsrobinson on PROD1PC76 with BILLS
vide that the employee may not elect to resume 
participation until the beginning of the next cal-
endar year, 
‘‘(C) each employee eligible to participate 
may elect, during the 60-day period or other pe-
riod specified by the Secretary before the begin-
ning of any calendar year (and during the 60- 
day period or other period specified by the Sec-
retary before the first day the employee is eligi-
ble to participate), to participate in the ar-
rangement, or to modify the employee’s election 
under the arrangement (including the amounts 
subject to the arrangement and the manner in 
which such amounts are invested), for such 
year, 
‘‘(D) the employer provides— 
‘‘(i) immediately before the beginning 
of each period described in subparagraph 
(C), a notice to each employee of the em-
ployee’s opportunity to make the election 
and the maximum amount which may be 
contributed to an individual retirement 
plan on an annual basis, and 
‘‘(ii) if the arrangement includes an 
automatic contribution arrangement, the 
VerDate Aug 31 2005 
18:00 Oct 10, 2006
Jkt 059200
PO 00000
Frm 00004
Fmt 6652
Sfmt 6201
E:\BILLS\H6210.IH
H6210
hsrobinson on PROD1PC76 with BILLS
notices required under subsection (g) with 
respect to the automatic contribution ar-
rangement, 
‘‘(E) subject to subsection (f), the arrange-
ment provides that an employee may elect to 
have contributions made to any individual re-
tirement plan specified by the employee, and 
‘‘(F) if the arrangement does not include 
an automatic contribution arrangement— 
‘‘(i) the arrangement requires the em-
ployer to take all reasonable actions to so-
licit from all employees eligible to partici-
pate in the arrangement an explicit elec-
tion to either participate or not to partici-
pate in the arrangement, and 
‘‘(ii) the arrangement provides that if 
an employee fails to make an explicit elec-
tion under clause (i) within the time pre-
scribed under the arrangement, the em-
ployee will be treated as having made an 
election to participate in the arrangement 
(and amounts shall be invested on behalf 
of the participant) in the same manner as 
if the arrangement had included an auto-
VerDate Aug 31 2005 
18:00 Oct 10, 2006
Jkt 059200
PO 00000
Frm 00005
Fmt 6652
Sfmt 6201
E:\BILLS\H6210.IH
H6210
hsrobinson on PROD1PC76 with BILLS
matic contribution arrangement under sub-
section (g). 
‘‘(c) APPLICABLE EMPLOYEE DEFINED; RELATED 
DEFINITIONS AND RULES.—For purposes of this sec-
tion— 
‘‘(1) APPLICABLE EMPLOYEE.— 
‘‘(A) IN GENERAL.—The term ‘applicable 
employee’ means, with respect to any calendar 
year, any employee— 
‘‘(i) who was not eligible under a 
qualified plan or arrangement maintained 
by the employer for service for the pre-
ceding calendar year, and 
‘‘(ii) with respect to whom it is rea-
sonable to expect that the employee will 
not be eligible during the calendar year 
under such a qualified plan or arrange-
ment. 
‘‘(B) SPECIAL
RULES.—For purposes of 
subparagraph (A)(i)— 
‘‘(i) ELIGIBILITY.—An employee shall 
be treated as eligible under a plan for a 
preceding calendar year if, as of the last 
day of the last plan year ending in the pre-
VerDate Aug 31 2005 
18:00 Oct 10, 2006
Jkt 059200
PO 00000
Frm 00006
Fmt 6652
Sfmt 6201
E:\BILLS\H6210.IH
H6210
hsrobinson on PROD1PC76 with BILLS
ceding calendar year, the employee has sat-
isfied the plan’s eligibility requirements. 
‘‘(ii) EXCLUDED PLANS.—A qualified 
plan or arrangement shall not be taken 
into account under this paragraph if— 
‘‘(I) the plan or arrangement is 
frozen as of the first day of the pre-
ceding calendar year, or 
‘‘(II) in the case of a plan or ar-
rangement under which the only con-
tributions are discretionary on the 
part of the sponsor, there has not 
been an employer contribution made 
to the plan or arrangement for the 2- 
plan-year period ending with the last 
plan year ending in the second pre-
ceding calendar year and it is not rea-
sonable to assume that an employer 
contribution will be made for the plan 
year ending in the preceding calendar 
year. 
‘‘(2) EXCLUDABLE EMPLOYEES.—An employer 
may elect to exclude from treatment as applicable 
employees under subparagraph (A)— 
VerDate Aug 31 2005 
18:00 Oct 10, 2006
Jkt 059200
PO 00000
Frm 00007
Fmt 6652
Sfmt 6201
E:\BILLS\H6210.IH
H6210
hsrobinson on PROD1PC76 with BILLS
‘‘(A) 
employees 
described 
in 
section 
410(b)(3), 
‘‘(B) employees who have not attained the 
age of 18 before the beginning of the calendar 
year, 
‘‘(C) employees who have not completed at 
least 3 months of service with the employer, 
‘‘(D) employees who will be eligible to par-
ticipate in a qualified plan or arrangement of 
the employer upon completion of eligibility re-
quirements described in section 410(a)(1)(A) 
(without regard to section 410(a)(1)(B)), 
‘‘(E) employees who are eligible to make 
salary reduction contributions under an ar-
rangement which meets the requirements of 
section 403(b), and 
‘‘(F) all employees of the employer if the 
employer maintains an arrangement described 
in section 408(p). 
‘‘(3) QUALIFIED
PLAN
OR
ARRANGEMENT.— 
The term ‘qualified plan or arrangement’ means a 
plan, contract, pension, or trust described in section 
219(g)(5). 
VerDate Aug 31 2005 
18:00 Oct 10, 2006
Jkt 059200
PO 00000
Frm 00008
Fmt 6652
Sfmt 6201
E:\BILLS\H6210.IH
H6210
hsrobinson on PROD1PC76 with BILLS
‘‘(4) EXCEPTION FOR EMPLOYEES OF GOVERN-
MENTS AND CHURCHES.—The term ‘applicable em-
ployee’ shall not include an employee of— 
‘‘(A) a government or entity described in 
section 414(d), or 
‘‘(B) a church or a convention or associa-
tion of churches which is exempt from tax 
under section 501, including any employee de-
scribed in section 414(e)(3)(B). 
‘‘(5) DESIGNATION
OF
APPLICABLE
EMPLOY-
EES.—The Secretary shall issue guidelines for deter-
mining the class or classes of employees to be cov-
ered by a payroll deposit IRA arrangement. Such 
guidelines shall provide that if an employer elects 
under paragraph (2) to exclude employees from the 
arrangement, the employer shall specify the classi-
fication or categories of employees who are not so 
covered. 
‘‘(d) PAYROLL
DEPOSIT
IRA CONTRIBUTIONS 
TREATED LIKE OTHER CONTRIBUTIONS TO INDIVIDUAL 
RETIREMENT PLANS.— 
‘‘(1) TAX TREATMENT UNAFFECTED.—The fact 
that a contribution to an individual retirement plan 
is made on behalf of an employee under a payroll de-
posit IRA arrangement instead of being made di-
VerDate Aug 31 2005 
18:00 Oct 10, 2006
Jkt 059200
PO 00000
Frm 00009
Fmt 6652
Sfmt 6201
E:\BILLS\H6210.IH
H6210
hsrobinson on PROD1PC76 with BILLS
rectly by the employee shall not affect the deduct-
ibility or other tax treatment of the contribution or 
of other amounts under this title. 
‘‘(2) PAYROLL SAVINGS CONTRIBUTIONS TAKEN 
INTO ACCOUNT.—Any contribution made on behalf 
of an employee under a payroll deposit IRA arrange-
ment shall be taken into account in applying the lim-
itations on contributions to individual retirement 
plans and the other provisions of this title applicable 
to individual retirement plans as if the contribution 
had been made directly by the employee. 
‘‘(e) EXCEPTION FOR CERTAIN SMALL AND NEW 
EMPLOYERS.— 
‘‘(1) IN GENERAL.—The requirements of this 
section shall not apply for any calendar year to an 
employer if— 
‘‘(A) the employer did not have more than 
10 employees who received at least $5,000 of 
compensation from the employer for the pre-
ceding calendar year, or 
‘‘(B) was not in existence at all times dur-
ing the 2 preceding calendar years and did not 
have more than 100 employees who received at 
least $5,000 of compensation from the employer 
VerDate Aug 31 2005 
18:00 Oct 10, 2006
Jkt 059200
PO 00000
Frm 00010
Fmt 6652
Sfmt 6201
E:\BILLS\H6210.IH
H6210
hsrobinson on PROD1PC76 with BILLS
on any day during either of the 2 preceding cal-
endar years. 
‘‘(2) OPERATING RULES.—In determining the 
number of employees for purposes of this sub-
section— 
‘‘(A) any rule applicable in determining the 
number of employees for purposes of section 
408(p)(2)(C) shall be applicable under this sub-
section, 
‘‘(B) all members of the same family 
(within the meaning of section 318(a)(1)) shall 
be treated as 1 individual, and 
‘‘(C) any reference to an employer shall in-
clude a reference to any predecessor employer. 
‘‘(f) DEPOSITS TO INDIVIDUAL RETIREMENT PLANS 
OTHER THAN THOSE SELECTED BY EMPLOYEE.— 
‘‘(1) IN GENERAL.—An employer shall not be 
treated as failing to satisfy the requirements of this 
section or any other provision of this title merely be-
cause the employer makes all contributions (or all 
contributions on behalf of employees who do not 
specify an individual retirement plan, trustee, or 
issuer to receive the contributions) to— 
‘‘(A) individual retirement plans specified 
in paragraph (2), or 
VerDate Aug 31 2005 
18:00 Oct 10, 2006
Jkt 059200
PO 00000
Frm 00011
Fmt 6652
Sfmt 6201
E:\BILLS\H6210.IH
H6210
hsrobinson on PROD1PC76 with BILLS
‘‘(B) individual retirement plans under the 
payroll tax deposit system established under 
paragraph (3). 
‘‘(2) PLANS OF A DESIGNATED TRUSTEE OR 
ISSUER.—An employer may elect to have contribu-
tions for all applicable employees participating in a 
payroll deposit IRA arrangement made to individual 
retirement plans of a designated trustee or issuer 
under the arrangement. The preceding sentence 
shall not apply unless each participant is notified in 
writing that the participant’s balance may be trans-
ferred without cost or penalty to another individual 
retirement plan established by or on behalf of the 
participant. 
‘‘(3) PAYROLL
TAX
DEPOSIT
SYSTEM.—The 
Secretary, in consultation with the TSP II Board, 
shall establish a system under which an employer— 
‘‘(A) includes with each deposit of tax re-
quired to be deducted and withheld under chap-
ter 24 the aggregate amounts, for the period 
covered by the deposit, which applicable employ-
ees designated under subsection (b)(1)(A) (or 
are deemed to have designated under subsection 
(b)(2)(F)(ii) or under an automatic contribu-
tion arrangement described in subsection (g)) 
VerDate Aug 31 2005 
18:00 Oct 10, 2006
Jkt 059200
PO 00000
Frm 00012
Fmt 6652
Sfmt 6201
E:\BILLS\H6210.IH
H6210
hsrobinson on PROD1PC76 with BILLS
for contribution to individual retirement plans, 
established on behalf of the employees under 
paragraph (4), and 
‘‘(B) specifies, in such manner as the Sec-
retary may prescribe, for each applicable em-
ployee for whom a contribution is to be made 
the following information: 
‘‘(i) The employee’s name and TIN. 
‘‘(ii) The amount of the contribution. 
‘‘(iii) The investment options selected 
by the employee (or deemed to have been 
selected by the employee under such auto-
matic contribution arrangement) and the 
amount of the contribution allocated to 
each option. 
‘‘(4) ESTABLISHMENT AND MAINTENANCE OF 
ACCOUNTS
UNDER
PAYROLL
TAX
DEPOSIT
SYS-
TEM.— 
‘‘(A) IN GENERAL.—Subject to the provi-
sions of this section and section 408C, the TSP 
II Board shall provide for the establishment 
and maintenance of individual retirement plans 
(including automatic IRAs) into which contribu-
tions may be deposited through the payroll tax 
VerDate Aug 31 2005 
18:00 Oct 10, 2006
Jkt 059200
PO 00000
Frm 00013
Fmt 6652
Sfmt 6201
E:\BILLS\H6210.IH
H6210
hsrobinson on PROD1PC76 with BILLS
deposit system. To the maximum extent prac-
ticable, the TSP II Board shall— 
‘‘(i) enter into contracts with persons 
eligible to be trustees of individual retire-
ment plans under section 408 to establish 
such plans, to provide the investment 
funds and investment management, and to 
provide notice, record keeping, and other 
administrative services, and 
‘‘(ii) ensure that the costs of invest-
ment management and administration are 
kept to a minimum, including through con-
sideration of the use of investments which 
involve passive management and which 
seek to replicate the performance of a por-
tion of the market. 
‘‘(B) PAYROLL DEPOSIT FEATURES.—The 
TSP II Board shall establish procedures so that 
contributions may be made to individual retire-
ment plans (including automatic IRAs) through 
the payroll tax deposit system described in 
paragraph (3) without undue administrative or 
paperwork requirements on employers partici-
pating in the payroll tax deposit system. Such 
VerDate Aug 31 2005 
18:00 Oct 10, 2006
Jkt 059200
PO 00000
Frm 00014
Fmt 6652
Sfmt 6201
E:\BILLS\H6210.IH
H6210
hsrobinson on PROD1PC76 with BILLS
procedures shall ensure that only 1 such plan 
may be established for each TIN. 
‘‘(C) LIMITATION
ON
ROLLOVERS
TO 
PLANS OUTSIDE THE SYSTEM.—If— 
‘‘(i) any amount is paid or distributed 
out of an individual retirement plan estab-
lished under this paragraph, and 
‘‘(ii) such amount is paid into an indi-
vidual retirement plan established outside 
of the payroll tax deposit system, 
the payment described in clause (ii) shall be 
treated as a rollover contribution for purposes 
of section 408(d)(3) if and only if the balance 
to the credit of the individual in such individual 
retirement plan or arrangement immediately be-
fore the payment described in clause (i) was at 
least $15,000. 
‘‘(g) COORDINATION WITH AUTOMATIC ENROLL-
MENT AND OTHER DEFAULT ELECTION PROVISIONS.— 
‘‘(1) IN GENERAL.—A payroll deposit IRA ar-
rangement may provide that contributions under the 
arrangement will be made pursuant to an automatic 
contribution arrangement but only if the arrange-
ment meets requirements similar to the require-
ments applicable to an eligible automatic contribu-
VerDate Aug 31 2005 
18:00 Oct 10, 2006
Jkt 059200
PO 00000
Frm 00015
Fmt 6652
Sfmt 6201
E:\BILLS\H6210.IH
H6210
hsrobinson on PROD1PC76 with BILLS
tion arrangement under section 414(w). The Sec-
retary shall modify such requirements to the extent 
necessary to carry out the purposes of this section. 
‘‘(2) DEFAULT INVESTMENTS.—If an employee 
is deemed under an automatic contribution arrange-
ment to have made an election to participate in a 
payroll deposit IRA arrangement— 
‘‘(A) the employee shall be deemed to have 
made an election to make contributions in the 
amount specified in paragraph (3), 
‘‘(B) such contributions shall be trans-
ferred to— 
‘‘(i) an automatic IRA, or, 
‘‘(ii) if the employer has made an elec-
tion under subsection (f)(2), to an indi-
vidual retirement plan of the designated 
trustee or issuer but only if the require-
ments of subparagraph (C) are met with 
respect to such individual retirement plan, 
and 
‘‘(C) such contributions shall be invested 
as provided in paragraph (4). 
‘‘(3) AMOUNT OF CONTRIBUTIONS.— 
‘‘(A) IN GENERAL.—The amount specified 
in this paragraph is 3 percent of compensation. 
VerDate Aug 31 2005 
18:00 Oct 10, 2006
Jkt 059200
PO 00000
Frm 00016
Fmt 6652
Sfmt 6201
E:\BILLS\H6210.IH
H6210
hsrobinson on PROD1PC76 with BILLS
‘‘(B) AUTHORITY OF BOARD TO PROVIDE 
FOR ANNUAL INCREASES.—The TSP II Board 
may by regulation provide for annual increases 
in the percentage of compensation an employee 
is deemed to have elected under paragraph (2) 
but in no event shall the percentage of com-
pensation an employee is deemed to have elect-
ed exceed 8 percent. 
‘‘(C) CONTRIBUTION
LIMIT.—The con-
tributions under paragraph (2) on behalf of an 
employee for any calendar year shall not exceed 
the dollar limits applicable to the employee for 
the calendar year under section 219 or 408A. 
‘‘(4) INVESTMENT
IN
LIFE
CYCLE
FUND
OR 
OTHER INVESTMENTS SPECIFIED BY THE BOARD.— 
Amounts contributed under paragraph (2) shall be 
invested in— 
‘‘(A) a life cycle fund similar to the life 
cycle funds offered under the Thrift Savings 
Fund established under subchapter III of chap-
ter 84 of title 5, United States Code, or 
‘‘(B) such other investment or investments 
as the TSP II Board specifies in regulations 
and which entails asset allocation and extensive 
diversification. 
VerDate Aug 31 2005 
18:00 Oct 10, 2006
Jkt 059200
PO 00000
Frm 00017
Fmt 6652
Sfmt 6201
E:\BILLS\H6210.IH
H6210
hsrobinson on PROD1PC76 with BILLS
A fund or investment shall meet the requirements of 
this paragraph only if it is consistent with regula-
tions prescribed by the Secretary of Labor under 
section 404(c)(5) of the Employee Retirement In-
come Security Act of 1974. 
‘‘(5) COORDINATION
WITH
WITHHOLDING.— 
The Secretary shall modify the withholding exemp-
tion certificate under section 3402(f) so that any no-
tice and election requirements with respect to an 
automatic contribution arrangement which is part of 
a payroll deposit IRA arrangement may be met 
through the use of such certificate. 
‘‘(h) MODEL NOTICE.—The Secretary, in consulta-
tion with the TSP II Board, shall— 
‘‘(1) provide a model notice, written in a man-
ner calculated to be understandable to the average 
worker, that is simple for employers to use— 
‘‘(A) to notify employees of the require-
ment under this section for the employer to pro-
vide certain employees with the opportunity to 
participate in a payroll deposit IRA arrange-
ment, and 
‘‘(B) to satisfy the requirements of sub-
section (b)(2)(D). 
VerDate Aug 31 2005 
18:00 Oct 10, 2006
Jkt 059200
PO 00000
Frm 00018
Fmt 6652
Sfmt 6201
E:\BILLS\H6210.IH
H6210
hsrobinson on PROD1PC76 with BILLS
‘‘(2) provide uniform forms for enrollment, in-
cluding automatic enrollment, in a payroll deposit 
IRA arrangement, and 
‘‘(3) establish a web site or other electronic 
means for small employers to access and use to ob-
tain information on payroll deposit IRA arrange-
ments and to obtain required notices and forms.’’. 
(b) PREEMPTION OF CONFLICTING STATE LAWS.— 
Section 514(e)(1) of the Employee Retirement Income Se-
curity Act of 1974 (29 U.S.C. 1144(e)(1)), as added by 
section 902 of the Pension Protection Act of 2006, is 
amended to read as follows: 
‘‘(1) IN GENERAL.—Notwithstanding any other 
provision of this section, this title shall supersede 
any law of a State which would directly or indirectly 
prohibit or restrict— 
‘‘(A) the inclusion in any plan of an auto-
matic contribution arrangement, or 
‘‘(B) the establishment or operation of a 
deposit IRA arrangement meeting the require-
ments of section 408B of the Internal Revenue 
Code of 1986 (and the inclusion in such ar-
rangement of an automatic contribution ar-
rangement). 
VerDate Aug 31 2005 
18:00 Oct 10, 2006
Jkt 059200
PO 00000
Frm 00019
Fmt 6652
Sfmt 6201
E:\BILLS\H6210.IH
H6210
hsrobinson on PROD1PC76 with BILLS
The Secretary may prescribe regulations which 
would establish minimum standards that an auto-
matic contribution arrangement would be required to 
satisfy in order for this subsection to apply in the 
case of such arrangement. This subsection shall 
apply to a plan or arrangement without regard to 
whether this title applies to such plan or arrange-
ment.’’. 
(c) NOTICE
OF
AVAILABILITY
OF
INVESTMENT 
GUIDELINES.—Section 408(i) (relating to reports) is 
amended by adding at the end the following new sentence: 
‘‘Any report furnished under paragraph (2) to an indi-
vidual shall include notice of the availability of, and meth-
ods of acquiring, the basic investment guidelines prepared 
by the Secretary of Labor.’’. 
(d) DEVELOPMENT OF BASIC INVESTMENT GUIDE-
LINES.— 
(1) IN
GENERAL.—The Secretary of Labor 
shall, in consultation with the Secretary of Treasury, 
develop and publish basic guidelines for investing for 
retirement. Except as otherwise provided by the Sec-
retary of Labor, such guidelines shall include— 
(A) information on the benefits of diver-
sification, 
VerDate Aug 31 2005 
18:00 Oct 10, 2006
Jkt 059200
PO 00000
Frm 00020
Fmt 6652
Sfmt 6201
E:\BILLS\H6210.IH
H6210
hsrobinson on PROD1PC76 with BILLS
(B) information on the essential dif-
ferences, in terms of risk and return, between 
various pension plan investments, including 
stocks, bonds, mutual funds, and money market 
investments, 
(C) information on how an individual’s 
pension plan investment allocations may differ 
depending on the individual’s age and years to 
retirement and on other factors determined by 
the Secretary of Labor, 
(D) sources of information where individ-
uals may learn more about pension rights, indi-
vidual investing, and investment advice, and 
(E) such other information related to indi-
vidual investing as the Secretary of Labor de-
termines appropriate. 
(2) CALCULATION INFORMATION.—The guide-
lines under paragraph (1) shall include addresses for 
Internet sites and worksheets which a participant or 
beneficiary in a pension plan may use to calculate— 
(A) the retirement age value of the partici-
pant’s or beneficiary’s nonforfeitable pension 
benefits under the plan (expressed as an annu-
ity amount and determined by reference to var-
VerDate Aug 31 2005 
18:00 Oct 10, 2006
Jkt 059200
PO 00000
Frm 00021
Fmt 6652
Sfmt 6201
E:\BILLS\H6210.IH
H6210
hsrobinson on PROD1PC76 with BILLS
ied historical annual rates of return and annu-
ity interest rates), and 
(B) other important amounts relating to 
retirement savings, including the amount which 
a participant or beneficiary would be required 
to save annually to provide a retirement income 
equal to various percentages of their current 
salary (adjusted for expected growth prior to 
retirement). 
(3) PUBLIC
COMMENT.—The Secretary of 
Labor shall provide at least 90 days for public com-
ment on proposed guidelines before publishing the 
final guidelines. 
(4) RULES
RELATING
TO
GUIDELINES.—The 
guidelines under paragraph (1)— 
(A) shall be written in a manner calculated 
to be understood by the average plan partici-
pant, and 
(B) may be delivered in written, electronic, 
or other appropriate manner to the extent such 
manner would ensure that the guidelines are 
reasonably accessible to participants and bene-
ficiaries. 
(e) PENALTY FOR FAILURE TO PROVIDE ACCESS TO 
PAYROLL SAVINGS ARRANGEMENTS.—Chapter 43 (relat-
VerDate Aug 31 2005 
18:00 Oct 10, 2006
Jkt 059200
PO 00000
Frm 00022
Fmt 6652
Sfmt 6201
E:\BILLS\H6210.IH
H6210
hsrobinson on PROD1PC76 with BILLS
ing to qualified pension, etc., plans) is amended by adding 
at the end the following new section: 
‘‘SEC. 4980H. REQUIREMENTS FOR EMPLOYERS TO PRO-
VIDE EMPLOYEES ACCESS TO PAYROLL DE-
POSIT IRA ARRANGEMENTS. 
‘‘(a) GENERAL RULE.—There is hereby imposed a 
tax on any failure by an employer to meet the require-
ments of subsection (d) for a calendar year. 
‘‘(b) AMOUNT.— 
‘‘(1) IN GENERAL.—The amount of the tax im-
posed by subsection (a) on any failure for any cal-
endar year shall be $100 with respect to each em-
ployee to whom such failure relates. 
‘‘(2) TAX NOT TO APPLY WHERE FAILURE NOT 
DISCOVERED
AND
REASONABLE
DILIGENCE
EXER-
CISED.—No tax shall be imposed by subsection (a) 
on any failure during any period for which it is es-
tablished to the satisfaction of the Secretary that the 
employer subject to liability for the tax did not know 
that the failure existed and exercised reasonable dili-
gence to meet the requirements of subsection (d). In 
no event shall the tax be imposed with respect to 
any failure that ends before the expiration of 90 
days after the employer has responded or has had a 
VerDate Aug 31 2005 
18:00 Oct 10, 2006
Jkt 059200
PO 00000
Frm 00023
Fmt 6652
Sfmt 6201
E:\BILLS\H6210.IH
H6210
hsrobinson on PROD1PC76 with BILLS