I
106TH CONGRESS
2D SESSION
H. R. 5549
To amend the Employee Retirement Income Security Act of 1974 to improve
the retirement security of American families.
IN THE HOUSE OF REPRESENTATIVES
OCTOBER 25, 2000
Mr. ANDREWS (for himself, Mr. CLAY, Mr. KILDEE, Mr. OWENS, Mr. PAYNE,
Mrs. MINK of Hawaii, Ms. WOOLSEY, Mr. ROMERO-BARCELO´, Mr.
FATTAH, Mr. TIERNEY, Mr. KIND, Ms. SANCHEZ, Mr. FORD, Mr.
KUCINICH, and Mr. HOLT) introduced the following bill; which was re-
ferred to the Committee on Education and the Workforce, and in addition
to the Committees on Armed Services, and Government Reform, for a pe-
riod to be subsequently determined by the Speaker, in each case for con-
sideration of such provisions as fall within the jurisdiction of the com-
mittee concerned
A BILL
To amend the Employee Retirement Income Security Act
of 1974 to improve the retirement security of American
families.
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
‘‘Retirement Enhancement Act of 2000’’.
(b) TABLE OF CONTENTS.—The table of contents is
as follows:
Sec. 1. Short title and table of contents.
TITLE I—IMPROVED PARTICIPATION AND VESTING
Sec. 101. Minimum coverage requirements.
Sec. 102. Minimum participation requirements.
Sec. 103. Faster vesting of benefits under defined contribution plans.
Sec. 104. Model small employer group pension plan.
Sec. 105. Enforcement under ERISA of requirements for simplified employee
pensions.
TITLE II—IMPROVED PENSION PROTECTIONS FOR WOMEN
Sec. 201. Elimination of integration with workers’ compensation and similar
benefits.
Sec. 202. Spousal consent required for distributions from defined contribution
plans.
Sec. 203. Modifications of joint and survivor annuity requirements.
Sec. 204. Division of pension benefits upon divorce.
Sec. 205. Periods of family and medical leave treated as hours of service for
pension participation and vesting.
Sec. 206. Right of spouse to know distribution information.
Sec. 207. Repeal of reduction in military survivor benefit plan annuities at age
62.
Sec. 208. Survivor annuities for widows, widowers, and former spouses of Fed-
eral employees who die before attaining age for deferred annu-
ity under Civil Service Retirement System.
Sec. 209. Order of precedence for disposition of amounts remaining in the
thrift savings account of a Federal employee (or former em-
ployee) who dies before making an effective election controlling
such disposition.
Sec. 210. Interest on amounts paid to make up for certain civil service annuity
benefits wrongfully denied.
Sec. 211. Amendments relating to effective date provision of the Civil Service
Retirement Spouse Equity Act of 1984.
TITLE III—SIMPLIFIED INVESTMENT STANDARDS
Sec. 301. Exemption from prohibited transaction rules for emergent trans-
actions.
Sec. 302. Alternative method for publishing the pendency of prohibited trans-
action exemptions.
Sec. 303. Employer protection from liability for the provision of investment ad-
vice.
Sec. 304. Participation of participants in trusteeship of defined contribution
plans.
Sec. 305. Removal of $500,000 cap on bonding requirement.
Sec. 306. Disclosure regarding investments and voting of proxies.
Sec. 307. Diversification in defined contribution plan investments.
Sec. 308. Diversification of investments under employee stock ownership plans
by participants and beneficiaries over 55 years of age.
TITLE IV—IMPROVEMENTS IN PENSION INFORMATION AND
ENFORCEMENT
Sec. 401. Periodic pension benefit statements.
Sec. 402. Benefit Statements required to include information on investment
performance.
Sec. 403. Disclosures to Secretary of Labor relating to plan termination and re-
lating to plan sponsors after acquisition or merger of plans.
Sec. 404. Disclosure of operating income of employers adjusted so as to exclude
certain components mandated in FASB rules governing ac-
counting for defined benefit pension plans.
Sec. 405. Specific information regarding multiemployer plans included in an-
nual report.
Sec. 406. Limited scope audits.
Sec. 407. Reporting and enforcement requirements for employee benefit plans.
Sec. 408. Study of pension trends and characteristics.
Sec. 409. Early resolution program for pension benefit claims.
Sec. 410. De novo review of benefit determinations.
Sec. 411. Allowable relief.
Sec. 412. Civil penalty for breach of fiduciary responsibility.
Sec. 413. Assessment by Secretary of Labor of penalties for failures to meet
disclosure requirements.
Sec. 414. Missing participants.
Sec. 415. Increase in guaranteed benefit level for multiemployer plans.
TITLE V—IMPROVED PENSION PROTECTIONS FOR THE
CHANGING WORKFORCE
Sec. 501. Loans from retirement plans for health insurance and job training ex-
penses.
Sec. 502. Immediate distributions permitted only if distribution rolled to a
qualified plan.
Sec. 503. Prompt distribution from defined contribution plans upon termination
of participant’s covered employment.
Sec. 504. Extended period for recoupment of overpayments.
TITLE VI—GENERAL PROVISIONS
Sec. 601. General effective date.
Sec. 602. Plan amendments.
TITLE I—IMPROVED
PARTICIPATION AND VESTING
SEC. 101. MINIMUM COVERAGE REQUIREMENTS.
(a) IN GENERAL.—Part 2 of subtitle B of title I of
the Employee Retirement Income Security Act of 1974
(29 U.S.C. 201 et seq.) is amended by inserting after sec-
tion 201 the following new section:
‘‘(3) employees who are nonresident aliens and
who receive no earned income (within the meaning
of section 911(d)(2) of the Internal Revenue Code of
1986) from the employer which constitutes income
from sources within the United States (within the
meaning of section 861(a)(3) of such Code).
Paragraph (1) shall not apply with respect to coverage of
employees under a plan pursuant to an agreement under
such paragraph. Paragraph (2) shall not apply in the case
of a plan which provides contributions or benefits for em-
ployees whose principal duties are not customarily per-
formed aboard aircraft in flight.
‘‘(c) EXCLUSION OF EMPLOYEES NOT MEETING AGE
AND SERVICE REQUIREMENTS.—
‘‘(1) IN GENERAL.—If a plan—
‘‘(A) prescribes, consistent with section
202(a), minimum age and service requirements
as a condition of participation, and
‘‘(B) excludes all employees not meeting
such requirements from participation,
then such employees shall be excluded from consider-
ation for purposes of this section.
‘‘(2) REQUIREMENTS MAY BE MET SEPARATELY
WITH RESPECT TO EXCLUDED GROUP.—If employees
not meeting the minimum age or service require-
ments of section 202(a)(1) (without regard to sub-
paragraph (B) thereof) are covered under a plan of
the employer which meets the requirements of sub-
section (a) separately with respect to such employ-
ees, such employees may be excluded from consider-
ation in determining whether any plan of the em-
ployer meets the requirements of subsection (a).
‘‘(3) REQUIREMENTS NOT TREATED AS BEING
MET BEFORE ENTRY DATE.—An employee shall not
be treated as meeting the age and service require-
ments described in this subsection until the first
date on which, under the plan, any employee with
the same age and service would be eligible to com-
mence participation in the plan.
‘‘(d) LINE OF BUSINESS EXCEPTION.—
‘‘(1) IN GENERAL.—If, under section 414(r) of
the Internal Revenue Code of 1986, an employer is
treated as operating separate lines of business for a
year, the employer may apply the requirements of
this section for such year separately with respect to
employees in each separate line of business.
‘‘(2) PLAN
MUST
BE
NONDISCRIMINATORY.—
Paragraph (1) shall not apply with respect to any
plan maintained by an employer unless such plan
benefits such employees as qualify under a classifica-
tion set up by the employer and found by the Sec-
retary of the Treasury not to be discriminatory in
favor of highly compensated employees.
‘‘(e) DEFINITIONS AND SPECIAL RULES.—For pur-
poses of this section—
‘‘(1) HIGHLY COMPENSATED EMPLOYEE.—The
term ‘highly compensated employee’ has the mean-
ing given such term by section 414(q) of the Inter-
nal Revenue Code of 1986.
‘‘(2) AGGREGATION RULES.—An employer may
elect to designate—
‘‘(A) 2 or more trusts,
‘‘(B) 1 or more trusts and 1 or more annu-
ity plans, or
‘‘(C) 2 or more annuity plans,
as part of 1 plan to determine whether the require-
ments of this section are met with respect to such
plan.
‘‘(3) SPECIAL
RULES
FOR
CERTAIN
DISPOSI-
TIONS OR ACQUISITIONS.—
‘‘(A) IN GENERAL.—If a person becomes,
or ceases to be, a member of a group described
in subsection (b), (c), (m), or (o) of section 414
of such Code, then the requirements of this sec-
tion shall be treated as having been met during
the transition period with respect to any plan
covering employees of such person or any other
member of such group if—
‘‘(i) such requirements were met im-
mediately before each such change, and
‘‘(ii) the coverage under such plan is
not significantly changed during the transi-
tion period (other than by reason of the
change in members of a group) or such
plan meets such other requirements as the
Secretary of the Treasury may prescribe
by regulation.
‘‘(B) TRANSITION PERIOD.—For purposes
of subparagraph (A), the term ‘transition pe-
riod’ means the period—
‘‘(i) beginning on the date of the
change in members of a group, and
‘‘(ii) ending on the last day of the 1st
plan year beginning after the date of such
change.
‘‘(4) ELIGIBILITY
TO
CONTRIBUTE.—In the
case of contributions which are subject to section
401(k) or 401(m) of the Internal Revenue Code of
1986, employees who are eligible to contribute (or
elect to have contributions made on their behalf)
shall be treated as benefiting under the plan.
‘‘(5) REGULATIONS.—The Secretary of the
Treasury shall prescribe such regulations as may be
necessary or appropriate to carry out the purposes
of this section.’’
(b) EMPLOYER MAY NOT REQUEST EMPLOYEE TO
WAIVE RIGHTS.—Section 203 of such Act (29 U.S.C.
1053) is amended by adding at the end the following new
subsection:
‘‘(f) An employer may not request an employee to
waive any right of coverage under, or participation in, any
pension plan which is granted by this title.’’
SEC. 102. MINIMUM PARTICIPATION REQUIREMENTS.
(a) IN GENERAL.—Sections 202(a)(3), 203(b)(2),
and 204(b)(4) of the Employee Retirement Income Secu-
rity Act of 1974 (29 U.S.C. 1052(a)(3), 1053(b)(2), and
1054(b)(4)) are each amended by striking ‘‘1,000 hours’’
each place it appears and inserting ‘‘750 hours’’.
(b) CONFORMING AMENDMENTS.—
(1) Sections 202(a)(3)(D), 203(b)(2)(D), and
204(b)(4)(E) 
(29 
U.S.C. 
1052(a)(3)(D),
1053(b)(2)(D), and 1054(b)(4)(E)) are each amend-
ed by striking ‘‘125 days’’ and inserting ‘‘94 days’’.
(2) Sections 202(b)(5)(B) and 203(b)(3)(E)(ii)
(29 U.S.C. 1052(b)(5)(B) and 1053(b)(3)(E)(ii))
are each amended by striking ‘‘501 hours’’ and in-
serting ‘‘376 hours’’.
(3) 
Section 
203(b)(3)(A) 
(29 
U.S.C.
1053(b)(3)(A)) is amended by striking ‘‘500 hours’’
and inserting ‘‘375 hours’’.
SEC. 103. FASTER VESTING OF BENEFITS UNDER DEFINED
CONTRIBUTION PLANS.
Paragraph (2) of section 203(a) of the Employee Re-
tirement Income Security Act of 1974 (29 U.S.C.
1053(a)) is amended by striking subparagraphs (A) and
(B) and inserting the following:
‘‘(A) A plan satisfies the requirements of
this subparagraph if an employee has a non-
forfeitable right to 100 percent of the employ-
ee’s accrued benefit derived from employer
contributions—
‘‘(i) in the case of a defined benefit
plan, as of completion by the employee of
at least 5 years of service, or
‘‘(ii) in the case of a defined contribu-
tion plan, as of completion by the employee
of at least 3 years of service.
‘‘(B) A plan satisfies the requirements of
this subparagraph if an employee has a non-
forfeitable right to a percentage of the employ-
ee’s accrued benefit derived from employer con-
tributions determined under the applicable table
set forth in clause (i) or (ii).
‘‘(i) In the case of a defined benefit
plan, the applicable table is the following:
The nonforfeitable
‘‘Years of service:
percentage is:
3 .......................................................................................
4 .......................................................................................
5 .......................................................................................
6 .......................................................................................
7 or more ..........................................................................
100
‘‘(ii) In the case of a defined contribu-
tion plan, the applicable table is the fol-
lowing:
The nonforfeitable
‘‘Years of service:
percentage is:
1 .......................................................................................
2 .......................................................................................
3 .......................................................................................
4 .......................................................................................
5 or more ..........................................................................
100’’.
SEC. 104. MODEL SMALL EMPLOYER GROUP PENSION
PLAN.
(a) IN GENERAL.—Section 206 of the Employee Re-
tirement Income Security Act of 1974 (29 U.S.C. 1056)
is amended by adding at the end the following new sub-
section:
‘‘(g) MODEL SIMPLIFIED PENSION PLANS.—
‘‘(1) ESTABLISHMENT OF MODEL PLAN.—The
Secretary, in consultation with the Secretary of the
Treasury, shall prescribe by regulations one or more
model simplified pension plans which would—
‘‘(A) provide simplicity and minimal ad-
ministrative responsibilities to employers and
provide adequate retirement benefits to employ-
ees upon adoption by an employer, including
models which could be established by a group of
small employers, an employee association, an
employer association, or a financial institution,
‘‘(B) cover all employees of the employer,
‘‘(C) provide for a joint and survivor op-
tion, and
‘‘(D) accept contributions from successive
employers,
‘‘(E) readily permit and accept rollovers to
and from other qualified plans (as defined in
section 203(e)(2)), and
‘‘(F) constitute a plan meeting the require-
ments of this Act and Internal Revenue Code of
1986.
In devising a model pension plan, the Secretary shall
consider the adequacy of existing simplified em-
ployee pension plan alternatives and may make rec-
ommendations to adopt such plans as model sim-
plified plans.
‘‘(2) ADVERTISEMENT OF MODEL PLAN.—The
Secretary, in consultation with the Secretary of the
Treasury and the Administrator of the Small Busi-
ness Administration, shall advertise the model plans
developed pursuant to paragraph (1), including
through contracts (to the extent provided in appro-
priation Acts) with applicable organizations, to en-
sure that small employers and their employees are
apprised of the availability of administratively simple
single and group pension plans.’’.
(b) INITIAL REGULATIONS.—Regulations under sec-
tion 206(g) of the Employee Retirement Income Security
Act of 1974 (added by this section) for the first model
simplified pension plans shall be issued within 12 months
of the date of the enactment of this Act.
(c) STUDY.—Not later than 3 years after the date
of the enactment of this Act, the Secretary of Labor and
the Secretary of the Treasury shall conduct a joint study
to determine the feasibility of permitting non-highly com-
pensated employees whose employer does not cover them
under a pension plan, and other non-covered individuals,
to seek an automatic payroll deduction or other deferral
mechanism to make contributions to a model plan similar
to one developed pursuant to section 206(g) of the Em-
ployee Retirement Income Security Act of 1974. Such Sec-
retaries shall submit a joint report to the Congress de-
scribing the results of such study and making such rec-
ommendations as the Secretaries determine necessary or
appropriate.
SEC. 105. ENFORCEMENT UNDER ERISA OF REQUIREMENTS
FOR SIMPLIFIED EMPLOYEE PENSIONS.
Subtitle A of title III of the Employee Retirement
Income Security Act of 1974 is amended by adding after
section 3004 (29 U.S.C. 1204) the following new section:
‘‘TREATMENT OF SIMPLIFIED EMPLOYEE PENSIONS
‘‘SEC. 3005. For purposes of part 5 of subtitle B of
title I, the requirements of section 408(k) of the Internal
Revenue Code of 1986 relating to simplified employee pen-
sions (as defined in section 408(k)(1) of such Code) shall
be treated as requirements of title I applicable to employee
pension benefit plans (as defined in section 3(2)) which
are such simplified employee pensions.’’.
TITLE II—IMPROVED PENSION
PROTECTIONS FOR WOMEN
SEC. 201. ELIMINATION OF INTEGRATION WITH WORKERS’
COMPENSATION AND SIMILAR BENEFITS.
Section 206 of the Employee Retirement Income Se-
curity Act of 1974 (29 U.S.C. 1056) is amended by adding
at the end the following new subsection:
‘‘(g) INTEGRATION WITH WORKERS’ COMPENSATION
AND SIMILAR BENEFITS PRECLUDED.—Benefits under an
employee pension benefit plan may not vary based on the
amount of benefits received by a participant or beneficiary
under an applicable worker’s compensation law, unemploy-
ment compensation law, or disability insurance law, or on
whether the participant or beneficiary is entitled to such
benefits.’’.
SEC. 202. SPOUSAL CONSENT REQUIRED FOR DISTRIBU-
TIONS 
FROM 
DEFINED 
CONTRIBUTION
PLANS.
(a) IN GENERAL.—Section 205(b) of the Employee
Retirement Income Security Act of 1974 (29 U.S.C.
1055(b)) is amended to read as follows:
‘‘(b)(1) This section shall apply to any defined benefit
plan and to any individual account plan.
‘‘(2) This section shall not apply to a plan which the
Secretary of the Treasury or his delegate has determined
is a plan described in section 404(c) of the Internal Rev-
enue Code of 1986 (or a continuation thereof) in which
participation is substantially limited to individuals who,
before January 1, 1976, ceased employment covered by
the plan.’’
(b) HARDSHIP DISTRIBUTION.—Section 205 of such
Act (29 U.S.C. 1055) is amended by adding at the end
the following new subsection:
‘‘(m) This section shall not apply to a hardship dis-
tribution under section 401(k)(2)(B)(i)(IV) of the Internal
Revenue Code of 1986.’’
(c) SPECIAL RULE FOR CASH-OUTS.—Section 205(g)
of such Act (29 U.S.C. 1055(g)) is amended by adding
at the end the following new paragraph:
‘‘(4) SPECIAL RULE FOR DEFINED CONTRIBU-
TION PLANS.—
‘‘(A) IN GENERAL.—In the case of an indi-
vidual account plan, notwithstanding paragraph
(2), if the present value of the qualified joint
and survivor annuity or the qualified preretire-
ment survivor annuity exceeds $10,000, the
plan may immediately distribute 50 percent of
the present value of such annuity to each
spouse, subject to the requirements of section
203(f) as if each spouse were a participant.
‘‘(B) EXCEPTION.—The plan may dis-
tribute a different percentage of the present
value of an annuity to each spouse if a court
order or contractual agreement between the
spouses provides for such different percentage.’’
SEC. 203. MODIFICATIONS OF JOINT AND SURVIVOR ANNU-
ITY REQUIREMENTS.
(a) AMOUNT OF ANNUITY.—
(1) IN
GENERAL.—Paragraph (1) of section
205(a) of the Employee Retirement Income Security
Act of 1974 (29 U.S.C. 1055(a)) is amended by in-
serting ‘‘or, at the election of the participant, shall
be provided in the form of a qualified joint and 75
percent survivor annuity’’ after ‘‘survivor annuity,’’.
(2) DEFINITION.—Subsection (d) of section 205
of such Act (29 U.S.C. 1055) is amended—
(A) by redesignating paragraphs (1) and
(2) as subparagraphs (A) and (B), respectively,
(B) by inserting ‘‘(1)’’ after ‘‘(d)’’, and
(C) by adding, after subparagraph B, the
following new paragraph:
‘‘(2) For purposes of this section, the term ‘qualified
joint and 75 percent survivor annuity’ means a joint and
survivor annuity under which the survivor annuity for the
life of the surviving spouse is equal to at least 75 percent
of the amount of the annuity which is payable during the
joint lives of the participant and spouse.’’
(3) CONFORMING AMENDMENTS.—
(A) Paragraph (1) of section 205(c) of
such Act (29 U.S.C. 1055) is amended by in-
serting ‘‘or qualified joint and 75 percent sur-
vivor annuity’’ after ‘‘qualified joint and sur-
vivor annuity’’.
(B) Subsection (e)(1) of such Act is
amended by inserting ‘‘or, if the participant has
so elected, a qualified joint and 75 percent sur-
vivor annuity’’ after ‘‘qualified joint and sur-
vivor annuity’’ each time it appears.
(b) ILLUSTRATION REQUIREMENT.—Clause (i) of
section 
205(c)(3)(A) 
of 
such 
Act 
(29 
U.S.C.
1055(c)(3)(A)) is amended to read as follows:
‘‘(i) the terms and conditions of each qualified
joint and survivor annuity and qualified joint and 75
percent survivor annuity offered, accompanied by an
illustration of the benefits under each such annuity
for the particular participant and spouse and an ac-
knowledgement form to be signed by the participant
and the spouse that they have read and considered
the illustration before any form of retirement benefit
is chosen.’’.
SEC. 204. DIVISION OF PENSION BENEFITS UPON DIVORCE.
(a) IN GENERAL.—Section 206(d)(3) of the Em-
ployee Retirement Income Security Act of 1974 (29
U.S.C. 1056(d)(3)) is amended by redesignating subpara-
graph (N) as subparagraph (O) and by inserting after
subparagraph (M) the following new subparagraph:
‘‘(N) SPECIAL
RULES
AND
PROCEDURES
FOR DOMESTIC RELATIONS ORDERS NOT SPECI-
FYING DIVISION OF PENSION BENEFITS.—
‘‘(i) IN
GENERAL.—In any case in
which—
‘‘(I) a domestic relations order
(including an annulment or other
order of marital dissolution) relates to
provision of marital property with re-
spect to a marriage of at least 5 years
duration between an individual who is
a participant in a pension plan and
such individual’s former spouse,
‘‘(II) such order, and all prior or-
ders (if any) described in subclause
(I) relating to such marriage, do not
specifically provide that pension bene-
fits were considered by the parties
and that no division of such benefits
is intended,
‘‘(III) such order is not a quali-
fied domestic relations order (as de-
termined without regard to this sub-
paragraph) and there is no other prior
qualified 
domestic 
relations 
order
issued in connection with the dissolu-
tion of the marriage to which such
order relates, and
‘‘(IV) the former spouse notifies
the plan within the period prescribed
under clause (vii) that the former
spouse is entitled to benefits under
the plan in accordance with the provi-
sions of this subparagraph,
such domestic relations order shall be
treated as a qualified domestic relations
order for purposes of this paragraph.
‘‘(ii) AMOUNT OF BENEFIT.—Any do-
mestic relations order treated as a quali-
fied domestic relations order under clause
(i) shall be treated as specifying that the
former spouse is entitled to the applicable
percentage of the marital share of the par-
ticipant’s accrued benefit.
‘‘(iii) MARITAL SHARE.—For purposes
of clause (ii), the marital share of a par-
ticipant’s accrued benefit is an amount
equal to the product of—
‘‘(I) such benefit as of the date
of the first payment under the plan
(to the extent such accrued benefit is
vested on the date of the dissolution
of the marriage or any later date),
and
‘‘(II) a fraction, the numerator of
which is the period of participation by
the participant under the plan start-
ing with the date of marriage and
ending with the date of dissolution of
marriage, and the denominator of
which is the total period of participa-
tion by the participant under the plan.
‘‘(iv) 
APPLICABLE
PERCENTAGE.—
For purposes of clause (ii), the applicable
percentage is—
‘‘(I) except as provided in sub-
clause (II), 50 percent, and
‘‘(II) in the case of a participant
who fails to provide the plan with no-
tice of a domestic relations order
within the time prescribed under
clause (v), 67 percent.
‘‘(v) NOTICE BY PARTICIPANT.—Each
participant in a pension plan shall, within
60 days after the dissolution of the mar-
riage of the participant—
‘‘(I) notify the plan administrator
of the plan of such dissolution, and
‘‘(II) provide to the plan adminis-
trator a copy of the domestic relations
order (including an annulment or
other order of marital dissolution)
providing for such dissolution and the
last known address of the partici-
pant’s former spouse.
‘‘(vi) NOTICE
BY
PLAN
ADMINIS-
TRATOR.—Each plan administrator receiv-
ing notice under clause (v) shall promptly
notify the former spouse of a participant of
such spouse’s rights under this subpara-
graph, including the time period within
which such spouse is required to notify the
plan of the spouse’s intention to claim
rights under this subparagraph.
‘‘(vii) NOTICE BY FORMER SPOUSE.—
A former spouse may notify the plan ad-
ministrator of such spouse’s intent to claim
rights under this subparagraph at any time
before the last day of the 1-year period fol-
lowing receipt of notice under clause (vi).
‘‘(viii) COORDINATION
WITH
PLAN
PROCEDURES.—The determination under
subparagraph (G)(i)(II) with respect to a
domestic relations order to which this sub-
paragraph applies shall be made within a
reasonable period of time after the plan
administrator receives the notice described
in clause (vii).
‘‘(ix) INTERPRETATION AS QUALIFIED
DOMESTIC RELATIONS ORDER.—Each plan
shall establish reasonable rules for deter-
mining how any such deemed domestic re-
lations order is to be interpreted under the
plan so as to constitute a qualified domes-
tic relations order that satisfies subpara-
graphs (C) through (E) (and a copy of
such rules shall be provided to such former
spouse promptly after delivery of the di-
vorce decree). Such rules—
‘‘(I) may delay the effect of such
an order until the earlier of the date
the participant is fully vested or has
terminated employment,
‘‘(II) may allow the former
spouse to be distributed immediately,
‘‘(III) shall permit the former
spouse to be paid not later than the
earliest retirement age under the plan
or the participant’s death,
‘‘(IV) may require the submitter
of the divorce decree to present a
marriage certificate or other evidence
of the marriage date to assist in ben-
efit calculations, and
‘‘(V) may conform to the rules
applicable to qualified domestic rela-
tions orders regarding form or type of
benefit.’’
(b) EFFECTIVE DATE.—The amendment made by
this section shall apply with respect to notifications made
by former spouses pursuant to section 206(d)(3)(N)(vii)
of the Employee Retirement Income Security Act of 1974
after December 31, 2000.
SEC. 205. PERIODS OF FAMILY AND MEDICAL LEAVE
TREATED AS HOURS OF SERVICE FOR PEN-
SION PARTICIPATION AND VESTING.
(a) PARTICIPATION.—
(1) IN
GENERAL.—Paragraph (3) of section
202(a) of the Employee Retirement Income Security
Act of 1974 (relating to minimum participation
standards) is amended by adding at the end the fol-
lowing new subparagraph:
‘‘(E)(i) For purposes of this subsection, in the case
of an individual who is absent from work on leave required
to be given to such individual under the Family and Med-
ical Leave Act of 1993, the plan shall treat as hours of
service—
‘‘(I) the hours of service which otherwise would
normally have been credited to such individual but
for such absence, or
‘‘(II) in any case in which the plan is unable to
determine the hours described in subclause (I), 8
hours of service per day of absence.
‘‘(ii) The hours described in clause (i) shall be treated
as hours of service as provided in this subparagraph—
‘‘(I) only in the year in which the absence from
work begins, if section 203(b)(2)(E)(ii)(I) requires
hours to be credited to the year in which the absence
from work begins, or
‘‘(II) in any other case, in the immediately fol-
lowing year.’’
(2) COORDINATION WITH TREATMENT OF MA-
TERNITY AND PATERNITY ABSENCES UNDER BREAK
IN SERVICE RULES.—Subparagraph (A) of section
202(b)(5) of such Act is amended by adding at the
end of clause (i) the following new sentence: ‘‘The
preceding sentence shall apply to an absence from
work only if no part of such absence is required to
be given under the Family and Medical Leave Act
of 1993.’’
(b) VESTING.—
(1) IN
GENERAL.—Paragraph (2) of section
203(b) of such Act (relating to minimum vesting
standards) is amended by adding at the end the fol-
lowing new subparagraph:
‘‘(E)(i) For purposes of this subsection, in the case
of an individual who is absent from work on leave required
to be given to such individual under the Family and Med-
ical Leave Act of 1993, the plan shall treat as hours of
service—
‘‘(I) the hours of service which otherwise would
normally have been credited to such individual but
for such absence, or
‘‘(II) in any case in which the plan is unable to
determine the hours described in subclause (I), 8
hours of service per day of absence.
‘‘(ii) The hours described in clause (i) shall be treated
as hours of service as provided in this subparagraph—
‘‘(I) only in the year in which the absence from
work begins, if the participant’s rights in his ac-
crued benefit derived from employer contributions
are to any extent not nonforfeitable and the partici-
pant would have a year of service solely because the
period of absence is treated as hours of service as
provided in clause (i); or
‘‘(II) in any other case, in the immediately fol-
lowing year.’’
(2) COORDINATION WITH TREATMENT OF MA-
TERNITY AND PATERNITY ABSENCES UNDER BREAK
IN
SERVICE
RULES.—Clause 
(i) 
of 
section
203(b)(3)(E) of such Act is amended by adding at
the end of clause (i) the following new sentence:
‘‘The preceding sentence shall apply to an absence
from work only if no part of such absence is re-
quired to be given under the Family and Medical
Leave Act of 1993.’’
(c) APPLICATION TO CURRENT EMPLOYEES.—The
amendments made by this section shall not apply to any
employee who does not have at least 1 hour of service in
any plan year beginning after December 31, 2000.
SEC. 206. RIGHT OF SPOUSE TO KNOW DISTRIBUTION IN-
FORMATION.
Paragraph (3) of section 205(c) of the Employee Re-
tirement Income Security Act of 1974 (29 U.S.C.
1055(c)(3)) is amended by adding at the end the following
new subparagraph:
‘‘(C) EXPLANATION TO SPOUSE.—At the
time a plan provides a participant with a writ-
ten explanation under subparagraph (A) or (B),
such plan shall provide a copy of such expla-
nation to such participant’s spouse. If the last
known address of the spouse is the same as the
last known address of the participant, the re-
quirement of the preceding sentence shall be
treated as met if the copy referred to in the
preceding sentence is included in a single mail-
ing made to such address and addressed to both
such participant and spouse.’’.
SEC. 207. REPEAL OF REDUCTION IN MILITARY SURVIVOR
BENEFIT PLAN ANNUITIES AT AGE 62.
(a) COMPUTATION
OF ANNUITY
FOR
A SPOUSE,
FORMER SPOUSE, OR CHILD.—Subsection (a) of section
1451 of title 10, United States Code, is amended—
(1) in paragraph (1), by striking ‘‘shall be de-
termined as follows:’’ and all that follows and insert-
ing the following: ‘‘shall be the amount equal to 55
percent of the base amount.’’;
(2) in paragraph (2), by striking ‘‘shall be de-
termined as follows:’’ and all that follows and insert-
ing the following: ‘‘shall be the amount equal to a
percentage of the base amount that is less than 55
percent and is determined under subsection (f).’’.
(b) ANNUITIES FOR SURVIVORS OF CERTAIN PER-
SONS DYING DURING A PERIOD OF SPECIAL ELIGIBILITY
FOR SBP.—Subsection (c)(1) of such section is amended
by striking ‘‘shall be determined as follows:’’ and all that
follows and inserting the following: ‘‘shall be the amount
equal to 55 percent of the retired pay to which the member
or former member would have been entitled if the member
or former member had been entitled to that pay based
upon his years of active service when he died.’’.
(c) REPEAL OF REQUIREMENT FOR REDUCTION.—
Such section is further amended by striking subsection
(d).
(d) REPEAL
OF
UNNECESSARY
SUPPLEMENTAL
SBP.—(1) Subchapter III of chapter 73 of title 10,
United States Code, is repealed.
(2) The table of subchapters at the beginning of such
chapter is amended by striking the item relating to sub-
chapter III.
(e) EFFECTIVE DATE.—The amendments made by
this section shall take effect on October 1, 2000, and shall
apply with respect to annuity payments for months begin-
ning on or after that date.
SEC. 208. SURVIVOR ANNUITIES FOR WIDOWS, WIDOWERS,
AND FORMER SPOUSES OF FEDERAL EM-
PLOYEES WHO DIE BEFORE ATTAINING AGE
FOR 
DEFERRED 
ANNUITY 
UNDER 
CIVIL
SERVICE RETIREMENT SYSTEM.
(a) BENEFITS FOR WIDOW OR WIDOWER.—Section
8341(f) of title 5, United States Code, is amended—
(1) in the matter preceding paragraph (1) by—
(A) by inserting ‘‘a former employee sepa-
rated from the service with title to deferred an-
nuity from the Fund dies before having estab-
lished a valid claim for annuity and is survived
by a spouse, or if’’ before ‘‘a Member’’; and
(B) by inserting ‘‘of such former employee
or Member’’ after ‘‘the surviving spouse’’;
(2) in paragraph (1)—
(A) by inserting ‘‘former employee or’’ be-
fore ‘‘Member commencing’’; and
(B) by inserting ‘‘former employee or’’ be-
fore ‘‘Member dies’’; and
(3) in the undesignated sentence following para-
graph (2)—
(A) in the matter preceding subparagraph
(A) by inserting ‘‘former employee or’’ before
‘‘Member’’; and
(B) in subparagraph (B) by inserting
‘‘former employee or’’ before ‘‘Member’’.
(b) BENEFITS
FOR
FORMER
SPOUSE.—Section
8341(h) of title 5, United States Code, is amended—
(1) in paragraph (1)—
(A) by redesignating such paragraph as
paragraph (1)(A); and
(B) by adding at the end the following:
‘‘(B) Subject to paragraphs (2) through (5) of this
subsection, a former spouse of a former employee who dies
after having separated from the service with title to a de-
ferred annuity under section 8338(a) but before having
established a valid claim for annuity is entitled to a sur-
vivor annuity under this subsection, if and to the extent
expressly provided for in an election under section
8339(j)(3) of this title, or in the terms of any decree of
divorce or annulment or any court order or court-approved
property settlement agreement incident to such decree.’’;
and
(2) in paragraph (2)—
(A) in subparagraph (A)(ii) by striking ‘‘or
annuitant,’’ and inserting ‘‘annuitant, or former
employee’’; and
(B) in subparagraph (B)(iii) by inserting
‘‘former employee or’’ before ‘‘Member’’.
(c) PROTECTION OF SURVIVOR BENEFIT RIGHTS.—
Section 8339(j)(3) of title 5, United States Code, is
amended by adding at the end the following: ‘‘The Office
shall provide by regulation for the application of this sub-
section to the widow, widower, or surviving former spouse
of a former employee who dies after having separated from
the service with title to a deferred annuity under section
8338(a) but before having established a valid claim for
annuity.’’.
(d) EFFECTIVE DATE.—The amendments made by
this section shall take effect on the date of the enactment
of this Act and shall apply only in the case of a former
employee who dies on or after such date.
SEC. 209. ORDER OF PRECEDENCE FOR DISPOSITION OF
AMOUNTS REMAINING IN THE THRIFT SAV-
INGS ACCOUNT OF A FEDERAL EMPLOYEE
(OR FORMER EMPLOYEE) WHO DIES BEFORE
MAKING AN EFFECTIVE ELECTION CONTROL-
LING SUCH DISPOSITION.
(a) IN GENERAL.—Section 8433(e) of title 5, United
States Code, is amended—
(1) by striking ‘‘(e)’’ and inserting ‘‘(e)(1)’’;
(2) by striking all that follows ‘‘paid’’ and in-
serting ‘‘in accordance with paragraph (2).’’; and
(3) by adding at the end the following:
‘‘(2) An amount under paragraph (1) shall be paid
in a manner consistent with the provisions of section
8424(d), except that, in applying the order of precedence
under such provisions—
‘‘(A) the widow or widower of the decedent shall
be the first party entitled to receive (instead of any
designated beneficiary); and
‘‘(B) if there is no widow or widower, the party
next entitled to receive shall be the beneficiary or
beneficiaries designated by the employee or Member
(or former employee or Member) in accordance with
the procedures that would otherwise normally apply,
subject to such additional conditions as the Execu-
tive Director shall by regulation prescribe based on
section 205(c)(2) of the Employee Retirement In-
come Security Act of 1974.’’.
(b) EFFECTIVE DATE.—This section and the amend-
ment made by this section shall take effect on the 90th
day after the date of the enactment of this Act, and shall
apply in the case of any individual who dies on or after
such 90th day.
SEC. 210. INTEREST ON AMOUNTS PAID TO MAKE UP FOR
CERTAIN CIVIL SERVICE ANNUITY BENEFITS
WRONGFULLY DENIED.
(a) IN GENERAL.—Chapter 77 of title 5, United
States Code, is amended by adding at the end the fol-
lowing:
‘‘§ 7704. Interest on amounts paid to make up for cer-
tain annuity benefits wrongfully denied
‘‘(a) In the case of an individual who, on the basis
of a timely appeal to the Merit Systems Protection Board
under section 8347(d) or 8461(e), or petition for judicial
review under section 7703 from a final order or decision
of the Board in any such appeal, is found by the relevant
authority—
‘‘(1) to have been affected by an erroneous ap-
plication or interpretation of subchapter III of chap-
ter 83, chapter 84, or any other provision of law (or
any rule or regulation relating thereto), and
‘‘(2) to be entitled to receive an amount equal
to all or any part of an annuity not paid to such in-
dividual as a result of such erroneous application or
interpretation,
the amount under paragraph (2) may, in the discretion
of such authority, be made payable with interest.
‘‘(b) Any such interest—
‘‘(1) shall be computed in such manner as the
Merit Systems Protection Board or the court (as the
case may be) considers appropriate; and
‘‘(2) shall be payable out of the Civil Service
Retirement and Disability Fund.
‘‘(c) For purposes of this section, the term ‘annuity’
means any annuity (including a survivor annuity) payable
out of the Civil Service Retirement and Disability Fund.’’.
(b) CONFORMING AMENDMENTS.—
(1) Section 8348(a)(1)(A) of title 5, United
States Code, is amended by striking ‘‘Fund;’’ and
inserting ‘‘Fund (including any interest payable
under section 7704);’’.
(2) The analysis for chapter 77 of title 5,
United States Code, is amended by adding at the
end the following:
‘‘7704. Interest on amounts paid to make up for certain annuity benefits wrong-
fully denied.’’.
SEC. 211. AMENDMENTS RELATING TO EFFECTIVE DATE
PROVISION OF THE CIVIL SERVICE RETIRE-
MENT SPOUSE EQUITY ACT OF 1984.
(a) ELIMINATION
OF CERTAIN BARS
TO ELIGI-
BILITY.—Section 4(b) of the Civil Service Retirement
Spouse Equity Act of 1984 (5 U.S.C. 8341 note) is
amended—
(1) in paragraph (1)(B)(i), by striking ‘‘after
September 14, 1978, and’’; and
(2) by repealing paragraph (4).
(b) NEW DEADLINE FOR APPLICATIONS.—
(1) IN GENERAL.—Section 4(b)(1)(B)(iv) of the
Civil Service Retirement Spouse Equity Act of 1984
is amended by striking ‘‘May 7, 1989’’ and inserting
‘‘May 7, 2001’’.
(2) AUTHORITY TO WAIVE DEADLINE.—Section
4(b) of the Civil Service Retirement Spouse Equity
Act of 1984 is amended by adding at the end the
following:
‘‘(6)(A) The Director of the Office of Personnel Man-
agement may waive the deadline under paragraph
(1)(B)(iv) in any case in which the Director determines
that the circumstances so warrant.
‘‘(B) In making a determination under this para-
graph, one of the factors which may be taken into account
is whether the individual involved has previously submitted
a timely application under this section—
‘‘(i) which was denied; but
‘‘(ii) which, based on criteria applied under this
section pursuant to changes in law subsequent to the
denial, would have been approved.’’.
TITLE III—SIMPLIFIED
INVESTMENT STANDARDS
SEC. 301. EXEMPTION FROM PROHIBITED TRANSACTION
RULES FOR EMERGENT TRANSACTIONS.
(a) AMENDMENTS TO THE EMPLOYEE RETIREMENT
INCOME SECURITY ACT OF 1974.—Section 408 of the
Employee Retirement Income Security Act of 1974 (29
U.S.C. 1108) is amended by adding at the end the fol-
lowing new subsection:
‘‘(g)(1) Pursuant to regulations issued by the Sec-
retary, a transaction between an employee benefit plan
and an eligible person constituting the purchase or sale
of a financial product which is in violation of a restriction
imposed by section 406 or 407(a) shall be exempted under
subsection (a) from treatment as a violation of such re-
striction if—
‘‘(A) prior to engaging in the transaction, the
plan acquires from the eligible person a qualifying
guarantee, consisting of a letter of credit or other
form of written guarantee, issued by a bank or simi-
lar financial institution (other than the eligible per-
son requesting the exemption or an affiliate) regu-
lated and supervised by, and subject to periodic ex-
amination by, an agency of a State or of the Federal
Government, in a stated amount equal, as of the
close of business on the day preceding the trans-
action, to not less than 100 percent of the amount
of plan assets involved in the transaction, plus inter-
est on that amount at a rate determined by the par-
ties to the transaction, or in the absence of such de-
termination, an interest rate equal to the under-
payment rate defined in section 6621(a)(2) of the
Internal Revenue Code of 1986;
‘‘(B) the eligible person receives in such trans-
action not more than reasonable compensation;
‘‘(C) such transaction is expressly approved by
an independent fiduciary who has investment au-
thority with respect to the plan assets involved in
the transaction;
‘‘(D) within 60 days after the transaction, the
eligible person submits to the Secretary an applica-
tion for an exemption under subsection (a) from
such restriction;
‘‘(E) immediately after the acquisition of the fi-
nancial product—
‘‘(i) the fair market value of such financial
product does not exceed 1 percent of the fair
market value of the assets of the plan, and
‘‘(ii) the aggregate fair market value of all
outstanding financial products acquired by the
plan from the eligible person pursuant to this
subsection does not exceed 5 percent of the fair
market value of the assets of the plan;
‘‘(F) the Secretary determines not to grant the
exemption; and
‘‘(G) the transaction is reversed within 60 days
after the date of the Secretary’s determination.
‘‘(2) For purposes of this subsection—
‘‘(A) a guarantee referred to in paragraph (1)
is ‘qualifying’ if such guarantee is irrevocable and,
under the terms of the guarantee—
‘‘(i) if the Secretary grants the exemption,
the guarantee may expire without any payments
made to the plan, and
‘‘(ii) if the Secretary determines not to
grant the exemption, the plan has the uncondi-
tional right to apply the amounts under the
guarantee to any losses suffered and to the pay-
ment of interest determined under paragraph
(1); and
‘‘(B) the term ‘eligible person’ means a person
that—
‘‘(i) consists of—
‘‘(I) a bank as defined in section
202(a)(2) of the Investment Advisers Act
of 1940,
‘‘(II) an investment adviser registered
under the Investment Advisers Act of
1940,
‘‘(III) an insurance company which is
qualified to do business in more than one
State, or
‘‘(IV) a broker-dealer registered under
the Securities Exchange Act of 1934,
‘‘(ii) has shareholders’ or partners’ equity
in excess of $1,000,000, and
‘‘(iii) is not described in section 411.’’.
(b) EFFECTIVE DATE.—The amendment made by
this section shall apply with respect to transactions occur-
ring after December 31, 2000.
SEC. 302. ALTERNATIVE METHOD FOR PUBLISHING THE
PENDENCY OF PROHIBITED TRANSACTION
EXEMPTIONS.
(a) IN GENERAL.—Section 408(a) of the Employee
Retirement Income Security Act of 1974 (29 U.S.C.
1108(a)) is amended by inserting before the last sentence
the following new sentence: ‘‘Nothing in this subsection
shall preclude the Secretary, in the Secretary’s sole discre-
tion, from prescribing by regulation, as an alternative to
publication in the Federal Register of the pendency of ex-
emptions under this subsection, an alternative method for
providing notice of the pendency of such exemptions, if
the other requirements of this subsection are met.’’.
(b) EFFECTIVE DATE.—The amendment made by
this section shall take effect on the date of the enactment
of this Act.
SEC. 303. EMPLOYER PROTECTION FROM LIABILITY FOR
THE PROVISION OF INVESTMENT ADVICE.
(a) IN GENERAL.—Section 402(c) of the Employee
Retirement Income Security Act of 1974 (29 U.S.C.
1102(c)) is amended—
(1) in paragraph (2), by striking ‘‘or’’ at the
end;
(2) in paragraph (3), by striking the period and
inserting ‘‘; or’’; and
(3) by adding after paragraph (3) the following
new paragraph:
‘‘(4) that a named fiduciary of a pension plan
described in section 404(c) may designate one or
more investment advisers to render advice to partici-
pants and beneficiaries with regard to assets held in
their individual accounts, if each such investment
adviser is—
‘‘(A) registered as an investment adviser
under the Investment Advisers Act of 1940 or
under the laws of the State in which the invest-
ment adviser maintains its principal office and
place of business;
‘‘(B) a bank as defined in section
202(a)(2) of the Investment Advisers Act of
1940;
‘‘(C) an insurance company qualified to do
business under the laws of a State; or
‘‘(D) a person registered as a broker or
dealer under the Securities Exchange Act of
1934.’’.
(b) PROTECTION FROM LIABILITY FOR BREACH BY
CO-FIDUCIARY.—Section 405 of such Act (29 U.S.C.
1105) is amended—
(1) in subsection (c)(3), by inserting before the
period the following: ‘‘or the designation of an in-
vestment 
adviser 
in 
accordance 
with 
section
402(c)(4)’’; and
(2) by adding at the end the following new sub-
section:
‘‘(e)(1) If any investment adviser designated under
a plan pursuant to paragraph (4) of section 402(c) ac-
knowledges in writing its designation as a fiduciary pursu-
ant to such paragraph, then, notwithstanding paragraphs
(2) and (3) of subsection (a) and subsection (b), no trustee
or named fiduciary of such plan shall be liable for acts
or omissions of such investment adviser in connection with
such plan.
‘‘(2) Nothing in this subsection shall relieve any
trustee or named fiduciary of any liability under this part
for any act of such trustee or named fiduciary.’’.
(c) LIABILITY OF INVESTMENT ADVISERS AND THE
SCOPE OF INVESTMENT ADVICE.—Section 404(c)(1) of
such Act (29 U.S.C. 1104(c)(1)) is amended by adding
at the end the following new subparagraph:
‘‘(C)(i) Notwithstanding subparagraph (B)
and section 3(21)(A)(ii), an investment adviser
appointed pursuant to section 402(c)(4) shall
be considered a fiduciary and shall be liable for
any breach in connection with the provision of
investment advice to a participant or bene-
ficiary.
‘‘(ii) For purposes of clause (i), an invest-
ment adviser appointed pursuant to section
402(c)(4) shall be considered to provide invest-
ment advice to a participant or beneficiary if
the adviser provides individualized recommenda-
tions to a participant or beneficiary with re-
spect to the purchase, sale, or retention of secu-
rities or other property for the participant’s or
beneficiary’s individual account.’’.
(d) RESTORATION OF LOSSES TO INDIVIDUAL AC-
COUNT.—Section 409(a) of such Act (29 U.S.C. 1109(a))
is amended by inserting ‘‘(or, in the case of a pension plan
which provides for individual accounts, the individual ac-
count)’’ after ‘‘plan’’ the second, third, and fourth places
it appears.
(e) EFFECTIVE DATE.—The amendments made by
this section shall apply with respect to advice referred to
in section 3(21)(A)(ii) of the Employee Retirement In-
come Security Act of 1974 provided after December 31,
2000.
SEC. 304. PARTICIPATION OF PARTICIPANTS IN TRUSTEE-
SHIP OF DEFINED CONTRIBUTION PLANS.
(a) IN GENERAL.—Section 403(a) of the Employee
Retirement Income Security Act of 1974 (29 U.S.C.
1103(a)) is amended—
(1) by redesignating paragraphs (1) and (2) as
subparagraphs (A) and (B), respectively;
(2) by inserting ‘‘(1)’’ after ‘‘(a)’’; and
(3) by adding at the end the following new
paragraph:
‘‘(2)(A) Subject to subparagraph (B), the assets of
a single-employer plan which is a defined contribution plan
and under which some or all of the assets are derived from
employee contributions shall be held in trust by a joint
board of trustees, which shall consist of two or more trust-
ees representing on an equal basis the interests of the em-
ployer or employers maintaining the plan and the interests
of the participants and their beneficiaries.
‘‘(B) This paragraph shall apply for any plan year
only if a majority of the participants of the defined con-
tribution plan indicates to the plan administrator, in such
form and manner as shall be prescribed in regulations of
the Secretary, its intention to have this paragraph so
apply.
‘‘(C)(i) Except as provided in clause (ii), in any case
in which the plan is maintained pursuant to one or more
collective bargaining agreements between one or more em-
ployee organizations and one or more employers, the trust-
ees representing the interests of the participants and their
beneficiaries shall be designated by such employee organi-
zations.
‘‘(ii) Clause (i) shall not apply with respect to a plan
described in such clause if the employee organization (or
all employee organizations, if more than one) referred to
in such clause file with the Secretary, in such form and
manner as shall be prescribed in regulations of the Sec-
retary, a written waiver of their rights under clause (i).
‘‘(iii) In any case in which clause (i) does not apply
with respect to a single-employer plan because the plan
is not described in clause (i) or because of a waiver filed
pursuant to clause (ii), the trustee or trustees representing
the interests of the participants and their beneficiaries
shall be selected in accordance with regulations of the Sec-
retary. Such regulations may provide for selection of trust-
ees by the employer, but only from individuals who have
been demonstrated to be independent and to have no con-
flict of interest. An individual shall not be treated as ineli-
gible for selection as trustee solely because such individual
is an employee of the plan sponsor, except that the em-
ployee so selected may not be a highly compensated em-
ployee (as defined in section 414(q) of the Internal Rev-
enue Code of 1986).
‘‘(iv) The Secretary shall provide by regulation for
the appointment of a neutral, in accordance with the pro-
cedures under section 203(f) of the Labor Management
Relations Act, 1947 (29 U.S.C. 173(f)), to cast votes as
necessary to resolve tie votes by the trustees.’’.
(b) REGULATIONS.—The Secretary of Labor shall
prescribe the initial regulations necessary to carry out the
provisions of such amendments not later than 90 days
after the date of the enactment of this Act.
SEC. 305. REMOVAL OF $500,000 CAP ON BONDING REQUIRE-
MENT.
Section 412(a) of the Employee Retirement Income
Security Act of 1974 (29 U.S.C. 1112(a)) is amended, in
the matter following paragraph (2), by striking ‘‘nor more
than $500,000’’ and all that follows through ‘‘preceding
sentence’’.
SEC. 306. DISCLOSURE REGARDING INVESTMENTS AND
VOTING OF PROXIES.
(a) IN GENERAL.—Section 101 of the Employee Re-
tirement Income Security Act of 1974 (29 U.S.C. 1021)
is amended by inserting after subsection (e) the following
new subsection:
‘‘(f) DISCLOSURE REGARDING INVESTMENTS
AND
VOTING OF PROXIES.—
‘‘(1) IN GENERAL.—Within 30 days after re-
ceipt by the plan administrator of a written request
by a participant or beneficiary for relevant and spe-
cific information regarding—
‘‘(A) the nature or extent of any particular
investment of plan assets occurring on a par-
ticular date specified in the request, or
‘‘(B) the manner in which any right to
vote in connection with such investment has
been exercised by or under the plan,
the plan administrator shall furnish such informa-
tion in writing to such participant or beneficiary.
The administrator may make a reasonable charge to
cover the cost of furnishing such information.
‘‘(2) STANDARDS AND REVIEW.—The Secretary
shall by regulation prescribe—
‘‘(A) standards which must be met by re-
quests made pursuant to this subsection, in-
cluding standards relating to relevancy and
specificity of the information requested, the
specificity by which the investment must be
identified in the request, and the reasonableness
of charges made for furnishing the information,
and
‘‘(B) procedures by which plan administra-
tors may rely on such standards in declining re-
quests for information which fail to meet such
standards, including methods for obtaining
timely and binding determinations by the Sec-
retary regarding whether such standards are
being met by particular requests.’’.
(b) ENFORCEMENT.—Section 502(c)(1) of such Act
(29 U.S.C. 1132(c)(1)) is amended by striking ‘‘section
101(e)(1)’’ and inserting ‘‘subsection (e)(1) or (f)(1) of
section 101’’.
(c) CONFORMING AMENDMENT.—Section 101(h)(1)
of such Act (29 U.S.C. 1021(h)(1)) is amended by insert-
ing ‘‘or subsection (f)’’ after ‘‘this subsection’’.
(d) EFFECTIVE DATE.—The amendments made by
this section shall apply with respect to written requests
received after December 31, 2000.
SEC. 307. DIVERSIFICATION IN DEFINED CONTRIBUTION
INVESTMENTS.
Section 407(d)(3) of the Employee Retirement In-
come Security Act of 1974 (29 U.S.C. 1107(d)(3)) is
amended by adding at the end the following:
‘‘(D)(i) The term ‘eligible individual account
plan’ does not include that portion of a profit-shar-
ing plan that consists of employer contributions (in-
cluding elective deferrals (as defined in section
402(g)(3) of the Internal Revenue Code of 1986)
pursuant to a qualified cash or deferred arrange-
ment (as defined in section 401(k) of such Code))
and earnings allocable thereto, if—
‘‘(I) under the documents and instruments
governing the plan, such contributions (or earn-
ings allocable thereto) are required to be in-
vested at the direction of a person other than
the participant on whose behalf such contribu-
tions are made to the plan (or the participant’s
beneficiary), or
‘‘(II) the documents and instruments gov-
erning the plan do not provide for effective im-
plementation of investments directed by such a
participant (or beneficiary) within 3 years after
such direction is made known to the plan.
‘‘(ii) For purposes of subsection (a), such por-
tion shall be treated as a separate plan.
‘‘(iii) This subparagraph shall not apply to an
individual account plan if the fair market value of
the assets of all individual account plans maintained
by the employer equals not more than 10 percent of
the fair market value of the assets of all pension
plans maintained by the employer.
‘‘(iv) This subparagraph shall not apply to an
individual account plan that is an employee stock
ownership plan as defined in section 409(a) or
4975(e)(7) of the Internal Revenue Code or that is
a stock bonus plan.’’.
SEC. 308. DIVERSIFICATION OF INVESTMENTS UNDER EM-
PLOYEE STOCK OWNERSHIP PLANS BY PAR-
TICIPANTS AND BENEFICIARIES OVER 55
YEARS OF AGE.
Section 206 of the Employee Retirement Income Se-
curity Act of 1974 (29 U.S.C. 1056) (as amended by sec-
tion 201) is amended by adding at the end the following
new subsection:
‘‘(h) DIVERSIFICATION OF INVESTMENTS UNDER EM-
PLOYEE STOCK OWNERSHIP PLANS
BY PARTICIPANTS
AND BENEFICIARIES OVER 55 YEARS OF AGE.—
‘‘(1) IN GENERAL.—An employee stock owner-
ship plan shall provide that each qualified partici-
pant may elect within 90 days after the close of each
plan year in the qualified election period to direct
the plan as to the investment of at least 25 percent
of the participant’s account in the plan (to the ex-
tent such portion exceeds the amount to which a
prior election under this subsection applies). In the
case of the election year in which the participant can
make the participant’s last election, the preceding
sentence shall be applied by substituting ‘50 percent’
for ‘25 percent’.
‘‘(2) METHOD OF MEETING REQUIREMENTS.—
A plan shall be treated as meeting the requirements
of paragraph (1) if—
‘‘(A) the portion of the participant’s ac-
count covered by the election under paragraph
(1) is distributed within 90 days after the pe-
riod during which the election may be made, or
‘‘(B) the plan offers at least 3 investment
options (not inconsistent with regulations pre-
scribed by the Secretary of the Treasury) to
each participant making an election under para-
graph (1) and within 90 days after the period
during which the election may be made, the
plan invests the portion of the participant’s ac-
count covered by the election in accordance with
such election.
‘‘(3) DEFINITIONS.—For purposes of this
subsection—
‘‘(A) 
EMPLOYEE
STOCK
OWNERSHIP
PLAN.—The term ‘employee stock ownership
plan’ means a defined contribution plan which
is an employee stock ownership plan (within the
meaning of section 4975(e)(7) of the Internal
Revenue Code of 1986) or which meets the re-
quirements of section 409(a) of such Code.
‘‘(B) QUALIFIED PARTICIPANT.—The term
‘qualified participant’ means any participant
who has completed at least 10 years of partici-
pation under the plan and has attained age 55.
‘‘(C) QUALIFIED ELECTION PERIOD.—The
term ‘qualified election period’ means the 6-
plan-year period beginning with the later of—
‘‘(i) the first plan year in which the
individual first became a qualified partici-
pant, or
‘‘(ii) the first plan year beginning
after December 31, 2000.
For purposes of the preceding sentence, an em-
ployer may elect to treat an individual first be-
coming a qualified participant in the first plan
year beginning in 2001 as having become a par-
ticipant in the first plan year beginning in
2002.’’.
TITLE 
IV—IMPROVEMENTS 
IN
PENSION INFORMATION AND
ENFORCEMENT
SEC. 401. PERIODIC PENSION BENEFIT STATEMENTS.
(a) IN GENERAL.—Subsection (a) of section 105 of
the Employee Retirement Income Security Act of 1974
(29 U.S.C. 1025) is amended—
(1) by striking ‘‘shall furnish to any plan par-
ticipant or beneficiary who so requests in writing,’’
and inserting ‘‘shall furnish at least once every 3
years, in the case of a participant in a defined ben-
efit plan who has attained age 35, and annually, in
the case of a defined contribution plan, to each plan
participant, and shall furnish to any plan participant
or beneficiary who so requests,’’, and
(2) by adding at the end the following flush
sentence:
‘‘Information furnished under the preceding sentence to
a participant in a defined benefit plan (other than at the
request of the participant) may be based on reasonable
estimates determined under regulations prescribed by the
Secretary.’’
(b) RULE FOR MULTIEMPLOYER PLANS.—Subsection
(d) of section 105 of such Act (29 U.S.C. 1025) is amend-
ed to read as follows:
‘‘(d) Each administrator of a plan to which more than
1 unaffiliated employer is required to contribute shall fur-
nish to any plan participant or beneficiary who so requests
in writing, a statement described in subsection (a).’’.
(c) MODEL STATEMENTS.—The Secretary of Labor
shall develop a model benefit statement to be used by plan
administrators in complying with the requirements of sec-
tion 105 of the Employee Retirement Income Security Act
of 1974. Such statement shall include—
(1) the amount of nonforfeitable accrued bene-
fits as of the statement date which is payable at nor-
mal retirement age under the plan,
(2) the amount of accrued benefits which are
forfeitable but which may become nonforfeitable
under the terms of the plan,
(3) the amount or percentage of any reduction
due to integration of the benefit with the partici-
pant’s Social Security benefits or similar govern-
mental benefits,
(4) information on how to contact the Social
Security Administration to obtain a participant’s
personal earnings and benefit estimate statement,
and
(5) information on early retirement benefit and
joint and survivor annuity reductions.
SEC. 402. BENEFIT STATEMENTS REQUIRED TO INCLUDE
INFORMATION ON INVESTMENT PERFORM-
ANCE.
Section 105(a) of the Employee Retirement Income
Security Act of 1974 (29 U.S.C. 1025(a)) is amended—
(1) in paragraph (1), by striking ‘‘and’’;
(2) in paragraph (2), by striking the period at
the end and inserting ‘‘, and’’; and
(3) by adding at the end the following new
paragraph:
‘‘(3) the percentage of the net return on invest-
ment of plan assets for the preceding plan year (or,
with respect to investments directed by the partici-
pant, the net return on investment of plan assets for
such year so directed), and, stated separately, the
administrative and transaction fees incurred in con-
nection with such investment.’’.
SEC. 403. DISCLOSURES TO SECRETARY OF LABOR RELAT-
ING TO PLAN TERMINATION AND RELATING
TO PLAN SPONSORS AFTER ACQUISITION OR
MERGER OF PLANS.
(a) IN GENERAL.—Section 104 of the Employee Re-
tirement Income Security Act of 1974 (29 U.S.C. 1024)
is amended—
(1) by redesignating subsection (d) as sub-
section (e); and
(2) by inserting after subsection (c) the fol-
lowing new subsection:
‘‘(d)(1) The administrator of any employee benefit
plan subject to this part shall file with the Secretary a
written notice of—
‘‘(A) the termination of the plan, or
‘‘(B) in connection with any plan that is ac-
quired by or merged with another plan, the name
and address of the sponsor of the acquired or
merged plan.
‘‘(2) The notice required under paragraph (1) shall
be filed with the Secretary not later than 60 days after
the effective date of the termination, acquisition, or merg-
er.’’.
(b) EFFECTIVE DATE.—The amendments made by
this section shall apply with respect to terminations, acqui-
sitions, and mergers occurring after December 31, 2000.
SEC. 404. DISCLOSURE OF OPERATING INCOME OF EM-
PLOYERS ADJUSTED SO AS TO EXCLUDE CER-
TAIN 
COMPONENTS 
MANDATED 
IN 
FASB
RULES GOVERNING ACCOUNTING FOR DE-
FINED BENEFIT PENSION PLANS.
(a) MATTERS TO BE INCLUDED IN ANNUAL RE-
PORT.—Section 103(c) of the Employee Retirement In-
come Security Act of 1974 (29 U.S.C. 1023(c)) is
amended—
(1) by redesignating paragraph (5) as para-
graph (6); and
(2) by inserting after paragraph (4) the fol-
lowing new paragraph:
‘‘(5) In the case of a pension plan that is a de-
fined benefit plan, the amount of the annual oper-
ating income of each employer maintaining the plan,
as shown on the employer’s most recent annual fi-
nancial statement, together with such amount as ad-
justed by excluding all components of net benefit
cost other than the service cost component.’’.
(b) INFORMATION TO BE PROVIDED ANNUALLY TO
PARTICIPANTS AND BENEFICIARIES.—Section 104(b)(3)
of such Act (29 U.S.C. 1024(b)(3)) is amended by adding
at the end the following new sentence: ‘‘In the case of a
defined benefit plan, such other material shall include the
information described in paragraph (5) of section 103(c),
together with an explanation, written in a manner cal-
culated to be understood by the average plan participant,
of such information, of the service cost component in-
cluded in the adjusted amount of annual operating income
reported pursuant to such paragraph, and of each compo-
nent excluded from such adjusted amount of annual oper-
ating income.’’.
SEC. 405. SPECIFIC INFORMATION REGARDING MULTIEM-
PLOYER PLANS INCLUDED IN ANNUAL RE-
PORT.
Section 103 of the Employee Retirement Income Se-
curity Act of 1974 (29 U.S.C. 1023) is amended by adding
at the end the following new subsection:
‘‘(f) With respect to a pension plan that is a multiem-
ployer plan, an annual report under this section shall in-
clude the following information regarding each contrib-
uting employer:
‘‘(1) the employer’s name,
‘‘(2) the employer’s taxpayer identification
number,
‘‘(3) the contract period relating to the plan,
and
‘‘(4) the amount contributed by the employer
for the year.’’.
SEC. 406. LIMITED SCOPE AUDITS.
Subparagraph (C) of section 103(a)(3) of the Em-
ployee Retirement Income Security Act of 1974 (29
U.S.C. 1023(a)(3)(C)) is amended to read as follows:
‘‘(C)(i) Subject to clause (ii), the opinion required by
subparagraph (A) need not be expressed as to any state-
ments required by subsection (b)(3)(G) prepared by a
bank or similar institution or insurance carrier regulated
and supervised and subject to periodic examination by a
State or Federal agency if no less than ninety-five (95)
percent of the plan’s assets have a readily ascertainable
market value at the end of the plan year for which the
opinion is being offered, and if such statements—
‘‘(I) are certified by the bank, similar institu-
tion or insurance carrier as complete and accurate,
‘‘(II) certify the current value of each asset,
‘‘(III) include a representation that, within the
eighteen month period preceding the date of its cer-
tification, an independent, qualified public account-
ant who has satisfied the requirements of subsection
(D), has issued a report, in accordance with gen-
erally accepted auditing standards, to the bank or
similar institution or insurance carrier, stating that
its internal controls and procedures or the internal
controls and procedures of any affiliated entity, as
they pertain to the execution, maintenance of ac-
countability, recording and processing of trans-
actions related to plan or participant recordkeeping,
are adequate, and
‘‘(IV) are made a part of the annual report.
‘‘(ii) To the extent that the processing of transactions
related to plan or participant recordkeeping is performed
by an entity unaffiliated with the bank or similar institu-
tion or insurance carrier, clause(i) shall not apply unless
the plan has obtained a representation from the entity
that, within the eighteen month period preceding the date
of the opinion, an independent, qualified public accountant
who has satisfied the requirements of subsection (D), has
issued a report, in accordance with generally accepted au-
diting standards, to the entity stating that its internal
controls and procedures, as they pertain to the execution,
maintenance of accountability, recording and processing of
transactions related to plan or participant recordkeeping,
are adequate.
‘‘(iii) For purposes of this subparagraph (C), the
term ‘readily ascertainable market value’ means a value
that can be readily determined on an established securities
market or in accordance with regulations promulgated by
the Secretary.’’.
SEC. 407. REPORTING AND ENFORCEMENT REQUIREMENTS
FOR EMPLOYEE BENEFIT PLANS.
(a) IN GENERAL.—Part 1 of subtitle B of title I of
the Employee Retirement Income Security Act of 1974
(29 U.S.C. 1021 et seq.) is amended—
(1) by redesignating section 111 as section 112,
and
(2) inserting after section 110 the following
new section:
‘‘DIRECT REPORTING OF CERTAIN EVENTS
‘‘SEC. 111. (a) REQUIRED NOTIFICATIONS.—
‘‘(1) 
NOTIFICATIONS
BY
PLAN
ADMINIS-
TRATOR.—The administrator of an employee benefit
plan, within 5 business days after the administrator
determines that there is evidence (or after the ad-
ministrator is notified under paragraph (2)) that an
irregularity may have occurred with respect to the
plan, shall—
‘‘(A) notify the Secretary of the irregu-
larity in writing; and
‘‘(B) furnish a copy of such notification to
the accountant who is currently engaged under
section 103(a)(3)(A).
‘‘(2) NOTIFICATIONS BY ACCOUNTANT.—
‘‘(A) IN
GENERAL.—An accountant en-
gaged by the administrator of an employee ben-
efit plan under section 103(a)(3)(A), within 5
business days after the accountant in connec-
tion with such engagement determines that
there is evidence that an irregularity may have
occurred with respect to the plan, shall—
‘‘(i) notify the plan administrator of
the irregularity in writing, or
‘‘(ii) if the accountant determines that
there is evidence that the irregularity may
have involved an individual who is the plan
administrator or who is a senior official of
the plan administrator, notify the Sec-
retary of the irregularity in writing.
‘‘(B) NOTIFICATION
UPON
FAILURE
OF
PLAN ADMINISTRATOR TO NOTIFY.—If an ac-
countant who has provided notification to the
plan administrator pursuant to subparagraph
(A)(i) does not receive a copy of the administra-
tor’s notification to the Secretary required
under paragraph (1)(B) within the 5-business-
day period specified therein, the accountant
shall furnish to the Secretary a copy of the ac-
countant’s notification made to the plan admin-
istrator on the next business day following such
period.
‘‘(3) IRREGULARITY DEFINED.—
‘‘(A) For purposes of this subsection, the
term ’irregularity’ means--
‘‘(i) a theft, embezzlement, or a viola-
tion of section 664 of title 18, United
States Code (relating to theft or embezzle-
ment from an employee benefit plan);
‘‘(ii) an extortion or a violation of sec-
tion 1951 of title 18, United States Code
(relating to interference with commerce by
threats or violence);
‘‘(iii) a bribery, a kickback, or a viola-
tion of section 1954 of title 18, United
States Code (relating to offer, acceptance,
or solicitation to influence operations of an
employee benefit plan);
‘‘(iv) a violation of section 1027 of
title 18, United States Code (relating to
false statements and concealment of facts
in relation to employer benefit plan
records); or–
‘‘(v) a violation of section 411, 501, or
511 of this title (relating to criminal viola-
tions).
‘‘(B) The term ’irregularity’ does not in-
clude any act or omission described in this
paragraph involving less than $1,000 unless
there is reason to believe that the act or omis-
sion may bear on the integrity of plan manage-
ment.
‘‘(b) NOTIFICATION
UPON TERMINATION
OF EN-
GAGEMENT OF ACCOUNTANT.—
‘‘(1) 
NOTIFICATION
BY
PLAN
ADMINIS-
TRATOR.—Within 5 business days after the termi-
nation of an engagement under section 103(a)(3)(A)
with respect to an employee benefit plan, the admin-
istrator of such plan shall—
‘‘(A) notify the Secretary in writing of
such termination, giving the reasons for such
termination, and
‘‘(B) furnish the accountant whose engage-
ment was terminated with a copy of the notifi-
cation sent to the Secretary.
‘‘(2) NOTIFICATION BY ACCOUNTANT.—If the
accountant referred to in paragraph (1)(B) has not
received a copy of the administrator’s notification to
the Secretary as required under paragraph (1)(B),
or if the accountant disagrees with the reasons given
in the notification of termination of the engagement
for auditing services, the accountant shall notify the
Secretary in writing of the termination, giving the
reasons for the termination, within 10 business days
after the termination of the engagement.
‘‘(c) DETERMINATION OF PERIODS REQUIRED FOR
NOTIFICATION.—In determining whether a notification re-
quired under this section with respect to any act or omis-
sion has been made within the required number of busi-
ness days—
‘‘(1) the day on which such act or omission be-
gins shall not be included; and
‘‘(2) Saturdays, Sundays, and legal holidays
shall not be included.
For purposes of this subsection, the term ’legal holiday’
means any Federal legal holiday and any other day ap-
pointed as a holiday by the State in which the person re-
sponsible for making the notification principally conducts
business.
‘‘(d) IMMUNITY FOR GOOD FAITH NOTIFICATION.—
Except as provided in this Act, no accountant or plan ad-
ministrator shall be liable to any person for any finding,
conclusion, or statement made in any notification made
pursuant to subsections (a)(2) or (b)(2), or pursuant to
any regulations issued under those subsections, if the find-
ing, conclusion, or statement is made in good faith.’’.
(b) CIVIL PENALTY.—
(1) IN GENERAL.—Section 502(c) (29 U.S.C.
1132(c)) is amended by inserting after paragraph
(6) the following new paragraph:
‘‘(7)(A) The Secretary may assess a civil penalty of
up to $50,000 against any administrator who fails to pro-
vide the Secretary with any notification as required under
section 111.
‘‘(B) The Secretary may assess a civil penalty of up
to $50,000 against any accountant who knowingly and
willfully fails to provide the Secretary with any notification
as required under section 111.’’.
(2) 
CONFORMING
AMENDMENT.—Section
502(a)(6) (29 U.S.C. 1132(a)(6)) as amended by
section 101(e)(2)A)(i) of the Health Insurance Port-
ability and Accountability Act of 1996, is amended
by striking ‘‘or (5)’’ and inserting ‘‘(5), or (7)’’.
(c) CLERICAL AMENDMENTS.—
(1) Section 514(d)(29 U.S.C. 114(d)) is amend-
ed by striking ‘‘111’’ and inserting ‘‘112’’.
(2) The table of contents in section 1 is amend-
ed by striking the item relating to section 111 and
inserting the following new items:
‘‘Sec. 111. Direct reporting of certain events.
‘‘Sec. 112. Repeal and effective date.’’.
(d) EFFECTIVE DATE.—The amendments made by
this section shall apply with respect to any irregularity or
termination of engagement described in the amendments
only if the 5-day period described in the amendments in
connection with the irregularity or termination commences
at least 90 days after the date of the enactment of this
Act.
SEC. 408. STUDY OF PENSION TRENDS AND CHARACTERIS-
TICS.
(a) IN GENERAL.—Section 513 of the Employee Re-
tirement Income Security Act of 1974 (29 U.S.C. 1143)
is amended by adding at the end the following new sub-
section:
‘‘(d) PENSION SURVEYS.—
‘‘(1) IN GENERAL.—The Secretary shall submit
to each House of the Congress, before the close of
the second session of each Congress, a report, based
on a study of current statistical and survey data,
which describes dominant and emerging trends and
characteristics of the private pension system, so as
to ensure that the Congress is provided with periodic
and timely information regarding such system.
‘‘(2) INCLUDED
INFORMATION.—Each report
submitted pursuant to paragraph (1) shall include,
but not be limited to, information relating to exist-
ing pension plans regarding—
‘‘(A) the types of such plans,
‘‘(B) the level of employer and employee
contributions,
‘‘(C) vesting status,
‘‘(D) accrued benefits,
‘‘(E) benefit receipt, and
‘‘(F) form of benefit payments.
Such information shall be presented by category in
connection with cohorts defined on the basis of ap-
propriate attributes of the participants involved, in-
cluding gender, age, race, and income.
‘‘(3) IDENTIFICATION
OF
BARRIERS
TO
PEN-
SION RECEIPT.—Each report submitted pursuant to
paragraph (1) shall also include information which
summarizes the types of problems that plan partici-
pants and beneficiaries experience in connection with
the receipt of promised retirement benefits.’’.
(b) INITIAL REPORT.—The initial report submitted
pursuant to section 513(d) of the Employee Retirement
Income Security Act of 1974 shall be submitted not later
than the close of the second session of the 106th Congress.
SEC. 409. EARLY RESOLUTION PROGRAM FOR PENSION
BENEFIT CLAIMS.
(a) IN GENERAL.—Section 503 of the Employee Re-
tirement Income Security Act of 1974 (29 U.S.C. 1133)
is amended—
(1) by adding at the end of the heading the fol-
lowing: ‘‘AND
EARLY
RESOLUTION
OF
PENSION
CLAIMS’’;
(2) by inserting ‘‘(a) IN GENERAL.—’’ after
‘‘SEC. 503.’’; and
(3) by adding at the end the following new sub-
section:
‘‘(b) EARLY RESOLUTION PROGRAM FOR PENSION
BENEFIT CLAIMS.—
‘‘(1) IN GENERAL.—The Secretary shall estab-
lish, in consultation with national bar and arbitra-
tion associations and other interested organizations,
an early resolution program for mediation of dis-
putes regarding claims for benefits which have been
denied under pension plans.
‘‘(2) MEDIATORS.—The program shall provide
for recruitment of mediators to serve under the pro-
gram from individuals who have the requisite exper-
tise for such service. The program shall provide for
ongoing training for all mediators in employee bene-
fits law as determined necessary. Upon submission
of a claim to mediation proceedings under this sub-
section, the program shall provide for appointment
of a mediator, from the roster of mediators serving
under the program, to act as the mediator with re-
gard to the claim. Such appointment shall be
through a random selection procedure which shall be
prescribed in regulations.
‘‘(3) FEES.—The Secretary shall assess fees as
necessary from each party to cover the costs of par-
ticipation in the program. The Secretary may reduce
or waive a fee on the basis of inability to pay.
‘‘(4) INITIATION OF PROCEEDINGS.—A claim-
ant with a dispute which is eligible under the pro-
gram for submission to mediation thereunder may
elect to commence proceedings under the program
by means of filing under the program an election for
mediation of the dispute. An election to commence
mediation proceedings under the program shall be in
such form and manner as the Secretary may pre-
scribe.
‘‘(5) PARTICIPATION IN PROCEEDINGS.—Upon
receipt of the election to commence proceedings, the
program shall provide for participation by all rel-
evant parties. Each such party shall participate, and
cooperate fully, in the proceedings. The plan admin-
istrator shall ensure that a copy of the written
record of any claims procedure completed by the
plan pursuant to subsection (a) and all relevant plan
documents are presented to the mediator within 30
days after commencement of the proceedings. The
program shall provide for appropriate confidentiality
of the proceedings.
‘‘(6) TIME LIMIT FOR PROCEEDINGS.—The me-
diation proceedings under the program with respect
to the claim in dispute shall be completed within 30
days after compilation of all relevant plan documents
relating to the claim has been achieved.
‘‘(7) PROCESS
NONBINDING.—Findings and
conclusions made in the mediation proceedings
under the program shall be treated as advisory in
nature and nonbinding. Except as provided in para-
graph (8), the rights of the parties under this title
shall not be affected by participation in the medi-
ation proceedings under the program.
‘‘(8) 
RESOLUTION
THROUGH
SETTLEMENT
AGREEMENT.—If a case is settled through participa-
tion in the mediation proceedings under the pro-
gram, the mediator shall assist the parties in draw-
ing up an agreement which shall constitute, upon
signature of the parties, a binding contract between
the parties, which shall be enforceable under section
502 as if the terms of such agreement were terms
of the plan.
‘‘(9) OVERSIGHT.—The Secretary shall provide
for ongoing oversight of the program so as to ensure
that proceedings are conducted equitably and that
mediators meet prescribed standards of performance.
The Secretary shall monitor and record the results
of mediation proceedings conducted under the pro-
gram so as to enable comprehensive evaluation of
the effectiveness of the program as a means of alter-
native dispute resolution.
‘‘(10) NOTICE.—The Secretary shall—
‘‘(A) notify individuals of the program or
other sources of assistance in resolving benefits
claim disputes, and
‘‘(B) provide model information with re-
spect to the program to be included in all sum-
mary plan descriptions and benefit determina-
tions.’’.
(b) EFFECTIVE DATE.—The amendments made by
this section shall apply with respect to claims arising on
or after December 31, 2000.
SEC. 410. DE NOVO REVIEW OF BENEFIT DETERMINATIONS.
(a) INTERNAL REVIEW.—Section 503 of the Em-
ployee Retirement Income Security Act of 1974 (29
U.S.C. 1133) is amended—
(1) by inserting ‘‘(a)’’ after ‘‘SEC. 503.’’;
(2) by redesignating paragraph (1) and (2) as
subparagraphs (A) and (B), respectively; and
(3) by adding at the end the following new
paragraph:
‘‘(2) Any review required under paragraph (1)(B)—
‘‘(A) shall be de novo, and
‘‘(B) shall be conducted by an individual who
did not make the initial decision denying the claim
and who is authorized to approve payment of the
claim.’’.
(b) COURT REVIEW.—Section 502(e) of such Act (29
U.S.C. 1132(e)) is amended by adding at the end the fol-
lowing new paragraph:
‘‘(2) Notwithstanding any provision by the plan for
the exercise by a fiduciary of discretionary authority with
respect to any benefit determination, in any action under
paragraph (1)(B) or (3) of subsection (a) or in any other
action under this section to review a final benefit deter-
mination under the plan, the review by the court shall be
de novo, and the court may review all evidence pre-
sented.’’.
(b) EFFECTIVE DATE.—The amendment made by
this section shall apply with respect to causes of action
arising after December 31, 2000.
SEC. 411. ALLOWABLE RELIEF.
(a) PRE-JUDGMENT INTEREST, ATTORNEY FEES,
AND COSTS OF ACTION.—
(1) PRE-JUDGMENT INTEREST ON UNPAID BEN-
EFITS.—Section 502(a)(1)(B) of the Employee Re-
tirement Income Security Act of 1974 (29 U.S.C.
1132(a)(1)(B)) is amended by inserting ‘‘(together
with reasonable pre-judgment interest on unpaid
pension plan benefits)’’ after ‘‘to recover benefits
due to him under the terms of his plan’’.
(2) ATTORNEY FEES AND COSTS OF ACTION.—
Section 502(g) of such Act (29 U.S.C. 1132(g)) is
amended—
(A) in paragraph (1), by inserting ‘‘or (3)’’
after ‘‘paragraph (2)’’; and
(B) by adding at the end the following new
paragraph:
‘‘(3) In any action or settlement proceeding under
this title with respect to an employee pension benefit plan
brought by a participant or beneficiary under such plan
in which the participant or beneficiary prevails or substan-
tially prevails, the participant or beneficiary shall be enti-
tled to reasonable attorney’s fees, reasonable expert wit-
ness fees, and other reasonable costs relating to the ac-
tion.’’.
(b) ALLOWANCE
FOR
LEGAL
RELIEF.—Section
502(a) of such Act (29 U.S.C. 1132(a)) is amended, in
paragraphs (3)(B), (5)(B), and (8)(B), by inserting ‘‘legal
or’’ before ‘‘equitable’’ each place it appears.
(c) EFFECTIVE DATE.—The amendments made by
this section shall apply with respect to causes of action
arising after the date of the enactment of this Act.