plans) is amended by adding at the end the following new 
section: 
‘‘SEC. 4980H. FAILURE TO PROVIDE NOTICE TO PARTICI-
PANTS OF PLAN FEE INFORMATION. 
‘‘(a) IMPOSITION OF TAX.—There is hereby imposed 
a tax on the failure of any plan administrator of an appli-
cable defined contribution plan to meet the requirements 
of subsection (e) with respect to any participant or bene-
ficiary. 
‘‘(b) AMOUNT OF TAX.— 
‘‘(1) IN GENERAL.—The amount of the tax im-
posed by subsection (a) on any failure with respect 
to any participant or beneficiary shall be $100 for 
each day in the noncompliance period. 
‘‘(2) NONCOMPLIANCE PERIOD.—For purposes 
of paragraph (1), the noncompliance period with re-
spect to a failure is the period beginning on the date 
the plan administrator failed to provide notice to 
participants and beneficiaries in accordance with 
subsection (e) and ending on the date the notice to 
which the failure relates is provided or the failure is 
otherwise corrected. 
‘‘(3) SEPARATE TREATMENT OF VIOLATIONS.— 
For purposes of paragraph (1), each violation with 
VerDate Aug 31 2005 
05:04 Oct 06, 2007
Jkt 059200
PO 00000
Frm 00002
Fmt 6652
Sfmt 6201
E:\BILLS\H3765.IH
H3765
hmoore on PRODPC68 with HMBILLS
respect to any single participant or beneficiary shall 
be treated as a separate violation. 
‘‘(c) LIMITATIONS ON AMOUNT OF TAX.— 
‘‘(1) ANNUAL
AGGREGATE
LIMITATION.—The 
total amount of tax imposed by this section with re-
spect to any plan administrator for any plan year 
shall not exceed $500,000. 
‘‘(2) TAX NOT TO APPLY TO FAILURES COR-
RECTED WITHIN 90 DAYS.—No tax shall be imposed 
by subsection (a) on any failure if— 
‘‘(A) any person subject to liability for the 
tax under subsection (a) exercised reasonable 
diligence to meet the requirements of subsection 
(e), and 
‘‘(B) such person provides the notice de-
scribed in subsection (e) during the 90-day pe-
riod beginning on the date such person knew, or 
exercising reasonable diligence would have 
known, that such failure existed. 
‘‘(3) WAIVER BY SECRETARY.—In the case of a 
failure which is due to reasonable cause and not to 
willful neglect, the Secretary shall waive part or all 
of the tax imposed by subsection (a) to the extent 
that the payment of such tax would be excessive or 
otherwise inequitable relative to the failure involved. 
VerDate Aug 31 2005 
05:04 Oct 06, 2007
Jkt 059200
PO 00000
Frm 00003
Fmt 6652
Sfmt 6201
E:\BILLS\H3765.IH
H3765
hmoore on PRODPC68 with HMBILLS
‘‘(d) LIABILITY FOR TAX.—The following shall be lia-
ble for the tax imposed by subsection (a): 
‘‘(1) In the case of a plan other than a multi-
employer plan, the employer maintaining the plan. 
‘‘(2) In the case of a multiemployer plan, the 
plan. 
‘‘(e) NOTICE OF FEES AND EXPENSES TO PARTICI-
PANTS.— 
‘‘(1) IN GENERAL.—The requirements of this 
subsection are met if the plan administrator of an 
applicable defined contribution plan meets the re-
quirements of paragraphs (2), (3), (4), and (5). 
‘‘(2) ENROLLMENT NOTICE.— 
‘‘(A) IN GENERAL.—A plan administrator 
meets the requirements of this paragraph if 
each employee eligible to participate is, before 
the initial investment of any contribution made 
on behalf of such employee, given a written ex-
planation of the plan’s fees and expenses, the 
key characteristics of the plan’s investment al-
ternatives and an explanation of the manner for 
making elections among investment alter-
natives. 
‘‘(B) WRITTEN EXPLANATION SAFE HAR-
BOR.—An explanation shall be treated as satis-
VerDate Aug 31 2005 
05:04 Oct 06, 2007
Jkt 059200
PO 00000
Frm 00004
Fmt 6652
Sfmt 6201
E:\BILLS\H3765.IH
H3765
hmoore on PRODPC68 with HMBILLS
fying the written explanation requirement of 
subparagraph (A) if such explanation is in writ-
ing and provides a description, to the extent ap-
plicable, of the following: 
‘‘(i) The investment alternatives avail-
able to a participant under the plan and 
the method for a participant making in-
vestment elections. 
‘‘(ii) With respect to each investment 
alternative— 
‘‘(I) a general description of the 
alternative’s 
investment 
objectives, 
risk and return characteristics, his-
toric rates of return, and the name of 
the alternative’s investment manager; 
‘‘(II) whether the alternative is 
actively or passively managed; and 
‘‘(III) whether the alternative is 
designed to be a comprehensive, 
stand-alone investment for retirement 
that provides varying degrees of long- 
term appreciation and capital preser-
vation through a mix of equity and 
fixed income exposures. 
VerDate Aug 31 2005 
05:04 Oct 06, 2007
Jkt 059200
PO 00000
Frm 00005
Fmt 6652
Sfmt 6201
E:\BILLS\H3765.IH
H3765
hmoore on PRODPC68 with HMBILLS
‘‘(iii) Annual asset-based fees for each 
investment alternative which reduce the in-
vestment alternative’s rate of return and, 
if applicable, a statement that the fees and 
expenses of one or more investment alter-
natives pay for services other than invest-
ment management. 
‘‘(iv) Annual fees and expenses for ad-
ministration and recordkeeping which are 
deducted from (or reduce the income of) 
participants’ or beneficiaries’ accounts and 
which are not reflected in clause (iii), in-
cluding a statement of the method used to 
allocate fees and expenses described in this 
clause to participants’ and beneficiaries’ 
accounts. 
‘‘(v) Fees and expenses in connection 
with purchases or sales of interests in in-
vestment alternatives. 
‘‘(vi) The existence of fees and ex-
penses associated with participant-initiated 
transactions or services which may be de-
ducted from participants’ or beneficiaries’ 
accounts other than fees and expenses de-
scribed in clause (v) and the method that 
VerDate Aug 31 2005 
05:04 Oct 06, 2007
Jkt 059200
PO 00000
Frm 00006
Fmt 6652
Sfmt 6201
E:\BILLS\H3765.IH
H3765
hmoore on PRODPC68 with HMBILLS
participants and beneficiaries may utilize 
to obtain additional information regarding 
such fees and expenses. 
‘‘(vii) Fees and expenses which may 
be deducted from participants’ or bene-
ficiaries’ accounts and which are not re-
flected in clauses (iii) through (vi). 
‘‘(viii) A statement explaining that in-
vestment alternatives should be selected 
not only on the basis of the level of fees 
charged by each alternative but also on the 
basis of consideration of other key factors, 
including the alternative’s investment ob-
jective, level of risk, historic rates of return 
and the participant’s personal investment 
objective. 
‘‘(3) ANNUAL NOTICE.— 
‘‘(A) IN GENERAL.—A plan administrator 
meets the requirements of this paragraph if 
each participant and beneficiary is, within 90 
days following the end of each plan year, given 
a written explanation describing the investment 
alternatives that the participant or beneficiary 
had selected as of the last day of the plan year 
VerDate Aug 31 2005 
05:04 Oct 06, 2007
Jkt 059200
PO 00000
Frm 00007
Fmt 6652
Sfmt 6201
E:\BILLS\H3765.IH
H3765
hmoore on PRODPC68 with HMBILLS
‘‘(v) The statement described in para-
graph (2)(B)(viii). 
‘‘(vi) A statement regarding how a 
participant or beneficiary may access the 
information required to be disclosed under 
paragraph (2). 
‘‘(4) SERVICE PROVIDER DISCLOSURE.—The re-
quirements of this paragraph are met if the plan ad-
ministrator— 
‘‘(A) provides to participants and bene-
ficiaries a copy of any statement received pur-
suant to section 4980I within 30 days after re-
ceipt of a written request for such statement, 
and 
‘‘(B) posts a copy of such statement on 
any Intranet or Internet website maintained for 
the purpose of providing participants and bene-
ficiaries access to plan information. 
‘‘(5) 
NOTICE
OF
INVESTMENT
MENU 
CHANGES.—The requirements of this paragraph are 
met if, in advance of any change in the investment 
alternatives available under the plan, the plan ad-
ministrator shall provide the notice described in 
paragraph (2) to affected participants and bene-
VerDate Aug 31 2005 
05:04 Oct 06, 2007
Jkt 059200
PO 00000
Frm 00010
Fmt 6652
Sfmt 6201
E:\BILLS\H3765.IH
H3765
hmoore on PRODPC68 with HMBILLS
ficiaries with respect to the change in investment al-
ternatives. 
‘‘(6) FORM OF FEE DISCLOSURE.—Fees and ex-
penses may be expressed as a dollar amount or as 
a percentage of assets (or a combination thereof). 
‘‘(7) ALTERNATIVE
METHODS
OF
COMPLI-
ANCE.— 
‘‘(A) IN
GENERAL.—The Secretary shall 
allow any explanation under this section to be 
provided by using new technologies in the same 
manner as new technologies are allowed with 
respect to other explanations and notices re-
quired under section 401(a). 
‘‘(B) CALENDAR YEAR TREATED AS PLAN 
YEAR.—The Secretary shall allow a plan admin-
istrator to treat the calendar year as the plan 
year for purposes of paragraph (3). 
‘‘(C) REGULATIONS.—The Secretary shall 
issue regulations that permit plan administra-
tors— 
‘‘(i) to provide a written notice of the 
availability of the information described 
under paragraphs (2), (3), (4), and (5) 
and to make such information available 
through new technologies, and 
VerDate Aug 31 2005 
05:04 Oct 06, 2007
Jkt 059200
PO 00000
Frm 00011
Fmt 6652
Sfmt 6201
E:\BILLS\H3765.IH
H3765
hmoore on PRODPC68 with HMBILLS
‘‘(ii) in appropriate circumstances to 
provide the notice described in paragraph 
(2) after the initial contribution made on a 
participant’s behalf in the case of a plan 
that provides for automatic enrollment. 
‘‘(8) REASONABLE ESTIMATES PERMITTED.—A 
plan administrator shall not be treated as failing to 
satisfy the requirements of paragraphs (2), (3), and 
(5) solely because the plan administrator uses rea-
sonable estimates of expenses and fees or reasonably 
allocates fees and expenses among different fee clas-
sifications. For purposes of paragraph (3), an esti-
mate shall be considered as reasonable if such esti-
mate is based on fees and expenses as of the last 
day of the plan year immediately preceding the date 
the notice is provided or any subsequent date pre-
ceding the date the notice is provided. 
‘‘(9) COMBINATION WITH OTHER NOTICES.—A 
plan shall not be treated as failing to satisfy the re-
quirements of paragraphs (2), (3), and (5) solely be-
cause the information is provided in combination 
with other plan communications or in more than one 
plan communication provided contemporaneously. 
‘‘(10) MODEL
STATEMENT.—The Secretary 
shall prescribe model statements that may be used 
VerDate Aug 31 2005 
05:04 Oct 06, 2007
Jkt 059200
PO 00000
Frm 00012
Fmt 6652
Sfmt 6201
E:\BILLS\H3765.IH
H3765
hmoore on PRODPC68 with HMBILLS
for purposes of satisfying the requirements of para-
graphs (2), (3), and (5). 
‘‘(f) DEFINITIONS.— 
‘‘(1) APPLICABLE
DEFINED
CONTRIBUTION 
PLAN.—The term ‘applicable defined contribution 
plan’ means the portion of any defined contribution 
plan which— 
‘‘(A) permits a participant or beneficiary 
to exercise control over assets in his or her ac-
count; and 
‘‘(B) is described in clauses (iii) through 
(vi) of section 402(c)(8)(B). 
‘‘(2) PLAN ADMINISTRATOR.—The term ‘plan 
administrator’ has the meaning given such term by 
section 414(g). 
‘‘(g) REGULATORY AUTHORITY.—The Secretary of 
Treasury shall issue regulations for purposes of this sec-
tion, including regulations addressing the appropriate 
classification of fees and expenses and the disclosure of 
fees and expenses in investment alternatives that do not 
have explicit fees, including investment alternatives that 
provide a guaranteed rate of return.’’. 
(b) CLERICAL AMENDMENT.—The table of sections 
for chapter 43 of such Code is amended by adding at the 
end the following new item: 
VerDate Aug 31 2005 
05:04 Oct 06, 2007
Jkt 059200
PO 00000
Frm 00013
Fmt 6652
Sfmt 6201
E:\BILLS\H3765.IH
H3765
hmoore on PRODPC68 with HMBILLS
‘‘Sec. 4980H. Failure to provide notice to participants of plan fee informa-
tion.’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to plan years beginning on or after 
January 1, 2009. 
SEC. 3. DISCLOSURE BETWEEN SERVICE PROVIDERS AND 
PLANS. 
(a) IN GENERAL.—Chapter 43 of the Internal Rev-
enue Code of 1986 (relating to qualified pension, etc. 
plans), as amended by section 2, is amended by adding 
at the end the following new section: 
‘‘SEC. 4980I. FAILURE TO PROVIDE NOTICE OF PLAN FEE 
INFORMATION TO PLAN ADMINISTRATORS. 
‘‘(a) IMPOSITION OF TAX.—There is hereby imposed 
a tax on any service provider that fails to meet the require-
ments of subsection (d) with respect to any applicable de-
fined contribution plan. 
‘‘(b) AMOUNT OF TAX.— 
‘‘(1) IN GENERAL.—The amount of the tax im-
posed by subsection (a) on any failure with respect 
to any applicable defined contribution plan shall be 
$1,000 for each day in the noncompliance period. 
‘‘(2) NONCOMPLIANCE PERIOD.—For purposes 
of paragraph (1), the noncompliance period with re-
spect to a failure is the period beginning on the date 
the service provider failed to meet the requirements 
VerDate Aug 31 2005 
05:04 Oct 06, 2007
Jkt 059200
PO 00000
Frm 00014
Fmt 6652
Sfmt 6201
E:\BILLS\H3765.IH
H3765
hmoore on PRODPC68 with HMBILLS