IB 
Union Calendar No. 50
108TH CONGRESS 
1ST SESSION H. R. 1000
[Report No. 108–43, Part I] 
To amend title I of the Employee Retirement Income Security Act of 1974 
and the Internal Revenue Code of 1986 to provide additional protections 
to participants and beneficiaries in individual account plans from exces-
sive investment in employer securities and to promote the provision 
of retirement investment advice to workers managing their retirement 
income assets. 
IN THE HOUSE OF REPRESENTATIVES 
FEBRUARY 27, 2003
Mr. BOEHNER (for himself, Mr. SAM JOHNSON of Texas, Mr. GREENWOOD, 
Mr. GIBBONS, Mr. KELLER, Mr. WILSON of South Carolina, Mr. NOR-
WOOD, Mr. PLATTS, Mr. TIBERI, Mr. SHAYS, Mr. SIMMONS, Mr. 
MCKEON, Mrs. BIGGERT, Mr. FRELINGHUYSEN, Mr. ISAKSON, Ms. 
GINNY BROWN-WAITE of Florida, Mr. LATOURETTE, Ms. NORTON, Mr. 
SOUDER, Mr. SENSENBRENNER, Mr. ENGLISH, Mr. GREEN of Wisconsin, 
Mr. HERGER, Mr. WELDON of Pennsylvania, Mr. BEAUPREZ, Mr. 
FEENEY, Mr. NEY, Mr. BALLENGER, Mr. SWEENEY, Mr. BRADY of 
Texas, Mr. BURR, Mrs. MUSGRAVE, Mr. DEMINT, Mr. CRANE, Ms. 
HART, Mr. OXLEY, Mr. UPTON, Mrs. BLACKBURN, Mr. KLINE, Mr. 
COLE, Mr. CASTLE, Mr. PETERSON of Pennsylvania, Mr. TANCREDO, Mr. 
ROGERS of Michigan, Mr. KOLBE, Mr. JANKLOW, Mr. REYNOLDS, Mr. 
REHBERG, Mr. HILL, Mr. FOSSELLA, Mr. BOOZMAN, Mr. CULBERSON, 
and Mr. WALSH) introduced the following bill; which was referred to the 
Committee on Education and the Workforce, and in addition to the Com-
mittee on Ways and Means, for a period to be subsequently determined 
by the Speaker, in each case for consideration of such provisions as fall 
within the jurisdiction of the committee concerned 
MARCH 18, 2003
Reported from the Committee on Education and the Workforce with an 
amendment
[Strike out all after the enacting clause and insert the part printed in italic] 
MARCH 18, 2003
Referral to the Committee on Ways and Means extended for a period ending 
not later than March 28, 2003
MARCH 28, 2003
Referral to the Committee on Ways and Means extended for a period ending 
not later than May 9, 2003
MAY 9, 2003
Additional sponsors: Mr. WOLF, and Mr. GILLMOR
MAY 9, 2003
Committee on Ways and Means discharged; committed to the Committee of 
the Whole House on the State of the Union and ordered to be printed 
[For text of introduced bill, see copy of bill as introduced on February 27, 2003] 
A BILL 
To amend title I of the Employee Retirement Income Secu-
rity Act of 1974 and the Internal Revenue Code of 
1986 to provide additional protections to participants 
and beneficiaries in individual account plans from exces-
sive investment in employer securities and to promote 
the provision of retirement investment advice to workers 
managing their retirement income assets.
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 
‘‘Pension Security Act of 2003’’. 
(b) TABLE OF CONTENTS.—The table of contents is as 
follows:
Sec. 1. Short title and table of contents.
TITLE I—IMPROVEMENTS IN PENSION SECURITY 
Sec. 101. Periodic pension benefits statements. 
Sec. 102. Inapplicability of relief from fiduciary liability during blackout peri-
ods. 
Sec. 103. Informational and educational support for pension plan fiduciaries. 
Sec. 104. Diversification requirements for defined contribution plans that hold 
employer securities. 
Sec. 105. Prohibited transaction exemption for the provision of investment advice. 
Sec. 106. Study regarding impact on retirement savings of participants and 
beneficiaries by requiring consultants to advise plan fiduciaries 
of individual account plans. 
Sec. 107. Treatment of qualified retirement planning services. 
Sec. 108. Effective dates and related rules. 
TITLE II—OTHER PROVISIONS RELATING TO PENSIONS 
Sec. 201. Amendments to Retirement Protection Act of 1994. 
Sec. 202. Reporting simplification. 
Sec. 203. Improvement of employee plans compliance resolution system. 
Sec. 204. Flexibility in nondiscrimination, coverage, and line of business rules. 
Sec. 205. Extension to all governmental plans of moratorium on application of 
certain nondiscrimination rules applicable to State and local 
plans. 
Sec. 206. Notice and consent period regarding distributions. 
Sec. 207. Annual report dissemination. 
Sec. 208. Technical corrections to Saver Act. 
Sec. 209. Missing participants and beneficiaries. 
Sec. 210. Reduced PBGC premium for new plans of small employers. 
Sec. 211. Reduction of additional PBGC premium for new and small plans. 
Sec. 212. Authorization for PBGC to pay interest on premium overpayment re-
funds. 
Sec. 213. Substantial owner benefits in terminated plans. 
Sec. 214. Benefit suspension notice. 
Sec. 215. Studies. 
Sec. 216. Interest rate range for additional funding requirements. 
TITLE III—GENERAL PROVISIONS 
Sec. 301. Provisions relating to plan amendments.
TITLE I—IMPROVEMENTS IN 
PENSION SECURITY 
SEC. 101. PERIODIC PENSION BENEFITS STATEMENTS. 
(a) AMENDMENTS TO THE EMPLOYEE RETIREMENT 
INCOME SECURITY ACT OF 1974.—
(1) REQUIREMENTS.—
(A) IN
GENERAL.—Section 105(a) of the 
Employee Retirement Income Security Act of 
1974 (29 U.S.C. 1025(a)) is amended to read as 
follows: 
‘‘(a)(1)(A) The administrator of an individual account 
plan shall furnish a pension benefit statement—
‘‘(i) to each plan participant at least annually, 
‘‘(ii) to each plan beneficiary upon written re-
quest, and 
‘‘(iii) in the case of an applicable individual ac-
count plan, to each individual who is a plan partici-
pant or beneficiary and who has a right to direct in-
vestments, at least quarterly. 
‘‘(B) The administrator of a defined benefit plan shall 
furnish a pension benefit statement—
‘‘(i) at least once every 3 years to each partici-
pant with a nonforfeitable accrued benefit who is em-
ployed by the employer maintaining the plan at the 
time the statement is furnished to participants, and 
‘‘(ii) to a plan participant or plan beneficiary 
of the plan upon written request. 
Information furnished under clause (i) to a participant 
may be based on reasonable estimates determined under reg-
ulations prescribed by the Secretary, in consultation with 
the Pension Benefit Guaranty Corporation.
‘‘(2) A pension benefit statement under paragraph 
(1)—
‘‘(A) shall indicate, on the basis of the latest 
available information—
‘‘(i) the total benefits accrued, and
‘‘(ii) the nonforfeitable pension benefits, if 
any, which have accrued, or the earliest date on 
which benefits will become nonforfeitable, 
‘‘(B) shall be written in a manner calculated to 
be understood by the average plan participant, and 
‘‘(C) may be provided in written form or in elec-
tronic or other appropriate form to the extent that 
such form is reasonably accessible to the recipient. 
‘‘(3)(A) In the case of a defined benefit plan, the re-
quirements of paragraph (1)(B)(i) shall be treated as met 
with respect to a participant if the administrator, at least 
once each year, provides the participant with notice, at the 
participant’s last known address, of the availability of the 
pension benefit statement and the ways in which the partic-
ipant may obtain such statement. Such notice shall be pro-
vided in written, electronic, or other appropriate form, and 
may be included with other communications to the partici-
pant if done in a manner reasonably designed to attract 
the attention of the participant.
‘‘(B) The Secretary may provide that years in which 
no employee or former employee benefits (within the mean-
ing of section 410(b) of the Internal Revenue Code of 1986) 
under the plan need not be taken into account in deter-
mining the 3-year period under paragraph (1)(B)(i).’’. 
(B) CONFORMING AMENDMENTS.—
(i) Section 105 of the Employee Retire-
ment Income Security Act of 1974 (29 
U.S.C. 1025) is amended by striking sub-
section (d). 
(ii) Section 105(b) of such Act (29 
U.S.C. 1025(b)) is amended to read as fol-
lows: 
‘‘(b) In no case shall a participant or beneficiary of 
a plan be entitled to more than one statement described in 
clause (i) or (ii) of subsection (a)(1)(A) or clause (i) or (ii) 
of subsection (a)(1)(B), whichever is applicable, in any 12-
month period. If such report is required under subsection 
(a) to be furnished at least quarterly, the requirements of 
the preceding sentence shall be applied with respect to each 
quarter in lieu of the 12-month period.’’. 
(2) INFORMATION REQUIRED FROM APPLICABLE 
INDIVIDUAL
ACCOUNT
PLANS.—Section 105 of such 
Act (as amended by paragraph (1)) is amended fur-
ing a discussion of the risk of holding more than 25 
percent of a portfolio in the security of any one enti-
ty, such as employer securities. 
‘‘(2) The Secretary shall issue guidance and model no-
tices which meet the requirements of this subsection.’’. 
(3) DEFINITION OF APPLICABLE INDIVIDUAL AC-
COUNT PLAN.—Section 3 of such Act (29 U.S.C. 1002) 
is amended by adding at the end the following new 
paragraph: 
‘‘(42)(A) The term ‘applicable individual account 
plan’ means any individual account plan, except that such 
term does not include an employee stock ownership plan 
(within the meaning of section 4975(e)(7) of the Internal 
Revenue Code of 1986) unless there are any contributions 
to such plan (or earnings thereunder) held within such plan 
that are subject to subsection (k)(3) or (m)(2) of section 401 
of the Internal Revenue Code of 1986. Such term shall not 
include a one-participant retirement plan. 
‘‘(B) The term ‘one-participant retirement plan’ 
means a pension plan with respect to which the following 
requirements are met: 
‘‘(i) on the first day of the plan year—
‘‘(I) the plan covered only one individual 
(or the individual and the individual’s spouse)
and the individual owned 100 percent of the 
plan sponsor (whether or not incorporated), or 
‘‘(II) the plan covered only one or more 
partners (or partners and their spouses) in the 
plan sponsor; 
‘‘(ii) the plan meets the minimum coverage re-
quirements of section 410(b) of the Internal Revenue 
Code of 1986 (as in effect on the date of the enactment 
of this paragraph) without being combined with any 
other plan of the business that covers the employees of 
the business; 
‘‘(iii) the plan does not provide benefits to any-
one except the individual (and the individual’s 
spouse) or the partners (and their spouses); 
‘‘(iv) the plan does not cover a business that is 
a member of an affiliated service group, a controlled 
group of corporations, or a group of businesses under 
common control; and 
‘‘(v) the plan does not cover a business that 
leases employees.’’. 
(4) CIVIL PENALTIES FOR FAILURE TO PROVIDE 
QUARTERLY BENEFIT STATEMENTS.—Section 502 of 
such Act (29 U.S.C. 1132) is amended—
(A) in subsection (a)(6), by striking ‘‘(6), or 
(7)’’ and inserting ‘‘(6), (7), or (8)’’;
(B) by redesignating paragraph (8) of sub-
section (c) as paragraph (9); and 
(C) by inserting after paragraph (7) of sub-
section (c) the following new paragraph: 
‘‘(8) The Secretary may assess a civil penalty against 
any plan administrator of up to $1,000 a day for each day 
on which the plan administrator has failed to comply with 
the requirements of clause (iii) of section 105(a)(1)(A) and
has not corrected such failure by providing the required 
pension benefit statements to the affected participants and 
beneficiaries.’’. 
(5) MODEL
STATEMENTS.—The Secretary of 
Labor shall, not later than 180 days after the date of 
the enactment of this Act, issue initial guidance and 
a model benefit statement, written in a manner cal-
culated to be understood by the average plan partici-
pant, that may be used by plan administrators in 
complying with the requirements of section 105 of the 
Employee Retirement Income Security Act of 1974. 
Not later than 75 days after the date of the enactment 
of this Act, the Secretary shall promulgate interim 
final rules necessary to carry out the amendments 
made by this subsection. 
(b) AMENDMENTS TO THE INTERNAL REVENUE CODE 
OF 1986.—
(1) PROVISION OF INVESTMENT EDUCATION NO-
TICES TO PARTICIPANTS IN CERTAIN PLANS.—Section 
414 of the Internal Revenue Code of 1986 (relating to 
definitions and special rules) is amended by adding 
at the end the following: 
‘‘(w) PROVISION OF INVESTMENT EDUCATION NOTICES 
TO PARTICIPANTS IN CERTAIN PLANS.—
‘‘(1) IN GENERAL.—The plan administrator of 
an applicable pension plan shall provide to each ap-
plicable individual an investment education notice 
described in paragraph (2) at the time of the enroll-
ment of the applicable individual in the plan and not 
less often than annually thereafter. 
‘‘(2) INVESTMENT EDUCATION NOTICE.—An in-
vestment education notice is described in this para-
graph if such notice contains—
‘‘(A) an explanation, for the long-term re-
tirement security of participants and bene-
ficiaries, of generally accepted investment prin-
ciples, including principles of risk management 
and diversification, and 
‘‘(B) a discussion of the risk of holding sub-
stantial portions of a portfolio in the security of 
any one entity, such as employer securities.
‘‘(3) UNDERSTANDABILITY.—Each notice re-
quired by paragraph (1) shall be written in a manner 
calculated to be understood by the average plan par-
ticipant and shall provide sufficient information (as 
determined in accordance with guidance provided by 
the Secretary) to allow recipients to understand such 
notice. 
‘‘(4) FORM AND MANNER OF NOTICES.—The no-
tices required by this subsection shall be in writing, 
except that such notices may be in electronic or other 
form (or electronically posted on the plan’s website) 
to the extent that such form is reasonably accessible 
to the applicable individual. 
‘‘(5) DEFINITIONS.—For purposes of this sub-
section—
‘‘(A) APPLICABLE
INDIVIDUAL.—The term 
‘applicable individual’ means—
‘‘(i) any participant in the applicable 
pension plan, 
‘‘(ii) any beneficiary who is an alter-
nate payee (within the meaning of section 
414(p)(8)) under a qualified domestic rela-
tions order (within the meaning of section 
414(p)(1)(A)), and
‘‘(iii) any beneficiary of a deceased 
participant or alternate payee. 
‘‘(B) APPLICABLE
PENSION
PLAN.—The 
term ‘applicable pension plan’ means—
‘‘(i) a plan described in clause (i), (ii), 
or (iv) of section 219(g)(5)(A), and 
‘‘(ii) an eligible deferred compensation 
plan (as defined in section 457(b)) of an el-
igible 
employer 
described 
in 
section 
457(e)(1)(A), 
which permits any participant to direct the in-
vestment of some or all of his account in the 
plan or under which the accrued benefit of any 
participant depends in whole or in part on hy-
pothetical investments directed by the partici-
pant. Such term shall not include a one-partici-
pant retirement plan or a plan to which section 
105 of the Employee Retirement Income Security 
Act of 1974 applies. 
‘‘(C) ONE-PARTICIPANT RETIREMENT PLAN 
DEFINED.—The term ‘one-participant retirement 
plan’ means a retirement plan with respect to 
which the following requirements are met: 
‘‘(i) on the first day of the plan year—
‘‘(I) the plan covered only one in-
dividual (or the individual and the in-
dividual’s spouse) and the individual 
owned 100 percent of the plan sponsor 
(whether or not incorporated), or 
‘‘(II) the plan covered only one or 
more partners (or partners and their 
spouses) in the plan sponsor; 
‘‘(ii) the plan meets the minimum cov-
erage requirements of 410(b) without being 
combined with any other plan of the busi-
ness that covers the employees of the busi-
ness; 
‘‘(iii) the plan does not provide benefits 
to anyone except the individual (and the in-
dividual’s spouse) or the partners (and their 
spouses); 
‘‘(iv) the plan does not cover a business 
that is a member of an affiliated service 
group, a controlled group of corporations, or 
a group of businesses under common con-
trol; and 
‘‘(v) the plan does not cover a business 
that leases employees.
‘‘(6) CROSS REFERENCE.—
‘‘For provisions relating to penalty for failure to 
provide the notice required by this section, see sec-
tion 6652(m).’’.
(2) PENALTY
FOR
FAILURE
TO
PROVIDE
NO-
TICE.—Section 6652 of such Code (relating to failure 
to file certain information returns, registration state-
ments, etc.) is amended by redesignating subsection 
(m) as subsection (n) and by inserting after sub-
section (l) the following new subsection:
‘‘(m) FAILURE TO PROVIDE INVESTMENT EDUCATION 
NOTICES TO PARTICIPANTS IN CERTAIN PLANS.—In the 
case of each failure to provide a written explanation as re-
quired by section 414(w) with respect to an applicable indi-
vidual (as defined in such section), at the time prescribed 
therefor, unless it is shown that such failure is due to rea-
sonable cause and not to willful neglect, there shall be paid, 
on notice and demand of the Secretary and in the same 
manner as tax, by the person failing to provide such notice, 
an amount equal to $100 for each such failure, but the total 
amount imposed on such person for all such failures during 
any calendar year shall not exceed $50,000.’’. 
SEC. 102. INAPPLICABILITY OF RELIEF FROM FIDUCIARY LI-
ABILITY DURING BLACKOUT PERIODS. 
(a) IN GENERAL.—Section 404(c) of the Employee Re-
tirement Income Security Act of 1974 (29 U.S.C. 1104(c))
is amended by adding at the end the following new para-
graph: 
‘‘(4)(A) Paragraph (1)(B) shall not apply in connec-
tion with the direction or diversification of assets credited 
to the account of any participant or beneficiary during a 
blackout period if, by reason of the imposition of such black-
out period, the ability of such participant or beneficiary 
to direct or diversify such assets is suspended, limited, or 
restricted. 
‘‘(B) If the fiduciary authorizing a blackout period 
meets the requirements of this title in connection with au-
thorizing such blackout period, no person who is a fiduciary 
shall be liable under this title for any loss occurring during 
the blackout period as a result of any exercise by the partic-
ipant or beneficiary of control over assets in his or her ac-
count prior to the blackout period. Matters to be considered 
in determining whether a fiduciary has met the require-
ments of this title include whether such fiduciary—
‘‘(i) has considered the reasonableness of the ex-
pected length of the blackout period, 
‘‘(ii) has provided the notice required under sec-
tion 101(i)(2), and 
‘‘(iii) has acted in accordance with the require-
ments of subsection (a) in determining whether to 
enter into the blackout period.
‘‘(C) If a blackout period arises in connection with a 
change in the investment options offered under the plan, 
a participant or beneficiary shall be deemed to have exer-
cised control over the assets in his or her account prior to 
the blackout period, if, after reasonable notice of the change 
in investment options is given to such participant or bene-
ficiary before such blackout period, assets in the account 
of the participant or beneficiary are transferred—
‘‘(i) to plan investment options in accordance 
with the affirmative election of the participant or 
beneficiary, or 
‘‘(ii) in any case in which there is no such elec-
tion, in the manner set forth in such notice. 
‘‘(D) Any imposition of any limitation or restriction 
that may govern the frequency of transfers between invest-
ment vehicles shall not be treated as the imposition of a 
blackout period to the extent such limitation or restriction 
is disclosed to participants or beneficiaries through the 
summary plan description or materials describing specific 
investment alternatives under the plan. 
‘‘(E) For purposes of this paragraph, the term ‘black-
out period’ has the meaning given such term by section 
101(i)(7).’’. 
(b) GUIDANCE.—The Secretary of Labor shall, on or 
before December 31, 2004, issue interim final regulations
providing guidance on how plan sponsors or any other af-
fected fiduciaries can satisfy their fiduciary responsibilities 
during any blackout period during which the ability of a 
participant or beneficiary to direct the investment of assets 
in his or her individual account is suspended. 
SEC. 103. INFORMATIONAL AND EDUCATIONAL SUPPORT 
FOR PENSION PLAN FIDUCIARIES. 
Section 404 of the Employee Retirement Income Secu-
rity Act of 1974 (29 U.S.C. 1104) is amended by adding 
at the end the following new subsection: 
‘‘(e) The Secretary shall establish a program under 
which information and educational resources shall be made 
available on an ongoing basis to persons serving as fidu-
ciaries under employee pension benefit plans so as to assist 
such persons in diligently and effectively carrying out their 
fiduciary duties in accordance with this part. Such pro-
gram shall provide information concerning the practices 
that define prudent investment procedures for plan fidu-
ciaries. Information provided under the program shall ad-
dress the relevant investment considerations for defined ben-
efit and defined contribution plans, including investment 
in employer securities by such plans. In developing such 
program, the Secretary shall solicit information from the 
public, including investment education professionals.’’.
SEC. 104. DIVERSIFICATION REQUIREMENTS FOR DEFINED 
CONTRIBUTION 
PLANS 
THAT 
HOLD 
EM-
PLOYER SECURITIES. 
(a) AMENDMENT TO THE EMPLOYEE RETIREMENT IN-
COME SECURITY ACT OF 1974.—Section 204 of the Em-
ployee Retirement Income Security Act of 1974 (29 U.S.C. 
1054) is amended—
(1) by redesignating subsection (j) as subsection 
(k); and 
(2) by inserting after subsection (i) the following 
new subsection: 
‘‘(j) DIVERSIFICATION
REQUIREMENTS
FOR
INDI-
VIDUAL ACCOUNT PLANS THAT HOLD EMPLOYER SECURI-
TIES.—
‘‘(1) IN GENERAL.—An applicable individual ac-
count plan shall meet the requirements of paragraphs 
(2) and (3). 
‘‘(2) EMPLOYEE CONTRIBUTIONS AND ELECTIVE 
DEFERRALS INVESTED IN EMPLOYER SECURITIES.—
In the case of the portion of the account attributable 
to employee contributions and elective deferrals which 
is invested in employer securities, a plan meets the 
requirements of this paragraph if each applicable in-
dividual may elect to direct the plan to divest any 
such securities in the individual’s account and to re-
invest an equivalent amount in other investment op-
tions which meet the requirements of paragraph (4). 
‘‘(3) EMPLOYER
CONTRIBUTIONS
INVESTED
IN 
EMPLOYER SECURITIES.—
‘‘(A) IN GENERAL.—In the case of the por-
tion of the account attributable to employer con-
tributions (other than elective deferrals to which
paragraph (2) applies) which is invested in em-
ployer securities, a plan meets the requirements 
of this paragraph if, under the plan—
‘‘(i) each applicable individual with a 
benefit based on 3 years of service may elect 
to direct the plan to divest any such securi-
ties in the individual’s account and to rein-
vest an equivalent amount in other invest-
ment options which meet the requirements 
of paragraph (4), or 
‘‘(ii) with respect to any employer se-
curity allocated to an applicable individ-
ual’s account during any plan year, such 
applicable individual may elect to direct the 
plan to divest such employer security after 
a date which is not later than 3 years after 
the end of such plan year and to reinvest an 
equivalent amount in other investment op-
tions which meet the requirements of para-
graph (4). 
‘‘(B) APPLICABLE INDIVIDUAL WITH BEN-
EFIT BASED ON 3 YEARS OF SERVICE.—For pur-
poses of subparagraph (A), an applicable indi-
vidual has a benefit based on 3 years of service 
if such individual would be an applicable indi-
vidual if only participants in the plan who have 
completed at least 3 years of service (as deter-
mined under section 203(b)) were referred to in 
paragraph (5)(B)(i). 
‘‘(4) INVESTMENT
OPTIONS.—The requirements 
of this paragraph are met if—
‘‘(A) the plan offers not less than 3 invest-
ment options, other than employer securities, to 
which an applicable individual may direct the 
proceeds from the divestment of employer securi-
ties pursuant to this subsection, each of which is 
diversified and has materially different risk and 
return characteristics, and 
‘‘(B) the plan permits the applicable indi-
vidual to choose from any of the investment op-
tions made available under the plan to which 
such proceeds may be so directed, subject to such 
restrictions as may be provided by the plan lim-
iting such choice to periodic, reasonable opportu-
nities occurring no less frequently than on a 
quarterly basis. 
‘‘(5) DEFINITIONS AND RULES.—For purposes of 
this subsection—
‘‘(A) APPLICABLE
INDIVIDUAL
ACCOUNT 
PLAN.—The term ‘applicable individual account 
plan’ means any individual account plan, except 
that such term does not include an employee 
stock ownership plan (within the meaning of sec-
tion 4975(e)(7) of the Internal Revenue Code of 
1986) unless there are any contributions to such 
plan (or earnings thereon) held within such plan 
that are subject to subsection (k)(3) or (m)(2) of 
section 401 of the Internal Revenue Code of 
1986. 
‘‘(B) APPLICABLE
INDIVIDUAL.—The term 
‘applicable individual’ means—
‘‘(i) any participant in the plan, and 
‘‘(ii) any beneficiary of a participant 
referred to in clause (i) who has an account 
under the plan with respect to which the 
beneficiary is entitled to exercise the rights 
of the participant.
‘‘(C) ELECTIVE DEFERRAL.—The term ‘elec-
tive deferral’ means an employer contribution 
described in section 402(g)(3)(A) of the Internal 
Revenue Code of 1986 (as in effect on the date 
of the enactment of this subsection). 
‘‘(D) EMPLOYER SECURITY.—The term ‘em-
ployer security’ shall have the meaning given 
such term by section 407(d)(1) of this Act (as in 
effect on the date of the enactment of this sub-
section). 
‘‘(E) 
EMPLOYEE
STOCK
OWNERSHIP 
PLAN.—The term ‘employee stock ownership 
plan’ shall have the same meaning given to such 
term by section 4975(e)(7) of the Internal Rev-
enue Code of 1986 (as in effect on the date of the 
enactment of this subsection). 
‘‘(F) ELECTIONS.—Elections under this sub-
section may be made not less frequently than 
quarterly. 
‘‘(6) EXCEPTION WHERE THERE IS NO READILY 
TRADABLE STOCK.—This subsection shall not apply if 
there is no class of stock issued by the employer (or 
by a corporation which is an affiliate of the employer 
(as defined in section 407(d)(7))) that is readily 
tradable on an established securities market (or in
such other circumstances as may be determined joint-
ly by the Secretary of Labor and the Secretary of the 
Treasury in regulations). 
‘‘(7) TRANSITION RULE.—
‘‘(A) IN GENERAL.—In the case of any indi-
vidual account plan which, on the first day of 
the first plan year to which this subsection ap-
plies, holds employer securities of any class that 
were acquired before such date and on which 
there is a restriction on diversification otherwise 
precluded by this subsection, this subsection shall 
apply to such securities of such class held in any 
plan year only with respect to the number of 
such securities equal to the applicable percentage 
of the total number of such securities of such 
class held on such date. 
‘‘(B) APPLICABLE PERCENTAGE.—For pur-
poses of subparagraph (A), the applicable per-
centage shall be as follows:
‘‘Plan years for which provi-
sions are effective: 
Applicable percentage: 
1st plan year ....................................
20 percent. 
2nd plan year ...................................
40 percent. 
3rd plan year ...................................
60 percent. 
4th plan year ....................................
80 percent. 
5th plan year or thereafter ..............
100 percent.
‘‘(C) ELECTIVE
DEFERRALS
TREATED
AS 
SEPARATE
PLAN
NOT
INDIVIDUAL
ACCOUNT 
PLAN.—For purposes of subparagraph (A), the
applicable percentage shall be 100 percent with 
respect to—
‘‘(i) employee contributions to a plan 
under which any portion attributable to 
elective deferrals is treated as a separate 
plan under section 407(b)(2) as of the date 
of the enactment of this paragraph, and 
‘‘(ii) such elective deferrals.
‘‘(D) COORDINATION
WITH
PRIOR
ELEC-
TIONS.—In any case in which a divestiture of 
investment in employer securities of any class 
held by an employee stock ownership plan prior 
to the effective date of this subsection was under-
taken pursuant to other applicable Federal law 
prior to such date, the applicable percentage (as 
determined without regard to this subparagraph) 
in connection with such securities shall be re-
duced to the extent necessary to account for the 
amount to which such election applied. 
‘‘(8) REGULATIONS.—The Secretary of the Treas-
ury shall prescribe regulations under this subsection 
in consultation with the Secretary of Labor.’’. 
(b) AMENDMENTS TO THE INTERNAL REVENUE CODE 
OF 1986.—
‘‘(i) IN GENERAL.—In the case of the 
portion of the account attributable to em-
ployer contributions (other than elective de-
ferrals to which subparagraph (B) applies) 
which is invested in employer securities, a 
plan meets the requirements of this sub-
paragraph if, under the plan—
‘‘(I) each applicable individual 
with a benefit based on 3 years of serv-
ice may elect to direct the plan to di-
vest any such securities in the individ-
ual’s account and to reinvest an equiv-
alent amount in other investment op-
tions which meet the requirements of 
subparagraph (D), or 
‘‘(II) with respect to any em-
ployer security allocated to an applica-
ble individual’s account during any 
plan year, such applicable individual 
may elect to direct the plan to divest 
such employer security after a date 
which is not later than 3 years after 
the end of such plan year and to rein-
vest an equivalent amount in other in-
vestment options which meet the re-
quirements of subparagraph (D). 
‘‘(ii) APPLICABLE
INDIVIDUAL
WITH 
BENEFIT BASED ON 3 YEARS OF SERVICE.—
For purposes of clause (i), an applicable in-
dividual has a benefit based on 3 years of 
service if such individual would be an ap-
plicable individual if only participants in 
the plan who have completed at least 3 
years of service (as determined under sec-
tion 411(a)) were referred to in subpara-
graph (E)(ii)(I). 
‘‘(D) INVESTMENT OPTIONS.—The require-
ments of this subparagraph are met if—
‘‘(i) the plan offers not less than 3 in-
vestment options, other than employer secu-
rities, to which an applicable individual 
may direct the proceeds from the divestment 
of employer securities pursuant to this 
paragraph, each of which is diversified and 
has materially different risk and return 
characteristics, and 
‘‘(ii) the plan permits the applicable 
individual to choose from any of the invest-
ment options made available under the plan
to which such proceeds may be so directed, 
subject to such restrictions as may be pro-
vided by the plan limiting such choice to 
periodic, reasonable opportunities occurring 
no less frequently than on a quarterly basis. 
‘‘(E) DEFINITIONS AND RULES.—For pur-
poses of this paragraph—
‘‘(i) APPLICABLE DEFINED CONTRIBU-
TION PLAN.—The term ‘applicable defined 
contribution plan’ means any defined con-
tribution plan, except that such term does 
not include an employee stock ownership 
plan (within the meaning of section 
4975(e)(7)) unless there are any contribu-
tions to such plan (or earnings thereon) 
held within such plan that are subject to 
subsection (k)(3) or (m)(2). 
‘‘(ii) APPLICABLE
INDIVIDUAL.—The 
term ‘applicable individual’ means—
‘‘(I) any participant in the plan, 
and 
‘‘(II) any beneficiary of a partici-
pant referred to in clause (i) who has 
an account under the plan with respect
to which the beneficiary is entitled to 
exercise the rights of the participant. 
‘‘(iii) ELECTIVE DEFERRAL.—The term 
‘elective deferral’ means an employer con-
tribution described in section 402(g)(3)(A) 
(as in effect on the date of the enactment of 
this paragraph). 
‘‘(iv) EMPLOYER SECURITY.—The term 
‘employer security’ shall have the meaning 
given such term by section 407(d)(1) of the 
Employee Retirement Income Security Act 
of 1974 (as in effect on the date of the en-
actment of this paragraph). 
‘‘(v) EMPLOYEE
STOCK
OWNERSHIP 
PLAN.—The term ‘employee stock ownership 
plan’ shall have the same meaning given to 
such term by section 4975(e)(7) of the Inter-
nal Revenue Code of 1986 (as in effect on 
the date of the enactment of this para-
graph). 
‘‘(vi) 
ELECTIONS.—Elections 
under 
this paragraph may be made not less fre-
quently than quarterly. 
‘‘(F) EXCEPTION
WHERE
THERE
IS
NO 
READILY
TRADABLE
STOCK.—This paragraph
shall not apply if there is no class of stock issued 
by the employer that is readily tradable on an 
established securities market (or in such other 
circumstances as may be determined jointly by 
the Secretary of the Treasury and the Secretary 
of Labor in regulations). 
‘‘(G) TRANSITION RULE.—
‘‘(i) IN GENERAL.—In the case of any 
defined contribution plan which, on the ef-
fective date of this subsection, holds em-
ployer securities of any class that were ac-
quired before such date and on which there 
is a restriction on diversification otherwise 
precluded by this paragraph, this para-
graph shall apply to such securities of such 
class held in any plan year only with re-
spect to the number of such securities equal 
to the applicable percentage of the total 
number of such securities of such class held 
on such date. 
‘‘(ii) APPLICABLE PERCENTAGE.—For 
purposes of clause (i), the applicable per-
centage shall be as follows:
‘‘Plan years for which provi-
sions are effective: 
Applicable percentage: 
1st plan year ....................................
20 percent. 
2nd plan year ...................................
40 percent. 
3rd plan year ...................................
60 percent.
‘‘Plan years for which provi-
sions are effective: 
Applicable percentage: 
4th plan year ....................................
80 percent. 
5th plan year or thereafter ..............
100 percent.
‘‘(iii) ELECTIVE DEFERRALS TREATED 
AS
SEPARATE
PLAN
NOT
INDIVIDUAL
AC-
COUNT PLAN.—For purposes of clause (i), 
the applicable percentage shall be 100 per-
cent with respect to—
‘‘(I) employee contributions to a 
plan under which any portion attrib-
utable to elective deferrals is treated as 
a 
separate 
plan 
under 
section 
407(b)(2) of the Employee Retirement 
Income Security Act of 1974 as of the 
date of the enactment of this para-
graph, and 
‘‘(II) such elective deferrals. 
‘‘(iv) CONTRIBUTIONS
HELD
WITHIN 
AN
ESOP.—In the case of contributions 
(other than elective deferrals and employee 
contributions) held within an employee 
stock ownership plan, in the case of the 1st 
and 2nd plan years referred to in the table 
in clause (ii), the applicable percentage 
shall be the greater of the amount deter-
mined under clause (ii) or the percentage
determined under paragraph (28) (deter-
mined as if paragraph (28) applied to a 
plan described in this paragraph). 
‘‘(v) COORDINATION WITH PRIOR ELEC-
TIONS
UNDER
PARAGRAPH
(28).—In any 
case in which a divestiture of investment in 
employer securities of any class held by an 
employee stock ownership plan prior to the 
effective date of this paragraph was under-
taken pursuant to an election under para-
graph (28) prior to such date, the applica-
ble percentage (as determined without re-
gard to this clause) in connection with such 
securities shall be reduced to the extent nec-
essary to account for the amount to which 
such election applied. 
‘‘(H) REGULATIONS.—The Secretary shall 
prescribe regulations under this paragraph in 
consultation with the Secretary of Labor.’’. 
(2) CONFORMING AMENDMENTS.—
(A) Section 401(a)(28) of such Code is 
amended by adding at the end the following new 
subparagraph:
‘‘(D) APPLICATION.—This paragraph shall 
not apply to a plan to which paragraph (35) ap-
plies.’’. 
(B) Section 409(h)(7) of such Code is 
amended by inserting before the period at the 
end ‘‘or subparagraph (B) or (C) of section 
401(a)(35)’’. 
(C) Section 4980(c)(3)(A) of such Code is 
amended by striking ‘‘if—’’ and all that follows 
and inserting ‘‘if the requirements of subpara-
graphs (B), (C), and (D) are met.’’. 
(c) EFFECTIVE DATE.—
(1) IN GENERAL.—Except as provided in para-
graph (2) and section 108, the amendments made by 
this section shall apply to plan years beginning after 
December 31, 2003, and with respect to employer se-
curities allocated to accounts before, on, or after the 
date of the enactment of this Act. 
(2) EXCEPTION.—The amendments made by this 
section shall not apply to employer securities held by 
an employee stock ownership plan which are acquired 
before January 1, 1987.
SEC. 105. PROHIBITED TRANSACTION EXEMPTION FOR THE 
PROVISION OF INVESTMENT ADVICE. 
(a) AMENDMENTS TO THE EMPLOYEE RETIREMENT 
INCOME SECURITY ACT OF 1974.—
(1) EXEMPTION
FROM
PROHIBITED
TRANS-
ACTIONS.—Section 408(b) of the Employee Retirement 
Income Security Act of 1974 (29 U.S.C. 1108(b)) is 
amended by adding at the end the following new 
paragraph: 
‘‘(14)(A) Any transaction described in subpara-
graph (B) in connection with the provision of invest-
ment advice described in section 3(21)(A)(ii), in any 
case in which—
‘‘(i) the investment of assets of the plan is 
subject to the direction of plan participants or 
beneficiaries, 
‘‘(ii) the advice is provided to the plan or 
a participant or beneficiary of the plan by a fi-
duciary adviser in connection with any sale, ac-
quisition, or holding of a security or other prop-
erty for purposes of investment of plan assets, 
and 
‘‘(iii) the requirements of subsection (g) are 
met in connection with the provision of the ad-
vice.
‘‘(B) The transactions described in this subpara-
graph are the following: 
‘‘(i) the provision of the advice to the plan, 
participant, or beneficiary; 
‘‘(ii) the sale, acquisition, or holding of a 
security or other property (including any lend-
ing of money or other extension of credit associ-
ated with the sale, acquisition, or holding of a 
security or other property) pursuant to the ad-
vice; and
‘‘(iii) the direct or indirect receipt of fees or 
other compensation by the fiduciary adviser or 
an affiliate thereof (or any employee, agent, or 
registered representative of the fiduciary adviser 
or affiliate) in connection with the provision of 
the advice or in connection with a sale, acquisi-
tion, or holding of a security or other property 
pursuant to the advice.’’. 
(2) REQUIREMENTS.—Section 408 of such Act is 
amended further by adding at the end the following 
new subsection: 
‘‘(g) REQUIREMENTS RELATING TO PROVISION OF IN-
VESTMENT ADVICE BY FIDUCIARY ADVISERS.—
‘‘(1) IN GENERAL.—The requirements of this sub-
section are met in connection with the provision of
investment advice referred to in section 3(21)(A)(ii), 
provided to an employee benefit plan or a participant 
or beneficiary of an employee benefit plan by a fidu-
ciary adviser with respect to the plan in connection 
with any sale, acquisition, or holding of a security or 
other property for purposes of investment of amounts 
held by the plan, if—
‘‘(A) in the case of the initial provision of 
the advice with regard to the security or other 
property by the fiduciary adviser to the plan, 
participant, or beneficiary, the fiduciary adviser 
provides to the recipient of the advice, at a time 
reasonably contemporaneous with the initial pro-
vision of the advice, a written notification 
(which may consist of notification by means of 
electronic communication)—
‘‘(i) of all fees or other compensation 
relating to the advice that the fiduciary ad-
viser or any affiliate thereof is to receive 
(including compensation provided by any 
third party) in connection with the provi-
sion of the advice or in connection with the 
sale, acquisition, or holding of the security 
or other property,
‘‘(ii) of any material affiliation or 
contractual relationship of the fiduciary ad-
viser or affiliates thereof in the security or 
other property, 
‘‘(iii) of any limitation placed on the 
scope of the investment advice to be pro-
vided by the fiduciary adviser with respect 
to any such sale, acquisition, or holding of 
a security or other property, 
‘‘(iv) of the types of services provided 
by the fiduciary adviser in connection with 
the provision of investment advice by the fi-
duciary adviser, 
‘‘(v) that the adviser is acting as a fi-
duciary of the plan in connection with the 
provision of the advice, and 
‘‘(vi) that a recipient of the advice 
may separately arrange for the provision of 
advice by another adviser, that could have 
no material affiliation with and receive no 
fees or other compensation in connection 
with the security or other property, 
‘‘(B) the fiduciary adviser provides appro-
priate disclosure, in connection with the sale, ac-
quisition, or holding of the security or other
‘‘(B) MODEL
FORM
FOR
DISCLOSURE
OF 
FEES
AND
OTHER
COMPENSATION.—The Sec-
retary shall issue a model form for the disclosure 
of fees and other compensation required in para-
graph (1)(A)(i) which meets the requirements of 
subparagraph (A). 
‘‘(3) EXEMPTION CONDITIONED ON MAKING RE-
QUIRED INFORMATION AVAILABLE ANNUALLY, ON RE-
QUEST, AND IN THE EVENT OF MATERIAL CHANGE.—
The requirements of paragraph (1)(A) shall be deemed 
not to have been met in connection with the initial 
or any subsequent provision of advice described in 
paragraph (1) to the plan, participant, or beneficiary 
if, at any time during the provision of advisory serv-
ices to the plan, participant, or beneficiary, the fidu-
ciary adviser fails to maintain the information de-
scribed in clauses (i) through (iv) of subparagraph 
(A) in currently accurate form and in the manner de-
scribed in paragraph (2) or fails—
‘‘(A) to provide, without charge, such cur-
rently accurate information to the recipient of 
the advice no less than annually, 
‘‘(B) to make such currently accurate infor-
mation available, upon request and without 
charge, to the recipient of the advice, or
‘‘(C) in the event of a material change to 
the information described in clauses (i) through 
(iv) of paragraph (1)(A), to provide, without 
charge, such currently accurate information to 
the recipient of the advice at a time reasonably 
contemporaneous to the material change in in-
formation. 
‘‘(4) MAINTENANCE FOR 6 YEARS OF EVIDENCE 
OF COMPLIANCE.—A fiduciary adviser referred to in 
paragraph (1) who has provided advice referred to in 
such paragraph shall, for a period of not less than 6
years after the provision of the advice, maintain any 
records necessary for determining whether the require-
ments of the preceding provisions of this subsection 
and of subsection (b)(14) have been met. A trans-
action prohibited under section 406 shall not be con-
sidered to have occurred solely because the records are 
lost or destroyed prior to the end of the 6-year period 
due to circumstances beyond the control of the fidu-
ciary adviser. 
‘‘(5) EXEMPTION FOR PLAN SPONSOR AND CER-
TAIN OTHER FIDUCIARIES.—
‘‘(A) IN
GENERAL.—Subject to subpara-
graph (B), a plan sponsor or other person who 
is a fiduciary (other than a fiduciary adviser)
shall not be treated as failing to meet the re-
quirements of this part solely by reason of the 
provision of investment advice referred to in sec-
tion 3(21)(A)(ii) (or solely by reason of con-
tracting for or otherwise arranging for the provi-
sion of the advice), if—
‘‘(i) the advice is provided by a fidu-
ciary adviser pursuant to an arrangement 
between the plan sponsor or other fiduciary 
and the fiduciary adviser for the provision 
by the fiduciary adviser of investment ad-
vice referred to in such section, 
‘‘(ii) the terms of the arrangement re-
quire compliance by the fiduciary adviser 
with the requirements of this subsection, 
and 
‘‘(iii) the terms of the arrangement in-
clude a written acknowledgment by the fidu-
ciary adviser that the fiduciary adviser is a 
fiduciary of the plan with respect to the 
provision of the advice. 
‘‘(B) CONTINUED DUTY OF PRUDENT SELEC-
TION OF ADVISER AND PERIODIC REVIEW.—Noth-
ing in subparagraph (A) shall be construed to 
exempt a plan sponsor or other person who is a
fiduciary from any requirement of this part for 
the prudent selection and periodic review of a fi-
duciary adviser with whom the plan sponsor or 
other person enters into an arrangement for the 
provision of advice referred to in section 
3(21)(A)(ii). The plan sponsor or other person 
who is a fiduciary has no duty under this part 
to monitor the specific investment advice given 
by the fiduciary adviser to any particular re-
cipient of the advice. 
‘‘(C) AVAILABILITY OF PLAN ASSETS FOR 
PAYMENT
FOR
ADVICE.—Nothing in this part 
shall be construed to preclude the use of plan as-
sets to pay for reasonable expenses in providing 
investment 
advice 
referred 
to 
in 
section 
3(21)(A)(ii). 
‘‘(6) DEFINITIONS.—For purposes of this sub-
section and subsection (b)(14)—
‘‘(A) FIDUCIARY ADVISER.—The term ‘fidu-
ciary adviser’ means, with respect to a plan, a 
person who is a fiduciary of the plan by reason 
of the provision of investment advice by the per-
son to the plan or to a participant or beneficiary 
and who is—
‘‘(i) registered as an investment ad-
viser under the Investment Advisers Act of 
1940 (15 U.S.C. 80b–1 et seq.) or under the 
laws of the State in which the fiduciary 
maintains its principal office and place of 
business, 
‘‘(ii) a bank or similar financial insti-
tution referred to in section 408(b)(4) or a 
savings association (as defined in section 
3(b)(1) of the Federal Deposit Insurance Act 
(12 U.S.C. 1813(b)(1))), but only if the ad-
vice is provided through a trust department 
of the bank or similar financial institution 
or savings association which is subject to 
periodic examination and review by Federal 
or State banking authorities, 
‘‘(iii) an insurance company qualified 
to do business under the laws of a State, 
‘‘(iv) a person registered as a broker or 
dealer under the Securities Exchange Act of 
1934 (15 U.S.C. 78a et seq.), 
‘‘(v) an affiliate of a person described 
in any of clauses (i) through (iv), or 
‘‘(vi) an employee, agent, or registered 
representative of a person described in any
of clauses (i) through (v) who satisfies the 
requirements of applicable insurance, bank-
ing, and securities laws relating to the pro-
vision of the advice. 
‘‘(B) AFFILIATE.—The term ‘affiliate’ of 
another entity means an affiliated person of the 
entity (as defined in section 2(a)(3) of the In-
vestment Company Act of 1940 (15 U.S.C. 80a–
2(a)(3))). 
‘‘(C) REGISTERED REPRESENTATIVE.—The 
term ‘registered representative’ of another entity 
means a person described in section 3(a)(18) of 
the Securities Exchange Act of 1934 (15 U.S.C. 
78c(a)(18)) (substituting the entity for the broker 
or dealer referred to in such section) or a person 
described in section 202(a)(17) of the Investment 
Advisers Act of 1940 (15 U.S.C. 80b–2(a)(17)) 
(substituting the entity for the investment ad-
viser referred to in such section).’’. 
(b) AMENDMENTS TO THE INTERNAL REVENUE CODE 
OF 1986.—
(1) EXEMPTION
FROM
PROHIBITED
TRANS-
ACTIONS.—Subsection (d) of section 4975 of the Inter-
nal Revenue Code of 1986 (relating to exemptions 
from tax on prohibited transactions) is amended—
(A) in paragraph (14), by striking ‘‘or’’ at 
the end; 
(B) in paragraph (15), by striking the pe-
riod at the end and inserting ‘‘; or’’; and 
(C) by adding at the end the following new 
paragraph: 
‘‘(16) any transaction described in subsection 
(f)(7)(A) in connection with the provision of invest-
ment advice described in subsection (e)(3)(B)(i), in 
any case in which—
‘‘(A) the investment of assets of the plan is 
subject to the direction of plan participants or 
beneficiaries, 
‘‘(B) the advice is provided to the plan or 
a participant or beneficiary of the plan by a fi-
duciary adviser in connection with any sale, ac-
quisition, or holding of a security or other prop-
erty for purposes of investment of plan assets, 
and 
‘‘(C) the requirements of subsection (f)(7)(B) 
are met in connection with the provision of the 
advice.’’. 
(2) ALLOWED
TRANSACTIONS
AND
REQUIRE-
MENTS.—Subsection (f) of such section 4975 (relating
to other definitions and special rules) is amended by 
adding at the end the following new paragraph: 
‘‘(7) PROVISIONS RELATING TO INVESTMENT AD-
VICE PROVIDED BY FIDUCIARY ADVISERS.—
‘‘(A) TRANSACTIONS
ALLOWABLE
IN
CON-
NECTION WITH INVESTMENT ADVICE PROVIDED 
BY FIDUCIARY ADVISERS.—The transactions re-
ferred to in subsection (d)(16), in connection 
with the provision of investment advice by a fi-
duciary adviser, are the following:
‘‘(i) the provision of the advice to the 
plan, participant, or beneficiary; 
‘‘(ii) the sale, acquisition, or holding of 
a security or other property (including any 
lending of money or other extension of cred-
it associated with the sale, acquisition, or 
holding of a security or other property) 
pursuant to the advice; and 
‘‘(iii) the direct or indirect receipt of 
fees or other compensation by the fiduciary 
adviser or an affiliate thereof (or any em-
ployee, agent, or registered representative of 
the fiduciary adviser or affiliate) in connec-
tion with the provision of the advice or in 
connection with a sale, acquisition, or hold-
ing of a security or other property pursuant 
to the advice. 
‘‘(B) REQUIREMENTS RELATING TO PROVI-
SION OF INVESTMENT ADVICE BY FIDUCIARY AD-
VISERS.—The requirements of this subparagraph 
(referred to in subsection (d)(16)(C)) are met in 
connection with the provision of investment ad-
vice referred to in subsection (e)(3)(B), provided 
to a plan or a participant or beneficiary of a 
plan by a fiduciary adviser with respect to the 
plan in connection with any sale, acquisition, or 
holding of a security or other property for pur-
poses of investment of amounts held by the plan, 
if—
‘‘(i) in the case of the initial provision 
of the advice with regard to the security or 
other property by the fiduciary adviser to 
the plan, participant, or beneficiary, the fi-
duciary adviser provides to the recipient of 
the advice, at a time reasonably contem-
poraneous with the initial provision of the 
advice, a written notification (which may 
consist of notification by means of electronic 
communication)—
‘‘(I) of all fees or other compensa-
tion relating to the advice that the fi-
duciary adviser or any affiliate thereof 
is to receive (including compensation 
provided by any third party) in con-
nection with the provision of the advice 
or in connection with the sale, acquisi-
tion, or holding of the security or other 
property, 
‘‘(II) of any material affiliation 
or contractual relationship of the fidu-
ciary adviser or affiliates thereof in the 
security or other property, 
‘‘(III) of any limitation placed on 
the scope of the investment advice to be 
provided by the fiduciary adviser with 
respect to any such sale, acquisition, or 
holding of a security or other property, 
‘‘(IV) of the types of services pro-
vided by the fiduciary adviser in con-
nection with the provision of invest-
ment advice by the fiduciary adviser, 
‘‘(V) that the adviser is acting as 
a fiduciary of the plan in connection 
with the provision of the advice, and
‘‘(VI) that a recipient of the ad-
vice may separately arrange for the 
provision of advice by another adviser, 
that could have no material affiliation 
with and receive no fees or other com-
pensation in connection with the secu-
rity or other property, 
‘‘(ii) the fiduciary adviser provides ap-
propriate disclosure, in connection with the 
sale, acquisition, or holding of the security 
or other property, in accordance with all 
applicable securities laws, 
‘‘(iii) the sale, acquisition, or holding 
occurs solely at the direction of the recipient 
of the advice, 
‘‘(iv) the compensation received by the 
fiduciary adviser and affiliates thereof in 
connection with the sale, acquisition, or 
holding of the security or other property is 
reasonable, and 
‘‘(v) the terms of the sale, acquisition, 
or holding of the security or other property 
are at least as favorable to the plan as an 
arm’s length transaction would be.
‘‘(C) STANDARDS FOR PRESENTATION OF IN-
FORMATION.—The notification required to be 
provided to participants and beneficiaries under 
subparagraph (B)(i) shall be written in a clear 
and conspicuous manner and in a manner cal-
culated to be understood by the average plan 
participant and shall be sufficiently accurate 
and comprehensive to reasonably apprise such 
participants and beneficiaries of the information 
required to be provided in the notification. 
‘‘(D) EXEMPTION CONDITIONED ON MAKING 
REQUIRED INFORMATION AVAILABLE ANNUALLY, 
ON REQUEST, AND IN THE EVENT OF MATERIAL 
CHANGE.—The requirements of subparagraph 
(B)(i) shall be deemed not to have been met in 
connection with the initial or any subsequent 
provision of advice described in subparagraph 
(B) to the plan, participant, or beneficiary if, at 
any time during the provision of advisory serv-
ices to the plan, participant, or beneficiary, the 
fiduciary adviser fails to maintain the informa-
tion described in subclauses (I) through (IV) of 
subparagraph (B)(i) in currently accurate form 
and in the manner required by subparagraph 
(C), or fails—
‘‘(i) to provide, without charge, such 
currently accurate information to the re-
cipient of the advice no less than annually, 
‘‘(ii) to make such currently accurate 
information available, upon request and 
without charge, to the recipient of the ad-
vice, or 
‘‘(iii) in the event of a material change 
to the information described in subclauses 
(I) through (IV) of subparagraph (B)(i), to
provide, without charge, such currently ac-
curate information to the recipient of the 
advice at a time reasonably contempora-
neous to the material change in informa-
tion. 
‘‘(E) MAINTENANCE FOR 6 YEARS OF EVI-
DENCE OF COMPLIANCE.—A fiduciary adviser re-
ferred to in subparagraph (B) who has provided 
advice referred to in such subparagraph shall, for 
a period of not less than 6 years after the provi-
sion of the advice, maintain any records nec-
essary for determining whether the requirements 
of the preceding provisions of this paragraph 
and of subsection (d)(16) have been met. A trans-
action prohibited under subsection (c)(1) shall
not be considered to have occurred solely because 
the records are lost or destroyed prior to the end 
of the 6-year period due to circumstances beyond 
the control of the fiduciary adviser. 
‘‘(F) EXEMPTION FOR PLAN SPONSOR AND 
CERTAIN OTHER FIDUCIARIES.—A plan sponsor 
or other person who is a fiduciary (other than a 
fiduciary adviser) shall not be treated as failing 
to meet the requirements of this section solely by 
reason of the provision of investment advice re-
ferred to in subsection (e)(3)(B) (or solely by 
reason of contracting for or otherwise arranging 
for the provision of the advice), if—
‘‘(i) the advice is provided by a fidu-
ciary adviser pursuant to an arrangement 
between the plan sponsor or other fiduciary 
and the fiduciary adviser for the provision 
by the fiduciary adviser of investment ad-
vice referred to in such section, 
‘‘(ii) the terms of the arrangement re-
quire compliance by the fiduciary adviser 
with the requirements of this paragraph, 
‘‘(iii) the terms of the arrangement in-
clude a written acknowledgment by the fidu-
ciary adviser that the fiduciary adviser is a
fiduciary of the plan with respect to the 
provision of the advice, and 
‘‘(iv) the requirements of part 4 of sub-
title B of title I of the Employee Retirement 
Income Security Act of 1974 are met in 
connection with the provision of such ad-
vice. 
‘‘(G) DEFINITIONS.—For purposes of this 
paragraph and subsection (d)(16)—
‘‘(i) FIDUCIARY
ADVISER.—The term 
‘fiduciary adviser’ means, with respect to a 
plan, a person who is a fiduciary of the 
plan by reason of the provision of invest-
ment advice by the person to the plan or to 
a participant or beneficiary and who is—
‘‘(I) registered as an investment 
adviser under the Investment Advisers 
Act of 1940 (15 U.S.C. 80b–1 et seq.) 
or under the laws of the State in which 
the fiduciary maintains its principal 
office and place of business, 
‘‘(II) a bank or similar financial 
institution referred to in subsection 
(d)(4) or a savings association (as de-
fined in section 3(b)(1) of the Federal
Deposit Insurance Act (12 U.S.C. 
1813(b)(1))), but only if the advice is 
provided through a trust department of 
the bank or similar financial institu-
tion or savings association which is 
subject to periodic examination and re-
view by Federal or State banking au-
thorities, 
‘‘(III) an insurance company 
qualified to do business under the laws 
of a State, 
‘‘(IV) a person registered as a 
broker or dealer under the Securities 
Exchange Act of 1934 (15 U.S.C. 78a 
et seq.), 
‘‘(V) an affiliate of a person de-
scribed in any of subclauses (I) 
through (IV), or 
‘‘(VI) an employee, agent, or reg-
istered representative of a person de-
scribed in any of subclauses (I) 
through (V) who satisfies the require-
ments of applicable insurance, bank-
ing, and securities laws relating to the 
provision of the advice.
‘‘(ii) AFFILIATE.—The term ‘affiliate’ 
of another entity means an affiliated person 
of the entity (as defined in section 2(a)(3) 
of the Investment Company Act of 1940 (15 
U.S.C. 80a–2(a)(3))). 
‘‘(iii) 
REGISTERED
REPRESENTA-
TIVE.—The term ‘registered representative’ 
of another entity means a person described 
in section 3(a)(18) of the Securities Ex-
change Act of 1934 (15 U.S.C. 78c(a)(18)) 
(substituting the entity for the broker or 
dealer referred to in such section) or a per-
son described in section 202(a)(17) of the 
Investment Advisers Act of 1940 (15 U.S.C. 
80b–2(a)(17)) (substituting the entity for 
the investment adviser referred to in such 
section).’’. 
SEC. 106. STUDY REGARDING IMPACT ON RETIREMENT SAV-
INGS OF PARTICIPANTS AND BENEFICIARIES 
BY REQUIRING CONSULTANTS TO ADVISE 
PLAN FIDUCIARIES OF INDIVIDUAL ACCOUNT 
PLANS. 
(a) STUDY.—As soon as practicable after the date of 
the enactment of this Act, the Secretary of Labor shall un-
dertake a study of the costs and benefits to participants and
beneficiaries of requiring independent consultants to advise 
plan fiduciaries in connection with individual account 
plans. In conducting such study, the Secretary shall con-
sider—
(1) the benefits to plan participants and bene-
ficiaries of engaging independent advisers to provide 
investment and other advice regarding the assets of 
the plan to persons who have fiduciary duties with re-
spect to the management or disposition of such assets, 
(2) the extent to which independent advisers are 
currently retained by plan fiduciaries, 
(3) the availability of assistance to fiduciaries 
from appropriate Federal agencies, 
(4) the availability of qualified independent con-
sultants to serve the needs of individual account plan 
fiduciaries in the United States, 
(5) the impact of the additional fiduciary duty 
of an independent advisor on the strict fiduciary obli-
gations of plan fiduciaries, 
(6) the impact of new requirements (consulting 
fees, reporting requirements, and new plan duties to 
prudently identify and contract with qualified inde-
pendent consultants) on the availability of individual 
account plans, and
(7) the impact of a new requirement on the plan 
administration costs per participant for small and 
mid-size employers and the pension plans they spon-
sor. 
(b) REPORT.—Not later than 1 year after the date of 
the enactment of this Act, the Secretary of Labor shall re-
port the results of the study undertaken pursuant to this 
section, together with any recommendations for legislative
changes, to the Committee on Education and the Workforce 
of the House of Representatives and the Committee on 
Health, Education, Labor, and Pensions of the Senate. 
SEC. 107. TREATMENT OF QUALIFIED RETIREMENT PLAN-
NING SERVICES. 
(a) IN GENERAL.—Subsection (m) of section 132 of the 
Internal Revenue Code of 1986 (defining qualified retire-
ment services) is amended by adding at the end the fol-
lowing new paragraph: 
‘‘(4) NO CONSTRUCTIVE RECEIPT.—No amount 
shall be included in the gross income of any employee 
solely because the employee may choose between any 
qualified retirement planning services provided by a 
qualified investment advisor and compensation which 
would otherwise be includible in the gross income of 
such employee. The preceding sentence shall apply to 
highly compensated employees only if the choice de-
scribed in such sentence is available on substantially 
the same terms to each member of the group of em-
ployees normally provided education and information 
regarding the employer’s qualified employer plan.’’. 
(b) CONFORMING AMENDMENTS.—
(1) Section 403(b)(3)(B) of such Code is amend-
ed by inserting ‘‘132(m)(4),’’ after ‘‘132(f)(4),’’. 
(2) Section 414(s)(2) of such Code is amended by 
inserting ‘‘132(m)(4),’’ after ‘‘132(f)(4),’’. 
(3) Section 415(c)(3)(D)(ii) of such Code is 
amended by inserting ‘‘132(m)(4),’’ after ‘‘132(f)(4),’’. 
(c) EFFECTIVE DATE.—The amendment made by this 
section shall apply to taxable years beginning after Decem-
ber 31, 2003. 
SEC. 108. EFFECTIVE DATES AND RELATED RULES. 
(a) IN GENERAL.—Except as otherwise provided in the 
preceding provisions of this title or in subsections (c) and 
(d), the amendments made by this Act shall apply with re-
spect to plan years beginning on or after the general effec-
tive date. 
(b) GENERAL EFFECTIVE DATE.—For purposes of this 
section, the term ‘‘general effective date’’ means the date 
which is 1 year after the date of the enactment of this Act. 
(c) SPECIAL RULE FOR COLLECTIVELY BARGAINED 
PLANS.—In the case of a plan maintained pursuant to 1
or more collective bargaining agreements between employee 
representatives and 1 or more employers ratified on or be-
fore the date of the enactment of this Act, subsection (a) 
shall be applied to benefits pursuant to, and individuals 
covered by, any such agreement by substituting for ‘‘the gen-
eral effective date’’ the date of the commencement of the first 
plan year beginning on or after the earlier of—
(1) the later of—
(A) the date which is 1 year after the gen-
eral effective date, or 
(B) the date on which the last of such collec-
tive bargaining agreements terminates (deter-
mined without regard to any extension thereof 
after the date of the enactment of this Act), or 
(2) the date which is 2 years after the general ef-
fective date. 
(d) AMENDMENTS RELATING
TO INVESTMENT AD-
VICE.—The amendments made by section 105 shall apply 
with respect to advice referred to in section 3(21)(A)(ii) of 
the Employee Retirement Income Security Act of 1974 or 
section 4975(c)(3)(B) of the Internal Revenue Code of 1986 
provided on or after January 1, 2005.
TITLE II—OTHER PROVISIONS 
RELATING TO PENSIONS 
SEC. 201. AMENDMENTS TO RETIREMENT PROTECTION ACT 
OF 1994. 
(a) TRANSITION RULE MADE PERMANENT.—Section 
769(c) of the Retirement Protection Act of 1994 (26 U.S.C. 
412 note) is amended—
(1) in the heading, by striking ‘‘TRANSITION’’; 
and 
(2) in paragraph (1), by striking ‘‘transition’’ 
and by striking ‘‘for any plan year beginning after 
1996 and before 2010’’. 
(b) SPECIAL RULES.—Paragraph (2) of section 769(c) 
of the Retirement Protection Act of 1994 is amended to read 
as follows: 
‘‘(2) SPECIAL
RULES.—The rules described in 
this paragraph are as follows: 
‘‘(A) For purposes of section 412(l)(9)(A) of 
the Internal Revenue Code of 1986 and section 
302(d)(9)(A) of the Employee Retirement Income 
Security Act of 1974, the funded current liability 
percentage for any plan year shall be treated as 
not less than 90 percent. 
‘‘(B) For purposes of section 412(m) of the 
Internal Revenue Code of 1986 and section
302(e) of the Employee Retirement Income Secu-
rity Act of 1974, the funded current liability 
percentage for any plan year shall be treated as 
not less than 100 percent. 
‘‘(C) For purposes of determining unfunded 
vested benefits under section 4006(a)(3)(E)(iii) 
of the Employee Retirement Income Security Act 
of 1974, the mortality table shall be the mor-
tality table used by the plan.’’. 
(c) EFFECTIVE DATE.—The amendments made by this 
section shall apply to plan years beginning after December 
31, 2002. 
SEC. 202. REPORTING SIMPLIFICATION. 
(a) SIMPLIFIED ANNUAL FILING REQUIREMENT FOR 
OWNERS AND THEIR SPOUSES.—
(1) IN GENERAL.—The Secretary of the Treasury 
and the Secretary of Labor shall modify the require-
ments for filing annual returns with respect to one-
participant retirement plans to ensure that such 
plans with assets of $250,000 or less as of the close 
of the plan year need not file a return for that year. 
(2) ONE-PARTICIPANT
RETIREMENT
PLAN
DE-
FINED.—For purposes of this subsection, the term 
‘‘one-participant retirement plan’’ means a retire-
ment plan with respect to which the following require-
ments are met: 
(A) on the first day of the plan year—
(i) the plan covered only one indi-
vidual (or the individual and the individ-
ual’s spouse) and the individual owned 100 
percent of the plan sponsor (whether or not 
incorporated), or 
(ii) the plan covered only one or more 
partners (or partners and their spouses) in 
the plan sponsor; 
(B) the plan meets the minimum coverage 
requirements of section 410(b) of the Internal 
Revenue Code of 1986 without being combined 
with any other plan of the business that covers 
the employees of the business; 
(C) the plan does not provide benefits to 
anyone except the individual (and the individ-
ual’s spouse) or the partners (and their spouses); 
(D) the plan does not cover a business that 
is a member of an affiliated service group, a con-
trolled group of corporations, or a group of busi-
nesses under common control; and 
(E) the plan does not cover a business that 
leases employees.
(3) OTHER DEFINITIONS.—Terms used in para-
graph (2) which are also used in section 414 of the 
Internal Revenue Code of 1986 shall have the respec-
tive meanings given such terms by such section. 
(4) EFFECTIVE
DATE.—The provisions of this 
subsection shall apply to plan years beginning on or 
after January 1, 2003.
(b) SIMPLIFIED ANNUAL FILING REQUIREMENT FOR 
PLANS WITH FEWER THAN 25 EMPLOYEES.—In the case 
of plan years beginning after December 31, 2004, the Sec-
retary of the Treasury and the Secretary of Labor shall pro-
vide for the filing of a simplified annual return for any 
retirement plan which covers less than 25 employees on the 
first day of a plan year and which meets the requirements 
described in subparagraphs (B), (D), and (E) of subsection 
(a)(2). 
SEC. 203. IMPROVEMENT OF EMPLOYEE PLANS COMPLI-
ANCE RESOLUTION SYSTEM. 
The Secretary of the Treasury shall continue to update 
and improve the Employee Plans Compliance Resolution 
System (or any successor program) giving special attention 
to—
(1) increasing the awareness and knowledge of 
small employers concerning the availability and use 
of the program;
(2) taking into account special concerns and cir-
cumstances that small employers face with respect to 
compliance and correction of compliance failures; 
(3) extending the duration of the self-correction 
period under the Self-Correction Program for signifi-
cant compliance failures; 
(4) expanding the availability to correct insig-
nificant compliance failures under the Self-Correction 
Program during audit; and 
(5) assuring that any tax, penalty, or sanction 
that is imposed by reason of a compliance failure is 
not excessive and bears a reasonable relationship to 
the nature, extent, and severity of the failure. 
The Secretary of the Treasury shall have full authority to 
effectuate the foregoing with respect to the Employee Plans 
Compliance Resolution System (or any successor program) 
and any other employee plans correction policies, including 
the authority to waive income, excise, or other taxes to en-
sure that any tax, penalty, or sanction is not excessive and 
bears a reasonable relationship to the nature, extent, and 
severity of the failure. 
SEC. 
204. 
FLEXIBILITY 
IN 
NONDISCRIMINATION, 
COV-
ERAGE, AND LINE OF BUSINESS RULES. 
(a) NONDISCRIMINATION.—
(1) IN GENERAL.—The Secretary of the Treasury 
shall, by regulation, provide that a plan shall be 
deemed to satisfy the requirements of section 
401(a)(4) of the Internal Revenue Code of 1986 if 
such plan satisfies the facts and circumstances test 
under section 401(a)(4) of such Code, as in effect be-
fore January 1, 1994, but only if—
(A) the plan satisfies conditions prescribed 
by the Secretary to appropriately limit the 
availability of such test; and 
(B) the plan is submitted to the Secretary 
for a determination of whether it satisfies such 
test. 
Subparagraph (B) shall only apply to the extent pro-
vided by the Secretary. 
(2) EFFECTIVE DATES.—
(A) REGULATIONS.—The regulation re-
quired by paragraph (1) shall apply to years be-
ginning after December 31, 2004. 
(B) CONDITIONS
OF
AVAILABILITY.—Any 
condition of availability prescribed by the Sec-
retary under paragraph (1)(A) shall not apply 
before the first year beginning not less than 120 
days after the date on which such condition is 
prescribed.
(b) COVERAGE TEST.—
(1) IN GENERAL.—Section 410(b)(1) of the Inter-
nal Revenue Code of 1986 (relating to minimum cov-
erage requirements) is amended by adding at the end 
the following: 
‘‘(D) In the case that the plan fails to meet 
the requirements of subparagraphs (A), (B) and 
(C), the plan—
‘‘(i) satisfies subparagraph (B), as in 
effect immediately before the enactment of 
the Tax Reform Act of 1986, 
‘‘(ii) is submitted to the Secretary for 
a determination of whether it satisfies the 
requirement described in clause (i), and 
‘‘(iii) satisfies conditions prescribed by 
the Secretary by regulation that appro-
priately limit the availability of this sub-
paragraph. 
Clause (ii) shall apply only to the extent pro-
vided by the Secretary.’’. 
(2) EFFECTIVE DATES.—
(A) IN
GENERAL.—The amendment made 
by paragraph (1) shall apply to years beginning 
after December 31, 2004.
(B) CONDITIONS
OF
AVAILABILITY.—Any 
condition of availability prescribed by the Sec-
retary under regulations prescribed by the Sec-
retary under section 410(b)(1)(D) of the Internal 
Revenue Code of 1986 shall not apply before the 
first year beginning not less than 120 days after 
the date on which such condition is prescribed. 
(c) LINE OF BUSINESS RULES.—The Secretary of the 
Treasury shall, on or before December 31, 2004, modify the 
existing regulations issued under section 414(r) of the Inter-
nal Revenue Code of 1986 in order to expand (to the extent 
that the Secretary determines appropriate) the ability of 
a pension plan to demonstrate compliance with the line of 
business requirements based upon the facts and cir-
cumstances surrounding the design and operation of the 
plan, even though the plan is unable to satisfy the mechan-
ical tests currently used to determine compliance. 
SEC. 205. EXTENSION TO ALL GOVERNMENTAL PLANS OF 
MORATORIUM ON APPLICATION OF CERTAIN 
NONDISCRIMINATION RULES APPLICABLE TO 
STATE AND LOCAL PLANS. 
(a) IN GENERAL.—
(1) Subparagraph (G) of section 401(a)(5) of the 
Internal Revenue Code of 1986 and subparagraph 
(H) of section 401(a)(26) of such Code are each
amended by striking ‘‘section 414(d))’’ and all that 
follows and inserting ‘‘section 414(d)).’’. 
(2) Subparagraph (G) of section 401(k)(3) of the 
Internal Revenue Code of 1986 and paragraph (2) of 
section 1505(d) of the Taxpayer Relief Act of 1997 
(26 U.S.C. 401 note) are each amended by striking 
‘‘maintained by a State or local government or polit-
ical subdivision thereof (or agency or instrumentality 
thereof)’’. 
(b) CONFORMING AMENDMENTS.—
(1) The heading for subparagraph (G) of section 
401(a)(5) of such Code is amended to read as follows: 
‘‘GOVERNMENTAL PLANS.—’’. 
(2) The heading for subparagraph (H) of section 
401(a)(26) of such Code is amended to read as fol-
lows: 
‘‘EXCEPTION
FOR
GOVERNMENTAL
PLANS.—’’. 
(3) Subparagraph (G) of section 401(k)(3) of 
such Code is amended by inserting ‘‘GOVERNMENTAL 
PLANS.—’’ after ‘‘(G)’’. 
(c) EFFECTIVE DATE.—The amendments made by this 
section shall apply to years beginning after December 31, 
2003.
SEC. 206. NOTICE AND CONSENT PERIOD REGARDING DIS-
TRIBUTIONS. 
(a) EXPANSION OF PERIOD.—
(1) 
AMENDMENT
OF
INTERNAL
REVENUE 
CODE.—
(A) IN
GENERAL.—Subparagraph (A) of 
section 417(a)(6) of the Internal Revenue Code of
1986 is amended by striking ‘‘90-day’’ and in-
serting ‘‘180-day’’. 
(B) MODIFICATION OF REGULATIONS.—The 
Secretary of the Treasury shall modify the regu-
lations under sections 402(f), 411(a)(11), and 
417 of the Internal Revenue Code of 1986 to sub-
stitute ‘‘180 days’’ for ‘‘90 days’’ each place it 
appears 
in 
Treasury 
Regulations 
sections 
1.402(f)–1, 1.411(a)–11(c), and 1.417(e)–1(b). 
(2) AMENDMENT OF ERISA.—
(A) IN GENERAL.—Section 205(c)(7)(A) of 
the Employee Retirement Income Security Act of 
1974 (29 U.S.C. 1055(c)(7)(A)) is amended by 
striking ‘‘90-day’’ and inserting ‘‘180-day’’. 
(B) MODIFICATION OF REGULATIONS.—The 
Secretary of the Treasury shall modify the regu-
lations under part 2 of subtitle B of title I of the 
Employee Retirement Income Security Act of 
1974 to the extent that they relate to sections
203(e) and 205 of such Act to substitute ‘‘180 
days’’ for ‘‘90 days’’ each place it appears. 
(3) EFFECTIVE DATE.—The amendments made 
by paragraphs (1)(A) and (2)(A) and the modifica-
tions required by paragraphs (1)(B) and (2)(B) shall 
apply to years beginning after December 31, 2003. 
(b) CONSENT REGULATION INAPPLICABLE TO CERTAIN 
DISTRIBUTIONS.—
(1) IN GENERAL.—The Secretary of the Treasury 
shall modify the regulations under section 411(a)(11) 
of the Internal Revenue Code of 1986 and under sec-
tion 205 of the Employee Retirement Income Security 
Act of 1974 to provide that the description of a par-
ticipant’s right, if any, to defer receipt of a distribu-
tion shall also describe the consequences of failing to 
defer such receipt. 
(2) EFFECTIVE DATE.—
(A) IN
GENERAL.—The modifications re-
quired by paragraph (1) shall apply to years be-
ginning after December 31, 2003. 
(B) REASONABLE NOTICE.—In the case of 
any description of such consequences made before 
the date that is 90 days after the date on which 
the Secretary of the Treasury issues a safe har-
bor description under paragraph (1), a plan
shall not be treated as failing to satisfy the re-
quirements of section 411(a)(11) of such Code or 
section 205 of such Act by reason of the failure 
to provide the information required by the modi-
fications made under paragraph (1) if the Ad-
ministrator of such plan makes a reasonable at-
tempt to comply with such requirements. 
SEC. 207. ANNUAL REPORT DISSEMINATION. 
(a) REPORT
AVAILABLE
THROUGH
ELECTRONIC 
MEANS.—Section 104(b)(3) of the Employee Retirement In-
come Security Act of 1974 (29 U.S.C. 1024(b)(3)) is amend-
ed by adding at the end the following new sentence: ‘‘The 
requirement to furnish information under the previous sen-
tence with respect to an employee pension benefit plan shall 
be satisfied if the administrator makes such information 
reasonably available through electronic means or other new 
technology.’’. 
(b) EFFECTIVE DATE.—The amendment made by this 
section shall apply to reports for years beginning after De-
cember 31, 2003. 
SEC. 208. TECHNICAL CORRECTIONS TO SAVER ACT. 
Section 517 of the Employee Retirement Income Secu-
rity Act of 1974 (29 U.S.C. 1147) is amended—
(1) in subsection (a), by striking ‘‘2001 and 
2005 on or after September 1 of each year involved’’ 
and inserting ‘‘2006 and 2010’’; 
(2) in subsection (e)(2)—
(A) by striking ‘‘Committee on Labor and 
Human Resources’’ in subparagraph (D) and in-
serting 
‘‘Committee 
on 
Health, 
Education, 
Labor, and Pensions’’; 
(B) by striking subparagraph (F) and in-
serting the following: 
‘‘(F) the Chairman and Ranking Member of 
the Subcommittee on Labor, Health and Human 
Services, and Education of the Committee on 
Appropriations of the House of Representatives 
and the Chairman and Ranking Member of the 
Subcommittee on Labor, Health and Human 
Services, and Education of the Committee on 
Appropriations of the Senate;’’; 
(C) by redesignating subparagraph (G) as 
subparagraph (J); and 
(D) by inserting after subparagraph (F) the 
following new subparagraphs: 
‘‘(G) the Chairman and Ranking Member of 
the Committee on Finance of the Senate;
‘‘(H) the Chairman and Ranking Member 
of the Committee on Ways and Means of the 
House of Representatives; 
‘‘(I) the Chairman and Ranking Member of 
the Subcommittee on Employer-Employee Rela-
tions of the Committee on Education and the 
Workforce of the House of Representatives; and’’; 
(3) in subsection (e)(3)(B), by striking ‘‘January 
31, 1998’’ and inserting ‘‘2 months before the con-
vening of each summit’’; 
(4) in subsection (f)(1)(C), by inserting ‘‘, no 
later than 60 days prior to the date of the commence-
ment of the National Summit,’’ after ‘‘comment’’; 
(5) in subsection (i)—
(A) by striking ‘‘for fiscal years beginning 
on or after October 1, 1997,’’; and 
(B) by adding at the end the following new 
paragraph: 
‘‘(3) RECEPTION AND REPRESENTATION AUTHOR-
ITY.—The Secretary is hereby granted reception and 
representation authority limited specifically to the 
events at the National Summit. The Secretary shall 
use any private contributions accepted in connection 
with the National Summit prior to using funds ap-
propriated for purposes of the National Summit pur-
suant to this paragraph.’’; and 
(6) in subsection (k)—
(A) by striking ‘‘shall enter into a contract 
on a sole-source basis’’ and inserting ‘‘may enter 
into a contract on a sole-source basis’’; and 
(B) by striking ‘‘in fiscal year 1998’’. 
SEC. 209. MISSING PARTICIPANTS AND BENEFICIARIES. 
(a) IN GENERAL.—Section 4050 of the Employee Re-
tirement Income Security Act of 1974 (29 U.S.C. 1350) is 
amended by redesignating subsection (c) as subsection (e) 
and by inserting after subsection (b) the following new sub-
sections: 
‘‘(c) MULTIEMPLOYER PLANS.—The corporation shall 
prescribe rules similar to the rules in subsection (a) for mul-
tiemployer plans covered by this title that terminate under 
section 4041A. 
‘‘(d) PLANS NOT OTHERWISE SUBJECT TO TITLE.—
‘‘(1) TRANSFER TO CORPORATION.—The plan ad-
ministrator of a plan described in paragraph (4) may 
elect to transfer the benefits of a missing participant 
or beneficiary to the corporation upon termination of 
the plan. 
‘‘(2) INFORMATION TO THE CORPORATION.—To 
the extent provided in regulations, the plan adminis-