certain pension funding rules added by the Pension Pro-
tection Act of 2006. 
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 
‘‘401(k) Fair Disclosure and Pension Security Act of 
2009’’. 
(b) TABLE OF CONTENTS.—The table of contents for 
this Act is as follows: 
Sec. 1. Short title and table of contents. 
TITLE I—401(k) FAIR DISCLOSURE FOR RETIREMENT 
Sec. 101. Special reporting and disclosure rules for individual account plans. 
Sec. 102. Minimum investment option requirement for individual account plans. 
Sec. 103. Enforcement coordination and review by the Department of Labor. 
TITLE II—PROHIBITION OF CONFLICTED INVESTMENT ADVICE 
Sec. 201. Findings. 
Sec. 202. Independent investment advisers for individual account plans. 
Sec. 203. Expansion of outreach to promote retirement income savings to in-
clude promotion of education on financial literacy with respect 
to investment for retirement. 
TITLE III—TRANSITIONAL FUNDING RELIEF FOR DEFINED 
BENEFIT PLANS 
Sec. 301. Election to use yield curve. 
Sec. 302. Effective date of regulations. 
Sec. 303. Clarification of treatment of expenses. 
Sec. 304. Information reporting. 
Sec. 305. Five-year extension of automatic amortization extension period for 
multiemployer plans. 
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TITLE I—401(k) FAIR 
DISCLOSURE FOR RETIREMENT 
SEC. 101. SPECIAL REPORTING AND DISCLOSURE RULES 
FOR INDIVIDUAL ACCOUNT PLANS. 
(a) ADDITIONAL
REPORTING
AND
DISCLOSURE 
RULES.—Part 1 of subtitle B of title I of the Employee 
Retirement Income Security Act of 1974 is amended— 
(1) by redesignating section 111 (29 U.S.C. 
1031) as section 112; and 
(2) by inserting after section 110 (29 U.S.C. 
1030) the following new section: 
‘‘SEC. 111. SPECIAL REPORTING AND DISCLOSURE RULES 
FOR INDIVIDUAL ACCOUNT PLANS. 
‘‘(a) DISCLOSURE TO EMPLOYERS SPONSORING INDI-
VIDUAL ACCOUNT PLANS REGARDING SERVICES NEC-
ESSARY
FOR
ESTABLISHMENT
OR
OPERATION
OF 
PLANS.— 
‘‘(1) SERVICE DISCLOSURE STATEMENT.—The 
plan administrator of an individual account plan (or 
any other plan official with contracting authority 
under the terms of the plan) may not enter into a 
contract or arrangement for services to the plan (in-
cluding, for purposes of this section, the offering of 
any investment option to the plan) unless such plan 
administrator or other official has received, reason-
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ably in advance of entering into the contract or ar-
rangement, a single written statement from the serv-
ice provider which— 
‘‘(A) specifies such services for the plan 
that will be provided in connection with the con-
tract or arrangement, and 
‘‘(B) provides the expected total annual 
charges for such services for the plan that will 
be provided in connection with the contract or 
arrangement, including a reasonable allocation 
of such total annual charges among all relevant 
component charges specified in paragraph (2) 
(regardless of how the charges are actually as-
sessed). 
The description of the services and specification of 
the charges for the services shall be displayed promi-
nently in the written statement and shall be pre-
sented in a format which is understandable to the 
typical plan administrator. 
‘‘(2) MINIMUM ALLOCATION REQUIREMENTS.— 
The allocation required under paragraph (1)(B) in 
connection with the services provided under each 
contract or arrangement shall specify component 
charges (to the extent such services for the plan are 
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provided under the contract or arrangement) as fol-
lows: 
‘‘(A) charges for administration and rec-
ordkeeping, 
‘‘(B) transaction based charges, 
‘‘(C) charges for investment management, 
and 
‘‘(D) all such charges not described in sub-
paragraph (A), (B), or (C). 
The Secretary may by regulation provide for the ap-
propriate allocation of component charges among the 
categories of charges provided in subparagraphs (A), 
(B), (C), and (D). 
‘‘(3) PRESENTATION OF CHARGES.—The total 
charges described in paragraph (2)(A) and the total 
charges described in paragraph (2)(C) shall each be 
presented in the written statement as an aggregate 
total dollar amount, and, in addition, each of such 
total charges may also be presented as a percentage 
of assets. The charges described in paragraph (2)(B) 
shall be itemized separately as dollar amounts or as 
percentages of the applicable base amounts. 
‘‘(4) ESTIMATIONS.—For purposes of providing 
the statement required under this subsection in con-
nection with any service, the service provider may 
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provide a reasonable and representative estimate of 
the charges required to be specified under paragraph 
(1)(B) and shall indicate any such estimate as being 
such an estimate. Any such estimate shall be based 
on reasonable assumptions specified in the statement 
(which shall include the previous year’s experience of 
the plan or, in the case of a new plan, a reasonable 
estimate, taking into account the plan’s participants 
and beneficiaries). 
‘‘(5) DISCLOSURE
OF
FINANCIAL
RELATION-
SHIPS.— 
‘‘(A) IN
GENERAL.—The statement re-
quired under paragraph (1) shall include a writ-
ten disclosure of— 
‘‘(i) any payment to be provided (or 
the amount representing the value of any 
services to be provided) to the service pro-
vider (or any affiliate thereof) from any 
entity other than the plan or the accounts 
of participants or beneficiaries pursuant 
to, or in connection with, the contract or 
arrangement described in paragraph (1) 
and the amount and type of any payment 
to be made or credit to be received for 
such services (irrespective of whether the 
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service provider (or affiliate thereof) or 
other person providing such services is af-
filiated or unaffiliated with the plan, the 
plan sponsor, the plan administrator, or 
any other plan official), and 
‘‘(ii) such other similar arrangements 
benefitting the service provider (or any af-
filiate thereof) as may be specified by the 
Secretary. 
In any case in which the contract or arrange-
ment described in paragraph (1) provides for 
the payments described in clause (i) in terms of 
a formula, the requirements of such clause may 
be met by specifying the formula to be used in 
connection with such payments and describing 
the application of such formula. 
‘‘(B) INCLUSIONS.— 
‘‘(i) IN
GENERAL.—Disclosures de-
scribed under subparagraph (A)(ii) shall 
include the extent to which the service pro-
vider (or any affiliate thereof) may benefit 
from the offering of its own proprietary in-
vestment products or those of third par-
ties, including (but not limited to) cross- 
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selling of affiliated products or services to 
the plan sponsor or participants. 
‘‘(ii) 
APPLICABLE
PROHIBITED 
TRANSACTION
EXEMPTION.—Disclosures 
under this paragraph may include a de-
scription of any applicable prohibited 
transaction exemption under section 408 
related to the services described in the 
statement required under paragraph (1). 
‘‘(6) DISCLOSURE OF IMPACT OF SHARE CLASS-
ES.—The statement required under paragraph (1) 
shall, to the extent applicable, disclose that the share 
prices of certain mutual fund investments that are 
available to the plan may be different from the share 
prices outside of the plan due to the existence of dif-
ferent share classes and provide the basis for these 
differences. 
‘‘(7) DISCLOSURE OF CERTAIN ARRANGEMENTS 
IN CONNECTION WITH FREE OR DISCOUNTED SERV-
ICES
OR
REIMBURSEMENTS
BY
SERVICE
PRO-
VIDERS.—In any case in which services are provided 
to the plan, or to the plan sponsor in connection 
with the plan, by any service provider without ex-
plicit charge or for charges set at a discounted rate 
or subject to rebate, the statement required under 
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paragraph (1) shall specify the manner in which, the 
extent to which, and the amount by which consider-
ation is otherwise obtained by the service provider 
(or any affiliate thereof), the plan, or the plan spon-
sor for such services, directly or indirectly, by means 
of any charges against the plan. 
‘‘(8) REVIEW BY THE SECRETARY.—The Sec-
retary shall, from time to time as determined appro-
priate by the Secretary, review the accuracy and suf-
ficiency of statements provided pursuant to this sub-
section. 
‘‘(9) UPDATING.—Each service provider shall 
provide to the plan administrator an updated written 
statement described in paragraph (1) describing any 
material change in the information included in the 
statement provided pursuant to paragraph (1) as 
soon as is reasonable after the occurrence of the 
change is known. Such an updated written state-
ment, or, in the case of a plan year in which no ma-
terial change in the information included in the 
statement provided pursuant to paragraph (1) has 
occurred, a written statement setting forth such 
fact, shall be provided by the service provider not 
less often than annually. 
‘‘(10) LIMITATIONS.— 
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‘‘(A) DOLLAR LIMITATION.— 
‘‘(i) IN GENERAL.—The requirements 
of this subsection shall apply with respect 
to any contract or arrangement for services 
provided during any plan year only if the 
total charged for such services under such 
contract or arrangement is reasonably ex-
pected to equal or exceed $5,000. 
‘‘(ii) ADJUSTMENTS
BY
THE
SEC-
RETARY.—The Secretary may be regula-
tion adjust the dollar amount specified in 
this subparagraph to a lesser amount for 
small plans and to a greater amount for 
other plans and provide for appropriate an-
nual 
adjustments 
in 
such 
adjusted 
amounts. 
‘‘(B) GENERAL
APPLICABILITY
OF
RE-
QUIREMENTS WITH RESPECT TO SERVICES.— 
Nothing in this subsection shall be construed to 
require any service provider to provide any serv-
ice with respect to any particular plan sponsor. 
‘‘(11) SATISFACTION OF FIDUCIARY RULES.— 
Nothing in the preceding provisions of this sub-
section affects the obligations of fiduciaries under 
part 4 of this subtitle. 
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‘‘(b) DISCLOSURES TO PARTICIPANTS AND BENE-
FICIARIES.— 
‘‘(1) ADVANCE NOTICE OF AVAILABLE INVEST-
MENT OPTIONS.—The plan administrator of an indi-
vidual account plan that permits participants or 
beneficiaries to direct the investment of assets in 
their individual accounts shall provide to the partici-
pant or beneficiary notice of the investment options 
available for election under the plan before a reason-
able period prior to— 
‘‘(A) the earliest date provided for under 
the plan for the participant’s initial investment 
of any contribution made on behalf of such par-
ticipant, and 
‘‘(B) the effective date of any material 
change in investment options. 
In the case of a plan that provides for immediate eli-
gibility or that contains an automatic contribution 
arrangement (as defined in subparagraphs (A) and 
(B) of section 514(e)(2)), the notice required under 
subparagraph (A) may be provided within any rea-
sonable period prior to such initial investment. With 
respect to any notice required under this paragraph, 
the Secretary shall prescribe regulations creating 
specific requirements for periods of advance notice 
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to be treated as reasonable under this paragraph (of 
not less than 10 days) in circumstances similar to 
those described in section 101(i)(2)(C), and such no-
tice may be combined with any similar notice that 
may be required under section 404(c)(5) or under 
this section. 
‘‘(2) INFORMATION
INCLUDED
IN
NOTICE.— 
The notice required under paragraph (1) shall— 
‘‘(A) include a prominent statement, in 
language presented in a manner which is easily 
understandable by the typical participant, indi-
cating which components of the charges (both 
direct and indirect) for each investment option 
are payable by the participant or beneficiary 
and how such components are to be paid, 
‘‘(B) set forth, with respect to each avail-
able investment option— 
‘‘(i) the name of the option, 
‘‘(ii) information effectively describing 
the investment objectives of the option 
(such as a description of a broadly recog-
nized asset class), 
‘‘(iii) the risk level associated with the 
option, 
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‘‘(iv) whether the option is diversified 
among various classes of assets so as to 
minimize the risk of large losses or should 
be combined with other options so as to 
obtain such diversification, 
‘‘(v) whether the investment option is 
actively managed or passively managed in 
relation to an index and the difference be-
tween active management and passive 
management, 
‘‘(vi) where, and the manner in which, 
additional 
plan-specific, 
option-specific, 
and generally available investment infor-
mation regarding the option may be ob-
tained, and 
‘‘(vii) a statement explaining that in-
vestment options should not be evaluated 
solely on the basis of the charges for each 
option but should also be based on careful 
consideration of other key factors, includ-
ing the risk level of the option, the invest-
ment objectives of the option, the principal 
investment strategies of the option, and 
historical returns of the option, and 
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‘‘(C) include a plan fee comparison chart, 
relating to the charges described in paragraph 
(3) in connection with all investment options 
available under the plan, as provided in para-
graph (3). 
‘‘(3) PLAN FEE COMPARISON CHART.— 
‘‘(A) IN GENERAL.— 
‘‘(i) IN
GENERAL.—The notice pro-
vided under this subsection shall include a 
plan fee comparison chart consisting of a 
comparison of actual service and invest-
ment charges (including, for purposes of 
this clause, charges for the offering of an 
investment option) that will or could be as-
sessed against the account of the partici-
pant or beneficiary with respect to the plan 
year. The plan fee comparison chart shall 
be presented in a manner which is easily 
understood by the typical participant and 
include such information as the Secretary 
determines necessary to permit partici-
pants and beneficiaries to assess the serv-
ices for which charges will or could be as-
sessed against the account. 
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‘‘(ii) FORM.—For purposes of this 
paragraph, the potential service charges 
shall be provided in the form of a dollar 
amount or as a formula (such as a per-
centage of assets), as appropriate. The 
form of the potential service charges shall 
be presented in a manner which is easily 
understandable by the typical participant, 
including examples that demonstrate how 
the charges will be assessed against the ac-
count of the participant or beneficiary. 
‘‘(B) CATEGORIZATION OF CHARGES.—The 
plan fee comparison chart shall provide infor-
mation in relation to the following categories of 
charges that will or could be assessed against 
the account of the participant or beneficiary: 
‘‘(i) ASSET-BASED CHARGES SPECIFIC 
TO INVESTMENT.—Charges that vary de-
pending on the investment options selected 
by the participant or beneficiary, including 
expense 
ratios 
and 
investment-specific 
asset-based charges. The information relat-
ing to such charges shall include a state-
ment noting any charges for 1 or more in-
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vestment options which pay for services 
other than investment management. 
‘‘(ii) ASSET-BASED
CHARGES
NOT 
SPECIFIC TO INVESTMENT.—Charges that 
are assessed as a percentage of the total 
assets in the account of the participant or 
beneficiary, regardless of the investment 
option selected. 
‘‘(iii) ADMINISTRATIVE
AND
TRANS-
ACTION-BASED
CHARGES.—Administration 
and transaction-based charges, including 
fees charged to participants to cover plan 
administration, compliance, and record-
keeping costs, plan loan origination fees, 
possible redemption fees, and possible sur-
render charges, that are not assessed as a 
percentage of the total assets in the ac-
count and are either automatically de-
ducted each year or result from certain 
transactions engaged in by the participant 
or beneficiary. 
‘‘(iv) OTHER
CHARGES.—Any other 
charges which may be deducted from par-
ticipants’ or beneficiaries’ accounts and 
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which are not described in clauses (i), (ii), 
and (iii). 
‘‘(C) DESCRIPTION
OF
PURPOSE
FOR 
CHARGES.—The notice shall indicate the extent 
to which each charge is for investment manage-
ment, transactions, plan administration and 
recordkeeping, or other identified services. 
‘‘(D) FEES AND HISTORICAL RETURNS.— 
In connection with each investment option listed 
in the plan fee comparison chart, the chart 
shall specify (as amounts or percentages) the 
fees assessed in connection with such option 
and the historical returns, net of fees and ex-
penses, together with language indicating that 
past performance does not guarantee future re-
sults. The historical returns shall be specified 
for the previous year, 5 years, and 10 years (or 
for the period since inception, if shorter). 
‘‘(4) MODEL
NOTICES.—The Secretary shall 
prescribe one or more model notices that may be 
used for purposes of satisfying the requirements of 
this subsection, including model plan fee comparison 
charts. 
‘‘(5) ESTIMATIONS.—For purposes of providing 
the notice required under this subsection, the plan 
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administrator may provide a reasonable and rep-
resentative estimate for any charges or percentages 
disclosed under paragraph (2) or (3) and shall indi-
cate any such estimate as being such an estimate. 
Any such estimate shall be based on reasonable as-
sumptions stated in the notice (such as the previous 
year’s experience or, in the case of a new plan, a 
reasonable estimate, taking into account the plan’s 
participants and beneficiaries). 
‘‘(c) ELECTRONIC MEDIA.—Any disclosure required 
under this section may be provided through an electronic 
medium under rules prescribed by the Secretary. Such 
rules shall be similar to those applicable under the Inter-
nal Revenue Code of 1986 with respect to notices to par-
ticipants in pension plans. The Secretary may modify such 
rules from time to time as appropriate to take into account 
new developments, including new forms of electronic 
media, and to fairly take into consideration the interests 
of plan sponsors, service providers, and participants. The 
rules prescribed by the Secretary pursuant to this sub-
section shall provide for a method for the typical partici-
pant or beneficiary to obtain without undue burden any 
such disclosure in writing on paper in lieu of receipt 
through an electronic medium. 
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‘‘(d) REGULATIONS REGARDING CERTAIN PROD-
UCTS.—The Secretary may by regulation identify certain 
types of investment options, such as an option that pro-
vides a guaranteed rate of return and that does not iden-
tify specific fees, and prescribe alternative disclosures of 
cost and performance measures that correspond to the 
particular circumstances of such options. 
‘‘(e) DEFINITIONS.—For purposes of this section— 
‘‘(1) CHARGE.—The term ‘charge’ means, in 
connection with any service provided to a plan or 
any financial product provided to the plan in which 
plan assets are to be invested, any fee, credit, or 
other compensation charged or paid for such service 
or product, including money and any other thing of 
monetary value to be received by the provider of the 
service or product, or its affiliate, in connection with 
the service or product. 
‘‘(2) SERVICE.—The term ‘service’ means, in 
connection with a plan, a service provided directly or 
indirectly to, or with respect to, the plan or a service 
provided directly or indirectly in connection with a 
financial product in which plan assets are to be in-
vested. 
‘‘(3) CONTRACT OR ARRANGEMENT.—The term 
‘contract or arrangement’ means, in connection with 
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any 2 or more parties, any contract or arrangement 
entered into between or among such parties, and any 
extension or renewal thereof. 
‘‘(4) SERVICE PROVIDER.—The terms ‘service 
provider’ and ‘provider’ mean, in connection with a 
service, a person directly or indirectly providing such 
service. 
‘‘(5) REGULATIONS.—The Secretary shall pro-
vide by regulation such definitions of other terms 
used in this section as the Secretary determines ap-
propriate.’’. 
(b) QUARTERLY BENEFIT STATEMENTS.—Section 
105 of such Act (29 U.S.C. 1025) is amended— 
(1) in subsection (a)(2)— 
(A) by redesignating subparagraph (C) as 
subparagraph (H); 
(B) in subparagraph (B)(ii)— 
(i) in subclause (II), by striking ‘‘di-
versified, and’’ and inserting ‘‘diversified,’’; 
(ii) in subclause (III), by striking the 
period and inserting ‘‘, and’’; and 
(iii) by adding after subclause (III) 
the following new subclause: 
‘‘(IV) with respect to the portion of a 
participant’s account for which the partici-
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pant has the right to direct the investment 
of assets, the information described in sub-
paragraph (C).’’; and 
(C) by inserting after subparagraph (B) 
the following new subparagraphs: 
‘‘(C) PERIODIC
ACCOUNT
INFORMATION 
FOR PARTICIPANTS AND BENEFICIARIES.—For 
purposes of subparagraph (B)(ii)(IV), the infor-
mation described in this subparagraph consists 
of the following, indicating the portion of each 
amount described in clauses (i) though (vii) at-
tributable to each investment option elected in 
connection with the participant’s account: 
‘‘(i) the starting balance of the par-
ticipant’s account, 
‘‘(ii) contributions made during the 
quarter, itemizing separately totals for em-
ployer and totals for employee contribu-
tions, 
‘‘(iii) investment earnings or losses on 
the account balance during the quarter (if 
any), 
‘‘(iv) actual or estimated charges 
(within the meaning of section 111(e)(1)) 
which reduce the account during the quar-
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ter, expressed in dollars or, if estimated, 
such estimated dollar charges as are de-
rived from an expense ratio (which may be 
expressed as a specific date estimate based 
on reasonable assumptions stated in the 
disclosure (such as the previous year’s ex-
pense ratio)), 
‘‘(v) any other direct charges to the 
participant or beneficiary in connection 
with the participant’s account, 
‘‘(vi) the ending balance of the ac-
count, 
‘‘(vii) the participant’s asset allocation 
to each investment option, expressed as an 
amount and as a percentage, and 
‘‘(viii) how to obtain the most recently 
updated version of the plan fee comparison 
chart prepared for purposes of section 
111(b)(3). 
‘‘(D) OTHER INFORMATION.—The plan ad-
ministrator may include in the quarterly pen-
sion benefit statement information relating to 
the historical return and risk of each invest-
ment option and the estimated amount that the 
participant needs to contribute each month or 
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wwoods2 on PRODPC68 with BILLS
year so as to retire at retirement age (as de-
fined in section 216(l) of the Social Security 
Act). 
‘‘(E) 
ESTIMATIONS.—For 
purposes 
of 
making the disclosure of actual charges or per-
centages as required under this paragraph, the 
plan administrator may provide a reasonable 
and representative estimate of such charges or 
percentages and shall indicate any such esti-
mate as being such an estimate. Any such esti-
mate shall be based on reasonable assumptions 
included in the statement (such as the previous 
year’s experience). 
‘‘(F) MODEL
STATEMENTS.—The Sec-
retary shall prescribe one or more model pen-
sion benefit statements that may be used for 
purposes of satisfying the requirements of sub-
paragraphs (B)(ii) and (C). 
‘‘(G) ANNUAL
COMPLIANCE
FOR
SMALL 
PLANS AND WITH RESPECT TO CERTAIN INFOR-
MATION.—In the case of a plan providing for 
investment 
as 
described 
in 
paragraph 
(1)(A)(i)— 
‘‘(i) if the plan has 100 or fewer par-
ticipants and beneficiaries, the plan may 
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provide the pension benefit statement 
under paragraph (1) on an annual rather 
than a quarterly basis, and 
‘‘(ii) the plan may comply with the re-
quirements of subparagraph (B)(ii)(IV) on 
an annual rather than a quarterly basis.’’; 
and 
(2) by adding at the end the following new sub-
sections: 
‘‘(d) ASSISTANCE TO SMALL EMPLOYERS.—The Sec-
retary shall make available to employers with 100 or fewer 
employees— 
‘‘(1) educational and compliance materials de-
signed to assist such employers in selecting and 
monitoring service providers for individual account 
plans which permit a participant or beneficiary to 
exercise control over the assets in the account of the 
participant or beneficiary, investment options under 
such plans, and charges relating to such options, 
and 
‘‘(2) services designed to assist such employers 
in finding and understanding affordable investment 
options for such plans and in comparing the invest-
ment performance of, and charges for, such options 
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on an ongoing basis against appropriate benchmarks 
or other appropriate measures. 
‘‘(e) ASSISTANCE TO PLAN SPONSORS AND PLAN 
PARTICIPANTS AND BENEFICIARIES.—The Secretary shall 
provide assistance to plan sponsors of individual account 
plans and participants and beneficiaries under such plans 
with any questions or problems regarding compliance with 
the requirements of this section. 
‘‘(f) ELECTRONIC MEDIA.—Any disclosure required 
under this section may be provided through an electronic 
medium under rules prescribed by the Secretary. Such 
rules shall be similar to those applicable under the Inter-
nal Revenue Code of 1986 with respect to notices to par-
ticipants in pension plans. The Secretary may modify such 
rules from time to time as appropriate to take into account 
new developments, including new forms of electronic 
media, and to fairly take into consideration the interests 
of plan sponsors, service providers, and participants. The 
rules prescribed by the Secretary pursuant to this sub-
section shall provide for a method for the typical partici-
pant or beneficiary to obtain without undue burden any 
such disclosure in writing on paper in lieu of receipt 
through an electronic medium. 
‘‘(g) DEFINITIONS.—For purposes of this section— 
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‘‘(1) CHARGE.—The term ‘charge’ means, in 
connection with any service provided to a plan or 
any financial product provided to the plan in which 
plan assets are to be invested, any fee, credit, or 
other compensation charged or paid for such service 
or product, including money and any other thing of 
monetary value to be received by the provider of the 
service or product, or its affiliate, in connection with 
the service or product. 
‘‘(2) SERVICE PROVIDER.—The terms ‘service 
provider’ and ‘provider’ mean, in connection with a 
service (as defined in section 111(e)(2)), a person di-
rectly or indirectly providing such service. 
‘‘(3) REGULATIONS.—The Secretary shall pro-
vide by regulation such definitions of other terms 
used in this section as the Secretary determines ap-
propriate.’’. 
(c) ENFORCEMENT.—Section 502 of such Act (29 
U.S.C. 1132) is amended— 
(1) in subsection (a)(6), by striking ‘‘under 
paragraph (2)’’ and all that follows through ‘‘sub-
section (c)’’ and inserting ‘‘under paragraph (2), 
(4), (5), (6), (7), (8), (9), (10), or (11) of subsection 
(c)’’; and 
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(2) in subsection (c), by redesignating the sec-
ond paragraph (10) as paragraph (12), and by in-
serting after the first paragraph (10) the following 
new paragraph: 
‘‘(11)(A) In the case of any violation of section 
111(a) by a service provider (as defined in section 
111(e)(4)), the service provider may be assessed by the 
Secretary a civil penalty of up to $1,000 a day with re-
spect to each such violation from the date of the initial 
violation until the date on which such violation is cor-
rected, subject to a total maximum penalty of 10 percent 
of the amount involved, as determined by the Secretary. 
‘‘(B) Any plan administrator with respect to a plan 
who fails or refuses to provide a statement to participants 
and 
beneficiaries 
in 
accordance 
with 
section 
105(a)(2)(B)(ii) or 111(b) may be assessed by the Sec-
retary a civil penalty of up to $100 a day from the date 
of the failure or refusal to the date on which such state-
ment or notice is so provided. 
‘‘(C) For purposes of this paragraph, each violation 
with respect to any single participant, beneficiary, or plan 
administrator shall be treated as a separate violation.’’. 
(d) CONFORMING AMENDMENT.—The table of con-
tents in section 1 of such Act, as amended by section 2, 
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is amended by striking the item relating to section 111 
and inserting the following new items: 
‘‘Sec. 111. Special reporting and disclosure rules for individual account plans. 
‘‘Sec. 112. Repeal and effective date.’’. 
(e) EFFECTIVE DATES.— 
(1) Section 111(a) of the Employee Retirement 
Income Security Act of 1974 (as added by sub-
section (a) of this section) shall apply with respect 
to contracts or arrangements for services entered 
into after one year after the date of the enactment 
of this Act. 
(2) Section 111(b) of such Act (as added by 
subsection (a) of this section) shall apply with re-
spect to plan years beginning after one year after 
the date of the enactment of this Act. 
(3) The amendments made by subsection (b) of 
this section shall apply with respect to pension ben-
efit statements for calendar quarters beginning after 
one year after the date of the enactment of this Act. 
(4) The Secretary shall issue final regulations 
under the amendments made by this section not 
later than 270 days after the date of the enactment 
of this Act. Any act or practice in advance of the 
issuance of final regulations under the amendments 
made by this section which is in good faith compli-
ance with the requirements of such amendments 
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shall be treated as in compliance with any such final 
regulations. 
SEC. 102. MINIMUM INVESTMENT OPTION REQUIREMENT 
FOR INDIVIDUAL ACCOUNT PLANS. 
(a) IN GENERAL.—Section 404(c) of the Employee 
Retirement Income Security Act of 1974 (29 U.S.C. 
1104(c)) is amended by adding at the end the following 
new paragraph: 
‘‘(6) MINIMUM INVESTMENT OPTION REQUIRE-
MENT
FOR
INDIVIDUAL
ACCOUNT
PLANS.—Para-
graph (1)(A)(ii) shall not apply in connection with 
any individual account plan which permits a partici-
pant or beneficiary to exercise control over the as-
sets in the account of the participant or beneficiary 
unless the plan includes at least one investment op-
tion— 
‘‘(A) which is a passively managed invest-
ment with a portfolio of securities that is de-
signed to be representative of the United States 
investable equity market (including representa-
tion of small, mid, and large cap stocks) or the 
United States investment grade bond market 
(including Treasury, agency, non-agency, and 
corporate issues), or a combination thereof, and 
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‘‘(B) which is described in the terms of the 
plan as offered without any endorsement of the 
Government or the plan sponsor. 
An investment shall not fail to satisfy the require-
ments of subparagraph (A) in connection with either 
market described in subparagraph (A) solely by rea-
son of a failure to invest in all or substantially all 
equities or bonds (as applicable) in such market, if 
the methodology used to select the equities or bonds 
is designed to approximate in a reasonable manner 
the broad experience of such market.’’. 
(b) 
CONFORMING
AMENDMENT.—Section 
404(c)(1)(A)(ii) of such Act (29 U.S.C. 1104(c)(1)(A)(ii)) 
is amended by inserting ‘‘except as provided in section 
404(c)(6) and’’ after ‘‘exercise of control,’’. 
(c) EFFECTIVE DATES.— 
(1) The amendments made by this section shall 
apply with respect to plan years beginning after one 
year after the date of the enactment of this Act. 
(2) The Secretary shall issue final regulations 
under the amendments made by this section not 
later than 270 days after the date of the enactment 
of this Act. Any act or practice in advance of the 
issuance of final regulations under the amendments 
made by this section which is in good faith compli-
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ance with the requirements of such amendments 
shall be treated as in compliance with any such final 
regulations. 
SEC. 103. ENFORCEMENT COORDINATION AND REVIEW BY 
THE DEPARTMENT OF LABOR. 
(a) IN GENERAL.—Section 502 of the Employee Re-
tirement Income Security Act of 1974 (29 U.S.C. 1132) 
is amended by adding at the end the following new sub-
section: 
‘‘(n) ENFORCEMENT COORDINATION
OF CERTAIN 
DISCLOSURE REQUIREMENTS AND REVIEW BY THE DE-
PARTMENT OF LABOR.— 
‘‘(1) IN GENERAL.— 
‘‘(A) NOTIFICATION
AND
ACTION.—The 
Secretary shall notify the applicable regulatory 
authority in any case in which the Secretary de-
termines that a service provider is engaged in 
a pattern or practice that precludes compliance 
by plan administrators with section 111. The 
Secretary shall, in consultation with the appli-
cable authority, take such timely enforcement 
action under this title as is necessary to assure 
that such pattern or practice ceases and desists 
and assess any appropriate penalties. 
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‘‘(B) 
DISSEMINATION.—The 
Secretary 
shall widely disseminate to employee pension 
benefit plans covered by this title and their par-
ticipants and beneficiaries the identity of any 
service providers with respect to such plans 
found to be engaged in any pattern or practice 
described in subparagraph (A) with the intent 
to preclude compliance by plan administrators 
with section 111 and the particulars of such 
pattern or practice. Prior to the dissemination 
of the identity of any service providers identi-
fied and determined by the Secretary to be en-
gaged in such a pattern or practice, such serv-
ice provider shall receive a notice of intent to 
disseminate, an opportunity to request an ad-
ministrative hearing, and a timely appeal to the 
Secretary. 
‘‘(2) ANNUAL AUDIT OF REPRESENTATIVE SAM-
PLING OF INDIVIDUAL ACCOUNT PLANS.—The Sec-
retary shall annually audit a representative sampling 
of individual account plans covered by this title to 
determine compliance with the requirements of sec-
tion 111. The Secretary shall annually report the re-
sults of such audit and any related recommendations 
of the Secretary to the Committee on Education and 
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Labor of the House of Representatives and the Com-
mittee on Health, Education, Labor, and Pensions 
of the Senate.’’. 
(b) REVIEW AND REPORT TO THE CONGRESS BY 
SECRETARY OF LABOR RELATING TO REPORTING AND 
DISCLOSURE REQUIREMENTS.— 
(1) STUDY.—As soon as practicable after the 
date of the enactment of this Act, the Secretary of 
Labor shall review the reporting and disclosure re-
quirements of part 1 of subtitle B of title I of the 
Employee Retirement Income Security Act of 1974 
and related provisions of the Pension Protection Act 
of 2006. 
(2) REPORT.—Not later than 18 months after 
the date of the enactment of this Act, the Secretary 
of Labor, in consultation with the Secretary of the 
Treasury, shall make such recommendations as the 
Secretary of Labor considers appropriate to the ap-
propriate committees of the Congress to consolidate, 
simplify, standardize, and improve the applicable re-
porting and disclosure requirements so as to simplify 
reporting for employee pension benefit plans and en-
sure that needed understandable information is pro-
vided to participants and beneficiaries of such plans. 
VerDate Nov 24 2008 
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TITLE II—PROHIBITION OF CON-
FLICTED 
INVESTMENT 
AD-
VICE 
SEC. 201. FINDINGS. 
The Congress finds as follows: 
(1) The market downturn of 2008 had a dev-
astating effect on the retirement security income of 
millions of American workers. 
(2) According to the Congressional Budget Of-
fice, $2 trillion of Americans’ retirement savings was 
wiped out over a 15-month period starting in 2008. 
(3) According to Congressional Budget Office 
estimates, the value of pension funds and retirement 
accounts dropped by roughly $1 trillion last year. 
(4) Individual average losses of participants in 
401(k) plans ranged from 7.2 percent to 11.2 per-
cent in the first nine months of 2008, according to 
an Employee Benefit Research Institute analysis of 
2.2 million retirements account participants. 
(5) During the first nine months of 2008, 
stocks were down, with the S&P 500 index losing 
more than 19 percent. With over two-thirds of the 
assets in 401(k)-style defined contribution plans in-
vested in equities, either directly or through mutual 
funds, participants are exposed to increased risk and 
VerDate Nov 24 2008 
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lack meaningful access to independent investment 
advise to help them better plan for their retirement. 
(6) Currently, 401(k) plan account holders have 
access to a self-interested or conflicted investment 
adviser. 
(7) In 2007, the Government Accountability Of-
fice concluded that conflicts of interest can have an 
adverse affect on defined benefit and defined con-
tribution plans. 
SEC. 202. INDEPENDENT INVESTMENT ADVISERS FOR INDI-
VIDUAL ACCOUNT PLANS. 
(a) IN GENERAL.—Section 3 of the Employee Retire-
ment Income Security Act of 1974 (29 U.S.C. 1002) is 
amended by adding at the end the following new para-
graph: 
‘‘(43) INDEPENDENT INVESTMENT ADVISER.— 
‘‘(A) IN
GENERAL.—The term ‘inde-
pendent investment adviser’ means, with respect 
to an individual account plan that permits a 
participant or beneficiary to direct the invest-
ment of assets in their individual account, a 
person who— 
‘‘(i) is a fiduciary of the plan by rea-
son of the provision of investment advice 
referred to in section 3(21)(A)(ii) by the 
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person to the plan or a participant or ben-
eficiary of the plan (irrespective of the 
manner in which such advice is provided or 
the extent to which such advice is based on 
a computer model), and 
‘‘(ii) meets the requirements of either 
subparagraph (B) or (C). 
‘‘(B) REQUIREMENTS APPLICABLE TO IN-
VESTMENT
ADVISER.—An investment adviser 
meets the requirements of this subparagraph, 
if— 
‘‘(i) such adviser 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 adviser maintains its prin-
cipal office and place of business, 
‘‘(II) a bank or similar financial 
institution referred to in section 
408(b)(4) or a savings association (as 
defined in section 3(b)(1) of the Fed-
eral Deposit Insurance Act (12 U.S.C. 
1813(b)(1))), but only if the invest-
ment advice referred to in section 
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3(21)(A)(ii) which is provided by such 
bank 
or 
institution 
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, 
or 
‘‘(III) any other person, but only 
if every individual providing the in-
vestment advice referred to in section 
3(21)(A)(ii) on behalf of such person 
(or on behalf of any affiliate thereof) 
is a registered representative, 
‘‘(ii) such adviser is not the plan in-
vestment provider, 
‘‘(iii) the fees or other compensation 
received, directly or indirectly, by such ad-
viser (and any affiliate thereof) with re-
spect to the provision of investment advice 
to any individual account plan or the par-
ticipants or beneficiaries of such a plan ei-
ther— 
‘‘(I) are not received from any 
person or persons (or anyone affili-
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ated with such persons) that market, 
sell, manage or provide investments in 
which plan assets of the individual ac-
count plan are invested, or 
‘‘(II) do not vary depending on 
the basis of any investment option se-
lected, and are calculated pursuant to 
one or more of the following bases— 
‘‘(aa) a flat-dollar basis, 
‘‘(bb) a flat percentage of 
total plan assets basis, 
‘‘(cc) a flat or sliding-scale 
percentage of the assets in a par-
ticipant’s or beneficiary’s account 
basis, or 
‘‘(dd) a per-participant or 
per-beneficiary 
account 
basis, 
and 
‘‘(iv) such adviser provides the invest-
ment advice pursuant to a written arrange-
ment with the individual account plan 
that— 
‘‘(I) provides that the investment 
adviser is a fiduciary of the plan with 
respect to the provision of the advice, 
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‘‘(II) requires that the advice be 
provided only by registered represent-
atives of the investment adviser or an 
affiliate thereof, 
‘‘(III) discloses, before a reason-
able period prior to entering into such 
arrangement, whether the investment 
adviser or any affiliate thereof has 
any material financial, referral, or 
other relationship or arrangement 
with a money manager, broker, other 
client of the investment adviser or any 
affiliate thereof, other service provider 
to the plan, or any other entity that 
creates or may create a conflict of in-
terest for the investment adviser in 
performing services pursuant to the 
arrangement with the plan and, if so, 
includes a description of such relation-
ship or arrangement, 
‘‘(IV) includes a representation 
by the investment adviser that, before 
the arrangement was entered into (or 
extended or renewed), the investment 
adviser provided to the plan fiduciary 
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that has authority to cause the em-
ployee benefit plan to enter into (or 
extend or renew) the arrangement a 
written statement disclosing all fees or 
other compensation that the invest-
ment adviser or any affiliate thereof 
anticipates to receive with respect to 
the advice during the first year, or 
other period if less than a year, of the 
arrangement, 
‘‘(V) provides that the investment 
adviser will provide to such plan fidu-
ciary (and the participant and bene-
ficiary receiving the advice, if applica-
ble) a statement annually disclosing 
all fees or other compensation that 
the investment adviser or any affiliate 
thereof has received with respect to 
the advice during the prior year, and 
‘‘(VI) provides that the terms of 
the arrangement required under this 
clause and any information provided 
under such arrangement pursuant to 
subclauses (III) and (IV) will also be 
furnished by the investment adviser to 
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the participant or beneficiary that is 
the recipient of the advice. 
‘‘(C) ADVICE PROVIDED TO PARTICIPANTS 
AND
BENEFICIARIES
UNDER
AN
INVESTMENT 
ADVICE
COMPUTER
PROGRAM
MEETING
RE-
QUIREMENTS.—An investment adviser meets 
the requirements of this subparagraph if the in-
vestment advice provided by the adviser, to the 
extent that such advice is provided to partici-
pants and beneficiaries of individual account 
plans, is provided under an investment advice 
computer program with respect to which the re-
quirements of clauses (i) through (x) are met. 
‘‘(i) ADVISER
REQUIREMENTS.—The 
requirements of this clause are met if the 
investment adviser providing the invest-
ment advice under the program is— 
‘‘(I) described in subclauses (I) 
or (II) of subparagraph (B)(i), 
‘‘(II) 
an 
insurance 
company 
qualified to do business under the 
laws of a State, 
‘‘(III) a person registered as a 
broker or dealer under the Securities 
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Exchange Act of 1934 (15 U.S.C. 78a 
et seq.), 
‘‘(IV) an affiliate of a person de-
scribed in any of subclauses (I) 
through (III), or 
‘‘(V) an employee, agent, or reg-
istered representative of a person de-
scribed in subclauses (I) through (IV) 
who satisfies the requirements of ap-
plicable insurance, banking, and secu-
rities laws relating to the provision of 
the advice. 
‘‘(ii) COMPUTER
MODEL.—The re-
quirements of this clause are met if the in-
vestment advice provided under the invest-
ment advice computer program is provided 
pursuant to a computer model that— 
‘‘(I) applies generally accepted 
investment theories that take into ac-
count the historic returns of different 
asset classes over defined periods of 
time, 
‘‘(II) utilizes relevant information 
about the participant, which may in-
clude age, life expectancy, retirement 
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age, risk tolerance, other assets or 
sources of income, and preferences as 
to certain types of investments, 
‘‘(III) utilizes prescribed objective 
criteria to provide asset allocation 
portfolios comprised of investment op-
tions available under the plan, 
‘‘(IV) operates in a manner that 
is not biased in favor of investments 
offered by the investment adviser or 
any person with a material affiliation 
or contractual relationship with the 
investment adviser, and 
‘‘(V) takes into account all in-
vestment options under the plan in 
specifying how a participant’s account 
balance should be invested and is not 
inappropriately weighted with respect 
to any investment option. 
‘‘(iii) CERTIFICATION.— 
‘‘(I) IN GENERAL.—The require-
ments of this clause are met with re-
spect to the program if an eligible in-
vestment expert certifies, prior to the 
utilization of the computer model and 
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in accordance with rules prescribed by 
the Secretary, that the computer 
model meets the requirements of 
clause (ii). 
‘‘(II) RENEWAL
OF
CERTIFI-
CATIONS.—If, as determined under 
regulations prescribed by the Sec-
retary, there are material modifica-
tions to the computer model, the re-
quirements of this subparagraph are 
met only if a certification described in 
subclause (I) is obtained with respect 
to the computer model as so modified. 
‘‘(III) 
ELIGIBLE
INVESTMENT 
EXPERT.—For 
purposes 
of 
this 
clause, the term ‘eligible investment 
expert’ means any person— 
‘‘(aa) which meets such re-
quirements as the Secretary may 
provide, and 
‘‘(bb) does not have any ma-
terial affiliation or contractual 
relationship with any investment 
adviser or a related person there-
of (or any employee, agent, or 
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registered representative of the 
investment adviser or related per-
son). 
‘‘(iv) EXCLUSIVITY OF RECOMMENDA-
TION.—The requirements of this clause are 
met with respect to the program, if— 
‘‘(I) the only investment advice 
provided under the program is the ad-
vice generated by the computer model 
described in clause (ii), and 
‘‘(II) any transaction pursuant to 
the investment advice occurs solely at 
the direction of the participant or 
beneficiary. 
‘‘(v) EXPRESS
AUTHORIZATION
BY 
SEPARATE FIDUCIARY.—The requirements 
of this clause are met with respect to the 
program if the program is expressly au-
thorized by a plan fiduciary other than— 
‘‘(I) the person offering the pro-
gram, 
‘‘(II) any person that is a plan 
investment provider with respect to 
the plan, and 
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‘‘(III) any affiliate of either per-
son described in subclause (I) or (II). 
‘‘(vi) ANNUAL
AUDIT.—The require-
ments of this clause are met with respect 
to the program if an independent auditor, 
who has appropriate technical training or 
experience and proficiency and so rep-
resents in writing— 
‘‘(I) conducts an annual audit of 
the program other than the computer 
model referred to in clause (ii) which 
is certified pursuant to clause (iii)) for 
compliance with the requirements of 
this subparagraph, and 
‘‘(II) following completion of the 
annual audit, issues a written report 
to the fiduciary who authorized use of 
the program which presents its spe-
cific findings regarding compliance of 
the program with the requirements of 
this subsection. 
For purposes of this clause, an auditor is 
considered independent if it is not related 
to the person offering the program to the 
plan and is not affiliated with any person 
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providing investment options under the 
plan. 
‘‘(vii) 
DISCLOSURE.—The 
require-
ments of this clause are met with respect 
to the program, if— 
‘‘(I) the investment adviser pro-
vides to the fiduciary referred to in 
clause (v) and the participant or bene-
ficiary receiving investment advice 
under the program with regard to any 
security or other property offered as 
an investment option, before providing 
the advice, a written notification 
(which may consist of notification by 
means of electronic communication)— 
‘‘(aa) of the role of any 
party that has a material affili-
ation or contractual relationship 
with the investment adviser in 
the development of the invest-
ment advice program and in the 
selection of investment options 
available under the plan, 
‘‘(bb) of all fees or other 
compensation relating to the ad-
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vice that the investment adviser 
or any affiliate thereof is to re-
ceive 
(including 
compensation 
provided by any third party) in 
connection with the provision of 
the advice or in connection with 
the sale, acquisition, or holding 
of the security or other property, 
‘‘(cc) of any material affili-
ation or contractual relationship 
of the investment adviser or af-
filiates thereof in the security or 
other property, 
‘‘(dd) of the manner, and 
under what circumstances, any 
information relating to the par-
ticipant or beneficiary which is 
provided under the program will 
be used or disclosed, 
‘‘(ee) of the types of services 
provided by the investment ad-
viser in connection with the pro-
vision of investment advice by the 
investment adviser, and 
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‘‘(ff) that a recipient of the 
advice may separately arrange 
for the provision of advice by an-
other adviser, that could have no 
material affiliation with, and 
could receive no fees or other 
compensation, in connection with 
the security or other property, 
and 
‘‘(II) at all times during the pro-
vision of advisory services to the par-
ticipant or beneficiary, the investment 
adviser— 
‘‘(aa) maintains the infor-
mation described in subclause (I) 
in accurate form and in the man-
ner described in clause (ix), 
‘‘(bb) 
provides, 
without 
charge, accurate information to 
the recipient of the advice no less 
frequently than annually, 
‘‘(cc) 
provides, 
without 
charge, accurate information to 
the recipient of the advice upon 
request of the recipient, and 
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‘‘(dd) 
provides, 
without 
charge, accurate information to 
the recipient of the advice con-
cerning any material change to 
the information required to be 
provided to the recipient of the 
advice at a time reasonably con-
temporaneous to the change in 
information. 
‘‘(viii) OTHER CONDITIONS.—The re-
quirements of this clause are met with re-
spect to the program, if— 
‘‘(I) the investment adviser pro-
vides appropriate disclosure, in con-
nection with the sale, acquisition, or 
holding of the security or other prop-
erty with respect to which the invest-
ment advice is provided under the 
program, in accordance with all appli-
cable securities laws, 
‘‘(II) the sale, acquisition, or 
holding occurs solely at the direction 
of the recipient of the advice, 
‘‘(III) the compensation received 
by the investment adviser and affili-
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ates thereof in connection with the 
sale, acquisition, or holding of the se-
curity or other property is reasonable, 
and 
‘‘(IV) the terms of the sale, ac-
quisition, or holding of the security or 
other property are at least as favor-
able to the plan as an arm’s length 
transaction would be. 
‘‘(ix) STANDARDS FOR PRESENTATION 
OF INFORMATION.— 
‘‘(I) IN GENERAL.—The require-
ments of this clause are met with re-
spect to the program if the notifica-
tion required to be provided to partici-
pants and beneficiaries under clause 
(vii)(I) is written in a clear and con-
spicuous manner and in a manner cal-
culated to be understood by the aver-
age plan participant and is sufficiently 
accurate and comprehensive to rea-
sonably apprise such participants and 
beneficiaries of the information re-
quired to be provided in the notifica-
tion. 
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‘‘(II) MODEL FORM FOR DISCLO-
SURE
OF
FEES
AND
OTHER
COM-
PENSATION.—The 
Secretary 
shall 
issue a model form for the disclosure 
of fees and other compensation re-
quired in clause (vii)(I)(bb) which 
meets the requirements of subclause 
(I). 
‘‘(x) MAINTENANCE FOR 6 YEARS OF 
EVIDENCE OF COMPLIANCE.—The require-
ments of this clause are met with respect 
to the program if the investment adviser 
who provides advice under the program 
maintains, for a period of not less than 6 
years after the provision of the advice, any 
records necessary for determining whether 
the requirements of the preceding provi-
sions of this subparagraph and of sub-
section (b)(14) have been met. A failure to 
meet the requirements of this clause 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 
investment adviser. 
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‘‘(D) DEFINITIONS.—For purposes of this 
paragraph— 
‘‘(i) AFFILIATE.—The term ‘affiliate’ 
means, in connection with any other per-
son, any person directly or indirectly 
(through one or more intermediaries) con-
trolling, controlled by, or under common 
control with such other person, or any offi-
cer, director, agent, or employee of, or 
partner with, such other person. 
‘‘(ii) 
REGISTERED
REPRESENTA-
TIVE.—The term ‘registered representa-
tive’ of another entity means a person de-
scribed in section 3(a)(18) of the Securi-
ties Exchange Act of 1934 (15 U.S.C. 
78c(a)(18)) (substituting the entity for the 
broker or dealer referred to in such sec-
tion) or a person described in section 
202(a)(17) of the Investment Advisers Act 
of 1940 (15 U.S.C. 80b–2(a)(17)) (sub-
stituting the entity for the investment ad-
viser referred to in such section). 
‘‘(iii) 
PLAN
INVESTMENT
PRO-
VIDER.—The term ‘plan investment pro-
vider’ means any person that creates or 
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manages any investment in which plan as-
sets of the individual account plan are in-
vested and held in trust on behalf of such 
plan and includes any affiliate of such per-
son. Such term does not include— 
‘‘(I) a plan sponsor (or an affil-
iate thereof) with respect to any in-
vestment created or managed by the 
plan sponsor (or affiliate), if only em-
ployee benefit plans maintained by 
such plan sponsor or an affiliate 
thereof invest in such investments, 
‘‘(II) any person who makes the 
investment available to the plan, or 
any participant or beneficiary in the 
plan, as a part of a portfolio of invest-
ment options, to the extent that the 
investment options are created and 
managed by a person who is not an 
affiliate of the person making such 
portfolio available, and 
‘‘(III) any person, solely by rea-
son of authorization by a participant 
or beneficiary in the plan of such per-
son to exercise control over the assets 
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in the participant’s or beneficiary’s 
account in such plan, if such assets 
are not invested in any investments 
created or managed by such person 
(or an affiliate thereof). 
‘‘(iv) FEES
OR
OTHER
COMPENSA-
TION.—The term ‘fees or other compensa-
tion’ includes money or any other thing of 
monetary value (for example, gifts, awards, 
and trips) received, or to be received, di-
rectly from the plan or plan sponsor or in-
directly (i.e., from any source other than 
the plan or the plan sponsor) by the invest-
ment adviser or any affiliate thereof in 
connection with the advice to be provided 
pursuant to the arrangement or because of 
the investment adviser’s or any affiliate’s 
position with the plan. Fees or other com-
pensation may be expressed in terms of a 
monetary amount, percentage of the plan’s 
assets, or per capita charge for each par-
ticipant or beneficiary of the plan. The 
manner in which compensation or fees are 
expressed shall contain sufficient informa-
tion to enable the plan fiduciary to evalu-
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ate the reasonableness of such compensa-
tion or fees.’’. 
(b) FIDUCIARY DUTIES WITH RESPECT TO INVEST-
MENT ADVICE.— 
(1) IN GENERAL.—Section 404(a) of such Act 
(29 U.S.C. 1104(a)) is amended by adding at the 
end the following new paragraph: 
‘‘(3)(A) The fiduciary of an individual account plan 
that permits a participant or beneficiary to direct the in-
vestment of assets in the individual account shall not ap-
point, contract with, or otherwise arrange for an invest-
ment adviser to provide investment advice referred to in 
section 3(21)(A)(ii) to the plan or the participant or bene-
ficiary unless the investment adviser is an independent in-
vestment adviser (as defined in section 3(43)). 
‘‘(B) The independent investment adviser providing 
investment advice to a plan or to a participant or bene-
ficiary shall provide, before a reasonable period prior to 
the initial provision of the advice, a written notification— 
‘‘(i) of the past performance and historical 
rates of return of the investment options available 
with respect to the plan and comparisons of such op-
tions to relevant benchmarks, and 
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‘‘(ii) that the investment adviser is acting as a 
fiduciary of the plan in connection with the provision 
of the advice. 
‘‘(C) Nothing in this paragraph shall be construed to 
exempt a plan sponsor or other person who is a fiduciary 
from any requirement of this part for the prudent selec-
tion and periodic review of an independent investment ad-
viser with whom the plan sponsor or other person enters 
into an arrangement for the provision of investment advice 
referred to in section 3(21)(A)(ii), except that any such 
requirement shall not be construed to preclude reasonable 
reliance by the plan sponsor or other person on the rep-
resentation of any person that such person making the 
representation 
meets 
the 
requirements 
of 
section 
3(43)(A). The plan sponsor and any other person who is 
a fiduciary (other than the independent investment ad-
viser) has no duty under this part to monitor the specific 
investment advice given by the independent investment ad-
viser to any particular recipient of the advice and shall 
not be liable under this title for any loss, or by reason 
of any breach, which results from such specific investment 
advice given by the independent investment adviser. 
‘‘(D) Nothing in this part shall be construed to pre-
clude the use of plan assets to pay for reasonable expenses 
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in providing investment advice referred to in section 
3(21)(A)(ii). 
‘‘(E)(i) This paragraph shall not apply to a fiduciary 
of an individual account plan that permits a participant 
or beneficiary to direct the investment of assets in their 
individual account in any case in which the fiduciary ap-
points, contracts with, or otherwise arranges for an invest-
ment adviser to provide investment advice referred to in 
section 3(21)(A)(ii) to the plan or the participant or bene-
ficiary if, in such case, such advice— 
‘‘(I) is provided under an arrangement that 
meets the requirements set forth in Advisory Opin-
ion 2001-09A issued under ERISA Procedure 76–1 
(41 Fed. Reg. 36281 (Aug. 27, 1976)), or 
‘‘(II) is provided under an arrangement that 
meets the requirements of any Advisory Opinion 
issued under ERISA Procedure 76–1 or any exemp-
tion issued by the Secretary under section 408(a), as 
determined under the law in effect immediately prior 
to the enactment of the Pension Protection Act of 
2006. 
‘‘(ii) The Secretary shall prescribe rules requiring 
such reporting and disclosure as the Secretary considers 
appropriate with respect to investment advice arrange-
ments permitted by reason of this subparagraph.’’. 
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(2) REPORT ON PRIOR ADVISORY OPINIONS AND 
EXCEPTIONS.—The Secretary of Labor shall, as 
soon as practicable after the date of the enactment 
of this Act— 
(A) review each Advisory Opinion and ex-
ception described in section 404(a)(3)(E)(i) of 
the Employee Retirement Income Security Act 
of 1974 (as added by this paragraph (1)) to de-
termine the extent to which such Advisory 
Opinion or exception fails to adequately serve 
the interests of participants and beneficiaries 
and to be adequately protective of the rights of 
participants and beneficiaries, and 
(B) submit a report to each House of the 
Congress describing the extent of any such fail-
ure by any such Advisory Opinion or exception. 
(c) CONFORMING AMENDMENTS.—Section 408 of 
such Act (29 U.S.C. 1108) is amended— 
(1) by striking subsection (g); and 
(2) by striking subsection (b)(14)(B) and in-
serting the following: 
‘‘(B) the investment advice is provided by 
an independent investment adviser (as defined 
in section 3(43)).’’. 
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(d) REGULATORY AUTHORITY.—The Secretary of 
Labor may issue regulations providing that an investment 
adviser can still be considered as meeting the requirements 
of section 3(43)(B) of the Employee Retirement Income 
Security Act of 1974 despite the receipt of a de minimus 
amount of compensation that fails to meet the require-
ments of section 3(43)(B)(iii) of such Act due to the exist-
ence of previously existing contracts. 
(e) EFFECTIVE DATE.—The amendments made by 
this section shall apply to plan years beginning after one 
year after the date of the enactment of this Act. 
SEC. 203. EXPANSION OF OUTREACH TO PROMOTE RETIRE-
MENT INCOME SAVINGS TO INCLUDE PRO-
MOTION OF EDUCATION ON FINANCIAL LIT-
ERACY WITH RESPECT TO INVESTMENT FOR 
RETIREMENT. 
(a) IN GENERAL.—Section 516 of the Employee Re-
tirement Income Security Act of 1974 (29 U.S.C. 1146) 
is amended— 
(1) in subsection (b), by inserting after ‘‘cre-
ation of educational materials,’’ the following: ‘‘pro-
motion of education in financial literacy with respect 
to investment for retirement as provided in sub-
section (e),’’; 
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(2) by redesignating subsection (e) as sub-
section (f); and 
(3) by inserting after subsection (d) the fol-
lowing new subsection: 
‘‘(e) PROMOTION OF EDUCATION IN FINANCIAL LIT-
ERACY WITH RESPECT TO INVESTMENT FOR RETIRE-
MENT.—The Secretary, in consultation with the Secretary 
of Education and the Secretary of the Treasury, shall es-
tablish a program under which— 
‘‘(1) employees are provided with information 
and materials— 
‘‘(A) informing them about resources avail-
able for attaining financial literacy with respect 
to investment for retirement, 
‘‘(B) effectively educating them about the 
importance of, and appropriate techniques with 
respect to, personal finance, saving for retire-
ment, and choosing independent investment ad-
visers when managing their accounts under in-
dividual account plans, and 
‘‘(C) effectively educating them about debt 
obligations, the relationship of debt to savings, 
and the potential consequences of debt with re-
spect to saving for retirement, 
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‘‘(2) employers are enlisted to participate in 
such program so as to assist in the attainment of 
the goals described in subparagraphs (A), (B), and 
(C) of paragraph (1) with respect to their employees, 
and 
‘‘(3) appropriate standards of financial literacy 
of employees with respect to investment for retire-
ment are developed and published for utilization 
under such program.’’. 
(4) STUDY AND REPORT TO THE CONGRESS.— 
(A) IN GENERAL.—The Secretary of Labor 
shall conduct a survey of ongoing efforts by the 
Federal Government to assist employees with 
attainment of financial literacy with respect to 
investment for retirement and to educate them 
about the importance of, and appropriate tech-
niques with respect to, personal finance, debt 
obligations, saving for retirement, and choosing 
independent investment advisers when man-
aging their accounts under individual account 
plans. 
(B) REPORT.—Not later than 180 days 
after the date of the enactment of this Act, the 
Secretary shall submit a report to each House 
of the Congress setting forth the results of the 
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Secretary’s survey conducted pursuant to sub-
paragraph (A), together with such recommenda-
tions as the Secretary considers appropriate for 
improvement in efforts by the Federal Govern-
ment in assisting employees with attainment of 
financial literacy in connection with investment 
for retirement and educating them about the 
importance of, and appropriate techniques with 
respect to, personal finance, debt obligations, 
saving for retirement, and choosing independent 
investment advisers when managing their ac-
counts under individual account plans. 
TITLE III—TRANSITIONAL FUND-
ING RELIEF FOR DEFINED 
BENEFIT PLANS 
SEC. 301. ELECTION TO USE YIELD CURVE. 
(a) AMENDMENT TO ERISA.—The last sentence of 
clause (ii) of section 303(h)(2)(D) of the Employee Retire-
ment Income Security Act of 1974 (29 U.S.C. 
1083(h)(2)(D)(ii)) is amended to read as follows: ‘‘Such 
election, once made, may be revoked only with the consent 
of the Secretary, except that any election in effect for a 
plan with respect to a plan year beginning in 2009 may 
be revoked for the plan year beginning in 2010 without 
such consent.’’. 
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(b) AMENDMENT
TO IRC.—The last sentence of 
clause (ii) of section 430(h)(2)(D) of the Internal Revenue 
Code of 1986 (relating to election to use yield curve) is 
amended to read as follows: ‘‘Such election, once made, 
may be revoked only with the consent of the Secretary, 
except that any election in effect for a plan with respect 
to a plan year beginning in 2009 may be revoked for the 
plan year beginning in 2010 without such consent.’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to plan years beginning after De-
cember 31, 2009. 
SEC. 302. EFFECTIVE DATE OF REGULATIONS. 
The Secretary of the Treasury shall— 
(1) make the final regulations issued under sec-
tions 206(g) and 303 of the Employee Retirement 
Income Security Act of 1974 and sections 430 and 
436 of the Internal Revenue Code of 1986 effective 
no earlier than plan years beginning after December 
31, 2009; and 
(2) provide rules, for plan years beginning be-
fore the effective date of such final regulations, 
under which compliance with a reasonable interpre-
tation of an applicable provision under section 
206(g) or 303 of the Employee Retirement Income 
Security Act of 1974 or section 430 or 436 of the 
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Internal Revenue Code of 1986 shall be treated as 
compliance with such provision. 
SEC. 303. CLARIFICATION OF TREATMENT OF EXPENSES. 
(a) AMENDMENTS TO ERISA.— 
(1) IN
GENERAL.—Clause (ii) of section 
303(b)(1)(A) of the Employee Retirement Income 
Security Act of 1974 (29 U.S.C. 1083(b)(1)(A)(ii)) 
is amended by striking ‘‘plan-related expenses’’ and 
inserting ‘‘plan-related administrative expenses’’. 
(2) CONFORMING AMENDMENT.—Subclause (II) 
of section 303(i)(2)(A)(i) of such Act (29 U.S.C. 
1083(i)(2)(A)(i)(II)) is amended by striking ‘‘plan- 
related expenses’’ and inserting ‘‘plan-related admin-
istrative expenses’’. 
(b) AMENDMENTS TO IRC.— 
(1) IN
GENERAL.—Clause (ii) of section 
430(b)(1)(A) of the Internal Revenue Code of 1986 
(relating to target normal cost) is amended by strik-
ing ‘‘plan-related expenses’’ and inserting ‘‘plan-re-
lated administrative expenses’’. 
(2) CONFORMING AMENDMENT.—Subclause (II) 
of section 430(i)(2)(A)(i) of such Code is amended 
by striking ‘‘plan-related expenses’’ and inserting 
‘‘plan-related administrative expenses’’. 
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(c) EFFECTIVE DATE.—The amendments made by 
this section shall take effect as if included in the enact-
ment of paragraphs (1)(A), (1)(F)(i), (2)(A), and 
(2)(F)(i) of section 101(b) of the Worker, Retiree, and 
Employer Recovery Act of 2008 (Public Law 110–458; 
122 Stat. 5093). 
SEC. 304. INFORMATION REPORTING. 
(a) IN GENERAL.—Paragraph (1) of section 4010(b) 
of the Employee Retirement Security Act of 1974 (29 
U.S.C. 1310(b)(1)) is amended to read as follows: 
‘‘(1) either of the following requirements are 
met: 
‘‘(A) the funding target attainment per-
centage (as defined in subsection (d)) at the 
end of the preceding plan year of a plan main-
tained by the contributing sponsor or any mem-
ber of its controlled group is less thqan 80 per-
cent; or 
‘‘(B) the aggregate unfunded vested bene-
fits 
(as 
determined 
under 
section 
4006(a)(3)(E)(iii)) of plans maintained by the 
contributing sponsor and the members of its 
controlled group exceed $50,000,000 (dis-
regarding plans with no unfunded vested bene-
fits);’’. 
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(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to years beginning after 2009. 
SEC. 305. FIVE-YEAR EXTENSION OF AUTOMATIC AMORTI-
ZATION EXTENSION PERIOD FOR MULTIEM-
PLOYER PLANS. 
(a) ERISA AMENDMENTS.—Section 304(d) of the 
Employee Retirement Income Security Act of 1974 (29 
U.S.C. 1084(d)) is amended— 
(1) in paragraph (1)(A), by striking ‘‘5 years’’ 
and inserting ‘‘10 years’’; and 
(2) in paragraph (2)(A), by striking ‘‘10 years’’ 
and inserting ‘‘15 years’’. 
(b) IRC AMENDMENTS.—Section 431(d) of the Inter-
nal Revenue Code of 1986 (relating to extension of amorti-
zation periods for multiemployer plans) is amended— 
(1) in paragraph (1)(A), by striking ‘‘5 years’’ 
and inserting ‘‘10 years’’; and 
(2) in paragraph (2)(A), by striking ‘‘10 years’’ 
and inserting ‘‘15 years’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply with respect to applications for ex-
tension filed on or after the date of the enactment of this 
Act. 
Æ 
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