Definition: In this task, you are given text for US Congressional and California state bills, your task is to generate a summary for this bill.
Input: SECTION 1. SHORT TITLE.

This Act may be cited as the ''Affordable Retirement Advice
Protection Act''.

SEC. 2. PURPOSE.

The purpose of this Act is to provide that advisors who--
(1) provide advice that is impermissible under the
prohibited transaction provisions under section 406 of the
Employee Retirement Income Security Act of 1974, or
(2) breach the best interest standard for the provision of
investment advice,
are subject to liability under the Employee Retirement Income Security
Act of 1974.

SEC. 3. RULES RELATING TO THE PROVISION OF INVESTMENT ADVICE.

(a) In General.--
(1) Definition of investment advice.--Section 3(21) of the
Employee Retirement Income Security Act of 1974 (29 U.S.C.
1002(21)) is amended by adding at the end the following:
''(C)(i) For purposes of clause (ii) of subparagraph (A), the term
'investment advice' means a recommendation that--
''(I) relates to--
''(aa) the advisability of acquiring, holding,
disposing, or exchanging any moneys or other property
of a plan by the plan, plan participants, or plan
beneficiaries, including any recommendation whether to
take a distribution of benefits from such plan or any
recommendation relating to the investment of any moneys
or other property of such plan to be rolled over or
otherwise distributed from such plan;
''(bb) the management of moneys or other property
of such plan, including recommendations relating to the
management of moneys or other property to be rolled
over or otherwise distributed from such plan; or
''(cc) the advisability of retaining or ceasing to
retain a person who would receive a fee or other
compensation for providing any of the types of advice
described in this subclause; and
''(II) is rendered pursuant to--
''(aa) a written acknowledgment of the obligation
of the advisor to comply with section 404 with respect
to the provision of such recommendation; or
''(bb) a mutual agreement, arrangement, or
understanding, which may include limitations on scope,
timing, and responsibility to provide ongoing
monitoring or advice services, between the person
making such recommendation and the plan that such
recommendation is individualized to the plan and such
plan intends to materially rely on such recommendation
in making investment or management decisions with
respect to any moneys or other property of such plan.
''(ii) For purposes of clause (i)(II)(bb), any disclaimer of a
mutual agreement, arrangement, or understanding shall only state the
following: 'This information is not individualized to you, and there is
no intent for you to materially rely on this information in making
investment or management decisions.'. Such disclaimer shall not be
effective unless such disclaimer is in writing and is communicated in a
clear and prominent manner and an objective person would reasonably
conclude that, based on all the facts and circumstances, there was not
a mutual agreement, arrangement, or understanding described in clause
(i)(II)(bb).
''(iii) For purposes of clause (i)(II)(bb), information shall not
be considered to be a recommendation made pursuant to a mutual
agreement, arrangement, or understanding if such information contains
the disclaimer required by clause (ii) and--
''(I) it is provided in conjunction with full and fair
disclosure in writing to a plan, plan participant, or
beneficiary that the person providing the information is doing
so in its marketing or sales capacity, including any
information regarding the terms and conditions of the
engagement of the person providing the information, and that
the person is not intending to provide investment advice within
the meaning of this subparagraph or to otherwise act within and
under the obligations of the best interest standard as
described in this subparagraph;
''(II) the person providing the information is a
counterparty or service provider to the plan in connection with
any transaction based on the information (including a service
arrangement, sale, purchase, loan, bilateral contract, swap (as
defined in section 1a of the Commodity Exchange Act (7 U.S.C.
1a)), or security-based swap (as defined in section 3(a) of the
Securities Exchange Act (15 U.S.C. 78c(a)))), but only if--
''(aa) the plan is represented, in connection with
such transaction, by a plan fiduciary who is
independent of the person providing the information,
and, except in the case of a swap or security-based
swap, independent of the plan sponsor; and
''(bb) prior to such transaction, the independent
plan fiduciary represents in writing to the person
providing the information that it is aware that the
person has a financial interest in the transaction and
that it has determined that the person is not intending
to provide investment advice within the meaning of this
subparagraph or to otherwise act as a fiduciary to the
plan subject to section 404;
''(III) the person providing the information is an employee
of any sponsoring employer or employee organization who
provides the information to the plan for no fee or other
compensation other than the employee's normal compensation;
''(IV) the person providing the information discloses in
writing to the plan fiduciary that the person is not
undertaking to provide investment advice as a fiduciary to the
plan subject to section 404 and the information consists solely
of--
''(aa) making available to the plan, without regard
to the individualized needs of the plan, securities or
other property through a platform or similar mechanism
from which a plan fiduciary may select or monitor
investment alternatives, including qualified default
investment alternatives, into which plan participants
or beneficiaries may direct the investment of assets
held in, or contributed to, their individual accounts;
or
''(bb) in connection with a platform or similar
mechanism described in item (aa)--
''(AA) identifying investment alternatives
that meet objective criteria specified by the
plan, such as criteria concerning expense
ratios, fund sizes, types of asset, or credit
quality; or
''(BB) providing objective financial data
and comparisons with independent benchmarks to
the plan;
''(V) the information consists solely of valuation
information; or
''(VI) the information consists solely of--
''(aa) information described in Department of Labor
Interpretive Bulletin 96-1 (29 C.F.R. 2509.96-1, as in
effect on January 1, 2015), regardless of whether such
education is provided to a plan or plan fiduciary or a
participant or beneficiary;
''(bb) information provided to participants or
beneficiaries regarding the factors to consider in
deciding whether to elect to receive a distribution
from a plan or an individual retirement plan (as
defined in section 7701(a)(37) of the Internal Revenue
Code of 1986) and whether to roll over such
distribution to a plan or an individual retirement plan
(as defined in section 7701(a)(37) of the Internal
Revenue Code of 1986), so long as any examples of
different distribution and rollover alternatives are
accompanied by all material facts and assumptions on
which the examples are based; or
''(cc) any additional information treated as
education by the Secretary.''.
(2) Exemption relating to investment advice.--Section
408(b) of the Employee Retirement Income Security Act of 1974
is amended by adding at the end the following:
''(21)(A) Any transaction, including a contract for
service, between a person providing investment advice described
in section 3(21)(A)(ii) and the advice recipient in connection
with such investment advice, and any transaction consisting of
the provision of such investment advice, if the following
conditions are satisfied:
''(i) No more than reasonable compensation is paid
(as determined under paragraph (2)) for such investment
advice.
''(ii) If the investment advice is based on a
limited range of investment options (which may consist,
in whole or in part, of proprietary products), such
limitations, including a clearly stated notice that the
same or similar investments may be available at a
different cost (greater or lesser) from other sources,
shall be clearly disclosed to the advice recipient
prior to any transaction based on the investment
advice. The notice shall only state the following: 'The
same or similar investments may be available at a
different cost (greater or lesser) from other
sources.'.
''(iii) If the investment advice may result in
variable compensation to the person providing the
investment advice (or any affiliate of such person),
the receipt of such compensation, including a clearly
stated notice that the same or similar investments may
be available at a different cost (greater or lesser)
from other sources, shall be clearly disclosed to the
advice recipient. The notice shall only state the
following: 'The same or similar investments may be
available at a different cost (greater or lesser) from
other sources.'. For purposes of this subparagraph,
clear disclosure of variable compensation means
notification prior to any transaction based on the
recommendation, in a manner calculated to be understood
by the average individual, of the following:
''(I) A notice that the person providing
the recommendation (or its affiliate) may
receive varying amounts of fees or other
compensation with respect to such transaction.
''(II) A description of any fee or other
compensation that is directly payable to the
person (or its affiliate) from the advice
recipient with respect to such transaction
(expressed as an amount, formula, percentage of
assets, per capita charge, or estimate or range
of such compensation).
''(III) A description of the types and
ranges of any indirect compensation that may be
paid to the person (or its affiliate) by any
third party in connection with such transaction
(expressed as an amount, formula, percentage of
assets, per capita charge, or estimate of such
ranges of compensation).
''(IV) Upon request of the advice
recipient, a disclosure of the specific amounts
of compensation described in clause (iii) that
the person will receive in connection with the
particular transaction (expressed as an amount,
formula, percentage of assets, per capita
charge, or estimate of such compensation).
''(B) No recommendation will fail to satisfy the conditions
described in clauses (i) through (iii) of subparagraph (A)
solely because the person, acting in good faith and with
reasonable diligence, makes an error or omission in disclosing
the information specified in such clauses, provided that the
person discloses the correct information to the advice
recipient as soon as practicable, but not later than 30 days
from the date on which the person knows of such error or
omission.
''(C) For purposes of this paragraph, the term 'affiliate'
has the meaning given in subsection (g)(11)(B).''.
(b) Effective Date.--The amendments made by subsection (a) shall
take effect on the date of the enactment of this Act and shall apply
with respect to communications provided or recommendations made on or
after 2 years after such date.
(c) Grandfathered Transactions and Services.--The amendments made
by subsection (a) shall not apply to any service or transaction
rendered, entered into, or for which a person has been compensated
prior to the date on which the amendments become effective under
subsection (b).
(d) Transition.--Until such time as regulations or other guidance
are issued to carry out the amendments made by subsection (a), a plan
or a fiduciary shall be treated as meeting the requirements of such
amendments if the plan or fiduciary, as the case may be, complies with
a reasonable good faith interpretation of such amendments.
Output:
Affordable Retirement Advice Protection Act This bill amends the Employee Retirement Income Security Act of 1974 (ERISA) to modify requirements related to fiduciaries and the provision of investment advice for employer-sponsored retirement plans. (Under current law, a person who provides investment advice has a fiduciary obligation that requires the person to provide advice in the sole interest of plan participants and beneficiaries.) The bill defines "investment advice" as a recommendation that relates to: the advisability of acquiring, holding, disposing, or exchanging any moneys or other property of a plan by the plan, participants, or beneficiaries, including any recommendation regarding whether to take a distribution of benefits from the plan or any recommendation relating to a rollover or distribution from such plan; the management of moneys or other property of the plan, including recommendations relating to the management of plan assets to be rolled over or otherwise distributed from the plan; or the advisability of retaining or ceasing to retain a person who would receive a fee or other compensation for providing investment advice. Investment advice must be rendered pursuant to either: (1) a written acknowledgment of the obligation of the advisor to comply with fiduciary standards under ERISA; or (2) a mutual agreement, arrangement, or understanding that may include limitations on scope, timing, and responsibility to provide ongoing monitoring or advice services. The bill allows an exemption from ERISA prohibited transactions rules for investment advice if: (1) no more than reasonable compensation is paid for the advice, and (2) specified disclosures and notifications are provided to the recipient of advice that is based on a limited range of investment options or may result in variable income to the investment advisor.