[Congressional Bills 107th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3445 Introduced in House (IH)]







107th CONGRESS
  1st Session
                                H. R. 3445

To amend the Employee Retirement Income Security Act of 1974 to improve 
             the retirement security of American families.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                           December 11, 2001

Mr. Andrews (for himself, Mr. George Miller of California, Mr. Kildee, 
Mr. Owens, Mr. Payne, Mrs. Mink of Hawaii, Mr. Scott, Ms. Woolsey, Ms. 
Rivers, Mr. Hinojosa, Mr. Tierney, Mr. Kind, Ms. Sanchez, Mr. Ford, Mr. 
    Kucinich, Mr. Holt, Ms. Solis, and Ms. McCollum) introduced the 
 following bill; which was referred to the Committee on Education and 
the Workforce, and in addition to the Committees on Armed Services, and 
 Government Reform, 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

_______________________________________________________________________

                                 A BILL


 
To amend the Employee Retirement Income Security Act of 1974 to improve 
             the retirement security of American families.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE AND TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Retirement 
Enhancement Act of 2001''.
    (b) Table of Contents.--The table of contents is as follows:

Sec. 1. Short title and table of contents.
              TITLE I--IMPROVED PARTICIPATION AND VESTING

Sec. 101. Minimum coverage requirements.
Sec. 102. Minimum participation requirements.
Sec. 103. Faster vesting of benefits under defined contribution plans.
Sec. 104. Model small employer group pension plan.
Sec. 105. Enforcement under ERISA of requirements for simplified 
                            employee pensions.
            TITLE II--IMPROVED PENSION PROTECTIONS FOR WOMEN

Sec. 201. Elimination of integration with workers' compensation and 
                            similar benefits.
Sec. 202. Spousal consent required for distributions from defined 
                            contribution plans.
Sec. 203. Modifications of joint and survivor annuity requirements.
Sec. 204. Division of pension benefits upon divorce.
Sec. 205. Periods of family and medical leave treated as hours of 
                            service for pension participation and 
                            vesting.
Sec. 206. Right of spouse to know distribution information.
Sec. 207. Repeal of reduction in military survivor benefit plan 
                            annuities at age 62.
Sec. 208. Survivor annuities for widows, widowers, and former spouses 
                            of Federal employees who die before 
                            attaining age for deferred annuity under 
                            Civil Service Retirement System.
Sec. 209. Order of precedence for disposition of amounts remaining in 
                            the thrift savings account of a Federal 
                            employee (or former employee) who dies 
                            before making an effective election 
                            controlling such disposition.
Sec. 210. Interest on amounts paid to make up for certain civil service 
                            annuity benefits wrongfully denied.
Sec. 211. Amendments relating to effective date provision of the Civil 
                            Service Retirement Spouse Equity Act of 
                            1984.
               TITLE III--SIMPLIFIED INVESTMENT STANDARDS

Sec. 301. Exemption from prohibited transaction rules for emergent 
                            transactions.
Sec. 302. Prohibited transaction exemption for the provision of 
                            investment advice.
Sec. 303. Participation of participants in trusteeship of defined 
                            contribution plans.
Sec. 304. Diversification in defined contribution plan investments.
Sec. 305. Removal of $500,000 cap on bonding requirement.
Sec. 306. Disclosure regarding investments and voting of proxies.
     TITLE IV--IMPROVEMENTS IN PENSION INFORMATION AND ENFORCEMENT

Sec. 401. Periodic pension benefit statements.
Sec. 402. Disclosures to Secretary of Labor relating to plan 
                            termination and relating to plan sponsors 
                            after acquisition or merger of plans.
Sec. 403. Disclosure of operating income of employers adjusted so as to 
                            exclude certain components mandated in FASB 
                            rules governing accounting for defined 
                            benefit pension plans.
Sec. 404. Specific information regarding multiemployer plans included 
                            in annual report.
Sec. 405. Limited scope audits.
Sec. 406. Reporting and enforcement requirements for employee benefit 
                            plans.
Sec. 407. Study of pension trends and characteristics.
Sec. 408. Early resolution program for pension benefit claims.
Sec. 409. De novo review of benefit determinations.
Sec. 410. Allowable relief.
Sec. 411. Assessment by Secretary of Labor of penalties for failures to 
                            meet disclosure requirements.
Sec. 412. Missing participants.
Sec. 413. Fiduciary duties with respect to changes in investment 
                            options.
Sec. 414. Secretary of Labor required to provide assistance.
Sec. 415. Exclusivity of powers and procedures applicable to rights or 
                            claims.
    TITLE V--IMPROVED PENSION PROTECTIONS FOR THE CHANGING WORKFORCE

Sec. 501. Loans from retirement plans for health insurance and job 
                            training expenses.
Sec. 502. Automatic rollover upon mandatory distribution in excess of 
                            $1,000.
Sec. 503. Prompt distribution from defined contribution plans upon 
                            termination of participant's covered 
                            employment.
Sec. 504. Extended period for recoupment of overpayments.
                      TITLE VI--GENERAL PROVISIONS

Sec. 601. General effective date.
Sec. 602. Plan amendments.

              TITLE I--IMPROVED PARTICIPATION AND VESTING

SEC. 101. MINIMUM COVERAGE REQUIREMENTS.

    (a) In General.--Part 2 of subtitle B of title I of the Employee 
Retirement Income Security Act of 1974 (29 U.S.C. 201 et seq.) is 
amended by inserting after section 201 the following new section:

                    ``minimum coverage requirements

    ``Sec. 201A. (a) General Rule.--Each pension plan maintained by an 
employer shall benefit all employees of the employer.
    ``(b) Exclusion of Certain Employees.--For purposes of this 
section, there shall be excluded from consideration--
            ``(1) employees who are included in a unit of employees 
        covered by an agreement which, as determined in accordance with 
        regulations issued by the Secretary, constitutes a collective 
        bargaining agreement between employee representatives and one 
        or more employers, if there is evidence that retirement 
        benefits were the subject of good faith bargaining between such 
        employee representatives and such employer or employers,
            ``(2) in the case of a trust established or maintained 
        pursuant to an agreement which, as determined in accordance 
        with regulations issued by the Secretary, constitutes a 
        collective bargaining agreement between airline pilots 
        represented in accordance with title II of the Railway Labor 
        Act and one or more employers, all employees not covered by 
        such agreement, and
            ``(3) employees who are nonresident aliens and who receive 
        no earned income (within the meaning of section 911(d)(2) of 
        the Internal Revenue Code of 1986) from the employer which 
        constitutes income from sources within the United States 
        (within the meaning of section 861(a)(3) of such Code).
Paragraph (1) shall not apply with respect to coverage of employees 
under a plan pursuant to an agreement under such paragraph. Paragraph 
(2) shall not apply in the case of a plan which provides contributions 
or benefits for employees whose principal duties are not customarily 
performed aboard aircraft in flight.
    ``(c) Exclusion of Employees Not Meeting Age and Service 
Requirements.--
            ``(1) In general.--If a plan--
                    ``(A) prescribes, consistent with section 202(a), 
                minimum age and service requirements as a condition of 
                participation, and
                    ``(B) excludes all employees not meeting such 
                requirements from participation,
        then such employees shall be excluded from consideration for 
        purposes of this section.
            ``(2) Requirements may be met separately with respect to 
        excluded group.--If employees not meeting the minimum age or 
        service requirements of section 202(a)(1) (without regard to 
        subparagraph (B) thereof) are covered under a plan of the 
        employer which meets the requirements of subsection (a) 
        separately with respect to such employees, such employees may 
        be excluded from consideration in determining whether any plan 
        of the employer meets the requirements of subsection (a).
            ``(3) Requirements not treated as being met before entry 
        date.--An employee shall not be treated as meeting the age and 
        service requirements described in this subsection until the 
        first date on which, under the plan, any employee with the same 
        age and service would be eligible to commence participation in 
        the plan.
    ``(d) Line of Business Exception.--
            ``(1) In general.--If, under section 414(r) of the Internal 
        Revenue Code of 1986, an employer is treated as operating 
        separate lines of business for a year, the employer may apply 
        the requirements of this section for such year separately with 
        respect to employees in each separate line of business.
            ``(2) Plan must be nondiscriminatory.--Paragraph (1) shall 
        not apply with respect to any plan maintained by an employer 
        unless such plan benefits such employees as qualify under a 
        classification set up by the employer and found by the 
        Secretary of the Treasury not to be discriminatory in favor of 
        highly compensated employees.
    ``(e) Definitions and Special Rules.--For purposes of this 
section--
            ``(1) Highly compensated employee.--The term `highly 
        compensated employee' has the meaning given such term by 
        section 414(q) of the Internal Revenue Code of 1986.
            ``(2) Aggregation rules.--An employer may elect to 
        designate--
                    ``(A) 2 or more trusts,
                    ``(B) 1 or more trusts and 1 or more annuity plans, 
                or
                    ``(C) 2 or more annuity plans,
        as part of 1 plan to determine whether the requirements of this 
        section are met with respect to such plan.
            ``(3) Special rules for certain dispositions or 
        acquisitions.--
                    ``(A) In general.--If a person becomes, or ceases 
                to be, a member of a group described in subsection (b), 
                (c), (m), or (o) of section 414 of such Code, then the 
                requirements of this section shall be treated as having 
                been met during the transition period with respect to 
                any plan covering employees of such person or any other 
                member of such group if--
                            ``(i) such requirements were met 
                        immediately before each such change, and
                            ``(ii) the coverage under such plan is not 
                        significantly changed during the transition 
                        period (other than by reason of the change in 
                        members of a group) or such plan meets such 
                        other requirements as the Secretary of the 
                        Treasury may prescribe by regulation.
                    ``(B) Transition period.--For purposes of 
                subparagraph (A), the term `transition period' means 
                the period--
                            ``(i) beginning on the date of the change 
                        in members of a group, and
                            ``(ii) ending on the last day of the 1st 
                        plan year beginning after the date of such 
                        change.
            ``(4) Eligibility to contribute.--In the case of 
        contributions which are subject to section 401(k) or 401(m) of 
        the Internal Revenue Code of 1986, employees who are eligible 
        to contribute (or elect to have contributions made on their 
        behalf) shall be treated as benefiting under the plan.
            ``(5) Regulations.--The Secretary of the Treasury shall 
        prescribe such regulations as may be necessary or appropriate 
        to carry out the purposes of this section.''
    (b) Employer May Not Request Employee To Waive Rights.--Section 203 
of such Act (29 U.S.C. 1053) is amended by adding at the end the 
following new subsection:
    ``(f) An employer may not request an employee to waive any right of 
coverage under, or participation in, any pension plan which is granted 
by this title.''

SEC. 102. MINIMUM PARTICIPATION REQUIREMENTS.

    (a) In General.--Sections 202(a)(3), 203(b)(2), and 204(b)(4) of 
the Employee Retirement Income Security Act of 1974 (29 U.S.C. 
1052(a)(3), 1053(b)(2), and 1054(b)(4)) are each amended by striking 
``1,000 hours'' each place it appears and inserting ``750 hours''.
    (b) Conforming Amendments.--
            (1) Sections 202(a)(3)(D), 203(b)(2)(D), and 204(b)(4)(E) 
        (29 U.S.C. 1052(a)(3)(D), 1053(b)(2)(D), and 1054(b)(4)(E)) are 
        each amended by striking ``125 days'' and inserting ``94 
        days''.
            (2) Sections 202(b)(5)(B) and 203(b)(3)(E)(ii) (29 U.S.C. 
        1052(b)(5)(B) and 1053(b)(3)(E)(ii)) are each amended by 
        striking ``501 hours'' and inserting ``376 hours''.
            (3) Section 203(b)(3)(A) (29 U.S.C. 1053(b)(3)(A)) is 
        amended by striking ``500 hours'' and inserting ``375 hours''.

SEC. 103. FASTER VESTING OF BENEFITS UNDER DEFINED CONTRIBUTION PLANS.

    Paragraph (2) of section 203(a) of the Employee Retirement Income 
Security Act of 1974 (29 U.S.C. 1053(a)) is amended by striking 
subparagraphs (A) and (B) and inserting the following:
                    ``(A) A plan satisfies the requirements of this 
                subparagraph if an employee has a nonforfeitable right 
                to 100 percent of the employee's accrued benefit 
                derived from employer contributions--
                            ``(i) in the case of a defined benefit 
                        plan, as of completion by the employee of at 
                        least 5 years of service, or
                            ``(ii) in the case of a defined 
                        contribution plan, as of completion by the 
                        employee of at least 3 years of service.
                    ``(B) A plan satisfies the requirements of this 
                subparagraph if an employee has a nonforfeitable right 
                to a percentage of the employee's accrued benefit 
                derived from employer contributions determined under 
                the applicable table set forth in clause (i) or (ii).
                            ``(i) In the case of a defined benefit 
                        plan, the applicable table is the following:

                                                     The nonforfeitable
    ``Years of service:                                  percentage is:
        3.........................................                 20  
        4.........................................                 40  
        5.........................................                 60  
        6.........................................                 80  
        7 or more.................................               100.  
                            ``(ii) In the case of a defined 
                        contribution plan, the applicable table is the 
                        following:

                                                     The nonforfeitable
    ``Years of service:                                  percentage is:
        1.........................................                 20  
        2.........................................                 40  
        3.........................................                 60  
        4.........................................                 80  
        5 or more.................................            100.''.  

SEC. 104. MODEL SMALL EMPLOYER GROUP PENSION PLAN.

    (a) In General.--Section 206 of the Employee Retirement Income 
Security Act of 1974 (29 U.S.C. 1056) is amended by adding at the end 
the following new subsection:
    ``(g) Model Simplified Group Pension Plans.--
            ``(1) Establishment of model plan.--The Secretary, in 
        consultation with the Secretary of the Treasury, shall 
        prescribe by regulations one or more model simplified group 
        pension plans which would--
                    ``(A) provide simplicity and minimal administrative 
                responsibilities to employers and provide adequate 
                retirement benefits to employees upon adoption by an 
                employer, including models which could be established 
                by a group of small employers, an employee association, 
                an employer association, or a financial institution,
                    ``(B) cover all employees of the employer,
                    ``(C) accept contributions from successive 
                employers,
                    ``(D) readily permit and accept rollovers to and 
                from other qualified plans (as defined in section 
                203(e)(2)), and
                    ``(E) constitute a plan meeting the requirements of 
                this Act and Internal Revenue Code of 1986.
        In devising a model pension plan, the Secretary shall consider 
        the adequacy of existing simplified employee pension plan 
        alternatives and may make recommendations to adopt such plans 
        as model simplified plans.
            ``(2) Advertisement of model plan.--The Secretary, in 
        consultation with the Secretary of the Treasury and the 
        Administrator of the Small Business Administration, shall 
        advertise the model plans developed pursuant to paragraph (1), 
        including through contracts (to the extent provided in 
        appropriation Acts) with applicable organizations, to ensure 
        that small employers and their employees are apprised of the 
        availability of administratively simple single and group 
        pension plans.''.
    (b) Exemption of Plan Sponsor From Fiduciary Liability.--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 plan sponsor of an employee benefit plan shall not be 
liable under this part in connection with such plan for any act or 
practice by such plan sponsor consistent with the requirements of such 
plan if such plan conforms to the terms of a model simplified group 
pension plan prescribed pursuant to section 206(g).''.
    (c) Initial Regulations.--Regulations under section 206(g) of the 
Employee Retirement Income Security Act of 1974 (added by this section) 
for the first model simplified pension plans shall be issued within 12 
months of the date of the enactment of this Act.
    (d) Study.--Not later than 3 years after the date of the enactment 
of this Act, the Secretary of Labor and the Secretary of the Treasury 
shall conduct a joint study to determine the feasibility of permitting 
non-highly compensated employees whose employer does not cover them 
under a pension plan, and other non-covered individuals, to seek an 
automatic payroll deduction or other deferral mechanism to make 
contributions to a pension plan conforming to the the requirements of a 
model simplified group pension plan developed pursuant to section 
206(g) of the Employee Retirement Income Security Act of 1974 or to 
similar pension plans. Such Secretaries shall submit a joint report to 
the Congress describing the results of such study and making such 
recommendations as the Secretaries determine necessary or appropriate.

SEC. 105. ENFORCEMENT UNDER ERISA OF REQUIREMENTS FOR SIMPLIFIED 
              EMPLOYEE PENSIONS.

    Subtitle A of title III of the Employee Retirement Income Security 
Act of 1974 is amended by adding after section 3004 (29 U.S.C. 1204) 
the following new section:

              ``treatment of simplified employee pensions

    ``Sec. 3005. For purposes of part 5 of subtitle B of title I, the 
requirements of section 408(k) of the Internal Revenue Code of 1986 
relating to simplified employee pensions (as defined in section 
408(k)(1) of such Code) shall be treated as requirements of title I 
applicable to employee  pension benefit plans (as defined in section 
3(2)) which are such simplified employee pensions.''.

            TITLE II--IMPROVED PENSION PROTECTIONS FOR WOMEN

SEC. 201. ELIMINATION OF INTEGRATION WITH WORKERS' COMPENSATION AND 
              SIMILAR BENEFITS.

    Section 206 of the Employee Retirement Income Security Act of 1974 
(as amended by section 104(a)) is amended further by adding at the end 
the following new subsection:
    ``(h) Integration With Workers' Compensation and Similar Benefits 
Precluded.--Benefits under an employee pension benefit plan may not 
vary based on the amount of benefits received by a participant or 
beneficiary under an applicable worker's compensation law, unemployment 
compensation law, or disability insurance law, or on whether the 
participant or beneficiary is entitled to such benefits.''.

SEC. 202. SPOUSAL CONSENT REQUIRED FOR DISTRIBUTIONS FROM DEFINED 
              CONTRIBUTION PLANS.

    (a) In General.--Section 205(b) of the Employee Retirement Income 
Security Act of 1974 (29 U.S.C. 1055(b)) is amended to read as follows:
    ``(b)(1) This section shall apply to any defined benefit plan and 
to any individual account plan.
    ``(2) This section shall not apply to a plan which the Secretary of 
the Treasury or his delegate has determined is a plan described in 
section 404(c) of the Internal Revenue Code of 1986 (or a continuation 
thereof) in which participation is substantially limited to individuals 
who, before January 1, 1976, ceased employment covered by the plan.''
    (b) Hardship Distribution.--Section 205 of such Act (29 U.S.C. 
1055) is amended by adding at the end the following new subsection:
    ``(m) This section shall not apply to a hardship distribution under 
section 401(k)(2)(B)(i)(IV) of the Internal Revenue Code of 1986.''
    (c) Special Rule for Cash-Outs.--Section 205(g) of such Act (29 
U.S.C. 1055(g)) is amended by adding at the end the following new 
paragraph:
            ``(4) Special rule for defined contribution plans.--
                    ``(A) In general.--In the case of an individual 
                account plan, notwithstanding paragraph (2), if the 
                present value of the qualified joint and survivor 
                annuity or the qualified preretirement survivor annuity 
                exceeds $10,000, the plan may immediately distribute 50 
                percent of the present value of such annuity to each 
                spouse, subject to the requirements of section 203(f) 
                as if each spouse were a participant.
                    ``(B) Exception.--The plan may distribute a 
                different percentage of the present value of an annuity 
                to each spouse if a court order or contractual 
                agreement between the spouses provides for such 
                different percentage.''

SEC. 203. MODIFICATIONS OF JOINT AND SURVIVOR ANNUITY REQUIREMENTS.

    (a) Amount of Annuity.--
            (1) In general.--Paragraph (1) of section 205(a) of the 
        Employee Retirement Income Security Act of 1974 (29 U.S.C. 
        1055(a)) is amended by inserting ``or, at the election of the 
        participant, shall be provided in the form of a qualified joint 
        and 75 percent survivor annuity'' after ``survivor annuity,''.
            (2) Definition.--Subsection (d) of section 205 of such Act 
        (29 U.S.C. 1055) is amended--
                    (A) by redesignating paragraphs (1) and (2) as 
                subparagraphs (A) and (B), respectively,
                    (B) by inserting ``(1)'' after ``(d)'', and
                    (C) by adding, after subparagraph B, the following 
                new paragraph:
    ``(2) For purposes of this section, the term `qualified joint and 
75 percent survivor annuity' means a joint and survivor annuity under 
which the survivor annuity for the life of the surviving spouse is 
equal to at least 75 percent of the amount of the annuity which is 
payable during the joint lives of the participant and spouse.''
            (3) Conforming amendments.--
                    (A) Paragraph (1) of section 205(c) of such Act (29 
                U.S.C. 1055) is amended by inserting ``or qualified 
                joint and 75 percent survivor annuity'' after 
                ``qualified joint and survivor annuity''.
                    (B) Subsection (e)(1) of such Act is amended by 
                inserting ``or, if the participant has so elected, a 
                qualified joint and 75 percent survivor annuity'' after 
                ``qualified joint and survivor annuity'' each time it 
                appears.
    (b) Illustration Requirement.--Clause (i) of section 205(c)(3)(A) 
of such Act (29 U.S.C. 1055(c)(3)(A)) is amended to read as follows:
            ``(i) the terms and conditions of each qualified joint and 
        survivor annuity and qualified joint and 75 percent survivor 
        annuity offered, accompanied by an illustration of the benefits 
        under each such annuity for the particular participant and 
        spouse and an acknowledgement form to be signed by the 
        participant and the spouse that they have read and considered 
        the illustration before any form of retirement benefit is 
        chosen.''.

SEC. 204. DIVISION OF PENSION BENEFITS UPON DIVORCE.

    (a) In General.--Section 206(d)(3) of the Employee Retirement 
Income Security Act of 1974 (29 U.S.C. 1056(d)(3)) is amended by 
redesignating subparagraph (N) as subparagraph (O) and by inserting 
after subparagraph (M) the following new subparagraph:
                    ``(N) Special rules and procedures for domestic 
                relations orders not specifying division of pension 
                benefits.--
                            ``(i) In general.--In any case in which--
                                    ``(I) a domestic relations order 
                                (including an annulment or other order 
                                of marital dissolution) relates to 
                                provision of marital property with 
                                respect to a marriage of at least 5 
                                years duration between an individual 
                                who is a participant in a pension plan 
                                and such individual's former spouse,
                                    ``(II) such order, and all prior 
                                orders (if any) described in subclause 
                                (I) relating to such marriage, do not 
                                specifically provide that pension 
                                benefits were considered by the parties 
                                and that no division of such benefits 
                                is intended,
                                    ``(III) such order is not a 
                                qualified domestic relations order (as 
                                determined without regard to this 
                                subparagraph) and there is no other 
                                prior qualified domestic relations 
                                order issued in connection with the 
                                dissolution of the marriage to which 
                                such order relates, and
                                    ``(IV) the former spouse notifies 
                                the plan within the period prescribed 
                                under clause (vii) that the former 
                                spouse is entitled to benefits under 
                                the plan in accordance with the 
                                provisions of this subparagraph,
                        such domestic relations order shall be treated 
                        as a qualified domestic relations order for 
                        purposes of this paragraph.
                            ``(ii) Amount of benefit.--Any domestic 
                        relations order treated as a qualified domestic 
                        relations order under clause  (i) shall be 
treated as specifying that the former spouse is entitled to the 
applicable percentage of the marital share of the participant's accrued 
benefit.
                            ``(iii) Marital share.--For purposes of 
                        clause (ii), the marital share of a 
                        participant's accrued benefit is an amount 
                        equal to the product of--
                                    ``(I) such benefit as of the date 
                                of the first payment under the plan (to 
                                the extent such accrued benefit is 
                                vested on the date of the dissolution 
                                of the marriage or any later date), and
                                    ``(II) a fraction, the numerator of 
                                which is the period of participation by 
                                the participant under the plan starting 
                                with the date of marriage and ending 
                                with the date of dissolution of 
                                marriage, and the denominator of which 
                                is the total period of participation by 
                                the participant under the plan.
                            ``(iv) Applicable percentage.--For purposes 
                        of clause (ii), the applicable percentage is--
                                    ``(I) except as provided in 
                                subclause (II), 50 percent, and
                                    ``(II) in the case of a participant 
                                who fails to provide the plan with 
                                notice of a domestic relations order 
                                within the time prescribed under clause 
                                (v), 67 percent.
                            ``(v) Notice by participant.--Each 
                        participant in a pension plan shall, within 60 
                        days after the dissolution of the marriage of 
                        the participant--
                                    ``(I) notify the plan administrator 
                                of the plan of such dissolution, and
                                    ``(II) provide to the plan 
                                administrator a copy of the domestic 
                                relations order (including an annulment 
                                or other order of marital dissolution) 
                                providing for such dissolution and the 
                                last known address of the participant's 
                                former spouse.
                            ``(vi) Notice by plan administrator.--Each 
                        plan administrator receiving notice under 
                        clause (v) shall promptly notify the former 
                        spouse of a participant of such spouse's rights 
                        under this subparagraph, including the time 
                        period within which such spouse is required to 
                        notify the plan of the spouse's intention to 
                        claim rights under this subparagraph.
                            ``(vii) Notice by former spouse.--A former 
                        spouse may notify the plan administrator of 
                        such spouse's intent to claim rights under this 
                        subparagraph at any time before the last day of 
                        the 1-year period following receipt of notice 
                        under clause (vi).
                            ``(viii) Coordination with plan 
                        procedures.--The determination under 
                        subparagraph (G)(i)(II) with respect to a 
                        domestic relations order to which this 
                        subparagraph applies shall be made within a 
                        reasonable period of time after the plan 
                        administrator receives the notice described in 
                        clause (vii).
                            ``(ix) Interpretation as qualified domestic 
                        relations order.--Each plan shall establish 
                        reasonable rules for determining how any such 
                        deemed domestic relations order is to be 
                        interpreted under the plan so as to constitute 
                        a qualified domestic relations order that 
                        satisfies subparagraphs (C) through (E) (and a 
                        copy of such rules shall be provided to such 
                        former spouse promptly after delivery of the 
                        divorce decree). Such rules--
                                    ``(I) may delay the effect of such 
                                an order until the earlier of the date 
                                the participant is fully vested or has 
                                terminated employment,
                                    ``(II) may allow the former spouse 
                                to be distributed immediately,
                                    ``(III) shall permit the former 
                                spouse to be paid not later than the 
                                earliest retirement age under the plan 
                                or the participant's death,
                                    ``(IV) may require the submitter of 
                                the divorce decree to present a 
                                marriage certificate or other evidence 
                                of the marriage date to assist in 
                                benefit calculations, and
                                    ``(V) may conform to the rules 
                                applicable to qualified domestic 
                                relations orders regarding form or type 
                                of benefit.''
    (b) Effective Date.--The amendment made by this section shall apply 
with respect to notifications made by former spouses pursuant to 
section 206(d)(3)(N)(vii) of the Employee Retirement Income Security 
Act of 1974 after December 31, 2001.

SEC. 205. PERIODS OF FAMILY AND MEDICAL LEAVE TREATED AS HOURS OF 
              SERVICE FOR PENSION PARTICIPATION AND VESTING.

    (a) Participation.--
            (1) In general.--Paragraph (3) of section 202(a) of the 
        Employee Retirement Income Security Act of 1974 (relating to 
        minimum participation standards) is amended by adding at the 
        end the following new subparagraph:
    ``(E)(i) For purposes of this subsection, in the case of an 
individual who is absent from work on leave required to be given to 
such individual under the Family and Medical Leave Act of 1993, the 
plan shall treat as hours of service--
            ``(I) the hours of service which otherwise would normally 
        have been credited to such individual but for such absence, or
            ``(II) in any case in which the plan is unable to determine 
        the hours described in subclause (I), 8 hours of service per 
        day of absence.
    ``(ii) The hours described in clause (i) shall be treated as hours 
of service as provided in this subparagraph--
            ``(I) only in the year in which the absence from work 
        begins, if section 203(b)(2)(E)(ii)(I) requires hours to be 
        credited to the year in which the absence from work begins, or
            ``(II) in any other case, in the immediately following 
        year.''
            (2) Coordination with treatment of maternity and paternity 
        absences under break in service rules.--Subparagraph (A) of 
        section 202(b)(5) of such Act is amended by adding at the end 
        of clause (i) the following new sentence: ``The preceding 
        sentence shall apply to an absence from work only if no part of 
        such absence is required to be given under the Family and 
        Medical Leave Act of 1993.''
    (b) Vesting.--
            (1) In general.--Paragraph (2) of section 203(b) of such 
        Act (relating to minimum vesting standards) is amended by 
        adding at the end the following new subparagraph:
    ``(E)(i) For purposes of this subsection, in the case of an 
individual who is absent from work on leave required to be given to 
such individual under the Family and Medical Leave Act of 1993, the 
plan shall treat as hours of service--
            ``(I) the hours of service which otherwise would normally 
        have been credited to such individual but for such absence, or
            ``(II) in any case in which the plan is unable to determine 
        the hours described in subclause (I), 8 hours of service per 
        day of absence.
    ``(ii) The hours described in clause (i) shall be treated as hours 
of service as provided in this subparagraph--
            ``(I) only in the year in which the absence from work 
        begins, if the participant's rights in his accrued benefit 
        derived from employer contributions are to any extent not 
        nonforfeitable and the participant would have a year of service 
        solely because the period of absence is treated as hours of 
        service as provided in clause (i); or
            ``(II) in any other case, in the immediately following 
        year.''
            (2) Coordination with treatment of maternity and paternity 
        absences under break in service rules.--Clause (i) of section 
        203(b)(3)(E) of such Act is amended by adding at the end of 
        clause (i) the following new sentence: ``The preceding sentence 
        shall apply to an absence from work only if no part of such 
        absence is required to be given under the Family and Medical 
        Leave Act of 1993.''
    (c) Application to Current Employees.--The amendments made by this 
section shall not apply to any employee who does not have at least 1 
hour of service in any plan year beginning after December 31, 2001.

SEC. 206. RIGHT OF SPOUSE TO KNOW DISTRIBUTION INFORMATION.

    Paragraph (3) of section 205(c) of the Employee Retirement Income 
Security Act of 1974 (29 U.S.C. 1055(c)(3)) is amended by adding at the 
end the following new subparagraph:
                    ``(C) Explanation to spouse.--At the time a plan 
                provides a participant with a written explanation under 
                subparagraph (A) or (B), such plan shall provide a copy 
                of such explanation to such participant's spouse. If 
                the last known address of the spouse is the same as the 
                last known address of the participant, the requirement 
                of the preceding sentence shall be treated as met if 
                the copy referred to in the preceding sentence is 
                included in a single mailing made to such address and 
                addressed to both such participant and spouse.''.

SEC. 207. REPEAL OF REDUCTION IN MILITARY SURVIVOR BENEFIT PLAN 
              ANNUITIES AT AGE 62.

    (a) Computation of Annuity for a Spouse, Former Spouse, or Child.--
Subsection (a) of section 1451 of title 10, United States Code, is 
amended--
            (1) in paragraph (1), by striking ``shall be determined as 
        follows:'' and all that follows and inserting the following: 
        ``shall be the amount equal to 55 percent of the base 
        amount.'';
            (2) in paragraph (2), by striking ``shall be determined as 
        follows:'' and all that follows and inserting the following: 
        ``shall be the amount equal to a percentage of the base amount 
        that is less than 55 percent and is determined under subsection 
        (f).''.
    (b) Annuities for Survivors of Certain Persons Dying During a 
Period of Special Eligibility for SBP.--Subsection (c)(1) of such 
section is amended by striking ``shall be determined as follows:'' and 
all that follows and inserting the following: ``shall be the amount 
equal to 55 percent of the retired pay to which the member or former 
member would have been entitled if the member or former member had been 
entitled to that pay based upon his years of active service when he 
died.''.
    (c) Repeal of Requirement for Reduction.--Such section is further 
amended by striking subsection (d).
    (d) Repeal of Unnecessary Supplemental SBP.--(1) Subchapter III of 
chapter 73 of title 10, United States Code, is repealed.
    (2) The table of subchapters at the beginning of such chapter is 
amended by striking the item relating to subchapter III.
    (e) Effective Date.--The amendments made by this section shall take 
effect on October 1, 2001, and shall apply with respect to annuity 
payments for months beginning on or after that date.

SEC. 208. SURVIVOR ANNUITIES FOR WIDOWS, WIDOWERS, AND FORMER SPOUSES 
              OF FEDERAL EMPLOYEES WHO DIE BEFORE ATTAINING AGE FOR 
              DEFERRED ANNUITY UNDER CIVIL SERVICE RETIREMENT SYSTEM.

    (a) Benefits for Widow or Widower.--Section 8341(f) of title 5, 
United States Code, is amended--
            (1) in the matter preceding paragraph (1) by--
                    (A) by inserting ``a former employee separated from 
                the service with title to deferred annuity from the 
                Fund dies before having established a valid claim for 
                annuity and is survived by a spouse, or if'' before ``a 
                Member''; and
                    (B) by inserting ``of such former employee or 
                Member'' after ``the surviving spouse'';
            (2) in paragraph (1)--
                    (A) by inserting ``former employee or'' before 
                ``Member commencing''; and
                    (B) by inserting ``former employee or'' before 
                ``Member dies''; and
            (3) in the undesignated sentence following paragraph (2)--
                    (A) in the matter preceding subparagraph (A) by 
                inserting ``former employee or'' before ``Member''; and
                    (B) in subparagraph (B) by inserting ``former 
                employee or'' before ``Member''.
    (b) Benefits for Former Spouse.--Section 8341(h) of title 5, United 
States Code, is amended--
            (1) in paragraph (1)--
                    (A) by redesignating such paragraph as paragraph 
                (1)(A); and
                    (B) by adding at the end the following:
    ``(B) Subject to paragraphs (2) through (5) of this subsection, a 
former spouse of a former employee who dies after having separated from 
the service with title to a deferred annuity under section 8338(a) but 
before having established a valid claim for annuity is entitled to a 
survivor annuity under this subsection, if and to the extent expressly 
provided for in an election under section  8339(j)(3) of this title, or 
in the terms of any decree of divorce or annulment or any court order 
or court-approved property settlement agreement incident to such 
decree.''; and
            (2) in paragraph (2)--
                    (A) in subparagraph (A)(ii) by striking ``or 
                annuitant,'' and inserting ``annuitant, or former 
                employee''; and
                    (B) in subparagraph (B)(iii) by inserting ``former 
                employee or'' before ``Member''.
    (c) Protection of Survivor Benefit Rights.--Section 8339(j)(3) of 
title 5, United States Code, is amended by adding at the end the 
following: ``The Office shall provide by regulation for the application 
of this subsection to the widow, widower, or surviving former spouse of 
a former employee who dies after having separated from the service with 
title to a deferred annuity under section 8338(a) but before having 
established a valid claim for annuity.''.
    (d) Effective Date.--The amendments made by this section shall take 
effect on the date of the enactment of this Act and shall apply only in 
the case of a former employee who dies on or after such date.

SEC. 209. ORDER OF PRECEDENCE FOR DISPOSITION OF AMOUNTS REMAINING IN 
              THE THRIFT SAVINGS ACCOUNT OF A FEDERAL EMPLOYEE (OR 
              FORMER EMPLOYEE) WHO DIES BEFORE MAKING AN EFFECTIVE 
              ELECTION CONTROLLING SUCH DISPOSITION.

    (a) In General.--Section 8433(e) of title 5, United States Code, is 
amended--
            (1) by striking ``(e)'' and inserting ``(e)(1)'';
            (2) by striking all that follows ``paid'' and inserting 
        ``in accordance with paragraph (2).''; and
            (3) by adding at the end the following:
    ``(2) An amount under paragraph (1) shall be paid in a manner 
consistent with the provisions of section 8424(d), except that, in 
applying the order of precedence under such provisions--
            ``(A) the widow or widower of the decedent shall be the 
        first party entitled to receive (instead of any designated 
        beneficiary); and
            ``(B) if there is no widow or widower, the party next 
        entitled to receive shall be the beneficiary or beneficiaries 
        designated by the employee or Member (or former employee or 
        Member) in accordance with the procedures that would otherwise 
        normally apply, subject to such additional conditions as the 
        Executive Director shall by regulation prescribe based on 
        section 205(c)(2) of the Employee Retirement Income Security 
        Act of 1974.''.
    (b) Effective Date.--This section and the amendment made by this 
section shall take effect on the 90th day after the date of the 
enactment of this Act, and shall apply in the case of any individual 
who dies on or after such 90th day.

SEC. 210. INTEREST ON AMOUNTS PAID TO MAKE UP FOR CERTAIN CIVIL SERVICE 
              ANNUITY BENEFITS WRONGFULLY DENIED.

    (a) In General.--Chapter 77 of title 5, United States Code, is 
amended by adding at the end the following:
``Sec. 7704. Interest on amounts paid to make up for certain annuity 
              benefits wrongfully denied
    ``(a) In the case of an individual who, on the basis of a timely 
appeal to the Merit Systems Protection Board under section 8347(d) or 
8461(e), or petition for judicial review under section 7703 from a 
final order or decision of the Board in any such appeal, is found by 
the relevant authority--
            ``(1) to have been affected by an erroneous application or 
        interpretation of subchapter III of chapter 83, chapter 84, or 
        any other provision of law (or any rule or regulation relating 
        thereto), and
            ``(2) to be entitled to receive an amount equal to all or 
        any part of an annuity not paid to such individual as a result 
        of such erroneous application or interpretation,
the amount under paragraph (2) may, in the discretion of such 
authority, be made payable with interest.
    ``(b) Any such interest--
            ``(1) shall be computed in such manner as the Merit Systems 
        Protection Board or the court (as the case may be) considers 
        appropriate; and
            ``(2) shall be payable out of the Civil Service Retirement 
        and Disability Fund.
    ``(c) For purposes of this section, the term `annuity' means any 
annuity (including a survivor annuity) payable out of the Civil Service 
Retirement and Disability Fund.''.
    (b) Conforming Amendments.--
            (1) Section 8348(a)(1)(A) of title 5, United States Code, 
        is amended by striking ``Fund;'' and inserting ``Fund 
        (including any interest payable under section 7704);''.
            (2) The analysis for chapter 77 of title 5, United States 
        Code, is amended by adding at the end the following:

``7704. Interest on amounts paid to make up for certain annuity 
                            benefits wrongfully denied.''.

SEC. 211. AMENDMENTS RELATING TO EFFECTIVE DATE PROVISION OF THE CIVIL 
              SERVICE RETIREMENT SPOUSE EQUITY ACT OF 1984.

    (a) Elimination of Certain Bars to Eligibility.--Section 4(b) of 
the Civil Service Retirement Spouse Equity Act of 1984 (5 U.S.C. 8341 
note) is amended--
            (1) in paragraph (1)(B)(i), by striking ``after September 
        14, 1978, and''; and
            (2) by repealing paragraph (4).
    (b) New Deadline for Applications.--
            (1) In general.--Section 4(b)(1)(B)(iv) of the Civil 
        Service Retirement Spouse Equity Act of 1984 is amended by 
        striking ``May 7, 1989'' and inserting ``May 7, 2002''.
            (2) Authority to waive deadline.--Section 4(b) of the Civil 
        Service Retirement Spouse Equity Act of 1984 is amended by 
        adding at the end the following:
    ``(6)(A) The Director of the Office of Personnel Management may 
waive the deadline under paragraph (1)(B)(iv) in any case in which the 
Director determines that the circumstances so warrant.
    ``(B) In making a determination under this paragraph, one of the 
factors which may be taken into account  is whether the individual 
involved has previously submitted a timely application under this 
section--
            ``(i) which was denied; but
            ``(ii) which, based on criteria applied under this section 
        pursuant to changes in law subsequent to the denial, would have 
        been approved.''.

               TITLE III--SIMPLIFIED INVESTMENT STANDARDS

SEC. 301. EXEMPTION FROM PROHIBITED TRANSACTION RULES FOR EMERGENT 
              TRANSACTIONS.

    (a) Amendments to the Employee Retirement Income Security Act of 
1974.--Section 408 of the Employee Retirement Income Security Act of 
1974 (29 U.S.C. 1108) is amended by adding at the end the following new 
subsection:
    ``(g)(1) Pursuant to regulations issued by the Secretary, a 
transaction between an employee benefit plan and an eligible person 
constituting the purchase or sale of a financial product which is in 
violation of a restriction imposed by section 406 or 407(a) shall be 
exempted under subsection (a) from treatment as a violation of such 
restriction if--
            ``(A) prior to engaging in the transaction, the plan 
        acquires from the eligible person a qualifying guarantee, 
        consisting of a letter of credit or other form of written 
        guarantee, issued by a bank or similar financial institution 
        (other than the eligible person requesting the exemption or an 
        affiliate) regulated and supervised by, and subject to periodic 
        examination by, an agency of a State or of the Federal 
        Government, in a stated amount equal, as of the close of 
        business on the day preceding the transaction, to not less than 
        100 percent of the amount of plan assets involved in the 
        transaction, plus interest on that amount at a rate determined 
        by the parties to the transaction, or in the absence of such 
        determination, an interest rate equal to the underpayment rate 
        defined in section 6621(a)(2) of the Internal Revenue Code of 
        1986;
            ``(B) the eligible person receives in such transaction not 
        more than reasonable compensation;
            ``(C) such transaction is expressly approved by an 
        independent fiduciary who has investment authority with respect 
        to the plan assets involved in the transaction;
            ``(D) within 60 days after the transaction, the eligible 
        person submits to the Secretary an application for an exemption 
        under subsection (a) from such restriction;
            ``(E) immediately after the acquisition of the financial 
        product--
                    ``(i) the fair market value of such financial 
                product does not exceed 1 percent of the fair market 
                value of the assets of the plan, and
                    ``(ii) the aggregate fair market value of all 
                outstanding financial products acquired by the plan 
                from the eligible person pursuant to this subsection 
                does not exceed 5 percent of the fair market value of 
                the assets of the plan;
            ``(F) the Secretary determines not to grant the exemption; 
        and
            ``(G) the transaction is reversed within 60 days after the 
        date of the Secretary's determination.
    ``(2) For purposes of this subsection--
            ``(A) a guarantee referred to in paragraph (1) is 
        `qualifying' if such guarantee is irrevocable and, under the 
        terms of the guarantee--
                    ``(i) if the Secretary grants the exemption, the 
                guarantee may expire without any payments made to the 
                plan, and
                    ``(ii) if the Secretary determines not to grant the 
                exemption, the plan has the unconditional right to 
                apply the amounts under the guarantee to any losses 
                suffered and to the payment of interest determined 
                under paragraph (1); and
            ``(B) the term `eligible person' means a person that--
                    ``(i) consists of--
                            ``(I) a bank as defined in section 
                        202(a)(2) of the Investment Advisers Act of 
                        1940,
                            ``(II) an investment adviser registered 
                        under the Investment Advisers Act of 1940,
                            ``(III) an insurance company which is 
                        qualified to do business in more than one 
                        State, or
                            ``(IV) a broker-dealer registered under the 
                        Securities Exchange Act of 1934,
                    ``(ii) has shareholders' or partners' equity in 
                excess of $1,000,000, and
                    ``(iii) is not described in section 411.''.
    (b) Effective Date.--The amendment made by this section shall apply 
with respect to transactions occurring after December 31, 2001.

SEC. 302. PROHIBITED TRANSACTION EXEMPTION FOR THE PROVISION OF 
              INVESTMENT ADVICE.

    (a) Amendments to the Employee Retirement Income Security Act of 
1974.--
            (1) In general.--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 subparagraph (B) in 
        connection with the provision of investment advice described in 
        section 3(21)(A)(ii), in any case in which--
                    ``(i) the plan provides for individual accounts and 
                permits a participant or beneficiary to exercise 
                control over assets in his or her account,
                    ``(ii) the advice is qualified investment advice 
                provided to a participant or beneficiary of the plan by 
                a fiduciary adviser in connection with any sale, 
                acquisition, or holding of a security or other property 
                for purposes of investment of plan assets, and
                    ``(iii) the requirements of subsection (g) are met 
                in connection with each instance of the provision of 
                the advice.
            ``(B) The transactions described in this subparagraph are 
        the following:
                    ``(i) the provision of the advice to the 
                participant or beneficiary;
                    ``(ii) the sale, acquisition, or holding of a 
                security or other property (including any lending of 
                money or other extension of credit 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 employee, agent, or 
                registered representative of the fiduciary adviser or 
                affiliate) in connection with the provision of the 
                advice.''.
            (2) Requirements.--Section 408 of such Act is amended 
        further by adding at the end the following new subsection:
    ``(g) Requirements for Exemption From Prohibited Transactions With 
Respect to Provision of Investment Advice.--
            ``(1) In general.--The requirements of this subsection are 
        met in connection with the provision of qualified investment 
        advice provided to a participant or beneficiary of an employee 
        benefit 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 purposes of investment of amounts held by 
        the plan, if the requirements of the following subparagraphs 
        are met:
                    ``(A) Written disclosures.--At a time 
                contemporaneous with the provision of the advice in 
                connection with the sale, acquisition, or holding of 
                the security or other property, the fiduciary adviser 
                shall provide to the recipient of the advice a clear 
                and conspicuous notification, written in a manner to be 
                reasonably understood by the average plan participant 
                pursuant to regulations which shall be prescribed by 
                the Secretary (including mathematical examples), of the 
                following:
                            ``(i) Interests held by the fiduciary 
                        adviser.--Any interest of the fiduciary adviser 
                        in, or any affiliation or contractual 
                        relationship of the fiduciary adviser (or 
                        affiliates thereof) with any third party having 
                        an interest in, the security or other property.
                            ``(ii) Related fees or compensation in 
                        connection with the provision of the advice.--
                        All fees or other compensation relating to the 
                        advice (including fees or other compensation 
                        itemized with respect to each security or other 
                        property with respect to which the advice is 
                        provided) that the fiduciary adviser (or any 
                        affiliate thereof) is to receive (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.
                            ``(iii) Ongoing fees or compensation in 
                        connection with the security or property 
                        involved.--All fees or other compensation that 
                        the fiduciary adviser (or any affiliate 
                        thereof) is to receive, on an ongoing basis, in 
                        connection with any security or other property 
                        with respect to which the fiduciary adviser 
                        gives the advice.
                            ``(iv) Applicable limitations on scope of 
                        advice.--Any limitation placed (in accordance 
                        with the requirements of this subsection) on 
                        the scope of the advice to be provided by the 
                        fiduciary adviser with respect to the sale, 
                        acquisition, or holding of the security or 
                        other property.
                            ``(v) Types of services generally 
                        offered.--The types of services offered by the 
                        fiduciary adviser in connection with the 
                        provision of qualified investment advice by the 
                        fiduciary adviser.
                            ``(vi) Fiduciary status of the fiduciary 
                        adviser.--That the fiduciary advisor is a 
                        fiduciary of the plan.
                    ``(B) Disclosure by fiduciary adviser in accordance 
                with applicable securities laws.--The fiduciary adviser 
                shall provide appropriate disclosure, in connection 
                with the sale, acquisition, or holding of the security 
                or other property, in accordance with all applicable 
                securities laws.
                    ``(C) Transaction occurring solely at direction of 
                recipient of advice.--The sale, acquisition, or holding 
                of the security or other property shall occur solely at 
                the direction of the recipient of the advice.
                    ``(D) Reasonable compensation.--The compensation 
                received by the fiduciary adviser and affiliates 
                thereof in connection with the sale, acquisition, or 
                holding of the security or other property shall be 
                reasonable.
                    ``(E) Arm's length transaction.--The terms of the 
                sale, acquisition, or holding of the security or other 
                property shall be at least as favorable to the plan as 
                an arm's length transaction would be.
            ``(2) Continued availability of information for at least 1 
        year.--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) if, 
        at any time during the 1-year period following the provision of 
        the advice, the fiduciary adviser fails to maintain the 
        information described in clauses (i) through (iv) of 
        subparagraph (A) in currently accurate form or to make the 
        information available, upon request and without charge, to the 
        recipient of the advice.
            ``(3) Evidence of compliance maintained for at least 6 
        years.--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 requirements of the preceding provisions of this subsection 
        and of subsection (b)(14) have been met. A transaction 
        prohibited under section 406 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.
            ``(4) Model disclosure forms.--The Secretary shall 
        prescribe regulations setting forth model disclosure forms to 
        assist fiduciary advisers in complying with the disclosure 
        requirements of under this subsection.
            ``(5) Exemption for employers contracting for qualified 
        investment advice.--
                    ``(A) Reliance on contractual arrangements.--
                Subject to subparagraph (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 
                requirements of this part solely by reason of the 
                provision of qualified investment advice (or solely by 
                reason  of contracting for or otherwise arranging for 
the provision of the investment advice), if--
                            ``(i) the advice is provided by a fiduciary 
                        adviser pursuant to an arrangement between the 
                        plan sponsor or other fiduciary and the 
                        fiduciary adviser for the provision by the 
                        fiduciary adviser of qualified investment 
                        advice, and
                            ``(ii) the terms of the arrangement require 
                        compliance by the fiduciary adviser with the 
                        requirements of this subsection.
                    ``(B) Continued duty for employer to prudently 
                select and review fiduciary advisers.--Nothing 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 fiduciary adviser with whom the 
                plan sponsor or other person enters into an arrangement 
                for the provision of qualified investment advice. The 
                plan sponsor or other person who is a fiduciary shall 
                not be liable under this part with respect to the 
                specific qualified investment advice given by the 
                fiduciary adviser to any particular recipient of the 
                advice. Pursuant to regulations which shall be 
                prescribed by the Secretary, the fiduciary adviser 
                shall provide appropriate disclosures to the plan 
                sponsor to enable the plan sponsor to fulfill its 
                fiduciary responsibilities under this part. In 
                connection with the provision of the advice by a 
                fiduciary adviser on an ongoing basis, such regulations 
                shall provide for such disclosures on at least an 
                annual basis.
                    ``(C) Plan assets may be used to pay reasonable 
                expenses.--Nothing in this part shall be construed to 
                preclude the use of plan assets to pay for reasonable 
                expenses in providing qualified investment advice.
            ``(6) Annual reviews by the secretary.--The Secretary shall 
        conduct annual reviews of randomly selected fiduciary advisers 
        providing qualified investment advice to participants and 
        beneficiaries. In the case of each review, the Secretary shall 
        review the following:
                    ``(A) Compliance by advice computer models with 
                generally accepted investment management principles.--
                The extent to which advice computer models employed by 
                the fiduciary adviser comply with generally accepted 
                investment management principles.
                    ``(B) Compliance with disclosure requirements.--The 
                extent to which disclosures provided by the fiduciary 
                adviser have complied with the requirements of this 
                subsection.
                    ``(C) Extent of violations.--The extent to which 
                any violations of fiduciary duties have occurred in 
                connection with the provision of the advice.
                    ``(D) Extent of reported complaints.--The extent to 
                which complaints to relevant agencies have been made in 
                connection with the provision of the advice.
        Any proprietary information obtained by the Secretary shall be 
        treated as confidential.
            ``(7) Duty of conflicted fiduciary adviser to provide for 
        alternative independent advice.--
                    ``(A) In general.--In connection with any qualified 
                investment advice provided by a fiduciary adviser to a 
                participant or beneficiary regarding any security or 
                other property, if the fiduciary adviser--
                            ``(i) has an interest in the security or 
                        other property, or
                            ``(ii) has an affiliation or contractual 
                        relationship with any third party that has an 
                        interest in the security or other property,
                the requirements of paragraph (1) shall be treated as 
                not met in connection with the advice unless the 
                fiduciary adviser has arranged, as an alternative to 
                the advice that would otherwise be provided by the 
                fiduciary advisor, for qualified investment advice with 
                respect to the security or other property provided by 
                at least one alternative investment adviser meeting the 
                requirements of subparagraph (B).
                    ``(B) Independence and qualifications of 
                alternative investment adviser.--Any alternative 
                investment adviser whose qualified investment advice is 
                arranged for by a fiduciary adviser pursuant to 
                subparagraph (A)--
                            ``(i) shall have no material interest in, 
                        and no material affiliation or contractual 
                        relationship with any third party having a 
                        material interest in, the security or other 
                        property with respect to which the investment 
                        adviser is providing the advice, and
                            ``(ii) shall meet the requirements of a 
                        fiduciary adviser under paragraph (8)(A), 
                        except that an alternative investment adviser 
                        may not be a fiduciary of the plan other than 
                        in connection with the provision of the advice.
                    ``(C) Scope and fees of alternative investment 
                advice.--Any qualified investment advice provided 
                pursuant to this paragraph by an alternative investment 
                adviser shall be of the same type and scope, and 
                provided under the same terms and conditions (including 
                no additional charge to the participant or 
                beneficiary), as apply with respect to the qualified 
                investment advice to be provided by the fiduciary 
                adviser.
            ``(8) Fiduciary adviser defined.--For purposes of this 
        subsection and subsection (b)(14)--
                    ``(A) In general.--The term `fiduciary adviser' 
                means, with respect to a plan, a person who--
                            ``(i) is a fiduciary of the plan by reason 
                        of the provision of qualified investment advice 
                        by such person to a participant or beneficiary,
                            ``(ii) meets the qualifications of 
                        subparagraph (B), and
                            ``(iii) meets the additional requirements 
                        of subparagraph (C).
                    ``(B) Qualifications.--A person meets the 
                qualifications of this subparagraph if such person--
                            ``(i) is registered as an investment 
                        adviser under the Investment Advisers Act of 
                        1940 (15 U.S.C. 80b-1 et seq.),
                            ``(ii) if not registered as an investment 
                        adviser under such Act by reason of section 
                        203A(a)(1) of such Act (15 U.S.C. 80b-
                        3a(a)(1)), is registered under the laws of the 
                        State in which the fiduciary maintains its 
                        principal office and place of business, and, at 
                        the time the fiduciary last filed the 
                        registration form most recently filed by the 
                        fiduciary with such State in order to maintain 
                        the fiduciary's registration under the laws of 
                        such State, also filed a copy of such form with 
                        the Secretary,
                            ``(iii) is registered as a broker or dealer 
                        under the Securities Exchange Act of 1934 (15 
                        U.S.C. 78a et seq.),
                            ``(iv) is a bank or similar financial 
                        institution referred to in section 408(b)(4),
                            ``(v) is an insurance company qualified to 
                        do business under the laws of a State, or
                            ``(vi) is any other comparable entity which 
                        satisfies such criteria as the Secretary 
                        determines appropriate.
                    ``(C) Additional requirements with respect to 
                certain employees or other agents of certain 
                advisers.--A person meets the additional requirements 
                of this subparagraph if every individual who is 
                employed (or otherwise compensated) by such person and 
                whose scope of duties includes the provision of 
                qualified investment advice on behalf of such person to 
                any participant or beneficiary is--
                            ``(i) a registered representative of such 
                        person,
                            ``(ii) an individual described in subclause 
                        (I), (II), or (III) of subparagraph (A)(ii), or
                            ``(iii) such other comparable qualified 
                        individual as may be designated in regulations 
                        of the Secretary.
            ``(9) Additional definitions.--For purposes of this 
        subsection and subsection (b)(14)--
                    ``(A) Qualified investment advice.--The term 
                `qualified investment advice' means, in connection with 
                a participant or beneficiary, investment advice 
                referred to in section 3(21)(A)(ii) which--
                            ``(i) consists of an individualized 
                        recommendation to the participant or 
                        beneficiary with respect to the purchase, sale, 
                        or retention of securities or other property 
                        for the individual account of the participant 
                        or beneficiary, in accordance with generally 
                        accepted investment management principles, and
                            ``(ii) takes into account all investment 
                        options under the plan.
                    ``(B) Affiliate.--The term `affiliate' of another 
                entity means an affiliated person of such entity (as 
                defined in section 2(a)(3) of the Investment 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 such 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 such entity 
                for the investment adviser referred to in such 
                section).''.
    (b) Enforcement.--
            (1) Liability for breach.--
                    (A) Liability in connection with individual account 
                plans.--Section 409 of such Act (29 U.S.C. 1109) is 
                amended by adding at the end the following new 
                subsection:
    ``(c)(1) In any case in which the provision by a fiduciary adviser 
of qualified investment advice to a participant or beneficiary 
regarding any security or other property consists of a breach described 
in subsection (a), the fiduciary adviser shall be personally liable to 
make good to the individual account of the participant or beneficiary 
any losses to the individual account resulting from the breach, and to 
restore to the individual account any profits of the fiduciary adviser 
which have been made through use of assets of the individual account 
by--
            ``(A) the fiduciary adviser, or
            ``(B) any other party with respect to whom a material 
        affiliation or contractual relationship of the fiduciary 
        adviser resulted in a violation of section 408(g)(1)(A) in 
        connection with the advice.
    ``(2) In the case of any action under this title by a participant 
or beneficiary against a fiduciary adviser for relief under this 
subsection in connection with the provision of any qualified investment 
advice--
            ``(A) if the participant or beneficiary shows that the 
        fiduciary adviser had any interest in, or had any affiliation 
        or contractual relationship with a third party having an 
        interest in, the security or other property, there shall be a 
        presumption (rebuttable by a preponderance of the evidence) 
        that the fiduciary adviser failed to meet the requirements of 
        subparagraphs (A) and (B) of section 404(a)(1) in connection 
        with the provision of the advice, and
            ``(B) the dispute may be settled by arbitration, but only 
        pursuant to terms and conditions established by agreement 
        entered into voluntarily by both parties after the commencement 
        of the dispute.
    ``(3) For purposes of this subsection, the terms `fiduciary 
adviser' and `qualified investment advice' shall have the meanings 
provided such terms in subparagraphs (A) and (B), respectively, of 
section 406(g)(7).''.
                    (B) Limitation on exemption from liability.--
                Section 403(c) of such Act (29 U.S.C. 1104(c)) is 
                amended--
                            (i) by redesignating paragraph (2) as 
                        paragraph (3) (and by adjusting the margination 
                        of such paragraph to full measure and adjusting 
                        the margination of subparagraphs (A) through 
                        (B) thereof accordingly); and
                            (ii) by inserting after paragraph (1) the 
                        following new paragraph:
    ``(2)(A) In any case in which--
            ``(i) a participant or beneficiary exercises control over 
        the assets in his or her account by means of a sale, 
        acquisition, or holding of a security or other property with 
        regard to which qualified investment advice was provided by a 
        fiduciary adviser, and
            ``(ii) any transaction in connection with the exercise of 
        such control is not a prohibited transaction solely by reason 
        of section 408(b)(14), paragraph (1) shall not apply with 
respect to the fiduciary adviser in connection with the provision of 
the advice.
    ``(B) For purposes of this subsection, the terms `fiduciary 
adviser' and `qualified investment advice' shall have the meanings 
provided such terms in subparagraphs (A) and (B), respectively, of 
section 408(g)(7).''.
            (2) Attorney's fees.--Section 502(g) of such Act (29 U.S.C. 
        1132(g)) is amended--
                    (A) in paragraph (1), by inserting ``or (3)'' after 
                ``paragraph (2)''; and
                    (B) by adding at the end the following new 
                paragraph:
    ``(3) In any action under this title by the participant or 
beneficiary against a fiduciary adviser for relief under section 409(c) 
in which the plaintiff prevails, the court shall allow a reasonable 
attorney's fee and costs of action to the prevailing plaintiff.''.
            (3) Applicability of state fraud laws.--Section 514(b) of 
        such Act (29 U.S.C. 1144(b)) is amended--
                    (A) by redesignating paragraph (9) as paragraph 
                (10); and
                    (B) by inserting after paragraph (8) the following 
                new paragraph:
    ``(9) Nothing in this title shall be construed to supersede any 
State action for fraud against a fiduciary adviser for any act or 
failure to act by the fiduciary adviser constituting a violation of 
section 409(c).''.
    (c) Effective Date.--The amendments made by this section shall 
apply with respect to advice referred to in section 3(21)(A)(ii) of the 
Employee Retirement Income Security Act of 1974 provided on or after 
January 1, 2002.

SEC. 303. PARTICIPATION OF PARTICIPANTS IN TRUSTEESHIP OF DEFINED 
              CONTRIBUTION PLANS.

    (a) In General.--Section 403(a) of the Employee Retirement Income 
Security Act of 1974 (29 U.S.C. 1103(a)) is amended--
            (1) by redesignating paragraphs (1) and (2) as 
        subparagraphs (A) and (B), respectively;
            (2) by inserting ``(1)'' after ``(a)''; and
            (3) by adding at the end the following new paragraph:
    ``(2)(A) Subject to subparagraph (B), the assets of a single-
employer plan which is a defined contribution plan and under which some 
or all of the assets are derived from employee contributions shall be 
held in trust by a joint board of trustees, which shall consist of two 
or more trustees representing on an equal basis the interests of the 
employer or employers maintaining the plan and the interests of the 
participants and their beneficiaries.
    ``(B) This paragraph shall apply for any plan year only if a 
majority of the participants of the defined contribution plan indicates 
to the plan administrator, in such form and manner as shall be 
prescribed in regulations of the Secretary, its intention to have this 
paragraph so apply.
    ``(C)(i) Except as provided in clause (ii), in any case in which 
the plan is maintained pursuant to one or more collective bargaining 
agreements between one or more employee organizations and one or more 
employers, the trustees representing the interests of the participants 
and their beneficiaries shall be designated by such employee 
organizations.
    ``(ii) Clause (i) shall not apply with respect to a plan described 
in such clause if the employee organization (or all employee 
organizations, if more than one) referred to in such clause file with 
the Secretary, in such form and manner as shall be prescribed in 
regulations of the Secretary, a written waiver of their rights under 
clause (i).
    ``(iii) In any case in which clause (i) does not apply with respect 
to a single-employer plan because the plan is not described in clause 
(i) or because of a waiver filed pursuant to clause (ii), the trustee 
or trustees representing the interests of the participants and their 
beneficiaries shall be selected in accordance with regulations of the 
Secretary. Such regulations may provide for selection of trustees by 
the employer, but only from individuals who have been demonstrated to 
be independent and to have no conflict of interest. An individual shall 
not be treated as ineligible for selection as trustee solely because 
such individual is an employee of the plan sponsor, except that the 
employee so selected may not be a highly compensated employee (as 
defined in section 414(q) of the Internal Revenue Code of 1986).
    ``(iv) The Secretary shall provide by regulation for the 
appointment of a neutral, in accordance with the procedures under 
section 203(f) of the Labor Management Relations Act, 1947 (29 U.S.C. 
173(f)), to cast votes as necessary to resolve tie votes by the 
trustees.''.
    (b) Regulations.--The Secretary of Labor shall prescribe the 
initial regulations necessary to carry out the provisions of such 
amendments not later than 90 days after the date of the enactment of 
this Act.

SEC. 304. DIVERSIFICATION IN DEFINED CONTRIBUTION INVESTMENTS.

    (a) Effective Direction of Investment by Participants and 
Beneficiaries.--Section 407(d)(3) of the Employee Retirement Income 
Security Act of 1974 (29 U.S.C. 1107(d)(3)) is amended by adding at the 
end the following:
            ``(D)(i) The term `eligible individual account plan' does 
        not include that portion of a profit-sharing plan that consists 
        of employer contributions (including elective deferrals (as 
        defined in section 402(g)(3) of the Internal Revenue Code of 
        1986) pursuant to a qualified cash or deferred arrangement (as 
        defined in section 401(k) of such Code)) and earnings allocable 
        thereto, if--
                    ``(I) under the documents and instruments governing 
                the plan, such contributions (or earnings allocable 
                thereto) are required to be invested at the direction 
                of a person other than the participant on whose behalf 
                such contributions are made to the plan (or the 
                participant's beneficiary), or
                    ``(II) the documents and instruments governing the 
                plan do not provide for effective implementation of 
                investments directed by such a participant (or 
                beneficiary) within 3 years after such direction is 
                made known to the plan.
            ``(ii) For purposes of subsection (a), such portion shall 
        be treated as a separate plan.
            ``(iii) This subparagraph shall not apply to an individual 
        account plan if the fair market value of the assets of all 
        individual account plans maintained by the employer equals not 
        more than 10 percent of the fair market value of the assets of 
        all pension plans maintained by the employer.
            ``(iv) This subparagraph shall not apply to an individual 
        account plan that is an employee stock ownership plan as 
        defined in section 409(a) or 4975(e)(7) of the Internal Revenue 
        Code or that is a stock bonus plan.''.
    (b) Diversification of Investments Under Employee Stock Ownership 
Plans by Participants and Beneficiaries Over 55 Years of Age.--Section 
206 of such Act (29 U.S.C. 1056) (as amended by sections 104 and 201) 
is amended further by adding at the end the following new subsection:
    ``(i) Diversification of Investments Under Employee Stock Ownership 
Plans by Participants and Beneficiaries Over 55 Years of Age.--
            ``(1) In general.--An employee stock ownership plan shall 
        provide that each qualified participant may elect within 90 
        days after the close of each plan year in the qualified 
        election period to direct the plan as to the investment of at 
        least 25 percent of the participant's account in the plan (to 
        the extent such portion exceeds the amount to which a prior 
        election under this subsection applies). In the case of the 
        election year in which the participant can make the 
        participant's last election, the preceding sentence shall be 
        applied by substituting `50 percent' for `25 percent'.
            ``(2) Method of meeting requirements.--A plan shall be 
        treated as meeting the requirements of paragraph (1) if--
                    ``(A) the portion of the participant's account 
                covered by the election under paragraph (1) is 
                distributed within 90 days after the period during 
                which the election may be made, or
                    ``(B) the plan offers at least 3 investment options 
                (not inconsistent with regulations prescribed by the 
                Secretary of the Treasury) to each participant making 
                an election under paragraph (1) and within 90 days 
                after the period during which the election may be made, 
                the plan invests the portion of the participant's 
                account covered by the election in accordance with such 
                election.
            ``(3) Definitions.--For purposes of this subsection--
                    ``(A) Employee stock ownership plan.--The term 
                `employee stock ownership plan' means a defined 
                contribution plan which is an employee stock ownership 
                plan (within the meaning of section 4975(e)(7) of the 
                Internal Revenue Code of 1986) or which meets the 
                requirements of section 409(a) of such Code.
                    ``(B) Qualified participant.--The term `qualified 
                participant' means any participant who has completed at 
                least 10 years of participation under the plan and has 
                attained age 55.
                    ``(C) Qualified election period.--The term 
                `qualified election period' means the 6-plan-year 
                period beginning with the later of--
                            ``(i) the first plan year in which the 
                        individual first became a qualified 
                        participant, or
                            ``(ii) the first plan year beginning after 
                        December 31, 2001.
                For purposes of the preceding sentence, an employer may 
                elect to treat an individual first becoming a qualified 
                participant in the first plan year beginning in 2002 as 
                having become a participant in the first plan year 
                beginning in 2003.''.

SEC. 305. REMOVAL OF $500,000 CAP ON BONDING REQUIREMENT.

    Section 412(a) of the Employee Retirement Income Security Act of 
1974 (29 U.S.C. 1112(a)) is amended, in the matter following paragraph 
(2), by striking ``nor more than $500,000'' and all that follows 
through ``preceding sentence''.

SEC. 306. DISCLOSURE REGARDING INVESTMENTS AND VOTING OF PROXIES.

    (a) In General.--Section 101 of the Employee Retirement Income 
Security Act of 1974 (29 U.S.C. 1021) is amended by inserting after 
subsection (e) the following new subsection:
    ``(f) Disclosure Regarding Investments and Voting of Proxies.--
            ``(1) In general.--Within 30 days after receipt by the plan 
        administrator of a written request by a participant or 
        beneficiary for relevant and specific information regarding--
                    ``(A) the nature or extent of any particular 
                investment of plan assets occurring on a particular 
                date specified in the request, or
                    ``(B) the manner in which any right to vote in 
                connection with such investment has been exercised by 
                or under the plan,
        the plan administrator shall furnish such information in 
        writing to such participant or beneficiary. The administrator 
        may make a reasonable charge to cover the cost of furnishing 
        such information.
            ``(2) Standards and review.--The Secretary shall by 
        regulation prescribe--
                    ``(A) standards which must be met by requests made 
                pursuant to this subsection, including standards 
                relating to relevancy and specificity of the 
                information requested, the specificity by which the 
                investment must be identified in the request, and the 
                reasonableness of charges made for furnishing the 
                information, and
                    ``(B) procedures by which plan administrators may 
                rely on such standards in declining requests for 
                information which fail to meet such standards, 
                including methods for obtaining timely and binding 
                determinations by the Secretary regarding whether such 
                standards are being met by particular requests.''.
    (b) Enforcement.--Section 502(c)(1) of such Act (29 U.S.C. 
1132(c)(1)) is amended by striking ``section 101(e)(1)'' and inserting 
``subsection (e)(1) or (f)(1) of section 101''.
    (c) Conforming Amendment.--Section 101(h)(1) of such Act (29 U.S.C. 
1021(h)(1)) is amended by inserting ``or subsection (f)'' after ``this 
subsection''.
    (d) Effective Date.--The amendments made by this section shall 
apply with respect to written requests received after December 31, 
2001.

     TITLE IV--IMPROVEMENTS IN PENSION INFORMATION AND ENFORCEMENT

SEC. 401. PENSION BENEFIT STATEMENTS.

    (a) Statements Required on Periodic Basis.--
            (1) In general.--Subsection (a) of section 105 of the 
        Employee Retirement Income Security Act of 1974 (29 U.S.C. 
        1025) is amended--
                    (A) by striking ``shall furnish to any plan 
                participant or beneficiary who so requests in 
                writing,'' and inserting ``shall furnish at least once 
                every 3 years, in the case of a participant in a 
                defined benefit plan who has attained age 35, and 
                annually, in the case of a defined contribution plan, 
                to each plan participant, and shall furnish to any plan 
                participant or beneficiary who so requests,'', and
                    (B) by adding at the end the following flush 
                sentence:
``Information furnished under the preceding sentence to a participant 
in a defined benefit plan (other than at the request of the 
participant) may be based on reasonable estimates determined under 
regulations prescribed by the Secretary.''.
            (2) Rule for multiemployer plans.--Subsection (d) of 
        section 105 of such Act (29 U.S.C. 1025) is amended to read as 
        follows:
    ``(d) Each administrator of a plan to which more than 1 
unaffiliated employer is required to contribute shall furnish to any 
plan participant or beneficiary who so requests in writing, a statement 
described in subsection (a).''.
    (b) Information on Investment Performance.--Section 105(a) of such 
Act (29 U.S.C. 1025(a)) is amended--
            (1) in paragraph (1), by striking ``and'';
            (2) in paragraph (2), by striking the period at the end and 
        inserting ``, and''; and
            (3) by adding at the end the following new paragraph:
            ``(3) the percentage of the net return on investment of 
        plan assets for the preceding plan year (or, with respect to 
        investments directed by the participant, the net return on 
        investment of plan assets for such year so directed), and, 
        stated separately, the administrative and transaction fees 
        incurred in connection with such investment.''.
    (c) Model Statements.--The Secretary of Labor shall develop a model 
benefit statement to be used by plan administrators in complying with 
the requirements of section 105(a) of the Employee Retirement Income 
Security Act of 1974. Such statement shall include--
            (1) the amount of nonforfeitable accrued benefits as of the 
        statement date which is payable at normal retirement age under 
        the plan,
            (2) the amount of accrued benefits which are forfeitable 
        but which may become nonforfeitable under the terms of the 
        plan,
            (3) the amount or percentage of any reduction due to 
        integration of the benefit with the participant's Social 
        Security benefits or similar governmental benefits,
            (4) information on how to contact the Social Security 
        Administration to obtain a participant's personal earnings and 
        benefit estimate statement, and
            (5) information on early retirement benefit and joint and 
        survivor annuity reductions.
    (d) Disclosure of Benefit Calculations.--
            (1) In general.--Section 105 of such Act (as amended by 
        subsections (a) and (b)) is amended further--
                    (A) by redesignating subsections (b), (c), and (d) 
                as subsections (c), (d), and (e), respectively; and
                    (B) by inserting after subsection (a) the following 
                new subsection:
    ``(b)(1) In the case of a participant or beneficiary who is 
entitled to a distribution of a benefit under an employee pension 
benefit plan, the administrator of such plan shall provide to the 
participant or beneficiary the information described in paragraph (2) 
upon the written request of the participant or beneficiary.
    ``(2) The information described in this paragraph includes--
            ``(A) a worksheet explaining how the amount of the 
        distribution was calculated and stating the assumptions used 
        for such calculation,
            ``(B) upon written request of the participant or 
        beneficiary, any documents relating to the calculation (if 
        available), and
            ``(C) such other information as the Secretary may 
        prescribe.
Any information provided under this paragraph shall be in a form 
calculated to be understood by the average plan participant.''.
            (2) Conforming amendments.--
                    (A) Section 101(a)(2) of such Act (29 U.S.C. 
                1021(a)(2)) is amended by striking ``105(a) and (c)'' 
                and inserting ``105(a), (b), and (d)''.
                    (B) Section 105(c) of such Act (as redesignated by 
                paragraph (1)(A) of this subsection) is amended by 
                inserting ``or (b)'' after ``subsection (a)''.
                    (C) Section 106(b) of such Act (29 U.S.C. 1026(b)) 
                is amended by striking ``sections 105(a) and 105(c)'' 
                and inserting ``subsections (a), (b), and (d) of 
                section 105''.

SEC. 402. DISCLOSURES TO SECRETARY OF LABOR RELATING TO PLAN 
              TERMINATION AND RELATING TO PLAN SPONSORS AFTER 
              ACQUISITION OR MERGER OF PLANS.

    (a) In General.--Section 104 of the Employee Retirement Income 
Security Act of 1974 (29 U.S.C. 1024) is amended--
            (1) by redesignating subsection (d) as subsection (e); and
            (2) by inserting after subsection (c) the following new 
        subsection:
    ``(d)(1) The administrator of any employee benefit plan subject to 
this part shall file with the Secretary a written notice of--
            ``(A) the termination of the plan, or
            ``(B) in connection with any plan that is acquired by or 
        merged with another plan, the name and address of the sponsor 
        of the acquired or merged plan.
    ``(2) The notice required under paragraph (1) shall be filed with 
the Secretary not later than 60 days after the effective date of the 
termination, acquisition, or merger.''.
    (b) Effective Date.--The amendments made by this section shall 
apply with respect to terminations, acquisitions, and mergers occurring 
after December 31, 2001.

SEC. 403. DISCLOSURE OF OPERATING INCOME OF EMPLOYERS ADJUSTED SO AS TO 
              EXCLUDE CERTAIN COMPONENTS MANDATED IN FASB RULES 
              GOVERNING ACCOUNTING FOR DEFINED BENEFIT PENSION PLANS.

    (a) Matters To Be Included in Annual Report.--Section 103(c) of the 
Employee Retirement Income Security Act of 1974 (29 U.S.C. 1023(c)) is 
amended--
            (1) by redesignating paragraph (5) as paragraph (6); and
            (2) by inserting after paragraph (4) the following new 
        paragraph:
            ``(5) In the case of a pension plan that is a defined 
        benefit plan, the amount of the annual operating income of each 
        employer maintaining the plan, as shown on the employer's most 
        recent annual financial statement, together with such amount as 
        adjusted by excluding all components of net benefit cost other 
        than the service cost component.''.
    (b) Information To Be Provided Annually to Participants and 
Beneficiaries.--Section 104(b)(3) of such Act (29 U.S.C. 1024(b)(3)) is 
amended by adding at the end the following new sentence: ``In the case 
of a defined benefit plan, such other material shall include the 
information described in paragraph (5) of section 103(c), together with 
an explanation, written in a manner calculated to be understood by the 
average plan participant, of such information, of the service cost 
component included in the adjusted amount of annual operating income 
reported pursuant to such paragraph, and of each component excluded 
from such adjusted amount of annual operating income.''.

SEC. 404. SPECIFIC INFORMATION REGARDING MULTIEMPLOYER PLANS INCLUDED 
              IN ANNUAL REPORT.

    Section 103 of the Employee Retirement Income Security Act of 1974 
(29 U.S.C. 1023) is amended by adding at the end the following new 
subsection:
    ``(f) With respect to a pension plan that is a multiemployer plan, 
an annual report under this section shall include the following 
information regarding each contributing employer:
            ``(1) the employer's name,
            ``(2) the employer's taxpayer identification number,
            ``(3) the contract period relating to the plan, and
            ``(4) the amount contributed by the employer for the 
        year.''.

SEC. 405. LIMITED SCOPE AUDITS.

    Subparagraph (C) of section 103(a)(3) of the Employee Retirement 
Income Security Act of 1974 (29 U.S.C. 1023(a)(3)(C)) is amended to 
read as follows:
    ``(C)(i) Subject to clause (ii), the opinion required by 
subparagraph (A) need not be expressed as to any statements required by 
subsection (b)(3)(G) prepared by a bank or similar institution or 
insurance carrier regulated and supervised and subject to periodic 
examination by a State or Federal agency if no less than ninety-five 
(95) percent of the plan's assets have a readily ascertainable market 
value at the end of the plan year for which the opinion is being 
offered, and if such statements--
            ``(I) are certified by the bank, similar institution or 
        insurance carrier as complete and accurate,
            ``(II) certify the current value of each asset,
            ``(III) include a representation that, within the eighteen 
        month period preceding the date of its certification, an 
        independent, qualified public accountant who has satisfied the 
        requirements of subsection (D), has issued a report, in 
        accordance with generally accepted auditing standards, to the 
        bank or similar institution or insurance carrier, stating that 
        its internal controls and procedures or the internal controls 
        and procedures of any affiliated entity, as they pertain to the 
        execution, maintenance of accountability, recording and 
        processing of transactions related to plan or participant 
        recordkeeping, are adequate, and
            ``(IV) are made a part of the annual report.
    ``(ii) To the extent that the processing of transactions related to 
plan or participant recordkeeping is performed by an entity 
unaffiliated with the bank or similar institution or insurance carrier, 
clause(i) shall not apply unless the plan has obtained a representation 
from the entity that, within the eighteen month period preceding the 
date of the opinion, an independent, qualified public accountant who 
has satisfied the requirements of subsection (D), has issued a report, 
in accordance with generally accepted auditing standards, to the entity 
stating that its internal controls and procedures, as they pertain to 
the execution, maintenance of accountability, recording and processing 
of transactions related to plan or participant recordkeeping, are 
adequate.
    ``(iii) For purposes of this subparagraph (C), the term `readily 
ascertainable market value' means a value that can be readily 
determined on an established securities market or in accordance with 
regulations promulgated by the Secretary.''.

SEC. 406. REPORTING AND ENFORCEMENT REQUIREMENTS FOR EMPLOYEE BENEFIT 
              PLANS.

    (a) In General.--Part 1 of subtitle B of title I of the Employee 
Retirement Income Security Act of 1974 (29 U.S.C. 1021 et seq.) is 
amended--
            (1) by redesignating section 111 as section 112, and
            (2) inserting after section 110 the following new section:

                  ``direct reporting of certain events

    ``Sec. 111. (a) Required Notifications.--
            ``(1) Notifications by Plan Administrator.--The 
        administrator of an employee benefit plan, within 5 business 
        days after the administrator determines that there is evidence 
        (or after the administrator is notified under paragraph (2)) 
        that an irregularity may have occurred with respect to the 
        plan, shall--
                    ``(A) notify the Secretary of the irregularity in 
                writing; and
                    ``(B) furnish a copy of such notification to the 
                accountant who is currently engaged under section 
                103(a)(3)(A).
            ``(2) Notifications by accountant.--
                    ``(A) In general.--An accountant engaged by the 
                administrator of an employee benefit plan under section 
                103(a)(3)(A), within 5 business days after the 
                accountant in connection with such engagement 
                determines that there is evidence that an irregularity 
                may have occurred with respect to the plan, shall--
                            ``(i) notify the plan administrator of the 
                        irregularity in writing, or
                            ``(ii) if the accountant determines that 
                        there is evidence that the irregularity may 
                        have involved an individual who is the plan 
                        administrator or who is a senior official of 
                        the plan administrator, notify the Secretary of 
                        the irregularity in writing.
                    ``(B) Notification Upon failure of plan 
                administrator to notify.--If an accountant who has 
                provided notification to the plan administrator 
                pursuant to subparagraph (A)(i) does not receive a copy 
                of the administrator's notification to the Secretary 
                required under paragraph (1)(B) within the 5-business-
                day period specified therein, the accountant shall 
                furnish to the Secretary a copy of the accountant's 
                notification made to the plan administrator on the next 
                business day following such period.
            ``(3) Irregularity defined.--
                    ``(A) For purposes of this subsection, the term 
                'irregularity' means--
                            ``(i) a theft, embezzlement, or a violation 
                        of section 664 of title 18, United States Code 
                        (relating to theft or embezzlement from an 
                        employee benefit plan);
                            ``(ii) an extortion or a violation of 
                        section 1951 of title 18, United States Code 
                        (relating to interference with commerce by 
                        threats or violence);
                            ``(iii) a bribery, a kickback, or a 
                        violation of section 1954 of title 18, United 
                        States Code (relating to offer, acceptance, or 
                        solicitation to influence operations of an 
                        employee benefit plan);
                            ``(iv) a violation of section 1027 of title 
                        18, United States Code (relating to false 
                        statements and concealment of facts in relation 
                        to employer benefit plan records); or-
                            ``(v) a violation of section 411, 501, or 
                        511 of this title (relating to criminal 
                        violations).
                    ``(B) The term 'irregularity' does not include any 
                act or omission described in this paragraph involving 
                less than $1,000 unless there is reason to believe that 
                the act or omission may bear on the integrity of plan 
                management.
    ``(b) Notification Upon Termination of Engagement of Accountant.--
            ``(1) Notification by plan administrator.--Within 5 
        business days after the termination of an engagement under 
        section 103(a)(3)(A) with respect to an employee benefit plan, 
        the administrator of such plan shall--
                    ``(A) notify the Secretary in writing of such 
                termination, giving the reasons for such termination, 
                and
                    ``(B) furnish the accountant whose engagement was 
                terminated with a copy of the notification sent to the 
                Secretary.
            ``(2) Notification by accountant.--If the accountant 
        referred to in paragraph (1)(B) has not received a copy of the 
        administrator's notification to the Secretary as required under 
        paragraph (1)(B), or if the accountant disagrees with the 
        reasons given in the notification of termination of the 
        engagement for auditing services, the accountant shall notify 
        the Secretary in writing of the termination, giving the reasons 
        for the termination, within 10 business days after the 
        termination of the engagement.
    ``(c) Determination of Periods Required for Notification.--In 
determining whether a notification required under this section with 
respect to any act or omission has been made within the required number 
of business days--
            ``(1) the day on which such act or omission begins shall 
        not be included; and
            ``(2) Saturdays, Sundays, and legal holidays shall not be 
        included.
For purposes of this subsection, the term 'legal holiday' means any 
Federal legal holiday and any other day appointed as a holiday by the 
State in which the person responsible for making the notification 
principally conducts business.
    ``(d) Immunity for Good Faith Notification.--Except as provided in 
this Act, no accountant or plan administrator shall be liable to any 
person for any finding, conclusion, or statement made in any 
notification made pursuant to subsections (a)(2) or (b)(2), or pursuant 
to any regulations issued under those subsections, if the finding, 
conclusion, or statement is made in good faith.''.
    (b) Civil Penalty.--
            (1) In general.--Section 502(c) (29 U.S.C. 1132(c)) is 
        amended by inserting after paragraph (6) the following new 
        paragraph:
    ``(7)(A) The Secretary may assess a civil penalty of up to $50,000 
against any administrator who fails to provide the Secretary with any 
notification as required under section 111.
    ``(B) The Secretary may assess a civil penalty of up to $50,000 
against any accountant who knowingly and willfully fails to provide the 
Secretary with any notification as required under section 111.''.
            (2) Conforming amendment.--Section 502(a)(6) (29 U.S.C. 
        1132(a)(6)) as amended by section 101(e)(2)A)(i) of the Health 
        Insurance Portability and Accountability Act of 1996, is 
        amended by striking ``or (5)'' and inserting ``(5), or (7)''.
    (c) Clerical Amendments.--
            (1) Section 514(d)(29 U.S.C. 114(d)) is amended by striking 
        ``111'' and inserting ``112''.
            (2) The table of contents in section 1 is amended by 
        striking the item relating to section 111 and inserting the 
        following new items:

``Sec. 111. Direct reporting of certain events.
``Sec. 112. Repeal and effective date.''.
    (d) Effective Date.--The amendments made by this section shall 
apply with respect to any irregularity or termination of engagement 
described in the amendments, but only if the 5-day period described in 
the amendments in connection with the irregularity or termination 
commences at least 90 days after the date of the enactment of this Act.

SEC. 407. STUDY OF PENSION TRENDS AND CHARACTERISTICS.

    (a) In General.--Section 513 of the Employee Retirement Income 
Security Act of 1974 (29 U.S.C. 1143) is amended by adding at the end 
the following new subsection:
    ``(d) Pension Surveys.--
            ``(1) In general.--The Secretary shall submit to each House 
        of the Congress, before the close of the second session of each 
        Congress, a report, based on a study of current statistical and 
        survey data, which describes dominant and emerging trends and 
        characteristics of the private pension system, so as to ensure 
        that the Congress is provided with periodic and timely 
        information regarding such system.
            ``(2) Included information.--Each report submitted pursuant 
        to paragraph (1) shall include, but not be limited to, 
        information relating to existing pension plans regarding--
                    ``(A) the types of such plans,
                    ``(B) the level of employer and employee 
                contributions,
                    ``(C) vesting status,
                    ``(D) accrued benefits,
                    ``(E) benefit receipt, and
                    ``(F) form of benefit payments.
        Such information shall be presented by category in connection 
        with cohorts defined on the basis of appropriate attributes of 
        the participants involved, including gender, age, race, and 
        income.
            ``(3) Identification of barriers to pension receipt.--Each 
        report submitted pursuant to paragraph (1) shall also include 
        information which summarizes the types of problems that plan 
        participants and beneficiaries experience in connection with 
        the receipt of promised retirement benefits.''.
    (b) Initial Report.--The initial report submitted pursuant to 
section 513(d) of the Employee Retirement Income Security Act of 1974 
shall be submitted not later than the close of the second session of 
the 107th Congress.

SEC. 408. EARLY RESOLUTION PROGRAM FOR PENSION BENEFIT CLAIMS.

    (a) In General.--Section 503 of the Employee Retirement Income 
Security Act of 1974 (29 U.S.C. 1133) is amended--
            (1) by adding at the end of the heading the following: 
        ``and early resolution of pension claims'';
            (2) by inserting ``(a) In General.--'' after ``Sec. 503.''; 
        and
            (3) by adding at the end the following new subsection:
    ``(b) Early Resolution Program for Pension Benefit Claims.--
            ``(1) In general.--The Secretary shall establish, in 
        consultation with national bar and arbitration associations and 
        other interested organizations, an early resolution program for 
        mediation of disputes regarding claims for benefits which have 
        been denied under pension plans.
            ``(2) Mediators.--The program shall provide for recruitment 
        of mediators to serve under the program from individuals who 
        have the requisite expertise for such service. The program 
        shall provide for ongoing training for all mediators in 
        employee benefits law as determined necessary. Upon submission 
        of a claim to mediation proceedings under this subsection, the 
        program shall provide for appointment of a mediator, from the 
        roster of mediators serving under the program, to act as the 
        mediator with regard to the claim. Such appointment shall be 
        through a random selection procedure which shall be prescribed 
        in regulations.
            ``(3) Fees.--The Secretary shall assess fees as necessary 
        from each party to cover the costs of participation in the 
        program. The Secretary may reduce or waive a fee on the basis 
        of inability to pay.
            ``(4) Initiation of proceedings.--A claimant with a dispute 
        which is eligible under the program for submission to mediation 
        thereunder may elect to commence proceedings under the program 
        by means of filing under the program an election for mediation 
        of the dispute. An election to commence mediation proceedings 
        under the program shall be in such form and manner as the 
        Secretary may prescribe. Any such election shall in all cases 
        be voluntary, and any provision of the plan or other 
        arrangement which has the effect of providing for the 
        commencement of such proceedings other than by means of 
        voluntary election by the claimant shall be null and void as a 
        matter of law.
            ``(5) Participation in proceedings.--Upon receipt of the 
        election to commence proceedings, the program shall provide for 
        participation by all relevant parties. Each such party shall 
        participate, and cooperate fully, in the proceedings. The plan 
        administrator shall ensure that a copy of the written record of 
        any claims procedure completed by the plan pursuant to 
        subsection (a) and all relevant plan documents are presented to 
        the mediator within 30 days after commencement of the 
        proceedings. The program shall provide for appropriate 
        confidentiality of the proceedings.
            ``(6) Time limit for proceedings.--The mediation 
        proceedings under the program with respect to the claim in 
        dispute shall be completed within 30 days after compilation of 
        all relevant plan documents relating to the claim has been 
        achieved.
            ``(7) Process nonbinding.--Findings and conclusions made in 
        the mediation proceedings under the program shall be treated as 
        advisory in nature and nonbinding. Except as provided in 
        paragraph (8), the rights of the parties under this title shall 
        not be affected by participation in the mediation proceedings 
        under the program.
            ``(8) Resolution through settlement agreement.--If a case 
        is settled through participation in the mediation proceedings 
        under the program, the mediator shall assist the parties in 
        drawing up an agreement which shall constitute, upon signature 
        of the parties, a binding contract between the parties, which 
        shall be enforceable under section 502 as if the terms of such 
        agreement were terms of the plan.
            ``(9) Oversight.--The Secretary shall provide for ongoing 
        oversight of the program so as to ensure that proceedings are 
        conducted equitably and that mediators meet prescribed 
        standards of performance. The Secretary shall monitor and 
        record the results of mediation proceedings conducted under the 
        program so as to enable comprehensive evaluation of the 
        effectiveness of the program as a means of alternative dispute 
        resolution.
            ``(10) Notice.--The Secretary shall--
                    ``(A) notify individuals of the program or other 
                sources of assistance in resolving benefits claim 
                disputes, and
                    ``(B) provide model information with respect to the 
                program to be included in all summary plan descriptions 
                and benefit determinations.''.
    (b) Effective Date.--The amendments made by this section shall 
apply with respect to claims arising on or after December 31, 2001.

SEC. 409. REVIEW OF BENEFIT DETERMINATIONS.

    (a) De Novo Review.--
            (1) Internal review.--Section 503 of the Employee 
        Retirement Income Security Act of 1974 (29 U.S.C. 1133) is 
        amended--
                    (A) by inserting ``(a)'' after ``Sec. 503.'';
                    (B) by redesignating paragraph (1) and (2) as 
                subparagraphs (A) and (B), respectively; and
                    (C) by adding at the end the following new 
                paragraph:
    ``(2) Any review required under paragraph (1)(B)--
            ``(A) shall be de novo, and
            ``(B) shall be conducted by an individual who did not make 
        the initial decision denying the claim and who is authorized to 
        approve payment of the claim.''.
            (2) Court review.--Section 502(e) of such Act (29 U.S.C. 
        1132(e)) is amended by adding at the end the following new 
        paragraph:
    ``(2) Notwithstanding any provision by the plan for the exercise by 
a fiduciary of discretionary authority with respect to any benefit 
determination, in any action under paragraph (1)(B) or (3) of 
subsection (a) or in any other action under this section to review a 
final benefit determination under the plan, the review by the court 
shall be de novo, and the court may review all evidence presented.''.
    (b) Application of Common Law Principles of Contract 
Interpretation.--Section 502(e) of such Act (as amended by subsection 
(a)(2)) is amended further by adding at the end thereof the following 
new paragraph:
    ``(3) In interpreting the terms of an employee benefit plan under 
this section, the court shall employ such common law principles of 
contract interpretation as are determined appropriate by the court. 
Nothing in this title shall preclude the Federal courts from developing 
and applying Federal common law for purposes of this paragraph which is 
consistent with the provisions of this title.''.
    (c) Effective Date.--The amendments made by this section shall 
apply with respect to causes of action arising after December 31, 2001.

SEC. 410. ALLOWABLE RELIEF.

    (a) Pre-Judgment Interest, Attorney Fees, and Costs of Action.--
            (1) Pre-judgment interest on unpaid benefits.--Section 
        502(a)(1)(B) of the Employee Retirement Income Security Act of 
        1974 (29 U.S.C. 1132(a)(1)(B)) is amended by inserting 
        ``(together with reasonable pre-judgment interest on unpaid 
        pension plan benefits)'' after ``to recover benefits due to him 
        under the terms of his plan''.
            (2) Attorney fees and costs of action.--Section 502(g) of 
        such Act (29 U.S.C. 1132(g)) is amended--
                    (A) in paragraph (1), by inserting ``or (3)'' after 
                ``paragraph (2)''; and
                    (B) by adding at the end the following new 
                paragraph:
    ``(3) In any action or settlement proceeding under this title with 
respect to an employee pension benefit plan brought by a participant or 
beneficiary under such plan in which the participant or beneficiary 
prevails or substantially prevails, the participant or beneficiary 
shall be entitled to reasonable attorney's fees, reasonable expert 
witness fees, and other reasonable costs relating to the action.''.
    (b) Allowance for Legal Relief.--Section 502(a) of such Act (29 
U.S.C. 1132(a)) is amended, in paragraphs (3)(B), (5)(B), and (8)(B), 
by inserting ``legal or'' before ``equitable'' each place it appears.
    (c) Effective Date.--The amendments made by this section shall 
apply with respect to causes of action arising after December 31, 2001.

SEC. 411. ASSESSMENT BY SECRETARY OF LABOR OF PENALTIES FOR FAILURES TO 
              MEET DISCLOSURE REQUIREMENTS.

    (a) In General.--Section 502(c) of the Employee Retirement Income 
Security Act of 1974 (29 U.S.C. 1132(c)) is amended to read as follows:
    ``(c)(1) The Secretary may assess a civil penalty against any 
person of up to $1,000 a day from the date of any failure or refusal by 
such person described in paragraph (2).
    ``(2) A failure or refusal described in this paragraph is any of 
the following:
            ``(A) A failure or refusal by a plan administrator to 
        comply with a request for any information which such 
        administrator is required by this title to furnish to a 
        participant or beneficiary by mailing the material requested to 
        the last known address of the requesting participant or 
        beneficiary within 30 days after such request.
            ``(B) A failure or refusal by a plan administrator to file 
        the annual report required to be filed with the Secretary under 
        section 101(b)(4). For purposes of this subparagraph, an annual 
        report that has been rejected under section 104(a)(4) for 
        failure to provide material information shall not be treated as 
        having been filed with the Secretary.
            ``(C) A failure or refusal by an employer maintaining a 
        plan to meet the notice requirement of section 101(d) with 
        respect to any participant or beneficiary.
            ``(D) A failure or refusal by a plan administrator to meet 
        the requirements of section 101(e)(1) with respect to a 
        participant or beneficiary.
            ``(E) A failure or refusal by an employer maintaining a 
        plan to meet the requirements of section 101(e)(2) with respect 
        to any person.
            ``(F) A failure or refusal by any person to meet the 
        requirements of section 101(f)(1).
            ``(G) A failure or refusal by any person to file the 
        information required to be filed by such person with the 
        Secretary under regulations prescribed pursuant to section 
        101(g).
            ``(H) A failure or refusal by a plan administrator to 
        furnish documents to the Secretary, as requested by the 
        Secretary under section 104(a)(6), within 30 days after such a 
        request.
            ``(I) A failure or refusal by a plan administrator to meet 
        the requirements of paragraph (1) or (4) of section 606.
    ``(3) For purposes of this subsection, each violation described in 
paragraph (2) with respect to any single participant, beneficiary, or 
other person shall be treated as a separate violation.
    ``(4) In the case of any failure or refusal described in paragraph 
subparagraph (A), (C), or (I) of paragraph  (2) by any administrator or 
employer with respect to any participant, beneficiary, or other person, 
such administrator or employer may, in the court's discretion, be 
liable to such participant, beneficiary, or other person in the amount 
of up to $1,000 a day from the date of such failure or refusal. Any 
liability under this paragraph shall be in addition to any liability 
imposed under paragraph (1).
    ``(5) In addition to any liability imposed under paragraph (1) or 
(4), the court may in its discretion order such other relief as it 
deems proper.
    ``(6) No liability may be imposed on any person under this 
subsection for any failure resulting from matters reasonably beyond the 
control of such person.
    ``(7) The Secretary and the Secretary of Health and Human Services 
shall maintain such ongoing consultation as may be necessary and 
appropriate to coordinate enforcement under this subsection with 
enforcement under section 1144(c)(8) of the Social Security Act.''.
    (b) Conforming Amendment.--Section 502(a)(6) of such Act (29 U.S.C. 
1132(a)(6)) is amended by striking ``under paragraph (2), (4), (5), or 
(6) of subsection (c) or under subsection (i) or (l)'' and inserting 
``under subsection (c), (i), or (l)''.
    (c) Effective Date.--The amendments made by this section shall 
apply with respect to failures and refusals occurring after December 
31, 2001.

SEC. 412. MISSING PARTICIPANTS.

    (a) In General.--Section 4050 of the Employee Retirement 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 subsections:
    ``(c) Multiemployer Plans.--The corporation shall prescribe rules 
similar to the rules in subsection (a) for multiemployer plans covered 
by this title that terminate under section 4041A.
    ``(d) Plans Not Otherwise Subject to Title.--
            ``(1) Transfer to corporation.--The plan administrator of a 
        plan described in paragraph (4) may elect to transfer a missing 
        participant's benefits to the corporation upon termination of 
        the plan.
            ``(2) Information to the corporation.--To the extent 
        provided in regulations, the plan administrator of a plan 
        described in paragraph (4) shall, upon termination of the plan, 
        provide the corporation information with respect to benefits of 
        a missing participant if the plan transfers such benefits--
                    ``(A) to the corporation, or
                    ``(B) to an entity other than the corporation or a 
                plan described in paragraph (4)(B)(ii).
            ``(3) Payment by the corporation.--If benefits of a missing 
        participant were transferred to the corporation under paragraph 
        (1), the corporation shall, upon location of the participant or 
        beneficiary, pay to the participant or beneficiary the amount 
        transferred (or the appropriate survivor benefit) either--
                    ``(A) in a single sum (plus interest), or
                    ``(B) in such other form as is specified in 
                regulations of the corporation.
            ``(4) Plans described.--A plan is described in this 
        paragraph if--
                    ``(A) the plan is a pension plan (within the 
                meaning of section 3(2))--
                            ``(i) to which the provisions of this 
                        section do not apply (without regard to this 
                        subsection), and
                            ``(ii) which is not a plan described in 
                        paragraphs (2) through (11) of section 4021(b), 
                        and
                    ``(B) at the time the assets are to be distributed 
                upon termination, the plan--
                            ``(i) has missing participants, and
                            ``(ii) has not provided for the transfer of 
                        assets to pay the benefits of all missing 
                        participants to another pension plan (within 
                        the meaning of section 3(2)).
            ``(5) Certain provisions not to apply.--Subsections (a)(1) 
        and (a)(3) shall not apply to a plan described in paragraph 
        (4).''.
    (b) Conforming Amendments.--Section 206(f) of the Employee 
Retirement Income Security Act of 1974 (29 U.S.C. 1056(f)) is amended--
            (1) by striking ``title IV'' and inserting ``section 
        4050'', and
            (2) by striking ``the plan shall provide that,''.
    (c) Effective Date.--The amendments made by this section shall 
apply to distributions made after 1 year after the date of the 
enactment of this Act.

SEC. 413. FIDUCIARY DUTIES WITH RESPECT TO CHANGES IN INVESTMENT 
              OPTIONS.

    (a) In General.--Section 403(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:
    ``(3) For purposes of paragraph (1), in the case of any pension 
plan amendment changing investment options under the plan, the plan 
shall not be treated as permitting a participant or beneficiary to 
exercise control over assets in his or her account unless, under the 
terms of such amendment, the participant or beneficiary is permitted to 
retain any existing investment option with respect to any assets in his 
or her account invested pursuant to such option until such assets are 
otherwise invested by the participant or beneficiary.''.
    (b) Effective Date.--The amendment made by this section shall apply 
with respect to plan amendments adopted after the date of the enactment 
of this Act.

SEC. 414. DEPARTMENT OF LABOR REQUIRED TO PROVIDE ASSISTANCE.

    Section 506 of the Employee Retirement Income Security Act of 1974 
(29 U.S.C. 1136) is amended by adding at the end the following new 
subsection:
    ``(d) Assistance Provided by the Secretary to Participants, 
Beneficiaries, and Employee Benefit Plans.--
            ``(1) In general.--The Secretary of Labor shall--
                    ``(A) establish a program to assist participants 
                and beneficiaries in understanding their rights to 
                benefits under employee benefit plans, and
                    ``(B) to the extent feasible, assist participants 
                in obtaining such benefits, by means of--
                            ``(i) the program established pursuant to 
                        subparagraph (A), and
                            ``(ii) civil actions under section 502.
            ``(2) Interagency program.--In addition to the program 
        established pursuant to paragraph (1), the Secretary, together 
        with the Secretary of the Treasury and the heads of such other 
        appropriate Federal agencies as the Secretary deems 
        appropriate, shall establish a program which shall provide 
        for--
                    ``(A) appropriate coordination of assistance to 
                participants and beneficiaries in pursuing benefit 
                claims and obtaining necessary documents for such 
                purpose, and
                    ``(B) the issuance and publication of coordinated 
                opinions and advice on applicable Federal law and 
                regulations, and
                    ``(C) the referral of benefit claims to appropriate 
                Internal Revenue Service district offices to promote 
                compliance with applicable Federal law and regulations 
                and to regional offices of the Department of Labor to 
                promote protection of individual benefit rights.
            ``(3) Ombudsman.--The Secretary shall designate an employee 
        to serve as ombudsman in the Department of Labor for purposes 
        of coordinating and supervising the program the efforts of the 
        Department in carrying out the provisions of this subsection.
            ``(4) Volunary assistance fund.--
                    ``(A) In general.--The Secretary shall establish a 
                voluntary assistance fund which shall consist of 
                voluntary contributions from employers, employee 
                benefit plans, and other individuals for the purpose of 
                assisting the Department of Labor in carrying out the 
                provisions of this subsection.
                    ``(B) Use of funds.--Amounts received into the fund 
                shall be held in a separate trust fund and shall be 
                available for the sole purpose of carrying out the 
                provisions of this subsection.
            ``(5) Annual reports.--Not later than December 31, 2001, 
        and annually thereafter, the Secretary shall report to each 
        House of the Congress on--
                    ``(A) progress made in carrying out the provisions 
                of this subsection, and
                    ``(B) the receipts and disbursements of the 
                voluntary assistance fund for the preceding fiscal 
                year.
        The report shall include any recommendations of the Secretary 
        for improving the programs established under this subsection 
        and with respect to the feasibility and appropriateness of 
        requiring mandatory contributions to the fund.''.

SEC. 415. EXCLUSIVITY OF POWERS AND PROCEDURES APPLICABLE TO RIGHTS OR 
              CLAIMS.

    Section 502 of the Employee Retirement Income Security Act of 1974 
(29 U.S.C. 1132) is amended by adding at the end the following new 
subsection:
    ``(n) Notwithstanding any Federal statute of general applicability 
that would modify any of the powers and procedures expressly applicable 
to a right or claim arising under this title and that is not expressly 
incorporated by a provision of this title, such powers and procedures 
shall be the exclusive powers and procedures applicable to such right 
or such claim unless after such right or such claim arises the claimant 
voluntarily enters into an agreement to resolve such right or such 
claim through arbitration or another procedure.''.

    TITLE V--IMPROVED PENSION PROTECTIONS FOR THE CHANGING WORKFORCE

SEC. 501. LOANS FROM RETIREMENT PLANS FOR HEALTH INSURANCE AND JOB 
              TRAINING EXPENSES.

    (a) In General.--Section 206 of the Employee Retirement Income 
Security Act of 1974 (29 U.S.C. 1056) (as amended by sections 104, 201, 
and 308) is amended further by adding at the end the following new 
subsection:
    ``(j) Loans From Retirement Plans for Health Insurance and Job 
Training Expenses.--
            ``(1) In general.--Notwithstanding any other provision of 
        this subsection, a pension plan shall provide that a 
        participant or beneficiary who is involuntarily separated from 
        employment may, on the date of such separation, obtain a loan 
        from the plan the proceeds of which are to be used within 6 
        months after the date of such loan--
                    ``(A) for payments for insurance which constitutes 
                medical care for the participant and the participant's 
                spouse and dependents, or
                    ``(B) for job training expenses.
            ``(2) Qualified loan.--For purposes of this subsection, the 
        term `qualified loan' means a loan--
                    ``(A) which by its terms requires interest on the 
                loan to accrue not less frequently than monthly,
                    ``(B) which by its terms requires--
                            ``(i) repayment to begin not later than 18 
                        months after the date of the loan, and
                            ``(ii) repayment in full not later the date 
                        which is 36 months after the date of the loan, 
                        and
                    ``(C) which bears interest from the date of the 
                loan at a rate not less than 2 percentage points below, 
                and not more than 2 percentage points above, the rate 
                for comparable United States Treasury obligations on 
                such date.
            ``(3) Limitation on amount of loans.--The aggregate amount 
        of borrowings for a plan year shall not exceed the sum of the 
        amount of accruals (other than contributions) during the plan 
        year prior to the plan year in which the loan is made.
            ``(4) Limitation on number of loans.--Not more than 3 loans 
        to an individual under this subsection may be outstanding at 
        any time.
            ``(5) Delinquencies treated as distribution.--Any amount 
        required to be paid by a participant or beneficiary under 
        paragraph (2)(B) during  any plan year which is not paid at the 
time required to be paid, and any amount remaining unpaid as of the 
beginning of the plan year beginning after the period described in 
paragraph (2)(B)(ii), shall be treated as distributed during such plan 
year to the participant or beneficiary.''.
    (b) Prohibited Transaction Exemption.--Section 408(b) of such Act 
(29 U.S.C. 1108(b)) is amended by adding at the end the following new 
paragraph:
            ``(14) Any loan made by the plan to a disqualified person 
        who is a participant or beneficiary of the plan if such loan--
                    ``(A) is for the payment of health insurance 
                premiums or job training expenses, and
                    ``(B) meets the requirements of section 206(j).''.
    (c) Effective Date.--The amendments made by this section shall 
apply to loans made after the effective date specified in section 601.

SEC. 502. AUTOMATIC ROLLOVER UPON MANDATORY DISTRIBUTION IN EXCESS OF 
              $1,000.

    Section 206 of the Employee Retirement Income Security Act of 1974 
(29 U.S.C. 1056) (as amended by sections 104, 201, 308, and 501) is 
amended further by adding at the end the following new subsection:
    ``(k) Direct Transfers of Mandatory Distributions in Excess of 
$1,000--
            ``(1) In general.--A pension plan shall provide that if--
                    ``(A) a distribution described in paragraph (2) is 
                made, and
                    ``(B) the distributee does not elect to have such 
                distribution paid directly to an eligible retirement 
                plan and does not elect to receive the distribution 
                directly,
        the plan administrator shall make such transfer to an 
        individual retirement plan of a designated trustee or issuer 
        and shall notify the distributee in writing (either separately 
        or as part of a notice required under section 402(f) of the 
        Internal Revenue Code of 1986) that the distribution may be 
        transferred to another individual retirement plan.
            ``(2) Distribution described.--A distribution from a plan 
        is described in this paragraph if such distribution is an 
        immediate distribution of the entire nonforfeitable accrued 
        benefit of the participant and is in excess of $1,000.
            ``(3) Definitions.--For purposes of this subsection--
                    ``(A) Eligible retirement plan.--The term `eligible 
                retirement plan' has the meaning given such term by 
                section 402(c)(8)(B) of the Internal Revenue Code of 
                1986, except that a qualified trust under section 
                401(a) of such Code shall be considered an eligible 
                retirement plan only if it is a defined contribution 
                plan, the terms of which permit the acceptance of 
                rollover distributions.
                    ``(B) Individual retirement plan.--The term 
                `individual retirement plan' has the meaning given such 
                term by section 7701(a)(37) of the Internal Revenue 
                Code of 1986.''.

SEC. 503. PROMPT DISTRIBUTION FROM DEFINED CONTRIBUTION PLANS UPON 
              TERMINATION OF PARTICIPANT'S COVERED EMPLOYMENT.

    Section 206(a) of the Employee Retirement Income Security Act of 
1974 (29 U.S.C. 1056(a)) is amended--
            (1) by redesignating paragraphs (1), (2), and (3) as 
        subparagraphs (A), (B), and (C), respectively, and by inserting 
        ``(1)'' after ``(a)'';
            (2) in the first sentence, by striking ``pension plan'' and 
        inserting ``defined benefit plan'';
            (3) in the second sentence, by striking ``In the case of a 
        plan'' and inserting ``In the case of a defined benefit plan''; 
        and
            (4) by adding at the end the following new paragraph:
    ``(2)(A) Except as provided in subparagraph (B), each defined 
contribution plan shall provide that, unless the participant otherwise 
elects--
            ``(i) the payment of benefits under the plan to the 
        participant will begin not later than the 60th day after the 
        close of the plan year in which occurs the date on which the 
        participant attains the earlier of age 65 or the normal 
        retirement age specified under the plan, and
            ``(ii) in any case in which the participant terminates his 
        service with the employer prior to the date described in clause 
        (i), the participant's accrued benefit shall be distributed, in 
        the form of one or more rollover contributions under section 
        402(c), 403(a)(4), or 403(b)(8) of the Internal Revenue Code of 
        1986, clause (ii), (iii), or (iv) of section 408(d)(3)(A) of 
        such Code, section 411(a)(12) of such Code, or section 
        457(e)(16) of such Code, not later than the 60th day after the 
        date of the participant's termination of such service.
    ``(B) In any case in which immediate valuation of the participant's 
accrued benefit is not practicable, the plan may provide for a period 
of more than 60 days in lieu of the 60-day period described in clauses 
(i) and (ii) of subparagraph (A), except that any such longer period 
provided by the plan may not extend beyond 60 days after the applicable 
valuation date under the plan.''.

SEC. 504. EXTENDED PERIOD FOR RECOUPMENT OF OVERPAYMENTS.

    Section 206 of the Employee Retirement Income Security Act of 1974 
(29 U.S.C. 1056) (as amended by sections 104, 201, 308, 501(a), and 
502) is amended further by adding at the end the following new 
subsection:
    ``(l) Recoupment of Benefit Overpayments.--
            ``(1) Minimum period for recoupment.--Any minimum period 
        specified by an employee pension benefit plan during which an 
        overpayment of benefits under the plan must be repaid to the 
        plan may not be less than the 5-year period beginning on the 
        date of the overpayment.
            ``(2) Waiver permitted.--Nothing in this title shall be 
        construed to preclude the waiver by any fiduciary on behalf of 
        the plan of any overpayment of benefits to a participant or 
        beneficiary in any case in which such participant or 
        beneficiary is without  fault if recovery of the overpayment 
would defeat the purpose of this title or would be against equity and 
good conscience, and any such waiver may not be precluded under the 
terms of the plan. In making for purposes of this subsection any 
determination of whether any participant or beneficiary is without 
fault, the fiduciary shall specifically take into account any physical, 
mental, educational, or linguistic limitation such participant or 
beneficiary may have (including any lack of facility with the English 
language).''.

                      TITLE VI--GENERAL PROVISIONS

SEC. 601. GENERAL EFFECTIVE DATE.

    (a) In General.--Except as otherwise provided in this Act, and 
subject to subsection (b), the amendments made by this Act shall apply 
with respect to plan years beginning on or after January 1, 2002.
    (b) 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 before 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 ``January 1, 2002'' the date 
of the commencement of the first plan year beginning on or after the 
earlier of--
            (1) the later of--
                    (A) January 1, 2003, or
                    (B) the date on which the last of such collective 
                bargaining agreements terminates (determined without 
                regard to any extension thereof after the date of the 
                enactment of this Act), or
            (2) January 1, 2004.

SEC. 602. PLAN AMENDMENTS.

    If any amendment made by this Act requires an amendment to any 
plan, such plan amendment shall not be required to be made before the 
first plan year beginning on or after January 1, 2004, if--
            (1) during the period after such amendment made by this Act 
        takes effect and before such first plan year, the plan is 
        operated in accordance with the requirements of such amendment 
        made by this Act, and
            (2) such plan amendment applies retroactively to the period 
        after such amendment made by this Act takes effect and such 
        first plan year.
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