[Congressional Bills 107th Congress]
[From the U.S. Government Publishing Office]
[H.R. 5110 Introduced in House (IH)]







107th CONGRESS
  2d Session
                                H. R. 5110

 To provide for improved pension plan security, and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             July 12, 2002

   Ms. Jackson-Lee of Texas introduced the following bill; which was 
   referred to the Committee on Education and the Workforce, and in 
 addition to the Committees on Ways and Means, Financial Services, the 
  Judiciary, and Energy and Commerce, 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 provide for improved pension plan security, and for other purposes.

    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 ``Omnibus Corporate 
Reform and Restoration Act of 2002''.
    (b) Table of Contents.--The table of contents is as follows:

Sec. 1. Short title and table of contents.
Sec. 2. 20-percent limitation on employer stock and real property held 
                            by participant in certain individual 
                            account plans.
Sec. 3. Improvements in ability of employees to diversify assets in 
                            ESOPs.
Sec. 4. Reduction in deduction for employer matching contributions to 
                            defined contribution plans made in employer 
                            securities.
Sec. 5. Prohibited transaction exemption for the provision of 
                            investment advice.
Sec. 6. Plan investment committee.
Sec. 7. Study regarding insurance system for individual account plans.
Sec. 8. Improvement of accounting standards for special purpose 
                            entities.
Sec. 9. Periodic pension benefits statements.
Sec. 10. Report to participants and beneficiaries of trades in employer 
                            securities.
Sec. 11. Prohibition on loans to officers and directors.
Sec. 12. Priority of certain claims in bankruptcy cases.
Sec. 13. Criminal penalties for altering documents.
Sec. 14. Effective dates.

SEC. 2. 20-PERCENT LIMITATION ON EMPLOYER STOCK AND REAL PROPERTY HELD 
              BY PARTICIPANT IN CERTAIN INDIVIDUAL ACCOUNT PLANS.

    (a) In General.--Section 407 of the Employee Retirement Income 
Security Act of 1974 (29 U.S.C. 1107) is amended by adding at the end 
the following:
    ``(g) Diversification Requirements Applicable to Certain Individual 
Account Plans.--
            ``(1) In general.--An applicable individual account plan 
        shall not be treated as an eligible individual account plan (as 
        defined in subsection (d)(3)) unless the plan meets--
                    ``(A) the acquisition and holding requirements of 
                paragraph (2), and
                    ``(B) the divestment requirement of paragraph (3).
            ``(2) Acquisition and holding requirements.--
                    ``(A) In general.--A plan meets the requirements of 
                this paragraph only if--
                            ``(i) the plan may not acquire qualifying 
                        employer securities or qualifying employer real 
                        property to the extent that, immediately after 
                        the acquisition, the fair market value of all 
                        qualifying employer securities and qualifying 
                        employer real property allocated (or to be 
                        allocated) to any participant or beneficiary 
                        would exceed 20 percent of the fair market 
                        value of all assets allocated (or to be 
                        allocated) to such participant or beneficiary 
                        under the plan, and
                            ``(ii) as of the last day of any calendar 
                        quarter, the fair market value of all 
                        qualifying employer securities and qualifying 
                        employer real property allocated (or to be 
                        allocated) to any participant or beneficiary 
                        does not exceed 20 percent of the fair market 
                        value of all assets allocated (or to be 
                        allocated) to such participant or beneficiary.
                    ``(B) Election to waive requirements.--The 
                requirements of subparagraph (A) shall not apply in 
                connection with the individual account of a participant 
                or beneficiary upon the filing by such participant or 
                beneficiary with the plan administrator (in such form 
                and manner as shall be prescribed in regulations of the 
                Secretary) a written and signed notice waiving such 
                requirements, until such time as the participant or 
                beneficiary files with the plan administrator (in such 
                form and manner as shall be prescribed in such 
                regulations) a written and signed notice revoking such 
                waiver.
            ``(3) Opportunity for employee to divest employer 
        securities.--A plan meets the requirements of this paragraph if 
        each employee who has a nonforfeitable right to 100 percent of 
        the employee's accrued benefit derived from employer 
        contributions may, at any time after the 90th day following the 
        allocation of any qualifying employer securities or qualifying 
        employer real property to the employee under the plan, direct 
        the plan to divest the employee's account of such securities or 
        property and reinvest an equivalent amount in other assets.
            ``(4) Divestiture.--
                    ``(A) In general.--The Secretary shall prescribe 
                regulations under which--
                            ``(i) a plan is given a reasonable period 
                        of time to divest itself of qualifying employer 
                        securities and qualifying employer real 
                        property in order to meet the requirements of 
                        this subsection, and
                            ``(ii) in the case of a plan in which a 
                        participant or beneficiary exercises control 
                        over assets in an account, the participant is 
                        given reasonable notice of the requirement, and 
                        a reasonable period of time, to make such 
                        divestiture.
                    ``(B) Waiver in de minimis cases.--The Secretary 
                may by regulations waive the application of paragraph 
                (2)(B) in cases where the failure with respect to any 
                participant or beneficiary is de minimis and due solely 
                to market fluctuation.
            ``(5) Definitions and special rules.--For purposes of this 
        subsection--
                    ``(A) Applicable individual account plan.--The term 
                `applicable individual account plan' means an 
                individual account plan other than an employee stock 
                ownership plan as defined in section 4975(e)(7) of the 
                Internal Revenue Code of 1986.
                    ``(B) Aggregation.--All applicable individual 
                account plans (other than multiemployer plans) 
                maintained by the same employer shall be treated as a 
                single plan.
            ``(6) Transition rules.--
                    ``(A) In general.--If, as of December 31, 2002, the 
                fair market value of qualifying employer securities and 
                qualifying employer real property allocated (or to be 
                allocated) under any plan to any one participant or 
                beneficiary exceeds 20 percent of the fair market value 
                of all assets so allocated (or to be allocated), the 
                plan shall be treated as meeting the requirements of 
                paragraph (2)(B). This subparagraph shall cease to 
                apply if any such securities or property are allocated 
                after December 31, 2002, to the participant or 
                beneficiary without the requirements of paragraph 
                (2)(A) or subparagraph (B) being met.
                    ``(B) Contractual requirements.--If qualifying 
                employer securities or qualifying employer real 
                property are acquired after December 31, 2002, pursuant 
                to a contract in effect on the date of enactment of 
                this subsection and at all times thereafter, the fair 
                market value of such securities or property as of 
                December 31, 2002, shall be taken into account under 
                subparagraph (A).''
    (b) Conforming Amendment.--Section 407(b)(1) of such Act (29 U.S.C. 
1107(b)(1)) is amended by striking ``Subsection (a)'' and inserting 
``Subject to subsection (g), subsection (a)''.

SEC. 3. IMPROVEMENTS IN ABILITY OF EMPLOYEES TO DIVERSIFY ASSETS IN 
              ESOPS.

    (a) In General.--Subparagraph (B)(iii) of section 401(a)(28) of the 
Internal Revenue Code of 1986 (relating to additional requirements for 
employee stock ownerships plans) is amended--
            (1) by striking ``10 years'' and inserting ``5 years'', and
            (2) by striking ``age 55'' and inserting ``age 35''.
    (b) Trustee-to-Trustee Transfer Required.--Clause (ii) of section 
401(a)(28)(B) of such Code is amended by adding at the end the 
following new flush sentence:
                        ``In the case of a qualified participant who 
                        has not attained the age of 55 on or before the 
                        date of any distribution described in subclause 
                        (I), a plan shall be treated as meeting the 
                        requirements of subclause (I) only if such 
                        distribution is made in the form of a direct 
                        trustee-to-trustee transfer to an eligible 
                        retirement plan (as defined in paragraph 
                        (31)(D)) specified by the participant.''

SEC. 4. REDUCTION IN DEDUCTION FOR EMPLOYER MATCHING CONTRIBUTIONS TO 
              DEFINED CONTRIBUTION PLANS MADE IN EMPLOYER SECURITIES.

    Section 404(a) of the Internal Revenue Code of 1986 (relating to 
deduction for contributions of an employer to an employee trust, etc.) 
is amended by adding at the end the following:
            ``(12) Limitations on deductions for employer matching 
        contributions made in employer securities.--In the case of an 
        employer matching contribution of employer securities (as 
        defined in section 409(l)) to a defined contribution plan other 
        than an employee stock ownership plan (as defined in section 
        4975(e)(7)), the amount of the deduction allowed shall be equal 
        to 50 percent of the amount allowable without regard to this 
        paragraph.''

SEC. 5. PROHIBITED TRANSACTION EXEMPTION FOR THE PROVISION OF 
              INVESTMENT ADVICE.

    (a) Amendments to the Employee Retirement Income Security Act of 
1974.--
            (1) Exemption from prohibited transactions.--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 investment of assets of the plan is 
                subject to the direction of plan participants or 
                beneficiaries,
                    ``(ii) the advice is provided to the plan or a 
                participant or beneficiary of the plan by a 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 the provision of the advice.
            ``(B) The transactions described in this subparagraph are 
        the following:
                    ``(i) the provision of the advice to the plan, 
                participant, or beneficiary;
                    ``(ii) the sale, acquisition, or holding of a 
                security or other property (including any lending of 
                money or other extension of 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 or in connection with a sale, acquisition, or 
                holding of a security or other property pursuant to the 
                advice.''.
            (2) Requirements.--Section 408 of such Act is amended 
        further by adding at the end the following new subsection:
    ``(g) Requirements Relating to Provision of Investment Advice by 
Fiduciary Advisers.--
            ``(1) In general.--The requirements of this subsection are 
        met in connection with the provision of investment advice 
        referred to in section 3(21)(A)(ii), provided to an employee 
        benefit plan or a participant or beneficiary of an employee 
        benefit plan by a 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--
                    ``(A) in the case of the initial provision of the 
                advice with regard to the security or other property by 
                the fiduciary adviser to the plan, participant, or 
                beneficiary, the fiduciary adviser provides to the 
                recipient of the advice, at a time reasonably 
                contemporaneous with the initial provision of the 
                advice, a written notification (which may consist of 
                notification by means of electronic communication)--
                            ``(i) of all fees or other compensation 
                        relating to the advice that the fiduciary 
                        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,
                            ``(ii) of any material affiliation or 
                        contractual relationship of the fiduciary 
                        adviser or affiliates thereof in the security 
                        or other property,
                            ``(iii) of any limitation placed on the 
                        scope of the investment advice to be provided 
                        by the fiduciary adviser with respect to any 
                        such sale, acquisition, or holding of a 
                        security or other property,
                            ``(iv) of the types of services provided by 
                        the fiduciary advisor in connection with the 
                        provision of investment advice by the fiduciary 
                        adviser,
                            ``(v) that the adviser is acting as a 
                        fiduciary of the plan in connection with the 
                        provision of the advice, and
                            ``(vi) that a recipient of the advice may 
                        separately arrange for the provision of advice 
                        by another adviser, that could have no material 
                        affiliation with and receive no fees or other 
                        compensation in connection with the security or 
                        other property.
                    ``(B) the fiduciary adviser provides appropriate 
                disclosure, in connection with the sale, acquisition, 
                or holding of the security or other property, in 
                accordance with all applicable securities laws,
                    ``(C) the sale, acquisition, or holding occurs 
                solely at the direction of the recipient of the advice,
                    ``(D) the compensation received by the fiduciary 
                adviser and affiliates thereof in connection with the 
                sale, acquisition, or holding of the security or other 
                property is reasonable, and
                    ``(E) the terms of the sale, acquisition, or 
                holding of the security or other property are at least 
                as favorable to the plan as an arm's length transaction 
                would be.
            ``(2) Standards for presentation of information.--
                    ``(A) In general.--The notification required to be 
                provided to participants and beneficiaries under 
                paragraph (1)(A) shall be written in a clear and 
                conspicuous manner and in a manner calculated to be 
                understood by the average plan participant and shall be 
                sufficiently accurate and comprehensive to reasonably 
                apprise such participants and beneficiaries of the 
                information required to be provided in the 
                notification.
                    ``(B) Model form for disclosure of fees and other 
                compensation.--The Secretary shall issue a model form 
                for the disclosure of fees and other compensation 
                required in paragraph (1)(A)(i) which meets the 
                requirements of subparagraph (A).
            ``(3) Exemption conditioned on continued availability of 
        required information on request for 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) to the plan, participant, or 
        beneficiary if, at any time during the provision of advisory 
        services to the plan, participant, or beneficiary, the 
        fiduciary adviser fails to maintain the information described 
        in clauses (i) through (iv) of subparagraph (A) in currently 
        accurate form and in the manner described in paragraph (2) or 
        fails--
                    ``(A) to provide, without charge, such currently 
                accurate information to the recipient of the advice no 
                less than annually,
                    ``(B) to make such currently accurate information 
                available, upon request and without charge, to the 
                recipient of the advice, or
                    ``(C) in the event of a material change to the 
                information described in clauses (i) through (iv) of 
                paragraph (1)(A), to provide, without charge, such 
                currently accurate information to the recipient of the 
                advice at a time reasonably contemporaneous to the 
                material change in information.
            ``(4) Maintenance for 6 years of evidence of compliance.--A 
        fiduciary adviser referred to in paragraph (1) who has provided 
        advice referred to in such paragraph shall, for a period of not 
        less than 6 years after the provision of the advice, maintain 
        any records necessary for determining whether the 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.
            ``(5) Exemption for plan sponsor and certain other 
        fiduciaries.--
                    ``(A) In general.--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 investment advice referred 
                to in section 3(21)(A)(ii) (or solely by reason of 
                contracting for or otherwise arranging for the 
                provision of the 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 investment advice referred 
                        to in such section,
                            ``(ii) the terms of the arrangement require 
                        compliance by the fiduciary adviser with the 
                        requirements of this subsection, and
                            ``(iii) the terms of the arrangement 
                        include a written acknowledgment by the 
                        fiduciary adviser that the fiduciary adviser is 
                        a fiduciary of the plan with respect to the 
                        provision of the advice.
                    ``(B) Continued duty of prudent selection of 
                adviser and periodic review.--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 advice referred to in section 
                3(21)(A)(ii). The plan sponsor or other person who is a 
                fiduciary has no duty under this part to monitor the 
                specific investment advice given by the fiduciary 
                adviser to any particular recipient of the advice.
                    ``(C) Availability of plan assets for payment for 
                advice.--
                            ``(i) In general.--Nothing in this part 
                        shall be construed to preclude the use of plan 
                        assets to pay for reasonable expenses in 
                        providing investment advice referred to in 
                        section 3(21)(A)(ii).
                            ``(ii) Reimbursement for advice secured by 
                        participant or beneficiary.--In accordance such 
                        regulations as may be prescribed by the 
                        Secretary, the plan shall reimburse any 
                        participant or beneficiary for reasonable 
                        expenses incurred by the participant or 
                        beneficiary in securing investment advice 
                        referred to in section 3(21)(A)(ii) from a 
                        fiduciary adviser--
                            ``(iii) on at least one occasion during the 
                        participant's employment with the employer 
                        maintaining the plan, and
                            ``(iv) at the time of retirement or 
                        separation from service under the plan.
            ``(7) Definitions.--For purposes of this subsection and 
        subsection (b)(14)--
                    ``(A) Fiduciary adviser.--The term `fiduciary 
                adviser' means, with respect to a plan, a person who is 
                a fiduciary of the plan by reason of the provision of 
                investment advice by the person to the plan or to a 
                participant or beneficiary and who is--
                            ``(i) registered as an investment adviser 
                        under the Investment Advisers Act of 1940 (15 
                        U.S.C. 80b-1 et seq.) or under the laws of the 
                        State in which the fiduciary maintains its 
                        principal office and place of business,
                            ``(ii) a bank or similar financial 
                        institution referred to in section 408(b)(4), 
                        but only if the advice is provided through a 
                        trust department of the bank or similar 
                        financial institution which is subject to 
                        periodic examination and review by Federal or 
                        State banking authorities,
                            ``(iii) an insurance company qualified to 
                        do business under the laws of a State,
                            ``(iv) a person registered as a broker or 
                        dealer under the Securities Exchange Act of 
                        1934 (15 U.S.C. 78a et seq.),
                            ``(v) an affiliate of a person described in 
                        any of clauses (i) through (iv), or
                            ``(vi) an employee, agent, or registered 
                        representative of a person described in any of 
                        clauses (i) through (v) who satisfies the 
                        requirements of applicable insurance, banking, 
                        and securities laws relating to the provision 
                        of the advice.
                    ``(B) Affiliate.--The term `affiliate' of another 
                entity means an affiliated person of the entity (as 
                defined in section 2(a)(3) of the 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 the entity for the broker or dealer 
                referred to in such section) or a person described in 
                section 202(a)(17) of the Investment Advisers Act of 
                1940 (15 U.S.C. 80b-2(a)(17)) (substituting the entity 
                for the investment adviser referred to in such 
                section).''.
    (b) Amendments to the Internal Revenue Code of 1986.--
            (1) Exemption from prohibited transactions.--Subsection (d) 
        of section 4975 of the Internal Revenue Code of 1986 (relating 
        to exemptions from tax on prohibited transactions) is amended--
                    (A) in paragraph (14), by striking ``or'' at the 
                end;
                    (B) in paragraph (15), by striking the period at 
                the end and inserting ``; or''; and
                    (C) by adding at the end the following new 
                paragraph:
            ``(16) any transaction described in subsection (f)(7)(A) in 
        connection with the provision of investment advice described in 
        subsection (e)(3)(B), in any case in which--
                    ``(A) the investment of assets of the plan is 
                subject to the direction of plan participants or 
                beneficiaries,
                    ``(B) the advice is provided to the plan or a 
                participant or beneficiary of the plan by a fiduciary 
                adviser in connection with any sale, acquisition, or 
                holding of a security or other property for purposes of 
                investment of plan assets, and
                    ``(C) the requirements of subsection (f)(7)(B) are 
                met in connection with the provision of the advice.''.
            (2) Allowed transactions and requirements.--Subsection (f) 
        of such section 4975 (relating to other definitions and special 
        rules) is amended by adding at the end the following new 
        paragraph:
            ``(7) Provisions relating to investment advice provided by 
        fiduciary advisers.--
                    ``(A) Transactions allowable in connection with 
                investment advice provided by fiduciary advisers.--The 
                transactions referred to in subsection (d)(16), in 
                connection with the provision of investment advice by a 
                fiduciary adviser, are the following:
                            ``(i) the provision of the advice to the 
                        plan, participant, or beneficiary;
                            ``(ii) the sale, acquisition, or holding of 
                        a security or other property (including any 
                        lending of money or other extension of 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 or 
                        in connection with a sale, acquisition, or 
                        holding of a security or other property 
                        pursuant to the advice.
                    ``(B) Requirements relating to provision of 
                investment advice by fiduciary advisers.--The 
                requirements of this subparagraph (referred to in 
                subsection (d)(16)(C)) are met in connection with the 
                provision of investment advice referred to in 
                subsection (e)(3)(B), provided to a plan or a 
                participant or beneficiary of a plan by a fiduciary 
                adviser with respect to the plan in connection with any 
                sale, acquisition, or holding of a security or other 
                property for purposes of investment of amounts held by 
                the plan, if--
                            ``(i) in the case of the initial provision 
                        of the advice with regard to the security or 
                        other property by the fiduciary adviser to the 
                        plan, participant, or beneficiary, the 
                        fiduciary adviser provides to the recipient of 
                        the advice, at a time reasonably 
                        contemporaneous with the initial provision of 
                        the advice, a written notification (which may 
                        consist of notification by means of electronic 
                        communication)--
                                    ``(I) of all fees or other 
                                compensation relating to the advice 
                                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,
                                    ``(II) of any material affiliation 
                                or contractual relationship of the 
                                fiduciary adviser or affiliates thereof 
                                in the security or other property,
                                    ``(III) of any limitation placed on 
                                the scope of the investment advice to 
                                be provided by the fiduciary adviser 
                                with respect to any such sale, 
                                acquisition, or holding of a security 
                                or other property,
                                    ``(IV) of the types of services 
                                provided by the fiduciary advisor in 
                                connection with the provision of 
                                investment advice by the fiduciary 
                                adviser, and
                                    ``(V) that the adviser is acting as 
                                a fiduciary of the plan in connection 
                                with the provision of the advice,
                            ``(ii) the fiduciary adviser provides 
                        appropriate disclosure, in connection with the 
                        sale, acquisition, or holding of the security 
                        or other property, in accordance with all 
                        applicable securities laws,
                            ``(iii) the sale, acquisition, or holding 
                        occurs solely at the direction of the recipient 
                        of the advice,
                            ``(iv) the compensation received by the 
                        fiduciary adviser and affiliates thereof in 
                        connection with the sale, acquisition, or 
                        holding of the security or other property is 
                        reasonable, and
                            ``(v) the terms of the sale, acquisition, 
                        or holding of the security or other property 
                        are at least as favorable to the plan as an 
                        arm's length transaction would be.
                    ``(C) Standards for presentation of information.--
                The notification required to be provided to 
                participants and beneficiaries under subparagraph 
                (B)(i) shall be written in a clear and conspicuous 
                manner and in a manner calculated to be understood by 
                the average plan participant and shall be sufficiently 
                accurate and comprehensive to reasonably apprise such 
                participants and beneficiaries of the information 
                required to be provided in the notification.
                    ``(D) Exemption conditioned on making required 
                information available annually, on request, and in the 
                event of material change.--The requirements of 
                subparagraph (B)(i) shall be deemed not to have been 
                met in connection with the initial or any subsequent 
                provision of advice described in subparagraph (B) to 
                the plan, participant, or beneficiary if, at any time 
                during the provision of advisory services to the plan, 
                participant, or beneficiary, the fiduciary adviser 
                fails to maintain the information described in 
                subclauses (I) through (IV) of subparagraph (B)(i) in 
                currently accurate form and in the manner required by 
                subparagraph (C), or fails--
                            ``(i) to provide, without charge, such 
                        currently accurate information to the recipient 
                        of the advice no less than annually,
                            ``(ii) to make such currently accurate 
                        information available, upon request and without 
                        charge, to the recipient of the advice, or
                            ``(iii) in the event of a material change 
                        to the information described in subclauses (I) 
                        through (IV) of subparagraph (B)(i), to 
                        provide, without charge, such currently 
                        accurate information to the recipient of the 
                        advice at a time reasonably contemporaneous to 
                        the material change in information.
                    ``(E) Maintenance for 6 years of evidence of 
                compliance.--A fiduciary adviser referred to in 
                subparagraph (B) who has provided advice referred to in 
                such subparagraph shall, for a period of not less than 
                6 years after the provision of the advice, maintain any 
                records necessary for determining whether the 
                requirements of the preceding provisions of this 
                paragraph and of subsection (d)(16) have been met. A 
                transaction prohibited under subsection (c)(1) shall 
                not be considered to have occurred solely because the 
                records are lost or destroyed prior to the end of the 
                6-year period due to circumstances beyond the control 
                of the fiduciary adviser.
                    ``(F) Exemption for plan sponsor and certain other 
                fiduciaries.--A plan sponsor or other person who is a 
                fiduciary (other than a fiduciary adviser) shall not be 
                treated as failing to meet the requirements of this 
                section solely by reason of the provision of investment 
                advice referred to in subsection (e)(3)(B) (or solely 
                by reason of contracting for or otherwise arranging for 
                the provision of the advice), if--
                            ``(i) the advice is provided by a 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 investment advice referred 
                        to in such section,
                            ``(ii) the terms of the arrangement require 
                        compliance by the fiduciary adviser with the 
                        requirements of this paragraph,
                            ``(iii) the terms of the arrangement 
                        include a written acknowledgment by the 
                        fiduciary adviser that the fiduciary adviser is 
                        a fiduciary of the plan with respect to the 
                        provision of the advice, and
                            ``(iv) the requirements of part 4 of 
                        subtitle B of title I of the Employee 
                        Retirement Income Security Act of 1974 are met 
                        in connection with the provision of such 
                        advice.
                    ``(G) Definitions.--For purposes of this paragraph 
                and subsection (d)(16)--
                            ``(i) Fiduciary adviser.--The term 
                        `fiduciary adviser' means, with respect to a 
                        plan, a person who is a fiduciary of the plan 
                        by reason of the provision of investment advice 
                        by the person to the plan or to a participant 
                        or beneficiary and who is--
                                    ``(I) registered as an investment 
                                adviser under the Investment Advisers 
                                Act of 1940 (15 U.S.C. 80b-1 et seq.) 
                                or under the laws of the State in which 
                                the fiduciary maintains its principal 
                                office and place of business,
                                    ``(II) a bank or similar financial 
                                institution referred to in subsection 
                                (d)(4),
                                    ``(III) an insurance company 
                                qualified to do business under the laws 
                                of a State,
                                    ``(IV) a person registered as a 
                                broker or dealer under the Securities 
                                Exchange Act of 1934 (15 U.S.C. 78a et 
                                seq.),
                                    ``(V) an affiliate of a person 
                                described in any of subclauses (I) 
                                through (IV), or
                                    ``(VI) an employee, agent, or 
                                registered representative of a person 
                                described in any of subclauses (I) 
                                through (V) who satisfies the 
                                requirements of applicable insurance, 
                                banking, and securities laws relating 
                                to the provision of the advice.
                            ``(ii) Affiliate.--The term `affiliate' of 
                        another entity means an affiliated person of 
                        the entity (as defined in section 2(a)(3) of 
                        the Investment Company Act of 1940 (15 U.S.C. 
                        80a-2(a)(3))).
                            ``(iii) Registered representative.--The 
                        term `registered representative' of another 
                        entity means a person described in section 
                        3(a)(18) of the Securities Exchange Act of 1934 
                        (15 U.S.C. 78c(a)(18)) (substituting the entity 
                        for the broker or dealer referred to in such 
                        section) or a person described in section 
                        202(a)(17) of the Investment Advisers Act of 
                        1940 (15 U.S.C. 80b-2(a)(17)) (substituting the 
                        entity for the investment adviser referred to 
                        in such section).''.

SEC. 6. PLAN INVESTMENT COMMITTEE.

    Section 404 of the Employee Retirement Income Security Act of 1974 
(29 U.S.C. 1104) is amended by adding at the end the following new 
subsection:
    ``(e) An individual account plan shall provide (in accordance with 
such regulations as the Secretary may prescribe) for a plan investment 
committee, the members of which shall be elected by plan participants. 
Such committee shall be currently informed by the plan administrator of 
all decisions regarding investment of plan assets. All fiduciaries of 
the plan whose duties include authority or control respecting 
management or disposition of plan assets shall regularly consult with 
the committee (in accordance with such regulations) regarding plan 
policies and decisions affecting investment of plan assets.''.

SEC. 7. STUDY REGARDING INSURANCE SYSTEM FOR INDIVIDUAL ACCOUNT PLANS.

    (a) Study.--As soon as practicable after the date of the enactment 
of this Act, the Pension Benefit Guaranty Corporation shall undertake a 
study relating to the establishment of an insurance system for 
individual account plans. In conducting such study, the Corporation 
shall consider--
            (1) the feasibility of such a system, and
            (2) options for developing such a system.
    (b) Specific Matters to Be Addressed.--Among the matters to be 
considered by the Corporation in its study, the Corporation shall 
consider--
            (1) the appropriate insurable event in connection with such 
        an insurance system;
            (2) the manner in which insurable loss should be 
        determined;
            (3) the parties who should bear the burden of the cost of 
        coverage; and
            (4) the manner in which applicable premiums should be 
        measured and whether premiums should be variable in relation to 
        particular groups of plans, based on the extent of investment 
        diversification or other factors.
    (c) Report.--Not later than 3 years after the date of the enactment 
of this Act, the Corporation shall report the results of its study, 
together with any recommendations for legislative changes, to the 
Committee on Education and the Workforce and the Committee on Ways and 
Means of the House of Representatives and the Committee on Health, 
Education, Labor, and Pensions of the Senate.

SEC. 8. IMPROVEMENT OF ACCOUNTING STANDARDS FOR SPECIAL PURPOSE 
              ENTITIES.

    (a) Commission Action Required.--Within 60 days after the date of 
enactment of this Act, the Securities and Exchange Commission shall 
direct the Financial Accounting Standards Board to revise the 
accounting standards applicable to a special purpose entity to require 
the assets and liabilities of any such entity to be included on a 
consolidated basis on the financial statements of the sponsoring issuer 
unless one or more independent third parties own and control at least 
10 percent of the total debt and equity of such entity.
    (b) Definition of Special Purpose Entity.--The term ``special 
purpose entity''--
            (1) means an entity that is created solely to carry out an 
        activity or series of transactions directly related to a 
        specific purpose;
            (2) may take on any legal form including a corporation, a 
        partnership, a limited liability company, or a trust;
            (3) are commonly used--
                    (A) as financing vehicles to which a sponsoring 
                issuer sells assets in exchange for cash or other 
                assets;
                    (B) to acquire, construct, or manufacture assets 
                that are used by another entity under leases, 
                management contracts, or other arrangements;
                    (C) to reduce the credit risk or other risks for 
                lenders or investors and, thus, lower financing costs; 
                or
                    (D) to may create certain tax advantages for the 
                participating parties.

SEC. 9. PERIODIC PENSION BENEFITS STATEMENTS.

    (a) Amendments to the Employee Retirement Income Security Act of 
1974.--
            (1) Requirements.--
                    (A) In general.--Section 105(a) of the Employee 
                Retirement Income Security Act of 1974 (29 U.S.C. 
                1025(a)) is amended to read as follows:
    ``(a)(1)(A) The administrator of an individual account plan shall 
furnish a pension benefit statement--
            ``(i) to each plan participant at least annually,
            ``(ii) to each plan beneficiary upon written request, and
            ``(iii) in the case of an applicable individual account 
        plan, to each plan participant (and to each beneficiary with a 
        right to direct investments) at least quarterly.
    ``(B) The administrator of a defined benefit plan shall furnish a 
pension benefit statement--
            ``(i) at least once every 3 years to each participant with 
        a nonforfeitable accrued benefit who is employed by the 
        employer maintaining the plan at the time the statement is 
        furnished to participants, and
            ``(ii) to a plan participant or plan beneficiary of the 
        plan upon written request.
    ``(2) A pension benefit statement under paragraph (1)--
            ``(A) shall indicate, on the basis of the latest available 
        information--
                    ``(i) the total benefits accrued, and
                    ``(ii) the nonforfeitable pension benefits, if any, 
                which have accrued, or the earliest date on which 
                benefits will become nonforfeitable,
            ``(B) shall be written in a manner calculated to be 
        understood by the average plan participant, and
            ``(C) may be provided in written form or in electronic or 
        other appropriate form to the extent that such form is 
        reasonably accessible to the recipient.
    ``(3) In the case of an applicable individual account plan, the 
requirements of paragraph (1)(A) shall be treated as met if the 
quarterly statement (together with the information required in 
subparagraphs (A) and (B) of subsection (d)(1)) is available 
electronically in reasonably accessible form, and the participant or 
beneficiary is provided at least once each year a notice that such 
statement (together with such information) is available in such form. 
Such notice shall be in written, electronic, or other appropriate form.
    ``(4)(A) In the case of a defined benefit plan, the requirements of 
paragraph (1)(B)(i) shall be treated as met with respect to a 
participant if the administrator provides the participant at least once 
each year with notice of the availability of the pension benefit 
statement and the ways in which the participant may obtain such 
statement. Such notice shall be provided in written, electronic, or 
other appropriate form, and may be included with other communications 
to the participant if done in a manner reasonably designed to attract 
the attention of the participant.
    ``(B) The Secretary may provide that years in which no employee or 
former employee benefits (within the meaning of section 410(b) of the 
Internal Revenue Code of 1986) under the plan need not be taken into 
account in determining the 3-year period under paragraph (1)(B)(i).''.
                    (B) Conforming amendments.--
                            (i) Section 105 of the Employee Retirement 
                        Income Security Act of 1974 (29 U.S.C. 1025) is 
                        amended by striking subsection (d).
                            (ii) Section 105(b) of such Act (29 U.S.C. 
                        1025(b)) is amended to read as follows:
    ``(b) In no case shall a participant or beneficiary of a plan be 
entitled to more than one statement described in clause (i) or (ii) of 
subsection (a)(1)(A) or clause (i) or (ii) of subsection (a)(1)(B), 
whichever is applicable, in any 12-month period. If such report is 
required under subsection (a) to be furnished at least quarterly, the 
requirements of the preceding sentence shall be applied with respect to 
each quarter in lieu of the 12-month period.''.
            (2) Information required from applicable individual account 
        plans.--Section 105 of such Act (as amended by paragraph (1)) 
        is amended further by adding at the end the following new 
        subsection:
    ``(d)(1) The statements required to be provided at least quarterly 
under subsection (a) shall include (together with the information 
required in subsection (a)) the following:
            ``(A) the value of investments allocated to the individual 
        account, including the value of any assets held in the form of 
        employer securities, without regard to whether such securities 
        were contributed by the plan sponsor or acquired at the 
        direction of the plan or of the participant or beneficiary, and 
        an explanation of any limitations or restrictions on the right 
        of the participant or beneficiary to direct an investment; and
            ``(B) an explanation, written in a manner calculated to be 
        understood by the average plan participant, of the importance, 
        for the long-term retirement security of participants and 
        beneficiaries, of a well-balanced and diversified investment 
        portfolio, including a discussion of the risk of holding more 
        than 25 percent of a portfolio in the security of any one 
        entity, such as employer securities.
    ``(2) The value of any employer securities that are not readily 
tradable on an established securities market that is required to be 
reported under paragraph (1)(A) may be determined by using the most 
recent valuation of the employer securities.
    ``(3) The Secretary shall issue guidance and model notices which 
meet the requirements of this subsection.''.
            (3) Definition of applicable individual account plan.--
        Section 3 of such Act (29 U.S.C. 1002) is amended by adding at 
        the end the following new paragraph:
    ``(42)(A) The term `applicable individual account plan' means any 
individual account plan, except that such term does not include an 
employee stock ownership plan (within the meaning of section 4975(e)(7) 
of the Internal Revenue Code of 1986) unless there are any 
contributions to such plan (or earnings thereunder) held within such 
plan that are subject to subsection (k)(3) or (m)(2) of section 401 of 
the Internal Revenue Code of 1986. Such term shall not include a one-
participant retirement plan.
    ``(B) The term `one-participant retirement plan' means a retirement 
plan that--
            ``(i) on the first day of the plan year--
                    ``(I) covered only the employer (and the employer's 
                spouse) and the employer owned the entire business 
                (whether or not incorporated), or
                    ``(II) covered only one or more partners (and their 
                spouses) in a business partnership (including partners 
                in an S or C corporation),
            ``(ii) meets the minimum coverage requirements of section 
        410(b) of the Internal Revenue Code of  1986 (as in effect on 
the date of the enactment of this paragraph) without being combined 
with any other plan of the business that covers the employees of the 
business,
            ``(iii) does not provide benefits to anyone except the 
        employer (and the employer's spouse) or the partners (and their 
        spouses),
            ``(iv) does not cover a business that is a member of an 
        affiliated service group, a controlled group of corporations, 
        or a group of businesses under common control, and
            ``(v) does not cover a business that leases employees.''.
            (4) Civil penalties for failure to provide quarterly 
        benefit statements.--Section 502 of such Act (29 U.S.C. 1132) 
        is amended--
                    (A) in subsection (a)(6), by striking ``(5), or 
                (6)'' and inserting ``(5), (6), or (7)'';
                    (B) by redesignating paragraph (7) of subsection 
                (c) as paragraph (8); and
                    (C) by inserting after paragraph (6) of subsection 
                (c) the following new paragraph:
    ``(7) The Secretary may assess a civil penalty against any plan 
administrator of up to $1,000 a day from the date of such plan 
administrator's failure or refusal to provide participants or 
beneficiaries with a benefit statement on at least a quarterly basis in 
accordance with section 105(a)(1)(A)(iii).''.
            (5) Model statements.--The Secretary of Labor shall, not 
        later than January 1, 2003, issue initial guidance and a model 
        benefit statement, written in a manner calculated to be 
        understood by the average plan participant, that may be used by 
        plan administrators in complying with the requirements of 
        section 105 of the Employee Retirement Income Security Act of 
        1974. Not later than 75 days after the date of the enactment of 
        this Act, the Secretary shall promulgate interim final rules 
        necessary to carry out the amendments made by this subsection.
    (b) Amendments to the Internal Revenue Code of 1986.--
            (1) Provision of investment education notices to 
        participants in certain plans.--Section 414 of the Internal 
        Revenue Code of 1986 (relating to definitions and special 
        rules) is amended by adding at the end the following:
    ``(w) Provision of Investment Education Notices to Participants in 
Certain Plans.--
            ``(1) In general.--The plan administrator of an applicable 
        pension plan shall provide to each applicable individual an 
        investment education notice described in paragraph (2) at the 
        time of the enrollment of the applicable individual in the plan 
        and not less often than annually thereafter.
            ``(2) Investment education notice.--An investment education 
        notice is described in this paragraph if such notice contains--
                    ``(A) an explanation, for the long-term retirement 
                security of participants and beneficiaries, of 
                generally accepted investment principles, including 
                principles of risk management and diversification, and
                    ``(B) a discussion of the risk of holding 
                substantial portions of a portfolio in the security of 
                any one entity, such as employer securities.
            ``(3) Understandability.--Each notice required by paragraph 
        (1) shall be written in a manner calculated to be understood by 
        the average plan participant and shall provide sufficient 
        information (as determined in accordance with guidance provided 
        by the Secretary) to allow recipients to understand such 
        notice.
            ``(4) Form and manner of notices.--The notices required by 
        this subsection shall be in writing, except that such notices 
        may be in electronic or other form (or electronically posted on 
        the plan's website) to the extent that such form is reasonably 
        accessible to the applicable individual.
            ``(5) Definitions.--For purposes of this subsection--
                    ``(A) Applicable individual.--The term `applicable 
                individual' means--
                            ``(i) any participant in the applicable 
                        pension plan,
                            ``(ii) any beneficiary who is an alternate 
                        payee (within the meaning of section 414(p)(8)) 
                        under a qualified domestic relations order 
                        (within the meaning of section 414(p)(1)(A)), 
                        and
                            ``(iii) any beneficiary of a deceased 
                        participant or alternate payee.
                    ``(B) Applicable pension plan.--The term 
                `applicable pension plan' means--
                            ``(i) a plan described in clause (i), (ii), 
                        or (iv) of section 219(g)(5)(A), and
                            ``(ii) an eligible deferred compensation 
                        plan (as defined in section 457(b)) of an 
                        eligible employer described in section 
                        457(e)(1)(A), which permits any participant to 
direct the investment of some or all of his account in the plan or 
under which the accrued benefit of any participant depends in whole or 
in part on hypothetical investments directed by the participant. Such 
term shall not include a one-participant retirement plan or a plan to 
which section 105 of the Employee Retirement Income Security Act of 
1974 applies.
                    ``(C) One-participant retirement plan defined.--The 
                term `one-participant retirement plan' means a 
                retirement plan that--
                            ``(i) on the first day of the plan year--
                                    ``(I) covered only the employer 
                                (and the employer's spouse) and the 
                                employer owned the entire business 
                                (whether or not incorporated), or
                                    ``(II) covered only one or more 
                                partners (and their spouses) in a 
                                business partnership (including 
                                partners in an S or C corporation),
                            ``(ii) meets the minimum coverage 
                        requirements of section 410(b) without being 
                        combined with any other plan of the business 
                        that covers the employees of the business,
                            ``(iii) does not provide benefits to anyone 
                        except the employer (and the employer's spouse) 
                        or the partners (and their spouses),
                            ``(iv) does not cover a business that is a 
                        member of an affiliated service group, a 
                        controlled group of corporations, or a group of 
                        businesses under common control, and
                            ``(v) does not cover a business that leases 
                        employees.
            ``(6) Cross reference.--

                                ``For provisions relating to penalty 
for failure to provide the notice required by this section, see section 
6652(m).''.
            (2) Penalty for failure to provide notice.--Section 6652 of 
        such Code (relating to failure to file certain information 
        returns, registration statements, etc.) is amended by 
        redesignating subsection (m) as subsection (n) and by inserting 
        after subsection (l) the following new subsection:
    ``(m) Failure To Provide Investment Education Notices to 
Participants in Certain Plans.--In the case of each failure to provide 
a written explanation as required by section 414(w) with respect to an 
applicable individual (as defined in such section), at the time 
prescribed therefor, unless it is shown that such failure is due to 
reasonable cause and not to willful neglect, there shall be paid, on 
notice and demand of the Secretary and in the same manner as tax, by 
the person failing to provide such notice, an amount equal to $100 for 
each such failure, but the total amount imposed on such person for all 
such failures during any calendar year shall not exceed $50,000.''.

SEC. 10. REPORT TO PARTICIPANTS AND BENEFICIARIES OF TRADES IN EMPLOYER 
              SECURITIES.

    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) In any case in which assets in the individual account of a 
participant or beneficiary under an individual account plan include 
employer securities, if any person engages in a transaction 
constituting a direct or indirect purchase or sale of employer 
securities and--
            ``(A) such transaction is required under section 16 of the 
        Securities Exchange Act of 1934 to be reported by such person 
        to the Securities and Exchange Commission, or
            ``(B) such person is a named fiduciary of the plan,
such person shall comply with the requirements of paragraph (2).
    ``(2) A person described in paragraph (1) complies with the 
requirements of this paragraph in connection with a transaction 
described in paragraph (1) if such person provides to the plan 
administrator of the plan a written notification of the transaction not 
later than 1 business day after the date of the transaction.
    ``(3)(A) If the plan administrator is made aware, on the basis of 
notifications received pursuant to paragraph (2) or otherwise, that the 
proceeds from any transaction described in paragraph (1), constituting 
direct or indirect sales of employer securities by any person described 
in paragraph (1), exceed $100,000, the plan administrator of the plan 
shall provide to each participant and beneficiary a notification of 
such transaction. Such notification shall be in writing, except that 
such notification may be in electronic or other form to the extent that 
such form is reasonably accessible to the participant or beneficiary.
    ``(B) In any case in which the proceeds from any transaction 
described in paragraph (1) (with respect to which a notification has 
not been provided pursuant to this paragraph), together with the 
proceeds from any other such transaction or transactions described in 
paragraph (1) occurring during the preceding one-year period, 
constituting direct or indirect sales of employer securities by any 
person described in paragraph (1), exceed (in the aggregate) $100,000, 
such series of transactions by such person shall be treated as a 
transaction described in subparagraph (A) by such person.
    ``(C) Each notification required under this paragraph shall be 
provided as soon as practicable, but not later than 3 business days 
after receipt of the written notification or notifications indicating 
that the transaction (or series of transactions) requiring such notice 
has occurred.
    ``(4) Each notification required under paragraph (2) or (3) shall 
be made in such form and manner as may be prescribed in regulations of 
the Secretary and shall include the number of shares involved in each 
transaction and the price per share, and the notification required 
under paragraph (3) shall be written in language designed to be 
understood by the average plan participant. The Secretary may provide 
by regulation, in consultation with the Securities and Exchange 
Commission, for exemptions from the requirements of this subsection 
with respect to specified types of transactions to the extent that such 
exemptions are consistent with the best interests of plan participants 
and beneficiaries. Such exemptions may relate to transactions involving 
reinvestment plans, stock splits, stock dividends, qualified domestic 
relations orders, and similar matters.
    ``(5) For purposes of this subsection, the term `employer security' 
has the meaning provided in section 407(d)(1).''.

SEC. 11. PROHIBITION ON LOANS TO OFFICERS AND DIRECTORS.

    Section 16 of the Securities Exchange Act of 1934 (15 U.S.C. 78p) 
is amended by adding at the end the following new subsection:
    ``(h) Prohibition on Loans to Officers and Directors.--It shall be 
unlawful for any issuer of any equity security registered under section 
12 to make any substantial loan or other extension of credit to any 
such beneficial owner, officer, or director in violation of such 
regulations as the Commission shall prescribe as necessary to prevent 
self-dealing and for the protection of investors. Such regulations may 
take into account different circumstances of such issuers, beneficial 
owners, officers, and directors in defining whether a loan or other 
extension of credit shall be considered to be substantial for the 
purposes of the regulations under this subsection.''.

SEC. 12. PRIORITY OF CERTAIN CLAIMS IN BANKRUPTCY CASES.

    Section 507(a) of title 11 of the United States Code is amended in 
paragraphs (3) and (4)(B)(ii) by striking ``$4,000'' and inserting 
``$15,000''.

SEC. 13. CRIMINAL PENALTIES FOR ALTERING DOCUMENTS.

    (a) In General.--Chapter 73 of title 18, United States Code, is 
amended by adding at the end the following:
``Sec. 1519. Destruction, alteration, or falsification of records in 
              Federal investigations and bankruptcy
    ``Whoever knowingly alters, destroys, mutilates, conceals, covers 
up, falsifies, or makes a false entry in any record, document, or 
tangible object with the intent to impede, obstruct, or influence the 
investigation or proper administration of any matter within the 
jurisdiction of any department or agency of the United States or any 
case filed under title 11, or in relation to or contemplation of any 
such matter or case, shall be fined under this title, imprisoned not 
more than 5 years, or both.
``Sec. 1520. Destruction of corporate audit records
    ``(a) Any accountant who conducts an audit of an issuer of 
securities to which section 10A(a) of the Securities Exchange Act of 
1934 (15 U.S.C. 78j-1(a)) applies, shall maintain all documents 
(including electronic documents) sent, received, or created in 
connection with any audit, review, or other engagement for such issuer 
for a period of 5 years from the end of the fiscal period in which the 
audit, review, or other engagement was concluded.
    ``(b) Whoever knowingly and willfully violates subsection (a) shall 
be fined under this title, imprisoned not more than 5 years, or both.
    ``(c) Nothing in this section shall be deemed to diminish or 
relieve any person of any other duty or obligation, imposed by Federal 
or State law or regulation, to maintain, or refrain from destroying, 
any document.''.
    (b) Clerical Amendment.--The table of sections at the beginning of 
chapter 73 of title 18, United States Code, is amended by adding at the 
end the following new items:

``1519. Destruction, alteration, or falsification of records in Federal 
                            investigations and bankruptcy.
``1520. Destruction of corporate audit records.''.

SEC. 14. EFFECTIVE DATES.

    (a) In General.--The amendments made by sections 2, 3, 4, 6, and 9 
of this Act shall apply to plan years beginning after December 31, 
2002.
    (b) Collective Bargaining Agreements.--In the case of a plan 
maintained pursuant to one or more collective bargaining agreements 
between employee representatives and one or more employers ratified by 
the date of the enactment of this Act, the amendments made by sections 
2, 3, 4, 6, and 9 of this Act shall not apply with respect to employees 
covered by any such agreement for plan years beginning before the 
earlier of--
            (1) the later of--
                    (A) the date on which the last of such collective 
                bargaining agreements terminates (determined without 
                regard to any extension thereof on or after such date 
                of enactment), or
                    (B) January 1, 2003, or
            (2) January 1, 2005.
    (c) Amendments Relating to Investment Advice.--The amendments made 
by section 5 shall apply with respect to advice referred to in section 
3(21)(A)(ii) of the Employee Retirement Income Security Act of 1974 or 
section 4975(c)(3)(B) of the Internal Revenue Code of 1986 provided on 
or after January 1, 2003.
    (d) Amendments Relating to Reports on Trades in Employer 
Securities.--The amendments made by section 10 shall apply with respect 
to transactions occurring on or after October 1, 2002.
    (e) Amendment Relating to Loans to Officers and Directors.--The 
amendment made by section 11 shall take effect on the date of the 
enactment of this Act.
    (f) Amendments Relating to Priority of Certain Claims in Bankruptcy 
Cases.--The amendments made by section 12 shall apply with respect to 
cases under title 11 of the United States Code pending on and after the 
date of the enactment of this Act.
                                 <all>