[Congressional Bills 107th Congress]
[From the U.S. Government Publishing Office]
[S. 1921 Introduced in Senate (IS)]







107th CONGRESS
  2d Session
                                S. 1921

To amend the Internal Revenue Code of 1986 and the Employee Retirement 
 Income Security Act of 1974 to provide greater protection of workers' 
 retirement plans, to prohibit certain activities by persons providing 
   auditing services to issuers of public securities, and for other 
                               purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                            February 7, 2002

 Mrs. Hutchison (for herself, Mr. Lott, and Mr. Craig) introduced the 
 following bill; which was read twice and referred to the Committee on 
                                Finance

_______________________________________________________________________

                                 A BILL


 
To amend the Internal Revenue Code of 1986 and the Employee Retirement 
 Income Security Act of 1974 to provide greater protection of workers' 
 retirement plans, to prohibit certain activities by persons providing 
   auditing services to issuers of public securities, 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 ``Pension Plan 
Protection Act''.
    (b) Table of Contents.--

Sec. 1. Short title and table of contents.
      TITLE I--PROVISIONS TO PROMOTE ENSURING PENSION PLAN ASSET 
                            DIVERSIFICATION

Sec. 101. Diversification requirements for certain plans holding 
                            employer securities.
Sec. 102. Mandatory quarterly statements.
Sec. 103. Study relating to individual account plans.
    TITLE II--PROHIBITED TRANSACTION EXEMPTION FOR THE PROVISION OF 
                           INVESTMENT ADVICE

Sec. 201. Prohibited transaction exemption for the provision of 
                            investment advice.
     TITLE III--PROTECTIONS DURING PLAN INVESTMENT BLACKOUT PERIODS

Sec. 301. Protections relating to blackouts under defined contribution 
                            plans.
Sec. 302. Fiduciary exception for participant-controlled investment not 
                            to apply during blackout period.
Sec. 303. Corporate executives may not trade employer securities or 
                            derivatives during blackout period.
                TITLE IV--LIMITATION ON AUDITOR SERVICES

Sec. 401. Limitation on auditor services.
                      TITLE V--GENERAL PROVISIONS

Sec. 501. Effective date and related rules.

      TITLE I--PROVISIONS TO PROMOTE ENSURING PENSION PLAN ASSET 
                            DIVERSIFICATION

SEC. 101. DIVERSIFICATION REQUIREMENTS FOR CERTAIN PLANS HOLDING 
              EMPLOYER SECURITIES.

    (a) Amendments of 1986 Code.--
            (1) Qualification requirement.--Section 401(a) of the 
        Internal Revenue Code of 1986 (relating to qualified pension, 
        profit-sharing, and stock bonus plans) is amended by inserting 
        after paragraph (34) the following new paragraph:
            ``(35) Diversification requirements for certain defined 
        contribution plans.--
                    ``(A) In general.--A trust which is part of an 
                applicable defined contribution plan shall not be 
                treated as a qualified trust unless the plan meets the 
                requirements of subparagraphs (B), (C), and (D).
                    ``(B) Investment options.--A plan meets the 
                requirements of this subparagraph if the plan provides 
                participants and beneficiaries with at least 4 
                different investment options, including 3 options which 
                do not involve the acquisition or holding of qualifying 
                employer securities or qualifying employer real 
                property.
                    ``(C) No requirement to invest employee 
                contributions in employer securities.--A plan meets the 
                requirements of this subparagraph if the plan provides 
                that no employee contribution or elective deferral may 
                be required to be invested in qualifying employer 
                securities or qualifying employer real property 
                either--
                            ``(i) pursuant to the terms of the plan, or
                            ``(ii) at the direction of a person other 
                        than the participant making the employee 
                        contribution or elective deferral or a 
                        beneficiary of the participant.
                    ``(D) Required ability to invest.--
                            ``(i) In general.--A plan meets the 
                        requirements of this subparagraph 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.
                            ``(ii) Regulations.--The Secretary, in 
                        consultation with the Secretary of Labor, shall 
                        prescribe regulations under which an employee 
                        is given reasonable notice of the opportunity, 
                        and a reasonable period of time, to make the 
                        divestiture and reinvestment under clause (i).
                    ``(E) Definitions.--For purposes of this 
                paragraph--
                            ``(i) Applicable defined contribution 
                        plan.--The term `applicable defined 
                        contribution plan' means any defined 
                        contribution plan, except that such term shall 
                        not include--
                                    ``(I) an employee stock ownership 
                                plan (within the meaning of section 
                                4975(e)(7)), or
                                    ``(II) a plan which meets the 
                                requirements of section 409(a),
                        under which the only contributions which may be 
                        made are qualified nonelective contributions 
                        (as defined in subsection (m)(4)(C) without 
                        regard to clause (ii) thereof).
                            ``(ii) Elective deferrals.--The term 
                        `elective deferrals' has the meaning given such 
                        term by section 402(g)(3).
                            ``(iii) Employer securities and real 
                        property.--The terms `qualifying employer 
                        securities' and `qualifying employer real 
                        property' have the meanings given such terms by 
                        section 407(d) of the Employee Retirement 
Income Security Act of 1974.''
            (2) Conforming amendment.--Section 401(a)(28) of such Code 
        (relating to additional requirements relating to employee stock 
        ownership plans) is amended by adding at the end the following 
        new subparagraph:
                    ``(D) Exception for plans required to diversify.--
                This paragraph shall not apply to an applicable defined 
                contribution plan (as defined in paragraph 
                (35)(E)(i)).''
    (b) Amendment of ERISA.--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)(1) An applicable individual account plan shall meet the 
requirements of paragraphs (2), (3), and (4).
    ``(2) A plan meets the requirements of this paragraph if the plan 
provides participants and beneficiaries with at least 4 different 
investment options, including 3 options which do not involve the 
acquisition or holding of qualifying employer securities or qualifying 
employer real property.
    ``(3) A plan meets the requirements of this paragraph if the plan 
provides that no employee contribution or elective deferral may be 
required to be invested in qualifying employer securities or qualifying 
employer real property either--
            ``(A) pursuant to the terms of the plan, or
            ``(B) at the direction of a person other than the 
        participant making the employee contribution or elective 
        deferral or a beneficiary of the participant.
    ``(4)(A) 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.
    ``(B) The Secretary of the Treasury, in consultation with the 
Secretary, shall prescribe regulations under which an employee is given 
reasonable notice of the opportunity, and a reasonable period of time, 
to make the divestiture and reinvestment under subparagraph (A).
    ``(5) For purposes of this subsection--
            ``(A) The term `applicable individual account plan' means 
        any individual account plan, except that such term shall not 
        include an employee stock ownership plan (within the meaning of 
        section 4975(e)(7) of the Internal Revenue Code of 1986), or a 
        plan which meets the requirements of section 409(a) of such 
        Code, under which the only contributions which may be made are 
        qualified nonelective contributions (as defined in section 
        401(m)(4)(C) of such Code).
            ``(B) Elective deferrals.--The term `elective deferrals' 
        has the meaning given such term by section 402(g)(3) of such 
        Code.
            ``(C) The terms `qualifying employer securities' and 
        `qualifying employer real property' have the meanings given 
        such terms by section 407(d).''

SEC. 102. MANDATORY QUARTERLY STATEMENTS.

    (a) Amendments of 1986 Code.--Section 401(a)(35) of the Internal 
Revenue Code of 1986 (relating to diversification requirements for 
certain defined contribution plans), as added by section 101, is 
amended--
            (1) by redesignating subparagraph (E) as subparagraph (F) 
        and by inserting after subparagraph (D) the following new 
        subparagraph:
                    ``(E) Quarterly statements required.--
                            ``(i) In general.--A plan meets the 
                        requirements of this subparagraph if the plan 
                        administrator, within a reasonable period of 
                        time following the close of each calendar 
                        quarter, shall provide to each participant or 
                        beneficiary a statement with respect to his or 
                        her individual account which includes--
                                    ``(I) the fair market value as of 
                                the close of such quarter of the assets 
                                in the account in each investment 
                                option,
                                    ``(II) the percentage as of such 
                                calendar quarter of assets which each 
                                investment option is of the total 
                                assets in the account,
                                    ``(III) any administrative and 
                                transaction fees incurred in connection 
                                with the account during such quarter, 
                                and
                                    ``(IV) such other information as 
                                the Secretary may prescribe.
                            ``(ii) Employer securities or property 
                        exceeding 25 percent of total assets.--If, as 
                        of the close of any calendar quarter, the 
                        aggregate fair market value of applicable 
                        securities held by a participant or beneficiary 
                        in the plan exceeded 25 percent of the 
                        aggregate value of all assets held by the 
                        participant or beneficiary in the plan, the 
                        plan administrator shall include with the 
                        statement under clause (i) a separate notice 
                        which--
                                    ``(I) notifies the participant or 
                                beneficiary of such percentage, and
                                    ``(II) reminds the participant or 
                                beneficiary of the right to diversify 
                                plan assets and recommends that the 
                                participant or beneficiary seek advice 
                                from a professional investment advisor 
                                as to the need for a reassessment of 
                                the participant's or beneficiary's 
                                investment diversification.
                            ``(iii) Exception for small plans.--The 
                        Secretary of Labor may by regulation provide 
                        that this subparagraph shall not apply to plans 
                        with fewer than 100 participants, except that 
                        any such exception shall not apply to any 
                        requirement under this subparagraph to provide 
                        a statement and notice to a participant 
or beneficiary under the plan to whom clause (ii) applies for any 
calendar quarter.
                            ``(iv) Statement and notice.--Any statement 
                        or notice under this subparagraph shall be 
                        written in a manner calculated to be understood 
                        by the average plan participant.
                            ``(v) Applicable securities.--For purposes 
                        of this subparagraph, the term `applicable 
                        securities' means any securities described in 
                        subparagraph (A), (B), or (C) of section 
                        407(d)(5) of the Employee Retirement Income 
                        Security Act of 1974 which are issued by the 
                        same person or an affiliate of, or related 
                        person to, such person.
                            ``(vi) Aggregation.--For purposes of this 
                        subparagraph, all applicable defined 
                        contribution plans maintained by the same 
                        employer shall be treated as one plan.'',
            (2) by striking ``or (D)'' in subparagraph (A) and 
        inserting ``(D), or (E)'', and
            (3) by inserting ``and notification'' after 
        ``Diversification'' in the heading.
    (b) Amendments of ERISA.--
            (1) In general.--Section 104 of the Employee Retirement 
        Income Security Act of 1974 (29 U.S.C. 1024) is amended--
                    (A) by redesignating subsections (c) and (d) as 
                subsections (d) and (e), respectively, and
                    (B) by inserting after subsection (b) the following 
                new subsection:
    ``(c)(1) The plan administrator of an applicable individual account 
plan shall, within a reasonable period of time following the close of 
each calendar quarter, provide to each participant or beneficiary a 
statement with respect to his or her individual account which 
includes--
            ``(A) the fair market value as of the close of such quarter 
        of the assets in the account in each investment option,
            ``(B) the percentage as of such calendar quarter of assets 
        which each investment option is of the total assets in the 
        account,
            ``(C) any administrative and transaction fees incurred in 
        connection with the account during such quarter, and
            ``(D) such other information as the Secretary of the 
        Treasury may prescribe.
    ``(2) If, as of the close of any calendar quarter, the aggregate 
fair market value of applicable securities held by a participant or 
beneficiary in an applicable individual account plan exceeds 25 percent 
of the aggregate value of all assets held by the participant or 
beneficiary in the plan, the plan administrator shall include with the 
statement under paragraph (1) a separate notice which --
            ``(A) notifies the participant or beneficiary of such 
        percentage, and
            ``(B) reminds the participant or beneficiary of the right 
        to diversify plan assets and recommends that the participant or 
        beneficiary seek advice from a professional investment advisor 
        as to the need for a reassessment of the participant's or 
        beneficiary's investment diversification.
    ``(3) The Secretary of Labor may by regulation provide that this 
subsection shall not apply to plans with fewer than 100 participants, 
except that any such exception shall not apply for any requirement 
under this subsection to provide a statement and notice to a 
participant or beneficiary under the plan to whom paragraph (2) applies 
for any calendar quarter.
    ``(4) Any statement or notice under this subsection shall be 
written in a manner calculated to be understood by the average plan 
participant.
    ``(5) For purposes of this subsection--
            ``(A) the term `applicable individual account plan' has the 
        meaning given such term by section 404(e), and
            ``(B) the term `applicable securities' means any securities 
        described in subparagraph (A), (B), or (C) of section 407(d)(5) 
        which are issued by the same person or an affiliate of, or 
        related person to, such person.
    ``(6) For purposes of this subsection, all applicable individual 
account plans maintained by the same employer shall be treated as one 
employer.''
            (2) Enforcement.--Section 502(c)(1) of such Act (29 U.S.C. 
        1132(c)(1)) is amended by striking ``or section 101(e)(1)'' and 
        inserting ``, section 101(e)(1), or section 104(c)''.
    (c) Excise Tax on Failure of Certain Defined Contribution Plans To 
Provide Required Quarterly Statements.--
            (1) In general.--Chapter 43 of the Internal Revenue Code of 
        1986 (relating to qualified pension, etc., plans) is amended by 
        adding at the end the following new section:

``SEC. 4980G. FAILURE OF CERTAIN DEFINED CONTRIBUTION PLANS TO PROVIDE 
              REQUIRED QUARTERLY STATEMENTS.

    ``(a) Imposition of Tax.--There is hereby imposed a tax on the 
failure of any applicable defined contribution plan to meet the 
requirements of section 401(a)(35)(E) with respect to any participant 
or beneficiary.
    ``(b) Amount of Tax.--
            ``(1) In general.--The amount of the tax imposed by 
        subsection (a) on any failure with respect to any participant 
        or beneficiary shall be $100 for each day in the noncompliance 
        period with respect to the failure.
            ``(2) Noncompliance period.--For purposes of this section, 
        the term `noncompliance period' means, with respect to any 
        failure, the period beginning on the date the failure first 
        occurs and ending on the date the statement to which the 
        failure relates is provided or the failure is otherwise 
        corrected.
    ``(c) Limitations on Amount of Tax.--
            ``(1) Tax not to apply where failure not discovered and 
        reasonable diligence exercised.--No tax shall be imposed by 
        subsection (a) on any failure during any period for which it is 
        established to the satisfaction of the Secretary that any 
        person subject to liability for tax under subsection (d) did 
        not know that the failure existed and exercised reasonable 
        diligence to meet the requirements of section 401(a)(35)(E).
            ``(2) Tax not to apply to failures corrected within 30 
        days.--No tax shall be imposed by subsection (a) on any failure 
        if--
                    ``(A) any person subject to liability for the tax 
                under subsection (d) exercised reasonable diligence to 
                meet the requirements of section 401(a)(35)(E), and
                    ``(B) such person provides the statement described 
                in section 401(a)(35)(E) during the 30-day period 
                beginning on the first date such person knew, or 
                exercising reasonable diligence should have known, that 
                such failure existed.
            ``(3) Overall limitation for unintentional failures.--
                    ``(A) In general.--If the person subject to 
                liability for tax under subsection (d) exercised 
                reasonable diligence to meet the requirements of 
                section 401(a)(35)(E) and paragraph (1) is not 
                otherwise applicable, the tax imposed by subsection (a) 
                for failures during the taxable year of the employer 
                (or, in the case of a multiemployer plan, the taxable 
                year of the trust forming part of the plan) shall not 
                exceed $500,000. For purposes of the preceding 
                sentence, all multiemployer plans of which the same 
                trust forms a part shall be treated as 1 plan.
                    ``(B) Taxable years in the case of certain 
                controlled groups.--For purposes of this paragraph, if 
                all persons who are treated as a single employer for 
                purposes of this section do not have the same taxable 
                year, the taxable years taken into account shall be 
                determined under principles similar to the principles 
                of section 1561.
            ``(4) Waiver by secretary.--In the case of a failure which 
        is due to reasonable cause and not to willful neglect, the 
        Secretary may waive part or all of the tax imposed by 
        subsection (a) to the extent that the payment of such tax would 
        be excessive or otherwise inequitable relative to the failure 
        involved.
    ``(d) Liability for Tax.--The following shall be liable for the tax 
imposed by subsection (a):
            ``(1) In the case of a plan other than a multiemployer 
        plan, the employer.
            ``(2) In the case of a multiemployer plan, the plan.
    ``(e) Applicable Defined Contribution Plan.--For purposes of this 
section, the term `applicable defined contribution plan' has the 
meaning given such term by section 401(a)(35).''
            (2) Clerical amendment.--The table of sections for chapter 
        43 of such Code is amended by adding at the end the following 
        new item:

``Sec. 4980G. Failure of certain defined contribution plans to provide 
                            required quarterly statements.''

            (3) Effective date.--The amendments made by this subsection 
        shall apply to statements required to be made under section 
        401(a)(35)(E) of the Internal Revenue Code of 1986, as added by 
        this section.

SEC. 103. STUDY RELATING TO INDIVIDUAL ACCOUNT PLANS.

    (a) In General.--As soon as practicable after the date of the 
enactment of this Act, the Secretary of Labor, in consultation with the 
Secretary of the Treasury and the Securities and Exchange Commission, 
shall conduct a study relating to the investment of plan assets of 
individual account plans in stock or other securities.
    (b) Matters To Be Studied.--In conducting the study under 
subsection (a), the Secretary shall--
            (1) consider the feasibility and likely effects of a 
        statutory requirement that plan participants and beneficiaries 
        be allowed to trade securities on a daily basis,
            (2) consider the feasibility and likely effects of a 
        mechanism to allow plan participants and beneficiaries to sell 
        employer securities during a period of high market volatility 
        if a blackout period is in effect,
            (3) consider the feasibility and likely effects of 
        establishing an insurance program to protect participants and 
        beneficiaries from losses of their initial investment of 
        employer and employee contributions in employer securities due 
        to fraud, and
            (4) consider such other matters as the Secretary determines 
        appropriate to ensure the protection of participants or 
        beneficiaries from insufficient diversification of plan assets.
    (c) Report.--Not later than 180 days after the date of the 
enactment of this Act, the Secretary of Labor shall submit to each 
House of Congress a report setting forth the results of the study 
conducted under this section, including any statutory or administrative 
changes as the Secretary determines appropriate.

    TITLE II--PROHIBITED TRANSACTION EXEMPTION FOR THE PROVISION OF 
                           INVESTMENT ADVICE

SEC. 201. PROHIBITED TRANSACTION EXEMPTION FOR THE PROVISION OF 
              INVESTMENT ADVICE.

    (a) Amendments of 1986 Code.--
            (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).''
    (b) Amendments of ERISA.--
            (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, and
                            ``(v) that the adviser is acting as a 
                        fiduciary of the plan in connection with the 
                        provision of the advice,
                    ``(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.--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.
            ``(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.--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).
            ``(6) 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),
                            ``(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).''.
    (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 or section 
4975(e)(3)(B) of the Internal Revenue Code of 1986 provided on or after 
January 1, 2002.

     TITLE III--PROTECTIONS DURING PLAN INVESTMENT BLACKOUT PERIODS

SEC. 301. PROTECTIONS RELATING TO BLACKOUTS UNDER DEFINED CONTRIBUTION 
              PLANS.

    (a) Amendments of 1986 Code.--Section 401(a)(35) of the Internal 
Revenue Code of 1986 (relating to diversification requirements for 
certain defined contribution plans), as added and amended by sections 
101 and 102, is amended--
            (1) by redesignating subparagraph (F) as subparagraph (G) 
        and by inserting after subparagraph (E) the following new 
        subparagraph:
                    ``(F) 30-day notice before blackout period.--
                            ``(i) In general.--A plan meets the 
                        requirements of this subparagraph if the plan 
                        provides that a blackout may not take effect 
                        under the plan until at least 30 days after 
                        written notice (including notice by means of 
                        electronic communication) of the blackout has 
                        been provided by the plan administrator to 
                        participants and beneficiaries.
                            ``(ii) Blackout.--For purposes of this 
                        paragraph, the term `blackout' means any 
                        temporary blackout, lockdown, or freeze with 
                        respect to, suspension of, or similar 
                        limitation--
                                    ``(I) on the ability of a 
                                participant or beneficiary (who has met 
                                minimum participation requirements 
                                applicable in accordance with section 
                                410) to transfer some or all of the 
                                nonforfeitable accrued benefit of the 
                                participant or beneficiary from 
                                investment in the form of qualifying 
                                employer securities (as defined in 
                                section 407(d)(5) of the Employee 
                                Retirement Income Security Act of 1974) 
                                to another investment option otherwise 
                                available under the terms of the plan, 
                                and
                                    ``(II) which is within the control 
                                of the plan sponsor or administrator.
                        Such term does not include any permanent 
                        limitation which applies only to benefits 
                        attributable to employer contributions, or any 
reasonable restriction on the frequency of transfers between investment 
vehicles, subject to such regulations as the Secretary may 
prescribe.'', and
            (2) by striking ``or (E)'' in subparagraph (A) and 
        inserting ``(E), or (F)''.
    (b) Amendments of ERISA.--Section 404(a)(2) of the Employee 
Retirement Income Security Act of 1974 (29 U.S.C. 1104(a)(2)) is 
amended--
            (1) by striking ``In the case'' and inserting ``(A) Subject 
        to subparagraph (B), in the case''; and
            (2) by adding at the end the following new subparagraph:
    ``(B)(i) An eligible individual account plan (as defined in section 
407(d)(3)) shall provide that a blackout may not take effect under the 
plan until at least 30 days after written notice (including notice by 
means of electronic communication) of the blackout has been provided by 
the plan administrator to participants and beneficiaries.
    ``(ii) For purposes of this subparagraph, the term `blackout' means 
any temporary blackout, lockdown, or freeze with respect to, suspension 
of, or similar limitation--
            ``(I) on the ability of a participant or beneficiary (who 
        has met minimum participation requirements applicable in 
        accordance with section 202) to transfer some or all of the 
        nonforfeitable accrued benefit of the participant or 
        beneficiary from investment in the form of qualifying employer 
        securities (as defined in section 407(d)(5)) to another 
        investment vehicle otherwise available under the terms of the 
        plan, and
            ``(II) which is within the control of the plan sponsor or 
        administrator.
Such term does not include any permanent limitation which applies only 
to benefits attributable to employer contributions, or any reasonable 
restriction on the frequency of transfers between investment vehicles, 
subject to such regulations as the Secretary may prescribe.''
    (c) Excise Tax on Failure of Certain Defined Contribution Plans To 
Provide Notice of Plan Blackouts.--
            (1) In general.--Chapter 43 of the Internal Revenue Code of 
        1986 (relating to qualified pension, etc., plans), as amended 
        by section 102, is amended by adding at the end the following 
        new section:

``SEC. 4980H. FAILURE OF CERTAIN DEFINED CONTRIBUTION PLANS TO PROVIDE 
              NOTICE OF PLAN BLACKOUTS.

    ``(a) Imposition of Tax.--There is hereby imposed a tax on the 
failure of any applicable defined contribution plan to meet the 
requirements of section 401(a)(35)(F) with respect to any participant 
or beneficiary.
    ``(b) Amount of Tax.--
            ``(1) In general.--The amount of the tax imposed by 
        subsection (a) on any failure with respect to any participant 
        or beneficiary shall be $100 for each day in the noncompliance 
        period with respect to the failure.
            ``(2) Noncompliance period.--For purposes of this section, 
        the term `noncompliance period' means, with respect to any 
        failure, the period beginning on the date the failure first 
        occurs and ending on the date the notice to which the failure 
        relates is provided or the failure is otherwise corrected.
    ``(c) Limitations on Amount of Tax.--
            ``(1) Tax not to apply where failure not discovered and 
        reasonable diligence exercised.--No tax shall be imposed by 
        subsection (a) on any failure during any period for which it is 
        established to the satisfaction of the Secretary that any 
        person subject to liability for tax under subsection (d) did 
        not know that the failure existed and exercised reasonable 
        diligence to meet the requirements of section 401(a)(35)(F).
            ``(2) Tax not to apply to failures corrected as soon as 
        reasonably practicable.--No tax shall be imposed by subsection 
        (a) on any failure if--
                    ``(A) any person subject to liability for the tax 
                under subsection (d) exercised reasonable diligence to 
                meet the requirements of section 401(a)(35)(F), and
                    ``(B) such person provides the notice described in 
                section 401(a)(35)(F) as soon as reasonably practicable 
                after the first date such person knew, or exercising 
                reasonable diligence should have known, that such 
                failure existed.
            ``(3) Overall limitation for unintentional failures.--
                    ``(A) In general.--If the person subject to 
                liability for tax under subsection (d) exercised 
                reasonable diligence to meet the requirements of 
                section 401(a)(35)(F) and paragraph (1) is not 
                otherwise applicable, the tax imposed by subsection (a) 
                for failures during the taxable year of the employer 
                (or, in the case of a multiemployer plan, the taxable 
                year of the trust forming part of the plan) shall not 
                exceed $500,000. For purposes of the preceding 
                sentence, all multiemployer plans of which the same 
                trust forms a part shall be treated as 1 plan.
                    ``(B) Taxable years in the case of certain 
                controlled groups.--For purposes of this paragraph, if 
                all persons who are treated as a single employer for 
                purposes of this section do not have the same taxable 
                year, the taxable years taken into account shall be 
                determined under principles similar to the principles 
                of section 1561.
            ``(4) Waiver by secretary.--In the case of a failure which 
        is due to reasonable cause and not to willful neglect, the 
        Secretary may waive part or all of the tax imposed by 
        subsection (a) to the extent that the payment of such tax would 
        be excessive or otherwise inequitable relative to the failure 
        involved.
    ``(d) Liability for Tax.--The following shall be liable for the tax 
imposed by subsection (a):
            ``(1) In the case of a plan other than a multiemployer 
        plan, the employer.
            ``(2) In the case of a multiemployer plan, the plan.
    ``(e) Applicable Defined Contribution Plan.--For purposes of this 
section, the term `applicable defined contribution plan' has the 
meaning given such term by section 401(a)(35).''
            (2) Clerical amendment.--The table of sections for chapter 
        43 of such Code is amended by adding at the end the following 
        new item:

``Sec. 4980H. Failure of certain defined contribution plans to provide 
                            notice of plan blackouts.''
            (3) Effective date.--The amendments made by this subsection 
        shall apply to notices required to be made under section 
        401(a)(35)(F) of the Internal Revenue Code of 1986, as added by 
        this section.

SEC. 302. FIDUCIARY EXCEPTION FOR PARTICIPANT-CONTROLLED INVESTMENT NOT 
              TO APPLY DURING BLACKOUT PERIOD.

    Section 404(c) of the Employee Retirement Income Security Act of 
1974 (29 U.S.C. 1104(c)) is amended by adding at the end the following 
new paragraph:
    ``(3) Notwithstanding paragraph (1), if a person who is otherwise a 
fiduciary violates any fiduciary duty or responsibility with respect to 
--
            ``(A) the imposition of a blackout (as defined in 
        subsection (a)(2)(B)(ii)), or
            ``(B) the ability of a participant or beneficiary to 
        exercise control over assets during the blackout,
such person shall be liable under this part for any loss during such 
blackout from the investment of the participant's or beneficiary's 
assets in qualifying employer securities or qualifying employer real 
property.''

SEC. 303. CORPORATE EXECUTIVES MAY NOT TRADE EMPLOYER SECURITIES OR 
              DERIVATIVES DURING BLACKOUT PERIOD.

    Section 16 of the Securities Exchange Act of 1934 (15 U.S.C. 78p) 
is amended by adding at the end the following:
    ``(h) Certain Transactions Prohibited.--It shall be unlawful for 
any beneficial owner, director, or officer of an issuer described in 
subsection (a), directly or indirectly, to sell or exercise any equity 
security of the issuer (other than an exempted security) or any 
derivative thereof, during any period during which a blackout (as 
defined in section 404(a)(2)(B)(ii) of the Employee Retirement Income 
Security Act of 1974) is in effect with respect to any pension plan 
established or maintained by the issuer.''

                TITLE IV--LIMITATION ON AUDITOR SERVICES

SEC. 401. LIMITATION ON AUDITOR SERVICES.

    (a) In General.--Section 10A of the Securities Exchange Act of 1934 
(15 U.S.C. 78j-1) is amended by adding at the end the following:
    ``(g) Nonaudit Services Prohibited.--
            ``(1) In general.--An independent public accountant that 
        performs for any applicable entity any auditing service that is 
        required under the securities laws or the rules or regulations 
        of the Commission pursuant to the securities laws, or any 
        affiliate of such independent public accountant, may not 
        provide to that entity any other service that is not directly 
        related to the performance of the auditing service.
            ``(2) Applicable entity.--For purposes of this subsection, 
        the term `applicable entity' means an entity issuing securities 
        that are readily tradable on an established securities 
        market.''
    (b) Effective Date.--Section 10A(g) of the Securities Exchange Act 
of 1934, as added by subsection (a), shall apply on and after the date 
of enactment of this Act, except that if there are agreements for the 
provision of both auditing and other services in effect on that date of 
enactment, such section shall not apply to services provided under such 
agreements before the earlier of--
            (1) the first date on which any such agreement is renewed 
        or amended, or
            (2) 6 months after the date of enactment of this Act.

                      TITLE V--GENERAL PROVISIONS

SEC. 501. EFFECTIVE DATE AND RELATED RULES.

    (a) In General.--Except as otherwise provided in this Act, 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.
    (c) Plan Amendments.--If the amendments made by this Act require 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 amendments made by this 
        Act take effect and before such first plan year, the plan is 
        operated in accordance with the requirements of such amendments 
        made by this Act, and
            (2) such plan amendment applies retroactively to the period 
        after such amendments made by this Act take effect and before 
        such first plan year.
                                 <all>