[Congressional Bills 108th Congress]
[From the U.S. Government Publishing Office]
[H.R. 5397 Introduced in House (IH)]






108th CONGRESS
  2d Session
                                H. R. 5397

        To improve the retirement security of American families.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                           November 19, 2004

 Mr. Andrews introduced the following bill; which was referred to the 
                Committee on Education and the Workforce

_______________________________________________________________________

                                 A BILL


 
        To improve the retirement security of American families.

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

SECTION 1. SHORT TITLE AND TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Retirement 
Enhancement Act of 2004''.
    (b) Table of Contents.--The table of contents is as follows:

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

Sec. 101. Minimum coverage requirements.
Sec. 102. Minimum participation requirements.
Sec. 103. Faster vesting of benefits under defined contribution plans.
Sec. 104. Prohibition of requests by plan sponsors for waiver of 
                            employee rights.
Sec. 105. Model small employer group pension plan.
Sec. 106. Enforcement under ERISA of requirements for simplified 
                            employee pensions.
            TITLE II--IMPROVED PENSION PROTECTIONS FOR WOMEN

Sec. 201. Elimination of integration with workers' compensation and 
                            similar benefits.
Sec. 202. Spousal consent required for distributions from defined 
                            contribution plans.
Sec. 203. Modification of joint and survivor annuity requirements.
Sec. 204. Division of pension benefits upon divorce.
Sec. 205. Periods of family and medical leave treated as hours of 
                            service for pension participation and 
                            vesting.
Sec. 206. Right of spouse to know distribution information.
Sec. 207. Repeal of reduction in military Survivor Benefit Plan 
                            annuities at age 62.
Sec. 208. Survivor annuities for widows, widowers, and former spouses 
                            of Federal employees who die before 
                            attaining age for deferred annuity under 
                            Civil Service Retirement System.
Sec. 209. Order of precedence for disposition of amounts remaining in 
                            the thrift savings account of a Federal 
                            employee (or former employee) who dies 
                            before making an effective election 
                            controlling such disposition.
Sec. 210. Amendments relating to effective date provision of the Civil 
                            Service Retirement Spouse Equity Act of 
                            1984.
Sec. 211. Entitlement of divorced spouses to railroad retirement 
                            annuities independent of actual entitlement 
                            of employee.
Sec. 212. Extension of tier II railroad retirement benefits to 
                            surviving former spouses pursuant to 
                            divorce agreements.
               TITLE III--SIMPLIFIED INVESTMENT STANDARDS

Sec. 301. Exemption from prohibited transaction rules for certain 
                            aborted emergent transactions.
Sec. 302. Prohibited transaction exemption for the provision of 
                            investment advice.
Sec. 303. Participation of participants in trusteeship of single-
                            employer plans providing for employee 
                            contributions.
Sec. 304. Diversification of investment of account assets held under 
                            individual account plans.
Sec. 305. Removal of $500,000 cap on bonding requirement.
Sec. 306. Disclosure regarding investments and voting of proxies.
Sec. 307. Immediate warning of excessive stock holdings.
Sec. 308. Report to participants and beneficiaries of trades in 
                            employer securities.
     TITLE IV--IMPROVEMENTS IN PENSION INFORMATION AND ENFORCEMENT

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

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

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

              TITLE I--IMPROVED PARTICIPATION AND VESTING

SEC. 101. MINIMUM COVERAGE REQUIREMENTS.

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

                    ``minimum coverage requirements

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

``Sec. 201A. Minimum coverage requirements.''.

SEC. 102. MINIMUM PARTICIPATION REQUIREMENTS.

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

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

    Section 203(a) of the Employee Retirement Income Security Act of 
1974 (29 U.S.C. 1053(a)) is amended--
            (1) by striking paragraph (2)(A) and inserting the 
        following:
                    ``(A) A plan satisfies the requirements of this 
                subparagraph if an employee has a nonforfeitable right 
                to 100 percent of the employee's accrued benefit 
                derived from employer contributions--
                            ``(i) in the case of a defined benefit 
                        plan, as of completion by the employee of at 
                        least 5 years of service, or
                            ``(ii) in the case of a defined 
                        contribution plan, as of completion by the 
                        employee of at least 3 years of service.'';
            (2) in paragraph (2)(B), by inserting after ``if'' the 
        following: ``the plan is a defined benefit plan and, under the 
        plan,''; and
            (3) in paragraph (4), by striking ``paragraph (2) shall be 
        applied--'' and all that follows through ``subparagraph (B):'' 
        and inserting ``paragraph (2)(B) shall be applied by 
        substituting for the table contained therein the following 
        table:''.

SEC. 104. PROHIBITION OF REQUESTS BY PLAN SPONSORS FOR WAIVER OF 
              EMPLOYEE RIGHTS.

    (a) In General.--Part 2 of subtitle B of title I of the Employee 
Retirement Income Security Act of 1974 (29 U.S.C. 1051 et seq.) is 
amended--
            (1) by redesignating section 211 as section 212; and
            (2) by inserting after section 210 the following new 
        section:

   ``prohibition of requests by plan sponsors for waiver of employee 
                                 rights

    ``Sec. 211. A plan sponsor may not request any individual to waive 
any right of coverage under, or participation in, any pension plan 
which is granted by this title.''.
    (b) Clerical Amendment.--The table of contents in section 1 of such 
Act is amended--
            (1) by striking the item relating to section 211; and
            (2) by inserting after the item relating to section 210 the 
        following new items:

``Sec. 211. Prohibition of requests by plan sponsors for waiver of 
                            employee rights.
``Sec. 212. Effective dates.''.

SEC. 105. MODEL SMALL EMPLOYER GROUP PENSION PLAN.

    (a) In General.--Section 206 of the Employee Retirement Income 
Security Act of 1974 (29 U.S.C. 1056) is amended by adding at the end 
the following new subsection:
    ``(g) Model Simplified Group Pension Plans.--
            ``(1) Establishment of model plan.--The Secretary, in 
        consultation with the Secretary of the Treasury, shall 
        prescribe by regulations one or more model simplified group 
        pension plans which would--
                    ``(A) provide simplicity and minimal administrative 
                responsibilities to employers and provide adequate 
                retirement benefits to employees upon adoption by an 
                employer, including models which could be established 
                by a group of small employers, an employee association, 
                an employer association, or a financial institution,
                    ``(B) cover all employees of the employer,
                    ``(C) accept contributions from successive 
                employers,
                    ``(D) readily permit and accept rollovers to and 
                from other qualified plans (as defined in section 
                203(e)(2)), and
                    ``(E) constitute a plan meeting the requirements of 
                this Act and Internal Revenue Code of 1986.
        In devising a model pension plan, the Secretary shall consider 
        the adequacy of existing simplified employee pension plan 
        alternatives and may make recommendations to adopt such plans 
        as model simplified plans.
            ``(2) Advertisement of model plan.--The Secretary, in 
        consultation with the Secretary of the Treasury and the 
        Administrator of the Small Business Administration, shall 
        advertise the model plans developed pursuant to paragraph (1), 
        including through contracts (to the extent provided in 
        appropriation Acts) with applicable organizations, to ensure 
        that small employers and their employees are apprised of the 
        availability of administratively simple single and group 
        pension plans.''.
    (b) Exemption of Plan Sponsor From Fiduciary Liability.--Section 
404(a) of such Act (29 U.S.C. 1104(a)) is amended by adding at the end 
the following new paragraph:
    ``(3) A plan sponsor of an employee benefit plan shall not be 
liable under this part in connection with such plan for any act or 
practice by such plan sponsor consistent with the requirements of such 
plan if such plan conforms to the terms of a model simplified group 
pension plan prescribed pursuant to section 206(g).''.
    (c) Initial Regulations.--Regulations under section 206(g) of the 
Employee Retirement Income Security Act of 1974 (added by this section) 
for the first model simplified pension plans shall be issued within 12 
months after the date of the enactment of this Act.
    (d) Study.--Not later than 3 years after the date of the enactment 
of this Act, the Secretary of Labor and the Secretary of the Treasury 
shall conduct a joint study to determine the feasibility of permitting 
non-highly compensated employees whose employer does not cover them 
under a pension plan, and other non-covered individuals, to seek an 
automatic payroll deduction or other deferral mechanism to make 
contributions to a pension plan conforming to the the requirements of a 
model simplified group pension plan developed pursuant to section 
206(g) of the Employee Retirement Income Security Act of 1974 or to 
similar pension plans. Such Secretaries shall submit a joint report to 
the Congress describing the results of such study and making such 
recommendations as the Secretaries determine necessary or appropriate.

SEC. 106. ENFORCEMENT UNDER ERISA OF REQUIREMENTS FOR SIMPLIFIED 
              EMPLOYEE PENSIONS.

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

              ``treatment of simplified employee pensions

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

            TITLE II--IMPROVED PENSION PROTECTIONS FOR WOMEN

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

    Section 206 of the Employee Retirement Income Security Act of 1974 
(as amended by section 105(a)) is amended further by adding at the end 
the following new subsection:
    ``(h) Integration With Workers' Compensation and Similar Benefits 
Precluded.--Benefits under an employee pension benefit plan may not 
vary based on the amount of benefits received by a participant or 
beneficiary under an applicable worker's compensation law, unemployment 
compensation law, or disability insurance law, or on whether the 
participant or beneficiary is entitled to such benefits.''.

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

    (a) In General.--Section 205(b) of the Employee Retirement Income 
Security Act of 1974 (29 U.S.C. 1055(b)) is amended to read as follows:
    ``(b)(1) This section shall apply to any defined benefit plan and 
to any individual account plan.
    ``(2) Notwithstanding paragraph (1), this section shall not apply 
to a plan which the Secretary of the Treasury or his delegate has 
determined is a plan described in section 404(c) of the Internal 
Revenue Code of 1986 (or a continuation thereof) in which participation 
is substantially limited to individuals who, before January 1, 1976, 
ceased employment covered by the plan.''.
    (b) Hardship Distribution.--Section 205 of such Act (29 U.S.C. 
1055) is amended by adding at the end the following new subsection:
    ``(m) This section shall not apply to a hardship distribution under 
section 401(k)(2)(B)(i)(IV) of the Internal Revenue Code of 1986.''.
    (c) Special Rule for Cash-outs.--Section 205(g) of such Act (29 
U.S.C. 1055(g)) is amended--
            (1) by adjusting the margination of paragraph (3) so as to 
        align such paragraph with the margination of paragraphs (1) and 
        (2); and
            (2) by adding at the end the following new paragraph:
    ``(4) Special Rule for Defined Contribution Plans.--
            ``(A) In general.--In the case of an individual account 
        plan, notwithstanding paragraph (2), if the present value of 
        the qualified joint and survivor annuity or the qualified 
        preretirement survivor annuity exceeds $10,000, the plan shall 
        immediately distribute 50 percent of the present value of such 
        annuity to each spouse, unless otherwise elected in advance by 
        the spouse in writing in accordance with such regulations as 
        the Secretary may prescribe. Section 211 shall apply with 
        respect to each spouse's rights under this paragraph as if such 
        spouse were an employee referred to in such section.
            ``(B) Exception.--The plan may distribute a different 
        percentage of the present value of an annuity to each spouse if 
        a court order or contractual agreement between the spouses 
        provides for such different percentage.''.

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

    (a) Option to Elect Qualified Alternative Joint and Survivor 
Annuity Form of Benefit Upon Waiver of Qualified Joint and Survivor 
Annuity Form of Benefit.--
            (1) In general.--Section 205(c)(1)(A) of the Employee 
        Retirement Income Security Act of 1974 (29 U.S.C. 
        1055(c)(1)(A)) is amended to read as follows:
                    ``(A) under the plan, each participant--
                            ``(i) may elect at any time during the 
                        applicable election period to waive the 
                        qualified joint and survivor annuity form of 
                        benefit,
                            ``(ii) may elect at any time during the 
                        applicable election period to waive the 
                        qualified preretirement survivor annuity form 
                        of benefit,
                            ``(iii) may elect at any time during the 
                        applicable election period, in any case in 
                        which the qualified joint and survivor annuity 
                        form of benefit is not provided by reason of a 
                        waiver under clause (i), to be provided a 
                        qualified alternative joint and survivor 
                        annuity form of benefit, and
                            ``(iv) may revoke any such election at any 
                        time during the applicable election period, 
                        and''.
            (2) Qualified alternative joint and survivor annuity 
        defined.--Section 205(d) of such Act (29 U.S.C. 1055(d)) is 
        amended--
                    (A) by redesignating paragraphs (1) and (2) as 
                subparagraphs (A) and (B), respectively;
                    (B) by inserting ``(1)'' after ``(d)''; and
                    (C) by adding at the end the following new 
                paragraph:
    ``(2)(A) For purposes of this section, the term `qualified 
alternative joint and survivor annuity' means an annuity--
            ``(i) for the life of the participant with a survivor 
        annuity for the life of the spouse which is equal to the 
        applicable percentage (determined under subparagraph (B)) of 
        (and not greater than 100 percent of) the amount of the annuity 
        which is payable during the joint lives of the participant and 
        the spouse, and
            ``(ii) which is the actuarial equivalent of a single 
        annuity for the life of the participant.
Such term also includes any annuity form having the effect of an 
annuity described in the preceding sentence.
    ``(B)(i) For purposes of subparagraph (A)--
                    ``(I) if the base survivor annuity percentage is 
                less than 75 percent, the applicable percentage is 75 
                percent, and
                    ``(II) if the base survivor annuity percentage is 
                equal to at least 75 percent, the applicable percentage 
                is 50 percent.
    ``(ii) For purposes of clause (i), the term `survivor annuity 
percentage' means the percentage which the survivor annuity under the 
plan's qualified joint and survivor annuity form of benefit bears to 
the annuity payable during the joint lives of the participant and the 
spouse under such form of benefit.''.
    (b) Exemption in the Case of Plans Offering Fully Subsidized 
Qualified Joint and Survivor Annuities.--Section 205(c)(5) of such Act 
(29 U.S.C. 1055(c)(5)) is amended--
            (1) by redesignating subparagraph (B) as subparagraph (C); 
        and
            (2) by inserting after subparagraph (A) the following new 
        subparagraph:
    ``(B) The requirements of this subsection shall not apply with 
respect to the qualified alternative joint and survivor annuity form of 
benefit if the plan fully subsidizes the costs of the qualified joint 
and survivor annuity form of benefit.''.
    (c) Illustration Requirement.--Clause (i) of section 205(c)(3)(A) 
of such Act (29 U.S.C. 1055(c)(3)(A)) is amended to read as follows:
            ``(i) the terms and conditions of the qualified joint and 
        survivor annuity form of benefit offered by the plan, the terms 
        and conditions of the qualified preretirement survivor annuity 
        form of benefit offered by the plan, and the terms and 
        conditions of the qualified alternative joint and survivor 
        annuity form of benefit offered by the plan, accompanied by an 
        illustration of the benefits under each such form of benefit 
        for the particular participant and spouse and an 
        acknowledgement form to be signed by the participant and the 
        spouse that they have read and considered the illustration 
        before any election is made pursuant to clause (i) or (ii) of 
        subsection (c)(1)(A).''.
    (d) Rule of Construction.--For purposes of section 204(g) of the 
Employee Retirement Income Security Act of 1974 (29 U.S.C. 1054(g)), a 
plan shall not be treated as having decreased the accrued benefit of a 
participant solely by reason of the adoption of a plan amendment under 
which a qualified alternative joint and survivor annuity form of 
benefit is added to the plan in accordance with section 
205(c)(1)(A)(ii) of such Act (as amended by this section).

SEC. 204. DIVISION OF PENSION BENEFITS UPON DIVORCE.

    (a) In General.--Section 206(d)(3) of the Employee Retirement 
Income Security Act of 1974 (29 U.S.C. 1056(d)(3)) is amended by 
redesignating subparagraph (N) as subparagraph (O) and by inserting 
after subparagraph (M) the following new subparagraph:
    ``(N) Special Rules and Procedures for Domestic Relations Orders 
not Specifying Division of Pension Benefits.--
            ``(i) In general.--In any case in which--
                    ``(I) a domestic relations order (including an 
                annulment or other order of marital dissolution) 
                relates to provision of marital property with respect 
                to a marriage of at least 5 years duration between an 
                individual who is a participant in a pension plan and 
                such individual's former spouse,
                    ``(II) such order, and all prior orders (if any) 
                described in subclause (I) relating to such marriage, 
                do not specifically provide that pension benefits were 
                considered by the parties and that no division of such 
                benefits is intended,
                    ``(III) such order is not a qualified domestic 
                relations order (as determined without regard to this 
                subparagraph) and there is no other prior qualified 
                domestic relations order issued in connection with the 
                dissolution of the marriage to which such order 
                relates, and
                    ``(IV) the former spouse notifies the plan within 
                the period prescribed under clause (vii) that the 
                former spouse is entitled to benefits under the plan in 
                accordance with the provisions of this subparagraph,
        such domestic relations order shall be treated as a qualified 
        domestic relations order for purposes of this paragraph.
            ``(ii) Amount of benefit.--Any domestic relations order 
        treated as a qualified domestic relations order under clause 
        (i) shall be treated as specifying that the former spouse is 
        entitled to the applicable percentage of the marital share of 
        the participant's accrued benefit.
            ``(iii) Marital share.--For purposes of clause (ii), the 
        marital share of a participant's accrued benefit is an amount 
        equal to the product of--
                    ``(I) such benefit as of the date of the first 
                payment under the plan (to the extent such accrued 
                benefit is vested on the date of the dissolution of the 
                marriage or any later date), and
                    ``(II) a fraction, the numerator of which is the 
                period of participation by the participant under the 
                plan starting with the date of marriage and ending with 
                the date of dissolution of marriage, and the 
                denominator of which is the total period of 
                participation by the participant under the plan.
            ``(iv) Applicable percentage.--For purposes of clause (ii), 
        the applicable percentage is--
                    ``(I) except as provided in subclause (II), 50 
                percent, and
                    ``(II) in the case of a participant who fails to 
                provide the plan with notice of a domestic relations 
                order within the time prescribed under clause (v), 67 
                percent.
            ``(v) Notice by participant.--Each participant in a pension 
        plan shall, within 60 days after the dissolution of the 
        marriage of the participant--
                    ``(I) notify the plan administrator of the plan of 
                such dissolution, and
                    ``(II) provide to the plan administrator a copy of 
                the domestic relations order (including an annulment or 
                other order of marital dissolution) providing for such 
                dissolution and the last known address of the 
                participant's former spouse.
            ``(vi) Notice by plan administrator.--Each plan 
        administrator receiving notice under clause (v) shall promptly 
        notify the former spouse of a participant of such spouse's 
        rights under this subparagraph, including the time period 
        within which such spouse is required to notify the plan of the 
        spouse's intention to claim rights under this subparagraph.
            ``(vii) Notice by former spouse.--A former spouse may 
        notify the plan administrator of such spouse's intent to claim 
        rights under this subparagraph at any time before the last day 
        of the 1-year period following receipt of notice under clause 
        (vi).
            ``(viii) Coordination with plan procedures.--The 
        determination under subparagraph (G)(i)(II) with respect to a 
        domestic relations order to which this subparagraph applies 
        shall be made within a reasonable period of time after the plan 
        administrator receives the notice described in clause (vii).
            ``(ix) Interpretation as qualified domestic relations 
        order.--Each plan shall establish reasonable rules for 
        determining how any such deemed domestic relations order is to 
        be interpreted under the plan so as to constitute a qualified 
        domestic relations order that satisfies subparagraphs (C) 
        through (E) (and a copy of such rules shall be provided to such 
        former spouse promptly after delivery of the divorce decree). 
        Such rules--
                    ``(I) may delay the effect of such an order until 
                the earlier of the date the participant is fully vested 
                or has terminated employment,
                    ``(II) may allow distribution to the former spouse 
                to be made immediately,
                    ``(III) shall permit the former spouse to be paid 
                not later than the earliest retirement age under the 
                plan or the participant's death,
                    ``(IV) may require the submitter of the divorce 
                decree to present a marriage certificate or other 
                evidence of the marriage date to assist in benefit 
                calculations, and
                    ``(V) may conform to the rules applicable to 
                qualified domestic relations orders regarding form or 
                type of benefit.''.
    (b) Effective Date.--The amendment made by this section shall apply 
with respect to notifications made by former spouses pursuant to 
section 206(d)(3)(N)(vii) of the Employee Retirement Income Security 
Act of 1974 (added by this section) after December 31, 2005.

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

    (a) Participation.--
            (1) In general.--Paragraph (3) of section 202(a) of the 
        Employee Retirement Income Security Act of 1974 (29 U.S.C. 
        1052(a)(3)) is amended by adding at the end the following new 
        subparagraph:
    ``(E)(i) For purposes of this subsection, in the case of an 
individual who is absent from work on leave required to be given to 
such individual under the Family and Medical Leave Act of 1993, the 
plan shall treat as hours of service--
            ``(I) the hours of service which otherwise would normally 
        have been credited to such individual but for such absence, or
            ``(II) in any case in which the plan is unable to determine 
        the hours described in subclause (I), 8 hours of service per 
        day of absence.
    ``(ii) The hours described in clause (i) shall be treated as hours 
of service as provided in this subparagraph--
            ``(I) only in the year in which the absence from work 
        begins, if section 203(b)(2)(E)(ii)(I) requires hours to be 
        credited to the year in which the absence from work begins, or
            ``(II) in any other case, in the immediately following 
        year.''.
            (2) Coordination with treatment of maternity and paternity 
        absences under break in service rules.--Subparagraph (A) of 
        section 202(b)(5) of such Act (29 U.S.C. 1052(b)(5)(A)) is 
        amended by adding at the end the following new sentence: ``The 
        preceding sentence shall apply to an absence from work only if 
        no part of such absence is required to be given under the 
        Family and Medical Leave Act of 1993.''.
    (b) Vesting.--
            (1) In general.--Paragraph (2) of section 203(b) of such 
        Act (29 U.S.C. 1053(b)(2)) is amended by adding at the end the 
        following new subparagraph:
    ``(E)(i) For purposes of this subsection, in the case of an 
individual who is absent from work on leave required to be given to 
such individual under the Family and Medical Leave Act of 1993, the 
plan shall treat as hours of service--
            ``(I) the hours of service which otherwise would normally 
        have been credited to such individual but for such absence, or
            ``(II) in any case in which the plan is unable to determine 
        the hours described in subclause (I), 8 hours of service per 
        day of absence.
    ``(ii) The hours described in clause (i) shall be treated as hours 
of service as provided in this subparagraph--
            ``(I) only in the year in which the absence from work 
        begins, if the participant's rights in his accrued benefit 
        derived from employer contributions are to any extent not 
        nonforfeitable and the participant would have a year of service 
        solely because the period of absence is treated as hours of 
        service as provided in clause (i); or
            ``(II) in any other case, in the immediately following 
        year.''.
            (2) Coordination with treatment of maternity and paternity 
        absences under break in service rules.--Clause (i) of section 
        203(b)(3)(E) of such Act (29 U.S.C. 1053(b)(3)(E)(i)) is 
        amended by adding at the end the following new sentence: ``The 
        preceding sentence shall apply to an absence from work only if 
        no part of such absence is required to be given under the 
        Family and Medical Leave Act of 1993.''.
    (c) Application to Current Employees.--The amendments made by this 
section shall not apply to any employee who does not have at least 1 
hour of service in any plan year beginning after December 31, 2005.

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

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

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

    (a) Computation of Annuity for a Spouse, Former Spouse, or Child.--
Subsection (a) of section 1451 of title 10, United States Code, is 
amended--
            (1) in paragraph (1), by striking ``shall be determined as 
        follows:'' and all that follows and inserting the following: 
        ``shall be the amount equal to 55 percent of the base 
        amount.'';
            (2) in paragraph (2), by striking ``shall be determined as 
        follows:'' and all that follows and inserting the following: 
        ``shall be the amount equal to a percentage of the base amount 
        that is less than 55 percent and is determined under subsection 
        (f).''.
    (b) Annuities for Survivors of Certain Persons Dying During a 
Period of Special Eligibility for SBP.--Subsection (c)(1) of such 
section is amended by striking ``shall be determined as follows:'' and 
all that follows and inserting the following: ``shall be the amount 
equal to 55 percent of the retired pay to which the member or former 
member would have been entitled if the member or former member had been 
entitled to that pay based upon his years of active service when he 
died determined as follows:
            ``(A) In the case of an annuity provided under section 
        1448(d) of this title (other than in a case covered by 
        subparagraph (B)), such retired pay shall be computed as if the 
        member had been retired under section 1201 of this title on the 
        date of the member's death with a disability rated as total.
            ``(B) In the case of an annuity provided under section 
        1448(d)(1)(A) of this title by reason of the death of a member 
        not in line of duty, such retired pay shall be computed based 
        upon the member's years of active service when he died.
            ``(C) In the case of an annuity provided under section 
        1448(f) of this title, such retired pay shall be computed based 
        upon the member or former member's years of active service when 
        he died computed under section 12733 of this title.''.
    (c) Repeal of Requirement for Reduction.--Such section is further 
amended by striking subsection (d).
    (d) Repeal of Unnecessary Supplemental SBP.--(1) Subchapter III of 
chapter 73 of title 10, United States Code, is repealed.
    (2) The table of subchapters at the beginning of such chapter is 
amended by striking the item relating to subchapter III.
    (e) Effective Date.--The amendments made by this section shall take 
effect on October 1, 2005, and shall apply with respect to annuity 
payments for months beginning on or after that date.

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

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

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

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

SEC. 210. AMENDMENTS RELATING TO EFFECTIVE DATE PROVISION OF THE CIVIL 
              SERVICE RETIREMENT SPOUSE EQUITY ACT OF 1984.

    (a) Elimination of Certain Bars to Eligibility.--Section 4(b) of 
the Civil Service Retirement Spouse Equity Act of 1984 (5 U.S.C. 8341 
note) is amended--
            (1) in paragraph (1)(B)(i), by striking ``after September 
        14, 1978, and''; and
            (2) by repealing paragraph (4).
    (b) New Deadline for Applications.--
            (1) In general.--Section 4(b)(1)(B)(iv) of the Civil 
        Service Retirement Spouse Equity Act of 1984 is amended by 
        striking ``May 7, 1989'' and inserting ``May 7th of the year 
        following the year in which the Retirement Enhancement Act of 
        2004 is enacted''.
            (2) Authority to waive deadline.--Section 4(b) of the Civil 
        Service Retirement Spouse Equity Act of 1984 is amended by 
        adding at the end the following:
    ``(6)(A) The Director of the Office of Personnel Management may 
waive the deadline under paragraph (1)(B)(iv) in any case in which the 
Director determines that the circumstances so warrant.
    ``(B) In making a determination under this paragraph, one of the 
factors which may be taken into account is whether the individual 
involved has previously submitted a timely application under this 
section--
            ``(i) which was denied; but
            ``(ii) which, based on criteria applied under this section 
        pursuant to changes in law subsequent to the denial, would have 
        been approved.''.

SEC. 211. ENTITLEMENT OF DIVORCED SPOUSES TO RAILROAD RETIREMENT 
              ANNUITIES INDEPENDENT OF ACTUAL ENTITLEMENT OF EMPLOYEE.

    (a) In General.--Section 2 of the Railroad Retirement Act of 1974 
(45 U.S.C. 231a) is amended--
            (1) in subsection (c)(4)(i), by striking ``(A) is entitled 
        to an annuity under subsection (a)(1) and (B)''; and
            (2) in subsection (e)(5), by striking ``or divorced wife'' 
        the second place it appears.
    (b) Effective Date.--The amendments made by this section shall take 
effect 1 year after the date of the enactment of this Act.

SEC. 212. EXTENSION OF TIER II RAILROAD RETIREMENT BENEFITS TO 
              SURVIVING FORMER SPOUSES PURSUANT TO DIVORCE AGREEMENTS.

    (a) In General.--Section 5 of the Railroad Retirement Act of 1974 
(45 U.S.C. 231d) is amended by adding at the end the following:
    ``(d) Notwithstanding any other provision of law, the payment of 
any portion of an annuity computed under section 3(b) to a surviving 
former spouse in accordance with a court decree of divorce, annulment, 
or legal separation or the terms of any court-approved property 
settlement incident to any such court decree shall not be terminated 
upon the death of the individual who performed the service with respect 
to which such annuity is so computed unless such termination is 
otherwise required by the terms of such court decree.''.
    (b) Effective Date.--The amendment made by this section shall take 
effect 1 year after the date of the enactment of this Act.

               TITLE III--SIMPLIFIED INVESTMENT STANDARDS

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

    (a) Amendments to the Employee Retirement Income Security Act of 
1974.--Section 408 of the Employee Retirement Income Security Act of 
1974 (29 U.S.C. 1108) is amended by adding at the end the following new 
subsection:
    ``(g)(1) Pursuant to regulations issued by the Secretary, in the 
case of a qualifying transaction between an employee benefit plan and 
an eligible person which would, but for this subsection, be in 
violation of a restriction imposed by section 406 or 407(a), if--
            ``(A) the eligible person submits to the Secretary, not 
        later than 60 days after the date of the transaction, an 
        application for an exemption under subsection (a) from such 
        restriction in the case of such transaction,
            ``(B) the Secretary determines not to grant the exemption, 
        and
            ``(C) the transaction is reversed within 60 days after the 
        date of the Secretary's determination,
then the transaction shall be exempted under subsection (a) from 
treatment as a violation of such restriction.
    ``(2) For purposes of this subsection--
            ``(A) The term `qualifying transaction' means, in 
        connection with an eligible person, a transaction between an 
        employee benefit plan and such eligible person constituting the 
        purchase or sale of a financial product, if--
                    ``(i) prior to engaging in the transaction, the 
                plan acquires from the eligible person a sufficient 
                guarantee, consisting of a letter of credit or other 
                form of written guarantee, issued by a bank or similar 
                financial institution (other than the eligible person 
                requesting the exemption or an affiliate) regulated and 
                supervised by, and subject to periodic examination by, 
                an agency of a State or of the Federal Government, in a 
                stated amount equal, as of the close of business on the 
                day preceding the transaction, to not less than 100 
                percent of the amount of plan assets involved in the 
                transaction, plus interest on that amount at a rate 
                determined by the parties to the transaction, or in the 
                absence of such determination, an interest rate equal 
                to the underpayment rate defined in section 6621(a)(2) 
                of the Internal Revenue Code of 1986,
                    ``(ii) the eligible person receives in such 
                transaction not more than reasonable compensation,
                    ``(iii) such transaction is expressly approved by 
                an independent fiduciary who has investment authority 
                with respect to the plan assets involved in the 
                transaction, and
                    ``(iv) immediately after the acquisition of the 
                financial product--
                            ``(I) the fair market value of such 
                        financial product does not exceed 1 percent of 
                        the fair market value of the assets of the 
                        plan, and
                            ``(II) the aggregate fair market value of 
                        all outstanding financial products acquired by 
                        the plan from the eligible person pursuant to 
                        this subsection does not exceed 5 percent of 
                        the fair market value of the assets of the 
                        plan.
    ``(3) For purposes of this subsection--
            ``(A) A guarantee referred to in paragraph (2) is 
        `sufficient' if such guarantee is irrevocable and, under the 
        terms of the guarantee, if the Secretary determines not to 
        grant the exemption, the plan has the unconditional right to 
        apply the amounts under the guarantee to any losses suffered 
        and to the payment of interest determined under the terms of 
        the transaction. A guarantee shall not be treated as failing to 
        be `sufficient' solely because, under the terms of the 
        guarantee, if the Secretary grants the exemption, the guarantee 
        may expire without any payments made to the plan.
            ``(B) The term `eligible person' means a person that--
                    ``(i) consists of--
                            ``(I) a bank as defined in section 
                        202(a)(2) of the Investment Advisers Act of 
                        1940,
                            ``(II) an investment adviser registered 
                        under the Investment Advisers Act of 1940,
                            ``(III) an insurance company which is 
                        qualified to do business in more than one 
                        State, or
                            ``(IV) a broker-dealer registered under the 
                        Securities Exchange Act of 1934,
                    ``(ii) has shareholders' or partners' equity in 
                excess of $1,000,000, and
                    ``(iii) is not described in section 411.''.
    (b) Effective Date.--The amendment made by this section shall apply 
with respect to transactions occurring after December 31, 2005.

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

    (a) Amendments to the Employee Retirement Income Security Act of 
1974.--
            (1) In general.--Section 408(b) of the Employee Retirement 
        Income Security Act of 1974 (29 U.S.C. 1108(b)) is amended by 
        adding at the end the following new paragraph:
            ``(14)(A) Any transaction described in subparagraph (B) in 
        connection with the provision of investment advice described in 
        section 3(21)(A)(ii), in any case in which--
                    ``(i) the plan provides for individual accounts and 
                permits a participant or beneficiary to exercise 
                control over assets in his or her account,
                    ``(ii) the advice is qualified investment advice 
                provided to a participant or beneficiary of the plan by 
                a fiduciary adviser in connection with any sale, 
                acquisition, or holding of a security or other property 
                for purposes of investment of plan assets, and
                    ``(iii) the requirements of subsection (g) are met 
                in connection with each instance of the provision of 
                the advice.
            ``(B) The transactions described in this subparagraph are 
        the following:
                    ``(i) the provision of the advice to the 
                participant or beneficiary;
                    ``(ii) the sale, acquisition, or holding of a 
                security or other property (including any lending of 
                money or other extension of credit associated with the 
                sale, acquisition, or holding of a security or other 
                property) pursuant to the advice; and
                    ``(iii) the direct or indirect receipt of fees or 
                other compensation by the fiduciary adviser or an 
                affiliate thereof (or any employee, agent, or 
                registered representative of the fiduciary adviser or 
                affiliate) in connection with the provision of the 
                advice.''.
            (2) Requirements.--Section 408 of such Act is amended 
        further by adding at the end the following new subsection:
    ``(g) Requirements for Exemption From Prohibited Transactions With 
Respect to Provision of Investment Advice.--
            ``(1) In general.--The requirements of this subsection are 
        met in connection with the provision of qualified investment 
        advice provided to a participant or beneficiary of an employee 
        benefit plan by a fiduciary adviser with respect to the plan in 
        connection with any sale, acquisition, or holding of a security 
        or other property for purposes of investment of amounts held by 
        the plan, if the requirements of the following subparagraphs 
        are met:
                    ``(A) Written disclosures.--At a time 
                contemporaneous with the provision of the advice in 
                connection with the sale, acquisition, or holding of 
                the security or other property, the fiduciary adviser 
                shall provide to the recipient of the advice a clear 
                and conspicuous notification, written in a manner to be 
                reasonably understood by the average plan participant 
                pursuant to regulations which shall be prescribed by 
                the Secretary (including mathematical examples), of the 
                following:
                            ``(i) Interests held by the fiduciary 
                        adviser.--Any interest of the fiduciary adviser 
                        in, or any affiliation or contractual 
                        relationship of the fiduciary adviser (or 
                        affiliates thereof) with any third party having 
                        an interest in, the security or other property.
                            ``(ii) Related fees or compensation in 
                        connection with the provision of the advice.--
                        All fees or other compensation relating to the 
                        advice (including fees or other compensation 
                        itemized with respect to each security or other 
                        property with respect to which the advice is 
                        provided) that the fiduciary adviser (or any 
                        affiliate thereof) is to receive (including 
                        compensation provided by any third party) in 
                        connection with the provision of the advice or 
                        in connection with the sale, acquisition, or 
                        holding of the security or other property.
                            ``(iii) Ongoing fees or compensation in 
                        connection with the security or property 
                        involved.--All fees or other compensation that 
                        the fiduciary adviser (or any affiliate 
                        thereof) is to receive, on an ongoing basis, in 
                        connection with any security or other property 
                        with respect to which the fiduciary adviser 
                        gives the advice.
                            ``(iv) Applicable limitations on scope of 
                        advice.--Any limitation placed (in accordance 
                        with the requirements of this subsection) on 
                        the scope of the advice to be provided by the 
                        fiduciary adviser with respect to the sale, 
                        acquisition, or holding of the security or 
                        other property.
                            ``(v) Types of services generally 
                        offered.--The types of services offered by the 
                        fiduciary adviser in connection with the 
                        provision of qualified investment advice by the 
                        fiduciary adviser.
                            ``(vi) Fiduciary status of the fiduciary 
                        adviser.--That the fiduciary advisor is a 
                        fiduciary of the plan.
                    ``(B) Disclosure by fiduciary adviser in accordance 
                with applicable securities laws.--The fiduciary adviser 
                shall provide appropriate disclosure, in connection 
                with the sale, acquisition, or holding of the security 
                or other property, in accordance with all applicable 
                securities laws.
                    ``(C) Transaction occurring solely at direction of 
                recipient of advice.--The sale, acquisition, or holding 
                of the security or other property shall occur solely at 
                the direction of the recipient of the advice.
                    ``(D) Reasonable compensation.--The compensation 
                received by the fiduciary adviser and affiliates 
                thereof in connection with the sale, acquisition, or 
                holding of the security or other property shall be 
                reasonable.
                    ``(E) Arm's length transaction.--The terms of the 
                sale, acquisition, or holding of the security or other 
                property shall be at least as favorable to the plan as 
                an arm's length transaction would be.
            ``(2) Continued availability of information for at least 1 
        year.--The requirements of paragraph (1)(A) shall be deemed not 
        to have been met in connection with the initial or any 
        subsequent provision of advice described in paragraph (1) if, 
        at any time during the 1-year period following the provision of 
        the advice, the fiduciary adviser fails to maintain the 
        information described in clauses (i) through (iv) of 
        subparagraph (A) in currently accurate form or to make the 
        information available, upon request and without charge, to the 
        recipient of the advice.
            ``(3) Evidence of compliance maintained for at least 6 
        years.--A fiduciary adviser referred to in paragraph (1) who 
        has provided advice referred to in such paragraph shall, for a 
        period of not less than 6 years after the provision of the 
        advice, maintain any records necessary for determining whether 
        the requirements of the preceding provisions of this subsection 
        and of subsection (b)(14) have been met. A transaction 
        prohibited under section 406 shall not be considered to have 
        occurred solely because the records are lost or destroyed prior 
        to the end of the 6-year period due to circumstances beyond the 
        control of the fiduciary adviser.
            ``(4) Model disclosure forms.--The Secretary shall 
        prescribe regulations setting forth model disclosure forms to 
        assist fiduciary advisers in complying with the disclosure 
        requirements of this subsection.
            ``(5) Exemption for employers contracting for qualified 
        investment advice.--
                    ``(A) Reliance on contractual arrangements.--
                Subject to subparagraph (B), a plan sponsor or other 
                person who is a fiduciary (other than a fiduciary 
                adviser) shall not be treated as failing to meet the 
                requirements of this part solely by reason of the 
                provision of qualified investment advice (or solely by 
                reason of contracting for or otherwise arranging for 
                the provision of the investment advice), if--
                            ``(i) the advice is provided by a fiduciary 
                        adviser pursuant to an arrangement between the 
                        plan sponsor or other fiduciary and the 
                        fiduciary adviser for the provision by the 
                        fiduciary adviser of qualified investment 
                        advice, and
                            ``(ii) the terms of the arrangement require 
                        compliance by the fiduciary adviser with the 
                        requirements of this subsection.
                    ``(B) Continued duty for employer to prudently 
                select and review fiduciary advisers.--Nothing in 
                subparagraph (A) shall be construed to exempt a plan 
                sponsor or other person who is a fiduciary from any 
                requirement of this part for the prudent selection and 
                periodic review of a fiduciary adviser with whom the 
                plan sponsor or other person enters into an arrangement 
                for the provision of qualified investment advice. The 
                plan sponsor or other person who is a fiduciary shall 
                not be liable under this part with respect to the 
                specific qualified investment advice given by the 
                fiduciary adviser to any particular recipient of the 
                advice. Pursuant to regulations which shall be 
                prescribed by the Secretary, the fiduciary adviser 
                shall provide appropriate disclosures to the plan 
                sponsor to enable the plan sponsor to fulfill its 
                fiduciary responsibilities under this part. In 
                connection with the provision of the advice by a 
                fiduciary adviser on an ongoing basis, such regulations 
                shall provide for such disclosures on at least an 
                annual basis.
                    ``(C) Plan assets may be used to pay reasonable 
                expenses.--Nothing in this part shall be construed to 
                preclude the use of plan assets to pay for reasonable 
                expenses in providing qualified investment advice.
            ``(6) Annual reviews by the secretary.--The Secretary shall 
        conduct annual reviews of randomly selected fiduciary advisers 
        providing qualified investment advice to participants and 
        beneficiaries. In the case of each review, the Secretary shall 
        review the following:
                    ``(A) Compliance by advice computer models with 
                generally accepted investment management principles.--
                The extent to which advice computer models employed by 
                the fiduciary adviser comply with generally accepted 
                investment management principles.
                    ``(B) Compliance with disclosure requirements.--The 
                extent to which disclosures provided by the fiduciary 
                adviser have complied with the requirements of this 
                subsection.
                    ``(C) Extent of violations.--The extent to which 
                any violations of fiduciary duties have occurred in 
                connection with the provision of the advice.
                    ``(D) Extent of reported complaints.--The extent to 
                which complaints to relevant agencies have been made in 
                connection with the provision of the advice.
        Any proprietary information obtained by the Secretary shall be 
        treated as confidential.
            ``(7) Duty of conflicted fiduciary adviser to provide for 
        alternative independent advice.--
                    ``(A) In general.--In connection with any qualified 
                investment advice provided by a fiduciary adviser to a 
                participant or beneficiary regarding any security or 
                other property, if the fiduciary adviser--
                            ``(i) has an interest in the security or 
                        other property, or
                            ``(ii) has an affiliation or contractual 
                        relationship with any third party that has an 
                        interest in the security or other property,
                the requirements of paragraph (1) shall be treated as 
                not met in connection with the advice unless the 
                fiduciary adviser has arranged, as an alternative to 
                the advice that would otherwise be provided by the 
                fiduciary advisor, for qualified investment advice with 
                respect to the security or other property provided by 
                at least one alternative investment adviser meeting the 
                requirements of subparagraph (B).
                    ``(B) Independence and qualifications of 
                alternative investment adviser.--Any alternative 
                investment adviser whose qualified investment advice is 
                arranged for by a fiduciary adviser pursuant to 
                subparagraph (A)--
                            ``(i) shall have no material interest in, 
                        and no material affiliation or contractual 
                        relationship with any third party having a 
                        material interest in, the security or other 
                        property with respect to which the investment 
                        adviser is providing the advice, and
                            ``(ii) shall meet the requirements of a 
                        fiduciary adviser under paragraph (8)(A), 
                        except that an alternative investment adviser 
                        may not be a fiduciary of the plan other than 
                        in connection with the provision of the advice.
                    ``(C) Scope and fees of alternative investment 
                advice.--Any qualified investment advice provided 
                pursuant to this paragraph by an alternative investment 
                adviser shall be of the same type and scope, and 
                provided under the same terms and conditions (including 
                no additional charge to the participant or 
                beneficiary), as apply with respect to the qualified 
                investment advice to be provided by the fiduciary 
                adviser.
            ``(8) Fiduciary adviser defined.--For purposes of this 
        subsection and subsection (b)(14)--
                    ``(A) In general.--The term `fiduciary adviser' 
                means, with respect to a plan, a person who--
                            ``(i) is a fiduciary of the plan by reason 
                        of the provision of qualified investment advice 
                        by such person to a participant or beneficiary,
                            ``(ii) meets the qualifications of 
                        subparagraph (B), and
                            ``(iii) meets the additional requirements 
                        of subparagraph (C).
                    ``(B) Qualifications.--A person meets the 
                qualifications of this subparagraph if such person--
                            ``(i) is registered as an investment 
                        adviser under the Investment Advisers Act of 
                        1940 (15 U.S.C. 80b-1 et seq.),
                            ``(ii) if not registered as an investment 
                        adviser under such Act by reason of section 
                        203A(a)(1) of such Act (15 U.S.C. 80b-
                        3a(a)(1)), is registered under the laws of the 
                        State in which the fiduciary maintains its 
                        principal office and place of business, and, at 
                        the time the fiduciary last filed the 
                        registration form most recently filed by the 
                        fiduciary with such State in order to maintain 
                        the fiduciary's registration under the laws of 
                        such State, also filed a copy of such form with 
                        the Secretary,
                            ``(iii) is registered as a broker or dealer 
                        under the Securities Exchange Act of 1934 (15 
                        U.S.C. 78a et seq.),
                            ``(iv) is a bank or similar financial 
                        institution referred to in section 408(b)(4),
                            ``(v) is an insurance company qualified to 
                        do business under the laws of a State, or
                            ``(vi) is any other comparable entity which 
                        satisfies such criteria as the Secretary 
                        determines appropriate.
                    ``(C) Additional requirements with respect to 
                certain employees or other agents of certain 
                advisers.--A person meets the additional requirements 
                of this subparagraph if every individual who is 
                employed (or otherwise compensated) by such person and 
                whose scope of duties includes the provision of 
                qualified investment advice on behalf of such person to 
                any participant or beneficiary is--
                            ``(i) a registered representative of such 
                        person,
                            ``(ii) an individual described in subclause 
                        (I), (II), or (III) of subparagraph (A)(ii), or
                            ``(iii) such other comparable qualified 
                        individual as may be designated in regulations 
                        of the Secretary.
            ``(9) Additional definitions.--For purposes of this 
        subsection and subsection (b)(14)--
                    ``(A) Qualified investment advice.--The term 
                `qualified investment advice' means, in connection with 
                a participant or beneficiary, investment advice 
                referred to in section 3(21)(A)(ii) which--
                            ``(i) consists of an individualized 
                        recommendation to the participant or 
                        beneficiary with respect to the purchase, sale, 
                        or retention of securities or other property 
                        for the individual account of the participant 
                        or beneficiary, in accordance with generally 
                        accepted investment management principles, and
                            ``(ii) takes into account all investment 
                        options under the plan.
                    ``(B) Affiliate.--The term `affiliate' of another 
                entity means an affiliated person of such entity (as 
                defined in section 2(a)(3) of the Investment Company 
                Act of 1940 (15 U.S.C. 80a-2(a)(3))).
                    ``(C) Registered representative.--The term 
                `registered representative' of another entity means a 
                person described in section 3(a)(18) of the Securities 
                Exchange Act of 1934 (15 U.S.C. 78c(a)(18)) 
                (substituting such entity for the broker or dealer 
                referred to in such section) or a person described in 
                section 202(a)(17) of the Investment Advisers Act of 
                1940 (15 U.S.C. 80b-2(a)(17)) (substituting such entity 
                for the investment adviser referred to in such 
                section).''.
    (b) Enforcement.--
            (1) Liability for breach.--
                    (A) Liability in connection with individual account 
                plans.--Section 409 of such Act (29 U.S.C. 1109) is 
                amended by adding at the end the following new 
                subsection:
    ``(c)(1) In any case in which the provision by a fiduciary adviser 
of qualified investment advice to a participant or beneficiary 
regarding any security or other property consists of a breach described 
in subsection (a), the fiduciary adviser shall be personally liable to 
make good to the individual account of the participant or beneficiary 
any losses to the individual account resulting from the breach, and to 
restore to the individual account any profits of the fiduciary adviser 
which have been made through use of assets of the individual account 
by--
            ``(A) the fiduciary adviser, or
            ``(B) any other party with respect to whom a material 
        affiliation or contractual relationship of the fiduciary 
        adviser resulted in a violation of section 408(g)(1)(A) in 
        connection with the advice.
    ``(2) In the case of any action under this title by a participant 
or beneficiary against a fiduciary adviser for relief under this 
subsection in connection with the provision of any qualified investment 
advice--
            ``(A) if the participant or beneficiary shows that the 
        fiduciary adviser had any interest in, or had any affiliation 
        or contractual relationship with a third party having an 
        interest in, the security or other property, there shall be a 
        presumption (rebuttable by a preponderance of the evidence) 
        that the fiduciary adviser failed to meet the requirements of 
        subparagraphs (A) and (B) of section 404(a)(1) in connection 
        with the provision of the advice, and
            ``(B) the dispute may be settled by arbitration, but only 
        pursuant to terms and conditions established by agreement 
        entered into voluntarily by both parties after the commencement 
        of the dispute.
    ``(3) For purposes of this subsection, the terms `fiduciary 
adviser' and `qualified investment advice' shall have the meanings 
provided such terms in subparagraphs (A) and (B), respectively, of 
section 406(g)(7).''.
                    (B) Limitation on exemption from liability.--
                Section 403(c) of such Act (29 U.S.C. 1104(c)) is 
                amended--
                            (i) by redesignating paragraph (2) as 
                        paragraph (3) (and by adjusting the margination 
                        of such paragraph to full measure and adjusting 
                        the margination of subparagraphs (A) through 
                        (B) thereof accordingly); and
                            (ii) by inserting after paragraph (1) the 
                        following new paragraph:
    ``(2)(A) In any case in which--
            ``(i) a participant or beneficiary exercises control over 
        the assets in his or her account by means of a sale, 
        acquisition, or holding of a security or other property with 
        regard to which qualified investment advice was provided by a 
        fiduciary adviser, and
            ``(ii) any transaction in connection with the exercise of 
        such control is not a prohibited transaction solely by reason 
        of section 408(b)(14), paragraph (1) shall not apply with 
        respect to the fiduciary adviser in connection with the 
        provision of the advice.
    ``(B) For purposes of this subsection, the terms `fiduciary 
adviser' and `qualified investment advice' shall have the meanings 
provided such terms in subparagraphs (A) and (B), respectively, of 
section 408(g)(7).''.
            (2) Attorney's fees.--Section 502(g) of such Act (29 U.S.C. 
        1132(g)) is amended--
                    (A) in paragraph (1), by inserting ``or (3)'' after 
                ``paragraph (2)''; and
                    (B) by adding at the end the following new 
                paragraph:
    ``(3) In any action under this title by the participant or 
beneficiary against a fiduciary adviser for relief under section 409(c) 
in which the plaintiff prevails, the court shall allow a reasonable 
attorney's fee and costs of action to the prevailing plaintiff.''.
            (3) Applicability of state fraud laws.--Section 514(b) of 
        such Act (29 U.S.C. 1144(b)) is amended--
                    (A) by redesignating paragraph (9) as paragraph 
                (10); and
                    (B) by inserting after paragraph (8) the following 
                new paragraph:
    ``(9) Nothing in this title shall be construed to supersede any 
State action for fraud against a fiduciary adviser for any act or 
failure to act by the fiduciary adviser constituting a violation of 
section 409(c).''.
    (c) Effective Date.--The amendments made by this section shall 
apply with respect to advice referred to in section 3(21)(A)(ii) of the 
Employee Retirement Income Security Act of 1974 provided on or after 
January 1, 2006.

SEC. 303. PARTICIPATION OF PARTICIPANTS IN TRUSTEESHIP OF SINGLE-
              EMPLOYER PLANS PROVIDING FOR EMPLOYEE CONTRIBUTIONS.

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

SEC. 304. DIVERSIFICATION OF INVESTMENT OF ACCOUNT ASSETS HELD UNDER 
              INDIVIDUAL ACCOUNT PLANS.

    (a) In General.--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) Diversification of Investment of Account Assets Held Under 
Individual Account Plans.--
            ``(1) In general.--In the case of an individual account 
        plan under which a participant or beneficiary is permitted to 
        exercise control over assets in his or her account, with 
        respect to the assets in the account to which the participant 
        or beneficiary has a nonforfeitable right and which consist of 
        employer securities which are readily tradable on an 
        established securities market, the plan shall meet the 
        requirements of paragraphs (2), (3), (4), (5), (6), and (7).
            ``(2) Assets attributable to employee contributions.--In 
        the case of any portion of the account assets described in 
        paragraph (1) which is attributable to employee contributions, 
        there shall be no restrictions on the right of a participant or 
        beneficiary to allocate the assets in such portion to any 
        investment option provided under the plan.
            ``(3) Elective deferrals invested in employer securities.--
                    ``(A) In general.--In the case of the portion of 
                the account assets described in paragraph (1) which is 
                attributable to elective deferrals and is invested in 
                employer securities, a plan meets the requirements of 
                this paragraph if each applicable individual in such 
                plan may elect to direct the plan to divest any portion 
                of such securities in the individual's account and to 
                reinvest an equivalent amount in other investment 
                options which meet the requirements of paragraph (5). 
                The preceding sentence shall apply to the extent that 
                the amount attributable to such reinvested portion 
                exceeds the amount to which a prior election under this 
                paragraph or section 401(a)(28) of the Internal Revenue 
                Code of 1986 applies.
                    ``(B) Applicable individual.--For purposes of this 
                paragraph, the term `applicable individual' means--
                            ``(i) any participant in the plan,
                            ``(ii) any beneficiary who is an alternate 
                        payee (within the meaning of section 
                        206(d)(3)(K)) under an applicable qualified 
                        domestic relations order (within the meaning of 
                        section 206(d)(3)(B)(i)), and
                            ``(iii) any beneficiary of a deceased 
                        participant or alternate payee.
            ``(4) Other employer contributions.--
                    ``(A) In general.--In the case of the portion of 
                the account assets described in paragraph (1) which is 
                attributable to employer contributions (other than 
                elective deferrals) and is invested in employer 
                securities, a plan meets the requirements of this 
                paragraph if each qualified participant in the plan may 
                elect to direct the plan to divest any portion of such 
                securities in the participant's account and to reinvest 
                an equivalent amount in other investment options which 
                meet the requirements of paragraph (6). The preceding 
                sentence shall apply to the extent that the amount 
                attributable to such reinvested portion exceeds the 
                amount to which a prior election under this paragraph 
                or section 401(a)(28) of such Code applies.
                    ``(B) Qualified participant.--For purposes of this 
                paragraph, the term `qualified participant' means--
                            ``(i) any participant in the plan who has 
                        completed at least 3 years of service (as 
                        determined under section 203(a)) under the 
                        plan,
                            ``(ii) any beneficiary who, with respect to 
                        a participant who met the service requirement 
                        in clause (i), is an alternate payee (within 
                        the meaning of section 206(d)(3)(K)) under an 
                        applicable qualified domestic relations order 
                        (within the meaning of section 
                        206(d)(3)(B)(i)), and
                            ``(iii) any beneficiary of a deceased 
                        participant who met the service requirement in 
                        clause (i) or alternate payee described in 
                        clause (ii).
            ``(5) Investment options.--The requirements of this 
        paragraph are met if, with respect to the account assets 
        described in paragraph (1), the plan offers not less than 3 
        investment options (not inconsistent with regulations 
        prescribed by the Secretary) other than employer securities.
            ``(6) Prompt compliance with directions to allocate 
        investments.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), a plan meets the requirements of this 
                paragraph with respect to plan assets described in 
                paragraph (1) if the plan provides that, within 5 days 
                after the date of any election by a participant or 
                beneficiary allocating any such assets to any 
                investment option provided under the plan, the plan 
                administrator shall take such actions as are necessary 
                to effectuate such allocation.
                    ``(B) Special rule for periodic elections.--In any 
                case in which the plan provides for elections 
                periodically during prescribed periods, the 5-day 
                period described in subparagraph (A) shall commence at 
                the end of each such prescribed period.
            ``(7) Notice of rights and of importance of 
        diversification.--A plan meets the requirements of this 
        paragraph if the plan provides that, not later than 30 days 
        prior to the date on which the right of a participant under the 
        plan to his or her accrued benefit becomes nonforfeitable, the 
        plan administrator shall provide to such participant and his or 
        her beneficiaries a written notice--
                    ``(A) setting forth their rights under this section 
                with respect to the accrued benefit, and
                    ``(B) describing the importance of diversifying the 
                investment of account assets.
            ``(8) Preservation of authority of plan to limit 
        investment.--Nothing in this subsection shall be construed to 
        limit the authority of a plan to impose limitations on the 
        portion of plan assets in any account which may be invested in 
        employer securities.
            ``(9) Other definitions and rules.--For purposes of this 
        subsection--
                    ``(A) Employer securities.--The term `employer 
                securities' shall have the meaning given such term by 
                section 407(d)(1) of the Employee Retirement Income 
                Security Act of 1974.
                    ``(B) Elective deferrals.--The term `elective 
                deferrals' means an employer contribution described in 
                section 402(g)(3)(A) of such Code and any employee 
                contribution.
                    ``(C) Election.--Elections under this subsection 
                shall be not less frequently than quarterly.
                    ``(D) Employee stock ownership plan.--The term 
                `employee stock ownership plan' shall have the same 
                meaning given to such term by section 4975(e)(7) of 
                such Code.''.
    (b) Recommendations Relating to Non-Publicly Traded Stock.--Within 
1 year after the date of the enactment of this Act, the Secretary of 
Labor shall transmit to the Committee on Education and the Workforce of 
the House of Representatives and the Committee on Health, Education, 
Labor, and Pensions of the Senate the Secretary's recommendations 
regarding legislative changes relating to treatment, under section 
404(e) of the Employee Retirement Income Security Act of 1974 (added by 
this section), of individual account plans under which a participant or 
beneficiary is permitted to exercise control over assets in his or her 
account, in cases in which such assets do not include employer 
securities which are readily tradable under an established securities 
market.
    (c) Effective Date.--
            (1) In general.--Except as provided in paragraph (2), the 
        amendments made by this section shall apply with respect to 
        plan years beginning after December 31, 2005.
            (2) Exception.--The amendments made by this section shall 
        not apply to employer securities held by an employee stock 
        ownership plan which are not subject to section 401(a)(28) of 
        the Internal Revenue Code of 1986 by reason of section 
        1175(a)(2) of the Tax Reform Act of 1986 (100 Stat. 2519).
            (3) Delayed effective date of existing holdings.--In any 
        case in which a portion of the nonforfeitable accrued benefit 
        of a participant or beneficiary is held in the form of employer 
        securities (as defined in section 407(d)(1) of the Employee 
        Retirement Income Security Act of 1974) immediately before the 
        first date of the first plan year to which the amendments made 
        by this section apply, such portion shall be taken into account 
        only with respect to plan years beginning on or after January 
        1, 2007.

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

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

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

    (a) In General.--Section 101 of the Employee Retirement Income 
Security Act of 1974 (29 U.S.C. 1021) is amended by inserting after 
subsection (e) the following new subsection:
    ``(f) Disclosure Regarding Investments and Voting of Proxies.--
            ``(1) In general.--Within 30 days after receipt by the plan 
        administrator of a written request by a participant or 
        beneficiary for relevant and specific information regarding--
                    ``(A) the nature or extent of any particular 
                investment of plan assets occurring on a particular 
                date specified in the request, or
                    ``(B) the manner in which any right to vote in 
                connection with such investment has been exercised by 
                or under the plan,
        the plan administrator shall furnish such information in 
        writing to such participant or beneficiary. The administrator 
        may make a reasonable charge to cover the cost of furnishing 
        such information.
            ``(2) Standards and review.--The Secretary shall by 
        regulation prescribe--
                    ``(A) standards which must be met by requests made 
                pursuant to this subsection, including standards 
                relating to relevancy and specificity of the 
                information requested, the specificity by which the 
                investment must be identified in the request, and the 
                reasonableness of charges made for furnishing the 
                information, and
                    ``(B) procedures by which plan administrators may 
                rely on such standards in declining requests for 
                information which fail to meet such standards, 
                including methods for obtaining timely and binding 
                determinations by the Secretary regarding whether such 
                standards are being met by particular requests.''.
    (b) Conforming Amendment.--Section 101(h)(1) of such Act (29 U.S.C. 
1021(h)(1)) is amended by inserting ``or subsection (f)'' after ``this 
subsection''.
    (c) Effective Date.--The amendments made by this section shall 
apply with respect to written requests received after December 31, 
2005.

SEC. 307. IMMEDIATE WARNING OF EXCESSIVE STOCK HOLDINGS.

    Section 105 of the Employee Retirement Income Security Act of 1974 
(29 U.S.C. 1025) is amended by adding at the end the following new 
subsection:
    ``(e)(1) Upon receipt of information by the plan administrator of 
an individual account plan indicating that the individual account of 
any participant which had not been excessively invested in employer 
securities is excessively invested in such securities (or that such 
account, as initially invested, is excessively invested in employer 
securities), the plan administrator shall immediately provide to the 
participant a separate, written statement--
            ``(A) indicating that the participant's account has become 
        excessively invested in employer securities,
            ``(B) setting forth the notice described in subsection 
        (e)(7), and
            ``(C) referring the participant to investment education 
        materials and investment advice which shall be made available 
        by or under the plan.
In any case in which such a separate, written statement is required to 
be provided to a participant under this paragraph, each statement 
issued to such participant pursuant to subsection (a) thereafter shall 
also contain such separate, written statement until the plan 
administrator is made aware that such participant's account has ceased 
to be excessively invested in employer securities or the employee, in 
writing, waives the receipt of the notice and acknowledges 
understanding the importance of diversification.
    ``(2) Each notice required under this subsection shall be provided 
in a form and manner which shall be prescribed in regulations of the 
Secretary. Such regulations shall provide for inclusion in the notice a 
prominent reference to the risks of large losses in assets available 
for retirement from excessive investment in employer securities.
    ``(3) For purposes of paragraph (1), a participant's account is 
`excessively invested' in employer securities if more than 10 percent 
of the balance in such account is invested in employer securities (as 
defined in section 407(d)(1)).''.

SEC. 308. REPORT TO PARTICIPANTS AND BENEFICIARIES OF TRADES IN 
              EMPLOYER SECURITIES.

    (a) In General.--Section 104 of the Employee Retirement Income 
Security Act of 1974 (29 U.S.C. 1024) is amended--
            (1) by redesignating subsection (d) as subsection (e); and
            (2) by inserting after subsection (c) the following new 
        subsection:
    ``(d)(1) 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).''.
    (b) Effective Date.--The amendments made by this section shall 
apply with respect to transactions occurring after 90 days after the 
date of the enactment of this Act.

     TITLE IV--IMPROVEMENTS IN PENSION INFORMATION AND ENFORCEMENT

SEC. 401. PENSION BENEFIT INFORMATION.

    (a) Pension Benefit Statements Required on Periodic Basis.--
            (1) In general.--Subsection (a) of section 105 of the 
        Employee Retirement Income Security Act of 1974 (29 U.S.C. 
        1025(a)) is amended----
                    (A) by redesignating paragraphs (1) and (2) as 
                subparagraphs (A) and (B), respectively, and by 
                inserting ``(1)'' after ``(a)'';
                    (B) by striking ``shall furnish to any plan 
                participant or beneficiary who so requests in writing, 
                a statement'' and inserting ``shall, as provided in 
                paragraph (2), provide to plan participants and 
                beneficiaries statements''; and
                    (C) by adding at the end the following new 
                paragraphs:
            ``(2)(A) The statements described in paragraph (1) shall be 
        furnished----
                    ``(i) in the case of a defined benefit plan, at 
                last once every 3 years to participants who have 
                attained age 35,
                    ``(ii) in the case of an individual account plan, 
                at least annually to each participant, and
                    ``(iii) to any participant or beneficiary who so 
                requests in writing.
            ``(B) Subparagraph (A)(i) shall not apply to a plan to 
        which more than 1 unaffiliated employer is required to 
        contribute.
            ``(3) Information furnished under paragraph (1) to a 
        participant in a defined benefit plan (other than at the 
        request of the participant) may be based on reasonable 
        estimates determined under regulations prescribed by the 
        Secretary.
            ``(4)(A) The Secretary of Labor shall develop a model 
        benefit statement which shall be used by plan administrators in 
        complying with the requirements of paragraph (1). Such 
        statement shall include--
                    ``(i) the amount of nonforfeitable accrued benefits 
                as of the statement date which is payable at normal 
                retirement age under the plan,
                    ``(ii) the amount of accrued benefits which are 
                forfeitable but which may become nonforfeitable under 
                the terms of the plan,
                    ``(iii) the amount or percentage of any reduction 
                due to integration of the benefit with the 
                participant's Social Security benefits or similar 
                governmental benefits,
                    ``(iv) information on early retirement benefit and 
                joint and survivor annuity reductions,
                    ``(v) in the case of an individual account plan, 
                the percentage of the net return on investment of plan 
                assets for the preceding plan year (or, with respect to 
                investments directed by the participant, the net return 
                on investment of plan assets for such year so 
                directed), itemized with respect to each type of 
                investment, and, stated separately, the administrative 
                and transaction fees incurred in connection with each 
                such type of investment, and
                    ``(vi) in the case of an individual account plan, 
                the amount and percentage of assets in the individual 
                account that consists of employer securities and 
                employer real property (as defined in paragraphs (1) 
                and (2), respectively, of section 407(d)), as 
                determined as of the most recent valuation date of the 
                plan.
            ``(B) The Secretary shall also develop a separate notice, 
        which shall be included by the plan administrator with the 
        information furnished pursuant to paragraph (1), which advises 
        participants and beneficiaries of generally accepted investment 
        principles, including principles of risk management and 
        diversification for long-term retirement security and the risks 
        of holding substantial assets in a single asset such as 
        employer securities.''.
            (2) Conforming amendment.--Subsection (d) of section 105 of 
        such Act (29 U.S.C. 1025(d)) is repealed.
    (b) Disclosure of Benefit Calculations.--
            (1) In general.--Section 105 of such Act (as amended by the 
        preceding provisions of this section) is amended further--
                    (A) by redesignating subsection (c) as subsection 
                (d); and
                    (B) by inserting after subsection (b) the following 
                new subsection:
    ``(c)(1) In the case of a participant or beneficiary who is 
entitled to a distribution of a benefit under an employee pension 
benefit plan, the administrator of such plan shall provide to the 
participant or beneficiary the information described in paragraph (2) 
upon the written request of the participant or beneficiary.
    ``(2) The information described in this paragraph includes--
            ``(A) a worksheet explaining how the amount of the 
        distribution was calculated and stating the assumptions used 
        for such calculation,
            ``(B) upon written request of the participant or 
        beneficiary, any documents relating to the calculation (if 
        available), and
            ``(C) such other information as the Secretary may 
        prescribe.
Any information provided under this paragraph shall be in a form 
calculated to be understood by the average plan participant.''.
            (2) Conforming amendments.--
                    (A) Section 101(a)(2) of such Act (29 U.S.C. 
                1021(a)(2)) is amended by striking ``105(a) and (c)'' 
                and inserting ``105(a), (c), and (d)''.
                    (B) Section 106(b) of such Act (29 U.S.C. 1026(b)) 
                is amended by striking ``sections 105(a) and 105(c)'' 
                and inserting ``section 105''.
    (c) Effective Date.--
            (1) In general.--The amendments made by this section shall 
        take effect 60 days after the adoption of rules or other 
        guidance to carry out the amendments made by this subsection, 
        which shall include a model notice of generally accepted 
        investment principles, including principles of risk management 
        and diversification.
            (2) Model investment principles.--For purposes of paragraph 
        (1), not later than 120 days after the date of the enactment of 
        this Act, the Secretary of Labor shall issue rules or other 
        guidance and a model notice which meets the requirements of 
        section 105 of the Employee Retirement Income Security Act of 
        1974 added by this section.

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

    (a) In General.--Section 104 of the Employee Retirement Income 
Security Act of 1974 (29 U.S.C. 1024) is amended--
            (1) by redesignating subsection (d) as subsection (e); and
            (2) by inserting after subsection (c) the following new 
        subsection:
    ``(d)(1) The administrator of any employee benefit plan subject to 
this part shall file with the Secretary a written notice of--
            ``(A) the termination of the plan, or
            ``(B) in connection with any plan that is acquired by or 
        merged with another plan, the name and address of the sponsor 
        of the acquired or merged plan.
    ``(2) The notice required under paragraph (1) shall be filed with 
the Secretary not later than 60 days after the effective date of the 
termination, acquisition, or merger.''.
    (b) Effective Date.--The amendments made by this section shall 
apply with respect to terminations, acquisitions, and mergers occurring 
after December 31, 2005.

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

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

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

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

SEC. 405. LIMITED SCOPE AUDITS.

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

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

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

                  ``direct reporting of certain events

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

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

SEC. 407. STUDY OF PENSION TRENDS AND CHARACTERISTICS.

    (a) In General.--Section 513 of the Employee Retirement Income 
Security Act of 1974 (29 U.S.C. 1143) is amended by adding at the end 
the following new subsection:
    ``(d) Pension Surveys.--
            ``(1) In general.--The Secretary shall submit to each House 
        of the Congress, before the close of the second session of each 
        Congress, a report, based on a study of current statistical and 
        survey data, which describes dominant and emerging trends and 
        characteristics of the private pension system, so as to ensure 
        that the Congress is provided with periodic and timely 
        information regarding such system.
            ``(2) Included information.--Each report submitted pursuant 
        to paragraph (1) shall include, but not be limited to, 
        information relating to existing pension plans regarding--
                    ``(A) the types of such plans,
                    ``(B) the level of employer and employee 
                contributions,
                    ``(C) vesting status,
                    ``(D) accrued benefits,
                    ``(E) benefit receipt, and
                    ``(F) form of benefit payments.
        Such information shall be presented by category in connection 
        with cohorts defined on the basis of appropriate attributes of 
        the participants involved, including gender, age, race, and 
        income.
            ``(3) Identification of barriers to pension receipt.--Each 
        report submitted pursuant to paragraph (1) shall also include 
        information which summarizes the types of problems that plan 
        participants and beneficiaries experience in connection with 
        the receipt of promised retirement benefits.''.
    (b) Initial Report.--The initial report submitted pursuant to 
section 513(d) of the Employee Retirement Income Security Act of 1974 
shall be submitted not later than December 31, 2005.

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

    (a) In General.--Section 503 of the Employee Retirement Income 
Security Act of 1974 (29 U.S.C. 1133) is amended--
            (1) by adding at the end of the heading the following: 
        ``and early resolution of pension claims'';
            (2) by inserting ``(a) In General.--'' after ``Sec. 503.''; 
        and
            (3) by adding at the end the following new subsection:
    ``(b) Early Resolution Program for Pension Benefit Claims.--
            ``(1) In general.--The Secretary shall establish, in 
        consultation with national bar and arbitration associations and 
        other interested organizations, an early resolution program for 
        mediation of disputes regarding claims for benefits which have 
        been denied under pension plans.
            ``(2) Mediators.--The program shall provide for recruitment 
        of mediators to serve under the program from individuals who 
        have the requisite expertise for such service. The program 
        shall provide for ongoing training for all mediators in 
        employee benefits law as determined necessary. Upon submission 
        of a claim to mediation proceedings under this subsection, the 
        program shall provide for appointment of a mediator, from the 
        roster of mediators serving under the program, to act as the 
        mediator with regard to the claim. Such appointment shall be 
        through a random selection procedure which shall be prescribed 
        in regulations.
            ``(3) Fees.--The Secretary shall assess fees as necessary 
        from each party to cover the costs of participation in the 
        program. The Secretary may reduce or waive a fee on the basis 
        of inability to pay.
            ``(4) Initiation of proceedings.--A claimant with a dispute 
        which is eligible under the program for submission to mediation 
        thereunder may elect to commence proceedings under the program 
        by means of filing under the program an election for mediation 
        of the dispute. An election to commence mediation proceedings 
        under the program shall be in such form and manner as the 
        Secretary may prescribe. Any such election shall in all cases 
        be voluntary, and any provision of the plan or other 
        arrangement which has the effect of providing for the 
        commencement of such proceedings other than by means of 
        voluntary election by the claimant shall be null and void as a 
        matter of law.
            ``(5) Participation in proceedings.--Upon receipt of the 
        election to commence proceedings, the program shall provide for 
        participation by all relevant parties. Each such party shall 
        participate, and cooperate fully, in the proceedings. The plan 
        administrator shall ensure that a copy of the written record of 
        any claims procedure completed by the plan pursuant to 
        subsection (a) and all relevant plan documents are presented to 
        the mediator within 30 days after commencement of the 
        proceedings. The program shall provide for appropriate 
        confidentiality of the proceedings.
            ``(6) Time limit for proceedings.--The mediation 
        proceedings under the program with respect to the claim in 
        dispute shall be completed within 30 days after compilation of 
        all relevant plan documents relating to the claim has been 
        achieved.
            ``(7) Process nonbinding.--Findings and conclusions made in 
        the mediation proceedings under the program shall be treated as 
        advisory in nature and nonbinding. Except as provided in 
        paragraph (8), the rights of the parties under this title shall 
        not be affected by participation in the mediation proceedings 
        under the program.
            ``(8) Resolution through settlement agreement.--If a case 
        is settled through participation in the mediation proceedings 
        under the program, the mediator shall assist the parties in 
        drawing up an agreement which shall constitute, upon signature 
        of the parties, a binding contract between the parties, which 
        shall be enforceable under section 502 as if the terms of such 
        agreement were terms of the plan.
            ``(9) Oversight.--The Secretary shall provide for ongoing 
        oversight of the program so as to ensure that proceedings are 
        conducted equitably and that mediators meet prescribed 
        standards of performance. The Secretary shall monitor and 
        record the results of mediation proceedings conducted under the 
        program so as to enable comprehensive evaluation of the 
        effectiveness of the program as a means of alternative dispute 
        resolution.
            ``(10) Notice.--The Secretary shall--
                    ``(A) notify individuals of the program or other 
                sources of assistance in resolving benefits claim 
                disputes, and
                    ``(B) provide model information with respect to the 
                program to be included in all summary plan descriptions 
                and benefit determinations.''.
    (b) Effective Date.--The amendments made by this section shall 
apply with respect to claims arising on or after December 31, 2005.

SEC. 409. REVIEW OF BENEFIT DETERMINATIONS.

    (a) De Novo Review.--
            (1) Internal review.--Section 503 of the Employee 
        Retirement Income Security Act of 1974 (as amended by section 
        408) is amended further--
                    (A) by redesignating subsection (b) as subsection 
                (c); and
                    (B) by inserting after subsection (a) the following 
                new subsection:
    ``(b) Review Requirements.--Any review required under subsection 
(a)(2)--
    ``(1) shall be de novo, and
    ``(2) shall be conducted by an individual who did not make the 
initial decision denying the claim and who is authorized to approve 
payment of the claim.''.
            (2) Court review.--Section 502(e) of such Act (29 U.S.C. 
        1132(e)) is amended by adding at the end the following new 
        paragraph:
    ``(3) Notwithstanding any provision by the plan for the exercise by 
a fiduciary of discretionary authority with respect to any benefit 
determination, in any action under paragraph (1)(B) or (3) of 
subsection (a) or in any other action under this section to review a 
final benefit determination under the plan, the review by the court 
shall be de novo, and the court may review all evidence presented.''.
    (b) Application of Common Law Principles of Contract 
Interpretation.--Section 502(e) of such Act (as amended by subsection 
(a)(2)) is amended further by adding at the end the following new 
paragraph:
    ``(4) In interpreting the terms of an employee benefit plan under 
this section, the court shall employ such common law principles of 
contract interpretation as are determined appropriate by the court. 
Nothing in this title shall preclude the Federal courts from developing 
and applying Federal common law for purposes of this paragraph which is 
consistent with the provisions of this title.''.
    (c) Effective Date.--The amendments made by this section shall 
apply with respect to causes of action arising after December 31, 2005.

SEC. 410. ALLOWABLE RELIEF.

    (a) Pre-Judgment Interest, Attorney Fees, and Costs of Action.--
            (1) Pre-judgment interest on unpaid benefits.--Section 
        502(a)(1)(B) of the Employee Retirement Income Security Act of 
        1974 (29 U.S.C. 1132(a)(1)(B)) is amended by inserting 
        ``(together with reasonable pre-judgment interest on unpaid 
        pension plan benefits)'' after ``to recover benefits due to him 
        under the terms of his plan''.
            (2) Attorney fees and costs of action.--Section 502(g) of 
        such Act (29 U.S.C. 1132(g)) is amended--
                    (A) in paragraph (1), by inserting ``or (3)'' after 
                ``paragraph (2)''; and
                    (B) by adding at the end the following new 
                paragraph:
    ``(3) In any action or settlement proceeding under this title with 
respect to an employee pension benefit plan brought by a participant or 
beneficiary under such plan in which the participant or beneficiary 
prevails or substantially prevails, the participant or beneficiary 
shall be entitled to reasonable attorney's fees, reasonable expert 
witness fees, and other reasonable costs relating to the action.''.
    (b) Allowance for Legal Relief.--Section 502(a) of such Act (29 
U.S.C. 1132(a)) is amended, in paragraphs (3)(B), (5)(B), and (8)(B), 
by inserting ``legal or'' before ``equitable'' each place it appears.
    (c) Effective Date.--The amendments made by this section shall 
apply with respect to causes of action arising after December 31, 2005.

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

    (a) In General.--Section 502(c) of the Employee Retirement Income 
Security Act of 1974 (29 U.S.C. 1132(c)) is amended to read as follows:
    ``(c)(1) The Secretary may assess a civil penalty against any 
person of up to $1,000 a day from the date of any failure or refusal by 
such person described in paragraph (2).
    ``(2) A failure or refusal described in this paragraph is any of 
the following:
            ``(A) A failure or refusal by a plan administrator to 
        comply with a request for any information which such 
        administrator is required by this title to furnish to a 
        participant or beneficiary by mailing the material requested to 
        the last known address of the requesting participant or 
        beneficiary within 30 days after such request.
            ``(B) A failure or refusal by a plan administrator to file 
        the annual report required to be filed with the Secretary under 
        section 101(b)(4). For purposes of this subparagraph, an annual 
        report that has been rejected under section 104(a)(4) for 
        failure to provide material information shall not be treated as 
        having been filed with the Secretary.
            ``(C) A failure or refusal by an employer maintaining a 
        plan to meet the notice requirement of section 101(d) with 
        respect to any participant or beneficiary.
            ``(D) A failure or refusal by a plan administrator to meet 
        the requirements of section 101(e)(1) with respect to a 
        participant or beneficiary.
            ``(E) A failure or refusal by an employer maintaining a 
        plan to meet the requirements of section 101(e)(2) with respect 
        to any person.
            ``(F) A failure or refusal by any person to meet the 
        requirements of section 101(f)(1).
            ``(G) A failure or refusal by any person to file the 
        information required to be filed by such person with the 
        Secretary under regulations prescribed pursuant to section 
        101(g).
            ``(H) A failure or refusal by a plan administrator to 
        provide notice to participants and beneficiaries in accordance 
        with section 101(i).
            ``(I) A failure or refusal by a plan administrator to 
        furnish documents to the Secretary, as requested by the 
        Secretary under section 104(a)(6), within 30 days after such a 
        request.
            ``(J) A failure or refusal by a plan administrator to meet 
        the requirements of paragraph (1) or (4) of section 606.
    ``(3) For purposes of this subsection, each violation described in 
subparagraph (A), (C), (D), (E), (F), (H), or (J) of paragraph (2) with 
respect to any single participant, beneficiary, or other person shall 
be treated as a separate violation.
    ``(4) In the case of any failure or refusal described in paragraph 
subparagraph (A), (C), or (J) of paragraph (2) by any administrator or 
employer with respect to any participant, beneficiary, or other person, 
such administrator or employer may, in the court's discretion, be 
liable to such participant, beneficiary, or other person in the amount 
of up to $1,000 a day from the date of such failure or refusal. Any 
liability under this paragraph shall be in addition to any liability 
imposed under paragraph (1).
    ``(5)(A) The Secretary may assess a civil penalty of up to $50,000 
against any administrator who fails to provide the Secretary with any 
notification as required under section 111.
    ``(B) The Secretary may assess a civil penalty of up to $50,000 
against any accountant who knowingly and willfully fails to provide the 
Secretary with any notification as required under section 111.
    ``(6) In addition to any liability imposed under paragraph (1), 
(4), or (5), the court may in its discretion order such other relief as 
it deems proper.
    ``(7) No liability may be imposed on any person under this 
subsection for any failure resulting from matters reasonably beyond the 
control of such person.
    ``(8) The Secretary and the Secretary of Health and Human Services 
shall maintain such ongoing consultation as may be necessary and 
appropriate to coordinate enforcement under this subsection with 
enforcement under section 1144(c)(8) of the Social Security Act.''.
    (b) Conforming Amendment.--Section 502(a)(6) of such Act (29 U.S.C. 
1132(a)(6)) is amended by striking ``under paragraph (2), (4), (5), 
(6), or (7) of subsection (c) or under subsection (i) or (l)'' and 
inserting ``under subsection (c), (i), or (l)''.
    (c) Effective Date.--The amendments made by this section shall 
apply with respect to failures and refusals occurring after December 
31, 2005.

SEC. 412. MISSING PARTICIPANTS AND UNCLAIMED BENEFITS.

    (a) Treatment of Missing Participants of Multiemployer Plans and 
Certain Plans not Otherwise Covered.--Section 4050 of the Employee 
Retirement Income Security Act of 1974 (29 U.S.C. 1350) is amended--
            (1) by redesignating subsections (b) and (c) as subsections 
        (f) and (g), respectively; and
            (2) by inserting after subsection (a) the following new 
        subsections:
    ``(b) Multiemployer Plans.--The corporation shall prescribe rules 
similar to the rules in subsection (a) for multiemployer plans covered 
by this title that terminate under section 4041A.
    ``(c) Elective Transfer of Missing Participant's Benefits to the 
Corporation by Certain Other Plans Upon Termination.--
            ``(1) In general.--The plan administrator of a plan 
        described in paragraph (4) may elect to transfer a missing 
        participant's benefits to the corporation upon termination of 
        the plan.
            ``(2) Information to the corporation.--To the extent 
        provided in regulations, the plan administrator of a plan 
        described in paragraph (4) shall, upon termination of the plan, 
        provide the corporation information with respect to the 
        benefits of a missing participant if the plan transfers such 
        benefits--
                    ``(A) to the corporation, or
                    ``(B) to an entity other than the corporation or a 
                plan described in paragraph (4)(B)(ii).
            ``(3) Payment by the corporation.--If benefits of a missing 
        participant were transferred to the corporation under paragraph 
        (1), the corporation shall, upon location of the participant or 
        beneficiary, pay to the participant or beneficiary the amount 
        transferred (or the appropriate survivor benefit) either--
                    ``(A) in a single sum (plus interest), or
                    ``(B) in such other form as is specified in 
                regulations of the corporation.
            ``(4) Plans described.--A plan is described in this 
        paragraph if--
                    ``(A) the plan is a pension plan (within the 
                meaning of section 3(2))--
                            ``(i) to which the provisions of this 
                        section do not apply (without regard to this 
                        subsection), and
                            ``(ii) which is not a plan described in 
                        paragraphs (2) through (11) of section 4021(b), 
                        and
                    ``(B) at the time the assets are to be distributed 
                upon termination, the plan--
                            ``(i) has missing participants, and
                            ``(ii) has not provided for the transfer of 
                        assets to pay the benefits of all missing 
                        participants to another pension plan (within 
                        the meaning of section 3(2)).
                    ``(5) Certain provisions not to apply.--Subsections 
                (a)(1) and (a)(3) shall not apply to a plan described 
                in paragraph (4).''.
    (b) Treatment of Unclaimed Benefits in Cases not Involving 
Termination or in Cases of Certain Plans.--
            (1) In general.--Section 4050 of such Act (as amended by 
        subsection (a)) is amended further by inserting after 
        subsection (c) the following new subsection:
    ``(d) Treatment of Unclaimed Benefits in Cases not Involving 
Termination or in Cases of Certain Plans.--
            ``(1) Elective transfer of unclaimed benefits to the 
        corporation.--The plan administrator of a plan described in 
        paragraph (6) may elect to transfer unclaimed benefits to the 
        corporation.
            ``(2) Information to the corporation.--The corporation may 
        impose such conditions on transfers of unclaimed benefits to 
        the corporation as the corporation determines are necessary to 
        facilitate administration of this subsection and are not 
        inconsistent with the purposes of this subsection. Such 
        conditions may include requirements that the transferring plan 
        provide to the corporation specified information and 
        documentation.
            ``(3) Payment to the corporation.--With respect to any 
        participant, any transfer of an unclaimed benefit to the 
        corporation shall--
                    ``(A) in the case of a defined benefit plan, be a 
                transfer of the participant's designated benefit, or
                    ``(B) in the case of an individual account plan, be 
                a transfer of the participant's vested account balance 
                under the plan.
            ``(4) Payment by the corporation.--Subject to such 
        reasonable restrictions as may be prescribed in regulations of 
        the corporation (relating to investment limitations and 
        otherwise)--
                    ``(A) unclaimed benefits of a participant or 
                beneficiary which are transferred to the corporation 
                pursuant to this subsection shall be distributed by the 
                corporation to the participant or beneficiary not later 
                than upon application filed by the participant or 
                beneficiary with the corporation in such form and 
                manner as may be prescribed in regulations of the 
                corporation, and
                    ``(B) such benefits shall--
                            ``(i) in the case of an individual account 
                        plan, be paid in a single sum (plus interest) 
                        or in such other form as is specified in 
                        regulations of the corporation, or
                            ``(ii) in the case of a defined benefit 
                        plan, be paid--
                                    ``(I) in an amount based on the 
                                designated benefit and the assumptions 
                                prescribed by the corporation at the 
                                time that the corporation received the 
                                benefit, and
                                    ``(II) in a form determined under 
                                regulations of the corporation.
            ``(5) Notice.--Any transfer of unclaimed benefits of a 
        participant or beneficiary to the corporation pursuant to this 
        subsection may occur only after reasonable advance notice of 
        such transfer is provided by the plan administrator to the 
        participant or beneficiary. The plan administrator shall also 
        provide to the participant or beneficiary notice of any such 
        transfer not later than 30 days after the date of the transfer. 
        Notice mailed to the last known address of the participant or 
        beneficiary shall be treated as a notice to the participant or 
        beneficiary for purposes of this paragraph. Any such notice 
        shall include information regarding procedures for obtaining 
        the distribution of benefits from the corporation in accordance 
        with paragraph (4).
            ``(6) Plans described.--A plan is described in this 
        paragraph if the plan is a pension plan (within the meaning of 
        section 3(2)--
                    ``(A)(i) which has neither terminated nor is in the 
                process of terminating, or
                    ``(ii) in the case of an unclaimed benefit to which 
                section 401(a)(31)(B) of the Internal Revenue Code of 
                1986 applies (other than an unclaimed benefit of a 
                missing participant), which has terminated or is in the 
                process of terminating, and
                    ``(B) which is not a plan described in paragraphs 
                (2) through (11) of section 4021(b).
            ``(7) Certain provisions not to apply.--Subsection (a) 
        shall not apply to a plan described in paragraph (6).''.
            (2) Unclaimed benefit defined.--Subsection (f) of section 
        4050 of such Act (as redesignated by subsection (a)(1)) is 
        amended by adding at the end the following paragraph:
            ``(3) Unclaimed benefit.--The term `unclaimed benefit' 
        means--
                    ``(A) any benefit of a participant or beneficiary 
                which is distributable under the terms of the plan to 
                the participant or beneficiary, if the distribution of 
                the benefit has not commenced within 1 year after the 
                later of the date on which the benefit first became so 
                distributable or the participant's severance from 
                employment;
                    ``(B) any benefit or other amount of a participant 
                or beneficiary which is distributable under the terms 
                of the plan with respect to a missing participant, or
                    ``(C) any benefit to which section 401(a)(31)(B) of 
                the Internal Revenue Code of 1986 applies or would 
                apply if subclause (I) of section 401(a)(31)(B)(i) of 
                such Code did not require the distribution to exceed 
                $1,000.
        A benefit otherwise described in subparagraph (A) shall not be 
        treated as an unclaimed benefit under subparagraph (A) if the 
        participant or beneficiary elects not to have such treatment 
        apply. Any such participant or beneficiary shall be given 
        reasonable notice of the opportunity to make such an election. 
        If the participant or beneficiary fails to make such an 
        election within a reasonable period specified in the notice, 
        any subsequent election shall not be given effect and the 
        benefit shall be treated as an unclaimed benefit. A notice 
        mailed to the last known address of the participant or 
        beneficiary shall be treated as a notice to the participant or 
        beneficiary for purposes of this paragraph.''.
            (3) Conforming amendment.--Section 4021(b) of such Act (29 
        U.S.C. 1321(b)(1)) is amended by striking ``This'' and 
        inserting ``Except to the extent provided in subsections (c) 
        and (d) of section 4050, this''.
    (c) Treatment of Transferred Assets.--Section 4050 of such Act (as 
amended by the preceding provisions of this section) is amended 
further--
            (1) in subsection (a), by striking paragraph (2) and 
        redesignating paragraph (3) as paragraph (2); and
            (2) by inserting after subsection (d) the following new 
        subsection:
    ``(e) Treatment of Transferred Assets.--A transfer to the 
corporation under this section shall be treated as a transfer of assets 
from a terminated plan to the corporation as trustee, and shall be held 
with assets of terminated plans for which the corporation is trustee 
under section 4042, subject to the rules set forth in that section.''.
    (d) Escheat Laws Superseded.--Section 514(b) of such Act (29 U.S.C. 
1144(b)) is amended--
            (1) by redesignating paragraph (9) as paragraph (10), and
            (2) by inserting after paragraph (8) the following new 
        paragraph:
            ``(9) Any escheat or similar law of any State shall be 
        superseded to the extent inconsistent with any transfer or 
        other treatment of unclaimed benefits (as defined in section 
        4050(e)(3)) permitted under section 4050(d).''.
    (e) Effective Dates and Related Rules.--
            (1) In general.--The amendments made by subsection (a) 
        shall apply to terminations occurring after December 31, 2005. 
        the amendments made by subsections (b) and (c) shall apply with 
        respect to transfers occurring after such date. The amendments 
        made by subsection (d) shall apply with respect to transfers or 
        treatment of unclaimed benefits occurring after such date.
            (2) Regulations.--The Pension Benefit Guaranty Corporation 
        shall issue regulations necessary to carry out the amendments 
        made by this section not later than December 31, 2005.

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

    (a) In General.--Section 404(c) of the Employee Retirement Income 
Security Act of 1974 (29 U.S.C. 1104(c)) is amended--
            (1) by adjusting the margination of paragraphs (2) and (3) 
        so as to align them with paragraph (1); and
            (2) by adding at the end the following new paragraph:
    ``(4) For purposes of paragraph (1), in the case of any pension 
plan amendment changing investment options under the plan, the plan 
shall not be treated as permitting a participant or beneficiary to 
exercise control over assets in his or her account unless, under the 
terms of such amendment, the participant or beneficiary is permitted to 
retain any existing investment option with respect to any assets in his 
or her account invested pursuant to such option until such assets are 
otherwise invested by the participant or beneficiary.''.
    (b) Effective Date.--The amendment made by this section shall apply 
with respect to plan amendments adopted after the date of the enactment 
of this Act.

SEC. 414. OFFICE OF PENSION PARTICIPANT ADVOCACY.

    (a) In General.--Title III of the Employee Retirement Income 
Security Act of 1974 (29 U.S.C. 3001 et seq.) is amended by adding at 
the end the following:

          ``Subtitle D--Office of Pension Participant Advocacy

``SEC. 3051. OFFICE OF PENSION PARTICIPANT ADVOCACY.

    ``(a) Establishment.--
            ``(1) In general.--There is established in the Department 
        of Labor an office to be known as the `Office of Pension 
        Participant Advocacy'.
            ``(2) Pension participant advocate.--The Office of Pension 
        Participant Advocacy shall be under the supervision and 
        direction of an official to be known as the `Pension 
        Participant Advocate' who shall--
                    ``(A) have demonstrated experience in the area of 
                pension participant assistance, and
                    ``(B) be selected by the Secretary after 
                consultation with pension participant advocacy 
                organizations.
        The Pension Participant Advocate shall report directly to the 
        Secretary and shall be entitled to compensation at the same 
        rate as the highest rate of basic pay established for the 
        Senior Executive Service under section 5382 of title 5, United 
        States Code.
    ``(b) Functions of Office.--It shall be the function of the Office 
of Pension Participant Advocacy to--
            ``(1) assist participants and beneficiaries in 
        understanding their rights to benefits under employee benefit 
        plans, and, to the extent feasible, assist participants in 
        obtaining such benefits,
            ``(2) evaluate the efforts of the Federal Government, 
        business, and financial, professional, retiree, labor, women's, 
        and other appropriate organizations in assisting and protecting 
        pension plan participants, including--
                    ``(A) serving as a focal point for, and actively 
                seeking out, the receipt of information with respect to 
                the policies and activities of the Federal Government, 
                business, and such organizations which affect such 
                participants,
                    ``(B) identifying significant problems for pension 
                plan participants and the capabilities of the Federal 
                Government, business, and such organizations to address 
                such problems, and
                    ``(C) developing proposals for changes in such 
                policies and activities to correct such problems, and 
                communicating such changes to the appropriate 
                officials,
            ``(3) promote the expansion of pension plan coverage and 
        the receipt of promised benefits by increasing the awareness of 
        the general public of the value of pension plans and by 
        protecting the rights of pension plan participants, including--
                    ``(A) enlisting the cooperation of the public and 
                private sectors in disseminating information, and
                    ``(B) forming private-public partnerships and other 
                efforts to assist pension plan participants in 
                receiving their benefits,
            ``(4) advocate for the full attainment of the rights of 
        pension plan participants, including by making pension plan 
        sponsors and fiduciaries aware of their responsibilities,
            ``(5) give priority to the special needs of low and 
        moderate income participants, and
            ``(6) develop needed information with respect to pension 
        plans, including information on the types of existing pension 
        plans, levels of employer and employee contributions, vesting 
        status, accumulated benefits, benefits received, and forms of 
        benefits.
    ``(c) Reports.--
            ``(1) Annual report.--Not later than December 31 of each 
        calendar year, the Pension Participant Advocate shall report to 
        the Committees on Education and the Workforce and Ways and 
        Means of the House of Representatives and the Committees on 
        Health, Education, Labor, and Pensions and Finance of the 
        Senate on its activities during the fiscal year ending in the 
        calendar year. Such report shall--
                    ``(A) identify significant problems the Advocate 
                has identified,
                    ``(B) include specific legislative and regulatory 
                changes to address the problems, and
                    ``(C) identify any actions taken to correct 
                problems identified in any previous report.
        The Advocate shall submit a copy of such report to the 
        Secretary and any other appropriate official at the same time 
        it is submitted to the committees of Congress.
            ``(2) Specific reports.--The Pension Participant Advocate 
        shall report to the Secretary or any other appropriate official 
        any time the Advocate identifies a problem which may be 
        corrected by the Secretary or such official.
            ``(3) Reports to be submitted directly.--The report 
        required under paragraph (1) shall be provided directly to the 
        committees of Congress without any prior review or comment by 
        the Secretary or any other Federal officer or employee.
    ``(d) Specific Powers.--
            ``(1) Receipt of information.--Subject to such 
        confidentiality requirements as may be appropriate, the 
        Secretary and other Federal officials shall, upon request, 
        provide such information (including plan documents) as may be 
        necessary to enable the Pension Participant Advocate to carry 
        out the Advocate's responsibilities under this section.
            ``(2) Appearances.--The Pension Participant Advocate may 
        represent the views and interests of pension plan participants 
        before any Federal agency, including, upon request of a 
        participant, in any proceeding involving the participant.
            ``(3) Contracting authority.--In carrying out 
        responsibilities under subsection (b)(5), the Pension 
        Participant Advocate may, in addition to any other authority 
        provided by law--
                    ``(A) contract with any person to acquire 
                statistical information with respect to pension plan 
                participants, and
                    ``(B) conduct direct surveys of pension plan 
                participants.''.
    (b) Conforming Amendment.--The table of contents for title III of 
such Act is amended by adding at the end the following:

          ``Subtitle C--Office of Pension Participant Advocacy

``3051. Office of Pension Participant Advocacy.''.
    (c) Effective Date and Transition Rules.--
            (1) Effective date.--The amendment made by this section 
        shall take effect on January 1, 2005.
            (2) Abolishment of the office of participant assistance and 
        communications and related transition rules.--Effective January 
        1, 2005, the Office of Participant Assistance and 
        Communications in the Department of Labor is abolished, and the 
        Secretary of Labor shall provide for the transfer, as 
        appropriate, of the functions and personnel of such Office to 
        the Office of Pension Participant Advocacy established under 
        subtitle D of title III of the Employee Retirement Income 
        Security Act of 1974 (as added by this Act).

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

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

    TITLE V--IMPROVED PENSION PROTECTIONS FOR THE CHANGING WORKFORCE

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

    (a) In General.--Section 206 of the Employee Retirement Income 
Security Act of 1974 (29 U.S.C. 1056) (as amended by sections 105 and 
201) is amended further by adding at the end the following new 
subsection:
    ``(i) Loans From Retirement Plans for Health Insurance and Job 
Training Expenses.--
            ``(1) In general.--Notwithstanding any other provision of 
        this subsection, a pension plan shall provide that a 
        participant or beneficiary who is involuntarily separated from 
        employment may, on the date of such separation, obtain a loan 
        from the plan the proceeds of which are to be used within 6 
        months after the date of such loan--
                    ``(A) for payments for insurance which constitutes 
                medical care for the participant and the participant's 
                spouse and dependents, or
                    ``(B) for job training expenses.
            ``(2) Qualified loan.--For purposes of this subsection, the 
        term `qualified loan' means a loan--
                    ``(A) which by its terms requires interest on the 
                loan to accrue not less frequently than monthly,
                    ``(B) which by its terms requires--
                            ``(i) repayment to begin not later than 18 
                        months after the date of the loan, and
                            ``(ii) repayment in full not later the date 
                        which is 36 months after the date of the loan, 
                        and
                    ``(C) which bears interest from the date of the 
                loan at a rate not less than 2 percentage points below, 
                and not more than 2 percentage points above, the rate 
                for comparable United States Treasury obligations on 
                such date.
            ``(3) Limitation on amount of loans.--The aggregate amount 
        of borrowings for a plan year shall not exceed the sum of the 
        amount of accruals (other than contributions) during the plan 
        year prior to the plan year in which the loan is made.
            ``(4) Limitation on number of loans.--Not more than 3 loans 
        to an individual under this subsection may be outstanding at 
        any time.
            ``(5) Delinquencies treated as distribution.--Any amount 
        required to be paid by a participant or beneficiary under 
        paragraph (2)(B) during any plan year which is not paid at the 
        time required to be paid, and any amount remaining unpaid as of 
        the beginning of the plan year beginning after the period 
        described in paragraph (2)(B)(ii), shall be treated as 
        distributed during such plan year to the participant or 
        beneficiary.''.
    (b) Prohibited Transaction Exemption.--Section 408(b) of such Act 
(29 U.S.C. 1108(b)) is amended by adding at the end the following new 
paragraph:
            ``(14) Any loan made by the plan to a disqualified person 
        who is a participant or beneficiary of the plan if such loan--
                    ``(A) is for the payment of health insurance 
                premiums or job training expenses, and
                    ``(B) meets the requirements of section 206(i).''.
    (c) Effective Date.--The amendments made by this section shall 
apply to loans made after the effective date specified in section 601.

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

    Section 206 of the Employee Retirement Income Security Act of 1974 
(29 U.S.C. 1056) (as amended by sections 105, 201, and 501) is amended 
further by adding at the end the following new subsection:
    ``(j) Direct Transfers of Mandatory Distributions in Excess of 
$1,000.--
            ``(1) In general.--A pension plan shall provide that, if--
                    ``(A) a distribution described in paragraph (2) is 
                made, and
                    ``(B) the distributee does not elect to have such 
                distribution paid directly to an eligible retirement 
                plan and does not elect to receive the distribution 
                directly,
        the plan administrator shall make such transfer to an 
        individual retirement plan of a designated trustee or issuer 
        and shall notify the distributee in writing (either separately 
        or as part of a notice required under section 402(f) of the 
        Internal Revenue Code of 1986) that the distribution may be 
        transferred to another individual retirement plan.
            ``(2) Distribution described.--A distribution from a plan 
        is described in this paragraph if such distribution is an 
        immediate distribution of the entire nonforfeitable accrued 
        benefit of the participant and is in excess of $1,000.
            ``(3) Definitions.--For purposes of this subsection--
                    ``(A) Eligible retirement plan.--The term `eligible 
                retirement plan' has the meaning given such term by 
                section 402(c)(8)(B) of the Internal Revenue Code of 
                1986, except that a qualified trust under section 
                401(a) of such Code shall be considered an eligible 
                retirement plan only if it is a defined contribution 
                plan, the terms of which permit the acceptance of 
                rollover distributions.
                    ``(B) Individual retirement plan.--The term 
                `individual retirement plan' has the meaning given such 
                term by section 7701(a)(37) of the Internal Revenue 
                Code of 1986.''.

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

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

                      TITLE VI--GENERAL PROVISIONS

SEC. 601. GENERAL EFFECTIVE DATE.

    (a) In General.--Except as otherwise provided in this Act, and 
subject to subsection (b), the amendments made by this Act shall apply 
with respect to plan years beginning on or after January 1, 2006.
    (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, 2007, 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, 2008.

SEC. 602. PLAN AMENDMENTS.

    If any amendment made by this Act requires an amendment to any 
plan, such plan amendment shall not be required to be made before the 
first plan year beginning on or after January 1, 2006, if--
            (1) during the period after such amendment made by this Act 
        takes effect and before such first plan year, the plan is 
        operated in accordance with the requirements of such amendment 
        made by this Act, and
            (2) such plan amendment applies retroactively to the period 
        after such amendment made by this Act takes effect and such 
        first plan year.
                                 <all>