1.Short title and table of contents
(a)This Act may be cited as the Retirement Enhancement Act of 2004
.
(b)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
<enum>I</enum><header>Improved participation and vesting</header>
<section id="HB6552BBBD1BB42AC9F18985FBF007600"><enum>101.</enum><header>Minimum coverage requirements</header>
<legis-comment display="no">LAJohnston: Revised 9/20/04, using 9/15/04 draft. Replaced text of new sec. 201A.</legis-comment>
<subsection id="H9BEA4F1991C34421B07672F67179B121"><enum>(a)</enum><header>In general</header><text>Part 2 of subtitle B of title I of the <act-name parsable-cite="ERISA">Employee Retirement Income Security Act of 1974</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/29/201">29 U.S.C. 201 et seq.</external-xref>) is amended by inserting after section 201 the following new section:</text>
<quoted-block style="traditional" other-style="hybrid" act-name="Employee Retirement Income Security Act of 1974" id="H4A38AC03079A45BB972EE2DD1C9C299">
<section id="H737AE7D28FF84C8180A3C49673FAA9ED"><enum>201A.</enum><header>Minimum coverage requirements</header>
<subsection id="H69391256A6694F848D99E55547009300" display-inline="yes-display-inline"><enum>(a)</enum><header>General rule</header><text>Each pension plan maintained by an employer shall benefit all employees of the employer.</text></subsection>
<subsection id="HA933D5A51F3D4506BF00DAD055115859"><enum>(b)</enum><header>Exclusion of certain employees</header>
<paragraph id="HAC19A17AEFE045F6A91D893E7E7CC892" display-inline="no-display-inline"><enum>(1)</enum><header>In general</header><text>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—</text>
<subparagraph id="H3AFEECAFE3D847F5BC1B2D52F419DFF4"><enum>(A)</enum><text>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,</text></subparagraph>
<subparagraph id="H1D6F2764BA00487F81237FD5965F002D"><enum>(B)</enum><text>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</text></subparagraph>
<subparagraph id="HE0F994A41B16492D83EA84E3B4373D4D"><enum>(C)</enum><text>employees who are nonresident aliens and who receive no earned income (within the meaning of <external-xref legal-doc="usc" parsable-cite="usc/26/911">section 911(d)(2)</external-xref> 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).</text></subparagraph></paragraph>
<paragraph id="H676C0C9155AE42A982CD62F7EF13B26C"><enum>(2)</enum><header>Special rules</header>
<subparagraph id="H9148FFD5C2E74B65A667F31F071515AA"><enum>(A)</enum><header>Treatment of employees in units covered by collective bargaining agreements</header><text>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).</text></subparagraph>
<subparagraph id="HF63798DAE06C436185F6852FB5EAEFEA"><enum>(B)</enum><header>Treatment of certain airline employees</header><text>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.</text></subparagraph></paragraph></subsection>
<subsection id="H54666D4E59F146A6A3403C2E587C7D76"><enum>(c)</enum><header>Exclusion of employees not meeting age and service requirements</header>
<paragraph id="H2A3C43B0D03E41F991073068179C3468"><enum>(1)</enum><header>In General</header><text>If a plan—</text>
<subparagraph id="H4FDDA0A7926A44C189F5BB25D766B738"><enum>(A)</enum><text>prescribes, consistent with section 202(a), minimum age and service requirements as a condition of participation, and</text></subparagraph>
<subparagraph id="H443AB49CDDC04C48A254BB60E846EB1F"><enum>(B)</enum><text>excludes all employees not meeting such requirements from participation,</text></subparagraph><continuation-text continuation-text-level="paragraph">then such employees shall be excluded from consideration for purposes of this section.</continuation-text></paragraph>
<paragraph id="HB5DB8FD871D64B5290A7C5DD558C05A1"><enum>(2)</enum><header>Requirements may be met separately with respect to excluded group</header><text>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).</text></paragraph>
<paragraph id="H2268936AD7334209802820AB379C6F02"><enum>(3)</enum><header>Requirements not treated as being met before entry date</header><text>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.</text></paragraph></subsection>
<subsection id="H4B161019DB434E8ABDA8B9FE402C2399"><enum>(d)</enum><header>Line of business exception</header>
<paragraph id="H2AFA0D19BEC24D1CB972167ED513253F"><enum>(1)</enum><header>In General</header><text>If, under <external-xref legal-doc="usc" parsable-cite="usc/26/414">section 414(r)</external-xref> 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.</text></paragraph>
<paragraph id="H32F61F07F1A044A28910DB94B4CEA6F"><enum>(2)</enum><header>Plan must be nondiscriminatory</header><text>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.</text></paragraph></subsection>
<subsection id="HB05D4EA51344494AABF8300745C26BC"><enum>(e)</enum><header>Definitions and special rules</header><text>For purposes of this section—</text>
<paragraph id="H26810603744F45B5AF5D64E0FD7DBC09"><enum>(1)</enum><header>Highly compensated employee</header><text>The term <term>highly compensated employee</term> has the meaning given such term by <external-xref legal-doc="usc" parsable-cite="usc/26/414">section 414(q)</external-xref> of the Internal Revenue Code of 1986.</text></paragraph>
<paragraph id="HE7DD531E301641F383BF5C2D7D0300B9"><enum>(2)</enum><header>Aggregation rules</header><text>An employer may elect to designate—</text>
<subparagraph id="HE9C9D31A0B6C41959000F823AD9DDFE1"><enum>(A)</enum><text>2 or more trusts,</text></subparagraph>
<subparagraph id="HD727187C2F8447CC98CD1F3669091781"><enum>(B)</enum><text>1 or more trusts and 1 or more annuity plans, or</text></subparagraph>
<subparagraph id="H9E09B783384D4FD7BF659BCC403ED7A9"><enum>(C)</enum><text>2 or more annuity plans,</text></subparagraph><continuation-text continuation-text-level="paragraph">as part of 1 plan to determine whether the requirements of this section are met with respect to such plan.</continuation-text></paragraph>
<paragraph id="H6001D0C7CE2448B9B73711B823CF3A9"><enum>(3)</enum><header>Special rules for certain dispositions or acquisitions</header>
<subparagraph id="HC16842B307CC4EB4B65DCC07B45DC061"><enum>(A)</enum><header>In General</header><text>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—</text>
<clause id="H86E705934F8242C797C5D861FAE850C9"><enum>(i)</enum><text>such requirements were met immediately before each such change, and</text></clause>
<clause id="HA413846F0E2C444000C759B922F9E8C"><enum>(ii)</enum><text>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.</text></clause></subparagraph>
<subparagraph id="H9F97FF5318A649A68740E52BF47300AD"><enum>(B)</enum><header>Transition period</header><text>For purposes of subparagraph (A), the term <term>transition period</term> means the period—</text>
<clause id="H092A6D2B6E344766AA6C3E79A3AAF1CC"><enum>(i)</enum><text>beginning on the date of the change in members of a group, and</text></clause>
<clause id="HC9977809C73E456F8E27C8D354DD4332"><enum>(ii)</enum><text>ending on the last day of the 1st plan year beginning after the date of such change.</text></clause></subparagraph></paragraph>
<paragraph id="HA64A8715481A4F2A81BB4B740EA7817"><enum>(4)</enum><header>Eligibility to contribute</header><text>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.</text></paragraph>
<paragraph id="H7B9126C26E3A474FAB36144D93803CF6"><enum>(5)</enum><header>Regulations</header><text>The Secretary of the Treasury shall prescribe such regulations as may be necessary or appropriate to carry out the purposes of this section.</text></paragraph></subsection></section><after-quoted-block>.</after-quoted-block></quoted-block></subsection>
<subsection id="HEF8C9CAA06DD4EFB97C7FCAE555DDC93"><enum>(b)</enum><header>Clerical amendment</header><text>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: </text>
<quoted-block style="traditional" display-inline="no-display-inline" id="HAF27E1A9CF0444B3A6A9E664F2FEDC5B">
<toc regeneration="no-regeneration">
<toc-entry level="section">Sec. 201A. Minimum coverage requirements</toc-entry> </toc><after-quoted-block>.</after-quoted-block></quoted-block></subsection> </section>
<section id="H3C54B03C63224BD49D1598236FE82848"><enum>102.</enum><header>Minimum participation requirements</header>
<subsection id="H70144A8F95A64DBEA46E3893B6B40713"><enum>(a)</enum><header>In General</header><text display-inline="yes-display-inline">Sections 202(a)(3), 203(b)(2), and 204(b)(4) of the <act-name parsable-cite="ERISA">Employee Retirement Income Security Act of 1974</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/29/1052">29 U.S.C. 1052(a)(3)</external-xref>, 1053(b)(2), and 1054(b)(4)) are each amended by striking <quote>1,000 hours</quote> each place it appears and inserting <quote>750 hours</quote>.</text></subsection>
<subsection id="H170A3ACA63E34A9F81E469D3AD9C7E23"><enum>(b)</enum><header>Conforming amendments</header>
<paragraph id="HE0B6AF53B1074D16B6B7C51FDB31ECB9"><enum>(1)</enum><text>Sections 202(a)(3)(D), 203(b)(2)(D), and 204(b)(4)(E) (<external-xref legal-doc="usc" parsable-cite="usc/29/1052">29 U.S.C. 1052(a)(3)(D)</external-xref>, 1053(b)(2)(D), and 1054(b)(4)(E)) are each amended by striking <quote>125 days</quote> and inserting <quote>94 days</quote>.</text></paragraph>
<paragraph id="HBA18E995772A4D47884EFCBC1C76950"><enum>(2)</enum><text>Sections 202(b)(5)(B) and 203(b)(3)(E)(ii) (<external-xref legal-doc="usc" parsable-cite="usc/29/1052">29 U.S.C. 1052(b)(5)(B)</external-xref> and 1053(b)(3)(E)(ii)) are each amended by striking <quote>501 hours</quote> and inserting <quote>376 hours</quote>.</text></paragraph>
<paragraph id="H0C2D35CE04BC4FA48CBCC53BF8FBCB3"><enum>(3)</enum><text>Section 203(b)(3)(A) (<external-xref legal-doc="usc" parsable-cite="usc/29/1053">29 U.S.C. 1053(b)(3)(A)</external-xref>) is amended by striking <quote>500 hours</quote> and inserting <quote>375 hours</quote>.</text></paragraph></subsection></section>
<section id="HDFC6ADC69A1A451BA5D5BBD46B8BF2EF"><enum>103.</enum><header>Faster vesting of benefits under defined contribution plans</header><text display-inline="no-display-inline">Section 203(a) of the <act-name parsable-cite="ERISA">Employee Retirement Income Security Act of 1974</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/29/1053">29 U.S.C. 1053(a)</external-xref>) is amended—</text>
<paragraph id="HD3FAC624015C4EF3BC008C4E3FF129BB"><enum>(1)</enum><text>by striking paragraph (2)(A) and inserting the following:</text>
<quoted-block act-name="Employee Retirement Income Security Act of 1974" id="H22ED7B8F43164BBE81CF71E848B45F86">
<subparagraph id="H3057AAC5F9574F4EA8FEFD5382986B57"><enum>(A)</enum><text>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—</text>
<clause id="H930648CD20EC4DE1AD941DA162F29CF0"><enum>(i)</enum><text>in the case of a defined benefit plan, as of completion by the employee of at least 5 years of service, or</text></clause>
<clause id="HDE307C5F31094618A51388867EC6D503"><enum>(ii)</enum><text>in the case of a defined contribution plan, as of completion by the employee of at least 3 years of service.</text></clause></subparagraph> <after-quoted-block>;</after-quoted-block></quoted-block></paragraph>
<paragraph id="H417F2EB898654311A29B878EA5D2F2B"><enum>(2)</enum><text>in paragraph (2)(B), by inserting after <quote>if</quote> the following: <quote>the plan is a defined benefit plan and, under the plan,</quote>; and</text></paragraph>
<paragraph id="H3CE92E4693B84A0CA834903CD83E1E3C"><enum>(3)</enum><text>in paragraph (4), by striking <quote>paragraph (2) shall be applied—</quote> and all that follows through <quote>subparagraph (B):</quote> and inserting <quote>paragraph (2)(B) shall be applied by substituting for the table contained therein the following table:</quote>.</text></paragraph></section>
<section id="HDBA827C846764545A0A3B8D3166E7BA8"><enum>104.</enum><header>Prohibition of requests by plan sponsors for waiver of employee rights</header>
<subsection id="H038E15E7D9B54013A9C691D3B795E68C"><enum>(a)</enum><header>In general</header><text display-inline="yes-display-inline">Part 2 of subtitle B of title I of the Employee Retirement Income Security Act of 1974 (<external-xref legal-doc="usc" parsable-cite="usc/29/1051">29 U.S.C. 1051 et seq.</external-xref>) is amended—</text>
<paragraph id="H77089261A8EB4B70B19898A81DE8CCE5"><enum>(1)</enum><text>by redesignating section 211 as section 212; and</text></paragraph>
<paragraph id="HD65DD1903C904736BAA3EB002DA9EFA"><enum>(2)</enum><text>by inserting after section 210 the following new section:</text>
<quoted-block id="H0BE1A14BA343495888A398346CEF1E8D" style="traditional">
<section id="HEF2D23018A3E4C5795B7C5A3C8F0C6A5"><enum>211.</enum><header>Prohibition of requests by plan sponsors for waiver of employee rights</header><text display-inline="no-display-inline">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.</text></section><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></subsection>
<subsection id="H0C3113F9975B4036AAE2ADE465FFBD17"><enum>(b)</enum><header>Clerical amendment</header><text>The table of contents in section 1 of such Act is amended—</text>
<paragraph id="H30EE70FF6DAD41D9A6B92D8900CFD37"><enum>(1)</enum><text>by striking the item relating to section 211; and</text></paragraph>
<paragraph id="H15643924C1624B1FA8BCCC979F39538F"><enum>(2)</enum><text>by inserting after the item relating to section 210 the following new items: </text>
<quoted-block style="traditional" id="HF9EAE34139174F2E8B67FC722FA9AA00" display-inline="no-display-inline">
<toc regeneration="no-regeneration">
<toc-entry level="section">Sec. 211. Prohibition of requests by plan sponsors for waiver of employee rights</toc-entry>
<toc-entry level="section">Sec. 212. Effective dates</toc-entry></toc><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></subsection></section>
<section id="H7871A6B775044CC081D908270016E0AD"><enum>105.</enum><header>Model small employer group pension plan</header>
<subsection id="H98D2AD6FDE9B400EAD201114A8380018"><enum>(a)</enum><header>In General</header><text>Section 206 of the <act-name parsable-cite="ERISA">Employee Retirement Income Security Act of 1974</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/29/1056">29 U.S.C. 1056</external-xref>) is amended by adding at the end the following new subsection:</text>
<quoted-block act-name="Employee Retirement Income Security Act of 1974" id="H0C2B0926F21A46D88597DC00A87EF256">
<subsection id="H477C3C187374444DB093794F7F96E318"><enum>(g)</enum><header>Model simplified group pension plans</header>
<paragraph id="H8B1A08B943614B8982F0930800EF8213"><enum>(1)</enum><header>Establishment of model plan</header><text>The Secretary, in consultation with the Secretary of the Treasury, shall prescribe by regulations one or more model simplified group pension plans which would—</text>
<subparagraph id="H78E7411F6941478F9D63BA1D09306B01"><enum>(A)</enum><text>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,</text></subparagraph>
<subparagraph id="H799E7C9C3847465DA954E2783C206C74"><enum>(B)</enum><text>cover all employees of the employer,</text></subparagraph>
<subparagraph id="H8A80266F778F41F8ADCFC765FEDA682B"><enum>(C)</enum><text>accept contributions from successive employers,</text></subparagraph>
<subparagraph id="H57F5B315877F4231B18F17C14F39C380"><enum>(D)</enum><text>readily permit and accept rollovers to and from other qualified plans (as defined in section 203(e)(2)), and</text></subparagraph>
<subparagraph id="H7ABBBCFE48C74434009716D200C749E8"><enum>(E)</enum><text>constitute a plan meeting the requirements of this Act and Internal Revenue Code of 1986.</text></subparagraph><continuation-text continuation-text-level="paragraph">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.</continuation-text></paragraph>
<paragraph id="HF05E6ED780C34626B903135226DD2056"><enum>(2)</enum><header>Advertisement of model plan</header><text>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.</text></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block></subsection>
<subsection id="H397A3D2CEF484C9586CA35BF586638DE"><enum>(b)</enum><header>Exemption of plan sponsor from fiduciary liability</header><text>Section 404(a) of such Act (<external-xref legal-doc="usc" parsable-cite="usc/29/1104">29 U.S.C. 1104(a)</external-xref>) is amended by adding at the end the following new paragraph:</text>
<quoted-block id="HEF78A49C5A8C4CB1B75DDC1132D8E462">
<paragraph indent="up1" id="H2FB971FE9F334B90009088BE16FFEFF"><enum>(3)</enum><text>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).</text></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></subsection>
<subsection id="H102952D8CA4F4CB39CC5D1574332C062"><enum>(c)</enum><header>Initial regulations</header><text>Regulations under section 206(g) of the <act-name parsable-cite="ERISA">Employee Retirement Income Security Act of 1974</act-name> (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.</text></subsection>
<subsection id="H92E01BD308E6408DA13E6C824900776C"><enum>(d)</enum><header>Study</header><text>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 <act-name parsable-cite="ERISA">Employee Retirement Income Security Act of 1974</act-name> 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.</text></subsection></section>
<section id="H0AAD27E206B9488292C6E8229DEDC053"><enum>106.</enum><header>Enforcement under ERISA of requirements for simplified employee pensions</header><text display-inline="no-display-inline">Subtitle A of title III of the <act-name parsable-cite="ERISA">Employee Retirement Income Security Act of 1974</act-name> is amended by adding after section 3004 (<external-xref legal-doc="usc" parsable-cite="usc/29/1204">29 U.S.C. 1204</external-xref>) the following new section:</text>
<quoted-block style="traditional" id="HF7C97EEFEF334B65AA10DAAFC4A8AA94" display-inline="no-display-inline">
<section id="HEE5C70444DA2480C9E484DE541054600"><enum>3005.</enum><header>Treatment of simplified employee pensions</header><text display-inline="yes-display-inline">For purposes of part 5 of subtitle B of title I, the requirements of <external-xref legal-doc="usc" parsable-cite="usc/26/408">section 408(k)</external-xref> 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.</text></section><after-quoted-block>.</after-quoted-block></quoted-block></section>
<enum>II</enum><header>Improved pension protections for women</header>
<section id="HAB6434CB45AB46C4A4B654BBA875527C"><enum>201.</enum><header>Elimination of integration with workers’ compensation and similar benefits</header><text display-inline="no-display-inline">Section 206 of the <act-name parsable-cite="ERISA">Employee Retirement Income Security Act of 1974</act-name> (as amended by section 105(a)) is amended further by adding at the end the following new subsection:</text>
<quoted-block act-name="Employee Retirement Income Security Act of 1974" id="HC9994CEE92364BA4AE976B00C4F3A0F5">
<subsection id="H5E087A6921F24A009E7955A169A802D2"><enum>(h)</enum><header>Integration with workers’ compensation and similar benefits precluded</header><text>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.</text></subsection><after-quoted-block>.</after-quoted-block></quoted-block></section>
<section id="HBA379F2EAF564AEAA3CCD34310CF4653"><enum>202.</enum><header>Spousal consent required for distributions from defined contribution plans</header>
<subsection id="H2EF6279723CF4FA3AFBE05BF1A690CC"><enum>(a)</enum><header>In General</header><text>Section 205(b) of the <act-name parsable-cite="ERISA">Employee Retirement Income Security Act of 1974</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/29/1055">29 U.S.C. 1055(b)</external-xref>) is amended to read as follows:</text>
<quoted-block act-name="Employee Retirement Income Security Act of 1974" id="HDAA65E92CDB44EDB9C4D8475E703CAB8">
<subsection id="H56DAA7ED1FA943818EC88C81F9B9533"><enum>(b)</enum>
<paragraph display-inline="yes-display-inline" id="H6DA6FA93F1034A959137409B87572DFA"><enum>(1)</enum><text>This section shall apply to any defined benefit plan and to any individual account plan.</text></paragraph>
<paragraph indent="up1" id="H5281B371973F4B29A5974D7408E48235"><enum>(2)</enum><text>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 <external-xref legal-doc="usc" parsable-cite="usc/26/404">section 404(c)</external-xref> 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.</text></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block></subsection>
<subsection id="H8A7EAAC43BB6414887FAF5FFB882F22"><enum>(b)</enum><header>Hardship distribution</header><text>Section 205 of such Act (<external-xref legal-doc="usc" parsable-cite="usc/29/1055">29 U.S.C. 1055</external-xref>) is amended by adding at the end the following new subsection:</text>
<quoted-block id="H7A5028FADC1A471FAFB7C170F04E84CE">
<subsection id="HDA3BE5F4834E440E9277B4238CC23063"><enum>(m)</enum><text>This section shall not apply to a hardship distribution under <external-xref legal-doc="usc" parsable-cite="usc/26/401">section 401(k)(2)(B)(i)(IV)</external-xref> of the Internal Revenue Code of 1986.</text></subsection><after-quoted-block>.</after-quoted-block></quoted-block></subsection>
<subsection id="HA0A6BD2A08FA42D7A7A200EE58EDC365"><enum>(c)</enum><header>Special rule for cash-outs</header><text>Section 205(g) of such Act (<external-xref legal-doc="usc" parsable-cite="usc/29/1055">29 U.S.C. 1055(g)</external-xref>) is amended—</text>
<paragraph id="H7B41E59267D44BA3B4D6259060874149"><enum>(1)</enum><text>by adjusting the margination of paragraph (3) so as to align such paragraph with the margination of paragraphs (1) and (2); and</text></paragraph>
<paragraph id="H0F82F1A8F37E4826B1FB6F9600008700"><enum>(2)</enum><text>by adding at the end the following new paragraph:</text>
<quoted-block id="HD5DB5E1C86CA45D7874ED4F631C6234D">
<paragraph id="HCB3EC9AB8AC2418CA19EAE0337F7839F" indent="up1"><enum>(4)</enum><header>Special rule for defined contribution plans</header>
<subparagraph id="HB35C295F07E846D6B1A618C1F3DD5B5B"><enum>(A)</enum><header>In General</header><text>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.</text></subparagraph>
<subparagraph id="HDC0C936EB3704159BD35C75332AAE530"><enum>(B)</enum><header>Exception</header><text>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.</text></subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></subsection></section>
<section id="HCEC1DDF64C4C4E908098576EDF6B6868"><enum>203.</enum><header>Modification of joint and survivor annuity requirements</header>
<subsection id="HC7E99A14374943A100A9BE1A9739961"><enum>(a)</enum><header>Option to elect qualified alternative joint and survivor annuity form of benefit upon waiver of qualified joint and survivor annuity form of benefit</header>
<paragraph id="H044C6E2530D049F19D69C447B51C1075"><enum>(1)</enum><header>In general</header><text>Section 205(c)(1)(A) of the Employee Retirement Income Security Act of 1974 (<external-xref legal-doc="usc" parsable-cite="usc/29/1055">29 U.S.C. 1055(c)(1)(A)</external-xref>) is amended to read as follows:</text>
<quoted-block style="traditional" id="H60F5A57811034A07A2A112DE3E2196F6" display-inline="no-display-inline">
<subparagraph id="HD8AB0D64B8E545D9BA7795FD9438C735"><enum>(A)</enum><text>under the plan, each participant—</text>
<clause id="H40477A03C77842E5BF2041161582E600" display-inline="no-display-inline"><enum>(i)</enum><text>may elect at any time during the applicable election period to waive the qualified joint and survivor annuity form of benefit,</text></clause>
<clause id="H0A4522900F134B8B8101C0A80009FEB"><enum>(ii)</enum><text>may elect at any time during the applicable election period to waive the qualified preretirement survivor annuity form of benefit,</text></clause>
<clause id="H2379DFF7DBC14CA7B269B122D9CF8BE"><enum>(iii)</enum><text>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</text></clause>
<clause id="H9EAE46FC1122434E8500DB74D2E75BB9"><enum>(iv)</enum><text>may revoke any such election at any time during the applicable election period, and</text></clause></subparagraph><after-quoted-block>.</after-quoted-block></quoted-block></paragraph>
<paragraph id="H74C327B95DCC4EC18DE8AB7D1B003D70"><enum>(2)</enum><header>Qualified alternative joint and survivor annuity defined</header><text>Section 205(d) of such Act (<external-xref legal-doc="usc" parsable-cite="usc/29/1055">29 U.S.C. 1055(d)</external-xref>) is amended—</text>
<subparagraph id="H076FAAE187A940EEB8239DD0FC7DFE8D"><enum>(A)</enum><text>by redesignating paragraphs (1) and (2) as subparagraphs (A) and (B), respectively;</text> </subparagraph>
<subparagraph id="HFA650CBD185B41F692C7064D5260923C"><enum>(B)</enum><text>by inserting <quote>(1)</quote> after <quote>(d)</quote>; and</text></subparagraph>
<subparagraph id="H9C4B6E376A9E4617B23FC8FDD1C168F2"><enum>(C)</enum><text>by adding at the end the following new paragraph:</text>
<quoted-block style="OLC" id="H8A9D1AE266084127995519B3915EC200" display-inline="no-display-inline">
<paragraph id="HC986BA007C5749AB9BB8BA7603390000" indent="up1"><enum>(2)</enum>
<subparagraph id="HEEE5DDA3A04D42D098E7F4D55CACCAEF" display-inline="yes-display-inline"><enum>(A)</enum><text>For purposes of this section, the term <quote>qualified alternative joint and survivor annuity</quote> means an annuity—</text>
<clause id="HA4DB547F27A54E838E21A71F59259743" indent="up1"><enum>(i)</enum><text>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</text></clause>
<clause id="H0968C82299924EC5844E011490271C48" indent="up1"><enum>(ii)</enum><text>which is the actuarial equivalent of a single annuity for the life of the participant.</text></clause><continuation-text continuation-text-level="subparagraph">Such term also includes any annuity form having the effect of an annuity described in the preceding sentence.</continuation-text></subparagraph>
<subparagraph id="H19FDF1CE4D714577A4C12934AB3E356F" indent="up1"><enum>(B)</enum>
<clause id="H726410CB3BAA4A418B8552767D441400" display-inline="yes-display-inline"><enum>(i)</enum><text>For purposes of subparagraph (A)—</text>
<subclause id="HF170F8FFEC104E3B00FA7EA187D0F1B"><enum>(I)</enum><text>if the base survivor annuity percentage is less than 75 percent, the applicable percentage is 75 percent, and</text></subclause>
<subclause id="H50B2AA0D323E4E5DB16300BF495783BB"><enum>(II)</enum><text>if the base survivor annuity percentage is equal to at least 75 percent, the applicable percentage is 50 percent.</text></subclause></clause>
<clause id="H5B9DDD92D9AD40CF8E25FF701E3E5C5F" indent="up1"><enum>(ii)</enum><text>For purposes of clause (i), the term <quote>survivor annuity percentage</quote> 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.</text></clause></subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></subparagraph></paragraph> </subsection>
<subsection id="HDECECD92EBD5463899ACC7ED736B94B9"><enum>(b)</enum><header>Exemption in the case of plans offering fully subsidized qualified joint and survivor annuities</header><text>Section 205(c)(5) of such Act (<external-xref legal-doc="usc" parsable-cite="usc/29/1055">29 U.S.C. 1055(c)(5)</external-xref>) is amended—</text>
<paragraph id="H85C5F18C3A3A465AA156C22B5D57B592"><enum>(1)</enum><text>by redesignating subparagraph (B) as subparagraph (C); and</text></paragraph>
<paragraph id="H4C7A02EC12704ED58C4431E1C5CF8AA"><enum>(2)</enum><text>by inserting after subparagraph (A) the following new subparagraph:</text>
<quoted-block style="traditional" id="HEC7CEB3DB5DE4DA6884293F799388F74" display-inline="no-display-inline">
<subparagraph id="H3394910D62B14D9B86ECB855CCABD9" indent="up2"><enum>(B)</enum><text>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.</text></subparagraph><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></subsection>
<subsection id="HEA6B7C837F464A07B766766741833277"><enum>(c)</enum><header>Illustration requirement</header><text>Clause (i) of section 205(c)(3)(A) of such Act (<external-xref legal-doc="usc" parsable-cite="usc/29/1055">29 U.S.C. 1055(c)(3)(A)</external-xref>) is amended to read as follows:</text>
<quoted-block id="HAA51ACAF205643FA8687F83804EAA4B6">
<subsection indent="down1" id="H2128D2C171C442BFA9CD82B544FE5900"><enum>(i)</enum><text>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).</text></subsection><after-quoted-block>. </after-quoted-block></quoted-block></subsection>
<subsection id="HC68AE06166EE486A8CC835A73F4E8500"><enum>(d)</enum><header>Rule of construction</header><text>For purposes of section 204(g) of the Employee Retirement Income Security Act of 1974 (<external-xref legal-doc="usc" parsable-cite="usc/29/1054">29 U.S.C. 1054(g)</external-xref>), 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).</text></subsection></section>
<section id="H0B83F8C7C78B4493B146BB7129880015"><enum>204.</enum><header>Division of pension benefits upon divorce</header>
<subsection id="HB0EE47A4D2A04238A0A9D87BF1F410A4"><enum>(a)</enum><header>In General</header><text>Section 206(d)(3) of the <act-name parsable-cite="ERISA">Employee Retirement Income Security Act of 1974</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/29/1056">29 U.S.C. 1056(d)(3)</external-xref>) is amended by redesignating subparagraph (N) as subparagraph (O) and by inserting after subparagraph (M) the following new subparagraph:</text>
<quoted-block act-name="Employee Retirement Income Security Act of 1974" id="H37D3D6A6E55C4448B7C3B4FE9CFB2331">
<subparagraph id="HE2C2B46927EE44F3AFFAAC4F8175B819" indent="up2"><enum>(N)</enum><header>Special rules and procedures for domestic relations orders not specifying division of pension benefits</header>
<clause id="HC165CFCE83654F3D91D9B962446B2D6"><enum>(i)</enum><header>In General</header><text>In any case in which—</text>
<subclause id="H91E9044CFF4C4EE0B8E7ADFCE8B27438"><enum>(I)</enum><text>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,</text></subclause>
<subclause id="H4FAF0A89D0904C07962BF1831F58568E"><enum>(II)</enum><text>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,</text></subclause>
<subclause id="HB3E2BC4D382645C3815BBE6B83D7F552"><enum>(III)</enum><text>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</text></subclause>
<subclause id="H342885F838F54716A3BFC8524683C1FF"><enum>(IV)</enum><text>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,</text></subclause><continuation-text continuation-text-level="clause">such domestic relations order shall be treated as a qualified domestic relations order for purposes of this paragraph.</continuation-text></clause>
<clause id="HCB1D916334194C60BFB1FE5F4E19E937"><enum>(ii)</enum><header>Amount of benefit</header><text>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.</text></clause>
<clause id="H6335CF65B7154B79BBE300471E8C1BC6"><enum>(iii)</enum><header>Marital share</header><text>For purposes of clause (ii), the marital share of a participant’s accrued benefit is an amount equal to the product of—</text>
<subclause id="HD5565D983F7C4AAD9CCE7316EA58BAFF"><enum>(I)</enum><text>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</text></subclause>
<subclause id="H8D30B4D262164654B1176581923769AC"><enum>(II)</enum><text>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.</text></subclause></clause>
<clause id="H280B827C4CD545BBB2B51CA0DAD200A3"><enum>(iv)</enum><header>Applicable percentage</header><text>For purposes of clause (ii), the applicable percentage is—</text>
<subclause id="H246A399725074872AC5DC959711C6FB9"><enum>(I)</enum><text>except as provided in subclause (II), 50 percent, and</text></subclause>
<subclause id="H77D1FFBC402A4133B54982C81E1152F6"><enum>(II)</enum><text>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.</text></subclause></clause>
<clause id="H441B4B13BE4A428097701642F35EFDD"><enum>(v)</enum><header>Notice by participant</header><text>Each participant in a pension plan shall, within 60 days after the dissolution of the marriage of the participant—</text>
<subclause id="H880DAAD970DB43E9B578CF4BEFBFA077"><enum>(I)</enum><text>notify the plan administrator of the plan of such dissolution, and</text></subclause>
<subclause id="HEF4D2A3DF8934A47A94D2BDE2E15B5B9"><enum>(II)</enum><text>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.</text></subclause></clause>
<clause id="HC3273CFF23C742509BB9B63EE02D0501"><enum>(vi)</enum><header>Notice by plan administrator</header><text>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.</text></clause>
<clause id="HC6FCF53DF6534DA3B01C4181B298EF00"><enum>(vii)</enum><header>Notice by former spouse</header><text>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).</text></clause>
<clause id="H1E9CA314409145ACAA00C7C511FC015D"><enum>(viii)</enum><header>Coordination with plan procedures</header><text>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).</text></clause>
<clause id="H571430497A0041E38B19314DBAC01106"><enum>(ix)</enum><header>Interpretation as qualified domestic relations order</header><text>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—</text>
<subclause id="H998F7579F9D54419BEE582E7000066A4"><enum>(I)</enum><text>may delay the effect of such an order until the earlier of the date the participant is fully vested or has terminated employment,</text></subclause>
<subclause id="H53AAA394FCF8447A96704D163EDA1019"><enum>(II)</enum><text>may allow distribution to the former spouse to be made immediately,</text></subclause>
<subclause id="H7964E676A6534EBB8FAFAE2B7455F29B"><enum>(III)</enum><text>shall permit the former spouse to be paid not later than the earliest retirement age under the plan or the participant’s death,</text></subclause>
<subclause id="H1F382943472F4B6BAAC9191DBF53CEF2"><enum>(IV)</enum><text>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</text></subclause>
<subclause id="H272F69F21E8946BC886C5FE9C5D1F00"><enum>(V)</enum><text>may conform to the rules applicable to qualified domestic relations orders regarding form or type of benefit.</text></subclause></clause></subparagraph><after-quoted-block>.</after-quoted-block></quoted-block></subsection>
<subsection id="H0CE138644AA147C3A02D74B2C3D46E6B"><enum>(b)</enum><header>Effective date</header><text>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 <act-name parsable-cite="ERISA">Employee Retirement Income Security Act of 1974</act-name> (added by this section) after December 31, 2005.</text></subsection></section>
<section id="HEC8A30D936D849A6B6B6FFE23156F4A1"><enum>205.</enum><header>Periods of family and medical leave treated as hours of service for pension participation and vesting</header>
<subsection id="HB245160A1ECD45DC9F5D8095685D6C05"><enum>(a)</enum><header>Participation</header>
<paragraph id="H5438B556F3D34EA4A787F4008D046638"><enum>(1)</enum><header>In General</header><text>Paragraph (3) of section 202(a) of the <act-name parsable-cite="ERISA">Employee Retirement Income Security Act of 1974</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/29/1052">29 U.S.C. 1052(a)(3)</external-xref>) is amended by adding at the end the following new subparagraph:</text>
<quoted-block act-name="Employee Retirement Income Security Act of 1974" id="HAB3CE5C3D6A44547AB914336C5C30044">
<subparagraph indent="up2" id="H59816D93EA3D43FCA06FEC81A23CE8C1"><enum>(E)</enum>
<clause display-inline="yes-display-inline" id="H8570CA5E14B04F48BE635DBA60DC7D90"><enum>(i)</enum><text>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—</text>
<subclause indent="up1" id="H94C790E0ADCC4CDB808E9501D49CBADD"><enum>(I)</enum><text>the hours of service which otherwise would normally have been credited to such individual but for such absence, or</text></subclause>
<subclause indent="up1" id="H0949D96AA5BB4E17BC550074C0366006"><enum>(II)</enum><text>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.</text> </subclause> </clause>
<clause id="H3777529CFF7A47E281A8C628FE67ACC8" indent="up1"><enum>(ii)</enum><text>The hours described in clause (i) shall be treated as hours of service as provided in this subparagraph—</text>
<subclause id="H08B1178FB4CA4306ADA4FFD8CEBDC762"><enum>(I)</enum><text>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</text></subclause>
<subclause id="HB6305025DE4E44149D999B051D5FF5B"><enum>(II)</enum><text>in any other case, in the immediately following year.</text></subclause></clause></subparagraph><after-quoted-block>.</after-quoted-block></quoted-block></paragraph>
<paragraph id="HAF188D3DDFA54A4189142F3B7C7DA1D1"><enum>(2)</enum><header>Coordination with treatment of maternity and paternity absences under break in service rules</header><text>Subparagraph (A) of section 202(b)(5) of such Act (<external-xref legal-doc="usc" parsable-cite="usc/29/1052">29 U.S.C. 1052(b)(5)(A)</external-xref>) is amended by adding at the end the following new sentence: <quote>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.</quote>.</text></paragraph></subsection>
<subsection id="HAE088B83D2054063BD56DF04CE67FD12"><enum>(b)</enum><header>Vesting</header>
<paragraph id="H5E954D9896064C249D74F51285EDC0DE"><enum>(1)</enum><header>In General</header><text>Paragraph (2) of section 203(b) of such Act (<external-xref legal-doc="usc" parsable-cite="usc/29/1053">29 U.S.C. 1053(b)(2)</external-xref>) is amended by adding at the end the following new subparagraph:</text>
<quoted-block id="HDD190C5EEB7146FE8CF43CBD8E6127">
<subparagraph indent="up2" id="H8B2270F2ACE34BB6A8D1AB44B08169AD"><enum>(E)</enum>
<clause display-inline="yes-display-inline" id="HA03A6F918A4B46DAAF47EE7548E65BAB"><enum>(i)</enum><text>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—</text>
<subclause indent="up1" id="H3B59B90E193544FF949C8918F6902BA3"><enum>(I)</enum><text>the hours of service which otherwise would normally have been credited to such individual but for such absence, or</text></subclause>
<subclause indent="up1" id="H85788B4E975F47F0BB56602D483FEFE9"><enum>(II)</enum><text>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.</text>
<item indent="up2" id="H81EB71FF59B74CE39FBE9593E05C9F14"><enum>(ii)</enum><text>The hours described in clause (i) shall be treated as hours of service as provided in this subparagraph—</text></item></subclause>
<subclause indent="up1" id="H7117A331C97743ACB7C15F23EF00FE8B"><enum>(I)</enum><text>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</text></subclause>
<subclause indent="up1" id="H48C4A1D66F714F68A364C3D5B0519321"><enum>(II)</enum><text>in any other case, in the immediately following year.</text></subclause></clause></subparagraph><after-quoted-block>.</after-quoted-block></quoted-block></paragraph>
<paragraph id="H7D38F7EF6FF54F94BC00CA38D990DFC4"><enum>(2)</enum><header>Coordination with treatment of maternity and paternity absences under break in service rules</header><text>Clause (i) of section 203(b)(3)(E) of such Act (<external-xref legal-doc="usc" parsable-cite="usc/29/1053">29 U.S.C. 1053(b)(3)(E)(i)</external-xref>) is amended by adding at the end the following new sentence: <quote>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.</quote>.</text></paragraph></subsection>
<subsection id="H4EA39F0F40844C83B16204C200DBE5BA"><enum>(c)</enum><header>Application to current employees</header><text>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.</text></subsection></section>
<section id="H085215D3492243F9A140D2216D645B13"><enum>206.</enum><header>Right of spouse to know distribution information</header><text display-inline="no-display-inline">Paragraph (3) of section 205(c) of the <act-name parsable-cite="ERISA">Employee Retirement Income Security Act of 1974</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/29/1055">29 U.S.C. 1055(c)(3)</external-xref>) is amended by adding at the end the following new subparagraph:</text>
<quoted-block act-name="Employee Retirement Income Security Act of 1974" id="H5F05F5A6E38E4702B37EC44CE43D4C56">
<subparagraph id="HA667DF7A745646C386295247A47E7953" indent="up2"><enum>(C)</enum><text>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.</text></subparagraph><after-quoted-block>.</after-quoted-block></quoted-block></section>
<section id="H44BEF64A6B99406F94DA4C6605033646" section-type="subsequent-section" display-inline="no-display-inline"><enum>207.</enum><header>Repeal of reduction in military Survivor Benefit Plan annuities at age 62</header>
<subsection id="H910BC416CA334F7A81CB00F01148C3BF"><enum>(a)</enum><header>Computation of annuity for a spouse, former spouse, or child</header><text>Subsection (a) of <external-xref legal-doc="usc" parsable-cite="usc/10/1451">section 1451</external-xref> of title 10, United States Code, is amended—</text>
<paragraph id="HC2727DB504AA4F9BA200394FA194FD3F"><enum>(1)</enum><text>in paragraph (1), by striking <quote>shall be determined as follows:</quote> and all that follows and inserting the following: <quote>shall be the amount equal to 55 percent of the base amount.</quote>;</text></paragraph>
<paragraph id="H9CB624D26F364CFEA8B94EB83590EEB9"><enum>(2)</enum><text>in paragraph (2), by striking <quote>shall be determined as follows:</quote> and all that follows and inserting the following: <quote>shall be the amount equal to a percentage of the base amount that is less than 55 percent and is determined under subsection (f).</quote>.</text></paragraph></subsection>
<subsection id="H8517F0405CDE42EBA15F16A9E04CB24D"><enum>(b)</enum><header>Annuities for survivors of certain persons dying during a period of special eligibility for SBP</header><text>Subsection (c)(1) of such section is amended by striking <quote>shall be determined as follows:</quote> and all that follows and inserting the following: </text>
<quoted-block style="OLC" id="H13C5D6E6254844CAB6744C39C66EDF2D" display-inline="yes-display-inline"><text display-inline="yes-display-inline">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:</text>
<paragraph id="H49C51D227A764F9B9280BB96F62F6083"><enum>(A)</enum><text>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.</text></paragraph>
<paragraph id="HBA403EE3B62F4C13A7999B7D84E012AA"><enum>(B)</enum><text>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.</text></paragraph>
<paragraph id="HF78EF61362614078B1D1955C242E00FE"><enum>(C)</enum><text>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.</text></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></subsection>
<subsection id="H1BD0892DB5654A6D99554100F4A1AE43"><enum>(c)</enum><header>Repeal of requirement for reduction</header><text>Such section is further amended by striking subsection (d).</text></subsection>
<subsection id="HF187719964F04A81B1362EBA00302BC1"><enum>(d)</enum><header>Repeal of unnecessary supplemental SBP</header>
<paragraph display-inline="yes-display-inline" id="H3D059AE288344C76AF60F6DC393F78B2"><enum>(1)</enum><text>Subchapter III of <external-xref legal-doc="usc-chapter" parsable-cite="usc-chapter/10/73">chapter 73</external-xref> of title 10, United States Code, is repealed.</text></paragraph>
<paragraph indent="up1" id="HB4878CC641EE43DEA59929563BB87C97"><enum>(2)</enum><text>The table of subchapters at the beginning of such chapter is amended by striking the item relating to subchapter III.</text></paragraph></subsection>
<subsection id="HA44CABF724714ABAAFC67B09D1D4B1F"><enum>(e)</enum><header>Effective date</header><text>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.</text></subsection></section>
<section id="H28CBD567DBF64582AC6728ACF71D996F"><enum>208.</enum><header>Survivor annuities for widows, widowers, and former spouses of Federal employees who die before attaining age for deferred annuity under Civil Service Retirement System</header>
<subsection id="H21494507291F4F3F9985689240D0C396"><enum>(a)</enum><header>Benefits for widow or widower</header><text><external-xref legal-doc="usc" parsable-cite="usc/5/8341">Section 8341(f)</external-xref> of title 5, United States Code, is amended—</text>
<paragraph id="HBC0FC3A0137043B9B680D52D87FBE2C9"><enum>(1)</enum><text>in the matter preceding paragraph (1)—</text>
<subparagraph id="H99D4BF7107124F6899BBD5091D2616AA"><enum>(A)</enum><text>by inserting <quote>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</quote> before <quote>a Member</quote>; and</text></subparagraph>
<subparagraph id="HACB412DB28784AA8B73BB5DB34A71DB6"><enum>(B)</enum><text>by inserting <quote>of such former employee or Member</quote> after <quote>the surviving spouse</quote>;</text></subparagraph></paragraph>
<paragraph id="H281C527A16544A7A8354A7DD02679716"><enum>(2)</enum><text>in paragraph (1)—</text>
<subparagraph id="H5315E44679D34870895BC659CCEFBE8C"><enum>(A)</enum><text>by inserting <quote>former employee or</quote> before <quote>Member commencing</quote>; and</text></subparagraph>
<subparagraph id="HB45629B58A6A4400AA0074B99C28FA3"><enum>(B)</enum><text>by inserting <quote>former employee or</quote> before <quote>Member dies</quote>; and</text></subparagraph></paragraph>
<paragraph id="H406372B8FB50471191713611C1E8CDA"><enum>(3)</enum><text>in the undesignated sentence following paragraph (2)—</text>
<subparagraph id="H671597EA95324C45BF8DAD44CD282D5E"><enum>(A)</enum><text>in the matter preceding subparagraph (A), by inserting <quote>former employee or</quote> before <quote>Member</quote>; and</text></subparagraph>
<subparagraph id="HB2D3113FAC9F4EAAAECE8FA6D0963900"><enum>(B)</enum><text>in subparagraph (B), by inserting <quote>former employee or</quote> before <quote>Member</quote>.</text></subparagraph></paragraph></subsection>
<subsection id="HDAF657F2509C4E9C8789280004AF4C58"><enum>(b)</enum><header>Benefits for former spouse</header><text><external-xref legal-doc="usc" parsable-cite="usc/5/8341">Section 8341(h)</external-xref> of title 5, United States Code, is amended—</text>
<paragraph id="HBB727E34651E4B31BB354EAA1E92E9A2"><enum>(1)</enum><text>in paragraph (1), by inserting <quote>former employee entitled to a deferred annuity under section 8338(a) of this title,</quote> after <quote>employee, Member, annuitant,</quote>; and </text> </paragraph>
<paragraph id="H4016485749B64D2C8278A2B77B656BC5"><enum>(2)</enum><text>in paragraph (2)—</text>
<subparagraph id="H2956706D5A684F209C11A461AAE241F9"><enum>(A)</enum><text>in subparagraph (A)(ii) by striking <quote>or annuitant,</quote> and inserting <quote>annuitant, or former employee</quote>; and</text></subparagraph>
<subparagraph id="H3A8A11A472C44B46B300B5287F6BF300"><enum>(B)</enum><text>in subparagraph (B)(iii) by inserting <quote>former employee or</quote> before <quote>Member</quote>.</text></subparagraph></paragraph></subsection>
<subsection id="HD48EA89E8ABC471387598CA7FCAA9CD2"><enum>(c)</enum><header>Protection of survivor benefit rights</header><text><external-xref legal-doc="usc" parsable-cite="usc/5/8339">Section 8339(j)(3)</external-xref> of title 5, United States Code, is amended by adding at the end the following: <quote>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.</quote>.</text></subsection>
<subsection id="H7BAB466FFC914A989EB84318F8CF8EFE"><enum>(d)</enum><header>Effective date</header><text>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.</text></subsection> </section>
<section id="HBDA1BEAA317E4850BAA9E0E79D3205A8"><enum>209.</enum><header>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</header>
<subsection id="HEF5CD0F2802D452EAA7902A1ABF36F03"><enum>(a)</enum><header>In general</header><text><external-xref legal-doc="usc" parsable-cite="usc/5/8433">Section 8433(e)</external-xref> of title 5, United States Code, is amended—</text>
<paragraph id="HBB58A7E24A9F4E3AACD49E1841A9C857"><enum>(1)</enum><text>by striking <quote>(e)</quote> and inserting <quote>(e)(1)</quote>;</text></paragraph>
<paragraph id="H7D113796DDC94B5F927FCB858D764CED"><enum>(2)</enum><text>by striking all that follows <quote>paid</quote> and inserting <quote>in accordance with paragraph (2).</quote>; and</text></paragraph>
<paragraph id="H71C9361CB6084BD69981C580C0FF9700"><enum>(3)</enum><text>by adding at the end the following:</text>
<quoted-block id="HEDC9CC4E60B24BC0BDEA3C0075DC7C1C" style="OLC">
<paragraph id="H4750AFD8E96643A3A60846CB3646612B" indent="up1"><enum>(2)</enum><text>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—</text>
<subparagraph id="HFFC41B117A21484898B3B1907BBC0028"><enum>(A)</enum><text>the widow or widower of the decedent shall be the first party entitled to receive (instead of any designated beneficiary); and</text></subparagraph>
<subparagraph id="H83F1FDB8831B4BC3A631B1E5DE98285C"><enum>(B)</enum><text>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).</text></subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></subsection>
<subsection id="H032B9D7B5A0F496E9F3DD79579049498"><enum>(b)</enum><header>Effective date</header><text>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.</text></subsection> </section>
<section id="H6CD23EE4809D433FB2630021BD26ED5D"><enum>210.</enum><header>Amendments relating to effective date provision of the Civil Service Retirement Spouse Equity Act of 1984</header>
<subsection id="H5EA4328B4C4345F586D7BF6B00F7E1B2"><enum>(a)</enum><header>Elimination of certain bars to eligibility</header><text>Section 4(b) of the Civil Service Retirement Spouse Equity Act of 1984 (<external-xref legal-doc="usc" parsable-cite="usc/5/8341">5 U.S.C. 8341</external-xref> note) is amended—</text>
<paragraph id="H844E33449C134A3E9B5492764E771574"><enum>(1)</enum><text>in paragraph (1)(B)(i), by striking <quote>after September 14, 1978, and</quote>; and</text></paragraph>
<paragraph id="HE1A5D8C962424B3FA9A6C519D6CDCA7"><enum>(2)</enum><text>by repealing paragraph (4).</text></paragraph></subsection>
<subsection id="H469DACD52AFF4E1AA8226346BBE92C1D"><enum>(b)</enum><header>New deadline for applications</header>
<paragraph id="H7EE1858F48FD4A929FE064DEFC859CE9"><enum>(1)</enum><header>In general</header><text>Section 4(b)(1)(B)(iv) of the Civil Service Retirement Spouse Equity Act of 1984 is amended by striking <quote>May 7, 1989</quote> and inserting <quote>May 7th of the year following the year in which the Retirement Enhancement Act of 2004 is enacted</quote>.</text></paragraph>
<paragraph id="HBE2180CFE7CA43DC894839B06CE6EE00"><enum>(2)</enum><header>Authority to waive deadline</header><text>Section 4(b) of the Civil Service Retirement Spouse Equity Act of 1984 is amended by adding at the end the following:</text>
<quoted-block id="H6C01419B60024EF3ABEB556600D308B" style="OLC">
<paragraph id="H5D1764FD4F194DF1B13CAAD1C106C7CC" indent="up1"><enum>(6)</enum>
<subparagraph id="HAA3BE6035C68416586454F296E1E4E00" display-inline="yes-display-inline"><enum>(A)</enum><text>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.</text></subparagraph>
<subparagraph id="H8815248EEA774DA9A57FB007139F08DA" indent="up1"><enum>(B)</enum><text>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—</text>
<clause id="H95592F21D4EB44339654EF477BA85F54"><enum>(i)</enum><text>which was denied; but</text></clause>
<clause id="H361AAF2DA0AF4DAE85F9ED2697D612B4"><enum>(ii)</enum><text>which, based on criteria applied under this section pursuant to changes in law subsequent to the denial, would have been approved.</text></clause></subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></subsection></section>
<section id="HC67B6C844F684E2CBF8EAFC6CB00FC31"><enum>211.</enum><header>Entitlement of divorced spouses to railroad retirement annuities independent of actual entitlement of employee</header>
<subsection id="H7A624C5A6D2E4D9B840044B4387E9198"><enum>(a)</enum><header>In general</header><text display-inline="yes-display-inline">Section 2 of the Railroad Retirement Act of 1974 (<external-xref legal-doc="usc" parsable-cite="usc/45/231a">45 U.S.C. 231a</external-xref>) is amended—</text>
<paragraph id="H4B7DF8C45E9545B888C00004BF24900"><enum>(1)</enum><text>in subsection (c)(4)(i), by striking <quote>(A) is entitled to an annuity under subsection (a)(1) and (B)</quote>; and</text></paragraph>
<paragraph id="H5901CB871FD94CEA9426B382D98001F5"><enum>(2)</enum><text>in subsection (e)(5), by striking <quote>or divorced wife</quote> the second place it appears.</text></paragraph></subsection>
<subsection id="H1F7E2AD41F0946A392B665C1E938BAEF"><enum>(b)</enum><header>Effective date</header><text>The amendments made by this section shall take effect 1 year after the date of the enactment of this Act.</text></subsection></section>
<section id="HBB127EFD0C8645D0847314DCE5B703C0"><enum>212.</enum><header>Extension of tier II railroad retirement benefits to surviving former spouses pursuant to divorce agreements</header>
<subsection id="H2206D7BB2368443DB1FBBB49BEFB5383"><enum>(a)</enum><header>In general</header><text>Section 5 of the Railroad Retirement Act of 1974 (<external-xref legal-doc="usc" parsable-cite="usc/45/231d">45 U.S.C. 231d</external-xref>) is amended by adding at the end the following:</text>
<quoted-block style="traditional" id="H5726A3467B774AEB8FE16E80D0B01301" display-inline="no-display-inline">
<subsection id="HD6233B3362D840A6B17F2C5D1B507DC4"><enum>(d)</enum><text>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.</text></subsection><after-quoted-block>.</after-quoted-block></quoted-block></subsection>
<subsection id="H019299036A414A8E8FA331286337E3C0"><enum>(b)</enum><header>Effective date</header><text>The amendment made by this section shall take effect 1 year after the date of the enactment of this Act.</text></subsection></section>
<enum>III</enum><header>Simplified investment standards</header>
<section id="HEF815626FEBE4211951F9C2B62D606A"><enum>301.</enum><header>Exemption from prohibited transaction rules for certain aborted emergent transactions</header>
<subsection id="H2D77C84377DE422AA5020219CC56E048"><enum>(a)</enum><header>Amendments to the <act-name parsable-cite="ERISA">Employee Retirement Income Security Act of 1974</act-name></header><text>Section 408 of the <act-name parsable-cite="ERISA">Employee Retirement Income Security Act of 1974</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/29/1108">29 U.S.C. 1108</external-xref>) is amended by adding at the end the following new subsection:</text>
<quoted-block act-name="Employee Retirement Income Security Act of 1974" id="H0AEF00525DF94CB68B339324BEC9D906">
<subsection id="HDC19F78D3F994EED8D386B919ECEB200"><enum>(g)</enum>
<paragraph id="H7F5F966F21AD44E1BC48488400902325" display-inline="yes-display-inline"><enum>(1)</enum><text display-inline="yes-display-inline">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—</text>
<subparagraph id="HFC990941C0084419A4146E82A92F68E3" indent="up1"><enum>(A)</enum><text display-inline="yes-display-inline">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,</text></subparagraph>
<subparagraph id="H55220C80BD27434C8779AEC9DD76F6C5" indent="up1"><enum>(B)</enum><text>the Secretary determines not to grant the exemption, and</text></subparagraph>
<subparagraph id="H8B323967A57C4FB98D4DF836FFD70B9" indent="up1"><enum>(C)</enum><text>the transaction is reversed within 60 days after the date of the Secretary’s determination,</text> </subparagraph><continuation-text continuation-text-level="paragraph">then the transaction shall be exempted under subsection (a) from treatment as a violation of such restriction.</continuation-text></paragraph>
<paragraph id="HAF6C7FF812244A919F8286C351C73813" indent="up1"><enum>(2)</enum><text>For purposes of this subsection—</text>
<subparagraph id="H3FA5CB18B87A4CF4A7CDFE24388CF418"><enum>(A)</enum><text>The term <quote>qualifying transaction</quote> 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— </text>
<clause id="H4BC37E14717E40B9A463B4D4B1E42B82"><enum>(i)</enum><text>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 <external-xref legal-doc="usc" parsable-cite="usc/26/6621">section 6621(a)(2)</external-xref> of the Internal Revenue Code of 1986,</text></clause>
<clause id="H5CA1FC7F68F84E3B89EFD1C7C854592"><enum>(ii)</enum><text>the eligible person receives in such transaction not more than reasonable compensation,</text></clause>
<clause id="HD3B5E3C994D54B3CBB63A46200929571"><enum>(iii)</enum><text>such transaction is expressly approved by an independent fiduciary who has investment authority with respect to the plan assets involved in the transaction, and</text></clause>
<clause id="HC5E974773E3A4D8082078F5368F92700"><enum>(iv)</enum><text>immediately after the acquisition of the financial product—</text>
<subclause id="HBF2FDD929368423C0097AB51B9A5E247"><enum>(I)</enum><text>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</text></subclause>
<subclause id="H93D50EDB7C8945D69BD493710067FCF4"><enum>(II)</enum><text>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.</text></subclause></clause></subparagraph></paragraph>
<paragraph indent="up1" id="HAACFAE96115047BABAAA95DCB53ECCA"><enum>(3)</enum><text>For purposes of this subsection—</text>
<subparagraph id="HCB8B26750379448E8B6145E20006BCD2"><enum>(A)</enum><text>A guarantee referred to in paragraph (2) is <quote>sufficient</quote> 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 <quote>sufficient</quote> 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. </text> </subparagraph>
<subparagraph id="H49C0B4EE3AC3439383C659B08B6216BC"><enum>(B)</enum><text>The term <term>eligible person</term> means a person that—</text>
<clause id="HC9438DCA8864477AA15571924199F925"><enum>(i)</enum><text>consists of—</text>
<subclause id="H13AE35E3A7CF4AED843D1F0061442DA5"><enum>(I)</enum><text>a bank as defined in section 202(a)(2) of the <act-name parsable-cite="IAA40">Investment Advisers Act of 1940</act-name>,</text></subclause>
<subclause id="HC289D08C7269427FAE2799E09FF106F"><enum>(II)</enum><text>an investment adviser registered under the <act-name parsable-cite="IAA40">Investment Advisers Act of 1940</act-name>,</text></subclause>
<subclause id="H0C893DA053354CE2A05070E868A403FC"><enum>(III)</enum><text>an insurance company which is qualified to do business in more than one State, or</text></subclause>
<subclause id="H6F651A4B9D6848A6ABCAF8C45CD78F33"><enum>(IV)</enum><text>a broker-dealer registered under the <act-name parsable-cite="SEA34">Securities Exchange Act of 1934</act-name>,</text>
<item indent="up2" id="H3CA8A111A2274B46B15851FD41213245"><enum>(ii)</enum><text>has shareholders’ or partners’ equity in excess of $1,000,000, and</text></item>
<item indent="up2" id="H742AC7F2CF984213A922B8A9B64CB687"><enum>(iii)</enum><text>is not described in section 411.</text></item></subclause></clause></subparagraph></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block></subsection>
<subsection id="HBF895164136B4C26944B32B86E8D00B1"><enum>(b)</enum><header>Effective date</header><text>The amendment made by this section shall apply with respect to transactions occurring after December 31, 2005.</text></subsection></section>
<section id="H8BCB3E8144E14E1D830605CD4F533E71" display-inline="no-display-inline" section-type="subsequent-section"><enum>302.</enum><header>Prohibited transaction exemption for the provision of investment advice</header>
<legis-comment display="no">LAJohnston: Language inserted from HR3445 (107th) on 10/1/04, replacing language that had been included from HR2101 (108th)</legis-comment>
<subsection id="H9A4C96FA98224DB5AB00FCFD9765BC15"><enum>(a)</enum><header>Amendments to the <act-name parsable-cite="ERISA">Employee Retirement Income Security Act of 1974</act-name></header>
<paragraph id="HA905758BC4AE436DADF3A0A0A91A92E"><enum>(1)</enum><header>In General</header><text>Section 408(b) of the <act-name parsable-cite="ERISA">Employee Retirement Income Security Act of 1974</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/29/1108">29 U.S.C. 1108(b)</external-xref>) is amended by adding at the end the following new paragraph:</text>
<quoted-block act-name="Employee" id="H6EEF7D2B766C4EBF001744A396923700">
<paragraph id="H741925B75454473BA15CDFA66D7B9B58"><enum>(14)</enum>
<subparagraph id="HD07F59CB7F26431DB1C64F3FC585B907" display-inline="yes-display-inline"><enum>(A)</enum><text>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—</text>
<clause id="H2666751922AF4148A9AF8923AF92A7F6" indent="up1"><enum>(i)</enum><text>the plan provides for individual accounts and permits a participant or beneficiary to exercise control over assets in his or her account,</text></clause>
<clause id="H66A2B9D9714444E990E3986E9FC143D6" indent="up1"><enum>(ii)</enum><text>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</text></clause>
<clause id="H6A754CAE493047348BE27FB1EE21428C" indent="up1"><enum>(iii)</enum><text>the requirements of subsection (g) are met in connection with each instance of the provision of the advice.</text></clause></subparagraph>
<subparagraph id="HD275BF4D3C2B4D56B7D07400BD3763D2" indent="up1"><enum>(B)</enum><text>The transactions described in this subparagraph are the following:</text>
<clause id="HA3C1A0A03AB644B283D7ECE486BD759E"><enum>(i)</enum><text>the provision of the advice to the participant or beneficiary;</text></clause>
<clause id="H425C941E5C09408198CA67C6008BD301"><enum>(ii)</enum><text>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</text></clause>
<clause id="H6C9EC3DEB8E14D0EA13473A3DA7D4DE"><enum>(iii)</enum><text>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.</text></clause></subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></paragraph>
<paragraph id="H31FC6B79659F40708FBD51353D6D8642"><enum>(2)</enum><header>Requirements</header><text>Section 408 of such Act is amended further by adding at the end the following new subsection:</text>
<quoted-block id="H42A6A6F528764FC38DE211A0085385FE">
<subsection id="H07C3FA73C2AB40CC87CCEE62BD9BB9D3"><enum>(g)</enum><header>Requirements for exemption from prohibited transactions with respect to provision of investment advice</header>
<paragraph id="H8ADD0F275968480E9F3DED00ECA0087"><enum>(1)</enum><header>In General</header><text>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:</text>
<subparagraph id="H77CD1AA4FA80461385ECC85FDFE82BA5"><enum>(A)</enum><header>Written disclosures</header><text>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:</text>
<clause id="HDB8D388095CB4702A9D16383AAE5204F"><enum>(i)</enum><header>Interests held by the fiduciary adviser</header><text>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.</text></clause>
<clause id="HD78229B59424490E81E7F7F6B1EA663"><enum>(ii)</enum><header>Related fees or compensation in connection with the provision of the advice</header><text>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.</text></clause>
<clause id="H1A96DFB8C3E44D4C972C84BB230044A9"><enum>(iii)</enum><header>Ongoing fees or compensation in connection with the security or property involved</header><text>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.</text></clause>
<clause id="H085F6F4DB47F488086FF4D3BF7F2F37F"><enum>(iv)</enum><header>Applicable limitations on scope of advice</header><text>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.</text></clause>
<clause id="HE2624B16004448BBB0CCB9F8100EB00"><enum>(v)</enum><header>Types of services generally offered</header><text>The types of services offered by the fiduciary adviser in connection with the provision of qualified investment advice by the fiduciary adviser.</text></clause>
<clause id="HC8C5668210894B13B843FD007BF9412F"><enum>(vi)</enum><header>Fiduciary status of the fiduciary adviser</header><text>That the fiduciary advisor is a fiduciary of the plan.</text></clause></subparagraph>
<subparagraph id="H9499C3F3A02D44858F634D23BA96D58F"><enum>(B)</enum><header>Disclosure by fiduciary adviser in accordance with applicable securities laws</header><text>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.</text></subparagraph>
<subparagraph id="HD0E0811608D44655ABD900FBE0DCB3BE"><enum>(C)</enum><header>Transaction occurring solely at direction of recipient of advice</header><text>The sale, acquisition, or holding of the security or other property shall occur solely at the direction of the recipient of the advice.</text></subparagraph>
<subparagraph id="H94116694E7EF47D188D919CA3405F053"><enum>(D)</enum><header>Reasonable compensation</header><text>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.</text></subparagraph>
<subparagraph id="H27E9352C8E5643C2BBB527BF29F262FF"><enum>(E)</enum><header>Arm’s length transaction</header><text>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.</text></subparagraph></paragraph>
<paragraph id="H657032599A184BAEB712BE00C643E799"><enum>(2)</enum><header>Continued availability of information for at least 1 year</header><text>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.</text></paragraph>
<paragraph id="HE47DD06E2B9844F0A8B46FFC11FAF234"><enum>(3)</enum><header>Evidence of compliance maintained for at least 6 years</header><text>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.</text></paragraph>
<paragraph id="HD99FD28D53D24B88B1304E75EA8BC182"><enum>(4)</enum><header>Model disclosure forms</header><text>The Secretary shall prescribe regulations setting forth model disclosure forms to assist fiduciary advisers in complying with the disclosure requirements of this subsection.</text></paragraph>
<paragraph id="HE1DD644D06D242A8B0B0A162989CC795"><enum>(5)</enum><header>Exemption for employers contracting for qualified investment advice</header>
<subparagraph id="H5876FD34BF1A48749878BEAB3C479C18"><enum>(A)</enum><header>Reliance on contractual arrangements</header><text>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—</text>
<clause id="H05B9A83802A346738CEEE700F958B9DC"><enum>(i)</enum><text>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</text></clause>
<clause id="HC309A1FD481E4E1F83842C5885434C35"><enum>(ii)</enum><text>the terms of the arrangement require compliance by the fiduciary adviser with the requirements of this subsection.</text></clause></subparagraph>
<subparagraph id="H42EE35F021E84A18877BBE0157C980F9"><enum>(B)</enum><header>Continued duty for employer to prudently select and review fiduciary advisers</header><text>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.</text></subparagraph>
<subparagraph id="HE17075564A2F45FB979989DE868B22B5"><enum>(C)</enum><header>Plan assets may be used to pay reasonable expenses</header><text>Nothing in this part shall be construed to preclude the use of plan assets to pay for reasonable expenses in providing qualified investment advice.</text></subparagraph></paragraph>
<paragraph id="H54E94098ACFC442EAFC291DB001D0011"><enum>(6)</enum><header>Annual reviews by the Secretary</header><text>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:</text>
<subparagraph id="HE2A686890BC244CF0066004200F6656E"><enum>(A)</enum><header>Compliance by advice computer models with generally accepted investment management principles</header><text>The extent to which advice computer models employed by the fiduciary adviser comply with generally accepted investment management principles.</text></subparagraph>
<subparagraph id="H9F731C4ADC2D4DA5925000C5786031B2"><enum>(B)</enum><header>Compliance with disclosure requirements</header><text>The extent to which disclosures provided by the fiduciary adviser have complied with the requirements of this subsection.</text></subparagraph>
<subparagraph id="H8712615D3D41419AAF034F939E6C2FE3"><enum>(C)</enum><header>Extent of violations</header><text>The extent to which any violations of fiduciary duties have occurred in connection with the provision of the advice.</text></subparagraph>
<subparagraph id="H2B8F3ECB938E45D796C141A28CB800B1"><enum>(D)</enum><header>Extent of reported complaints</header><text>The extent to which complaints to relevant agencies have been made in connection with the provision of the advice.</text></subparagraph><continuation-text continuation-text-level="paragraph">Any proprietary information obtained by the Secretary shall be treated as confidential.</continuation-text></paragraph>
<paragraph id="HC622AD7765C64C6B8310068B12D4DAAE"><enum>(7)</enum><header>Duty of conflicted fiduciary adviser to provide for alternative independent advice</header>
<subparagraph id="HFF943996BF1049198F4D902F7871DAC1"><enum>(A)</enum><header>In General</header><text>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—</text>
<clause id="H1D7963B4123447E700FDA6D12BA300EB"><enum>(i)</enum><text>has an interest in the security or other property, or</text></clause>
<clause id="HAE56054FBBE84F46AE4761B845D721D4"><enum>(ii)</enum><text>has an affiliation or contractual relationship with any third party that has an interest in the security or other property,</text></clause><continuation-text continuation-text-level="subparagraph">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).</continuation-text></subparagraph>
<subparagraph id="HC2AAEBD158B342DAB908D2F06FB6338"><enum>(B)</enum><header>Independence and qualifications of alternative investment adviser</header><text>Any alternative investment adviser whose qualified investment advice is arranged for by a fiduciary adviser pursuant to subparagraph (A)—</text>
<clause id="H10430BA9145B4F63AF7E45B875DB0D5"><enum>(i)</enum><text>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</text></clause>
<clause id="H27005728460A48E3972D66B76F79FEB5"><enum>(ii)</enum><text>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.</text></clause></subparagraph>
<subparagraph id="HEAEA3A34A7C24031BF250039AAD6F914"><enum>(C)</enum><header>Scope and fees of alternative investment advice</header><text>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.</text></subparagraph></paragraph>
<paragraph id="H64305FF45C7A4276A9F3986246E616BE"><enum>(8)</enum><header>Fiduciary adviser defined</header><text>For purposes of this subsection and subsection (b)(14)—</text>
<subparagraph id="H23CF9AE9DE7043399CF446EAEE71DAD5"><enum>(A)</enum><header>In General</header><text>The term <term>fiduciary adviser</term> means, with respect to a plan, a person who—</text>
<clause id="HA87269690694488EB0B443F6C7FE6CC9"><enum>(i)</enum><text>is a fiduciary of the plan by reason of the provision of qualified investment advice by such person to a participant or beneficiary,</text></clause>
<clause id="HA7353C5095224876A5F8B792B25543B5"><enum>(ii)</enum><text>meets the qualifications of subparagraph (B), and</text></clause>
<clause id="HE4563FC8813143298CCCF703474CCB2F"><enum>(iii)</enum><text>meets the additional requirements of subparagraph (C).</text></clause></subparagraph>
<subparagraph id="H6B31C3210A8D4CA191002EAA43C000A6"><enum>(B)</enum><header>Qualifications</header><text>A person meets the qualifications of this subparagraph if such person—</text>
<clause id="H60A03AAD71C8442A95FEB238FCFEB0"><enum>(i)</enum><text>is registered as an investment adviser under the <act-name parsable-cite="IAA40">Investment Advisers Act of 1940</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/15/80b-1">15 U.S.C. 80b–1 et seq.</external-xref>),</text></clause>
<clause id="H799C132F792B4CB2B0205F80E47FBE90"><enum>(ii)</enum><text>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,</text></clause>
<clause id="H96F6336BB3B3409CBBA85C61D632BFAF"><enum>(iii)</enum><text>is registered as a broker or dealer under the <act-name parsable-cite="SEA34">Securities Exchange Act of 1934</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/15/78a">15 U.S.C. 78a et seq.</external-xref>),</text></clause>
<clause id="H806D410D2FE44E0E97D925B600727FAB"><enum>(iv)</enum><text>is a bank or similar financial institution referred to in section 408(b)(4),</text></clause>
<clause id="H6F23B5A1F3F240D480EFD18540D6009E"><enum>(v)</enum><text>is an insurance company qualified to do business under the laws of a State, or</text></clause>
<clause id="HE7A7ED2EA8C74BDF88348696C7003420"><enum>(vi)</enum><text>is any other comparable entity which satisfies such criteria as the Secretary determines appropriate.</text></clause></subparagraph>
<subparagraph id="H7BABCE15DB994C3700CE91E1FF29AAC0"><enum>(C)</enum><header>Additional requirements with respect to certain employees or other agents of certain advisers</header><text>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—</text>
<clause id="H1459553791784238843061F9ED0071EC"><enum>(i)</enum><text>a registered representative of such person,</text></clause>
<clause id="HB40E21C2D75B4397AE793607BA481611"><enum>(ii)</enum><text>an individual described in subclause (I), (II), or (III) of subparagraph (A)(ii), or</text></clause>
<clause id="H4A811BBEC3AF47FFA807CBF7FCB9478"><enum>(iii)</enum><text>such other comparable qualified individual as may be designated in regulations of the Secretary.</text></clause></subparagraph></paragraph>
<paragraph id="HA12A1F6EAC2B4A86A63799F010EF1756"><enum>(9)</enum><header>Additional definitions</header><text>For purposes of this subsection and subsection (b)(14)—</text>
<subparagraph id="H2FBF622CEACC4E49B76500DD68F77921"><enum>(A)</enum><header>Qualified investment advice</header><text>The term <term>qualified investment advice</term> means, in connection with a participant or beneficiary, investment advice referred to in section 3(21)(A)(ii) which—</text>
<clause id="H37AF5945B48E44D90012F23521437C9F"><enum>(i)</enum><text>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</text></clause>
<clause id="H3475C5DF1FE04ED68DA5FDC93F1D1AF"><enum>(ii)</enum><text>takes into account all investment options under the plan.</text></clause></subparagraph>
<subparagraph id="H98CEA03C07FB4F4E95A261DEC3698C75"><enum>(B)</enum><header>Affiliate</header><text>The term <term>affiliate</term> of another entity means an affiliated person of such entity (as defined in section 2(a)(3) of the <act-name parsable-cite="ICA40">Investment Company Act of 1940</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/15/80a-2">15 U.S.C. 80a–2(a)(3)</external-xref>)).</text></subparagraph>
<subparagraph id="HC377CF0060804F39AB61AF47DEC534F4"><enum>(C)</enum><header>Registered representative</header><text>The term <term>registered representative</term> of another entity means a person described in section 3(a)(18) of the <act-name parsable-cite="SEA34">Securities Exchange Act of 1934</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/15/78c">15 U.S.C. 78c(a)(18)</external-xref>) (substituting such entity for the broker or dealer referred to in such section) or a person described in section 202(a)(17) of the <act-name parsable-cite="IAA40">Investment Advisers Act of 1940</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/15/80b-2">15 U.S.C. 80b–2(a)(17)</external-xref>) (substituting such entity for the investment adviser referred to in such section).</text></subparagraph></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></subsection>
<subsection id="HB2AD644AA60843C5970048443DE81566"><enum>(b)</enum><header>Enforcement</header>
<paragraph id="H61294C08FB174A6AB9C4A7E6C2411584"><enum>(1)</enum><header>Liability for breach</header>
<subparagraph id="H5C117A545CE74EF781ECEEDDE78F36D"><enum>(A)</enum><header>Liability in connection with individual account plans</header><text>Section 409 of such Act (<external-xref legal-doc="usc" parsable-cite="usc/29/1109">29 U.S.C. 1109</external-xref>) is amended by adding at the end the following new subsection:</text>
<quoted-block id="H1BF6EF7FFCE3445B9B58801F5C1C747B">
<subsection id="HDD8DBBF97FE649FC98FB31525CF5DAD4"><enum>(c)</enum>
<paragraph id="HD29C4953F06548DD8DF369B318FD7FC2" display-inline="yes-display-inline"><enum>(1)</enum><text>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—</text>
<subparagraph id="H2121B01063EF48E4BAF002E89A48293" indent="up1"><enum>(A)</enum><text>the fiduciary adviser, or</text></subparagraph>
<subparagraph id="H428735E40D724342A2AF7881283BBA9F" indent="up1"><enum>(B)</enum><text>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.</text></subparagraph></paragraph>
<paragraph id="HE221EAD0ADB84D4BB7C556045ED3BFA4" indent="up1"><enum>(2)</enum><text>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—</text>
<subparagraph id="HF5489E3A497F4AD4B6C6753831CCE8E"><enum>(A)</enum><text>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</text></subparagraph>
<subparagraph id="HCFECB2FA12A84C70B6332292D3EFD01C"><enum>(B)</enum><text>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.</text></subparagraph></paragraph>
<paragraph id="H84E3DDE199E3426F922E0522F6959384" indent="up1"><enum>(3)</enum><text>For purposes of this subsection, the terms <term>fiduciary adviser</term> and <term>qualified investment advice</term> shall have the meanings provided such terms in subparagraphs (A) and (B), respectively, of section 406(g)(7).</text></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block></subparagraph>
<subparagraph id="H0727B6395C694013AADB49471704E4B9"><enum>(B)</enum><header>Limitation on exemption from liability</header><text>Section 403(c) of such Act (<external-xref legal-doc="usc" parsable-cite="usc/29/1104">29 U.S.C. 1104(c)</external-xref>) is amended—</text>
<clause id="H39A1FC585727486FAF6CC949B56B7733"><enum>(i)</enum><text>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</text></clause>
<clause id="H94975C10633E4F9B9B03DD46C5B6A014"><enum>(ii)</enum><text>by inserting after paragraph (1) the following new paragraph:</text>
<quoted-block id="H63BF84F3115B429CBD947B758BF02CB8">
<paragraph id="HB34CC61655564C3300002857DC5B70DD" indent="up1"><enum>(2)</enum>
<subparagraph id="HC30B3F2E130248D091C1EA003F120810" display-inline="yes-display-inline"><enum>(A)</enum><text>In any case in which—</text>
<clause id="H1FDF26BE23684029B08CAA53E906F5EF" indent="up1"><enum>(i)</enum><text>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</text></clause>
<clause id="H9D3CE12C90B7448FA130A39588B7B490" indent="up1"><enum>(ii)</enum><text>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.</text></clause></subparagraph>
<subparagraph id="H6815DCA1C1524C4298BCAD50CFA36436" indent="up1"><enum>(B)</enum><text>For purposes of this subsection, the terms <term>fiduciary adviser</term> and <term>qualified investment advice</term> shall have the meanings provided such terms in subparagraphs (A) and (B), respectively, of section 408(g)(7).</text></subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></clause></subparagraph></paragraph>
<paragraph id="H1FCEA85A6ADE44359D224BAA105105E1"><enum>(2)</enum><header>Attorney’s fees</header><text>Section 502(g) of such Act (<external-xref legal-doc="usc" parsable-cite="usc/29/1132">29 U.S.C. 1132(g)</external-xref>) is amended—</text>
<subparagraph id="H966B500FD4E944DABF9B4B3DEC765D87"><enum>(A)</enum><text>in paragraph (1), by inserting <quote>or (3)</quote> after <quote>paragraph (2)</quote>; and</text></subparagraph>
<subparagraph id="HC2361513C60145AE84EF43B5BD4429D2"><enum>(B)</enum><text>by adding at the end the following new paragraph:</text>
<quoted-block id="HD864FD282DEE402D866388C63BFE9E62">
<paragraph id="H13B7CA5462A54F3700B153B1CC653BE5" indent="up1"><enum>(3)</enum><text>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.</text></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></subparagraph></paragraph>
<paragraph id="H66C9D0514D60428BB91E56E0A1CB5BF1"><enum>(3)</enum><header>Applicability of State fraud laws</header><text>Section 514(b) of such Act (<external-xref legal-doc="usc" parsable-cite="usc/29/1144">29 U.S.C. 1144(b)</external-xref>) is amended—</text>
<subparagraph id="H67132D9F63E642CC906854AA33FEF4B"><enum>(A)</enum><text>by redesignating paragraph (9) as paragraph (10); and</text></subparagraph>
<subparagraph id="HA7959083F4CB476492C7A8005B50CC97"><enum>(B)</enum><text>by inserting after paragraph (8) the following new paragraph:</text>
<quoted-block id="H6D6C486166DB434683857E523DB5E2A7">
<paragraph id="H4BA65A5A7746491AACD3D1DA4CE6209" indent="up1"><enum>(9)</enum><text>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).</text></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></subparagraph></paragraph></subsection>
<subsection id="H9E4CA6A5AD144E0694E557530011F43D"><enum>(c)</enum><header>Effective date</header><text>The amendments made by this section shall apply with respect to advice referred to in section 3(21)(A)(ii) of the <act-name parsable-cite="ERISA">Employee Retirement Income Security Act of 1974</act-name> provided on or after January 1, 2006.</text></subsection></section>
<section id="HE5A393332D5342C0B1B97BA37713CC54"><enum>303.</enum><header>Participation of participants in trusteeship of single-employer plans providing for employee contributions</header>
<subsection id="H1F13AB3E7F2D44A7A20025A000FAA3D5"><enum>(a)</enum><header>In General</header><text>Section 403(a) of the <act-name parsable-cite="ERISA">Employee Retirement Income Security Act of 1974</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/29/1103">29 U.S.C. 1103(a)</external-xref>) is amended—</text>
<paragraph id="H2D181C7A8155417D9B48A4E1647883F0"><enum>(1)</enum><text>by redesignating paragraphs (1) and (2) as subparagraphs (A) and (B), respectively;</text></paragraph>
<paragraph id="HFD114BC3573D4155BE820063D0225E09"><enum>(2)</enum><text>by inserting <quote>(1)</quote> after <quote>(a)</quote>; and</text></paragraph>
<paragraph id="HCE798D52393A4A3FA189C3D638693267"><enum>(3)</enum><text>by adding at the end the following new paragraph:</text>
<quoted-block id="HF35DA4B4FFAA4095B0E71863C1117900">
<paragraph indent="up1" id="H340EF1179557475CBA0646191885A5FE"><enum>(2)</enum>
<subparagraph display-inline="yes-display-inline" id="H87674A2791A34C838B983875327E37C"><enum>(A)</enum><text>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.</text></subparagraph>
<subparagraph indent="up1" id="H780DD7268CB6402699FDDE5071650663"><enum>(B)</enum><text>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.</text></subparagraph>
<subparagraph indent="up1" id="HF1D5F35707F14640ACFFAA97CBB49DC"><enum>(C)</enum>
<clause display-inline="yes-display-inline" id="H251E082C74FF491DA0ED2CE5C3788304"><enum>(i)</enum><text>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.</text></clause>
<clause indent="up1" id="H35EAAE2D988D4AE2BCEA326409E82EB3"><enum>(ii)</enum><text>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).</text></clause>
<clause indent="up1" id="HFCDEB5A353C34A52AB3C6993BA00D5F9"><enum>(iii)</enum><text>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 <external-xref legal-doc="usc" parsable-cite="usc/26/414">section 414(q)</external-xref> of the Internal Revenue Code of 1986).</text></clause>
<clause indent="up1" id="HFCBE914C842E453587161079A0EE0408"><enum>(iv)</enum><text>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 (<external-xref legal-doc="usc" parsable-cite="usc/29/173">29 U.S.C. 173(f)</external-xref>), to cast votes as necessary to resolve tie votes by the trustees.</text></clause></subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></subsection>
<subsection id="H02E0E32D7EAA4FADA989E61559B1A364"><enum>(b)</enum><header>Regulations</header><text>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.</text> </subsection></section>
<section id="HFC3A5F7819D949A4ACE5B662A6F6A96B" display-inline="no-display-inline" section-type="subsequent-section"><enum>304.</enum><header>Diversification of investment of account assets held under individual account plans</header>
<subsection id="HFA4DCDC9ADBB416EAA760050BA542124"><enum>(a)</enum><header>In general</header><text>Section 404 of the <act-name parsable-cite="ERISA">Employee Retirement Income Security Act of 1974</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/29/1104">29 U.S.C. 1104</external-xref>) is amended by adding at the end the following new subsection:</text>
<quoted-block act-name="Employee" id="H06EB5C7ECF344B94A8DF6B78E5884D08">
<subsection id="H62E139FE409545A09D72EA1F91C6D26C"><enum>(e)</enum><header>Diversification of investment of account assets held under individual account plans</header>
<paragraph id="HA4A12463ED23418CBF005F25EE3E6576"><enum>(1)</enum><header>In general</header><text>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).</text></paragraph>
<paragraph id="H2DC7094CB21F46F583CA6D78EFE2F19F"><enum>(2)</enum><header>Assets attributable to employee contributions</header><text>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.</text></paragraph>
<paragraph id="H5FEC89D9D64D45BEB8C069731040ADE8"><enum>(3)</enum><header>Elective deferrals invested in employer securities</header>
<subparagraph id="H1D5A477DA56645F0A91393E23CCBB22F"><enum>(A)</enum><header>In general</header><text>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 <external-xref legal-doc="usc" parsable-cite="usc/26/401">section 401(a)(28)</external-xref> of the Internal Revenue Code of 1986 applies.</text></subparagraph>
<subparagraph id="H67D36F1C2D654BC6A0C34EE156B17B67"><enum>(B)</enum><header>Applicable individual</header><text>For purposes of this paragraph, the term <term>applicable individual</term> means—</text>
<clause id="HFE74107ED55B42348D0812C700384D96"><enum>(i)</enum><text>any participant in the plan,</text></clause>
<clause id="HDEEB926B208B49D8AA5DCF61D9DABB0"><enum>(ii)</enum><text>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</text></clause>
<clause id="H602FD6FCFC264045BCB3C1837018645"><enum>(iii)</enum><text>any beneficiary of a deceased participant or alternate payee.</text></clause></subparagraph></paragraph>
<paragraph id="HC245AC09A4AE4F25BDA6D1BB00C00048"><enum>(4)</enum><header>Other employer contributions</header>
<subparagraph id="H045F0334453D4E24B931759DD04D8F5D"><enum>(A)</enum><header>In general</header><text>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.</text></subparagraph>
<subparagraph id="HB5124DC4D0444E70998853D3798345DB"><enum>(B)</enum><header>Qualified participant</header><text>For purposes of this paragraph, the term <term>qualified participant</term> means—</text>
<clause id="H01A2195327CB40808212682857003FC"><enum>(i)</enum><text>any participant in the plan who has completed at least 3 years of service (as determined under section 203(a)) under the plan,</text></clause>
<clause id="H24D8FEE53BB343E49E73E259AD420132"><enum>(ii)</enum><text>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</text></clause>
<clause id="HAEF16FAA283F430382F8A0312E55B299"><enum>(iii)</enum><text>any beneficiary of a deceased participant who met the service requirement in clause (i) or alternate payee described in clause (ii).</text></clause></subparagraph></paragraph>
<paragraph id="HB3D8CCBC3CA940A1BA41BDA363E8857B"><enum>(5)</enum><header>Investment options</header><text>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.</text></paragraph>
<paragraph id="HAD4AA687989340189B6B009D0123F22E"><enum>(6)</enum><header>Prompt compliance with directions to allocate investments</header>
<subparagraph id="H51D5B7DF1231447CB33B2E7F1F43B3E"><enum>(A)</enum><header>In general</header><text>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.</text></subparagraph>
<subparagraph id="H9D1F23DFD9A5417F92CE984FDF3BCD8E"><enum>(B)</enum><header>Special rule for periodic elections</header><text>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.</text></subparagraph></paragraph>
<paragraph id="H199F4A55D23043F885D5752D8996E07E"><enum>(7)</enum><header>Notice of rights and of importance of diversification</header><text>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—</text>
<subparagraph id="HF97296C8D72B46A385D566A9D800057D"><enum>(A)</enum><text>setting forth their rights under this section with respect to the accrued benefit, and</text></subparagraph>
<subparagraph id="H179476C8D98B448490EA43169B0019D4"><enum>(B)</enum><text>describing the importance of diversifying the investment of account assets.</text></subparagraph></paragraph>
<paragraph id="H95C3B3CC8F834A19A616D156728800AE"><enum>(8)</enum><header>Preservation of authority of plan to limit investment</header><text>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.</text></paragraph>
<paragraph id="H07FB6D073B904EB582968CE728279836"><enum>(9)</enum><header>Other definitions and rules</header><text>For purposes of this subsection—</text>
<subparagraph id="HE041D060009944A8A2E51165159B7581"><enum>(A)</enum><header>Employer securities</header><text>The term <term>employer securities</term> shall have the meaning given such term by section 407(d)(1) of the <act-name parsable-cite="ERISA">Employee Retirement Income Security Act of 1974</act-name>.</text></subparagraph>
<subparagraph id="HBD0627464C314532AB4CE15888BF7918"><enum>(B)</enum><header>Elective deferrals</header><text>The term <term>elective deferrals</term> means an employer contribution described in section 402(g)(3)(A) of such Code and any employee contribution.</text></subparagraph>
<subparagraph id="H176EE80DCE2F422C97C4E6DA542B008C"><enum>(C)</enum><header>Election</header><text>Elections under this subsection shall be not less frequently than quarterly.</text></subparagraph>
<subparagraph id="HCD8495808DAC4E8FB3C1C7E9DE491C95"><enum>(D)</enum><header>Employee stock ownership plan</header><text>The term <term>employee stock ownership plan</term> shall have the same meaning given to such term by section 4975(e)(7) of such Code.</text></subparagraph></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block></subsection>
<subsection id="H29DECFD7B2684C98BDD9736905A74501"><enum>(b)</enum><header>Recommendations relating to non-publicly traded stock</header><text>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 <act-name parsable-cite="ERISA">Employee Retirement Income Security Act of 1974</act-name> (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.</text></subsection>
<subsection id="H79E842C57BCB467FAEB6A08DCB83AEC"><enum>(c)</enum><header>Effective date</header>
<paragraph id="HAFB3A3C9992A4368A125A70023C62997"><enum>(1)</enum><header>In general</header><text>Except as provided in paragraph (2), the amendments made by this section shall apply with respect to plan years beginning after December 31, 2005.</text></paragraph>
<paragraph id="H806DB2AE6A7C4DC491A26FCFEB001F92"><enum>(2)</enum><header>Exception</header><text>The amendments made by this section shall not apply to employer securities held by an employee stock ownership plan which are not subject to <external-xref legal-doc="usc" parsable-cite="usc/26/401">section 401(a)(28)</external-xref> of the Internal Revenue Code of 1986 by reason of section 1175(a)(2) of the Tax Reform Act of 1986 (100 Stat. 2519).</text></paragraph>
<paragraph id="HA3106D82A9B6432793625B1E09247B45"><enum>(3)</enum><header>Delayed effective date of existing holdings</header><text>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 <act-name parsable-cite="ERISA">Employee Retirement Income Security Act of 1974</act-name>) 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.</text></paragraph></subsection></section>
<section id="H68F0055B5D3F4FAFA339F3BAEB70FD81"><enum>305.</enum><header>Removal of $500,000 cap on bonding requirement</header><text display-inline="no-display-inline">Section 412(a) of the <act-name parsable-cite="ERISA">Employee Retirement Income Security Act of 1974</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/29/1112">29 U.S.C. 1112(a)</external-xref>) is amended, in the matter following paragraph (2), by striking <quote>nor more than $500,000</quote> and all that follows through <quote>preceding sentence</quote>.</text></section>
<section id="H4D14B45B8CE1407A917719848F00C831"><enum>306.</enum><header>Disclosure regarding investments and voting of proxies</header>
<subsection id="H395C898639D94F9FAC001C61E46F23D6"><enum>(a)</enum><header>In General</header><text>Section 101 of the <act-name parsable-cite="ERISA">Employee Retirement Income Security Act of 1974</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/29/1021">29 U.S.C. 1021</external-xref>) is amended by inserting after subsection (e) the following new subsection:</text>
<quoted-block act-name="Employee Retirement Income Security Act of 1974" id="H713055A613F447208EE3FF674679E117">
<subsection id="H856E40232AAE4254ABBC507D7DB8B6FA"><enum>(f)</enum><header>Disclosure regarding investments and voting of proxies</header>
<paragraph id="HB1BA7C64D31C40978D18E72885D39BAD"><enum>(1)</enum><header>In General</header><text>Within 30 days after receipt by the plan administrator of a written request by a participant or beneficiary for relevant and specific information regarding—</text>
<subparagraph id="HD8FD0AF6AA594234A365EEE05FC43B5"><enum>(A)</enum><text>the nature or extent of any particular investment of plan assets occurring on a particular date specified in the request, or</text></subparagraph>
<subparagraph id="HBA1693075B10448491072CCA20308EA8"><enum>(B)</enum><text>the manner in which any right to vote in connection with such investment has been exercised by or under the plan,</text></subparagraph><continuation-text continuation-text-level="paragraph">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.</continuation-text></paragraph>
<paragraph id="H2BA38AFC61CC49BCAB24A471670042C6"><enum>(2)</enum><header>Standards and review</header><text>The Secretary shall by regulation prescribe—</text>
<subparagraph id="H82E3833D7CA84F87A6E07FA159C0437C"><enum>(A)</enum><text>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</text></subparagraph>
<subparagraph id="H50DE53C590CF4A93823D5920466BABC9"><enum>(B)</enum><text>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.</text></subparagraph></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block> </subsection>
<subsection id="H8C26B65459504C4FBF1F864505E8B006"><enum>(b)</enum><header>Conforming amendment</header><text>Section 101(h)(1) of such Act (<external-xref legal-doc="usc" parsable-cite="usc/29/1021">29 U.S.C. 1021(h)(1)</external-xref>) is amended by inserting <quote>or subsection (f)</quote> after <quote>this subsection</quote>.</text></subsection>
<subsection id="H7610F75A244D41019F885EDE62097656"><enum>(c)</enum><header>Effective date</header><text>The amendments made by this section shall apply with respect to written requests received after December 31, 2005.</text> </subsection></section>
<section id="H14492B7B5B8549249D821842818731F2" display-inline="no-display-inline" section-type="subsequent-section"><enum>307.</enum><header>Immediate warning of excessive stock holdings</header><text display-inline="no-display-inline">Section 105 of the <act-name parsable-cite="ERISA">Employee Retirement Income Security Act of 1974</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/29/1025">29 U.S.C. 1025</external-xref>) is amended by adding at the end the following new subsection:</text>
<quoted-block act-name="Employee" id="HDFACD716E41449CCA13FE400B5435500">
<subsection id="H76859DAC5E944B65B56605A3080050D"><enum>(e)</enum>
<paragraph display-inline="yes-display-inline" id="H97CFAA2CE7F24A12A049C6A7F6656D1"><enum>(1)</enum><text>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—</text>
<subparagraph indent="up1" id="H045AB0A9EB9E4E90BDDD21A2EB52B28F"><enum>(A)</enum><text>indicating that the participant’s account has become excessively invested in employer securities,</text></subparagraph>
<subparagraph indent="up1" id="HE6AA312B3CC54E5AAF1E3325613412E0"><enum>(B)</enum><text>setting forth the notice described in subsection (e)(7), and</text></subparagraph>
<subparagraph indent="up1" id="H54C49D2D2AA74C33AA76F23F49BB4CD7"><enum>(C)</enum><text>referring the participant to investment education materials and investment advice which shall be made available by or under the plan.</text></subparagraph></paragraph><continuation-text continuation-text-level="subsection">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.</continuation-text>
<paragraph indent="up1" id="H8F1BA94926C54D75A476A20509DAC6FC"><enum>(2)</enum><text>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.</text></paragraph>
<paragraph indent="up1" id="HCF74F41292D246D48972D65C49CCD260"><enum>(3)</enum><text>For purposes of paragraph (1), a participant’s account is <quote>excessively invested</quote> 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)).</text></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block></section>
<section id="H86BD754468CA4862BAF365DFD86DE100"><enum>308.</enum><header>Report to participants and beneficiaries of trades in employer securities</header>
<subsection id="HFE71BB46474C486A86D8B57D85A595CB"><enum>(a)</enum><header>In general</header><text>Section 104 of the <act-name parsable-cite="ERISA">Employee Retirement Income Security Act of 1974</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/29/1024">29 U.S.C. 1024</external-xref>) is amended—</text>
<paragraph id="HF1EFD890F05E4F7999924000C0144F42"><enum>(1)</enum><text>by redesignating subsection (d) as subsection (e); and</text></paragraph>
<paragraph id="HE2A5BE508C3F4BB89510E9D3F12B8D2"><enum>(2)</enum><text>by inserting after subsection (c) the following new subsection:</text>
<quoted-block id="H8AE3D0AE04914C35871BAB2CB78FCF82">
<subsection id="HBA3ED1080D4140268FC4007EEB785C00"><enum>(d)</enum>
<paragraph display-inline="yes-display-inline" id="HE8E72C379B014E219F5E305C1EEAC8C9"><enum>(1)</enum><text>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—</text>
<subparagraph indent="up1" id="H8D1C39CA9DE64541B000CBD4F7CF4900"><enum>(A)</enum><text>such transaction is required under section 16 of the <act-name parsable-cite="SEA34">Securities Exchange Act of 1934</act-name> to be reported by such person to the Securities and Exchange Commission, or</text></subparagraph>
<subparagraph indent="up1" id="HB7D8E41D65DE4C4BA38C339017292921"><enum>(B)</enum><text>such person is a named fiduciary of the plan,</text></subparagraph></paragraph><continuation-text continuation-text-level="subsection">such person shall comply with the requirements of paragraph (2).</continuation-text>
<paragraph indent="up1" id="H585DD58F69F24958AF7D1D3F12A7CCBC"><enum>(2)</enum><text>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.</text></paragraph>
<paragraph indent="up1" id="HD96311B0A08D4B719B3E5D59BD962F7F"><enum>(3)</enum>
<subparagraph display-inline="yes-display-inline" id="H5502ECDCB0C945448451AB446D713700"><enum>(A)</enum><text>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.</text></subparagraph>
<subparagraph indent="up1" id="HF6B5DCA800304A2CBF8F1C3350113D24"><enum>(B)</enum><text>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.</text></subparagraph>
<subparagraph indent="up1" id="H1466FE5AA8DB41C6B0F251936FC475F1"><enum>(C)</enum><text>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.</text></subparagraph></paragraph>
<paragraph indent="up1" id="H5389D423AB2D459BB2DBE42497A967DF"><enum>(4)</enum><text>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.</text></paragraph>
<paragraph indent="up1" id="HAFE7EEC0E23045B7AA14F28FEED87071"><enum>(5)</enum><text>For purposes of this subsection, the term <term>employer security</term> has the meaning provided in section 407(d)(1).</text></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></subsection>
<subsection id="H80BE813B713A459683C067008EFEB458"><enum>(b)</enum><header>Effective date</header><text>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.</text></subsection></section>
<enum>IV</enum><header>Improvements in pension information and enforcement</header>
<section id="HDE41B73C34114BC5B2BA25FAE45277CE" display-inline="no-display-inline" section-type="subsequent-section"><enum>401.</enum><header>Pension benefit information</header>
<subsection id="H96719BEBA3A9466EA1239879A757A9F5"><enum>(a)</enum><header>Pension benefit statements required on periodic basis</header>
<paragraph id="H5029EE027C274A56A5C0C0FE20981922"><enum>(1)</enum><header>In general</header><text>Subsection (a) of section 105 of the <act-name parsable-cite="ERISA">Employee Retirement Income Security Act of 1974</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/29/1025">29 U.S.C. 1025(a)</external-xref>) is amended——</text>
<subparagraph id="H11217EA8C8774FC3AEEDF9A18FD5BCE1"><enum>(A)</enum><text>by redesignating paragraphs (1) and (2) as subparagraphs (A) and (B), respectively, and by inserting <quote>(1)</quote> after <quote>(a)</quote>;</text></subparagraph>
<subparagraph id="H0C48381297D84BB38440416B612DA8E1"><enum>(B)</enum><text>by striking <quote>shall furnish to any plan participant or beneficiary who so requests in writing, a statement</quote> and inserting <quote>shall, as provided in paragraph (2), provide to plan participants and beneficiaries statements</quote>; and </text></subparagraph>
<subparagraph id="HBB1A7D27FB9C4EE492568F4D7411E228"><enum>(C)</enum><text>by adding at the end the following new paragraphs:</text>
<quoted-block style="traditional" id="H2C71B6CB81F44F778D9725A8EDEAE967" display-inline="no-display-inline">
<paragraph id="HB213840872444A98B97657B8B3B81731"><enum>(2)</enum>
<subparagraph id="H607ED25FA02B48508135B401A95E5F1B" display-inline="yes-display-inline"><enum>(A)</enum><text>The statements described in paragraph (1) shall be furnished——</text>
<clause id="HFB0E12C6052048E3BDA835464340E27D" display-inline="no-display-inline" indent="up1"><enum>(i)</enum><text>in the case of a defined benefit plan, at last once every 3 years to participants who have attained age 35,</text></clause>
<clause id="H39224446A246455B8182ACD22C42704" indent="up1"><enum>(ii)</enum><text>in the case of an individual account plan, at least annually to each participant, and</text></clause>
<clause id="H2DCA59742C984277BB592DB457FD54C" indent="up1"><enum>(iii)</enum><text>to any participant or beneficiary who so requests in writing.</text></clause></subparagraph>
<subparagraph id="H610A466882E94094969F9CCF1BF514BF" indent="up1"><enum>(B)</enum><text>Subparagraph (A)(i) shall not apply to a plan to which more than 1 unaffiliated employer is required to contribute.</text></subparagraph></paragraph>
<paragraph id="H5FB5D23A11EE411A9B362CFEFA859C67"><enum>(3)</enum><text display-inline="yes-display-inline">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.</text></paragraph>
<paragraph id="H86B432654F4C4CAF90006DB23198B235"><enum>(4)</enum>
<subparagraph id="H52F0870E9BC3417786C2B582E0C0CCB5" display-inline="yes-display-inline"><enum>(A)</enum><text>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—</text>
<clause id="H69257EE8EA1745819C026F0279B57603" indent="up1"><enum>(i)</enum><text>the amount of nonforfeitable accrued benefits as of the statement date which is payable at normal retirement age under the plan,</text></clause>
<clause id="HB87DECB826A24752857973EBEDE627DA" indent="up1"><enum>(ii)</enum><text>the amount of accrued benefits which are forfeitable but which may become nonforfeitable under the terms of the plan,</text></clause>
<clause id="HE23CA51BE110475093C3C60082C44922" indent="up1"><enum>(iii)</enum><text>the amount or percentage of any reduction due to integration of the benefit with the participant’s Social Security benefits or similar governmental benefits,</text></clause>
<clause id="H239F59502E914903B8BAF3959081FA9D" indent="up1"><enum>(iv)</enum><text>information on early retirement benefit and joint and survivor annuity reductions,</text></clause>
<clause id="HC3E5B7A439E648FD90AFD1BEF109B335" indent="up1"><enum>(v)</enum><text>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</text></clause>
<clause id="H35ECA820EEB8408B898DFE3137CF0000" indent="up1"><enum>(vi)</enum><text>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.</text></clause></subparagraph>
<subparagraph id="HF34F78CEA7BF4F8CA402284900D84E8" indent="up1"><enum>(B)</enum><text>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.</text></subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block> </subparagraph></paragraph>
<paragraph id="H409B5D4B31E947B0B100886C2FFCE0DB"><enum>(2)</enum><header>Conforming amendment</header><text>Subsection (d) of section 105 of such Act (<external-xref legal-doc="usc" parsable-cite="usc/29/1025">29 U.S.C. 1025(d)</external-xref>) is repealed.</text> </paragraph></subsection>
<subsection id="HFF3E26FBB6764FB6B541F0067BDEFF4D"><enum>(b)</enum><header>Disclosure of benefit calculations</header>
<paragraph id="H0D4C580D72D84EA78794133E1273D00"><enum>(1)</enum><header>In general</header><text>Section 105 of such Act (as amended by the preceding provisions of this section) is amended further—</text>
<subparagraph id="H117FF0B5F0D74BA1AA1BB5E1F35CAD04"><enum>(A)</enum><text>by redesignating subsection (c) as subsection (d); and</text></subparagraph>
<subparagraph id="HCC68E60AE4814E65A8000671FBB05113"><enum>(B)</enum><text>by inserting after subsection (b) the following new subsection:</text>
<quoted-block id="H8A3837E1C5E94478BA4D66917C543C16">
<subsection id="HF6B334828D0D425D955F46222407E9F0"><enum>(c)</enum>
<paragraph id="H456943034D0D4DA8A65B41E1065282F4" display-inline="yes-display-inline"><enum>(1)</enum><text>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.</text></paragraph>
<paragraph id="H152DC3798EBF4EC2B172D9ADAB6525EF" indent="up1"><enum>(2)</enum><text>The information described in this paragraph includes—</text>
<subparagraph id="HB771B7C0D6DE4237B6D866DE43FC9123"><enum>(A)</enum><text>a worksheet explaining how the amount of the distribution was calculated and stating the assumptions used for such calculation,</text></subparagraph>
<subparagraph id="H31EED9EA7ABD4F91A5C89FE74FB23EDF"><enum>(B)</enum><text>upon written request of the participant or beneficiary, any documents relating to the calculation (if available), and</text></subparagraph>
<subparagraph id="H1C9531F811D041E6A7B5851F8900007C"><enum>(C)</enum><text>such other information as the Secretary may prescribe.</text></subparagraph><continuation-text continuation-text-level="paragraph">Any information provided under this paragraph shall be in a form calculated to be understood by the average plan participant.</continuation-text></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block></subparagraph></paragraph>
<paragraph id="HB52C1C2823A04838B447696451FCA711"><enum>(2)</enum><header>Conforming amendments</header>
<subparagraph id="H2460C031F8294CB09E52EA74D855C028"><enum>(A)</enum><text>Section 101(a)(2) of such Act (<external-xref legal-doc="usc" parsable-cite="usc/29/1021">29 U.S.C. 1021(a)(2)</external-xref>) is amended by striking <quote>105(a) and (c)</quote> and inserting <quote>105(a), (c), and (d)</quote>.</text></subparagraph>
<subparagraph id="HB5336F55A3334E0CB8C5EE57A579BC3"><enum>(B)</enum><text>Section 106(b) of such Act (<external-xref legal-doc="usc" parsable-cite="usc/29/1026">29 U.S.C. 1026(b)</external-xref>) is amended by striking <quote>sections 105(a) and 105(c)</quote> and inserting <quote>section 105</quote>.</text></subparagraph></paragraph> </subsection>
<subsection id="H0D7E9871B2E14A77B42CB03029D2E91D"><enum>(c)</enum><header>Effective date</header>
<paragraph id="H4812BBD1A60E4EF395F153619943E7F9"><enum>(1)</enum><header>In general</header><text>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.</text></paragraph>
<paragraph id="H6BF142CEB5464777ACBA31DBBB70148"><enum>(2)</enum><header>Model investment principles</header><text>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.</text></paragraph></subsection> </section>
<section id="H9562D014ABCB4B4CB3EE1B0029C8DE6B"><enum>402.</enum><header>Disclosures to Secretary of Labor relating to plan termination and relating to plan sponsors after acquisition or merger of plans</header>
<subsection id="H4C72E2C0BF7E46CCAC134661213DBEF1"><enum>(a)</enum><header>In General</header><text>Section 104 of the <act-name parsable-cite="ERISA">Employee Retirement Income Security Act of 1974</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/29/1024">29 U.S.C. 1024</external-xref>) is amended—</text>
<paragraph id="H6B500E31DAFB45D985A51921E6CCE66"><enum>(1)</enum><text>by redesignating subsection (d) as subsection (e); and</text></paragraph>
<paragraph id="H853D7824338D414A87483C989C8BA6AC"><enum>(2)</enum><text>by inserting after subsection (c) the following new subsection:</text>
<quoted-block id="HA22AFEA7F0964CB1A8FFF6702C735353">
<subsection id="H140B788E1124466FBF4390BBBF5C8141"><enum>(d)</enum>
<paragraph display-inline="yes-display-inline" id="HFAB71DC4075F4A66A2FA4EF7706FE15C"><enum>(1)</enum><text>The administrator of any employee benefit plan subject to this part shall file with the Secretary a written notice of—</text>
<subparagraph indent="up1" id="H233D1984B14E471FB74B78B07FE4F730"><enum>(A)</enum><text>the termination of the plan, or</text></subparagraph>
<subparagraph indent="up1" id="H2B5B7338BDC64057A6F5175779A93D9"><enum>(B)</enum><text>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.</text></subparagraph></paragraph>
<paragraph indent="up1" id="H5C0BD70152054FB5004813707D1753C4"><enum>(2)</enum><text>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.</text></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></subsection>
<subsection id="H940AC1E1707247728EAB89654955905E"><enum>(b)</enum><header>Effective date</header><text>The amendments made by this section shall apply with respect to terminations, acquisitions, and mergers occurring after December 31, 2005.</text></subsection></section>
<section id="H14741FB0121A49D596F01DB58AD59B2"><enum>403.</enum><header>Disclosure of operating income of employers adjusted so as to exclude certain components mandated in FASB rules governing accounting for defined benefit pension plans</header>
<subsection id="HA3A100BB0A504491B22E557239C151D3"><enum>(a)</enum><header>Matters to be included in annual report</header><text>Section 103(c) of the <act-name parsable-cite="ERISA">Employee Retirement Income Security Act of 1974</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/29/1023">29 U.S.C. 1023(c)</external-xref>) is amended—</text>
<paragraph id="H9883C17D05CF453FABD3A9EB8D91CBC5"><enum>(1)</enum><text>by redesignating paragraph (5) as paragraph (6); and</text></paragraph>
<paragraph id="H8253629D3BB54804AA77C982CD8C8234"><enum>(2)</enum><text>by inserting after paragraph (4) the following new paragraph:</text>
<quoted-block id="H2583E02313A54B09B86B88C19D4CB96">
<paragraph id="HF4A235808AA84D43803BF6B458C043BB"><enum>(5)</enum><text>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.</text></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></subsection>
<subsection id="H480C3146A48144D9AC507E99F9B71DCB"><enum>(b)</enum><header>Information to be provided annually to participants and beneficiaries</header><text>Section 104(b)(3) of such Act (<external-xref legal-doc="usc" parsable-cite="usc/29/1024">29 U.S.C. 1024(b)(3)</external-xref>) is amended by adding at the end the following new sentence: <quote>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.</quote>.</text></subsection></section>
<section id="HFF9EED7AC06140A7ABCB9349716C9967"><enum>404.</enum><header>Specific information regarding multiemployer plans included in annual report</header><text display-inline="no-display-inline">Section 103 of the <act-name parsable-cite="ERISA">Employee Retirement Income Security Act of 1974</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/29/1023">29 U.S.C. 1023</external-xref>) is amended by adding at the end the following new subsection:</text>
<quoted-block act-name="Employee Retirement Income Security Act of 1974" id="H8EF1B19CC66042E7B303FF84EBD43CC9">
<subsection id="HCD2CD2C845BC46AE91B5A7CEB8457D69"><enum>(f)</enum><text>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:</text>
<paragraph id="HC6C810D8DB33498A9E88EAE402C60049"><enum>(1)</enum><text>the employer’s name,</text></paragraph>
<paragraph id="HA636A59D2DB44842B39526165C46CB33"><enum>(2)</enum><text>the employer’s taxpayer identification number,</text></paragraph>
<paragraph id="HF9B8B1AEB2014C10BDDFF5D38B35959"><enum>(3)</enum><text>the contract period relating to the plan, and</text></paragraph>
<paragraph id="HE664F81B61F94069AF4DD8ACF9EE00C4"><enum>(4)</enum><text>the amount contributed by the employer for the year.</text></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block></section>
<section id="H0EEE2DED394D417D9BC8C9D32FAAD2D3"><enum>405.</enum><header>Limited scope audits</header><text display-inline="no-display-inline">Subparagraph (C) of section 103(a)(3) of the <act-name parsable-cite="ERISA">Employee Retirement Income Security Act of 1974</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/29/1023">29 U.S.C. 1023(a)(3)(C)</external-xref>) is amended to read as follows:</text>
<quoted-block act-name="Employee Retirement Income Security Act of 1974" id="HA136FEB70BA44D7090721CE00957F6C">
<subparagraph indent="up2" id="HC8C98399621144EF9E6091ECF331BD79"><enum>(C)</enum>
<clause display-inline="yes-display-inline" id="H7C83182FC2EC44FB95E8825D5F61E3A4"><enum>(i)</enum><text>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—</text>
<subclause id="HA1918F09EDFE494F8CDA3794228EA369"><enum>(I)</enum><text>are certified by the bank, similar institution, or insurance carrier as complete and accurate,</text></subclause>
<subclause id="H0658ECCA438E447483808B15D0C0B06E"><enum>(II)</enum><text>certify the current value of each asset,</text></subclause>
<subclause id="H96B26ACD4A524FE9ABDDE53FCA7C81A4"><enum>(III)</enum><text>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</text></subclause>
<subclause id="HD98D4DD723C349C9B9FC7468615CB8C2"><enum>(IV)</enum><text>are made a part of the annual report.</text>
<item id="H8FA5638D9DDB4100990032D3100B331" indent="up2"><enum>(ii)</enum><text>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.</text></item>
<item id="H1D6F8DDB190A4D0CBFA27D4FD7CBE030" indent="up2"><enum>(iii)</enum><text>For purposes of clause (i), the term <term>readily ascertainable market value</term> means a value that can be readily determined on an established securities market or in accordance with regulations promulgated by the Secretary.</text></item></subclause></clause></subparagraph><after-quoted-block>.</after-quoted-block></quoted-block></section>
<section id="H48AFAE9E9522484297B984F5B7073FDF"><enum>406.</enum><header>Reporting and enforcement requirements for employee benefit plans</header>
<subsection id="H2F07487397EC458180D1EF4F2EDC7CF0"><enum>(a)</enum><header>In General</header><text>Part 1 of subtitle B of title I of the <act-name parsable-cite="ERISA">Employee Retirement Income Security Act of 1974</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/29/1021">29 U.S.C. 1021 et seq.</external-xref>) is amended—</text>
<paragraph id="HB8F6182563F24CD3974FBE2D695D4DB"><enum>(1)</enum><text>by redesignating section 111 as section 112, and</text></paragraph>
<paragraph id="HA70E412316664D35B44C4DA975C25D32"><enum>(2)</enum><text>inserting after section 110 the following new section:</text>
<quoted-block style="traditional" other-style="hybrid" id="H7F7945D0590E4573BE67ABCDF55977AB">
<section id="HFE8AD102E8AF48BE90F900462CDC03BC"><enum>111.</enum><header>Direct reporting of certain events</header>
<subsection display-inline="yes-display-inline" id="HAB6B9BF70E24484FB4CE7F8E35D19BB0"><enum>(a)</enum><header>Required notifications</header>
<paragraph id="H6845B3B1AD874E26B807C0ADA095665"><enum>(1)</enum><header>Notifications by plan administrator</header><text>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—</text>
<subparagraph id="HE3F05A1080FF4EC5A7F18D1940B674F6"><enum>(A)</enum><text>notify the Secretary of the irregularity in writing; and</text></subparagraph>
<subparagraph id="H7F35FA6830AF4998A13FAA00BC6800E3"><enum>(B)</enum><text>furnish a copy of such notification to the accountant who is currently engaged under section 103(a)(3)(A).</text></subparagraph></paragraph>
<paragraph id="H2C2FFA11395244AF9C262C55178EE1EC"><enum>(2)</enum><header>Notifications by accountant</header>
<subparagraph id="HFDFCDA8E9AAD491FADFB3F1D2E011B4D"><enum>(A)</enum><header>In General</header><text>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—</text>
<clause id="HFAA8E5FA0061456FABDA3BC97403980"><enum>(i)</enum><text>notify the plan administrator of the irregularity in writing, or</text></clause>
<clause id="H065F2142EEC04942861303BC4CE22DFA"><enum>(ii)</enum><text>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.</text></clause></subparagraph>
<subparagraph id="H558F68B2FC0E439082CD009D583F344C"><enum>(B)</enum><header>Notification upon failure of plan administrator to notify</header><text>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.</text></subparagraph></paragraph>
<paragraph id="HBF05869F6D4D463F8F6B150741B0116B"><enum>(3)</enum><header>Irregularity defined</header>
<subparagraph id="HC5471D27438347D7AF38779786A40100"><enum>(A)</enum><text>For purposes of this subsection, the term ’irregularity’ means—</text>
<clause id="H02C4C54E60BA4EFEA3620860AE9874F5"><enum>(i)</enum><text>a theft, embezzlement, or a violation of <external-xref legal-doc="usc" parsable-cite="usc/18/664">section 664</external-xref> of title 18, United States Code (relating to theft or embezzlement from an employee benefit plan);</text></clause>
<clause id="H7B6C90C113D44CCCBC234EBEEBC8F63E"><enum>(ii)</enum><text>an extortion or a violation of <external-xref legal-doc="usc" parsable-cite="usc/18/1951">section 1951</external-xref> of title 18, United States Code (relating to interference with commerce by threats or violence);</text></clause>
<clause id="H24AC67B89B984FD4856D6FD5A6C3C398"><enum>(iii)</enum><text>a bribery, a kickback, or a violation of <external-xref legal-doc="usc" parsable-cite="usc/18/1954">section 1954</external-xref> of title 18, United States Code (relating to offer, acceptance, or solicitation to influence operations of an employee benefit plan);</text></clause>
<clause id="H980E5B399FBE43C69B2BE0ED76D6676D"><enum>(iv)</enum><text>a violation of <external-xref legal-doc="usc" parsable-cite="usc/18/1027">section 1027</external-xref> of title 18, United States Code (relating to false statements and concealment of facts in relation to employer benefit plan records); or</text></clause>
<clause id="HD9B71AEC0AED49DBB3C3DC67DA4805E"><enum>(v)</enum><text>a violation of section 411, 501, or 511 of this title (relating to criminal violations).</text></clause></subparagraph>
<subparagraph id="H69B6C205F2244102ABCC1B3D6C59D35E"><enum>(B)</enum><text>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.</text></subparagraph></paragraph></subsection>
<subsection id="HF33C82BDA56D4C82BA7B49407E5B2400"><enum>(b)</enum><header>Notification upon termination of engagement of accountant</header>
<paragraph id="H683AAF31FCE2462EA5BCB2B31977BD98"><enum>(1)</enum><header>Notification by plan administrator</header><text>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—</text>
<subparagraph id="H9C257D2CD1E3464BAE81ADACFFBC0076"><enum>(A)</enum><text>notify the Secretary in writing of such termination, giving the reasons for such termination, and</text></subparagraph>
<subparagraph id="H300397636BB7414000FCA35F4955ADE1"><enum>(B)</enum><text>furnish the accountant whose engagement was terminated with a copy of the notification sent to the Secretary.</text></subparagraph></paragraph>
<paragraph id="H8949EDD369FB45D890B4EEF4E877AD78"><enum>(2)</enum><header>Notification by accountant</header><text>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.</text></paragraph></subsection>
<subsection id="H8368EA2F10D146ACBFF51C000000732D"><enum>(c)</enum><header>Determination of periods required for notification</header><text>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—</text>
<paragraph id="H291A6D77430647FFADD9CEFCE193EEE"><enum>(1)</enum><text>the day on which such act or omission begins shall not be included; and</text></paragraph>
<paragraph id="HB509FBE686C14308818B541086234100"><enum>(2)</enum><text>Saturdays, Sundays, and legal holidays shall not be included.</text></paragraph><continuation-text continuation-text-level="subsection">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.</continuation-text></subsection>
<subsection id="HD8D85F6E5FBD409BB647A9A22F9500A0"><enum>(d)</enum><header>Immunity for good faith notification</header><text>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.</text></subsection></section><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></subsection>
<subsection id="HEB782D603A5C45039DFECB55A29F6136"><enum>(b)</enum><header>Clerical amendments</header><text display-inline="yes-display-inline"></text>
<paragraph id="HD92E1E4BEFCD47FEABF3A1C0AE61F940"><enum>(1)</enum><text>Section 514(d)(<external-xref legal-doc="usc" parsable-cite="usc/29/114">29 U.S.C. 114(d)</external-xref>) is amended by striking <quote>111</quote> and inserting <quote>112</quote>.</text></paragraph>
<paragraph id="H0824DFED1B954404BF79D2D27854A14F"><enum>(2)</enum><text>The table of contents in section 1 is amended by striking the item relating to section 111 and inserting the following new items:</text>
<quoted-block style="USC" id="H683B3869D2AC48B8B9D11C6F5D5E0569">
<toc regeneration="no-regeneration">
<toc-entry level="section">Sec. 111. Direct reporting of certain events</toc-entry>
<toc-entry level="section">Sec. 112. Repeal and effective date</toc-entry></toc><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></subsection>
<subsection id="HD91957C582BD4C27927BBB6775BACB60"><enum>(c)</enum><header>Effective date</header><text>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.</text></subsection></section>
<section id="HBE0EEE53428D477698CD8EEB4DC64FC0"><enum>407.</enum><header>Study of pension trends and characteristics</header>
<subsection id="H9EC4F3DE5AFB464B9D050993923557EB"><enum>(a)</enum><header>In General</header><text>Section 513 of the <act-name parsable-cite="ERISA">Employee Retirement Income Security Act of 1974</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/29/1143">29 U.S.C. 1143</external-xref>) is amended by adding at the end the following new subsection:</text>
<quoted-block act-name="Employee Retirement Income Security Act of 1974" id="H1458E0C853574396BFE94FCB52A5BA8E">
<subsection id="H8F76F040F3EB4FED8EB8FE463BC6D72E"><enum>(d)</enum><header>Pension surveys</header>
<paragraph id="H3DFAED18005B4F9D82BFE21C70A52D27"><enum>(1)</enum><header>In General</header><text>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.</text></paragraph>
<paragraph id="H6C12EAD03D574301ACA65973E3DE5E04"><enum>(2)</enum><header>Included information</header><text>Each report submitted pursuant to paragraph (1) shall include, but not be limited to, information relating to existing pension plans regarding—</text>
<subparagraph id="H91669A3192A648F59F78F1478C1B1ED5"><enum>(A)</enum><text>the types of such plans,</text></subparagraph>
<subparagraph id="H8EC1159B9854492CB6D75FB0B2D7B574"><enum>(B)</enum><text>the level of employer and employee contributions,</text></subparagraph>
<subparagraph id="H4A992E4931884E8F8D4F31B77D48DD00"><enum>(C)</enum><text>vesting status,</text></subparagraph>
<subparagraph id="H7D8B74A93DD0458FADF8E9793CC06FDC"><enum>(D)</enum><text>accrued benefits,</text></subparagraph>
<subparagraph id="HE89A2056102946A4BB6C13EE75ACF393"><enum>(E)</enum><text>benefit receipt, and</text></subparagraph>
<subparagraph id="HF722302302D84F8D8F1C78C28FE5DFD8"><enum>(F)</enum><text>form of benefit payments.</text></subparagraph><continuation-text continuation-text-level="paragraph">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.</continuation-text></paragraph>
<paragraph id="H0A6918F8FB1240A78B31EF45CEADB50"><enum>(3)</enum><header>Identification of barriers to pension receipt</header><text>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.</text></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block></subsection>
<subsection id="H58FC0F96B009433F878078AF7840A465"><enum>(b)</enum><header>Initial report</header><text>The initial report submitted pursuant to section 513(d) of the <act-name parsable-cite="ERISA">Employee Retirement Income Security Act of 1974</act-name> shall be submitted not later than December 31, 2005.</text></subsection></section>
<section id="H9CA2A99B27EE4F37B22C6FB9918F28EB"><enum>408.</enum><header>Early resolution program for pension benefit claims</header>
<subsection id="H6DAC67A9472548C8BA9DB1C35562801B"><enum>(a)</enum><header>In General</header><text>Section 503 of the <act-name parsable-cite="ERISA">Employee Retirement Income Security Act of 1974</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/29/1133">29 U.S.C. 1133</external-xref>) is amended—</text>
<paragraph id="HD2BB583E74BC4A629C1179FF80A4DBBD"><enum>(1)</enum><text>by adding at the end of the heading the following: <quote><header-in-text level="paragraph" style="OLC">and early resolution of pension claims</header-in-text></quote>;</text></paragraph>
<paragraph id="H5632AA07D7644DE1A571E7F314BC2DC"><enum>(2)</enum><text>by inserting <quote>(a) <header-in-text level="subsection">In general</header-in-text>.—</quote> after <quote>Sec. 503.</quote>; and</text></paragraph>
<paragraph id="H5AB48F48464B4A1280FB9391C9B9E6BB"><enum>(3)</enum><text>by adding at the end the following new subsection:</text>
<quoted-block id="HFB8BE61C4C054B06BDCBFB768CBA5F56">
<subsection id="H3726CE7109D342BDA063C9DC562303D5"><enum>(b)</enum><header>Early resolution program for pension benefit claims</header>
<paragraph id="HC0669F65BCF943618E951EF73CB38E91"><enum>(1)</enum><header>In General</header><text>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.</text></paragraph>
<paragraph id="HD3C033EFDA4E43C6BF578FCE4BE8BE39"><enum>(2)</enum><header>Mediators</header><text>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.</text></paragraph>
<paragraph id="H5E9F7B27818D457EA3D26435948EA208"><enum>(3)</enum><header>Fees</header><text>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.</text></paragraph>
<paragraph id="H35E215F3C0DB43B48CEAB3AAA03D599"><enum>(4)</enum><header>Initiation of proceedings</header><text>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.</text></paragraph>
<paragraph id="HAD712251B9B1437888D1D6E8E41B853"><enum>(5)</enum><header>Participation in proceedings</header><text>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.</text></paragraph>
<paragraph id="H78ECAA72E2CA4900996F4ED1C3026D57"><enum>(6)</enum><header>Time limit for proceedings</header><text>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.</text></paragraph>
<paragraph id="H4A065B3CA3C9446F98AA6B80F2CFFEA7"><enum>(7)</enum><header>Process nonbinding</header><text>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.</text></paragraph>
<paragraph id="H9D5DF86BDB2B401B97947BB8E54311A7"><enum>(8)</enum><header>Resolution through settlement agreement</header><text>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.</text></paragraph>
<paragraph id="H4B635FDAC6C94D00A1E70500409349D5"><enum>(9)</enum><header>Oversight</header><text>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.</text></paragraph>
<paragraph id="HAE7FCEE2E3344BD8854C23DE069753FE"><enum>(10)</enum><header>Notice</header><text>The Secretary shall—</text>
<subparagraph id="HAD9C546E561246E5A5E8FAAC496C5C64"><enum>(A)</enum><text>notify individuals of the program or other sources of assistance in resolving benefits claim disputes, and</text></subparagraph>
<subparagraph id="H046BC80CBF56487B9B55BEC957B08295"><enum>(B)</enum><text>provide model information with respect to the program to be included in all summary plan descriptions and benefit determinations.</text></subparagraph></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></subsection>
<subsection id="H679F3F976AEB47BEAAE86857BD776445"><enum>(b)</enum><header>Effective date</header><text>The amendments made by this section shall apply with respect to claims arising on or after December 31, 2005.</text></subsection></section>
<section id="H11E097F932E14ECDB56CA50369C4918B"><enum>409.</enum><header>Review of benefit determinations</header>
<subsection id="H1232DD56B8064433A2BF809F21498231"><enum>(a)</enum><header>De novo review</header>
<paragraph id="HB1FB2A0D18AB4067ACD17C06473BF1E8"><enum>(1)</enum><header>Internal review</header><text>Section 503 of the <act-name parsable-cite="ERISA">Employee Retirement Income Security Act of 1974</act-name> (as amended by section 408) is amended further—</text>
<subparagraph id="HE0E712BD47F44C31B5F7C19B18F2E970"><enum>(A)</enum><text>by redesignating subsection (b) as subsection (c); and</text></subparagraph>
<subparagraph id="HB44C00226AF14DD685A988A7BCE4DD8E"><enum>(B)</enum><text>by inserting after subsection (a) the following new subsection:</text>
<quoted-block id="HCAA3AF602D004B6793407518A29D8CE1">
<subsection id="H2F2665748DB94D80AECCEDEA1338DEE5" indent="up1"><enum>(b)</enum><header>Review requirements</header><text>Any review required under subsection (a)(2)—</text>
<paragraph id="H83E7A6FADB084C49A9E691FBEE1C7CA4"><enum>(1)</enum><text>shall be de novo, and</text></paragraph>
<paragraph id="H793386203AFE46249054D4663BF36672"><enum>(2)</enum><text>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.</text></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block></subparagraph></paragraph>
<paragraph id="H422372C5D8E14C198E74604BABEC726E"><enum>(2)</enum><header>Court review</header><text>Section 502(e) of such Act (<external-xref legal-doc="usc" parsable-cite="usc/29/1132">29 U.S.C. 1132(e)</external-xref>) is amended by adding at the end the following new paragraph:</text>
<quoted-block id="HBB124C8E20804470AA0293EA00AE1B20">
<paragraph indent="up1" id="H46D0AA9527A04C53A6A895A95C4C8C3F"><enum>(3)</enum><text>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.</text></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></subsection>
<subsection id="H4FD2750D1384421DA3EB6C2ECF7DAC84"><enum>(b)</enum><header>Application of common law principles of contract interpretation</header><text>Section 502(e) of such Act (as amended by subsection (a)(2)) is amended further by adding at the end the following new paragraph:</text>
<quoted-block id="HDBA84A35314442B78BD4242BF61C9458">
<paragraph indent="up1" id="H3A4FC0D3F2CF425D8682BFD1469400AF"><enum>(4)</enum><text>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.</text></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></subsection>
<subsection id="H24477E4AB9D3422988F0E8771C835CC6"><enum>(c)</enum><header>Effective date</header><text>The amendments made by this section shall apply with respect to causes of action arising after December 31, 2005.</text></subsection></section>
<section id="H4AC779E20FEE4405AF00FCF5D04B5961"><enum>410.</enum><header>Allowable relief</header>
<subsection id="HBCB61473B07F45EE0082B64780C4D912"><enum>(a)</enum><header>Pre-judgment interest, attorney fees, and costs of action</header>
<paragraph id="H13845B11D9044923BF9374A7EAD6BB3"><enum>(1)</enum><header>Pre-judgment interest on unpaid benefits</header><text>Section 502(a)(1)(B) of the <act-name parsable-cite="ERISA">Employee Retirement Income Security Act of 1974</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/29/1132">29 U.S.C. 1132(a)(1)(B)</external-xref>) is amended by inserting <quote>(together with reasonable pre-judgment interest on unpaid pension plan benefits)</quote> after <quote>to recover benefits due to him under the terms of his plan</quote>.</text></paragraph>
<paragraph id="H6590BFE96E414DFD8987D7C8CAC7524"><enum>(2)</enum><header>Attorney fees and costs of action</header><text>Section 502(g) of such Act (<external-xref legal-doc="usc" parsable-cite="usc/29/1132">29 U.S.C. 1132(g)</external-xref>) is amended—</text>
<subparagraph id="HADFF97FD9D8E4D5BA2C780164D2B1FB3"><enum>(A)</enum><text>in paragraph (1), by inserting <quote>or (3)</quote> after <quote>paragraph (2)</quote>; and</text></subparagraph>
<subparagraph id="HDFC82035EF494630B001A90004F854C7"><enum>(B)</enum><text>by adding at the end the following new paragraph:</text>
<quoted-block id="HC55210BF67414708AF300085D090CABD">
<paragraph indent="up1" id="H69A5E03A634A407F81FE694D8209DFF"><enum>(3)</enum><text>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.</text></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></subparagraph></paragraph></subsection>
<subsection id="H3A79C854A76E464CBC01BF8579C74215"><enum>(b)</enum><header>Allowance for legal relief</header><text>Section 502(a) of such Act (<external-xref legal-doc="usc" parsable-cite="usc/29/1132">29 U.S.C. 1132(a)</external-xref>) is amended, in paragraphs (3)(B), (5)(B), and (8)(B), by inserting <quote>legal or</quote> before <quote>equitable</quote> each place it appears.</text></subsection>
<subsection id="H75990344A11348D9B816015E3F2758C8"><enum>(c)</enum><header>Effective date</header><text>The amendments made by this section shall apply with respect to causes of action arising after December 31, 2005.</text></subsection></section>
<section id="H389CE68C35B84DBD9313C1D8C2F2F0AA"><enum>411.</enum><header>Assessment by Secretary of Labor of penalties for failures to meet disclosure requirements</header>
<subsection id="H0E92E0AF2F274BB0900080FC9BEC9800"><enum>(a)</enum><header>In General</header><text>Section 502(c) of the <act-name parsable-cite="ERISA">Employee Retirement Income Security Act of 1974</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/29/1132">29 U.S.C. 1132(c)</external-xref>) is amended to read as follows:</text>
<quoted-block act-name="Employee Retirement Income Security Act of 1974" id="H83B6CC6A939F4BDBAD7FD8C0CF0892EA">
<subsection id="H1DAC4970807148BB8CFBBB09000424A9"><enum>(c)</enum>
<paragraph display-inline="yes-display-inline" id="H587C2B743043429488351DDC1749F9B"><enum>(1)</enum><text>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).</text></paragraph>
<paragraph indent="up1" id="HB8CF1DCEDB7B4907A1AAC337E931BACB"><enum>(2)</enum><text>A failure or refusal described in this paragraph is any of the following:</text>
<subparagraph id="H90C935411B5A471A8FAAFFD00DB4B8F"><enum>(A)</enum><text>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.</text></subparagraph>
<subparagraph id="H742A741B99724A71B3BB2BC589C31970"><enum>(B)</enum><text>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.</text></subparagraph>
<subparagraph id="H295EE9D2D53A469BA9E42143B781276"><enum>(C)</enum><text>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.</text></subparagraph>
<subparagraph id="HEA1516FC32B54F5CAAD0E4C66017345E"><enum>(D)</enum><text>A failure or refusal by a plan administrator to meet the requirements of section 101(e)(1) with respect to a participant or beneficiary.</text></subparagraph>
<subparagraph id="H3BBFDB6DBC904C07B3BB64501E763FBB"><enum>(E)</enum><text>A failure or refusal by an employer maintaining a plan to meet the requirements of section 101(e)(2) with respect to any person.</text></subparagraph>
<subparagraph id="H0C81C98EB80C4BF283BA9D3562CCC794"><enum>(F)</enum><text>A failure or refusal by any person to meet the requirements of section 101(f)(1).</text></subparagraph>
<subparagraph id="HC2785F0A1CEF40E6B5AD1D099796BB99"><enum>(G)</enum><text>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).</text></subparagraph>
<subparagraph id="HCB7AC18D13384D61AD53F0FFE469BD3B"><enum>(H)</enum><text>A failure or refusal by a plan administrator to provide notice to participants and beneficiaries in accordance with section 101(i).</text></subparagraph>
<subparagraph id="HAE393BD5A0CF47228C53DDAC8067B630"><enum>(I)</enum><text>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.</text></subparagraph>
<subparagraph id="H6940DDAB08F64E75BFFF6B69B84C0058"><enum>(J)</enum><text>A failure or refusal by a plan administrator to meet the requirements of paragraph (1) or (4) of section 606.</text></subparagraph></paragraph>
<paragraph indent="up1" id="HED8ACBFD24BA491C9E516699F7554334"><enum>(3)</enum><text>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.</text></paragraph>
<paragraph indent="up1" id="H1BA6C35DBBA24EC68DD0018CB5BE8036"><enum>(4)</enum><text>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).</text></paragraph>
<paragraph id="HF2D0EEF87B454F46A3F38FB26496B062" indent="up1" display-inline="no-display-inline"><enum>(5)</enum>
<subparagraph id="H1A0C30544D9E41168D56798C78FD8624" display-inline="yes-display-inline"><enum>(A)</enum><text>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.</text></subparagraph>
<subparagraph id="H0D0C1CF3B2334F98B94BF94F3F4EFA14" indent="up1"><enum>(B)</enum><text>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.</text></subparagraph></paragraph>
<paragraph indent="up1" id="H2CEF90C3CBEF4CC8A8C99CEC5C6DF771"><enum>(6)</enum><text>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.</text></paragraph>
<paragraph indent="up1" id="H4B7872D8D4EE4B5A95C4245039849861"><enum>(7)</enum><text>No liability may be imposed on any person under this subsection for any failure resulting from matters reasonably beyond the control of such person.</text></paragraph>
<paragraph indent="up1" id="HE01CAD438CBD42C2B7BB9FB42B26DE8E"><enum>(8)</enum><text>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 <act-name parsable-cite="SSA">Social Security Act</act-name>.</text></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block></subsection>
<subsection id="H82EC08139AC148FA8DDC1221A745B558"><enum>(b)</enum><header>Conforming amendment</header><text>Section 502(a)(6) of such Act (<external-xref legal-doc="usc" parsable-cite="usc/29/1132">29 U.S.C. 1132(a)(6)</external-xref>) is amended by striking <quote>under paragraph (2), (4), (5), (6), or (7) of subsection (c) or under subsection (i) or (l)</quote> and inserting <quote>under subsection (c), (i), or (l)</quote>.</text></subsection>
<subsection id="HBD5682A3DC9B43798495BD75D0A62C54"><enum>(c)</enum><header>Effective date</header><text>The amendments made by this section shall apply with respect to failures and refusals occurring after December 31, 2005.</text></subsection></section>
<section id="H379789E8A4184DFB0000739CFA20BED7" display-inline="no-display-inline" section-type="subsequent-section"><enum>412.</enum><header>Missing participants and unclaimed benefits</header>
<subsection id="HE1611658725845FDA49E1DA657DFE08E"><enum>(a)</enum><header>Treatment of missing participants of multiemployer plans and certain plans not otherwise covered</header><text>Section 4050 of the Employee Retirement Income Security Act of 1974 (<external-xref legal-doc="usc" parsable-cite="usc/29/1350">29 U.S.C. 1350</external-xref>) is amended—</text>
<paragraph id="H3EA921ACF4D946DCA8E1297E99491CF9"><enum>(1)</enum><text>by redesignating subsections (b) and (c) as subsections (f) and (g), respectively; and</text></paragraph>
<paragraph id="HCE1A4E4678DC4AA992388D88B26F00F4"><enum>(2)</enum><text>by inserting after subsection (a) the following new subsections:</text>
<quoted-block style="OLC" id="HB7235BF6CEBD42AEB768B146F5D70034" display-inline="no-display-inline">
<subsection id="H93E219C4549D482EAC70F5205DCA09F5"><enum>(b)</enum><header>Multiemployer plans</header><text>The corporation shall prescribe rules similar to the rules in subsection (a) for multiemployer plans covered by this title that terminate under section 4041A.</text></subsection>
<subsection id="H5CA4C3B4EFBE4EED8C9B627747A7DCB"><enum>(c)</enum><header>Elective transfer of missing participant’s benefits to the corporation by certain other plans upon termination</header>
<paragraph id="H8BE7D88781F748B3BB663FFF57536090"><enum>(1)</enum><header>In general</header><text>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.</text></paragraph>
<paragraph id="H919857467C5C4D0381006E91B7CC349B"><enum>(2)</enum><header>Information to the corporation</header><text>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—</text>
<subparagraph id="H212044DCEC334F869174963666B1D059"><enum>(A)</enum><text>to the corporation, or</text></subparagraph>
<subparagraph id="H472F220DEA51456C9DC95CFA119D7416"><enum>(B)</enum><text>to an entity other than the corporation or a plan described in paragraph (4)(B)(ii).</text></subparagraph></paragraph>
<paragraph id="H51308DED305F4486BA0023EA16CF30C1"><enum>(3)</enum><header>Payment by the corporation</header><text>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—</text>
<subparagraph id="H13FDBFAB31E64C41B9D11CCB049B75C2"><enum>(A)</enum><text>in a single sum (plus interest), or</text></subparagraph>
<subparagraph id="H8CE8CCF6A6C94D5FB72F00BC478E9599"><enum>(B)</enum><text>in such other form as is specified in regulations of the corporation.</text></subparagraph></paragraph>
<paragraph id="H9F752FB005E646840034A400B14F1CF3"><enum>(4)</enum><header>Plans described</header><text>A plan is described in this paragraph if—</text>
<subparagraph id="HE57BCD649F514DF09041A210DE708864"><enum>(A)</enum><text>the plan is a pension plan (within the meaning of section 3(2))—</text>
<clause id="HC064E4B471AE409E95D519DB792E1B60"><enum>(i)</enum><text>to which the provisions of this section do not apply (without regard to this subsection), and</text></clause>
<clause id="H06E15558AB9546BEA3C4C41B57FAE0D6"><enum>(ii)</enum><text>which is not a plan described in paragraphs (2) through (11) of section 4021(b), and</text></clause></subparagraph>
<subparagraph id="H1B0C9A7406864A5D8987DCCBF987FA00"><enum>(B)</enum><text>at the time the assets are to be distributed upon termination, the plan—</text>
<clause id="H2C143374CEE64C628785B8DA00A2E169"><enum>(i)</enum><text>has missing participants, and</text></clause>
<clause id="H79C4327D4DF14BAC91B27B88BD4900E9"><enum>(ii)</enum><text>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)).</text></clause></subparagraph></paragraph>
<paragraph id="HE62C64EBDE0A4E23B99CDD009C64C3AC" indent="down1"><enum>(5)</enum><header>Certain provisions not to apply</header><text>Subsections (a)(1) and (a)(3) shall not apply to a plan described in paragraph (4).</text></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block> </paragraph></subsection>
<subsection id="H5604A8739B014686AA779819C6D4F59"><enum>(b)</enum><header>Treatment of unclaimed benefits in cases not involving termination or in cases of certain plans</header>
<paragraph id="H0E4FCACECC8F49F89FABE35952816525"><enum>(1)</enum><header>In general</header><text>Section 4050 of such Act (as amended by subsection (a)) is amended further by inserting after subsection (c) the following new subsection:</text>
<quoted-block id="H4A75920624BE41A58FDA65BE18C09824">
<subsection id="H52DEAF22A4C94DDBB4C086E32E282912"><enum>(d)</enum><header>Treatment of unclaimed benefits in cases not involving termination or in cases of certain plans</header>
<paragraph id="H6D22F7E377324CC1924D82622FD08E6B"><enum>(1)</enum><header>Elective transfer of unclaimed benefits to the corporation</header><text>The plan administrator of a plan described in paragraph (6) may elect to transfer unclaimed benefits to the corporation.</text></paragraph>
<paragraph id="H59D9C37BA089487E87B2C3D6045CED76"><enum>(2)</enum><header>Information to the corporation</header><text>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.</text></paragraph>
<paragraph id="H928E25F128004AB99E41CA896CA66D2D"><enum>(3)</enum><header>Payment to the corporation</header><text>With respect to any participant, any transfer of an unclaimed benefit to the corporation shall—</text>
<subparagraph id="H70E620E6CB244F4695D2DF22C6A1F72"><enum>(A)</enum><text>in the case of a defined benefit plan, be a transfer of the participant’s designated benefit, or</text></subparagraph>
<subparagraph id="H8CC1877AD549495A98B3266407550FE"><enum>(B)</enum><text>in the case of an individual account plan, be a transfer of the participant’s vested account balance under the plan.</text></subparagraph></paragraph>
<paragraph id="H247CF5C352E54D5AA097BE2B5212E680"><enum>(4)</enum><header>Payment by the corporation</header><text>Subject to such reasonable restrictions as may be prescribed in regulations of the corporation (relating to investment limitations and otherwise)—</text>
<subparagraph id="HC8D46837AE404463A4C88B00391229E8"><enum>(A)</enum><text>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</text></subparagraph>
<subparagraph id="HC94FC8A51B204E7281C03DC33D4C91D5"><enum>(B)</enum><text>such benefits shall—</text>
<clause id="H7DCA578C6C474BC981588B6E749E69ED"><enum>(i)</enum><text>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</text></clause>
<clause id="H2C1B0A0DF0DA47D1A5C135823B19482"><enum>(ii)</enum><text>in the case of a defined benefit plan, be paid—</text>
<subclause id="H19524C26EF984012978C7B133ED5FC83"><enum>(I)</enum><text>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</text></subclause>
<subclause id="HD057045F8AAB4B5ABAFF5921AFC02719"><enum>(II)</enum><text>in a form determined under regulations of the corporation.</text></subclause></clause></subparagraph></paragraph>
<paragraph id="HE3E63C35BB504612B38BB5321E284C4B"><enum>(5)</enum><header>Notice</header><text>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).</text></paragraph>
<paragraph id="HCC20DD7036B544AB901100A8FF69C734"><enum>(6)</enum><header>Plans described</header><text>A plan is described in this paragraph if the plan is a pension plan (within the meaning of section 3(2)—</text>
<subparagraph id="HD15F0ABE7E3F4FFD00A0736398B19286"><enum>(A)</enum>
<clause id="H16B499EAFE8B4E14AD8D1FD167042E94" display-inline="yes-display-inline"><enum>(i)</enum><text>which has neither terminated nor is in the process of terminating, or</text></clause>
<clause id="H4134C6E6C47D4FA68587195C741302DA" indent="up1"><enum>(ii)</enum><text>in the case of an unclaimed benefit to which <external-xref legal-doc="usc" parsable-cite="usc/26/401">section 401(a)(31)(B)</external-xref> 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</text></clause></subparagraph>
<subparagraph id="HB18EF7AA22464BAE933419CD738E94B3"><enum>(B)</enum><text>which is not a plan described in paragraphs (2) through (11) of section 4021(b).</text></subparagraph></paragraph>
<paragraph id="H76DEEECD90B142C084E6CF00D1D00510"><enum>(7)</enum><header>Certain provisions not to apply</header><text>Subsection (a) shall not apply to a plan described in paragraph (6).</text></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block></paragraph>
<paragraph id="HD06AB99E5DFF47FDA5229BC3D32276A5"><enum>(2)</enum><header>Unclaimed benefit defined</header><text>Subsection (f) of section 4050 of such Act (as redesignated by subsection (a)(1)) is amended by adding at the end the following paragraph:</text>
<quoted-block act-name="Employee" id="H059C06DE3A5848329485A3946E118894">
<paragraph id="H9FABC274DFEF4ADD886712CF59F1AA34"><enum>(3)</enum><header>Unclaimed benefit</header><text>The term <term>unclaimed benefit</term> means—</text>
<subparagraph id="H8B9BB6B8D714485C9411BA704BBBE432"><enum>(A)</enum><text>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;</text></subparagraph>
<subparagraph id="HB3D1F5374B734AAC9F7C3F9992865075"><enum>(B)</enum><text>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</text></subparagraph>
<subparagraph id="H5F49422C62D94E19BB54A1E750A1A9FB"><enum>(C)</enum><text>any benefit to which <external-xref legal-doc="usc" parsable-cite="usc/26/401">section 401(a)(31)(B)</external-xref> 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.</text></subparagraph><continuation-text continuation-text-level="paragraph">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.</continuation-text></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></paragraph>
<paragraph id="H5C74FF5E147149A3ACF315771EC3F230"><enum>(3)</enum><header>Conforming amendment</header><text>Section 4021(b) of such Act (<external-xref legal-doc="usc" parsable-cite="usc/29/1321">29 U.S.C. 1321(b)(1)</external-xref>) is amended by striking <quote>This</quote> and inserting <quote>Except to the extent provided in subsections (c) and (d) of section 4050, this</quote>.</text></paragraph></subsection>
<subsection id="H5270B2E67F3F41AD859C06B5E0950E"><enum>(c)</enum><header>Treatment of transferred assets</header><text>Section 4050 of such Act (as amended by the preceding provisions of this section) is amended further—</text>
<paragraph id="HC72ADA99E57442498E0058ED551CAFAE"><enum>(1)</enum><text>in subsection (a), by striking paragraph (2) and redesignating paragraph (3) as paragraph (2); and</text></paragraph>
<paragraph id="H4914D735D8124DE28C6F09357DF58BC6"><enum>(2)</enum><text>by inserting after subsection (d) the following new subsection:</text>
<quoted-block style="OLC" id="HE9A78786F2334244004D64506C2D33E4" display-inline="no-display-inline">
<subsection id="HB03170E9AB5740BA88F491A99CF0C0CC"><enum>(e)</enum><header>Treatment of transferred assets</header><text>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.</text></subsection><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></subsection>
<subsection id="H402B604CB2244309850829DD010865B6"><enum>(d)</enum><header>Escheat laws superseded</header><text>Section 514(b) of such Act (<external-xref legal-doc="usc" parsable-cite="usc/29/1144">29 U.S.C. 1144(b)</external-xref>) is amended—</text>
<paragraph id="HC88A6DDE0ACA43E9B253583F582F5C4F"><enum>(1)</enum><text>by redesignating paragraph (9) as paragraph (10), and</text></paragraph>
<paragraph id="HD3E452FE4E4C418586DBA3C1FA816EE8"><enum>(2)</enum><text>by inserting after paragraph (8) the following new paragraph:</text>
<quoted-block id="HE7C609EBCC614A8EA63D778CC6AB1292">
<paragraph id="H592EA9C6A3234FFB84092D969455D3C9"><enum>(9)</enum><text>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).</text></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></subsection>
<subsection id="HFD192023B63D46BE9C27FDBA8729910"><enum>(e)</enum><header>Effective dates and related rules</header>
<paragraph id="HB86FCE1F7E89464E8702265EC9CD92AA"><enum>(1)</enum><header>In general</header><text>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. </text></paragraph>
<paragraph id="H652444BAD21944559100E7008C48B927"><enum>(2)</enum><header>Regulations</header><text>The Pension Benefit Guaranty Corporation shall issue regulations necessary to carry out the amendments made by this section not later than December 31, 2005.</text></paragraph> </subsection></section>
<section id="HCADC22BF8736473F006336ECB3FBDAD1"><enum>413.</enum><header>Fiduciary duties with respect to changes in investment options</header>
<subsection id="HA3D6DEB86AB846E3B462C01BF91FAEDE"><enum>(a)</enum><header>In General</header><text>Section 404(c) of the <act-name parsable-cite="ERISA">Employee Retirement Income Security Act of 1974</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/29/1104">29 U.S.C. 1104(c)</external-xref>) is amended—</text>
<paragraph id="H8F96C0DBF07547648D8CC0B2D39E054"><enum>(1)</enum><text>by adjusting the margination of paragraphs (2) and (3) so as to align them with paragraph (1); and</text></paragraph>
<paragraph id="HE9C61B575E5E4BB6B715C79DE8893EAC"><enum>(2)</enum><text>by adding at the end the following new paragraph:</text>
<quoted-block act-name="Employee Retirement Income Security Act of 1974" id="HF385B0C3192A4097A748DC3562E1E629">
<paragraph indent="up1" id="HC98F04C445BC463685312BFB61485EF0"><enum>(4)</enum><text>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.</text></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></subsection>
<subsection id="H16CD01DBAB264560A5FE76DD83A135D9"><enum>(b)</enum><header>Effective date</header><text>The amendment made by this section shall apply with respect to plan amendments adopted after the date of the enactment of this Act.</text></subsection></section>
<section id="HFD48E9681B594A32BE778C3B0800E6AD" display-inline="no-display-inline" section-type="subsequent-section"><enum>414.</enum><header>Office of Pension Participant Advocacy</header>
<subsection id="H9A497FD0DC3442758600E978BB6715C3"><enum>(a)</enum><header>In general</header><text>Title III of the <act-name parsable-cite="ERISA">Employee Retirement Income Security Act of 1974</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/29/3001">29 U.S.C. 3001 et seq.</external-xref>) is amended by adding at the end the following:</text>
<quoted-block act-name="Employee" id="H55E7F594B20D4322B66630FA5B8D6F90">
<subtitle id="HE357B3631D644D7EA29979E62F1217C6"><enum>D</enum><header>Office of Pension Participant Advocacy</header>
<section id="HB9613C9985D242158000ADB54549C715"><enum>3051.</enum><header>Office of Pension Participant Advocacy</header>
<subsection id="HA597C1048A49452AAE1FA15D81539BED"><enum>(a)</enum><header>Establishment</header>
<paragraph id="H86C8BA79F48141B6B4F9E827AE818BA8"><enum>(1)</enum><header>In general</header><text>There is established in the Department of Labor an office to be known as the <quote>Office of Pension Participant Advocacy</quote>.</text></paragraph>
<paragraph id="H5D2382D07D2F46839C5B0332552064AD"><enum>(2)</enum><header>Pension Participant Advocate</header><text>The Office of Pension Participant Advocacy shall be under the supervision and direction of an official to be known as the <quote>Pension Participant Advocate</quote> who shall—</text>
<subparagraph id="HF5CDA6BEDCEB431194DA0062B53087D6"><enum>(A)</enum><text>have demonstrated experience in the area of pension participant assistance, and</text></subparagraph>
<subparagraph id="HEFF937CBA7124B948D9B936C002B09A"><enum>(B)</enum><text>be selected by the Secretary after consultation with pension participant advocacy organizations.</text></subparagraph><continuation-text continuation-text-level="paragraph">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 <external-xref legal-doc="usc" parsable-cite="usc/5/5382">section 5382</external-xref> of title 5, United States Code.</continuation-text></paragraph></subsection>
<subsection id="H4DB242DCD5974C9D894FEA2833008E71"><enum>(b)</enum><header>Functions of office</header><text>It shall be the function of the Office of Pension Participant Advocacy to—</text>
<paragraph id="HBFDE3F3AFC0D421A9988DF01436400F6"><enum>(1)</enum><text>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,</text></paragraph>
<paragraph id="H39D83E047EAB4F2A954FFCCE00D73410"><enum>(2)</enum><text>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—</text>
<subparagraph id="H184CB3A4BD4E4F12B0198551CB5269C"><enum>(A)</enum><text>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,</text></subparagraph>
<subparagraph id="H6E7C9F2CC16C42FCA2EAABB467ED4393"><enum>(B)</enum><text>identifying significant problems for pension plan participants and the capabilities of the Federal Government, business, and such organizations to address such problems, and</text></subparagraph>
<subparagraph id="H88BAA5EDC5554E1396F2AE1F9778F5D3"><enum>(C)</enum><text>developing proposals for changes in such policies and activities to correct such problems, and communicating such changes to the appropriate officials,</text></subparagraph></paragraph>
<paragraph id="H8203C04896D146F1B76CA2B5AF7E87B"><enum>(3)</enum><text>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—</text>
<subparagraph id="H51071E6EC5324EB68073789EEC2500FF"><enum>(A)</enum><text>enlisting the cooperation of the public and private sectors in disseminating information, and</text></subparagraph>
<subparagraph id="HC60C21D75388431787EC334517785CBD"><enum>(B)</enum><text>forming private-public partnerships and other efforts to assist pension plan participants in receiving their benefits,</text></subparagraph></paragraph>
<paragraph id="H06A444129B364D6AA380D4C8F6DEBEA3"><enum>(4)</enum><text>advocate for the full attainment of the rights of pension plan participants, including by making pension plan sponsors and fiduciaries aware of their responsibilities,</text></paragraph>
<paragraph id="HE5A3B889A23F41CAB5EB56608DB7FF6D"><enum>(5)</enum><text>give priority to the special needs of low and moderate income participants, and</text></paragraph>
<paragraph id="HA2BBCF6A17D843F6A5C9BD3300038086"><enum>(6)</enum><text>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.</text></paragraph></subsection>
<subsection id="H1AC8CA33B9994211B4533E2F4F296E2F"><enum>(c)</enum><header>Reports</header>
<paragraph id="H05E8C54810E144D8A8EAFB187CCB1749"><enum>(1)</enum><header>Annual report</header><text>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—</text>
<subparagraph id="HB3186E36325A480ABF99EE00786D44E"><enum>(A)</enum><text>identify significant problems the Advocate has identified,</text></subparagraph>
<subparagraph id="H19FE226EF2A3440096C8754C75261C8F"><enum>(B)</enum><text>include specific legislative and regulatory changes to address the problems, and</text></subparagraph>
<subparagraph id="H8FB8F5613FF843328C8427001D5602D1"><enum>(C)</enum><text>identify any actions taken to correct problems identified in any previous report.</text></subparagraph><continuation-text continuation-text-level="paragraph">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.</continuation-text></paragraph>
<paragraph id="H1F6421DBCA79435AA531AD5B98D8605F"><enum>(2)</enum><header>Specific reports</header><text>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.</text></paragraph>
<paragraph id="H22C4A87811274271B7FF62DD65C389B0"><enum>(3)</enum><header>Reports to be submitted directly</header><text>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.</text></paragraph></subsection>
<subsection id="H81324CC02C674C4B9816200002BCB181"><enum>(d)</enum><header>Specific powers</header>
<paragraph id="H24B976709C894173BBC300A172271C58"><enum>(1)</enum><header>Receipt of information</header><text>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.</text></paragraph>
<paragraph id="HAA23253C5E094835974906FC6473CA9"><enum>(2)</enum><header>Appearances</header><text>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.</text></paragraph>
<paragraph id="H00CF95A2CD1E4865B600B32FEAD3E99E"><enum>(3)</enum><header>Contracting authority</header><text>In carrying out responsibilities under subsection (b)(5), the Pension Participant Advocate may, in addition to any other authority provided by law—</text>
<subparagraph id="HB6C08D728DBC4E4190BDF891FBC6835D"><enum>(A)</enum><text>contract with any person to acquire statistical information with respect to pension plan participants, and</text></subparagraph>
<subparagraph id="H7D03F9BBE44D402C80DD73BBA1061C20"><enum>(B)</enum><text>conduct direct surveys of pension plan participants.</text></subparagraph></paragraph></subsection></section></subtitle><after-quoted-block>.</after-quoted-block></quoted-block></subsection>
<subsection id="HB5085B3D3392482DA0656714767B6117"><enum>(b)</enum><header>Conforming amendment</header><text>The table of contents for title III of such Act is amended by adding at the end the following:</text>
<quoted-block style="USC" id="H31B8F58019D54A7281E378B85CB51C00">
<toc regeneration="no-regeneration">
<toc-entry level="subtitle">Subtitle C—Office of Pension Participant Advocacy</toc-entry>
<toc-entry level="section">3051. Office of Pension Participant Advocacy</toc-entry></toc><after-quoted-block>.</after-quoted-block></quoted-block></subsection>
<subsection id="H64C9571CC8CE46948142E5F0923E0900"><enum>(c)</enum><header>Effective date and transition rules</header>
<paragraph id="H5C8812A39FD645368EC6DA6D931C4E9C"><enum>(1)</enum><header>Effective date</header><text>The amendment made by this section shall take effect on January 1, 2005.</text></paragraph>
<paragraph id="HB2A9C66A8EB14CB390DF4038F3BCBEE5"><enum>(2)</enum><header>Abolishment of the Office of Participant Assistance and Communications and related transition rules</header><text>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).</text></paragraph></subsection></section>
<section id="H98A4E064D3C9495CBFD3217BFADC6C77"><enum>415.</enum><header>Exclusivity of powers and procedures applicable to rights or claims</header><text display-inline="no-display-inline">Section 502 of the <act-name parsable-cite="ERISA">Employee Retirement Income Security Act of 1974</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/29/1132">29 U.S.C. 1132</external-xref>) is amended by adding at the end the following new subsection:</text>
<quoted-block act-name="Employee Retirement Income Security Act of 1974" id="HF0AC7166CB8F49FDB98F33F11C4550B5">
<subsection id="HAC4BE4A4FF694711A403DFD1838F9B74"><enum>(n)</enum><text>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.</text></subsection><after-quoted-block>.</after-quoted-block></quoted-block></section>
<enum>V</enum><header>Improved pension protections for the changing workforce</header>
<section id="H20D3F777B98143619FF5BE4DF9DEFCC"><enum>501.</enum><header>Loans from retirement plans for health insurance and job training expenses</header>
<subsection id="H21D8ADC031554D9F9B5DD2C17F11A700"><enum>(a)</enum><header>In General</header><text>Section 206 of the <act-name parsable-cite="ERISA">Employee Retirement Income Security Act of 1974</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/29/1056">29 U.S.C. 1056</external-xref>) (as amended by sections 105 and 201) is amended further by adding at the end the following new subsection:</text>
<quoted-block act-name="Employee Retirement Income Security Act of 1974" id="H3BCAE0104EAF45FABA1BB5C0E1361C89">
<subsection id="HA0303F97E3D0486D91E4AEFFB5FD102"><enum>(i)</enum><header>Loans from retirement plans for health insurance and job training expenses</header>
<paragraph id="HA06FBA67CF874AA2A0CAA5E92E009F48"><enum>(1)</enum><header>In General</header><text>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—</text>
<subparagraph id="H6A747F1D3B094E6A9DD4927FF7BC0123"><enum>(A)</enum><text>for payments for insurance which constitutes medical care for the participant and the participant’s spouse and dependents, or</text></subparagraph>
<subparagraph id="H06B270A3AEEC4ED98E839700814745A4"><enum>(B)</enum><text>for job training expenses.</text></subparagraph></paragraph>
<paragraph id="H7AB11B64D52A4F779532C62BB4031A1"><enum>(2)</enum><header>Qualified loan</header><text>For purposes of this subsection, the term <term>qualified loan</term> means a loan—</text>
<subparagraph id="HAA2C84CC3B6F4982A36C596D3CB6F74E"><enum>(A)</enum><text>which by its terms requires interest on the loan to accrue not less frequently than monthly,</text></subparagraph>
<subparagraph id="H7F39B4817B6A48ED95B8004CDDD7ADF2"><enum>(B)</enum><text>which by its terms requires—</text>
<clause id="HD0FA20F00E484793896F85CCF8557DD"><enum>(i)</enum><text>repayment to begin not later than 18 months after the date of the loan, and</text></clause>
<clause id="H1D2C63C1B5214390ADE464B921E0ABCF"><enum>(ii)</enum><text>repayment in full not later the date which is 36 months after the date of the loan, and</text></clause></subparagraph>
<subparagraph id="HE9B9AE047ED84B68A567267CCCE3F7F6"><enum>(C)</enum><text>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.</text></subparagraph></paragraph>
<paragraph id="H36470721EFD049F782D28D2ED6EECFE"><enum>(3)</enum><header>Limitation on amount of loans</header><text>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.</text></paragraph>
<paragraph id="H32914B30218D42A4AC17663092019185"><enum>(4)</enum><header>Limitation on number of loans</header><text>Not more than 3 loans to an individual under this subsection may be outstanding at any time.</text></paragraph>
<paragraph id="H8B71E32337A04EC898A5B11F3EB33CF9"><enum>(5)</enum><header>Delinquencies treated as distribution</header><text>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.</text></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block></subsection>
<subsection id="HA4543D7D27ED459083A6D8133D5C77FC"><enum>(b)</enum><header>Prohibited transaction exemption</header><text>Section 408(b) of such Act (<external-xref legal-doc="usc" parsable-cite="usc/29/1108">29 U.S.C. 1108(b)</external-xref>) is amended by adding at the end the following new paragraph:</text>
<quoted-block id="H83F75FF10FFB4DA3A498681CE8DA439E">
<paragraph id="H68A2CBE5FDFA4B27BA25F641B3E9B88"><enum>(14)</enum><text>Any loan made by the plan to a disqualified person who is a participant or beneficiary of the plan if such loan—</text>
<subparagraph id="HED5EB5E8732E405000FA7C2109CF6936"><enum>(A)</enum><text>is for the payment of health insurance premiums or job training expenses, and</text></subparagraph>
<subparagraph id="HB1359896DCB648D5ACEA5D17EBCFB611"><enum>(B)</enum><text>meets the requirements of section 206(i).</text></subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></subsection>
<subsection id="HF07B1C56966C4C0BB0E92078F199FA5B"><enum>(c)</enum><header>Effective date</header><text>The amendments made by this section shall apply to loans made after the effective date specified in section 601.</text></subsection></section>
<section id="H992D8122C15D4F3D92DBF49012626543"><enum>502.</enum><header>Automatic rollover upon mandatory distribution in excess of $1,000</header><text display-inline="no-display-inline">Section 206 of the <act-name parsable-cite="ERISA">Employee Retirement Income Security Act of 1974</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/29/1056">29 U.S.C. 1056</external-xref>) (as amended by sections 105, 201, and 501) is amended further by adding at the end the following new subsection:</text>
<quoted-block act-name="Employee Retirement Income Security Act of 1974" id="HB51ED18236D1429396384272FD09F5F">
<subsection id="HC9411A6C3289431CA1091D9C4EFBB74E"><enum>(j)</enum><header>Direct transfers of mandatory distributions in excess of $1,000</header>
<paragraph id="HBB8CECC8DD244132846C3EB9B0CDE596"><enum>(1)</enum><header>In General</header><text>A pension plan shall provide that, if—</text>
<subparagraph id="HC5F91B8E013848F0AB00A99D0C06FC"><enum>(A)</enum><text>a distribution described in paragraph (2) is made, and</text></subparagraph>
<subparagraph id="HEEB9127BD07D4E559178EF2365F68370"><enum>(B)</enum><text>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,</text></subparagraph><continuation-text continuation-text-level="paragraph">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 <external-xref legal-doc="usc" parsable-cite="usc/26/402">section 402(f)</external-xref> of the Internal Revenue Code of 1986) that the distribution may be transferred to another individual retirement plan.</continuation-text></paragraph>
<paragraph id="HD2FB49B1BB684AE19590B619C7B26A8"><enum>(2)</enum><header>Distribution described</header><text>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.</text></paragraph>
<paragraph id="H2F2B7E4451B14A21981D10CE5F13009B"><enum>(3)</enum><header>Definitions</header><text>For purposes of this subsection—</text>
<subparagraph id="HD63528B56D0346EDBD8423ACD269C0BB"><enum>(A)</enum><header>Eligible retirement plan</header><text>The term <term>eligible retirement plan</term> has the meaning given such term by <external-xref legal-doc="usc" parsable-cite="usc/26/402">section 402(c)(8)(B)</external-xref> 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.</text></subparagraph>
<subparagraph id="H15781BE0B05A4D8A904076851B68F21E"><enum>(B)</enum><header>Individual retirement plan</header><text>The term <term>individual retirement plan</term> has the meaning given such term by <external-xref legal-doc="usc" parsable-cite="usc/26/7701">section 7701(a)(37)</external-xref> of the Internal Revenue Code of 1986.</text></subparagraph></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block></section>
<section id="H14D53C1C988C4436B8313C26A8F1B5A0"><enum>503.</enum><header>Prompt distribution from defined contribution plans upon termination of participant’s covered employment</header><text display-inline="no-display-inline">Section 206(a) of the <act-name parsable-cite="ERISA">Employee Retirement Income Security Act of 1974</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/29/1056">29 U.S.C. 1056(a)</external-xref>) is amended—</text>
<paragraph id="H70FF1A0175894DB6AB40AD38DFC94EA8"><enum>(1)</enum><text>by redesignating paragraphs (1), (2), and (3) as subparagraphs (A), (B), and (C), respectively, and by inserting <quote>(1)</quote> after <quote>(a)</quote>;</text></paragraph>
<paragraph id="H0473B18296FE4481BCC20004E90981D4"><enum>(2)</enum><text>in the first sentence, by striking <quote>pension plan</quote> and inserting <quote>defined benefit plan</quote>;</text></paragraph>
<paragraph id="H22C44DA9B4CE4BB7B1D1E1FA5CAA2F8"><enum>(3)</enum><text>in the second sentence, by striking <quote>In the case of a plan</quote> and inserting <quote>In the case of a defined benefit plan</quote>; and</text></paragraph>
<paragraph id="H87B83F603599461E84E0016633118DE4"><enum>(4)</enum><text>by adding at the end the following new paragraph:</text>
<quoted-block id="H53EE0617E8354DF08EA0AA57B9F02B00">
<paragraph indent="up1" id="H5F2547953C7F43649D49622E44008582"><enum>(2)</enum>
<subparagraph display-inline="yes-display-inline" id="H9FDAB41EA00E496D8BC9539594CB2BEA"><enum>(A)</enum><text>Except as provided in subparagraph (B), each defined contribution plan shall provide that, unless the participant otherwise elects—</text>
<clause indent="up1" id="HE7ACC219EEAE4B4DA660CC18BAFE069E"><enum>(i)</enum><text>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</text></clause>
<clause indent="up1" id="H22E248E05BE043BA9066D7AAD80067B6"><enum>(ii)</enum><text>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.</text></clause></subparagraph>
<subparagraph indent="up1" id="H6BF98C8C3C194561A2A9903252630014"><enum>(B)</enum><text>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.</text></subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></section>
<enum>VI</enum><header>General provisions</header>
<section id="H42E48F4887534C15AFACC95738755631"><enum>601.</enum><header>General effective date</header>
<subsection id="H7DE9394BF4244C2D9544DC6FEB175E59"><enum>(a)</enum><header>In General</header><text>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.</text></subsection>
<subsection id="HC7A3E7A65EBF4FFCA050DD005FACF604"><enum>(b)</enum><header>Special rule for collectively bargained plans</header><text>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 <quote>January 1, 2002</quote> the date of the commencement of the first plan year beginning on or after the earlier of—</text>
<paragraph id="HCA7BD2B7F6064777BAD544DCD53B8E92"><enum>(1)</enum><text>the later of—</text>
<subparagraph id="H092413AD3DAD4D3E983EA600D1C8EE06"><enum>(A)</enum><text>January 1, 2007, or</text></subparagraph>
<subparagraph id="H5793292A203C46A8A4EEA6E43F09EAB0"><enum>(B)</enum><text>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</text></subparagraph></paragraph>
<paragraph id="H14FDD8DF7B1D46D7AE8F35C9D239F600"><enum>(2)</enum><text>January 1, 2008.</text></paragraph></subsection></section>
<section id="H967D3ABC670A4DA68FE7D4FBA4B9E8D6"><enum>602.</enum><header>Plan amendments</header><text display-inline="no-display-inline">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—</text>
<paragraph id="HDC16A6666FE44DA99C46977374680003"><enum>(1)</enum><text>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</text></paragraph>
<paragraph id="H29319C4E18BB42979C8DA0A09476878F"><enum>(2)</enum><text>such plan amendment applies retroactively to the period after such amendment made by this Act takes effect and such first plan year.</text></paragraph></section>