[Congressional Bills 111th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1984 Introduced in House (IH)]

111th CONGRESS
  1st Session
                                H. R. 1984

To amend title I of the Employee Retirement Income Security Act of 1974 
   to provide special reporting and disclosure rules for individual 
 account plans and to provide a minimum investment option requirement 
                            for such plans.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             April 21, 2009

Mr. George Miller of California (for himself, Mr. Andrews, Ms. Woolsey, 
Mr. Sablan, Mr. Grijalva, Ms. Hirono, Ms. Clarke, Mr. Hare, Mrs. Davis 
of California, and Mr. Kildee) introduced the following bill; which was 
            referred to the Committee on Education and Labor

_______________________________________________________________________

                                 A BILL


 
To amend title I of the Employee Retirement Income Security Act of 1974 
   to provide special reporting and disclosure rules for individual 
 account plans and to provide a minimum investment option requirement 
                            for such plans.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``401(k) Fair Disclosure for 
Retirement Security Act of 2009''.

SEC. 2. SPECIAL REPORTING AND DISCLOSURE RULES FOR INDIVIDUAL ACCOUNT 
              PLANS.

    (a) Additional Reporting and Disclosure Rules.--Part 1 of subtitle 
B of title I of the Employee Retirement Income Security Act of 1974 is 
amended--
            (1) by redesignating section 111 (29 U.S.C. 1031) as 
        section 112; and
            (2) by inserting after section 110 (29 U.S.C. 1030) the 
        following new section:

``SEC. 111. SPECIAL REPORTING AND DISCLOSURE RULES FOR INDIVIDUAL 
              ACCOUNT PLANS.

    ``(a) Disclosure to Employers Sponsoring Individual Account Plans 
Regarding Services Necessary for Establishment or Operation of Plans.--
            ``(1) Service disclosure statement.--The plan administrator 
        of an individual account plan (or any other plan official with 
        contracting authority under the terms of the plan) and any 
        other person may not enter into a contract for services to the 
        plan (including, for purposes of this section, the offering of 
        any investment option to the plan) unless such plan 
        administrator or other official has received, not less than 10 
        business days in advance of entering into the contract, a 
        single written statement from such person which--
                    ``(A) describes such services for the plan that 
                will be provided in connection with the contract, and
                    ``(B) provides the expected total annual charges 
                for such services for the plan that will be provided in 
                connection with the contract, including a reasonable 
                allocation of such total annual charges among all 
                relevant component charges specified in paragraph (2) 
                (regardless of how the charges are actually assessed).
        The description of the services and the charges for the 
        services shall be displayed prominently in the written 
        statement and shall be presented in a format which is 
        understandable to the typical plan administrator.
            ``(2) Minimum allocation requirements.--The allocation 
        required under paragraph (1)(B) in connection with the services 
        provided under each contract shall specify component charges 
        (to the extent such services for the plan are provided under 
        the contract) as follows:
                    ``(A) charges for administration and recordkeeping,
                    ``(B) transaction-based charges,
                    ``(C) charges for investment management, and
                    ``(D) all such charges not described in 
                subparagraph (A), (B), or (C) as may be specified by 
                the Secretary.
            ``(3) Presentation of charges.--The total charges described 
        in paragraph (2)(A) and the total charges described in 
        paragraph (2)(C) shall each be presented in the written 
        statement as an aggregate total dollar amount, and, in 
        addition, each of such total charges may also be presented as a 
        percentage of assets. The charges described in paragraph (2)(B) 
        shall be itemized separately as dollar amounts or as 
        percentages of the applicable base amounts.
            ``(4) Estimations.--For purposes of providing the statement 
        required under this subsection in connection with any service, 
        the service provider may provide a reasonable and 
        representative estimate of the charges required to be disclosed 
        under paragraph (1)(B) and shall indicate any such estimate as 
        being such an estimate. Any such estimate shall be based on the 
        previous year's experience of the plan or, in the case of a new 
        plan, the previous year's experience of a comparable plan with 
        participants and beneficiaries of similar demographics.
            ``(5) Reliance.--To the extent any of the information 
        required to be disclosed by a service provider under this 
        subsection is given to the service provider by an unaffiliated 
        person which is regulated by the Federal Government or a State, 
        the service provider may rely on the completeness and accuracy 
        of such information unless the service provider--
                    ``(A) knows that the information is inaccurate or 
                incomplete,
                    ``(B) has reason to know that the information is 
                inaccurate or incomplete, or
                    ``(C) has notice of facts or information that would 
                prompt a reasonable service provider to inquire into 
                the accuracy or completeness of the information.
            ``(6) Disclosure of financial relationships.--
                    ``(A) In general.--The statement required under 
                paragraph (1) shall include a written disclosure of--
                            ``(i) any payment provided (or the amount 
                        representing the value of any services 
                        provided) to the service provider (or any 
                        affiliate thereof) pursuant to, or in 
                        connection with, the contract described in 
                        paragraph (1) and the amount and type of any 
                        payment made or credit received for such 
                        services (irrespective of whether the service 
                        provider (or affiliate thereof) or other person 
                        providing such services is affiliated or 
                        unaffiliated with the plan, the plan sponsor, 
                        the plan administrator, or any other plan 
                        official),
                            ``(ii) any personal, business, or financial 
                        relationship with the plan sponsor, the plan, 
                        or the service provider (or any affiliate of 
                        the service provider) or any totality of such 
                        relationships which is material, if such 
                        relationship results in the service provider 
                        (or any affiliate thereof) deriving any 
                        material benefit, and
                            ``(iii) such other similar arrangements 
                        benefitting the service provider (or any 
                        affiliate thereof) as may be specified by the 
                        Secretary.
                    ``(B) Inclusions.--
                            ``(i) In general.--Disclosures described 
                        under subparagraph (A)(ii) shall include the 
                        extent to which the service provider (or any 
                        affiliate thereof) may benefit from the 
                        offering of its own proprietary investment 
                        products or those of third parties.
                            ``(ii) Applicable prohibited transaction 
                        exemption.--Disclosures under this paragraph 
                        may include a description of any applicable 
                        prohibited transaction exemption under section 
                        408 related to the services described in the 
                        statement required under paragraph (1).
            ``(7) Disclosure of impact of share classes.--The statement 
        required under paragraph (1) shall, to the extent applicable, 
        disclose that the share prices of certain mutual fund 
        investments that are available to the plan may be different 
        from the share prices outside of the plan due to the existence 
        of different share classes and provide the basis for these 
        differences.
            ``(8) Disclosure of certain arrangements in connection with 
        free or discounted services or reimbursements by service 
        providers.--In any case in which services are provided to the 
        plan, or to the plan sponsor in connection with the plan, by 
        any service provider without explicit charge or for charges set 
        at a discounted rate or subject to rebate, the statement 
        required under paragraph (1) shall specify the manner in which, 
        the extent to which, and the amount by which consideration is 
        otherwise obtained by the service provider (or any affiliate 
        thereof), the plan, or the plan sponsor for such services, 
        directly or indirectly, by means of any charges against the 
        account of the participant or beneficiary.
            ``(9) Model statement.--The Secretary shall prescribe a 
        model statement that may be used for purposes of satisfying the 
        requirements of this subsection.
            ``(10) Updating.--Each contract described in paragraph (1) 
        shall require that the service provider must provide to the 
        plan administrator an updated written statement described in 
        paragraph (1) describing any material change in the information 
        included in the statement provided pursuant to paragraph (1) as 
        soon as is reasonable after the occurrence of the change is 
        known. The contract shall provide that such an updated written 
        statement, or, in the case of a plan year in which no material 
        change in the information included in the statement provided 
        pursuant to paragraph (1) has occurred, a written statement 
        setting forth such fact, must be provided not less often than 
        annually.
            ``(11) Limitations.--
                    ``(A) Dollar limitation.--
                            ``(i) In general.--The requirements of this 
                        subsection shall apply with respect to any 
                        contract for services provided during any plan 
                        year only if the total charged for such 
                        services under such contract (regardless of 
                        whether, in connection with such services under 
                        such contract, such charges are received by the 
                        service provider (or any affiliate thereof) 
                        directly or are received by the service 
                        provider (or any affiliate thereof) indirectly 
                        from other affiliated or unaffiliated parties) 
                        equals or exceeds $5,000.
                            ``(ii) Cost of living adjustment.--
                                    ``(I) In general.--In the case of 
                                any plan year beginning during a 
                                calendar year beginning after 2010, the 
                                dollar amount in clause (i) shall be 
                                increased by an amount equal to such 
                                dollar amount, multiplied by the 
                                percentage (if any) by which the 
                                average of the Consumer Price Index for 
                                all urban consumers (United States city 
                                average) for the 12-month period ending 
                                with September of the preceding 
                                calendar year exceeds such average for 
                                the 12-month period ending with 
                                September 2009.
                                    ``(II) Rounding.--If any dollar 
                                amount after being increased under 
                                subclause (I) is not a multiple of 
                                $500, such dollar amount shall be 
                                rounded to the next lower multiple of 
                                $500.
                            ``(iii) Adjustments by the secretary.--The 
                        Secretary may by regulation adjust the dollar 
                        amount specified in this subparagraph to a 
                        lesser amount for small plans and to a greater 
                        amount for other plans and provide for 
                        appropriate annual adjustments in such adjusted 
                        amounts at the same rate as would apply under 
                        clause (ii).
                    ``(B) General applicability of requirements with 
                respect to services.--Nothing in this subsection shall 
                be construed to require any service provider to provide 
                any service with respect to any particular plan 
                sponsor.
            ``(12) Coordination with fiduciary rules.--Nothing in this 
        subsection affects the obligations of plan sponsors and 
        fiduciaries under part 4 of this subtitle.
    ``(b) Disclosures to Participants and Beneficiaries.--
            ``(1) Advance notice of available investment options.--The 
        plan administrator of an individual account plan which permits 
        a participant or beneficiary to exercise control over the 
        assets in the account of the participant or beneficiary shall 
        provide to the participant or beneficiary with respect to each 
        plan year notice of the investment options available for 
        election under the plan at least 10 business days prior to--
                    ``(A) the earliest date provided for under the plan 
                for the participant's initial investment of any 
                contribution made on behalf of such participant, and
                    ``(B) the effective date of any material change in 
                investment options.
        In the case of a plan that provides for immediate eligibility 
        or that contains an automatic contribution arrangement (as 
        defined in subparagraphs (A) and (B) of section 514(e)(2)), the 
        notice required under subparagraph (A) may be provided within 
        any reasonable period prior to such initial investment. With 
        respect to the notice required under this paragraph, the 
        Secretary shall prescribe regulations creating exceptions to 
        the 10-day notice requirement in circumstances similar to those 
        described in section 101(i)(2)(C), and such notice may be 
        combined with any similar notice that may be required under 
        section 404(c)(5) or under this section.
            ``(2) Information included in notice.--The notice required 
        under paragraph (1) shall--
                    ``(A) include a prominent statement, in language 
                presented in a manner which is easily understandable by 
                the typical participant, indicating which components of 
                the charges (both direct and indirect) for each 
                investment option are payable by the participant or 
                beneficiary and how such components are to be paid,
                    ``(B) set forth, with respect to each available 
                investment option--
                            ``(i) the name of the option,
                            ``(ii) the investment objectives and 
                        principal investment strategies of the option,
                            ``(iii) the risk level associated with the 
                        option,
                            ``(iv) whether the option is diversified 
                        among various classes of assets so as to 
                        minimize the risk of large losses or should be 
                        combined with other options so as to obtain 
                        such diversification,
                            ``(v) whether the investment option is 
                        actively managed or passively managed in 
                        relation to an index and the difference between 
                        active management and passive management,
                            ``(vi) where, and the manner in which, 
                        additional plan-specific, option-specific, and 
                        generally available investment information 
                        regarding the option may be obtained, and
                            ``(vii) a statement explaining that 
                        investment options should not be evaluated 
                        solely on the basis of the charges for each 
                        option but should also be based on careful 
                        consideration of other key factors, including 
                        the risk level of the option, the investment 
                        objectives of the option, the principal 
                        investment strategies of the option, and 
                        historical returns derived by the option, and
                    ``(C) include a plan fee comparison chart, relating 
                to the charges described in paragraph (3) in connection 
                with all investment options available under the plan, 
                as provided in paragraph (3).
            ``(3) Plan fee comparison chart.--
                    ``(A) In general.--
                            ``(i) In general.--The notice provided 
                        under this subsection shall include a plan fee 
                        comparison chart consisting of a comparison of 
                        actual service and investment charges 
                        (including, for purposes of this clause, 
                        charges for the offering of an investment 
                        option) that will or could be assessed against 
                        the account of the participant or beneficiary 
                        with respect to the plan year. The plan fee 
                        comparison chart shall be presented in a manner 
                        which is easily understood by the typical 
                        participant and include such information as the 
                        Secretary determines necessary to permit 
                        participants and beneficiaries to assess the 
                        services for which charges will or could be 
                        assessed against the account.
                            ``(ii) Form.--For purposes of this 
                        paragraph, the potential service charges shall 
                        be provided in the form of a dollar amount and 
                        may also be provided, in addition, as a 
                        percentage of assets. The form of the potential 
                        service charges shall be presented in a manner 
                        which is easily understandable by the typical 
                        participant, including examples that 
                        demonstrate how the charges will be assessed 
                        against the account of the participant or 
                        beneficiary.
                    ``(B) Categorization of charges.--The plan fee 
                comparison chart shall provide information in relation 
                to 4 categories of charges that will or could be 
                assessed against the account of the participant or 
                beneficiary, as follows:
                            ``(i) Asset-based charges specific to 
                        investment.--Charges that vary depending on the 
                        investment options selected by the participant 
                        or beneficiary, including expense ratios and 
                        investment-specific asset-based charges. The 
                        information relating to such charges shall 
                        include a statement noting any charges for 1 or 
                        more investment options which pay for services 
                        other than investment management.
                            ``(ii) Asset-based charges not specific to 
                        investment.--Charges that are assessed as a 
                        percentage of the total assets in the account 
                        of the participant or beneficiary, regardless 
                        of the investment option selected.
                            ``(iii) Administrative and transaction-
                        based charges.--Administration and transaction-
                        based charges, including fees charged to 
                        participants to cover plan administration, 
                        compliance, and recordkeeping costs, plan loan 
                        origination fees, possible redemption fees, and 
                        possible surrender charges, that are not 
                        assessed as a percentage of the total assets in 
                        the account and are either automatically 
                        deducted each year or result from certain 
                        transactions engaged in by the participant or 
                        beneficiary.
                            ``(iv) Other charges.--Any other charges 
                        which may be deducted from participants' or 
                        beneficiaries' accounts and which are not 
                        described in clauses (i), (ii), and (iii).
                    ``(C) Description of purpose for charges.--The 
                notice shall indicate the extent to which each charge 
                is for investment management, transactions, plan 
                administration and recordkeeping, or other identified 
                services.
                    ``(D) Fees and historical returns.--In connection 
                with each investment option listed in the plan fee 
                comparison chart, the chart shall include the amounts 
                of the fees assessed in connection with such option and 
                a history of the returns derived net of fees and 
                expenses. Any such history shall be for the previous 
                year, 5 years, and 10 years (or since inception if 
                later).
            ``(4) Model notice.--The Secretary shall prescribe a model 
        notice that may be used for purposes of satisfying the 
        requirements of this subsection, including a model plan fee 
        comparison chart.
            ``(5) Estimations.--For purposes of providing the notice 
        required under this subsection, the plan administrator may 
        provide a reasonable and representative estimate for any 
        charges or percentages disclosed under paragraph (2) or (3) and 
        shall indicate any such estimate as being such an estimate. Any 
        such estimate shall be based on the previous year's experience 
        or, in the case of a new plan, the previous year's experience 
        of a comparable plan with participants and beneficiaries of 
        similar demographics.
    ``(c) Electronic Media.--Any disclosure required under this section 
may be provided through an electronic medium under rules prescribed by 
the Secretary. Such rules shall be similar to those applicable under 
the Internal Revenue Code of 1986 with respect to notices to 
participants in pension plans. The Secretary shall have the authority 
to modify such rules as appropriate to take into account new 
developments, including new forms of electronic media. The rules 
prescribed by the Secretary pursuant to this subsection shall provide 
for a method for the typical participant or beneficiary to obtain 
without undue burden any such disclosure in writing on paper in lieu of 
receipt through an electronic medium.
    ``(d) Regulations Regarding Certain Products.--The Secretary shall 
prescribe regulations identifying (and establishing separate rules, if 
necessary, to identify) any investment options that provide a 
guaranteed rate of return and that do not identify specific fees.
    ``(e) Definitions.--For purposes of this section--
            ``(1) Charge.--The term `charge' means, in connection with 
        any service provided to a plan or any financial product 
        provided to the plan in which plan assets are to be invested, 
        any fee, credit, or other compensation charged or paid for such 
        service or product, including money and any other thing of 
        monetary value to be received by the provider of the service or 
        product, or its affiliate, in connection with the service or 
        product.
            ``(2) Service.--The term `service' means, in connection 
        with a plan, a service provided directly or indirectly to, or 
        with respect to, the plan or a service provided directly or 
        indirectly in connection with a financial product in which plan 
        assets are to be invested.
            ``(3) Contract.--The term `contract' means, in connection 
        with any 2 or more parties, any contract or arrangement entered 
        into between or among such parties, and any extension or 
        renewal thereof.
            ``(4) Service provider.--The terms `service provider' and 
        `provider' mean, in connection with a service, a person 
        directly or indirectly providing such service.
            ``(5) Regulations.--The Secretary shall provide by 
        regulation definitions of other terms used in this section.''.
    (b) Quarterly Benefit Statements.--Section 105 of such Act (29 
U.S.C. 1025) is amended--
            (1) in subsection (a)(2)--
                    (A) by redesignating subparagraph (C) as 
                subparagraph (H);
                    (B) in subparagraph (B)(ii)--
                            (i) in subclause (II), by striking 
                        ``diversified, and'' and inserting 
                        ``diversified,'';
                            (ii) in subclause (III), by striking the 
                        period and inserting ``, and''; and
                            (iii) by adding after subclause (III) the 
                        following new subclause:
                            ``(IV) with respect to the portion of a 
                        participant's account for which the participant 
                        has the right to direct the investment of 
                        assets, the information described in 
                        subparagraph (C).''; and
                    (C) by inserting after subparagraph (B) the 
                following new subparagraphs:
                    ``(C) Periodic account information for participants 
                and beneficiaries.--For purposes of subparagraph 
                (B)(ii)(IV), the information described in this 
                subparagraph consists of the following, indicating the 
                portion of each amount described in clauses (i) though 
                (vii) attributable to each investment option elected in 
                connection with the participant's account:
                            ``(i) the starting balance of the 
                        participant's account,
                            ``(ii) contributions made during the 
                        quarter, itemizing separately totals for 
                        employer and totals for employee contributions,
                            ``(iii) investment earnings or losses on 
                        the account balance during the quarter (if 
                        any),
                            ``(iv) actual or estimated charges (within 
                        the meaning of section 111(e)(1)) which reduce 
                        the account during the quarter, expressed in 
                        dollars or, if estimated, such estimated dollar 
                        charges as derived from an expense ratio (which 
                        may be expressed as a specific date estimate 
                        based on the previous year's expense ratio),
                            ``(v) any other charges to the participant 
                        or beneficiary in connection with the 
                        participant's account,
                            ``(vi) the ending balance of the account,
                            ``(vii) the participant's asset allocation 
                        to each investment option, including the net 
                        return, expressed as an amount and as a 
                        percentage, and
                            ``(viii) how to obtain the most recently 
                        updated version of the plan fee comparison 
                        chart prepared for purposes of section 
                        111(b)(3).
                    ``(D) Other information.--The plan administrator 
                may include in the quarterly pension benefit statement 
                information relating to the historical return and risk 
                of each investment option and the estimated amount that 
                the participant needs to contribute each month or year 
                so as to retire at retirement age (as defined in 
                section 216(l) of the Social Security Act).
                    ``(E) Estimations.--For purposes of making the 
                disclosure of actual charges or percentages as required 
                under this paragraph, the plan administrator may 
                provide a reasonable and representative estimate of 
                such charges or percentages and shall indicate any such 
                estimate as being such an estimate. Any such estimate 
                shall be based on the previous year's experience.
                    ``(F) Model statement.--The Secretary shall 
                prescribe a model pension benefit statement that may be 
                used for purposes of satisfying the requirements of 
                this subparagraph and subparagraph (B)(ii).
                    ``(G) Annual compliance for small plans and with 
                respect to certain information.--In the case of a plan 
                providing for investment as described in paragraph 
                (1)(A)(i)--
                            ``(i) if the plan has 100 or fewer 
                        participants and beneficiaries, the plan may 
                        provide the pension benefit statement under 
                        paragraph (1) on an annual rather than a 
                        quarterly basis, and
                            ``(ii) the plan may comply with the 
                        requirements of subparagraph (B)(ii)(IV) on an 
                        annual rather than a quarterly basis.''; and
            (2) by adding at the end the following new subsections:
    ``(d) Assistance to Small Employers.--The Secretary shall make 
available to employers with 100 or fewer employees--
            ``(1) educational and compliance materials designed to 
        assist such employers in selecting and monitoring service 
        providers for individual account plans which permit a 
        participant or beneficiary to exercise control over the assets 
        in the account of the participant or beneficiary, investment 
        options under such plans, and charges relating to such options, 
        and
            ``(2) services designed to assist such employers in finding 
        and understanding affordable investment options for such plans 
        and in comparing the investment performance of, and charges 
        for, such options on an ongoing basis against appropriate 
        benchmarks or other appropriate measures.
    ``(e) Assistance to Plan Sponsors and Plan Participants and 
Beneficiaries.--The Secretary shall provide assistance to plan sponsors 
of individual account plans and participants and beneficiaries under 
such plans with any questions or problems regarding compliance with the 
requirements of this section.
    ``(f) Electronic Media.--Any disclosure required under this section 
may be provided through an electronic medium under rules prescribed by 
the Secretary. Such rules shall be similar to those applicable under 
the Internal Revenue Code of 1986 with respect to notices to 
participants in pension plans. The Secretary shall have the authority 
to modify such rules as appropriate to take into account new 
developments, including new forms of electronic media. The rules 
prescribed by the Secretary pursuant to this subsection shall provide 
for a method for the typical participant or beneficiary to obtain 
without undue burden any such disclosure in writing on paper in lieu of 
receipt through an electronic medium.''.
    (c) Enforcement.--Section 502(c)(7) of such Act (29 U.S.C. 
1132(c)(7)) is amended--
            (1) by inserting ``(A)'' after ``(7)''; and
            (2) by adding at the end the following new subparagraph:
    ``(B)(i) In the case of any violation of section 111(a) by a 
service provider (as defined in section 111(e)(4)) with respect to one 
or more participants and beneficiaries, the service provider shall be 
assessed by the Secretary a civil penalty of up to $1,000 a day with 
respect to each such participant or beneficiary from the date of the 
initial violation until the date on which such violation is corrected, 
subject to a total maximum penalty of 10 percent of the amount 
involved.
    ``(ii) Any plan administrator or other person who is a service 
provider with respect to the plan who fails or refuses to provide a 
statement to participants and beneficiaries in accordance with section 
105(a)(2)(B)(ii) or 111(b) shall be assessed by the Secretary a civil 
penalty of up to $100 a day from the date of the failure or refusal to 
the date on which such statement or notice is so provided.
    ``(iii) For purposes of this subparagraph, each violation with 
respect to any single participant, beneficiary, or plan administrator 
shall be treated as a separate violation. The Secretary may compromise, 
modify, or remit any civil penalty imposed on any person under this 
subparagraph if the Secretary determines--
            ``(I) that the person acted reasonably and in good faith or 
        that severe financial hardship would otherwise occur to the 
        plan sponsor, and
            ``(II) that such compromise, modification, or remission is 
        in the interests of participants and beneficiaries.''.
    (d) Conforming Amendment.--The table of contents in section 1 of 
such Act, as amended by section 2, is amended by striking the item 
relating to section 111 and inserting the following new items:

``Sec. 111. Special reporting and disclosure rules for individual 
                            account plans.
``Sec. 112. Repeal and effective date.''.
    (e) Effective Date.--The amendments made by this section shall 
apply to contracts for services entered into in plan years beginning 
after one year after the date of the enactment of this Act.

SEC. 3. MINIMUM INVESTMENT OPTION REQUIREMENT FOR INDIVIDUAL ACCOUNT 
              PLANS.

    (a) In General.--Section 404(c) of the Employee Retirement Income 
Security Act of 1974 (29 U.S.C. 1104(c)) is amended by adding at the 
end the following new paragraph:
            ``(6) Minimum investment option requirement for individual 
        account plans.--Paragraph (1)(A)(ii) shall not apply in 
        connection with any individual account plan which permits a 
        participant or beneficiary to exercise control over the assets 
        in the account of the participant or beneficiary unless the 
        plan includes at least one investment option--
                    ``(A) which is an unmanaged or passively managed 
                mutual fund with a portfolio of securities designed to 
                substantially match the performance of the entire 
                United States equity market or the entire United States 
                bond market, or a combination thereof,
                    ``(B) which offers a combination of historical 
                returns, risk, and charges (within the meaning of 
                section 111(e)(1)) that is likely to meet retirement 
                income needs at adequate levels of contribution, and
                    ``(C) which is described in the terms of the plan 
                as offered without any endorsement of the Government or 
                the plan sponsor.''.
    (b) Conforming Amendment.--Section 404(c)(1)(A)(ii) of such Act (29 
U.S.C. 1104(c)(1)(A)(ii)) is amended by inserting ``except as provided 
in section 404(c)(6) and'' after ``exercise of control,''.
    (c) Effective Date.--The amendments made by this section shall 
apply with respect to plan years beginning after one year after the 
date of the enactment of this Act.

SEC. 4. ENFORCEMENT COORDINATION AND REVIEW BY THE DEPARTMENT OF LABOR.

    (a) In General.--Section 502 of the Employee Retirement Income 
Security Act of 1974 (29 U.S.C. 1132) is amended by adding at the end 
the following new subsection:
    ``(n) Enforcement Coordination of Certain Disclosure Requirements 
and Review by the Department of Labor.--
            ``(1) In general.--
                    ``(A) Notification and action.--The Secretary shall 
                notify the applicable regulatory authority in any case 
                in which the Secretary determines that a service 
                provider is engaged in a pattern or practice that 
                precludes compliance by plan administrators with 
                section 111. The Secretary shall, in consultation with 
                the applicable authority, take such timely enforcement 
                action under this title as is necessary to assure that 
                such pattern or practice ceases and desists and assess 
                any appropriate penalties.
                    ``(B) Dissemination.--The Secretary shall widely 
                disseminate to employee pension benefit plans covered 
                by this title and their participants and beneficiaries 
                the identity of any service providers with respect to 
                such plans found to be engaged in any pattern or 
                practice described in subparagraph (A) with the intent 
                to preclude compliance by plan administrators with 
                section 111 and the particulars of such pattern or 
                practice. Prior to the dissemination of the identity of 
                any service providers identified and determined by the 
                Secretary to be engaged in such a pattern or practice, 
                such service provider shall receive a notice of intent 
                to disseminate, an opportunity to request an 
                administrative hearing, and a timely appeal to the 
                Secretary.
            ``(2) Annual audit of representative sampling of individual 
        account plans.--The Secretary shall annually audit a 
        representative sampling of individual account plans covered by 
        this title to determine compliance with the requirements of 
        section 111. The Secretary shall annually report the results of 
        such audit and any related recommendations of the Secretary to 
        the Committee on Education and Labor of the House of 
        Representatives and the Committee on Health, Education, Labor, 
        and Pensions of the Senate.''.
    (b) Review and Report to the Congress by Secretary of Labor 
Relating to Reporting and Disclosure Requirements.--
            (1) Study.--As soon as practicable after the date of the 
        enactment of this Act, the Secretary of Labor shall review the 
        reporting and disclosure requirements of part 1 of subtitle B 
        of title I of the Employee Retirement Income Security Act of 
        1974 and related provisions of the Pension Protection Act of 
        2006.
            (2) Report.--Not later than 18 months after the date of the 
        enactment of this Act, the Secretary of Labor, in consultation 
        with the Secretary of the Treasury, shall make such 
        recommendations as the Secretary of Labor considers appropriate 
        to the appropriate committees of the Congress to consolidate, 
        simplify, standardize, and improve the applicable reporting and 
        disclosure requirements so as to simplify reporting for 
        employee pension benefit plans and ensure that needed 
        understandable information is provided to participants and 
        beneficiaries of such plans.
                                 <all>