1.Short title and table of
contents
(a)This Act may be cited
as the 401(k) Fair Disclosure and
Pension Security Act of 2009
.
(b)The table of contents for this Act is as follows:
Sec. 1. Short title and table of
contents.
Title I—401(k)
Fair Disclosure for Retirement
Sec. 101. Special reporting and disclosure
rules for individual account plans.
Sec. 102. Minimum investment option requirement
for individual account plans.
Sec. 103. Enforcement coordination and review
by the Department of Labor.
Title II—Prohibition of Conflicted Investment
Advice
Sec. 201. Findings.
Sec. 202. Independent investment advisers for
individual account plans.
Sec. 203. Expansion of outreach to promote
retirement income savings to include promotion of education on financial
literacy with respect to investment for retirement.
Title III—Transitional Funding Relief for
Defined Benefit Plans
Sec. 301. Election to use yield
curve.
Sec. 302. Effective date of
regulations.
Sec. 303. Clarification of treatment of
expenses.
Sec. 304. Information reporting.
Sec. 305. 5-year extension of automatic
amortization extension period for multiemployer plans.
Sec. 306. Pension plan maintained by Christian
Schools International treated as church plan.
Sec. 307. Special rule for determining adequate
consideration in connection with the purchase and sale of qualifying employer
securities.
Sec. 308. Extended period for single-employer
defined benefit plans to amortize the shortfall amortization base for 2009 and
2010.
<enum>I</enum><header>401(<enum-in-header>k</enum-in-header>)
Fair Disclosure for Retirement</header>
<section id="H8212C759473F445983B0728D92D49965"><enum>101.</enum><header>Special reporting and
disclosure rules for individual account plans</header>
<subsection id="H1DC59FD84515473193CBB9319F2E7AED"><enum>(a)</enum><header>Additional reporting
and disclosure rules</header><text>Part 1 of subtitle B of title I of the
Employee Retirement Income Security Act of 1974 is amended—</text>
<paragraph id="HE19C070088BC4740864812A4F4466BA4"><enum>(1)</enum><text>by redesignating section
111 (29 U.S.C. 1031) as section 112; and</text>
</paragraph><paragraph id="HF757F29E071A497295EDB5AA0D99CCBE"><enum>(2)</enum><text>by inserting after
section 110 (29 U.S.C. 1030) the following new section:</text>
<quoted-block changed="added" committee-id="HED00" display-inline="no-display-inline" id="H34A95EA382404A04B31C297E490C3B27" reported-display-style="italic" style="OLC">
<section id="H0E1C9F2F55C641D7A3994563DDE0DE31"><enum>111.</enum><header>Special reporting and
disclosure rules for individual account plans</header>
<subsection display-inline="no-display-inline" id="H3E25DE61F1CC4936AFCFF691448880A4"><enum>(a)</enum><header>Disclosure to employers
sponsoring individual account plans regarding services necessary for
establishment or operation of plans</header>
<paragraph commented="no" display-inline="no-display-inline" id="H0C341E6993E24AAE865FF9DB0540569F"><enum>(1)</enum><header>Service disclosure
statement</header><text display-inline="yes-display-inline">The plan
administrator of an individual account plan (or any other plan official with
contracting authority under the terms of the plan) may not enter into a
contract or arrangement 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, reasonably in advance of
entering into the contract or arrangement, a single written statement from the
service provider which—</text>
<subparagraph display-inline="no-display-inline" id="H53D8D92C158D4D0E9E5AF8795F4654E7"><enum>(A)</enum><text>specifies such services
for the plan that will be provided in connection with the contract or
arrangement, and</text>
</subparagraph><subparagraph id="HAD9C02D457DC4BC1B4404CF644C0A08A"><enum>(B)</enum><text>provides the expected
total annual charges for such services for the plan that will be provided in
connection with the contract or arrangement, 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).</text>
</subparagraph><continuation-text continuation-text-level="paragraph">The
description of the services and specification of 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.</continuation-text></paragraph><paragraph id="HAC9CA8A824B64DA5AD3464398686F226"><enum>(2)</enum><header>Minimum allocation
requirements</header><text>The allocation required under paragraph (1)(B) in
connection with the services provided under each contract or arrangement shall
specify component charges (to the extent such services for the plan are
provided under the contract or arrangement) as follows:</text>
<subparagraph commented="no" id="HD389A90DD77744598225A4CA5AA3F21D"><enum>(A)</enum><text>charges for
administration and recordkeeping,</text>
</subparagraph><subparagraph commented="no" id="HB035A474CC6D40079BDD752E4E023290"><enum>(B)</enum><text>transaction based
charges,</text>
</subparagraph><subparagraph commented="no" id="HCE35A869C49A49238D78AA759DFB6E87"><enum>(C)</enum><text>charges for investment
management, and</text>
</subparagraph><subparagraph id="H74848A1761C8403483BA1D1D5C53DB08"><enum>(D)</enum><text>all such charges not
described in subparagraph (A), (B), or (C).</text>
</subparagraph><continuation-text continuation-text-level="paragraph">The
Secretary may by regulation provide for the appropriate allocation of component
charges among the categories of charges provided in subparagraphs (A), (B),
(C), and (D).</continuation-text></paragraph><paragraph display-inline="no-display-inline" id="H32587D197CAD43FAA50DDDB286E7EF38"><enum>(3)</enum><header>Presentation of
charges</header><text display-inline="yes-display-inline">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.</text>
</paragraph><paragraph id="H54876B4834984E70BA5D03062A030FA8"><enum>(4)</enum><header>Estimations</header><text display-inline="yes-display-inline">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 specified under paragraph (1)(B) and shall indicate any such
estimate as being such an estimate. Any such estimate shall be based on
reasonable assumptions specified in the statement (which shall include the
previous year’s experience of the plan or, in the case of a new plan, a
reasonable estimate, taking into account the plan’s participants and
beneficiaries).</text>
</paragraph><paragraph id="H1B04E5D1439C435C81AFD8D03AFF02CB"><enum>(5)</enum><header>Disclosure of financial
relationships</header>
<subparagraph commented="no" id="H0428C9329632452E998693CD558D89A0"><enum>(A)</enum><header>In
general</header><text>The statement required under paragraph (1) shall include
a written disclosure of—</text>
<clause commented="no" id="H6DDE61E42CEB44BEAA3927805E39DCE8"><enum>(i)</enum><text>any payment to be
provided (or the amount representing the value of any services to be provided)
to the service provider (or any affiliate thereof) from any entity other than
the plan or the accounts of participants or beneficiaries pursuant to, or in
connection with, the contract or arrangement described in paragraph (1) and the
amount and type of any payment to be made or credit to be 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),
and</text>
</clause><clause commented="no" id="H007202860502485CADFE8FF8E974AB38"><enum>(ii)</enum><text>such other similar
arrangements benefitting the service provider (or any affiliate thereof) as may
be specified by the Secretary.</text>
</clause><continuation-text continuation-text-level="subparagraph">In
any case in which the contract or arrangement described in paragraph (1)
provides for the payments described in clause (i) in terms of a formula, the
requirements of such clause may be met by specifying the formula to be used in
connection with such payments and describing the application of such
formula.</continuation-text></subparagraph><subparagraph commented="no" id="HAEAD22310FCF4E7A8490F4E430D0C0C2"><enum>(B)</enum><header>Inclusions</header>
<clause id="H64D29EF2E2D14DF3B99E9F3DAC874A69"><enum>(i)</enum><header>In
general</header><text>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, including (but not limited to) cross-selling of affiliated
products or services to the plan sponsor or participants.</text>
</clause><clause id="H725BDCD5A5414BECB49D0D81F17177CB"><enum>(ii)</enum><header>Applicable prohibited
transaction exemption</header><text>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).</text>
</clause></subparagraph></paragraph><paragraph id="H296942F568BF4CAD9693D01B8161E4B6"><enum>(6)</enum><header>Disclosure of impact of
share classes</header><text>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.</text>
</paragraph><paragraph commented="no" id="HB900DC93AB1E4FD2AD7CECD11C563161"><enum>(7)</enum><header>Disclosure of certain
arrangements in connection with free or discounted services or reimbursements
by service providers</header><text>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 plan.</text>
</paragraph><paragraph commented="no" id="H522D7907635045B598AA14E32B0EF426"><enum>(8)</enum><header>Review by the
Secretary</header><text>The Secretary shall, from time to time as determined
appropriate by the Secretary, review the accuracy and sufficiency of statements
provided pursuant to this subsection.</text>
</paragraph><paragraph id="H2DF8180BC4C64A8095963A6EBAD2E0BA"><enum>(9)</enum><header>Updating</header><text>Each
service provider shall 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. 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, shall
be provided by the service provider not less often than annually.</text>
</paragraph><paragraph commented="no" id="HB0C3F02B536B47938F5FED805F4C205A"><enum>(10)</enum><header>Limitations</header>
<subparagraph commented="no" id="HB54FAA48A24940BAB178029C1FA9D217"><enum>(A)</enum><header>Dollar
limitation</header>
<clause commented="no" id="H3CAA0D9FB1F345A294AFDE6AA78FA9FA"><enum>(i)</enum><header>In
general</header><text display-inline="yes-display-inline">The requirements of
this subsection shall apply with respect to any contract or arrangement for
services provided during any plan year only if the total charged for such
services under such contract or arrangement is reasonably expected to equal or
exceed $5,000.</text>
</clause><clause commented="no" id="HF8D443E2022148FDBD21040DEEA54682"><enum>(ii)</enum><header>Adjustments by the
Secretary</header><text>The Secretary may be 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</text>
</clause></subparagraph><subparagraph id="HD16BC5E3CF4A458BB4DCDD5764CFC79D"><enum>(B)</enum><header>General applicability
of requirements with respect to services</header><text display-inline="yes-display-inline">Nothing in this subsection shall be
construed to require any service provider to provide any service with respect
to any particular plan sponsor.</text>
</subparagraph></paragraph><paragraph id="H2F35D172B6E04D2D8C31924A74CDD2FA"><enum>(11)</enum><header>Satisfaction of
fiduciary rules</header><text>Nothing in the preceding provisions of this
subsection affects the obligations of fiduciaries under part 4 of this
subtitle.</text>
</paragraph></subsection><subsection id="H871C24CC9E28405A93FF6CC96B744C8C"><enum>(b)</enum><header>Disclosures to
participants and beneficiaries</header>
<paragraph commented="no" display-inline="no-display-inline" id="HCDCBF1CF8E7C460B9B1B8FA1BD19DA4E"><enum>(1)</enum><header>Advance notice of
available investment options</header><text>The plan administrator of an
individual account plan that permits participants or beneficiaries to direct
the investment of assets in their individual accounts shall provide to the
participant or beneficiary notice of the investment options available for
election under the plan before a reasonable period prior to—</text>
<subparagraph commented="no" id="H70CC0A40A85342A28DBED1AF9A111E9A"><enum>(A)</enum><text>the earliest date
provided for under the plan for the participant’s initial investment of any
contribution made on behalf of such participant, and</text>
</subparagraph><subparagraph commented="no" id="H0971D7A050434B43A218FC85A85A8DF1"><enum>(B)</enum><text>the effective date of any
material change in investment options.</text>
</subparagraph><continuation-text continuation-text-level="paragraph">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
any notice required under this paragraph, the Secretary shall prescribe
regulations creating specific requirements for periods of advance notice to be
treated as reasonable under this paragraph (of not less than 10 days) 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.</continuation-text></paragraph><paragraph id="HF8A65E3F7DF84B95BB9D93035A7C110E"><enum>(2)</enum><header>Information included in
notice</header><text>The notice required under paragraph (1) shall—</text>
<subparagraph id="HAA80966E6A6D456C98AD9481A694BA05"><enum>(A)</enum><text display-inline="yes-display-inline">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,</text>
</subparagraph><subparagraph id="H3EAE3F2421CB41FDB3D367137D17EAB0"><enum>(B)</enum><text>set forth, with respect
to each available investment option—</text>
<clause id="HC8AAB11A00CB4058AB993D6408E57EA8"><enum>(i)</enum><text>the name of the
option,</text>
</clause><clause commented="no" id="HDF68B6FB769F4576864537989258B1F6"><enum>(ii)</enum><text>information effectively
describing the investment objectives of the option (such as a description of a
broadly recognized asset class),</text>
</clause><clause id="H3F38A6EFABDB4ECEAB71E344ABAC3F2E"><enum>(iii)</enum><text>the risk level
associated with the option,</text>
</clause><clause commented="no" id="HB4C4EB18E90C4ED8BAE26A05FAA68D52"><enum>(iv)</enum><text>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,</text>
</clause><clause id="H180EC17CCA834DD59F42BB330BEBF2D0"><enum>(v)</enum><text>whether the investment
option is actively managed or passively managed in relation to an index and the
difference between active management and passive management,</text>
</clause><clause id="H304CBAF691F04C96910B8FA7003E8916"><enum>(vi)</enum><text>where, and the manner in
which, additional plan-specific, option-specific, and generally available
investment information regarding the option may be obtained, and</text>
</clause><clause id="H3FAF0EDCB40B4724B444DE4A9D6D9E17"><enum>(vii)</enum><text>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 of the option, and</text>
</clause></subparagraph><subparagraph id="H573C775B1B0C496A82ED6BE03C769143"><enum>(C)</enum><text>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).</text>
</subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="H6717F598BFEF4AE0BA8DD603C1E08380"><enum>(3)</enum><header>Plan fee comparison
chart</header>
<subparagraph commented="no" id="H09753978885E4F798700351147577FF4"><enum>(A)</enum><header>In general</header>
<clause commented="no" id="HBF5061C0DDF64E5390DB3229B21325D6"><enum>(i)</enum><header>In
general</header><text>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.</text>
</clause><clause id="HC29D2019E14747ECB344DC630D5E55D4"><enum>(ii)</enum><header>Form</header><text>For
purposes of this paragraph, the potential service charges shall be provided in
the form of a dollar amount or as a formula (such as a percentage of assets),
as appropriate. 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.</text>
</clause></subparagraph><subparagraph commented="no" id="H0D4CE2187F4A4457B3AB3D10F5DF5DDE"><enum>(B)</enum><header>Categorization of
charges</header><text>The plan fee comparison chart shall provide information
in relation to the following categories of charges that will or could be
assessed against the account of the participant or beneficiary:</text>
<clause commented="no" id="HCE4688AB4A364350A06843E5AAB91208"><enum>(i)</enum><header>Asset-based charges
specific to investment</header><text display-inline="yes-display-inline">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.</text>
</clause><clause commented="no" id="H078FB2A083BB4639B819BEBD46FC46B1"><enum>(ii)</enum><header>Asset-based charges
not specific to investment</header><text>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.</text>
</clause><clause commented="no" id="HDF75770D201D47BC9300A2FB100B31BE"><enum>(iii)</enum><header>Administrative and
transaction-based charges</header><text>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.</text>
</clause><clause commented="no" id="HB91F849DF09F4669B301BD3CAA211F3C"><enum>(iv)</enum><header>Other
charges</header><text>Any other charges which may be deducted from
participants' or beneficiaries' accounts and which are not described in clauses
(i), (ii), and (iii).</text>
</clause></subparagraph><subparagraph id="HB9CA86672F2F4B12A0C24727E0FB6CE9"><enum>(C)</enum><header>Description of purpose
for charges</header><text>The notice shall indicate the extent to which each
charge is for investment management, transactions, plan administration and
recordkeeping, or other identified services.</text>
</subparagraph><subparagraph display-inline="no-display-inline" id="H9CBFCF2D8D7840E088E313E36DF5F21C"><enum>(D)</enum><header>Fees and historical
returns</header><text display-inline="yes-display-inline">In connection with
each investment option listed in the plan fee comparison chart, the chart shall
also include, as determined periodically by the Secretary in consultation with
the Securities and Exchange Commission, appropriate and consistent benchmarks,
indices, or other points of comparison that may be used by beneficiaries to
compare each investment option's historical returns, net of fees and expenses,
for the previous year, 5 years, and 10 years (or for the period since
inception, if shorter) as shown in the chart pursuant to this paragraph,
including a separate point of comparison with respect to each such time period.</text>
</subparagraph></paragraph><paragraph display-inline="no-display-inline" id="HDF92172CF22E4ED08860067977FB72D4"><enum>(4)</enum><header>Model
notices</header><text>The Secretary shall prescribe one or more model notices
that may be used for purposes of satisfying the requirements of this
subsection, including model plan fee comparison charts.</text>
</paragraph><paragraph id="H7F78DED239FB42DCB8ABDCB6F7322596"><enum>(5)</enum><header>Estimations</header><text display-inline="yes-display-inline">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 reasonable assumptions stated in
the notice (such as the previous year’s experience or, in the case of a new
plan, a reasonable estimate, taking into account the plan’s participants and
beneficiaries).</text>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="HF85344995E82492F85F52F57AD4739D2"><enum>(c)</enum><header>Electronic
media</header><text display-inline="yes-display-inline">Any disclosure required
under this section may be provided through an electronic medium under such
rules as shall be prescribed by the Secretary not later than 1 year after the
date of the enactment of the <short-title>401(k) Fair
Disclosure and Pension Security Act of 2009</short-title>. 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
regularly modify such rules as appropriate to take into account new
developments, including new forms of electronic media, and to fairly take into
consideration the interests of plan sponsors, service providers, and
participants. 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.</text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="H16C4AF498643416E917493C2F49BFBCC"><enum>(d)</enum><header>Regulations regarding
certain products</header><text>The Secretary may by regulation identify certain
types of investment options, such as an option that provides a guaranteed rate
of return and that does not identify specific fees, and prescribe alternative
disclosures of cost and performance measures that correspond to the particular
circumstances of such options.</text>
</subsection><subsection id="H89909E5B507C43E6A884B6964EE8DB4B"><enum>(e)</enum><header>Definitions</header><text>For
purposes of this section—</text>
<paragraph id="HF00A3D829BAF4F27934DEE1B8EFE48D5"><enum>(1)</enum><header>Charge</header><text>The
term <quote>charge</quote> 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.</text>
</paragraph><paragraph id="HAF5316F2611C4D459C14736D47EA407F"><enum>(2)</enum><header>Service</header><text>The
term <quote>service</quote> 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.</text>
</paragraph><paragraph id="H0BC329823CCD43ECB86F9D8CC18AAD78"><enum>(3)</enum><header>Contract or
arrangement</header><text>The term <quote>contract or arrangement</quote>
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.</text>
</paragraph><paragraph id="HF0E8F574E8804890B63F71C7E9E5ECB4"><enum>(4)</enum><header>Service
provider</header><text>The terms <quote>service provider</quote> and
<quote>provider</quote> mean, in connection with a service, a person directly
or indirectly providing such service.</text>
</paragraph><paragraph commented="no" id="H308B947C1717469B9C88392B39B1164D"><enum>(5)</enum><header>Regulations</header><text>The
Secretary shall provide by regulation such definitions of other terms used in
this section as the Secretary determines
appropriate.</text>
</paragraph></subsection></section><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph></subsection><subsection display-inline="no-display-inline" id="H101250ED192B493B8F0D4C44DF1CDFD6"><enum>(b)</enum><header>Quarterly benefit
statements</header><text>Section 105 of such Act (29 U.S.C. 1025) is
amended—</text>
<paragraph id="H9DE298C573C24312BFEC151DE15C23AD"><enum>(1)</enum><text>in subsection
(a)(2)—</text>
<subparagraph commented="no" id="H296DCA0561C249E0B3CEC6DFADB7C50A"><enum>(A)</enum><text>by redesignating
subparagraph (C) as subparagraph (H);</text>
</subparagraph><subparagraph id="H1F0E31DE002F42DE8F93AA9B728BDC50"><enum>(B)</enum><text>in subparagraph
(B)(ii)—</text>
<clause id="H77E02C17513A4456B74570E9FB5C5D34"><enum>(i)</enum><text>in subclause (II), by
striking <quote>diversified, and</quote> and inserting
<quote>diversified,</quote>;</text>
</clause><clause id="H9402D1621B4749B089E9A7FF34C8E998"><enum>(ii)</enum><text>in subclause (III), by
striking the period and inserting <quote>, and</quote>;</text>
</clause><clause id="HA483779623D7475193455701CBA39241"><enum>(iii)</enum><text>by adding after
subclause (III) the following new subclause:</text>
<quoted-block act-name="" changed="added" committee-id="HED00" id="H2A551F8693784643AD5D19E64DED9446" reported-display-style="italic" style="OLC">
<subclause commented="no" id="H9D83858F966A4DF897E976DE2BDCF1DE"><enum>(IV)</enum><text>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).</text>
</subclause><after-quoted-block>;
and</after-quoted-block></quoted-block>
</clause></subparagraph><subparagraph id="H5AC85ED84BAD443F8DE194BA6506CF41"><enum>(C)</enum><text>by inserting after
subparagraph (B) the following new subparagraphs:</text>
<quoted-block changed="added" committee-id="HED00" display-inline="no-display-inline" id="H169EF886F92A4370AE6C6E39BC0E14E2" reported-display-style="italic" style="OLC">
<subparagraph id="H0597E60FA5B949B0A9C25FB50A190DC0"><enum>(C)</enum><header>Periodic account
information for participants and beneficiaries</header><text display-inline="yes-display-inline">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:</text>
<clause id="HE3D08CF02FE4410DB95AC2D41F14FD4B"><enum>(i)</enum><text>the starting balance of
the participant’s account,</text>
</clause><clause id="HFB1B564D566E483A9A9BA91908B1EE13"><enum>(ii)</enum><text>contributions made
during the quarter, itemizing separately totals for employer and totals for
employee contributions,</text>
</clause><clause id="H5610F816FC3F499DBD786469B0D974EF"><enum>(iii)</enum><text>investment earnings or
losses on the account balance during the quarter (if any),</text>
</clause><clause id="HC72461F3FF404B7A9EE1A907751C1763"><enum>(iv)</enum><text>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 are derived from an expense ratio (which may be expressed as
a specific date estimate based on reasonable assumptions stated in the
disclosure (such as the previous year’s expense ratio).</text>
</clause><clause id="H6319AD749D614243ACA399B7FBA18A2F"><enum>(v)</enum><text>any other direct charges
to the participant or beneficiary in connection with the participant’s
account,</text>
</clause><clause id="H8DAAB23053B94EFDB30B1FAAFF3DFA42"><enum>(vi)</enum><text>the ending balance of
the account,</text>
</clause><clause id="HCD175439969C49DD879E2CAB10B26FB5"><enum>(vii)</enum><text>the participant’s asset
allocation to each investment option, expressed as an amount and as a
percentage, and</text>
</clause><clause id="H276A13865DE643B19AEF4281296A98D5"><enum>(viii)</enum><text>how to obtain the most
recently updated version of the plan fee comparison chart prepared for purposes
of section 111(b)(3).</text>
</clause></subparagraph><subparagraph id="H95F0837F402F43E2951338A962BF48DD"><enum>(D)</enum><header>Other
information</header><text>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).</text>
</subparagraph><subparagraph id="H77E6A8C5D5C8442CA042AE0AF799B820"><enum>(E)</enum><header>Estimations</header><text display-inline="yes-display-inline">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 reasonable assumptions included
in the statement (such as the previous year’s experience).</text>
</subparagraph><subparagraph id="H4C288A20C4C749A6A9762A4C988DDEB7"><enum>(F)</enum><header>Model
statements</header><text>The Secretary shall prescribe one or more model
pension benefit statements that may be used for purposes of satisfying the
requirements of subparagraphs (B)(ii) and (C).</text>
</subparagraph><subparagraph id="HBE0BA0204AC84C41AE75D72C19FB245B"><enum>(G)</enum><header>Annual compliance for
small plans and with respect to certain information</header><text>In the case
of a plan providing for investment as described in paragraph (1)(A)(i)—</text>
<clause id="H816C774B045F4907B808D6FE2682A7E1"><enum>(i)</enum><text>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</text>
</clause><clause id="HC5451D064D134090B72CAC1E05F1474A"><enum>(ii)</enum><text>the plan may comply with
the requirements of subparagraph (B)(ii)(IV) on an annual rather than a
quarterly basis.</text>
</clause></subparagraph><after-quoted-block>;
and</after-quoted-block></quoted-block>
</subparagraph></paragraph><paragraph id="HA28871875D8345AC8EDD3BA3E938407A"><enum>(2)</enum><text>by adding at the end the
following new subsections:</text>
<quoted-block changed="added" committee-id="HED00" display-inline="no-display-inline" id="HCA71E53F3C584395B064D3161BAF911A" reported-display-style="italic" style="OLC">
<subsection commented="no" id="H1B83822945FE46148009558B58A5A9D8"><enum>(d)</enum><header>Assistance to small
employers</header><text>The Secretary shall make available to employers with
100 or fewer employees—</text>
<paragraph commented="no" id="H6FBA030CCBF84FB981D698472EBC5D81"><enum>(1)</enum><text display-inline="yes-display-inline">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</text>
</paragraph><paragraph commented="no" id="HFBBB47143CFD424683CF16AD85636F50"><enum>(2)</enum><text>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.</text>
</paragraph></subsection><subsection id="H4D1EBF5159F0424696CB45BC632C7A8A"><enum>(e)</enum><header>Assistance to plan
sponsors and plan participants and beneficiaries</header><text>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.</text>
</subsection><subsection commented="no" id="H90817CDA3B094D3FBFEB62AEF8D0391F"><enum>(f)</enum><header>Electronic
media</header><text display-inline="yes-display-inline">Any disclosure required
under this section may be provided through an electronic medium under such
rules as shall be prescribed by the Secretary not later than 1 year after the
date of the enactment of the <short-title>401(k) Fair
Disclosure and Pension Security Act of 2009</short-title>. 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
regularly modify such rules as appropriate to take into account new
developments, including new forms of electronic media, and to fairly take into
consideration the interests of plan sponsors, service providers, and
participants. 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.</text>
</subsection><subsection commented="no" id="HF936CC11D5B442159E29CEC062055AAB"><enum>(g)</enum><header>Definitions</header><text>For
purposes of this section—</text>
<paragraph commented="no" id="H92DD6D2D4C454395ADC6975CA5529527"><enum>(1)</enum><header>Charge</header><text>The
term <quote>charge</quote> 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.</text>
</paragraph><paragraph commented="no" id="HBD2E7DEE686644FDA1855BADDA3422D0"><enum>(2)</enum><header>Service
provider</header><text>The terms <quote>service provider</quote> and
<quote>provider</quote> mean, in connection with a service (as defined in
section 111(e)(2)), a person directly or indirectly providing such
service.</text>
</paragraph><paragraph commented="no" id="H79C5BB0344344E6DAF3812737658FD95"><enum>(3)</enum><header>Regulations</header><text>The
Secretary shall provide by regulation such definitions of other terms used in
this section as the Secretary determines
appropriate.</text>
</paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph></subsection><subsection commented="no" id="HB8B957353F094532B839A65DC0530D49"><enum>(c)</enum><header>Enforcement</header><text>Section
502 of such Act (29 U.S.C. 1132) is amended—</text>
<paragraph commented="no" id="HDC51444DC97C47CEA668FB36B7F8563C"><enum>(1)</enum><text>in subsection (a)(6), by
striking <quote>under paragraph (2)</quote> and all that follows through
<quote>subsection (c)</quote> and inserting <quote>under paragraph (2), (4),
(5), (6), (7), (8), (9), (10), or (11) of subsection (c)</quote>; and</text>
</paragraph><paragraph commented="no" id="H922EA5B468F54028B5DEABD21E2DBCDB"><enum>(2)</enum><text>in subsection (c), by
redesignating the second paragraph (10) as paragraph (12), and by inserting
after the first paragraph (10) the following new paragraph:</text>
<quoted-block changed="added" committee-id="HED00" display-inline="no-display-inline" id="HB8BC692794844832802C17E0FDA78122" reported-display-style="italic" style="traditional">
<paragraph commented="no" id="HC8CA42EA70334D0DBA970F4DF08E2A74" indent="up1"><enum>(11)</enum><subparagraph commented="no" display-inline="yes-display-inline" id="H0A8615B42E0A4E44BF5939CBCC9EEE5E"><enum>(A)</enum><text>In the case of any
violation of section 111(a) by a service provider (as defined in section
111(e)(4)), the service provider may be assessed by the Secretary a civil
penalty of up to $1,000 a day with respect to each such violation 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, as
determined by the Secretary.</text>
</subparagraph><subparagraph changed="added" commented="no" committee-id="HED00" id="H586581AE9DDF40099EF305965A603761" indent="up1" reported-display-style="italic"><enum>(B)</enum><text display-inline="yes-display-inline">Any plan administrator with respect to a
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) may 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.</text>
</subparagraph><subparagraph changed="added" commented="no" committee-id="HED00" id="H5BC01607E8C5438387CF651620979D39" indent="up1" reported-display-style="italic"><enum>(C)</enum><text display-inline="yes-display-inline">For purposes of this paragraph, each
violation with respect to any single participant, beneficiary, or plan
administrator shall be treated as a separate violation.</text>
</subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph></subsection><subsection id="H66CCAFFFA8BF4A8A8E153F7A3D081382"><enum>(d)</enum><header>Conforming
amendment</header><text>The table of contents in section 1 of such Act is
amended by striking the item relating to section 111 and inserting the
following new items:</text>
<quoted-block changed="added" committee-id="HED00" display-inline="no-display-inline" id="H7B898902818C4B0AA2C642E89286FEDC" reported-display-style="italic" style="OLC">
<toc changed="added" committee-id="HED00" container-level="quoted-block-container" idref="H34A95EA382404A04B31C297E490C3B27" lowest-bolded-level="division-lowest-bolded" lowest-level="section" quoted-block="no-quoted-block" regeneration="yes-regeneration" reported-display-style="italic">
<toc-entry idref="H3E25DE61F1CC4936AFCFF691448880A4" level="section">Sec. 111. Special reporting and disclosure
rules for individual account plans.</toc-entry>
<toc-entry bold="off" level="section">Sec. 112. Repeal and effective
date.</toc-entry>
</toc>
<after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection commented="no" id="H8254DA6D547347D7AC008A3EB9719DF4"><enum>(e)</enum><header>Effective
dates</header>
<paragraph commented="no" id="H8E16A418885C47B0BCA66AB4C9ADFBB5"><enum>(1)</enum><text>Section 111(a) of the
Employee Retirement Income Security Act of 1974 (as added by subsection (a) of
this section) shall apply with respect to contracts or arrangements for
services entered into after one year after the date of the enactment of this
Act.</text>
</paragraph><paragraph commented="no" id="H27E16F7BBF7A4EA78DC72C086F99C5B3"><enum>(2)</enum><text>Section 111(b) of such
Act (as added by subsection (a) of this section) shall apply with respect to
plan years beginning after one year after the date of the enactment of this
Act.</text>
</paragraph><paragraph commented="no" id="H2FF4332FF3B041039097B8B0029662CD"><enum>(3)</enum><text display-inline="yes-display-inline">The amendments made by subsection (b) of
this section shall apply with respect to pension benefit statements for
calendar quarters beginning after one year after the date of the enactment of
this Act.</text>
</paragraph><paragraph commented="no" id="HF01F3EAB2BA84C03B403510C9E60D758"><enum>(4)</enum><text display-inline="yes-display-inline">The Secretary shall issue final regulations
under the amendments made by this section not later than 270 days after the
date of the enactment of this Act. Any act or practice in advance of the
issuance of final regulations under the amendments made by this section which
is in good faith compliance with the requirements of such amendments shall be
treated as in compliance with any such final regulations.</text>
</paragraph></subsection><subsection display-inline="no-display-inline" id="HA6EBE0CBCC594381844F88FE74385E19"><enum>(f)</enum><header>Study regarding use of
benchmarks, indices, and other points of comparison in plan fee comparison
charts</header>
<paragraph id="H4C712458A2494B33AE6B1A1C888779B6"><enum>(1)</enum><header>Study</header><text display-inline="yes-display-inline">As soon as practicable after the date of
the enactment of this Act, the Secretary of Labor shall study the efficacy of
including benchmarks, indices, and other points of comparison in plan fee
comparison charts provided to participants and beneficiaries pursuant to
section 111(b)(3) of the Employee Retirement Income Security Act of 1974 (as
added by this Act).</text>
</paragraph><paragraph id="H16BB6AB3AD944651A8AD0A757F2C479D"><enum>(2)</enum><header>Matters to be
studied</header><text display-inline="yes-display-inline">In the study required
under paragraph (1), the Secretary shall investigate whether, and the extent to
which, benchmarks, indices, and other points of comparison included in plan fee
comparison charts—</text>
<subparagraph id="H6B736748E17F4A9DB5FC830311ECF3C5"><enum>(A)</enum><text>help participants and
beneficiaries understand the charges with respect to their individual account
plans,</text>
</subparagraph><subparagraph id="H98F34F2EB46A42278A8B173164728C5B"><enum>(B)</enum><text display-inline="yes-display-inline">help participants and beneficiaries make
more informed decisions on which investment options to choose under such plans,
and</text>
</subparagraph><subparagraph id="HDDC113F3CD354ED0BB3B126C3EB52D4A"><enum>(C)</enum><text display-inline="yes-display-inline">bias participants and beneficiaries against
particular investment options under such plans, types of investment, or
individual account plans as a whole.</text>
</subparagraph></paragraph><paragraph id="H1F350EFAEDBD43FF9B2DD8E3A1E40855"><enum>(3)</enum><header>Report</header><text>Not
later than 180 days after the date of the enactment of this Act, the Secretary
shall report to each House of the Congress regarding the results of the study
conducted pursuant to this subsection, together with such recommendations as
the Secretary may consider appropriate.</text>
</paragraph></subsection></section><section commented="no" display-inline="no-display-inline" id="H06729F4B49E04377BD8F2681E47F21B5" section-type="subsequent-section"><enum>102.</enum><header>Minimum investment
option requirement for individual account plans</header>
<subsection id="HE2053F6622C8444EBC1009C1EB3ACA10"><enum>(a)</enum><header>In
general</header><text display-inline="yes-display-inline">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:</text>
<quoted-block changed="added" committee-id="HED00" display-inline="no-display-inline" id="HDDB7588FA59F41E4AC3F069748152D87" reported-display-style="italic" style="OLC">
<paragraph commented="no" id="H43C20E38819D4151AFD9C9A2189ABDA1"><enum>(6)</enum><header>Minimum investment
option requirement for individual account plans</header><text>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—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="HA0F0AD76EB224618BE765153F20B99C0"><enum>(A)</enum><text display-inline="yes-display-inline">which is a passively managed investment
with a portfolio of securities that is designed to be representative of the
United States investable equity market (including representation of small, mid,
and large cap stocks) or the United States investment grade bond market
(including Treasury, agency, non-agency, and corporate issues), or a
combination thereof, and</text>
</subparagraph><subparagraph commented="no" id="HB0E430B53F9C4632B052191E9EDDC962"><enum>(B)</enum><text>which is described in the
terms of the plan as offered without any endorsement of the Government or the
plan sponsor.</text>
</subparagraph><continuation-text continuation-text-level="paragraph">An
investment shall not fail to satisfy the requirements of subparagraph (A) in
connection with either market described in subparagraph (A) solely by reason of
a failure to invest in all or substantially all equities or bonds (as
applicable) in such market, if the methodology used to select the equities or
bonds is designed to approximate in a reasonable manner the broad experience of
such
market.</continuation-text></paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection commented="no" id="H92A8E176F09F40FBB2FC2DBC7EAA88D0"><enum>(b)</enum><header>Conforming
amendment</header><text>Section 404(c)(1)(A)(ii) of such Act (29 U.S.C.
1104(c)(1)(A)(ii)) is amended by inserting <quote>except as provided in section
404(c)(6) and</quote> after <quote>exercise of control,</quote>.</text>
</subsection><subsection commented="no" id="HA5337B64332E46BCA0D3629150FEA891"><enum>(c)</enum><header>Effective
dates</header>
<paragraph id="H7959CD4192E44798AB738703245931D0"><enum>(1)</enum><text>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.</text>
</paragraph><paragraph commented="no" id="HE957857689B5424699296017FC08A019"><enum>(2)</enum><text display-inline="yes-display-inline">The Secretary shall issue final regulations
under the amendments made by this section not later than 270 days after the
date of the enactment of this Act. Any act or practice in advance of the
issuance of final regulations under the amendments made by this section which
is in good faith compliance with the requirements of such amendments shall be
treated as in compliance with any such final regulations.</text>
</paragraph></subsection></section><section display-inline="no-display-inline" id="H42396D25B0CB4EA8A53DACA6C22A619A" section-type="subsequent-section"><enum>103.</enum><header>Enforcement
coordination and review by the Department of Labor</header>
<subsection id="HBDE512485E164E3DB66CC25B71ECA08D"><enum>(a)</enum><header>In
general</header><text>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:</text>
<quoted-block changed="added" committee-id="HED00" display-inline="no-display-inline" id="HF526F502E6B04F33823F9E4A4946E3E8" reported-display-style="italic" style="OLC">
<subsection id="HFB5B709997EE45238ED4FA534F60BFEC"><enum>(n)</enum><header>Enforcement
coordination of certain disclosure requirements and review by the Department of
Labor</header>
<paragraph id="H62D309B9E7A249AA9F73BFFB2BE25EB2"><enum>(1)</enum><header>In general</header>
<subparagraph id="HD71E6678277B477D8F678B24DF62D04C"><enum>(A)</enum><header>Notification and
action</header><text>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.</text>
</subparagraph><subparagraph id="H66D812DEE6C34912B20DE8655964CAE8"><enum>(B)</enum><header>Dissemination</header><text>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.</text>
</subparagraph></paragraph><paragraph id="HE0DF5F222D4C4E83ADBE9BF271447916"><enum>(2)</enum><header>Annual audit of
representative sampling of individual account plans</header><text>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.</text>
</paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="HC4BB2AB6645C454F8B235698A1CFC7DC"><enum>(b)</enum><header>Review and report to
the Congress by Secretary of Labor relating to reporting and disclosure
requirements</header>
<paragraph id="H5E6478581B1B4ADA9F14BA87CBCF391A"><enum>(1)</enum><header>Study</header><text>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.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="H920A4E3C807F477BA9B4F36DE792589B"><enum>(2)</enum><header>Report</header><text>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.</text>
</paragraph></subsection></section><enum>II</enum><header>Prohibition of
Conflicted Investment Advice</header>
<section id="H40A9A9DFDA444A369F857FDE98176D0C"><enum>201.</enum><header>Findings</header><text display-inline="no-display-inline">The Congress finds as follows:</text>
<paragraph id="HBBAA596FA83D4404BD63FE57955F3BEE"><enum>(1)</enum><text display-inline="yes-display-inline">The market downturn of 2008 had a
devastating effect on the retirement security income of millions of American
workers.</text>
</paragraph><paragraph id="H7B52B63CDE39436198FC556279DF8D15"><enum>(2)</enum><text>According to the
Congressional Budget Office, $2 trillion of Americans’ retirement savings was
wiped out over a 15-month period starting in 2008.</text>
</paragraph><paragraph id="H6EDE97CB3F594DD1A5516EC504A1A48D"><enum>(3)</enum><text>According to
Congressional Budget Office estimates, the value of pension funds and
retirement accounts dropped by roughly $1 trillion last year.</text>
</paragraph><paragraph id="H3F0BA39452584DADA1749E5FB100CC70"><enum>(4)</enum><text>Individual average losses
of participants in 401(k) plans ranged from 7.2 percent to 11.2 percent in the
first nine months of 2008, according to an Employee Benefit Research Institute
analysis of 2.2 million retirements account participants.</text>
</paragraph><paragraph id="H36EBD62069FE408E987743B2311780AD"><enum>(5)</enum><text>During the first nine
months of 2008, stocks were down, with the S&P 500 index losing more than
19 percent. With over two-thirds of the assets in 401(k)-style defined
contribution plans invested in equities, either directly or through mutual
funds, participants are exposed to increased risk and lack meaningful access to
independent investment advise to help them better plan for their
retirement.</text>
</paragraph><paragraph id="H41DEAAF12CEF4F929B75900C78DABE31"><enum>(6)</enum><text>Currently, 401(k) plan
account holders have access to a self-interested or conflicted investment
adviser.</text>
</paragraph><paragraph id="H7B256DE4CA17466BB5E85DEA7021FF0F"><enum>(7)</enum><text>In 2007, the Government
Accountability Office concluded that conflicts of interest can have an adverse
affect on defined benefit and defined contribution plans.</text>
</paragraph></section><section id="HF59CE959D5DC433381B7D78AAEBF5FA3"><enum>202.</enum><header>Independent investment
advisers for individual account plans</header>
<subsection id="H0C25553254AB4DB1A901785CC9AB54B2"><enum>(a)</enum><header>In
general</header><text display-inline="yes-display-inline">Section 3 of the
Employee Retirement Income Security Act of 1974 (29 U.S.C. 1002) is amended by
adding at the end the following new paragraph:</text>
<quoted-block changed="added" committee-id="HED00" display-inline="no-display-inline" id="H765136FBF7BD455FA355CEF452159DA9" reported-display-style="italic" style="traditional">
<paragraph id="H9A29660CAB664FCC8A0A6B8F2F2BB869"><enum>(43)</enum><header>Independent investment
adviser</header>
<subparagraph id="H2C7314EC0B094794B478F5127D45CD99"><enum>(A)</enum><header>In
general</header><text display-inline="yes-display-inline">The term
<term>independent investment adviser</term> means, with respect to an
individual account plan that permits a participant or beneficiary to direct the
investment of assets in their individual account, a person who—</text>
<clause id="H0E2C53B411D1407E8641AE945F16DB0D"><enum>(i)</enum><text>is a fiduciary of the
plan by reason of the provision of investment advice referred to in section
3(21)(A)(ii) by the person to the plan or a participant or beneficiary of the
plan (irrespective of the manner in which such advice is provided or the extent
to which such advice is based on a computer model), and</text>
</clause><clause id="H342A9CDC52A646AFBFBF9772914018E5"><enum>(ii)</enum><text>meets the requirements
of either subparagraph (B) or (C).</text>
</clause></subparagraph><subparagraph id="H8C2AA8C7A0164F6EBF8580C65BCE042B"><enum>(B)</enum><header>Requirements applicable
to investment adviser</header><text>An investment adviser meets the
requirements of this subparagraph, if—</text>
<clause id="HBE057FC8D5794FC790ECB2B902E5DC50"><enum>(i)</enum><text>such adviser is—</text>
<subclause id="HB02FFA721B7945BF8F00087B931E272F"><enum>(I)</enum><text>registered as an
investment adviser under the Investment Advisers Act of 1940 (15 U.S.C. 80b–1
et seq.) or under the laws of the State in which the adviser maintains its
principal office and place of business, or</text>
</subclause><subclause id="H0753A113624F4B39AA4796909EE37647"><enum>(II)</enum><text>any other person, but
only if every individual providing the investment advice referred to in section
3(21)(A)(ii) on behalf of such person (or on behalf of any affiliate thereof)
is a registered representative of a person described in subclause (I),</text>
</subclause></clause><clause id="HE9E6132B0A4C4547B5C4E26538172969"><enum>(ii)</enum><text>such adviser is not the
plan investment provider,</text>
</clause><clause id="H3C85B5ECD27F46949AC6E44CAAB63551"><enum>(iii)</enum><text>the fees or other
compensation received, directly or indirectly, by such adviser (and any
affiliate thereof) with respect to the provision of investment advice to any
individual account plan or the participants or beneficiaries of such a plan
either—</text>
<subclause id="HC3DF122075644F4A865E8BB74462B173"><enum>(I)</enum><text>are not received from any
person or persons (or anyone affiliated with such persons) that market, sell,
manage or provide investments in which plan assets of the individual account
plan are invested, or</text>
</subclause><subclause id="HB51B806B06CC405E9E4B6F40B343A6B1"><enum>(II)</enum><text>do not vary depending on
the basis of any investment option selected, and are calculated pursuant to one
or more of the following bases—</text>
<item id="HE2258985E1A8458B85097C95B6AE1EE0"><enum>(aa)</enum><text>a flat-dollar
basis,</text>
</item><item id="H6781565D6F414B289459F6F0F721882F"><enum>(bb)</enum><text>a flat percentage of
total plan assets basis,</text>
</item><item commented="no" id="HAD2894C1971947CC90CA40DBC34C3D0B"><enum>(cc)</enum><text>a flat or sliding-scale
percentage of the assets in a participant’s or beneficiary’s account basis, or</text>
</item><item id="H26A59B4EEAD242C9B68E40E9A905500A"><enum>(dd)</enum><text>a per-participant or
per-beneficiary account basis, and</text>
</item></subclause></clause><clause id="HB10004CACDFE4B31A36A733AC38A7D61"><enum>(iv)</enum><text>such adviser provides
the investment advice pursuant to a written arrangement with the individual
account plan that—</text>
<subclause id="HCA285E7E1253472D9AF1147A93856327"><enum>(I)</enum><text>provides that the
investment adviser is a fiduciary of the plan with respect to the provision of
the advice,</text>
</subclause><subclause id="H8E3417C347C94E4BA5087838053C0CFC"><enum>(II)</enum><text>requires that the advice
be provided only by registered representatives of the investment adviser or an
affiliate thereof,</text>
</subclause><subclause id="H06DE440D3E2E47BEBD10F7409A8FD614"><enum>(III)</enum><text>discloses, before a
reasonable period prior to entering into such arrangement, whether the
investment adviser or any affiliate thereof has any material financial,
referral, or other relationship or arrangement with a money manager, broker,
other client of the investment adviser or any affiliate thereof, other service
provider to the plan, or any other entity that creates or may create a conflict
of interest for the investment adviser in performing services pursuant to the
arrangement with the plan and, if so, includes a description of such
relationship or arrangement,</text>
</subclause><subclause id="HFE05075C9D3C4D61917532BA8F2AD96F"><enum>(IV)</enum><text>includes a
representation by the investment adviser that, before the arrangement was
entered into (or extended or renewed), the investment adviser provided to the
plan fiduciary that has authority to cause the employee benefit plan to enter
into (or extend or renew) the arrangement a written statement disclosing all
fees or other compensation that the investment adviser or any affiliate thereof
anticipates to receive with respect to the advice during the first year, or
other period if less than a year, of the arrangement,</text>
</subclause><subclause id="H01348DA7878A4B5DB06ED7B6A63540F6"><enum>(V)</enum><text>provides that the
investment adviser will provide to such plan fiduciary (and the participant and
beneficiary receiving the advice, if applicable) a statement annually
disclosing all fees or other compensation that the investment adviser or any
affiliate thereof has received with respect to the advice during the prior
year, and</text>
</subclause><subclause commented="no" id="H22EE1F4563374FDBA14C014F3F1A682B"><enum>(VI)</enum><text>provides that the terms
of the arrangement required under this clause and any information provided
under such arrangement pursuant to subclauses (III) and (IV) will also be
furnished by the investment adviser to the participant or beneficiary that is
the recipient of the advice.</text>
</subclause></clause></subparagraph><subparagraph id="HC69F9614A0CA45EBBFD75F921E6B8103"><enum>(C)</enum><header>Advice provided to
participants and beneficiaries under an investment advice computer program
meeting requirements</header><text>An investment adviser meets the requirements
of this subparagraph if the investment advice provided by the adviser, to the
extent that such advice is provided to participants and beneficiaries of
individual account plans, is provided under an investment advice computer
program with respect to which the requirements of clauses (i) through (x) are
met.</text>
<clause id="H4BA4D3AA9F8E42DC9F8C63FE2E3F0CB1"><enum>(i)</enum><header>Adviser
requirements</header><text>The requirements of this clause are met if the
investment adviser providing the investment advice under the program is—</text>
<subclause id="H15E7DBDF6870494E901FE69A53E9F355"><enum>(I)</enum><text>described in subclauses
(I) or (II) of subparagraph (B)(i),</text>
</subclause><subclause id="HB53C91609B1B4993897FD661294E7E34"><enum>(II)</enum><text>an insurance company
qualified to do business under the laws of a State,</text>
</subclause><subclause id="H96773A311CBF4042A5EED1BAD12A6793"><enum>(III)</enum><text>a person registered as
a broker or dealer under the Securities Exchange Act of 1934 (15 U.S.C. 78a et
seq.),</text>
</subclause><subclause id="HB879F54931604BDA82ACE7190423CB20"><enum>(IV)</enum><text>an affiliate of a person
described in any of subclauses (I) through (III), or</text>
</subclause><subclause id="H5AE387FF9D9A4112898C08B2401642E1"><enum>(V)</enum><text>an employee, agent, or
registered representative of a person described in subclauses (I) through (IV)
who satisfies the requirements of applicable insurance, banking, and securities
laws relating to the provision of the advice.</text>
</subclause></clause><clause id="H012E832B0CCB4E7281FB1F65520A81A5"><enum>(ii)</enum><header>Computer
model</header><text>The requirements of this clause are met if the investment
advice provided under the investment advice computer program is provided
pursuant to a computer model that—</text>
<subclause id="HA9C5E9CC321641BFB12BBB98CC8B5AB4"><enum>(I)</enum><text>applies generally
accepted investment theories that take into account the historic returns of
different asset classes over defined periods of time,</text>
</subclause><subclause id="H7C1EDE72587D4C788015D47E0402AA1F"><enum>(II)</enum><text>utilizes relevant
information about the participant, which may include age, life expectancy,
retirement age, risk tolerance, other assets or sources of income, and
preferences as to certain types of investments,</text>
</subclause><subclause id="HB3AB32BBE14D457489FD3BD03C680926"><enum>(III)</enum><text>utilizes prescribed
objective criteria to provide asset allocation portfolios comprised of
investment options available under the plan,</text>
</subclause><subclause id="H17B8028F0F7B4469BCEE6BE247EB6B31"><enum>(IV)</enum><text>operates in a manner
that is not biased in favor of investments offered by the investment adviser or
any person with a material affiliation or contractual relationship with the
investment adviser,</text>
</subclause><subclause id="H52BA8A91811A413DB370A217BB970BA0"><enum>(V)</enum><text>takes into account all
investment options under the plan in specifying how a participant's account
balance should be invested and is not inappropriately weighted with respect to
any investment option,</text>
</subclause><subclause id="HE57F8F88B09C4215ADBE439FC6B19943"><enum>(VI)</enum><text display-inline="yes-display-inline">operates so that it does not, directly or
indirectly, in any manner act to benefit the investment adviser (or any
affiliate of the adviser or any person with a material affiliation or
contractual relationship with the adviser) at the expense of plan participants
and beneficiaries,</text>
</subclause><subclause id="H62DFD7707B8E4DB4BBE4EA215867917C"><enum>(VII)</enum><text>takes into account the
fees associated with each investment option, and</text>
</subclause><subclause id="H04141A97B69D43B98C259D12CB1DC27C"><enum>(VIII)</enum><text>conforms to such other
requirements as shall be prescribed by the Secretary to ensure that it operates
in the best interest of plan participants and beneficiaries.</text>
</subclause></clause><clause id="HCD0C6FD597994724AEEFAC790F3E8CFE"><enum>(iii)</enum><header>Certification</header>
<subclause id="H7EE406964BC741039B9A541211650466"><enum>(I)</enum><header>In
general</header><text>The requirements of this clause are met with respect to
the program if an eligible investment expert certifies, prior to the
utilization of the computer model and in accordance with rules prescribed by
the Secretary, that the computer model meets the requirements of clause
(ii).</text>
</subclause><subclause id="HC75B5064BF224109AF00A1FEA331FB8D"><enum>(II)</enum><header>Renewal of
certifications</header><text>If, as determined under regulations prescribed by
the Secretary, there are material modifications to the computer model, the
requirements of this subparagraph are met only if a certification described in
subclause (I) is obtained with respect to the computer model as so
modified.</text>
</subclause><subclause id="HCFB824D5AD5E40399CD459D52C4EA1D4"><enum>(III)</enum><header>Eligible investment
expert</header><text>For purposes of this clause, the term ‘eligible investment
expert’ means any person—</text>
<item id="H0F9788A862214EB7B26985DF85C532D3"><enum>(aa)</enum><text>which meets such
requirements as the Secretary may provide, and</text>
</item><item id="H036E8A7279AE42D7BF54A590E1465090"><enum>(bb)</enum><text>does not have any
material affiliation or contractual relationship with any investment adviser or
a related person thereof (or any employee, agent, or registered representative
of the investment adviser or related person).</text>
</item></subclause></clause><clause id="H635CC7C09D604BF380451A22B9F15744"><enum>(iv)</enum><header>Exclusivity of
recommendation</header><text>The requirements of this clause are met with
respect to the program, if—</text>
<subclause id="HBA23CD1A8B50472EA486E7D5C1596872"><enum>(I)</enum><text>the only investment
advice provided under the program is the advice generated by the computer model
described in clause (ii), and</text>
</subclause><subclause id="H6F13A6E628644BF8A9638D93E4D31E82"><enum>(II)</enum><text>any transaction pursuant
to the investment advice occurs solely at the direction of the participant or
beneficiary.</text>
</subclause></clause><clause id="H6FABDABBC0B349938AAF5CDEA5EA16CA"><enum>(v)</enum><header>Express authorization
by separate fiduciary</header><text>The requirements of this clause are met
with respect to the program if the program is expressly authorized by a plan
fiduciary other than—</text>
<subclause id="HC1564254302B4F20867D1C6F450CD7DE"><enum>(I)</enum><text>the person offering the
program,</text>
</subclause><subclause id="HD20D030489634AED9DB74C17318A0FC6"><enum>(II)</enum><text>any person that is a
plan investment provider with respect to the plan, and</text>
</subclause><subclause id="H2AD5858989E249099EDB1DCBF831D4AB"><enum>(III)</enum><text>any affiliate of either
person described in subclause (I) or (II).</text>
</subclause></clause><clause id="HF454C041B5A044CC92B3968E8BE4AABB"><enum>(vi)</enum><header>Annual
audit</header><text>The requirements of this clause are met with respect to the
program if an independent auditor, who has appropriate technical training or
experience and proficiency and so represents in writing—</text>
<subclause id="H02F4B42E4FAD49A1BFCC8769071162D5"><enum>(I)</enum><text>conducts an annual audit
of the program other than the computer model referred to in clause (ii) which
is certified pursuant to clause (iii) for compliance with the requirements of
this subparagraph, and</text>
</subclause><subclause id="H7C7165E072CA442587F07BADB9150FFF"><enum>(II)</enum><text>following completion of
the annual audit, issues a written report to the fiduciary who authorized use
of the program which presents its specific findings regarding compliance of the
program with the requirements of this subsection.</text>
</subclause><continuation-text continuation-text-level="clause">For
purposes of this clause, an auditor is considered independent if it is not
related to the person offering the program to the plan and is not affiliated
with any person providing investment options under the plan.</continuation-text></clause><clause id="H0C7A23AA98364A909D7ACA40E6E9D6BD"><enum>(vii)</enum><header>Disclosure</header><text>The
requirements of this clause are met with respect to the program, if—</text>
<subclause id="H2C521C17A9B341B7AC85B3D2B43EC671"><enum>(I)</enum><text>the investment adviser
provides to the fiduciary referred to in clause (v) and the participant or
beneficiary receiving investment advice under the program with regard to any
security or other property offered as an investment option, before providing
the advice, a written notification (which may consist of notification by means
of electronic communication)—</text>
<item id="H1A370DC2D06D479C975D884388412F31"><enum>(aa)</enum><text>of the role of any party
that has a material affiliation or contractual relationship with the investment
adviser in the development of the investment advice program and in the
selection of investment options available under the plan,</text>
</item><item id="H7A5F79552B7F42FD93A669A89507A0DF"><enum>(bb)</enum><text>of all fees or other
compensation relating to the advice that the investment 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>
</item><item id="H3017E83E1B814225AE2230F16B33EF6B"><enum>(cc)</enum><text>of any material
affiliation or contractual relationship of the investment adviser or affiliates
thereof in the security or other property,</text>
</item><item id="H6336E01E4D9D48C0BC74D0F064FE6487"><enum>(dd)</enum><text>of the manner, and under
what circumstances, any information relating to the participant or beneficiary
which is provided under the program will be used or disclosed,</text>
</item><item id="H49E1FA7F8A3A4967A178F645BAA4F061"><enum>(ee)</enum><text>of the types of services
provided by the investment adviser in connection with the provision of
investment advice by the investment adviser, and</text>
</item><item id="H7559012775A244D0B7A09B03433EEB6C"><enum>(ff)</enum><text>that a recipient of the
advice may separately arrange for the provision of advice by another adviser,
that could have no material affiliation with, and could receive no fees or
other compensation, in connection with the security or other property,
and</text>
</item></subclause><subclause id="H661AF749A9D046B4AF0C111F83A26189"><enum>(II)</enum><text>at all times during the
provision of advisory services to the participant or beneficiary, the
investment adviser—</text>
<item id="H716E899C3D254E28808C8C91640DE7FC"><enum>(aa)</enum><text>maintains the
information described in subclause (I) in accurate form and in the manner
described in clause (ix),</text>
</item><item id="H7F4D21F5B41C4E2082E74990AEE7E919"><enum>(bb)</enum><text>provides, without
charge, accurate information to the recipient of the advice no less frequently
than annually,</text>
</item><item id="H0EC2D114650C4AA089F6353CE7C581BE"><enum>(cc)</enum><text>provides, without
charge, accurate information to the recipient of the advice upon request of the
recipient, and</text>
</item><item id="HCDC841EF0999445BB720C2A3FC704993"><enum>(dd)</enum><text>provides, without
charge, accurate information to the recipient of the advice concerning any
material change to the information required to be provided to the recipient of
the advice at a time reasonably contemporaneous to the change in
information.</text>
</item></subclause></clause><clause id="H5F1FB113A1D643DEBA764E06E2552E7F"><enum>(viii)</enum><header>Other
conditions</header><text>The requirements of this clause are met with respect
to the program, if—</text>
<subclause id="H933CF3D52E664DE599C33006D476354B"><enum>(I)</enum><text>the investment adviser
provides appropriate disclosure, in connection with the sale, acquisition, or
holding of the security or other property with respect to which the investment
advice is provided under the program, in accordance with all applicable
securities laws,</text>
</subclause><subclause id="H29CB383BBC804ACB9D60E9A5FC48F460"><enum>(II)</enum><text>the sale, acquisition,
or holding occurs solely at the direction of the recipient of the
advice,</text>
</subclause><subclause id="HCF4EAB804229439A83A768EC3725D18C"><enum>(III)</enum><text>the compensation
received by the investment adviser and affiliates thereof in connection with
the sale, acquisition, or holding of the security or other property is
reasonable, and</text>
</subclause><subclause id="H481D62DE724C4EE08B689BFE3C078B81"><enum>(IV)</enum><text>the terms of the sale,
acquisition, or holding of the security or other property are at least as
favorable to the plan as an arm's length transaction would be.</text>
</subclause></clause><clause id="H3A4482146B7A423CB153F0521160E53F"><enum>(ix)</enum><header>Standards for
presentation of information</header>
<subclause id="HF63250DF5DB346439F5C03F04BEAD2E3"><enum>(I)</enum><header>In
general</header><text>The requirements of this clause are met with respect to
the program if the notification required to be provided to participants and
beneficiaries under clause (vii)(I) is written in a clear and conspicuous
manner and in a manner calculated to be understood by the average plan
participant and is sufficiently accurate and comprehensive to reasonably
apprise such participants and beneficiaries of the information required to be
provided in the notification.</text>
</subclause><subclause id="H01CBE8EED08A4ABA88A62A432ADB2A7B"><enum>(II)</enum><header>model form for
disclosure of fees and other compensation</header><text>The Secretary shall
issue a model form for the disclosure of fees and other compensation required
in clause (vii)(I)(bb) which meets the requirements of subclause (I).</text>
</subclause></clause><clause id="H0E6A9784074F401598B5E0654EBDFD88"><enum>(x)</enum><header>Maintenance for 6 years
of evidence of compliance</header><text>The requirements of this clause are met
with respect to the program if the investment adviser who provides advice under
the program maintains, for a period of not less than 6 years after the
provision of the advice, any records necessary for determining whether the
requirements of the preceding provisions of this subparagraph and of subsection
(b)(14) have been met. A failure to meet the requirements of this clause 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 investment adviser.</text>
</clause></subparagraph><subparagraph id="H7D6D93CEB87443F386FD2F173863D60D"><enum>(D)</enum><header>Definitions</header><text>For
purposes of this paragraph—</text>
<clause id="HA28023D6226D4D85AC948CB52522FA38"><enum>(i)</enum><header>Affiliate</header><text>The
term <quote>affiliate</quote> means, in connection with any other person, any
person directly or indirectly (through one or more intermediaries) controlling,
controlled by, or under common control with such other person, or any officer,
director, agent, or employee of, or partner with, such other person.</text>
</clause><clause id="H9415D69C305345CA91C2C97ADE725D76"><enum>(ii)</enum><header>Registered
representative</header><text>The term <quote>registered representative</quote>
of another entity means a person described in section 3(a)(18) of the
Securities Exchange Act of 1934 (15 U.S.C. 78c(a)(18)) (substituting the entity
for the broker or dealer referred to in such section) or a person described in
section 202(a)(17) of the Investment Advisers Act of 1940 (15 U.S.C.
80b–2(a)(17)) (substituting the entity for the investment adviser referred to
in such section).</text>
</clause><clause commented="no" id="H744E13AAAF1643699A5B0E6426F53F91"><enum>(iii)</enum><header>Plan investment
provider</header><text display-inline="yes-display-inline">The term <quote>plan
investment provider</quote> means any person (or any person affiliated with
such person) that creates or manages any investment in which any individual
account plan invests. Such term does not include—</text>
<subclause commented="no" id="HD31A7A47489745078E9E408D77B1BD7D"><enum>(I)</enum><text display-inline="yes-display-inline">a plan sponsor (or an affiliate thereof)
with respect to any investment created or managed by the plan sponsor (or
affiliate), if only employee benefit plans maintained by such plan sponsor or
an affiliate thereof invest in such investments,</text>
</subclause><subclause commented="no" id="HEB3460A8E0314B4AB735EAB63351B94C"><enum>(II)</enum><text>any person who makes the
investment available to the plan, or any participant or beneficiary in the
plan, as a part of a portfolio of investment options, to the extent that the
investment options are created and managed by a person who is not an affiliate
of the person making such portfolio available, and</text>
</subclause><subclause commented="no" id="HEED40576E5F34A3AB891FB6044978F10"><enum>(III)</enum><text>any person, solely by
reason of authorization by a participant or beneficiary in the plan of such
person to exercise control over the assets in the participant’s or
beneficiary’s account in such plan, if such assets are not invested in any
investments created or managed by such person (or an affiliate thereof).</text>
</subclause></clause><clause id="H7149FC0683F44F1D8F2FB070ECC663B3"><enum>(iv)</enum><header>Fees or other
compensation</header><text>The term <quote>fees or other compensation</quote>
includes money or any other thing of monetary value (for example, gifts,
awards, and trips) received, or to be received, directly from the plan or plan
sponsor or indirectly (i.e., from any source other than the plan or the plan
sponsor) by the investment adviser or any affiliate thereof in connection with
the advice to be provided pursuant to the arrangement or because of the
investment adviser's or any affiliate's position with the plan. Fees or other
compensation may be expressed in terms of a monetary amount, percentage of the
plan's assets, or per capita charge for each participant or beneficiary of the
plan. The manner in which compensation or fees are expressed shall contain
sufficient information to enable the plan fiduciary to evaluate the
reasonableness of such compensation or
fees.</text>
</clause></subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="H0C778C13F3EF495DA6AFF19748CA1256"><enum>(b)</enum><header>Fiduciary duties with
respect to investment advice</header>
<paragraph id="H022DA3C5F3744BA78000E4CB13D50DD0"><enum>(1)</enum><header>In
general</header><text>Section 404(a) of such Act (29 U.S.C. 1104(a)) is amended
by adding at the end the following new paragraph:</text>
<quoted-block changed="added" committee-id="HED00" display-inline="no-display-inline" id="HF7A0EADD40DD45B097D3900D59AF139F" reported-display-style="italic" style="traditional">
<paragraph id="HC3976AEB7E624A51856FC0573BE49701" indent="up1"><enum>(3)</enum><subparagraph commented="no" display-inline="yes-display-inline" id="H29D38C0853CA4708AAB820178E02B31E"><enum>(A)</enum><text>The fiduciary of an
individual account plan that permits a participant or beneficiary to direct the
investment of assets in the individual account shall not appoint, contract
with, or otherwise arrange for an investment adviser to provide investment
advice referred to in section 3(21)(A)(ii) to the plan or the participant or
beneficiary unless the investment adviser is an independent investment adviser
(as defined in section 3(43)).</text>
</subparagraph><subparagraph changed="added" committee-id="HED00" id="H87660FB30AB04DA29B2BA12C404F52E1" indent="up1" reported-display-style="italic"><enum>(B)</enum><text display-inline="yes-display-inline">The independent investment adviser
providing investment advice to a plan or to a participant or beneficiary shall
provide, before a reasonable period prior to the initial provision of the
advice, a written notification—</text>
<clause id="HCD37719991114BF0A69448601D7A94B9"><enum>(i)</enum><text>of the past performance
and historical rates of return of the investment options available with respect
to the plan and comparisons of such options to relevant benchmarks, and</text>
</clause><clause id="H6905C6CD35444824BAB4D19775C146F7"><enum>(ii)</enum><text>that the investment
adviser is acting as a fiduciary of the plan in connection with the provision
of the advice.</text>
</clause></subparagraph><subparagraph changed="added" committee-id="HED00" id="H597F11A329584EC58AE752C9E976CFC7" indent="up1" reported-display-style="italic"><enum>(C)</enum><text>Nothing in this paragraph
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 an independent investment adviser with whom the plan sponsor or other person
enters into an arrangement for the provision of investment advice referred to
in section 3(21)(A)(ii), except that any such requirement shall not be
construed to preclude reasonable reliance by the plan sponsor or other person
on the representation of any person that such person making the representation
meets the requirements of section 3(43)(A). The plan sponsor and any other
person who is a fiduciary (other than the independent investment adviser) has
no duty under this part to monitor the specific investment advice given by the
independent investment adviser to any particular recipient of the advice and
shall not be liable under this title for any loss, or by reason of any breach,
which results from such specific investment advice given by the independent
investment adviser.</text>
</subparagraph><subparagraph changed="added" committee-id="HED00" id="HCF6368EA03E1463C84F842C0899633EE" indent="up1" reported-display-style="italic"><enum>(D)</enum><text>Nothing in this part
shall be construed to preclude the use of plan assets to pay for reasonable
expenses in providing investment advice referred to in section
3(21)(A)(ii).</text>
</subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph><paragraph id="H02AEC90118E347C1A6EB37F3E3BA9608"><enum>(2)</enum><header>Report on prior
Advisory Opinions and exceptions</header><text>The Secretary of Labor shall, as
soon as practicable after the date of the enactment of this Act—</text>
<subparagraph id="H9B48D42668E348F7AF446F66B0831529"><enum>(A)</enum><text>review each Advisory
Opinion and exception described in section 404(a)(3)(E)(i) of the Employee
Retirement Income Security Act of 1974 (as added by this paragraph (1)) to
determine the extent to which such Advisory Opinion or exception fails to
adequately serve the interests of participants and beneficiaries and to be
adequately protective of the rights of participants and beneficiaries,
and</text>
</subparagraph><subparagraph id="H80691163498E4164A3824DD5BA8525E2"><enum>(B)</enum><text>submit a report to each
House of the Congress describing the extent of any such failure by any such
Advisory Opinion or exception.</text>
</subparagraph></paragraph></subsection><subsection id="H1D17C8A7B5D64565BDD34B5CC06203A8"><enum>(c)</enum><header>Conforming
amendments</header><text>Section 408 of such Act (29 U.S.C. 1108) is
amended—</text>
<paragraph id="HD5757D45FE8648F29D56CEC07247BAA0"><enum>(1)</enum><text>by striking subsection
(g); and</text>
</paragraph><paragraph id="HC51A6B45878E4664B2E9F8D60E710A9D"><enum>(2)</enum><text>by striking subsection
(b)(14)(B) and inserting the following:</text>
<quoted-block changed="added" committee-id="HED00" display-inline="no-display-inline" id="HA0EB2910C2234D089BE8D36EA4635E1E" reported-display-style="italic" style="traditional">
<subparagraph id="H1CF25BE232BB4E87917564372B1D70A9"><enum>(B)</enum><text display-inline="yes-display-inline">the investment advice is provided by an
independent investment adviser (as defined in section
3(43)).</text>
</subparagraph><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph></subsection><subsection id="H6D015143AB8A443A92123D74CBFF68BB"><enum>(d)</enum><header>Regulatory
authority</header><text display-inline="yes-display-inline">The Secretary of
Labor may issue regulations providing that an investment adviser can still be
considered as meeting the requirements of section 3(43)(B) of the Employee
Retirement Income Security Act of 1974 despite the receipt of a de minimus
amount of compensation that fails to meet the requirements of section
3(43)(B)(iii) of such Act due to the existence of previously existing
contracts.</text>
</subsection><subsection id="H3BDFB02289034BCAB1B435963F43092F"><enum>(e)</enum><header>Effective
date</header><text display-inline="yes-display-inline">The amendments made by
this section shall apply to plan years beginning after one year after the date
of the enactment of this Act.</text>
</subsection></section><section id="HDB195E43AAFD4FDA9F3FC348F76D9C65"><enum>203.</enum><header>Expansion of outreach
to promote retirement income savings to include promotion of education on
financial literacy with respect to investment for retirement</header><text display-inline="no-display-inline">Section 516 of the Employee Retirement
Income Security Act of 1974 (29 U.S.C. 1146) is amended—</text>
<paragraph id="H1F9E4AA6562C4163861E4A1F147BC589"><enum>(1)</enum><text>in subsection (b), by
inserting after <quote>creation of educational materials,</quote> the
following: <quote>promotion of education in financial literacy with respect to
investment for retirement as provided in subsection (e),</quote>;</text>
</paragraph><paragraph id="HF68493E201E8442E8215C647C94E9755"><enum>(2)</enum><text>by redesignating
subsection (e) as subsection (f); and</text>
</paragraph><paragraph id="HD8DB7E912DA346EE82E7EEEE8C0A98CC"><enum>(3)</enum><text>by inserting after
subsection (d) the following new subsection:</text>
<quoted-block changed="added" committee-id="HED00" display-inline="no-display-inline" id="H30740BCFEB58468FAD26D7A29306C974" reported-display-style="italic" style="OLC">
<subsection id="H9ABAECAE11DF4DDBA39F0D901C18EB55"><enum>(e)</enum><header>Promotion of education
in financial literacy with respect to investment for
retirement</header><text>The Secretary, in consultation with the Secretary of
Education and the Secretary of the Treasury, shall establish a program under
which—</text>
<paragraph id="H846D15326FA947EB8E75CD6483EA347A"><enum>(1)</enum><text>employees and the general
public are provided with information and materials—</text>
<subparagraph id="H31FE90D64ECA46F4B5205A908D2FABBB"><enum>(A)</enum><text>informing them about
resources available for attaining financial literacy with respect to investment
for retirement,</text>
</subparagraph><subparagraph id="H9B7429F3D21941B6808CF5CFC1392835"><enum>(B)</enum><text>effectively educating
them about the importance of, and appropriate techniques with respect to,
personal finance, saving for retirement, and choosing independent investment
advisers when managing their accounts under individual account plans,
and</text>
</subparagraph><subparagraph id="HE84DD44BF66C4A5281DA452703523C04"><enum>(C)</enum><text>effectively educating
them about debt obligations, the relationship of debt to savings, and the
potential consequences of debt with respect to saving for retirement,</text>
</subparagraph></paragraph><paragraph id="HD0C37BB01B4C495496435C2925FD0F04"><enum>(2)</enum><text display-inline="yes-display-inline">employers are enlisted to participate in
such program so as to assist in the attainment of the goals described in
subparagraphs (A), (B), and (C) of paragraph (1) with respect to their
employees, and</text>
</paragraph><paragraph id="H456DC757DE3646E5BB140731FE6ADFB6"><enum>(3)</enum><text>appropriate standards of
financial literacy of employees and the general public with respect to
investment for retirement are developed and published for utilization under
such
program.</text>
</paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph><paragraph id="HB13DD9B8F4C847B281BCEDDBCE7034AA"><enum>(4)</enum><header>Study and report to the
Congress</header>
<subparagraph id="H785241AC3E6A436EBF8AE26BA041F987"><enum>(A)</enum><header>In
general</header><text display-inline="yes-display-inline">The Secretary of
Labor shall conduct a survey of ongoing efforts by the Federal Government to
assist employees and the general public with attainment of financial literacy
with respect to investment for retirement and to educate them about the
importance of, and appropriate techniques with respect to, personal finance,
debt obligations, saving for retirement, and choosing independent investment
advisers when managing their accounts under individual account plans.</text>
</subparagraph><subparagraph id="HA24EE966BDC14433866808A976385B9D"><enum>(B)</enum><header>Report</header><text display-inline="yes-display-inline">Not later than 180 days after the date of
the enactment of this Act, the Secretary shall submit a report to each House of
the Congress setting forth the results of the Secretary’s survey conducted
pursuant to subparagraph (A), together with such recommendations as the
Secretary considers appropriate for improvement in efforts by the Federal
Government in assisting employees and the general public with attainment of
financial literacy in connection with investment for retirement and educating
them about the importance of, and appropriate techniques with respect to,
personal finance, debt obligations, saving for retirement, and choosing
independent investment advisers when managing their accounts under individual
account plans.</text>
</subparagraph></paragraph></section><enum>III</enum><header>Transitional Funding
Relief for Defined Benefit Plans</header>
<section id="HADFD7B44B7B24D90AE2BB6FF7C454A45"><enum>301.</enum><header>Election to use yield
curve</header>
<subsection id="H6AEA1831CE6B4C1E9B75F93CD359139B"><enum>(a)</enum><header>Amendment to
ERISA</header><text>The last sentence of clause (ii) of section 303(h)(2)(D) of
the Employee Retirement Income Security Act of 1974 (29 U.S.C.
1083(h)(2)(D)(ii)) is amended to read as follows: <quote>Such election, once
made, may be revoked only with the consent of the Secretary, except that any
election in effect for a plan with respect to a plan year beginning in 2009 may
be revoked for the plan year beginning in 2010 without such
consent.</quote>.</text>
</subsection><subsection id="H6477F64675514AF090041A7513385B25"><enum>(b)</enum><header>Amendment to
IRC</header><text>The last sentence of clause (ii) of section 430(h)(2)(D) of
the Internal Revenue Code of 1986 (relating to election to use yield curve) is
amended to read as follows: <quote>Such election, once made, may be revoked
only with the consent of the Secretary, except that any election in effect for
a plan with respect to a plan year beginning in 2009 may be revoked for the
plan year beginning in 2010 without such consent.</quote>.</text>
</subsection><subsection id="H95D208AB6CE74C7AAFEE37B89A8C54AC"><enum>(c)</enum><header>Effective
date</header><text>The amendments made by this section shall apply to plan
years beginning after December 31, 2009.</text>
</subsection></section><section id="H48BB99EC2A5D4C37A6F14835DA23E5E3"><enum>302.</enum><header>Effective date of
regulations</header><text display-inline="no-display-inline">The Secretary of
the Treasury shall—</text>
<paragraph id="H14863DE2B5B2469BA5D8EF2ED1BC96C5"><enum>(1)</enum><text>make the final
regulations issued under sections 206(g) and 303 of the Employee Retirement
Income Security Act of 1974 and sections 430 and 436 of the Internal Revenue
Code of 1986 effective no earlier than plan years beginning after December 31,
2009; and</text>
</paragraph><paragraph id="H7D3E5CB6954C43CE99EFECD58887D84A"><enum>(2)</enum><text display-inline="yes-display-inline">provide rules, for plan years beginning
before the effective date of such final regulations, under which compliance
with a reasonable interpretation of an applicable provision under section
206(g) or 303 of the Employee Retirement Income Security Act of 1974 or section
430 or 436 of the Internal Revenue Code of 1986 shall be treated as compliance
with such provision.</text>
</paragraph></section><section display-inline="no-display-inline" id="H43CA3C733FB14C479B6163961189C58C" section-type="subsequent-section"><enum>303.</enum><header>Clarification of
treatment of expenses</header>
<subsection id="HBB3AE393767F47E684F0E440743B1129"><enum>(a)</enum><header>Amendments to
ERISA</header>
<paragraph id="H17DA79D3EAFD48609C1E01E4A090310D"><enum>(1)</enum><header>In
general</header><text>Clause (ii) of section 303(b)(1)(A) of the Employee
Retirement Income Security Act of 1974 (29 U.S.C. 1083(b)(1)(A)(ii)) is amended
by striking <quote>plan-related expenses</quote> and inserting
<quote>plan-related administrative expenses</quote>.</text>
</paragraph><paragraph id="HCF6D3549ED9F4945AC82EB301AAB3DD8"><enum>(2)</enum><header>Conforming
amendment</header><text>Subclause (II) of section 303(i)(2)(A)(i) of such Act
(29 U.S.C. 1083(i)(2)(A)(i)(II)) is amended by striking <quote>plan-related
expenses</quote> and inserting <quote>plan-related administrative
expenses</quote>.</text>
</paragraph></subsection><subsection id="HEE70BDFE670F45E1A9F2002AFFAA1C00"><enum>(b)</enum><header>Amendments to
IRC</header>
<paragraph id="H7BBBD494077F4467A1954962C6A86AB1"><enum>(1)</enum><header>In
general</header><text>Clause (ii) of section 430(b)(1)(A) of the Internal
Revenue Code of 1986 (relating to target normal cost) is amended by striking
<quote>plan-related expenses</quote> and inserting <quote>plan-related
administrative expenses</quote>.</text>
</paragraph><paragraph id="HDF3F0D8E3EFE41B181C4841417DCBCDE"><enum>(2)</enum><header>Conforming
amendment</header><text>Subclause (II) of section 430(i)(2)(A)(i) of such Code
is amended by striking <quote>plan-related expenses</quote> and inserting
<quote>plan-related administrative expenses</quote>.</text>
</paragraph></subsection><subsection id="HB090EE8B1744474389C980D28619912B"><enum>(c)</enum><header>Effective
date</header><text>The amendments made by this section shall take effect as if
included in the enactment of paragraphs (1)(A), (1)(F)(i), (2)(A), and
(2)(F)(i) of section 101(b) of the Worker, Retiree, and Employer Recovery Act
of 2008 (Public Law 110-458; 122 Stat. 5093).</text>
</subsection></section><section id="H3D8C1653FCFD432794FD17B0118E87A8"><enum>304.</enum><header>Information
reporting</header>
<subsection id="H026BCB8BD1B548D5A4D3695BEC0F6EB1"><enum>(a)</enum><header>In
general</header><text>Paragraph (1) of section 4010(b) of the Employee
Retirement Income Security Act of 1974 (29 U.S.C. 1310(b)(1)) is amended to
read as follows:</text>
<quoted-block changed="added" committee-id="HED00" id="H438A5DA7651E461EA291071407C72A38" reported-display-style="italic" style="OLC">
<paragraph id="H78046874095842489920E33CDEDBB69E"><enum>(1)</enum><text display-inline="yes-display-inline">either of the following requirements are
met:</text>
<subparagraph display-inline="no-display-inline" id="HEDDDE62CF6574954BDAC9C43373EF794"><enum>(A)</enum><text>the funding target
attainment percentage (as defined in subsection (d)) at the end of the
preceding plan year of a plan maintained by the contributing sponsor or any
member of its controlled group is less thqan 80 percent; or</text>
</subparagraph><subparagraph id="H8C2643C7C3FC44FBB547F3DB160EC68D"><enum>(B)</enum><text>the aggregate unfunded
vested benefits (as determined under section 4006(a)(3)(E)(iii)) of plans
maintained by the contributing sponsor and the members of its controlled group
exceed $50,000,000 (disregarding plans with no unfunded vested
benefits);</text>
</subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="H7A0DD35950FA4D0DA646B14F3417C584"><enum>(b)</enum><header>Effective
date</header><text>The amendment made by this section shall apply to years
beginning after 2009.</text>
</subsection></section><section display-inline="no-display-inline" id="HD15C3CA9AC9B4B2FB76390CF5C4A8227" section-type="subsequent-section"><enum>305.</enum><header>5-year extension of
automatic amortization extension period for multiemployer plans</header>
<subsection id="H3060315325AE429D9976DFAD0BB30887"><enum>(a)</enum><header>ERISA
amendments</header><text display-inline="yes-display-inline">Section 304(d) of
the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1084(d)) is
amended—</text>
<paragraph id="H9DA337B05181443DA4C19EAAEA4D24E3"><enum>(1)</enum><text>in paragraph (1)(A), by
striking <quote>5 years</quote> and inserting <quote>10 years</quote>;
and</text>
</paragraph><paragraph id="H0CE2165FA4634DFBBAC13CAD36CBF8A5"><enum>(2)</enum><text>in paragraph (2)(A), by
striking <quote>10 years</quote> and inserting <quote>15 years</quote>.</text>
</paragraph></subsection><subsection id="H2565C51DB4CF4B7FB2950784BC2CFEC7"><enum>(b)</enum><header>IRC
amendments</header><text display-inline="yes-display-inline">Section 431(d) of
the Internal Revenue Code of 1986 (relating to extension of amortization
periods for multiemployer plans) is amended—</text>
<paragraph id="H0F9D581379B34E5C86D0D91AB3EFAF88"><enum>(1)</enum><text>in paragraph (1)(A), by
striking <quote>5 years</quote> and inserting <quote>10 years</quote>;
and</text>
</paragraph><paragraph id="H88A5ECECCE05468CB7F3C6B458C5708D"><enum>(2)</enum><text>in paragraph (2)(A), by
striking <quote>10 years</quote> and inserting <quote>15 years</quote>.</text>
</paragraph></subsection><subsection id="HF1106E243FCA42FA98942031490D83FF"><enum>(c)</enum><header>Effective
date</header><text>The amendments made by this section shall apply with respect
to applications for extension filed on or after the date of the enactment of
this Act.</text>
</subsection></section><section display-inline="no-display-inline" id="H83513812E22C4D0A9EE632A6454655ED" section-type="subsequent-section"><enum>306.</enum><header>Pension plan
maintained by Christian Schools International treated as church plan</header>
<subsection id="H04B0FAC94B52414C8EF974CB96A90F93"><enum>(a)</enum><header>In
general</header><text display-inline="yes-display-inline">For purposes of title
I of the Employee Retirement Income Security Act of 1974 and the Internal
Revenue Code of 1986, any pension plan maintained by Christian Schools
International as of January 1, 2009, shall be treated as a church plan within
the meaning of section 3(33) of such Act and section 414(e) of such Code which
is maintained by an organization described in section 3(33)(C)(ii)(II) of such
Act and section 414(e)(3)(B)(ii) of such Code.</text>
</subsection><subsection id="HD4DD46E973DA4270B83C7632ED27248C"><enum>(b)</enum><header>Effective
date</header><text display-inline="yes-display-inline">This section shall apply
to plan years beginning on or after January 1, 2007.</text>
</subsection></section><section id="H92DD4028EF1248A5A751EE0CDE39D39C"><enum>307.</enum><header>Special rule for
determining adequate consideration in connection with the purchase and sale of
qualifying employer securities</header>
<subsection id="HC8B7FDDC9BC64464AE3CDFCE5DDAF04D"><enum>(a)</enum><header>In
general</header><text display-inline="yes-display-inline">Section 3(18) of the
Employee Retirement Income Security Act of 1974 (29 U.S.C. 1002(18)) is
amended—</text>
<paragraph id="H670B6ADC4E5446CF83528FE2350BD0EC"><enum>(1)</enum><text display-inline="yes-display-inline">by redesignating clauses (i) and (ii) of
subparagraph (A) as subclauses (I) and (II), respectively, and by redesignating
subparagraphs (A) and (B) as clauses (i) and (ii), respectively;</text>
</paragraph><paragraph id="HB40DDCA9EDB64FF2B00AFB9D3948E338"><enum>(2)</enum><text display-inline="yes-display-inline">by inserting <quote>(A)</quote> after
<quote>(18)</quote>; and</text>
</paragraph><paragraph id="H0E2A43CBD5A14CE5AFC4C9ED591F90AE"><enum>(3)</enum><text display-inline="yes-display-inline">by adding at the end the following new
subparagraph:</text>
<quoted-block changed="added" committee-id="HED00" display-inline="no-display-inline" id="H4CC666F81018427E9926721F874843EE" reported-display-style="italic" style="traditional">
<subparagraph id="HDACE550441314DD59062F8038A5C2F62" indent="up2"><enum>(B)</enum><text display-inline="yes-display-inline">In the case of a plan described in section
407(d)(3)(A) which was in existence on the date of the enactment of this Act,
if the valuation set for the purchase or sale by the plan of a qualifying
employer security (as defined in section 407(d)(5)) is set at a price which has
not been found by the Secretary to be in violation of this Act and which is
book value computed annually in accordance with generally accepted accounting
principles and the provisions of the plan, and if the valuations set for all
prior purchases or sales by the plan of qualifying employer securities have
been consistently so priced, then all such valuations for qualifying employer
securities shall be deemed to be adequate consideration within the meaning of
subparagraph
(A).</text>
</subparagraph><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph></subsection><subsection id="HC0E7E54CAD944135AE4D18DDA227F16C"><enum>(b)</enum><header>Effective
date</header><text display-inline="yes-display-inline">The amendments made by
this section shall apply to purchases and sales of qualifying employer
securities on or after September 2, 1974.</text>
</subsection></section><section display-inline="no-display-inline" id="H8AC051A739B24AB0A47B214C74D36151" section-type="subsequent-section"><enum>308.</enum><header>Extended period for
single-employer defined benefit plans to amortize the shortfall amortization
base for 2009 and 2010</header>
<subsection id="HA977ED2E66B249789B19D6A43A9B8CF0"><enum>(a)</enum><header>Amendments to
ERISA</header>
<paragraph id="H52643FA85B5941CCAB32BE48845F76A6"><enum>(1)</enum><header>In
general</header><text>Paragraph (2) of section 303(c) of the Employee
Retirement Income Security Act of 1974 is amended by adding at the end the
following new subparagraph:</text>
<quoted-block changed="added" committee-id="HED00" display-inline="no-display-inline" id="H972DBB0121444E48BF5D1F9685651E6D" reported-display-style="italic" style="OLC">
<subparagraph id="H2C5D99BAC9304577A405538B35F781DA"><enum>(D)</enum><header>Special rule for 2009
and 2010</header><text display-inline="yes-display-inline">In the case of the
shortfall amortization base of the plan for any plan year beginning in 2009 or
2010 (hereafter in this subparagraph referred to as the <quote>base
year</quote>)—</text>
<clause id="HC92CB9FC99DB418A9956FA3BA408EBDE"><enum>(i)</enum><header>Determination of
installments</header><text display-inline="yes-display-inline">The shortfall
amortization installments are—</text>
<subclause id="H10F2D36153A84E83BFE7D351774D8036"><enum>(I)</enum><text>in the case of the last 7
plan years in the 9-plan-year period beginning with the base year, the amounts
necessary to amortize the shortfall amortization base of the plan for the base
year in level annual installments over such last 7 plan years, and</text>
</subclause><subclause id="H6A50159310784D28B288755F78E00097"><enum>(II)</enum><text>in the case of the first
2 plan years in such 9-plan-year period, interest on such shortfall
amortization base (determined as provided in subparagraph (C)).</text>
</subclause></clause><clause id="HFBCC433E6CEB47368D6452F65F82FA87"><enum>(ii)</enum><header>Shortfall
installment</header><text>The shortfall amortization installment for any plan
year in the 9-plan-year period under clause (i) with respect to such shortfall
amortization base is the annual installment determined under clause (i) for
that year for that
base.</text>
</clause></subparagraph><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph><paragraph id="H0A9461D15CBA422980E01ED088C0A5B5"><enum>(2)</enum><header>Conforming
amendment</header><text display-inline="yes-display-inline">Paragraph (1) of
section 303(c) of such Act is amended by striking <quote>the shortfall
amortization bases for such plan year and each of the 6 preceding plan
years</quote> and inserting <quote>any shortfall amortization base which has
not been fully amortized under this subsection</quote>.</text>
</paragraph></subsection><subsection display-inline="no-display-inline" id="H97329000DA22447497734F22F896523A"><enum>(b)</enum><header>Effective
date</header><text>The amendments made by this section shall apply to plan
years beginning after December 31, 2008.</text>
</subsection></section>
May 28, 2010
Discharged; committed to the Committee of the Whole House on
the State of the Union and ordered to be printed