[Congressional Bills 115th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2823 Reported in House (RH)]

<DOC>





                                                 Union Calendar No. 443
115th CONGRESS
  2d Session
                                H. R. 2823

                      [Report No. 115-371, Part I]

 To amend the Employee Retirement Income Security Act of 1974 and the 
   Internal Revenue Code of 1986 to ensure that retirement investors 
    receive advice in their best interests, and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                              June 8, 2017

  Mr. Roe of Tennessee (for himself, Mr. Roskam, Mr. Walberg, and Mr. 
  Wilson of South Carolina) introduced the following bill; which was 
   referred to the Committee on Education and the Workforce, and in 
    addition to the Committee on Ways and Means, for a period to be 
subsequently determined by the Speaker, in each case for consideration 
  of such provisions as fall within the jurisdiction of the committee 
                               concerned

                            October 25, 2017

  Reported from the Committee on Education and the Workforce with an 
                               amendment
 [Strike out all after the enacting clause and insert the part printed 
                               in italic]

                            October 25, 2017

   Referral to the Committee on Ways and Means extended for a period 
                 ending not later than January 10, 2018
[For text of introduced bill, see copy of bill as introduced on June 8, 
                                 2017]

                            January 10, 2018

   Referral to the Committee on Ways and Means extended for a period 
                 ending not later than February 2, 2018

                            February 2, 2018

   Referral to the Committee on Ways and Means extended for a period 
                  ending not later than March 5, 2018


                             March 5, 2018

   Additional sponsors: Mr. Grothman, Mr. Sam Johnson of Texas, Mr. 
 Marshall, Mr. Sessions, Mr. LaHood, Mr. Barton, Mr. Latta, Mr. Bishop 
  of Michigan, Mr. Rokita, Mr. Allen, Mr. Renacci, Mr. Mitchell, Mr. 
 Fleischmann, Mr. Duncan of Tennessee, Mr. Kelly of Pennsylvania, Mr. 
   Barletta, Mr. Budd, Ms. Stefanik, Mr. Paulsen, Mr. Marchant, Mr. 
Thompson of Pennsylvania, Ms. Foxx, Mr. Guthrie, Mr. Francis Rooney of 
       Florida, Mr. Ferguson, Mr. Estes of Kansas, and Mr. Messer

                             March 5, 2018

The Committee on Ways and Means discharged; committed to the Committee 
 of the Whole House on the State of the Union and ordered to be printed

_______________________________________________________________________

                                 A BILL


 
 To amend the Employee Retirement Income Security Act of 1974 and the 
   Internal Revenue Code of 1986 to ensure that retirement investors 
    receive advice in their best interests, and for other purposes.


 


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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Affordable Retirement Advice for 
Savers Act''.

SEC. 2. REPEAL OF FIDUCIARY DEFINITION RULEMAKING.

    (a) In General.--The Fiduciary Definition rulemaking described in 
subsection (b) is repealed and shall have no force or effect, and the 
regulations and prohibited transaction exemptions amended or repealed 
by such rulemaking are restored or revived as if such rulemaking had 
not been issued.
    (b) Fiduciary Definition Rulemaking.--The Fiduciary Definition 
rulemaking described in this subsection consists of the following:
            (1) The final rule of the Department of Labor titled 
        ``Definition of the Term `Fiduciary'; Conflict of Interest 
        Rule--Retirement Investment Advice'' published April 8, 2016 
        (81 Fed. Reg. 20946).
            (2) The ``Best Interest Contract Exemption'' published 
        April 8, 2016 (81 Fed. Reg. 21002), and the technical 
        correction published July 11, 2016 (81 Fed. Reg. 44773).
            (3) The ``Class Exemption for Principal Transactions in 
        Certain Assets Between Investment Advice Fiduciaries and 
        Employee Benefit Plans and IRAs'' published April 8, 2016 (81 
        Fed. Reg. 21089), and the technical correction published July 
        11, 2016 (81 Fed. Reg. 44784).
            (4) The ``Amendment to Prohibited Transaction Exemption 
        (PTE) 75-1, Part V, Exemptions From Prohibitions Respecting 
        Certain Classes of Transactions Involving Employee Benefit 
        Plans and Certain Broker-Dealers, Reporting Dealers and Banks'' 
        published April 8, 2016 (81 Fed. Reg. 21139).
            (5) The ``Amendment to and Partial Revocation of Prohibited 
        Transaction Exemption (PTE) 86-128 for Securities Transactions 
        Involving Employee Benefit Plans and Broker-Dealers; Amendment 
        to and Partial Revocation of PTE 75-1, Exemptions From 
        Prohibitions Respecting Certain Classes of Transactions 
        Involving Employee Benefits Plans and Certain Broker-Dealers, 
        Reporting Dealers and Banks'' published April 8, 2016 (81 Fed. 
        Reg. 21181).
            (6) The ``Amendments to Class Exemptions 75-1, 77-4, 80-83 
        and 83-1'' published April 8, 2016 (81 Fed. Reg. 21208).
            (7) The ``Amendment to and Partial Revocation of Prohibited 
        Transaction Exemption (PTE) 84-24 for Certain Transactions 
        Involving Insurance Agents and Brokers, Pension Consultants, 
        Insurance Companies, and Investment Company Principal 
        Underwriters'' published April 8, 2016 (81 Fed. Reg. 21147).

SEC. 3. RULES RELATING TO THE PROVISION OF INVESTMENT ADVICE.

    (a) Amendments to the Employee Retirement Income Security Act of 
1974.--
            (1) Definition of investment advice.--Section 3(21) of the 
        Employee Retirement Income Security Act of 1974 (29 U.S.C. 
        1002(21)) is amended by adding at the end the following:
    ``(C)(i) For purposes of clause (ii) of subparagraph (A), the term 
`investment advice' means a recommendation communicated electronically, 
on paper, or orally that--
            ``(I) relates to--
                    ``(aa) the advisability of acquiring, holding, 
                disposing, or exchanging any moneys or other property 
                of a plan by the plan, plan participants, or plan 
                beneficiaries, including any recommendation whether to 
                take a distribution of benefits from such plan or any 
                recommendation relating to the investment of any moneys 
                or other property of such plan to be distributed from 
                such plan;
                    ``(bb) the management of moneys or other property 
                of such plan, including recommendations relating to the 
                management of moneys or other property to be 
                distributed from such plan; or
                    ``(cc) the advisability of retaining or ceasing to 
                retain a person who would receive a fee or other 
                compensation for providing any of the types of advice 
                described in this subclause; and
            ``(II) is rendered pursuant to--
                    ``(aa) a written acknowledgment, provided 
                electronically or on paper, of the obligation of the 
                advisor to comply with section 404 with respect to the 
                provision of such recommendation; or
                    ``(bb) a mutual agreement, arrangement, or 
                understanding, which may include limitations on scope, 
                timing, and responsibility to provide ongoing 
                monitoring or advice services, between the person 
                making such recommendation and the plan that such 
                recommendation is individualized to the plan and such 
                plan intends to materially rely on such recommendation 
                in making investment or management decisions with 
                respect to any moneys or other property of such plan.
    ``(ii) For purposes of clause (i)(II)(bb), any disclaimer of a 
mutual agreement, arrangement, or understanding shall state only the 
following: `This communication is not individualized to you, and you 
are not intended to rely materially on this communication in making 
investment or management decisions.'. Such disclaimer shall not be 
effective unless such disclaimer is in writing and is communicated in a 
clear and prominent manner and an objective person would reasonably 
conclude that, based on all the facts and circumstances, there was not 
a mutual agreement, arrangement, or understanding.
    ``(iii) For purposes of clause (i)(II)(bb), a communication shall 
not be considered to be a recommendation made pursuant to a mutual 
agreement, arrangement, or understanding, if such communication 
contains the disclaimer required by clause (ii), and--
            ``(I) it is provided in conjunction with clear and 
        prominent disclosure in writing to a plan, plan participant, or 
        beneficiary that the person providing the communication is 
        doing so in its marketing or sales capacity, including any 
        communication regarding the terms and conditions of the 
        engagement of the person providing the communication, and that 
        the person is not intending to provide investment advice within 
        the meaning of this subparagraph or to otherwise act as a 
        fiduciary to the plan;
            ``(II) the person providing the communication is a current 
        or potential counterparty or service provider to the plan in 
        connection with any transaction based on the communication, but 
        only if--
                    ``(aa) the plan is represented, in connection with 
                such transaction, by a plan fiduciary that is 
                independent of the person providing the communication, 
                and, except in the case of a swap (as defined in 
                section 1a of the Commodity Exchange Act (7 U.S.C. 1a) 
                or security-based swap (as defined in section 3(a) of 
                the Securities Exchange Act (15 U.S.C. 78c(a)))), 
                independent of the plan sponsor; and
                    ``(bb) prior to such transaction, the independent 
                plan fiduciary represents in writing to the person 
                providing the communication that it is aware that the 
                person has a financial interest in the transaction and 
                that it has determined that the person is not intending 
                to provide investment advice within the meaning of this 
                subparagraph or to otherwise act as a fiduciary to the 
                plan subject to section 404;
            ``(III) the person providing the communication is an 
        employee of any sponsoring employer or affiliate or employee 
        organization who provides the communication to the plan for no 
        fee or other compensation other than the employee's normal 
        compensation;
            ``(IV) the person providing the communication discloses in 
        writing to the plan fiduciary that the person is not 
        undertaking to provide investment advice as a fiduciary to the 
        plan subject to section 404 and the communication consists 
        solely of--
                    ``(aa) making available to the plan, without regard 
                to the individualized needs of the plan, securities or 
                other property or investment products through a 
                platform or similar mechanism from which a plan 
                fiduciary may select or monitor investment 
                alternatives; or
                    ``(bb) in connection with a platform or similar 
                mechanism described in item (aa)--
                            ``(AA) identifying investment alternatives 
                        that meet objective criteria specified by the 
                        plan, such as criteria concerning expense 
                        ratios, fund sizes, types of asset, or credit 
                        quality;
                            ``(BB) providing objective financial data 
                        and comparisons with independent benchmarks to 
                        the plan; or
                            ``(CC) identifying a sample set of 
                        investment alternatives based on the plan's 
                        stated criteria in response to an inquiry from 
                        a plan fiduciary;
            ``(V) the communication consists solely of valuation 
        information; or
            ``(VI) the communication consists solely of--
                    ``(aa) information described in Department of Labor 
                Interpretive Bulletin 96-1 (29 C.F.R. 2509.96-1, as in 
                effect on January 1, 2015), regardless of whether such 
                education is provided to a plan or plan fiduciary or a 
                participant or beneficiary;
                    ``(bb) information provided to participants or 
                beneficiaries regarding the factors to consider in 
                deciding whether to elect to receive a distribution 
                from a plan or an individual retirement plan (as 
                defined in section 7701(a)(37) of the Internal Revenue 
                Code of 1986) and whether to roll over such 
                distribution to a plan or an individual retirement plan 
                (as defined in section 7701(a)(37) of the Internal 
                Revenue Code of 1986), so long as any examples of 
                different distribution alternatives are accompanied by 
                all material facts and assumptions on which the 
                examples are based; or
                    ``(cc) any additional information treated as 
                education by the Secretary.''.
            (2) Exemption relating to investment advice.--Section 
        408(b) of the Employee Retirement Income Security Act of 1974 
        is amended by adding at the end the following:
            ``(21)(A) Any transaction, including a contract for 
        service, between a person providing investment advice described 
        in section 3(21)(A)(ii) and the advice recipient in connection 
        with such investment advice, and any transaction consisting of 
        the provision of such investment advice, if the following 
        conditions are satisfied:
                    ``(i) No more than reasonable compensation is paid 
                (as determined under section 408(b)(2)) for such 
                investment advice.
                    ``(ii) If the investment advice is based on a 
                limited range of investment options (which may consist, 
                in whole or in part, of proprietary products), such 
                limitations shall be clearly disclosed to the advice 
                recipient prior to any transaction based on the 
                investment advice in the form of a notice that only 
                states the following: `This recommendation is based on 
                a limited range of investment options, and the same or 
                similar investments may be available at a different 
                cost (greater or lesser) from other sources.'.
                    ``(iii) If the investment advice may result in 
                variable compensation to the person providing the 
                investment advice (or any affiliate of such person), 
                the receipt of such compensation shall be clearly 
                disclosed to the advice recipient prior to any 
                transaction based on the investment advice. For 
                purposes of this subparagraph, clear disclosure of 
                variable compensation shall include, in a manner 
                calculated to be understood by the average individual, 
                each of the following:
                            ``(I) A notice that states only the 
                        following: `This recommendation may result in 
                        varying amounts of fees or other compensation 
                        to the person providing the recommendation (or 
                        its affiliate), and the same or similar 
                        investments may be available at a different 
                        cost (greater or lesser) from other sources.'. 
                        Any regulations or administrative guidance 
                        implementing this subclause may not require 
                        this notice to be updated more than annually.
                            ``(II) A description of any fee or other 
                        compensation that is directly or indirectly 
                        payable to the person (or its affiliate) by the 
                        advice recipient with respect to such 
                        transaction (expressed as an amount, formula, 
                        percentage of assets, per capita charge, or 
                        estimate or range of such compensation).
                            ``(III) A description of the types and 
                        ranges of any compensation that are reasonably 
                        expected to be directly or indirectly payable 
                        to the person (or its affiliate) by any third 
                        party in connection with such transaction 
                        (expressed as an amount, formula, percentage of 
                        assets, per capita charge, or estimate or range 
                        of such compensation).
                            ``(IV) Upon request of the advice 
                        recipient, a disclosure of the specific amounts 
                        of compensation described in clause (iii) that 
                        the person will receive in connection with the 
                        particular transaction (expressed as an amount, 
                        formula, percentage of assets, per capita 
                        charge, or estimate of such compensation).
            ``(B) No recommendation will fail to satisfy the conditions 
        described in clauses (i) through (iii) of subparagraph (A) 
        solely because the person, acting in good faith and with 
        reasonable diligence, makes an error or omission in disclosing 
        the information specified in such clauses, provided that the 
        person discloses the correct information to the advice 
        recipient as soon as practicable, but not later than 30 days 
        from the date on which the person knows of such error or 
        omission.
            ``(C) Any notice provided pursuant to a requirement under 
        clause (ii) or clause (iii)(I) of subparagraph (A) shall have 
        no effect on any other notice otherwise required without regard 
        to this title, and shall be provided in addition to, and not in 
        lieu of, any other such notice.
            ``(D) For purposes of this paragraph, the term `affiliate' 
        has the meaning given in subsection (g)(11)(B).''.
    (b) Amendments to the Internal Revenue Code of 1986.--
            (1) Exemption for investment advice which is best interest 
        recommendation.--Section 4975(d) of the Internal Revenue Code 
        of 1986 is amended by striking ``or'' at the end of paragraph 
        (22), by striking the period at the end of paragraph (23) and 
        inserting ``, or'', and by inserting after paragraph (23) the 
        following:
            ``(24) provision of investment advice by a fiduciary to a 
        plan, plan participant, or beneficiary with respect to the 
        plan, which is a best interest recommendation or a transaction 
        connected to such advice.''.
            (2) Investment advice; best interest recommendation.--
        Section 4975(e) of such Code is amended by adding at the end 
        the following:
            ``(10) Investment advice.--
                    ``(A) In general.--For purposes of this section, 
                the term `investment advice' means a recommendation, 
                communicated electronically, on paper, or orally, 
                that--
                            ``(i) relates to--
                                    ``(I) the advisability of 
                                acquiring, holding, disposing, or 
                                exchanging any moneys or other property 
                                of a plan by the plan, plan 
                                participants, or plan beneficiaries, 
                                including any recommendation whether to 
                                take a distribution of benefits from 
                                such plan or any recommendation 
                                relating to the investment of any 
                                moneys or other property of such plan 
                                to be distributed from such plan;
                                    ``(II) the management of moneys or 
                                other property of such plan, including 
                                recommendations relating to the 
                                management of moneys or other property 
                                to be distributed from such plan; or
                                    ``(III) the advisability of 
                                retaining or ceasing to retain a person 
                                who would receive a fee or other 
                                compensation for providing any of the 
                                types of advice described in this 
                                subclause; and
                            ``(ii) is rendered pursuant to--
                                    ``(I) a written acknowledgment, 
                                provided electronically or on paper, 
                                that the person is a fiduciary with 
                                respect to the provision of such 
                                recommendation; or
                                    ``(II) a mutual agreement, 
                                arrangement, or understanding which may 
                                include limitations on scope, timing, 
                                and responsibility to provide ongoing 
                                monitoring or advice services, between 
                                the person making such recommendation 
                                and the plan, plan participant, or 
                                beneficiary that such recommendation is 
                                individualized to the plan, plan 
                                participant, or beneficiary and such 
                                plan, plan participant, or beneficiary 
                                intends to materially rely on such 
                                recommendation in making investment or 
                                management decisions with respect to 
                                any moneys or other property of such 
                                plan.
                    ``(B) Disclaimer of a mutual agreement, 
                arrangement, or understanding.--For purposes of 
                subparagraph (A)(ii)(II), any disclaimer of a mutual 
                agreement, arrangement, or understanding shall state 
                only the following: `This communication is not 
                individualized to you, and you are not intended to rely 
                materially on this communication in making investment 
                or management decisions.'. Such disclaimer shall not be 
                effective unless such disclaimer is in writing and is 
                communicated in a clear and prominent manner and an 
                objective person would reasonably conclude that, based 
                on all the facts and circumstances, there was not a 
                mutual agreement, arrangement, or understanding.
                    ``(C) When recommendation treated as made pursuant 
                to a mutual agreement, arrangement, or understanding.--
                For purposes of subparagraph (A)(ii)(II), a 
                communication shall not be treated as a recommendation 
                made pursuant to a mutual agreement, arrangement, or 
                understanding, if such communication contains the 
                disclaimer required by subparagraph (B), and--
                            ``(i) Seller's exception.--The 
                        communication is provided in conjunction with 
                        clear and prominent disclosure in writing to a 
                        plan, plan participant, or beneficiary that the 
                        person providing the communication is doing so 
                        in its marketing or sales capacity, including 
                        any communication regarding the terms and 
                        conditions of the engagement of the person 
                        providing the communication, and that the 
                        person is not intending to provide investment 
                        advice within the meaning of this subparagraph 
                        or to otherwise act as a fiduciary to the plan 
                        or under the obligations of a best interest 
                        recommendation.
                            ``(ii) Certain counterparties or service 
                        providers.--The person providing the 
                        communication is a current or potential 
                        counterparty or service provider to the plan in 
                        connection with any transaction based on the 
                        communication, but only if--
                                    ``(I) the plan is represented, in 
                                connection with such transaction, by a 
                                plan fiduciary that is independent of 
                                the person providing the communication, 
                                and, except in the case of a swap (as 
                                defined in section 1a of the Commodity 
                                Exchange Act (7 U.S.C. 1a) or security-
                                based swap (as defined in section 3(a) 
                                of the Securities Exchange Act (15 
                                U.S.C. 78c(a)))), independent of the 
                                plan sponsor; and
                                    ``(II) prior to entering into such 
                                transaction, the independent plan 
                                fiduciary represents in writing to the 
                                person providing the communication that 
                                it is aware that the person has a 
                                financial interest in the transaction 
                                and that it has determined that the 
                                person is not intending to provide 
                                investment advice within the meaning of 
                                this subparagraph or to otherwise act 
                                as a fiduciary to the plan, plan 
                                participants, or plan beneficiaries.
                            ``(iii) Employees of a plan sponsor.--The 
                        person providing the communication is an 
                        employee of any sponsoring employer or 
                        affiliate or employee organization who provides 
                        the communication to the plan for no fee or 
                        other compensation other than the employee's 
                        normal compensation.
                            ``(iv) Platform providers selection and 
                        monitoring assistance.--The person providing 
                        the communication discloses in writing to the 
                        plan fiduciary that the person is not 
                        undertaking to provide investment advice as a 
                        fiduciary (within the meaning of this 
                        paragraph) or under the obligations of a best 
                        interest recommendation and the communication 
                        consists solely of--
                                    ``(I) making available to the plan, 
                                plan participants, or plan 
                                beneficiaries, without regard to the 
                                individualized needs of the plan, plan 
                                participants, or plan beneficiaries, 
                                securities or other property or 
                                investment products through a platform 
                                or similar mechanism from which a plan 
                                fiduciary may select or monitor 
                                investment alternatives; or
                                    ``(II) in connection with a 
                                platform or similar mechanism described 
                                in subclause (I)--
                                            ``(aa) identifying 
                                        investment alternatives that 
                                        meet objective criteria 
                                        specified by the plan, such as 
                                        criteria concerning expense 
                                        ratios, fund sizes, types of 
                                        asset, or credit quality;
                                            ``(bb) providing objective 
                                        financial data and comparisons 
                                        with independent benchmarks to 
                                        the plan; or
                                            ``(cc) identifying a sample 
                                        set of investment alternatives 
                                        based on the plan's stated 
                                        criteria in response to an 
                                        inquiry from a plan fiduciary.
                            ``(v) Valuation.--The communication 
                        consists solely of valuation information.
                            ``(vi) Financial education.--The 
                        communication consists solely of--
                                    ``(I) information described in 
                                Department of Labor Interpretive 
                                Bulletin 96-1 (29 C.F.R. 2509.96-1, as 
                                in effect on January 1, 2015), 
                                regardless of whether such education is 
                                provided to a plan or plan fiduciary or 
                                a participant or beneficiary;
                                    ``(II) information provided to 
                                participants or beneficiaries regarding 
                                the factors to consider in deciding 
                                whether to elect to receive a 
                                distribution from a plan and whether to 
                                roll over such distribution to a plan, 
                                so long as any examples of different 
                                distribution alternatives are 
                                accompanied by all material facts and 
                                assumptions on which the examples are 
                                based; or
                                    ``(III) any additional information 
                                treated as education by the Secretary.
            ``(11) Best interest recommendation.--For purposes of this 
        subsection--
                    ``(A) In general.--The term `best interest 
                recommendation' means a recommendation--
                            ``(i) for which no more than reasonable 
                        compensation is paid (as determined under 
                        subsection (d)(2));
                            ``(ii) provided by a person acting with the 
                        care, skill, prudence, and diligence under the 
                        circumstances then prevailing that a prudent 
                        person would exercise based on--
                                    ``(I) the information obtained 
                                through the reasonable diligence of the 
                                person regarding factors such as the 
                                advice recipient's age; and
                                    ``(II) any other information that 
                                the advice recipient discloses to the 
                                person in connection with receiving 
                                such recommendation; and
                            ``(iii) where the person places the 
                        interests of the plan or advice recipient above 
                        its own.
                    ``(B) Investment options; variable compensation.--A 
                best interest recommendation may include a 
                recommendation that--
                            ``(i) is based on a limited range of 
                        investment options (which may consist, in whole 
                        or in part, of proprietary products), but only 
                        if any such limitations shall be clearly 
                        disclosed to the advice recipient prior to any 
                        transaction based on the investment advice in 
                        the form of a notice that only states the 
                        following: `This recommendation is based on a 
                        limited range of investment options, and the 
                        same or similar investments may be available at 
                        a different cost (greater or lesser) from other 
                        sources.'; or
                            ``(ii) may result in variable compensation 
                        to the person providing the recommendation (or 
                        any affiliate of such person), but only if the 
                        receipt of such compensation shall be clearly 
                        disclosed to the advice recipient prior to any 
                        transaction based on the investment advice.
                    ``(C) Clear disclosure of variable compensation.--
                For purposes of this paragraph, clear disclosure of 
                variable compensation shall include, in a manner 
                calculated to be understood by the average individual, 
                each of the following:
                            ``(i) A notice that states only the 
                        following: `This recommendation may result in 
                        varying amounts of fees or other compensation 
                        to the person providing the recommendation (or 
                        its affiliate), and the same or similar 
                        investments may be available at a different 
                        cost (greater or lesser) from other sources.'. 
                        Any regulations or administrative guidance 
                        implementing this clause may not require this 
                        notice to be updated more than annually.
                            ``(ii) A description of any fee or other 
                        compensation that is directly or indirectly 
                        payable to the person (or its affiliate) by the 
                        advice recipient with respect to such 
                        transaction (expressed as an amount, formula, 
                        percentage of assets, per capita charge, or 
                        estimate or range of such compensation).
                            ``(iii) A description of the types and 
                        ranges of any compensation that are reasonably 
                        expected to be directly or indirectly payable 
                        to the person (or its affiliate) by any third 
                        party in connection with such transaction 
                        (expressed as an amount, formula, percentage of 
                        assets, per capita charge, or estimate or range 
                        of such compensation).
                            ``(iv) Upon request of the advice 
                        recipient, a disclosure of the specific amounts 
                        of compensation described in clause (iii) that 
                        the person will receive in connection with the 
                        particular transaction (expressed as an amount, 
                        formula, percentage of assets, per capita 
                        charge, or estimate of such compensation).
                    ``(D) Definition of affiliate.--For purposes of 
                this paragraph, the term `affiliate' has the meaning 
                given in subsection (f)(8)(J)(ii).
                    ``(E) Correction of certain errors and omissions.--
                A recommendation shall not fail to be a best interest 
                recommendation solely because a person who, acting in 
                good faith and with reasonable diligence, makes an 
                error or omission in disclosing the information 
                specified in subparagraph (B), if the person discloses 
                the correct information to the advice recipient as soon 
                as practicable but not later than 30 days from the date 
                on which the person knows of such error or omission.
                    ``(F) Special rule.--Any notice provided pursuant 
                to a requirement under subparagraph (B)(i) or 
                subparagraph (C)(i) shall have no effect on any other 
                notice otherwise required without regard to this title, 
                and shall be provided in addition to, and not in lieu 
                of, any other such notice.''.
            (3) Failures relating to best interest recommendation.--
                    (A) Correction.--Section 4975(f)(5) of such Code is 
                amended--
                            (i) by striking ``(5) Correction.--The 
                        terms'' and inserting:
            ``(5) Correction.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), the terms'', and
                            (ii) by adding at the end the following:
                    ``(B) Determination of `correction' and `correct' 
                with respect to best interest advice recommendations.--
                In the case of a prohibited transaction arising by the 
                failure of investment advice to be a best interest 
                recommendation, the terms `correction' and `correct' 
                mean the payment to, or reimbursement of, actual 
                damages of the plan, plan participants, or plan 
                beneficiaries resulting directly from the plan's, plan 
                participant's, or plan beneficiary's reliance on such 
                investment advice, if any, that have not otherwise been 
                paid or reimbursed to the plan, plan participants, or 
                plan beneficiaries, including payments and 
                reimbursements made pursuant to subparagraph (A) if 
                such amount is greater than the amount determined under 
                subparagraph (A).''.
                    (B) Amount involved for purposes of excise tax.--
                The first sentence of section 4975(f)(4) of such Code 
                is amended by striking ``excess compensation.'' and 
                inserting ``excess compensation, and in the case of a 
                prohibited transaction arising by the failure of 
                investment advice to be a best interest recommendation, 
                the amount involved shall be the amount paid to the 
                person providing the advice (or its affiliate, as 
                defined in paragraph (8)(J)(ii)) that has not been paid 
                or reimbursed to the plan, plan participants, or plan 
                beneficiaries, including payments and reimbursements 
                made pursuant to paragraph (5).''.
    (c) Effective Date.--The amendments made by subsections (a) and (b) 
shall take effect on the date of the enactment of this Act and shall 
apply with respect to communications provided or recommendations made 
on or after 2 years after such date.
    (d) Grandfathered Transactions and Services.--The amendments made 
by subsections (a) and (b) shall not apply to any service or 
transaction rendered, entered into, or for which a person has been 
compensated prior to the date on which the amendments become effective 
under subsection (c).
    (e) Transition.--Until such time as regulations or other guidance 
are issued to carry out the amendments made by subsections (a) and (b), 
a plan or a fiduciary shall be treated as meeting the requirements of 
such amendments if the plan or fiduciary, as the case may be, complies 
with a reasonable good faith interpretation of such amendments.
                                                 Union Calendar No. 443

115th CONGRESS

  2d Session

                               H. R. 2823

                      [Report No. 115-371, Part I]

_______________________________________________________________________

                                 A BILL

 To amend the Employee Retirement Income Security Act of 1974 and the 
   Internal Revenue Code of 1986 to ensure that retirement investors 
    receive advice in their best interests, and for other purposes.

_______________________________________________________________________

                             March 5, 2018

The Committee on Ways and Means discharged; committed to the Committee 
 of the Whole House on the State of the Union and ordered to be printed