[Congressional Record (Bound Edition), Volume 156 (2010), Part 8]
[Senate]
[Pages 11650-11658]
[From the U.S. Government Publishing Office, www.gpo.gov]




                           TEXT OF AMENDMENTS

  SA 4394. Mr. WHITEHOUSE (for himself, Mr. Bennet, Mr. Brown of 
Massachusetts, Mr. Brown of Ohio, Mr. Corker, Mr. Durbin, Mrs. 
Feinstein, Mr. Graham, Mr. Kaufman, Ms. Landrieu, Mr. Leahy, Mr. 
LeMieux, Mrs. McCaskill, Mr. Menendez, Mr. Nelson of Florida, Mr. 
Pryor, Mr. Schumer, Mr. Sessions, Mr. Specter, and Mr. Warner) 
submitted an amendment intended to be proposed to amendment SA 4386 
proposed by Mr. Reid (for Mr. Baucus) to the bill H.R. 4213, to amend 
the Internal Revenue Code of 1986 to extend certain expiring 
provisions, and for other purposes; which was ordered to lie on the 
table; as follows:

       On page 407, between lines 18 and 19, insert the following:

TITLE X--REGISTRATION OF AGENTS OF FOREIGN MANUFACTURERS AUTHORIZED TO 
                       ACCEPT SERVICE OF PROCESS

     SEC. 1001. FINDINGS.

       Congress makes the following findings:
       (1) Each year, many people in the United States are injured 
     by defective products manufactured or produced by foreign 
     entities and imported into the United States.
       (2) Both consumers and businesses in the United States have 
     been harmed by injuries to people in the United States caused 
     by defective products manufactured or produced by foreign 
     entities.
       (3) People in the United States injured by defective 
     products manufactured or produced by foreign entities often 
     have difficulty recovering damages from the foreign 
     manufacturers and producers responsible for such injuries.
       (4) The difficulty described in paragraph (3) is caused by 
     the obstacles in bringing a foreign manufacturer or producer 
     into a United States court and subsequently enforcing a 
     judgment against that manufacturer or producer.
       (5) Obstacles to holding a responsible foreign manufacturer 
     or producer liable for an injury to a person in the United 
     States undermine the purpose of the tort laws of the United 
     States.
       (6) The difficulty of applying the tort laws of the United 
     States to foreign manufacturers and producers puts United 
     States manufacturers and producers at a competitive 
     disadvantage because United States manufacturers and 
     producers must--
       (A) abide by common law and statutory safety standards; and
       (B) invest substantial resources to ensure that they do so.
       (7) Foreign manufacturers and producers can avoid the 
     expenses necessary to make their products safe if they know 
     that they will not be held liable for violations of United 
     States product safety laws.
       (8) Businesses in the United States undertake numerous 
     commercial relationships with foreign manufacturers, exposing 
     the businesses to additional tort liability when foreign 
     manufacturers or producers evade United States courts.
       (9) Businesses in the United States engaged in commercial 
     relationships with foreign manufacturers or producers often 
     cannot vindicate their contractual rights if such 
     manufacturers or producers seek to avoid responsibility in 
     United States courts.
       (10) One of the major obstacles facing businesses and 
     individuals in the United States who are injured and who seek 
     compensation for economic or personal injuries caused by 
     foreign manufacturers and producers is the challenge of 
     serving process on such manufacturers and producers.
       (11) An individual or business injured in the United States 
     by a foreign company must rely on a foreign government to 
     serve process when that company is located in a country that 
     is a signatory to the Convention on the Service Abroad of 
     Judicial and Extrajudicial Documents in Civil or Commercial 
     Matters done at The Hague November 15, 1965 (20 UST 361; TIAS 
     6638).
       (12) An injured person in the United States must rely on 
     the cumbersome system of letters rogatory to effect service 
     in a country that did not sign the Convention on the Service 
     Abroad of Judicial and Extrajudicial Documents in Civil or 
     Commercial Matters. These countries do not have an 
     enforceable obligation to serve process as requested.
       (13) The procedures described in paragraphs (11) and (12) 
     add time and expense to litigation in the United States, 
     thereby discouraging or frustrating meritorious lawsuits 
     brought by persons injured in the United States against 
     foreign manufacturers and producers.
       (14) Foreign manufacturers and producers often seek to 
     avoid judicial consideration of their actions by asserting 
     that United States courts lack personal jurisdiction over 
     them.
       (15) The due process clauses of the fifth amendment to and 
     section 1 of the fourteenth amendment to the Constitution 
     govern United States courts' personal jurisdiction over 
     defendants.
       (16) The due process clauses described in paragraph (15) 
     are satisfied when a defendant consents to the jurisdiction 
     of a court.
       (17) United States markets present many opportunities for 
     foreign manufacturers.
       (18) In choosing to export products to the United States, a 
     foreign manufacturer or producer subjects itself to the laws 
     of the United States. Such a foreign manufacturer or producer 
     thereby acknowledges that it is subject to the personal 
     jurisdiction of the State and Federal courts in at least one 
     State.

     SEC. 1002. SENSE OF CONGRESS.

       It is the sense of Congress that--
       (1) foreign manufacturers and producers whose products are 
     sold in the United States should not be able to avoid 
     liability simply because of difficulties relating to serving 
     process upon them;
       (2) to avoid such lack of accountability, foreign 
     manufacturers and producers of foreign products distributed 
     in the United States should be required, by regulation, to 
     register an agent in the United States who is authorized to 
     accept service of process for such manufacturer or producer;
       (3) it is unfair to United States consumers and businesses 
     that foreign manufacturers and producers often seek to avoid 
     judicial consideration of their actions by asserting that 
     United States courts lack personal jurisdiction over them;
       (4) those who benefit from exporting products to United 
     States markets should expect to be subject to the 
     jurisdiction of at least one court within the United States;
       (5) exporting products to the United States should be 
     understood as consent to the accountability that the legal 
     system of the United States ensures for all manufacturers and 
     producers, foreign, and domestic;
       (6) exporters recognize the scope of opportunities 
     presented to them by United States markets but also should 
     recognize that products imported into the United States must 
     satisfy Federal and State safety standards established by 
     statute, regulation, and common law;
       (7) foreign manufacturers should recognize that they are 
     responsible for the contracts they enter into with United 
     States companies;
       (8) foreign manufacturers should act responsibly and 
     recognize that they operate

[[Page 11651]]

     within the constraints of the United States legal system when 
     they export products to the United States;
       (9) United States laws and the laws of United States 
     trading partners should not put burdens on foreign 
     manufacturers and producers that do not apply to domestic 
     companies;
       (10) it is fair to ensure that foreign manufacturers, whose 
     products are distributed in commerce in the United States, 
     are subject to the jurisdiction of State and Federal courts 
     in at least one State because all United States manufacturers 
     are subject to the jurisdiction of the State and Federal 
     courts in at least one State; and
       (11) it should be understood that, by registering an agent 
     for service of process in the United States, the foreign 
     manufacturer or producer acknowledges consent to the 
     jurisdiction of the State in which the registered agent is 
     located.

     SEC. 1003. DEFINITIONS.

       In this title:
       (1) Applicable agency.--The term ``applicable agency'' 
     means, with respect to covered products--
       (A) described in subparagraphs (A) and (B) of paragraph 
     (4), the Food and Drug Administration;
       (B) described in paragraph (4)(C), the Consumer Product 
     Safety Commission;
       (C) described in subparagraphs (D) and (E) of paragraph 
     (4), the Environmental Protection Agency; and
       (D) described in subparagraph (F) of paragraph (4)--
       (i) the Food and Drug Administration, if the item is 
     intended to be a component part of a product described in 
     subparagraphs (A) and (B) of paragraph (4);
       (ii) the Consumer Product Safety Commission, if the item is 
     intended to be a component part of a product described in 
     paragraph (4)(C); and
       (iii) the Environmental Protection Agency, if the item is 
     intended to be a component part of a product described in 
     subparagraphs (D) and (E) of paragraph (4).
       (2) Commerce.--The term ``commerce'' means trade, traffic, 
     commerce, or transportation--
       (A) between a place in a State and any place outside of the 
     State; or
       (B) which affects trade, traffic, commerce, or 
     transportation described in subparagraph (A).
       (3) Commissioner of u.s. customs and border protection.--
     The term ``Commissioner of U.S. Customs and Border 
     Protection'' means the Commissioner responsible for U.S. 
     Customs and Border Protection of the Department of Homeland 
     Security.
       (4) Covered product.--The term ``covered product'' means 
     any of the following:
       (A) Drugs, devices, and cosmetics, as such terms are 
     defined in section 201 of the Federal Food, Drug, and 
     Cosmetic Act (21 U.S.C. 321).
       (B) A biological product, as such term is defined in 
     section 351(i) of the Public Health Service Act (42 U.S.C. 
     262(i)).
       (C) A consumer product, as such term is used in section 
     3(a) of the Consumer Product Safety Act (15 U.S.C. 2052).
       (D) A chemical substance or new chemical substance, as such 
     terms are defined in section 3 of the Toxic Substances 
     Control Act (15 U.S.C. 2602).
       (E) A pesticide, as such term is defined in section 2 of 
     the Federal Insecticide, Fungicide, and Rodenticide Act (7 
     U.S.C. 136).
       (F) An item intended to be a component part of a product 
     described in subparagraph (A), (B), (C), (D), or (E) but is 
     not yet a component part of such product.
       (5) Distribute in commerce.--The term ``distribute in 
     commerce'' means to sell in commerce, to introduce or deliver 
     for introduction into commerce, or to hold for sale or 
     distribution after introduction into commerce.

     SEC. 1004. REGISTRATION OF AGENTS OF FOREIGN MANUFACTURERS 
                   AUTHORIZED TO ACCEPT SERVICE OF PROCESS IN THE 
                   UNITED STATES.

       (a) Registration.--
       (1) In general.--Not later than 180 days after the date of 
     the enactment of this Act and except as otherwise provided in 
     this subsection, the head of each applicable agency shall 
     require foreign manufacturers and producers of covered 
     products distributed in commerce to establish a registered 
     agent in the United States who is authorized to accept 
     service of process on behalf of such manufacturer or 
     producer--
       (A) for the purpose of any civil or regulatory proceeding 
     in State or Federal court relating--
       (i) to a covered product; and
       (ii) to--

       (I) commerce in the United States;
       (II) an injury or damage suffered in the United States; or
       (III) conduct within the United States; and

       (B) if such service is made in accord with the State or 
     Federal rules for service of process in the State of the 
     civil or regulatory proceeding.
       (2) Location.--The head of each applicable agency shall 
     require that an agent of a foreign manufacturer or producer 
     registered under this subsection with respect to a covered 
     product be located in a State with a substantial connection 
     to the importation, distribution, or sale of the covered 
     product.
       (3) Minimum size.--This subsection shall only apply to 
     foreign manufacturers and producers that manufacture or 
     produce covered products in excess of a minimum value or 
     quantity the head of the applicable agency shall prescribe by 
     rule for purposes of this section. Such rules may include 
     different minimum values or quantities for different 
     subcategories of covered products prescribed by the head of 
     the applicable agency for purposes of this section.
       (b) Registry of Agents of Foreign Manufacturers.--
       (1) In general.--The Secretary of Commerce shall, in 
     cooperation with each head of an applicable agency, establish 
     and keep up to date a registry of agents registered under 
     subsection (a).
       (2) Availability.--The Secretary of Commerce shall make the 
     registry established under paragraph (1) available--
       (A) to the public through the Internet website of the 
     Department of Commerce; and
       (B) to the Commissioner of U.S. Customs and Border 
     Protection.
       (c) Consent to Jurisdiction.--A foreign manufacturer or 
     producer of covered products that registers an agent under 
     this section thereby consents to the personal jurisdiction of 
     the State or Federal courts of the State in which the 
     registered agent is located for the purpose of any civil or 
     regulatory proceeding relating--
       (1) to a covered product; and
       (2) to--
       (A) commerce in the United States;
       (B) an injury or damage suffered in the United States; or
       (C) conduct within the United States.
       (d) Declarations.--
       (1) In general.--Not later than 180 days after the date of 
     the enactment of this Act, any person importing a covered 
     product manufactured outside the United States shall provide 
     a declaration to U.S. Customs and Border Protection that--
       (A) the person has made appropriate inquiry, including 
     seeking appropriate documentation from the exporter of the 
     covered product and consulting the registry of agents of 
     foreign manufacturers described in subsection (b); and
       (B) to the best of the person's knowledge, with respect to 
     each importation of a covered product, the foreign 
     manufacturer or producer of the product has established a 
     registered agent in the United States as required under 
     subsection (a).
       (2) Penalties.--Any person who fails to provide a 
     declaration required under paragraph (1), or files a false 
     declaration, shall be subject to any applicable civil or 
     criminal penalty, including seizure and forfeiture, that may 
     be imposed under the customs laws of the United States or 
     title 18, United States Code, with respect to the importation 
     of a covered product.
       (e) Regulations.--Not later than the date described in 
     subsection (a)(1), the Secretary of Commerce, the 
     Commissioner of U.S. Customs and Border Protection, and each 
     head of an applicable agency shall prescribe regulations to 
     carry out this section, including the establishment of 
     minimum values and quantities under subsection (a)(3).

     SEC. 1005. STUDY ON REGISTRATION OF AGENTS OF FOREIGN FOOD 
                   PRODUCERS AUTHORIZED TO ACCEPT SERVICE OF 
                   PROCESS IN THE UNITED STATES.

       Not later than 1 year after the date of the enactment of 
     this Act, the Secretary of Agriculture and the Commissioner 
     of Food and Drugs shall jointly--
       (1) complete a study on the feasibility and advisability of 
     requiring foreign producers of food distributed in commerce 
     to establish a registered agent in the United States who is 
     authorized to accept service of process on behalf of such 
     producers for the purpose of all civil and regulatory actions 
     in State and Federal courts; and
       (2) submit to Congress a report on the findings of the 
     Secretary with respect to such study.

     SEC. 1006. STUDY ON REGISTRATION OF AGENTS OF FOREIGN 
                   MANUFACTURERS AND PRODUCERS OF COMPONENT PARTS 
                   WITHIN COVERED PRODUCTS.

       Not later than 1 year after the date of the enactment of 
     this Act, the head of each applicable agency shall--
       (1) complete a study on determining feasible and advisable 
     methods of requiring manufacturers or producers of a 
     component parts within covered products manufactured or 
     produced outside the United States and distributed in 
     commerce to establish registered agents in the United States 
     who are authorized to accept service of process on behalf of 
     such manufacturers or producers for the purpose of all civil 
     and regulatory actions in State and Federal courts; and
       (2) submit to Congress a report on the findings of the head 
     of the applicable agency with respect to the study.

     SEC. 1007. RELATIONSHIP WITH OTHER LAWS.

       Nothing in this title shall affect the authority of any 
     State to establish or continue in effect a provision of State 
     law relating to service of process or personal jurisdiction, 
     except to the extent that such provision of law is 
     inconsistent with the provisions of this title, and then only 
     to the extent of such inconsistency.

[[Page 11652]]


                                 ______
                                 
  SA 4395. Mr. HARKIN (for himself and Mr. Kohl) submitted an amendment 
intended to be proposed to amendment SA 4386 proposed by Mr. Reid (for 
Mr. Baucus) to the bill H.R. 4213, to amend the Internal Revenue Code 
of 1986 to extend certain expiring provisions, and for other purposes; 
which was ordered to lie on the table; as follows:

       At the end of title III, insert the following:

                       Subtitle C--Fee Disclosure

     SEC. 321. SHORT TITLE OF SUBTITLE.

       This subtitle may be cited as the ``Defined Contribution 
     Fee Disclosure Act of 2010''.

     SEC. 322. AMENDMENTS TO THE EMPLOYEE RETIREMENT INCOME 
                   SECURITY ACT OF 1974.

       (a) Requirements Relating to Service Providers and Plan 
     Administrators of Individual Account Plans.--
       (1) In general.--Part 1 of subtitle B of title I of the 
     Employee Retirement Income Security Act of 1974 is amended--
       (A) by redesignating section 111 (29 U.S.C. 1031) as 
     section 113; and
       (B) by inserting after section 110 (29 U.S.C. 1030) the 
     following new sections:

     ``SEC. 111. REQUIREMENT TO PROVIDE NOTICE OF PLAN FEE 
                   INFORMATION TO PLAN ADMINISTRATORS.

       ``(a) Initial Statement of Services Provided and Revenues 
     Received.--
       ``(1) In general.--In any case in which a service provider 
     enters into a contract or arrangement to provide services to 
     an individual account plan, the service provider shall, 
     before entering into such contract or arrangement, provide to 
     the plan administrator a single written statement which 
     includes, with respect to the first plan year covered under 
     such contract or arrangement, the following information:
       ``(A) A detailed description of the services which will be 
     provided to the plan by the service provider, the amount of 
     total expected annual revenue with respect to such services, 
     the manner in which such revenue will be collected, and the 
     extent to which such revenue varies between specific 
     investment options.
       ``(B)(i) In the case of a service provider who is providing 
     recordkeeping services with respect to any investment option, 
     such information as is necessary for the plan administrator 
     to satisfy the requirements of subparagraphs (B)(ii)(IV) and 
     (C) of section 105(a)(2) and paragraphs (1) and (3) of 
     section 112(a) with respect to such option, including 
     specifying the method used by the service provider in 
     disclosing or estimating expenses under subparagraphs (C)(iv) 
     and (E) of section 105(a)(2).
       ``(ii) To the extent provided in regulations issued by the 
     Secretary, clause (i) shall not apply in the case of a 
     service provider described in such clause if the service 
     provider receives a written notification from the plan 
     administrator that the information described in such clause 
     in connection with the investment option is provided by 
     another service provider pursuant to a contract or 
     arrangement to provide services to the plan.
       ``(C) A statement indicating--
       ``(i) the identity of any investment options offered under 
     the plan with respect to which the service provider provides 
     substantial investment, trustee, custodial, or administrative 
     services, and
       ``(ii) in the case of any investment option, whether the 
     service provider expects to receive any component of total 
     expected annual revenue described in paragraph (2)(A)(ii)(II) 
     with respect to such option and the amount of any such 
     component.
       ``(D) The portion of total expected annual revenue which is 
     properly allocable to each of the following:
       ``(i) Administration and recordkeeping.
       ``(ii) Investment management.
       ``(iii) Other services or amounts not described in clause 
     (i) or (ii).
       ``(2) Definition of total expected annual revenue.--For 
     purposes of this section--
       ``(A) In general.--The term `total expected annual revenue' 
     means, with respect to any plan year--
       ``(i) any amount expected to be received during such plan 
     year from the plan (including amounts paid from participant 
     accounts), any participant or beneficiary, or any plan 
     sponsor in connection with the contract or arrangement 
     referred to in paragraph (1), and
       ``(ii) any amount not taken into account under clause (i) 
     which is expected to be received during such plan year by the 
     service provider in connection with--

       ``(I) plan administration, recordkeeping, consulting, 
     management, or investment or other service activities 
     undertaken by the service provider with respect to the plan, 
     or
       ``(II) plan administration, recordkeeping, consulting, 
     management, or investment or other service activities 
     undertaken by any other person with respect to the plan.

       ``(B) Expressed as dollar amount or percentage of assets.--
     Total expected annual revenue and any amount indicated under 
     paragraph (1)(C)(ii) may be expressed as a dollar amount or 
     as a percentage of assets (or a combination thereof), as 
     appropriate. To the extent that total expected annual revenue 
     is expressed as a percentage of assets, such percentage shall 
     be properly allocated among clauses (i), (ii), and (iii) of 
     paragraph (1)(D).
       ``(C) Provision of fee schedule for certain participant 
     initiated transactions.--In the case of amounts expected to 
     be received from participants or beneficiaries under the plan 
     (or from an account of a participant or beneficiary) as a fee 
     or charge in connection with a transaction initiated by the 
     participant (other than loads, commissions, brokerage fees, 
     and other investment related transactions)--
       ``(i) such amounts shall not be taken into account in 
     determining total expected annual revenue, and
       ``(ii) the service provider shall provide to the plan 
     administrator, as part of the statement referred to in 
     paragraph (1), a fee schedule which describes each such fee 
     or charge, the amount thereof, and the manner in which such 
     amount is collected.
       ``(3) Estimations.--In determining under this section any 
     amount which is to be disclosed by the service provider, the 
     service provider may provide a reasonable estimate of such 
     amount but only if the service provider indicates that such 
     amount disclosed is an estimate. Any such estimate shall be 
     based on reasonable assumptions specified in writing to the 
     plan administrator.
       ``(4) Disclosure of different pricing of investment 
     options.--In the case of investment options with more than 
     one share class or price level, the Secretary shall prescribe 
     regulations for the disclosure of the different share classes 
     or price levels available as part of the statement in 
     paragraph (1). Such regulations shall provide guidance with 
     respect to the disclosure of the basis for qualifying for 
     such share classes or price levels, which may include amounts 
     invested, number of participants, or other factors.
       ``(5) Disclosure of investment transaction costs.--To the 
     extent provided in regulations issued by the Secretary, a 
     service provider shall separately disclose the transaction 
     costs (including sales commissions) for each investment 
     option for the preceding year or the plan's allocable share 
     of such costs for the preceding year. The Secretary shall, 
     before making a determination to issue any final rule under 
     this subsection, conduct, and report to the Congress on the 
     results of, a study regarding the feasibility and benefits of 
     requiring the disclosure of transaction costs to plan 
     sponsors.
       ``(b) Annual Statements.--With respect to each plan year 
     after the plan year covered by the statement described in 
     subsection (a), the service provider shall provide the plan 
     administrator a single written statement which includes the 
     information described in subsection (a) with respect to such 
     subsequent plan year.
       ``(c) Material Change Statements.--In the case of any event 
     or other change during a plan year which causes the 
     information included in any statement described in subsection 
     (a) or (b) with respect to such plan year to become 
     materially incorrect, the service provider shall provide the 
     plan administrator a written statement providing the 
     corrected information not later than 30 days after the 
     service provider knows, or exercising reasonable diligence 
     would have known, of such event or other change.
       ``(d) Time and Manner of Providing Statement and Other 
     Materials.--The statement referred to in subsections (a)(1) 
     and (b) shall be made at such time and in such manner as the 
     Secretary may provide. Other materials required to be 
     provided under this section shall be provided in such manner 
     as the Secretary may provide. All information included in 
     such statements and other materials shall be presented in a 
     manner which is easily understood by the typical plan 
     administrator.
       ``(e) Exception for Small Service Providers.--The 
     requirements of this section shall not apply with respect to 
     any contract or arrangement for services provided with 
     respect to an individual account plan for any plan year if--
       ``(1) the total annual revenue expected by the service 
     provider to be received with respect to the plan for such 
     plan year is less than $5,000, and
       ``(2) the service provider provides a written statement to 
     the plan administrator that the total annual revenue expected 
     by the service provider to be received with respect to the 
     plan is less than $5,000.

     Service providers who expect to receive de minimis annual 
     revenue from the plan need not provide the written statement 
     described in paragraph (2). The Secretary may by regulation 
     or other guidance adjust the dollar amount specified in this 
     subsection.
       ``(f) Definition of Service Provider.--For purposes of this 
     section--
       ``(1) In general.--The term `service provider' includes any 
     person providing administration, recordkeeping, consulting, 
     investment management services, or investment advice to an 
     individual account plan under a contract or arrangement.
       ``(2) Controlled groups treated as one service provider.--
     All persons which would be treated as a single employer under 
     subsection (b) or (c) of section 414 of the Internal Revenue 
     Code of 1986 if section 1563(a)(1) of such Code were 
     applied--
       ``(A) except as provided by subparagraph (B), by 
     substituting `more than 50 percent' for `at least 80 percent' 
     each place it appears therein, or

[[Page 11653]]

       ``(B) for purposes of subsection (a)(1)(C)(i), by 
     substituting `at least 20 percent' for `at least 80 percent' 
     each place it appears therein,

     shall be treated as one person for purposes of this section.

     ``SEC. 112. REQUIREMENT TO PROVIDE NOTICE TO PARTICIPANTS OF 
                   PLAN FEE INFORMATION.

       ``(a) Disclosures to Participants and Beneficiaries.--
       ``(1) Advance notice of available investment options.--
       ``(A) In general.--The plan administrator of an applicable 
     individual account plan shall provide to the participant or 
     beneficiary notice of the investment options available under 
     the plan before--
       ``(i) the earliest date provided for under the plan for the 
     participant's initial investment of any contribution made on 
     behalf of such participant, and
       ``(ii) the effective date of any change in the list of 
     investment options available under the plan, unless such 
     advance notice is impracticable, and in such case, as soon as 
     is practicable.
       ``(B) Information included in notice.--The notice required 
     under subparagraph (A) shall--
       ``(i) set forth, with respect to each available investment 
     option--

       ``(I) the name of the option,
       ``(II) a general description of the option's investment 
     objectives and principal investment strategies, principal 
     risk and return characteristics, and the name of the option's 
     investment manager,
       ``(III) whether the investment option is designed to be a 
     comprehensive, stand-alone investment for retirement that 
     provides varying degrees of long-term appreciation and 
     capital preservation through a mix of equity and fixed income 
     exposures,
       ``(IV) the extent to which the investment option is 
     actively managed or passively managed in relation to an index 
     and the difference between active management and passive 
     management,
       ``(V) where, and the manner in which, additional plan-
     specific, option-specific, and generally available investment 
     information may be obtained, and
       ``(VI) 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 consideration of 
     other key factors, including the risk level of the option, 
     the investment objectives of the option, historical returns 
     of the option, and the participant's personal investment 
     objectives,

       ``(ii) include a statement of the right under paragraph (2) 
     of participants and beneficiaries to request, and a 
     description of how a participant or beneficiary may request, 
     a copy of the statements received by the plan administrator 
     under section 111 with respect to the plan, and
       ``(iii) include the plan fee comparison chart described in 
     subparagraph (C).
       ``(C) Plan fee comparison chart.--
       ``(i) In general.--

       ``(I) In general.--The notice provided under this paragraph 
     shall include a plan fee comparison chart consisting of a 
     comparison of the service and investment charges that will or 
     could be assessed against the account of the participant or 
     beneficiary with respect to the plan year.
       ``(II) Expressed as dollar amount or formula.--For purposes 
     of this subparagraph, such charges shall be provided in the 
     form of a dollar amount or as a formula (such as a percentage 
     of assets), as appropriate.

       ``(ii) Categorization of charges.--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:

       ``(I) Asset-based charges specific to investment.--Charges 
     that vary depending on the investment options selected by the 
     participant or beneficiary, including the annual operating 
     expenses of the investment option and investment-specific 
     asset-based charges (such as loads, commissions, brokerage 
     fees, exchange fees, redemption fees, and surrender charges). 
     Except as provided by the Secretary in regulations under this 
     section, the information relating to such charges shall 
     include a statement noting any charges for 1 or more 
     investment options which pay for services other than 
     investment management.
       ``(II) Recurring asset-based charges not specific to 
     investment.--Charges that are assessed as a percentage of the 
     total assets in the account of the participant or 
     beneficiary, regardless of the investment option selected.
       ``(III) Administrative and transaction-based charges.--
     Administration and transaction-based charges, including fees 
     charged to participants to cover plan administration, 
     compliance, and recordkeeping costs, plan loan origination 
     fees, possible redemption fees, and possible surrender 
     charges, that are not assessed as a percentage of the total 
     assets in the account and are either automatically deducted 
     each year or result from certain transactions engaged in by 
     the participant or beneficiary.
       ``(IV) Other charges.--Any other charges which may be 
     deducted from participants' or beneficiaries' accounts and 
     which are not described in subclauses (I), (II), and (III).

       ``(iii) Fees and historical returns.--The plan fee 
     comparison chart shall include--

       ``(I) the historical returns, net of fees and expenses, for 
     the previous year, 5 years, and 10 years (or for the period 
     since inception, if shorter) with respect to such investment 
     option, and
       ``(II) the historical returns of an appropriate benchmark, 
     index, or other point of comparison for each such period.

       ``(D) Model notices.--The Secretary shall prescribe one or 
     more model notices that may be used for purposes of 
     satisfying the requirements of this paragraph, including 
     model plan fee comparison charts.
       ``(E) Estimations.--For purposes of providing the notice 
     required under this paragraph, the plan administrator may 
     provide a reasonable and representative estimate for any 
     charges or percentages disclosed under subparagraph (B) or 
     (C) and shall indicate whether the amount of any such charges 
     or percentages disclosed is an estimate.
       ``(2) Disclosure of service provider statements.--The plan 
     administrator shall provide to any participant or beneficiary 
     a copy of any statement received pursuant to section 111 
     within 30 days after receipt of a request for such a 
     statement.
       ``(3) Notice of material changes.--In the case of any event 
     or other change which causes the information included in any 
     notice described in paragraph (1) to become materially 
     incorrect, the plan administrator shall provide participants 
     and beneficiaries a written statement providing the corrected 
     information not later than 30 days after the plan 
     administrator knows, or exercising reasonable diligence would 
     have known, of such event or other change.
       ``(4) Time and manner of providing notices and 
     disclosures.--
       ``(A) In general.--The notices described in paragraph (1) 
     shall be provided at such times and in such manner as the 
     Secretary may provide. Other notices and materials required 
     to be provided under this subsection shall be provided in 
     such manner as the Secretary may provide.
       ``(B) Manner of presentation.--
       ``(i) In general.--All information included in such notices 
     or explanations shall be presented in a manner which is 
     easily understood by the typical participant.
       ``(ii) Generic example of operating expenses of investment 
     options.--The information described in paragraph 
     (1)(C)(ii)(I) shall include a generic example describing the 
     charges that would apply during an annual period with respect 
     to a $10,000 investment in the investment option.
       ``(b) Applicable Individual Account Plan.--For purposes of 
     this section, the term `applicable individual account plan' 
     means the portion of any individual account plan which 
     permits a participant or beneficiary to exercise control over 
     assets in his or her account.
       ``(c) Regulations.--The Secretary shall prescribe such 
     regulations or other guidance as may be necessary or 
     appropriate to carry out the purposes of this section, 
     including regulations or other guidance which--
       ``(1) provide a later deadline for providing the notice of 
     investment menu changes described in subsection (a)(3) in 
     appropriate circumstances, and
       ``(2) provide guidelines, and a safe harbor, for the 
     selection of an appropriate benchmark, index, or other point 
     of comparison for an investment option under subsection 
     (a)(1)(C)(iii)(II).''.
       (2) Clerical amendment.--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:

``Sec. 111. Requirement to provide notice of plan fee information to 
              plan administrators.
``Sec. 112. Requirement to provide notice to participants of plan fee 
              information.
``Sec. 113. Repeal and effective date.''.

       (b) Quarterly Benefit Statements.--Section 105 of such Act 
     (29 U.S.C. 1025) is amended--
       (1) in subsection (a)(2)--
       (A) by redesignating subparagraph (C) as subparagraph (G);
       (B) in subparagraph (B)(ii)--
       (i) in subclause (II), by striking ``diversified, and'' and 
     inserting ``diversified,'';
       (ii) in subclause (III) by striking the period and 
     inserting ``,  and''; and
       (iii) by adding after subclause (III) the following new 
     subclause:

       ``(IV) with respect to the portion of a participant's 
     account for which the participant has the right to direct the 
     investment of assets, the information described in 
     subparagraph (C).''; and

       (C) by inserting after subparagraph (B) the following new 
     subparagraphs:
       ``(C) Quarterly benefit statements.--The plan administrator 
     shall provide to each participant and beneficiary, at least 
     once each calendar quarter, an explanation describing the 
     investment options in which the participant's or 
     beneficiary's account is invested as of the last day of the 
     preceding quarter. Such explanation shall provide, to the 
     extent applicable, the following for the preceding quarter:
       ``(i) As of the last day of the quarter, a statement of the 
     different asset classes that

[[Page 11654]]

     the participant's or beneficiary's account is invested in and 
     the percentage of the account allocated to each asset class.
       ``(ii) A statement of the starting and ending balance of 
     the participant's or beneficiary's account for such quarter.
       ``(iii) A statement of the total contributions made to the 
     participant's or beneficiary's account during the quarter and 
     a separate statement of--

       ``(I) the amount of such contributions, and the total 
     amount of any restorative payments, which were made by the 
     employer during the quarter, and
       ``(II) the amount of such contributions which were made by 
     the employee.

       ``(iv) A statement of the total fees and expenses which 
     were directly deducted from the participant's or 
     beneficiary's account during the quarter and an itemization 
     of such fees and expenses.
       ``(v) A statement of the net returns for the year to date, 
     expressed as a percentage, and a statement as to whether the 
     net returns include amounts described in clause (iv).
       ``(vi) With respect to each investment option in which the 
     participant or beneficiary was invested as of the last day of 
     the quarter, the following:

       ``(I) A statement of the percentage of the participant's or 
     beneficiary's account that is invested in such option as of 
     the last day of such quarter.
       ``(II) A statement of the starting and ending balance of 
     the participant's or beneficiary's account that is invested 
     in such option for such quarter.
       ``(III) A statement of the annual operating expenses of the 
     investment option.
       ``(IV) A statement of whether the disclosure described in 
     clause (iv) includes the annual operating expenses of the 
     investment options of the participant or beneficiary.

       ``(vii) The statement described in section 
     112(a)(1)(B)(i)(VI).
       ``(viii) A statement regarding how a participant or 
     beneficiary may access the information required to be 
     disclosed under section 112(a)(1).
       ``(D) Model explanations.--The Secretary shall prescribe 
     one or more model explanations that may be used for purposes 
     of satisfying the requirements of subparagraph (C).
       ``(E) Determination of expenses.--For purposes of 
     subparagraph (C)(vi)(III)--
       ``(i) Expenses may be expressed as a dollar amount or as a 
     percentage of assets (or a combination thereof).
       ``(ii) The plan administrator may provide disclosure of the 
     expenses for the quarter or may provide a reasonable and 
     representative estimate of such expenses and shall indicate 
     any such estimate as being an estimate. Any such estimate 
     shall be based on reasonable assumptions stated together with 
     such estimate.
       ``(iii) To the extent that estimated expenses are expressed 
     as a percentage of assets, the disclosure shall also include 
     one of the following, stated in dollar amounts:

       ``(I) an estimate of the expenses for the quarter based on 
     the amount invested in the option; or
       ``(II) an example describing the expenses that would apply 
     during the quarter with respect to a hypothetical $10,000 
     investment in the option.

       ``(F) Annual compliance for small plans.--A plan that has 
     fewer than 100 participants and beneficiaries as of the first 
     day of the plan year may provide the explanation described in 
     subparagraph (C) on an annual rather than a quarterly 
     basis.''.
       (c) Assistance From the Department of Labor.--Section 105 
     of such Act (29 U.S.C. 1025) is amended by adding at the end 
     the following new subsections:
       ``(d) Assistance to Small Employers.--The Secretary shall 
     make available to employers with 100 or fewer employees--
       ``(1) educational and compliance materials designed to 
     assist such employers in selecting and monitoring service 
     providers for individual account plans which permit a 
     participant or beneficiary to exercise control over the 
     assets in the account of the participant or beneficiary, 
     investment options under such plans, and charges relating to 
     such options, and
       ``(2) services designed to assist such employers in finding 
     and understanding affordable investment options for such 
     plans and in comparing the investment performance of, and 
     charges for, such options on an ongoing basis against 
     appropriate benchmarks or other appropriate measures.
       ``(e) Assistance to Plan Sponsors and Plan Participants and 
     Beneficiaries.--The Secretary shall provide plan 
     administrators and plan sponsors of individual account plans 
     and participants and beneficiaries under such plans 
     assistance with any questions or problems regarding 
     compliance with the requirements of subparagraphs (B)(ii)(IV) 
     and (C) of subsection (a)(2) and section 112.''.
       (d) Enforcement.--
       (1) Penalties.--Section 502 of such Act (29 U.S.C. 1132) is 
     amended--
       (A) in subsection (a)(6), by striking ``under paragraph 
     (2)'' and all that follows through ``subsection (c)'' and 
     inserting ``under paragraph (2), (4), (5), (6), (7), (8), 
     (9), (10), (11), or (12) of subsection (c)''; and
       (B) in subsection (c), by redesignating the second 
     paragraph (10) as paragraph (13), and by inserting after the 
     first paragraph (10) the following new paragraphs:
       ``(11)(A) In the case of any failure by a service provider 
     (as defined in section 111(f)(1)) to provide a statement in 
     violation of section 111, the service provider may be 
     assessed by the Secretary a civil penalty of up to $1,000 for 
     each day in the noncompliance period.
       ``(B) For purposes of subparagraph (A), the noncompliance 
     period with respect to the failure to provide any statement 
     is the period beginning on the date that such statement was 
     required to be provided and ending on the date that such 
     statement is provided or the failure is otherwise corrected.
       ``(C)(i) The total amount of a penalty assessed under this 
     paragraph on any service provider with respect to any 
     individual account plan for any plan year shall not exceed an 
     amount equal to the lesser of--
       ``(I) 10 percent of the assets of the plan, determined as 
     of the first day of such plan year, or
       ``(II) $1,000,000.
       ``(ii) No penalty shall be imposed by subparagraph (A) on 
     any failure if--
       ``(I) the service provider subject to liability for the 
     penalty under subparagraph (A) exercised reasonable diligence 
     to meet the requirement with respect to which the failure 
     relates, and
       ``(II) such service provider provides the information 
     required under section 111 during the 30-day period beginning 
     on the date such person knew, or exercising reasonable 
     diligence would have known, that such failure existed.
       ``(iii) In the case of a failure which is due to reasonable 
     cause and not to willful neglect, the Secretary may waive 
     part or all of the penalty under subparagraph (A) to the 
     extent that the payment of such penalty would be excessive or 
     otherwise inequitable relative to the failure involved.
       ``(D) The penalty imposed under this paragraph with respect 
     to any failure shall be reduced by the amount of any tax 
     imposed on such person with respect to such failure under 
     section 4980J of the Internal Revenue Code of 1986.
       ``(12)(A) Any plan administrator with respect to a plan who 
     fails or refuses to provide a notice, explanation, or 
     statement to participants and beneficiaries in accordance 
     with subparagraphs (B)(ii)(IV) and (C) of section 105(a)(2) 
     and section 112 may be assessed by the Secretary a civil 
     penalty of up to $110 for each day in the noncompliance 
     period.
       ``(B) For purposes of subparagraph (A), the noncompliance 
     period with respect to the failure to provide any notice, 
     explanation, or statement referred to in subparagraph 
     (B)(ii)(IV) or (C) of section 105(a)(2) or section 112 with 
     respect to any participant or beneficiary is the period 
     beginning on the date that such notice, explanation, or 
     statement was required to be provided and ending on the date 
     that such notice, explanation, or statement is provided or 
     the failure is otherwise corrected.
       ``(C)(i) The total amount of penalty assessed under this 
     paragraph with respect to any plan for any plan year shall 
     not exceed an amount equal to the lesser of--
       ``(I) 10 percent of the assets of the plan, determined as 
     of the first day of such plan year, or
       ``(II) $500,000.
       ``(ii) No penalty shall be imposed under subparagraph (A) 
     on any failure to meet the requirements of subparagraphs 
     (B)(ii)(IV) and (C) of section 105(a)(2) and section 112 if--
       ``(I) any person subject to liability for the penalty under 
     subparagraph (A) exercised reasonable diligence to meet such 
     requirements, and
       ``(II) such person provides the notice, explanation, or 
     statement to which the failure relates during the 30-day 
     period beginning on the date such person knew, or exercising 
     reasonable diligence would have known, that such failure 
     existed.
       ``(iii) In the case of a failure which is due to reasonable 
     cause and not to willful neglect, the Secretary shall waive 
     part or all of the penalty under subparagraph (A) to the 
     extent that the payment of such penalty would be excessive or 
     otherwise inequitable relative to the failure involved.
       ``(iv) The penalty imposed under this paragraph with 
     respect to any failure shall be reduced by the amount of any 
     tax imposed on such person with respect to such failure under 
     section 4980K of the Internal Revenue Code of 1986.''.
       (2) Enforcement coordination and review by the department 
     of labor.--Section 502 of such Act (29 U.S.C. 1132) is 
     amended by adding at the end the following new subsection:
       ``(n) Enforcement Coordination of Certain Disclosure 
     Requirements Relating to Individual Account Plans and Review 
     by the Department of Labor.--
       ``(1) Notification and action relating to service 
     providers.--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 subparagraphs (B)(ii)(IV) and (C) of section 105(a)(2) 
     and section 112. The Secretary shall, in consultation with 
     the applicable authority, take such

[[Page 11655]]

     timely enforcement action under this title as is necessary to 
     assure that such pattern or practice ceases and desists and 
     assess any appropriate penalties.
       ``(2) Annual audit of representative sampling of individual 
     account plans.--The Secretary shall annually audit a 
     representative sampling of individual account plans covered 
     by this title to determine compliance with the requirements 
     of subparagraphs (B)(ii)(IV) and (C) of section 105(a)(2), 
     section 111, and section 112. 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.''.
       (e) Review and Report to the Congress by Secretary of Labor 
     Relating to Reporting and Disclosure Requirements.--
       (1) Study.--As soon as practicable after the date of the 
     enactment of this Act, the Secretary of Labor shall review 
     the reporting and disclosure requirements of part 1 of 
     subtitle B of title I of the Employee Retirement Income 
     Security Act of 1974 and related provisions of the Pension 
     Protection Act of 2006.
       (2) Report.--Not later than 18 months after the date of the 
     enactment of this Act, the Secretary of Labor, in 
     consultation with the Secretary of the Treasury, shall make 
     such recommendations as the Secretary of Labor considers 
     appropriate to the appropriate committees of the Congress to 
     consolidate, simplify, standardize, and improve the 
     applicable reporting and disclosure requirements so as to 
     simplify reporting for employee pension benefit plans and 
     ensure that needed understandable information is provided to 
     participants and beneficiaries of such plans.

     SEC. 323. AMENDMENTS TO THE INTERNAL REVENUE CODE OF 1986.

       (a) In General.--Chapter 43 of the Internal Revenue Code of 
     1986 (relating to qualified pension, etc. plans) is amended 
     by adding at the end the following new sections:

     ``SEC. 4980J. FAILURE TO PROVIDE NOTICE OF PLAN FEE 
                   INFORMATION TO PLAN ADMINISTRATORS.

       ``(a) Imposition of Tax.--
       ``(1) In general.--There is hereby imposed a tax on each 
     failure of a service provider to meet the requirements of 
     paragraph (2) with respect to any applicable defined 
     contribution plan.
       ``(2) Failures described.--The failures described in this 
     paragraph are--
       ``(A) any failure to provide an initial statement described 
     in subsection (d),
       ``(B) any failure to provide an annual statement described 
     in subsection (e), and
       ``(C) any failure to provide a material change statement 
     described in subsection (f).
       ``(b) Amount of Tax.--
       ``(1) In general.--The amount of the tax imposed by 
     subsection (a) on any failure shall be $1,000 for each day in 
     the noncompliance period.
       ``(2) Noncompliance period.--For purposes of paragraph (1), 
     the noncompliance period with respect to the failure to 
     provide any statement is the period beginning on the date 
     that such statement was required to be provided and ending on 
     the date that such statement is provided or the failure is 
     otherwise corrected.
       ``(c) Limitations.--
       ``(1) Aggregate limitation.--The total amount of tax 
     imposed by this section on any service provider with respect 
     to any applicable defined contribution plan for any plan year 
     shall not exceed an amount equal to the lesser of--
       ``(A) 10 percent of the assets of the plan, determined as 
     of the first day of such plan year, or
       ``(B) $1,000,000.
       ``(2) Tax not to apply to failures corrected within 30 
     days.--No tax shall be imposed by subsection (a) on any 
     failure if--
       ``(A) the service provider subject to liability for the tax 
     under subsection (a) exercised reasonable diligence to meet 
     the requirement with respect to which the failure relates, 
     and
       ``(B) such service provider provides the information 
     required under subsection (a) during the 30-day period 
     beginning on the date such person knew, or exercising 
     reasonable diligence would have known, that such failure 
     existed.
       ``(3) Waiver by secretary.--In the case of a failure which 
     is due to reasonable cause and not to willful neglect, the 
     Secretary may waive part or all of the tax imposed by 
     subsection (a) to the extent that the payment of such tax 
     would be excessive or otherwise inequitable relative to the 
     failure involved.
       ``(d) Initial Statement of Services Provided and Revenues 
     Received.--
       ``(1) In general.--Before entering into any contract or 
     arrangement to provide services to an applicable defined 
     contribution plan, the service provider shall provide to the 
     plan administrator a single written statement which includes, 
     with respect to the first plan year covered under such 
     contract or arrangement, the following:
       ``(A) A detailed description of the services which will be 
     provided to the plan by the service provider, the amount of 
     total expected annual revenue with respect to such services, 
     the manner in which such revenue will be collected, and the 
     extent to which such revenue varies between specific 
     investment options.
       ``(B)(i) In the case of a service provider who is providing 
     recordkeeping services with respect to any investment option, 
     such information as is necessary for the plan administrator 
     to satisfy the requirements of paragraphs (1), (2) and (4) of 
     section 4980K(e) with respect to such option, including 
     specifying the method used by the service provider in 
     disclosing or estimating expenses under subparagraphs (A)(iv) 
     and (C) of such paragraph (2).
       ``(ii) To the extent provided in regulations issued by the 
     Secretary of Labor, clause (i) shall not apply in the case of 
     a service provider described in such clause if the service 
     provider receives a written notification from the plan 
     administrator that the information described in such clause 
     in connection with the investment option is provided by 
     another service provider pursuant to a contract or 
     arrangement to provide services to the plan.
       ``(C) A statement indicating--
       ``(i) the identity of any investment options offered under 
     the plan with respect to which the service provider provides 
     substantial investment, trustee, custodial, or administrative 
     services, and
       ``(ii) in the case of any investment option, whether the 
     service provider expects to receive any component of total 
     expected annual revenue described in paragraph (2)(A)(ii)(II) 
     with respect to such option and the amount of any such 
     component.
       ``(D) The portion of total expected annual revenue which is 
     properly allocable to each of the following:
       ``(i) Administration and recordkeeping.
       ``(ii) Investment management.
       ``(iii) Other services or amounts not described in clause 
     (i) or (ii).
       ``(2) Definition of total expected annual revenue.--For 
     purposes of this section--
       ``(A) In general.--The term `total expected annual revenue' 
     means, with respect to any plan year--
       ``(i) any amount expected to be received during such plan 
     year from the plan (including amounts paid from participant 
     accounts), any participant or beneficiary, or any plan 
     sponsor in connection with the contract or arrangement 
     referred to in paragraph (1), and
       ``(ii) any amount not taken into account under clause (i) 
     which is expected to be received during such plan year by the 
     service provider in connection with--

       ``(I) plan administration, recordkeeping, consulting, 
     management, or investment or other service activities 
     undertaken by the service provider with respect to the plan, 
     or
       ``(II) plan administration, recordkeeping, consulting, 
     management, or investment or other service activities 
     undertaken by any other person with respect to the plan.

       ``(B) Expressed as dollar amount or percentage of assets.--
     Total expected annual revenue and any amount indicated under 
     paragraph (1)(C)(ii) may be expressed as a dollar amount or 
     as a percentage of assets (or a combination thereof), as 
     appropriate. To the extent that total expected annual revenue 
     is expressed as a percentage of assets, such percentage shall 
     be properly allocated among clauses (i), (ii), and (iii) of 
     paragraph (1)(D).
       ``(C) Provision of fee schedule for certain participant 
     initiated transactions.--In the case of amounts expected to 
     be received from participants or beneficiaries under the plan 
     (or from the account of a participant or beneficiary) as a 
     fee or charge in connection with a transaction initiated by 
     the participant (other than loads, commissions, brokerage 
     fees, and other investment related transactions)--
       ``(i) such amounts shall not be taken into account in 
     determining total expected annual revenue, and
       ``(ii) the service provider shall provide to the plan 
     administrator, as part of the statement referred to in 
     paragraph (1), a fee schedule which describes each such fee 
     or charge, the amount thereof, and the manner in which such 
     amount is collected.
       ``(3) Estimations.--In determining under this section any 
     amount which is to be disclosed by the service provider, the 
     service provider may provide a reasonable estimate of such 
     amount but only if the service provider indicates that such 
     amount disclosed is an estimate. Any such estimate shall be 
     based on reasonable assumptions specified in writing to the 
     plan administrator.
       ``(4) Disclosure of different pricing of investment 
     options.--In the case of investment options with more than 
     one share class or price level, the Secretary of Labor shall 
     prescribe regulations for the disclosure of the different 
     share classes or price levels available as part of the 
     statement in paragraph (1). Such regulations shall provide 
     guidance with respect to the disclosure of the basis for 
     qualifying for such share classes or price levels, which may 
     include amounts invested, number of participants, or other 
     factors.
       ``(5) Disclosure of investment transaction costs.--To the 
     extent provided in regulations issued by the Secretary of 
     Labor, a service provider shall separately disclose the 
     transaction costs (including sales commissions) for each 
     investment option for the preceding year or the plan's 
     allocable share

[[Page 11656]]

     of such costs for the preceding year. The Secretary of Labor 
     shall, before making a determination to issue any final rule 
     under this subsection, conduct, and report to the Congress on 
     the results of, a study regarding the feasibility and 
     benefits of requiring the disclosure of transaction costs to 
     plan sponsors.
       ``(e) Annual Statements.--With respect to each plan year 
     after the plan year covered by the statement described in 
     subsection (d), the service provider shall provide the plan 
     administrator a single written statement which includes the 
     information described in subsection (d) with respect to such 
     subsequent plan year.
       ``(f) Material Change Statements.--In the case of any event 
     or other change during a plan year which causes the 
     information included in any statement described in subsection 
     (d) or (e) with respect to such plan year to become 
     materially incorrect, the service provider shall provide the 
     plan administrator a written statement providing the 
     corrected information not later than 30 days after the 
     service provider knows, or exercising reasonable diligence 
     would have known, of such event or other change.
       ``(g) Time and Manner of Providing Statement and Other 
     Materials.--The statement referred to in subsections (d)(1) 
     and (e) shall be made at such time and in such manner as the 
     Secretary of Labor may provide. Other materials required to 
     be provided under this section shall be provided in such 
     manner as such Secretary may provide. All information 
     included in such statements and other materials shall be 
     presented in a manner which is easily understood by the 
     typical plan administrator.
       ``(h) Exception for Small Service Providers.--The 
     requirements of this section shall not apply with respect to 
     any contract or arrangement for services provided with 
     respect to an individual account plan for any plan year if--
       ``(1) the total annual revenue expected by the service 
     provider to be received with respect to the plan for such 
     plan year is less than $5,000, and
       ``(2) the service provider provides a written statement to 
     the plan administrator that the total annual revenue expected 
     by the service provider to be received with respect to the 
     plan is less than $5,000.

     Service providers who expect to receive de minimis annual 
     revenue from the plan need not provide the written statement 
     described in paragraph (2). The Secretary of Labor may by 
     regulation or other guidance adjust the dollar amount 
     specified in this subsection.
       ``(i) Definitions.--For purposes of this section--
       ``(1) Service provider.--
       ``(A) In general.--The term `service provider' includes any 
     person providing administration, recordkeeping, consulting, 
     investment management services, or investment advice to an 
     applicable defined contribution plan under a contract or 
     arrangement.
       ``(B) Controlled groups treated as one service provider.--
     All persons which would be treated as a single employer under 
     subsection (b) or (c) of section 414 if section 1563(a)(1) 
     were applied--
       ``(i) except as provided by subparagraph (B), by 
     substituting `more than 50 percent' for `at least 80 percent' 
     each place it appears therein, or
       ``(ii) for purposes of subsection (d)(1)(C)(i), by 
     substituting `at least 20 percent' for `at least 80 percent' 
     each place it appears therein,

     shall be treated as one person for purposes of this section.
       ``(2) Applicable defined contribution plan.--The term 
     `applicable defined contribution plan' means any defined 
     contribution plan described in clauses (iii) through (vi) of 
     section 402(c)(8)(B).
       ``(3) Plan administrator.--The term `plan administrator' 
     has the meaning given such term by section 414(g).

     ``SEC. 4980K. FAILURE TO PROVIDE NOTICE TO PARTICIPANTS OF 
                   PLAN FEE INFORMATION.

       ``(a) Imposition of Tax.--
       ``(1) In general.--There is hereby imposed a tax on each 
     failure of a plan administrator of an applicable defined 
     contribution plan to meet the requirements of paragraph (2) 
     with respect to any participant or beneficiary.
       ``(2) Failures described.--The failures described in this 
     paragraph are--
       ``(A) any failure to provide an advance notice of available 
     investment options described in subsection (e)(1),
       ``(B) any failure to provide an account explanation 
     described in subsection (e)(2),
       ``(C) any failure to provide a service provider statement 
     referred to in subsection (e)(3), and
       ``(D) any failure to provide a notice of material change 
     described in subsection (e)(4).
       ``(b) Amount of Tax.--
       ``(1) In general.--The amount of the tax imposed by 
     subsection (a) on any failure with respect to any participant 
     or beneficiary shall be $100 for each day in the 
     noncompliance period.
       ``(2) Noncompliance period.--For purposes of paragraph (1), 
     the noncompliance period with respect to the failure to 
     provide any notice, explanation, or statement referred to in 
     subsection (a)(2) with respect to any participant or 
     beneficiary is the period beginning on the date that such 
     notice, explanation, or statement was required to be provided 
     and ending on the date that such notice, explanation, or 
     statement is provided or the failure is otherwise corrected.
       ``(c) Limitations on Amount of Tax.--
       ``(1) Aggregate limitation.--The total amount of tax 
     imposed by this section with respect to any plan for any plan 
     year shall not exceed an amount equal to the lesser of--
       ``(A) 10 percent of the assets of the plan, determined as 
     of the first day of such plan year, or
       ``(B) $500,000.
       ``(2) Tax not to apply to failures corrected within 30 
     days.--No tax shall be imposed by subsection (a) on any 
     failure if--
       ``(A) any person subject to liability for the tax under 
     subsection (a) exercised reasonable diligence to meet the 
     requirements of subsection (e), and
       ``(B) such person provides the notice, explanation, or 
     statement to which the failure relates during the 30-day 
     period beginning on the date such person knew, or exercising 
     reasonable diligence would have known, that such failure 
     existed.
       ``(3) Waiver by secretary.--In the case of a failure which 
     is due to reasonable cause and not to willful neglect, the 
     Secretary shall waive part or all of the tax imposed by 
     subsection (a) to the extent that the payment of such tax 
     would be excessive or otherwise inequitable relative to the 
     failure involved.
       ``(d) Liability for Tax.--The plan administrator shall be 
     liable for the tax imposed by subsection (a).
       ``(e) Disclosures to Participants and Beneficiaries.--
       ``(1) Advance notice of available investment options.--
       ``(A) In general.--The plan administrator of an applicable 
     defined contribution plan shall provide to the participant or 
     beneficiary notice of the investment options available under 
     the plan before--
       ``(i) the earliest date provided for under the plan for the 
     participant's initial investment of any contribution made on 
     behalf of such participant, and
       ``(ii) the effective date of any change in the list of 
     investment options available under the plan, unless such 
     advance notice is impracticable, and in such case, as soon as 
     is practicable.
       ``(B) Information included in notice.--The notice required 
     under subparagraph (A) shall--
       ``(i) set forth, with respect to each available investment 
     option--

       ``(I) the name of the option,
       ``(II) a general description of the option's investment 
     objectives and principal investment strategies, principal 
     risk and return characteristics, and the name of the option's 
     investment manager,
       ``(III) whether the investment option is designed to be a 
     comprehensive, stand-alone investment for retirement that 
     provides varying degrees of long-term appreciation and 
     capital preservation through a mix of equity and fixed income 
     exposures,
       ``(IV) the extent to which the investment option is 
     actively managed or passively managed in relation to an index 
     and the difference between active management and passive 
     management,
       ``(V) where, and the manner in which, additional plan-
     specific, option-specific, and generally available investment 
     information may be obtained, and
       ``(VI) 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 consideration of 
     other key factors, including the risk level of the option, 
     the investment objectives of the option, historical returns 
     of the option, and the participant's personal investment 
     objectives,

       ``(ii) include a statement of the right under paragraph (3) 
     of participants and beneficiaries to request, and a 
     description of how participant or beneficiary may request, a 
     copy of the statements received by the plan administrator 
     under section 4980J with respect to the plan, and
       ``(iii) include the plan fee comparison chart described in 
     subparagraph (C).
       ``(C) Plan fee comparison chart.--
       ``(i) In general.--

       ``(I) In general.--The notice provided under this paragraph 
     shall include a plan fee comparison chart consisting of a 
     comparison of the service and investment charges that will or 
     could be assessed against the account of the participant or 
     beneficiary with respect to the plan year.
       ``(II) Expressed as dollar amount or formula.--For purposes 
     of this subparagraph, such charges shall be provided in the 
     form of a dollar amount or as a formula (such as a percentage 
     of assets), as appropriate.

       ``(ii) Categorization of charges.--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:

       ``(I) Asset-based charges specific to investment.--Charges 
     that vary depending on the investment options selected by the 
     participant or beneficiary, including the annual operating 
     expenses of the investment option and investment-specific 
     asset-based charges (such as loads, commissions, brokerage 
     fees, exchange fees, redemption fees, and surrender charges). 
     Except as provided by the

[[Page 11657]]

     Secretary of Labor in regulations under this section, the 
     information relating to such charges shall include a 
     statement noting any charges for 1 or more investment options 
     which pay for services other than investment management.
       ``(II) Recurring asset-based charges not specific to 
     investment.--Charges that are assessed as a percentage of the 
     total assets in the account of the participant or 
     beneficiary, regardless of the investment option selected.
       ``(III) Administrative and transaction-based charges.--
     Administration and transaction-based charges, including fees 
     charged to participants to cover plan administration, 
     compliance, and recordkeeping costs, plan loan origination 
     fees, possible redemption fees, and possible surrender 
     charges, that are not assessed as a percentage of the total 
     assets in the account and are either automatically deducted 
     each year or result from certain transactions engaged in by 
     the participant or beneficiary.
       ``(IV) Other charges.--Any other charges which may be 
     deducted from participants' or beneficiaries' accounts and 
     which are not described in subclauses (I), (II), and (III).

       ``(iii) Fees and historical returns.--The plan fee 
     comparison chart shall include--

       ``(I) the historical returns, net of fees and expenses, for 
     the previous year, 5 years, and 10 years (or for the period 
     since inception, if shorter) with respect to such investment 
     option, and
       ``(II) the historical returns of an appropriate benchmark, 
     index, or other point of comparison for each such period.

       ``(D) Model notices.--The Secretary of Labor shall 
     prescribe one or more model notices that may be used for 
     purposes of satisfying the requirements of this paragraph, 
     including model plan fee comparison charts.
       ``(E) Estimations.--For purposes of providing the notice 
     required under this paragraph, the plan administrator may 
     provide a reasonable and representative estimate for any 
     charges or percentages disclosed under subparagraph (B) or 
     (C) and shall indicate whether the amount of any such charges 
     or percentages disclosed is an estimate.
       ``(2) Quarterly benefit statement.--
       ``(A) Requirements.--The plan administrator shall provide 
     to each participant and beneficiary, at least once each 
     calendar quarter, an explanation describing the investment 
     options in which the participant's or beneficiary's account 
     is invested as of the last day of the preceding quarter. Such 
     explanation shall provide, to the extent applicable, the 
     following for the preceding quarter:
       ``(i) As of the last day of the quarter, a statement of the 
     different asset classes that the participant's or 
     beneficiary's account is invested in and the percentage of 
     the account allocated to each asset class.
       ``(ii) A statement of the starting and ending balance of 
     the participant's or beneficiary's account for such quarter.
       ``(iii) A statement of the total contributions made to the 
     participant's or beneficiary's account during the quarter and 
     a separate statement of--

       ``(I) the amount of such contributions, and the total 
     amount of any restorative payments, which were made by the 
     employer during the quarter, and
       ``(II) the amount of such contributions which were made by 
     the employee.

       ``(iv) A statement of the total fees and expenses which 
     were directly deducted from the participant's or 
     beneficiary's account during the quarter and an itemization 
     of such fees and expenses.
       ``(v) A statement of the net returns for the year to date, 
     expressed as a percentage, and a statement as to whether the 
     net returns include amounts described in clause (iv).
       ``(vi) With respect to each investment option in which the 
     participant or beneficiary was invested as of the last day of 
     the quarter, the following:

       ``(I) A statement of the percentage of the participant's or 
     beneficiary's account that is invested in such option as of 
     the last day of such quarter.
       ``(II) A statement of the starting and ending balance of 
     the participant's or beneficiary's account that is invested 
     in such option for such quarter.
       ``(III) A statement of the annual operating expenses of the 
     investment option.
       ``(IV) A statement of whether the disclosure described in 
     clause (iv) includes the annual operating expenses of the 
     investment options of the participant or beneficiary.

       ``(vii) The statement described in paragraph (1)(B)(i)(VI).
       ``(viii) A statement regarding how a participant or 
     beneficiary may access the information required to be 
     disclosed under paragraph (1).
       ``(B) Model explanations.--The Secretary of Labor shall 
     prescribe one or more model explanations that may be used for 
     purposes of satisfying the requirements of this paragraph.
       ``(C) Determination of expenses.--For purposes of 
     subparagraph (A)(vi)(III)--
       ``(i) Expenses may be expressed as a dollar amount or as a 
     percentage of assets (or a combination thereof).
       ``(ii) The plan administrator may provide disclosure of the 
     expenses for the quarter or may provide a reasonable and 
     representative estimate of such expenses and shall indicate 
     any such estimate as being an estimate. Any such estimate 
     shall be based on reasonable assumptions stated together with 
     such estimate.
       ``(iii) To the extent that estimated expenses are expressed 
     as a percentage of assets, the disclosure shall also include 
     one of the following, stated in dollar amounts:

       ``(I) an estimate of the expenses for the quarter based on 
     the amount invested in the option; or
       ``(II) an example describing the expenses that would apply 
     during the quarter with respect to a hypothetical $10,000 
     investment in the option.

       ``(3) Disclosure of service provider statements.--The plan 
     administrator shall provide to any participant or beneficiary 
     a copy of any statement received pursuant to section 4980J 
     within 30 days after receipt of a request for such a 
     statement.
       ``(4) Notice of material changes.--In the case of any event 
     or other change which causes the information included in any 
     notice described in paragraph (1) to become materially 
     incorrect, the plan administrator shall provide participants 
     and beneficiaries a written statement providing the corrected 
     information not later than 30 days after the plan 
     administrator knows, or exercising reasonable diligence would 
     have known, of such event or other change.
       ``(5) Time and manner of providing notices and 
     disclosures.--
       ``(A) In general.--The notices described in paragraph (1) 
     shall be provided at such times and in such manner as the 
     Secretary of Labor may provide. Other notices and materials 
     required to be provided under this subsection shall be 
     provided in such manner as such Secretary may provide.
       ``(B) Manner of presentation.--
       ``(i) In general.--All information included in such notices 
     or explanations shall be presented in a manner which is 
     easily understood by the typical participant.
       ``(ii) Generic example of operating expenses of investment 
     options.--The information described in paragraphs 
     (1)(C)(ii)(I) shall include a generic example describing the 
     charges that would apply during an annual period with respect 
     to a $10,000 investment in the investment option.
       ``(C) Annual compliance for small plans.--A plan that has 
     fewer than 100 participants and beneficiaries as of the first 
     day of the plan year may provide the explanation described in 
     paragraph (2) on an annual rather than a quarterly basis.
       ``(f) Definitions.--
       ``(1) Applicable defined contribution plan.--The term 
     `applicable defined contribution plan' means the portion of 
     any defined contribution plan which--
       ``(A) permits a participant or beneficiary to exercise 
     control over assets in his or her account, and
       ``(B) is described in clauses (iii) through (vi) of section 
     402(c)(8)(B).
       ``(2) Plan administrator.--The term `plan administrator' 
     has the meaning given such term by section 414(g).
       ``(g) Regulations.--The Secretary of Labor shall prescribe 
     such regulations or other guidance as may be necessary or 
     appropriate to carry out the purposes of this section, 
     including regulations or other guidance which--
       ``(1) provide a later deadline for providing the notice of 
     investment menu changes described in subsection (e)(4) in 
     appropriate circumstances, and
       ``(2) provide guidelines, and a safe harbor, for the 
     selection of an appropriate benchmark, index, or other point 
     of comparison for an investment option under subsection 
     (e)(1)(C)(iii)(II).''.
       (b) Clerical Amendment.--The table of sections for chapter 
     43 of such Code is amended by adding at the end the following 
     new items:

``Sec. 4980J. Failure to provide notice of plan fee information to plan 
              administrators.
``Sec. 4980K. Failure to provide notice to participants of plan fee 
              information.''.

     SEC. 324. REGULATORY AUTHORITY AND COORDINATION.

       (a) Regulatory Authority.--The Secretary of Labor shall 
     prescribe regulations or other guidance to the extent the 
     Secretary determines necessary or appropriate to carry out 
     the purposes of sections 105, 111, and 112 of the Employee 
     Retirement Income Security Act of 1974 and sections 4980J and 
     4980K of the Internal Revenue Code of 1986, including 
     regulations or other guidance which--
       (1) provide safe harbor and simplified methods for making 
     the allocations described in subsection (a)(1)(D) of such 
     section 111 and subsection (d)(1)(D) of such section 4980J; 
     and
       (2) provide special rules for the application of such 
     sections to--
       (A) investments with a guaranteed rate of return;
       (B) investments with an insurance component; and
       (C) employer sponsored retirement plans funded through an 
     individual retirement account.
       (3) address notices with respect to investments provided 
     through participant directed brokerage trading;

[[Page 11658]]

       (4) address the disclosure of information that is not 
     proprietary to the service provider; and
       (5) provide rules to allow service providers to consolidate 
     information to satisfy the requirements of such sections with 
     respect to all such service providers.
       (b) Certain Electronic Disclosures Permitted.--Any 
     disclosure required under section 112 of the Employee 
     Retirement Income Security Act of 1974 or section 4980K of 
     the Internal Revenue Code of 1986 may be provided through an 
     electronic medium under such rules as shall be prescribed 
     under such section by the Secretary of Labor not later than 1 
     year after the date of the enactment of this Act. Such rules 
     shall be similar to those applicable under the Internal 
     Revenue Code of 1986 with respect to notices to participants 
     in pension plans. Such 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 such 
     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.

     SEC. 325. EFFECTIVE DATE OF SUBTITLE.

       (a) In General.--The amendments made by this subtitle shall 
     apply to plan years beginning after December 31, 2011.
       (b) Application of Service Provider Disclosures to Existing 
     Contracts and Arrangements.--For purposes of section 111 of 
     the Employee Retirement Income Security Act of 1974 and 
     section 4980J of the Internal Revenue Code of 1986, any 
     contract or arrangement to provide services to a plan which 
     is in effect on January 1, 2012, shall be treated as a new 
     contract or arrangement entered into on such date.
       (c) Special Rule for Compliance With Subtitle.--Until 12 
     months after final regulations are issued by the Secretary of 
     Labor pursuant to the amendments made by this subtitle, a 
     service provider or plan administrator shall be treated as 
     having complied with such amendments if such service provider 
     or plan administrator complies with a reasonable good faith 
     interpretation of such amendments.
                                 ______
                                 
  SA 4396. Mr. CORNYN (for Mr. Kerry) proposed an amendment to the 
resolution S. Res. 548, to express the sense of the Senate that Israel 
has an undeniable right to self-defense, and to condemn the recent 
destabilizing actions by extremists aboard the ship Mavi Marmara; as 
follows:

       On page 7, strike lines 22-24.
                                 ______
                                 
  SA 4397. Mr. CORNYN (for Mr. Kerry) proposed an amendment to the 
resolution S. Res. 548, to express the sense of the Senate that Israel 
has an undeniable right to self-defense, and to condemn the recent 
destabilizing actions by extremists aboard the ship Mavi Marmara; as 
follows:

       Strike the 14th clause in the preamble.

                          ____________________