H.R.1984

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

4/21/2009--Introduced.

401 (k) Fair Disclosure for Retirement Security Act of 2009 - Amends the Employee Retirement Income Security Act of 1974 (ERISA) to prohibit an administrator of an individual account plan from contracting for services (including the offering of any investment option) to the plan unless the administrator has received, at least 10 business days in advance, a written statement that describes the services to be provided, provides the expected total annual service charges allocated among specified components, and discloses the impact of share classes as well as financial relationships with, or free or discounted services provided by, service providers. Limits applicability of such requirements to contracts for services with a total cost of $5,000 or more per plan year.

Requires an individual account plan administrator which permits a participant or beneficiary to exercise control over account assets to give the participant or beneficiary notice on investment options, including a plan fee comparison chart, 10 business days before: (1) the earliest date for the participant's initial investment; and (2) the effective date of any material change in such options.

Requires the Secretary of Labor to prescribe a model notice, including a model plan fee comparison chart, as well as a model periodic pension benefit account statement.

Requires the Secretary to make available to employers with 100 or fewer employees: (1) educational and compliance materials concerning plan service providers; and (2) services to assist in finding and understanding affordable plan investment options.

Establishes civil penalties for: (1) a service provider who fails to provide a plan administrator with a service disclosure statement; and (2) an administrator who fails to provide plan participants and beneficiaries with certain pension benefit information and notice of investment options.

Continues to shield an individual account plan fiduciary from liability, as under current law, for any loss which results from a plan participant's or beneficiary's exercise of control over the plan's assets, but only if the plan includes at least one investment option which: (1) is an unmanaged or passively managed mutual fund with a portfolio of securities designed to substantially match the performance of the entire U.S. equity market or the entire U.S. bond market, or a combination of them; (2) offers a combination of historical returns, risk, and charges likely to meet retirement income needs at adequate levels of contribution; and (3) is described in the terms of the plan as offered without any endorsement of the government or the plan sponsor.

Requires the Secretary to: (1) notify the applicable regulatory authority about any service provider engaged in a pattern or practice that precludes requirement compliance; (2) audit annually a representative sampling of individual account plans; and (3) recommend to the appropriate congressional committees ways to simplify, standardize, and improve employee pension plan reporting and disclosure requirements.

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