<nobr>Oct 6, 2008</nobr>

ERIC Files Comments on DOL Proposed Regulation on Investment Advice

ERIC on October 6 submitted to the Department of Labor comments on a proposed regulation and proposed class exemption on investment advice. DOL on August 22 published in the Federal Register the proposed rule under the Pension Protection Act (PPA) along with the proposed class exemption allowing fiduciary advisers to provide investment advice to participants in 401(k) type plans and individual retirement accounts (IRAs).

ERIC's comment letter addresses a number of areas of concern, including that:

• The regulation should state it does not invalidate/affect prior guidance;


• The regulation should clarify the relief provided in Section 408(g)(10) applies to all investment advice programs;


• The Department should not use the term "monitor" to describe a fiduciary's duty to periodically review the fiduciary's performance;


• The regulation should state that fiduciaries are not required to make investment advice available to participant-directed plans;


• Providing investment advice should not affect fiduciary relief under Section 404(c);


• The ability to exclude qualifying employer securities from a computer model should also apply to other single-asset funds;


• Participants should be permitted to receive investment advice with respect to a designated portion of their account;


• The regulation should permit automatic rebalancing of accounts;


• The regulation should not impose liability based on the results on the annual audit; and


• Fiduciaries should be given even greater freedom to meet their disclosure obligations by providing electronic disclosure.

###

ERIC's Comment Letter

Back to Previous Page