<nobr>Aug 4, 2009</nobr>

ERIC Expresses Support for Chairman Frank's Statement that Proposed CFPA Would Have No Regulatory Authority over Retirement Plans

Washington, D.C. -- In a letter sent today to House Financial Services Committee Chairman Barney Frank (D-MA), The ERISA Industry Committee expressed "strong support" for the Chairman's recent statement that the proposed Consumer Financial Protection Agency (CFPA) would have no regulatory authority over retirement plans.

Chairman Frank on July 8 introduced legislation (H.R. 3126) to create the CFPA to oversee consumer financial products and services that was also proposed by the Obama Administration. Chairman Frank reportedly made the comment during a July 22 press conference that the proposed new agency would have no authority in regulating retirement plans.

ERIC's letter points out that all retirement plans are already heavily regulated by the Departments of Labor and Treasury, Internal Revenue Service and Pension Benefit Guaranty Corporation, and are subject to strict fiduciary standards under the Employee Retirement Income Security Act (ERISA), which Federal courts, including the U.S. Supreme Court, have recognized as being among the highest standards known to law.

ERIC President Mark Ugoretz and Vice President for Retirement Policy Kathryn Ricard write that the "creation of a separate regulatory regime for pension plans and 401(k) plans to regulate 'consumer issues' would result in yet one more agency -- one lacking the expertise of 30 years of complex regulation and litigation of the existing agencies -- as well as conflicting regulatory philosophies and ambiguity in interpretation." Ugoretz added that, "retirement is already heavily regulated, plan sponsors and participants must contend with over 4,500 pages of regulations by at least four major agencies. Enough is enough, more regulators are not warranted and more regulation will not result in better plans."

Moreover, they point out that, "ERISA itself is a consumer protection statute and the agencies that regulate retirement security have at the core of their mission protection of consumer/participant interests."

Ugoretz and Ricard strongly urged "that any legislation creating the CFPA explicitly state that, in light of the existing comprehensive regulation of retirement arrangements, the new agency would not have authority or jurisdiction over retirement plans."

A copy of the letter is below.

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For more information:
Ted Godbout
Manager, Communications
The ERISA Industry Committee
1400 L Street, NW, Suite 350
Washington, DC 20005
Phone: (202) 789-1400
Fax: (202) 789-1120
tgodbout@eric.org
www.eric.org

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The ERISA Industry Committee (ERIC) is a non-profit association committed to representing the advancement of the employee retirement, health, and compensation plans of America's largest employers. ERIC's members provide benchmark retirement, health care coverage, compensation, and other economic security benefits directly to tens of millions of active and retired workers and their families. ERIC has a strong interest in proposals affecting its members' ability to deliver those benefits, their cost and their effectiveness, as well as the role of those benefits in the American economy.

Text Files:

ERIC Letter to Chairman Frank

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