<nobr>May 5, 2008</nobr>

EBSA Issues Corrections to QDIA Regulations, Supplemental Guidance

The Department of Labor's Employee Benefits Security Administration published in the April 30 Federal Register correcting amendments to the final regulations on qualified default investment alternatives under participant directed individual account plans. Continue

The final regulations, which were published in October 2007, implement amendments to ERISA enacted as part of the Pension Protection Act to provide relief from certain fiduciary responsibilities for fiduciaries of participant-directed individual account plans who, in the absence of directions from a participant, invest the participant's account in a qualified default investment alternative.

The corrections make three changes to the final regulations by eliminating the reference to "round-trip" restrictions as an example of an impermissible restriction; clarifying that a committee that is a named fiduciary can manage a qualified default investment alternative; and ensuring that broad application of the "grandfathered" relief for stable value products and funds as QDIAs is provided.

The amendments to the final regulations are effective on April 30, 2008, and are applicable to the final regulation's effective date of December 24, 2007.

EBSA Issues Supplemental QDIA Guidance

EBSA last week also released Field Assistance Bulletin No. 2008-03 providing additional guidance on the final regulations on qualified default investment alternatives. EBSA said that since publication of the final regulation, issues have been raised concerning the scope and meaning of various provisions, and that the bulletin supplements the regulation by providing guidance in a question and answer format for the most frequently asked questions.

The bulletin contains 22 questions and answers addressing the scope of the QDIA regulation, notice requirements, 90-day limitation on fees and restrictions, management and asset allocation of QDIAs, the 120-day capital preservation QDIA, and grandfather-type relief for Stable Value Funds.

Questions or comments on the regulations should be addressed to Rosemary Becchi, rbecchi@eric.org.


Websites:

QDIA Corrections

Field Assistance Bulletin No. 2008-03

QDIA Regulations

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