The ERISA Industry Committee Opposes SEC “Hard Close” Proposal that Would Create Disadvantages for Retirement Savers

WASHINGTON, February 14, 2023 – The ERISA Industry Committee (ERIC) today submitted comments opposing a U.S. Securities and Exchange Commission (SEC) proposed regulation affecting the operation of most open-end mutual funds. Among other things, the proposal would create a daily set closing time (a “hard close”) for transactions to be received by mutual funds for investors to receive that day’s price.
“While the SEC does not typically regulate private-sector retirement plans, its rules can significantly disrupt the operations of plans that provide benefits to millions of Americans,” said Andy Banducci, ERIC Senior Vice President of Retirement and Compensation Policy.
“The SEC should abandon its ill-considered proposal because it would hurt workers and retirees that participate in 401(k) plans,” said Banducci. “To implement it, employers and service providers would need to make costly changes and plan participants would have to submit orders earlier than others in the marketplace.”
In its letter to the SEC, ERIC explains this new rule would require retirement plan recordkeepers to create an even earlier time for plan participants to submit orders, meaning retirement plan participants would be disadvantaged in the marketplace and may not receive distributions as quickly. Additionally, the timing mandates would require expensive changes to the technology and processes that many plans and their recordkeepers use. Finally, ERIC points out that the SEC did not estimate the costs of these proposed changes. For these reasons, ERIC explained that the Commission should withdraw the proposal or grant an exemption from the hard-close requirement for retirement plans and their recordkeepers.
ERIC member companies sponsor and maintain retirement plans for millions of their workers and retirees. They supervise billions of dollars in retirement assets in accordance with their obligations under federal law. Therefore, a regulation affecting mutual funds has the potential to have major consequences for the operation of retirement plans and their service providers.
Click HERE to read ERIC’s letter to the SEC.


All media inquiries to The ERISA Industry Committee should be directed to

About The ERISA Industry Committee
ERIC is a national advocacy organization that exclusively represents large employers that provide health, retirement, paid leave, and other benefits to their nationwide workforces. With member companies that are leaders in every sector of the economy, ERIC advocates on the federal, state, and local levels for policies that promote flexibility and uniformity in the administration of their employee benefit plans.