Regulations: What’s Happened and What’s Coming

May 1, 2013 ( – Retirement plan sponsors have been dealing with several regulatory initiatives in the past year and more are coming.

By PLANSPONSOR staff | May 01, 2013
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Stephen M. Saxon, partner at Groom Law Group, started his session at the 42nd Annual Retirement & Benefits Management Seminar by reminding attendees that in October 2010, the Department of Labor (DOL) proposed to amend regulations defining who is an Employee Retirement Income Security Act (ERISA) fiduciary by reason of providing investment advice. The proposal would have significantly broadened the number of individuals who could be deemed ERISA fiduciaries by eliminating the requirements that advice must be provided on a “regular basis” and with a “mutual understanding” that the advice would be the primary basis for plan investment decisions.  

The DOL retracted its proposal, but is expected to issue a new proposal in 2013. Saxon said Groom expects the proposal will include numerous exemptions in an attempt to harmonize the re-proposal with longstanding DOL exemptions.  

In connection with its re-proposal, the agency requested comment about whether advice given to participants exiting plans should be treated as investment advice.In addition, Saxon noted, a recent Government Accountability Office (GAO) report raised concerns about participants being “steered” toward certain products when making distribution decisions, and the GAO recommended the DOL and Internal Revenue Service (IRS) draft new rules to make plan-to-plan rollovers easier for participants (see “GAO Encourages Easier Plan-to-Plan Rollovers”). Saxon speculated whether this means new guidance will be coming.