EBSA Provides Mutual Fund Review Guidance

February 17, 2004 (PLANSPONSOR.com) - Plan sponsors got some additional insights for dealing with the mutual fund trading scandal today.

>Ann Combs, Assistant Secretary of the US Department of Labor’s Employee Benefit Security Administration, (EBSA) announced guidance on the duties of employee benefit plan fiduciaries in light of alleged abuses involving mutual funds.

>According to EBSA, the guidance addresses the obligations of fiduciaries to review their mutual fund and pooled investment fund investments with respect to reported and potential late trading and market-timing abuses.   It also provides examples of steps that fiduciaries can take to deal with market-timing concerns within their own plans without losing the protections of section 404(c) of the Employee Retirement Income Security Act (ERISA).  

“Informed fiduciaries are in the best position to protect the retirement savings of ‘s workers.   Federal and state investigations of late trading and market-timing abuses involving mutual funds have raised a number of questions about what steps fiduciaries should take with respect to their plans’ mutual funds and similar types of investments.   Today we are providing guidance to clarify these issues for the benefit community,” Combs said.

>In a press release, Combs also announced that EBSA is conducting reviews of mutual funds, similar pooled investment funds, and service providers to such funds to determine whether there have been any violations of ERISA.  

The DoL guidance is at  http://www.dol.gov/ebsa/newsroom/sp021704.html .