EBSA Pulls Back Controversial Advice Mandate
November 19, 2009 (PLANSPONSOR.com) – The long saga of the U.S. Department of Labor’s (DoL) hotly debated investment advice rule took another twist Thursday when the DoL’s Employee Benefits Security Administration (EBSA) announced the controversial final rule is being withdrawn.
The latest move regarding the advice rule follows EBSA’s recent extension of the applicability and effective dates of the January 2009 rule to May 17, 2010 (see EBSA Delays Advice Rule – Again). EBSA said the extension expires on the rule’s withdrawal.
“The department decided to withdraw the rule based on public comments that raised sufficient doubts as to whether the conditions of the final rule and the class exemption associated with the rule could adequately protect the interests of plan participants and beneficiaries,” EBSA commented in a news release.
The agency said it intends to publish separately a proposed rule that conforms to the Pension Protection Act statutory exemption relating to investment advice.
Former EBSA head Bradford Campbell, who is now associated with the Schiff Hardin LLP law firm, released a statement after the agency announcement in which he blasted the decision.
“The decision to withdraw these regulations in their entirety is a significant loss for the millions of workers who have waited over three years for the Department to provide access to quality, professional investment advice. I’m very disappointed that the Department did not at least permit the portions of the final regulation implementing the PPA’s independent, computer model-based advice provisions to go into effect,” said Campbell in the statement. “It is one thing for a new Administration to have a policy disagreement with its predecessor about a portion of a regulation; it is another thing entirely to throw the baby out with the bathwater.”