The bills are a direct result of hearings held on the state of ERISA on its 25th anniversary by Boehner, chairman of the Employee-Employer Relations Subcommittee of the House Education and the Workforce Subcommittee.
The first of the bills is the Retirement Security Advice Act, which deals primarily with investment advice. The ERISA Modernization Act of 2000 deals with prohibited transaction and party-in-interest rules, while the Comprehensive ERISA Modernization Act of 2000 combines provisions of both for procedural reasons.
According to the Association for Private Pension and Welfare Plans (APPWP) the bills would:
- establish a statutory exemption from the ERISA prohibited transaction rules (§408) for the provision of investment advice to a plan, its participants and beneficiaries, the sale or acquisition of assets pursuant to such investment advice, and the direct or indirect receipt of fees or other compensation in connection with providing the advice
- create a new exemption from ERISA’s prohibited transaction rules for arms-length transactions subject to a written contract and in the interest of the plan and its participants
- modify ERISA’s per se party-in-interest rules so that only persons who have a close relationship with the plan or a particular transaction are parties in interest
- require that the Department of Labor (DOL) find that future administrative exceptions be (1) administratively feasible and (2) protective of the rights of participants and beneficiaries
- direct the DOL to clarify existing regulations to provide additional guidance as to when the assets of an entity in which a plan has invested constitute plan assets under the fiduciary duty provisions (part 4) of ERISA.
– Nevin Adams firstname.lastname@example.org
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