The Department of Labor's final regulations on investment advice arrangements for defined contribution plan participants now in effect

The Department of Labor (DOL) recently issued final regulations implementing a prohibited transaction exemption applicable to investment advice arrangements made available to defined contribution plan participants. The new regulations became effective Dec 27, 2011. The regulations were needed to int...

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Bibliographic Details
Published in:Employee Benefit Plan Review 2012-01, Vol.66 (7), p.19
Main Author: Stapel, Julie K
Format: Article
Language:English
Subjects:
Advisors
Asset allocation
Beneficiaries
Compensation
Defined contribution plans
Federal regulation
Fees & charges
Fiduciaries
Investment advisors
Investments
Laws, regulations and rules
Regulation
Requirements
Wages & salaries
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Summary:The Department of Labor (DOL) recently issued final regulations implementing a prohibited transaction exemption applicable to investment advice arrangements made available to defined contribution plan participants. The new regulations became effective Dec 27, 2011. The regulations were needed to interpret and apply the numerous statutory requirements applicable to advice arrangements, which turned out to be more easily said than done as they have been issued, withdrawn and reissued since they were first proposed in August 2008. The regulations contain a definition of "designated investment option" that includes investment options designated by the plan into which participants and beneficiaries may direct investments but excludes self-directed brokerage windows. Between the proposed regulations in March 2010 and these final regulations, the DOL also finalized the 401(k) participant disclosure regulations which use the similar term "designated investment alternative."
ISSN:0013-6808