DOL Lists Fiduciary Re-Proposal, Project On Brokerage Windows on Regulatory Agenda


The Department of Labor's Employee Benefits Security Administration projected that its rule on the redefinition of the term “fiduciary,” also known as its conflict-of-interest rule, will be re-proposed in August 2014, and also indicated its intentions to start on a project related to brokerage windows, according to the DOL's fall 2013 regulatory agenda.         

The item on brokerage windows is new to the DOL's regulatory agenda and is listed in the pre-rule stage, according to the fall 2013 version of the Obama administration's regulatory plans and the Unified Agenda of Regulatory and Deregulatory Actions, covering 60 federal agencies.        

“This rulemaking project will explore whether, and to what extent, regulatory guidance on fiduciary requirements and regulatory safeguards for such arrangements are appropriate for plans that allow participants to direct investments through brokerage windows. EBSA expects to begin this review by issuing a Request for Information,” said the fall regulatory agenda, released Nov. 26.        

Brokerage Windows         

The issue of brokerage windows, which allow plan participants to choose investments beyond those designated by the plan, came to the forefront in 2012 when the DOL released Field Assistance Bulletin 2012–02, which was a series of questions and answers providing guidance on the department's final participant-level and service provider fee disclosure rules.        

The DOL later clarified its position on brokerage windows in FAB 2012–02R, which superseded FAB 2012–02.       

Kathryn Ricard, senior vice president for retirement policy at the ERISA Industry Committee (ERIC), told Bloomberg BNA Dec. 2 that when the DOL initially released the FAB with guidance on brokerage windows, several groups representing employers spoke up and said, “this is basically new regulatory action. This is not clarification.”            

As a result, the DOL withdrew its guidance on brokerage windows, she said.         

Ricard said Phyllis C. Borzi, assistant secretary of labor for EBSA, hasn't said much on the issue of brokerage widows, but added that Borzi's “other priorities are lifetime income and definition of fiduciary.” 

Other EBSA Projects         

Other EBSA projects listed on the agenda in the proposed rule stage include:

• pension benefit statements;

• guide or similar requirement for Section 408(b)(2) disclosures;

• selection of annuity providers—safe harbor for individual account plans; and

• amendments to excepted benefits.

Several projects also were listed in the final rule stage, including:

• annual funding notice;

 • Mental Health Parity and Addiction Equity Act;

• target date disclosure;

• amendment of abandoned plan program; and

• 90-day waiting period limitation and technical amendments to certain health coverage requirements under the Affordable Care Act.

Excerpted from a story that ran in Pension & Benefits Daily (12/2/2013).