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DOL Updates and Broadens Definition of FiduciaryAccording to Assistant Labor Secretary Phyllis Borzi, "This current rule simply is not working." So today the DOL's Employee Benefits Security Administration announced a proposed rule to update the definition of "fiduciary" to more broadly define the term as a person who provides investment advice to plans for a fee or other compensation.The department's proposed rule would amend a 1975 regulation that defines when a person providing investment advice becomes a fiduciary under the Employee Retirement Income Security Act. The proposed amendment would update that definition to take into account changes in the expectations of plan officials and participants who receive advice, as well as the practices of investment advice providers. "The proposal will ensure that plans receive advice based on reliable information that protects the interests of plan participants and beneficiaries," said Phyllis C. Borzi, assistant secretary of labor for EBSA. "We believe that this proposal more closely reflects the statutory language of ERISA and the realities of the current investment marketplace, and therefore will ensure those who provide investment advice are held accountable as fiduciaries under the law." The proposal will take effect 180 days after publication in the Federal Register on October 22, 2010. Comment period is open for 90 days. To facilitate the receipt and processing of comment letters, the DOL encourages interested persons to submit their comments electronically by email to e-ORI@dol.gov (use subject line: Definition of Fiduciary Proposed Rule) or by using the Federal eRulemaking portal at http://www.regulations.gov. Persons submitting comments electronically are encouraged not to submit paper copies. Persons interested in submitting paper copies should send or deliver their comments to the Office of Regulations and Interpretations, Employee Benefits Security Administration, Attn: Definition of Fiduciary Proposed Rule, Room N-5655, U.S. Department of Labor, 200 Constitution Avenue, NW, Washington, DC 20210. A draft of the proposed regulation can be found here: http://edocket.access.gpo.gov/2010/pdf/2010-26236.pdf. Rick Meigs, Publisher |
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