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Secretary of Labor Thomas E. Perez
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EBSA Final Rules

Investment Advice--Participants and Beneficiaries   [3/20/2009]
[PDF]
FR Doc E9-6210
[Federal Register: March 20, 2009 (Volume 74, Number 53)]
[Rules and Regulations]               
[Page 11847-11848]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr20mr09-5]                         

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DEPARTMENT OF LABOR

Employee Benefits Security Administration

29 CFR Part 2550

RIN 1210-AB13

 
Investment Advice--Participants and Beneficiaries

AGENCY: Employee Benefits Security Administration, Labor.

ACTION: Final rule; delay of effective date and applicability date.

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SUMMARY: This document delays the effective and applicability dates of 
final rules under the Employee Retirement Income Security Act, and 
parallel provisions of the Internal Revenue Code of 1986, relating to 
the provision of investment advice to participants and beneficiaries in 
individual account plans, such as 401(k) plans, and beneficiaries of 
individual retirement accounts (and certain similar plans). These rules 
were published in the Federal Register on January 21, 2009. This 
document postpones the effective and applicability dates of these final 
rules from March 23, 2009 until May 22, 2009, to allow additional time 
for the Department to evaluate questions of law and policy concerning 
the rules.

DATES: The effective and applicability date of the rule amending 29 CFR 
part 2550, published January 21, 2009, at 74 FR 3822, is delayed until 
May 22, 2009.

FOR FURTHER INFORMATION CONTACT: Fred Wong, Office of Regulations and 
Interpretations, Employee Benefits Security Administration (EBSA), 
(202) 693-8500. This is not a toll-free number.

SUPPLEMENTARY INFORMATION:

A. Background

    On January 21, 2009, the Department of Labor published final rules 
on the provision of investment advice to participants and beneficiaries 
of participant-directed individual account plans and to beneficiaries 
of individual retirement accounts (74 FR 3822). The rules contain 
regulations implementing a statutory prohibited transaction exemption 
under ERISA Sec. 408(b)(14) and Sec. 408(g) and an administrative class 
exemption granting additional relief. As published, these rules were to 
be effective on March 23, 2009. Paragraph (g) of Sec. 2550.408g-1 
provided that the rule would apply to covered transactions occurring on 
or after March 23, 2009.
    By memorandum dated January 20, 2009, Rahm Emanuel, Assistant to 
the President and Chief of Staff, directed Agency Heads to consider 
extending for 60 days the effective date of regulations that have been 
published in the Federal Register but not yet taken effect. The 
memorandum further advised that, where such regulations are extended, 
agencies should allow 30 days for interested persons to comment on 
issues of law and policy raised by the rules. In accordance with that 
memorandum, and taking into account the considerations listed in the 
Memorandum of January 21, 2009, from Peter R. Orszag, Director of the 
Office of Management and Budget, the Department published in the 
Federal Register on February 4, 2009, a document seeking comment on a 
proposed 60 day extension to the effective dates for these rules until 
May 22, 2009, and a proposed conforming amendment to the applicability 
date of

[[Page 11848]]

Sec. 2550.408g-1. The document also requested comment on issues of law 
and policy raised by the final rules. The comment period on the 
proposed extension ended on February 18, 2009. The comment period on 
issues of law and policy concerning the final rules ended on March 6, 
2009.
    For the reasons discussed below, the Department has decided to 
postpone, for 60 days, the effective and applicability dates of the 
final rules published on January 21, 2009, until May 22, 2009, for 
agency review of questions of law and policy.

B. Comments Received and the Department's Decision

    In response to its request, the Department received 26 comment 
letters.\1\ A number of commenters expressed the view that the final 
rules raise significant issues of law and policy that should be further 
reviewed by the Department. In particular, these comments raised 
questions as to the scope of the final rules' administrative class 
exemption, and expressed disagreement with the interpretation of the 
statutory exemption's conditions contained within the final rules. 
Other commenters, however, expressed the view that the conditions of 
the final rules would be adequate to safeguard the interests of plan 
participants and beneficiaries, and opposed a delay of the final rules' 
effective and applicability dates, noting increased participant 
interest in investment advice in response to the current economic 
environment.
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    \1\ These comments are available on the Department's Web site 
at: http://www.dol.gov/ebsa/regs/cmt-investmentadvicefinalrule.html.
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    After consideration of the comments, the Department has concluded 
that the legal and policy issues raised by commenters are sufficiently 
significant to justify delaying the March 23 effective and 
applicability dates of the final rule in order to afford the Department 
an opportunity to review those issues. Accordingly, the Department is 
adopting herein the proposed 60 day delay of the effective and 
applicability date of the final rule. With the adoption of this delay, 
the effective and applicability dates of the final rule will be May 22, 
2009.

List of Subjects in 29 CFR Part 2550

    Employee benefit plans, Exemptions, Fiduciaries, Investments, 
Pensions, Prohibited transactions, Reporting and recordkeeping 
requirements, and Securities.

0
For the reasons set forth above, the publication on January 21, 2009 
(74 FR 3822), of the final rule amending 29 CFR part 2550, is further 
amended as follows:

PART 2550--RULES AND REGULATIONS FOR FIDUCIARY RESPONSIBILITY

0
1. The authority citation for part 2550 is revised to read as follows:

    Authority: 29 U.S.C. 1135; and Secretary of Labor's Order No. 1-
2003, 68 FR 5374 (Feb. 3, 2003). Sec. 2550.401b-1 also issued under 
sec. 102, Reorganization Plan No. 4 of 1978, 43 FR 47713 (Oct. 17, 
1978), 3 CFR, 1978 Comp. 332, effective Dec. 31, 1978, 44 FR 1065 
(Jan. 3, 1978), 3 CFR, 1978 Comp. 332. Sec. 2550.401c-1 also issued 
under 29 U.S.C. 1101. Sections 2550.404c-1 and 2550.404c-5 also 
issued under 29 U.S.C. 1104. Sec. 2550.407c-3 also issued under 29 
U.S.C. 1107. Sec. 2550.404a-2 also issued under 26 U.S.C. 401 note 
(sec. 657, Pub. L. 107-16, 115 Stat. 38). Sec. 2550.408b-1 also 
issued under 29 U.S.C. 1108(b)(1) and sec. 102, Reorganization Plan 
No. 4 of 1978, 3 CFR, 1978 Comp. p. 332, effective Dec. 31, 1978, 44 
FR 1065 (Jan. 3, 1978), and 3 CFR, 1978 Comp. 332. Sec. 2550.408b-19 
also issued under sec. 611, Public Law 109-280, 120 Stat. 780, 972, 
and sec. 102, Reorganization Plan No. 4 of 1978, 3 CFR, 1978 Comp. 
p. 332, effective Dec. 31, 1978, 44 FR 1065 (Jan. 3, 1978), and 3 
CFR, 1978 Comp. 332. Sec. 2550.408g-1 also issued under sec. 102, 
Reorganization Plan No. 4 of 1978, 3 CFR, 1978 Comp. p. 332, 
effective Dec. 31, 1978, 44 FR 1065 (Jan. 3, 1978), and 3 CFR, 1978 
Comp. 332. Sec. 2550.408g-2 also issued under 29 U.S.C. 1108(g) and 
sec. 102, Reorganization Plan No. 4 of 1978, 3 CFR, 1978 Comp. p. 
332, effective Dec. 31, 1978, 44 FR 1065 (Jan. 3, 1978), and 3 CFR, 
1978 Comp. 332. Sec. 2550.412-1 also issued under 29 U.S.C. 1112.


Sec.  2550.408g-1  [Amended]

0
2. Section 2550.408g-1 is amended by removing the date ``March 23, 
2009'' and adding in its place ``May 22, 2009'' in paragraph (g).

    Signed at Washington, DC, this 17th day of March 2009.
Alan D. Lebowitz,
Deputy Assistant Secretary for Program Operations, Employee Benefits 
Security Administration, Department of Labor.
[FR Doc. E9-6210 Filed 3-19-09; 8:45 am]

BILLING CODE 4510-29-P