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EBSA Final Rules

Investment Advice--Participants and Beneficiaries   [11/17/2009]
[PDF]
FR Doc E9-27532
[Federal Register: November 17, 2009 (Volume 74, Number 220)]
[Rules and Regulations]               
[Page 59092-59093]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr17no09-8]                         

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DEPARTMENT OF LABOR

Employee Benefits Security Administration

29 CFR 2550

RIN 1210-AB13

 
Investment Advice--Participants and Beneficiaries

AGENCY: Employee Benefits Security Administration, Labor.

ACTION: Final rule; delay of effective 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. The 
effective and applicability dates of the final rules were deferred 
until November 18, 2009, in order to permit a review of policy and 
legal issues raised with respect to the rules. This document further 
delays the effective and applicability dates of these final rules from 
November 18, 2009, until May 17, 2010, to allow additional time for the 
Department to complete its analysis of 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, delayed March 20, 
2009, at 74 FR 11847, and May 22, 2009, at 74 FR 23951, is further 
delayed until May 17, 2010.

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: 
    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 and certain similar plans (IRAs) (74 
FR 3822). The rules implement a statutory prohibited transaction 
exemption under ERISA Sec. 408(b)(14) and Sec. 408(g), and under 
section 4975 of the Internal Revenue Code of 1986 (Code),\1\ and also 
contain 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.
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    \1\ These provisions were added to ERISA and the Code by the 
Pension Protection Act of 2006 (PPA), Public Law 109-280, 120 Stat. 
780 (Aug. 17, 2006).
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    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 of the effective dates for these rules until 
May 22, 2009, and a proposed conforming amendment to the applicability 
date of Sec. 2550.408g-1 (74 FR 6007). The document also requested 
comment on issues of law and policy raised by the final rules. The 
Department indicated that upon completion of its review, it might 
decide to allow the rules to take effect, issue a further extension, 
withdraw the rules, or propose amendments, and solicited comment on 
each of these possible outcomes. In response to this invitation, the 
Department received 28 comment

[[Page 59093]]

letters.\2\ A number of these comments expressed the view that the 
final rules raise significant issues of law and policy. Among these, 
some expressed disagreement with the final rules' interpretation of the 
statutory exemption, and further questioned the adequacy of the class 
exemption's conditions in mitigating against the potential for 
investment adviser self-dealing.
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    \2\ These comments are available on the Department's Web site 
at: http://www.dol.gov/ebsa/regs/cmt-investmentadvicefinalrule.html.
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    On March 20, 2009, the Department adopted the 60-day extension of 
the final rule's effective and applicability date for agency review of 
questions of law and policy raised by commenters (74 FR 11847). On May 
22, 2009, in order to afford the Department additional time to consider 
the issues raised by commenters, the Department adopted a further delay 
of these dates until November 18, 2009 (74 FR 23951). The Department 
believes that the complexity and significance of the issues involved 
justify delaying the effective and applicability dates of the final 
rule for an additional 180 days. This additional time will allow the 
Department to complete its analysis of the issues of law and policy and 
determine the appropriate steps to be taken. Accordingly, the 
Department is adopting herein a 180 day delay of the effective and 
applicability date of the final rule published on January 21, 2009. 
With the adoption of this delay, the effective and applicability date 
of the final rule will be May 17, 2010.

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. 
6-2009, 74 FR 21524 (May 7, 2009). Secs. 2550.401b-1, 2550.408b-1, 
2550.408b-19, 2550.408g-1, and 2550.408g-2 also issued under sec. 
102, Reorganization Plan No. 4 of 1978, 5 U.S.C. App. 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(c)(2), Pub. L. 107-16, 115 Stat. 38, 
136 (2001)). Sec. 2550.408b-1 also issued under 29 U.S.C. 
1108(b)(1). Sec. 2550.408b-19 also issued under sec. 611(g)(3), 
Public Law 109-280, 120 Stat. 780, 975 (2006).


Sec.  2550.408g-1  [Amended]

0
2. Section 2550.408g-1 is amended by removing the date ``November 18, 
2009'' and adding in its place ``May 17, 2010'' in paragraph (g).

    Signed at Washington, DC, this 10th day of November 2009.
Phyllis C. Borzi,
Assistant Secretary, Employee Benefits Security Administration, 
Department of Labor.
[FR Doc. E9-27532 Filed 11-16-09; 8:45 am]

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