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April 12, 2002 at 08:00 PM
NU Online News Service, April 12, 11:51 a.m. — Washington
The pension legislation approved late yesterday by the U.S. House of Representatives is drawing a cautious reaction from employers.
Insurers, meanwhile, are expressing strong support for one provision of the legislation, H.R. 3762.
The bill, which was passed by a 255-163 vote, would require defined contribution plan administrators to provide participants with 30 days’ notice of a “lockdown period” — a time during which participants are not allowed to sell or reallocate their assets.
In addition, the bill imposes fiduciary liability on employers during lockdowns unless the employer meets certain requirements, such as limiting the lockdown to a “reasonable” period and acting solely in the interests of participants when determining to enter it.
From the insurance company and agent perspective, H.R. 3762 contains language, strongly supported by the industry, which allows those that provide services to pension plans to also provide investment advice to plan participants, subject to disclosure requirements.
Regarding the overall bill, Mark J. Ugoretz, president of the ERISA Industry Committee, Washington, an employer group, questions whether Congress fully considered the implications of the legislation.
He notes that last year, Congress enacted a pension reform bill, the Portman-Cardin Act, that was the result of five years of drafting, redrafting and vetting.
