The Department of Labor (DOL) recently issued final rules pertaining to requirements under the Pension Protection Act (PPA) that relate to distribution of 401(k) benefits for missing nonspouse beneficiaries in terminated plans, and selection of annuity providers and cross trading of securities by plans governed by the Employee Retirement Income Security Act (ERISA). The new rule (and a related class exemption) conforms to the PPA by amending existing distribution requirements for terminated defined contribution plans, including abandoned plans, to require rollovers into inherited IRAs for missing nonspouse beneficiaries, according to DOL. As for annuities, DOL is issuing two final rules on selection of annuity providers. One rule limits the application of the “safest available” standard of Interpretive Bulletin 95-1 to defined benefit plans, DOL says, while the other is a final regulation providing guidance, in the form of a safe harbor, for the selection of annuity providers by fiduciaries for benefit distributions from individual account plans. The final rule on cross trading addresses the content of the policies and procedures which must be adopted by an investment manager before engaging in cross trades of securities between clients, including employee benefit plans.
The Investment Company Institute (ICI) and the Securities Industry and Financial Markets Association (SIFMA) are launching a new research initiative that will compile a database to help improve the understanding of investors’ use of individual retirement accounts (IRAs)–the largest pool of retirement assets held by Americans. The groups will collect account and demographic data and produce a major research report on IRAs annually, starting in 2009. Member firms of the ICI and SIFMA hold more than 85% of all IRA assets. From 2002 to 2007, IRA assets nearly doubled, from $2.5 trillion to $4.7 trillion, according to ICI and Internal Revenue Service data.