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Regulation and Compliance > Federal Regulation

EBSA Delays Advice Rules

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An arm of the U.S. Department of Labor will be taking more time to implement regulations governing delivery of investment advice to retirement plan participants.

The Employee Benefits Security Administration has pushed back the effective date of a final investment rule published in January to Nov. 18, 2009.

Earlier, EBSA had pushed the effective date back to May 22, from March 20.

The notice of the new postponement should appear Friday in the Federal Register, EBSA says.

The final rule would have allowed producers who sell defined benefit or defined contribution plans to employers to offer financial advice to the plan participants.

Critics say the rule could let advisors violate the Employee Retirement Income Security Act by concealing potential conflicts of interest, such as income they are receiving from other vendors that serve a plan.

The Bush administration developed the regulations to carry out provisions of the Pension Protection Act of 2006.

The provisions changed the prohibited transaction provisions of ERISA to permit defined benefit or defined contribution plan providers to offer investment advice to plan participants, if the providers disclose that they will receive income from the investments purchased.