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Regulation and Compliance > Federal Regulation

EBSA To Spend More Time On Advice Rules

By staff Writer

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An arm of the U.S. Department of Labor is once again pushing back the effective date for regulations that would govern the delivery of investment advice to retirement plan participants.

The Employee Benefits Security Administration has postponed the effective date of a final investment rule published in January to May 17, 2010.

Earlier, EBSA pushed the effective date to May 22, from March 20, and then to Nov. 18, from May 22.

The notice of the new postponement has appeared today in the Federal Register.

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.

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