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Regulation and Compliance > Federal Regulation

DOL's Borzi Lays Out EBSA's Agenda

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Phyllis Borzi, Assistant Secretary of Labor for Employee Benefits Security Administration (EBSA), told attendees at the annual Department of Labor (DOL) Speaks conference in National Harbor, Md., on Monday that EBSA continued progress on its “pension agenda”–which included target date funds, fee regulation and lifetime income options in retirement plans.

Borzi also said that EBSA was working on a final regulation for its investment advice rule, which should be out early next year. “We’ve resolved most of the policy issues,” concerning the regulation, Borzi said, and are now focusing on “enforcement issues.”

Key issues regarding healthcare reform are also on EBSA’s agenda, Borzi said. Since Congress passed the Affordable Care Act, EBSA “has put out eight packages of regulations” and has plans to release sub-regulatory guidance (transition rules and safeharbors) by Sept. 23, she said. This type of guidance will continue to “roll out” over the next weeks, she said, and “we will finalize the regulations next year.”

As for target date funds, Borzi said that after the DOL’s joint hearing with the Securities and Exchange Commission (SEC) last June, the two agencies decided to focus on three product areas (two non-regulatory ones, and one regulatory). First was the investor bulletin that had already been sent to investors explaining target date funds. Second is a fiduciary best practices checklist, which EBSA is currently working on and expects to have completed in a matter of weeks, Borzi says. The checklist will provide fiduciaries with all of the information they need to determine whether to offer employees a target date fund. The third regulatory piece, which Borzi said would be out soon, would be an amendment to the Qualified Default Investment Alternative (QDIA) regulation requiring more disclosure to participants.

As for fee disclosure, the DOL’s 408(b)(2) proposed regulation mandating disclosures of compensation and conflicts of interest by plan service providers has gotten 45 comments, Borzi says, and EBSA hopes to move on this regulation “as soon as possible.” Borzi said that Sen. Tom Harkin, D-Iowa, chairman of the Health, Education, Labor and Pensions Committee, wants a single summary document so that fiduciaries can figure out all fees associated with investments on their platforms.

Borzi also said that EBSA hopes to have a proposed regulation regarding its “fiduciary definition” out by year end.


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