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June 08, 2011 at 08:00 PM
WASHINGTON BUREAU — Bradford Campbell, the former head of the Employee Benefits Security Administration (EBSA), says the U.S. Department of Labor should overhaul its retirement plan fiduciary definition proposal.
“This is a big issue,” Campbell said today here at a seminar on pension risk that was organized by Federated Investors Inc., Pittsburgh (NYSE:FII), and Hartford Financial Services Group Inc., Hartford (NYSE:HIG).
Campbell, who was the assistant Labor secretary overseeing EBSA from 2007 to 2009, is now of counsel in the Washington office of Schiff Hardin L.L.P.
A plan fiduciary is an individual or company with a legal obligation to put the plan’s interests first.
EBSA has been trying to update a plan fiduciary definition that was created back in the 1970s. Critics of that definition say the multi-part test included in that definition excludes some wrongdoers who clearly have been acting in what plan sponsors or participants believe to be a fiduciary capacity.
Critics of the proposed definition that EBSA recently drafted for the Labor Department say it is so broad and so vague it could turn almost any individual or company that helps a retirement plan or plan participant into an accidental fiduciary.
Labor Department officials have been talking about completing work on the definition before the end of the year, then giving providers a long time to comply and making any changes that appear to be necessary.
Giving providers extra time to comply with a new definition that resembles the proposed definition is not good enough, Campbell said.
