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Release Date: 10/21/1998
Release Number:
99-2
Contact Name: Gloria Della
Phone Number: 202.219.8921
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The U. S. Department of Labor has proposed
broadening the scope of two class exemptions allowing individual retirement
accounts (IRAs) or Keogh pension plans to get free or low cost brokerage or
banking services |
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Under the department's proposed exemptions,
broker-dealers and banks could provide services as incentives for maintaining
educational IRAs and simple retirement accounts. The proposal would expand the
type of IRAs covered by Prohibited Transaction Exemptions (PTEs) 97-11 and
93-33. PTE 97-11 allows brokerage firms to give IRA and Keogh customers low or
no cost services which otherwise are prohibited by the Employee Retirement
Income Security Act. PTE 93- 33 provided similar relief to the banking
industry. |
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Services customers could get from these
institutions include financial planning, direct deposit/debit and automatic
fund transfer privileges, enhanced account statements, toll-free access to
client service centers, check writing privileges, debit/credit cards, special
newsletters, and reduced brokerage and asset management fees. |
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The proposal for broker-dealers was requested by
the Securities Industry Association, which represents more than 700 securities
firms which provide brokerage and investment advisory services to the public.
The proposal would amend PTE 97-11 to allow broker- dealers to offer low or no
cost services for education IRAs as well as IRAs and Keogh plans. |
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The American Bankers Association asked the
department to amend PTE 93-33. The proposal would broaden the current exemption
to include the former two type of plans. |
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The proposal is scheduled to be published in the
Oct. 21 Federal Register. Public comments or requests for a hearing should be
submitted in writing to the Office of Exemption Determinations, Pension and
Welfare Benefits Administration, U.S. Department of Labor, Room N-5649, 200
Constitution Ave., N.W., Washington, D.C. 20210, marked to the Attn: D-10554
(brokerage exemption) or Attn: D-10567 (banking exemption). |
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U.S. Department of
Labor news releases are accessible on the Internet. The information in this
news release will be made available in alternate format upon request (large
print, Braille, audio tape or disc) from the Central Office for Assistive
Services and Technology. Please specify which news release when placing your
request. Call 202.693.7773 or TTY 202.693.7775. |
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