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Secretary of Labor Thomas E. Perez

DOL/EBSA

RIN: 1210-AB35

Publication ID: Fall 2010

Title: Statutory Exemption for Provision of Investment Advice

Abstract: Section 601 of the Pension Protection Act (Pub. L. 109-280) amended ERISA by adding new section 408(b)(14) and 408(g). Section 408(b)(14) is a prohibited transaction exemption that permits the provision of investment advice to participants or beneficiaries of certain individual account plans if the investment advice is provided under an "eligible investment advice arrangement," as defined in section 408(g). In order to qualify as an “eligible investment advice arrangement,” the arrangement must either provide that any fees received by the adviser do not vary depending on the basis of any investment options selected, or use a computer model under an investment advice program that meets the criteria set forth in section 408(g) in connection with the provision of investment advice. Further, with respect to both types of advice arrangements, the investment adviser must disclose to advice recipients all fees that the adviser or any affiliate is to receive in connection with the advice. Section 408(g) requires that the computer model which serves as the basis for an eligible investment advice arrangement be certified by an "eligible investment expert" in accordance with rules prescribed by the Secretary of Labor. Section 408(g) also directs the Secretary of Labor to issue a model form for the required disclosure of fees.

Agency: Department of Labor(DOL)

Priority: Economically Significant

RIN Status: Previously published in the Unified Agenda

Agenda Stage of Rulemaking: Final Rule Stage

Major: Yes

Unfunded Mandates: No

CFR Citation: 29 CFR 2550 (To search for a specific CFR, visit the Code of Federal Regulations.)

Legal Authority: 29 USC 1108(g); 29 USC 1135; PL 109-280, sec 601(a); Pension Protection Act of 2006; ERISA sec 408(g); ERISA sec 505

Legal Deadline: None

Timetable:

Action

Date

FR Cite

NPRM

03/02/2010

75 FR 9360

NPRM Comment Period End

05/05/2010

 

Final Action

05/00/2011

 

Regulatory Flexibility Analysis Required: Undetermined

Government Levels Affected: None

Federalism: No

Included in the Regulatory Plan: No

RIN Data Printed in the FR: No

Related RINs: Related to 1210-AB13

Agency Contact:
Fred Wong
Senior Pension Law Specialist
Department of Labor
Employee Benefits Security Administration
200 Constitution Avenue NW., FP Building, Room N-5655,
Washington, DC 20210
Phone:202 693-8500
Fax:202 219-7291