Secretary of Labor Hilda L. Solis Print This Page Print This Page  Decrease Text Size Increase Text Size Text Size  Email This Page E-mail This Page

Archived News Release — Caution: Information may be out of date.

U.S. DEPARTMENT OF LABOR

Pension and Welfare Benefits Administration

EBSA Press Release: Labor Department Permits Receipt of Brokerage Services on IRAs and Self-Employed Plans [07/29/1996]

For more information call: (202) 219-8921

 
	 
 Millions of self-employed workers with individual retirement accounts
		(IRAs) or Keogh pension plans would get free or low cost brokerage services
		under a proposal by the U. S. Labor Department.
 
	 
 Under the department's proposed exemption, broker-dealers could provide
		services as incentives for maintaining IRAs and Keogh plans. The proposal would
		let IRA and Keogh customers receive services otherwise prohibited by Employee
		Retirement Income Security Act if certain conditions are met.
 
	 
 Services could 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.
 
	 
 The proposed exemption would require the following conditions:
 
	 
     
		
  •  the IRA or Keogh plan be established and maintained for the
		  exclusive benefit of the participant, a spouse or beneficiary;
    •  
		
  •  services offered must be of the type the broker-dealer could offer
		  consistent with federal and state laws;
    •  
		
  •  services be provided in the ordinary course of business by brokers
		  to customers who qualify for such services but do not maintain IRA or Keogh
		  plans with the broker- dealer;
    •  
		
  •  the account value or the fees incurred by the IRA or Keogh plan must
		  be the same as that for any account eligible to receive reduced or no cost
		  services;
    •  
		
  •  IRA and Keogh customers must be eligible for the same services
		  offered to other customers with the same account values or who generate the
		  same amount of fees; and
    •  
		
  •  investment performance on IRA and Keogh investments must be no less
		  favorable than that of identical investments made by customers ineligible for
		  the reduced or no cost investment services.
    •  
	 
 
	 
 The proposed exemption is similar to the relief provided under
		Prohibited Transaction Exemption 93-2 which permits individuals who maintain
		IRAs and Keogh plans to receive reduced or no cost banking services.
 
	 
 The proposal is scheduled to be published in the July 31 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, Attn: D-09707.
 
	 

 
	 
Archived News Release — Caution: Information may be out of date.