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The prohibited transaction rules in ERISA and the IRC generally prevent a fiduciary investment adviser from recommending plan investment options if the adviser receives additional fees from the investment providers. Although these rules protect participants from conflicts of interest, ERISA provides exemptions from the rules in appropriate circumstances and permits the department to grant exemptions that have participant-protective conditions. An EBSA analysis found that investment mistakes are projected to be reduced by $7-$18 billion annually; with a cost between $2-$5 billion, making the net benefit between $5-$13 billion. This regulation is separate from and does not affect the Labor Department’s proposed rule on the definition of fiduciary investment advice, which the department recently announced that it will re-propose (see “EBSA to Re-Propose Definition of Fiduciary Rule”). The regulation will be published in the Oct. 25 Federal Register and can be viewed at http://s.dol.gov/J4.
An EBSA analysis found that investment mistakes are projected to be reduced by $7-$18 billion annually; with a cost between $2-$5 billion, making the net benefit between $5-$13 billion.
This regulation is separate from and does not affect the Labor Department’s proposed rule on the definition of fiduciary investment advice, which the department recently announced that it will re-propose (see “EBSA to Re-Propose Definition of Fiduciary Rule”).
The regulation will be published in the Oct. 25 Federal Register and can be viewed at http://s.dol.gov/J4.
Nicole Blimaneditors@plansponsor.com