Compliance September 8, 2009

Summary Prospectus Users Still 404(c) Eligible

September 8, 2009 (PLANSPONSOR.com) - Plan sponsors on Tuesday got a bit of a roadmap from the U.S. Department of Labor's Employee Benefits Security Administration (EBSA) on how to rely on a summary prospectus to meet the prospectus delivery component of safe-harbor provisions.
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An EBSA news release said Field Assistance Bulletin (FAB) 2009-03 describes how an individual account plan can stay under 404(c) protection under the Employee Retirement Income Security Act (ERISA) by giving out the new summary prospectus, under Securities and Exchange Commission (SEC) guidelines.  

“The department believes that the delivery of a summary prospectus by an identified plan fiduciary or designee to participants and beneficiaries satisfies the requirements of the ERISA section 404(c) regulations because the required contents of the summary prospectus provide key information about a mutual fund that will assist participants and beneficiaries in making informed investment decisions,” EBSA asserted in the news release.

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The summary prospectus is a short-form document, writtenin plain English and a user-friendly format (see SEC Adopts New Summary Prospectus ).    The document’s contents provide a summary of key information about a mutual fund that is useful to participants and beneficiaries in evaluating and comparing their plan investment options, EBSA said.

If an investor wants more details, the summary prospectus identifies a Web site linking electronically to the full version of the document. The new prospectus also provides a telephone number and e-mail addresses for free paper access or via e-mail for the full version as well as other information.

The FAB is available  here .

The SEC rule providing for the summary prospectus model is available  here .

Compliance September 5, 2009

Boehner Backs Savings Initiatives

September 5, 2009 (PLANSPONSOR.com) - House Republican Leader John Boehner (R-Ohio) threw his support behind President Obama's announcement of initiatives to help Americans increase their personal savings on Saturday.
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“Republicans are pleased President Obama has joined us in calling for action to help Americans rebuild their lost savings (see  Obama Administration Launches Retirement Initiatives ).   Millions of Americans have watched with anxiety in the past year as the value of their 401(k)s, college savings plans and other vital savings accounts have plummeted, and government should not be an impediment as they work to restore what they’ve lost,” he said in a press release .

Savings Recovery Action

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Boehner then added that “Months ago, House Republicans unveiled the  Savings Recovery Act [H.R. 2021]  to help Americans protect and rebuild their hard-earned savings as quickly as possible while making sure the federal government does not hinder the process.   To date, the Democratic leadership in Congress has blocked this common-sense proposal, and instead advocated legislation that could drive up 401(k) costs and reduce American workers’ access to high-quality, professional investment advice.   I hope the President will endorse our bill and work with us to move it through the Democratic-controlled Congress.”

The bill, sponsored by Boehner and 31 co-sponsors, has been referred for further action to the   Subcommittee on Health, Employment, Labor, and Pensions (see GOP Congressmen Offer Savings Proposal ).

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