Investment Advice-Participants and Benficiaries; Hearing

Federal Register: October 14, 2008 (Volume 73, Number 199)

Proposed Rules

Page 60657-60658

From the Federal Register Online via GPO Access [wais.access.gpo.gov]

DOCID:fr14oc08-19

DEPARTMENT OF LABOR

Employee Benefits Security Administration 29 CFR Part 2550

RIN 1210-AB13

Investment Advice--Participants and Benficiaries; Hearing

AGENCY: Employee Benefits Security Administration, U.S. Department of

Labor.

ACTION: Proposed rule; Notice of hearing.

SUMMARY: Notice is hereby given that the Department of Labor will hold a hearing on the Department's proposed regulation under provisions of the Employee Retirement Income Security Act of 1974, as amended (ERISA, or the Act), and the Internal Revenue Code of 1986, as amended (Code), relating to the provision of investment advice to participants and beneficiaries of self-directed individual account plans and individual retirement accounts (IRAs).

DATES: The hearing will be held on October 21, 2008, beginning at 8 a.m., EST. Persons interested in presenting testimony and answering questions at the public hearing must submit requests and certain other information (as discussed below), by 3:30 p.m., EST, October 16, 2008.

ADDRESSES: The hearing will be held at the U.S. Department of Labor,

Room S-3215 A&B, 200 Constitution Avenue, NW., Washington, DC 20210.

FOR FURTHER INFORMATION CONTACT: Fil Williams, Office of Regulations and Interpretations, Employee Benefits Security Administration, (202) 693-8510. This is not a toll-free number.

SUPPLEMENTARY INFORMATION:

On August 22, 2008 (73 FR 49896), the Department of Labor (the

Department) published in the Federal Register a notice of proposed rulemaking to implement the provisions of the statutory exemption set forth in

Page 60658

sections 408(b)(14) and 408(g) of the Act, and parallel provisions of the Code, relating to the provision of investment advice described in the Act by a fiduciary adviser to participants and beneficiaries in participant-directed individual account plans, and beneficiaries of

IRAs (and certain similar plans).

Also on August 22, 2008, notice was published in the Federal

Register (73 FR 49924) that the Department has under consideration a proposed class exemption to permit the provision of investment advice to participants and beneficiaries of self-directed individual account plans, such as 401(k) plans, and IRAs. The Department proposed the class exemption on its own motion pursuant to section 408(a) of ERISA, and in accordance with the procedures set forth in 29 CFR Part 2570, subpart B (55 FR 32836, August 10, 1990).

Specifically, upon adoption, the proposed exemption would provide relief from the restrictions of section 406(a) and 406(b) of the Act, and from the taxes imposed by section 4975(a) and (b) of the Code, by reason of section 4975(c)(1) of the Code, for the provision of investment advice described in section 3(21)(A)(ii) of ERISA by a fiduciary adviser to a participant or beneficiary in an individual account plan or IRA (and certain similar plans), the acquisition, holding or sale of a security or other property pursuant to the investment advice, and the direct or indirect receipt of fees or other compensation by the fiduciary adviser (or any employee, agent, registered representative or affiliate thereof) in connection with such transactions.

Upon adoption, both the regulation and exemption would affect sponsors, fiduciaries, participants and beneficiaries of participant- directed individual account plans and IRAs, as well as providers of investment and investment advice-related services to such plans.

In the notice of proposed regulation and exemption, the Department invited all interested persons to submit written comments on or before

October 6, 2008. To date, the Department has received approximately 39 written comments both the proposed regulation and class exemption, many of which were from major industry groups. All written comments are available to the public, without charge, online at www.dol.gov/ebsa and at the Public Disclosure Room N-1513, Employee Benefits Security

Administration, U.S. Department of Labor, 200 Constitution Avenue, NW.,

Washington, DC 20210

In their written comments, four parties requested that the

Department hold a public hearing to more fully examine issues raised under the proposed regulation and class exemption, and expressed an interest in testifying. In view of the importance of these initiatives and their potential for significantly affecting the provision of investment advice to participants and beneficiaries in affected plans, and taking into account the concerns of these commenters, the

Department has decided to hold a public hearing. The primary purpose of this hearing is to further develop the public record regarding the regulation and to assist the Department in understanding the issues and other concerns raised by the written comments. Because information contained in previously-submitted written comments is already part of the public record, the Department expects that persons testifying at the hearing will present information not previously addressed in their written comments.

The hearing will be held on October 21, 2008, beginning at 8 a.m. and ending at 5 p.m., EST, in Room S-3215 A&B of the Department of

Labor, Francis Perkins Building, at 200 Constitution Avenue, NW.,

Washington, DC 20210.

Persons interested in presenting testimony and answering questions at this public hearing must submit, by 3:30 p.m., EST, October 16, 2008, the following information: (1) A written request to be heard; and

(2) An outline of the topics to be discussed, indicating the time allocated to each topic. To facilitate the receipt and processing of responses, EBSA encourages interested persons to submit their requests and outlines electronically by e-mail to e-ORI@dol.gov. Persons submitting requests and outlines electronically are encouraged not to submit paper copies.

Persons submitting requests and outlines on paper should send or deliver their requests and outlines (preferably at least three copies) to the Office of Regulations and Interpretations, Employee Benefits

Security Administration, Attn: Investment Advice Hearing, Room N-5655,

U.S. Department of Labor, 200 Constitution Avenue, NW., Washington, DC 20210. All requests and outlines submitted to the Department will be available to the public, without charge, online at www.dol.gov/ebsa and at the Public Disclosure Room N-1513, Employee Benefits Security

Administration, U.S. Department of Labor, 200 Constitution Avenue, NW.,

Washington, DC 20210.

The Department will prepare an agenda indicating the order of presentation of oral comments and testimony. In the absence of special circumstances, each presenter will be allotted ten (10) minutes in which to complete his or her presentation.

Any individuals with disabilities who may need special accommodations should notify Fil Williams on or before October 16, 2008.

Information about the agenda will be posted on http://www.dol.gov/ ebsa on or after October 16, 2008, or may be obtained by contacting Fil

Williams, Office of Regulations and Interpretations, Employee Benefits

Security Administration, U.S. Department of Labor, telephone (202) 693- 8510 (this is not a toll-free number).

Those individuals who make oral comments and testimonies at the hearing should be prepared to answer questions regarding their information and/or comments. The hearing will be transcribed.

Notice of Public Hearing

Notice is hereby given that a public hearing will be held on

October 21, 2008, concerning the Department's proposed regulation and class exemption for the provision of investment advice to participants and beneficiaries of self-directed individual account plans and IRAs.

The hearing will be held beginning at 8 a.m. in Room S-3215 A&B of the

U.S. Department of Labor, Francis Perkins Building, 200 Constitution

Avenue, NW., Washington, DC 20210.

Signed at Washington, DC, this 8th day of October 2008.

Bradford P. Campbell,

Assistant Secretary, Employee Benefits Security Administration, U.S.

Department of Labor.

FR Doc. E8-24337 Filed 10-10-08; 8:45 am

BILLING CODE 4510-29-P