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CCH® PENSION — 07/06/12

Re-proposed fiduciary regs a priority project, Borzi tells conference

Phyllis Borzi, Assistant Secretary of Labor of the Employee Benefits Security Administration (EBSA), said that re-proposed regulations on the definition of "fiduciary" are a priority project for the Labor Department. Borzi spoke in Chicago on June 21, 2012 at the Great Lakes Benefits Conference, co-sponsored by the IRS and the American Society of Pension Professionals & Actuaries (ASPPA). Borzi did not say when the re-proposed rules are expected to be issued; the priority, she said, "is to get it right."

New fiduciary rules are necessary, Borzi said, because "since 1975 the marketplace has changed dramatically." 401(k) plans didn't exist and IRAs were just starting up, she noted. EBSA issued proposed regulations in October 2010 that would more broadly define the circumstances under which a person is considered a "fiduciary" under ERISA by reason of giving investment advice to an employee benefit plan. The rules have come under some intense criticism and late last year EBSA announced that it would be re-proposing the rules.

EBSA is working on a re-proposal that will address "legitimate criticisms," Borzi said. The re-proposal will come with "robust economic analysis" and a "more sharply focused text," she stated. In a June 20, 2012 letter to key House lawmakers, Borzi added that "it is our intention to include accompanying proposed prohibited transaction guidance, as well as the relevant economic analysis, with any proposed regulation."

Source: Speech by Phyllis Borzi, Great Lakes Benefits Conference, June 21, 2012.

For more information, visit http://www.wolterskluwerlb.com/rbcs.

For more information on this and related topics, consult the CCH Pension Plan Guide, CCH Employee Benefits Management, and Spencer's Benefits Reports.

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