A
Industry experts are worried that the delay in publishing the final rules may mean a change of mind that the Labor Department is having regarding default 401(k) investment options.
The proposal suggested three options, including a balanced mutual fund, a lifecycle fund and professionally managed accounts. Automatically enrolling workers could add perhaps $90 billion to the 401(k) industry.
However, insurers were not pleased that their products were left out of the mix. The list did not include safe products such as low-yielding money market mutual funds and stable-value insurance products, including guaranteed investment contracts, which have long been options for 401(k) plans.
“It’s an appropriate default option,” that should be available to all employers, said Jack Dolan, a spokesman for the
The ACLI is in talks with the Labor Department and the Office of Management and Budget, which examines federal regulations. Other labor unions such as the American Federation of State, County and Municipal Employees and lawmakers, including Sens. Edward Kennedy (D-Mass) and Johnny Isakson (R-Ga.), are calling for a review of the proposal as well.
“We are considering all the comments and making significant progress on the final rule. We are working hard to publish the final rule as soon as possible, consistent with the legal requirements of the regulatory process,” said Bradford Campbell, acting assistant secretary in the Labor Department’s Employee Benefits Security Administration, through a spokeswoman.
The staff of Money Management Executive ("MME") has prepared these capsule summaries based on reports published by the news sources to which they are attributed. Those news sources are not associated with MME, and have not prepared, sponsored, endorsed, or approved these summaries.
