Labor Department Backs Off Proposed Retirement Advice Rule
The Department of Labor is dropping a rule proposed during the final days of the Bush administration that would have allowed 401(k) providers to offer advice to investors even if it involved a plan in which its own funds were sold. "We believe the final investment advice regulation published in the Jan. 21 Federal Register went too far in permitting investment advice arrangements not specifically contemplated by the statutory exemption," said Phyllis Borzi, assistant secretary of the Employee Benefits Security Administration at the DOL. "We are taking a fresh look at the regulation that was issued and are working to bring it more closely in line with the [Pension Protection Act of 2006] statutory language." Some legislators have voiced concern that the proposal would have allowed a conflict of interest for administrators that sell their own funds in 401(k) plans.