Legal Alert: Participant Investment Advice Regulation Resurrected


On February 26, the Department of Labor issued its long-awaited re-proposal of the Participant Investment Advice regulation that was issued last January, but which never went into effect, and which was eventually withdrawn on November 20, 2009. The new proposal is the result of the Department's reconsideration of a number of legal and policy issues relating to the prior regulation as well as various public comments that were received in response the Department's request.

The new proposal contains regulations applying the statutory prohibited-transaction exemption under Sections 408(b)(14) and 408(g) of ERISA, and sections 4975(d)(17) and 4975(f)(8) of the Internal Revenue Code, which were enacted by the Pension Protection Act of 2006. Those sections provide an exemption for certain transactions under which a plan fiduciary provides investment advice to participants either through use of a certified computer model, or under a "fee-leveling" arrangement.

Please see full alert below for more information.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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