Benefits Law Update

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Update Regarding Expanded Definition of "Fiduciary"

The Employee Benefits Security Administration (EBSA) will hold a hearing to consider issues regarding the adoption of a new regulation defining when a person is considered a "fiduciary" by reason of giving investment advice to a benefit plan or to a plan's participants. The hearing will be held on held on March 1, 2011. EBSA also extended the period for submitting comments on the proposal until February 3, 2011.

As we explained in an earlier post, the new proposed rule under ERISA, Prop. Labor Reg. 2510.3-21(c), would more broadly define the circumstances under which a person is considered a "fiduciary" by reason of giving investment advice to an employee benefit plan or to a plan's participants. This would update a 35-year-old rule that, in the view of EBSA, inappropriately limited the types of investment advice relationships that could give rise to fiduciary duties on the part of the investment advisor. The changes made by the proposed rule are intended to take into account the significant changes in both the financial services industry and the expectations of plan officials and participants who receive investment advice.

Persons interested in presenting testimony and answering questions at the public hearing must submit, by 3:30 p.m. EST, February 9, 2011, a written request to testify and an outline of the issues they would like to address at the hearing. EBSA encourages interested persons to submit their requests and outlines by e-mail to [email protected], subject line: Fiduciary Definition Hearing.

Topics: Fiduciary Duties, Plan Administration, Retirement Plans