McDermott Will & Emery
July 19, 2010

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Alston + Bird
May 3, 2010

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Seyfarth Shaw
March 31, 2010

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White & Case
March 16, 2010

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Dechert
March 2010

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McGuireWoods
March 12, 2010

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Pillsbury
March 10, 2010

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Drinker Biddle
March 10, 2010

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K+L Gates
March 9, 2010

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Jenner & Block
March 5, 2010

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Paul Hastings
March 4, 2010

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Goodwin Procter
March 3, 2010

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Morgan Lewis
March 2, 2010

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Bingham
March 2, 2010

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Sutherland
March 1, 2010

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Steptoe & Johnson
ERISA Advisory
February 3, 2009

Seyfarth Shaw
February 5, 2009

Sutherland
January 28, 2009
This Alert reviews what is the “most substantial effort to date, on the part of Congress and DOL, to support retirement plan participants and IRA beneficiaries directing the investment of their retirement accounts with professional investment advice.”

On January 21, 2009, the DOL published final regulations that implement exemptions to rules that generally prohibit fiduciaries of pension plans from furnishing investment advice to participants in participant-directed individual account plans such as 401(k) plans and individual retirement accounts. The exemptions reflect a trend towards retirement plans where beneficiaries are otherwise presented with investment decisions which, when combined with existing laws, “had the unintended consequence of reducing the portion of retirement assets that are invested with the benefit of professional investment advice.”

The final regulations would create exemptions to ERISA rules and allow investment advice pursuant to (i) arrangements that satisfy a level fee requirement as to the individual employee, agent or representative who provides investment advice (ie fees that do not vary based on a chosen investment option), and (ii) certain “off-model” individualized advice, generally in a computer model environment.

The final guidance also provides for a class exemption which, subject to conditions would allow a fiduciary adviser to provide further “off-model” investment advice.

Please note that (i) the rules, which are supposed to become effective March 23, 2009, are caught up in a general request from the new administration that heads of executive departments and agencies consider a 60-day extension and a reopening of the comment period for regulations that have been published in the Federal Register but are not yet effective and (ii) Congressional opponents of the new rules have promised to attempt to block their implementation. 

Morgan Lewis
January 26, 2009
This Alert reviews final regulations from the Department of Labor which establish several exemptions to rules that otherwise prevent fiduciaries of pension plans from giving financial advice to participants in participant-directed individual account plans such as 401(k) plans and individual retirement accounts. Under the new rules, which are intended to ensure objectivity and remove financial conflicts of interest, investment advice will generally be permitted by a “fiduciary adviser” if provided  through the use of an unbiased computer model or by an adviser that is compensated on a “fee-level” basis (ie where fees do not vary regardless of investment options chosen by a participant). The final regulations also include a class exemption which would permit further individualized investment advice to be given to participants and beneficiaries in participant-directed individual account plans and IRA beneficiaries following the furnishing of recommendations generated by a computer model or, as with IRAs where modeling is not possible, the provision of certain investment education material.

The Alert notes that the rules, which are supposed to become effective March 23, 2009, are caught up in a general request from the new administration that heads of executive departments and agencies consider a 60-day extension and a reopening of the comment period for regulations that have been published in the Federal Register but are not yet effective. This may result in a postponement of the effective date until May 23, 2009.

McGuire Woods
September 25, 2008
This Alert examines proposed DOL regulations that would provide guidance on meeting the requirements for the eligible investment advice arrangements exemption for Individual Account Plans and IRAs. The regulations are intended to further the Congressional intent of facilitating the provision of investment advice to participants in individual account retirement plans (including 401(k) and profit-sharing plans).

Dewey & LeBoeuf
Client Alert
September 11, 2008
This Alert examines regulations proposed by the Department of Labor on August 22, 2008 which “are expected to significantly expand the opportunities for financial services providers to furnish investment advice to participants and beneficiaries of Individual Account Plans and IRAs to which they also provide investment options.” The proposed rules (i) amend provisions of the statutory prohibited transaction exemption (for advice with respect to participant- directed individual account plans and IRAs and (i) propose a prohibited transaction class exemption that would provide relief to some investment advice arrangements not covered by the statutory exemption.

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