DOL Sets 2015 Regulatory Agenda

Each year, the Department of Labor (DOL) sets an agenda for the year ahead. 2015 looks to be a busy year.

On the list

The DOL will unveil the following regulatory initiatives in January:

Fiduciary investment advice. This long-delayed proposal would amend the DOL’s rules to expand the scope of advisory activities deemed to be “investment advice” subject to fiduciary accountability.

Annuity selection safe harbor. The proposal will amend the rule listing what plan fiduciaries should consider when giving defined contribution plan participants an option of taking their distributions as an annuity.

Lifetime income disclosure and benefit statements. The DOL plans to implement the 2006 Pension Protection Act’s (PPA) quarterly benefit statement requirements. The regulation might also require plan sponsors to express the value of a participant’s benefit in the form of an income stream at retirement.

Voluntary fiduciary correction program (VFCP). Proposed changes to the VFCP (allowing fiduciaries to correct certain prohibited transactions) seek to expand the transactions eligible for correction and streamline other correction procedures. The proposal will come in the form of an entire restatement of the current program rules.

And about TDFs . . .

In addition, before the end of 2014, the DOL intends to re-open for comment a proposed regulation on disclosure requirements for target date funds (TDFs) and other qualified default investment alternatives (QDIAs). The DOL originally made the proposal in 2010, and the new proposal adds “greater specificity” to the 2007 regulations, issued just one year after the PPA’s enactment creating QDIAs. For example, the proposed regulations clarify that non-TDF QDIAs (such as managed accounts) are subject to the same disclosure rules as TDFs.

The regulations also would require that if the TDF’s name includes a date, the fund’s description must define who the fund is intended for and the date’s relevance. It must then address any assumptions about a participant’s contribution and withdrawal intentions in relationship to that date.

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