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Release Date: September 11, 2007
Release Number: 07-1155-NAT
Contact Name: Gloria Della/Richard Manning
Phone Number: 202.693.8664/202.693.4676
Washington – The U.S. Department of Labor
today announced an interim final rule that amends Interpretative
Bulletin 95-1 to limit the application of the bulletin to the selection
of annuity providers for benefit distributions from defined benefit
plans.
The department also announced a proposed rule to
provide guidance, in the form of a safe harbor, for the selection of
annuity providers by fiduciaries for benefit distributions from
individual account plans, such as 401(k) plans.
These rules are being issued pursuant to the Pension
Protection Act of 2006, which requires the Labor Department to issue
regulations clarifying that the selection of an annuity contract as an
optional form of distribution from an individual account plan is not
subject to the “safest available” standard under Interpretive
Bulletin 95-1, but is subject to all otherwise applicable fiduciary
standards.
“The new safe harbor rules will help fiduciaries in
prudently choosing annuity providers for distributions from their
401(k)-type plans,” said Bradford P. Campbell, assistant secretary of
labor for the department’s Employee Benefits Security Administration.
Under the proposed safe harbor, fiduciaries must:
Conduct an objective, thorough and analytical search
to identify and select providers.
Consider the need to engage an expert to assist in
its evaluation of providers.
Appropriately conclude that the annuity provider
would be financially able to make all future payments under the
contract, and the cost of the contract is reasonable in relation to the
benefits and services to be provided under the contract.
The interim final and proposed rules are to be
published in the September 12, 2007, edition of the Federal Register.
While the interim final rule will be effective 30 days after publication
in the Federal Register, the public is invited to submit written
comments on both the interim final and proposed rules. Public comments
should be submitted electronically to the U.S. Department of Labor’s
Employee Benefits Security Administration at e-ORI@dol.gov or through
the federal e-rulemaking portal at www.regulations.gov.
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page. The information in this news release will be made available
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placing your request at 202.693.7828 or TTY 202.693.7755. The U.S.
Department of Labor is committed to providing America's employers and
employees with easy access to understandable information on how to comply
with its laws and regulations. For more information, please visit the
Department's Compliance
Assistance page.
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