EBSA
Proposed Rules
Target Date Disclosure
[ 5/24/2012]
[ PDF]
Federal Register, Volume 77 Issue 101 (Thursday, May 24, 2012)
[Federal Register Volume 77, Number 101 (Thursday, May 24, 2012)]
[Proposed Rules]
[Pages 30928-30929]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-12386]
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DEPARTMENT OF LABOR
Employee Benefits Security Administration
29 CFR Part 2550
RIN 1210-AB38
Target Date Disclosure
AGENCY: Employee Benefits Security Administration, Labor.
ACTION: Proposed rule; reopening of comment period.
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SUMMARY: The Department of Labor's Employee Benefits Security
Administration is reopening the period for public comment on proposed
regulatory amendments relating to enhanced disclosure concerning target
date or similar investments, originally proposed in a previously
published document in the Federal Register.
DATES: Written comments on the proposed regulation should be received
by the Department of Labor no later than July 9, 2012.
ADDRESSES: Written comments may be submitted to the addresses specified
below. All comments will be made available to the public. Warning: Do
not include any personally identifiable information (such as name,
address, or other contact information) or confidential business
information that you do not want publicly disclosed. All comments may
be posted on the Internet and can be retrieved by most Internet search
engines. Comments may be submitted anonymously. Persons submitting
comments electronically are encouraged not to submit paper copies.
Comments identified by RIN 1210-AB38 may be submitted by one of the
following methods:
Federal eRulemaking Portal: http://www.regulations.gov.
Follow the instructions for submitting comments.
Email: e-ORI@dol.gov.
Mail or Hand Delivery: Office of Regulations and
Interpretations, Employee Benefits Security Administration, Room N-
5655, U.S. Department of Labor, 200 Constitution Avenue NW.,
Washington, DC 20210, Attention: RIN 1210-AB38; Target Date Disclosure.
Comments received by the Department of Labor may be posted without
change to http://www.regulations.gov and http://www.dol.gov/ebsa, and
will be made available for public inspection at the Public Disclosure
Room, N-1513, Employee Benefits Security Administration, 200
Constitution Avenue NW., Washington, DC 20210.
FOR FURTHER INFORMATION CONTACT: Kristen Zarenko, Office of Regulations
and Interpretations, Employee Benefits Security Administration, (202)
693-8500. This is not a toll-free number.
SUPPLEMENTARY INFORMATION: The Employee Benefits Security
Administration of the Department of
[[Page 30929]]
Labor (Department) is reopening the period for public comment on
proposed regulatory amendments to improve the information that is
disclosed to participants and beneficiaries concerning investments in
target date or similar funds (TDFs). In November 2010, the Department
published a proposal to amend its qualified default investment
alternative regulation (29 CFR 2550.404c-5) and participant-level
disclosure regulation (29 CFR 2550.404a-5). The comment period for the
proposal originally closed on January 14, 2011.\1\ The proposal
includes more specific disclosure requirements for TDFs, based on
evidence that plan participants and beneficiaries would benefit from
additional information concerning these investments. Specifically, the
proposal would require an explanation of the TDF's asset allocation,
how the asset allocation will change over time, and the point in time
when the TDF will reach its most conservative asset allocation;
including a chart, table, or other graphical representation that
illustrates such change in asset allocation. The proposal also would
require, among other things, information about the relevance of the
TDF's ``target date;'' any assumptions about participants' and
beneficiaries' contribution and withdrawal intentions following the
target date; and a statement that TDFs do not guarantee adequate
retirement income and that participants and beneficiaries may lose
money by investing in the TDF, including losses near and following
retirement. Additional background and other information are contained
in the Supplementary Information published with the proposed
amendments.\2\
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\1\ See 75 FR 73987 (Nov. 30, 2010), proposing to amend the
Department's qualified default investment alternative regulation, 72
FR 60452 (Oct. 24, 2007), and participant-level disclosure
regulation, 75 FR 64910 (Oct. 20. 2010).
\2\ See id.
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Throughout this regulatory initiative, the Department has consulted
with the Securities and Exchange Commission (Commission). The
Department also specifically requested comment in its proposal on
whether the final rule should incorporate any of the elements of a rule
proposed by the Commission to address concerns regarding the potential
for investor misunderstandings about TDFs.\3\ In response, a large
number of commenters strongly encouraged careful coordination with the
Commission to avoid the potential cost and confusion (on the part of
plan sponsors and participants and beneficiaries) that could result if
the two agencies were to establish inconsistent disclosure
requirements. Because of the relationship between the Department's and
the Commission's regulatory proposals, the Department has continued to
consult with Commission staff while working to issue a final rule.
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\3\ Commission Release Nos. 33-9126, 34-62300, IC-29301 (June
2010).
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As part of its regulatory process, the Commission recently engaged
a consultant to conduct investor testing of comprehension and
communication issues relating to TDFs. A report presenting the findings
of this research on individual investors' understanding of TDFs and
related fund advertisements is publicly available on the Commissions'
Web site.\4\ To provide interested parties an opportunity to comment on
the results of this research and on its regulatory proposal, the
Commission recently reopened the comment period for its proposal.\5\
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\4\ http://www.sec.gov/comments/s7-12-10/s71210-58.pdf.
\5\ See 77 FR 20749 (April 6, 2012).
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As the results of this research also may be relevant to the
Department's proposal, and in order to provide all persons who are
interested in this research an opportunity to comment on the report,
the Department is reopening the comment period before action is taken
to finalize regulatory amendments. The Department invites additional
comments on the TDF proposal in light of this new research. To avoid
unnecessary duplication, the Department encourages parties who
submitted comments to the Commission in response to their reopened
comment period, and who consider their comments to be similarly
relevant to the Department's review of the above-mentioned research, to
submit (or reference) such comments, in response to this request, for
inclusion in the Department's public record. Parties also may comment
on any other matters that may have an effect on the Department's
proposal. Accordingly, the Department is extending the comment period
until July 9, 2012.
Signed at Washington, DC, this 15th day of May 2012.
Phyllis C. Borzi,
Assistant Secretary, Employee Benefits Security Administration,
Department of Labor.
[FR Doc. 2012-12386 Filed 5-23-12; 8:45 am]
BILLING CODE 4510-29-P
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