This final regulation implements the
provisions of the statutory exemption set forth in sections
408(b)(14) and 408(g) of the Employee Retirement Income Security
Act, as amended (ERISA or the Act), and parallel provisions in
sections 4975(d)(17) and 4975(f)(8) of the Internal Revenue Code of
1986, as amended (Code), relating to the provision of investment
advice described in section 3(21)(A)(ii) of the Act by a fiduciary
adviser to participants and beneficiaries in participant-directed
individual account plans, such as 401(k) plans, and beneficiaries
of individual retirement accounts (and certain similar
plans).
US Code:
29 USC 1108(b)(14) Name of Law: Employee Retirement Income
Security Act of 1974
US Code: 29
USC 1108(g) Name of Law: Employee Retirement Income Security
Act of 1974
PL: Pub.L. 109 - 280 601 Name of Law: Pension
Protection Act of 2006
The Pension Protection Act of
2006 (Pub. L. 109-280) amended the Employee Retirement Income
Security Act of 1974 (ERISA) and the Internal Revenue Code (Code)
to include a statutory exemption for providing investment advice to
participants and beneficiaries in self-directed defined
contribution individual account ERISA-covered plans (Plans) and
beneficiaries of individual retirement accounts, individual
retirement annuities, Archer MSAs, health savings accounts and
Coverdell education savings accounts (collectively IRAs) described
in the Code. The statutory exemption provides relief from the
prohibited transaction provisions of ERISA, and the parallel
provisions of the Code. The increase in burden occurred, because
the Department determined that a regulation providing guidance on
various aspects of the statutory exemption provides more clarity
thereby encouraging the provision of investment advice under the
statutory exemption. Consistent with the statutory exemption, the
Department has included specific disclosure, recordkeeping, and
audit requirements as conditions of the regulation. These
information collections are designed to clarify how the statutory
exemption applies to investment advice arrangements involving
participants or beneficiaries of Plans and IRAs (collectively,
Participants). The information required depends in part on whether
the fiduciary adviser giving the advice meets the conditions of the
statutory exemption by providing investment advice through use of a
computer model, or by providing advice that does not result in
varying compensation to the fiduciary adviser entity from
investments made in accordance with the investment advice. The
burden increase also occurred, because the Department determined
that additional relief for investment advice is appropriate in
order to increase the availability of investment advice to
participants and beneficiaries in Plans and IRAs (collectively,
Participants) that could provide the benefit of avoiding investment
mistakes. Therefore, it is issuing a class prohibited transaction
exemption as part of the final regulation.
$0
No
No
Uncollected
Uncollected
Uncollected
Uncollected
Chris Cosby 202
693-8540
No
On behalf of this Federal agency, I certify that
the collection of information encompassed by this request complies
with 5 CFR 1320.9 and the related provisions of 5 CFR
1320.8(b)(3).
The following is a summary of the topics, regarding
the proposed collection of information, that the certification
covers:
(i) Why the information is being collected;
(ii) Use of information;
(iii) Burden estimate;
(iv) Nature of response (voluntary, required for a
benefit, or mandatory);
(v) Nature and extent of confidentiality; and
(vi) Need to display currently valid OMB control
number;
If you are unable to certify compliance with any of
these provisions, identify the item by leaving the box unchecked
and explain the reason in the Supporting Statement.
Investment Advice to Participants and Beneficiaries