OMB files this comment in accordance with 5 CFR 1320.11( c ). This OMB action is not an approval to conduct or sponsor an information collection under the Paperwork Reduction Act of 1995. This action has no effect on any current approvals. If OMB has assigned this ICR a new OMB Control Number, the OMB Control Number will not appear in the active inventory. For future submissions of this information collection, reference the OMB Control Number provided. The agency will respond to comments received on the ICR in the final rule.
table that charts list comparision
Inventory as of this Action
Requested
Previously Approved
36 Months From Approved
0
0
0
0
0
0
0
0
0
The Department is proposing a regulation under ERISA section 3(21)(A)(ii) and Code section 4975(e)(3)(B) (Proposed Regulation). The Proposed Regulation would amend the definition of a "fiduciary" under ERISA and the Code to specify when a person is a fiduciary by reason of the provision of investment advice for a fee or other compensation regarding assets of a plan or IRA (i.e., an investment advice fiduciary). If adopted, the Proposed Regulation would replace an existing regulation dating to 1975, with the aim of more appropriately distinguishing between the sorts of advice relationships that should be treated as fiduciary in nature and those that should not.
Paragraph (b)(1)(i) of the proposed regulation provides a carve-out to the general investment advice fiduciary definition for advice provided in connection with an arm's length sale, purchase, loan, or bilateral contract between a sophisticated plan investor that has 100 or more plan participants and the adviser ("seller's carve-out"). It also applies in connection with an offer to enter into such a transaction or when the person providing the advice is acting as representative, such as an agent for the plan's counterparty. The person must provide advice to a plan fiduciary who is independent of the counterparty and must exercise authority or control respecting the management or disposition of the plan's assets, with respect to an arm's length sale, purchase, loan or bilateral contract between the plan and the counterparty, or with respect to a proposal to enter into such a sale, purchase, loan or bilateral contract.
The seller's carve-out applies if certain conditions are met. Among these conditions are the following: the adviser must obtain a written representation from the plan fiduciary that (1) the plan fiduciary is a fiduciary who exercises authority or control respecting the management or disposition of the employee benefit plan's assets (as described in ERISA section 3(21)(A)(i), (2) the employee benefit plan has 100 or more participants covered under the plan, and (3) the fiduciary will not rely on the person to act in the best interests of the plan, to provide impartial investment advice, or to give advice in a fiduciary capacity.
Another carve-out is directed to service providers, such as recordkeepers and third party administrators that offer a "platform" or selection of investment vehicles to participant-directed individual account plans under ERISA. Specifically, paragraph (b)(3) of the proposed regulation makes clear that persons who merely market and make available securities or other property through a platform or similar mechanism to an employee benefit plan without regard to the individualized needs of the plan and its participants, or beneficiaries do not act as investment advice fiduciaries. In order for the platform provider carve-out to apply, the person providing the platform must provide a written disclosure to the plan fiduciary stating that the person is not undertaking to provide impartial investment advice or to give advice in a fiduciary capacity.
Paragraph (b)(6) of the proposal makes clear that furnishing and providing certain specified investment educational information and materials (including certain investment allocation models and interactive plan materials) to a plan, plan fiduciary, participant, beneficiary or IRA owner will not constitute the rendering of investment advice if certain conditions are met. One of the conditions is that the asset allocation models or interactive materials must explain all material facts and assumptions on which the models and materials are based and include a statement indicating that, in applying particular asset allocation models to their individual situations, participants, beneficiaries, or IRA owners should consider their other assets, income, and investments in addition to their interests in the plan or IRA to the extent they are not taken into account in the model or estimate.
US Code:
29 USC 1135
Name of Law: Employee Retirement Income Security Act
The Department is proposing a regulation under ERISA section 3(21)(A)(ii) and Code section 4975(e)(3)(B) (Proposed Regulation). The Proposed Regulation would amend the definition of a "fiduciary" under ERISA and the Code to specify when a person is a fiduciary by reason of the provision of investment advice for a fee or other compensation regarding assets of a plan or IRA (i.e., an investment advice fiduciary). If adopted, the Proposed Regulation would replace an existing regulation dating to 1975, with the aim of more appropriately distinguishing between the sorts of advice relationships that should be treated as fiduciary in nature and those that should not.
Paragraph (b)(1)(i) of the proposed regulation provides a carve-out to the general investment advice fiduciary definition for advice provided in connection with an arm's length sale, purchase, loan, or bilateral contract between a sophisticated plan investor that has 100 or more plan participants and the adviser ("seller's carve-out"). It also applies in connection with an offer to enter into such a transaction or when the person providing the advice is acting as representative, such as an agent for the plan's counterparty. The person must provide advice to a plan fiduciary who is independent of the counterparty and must exercise authority or control respecting the management or disposition of the plan's assets, with respect to an arm's length sale, purchase, loan or bilateral contract between the plan and the counterparty, or with respect to a proposal to enter into such a sale, purchase, loan or bilateral contract.
The seller's carve-out applies if certain conditions are met. Among these conditions are the following: the adviser must obtain a written representation from the plan fiduciary that (1) the plan fiduciary is a fiduciary who exercises authority or control respecting the management or disposition of the employee benefit plan's assets (as described in ERISA section 3(21)(A)(i), (2) the employee benefit plan has 100 or more participants covered under the plan, and (3) the fiduciary will not rely on the person to act in the best interests of the plan, to provide impartial investment advice, or to give advice in a fiduciary capacity.
Another carve-out is directed to service providers, such as recordkeepers and third party administrators that offer a "platform" or selection of investment vehicles to participant-directed individual account plans under ERISA. Specifically, paragraph (b)(3) of the proposed regulation makes clear that persons who merely market and make available securities or other property through a platform or similar mechanism to an employee benefit plan without regard to the individualized needs of the plan and its participants, or beneficiaries do not act as investment advice fiduciaries. In order for the platform provider carve-out to apply, the person providing the platform must provide a written disclosure to the plan fiduciary stating that the person is not undertaking to provide impartial investment advice or to give advice in a fiduciary capacity.
Paragraph (b)(6) of the proposal makes clear that furnishing and providing certain specified investment educational information and materials (including certain investment allocation models and interactive plan materials) to a plan, plan fiduciary, participant, beneficiary or IRA owner will not constitute the rendering of investment advice if certain conditions are met. One of the conditions is that the asset allocation models or interactive materials must explain all material facts and assumptions on which the models and materials are based and include a statement indicating that, in applying particular asset allocation models to their individual situations, participants, beneficiaries, or IRA owners should consider their other assets, income, and investments in addition to their interests in the plan or IRA to the extent they are not taken into account in the model or estimate.
$0
No
No
No
No
No
Uncollected
Chris Cosby 202 693-8540
Reginfo record details
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.
COI Reg Supporting Statementfinal.docx
Investment Education Carve-Out