Proposed Regs Implement PPA Intent to Increase Access to Participant Investment Advice

On Aug. 22, 2008, the Department of Labor (DOL) issued proposed regulations outlining the requirements for a fiduciary that provides investment advice to participants in participant-directed individual account plans.  Under ERISA and the Internal Revenue Code (the Code), a fiduciary may not render investment advice to plan participants regarding investments that result in the payment of additional advisory and other fees to that fiduciary or its affiliates.  This restriction significantly limits the availability of investment advice programs, especially those offered to existing clients by financial institutions that serve as plan trustee, investment provider and recordkeeper for these clients’ individual account retirement plans.

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