Academic journal article Journal of Accountancy

New DOL Ruling Eases PFP Worries

Academic journal article Journal of Accountancy

New DOL Ruling Eases PFP Worries

Article excerpt

The Department of Labor's Interpretive Bulletin 96-1, Participant Investment Education, released June 11, removes roadblocks for companies that provide financial guidance to their employees on 401(k) and other pension plans. For years, those providing such guidance, including CPAs, have had to worry about whether they were "fiduciaries," with potential liability for participant-directed investments, because they were providing investment advice under the Employee Retirement Income Security Act.

The bulletin creates safe harbors for those providing plan information, general financial and investment information, asset allocation models and interactive investment materials. Assistant Labor Secretary Olena Berg said the DOL's goal was to make it easier for plan participants to get the information they needed.

"I was surprised that the bulletin went beyond the scope of section 404(c)," said Bill Arnone, a partner of Ernst & Young. "The DOL is in effect saying: 'This is how far those of you serving these employees can go without becoming fiduciaries.'" The bulletin's effective date goes back over 20 years to January 1, 1975, so it includes many time-honored advisory practices. CPAs can thus be reassured that many services they've been providing for years are retroactively approved. …

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