Printer Friendly

LABOR DEPARTMENT APPROVES REGULATION SIMPLIFYING RETIREMENT PLAN DISCLOSURE FOR EMPLOYEES

 LABOR DEPARTMENT APPROVES REGULATION
 SIMPLIFYING RETIREMENT PLAN DISCLOSURE FOR EMPLOYEES
 WASHINGTON, Oct. 15 /PRNewswire/ -- A new regulation published by the U.S. Labor Department this week is a first step toward providing the participants of defined contribution retirement plans with sufficient information about their investment options, but does not go far enough, according to the Investment Company Institute, the national trade association of the mutual fund industry.
 The regulation interprets section 404(c) of the Employee Retirement Income Security Act of 1974 (ERISA), which allows employers and other plan fiduciaries the option of limiting their responsibility for the investment decisions of employees who "exercise control" over their retirement assets. The new regulations require that in order to be able to "exercise control", employees must be provided with information about their investment options.
 "This regulation is an important first step in that it recognizes that employees must have information if they are to make informed investment decisions," said Matthew P. Fink, president of the institute. "However, the regulation falls far short of what is required to protect millions of workers and their families. The regulation is deficient in several ways."
 These include:
 -- The regulation is not mandated for every plan covered by ERISA, but rather is optional for each employer.
 -- Under the regulation much key information (such as the annual operating expenses of the various investment vehicles) would not be distributed to the employee, but would be available only upon request. This violates Justice Brandeis' admonition that "To be effective, knowledge of the facts must be actually brought home to the investor," said Fink.
 -- The regulation applies only to private retirement plans covered by ERISA and not to thousands of plans offered for government employees.
 "The deficiencies in the DOL regulation underscore the need for legislative reform," Fink said, "to require that all pooled investment products sold to plan participants register with the Securities and Exchange Commission and provide full and fair disclosure to every participant responsible for investing his or her own retirement monies."
 -0- 10/15/92
 /CONTACT: Malin Jennings, 202-955-8415, or Erick Kanter, 202-955-3535, both of the Investment Company Institute/ CO: Investment Company Institute ST: District of Columbia IN: FIN SU:


KD -- DC016 -- 0421 10/15/92 12:21 EDT
COPYRIGHT 1992 PR Newswire Association LLC
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1992 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Publication:PR Newswire
Date:Oct 15, 1992
Words:372
Previous Article:/FIRST AND FINAL ADD -- NY011 -- FIRST CHICAGO EARNINGS/
Next Article:ITT HARTFORD AND AARP RENEW CONTRACT FOR AUTO AND HOMEOWNERS INSURANCE PROGRAM


Related Articles
Limits on company stock in 401(k)s. (Government).
President issues Bill of Rights directive. (Short Takes).
MassMutual Urges Federal Panel to Support Improved Retirement Plan Disclosure; Calls current reporting mechanisms inadequate, suggests changes to...
U.S. Labor Department Sues New Britain, Conn., Company and Its President to Recover Misused Assets of Employee Benefit Plan.
Congressional and regulatory activities in the pension and benefits arena.
Retirement Savings: Better Information and Sponsor Guidance Could Improve Oversight and Reduce Fees for Participants.
Private Pensions: Additional Changes Could Improve Employee Benefit Plan Financial Reporting.

Terms of use | Copyright © 2016 Farlex, Inc. | Feedback | For webmasters