DOL revises FAB Question 30

On July 30, The Department of Labor's Employee Benefits Security Administration issued a revised Field Assistance Bulletin 2012–02R which changed their position on the treatment of brokerage windows and plan fiduciaries duties to investigate how participants were investing in individual brokerage accounts, as discussed in Question 30 (FAQ 30).

FSI was concerned that the changes included in FAQ 30 had not been subject to public notice and comment and an appropriate cost/benefit analysis.  FAB Question 30 went beyond providing interpretive guidance with respect to the participant disclosure regulations and set forth new rules that were not previously contained in any guidance issued by the Department of Labor.  Specifically, (1) a plan fiduciary may have liability if he does not designate a manageable number of investment alternatives, and (2) a plan fiduciary may have liability if he does not provide the regulatory disclosures with respect to investments in which a significant number of participants are invested through a brokerage window available under the plan.

FSI was a part of an active coalition that set out to address the challenges in Question 30 by meeting with the DOL and Members of Congress on this issue.  We applaud the DOL’s revision of the FAB 2012-02R.  Click here to read the revisions.