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Release Date: 09/27/2004
Release Number: 04-1892-NAT
Contact Name: Gloria Della
Phone Number: 202.693.8664
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Washington, DC - The U.S. Department of Labor
today announced the release of a final regulation that will provide
employee benefit plan fiduciaries with guidance to help them preserve
workers’ retirement savings. |
“Every
little bit counts when talking about saving for retirement” said Ann L.
Combs, Assistant Secretary of the department’s Employee Benefits
Security Administration (EBSA). “Unfortunately, some workers change jobs
and fail to tell their employers what to do with their retirement
accounts. This rule will ensure that those savings are preserved for
retirement.” |
Certain
distributions of retirement plan benefits must be automatically rolled
over into an individual retirement plan when a separated worker fails to
elect a distribution method. The final rule adopted by the department
protects retirement plan fiduciaries from liability under the Employee
Retirement Income Security Act (ERISA) by providing a safe harbor in
connection with two aspects of the automatic rollover process – the
selection of an institution to provide the individual retirement plan and
the selection of investments for such plans. |
In
order to obtain relief under the safe harbor, a plan fiduciary must
satisfy certain conditions. Among other things, the final rule provides
that the selected plan provider must be qualified to offer individual
retirement plans; investment products must be designed to preserve
principal; and the fees and expenses for such plans may not exceed those
charged by the selected plan provider to its other individual retirement
plan customers. The department also is adopting a class exemption from the
prohibited transaction rules of ERISA that permits certain plan sponsors
to use their own services and products in connection with rollovers from
their own retirement plan. |
The
final rule and related class exemption is to be published in the September
28, 2004 Federal Register. |
U.S.
Labor Department news releases are accessible on the Internet at
www.dol.gov. The information in this news release will be made available
in alternate format upon request (large print, Braille, audio tape or
disc) from the COAST office. Please specify which news release when
placing your request at 202.693.7765 or TTY 202.693.7755. The U.S.
Department of Labor is committed to providing America's employers and
employees with easy access to understandable information on how to comply
with its laws and regulations. For more information, please visit
www.dol.gov/compliance. |
