E8-24338. Hearing on Proposed Class Exemption for Investment Advice

AGENCY:

Employee Benefits Security Administration, U.S. Department of Labor.

ACTION:

Notice of hearing.

SUMMARY:

Notice is hereby given that the Department of Labor will hold a hearing on the Department's proposed class exemption from certain prohibited transaction restrictions of the Employee Retirement Income Security Act of 1974, as amended (ERISA, or the Act), and from certain taxes imposed by the Internal Revenue Code of 1986, as amended (Code), for the provision of investment advice to participants and beneficiaries of self-directed individual account plans and individual retirement accounts (IRAs).

DATES:

The hearing will be held on October 21, 2008, beginning at 8 a.m., EST. Persons interested in presenting testimony and answering questions at the public hearing must submit requests and certain other information (as discussed below), by 3:30 p.m., EST, October 16, 2008.

ADDRESSES:

The hearing will be held at the U.S. Department of Labor, Room S-3215 A&B, 200 Constitution Avenue, NW., Washington, DC 20210.

FOR FURTHER INFORMATION CONTACT:

Fil Williams, Office of Regulations and Interpretations, Employee Benefits Security Administration, [phone]. This is not a toll-free number.

SUPPLEMENTARY INFORMATION:

On August 22, 2008, notice was published in the Federal Register (73 FR 49924) that the Department of Labor (the Department) has under consideration a proposed class exemption to permit the provision of investment advice to participants and beneficiaries of self-directed individual account plans, such as 401(k) plans, and IRAs. The Department proposed the class exemption on its own motion pursuant to section 408(a) of ERISA, and in accordance with the procedures set forth in 29 CFR Part 2570, subpart B (55 FR 32836, August 10, 1990).

Specifically, upon adoption, the proposed exemption would provide relief from the restrictions of section 406(a) and 406(b) of the Act, and from the taxes imposed by section 4975(a) and (b) of the Code, by reason of section 4975(c)(1) of the Code, for the provision of investment advice described in section 3(21)(A)(ii) of ERISA by a fiduciary adviser to a participant or beneficiary in an individual account plan or IRA (and certain similar plans), the acquisition, holding or sale of a security or other property pursuant to the investment advice, and the direct or indirect receipt of fees or other compensation by the fiduciary adviser (or any employee, agent, registered representative or affiliate thereof) in connection with such transactions.

Upon adoption, the class exemption would affect sponsors, fiduciaries, participants and beneficiaries of participant-directed individual account plans and IRAs, as well as providers of investment and investment advice-related services to such plans.

In the notice of proposed exemption, the Department invited interested persons to submit written comments on or before October 6, 2008. To date, the Department has received approximately 39 written comments concerning the proposed class exemption, many of which were from major industry groups. All written comments are available to the public, without charge, online at http://www.dol.gov/​ebsa and at the Public Disclosure Room N-1513, Employee Benefits Security Administration, U.S. Department of Labor, 200 Constitution Avenue, NW., Washington, DC 20210.

In their written comments, four parties requested that the Department hold a public hearing to more fully examine issues raised under the proposed class exemption, and expressed an interest in testifying. In view of the importance of this initiatives and its potential for significantly affecting the provision of investment advice to participants and beneficiaries in affected plans, and taking into account the concerns of these commenters, the Department has decided to hold a public hearing. The primary purpose of this hearing is to further develop the public record regarding the class exemption and to assist the Department in understanding the issues and other concerns raised by the written comments. Because information contained in previously-submitted written comments is already part of the public record, the Department expects that persons testifying at the hearing will present information not previously addressed in their written comments.

The hearing will be held on October 21, 2008, beginning at 8 a.m. and ending at 5 p.m., EST, in Room S-3215 A&B of the Department of Labor, Francis Perkins Building, at 200 Constitution Avenue, NW., Washington, DC 20210.

Persons interested in presenting testimony and answering questions at this public hearing must submit, by 3:30 p.m., EST, October 16, 2008, the following information: (1) A written request to be heard; and (2) An outline of the topics to be discussed, indicating the time allocated to each topic. To facilitate the receipt and processing of responses, EBSA encourages interested persons to submit their requests and outlines electronically by e-mail to [e-mail]. Persons submitting requests and outlines electronically are encouraged not to submit paper copies.

Persons submitting requests and outlines on paper should send or deliver their requests and outlines (preferably at least three copies) to the Office of Regulations and Interpretations, Employee Benefits Security Administration, Attn: Investment Advice Class Exemption Hearing, Room N-5655, U.S. Department of Labor, 200 Constitution Avenue, NW., Washington, DC 20210. All requests and outlines submitted to the Department will be available to the public, without charge, online at http://www.dol.gov/​ebsa and at the Public Disclosure Room N-1513, Employee Benefits Security Administration, U.S. Department of Labor, 200 Constitution Avenue, NW., Washington, DC 20210.

The Department will prepare an agenda indicating the order of presentation of oral comments and testimony. In the absence of special circumstances, each presenter will be allotted ten (10) minutes in which to complete his or her presentation.

Any individuals with disabilities who may need special accommodations should notify Fil Williams on or before October 16, 2008.

Information about the agenda will be posted on http://www.dol.gov/​ebsa on or after October 16, 2008, or may be obtained by contacting Fil Williams, Office of Regulations and Interpretations, Employee Benefits Security Administration, U.S. Department of Labor, telephone [phone] (this is not a toll-free number).

Those individuals who make oral comments and testimonies at the hearing should be prepared to answer questions regarding their information and/or comments. The hearing will be transcribed.

Notice of Public Hearing

Notice is hereby given that a public hearing will be held on October 21, 2008, concerning the Department's proposed class exemption for the provision of investment advice to participants and beneficiaries of self-directed individual account plans and IRAs. The hearing will be held beginning at 8 a.m. in Room S-3215 A&B of the U.S. Department of Labor, Francis Perkins Building, 200 Constitution Avenue, NW., Washington DC, 20210.

Signed at Washington, DC, this 8th day of October, 2008.

Bradford P. Campbell,

Assistant Secretary, Employee Benefits Security Administration, U.S. Department of Labor.