The Office of Management and Budget (OMB) has issued a comprehensive report on the regulatory agenda of the Department of Labor (DOL) for fall 2018. It includes proposed and final rules under consideration by the DOL’s Employee Benefits Security Administration (EBSA) that would affect retirement plans and professionals.
Proposed Rules
The OMB lists the following as among the proposed rules the DOL is now considering:
Definition of an "Employer" Under Section 3(5) of ERISA — Association Retirement Plans and Other Multiple Employer Plans: would establish criteria under Section 3(5) of ERISA for purposes of being an employer able to establish and maintain an employee pension benefit plan (as defined in Section 3(2) of ERISA) that is a multiple employer retirement savings plan (other than a multiemployer plan defined in Section 3(37) of ERISA).
Final Rules
The OMB lists the following as among rules the DOL is now considering that are in final form:
Amendment of Abandoned Plan Program: would amend rules the DOL promulgated on April 21, 2006, collectively entitled the Termination of Abandoned Individual Account Plans, which facilitates the termination of, and distribution of benefits from, individual account pension plans that have been abandoned by their sponsoring employers.
This rule will examine whether, and how, to amend those regulations by expanding the scope of individuals entitled to be a qualified termination administrator (QTA). Under the Termination of Abandoned Individual Account Plans regulations, only a QTA is authorized to determine whether an individual account plan is abandoned, and to carry out related activities necessary for the termination and winding up of the plan's affairs.
The DOL issued a notice of proposed rulemaking on Dec. 12, 2012; the period during which the PBGC would accept comments on the proposed rule ended on Feb. 11, 2013. The PBGC expects to issue an interim final rule in December 2018.
Electronic Filing of Top Hat Plan Statements: would amend Regulation 29 CFR 2520.104-23, which contains an alternative method of compliance with the reporting and disclosure requirements for pension plans for certain selected employees. Both regulations contain a filing obligation. This rule would substitute electronic filing for regular mail or hand delivery.
The DOL issued a notice of proposed rulemaking on Sept, 30, 2014; the period during which the PBGC would accept comments on the proposed rule ended on Dec. 29, 2014. The PBGC expects to issue an interim final rule in October 2018.
Adoption of Amended and Restated Voluntary Fiduciary Correction Program: would amend and restate EBSA’s Voluntary Fiduciary Correction Program (VFCP), which originally was adopted in 2002 and revised in 2005 and 2006. The VFCP is designed to encourage the voluntary correction of fiduciary violations by permitting persons to avoid potential civil actions and civil penalties if they take steps to correct identified violations in a manner consistent with the VFCP.
The amendments will expand the scope of some transactions currently eligible for correction and streamline correction procedures for certain others. EBSA says that it will issue a restatement of the VFCP in its entirety and request public comments.
Fiduciary Rule and Prohibited Transaction Exemptions: would encompass regulatory action in light of the U.S. 5th Circuit Court of Appeals ruling in Chamber of Commerce v. Department of Labor, 885 F.3d 360 (5th Cir. 2018).
The DOL in 1975 issued a regulation defining who a fiduciary is under Section 3(21)(A)(ii) of ERISA as a result of giving investment advice for a fee or other compensation. On April 8, 2016, the DOL replaced the 1975 regulation with a new regulatory definition, but in 2018 the 5th Circuit vacated that new regulatory definition in toto.
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