Comment Sought on PPA Investment Advice Requirements

December 4, 2006 – The Department of Labor’s Employee Benefits Security Administration (EBSA) has published in the Federal Register two requests for public comment on certain requirements of the Pension Protection Act of 2006 (PPA). PPA introduced a prohibited transaction exemption (PTE) for when investment advice is given to employer-sponsored plan participants or to IRA holders under an eligible investment advice arrangement. The requests for comment pertains to investment advice provided to individuals participating in retirement savings arrangements.

The first of these requests (RIN 1210-AB13) relates to qualified retirement plans that are considered “individual account plans,” such as 401(k) s. The request for comment specifically relates to computer models that may serve as the basis for meeting the PPA criteria for an eligible investment advice arrangement, as well as the providing of fee and compensation information to plan participants and beneficiaries. This request may be accessed as follows.
http://a257.g.akamaitech.net/7/257/2422/01jan20061800/edocket.access.gpo.gov/2006/pdf/E6-20402.pdf

The second comment request (no specific identifying number) asks the public for similar information related to IRAs. One significant distinction is its request for comment on the feasibility of providing a comparable computer model to generate investment advice for IRAs. This request may be accessed as follows.
http://a257.g.akamaitech.net/7/257/2422/01jan20061800/edocket.access.gpo.gov/2006/pdf/E6-20401.pdf