March 1, 2007

Investment Advice Guidance

The Department of Labor (DOL) has issued Field Assistance Bulletin (FAB) 2007-1 relating to the new investment advice provisions of the Pension Protection Act of 2006 (“PPA”).  A FAB provides guidance to the DOL’s field offices about how to administer provisions of the law. 

The PPA authorizes investment advice to be given on participant level.  According to FAB 2007-1, a plan sponsor or fiduciary is responsible for the prudent selection and monitoring of an investment adviser, or of a fiduciary who will be responsible for the selection of the investment adviser.  As long as the plan sponsor carries out these duties, in a prudent manner, the plan sponsor would not be liable for the specific advice given to an individual participant. 

The FAB also provides that all previously issued DOL guidance relating to investment advice, still stands.


The information contained in this Benefit Beat is not intended to be legal, accounting, or other professional advice, nor are these comments directed to specific situations.

As required by U.S. Treasury rules, we inform you that, unless expressly stated otherwise, any U.S. federal tax advice contained in this Benefit Beat is not intended or written to be used, and cannot be used, by any person for the purpose of avoiding any penalties that may be imposed by the Internal Revenue Service.

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