February 2, 2009

Investment Advice, Regulations – Final?

On January 21, final participant investment advice regulations were published in the Federal Register. They are substantially similar to the proposed regulations issued in August (see Benefit Beat, 9/4/2008 – Proposed Rules: Investment Advice Exemption for 401(K) Plans and IRAS”). These regulations are to take effect March 23, 2009; however, whether this will actually happen is an open question.

On Inauguration Day, January 20, The White House issued a memorandum asking that all regulations published in the last days of the Bush Administration be suspended to give the Obama Administration time to review them. It also asked that the comment period for the regulations be opened again. Further, several members of Congress are adamantly opposed to these regulations, fearing they will compromise participants. On the other side of the opinion ledger, proponents of the regulations find that they will give participants the necessary tools to make informed investment decisions. The goal, of course, is to maximize retirement savings.

As the fate of these regulations is determined, we will provide additional guidance.

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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