A DoL news release said the agency had issued:
- an interim final rule amending Interpretative Bulletin 95-1to limit the bulletin’s application to the selection of annuity providers for defined benefit plan distributions from defined benefit plans.
- a proposed rule to provide guidance, in the form of a safe harbor, for annuity provider selection fiduciaries for benefit distributions from individual account plans, such as 401(k)s.
The DoL said, under the proposed safe harbor, fiduciaries must:
- Conduct an objective, thorough and analytical search to identify and select providers.
- Consider the need to engage an expert to assist in its evaluation of providers.
- Appropriately conclude that the annuity provider would be financially able to make all future payments under the contract, and the cost of the contract is reasonable in relation to the benefits and services to be provided under the contract.
According to the DoL, the PPA required the agency to issue regulations clarifying that the selection of an annuity contract as an optional distribution from an individual account plan is not subject to the “safest available’ standard under Interpretive Bulletin 95-1, but is subject to all otherwise applicable fiduciary standards.
The interim final and proposed rules are to be published in the September 12, 2007 edition of the Federal Register. Public comments should be submitted electronically to the U.S. Department of Labor’s Employee Benefits Security Administration at e-ORI@dol.gov or through the federal e-rulemaking portal at www.regulations.gov.