“We believe the final investment advice regulation published in the January 21 Federal Register went too far in permitting investment advice arrangements not specifically contemplated by the statutory exemption,” said Phyllis Borzi, assistant secretary of the DoL’s Employee Benefits Security Administration (EBSA). Borzi made the announcement at the American Society of Pension Professionals & Actuaries (ASPPA) conference in Washington, D.C. (see “EBSA Sets Out Carrot, Stick Agenda“).

“We share concerns that workers will benefit from quality investment advice,” she said—and then proceeded to express a different sense of what would fulfill that definition. Borzi added, “We are taking a fresh look at the regulation that was issued and are working to bring it more closely in line with the [Pension Protection Act of 2006] statutory language.”

The final rule was published in the waning days of the Bush Administration, and then twice delayed while EBSA sought more comment. It was set to take effect November 18 (see “EBSA Again Extends Effective Date of Advice Rule”).

The controversial provision would allow advisers with potential conflicts of interest—or those whose compensation for providing advice could vary based on the investments recommended—to give advice to participants if they followed certain procedures.

The rule has been met with opposition in Congress, led by Congressmen Rob Andrews (D-New Jersey) and George Miller (D-California), who charged that it would allow for biased advice from investment companies. In July, the House Subcommittee on Health, Employment, Pensions and Labor (HELP) approved the Conflicted Investment Advice Prohibition Act, which essentially counters the DoL regulation (see “House Subcommittee Passes Fee Disclosure, Advice Bills” and “Andrews Introduces Advice Legislation”).