Compliance May 21, 2009

EBSA Again Extends Effective Date of Advice Rule

The U.S. Department of Labor’s Employee Benefits Security Administration (EBSA) said the final rule about investment advice under the Pension Protection Act will be extended to November 18.
Reported by

On January 21 the DoL published a final rule governing the provision of investment advice under the Employee Retirement Income Security Act’s prohibited transaction provisions (see “DoL Finalizes Investment Advice Rule’). Then the DoL extended the applicability and effective dates of the final regulation from March 23 to May 22 and invited public comments on the rule (see “DoL Suggests Advice Rule Delay“).

In a press release, the EBSA said it has since determined that additional time is necessary to consider the legal and policy issues raised by comments (see “Controversy Brews over Investment Advice Regs’).

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The notice extending the effective date is expected to be published in the May 22 edition of the Federal Register.

Meanwhile, a proposed bill in Congress also addresses investment advice. Congressman Rob Andrews (D-New Jersey) last month introduced the Conflicted Investment Advice Prohibition Act of 2009, which essentially counters the DoL’s investment advice regulations (see “Andrews Introduces Advice Legislation’). Andrews has been an outspoken critic of those regulations, specifically the class exemption (see “Andrews Legislation Raises Questions’).

The Markets May 21, 2009

Iowa Medical Center Suspends 401(k), 403(b) Matches

The Mercy Medical Center in Sioux City, Iowa, has temporarily suspended its employer match contributions to employees’ 401(k) and 403(b) retirement plans.
Reported by

Mercy Medical Center also instituted a pay freeze that will affect its senior leaders, directors, and managers, including its CEO, according to local ABC affiliate KCAU-DT.

Mercy is one of 19 hospitals within the Trinity Health System that will be temporarily suspending part of benefits packages, the news report said.

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A hospital spokesperson told the television station that while the number of patients choosing the hospital for care is increasing, so too is the number that cannot pay for services because they are uninsured or underinsured.

A number of hospitals and health systems have adjusted benefits offerings in an effort to deal with the recession, including freezing pensions (see “Pa. Hospital Freezes Non-Union Pension Plan’) and suspending employer contributions to retirement plans (see “Ariz. Hospital Cuts 403(b) Match’).

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