Compliance May 12, 2009

EBSA/SEC to Hold Target-Date Hearing

The Department of Labor (DoL) and the Securities and Exchange Commission (SEC) are looking into target-date funds.
Reported by

The DoL’s Employee Benefits Security Administration (EBSA) and the SEC will jointly hold a one-day hearing on June 18 to explore issues relating to target-date funds and other similar investment options.

“As target date funds and similar investment options become increasingly popular, it is important that all investors, including 401(k) plan sponsors and participants, can adequately evaluate these investment options and safeguard their interests,” the EBSA said on its Web site. According to the agency, the hearing will focus generally on issues facing investors in these types of products, and will explore topics such as portfolio composition, risk, and disclosure.

The agencies say they anticipate that witnesses will include representatives of plan participants and beneficiaries, plan sponsors, investor organizations, academia, and the financial services industry.

The hearing will be held at the U.S. Department of Labor, 200 Constitution Ave., NW, Washington, D.C. Details concerning the hearing will be announced within the next few weeks.

After a hearing in February, the U.S. Senate Special Committee on Aging noted that the DoL has issued regulations allowing target-date funds to be used as a qualified default investment alternative (QDIA) in employer-sponsored retirement plans, but there are no requirements regarding the composition of target-date funds and the appropriate ratio of stocks and bonds as the fund nears its target (see “Senate Committee Takes Aim at Target-Date Funds’).

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Committee Chairman Senator Herb Kohl (D-Wisconsin), sent letters to U.S. Secretary of Labor Hilda Solis and SEC Chair Mary Schapiro, “urging them to immediately commence a review of target-date funds and begin work on regulations to protect plan participants.”

Deals & People May 12, 2009

ING Advisors Network Announces Brown as CEO

As ING Advisors Network considers what to do with its group of broker/dealers, Valerie Brown was named new CEO.
Reported by

She replaces John Simmers, who retired in April. Brown had been president, ING Retail Annuities Market Segment and was president of ING Advisors Network from 2002 through 2007 before moving to ING’s annuity business. Brown previously served in a variety of executive roles during her ING career.

“The role of the trusted, independent financial professional is more important today than ever before,’ Brown said, in a news release. “Although ING Advisors Network is currently going through a comprehensive strategic review, the Network remains committed to providing exceptional service to its registered representatives. Furthermore, I am committed to developing a long-term strategy that allows our registered representatives to build and grow their businesses effectively.”

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The network of independent broker/dealers has four broker/dealers—Financial Network Investment Corporation; ING Financial Partners, Inc.; Multi-Financial Securities Corporation; and PRIMEVEST Financial Services, Inc.—and more than 7,000 advisers. ING has reportedly been considering selling off components of its broker/dealer channel.

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