Workplace Insights | Bank of America Merrill Lynch

The Department of Labor (DoL)'s 2017 projects include updates to pending projects relating to retirement accounts with revised estimated deliverable dates. Learn about these key projects and what they may mean to plan sponsors and their employees. We will continue to monitor the progress of these projects and communicate developments.

Department of Labor 2017 Projects

Over the past couple of years, the DoL has aligned many of their resources to work on the fiduciary rule, however there are other guidance projects they have been working on that impact work based retirement savings.

The Department of Labor updates their semi-annual regulatory agenda in the spring and fall each year and the most recent list available was updated during the Obama administration. With a new presidential administration and as yet to be confirmed Secretary of Labor and head of Employee Benefits Security Administration (EBSA), these projects and their status may change once all new appointees are in place. We will continue to monitor the progress of these projects and communicate developments.

Dates listed for these projects are only to provide a sense of DoL prioritization and nothing more. Projects may be reprioritized and the DoL focus can be accelerated, delayed or tabled at the direction of the Secretary of Labor or head of EBSA. That said, it is rare for the DoL to issue regulations sooner than projected, so these dates tend to represent the earliest the DoL expects to release the regulation or guidance. For details, visit the DoL project website.

Conflicts of Interest rule (aka “Fiduciary rule”) — DoL status: final

The DoL issued the final fiduciary rule in April 2016. For more information and related DoL resources, visit the DoL's dedicated website.

State-Run Retirement Plans Guidance — DoL status: final*

The DoL released an Information Bulletin on State Run Retirement Marketplaces, State Run prototype plans, and State Run Open Multiple Employer Plans (MEP)s, as well as a final rule for a safe harbor State Run Auto IRA Program. The guidance allows states to establish retirement savings programs for individuals who work in the state but not for the state, and who do not have access to retirement savings at work. The IB and safe-harbor provide that states that offer retirement programs within the guidelines and auto IRAs within the safe harbor will avoid ERISA preemption.

Arrangements Established by Political Subdivisions for Non-Governmental Employees— DoL status: final*

Following guidance the DoL issued in 2015 and 2016 for state run retirement programs, the DoL issued similar guidance for cities and municipalities that wish to offer retirement savings programs for people who live and work in the municipality, but not for the municipality.

Amendment of Abandoned Plan Program — DoL status interim final rule has not yet been released.

The regulatory project is examining whether and how to expand the scope of individuals entitled to be a “qualified termination administrator” (QTA).

Revision of Form 5500 — DoL status: proposed

The DoL wants to collect additional data on the Form 5500 related to investments in retirement plans and in such a format that they can more readily mine the data. This is consistent with their focus in recent years and months on expanded disclosure of fees to plan sponsors and participants, as well as expanded participant disclosure requirements. The original comment period was extended through early December 2016 and now the DoL will review and analyze the comments received before determining if they will finalize the rule.

Fiduciary Relief for Investments in Qualified Default Investment Alternatives (QDIA) — DoL status: prerule stage

This project will explore whether, and to what extent, regulatory amendments would be appropriate to facilitate the use of lifetime income products and features as, or as part of, qualified default investment alternatives. EBSA will begin this review by issuing a Request for Information in early 2017.

Projects of interest to plan sponsors that are no longer active on the DoL project list

  • Benefit statements/lifetime income disclosure — this project would implement the benefit statement requirement added by the Pension Protection Act of 2006. DoL has indicated it might also require a lifetime income disclosure on benefit statements.
  • Open brokerage windows in defined contribution plans — In August 2014, the DoL released a request for information ("RFI") relating to brokerage windows in defined contribution plans. The public comment period closed November 19, 2014. No further action has been taken to date.
  • Additional investment disclosure requirements for target date funds (TDFs) — DoL opened this proposal for a second round of comments—that comment period closed July 3, 2014. No further action has been taken to date.

*Both the state-run retirement program guidance and the city/municipality-run retirement program guidance were finalized in late 2016. Under the Congressional Review Act, Congress can block implementation of a final rule by passing a disapproval of the regulation with majority votes in both chambers of Congress within a 60 legislative day window. In February, House of Representatives passed two resolutions of disapproval to block both pieces of guidance. The bills would still have to be passed in the Senate. We will continue to monitor further developments.

This summary is accurate as of March, 2017. Any changes made by the DoL would impact our viewpoint. We will continue to monitor the DoL projects that impact retirement accounts for updates and changes.

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