Alert October 26, 2010

DOL Proposes Changes to Regulation Defining “Investment Advice” under ERISA

The Department of Labor (the “DOL”) proposed changes to the regulation defining “investment advice” under the Employee Retirement Income Security Act of 1974, as amended (“ERISA”).  Under Section 3(21)(A)(ii) of ERISA, a person is a “fiduciary” of a plan -- and is subject to fiduciary duties -- to the extent that he renders investment advice to the plan for a fee.  The proposal generally would expand the circumstances under which a person providing investment-related advice or recommendations to a plan (or a plan fiduciary, participant, or beneficiary) would be considered to be providing “investment advice” within the meaning of Section 3(21)(A)(ii).  Comments regarding the proposed changes must be submitted to the DOL by January 21, 2011.  This proposal will be discussed in greater detail in a future issue of the Alert.