WASHINGTON — The Labor Department has approved the simplest of five requests to relax the convoluted rules governing pension plan investments in hedge funds and other private investment pools.
A second approval is expected soon.
But officials might be punting on thornier questions and, in anticipation of a rejection, two have already been withdrawn.
The favorable opinion issued last month to an unidentified group of insurance companies should make it easier for pension funds to invest in private investment pools run by insurance companies; the tougher requests would considerably ease the ability of pension funds to invest in hedge funds, funds of funds and other private investment pools.
Pension lawyers anticipate the Labor Department will let lawmakers deal with the more complicated aspects of the regulation through legislation that was appended to a comprehensive pension bill that cleared the House Education and the Workforce Committee in June. Sen. Charles E. Schumer, D-N.Y., a member of the Senate Finance Committee, has said he plans to introduce a similar amendment — sought by the Securities Industry Association and the Managed Funds Association — to pension legislation being considered by that committee. An aide to Mr. Schumer could not say when he plans to introduce the legislation.
Labor Department officials have advised the Groom Law Group to expect a second approval any day, on a request by Hartford Financial Services Group, Hartford, Conn., said Steve Saxon, a partner at the Washington law firm, which filed both requests. A spokeswoman for the Labor Department declined to comment on when it might be issued or what it might say.