The Employee Benefits Security Administration is seeking public comment on how it can implement provisions in the Pension Protection Act of 2006 that allow investment advisers to provide investment advice directly to defined contribution plan participants.
Under the new law, there are two scenarios under which the advice would not be considered a prohibited conflict of interest: when it is based on a computer model that has been independently certified as unbiased; and when the fees for products selected when the advice is directly offered are the same for all participants, regardless of the investment selected.
The EBSA on Dec. 4 will issue two RFIs. One seeks comment on what regulations would be needed to ensure computer models are unbiased and on what sort of fee information money managers should be required to provide plan participants, according to a news release. The second RFI seeks comment on the feasibility of money managers using computer models to provide advice to those with IRAs. The RFIs will be published in the Federal Register.