A House committee yanked a pension bill provision safeguarding existing investment advice arrangements for DC plans — jeopardizing employer support for a package that also provides critical funding relief for DB plans.
At the 11th hour, Democrats on the House Education and Labor Committee deleted the provision that would have made clear the legislation would not pre-empt existing investment advice arrangements that rely on the Department of Labor's SunAmerica advisory opinion or other DOL advice exemptions.
The deletion of the SunAmerica exception could invalidate existing investment advice arrangements affecting millions of plan participants, lobbyists for employer and service provider groups said.
Lobbyists said Rep. Rob Andrews, D-N.J., who had sponsored the investment-advice provisions, deleted the SunAmerica exemption after the committee received a statement criticizing other investment-advice-related provisions in the legislation.
That statement — coordinated by Ed Ferrigno, vice president of Washington affairs for the Profit Sharing/401(k) Council of America, Chicago — included endorsements from the Investment Company Institute, the Securities Industry and Financial Markets Association and other major business associations.
Among other things, the statement claimed that provisions in the legislation would impose new reporting and disclosure obligations on advice arrangements offered under the SunAmerica opinion, and could undermine the validity of the DOL's other advice exemptions and advisory opinions.
“By establishing new barriers for firms who are well qualified to provide advice, (the investment advice provisions in the legislation) will result in fewer American workers ... receiving critically important investment advice,” the statement said.
Mr. Ferrigno said he was “mystified” by what happened. “I don't believe Rep. Andrews would retaliate in that way in response to a letter,” he said. “The letter merely discusses some legitimate concerns.”