Rules and regulations dominated Pensions & Investments headlines in 2015.
P&I's list of the top 10 stories of the year leads off with the U.S. Department of Labor attempting to produce a new fiduciary standard for anyone giving retirement investment advice to defined contribution plan participants.
Other top themes were the pressure on plan executives to disclose private equity fees, the broadening of defined contribution plan sponsors' responsibilities in a landmark fiduciary breach case and the continued impact of the underfunding of pension plans.
The DOL's efforts to create a fiduciary standard ranked as the top story of 2015, according to P&I's editors. The department spent much of the year attempting to establish what the DOL calls the “conflict of interest rule for investment advice.”
The proposed changes primarily would affect what organizations such as the Committee on Investment of Employee Benefit Assets, Bethesda, Md., see as aggressive marketing of individual retirement accounts to 401(k) plan participants when they leave their employer.
“CIEBA believes that participants deserve unbiased advice,” said Deborah Forbes, executive director of the group that represents large plan sponsors, in a March interview.
The proposed rule has caused great controversy and discussion among corporate plan executives and on Capitol Hill. The most recent action came in December, when several members of Congress introduced legislation that would require congressional approval before the rule is finalized, and would create an alternative fiduciary standard.
“The Department of Labor's rule proposal — if adopted in its current form — would do great harm,” said Paul Schott Stevens, the Investment Company Institute president and CEO, in a statement after passage of H.R. 1090, the Retail Investor Protection Act. “H.R. 1090 reflects a common-sense goal of ensuring that federal agencies work to adopt a harmonized fiduciary duty for all investors, and that they do so in a manner that does not jeopardize investor access to personalized and cost-effective investment advice.”
The story will continue into 2016 as some Washington observers see the DOL prevailing in the spring with a final standard, thanks to backing from the White House.