DOL Issues Final Rule on Providing Investment Advice

On October 25, 2011 the DOL issued a final rule relating to the provision of investment advice to participants and beneficiaries in individual account plans and beneficiaries of individual retirement accounts (and certain similar plans).

Key takeaways for plan sponsors:

·         The selection of an investment advice arrangement is a fiduciary act.

·         The investment advice arrangement must be authorized by a plan fiduciary.

·       The computer model must be certified by an eligible investment expert. The fiduciary adviser is responsible for selecting the eligible investment expert.

·        Both the level fee and computer based investment arrangement must be audited annually by an auditor who is independent from the investment adviser. The fiduciary adviser is responsible for selecting the independent auditor.

·       The plan fiduciary must receive a copy of the independent auditor's report within 60 days of completion of the audit.

·         The fiduciary adviser must provide certain required disclosures to participants.

Read our latest ALERT for more details.