SIA Submits Comments to the EBSA on Automatic Rollover

The Securities Industry Association (SIA)*provides comments to the Employee Benefits Security Administration (EBSA) of the U.S. Department of Labor (DOL) onthe EBSA’s Reuqest for Information (RFI)on automatic rollover. SIA is concerned about the implementation and effect of the automatic rollover provision. SIA recommends the investment options include a money market fund option or an interest-bearing bank account, certificate of deposit, or a fixed annuity. Also, to accommodate plan sponsors who have made the fiduciary determination that investment options are prudent options for participants, safe harbor status should also be granted to “life-cycle” or “funds of funds” targets to a specific retirement date as well as a “default” investment option that might be specified under the employer’s plan. SIA also recommends that DOL issue guidanceclarifying that to the extent the initial IRA investment satisfied the safe harbor, the IRA owner shall be deemed tohave exercised control over the IRA upon funding to such safe harbor investment, and the plan sponsor and IRAprovidershall be relieved of fiduciary liability.
*SIFMA if the product of a merger between the Securities Industry Association and The Bond Market Association (TBMA) in 2006.