SIFMA and joint trades provided comments to the U.S Senate and the U.S. House of Representatives on the proposed new…
Joint Trades on Request for Extension of FAB 2018-02
September 22, 2021
The Honorable Ali S. Khawar
Acting Assistant Secretary
Employee Benefits Security Administration
200 Constitution Ave, NW
Washington, DC 20210
Dear Acting Assistant Secretary Khawar:
The undersigned organizations appreciate that the Employee Benefits Security Administration (“EBSA”) has engaged in stakeholder outreach to ensure that guidance changes are made after consideration of broad-based input. We write today regarding the current temporary enforcement policy reflected in Field Assistance Bulletin (FAB) 2018–02, which is presently scheduled to expire on December 20, 2021.
As an initial matter, we call your attention to the letter submitted to EBSA on September 2, 2021, by the U.S. Chamber of Commerce. Our organizations fully support and agree with the comments and recommendations made in the Chamber’s letter, and consistent with that letter, we respectfully urge EBSA to extend the temporary enforcement policy as reflected in FAB 2018-02 by at least six to twelve months beyond December 20, 2021. EBSA and all stakeholders would benefit from such an extension, as it would allow firms to thoughtfully consider using Prohibited Transaction Exemption 2020-02 and implement it most effectively, while reducing consumer confusion and disruption that would follow from retaining the current date.
Moreover, we concur with and endorse the Chamber’s recommendation that, following expiration of the temporary enforcement policy (whether on December 20 as currently scheduled or following any extension), EBSA should “allow the current rules and PTEs to go into effect, allowing an appropriate period of review and evaluation, before considering further substantive changes.” Again here, we believe EBSA and all stakeholders would benefit from this recommendation, as it would provide an opportunity for all interested parties to observe and evaluate the real-world effectiveness of the current rules before deciding whether any additional changes are necessary.
If, however, EBSA chooses to proceed with further rulemaking as contemplated by its current regulatory agenda, we would respectfully urge EBSA to extend the temporary enforcement policy for a reasonable period of time following the completion of such rulemaking rather than for a fixed period of time.
Our recommendations are based on three main points. First, although some firms may be technically able to comply by December 20, it is important for financial institutions to be confident that their efforts preparing for implementation and compliance will be smooth and secure. This is achieved by having the time to refine and test their compliance tools and mechanisms. More time will allow firms to ensure that all the exemption’s participant protections are fully in place, without the types of errors and disruption that will confuse and frustrate retirement savers and their advisors.