Labor Department's EBSA Releases Regulatory Agenda

• Lifetime Income Options for Participants and Beneficiaries in Retirement Plans - The Department is exploring what steps, if any, it should take to facilitate access to (and use of) arrangements designed to provide a stream of income after retirement. A Request for Information was issued and a public hearing held. April 2011 is the target date for review of the public record.
• Auto-Enrollment in Large Group Health Plans - As amended by the PPACA, the Fair Labor Standards Act requires employers who have more than 200 full-time employees and who offer enrollment in a health plan to automatically enroll new full-time employees and continue enrollment of current employees. FAQs recently issued by the Department explain that plans are not required to comply with the new requirements until regulations are issued. May 2011 is the Department's target date for a Request for Information.

• Annual Funding Notice - As amended by the Pension Protection Act of 2006 (PPA), ERISA § 101(f) requires defined benefit plans to provide participants and beneficiaries with an annual funding notice, and ERISA § 104(b)(3) imposes new requirements on summary annual reports for defined benefit plans. Proposed Regulations were issued on November 18, 2010. The comment period ends January 18, 2011.
• Pension Benefit Statements - As amended by the PPA, ERISA § 105 requires that ERISA plans automatically provide participants with individual pension benefit statements. Generally, defined benefit plans must provide the statement every 3 years (with an annual alternative), and individual account plans that permit participant direction must provide the statement quarterly (and those that do not permit participant direction must provide the statement annually). June 2011 is the target date for Proposed Regulations.
• Definition of "Fiduciary" - The Department seeks to amend the definition of "fiduciary" to more broadly include persons who render investment advice for a fee, taking into account the current practices of investment advisers and the expectations of plan officials and participants. Proposed Regulations were issued on October 22, 2010. The comment period on the proposed regulations was set to end on January 20, 2011 (and was recently extended to February 2, 2011 under a separate notice).
• Target Date Fund Disclosures - The Department seeks to amend its qualified default investment alternative regulation (which provides relief from certain fiduciary responsibilities for fiduciaries of participant-directed individual account plans who, in the absence of directions from a participant, invest the participant's account in a qualified default investment alternative). The amendment will provide greater specificity regarding the investment information that must be disclosed to participants and beneficiaries, and will enhance the information to be disclosed concerning target date, or similar age-based, qualified default investment alternatives. Proposed Regulations were issued on November 30, 2010. The comment period on the proposed regulations ended January 14, 2011.

• Improved Fee Disclosure for Pension Plans - Statutory Exemption - This amendment to the regulations under ERISA § 408(b)(2), which set forth the standards for exemption for contracting or making reasonable arrangements with a party in interest for services, is to ensure that fiduciaries have access to the information necessary to determine whether an arrangement is "reasonable" within the meaning of the statutory exemption. Interim final rules were issued on July 16, 2010. The comment period on the regulations ended August 30, 2010, and April 2011 is the target date for final action.
• Statutory Exemption for Provision of Investment Advice - As added by the PPA, new ERISA § 408(b)(14) provides a prohibited transaction exemption permitting the provision of investment advice to participants of individual account plans if it is provided under an "eligible investment advice arrangement." Proposed Regulations were issued on March 2, 2010. The comment period on the regulations ended May 5, 2010, and May 2011 is the target date for final action.
• Dependent Coverage of Children to Age 26 under the PPACA - As added by the PPACA, new ERISA § 715 encompasses various health reform provisions of the Public Health Service Act. These regulations provide guidance on the extension of dependent coverage for children to age 26. Interim final rules were issued on May 13, 2010. The comment period on the regulations ended August 11, 2010, and April 2011 is the target date for the review of comments.
• Coverage of Preventive Services under the PPACA - These regulations provide guidance on the rules relating to coverage of preventive services without cost sharing under the PPACA. Interim final rules were issued on July 19, 2010. The comment period on the regulations ended September 17, 2010, and April 2011 is the target date for the review of comments.

• The Mental Health Parity and Addiction Equity Act - Interim final regulations were issued on the recently-expanded law on February 2, 2010, but guidance is still pending on the increased cost exemption. In recent FAQs, however, the Department delineated a safe harbor method for use until the guidance is issued. No target date is set for the final rule.
• Grandfathered Status of Group Health Plans under the PPACA - Interim final regulations were issued on June 17 and November 17, 2010 regarding how to maintain grandfathered status. No target date is set for the final rule.
• Preexisting Condition Exclusions, Lifetime and Annual Limits, Rescissions and Patient Protections under the PPACA - Interim final regulations were issued on June 28, 2010 regarding these new PPACA requirements. No target date is set for the final rule.
• Group Health Plan Internal and External Appeals - Interim final regulations were issued on August 26, 2010 regarding these new PPACA requirements. No target date is set for the final rule.
• Abandoned Plan Program - The Department seeks to expand the individuals who are entitled to be a "qualified termination administrator" under the Termination of Abandoned Individual Account Plans regulations. December 2011 is the target date for proposed regulations.

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Copyright 2011, Deloitte.

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