New 401(k) advice rules expected by end of this month

The Labor Department by the end of the month is likely to issue new rules governing investment advice given to 401(k) plan participants, Assistant Labor Secretary Phyllis Borzi said last week. “We're hoping that by the end of February, it will be out,” she said of the new rules, which are under review by the Office of Management and Budget. Ms. Borzi declined to comment on what the new rules would look like, other than to say they “will be much more faithful to the statutory provision than the one that we saw on Jan. 21, 2009,” referring to rules issued by the Bush administration just as President Barack Obama was taking office. The administration and some Congressional Democrats criticized those rules as violating provisions in the Pension Protection Act of 2006 because the old rules would have allowed financial advisers associated with brokerage firms and mutual funds to provide investment advice to plan participants. The new rules are “a much more streamlined version,” Ms. Borzi said. She made the comments to reporters after she spoke at a conference last week sponsored by the National Institute on Retirement Security, which primarily represents public and union pension and health care plans. E-mail Sara Hansard at [email protected].