The U.S. Labor Department has regulatory jurisdiction over many retirement plan issues, as a result of the Employee Retirement Income Security Act of 1974 (ERISA). Over the past several years, the Labor Department has issued new regulations affecting 401(k) plans and other types of retirement vehicles for individual investors.
Some of these regulatory measures are designed to ensure that investors in these retirement plans have the information needed to make informed decisions about the management of their individual accounts and the investment of their retirement savings.
Other regulatory measures are designed to improve disclosures to the fiduciaries of retirement plans about service provider fees and other compensation structures, potential conflicts of interest, and business relationships among service providers.
More recently, the Labor Department has proposed a new regulation that expands the current definition of "fiduciary," for persons providing investment advice for a fee to a retirement plan or to an individual retirement account. The proposed rule is intended to protect investors from conflicts of interest and self-dealing by financial intermediaries. As proposed, it corrects some of the limitations of the current fiduciary rule and provides a clearer understanding of when persons providing investment advice are subject to ERISA's fiduciary standards.