Washington, D.C. counsel Brad Campbell was featured in a PLANSPONSOR article titled, "ERISA 40th Anniversary: Time for an Update?” As September 2nd marks 40 years since the Employee Retirement Income Security Act (ERISA) was made into law, Brad talked about how it may be time to revise sections of the law covering prohibited service provider transactions.
Brad identifies Section 406 of ERISA as the part of the benefits law that is perhaps most in need of change. This section establishes a long list of prohibited transactions and other restrictions meant to prevent conflicts of interest among fiduciaries and investment service providers working with tax-advantaged workplace retirement plans.
“This notion that there should be no conflicts of interests at all in the retirement planning space is preventing most participants from getting investment advice directly through their plans,” Brad said. “And it’s complicating the question of how participants are being advised on the back end of the savings effort, when they are rolling over to individual retirement accounts or deciding to remain in plan.”