The Department of Labor (DOL) has issued a proposed regulation that would amend the definition of “fiduciary” under ERISA. The regulation would broaden the kind of service providers that would be fiduciaries. The DOL believes that this change will enhance its ability to cure abuses that it believes currently exist in the market, such as undisclosed fees, misrepresentation of compensation arrangements and biased appraisals of the value of employer securities and of other plan investments. The regulation is complex and has only been issued in proposed form thus far. Comments on the proposal are due to the DOL by January 20, 2011. We will provide you with additional details in an Alert after the regulation is finalized.
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