On July 3, in its mid-year regulatory plan, the Department of Labor (DOL) said it will continue to issue guidance that will allow more alternative (private equity, cryptocurrency, etc.) investments in retirement plans.
The mid-year regulatory plan also noted the agency’s plans to revamp its prohibited transaction exemption (PTE) program. DOL said it will “update” its PTE procedures rules to “reduce regulatory burdens on applicants for exemptions and improve the program’s operation.”
All agencies’ guidance plans are largely aspirational. As often as not an item on the plan does not result in new guidance before the next plan is released. However, guidance aimed at deregulating the use of non-traditional investments in retirement savings plans appears to be on track to be finalized by year-end, or close to it. The comment period on the proposed regulation closed on June 1—and DOL received more than 30,000 comments. DOL says its proposed regulation identifies criteria that fiduciaries should use to prudently balance the potential for greater long-term gains, broader investment diversification, and potentially higher expenses and fees.
Prospects: It is anticipated that the new rule will be finalized, with minimal changes from the proposed version, within the next five months.
NAIFA Staff Contact: Jayne Fitzgerald – Director – Government Relations, at jfitzgerald@naifa.org