Proposed Rule ‘Beginning of the End’ to Benefit Exemptions (2)

Tougher standards the US Labor Department wants to add to the process retirement plans use to legally skirt conflict-of-interest restrictions threaten to discourage use of exemptions altogether, critics of the proposal told regulators at a public hearing.

Employee benefit law firms and financial services industry groups testified Thursday at the virtual hearing on the department’s proposed rule (87 FR 14722). That March notice of proposed rulemaking would require exemption applications to include more information, put an end to anonymous pre-submission discussions, and hold plan contractors to stricter requirements to prove their independence.

Prohibited transaction exemptions are considered an ...