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[19649]
January 26, 2006
TO: COMPLIANCE ADVISORY COMMITTEE No. 4-06
INVESTMENT ADVISER MEMBERS No. 7-06
INVESTMENT ADVISER ASSOCIATE MEMBERS No. 3-06
PENSION MEMBERS No. 7-06
RE: JOINT COMMENT LETTER TO DOL ON LM-30 RULEMAKING
The Institute has filed the attached comment letter with the Department of Labor
regarding proposed amendments to Form LM-30. The letter, organized by the Institute, was
filed jointly with the American Council of Life Insurers, the Investment Advisers Association,
and the Securities Industry Association.1
As you are aware, in DOL’s recently published guidance2 on the filing requirements on
Form LM-10 of the Labor-Management Reporting and Disclosure Act of 1959 (“LMRDA”), DOL
invited those affected by LM-10 requirements to comment on the LM-30 proposal. DOL has
provided no forum for public comment on the new LM-10 requirements.
The letter argues that the dramatic shift in DOL policy will impose an extraordinary
burden on service providers without equivalent public policy gain. Specifically, the letter
argues:
• The LMRDA was enacted to address relations between union officials and employers
who employ union members, not the services that are provided to pension plans. DOL’s
interpretation is overreaching and inconsistent with a reasonable reading of the
LMRDA, and represents a sea change in DOL’s interpretation of the statute for the past
40-plus years.
• There is no regulatory gap to be filled here. The conduct DOL is concerned about –
buying the influence of pension plan trustees – is clearly wrong and is already illegal
1 See Memorandum to Compliance Advisory Committee No. 48-05, Investment Adviser Members No. 14-05,
Investment Adviser Associate Members No. 12-05 and Pension Members No. 33-05 [19051], dated August 1, 2005.
2 See Memorandum to Compliance Advisory Committee No. 55-05, Investment Adviser Members No. 22-05,
Investment Adviser Associate Members No. 17-05 and Pension Members No. 53-05 [19361], dated November 11,
2005.
2
under ERISA. The relationship between trustees of pension plans – both union and non-
union – is comprehensively regulated by ERISA, which imposes strict fiduciary duties,
prohibits self-interested transactions, and requires reporting of prohibited transactions.
Other laws and self-regulatory organization rules also govern this conduct.
• DOL cannot legally and should not impose onerous new filing requirements without
giving affected parties an opportunity for public comment and adequate time to come
into compliance. The new LM-10 requirements deserve their own rulemaking.
• Retroactive application of LM-10 reporting is unfair. In addition, the aggregate $250 de
minimis exception is inadequate in relieving the compliance burden because service
providers are still required to track each cup of coffee and minor courtesy.
Michael L. Hadley
Assistant Counsel
Attachment (in .pdf format)
Note: Not all recipients receive the attachment. To obtain a copy of the attachment, please visit our members
website (http://members.ici.org) and search for memo 19649, or call the ICI Library at (202) 326-8304 and request the
attachment for memo 19649.