* See Institute Memorandum to Board of Governors No. 78-95, dated December 15, 1995.
June 14, 1996
TO: BOARD OF GOVERNORS No. 30-96
RE: FINAL DOL INTERPRETIVE BULLETIN ON EDUCATION AND ADVICE
______________________________________________________________________________
As we previously informed you, the Department of Labor released last December a draft
interpretive bulletin defining those circumstances in which information provided to a
retirement plan participant may be deemed to be education rather than investment advice.*
This distinction is significant because the provision of "investment advice" could cause a fund
company or other provider of information to become subject to potential liability under ERISA.
We are pleased to advise you that the Department has now published in final, its
interpretive bulletin on participant investment education (see attached). The final bulletin
reflects a number of comments raised by the Institute with respect to the earlier draft and, most
importantly, adopts an expansive approach to the definition of investment education. As a
result, employers, fund companies and other service providers may offer the types of
participant educational material described in the bulletin’s safe harbor categories without
giving rise to fiduciary status under ERISA.
We will keep you informed of developments.
Paul Schott Stevens
Senior Vice President
General Counsel
Attachment