📉Removal of Annuity Provider Regulation
Selection of Annuity Providers-Safe Harbor for Individual Account Plans
Summary
This direct final rule (DFR) removes 29 CFR 2550.404a-4 from the Code of Federal Regulations, which is a regulation published in 2008 that provides a fiduciary safe harbor for the selection of annuity providers for the purpose of benefit distributions from individual account retirement plans covered by title I of the Employee Retirement Income Act of 1974 (ERISA). The regulatory safe harbor became unnecessary in 2019 when Congress amended ERISA to add a more streamlined fiduciary safe harbor covering the same activity. Although the statutory safe harbor did not technically nullify or repeal the regulatory safe harbor, its existence offers an unnecessary and inefficient alternative and may inadvertently be a trap for the unwary. This action improves the daily lives of the American people by reducing unnecessary, burdensome, and costly Federal regulations.
Agencies
- Labor Department
- Employee Benefits Security Administration
Business Impact
$$ - Med
This rule removes an outdated regulatory safe harbor for selecting annuity providers, streamlining compliance for businesses managing retirement plans. It offers cost savings and reduces the risk of confusion for fiduciaries, directly impacting operational efficiency for businesses.