[Federal Register Volume 79, Number 106 (Tuesday, June 3, 2014)]
[Proposed Rules]
[Pages 31893-31895]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-12667]


=======================================================================
-----------------------------------------------------------------------

DEPARTMENT OF LABOR

Employee Benefits Security Administration

29 CFR Part 2550

RIN 1210-AB38


Target Date Disclosure

AGENCY: Employee Benefits Security Administration, Labor.

ACTION: Proposed rule; reopening of comment period.

-----------------------------------------------------------------------

SUMMARY: The Department of Labor's Employee Benefits Security 
Administration is reopening the period for public comment on proposed 
regulatory amendments relating to enhanced disclosure concerning target 
date or similar investments, originally proposed November 30, 2010, in 
a previously published document in the Federal Register. In 2013, the 
Securities and Exchange Commission's Investor Advisory Committee 
recommended that the Commission develop a glide path illustration for 
target date funds that is based on a standardized measure of fund risk 
as a replacement for, or supplement to, an asset allocation glide path 
illustration. The Department is reopening the comment period on its 
2010 proposal, which contained an asset allocation glide path 
illustration requirement, to seek public comment on this 
recommendation.

[[Page 31894]]


DATES: Written comments on the proposed regulation published at 75 FR 
73987 (Nov. 30, 2010) should be received by the Department of Labor no 
later than July 3, 2014.

ADDRESSES: Written comments may be submitted to the addresses specified 
below. All comments will be made available to the public. Warning: Do 
not include any personally identifiable information (such as name, 
address, or other contact information) or confidential business 
information that you do not want publicly disclosed. All comments may 
be posted on the Internet and can be retrieved by most Internet search 
engines. Comments may be submitted anonymously. Persons submitting 
comments electronically are encouraged not to submit paper copies.
    Comments identified by RIN 1210-AB38 may be submitted by one of the 
following methods:
     Federal eRulemaking Portal: http://www.regulations.gov. 
Follow the instructions for submitting comments.
     Email: e-ORI@dol.gov
     Mail or Hand Delivery: Office of Regulations and 
Interpretations, Employee Benefits Security Administration, Room N-
5655, U.S. Department of Labor, 200 Constitution Avenue NW., 
Washington, DC 20210, Attention: RIN 1210-AB38; Target Date Disclosure. 
Comments received by the Department of Labor may be posted without 
change to http://www.regulations.gov and http://www.dol.gov/ebsa, and 
will be made available for public inspection at the Public Disclosure 
Room, N-1513, Employee Benefits Security Administration, 200 
Constitution Avenue NW., Washington, DC 20210.

FOR FURTHER INFORMATION CONTACT: Kristen Zarenko, Office of Regulations 
and Interpretations, Employee Benefits Security Administration, (202) 
693-8500. This is not a toll-free number.

SUPPLEMENTARY INFORMATION: In November 2010, the Department published a 
proposal to amend its qualified default investment alternative 
regulation (29 CFR 2550.404c-5) and participant-level fee disclosure 
regulation (29 CFR 2550.404a-5).\1\ The proposal includes more specific 
disclosure requirements for target date or similar funds (TDFs), based 
on evidence that plan participants and beneficiaries would benefit from 
additional information concerning these investments. Specifically, the 
proposal would require an explanation of the TDF's asset allocation, 
how the asset allocation will change over time (the TDF's ``glide 
path''), and the point in time when the TDF will reach its most 
conservative asset allocation; including a chart, table, or other 
graphical representation that illustrates such change in asset 
allocation. The proposal also would require, among other things, 
information about the relevance of the TDF's ``target date;'' any 
assumptions about participants' and beneficiaries' contribution and 
withdrawal intentions following the target date; and a statement that 
TDFs do not guarantee adequate retirement income and that participants 
and beneficiaries may lose money by investing in the TDF, including 
losses near and following retirement. Additional background and other 
information are contained in the Supplementary Information published 
with the proposed amendments.\2\ The comment period for the proposal 
originally closed on January 14, 2011.
---------------------------------------------------------------------------

    \1\ See 75 FR 73987 (Nov. 30, 2010), proposing to amend the 
Department's qualified default investment alternative regulation, 72 
FR 60452 (Oct. 24, 2007), and participant-level fee disclosure 
regulation, 75 FR 64910 (Oct. 20, 2010).
    \2\ See id.
---------------------------------------------------------------------------

    Throughout this regulatory initiative, the Department has consulted 
with the Securities and Exchange Commission (Commission). In the 
proposal, the Department specifically requested comment on whether the 
final rule should incorporate any of the elements of a rule proposed by 
the Commission to address concerns regarding the potential for investor 
misunderstandings about TDFs.\3\ In response, a large number of 
commenters strongly encouraged careful coordination with the Commission 
to avoid the potential cost and confusion (on the part of plan sponsors 
and participants and beneficiaries) that could result if the two 
agencies were to establish inconsistent disclosure requirements. 
Because of the relationship between the Department's and the 
Commission's regulatory proposals, the Department has continued to 
consult with Commission staff while working to issue a final rule.
---------------------------------------------------------------------------

    \3\ Commission Release Nos. 33-9126, 34-62300, IC-29301 (June 
2010).
---------------------------------------------------------------------------

    Accordingly, when the Commission reopened the public comment period 
for its proposal in 2012 to solicit feedback on research findings from 
the Commission's investor testing of comprehension and communication 
issues relating to TDFs,\4\ the Department similarly reopened the 
comment period for its proposed TDF regulation.\5\ At that time, the 
Department invited additional comments in light of the Commission's 
research and received ten additional public comments, which are 
available for review on the Department's Web site.\6\ Both agencies 
then resumed work on their respective regulatory initiatives.
---------------------------------------------------------------------------

    \4\ See 77 FR 20749 (April 6, 2012).
    \5\ See 77 FR 30928 (May 24, 2012).
    \6\ See http://www.dol.gov/ebsa/regs/cmt-1210-AB38.html.
---------------------------------------------------------------------------

    In April 2013, the Commission's Investor Advisory Committee 
(Committee) formally submitted several recommendations \7\ concerning 
target date mutual funds. These recommendations include, for example, 
that the Commission ``develop a glide path illustration for target date 
funds that is based on a standardized measure of fund risk . . . as 
either a replacement for or supplement to its proposed asset allocation 
glide path illustration.'' \8\ In response to the Committee's 
recommendations, the Commission again reopened the public comment 
period for its proposal on April 9, 2014, and requested comments on or 
before June 9, 2014.\9\
---------------------------------------------------------------------------

    \7\ See ``Target Date Mutual Funds'' at http://www.sec.gov/spotlight/investor-advisory-committee-2012.shtml. Both the 
Committee's recommendations and a letter from Commission Chair White 
in response to the recommendations are available on the Commission's 
Web site.
    \8\ http://www.sec.gov/spotlight/investor-advisory-committee-2012/iac-recommendation-target-date-fund.pdf.
    \9\ The Commission's Notice of request for additional comment 
was made available on the Commission's Web site, at http://www.sec.gov/rules/proposed/2014/33-9570.pdf, on April 3, 2014, and 
published in the Federal Register, at 79 FR 19564, on April 9, 2014.
---------------------------------------------------------------------------

    Accordingly, the Department has also decided to reopen the comment 
period for its regulatory proposal. Although the principal purpose of 
this action is to obtain public comments on the Committee's 
recommendations, including the development of a glide path illustration 
based on a standardized measure of fund risk, the Department also 
welcomes comments on any other matters that may have an effect on the 
Department's proposal. Parties who submit comments responding to the 
Commission's reopened comment period, and which are germane to the 
Department's rulemaking initiative, may send a copy to the Department 
or simply notify the Department of such comment and request that it be 
included in the record of the Department's rulemaking as well. 
Accordingly, the Department is extending the comment period until July 
3, 2014.


[[Page 31895]]


    Signed at Washington, DC, this 27th day of May, 2014.
Phyllis C. Borzi,
Assistant Secretary, Employee Benefits Security Administration, 
Department of Labor.
[FR Doc. 2014-12667 Filed 6-2-14; 8:45 am]
BILLING CODE 4510-29-P