[Federal Register Volume 77, Number 101 (Thursday, May 24, 2012)]
[Proposed Rules]
[Pages 30928-30929]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-12386]



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 in a previously 
published document in the Federal Register.

DATES: Written comments on the proposed regulation should be received 
by the Department of Labor no later than July 9, 2012.

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: [email protected].
     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: The Employee Benefits Security 
Administration of the Department of

[[Page 30929]]

Labor (Department) is reopening the period for public comment on 
proposed regulatory amendments to improve the information that is 
disclosed to participants and beneficiaries concerning investments in 
target date or similar funds (TDFs). In November 2010, the Department 
published a proposal to amend its qualified default investment 
alternative regulation (29 CFR 2550.404c-5) and participant-level 
disclosure regulation (29 CFR 2550.404a-5). The comment period for the 
proposal originally closed on January 14, 2011.\1\ The proposal 
includes more specific disclosure requirements for 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, 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 

    \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 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). The 
Department also specifically requested comment in its proposal 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 

    As part of its regulatory process, the Commission recently engaged 
a consultant to conduct investor testing of comprehension and 
communication issues relating to TDFs. A report presenting the findings 
of this research on individual investors' understanding of TDFs and 
related fund advertisements is publicly available on the Commissions' 
Web site.\4\ To provide interested parties an opportunity to comment on 
the results of this research and on its regulatory proposal, the 
Commission recently reopened the comment period for its proposal.\5\

    \4\ http://www.sec.gov/comments/s7-12-10/s71210-58.pdf.
    \5\ See 77 FR 20749 (April 6, 2012).

    As the results of this research also may be relevant to the 
Department's proposal, and in order to provide all persons who are 
interested in this research an opportunity to comment on the report, 
the Department is reopening the comment period before action is taken 
to finalize regulatory amendments. The Department invites additional 
comments on the TDF proposal in light of this new research. To avoid 
unnecessary duplication, the Department encourages parties who 
submitted comments to the Commission in response to their reopened 
comment period, and who consider their comments to be similarly 
relevant to the Department's review of the above-mentioned research, to 
submit (or reference) such comments, in response to this request, for 
inclusion in the Department's public record. Parties also may comment 
on any other matters that may have an effect on the Department's 
proposal. Accordingly, the Department is extending the comment period 
until July 9, 2012.

    Signed at Washington, DC, this 15th day of May 2012.
Phyllis C. Borzi,
Assistant Secretary, Employee Benefits Security Administration, 
Department of Labor.
[FR Doc. 2012-12386 Filed 5-23-12; 8:45 am]