Comment Letter to the Department of Labor in Response to the Departments Proposed Rule to Amend the Definition of Fiduciary Under ERISA

February 03, 2011

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From: MFA, Richard Baker

To:

The Office of Regulations and Interpretations: Employee Benefits Security Administration. U.S. Department of Labor

MFA submitted a comment letter to the Department of Labor in response to the Departments proposed rule to amend the definition of fiduciary under ERISA. In our letter, we encouraged the Department: (1) to confirm that the proposed rule would not impose fiduciary obligations on general partners, advisers and service providers to private funds with less than 25% ownership by ERISA plans, consistent with Congresss intent in the Pension Protection Act of 2006; (2) reconsider changes to the definition that would (a) delete the language that the agreement, arrangement or understanding between a service provider and a plan be mutual; (b) change the test that advice be a primary basis for a plans investment decision to requiring only that advice may be considered by the plan; and (c) remove a requirement that advice be individualized or tailored to a plan, as these proposed changes could have significant unintended consequences by making market participants fiduciaries without them knowing or intending to become a fiduciary; and (3) clarify the extent to which service providers to pooled investment funds will be deemed fiduciaries under the proposed rule and adopt appropriate exceptions to the prohibited transaction rules to ensure that funds can continue to enter into normal financial transactions on commercially reasonable terms. In our letter, we also requested an opportunity to testify at the Departments March 1 hearing on the proposed rule.

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