ICI Comments on Labor Department's Proposed Filing Requirements

Washington, DC, August 2, 2005 - In a recent letter to the Labor Department, the Institute expresses its concerns with filing requirements the Department intends to impose on certain retirement plan service providers.

Background
The Labor-Management Reporting and Disclosure Act of 1959 (LMRDA) requires public disclosure of financial transactions or arrangements made between an employer and one or more of the following: a labor organization, union official, employee, or labor relations consultant. LMRDA requires every employer who has engaged in any such transaction or arrangement during the fiscal year to file a detailed report with the Secretary of Labor using Form LM-10.

However, according to a recent policy statement posted on the Department of Labor's website, a retirement plan service provider-investment manager, investment consultant, or accounting firm-now may be required to file Form LM-10 if the service provider hosts receptions and other entertainment involving more than $25 that include officials of union-related plans, such as Taft-Hartley plans. The posting also states that the union officials must report such amounts on a corresponding form, Form LM-30.

ICI Position
The Institute recently met with Labor Department officials to express the financial industry's concern about the application of the Form LM-10 filing requirements to service providers, and subsequently sent a letter to the Department detailing its concerns. First, the Institute questions the Labor Department's legal authority to apply the reporting requirement to service providers. Specifically, ICI questions whether LMRDA was intended to cover service providers to retirement plans for unionized employees, rather than the employers of unionized employees. ICI also objects to any retroactive application of the requirement, and requests that service providers not be required to make any filings before fiscal years beginning on or after January 1, 2006. In addition, ICI asks that interested parties be given the opportunity to comment on the proposed requirement before it is imposed.

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