In a rather quick turnaround, the Department of Labor has withdrawn a final regulation previously published on Inauguration Day concerning who may provide investment advice to qualified retirement plan participants.  Previously, the new Administration had twice pushed back the effective date of those final regs until November 18, 2009 and then May 17, 2010  in order to receive more public comment on them.

The Pension Protection Act of 2006 (PPA) had developed a somewhat broad set of conditions under which individuals and entities could provide specific investment advice (as opposed to general investment education) to plan participants.  The PPA then authorized the DOL to issue regulations with greater levels of detail on what was permissible.

In the last days of the Bush Administration, the DOL issued those rules, which some in Congress took to be overly lenient.  One House Committee Chairman, George Miller (D-CA) passed a bill through his Committee that would have severely restricted those final regulations and required (among other things) increased independence of any financial adviser offering investment advice to participants.  The DOL postponed the effective date of the final regulations in order to receive additional public comment and to work with Congress on what was intended by the PPA.

On November 17, 2009, the DOL announced that it was withdrawing the final regulation altogether.  We now expect that it will begin its rulemaking process anew with the data collected from the previous public comments.

Plan sponsors will now need to review the DOL’s withdrawal of the final regulations and wait to see what the new requirements will be before safely assuming who may provide such investment advice to participants.

There are now three separate bills pending in Congress to expand both the amount of time COBRA continuation coverage may be available as well as to extend the previous COBRA premium subsidy under ARRA.

In the Senate, S. 2730 would extend the COBRA premium subsidy by 6 months, to June 30, 2010 (a total of 15 months) for those who became eligible on or after March 1, 2009.  It would also extend the eligibility date to June 30, 2010 (from December 31, 2009), and increase the subsidy amount from 65% to 75%.  Lastly, it would also expand eligibility for the subsidy to those who lose health coverage as a result of an involuntary reduction in hours.

In the House, there are two bills that have been introduced.  HR 3930 would extend COBRA continuation coverage for involuntarily terminated (or reduction of hours) individuals between April 1, 2009 and December 31, 2009 to 24 months from 18 months.  It also adds 6 months to the eligibility and assistance periods of subsidy.  The second House bill, HR 3966, would extend the subsidy program for involuntary terminations and loss of coverage through June 30, 2010.

Pay close attention to these three bills.  At this point, given national unemployment above 10%, it is highly likely that some form of these measures will be approved still this year.