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1 1 (March 11, 2008)

handle is hein.tera/crser0229 and id is 1 raw text is: Order Code RS22514 Updated March 11, 2008 CRS Repo for Congress Investment Advice and the Pension Protection Act of 2006 Jon 0. Shimabukuro Legislative Attorney American Law Division Summary This report examines Section 601 of the Pension Protection Act of 2006, which amends the Employee Retirement Income Security Act to allow for the provision of investment advice without fear of fiduciary liability. Prior to the enactment of Section 601, ERISA's prohibited transaction restrictions operated to discourage pension plan fiduciaries from providing investment advice to plan participants and beneficiaries. As amended, ERISA would now seem to allow for the provision of investment advice so long as such advice is provided pursuant to an eligible investment advice arrangement in compliance with the statute. As defined contribution pension plans, which generally require a participant to direct the investment of plan assets, have become the primary vehicles for accumulating retirement savings, there has been greater awareness by many participants of the need for investment advice. Section 601 of the Pension Protection Act of 2006 (PPA) amends the Employee Retirement Income Security Act (ERISA or the act) to allow for the provision of investment advice without fear of fiduciary liability.' This report provides background information on investment advice and the fiduciary responsibilities imposed by ERISA. The report also examines Section 601 of the PPA and its amendment of ERISA. Background ERISA provides a comprehensive federal scheme for the regulation of employee pension and welfare benefit plans offered by private employers.' Enacted in 1974, the act 1P.L. 109-280, § 601 (2006). 2 29 U.S.C. § 1001 et seq. See 29 U.S.C. § 1002(1) (defining an employee welfare benefit plan as any plan, fund, or program ... established or maintained by an employer ... for the purpose of providing for its participants or their beneficiaries ... medical, surgical, or hospital care or (continued...) Congressional Research Service The Library of Congress Prepared for Members and Committees of Congress

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