Federal Register / Vol. 75, No. 229 / Tuesday, November 30, 2010 / Proposed Rules 73987 

CIVIL MONETARY PENALTIES AUTHORITIES ADMINISTERED BY FDA AND ADJUSTED MAXIMUM PENALTY AMOUNTS— 

Continued 

U.S.C. section 

Former 

maximum 

penalty 

amount 

(in dollars) 1

Assessment method 

Date of last 

penalty figure 

or adjustment 

Adjusted maximum 

penalty amount 

(in dollars) 

333 note ....................... N/A For the six or subsequent violation within a 48-month 

period by a retailer with an approved training program.

2009 10,000 (not adjusted). 

333 note ....................... N/A For the first violation by a retailer without an approved 

training program.

2009 250 (not adjusted). 

333 note ....................... N/A For the second violation within a 12-month period by a 

retailer without an approved training program.

2009 500 (not adjusted). 

333 note ....................... N/A For the third violation within a 24-month period by a retailer without an approved training program.2009 1,000 (not adjusted). 

333 note ....................... N/A For the fourth violation within a 24-month period by a retailer without an approved training program.2009 2,000 (not adjusted). 

333 note ....................... N/A For the fifth violation within a 36-month period by a retailer without an approved training program.2009 5,000 (not adjusted). 

333 note ....................... N/A For the six or subsequent violation within a 48-month 

period by a retailer without an approved training program.

2009 10,000 (not adjusted). 

335b(a) ........................ 275,000 Per violation for an individual ........................................... 2008 300,000. 

335b(a) ........................ 1,100,000 Per violation for ‘‘any other person’’ ................................. 2008 1,200,000. 

360pp(b)(1) .................. 1,100 Per violation per person ................................................... 2008 1,100 (not adjusted). 

360pp(b)(1) .................. 330,000 For any related series of violations .................................. 2008 355,000. 

42 U.S.C. 

263b(h)(3) .................... 11,000 Per violation ...................................................................... 2008 11,000 (not adjusted). 

300aa–28(b)(1) ............ 110,000 Per occurrence ................................................................. 2008 120,000. 

1 Maximum penalties assessed under The Family Smoking Prevention and Tobacco Control Act do not have a ‘‘former maximum penalty.’’ 

Dated: November 23, 2010. 

Leslie Kux, 

Acting Assistant Commissioner for Policy. 

[FR Doc. 2010–30040 Filed 11–29–10; 8:45 am] 

BILLING CODE 4160–01–P 

DEPARTMENT OF LABOR 

Employee Benefits Security 

Administration 

29 CFR Part 2550 

RIN 1210–AB38 

Target Date Disclosure 

AGENCY: Employee Benefits Security 

Administration, Labor. 

ACTION: Proposed regulation. 

SUMMARY: The Department published in 

the Federal Register of October 24, 2007 

a final regulation (the qualified default 

investment alternative regulation) 

providing relief from certain fiduciary 

responsibilities for fiduciaries of 

participant-directed individual account 

plans who, in the absence of directions 

from a participant, invest the 

participant’s account in a qualified 

default investment alternative. On 

October 20, 2010, the Department 

published a final regulation that 

requires the disclosure of certain plan 

and investment-related information, 

including fee and expense information, 

to participants and beneficiaries in 

participant-directed individual account 

plans (the participant-level disclosure 

regulation). This document contains 

proposed amendments to the qualified 

default investment alternative 

regulation to provide more specificity as 

to the information that must be 

disclosed in the required notice to 

participants and beneficiaries 

concerning investments in qualified 

default investment alternatives, 

including target date or similar 

investments. This document also 

contains a proposed amendment to the 

participant-level disclosure regulation 

that would require the disclosure of the 

same information concerning target date 

or similar investments to all participants 

and beneficiaries in participant-directed 

individual account plans. 

DATES: Written comments on the 

proposed regulation should be received 

by the Department of Labor no later than 

January 14, 2011. 

ADDRESSES: To facilitate the receipt and 

processing of comments, EBSA 

encourages interested persons to submit 

their comments electronically to eORI@dol.gov, or by using the Federal 

eRulemaking portal http:// 

www.regulations.gov (following 

instructions for submission of 

comments). Persons submitting 

comments electronically are encouraged 

not to submit paper copies. Persons 

interested in submitting comments on 

paper should send or deliver their 

comments (preferably three copies) to: 

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: Target Date 

Amendments. All comments will be 

available to the public, without charge, 

online at http://www.regulations.gov 

and http://www.dol.gov/ebsa, and at the 

Public Disclosure Room, Employee 

Benefits Security Administration, U.S. 

Department of Labor, Room N–1513, 

200 Constitution Avenue, NW., 

Washington, DC 20210. 

FOR FURTHER INFORMATION CONTACT: 

Kristen L. Zarenko, Office of 

Regulations and Interpretations, 

Employee Benefits Security 

Administration, (202) 693–8500. This is 

not a toll-free number. 

SUPPLEMENTARY INFORMATION: 

A. Background 

Section 624(a) of the Pension 

Protection Act of 2006 (Pension 

Protection Act) added a new section 

404(c)(5) to ERISA. Section 404(c)(5)(A) 

of ERISA provides that, for purposes of 


jdjones on DSK8KYBLC1PROD with PROPOSALS-1
73988 Federal Register / Vol. 75, No. 229 / Tuesday, November 30, 2010 / Proposed Rules 

1 72 FR 60452 (Oct. 24, 2007). 

2 73 FR 23349 (Apr. 30, 2008). 

3See Field Assistance Bulletin No. 2008–03 

(April 29, 2008). 

4Employee Benefits Research Institute Issue Brief 

#327, March 2009. 

5See 2008 ERISA Advisory Council Working 

Group Report on Hard to Value Assets and Target 

Date Funds, found at: http://www.dol.gov/ebsa/ 

publications/2008ACreport1.html. 

6See http://aging.senate.gov/ 

record.cfm?id=308665&&; http://aging.senate.gov/ 

hearing_detail.cfm?id=309027& and http:// 

aging.senate.gov/hearing_detail.cfm?id=319426&. 

7The Investor Bulletin, published May 6, 2010, 

is available at: http://www.dol.gov/ebsa/pdf/ 

TDFInvestorBulletin.pdf. 

8Commission Release Nos. 33–9126, 34–62300, 

IC–29301, at http://www.sec.gov/comments/s7-12- 

10/s71210.shtml. 

section 404(c)(1) of ERISA, a participant 

in an individual account plan shall be 

treated as exercising control over the 

assets in the account with respect to the 

amount of contributions and earnings 

which, in the absence of an investment 

election by the participant, are invested 

by the plan in accordance with 

regulations prescribed by the Secretary 

of Labor. On October 24, 2007, the 

Department of Labor (Department) 

published a final regulation 

implementing the provisions of section 

404(c)(5) of ERISA.1 Correcting 

amendments to the final regulation were 

published on April 30, 2008.2 A 

fiduciary of a plan that complies with 

the final regulation, as amended, will 

not be liable for any loss, or by reason 

of any breach, that occurs as a result of 

investment in a qualified default 

investment alternative. The regulation 

describes the types of investments that 

qualify as default investment 

alternatives under section 404(c)(5) of 

ERISA and the other requirements that 

must be satisfied in order for a fiduciary 

to obtain the relief from liability 

described above. 

The final regulation provides that, in 

order for a fiduciary to obtain relief, 

participants and beneficiaries must 

receive information concerning the 

investments that may be made on their 

behalf. Specifically, paragraph (c)(3) of 

the final rule requires that participants 

and beneficiaries be furnished both an 

initial notice (generally thirty days in 

advance of a participant’s eligibility to 

participate in the plan) and an annual 

notice for subsequent plan years. 

Paragraph (d) of the final rule sets forth 

the information that must be included 

in these notices. In addition to the 

notice requirement, paragraph (c)(4) of 

the final regulation required that 

fiduciaries provide certain investmentrelated information that must be 

disclosed under the Department’s 404(c) 

regulation. Specifically, paragraph (c)(4) 

requires fiduciaries to provide to 

defaulted participants or beneficiaries 

the material described in sections 

2550.404c–1(b)(2)(i)(B)(1)(viii) and (ix) 

and 2550.404c–1(b)(2)(i)(B)(2). 

Since publication of the final rule, the 

Department has received many 

questions about the notice requirement, 

for example concerning the timing 

requirements for the notice and how 

much information must be disclosed 

concerning investment fees and 

expenses. The Department addressed 

these and other issues in a series of 

questions and answers concerning the 

final rule that was published in a Field 

Assistance Bulletin in April 2008.3 With 

respect to the disclosure of investment 

fee and expense information, the 

Department indicated at that time that it 

was developing a regulation to establish 

disclosure requirements for all 

participant-directed individual account 

plans. The Department anticipated that 

furnishing the investment information 

required by such regulation, when 

finalized, would satisfy the investmentrelated fee and expense disclosures 

required by the qualified default 

investment alternative regulation. 

Nonetheless, the Department continues 

to receive requests for more formal 

guidance as to how the content 

requirements of the qualified default 

investment alternative notice may be 

satisfied. As discussed below, the 

Department proposes amending the 

qualified default investment alternative 

regulation to provide more specificity as 

to the information that must be 

disclosed. 

In addition to questions about the 

notice requirement, recent attention has 

been paid to the increased use of ‘‘target 

date’’ or ‘‘lifecycle’’ funds and other 

similar investments (TDFs) as an 

investment alternative in participantdirected retirement plans, such as 

401(k) plans.4 The Department’s final 

regulation included TDFs as one of the 

permissible categories of investment 

funds or products that may be used as 

a qualified default investment 

alternative, if all of the requirements of 

the final rule have been satisfied. The 

growing popularity of these products 

led to a focus in recent years on issues 

relating to the design, operation, and 

selection of TDFs for 401(k) plans, both 

as investment alternatives for plans 

generally and as qualified default 

investment alternatives for participants 

that do not provide investment 

direction. The designation of all 

investment alternatives, including 

TDFs, to be made available under a 

private sector retirement plan is 

governed by the fiduciary responsibility 

provisions of ERISA. Persons with this 

responsibility must prudently select and 

monitor investment alternatives, 

including alternatives intended to be 

qualified default investment 

alternatives. 

In 2008, the Department’s ERISA 

Advisory Council studied several 

aspects of TDFs as 401(k) plan 

investment alternatives, including the 

challenges and risks they may pose to 

participants who invest in TDFs, the 

different types of TDFs, and appropriate 

criteria for selecting and monitoring 

TDFs. In its report to the Secretary of 

Labor, the Council recommended that 

the Department provide additional 

guidance to both plan fiduciaries and 

plan participants to enhance 

understanding of TDFs and the risks 

associated with TDF investing.5 In 

addition, there has been Congressional 

interest in target date fund issues.6 In 

June 2009, the Department and the 

Securities and Exchange Commission 

(Commission) held a joint public 

hearing to explore issues related to 

TDFs, including how they are managed 

at the investment level, how they are 

selected by plan fiduciaries and by 

investors, and how information about 

them is disclosed to plan participants 

and investors. 

Following the public hearing and 

extensive review of the testimony 

presented and supplemental materials 

concerning TDFs, the Department was 

persuaded that both plan fiduciaries and 

plan participants would benefit from 

additional guidance concerning TDFs. 

Accordingly, the Department and the 

Commission recently published a joint 

Investor Bulletin to better educate 

investors and plan participants who are 

considering investing in TDFs.7 The 

Commission also recently proposed 

rules to address concerns regarding the 

potential for investor 

misunderstandings about TDFs.8 The 

Department further intends to publish a 

series of tips intended to assist plan 

fiduciaries in obtaining and evaluating 

relevant information when selecting and 

monitoring TDFs as investment options 

for participant-directed retirement 

plans. 

The Department also determined that 

improvements can be made in the 

information that is disclosed to 

participants and beneficiaries 

concerning their plan investment in 

TDFs, whether by their own investment 

direction or pursuant to the qualified 

default investment alternative 

regulation. To ensure that consistent 

information concerning TDFs is 

furnished to defaulted participants and 

to participants who give investment 


jdjones on DSK8KYBLC1PROD with PROPOSALS-1
Federal Register / Vol. 75, No. 229 / Tuesday, November 30, 2010 / Proposed Rules 73989 

9Consistent with the participant-level disclosure 

regulation, the material required by section 

2550.404a–5(d)(4), which is referred to in paragraph 

(c)(4) of this amendment, must be furnished upon 

request. 

10 § 2550.404(c)–5(d)(3). 

directions, the Department is publishing 

in this Notice proposed amendments to 

both the qualified default investment 

alternative regulation and the 

participant-level disclosure regulation. 

The amendment to the participant-level 

disclosure regulation, at § 2550.404a–5 

(75 FR 64910, October 20, 2010), will be 

included in paragraph (i)(4) of that 

regulation, which was reserved for this 

purpose. More detailed information 

about the participant-level disclosure 

regulation, including the general 

investment-related disclosure 

requirements, can be found in the 

Supplementary Information for that 

regulation. 

B. Description of Amendments 

This proposal amends paragraphs 

(c)(4) and (d)(3), (4), and (5) of the 

qualified default investment alternative 

regulation to more specifically describe 

certain investment-related information 

that must be included in the required 

notice to participants and beneficiaries. 

This information is intended to 

complement the new investment-related 

disclosure requirements contained in 

the participant-level disclosure 

regulation. 

Paragraph (c)(4) of the rule is being 

revised to reflect amendments to the 

Department’s 404(c) regulation that 

were made as part of the participantlevel disclosure regulation. Rather than 

referring to requirements previously 

contained in the 404(c) regulation, this 

paragraph of the qualified default 

investment alternative regulation now 

requires fiduciaries to provide the 

comparable materials that are described 

in section 2550.404a–5(d)(3) and (4) of 

the participant-level disclosure 

regulation.9

Paragraph (d)(3) of the rule requires 

that the notice include: ‘‘[a] Description 

of the qualified default investment 

alternative, including a description of 

the investment objectives, risk and 

return characteristics (if applicable), and 

fees and expenses attendant to the 

investment alternative[.]’’ 10 To ensure 

that plan fiduciaries understand the 

specific investment information that 

must be disclosed to defaulted 

participants and beneficiaries about 

qualified default investment 

alternatives, and to better conform these 

requirements to those of all participantdirected individual account plans 

pursuant to the Department’s 

participant-level disclosure regulation, 

proposed paragraph (d)(3) contains six 

separate elements. The description of 

the qualified default investment 

alternative must first include the name 

of the investment’s issuer. Second, the 

description must include the 

investment’s objectives or goals. Third, 

the description must include the 

investment’s principal strategies 

(including a general description of the 

types of assets held by the investment), 

and principal risks (e.g., as required by 

Securities and Exchange Commission 

Form N–1A). Fourth, the description 

must include the investment’s historical 

performance data (e.g., 1-, 5-, and 10- 

year returns) and, if applicable, any 

fixed return, annuity, guarantee, death 

benefit, or other ancillary features; as 

well as a statement indicating that an 

investment’s past performance is not 

necessarily an indication of how the 

investment will perform in the future. 

Fifth, the description must include the 

investment’s attendant fees and 

expenses, including: Any fees charged 

directly against the amount invested in 

connection with acquisition, sale, 

transfer of, or withdrawal (e.g., sales 

loads, sales charges, deferred sales 

charges, redemption fees, surrender 

charges, exchange fees, account fees, 

and purchase fees); any annual 

operating expenses (e.g., expense ratio); 

and any ongoing expenses in addition to 

annual operating expenses (e.g., 

mortality and expense fees). For 

purposes of these requirements to 

disclose an investment’s objectives or 

goals, principal strategies and principal 

risks, historical performance, and fees 

and expenses, the Department requests 

comment on the extent to which these 

requirements should conform to the 

final participant-level disclosure 

regulation; for example, should the 

more specific standards for investmentrelated information contained in the 

participant-level disclosure regulation 

be incorporated by reference into the 

qualified default investment alternative 

regulation? The Department believes 

that conforming the requirements will 

make it easier for plan fiduciaries and 

administrators to comply and help to 

avoid confusion among participants and 

beneficiaries who will receive the 

required disclosures. 

The sixth requirement will ensure 

that participants and beneficiaries 

obtain comprehensive information 

about TDFs that apply age or target 

retirement-based asset allocations, 

described in paragraph (e)(4)(i) of the 

qualified default investment alternative 

regulation. Specifically, to the extent the 

information is not already disclosed 

pursuant to the preceding requirements 

of paragraph (d)(3) of the rule, the 

description must satisfy three 

requirements. The first is an explanation 

of the asset allocation, how the asset 

allocation will change over time, and 

the point in time when the investment 

will reach its most conservative asset 

allocation, including a chart, table, or 

other graphical representation that 

illustrates such change in asset 

allocation over time and that does not 

obscure or impede a participant’s or 

beneficiary’s understanding of the 

information explained pursuant to this 

requirement. The Department 

understands that many investment 

issuers and service providers already 

include simple and straight-forward 

graphs, pie chart series, or other 

illustrations to assist investors by 

showing them how asset allocations in 

TDFs change over time. To the extent 

such illustrations are not already 

furnished to participants and 

beneficiaries, the Department is 

persuaded that any additional burden 

associated with preparation of a 

compliant illustration will prove highly 

beneficial to enhance participants’ and 

beneficiaries’ understanding of a TDF’s 

asset allocation and how it will change 

over time. 

The second requirement depends on 

whether the alternative is named, or 

otherwise described, with reference to a 

particular date (e.g., a target date). For 

example, many funds include a target 

retirement date in the name itself (e.g., 

a ‘‘2030 fund’’ or a ‘‘2040 fund’’). In some 

cases the name of the alternative may 

not include a date, but a retirement or 

other target date may be referenced or 

implied in the description of the 

alternative’s objectives or goals, or 

principal strategies or principal risks; 

this requirement applies to those 

alternatives as well. The notice must 

explain the age group for whom the 

investment is designed, the relevance of 

the date, and any assumptions about a 

participant’s or beneficiary’s 

contribution and withdrawal intentions 

on or after such date. The third 

requirement is a statement that the 

participant or beneficiary may lose 

money by investing in the qualified 

default investment alternative, 

including losses near and following 

retirement, and that there is no 

guarantee that investment in the 

qualified default investment alternative 

will provide adequate retirement 

income. All of the information required 

to be disclosed concerning TDFs and 

similar products is consistent with the 

analysis discussed in the Department’s 

recent guidance to plan participants and 

expected guidance to plan fiduciaries 


jdjones on DSK8KYBLC1PROD with PROPOSALS-1
73990 Federal Register / Vol. 75, No. 229 / Tuesday, November 30, 2010 / Proposed Rules 

11See footnote 8, above. 

12 § 2550.404(c)–5(d)(4). 13 § 2550.404(c)–5(d)(5). 

concerning the factors that must be 

taken into account when selecting and 

monitoring, or investing in, these 

products. The Department is interested 

in comments as to whether, and to what 

extent, the final rule should include 

disclosure elements or concepts 

contained in the Commission’s 

rulemaking.11

To ensure that all participants and 

beneficiaries in participant-directed 

individual account plans, not only 

participant and beneficiaries who are 

invested in a qualified default 

investment alternative, receive the same 

information about TDFs, the Department 

also is proposing in this Notice to 

include the same three disclosure 

requirements concerning TDFs in the 

participant-level disclosure regulation. 

Specifically, these new requirements, if 

adopted, will be added to paragraph 

§ 2550.404a–5(i)(4) of the participantlevel disclosure regulation, which was 

reserved for this purpose. To ensure 

consistency between these regulations, 

the Department expects that any 

changes made to the TDF disclosure 

requirements in response to comments 

on this Notice will be reflected in both 

the qualified default investment 

alternative regulation and the 

participant-level disclosure regulation. 

Paragraph (d)(4) of the qualified 

default investment alternative 

regulation requires that the notice to 

participants contain a ‘‘description of 

the right of the participants and 

beneficiaries on whose behalf assets are 

invested in a qualified default 

investment alternative to direct the 

investment of those assets to any other 

investment alternative under the plan, 

including a description of any 

applicable restrictions, fees or expenses 

in connection with such transfer[.]’’ 12 In 

the proposal published today, this 

paragraph has been modified. If any 

such fees or restrictions are applicable, 

this paragraph would only require a 

statement that certain fees and 

limitations may apply in connection 

with such transfer. The requirement to 

disclose the fees and expenses 

themselves would be moved to 

paragraph (d)(3)(v), discussed above; if 

other limitations may apply, the notice 

must so state. 

Finally, paragraph (d)(5) of the 

qualified default investment alternative 

regulation would be broadened to 

clarify that comprehensive information 

about the qualified default investment 

alternative, as well as the other 

investment alternatives available under 

the plan, is available to participants and 

beneficiaries. Currently, paragraph 

(d)(5) only requires ‘‘[a]n explanation of 

where the participants and beneficiaries 

can obtain investment information 

concerning the other investment 

alternatives available under the plan.’’ 13

As amended by this proposal, this 

paragraph requires an explanation of 

where the participants and beneficiaries 

can obtain additional investment 

information concerning the qualified 

default investment alternative and the 

other investment alternatives available 

under the plan. The Department 

included this modification to conform 

to the participant-level disclosure 

regulation. Specifically, the Department 

expects that paragraph (d)(5), if adopted 

in final form, will ensure that defaulted 

participants and beneficiaries know 

where to obtain any additional 

investment information required to be 

disclosed pursuant to the final 

participant-level disclosure regulation 

concerning all of the plan’s investment 

alternatives, including qualified default 

investment alternatives. 

C. Furnishing Required Disclosures 

In conjunction with the adoption of 

the final participant-level disclosure 

regulation, § 2550.404a–5 (75 FR 64910, 

October 20, 2010), the Department 

explained in the Supplementary 

Information that, given the differing 

views on the use of and standards for 

electronic disclosure, it would be 

undertaking a review of the safe harbor 

applicable to the use of electronic media 

for furnishing information to plan 

participants and beneficiaries (29 CFR 

2520.104b–1(c)). The Department 

further indicated that, in the very near 

future, it will be publishing a Federal 

Register notice requesting public 

comments, views, and data relating to 

the electronic distribution of plan 

information to plan participants and 

beneficiaries. The Department also 

noted that, pending the completion of 

its review and the issuance of further 

guidance, the general disclosure 

regulation at 29 CFR 2520.104b–1 

applies to material furnished under the 

participant-level disclosure regulation, 

including the safe harbor for electronic 

disclosures at paragraph (c) of the 

general disclosure regulation. The 

Department anticipates that resolution 

of the issues involved with the 

electronic disclosure of plan 

information will directly affect the 

manner in which materials required by 

the amendments contained in this 

notice may be furnished to participants 

and beneficiaries. Accordingly, 

interested persons are encouraged to 

participate in the Department’s 

forthcoming solicitation of comments on 

the use of electronic media for 

furnishing plan information. 

D. Effective Date 

The Department proposes that the 

amendments to regulation sections 

2550.404a–5 and 2550.404c–5 contained 

in this notice will be effective 90 days 

after publication of the final rule in the 

Federal Register. The Department 

invites comment on whether the final 

rule should be effective on a different 

date. 

E. Regulatory Impact Analysis 

Executive Order 12866 Statement 

Under Executive Order 12866, the 

Department must determine whether a 

regulatory action is ‘‘significant’’ and 

therefore subject to the requirements of 

the Executive Order and subject to 

review by the Office of Management and 

Budget (OMB). Under section 3(f) of the 

Executive Order, a ‘‘significant 

regulatory action’’ is an action that is 

likely to result in a rule (1) Having an 

effect on the economy of $100 million 

or more in any one year, or adversely 

and materially affecting a sector of the 

economy, productivity, competition, 

jobs, the environment, public health or 

safety, or State, local or tribal 

governments or communities (also 

referred to as ‘‘economically 

significant’’); (2) creating serious 

inconsistency or otherwise interfering 

with an action taken or planned by 

another agency; (3) materially altering 

the budgetary impacts of entitlement 

grants, user fees, or loan programs or the 

rights and obligations of recipients 

thereof; or (4) raising novel legal or 

policy issues arising out of legal 

mandates, the President’s priorities, or 

the principles set forth in the Executive 

Order. Although the Department 

believes that this regulatory action is not 

economically significant within the 

meaning of section 3(f)(1) of the 

Executive Order, the action has been 

determined to be significant within the 

meaning of section 3(f)(4) of the 

Executive Order, and accordingly, OMB 

has reviewed this notice of proposed 

rulemaking pursuant to the Executive 

Order. The Department provides the 

following assessment of the potential 

costs and benefits associated with the 

proposed regulation below. 

Need for Regulatory Action 

As discussed earlier in this preamble, 

on October 24, 2007, the Department 

published a final regulation 

implementing the provisions of section 


jdjones on DSK8KYBLC1PROD with PROPOSALS-1
Federal Register / Vol. 75, No. 229 / Tuesday, November 30, 2010 / Proposed Rules 73991 

14 72 FR 60452 (Oct. 24, 2007). Correcting 

amendments to the final regulation were published 

on April 30, 2008 (73 FR 23349). 

15 Donahue, Andrew. Testimony Concerning 

Target Date Funds. Before the United States Senate 

Special Committee on Aging. October 28, 2009. 

16Borzi, Phyllis. Testimony of Phyllis C. Borzi. 

Before the United States Senate Special Committee 

on Aging. October 28, 2009. 

17Profit Sharing/401k Council of America, 52nd 

Annual Survey of Profit Sharing and 401(k) plans, 

for plan year 2008. 

18 Deloitte Financial Advisory Services LLP, 

Target Date Funds: Historical Volatility/Return 

Profiles, unpublished presentation to the U.S. 

Department of Labor, Employee Benefits Security 

Administration (Sept. 30, 2009). In particular, the 

research found that the 1-year volatility was 

generally greater than the 3-year volatility and the 

1-year returns were lower than the 3-year returns. 

Deloitte also found that funds with target date 2010 

were more volatile in 2008 than they were in 2007. 

In addition, Deloitte reports that volatility among 

2010 TDFs correlated with the fraction of the funds 

that are invested in stock and small 2010 funds are 

more heterogeneous in rates of return and in 

volatility than large funds. 

19Borzi, Phyllis. Testimony of Phyllis C. Borzi. 

Before the United States Senate Special Committee 

on Aging. October 28, 2009. 

20See e.g. Principles to Enhance Understanding 

of Target Date Funds: Recommended by the ICI 

Target Date Fund Disclosure Working Group. June 

18, 2009. http://www.ici.org/pdf/ 

ppr_09_principles.pdf. 

In order to address some of the deficiencies in 

communication relating to TDFs, the Investment 

Company Institute made a series of 

recommendations for disclosure, many of which 

overlap with the requirements contained in these 

proposed regulations. See e.g. Charlson, Josh et al. 

Target Date Series Research Paper: 2010 Industry 

Survey, Morningstar, 2010. http:// 

corporate.morningstar.com/US/documents/ 

MethodologyDocuments/MethodologyPapers/ 

TargetDateFundSurvey_2010.pdf. 

21Based on 2007 Form 5500 filings. 

22The Department’s estimate is based on the 

Profit Sharing/401k Council of America, 52nd 

Annual Survey of Profit Sharing and 401(k) plans, 

for plan year 2008. This survey finds that 57.7 

percent of participant-directed individual account 

plans offer TDFs as an investment option (483,000 

* .577 = 278,691). It also finds that 39.6 percent of 

participant-directed individual account plans have 

automatic enrollment and that 59.7 percent of those 

plans use TDFs as the QDIA (483,000 * .396 * .597 

= 114,187). 

23Collins, Margaret. Target-Date Funds May Miss 

Mark for Unsavvy Savers. Bloomberg http:// 

www.bloomberg.com/apps/ 

news?pid=20603037&sid=aSGY6tmw7IXs. The 

Continued 

404(c)(5) of ERISA.14 A fiduciary of a 

plan that complies with the final 

regulation, as amended, will not be 

liable for any loss, or by reason of any 

breach, that is the direct and necessary 

result of investing all or a part of a 

participant’s or beneficiary’s account in 

a qualified default investment 

alternative. As noted in the regulation, 

this relief does not apply to fiduciary 

duties or liability related to the selection 

or monitoring of particular qualified 

default investment alternatives. The 

regulation describes the types of 

investments that qualify as default 

investment alternatives under section 

404(c)(5) of ERISA and the other 

requirements that must be satisfied in 

order for a fiduciary to obtain the relief 

from liability described above. 

As discussed earlier, the Department’s 

final qualified default investment 

alternative regulation includes TDFs as 

one of the permissible categories of 

investment funds or products that may 

be used as a qualified default 

investment alternative, if all of the 

requirements of the final rule have been 

satisfied. Since the issuance of the 

Department’s final qualified default 

investment alternative regulation, plans 

have increased their use of TDFs as an 

investment alternative.15 At the end of 

the first quarter of 2009, the amount of 

employer sponsored defined 

contribution plan assets invested in 

TDFs totaled $145 billion, compared to 

$37 billion in 2003.16 A recent survey 

found that nearly 60 percent of plans 

have made TDFs the qualified default 

investment alternative for participants 

that do not provide investment direction 

and nearly 60 percent of participantdirected individual account plans, such 

as 401(k) plans, offer TDFs as an 

investment alternative.17

The financial market downturn that 

started in 2008 increased volatility and 

lowered returns of TDFs.18 Many TDFs 

designed for people recently nearing or 

entering retirement suffered large losses. 

For example, on average, participants 

invested in TDFs dated 2010 and 2015 

lost about a quarter of their value in 

2008. Many of these funds typically 

held about half of the holdings in 

stocks, following glide paths that did 

not significantly reduce that percentage 

for 5 years or more after the average 

investor retired.19 The Background 

discussion, above, summarizes 

responses to this development, for 

example from the U.S. Senate Special 

Committee on Aging, and activities 

undertaken by the Department and the 

Securities and Exchange Commission 

since then. 

Experts within the investment 

community agree that TDF disclosures 

to participants and beneficiaries need to 

be improved. For example, the 

Investment Company Institute (ICI) 

Target Date Fund Disclosure Working 

Group reviewed existing TDF 

disclosures and in a June 2009 Report, 

recommended that TDFs display 

prominently five key pieces of 

information to help enhance investors’ 

understanding such as the relevance of 

the target date used in a fund’s name, 

the assumptions the fund makes 

regarding the investor’s withdrawal 

intentions at and after the target date, 

the age group for whom the fund is 

designed, an illustration of the glide 

path that the TDF follows to reduce its 

equity exposure and become more 

conservative over time, and a statement 

that the risks associated with a TDF 

include the risk of loss near, at, or after 

the target date and that there is no 

guarantee that the fund will provide 

adequate income at and through the 

investor’s retirement.20

Based on the foregoing, the 

Department is proposing to amend its 

final qualified default investment 

alternative and participant-level 

disclosure regulations to improve the 

information that is disclosed to 

participants and beneficiaries regarding 

TDFs. 

Affected Entities 

Based on the latest available 

information, the Department estimates 

that there are approximately 483,000 

participant-directed individual account 

plans.21 The Department’s proposed 

amendment to its final qualified default 

investment alternative rule would affect 

the approximately 114,000 participantdirected individual account plans that 

use TDFs as their qualified default 

investment alternative and the proposed 

amendment to its participant-level 

disclosure final rule would affect 

278,000 participant-directed individual 

account plans that offer TDFs as an 

investment alternative.22 The 

Department also estimates that 43.6 

million participants and beneficiaries 

are covered by plans using TDFs as an 

investment alternative. 

Benefits 

The Department expects that the 

enhanced disclosures required by the 

proposed regulation would benefit 

participants and beneficiaries by 

providing them with critical 

information they need to evaluate the 

quality of TDFs and how specific TDFs 

match their risk profile. This should 

lead to improved investment results and 

retirement planning decisions. The TDF 

disclosures would foster a better 

understanding of how TDFs operate and 

the glide path that is associated with 

each fund. The Department believes that 

the disclosures under this proposed 

regulation, combined with the greater 

transparency required by the 

Department’s participant-level 

disclosure regulation, would allow 

participants and beneficiaries to 

determine whether the efficient way in 

which TDFs allow them to invest in a 

mix of asset classes and rebalance their 

asset allocation periodically is worth the 

price differential they generally pay for 

such funds.23


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author finds that the median fee for TDFs is 

approximately .85 (depending on the age of the 

saver). However, some expense ratios are as low as 

.19 percent, while others are as high as 1.50 

percent. 

24EBSA estimates of labor rates include wages, 

other benefits, and overhead based on the National 

Occupational Employment Survey (May 2008, 

Bureau of Labor Statistics) and the Employment 

Cost Index (June 2009, Bureau of Labor Statistics). 

25The Department estimate of 18.4 million 

participants is derived as follows: 76.6 percent of 

eligible workers participate in employer-sponsored 

pension plans. Based on 2007 Form 5500 data, the 

Department estimates that 59.6 million individuals 

are active participants in participant-directed 

individual account plans. Using those two numbers, 

the Department estimates that 77.8 million workers 

are eligible to participate in participant-directed 

individual account plans (77.8 million * .766 = 59.6 

million). The Department estimates that 39.6 

percent of plans have automatic enrollment, and 

59.7 percent of these plans use TDFs as their QDIA 

(77.8 million*.396 * .597=18.4 million). 

26These individuals receive the QDIA notice 

twice in their first year of participation: Once when 

they are eligible to participate in the plan and once 

when all participants receive the plan’s annual 

QDIA notice. 

27 18.4 million * .062 * .068=.78 million 

(rounded). 

Although the Department is unable to 

quantify the benefits associated with the 

proposed regulation, it is confident that 

the benefits justify their costs. 

Costs 

The Department estimates that the 

proposed regulation would result in 

66.2 million TDF disclosures being 

distributed. The associated total hour 

burden for affected plans is estimated to 

be 29,000 hours with an equivalent cost 

of $1.8 million annually. The estimated 

cost burden for plans to distribute the 

notices is $4.1 million annually. 

Because these costs are associated with 

information collection requests covered 

by the Paperwork Reduction Act, the 

data and methodology used in 

developing the cost estimates are more 

fully discussed in the Paperwork 

Reduction Act section, below. 

Paperwork Reduction Act 

As part of its continuing effort to 

reduce paperwork and respondent 

burden, the Department of Labor 

conducts a preclearance consultation 

program to provide the general public 

and federal agencies with an 

opportunity to comment on proposed 

and continuing collections of 

information in accordance with the 

Paperwork Reduction Act of 1995 (PRA 

95) (44 U.S.C. 3506(c)(2)(A)). This helps 

to ensure that requested data can be 

provided in the desired format, 

reporting burden (time and financial 

resources) is minimized, collection 

instruments are clearly understood, and 

the impact of collection requirements on 

respondents can be properly assessed. 

Currently, EBSA is soliciting 

comments concerning the information 

collection request (ICR) included in the 

Proposed Rule on the Fiduciary 

Requirements for Disclosure and Default 

Investment Alternatives Under 

Participant Directed Individual Account 

Plans. A copy of the ICR may be 

obtained by contacting the PRA 

addressee shown below. 

The Department has submitted a copy 

of the proposed rule to OMB in 

accordance with 44 U.S.C. 3507(d) for 

review of its information collections. 

The Department and OMB are 

particularly interested in comments 

that: 

• Evaluate whether the collection of 

information is necessary for the proper 

performance of the functions of the 

agency, including whether the 

information will have practical utility; 

• Evaluate the accuracy of the 

agency’s estimate of the burden of the 

collection of information, including the 

validity of the methodology and 

assumptions used; 

• Enhance the quality, utility, and 

clarity of the information to be 

collected; and 

• Minimize the burden of the 

collection of information on those who 

are to respond, including through the 

use of appropriate automated, 

electronic, mechanical, or other 

technological collection techniques or 

other forms of information technology, 

e.g., permitting electronic submission of 

responses. 

Comments should be sent to the Office 

of Information and Regulatory Affairs, 

Office of Management and Budget, 

Room 10235, New Executive Office 

Building, Washington, DC 20503; 

Attention: Desk Officer for the 

Employee Benefits Security 

Administration. OMB requests that 

comments be received within 30 days of 

publication of the proposed rule to 

ensure their consideration. 

PRA Addressee: Address requests for 

copies of the ICR to G. Christopher 

Cosby, Office of Policy and Research, 

U.S. Department of Labor, Employee 

Benefits Security Administration, 200 

Constitution Avenue, NW., Room N– 

5718, Washington, DC 20210. 

Telephone (202) 693–8410; Fax: (202) 

219–5333. These are not toll-free 

numbers. ICRs submitted to OMB also 

are available at http://www.RegInfo.gov. 

(a) Proposed Amendment to Qualified 

Default Investment Alternative 

Regulation 

Under the proposed amendment to 

paragraph (d)(3) of the Department’s 

qualified default investment alternative 

regulation, the notice provided to 

participants and beneficiaries that use 

TDFs as a qualified default investment 

alternative (the QDIA notice) would be 

required to contain comprehensive 

information about TDFs. This 

information is described in detail earlier 

in this preamble, along with other 

changes to the information required to 

be disclosed in the QDIA notice that do 

not relate specifically to TDFs. 

The Department understands that 

many investment issuers and service 

providers currently furnish straightforward graphs, pie chart series, and 

other illustrations to demonstrate to 

investors how asset allocations in TDFs 

change over time and other information 

that would be required to be disclosed 

in the QDIA notice by the proposed 

regulation. Therefore, the burden that 

would be imposed by this proposed 

regulation stems primarily from 

incorporating the more comprehensive 

TDF disclosure into the QDIA notice. 

The Department invites comments 

regarding this assumption. 

The Department believes that a 

financial professional should be able to 

incorporate the TDF disclosures into the 

QDIA notice, on average, in 

approximately 15 minutes at a labor rate 

of approximately $63 per hour.24 The 

Department estimates that the hour 

burden imposed on the approximately 

114,000 affected plans would be 28,520 

hours (114,079 plans * 0.25 hours) with 

an equivalent cost of $1.79 million 

(114,079 plans * .25 hours per plan * 

$62.81/hour). 

The Department estimates that the 

disclosure would add two pages to the 

QDIA notice, and that an estimated 18.4 

million participants would be required 

to receive the disclosures.25 The 

Department expects that 38 percent of 

participants would receive the 

disclosure by electronic means, leaving 

an estimated 11.4 million paper 

disclosures that would be sent via mail. 

The Department estimates that 6.8 

percent of participants are new to a 

plan 26 in a given year; therefore, 

780,000 27 participants generally would 

be required to receive the QDIA notice 

at least 30 days in advance of the date 

of plan eligibility. No mailing costs are 

included in the cost estimates, because 

the TDF disclosure would be 

incorporated into the QDIA notice. In 

total, 12.2 million paper disclosures 

would be required. Assuming paper 

costs of $.05 per page, the Department 

estimates that the cost burden 

associated with this proposed 

regulation’s amendment to the QDIA 

notice would be $1.2 million. 


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28The Department’s estimate is based on the 

Profit Sharing/401k Council of America, 52nd 

Annual Survey of Profit Sharing and 401(k) plans, 

for plan year 2008. 

29 43.6 million * .068 = 2.96 million. 

30The basis for this definition is found in section 

104(a)(2) of the Act, which permits the Secretary of 

Labor to prescribe simplified annual reports for 

pension plans that cover fewer than 100 

participants.. 

31Profit Sharing/401k Council of America, 52nd 

Annual Survey of Profit Sharing and 401(k) Plans, 

for plan year 2008. 

(b) Proposed Amendment to ParticipantLevel Disclosure Regulation 

The proposed amendment to the 

Department’s participant-level 

disclosure regulation would require 

participant-directed individual account 

plans that offer TDFs as a designated 

investment alternative to include the 

TDF disclosures as an appendix to the 

participant-level disclosures required by 

29 CFR 2550.404a–5(d)(1) and (d)(2). 

The Department assumes that plans 

would incur a de minimis cost to 

prepare the appendix, because, as stated 

above, investment issuers and service 

providers already have the TDF 

information readily available to provide 

to plans. No additional mailing costs are 

expected, because the TDF disclosures 

would be attached as an appendix to, 

and distributed with, the participantlevel disclosure. Thus, the only 

anticipated additional costs would 

pertain to the additional paper costs 

associated with including the additional 

TDF appendix with the participant-level 

disclosure. 

The TDF appendix is expected, on 

average, to add two pages to the 

participant-level disclosure. As 

discussed above, the Department 

estimates that 43.6 million participants 

are covered by participant-directed 

individual account plans that offer TDFs 

as an investment alternative.28 The 

Department estimates that 6.8 percent of 

participants are new to a plan in a given 

year; therefore, 2.96 million additional 

disclosures would be required 29

resulting in a total of 46.5 million TDF 

fund appendices being distributed 

annually. The Department estimates that 

38 percent of the disclosures would be 

distributed electronically at a de 

minimis cost, leaving 28.8 million paper 

disclosures to be distributed via mail. 

Assuming paper costs of $0.10 per 

participant ($.05 per page), the proposed 

amendment to the participant-level 

disclosure regulation would impose an 

additional cost of approximately $2.9 

million to the participant-level 

disclosure. 

(c) Summary 

Overall, the proposed amendments to 

the qualified default investment 

alternative and participant-level 

disclosure regulations would result in 

approximately 66.2 million TDF 

disclosures being distributed. The total 

hour burden associated with the 

additional disclosures would be an 

estimated 29,000 hours with an 

equivalent cost of $1.8 million (all 

allocated to the qualified default 

investment alternative regulation). The 

Department estimates that the total cost 

burden for the disclosures would be 

$4.1 million ($1,217,000 (qualified 

default investment alternative); 

$2,884,000 (participant-level 

disclosure)). 

These paperwork burden estimates 

are summarized as follows: 

Type of Review: Revised collections. 

Agency: Employee Benefits Security 

Administration, Department of Labor. 

Title: Default Investment Alternatives 

Under Participant Directed Individual 

Account Plans (QDIA Regulation 

Amendment) and Fiduciary 

Requirements for Disclosure in 

Participant-Directed Individual Account 

Plans (Participant-Level Disclosure 

Regulation Amendment). 

OMB Control Number: 1210–0132; 

1210–0090. 

Affected Public: Business or other forprofit; not-for-profit institutions. 

Respondents: 114,000 (QDIA 

Regulation Amendment); 278,000 

(Participant-Level Disclosure 

Amendment). 

Responses: 66,157,539 (19,636,964 

QDIA Regulation Amendment; 

46,520,575 Participant-Level Disclosure 

Regulation Amendment). 

Frequency of Response: Annually. 

Estimated Total Annual Burden 

Hours: 29,000 hours (first year and 

subsequent years; all allocated to QDIA 

Regulation Amendment). 

Estimated Total Annual Burden Cost: 

$4,102,000 (first year and subsequent 

years); $1,217,500 (QDIA Regulation 

Amendment); $2,884,500 (ParticipantLevel Disclosure Regulation 

Amendment). 

Regulatory Flexibility Act 

The Regulatory Flexibility Act (5 

U.S.C. 601 et seq.) (RFA) imposes 

certain requirements with respect to 

Federal rules that are subject to the 

notice and comment requirements of 

section 553(b) of the Administrative 

Procedure Act (5 U.S.C. 551 et seq.) and 

which are likely to have a significant 

economic impact on a substantial 

number of small entities. Unless the 

head of an agency certifies that a 

proposed rule is not likely to have a 

significant economic impact on a 

substantial number of small entities, 

section 603 of the RFA requires that the 

agency present an initial regulatory 

flexibility analysis at the time of the 

publication of the notice of proposed 

rulemaking describing the impact of the 

rule on small entities and seeking public 

comment on such impact. 

For purposes of the RFA, the 

Department continues to consider a 

small entity to be an employee benefit 

plan with fewer than 100 participants.30

Further, while some large employers 

may have small plans, in general small 

employers maintain most small plans. 

Thus, the Department believes that 

assessing the impact of this proposed 

rule on small plans is an appropriate 

substitute for evaluating the effect on 

small entities. The definition of small 

entity considered appropriate for this 

purpose differs, however, from a 

definition of small business that is 

based on size standards promulgated by 

the Small Business Administration 

(SBA) (13 CFR 121.201) pursuant to the 

Small Business Act (15 U.S.C. 631 

et seq.). The Department therefore 

requests comments on the 

appropriateness of the size standard 

used in evaluating the impact of this 

proposed rule on small entities. 

The Department certifies, as required 

by the RFA, that while the proposed 

regulation would impact a substantial 

number of small entities, the economic 

impact of the proposed rule would not 

be significant. The Department 

estimates that the cost per plan to 

prepare the notice would be less than 

$20, because much of the required 

information is expected to be readily 

available from service providers. 

Moreover, the anticipated cost per 

participant for plans to send the 

qualified default investment alternative 

and participant-level fee TDF 

disclosures are estimated to be $0.20 

annually. 

Based on industry survey data, the 

Department believes that small plans 

would be less likely to be affected by 

this regulation, because while small 

plans are slightly more likely to be 

participant-directed, they are less likely 

to default participants into TDFs or 

provide access to such funds as an 

investment alternative. The survey 

showed that 56.3 percent of plans with 

5,000 or more participants have 

automatic enrollment compared to just 

15.8 percent of plans with 1–49 

participants, and that while 64 percent 

of participant-directed plans with more 

than 5,000 participants offer TDFs as an 

investment option, only 47.9 percent of 

such plans with 1–49 participants offer 

TDFs as an investment option.31 The 


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burden that would be imposed by the 

proposed regulation on small plans also 

would be mitigated by the fact that most 

of the information required for the TDF 

disclosures is expected to be readily 

available from service providers. 

Congressional Review Act 

The proposed rule is subject to the 

Congressional Review Act provisions of 

the Small Business Regulatory 

Enforcement Fairness Act of 1996 (5 

U.S.C. 801 et seq.) and, if finalized, will 

be transmitted to Congress and the 

Comptroller General for review. The 

proposed rule is not a ‘‘major rule’’ as 

that term is defined in 5 U.S.C. 804, 

because it is not likely to result in 

(1) An annual effect on the economy of 

$100 million or more; (2) a major 

increase in costs or prices for 

consumers, individual industries, or 

Federal, State, or local government 

agencies, or geographic regions; or 

(3) significant adverse effects on 

competition, employment, investment, 

productivity, innovation, or on the 

ability of United States-based 

enterprises to compete with foreignbased enterprises in domestic and 

export markets. 

Unfunded Mandates Reform Act 

For purposes of the Unfunded 

Mandates Reform Act of 1995 (Pub. L. 

104–4), as well as Executive Order 

12875, the proposed rule does not 

include any Federal mandate that may 

result in expenditures by State, local, or 

tribal governments in the aggregate of 

more than $100 million, adjusted for 

inflation, or increase expenditures by 

the private sector of more than $100 

million, adjusted for inflation. 

Federalism Statement 

Executive Order 13132 (August 4, 

1999) outlines fundamental principles 

of federalism, and requires the 

adherence to specific criteria by Federal 

agencies in the process of their 

formulation and implementation of 

policies that have substantial direct 

effects on the States, the relationship 

between the national government and 

States, or on the distribution of power 

and responsibilities among the various 

levels of government. The proposed 

regulation does not have federalism 

implications because it has no 

substantial direct effect on the States, on 

the relationship between the national 

government and the States, or on the 

distribution of power and 

responsibilities among the various 

levels of government. Section 514 of 

ERISA provides, with certain exceptions 

specifically enumerated, that the 

provisions of Titles I and IV of ERISA 

supersede any and all laws of the States 

as they relate to any employee benefit 

plan covered under ERISA. The 

requirements that would be 

implemented in the proposed rule do 

not alter the fundamental reporting and 

disclosure requirements of the statute 

with respect to employee benefit plans, 

and as such have no implications for the 

States or the relationship or distribution 

of power between the national 

government and the States. 

List of Subjects in 29 CFR Part 2550 

Employee benefit plans, Exemptions, 

Fiduciaries, Investments, Pensions, 

Prohibited transactions, Real estate, 

Securities, Surety bonds, Trusts and 

Trustees. 

For the reasons set forth in the 

preamble, the Department of Labor 

proposes to amend 29 CFR part 2550 as 

follows: 

PART 2550—RULES AND 

REGULATIONS FOR FIDUCIARY 

RESPONSIBILITY 

1. The authority citation for part 2550 

is revised to read as follows: 

Authority: 29 U.S.C. 1135 and Secretary 

of Labor’s Order No. 6–2009, 74 FR 21524 

(May 7, 2009). Sec. 2550.401c–1 also issued 

under 29 U.S.C. 1101. Sec. 2550.404a–1 also 

issued under sec. 657, Pub. L. 107–16, 115 

Stat. 38. Sections 2550.404c–1 and 

2550.404c–5 also issued under 29 U.S.C. 

1104. Sec. 2550.408b–1 also issued under 29 

U.S.C. 1108(b)(1) and sec. 102, 

Reorganization Plan No. 4 of 1978, 5 U.S.C. 

App. 1. Sec. 2550.408b–19 also issued under 

sec. 611, Pub. L. 109–280, 120 Stat. 780, 972, 

and sec. 102, Reorganization Plan No. 4 of 

1978, 5 U.S.C. App. 1. Sec. 2550.412–1 also 

issued under 29 U.S.C. 1112. 

2. Amend § 2550.404a–5 by revising 

paragraph (i)(4) to read as follows: 

§ 2550.404a–5 Fiduciary requirements for 

disclosure in participant-directed individual 

account plans. 

* * * * * 

(i) * * * 

(4) Target date or similar funds. In the 

case of a designated investment 

alternative that is described in 29 CFR 

2550.404c–5(e)(4)(1) (e.g., ‘‘life-cycle’’ or 

‘‘target date’’ funds) the plan 

administrator shall, in addition to the 

information required by paragraph (d)(1) 

and, if applicable, paragraph (i) of this 

section, furnish to each participant or 

beneficiary the following information as 

an appendix or appendices to the chart 

or similar document intended to satisfy 

paragraph (d)(2) of this section— 

(i) An explanation of the alternative’s 

asset allocation, how the asset allocation 

will change over time, and the point in 

time when the alternative will reach its 

most conservative asset allocation; 

including a chart, table, or other 

graphical representation that illustrates 

such change in asset allocation over 

time and that does not obscure or 

impede a participant’s or beneficiary’s 

understanding of the information 

explained pursuant to this paragraph 

(i)(4)(i); 

(ii) If the alternative is named, or 

otherwise described, with reference to a 

particular date (e.g., a target date), an 

explanation of the age group for whom 

the alternative is designed, the 

relevance of the date, and any 

assumptions about a participant’s or 

beneficiary’s contribution and 

withdrawal intentions on or after such 

date; and 

(iii) A statement that the participant 

or beneficiary may lose money by 

investing in the alternative, including 

losses near and following retirement, 

and that there is no guarantee that the 

alternative will provide adequate 

retirement income. 

* * * * * 

3. Amend § 2550.404c–5 by revising 

paragraphs (c)(4), (d)(3), (d)(4), and 

(d)(5) to read as follows: 

§ 2550.404c–5 Fiduciary relief for 

investments in qualified default investment 

alternatives. 

* * * * * 

(c) * * * 

(4) A fiduciary provides to a 

participant or beneficiary the material 

set forth in 29 CFR 2550.404a–5(d)(3) 

and (4) relating to a participant’s or 

beneficiary’s investment in a qualified 

default investment alternative; 

* * * * * 

(d) * * * 

(3) A description of the qualified 

default investment alternative, 

including: 

(i) The name of the investment’s 

issuer; 

(ii) The investment’s objectives or 

goals; 

(iii) The investment’s principal 

strategies (including a general 

description of the types of assets held by 

the investment) and principal risks; 

(iv) The investment’s historical 

performance data and a statement 

indicating that an investment’s past 

performance is not necessarily an 

indication of how the investment will 

perform in the future; and, if applicable, 

a description of any fixed return, 

annuity, guarantee, death benefit, or 

other ancillary features; 

(v) The investment’s attendant fees 

and expenses, including: 

(A) Any fees charged directly against 

the amount invested in connection with 

acquisition, sale, transfer of, or 


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withdrawal (e.g., commissions, sales 

loads, sales charges, deferred sales 

charges, redemption fees, surrender 

charges, exchange fees, account fees, 

and purchase fees); 

(B) Any annual operating expenses 

(e.g., expense ratio); and 

(C) Any ongoing expenses in addition 

to annual operating expenses (e.g., 

mortality and expense fees); and 

(vi) For an investment fund product 

or model portfolio intended to satisfy 

paragraph (e)(4)(i) of this section, and to 

the extent not already disclosed 

pursuant to this paragraph (d)(3): 

(A) An explanation of the asset 

allocation, how the asset allocation will 

change over time, and the point in time 

when the qualified default investment 

alternative will reach its most 

conservative asset allocation; including 

a chart, table, or other graphical 

representation that illustrates such 

change in asset allocation over time and 

that does not obscure or impede a 

participant’s or beneficiary’s 

understanding of the information 

explained pursuant to this paragraph 

(d)(3)(vi)(A); 

(B) If the qualified default investment 

alternative is named, or otherwise 

described, with reference to a particular 

date (e.g., a target date), an explanation 

of the age group for whom the 

investment is designed, the relevance of 

the date, and any assumptions about a 

participant’s or beneficiary’s 

contribution and withdrawal intentions 

on or after such date; and 

(C) If applicable, a statement that the 

participant or beneficiary may lose 

money by investing in the qualified 

default investment alternative, 

including losses near and following 

retirement, and that there is no 

guarantee that the investment will 

provide adequate retirement income. 

(4) A description of the right of the 

participants and beneficiaries on whose 

behalf assets are invested in a qualified 

default investment alternative to direct 

the investment of those assets to any 

other investment alternative under the 

plan and, if applicable, a statement that 

certain fees and limitations may apply 

in connection with such transfer; and 

(5) An explanation of where the 

participants and beneficiaries can obtain 

additional investment information 

concerning the qualified default 

investment alternative and the other 

investment alternatives available under 

the plan. 

* * * * * 

Signed at Washington, DC, this 16th day of 

November, 2010. 

Phyllis C. Borzi 

Assistant Secretary, Employee Benefits 

Security Administration, Department of 

Labor. 

[FR Doc. 2010–29509 Filed 11–29–10; 8:45 am] 

BILLING CODE 4510–29–P 

DEPARTMENT OF LABOR 

Mine Safety and Health Administration 

30 CFR Parts 70, 71, 72, 75, and 90 

RIN 1219–AB64 

Lowering Miners’ Exposure to 

Respirable Coal Mine Dust, Including 

Continuous Personal Dust Monitors 

AGENCY: Mine Safety and Health 

Administration, Labor. 

ACTION: Proposed rule; rescheduling of 

public hearings; correction. 

SUMMARY: The Mine Safety and Health 

Administration (MSHA) is rescheduling 

the dates of two public hearings and 

announcing the date and location of an 

additional public hearing on the 

proposed rule addressing Lowering 

Miners’ Exposure to Respirable Coal 

Mine Dust, Including Continuous 

Personal Dust Monitors. This notice also 

corrects one error in the preamble to the 

proposed rule. On November 15, 2010, 

MSHA published the dates and 

locations of six public hearings to be 

held on the proposed rule. 

MSHA published the proposed rule 

on October 19, 2010; it is available on 

MSHA’s Web site at http:// 

www.msha.gov/REGS/FEDREG/ 

PROPOSED/2010PROP/2010-25249.pdf. 

The proposed rule would revise the 

Agency’s existing standards on miners’ 

occupational exposure to respirable coal 

mine dust and lower miners’ exposure 

to respirable coal mine dust. 

DATES: The public hearing dates and 

locations are listed in the 

SUPPLEMENTARY INFORMATION section of 

this document. 

Post-hearing comments must be 

received by midnight Eastern Standard 

Saving Time on February 28, 2011. 

ADDRESSES: Comments must be 

identified with ‘‘RIN 1219–AB64’’ and 

may be sent by any of the following 

methods: 

(1) Federal e-Rulemaking Portal: 

http://www.regulations.gov. Follow the 

instructions for submitting comments. 

(2) Electronic mail: zzMSHAcomments@dol.gov. Include ‘‘RIN 1219– 

AB64’’ in the subject line of the message. 

(3) Facsimile: 202–693–9441. Include 

‘‘RIN 1219–AB64’’ in the subject line of 

the message. 

(4) Regular Mail: MSHA, Office of 

Standards, Regulations, and Variances, 

1100 Wilson Boulevard, Room 2350, 

Arlington, Virginia 22209–3939. 

(5) Hand Delivery or Courier: MSHA, 

Office of Standards, Regulations, and 

Variances, 1100 Wilson Boulevard, 

Room 2350, Arlington, Virginia. Sign in 

at the receptionist’s desk on the 21st 

floor. 

MSHA will post all comments on the 

Internet without change, including any 

personal information provided. 

Comments can be accessed 

electronically at http://www.msha.gov 

under the ‘‘Rules & Regs’’ link. 

Comments may also be reviewed in 

person at the Office of Standards, 

Regulations, and Variances, 1100 

Wilson Boulevard, Room 2350, 

Arlington, Virginia. Sign in at the 

receptionist’s desk on the 21st floor. 

MSHA maintains a list that enables 

subscribers to receive e-mail notification 

when the Agency publishes rulemaking 

documents in the Federal Register. To 

subscribe, go to http://www.msha.gov/ 

subscriptions/subscribe.aspx. 

FOR FURTHER INFORMATION CONTACT: 

Patricia W. Silvey, Director, Office of 

Standards, Regulations, and Variances, 

MSHA, at Silvey.Patricia@dol.gov 

(E-mail), 202–693–9440 (Voice), or 202– 

693–9441 (Fax). 

SUPPLEMENTARY INFORMATION: 

I. Public Hearings 

On November 15, 2010, MSHA 

announced that it would hold six public 

hearings on the proposed rule (75 FR 

69617). Due to a scheduling conflict and 

in response to requests from the public, 

to provide maximum opportunity for 

public participation in this rulemaking, 

MSHA is rescheduling two public 

hearings and adding an additional 

public hearing. The dates of public 

hearings that were scheduled in 

Washington, PA, and Arlington, VA, are 

changed to February 8, 2011, and 

February 15, 2011, respectively. The 

locations of these two hearings remain 

the same. MSHA will hold an additional 

public hearing on February 10, 2011, in 

Prestonsburg, Kentucky. 

MSHA will accept post-hearing 

written comments and other appropriate 

information for the record from any 

interested party, including those not 

presenting oral statements. Comments 

must be received by midnight Eastern 

Standard Saving Time on February 28, 

2011. For the convenience of interested 

parties, the chart below includes the 

dates and locations of all seven public 

hearings: 


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