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July 21, 2015

Filed Electronically at www.regulations.gov

Office of Regulations and Interpretations Office of Exemption Determinations

Employee Benefits Security Employee Benefits Security

 Administration Administration

Attn: Conflict of Interest Rule Attn: D-11712

U.S. Department of Labor U.S. Department of Labor

200 Constitution Avenue, NW 200 Constitution Avenue, NW

Room N-5655 Suite 400

Washington, DC 20210 Washington DC 20210

Re: Definition of the Term “Fiduciary”; Conflict of Interest Rule – Retirement 

Investment Advice (RIN 1210-AB32)

Proposed Best Interest Contract Exemption (ZRIN 1210-ZA25)

Dear Sir or Madam:

The Business Roundtable is an association of chief executive officers of leading U.S. 

companies. Together, our member companies employ nearly 16 million 

individuals and provide retirement, healthcare and other employee benefit 

coverage to over 40 million American employees, retirees and their families. 

Business Roundtable is committed to providing quality retirement plans to our 

employees. I am writing on behalf of the Business Roundtable in response to the 

Employee Benefits Security Administration’s (EBSA) April 14, 2015 proposed 

regulation, “Definition of the Term ‘Fiduciary’; Conflict of Interest Rule—

Retirement Investment Advice,” which would reinterpret the long-standing 

definition of “fiduciary” under the Employee Retirement Income Security Act of 

1974 (ERISA). 

OVERVIEW

Financial professionals should be required to act in the best interests of employee 

benefit plan participants when providing investment advice to a retirement plan 

or its participants. While we appreciate the EBSA addressing this issue, we urge 

the EBSA to reconsider some elements of its proposed definition of fiduciary and 

the related proposed prohibited transaction exemptions. 

Randall Stephenson

AT&T Inc.

Chairman

Ursula M. Burns

Xerox Corporation

Vice Chair

David M. Cote

Honeywell 

Vice Chair

Andrew N. Liveris

The Dow Chemical Company

Vice Chair

John Engler

President

Jessica Boulanger

Senior Vice President

Marian Hopkins

Senior Vice President

William C. Miller, Jr.

Senior Vice President

LeAnne Redick Wilson

Senior Vice President
July 21, 2015

Page 2

As currently formulated, the proposed definitional changes are broad and subjective, and the 

proposed carve-outs and exemptions are narrow and complex. 

If finalized without changes, the proposed regulations could have negative consequences for 

employee benefit plans and their participants. For example, the proposed regulations’ new 

investment advice fiduciary standard would apply to activities, interactions and relationships 

that should not be considered “investment advice” under ERISA. Important investment 

education that is currently being provided to retirement plan participants would be directly and 

unnecessarily limited by the proposal, and the overall impact of the complex new regime will 

have a chilling effect on the willingness of retirement plan sponsors to allow the delivery of 

investment education and investment advice necessary for plan participants. In addition, the 

proposed requirements and prohibited transaction exemptions have the potential to sweep 

plan sponsors and their employees into unwarranted litigation alleging fiduciary or co-fiduciary 

liability under ERISA.

KEY CONCERNS AND RECOMMENDATIONS

Some key concerns of Business Roundtable member companies are highlighted below, focusing 

primarily on employee benefit plan issues. 

Effect on Critical Investment Education: Narrowing the definition of permitted investment 

education and increasing the uncertainty around the types of communications that would be 

considered investment advice could have a chilling effect on critical investment education 

currently provided to plan participants. Clarification regarding the line between investment 

education and investment advice is needed so plan sponsors know which activities are 

permitted and which are not. Leaving this line undefined could cause plan sponsors to be 

overly conservative in their offerings, leading to plan participants’ decreased access to 

investment education. 

We recommend the following changes:

 Defining investment education so that it would not limit education to general 

discussions of investment theory without any plan-specific context. 

 The proposed definition of investment advice should be clarified to ensure routine 

interactions or suggestions not involving investment advice do not create a fiduciary 

relationship. We recommend modifying the proposed rule to make clear that 

“suggestions” provided “for consideration” are not considered investment advice under 

ERISA; rather, an investment advice recommendation involves a call to action or 

advocacy for a particular approach.
July 21, 2015

Page 3

Unworkable Rules on Provision of Investment Advice: The requirements of the Best Interest 

Contract (BIC) and other proposed prohibited transaction exemptions are complex and could 

burden a retirement plan seeking to provide participants with access to investment advice. 

The volume of required disclosure by financial institutions wishing to utilize the BIC exemption 

is unprecedented; even small errors could result in prohibited transactions and potential 

litigation. 

For investment advice provided to ERISA plans maintained by employers, many of the 

conditions and limitations of the BIC exemption are particularly concerning. For example, the 

exemption’s requirement of a detailed written contract is unworkable in the context of 

communications and advice provided to plan participants. Moreover, the proposed 

requirements would create state law causes of action that could draw plan sponsors into 

unwarranted litigation as co-fiduciaries as a result of small errors by an investment advice 

provider hired by the plan sponsor. This result was not anticipated under ERISA, where 

Congress expressly determined those acts that would be subject to private rights of action and 

available remedies. For the above reasons, we recommend a separate prohibited transaction 

exemption for investment advice with respect to ERISA plans. Similar to other proposed 

exemptions, the new exemption would ensure that investment advice provided to plan 

participants by investment advice fiduciaries is prudent and in the advice recipient’s best 

interest. However, the contractual requirements of the proposed BIC and other exemptions 

(including private rights of action) would not be incorporated. Any additional disclosure 

beyond that already required under EBSA regulations should be minimal. 

Protecting Plan Sponsor Employees: The proposed regulations provide a helpful carve-out 

from fiduciary status for plan sponsor employees who provide investment advice to plan 

fiduciaries, as long as they receive no compensation for the advice beyond their normal 

compensation as employees. However, the exception is inadequate to protect all plan sponsor 

employees who are merely communicating with or otherwise assisting plan participants. In 

order to protect those employees from potential fiduciary liability, we suggest that the existing 

carve-out be broadened to make it clear that plan sponsor employees (other than those acting 

as plan fiduciaries) would not be deemed to be providing investment advice “for a fee or other 

compensation,” as long as they receive no compensation for the advice beyond their normal 

compensation as employees. 

Application to Health Savings Accounts (HSAs): The proposed regulations’ application to HSAs 

was not taken into account in the Regulatory Impact Analysis. HSAs are different from 

individual retirement accounts (IRAs), with different goals, different parties and different 

relationships. The revised investment advice fiduciary standards (which were crafted for 

retirement plans) should not be applied to HSAs. At a minimum, changes in the rules governing 

HSAs should be delayed and addressed in a separate notice and comment regulation.
July 21, 2015

Page 4

Application to Welfare Benefit Plans: In the case of an ERISA welfare benefit plan, it appears 

that employer-provided health, long-term care, life and disability insurance contracts may, in 

certain cases, be covered by the broadened definition of investment advice. We understand 

that their inclusion may have been unintentional, as it is not discussed in the preamble to the 

proposed regulations or addressed in the Regulatory Impact Analysis. To eliminate any 

ambiguity, we recommend that the proposed regulations make it clear that discussions with 

and recommendations to a plan sponsor or plan participant regarding the establishment of, 

maintenance, or participation in a welfare benefit plan (including discussions regarding 

insurance contracts supporting the plan) are not investment advice under ERISA, unless the 

advice relates to a specific asset investment.

Scope of the Seller’s Carve-Out: The proposed regulations provide a carve-out for incidental 

advice provided in connection with an arms-length transaction between a person and a “large 

plan fiduciary” with investment expertise. This carve-out is critical for plan sponsors and should 

be retained. However, we recommend streamlining the carve-out to eliminate unnecessary 

paperwork (e.g. to remove requirements for written representations by the plan fiduciary). In 

addition, we recommend extending the seller’s carve-out to all plan fiduciaries and individuals 

who have the expertise to assess the quality of investment advice they are provided and the 

potential fees involved. This expansion should include communications with most plan 

fiduciaries currently excluded from the seller’s carve-out because of their plan size and 

individuals with sufficient income and/or net worth, (as is the case under the Security and 

Exchange Commission’s Accredited Investor rules). 

Broad and complex regulatory reinterpretations, like EBSA’s proposed investment advice fiduciary 

redefinition, have the potential to cause great disruption in existing relationships and practices, 

particularly when they involve changes to a long-standing definition. While change may be 

appropriate, changes of this magnitude warrant a robust discussion among stakeholders and time 

for affected plans and advisors to draft new agreements and institute compliance procedures.

We applaud the EBSA’s efforts to protect the interests of employee benefit plan participants. 

On behalf of the Business Roundtable, I thank you for the opportunity to comment on these 

important issues and thank you for your consideration. If you would like to further discuss our 

recommendations, please do not hesitate to contact Maria Ghazal at 202-496-3268.

Sincerely, 

Gary Loveman 

Chairman 

Caesars Entertainment Corporation

Chair, Health and Retirement Committee

Business Roundtable