T. ROWE PRICE ASSOCIATES, INC. www.troweprice.com

MARGARET H. RAYMOND 4515 Painters Mill Road

Vice President Owings Mills, Maryland

Managing Counsel 21117-4903

Phone 410-345-5724

Fax 410-345-5575

July 21, 2015 (Corrected July 23, 2015) margaret_raymond@troweprice.com

By Federal eRulemaking Portal

Office ofRegulations and Interpretations

Office of Exemption Determinations

Employee Benefits Security Administration

U.S. Department of Labor

200 Constitution Avenue, NW

Washington DC 20210

Attention: Conflict ofInterest Rule

Re: Definition ofthe Term "Fiduciary"; Conflict ofInterest Rule - Retirement Investment

Advice

RIN 1210-AB32

Proposed Best Interest Contract Exemption

ZRIN 1210-ZA25, Docket No. 2014-0016

Proposed Amendments to Class Exemptions 75-1, 77-4, 80-83 and 83-1

ZRIN 1210-ZA25, Docket No. 2014-0016

Dear Sir or Madam:

This letter responds on behalf ofT. Rowe Price Associates, Inc. ("TRPA") and its affiliates

T. Rowe Price Investment Services, Inc. and T. Rowe Price Retirement Plan Services, Inc.

(collectively, "T. Rowe Price") to the Department's Notice of Proposed Rulemaking related to

the definition ofthe term fiduciary in the context ofinvestment advice (the "Proposal") and

related exemptions. The Proposal establishes the criteria by which conduct will be deemed to

constitute investment advice for purposes of determining fiduciary status under ERISA

§ 3(21)(A)(ii). The new proposed Best Interest Contract Exemption ("BICE") and other

exemptions for which amendments are proposed establish circumstances under which those who

are deemed to be providing investment advice for a fee can avoid violations and tax penalties for

transactions othenvise prohibited by ERISA § 406 or Internal Revenue Code § 4975. We

appreciate the opportunity to provide comments.

T. Rowe Price Background

TRPA serves as investment adviser to the T. Rowe Price family ofmutual funds ("Price Mutual

Funds") and collective trusts maintained by its affiliate, T. Rowe Price Trust Company. Price

Mutual Funds, which are distributed by T. Rowe Price Investment Services, Inc. ("TRPIS"), a

registered broker-dealer, are known for consistent investment process and strong investment

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performance atmoderate cost.^ Through mutual funds and commingled trusts, as well as its subadvisory and separate account management services, T. Rowe Price serves institutions—

including both large and small business retirement plans—and individuals. T. Rowe Price assets

under management ("AUM") total almost $747 billion as of December 31, 2014, ofwhich some

40% are held in ERISA governed retirement plans and an additional 28% in other retirementrelated accounts, including IRAs.

Price Mutual Funds and collective trusts managed by T. Rowe Price are made available to the

investing public in three ways:

• Institutional investors (and the individual accounts underlying them) can obtain Pricemanaged funds and trusts through unaffiliatedfinancial intermediaries, including

recordkeepers, registered investment advisers and broker-dealers.

• Individual investors can purchase Price Mutual Funds directly in T. Rowe Price taxable

accounts, individual retirement accounts and certain small business retirement plans

(such as non-ERISA governed individual 401(k) plans, SEPs and SIMPLEs). Today, T.

Rowe services over 1.4 million retail direct individuals, a substantial majority ofwhom

maintain retirement-based accounts with us as retail investors.

Finally, plan participants may obtain Price Mutual Funds and commingled trusts, as well

as other non-proprietary investment options, through employer-sponsored retirement

plans for which T. Rowe Price Retirement Plan Services, Inc. ("TRP RPS") provides

recordkeeping and administrative services. TRP RPS provides services to more than

3,400 plans with 1.8 million participants as of December 31, 2014. TRP RPS supports a

large number of non-proprietary options for its plan clients, but a solid majority of assets

are held in Price Mutual Funds or other Price-managed assets.

As the third-largest provider oftarget date funds,^ we are particularly proud ofthe role that our

target date suite ofinvestment products has played in helping retirement savers achieve

appropriate diversification atreasonable cost.^ In fact, target date funds and other asset

allocation investmentshave been one ofthe great success stories; a collaboration between plan

sponsors, investment managers, and the government"^ to bring modem portfolio theory to

participants and other retirement investors in an easy-to-understand package.

' As ofJune 30, 2015, over 85% ofPrice Mutual Funds outperformed their 10-year Lipper average, and over 75% of

all share classes ofPrice Mutual Funds (excluding funds used in insurance products) outperformed their Lipper

average for the 1-, 3-, 5- and 10-year periods on a cumulative total return basis. As ofJune 30, 2015 over 90% of

the Price Mutual Funds for individual investors have expense ratios below their Lipper category median.

^Momingstar, Inc. ("Momingstar") 12/31/2014. As ofDecember 31, 2014, T. Rowe Price target date funds and

trusts held assets of approximately $149 billion.

^Price-managed target date mutual funds have experienced solid investment performance while maintaining

reasonable fees. As of June 30, 2015, 100% of T. Rowe Price Retirement Date Funds had outperformed their

comparable Lipper average on a 3-, 5- and 10-yearcumulative total return basis, and 94% had outperformed on a 1-

year total return basis. According to Momingstar, T. Rowe Price target date mutual funds are ranked in the second

quartileof expenses compared to otherfunds in their category(where lowestquartile is cheapest).

See 29 C.F.R. § 2550.404c-5.

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Wecount among our clientsretirement plans of all sizes, from someof the largest in America to

small business retirement plans with only a handful ofindividuals. We believe that retirement

plan clientsserviced by T. Rowe Pricehave found benefit in T. Rowe Price's quality investment

management, promotion of effective plan design, and dedication to assisting individual

retirement savers.

Central to the valuewe providefor retirement investors is savings and investment guidance

designed to drive better outcomes. Through the years, we have focused onmaking retirement

saving easier by providing investor education about savings goals, likely retirement income

needs, andinvestment principles. One example of this work is ourRetire with Confidence®

program for participants in plansrecordkept by TRP RPS. Through a participant engagement

model that includes employee meetings, targeted mailings and one-on-one consultations, we

provide information appropriate to the retirement saver's life stage—from savings goals and

asset allocation principles for beginning savers to approaches to retirement income for those

beginningto draw down benefits. All discussions, including one-on-one consultations,are

conducted by salaried (non-commissioned) associates. Another example of helpful guidance is

an on-linetool on our public website that helps investors with their choices in drawing Social

Security benefits at retirement. T. Rowe Price focuses on this type of help because this is what

retirement savers want and need.^

Overview of T. Rowe Price Perspective on Fiduciary Advice Proposal

We appreciate the importance of positioning retirement saversforsuccess in meeting the

responsibility that our private retirement savings system imposes on them. Our country's

retirement system depends in large parton a solid foundation of employer-sponsored plans and

private savings, and we share the Department'sdedication to making sure thatretirement savers,

as well asretirement plan fiduciaries, have access to quality investment guidance andadvice.

The standard the Department seeks to promote—one which requires putting clients' interests

first—is entirely consistent with T. Rowe Price's longstanding core values; we believe it is both

right forretirement savers andfundamental to T. Rowe Price's mission in assisting them.

While we agree with theDepartment's basic philosophy, we are concerned about many aspects

ofthe Proposal and accompanyingproposed exemptions. At the outset, we share concerns of

other commentators about the basis for theProposal and the procedure implemented invetting it.

We aretroubled both by substantial shortcomings in the economic analysis thatpurports to

justify thisradical expansion of fiduciary status and the Proposal'sfailure to accountfor the

^See, e.g., Participant Attitude Toward Investing Databank 2015, Cerulli Associates, in which 26% ofsurveyed

retirement plan participants reported making their own investment decisions but seeking reassurance that they were

ontheright path, andanother 18% viewing themselves as making their own decisions although notqualified to do

so. See also Employee Benefit Research Institute and Matthew Greenwald & Associates 2002-2015 Retirement

Confidence Surveys, which report that as of2015, over 64% ofthe surveyed population reported themselves as

either a little or a lotbehind schedule in planning and saving for retirement, and that 27% reported themselves as

unsure of how much they need to save.

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resulting disruption toservices upon which retirement savers and plan fiduciaries rely.^ We

share concerns of others about the Department's failure to appreciate the significant extent to

which legal and regulatory frameworks outside of ERISA already constrain the conduct of

financial services firms inthis area today/ We agree that the Proposal will have practical

impacts on accounts outside the Department's jurisdiction, an outcome that was not factored into

the Proposal's economic impact analysis/ Finally, we concur with those who doubt that all of

the unintended consequences ofsuch a momentous proposed change will be identified during the

relatively modest public comment period/

We focus our comments here, however, on our substantive concerns:

• The proposed definition offiduciary advice fails to distinguish fairly between

circumstances in which individuals and fiduciaries have a reasonable expectation of

fiduciary service and those interactions where there can be no such reasonable

expectation.

• By casting too wide a net, the Proposal threatens to eliminate or reduce information and

perspectives from firms like T. Rowe Price that are helpful to participants, IRA holders

and plan fiduciaries, and may require individuals and small plan fiduciaries to spend

more (or more out of pocket) to obtain needed help.

• With its overly broad cut at what constitutes investment advice, the Proposal seems to

require firms like T. Rowe Price that offer primarily proprietary investment products to

forego explaining to retirement investors how T. Rowe Price products and services may

meet their needs.

If implemented, the Proposal would confer fiduciary status on firms like T. Rowe Price in many

circumstances that do not create expectations of undivided loyalty, are permissible today

without complex conditions, and are helpful to retirement investors, such as:

• Encouraging a participant to participate in an employer-sponsored plan, or discouraging a

participant from taking a loan;

• Helping an IRA holder understand which target date fund is designed for someone of

his/her age;

^See Written Testimony ofBrian Reid, ICl ChiefEconomist, United States House ofRepresentatives, Committee

on Education and the Workforce, Subcommittee on Health, Employment, Labor and Pensions, June 17, 2015,

available at https://www.ici.org/govaffairs/testimonv/15 house advice.pdf.

' SeeComment Letterof the U.S.Chamber of Commerce. We concurwith the Chamber's viewthat this area is best

addressed by traditional regulators of investment products and services, such as the U.S. Securities and Exchange

Commission ("SEC"), whose jurisdiction is not limited to the subset ofthose limited account types the Department

regulates.

®Ibid.

^Ibid.

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• Providing daily account values to a participant initiating a plan loan;

• Providing a web-based screening tool that allows an IRA investor to sort available funds

by Momingstar "star" ratings.

• Mailing or e-mailing a brochure about a specific Price Mutual Fund to an IRA holder

whose investments are concentrated in money market funds;

• Suggesting to an adviser working with a small participant-directed plan that the plan

consider a T. Rowe Price target date fund; and

• Including a sample fund-lineup in a recordkeeping Request for Proposal ("RFP")

response.

In so doing, the Proposal risks depriving retirement investors ofthese and similar services, or

making them more expensive.

The challenges presented by an overly broad fiduciary definition cannot be remedied through

prohibited transaction exemptions. To be sure, conflicts of interest present prohibited transaction

concerns, but they also pose a challenge in meeting basic ERISA § 404 duties, especially the

duty to act for the exclusive benefit of participants and beneficiaries. Intentional fiduciaries can

address this through careful delineation of duties. Unintentional fiduciaries—such as those

created by the Proposal—or sellers cannot. Exemptions alone, no matter how well-crafted,

cannot solve this basic tension.

Even ifthe Proposal were to draw the line between fiduciary and non-fiduciary conduct

appropriately, the proposed exemption is not workable. The BICE's requirement of a pre-advice

contract, its voluminous fee reporting and disclosure requirements, and its overwhelming data

creation and retention requirements, not to mention the substantial risk of unwarranted litigation,

all threaten the usefulness ofthe exemption. Further, the BICE's suggestion that the Department

might craft a product-specific dispensation from these onerous requirements (the "high quality

low cost" exemption) is both premature and troubling in its assumption that a durable, universal

definition ofinvestment quality can or should be determined by a federal agency.

Ifthe Departmentcontinues to believe that there are abuses that cannot be addressedby existing

legal and regulatory constraints, we propose instead the following steps:

Redraw the basic definition of advice to reflect reasonable expectations offiduciary

status.

• Remove provisions that constrain conduct that has no identifiable harm, or as to which

other protections are available.

• Expand or revise carve-outs to avoid unintended consequences.

• Substitute a streamlined "best interest exemption" for the overly complicated BICE.

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Our specific comments and suggestions for modification follow.

Part 1. Fiduciary Advice Proposal

A. The basic definition of advice—recommendations to buy, sell or hold

The functional definition of a fiduciary should be crafted with recognition of the important duties

imposed on ERISA fiduciaries—most importantly the requirement to act with "an eye single" to

the interests ofthe participants and beneficiaries ofthe plan.'^ Where circumstances, viewed

objectively, create expectations that the person providing an investment recommendation will act

in accordance with that high standard, it is appropriate to include those circumstances in the

functions that will give rise to ERISA fiduciary status. Unfortunately, the Proposal goes too far

and encompasses circumstances where there is no reasonable expectation offiduciary trust and

confidence."

The Proposal defines as investment advice any investment recommendation as to which the

putative advice provider acknowledges fiduciary status in connection with the recommendation

or as to which there is an agreement or understanding that the recommendation is individualized

or specifically directed to the recipient for consideration in making investment decisions. There

is no question that a recommendation as to which the provider acknowledges fiduciary status

creates the kind of expectation offiduciary-level trust and confidence that warrants creation of an

ERISA fiduciary relationship.

We do not agree, however, that any investment recommendation (defined by the Proposal as a

suggestion) that is understood, perhaps unilaterally, to be individualized or specifically directed

to a participant, IRA holder or plan fiduciary creates a similar expectation offiduciary trust and

confidence. An investment suggestion for consideration, even if individualized, may be helpful,

butisfar from a prescription ofa particular investment course of conduct.'^ The "specifically

directed" recommendation concept is so broad as to bring into the fiduciary definition something

as innocuous as the practice of mailing or emailing standard investment sales literature to an

individual. Further, the failure to require mutuality of understanding means that someone with

an objectively unreasonable unilateral "understanding" can confer fiduciary status on the

provider ofthe investment suggestion. Finally, the fact that the understanding is connected to

whether the suggestion is individualized or specifically directed is misguided—the question is

not whether the information is individualized, but rather whether there is a meeting ofthe minds

See Pegram v. Herdrich, 530 U.S. 211,235 (2000) (quoting Donovan v. Bierwirlh, 680 F.2d263, 271 (2d Cir.

1982)).

'' The Department acknowledges that its basic definition istoo broad, 80 Fed. Reg. 21,929 (April 20, 2015).

Secretary Perez defended the Fiduciary Advice Proposal during a congressional hearing by stating that investment

advisers should be held to the same standards as doctors. See Testimony ofThomas E. Perez, Secretary U.S.

Department of Labor, United States House ofRepresentatives, Committee on Education and the Workforce,

Subcommittee on Health, Employment, Labor and Pensions, June 17, 2015, available at,

httD://www.dol.gov/ sec/media/congress/20150617 Perez.htm. But a "suggestion" - even if individualized - is a far

cry from the courses oftreatment or prescribed medications that flow from a doctor-patient relationship.

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or other objectively reasonable expectation that the information is entitled to a fiduciary level of

reliance.

Establishing the correct baseline definition offiduciary advice is important. An overly broad

definition risks chilling or eliminating information that is needed by retirement savers in order to

maintain a successful private retirement system. For example, if a suggestion to take a

distribution, without more, is investment advice, then a suggestion to participate in a plan would

similarly be considered investment advice. This ramification ofthe overly broad definition is

particularly troubling. T. Rowe Price often suggests that individuals with access to a plan

participate and contribute at least to the level of any employer matching contributions. The fact

that such a suggestion is presented in a one-on-one conversation does not create a reasonable

expectation of a fiduciary relationship. Ifit were a fiduciary interaction, we might have to steer

clear ofsuch suggestions if we had not conducted a fiduciary-level analysis ofthe relative merits

ofthe specific plan investments offered in comparison to the broad range ofinvestments

available in IRAs from T. Rowe Price or others. Such a constraint is particularly inappropriate

for non-fiduciary recordkeepers like TRP RPS, as plan sponsors frequently include enrollment

communications as part ofthe basic participant communication services expected of a

recordkeeper, and yet such a service may be promoted through this Proposal to fiduciary

investment advice.'^

We also take issue with incorporating wholesale into the definition of ERISA investment advice

principles developed by theFinancial Industry Regulatory Authority ("FINRA").^"^ FlNRA's

threshold for a "recommendation" was intended to delineate those sales practices requiring

governance and supervision, not fiduciary services.'^ But selling does not create an objectively

reasonable expectation offiduciary-level trust and confidence. Salesmanship is a cultural norm

understood by individuals as well as plan fiduciaries, no matter their level offinancial literacy or

investment sophistication. Few in America would expect to enter a Chevrolet dealership and

hear about anything other than Chevrolets. Those who sell products, especially firms who sell

proprietary products and services, should not be held to a fiduciary standard that might require

them to either remain mum orsell a competitor's product.'^

We recognize that the Department included a carve-out for certain counterparties, intending to

legitimize a subset ofsales activities. The carve-out is inadequate. First, it does not cover

Recordkeepers like TRP RPS often enter into contracts that are careftilly drawn (and priced) to exclude fiduciary

activities. If the Proposal were to become final, TRP RPS would need time to renegotiate its contracts to either reprice in light of expanded duties or eliminate services newly elevated to fiduciary status. The time proposed for the

effective date and applicability date would not give sufficient time to conclude that negotiation.

''' Certainly FINRA as anorganization should notbe charged with ongoing responsibility fordefining what

constitutes ERISA fiduciary advice, as FlNRA's goals are different and it has no particular expertise in

understanding retirement principles or tax penalties under the prohibited transaction regime.

Even though we do not believe FINRA principles should inform the definition of "recommendation" (a term used

in the longstanding guidance, but not previously defined), FINRA precedent as to what is NOT considered a

recommendation should establish what cannot reasonably be viewed as fiduciary-level advice.

Ifthe final rule continues to define fiduciary advice so as to cover sales activity, then the Department will need to

include formal guidance interpreting ERlSA's principles of undivided loyalty in a manner that does not impede

standard sales activities (including those limited to proprietary investments).

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individuals or plans with less than 100 participants, no matter how sophisticated. The decision to

treat small plan fiduciaries differently than other plan fiduciaries is especially puzzling, given the

duties of prudence and loyalty imposed on all plan fiduciaries equally, regardless ofsize. This

imposes additional burdens and costs on small plan fiduciaries that large plan fiduciaries are not

required to absorb. Such a result seems counterproductive to the Department's goal of

promoting retirement savings. Nor does the carve-out acknowledge the increasingly common

business practice for plans ofretaining professionals to assist with investment selection and

monitoring, including firms that accept express ERISA fiduciary responsibility (and sometimes

ERISA § 3(38) investment discretion). Second, the conditions imposed by the counterparty

carve-out (such as the requirement of an affirmative acknowledgment from plans with less than

$100 million in assets, but more than 100 participants) are unnecessary burdens on commercial

activity that simply is not a fiduciary interaction.'^

The overbreadth ofthe proposed rule and the inadequacy ofthe carve-outs would constrain

current standard, non-abusive sales practices, and other common interactions that do not create

an expectation offiduciary-level interaction. Two examples illustrate the concern:

• Fund Line-ups. In its capacity as recordkeeper, TRP RPS frequently provides responses

to RFPs that contain sample plan line-ups. These sample line-ups can be important to the

pricing ofrecordkeeping services, as plan fiduciaries seek to estimate the specific indirect

compensation that may be generated by certain investments. Sample line-ups provide

important ideas and comparators that the fiduciary will use in arriving at their ultimate

decision, and are often required asa condition ofa response toanRFP.'® Treating such

an interaction in the context of a sales presentation (or even in the context of a discussion

offund substitution ideas) as fiduciary-level advice does not comport with industry

expectations. Were such interactions to be deemed advice, service providers might

hesitate to provide line-ups, making the process of understanding recordkeeping pricing

even more cumbersome.

• Ad-Hoc Investment Idea Exchange. Plan fiduciaries often turn to trusted advisers for

additional insight into markets or investment approaches not covered by the manager's

current investment mandate. For example, plan fiduciaries seek input from TRPA

concerning our views on what sub-asset classes might be appropriate for a new fixed

income mandate for their plan, or the types of investmentswe might use to implementa

particular investment objective. These conversations do not relate to a proposed

engagement of TRPA (and thus do not appear to be covered by the counterparty carveout), but serve a useful purpose for plan fiduciaries seeking new ideas or perspectives for

17 Particularly troubling is the carve-out requirement that "medium" plan fiduciaries acknowledge that they cannot

rely uponthe advice providerto act in the best interests of the plan. Such,an acknowledgement wouldbe inapposite

for T. Rowe Price clients under our view of "best interest." See Part 2, infra.

RFP responses are often required to be electronic, so the notion of an acknowledgment in advance is particularly

difficult. Further, RFPs are sometimes done on a "blind" basis, in which case it would be impossible to obtain the

acknowledgement or make the evaluation of sophistication that is suggested.

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their plan investment program. Adopting a more practical definition offiduciary

investment advice would allow these types of useful conversations to continue.

B. The basic definition of advice—distributions

For the first time, the Proposal changes the Department's longstandingposition with respect to

distribution activity by including in the definition a "recommendation to take a distribution of

benefits or a recommendation as to the investment ofsecurities or other property to be rolled

over or otherwise distributed..Such an expansive rule will have a chilling effect on useful

suggestions related to distributions (discouraging loans, encouraging minimum required

distributions, suggesting consolidation into a current plan) that today are provided without

specific fiduciary-level inquiry. The Department should recognize the essential difference

between recommendations as to the form ofretirement savings (including the suggestion of a

taxable account as opposed to a tax deferred account) on the one hand, and the investment ofthe

savings on the other hand. Only where the recommendation as to the form of account is paired

specificallywith a recommendationas to the specific investmentofthe account or its proceeds

should the interaction fall into the ambit of potential fiduciary investment advice.

C. The basic definition of advice —^valuations

The Proposal includes as advice "appraisals, fairness opinions or similar statements.. .concerning

the value ofsecurities or other property.. .if provided in connection with a specific [investment]

transaction..." By its terms, the proposal appears to cover ordinary daily valuations provided by

recordkeepers and custodians, because these valuations are used every day for specific

transactions, such as minimum required distributions or plan loans. The Proposal does not

distinguish between the entities that create the valuations and those who receive and use

valuations (such as recordkeepers and custodians), nor does it exclude values provided through

specific mechanisms governed by other legal or regulatory regimes, such as mutual fund or

common trust net asset values. The proposed carve-out is inadequate to rectify the overly

inclusive definition; in the case of a daily value recordkeeping system or daily valued mutual

funds held in IRAs, values are provided and can be used for specific transactions daily, far in

excess of any legal requirements for reporting or disclosure.

It is difficult to understand the particular valuation abuse that the Department seeks to curb here

(inasmuch as ESOPs, the prior area ofDepartment concern, were excluded). No aspect ofthe

Department ofLabor's discussion quantifies the harm from non-ESOP valuations. This

provision should be removed.

The Department's discussion of abuses appears to center on non-publicly traded securities. At a minimum, the

Department should clarify that the valuation provisions do not apply to reporting of values for publicly traded

securities, and do not apply to recordkeepers, custodians or trustees in reporting the value of assets.

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D. The defiiiition of advice—recommendation as to an advice provider

The Proposal includes as investment advice a recommendation provided to a participant, IRA

holder or plan fiduciary as to an advice provider (as newly defined). Advice as to which vendor

to retain is too far removed from an actual recommendation concerning a securities transaction to

constitute investment advice. Moreover, such a rule is unnecessary. If a person has been

retained to provide a recommendation as to an advice provider with respect to participants and

plan fiduciaries, the recommending firm will be a covered service provider required to report

compensation under ERISA § 408(b)(2) regulations, thereby providing fee transparency. Even

with respect to IRA holders, the provision is unnecessary, as the recommended advice provider

itselfwill undertake fiduciary responsibilities under the Proposal.

Despite the absence of noted abuses, the Proposal does a great deal of harm:

• Selling. This section ofthe Proposal prevents those willing to provide fiduciary-level

investment advice from selling their own services. Ifthe act ofmarketing proprietary

investment management products or services is fiduciary, then no investment manager or

fund firm will be able to sell its own goods or services. This runs counter to decades old

ERISA case law holding that fiduciaries do not have fiduciary responsibilities with

respect to the terms oftheir own engagement,a precedent that was acknowledged and

embraced by the Department inits explanations of §408(b)(2).^^

Casual referrals. Making recommendations to an advice provider a fiduciary act is likely

to prevent plan fiduciaries and individuals from receiving casual referrals (without

separate charge) to one or more advice providers from a lawyer, tax professional or

service provider.

Marketing third-party advice services. Finally, this aspect ofthe Proposal prohibits

recordkeepers like TRP RPS from marketing third party advice services to which its

recordkeeping system can provide daily feeds. As plan sponsors have sought to provide

investment advice and management services to participants, it has become common for

recordkeepers to make arrangements with third party advice providers to facilitate such

services. Owing to technical challenges with secure transmission ofsensitive data, it is

rare to have complete "open architecture." There will often be only a few third party

firms that a recordkeeper can accommodate, and there may be an extra charge collected

by the recordkeeper in recognition ofthe added costs. In these cases, the recordkeeper

will market the third party service(s) as value-added capabilities. All compensation that

is received by either the recordkeeper or the third party advice provider is reflected in the

respective ERISA § 408(b)(2) fee disclosures and Form 5500 Schedule C reporting.

See Renfro v. Unisys Corp., 671 F.3d 314, 324(3d Cir. 2011) (citing Heckerv. Deere, 556 F.3d 575, 583 (7''' Cir.

2009) (a party "does not act as a fiduciary with respect to the terms in the service agreement if it does not control the

named fiduciary's negotiation and approval ofthose terms.").

See Comment Letter submitted by Society of Professional Administrators and Recordkeepers ("SPARK").

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There is simply no reason to impose fiduciary duties on firms who market third party

advisory services in these circumstances.

E. Carve-outs

The use of carve-outs to cure an overlybroaddefinition of fiduciary advice is itselftroubling.

The Department acknowledges that carve-outs are necessary because the basic definition is

overly broad.^^ The resort to highly technical and specific carve-outs is problematic in these

circumstances. As this letter and other commentators note,^"' the Department's proposed carveouts fall far short. It is difficult to imagine that all unintended consequences ofthe overly broad

rule will be identified in the relatively brief period for public comment. We list the most

troubling carve-out implications we have identified below:

1. Platform Providers

The carve-out related to platform providers is insufficient to address ordinary sales activities of

recordkeepers. For example, TRP RPS' platforms offer thousands ofinvestment options

(including different share or unit classes ofspecific options). A simple list with thousands of

entries is insufficient to help fiduciaries navigate through the choices. To assist prospective plan

clients and their advisers, TRP RPS offers curated lists using disclosed, objective criteria (often

sourced by TRP RPS from third parties under license). The use ofthese lists is not covered by

either the platform provider carve-out or the selection and monitoring assistance carve-out

(which is limited to criteria specified by the fiduciary). Ifthis were to be a fiduciary-level task,

we would likely reevaluate this service.

The platform carve-out is also insufficient because it is limited to plan fiduciaries. Read literally,

it does not allow the transfer agent for the Price Mutual Funds to provide a comprehensive list of

those funds available for investment by IRA clients, or to denote which ofthose funds remains

open for new investors, without accepting fiduciary status. At a minimum, the Department

should clarify that the Proposal does not elevate to a fiduciary act the listing offunds available

for investment by IRA clients.

2. Selection and Monitoring Assistance

The selection and monitoring assistance carve-out is also too narrow. The carve-out does not

allow the criteria used to be specified by the provider ofthe assistance. Often, however, firms

like T. Rowe Price develop special technology and license specific data in order to support

robust, objective screening tools, and cannot readily support full customization ofscreening

criteria. The carve-out should be expanded to allow provider-specified criteria.

'^5ee80 Fed. Reg. 21929.

See, e.g., SPARK Comment Letter; U.S. Chamber Comment Letter; Investment Company Institute Comment

Letter on Proposed Definition of Fiduciary Advice.

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In addition, the carve-out limits the assistance to plan fiduciaries. Firms would now have to

remove on-line screening tools from their websites for individual retirement investors that allow

users to narrow funds by specific criteria (such as asset class or Morningstar star rating or

expense level).

This carve-out illustrates another shortcoming with the rule. Individuals do not consider their

financial circumstances by legal character of account; those who seek to save for the long-term

may save in a number ofinvestment accounts—retirement plans, IRAs and taxable accounts.^"*

The overly broad rules here, paired with uncertain abilities to limit the scope of fiduciary

responsibilities, may cause firms to remove these tools altogether as it will be difficult to restrict

on-line tools to those with taxable accounts only, or to prohibit individuals with multiple account

types from using the information inconnection with their IRAs.^^

3. Investment Education

Perhaps the most serious defect in the carve-outs is the contraction ofthe definition of

investment education first promulgated in 1996. Without any specific attribution of harm

arising from the decades-old definition, the Proposal would eliminate the ability to identify

specific funds in connection with asset allocation models or interactive tools designed to help

participants understand and model the impact of different asset allocation choices on their likely

ability to support certain income levels in retirement. While we laud the expansion of

investment education to new topics and recipients, we believe that the Proposal would

substantially erode retirement security by reducing assistance that is provided today using the

well-established investment education principles.

T. Rowe Price believes that meaningful asset allocation education has helped improve the

retirement prospects for many retirement investors. Interactions with investors that both explain

asset allocation principles and put them in context by referencing available investments have

helped retirement savers become retirement investors. One important example ofthis is

educational material used to explain target date funds. Target date funds represent an important

innovation in the investment product space that has markedly improved asset allocation among

retirement savers across the industry. The effectiveness ofthis education is evident in research

that shows younger retirement savers are gravitating towards target date funds.^^ Forcing firms

into a fiduciary status for this type of helpful information is highly likely to reduce access to

these types of helpful materials.

Absent specific abuses that have occurred as a result of the investment education principles

Ofthose individual investors serviced by T. Rowe Price who use our interactive tool for retirement planning,

about one-third report having assets earmarked for retirement in non-retirement accounts.

Many T. Rowe Price investors hold both taxable and retirement accounts at T. Rowe Price. It will be confusing to

these investors if they can receive assistance with their taxable account, but not their retirement plan account or IRA.

Interpretive Bulletin ("IB") 96-1, codified at 29 C.F.R. § 2509.96-1.

See the combined report from the Investment Company Institute and the Employee Benefits Research Institute at

https://www.ici.org/pdf''per20-10.pdf.

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articulated by the Department in 1996, there is no regulatory basis orjustification for reducing

access tohelp by changing an interpretation that has functioned well for almost 20 years.^^

Part 2. Best Interest Contract Exemption

The Department intends BICE to be a flexible exemption to ERISA's prohibited transaction rules

that preserves a wide range of business practices. We laud the Department's support for a "best

interest" standard which protects retirement investors while accommodating the business

objectives offirms providing investment advice.^^ As proposed, however, the exemption is

flawed in concept and unworkable in practice. If the Department seeks to implement a

standards-based exemption, it should eliminate the many conditions and instead articulate a

broad "best interest" principle.

A. Contract Requirement and Timing

The requirement of a contract is unnecessary for ERISA-govemed relationships. There is ample

opportunity under ERISA for advice recipients to pursue violations without a contract. Adding

contract liability appears to contravene the principles ofERISA preemption, and may in fact

exceed the authority ofthe Department.^^

Even with respect to non-ERISA IRA relationships, it is not clear that a contract creating

additional liabilities and causes of action is required. As noted earlier, the Department of

Labor's preamble discounts the efficacy ofremedies available outside of ERISA for the conduct

itseeks to address.^' Yet, most ofthe individuals and firms providing investment advice to

investors, including IRA holders, are subject to extensive oversight and enforcement by one or

more ofthe SEC, FINRA, and state securities and/or insurance regulators. In discounting these

other regulatory schemes, the Department has failed to demonstrate the necessity for a contract

as a condition of a prohibited transaction exemption.

The timing requirement ofthe contract is both inconsistent with the legal framework and

unworkable. Prohibited transactions arise only ifthe investment advice is followed precisely and

The preamble to IB 96-1 explains that the Department first developed that guidance after a review of actual

investment materials. It then circulated a draft of the proposed guidance to both plan sponsors and service providers

and released IB 96-1 because "[b]oth plan sponsors and service provider representatives unequivocally agreed that

the guidance as drafted would strengthen participant investment education."

In this regard, we believe the Department should clarify that putting the clients' interests first satisfies the

requirement to act "without regard" to an adviser's or firm's compensation. Such a change would avoid any

potential confusion as to the ability of a for-profit firm to meet the standard.

° See U.S. Chamber Comment Letter.

See 80 Fed. Reg. 21,933, 21,947. The Department notes the absence of a remedy under ERISA but does not

acknowledge remedies available under a number of other regulatory regimes, such as FINRA arbitration, SEC

administrative complaints, or state insurance regulators.

The Department also ignores another key deterrent—the imposition of punitive prohibited transaction penalties.

If the Department is concerned about IRA holders, it could implement a standards-based prohibited transaction

exemption—imposing a best interest standard without a contract—paired with a DOL-administered referral program

whereby IRA holder complaints are referred to the Internal Revenue Service for consideration oftax penalties.

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a transaction ensues, yet the contract is required to be formed even before the advice is given.

Because advice is defined to include basic sales activities, the proposed exemption requires

retirement investors to enter into a contract before they even understand the value ofservices or

products to be offered, making the contract requirement inexplicable and even daunting for

retirement investors.^^

The BICE's contract requirement is especially problematic in the context of a call center. For

example, a contract between an investor and a T. Rowe Price call center representative would be

required to discuss large cap funds offered by T. Rowe Price as potential IRA investments. If a

follow-up conversation on the same or a related investment topic occurred that same day with a

second phone representative, a new contract would be required. Setting aside the logistical

issues of contractingvia telephone, such repeated contracting is both annoying for the investor

and unwieldy for the advice provider and his or her firm.

B. Contract Substance—Reasonable Compensation

Exemption from prohibited transaction taxes under BICE requires the advice provider to receive

no more than reasonable compensation. While a laudable goal, this requirement in the context of

an exemption is troublesome for two reasons. First, this requirement appears to shift the burden

for determining reasonableness ofa firm's compensation onto the service provider,^"* even

though it is the advice recipient who is best equipped to comparison shop among competitors.

This is inconsistent with the Department's approach in regulations under ERISA § 408(b)(2)

which imposed the burden for determining reasonableness appropriately on the plan fiduciary

retaining the service provider."'^ Second, the concept of reasonableness is malleable, and has

been taken bysome (especially inthe private plaintiffs' bar) to mean "lowest cost."^^ Ifthe

Department retains such a requirement, it should specify that reasonableness is a range, and does

not require that the advice provider be the lowest cost provider relative to the value provided, or

even among the lowest cost providers.

We are particularly concerned by the special BICE requirements for a firm that does not offer a

"broad range" of products. The failure to define "broad range" creates uncertainty among

putative advice providers. Certainly, firms like T. Rowe Price that focus on proprietary products

" The Department in its rulemaking resulting in participant fee disclosure rules, 29C.F.R. §2550.404a-5,

emphasized the importance of avoiding information overload: "Whilea critical objective of thisrulemaking is to

ensure that all participants and beneficiaries in participant-directed individual account plans are furnished the

information they need to make informed investment decisions, the Department remains sensitive to the possibility

that too much information may only serve to overwhelm, rather than inform, participants and beneficiaries."

See Braden v. Wal-MartStores, Inc., 588 F. 3d 585, 601 (8th Cir. 2009) ("[T]he statutory exemptions [to

prohibited transaction provisions] are defenses which must be proven by the [person claiming the exemption]"). .

^In light ofdisclosures under ERISA §408(b)(2), the "reasonableness" requirement isunnecessary when the advice

provider has been retained by a plan fiduciary.

See Braden, 588 F. 3d at 601 (holding that a complaint claiming that a lower cost funds were available in the asset

classes represented in a 401(k) plan's line-up stated a claim for fiduciary breach).

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and services should not have a greater burden under BICE. Further, the standard that BICE

imposes with respect to reasonableness of compensation in regard to the "specific services"

provided to the advice recipient is unworkable. Mutual fund expenses are mutualized and are

borne by all shareholders in the same share class on a pro rata basis; they are not based on

"specific services" provided to any given shareholder. Accordingly, the standard in BICE with

respect to compensation for those primarily focused on selling proprietary mutual funds is

potentially inconsistent with how mutual funds operate. This requirement should be removed.

C. Contract Substance-Warranties

The BICE requires the advice provider to provide certain contractual commitments in the form of

warranties. This unnecessarily duplicates liability for the advice provider, as breach of warranty

may give rise to a separate tort claim with the potential for punitive damages.^^ Adding contract

liability and tort liability, especially where there is already the potential for ERISA liability, is

unnecessary and will dissuade many from using BICE.

The subject ofthe required warranties is also concerning.

• Compensation warranty. Advice providers are required to warrant that their

compensation practices do not "tend to" encourage violation ofthe Best Interest standard.

In selling its proprietary investment management services and products, T. Rowe Price

maintains a core value of putting clients first. No T. Rowe Price employee receives

commissions. We reward employees for putting clients first and for furthering the

interests ofthe firm. While our compensation practices promote our clients' best interest

as we understand it, they may be seen as violative of a best interest standard as

interpreted by the Department.^^ At a minimum, the Department should clarify that it is

permissible for a firm to base compensation on sales activity, so long as the firm and the

individual employee have put the client's interests first.

Compliance warranty. Further, the requirement that advice providers warrant to

compliance with "all applicable state and federal laws" relative to the advice and asset at

issue appears to create private rights of action for particular violations where Congress

and perhaps state legislatures have failed to do so.""^ This provision should be removed.

TRPIS offers self-directed brokerage accounts as a convenience for T. Rowe Price customers. Clearing services

for these accounts are provided by an unaffiliated third party. TRPIS does not provide investment guidance or

advice with respect to brokerage accounts.

Restatement (Second) ofTorts, § 522 (1977).

See, e.g.. Testimony ofthe Honorable Thomas E. Perez before U.S. House of Representatives Education and the

Workforce Committee, hearing on "restricting Access to Financial Advice: Evaluating the Costs and Consequences

for Working Families and Retirees," June 17, 2015, in which he stated that the Proposal is "grounded in a basic

principle—that investment advisers should act in their clients' best interest, not their own." (Emphasis added).

We question whether the Department has the authority to augment the enforcement schemes offederal statutes

other than ERISA, see, e.g.. Alexander v. Sandoval, 532 U.S. 275, 286 (2001)("[P]rivate rights of action to enforce

federal law must be created by Congress."). Similar questions exist about the Department's authority to address

violations ofstate statutes and reaulations.

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D. Contract Substance—Conflicts Disclosure

The requirement to list so-called "material" conflicts of interest creates the potential for

excessive and duplicative disclosures. First, those subject to the Investment Advisers Act must

already disclose material conflicts,'" and the Department has made no attempt to harmonize

those requirements. Second, the definition of "material" in BICE in effect nullifies the

materialitypremise by requiring disclosure of any interest that could affect" a fiduciary's

judgment. The requirement to list interests that could affect an advice provider's judgment in

any respect, absent any materiality threshold, is likely to overwhelmthe recipient with

substantial quantities of unnecessary information. At a minimum, BICE should be revised to

acknowledge that compliance with InvestmentAdvisers Act of 1940 principles with respect to

timing and content of conflict disclosures should meet BICE for registered investment advisers,

and the definition of "material conflict ofinterest" should be re-written to incorporate a true

materiality threshold.

E. Fee and Performance Disclosure and Data Creation

The numerous disclosure conditions within the proposed exemption are duplicative ofthe

information provided in existing disclosures and are unnecessary to ensure that best interest

standards are met.

For plan fiduciaries and plan participants, there are already disclosure requirements that address

fees. See 29 C.F.R. § 2550.404a-5 (participant disclosure) and 29 C.F.R. § 2550.408b-2

(governing disclosure to fiduciaries with authority to retain service providers, including other

fiduciary service providers). These rules were developed recently after extensive public

comment and agency deliberation, and weighed carefully the amount of detail (especially the

detail appropriate and helpful for individual investors) against the need for transparency. The

Department has failed to explain why additional disclosures at different times are necessary for

plan fiduciaries and participants in this context.

The disclosure requirements are also problematic to the extent that they require projections.

FINRA imposes significant constraints on investment projections, and it is unclear whether

member firms could discharge the obligation to provide specific projections without violating

FINRA rules.

For firms like T. Rowe Price that focus on proprietary mutual funds, the BICE's requirement of

additional disclosure is unnecessary. IRA retirement investors contemplating mutual fund

purchases or sales already receive ample fee disclosure. Mutual fund rules require extensive fee

and performance disclosure to investors in the form of prospectuses, summary prospectuses,

annual reports, semi-annual reports, and statements of additional information, and govern both

style of presentation and timing of delivery. These disclosures contain detailed information

about the fund, with a particular emphasis on fees and costs. In both the summary and statutory

prospectus, clients are provided information about sales charges (i.e., loads), redemptions fees.

See SEC Form ADV and related instructions.

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account fees, management fees, distribution and service fees (i.e., 12b-l fees), as well as other

expenses. Those materials also provide an example ofthe hypothetical projected costs of

holding the investment 1-, 3-, 5- and 10-year time horizons using the rate ofreturn assumption

(5%) mandated by the SEC.

The charts below give samples of disclosures taken from the Summary Prospectus ofthe T.

Rowe Price Blue Chip Growth Fund dated May 1, 2015.

Fees and Expenses of the Fund

Shareholderfees (fees paid directly fmm your investment

Maximumsales charge Qoad)imposed on

purchases NONE

Maximum deferred sales charge Goad) NONE

Redemption fee NONE

Maximum account fee $20"

Annual fund operating expenses

(expens es that you pay each year as a

percentage of the value of your investment)

Management fees 0.57%

Distribution and service (12b-l) fees 0.00%

Other expenses 0.15%

Total annual hind operating expenses 0.72%

' Subjectto certainexceptions,accounts witha balance ofless than SlO.OOOare chargedan annual S20fee,

Example This example is intended to help you compare the cost of investingin the

fund\vlth the costof investing in other mutual funds. Theexample assumes that you

invest 510,000in the fund forthe time periods indicated and then redeem all of your

sharesat the end of those periods.The example alsoassumesthat your investment

hasa 5% return each yearand that the fund's operatingexpenses remainthe same.

Although your actual costs maybe higher or lower, based on these assumptions your

costs would be;

lyear 3 years S years lOyeors

$74 $230 $401 $894

Requiring additional, somewhat similar disclosures tailored for the amount ofthe particular

investment is unnecessary in light ofthe extensive disclosure already required, and is unlikely to

provide substantially greater clarity to the retirement investor when the advice prescribes

investment in mutual funds.

The costs to build point-of-sale and annual disclosure systems as well as the costs to create data

repositories for the information that might be requested by the Department are substantial, and

well inexcess ofthose estimated inthe economic impact section ofthe Preamble."^^ Inrelation to

the disclosures required by 29 C.F. R. §§ 2550.404a-5 and 2550.408b-2, the complexity of

creating the infrastructure to support the BICE disclosures would consume more resources and

42 See, e.g., 80 Fed. Reg. 21,982-83 (describing costs ofrecordkeeping requirements as "de minimus additional

burden").

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require greater lead time. The window for implementing the substantial §408(b)(2) disclosures

was 2 years. Allowing only8 months to implement the exponentially larger BICE disclosures is

unrealistic.

Even if firms buildthe systems to satisfy the disclosure and reporting requirements, the data

creation and retention requirements of BICE are unlikely to conferbenefit on retirement

investors, and will be very difficult, ifnot impossible, tomeet.'*^ Tracking the outcome of

recommendations is only possible when investors implement the recommendations precisely and

immediately, and implement the recommendation within anaccount that ismaintained by the

firm that has provided the advice.'*'^ The data creation and retention requirements to support

potential Department inquiries should be removed.

Part 3. Existing Exemption Amendments

T. Rowe Price embraces the philosophy ofputting clients' interests first, and we are supportive

of the Department's goal of incorporating a bestinterest standard (defined asputting clients'

interests first) into existing exemptions, provided ourconcerns about the inconsistency and

excessive breadth of the Department's definition of materiality with respectto conflicts of

interest is addressed. We see no reason, however, to change theburden of proofas to

reasonableness of compensationfor fiduciaries in those exemptions. This is inconsistent with

bothjudicial precedent and earlierDepartment rule-making concerning fees.

With respect to Prohibited Transaction Exemption ("PTE") 77-4, we recommend that the

Departmentclarify that the advice recipient not be required to provide affirmative consent to

changes in fees. Particularly for those firms focused on advice with respect to mutual funds,

changes in fees ofthe mutual fund are notindividually negotiable, and are overseen by an

independent mutual fund board. Requiring an affirmative disclosure to a change inmutual fund

fees rather than disclosure andnegative consent does not addmaterially to protection of the

advice recipients, andhas been waived by theDepartment in over 22 private exemptions

patterned on PTE 77-4. Further, we recommend that commingledtrusts or other investment

vehicles managed by a fiduciary or its affiliates be included as permissible investments as to

which a fiduciary canprovide advice, as has occurred in 6 private exemptions also patterned on

this exemption. The playing field should be leveled by allowing allwho seek to take advantage

of PTE77-4 to benefit from rules thatsome have received through private exemptions.

The datacreation requirements must be clarified in another important regard. T. Rowe Price mutual funds are

distributed through intermediaries under contracts which maymake them "agents" of various T. Rowe Price

affiliates for purposes of accepting purchase or saleorders. Wedo nothavevisibility intothe activities of these

firms with respect to their investment advice activities, and we would be unable to track the outcome oftheir

specific actions because we neither control their conduct normaintain investor level accounts. The obligation to

create data should be limited to firms that both provide advice to and maintain accounts for retirement investors.

The impracticality of the data creation requirement is attributable in part to the substantial overbreadth of the

proposed definition of advice thatelevates mailings addressed byname to an individual to the level of fiduciary

advice.

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Part 4. Proposals for Revision

Ifthe Department continues to believe, after review ofthe commentary and reexamination ofthe

economic analysis, that some action is required to prevent abuses, then T. Rowe Price proposes

the following:

A. Redraw the basic definition of advice to reflect reasonable expectations of fiduciary

status.

The Department should define investment advice to mean an individualized recommendation as

to the purchase, sale or holding of an investment in an ERISA plan or IRA account in

circumstances where a) the person providing the recommendation acknowledges fiduciary status

in connection with the recommendation; b) there is a mutual understanding that the

recommendation is intended to serve as the primary basis for decision; or c) the circumstances

surroundingthe recommendationcreate an objectivelyreasonable expectation that the person

providing the recommendation is acting for the exclusive benefit of the recipient with respect to

the prescribed action.

Recommendations should be defined to mean something more purposeful than a suggestion.

While some commentators have proposed different formulations to address this same concept,'^^

we favor using the Secretary of Labor's analogy to doctors by defining recommendation as a

communication that, based on its content, context and presentation would reasonably be viewed

as a prescription that the recipient engage in or refrain from a particular course of action.

The definition should not incorporate FINRAstandards (which purposefully bring into scope

sales activities), although the Department should specify that an>'thing that is not a

recommendation under FINRA rules should not constitute a recommendation for ERISA

purposes. Recommendations to contribute to a plan or to take a distribution or rollover should

not be an investment recommendation unless paired specifically with a fiduciary-level

recommendation as to the investment ofthe plan account, IRA, or proceeds distributed from such

accounts.

B. Remove provisions tbat constrain conduct that has no identifiable barm, or as to

wbicb otber protections are available.

References to valuation (especially valuations reported by recordkeepers and custodians) should

be excluded from the definition offiduciary advice. The act of providing suggestions or

recommendations as to advice providers should be removed from the definition ofinvestment

advice. While expansion ofthe principles ofInterpretive Bulletin 96-1 should be retained and

the expanded audiences confirmed, provisions narrowing investment education should be

eliminated. The ability to identify specific investment options as under current guidelines in

Interpretive Bulletin 96-1 should be preserved.

See, e.g., the proposal from the American Benefits Council, incorporating the requirement that the

recommendation represent the "considered judgment" ofthe provider.

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C. Expand or revise carve-outs to avoid unintended consequences.

To the extent that the Department retains an overly broad definition of advice, carve-outs should

be equally broad and unconditional to eliminate any suggestion that standard sales activity

(including selling investment management products or services, or identifying available

investment options, or a subset ofthem, for any advice recipient) is fiduciary in character.

Similarly, any language in carve-outs suggesting that screening tools based on identified,

objective criteria are fiduciary-level investment advice in any circumstance should be eliminated.

D. Substitute a broad standards-based Best Interest Exemption for BICE.

Instead ofthe problematic BICE, the Department should craft an exemption with a single

requirement, namely that the adviser and firm act in the best interest ofthe advice recipient by

putting the interests ofthe advice recipient first. This change would achieve greater consistency

with the Department's approach to other exemptions, and is protective ofretirement investors.

E. Eliminate burden switching as to fee reasonableness, and create a level playing field

for all who seek to use 77-4.

Modifications to other exemptions that alter the burden of proof as to reasonableness offees

should be eliminated. The "best interest" standards should be defined as putting clients' interests

first. PTE 77-4 should be improved (and the playing field leveled) for all firms seeking to use

PTE 77-4 principles by allowing negative consent to fee changes, and by including

circumstances where a fiduciary provides advice with respect to a collective trust or other

investment vehicle managed by that fiduciary or its affiliate.

We appreciate the opportunity to provide our perspectives on the Proposal and the proposed new

or amended prohibited transaction exemptions, and we welcome a chance to work with the

Department to improve the fiduciary advice initiative for the benefit of all retirement investors.

Sincerely yours,

Margar&t H. Raymrad

Vice President

Managing Counsel

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