Timothy E. Keehan

Vice President and Senior Counsel

Center for Securities, Trust and Investments

202-663-5479 

tkeehan@aba.com

February 3, 2011

VIA ELECTRONIC MAIL

Mr. Robert J. Doyle

Director

Office of Regulations and Interpretations

Employee Benefits Security Administration

Room N-5655

U.S. Department of Labor

200 Constitution Ave., NW

Washington, DC 20210

Re: Proposed Rule on Definition of the Term “Fiduciary” Under ERISA

Dear Mr. Doyle:

The American Bankers Association (ABA) appreciates the opportunity to provide comments to 

the Department of Labor (Department) on the proposed rule regarding the expanded 

circumstances under which a person is considered to be a “fiduciary” under the Employee 

Retirement Income Security Act of 1974 (ERISA) when providing investment advice to an 

employee benefit plan or to a plan’s participants (Proposal). The ABA represents banks of all 

sizes and charters and is the voice for the nation’s $13 trillion banking industry and its two 

million employees. Many of these banks are plan service providers, providing trust, custody, and 

other services for institutional clients, including employee benefit plans covered by ERISA. As 

of year-end 2009, banks held $7.5 trillion in defined benefit and defined contribution accounts.1

The definition of fiduciary is a fundamental component of ERISA, with significant implications 

for our member banks. We are, therefore, pleased that the Department plans to hold a hearing on 

the Proposal next month and trust that the Department will carefully weigh, and will take 

appropriately into account, industry reactions, comments, and input prior to taking further action. 

We believe that the Proposal is overbroad and unintentionally captures persons who were never 

intended to be included within the term “fiduciary” under ERISA. If adopted in its current form, 

the Proposal is likely to impact negatively the very participants, beneficiaries, and account 

holders that it is intended to protect by making it extremely difficult or costly for banks to deliver 

the services and information necessary, helpful, or appropriate for a financially sound retirement. 

It is further possible that some services provided to plans and their participants and beneficiaries 

may altogether be discontinued. This in turn may lead to greater costs and inefficiencies in the 

administration of the nation’s pension plans and individual retirement accounts. In light of these 

concerns, we request that the Department amend the Proposal, taking into account the testimony 

obtained from the upcoming hearings on the Proposal as well as on-going coordinated action 

 

1

FDIC Quarterly Banking Profile, Table VIII-A (December 2009).
2

with the other agencies as addressed below. Rather than a sweeping re-definition of “fiduciary”, 

the amended Proposal should: (i) focus on the specific actions that the Department has concluded 

should warrant inclusion within the fiduciary definition, and (ii) make clear or expressly carve 

out from the definition those activities that do not rise to the level of fiduciary activity (such as 

the activities described herein). 

Section 3(21)(A) of ERISA provides that a person is a “fiduciary” with respect to a plan to the 

extent (i) it exercises any discretionary authority or discretionary control with respect to 

management of such plan or exercises any authority or control with respect to management or 

disposition of its assets; (ii) it renders investment advice for a fee or other compensation, direct 

or indirect, with respect to any moneys or other property of such plan, or has any authority or 

responsibility to do so; or (iii) it has any discretionary authority or discretionary responsibility in 

the administration of such plan.2

In the Proposal, the Department proposes to expand part (ii) above of the fiduciary definition by 

re-interpreting what it means for a person to provide “investment advice for a fee or other 

compensation.” Under the Proposal, a person becomes a fiduciary when such person: “(1) 

Provides advice, or an appraisal or fairness opinion, concerning the value of securities or other 

property, (2) Makes recommendations as to the advisability of investing in, purchasing, holding, 

or selling securities or other property, or (3) Provides advice or makes recommendations as to the 

management of securities or other property.”3

Among the reasons the Department cites for proposing these changes are: (1) the shift from 

defined benefit plans to defined contribution plans in the financial marketplace; and (2) the 

difficulty for the Department to conclude, under the current five-part test4of the Department’s 

regulations, whether one is a fiduciary under ERISA. The marketplace shift from defined benefit 

plans to defined contribution plans as well as the increased complexity of investment products, 

however, have not impacted the core determination of when one is acting as a fiduciary under 

ERISA. Moreover, the occasional challenge posed by implementing the five-part test does not 

warrant a wholesale abrogation of the current regulation in favor of a far-reaching definition of 

“fiduciary”. 

We also note that the Proposal comes at a time when banks and other entities subject to ERISA 

are attempting to comply with the Department’s recently issued interim final rule governing fee 

 

2

ERISA § 3(21)(A). [Emphasis added.]

3

75 Fed. Reg. 65,264 (Oct. 22, 2010).

4

The Department’s regulation creates a five-part test for determining whether a person should be treated as a 

fiduciary by reason of rendering investment advice. See 29 C.F.R. § 2510.3-21(c). For advice to constitute 

“investment advice,” an adviser who does not have discretionary authority or control with respect to the purchase or 

sale of securities or other property for the plan must – (1) render advice as to the value of securities or other 

property, or make recommendations as to the advisability of investing in, purchasing or selling securities or other 

property, (2) on a regular basis, (3) pursuant to a mutual agreement, arrangement or understanding, with the plan or 

a plan fiduciary, that (4) the advice will serve as a primary basis for investment decisions with respect to plan assets, 

and that (5) the advice will be individualized based on the particular needs of the plan. See id. 
3

disclosures to plan fiduciaries under section 408(b)(2) of ERISA.5 We believe that the 

Proposal’s attempt to re-define a fiduciary will produce confusion and uncertainty regarding the 

content of these disclosures.

Finally, we note that in light of the significant changes occurring in the financial services 

industry as a result of the passage of the Dodd-Frank Act (Dodd-Frank),6the securities activities 

of banks (including those involving fiduciary duties owed to their customers and to parties with 

whom they do business) will be subject to overlapping and possibly conflicting regulatory 

requirements and obligations, as well as oversight by multiple federal regulators. In addition to 

the Department, bank fiduciaries may be subject to regulation by the Securities and Exchange 

Commission (SEC), the Commodity Futures Trading Commission (CFTC), and the Municipal 

Securities Rulemaking Board (MSRB). The Department’s issuance of the Proposal appears to 

preempt the contemporaneous efforts of these regulatory bodies to regulate bank fiduciary 

activities in the financial marketplace. Consequently, the Proposal, if finalized, may duplicate, 

overlap, or conflict with the actions of the other regulators. Before taking any further action, the 

Department should seek to coordinate the Proposal’s provisions with the other federal agencies’ 

regulatory initiatives mandated by Dodd-Frank.

Although we provide our initial thoughts on the Proposal below, we wish to reserve the 

opportunity to comment further on the Proposal after we have carefully reviewed and analyzed 

the pending regulatory actions of the SEC, CFTC, and MSRB.

I. The Proposal Expands the Definition of Fiduciary to Include Non-Fiduciary 

Administrative and Other Services.

A. Providing a Statement that Includes the Values of Assets that Are Not Part of a 

“Generally Recognized Market” Should Not Lead to Fiduciary Status.

Under the Proposal, it appears that a service provider, in certain situations, could be deemed a 

fiduciary merely by providing a plan fiduciary or plan participant a general statement reflecting 

the value of plan investments (unless that statement or report is provided “for purposes of 

compliance with the reporting and disclosure requirements” of ERISA or the Internal Revenue 

Code and the regulations thereunder). It is common for banks to prepare and provide reports and 

statements more frequently than ERISA’s minimum reporting requirements. For example, many 

trustees, custodians, and record keepers, in addition to providing periodic (e.g., monthly or 

quarterly) statements, make available continuous access online to current information regarding 

plan investments. Providing such online access and information in addition to periodic 

statements is a purely administrative function and should not be considered a fiduciary act. 

Consequently, the “reporting and disclosure requirements” exception to fiduciary status should 

be expanded to cover expressly all such access and information and other similar periodic 

reports. 

 

5

75 Fed. Reg. 41,600 (July 16, 2010).

6 Dodd-Frank Wall Street Reform and Consumer Protection Act, Pub. L. 111-203 (2010).
4

The Proposal, moreover, limits the reporting and disclosure requirements exception by providing 

that the exception does not apply if “such report involves assets for which there is not a generally 

recognized market and serves as a basis on which a plan may make distribution to plan 

participants and beneficiaries.” [Emphasis added.] Typically, however, directed trustees and 

custodians receive prices from third parties for assets which are not part of a “generally 

recognized market.” It is often because there is not any generally recognized market that an 

investment manager will use a pricing service or appraiser, such as for real estate or private 

equity investments, to help provide a value for such securities or other assets. Merely taking that 

price from the third party and placing it on general statements or reports on plan assets is a 

purely administrative function and should not cause a bank, acting as a trustee or custodian, to 

become a fiduciary with respect to the provision of such reports. 

With respect to valuation, we also ask the Department to consider and analyze the implications 

for a person who, under the Proposal, might be a fiduciary when the individual accepts a 

valuation responsibility. What would be the scope and duration of the resulting duties? Since 

this would now apply where a party is engaged for a one-time service only, how would fiduciary 

responsibilities apply? For example, how would a monitoring responsibility apply to the person 

supplying a one-time service such as valuation? What will be the start and end time of this 

responsibility? 

We have further concerns with the phrase “generally recognized market” since this term is not 

defined in the Proposal and thus unintentionally could exclude from its ambit a variety of 

situations, such as modeling or matrix pricing, or even simple mathematical calculations 

following industry standard methodologies, that are used to arrive at a market valuation. 

Another service that trustees or custodians may provide to employee benefit plans is the 

calculation of net asset values (NAV) for a portion of a plan or an investment option, such as a 

separately managed account contained in a plan. As with other calculations described above, the 

calculation of a NAV involves no discretion but merely straightforward mathematical 

calculations. This likewise should not be considered a fiduciary act. For example, directed 

trustees and custodians sometimes calculate the value for swaps or derivatives based upon the 

elements or characteristics of the instrument received from other entities. These characteristics 

are reflected in the valuation model and are used to ascertain a market valuation. While directed 

trustees and custodians may be the ones who create the model, all of the elements that determine 

the price itself are provided by other parties. In other circumstances, the model may be 

purchased from a vendor. The creators of these models do not stand behind them and make no 

representation that the prices they generate represent the fair value of the underlying instrument. 

The inclusion of value of any such asset’s value on a statement, therefore, should not be 

considered a fiduciary act. 

Also, alternative plan assets such as limited partnership interests may be reported based upon an 

industry standard process known as roll-forward methodology. Under this methodology, the last 

available statement from the limited partnership or investment is adjusted solely to reflect 

subsequent contributions made or distributions received with respect to the investment. The 

adjustment requires no exercise of discretion and merely follows the industry standard 

methodology.
5

A related concern is the interplay between the Proposal and the plan asset rules. Under the plan 

asset rules, both a plan’s equity investment in a bank collective investment trust (CIT) and an 

undivided interest in the CIT’s investment in other vehicles are “plan assets.” An example is 

when a CIT invests in a real estate fund, hedge fund, or private equity fund. Under the Proposal, 

any party passing along information to the CIT’s investment manager on the value of the CIT’s 

investment in the underlying investment vehicle (units in the underlying fund), or on assets of 

that vehicle that are used in computing the vehicle’s unit values, is potentially an ERISA 

fiduciary under the Proposal because it may be deemed to be giving advice on the value of 

securities or other property owned or to be purchased by a plan. This would be true whether the 

underlying investment vehicle invests in publicly offered securities or in non-public assets (with 

values determined by appraisal). As a result, we are concerned that investment managers, 

custodians, and sub-custodians of the underlying investment vehicles could all be deemed 

fiduciaries under the Department’s proposed definition.

These examples show how valuation of an asset outside a “generally recognized market,” or the 

simple act of passing along a plan asset’s value to another party, may unintentionally confer 

fiduciary status on multiple entities (service providers as well as investment managers) that were 

never intended to be considered fiduciaries under ERISA. 

B. Providing Direction to an Individual Regarding Distribution from a 401(k) Plan 

Should Not Lead to Fiduciary Status.

The Proposal questions whether the expansion of the term “fiduciary” should include direction 

regarding distributions from a 401(k) plan. We believe this would blur the distinction between 

advice, on the one hand, and education and marketing on the other hand.

When a service provider speaks to individuals about distributions from their 401(k) plan, this 

falls somewhere between investment education and marketing, both of which are specifically, 

and appropriately, excluded from being considered fiduciary activity. As the Proposal states, 

“the following acts in connection with an individual account plan . . . shall not, in and of 

themselves, be treated as rendering of investment advice . . . (A) Provision of investment 

education information and materials... (B) Marketing or making available (e.g., through a 

platform or similar mechanism), without regard to the individualized needs of the plan, its 

participants, or beneficiaries, securities or other property from which a plan fiduciary may 

designate investment alternatives into which plan participants or beneficiaries may direct the 

investment of assets . . . if the person making available such investments discloses in writing to 

the plan fiduciary that the person is not undertaking to provide impartial investment advice.”7

The conversation between a participant departing employment and the plan sponsor generally 

involves information about the distribution options that are available to that individual. This is 

important educational information. Service providers will be impeded from providing possible 

investment options to plan participants out of concern that any such information imparted to the 

individual might be deemed “advice” that would trigger fiduciary status. The Department, 

 

7

75 Fed. Reg. at 65,277.
6

therefore, should clarify the situations that involve generalized (as opposed to individualized) 

needs of plan participants regarding possible actions to take with regard to their investments. A 

provider marketing a standardized set of investment options to participants, for example, should 

not be deemed to be giving individualized advice to a particular plan participant, and therefore, 

should not make the provider a fiduciary.

C. Providing Certain Services in Connection with Making Investment or 

Management Decisions Should Not Lead to Fiduciary Status.

The Proposal includes language (section (c)(1)(ii) (D)) regarding the provision of individualized 

advice or making investment recommendations regarding plan assets. This provision uses 

phrases that make unclear whether the advice will rise to the level of fiduciary responsibility. 

The proposal’s language includes advice that “may be considered” in connection with making an 

investment or management decision. We are unsure how to determine when advice provided 

“may” be considered, since that term does not require a meeting of the minds, as is typically 

required under contract law. 

The Proposal also is unclear when advice rises to the level of “individualized.” In this regard, 

the Department should clarify this term or broaden the scope of the limitation available with 

respect to marketing or making available an investment menu from which a plan fiduciary may 

designate investment alternatives for individuals in an individual account plan. For example, 

during a plan fiduciary’s due diligence process with respect to prospective record keepers, the 

plan fiduciary may request a sample investment lineup from a prospective record keeper. In 

response, record keepers may provide a sample lineup or may narrow down the universe of 

investment alternatives on its menu based on objective, quantitative criteria (such as international 

equities or short-term equities, ratings, expense ratios, etc.). The Department should clarify that 

these practices are not the provision of “individualized” advice since the universe of investment 

options is simply pared down to a reasonably tailored set of options (without singling out a 

particular investment strategy, investment option, or portfolio). Alternatively, the Department 

should broaden the scope of the limitation with respect to marketing or making available an 

investment menu to encompass these practices. 

The Department should further clarify that the provision of analytics reports regarding (i) plan 

performance, (ii) an investment manager’s performance, or (iii) an investment manager’s 

compliance with investment guidelines, does not constitute investment advice. Directed trustees 

and custodians can assist plan sponsors and fiduciaries with their fiduciary oversight 

responsibilities by providing various analytics reports without exercising discretion. Plan 

sponsors provide the criteria for the service provider’s analysis, and the service provider relies 

upon industry benchmarks or risk-return data obtained from third parties or proprietary 

algorithms that are commonly utilized and not customized by the plan sponsor. Similarly, a 

service provider may utilize reporting tools to filter for investment managers that satisfy the plan 

sponsor’s criteria for a particular investment mandate. Again, the database of investment 

managers (including performance data) is provided by a third party. The plan sponsor provides 

the selection criteria and the reporting tools are not customized by the plan sponsor. Also, a 

service provider may provide reporting on an investment manager’s compliance with the plan 
7

sponsor’s investment guidelines, on a post-trade basis, if such manager makes an investment that 

does not appear to be within the investment guidelines. 

The service provider exercises no discretion when providing the aforementioned reports. It 

makes no recommendation regarding actions that might be taken by the plan sponsor as a result 

of such reporting. We believe such reports would be important information for a plan fiduciary 

to have in appropriately discharging its responsibilities to the plan; however, such information is 

unlikely to be made available by the service provider if merely providing such reports were to 

trigger fiduciary status.

D. Clarification Requested on Seller’s Exception.

In connection with the Proposal, we would ask that the Department clarify that when a bank (or 

other entity) is responding to an RFP or an existing customer’s inquiry, and the bank 

recommends itself or an affiliate to provide additional services to a plan, that this action would 

appropriately fit within the seller’s exception found in the Proposal under section (c)(2)(i). This 

would help ensure that the bank would avoid being unintentionally designated as a fiduciary 

under the Proposal.

II. The Proposal Unnecessarily Expands the Definition of Fiduciary to Investment 

Advisers.

Under section (c)(1)(ii) of the Proposal, the definition of fiduciary includes persons that were not 

intended to fall within the term. Specifically, the Proposal significantly broadens the definition 

of fiduciary to include persons who are deemed to be investment advisers under the Investment 

Advisers Act of 1940, as amended (Advisers Act).8 In doing so, the Department appears to have 

concluded that an investment adviser, because it owes fiduciary duties to its customers under the 

Investment Advisers Act, should automatically be deemed a fiduciary under ERISA. We note 

that fiduciary status under one regulatory scheme (the Advisers Act) should not inexorably 

confer fiduciary status under another regulatory scheme (ERISA), particularly where there may 

be differences in fiduciary standards, duties, responsibilities, obligations, and liability between 

the two distinct schemes. This is particularly the case here, where a recently released SEC study 

on an investment adviser’s fiduciary duties to retail customers is expected to lead to a revised 

standard of conduct for advisers (and a new standard applicable to brokers and dealers).9 

III. The Proposal Creates Confusion and Uncertainty over Compliance with the 

Interim Final Rule Governing Fee Disclosures Under Section 408(b)(2) of ERISA.

On July 16, 2010, the Department issued an interim final rule regulating the disclosures provided 

to plan fiduciaries under section 408(b)(2) of ERISA (Disclosure Rule). The Disclosure Rule 

requires certain service providers to employee pension benefit plans to disclose information to 

 

8

15 U.S.C.A. § 80b-1 et seq.

9

See Dodd-Frank Act § 913(g)(2); Securities and Exchange Commission, Study on Investment Advisers and 

Broker-Dealers (Jan. 2011).
8

assist plan fiduciaries in assessing the reasonableness of contracts or arrangements, including the 

reasonableness of the service providers’ compensation and potential conflicts of interest that may 

affect the service providers’ performance. Among the disclosures required is a statement that the 

service provider (including an affiliate or subcontractor) “will provide, or reasonably expects to 

provide, services . . . as a fiduciary.”10

In order to comply with the Disclosure Rule, covered services providers (including banks) will 

need to determine whether the services they provide to the plan fiduciary rise to the level of a 

fiduciary service. This may be a difficult task since it is not always clear when a particular 

service is a “fiduciary” service. The Proposal, in re-defining the term “fiduciary” under section 

3(21)(A) of ERISA, introduces additional uncertainty and confusion into this determination. 

This is a key concern since a service provider’s failure to provide accurate disclosures could 

result in fiduciary liability and/or termination of the service provider’s contractual relationship 

with the plan fiduciary.11 We are also concerned that, should the Department finalize the 

Proposal, service providers would have insufficient time and opportunity to consider, and if 

necessary amend, the language of the disclosures originally formulated to comply with the 

Disclosure Rule. 

We request that the Department provide (i) guidance on the interplay between the Proposal and 

the Disclosure Rule so that covered service providers will be able to formulate accurate 

disclosures to plan fiduciaries regarding their services that are deemed to be fiduciary services 

under the Disclosure Rule; and (ii) adequate time to allow for service providers to adjust the 

disclosure language as required under the Disclosure Rule, should the Proposal become finalized. 

IV. The Proposal Is Inconsistent with the Objectives of the Pension Protection Act.

The Proposal is inconsistent with the congressional intent in passing the Pension Protection Act 

of 2006 (PPA)12 and undermines the prohibited transaction exemption for participant investment 

advice enacted as part of the PPA. The PPA amended ERISA and the Internal Revenue Code by 

adding a statutory exemption that permits the provision of investment advice to a participant 

through an “eligible investment advice arrangement.”13 Shortly thereafter, the Department 

issued a Field Assistance Bulletin clarifying that the varying fee limitation under an eligible 

investment advice arrangement applied to the compensation received by the individual providing 

the advice and his employer, but not to that paid to affiliates of the fiduciary adviser.14 

 

10 29 C.F.R. § 2550.408b-2(c)(1)(iv)(B).

11 Commenters to the Disclosure Rule expressed concern that the factual nature of fiduciary status under ERISA 

adds a level of uncertainty as to compliance. The Department believes that the final disclosure provision on 

fiduciary status addresses the commenters’ concerns since “the final provision only requires disclosure if the 

provider will or reasonably expects to be providing services as a fiduciary or registered investment adviser.” 75 

Fed. Reg. at 41,608. The Department’s response, however, begs the question whether the service provider’s 

conclusion that a service is non-fiduciary is in fact a reasonable conclusion, and therefore, does not remove the 

uncertainty whether compliance has been achieved. 

12 Pub. L. 109-280, 120 Stat. 780 (Aug 17, 2006).

13 See ERISA § 408(g)(2).

14 Department of Labor, Field Assistance Bulletin No. 2007-01 (Feb. 2, 2007).
9

The Department’s expansive view of the term “fiduciary” under the Proposal, however, could 

substantially restrict the application of the new PPA exemption and therefore limit the provision 

of high quality investment advice to participants and IRA account holders. Many fiduciary 

advisers relying on the exemption would be affiliated with institutions that may receive variable 

compensation. Under section (c)(1)(ii)(D) of the Proposal, these affiliated institutions would be 

considered to be acting as ERISA fiduciaries in recommending their respective advisory 

programs because a plan “may consider” the recommendation. Consequently, a fiduciary 

adviser’s affiliate that is considered to be a fiduciary under the Proposal, and which receives 

varying fees as permitted under the PPA statutory exemption, would appear to be engaged in 

prohibited self-dealing under ERISA.15 We request that the Department amend the Proposal so 

that fiduciary advisers and their affiliates, whose fee arrangements have been structured to 

comply with the PPA, may continue to rely on the PPA statutory exemption with respect to such 

arrangements.

V. The Proposal Should Not Apply to Individual Retirement Accounts.

The Department suggests that a primary impetus behind the Proposal is to accomplish better its 

enforcement objectives. Individual Retirement Accounts (“IRAs”), however, are not subject to 

Department enforcement authority. Although the Proposal applies equally to IRAs and qualified 

plan accounts, there are numerous distinctions between the two types of accounts, which 

distinctions have historically been recognized in other areas of law. The Proposal nevertheless 

disadvantages IRAs because only individual account plans (such as 401(k) plans) are afforded 

exemptions from the Proposal’s coverage. In the absence of these exemptions, the Proposal’s 

application to IRAs would ultimately have a disproportionately negative impact on the thousands 

of IRA account holders who have come to rely on banks and other financial institutions to 

deliver investment services and support. At this time, therefore, we suggest that IRAs be deleted 

from coverage under the Proposal in order for the Department to determine whether the unique 

costs and structure of IRAs would support a different fiduciary standard. 

VI. Under Dodd-Frank, Banks Will Be Subject to Multiple Fiduciary Standards.

The Department has issued the Proposal at a time of rapid change in the fiduciary marketplace. 

The passage of Dodd-Frank has resulted in several major regulatory initiatives which impact 

bank fiduciary activities. First, as required by Dodd-Frank, the SEC has recently issued a study 

that will serve as the springboard for issuing a uniform federal fiduciary standard of care on 

brokers, investment advisers, and their respective associated persons. The primary purpose of 

this initiative is to harmonize the different standards of care applicable to brokers and advisers. 

Second, Dodd-Frank mandates the CFTC to promulgate rules applicable to the business practices 

and potential conflicts of interest of swap dealers and major swap participants.16 The CFTC has 

already issued proposed rules in this area.17 Third, the MSRB, under the SEC’s oversight, is in 

 

15See 29 C.F.R. § 2550.408b-2(e).

16 Dodd-Frank § 713(h).

17 See Commodity Futures Trading Commission, Business Conduct Standards for Swap Dealers and Major Swap 

Participants With Counterparties, 75 Fed. Reg. 80,638; Commodities Futures Trading Commission, Implementation 

of Conflicts of Interest Policies and Procedures by Swap Dealers and Major Swap Participants, 75 Fed. Reg. 71,391.
10

the process of establishing a new regulatory scheme applicable to municipal advisers, which will 

include provisions on fiduciary duties owed to an adviser’s clients.18 

All of these regulatory initiatives significantly impact the activities of banks subject to ERISA. 

Rather than acting in piecemeal fashion, which could potentially disrupt industry practices, 

create confusion and uncertainty in the marketplace, and prove an impediment to investment for 

retirement, the Department either should refrain from acting on the Proposal until these 

initiatives are complete or work alongside the other agencies to promulgate fiduciary standards 

of care and conduct that are consistent. 

VII. Conclusion.

We share the Department’s efforts to improve protection of the interests of plans and their 

participants and beneficiaries by targeting certain professionals whose misconduct or deficient 

actions have fallen inappropriately outside the definition of “fiduciary” under ERISA. We 

believe, however that the Proposal is overbroad and captures persons never intended to be 

included as ERISA fiduciaries. We strongly encourage further study of these proposals and the 

relevant issues involved. After the conclusion of its hearings on the Proposal, the Department 

should amend the Proposal in a way that takes into account industry concerns, comments, and 

input, and enhances banks’ ability to provide to their customers the financial services that they 

need and want. The amended Proposal should provide for a narrowed expansion of the term 

“fiduciary” that would exclude activities, such as those described herein, that are generally 

considered to be outside the scope of the term. Furthermore, in light of proposals arising from 

the SEC, CFTC, and MSRB on similar fiduciary issues, the Department should closely 

coordinate its rulemaking actions with these regulatory bodies in order to minimize the chance of 

overlapping and conflicting regulatory requirements. 

If you have any questions, please do not hesitate to contact me at 202-663-5479.

Sincerely yours,

Timothy E. Keehan

Vice President & Senior Counsel

Center for Securities, Trust and Investments

American Bankers Association

 

18 The MSRB already has amended its “fair dealing” rule to apply to municipal advisers. See MSRB Rule G-17. In 

addition, at its quarterly board meeting on January 27-28, 2011, the MSRB approved a proposed municipal adviser 

fiduciary duty rule, G-36, and draft interpretive notice, which will be shortly issued for industry comment.