Labor Department Official Commends SEC for Report On Pension Consultant Conflicts of Interest

Archived News Release — Caution: Information may be out of date.

WASHINGTON—Ann L. Combs, assistant secretary for employee benefits security administration, today commended the Securities and Exchange Commission (SEC) on its report examining conflicts of interest among pension consultants.

The SEC regulates pension consultants, who are registered investment advisers and have a fiduciary responsibility to their clients. The Labor Department regulates pension plan fiduciaries who have an obligation to the workers and retirees in their plans. “Working together, the agencies can ensure that conflicts of interest are disclosed and appropriately addressed,” said Combs.

The SEC report, “Staff Report Concerning Examinations of Select Pension Consultants,” examines how business relationships of pension consultants can potentially cloud the objectivity of the advice provided to pension plan clients. The report also discusses the extent to which these relationships are disclosed to the clients.

While the SEC is responsible for regulating the conduct of investment advisers, including advisers that provide pension consulting services to employee benefit plans, the Labor Department is responsible for the conduct of the plan fiduciaries. This includes, among other things, selecting the providers of pension consulting and other services for plans. The Employee Retirement Income Security Act (ERISA) requires that plan fiduciaries must act prudently in selecting and monitoring service providers. Disclosure of a service provider's potential conflicts of interests would be an important part of the selection and monitoring process.

The report is available at www.sec.gov.

Archived News Release — Caution: Information may be out of date.