Employee Benefits Security Administration Issues Guidance on Distributions of Mutual Fund Late Trading and Market-Timing Settlement Proceeds

Archived News Release — Caution: Information may be out of date.

Washington, DC - The U.S. Department of Labor’s Employee Benefits Security Administration today released enforcement guidance on the allocation and distribution to employee benefit plans and their participants of the proceeds of certain settlements between the Securities and Exchange Commission (SEC) and various mutual fund companies. As a result of SEC enforcement matters, funds are available for distribution to investors, including plans that were affected by alleged late trading and market timing activities.

The guidance, issued as Field Assistance Bulletin (FAB) 2006-01, indicates that the proceeds will not be considered plan assets under the Employee Retirement Income Security Act (ERISA) until distributed from the settlement fund and received by appropriate plan fiduciaries. In addition, the FAB describes various processes that may be used by fiduciaries for the allocation and distribution of the proceeds to plans and participants.

Guidance in the FAB is intended to help independent distribution consultants appointed under order of the SEC, service providers to plans, and benefit plan fiduciaries in allocating and distributing the proceeds of the settlements.

The FAB is part of the department’s ongoing compliance assistance program to help employers, plan officials, various service providers, and others to comply with ERISA. Field Assistance Bulletins are available on the Internet at www.dol.gov/ebsa.

U.S. Department of Labor news releases are accessible on the Department's Newsroom page. The information in this news release will be made available in alternate format upon request (large print, Braille, audio tape or disc) from the COAST office. Please specify which news release when placing your request at 202.693.7765 or TTY 202.693.7755. The U.S. Department of Labor is committed to providing America's employers and employees with easy access to understandable information on how to comply with its laws and regulations. For more information, please visit the Department's Compliance Assistance page.

Archived News Release — Caution: Information may be out of date.

Contact Name: Gloria Della
Phone Number: 202.693.8664