labor lawAdivision of labor law center

Employers are warned that the US Department of Labor and the Securities and Exchange Commission or SEC will be sharing information on employee retirement plans such as 401ks. This collaboration enables the federal agency to more strictly enforce regulations on employers.

 

Elaine L. Chao, U.S. secretary of labor, and Christopher Cox, chairman of the U.S. Securities and Exchange Commission (SEC), today committed to a permanent relationship of sharing information on retirement and investments. More than 65 million American workers participate in 401ks alone, with total assets to employees and retirees of $5.8 trillion.

 

“This Memorandum of Understanding with the Securities and Exchange Commission will better protect the 117 million Americans who depend on private sector retirement plans,” said Secretary Chao. “This further boosts the department’s record-setting enforcement program that has won $11 billion in monetary results and more than 800 criminal indictments since 2001 on behalf of protecting workers’ retirement savings.”

 

The increasing intersection of regulatory responsibilities in today’s financial world presents new challenges in protecting the retirement assets of investors nationwide, according to regulators. The Memorandum of Understanding between the two agencies will formalize and strengthen cooperation to share information relating to retirement and investments, and provide investors, benefit plan participants, and plan administrators with better access to more understandable information that they can use to make informed investment decisions.

 

Chairman Cox said, “With a growing number of seniors focused on managing their own 401(k) plans, it’s important to improve disclosure to give them the information they need and in a form they can use. To accomplish this, the Department of Labor and the SEC are committed to coordinating closely on their behalf. This enhanced coordination of the SEC’s investor protection efforts and the Department of Labor’s regulatory responsibility for pensions and 401(k)s will greatly benefit the millions of hardworking Americans who are saving and investing for their retirement as well as those who have already retired.”

 

The memo establishes a process for the federal Employee Benefits Security Administration and SEC staff to share information and meet regularly to discuss matters of mutual interest. These include examination findings and trends, enforcement cases and regulatory requirements that impact the missions of both agencies. The department has oversight over 401(k) and other retirement plans as well as plan participants, while the SEC oversees, among other areas, brokerages, investment advisers and mutual funds.

 

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