Risk & Compliance

SEC and Labor Tie Up to Help Workers

Procedures established for the agency and the department to exchange retirement and investment information on employees' behalf.
Stephen TaubJuly 29, 2008

The Securities and Exchange Commission and Department of Labor announced a formal arrangement for the two to share information on retirement and investments on a permanent basis.

They said the memorandum of understanding (MOU) between them strengthens the cooperation with which they deal together with material in those areas, providing investors, benefit plan participants, and plan administrators with better access to more understandable information that can be use in making investment decisions. The increasing intersection of regulatory responsibilities presents new challenges in protecting the retirement assets of investors, the two added.

There is currently $5.8 trillion in retirement assets held in employee benefit plans for American workers, retirees, and their families. “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,” SEC Chairman Christopher Cox said.

The MOU establishes a process for the Labor’s Employee Benefits Security Administration staff and the SEC staff to work together and exchange information. Areas where they will work closely involve examination findings and trends, enforcement cases, and regulatory requirements that impact the missions of both agencies.

The Labor 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.

Both agencies will designate points of contact in their regional offices to facilitate communications among staff on enforcement and examination matters. The agreement also will expedite the sharing of non-public information regarding investment advisers and other subjects of mutual interest between the two agencies. In addition, the Labor Department and SEC will cross-train staff under the agreement with the goal of enhancing each agency’s understanding of the other’s mission and investigative jurisdiction.