Rule2025-11650
Removal of Definition of “Plan Assets”-Insurance Company General Accounts
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
July 1, 2025
Effective
September 2, 2025
Issuing agencies
Labor DepartmentEmployee Benefits Security Administration
Abstract
This DFR removes 29 CFR 2550.401c-1 from the Code of Federal Regulations, which the Department of Labor (DOL) believes is obsolete. The regulation applies only to certain insurance policies or contracts issued to (or on behalf of) employee benefit plans on or before December 31, 1998. Given the unlikelihood that any of these policies or contracts remain in effect, the DOL believes the regulation is no longer needed and, if left on the books, could add confusion and unnecessary complexity. Removing obsolete regulations eliminates the burden on the public of having to determine whether they need to comply with the regulations. This action is being taken pursuant to Executive Order 14192, titled Unleashing Prosperity Through Deregulation.\1\ This action improves the daily lives of the American people by reducing unnecessary, burdensome, and costly Federal regulations. ---------------------------------------------------------------------------
Full Text
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<title>Federal Register, Volume 90 Issue 124 (Tuesday, July 1, 2025)</title>
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[Federal Register Volume 90, Number 124 (Tuesday, July 1, 2025)]
[Rules and Regulations]
[Pages 28009-28012]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2025-11650]
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DEPARTMENT OF LABOR
Employee Benefits Security Administration
29 CFR Part 2550
RIN 1210-AC34
Removal of Definition of ``Plan Assets''--Insurance Company
General Accounts
AGENCY: Employee Benefits Security Administration, Department of Labor.
ACTION: Direct final rule (DFR); request for comments.
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SUMMARY: This DFR removes 29 CFR 2550.401c-1 from the Code of Federal
Regulations, which the Department of Labor (DOL) believes is obsolete.
The regulation applies only to certain insurance policies or contracts
issued to (or on behalf of) employee benefit plans on or before
December 31, 1998. Given the unlikelihood that any of these policies or
contracts remain in effect, the DOL believes the regulation is no
longer needed and, if left on the books, could add confusion and
unnecessary complexity. Removing obsolete regulations eliminates the
burden on the public of having to determine whether they need to comply
with the regulations. This action is being taken pursuant to Executive
Order 14192, titled Unleashing Prosperity Through Deregulation.\1\ This
action improves the daily lives of the American people by reducing
unnecessary, burdensome, and costly Federal regulations.
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\1\ 90 FR 9065 (Feb. 6, 2025).
DATES: The final rule is effective September 2, 2025, unless
significant adverse comments are received by July 31, 2025. Significant
adverse comments are ones which oppose the rule and raise, alone or in
combination, a serious enough issue related to each of the independent
grounds for the rule that a substantive response is required. If
significant adverse comments are received, notification will be
published in the Federal Register before the effective date either
withdrawing the rule or issuing a new final rule which responds to
significant adverse comments.
[[Page 28010]]
ADDRESSES: The Employee Benefits Security Administration (EBSA)
encourages interested persons to submit their comments on this request
for information online. You may submit comments, identified by RIN
1210-AC34, by either of the following methods:
Federal eRulemaking Portal: <a href="https://www.regulations.gov">https://www.regulations.gov</a>. Follow the
instructions for submitting comments.
Mail: Office of Exemption Determinations, Employee Benefits
Security Administration, Room N-5461, U.S. Department of Labor, 200
Constitution Avenue NW, Washington, DC 20210, Attn: Removal of
2550.401c-1, Definition of ``plan assets''--insurance company general
accounts RIN 1210-AC34.
Instructions: All submissions must include the agency name and
Regulatory Identifier Number RIN 1210-AC34 for this request. If you
submit comments online, do not submit paper copies. All comments
received will be posted without change on <a href="https://www.regulations.gov">https://www.regulations.gov</a>
and <a href="https://www.dol.gov/agencies/ebsa">https://www.dol.gov/agencies/ebsa</a> and will be made available for
public inspection at the Public Disclosure Room, N-1513, Employee
Benefits Security Administration, U.S. Department of Labor, 200
Constitution Avenue NW, Washington, DC 20210.
Warning: Do not include any personally identifiable or confidential
business information that you do not want publicly disclosed. Comments
are public records that are posted online as received and can be
retrieved by most internet search engines.
FOR FURTHER INFORMATION CONTACT: Susan Wilker, Office of Exemption
Determinations, Employee Benefits Security Administration, (202) 693-
8540. This is not a toll-free number.
SUPPLEMENTARY INFORMATION:
I. Background and Discussion
Under section 401(b)(2) of the Employee Retirement Income Security
Act of 1974 (ERISA), if an insurance company issues a ``guaranteed
benefit policy'' to a plan, the assets of the plan are deemed to
include the policy, but do not, solely by reason of the issuance of the
policy, include any of the assets of the insurance company. On December
13, 1993, the Supreme Court held in Harris Trust \2\ that a contract
qualifies as a guaranteed benefit policy only to the extent it
allocates investment risk to the insurer. Therefore, under the Supreme
Court's decision, an insurer's general account includes plan assets to
the extent it contains funds which are attributable to any
nonguaranteed components of contracts with employee benefit plans.
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\2\ John Hancock Mutual Life Insurance Co. v. Harris Trust &
Savings Bank, 510 U.S. 86 (1993) (Harris Trust).
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In response to the Supreme Court decision in Harris Trust, Congress
amended ERISA section 401 by adding new subsection 401(c). Among other
things, this new subsection required the Department to issue
regulations that provide guidance for the purpose of determining which
assets held by an insurer (other than plan assets held in its separate
accounts) constitute assets of the plan. The subsection also required
the Department to issue regulations providing guidance with respect to
the application of Title I of ERISA to the general account assets of
insurers. The statute specifies that the regulations will only apply to
general account policies issued by an insurer on or before December 31,
1998.
The regulations were finalized on January 5, 2000. The regulations
provide that, generally, when a plan has acquired a ``Transition
Policy,'' the plan's assets include the Transition Policy, but do not
include any of the underlying assets of the insurer's general account,
if the insurer satisfies certain requirements. The regulation defines
``Transition Policy'' as, among other things, a policy or contract of
insurance (other than a guaranteed benefit policy) issued by an insurer
to, or on behalf of, an employee benefit plan on or before December 31,
1998, and which is supported by the assets of the insurer's general
account.
Because the regulation is limited to Transition Policies issued on
or before December 31, 1998, it is not likely that any Transition
Policies remain in effect. The Department is therefore removing this
regulation from the Code of Federal Regulations, as it no longer serves
any useful purpose, and allowing the regulation to remain on the books
only wastes time and resources that could be more productively
employed.
The rule removes the regulation prospectively as of the effective
date and has no effect on its legal effectiveness prior to that date.
Members of the public are invited to provide comments on whether any
Transition Policies remain in effect, and on the Department's reasoning
and decision to remove the regulation from the Code of Federal
Regulations.
II. Procedural Issues and Regulatory Review
A. Review Under Executive Orders 12866
Executive Order (E.O.) 12866, ``Regulatory Planning and Review,''
58 FR 51735 (Oct. 4, 1993), requires agencies, to the extent permitted
by law, to (1) propose or adopt a regulation only upon a reasoned
determination that its benefits justify its costs (recognizing that
some benefits and costs are difficult to quantify); (2) tailor
regulations to impose the least burden on society, consistent with
obtaining regulatory objectives, taking into account, among other
things, and to the extent practicable, the costs of cumulative
regulations; (3) select, in choosing among alternative regulatory
approaches, those approaches that maximize net benefits; (4) to the
extent feasible, specify performance objectives, rather than specifying
the behavior or manner of compliance that regulated entities must
adopt; and (5) identify and assess available alternatives to direct
regulation, including providing economic incentives to encourage the
desired behavior, such as user fees or marketable permits, or providing
information upon which choices can be made by the public.
Section 6(a) of E.O. 12866 also requires agencies to submit
``significant regulatory actions'' to OIRA for review. OIRA has
determined that this direct final rule does not constitute a
``significant regulatory action'' under section 3(f) of E.O. 12866.
Accordingly, this direct final rule was not submitted to OIRA for
review under E.O. 12866.
B. Review Under the Regulatory Flexibility Act
The Regulatory Flexibility Act (5 U.S.C. 601 et seq.) requires
preparation of an initial regulatory flexibility analysis (IRFA) and a
final regulatory flexibility analysis (FRFA) for any rule that by law
must be proposed for public comment, unless the agency certifies that
the rule, if promulgated, will not have a significant economic impact
on a substantial number of small entities.
DOL reviewed this rescission under the provisions of the Regulatory
Flexibility Act. This rule eliminates an obsolete regulation and the
burden associated with imposing the obligation to determine
obsolescence on the public. Therefore, DOL has concluded that the
impacts of the rule would not have a ``significant economic impact on a
substantial number of small entities,'' and that the preparation of an
FRFA is not warranted. DOL will transmit this certification and
supporting statement
[[Page 28011]]
of factual basis to the Chief Counsel for Advocacy of the Small
Business Administration for review under 5 U.S.C. 605(b).
C. Review Under the Paperwork Reduction Act
This rule imposes no new information or record-keeping
requirements. Accordingly, OMB clearance is not required under the
Paperwork Reduction Act. (44 U.S.C. 3501 et seq.).
D. Review Under Executive Order 13132
E.O. 13132, ``Federalism,'' 64 FR 43255 (August 10, 1999), imposes
certain requirements on Federal agencies formulating and implementing
policies or regulations that preempt State law or that have federalism
implications. The Executive order requires agencies to examine the
constitutional and statutory authority supporting any action that would
limit the policymaking discretion of the States and to carefully assess
the necessity for such actions. The Executive order also requires
agencies to have an accountable process to ensure meaningful and timely
input by State and local officials in the development of regulatory
policies that have federalism implications.
DOL has examined this rescission and has determined that it would
not have a substantial direct effect on the States, on the relationship
between the national government and the States, or on the distribution
of power and responsibilities among the various levels of government.
E. Review Under Executive Order 12988
With respect to the review of existing regulations and the
promulgation of new regulations, section 3(a) of E.O. 12988, ``Civil
Justice Reform,'' imposes on Federal agencies the general duty to
adhere to the following requirements: (1) eliminate drafting errors and
ambiguity, (2) write regulations to minimize litigation, (3) provide a
clear legal standard for affected conduct rather than a general
standard, and (4) promote simplification and burden reduction. 61 FR
4729 (Feb. 5, 1996). Regarding the review required by section 3(a),
section 3(b) of E.O. 12988 specifically requires that Executive
agencies make every reasonable effort to ensure that the regulation:
(1) clearly specifies the preemptive effect, if any, (2) clearly
specifies any effect on existing Federal law or regulation, (3)
provides a clear legal standard for affected conduct while promoting
simplification and burden reduction, (4) specifies the retroactive
effect, if any, (5) adequately defines key terms, and (6) addresses
other important issues affecting clarity and general draftsmanship
under any guidelines issued by the Attorney General.
Section 3(c) of E.O. 12988 requires Executive agencies to review
regulations in light of applicable standards in section 3(a) and
section 3(b) to determine whether they are met or it is unreasonable to
meet one or more of them. DOL has completed the required review and
determined that, to the extent permitted by law, this rescission meets
the relevant standards of E.O. 12988.
F. Review Under the Unfunded Mandates Reform Act
Title II of the Unfunded Mandates Reform Act of 1995 (UMRA)
requires each Federal agency to assess the effects of Federal
regulatory actions on State, local, and Tribal governments and the
private sector. Public Law 104-4, sec. 201 (codified at 2 U.S.C. 1531).
For a regulatory action likely to result in a rule that may cause the
expenditure by State, local, and Tribal governments, in the aggregate,
or by the private sector of $100 million or more in any one year
(adjusted annually for inflation), section 202 of UMRA requires a
Federal agency to publish a written statement that estimates the
resulting costs, benefits, and other effects on the national economy. 2
U.S.C. 1532(a), (b)). The UMRA also requires a Federal agency to
develop an effective process to permit timely input by elected officers
of State, local, and Tribal governments on a ``significant
intergovernmental mandate,'' and requires an agency plan for giving
notice and opportunity for timely input to potentially affected small
governments before establishing any requirements that might
significantly or uniquely affect them.
DOL examined this rescission according to UMRA and its statement of
policy and determined that the rescission does not contain a Federal
intergovernmental mandate, nor is it expected to require expenditures
of $100 million or more in any one year by State, local, and Tribal
governments, in the aggregate, or by the private sector. As a result,
the analytical requirements of UMRA do not apply.
G. Review Under the Treasury and General Government Appropriations Act,
1999
Section 654 of the Treasury and General Government Appropriations
Act, 1999 (Pub. L. 105-277) requires Federal agencies to issue a Family
Policymaking Assessment for any rule that may affect family well-being.
This rescission would not have any impact on the autonomy or integrity
of the family as an institution. Accordingly, DOL has concluded that it
is not necessary to prepare a Family Policymaking Assessment.
H. Review Under Executive Order 12630
Pursuant to E.O. 12630, ``Governmental Actions and Interference
with Constitutionally Protected Property Rights,'' 53 FR 8859 (March
18, 1988), DOL has determined that this rescission would not result in
any takings that might require compensation under the Fifth Amendment
to the U.S. Constitution.
I. Review Under the Treasury and General Government Appropriations Act,
2001
Section 515 of the Treasury and General Government Appropriations
Act, 2001 (44 U.S.C. 3516, note) provides for Federal agencies to
review most disseminations of information to the public under
information quality guidelines established by each agency pursuant to
general guidelines issued by OMB. OMB's guidelines were published at 67
FR 8452 (Feb. 22, 2002). DOL has reviewed this rescission under the OMB
and has concluded that it is consistent with applicable policies in
those guidelines.
J. Review Under Additional Executive Orders and Presidential Memoranda
DOL has examined this rescission and has determined that it is
consistent with the policies and directives outlined in E.O. 14154,
``Unleashing American Energy,'' E.O. 14192, ``Unleashing Prosperity
Through Deregulation,'' and Presidential Memorandum, ``Delivering
Emergency Price Relief for American Families and Defeating the Cost-of-
Living Crisis.'' This rescission is expected to be an Executive Order
14192 deregulatory action.
K. Congressional Notification
As required by 5 U.S.C. 801, DOL will report to Congress on the
promulgation of this rule before its effective date. The report will
state that it has been determined that the rule is not a ``major rule''
as defined by 5 U.S.C. 804(2).
List of Subjects in 29 CFR Part 2550
Employee benefit plans, Fiduciaries, Foreign investments in U.S.,
Investments, Pensions, Reporting and recordkeeping requirements,
Securities, Surety bonds, Trusts and Trustees.
For the reasons set forth in the preamble, EBSA amends 29 CFR part
2550 as set forth below:
[[Page 28012]]
PART 2550--RULES AND REGULATIONS FOR FIDUCIARY RESPONSIBILITY
0
1. The authority citation for part 2550 is revised to read as follows:
Authority: 29 U.S.C. 1135, sec. 102, Reorganization Plan No. 4
of 1978, 5 U.S.C. App. at 727 (2012) and Secretary of Labor's Order
No. 1-2011, 77 FR 1088 (Jan. 9, 2012). Sections 2550.404a-2 and
2550.404a-3 also issued under sec. 657, Pub. L. 107-16, 115 Stat.
38. Sections 2550.404a-5, 2550.404c-1 and 2550.404c-5 also issued
under 29 U.S.C. 1104. Sec. 2550.408b-1 also issued under 29 U.S.C.
1108(b)(1). Sec. 2550.408b-19 also issued under sec. 611, Pub. L.
109-280, 120 Stat. 780, 972. Sec. 2550.412-1 also issued under 29
U.S.C. 1112.
Sec. 2550.401c-1 [Removed]
0
2. Section 2550.401c-1 is removed.
Signed at Washington, DC, this 18th day of June, 2025.
Timothy D. Hauser,
Employee Benefits Security Administration, Department of Labor.
[FR Doc. 2025-11650 Filed 6-30-25; 8:45 am]
BILLING CODE 4510-29-P
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</html>Indexed from Federal Register on July 1, 2025.
This is legal information, not legal advice. Laws vary by jurisdiction and change frequently. Always verify current law with official sources and consult a licensed attorney in your jurisdiction for advice on your specific situation.