On October 7, 2008, the Employee Benefits Security Administration (EBSA) released two final rules related to the selection of annuity providers.

The first rule limits the application of the “safest available” standard of Interpretive Bulletin 95-1 to defined benefit plans. Bulletin 95-1 states that plan fiduciaries must attempt to obtain the safest annuity available, unless it would be in the best interest of the participants and beneficiaries to do otherwise.  The Bulletin initially applied equally to both defined benefit plans and defined contribution plans. The final rule limits the scope of the bulletin to only defined benefit plans. 

The second rule establishes a safe harbor for the selection of annuity providers for benefit distributions from individual account plans. The proposed rule stated that fiduciaries should engage in an objective, thorough, and analytical search when identifying annuity providers, while avoiding self-dealing, conflicts of interest, or other improper influence.  The final rule clarified the proposed rule by noting (a) that the regulation does not establish a minimum requirement for satisfying the responsibilities of selecting an annuity provider; and (b) an independent expert is not required in all cases.