The U.S. Department of Labor is not proposing specific changes to Congress regarding Interpretive Bulletin 95-1, its Employee Benefits Security Administration guidance related to the fiduciary standards of pension risk transfer transactions.

Instead, the DOL believes further exploration into the evolution of the PRT market may warrant changes in the future.

A report released June 24 was required by SECURE 2.0, the retirement security package Congress passed in December 2022.

The bulletin, IB 95-1, outlines the process plan fiduciaries must take when executing a pension risk transfer in order to obtain the safest annuity available.

Among the concerns raised by stakeholders at an ERISA Advisory Council meeting in July 2023 to address IB 95-1 was the growing role of private equity in the PRT market.

Over the past decade, insurance companies backed by alternative money managers have gotten involved in pension risk transfers, including American National Group Inc., which was purchased by Brookfield Asset Management Reinsurance Partners Ltd. In 2022.

EBSA found in the June report that IB 95-1 “continues to identify broad factors that are relevant to a fiduciary’s prudent and loyal evaluation of an annuity provider’s claims-paying ability and creditworthiness. EBSA also finds that it is desirable for guidance in this area to remain principles-based.”

However, EBSA also said in the report that further explorations into the developments in the life insurance industry and the PRT market “is necessary to determine whether some of the Interpretive Bulletin’s factors need revision or supplementation and whether additional guidance should be developed.”

EBSA said in the report that given the concern among stakeholders regarding insurers’ ownership structures, exposure to risky assets and nontraditional liabilities and the use of affiliated and offshore reinsurance, the agency believes consideration should be given whether the bulletin should be amended to “enhance fiduciary decision-making on these issues.”

“Today’s report is the result of an extensive and thorough review, including more than 40 stakeholder meetings on this topic and input received through our consultation with the ERISA Advisory Council,” said Lisa Gomez, assistant secretary for employee benefits security at the DOL, in a June 24 news release. “We look forward to further exploration of the issues and concerns raised during the process, so that we can consider what next steps may be necessary to guide fiduciaries considering a pension risk transfer for their defined benefit pension plans, so that the fiduciaries can meet their obligations to participants and beneficiaries.”

In the report, EBSA said it is not prepared to propose amendments because of the complexity of the issues raised by stakeholders. “As just one example of this, six ERISA Advisory Council members supported no changes to the Interpretive Bulletin, while the other nine members supported different positions on different issues,” the report said.

The report suggested “broader public input” as an important next step in “determining how the Interpretive Bulletin might be amended to address this area of potential risk to participants and beneficiaries.”