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News August 15, 2005 Issue

ICI Continues Fight Against LM-10

For a second time, the Investment Company Institute has met with DOL officials regarding the controversial Form LM-10, which is required to be filed by "employers" that provide gifts to Taft-Hartley plan officials.

On July 26, ICI representatives met with DOL assistant secretary Victoria Lipnic and other DOL officials. Two days later, they submitted a letter reiterating ICI membersí concerns.

While the ICI acknowledged that the definition of "employer" under the Labor-Management Reporting and Disclosure Act could be read to encompass any entity with at least one employee, the group questioned DOLís legal authority to enforce the LM-10 reporting requirement. The ICI noted that the "structure of the statute as a whole indicates that it was intended to cover only payments by employers having some connection to their own employees." If Congress had intended the statute to apply to service providers, they argued, it presumably would not have limited the statuteís scope to service providers that are also employers.

The ICI urged DOL not to require retroactive reporting and instead apply any new filing requirement for service providers prospectively (no earlier than fiscal years beginning on or after January 1, 2006). The group also asked DOL to address the issues via rulemaking, so as to provide advance notice and opportunity to comment.

DOL is expected to issue revised LM-10 guidance in the next week or two.