More than two years into the regulation’s implementation, the U.S. Department of Labor wants industry and plan sponsor comment on its regulation that requires retirement plan service providers to disclose fee information to fiduciaries.
ERISA Section 408(b)(2) requires covered service providers to give fiduciaries information they need to assess the “reasonableness” of the administrators’ total compensation, identify potential conflicts of interest and satisfy reporting and disclosure requirements under the act.
ERISA demands plan fiduciaries, when selecting and monitoring service providers and plan investments, to act prudently and in the interest of participants and beneficiaries. Fundamental to the ability of fiduciaries to discharge these obligations is having enough information to enable them to make informed decisions about the plan’s services, the costs of such services and the providers.
The agency’s Employee Benefits Security Administration office is seeking public comment on its plan to conduct focus groups of plan sponsors to evaluate the effectiveness of the 2012 rule and its disclosure requirements. The request sent to the Office of Management and Budget did not provide a schedule for when the focus groups will be held. EBSA seeks to gather information about the need for a proposed guide, summary or similar tool to help plan fiduciaries navigate the often-complex disclosure documents.
EBSA also says it intends to use the focus groups’ responses to assess fiduciaries’ experiences using the 408(b)(2) disclosures and to determine how well they understand the disclosures, especially those running smaller plans, with 100 participants or fewer.
The results further will be used to support a notice of final rulemaking for a guide to these disclosures for fiduciaries.
A free copy of the information collection request with supporting documentation, including a description of the likely respondents, proposed frequency of response and estimated total time burden, can be obtained from the www.RegInfo.gov website.
OMB will accept written comments until Jan. 5, 2015, about EBSA’s information collection request, titled “Focus Groups for Evaluating the Effectiveness of Employee Retirement Income Security Act Section 408(b)(2) Disclosure Requirements.”