Relief is on the way for retirement plan sponsors struggling to comply with new fee disclosure and conflict of interest rules.
The Department of Labor's Employee Benefits Security Administration announced Friday it intended to extend the compliance due date for new disclosure rules under section 408(b)(2) of ERISA to Jan. 1, 2012. The rules were to originally be in place by July 16, 2011.
The department published an interim-final regulation on July 16, 2010, requiring certain service providers to employee pension benefit plans to disclose information to assist plan fiduciaries in understanding the “reasonableness of the fees being charged for plan services and assess potential conflicts of interest that might affect the quality of those services.” The rules were to take effect in one-year’s time.
DOL emphasizes in its announcement that it intends to extend the date, but is still waiting on final approval. Until that happens, the date for new requirements is still on or after July 16, 2011.
"The department intended to have final rules in place sufficiently in advance of the July 16 applicability date to avoid compliance problems for both plans and their service providers," Phyllis Borzi (left), assistant secretary of EBSA, said in a statement. "Given the need to ensure a careful review of all the valuable input we received on the interim final rule, including suggestions for a summary document to further assist plan fiduciaries in their review of furnished information, we now believe plans and plan service providers would benefit from an extension of the rules applicability date.
"An extension of the applicability date to Jan.1, 2012 will ensure that we have the time we need to get the final rule right and that plans and their service providers have the time they need to undertake orderly and efficient compliance efforts following publication of the final rule.”