The amendments to the 408(b)(2) regulation mandating disclosures of compensation and conflicts of interest by retirement plan service providers “have been fully drafted” by the Department of Labor (DOL), says Fred Reish, partner and chair of the Financial Services ERISA Team at Drinker Biddle & Reath in Los Angeles, and are being reviewed by senior officials at the DOL’s Employee Benefit Security Administration (EBSA).
The interim final 408(b)(2) regulation dealing with defined contribution and defined benefit retirement plans was published on July 16, 2010, and DOL says it has received almost 50 comments. “All of those comments are being taken into account as we prepare the final rule, which will conclude this regulatory project,” a DOL spokesperson told AdvisorOne. The DOL “cannot provide detailed comment on the content of the final regulation until it is publicly released.”
Reish says it would be “reasonable to expect” that the amendments to the regulation “would be fully reviewed and approved” by the end of April, and then sent to the Office of Management and Budget (OMB) for review. “It ordinarily takes the OMB 60 to 100 days to approve regulations, so it would be reasonable to assume that the amendments would be published in mid- to late July,” Reish says.
And “rumor has it” that the amendments will include an extended compliance date, Reish says. “Right now, the amendments are effective January 1, 2012. Since the probable purpose of the rumored extension—if true—is the late issuance of these amendments, it is reasonable to assume that the new effective date would be somewhere in the range of April 1 to July 1, 2012.”