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April 02, 2008 at 11:18 PM
Groups representing large and small benefit plan service providers are continuing to battle over proposed reporting regulations.
Witnesses squared off Monday at a hearing organized by the Employee Benefits Security Administration, an arm of the U.S. Labor Department.
The Labor Department has issued proposed regulations that call for benefit plan providers to give employers far more information about matters such as compensation, but the department has given only general guidelines about how much detailed information providers of “bundled” services ought to disclose.
Bruce Ashton spoke for the American Society of Pension Professionals & Actuaries, Arlington, Va., and the Council of Independent 401k Recordkeepers, Arlington, groups that tend to represent smaller providers of “a la carte” services,
The Labor Department ought to require all plan providers to break out investment fees and expenses, transaction fees, and expenses, and record-keeping and administrative fees and expenses, Ashton said.
“In the small plan market, this type of disclosure would be essential to provide the most meaningful disclosure to decision makers,” Ashton said.
Larry Goldbrum, general counsel spoke for the SPARK Institute, Simsbury, Conn., a group that represents insurers, banks, mutual fund companies and other companies that tend to provide bundled services.
“The retirement plan and investment industries are very competitive and dynamic, so no single form or methodology can adequately address the diversity of products and service structures without favoring one segment of the industry over others,” Goldbrum warned.
Mandating rigid disclosure requirements could increase costs for service providers and plan participants, Goldbrum added.
Goldbrum noted the department said in the proposed regulations that bundled providers would not have to unbundle their services and disclose the internal allocation of fees among affiliated companies.
