Regulators are giving retirement plan service providers more time to meet new fee disclosure requirements.
The Employee Benefits Security Administration (EBSA), an arm of the U.S. Department of Labor today published a disclosure rule compliance extension proposal notice in the Federal Register.
The EBSA notice affects compliance with “interim final” fiduciary-level fee disclosure rules that were published in July 2010.
The 408(b)(2) disclosure regulation will require retirement plan service providers to disclose comprehensive information about their fees and potential conflicts of interest to plan fiduciaries.
EBSA is planning to push back the compliance date for the interim rule to Jan. 1, 2012. The original effective date was July 16, 2011.
EBSA also published a participant-level disclosure rule that was published in October 2010. That rule will require employers to disclose information about plan and investment costs to workers who direct their own investments.
The participant disclosure rule is supposed to take effect for plan years beginning on or after Nov. 1. EBSA was going to give employers 60 days after the start of the plan year to comply. EBSA is now plans to give employers 120 days to provide the participant-level disclosures, officials say.
EBSA is changing the compliance dates to help employers and their service providers mesh compliance with the fiduciary and participant-level disclosure rule changes, EBSA officials say.
Comments on the proposed extensions are due June 15.
The SPARK Institute, Hartford , is welcoming news of the proposed compliance date postponements.
The new EBSA notice is “a positive development,” says Larry Goldblum, general counsel of the SPARK Institute.
The pension services vendors represented by SPARK are glad that EBSA officials recognize that the 408(b)(2) and the participant disclosure regulation need to be coordinated, Goldbrum says.
The rules are “big priorities” with vendors “because both of those rules are going to require that service providers and plan sponsors start to provide a lot more information,” Goldbrum says. “Understanding what the rule is and having enough time to comply are absolute priorities for retirement plan vendors.”
But what vendors “are really waiting for are for the final 408(b)(2) regulations to be released, so that we then can determine if the extension they have provided is long enough,” Goldburm says.