The Department of Labor’s (DOL) Employee Benefits Security Administration (EBSA) officially announced on May 31 the extension of the compliance dates for its retirement plan fee disclosure rules—408(b)(2) and 404(a).
But the real news in the ongoing rule 408(b)(2) saga is that because a final rule has yet to be issued by EBSA, retirement plan sponsors will likely need another extension beyond the current Jan. 1, 2012, date, says Brad Campbell counsel with the law firm Schiff Hardin in Washington and former head of EBSA.
As it stands now, the retirement plan fee disclosure rule 408(b)(2) is still in an interim final form and has yet to be handed over to the Office of Management and Budget (OMB) for review. OMB could decide to make changes to the rule before it’s published in final form.
The original effective date for compliance with rule 408(b)(2) was July 16, 2011, but EBSA pushed it back to Jan. 1, 2012.
EBSA also published a participant-level disclosure rule, 404(a), 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, but it now plans to give employers 120 days to provide the participant-level disclosures.
Comments on the proposed extensions are due June 15. The 14-day comment period gives retirement planning officials time to point out, Campbell says, “that we’re back to the same problem we were before. In February the DOL said it was going to extend 408(b)(2) [compliance] because they still haven’t put out the final regulation” and because DOL was probably going to make changes to the rule, which “everyone thinks will be to add a summary disclosure requirement,” among other changes.