The Office of Management and Budget (OMB) has received a proposed regulation from the Department of Labor regarding the development of a “Guide or Similar Requirement for Section 408(b)(2) Disclosures,” which could spell additional expense for retirement plan service providers, says ERISA guru Fred Reish.
Reish (left), partner and chairman of the Financial Services ERISA Team at Drinker Biddle & Reath in Los Angeles, notes that while it’s not the DOL’s re-proposed fiduciary rule, which he expects to be at OMB in a matter of weeks, this proposed fee-disclosure reg “could have a material impact on the retirement plan community.”
While the retirement planning community won’t know what the proposed regulation says for about three months—when the OMB approves and releases the proposed regulation—Reish says, DOL “has previously given us an idea about their thinking.”
When the DOL issued the final 408(b)(2) regulation last February, it included a “Sample Guide to Initial Disclosures,” Reish says, which was not mandated, “but instead was offered as an aide.”
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The DOL explained in the preamble to the final regulation that “Although the Department is not adopting such a requirement [for a guide] at this time, the Sample Guide published today may be useful, on a voluntary basis, to covered service providers as a format to assist responsible plan fiduciaries with the required disclosures.”