June 08, 2012
--- What regulatory changes are in store for retirement
The answer that comes to mind
immediately is the upcoming fee disclosure rules. Bruce Ashton, partner
at Drinker Biddle & Reath LLP, told attendees of the 2012 PLANSPONSOR
National Conference that the requirement for retirement plan fiduciaries to
evaluate plan fees is not new, there is just a stronger framework now that
sponsors are required to get fee information from providers.
Roberta J. Ufford, principal
at Groom Law Group, Chartered, noted that retirement plan sponsors are not
only required to get fee information from plan providers, but they must make
sure the information they receive is complete and evaluate the fees for
reasonableness. The 408(b)(2) regulations say if plan sponsors do not receive
all the required information from a provider, they must ask for it, and if they
do not receive it after 90 days, sponsors must notify the Department of Labor
(DOL) and fire the provider.
When it comes to participant
disclosure rules under 404(a)(5), Ashton recommended plan sponsors carefully
review the answer to question 30 in the recent FAQs issued by the DOL, which
relates to the treatment of brokerage windows. (See “DOL’s
Answer in Fee Disclosure Guidance ‘Surprising.’ ”) He said the
answer provided clarity, but can be confusing.
Ufford also reminded conference
attendees that if they want to provide fee disclosure information to participants
electronically, they must have affirmative consent from participants.