“The majority of the changes that were made were to facilitate administration,” Bradford P. Campbell of Schiff Hardin LLP, formerly assistant secretary of labor for Employee Benefits and head of the Employee Benefits Security Administration (ERISA), told PLANADVISER. “They are generally positive changes. I also think that the department was wise to propose in a separate rule the summary disclosure.”
Campbell added, “I think one area where the change is kind of interesting is the way they [DoL] is asking plans to respond to failure to disclosure. They are almost commanding it now.”
Roberta J. Ufford of the Groom Law Group told PLANADVISER the final rule has not changed much from the interim rule, but a couple of clarifications the DoL made are very helpful. One of the biggest clarifications is the additional information requirement. This new requirement asks for a description of the arrangement between the payer and the covered service provider who is receiving the compensations.
Ufford said there are a couple different ways plan advisers can prepare to be in regulation with the final 408(b)(2). She said plan advisers will have to look at their contractual materials, disclosures and their own arrangements to ensure they are complying with the rule
“A plan adviser, especially if the adviser generally assists the plan sponsor in reviewing other plan services, should be prepared to help their plan sponsor clients in implementing the new rules,” Ufford said. “The plan adviser will probably be expected to help their plan sponsor clients comply with these rules.”
Campbell said the bulk of the final rule falls on the plan adviser. “They need to make sure they have their disclosure houses in order. I think most service providers are going to be able to comply with the July 1 deadline, because most of the changes are relatively minor.”
Campbell concluded, “I’m glad to see this regulation concluded. I initially proposed this regulation back in 2007. I think in general, the regulation looks a lot like where we were at the end of the Bush Administration. I think most folks are comfortable with the actual content of these disclosures. I think it is a big achievement. I think the department did an overall good job.”