Larry Goldbrum, general counsel of The SPARK Institute, said in a press release that nearly three quarters of the service providers responding to the survey said they need additional time and guidance in order to accurately comply with the new rules.
“In some instances, according to our survey, respondents were equally split on key reporting issues,” Goldbrum said, in the release. “Consequently, different interpretations and reporting practices will result in inconsistent and unreliable data and significant resources will be spent on making systems changes that will be of little or no value to plan sponsors, the DOL or anyone else that uses the data.’
According to Goldbrum, nearly 80% of the survey respondents said they expect to make systems changes to accommodate the new regulations, and a significant number are unsure whether they will be ready in time to meet the current deadline.
Goldbrum also noted that the new regulations will have an impact on plan sponsors. “A significant majority (58%) of respondents reported that they are changing their 5500 service offering as a result of the new requirements, and many (32%) will charge an additional fee for the service,’ Goldbrum said. “More than two-thirds (68%) of the service providers surveyed also said they expect that plan sponsors will have to collect some required data that was not required of them in the past.’
Last July, federal regulators have released additional guidance about new rules for reporting service provider fees and compensation on Schedule C of Form 5500 for plan years beginning on or after January 1, 2009 (see “EBSA Issues Schedule C Fee Disclosure Guidance’).
In addition, many 403(b) sponsors will have to complete full Form 5500 reporting for the first time under new regulations effective January 1 (see “403(b) Plans to File Full Form 5500’).