Speaking last week at the ASPPA 401k Summit in Orlando, Florida, Michael Davis, deputy assistant secretary of the EBSA said the Department has worked on new regulations under the Employee Retirement Income Security Act section 408(b)(2), which will pertain to what information must be provided to plan sponsors about fees from service providers, including advisers.
Although he couldn’t say much about the contents of the rules, EBSA’s Davis said that the core principal of the regulations is increased transparency of 401(k) plan fees. He acknowledged the DoL had submitted a draft of the regulations to the Office of Management and Budget March 3.
Davis acknowledged that after these regulations are issued, the Department plans to issue a second rule about what fees should be disclosed, and how they should be disclosed, to plan participants. Those regulations are “not far away,” he commented.
The goal of the participant regulations is uniformity, with the intent of offering enough information about fees to “allow for participants to have an apples to apples comparison,” Davis said.
As to concerns about whether the DoL will allow for enough time to comply with the regulations, Davis said the Department wants to make sure it works with the industry, but what the actual period for implementation will be is unknown.
Changes to the 408(b)(2) provision were originally proposed under the Bush administration in 2007 (see “EBSA Releases Proposed Revisions to Provider Fee Disclosures”) and a proposed regulation governing fee disclosure to plan participants was released in 2008 (see “EBSA Issues New Participant Disclosure Regulations”).