Larry Goldbrum, SPARK General Counsel, noted that plan sponsors face potentially significant fiduciary issues if an investment provider is unable or unwilling to provide the information that the plan needs to comply with participant disclosure regulations. The Institute also announced that it has begun an initiative to help address the disclosure issues.
“Under the Department of Labor’s (“DOL”) participant disclosure regulations, plan sponsors are required to provide participants with information about all of their plans’ investment options in a single chart or similar format to facilitate the comparison of each option offered under the plans,” Goldbrum said, in a news release. “However, many investment managers and providers of non-registered investments, such as bank collective funds, separately managed accounts and annuities, may be surprised that they will have to make significant new information available in order for plan sponsors to comply with the new regulations.”
Goldbrum added: “Some non-registered investment providers may not have the information readily available, and developing the information and cost-effective methods for providing it to plan sponsors and plan recordkeepers could be complex and time consuming.”
Goldbrum said the new initiative to develop data standards for retirement plan recordkeepers and providers of non-registered investment fund providers to enable them to electronically share information with each other and with existing investment information aggregators leverages the experience and expertise SPARK has from developing information sharing standards for 403(b) plans and lifetime income solutions.
The Compliance Alert is posted on The SPARK Institute Web site at http://www.sparkinstitute.org/comments-and-materials.php.