| March 11
March 11 The U.S. Department of Labor on Tuesday
proposed a rule requiring pension plan service providers to
offer a guide to help employers navigate disclosures about fees
and potential conflicts of interest.
The proposal amends a 2012 regulation that forced service
providers to present detailed information about fees and
services associated with 401(k)s and other retirement plans.
However, the Labor Department said it feared that such
disclosures were getting lost in lengthy, complex documents.
Officials said small employers that sponsor retirement plans
are of particular concern because they typically face the
biggest challenges in trying to untangle mandatory fee
"Much like a roadmap, a guide can help employers locate fee
information, which will help them better understand what they
are being charged by financial services providers," said Phyllis
Borzi, assistant secretary for the department's Employee
Benefits Security Administration.
In recent years, the department has been trying to call
attention to fees and other practices that could slowly eat away
at workers' retirement savings.
Borzi said the department had anticipated the need to make
certain adjustments after the 2012 disclosure rule took effect.
She said the guide could ultimately appear in a different
format, such as a summary, but she acknowledged it would be
difficult to shorten or streamline the disclosures themselves.
Typically 401(k) plans offer multiple investment options,
each of which is also subject to separate disclosure rules from
other regulators, such as the U.S. Securities and Exchange
Commission, Borzi said.
The department's proposed requirement would apply only to
service providers that issue multiple or long documents.
The department expects the Federal Register to publish the
plan on Wednesday, after which the public may send in comments
for 90 days.
The plan can be viewed at www.dol.gov/find/20140311/.