March 11 (Reuters) - 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 disclosures.
“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/.