For Immediate Release: May 31, 2011
US Department of Labor to extend and align applicability dates for retirement plan fee disclosure rules
WASHINGTON – The U.S. Department of Labor's Employee Benefits Security Administration has announced that it will publish in tomorrow's Federal Register a notice proposing to extend and align the applicability dates for its retirement plan fee disclosure rules.
The department published an interim final 408(b)(2) regulation on July 16, 2010, requiring retirement plan service providers to disclose comprehensive information about their fees and potential conflicts of interest to plan fiduciaries. Although the new requirements are scheduled to apply to plan contracts or arrangements for services in existence on or after July 16, 2011, the department previously announced its intention to extend the deadline to Jan. 1, 2012. Today's proposal, when finalized, would make the extension official. The department recognizes that because a final rule is not yet in place, service providers may need additional time for compliance.
The department also published a final participant-level regulation on Oct. 20, 2010, requiring that employers disclose information about plan and investment costs to workers who direct their own investments. This regulation applies for plan years beginning on or after Nov. 1, 2011, with a 60-day transition provision. The department's proposal would amend the regulation's transitional rule so that employers would have up to 120 days to furnish initial disclosures to workers. This amendment will ensure that employers obtain the information they need from service providers in order to satisfy their disclosure obligations to their workers.
"We want employers and workers to benefit from the increased transparency provided by these rules as soon as possible," said Phyllis C. Borzi, assistant labor secretary for employee benefits security. "But we also appreciate that service providers may need more time for compliance efforts, because they have not yet seen a final Employee Retirement Income Security Act Section 408(b)(2) regulation. This action will provide that plan fiduciaries have all required information from service providers before they must disclose information to their workers, ensuring that workers receive accurate information about their retirement plan and investment costs."
Additional information about the fee disclosure regulations is available on EBSA's Web pages at http://www.dol.gov/ebsa. Questions from the public concerning the applicability date and the final rule may be directed to Jeffrey Turner at 202-693-8500.
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