Long-pending proposed Department of Labor regulations to enhance 401(k) fee disclosure requirements have been put on hold to give Rep. George Miller, D-Calif., more time to try to pass legislation on the subject.
But some Washington insiders don't expect the DOL to sit on its hands forever.
The DOL's intentions are a hot topic now because regulations on fee disclosure by service providers were supposed to be unveiled by the end of May.
The regulations, according to ERISA attorneys, have been approved by the White House's Office of Management and Budget.
Nonetheless, Labor Department officials have been keeping the regs under wraps while Mr. Miller attempts to attach his own, more comprehensive, 401(k) fee disclosure legislation to bills moving through Congress.
“At some point we will move forward, but we need to evaluate what is happening on the Hill and whether the legislation is in play,” said Phyllis Borzi, assistant secretary of labor for the Employee Benefits Security Administration, at a June 30 meeting of the DOL's ERISA Advisory Council.
Kevin Wiggins, an ERISA attorney for Thorp Reed & Armstrong LLP, Pittsburgh, and a member of the ERISA Advisory Council, agreed: “There is no question that the DOL is going to defer to legislative initiatives for the time being.”
Said David Wray, president of the Profit Sharing/401(k) Council of America, Chicago: “It's standard practice for a regulatory agency to defer from promulgating a regulation that might be affected by the legislation until after the legislation is decided.”
But Bradford P. Campbell, former assistant secretary of labor for the Employee Benefits Security Administration and now of counsel to the law firm Schiff Hardin LLP, Washington, predicted the DOL would issue its fee-disclosure regulations by the end of July.
“The handwriting is on the wall,” Mr. Campbell said. “There simply aren't enough legislative days and viable legislative vehicles for the Miller legislation to proceed.”
Added Elizabeth Varley, managing director, government affairs of the Securities Industry and Financial Markets Association, Washington: “I understand the regulations have been released by OMB and that they are pending at the Federal Register, but we do not know when they will be published.”