Retirement plan fiduciaries have until April 1, 2012, to comply with interim final rules on fee disclosure by service providers, and defined contribution plan executives gain more time to inform participants, under rules announced Wednesday by the EBSA.
The interim final rule from the Employee Benefits Security Administration gives plan fiduciaries three additional months to get information from service providers on fees and potential conflicts of interest. In June, EBSA had proposed a Jan. 1, 2012, deadline but after receiving public comments asking for more time and for closer coordination with participant disclosure deadlines, EBSA agreed that the extended time would allow providers more time and better serve participants, according to a notice posted on the EBSA website.
Plan sponsors now have the choice of two deadlines for informing participants: 60 days after the first day of a plan year beginning on or after Nov. 1, 2011, or 60 days after the April 1, 2012, deadline for 408(b)(2) fiduciary disclosure, whichever comes later. Disclosure is required for all participants and beneficiaries who have the right to direct their investments.
“We're encouraged that they listened to us,” said Craig P. Hoffman, general counsel and director of regulatory affairs for the American Society of Pension Professionals & Actuaries, in an interview. “But we're still concerned that April is not enough time.”
The bigger question looming over plan sponsors and service providers is what the final fee disclosure rule will look like, since it has not yet been proposed by the EBSA, Mr. Hoffman said. “That's the biggest uncertainty. It's hard to comment on something when we don't know what's going to be in the final version,” he said.
EBSA intends to publish a final 408(b)(2) rule before the end of the year, “and does not expect that the changes … are likely to require more additional time for compliance,” the agency's notice about the rules states.
The EBSA announcement is available at www.dol.gov/ebsa/pdf/extensionofapplicabilitydatesfinalrule.pdf.