Three defined contribution industry organizations asked the Department of Labor to delay the start date for enhanced fee disclosure between providers and sponsors because the DOL has not issued final disclosure rules.
Providers are supposed to implement regulations by April 1, but the organizations say there isn't enough time for members to act because they don't know the requirements. Although industry members have been using as guidance what the DOL calls “interim final” regulations, they aren't sure how the final version will differ from the interim one.
The American Society of Pension Professionals & Actuaries, the Council of Independent 401(k) Recordkeepers, and the Investment Company Institute requested the delay. The ASPPA and council made the request in a joint letter to the DOL; ICI made its request in a separate letter.
The organizations said their members need adequate time to implement regulations governing Section 408(b)(2) of ERISA and are impeded because they don't know what those rules will be.
DC industry members had been expecting final rules to be published in late October or early November.
The ASPPA and the CIKR want implementation to take effect one year from the date the final DOL regulation is published, Craig. P. Hoffman, general counsel and director of regulatory affairs for both organizations, said in the joint letter.
“Given the delay in finalizing the regulation, significant uncertainty remains about what will ultimately be required,” he said.
Mr. Hoffman said an extension also would require pushing back the effective date of fee-disclosure regulations between sponsors and participants. Those regulations, affecting Section 404(a) of ERISA and already finalized by the DOL, are supposed to take effect May 31.
“Although our members expected that the final regulation (affecting providers and sponsors) would have been issued by now, as of this date, it has not,” said a Dec. 17 letter to the DOL from Mary Podesta, senior counsel for pension regulation at ICI.
If the final regulation “imposes new requirements … at this late date, the industry won't be able to meet the April 1, 2012, compliance date for the new requirements,” the ICI letter said. “The amount of additional time required will depend on the exact nature of any new requirements and the issues or problems that may arise.”
Joshua Lamont, a DOL spokesman, didn't respond to questions by press time.