The Department of Labor has proposed that service providers create a guide for defined contribution plans to identify where fee-disclosure information is located.
When the DOL enacted fee-disclosure rules in mid-2012, it allowed service providers “the flexibility to satisfy their disclosure obligations using different documents from various sources as long as the documents, collectively, contain the required disclosures,” said a DOL summary of its latest proposal.
Now, the DOL wants providers “who make their disclosures through multiple or lengthy documents to furnish a guide to such documents,” said the summary of the proposed rule amending Section 408(b)(2) of the Employee Retirement Income Security Act.
“The guide must specifically identify the document, page, or, if applicable, other sufficiently specific locator, such as section, that enables the responsible plan fiduciary to quickly and easily find the specified information, as applicable to the contract or arrangement,” the DOL said.
The guide also “must direct the fiduciary to the place in the disclosure documents where the fiduciary can find” the following information:
- “the description of services to be provided”;
- “the statement concerning services to be provided as a fiduciary and/or as a registered investment adviser”;
- “the description of: all direct and indirect compensation, any compensation that will be paid among related parties, compensation for termination of the contract or arrangement, as well as compensation for record-keeping services”; and
- “the required investment disclosures for fiduciary services and record keeping and brokerage services, including annual operating expenses and ongoing expenses, or if applicable, total annual operating expenses.”