Eleven organizations representing retirement and financial industries have asked the federal government to reconsider proposed regulations outlining how service providers should create a fee-disclosure guide for defined contribution plans.
The organizations, including the American Benefits Council and ERISA Industry Committee, say proposed regulations issued by the Department of Labor in March lack a statistical foundation to prove such rules are necessary.
The Labor Department should refrain from issuing final regulations “until it determines whether any changes to the (fee) disclosure regulation are needed,” said a letter sent Monday by the organizations to the Office of Management and Budget, which must sign off on new regulations from federal agencies, and to the Department of Labor.
Without what they say is adequate DOL research, industry representatives have complained since last year that the DOL is putting the cart before the horse in proposing rules for providers to create a guide that sponsors can use in displaying fee-disclosure information. The proposed regulations cover Section 408(b)(2) of the Employee Retirement Income Security Act.
The DOL issued proposed regulations in March 2014, seeking public comment. Many organizations representing the retirement industry responded angrily.
On Dec. 5, the DOL issued a request for information on how it could conduct focus groups to assess the effectiveness of the fee-disclosure regulations. The deadline for comment was Monday, a time frame criticized by the 11 organizations writing to OMB and DOL.
“The comment period … is only 30 days, falling during the holiday season, when gathering the views” of organizations such as the Plan Sponsor Council of America, SPARK Institute and U.S. Chamber of Commerce, the Monday letter said.
“The focus group research should be conducted and the results made public before the Department (of Labor) issues a proposed rule,” the letter said. After results are publicized, the DOL should “release a new proposal or reopen the comment period on its current proposal.”