DOL requests public feedback on SECURE 2.0 disclosure provisions

The Department of Labor is seeking public feedback on a host of disclosure-related SECURE 2.0 provisions that will impact defined contribution, defined benefit and pooled employer plans.

The department's Employee Benefits Security Administration on Thursday unveiled a lengthy request for information that covers nine sections of SECURE 2.0, a comprehensive retirement security bill Congress passed in December. The bill, which featured more than 90 provisions, directed EBSA to enact and oversee a number initiatives, including several disclosure-related items on which the agency is now requesting public input.

In its request for information, EBSA laid out 31 detailed questions. The public will have 60 days to respond upon publication in the Federal Register, which is slated for Friday.

EBSA is seeking feedback on the following provisions:

• Sec. 344 requires the department to study the pooled employer plan industry and report to Congress. In the RFI, EBSA is requesting ideas about how to construct such a study.
  
• Sec. 127 permits DC plan sponsors to offer short-term emergency savings accounts. EBSA's questions include, what guidance, if any, do plan administrators need to effectively implement the requirements of section 127?
  
• Sec. 318 directs the Labor Department to update its regulations so that an investment that uses a mix of asset classes can be benchmarked against a blend of broad-based securities market indices, provided (a) the index blend reasonably matches the fund's asset allocation over time, (b) the index blend is reset at least once a year, and (c) the underlying indices are appropriate for the investment's component asset classes and otherwise meet the rule's conditions for index benchmarks, according to a Senate Finance Committee bill summary. EBSA wants to know if there are additional factors that plan administrators should use to ensure they can effectively select and monitor, and participants and beneficiaries can effectively understand and utilize, blended performance benchmarks for mixed asset class funds.
  
• Sec. 340 requires the department to review its fiduciary disclosure requirements in participant-directed individual account plan regulations and report to Congress. EBSA is asking stakeholders how the disclosure system currently works and how it can be improved.
  
• Sec. 320 stipulates that employers no longer have to provide certain intermittent ERISA notices to unenrolled participants who have not elected to participate in a workplace retirement plan. Among the questions EBSA has on this topic: "Are there additional criteria that the department, in consultation with the Treasury Department, should consider for determining who is an unenrolled participant?"
  
• Sec. 338 stipulates that a DC plan must, unless a participant elects otherwise, provide a paper benefit statement at least once annually. DB plans must do the same once every three years. The Labor Department needs to update its regulations by the end of 2024 and is asking stakeholders what modifications or updates are needed.
  
• Sec. 341 directs the Treasury and Labor departments to amend regulations to permit a plan to consolidate certain required plan notices. Among the questions EBSA has on this section, "What are the perceived legal impediments to consolidation under current law and regulations?"
  
• Sec. 342 requires plans to provide plan participants and retirees with information to compare between benefits offered under the plan and the lump sum, and would explain how the lump sum was calculated, the ramifications of accepting a lump sum, such as the loss of certain federal protections, details about the election period, and where to follow up with questions, according to the bill summary. EBSA wants to know, among a variety of questions, if additional guidance is needed for plans before the provision takes effect.
  
• Sec. 343 modifies the content requirements for DB plan annual funding notices. EBSA is asking stakeholders if additional guidance is warranted and if ERISA's model notice for single-employer DB plans needs to be updated.