The U.S. Department of Labor (“DOL”) continues to roll out regulations focused on plan fee disclosures.  Last week, the DOL published a proposed amendment to the 2012 final rule proposing to make mandatory a guide for covered service providers to include with their ERISA Section 408(b)(2) disclosures to plan fiduciaries.  In its Fact Sheet accompanying the proposed amendment, the DOL stated that since publication of the 2012 final rule which attached a guide as a “sample,” it has been reviewing service providers’ disclosures and plan fiduciaries’ experiences in receiving the disclosures as well as comments, and concludes that a required guide is warranted.  The DOL asserts that the proposed guide will assist plan fiduciaries in obtaining the information required to assist in evaluating the reasonableness of the compensation to be paid for plan services and potential conflicts of interest that may affect the performance of those services.  It characterizes its current renewed effort to require a guide as “provid[ing] clarity and specificity, while avoiding the uncertainty and burdens that . . . may accompany construction of a ‘summary’ of existing documents.”

The proposed guide, akin to a table of contents, must specifically identify the document, page, section, or other specific locator, to enable the plan fiduciary to quickly and easily find the following information:

  • The description of the services to be provided;
  • The statement concerning services to be provided as a fiduciary and/or as a registered investment advisor;
  • 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 recordkeeping and brokerage services, including annual operating expenses and ongoing expenses, or if applicable, total operating expenses. 

Other provisions of the proposed rule concern format, and the frequency with which updates to this information would be required to be provided (e.g., annually or as changes occur).  Written comments to the proposed rule must be received by the DOL before June 10, 2014.