On Tuesday, March 11, 2014, the Department of Labor (DOL) issued a proposed rule (see the News Release) that would require pension plan service providers to furnish employers and other plan fiduciaries with a guide to assist them in navigating fee disclosure documents. Plan consultants and sponsors alike have been flummoxed by the wave of new paper being shoved in front of them by service providers in their attempt to comply with the 408(b)(2) fee disclosure regulations.
Unfortunately, a number of providers have done only what is required to comply with the regulations, and their disclosures have contained vague references to long lost contracts. This type of 'letter of the law' compliance effort has not effectively furthered the DOL's goal of allowing plan sponsors to evaluate fee reasonableness.
Judging reasonability is already a difficult task when access to data is easy. When sponsors are required to collect, aggregate, and analyze schedules under differing formats, this task is nearly impossible. If implemented, a required guide would be a welcome step in improving fee transparency.
Text of the proposed rule is available at www.dol.gov/find/20140311.
While we wait through the comment period, plan sponsors can access our white paper, A Guide to Retirement Plan Fees and Expenses, by clicking the button below.
