DOL Update

Update:
·     The regs are being issued in two parts
·     First part concerns the obligations of service providers to the fiduciaries
·     Second part is the obligation of the fiduciaries to the beneficiaries
·     First part out now, Second part in a few months and they are pending at the White House Office of Management and Budget
·     The purpose of the first part regs are to make sure that the fiduciaries are aware of the costs of the plans. It requires the vendors to fully disclose the costs
·     Covered service providers include those who may not be responsible for the investing. It could someone who has a contractual relationship with the plan to help the plan or the investors.
·     Covered service providers include registered investment advisors, record keeping and brokerage providers, accounting, legal, actuarial, and custodial providers
·     Disclosures include the services, the status and role of the provider, the compensation direct and indirect, related party compensation, and termination provisions
·     The obligation is on the service provider
·     Where there are bundled fees, there needs to be a good faith effort to distinguish the components
·     The plan sponsors will not automatically be held accountable for failures of the service providers to properly disclose
 
Links to further information:
 
The Interim Final Rule (including an explanatory pre-amble): http://www.dol.gov/federalregister/HtmlDisplay.aspx?DocId=24028&AgencyId=8&DocumentType=2

Fact Sheet: http://www.dol.gov/ebsa/newsroom/fsimprovedfeedisclosure.html

Transcripts from the hearing EBSA held in 2008: March 31, 2008 Hearing Transcript <http://www.dol.gov/ebsa/pdf/408b2transcript033108.pdf> , April 1, 2008 Hearing Transcript <http://www.dol.gov/ebsa/pdf/408b2transcript040108.pdf> – You can also find links to individual testimony here: http://www.dol.gov/ebsa/regs/cmt-408(b)(2)-combined.html#section4 in case you are looking for submissions from a particular group or person.
 
Regulations.gov public docket folder on the rule: http://www.regulations.gov/search/Regs/home.html#docketDetail?R=EBSA-2007-0047 (If you check the “Public Submissions” box in the “Document Type” options in the middle of the page, then you can see all the comments that EBSA received on the Proposed Rule published by the previous Administration. As comments are received that relate to the Interim Final Rule they will be published here as well.)