'Guide' Must Accompany 408(b)(2) Disclosures, DOL Proposes

By Craig Hoffman • April 11, 2014 • 0 Comments

The Department of Labor released its long-promised proposal to require that a guide or summary accompany a covered service provider’s 408(b)2) disclosures on March 11. The final 408(b)(2) regulations, which became effective July 1, 2012, left this question open, with the DOL promising to revisit the issue in the future. Release of the March 11 proposed rule makes good on that promise.

Under the proposal, a “guide” must be provided as a separate document accompanying the initial disclosure of 408(b)(2) information, when there is an extension or renewal of the contract or when there is a change in the information that must be disclosed. It must specifically identify the underlying document where the 408(b)(2) disclosures can be found and provide “a page [number] or other sufficiently specific locator, such as a section, that enables the responsible plan fiduciary to quickly and easily find the [required] information.”

This “roadmap” requirement, where a page and/or section number must be provided, was not unexpected — the 2012 final regulations included a sample guide that the DOL indicated could be used on a voluntary basis to assist plan fiduciaries. In response to the roadmap approach, many commentators suggested that the technology to meet such a mandate will be costly. Interestingly, the proposal abandons the idea of requiring a chart or some other type of summary format in which the relevant information is reproduced for easy review by the plan fiduciary.

The proposal is now open for public comments, which must be filed by June 9, 2014. The ASPPA Government Affairs Committee will be reviewing the proposal closely and providing input to the DOL. It is likely that a public hearing will follow. The preamble indicates that the regulations are proposed to become effective one year after they are released in final form. As a result, it would be surprising if any new requirement could take effect before late next year.


Craig Hoffman is ASPPA’s General Counsel.