Concerns Grow Over 408(b)(2) Summary Guide Proposal
Concerns about the impact and usefulness of the 408(b)(2) summary guide rule the DOL proposed in March are building and coalescing. Groups representing large plan sponsors and advisors have expressed concern about the proposal. And earlier this year, a coalition of industry groups that includes SPARK, which represents record keepers and DCIOs, was equally apprehensive about the new rules. The coalition questioned whether the DOL is trying to solve a problem that does not exist, and increasing costs in the process.
ERIC, which represents larger plans, is concerned that the DOL’s focus on small plans may lead to a rule that does not apply to their members — employers that generally have a team of sophisticated people with access to outside experts — and that for them the new rule would add costs but few benefits.
The Retirement Advisor Council (RAC), made up of plan advisors and the broker dealers and providers that support them, questions whether a written disclosure would really help smaller plans that rely on their plan advisor to decipher these types of disclosures. RAC recommends that the DOL solicit feedback from plan advisors in one-on-one interviews rather than focus groups with small plan sponsors, as the DOL is doing.
Fred Barstein is the Portal Conductor of the NAPA Service Providers Station. He is also NAPA Net’s Editor in Chief.