With Acosta Waiting in the Wings, Council Gets to Work

By Ray Harmon • March 24, 2017 • 0 Comments

On March 22, while Alexander Acosta faced his confirmation grilling in the Senate, the ERISA Advisory Council (EAC) had its first meeting of the Trump administration era, setting its 2017 agenda around improving plan disclosures.

The 185th EAC meeting opened with introductions of five new members beginning their two-year terms on the Council:

  • Douglas L. Greenfield, Partner, Bredhoff & Kaiser, P.L.L.C., Washington D.C., representing employee organizations;
  • Robert A. Lavenberg, Partner, BDO USA, LLP, Philadelphia, PA, representing accounting;
  • Marjorie F. Mann, Senior Attorney, Florida Power & Light, Juno Beach, FL, representing employers;
  • Colleen E. Medill, Robert and Joanne Berkshire Family Professor of Law, University of Nebraska College of Law, Lincoln, NE, representing the general public; and
  • Srinivas Dharam Reddy, SVP, Head of Full Service Investments, Prudential Financial, Hartford, CT, representing insurance.
Acting Assistant Secretary of Labor for the Employee Benefits Security Administration (EBSA) Timothy Hauser then reported on the latest developments at EBSA. Hauser said that EBSA recovered approximately $780 million for plan participants through its 2016 enforcement efforts. He stressed that, because EBSA is small, its emphasis remains on larger cases to maximize its impact.

Fiduciary Rule

Hauser addressed the president’s February memorandum that begat the proposed rule to delay the applicability date of the fiduciary rule and drove DOL’s request for public comments on the rule’s impact on investors, advisers, and plan litigation. He said that at his last count, they have received 190,000 comments on the recent proposed rule to delay the applicability date of the fiduciary rule, 1,100 of which were not the result of electronic petitions. And he noted that by April 17, a whole new round of comments is expected. “We take this exercise very seriously and will do our level best to make sure all comments are considered,” he added.

Hauser affirmed, in response to a question, that the DOL will be holding compliance assistance seminars around the country this year, saying that the DOL’s national and regional employees are scheduling sessions to help practitioners understand their fiduciary responsibilities.

Holdover Proposals

Hauser did not discuss the DOL’s new regulatory agenda for 2017, since a new secretary and assistant secretary will set those priorities when they are installed. None of the DOL’s holdover projects garners more attention than the regulation to define who a fiduciary adviser is to benefit plans.

Hauser emphasized that new leadership will affect the direction of the modernization of Form 5500, another holdover proposal. The data currently requested on the form doesn’t really line up with contemporary plans, with the “other” field often being a popular selection among filers, he quipped. Hauser emphasized that the aggregated cost of revising the forms is very large, so the DOL will be looking at comments received and the potential burdens imposed.

Focus on Disclosure

Members turned to Hauser, DOL Office of Regulations and Interpretations Director Joe Canary and Lou Campagna, head of the DOL’s Division of Fiduciary Interpretations, for advice regarding the Council’s own mission for the year. Hauser noted that “disclosure issues are where we could use some help reducing the burden and determining which aren’t really performing their functions” like they should be. The Council agreed to assist the DOL by surveying the many required disclosures in retirement plans and health and welfare plans, reviewing which ones might require revisiting — with an eye towards Summary Plan Documents as one likely target — and exploring potential innovations in communicating such disclosures to participants.

The next EAC meeting will take place in June.

Ray Harmon, Esq. is government affairs counsel to ASPPA.