DOL Withdraws Rule Requiring Fee Disclosure Guide
The Department of Labor’s Employee Benefit Security Administration (EBSA) has announced
that it is withdrawing a rule requiring that employers provide a guide or similar material along with fee disclosures.
The Obama administration had issued
a notice of proposed rulemaking about the requirement on March 12, 2014. It would have required covered service providers to furnish a guide or similar tool with fee disclosures. It was intended to assist fiduciaries — especially those serving small and medium-sized plans — in identifying and understanding potentially complex disclosure documents provided to them.
EBSA withdrew the rule in accordance with President Trump’s order that federal regulations be reviewed, and with the administration’s effort to reduce regulatory burdens.
While EBSA has withdrawn this rule, it is important to note that the requirement under Section 408(b)(2) of ERISA that plans make certain disclosures
, including those concerning fees, remains in force. Therefore, while a plan is not required to provide a guide about fees, it still must provide disclosures.
In addition, the filing notes that withdrawal of an entry does not necessarily mean that EBSA will not proceed with the rulemaking in the future. Rather, it explains that withdrawal “allows EBSA to assess the subject matter further and determine whether rulemaking in this area is appropriate,” and that following such an assessment, “EBSA may determine that rulemaking is appropriate.” If that determination is made, this or a similar matter will be included in succeeding semiannual agenda, according to the notice.