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E-Disclosure, MEP Proposals Coming Soon, DOL Official Says

Practice Management

A senior Labor Department official suggests keeping an eye out for proposed guidance addressing electronic disclosure of retirement plan information. 

Jeanne Wilson, Principal Deputy Assistant Secretary with the Department of Labor’s Employee Benefits Security Administration (EBSA), said the agency would soon be issuing a proposal that follows up on President Trump’s 2018 Executive Order directing the agency to improve the effectiveness of and reduce the cost of retirement plan disclosures.  She made her remarks on July 23 at the seventh annual NAPA D.C. Fly-in Forum.

Noting that efforts on this front are a work in progress, Wilson stated that, “EBSA understands this is an important issue to the retirement plan community and modernizing retirement plan communications is also important to this administration,” as the more than 200 elite advisor delegates at the event broke into applause.
Several times during her prepared comments Wilson acknowledged the comments submitted by, and communications from, NAPA and its members.  

According to Wilson, EBSA recognizes that benefit statements, summary plan descriptions, summary annual reports, annual funding notices and claims notices can be rather confusing, lengthy and come at a considerable cost to print. Echoing comments submitted by the American Retirement Association supported by research on the subject, she further pointed to the rapid technological developments that have occurred since the DOL issued a safe harbor for electronic disclosure in 2002 as a reason to revisit the issue. 

Accordingly, Wilson explained, in response to the Labor Day weekend 2018 Executive Order, EBSA will be looking for ways to improve and simplify plan disclosures, including the “broader use of electronic delivery,” and strongly encouraged NAPA members to submit comments with additional ideas once that proposal is out for comment. 

Association Retirement Plans

Wilson also told attendees to be on the lookout for guidance to expand retirement plan options that would be primarily for small employers, consistent with President Trump’s Executive Order.  

Modeled after the Association Health Plans (AHPs) concept, the DOL in October 2018 issued proposed rules that would permit Association Retirement Plans (ARPs) and Professional Employer Organizations (PEOs) to sponsor defined contribution retirement plans for their members. 

Coincidentally, on the same day Wilson spoke, the Office of Management and Budget reportedly completed its review of the DOL’s proposed guidance, which had been submitted to the agency in June, suggesting an announcement on final regulations could come within days.  

Wilson also noted that EBSA is closely monitoring developments on Capitol Hill to provide for so-called open MEPs, including the provisions that were included in the SECURE Act that passed the House of Representatives and are currently under consideration in the Senate. 

Fiduciary Rule

Acknowledging that many in the audience had questions about the status of the fiduciary rule, Wilson explained that deregulation is not always about eliminating rules, but also about aligning rules with other agencies. 

Pointing to the SEC’s advice standards issued in June, Wilson reported that EBSA’s goal is to “proceed under a broad common framework with a proposal that is aligned with the SEC’s advice standards.” To that end, she noted that EBSA is currently working on proposal to move forward that in the best interest of consumers, as well as the regulated community.   

Other items on the DOL’s regulatory agenda include considering what additional steps the agency can take to help mitigate the risk and facilitate lifetime income options within DC plans, including amending the existing safe harbor, amending the QDIA regulations and requiring plans to provide lifetime income disclosures. 
EBSA also is looking to issue guidance further clarifying plan sponsor responsibilities regarding missing participants, but Wilson indicated there is no specific timeline currently in place.