While 401(k) record keepers and service providers are combing through the 408(b)(2) fee disclosure rules with a fine-tooth comb, looking for potential compliance problems, plan sponsors have adopted a wait and see attitude.
During a recent webinar, Fred Reish, partner and chairman of the financial services ERISA team at Drinker Biddle & Reath LLP, expressed concern that the new rules didn’t include a summary or road map requirement like was first discussed, but instead proposed the issuance of a guide.
“I’ve heard from a lot of you, you are struggling with these issues and trying to come up with a workaround. Until there is some further guidance, provide what you can based on what you know and exercise control over at the time of the disclosure to avoid a technical breach.”
Craig Hoffman, ASPPA’s general counsel and director of regulatory affairs, said at the ASPPA conference in New Orleans that, his organization also is concerned with how the definition of designated investment alternative is applied in the context of a model portfolio application. In particular ASPPA is worried about how that plays out into participant level fee disclosure, where more information is needed on each designated investment alternative and the calculation of some of the benchmarks and earnings history is more difficult when dealing with a model portfolio. Another concern is how far service providers have to go to disclose non-monetary compensation.