The Department of Labor’s Employee Benefits Security Administration announced Wednesday that it will provide a Web-based tool for plan sponsors who wish to obtain fiduciary relief for a service provider’s failure to comply with the department’s plan-level fee disclosure rule, better known as 408(b)(2).
The final 408(b)(2) regulation, which took effect on July 1, includes a provision to protect plan sponsors or other responsible plan fiduciaries from liability for a breach of their fiduciary duties under the Employee Retirement Income Security Act when, unbeknownst to the plan sponsor, a service provider failed to comply with the regulation’s comprehensive disclosure requirements.
As the EBSA explains, if a plan sponsor discovers that required information has not been furnished, “the sponsor must notify the department, by regular mail or electronically, when efforts to obtain the undisclosed information from a service provider are not successful.”
The final 408(b)(2) rule continues to permit paper or electronic submissions, but enhances the existing procedures by providing a dedicated P.O. box address and a Web-based tool that EBSA says will assist plan sponsors in ensuring that all required information is submitted.
In announcing the changes, Phyllis Borzi, assistant secretary for EBSA, said the “revised submission procedures will help plan sponsors who, through no fault of their own, do not receive the disclosures promised to them by the 408(b)(2) regulation.” Borzi went on to say that “when efforts to resolve the disclosure failure with their service provider are ineffective, plan sponsors will be able to take advantage of an easy-to-use online tool that will guide them through the information that must be submitted to the department and provide immediate confirmation that their notice has been received.”
“Department staff also will be able to more efficiently receive, process and review these notices, which will in turn benefit the plan sponsors who seek relief.”
Those wishing to comment on this final amendment to the 408(b)(2) regulation may do so by Aug. 15, in accordance with instructions provided in the final 408(b)(2) rule, EBSA says. Also, EBSA says that unless “significant adverse comment is received,” the revised procedures will be effective on Sept. 14.