Just ahead of the Thanksgiving holiday, industry headlines
proclaimed that the long-awaited fiduciary regulation reproposal was likely to
be published in January. Those headlines seem to have been sparked by the
recent update of the Department of Labor’s planned agenda. Federal agencies
periodically update their planned agenda for new regulations and other
guidance. The fall revisions recently announced by the Department of Labor
(DOL) included a mixture of additions, delays and affirmations of guidance from
the Employee Benefits Security Administration (EBSA) which oversees ERISA
On that list was the controversial EBSA initiative to revise
the definition of who may be a fiduciary by virtue of giving investment advice.
This soon-to-be-proposed regulation is now referred to as the “conflicted
advice” proposal and it has been closely watched by many, including those on
Capitol Hill. The expected publication date had previously been announced
as January 2015 — a date that remained unchanged in the latest guidance plan
However, the Office of Management and Budget (OMB) website
currently indicates it has not yet received the proposal for its review — a
process that normally takes 90 days. If that normal review cycle holds, the
January date may not be realistic. Though, of course, it is always possible that
the OMB review could be conducted on an expedited basis.
A noteworthy new addition to the guidance plan is a project
with the mind-numbing name, “Fiduciary Requirements for Disclosure in
Participant-Directed Individual Accounts Plans — Timing of Annual Disclosure.”
Despite the technical name, this guidance project is actually very good news.
It is expected to permit a window period for supplying the annual “404(a)(5)
disclosure” notice to participants in defined contribution plans with directed
investments. The expected guidance is listed as a “Direct Final Regulation” and
is slated for release this month, December 2014. It is possible this new option
could be effective in time for the next round of notices.
Another new project listed on the revised guidance plan is
one to modernize and improve the Form 5500 and related instructions. This is
expected to cover a number of changes including revisions to Schedule C to
better coordinate the reporting of compensation and 408(b)(2) disclosure
The revised guidance plan provided for the first time an
expected release date for final regulations regarding a new required “guide” to
accompany the disclosures that must be provided to responsible plan fiduciaries
under the 408(b)(2) regulations. The final regulations are projected to be out
in September 2015. The DOL is surveying focus groups made up of plan
fiduciaries with respect to issues presented by the new disclosure requirements
and whether a “guide” would be helpful. It is quite possible that the comment
period will be reopened after the focus group results become available. This in
turn could extend the expected release date for the final regulations.
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