What Lies Ahead: The DOL’s Revised Guidance Plan
While it is not unusual for federal agencies to update their planned agenda for new regulations and other guidance periodically, some recent updates the Department of Labor (DOL) announced to its Fall 2014 Regulatory Agenda
have drawn heightened interest.
One specific regulatory project on the list that has sparked a great deal of interest is the Employee Benefits Security Administration (EBSA) initiative to revise the definition of who may be a fiduciary by virtue of giving investment advice.
This soon-to-be-proposed regulation (now referred to as the “conflicted advice” proposal) has been closely watched by many, including those on Capitol Hill. The expected publication date had been previously announced as January 2015, a date that remained unchanged in the latest guidance plan revision. However, the Office of Management and Budget (OMB) website indicates it has not yet received the proposal for its review — a process that normally takes 90 days. If that holds, the January date may no longer be realistic, though 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 regimes.
Other items of interest include revisions to the Voluntary Fiduciary Correction Program (VFCP) which was originally due out in January of 2015 and now has been pushed back to March. Similarly, a proposed regulation regarding participant benefit statements was moved back from January of 2015 to July. That is likely to be a comprehensive edict to provide a structure for the rules that were enacted as part of the Pension Protection Act of 2006.
The revised guidance plan also 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 of 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.
It appears that the DOL will be very busy in the months ahead. The Government Affairs Committee will keep a watchful eye on these guidance projects and continue to convey the concerns of our members.
Craig P. Hoffman, APM, is ASPPA’s General Counsel and Director of Regulatory Affairs.