December 9, 2014
- DOL, EBSA Seeking to Conduct Focus Groups on 408(b)(2) Fee Disclosures
- IRS Issues Cumulative List of Qualification Requirements, Extends Cycle D Plan Deadline
DOL, EBSA Seeking to Conduct Focus Groups on 408(b)(2) Fee Disclosures
The U.S. Department of Labor (DOL) and Employee Benefits Security Administration (EBSA) are seeking authority to form focus groups to evaluate the effectiveness of the provider fee disclosure requirements under ERISA Section 408(b)(2), according to an information collection request (ICR) filed with the U.S. Office of Management and Budget (OMB) on December 5.
The DOL is examining the effects of the final regulations on the disclosure of defined contribution plan fees under ERISA Section 408(b)(2) issued in February. The DOL also intends to use the information to gather information about the need for a guide, summary or similar tool to help a responsible plan fiduciary navigate through and understand the disclosures.
DOL issued proposed regulations on March 11 generally requiring retirement plan service providers to furnish such a guide. On June 10, the Council filed a comment letter raising numerous concerns with the proposal. (See the June 10 Benefits Byte story for more details.)
EBSA intends to use the information from the focus groups to:
- Assess responsible plan fiduciaries’ experience in receiving the required disclosures.
- Assess the effectiveness of the disclosures in helping plan fiduciaries make decisions.
- Determine how well plan fiduciaries understand the disclosures, especially in the small plan marketplace (100 participants or less).
- Evaluate whether, and how, a guide, summary or similar tool would help a fiduciary understand the disclosures.
- Inform and support a notice of final rulemaking for the guide requirement.
Under the Paperwork Reduction Act of 1995, federal agencies generally cannot conduct or sponsor a collection of information unless approved by OMB. OMB will review all comments received on the ICR. OMB says it is particularly interested in comments that:
- Evaluate whether the proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility.
- Evaluate the accuracy of the agency’s estimate of the burden of the proposed collection of information, including the validity of the methodology and assumptions used.
- Enhance the quality, utility and clarity of the information to be collected.
- Minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical or other technological collection techniques or other forms of information technology, e.g., permitting electronic submission of responses.
Comments are due by January 5, 2015. For more information, contact Jan Jacobson, senior counsel, retirement policy, or Lynn Dudley, senior vice president, global retirement and compensation policy, at (202) 289-6700.
IRS Issues Cumulative List of Qualification Requirements, Extends Cycle D Plan Deadline
On December 5, the Internal Revenue Service (IRS) issued guidance on the qualification requirements (“cumulative list of changes”) for “Cycle E” retirement plans filing determination letters and extended the deadline for “Cycle D” plans.
Under general filing guidelines, “Cycle E” plans are those whose plan sponsor has an employer identification number ending in 5 or 0 and “Cycle D” plans have an employer identification number ending in 4 or 9.
Notice 2014-77 contains the 2014 cumulative list of changes in plan qualification requirements to be used with the determination letter program for individually designed plans eligible for “Cycle E” plans. The IRS will begin accepting determination letter applications for these plans beginning February 1, 2015.
The qualification guidance – implementing provisions of the Highway and Transportation Funding Act of 2014, the Pension Protection Act and other recently enacted laws – applies to individually designed defined contribution and defined benefit plans (including master and prototype or volume submitter plans), as well as Internal Revenue Code Section 414(d) governmental plans. Note that 401(k) plans are addressed in Section 4, No. 8 (Page 7 of the guidance).
Announcement 2014-41, also issued on December 5, extended the deadline for submitting on-cycle applications for opinion and advisory letters for pre-approved defined benefit plans for the plans’ second six-year remedial amendment cycle. The announcement also provides a two-day extension for “Cycle D” on-cycle submissions, from Saturday, January 31, 2015, to Monday, February 2, 2015.