The U.S. Department of Labor recently released its proposed rule on a guide for 401(k) fee disclosures. The rule would require service providers to offer guides to employers and other fiduciaries to help them navigate fee disclosures if they are lengthy or multiple documents.
The guide must specifically identify the document, page, or, if applicable, other sufficiently specific locator, such as section, that enables the responsible plan fiduciary to quickly and easily find the specified information, as applicable to the contract or arrangement. The proposed provision requires a specific locator, including the identity of the document and where the information is located, within the document.
While the reasoning for this is well-intentioned, it could have a negative impact on firms who often use multiple documents to make their disclosures, and they may need to hire outside companies in order to accommodate the new requirements. It may also serve to confuse investors who are already receiving a great deal of disclosure information.
The proposed rule was published in the Federal Register on March 12, 2014.
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