SIFMA, the ABA and Other Associations Submit Comments to OMB on Requirements for Reg. 408(b)(2) Guide

SIFMA, the American Bankers Association ("ABA"), the American Council of Life Insurers ("ACLI"), the Investment Company Institute ("ICI"), and the SPARK Institute, Inc. ("SPARK") (collectively, the "Agencies") submitted comments to the Office of Management and Budget ("OMB") with regard to the amendment proposed on March 12, 2014 by the Department of Labor ("DOL") concerning fee disclosures. The comment letter focused on a proposed amendment to the Information Collection Request ("ICR").

The DOL proposal would amend the ERISA regulation 408(b)(2), requiring that certain service providers to pension plans disclose information about the service providers' compensation and potential conflicts of interest. The amendment would require covered service providers to furnish a guide to assist plan fiduciaries in reviewing the disclosures required by the final rule if the disclosures are contained in multiple or lengthy documents.

The Agencies contend that the DOL is using this proposal as an opportunity to collect information from the public in order to make findings necessary to demonstrate adequately that the guide (i.e., the proposed data collection) is (i) necessary for the proper performance of the functions of the agency, and (ii) will have practical utility. The Agencies state that the DOL has not completed the threshold steps of determining whether in fact the guide is needed or will be useful to plan sponsors, and are concerned that a 30-day comment period will be insufficient to allow the public to be in a position to inform the OMB of its concerns.

As cited in the letter, the DOL is seeking comment on, among other things, the following cost issues:

• The number of arrangements that will require a guide;
• Data on the incremental costs of pagination relative to other identifiers;
• The challenges associated with preparing a guide and the anticipated cost of addressing them;
• How currently available technology can or cannot reduce such costs;
• Whether economies of scale exist such that the guide service providers prepare for one product can be used for multiple clients;
• An estimate of the costs associated with preparing the guide, including costs incurred for system changes and costs relating to placing page or section number references in the guide;
• Whether such costs can be broken down by the type of covered service provider;
• Whether such costs can be broken down as applied to each of the specific content requirements of the proposed guide; and
• The costs of requiring that covered service providers furnish any required tool (whether a guide, summary or other tool) in a required format.

The Agencies urge the OMB to disapprove the ICR and direct the DOL to resubmit it after an adequate record is developed.

See: Comment Letter by SIFMA, et. al.See: 79 FR 13949 (DOL-Proposed Rule).