Is the retirement community fully ready and absolutely sure of the final details regarding fee disclosure?
Not exactly, suggests Craig Hoffman, ASPPA's general counsel and director of regulatory affairs, who chatted with BenefitsPro.com earlier this week during the organization's 401(k) Summit in New Orleans.
Hoffman admits there's still significant uncharted area out there – the major issues being non-monetary compensation and the definitions of designated investment alternatives – but there's hope that an anticipated set of Internet-style Frequently Asked Questions will help shore up some of the loose ends.
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In our video, Hoffman responds to an interesting on-stage discussion held at the Summit between ASPPA CEO Brian Graff and Michael Davis, the deputy assistant secretary of the DOL's Employee Benefits Security Administration.
Davis is no pure policy wonk: He spent 17 years in the trenches as an asset manager with JP Morgan before making the jump to the DOL, but even he admitted to the Summit audience that Labor is "earnest but naïve" in many of the policy decisions and directions it makes.
As a clear example of that, Davis admitted that the dicey world of multiple-employer plans exists in a virtual Bermuda Triangle of regulation—ERISA doesn't specifically cover them and there's vague guidance on the issue, especially for advisors and administrators.
And even fee disclosure rules which seem like a straightforward process, such as documentation to participants, seem to morph a bit in the eyes of the DOL.
Graff, advocating the availability of electronic documentation, cited the case of a smaller company that might face as much as $50,000 in costs if it was necessary to get paper statements out to its 20,000 nursing industry employees.
"We have an older population of retirees and pre-retirees who may not be as electronically savvy, so how do you balance that," Davis said. "We do have to strike a balance. And we want to get it right."
Davis also offered a coy hint that while the DOL and its best intentions press the notion of a self-enforcement rule for much of the minutiae of the fee disclosure regs, more heavy-handed action is not out of the question in the future.
"I would never say that we're not going to enforce rules," he added.
In a separate interview, ASPPA president Robert Richter, vice president for SunGard's wealth management business, agreed that there's still a lot of catching up to do as fee disclosure approaches.
"I would say that, on a whole, people are still feeling uncertain, but they're being very proactive," Richter noted. "It's a very, very cumbersome and time-consuming practice to prepare for. They've built a process, but depending on the final guidance, people don't want to have to go back and retool what they've already done."
On the other hand, Richter said that at the plan disclosure level, he's seeing signs that things are already working and that cost of services has decreased.
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