<nobr>Jul 19, 2007</nobr>

ERIC Submits Comments to EBSA on Plan Fee Disclosure; Urges Flexibility

Washington, D.C. -- The ERISA Industry Committee (ERIC) earlier today submitted comments in response to the Employee Benefits Security Administration's (EBSA's) Request for Information regarding disclosure of fees and other information in participant-directed retirement plans. EBSA requested comments on April 24, 2007, to determine to what extent rules should be adopted to ensure that participants and beneficiaries have the necessary information to make informed decisions about the management of their investment in their 401(k) plan.

In its comments, ERIC applauds the Department of Labor and EBSA's efforts to improve the quality and effectiveness of participant disclosures in defined contribution plans, and urged the agencies to ensure that plan sponsors are given adequate flexibility to design disclosures that meet their needs and those of their employees without overloading employees with information that is of no value. ERIC also suggests that any new requirements must be clearly stated to ensure plan sponsors are not put into legal jeopardy threatening the continued viability of the defined contribution system.

"While we recognize the importance of adequate disclosure to participants, overly voluminous and granular information about plan investment option fees and service provider compensation simply does not assist participants in selecting among plan investment options," said ERIC President Mark Ugoretz.

Among other things, ERIC believes it is critical that any regulatory action taken by DOL on any new disclosure requirements adhere to the following core principles:

• Disclosure should be designed primarily to inform participants of their investment choices.


• Any new disclosure requirements must be cost-efficient.


• Any new disclosure requirements should be clear.


• Plan sponsors will often require the cooperation of service providers to provide disclosure.


• Any new disclosure requirements must be clearly prospective only.

ERIC also strongly believes that the justification underlying disclosure requirements for plans seeking to meet the ERISA Section 404(c) safe harbor apply equally to all participant-directed defined contribution plans, and urges DOL to pursue any new disclosure requirements under ERISA Sections 505 and 109, rather than as part of a reworking of 404(c).

###


For more information:
Ted Godbout
Manager, Communications
The ERISA Industry Committee
1400 L Street, NW, Suite 350
Washington, DC 20005
Phone: (202)789-1400
Fax: (202)789-1120
E-mail: tgodbout@eric.org
www.eric.org

c76300000005.filename.RFIResponseFinal.pdf

Back to Previous Page