<nobr>Sep 8, 2008</nobr>

ERIC Submits Comments on Proposed Participant Fee Disclosure Regulations

ERIC earlier today submitted to the Department of Labor's Employee Benefits Security Administration comments on proposed regulations that would create new disclosure requirements for participant-directed individual account plans.

The proposed regulations released July 22 would require plan fiduciaries to disclose certain investment information, including fee and expense information, to participants and beneficiaries who have the right to direct the investment of their retirement accounts. Under the proposed regulation, the disclosure of this information would be a fiduciary obligation under Section 404(a) of ERISA. Accordingly, the new disclosure requirements would apply to all participant-directed individual account plans, regardless of whether they rely on the fiduciary exception in ERISA Section 404(c).

ERIC's comments addresses several areas, including the proposed effective date of the regulation, the scope of the disclosure requirements, timing and method of disclosure, disclosure requirements concerning employer stock funds and other single-asset funds, and the content of disclosure.

Some of the more important recommendations include, among other things, that:

• The regulation should not become effective earlier than 12 months after issuance of the final regulation.


• If a fiduciary fails to disclose required information, the fiduciary is liable under ERISA only for investment losses that are caused by the fiduciary's breach of duty.


• A fiduciary should not be liable for erroneous information furnished by others unless the fiduciary is aware of the error and fails to take reasonable measures to correct the error.


• A fiduciary should not be required to make the initial disclosure to a participant before the participant enrolls in the plan.


• The investment-related disclosure requirements should not apply to employer stock funds that are regulated by the federal securities laws.

ERIC Comments

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