The Department of Labor recently posted to its website the final reports from the three topics (facilitating lifetime plan participation, outsourcing employee benefit plan services, and pharmacy benefit managers (PBM) compensation and fee disclosure) the ERISA Advisory Council in 2014 studied and made recommendations for the DOL’s consideration.
The report on lifetime plan participation provides ideas for plan administrators and participants, including communications strategies and plan design options to facilitate lifetime retirement plan participation. The Council recommended that DOL develop educational materials on the value of lifetime plan participation and educate sponsors on various plan features that may encourage such participation. The Council also made recommendations with respect to plan loans and developing sample forms to simplify plan rollovers and facilitate consolidation of retirement assets within a plan.
After conducting a review of outsourcing employee benefit plan services, the Council said it believes the Department can help improve the administration of employee benefit plans by assisting both plan sponsors and service providers in their efforts to outsource services where appropriate. The Council recommended that DOL, among other things, clarify the legal framework under ERISA for delegating responsibility to service providers in certain respects; provide additional guidance on the duty to select and monitor service providers; and facilitate the use of multiple employer plans and similar arrangements as a means of encouraging plan formation.
Finally, the Council recommended that DOL should consider making Section 408(b)(2) service provider fee disclosure regulations applicable to welfare plan arrangements with PBMs, deeming such arrangements reasonable only where PBMs disclose direct and indirect compensation consistent with the existing regulations.