August 27, 2008
Susan M. Halliday
Kristen L. Zarenko
Office of Regulations and Interpretations
Employee Benefits Security Administration
Attn: Participant Fee Disclosure Project
U. S. Department of Labor
200 Constitution Avenue, N.W.
RE: Proposed Regulations on Fiduciary Requirement for Disclosure in Participant-Directed Individual Account Plans
Dear Ms. Halliday and Ms. Zarenko:
The American Institute of Certified Public Accountants (AICPA) has prepared the attached comments on Prop. Reg. section 2550.404a-5, which addresses fiduciary requirements for disclosure in participant-directed individual account plans. These comments were prepared by the Employee Benefits Taxation Technical Resource Panel (EBTRP) with input from the Personal Financial Planning Executive Committee (PFP EC). They were approved by our Tax Executive Committee (TEC) and PFP EC.
The AICPA is the national professional association of CPAs with more than 350,000 members, including CPAs in business and industry, public practice, government, and education; student affiliates; and international associates. Our members provide audit, tax, retirement consulting, plan administration, and financial planning services. It is from this diverse perspective that we offer our comments.
We commend the Department of Labor for developing a program to require the disclosure of certain plan and investment-related information, including fee and expense information, to participants in participant-directed individual account plans. It is critical to ensure that all participants in such account plans have the information they need to make informed decisions about the management of their individual accounts and the investment of their retirement savings.
In general, the regulations provide sufficient guidance for plan sponsors and third party administrators to disclose the required information in participant-directed accounts. However, there are areas within these regulations that we feel require further clarification.
Coordinating efforts with the IRS to issue a sample disclosure notice document with standard paragraphs that can be customized to a particular plan.
- Extending the effective date until at least January 1, 2010.
- Extending the deadline for providing disclosures to 30 days after a participant becomes eligible for the plan, or coordinating the timing with the timeframe for furnishing summary plan descriptions (90 days after becoming eligible).
- Clarifying whether the proposal applies to IRAs that provide for employer contributions— that is, “Simplified Employee Pension Retirement Account” (SEP) and “Savings Incentive Match Plan for Employees” (SIMPLE) plans.
- Excluding smaller plans from gathering information on investment options.
- Clarifying the terms “participant” and “beneficiary”.
We appreciate the opportunity to comment and urge you to clarify these issues. If we can be of further assistance please contact me at Jeffrey.firstname.lastname@example.org; Dick Fohn at Dick.Fohn@mossadams.com; Eddie Adkins, Chair of the Employee Benefit TRP, at email@example.com; Lisa Winton, Tax Technical Manager, at firstname.lastname@example.org; or Teighlor March, PFP Senior Technical Manager at email@example.com.