The Labor Department on Tuesday proposed a new rule that would make it easier for those with 401(k) retirement plans and their employers to locate just what fees and expenses are attached.
The rule would update a 2012 one on the same subject. But many disclosure forms offered since them have become too lengthy, complex and confusing, department officials said.
"Some are filled with legalese, some have information that's split between multiple documents," said Phyllis Borzi, assistant secretary for the department's Employee Benefits Security Administration. A fee disclosure statement of no more than a page or two is envisioned.
Borzi said the goal is to do something that's helpful to plan sponsors and participants and not overly burdensome.
She likened the new disclosure forms to "a road map" that can help employers locate fee information and better understand what they are being charged by financial services providers.
She called the 2012 rule "a good first step in bringing transparency to the 401(k) industry and disclosing potential conflicts of interest."
"However, some employers, particularly small businesses, may be having a hard time locating the required fee disclosures when they are embedded in lengthy or complex documents," she said.
There is a public comment period of 90 days. Then, the department will hold focus groups on the proposed new rule with those from financial firms offering such plans, with a particular focus on pension plans with fewer than 100 participants.
"We want to get it right. So we'll take whatever time is necessary to get it right. We don't have an ultimate deadline," Borzi said in a conference call with reporters. "We want to hear what people have to say."
The earlier rule also requires that those offering 401(k) pension plans furnish detailed information about their services and the compensation they will receive, including payments from third parties.