Amendment Relating to Reasonable Contract or Arrangement Under Section 408(b)(2)-Fee Disclosure, 13949-13962 [2014-04868]

Agencies

• Employee Benefits Security Administration
• DEPARTMENT OF LABOR

[Federal Register Volume 79, Number 48 (Wednesday, March 12, 2014)]
[Proposed Rules]
[Pages 13949-13962]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-04868]


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DEPARTMENT OF LABOR

Employee Benefits Security Administration

29 CFR Part 2550

RIN 1210-AB53


Amendment Relating to Reasonable Contract or Arrangement Under 
Section 408(b)(2)--Fee Disclosure

AGENCY: Employee Benefits Security Administration, Labor.

ACTION: Proposed rule.

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SUMMARY: This document contains a proposed amendment to the final 
regulation under the Employee Retirement Income Security Act of 1974 
(ERISA or the Act) requiring that certain service providers to pension 
plans disclose information about the service providers' compensation 
and potential conflicts of interest. The amendment would, upon 
adoption, require covered service providers to furnish a guide to 
assist plan fiduciaries in reviewing the disclosures required by the 
final rule if the disclosures are contained in multiple or lengthy 
documents. This amendment will affect pension plan sponsors and 
fiduciaries and certain service providers to such plans.

DATES: Written comments on the proposed amendment should be received by 
the Department on or before June 10, 2014.

ADDRESSES: Written comments may be submitted to the addresses specified 
below. All comments will be made available to the public. Warning: Do 
not include any personally identifiable information (such as name, 
address, or other contact information) or confidential business 
information that you do not want publicly disclosed. All comments may 
be posted on the Internet and can be retrieved by most Internet search 
engines. Comments may be submitted anonymously. Comments may be 
submitted to the Department of Labor, identified by RIN 1210-AB08, by 
one of the following methods:
     Federal eRulemaking Portal: https://www.regulations.gov. 
Follow the instructions for submitting comments.
     Email: e-ORI@dol.gov.
     Mail or Hand Delivery: Office of Regulations and 
Interpretations, Employee Benefits Security Administration, Room N-
5655, U.S. Department of Labor, 200 Constitution Avenue NW., 
Washington, DC 20210, Attention: RIN 1210-AB08; 408(b)(2) Guide.
    Comments received by the Department of Labor may be posted without 
change to https://www.regulations.gov and https://www.dol.gov/ebsa, and 
made available for public inspection at the Public Disclosure Room, N-
1513, Employee Benefits Security Administration, 200 Constitution 
Avenue NW., Washington, DC 20210.

FOR FURTHER INFORMATION CONTACT: Allison Wielobob, Office of 
Regulations and Interpretations, Employee Benefits Security 
Administration, (202) 693-8500. This is not a toll-free number.

SUPPLEMENTARY INFORMATION:

A. Background

1. General

    On February 3, 2012, the Department published a final rule in the 
Federal

[[Page 13950]]

Register concerning disclosures that must be furnished before plan 
fiduciaries enter into, extend or renew contracts or arrangements for 
services to certain pension plans in order for such a contract or 
arrangement to be ``reasonable,'' as required by ERISA section 
408(b)(2).\1\ The final rule was effective for covered plans on July 1, 
2012.\2\ The final rule was designed to help ensure that pension plan 
fiduciaries are provided the information they need to assess both the 
reasonableness of the compensation to be paid for plan services and 
potential conflicts of interest that may affect the performance of 
those services. Today, the Department is publishing in the Federal 
Register a proposed amendment to the final rule under which covered 
service providers would be required to furnish a guide along with the 
initial disclosures that must be provided to plan fiduciaries in 
accordance with the final regulation, if the initial disclosures are 
contained in multiple or lengthy documents.
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    \1\ 77 FR 5632 (Feb. 3, 2012); see also the interim final rule 
(75 FR 41600, July 16, 2010) and proposed rule (72 FR 70988, Dec. 
13, 2007). The ``408(b)(2)'' regulation finalized by the Department 
addresses disclosures that must be furnished before plan fiduciaries 
enter into, extend or renew contracts or arrangements for services 
to certain pension plans. The final rule was part of a broader 
Departmental regulatory initiative to improve transparency of plan 
fees to plan fiduciaries, the Department, and plan participants and 
beneficiaries. As part of this initiative, the Department also 
implemented changes to the information that must be reported 
concerning service provider compensation as part of the Form 5500 
Annual Report. These changes to Schedule C of the Form 5500 
complement the final rule by assuring that plan fiduciaries have the 
information they need to monitor service providers consistent with 
their duties under ERISA section 404(a)(1). See 72 FR 64731; see 
also frequently asked questions on Schedule C, available on the 
Department's Web site at https://www.dol.gov/ebsa. Finally, the 
Department published a final rule in October 2010 requiring the 
disclosure of specified plan and investment-related information, 
including fee and expense information, to participants and 
beneficiaries of participant-directed individual account plans. See 
75 FR 64910.
    \2\ See 77 FR 5632.
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2. Public Comments on Interim Final Regulation

    In the preamble to the interim final rule, the Department requested 
comment on the format of disclosures required under the rule. Neither 
the proposal nor the interim final rule required covered service 
providers to disclose information in any particular format. Further, 
the preamble to the proposal specifically noted that covered service 
providers could use different documents from separate sources, as long 
as all of the documents, collectively, contained the required 
information. Commenters on the proposal disagreed as to whether this 
would lead to a cost-effective and meaningful presentation of the 
required information to responsible plan fiduciaries. In the preamble 
to the interim final rule, the Department explained that it had not 
determined whether it was feasible to provide specific and meaningful 
formatting standards. Accordingly, the Department requested comment on 
whether to revise the final rule to include a summary disclosure or 
other formatting requirement.
    Commenters on the interim final rule, as on the proposed rule, 
continued to disagree about the utility of, and feasibility of, 
requiring a summary of, or otherwise mandating any particular format 
for the required disclosures. Many commenters argued that the 
Department should retain the position taken in the proposal and the 
interim final rule, giving covered service providers flexibility to 
determine the format of their disclosures. These commenters expressed 
concern that a ``one-size-fits-all'' approach could not accommodate the 
enormous variety of current pension plan service arrangements and 
likely changes in the future. They also believed that the costs to 
pension plans, and the participants and beneficiaries of such plans, of 
such an approach will be significant. Some of these commenters 
expressed concern that responsible plan fiduciaries would rely solely, 
and thus improperly, on the summary, rather than reviewing the fuller 
and more detailed disclosures required by the rule. The commenters also 
were concerned that requiring the comprehensive disclosures and a 
summary would result in unnecessarily duplicative disclosures. In 
addition, if there are discrepancies between the two, commenters argued 
that questions could arise over which disclosures would govern. These 
commenters preferred that the Department require covered service 
providers to furnish an index or ``roadmap'' to the disclosures. 
Commenters also suggested that any summary or other formatting 
requirement the Department may adopt be flexible and not mandate any 
particular language, formatting, or page limits.
    Other commenters, however, supported the addition of a summary 
disclosure or similar requirement. They argued that plan fiduciaries, 
especially those for small and medium-sized plans, often are 
overwhelmed by highly technical disclosures from separate sources, 
especially concerning plan investments. These commenters suggested 
placing the burden of organizing this information on covered service 
providers, who can do so more effectively and at less cost. Further, 
these commenters believe that associated costs to service providers 
have been overstated and are likely to be minimal following an initial 
transition to compliance with any new summary or other formatting 
requirement. These costs, they argued, would be greatly outweighed by 
the benefit of increased clarity to responsible plan fiduciaries. One 
commenter, for example, pointed out that fuller disclosure will not 
result in increased transparency if the information continues to be 
obscured in lengthy, technical documents. Some of these commenters 
suggested information that should be contained in a separate, summary 
disclosure requirement.
    Following review and analysis of these comments, the Department 
decided to reserve paragraph (c)(1)(iv)(H) of the final rule, published 
in February 2012. The Department also explained its intention to 
publish, in a separate proposal, a guide or similar requirement to 
assist responsible plan fiduciaries' review of the rule's required 
disclosures. Given the lack of specific suggestions or data on how best 
to structure such a requirement, and what the real costs of such a 
requirement would be, the Department was not prepared, at that time, to 
implement a guide or similar requirement as part of the final rule.
    Today, the Department is proposing a regulatory provision requiring 
that covered service providers furnish a guide along with the initial 
disclosures required by the rule, if the disclosures are contained in 
multiple or lengthy documents. The Department believes that plan 
fiduciaries, especially in the case of small plans, need a tool to 
effectively make use of the required disclosures. The guide being 
proposed in this document provides clarity and specificity, while 
avoiding the uncertainty and burdens that some commenters argued may 
accompany construction of a ``summary'' of existing documents. The 
Department believes that a required summary without some guide to the 
underlying disclosures themselves, could become the primary document on 
which some responsible plan fiduciaries rely, which is not the 
Department's intention.
    The Department is proposing a guide requirement in an effort to 
strike an appropriate balance between the need to facilitate a 
responsible plan fiduciary's review of information important to a 
prudent decision-making process and the costs and burdens attendant to 
the preparation of a new summary disclosure document. The Department

[[Page 13951]]

believes that covered service providers are best positioned to provide 
the guide in a cost-effective manner, because they have the specialized 
knowledge required to determine where the required disclosures are 
located, and they generally will be able to structure their disclosures 
so that they need to locate the information only once when preparing 
guides for large numbers of clients, each of whom otherwise would have 
to locate the information separately in the underlying disclosures. A 
guide will assist responsible plan fiduciaries for these plans in 
finding information that ERISA requires them to assess in evaluating 
both the reasonableness of the compensation to be paid for plan 
services and potential conflicts of interest that may affect the 
performance of those services. A guide will also reduce the costs they 
otherwise would have incurred searching for such information. Anecdotal 
evidence suggests that small plan fiduciaries in particular often have 
difficulty obtaining required information in an understandable format, 
because such plans lack the bargaining power and specialized expertise 
possessed by large plan fiduciaries. Therefore, the Department 
anticipates that the guide requirement will be especially beneficial to 
fiduciaries of small and medium-sized plans.
    To avoid unnecessary cost to covered service providers, the 
proposal also allows for the fact that, in some cases, covered service 
providers may already furnish the required disclosures in a concise, 
single document. If that is the case, then the covered service provider 
will not be required to provide a separate guide to the disclosures. 
The Department believes that initial disclosures that are furnished in 
a concise, single document do not present the same challenges to 
responsible plan fiduciaries as disclosure that are contained in 
multiple or lengthy documents.
    The Department has not been convinced by commenters that certain 
required disclosures are more important than others, such that the 
guide, if required, should include the location of only the most 
important data. Accordingly, the proposed guide requires that covered 
service providers disclose the location of all principle data elements 
required as initial disclosures. Nothing in the proposed amendment, 
however, would preclude a covered service provider from including 
additional information with or as part of the guide, as long as such 
information is not inaccurate or misleading. It is not the Department's 
goal to limit innovation in how information is effectively communicated 
to plan fiduciaries. Rather, the Department believes that the required 
guide to initial disclosures will provide a basic framework for 
ensuring that responsible plan fiduciaries understand exactly what 
information is being disclosed to them, and where to find such 
information.

B. Proposed Amendment to Regulations Under Section 408(b)(2)

1. Overview of Proposed Amendment

    The Department proposes to include, as paragraph (c)(1)(iv)(H) of 
the final rule, a new requirement that covered service providers 
furnish a guide along with the initial disclosures required by the 
rule, if the initial disclosures are contained in multiple or lengthy 
documents. This guide will assist responsible plan fiduciaries by 
ensuring that the location of all information required to be disclosed 
is evident and easy to find among other information that is provided. 
The Department agrees that covered service providers are in the best 
position to identify the location of information that otherwise may be 
difficult for a responsible plan fiduciary to find in multiple, highly 
technical or lengthy disclosure materials. Specifically, paragraph 
(c)(1)(iv)(H) provides that, if the information that must be disclosed 
pursuant to paragraph (c)(1)(iv)(A) through (G) of the final rule (the 
initial disclosures) is not contained in a single document, or if the 
document is in excess of a specified number of pages, the covered 
service provider must furnish to the responsible plan fiduciary a guide 
that specifically identifies the document and page or other 
sufficiently specific locator, such as a section, that enables the 
responsible plan fiduciary to quickly and easily find the specified 
information, as applicable to the contract or arrangement. The 
Department has reserved for comment the number of pages that will 
trigger the guide requirement even if the initial disclosures are 
furnished in a single document. Commenters should address whether such 
a page number requirement is an appropriate standard, whether standards 
must be included to prevent formatting or other manipulation of the 
page number requirement (e.g., by reducing font size or margins), what 
number of pages should be included as the standard, and whether any 
alternative standards exist that would be more beneficial to 
responsible plan fiduciaries reviewing lengthy documents.
    In the Department's view, merely stating, for example, that 
required information is contained in a separate service contract or 
prospectus would not be sufficient. This new provision requires a 
specific locator to find the required information, including not only 
the identity of the document (to the extent disclosure may be contained 
in multiple documents) but also where such information is located 
within the document. In common parlance, a ``guide'' is a mechanism or 
tool that serves to direct or indicate information, or that advises or 
shows the way. Thus, in the context of this proposal, a guide would be 
helpful to the extent it serves to direct plan fiduciaries to specific 
relevant information required under the regulation. A document and 
pagination requirement represents one approach to guide plan 
fiduciaries by providing them with a direct unambiguous point of 
reference to the specific place where they could find the information. 
Alternatively, other locators, for example, direct links to the 
required information on an Internet/Web page, or section identification 
within a document may also be helpful but at the same or potentially 
lower cost. Accordingly, the proposal seeks comments on the use of two 
alternate locators. Each is equally weighted under the proposal. The 
first is a document and page requirement. The Department assumes for 
purposes of this proposal that paginated documents are the norm for 
employee benefit contracts and other materials subject to disclosure 
under the regulation. The second choice is a ``sufficiently specific'' 
locator, such as a section. This alternative is intended to be more 
general, but only to the extent still effective. Specifically, in 
addition to specifying the document or documents where required 
disclosures are located, the proposal requires that the guide identify 
the ``page or other sufficiently specific locator, such as section, 
that enables the plan fiduciary to quickly and easily find'' the 
required information. The Department is neutral as between these 
alternatives because either would satisfy the intended purpose of the 
guide--to help plan fiduciaries quickly and easily find the required 
disclosures. The proposal's reference to ``section'' is meant as an 
example, however, and not as a safe harbor. Section references, whether 
by name or number or some other method, would be acceptable locators 
only if they were sufficiently specific to enable plan fiduciaries to 
quickly and easily find the relevant information. The proposal allows 
covered service providers to choose pagination or the more general 
alternative. Individuals are encouraged to comment on whether a final 
rule, assuming it were to include

[[Page 13952]]

a guide requirement, should permit a choice of locators, as proposed, 
or whether the rule should require only one locator, and why. The 
Department also welcomes comments on whether page numbers and sections 
are effective and feasible locators, whether individually or as 
alternatives, and whether and why other locators may be preferable. The 
Department also welcomes comment on other mechanisms which could be 
used in a guide to quickly identify relevant information for 
fiduciaries and on the benefits and costs of the two options outlined 
here.
    A similar standard applies for information disclosed 
electronically. A covered service provider may not merely furnish the 
link to a separate contract or to a prospectus. Either a more specific 
link directly to the required information must be furnished, or a page 
or other sufficiently specific locator, such as a section, must be 
furnished in addition to an electronic hyperlink.
    Some interested parties have suggested that a guide requiring 
inclusion of a specific page or other locator could be difficult and 
potentially very costly to covered service providers and plans. The 
Department is particularly interested in comments on this issue. The 
Department asks that comments specifically identify such challenges and 
the anticipated cost of addressing them, and explain how currently 
available technology can or cannot reduce those costs. The Department 
also is interested in whether web-based approaches, which allow the 
reader to move readily by hyperlink back and forth between related 
information in a summary document and the more detailed document or 
documents from which the summary was derived, could provide an 
effective alternative for disclosures provided electronically. In 
offering alternatives, please explain how they would meet the 
Department's objective in proposing a guide, which is to assist 
responsible plan fiduciaries by ensuring that the location of all 
information required to be disclosed is evident and easy to find among 
other information that is provided.

2. Required Elements; Changes to Guide

    If a guide is required, the covered service provider must disclose 
the location of: (i) the description of services to be provided to the 
covered plan, as required by paragraph (c)(1)(iv)(A) of the final rule; 
(ii) the statement concerning services to be provided as a fiduciary 
and/or as a registered investment adviser, as required by paragraph 
(c)(1)(iv)(B) of the final rule; (iii) the description of all direct 
compensation, as required by paragraph (c)(1)(iv)(C)(1) of the final 
rule; (iv) the description of all indirect compensation, as required by 
paragraph (c)(1)(iv)(C)(2) of the final rule; (v) the description of 
any compensation that will be paid among related parties, as required 
by paragraph (c)(1)(iv)(C)(3) of the final rule; (vi) the description 
of any compensation for termination of the contract or arrangement, as 
required by paragraph (c)(1)(iv)(C)(4) of the final rule; (vii) the 
description of all compensation (and/or a reasonable estimate of the 
cost to the covered plan) for recordkeeping services, as required by 
paragraph (c)(1)(iv)(D) of the final rule; and (viii) for covered 
service providers described in paragraphs (c)(1)(iii)(A)(2) or 
(c)(1)(iii)(B) of the final rule, the description of any compensation, 
annual operating expenses, and ongoing expenses (or, if applicable, 
total annual operating expenses), set forth in paragraph 
(c)(1)(iv)(E)(1) and (2), as required by paragraphs (c)(1)(iv)(E)(1) 
and (2) and (c)(1)(iv)(F)(1) of the final rule.
    The guide also must identify a person or office, including contact 
information, that the responsible plan fiduciary may use regarding the 
disclosures provided pursuant to the final rule. Paragraph 
(c)(1)(iv)(H)(2). This requirement will further assist responsible plan 
fiduciaries by clearly identifying an individual or office that the 
fiduciary may contact to the extent he or she has difficulty locating 
any information referenced in the guide, or has questions concerning 
the disclosures themselves. A required guide must be furnished as a 
separate document. Paragraph (c)(1)(iv)(H)(3). The Department's goal, 
in requiring that the guide be a separate document, is to ensure that 
it is brought to the attention of the responsible plan fiduciary and 
prominently featured so that the fiduciary can use it effectively in 
his or her review of the required disclosures. The Department solicits 
comments on whether the separate document requirement, by itself, is 
likely to ensure that the responsible plan fiduciary adequately 
understands both the existence and purpose of the guide, or whether 
other conditions are needed. For instance, in addition to the separate 
document requirement, would the guide be improved by requiring specific 
language, such as an introductory statement in the guide as to the 
purpose of the guide? Further, if the guide is furnished 
electronically, for example as an attachment to email, would 
responsible plan fiduciaries benefit from a notice comparable to the 
notice required pursuant by 29 CFR 2520.104b-1(c)(1)(iii) (requiring 
the provision of notice to participants at the time a document is 
furnished electronically that apprises participants of the significance 
of the document when it is not otherwise reasonably evident as 
transmitted).
    Finally, the proposal includes an amendment to paragraph (c)(1)(v) 
of the final rule, concerning the disclosure of changes to previously 
disclosed information. Specifically, the Department proposes to revise 
paragraph (c)(1)(v)(B)(2) of the rule to require that changes to the 
information contained in the guide must be disclosed, at least annually 
to responsible plan fiduciaries. The Department believes that a 
periodic requirement to disclose any changes to the information 
contained in the guide will be more beneficial to plan fiduciaries and 
less burdensome to covered service providers than ongoing and sporadic 
disclosure each time a change to one component of the guide occurs. The 
Department solicits comment on whether it would be more effective to 
require that the entire guide (rather than only changes to information 
contained in the guide) be disclosed on an annual basis, if changes 
have occurred during the preceding year.

3. Compliance and Delivery

    Several commenters on the interim final rule suggested that if the 
Department were to adopt a summary or other formatting requirement in 
the final rule, it should provide an illustration of how a covered 
service provider may comply with such requirement to encourage 
consistency and allow for lower cost alternatives. While the Department 
is not including a model guide as part of this publication, the 
Department previously posted on its Web site, at www.dol.gov/ebsa/pdf/408b2sampleguide.pdf, a sample guide to initial disclosures that may be 
useful to plan service providers. The guide was published as an 
appendix to the final rule as a sample and is an example of what the 
Department believes guides to initial disclosures may look like in 
practice.
    In addition, commenters on the interim final rule requested 
guidance on the manner of delivering required information to 
responsible plan fiduciaries. Nothing in the regulation limits the 
ability of covered service providers to furnish information required by 
the regulation to responsible plan fiduciaries via electronic media, 
for

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example, on a Web site.\3\ However, unless the information disclosed by 
a covered service provider on a Web site is readily accessible to 
responsible plan fiduciaries, and fiduciaries have clear notification 
on how to gain such access, the information on the Web site may not be 
regarded as furnished within the meaning of the regulation.
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    \3\ The Department's regulations at 29 CFR Sec.  2520.104b-1 
apply solely for purposes of disclosures from plans to participants 
and beneficiaries and do not extend to disclosures from third 
parties to plan fiduciaries.
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C. Request for Comments

    As discussed above, the Department believes that the proposed guide 
requirement strikes an appropriate balance between the need to 
facilitate responsible plan fiduciaries' review of information and the 
costs and burdens attendant to preparing such a guide. However, the 
Department invites comments from interested persons on all aspects of 
this proposal, including the regulatory alternatives discussed in 
Section 4 of the Regulatory Impact Analysis, below, that were 
considered by the Department in developing this proposal.
    The Department encourages parties to provide specific suggestions 
or data concerning the structure of the guide, as proposed, and whether 
its requirements are feasible and cost-effective. For example, how many 
(and what types of) products and services will require a guide? Do 
economies of scale exist such that the guide service providers prepare 
for one product or service could be used for multiple clients? Can 
service providers give the Department an estimate of the costs they 
will incur to create a guide? While aggregate costs of the guide are 
helpful, commenters are strongly encouraged to break down these costs 
into their constituent elements when possible. For example, when 
possible, break down the costs of the guide requirement as applied to 
each of the specific content requirements in paragraph (c)(1)(iv) of 
the final rule (i.e., subparagraphs (A) through (G) of the final rule), 
and as applied to the different types of covered service providers 
described in paragraph (c)(1)(iii) of the final rule.
    The Department also invites comments and suggestions as to 
alternative tools that would assist plan fiduciaries in reviewing the 
initial disclosures. Commenters are encouraged to state whether they 
believe these tools would be more, or less, beneficial to plan 
fiduciaries, as compared to the proposed guide, taking into account the 
costs and burdens to covered service providers, and possibly other 
parties, to prepare such tools.
    Further, the Department invites comments on whether the amendment 
instead should require that covered service providers furnish a summary 
of specified ``key'' disclosures. If so, what ``key'' information 
warrants inclusion in a summary? How costly would it be to prepare a 
summary and who would bear its costs? Would these costs decrease 
significantly after an initial transition period and, if so, how 
significantly? Which parties, other than covered service providers, 
might be involved in the preparation of a summary? What liability and 
other legal issues might arise for covered service providers and others 
from summarizing ``key'' information, and how should these issues be 
managed? How would responsible plan fiduciaries likely use the 
summarized information and what effect, if any, would it have on their 
review of the underlying disclosures? Further, what are the likely 
benefits and costs of requiring that covered service providers furnish 
any required tool (whether a guide, a summary, or other tool) in a 
specified format? Is a guide or other tool likely to increase the 
probability that responsible plan fiduciaries review the initial 
disclosures, because the required information is easier to find? What 
formatting requirements (e.g., a chart, page limits), if any, lend 
themselves to presentation of the initial disclosures required by the 
rule? Finally, what innovations in the preparation and delivery of 
disclosures currently exist in the marketplace, and how might a 
formatting requirement take advantage of these innovations?

D. Focus Group Testing

    Elsewhere in today's Federal Register, the Department announced its 
intention to conduct approximately eight to 10 focus group sessions 
with approximately 70 to 100 fiduciaries to small pension plans (those 
with fewer than 100 participants). The purpose of the focus group 
testing is to explore current practices and effects of EBSA's final 
regulation. This may provide information about the need for a guide, 
summary, or similar tool to help responsible plan fiduciaries navigate 
and understand the required disclosures. The focus group participants 
will be asked to provide information including the following: (1) Their 
role with respect to their plan; (2) the number of service providers 
hired by the plan; (3) whether they are aware of and understand the 
disclosures mandated by the 408(b)(2) final regulation; (4) their 
experience with receiving the disclosures; (5) whether they were able 
to find information regarding the services that would be provided and 
the costs of those services; (6) whether their review of the 
disclosures impacted their decision-making with regard to hiring, 
monitoring, or retaining service providers or changing plan investment 
options; (7) whether their covered service providers furnish a guide or 
similar organizational tool to help find specific information within 
the disclosures; and (8) whether a guide to the required disclosures 
would be beneficial to them, and if so, how much they would be willing 
to pay to receive a guide. The focus group announcement, published 
pursuant to the Paperwork Reduction Act of 1995, explains the planned 
focus group testing in more detail and provides other relevant 
information, including how and from whom to obtain more information 
about the planned testing process. The results of the focus group 
testing will be made available to the public after the testing has been 
completed. Because this will not occur until after the close of the 90-
day comment period for this proposal, the Department may decide to 
reopen the comment period on this proposal to solicit comments on such 
results. The Department decided to proceed with both this proposal and 
the focus group information-gathering techniques simultaneously, rather 
than consecutively, in order to avoid further, and unnecessary, delay. 
In making this decision, the Department is mindful of the fact that the 
ERISA section 408(b)(2) rulemaking, in general, began in 2007 \4\ and 
that the final rule was effective on July 1, 2012.\5\
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    \4\ 72 FR 70988 (December 13, 2007).
    \5\ 77 FR 5632 (February 3, 2012).
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E. Effective Date

    The Department proposes that the amendment to the final rule 
contained in this notice will be effective 12 months after publication 
of a final amendment in the Federal Register. The Department invites 
comments on whether the amendment, as finalized, should be effective on 
a different date.

F. Regulatory Impact Analysis

1. Executive Orders 12866 and 13563

    Executive Orders 12866 and 13563 direct agencies to assess all 
costs and benefits of available regulatory alternatives and, if 
regulation is necessary, to select regulatory approaches that maximize 
net benefits (including potential economic,

[[Page 13954]]

environmental, public health and safety effects, distributive impacts, 
and equity). Executive Order 13563 emphasizes the importance of 
quantifying both costs and benefits, of reducing costs, of harmonizing 
rules, and of promoting flexibility. OMB has determined that this 
action is not ``economically significant'' within the meaning of 
3(f)(1) of the executive order because it is not likely to have an 
effect on the economy of $100 million or more in any one year. The 
proposed rule is significant under section 3(f)(4) of the Executive 
Order, because it raises novel legal or policy issues arising from the 
President's priorities. Accordingly, the rule has been reviewed by OMB.

2. The Need for Regulatory Action

    On February 3, 2012, the Department published a final rule in the 
Federal Register concerning disclosures that must be furnished before 
plan fiduciaries enter into, extend or renew contracts or arrangements 
for services to certain pension plans in order for such a contract or 
arrangement to be ``reasonable,'' as required by ERISA section 
408(b)(2).
    In seeking to promote economic efficiency, the final regulation 
allowed covered service providers to satisfy the disclosure 
requirements using different documents from various sources as long as 
the documents, collectively, contained the required disclosures. The 
Department recognized, however, that allowing the disclosure 
requirements to be satisfied through multiple documents could make it 
difficult and time consuming for responsible plan fiduciaries to find 
and analyze particular disclosures. Moreover, the benefits associated 
with providing the disclosures could be diluted if the information 
provided to responsible plan fiduciaries is obscured in long, highly 
technical documents. Therefore, when publishing the interim final 
regulation, the Department requested comments regarding whether it 
should include a summary of or guide to the mandated disclosure 
requirements. Specifically, the Department requested comments 
addressing the costs, benefits, and burdens associated with requiring a 
summary or guide and how it could effectively construct such a 
requirement to ensure that it is practical and useful.
    Based on comments received in response to its request, the 
Department concluded when it issued the final rule that it lacked 
specific suggestions or data on how best to structure a guide or 
similar requirement and what the real costs of such a requirement would 
be. The Department therefore decided not to include such a requirement 
in the final rule without providing separately for public review and 
comment. The Department stated its intent to publish a Notice of 
Proposed Rulemaking under which covered service providers may be 
required to furnish a guide or similar tool along with the rule's 
initial disclosures. The Department believes that a guide will enable 
the responsible plan fiduciaries to find needed compensation and other 
information and will reduce the costs they otherwise would incur 
searching for such information when the required disclosures are 
contained in multiple or lengthy documents. The Department also 
believes that covered service providers are best positioned to provide 
the guide, when required, in a cost-effective manner, because they have 
the specialized knowledge required to determine where the required 
disclosures are located, and they generally will need to locate the 
information only once for a large number of clients, each of whom 
otherwise would have to locate the information separately. Anecdotal 
evidence suggests that small plan fiduciaries in particular often have 
difficulty obtaining required information in an understandable format, 
because small plans lack the bargaining power and specialized expertise 
possessed by large plan fiduciaries. Therefore, the Department 
anticipates that requiring the covered service providers to furnish a 
guide in circumstances where the required disclosures cannot otherwise 
be quickly and easily located will especially benefit small plan 
fiduciaries.

3. Summary of Impacts

    In accordance with OMB Circular A-4,\6\ Table 1 below depicts an 
accounting statement showing the Department's assessment of the 
benefits and costs associated with this proposed regulatory action.
---------------------------------------------------------------------------

    \6\ Available at https://www.whitehouse.gov/omb/circulars/a004/a-4.pdf.

                                            Table 1--Accounting Table
----------------------------------------------------------------------------------------------------------------
                                 Primary                      High                      Discount       Period
          Category              estimate    Low estimate    estimate     Year dollar      rate         covered
----------------------------------------------------------------------------------------------------------------
Benefits:
    Annualized Monetized             40.3          26.9          60.4          2013            7%     2014-2023
     ($millions/year) \7\...
                                     40.3          26.9          60.4          2013            3%     2014-2023
Note: Quantified benefits are from time savings resulting from use of the guide.
----------------------------------------------------------------------------------------------------------------
Costs:
    Annualized Monetized             13.4           6.8          22.3          2013            7%     2014-2023
     ($millions/year).......
                                     13.4           6.8          22.3          2013            3%     2014-2023
Note: Quantified costs are for service providers to prepare and deliver a guide.
----------------------------------------------------------------------------------------------------------------
Transfers:                                                      Not Applicable
----------------------------------------------------------------------------------------------------------------

4. Regulatory Alternatives
---------------------------------------------------------------------------

    \7\ The annualized monetized benefit and cost estimates are the 
same for the three and seven percent discount rates as the 
underlying yearly benefits and costs are the same for each year.
---------------------------------------------------------------------------

    Executive Orders 12866 and 13563 require an economically 
significant regulation to include an assessment of the costs and 
benefits of potentially effective and reasonably feasible alternatives 
to a planned regulation, and an explanation of why the planned 
regulatory action is preferable to the identified potential 
alternatives. While this proposed rule is not economically significant, 
the Department, nevertheless, believes it would be helpful to identify 
several alternatives considered to enhance the proposed rule's economic 
efficiency. The major alternatives are discussed below.
    Status quo: The Department considered, and rejected, some 
commenters' views on the interim final rule that the Department should 
take no further action--i.e., that the Department not adopt a guide or 
any formatting or

[[Page 13955]]

similar requirement. These commenters explained that, although they 
understand the Department's goal in requiring a tool such as a guide, 
they believe that a ``one size fits all'' format may not be feasible 
and that the costs associated with any such tool would be significant. 
For the reasons discussed at length earlier in this document, the 
Department continues to believe that furnishing a tool to assist 
responsible plan fiduciaries' review of the regulation's initial 
disclosures is essential.
    Mandate a summary: As discussed earlier in this preamble, 
commenters advocating for a summary stressed the need for medium and 
small plan fiduciaries to have a summary of the required disclosures to 
help them navigate through and analyze highly technical disclosures 
that are scattered throughout multiple documents. They argue that 
service providers could produce summaries more efficiently and at less 
cost than responsible plan fiduciaries. Other comments raised concerns 
that mandating the specific format of a summary would hinder innovation 
and not allow flexibility when dealing with the great variety of 
pension plan service arrangements. Some commenters raised additional 
concerns that a summary could unintentionally become the primary 
document upon which some fiduciaries would rely without thoroughly 
reviewing all of the required disclosures. Some commenters argued that 
the benefits of the summary would exceed the cost of preparing it. The 
Department believes that the costs to provide a summary likely would be 
higher for many service providers than the cost incurred to provide a 
guide or roadmap to responsible plan fiduciaries. For this reason, and 
the other reasons discussed earlier in this document including the 
concern that fiduciaries could over-rely on the summary, the Department 
viewed this option as less preferable than a guide requirement. The 
Department, however, specifically solicits comments on these issues, 
including ideas on how to overcome the danger that fiduciaries will 
rely exclusively on the summary, without appropriately considering the 
more complete disclosures from which the summary was derived.
    Conditional exemption: The Department considered mandating a guide, 
with page number requirement, but exempting covered service providers 
from this requirement if producing the guide were either impossible or 
unreasonably burdensome. Since publication of the final rule, some 
covered service providers have expressed concern to the Department that 
it would be prohibitively expensive and unreasonably burdensome for 
them to comply with a guide requirement, especially if such a 
requirement resembles the sample guide that is available on the 
Department's Web site, which includes page number references. Some of 
these service providers, for example, argue that their service 
contracts or arrangements and disclosure materials are unique and 
individualized based on the needs of each of their plan clients, and 
that this uniqueness makes it unreasonably burdensome, if not 
practically impossible, in these cases to efficiently produce guides on 
a group basis. The Department believes, however, that the public record 
neither supports nor refutes this position, and the Department is not 
independently aware of any research or studies bearing one way or the 
other on this issue. As explained earlier in this document, the 
Department intends to use this proposal as the vehicle to solicit 
specific comments and build a robust public record on this issue. The 
Department generally is skeptical that a guide and page number 
requirement is unreasonably burdensome in light of advances in 
technology, such as data tagging, and the standardization of many 
service agreements and investment and other disclosure documents. 
Absent credible evidence to the contrary, the Department believes that 
economies of scale still may be achieved by covered services providers 
that produce guides for multiple plan clients. Further, a conditional 
exemption of the type under this alternative also suffers from a degree 
of inherent ambiguity in that covered service providers and others 
would need metrics and standards to define the circumstances when the 
production of a guide was ``impossible'' or ``unreasonably 
burdensome.'' This alternative also would treat covered service 
providers differently in a way that may not be positive and beneficial 
for plans over the long run. For instance, the Department is concerned 
that giving an exemption to those covered service providers who cannot 
currently provide a guide efficiently would effectively reward them for 
their inefficiency. Also, such an exemption would undercut the policy 
being advanced by the new 408(b)(2) disclosures.
    After analyzing the comments, the Department chose to require 
covered service providers to provide fiduciaries with a guide to the 
required disclosures, but to allow the use of page number or a specific 
locator. The Department believes that the guide requirement strikes an 
appropriate balance between facilitating a plan fiduciary's evaluation 
of information critical to a prudent decision-making process and the 
costs and burdens associated with the preparation of a guide. The guide 
will provide clarity and specificity, while avoiding the uncertainty 
and burdens inherent in constructing a summary of the required 
disclosures. In contrast, a summary could result in unnecessarily 
duplicative disclosures for at least some service providers to the 
extent the same information that is disclosed to comply with the 
initial disclosures is also required to be disclosed on the summary. 
Further, for some service providers, some information that must be 
disclosed may be highly technical and may not lend itself to a 
``simplified'' summary. The Department agrees that a summary document 
may be useful to some fiduciaries, especially in comparing fees and 
services among competing service providers, but is concerned that a 
summary may unintentionally become the primary document some 
responsible plan fiduciaries would rely on, which would be counter to 
the Department's intention that required disclosures be reviewed and 
understood by responsible plan fiduciaries.
    The Department is making available on its Web site (https://www.dol.gov/ebsa/pdf/408b2sampleguide.pdf) a sample guide to the 
initial disclosures to facilitate public comments on this proposal and 
solicits comments on whether including such a model in the final rule 
would provide useful guidance and reduce compliance costs for at least 
some service providers.

5. Affected Entities and Other Assumptions

    The Department estimates that this proposed rule will affect about 
45,000 defined benefit pension plans with over 40.9 million 
participants and almost 638,000 defined contribution pension plans with 
approximately 88.7 million participants. The overwhelming majority of 
the affected businesses sponsoring these plans will be small 
businesses: out of the affected pension plans, the Department estimates 
that approximately 35,000 are small defined benefit plans and 563,000 
small

[[Page 13956]]

individual account plans.\8\ Most of the defined contribution pension 
plans, approximately 506,000, are participant-directed individual 
account plans.
---------------------------------------------------------------------------

    \8\ Estimates of the number of plans and participants are taken 
from the EBSA's 2011 Pension Research File, https://www.dol.gov/ebsa/publications/form5500dataresearch.html#planbulletins. Small pension 
plans are plans with generally less than 100 participants, as 
specified in the Form 5500 instructions.
---------------------------------------------------------------------------

    The proposed regulation applies to contracts or arrangements 
between covered plans and covered service providers. A familiar example 
is a contract between a recordkeeper and a covered individual account 
plan under which the recordkeeper will make available a platform of 
designated investment alternatives consisting of mutual funds, monitor 
plan and participant and beneficiary transactions, and provide plan 
administrative services such as maintaining participant accounts, 
records, and statements.\9\ In order to estimate the number of covered 
service providers and the number of service provider-plan arrangements, 
the Department used data from Schedule C of the plan year 2011 Form 
5500 submissions filed with the Department.
---------------------------------------------------------------------------

    \9\ In order to be a covered service provider, the regulation 
also requires that a service provider must reasonably expect $1,000 
or more in compensation, direct or indirect, to be received in 
connection with the services to the plan. 29 CFR 250.408b-
2(c)(1)(iii).
---------------------------------------------------------------------------

    In general, only plans with 100 or more participants that have made 
payments to a service provider of at least $5,000 are required to file 
the Form 5500 Schedule C. These plans are also required to report the 
type of services provided by each service provider. The Department 
counted the service providers most likely to provide the services 
described in paragraph (c)(1)(iii) of the final rule, which defines 
which service providers are ``covered'' by the rule.\10\ In total, 
there were nearly 12,000 distinct covered service providers reported in 
the Form 5500 Schedule C data.
---------------------------------------------------------------------------

    \10\ In order to provide a reasonable estimate, the Department 
used Schedule C service codes where it believed a majority of 
service providers would be covered service providers. The following 
codes were used: service providers with reported type codes 
corresponding to contract administrator, recordkeeping and 
information management, consulting (pension), custodial (other than 
securities), custodial (pension), trustee (individual), trustee 
(bank, trust company, or similar financial institution), insurance 
agents and brokers, insurance services, trustee (discretionary), 
trustee (directed), investment advisory (participant), investment 
advisory (plan), investment management, real estate brokerage, 
securities brokerage, valuation (appraisals, etc.), copying and 
duplicating, participant loan processing, participant 
communications, and foreign entities.
---------------------------------------------------------------------------

    The Department acknowledges that this estimate may be imprecise. On 
the one hand, some of the service providers counted here may not be 
covered service providers, but the Department is unable to further 
refine this group due to the limitations of the Schedule C data. On the 
other hand, because small plans generally do not file Schedule C, the 
number of covered service providers will be understated if a 
substantial number of them service only small plans. However, the 
Department believes that most small plans use the same service 
providers as large plans; therefore, the estimate based on the Schedule 
C filings by large plans is reasonable.\11\
---------------------------------------------------------------------------

    \11\ While in general small plans are not required to file a 
Schedule C, some voluntarily file. Looking at Schedule C filings by 
small plans, the Department concluded that most small plans 
reporting data on Schedule C used the same group of service 
providers as most larger plans.
---------------------------------------------------------------------------

    Schedule C data was also used to count the number of covered plan-
service provider arrangements. On average, defined benefit plans employ 
more covered service providers per plan than defined contribution 
plans, and large plans use more covered service providers per plan than 
small plans. In total, the Department estimates that defined benefit 
plans have over 136,000 arrangements with covered service providers, 
while defined contribution plans have over 2 million arrangements. The 
Department does not have sufficient data to estimate the number of 
these arrangements that will require a guide because the required 
disclosures are contained in multiple or lengthy documents. Therefore, 
for purposes of the analysis, the Department assumes that all of these 
arrangements will require a guide.
    In the interim final and final rule, the Department assumed that 50 
percent of disclosures would be delivered electronically. The 
Department did not receive any comments regarding this assumption; 
therefore, the Department continues to assume that about 50 percent of 
disclosures between covered service providers and responsible plan 
fiduciaries are delivered only in electronic format.
    The Department lacks data on the number of service providers that 
are currently providing a guide or other aid to help responsible plan 
fiduciaries understand the disclosures provided and find required 
information. Therefore, the Department has estimated benefits and costs 
of the rule assuming that currently covered service providers are not 
providing guides or other aids to their disclosures. To the extent that 
some covered service providers are already voluntarily providing 
guides, both benefits and costs will be overestimated.
    Similarly, our assumption of 100 percent compliance with the 2012 
final rule, if incorrect, would cause our estimate of time savings to 
be too high. In such a case, however, this proposed rule could have the 
effect of increasing compliance with the 2012 final rule, which would 
yield both time costs (associated with review of disclosures) and 
consumer protection benefits that have not been quantified in this 
impact analysis.

6. Benefits

    The final regulation allows covered service providers to make the 
required disclosures through multiple documents. However, comments on 
the interim final rule raised concerns that providing many voluminous 
documents to fiduciaries could overwhelm them and the time and effort 
needed to find the relevant information still could be substantial. 
This proposed rule addresses this concern by requiring the covered 
service provider to provide the responsible plan fiduciary with a guide 
that specifically identifies the document and page or other specific 
locator, such as a section, that will allow the responsible plan 
fiduciary to quickly and easily find the required disclosures if the 
disclosures are not contained in a single document, or if the document 
is in excess of [RESERVED] number of pages. The positive net benefit of 
the guide requirement arises from specialization and economies of 
scale. Covered service providers are most familiar with the documents 
containing the required disclosures, and will make similar, if not 
identical, disclosures to many different responsible plan fiduciaries. 
Therefore, the Department expects that covered service providers will 
be able to find the information and create a guide, when required, at a 
lower cost than the responsible plan fiduciary. Some service providers 
will be able to spread these costs across hundreds, and in some cases, 
thousands, of arrangements.
    The Department estimates that there are 2.2 million covered 
arrangements between 12,000 covered service providers and nearly 
684,000 covered plans for which disclosures are required under the 
final rule. While some of these arrangements are simple, others are 
complex and would require much information to be disclosed. The 
Department is not aware of any information that currently exists that 
could be used to measure the time savings that would result from the 
guide in circumstances where a guide would be required.

[[Page 13957]]

    In order to produce an estimate of possible time savings, the 
Department conducted an informal study with two groups of staff. One 
group searched for specified information in plan and investment 
documents using a guide-like document, while the other group searched 
for the specified information in the same documents using a list of the 
documents in which the information could be found. The result of the 
informal study was that the group that used the guide-like document, on 
average, saved 30 minutes compared to that group that used the list. 
While only a subset (a convenience sample) of the information required 
to be disclosed by the final rule was searched for as part of the 
informal study, the results provide a basis for a conservative estimate 
of possible time savings that would result from the guide. Using this 
time savings as a proxy for the time savings that would be realized by 
a plan fiduciary, a total annual time savings of 342,000 hours would 
result (0.5 hours x 684,000 fiduciaries). If the responsible plan 
fiduciary's time were valued at $118 per hour, the value of the annual 
time saved would be $40.3 million.\12\ \13\
---------------------------------------------------------------------------

    \12\ EBSA estimates of 2013 labor rates include wages, other 
benefits, and overhead based on the National Occupational Employment 
Survey (June 2012, Bureau of Labor Statistics) and the Employment 
Cost Index (September 2012, Bureau of Labor Statistics). Total labor 
costs were estimated to average $126.07 per hour over the period for 
legal professionals, $67.76 for financial professionals, and $29.14 
per hour for clerical staff. This estimate uses the average labor 
rate of a financial manager, $117.88, as a proxy for a plan 
fiduciary's labor rate.
    \13\ Many disclosures will stay the same over time, and 
therefore fiduciaries could experience lesser savings two years 
after implementation of the rule (and every year beyond) because 
they would already have gone through the upfront process of learning 
which sections of which documents contain the necessary disclosures. 
On the other hand, plans may put out bids for service providers, for 
example, once every three to five years, at which time they may 
review disclosures from multiple service providers and many assets, 
thereby experiencing abnormally high time savings if they have 
access to disclosure guides. Given these offsetting effects, the 
Department assumes that the estimate presented here represents a 
plausible average across years.
---------------------------------------------------------------------------

    The Department notes that the amount of time savings is uncertain. 
If the average time savings were only 20 minutes, the total value of 
the time saving would be $26.9 million, while the value of the time 
savings would be $60.4 million if the average time savings were 45 
minutes. Time savings also will depend on the sophistication and 
abilities of the individual fiduciary reviewer. For instance, if a 
reviewing responsible plan fiduciary is sophisticated relative to the 
informal study's participants, the savings to this fiduciary would be 
more toward the lower point of this range, and the reverse would be 
true to the extent the reviewing responsible plan fiduciary is less 
sophisticated. Time savings might be greater to the extent that 
responsible plan fiduciaries will have to review changes to previously 
disclosed information, plans have multiple plan fiduciaries that will 
experience the time savings, or plans review bids from multiple service 
providers in response to requests for proposal.
    An additional benefit of the guide requirement is that appropriate 
use of the guide will provide responsible plan fiduciaries with 
confidence that they have found the relevant information in the covered 
service provider's disclosures to fulfill their ERISA fiduciary 
responsibility to determine whether a contract or arrangement is 
reasonable. This confidence will lead to a further reduction in the 
time a responsible plan fiduciary spends searching through documents to 
make certain they have not missed additional relevant information. 
While the Department was unable to estimate this portion of the time 
savings, it has the potential to be large.
    The guide document used in the informal study included pagination, 
because page numbers are used in most industry contracts and similar 
documents that contain the required disclosures, and the Department 
wanted to obtain an upper-bound estimate of the benefits that would be 
obtained through the most specific locator, a page number. The 
Department did not analyze the incremental benefits of providing 
pagination relative to providing the section or area by name or other 
identifier, because it does not have the necessary data on the 
prevalence and characteristics of other identifiers to perform a 
meaningful analysis. The Department is aware of numerous possible 
identifiers other than pagination, for example, by page and line, 
paragraph, section, chapter, part, and volume. In addition, in the case 
of electronic media, other identifiers include character, screen, Web 
page, link, and folder. However, unlike pagination, we have no 
information on the extent to which these identifiers are used in 
employee benefit contracts and similar documents. The Department, 
therefore, solicits comments on the prevalence and characteristics of 
identifiers other than pagination and their usefulness. The Department 
also solicits comments on whether there are any relevant federal or 
state regulatory or similar requirements or standards on effective and 
not misleading disclosures that should be considered by the Department. 
Information received will be used to analyze and attempt to quantify 
the incremental benefits of alternatives to pagination. Our premise is 
that there is a positive correlation between the precision of the 
identifier and the ease with which it can be located and the benefits 
realized, such that more precise and easily located identifiers will 
result in more time saved, and less precise identifiers will result in 
less time saved. For instance, if pagination is a more precise 
identifier than section, identification by section only will result in 
fewer benefits to plan fiduciaries than identification by pagination. 
Commenters are encouraged to be specific in identifying and describing 
the characteristics of identifiers. In addition, please also provide 
data, if available, on incremental costs of pagination relative to 
other identifiers.

7. Costs

    As stated above, the proposed regulation modifies the requirements 
of the final rule by requiring covered service providers that provide 
the required disclosures in multiple or lengthy documents to provide a 
guide to the disclosures to responsible plan fiduciaries that will 
enable responsible plan fiduciaries to effectively review the 
disclosures made under the final regulation. The hour and cost burden 
associated with the guide requirement result from preparing and 
distributing the guide. As noted above, the Department estimates that 
approximately 12,000 covered service providers, 684,000 covered plans, 
and 2.2 million arrangements with covered plans would be affected by 
this proposed rule.
    Covered service providers are responsible for locating the 
information and preparing the guide. In the initial year, service 
providers will have to locate the required information in the 
disclosures and create the guide. The Department believes that covered 
service providers will incur lower costs to locate this information 
than responsible plan fiduciaries, because they are more familiar with 
the required disclosure documents. Once the covered service provider 
locates the information in the documents, it can be used to create 
multiple guides.
    While the final rule covers contracts and arrangements, the burden 
of creating the guide will be proportional to the number of products 
and services included in the contracts. In order to estimate the total 
cost associated with the guide requirement, the Department must 
determine the number of products and services that will require a 
guide. The Department is uncertain regarding the number of products or 
services;

[[Page 13958]]

however, the Department believes that the total number of products 
offered by financial services firms exceeds the total number of 
services provided by other service providers. In 2012, there were a 
total of 16,380 mutual funds, closed-end funds, exchange traded funds, 
and unit investment trusts.\14\ There also were 776 financial service 
firms that provided investment management services in the U.S. Seventy-
six percent of these firms were independent fund advisors and the rest 
were brokerage firms, banks and thrifts, insurance companies, or non-
U.S. fund advisors.
---------------------------------------------------------------------------

    \14\ 2013 Investment Company Fact Book, https://www.icifactbook.org/, retrieved 11 September 2013.
---------------------------------------------------------------------------

    Due to the uncertainty regarding the number of products and 
services that would be subject to the guide requirement, the Department 
has created low-range, medium-range, and high-range estimates. The 
Department calculated these estimates by multiplying the number of 
products offered by financial service firms (16,380) by three, four and 
five resulting in a low-range estimate of 49,140 products and services, 
a middle-range estimate of 65,520 products and services, and a high-
range of 81,900 products and services.
    In order to estimate the costs associated with the guide 
requirement, the Department also must estimate the time required to 
create a guide for each unique product or service. The Department lacks 
information on the time required by covered service providers to create 
a guide. The Department believes it is reasonable to assume that it 
will take a covered service provider no more than one-half hour to 
locate the required information in its own document. Once the 
information is found and the appropriate document, page, and (if 
applicable) section number is noted, the covered service provider can 
construct the guide. The Department estimates that the relevant 
information could be found and the guide could be constructed using a 
total of three hours of a financial professional or similar 
professional's time with a labor rate of $67.76 per hour, including 
time to review the document for accuracy.\15\ The Department constructs 
a low-range estimate using two hours, a medium-range estimate using 
three hours, and a high-range estimate using four hours.
---------------------------------------------------------------------------

    \15\ The Department estimates 2013 hourly labor rates include 
wages, other benefits, and overhead based on data from the National 
Occupational Employment Survey (June 2012, Bureau of Labor 
Statistics) and the Employment Cost Index (September 2012, Bureau of 
Labor Statistics); the 2012 estimated labor rates are then inflated 
to 2013 labor rates.
---------------------------------------------------------------------------

    Based on the foregoing, the Department's low-range estimate of the 
cost covered service providers would incur to create their guides for 
the products and services is approximately $6.7 million annually (3 x 
16,380 products and services x 2 hours \16\ x $67.76), its medium-range 
estimate is $13.3 million annually (4 x 16,380 products and services x 
3 hours \17\ x $67.76), and its high-range estimate is $22.2 million 
annually (5 x 16,380 products and services x 4 hours \18\ x $67.76).
---------------------------------------------------------------------------

    \16\ The total associated hour burden is 98,300 hours.
    \17\ The total associated hour burden is 196,600 hours.
    \18\ The total associated hour burden is 327,600 hours.
---------------------------------------------------------------------------

    The Department also conducted a threshold analysis in the 
Uncertainty section, below, which demonstrates the reasonableness of 
the assumption that the cost of requiring covered service providers to 
create a guide is less than the estimated benefit of $40.3 million 
annually.
    The required disclosures, including the guide, can be delivered 
electronically at minimal costs, because material and mailing costs are 
not incurred for guides that are delivered electronically. Similar to 
the final rule, this regulatory impact analysis assumes that about 50 
percent of the guides will be sent electronically (1.1 million guides 
representing 50 percent of the approximately 2.2 million contracts or 
arrangements) with minimal associated cost. The Department expects 
guides that are distributed on paper will be one to two pages in 
length, and that no additional postage will be required, because the 
guide will be included with the other disclosures being sent to the 
responsible plan fiduciary. If the guide is two pages, the associated 
material and printing cost will be $108,000 (1.1 million guides x 2 
pages x $0.05 per page).

8. Uncertainty

    The Department lacks complete data and empirical evidence to 
estimate the cost for covered service providers to create the guide. 
However, the Department believes that the costs to produce the guide 
will be less than the benefit derived from providing it to responsible 
plan fiduciaries for several reasons. For example, the burden will be 
on the covered service provider to provide the location of the required 
disclosures. This should reduce overall search time, because the 
covered service provider is more familiar with the documents than the 
responsible plan fiduciary. In addition, economies of scale will 
further reduce the costs, since service providers frequently offer 
multiple products that use similar documents and service multiple 
clients with the same products. Therefore, a single or very similar 
guide could be used for many similar products and clients with little 
or no marginal cost impact. In addition, the Department expects reduced 
costs to result, because, on average, responsible plan fiduciaries are 
expected to have higher wages than the financial professional the 
Department anticipates will construct the guides.
    There are several ways covered service providers can develop 
guides. With respect to guides that include information about 
investment products (e.g., mutual funds, bank collective funds, or 
insurance products), the Department believes that over time, the market 
will evolve such that the issuers of investment products will furnish 
product-specific investment-related fee and expense information and 
other material needed to create a guide directly to covered service 
providers or to a third party electronic data base containing such 
information, because the issuers can prepare and disseminate the data 
in the most cost-effective manner. Covered service providers, such as 
recordkeepers that offer a platform of designated investment 
alternatives to a covered plan, will receive the fee and expense 
information and incorporate it into the guides they prepare for 
responsible plan fiduciaries.
    In order to estimate the total cost associated with the guide 
requirement, the Department must estimate the total number of services 
and products for which a guide must be prepared. The Department lacks 
sufficient data to make this estimate. However, the Department believes 
that the total number of products offered by financial services firms 
exceeds the total number of services provided by other service 
providers. In 2012, there were a total of 16,380 mutual funds, closed-
end funds, exchange traded funds, and unit investment trusts.\19\ There 
also were 776 financial service firms that provided investment 
management services in the U.S. Seventy-six percent of these firms were 
independent fund advisors and the rest were brokerage firms, banks and 
thrifts, insurance companies, or non-U.S. fund advisors.
---------------------------------------------------------------------------

    \19\ 2013 Investment Company Fact Book, https://www.icifactbook.org/, retrieved 11 September 2013.
---------------------------------------------------------------------------

    In order to create a reasonable upper bound for the total number of 
products and services that will have to be disclosed in a guide, the 
Department assumes that five times the number of

[[Page 13959]]

products offered by financial service firms or 81,900 products and 
services (16,380 x 5) would require a guide. This estimate accounts for 
all products and services subject to the guide requirement, and 
includes circumstances in which the content necessary to create the 
guide is provided directly to a covered service provider who 
incorporates it into its own guide for the products and services it 
provides to the covered plan. For example, recordkeepers often provide 
a variety of services to plans, including maintaining a platform of 
designated investment alternatives, as well as administration and 
monitoring of participant and beneficiary transactions (e.g., 
enrollment, payroll deductions and contributions, offering designated 
investment alternatives, and other covered plan investments, loans, 
withdrawals and distributions). When a recordkeeper enters into a 
contract or arrangement with a covered plan to provide such services 
and the designated investment alternatives consist of mutual funds, the 
recordkeeper may receive investment-related fee and expense data from a 
mutual fund company, or a third-party electronic database, and the 
recordkeeper will incorporate this information into the guide for its 
contract or arrangement with the covered plan.\20\
---------------------------------------------------------------------------

    \20\ The estimate also accounts for the situations when covered 
service providers must include content in the guide regarding 
indirect compensation received in connection with services described 
pursuant to paragraph (c)(1)(iv)(A) of the rule.
---------------------------------------------------------------------------

    As stated earlier, the mid-range estimate of the benefits to be 
derived from creating and providing the guide was $40.3 million. If the 
Department assumes that an individual with a labor rate of $67.76 per 
hour creates the guide, then the use of, on average, 7.4 hours \21\ to 
create the guide for each product or service would cause the costs of 
the proposed rule to equal its estimated benefits. This 7.4-hour total 
would entail finding all the required information, noting the page and 
section number, and entering the information on the guide. The 
Department believes that nearly seven hours is more than adequate time 
to perform this function and thus the rule's costs are likely to be 
less than or equal to its benefits.
---------------------------------------------------------------------------

    \21\ This number was derived by dividing the $40.3 million mid-
range estimate of the cost of the guide by $67.76 per hour and 
dividing this quotient by the estimated 49,140 products and services 
that will require a guide.
---------------------------------------------------------------------------

    The Department performed a sensitivity analysis by increasing the 
estimate of the total number of products. This estimate was obtained by 
multiplying the number of financial services products (16,380) by seven 
and ten and then calculating the break-even average number of hours 
associated with preparing a guide. As the total number of hours to be 
allocated stayed the same, the associated average hours per product 
were 5.3 and 3.7 hours respectively as the number of products 
increases. As implied by the upper bound of four hours for guide 
creation mentioned in the Cost section, above, the Department believes 
that 3.7 hours would be more than adequate, on average, to create a 
guide for a single product or service or to add a product or service to 
an existing guide, and thus, even using an extremely high assumption 
regarding the number of affected products per financial services firm, 
the rule's costs are likely to be less than or equal to its benefits.
    The Department's estimates assume that costs to create the guide 
would remain constant over time. However, the Department expects there 
will be a downward trend for such costs in future years, because 
covered service providers (i) already will have guides for most 
products and services and only would need to update them as 
appropriate, and (ii) already will have created a template for the 
guide and will be familiar with how to incorporate information 
regarding new products and services into the template.
    The Department welcomes public comments regarding its estimates of 
the benefits and costs of the proposed rule. The Department is 
particularly interested in information and data regarding the potential 
for time savings to plan fiduciaries, the number of products, services, 
contracts and arrangements for which a guide would be required, the 
costs required to create the guide (including costs incurred for system 
changes and costs related to placing page or section number references 
in the guide), the potential for economies of scale in constructing the 
guide, and current best practices in the pension plan service provider 
industry for providing guides or summaries to clients.

9. Regulatory Flexibility Analysis

    The Regulatory Flexibility Act (5 U.S.C. 601, et seq.) (RFA) 
imposes certain requirements with respect to Federal rules that are 
subject to the notice and comment requirements of section 553(b) of the 
Administrative Procedure Act (5 U.S.C. 551, et seq.) and which are 
likely to have a significant economic impact on a substantial number of 
small entities. Unless an agency determines that a proposal is not 
likely to have such an impact, section 604 of the RFA requires that the 
agency present a regulatory flexibility analysis (RFA) describing the 
rule's impact on small entities and explaining how the agency made its 
decisions with respect to the application of the rule to small 
entities. Small entities include small businesses, organizations and 
governmental jurisdictions.
a. Need for and Objectives of the Rule
    Service providers to pension plans increasingly have complex 
compensation arrangements that may present conflicts of interest. Thus, 
small plan fiduciaries face increasing difficulty in carrying out their 
duty to assess whether the compensation paid to their service providers 
is reasonable. This proposed rule is designed to help both large and 
small plan fiduciaries identify and locate the information they need to 
negotiate with and select service providers who offer high quality 
services at reasonable rates and to comply with their fiduciary duties. 
The Department's requirement for covered service providers to provide a 
guide to responsible plan fiduciaries will be especially important to 
small plan fiduciaries as they review and analyze the required 
disclosures.
b. Affected Small Entities
    The Department has limited data on the number of small entities 
affected by the rule. Using the Schedule C data from the Form 5500 the 
Department estimates that 11,800 service providers listed on the 
Schedule C have fees reported that total less than $7 million. This 
estimate of the number of small entities should be viewed as an upper 
bound as these service providers most likely have other sources of 
revenue besides pension plans, and fees from the vast majority of small 
plans are also not captured in this estimate. These service providers 
generally consist of professional service enterprises that provide a 
wide range of services to plans, such as investment management or 
advisory services for plans or plan participants, and accounting, 
auditing, actuarial, appraisal, banking, consulting, custodial, 
insurance, legal, recordkeeping, brokerage, third party administration, 
or valuation services. Many of these service providers have special 
education, training, and/or formal credentials in fields such as ERISA 
and benefits administration, employee compensation, taxation, actuarial 
science, law, accounting, or finance.
c. Compliance Requirements
    The classes of small service providers subject to the proposed rule 
include

[[Page 13960]]

service providers who are ERISA fiduciaries (for example, because they 
manage plan investments or are fiduciaries to investment vehicles 
holding plan assets in which the covered plan has a direct entity 
investment), who provide services as registered investment advisers to 
plans, who receive indirect compensation (or certain compensation from 
related parties) in connection with provision of specified services 
(namely, accounting, auditing, actuarial, appraisal, banking, certain 
consulting, custodial, insurance, participant investment advisory, 
legal, recordkeeping, securities or other investment brokerage, third 
party administration, or valuation services) or who provide 
recordkeeping or brokerage services involving a platform of investment 
options for participant-directed individual account plans.
    These small covered service providers are required to disclose 
certain written information to responsible plan fiduciaries in 
connection with their service contracts or arrangements with covered 
plans. These proposed regulations require that covered service 
providers furnish the responsible plan fiduciary with a guide 
specifically identifying the document, page, and (if applicable) number 
where the required information is located. Such information includes a 
description of the services included in the arrangement and what direct 
and indirect compensation will be received in connection with the 
arrangement. Service providers whose arrangements include making 
investment products available to plans additionally must disclose 
specified investment-related information about such products. The 
required disclosures must be provided to the responsible plan fiduciary 
reasonably in advance of the parties entering into the contract or 
arrangement for covered services. Preparing compliant disclosures often 
will require knowledge of financial products and services and related 
compensation and revenue sharing arrangements.
    As noted earlier in the impact analysis, there are economies of 
scale in the creation of guides. It would follow that, per product or 
service, small service providers would experience a cost of guide 
creation that is higher than the average discussed in section F.7, 
above.
d. Agency Steps To Minimize Negative Impacts
    The Department took a number of steps to minimize any negative 
impact of the proposed rule on small service providers. One of the main 
reasons the Department chose to require covered service providers to 
provide a guide to responsible plan fiduciaries, rather than a summary, 
was that a guide would help small plan fiduciaries locate important 
information disclosed in multiple, often long and complex documents at 
a lower compliance cost to covered service providers.
    The policy justification for these requirements includes benefits 
to plan fiduciaries, who will realize savings in the form of reduced 
search costs more than commensurate to the compliance costs shouldered 
by covered service providers. Small plan fiduciaries are likely to 
benefit most. Small covered service providers, while shouldering the 
cost of providing disclosure, likely will often pass these costs on to 
their plan clients, who, in turn, are estimated to reap a net benefit, 
on average, that will more than offset this shifted compliance cost.

10. Paperwork Reduction Act

    As part of its continuing effort to reduce paperwork and respondent 
burdens, the Department of Labor conducts a preclearance consultation 
program to provide the general public and Federal agencies with an 
opportunity to comment on proposed and continuing collections of 
information in accordance with the Paperwork Reduction Act of 1995 (PRA 
95) (44 U.S.C. 3506(c)(2)(A)). This helps to ensure that requested data 
can be provided in the desired format, reporting burden (time and 
financial resources) is minimized, collection instruments are clearly 
understood, and the impact of collection requirements on respondents 
can be properly assessed. Currently, the Department is soliciting 
comments concerning the proposed information collection request (ICR) 
included in this proposed rule, which would amend OBM Control Number 
1210-0133, Contracts or Arrangements Under Section 408(b)(2)--Fee 
Disclosure. A copy of the ICR may be obtained by contacting the 
individual identified below in this notice. The Department has 
submitted a copy of the proposed information collection to OMB in 
accordance with 44 U.S.C. 3507(d) for review of its information 
collections. The Department and OMB are particularly interested in 
comments that:
     Evaluate whether the proposed collection of information is 
necessary for the proper performance of the functions of the agency, 
including whether the information will have practical utility;
     Evaluate the accuracy of the agency's estimate of the 
burden of the collection of information, including the validity of the 
methodology and assumptions used;
     Enhance the quality, utility, and clarity of the 
information to be collected; and
     Minimize the burden of the collection of information on 
those who are to respond, including through the use of appropriate 
automated, electronic, mechanical, or other technological collection 
techniques or other forms of information technology, e.g., permitting 
electronic submission of responses.
    Comments should be submitted to the addresses listed in the 
ADDRESSES section at the beginning of this Notice and received by the 
Department on or before June 10, 2014. Comments also may be submitted 
to the Office of Management and Budget at the following address: Office 
of Information and Regulatory Affairs, Attn: OMB Desk Officer for DOL-
EBSA, Office of Management and Budget, Room 10235, 725 17th Street NW., 
Washington, DC 20503; by Fax: 202-395-6881 (this is not a toll-free 
number); or by email: OIRA_submission@omb.eop.gov. OMB requests that 
comments be received within 30 days of publication of the Notice of 
Proposed Rulemaking to ensure their consideration. A copy of this ICR 
with applicable supporting documentation; including a description of 
the likely respondents, proposed frequency of response, and estimated 
total burden may be obtained free of charge from the RegInfo.gov Web 
site at https://www.reginfo.gov/public/do/PRAViewICR?ref_nbr=[201208-
1210-001] or by contacting G. Christopher Cosby, Office of Policy and 
Research, U.S. Department of Labor, Employee Benefits Security 
Administration, 200 Constitution Avenue NW., Room N 5647, Washington, 
DC 20210. Telephone (202) 219-8410; Fax: (202) 219 4745. These are not 
toll free numbers.
    The information collection requirements of the proposed rule are 
contained in paragraph (c)(1)(iv)(H), which requires covered service 
providers to provide responsible plan fiduciaries with a guide 
specifically identifying the document, page number, and (if applicable) 
section number where the required data is located within multiple or 
complex documents.
    The Department requested comments regarding a guide requirement 
when the interim final regulation was published. Although no public 
comments were received that specifically addressed the paperwork burden 
analysis of the information collections at the interim final rule 
stage, the comments that were

[[Page 13961]]

submitted and described earlier in this preamble, contained information 
relevant to the costs and administrative burdens attendant to this 
proposal. The Department took such public comments into account in 
connection with developing this proposed rule and the paperwork burden 
analysis summarized below.
Annual Hour Burden
    As stated earlier in this preamble, the Department estimated an 
hour burden range for the guide requirement of: 98,300 hours with an 
equivalent cost of $6.7 million annually (low-estimate), 196,600 hours 
with an equivalent cost of $13.4 million annually (medium-estimate), 
and 327,600 hours with an equivalent cost of $22.2 million annually 
(high-estimate). The Department's methodology for estimating the hour 
burden is discussed in detail in the Costs section of the Regulatory 
Impact Analysis, above.
Annual Cost Burden
    As stated earlier in this preamble, the Department estimated that 
the material and printing cost burden associated with creating the 
guide would be $108,000 annually. The Department's methodology for 
estimating the cost burden is discussed in detail in the Costs section 
of the Regulatory Impact Analysis, above.
    These paperwork burden estimates are summarized as follows:
    Type of Review: Revision of existing collection.
    Agency: Employee Benefits Security Administration, Department of 
Labor.
    Title: Reasonable Contract or Arrangement Under Section 408(b)(2)--
Fee Disclosure.
    OMB Control Number: 1210-0133.
    Affected Public: Business or other for-profit; not-for-profit 
institutions.
    Estimated Number of Respondents: 12,000 annually.
    Estimated Number of Responses: 2.2 million.
    Frequency of Response: Annually; occasionally.
    Estimated Annual Burden Hours: 196,600 hours annually.
    Estimated Annual Burden Cost: $108,000 annually.

11. Congressional Review Act

    The proposed rule is subject to the Congressional Review Act 
provisions of the Small Business Regulatory Enforcement Fairness Act of 
1996 (5 U.S.C. 801 et seq.) and, if finalized, will be transmitted to 
Congress and the Comptroller General for review. The proposed rule is 
not a ``major rule'' as that term is defined in 5 U.S.C. 804, because 
it is not likely to result in (1) an annual effect on the economy of 
$100 million or more; (2) a major increase in costs or prices for 
consumers, individual industries, or Federal, State, or local 
government agencies, or geographic regions; or (3) significant adverse 
effects on competition, employment, investment, productivity, 
innovation, or on the ability of United States-based enterprises to 
compete with foreign-based enterprises in domestic and export markets.

12. Unfunded Mandates Reform Act

    For purposes of the Unfunded Mandates Reform Act of 1995 (Pub. L. 
104-4), as well as Executive Order 12875, the proposed rule does not 
include any Federal mandate that may result in expenditures by State, 
local, or tribal governments in the aggregate of more than $100 
million, adjusted for inflation, or increase expenditures by the 
private sector of more than $100 million, adjusted for inflation.

13. Federalism Statement

    Executive Order 13132 (August 4, 1999) outlines fundamental 
principles of federalism, and requires the adherence to specific 
criteria by Federal agencies in the process of their formulation and 
implementation of policies that have substantial direct effects on the 
States, the relationship between the national government and States, or 
on the distribution of power and responsibilities among the various 
levels of government. The proposed rule does not have federalism 
implications because it has no substantial direct effect on the States, 
on the relationship between the national government and the States, or 
on the distribution of power and responsibilities among the various 
levels of government. Section 514 of ERISA provides, with certain 
exceptions specifically enumerated, that the provisions of Titles I and 
IV of ERISA supersede any and all laws of the States as they relate to 
any employee benefit plan covered under ERISA. The requirements 
implemented in the proposed rule do not alter the fundamental reporting 
and disclosure requirements of the statute with respect to employee 
benefit plans, and, as such, have no implications for the States or the 
relationship or distribution of power between the national government 
and the States.

List of Subjects in 29 CFR Part 2550

    Employee benefit plans, Exemptions, Fiduciaries, Investments, 
Pensions, Prohibited transactions, Reporting and recordkeeping 
requirements, and Securities.

    For the reasons set forth in the preamble, the Department of Labor 
proposes to amend chapter XXV, subchapter F, part 2550 of title 29 of 
the Code of Federal Regulations as follows:

SUBCHAPTER F--FIDUCIARY RESPONSIBILITY UNDER THE EMPLOYEE RETIREMENT 
INCOME SECURITY ACT OF 1974

PART 2550--RULES AND REGULATIONS FOR FIDUCIARY RESPONSIBILITY

0
1. The authority citation for part 2550 is revised to read as follows:

    Authority:  29 U.S.C. 1135 and Secretary of Labor's Order No. 1-
2011, 77 FR 1088 (Jan. 9, 2012). Sec. 2550.401c-1 also issued under 
29 U.S.C. 1101. Sec. 2550.404a-1 also issued under sec. 657, Pub. L. 
107-16, 115 Stat. 38. Sections 2550.404c-1 and 2550.404c-5 also 
issued under 29 U.S.C.1104. Sec. 2550.408b-1 also issued under 29 
U.S.C. 1108(b)(1) and sec. 102, Reorganization Plan No. 4 of 1978, 5 
U.S.C. App. 1. Sec. 2550.408b-19 also issued under sec. 611, Pub. L. 
109-280, 120 Stat. 780, 972, and sec. 102, Reorganization Plan No. 4 
of 1978, 5 U.S.C. App. 1. Sec. 2550.412-1 also issued under 29 
U.S.C.1112.

0
2. Amend 2550.408b-2 by:
0
a. Adding paragraph (c)(1)(iv)(H):
0
b. Revising paragraph (c)(1)(v)(B)(2) to read as follows:


Sec.  2550.408b-2  General statutory exemption for services or office 
space.

* * * * *
    (c) * * *
    (1) * * *
    (iv) * * *
    (H) Guide to initial disclosures.
    (1) If the information that must be disclosed pursuant to paragraph 
(c)(1)(iv)(A) through (G) of this section is not contained in a single 
document, or if the document is in excess of [RESERVED] pages, the 
covered service provider shall furnish the responsible plan fiduciary 
with a guide specifically identifying the document and page or other 
sufficiently specific locator, such as a section, that enables the 
responsible plan fiduciary to quickly and easily find the following 
information, as applicable to the contract or arrangement:
    (i) The description of services to be provided to the covered plan, 
as required by paragraph (c)(1)(iv)(A) of this section;
    (ii) The statement concerning services to be provided as a 
fiduciary and/or as a registered investment adviser, as required by 
paragraph (c)(1)(iv)(B) of this section;
    (iii) The description of all direct compensation, as required by 
paragraph (c)(1)(iv)(C)(1) of this section;
    (iv) The description of all indirect compensation, as required by 
paragraph (c)(1)(iv)(C)(2) of this section;

[[Page 13962]]

    (v) The description of any compensation that will be paid among 
related parties, as required by paragraph (c)(1)(iv)(C)(3) of this 
section;
    (vi) The description of any compensation for termination of the 
contract or arrangement, as required by paragraph (c)(1)(iv)(C)(4) of 
this section;
    (vii) The description of all compensation (and/or a reasonable 
estimate of the cost to the covered plan) for recordkeeping services, 
as required by paragraph (c)(1)(iv)(D) of this section; and
    (viii) For covered service providers described in paragraphs 
(c)(1)(iii)(A)(2) or (c)(1)(iii)(B) of this section, the description of 
any compensation, annual operating expenses, and ongoing expenses (or, 
if applicable, total annual operating expenses) set forth in paragraph 
(c)(1)(iv)(E)(1) and (2), as required by paragraphs (c)(1)(iv)(E)(1) 
and (2) and (c)(1)(iv)(F)(1) of this section.
    (2) The guide described in paragraph (c)(1)(iv)(H)(1) of this 
section shall identify a person or office, including contact 
information, that the responsible plan fiduciary may contact regarding 
the disclosures provided pursuant to this section.
    (3) The covered service provider shall furnish the guide described 
in paragraph (c)(1)(iv)(H)(1) of this section in a separate document.
* * * * *
    (v) * * *
    (B) * * *
    (2) A covered service provider must, at least annually, disclose 
any changes to the information required by paragraph (c)(1)(iv)(E), 
(F), and (H) of this section.
* * * * *

    Signed at Washington, DC, this 27th day of February, 2014.
Phyllis C. Borzi,
Assistant Secretary, Employee Benefits Security Administration, 
Department of Labor.
[FR Doc. 2014-04868 Filed 3-11-14; 8:45 am]
BILLING CODE 4510-29-P