IMHO: Executive "Order"

Just hours after the inauguration of President Barack Obama, White House Chief of Staff Rahm Emanuel issued a memorandum ordering a temporary moratorium on any regulations set to be published in the Federal Register "until it has been reviewed and approved by a department or agency head appointed or designated by the President after noon on January 20, 2009." (see " White House Executive Order Snares Fee Disclosure, Advice Regs ").   

That "snared" pending DoL proposed directives requiring service providers to disclose "fees, compensation, and conflicts of interest" to fiduciaries of 401(k) and other benefit plans (see " EBSA Puts Out Provider Fee Disclosure Proposal "), as well as a fee disclosure regulation for participant-directed individual account plans, which Labor had published in proposed form last July (see " EBSA Finishes Regulatory Package with Participant Disclosure Proposal ").   Not directly impacted perhaps, but a near certainty to be influenced by the shift in control will be the recent finalization of rules regarding participant advice under the Pension Protection Act (see  DoL Finalizes Rules on Investment Advice ).

Now, it's not unusual for an incoming administration to issue this kind of directive, and, frankly, it's common sense.   After all, if it's waited until the final weeks of a presidential term to be put into law, why wouldn't an incoming administration want at least a chance to make sure it fits with their agenda (more ominously, it's not as though outgoing administrations haven't been known to create problems/mischief for the next set via the implementation of last-minute regulations).

Having said that, there are some important issues and policies behind these rules - fee disclosure and participant advice - and a period of extended uncertainty likely won't serve anyone's interests.   On the other hand, it's not like these issues - and potential solutions - won't be a focus for the new Congress and Administration.   It is, however, unlikely, IMHO, that they will present the same solutions contemplated in the still nascent regulations.

"Safe" to Say?

I think it's safe to say that we can expect a push for even more fee disclosure - and not just to plan sponsors.   Plan sponsors certainly need more information about the fees and expenses associated with their programs, and they could use some help in getting those answers more readily than they do at present.   On the other hand, the proposed regulations were hardly a panacea for the problem.   IMHO, they were at best a practical response to the realities of the marketplace as DoL understood them at the time.   Anyone who thought those were going to provide a completely consistent, transparent, and readily readable presentation of that information simply wasn't paying attention.   But it was a start.