Call for Transparency: Federal officials want to require companies that
provide services to employee benefit plans to disclose conflicts of interest.
The Employee Benefits Security Administration, part of the Department of Labor,
proposed in December to require “certain providers of services” to benefit plans
to disclose fees, compensation or any other conflict of interest that “may
adversely affect the service provider’s performance.”
The new rule could cover 401(k) service providers, health plan fiduciaries
like HMOs and pharmacy benefit managers, consultants, third-party administrators
and financial investment advisors. The proposed rule could also cover those
hired to provide actuarial, accounting, auditing and legal services. The
Employee Benefits Security Administration, which listed the proposal in the
Federal Register on December 13, estimated the cost of compliance at $52 million
in the first year, and $36 million annually thereafter. Written comments on the
proposed rule must be received by February 11, 2008.
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