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Department of Labor Update

Proposed 408(b)(2) Fee Disclosure Regulation Extension

June 2011
The U.S. Department of Labor's Employee Benefits Security Administration (EBSA) has announced that it will publish in today's Federal Register a notice proposing to extend and align the applicability dates for its retirement plan fee disclosure rules.

The department published an interim final 408(b)(2) regulation on July 16, 2010, requiring retirement plan service providers to disclose comprehensive information about their fees and potential conflicts of interest to plan fiduciaries. Although the new requirements are scheduled to apply to plan contracts or arrangements for services in existence on or after July 16, 2011, the department previously announced its intention to extend the deadline to Jan. 1, 2012. Today's proposal, when finalized, would make the extension official. The department recognizes that because a final rule is not yet in place, service providers may need additional time for compliance.

The department also published a final participant-level regulation on Oct. 20, 2010, requiring that employers disclose information about plan and investment costs to workers who direct their own investments. This regulation applies for plan years beginning on or after Nov. 1, 2011, with a 60-day transition provision. The department's proposal would amend the regulation's transitional rule so that employers would have up to 120 days to furnish initial disclosures to workers. This amendment will ensure that employers obtain the information they need from service providers in order to satisfy their disclosure obligations to their workers.

Summit Financial will continue to monitor the status of 408(b)(2) regulation and provide updates as we learn more. 
Additional information about the fee disclosure regulations is available on EBSA's Web pages at http://www.dol.gov/ebsa.
The materials created through August 2011 are when the professionals of Summit Financial were with Ogilvie Security Advisors Corp. The professionals of Summit Financial have not been with Ogilvie Security Advisors Corp. since August 31, 2011 and have no further affiliation with that organization.
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Securities and advisory services offered through Commonwealth Financial Network, Member www.finra.org and www.sipc.org, a Registered Investment Adviser. Fixed insurance products and services, as well as benefits consulting and plan administration, offered by Summit Financial Corporation are separate and unrelated to Commonwealth. Fixed insurance products and services, as well as tax services, offered by Summit Financial Strategies, Inc. are separate and unrelated to Commonwealth. This communication is strictly intended for individuals residing in the states of AL, AZ, CA, CO, CT, DC, DE, FL, GA, IL, ME, MD, MA, MI, NV, NH, NJ, NY, OH, OR, PA, RI, SC, TN, TX, VT, VA. No offers may be made or accepted from any resident outside these states due to various state regulations and registration requirements regarding investment products and services.