Concerns mount about planned ERISA changes. Some say DOL's proposed changes to 408(b)(2) of ERISA -- especially those dealing with advance compensation disclosure and conflict of interest reporting aspects -- are overly burdensome and redundant.

"It switches the burden from the employer to the service provider to actually provide the information," says Larry Goldbrum, executive VP and General Counsel of The SPARK Institute.

Under many 401(k) plans basic fees are already disclosed to plan sponsors, but these regs would require further disclosure around the relationships that 401(k) service providers have with companies that underwrite investments for the plans.

If a broker or adviser is providing services, even if he is not acting as an investment adviser or an investment fiduciary, and he receives indirect compensation from a mutual fund, that would need to be disclosed.

"Even if the broker isn't a fiduciary to the plan, under the new regulations the broker would have to disclose that it's receiving 12B-1 payment from the mutual fund," says Goldbrum.

For advisers who are not completely transparent this responsibility could mean a lot more work, especially if a broker sells a bundled provider's products. Currently, it is not clear which party is responsible for making the disclosure about each bundled service and the corresponding fee, and who is responsible for entering into a contract with the employer.

"It may turn out that you have an unaffiliated broker selling an unaffiliated company's retirement products. That broker may actually have to enter into a contract or agreement with the employer and be subject to all of these disclosure requirements," says Goldbrum.

In addition to the disclosure, the regulations would require the service and fee agreement between plan sponsor and provider be fully mapped out before the services are provided. That seems fair enough -- but experts say it's not as simple or transactional as it sounds.

"These disclosure requirements would obligate the service provider to make disclosures about the investments. It's kind of hard to make disclosures about investments that haven't been picked at the time you're hired," explains Goldbrum.

If an adviser cannot fully disclose all compensation he will receive related to the plan, the regulation suggests providing formulas or estimates. It seems impossible for advisers to supply a formula at the time of the contract singing, when funds have not been picked, and therefore fees and expense ratios cannot be determined.

"I mean you could try and give an estimate by saying, 'for international funds the typical expense ratio is a range from x to y,' but that's not what I think those estimate provisions are intended to suggest," says Goldbrum. "That is something we hope the DOL can address in a further clarification."

Those are just some of the issues that have the retirement services industry concerned about the regulations the agency is trying to finalize by the end of 2008. During the testimony period, held March 31 and April 1, more problem areas came to light as 401(k) service providers argued that they should not be required to state whether or not they are ERISA fiduciaries of the plans.

The fiduciary piece applies to broker-consultants as well. Whether or not an adviser is acting as a fiduciary depends largely on the services he is providing the plan sponsor. If the adviser is in a relationship where he is not acting as a fiduciary -- providing limited education and guidance about fund selection -- it is possible a plan sponsor would turn away an adviser because he lacks the "fiduciary" label.

The proposed regulations could also cause problems in the client/adviser relationship with its conflict of interest disclosure rules. The proposal requires brokers to disclose any potential conflicts of interest that they may have, which Goldbrum says may become needlessly alarming to plan sponsors.

"We agree that employers should know if there is a potential conflict of interest. But the way the bill is written we think it can be simplified and made more workable by simply requiring that anyone dealing with a plan disclose whether or not they have other financial interests in the dealings with the plan," says Goldbrum.

"A broker should describe all steps they have taken to mitigate a potential conflict of interest, but … [it] shouldn't require that all providers describe all potential conflicts of interest they may have because many of them may be solved through exemption," he adds.

In a letter to the DOL, Hewitt also felt the conflict of interest provisions were extreme.

"Both fiduciaries and service providers have always had to be alert to possible conflicts caused by other business relationships that might result in a prohibited transaction under ERISA section 406. Service providers may be subject to costly penalties if found to be engaged in a prohibited transaction. Thus, existing law already provides a significant deterrent," wrote Cynthia W. Milstead, on behalf of Hewitt.

To complicate things further the DOL is not the only agency looking at the issue. Congress also seeks to correct some retirement plan wrongs.

The 401(k) Fair Disclosure for Retirement Security Act (H.R. 3185), sponsored by Rep. George Miller D- Calif. cruised through the House Committee on Education and Labor in late April. Still it seems the Miller bill may not go anywhere due to election year distractions and the DOL's proceedings on fee disclosure.

"I think we'll definitely get regulation implemented. There's no doubt that the status quo is going to change," says Goldbrum.