- Deadline for Participant Fee Disclosure Notice Postponed
- August 5, 2013 | Author: Eva A. Rasmussen
- Law Firm: Clifton Budd & DeMaria, LLP - New York Office
The Department of Labor (“DOL”) has extended the 2013 deadline for the participant fee disclosure notice to a date that is no later than 18 months after the initial disclosure. As a result of the postponement of the deadline, if the initial disclosure notice was made on August 30, 2012, the second annual disclosure would be due no later than February 28, 2014.
Plan administrators were required to provide detailed fee information to participants in participant-directed accounts in tax-favored plans (such as 401(k) or 403(b) plans) by August 30, 2012. Subsequent notices are required at least annually which was defined as at least once in a 12-month period. Thus, if the deadline had not been postponed, the second notice would have been due within 12 months of the date the initial notice was issued which could not have been later than August 30, 2013.
The DOL was responding to complaints that an annual August deadline did not allow plan administrators to combine the fee disclosure notice with other notices. It will be efficient and reduce costs to combine this notice with other notices that are generally issued at the end of the plan year. As a result of this extension, the second notice may be provided in November (for a calendar plan year) when enrollment and safe harbor notices are generally issued. This allows the plan administrator a one-time opportunity to reset the deadline for the annual fee disclosure notice.
An employer who has already incurred administrative costs to distribute the 2013 fee disclosure notice by August 30, 2013, will have a one-time opportunity to distribute the 2014 notice within 18 months of the distribution date for the 2013 notice.
The DOL is also considering allowing a 30-day or 45-day window period for the distribution of the annual fee disclosure notice, rather than having a deadline that is a fixed date.