- One-time Chance for Plan Sponsors to Reset Comparative Fee Chart Disclosure Date
- July 25, 2013
- Law Firm: Eaton Peabody - Bangor Office
In August 2012, in compliance with the participant-level fee disclosure regulations issued by the U.S. Department of Labor (DOL), the vast majority of sponsors of §401(k) and §403(b) plans for the first time provided to plan participants detailed participant-level fee disclosure. This disclosure, which included a required comparative chart, illustrated the various fees charged with respect to the investments and operation of the retirement plan as of 12/31/2011. The regulations require that this fee disclosure, in particular the comparative chart, be provided to participants annually. Sponsors of plans operating on a calendar year basis had to furnish their first chart no later than August 30, 2012. Their second chart, in the absence of any regulatory relief, is due no later than August 30, 2013, and that will continue to be the disclosure deadline for all subsequent years.
The August deadline was the result of happenstance, the publication, effective and compliance dates of the regulations. In response to multiple requests from plan sponsors and their financial services vendors for the ability to change the disclosure date for 2013 such that the timing of fee disclosure can be better coordinated with other annually required plan disclosures, the DOL announced on July 22 a temporary enforcement policy that will allow plan sponsors to reset the timing for the annual distribution of the investment comparative chart that they are required to furnish to plan participants. Under the enforcement policy contained in Field Assistance Bulletin 2013-02, http://www.dol.gov/ebsa/pdf/fab2013-2.pdf , plan administrators may reset the deadline one time, for either the 2013 or the 2014 comparative chart, provided that (i) the responsible plan fiduciary determines that doing so will benefit the plan's participants and beneficiaries and (ii) no more than 18 months pass before participants receive their next comparative chart. This enforcement policy does not alter a plan administrator's obligations under the regulation to timely update the investment information that is available at the plan's internet address or to notify participants about changes to investment information, such as a new plan investment option.
Plan sponsors should consider whether it makes sense to change the participant-level fee disclosure deadline to shortly after the end of the plan-year. If the 2012 disclosure was made in August 2012, the reset deadline will be in February 2014. If you already have completed your 2013 disclosure or intend to do so by your current deadline, you may reset the deadline for the 2014 disclosure by delaying it until February 2015.