Fee Disclosure Timing Options.
Byline: Rebecca Moore
Summary paragraph: DOL offers one-time deadline reset
Under a temporary enforcement policy, the U.S. Department of Labor (DOL) is permitting plan sponsors to reset the timing for the annual distribution of the investment comparative chart they must furnish to plan participants.
The new policy, contained in Field Assistance Bulletin (FAB) 2013-02, allows plan administrators to reset the deadline one time-for either the 2013 or the 2014 comparative chart, should the responsible plan fiduciary determine that doing so will benefit the plan's participants and beneficiaries, and provided that no more than 18 months may pass before participants receive their next comparative chart. This enforcement policy does not alter a plan administrator's obligations under the regulation to regularly update the investment information available at the plan's Internet address or to notify participants about changes to investment information.
Most plans would have furnished this year's annual chart by August 30. The DOL's Employee Benefits Security Administration (EBSA) is aware that some plan administrators may already have incurred administrative costs and taken steps to furnish their 2013 comparative chart no later than August 30. These administrators, if they wish, may furnish the 2014 comparative chart no later than 18 months after furnishing the prior comparative chart in compliance with the regulation.
According to EBSA Assistant Secretary Phyllis C. Borzi, the enforcement policy was provided "in response to requests from a number of employers who [said] it [would] be better for their workers if the comparative chart could be mailed out a little later in the year, along with other disclosures. But otherwise, all the protections in the rule stay in place."
The department's participant-level fee disclosure regulation-implemented last year-requires that administrators of defined contribution (DC) retirement plans disclose information about plan investment options, such as fee and performance information, to participants and beneficiaries at least annually. Plans operating on a calendar year had to furnish their first chart no later than August 30, 2012, and their second no later than this August 30. For those administrators that reset their submission date for their second charts as outlined above, the 2014 and all subsequent charts must be submitted "at least annually" to be in compliance.
Many other plan disclosures, such as pension benefit statements, are disclosed later in the calendar year. Permitting a one-time "re-set" of the deadline will allow plan administrators to align the comparative chart with other participant disclosures.