Required DisclosuresTto Retirement Plan Participants

Plan administrators for most defined contribution retirement plans have just a few more weeks to begin complying with a U.S. Department of Labor (DOL) regulation that requires disclosure of detailed plan expense and investment information to participants. In most cases, administrators should have received at least some of the information from covered service providers before July 1, 2012 (see our prior alert here).

Covered Plans and Participants

The regulation covers participant-directed individual account retirement plans other than those funded with IRAs and some 403(b) plans frozen before 2009. If participants direct the investment of some, but not all, plan assets, the plan administrator does not have to provide the prescribed information about investments directed by a plan fiduciary. The required information must be provided to all plan participants, including former employees with account balances and current employees who are eligible to participate but not enrolled.

Initial/Annual Disclosures

In most cases, the regulation requires disclosure of three types of information.

Plan Information includes a summary of the rules governing participant investment directions, identification of any "designated investment alternatives" and "designated investment managers" available to participants under the plan, and a description of any "brokerage window" or similar arrangement that enables participants to select investments other than those designated by the plan. This information can be furnished in the plan's summary plan description (SPD) or quarterly benefit statements. Any change in required plan information must be communicated at least 30 days, but not more than 90 days, in advance. However, there is an exception for unforeseeable events and circumstances beyond the control of the plan administrator, in which case the notice must be furnished as soon as possible.

Expense Information includes explanations of any general plan administration fees which may be charged against participant accounts and the bases for their allocation. It also includes any individual expenses that can be charged against a participant's account, such as a fee for originating a participant loan. As with plan information, this expense information can be supplied in an SPD or quarterly statement, and changes are to be communicated at least 30 days, but not more than 90 days, before they take effect.

Investment-Related Information must be provided for each...

To continue reading

Request your trial

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT